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

Welcome to Grupo Aval's second quarter 2026 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. 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 Bogotá's subsidiary, Multifinancial 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 Multifinancial Group Inc., MFG, the parent company of Multibank Inc. On March 18, 2026, After obtaining the required regulatory authorizations and fulfilling all agreed conditions precedent, the transaction was completed. For comparability purposes only, we have prepared and present supplemental unaudited pro forma financial information for the periods prior to 4Q25, which reflects the reclassification of the operations relating to MFG as non-current assets and liabilities held for sale and discontinued operations. The supplemental unaudited pro forma financial information is not intended 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, 2026, 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 in the SEC. Participants 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 updates or 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 solicitation, 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. 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.

Thank you. Good morning, everyone, and thank you for joining us for our second quarter 2026 conference call. I am here with Diego Solano, our CFO, Camilo Perez, Chief Economist of Banco de Bogota, and Ernesto Gutierrez de Pineres, Chief Technology Officer. Before discussing our quarterly results, I want to address the earthquake that took place in Colombia this week. On behalf of Group Aval, our thoughts are with everyone affected. Our priority has been the safety of our employees, our clients, and communities we touch. We took immediate action to leverage our transactional and logistical capabilities to support emergency relief efforts. We enabled our network of over 2,700 ATMs Mobile Banking Platforms and DALE. To China donations to the Colombian Red Cross and the Colombia Un Solo Corazón Initiative. Through CENCIA, a coffee Colombiana investment, we also set up El Campini Stadium as a collection center for essential supplies. Yesterday we have more than 1,000 people there in the city. Regarding our operations in the areas most affected by the earthquake, We have temporary service interruptions in several service points to ensure the safety of our clients and employees. In addition, these regions were initially affected by widespread electricity and communications failures. Our operations and services have been progressively restored. Turning now to our corporate highlights. Our attributed net income reached 577 billion Colombian pesos, up 17% compared to the second quarter of 2025, and the highest quarterly result since March 2022, reflecting the continuous trend of profitability. ROA reached 12.7% for the quarter. The quarter was marked by solid loan and deposit growth, a strong contribution from our investment portfolio, and for remaining stable asset quality and continued efficiency gains. In addition, we continue to deploy a strategic initiative focused on deepening retail customer presence and strengthening our payments ecosystem. Through our lives with Visa, we deliver unique customer experiences, reaching more than 750,000 participants in the brand activities launched during the FIFA World Cup 2026. In parallel, our banks have been working in QR-based instant payment collection solutions for businesses for their Enhancing Our Transaction Banking, Offering and Deposits to a Franchise. As for the recent development, on July 31st, Banco de Bogota completed the transfer of the retail banking and supplier releases and contracts from Banco Itaú in Colombia. The transaction has more than $250,000 Retail banking customers and reinforces Banco de Bogota's strategy to grow and strengthen its retail banking franchise, especially in the admin segment. On June 19, Grupo Wild Holdings, Banco de Bogota, Banco Occidente, and Banco Popular contributed their investments in Corri Colombiana to a special-purpose vehicle. Each entity retains its indirect stake in Corfy. This transaction is primarily aimed at simplifying Corfy Colombiana's ownership structure, consolidating the stake into a single jointly controlled vehicle within Group R. Diego will touch on this in more detail later on. We will begin this call discussing some key elements. of our technology strategy, a key driver of Grupo Aval's reformations and future growth. Before passing the call on to Ernesto Gutierrez, our chief technology officer, I want to highlight this. At Grupo Aval, we are deploying a technology strategy to support factory innovation and more efficient operations and to improve our customers' experience. This strategy seeks to build advantages to compete in a more digital and connected financial system shaped by data analytics and artificial intelligence and to redirect operational capital transformation investment aligned with best practices for the financial industry. To achieve this result, we are working on four key techniques. First, improving our service platform to allow us to better understand and serve our customers. Third, re-engineering our digital course to accelerate our time to market. Third, migrating to a group of our cloud, a modern and resilient platform that will support this evolution by leading up our adoption of new solutions, improving the resilience of our operational platform and capturing synergies across the globe. and finally strengthening our data platforms to improve real-time decision-making. I will turn the call over to Ernesto who will provide additional color on our technology strategy. Ernesto?

