UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

☐REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the fiscal year ended December 31, 2014

OR

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

OR

☐SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission file number: 000-54290

GRUPO AVAL ACCIONES Y VALORES S.A.

(Exact name of Registrant as specified in its charter)

Republic of Colombia

(Jurisdiction of incorporation)

Carrera 13 No. 26A - 47

Bogotá D.C., Colombia

(Address of principal executive offices)

Jorge Adrián Rincón

Chief Legal Counsel

Grupo Aval Acciones y Valores S.A.

Carrera 13 No. 26A - 47

Bogotá D.C., Colombia

Phone: (+57 1) 241-9700

E-mail: jrincon@grupoaval.com

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Copies to:

Nicholas A. Kronfeld, Esq.

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, NY 10017

Phone: (212) 450-4000

Securities registered or to be registered pursuant to Section 12(b) of the Act:

None

(Title of Class)

Securities registered or to be registered pursuant to Section 12(g) of the Act:

Title of each class	Name of each exchange on which registered
American Depositary Shares, each representing 20 preferred shares,  par value Ps 1.00 per preferred share	New York Stock Exchange
Preferred Shares, par value Ps 1.00 per preferred share	New York Stock Exchange*

* Grupo Aval Acciones y Valores S.A.’s preferred shares are not listed for trading, but are only listed in connection with the registration of the American Depositary Shares, pursuant to the requirements of the New York Stock Exchange.

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital stock or common stock as of the close of business covered by the annual report.

Preferred shares: 6,906,060,170

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☒ Yes      ☐  No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

☐ Yes    ☒  No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes      ☐  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

☐ Yes      ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ☒ Accelerated filer  ☐ Non-accelerated filer  ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board  ☐ Other  ☒

If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow.

☐ Item 17      ☒  Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes      ☒  No

TABLE OF CONTENTS

Page

PRESENTATION OF FINANCIAL AND OTHER INFORMATION		1
FORWARD-LOOKING STATEMENTS		5
PART I		6
ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS		6
A.	Directors and senior management	6
B.	Advisers	6
C.	Auditors	6
ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE		6
A.	Offer statistics	6
B.	Method and expected timetable	6
ITEM 3.  KEY INFORMATION		6
A.	Selected financial data	6
B.	Capitalization and indebtedness	15
C.	Reasons for the offer and use of proceeds	15
D.	Risk factors	15
ITEM 4.  INFORMATION ON THE COMPANY		39
A.	History and development of the company	39
B.	Business overview	48
C.	Organizational structure	174
D.	Property, plants and equipment	174
ITEM 4A.  UNRESOLVED STAFF COMMENTS		175
ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS		175
A.	Operating results	175

B.	Liquidity and capital resources	284
C.	Research and development, patents and licenses, etc.	289
D.	Trend information	289
E.	Off-balance sheet arrangements	289
F.	Tabular disclosure of contractual obligations	290

ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES		290
A.	Directors and senior management	290
B.	Compensation	296
C.	Board practices	297
D.	Employees	299
E.	Share ownership	299
ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS		301
A.	Major shareholders	301
B.	Related party transactions	302
C.	Interests of experts and counsel	305
ITEM 8.  FINANCIAL INFORMATION		305
A.	Consolidated statements and other financial information	305
B.	Significant changes	306
ITEM 9.  THE OFFER AND LISTING		306
A.	Offering and listing details	306
B.	Plan of distribution	306
C.	Markets	307
D.	Selling shareholders	309
E.	Dilution	309
F.	Expenses of the issue	309
ITEM 10.  ADDITIONAL INFORMATION		309
A.	Share capital	309
B.	Memorandum and articles of association	309
C.	Material contracts	317
D.	Exchange controls	317
E.	Taxation	317
F.	Dividends and paying agents	322
G.	Statement by experts	326
H.	Documents on display	326
I.	Subsidiary information	326
ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT RISK		326
ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES		342
A.	Debt securities	342
B.	Warrants and rights	342
C.	Other securities	342
D.	American depositary shares	342

