Grupo Aval Acciones y Valores S.A. ADR (Each representing 20 preferred shares)

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.A. is an issuer of securities in Colombia and in the United States . 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 Evolve Financial Conglomerate. The consolidated financial information included in this document is presented in accordance with IFRS as currently issued by the IASC. 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, IEM Azores, 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. 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-Watero, 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 Bogotá's Chief Economist. I will now turn the call over to Ms. Maria Lorena Gutierrez-Watero, Chief Executive Officer. Ms. Maria Lorena Gutierrez-Watero, you may begin.

Good morning, everyone, and thank you for joining us for our second quarter clinical conference call. I am here with Diego Solano, our CFO, Camilo Pérez, Chief of Economies of Banco de Bogotá, Paula Organ, our corporate VP of Sustainability and Equity Services, and other people of the company. Let me start with some of the highlights. Today, for the execution of our strategy, we are taking actions to remain and strengthen our 19 teams at the first and second levels, both at our main businesses and our holding companies. Juan Camilo Angel designed a few of our agents after 30 years of training. Gerardo Hernández was appointed as . Gerardo is the former chief legal officer As part of the board of directors of the Colombian Central Bank and as a superintendent of science. We also appointed Elena Lopez. Elena has over 20 years of experience in the private and public sector. She has lived into 30 years of her career as a professor and scientist. In July, we strengthened our structure at the holding area with the creation of three new corporate vice presidents. The VP of the Community and Strategy Project led by Paula Udang and the Corporate VP of Financial Advances and Efficiency led by Jorge Cartan. Paula is the Corporate VP of Strategy and Community at Corte Colombiana, and she is the former financial superintendent. They both have more than 20 years of experience in the policy and policy sector. I am proud to say that the personal and professional qualities of our students, we continue to strengthen our market position and have achieved our group of our long-term strategic goals. Now, I will invite Paula to go over additional ESG achievements during this course. Thank you, Magdalena, and good morning to you all. First of all, I would like to congratulate Banco de Bogota on its issuance of $500 billion in sustainable senior bonds. Also, our banks presented their Principles of Responsible Banking report as part of their ADAC Unified. This implies that all our banks will have plans to move forward in terms of climate change, gender equality, financial inclusion, and sustainable finance among others. During this quarter, we received several recognitions for our advances in terms of diversity and inclusion. Grupo A ranked sixth in Latin America for its commitment in these areas, and Banco de Oaxaca ranked first. But the Colombiana was also recognized for its work towards closing the generational gap, and so the need successfully launched a drug site for employability of senior citizens. As for reaching advances in environmental input, Banjo-LaCiencias celebrated 30 years of the Planeta Azul Prize that recognizes initiatives aimed at water preservation and protection. Also, our 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 input, in addition to our programs implemented by our subsidiaries, we continue advancing in the Nucleon Aguajilla program. Up to now, we have benefited more than 340 families, that is 3,500 people, in clean drinking water solutions as well as food security. Finally, I would just like to highlight that at Grupo A, sustainability is not just a commitment. It's a core principle that drives our every decision. It's dedicated to building a future where financial strength and social and environmental resources go hand in hand, ensuring our positive interest for generations to come. We continue advancing the determination towards our sustainability interests and goals. Thanks, Paula. Now, on the macro side, let me mention some relevant issues that we've heard. Inflation continues to trend down in the U.S. Third, supporting our worldview upon our work. Careful central banks that could raise taxes, where you can really raise from current levels above 6% and continue to focus on banking sector and economic growth. Economic growth has continued to be low, and investment remains well below the social level. The country's fiscal accounts remain under pressure, The government is working on a second wave of pending cuts and considering a tax reform for financial loans, including for charging to additional sectors while lowering the general corporate tax rate. Camilo will further comment on this and share our view on the panel.

Thank you, Madam Mayor. Good morning to all attendees. Economic activity has turned out better than expected at the beginning of 2024. It's an outgrowth of 2% so far this year from 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. The improvements have been, secondly, in local context, very dynamic in sectors such as public administration, agriculture, recreation and utilities, especially electricity, have also explained the positive surprise in economic performance. In contrast, most regional sectors of the economy, such as construction, commerce, and manufacturing, maintain contraction rates at the beginning of the year. This is evident at the current dispersion in sector performance. Growth in 2024 is likely to exceed the 0.6% of 2023. However, it will remain below that of the long term. Although recovering 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 system and has also reduced the outlook for GDP growth. The platform aggregate investment rate as of March 2024 approached its lowest level since the beginning of the series in 2005, that is, 13% of GDP. It did 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 2% and 3.5%. Nevertheless, a modest sign from the consumers is that the worst is behind us. The national employment rate showed an annual increase of just 0.2% response in the first half of 2024 to 11.1%, benefiting from higher public and service 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 rate household fire purchasing power 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 readings of inputs of consumer goods in the first half of the year. We have a greater estimate of growth for 2024 for around 1.75%, against a consensus just below that level. We will get the official numbers for growth in the second quarter later on today. In July, inflation will finish downward trend, falling below 7% after being stuck just above this level during the second quarter. Also, in this inflationary path, we will continue the indexation of surpluses, especially rents, the potential depreciation of the economy and debt, and the increase in business prices will only allow inflation to reach a central price target between 2% and 4% and reduce it up in time. For the year, our forecast for inflation to trend forward is 5.6%. The aforementioned macroeconomic balance has explained Banco de la República's caution in its process of easing monetary policy, where in July it completed four meetings with 50 basis points rate cuts. However, given the improvements in inflation and the convergence of extension to their target, the basis rate cut 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 rate to reach 8.75%. Instead of the 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 sales abroad, especially inputs and capital goods, while the country has seen greater inflow of dollars from remittances and tourism. In net terms, these situations have resulted in a lower need for dollars, which have provided some support to the exchange rate. The other factors of pain to the currency behavior are potential interest rate cuts by the federal reserve. the United States election, with its situation and local uncertainty. If they talk too late, the Republican Donald Trump wins the presidency. If its situation deteriorates further and local political demands return, the exchange rate will tend to go down. For the time being, the aforementioned forces have found a fragile balance that enables a flat exchange rate with an upward bias in the midst of a recession period in the United States. Even though the government has traded out these accounts with a significant spending tax, risks are still present and compliance with the fiscal rules is at stake, as indicated by the autonomous committee of the fiscal rules. For the remainder of the year, business started to tax for tax collection to newly established targets, and for the government to restrain its spending in order to reach concerns about the sustainability of public finances. In any case, trading agencies are alert to any new developments, while the markets are already pricing a lower level for the foreign trading. Fiscal risks remain for 2025 due to potential budget financing issues. There is a need for the approval in Congress of our financing law and an earlier end to the transition period of the fiscal year. As of today, interest regarding the financing law are still limited. That sums up our economic view. Thank you. Thank you.