Grupo Aval Acciones y Valores S A : Consolidated Financial Statements 3Q19

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 3Q 2019

GRUPO AVAL ACCIONES Y VALORES S.A.

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Condensed Consolidated Statement of Financial Position

(Figures in millions of Colombian pesos)

			September 30,		December 31, 2018
	Notes		2019 (1)
Assets
Cash and cash equivalents		Ps.	27,332,720	Ps.	28,401,283
Trading assets			9,298,381		7,204,312
Investment securities			24,550,557		23,030,159
Hedging derivatives assets	4		27,792		30,138
Loans, net	4		174,429,722		168,685,654
Other accounts receivable, net			10,827,409		9,300,643
Non-current assets held for sale			98,588		186,714
Investments in associates and joint
ventures			990,266		982,743
Tangible assets	6		9,010,334		6,588,483
Goodwill	7		7,676,349		7,318,594
Concessions	8		6,985,611		5,514,481
Other Intangibles			1,118,430		1,033,884
Income tax assets			1,112,855		935,175
Other assets			388,325		462,890
Total assets		Ps.	273,847,339	Ps.	259,675,153
Liabilities and equity
Liabilities
Trading liabilities	4	Ps.	832,247	Ps.	811,305
Hedging derivatives liabilities	4		115,310		195,539
Customer deposits	4		174,047,965		164,359,451
Financial obligations	4		53,486,929		51,211,990
Provisions	11		736,403		695,288
Income tax liabilities			2,918,062		2,574,398
Employee benefits	10		1,356,397		1,264,881
Other liabilities	12		7,991,186		9,007,953
Total liabilities		Ps.	241,484,499	Ps.	230,120,805
Equity
Owners of the parent:
Subscribed and paid-in capital		Ps.	22,281	Ps.	22,281
Additional paid-in capital			8,445,766		8,472,336
Retained earnings			9,582,993		8,598,319
Other comprehensive income			1,263,292		696,773
Equity attributable to owners of the
parent			19,314,332		17,789,709
Non-controlling interest			13,048,508		11,764,639
Total equity			32,362,840		29,554,348
Total liabilities and equity		Ps.	273,847,339	Ps.	259,675,153

The accompanying notes are an integral part of the consolidated financial statements.

1. The Group has adopted IFRS 16 from January 1, 2019 (see Note 2.)

Luis Carlos Sarmiento Gutiérrez	María Edith González Flórez	Diana Alexandra Rozo Muñoz
President	Accountant	Auditor
Principal executive officer	T.P. 13083-T	T.P. 120741-T
		Member of KPMG S.A.S.
		(See my report of November 13, 2019)

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Condensed Consolidated Statement of Income

(Figures in millions of Colombian pesos)

				For the three-months period ended		For the nine-months periods ended
				September 30,		September 30
	Notes	2019 (1)		2018		2019 (1)		2018
Interest income		Ps.	4,942,101	Ps.	4,687,117	Ps.	14,497,059	Ps.	13,665,021
Interest expense				(2,112,794)		(1,847,276)		(6,106,931)		(5,550,183)
Net interest income				2,829,307		2,839,841		8,390,128		8,114,838
Net impairment loss on financial
assets				(1,088,764)		(1,027,721)		(2,833,024)		(2,514,708)
Net interest income, after
impairment losses				1,740,543		1,812,120		5,557,104		5,600,130
Income from commissions and fees				1,519,191		1,336,060		4,425,026		3,993,706
Expenses from commissions and
fees				(163,999)		(142,296)		(463,640)		(450,692)
Net income from commissions	15
and fees			1,355,192		1,193,764		3,961,386		3,543,014
Income from sales of goods and
services				2,380,956		2,465,157		6,382,321		5,296,972
Costs and expenses of sales goods
and services				(1,719,463)		(1,492,853)		(4,546,539)		(3,859,830)
Net income from sales goods and	15
services			661,493		972,304		1,835,782		1,437,142
Net trading income	16			481,317		109,466		798,067		263,788
Net income from other financial
instruments mandatory at fair value
through profit or loss				55,242		50,167		162,374		177,212
Other income	17			104,778		297,550		756,760		857,871
Other expenses	17			(2,626,035)		(2,231,387)		(7,321,646)		(6,659,740)
Net income before tax expense				1,772,530		2,203,984		5,749,827		5,219,417
Income tax expense				(446,518)		(750,826)		(1,667,492)		(1,675,658)
Net income		Ps.	1,326,012	Ps.	1,453,158		4,082,335	Ps.	3,543,759
Net income attributable to:
Owners of the parent				743,207		782,712		2,319,268		2,061,973
Non-controlling interest				582,805		670,446		1,763,067		1,481,786
		Ps.	1,326,012	Ps.	1,453,158		4,082,335	Ps.	3,543,759
Net income per share basic and
diluted (in Colombian pesos)				33.36		35.13		104.09		92.54

The accompanying notes are an integral part of the consolidated financial statements.

1. The Group has adopted IFRS 16 from January 1, 2019 (see Note 2.)

Luis Carlos Sarmiento Gutiérrez	María Edith González Flórez	Diana Alexandra Rozo Muñoz
President	Accountant	Auditor
Principal executive officer	T.P. 13083-T	T.P. 120741-T
		Member of KPMG S.A.S.
		(See my report of November 13, 2019)

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Condensed Consolidated Statement of Other Comprehensive Income

(Figures in millions of Colombian pesos)

			For the three-months period				For the nine-months periods
			ended September 30,				ended September 30
	Notes		2019		2018				2019		2018
Net income		Ps.	1,326,012	Ps.	1,453,158		Ps.	4,082,335	Ps.	3,543,759
Other comprehensive income
Items that may be reclassified to profit or loss
Net gain (loss) on hedges of net investments in
foreign operations
Foreign currency translation differences from	5
hedged foreign operations		1,221,753		169,499			1,049,040		(24,088)
Hedging derivative instrument	5		(633,985)		(79,935)			(544,646)		(1,746)
Hedging non-derivative instrument	5		(587,404)		(89,775)			(504,148)		26,174
Cash flow hedges			(4,153)		3,157			3,292		118
Foreign currency translation differences from
unhedged foreign operations			(801)		(120,397)			111,231		(178,782)
Investments in associates and joint ventures			18,724		3,402			11,926		(4,223)
Unrealized gains (losses) on securities at FVOCI			29,596		16,435			419,251		(146,578)
Income tax			350,760		53,315			233,918		17,241
Total, items that may be reclassified to profit or
loss		Ps.	394,490	Ps.	(44,299)		Ps.	779,864	Ps.	(311,884)
Items that will not be reclassified to profit or
loss
Revaluationinvestment properties			-		-			4,956		-
Unrealized gains (losses) on equity securities at
FVOCI			36,352		(16,551)			222,069		(29,202)
Actuarial gains (losses) from defined benefit
pension plans			258		(301)			(30,940)		17,546
Income tax			367		(2,391)			(3)		(9,844)
Total, items that will not be reclassified to profit
or loss		Ps.	36,977	Ps.	(19,243)		Ps.		196,082	Ps.	(21,500)
Total other comprehensive income			431,467		(63,542)				975,946		(333,384)
Total comprehensive income, net of taxes		Ps.	1,757,479	Ps.	1,389,616		Ps.	5,058,281	Ps.	3,210,375
Total comprehensive income for the periods
attributable to:
Owners of the Group			990,890		701,758			2,885,787		1,829,814
Non-controlling interest			766,589		687,858				2,172,494		1,380,561
		Ps.	1,757,479	Ps.	1,389,616		Ps.	5,058,281	Ps.	3,210,375

The accompanying notes are an integral part of the consolidated financial statements.

Luis Carlos Sarmiento Gutiérrez	María Edith González Flórez	Diana Alexandra Rozo Muñoz
President	Accountant	Auditor
Principal executive officer	T.P. 13083-T	T.P. 120741-T
		Member of KPMG S.A.S.
		(See my report of November 13, 2019)

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Consolidated Statement of Changes in Equity for the nine-month periods ended at September 30, 2019 and 2018

(Figures in millions of Colombian pesos)

			Subscribed															Equity			Non-
			and paid-			Additional			Appropriated			Other			attributable to			controlling			Total equity
			in			paid - in			retained			comprehensive			owners of the			interest
			capital			capital			earnings			income (OCI)			parent			(NCI)
Balance at December 31, 2017	Ps.	22,281	Ps.	8,412,685		Ps.	7,573,912	Ps.	223,543		Ps.	16,232,421		Ps.	9,745,829	Ps.	25,978,250
Change in accounting policies			-			(109,254)				(776,651)				609,270				(276,635)			(185,282)		(461,917)
Balance at January 1, 2018			22,281			8,303,431				6,797,261			832,813				15,955,786			9,560,547		25,516,333
Issuance of shares			-			-			-			-			-		988,118		988,118
Equity transactions			-			179,106				-			(41,447)				137,659			(137,659)			-
Dividends declared			-			-			(1,069,490)				-			(1,069,490)			(739,125)		(1,808,615)
Other comprehensive income			-			-			-			(190,712)				(190,712)			(142,672)		(333,384)
Net income			-			-			2,061,973			-			2,061,973			1,481,786		3,543,759
Balance at September 30, 2018	Ps.	22,281	Ps.	8,482,537		Ps.	7,789,744	Ps.	600,654		Ps.	16,895,216		Ps.	11,010,995	Ps.	27,906,211
			Subscribed			Additional			Appropriated			Other			Equity			Non-
			and paid-									attributable to			controlling
					paid - in			retained			comprehensive							Total equity
			in									owners of the			interest
					capital			earnings			income (OCI)
			capital										parent				(NCI)
Balance at December 31, 2018	Ps.		22,281		Ps.		8,472,336		Ps.		8,598,319		Ps.		696,773		Ps.		17,789,709		Ps.		11,764,639	Ps.		29,554,348
Change in accounting policies (1)			-				-				(5,101)				-				(5,101)				(21,881)			(26,982)
Balance at January 1, 2019			22,281				8,472,336				8,593,218				696,773				17,784,608				11,742,758			29,527,366
Equity transactions			-			(26,570)				-			-			(26,570)			(40,527)		(67,097)
Dividends declared			-			-			(1,336,861)				-			(1,336,861)			(829,044)		(2,165,905)
Effect of realization of equity instruments			-			-			7,368				-			7,368			2,827		10,195
Other comprehensive income			-			-			-			566,519				566,519			409,427		975,946
Net income			-				-				2,319,268				-				2,319,268				1,763,067			4,082,335
Balance at September 30, 2019	Ps.		22,281		Ps.		8,445,766		Ps.		9,582,993		Ps.	1,263,292		Ps.		19,314,332		Ps.	13,048,508	Ps.		32,362,840

The accompanying notes are an integral part of the consolidated financial statements.

1. The Group has adopted IFRS 16 from January 1, 2019 (see Note 2.)

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Condensed Consolidated Statement of Cash Flows for the nine-month periods ended September 30, 2019 and 2018

(Figures in millions of Colombian pesos)

	Notes	September 30,		September 30,
	2019 (1)		2018
Cash flows from operating activities:
Net income before income tax	Ps.	5,749,827	Ps.	5,219,417
Reconciliation of net income before taxes and net cash provided by operating activities:
Depreciation and amortization	15-17	975,596		694,324
Impairment losses of loans and receivables, net	4-15	3,190,506		2,808,693
(Gains) in concession agreements		(2,942,769)		(1,141,028)
Net interest income		(8,390,128)		(8,114,838)
(Gains) on sales of non-current assets held for sale, net	17	(14,612)		(11,681)
(Gain) losses on sales of property, plant and equipment		(21,285)		(28,464)
Foreign exchange losses		567,905		(107,630)
Share of profit of equity accounted investees, net of tax		(174,445)		(142,361)
Other adjustments for reconciliation of net income		(386,216)		(89,497)
Fair value adjustments on:
Derivative financial instruments		(503,936)		(70,234)
Non-current assets held for sale		5,453		14
Investment property		(2,390)		(10,935)
Biological assets		(13,542)		(13,907)
Changes in operating assets and liabilities:
Trading assets		(984,235)		1,548,070
Accounts receivable		98,564		(60,649)
Non-current assets held for sale		15,740		10,799
Other assets		(7,598)		(30,505)
Other liabilities, provisions and employee benefits		(2,286,406)		1,065,394
Loan portfolio		(3,886,400)		(2,307,950)
Customer deposits		4,482,448		(3,532,999)
Interbank borrowings and overnight funds		(1,204,475)		3,630,589
Borrowings from development entities		2,049		(1,246)
Borrowings from banks		(515,075)		(443,027)
Interest received		13,786,097		13,567,412
Interest paid		(6,128,970)		(3,271,264)
Lease interest		(151,610)		-
Income tax payments		(1,424,998)		(1,174,293)
Net cash (used) provided by operating activities	Ps.	(164,905)	Ps.	7,992,204
Cash flows from investing activities:
Purchases of amortized cost financial assets	Ps.	(3,058,597)	Ps.	(2,473,775)
Redemptions of amortized cost financial assets		3,025,763		2,422,251
Purchases of FVOCI		(20,277,000)		(14,472,687)
Proceeds from sales of FVOCI		20,195,459		11,173,836
Purchases tangible assets		(427,828)		(394,427)
Proceeds from sales of property, plant and equipment		94,275		157,353
Proceeds from sales of non-current assets held for sale		110,392		44,468
Additions of concession arrangement rights		(452,166)		(1,538,719)
Additions of other intangible assets		(218,957)		(257,504)
Proceeds from sales of concession		155		125
Dividends received		246,763		158,607
Effect of loss of control of subsidiaries		-		(3,610)
Net cash (used in) provided by investing activities	Ps.	(761,741)	Ps.	(5,184,082)
Cash flows from financing activities:
Dividends paid to shareholders	Ps.	(933,574)	Ps.	(859,528)
Dividends paid to non-controlling interest		(602,709)		(546,507)
Issuance of debt securities		1,526,106		939,682
Payment of outstanding debt securities		(1,127,989)		(1,006,980)
Leases		(274,156)		-
Cash capitalization		-		988,118
Equity transactions		(67,097)		-
Net cash used in financing activities	Ps.	(1,479,419)	Ps.	(485,215)
Effect of foreign currency changes on cash and equivalents		1,337,501		(262,927)
Increase (decrease) in cash and cash equivalents		(1,068,563)		2,059,980
Cash and cash equivalents at beginning of period	Ps.	28,401,283	Ps.	22,336,838
Cash and cash equivalents at end of period	Ps.	27,332,720	Ps.	24,396,818

The accompanying notes are an integral part of the consolidated financial statements.

1. The Group has adopted IFRS 16 from January 1, 2019 (see Note 2)

Luis Carlos Sarmiento Gutiérrez	María Edith González Flórez	Diana Alexandra Rozo Muñoz
President	Accountant	Auditor
Principal executive officer	T.P. 13083-T	T.P. 120741-T
		Member of KPMG S.A.S.
		(See my report of November 13, 2019)

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

NOTE 1 - REPORTING ENTITY

Grupo Aval Acciones y Valores S.A. (hereinafter the "The Group" or "Grupo Aval") was established under Colombian law in January 7, 1994, with its main offices and business address registered in Bogotá, D.C., Colombia. The corporate purpose of Grupo Aval is the purchase and sale of securities issued by financial and comercial entities. Grupo Aval is the majority shareholder of Banco de Bogotá S.A., Banco de Occidente S.A., Banco Popular S.A. and Banco Comercial AV Villas S.A., entities whose main purpose is to perform all transactions, operations and services inherent to the banking business, pursuant to applicable laws and regulations. Furthermore, through its direct and indirect investments in Corporación Financiera Colombiana S.A. ("Corficolombiana") and in Sociedad Administradora de Fondos de Pensiones y Cesantías Porvenir S.A. ("Porvenir"), Grupo Aval engages in investment banking activities, invests in the non-financial sector and manages pensions and severance funds in Colombia.

NOTE 2 - BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS AND

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The interim condensed consolidated financial information has been prepared in accordance with International accounting standard IAS 34 Interim Financial Reporting, which is contained in the accounting and financial information standards accepted in Colombia (NCIF) established in law 1314 of 2009, regulated by the sole regulatory Decree 2420 of 2015, modified by Decrees 2496 of 2015, 2131 of 2016, 2170 of 2017 and 2483 of 2018.

These interim condensed consolidated financial statements do not include all the information required for a complete set of IFRS financial statements and should be read in conjunction with the Group's last annual consolidated financial statements as of and for the year ended December 31, 2018. All information is presented in millions of pesos and has been rounded to the nearest unit.

Grupo Aval does not present seasonal or cyclical effects on its disclosed revenue; however selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements.

Changes in significant accounting policies

Except for the changes described below, the accounting policies applied in these interim condensed consolidated financial statements are the same as those applied by Grupo Aval in the financial statements for the year ended December 31, 2018.

2 Changes in significant accounting policies

Except for the changes described below, the accounting policies applied in these interim financial statements are the same as those applied by Grupo Aval in the financial statements for the year ended December 31, 2018.

IFRS 16

Changes in accounting policies

Grupo Aval has adopted IFRS 16 using the cumulative effect method, with the effect of initial adoption recognized on January 1, 2019 but has not restated comparatives for the 2018 reporting period, according with the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognized in the opening Condensed Consolidated Statement of Financial Position on January 1, 2019.

IFRS 16 introduced a new and only accounting model for lessees, as a result, Grupo Aval, as a lessee, has recognized right-of-use assets representing its rights to use the underlying assets and lease liabilities representing its obligation to make lease payments. Lessor accounting remains equal to previous accounting policies.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

7

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

• fixed payments (includingin-substance fixed payments), less any lease incentives receivable,
• variable lease payments that are based on an index or a rate,
• amounts expected to be payable by the lessee under residual value guarantees,
• the exercise price of a purchase option if the lessee is reasonably certain it will exercise that option, and
• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or the group's incremental borrowing rate.