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PART II		344
ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES		344
A.	Defaults	344
B.	Arrears and delinquencies	344
ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS		344
A.	Material modifications to instruments	344
B.	Material modifications to rights	344
C.	Withdrawal or substitution of assets	344
D.	Change in trustees or paying agents	344
E.	Use of proceeds	344
ITEM 15.  CONTROLS AND PROCEDURES		345
A.	Disclosure controls and procedures	345
B.	Management’s annual report on internal control over financial reporting	345
C.	Attestation report of the registered public accounting firm	346
D.	Changes in internal control over financial reporting	346
ITEM 16.  [RESERVED]		346
ITEM 16A.  Audit committee financial expert		346
ITEM 16B.  Code of ethics		346
ITEM 16C.  Principal accountant fees and services		346
ITEM 16D.  Exemptions from the listing standards for audit committees		347

ITEM 16E.  Purchases of equity securities by the issuer and affiliated purchasers	347
ITEM 16F.  Change in registrant’s certifying accountant	348
ITEM 16G.  Corporate governance	348
ITEM 16H.  Mine safety disclosure	349
PART III	350
ITEM 17.  Financial statements	350
ITEM 18.  Financial statements	350
ITEM 19.  Exhibits	350
Signatures	351
Index to Consolidated Financial Statements	F-1

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

All references herein to “peso,” “pesos,” “Colombian 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 and operating 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 and for the year ended ‎December 31, 2014 have been translated at the ‎rate of Ps 2,392.46 per U.S.$1.00, which was the representative market rate calculated on December 31, 2014. 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 22, 2015, the representative market rate was Ps 2,469.03 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 Panamá” means Banco BAC de Panamá, S.A., and its consolidated subsidiaries, formerly known as Banco Bilbao Vizcaya Argentaria (Panamá) or “BBVA Panamá”;

· “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 Panamá” means Leasing Bogotá S.A., Panamá and its consolidated subsidiaries; and

· “Porvenir” means Sociedad Administradora de Fondos de Pensiones y Cesantías Porvenir S.A. and its consolidated subsidiary.

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

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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.

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

We are an issuer in Colombia of securities registered with the National Registry of Shares and Issuers, and in this capacity, we are subject to oversight by the Superintendency of Finance. We are not a financial institution in Colombia. We are required to comply with corporate governance and periodic reporting requirements to which all issuers are subject, but are not supervised or regulated as a financial institution or as a holding company of banking subsidiaries and, thus, are 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 Credomatic, subject to inspection and surveillance as a financial institution by the relevant regulatory authorities in each country where BAC Credomatic operates.

Our consolidated financial statements at December 31, 2014 and 2013 and for each of the years ended December 31, 2014, 2013 and 2012 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 the consolidated financial statements 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 (which we refer to in this annual report, collectively, as “Colombian Banking GAAP”).

Although we are not regulated as 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. Our 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 submitted 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 our 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, we also from time to time publish semi-annual or quarterly financial data for subsequent periods on a Colombian Banking GAAP basis.

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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 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 Panamá segment

On December 9, 2010, we acquired BAC Credomatic through LB Panamá, a Central American banking group. See “Item 4. Information on the Company—B. Business overview—BAC Credomatic.”

LB Panamá’s financial information is prepared in accordance with Colombian Banking GAAP and primarily reflects BAC Credomatic’s consolidated results since December 2010 (including Grupo Financiero Reformador and Banco BAC de Panamá (merged into BAC International Bank, Inc. on December 9, 2014) since December 2013). As of December 31, 2014, LB Panamá’s unconsolidated balance sheet carried goodwill of Ps 3,031.3 billion (U.S.$1,267 million) resulting from the direct acquisitions the company made of BAC Credomatic and Banco BAC de Panamá (merged into BAC International Bank, Inc.). LB Panamá’s unconsolidated balance sheet also includes Ps 2,527.2 billion (U.S.$1,056 million) of indebtedness, including Ps 646.0  billion (U.S.$270 million) incurred to fund a portion of our acquisition of BAC Credomatic and Ps 1,881.2 billion (U.S.$786 million) of additional indebtedness, of which Ps 589.3 billion (U.S.$246 million) is owed to Grupo Aval Limited and Ps 1,291.9 billion (U.S.$540 million) is owed to Deutsche Bank. As of December 31, 2014, LB Panamá had a fixed income portfolio of Ps 1,757.8 billion (U.S.$735 million) comprised mainly of investment grade bonds issued by Latin American sovereign and corporate issuers, acquired pursuant to Banco de Bogotá’s investment guidelines.

Financial information for the year ended December 31, 2014 reflects the consolidation of Grupo Financiero Reformador and Banco BAC de Panamá (merged into BAC International Bank, Inc.), which were acquired in December 2013. As a result, financial information for the year ended December 31, 2014 and for the year ended December 31, 2013 are not fully comparable with prior periods.