Thank you, Maria Lorena. Good morning, everyone. I would like to give you a brief update on the execution of our technology strategy and more importantly, and how it is beginning to translate into growth, structural efficiency, and resilience across the Group of One. As Maria Lorena has outlined, technology, innovation, data, and institutional intelligence are key neighbors of our long-term strategy. Our focus now is execution. We start from an important competitive advantage, our scale. Group of One is a multi-entity financial group and our technology strategy is designed to turn that scale into economic advantage by building shared capabilities that can be developed once and developed across the group. This is the foundation of our Common Digital Code, a secure, scalable, and offering architectural design to operate increasingly in real time, connect with partners and ecosystems, and prepare the group for the opportunities created by Open Finance and Open Data. We are restituting this strategy across four main pillars. The first one is Avanti Safety. Knowledge and serving our customers first. Avanti Safety is creating a more integrated view of our customers across the group, allowing us to improve continuity across channels, personalized interactions, and processing increase our ability to across sell products and service across our entities. The business objectives is straightforward, higher conversion and stronger retention and greater value for a customer. Artificial intelligence is becoming an important part of this strategy. For example, in next hour, BTO company will take the 30% of a person installs plus to be handling through the AI enabled solution. Digital increasingly escalating our response capacity while maintaining the service quality and customer experience for our customers. At the same time, digital adoption continues to expand. Today, 67% of our customers are ready to end their transactions through their digital channels. The second point is our digital cost. We are accelerating our digital bid. We are building shared capabilities to design, launch, and escape digital products faster, while progressively reducing dependency on traditional core systems and making it easier to connect with the external ecosystem and partners. Our new digital private loan solution is on track to go live in the fourth quarter of the year. In parallel, we continue to advance to our capabilities for credit cards and customer loans and retail banking transactional services. Together, this initiative addresses a significant part of the financial needs of our retail customers. The value proposition is clear, short time to market and lower structural costs for profit. And importantly, these are not capabilities designed for a single entity. They are being built to be reused and inspired across the group of us. The third point is DevOps, turning data into better decisions. Devos is our management intelligence platform and it fits to serve as a digital screen of our banking operations. The preferred share is already integrated nine business dimensions into a common management view. Through this integration with Augusta, our physical platform, we are increasing our ability to understand relationships among customers, products, and companies across the group of us. The objective is to move progress from analyzing what happened to understanding what is happening and what may happen next. This will support various decisions in areas such as customer management, risk, capital allocation, and operational efficiency. The last point is Aurora. Aurora is our top platform strategy. Aurora is a platform through which we are modernizing the technology practices for the group. This architecture combines public cloud capabilities including AWS and Microsoft Azure with private cloud capabilities developed through our partnerships with IBM and Kindle. The objective is to improve resilience, availability, scalability, and security while structuring we are releasing our infrastructure obsolescence. Aurora also changed the economics of our infrastructure moving Progressive from a recurring capital-intensive technology advance toward a more flexible and management capability model. But there is another important dimension to Aurora. The efficiency generated by Aurora will be reinvested to help fund the next stage of our technology transformation. This creates a virtuous cycle in which transformation generates savings, and those savings help to fund the product transformation. In that sense, Aurora is not only modernizing our feedback tool. It's also helping us build a more sustainable funding model for our broader technology agenda. Taking together these four fields are designed to deliver three fundamental outcomes. The first is growth. Faster product launch, stronger digital capabilities, better customer knowledge, and greater ability to depend The second point is structural efficiency. We are redefining the way that the Group Aval operates through the more real-time processing, various automation, increasing use of artificial intelligence, short platform, and lower levels of manual intervention. This is not one-time cost-reduction effort. It's about creating a more efficient operational model for Group Aval. And the third part is Trust and Resilience. Security, control, data governance, and operational continuity remain embedded in the design of a recovery that we build. In the financial services, trust is a prerequisite for sustainable growth. All of this supported by a strong principle, capital discipline. We are moving from a management technology as an inventory of products to prioritizing investments based on strategic contributions, expected returns, and value creation. In summary, Grupo Valor is moving from strategy to execution. We are scaling shared capabilities across the group, developing artificial intelligence into a real operation, accelerating Our digital products, roadmaps, and using data to make better decisions. And importantly, we are doing this with a model in which technology increasingly generates efficiencies that help us in our own evolution. Technology is becoming a business capability for Grupo A, with the customers always in the center. Thank you.