Right-of-use assets are measured at cost comprising the following:

• the amount of the initial measurement of lease liability,
• any lease payments made at or before the commencement date less any lease incentives received,
• any initial direct costs, and
• restoration costs.

Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as a rent expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT-equipment and small items of office furniture.

Extension and termination options are included in a number of property and equipment leases across Grupo Aval. These terms are used to maximize operational flexibility in terms of managing contracts.

Adjustments recognized on adoption of IFRS 16

Upon adoption of IFRS 16, Grupo Aval recognized lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of January 1, 2019.

Some right-of-use assets related with property leases were measured on a retrospective basis as if the new rules had always been applied. Other right-of use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the balance sheet as of December 31, 2018. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of initial application.

			1 January 1, 2019
Right of use assets	Ps.	2,217,380
Deferred tax liabilities			(636,017)
Total			1,581,363
Retained earnings	Ps.	40,272
Retained earnings // deferred tax for-right-of-use			(13,290)
Total	Ps.	26,982
Net, effect	Ps.	1,608,345
			January 1, 2019
Financial liabilities for right-of-use	Ps.	(2,225,545)
Provisions for dismantling for right-of-use			(32,107)
Deferred tax assets			649,307
Net, effect	Ps.	(1,608,345)

In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:

• the use of a single discount rate to a portfolio of leases with reasonably similar characteristics.

8

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

• the accounting for operating leases with a remaining lease term of less than 12 months as at 1 January 2019 asshort-term leases,
• the exclusion of initial direct costs for the measurement of theright-of-use asset at the date of initial application, and
• the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

Grupo Aval has also elected not to reassess whether a contract is or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date Group Aval relied on its assessment made applying IAS 17 and IFRIC 4 for determining whether an arrangement contains a lease.

NOTE 3 - USE OF JUDGEMENTS AND ESTIMATES

In preparing these interim condensed consolidated financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense.

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation were the same as those described in the last annual financial statements ended on December 31, 2018, except for the new significant judgements related to lessee accounting under IFRS 16, which are described in Note 2 (A).

Lease terms

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.

Measurement of fair values

The output of a model is always an estimate or approximation of a value that cannot be determined with certainty, and the valuation techniques used may not fully reflect all the factors relevant to the positions of Grupo Aval. Therefore the appraisals are adjusted, if necessary, to allow for additional factors, including country risk, liquidity risks and counterparty risks.

The fair value hierarchy has the following levels:

• Level 1 inputs are quoted prices (unadjusted) in active markets for assets or liabilities identical to those which the entity can access as of the date of measurement.
• Level 2 inputs are inputs different than quoted prices included in Level 1 that are observable for the asset or liability, whether directly or indirectly innon-active markets.
• Level 3 inputs are unobservable inputs for the asset or liability.

The level in the fair value hierarchy within which fair value measurement is classified in whole is determined based on the input of the lowest level that is most significant for measuring its total fair value. For such purpose, the relevance of an input is assessed in connection with to measurement of the total fair value. Financial instruments that are listed in markets that are not deemed active, but which are valued based in accordance with quoted market prices, quotes from price vendors or alternative price sources supported by observable inputs, are classified in Level 2.

If a fair value measurement uses observable inputs that require significant adjustments based on unobservable inputs, this measurement is classified as Level 3. The assessment of the importance of a particular input to the measurement of fair value in whole requires judgment, taking into account specific factors of the asset or liability.

Determining what is deemed as 'observable' requires a significant judgment by Grupo Aval. Grupo Aval considers as observable data the market data which is already available, distributed or updated by the price suppliers, and it is reliable and verifiable, with no property rights, and provided by independent sources which are actively involved in the reference market.

9

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

NOTE 4 - FINANCIAL INSTRUMENTS

a) Carrying value and fair value

The following table presents an analysis, within the hierarchy of fair value, of Grupo Aval´s assets and liabilities (by class), measured at fair value on a recurring basis. For financial instruments that are not measured at fair value if the carrying amount is a reasonable approximation of fair value, fair value information is not included:

September 30, 2019
						Fair Value
		Carrying
		Value		Level 1		Level 2			Level 3		Total
ASSETS
Trading investment
Securities issued or secured by Colombian Government	Ps.	3,308,959	Ps.	2,820,333	Ps.	488,626	Ps.	-	Ps.	3,308,959
Securities issued or secured by other entities of the		121,342		-		121,342			-		121,342
Colombian Government
Securities issued or secured by foreign Government		124,480		3,471		121,009			-		124,480
Securities issued or secured by central banks		14,927		-		14,927			-		14,927
Securities issued or secured by other financial entities		1,748,298		-		1,748,298			-		1,748,298
Securities issued or secured by entities of the Non-financial		25,918		-		25,918			-		25,918
sector
Other		7,798		-		7,798			-		7,798
Total trading investment	Ps.	5,351,722	Ps.	2,823,804	Ps.	2,527,918	Ps.	-	Ps.	5,351,722
Investments in debt securities at fair value through profit or
loss
Other		35,774		-		26,180			9,594		35,774
Total investments in debt securities at fair value through	Ps.	5,387,496	Ps.	2,823,804	Ps.	2,554,098	Ps.	9,594	Ps.	5,387,496
profit or loss
Investments at fair value through OCI
Securities issued or secured by Colombian Government		9,848,080		7,501,012		2,347,068			-		9,848,080
Securities issued or secured by other entities of the		394,635		201,640		192,995			-		394,635
Colombian Government
Securities issued or secured by foreign Government		4,902,629		10,642		4,891,987			-		4,902,629
Securities issued or secured by central banks		957,833		-		957,833			-		957,833
Securities issued or secured by other financial entities		3,504,377		529,596		2,974,781			-		3,504,377
Securities issued or secured by entities of the non-financial		113,302		-		113,302			-		113,302
sector
Other		429,478		-		429,478			-		429,478
Total investments at fair value through OCI	Ps.	20,150,334	Ps.	8,242,890	Ps.	11,907,444	Ps.		-	Ps.	20,150,334
Total investments in debt securities	Ps.	25,537,830	Ps.	11,066,694	Ps.	14,461,542	Ps.		9,594	Ps.	25,537,830

10

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

						Fair Value
		Carrying
		Value		Level 1		Level 2			Level 3		Total
Investments in equity securities
Trading equity securities		3,291,247		1,902		2,797,868			491,477		3,291,247
Investments in equity through OCI		1,313,305		1,160,298		51,272			101,735		1,313,305
Total investments in equity securities	Ps.	4,604,552	Ps.	1,162,200	Ps.	2,849,140	Ps.	593,212	Ps.	4,604,552
Held for trading Derivatives
Currency Forward		432,457		-		432,457			-		432,457
Bond Forward		1,643		-		1,643			-		1,643
Interest Rate Swap		90,298		-		90,298			-		90,298
Currency Swap		55,597		-		55,597			-		55,597
Currency Options		75,417		-		75,417			-		75,417
Total held for trading derivatives	Ps.	655,412	Ps.	-	Ps.	655,412	Ps.	-	Ps.	655,412
Hedging Derivatives
Currency Forward		27,792		-		27,792			-		27,792
Total hedging derivatives	Ps.	27,792	Ps.	-	Ps.	27,792	Ps.	-	Ps.	27,792
Other account receivables
Financial assets in concession contracts		2,650,788		-		-			2,650,788		2,650,788
Total other account receivables designated at fair value	Ps.	2,650,788	Ps.	-	Ps.	-	Ps.		2,650,788	Ps.	2,650,788
Total assets at fair value on recurring basis	Ps.	33,476,374	Ps.	12,228,894	Ps.	17,993,886	Ps.	3,253,594	Ps.	33,476,374
Financial assets at amortized cost, net
Investments in debt securities, net		3,051,144		24,456		3,020,089			-		3,044,545
Securities issued or secured by other entities of the		3,023,671		-		3,017,040			-		3,017,040
Colombian Government
Securities issued or secured by Foreign Government		24,429		24,456		-			-		24,456
Securities issued or secured by other financial entities		3,044		-		3,049			-		3,049
Loan portfolio, net (see literal f for details)		174,429,722									183,595,784
Commercial		98,330,444
Consumer		55,701,871
Mortgage		20,073,078
Microcredit		324,329
Other accounts receivables, net		8,176,621
Total financial assets at amortized cost, net		185,657,487
LIABILITIES
Trading Derivatives
Currency forward		617,779		-		617,779			-		617,779

11

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

						Fair Value
		Carrying
		Value		Level 1		Level 2			Level 3			Total
Bond forward		1,025		-		1,025			-			1,025
Bond futures		53		53		-			-			53
Interest rate swap		83,833		-		83,833			-			83,833
Currency swap		85,060		-		85,060			-			85,060
Currency options		44,497		-		44,497			-			44,497
Total trading derivatives	Ps.	832,247	Ps.	53	Ps.	832,194	Ps.	-	Ps.	832,247
Hedging derivatives
Currency forward	Ps.	111,080	Ps.	-	Ps.	111,080	Ps.	-	Ps.	111,080
Interest rate swap		4,230		-		4,230			-			4,230
Total hedging derivatives		115,310		-		115,310			-			115,310
Total liabilities at fair value on recurring basis	Ps.	947,557	Ps.	53	Ps.	947,504	Ps.	-	Ps.	947,557
Financial liabilities at amortized cost
Customer deposits	Ps.	174,047,965								Ps.	225,511,462
Checking accounts		39,697,097										48,592,450
Time deposits		76,164,222										96,076,204
Savings accounts		57,774,602										80,396,791
Others deposits		412,044										446,017
Financial obligations		53,486,929										56,043,685
Interbank borrowings and overnight funds		5,721,776										5,721,776
Leases contracts		3,136,755										3,055,689
Borrowings from banks and similar		19,496,506										20,705,836
Bonds issued (see literal e for details)		21,457,105										22,858,879
Borrowings from development entities		3,674,787										3,701,505
Total financial liabilities at amortized cost	Ps.	227,534,894								Ps.		281,555,147

12

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

December 31, 2018

						Fair Value
		Carrying
		Value		Level 1		Level 2			Level 3		Total
ASSETS
Trading investment
Securities issued or secured by Colombian Government	Ps.	2,270,642	Ps.	2,109,574	Ps.	161,068	Ps.	-	Ps.	2,270,642
Securities issued or secured by other entities of the Colombian		128,545		19,606		108,939			-		128,545
Government
Securities issued or secured by foreign Government		98,155		-		98,155			-		98,155
Securities issued or secured by central banks		12,914		-		12,914			-		12,914
Securities issued or secured by other financial entities		1,218,751		-		1,218,751			-		1,218,751
Securities issued or secured by entities of the non-financial		29,122		-		29,122			-		29,122
sector
Other		4,849		-		4,849			-		4,849
Total trading investment	Ps.	3,762,978	Ps.	2,129,180	Ps.	1,633,798	Ps.	-	Ps.	3,762,978
Investments in debt securities at fair value through profit or
loss
Other		31,256		-		17,523			13,733		31,256
Total investments in debt securities at fair value through	Ps.	3,794,234	Ps.	2,129,180	Ps.	1,651,321	Ps.	13,733	Ps.	3,794,234
profit or loss
Investments at fair value through OCI
Securities issued or secured by Colombian Government		10,525,774		8,208,778		2,316,996			-		10,525,774
Securities issued or secured by other entities of the Colombian		497,635		232,312		265,323			-		497,635
Government
Securities issued or secured by foreign Government		3,015,556		91,315		2,924,241			-		3,015,556
Securities issued or secured by central banks		1,131,740		-		1,131,740			-		1,131,740
Securities issued or secured by other financial entities		3,308,480		279,653		3,028,827			-		3,308,480
Securities issued or secured by entities of the non-financial sector		209,940		-		209,940			-		209,940
Other		246,632		-		246,632			-		246,632
Total investments at fair value through OCI	Ps.	18,935,757	Ps.	8,812,058	Ps.	10,123,699	Ps.		-	Ps.	18,935,757
Total investments in debt securities	Ps.	22,729,991	Ps.	10,941,238	Ps.	11,775,020	Ps.	13,733	Ps.	22,729,991
Investments in equity securities
Trading equity securities		2,672,648		3,060		2,212,915			456,673		2,672,648
Investments in equity through OCI		1,090,601		935,737		51,224			103,640		1,090,601
Total investments in equity securities	Ps.	3,763,249	Ps.	938,797	Ps.	2,264,139	Ps.	560,313	Ps.	3,763,249
Held for trading derivatives
Currency forward		617,799		-		616,116			1,683		617,799
Bond forward		71		-		71			-		71
Interest rate swap		43,181		-		43,181			-		43,181

13

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

						Fair Value
		Carrying
		Value		Level 1		Level 2			Level 3		Total
Currency swap		48,546		-		48,546			-		48,546
Currency options		59,089		-		59,089			-		59,089
Total held for trading derivatives	Ps.	768,686	Ps.	-	Ps.	767,003	Ps.	1,683	Ps.	768,686
Hedging derivatives
Currency forward		30,138		-		30,138			-		30,138
Total hedging derivatives	Ps.	30,138	Ps.	-	Ps.	30,138	Ps.	-	Ps.	30,138
Other account receivables
Financial assets in concession contracts		2,488,414		-		-			2,488,414		2,488,414
Total other account receivables designated at fair value	Ps.	2,488,414	Ps.	-	Ps.	-	Ps.		2,488,414	Ps.	2,488,414
Total assets at fair value on recurring basis	Ps.	29,780,478	Ps.	11,880,035	Ps.	14,836,300	Ps.	3,064,143	Ps.	29,780,478
Financial assets at amortized cost, net
Investments in debt securities, net		2,972,545		32,324		2,952,649			-		2,984,973
Securities issued or secured by other entities of the Colombian		2,931,111		-		2,943,498			-		2,943,498
Government
Securities issued or secured by Foreign Governments		32,320		32,324		-			-		32,324
Securities issued or secured by other financial entities		9,114		-		9,151			-		9,151
Loan portfolio, net (see literal f for details)		168,685,654									176,228,181
Commercial		98,051,116
Consumer		52,006,179
Mortgage		18,290,839
Microcredit		337,520
Other accounts receivables, net		6,812,229
Total financial assets at amortized cost, net		178,470,428
LIABILITIES
Trading derivatives
Currency forward		589,021		-		583,242			5,779		589,021
Bond forward		2,730		-		2,730			-		2,730
Bond futures		32		32		-			-		32
Interest rate swap		32,380		-		32,380			-		32,380
Currency swap		148,378		-		148,378			-		148,378
Currency options		38,764		-		38,764			-		38,764
Total trading derivatives	Ps.	811,305	Ps.	32	Ps.	805,494	Ps.	5,779	Ps.	811,305
Hedging derivatives
Currency forward		195,539		-		195,539			-		195,539
Total hedging derivatives		195,539		-		195,539			-		195,539
Total liabilities at fair value on recurring basis	Ps.	1,006,844	Ps.	32	Ps.	1,001,033	Ps.	5,779	Ps.	1,006,844
Financial liabilities at amortized cost
Customer deposits	Ps.	164,359,451								Ps.	164,682,492
Checking accounts		39,702,878									39,702,878

14

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

						Fair Value
		Carrying
		Value	Level 1		Level 2	Level 3	Total
Time deposits		66,853,012									67,176,010
Savings accounts		57,221,439									57,221,482
Others deposits		582,122									582,122
Financial obligations		51,211,990									51,811,768
Interbank borrowings and overnight funds		6,814,078									6,814,083
Borrowings from banks and similar		20,610,766									21,020,334
Bonds issued (see literal e for details)		20,140,350									20,152,729
Borrowings from development entities		3,646,796									3,824,622
Total financial liabilities at amortized cost	Ps.	215,571,441								Ps.	216,494,260

b) Fair Value determination

The following table provides information about valuation techniques and significant inputs when measuring at fair value on recurring basis assets and liabilities, with fair value hierarchy level 2 and level 3.

Level 2 financial instruments as those traded in non-active market, the following table provides information about valuation techniques and significant inputs when measuring assets and liabilities.

