PRESENTATION OF FINANCIAL AND OTHER INFORMATION

All references herein to “peso,” “pesos,” or “Ps” refer to the lawful currency of Colombia. All references to “U.S. dollars,” “dollars” or “U.S.$” are to United States dollars. See “Item 3. Key Information—A. Selected financial data—Exchange rates” for information regarding exchange rates for the Colombian currency. This annual report translates certain peso amounts into U.S. dollars at specified rates solely for the convenience of the reader. The conversion of amounts expressed in pesos as of a specified date at the then prevailing exchange rate may result in presentation of U.S. dollar amounts that differ from U.S. dollar amounts that would have been obtained by converting pesos as of another specified date. Unless otherwise noted in this annual report, all such peso amounts for figures at December 31, 2013 have been translated at the rate of Ps 1,926.83 per U.S.$1.00, which was the representative market rate calculated on such date. The representative market rate is computed and certified by the Superintendency of Finance on a daily basis and represents the weighted average of the buy/sell foreign exchange rates negotiated on the previous day by certain financial institutions authorized to engage in foreign exchange transactions. Such conversion should not be construed as a representation that the peso amounts correspond to, or have been or could be converted into, U.S. dollars at that rate or any other rate. On April 21, 2014, the representative market rate was Ps 1,930.62 per U.S.$1.00.

Definitions

In this annual report, unless the context otherwise requires, the terms:

“Grupo Aval,” “we,” “us,” “our” and “our company” mean Grupo Aval Acciones y Valores S.A. and its consolidated subsidiaries;

“banks” and “our banking subsidiaries” mean Banco de Bogotá S.A., Banco de Occidente S.A., Banco Popular S.A. and Banco Comercial AV Villas S.A. and their respective consolidated subsidiaries;

“Banco de Bogotá” means Banco de Bogotá S.A. and its consolidated subsidiaries;

“Banco de Occidente” means Banco de Occidente S.A. and its consolidated subsidiaries;

“Banco Popular” means Banco Popular S.A. and its consolidated subsidiaries;

“Banco AV Villas” means Banco Comercial AV Villas S.A. and its consolidated subsidiary;

“BAC Credomatic” or “BAC” means BAC Credomatic Inc. and its consolidated subsidiaries;

“Banco BAC de Panama” means Banco BAC de Panama, S.A., and its consolidated subsidiaries, formerly known as Banco Bilbao Vizcaya Argentaria (Panamá) or “BBVA Panama”; “Corficolombiana” means Corporación Financiera Colombiana S.A. and its consolidated subsidiaries;

“Grupo Financiero Reformador” or “Grupo Reformador” means Grupo Financiero Reformador de Guatemala and its consolidated subsidiaries;

“Horizonte” means AFP Horizonte Sociedad Administradora de Fondos de Pensiones y de Cesantías S.A., formerly known as BBVA Horizonte Sociedad Administradora de Fondos de Pensiones y de Cesantías S.A.; “LB Panama” means Leasing Bogotá S.A., Panama and its consolidated subsidiaries; and

“Porvenir” means Sociedad Administradora de Fondos de Pensiones y Cesantías Porvenir S.A. and its consolidated subsidiary. Porvenir is a private funds manager; accordingly all comparative figures in this document are made with respect to its peers in the private sector.

The term “Superintendency of Finance” means the Colombian Superintendency of Finance (Superintendencia Financiera de Colombia), a supervisory authority ascribed to the Colombian Ministry of Finance and Public Credit (Ministerio de Hacienda y Crédito Público), or the “Ministry of Finance,” holding the inspection, supervision and control authority over the persons involved in financial activities, securities markets, insurance and any other operations related to the management, use or investment of resources collected from the public.

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Unless noted otherwise, references in this annual report to “beneficial ownership” are calculated pursuant to the definition ascribed by the U.S. Securities and Exchange Commission, or the “SEC,” in Form 20-F for foreign private issuers. In Form 20-F, the term “beneficial owner” of securities refers to any person who, even if not the record owner of the securities, has or shares the underlying benefits of ownership. These benefits include the power to direct the voting or the disposition of the securities or to receive the economic benefit of ownership of the securities. A person also is considered to be the “beneficial owner” of securities that the person has the right to acquire within 60 days by option or other agreement. Beneficial owners include persons who hold their securities through one or more trustees, brokers, agents, legal representatives or other intermediaries, or through companies in which they have a “controlling interest,” which means the direct or indirect power to direct the management and policies of the entity.

Financial statements

Grupo Aval is an issuer in Colombia of securities registered with the National Registry of Shares and Issuers (Registro Nacional de Valores y Emisores), and in this capacity, it is subject to oversight by the Superintendency of Finance. Grupo Aval is a not a financial institution in Colombia. Grupo Aval is required to comply with corporate governance and periodic reporting requirements to which all issuers are subject, but it is not supervised or regulated as a financial institution or as a holding company of banking subsidiaries and, thus, is not required to comply with the capital adequacy regulations applicable to banks and other financial institutions. All of our banking subsidiaries (Banco de Bogotá, Banco de Occidente, Banco Popular, Banco AV Villas, and their respective financial subsidiaries, including Porvenir and Corficolombiana) are entities under the direct comprehensive supervision of, and subject to inspection and surveillance as financial institutions by, the Superintendency of Finance and, in the case of BAC, subject to inspection and surveillance as a financial institution by the relevant regulatory authorities in each country where BAC operates.

Our consolidated financial statements at December 31, 2013 and 2012 and for each of the years ended December 31, 2013, 2012 and 2011, have been audited, as stated in the report appearing herein by KPMG Ltda., and are included in this annual report and referred to as our audited consolidated financial statements. We have prepared these financial statements and other financial data included herein in accordance with the regulations of the Superintendency of Finance applicable to financial institutions (Resolution 3600 of 1988 and External Circular 100 of 1995) and, on issues not addressed by these regulations, generally accepted accounting principles prescribed by the Superintendency of Finance for banks operating in Colombia, consistently applied, together with such regulations, on the filing date, “Colombian Banking GAAP.”