Thank you, Ernesto. Let me walk you through the key microeconomic developments of this work. The global environment remains challenging during the course. Oil prices is after seeing fire and the U.S.-Iran agreement in June. However, renewed tensions we should face in early July showing that the situation remains fragile, weighing on global growth expectations for the year. In Colombia, economic activity continues to expand, although Aval. Aval. Aval. Inflationary pressures increased during the quarter, with annual inflation reaching 6.0% in July, moving further up from the central bank's target. Markets have raised their expectations on digital inflation, putting pressure on the central bank's decisions. At the same time, the Colombian peso continues trending, supported by remittances, inflows, and a weaker US dollar environment, helping mitigate important inflation pressures. Against this backdrop, Banco de la República raised its policy rate to 12% in June. However, at its most recent meeting in July, the board decided to keep rates unchanged. Even though further rate increases can be expected, these polls reflect prudent stance to assess the cumulative effects on the monetary tightening already in place and to evaluate income economic data. Looking forward, Colombia has significant opportunities to accelerate investment and productivity. Materializing this potential will require from the new administration improvements. In addition, restoring a credible path to reverse fiscal deficit trends will be essential to building confidence required to support sustainable growth in Colombia. With that, I will turn the call over to Camilo. who will provide additional color on our economic outlook. Camilo.

Thank you, Maria Lorena. Good morning. The Colombian economy raised its growth exceeding 3% in the second quarter of the year, marking its highest expansion in almost a year. While positive, growth was supported by temporary factors. The first of these is the increased household spending associated with the FIFA World Cup 2026. This event boosted economic activity through greater dynamism in commerce. Clothes, Entertainment, Restaurants and Sports Development. Likewise, the public administration continued to contribute to economic activity due to increase in personnel at the National Dairy Street for the local elections, as well as higher budget execution, which reached a four-year high, significantly contributing to the growth of national activity. Another sector that performed well was utilities, driven by the increasing energy demand from households due to intensive use of air conditioning and refrigeration systems. Given the high temperatures experienced in several cities across the country. In contrast to these factors, to these sectors, agriculture, mining, manufacturing, and construction continue to exhibit weak or negative results. In agriculture, the weather and high input costs were detrimental. In construction, high interest rates and the slow execution of major infrastructure projects weakened the sector. In mining, the decline is structural. And in manufacturing, the appreciation of the peso has harmed the sector's competitiveness. This suggests that the economic recovery maintains a K-shaped dynamic in which some sectors show improvement while others continue to lack. For the remainder of the year, tidal local financial conditions, the diminishing effects of the transitory factors, the impact of the war in the Middle East, the arrival of Olinio, and the expected fiscal adjustment will lead the Colombian economy to grow 2.4% in 2026. Turning to prices, inflation jumped from 5.6% at the end of March to 6% in July 2026, near its highest level since July 2024. Services dependent on the minimum wage saw a variance exceeding 9%, while rents maintained inflation close to 5%, more evidence of the indexation problem. Meanwhile, inflation in regulated goods accelerated due to higher fuel prices resulting from a warning in the Middle East. Additionally, energy and gas prices increased as a result of the greater use of thermal power plants for electricity generation as a precaution against the arrival of aluminum. In the food sector, fertilizer prices and weather conditions also exerted upward pressure. For the remainder of the year, the upward trending inflation is expected to continue, given the intensification of the aforementioned factors ending the year at 6.8%. On the fiscal front, the government finalized the TRS operation in May, and updated the meeting term fiscal framework in June. With the closure of the CRS and other debt management operations during the quarter, the government carried out a significant swap of external debt or domestic debt. As of June, the share of external debt in total debt was 23%, the lowest in the 21st century, also supported by the appreciation of the best. Regarding the fiscal framework, while the revenue forecast for 2026 is reasonable, the expenditure forecast is not. The central bank is likely to continue raising rates. Aval Acciones y Valores S.A. ADRENNIS Estargin Nagos, two options of put options. Following the election results, the country's premium fell to 148 points, near its lowest level since 2021. This lower premium reflects investor expectations that, under the new government, Colombia will implement macroprudential measures, contain the fiscal deficit, oversee negotiated minimum wage increases, and promote investment incentives, among other policies that foster a better business environment and strengthen the local currency. The passage of reforms in a highly divided Congress will be crucial for the fulfillment of these expectations and their corresponding impact on the economy and local assets. Thank you. Back to you, Maria Lorena.