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 to that of our competitors reflects the unconsolidated results of our banking subsidiaries, Porvenir, Corficolombiana and BAC Credomatic. “Grupo Aval aggregate” data throughout this annual report 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 of subsidiaries such as Corficolombiana, Porvenir or LB Panamá, are not intended to reflect the consolidated financial results of Grupo

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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 in accordance with U.S. GAAP. Information regarding our competitors that is presented on a consolidated basis is 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 filed with the Superintendency of Finance.

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 calculation 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.” We have included in this annual report competitive market position data for Porvenir as compared to these principal competitors. 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 Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panamá include Banco Industrial, Scotiabank, G&T Continental, Citibank and Bancolombia (which in October 2013 acquired (i) a 40% interest in Grupo Agromercantil Holding S.A., the parent Company of Banco Agromercantil in Guatemala, and (ii) a 100% interest in the ordinary voting shares in Banistmo (formerly HSBC Bank (Panamá) S.A. in Panamá)).

We include certain ratios in this annual report which we believe provide investors with important information regarding our operations, such as return on average shareholders’ equity, or “ROAE,” return on average assets, or “ROAA,” net interest margin, and operational efficiency and asset quality indicators, among others. In addition, certain of these ratios are also used in this annual report to compare us to our principal competitors.

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) a 98.92% equity interest in Banco BAC de Panamá on December 19, 2013 through its subsidiary LB Panamá and (ii) 100.00% equity interest in Grupo Financiero Reformador de Guatemala on December 23, 2013 through its indirect subsidiary Credomatic International Corporation (a subsidiary of LB Panamá).  On December 9, 2014, Banco BAC de Panamá was merged into BAC International Bank, Inc.

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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 5. Operating and financial review and prospects” and “Item 4. Information on the Company—B. Business overview.” 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, particularly in Colombia and in jurisdictions we operate in Central America;

· 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 operate and natural disasters;

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· loss of key members of our senior management; and

· other risk factors as set forth under ““Item 3. Key information—D. Risk factors.”

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.

PART I

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

A.  Directors and senior management

Not applicable.

B.  Advisers

Not applicable.

C.  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, 2014 and 2013 and for the years ended December 31, 2014, 2013 and 2012 have been derived from our audited 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 and 2010 and for the year ended December 31, 2010 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, “Presentation of financial and other information” and “Item 5. Operating and financial review and prospects” included in this annual report.

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Statement of income data

	Grupo Aval
	For the year ended December 31,
	2014			2014			2013			2012			2011			2010
	(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		3,159.1			7,558.1			6,981.0			6,310.3			5,468.9			4,628.8
Provisions for loan and financial lease losses, accrued interest and other receivables, net		(700.1	)		(1,675.0	)		(1,417.4	)		(1,041.8	)		(874.9	)		(820.3	)
Recovery of charged-off assets		79.1			189.2			148.2			142.7			167.5			109.0
Provision (recovery) for  investment securities, foreclosed assets and other assets		(21.9	)		(52.4	)		(25.0	)		(18.2	)		291.1			(315.6	)
Total (provisions) reversals, net		(642.9	)		(1,538.2	)		(1,294.2	)		(917.3	)		(416.3	)		(1,026.9	)
Total fees and other services income, net		1,322.0			3,162.8			2,814.4			2,382.0			2,234.4			1,617.7
Total other operating income		470.4			1,125.4			1,317.4			885.7			958.0			785.5
Total operating income		4,308.5			10,308.0			9,818.5			8,660.6			8,244.9			6,005.1
Total operating expenses		(2,749.6	)		(6,578.2	)		(6,028.1	)		(5,299.5	)		(4,932.9	)		(3,520.0	)
Net operating income		1,559.0			3,729.8			3,790.4			3,361.1			3,312.0			2,485.1
Non-operating income (expense):
Other income		228.7			547.1			453.4			618.5			320.7			364.6
Other expense		(118.7	)		(284.0	)		(217.2	)		(170.4	)		(124.5	)		(187.6	)
Total non-operating income (expense), net		110.0			263.1			236.1			448.1			196.2			176.9
Income before income tax expense and non-controlling interest		1,669.0			3,992.9			4,026.6			3,809.2			3,508.2			2,662.1
Income tax expense		(605.7	)		(1,449.0	)		(1,414.7	)		(1,371.7	)		(1,136.7	)		(831.0	)
Income before non-controlling interest		1,063.3			2,543.9			2,611.9			2,437.4			2,371.5			1,831.1
Non-controlling interest		(365.8	)		(875.2	)		(1,011.4	)		(911.1	)		(1,080.2	)		(874.2	)
Net income attributable to Grupo Aval shareholders		697.5			1,668.7			1,600.5			1,526.4			1,291.2			956.9
Earnings per 1,000 shares (basic and diluted earnings):
Common and preferred shares (in pesos)					79,850.9			86,013.9			82,277.2			79,184.3			68,621.0
Common and preferred shares (in U.S. dollars) (1)					33.4			36.0			34.4			33.1			28.7
Dividends and interest on capital per 1,000 shares (2):
Common and preferred shares (in pesos)					61,733.7			55,632.9			49,200.0			48,465.3			37,800.0
Common and preferred shares (in U.S. dollars) (1)					25.8			23.3			20.6			20.3			15.8
Weighted average number of common and preferred fully paid shares outstanding (basic and diluted):
Outstanding shares (in thousands)					20,897,356.4			18,607,487.3			18,551,766.5			16,306,613.4			13,943,980.7
U.S. GAAP (3)
Provision for loans, leases and other receivables					(1,389.6	)		(1,113.5	)		(971.7	)		(670.0	)		(614.0	)
Net income attributable to controlling interest under U.S. GAAP					1,854.9			1,632.5			1,564.5			885.3			965.3
Basic and diluted net income per 1,000 shares
Outstanding shares (pesos)					88,762.4			87,731.9			84,330.3			54,293.4			69,228.4
Outstanding shares (U.S. dollars) (1)					37.1			36.7			35.2			22.7			28.9