Although we are not a financial institution, we present our consolidated financial statements under Colombian Banking GAAP in this annual report because we believe that presentation on that basis most appropriately reflects our activities as a holding company of a group of banks and other financial institutions. The audited consolidated financial statements have not been reviewed or approved by the Superintendency of Finance; however, consolidated financial statements for each six-month period, prepared on the basis of Colombian Banking GAAP for each of our subsidiaries (which are the basis for our own consolidated financial statements) are remitted to the Superintendency of Finance for their review on a semi-annual basis. The Colombian Banking GAAP consolidated financial statements included in this annual report differ from the consolidated financial statements published by Grupo Aval in Colombia, which are prepared under Colombian GAAP.

Because we are not regulated as a financial institution in Colombia, we are required to prepare our consolidated financial statements for publication in Colombia under Colombian GAAP applicable to companies that are not financial institutions (Decree 2649 of 1993 and Circular No. 100-000006 of the Superintendency of Companies (Superintendencia de Sociedades) and former Superintendency of Securities (Superintendencia de Valores), currently the Superintendency of Finance) No. 011 of 2005, which differs in certain respects from Colombian Banking GAAP. These Colombian GAAP financial statements are presented semi-annually to our shareholders for approval, are reviewed and published by the Superintendency of Finance and are available in Spanish to the general public on Grupo Aval’s website. Please see “Item 10. Additional Information––F. Dividends and paying agents—Dividend policy of Grupo Aval” for a discussion of the main differences between Colombian Banking GAAP and Colombian GAAP. We do not file consolidated financial statements prepared on the basis of Colombian Banking GAAP with the Superintendency of Finance. However, because we have filed this annual report with the SEC, we may from time to time publish semi-annual or quarterly financial data for subsequent periods on a Colombian Banking GAAP basis.

Colombian Banking GAAP differs in certain significant respects from generally accepted accounting principles in the United States, or “U.S. GAAP”. Note 30 to our audited consolidated financial statements provides a description of the principal differences between Colombian Banking GAAP and U.S. GAAP as they relate to our audited consolidated financial statements and provides a reconciliation of net income and shareholders’ equity for the years and at the dates

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indicated herein. Unless otherwise indicated, all financial information of our company included in this annual report is stated on a consolidated basis prepared under Colombian Banking GAAP.

LB Panama

On December 9, 2010, we acquired BAC Credomatic through LB Panama, a Central American banking group. See “Item 4. Information on the Company––B. Business overview––BAC Credomatic.” As a consequence of our acquisition of BAC Credomatic, our results of operations for the year ended December 31, 2010 may not be comparable with other periods.

LB Panama’s financial information is prepared in accordance with Colombian Banking GAAP and primarily reflects BAC Credomatic’s consolidated results, which have been consolidated into LB Panama’s results since December 1, 2010, and our recent acquisitions of Banco BAC de Panama (formerly BBVA Panama) and Grupo Financiero Reformador since December 31, 2013. As of December 31, 2013, LB Panama had goodwill of Ps 2,249.7 billion resulting from the acquisition of BAC Credomatic, BBVA Panama and Grupo Financiero Reformador. LB Panama also reflects Ps 2,047.1 billion of indebtedness, including Ps 520.2 billion (U.S.$270 million) incurred to fund part of BAC Credomatic’s acquisition and Ps 1,536.5 billion of additional indebtedness, of which Ps 496.0 billion (U.S.$257 million) is owed to Grupo Aval Limited and Ps 1,040.5 billion (U.S.$540 million) owed to Deutsche Bank; this figure compares to a total indebtedness of Ps 2,245.7 billion as of December 31, 2012. As of December 31, 2013, LB Panama had a Ps 1,387.8 billion fixed income portfolio comprised mainly of investment grade Latin American government and corporate bonds, acquired pursuant to Banco de Bogotá’s investment guidelines.

Market share and other information

We obtained the market and competitive position data, including market forecasts, used throughout this annual report from market research, publicly available information and industry publications. We have presented this data on the basis of information from third-party sources that we believe are reliable, including, among others, the International Monetary Fund, or “IMF,” the Superintendency of Finance, the Colombian Stock Exchange, the Colombian National Bureau of Statistics (Departamento Administrativo Nacional de Estadística), or “DANE,” and the World Bank Development Indicators. Industry and government publications, including those referenced herein, generally state that the information presented has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Unless otherwise indicated, gross domestic product, or “GDP,” figures with respect to Colombia in this annual report are based on the 2005 base year data series published by DANE. Although we have no reason to believe that any of this information or these reports are inaccurate in any material respect, we have not independently verified the competitive position, market share, market size, market growth or other data provided by third parties or by industry or other publications. We, do not make any representation or warranty as to the accuracy of such information.

Except where otherwise indicated, our balance sheet and statement of income data included in this annual report reflects consolidated Colombian Banking GAAP information, while comparative disclosures of our financial and operating performance against that of our competitors are based on unconsolidated information prepared on the basis of Colombian Banking GAAP reported to the Superintendency of Finance. Our banking subsidiaries report unconsolidated financial data to the Superintendency of Finance; however, Grupo Aval, as a holding company, is not required to report such data. Unless otherwise indicated or the context otherwise requires, market share and other data comparing our performance and that of our competitors reflects the unconsolidated results of our banking subsidiaries, Porvenir, Corficolombiana and BAC Credomatic. “Grupo Aval aggregate” data throughout this document pertaining to Grupo Aval reflects the sum of the unconsolidated financial statements of our four Colombian banking subsidiaries (Banco de Bogotá, Banco de Occidente, Banco Popular and Banco AV Villas) as reported to the Superintendency of Finance. These unconsolidated financial statements do not reflect the consolidation process of subsidiaries such as Corficolombiana, Porvenir or LB Panama, are not intended to reflect the consolidated financial statements of Grupo Aval and are not necessarily indicative of the results for any other future interim period. Except where otherwise indicated, financial and market share data pertaining to BAC Credomatic has been prepared on the basis of U.S. GAAP. The calculations for our competitors on a consolidated basis are made based on the financial statements of each bank publicly available on their respective websites. All calculations on an unconsolidated basis are made based on publicly available information from the Superintendency of Finance.

