Is AVAL a Buy or a Sell? The Bull and Bear Case (2026)

That depends on which case you find more convincing, and both are on this page. The bull case rests on Deposit gathering is outpacing lending, with revenue (2q 2026) at ~COP 4.78 trillion, up ~18.6% year over year. The bear case rests on country risk dominates: Colombian fiscal deterioration, sovereign rating actions, tax changes like the 2026 equity levy, and the political cycle all land directly on this stock, often faster than any operating result. If you believe the thesis, the real questions become sizing and overlap rather than timing. Walnut is not an investment adviser and this is not a recommendation.

Nobody can answer that for you, and the honest version of the question is narrower: has anything changed in the reason you bought it? The bear case on this page is the place to check. Country risk dominates: Colombian fiscal deterioration, sovereign rating actions, tax changes like the 2026 equity levy, and the political cycle all land directly on this stock, often faster than any operating result. If that risk is what you were worried about and it is now playing out, that is a real signal. If the price simply fell while the thesis held, that is a different situation entirely. Walnut is not an investment adviser.

Deposit gathering is outpacing lending. Deposits grew roughly 11.7% year over year in the first quarter of 2026 while gross loans grew about 6%.

Country risk dominates: Colombian fiscal deterioration, sovereign rating actions, tax changes like the 2026 equity levy, and the political cycle all land directly on this stock, often faster than any operating result. Currency is the second layer, because results are earned in pesos and the ADR is priced in dollars, so peso weakness can erase a solid operating year for US holders. Credit quality is the third: a policy rate near 12% alongside roughly 6% inflation strains consumer and small business borrowers, and provisioning can rise quickly if unemployment worsens. Corficolombiana carries legacy infrastructure exposure and a history of legal and compliance matters tied to Colombian road concessions, which has produced headline risk in the past. The 2026 rally (up about 21% year to date and 32% over one year by October 16) also leaves less room for disappointment if earnings slip, as the small second-quarter miss against estimates showed. Finally, the ADR is thinly traded relative to US bank stocks, the underlying is a preferred share class with limited voting rights, and the group is majority-controlled by the Sarmiento family, so minority holders have little say in capital allocation.

Colombian financial holding company controlling four commercial banks plus pension and merchant-banking arms.

Decide that in advance, because it is far harder to think clearly once a position is moving against you. The concrete tripwires here: the driver behind the bull case (Deposit gathering is outpacing lending) stalling in the reported numbers rather than in the narrative, the risk above (country risk dominates: Colombian fiscal deterioration, sovereign rating actions, tax changes like the 2026 equity levy, and the political cycle all land directly on this stock, often faster than any operating result) turning from a possibility into a reported fact, or the position growing large enough that a bad outcome would matter to your whole portfolio regardless of who is right.

Grupo Aval is a Colombian financial holding company. It controls four commercial banks (Banco de Bogota, Banco de Occidente, Banco Popular and Banco AV Villas), the pension manager Porvenir, the merchant bank Corficolombiana, and trust, brokerage and investment banking subsidiaries. Combined, they form the largest banking group in Colombia by loans and deposits.

AVAL is an American Depositary Receipt listed on the NYSE, so it trades in US dollars through any standard US brokerage account during regular US market hours, with no special foreign-market access required. The ADR represents Colombian-listed preferred shares held by a depositary bank. Depositary fees and Colombian dividend withholding can reduce what actually reaches a US account.

The discount, roughly 0.66 times book in mid-2026, reflects country-level risk rather than a judgment on the banks themselves. Investors are pricing Colombian fiscal deterioration, an unpredictable tax regime (the 2026 equity levy being the current example), peso volatility and the political cycle. Emerging-market banks with sound franchises routinely trade below book when sovereign risk is elevated, and AVAL's forward P/E near 7.7x in October 2026 tells the same story.