(1) Translated for convenience only using the representative market rate as computed and certified by the Superintendency of Finance at December 31, 2014 of Ps 2,392.46 per U.S.$1.00.

(2) 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.

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

7

Balance sheet data

	Grupo Aval
	At December 31,
	2014			2014			2013			2012			2011			2010
	(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		7,813.5			18,693.5			16,096.6			13,398.9			11,698.6			9,682.6
Total investment securities, net		11,950.5			28,591.0			27,298.6			23,295.8			18,975.2			19,174.9
Total loans and financial leases, net		45,702.9			109,342.4			93,440.8			77,483.8			67,641.2			56,439.7
Total interest accrued on loans and financial leases, net		347.2			830.7			735.2			716.0			583.5			448.2
Bankers’ acceptances, spot transactions and derivatives		509.5			1,218.9			411.9			454.3			418.8			306.9
Accounts receivable, net		881.6			2,109.2			1,765.6			1,800.9			1,612.9			1,337.3
Property, plant and equipment, net		951.3			2,276.0			2,044.8			1,794.9			1,761.3			1,643.7
Operating leases, net		170.1			406.8			439.2			375.7			323.2			263.9
Foreclosed assets, net		56.1			134.1			109.2			92.0			77.8			85.5
Prepaid expenses and deferred charges		1,181.6			2,827.0			2,239.7			1,961.7			1,956.2			920.7
Goodwill, net (2)		2,351.8			5,626.7			4,968.0			2,842.5			3,110.7			3,031.4
Other assets, net		709.9			1,698.3			1,323.9			1,128.6			1,072.6			912.0
Reappraisal of assets		1,613.4			3,860.0			3,413.7			2,317.8			2,269.7			2,062.5
Total assets		74,239.4			177,614.7			154,287.4			127,663.0			111,501.9			96,309.3
Liabilities:
Total deposits		47,813.6			114,392.2			101,190.4			81,463.3			71,007.6			63,669.3
Bankers’ acceptances and derivatives financial instruments		832.6			1,992.1			447.3			410.0			469.0			309.3
Interbank borrowings and overnight funds		1,918.3			4,589.5			5,123.6			5,156.5			3,225.1			2,477.4
Borrowings from banks and others		6,083.7			14,555.1			11,954.1			10,380.9			11,437.8			10,491.2
Accounts payable		1,184.6			2,834.0			2,867.7			3,005.3			3,093.9			2,243.5
Accrued interest payable		261.3			625.2			509.2			474.8			313.0			247.4
Other liabilities		1,263.4			3,022.6			2,221.7			1,700.6			1,447.8			1,291.9
Long-term debt (bonds)		5,241.9			12,541.0			11,179.7			9,769.0			6,566.2			5,952.4
Estimated liabilities		250.0			598.2			593.3			811.7			855.3			596.9
Non-controlling interest		3,079.8			7,368.2			6,472.2			5,407.7			4,927.0			4,475.5
Total liabilities		67,929.3			162,518.0			142,559.2			118,579.9			103,342.7			91,754.7
Shareholders’ equity:
Subscribed and paid-in capital:
Common and preferred shares		9.3			22.3			20.2			18.6			18.6			13.9
Additional paid-in capital		3,554.8			8,504.7			5,784.5			3,671.7			3,671.1			647.4
Retained earnings:
Appropriated		1,658.5			3,967.9			3,574.8			2,911.3			2,332.0			1,930.3
Unappropriated		355.0			849.4			765.6			804.9			669.0			483.3
Equity surplus:
Equity inflation adjustments		272.6			652.1			652.2			654.6			741.9			742.1
Unrealized gains (losses) on investment securities available for sale		(227.4	)		(543.9	)		(523.6	)		78.2			(293.0	)		29.7
Reappraisal of assets		687.2			1,644.1			1,454.5			943.8			1,019.6			707.8