	Valuation technique
	for level 2 and 3	Significant inputs (1)
ASSETS
Investments in debt securities at fair value
In Colombian Pesos
Securities issued or secured by the Colombian Government	Discounted cash flow	Estimated Prices (2)
Securities issued or secured by Colombian government entities	Discounted cash flow	Estimated Prices (2)
Securities issued or secured by other financial entities	Discounted cash flow	Estimated Prices (2)
		Yield and Margin
Securities issued or secured by non-financial sector entities	Discounted cash flow	Estimated Prices (2)
Other	Discounted cash flow	Estimated Prices (2)
		Yield and Margin
		Projected cash flow
In Foreign Currency
Securities issued or secured by the Colombian Government	Market Price	Quoted Prices
Securities issued or secured by Colombian government entities	Discounted cash flow	Estimated Prices (2)
Securities issued or secured by foreign governments	- Internal Model	- Discounted cash flows using yields from similar securities outstanding
	- Market Price	- Market Price or price calculated based on benchmarks set by price providers
		methodologies
		- Bloomberg Generic / Bloomberg Valuation

15

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

		Valuation technique
		for level 2 and 3	Significant inputs (1)
Securities issued or secured by Central Banks	- Internal Model	- Discounted cash flows using yields from similar securities outstanding
		- Market Price	- Market Price or price calculated based on benchmarks set by price providers
			methodologies
Securities issued or secured by other financial entities	- Discounted cash flow	- Estimated Prices (2)
		- Internal Model	- Quoted Price or price calculated based on benchmarks set by price providers
			methodologies
		- Market Price	- Bloomberg Generic / Bloomberg Valuation
Securities issued or secured by non-financial sector entities	- Market Price	- Average Price - Quoted Price
			- Bloomberg Generic
Other	- Discounted cash flow	- Estimated Prices (2)
		- Internal Model	- Theoretical Price Mutual Funds which by the end of the month capitalize or pay
			interests
		- Market Price	- Quoted Price
Investment in equity securities
Corporate stock	Market Price	Estimated Prices (2)
Investment funds	Market Price	Market value of underlying assets, less management and administrative fees
Pension and severance funds	Market Price	Market value of underlying assets, less management and administrative fees (3)
Trading derivatives
Foreign currency forward	Discounted cash flow	- Underlying asset price
Debt securities forward		- Currency curve by underlying asset
Interest rate swap		- Forward Exchange rates curve of the operation's currency
Cross currency swap		- Implicit curves of Exchange rates forwards
Swap (others)		- Swap curves by underlying asset
Currency options		- Implicit volatilities matrixes and curves
Currency futures	Initial price	- Quoted Price
Hedging derivatives
Currency forward	Discounted cash flow	Curves by currency
LIABILITIES
Derivatives held for trading
Foreign currency forward		- Underlying asset price
Debt securities forward		- Currency curve by underlying asset
Interest rate swap	Discounted cash flow	- Forward Exchange rates curve of the operation's currency
Currency swap		- Implicit curves of exchange rates forwards
Swap (others)		- Swap curves by underlying asset
Currency options		- Implicit volatilities matrixes and curves
Hedging Derivatives	Discounted cash flow
Foreign currency forward		- Underlying asset price
Interest rate forward		- Currency curve by underlying asset
Interest rate swap		- Forward Exchange rates curve of the operation's currency
			- Implicit curves of Exchange rates forwards
			- Swap curves by underlying asset
			- Implicit volatilities matrixes and curves

16

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

1. Quoted market prices (ie obtained from price vendors)
2. Estimated Price: A valuation model based on information obtained from a price vendor when it is not able to supply quoted prices (unadjusted) for each security. This model is the basis for the construction of the valuation margin of the securities that is represented on the assigned curve or reference rate. This margin remains constant on the assigned curve or reference rate when calculating the theoretical valuation price.
3. The subsidiary Porvenir S.A. according to Colombian rules is required to invest to 1% of its total assets under management from severance and mandatory pension funds.

The following table provides information about valuation techniques and significant unobservable inputs when measuring Level 3 assets and liabilities at recurring fair value.

Valuation technique for level 2 and 3

ASSETS

Investments in debt securities at fair value In Colombian Pesos

OtherDiscounted cash flow

Discounted cash flow

Investments in equity securities (1)

Comparable Multiples

Net assets value

Other financial assets

Assets under concession contracts (2)

Discounted cash flow

Significant inputs

Projected payments flow of mortgage securitizations

• Growth in values after 5 years
• Net Income
• Growth in residual values after 5 years
• Discount interest rates
• EBITDA Value
• Multiple of EBITDA
• Net income value
• Multiple of net income
• Net assets value (NAV)
• Free-cashflow from concession contracts
• Concession contracts maturity period
• Perpetuity value of the year "n"free-cash flow
• Present value of the discounted residual value at Weighted Average Cost of Capital ("WACC").
• Financial income: annual adjustment of the financial asset's value.

17

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

(1) Valuation of equity instruments Level 3

The investments with fair value hierarchy level 3 have significant unobservable inputs. Level 3 instruments includes equity instruments, which are not quoted on any stock exchange. Like observable prices are not available for these securities, Grupo Aval has used valuation techniques as discounted cash flows to obtain fair value.

The following table includes a sensitivity analysis of changes in these variables in the equity of Grupo Aval, bearing in mind that the variations in fair value of said investments are recorded in equity because they correspond to investments classified as equity instruments at fair value with changes in equity.

The following table includes a sensitivity analysis of main level 3 equity securities of December 31, 2018:

Methods and Variables	Variation		Favorable		Unfavorable
	impact		impact
Comparable Multiples / Recent Transaction Price
EBITDA Number of times	+/-1 x	Ps.	1,819	Ps.	(1,823)
Adjusted Net Asset Value
Most relevant variable in assets	+/-10%		221		(177)
Adjusted discounted cash flow
Growth in residual values	+/-1% of the gradient		204		(134)
	+/-1%		60		(147)
Growth in residual values after 5 years	+/- 30 bp		135		(101)
	+/-1%		743		(741)
Income	+/-1%		710		(674)
+/- 1% annual		352		(529)
Discount interest rates	+/- 50 pb		597		(572)
		Ps.	4,841	Ps.	(4,898)

(2) Valuation of financial assets under concession arrangement rights

Promigas and subsidiaries, designated at fair value the financial assets under concession contracts, the method of discounted cash flows was used to determine the fair value.

The assumptions in the calculation of the financial asset were:

• Financial assets are calculated taking into account the expiration date of each concession contract.
• The calculation was carried out in proportion to the expiration of each of the concession contracts in force.
• Only the operational cash flows of these assets under concession were taken into account.

The components of the calculations are as follows:

1. • Free cash flow generated solely by assets under concession.
   • Expiration period of the concession.
   • Amountin-perpetuity of the Free Cash Flow (FCF) of the year, estimated factoring a growth in the residual amount between 1% and 3% each year.
   • Current amount of the residual amount Weighted Average Cost of Capital (WACC), estimated taking into account an interest rate between 8.64 % and 9.09% each year.
   • Financial Income: Annual adjustment of the amount of the financial asset to WACC (*).
2. Nominal WACC calculated under the Capital Asset Pricing Model (CAPM) methodology for each, updated annually. The following variables were used for determining the WACC:
3. • Beta Unlevered USA (Oil/Gas Distribution): Damodaran. [Beta unlevered 0.61, 2018]
   • Risk Free Rate, Source: Geometric Average1992-2018 of American bonds "T-Bonds".
   • Marker Return, Source: Geometric Average1992-2018 Damodaran "Stocks" USA.
   • Market Premium: Market Return - Risk Free Rate
   • Country Risk Premium: Average last 5 years EMBI (Difference between10-year Colombian sovereign bonds and 10 year "T-Bonds"). Damodaran

18

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

• Emerging Market: Equity Premium Emerging countries (Lambda - Damodaran)

Sensitivity analysis

The following table includes a sensitivity analysis of the assumptions used by Promigas and its subsidiaries in the calculation of fair value of unconditional transfer rights of gas pipelines to Government entities at the expiration date of the contracts. The value of the financial asset at September 30, 2019 is Ps. 2,650,788.

		September 30, 2019
Variable		+100 bps		-100 bps
WACC	Ps. (637,556)		Ps. 979,942
Growth rate	550,652	(387,750)

1. Transfer of levels

During the current year, due not to changes in market conditions, the following table summarizes the transfer between fair value levels 1 and 2 as of September 30, 2019 and December 31, 2018. In general, transfers between Level 1 and Level 2 in the investment portfolios are due, fundamentally, to changes in the liquidity levels of the securities in the markets.

September 30, 2019

		Investments in debt securities at		Investments in debt securities at
		FVTPL			FVOCI
		Transfers between:		Transfers between:
		Level 2 to			Level 1 to		Level 2 to			Level 1 to
		Level 1			Level 2		Level 1			Level 2
Assets
Investments in debt securities
at fair value
Securities issued or secured by
Colombian Government	Ps.	-	Ps.	-	Ps.	107,890	Ps.	-
Securities issued or secured by
other Colombian Government
entities		-			1		-			37,913
Securities issued or secured by
other financial entities		-			-		47,350			127,398
	Ps.	-	Ps.	1	Ps.	155,240	Ps.	165,311
December 31, 2018
		Investments in debt securities at		Investments in debt securities at
		FVTPL			FVOCI
		Transfers between:		Transfers between:
		Level 2 to			Level 1 to		Level 2 to			Level 1 to
		Level 1			Level 2		Level 1			Level 2

Assets

Investments in debt securities at fair value

Securities issued or secured by

Colombian GovernmentPs. Securities issued or secured by

other Colombian Government entities

Securities issued or secured by other financial entities

- Ps.	- Ps.	17,668	Ps.	14,081
-	-	229,202		-
-	-	-		189,013

Ps.	- Ps.	- Ps.	246,870 Ps.	203,094

19

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

There were no transfers of fair values between levels and 2 to or from level 3.

The reconciliation of the balances at the beginning of the period to the closing balances with the fair value measurements classified at Level 3 is shown in the following table.

		Financial				Financial assets
		assets				in
		in debt		Equity		concession
		securities		instruments		arrangements
December 31, 2018	Ps.	13,733	Ps.	560,313	Ps.	2,488,414
Valuation adjustment with an effect on income		(3,526)		16,247		162,374
Valuation adjustments with an effect on OCI		-		(2,151)		-
Additions		-		18,803		-
Sales / redemptions		(613)		-		-
Transfer to level 2		-		-		-
September 30, 2019	Ps.	9,594	Ps.	593,212	Ps.	2,650,788

1. Items Measurements at Fair Value on aNon-Recurring Basis

The following table present Grupo Aval's assets and liabilities, classified within the fair value hierarchy, which are measured on a nonrecurring basis as of September 30, 2019 and December 31, 2018 at fair value less cost of sale:

September 30 de 2019

		Level 1		Level 2		Level 3		Total
Impaired collateralized loans	Ps.	-	Ps.	-	Ps.	522,615	Ps.	522,615
Non- current assets held for sale		-		-		98,588		98,588
	Ps.	-	Ps.	-	Ps.	621,203	Ps.	621,203

December 31, 2018

		Level 1		Level 2		Level 3		Total
Impaired collateralized loans	Ps.	-	Ps.	-	Ps.	896,257	Ps.	896,257
Non- current assets held for sale		-		-		186,714		186,714
	Ps.	-	Ps.	-	Ps.	1,082,971	Ps.	1,082,971

1. Financial obligations from issued bonds

The different entities from Grupo Aval are authorized by the Superintendency of Finance and by the regulatory entities abroad where Grupo Aval operates, for issuing or placing either bonds or general guarantee bonds. The bonds issued by Grupo Aval and subsidiaries are non-guaranteed. Detail of issued bonds net of eliminations as of September 30, 2019 and December 31, 2018, by issue date and maturity date was as follows:

Local Currency

Issuer		Issue Date		September		December		Maturity		Interest Rate
		30, 2019		31, 2018		Date
Banco de Bogotá S.A.	23/02/2010	134,990	134,736	23/02/2020		CPI + 5.45% and
	UVR + 5.45%
		Between						Between		CPI + 1.75% a
Banco de Occidente S.A	22/09/2011	3,393,043	3,143,903	26/10/2019		4.65%, Fixed
	and		and		between 5.83%
	18/09/2019					14/12/2032		to 7.85%
		Between						Between		CPI +2.16% to
Corporación Financiera Colombiana	27/08/2009					29/01/2020
2,901,628	2,853,685		5.99%, Fixed
S.A.		and		and
						7.10%
	27/08/2019					02/03/2043

20

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

Issuer		Issue Date		September		December		Maturity		Interest Rate
		30, 2019		31, 2018		Date
		Between						Between		CPI+ 2.90% to
Banco Popular S.A	26/02/2013		1,753,677		1,616,729	14/02/2020		4.13%; Fixed
	and				and		between 6.17%
	13/02/2019					12/10/2026		to 8.10%
		Between						Between
Grupo Aval Acciones y Valores S.A.	03/12/2009	Ps.	1,108,853	Ps.	1,108,713	03/12/2019		CPI + 2.69% to
	and		and	5.20%
	28/06/2017					28/06/2042
Peso denominated Total			Ps.	9,292,191	Ps.	8,857,766

Foreign Currency

					September		December
Issuer		Issue Date		30, 2019		31, 2018	Maturity Date	Interest Rate
		Between				Between	Between 4.38% to
Banco de Bogotá S.A.		19/02/2013 and	7,556,839		7,042,678	19/02/2023 and
		6.25%
	03/08/2017						03/08/2027
BAC Credomatic
		Between				Between	Between 5.20% to
El Salvador		11/02/2013 and	841,307		753,556	22/10/2019 and
		5.85%
	19/08/2019						19/08/2024
		Between				Between	Between 0.75% to
Honduras		12/05/2017 and	339,644		205,017	12/05/2020 and
		9.50%
	09/09/2019						11/04/2022
		Between				Between	Between 4.25% to
Guatemala		09/07/2018 and	-		14,025	09/07/2019 and
		5.50%
	24/08/2018						26/08/2019
BAC Credomatic Total			Ps.	1,180,951	Ps.	972,598
Banco de Bogotá S.A. Total			Ps.	8,737,790	Ps.	8,015,276
		Between
Grupo Aval Limited		11/02/2013 and	3,427,124		3,267,308	26/09/2022	4.75%
	25/06/2019
Foreign Currency Total			Ps.	12,164,914	Ps.	11,282,584
Total of Bonds			Ps.	21,457,105	Ps.	20,140,350

The amount of issued bonds due over 12 months as of September 30, 2019 is Ps. 19,424,123 and December 31, 2018 is Ps. 18,772,405.

Grupo Aval has not had any defaults of principal or interest or other breaches with respect to its liabilities during the nine- months ended September 30, 2019 and year ended December 31, 2018, and Grupo Aval is complying with the related covenants agreed with investors and debtors.

21

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

1. Credit risk concentration

The following is the balance of financial assets by loan portfolio and their provision for impairment as of September 30,

2019 and December 31, 2018:

				September 30, 2019				December 31, 2018
Portfolio					Allowance		Net balance		Gross		Allowance		Net balance
	Gross balance		for		of credit			for		of credit
segment					balance
				impairment		portfolio			impairment		portfolio
Commercial (1)	Ps.	103,240,208	Ps.	4,909,764	Ps.	98,330,444	Ps.	102,408,977	Ps.	4,357,861	Ps.	98,051,116
Consumer		59,306,025		3,604,154		55,701,871		55,455,064		3,448,885		52,006,179
Mortgage		20,425,343		352,265		20,073,078		18,592,103		301,264		18,290,839
Microcredit		413,491		89,162		324,329		425,697		88,177		337,520
Total	Ps.	183,385,067	Ps.	8,955,345	Ps.	174,429,722	Ps.	176,881,841	Ps.	8,196,187	Ps.	168,685,654

1. Inter-bankand overnight funds decreased Ps. 3,502,132, ending with a balance of Ps. 4,133,056 as of September 30, 2019 and Ps. 7,635,188 as of December 31,2018.

Loans are measured at amortized cost on the statement of financial position and are classified as commercial, consumer, mortgages, and microcredit. Due to the significance of the financial leasing portfolio for Grupo Aval, these amounts are also presented separately in all the tables for disclosure purposes:

September 30, 2019
			Gross balance in			Leasing				Balance
			Statement of
Portfolio segment					presentation				according
		financial
					adjustment				to disclosure
			position
Commercial	Ps.	103,240,208	Ps.	(10,312,963)		Ps.	92,927,245
Consumer			59,306,025			(271,436)			59,034,589
Mortgages			20,425,343			(1,492,701)			18,932,642
Microcredit			413,491			-			413,491
Financial leasing			-			12,077,100			12,077,100
Total portfolio	Ps.	183,385,067	Ps.	-		Ps.	183,385,067
December 31, 2018
			Gross balance in			Leasing				Balance
			Statement of
Portfolio segment					presentation				according
		financial
					adjustment				to disclosure
			position
Commercial	Ps.	102,408,977	Ps.	(9,858,952)		Ps.	92,550,025
Consumer			55,455,064			(254,483)			55,200,581
Mortgages			18,592,103			(1,312,741)			17,279,362
Microcredit			425,697			-			425,697
Financial leasing			-			11,426,176				11,426,176
Total portfolio	Ps.	176,881,841	Ps.	-		Ps.	176,881,841

22

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

(1) Loan portfolio by economic sector

Below is the gross balance of the loan portfolio distribution of Grupo Aval by economic activity as of September 30, 2019 and December 31, 2018:

Sector		September 30,	%		December 31, 2018	%
	2019
Consumer services	Ps.	85,127,384	46%	Ps.	78,976,887	45%
Commercial services		38,741,364	21%		41,160,951	23%
Construction		11,654,208	6%		11,093,895	6%
Food, beverage and tobacco		8,581,775	5%		8,128,767	5%
Transportation and communications		6,494,513	4%		7,117,087	4%
Public services		6,028,786	4%		6,123,390	4%
Chemical production		6,060,165	3%		5,614,918	3%
Other industrial and manufacturing products		5,578,802	3%		4,859,538	3%
Agricultural		4,576,063	3%		4,201,518	2%
Government		4,378,100	2%		3,868,987	2%
Trade and tourism		2,503,775	1%		2,353,139	1%
Mining products and oil		1,268,127	1%		1,094,718	1%
Other		2,392,005		1%		2,288,046		1%
Total of each economic sector	Ps.	183,385,067	100%	Ps.	176,881,841	100%

(2) Portfolio credit by risk level rating

As of September 30, 2019, and December 31, 2018, the following is a summary of the portfolio credit by risk level rating:

				September 30, 2019
		Stage 1		Stage 2		Stage 3		Total
Commercial
"A" Normal risk	Ps.	83,232,887	Ps.	239,359	Ps.	95,642	Ps.	83,567,888
"B" Acceptable risk		345,472		1,904,140		317,408		2,567,020
"C" Appreciable risk		57,053		247,564		2,325,541		2,630,158
"D" Significant risk		196		21,089		2,187,433		2,208,718
"E" Risk of nonrecoverability		603		3,846		1,949,012		1,953,461
Commercial portfolio gross balance	Ps.	83,636,211	Ps.	2,415,998	Ps.	6,875,036	Ps.	92,927,245
Consumer
"A" Normal risk	Ps.	51,223,509	Ps.	1,962,526	Ps.	11,255	Ps.	53,197,290
"B" Acceptable risk		754,144		990,737		13,884		1,758,765
"C" Appreciable risk		113,335		1,293,383		521,836		1,928,554
"D" Significant risk		26,317		220,368		1,154,482		1,401,167
"E" Risk of nonrecoverability		4,809		38,925		705,079		748,813
Consumer portfolio gross balance	Ps.	52,122,114	Ps.	4,505,939	Ps.	2,406,536	Ps.	59,034,589
Mortgage
"A" Normal risk	Ps.	16,911,543	Ps.	475,097	Ps.	158	Ps.	17,386,798
"B" Acceptable risk		104,132		446,010		224		550,366
"C" Appreciable risk		17,127		464,348		33,618		515,093
"D" Significant risk		115		14,649		177,766		192,530
"E" Risk of nonrecoverability		61		168		287,626		287,855
Mortgage portfolio gross balance	Ps.	17,032,978	Ps.	1,400,272	Ps.	499,392	Ps.	18,932,642
Microcredit
"A" Normal risk	Ps.	332,542	Ps.	1,623	Ps.	291	Ps.	334,456
"B" Acceptable risk		223		11,159		-		11,382
"C" Appreciable risk		42		7,793		2		7,837
"D" Significant risk		49		2,421		5,666		8,136
"E" Risk of nonrecoverability		31		1,688		49,961		51,680
Microcredit portfolio gross balance	Ps.	332,887	Ps.	24,684	Ps.	55,920	Ps.	413,491

23

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

								September 30, 2019
				Stage 1			Stage 2				Stage 3				Total
Financial leasing
"A" Normal risk		Ps.	10,413,266		Ps.	108,776		Ps.	17,490		Ps.	10,539,532
"B" Acceptable risk				179,190				244,936			64,503			488,629
"C" Appreciable risk				21,933				56,038			208,970			286,941
"D" Significant risk				113				2,454			522,116			524,683
"E" Risk of nonrecoverability				2				-			237,313			237,315
Financial leasing portfolio gross balance		Ps.	10,614,504		Ps.	412,204		Ps.	1,050,392		Ps.	12,077,100
Gross balance of financial assets per credit
portfolio		Ps.	163,738,694		Ps.	8,759,097		Ps.	10,887,276		Ps.	183,385,067
								December 31, 2018
				Stage 1			Stage 2				Stage 3				Total
Commercial
"A" Normal risk		Ps.	83,532,853	Ps.	195,949		Ps.	183,263		Ps.	83,912,065
"B" Acceptable risk				565,266			1,220,838			491,062			2,277,166
"C" Appreciable risk				88,802			227,429			2,680,090			2,996,321
"D" Significant risk				1,290			36,295			1,548,951			1,586,536
"E" Risk of nonrecoverability				3,008			10,350				1,764,579				1,777,937
Commercial portfolio gross balance		Ps.	84,191,219	Ps.	1,690,861		Ps.	6,667,945		Ps.	92,550,025
Consumer
"A" Normal risk		Ps.	47,782,665	Ps.	1,815,283		Ps.	19,295		Ps.	49,617,243
"B" Acceptable risk				799,326			1,004,173			12,805			1,816,304
"C" Appreciable risk				128,850			1,149,796			458,474			1,737,120
"D" Significant risk				23,896			228,509			1,070,538			1,322,943
"E" Risk of nonrecoverability				6,568			37,819				662,584				706,971
Consumer portfolio gross balance		Ps.	48,741,305	Ps.	4,235,580		Ps.	2,223,696		Ps.	55,200,581
Mortgage
"A" Normal risk		Ps.	15,478,116	Ps.	563,066		Ps.	20,965		Ps.	16,062,147
"B" Acceptable risk				72,557			337,093			3,059			412,709
"C" Appreciable risk				13,547			418,754			35,318			467,619
"D" Significant risk				151			11,632			101,164			112,947
"E" Risk of nonrecoverability				1,686			5,196				217,058				223,940
Mortgage portfolio gross balance		Ps.	15,566,057	Ps.	1,335,741		Ps.	377,564		Ps.	17,279,362
Microcredit
"A" Normal risk		Ps.	344,424	Ps.	2,897		Ps.	194		Ps.	347,515
"B" Acceptable risk				162			10,542				-			10,704
"C" Appreciable risk				71			7,519				-			7,590
"D" Significant risk				35			2,980			5,671			8,686
"E" Risk of nonrecoverability				31			1,436				49,735				51,202
Microcredit portfolio gross balance		Ps.	344,723	Ps.	25,374		Ps.	55,600		Ps.	425,697
Financial leasing
"A" Normal risk		Ps.	9,818,788	Ps.	79,008		Ps.	26,299		Ps.	9,924,095
"B" Acceptable risk				267,541			183,862			61,275			512,678
"C" Appreciable risk				45,418			56,561			217,937			319,916
"D" Significant risk				178			10,403			477,820			488,401
"E" Risk of nonrecoverability				446			114				180,526				181,086
Financial leasing portfolio gross balance		Ps.	10,132,371	Ps.	329,948		Ps.	963,857		Ps.	11,426,176
Gross balance of financial assets per credit
portfolio		Ps.	158,975,675	Ps.	7,617,504		Ps.	10,288,662		Ps.	176,881,841

24

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

(3) Loss allowance for loans, financial assets and others receivable

The table below shows the loss allowance balances as of September 30, 2019.

					September 30, 2019
		Stage 1		Stage 2		Stage 3
				Lifetime		Lifetime		Simplified
		12-month		ECL not		ECL			Total
					approach
		ECL		credit-		credit-
				impaired		impaired
Loan portfolio
Commercial loan portfolio	Ps.	637,078	Ps.	220,876	Ps.	3,612,476	Ps.	-	Ps.	4,470,430
Consumer loan portfolio		1,062,118		924,757		1,610,757		-		3,597,632
Mortgage loan portfolio		44,927		84,873		177,440		-		307,240
Microcredit loan portfolio		24,219		11,728		53,215		-		89,162
Financial leasing loan		63,672		32,662		394,547		-		490,881
portfolio
Total loan portfolio	Ps.	1,832,014	Ps.	1,274,896	Ps.	5,848,435	Ps.	-	Ps.	8,955,345
Investments in debt		602		-		-		-		602
securities at amortized cost
Other accounts receivable		11,047		7,648		91,450		177,756		287,901
Total loss allowance
financial assets at	Ps.	1,843,663	Ps.	1,282,544	Ps.	5,939,885	Ps.	177,756	Ps.	9,243,848
amortized cost

Investments in debt securities at FVOCI Loan commitments and financial guarantee contracts

31,591	9,618	-	-	41,209
34,555	3,728	654	-	38,937

Total loss allowance	Ps.	1,909,809 Ps.	1,295,890 Ps.	5,940,539 Ps.	177,756 Ps.	9,323,994

The table below shows the gross amount and loss allowance balances, for loans stage 3 individually assessed for ECL as of September 30, 2019.

September 30, 2019

		Gross Amount		Collateral		Allowance
		Registered		Guarantees (1)		Recognized
Without recognized provision
Commercial	Ps.	121,857	Ps.	49,489	Ps.	-
Consumer		-		-		-
Financial Leasing		70,330		-		-
Subtotal	Ps.	192,187	Ps.	49,489	Ps.	-
With recognized provision
Commercial		6,258,685		614,464		2,863,335
Consumer		3,081		874		2,142
Financial Leasing		764,372		117,886		274,482
Subtotal	Ps.	7,026,138	Ps.	733,224	Ps.	3,139,959
Totals
Commercial		6,380,542		663,953		2,863,335
Consumer		3,081		874		2,142
Financial Leasing		834,702		117,886		274,482
Total	Ps.	7,218,325	Ps.	782,713	Ps.	3,139,959

1. Includes only the guarantees used in the individual provision process by the method of making the guarantee minus cost of sales.

25

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

The difference between the value of the loan and the guarantees disclosed on the table above correspond to unsecured loans valued with the discounted cash flow method. When using this method, it is implied that it is possible for the customer to make future payments.

The loss allowance recognized in the period is impacted by a variety of factors, as described below:

• Transfers between Stage 1 and Stages 2 or 3 due to financial instruments experiencing significant increases (or decreases) in credit risk or becomingcredit-impaired in the period, and the consequent "step up" (or "step down") between 12-month and lifetime ECL;
• Additional allowances for new financial instruments recognized during the period, as well as releases for financial instrumentsde-recognized in the period;
• Impact of the measurement of ECL due to changes made to models and assumptions;
• Discount unwind within ECL due to the passage of time, as ECL is measured on a present value basis;
• Foreign exchange retranslations for asset denominated in foreign currencies and other movements; and
• Financial assets derecognized during the period andwrite-offs of allowances related to assets than were written off during the period

The following tables show the reconciliations from the opening to the closing balance of the loss allowance by class of financial instrument.

Loan portfolio

			Stage 1		Stage 2		Stage 3
					Lifetime		Lifetime		Total
			12-month		ECL not
					ECL credit-
			ECL		credit-
					impaired
					impaired
Loss allowance as of 31 December 2018	Ps.	1,824,874	Ps.	1,197,046	Ps.	5,174,267	Ps.	8,196,187
Transfers:
Transfer from stage 1 to stage 2		(229,747)		229,747		-		-
Transfer from stage 1 to stage 3		(196,217)		-		196,217		-
Transfer from stage 2 to stage 3		-		(508,993)		508,993		-
Transfer from stage 3 to stage 2		-		90,295		(90,295)		-
Transfer from stage 2 to stage 1		271,507		(271,507)		-		-
Transfer from stage 3 to stage 1		109,749		-		(109,749)		-
Net remeasurement of loss allowance (2)		(195,035)		518,115		2,719,533		3,042,613
New financial assets originated or purchased		476,981		79,355		137,559		693,895
Financial assets that have been derecognized		(281,001)		(107,820)		(202,451)		(591,272)
Unwind of discount (1)		555		2,336		367,938		370,829
FX and other movements		85,383		86,074		(40,731)		130,726
Write-offs		(35,035)		(39,752)		(2,812,846)		(2,887,633)
Loss allowance as of September 30, 2019	Ps.	1,832,014	Ps.	1,274,896	Ps.	5,848,435	Ps.	8,955,345

1. The unwind of discount on Stage 3 financial assets is reported within "interest income" so that interest income is recognized on the amortized cost (after deducting the ECL allowance)
2. This amount includes impact of the measurement of ECL due to changes made in PDs/LGDs/EADs and changes made to model assumptions and methodologies from the opening to the closing balance, the following table shows impact by stage:

	Stage 1	Stage 2	Stage 3	Total
	12-month	Lifetime ECL	Lifetime ECL
	ECL	not credit-	credit-
			impaired		impaired
Ps.	(17,182) Ps.	(4,203) Ps.	76,858 Ps.	55,473

26

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

Commercial loan portfolio

			Stage 1		Stage 2		Stage 3
					Lifetime		Lifetime
			12-month		ECL not			Total
					ECL credit-
			ECL		credit
					impaired
					impaired
Loss allowance as of 31 December 2018	Ps.	695,728	Ps.	190,633	Ps.	3,051,088	Ps.	3,937,449
Transfers:
Transfer from stage 1 to stage 2		(33,655)		33,655		-		-
Transfer from stage 1 to stage 3		(27,227)		-		27,227		-
Transfer from stage 2 to stage 3		-		(84,727)		84,727		-
Transfer from stage 3 to stage 2		-		18,068		(18,068)		-
Transfer from stage 2 to stage 1		29,955		(29,955)		-		-
Transfer from stage 3 to stage 1		16,286		-		(16,286)		-
Net remeasurement of loss allowance (2) (3)		(140,857)		95,020		972,017		926,180
New financial assets originated or purchased		230,885		14,119		70,613		315,617
Financial assets that have been derecognized		(158,973)		(31,969)		(117,782)		(308,724)
Unwind of discount (1)		555		2,320		274,570		277,445
FX and other movements		24,636		14,135		(15,832)		22,939
Write-offs		(255)		(423)		(699,798)		(700,476)
Loss allowance as of September 30, 2019	Ps.	637,078	Ps.	220,876	Ps.	3,612,476	Ps.	4,470,430

1. The unwind of discount on Stage 3 financial assets is reported within "interest income" so that interest income is recognized on the amortized cost (after deducting the ECL allowance)
2. The net remeasurement of loss allowance includes Ps. 322,568 by Concesionaria Ruta del Sol.
3. This amount includes impact of the measurement of ECL due to changes made in PDs/LGDs/EADs and changes made to model assumptions and methodologies from the opening to the closing balance, the following table shows impact by stage:

	Stage 1	12-		Stage 2 Lifetime ECL		Stage 3 Lifetime ECL
	month ECL		not credit-impaired		credit-impaired		Total
Ps.	5,629	Ps.	5,728	Ps.	34,703	Ps. 46,060

Consumer loan portfolio

		Stage 1		Stage 2		Stage 3
				Lifetime		Lifetime
		12-month		ECL not			Total
				ECL credit-
		ECL		credit-
				impaired
				impaired
Loss allowance as of 31 December 2018	Ps.	998,390	Ps.	890,556	Ps.	1,553,365	Ps.	3,442,311
Transfers:
Transfer from stage 1 to stage 2		(177,390)		177,390		-		-
Transfer from stage 1 to stage 3		(155,936)		-		155,936		-
Transfer from stage 2 to stage 3		-		(377,575)		377,575		-
Transfer from stage 3 to stage 2		-		57,586		(57,586)		-
Transfer from stage 2 to stage 1		210,897		(210,897)		-		-
Transfer from stage 3 to stage 1		83,429		-		(83,429)		-
Net remeasurement of loss allowance (2)		(18,779)		374,370		1,573,449		1,929,040
New financial assets originated or purchased		216,083		62,645		51,326		330,054
Financial assets that have been derecognized		(118,278)		(72,078)		(70,244)		(260,600)
Unwind of discount (1)		-		16		60,010		60,026
FX and other movements		57,968		61,838		(17,969)		101,837
Write-offs		(34,266)		(39,094)		(1,931,676)		(2,005,036)
Loss allowance as of September 30, 2019	Ps.	1,062,118	Ps.	924,757	Ps.	1,610,757	Ps.	3,597,632

27

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

1. The unwind of discount on Stage 3 financial assets is reported within "interest income" so that interest income is recognized on the amortized cost (after deducting the ECL allowance)
2. This amount includes impact of the measurement of ECL due to changes made in PDs/LGDs/EADs and changes made to model assumptions and methodologies from the opening to the closing balance, the following table shows impact by stage:

					Stage 2				Stage 3
		Stage 1	Lifetime ECL				Lifetime ECL
		12-month	not credit-				credit-
		ECL		impaired				impaired				Total
Ps.	(19,751) Ps.	(10,415)		Ps.			40,286 Ps.		10,120
Mortgage loan portfolio
						Stage 1			Stage 2			Stage 3
											Lifetime			Lifetime
						12-month			ECL not					Total
										ECL credit-
						ECL			credit-
										impaired
											impaired
Loss allowance as of 31 December 2018	Ps.	35,187		Ps.	73,461		Ps.	148,595		Ps.	257,243
Transfers:
Transfer from stage 1 to stage 2			(7,581)			7,581				-			-
Transfer from stage 1 to stage 3			(1,087)			-		1,087			-
Transfer from stage 2 to stage 3				-			(21,066)			21,066			-
Transfer from stage 3 to stage 2				-			8,414			(8,414)			-
Transfer from stage 2 to stage 1			18,662			(18,662)				-			-
Transfer from stage 3 to stage 1			3,760			-		(3,760)			-
Net remeasurement of loss allowance (2)			(13,088)			28,156			79,887			94,955
New financial assets originated or purchased			5,905			290			661			6,856
Financial assets that have been derecognized			1,689			(2,726)			(6,421)			(7,458)
Unwind of discount (1)							-			-		4,356			4,356
FX and other movements						1,868			9,530			(5,576)			5,822
Write-offs						(388)			(105)				(54,041)			(54,534)
Loss allowance as of September 30, 2019	Ps.	44,927		Ps.	84,873		Ps.	177,440		Ps.	307,240

1. The unwind of discount on Stage 3 financial assets is reported within "interest income" so that interest income is recognized on the amortized cost (after deducting the ECL allowance)
2. This amount includes impact of the measurement of ECL due to changes made in PDs/LGDs/EADs and changes made to model assumptions and methodologies from the opening to the closing balance, the following table shows impact by stage:

			Stage 2	Stage 3
	Stage 1	Lifetime ECL	Lifetime ECL
	12-month	not credit-	credit-
	ECL		impaired		impaired		Total
Ps.	(1,600) Ps.	(560) Ps.	1,566 Ps.	(594)