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Banks, financing companies and finance corporations are deemed credit institutions by the Superintendency of Finance and are the principal institutions authorized to accept deposits and make loans in Colombia. Banks undertake traditional deposit-taking and lending activities. Financing companies place funds in circulation by means of active credit operations, with the purpose of fostering the sale of goods and services, including the development of leasing operations. Finance corporations invest directly in the economy and thus are the only credit institutions that may invest in non-financial sectors. Banks are permitted to invest in finance corporations. See “Item 4. Information on the Company––B. Business overview––Supervision and regulation.” In Colombia, we operate four banks, one financing company and one finance corporation, and our market share is determined by comparing our banks to other banks reporting their results to the Superintendency of Finance. However, if financing companies and finance corporations are included in the consideration of market share data, our market shares would generally be lower than in a bank-only comparison, and the gaps between our market shares and those of our competitors would be smaller, but our market leadership in most market categories would be unaffected.

We consider our principal competitors in Colombia to be Bancolombia S.A., or “Bancolombia,” Banco Davivienda S.A., or “Davivienda,” and Banco Bilbao Vizcaya Argentaria Colombia S.A., or “BBVA Colombia,” which are the three leading banking groups in Colombia after Grupo Aval.

The principal competitors of Porvenir, our pension and severance fund administrator, include Administradora de Fondos de Pensiones y Cesantías Protección S.A., or “Protección,” Colfondos S.A. Pensiones y Cesantías, or “Colfondos” and Skandia Administradora de Fondos de Pensiones y Cesantías S.A., or “Skandia.” Corficolombiana, our merchant bank, is a financial corporation, and its competitors include Banca de Inversión Bancolombia S.A., J.P. Morgan Corporación Financiera S.A., BNP Paribas Colombia Corporación Financiera S.A. and Itaú BBA Colombia S.A. Corporación Financiera.

Our principal competitors in El Salvador, Guatemala, Costa Rica, Nicaragua, Honduras and Guatemala include Banco Industrial, Scotiabank, G&T Continental, Citibank and Bancolombia (which recently acquired Banco Agromercantil in Guatemala and Banistmo (formerly HSBC Bank (Panama) S.A.) in Panama).

Other conventions

Certain figures included in this annual report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic summation of the figures that precede them. References to “billions” in this annual report are to 1,000,000,000s and to “trillions” are to 1,000,000,000,000s.

“Minority interest” and “non-controlling interest” both refer to the participation of minority shareholders in Grupo Aval or our subsidiaries, as applicable.

“Central American acquisitions” refers to the acquisitions by Banco de Bogotá of (i) 98.92% of BBVA Panama (now known as Banco BAC de Panama) on December 19, 2013 through its subsidiary LB Panama and (ii) 100.00% of Grupo Financiero Reformador de Guatemala on December 23, 2013 through its subsidiary Credomatic International Corporation.

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FORWARD-LOOKING STATEMENTS

This annual report contains estimates and forward-looking statements, principally in “Item 3. Key Information—D. Risk factors,” “Item 4. Information on the Company—B. Business overview” and “Item 5. Operating and Financial Review and Prospects.” Some of the matters discussed concerning our operations and financial performance include estimates and forward-looking statements within the meaning of the Securities Act and the U.S. Securities Exchange Act of 1934, as amended, or the “Exchange Act.”

Our estimates and forward-looking statements are mainly based on our current expectations and estimates on projections of future events and trends, which affect or may affect our businesses and results of operations. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are made in light of information currently available to us. Our estimates and forward-looking statements may be influenced by the following factors, among others:

changes in Colombian, Central American, regional and international business and economic, political or other conditions;

developments affecting Colombian, Central American and international capital and financial markets;

government regulation and tax matters and developments affecting our company and industry;

increases in defaults by our customers;

increases in goodwill impairment losses;

decreases in deposits, customer loss or revenue loss;

increases in provisions for contingent liabilities;

our ability to sustain or improve our financial performance;

increases in inflation rates;

the level of financial products and credit penetration in Colombia and Central America;

changes in interest rates which may, among other effects, adversely affect margins and the valuation of our treasury portfolio;

decreases in the spread between investment yields and implied interest rates in annuities;

movements in exchange rates;

competition in the banking and financial services, credit card services, insurance, asset management, pension fund administration and related industries;

adequacy of risk management procedures and credit, market and other risks of lending and investment activities;

decreases in our level of capitalization;

changes in market values of Colombian and Central American securities, particularly Colombian government securities;

adverse legal or regulatory disputes or proceedings;

successful integration and future performance of acquired businesses or assets;

internal security issues affecting countries where we will operate and natural disasters;

loss of key members of our senior management; and

other risk factors as set forth under “Item 3. Key Information––D. Risk factors.”

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The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar words are intended to identify estimates and forward-looking statements. Estimates and forward-looking statements speak only at the date they were made, and we undertake no obligation to update or to review any estimate and/or forward-looking statement because of new information, future events or other factors. Estimates and forward-looking statements involve risks and uncertainties and are not guarantees of future performance. Our future results may differ materially from those expressed in these estimates and forward-looking statements. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this annual report might not occur and our future results and our performance may differ materially from those expressed in these forward-looking statements due to, including, but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on these estimates and forward-looking statements.

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PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

A.	Directors and senior management

Not applicable.

Advisers

Not applicable.

Auditors

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

A.	Offer statistics

Not applicable.

B.	Method and expected timetable

Not applicable.