Thank you, Camilo. Turning now to our financial results. Volume growth continued to accelerate during the quarter, with both loans and deposits increasing 2.1% over the quarter to 1%. 198,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 of need from our investment portfolios that are benefiting from particular strong capital market cycles. In addition, we delivered a 21 basis point improvement on loan in the banking segment. Our credit quality was substantially stable with cost of risk well control at 1.9% and we maintain a disciplined cost structure with cost to assets at 2.7%. Regarding our non-banking procedures, Colbenier had a particularly strong quarter benefit from the strong fixed income and equity market. Colbenier also contributed good results with energy and infrastructure revenues on a Last two small days. Now, I would like to pass the call to Diego who will give you the details in our source.

Diego? Thank you, Maria Lorena. I will start on pages 8 and 9 with a few charts showing the growth rate and quality of our loan portfolio relative to the rest of the Colombian banking system based on unconsolidated figures under Colombian IFRS as published by the Superintendent of Finance. Starting on page 8. For a 12-month period ended in May 2026, Aval's loan growth accelerated, driven especially by commercial loans, although the rest of the banking system was primarily driven by consumer loans, in particular personal loans and credit cards. We continue to prioritize growth in local currency commercial loans and within consumer in personal loans and credit cards. Our market share in commercial loans Increased 32 basis points over the year and fell 19 basis points over the quarter. Our market share of PESA-denominated commercial loans increased 57 basis points year-on-year to 26.2% and decreased 6 basis points over the quarter. Market share of dollar-denominated commercial loans fell 166 basis points over the quarter to 35.1% reflecting Banco Obrador's relocation of part of its foreign currency Aval. Aval. Aval. Aval. We maintain our leadership position in federal lending with 41.1% market share. However, we reduce our share in federal loans by 62 basis points from the quarter, accumulating 222 basis points year-on-year. Overall, our market share for consumer loans closed at 28.4%. Aval. Aval. Aval. Aval. Aval. Aval. Aval. On page 9, loan quality trends remain positive across all categories, both for Aval and for the system alike, with the Aval banks continuing to show stronger portfolio quality in most categories. I will now move to the consolidated results of Blue Power and their IFRS, starting on page 10. Assets grew 3.9% of the quarter and 4.5% of the year with 351 trillion pesos. Fixed income investments that at the end of the quarter accounted for 13.2% of our total assets increased 11.6% of the quarter and 20.5% over 12 months driven by higher liquidity. The bottom of the page, gross loans grew 2.1% during the quarter accumulating 7.6% year on year. Our asset nominated loans increased 2.4% quarter on quarter Commercial loans grew 2.4% dollar quarter and 7.7% year-on-year. S.A. denominated commercial loans grew 3% quarter-on-quarter and 10.9% year-on-year, while US dollar denominated commercial loans grew 5.2% quarter-on-quarter in dollar terms and 7.7% year-on-year. Following the MFG divestiture in March, Dollar Denominated Loans account for 7.9% of our total portfolio and comes primarily from Banco de Bogota's U.S. agencies, our trade, finance, debt, business, and the offshore subsidiaries of Banco de Bogota and Banco de Occidente. These loans were affected by the appreciation of the Colombian peso of 6% of the quarter and 15.5% over 12 months. Consumer loans grew 1.1% during the quarter and 4.7% year-on-year. Payrolls that account for 53% of our consumer loans contracted 1.2% both over the quarter and over the year. Personal loans that account for 28% of our consumer loans grew 4.5% during the quarter and 18.2% over the year. Credit cards that account for 12% of our consumer loans grew 4.5% quarter and quarter and 6.5% year on year. Automobile loans that account for 7% of our consumer loans increased 0.8% quarter-on-quarter and 3% year-on-year. Finally, mortgages grew 2.9% of the quarter and 15.7% year-on-year. On page 11, we present funding and deposit evolution. Total funding reached 292 trillion pesos, running 3.8% of the quarter and 11% year-on-year. Total deposits that account Pesos growing 2.1% over the quarter and 11.5% year-on-year. Our deposits to net loans ratio increased to 117% and we built a green deposition as a protection for potential volatility associated with a presidential election. On page 12, we present the evolution of our total capitalization of our total shareholder's equity and the capital-equity ratio of our banks. Our total equity increased 3.4% of the quarter and 3.3% year-on-year, while our attributable equity increased 4.4% of the quarter and 4.6% year-on-year. During the quarter, Banco de Bogotá, Banco del Ocidente, Banco Popular, and Grupo Aval Holding contributed their stakes in Corte Colombiana to an STD in exchange for shares of such STD while maintaining their indirect shares in Corte Colombiana. This change implies measuring the new investment in each entity, impacting the solvency ratios of Banco de Bogota and with a milder effect in Banco de Occidente. Banco de Bogota ended the quarter at a solid 14.9% of total