28

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

Microcredit loan portfolio

			Stage 1		Stage 2		Stage 3
					Lifetime		Lifetime
			12-month		ECL not			Total
					ECL credit-
			ECL		credit-
					impaired
					impaired
Loss allowance as of 31 December 2018	Ps.	23,348	Ps.	11,962	Ps.	52,867	Ps.	88,177
Transfers:
Transfer from stage 1 to stage 2		(6,895)		6,895		-		-
Transfer from stage 1 to stage 3		(2,478)		-		2,478		-
Transfer from stage 2 to stage 3		-		(18,041)		18,041		-
Transfer from stage 3 to stage 2		-		1,866		(1,866)		-
Transfer from stage 2 to stage 1		4,295		(4,295)		-		-
Transfer from stage 3 to stage 1		668		-		(668)		-
Net remeasurement of loss allowance (2)		(1,442)		13,212		16,040		27,810
New financial assets originated or purchased		8,620		365		3		8,988
Financial assets that have been derecognized		(1,798)		(177)		(89)		(2,064)
Unwind of discount (1)		-		-		7,618		7,618
FX and other movements		-		-		-		-
Write-offs		(99)		(59)		(41,209)		(41,367)
Loss allowance as of September 30, 2019	Ps.	24,219	Ps.	11,728	Ps.	53,215	Ps.	89,162

1. The unwind of discount on Stage 3 financial assets is reported within "interest income" so that interest income is recognized on the amortized cost (after deducting the ECL allowance)
2. This amount includes impact of the measurement of ECL due to changes made in PDs/LGDs/EADs and changes made to model assumptions and methodologies from the opening to the closing balance, the following table shows impact by stage:

	Stage 1	12-		Stage 2		Stage 3		Total
	month ECL		Lifetime ECL		Lifetime ECL
				not credit-		credit-impaired
				impaired
Ps.	353	Ps.	(108)	Ps.	(6)	Ps.	239

Financial lease loan portfolio

			Stage 1		Stage 2		Stage 3
					Lifetime
					ECL not		Lifetime
			12-month		credit-		ECL credit-
			ECL		impaired		impaired		Total
Loss allowance as of 31 December 2018	Ps.	72,221	Ps.	30,434	Ps.	368,352	Ps.	471,007
Transfers:
Transfer from stage 1 to stage 2		(4,226)		4,226		-		-
Transfer from stage 1 to stage 3		(9,489)		-		9,489		-
Transfer from stage 2 to stage 3		-		(7,584)		7,584		-
Transfer from stage 3 to stage 2		-		4,361		(4,361)		-
Transfer from stage 2 to stage 1		7,698		(7,698)		-		-
Transfer from stage 3 to stage 1		5,606		-		(5,606)		-
Net remeasurement of loss allowance (2)		(20,869)		7,357		78,140		64,628
New financial assets originated or purchased		15,488		1,936		14,956		32,380
Financial assets that have been derecognized		(3,641)		(870)		(7,915)		(12,426)
Unwind of discount (1)		-		-		21,384		21,384
FX and other movements		911		571		(1,354)		128
Write-offs		(27)		(71)		(86,122)		(86,220)
Loss allowance as of September 30, 2019	Ps.	63,672	Ps.	32,662	Ps.	394,547	Ps.	490,881

29

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

1. The unwind of discount on Stage 3 financial assets is reported within "interest income" so that interest income is recognized on the amortized cost (after deducting the ECL allowance)
2. This amount includes impact of the measurement of ECL due to changes made in PDs/LGDs/EADs and changes made to model assumptions and methodologies from the opening to the closing balance, the following table shows impact by stage:

			Stage 2		Stage 3
			Lifetime ECL		Lifetime ECL
	Stage 1	not credit-		credit-
	12-month ECL		impaired		impaired		Total
Ps.	(1,813) Ps.	1,152	Ps.	309	Ps.	(352)

On August 6, 2019, An Arbitration Tribunal of the Chamber of Commerce of Bogotá, declared the nullity of the Concession Contract N° 001 of 2010, its amendments and other contractual agreements, entered into by and between the former Instituto Nacional de Concesiones - INCO (now ANI) and Concesionaria Ruta del Sol S.A.S (CRDS) for the construction of Project Ruta del Sol 2.

As a result, the Arbitration Tribunal established an amount of TWO HUNDRED ELEVEN THOUSAND TWO HUNDRED SEVENTY-THREE MILLION PESOS (Ps. 211,273), as the value that ANI shall recognize CRDS for the benefit of its third-party good faith creditors. This amount, added to the two payments received by the creditor banks in December 2017 and January 2019 for a total of Ps. 1.42 trillion pesos, result in a liquidation value of at least Ps. 1.63 trillion pesos for the Concession Contract N° 001 of 2010, for the construction of Project Ruta del Sol 2.

Episol, the banking subsisidiaries of Grupo Aval and other parties to these proceeding timely filed appeals for annulment of the award that must be resolved by the Consejo de Estado (Colombia's Supreme Court on for administrative matters)

Investments in debt securities at FVOCI

			Stage 1		Stage 2		Stage 3
					Lifetime
			12-month		ECL not		Lifetime
			ECL		credit-		ECL credit-
					impaired		impaired		Total
Loss allowance as of 31 December 2018	Ps.	20,757	Ps.	31,980	Ps.	46,280	Ps.	99,017
Transfers:
Transfer from stage 1 to stage 2		-		-		-		-
Net remeasurement of loss allowance (2)		(3,479)		(3,565)		(55)		(7,099)
New financial assets originated or purchased		18,737		-		-		18,737
Financial assets that have been derecognized		(3,385)		(17,990)		(45,602)		(66,977)
Unwind of discount (1)		-		-		-		-
FX and other movements		(1,039)		(807)		(623)		(2,469)
Loss allowance as of September 30, 2019	Ps.	31,591	Ps.	9,618	Ps.	-	Ps.	41,209

1. The unwind of discount on Stage 3 financial assets is reported within "interest income" so that interest income is recognized on the amortized cost (after deducting the ECL allowance)
2. This amount includes impact of the measurement of ECL due to changes made in PDs/LGDs/EADs and changes made to model assumptions and methodologies from the opening to the closing balance, the following table shows impact by stage:

	Stage 1	12-		Stage 2		Stage 3		Total
	month ECL		Lifetime ECL		Lifetime ECL
				not credit-		credit-impaired
				impaired
Ps.	(2,174)	Ps.	-	Ps.	-	Ps.	(2,174)

Investments in debt securities at amortized cost

Stage 1

Stage 2

Stage 3

Total

30

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

					Lifetime
					ECL not		Lifetime
			12-month		credit-		ECL credit-
			ECL		impaired		impaired
Loss allowance as of 31 December 2018	Ps.	71	Ps.	-	Ps.	-	Ps.	71
Transfers:
Transfer from stage 1 to stage 2		-		-		-		-
Net remeasurement of loss allowance (2)		176		-		-		176
New financial assets originated or purchased		435		-		-		435
Financial assets that have been derecognized		(28)		-		-		(28)
Unwind of discount (1)		-		-		-		-
FX and other movements		(52)		-		-		(52)
Loss allowance as of September 30, 2019	Ps.	602	Ps.	-	Ps.	-	Ps.	602

1. The unwind of discount on Stage 3 financial assets is reported within "interest income" so that interest income is recognized on the amortized cost (after deducting the ECL allowance)
2. This amount includes impact of the measurement of ECL due to changes made in PDs/LGDs/EADs and changes made to model assumptions and methodologies from the opening to the closing balance, the following table shows impact by stage:

	Stage 1	12-				Stage 2				Stage 3	Lifetime		Total
	month ECL			Lifetime ECL not				ECL credit-
							credit-impaired				impaired
Ps.	146		Ps.		-	Ps.				-		Ps.		146
Other accounts receivable
								Stage 1				Stage 2			Stage 3
												Lifetime
												ECL not			Lifetime
								12-month				credit-		ECL credit-			Simplified
								ECL				impaired			impaired			Approach		Total
Loss allowance as of 31 December 2018	Ps.	19,700		Ps.	11,561	Ps.	66,327	Ps.	159,303	Ps. 256,891
Transfers stages							(19,176)				(754)			19,930			-		-
Net remeasurement of loss allowance				2,739				(1,204)			22,481		21,254	45,270
New financial assets originated or purchased		-				-				-			-		-
Financial assets that have been derecognized		-				-				-			-		-
Unwind of discount (1)							-				-				-			-		-
FX and other movements							367					-				-		795	1,162
Approach change							8,996				(1,421)			(10,170)		2,595		-
Write-offs							(1,579)				(534)			(7,118)			(6,191)		(15,422)
Loss allowance as of September 30, 2019	Ps.	11,047		Ps.	7,648	Ps.	91,450	Ps.	177,756	287,901

1. The unwind of discount on Stage 3 financial assets is reported within "interest income" so that interest income is recognized on the amortized cost (after deducting the ECL allowance)

31

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

Loan commitments and financial guarantee contracts

		Stage 1		Stage 2		Stage 3
				Lifetime		Lifetime
		12-month		ECL not			Total
				ECL credit-
		ECL		credit-
				impaired
				impaired
Loss allowance as of 31 December 2018	Ps.	40,715	Ps.	14,358	Ps.	4,355	Ps.	59,428
Transfers:
Transfer from Stage 1 to Stage 2		(619)		619		-		-
Transfer from Stage 1 to Stage 3		(223)		-		223		-
Transfer from Stage 2 to Stage 3		-		(172)		172		-
Transfer from Stage 3 to Stage 2		-		42		(42)		-
Transfer from Stage 2 to Stage 1		8,320		(8,320)		-		-
Transfer from Stage 3 to Stage 1		3,542		-		(3,542)		-
Net remeasurement of loss allowance		(28,204)		(3,844)		(587)		(32,635)
New loan commitments and financial guarantees issued		10,003		1,044		67		11,114
FX and other movements		1,021		1		8		1,030
Loss allowance as of September 30, 2019	Ps.	34,555	Ps.	3,728	Ps.	654	Ps.	38,937

g) Credit Commitments

Following is the detail of the guarantees, letters of credit and credit commitments on non-used credit lines as of September 30, 2019 and December 31, 2018:

Credit lines commitments not used

September 30, 2019

Notional amount

December 31, 2018

Notional amount

Guarantees	Ps.	3,329,461	Ps.	3,446,601
Unused letters of credit		1,202,018		1,186,691
Unused limits of overdrafts		77,807		306,740
Unused credit card limits		23,674,667		20,816,061
Other		4,799,265		5,169,588
Total	Ps.	33,083,218	Ps.	30,925,681

Following is the detail of the credit commitments by type of currency:

		September 30, 2019		December 31, 2018
Colombian Pesos	Ps.	15,160,806	Ps.	14,918,915
U.S. dollars		14,482,766		12,885,921
Euro		3,222,871		2,892,670
Other		216,775		228,175
Total	Ps.	33,083,218	Ps.	30,925,681

32

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

NOTE 5 - HEDGE ACCOUNTING

In accordance with its risk management policies, Grupo Aval uses hedge accounting to manage foreign exchange risk relating to investments in foreign operations and in forecasted transactions of its subsidiary Promigas, as follows:

Hedges of net investment in foreign operations

Banco de Bogotá and Banco de Occidente are exposed to foreign exchange risk relating to their investments in foreign subsidiaries, whose functional currencies are the US dollar.

The purpose of hedge accounting is to mitigate and offset any adverse changes resulting from the fluctuation in exchange rate of the Colombian Peso and the functional currency of such investments. The impacts of those movements are reflected in the cumulative translation adjustment in other comprehensive income of the consolidated financial statements.

To cover this risk, Grupo Aval hedges its exposure through foreign currency financial liabilities expressed in U.S. dollars and forward contracts for the sale of U.S. dollars.

Changes in the fluctuation of the Colombian peso against the U.S. dollar are as follows:

Date	Value of USD 1	Nine-month
variation in pesos
September 30, 2019	3,477.45	227.70
December 31, 2018	3,249.75	277.57
September 30, 2018	2,972.18	(11.82)

According to information described above, the following table shows movements of OCI gross of taxes, related to hedges of net investment in foreign operations:

		Translation		Exchange		Exchange
Detail of investment		adjustment		difference of		difference		Net OCI
	of the		financial		in forward		account
		investments		liabilities		contracts
Leasing Bogotá Panamá	Ps.	984,240	Ps.	(470,678)	Ps.	(513,189)	Ps.	373
Other subsidiaries and branches Banco de Bogotá		31,330		-		(31,457)		(127)
Occidental Bank Barbados		7,197		(7,197)		-		-
Banco de Occidente Panamá		9,210		(9,210)		-		-
Sociedad Portuaria El Cayao S.A. E.S.P.		4,736		(4,736)		-		-
Gases del Pacífico S.A.C.		408		(408)		-		-
Gas Natural de Lima y Callao S.A.C. - Calidda		11,919		(11,919)		-		-
Total	Ps.	1,049,040	Ps.	(504,148)	Ps.	(544,646)	Ps.	246

33

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

According to information described above, the following table contains details of hedging operations carried out to cover foreign denominated equity investments. The analysis is presented gross of taxes:

September 30, 2019

	THOUSANDS OF USD					Ps. millions
		Amount of			Cumulative
		hedge by	Amount of			Exchange			Exchange
			translation
	Investment	financial	hedge by			difference of			difference in		Net OCI
Detail of investment		adjustment
amount	liabilities in	forward			financial			forward		account
		of the
		foreign	contracts			liabilities (1)			contracts
			investments
		currency
Leasing Bogotá Panamá	4,324,048	(2,067,100)	(2,244,198)	Ps.	5,113,621	Ps.	(2,065,883)	Ps.	(3,183,020)	Ps.	(135,282)
Other subsidiaries and branches Banco de Bogotá (2)	137,871	-	(137,446)		157,308		-			(154,855)		2,453
Occidental Bank Barbados	30,415	(30,415)	-		31,803		(31,803)			-		-
Banco de Occidente (Panamá)	38,023	(38,023)	-		44,787		(44,787)			-		-
Sociedad Portuaria El Cayao S.A. E.S.P.	21,214	(21,214)	-		14,808		(14,808)			-		-
Gases del Pacífico S.A.C.	2,500	(2,500)	-		2,802		(2,802)			-		-
Gas Natural de Lima y Callao S.A.C. - Calidda	51,218	(51,218)	-		19,915		(19,915)			-		-
Total	4,605,289	(2,210,470)	(2,381,644)	Ps.	5,385,044	Ps.	(2,179,998)	Ps.	(3,337,875)	Ps.	(132,829)

December 31, 2018

			THOUSANDS OF USD					Ps. millions
			Amount of			Cumulative
			hedge by	Amount of			Exchange			Exchange
				translation
		Investment	financial	hedge by			difference of			difference in		Net OCI
Detail of investment		adjustment
amount	liabilities in	forward			financial			forward		account
			of the
			foreign	contracts			liabilities (1)			contracts
				investments
			currency
Leasing Bogotá Panamá	3,964,051	(2,067,100)	(1,896,348)	Ps.	4,129,381	Ps.	(1,595,205)	Ps.	(2,669,831)	Ps.	(135,655)
Other subsidiaries and branches Banco de Bogotá (2)	126,380	-	(121,116)		125,978		-			(123,398)		2,580
Occidental Bank Barbados	23,971	(23,971)	-		24,606		(24,606)			-		-
Banco de Occidente (Panamá)	23,439	(23,439)	-		35,577		(35,577)			-		-
Sociedad Portuaria El Cayao S.A. E.S.P.	31,214	(31,214)	-		10,072		(10,072)			-		-
Gases del Pacífico S.A.C.	4,000	(4,000)	-		2,394		(2,394)			-		-
Gas Natural de Lima y Callao S.A.C. - Calidda	31,649	(19,336)	-		7,996		(7,996)			-		-
Total	4,204,704	(2,169,060)	(2,017,464)	Ps.	4,336,004	Ps.	(1,675,850)	Ps.	(2,793,229)	Ps.	(133,075)

1. Includes exchange difference hedged
2. Includes Banco de Bogotá Panamá, Banco Bogotá Finance, Ficentro and contributions of foreign branches in Miami, New York and Nassau.

34

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

a) Hedging of foreign exchange

Banco de Bogotá designated financial liabilities as hedging instruments on December 21, 2015 these included an intragroup liability amounting to US$ 500 million that Banco de Bogotá had as a hedging instrument of its investment in Leasing Bogotá Panamá. This operation was eliminated in the consolidation process of Grupo Aval and was excluded of the foreign investment hedge accounting. Starting May 1st and up to November 2nd, 2016 Grupo Aval designated financial assets in foreign debt securities amounting to US$ 500 million as cash flow hedge, the foreign exchange differences of this intra-group liability were not eliminated in the consolidation process and recorded in Other Comprehensive Income in the amount of Ps. 73,708. This value would be realized in the future as income only when the investment in Leasing Bogotá Panamá is sold. On November 2nd, 2016 Banco de Bogotá cancelled the intragroup liability amounting to US$ 500 million which was replaced in the foreign investment hedge accounting with other obligations in foreign currency with third parties.

1. Hedging of forecasted transactions

In the ordinary course of its operations Promigas S.A. and its subsidiaries receive income in U.S. Dollars derived from the transportation of gas in their gas pipelines. Promigas and its subsidiaries hedge the exchange risk arising in future transactions of highly probable gas transportation income, entered into forward contracts for the sale of U.S. dollars with financial entities different from the ones consolidated into Grupo Aval.

1. Testing of hedge effectiveness

Grupo Aval considers hedging as highly effective if at the beginning and in subsequent periods, the hedging is highly effective at offsetting changes in fair value or in cash flows attributable to the risk hedged during the period for which the hedging has been designated. The hedging is considered as such if the effectiveness of the hedging is in a range between 80% and 125%. Such effectiveness is assessed by Grupo Aval's entities at least quarterly and at the end of each accounting period.

According to this, each hedging was effective at September 30, 2019 and December 31, 2018.