ITEM 3. KEY INFORMATION

A.	Selected financial data

The following financial data of Grupo Aval at December 31, 2013 and 2012 and for the years ended December 31, 2013, 2012 and 2011 have been derived from our audited annual consolidated financial statements prepared in accordance with Colombian Banking GAAP that are included in this annual report. The selected financial data at December 31, 2011, 2010 and 2009 and for the years ended December 31, 2010 and 2009 have been derived from our audited consolidated financial statements prepared in accordance with Colombian Banking GAAP that are not included in this annual report. Our historical results are not necessarily indicative of results to be expected for future periods.

This financial data should be read in conjunction with our audited consolidated financial statements and the related notes and “Presentation of Financial and Other Information,” and “Item 5. Operating and Financial Review and Prospects” included in this annual report.

Statement of income data

	Grupo Aval
	For the year ended December 31,
	2013			2013			2012			2011			2010			2009
	(in U.S.$ millions, unless otherwise indicated) (1)			(In Ps billions, except share and per share data)
Colombian Banking GAAP
Operating income:
Net interest income		3,623.0			6,981.0			6,310.3			5,468.9			4,628.8			4,826.0
Provisions for loan and financial lease losses, accrued interest and other receivables, net		(735.6	)		(1,417.4	)		(1,041.8	)		(874.9	)		(820.3	)		(953.2	)
Recovery of charged-off assets		76.9			148.2			142.7			167.5			109.0			83.2
Provision (recovery) for investment securities, foreclosed assets and other assets		(13.0	)		(25.0	)		(18.2	)		291.1			(315.6	)		(17.6	)
Total (provisions) reversals, net		(671.7	)		(1,294.2	)		(917.3	)		(416.3	)		(1,026.9	)		(887.6	)
Total fees and other services income, net		1,460.6			2,814.4			2,382.0			2,234.4			1,617.7			1,583.5
Total other operating income		683.7			1,317.4			885.7			958.0			785.5			684.1
Total operating income		5,095.7			9,818.5			8,660.6			8,244.9			6,005.1			6,205.9

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	Grupo Aval
	For the year ended December 31,
	2013			2013			2012			2011			2010			2009
	(in U.S.$ millions, unless otherwise indicated) (1)			(In Ps billions, except share and per share data)
Total operating expenses		(3,128.5	)		(6,028.1	)		(5,299.5	)		(4,932.9	)		(3,520.0	)		(3,292.4	)
Net operating income		1,967.2			3,790.4			3,361.1			3,312.0			2,485.1			2,913.5
Non-operating income (expense):
Other income		235.3			453.4			618.5			320.7			364.6			367.4
Other expense		(112.7	)		(217.2	)		(170.4	)		(124.5	)		(187.6	)		(299.7	)
Total non-operating income (expense), net		122.6			236.1			448.1			196.2			176.9			67.7
Income before income tax expense and non-controlling interest		2,089.7			4,026.6			3,809.2			3,508.2			2,662.1			2,981.2
Income tax expense		(734.2	)		(1,414.7	)		(1,371.7	)		(1,136.7	)		(831.0	)		(864.3	)
Income before non-controlling interest		1,355.5			2,611.9			2,437.4			2,371.5			1,831.1			2,116.9
Non-controlling interest		(524.9	)		(1,011.4	)		(911.1	)		(1,080.2	)		(874.2	)		(1,051.5	)
Net income attributable to Grupo Aval shareholders		830.6			1,600.5			1,526.4			1,291.2			956.9			1,065.4

Earnings per 1,000 shares (basic and diluted earnings):
Common and preferred shares (in pesos)					86,013.9			82,277.2			79,184.3			68,621.0			76,448.0
Common and preferred shares (in U.S. dollars) (2)					44.6			46.5			40.8			35.9			37.4
Dividends and interest on capital per 1,000 shares (3):
Common and preferred shares (in pesos)					55,632.9			49,200.0			48,465.3			37,800.0			33,240.0
Common and preferred shares (in U.S. dollars) (2)					28.9			27.8			24.9			19.7			16.3
Weighted average number of common and preferred fully paid shares outstanding (basic and diluted):
Outstanding shares					18,607,487.3			18,551,766.5			16,306,613.4			13,943,980.7			13,935,966.1
U.S. GAAP (4)
Provision for loans, leases and other receivables					(1,113.5	)		(971.7	)		(670.0	)		(614.0	)		(805.4	)
Net income attributable to controlling interest under U.S. GAAP					1,632.5			1,564.5			885.3			965.3			934.5
Basic and diluted net income per 1,000 shares
Outstanding shares (pesos)					87,731.9			84,330.3			54,293.4			69,228.4			67,060.2
Outstanding shares (U.S. dollars) (2)					45.5			47.7			27.9			36.2			32.8

(1)	Translated for convenience only using the representative market rate as computed and certified by the Superintendency of Finance at December 31, 2013 of Ps 1,926.83 per U.S.$1.00.

(2)	Translated for convenience using the representative market rate as computed and certified by the Superintendency of Finance of Ps 2,044.23, Ps 1,913.98, Ps 1942.70, Ps 1,768.23 and Ps 1,926.83, per U.S.$1.00 at December 31, 2009, 2010, 2011, 2012 and 2013, respectively.

(3)	Dividends are declared semi-annually in March (for the six-month period ended December 31 of the previous year) and September (for the six-month period ended June 30 of the current year) of each year. We do not declare dividends on a quarterly basis.

(4)	See note 30 to our audited consolidated financial statements included in this annual report for reconciliations to U.S. GAAP.

