FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of February, 2014
Commission File Number 001-15266
BANK OF CHILE
(Translation of registrants name into English)
Paseo Ahumada 251
Santiago, Chile
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1):o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7):o
Indicate by check mark whether by furnishing the information contained in this Form, the
registrant is also thereby furnishing the information to the Commission pursuant to Rule
12g3-2(b) under the Securities Exchange Act of 1934.
Yes o No x
If Yes is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-
BANCO DE CHILE
REPORT ON FORM 6-K
Attached Banco de Chiles Consolidated Financial Statements with notes for the period 2013.
Consolidated Financial Statements
BANCO DE CHILE AND SUBSIDIARIES
Santiago, Chile
December 31, 2013 and 2012
Consolidated Financial Statements
BANCO DE CHILE AND SUBSIDIARIES
December 31, 2013 and 2012
(Translation of consolidated financial statements originally issued in Spanish)
Index
I. |
Report of Independent Registered Public Accounting Firm |
II. |
Consolidated Statements of Financial Position |
III. |
Consolidated Statements of Income |
IV. |
Consolidated Statements of Other Comprehensive Income |
V. |
Consolidated Statements of Changes in Equity |
VI. |
Consolidated Statements of Cash Flows |
VII. |
Notes to the Consolidated Financial Statements |
Ch$ or CLP |
= |
Chilean pesos |
MCh$ |
= |
Millions of Chilean pesos |
US$ or USD |
= |
U.S. dollars |
ThUS$ |
= |
Thousands of U.S. dollars |
JPY |
= |
Japanese yen |
EUR |
= |
Euro |
MXN |
= |
Mexican pesos |
HKD |
= |
Hong Kong dollars |
PEN |
= |
Peruvian nuevo sol |
CHF |
= |
Swiss franc |
U.F. or CLF |
= |
Unidad de fomento |
|
|
(The unidad de fomento is an inflation-indexed, Chilean peso denominated monetary unit set daily in advance on the basis of the previous months inflation rate). |
|
|
|
IFRS |
= |
International Financial Reporting Standards |
IAS |
= |
International Accounting Standards |
RAN |
= |
Compilation of Standards of the Chilean Superintendency of Banks |
IFRIC |
= |
International Financial Reporting Interpretations Committee |
SIC |
= |
Standards Interpretation Committee |
BANCO DE CHILE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
For the years ended December 31, 2013 and 2012
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
BANCO DE CHILE AND SUBSIDIARIES
|
|
Page |
4 | ||
5 | ||
7 | ||
8 | ||
9 | ||
10 | ||
46 | ||
52 | ||
54 | ||
59 | ||
63 | ||
64 | ||
65 | ||
68 | ||
75 | ||
76 | ||
84 | ||
86 | ||
89 | ||
92 | ||
94 | ||
98 | ||
99 | ||
99 | ||
100 | ||
102 | ||
106 | ||
106 | ||
110 | ||
111 | ||
116 | ||
122 | ||
125 | ||
126 | ||
126 | ||
127 | ||
128 | ||
129 | ||
130 | ||
131 | ||
132 | ||
133 | ||
138 | ||
149 | ||
151 | ||
181 |
The accompanying notes 1 to 43 form an
integral part of these consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
For the years ended December 31, 2013 and 2012
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
|
Notes |
|
2013 |
|
2012 |
|
|
|
|
MCh$ |
|
MCh$ |
|
ASSETS |
|
|
|
|
|
|
Cash and due from banks |
7 |
|
873,308 |
|
684,925 |
|
Transactions in the course of collection |
7 |
|
374,471 |
|
396,611 |
|
Financial assets held-for-trading |
8 |
|
393,134 |
|
192,724 |
|
Cash collateral on securities borrowers and reverse repurchase |
9 |
|
82,422 |
|
35,100 |
|
Derivative instruments |
10 |
|
374,688 |
|
329,497 |
|
Loans and advances to banks |
11 |
|
1,062,056 |
|
1,343,322 |
|
Loans to customers, net |
12 |
|
20,389,033 |
|
18,334,330 |
|
Financial assets available-for-sale |
13 |
|
1,673,704 |
|
1,264,440 |
|
Financial assets held-to-maturity |
13 |
|
|
|
|
|
Investments in other companies |
14 |
|
16,670 |
|
13,933 |
|
Intangible assets |
15 |
|
29,671 |
|
34,290 |
|
Property and equipment |
16 |
|
197,578 |
|
205,189 |
|
Current tax assets |
17 |
|
3,202 |
