Jason Mollin's questions to Grupo Aval Acciones Y Valores (AVAL) leadership • Q3 2016
Question
Jason Mollin from Scotiabank asked for potential bullish and bearish scenarios for the 2017 Return on Equity (ROE) given the pending fiscal reform, and inquired about the sensitivity of the company's operations to policy interest rate changes in both Colombia and the United States.
Answer
CFO Diego Solano responded that the company does not foresee a downside scenario for ROE from the tax reform, stating that all proposed changes are positive and the main uncertainty is the speed of implementation. President and CEO Luis Carlos Sarmiento added that for every 100 basis point change in Colombia's policy rate, the sensitivity is about 15 to 20 basis points on NIM. He also clarified that Central American operations are more influenced by local currency dynamics than by the U.S. policy rate.