Total shareholders’ equity (2)		6,310.1			15,096.6			11,728.2			9,083.1			8,159.1			4,554.6
Total liabilities and shareholders’ equity		74,239.4			177,614.7			154,287.4			127,663.0			111,501.9			96,309.3
U.S. GAAP (3)
Loans		45,547.2			108,969.8			93,924.4			78,333.3			68,067.0			57,784.6
Financial leases		3,624.7			8,672.0			8,103.4			7,650.7			6,392.8			4,015.0
Total loans and financial leases		49,171.9			117,641.8			102,027.8			85,984.0			74.459.8			61,799.6
Allowance for loans, lease losses and other receivables losses		(1,209.8	)		(2,894.5	)		(2,615.7	)		(2,350.4	)		(2,012.9	)		(2,012.4	)
Total loans and financial leases, net		47,962.1			114,747.3			99,412.0			83,633.6			72,446.9			59,787.2
Controlling interest shareholders’ equity under U.S. GAAP		5,331.8			12,756.0			9,536.5			7,426.2			6,466.7			3,949.5
Controlling interest shareholders’ equity under U.S. GAAP per 1,000 shares (U.S. dollars and Ps)		255,140.0			610,412.1			512,510.6			400,297.5			396,567.6			283,242.4

8

(1) Translated for convenience only using the representative market rate as computed and certified by the Superintendency of Finance at December 31, 2014 of Ps 2,392.46 per U.S.$1.00.

(2) Goodwill attributable to Grupo Aval’s shareholders was Ps 4,133.3 billion and Ps 3,617.4 billion at December 31, 2014 and 2013, respectively. Our attributable tangible equity (calculated as total shareholders’ equity minus goodwill attributable to Grupo Aval) was Ps 10,963.3 billion and Ps 8,110.8 billion at December 31, 2014 and 2013, respectively.

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

Other financial and operating data

	Grupo Aval
	At and for the year ended December 31,
Colombian Banking GAAP	2014		2013		2012		2011		2010
	(in percentages, unless otherwise indicated)
Profitability ratios:
Net interest margin (1)		5.8		6.2		6.5		6.5		7.2
ROAA (2)		1.5		1.9		2.0		2.3		2.2
ROAE (3)		12.4		17.1		17.7		20.3		22.2
Efficiency ratio:
Operating expenses before depreciation and amortization / total operating income before net provisions (4)		51.0		50.4		51.3		52.7		46.6
Capital ratios:
Period-end shareholders’ equity and non-controlling interest as a percentage of period-end total assets		12.6		11.8		11.4		11.7		9.4
Tangible equity ratio (5)		9.8		8.9		9.3		9.2		6.4
Credit quality data:
Non-performing loans as a percentage of total loans (6)		1.9		1.8		1.6		1.6		1.9
Delinquency ratio past due more than 30 days		2.6		2.4		2.3		2.2		2.7
“C,” “D” and “E” loans as a percentage of total loans (7)		4.0		3.5		3.3		3.2		3.9
Allowance for loans as a percentage of non-performing loans		163.1		179.3		194.3		200.6		194.0
Allowance for loans as a percentage of past due loans		117.1		133.3		139.2		150.0		139.1
Allowance for loans as a percentage of “C,” “D” and “E” loans		74.9		90.4		95.6		103.8		96.2
Allowance for loans as a percentage of total loans		3.0		3.2		3.2		3.3		3.7
Operational data (in units):
Number of customers of the banks (8)		12,950,374		11,661,279		10,345,695		9,596,694		8,700,266
Number of employees		74,211		66,865		59,406		54,463		53,485
Number of branches (9)		1,769		1,721		1,545		1,491		1,438
Number of ATMs (9)		5,429		5,179		4,328		3,835		3,518

(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%.

