Daniel Mora A., equity research senior analyst for Andean banks at Credicorp Capital in Bogotá: “In the second quarter, Grupo Aval reported a negative impact of 102.5 billion Colombian pesos related to the resolution agreements of Corficolombiana with the U.S. Department of Justice and the Securities and Exchange Commission. Beyond the legal process, Aval’s results were pressured by two trends that are affecting most Colombian banks: pressures in margins and higher provision expenses. Regarding margins, banks have suffered pressures in the cost of funds driven by the increase of interest rates to levels not seen since the 1990s, the shift of demand deposits to term deposits, which are more expensive, and the compliance of the net stable funding ratio under Basel III standards. As a result, most banks have faced compressions of margins this year as the liabilities are capturing the increase in rates faster than assets. This impact is amplified by…”