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Balance sheet data

	Grupo Aval
	At December 31,
	2013			2013			2012			2011			2010			2009
	(in U.S.$ millions, except per share data) (1)			(In Ps billions, except per share data)
Colombian Banking GAAP
Assets:
Total cash and cash equivalents		8,353.9			16,096.6			13,398.9			11,698.6			9,682.6			7,370.9
Total investment securities, net		14,167.6			27,298.6			23,295.8			18,975.2			19,174.9			16,587.3
Total loans and financial leases, net		48,494.6			93,440.8			77,483.8			67,641.2			56,439.7			40,015.6
Total interest accrued on loans and financial leases, net		381.6			735.2			716.0			583.5			448.2			406.1
Bankers’ acceptances, spot transactions and derivatives		213.8			411.9			454.3			418.8			306.9			78.8
Accounts receivable, net		916.3			1,765.6			1,800.9			1,612.9			1,337.3			783.1
Property, plant and equipment, net		1,061.2			2,044.8			1,794.9			1,761.3			1,643.7			1,096.5
Operating leases, net		228.0			439.2			375.7			323.2			263.9			282.5
Foreclosed assets, net		56.7			109.2			92.0			77.8			85.5			48.0
Prepaid expenses and deferred charges		1,162.4			2,239.7			1,961.7			1,956.2			920.7			611.6
Goodwill, net (2)		2,578.3			4,968.0			2,842.5			3,110.7			3,031.4			1,020.1
Other assets, net		687.1			1,323.9			1,128.6			1,072.6			912.0			769.5
Reappraisal of assets		1,771.7			3,413.7			2,317.8			2,269.7			2,062.5			1,923.1
Total assets		80,073.2			154,287.4			127,663.0			111,501.9			96,309.3			70,993.1

Liabilities:
Total deposits		52,516.5			101,190.4			81,463.3			71,007.6			63,669.3			49,348.5
Bankers’ acceptances and derivatives financial instruments		232.2			447.3			410.0			469.0			309.3			41.6
Interbank borrowings and overnight funds		2,659.1			5,123.6			5,156.5			3,225.1			2,477.4			2,753.7
Borrowings from banks and others		6,204.0			11,954.1			10,380.9			11,437.8			10,491.2			3,854.9
Accounts payable		1,488.3			2,867.7			3,005.3			3,093.9			2,243.5			1,518.5
Accrued interest payable		264.3			509.2			474.8			313.0			247.4			269.1
Other liabilities		1,153.0			2,221.7			1,700.6			1,447.8			1,291.9			950.7
Long-term debt (bonds)		5,802.1			11,179.7			9,769.0			6,566.2			5,952.4			3,422.2
Estimated liabilities		307.9			593.3			811.7			855.3			596.9			711.6
Non-controlling interest		3,359.0			6,472.2			5,407.7			4,927.0			4,475.5			4,038.0
Total liabilities		73,986.4			142,559.2			118,579.9			103,342.7			91,754.7			66,908.8
Shareholders’ equity:
Subscribed and paid-in capital:
Common shares		10.5			20.2			18.6			18.6			13.9			13.9
Additional paid-in capital		3,002.1			5,784.5			3,671.7			3,671.1			647.4			647.4
Retained earnings:
Appropriated		1,855.3			3,574.8			2,911.3			2,332.0			1,930.3			1,266.0
Unappropriated		397.3			765.6			804.9			669.0			483.3			679.7
Equity surplus:
Equity inflation adjustments		338.5			652.2			654.6			741.9			742.1			743.2
Unrealized gains (losses) on investment securities available for sale		(271.7	)		(523.6	)		78.2			(293.0	)		29.7			18.3
Reappraisal of assets		754.9			1,454.5			943.8			1,019.6			707.8			715.7
Total shareholders’ equity (2)		6,086.8			11,728.2			9,083.1			8,159.1			4,554.6			4,084.3
Total liabilities and shareholders’ equity		80,073.2			154,287.4			127,663.0			111,501.9			96,309.3			70,993.1

U.S. GAAP (3)
Loans		48,745.5			93,924.4			78,333.3			68,067.0			57,784.6			39,160.3
Financial leases		4,205.6			8,103.4			7,650.7			6,392.8			4,015.0			3,502.1
Total loans and financial leases		52,951.1			102,027.8			85,984.0			74.459.8			61,799.6			42,662.3
Allowance for loans, lease losses and other receivables losses		(1,357.5	)		(2,615.7	)		(2,350.4	)		(2,012.9	)		(2,012.4	)		(2,002.0	)
Total loans and financial leases, net		51,593.6			99,412.0			83,633.6			72,446.9			59,787.2			40,660.4
Controlling interest shareholders’ equity under U.S. GAAP		4,949.3			9,536.5			7,426.2			6,466.7			3,949.5			3,285.7
Controlling interest shareholders’ equity under U.S. GAAP per 1,000 shares (U.S. dollars and Ps)		265,986.4			512,510.6			400,297.5			396,567.6			283,242.4			235,770.8

(1)	Translated for convenience only using the representative market rate as computed and certified by the Superintendency of Finance at December 31, 2013 of Ps 1,926.83 per U.S.$1.00.

(2)

Goodwill attributable to Grupo Aval’s shareholders was Ps 3,617.4 billion and Ps 1,943.4 billion at December 31, 2013 and 2012, respectively. Our attributable tangible equity (calculated as total shareholders’ equity minus goodwill attributable to Grupo Aval) was Ps 8,110.8 billion and Ps 7,139.7 billion at December 31, 2013 and 2012, respectively.

(3)	See note 30 to our audited consolidated financial statements included in this annual report for reconciliations to U.S. GAAP.