solvency and 14% of Tier 1 capitalization. In addition, Amerigia issued a 100 billion pesos coordinated bond during the quarter's crescent, strengthening its Tier 2 capital. Net income and the improvement in OCI from fixed income added as well to our solvency ratios. On page 13, we present a new net interest income reached 3.6 trillion in second quarter 2026, up 68.4% from first quarter 2026 and 43.1% from second quarter 2025. Results benefited from a solid trading investment income Aval. Aval. Aval. A consolidated NIMA loans reached 4.41% during the quarter, stable relative to 4.4% during the first quarter of 2026. Our consolidated NIMA investments increased to 8.58% up from a quarter percent in the first quarter of 2026, driven by a significant improvement in the test market performance Net of derivatives in net NIM on investments would have been 5.1% and total NIM would have been 4.6%. Focusing on our banking segment, the total NIM of our banking segment expanded 192 basis points on the quarter to 6.07% due to the same dynamics that affected our consolidated NIM. NIM on loans was 5.19% increasing 21 basis points quarter on quarter. in Neiman Commercial Loans to 4.3% and 9 basis points quarter-and-quarter decrease in Neiman Retail Loans to 6.39%. On page 14, we present yield and cost of funds. Interest rate dynamics of our loans and of our funding are driven by the movements in average benchmark rate in Colombia. The average central bank intervention rate increased approximately 135 basis points during second quarter 2026 while our consolidated cost of deposits increased 59 basis points to 7.34% reflecting a lower pass-through. Our total cost of funds increased 75 basis points to 7.75%. This quarter results reflect the combined benefits of disciplined repricing and the strong high yield on investments. Our banking segment spread between yield and loans and cost of deposits reached 5.68% Its highest level in 10 quarters as our lower deposit has been translated directly into margin expansion. On pages 15 through 17, we present several loan portfolio quality ratios. On page 15, overall loan quality trends were materially stable during the quarter, with 90 APDLs across commercial consumer and mortgage loans holding at levels consistent with their historical levels. 90 APDLs were at 3.13%, Table relative to the last quarter and 44 basis points improvement relative to 12 months before. The new ATDLs were 4.41%, a 10 basis points increase over 3 months, a 45 basis points improvement over 12 months. New 90 ATDLs in the quarter were 1.11 trillion pesos up from 1.08 trillion a year earlier and 1066 billion during first quarter 2026. Average on 90-day PDLs was 137% in line with the first quarter of 2026. Commercial 30-day PDLs were 3.86%, stable over three months and improving 50 basis points over the year. 90-day PDLs were 3.26, a 7 basis points decrease over López-González, and Maria López-González. The share of our loan portfolio classified as Stage 1 reached 90%, López-González, Maria López-González, Maria López-González, Maria López-González Our net cost of risk was 1.9%, 8 basis points higher, quarter and quarter, and 5 basis points year on year. The gross cost of risk was 2.2% in second quarter 2026, increasing 12 basis points quarter and quarter, and decreasing 18 basis points year on year. The net cost of risk for consumer loans was stable at 4.1%. Meanwhile, the net cost of risk for commercial loans was 0.9%, upfront 0.7%, And Page 18 represents net fees and other income. Gross fee income grew 4.1% year-on-year and increased 3.7% quarter-on-quarter. Net fee income increased 3.3% year-on-year and decreased 5.2% quarter-on-quarter. Gross fee income was driven by an annual 1.7% increase in banking fees, 8.1% in pension fees, and 9.8% in trust fee activities. Income from the nine financial sector was around 1.14 times that reported during second quarter 2025 due to a positive impact of higher inflation and contention revenues. Energy and gas contributed 281 billion pesos, roughly in line with prior periods. As mentioned earlier, the year-on-year variation in other operating income mainly reflects lower derivative incomes of 962 billion pesos of this quarter's variation Juan Camilo Angel Mejia, Paula Duran Fernandez, Maria Lorena Gutierrez, Jorge Castano Gutierrez de Pineres Luna and increasing 8.1% quarter on quarter. Quarterly variation is largely explained by 312 billion pesos equity tax reported under general and administrative expenses from the first quarter of the year. Total other expenses including equity taxes increased four point, total other expenses excluding equity taxes Aval. Aval. Aval. Aval. Aval. Aval. Aval. a total net income of $577 billion pesos or 24.3 pesos per share, our highest level for a quarter in four years. A return on average assets and a return on average equity for the quarter reached 1.1% and 12.7% respectively. I'll now summarize our general guidance for 2026. We expect loan growth in the 10.5% area of commercial loans growing in the 8% area and retail loans growing in the 14% area. We expect our consolidated NIM in the 4.2% area with NIM on loans in the 4.4% area. The NIM of our banking segment in the 4.9% area with NIM on loans in the 5.2% area. Our cost of risk in the recovery in the 1.9% area. Our cost to assets in the 2.9% area. Income from the non-financial sector of 1.3 times that for 2025. Income ratio in the 22% area. Thank you, Diego.

