UPDATE 1-Grupo Aval profits fall 73% in first quarter on macroeconomic woes

(Adds details on hit to loan portfolio in paragraphs 5-6, background on Colombia's economy)

May 14 (Reuters) - Colombian financial conglomerate Grupo Aval posted on Tuesday a 73.2% slide in its first quarter net profit to reach 113.7 billion pesos ($29.6 million), as high interest rates and a weak economy hit the quality of its loan portfolio.

In a bright spot, the company's interest income in the first three months of this year edged up 3.3% to total 7.2 trillion pesos, according to its quarterly report.

Grupo Aval's holdings include Colombian banks Banco de Bogota, Banco Popular, Banco AV Villas , Banco de Occidente, Corporacion Financiera Colombiana and pension fund Porvenir.

Net interest income, the difference between what banks earn on loans and dole out in deposits, decreased 49 basis points to settle at 3.4% due to a lower returns on investments.

In its earnings report, the conglomerate specified that its cost of risk in the January-to-March period stood at 2.9%, up from 1.7% in the same quarter last year.

Grupo Aval further explained that the quality of its loan portfolio on a +90 payday loans basis deteriorated 17 basis points.

Return on average equity (ROAE) for the quarter, meanwhile, dropped to 2.7% from 10.4% year-on-year.

Colombia's central bank cut its benchmark interest rate late last month to 11.75%, its fourth cut since December aimed at boosting the economy.

Earlier this month, the central bank slightly raised its inflation forecast for this year to 5.5% from 5.4%, while also raising its 2024 economic growth forecast to 1.4% from an earlier estimate of a 1.1% expansion. ($1 = 3,845.5000 Colombian pesos) (Reporting by Valentine Hilaire and Marion Giraldo; Editing by David Alire Garcia)