Proposed Grupo Aval Fiduciary Consolidation Will Not Immediately Affect Ratings, says Fitch

Fitch Ratings (Fitch Ratings), the global credit rating agency, has stated that the announced consolidation of four fiduciary subsidiaries of Grupo Aval Acciones y Valores S.A. (Grupo Aval) through a spin-off will not have immediate implications on their current credit ratings. The four companies—Fiduciaria Bogotá (Fiduciaria Bogotá), Fiduciaria de Occidente (Fiduciaria de Occidente), Fiduciaria Popular (Fiduciaria Popular), and Aval Fiduciaria (Aval Fiduciaria)—are set to merge into Aval Fiduciaria, which will be the beneficiary entity.

As a result of this announcement, the existing credit risk ratings for Aval Fiduciaria and Fiduciaria de Occidente, as well as the quality ratings for investment management for Fiduciaria Bogotá, Fiduciaria de Occidente, and Aval Fiduciaria, will remain unchanged. Fitch’s conclusion is based on the financial strength of the publicly traded parent company, Grupo Aval (NYSE: AVAL, BVC: AVAL-C).

Fitch’s position is supported by Grupo Aval’s international issuer default rating of ‘BB+’ with a negative outlook. The ratings agency also considered Grupo Aval’s management’s strategic and operational plan, which is focused on consolidating a leading entity in terms of assets under management, capturing synergies, and incorporating best practices from each fiduciary company into internal processes. At this stage, Fitch has not identified any changes in the individual credit profiles or the governance frameworks for investment management that would justify a rating action.

However, the agency noted that executing the consolidation and integration plan could lead to operational and business adjustments. Fitch will monitor these changes as the regulatory and corporate processes advance. The agency will continue to evaluate key implementation milestones, performance metrics, the evolution of operational risks, and the stabilization of each process. Fitch stated that it will communicate any developments that could lead to a rating action in the future.

Grupo Aval at the Bolsa de Valores de Colombia. Photo credit: Grupo Aval/Facebook.