Before moving into questions and answers, I would like to leave you with a final thought. We continue to navigate on the mining environment with global uncertainty, elevated inflation, and pressures for higher interest rates. As Colombia enters a new political cycle, the focus will increase in need. Chifto toward restoring confidence, encouraging investment, and addressing the country's fiscal challenges to support strong long-term growth. Energy security is one of the key challenges ahead. Colombia has moved from having one of the most reliable energy systems in the region to facing increasing pressures on both electricity and Natural Gas Supply. Delays in strategic generation and transmission projects together with declined domestic production highlight the need to accelerate investment and execution. Ensuring a reliable energy supply will be critical not only for households and businesses, but also for the competitiveness in investment and economic growth. Acelerating the pace of infrastructure projects and of construction to generate future growth, recovering the health system effectiveness are some of the fronts demanding decisive public policy actions. Despite the macro and regulatory challenges that we have faced, this quarter reaffirmed the resilience of Grupo A and our ability to execute long-term strategic priorities. Our diversified business discipline, risk management, and strong balance sheet continues to provide stability across economic cycles. Meanwhile, we continue to execute key initiatives such as the successful integration of the former Itaú retail operations into Angola, Bogota, That is strengthening our retail banking platform and positioning the growth of future growth. The results achieved during the first half of the year reinforce our confidence in Dallas for 2026. While the environment will remain challenging with high funding rates and market volatility, during the remainder of the year, we remain on track to deliver. and ROAE in the 9.25% area for the full year, as Diego mentioned. We remain confident in our strategy, our execution capabilities, and our ability to continue creating untapped value for shareholders while contributing to the development of Colombia's economy. Thank you. Thank you.

We will now begin the question and answer session. If you have a question, please press star then 1 on your touch phone phone. If you wish to be removed from the queue, please press star then 1 a second time. If you are using a speaker phone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star 1. Our first question will come from the line of Brian Flores with Citibank. Please go ahead.

Hi, Tim. Good morning. Thank you for the opportunity. Congrats on the results. Two questions here. The first one is a bit more contextual. Wanted to get your views on what we should expect, what you're expecting as the base case in terms of tax rate for 2027. Just wondering if you perceive maybe lower risk in terms of funds being included, you know, for higher tax rates. In the tax reform. And then a second one is a bit more structural. I think your strategy is definitely paying off in terms of the diversification of profitability, right? You have a very strong quarter in terms of the investment portfolio. But I just wanted to check with you if going forward with, you know, the recent structures, the recent changes, and also the new government, you might think that also Corte Colombiana and Porvenir could start really Andres Alonso-González, Juan Carlos Rodríguez Alonso-González Juan Carlos Rodríguez Alonso-González

This is difficult for me that maybe he can leave some taxes, but we hope that we don't have an increase. We are a little worried with the local taxes because our mayor here in Bogota presented like a loan, like a project to the Bogota Council. That is like a congress here in Colombia, but for the city. And it increases one of the local tax that is ICA 30%. So for us, it's because this is a tax on income. So for us and for the financial sector in general, we are a little concerned about that. And before Diego talk about the portfolios, Then we mentioned that we are going to start the construction of the new stadium in Corfo, Colombia. This, I think, on maybe September, October, we will start to, and this is important because, as you know, when Corfo, Colombia starts to build, we can generate income. And the other stadium is working. So we have both, no? We are building, but we have the business of the actual .