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Other financial and operating data

	Grupo Aval
	At and for the year ended December 31,
Colombian Banking GAAP	2013		2012		2011		2010		2009
	(in percentages, unless otherwise indicated)
Profitability ratios:
Net interest margin (1)		6.2		6.5		6.5		7.2		8.8
ROAA (2)		1.9		2.0		2.3		2.2		3.2
ROAE (3)		17.1		17.7		20.3		22.2		29.2
Efficiency ratio:
Operating expenses before depreciation and amortization / total operating income before net provisions (4)		50.4		51.3		52.7		46.6		42.9
Capital ratios:
Period-end shareholders’ equity and non-controlling interest as a percentage of period-end total assets		11.8		11.4		11.7		9.4		11.4
Tangible equity ratio (5)		8.9		9.3		9.2		6.4		10.1
Credit quality data:
Non-performing loans as a percentage of total loans (6)		1.8		1.6		1.6		1.9		2.7
Delinquency ratio past due more than 30 days		2.4		2.3		2.2		2.7		3.6
“C,” “D” and “E” loans as a percentage of total loans (7)		3.5		3.3		3.2		3.9		4.8
Allowance for loans as a percentage of non-performing loans		179.3		194.3		200.6		194.0		169.3
Allowance for loans as a percentage of past due loans		133.3		139.2		150.0		139.1		124.5
Allowance for loans as a percentage of “C,” “D” and “E” loans		90.4		95.6		103.8		96.2		94.1
Allowance for loans as a percentage of total loans		3.2		3.2		3.3		3.7		4.5
Operational data (in units):
Number of customers of the banks (8)		11,661,279		10,345,695		9,596,694		8,700,266		6,532,302
Number of employees		66,865		59,406		54,463		53,485		36,976
Number of branches (9)		1,721		1,545		1,491		1,438		1,180
Number of ATMs (9)		5,179		4,328		3,835		3,518		2,340

(1)	Net interest margin is calculated as net interest income divided by total average interest-earning assets.

(2)

For the years ended December 31, ROAA is calculated as income before non-controlling interest divided by average assets (the sum of total assets at December 31 of the fiscal year and total assets at December 31 of the previous fiscal year, divided by two). For the year ended December 31, 2010, BAC Credomatic’s results are included in 1/12 of our 2010 income but in 1/2 of our average assets due to the consolidation of BAC Credomatic financial data in Grupo Aval’s financial statements from December 1, 2010. Excluding BAC Credomatic’s assets from the calculation, results in an adjusted Grupo Aval ROAA of 2.5%.

If average assets were calculated using monthly consolidated information, rather than the average at the beginning and end of an annual period, our ROAA would be: 1.9%, 2.1%, 2.3%, 2.4% and 3.2% for the periods ended December 31, 2013, 2012, 2011, 2010 and 2009.

(3)

For the years ended December 31, ROAE is calculated as net income divided by average shareholders’ equity (shareholders’ equity at the end of the period plus shareholder’ equity at the end of the prior period, divided by two). Adjusted to exclude the Ps 2.1 trillion raised through the issuance of 1,626,520,862 shares at December 31, 2013 during the Common Share Rights Offering. If the Common Share Rights Offering is not excluded, ROAE for Grupo Aval would have been 15.4%.

If average shareholders’ equity were calculated using monthly consolidated information, rather than the average at the beginning and end of such period, our ROAE would be as follows: 17.3%, 17.8%, 23.8%, 23.3% and 27.2% for the periods ended December 31, 2013, 2012, 2011, 2010 and 2009. There was no significant effect to shareholders’ equity at December 31, 2010 resulting from the BAC Credomatic transaction.

(4)	See “—Non-GAAP measures reconciliation.”

(5)	Tangible equity ratio is calculated as shareholders’ equity plus non-controlling interest minus goodwill, divided by total assets minus goodwill. See “—Non-GAAP measures reconciliation.”

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(6)

Non-performing loans, include microcredit loans that are past due more than 30 days, mortgage and consumer loans that are past due more than 60 days and commercial loans that are past due more than 90 days. Each category includes financial leases respectively. See “Item 4. Information on the Company—B. Business overview—Selected statistical data—Loan portfolio—Risk categories.”

(7)	See “Item 4. Information on the Company—B. Business overview—Selected statistical data—Loan portfolio—Risk categories.”

(8)	Reflects aggregated customers of our banking subsidiaries. Customers of more than one of our banking subsidiaries and BAC Credomatic are counted separately for each banking subsidiary.

(9)	Reflects aggregated number of branches or ATMs of our banking subsidiaries and BAC Credomatic, as applicable, located throughout Colombia and Central America.

Non-GAAP measures reconciliation

The tables in this section and elsewhere in this annual report provide the calculation of certain measures and a reconciliation of non-GAAP measures to GAAP measures. For a reconciliation of certain capitalization ratios described in “Item 5. Operating and Financial Review and Prospects—B. Liquidity and capital resources,” see “Item 4. Information on the Company—B. Business overview—Supervision and regulation—Capital adequacy requirements.”

ROAA and ROAE

We believe ROAA, which is calculated as net income before non-controlling interest divided by average assets, provides a more meaningful measure of return on assets than a calculation based on net income over average assets because, although non-controlling interests affect the amount of reported net income attributable to Grupo Aval’s shareholders, they do not affect the profitability of assets. We believe ROAE, which is calculated as net income divided by average shareholders’ equity, provides a meaningful measure of the return generated for our shareholders.

The following table sets forth ROAA and ROAE for our banking subsidiaries, Porvenir, Corficolombiana, BAC Credomatic, Grupo Aval consolidated, and our principal competitors, using period end averages, for the periods listed below.

ROAE for Banco de Bogotá, LB Panama and Grupo Aval for the year ended December 31, 2013 has been adjusted to exclude the effect of the equity capitalizations in the amounts of Ps 1,300 billion, Ps 963 billion and Ps 2,114 billion, respectively, effected in December 2013.