|
2,684 |
|
Deferred tax assets |
17 |
|
145,904 |
|
127,143 |
|
Other assets |
18 |
|
318,029 |
|
296,878 |
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
|
25,933,870 |
|
23,261,066 |
|
LIABILITIES |
|
|
|
|
|
|
Current accounts and other demand deposits |
19 |
|
5,984,332 |
|
5,470,971 |
|
Transactions in the course of payment |
7 |
|
126,343 |
|
159,218 |
|
Cash collateral on securities lent and repurchase agreements |
9 |
|
256,766 |
|
226,396 |
|
Savings accounts and time deposits |
20 |
|
10,402,725 |
|
9,612,950 |
|
Derivative instruments |
10 |
|
445,132 |
|
380,322 |
|
Borrowings from financial institutions |
21 |
|
989,465 |
|
1,108,681 |
|
Debt issued |
22 |
|
4,366,960 |
|
3,273,933 |
|
Other financial obligations |
23 |
|
210,926 |
|
162,123 |
|
Current tax liabilities |
17 |
|
10,333 |
|
25,880 |
|
Deferred tax liabilities |
17 |
|
36,569 |
|
27,630 |
|
Provisions |
24 |
|
551,898 |
|
504,837 |
|
Other liabilities |
25 |
|
268,105 |
|
301,066 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
|
23,649,554 |
|
21,254,007 |
|
|
|
|
|
|
|
|
EQUITY |
27 |
|
|
|
|
|
Attributable to equity holders of the parent: |
|
|
|
|
|
|
Capital |
|
|
1,849,351 |
|
1,629,078 |
|
Reserves |
|
|
213,636 |
|
175,814 |
|
Other comprehensive income |
|
|
15,928 |
|
18,935 |
|
Retained earnings: |
|
|
|
|
|
|
Retained earnings from previous periods |
|
|
16,379 |
|
16,379 |
|
Income for the year |
|
|
513,602 |
|
467,610 |
|
Less: |
|
|
|
|
|
|
Provision for minimum dividends |
|
|
(324,582 |
) |
(300,759 |
) |
Subtotal |
|
|
2,284,314 |
|
2,007,057 |
|
Non-controlling interests |
|
|
2 |
|
2 |
|
|
|
|
|
|
|
|
TOTAL EQUITY |
|
|
2,284,316 |
|
2,007,059 |
|
TOTAL LIABILITIES AND EQUITY |
|
|
25,933,870 |
|
23,261,066 |
|
The accompanying notes 1 to 43 form an
integral part of these consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
for the years ended December 31, 2013 and 2012
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
|
|
Notes |
|
2013 |
|
2012 |
|
|
|
|
|
MCh$ |
|
MCh$ |
|
Interest revenue |
|
28 |
|
1,763,540 |
|
1,661,467 |
|
Interest expense |
|
28 |
|
(704,371 |
) |
(708,629 |
) |
Net interest income |
|
|
|
1,059,169 |
|
952,838 |
|
|
|
|
|
|
|
|
|
Income from fees and commissions |
|
29 |
|
386,733 |
|
372,767 |
|
Expenses from fees and commissions |
|
29 |
|
(99,639 |
) |
(85,495 |
) |
Net fees and commission income |
|
|
|
287,094 |
|
287,272 |
|
|
|
|
|
|
|
|
|
Net financial operating income |
|
30 |
|
11,084 |
|
24,747 |
|
Foreign exchange transactions, net |
|
31 |
|
71,457 |
|
35,136 |
|
Other operating income |
|
36 |
|
27,221 |
|
22,061 |
|
Total operating revenues |
|
|
|
1,456,025 |
|
1,322,054 |
|
|
|
|
|
|
|
|
|
Provisions for loan losses |
|
32 |
|
(241,613 |
) |
(188,190 |
) |
OPERATING REVENUES, NET OF PROVISIONS FOR LOAN LOSSES |
|
|
|
1,214,412 |
|
1,133,864 |
|
|
|
|
|
|
|
|
|
Personnel expenses |
|
33 |
|
(323,236 |
) |
(309,865 |
) |
Administrative expenses |
|
34 |
|
(252,501 |
) |
(247,459 |
) |
Depreciation and amortization |
|
35 |
|
(28,909 |
) |
(30,957 |
) |
Impairment |
|
35 |
|
(2,247 |
) |
(899 |
) |
Other operating expenses |
|
37 |
|
(16,051 |
) |
(22,454 |
) |
TOTAL OPERATING EXPENSES |
|
|
|
(622,944 |
) |
(613,834 |
) |
|
|
|
|
|
|
|
|
NET OPERATING INCOME |
|
|
|
591,468 |
|
522,230 |
|
|
|
|
|
|
|
|
|
Income attributable to associates |
|
14 |
|
2,071 |
|
(229 |
) |
Income before income tax |
|
|
|
593,539 |
|
522,001 |
|
Income tax |
|
17 |
|
(79,936 |
) |
(54,390 |
) |
|
|
|
|
|
|
|
|
NET INCOME FOR THE YEAR |
|
|
|
513,603 |
|
467,611 |
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
Equity holders of the parent |
|
|
|
513,602 |
|
467,610 |
|
Non-controlling interests |
|
|
|
1 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
Ch$ |
|
Net income per share attributable to equity holders of the parent: |
|
|
|
|
|
|
|
Basic net income per share |
|
27 |
|
5.52 |