Yeah, adding to what Maria Lorena said, also to give you some context, you might have seen that we were conservative on our guidance on cost per income, and one of the reasons we're conservative on that is we're seeing heavy burden on taxes, Adding to our operational expenses. Regarding , we basically grow based on the country's growth. In the case of Corte Colombiana, we grow because of the country investing and developing many of the projects that have been delayed or were canceled during the previous administration. Therefore, yes, we are very positive on the new administration and Corte Colombiana. And for the new side, we're going to get clarity on the pension reform. That's something we have already started to see moving in Congress. and a positive performance of the market as well will help our portfolios. You have to remember that in the numbers of the central bank, one of the numbers that has a lot of weight Is the risk of a fiscal deficit moving into the future? We expect that the new administration will move in the right direction to give some confidence that this will have some relief. In that sense, we see an upside from the central bank rate as we have clarity from public policy on what's going to happen with a fiscal deficit.

If you add to the fiscal deficit, for me it's so important that the government in this month Okay, and I guess the projects and everything will get energy because we are going to have the Phenomenal Union. I don't know how to say that. Phenomenal Union is the name. Very strong. So we need to start to have new projects. Otherwise, we are going to have more inflation and problems in the economy.

No, super clear, Maria Lorena. If I may, something very interesting that you commented was, do you have a sensitivity as to if this local tax passes in Bogota, how much would it impact the effective tax rate that you pay?

I will tell you for the financial sector because is an exercise. It will be like 500,000 million. More, no? And we know that they are going to start to discuss the project. So, as you know, with the problems that Colombia may be, the project stopped without discussing it. So, it's just to mention that it's not a concern right now, no? We are working on numbers and everything to be prepared.

No, perfect. We'll keep an eye on it. I appreciate the comments. Thank you. Thank you.

Thank you. Our next question will come from the line of Yuri Fernandez with JP Morgan. Please go ahead.

Hi, Maria Lorena, Diego. I have a question regarding the guidance of ROE. If I understood correctly from Diego, I think I heard nine and a half, maybe ROE. That is maybe a touch above.

Nine and a quarter. Not 9.25, Jorge. We're basically maintaining our guidance.

You're maintaining the guidance. So, 9.25 ROE guidance, right? 9.25. So, why is this lower, Diego, than what you are running now? I think in the first half you have closer to 10% ROE. I understand that this quarter you had some gains on securities. Maybe you're not considering these ahead, but... What do you see as a headwind for the second half? Because if this is 9.25, this indicates that the ROE for the second half has been lower than the ROEs of the first half and you had the wealth tax in the first quarter, right? So, I don't know if these are new provisions, maybe this Colombia retail, I don't know, Bogota higher taxes, I don't know, Itaú-Colombia consolidation, what is driving this ROE? Thank you.

There's a few reasons, Julia, and you're right. We're being cautious here because we have high expectations. We're actually very positive here thinking in the long term. We're cautious on what's going to happen short term. Obviously, on the long term, this does represent what we see in the changes in administration and changes in the monetary cycle as a positive that should increase substantially our view that we had in the past of what we can reach over the next three to five years. However, short term, there's a few headwinds we have to be careful about. Number one, you mentioned it. We have an extraordinary first half on the fixed income side. As I highlighted, part of that has an offset in derivatives because it's part of our trading with our customers and also our risk positions in our portfolios. So we are not building in strong numbers for the second half. I didn't mention it in the guidance, but it simply is that we're looking into something around 2% Neiman Investments to make the numbers work for the second half. Then we will have a cumulative effect of all the raises from the central bank, and even though we had a pause, a market consensus, and as you heard our call, points to perhaps another 50 basis points increase in rates. Then, on the cost of risk side, we don't have numbers nor expect anything substantial, but we're being careful of what the effects of the earthquake might be during the quarter. So, in general, I would say if we prefer to be on the conservative side, there is a potential to become much more constructive data coming in. and also giving a chance for the new administration to move a lot of the things that they mentioned during the campaign into actual policy that will be the booster for the growth.

