A Lighter, Brighter Day

How does Grupo Aval’s rebranding relate to its future strategies?

We are often seen as a solid and dependable financial group, but not necessarily young or innovative. Thus, in the past four or five years, we decided to reach out to millennials—mostly through entertainment, but also through innovative products such as electronic wallets or smart-phone pay products. We were the first to offer a virtual wallet that accepts all the credit cards in the market and also wristbands that give users access to money and with which they can pay at concession stands during concerts, obviating the need to carry cash. Therefore, to go along with these efforts we decided to rebrand our logo to one that conveys a lighter, younger, and more innovative image. We are also big in mobile banking because we firmly believe that this is the direction the financial world is moving. We want to be a part of that—and be the innovation leaders in Colombia. So far, it seems to be working.

What are your expectations from fiscal reform?

After what was frankly a somewhat hostile tax reform in 2014, we were hoping for a business-friendly and integral fiscal reform this time around. It needed to reduce taxes on businesses and expand the taxpayer base. We also expected the VAT to go up; there is no other way to increase fiscal revenues. The government has insisted that the reason behind the need to raise these taxes is to finance the “post-conflict” cost. However, the reality of it is that at the end of the day there is a deficit that needs to be plugged, and that is just the iron rule of deficits.

How do you see the peace deal affecting foreign investor negotiations and the overall economy?

The peace deal will be better for investor confidence and for the country in the long run. If the deal had passed by referendum by a margin similar to Brexit—barely 60,000 votes—the government would have had great trouble implementing the negotiated treaty.

What are your goals or targets in 2017 for Grupo Aval?

We are targeting consolidated growth of around 13%. We also expect better performances in Central America than Colombia because the former has a different economy. In Colombia, we export oil and in Central America we import it, so low-cost oil is good for the latter. The other thing is that whenever the US economy rebounds, this is essential for Central America, which heavily relies on remittances from the US. In general, in all our markets we foresee better performances than in 2016, some growth, and controlled quality of our assets and costs of risk. There are also additional opportunities in Colombia from the infrastructure sector with the 4G Infrastructure Plan, which has already become a reality. Our banks have already offered about USD2.5 billion in financing, which will start being disbursed next year.