NOTE 6 - TANGIBLE ASSETS

Property, plant and equipment		September 30, 2019		December 31, 2018
Properties, plant and equipment for own use	Ps.	5,786,357	Ps.	5,663,743
Right-of-use assets (1)		2,175,998		-
Investment properties		937,702		836,324
Biological assets		102,812		84,206
Properties, plant and equipment given in operating lease		7,465		4,210
Total	Ps.	9,010,334	Ps.	6,588,483

1. The Group has adopted IFRS 16 from January 1, 2019 (See Note 2.)

35

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

NOTE 7 - GOODWILL

The following is the roll-forward of goodwill balances during the period ended September 30, 2019 and December 31, 2018:

		September 30,		December 31,
		2019		2018
Balance at the beginning of the period	Ps.	7,318,594	Ps.	6,901,056
Foreign exchange adjustment		357,755		417,538
Balance at the end of the period	Ps.	7,676,349	Ps.	7,318,594

NOTE 8 - CONCESSIONS

The following are the balances for Grupo Aval for concession contracts for the nine-months periods ended September 30,

2019 and September 30, 2018:

			Gas and energy				Infrastructure				Total
Cost
At December 31, 2017	Ps.	2,546,056		Ps.	1,495,628		Ps.	4,041,684
Impact of the adoption of IFRS 15			-			569,994			569,994
At January 1, 2018	Ps.	2,546,056		Ps.	2,065,622		Ps.	4,611,678
Additions		301,020			1,237,696			1,538,716
Reclassification to PPE		(4,954)				-			(4,954)
Withdrawals / Sales		(880)			(21,353)			(22,233)
Foreign exchange adjustment		(740)				-			(740)
At September 30, 2018	Ps.	2,840,502		Ps.	3,281,965		Ps.	6,122,467
Accumulated Amortization
At December 31, 2017	Ps.	(369,893)		Ps.	(557,624)		Ps.	(927,517)
Amortization of the period		(94,025)			(119,873)			(213,898)
Reclassification to PPE		(9)				-			(9)
Withdrawals / sales		102				-			102
Foreign exchange adjustment		(129)				-			(129)
At September 30, 2018	Ps.	(463,954)		Ps.	(677,497)		Ps.	(1,141,451)
Total Intangible Assets
At December 31, 2017	Ps.	2,176,163		Ps.	938,004		Ps.	3,114,167
Impact of the adoption of IFRS 15			-			569,994			569,994
At January 1, 2018	Ps.	2,176,163		Ps.	1,507,998		Ps.	3,684,161
Cost		294,446			1,216,343			1,510,789
Amortization		(94,061)			(119,873)			(213,934)
At September 30, 2018	Ps.	2,376,548		Ps.	2,604,468		Ps.	4,981,016
			Gas and energy				Infrastructure				Total
Cost
At December 31, 2018	Ps.		3,033,014		Ps.		3,732,759		Ps.		6,765,773
Additions		494,409			1,160,909			1,655,318
Reclassification to PPE		255				-			255
Withdrawals / Sales		(3,059)			(408)			(3,467)
Foreign exchange adjustment			38,211				-				38,211
At September 30, 2019	Ps.	3,562,830		Ps.	4,893,260		Ps.	8,456,090

36

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

			Gas and energy			Infrastructure			Total
Accumulated Amortization
At December 31, 2018	Ps.	(501,737)	Ps.	(749,555)	Ps.	(1,251,292)
Amortization of the period			(101,277)			(94,731)			(196,008)
Reclassification to PPE			-			-			-
Withdrawals / sales			2,931			(21,884)			(18,953)
Foreign exchange adjustment			(2,219)			-			(2,219)
At September 30, 2019	Ps.	(602,302)	Ps.	(866,170)	Ps.	(1,468,472)
Impairment losses
At December 31, 2018	Ps.	-	Ps.	-	Ps.	-
Impairment charge			-			(2,007)			(2,007)
At September 30, 2019	Ps.	-	Ps.	(2,007)	Ps.	(2,007)
Total Intangible Assets
At December 31, 2018	Ps.	2,531,277	Ps.	2,983,204	Ps.	5,514,481
Cost			529,816			1,160,501			1,690,317
Amortization			(100,565)			(116,615)			(217,180)
Impairment losses			-			(2,007)			(2,007)
At September 30, 2019	Ps.	2,960,528	Ps.	4,025,083	Ps.	6,985,611

NOTE 9 - INCOME TAX

The current income tax expense and the deferred income tax expense are both recognized based on the best management´s estimate for the interim period.

The effective tax rate of the consolidated Grupo Aval, with respect to the continuous operations for the three-month period ended September 30, 2019 was 25.19%, and for the three-month period ended September 30, 2018 was 34,07%.

The effective tax rate with respect to continuous operations for the nine-month period ended September 30, 2019 was 29.0%, and for the nine-month period ended September 30, 2018 was 32.1%.

The 8.88% decrease in the effective tax rate for the third quarter of 2019, compared to the same period of the previous year and the 3.10% decrease for the nine-month period ended September 30, 2019 compared to the same period of the previous year, were mainly caused by the following factors:

• The nominal tax rate decreased by 4% for companies responsible for income tax in Colombia, which are not classified as financial entities, from 37% in 2018 to 33% in 2019, in accordance with Law 1943 of 2018; this effect is mainly driven by the consolidation of Corficolombiana's subsidiaries.
• On August 2019, Banco de Occidente recorded a recovery of deferred tax of Ps. 61,416, due to the update of the fiscal cost of the assets which were subject to fiscal consolidation, in the tax normalization return filed following the provisions of Law 1943 of 2018.
• On September 2019, Banco Popular recorded a recovery of deferred tax of Ps. 30,303, due to the update of the fiscal cost of the assets which were subject to fiscal consolidation, in the tax normalization return filed following the provisions of Law 1943 of 2018.

In addition to the above, the variation of the accumulated effective rate observed for the nine months period being compared is lower than the variation for the quarter being compared, because during the year 2018 Banco de Occidente

37

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

received a CREE tax refund of Ps. 50,860, corresponding to the 2013 and 2014 fiscal years, based on judgment C-10/18.

On October 29, 2019, the Constitutional Court of Colombia determined as unconstitutional the tax surcharge applicable to financial entities. The immediate effect of this resolution resulted in a decrease of the tax rate to determine the current tax provision from 37% to 33%. However, for deferred taxes purposes it was concluded that these should be determined using the same tax rates as those enacted as of September 30, 2019, since tax rates to be in force subsequent to 2019 are expected to be readjusted back at December 31, 2019 if a new law that modifies such rates is approved.

Based on the above, it is expected that the year end consolidated financial statements will include an adjustment for the reversal of the income tax provision registered up to September, which had been calculated at the rate of the rent, surcharge declared unenforceable.

NOTE 10 - EMPLOYEE BENEFITS

The detail of the balance of liabilities for employee benefits as of September 30, 2019 and December 31, 2018 is as follows:

		September 30, 2019		December 31, 2018
Short term		629,707		481,320
Post-employment		546,890		541,226
Long term (1)		179,800		242,335
Total	Ps.	1,356,397	Ps.	1,264,881

1. The variation includes the effect of a change in along-term institutional benefit plan at Banco de Bogotá, which went from being a defined benefit plan to a defined contribution plan, through which the bank makes monthly contributions into a fund created for each employee, resulting in an impact of Ps. 73,752.

NOTE 11 - PROVISIONS

Below are the balances for legal provisions and other provisions during the periods ended on September 30, 2019 and December 31, 2018:

Concepts		September 30, 2019		December 31, 2018
Legal Provisions	Ps.	135,249	Ps.	125,929
Other provisions		601,154		569,359
Total	Ps.	736,403	Ps.	695,288

38

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

NOTE 12 - OTHER LIABILITIES

Accounts payable and other liabilities comprised the following for the periods ended on September 30, 2019 and December 31, 2018:

OTHERS			September 30,			December 31,
		2019				2018
Suppliers and services payable	Ps.	1,621,607		Ps.	1,846,831
Dividends payable (1)			1,165,082				535,311
Income received for third parties (2)			857,218				453,450
Cashier checks			637,088				690,195
Non-financial liabilities			520,795				478,833
Resources for third parties anchoring			514,588				535,960
Collection on behalf of third parties (3)			489,947				1,514,309
Withholdings taxes and labor contributions			381,637				427,782
Commissions and fees			375,088				430,279
Collection service			283,308				314,785
Transactions ACH and ATH (4)			181,632				605,657
Customer loyalty programs			178,610				154,979
Affiliate establishments			171,610				335,078
Anticipated income			27,256				34,605
Cash Surplus			64,644				167,309
Checks drawn and not paid			53,514				48,864
Financial transactions tax			49,516				45,905
Tax levies			49,079				71,691
Canceled accounts			27,735				26,987
Insurance payables			23,092				48,505
Promissory buyers			17,963				18,371
Other liabilities			300,177				222,267
Total	Ps.	7,991,186		Ps.	9,007,953
OTHERS			September 30,			December 31,
		2019				2018
Liabilities to be canceled within twelve months			5,664,420				6,970,611
Liabilities to be canceled after twelve months			2,326,766				2,037,342
Total	Ps.	7,991,186		Ps.	9,007,953

1. The increase of Ps. 629,771 corresponds to dividends payable that were approved at the shareholders meetings of the different entities of the Group held in March 2019.
2. The increase of Ps. 390,514 corresponds to the concessions for the concepts of funding of land costs, networks, environmental issues and toll collection.
3. The decrease of Ps. 1,024,362 correspond to collections made in December 2018 for payment of withholding tax the source of outstanding payments to the tax authority.
4. The decrease of Ps. 424,025 corresponds to the compensation of electronic ACH and ATH transactions for payment and transfer concepts.

39

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

NOTE 13 - EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT

Declared dividends

The dividends are declared and paid to shareholders based on unconsolidated net income under Colombian IFRS for the immediately preceding period:

		September 30, 2019
Profits of the immediately preceding
period determined in the separate	Ps.	2,887,749	Ps.
financial statements of Grupo Aval.
Release of Occasional Reserves		6,265,450
available to the Assembly
Total available to the Assembly	Ps.	9,153,199	Ps.
		60 pesos per share payable in twelve
Cash dividends declared		installments of 5 pesos per share, from
		April 2019 to March 2020
Total shares outstanding		22,281,017,159
Total dividends decreed for

December 31, 2018

2,001,178

5,333,761

7,334,939

48 pesos per share payable in twelve installments of 4 pesos per share, from April 2018 to March 2019

22,281,017,159

controlling interests

1,336,861

1,069,489

Total Occasional Reserve available to

the Assembly

7,816,338

6,265,450

Equity transactions

As of September 30, 2019, some transactions were presented created changes in the interests of Grupo Aval and its subsidiaries have on the following investments:

The Board of Directors of Proyectos de Infraestructura - PISA S.A. authorized the purchase of 290,061,750 minority shares equivalent to 50.50% of Concesiones CCFC S.A.S., for a value of Ps. 67,097 million, with which PISA S.A. increase its ownership from 49.50% to 100% of CCFC S.A.S.

During Corficolombiana´s dividend distribution process, Grupo Aval and its subsidiaries received dividends in shares, unlike some minority shareholders who chose to receive the dividend payment in cash, generating a dilution effect at a consolidated level for Grupo Aval, which resulted in a modification of its participation going from 38.25% to 38.63%.

40

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

NOTE 14 - COMMITMENTS AND CONTINGENCIES

Capital expenses commitments

As of September 30, 2019, and December 31, 2018, Grupo Aval and its subsidiaries had contractual disbursement commitments of capital expenditures for Ps. 412,751 and Ps. 127,367, respectively.

Contingencies

As of September 30, 2019, and December 31, 2018, Grupo Aval and its subsidiaries attended administrative and legal proceedings as defendant; the claims of the proceedings were assessed based on analyses and opinion-s of responsible lawyers. The following legal contingencies were determined:

Labor Proceedings

As of September 30, 2019, and December 31, 2018, labor complaints had been recognized for Ps. 84,452 and Ps. 80,113 respectively. Historically, many of these proceedings have been resolved in favor of Grupo Aval and its subsidiaries.

Civil Proceedings

As of September 30, 2019, and December 31, 2018, the result of the assessment of the claims its of legal proceedings for civil suits, not including those with remote probability, reached an amount of Ps. 747,072 and Ps. 391,310 respectively.

Administrative, Tax Proceedings and Other Proceedings

Claims derived from administrative and judicial processes include those of fiscal responsibility over the concession contracts, tax proceedings and other, filed by national and local tax authorities. These authorities may establish, in some cases, sanctions in which Grupo Aval and its subsidiaries affiliates may incur as a result of: (i) the performance of their duty as a withholder or collector of national and local taxes, and/or (ii) the obligation to pay a higher tax amount in their condition of taxpayers. As of September 30, 2019, and December 31, 2018, the amount of the claims amounted to Ps. 158,469 and Ps. 241,092 respectively.

NOTE 15 - NET INCOME FROM COMMISSIONS AND FEE

Below is a detail of the income and expenses from contracts with customers for:

Net income from commissions and fees:

		For the three-month periods ended		For the nine-month periods ended
		September 30			September 30
Income from commissions and fees		2019			2018		2019			2018
Commissions on banking services	Ps	753,060 Ps	661,498	Ps	2,184,353 Ps	1,989,450
Fees on credit cards		337,846			294,102		967,720			855,357
Pension and severance fund management		279,631			244,106		836,209			732,855
Trust activities		87,126			77,251		252,190			231,503
Storage services		39,825			38,905		120,910			115,242
Commissions on drafts, checks and		12,771			12,098		37,539			36,649
checkbooks
Office network services		6,287			5,979		18,447			24,926

41

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

			For the three-month periods ended			For the nine-month periods ended
			September 30				September 30
Other commissions			2,645					2,121			7,658					7,724
Total	Ps.	1,519,191		Ps.	1,336,060	Ps.	4,425,026		Ps.	3,993,706
			For the three-month periods ended			For the nine-month periods ended
			September 30				September 30
Commissions and fees expenses			2019					2018			2019					2018
Banking services	Ps	(80,092)		Ps	(70,904)	Ps	(225,225)		Ps	(228,334)
Affiliations to pension funds			(26,921)					(18,451)			(71,173)					(55,944)
Information processing services of operators			(4,249)					(4,940)			(13,466)					(17,890)
Offices network services			(2,716)					(3,015)			(9,923)					(19,470)
Administration and intermediation services			(1,051)					(894)			(3,006)					(2,586)
Collection Service of contributions to			(38)					(1,619)			(1,320)					(5,453)
financial entities
Banking expenses			(190)					(177)			(518)					(522)
Others			(48,742)					(42,296)			(139,009)					(120,493)
Total			(163,999)					(142,296)			(463,640)					(450,692)
Net income from commissions and fees	Ps.	1,355,192		Ps.	1,193,764	Ps.	3,961,386		Ps.	3,543,014

Net income from sale of goods and services:

Net income from sale of goods and

services:

Income from goods and services from non-financial sector (1)

Others operating income

Total income

Cost of sales of companies from non- financial sector

General and administrative expenses Personnel expenses Amortization

Commissions and fees expenses Depreciation

Bonus payments

Allowance for impairment of loans and receivables

Donations expenses Depreciation right of use assets Labor severances

Total costs for goods and services Net, income from non-financial sector

	For the three-month periods ended		For the nine-month periods ended
	September 30			September 30
	2019			2018		2019			2018
Ps	2,283,969	Ps	2,435,262	Ps	6,098,073	Ps	5,147,252
	96,987			29,895		284,248			149,720
Ps.	2,380,956	Ps.		2,465,157	Ps.	6,382,321	Ps.		5,296,972
Ps	(1,342,339)	Ps	(1,118,438)	Ps	(3,318,812)	Ps	(2,721,999)
	(134,246)			(130,210)		(424,002)			(405,946)
	(137,115)			(124,955)		(410,263)			(366,950)
	(48,042)			(77,235)		(209,495)			(226,403)
	(8,141)			(3,178)		(22,973)			(12,647)
	(18,565)			(23,684)		(72,244)			(69,896)
	(8,985)			(6,667)		(28,375)			(26,067)
	(3,375)			(4,419)		(27,116)			(18,457)
	(2,965)			(3,050)		(8,893)			(9,430)
	(15,134)			-		(22,168)			-
	(556)			(1,017)		(2,198)			(2,035)
Ps.	(1,719,463)	Ps.		(1,492,853)	Ps.	(4,546,539)	Ps.		(3,859,830)
Ps.	661,493	Ps.	972,304	Ps.	1,835,782	Ps.	1,437,142

1. The increase corresponding to the nine months is mainly due to the progress of work in the Promigas concessions for Ps. 497,861, Concesionaría vial del Pacifico for Ps. 243,893 and Concecol for Ps. 238,006.

42

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

NOTE 16 - NET TRADING INCOME

Net trading income includes income from debt and equity securities, cross currency and bond derivatives:

		For the three-month periods ended		For the nine-month periods ended
			September 30				September 30
			2019				2018			2019				2018
Trading investment income (1)
Fixed income securities	Ps.	48,321		Ps.	24,424		Ps.	203,942		Ps.	73,979
Equities		104,697				20,112			284,616				47,982
Total trading investment income	Ps.	153,018		Ps.	44,536		Ps.	488,558		Ps.	121,961
Derivatives income
Net income (loss) on financial		250,091				24,885			199,254				12,095
derivatives (2)
Other trading income (3)		78,208				40,045			110,255				129,732
Total derivatives income	Ps.	328,299		Ps.		64,930		Ps.	309,509		Ps.		141,827
Total net trading income	Ps.	481,317		Ps.	109,466		Ps.	798,067		Ps.	263,788

1. Includes net trading income from investment securities held for trading, wich reflects the interest from investment in debt securities, gains/losses frommark-to-market valuation from investment in equity and debt securities and net income from trading activities.
2. Includes net trading income from trading derivatives, which reflects the gains/losses frommark-to-market valuation on trading derivatives.
3. Includes gains/losses from: (i) Net changes in the valuation of hedging derivatives frommark-to-market valuations from unhedged, (ii) the ineffective portion of the hedge, and (iii) Transfers of due hedging derivatives from OCI to the statement of income.