9

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: 1.6%, 1.9%, 2.1%, 2.3% and 2.4% for the periods ended December 31, 2014, 2013, 2012, 2011 and 2010, respectively.

(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), ROAE for the year ended December 31, 2014, is 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: 13.0%, 17.3%, 17.8%, 23.8% and 23.3% for the periods ended December 31, 2014, 2013, 2012, 2011 and 2010, respectively. 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.”

(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. 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 and other 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.” The non-GAAP financial measures as determined and measured by us, should also not be compared to similarly titled measures reported by other companies. Other companies may report such measures differently.

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 each of our banking subsidiaries, Porvenir, Corficolombiana, LB Panamá, Grupo Aval consolidated, and those of our principal competitors, using period-end averages, for the periods listed below.

ROAE for Banco de Bogotá for the year ended December 31, 2014 has been adjusted to exclude the effect of the equity capitalizations in the amount of Ps 1,500 billion, as this capitalization took place towards the end of the year and had no material impact on Banco de Bogotá’s income statement for 2014.

ROAA and ROAE for Banco de Occidente for the year ended December 31, 2014 have been adjusted to exclude the positive effect from the net gain of Ps 729.8 billion associated with the reclassification of its investment in Corficolombiana from its available for sale portfolio to its trading portfolio, and with the sale of part of these shares to Grupo Aval.

10

ROAE for Banco de Bogotá, LB Panamá 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, as the capitalizations took place towards the end of the year and had no material impact on our income statement for 2013.

	Year ended December 31,
	2014			2013			2012
	(in Ps billions, except percentages)
Banco de Bogotá:
Average assets(1)		109,518			90,588			74,658
Average equity(2)(3)		10,300			8,200			7,324
Net income		1,389			1,400			1,326
Net income divided by average assets		1.3	%		1.5	%		1.8	%
Non-controlling interest		502			546			426
ROAA(1)		1.7	%		2.1	%		2.3	%
ROAE(2)(3)		13.5	%		17.1	%		18.1	%
Non-controlling interest divided by income before non-controlling interest		26.5	%		28.1	%		24.3	%
Banco de Occidente:
Average assets(1)		30,781			26,934			23,509
Average equity(2)		3,885			3,613			3,236
Net income(4)		466			428			520
Net income divided by average assets		1.5	%		1.6	%		2.2	%
Non-controlling interest		2			1			2
ROAA(1)		1.5	%		1.6	%		2.2	%
ROAE(2)		12.0	%		11.9	%		16.1	%
Non-controlling interest divided by income before non-controlling interest		0.3	%		0.3	%		0.4	%
Banco Popular:
Average assets(1)		16,886			15,920			14,690
Average equity(2)		2,528			2,297			2,024
Net income		366			396			378
Net income divided by average assets		2.2	%		2.5	%		2.6	%
Non-controlling interest		1			2			4
ROAA(1)		2.2	%		2.5	%		2.6	%
ROAE(2)		14.5	%		17.3	%		18.7	%
Non-controlling interest divided by income before non-controlling interest		0.2	%		0.6	%		1.0	%
Banco AV Villas:
Average assets(1)		10,340			9,315			8,269
Average equity(2)		1,230			1,154			1,033
Net income		195			186			172
Net income divided by average assets		1.9	%		2.0	%		2.1	%
Non-controlling interest		0			0			0
ROAA(1)		1.9	%		2.0	%		2.1	%
ROAE(2)		15.9	%		16.1	%		16.7	%
Non-controlling interest divided by income before non-controlling interest		0.2	%		0.0	%		0.1	%
Porvenir:
Average assets(1)		1,772			1,281			859
Average equity(2)		1,206			965			710
Net income		282			202			214
Net income divided by average assets		15.9	%		15.7	%		24.9	%
Non-controlling interest		1			7			0
ROAA(1)		16.0	%		16.3	%		24.9	%
ROAE(2)		23.4	%		20.9	%		30.1	%
Non-controlling interest divided by income before non-controlling interest		0.2	%		3.2	%		0.1	%
Corficolombiana:
Average assets(1)		13,033			13,565			11,675
Average equity(2)		4,280			3,523			2,974
Net income		421			539			304
Net income divided by average assets		3.2	%		4.0	%		2.6	%
Non-controlling interest		86			93			98
ROAA(1)		3.9	%		4.7	%		3.4	%
ROAE(2)		9.8	%		15.3	%		10.2	%
Non-controlling interest divided by income before non-controlling interest		17.0	%		14.8	%		24.4	%