	Year ended December 31,
	2013		2012		2011
	(in Ps billions, except percentages)
Banco de Bogotá:
Average assets(1)		90,588		74,658		64,078

Average equity(2)(3)	8,200		7,324		5,382
Net income	1,400		1,326		1,146
Net income divided by average assets	1.5	%	1.8	%	1.8	%
Non-controlling interest	546		426		530
ROAA(1)	2.1	%	2.3	%	2.6	%
ROAE(2)(3)	17.1	%	18.1	%	21.3	%
Non-controlling interest divided by income before non-controlling interest	28.1	%	24.3	%	31.6	%
Banco de Occidente:
Average assets(1)	26,934		23,509		20,409
Average equity(2)	3,613		3,236		2,799
Net income	428		520		432
Net income divided by average assets	1.6	%	2.2	%	2.1	%
Non-controlling interest	1		2		2
ROAA(1)	1.6	%	2.2	%	2.1	%
ROAE(2)	11.9	%	16.1	%	15.4	%
Non-controlling interest divided by income before non-controlling interest	0.3	%	0.4	%	0.4	%
Banco Popular:
Average assets(1)	15,920		14,690		13,487
Average equity(2)	2,297		2,024		1,789
Net income	396		378		372
Net income divided by average assets	2.5	%	2.6	%	2.8	%
Non-controlling interest	2		4		5
ROAA(1)	2.5	%	2.6	%	2.8	%
ROAE(2)	17.3	%	18.7	%	20.8	%
Non-controlling interest divided by income before non-controlling interest	0.6	%	1.0	%	1.3	%

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	Year ended December 31,
	2013		2012		2011
	(in Ps billions, except percentages)
Banco AV Villas:
Average assets(1)		9,315		8,269		7,288

Average equity(2)			1,154				1,033				886
Net income			186				172				165

Net income divided by average assets	2.0	%	2.1	%	2.3	%
Non-controlling interest	0		0		0
ROAA(1)	2.0	%	2.1	%	2.3	%
ROAE(2)	16.1	%	16.7	%	18.6	%
Non-controlling interest divided by income before non-controlling interest	0.0	%	0.1	%	0.1	%

Porvenir:
Average assets(1)	1,281		859		762
Average equity(2)	965		710		570
Net income	202		214		155
Net income divided by average assets	15.7	%	24.9	%	20.3	%
Non-controlling interest	7		0		0
ROAA(1)	16.3	%	24.9	%	20.3	%
ROAE(2)	20.9	%	30.1	%	27.1	%
Non-controlling interest divided by income before non-controlling interest	3.2	%	0.1	%	0.1	%

Corficolombiana:
Average assets(1)	13,565		11,675		9,291
Average equity(2)	3,523		2,974		2,859
Net income	539		304		608
Net income divided by average assets	4.0	%	2.6	%	6.5	%
Non-controlling interest	93		98		77
ROAA(1)	4.7	%	3.4	%	7.4	%
ROAE(2)	15.3	%	10.2	%	21.3	%
Non-controlling interest divided by income before non-controlling interest	14.8	%	24.4	%	11.2	%

LB Panama:
Average assets(1)	28,825		21,134		18,993
Average equity(2)(3)	3,809		3,453		3,329
Net income	481		427		331
Net income divided by average assets	1.7	%	2.0	%	1.7	%
Non-controlling interest	0		0		0
ROAA(1)	1.7	%	2.0	%	1.7	%
ROAE(2)(3)	12.6	%	12.4	%	9.9	%
Non-controlling interest divided by income before non-controlling interest	0.0	%	0.0	%	0.0	%


Grupo Aval consolidated:
Average assets(1)	140,975		119,582		103,906
Average equity(2)(3)	9,348		8,621		6,357
Net income	1,601		1,526		1,291
Net income divided by average assets	1.1	%	1.3	%	1.2	%
Non-controlling interest	1,011		911		1,080
ROAA(1)	1.9	%	2.0	%	2.3	%
ROAE(2)(3)	17.1	%	17.7	%	20.3	%
Non-controlling interest divided by income before non-controlling interest	38.7	%	37.4	%	45.6	%

Bancolombia:
Average assets(1)	114,366	91,690	76,779
Average equity(2)	12,050	10,300	8,470
Net income	1,515	1,702	1,664

Net income divided by average assets			1.3	%			1.9	%			2.2	%
Non-controlling interest			17				6				11

ROAA(1)

1.3

1.9

2.2

ROAE(2)

12.6

16.5

19.6

Non-controlling interest divided by income before non-controlling interest

1.1

0.3

0.7

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	Year ended December 31,
	2013		2012		2011
	(in Ps billions, except percentages)
Davivienda:
Average assets(1)		51,748		41,890		33,134

Average equity(2)	5,695		5,063		4,182
Net income	851		696		630
Net income divided by average assets	1.6	%	1.7	%	1.9	%
Non-controlling interest	6		8		8
ROAA(1)	1.7	%	1.7	%	1.9	%
ROAE(2)	14.9	%	13.7	%	15.1	%
Non-controlling interest divided by income before non-controlling interest	0.7	%	1.1	%	1.2	%

BBVA Colombia:
Average assets(1)	32,706		28,324		24,103
Average equity(2)	3,049		2,711		2,409
Net income	524		454		486
Net income divided by average assets	1.6	%	1.6	%	2.0	%
Non-controlling interest	1		2		1
ROAA(1)	1.6	%	1.6	%	2.0	%
ROAE(2)	17.2	%	16.7	%	20.2	%
Non-controlling interest divided by income before non-controlling interest	0.2	%	0.3	%	0.2	%

Source: Company calculations based on Grupo Aval’s, each banking subsidiary’s and our principal competitors’ consolidated financial statements for the period indicated (financial statements of our principal competitors are publicly available on their websites).

(1)	For methodology used to calculate ROAA, see note (2) to the table under “Item 3. Key Information—A. Selected financial data—Other financial and operating data.”

(2)	For methodology used to calculate ROAE, see note (3) to the table under “Item 3. Key Information—A. Selected financial data—Other financial and operating data.”

(3)

Adjusted to exclude the effect of the equity capitalizations of Banco de Bogotá, LB Panama and Grupo Aval for Ps 1,300 billion, Ps 963 billion and Ps 2,114 billion, respectively, in December 2013. If these items are not excluded, ROAE for Banco de Bogotá, LB Panama and Grupo Aval would be 15.8%, 11.2% and 15.4%, respectively.

The following table sets forth ROAA and ROAE using monthly consolidated information for average assets and average equity for Grupo Aval for the periods indicated.

