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Adds information about Colombia's economy in paragraph 7 and 8

March 5 (Reuters) - Colombian financial conglomerate Grupo Aval posted a year-over-year rise in net profit in the fourth quarter, a securities filing showed on Tuesday, as their investment portfolio experienced positive returns in line with positive financial markets performance.

Net profit came in at 82.9 billion Colombian pesos ($21.03 million), in the October through December period.

Meanwhile, the conglomerate reported interest income in the period up to 20.8% 7.42 trillion pesos.

However, net interest income came in at 1.53 trillion, down 13.3% from a year earlier.

The company said the Colombian peso appreciated 20.5% relative to the US dollar over the year.

"This context reflected an under-par year for our business" it said in a statement.

Colombia's central bank began a monetary easing cycle late last year and cut its benchmark interest rate to 12.75% at the end of January after what Grupo Aval called a "significant slowdown" in the economy in 2023.

The Colombian economy expanded 0.6% last year, compared to growth of 7.3% in 2022. The government expects growth of 1.5% this year while the International Monetary Fund sees expansion of 1.3% in Latin America's fourth-largest economy.

Although Grupo Aval's non-financial sector business was a strong contributor to the positive results, it fell in 2023 by 29.2% when compared with 2022 to 797.3 billion pesos.

The financial portfolio of Grupo Aval GAA.CN includes Colombian banks Banco de Bogota BBO.CN, Banco Popular BPO.CN, Banco AV Villas VLL.CN and Banco de Occidente BOC.CN.

($1 = 3,942.2100 Colombian pesos)

(Reporting by Natalia Siniawski; editing by Jason Neely, Louise Heavens and David Evans)

((natalia.siniawski@thomsonreuters.com;))

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