|
5.30 |
|
Diluted net income per share |
|
27 |
|
5.52 |
|
5.30 |
|
The accompanying notes 1 to 43 form an
integral part of these consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
for the years ended December 31, 2013 and 2012
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
|
|
Notes |
|
2013 |
|
2012 |
|
|
|
|
|
MCh$ |
|
MCh$ |
|
NET INCOME FOR THE YEAR |
|
|
|
513,603 |
|
467,611 |
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME THAT WILL BE RECLASIFFIED SUBSEQUENTLY TO PROFIT OR LOSS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains (losses): |
|
|
|
|
|
|
|
Net change in unrealized gains (losses) on available for sale instruments |
|
13 |
|
14,221 |
|
24,510 |
|
Gains and losses on derivatives held as cash flow hedges |
|
10 |
|
(18,069 |
) |
1,777 |
|
Cumulative translation adjustment |
|
|
|
71 |
|
(58 |
) |
Subtotal Other comprehensive income before income taxes that will be reclassified subsequently to profit or loss |
|
|
|
(3,777 |
) |
26,229 |
|
|
|
|
|
|
|
|
|
Income tax related to other comprehensive income that will be reclassified subsequently to profit or loss |
|
|
|
770 |
|
(5,220 |
) |
|
|
|
|
|
|
|
|
Total other comprehensive income items that will be reclassified subsequently to profit or loss |
|
|
|
(3,007 |
) |
21,009 |
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME THAT WILL NOT BE RECLASIFFIED SUBSEQUENTLY TO PROFIT OR LOSS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss in defined benefit plans |
|
|
|
(166 |
) |
(2,200 |
) |
|
|
|
|
|
|
|
|
Subtotal Other comprehensive income that will not be reclassified subsequently to profit or loss |
|
|
|
(166 |
) |
(2,200 |
) |
|
|
|
|
|
|
|
|
Income tax related to other comprehensive income that will not be reclassified subsequently to profit or loss |
|
|
|
33 |
|
440 |
|
|
|
|
|
|
|
|
|
Total other comprehensive income items that will not be reclassified subsequently to profit or loss |
|
|
|
(133 |
) |
(1,760 |
) |
|
|
|
|
|
|
|
|
TOTAL CONSOLIDATED COMPREHENSIVE INCOME |
|
|
|
510,463 |
|
486,860 |
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
Equity holders of the parent |
|
|
|
510,462 |
|
486,859 |
|
Non-controlling interest |
|
|
|
1 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ch$ |
|
Ch$ |
|
Comprehensive net income per share attributable to equity holders of the parent: |
|
|
|
|
|
|
|
Basic net income per share |
|
|
|
5.49 |
|
5.52 |
|
Diluted net income per share |
|
|
|
5.49 |
|
5.52 |
|
The accompanying notes 1 to 43 form an
integral part of these consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
for the years ended December 31, 2013 and 2012
(Translation of financial statements originally issued in Spanish)
(Expressed in millions of Chilean pesos)
|
|
|
|
|
|
Reserves |
|
Other comprehensive income |
|
Retained earnings |
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Retained |
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
earnings |
|
|
|
|
|
Attributable |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
Reserves |
|
gains (losses) |
|
Derivatives |
|
Cumulative |
|
from |
|
|
|
Provision for |
|
to equity |
|
Non- |
|
|
|
|
|
Notes |
|
Paid-in |
|
Other |
|
from |
|
on available- |
|
cash flow |
|
translation |
|
previous |
|
Income for |
|
minimum |
|
holders of the |
|
controlling |
|
Total |
|
|
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances as of December 31, 2011 |
|
|
|
1,436,083 |
|
32,256 |
|
87,226 |
|
(1,644 |
) |
(395 |
) |
(36 |
) |
16,379 |
|
428,805 |
|
(259,501 |
) |
1,739,173 |
|
2 |
|
1,739,175 |
|
Capitalization of retained earnings |
|
27 |
|
73,911 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(73,911 |
) |
|
|
|
|
|
|
|
|
Income retention (released) according to law |
|
|
|
|
|
|
|
58,092 |
|
|
|
|
|
|
|
|
|
(58,092 |
) |
|
|
|
|
|
|
|
|
Defined benefit plans adjustment |
|
4 |
|
|
|
(1,760 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,760 |