11

	Year ended December 31,
	2014			2013			2012
	(in Ps billions, except percentages)
LB Panamá:
Average assets(1)		40,662			28,825			21,134
Average equity(2)(3)		6,031			3,809			3,453
Net income		502			481			427
Net income divided by average assets		1.2	%		1.7	%		2.0	%
Non-controlling interest		1			0			0
ROAA(1)		1.2	%		1.7	%		2.0	%
ROAE(2)(3)		8.3	%		12.6	%		12.4	%
Non-controlling interest divided by income before non-controlling interest		0.2	%		0.0	%		0.0	%

Grupo Aval consolidated:
Average assets(1)	165,951		140,975		119,582
Average equity(2)(3)	13,412		9,348		8,621
Net income	1,669		1,601		1,526
Net income divided by average assets	1.0	%	1.1	%	1.3	%
Non-controlling interest	875		1,011		911
ROAA(1)	1.5	%	1.9	%	2.0	%
ROAE(2)(3)	12.4	%	17.1	%	17.7	%
Non-controlling interest divided by income before non-controlling interest	34.4	%	38.7	%	37.4	%
Bancolombia:
Average assets(1)	139,771		114,366		91,690
Average equity(2)	14,655		12,050		10,300
Net income	1,879		1,515		1,702
Net income divided by average assets	1.3	%	1.3	%	1.9	%
Non-controlling interest	(0	)	17		6
ROAA(1)	1.3	%	1.3	%	1.9	%
ROAE(2)	12.8	%	12.6	%	16.5	%
Non-controlling interest divided by income before non-controlling interest	0.0	%	1.1	%	0.3	%

Davivienda:
Average assets(1)	61,923		51,748		41,890
Average equity(2)	6,518		5,695		5,063
Net income	1,060		851		696
Net income divided by average assets	1.7	%	1.6	%	1.7	%
Non-controlling interest	6		6		8
ROAA(1)	1.7	%	1.7	%	1.7	%
ROAE(2)	16.3	%	14.9	%	13.7	%
Non-controlling interest divided by income before non-controlling interest	0.6	%	0.7	%	1.1	%
BBVA Colombia:
Average assets(1)	38,205		32,706		28,324
Average equity(2)	3,368		3,049		2,711
Net income	504		524		454
Net income divided by average assets	1.3	%	1.6	%	1.6	%
Non-controlling interest	1		1		2
ROAA(1)	1.3	%	1.6	%	1.6	%
ROAE(2)	15.0	%	17.2	%	16.7	%
Non-controlling interest divided by income before non-controlling interest	0.2	%	0.2	%	0.3	%

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 respective 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) Average equity for 2014 adjusted to exclude the effect of the equity capitalizations of Banco de Bogotá for Ps 1,500 billion. If this item were not excluded, ROAE for Banco de Bogotá would be 12.6%. Average equity for 2013 adjusted to exclude the effect of the equity capitalizations of Banco de Bogotá, LB Panamá and Grupo Aval for Ps 1,300 billion, Ps 963 billion and Ps 2,114 billion, respectively, in

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December 2013 as the capitalization took place towards the end of the year and had no material impact on our income statement.  If these items are not excluded, ROAE for Banco de Bogotá, LB Panamá and Grupo Aval would be 15.8%, 11.2% and 15.4%, respectively.

(4) Banco de Occidente’s net income for 2014 is adjusted to exclude the positive effect from the net gain of Ps 729.8 billion associated with the reclassification of its investment in Corficolombiana from its available for sale portfolio to its trading portfolio, and with the sale of part of these shares to Grupo Aval. If this item were not excluded, ROAA and ROAE for Banco de Occidente would be 3.9% and 30.8%, respectively.