NOTE 17 - OTHER INCOME AND EXPENSE

Below is the detail of the others income and expense:

For the three-month periods ended September 30

For the nine-month periods ended September 30

Other Income

Net gain on sale of debt and equity securities Share of profit of equity accounted investees, net of tax Dividends

Gain on the sale of non-current assets held for sale

Net gain on asset valuation Foreign exchange gains (losses), net Other income

Total other income

	2019			2018			2019			2018
Ps.	118,854		Ps.	5,935		Ps.	189,918		Ps.	(13,960)
	64,897			53,816			174,445			142,361
	3,381			5,107			82,982			61,242
	5,601			8,290			18,183			14,462
	4,754			2,210			1,978			10,022
	(207,828)			106,036			(25,174)			371,312
	115,119			116,156			314,428			272,432
Ps.	104,778		Ps.	297,550		Ps.	756,760		Ps.	857,871

43

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

		For the three-month periods ended	For the nine-month periods ended September 30
		September 30
Other expense		2019			2018		2019		2018
Personnel expenses	Ps.	(1,061,648)	Ps.	(946,795)	Ps.	(3,023,925)	Ps.	(2,831,389)
Taxes and fees (1)		(286,048)			(183,425)		(690,911)		(538,979)
Affiliation contributions and		(177,432)			(129,564)		(482,771)		(376,397)
transfers
Consultancy, audit and other fees		(166,648)			(134,330)		(464,425)		(391,459)
Depreciation and amortization		(156,914)			(137,758)		(452,071)		(398,116)
Maintenance and repairs		(117,849)			(89,748)		(328,411)		(265,034)
Insurance		(96,378)			(94,463)		(282,997)		(279,704)
Marketing		(90,832)			(78,067)		(226,880)		(220,065)
Depreciation right of use assets (2)		(74,936)			-		(219,618)		-
Warehouse services		(72,233)			(67,079)		(206,594)		(198,246)
Transportation services		(44,342)			(44,565)		(133,196)		(134,360)
Leases (rent)		(46,226)			(112,443)		(128,044)		(345,838)
Cleaning and security services		(35,028)			(31,153)		(100,693)		(93,785)
Outsourcing services		(37,721)			(30,377)		(97,771)		(93,324)
Supplies and stationary		(23,731)			(19,297)		(71,155)		(57,412)
Electronic data processing		(16,752)			(20,490)		(60,901)		(58,507)
Travel expenses		(14,145)			(12,137)		(40,910)		(37,841)
Adaptation and installation		(13,488)			(11,068)		(36,847)		(37,135)
Loss from sale of non-current		(1,308)			(769)		(3,571)		(2,781)
assets held for sale
Other expense		(92,376)			(87,859)		(269,955)		(299,368)
Total other expense	Ps.	(2,626,035)	Ps.	(2,231,387)	Ps.	(7,321,646)	Ps.	(6,659,740)

1. Taxes and fees include the fiscal consolidation carried out in Banco de Occidente for Ps. 45,161 and Banco Popular for Ps. 13,856 recognized in the months of August and September 2019, respectively.
2. The Group has adopted IFRS 16 from January 1, 2019 (See Note 2.)

44

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

NOTE 18 - ANALYSIS OF OPERATING SEGMENTS

Following is the detail of the reportable financial information summarized for each segment as of September 30, 2019 and December 31, 2018:

Statement of Financial Position

September 30, 2019

			Banco de		Banco de		Banco		Banco		Corficolombiana		(1)Other		Eliminations		Total
			Bogotá S.A.		Occidente S.A.		Popular S.A.		AV Villas S.A.		S.A.		Segments
Assets
Trading assets	Ps.	4,081,503	Ps.	2,675,062	Ps.	314,383	Ps.	323,733	Ps.	1,950,387	Ps.	3,173	Ps.	(49,860)	Ps.	9,298,381
Investment securities		14,783,092		4,384,248		2,088,835		1,525,936		2,498,948		-		(730,502)		24,550,557
Hedging derivatives assets		27,226		-		-		-		735		-		(169)		27,792
Investments in associates and joint ventures		4,630,302		1,390,278		468,591		3,017		759,075		-		(6,260,997)		990,266
Loans, net		114,078,927		29,250,518		18,955,382		11,671,359		2,132,057		-		(1,658,521)		174,429,722
Other Assets		35,660,282		3,478,881		2,377,954		1,494,791		23,145,346		4,485,757		(6,092,390)		64,550,621
Total Assets	Ps.	173,261,332	Ps.	41,178,987	Ps.	24,205,145	Ps.	15,018,836	Ps.	30,486,548	Ps.	4,488,930	Ps.	(14,792,439)	Ps.	273,847,339
Liabilities
Customer Deposits	Ps.	116,874,990	Ps.	27,763,805	Ps.	17,355,933	Ps.	11,347,540	Ps.	4,188,987	Ps.	-	Ps.	(3,483,290)	Ps.	174,047,965
Financial Obligations		29,516,720		7,032,304		2,665,018		1,420,133		11,748,750		4,557,979		(3,453,975)		53,486,929
Other Liabilities		5,556,128		1,596,745		1,134,667		536,908		5,020,790		828,559		(724,192)		13,949,605
Total Liabilities	Ps.	151,947,838	Ps.	36,392,854	Ps.	21,155,618	Ps.	13,304,581	Ps.	20,958,527	Ps.	5,386,538	Ps.	(7,661,457)	Ps.	241,484,499

1. Includes Grupo Aval Holding, Grupo Aval Limited, Grupo Aval International Limited and ATH Negocio Conjunto.

December 31, 2018

			Banco de		Banco de		Banco		Banco		Corficolombiana		(1)Other		Eliminations		Total
			Bogotá S.A.		Occidente S.A.		Popular S.A.		AV Villas S.A.		S.A.		Segments
Assets
Trading assets	Ps.	3,086,060	Ps.	1,670,934	Ps.	235,283	Ps.	302,226	Ps.	1,987,205	Ps.	212	Ps.	(77,608)	Ps.	7,204,312
Investment securities			11,238,754		5,070,964		2,900,778		1,225,551		3,189,297		-		(595,185)		23,030,159
Hedging derivatives assets			32,981		-		-		-		43		-		(2,886)		30,138
Investments in associates and joint ventures			4,157,015		1,247,935		396,289		2,347		759,222		-		(5,580,065)		982,743
Loans, net			111,018,238		26,996,654		18,287,166		11,027,826		2,575,561		-		(1,219,791)		168,685,654
Other Assets			33,769,462		3,935,123		2,829,152		1,649,531		17,729,308		3,924,117		(4,094,546)		59,742,147
Total Assets	Ps.	163,302,510	Ps.	38,921,610	Ps.	24,648,668	Ps.	14,207,481	Ps.	26,240,636	Ps.	3,924,329	Ps.	(11,570,081)	Ps.	259,675,153
Liabilities
Customer Deposits	Ps.	108,404,522	Ps.	25,592,232	Ps.	17,571,388	Ps.	11,425,400	Ps.	3,805,028	Ps.	-	Ps.	(2,439,119)	Ps.	164,359,451
Financial Obligations			28,560,065		6,881,717		3,139,013		647,872		9,673,342		4,376,021		(2,066,040)		51,211,990
Other Liabilities			6,670,148		1,941,504		1,047,333		514,029		4,643,578		443,591		(710,819)		14,549,364
Total Liabilities	Ps.	143,634,735	Ps.	34,415,453	Ps.	21,757,734	Ps.	12,587,301	Ps.	18,121,948	Ps.	4,819,612	Ps.	(5,215,978)	Ps.	230,120,805

1. Includes Grupo Aval Holding, Grupo Aval Limited, Grupo Aval International Limited and ATH Negocio Conjunto.

45

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

Statement of Income for the quarter ended September 30, 2019

		Banco de		Banco de		Banco		Banco		Corficolombiana		(1)Other		Eliminations		Total
		Bogotá S.A.		Occidente S.A.		Popular S.A.		AV Villas S.A.		S.A.		Segments
External Income
Interest income	Ps.	3,105,531	Ps.	766,437	Ps.	569,514	Ps.	364,224	Ps.	136,293	Ps.	102	Ps.	-	Ps.	4,942,101
Income from commissions		1,228,442		108,702		67,165		71,058		17,703		26,121		-		1,519,191
and fees
Income from sales of goods		25,491		15,520		103		(1,616)		2,341,458		-		-		2,380,956
and services
Share of profit of equity		3,639		1,471		1,907		1,530		56,350		-		-		64,897
accounted investees, net of tax
Dividends		59		-		516		-		2,806		-		-		3,381
Other Income		423,065		75,150		49,687		9,932		16,953		(1,728)		-		573,059
	Ps.	4,786,227	Ps.	967,280	Ps.	688,892	Ps.	445,128	Ps.	2,571,563	Ps.	24,495	Ps.	-	Ps.	9,483,585
Intersegment Income
Interest income	Ps.	26,875	Ps.	3,531	Ps.	3,886	Ps.	902	Ps.	13,574	Ps.	18	Ps.	(48,786)	Ps.	-
Income from commissions		1,240		2,260		569		4,744		495		10,752		(20,060)		-
and fees
Income from sales of goods		571		42,364		-		1,616		1,580		-		(46,131)		-
and services
Share of profit of equity		118,867		61,227		16,553		(1,566)		445		-		(195,526)		-
accounted investees, net of tax
Dividends		-		-		-		-		-		-		-		-
Other Income		5,150		700		46		409		90		27,036		(33,431)		-
		152,703		110,082		21,054		6,105		16,184		37,806		(343,934)		-
Total income	Ps.	4,938,930	Ps.	1,077,362	Ps.	709,946	Ps.	451,233	Ps.	2,587,747	Ps.	62,301	Ps.	(343,934)	Ps.	9,483,585
Expenses
Interest expense	Ps.	(1,241,917)	Ps.	(314,084)	Ps.	(218,750)	Ps.	(105,508)	Ps.	(272,086)	Ps.	(61,350)	Ps.	100,901	Ps.	(2,112,794)
Impairment loss on loan and		(852,822)		(184,436)		(81,284)		(68,329)		(4,418)		-		2,007		(1,189,282)
other accounts receivable
Depreciations and		(160,790)		(29,799)		(20,404)		(16,839)		(1,892)		(2,978)		852		(231,850)
amortizations
Expenses from commissions		(102,597)		(21,459)		(17,388)		(34,676)		(2,427)		(944)		15,492		(163,999)
and fees
Costs and expenses of sales		(54,209)		(78,868)		(137)		-		(1,570,311)		1,909		(17,847)		(1,719,463)
goods and services
Administrative Expenses		(865,722)		(212,357)		(166,308)		(101,746)		(27,972)		(63,566)		143,751		(1,293,920)
Other expense		(722,466)		(82,390)		(103,358)		(47,778)		(26,347)		79,604		(97,012)		(999,747)
Income tax expense		(237,475)		14,600		(4,689)		(24,682)		(179,198)		(15,049)		(25)		(446,518)
Total Expenses		(4,237,998)		(908,793)		(612,318)		(399,558)		(2,084,651)		(62,374)		148,119		(8,157,573)
Net income	Ps.	700,932	Ps.	168,569	Ps.	97,628	Ps.	51,675	Ps.	503,096	Ps.	(73)	Ps.	(195,815)	Ps.	1,326,012

46

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

		Banco de	Banco de		Banco		Banco	Corficolombiana	(1)Other		Eliminations	Total
		Bogotá S.A.	Occidente S.A.		Popular S.A.		AV Villas S.A.	S.A.	Segments
Revenue from
contracts with
customers	Ps.	1,255,446 Ps.	168,007	Ps.	67,735	Ps.	75,801 Ps.	2,259,343 Ps.	104,887	Ps.	(31,072) Ps.	3,900,147
Timing of revenue
recognition
At a point in time		49,861		8,196		6,385		21,617		48,789		104,736		(83,551)		156,033
Over time		1,205,585		159,811		61,350		54,184		2,210,554		151		52,479		3,744,114

1. Includes Grupo Aval Holding, Grupo Aval Limited, Grupo Aval International Limited and ATH Negocio Conjunto
2. Income from contracts with customer for commission and fee, see note 15

Statement of Income for the nine-months periods ended on September 30, 2019

		Banco de		Banco de		Banco		Banco		Corficolombiana		(1)Other		Eliminations		Total
		Bogotá S.A.		Occidente S.A.		Popular S.A.		AV Villas S.A.		S.A.		Segments
External Income
Interest income	Ps.	9,064,621	Ps.	2,320,982	Ps.	1,736,047	Ps.	1,093,354	Ps.	281,756	Ps.	299	Ps.	-	Ps.	14,497,059
Income from commissions		3,594,614		314,797		196,246		207,059		55,697		56,613		-		4,425,026
and fees
Income from sales of goods		83,589		49,470		871		(3,841)		6,252,232		-		-		6,382,321
and services (2)
Share of profit of equity		8,846		3,909		4,704		3,968		153,018		-		-		174,445
accounted investees, net of tax
Dividends		3,314		279		1,155		1,795		76,439		-		-		82,982
Other Income		929,147		195,012		79,375		46,924		209,300		16		-		1,459,774
	Ps.	13,684,131	Ps.	2,884,449	Ps.	2,018,398	Ps.	1,349,259	Ps.	7,028,442	Ps.	56,928	Ps.	-	Ps.	27,021,607
Intersegment Income
Interest income	Ps.	68,802	Ps.	9,650	Ps.	9,267	Ps.	2,370	Ps.	112,606	Ps.	68	Ps.	(202,763)	Ps.	-
Income from commissions		3,905		6,358		2,337		14,426		634		57,284		(84,944)		-
and fees
Income from sales of goods		1,297		116,903		-		3,841		4,131		-		(126,172)		-
and services
Share of profit of equity		389,548		200,696		54,918		(4,156)		1,284		-		(642,290)		-
accounted investees, net of tax
Dividends		5,288		2,022		2,925		2,053		101		-		(12,389)		-
Other Income		54,599		4,507		141		1,133		(3,389)		58,056		(115,047)		-
		523,439		340,136		69,588		19,667		115,367		115,408		(1,183,605)		-
Total income	Ps.	14,207,570	Ps.	3,224,585	Ps.	2,087,986	Ps.	1,368,926	Ps.	7,143,809	Ps.	172,336	Ps.	(1,183,605)	Ps.	27,021,607
Expenses
Interest expense	Ps.	(3,608,604)	Ps.	(899,707)	Ps.	(659,196)	Ps.	(310,649)	Ps.	(670,063)	Ps.	(177,720)	Ps.	219,008	Ps.	(6,106,931)
Impairment loss on loan and		(2,120,047)		(635,850)		(243,291)		(227,928)		(10,591)		-		74,317		(3,163,390)
other accounts receivable
Depreciations and		(468,062)		(85,560)		(57,867)		(49,065)		(5,916)		(7,591)		2,372		(671,689)
amortizations

47

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

			Banco de				Banco de				Banco					Banco			Corficolombiana				(1)Other			Eliminations			Total
			Bogotá S.A.			Occidente S.A.			Popular S.A.				AV Villas S.A.			S.A.				Segments
Expenses from commissions			(283,875)				(60,904)				(49,052)					(101,512)				(8,426)			(3,402)		43,531		(463,640)
and fees
Costs and expenses of sales			(171,521)				(225,412)				(413)						-			(4,157,398)			5,695		2,510		(4,546,539)
goods and services
Administrative Expenses			(2,399,813)				(539,449)				(453,173)					(290,430)				(79,597)			(184,086)		416,824		(3,529,724)
Other expense			(2,032,956)				(240,207)				(284,930)					(149,218)				(115,463)			279,453		(246,546)		(2,789,867)
Income tax expense			(822,273)				(60,384)				(75,803)					(79,068)				(581,292)			(47,170)		(1,502)		(1,667,492)
Total Expenses			(11,907,151)				(2,747,473)				(1,823,725)					(1,207,870)				(5,628,746)			(134,821)		510,514		(22,939,272)
Net income	Ps.	2,300,419		Ps.	477,112		Ps.	264,261		Ps.	161,056		Ps.	1,515,063		Ps.	37,515	Ps.	(673,091)	Ps.	4,082,335
			Banco de				Banco de				Banco					Banco			Corficolombiana				(1)Other			Eliminations			Total
			Bogotá S.A.				Occidente S.A.				Popular S.A.					AV Villas S.A.			S.A.				Segments
Revenue from contracts with
customers (2)	Ps.	3,682,784	Ps.	484,376	Ps.	198,599		Ps.	221,484	Ps.	6,021,782		Ps.	326,089	Ps.	(127,767)	Ps.	10,807,347
Timing of revenue recognition
At a point in time			150,852			24,307			17,312				61,694			173,776			325,681		(281,422)		472,200
Over time			3,531,932			460,069			181,287				159,790			5,848,006			408		153,655		10,335,147

1. Includes Grupo Aval Holding, Grupo Aval Limited, Grupo Aval International Limited and ATH Negocio Conjunto
2. Income from contracts with customer for commission and fee, see note 15