If I made a second one, just on asset quality already mentioned on your presentation, but when we go to the 30 days PES-DU, new PES-DU formation, right, so basically the new increase of the balances, There was an increase, right, and also 90 days, but I think 90 days, the previous quarter was too low, but 30 days caught my attention here. We saw some worsening on consumer loans, on mortgage. You have the earthquake. You have . So what is your best guess on the outlook for asset quality here? I know you have a 1.9 guidance, but going ahead, are you concerned on asset quality in Colombia? What should we expect?

Short answer, we are not concerned, however. There might be some spikes in the road. The way to think about new loan formation is you have to look through the cycle. It is a spiky movement, but this is in line with numbers we've seen in the past. And I also mentioned another data point that is the stages two and three are behaving well. We obviously are being very careful with some sectors that are suffering with the exchange rate. So those are kind of the downside potentials that you might see. The low exchange rate plus the earthquake are some things to look into. But the short answer is we see stability in the numbers. We see, I would say, a proper performance of the economy as a whole.

Perfect. No, thank you.

Thank you. Again, if you'd like to ask a question, press star, then the number one on your telephone keypad, and our next question will come from the line of Daniel Mora with Credit Corp Capital. Please go ahead.

Daniel Mora Hi. Good morning, and thank you for the presentation. I have a couple of questions. The first one is regarding margins, specifically the mean without trading income. Trading, like the one we observed in the second quarter, will not be sustainable. Well, interest expenses rise faster than interest income at a consolidated basis, so I would like to understand, in a context of high interest rates or longer, are you worried about margin pressures? As it seems that the expansion in the banking segment is upset by the other sections of Grupo Aval. That would be my first question.

Okay. As I went through my answer to Julia a moment ago, we're being careful about the implications of further exchange interest rate hike. However, at this point in the cycle, there's a higher potential, if you're thinking medium term, of reduction in rates and further increasing rates when we finish this event. So we are, that's why we're positive, medium and longer term, but cautious for the remaining quarters of this year. As you pointed out, yes, we guided We mentioned that without the defective derivatives, our NIM would have been 4.6% and our NIM on investments 5.5%. So, a substantial portion of what you saw on the NIM line has an offset on the derivatives line. Once again, as I mentioned to Yuri, we're building in NIM on investments of 2% into our figures, however, and NIM on loans We're seeing our strategy really paying out. We're being able to reprice our loans. We see the liquidity environment favorable to have a lower pass-through of what the central bank is doing. So, in general, we feel closer to the end of the cycle. However, our guidance does build in a second half of the year that could have some pressures coming from the remaining increases in interest rates from the central bank.

Thank you so much. And if I may, my second question is regarding long-grow. What are the reasons behind the recent performance of the long-grow in the consumer segment? After a couple of years gaining market share and growing above the industry, now the industry seems to accelerate strongly. So I would like to understand what is the reason behind this, or if you just like to continue and continue and resume the growing in consumer loans and gain market share and then decide all the operation of the construction with it all.

Yeah, I think that's a great question because it does touch on what our strategy looks like. Part of what is going on is we've been historically slightly overweighted on the payroll lending side and we've been underweighted on the credit card and personal loan side. What we're seeing in this cycle is personal loans and credit cards growing much faster. And we are indeed growing at a fast pace. However, given that we're underweighted there, those competitors that are overweighted on those products are seeing a lot of growth. Then strategically, we are reducing the way of payrolls in our overall portfolio. That has many reasons. The two main reasons are, one, we are reducing sensitivity to interest rates that we suffered during the past cycle. And as you might have seen, if you think we're looking at interest rates at levels that are close to what we saw at the peak of the last cycle, not there, but close to those, and we are not suffering in the same manner that we did before. So we've been restructuring our portfolio to reduce interest rate sensitivity. and the other side we see also an opportunity to improve our average interest rate, our NIM in that process and we see a room to gain state. Part of the rationale of the EW transaction is precisely getting after that process. An order of magnitude EW transaction could be gaining us a couple years of growth and precisely in the segments that we wanted to grow. So that's the reason why our growth has been lower. It is a We are concentrated in federal loans and strategically we're reducing our share there and we're not as exposed to the high-growth products where we are gaining share as well, as I mentioned in the call. Perfect.

No more questions? No more questions, no? No more questions. Thank you for being with us and for the interesting questions and see you in the next conference call, results call. Bye.

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