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

	Year ended December 31,
	2014			2013			2012
	(in Ps billions, except percentages)
Grupo Aval (consolidated):
Average assets(1)		163,474			136,495			118,210
Average equity(2)(3)		12,853			9,250			8,580
Net income		1,669			1,601			1,526
Net income divided by average assets		1.0	%		1.2	%		1.3	%
Non-controlling interest		875			1,011			911
ROAA(1)		1.6	%		1.9	%		2.1	%
ROAE(2)(3)		13.0	%		17.3	%		17.8	%
Non-controlling interest divided by income before non-controlling interest		34.4	%		38.7	%		37.4	%

(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 Grupo Aval of Ps 2,114 billion in December 2013 as the capitalization took place towards the end of the year and had no material impact on our income statement. 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%.

The following table sets forth ROAA and ROAE using monthly consolidated information for average assets and average equity for our bank subsidiaries for the year ended December 31, 2014.

	Year ended December 31, 2014
	Banco de Bogotá			Banco de Occidente			Banco Popular			Banco AV Villas
	(in Ps billions, except percentages)
Average assets (1)		107,025			30,646			17,440			10,416
Average equity (2)		10,255			3,883			2,532			1,230
Net income(3)		1,389			466			366			195
Net income divided by average assets		1.3	%		1.5	%		2.1	%		1.9	%
Non-controlling interest		502			2			1			0
ROAA(1)		1.8	%		1.5	%		2.1	%		1.9	%
ROAE(2)		13.5	%		12.0	%		14.4	%		15.9	%
Non-controlling interest divided by income before non-controlling interest		26.5	%		0.3	%		0.2	%		0.2	%

(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) Banco de Occidente’s net income for 2014 is adjusted to exclude the positive effect from the net gain of Ps 729.8 billion associated with the reclassification of its investment in Corficolombiana from its available for sale portfolio to its trading portfolio, and with the sale of part of these shares to Grupo Aval. If this item were not excluded, ROAA and ROAE for Banco de Occidente would be 3.9% and 30.8%, respectively.

Efficiency ratio

We believe that the efficiency ratio, which is calculated as operating expenses before depreciation and amortization divided by operating income before net provisions, provides investors with important information regarding our operational efficiency.

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The following table sets forth the efficiency ratio of our banking subsidiaries, Grupo Aval consolidated and our principal competitors at December 31, 2014.

	At December 31, 2014
	Banco de Bogotá			Banco de Occidente			Banco Popular			Banco AV Villas			Grupo Aval consolidated			Bancolombia			Davivienda			BBVA Colombia
	(in Ps billions)
Total operating expenses		4,233			1,113			710			488			6,578			5,562			2,695			1,358
Depreciation		160			172			26			17			374			537			61			61
Goodwill amortization		132			2			–			–			167			398			80			162
Operating expenses before depreciation and amortization		3,941			939			684			471			6,038			4,628			2,554			1,134
Total operating income(2)		6,945			1,715			1,213			765			10,308			8,089			3,949			–
Provisions, net		988			368			69			114			1,538			1,405			809			–
Operating income before provisions		7,932			2,083			1,283			879			11,846			9,494			4,758			2,506
Efficiency ratio (1)		49.7	%		45.1	%		53.3	%		53.6	%		51.0	%		48.7	%		53.7	%		45.3	%

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

(2) Banco de Occidente’s total operating income for 2014 is adjusted to exclude the positive effect from the net gain of Ps 729.8 billion associated with the reclassification of its investment in Corficolombiana from its available for sale portfolio to its trading portfolio, and with the sale of part of these shares to Grupo Aval. If this item were not excluded, the efficiency ratio for Banco de Occidente would be 33.4%.

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, 2014.

	At December 31, 2014
	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		12,203			4,003			2,626			1,284			20,116			15,097			16,817			6,977			3,496
Non-controlling interest		3,857			14			67			4			3,942			7,368			494			64			6
Total assets		118,367			32,531			17,059			10,971			178,928			177,615			148,725			67,471			41,536
Shareholders’ equity + Non-controlling interest / Assets		13.6	%		12.3	%		15.8	%		11.7	%		13.4	%		12.6	%		11.6	%		10.4	%		8.4	%
Goodwill		4,661			21			–			–			4,683			5,627			3,971			1,550