	Year ended December 31,
	2013			2012			2011
	(in Ps billions, except percentages)
Grupo Aval (consolidated):
Average assets(1)		136,495			118,210			102,576
Average equity(2)(3)		9,250			8,580			5,430
Net income		1,601			1,526			1,291
Net income divided by average assets		1.2	%		1.3	%		1.3	%
Non-controlling interest		1,011			911			1,080
ROAA(1)		1.9	%		2.1	%		2.3	%
ROAE(2)(3)		17.3	%		17.8	%		23.8	%
Non-controlling interest divided by income before non-controlling interest		38.7	%		37.4	%		45.6	%

(1)	For methodology used to calculate ROAA, see note (2) to the table under “Item 3. Key Information—A. Selected financial data—Other financial and operating data.”

(2)	For methodology used to calculate ROAE, see note (3) to the table under “Item 3. Key Information—A. Selected financial data—Other financial and operating data.”

(3)	Adjusted to exclude the effect of the equity capitalization of Ps 2,114 billion in December 2013. If the monthly average equity for 2013 is not adjusted to exclude this effect, the monthly average equity would be Ps 9,413 billion and the ROAE at December 31, 2013 would be 17.0%.

Table of Contents

The following tables set forth ROAA and ROAE using monthly consolidated information for average assets and average equity for our bank subsidiaries for the year ended December 31, 2013.

	Year ended December 31, 2013
	Banco de Bogotá			Banco de Occidente			Banco Popular			Banco AV Villas
	(in Ps billions, except percentages)
Average assets (1)		86,383			26,562			15,931			9,338
Average equity (2)		8,314			3,540			2,259			1,135
Net income		1,400			428			396			186
Net income divided by average assets		1.6	%		1.6	%		2.5	%		2.0	%
Non-controlling interest		546			1			2			0
ROAA(1)		2.3	%		1.6	%		2.5	%		2.0	%
ROAE(2)		16.8	%		12.1	%		17.5	%		16.4	%
Non-controlling interest divided by income before non-controlling interest		28.1	%		0.3	%		0.6	%		0.0	%

(1)	For methodology used to calculate ROAA, see note (2) to the table under “Item 3. Key Information—A. Selected financial data—Other financial and operating data.”

(2)	For methodology used to calculate ROAE, see note (3) to the table under “Item 3. Key Information—A. Selected financial data—Other financial and operating data.”

Efficiency ratio

The following table sets forth the efficiency ratio of our banking subsidiaries, Grupo Aval consolidated and our principal competitors at December 31, 2013.

	At December 31, 2013
	Banco de Bogotá			Banco de Occidente			Banco Popular			Banco AV Villas			Grupo Aval consolidated			Bancolombia			Davivienda			BBVA Colombia
	(in Ps billions)
Total operating expenses		3,780			1,010			716			483			6,028			4,639			2,448			1,254
Depreciation		131			141			26			20			319			429			58			53
Goodwill amortization		86			2			-			-			114			79			106			156
Operating expenses before depreciation and amortization		3,563			868			690			462			5,595			4,132			2,284			1,045
Total operating income		6,500			1,583			1,232			762			9,819			6,534			3,486			-
Provisions, net		774			321			66			133			1,294			1,231			816			-
Operating income before provisions		7,274			1,904			1,298			895			11,113			7,765			4,302			2,315
Efficiency ratio (1)		49.0	%		45.6	%		53.1	%		51.6	%		50.4	%		53.2	%		53.1	%		45.1	%

(1)	Efficiency ratio is calculated as operating expenses before depreciation and amortization divided by operating income before net provisions.

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Tangible equity ratio

The following table sets forth the tangible equity ratio of our subsidiaries, Grupo Aval aggregate, Grupo Aval on a consolidated basis and our principal competitors on a consolidated basis at December 31, 2013.

	At December 31, 2013
	Grupo Aval entities
	Banco de Bogotá			Banco de Occidente			Banco Popular			Banco AV Villas			Grupo Aval aggregate			Grupo Aval consolidated			Bancolombia		Davivienda		BBVA Colombia
	(in Ps billions, except percentages)
Shareholders’ equity		9,897			3,767			2,430			1,175			17,270			11,728			12,493		6,059		3,240
Non-controlling interest		3,482			10			66			4			3,562			6,472			445		60		5
Total assets		100,669			29,030			16,712			9,710			156,120			154,287			130,816		56,374		34,874
Shareholders’ equity + Non-controlling interest / Assets		13.3	%		13.0	%		14.9	%		12.1	%		13.3	%		11.8	%		9.9

Title of each class		Name of each exchange on which registered
Preferred Shares, par value Ps 1.00 per preferred share		Not applicable

C.	Material contracts	303
D.	Exchange controls	303
E.	Taxation	303
F.	Dividends and paying agents	307
G.	Statement by experts	311
H.	Documents on display	311
I.	Subsidiary information	311
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT RISK		311
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES		326
A.	Debt securities	326
B.	Warrants and rights	326
C.	Other securities	326
D.	American Depositary Shares	326
PART II		327
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES		327
A.	Defaults	327
B.	Arrears and delinquencies	327
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS		327
ITEM 15. CONTROLS AND PROCEDURES		327
A.	Disclosure Controls and Procedures	327
B.	Management’s Annual Report on Internal Control over Financial Reporting	327
C.	Attestation Report of the Registered Public Accounting Firm	328
D.	Changes in Internal Control over Financial Reporting	328
ITEM 16. [RESERVED]		328
ITEM 16A. Audit committee financial expert		328
ITEM 16B. Code of ethics		328
ITEM 16C. Principal Accountant Fees and Services		328
ITEM 16D. Exemptions from the listing standards for audit committees		329
ITEM 16E. Purchases of equity securities by the issuer and affiliated purchasers		329
ITEM 16F. Change in registrant’s certifying accountant		329
ITEM 16G. Corporate governance		329
ITEM 16H. Mine safety disclosure		329
PART III		330
ITEM 17. Financial statements		330
ITEM 18. Financial statements		330
ITEM 19. Exhibits		330