Statement of Income for the quarter ended September 30, 2018

		Banco de		Banco de		Banco		Banco		Corficolombiana		(1) Other		Eliminations		Total
		Bogotá S.A.		Occidente S.A.		Popular S.A.		AV Villas S.A.		S.A.		Segments
External Income
Interest income	Ps.	2,862,568	Ps.	794,953	Ps.	545,353	Ps.	358,551	Ps.	125,639	Ps.	53	Ps.	-	Ps.	4,687,117
Income from commissions		1,074,468		99,265		61,615		67,975		20,795		11,942		-		1,336,060
and fees
Income from sales of goods		31,183		20,173		3,401		-		2,410,400		-		-		2,465,157
and services
Share of profit of equity		2,410		1,145		1,174		926		48,161		-		-		53,816
accounted investees, net of tax
Dividends		997		6		281		908		2,915		-		-		5,107
Other Income		267,097		41,754		16,710		13,245		59,253		201		-		398,260
	Ps.	4,238,723	Ps.	957,296	Ps.	628,534	Ps.	441,605	Ps.	2,667,163	Ps.	12,196	Ps.	-	Ps.	8,945,517
Intersegment Income
Interest income	Ps.	(47,775)	Ps.	(32,210)	Ps.	7,105	Ps.	447	Ps.	5,918	Ps.	31	Ps.	66,484	Ps.	-
Income from commissions		335		1,950		1,089		4,712		366		26,540		(34,992)		-
and fees
Income from sales of goods		226		24,916		-		-		1,343		-		(26,485)		-
and services

48

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

			Banco de				Banco de			Banco			Banco			Corficolombiana			(1) Other			Eliminations			Total
			Bogotá S.A.			Occidente S.A.			Popular S.A.			AV Villas S.A.			S.A.			Segments
Share of profit of equity			193,868				28,597				(1,051)				(1,025)			371			-		(220,760)			-
accounted investees, net of tax
Dividends			-				-			-			-			-			-			-			-
Other Income			127,687				1,254				32				551			2,402		13,278		(145,204)			-
			274,341				24,507				7,175				4,685			10,400		39,849		(360,957)			-
Total income	Ps.	4,513,064		Ps.	981,803		Ps.	635,709		Ps.	446,290		Ps.	2,677,563	Ps.	52,045	Ps.	(360,957)	Ps.	8,945,517
Expenses
Interest expense	Ps.	(1,079,544)		Ps.	(279,968)		Ps.	(208,896)		Ps.	(93,427)		Ps.	(176,485)	Ps.	(55,229)	Ps.	46,273	Ps.	(1,847,276)
Impairment loss on loan and			(661,070)				(233,860)				(52,063)				(67,633)			721			-		(87,808)		(1,101,713)
other accounts receivable
Depreciations and			(93,201)				(19,324)				(13,047)				(8,510)			(1,829)		(1,778)		(69)		(137,758)
amortizations
Expenses from commissions			(81,154)				(16,050)				(22,723)				(25,287)			(3,220)		(605)		6,743		(142,296)
and fees
Costs and expenses of sales			(60,479)				(61,383)				(3,273)				-		(1,374,755)		867		6,170		(1,492,853)
goods and services
Administrative Expenses			(762,856)				(165,505)				(134,561)				(105,777)			(31,145)		(49,317)		139,320		(1,109,841)
Other expense			(634,042)				(97,036)				(85,556)				(50,063)			(25,164)		81,659		(99,594)		(909,796)
Income tax expense			(254,781)				(24,965)				(45,027)				(31,486)			(375,440)		(17,958)		(1,169)		(750,826)
Total Expenses			(3,627,127)				(898,091)				(565,146)				(382,183)			(1,987,317)		(42,361)		9,866		(7,492,359)
Net income	Ps.	885,937		Ps.	83,712		Ps.	70,563		Ps.	64,107		Ps.	690,246	Ps.	9,684	Ps.	(351,091)	Ps.	1,453,158
			Banco de				Banco de			Banco			Banco			Corficolombiana			(1)Other			Eliminations			Total
			Bogotá S.A.				Occidente S.A.			Popular S.A.			AV Villas S.A.			S.A.			Segments
Revenue from contracts with
customers	Ps.	1,106,135	Ps.	145,566	Ps.	65,459	Ps.	72,687	Ps.	2,401,949	Ps.	109,212	Ps.	(99,791)	Ps.	3,801,217
Timing of revenue recognition
At a point in time			45,595			5,438			8,295			21,276		43,000		109,097		(18,130)		214,571
Over time			1,060,540			140,128			57,164			51,411		2,358,949		115		(81,661)		3,586,646

1. Includes Grupo Aval Holding, Grupo Aval Limited, Grupo Aval International Limited and ATH Negocio Conjunto
2. Income from contracts with customer for commission and fee, see note 15

49

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

Statement of Income for the nine-months periods ended on September 30, 2018

		Banco de		Banco de		Banco		Banco		Corficolombiana		(1)Other		Eliminations		Total
		Bogotá S.A.		Occidente S.A.		Popular S.A.		AV Villas S.A.		S.A.		Segments
External Income
Interest income	Ps.	8,230,589	Ps.	2,338,628	Ps.	1,654,208	Ps.	1,024,290	Ps.	417,176	Ps.	130	Ps.	-	Ps.	13,665,021
Income from commissions
and fees		3,207,901		296,909		182,097		195,983		58,345		52,471		-		3,993,706
Income from sales of goods
and services		94,832		56,614		9,052		-		5,136,474		-		-		5,296,972
Share of profit of equity
accounted investees, net of tax		4,044		2,187		2,332		2,185		131,613		-		-		142,361
Dividends		3,572		279		1,567		2,306		53,518		-		-		61,242
Other Income		601,388		116,699		51,123		40,773		283,084		2,201		-		1,095,268
	Ps.	12,142,326	Ps.	2,811,316	Ps.	1,900,379	Ps.	1,265,537	Ps.	6,080,210	Ps.	54,802	Ps.	-	Ps.	24,254,570
Intersegment Income
Interest income	Ps.	(9,150)	Ps.	(28,222)	Ps.	7,894	Ps.	617	Ps.	23,662	Ps.	110	Ps.	5,089	Ps.	-
Income from commissions
and fees		1,812		7,449		5,442		15,785		1,145		60,780		(92,413)		-
Income from sales of goods
and services		492		69,020		-		-		4,280		-		(73,792)		-
Share of profit of equity
accounted investees, net of tax		327,136		86,872		(2,888)		(2,898)		738		-		(408,960)		-
Dividends		12,898		7,834		9,355		707		1,211		-		(32,005)		-
Other Income		192,242		3,247		277		1,324		2,857		31,440		(231,387)		-
		525,430		146,200		20,080		15,535		33,893		92,330		(833,468)		-
Total income	Ps.	12,667,756	Ps.	2,957,516	Ps.	1,920,459	Ps.	1,281,072	Ps.	6,114,103	Ps.	147,132	Ps.	(833,468)	Ps.	24,254,570
Expenses
Interest expense	Ps.	(3,187,780)	Ps.	(854,562)	Ps.	(640,965)	Ps.	(272,623)	Ps.	(579,440)	Ps.	(164,613)	Ps.	149,800	Ps.	(5,550,183)
Impairment loss on loan and
other accounts receivable		(1,703,774)		(630,380)		(133,626)		(211,957)		(22,690)		-		(87,808)		(2,790,235)
Depreciations and
amortizations		(268,154)		(57,368)		(36,437)		(24,641)		(5,826)		(5,599)		(91)		(398,116)
Expenses from commissions
and fees		(269,421)		(52,985)		(67,231)		(76,157)		(9,669)		(1,809)		26,580		(450,692)
Costs and expenses of sales
goods and services		(192,178)		(172,825)		(9,708)		-		(3,517,682)		4,275		28,288		(3,859,830)
Administrative Expenses		(2,241,111)		(533,027)		(402,707)		(296,655)		(67,264)		(145,334)		352,213		(3,333,885)
Other expense		(1,868,805)		(302,420)		(267,799)		(137,581)		(78,235)		219,462		(216,834)		(2,652,212)
Income tax expense		(801,363)		(11,532)		(137,146)		(86,528)		(587,131)		(50,385)		(1,573)		(1,675,658)
Total Expenses		(10,532,586)		(2,615,099)		(1,695,619)		(1,106,142)		(4,867,937)		(144,003)		250,575		(20,710,811)
Net income	Ps.	2,135,170	Ps.	342,417	Ps.	224,840	Ps.	174,930	Ps.	1,246,166	Ps.	3,129	Ps.	(582,893)	Ps.	3,543,759

50

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

		Banco de	Banco de		Banco		Banco		Corficolombiana		(1)Other		Eliminations		Total
		Bogotá S.A.	Occidente S.A.		Popular S.A.		AV Villas S.A.		S.A.		Segments
Revenue from contracts with
customers (2)	Ps.	3,304,697 Ps.	427,954	Ps.	194,842	Ps.	211,768	Ps.	5,050,098	Ps.	326,227	Ps.	(224,908)	Ps.	9,290,678
Timing of revenue recognition
At a point in time		140,561		19,282		22,545		56,420		109,194		325,842		(284,040)		389,804
Over time		3,164,136		408,672		172,297		155,348		4,940,904		385		59,132		8,900,874

1. Includes Grupo Aval Holding, Grupo Aval Limited, Grupo Aval International Limited and ATH Negocio Conjunto
2. Income from contracts with customer for commission and fee, see note 15

Reconciliation of net income, assets and liabilities of reportable operating segments

Main eliminations of total income, expenses, assets and liabilities between segments with the corresponding consolidated entries at the level of Grupo Aval are:

• Loans with financial obligations of entities mainly fromnon-financial sector.
• Investments in term deposits and outstanding bonds of in other segments.
• Investments in subordinate's elimination and record of non- controlling interests.
• Intercompany leasing's and commissions paid between Grupo Aval's entities.
• Expenses and incomes for commissions.

18.1 Analysis of Revenues by Products and Services

Grupo Aval's revenues are analyzed by products and services, in the statement of income.

51

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

NOTA 19 - TRANSFERS OF FINANCIAL ASSETS

Grupo Aval and its subsidiaries enter into transactions in the normal course of business by which it transfers financial assets to third parties. Depending on the circumstances, these transfers may either result in these financial assets being derecognized or continuing to be recognized in Grupo Aval´s financial statements.

A. Transferred financial assets not qualifying for full derecognition

i. Sale and repurchase agreements

The debt securities of financial investments at fair value through profit or loss that are being used as guarantees in repurchase transactions amounted to Ps. 461,299 as of September 30, 2019 and Ps. 1,139,782 as of December 31, 2018; the financial assets at amortized cost that are being used as guarantees in repurchase transactions amounted to Ps. 947,813 as of September 30,2019 and the debt securities of financial investments at fair value through OCI that are being used as guarantees in repurchase transactions amounted to Ps. 3,737,838 as of September 30, 2019 and Ps. 4,029,816 as of December 31, 2018.

ii. Securities lending

As of September 30, 2019, and as of December 31, 2018, Grupo Aval has not recorded securities lending.

1. Transfer of financial assets that are derecognized in their entirety I. Securitizations

As of September 30, 2019, and as of December 31, 2018, Grupo Aval has not transferred financial assets to special purpose vehicles.

NOTE 20 - UNCONSOLIDATED STRUCTURED ENTITIES

The table below shows the total assets of unconsolidated structured entities in which Grupo Aval had an interest at the reporting date and its maximum exposure to loss in relation to those interests:

September 30, 2019		Securitizations		Grupo Aval´s		Total
		managed funds
Grupo Aval's interest-assets
Investments at fair value through profit or loss	Ps.	9,594	Ps.	3,235,834	Ps.	3,245,428
Other account receivables		-		50,070		50,070
Total assets in relation to the Grupo Aval's
interests in the unconsolidated structured entities		9,594		3,285,904		3,295,498
Grupo Aval's maximum exposure	Ps.	9,594	Ps.	3,285,904	Ps.	3,295,498

52

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

NOTE 21 - RELATED PARTIES

Balances as of September 30, 2019 and December 31, 2018, with related parties, are detailed in the following tables:

Assets

Cash and equivalents Financial assets in investments Financial assets in credit operations Accounts receivable

Other assets

Liabilities

Deposits

Accounts payables

Financial obligations

Others liabilities

Assets

Cash and equivalents Financial assets in investments Financial assets in credit operations Accounts receivable

Other assets

September 30, 2019

	Individuals					Entity
	Individuals								Entities with
	with		Key				Entities
			Associates and			significant
	control		management			controlled by
			joint ventures			influence by
	over Grupo		personnel			individuals
						individuals
	Aval
Ps.	-	Ps.	-	Ps.	-	Ps.	-	Ps.	-
	-		-		1,000,750		-		-
	4,231		8,898		1,142,936		1,526,405		126,686
	8		12		130,136		5,587		312
	-		-		9,057		2,946		-
Ps.	116,602	Ps.	22,413	Ps.	78,486	Ps.	898,999	Ps.	1,306
	1,051		454		12,986		745,872		-
	-		-		-		-		-
	-		2		1,902		256		-
	December 31, 2018
	Individuals					Entity
	Individuals								Entities with
	with		Key				Entities
			Associates and			significant
	control		management			controlled by
			joint ventures			influence by
	over Grupo		personnel			individuals
						individuals
	Aval
Ps.	-	Ps.	-	Ps.	-	Ps.	-	Ps.	-
	-		-		920,170		-		-
	2,680		17,062		1,443,476		1,513,218		102,958
	9		58		8,105		3,329		17
	-		-		20,348		5,030		-

53

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

				December 31, 2018
				Individuals									Entity
				Individuals															Entities with
				with			Key							Entities
								Associates and					significant
				control			management					controlled by
								joint ventures					influence by
				over Grupo			personnel					individuals
														individuals
				Aval
Liabilities
Deposits	Ps.	100,199		Ps.	21,726		Ps.	70,960		Ps.	570,558		Ps.	23,470
Accounts payables			38				686				10,114				291,328				1
Financial obligations			1				3				102				7				-
Others liabilities			-			-			25,040				194				3
				For the quarter ended September 30, 2019
				Individuals									Entity
				Individuals																Entities with
				with			Key								Entities
									Associates and					significant
				control			management						controlled by
									joint ventures					influence by
				over Grupo			personnel						individuals
															individuals
				Aval
Interest income		Ps.	45		Ps.	64		Ps.	8,044		Ps.	22,190		Ps.	2,001
Fee income and commissions				2				26				7,695				50,062				1
Leases				-			-				(20)				69				-
Other income				1				48				74,670				1,651				265
Financial expenses				(31)				(411)				(213)				(5,767)				(4)
Fee expenses and commissions				-			(405)				(4,750)				21,562				(210)
Operating expenses				-			(2,374)				-			89				-
Other expenses				4				(664)				(337,158)				(12,042)				(9)

54

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

		For the nine months ended September 30, 2019
		Individuals								Entity
		Individuals													Entities with
		with		Key							Entities
						Associates and						significant
		control		management						controlled by
						joint ventures						influence by
		over Grupo		personnel						individuals
												individuals
		Aval
Interest income	Ps.	140	Ps.	536	Ps.	33,349	Ps.	66,826		Ps.	5,855
Fee income and commissions		15		41				25,836		85,019			4
Leases		-		-				-		241				-
Other income		5		147				200,118		4,371			511
Financial expenses		(144)		(782)				(882)		(15,026)			(24)
Fee expenses and commissions		(2)		(1,106)				(15,137)		(1,499)			(300)
Operating expenses		-		(5,893)				-		(2,098)				-
Other expenses		(2)		(1,453)				(355,312)		(30,896)			(9)
		For the quarter ended September 30, 2018
		Individuals								Entity
		Individuals													Entities with
		with		Key							Entities
						Associates and						significant
		control		management						controlled by
						joint ventures						influence by
		over Grupo		personnel						individuals
												individuals
		Aval
Interest income	Ps.	54	Ps.	278	Ps.	(4,420)	Ps.	32,163		Ps.	(3,828)
Fee income and commissions		1		16				(3,408)		16,138			(1)
Leases		-		-				(141)		54				-
Other income		-		35				62,804		1,430				-
Financial expenses		(36)		(266)				33,524		(2,270)			423
Fee expenses and commissions		113		833				(5,239)		(423)			(5)
Operating expenses		-		(842)				(12)		522				-
Other expenses		373		760				(8,723)		(5,908)				-

55

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

		For the nine months ended September 30, 2018
		Individuals						Entity
		Individuals									Entities with
		with	Key					Entities
				Associates and			significant
		control	management				controlled by
				joint ventures			influence by
		over Grupo	personnel				individuals
							individuals
		Aval
Interest income	Ps.	165 Ps.	664	Ps.	29,934	Ps.	97,610	Ps.	207
Fee income and commissions		4		45			6,048		46,766		-
Leases		-	-			33		233		-
Other income		2		173			190,745		3,618		-
Financial expenses		(170)		(642)			(656)		(13,088)		(17)
Fee expenses and commissions		(3)		(903)			(12,512)		(1,370)		(5)
Operating expenses		-	(8,058)			(35)		(1,282)		-
Other expenses		(11)		(1,556)			(26,828)		(20,207)		-

Expenses during the current period were recognized with respect to uncollectible or doubtful accounts related to amounts in debt by related parties of Ps. 322,568.

Compensation of Key Management Personnel

The compensation received by the key personnel of the management comprises the following:

		Three-month ended in		Nine-months ended in
		September 30,		September 30,		September 30,			September 30,
		2019		2018		2019			2018
Salaries	Ps.	4,145	Ps.	4,579	Ps.	13,118	Ps.	13,469
Short term benefits for employees		2,381		1,023		3,843			2,480
Total		6,526		5,602		16,961			15,949

56

Grupo Aval Acciones y Valores S.A. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Figures in millions of Colombian pesos)

NOTE 22 - SUBSEQUENT EVENTS

As of the date of issuance of the condensed consolidated financial statements, no subsequent events are known that need to be disclosed in the financial statements

57