Grupo Aval, a leading banking group with a diversified strategy

The financial sector plays a vital role in the economy of different countries around the world, as it channels funds from savers to those who need these resources. The financial sector is extremely important for the growth and development of a country's productive sectors. Some authors affirm that by observing a country's financial system, it is possible to infer its development.

In 2004, financial services in Colombia had a 15% share of the Gross Domestic Product (GDP), and during these two years of the pandemic it has been one of the best-performing sectors. 

According to a report by the Economic Commission for Latin America and the Caribbean (ECLAC), a competitive economy cannot exist without an efficient and technologically advanced services sector, as it is the foundation for a country's development. 

Today, the Colombian financial system is mainly concentrated in three main financial groups: Bancolombia, Grupo Aval, and Davivienda. 

Grupo Aval in Colombia

Grupo Aval is the largest financial group in Colombia and one of the leading banking groups in Central America with more than 351.7 billion Colombian pesos in total assets - 224.4 billion in Colombia and 126.2 billion in Central America.

By December 31, 2020, this financial group had 17 million banking clients, of which 13.1 are from Colombia and 3.9 from Central America, 14.9 million clients in pension funds, and a market capitalization of $26.6 million.

Likewise, at the end of 2020, it had 52,812 points of attention: 40,942 in Colombia (1,258 branches, 3,383 ATMs and 36,301 others) and 11,870 in Central America (706 branches, 2,179 ATMs and 8,895 others). 

Through its four banks (Banco de Bogotá, Banco de Occidente, Banco Popular, and Banco AV Villas), Grupo Aval has become the leader in Colombia in traditional banking, with a 25.9% share of assets in Colombia and 24.8% in gross portfolio as of September 2021. It also has presence in the investment banking business through Corficolombiana and is the leader in the private pension and severance administration business through Porvenir. It has a 68.7% share in Banco de Bogotá, 72.3% in Banco de Occidente, 93.7% in Banco Popular, and 79.9% in Banco AV Villas. In the same sense, among its subsidiaries, consolidated by Banco de Bogotá (BdB) is BAC and others. 

The composition of Grupo Aval's assets by geography is 64% in Colombia and the remaining 36% in Central America as of September 2021. Classified by business, this financial group has most of its assets focused on universal banking at 86% - 13% in financial corporations and 1% in pension funds, as of September 2021. 

As can be expected, most of its profits come from Colombia, at a level of 65%, and in terms of its activities, it is traditional banking that has the highest yield, being 69% as of September 2021. However, unlike its assets, both the pension funds and the financial corporation have an important percentage in terms of profits, having a participation of 14% and 17%, respectively, at the end of the third quarter of 2021. 

Grupo Aval's value proposition is based mainly on diversification, as it not only has a variety of activities within the banking sector but also has a wide range of activities in other sectors. The main means by which Grupo Aval achieves this diversification is Corficolombiana, which serves as an important investment vehicle. Through it, Grupo Aval has access to the real sector, investing mainly in the road construction and operator sector, making it the largest in the country. Another sector in which it invests is the energy and gas sector, with a participation in Promigas -the largest distributor in the country- of around 51-52%. 

It also has a presence in both the agricultural and hotel sectors, with activities not only in Colombia but also in other countries such as Peru and Panama. 

As a consequence of this diversification, Grupo Aval has been able to attenuate and maintain its net profits in the face of economic shocks, such as the one experienced during 2020 due to Covid-19. 

Grupo Aval is present in 7 countries including: Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, and, of course, Colombia.

In terms of market share, Grupo Aval is number one in deposits in both Central America and Colombia, with a 25.5% share in this country at the end of September 2021. Likewise, it is the financial group with the highest net profit in Colombia as of September 2021 and in Central America as of March 31, 2021, making it undoubtedly the leader in the Colombian market.  

Taking into account the technological changes that have marked a growing trend over the years, Grupo Aval has remained at the forefront by innovating and proposing new digital instruments and tools. In 2018, it presented its Digital Innovation Lab (ADL), which brings together several banks and entities with the aim of generating new initiatives and technological solutions for users. 

The objective of the ADL is not only limited to seeking digital solutions to existing processes, but also seeks to generate products from scratch or design new digital strategies for the entities.


Although Grupo Aval is currently the leader in the financial sector, this is the result of 50 years of detailed management, with conservative risk management and clear objectives. 

In the period 1971-972, Aval entered the banking sector with the acquisition of Banco de Occidente and also founded the Corporación de Ahorro y Viviendas de Las Villas. Subsequently, in 1991-1998, Banco de Bogotá was acquired, the Porvenir Severance Pay Fund was founded and, subsequently, its portfolio was complemented by becoming a Pension and Severance Pay Fund. Finally, Banco de Comercio was acquired and merged with Banco de Bogotá.

From 1997 to 1999, Banco Popular and Ahorramás were acquired. Likewise, financial corporations were acquired which later merged, giving rise to Corficolombiana. 

At the end of the 1990s, the group we know today began operations and launched its first stock offering on the Colombian Stock Exchange (BVC). A few years later, Grupo Aval carried out its second stock issue in the Colombian market and acquired Megabanco, Banco Aliadas, and Banco Unión Colombiano. 

In the 2010-2011 period, Grupo Aval underwent a strategic reorganization aimed at international expansion and it is here where it obtained the registration before the Securities and Exchange Commission of the U.S.A. Furthermore, it acquired BAC Credomatic and acquired participations from related parties to consolidate 93.7% of Banco Popular. In this same period, a local issuance of US$ 1.1 billion was made, representing the largest placement in the Colombian capital market by a private company. It also issued preferred shares for COP$ 2.08 billion.

From 2012-2013 Grupo Aval and Banco de Bogotá issued bonds in the international market and made two acquisitions: The first was BBVA Horizonte and the second BBVA Panamá and Grupo Reformador in Guatemala. Likewise, Grupo Aval issued common shares for $2.4 billion.

In recent years, Grupo Aval has had one of the most important achievements in its history, issuing preferred shares in the form of ADRs on the New York Stock Exchange (NYSE). Similarly, from 2014-2018 it increased its direct participation in both Corficolombiana and Banco de Bogotá and Banco de Occidente.  Finally, in the 2019-2020 period, it launched bonds in the local market for $400 billion and in the international market for a value of US$1.0 trillion. In this same period, Grupo Aval closed the acquisition of Multi Financial Group of Panama.

Corporate Social Responsibility

Grupo Aval, having a strong presence both nationally and internationally, is aware of the importance of sustainability and therefore contributes to the development of the environment through financial education, social investment, and environmental management with its different entities for profitable and sustainable growth. 

The sustainability model is made up of five main pillars: corporate governance, risk, and ethics; economic performance; corporate efficiencies and innovation; human talent; and environment with positive impacts. 

In terms of sustainability, Grupo Aval has strongly shown its commitment, moving from the 94th position in 2019 to 68th in 2020 in the Merco ranking, Corporate Responsibility and Governance, 10-Year’s edition.  

In terms of Corporate Governance and Risk, Grupo Aval seeks excellence in its governance structure, risk management, and internal control, as well as maintaining a framework of ethics within it. Likewise, it is committed to talent, constantly seeking to improve the well-being and quality of working life, attract, retain and develop talent, foster inclusion and diversity, promote pride in belonging to the group, and a sense of belonging. 

With respect to the environment pillar, which includes society and the environment, it pursues financial inclusion as well as promotes social investment and is concerned about the environment.

Author: Marijose Vazquez