) |
|
|
(1,760 |
) |
Paid and distributed dividends |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(296,802 |
) |
259,501 |
|
(37,301 |
) |
(1 |
) |
(37,302 |
) |
Other comprehensive income: |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative translation adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
(58 |
) |
|
|
|
|
|
|
(58 |
) |
|
|
(58 |
) |
Derivatives cash flow hedge, net |
|
|
|
|
|
|
|
|
|
|
|
1,429 |
|
|
|
|
|
|
|
|
|
1,429 |
|
|
|
1,429 |
|
Valuation adjustment on available-for-sale instruments (net) |
|
|
|
|
|
|
|
|
|
19,639 |
|
|
|
|
|
|
|
|
|
|
|
19,639 |
|
|
|
19,639 |
|
Subscription and payment of shares |
|
27 |
|
119,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
119,084 |
|
|
|
119,084 |
|
Income for the period 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
467,610 |
|
|
|
467,610 |
|
1 |
|
467,611 |
|
Provision for minimum dividends |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(300,759 |
) |
(300,759 |
) |
|
|
(300,759 |
) |
Balances as of December 31, 2012 |
|
|
|
1,629,078 |
|
30,496 |
|
145,318 |
|
17,995 |
|
1,034 |
|
(94 |
) |
16,379 |
|
467,610 |
|
(300,759 |
) |
2,007,057 |
|
2 |
|
2,007,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization of retained earnings |
|
27 |
|
86,202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(86,202 |
) |
|
|
|
|
|
|
|
|
Income distribution |
|
|
|
|
|
1,760 |
|
|
|
|
|
|
|
|
|
|
|
(1,760 |
) |
|
|
|
|
|
|
|
|
Income retention (released) according to law |
|
|
|
|
|
|
|
36,193 |
|
|
|
|
|
|
|
|
|
(36,193 |
) |
|
|
|
|
|
|
|
|
Defined benefit plans adjustment |
|
|
|
|
|
(133 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(133 |
) |
|
|
(133 |
) |
Equity adjustment investment in other companies |
|
|
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
2 |
|
Paid and distributed dividends |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(343,455 |
) |
300,759 |
|
(42,696 |
) |
(1 |
) |
(42,697 |
) |
Other comprehensive income: |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative translation adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
71 |
|
|
|
|
|
|
|
71 |
|
|
|
71 |
|
Derivatives cash flow hedge, net |
|
|
|
|
|
|
|
|
|
|
|
(14,455 |
) |
|
|
|
|
|
|
|
|
(14,455 |
) |
|
|
(14,455 |
) |
Valuation adjustment on available-for-sale instruments (net) |
|
|
|
|
|
|
|
|
|
11,377 |
|
|
|
|
|
|
|
|
|
|
|
11,377 |
|
|
|
11,377 |
|
Subscription and payment of shares |
|
27 |
|
134,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
134,071 |
|
|
|
134,071 |
|
Income for the period 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
513,602 |
|
|
|
513,602 |
|
1 |
|
513,603 |
|
Provision for minimum dividends |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(324,582 |
) |
(324,582 |
) |
|
|
(324,582 |
) |
Balances as of December 31, 2013 |
|
|
|
1,849,351 |
|
32,125 |
|
181,511 |
|
29,372 |
|
(13,421 |
) |
(23 |
) |
16,379 |
|
513,602 |
|
(324,582 |
) |
2,284,314 |
|
2 |
|
2,284,316 |
|
The accompanying notes 1 to 43 form an
integral part of these consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended December 31, 2013 and 2012
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
|
|
Notes |
|
2013 |
|
2012 |
|
|
|
|
|
MCh$ |
|
MCh$ |
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
Net income for the year |
|
|
|
513,603 |
|
467,611 |
|
Items that do not represent cash flows: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
35 |
|
28,909 |
|
30,957 |
|
Impairment of intangibles assets and property and equipment |
|
35 |
|
2,247 |
|
899 |
|
Provision for loan losses, net of recoveries |
|
32 |
|
262,467 |
|
225,631 |
|
Provision of contingent loans |
|
32 |
|
12,692 |
|
1,251 |
|
Fair value adjustment of financial assets held-for-trading |
|
|
|
(1,612 |
) |
931 |
|
(Income) loss attributable to investments in other companies |
|
14 |
|
(1,780 |
) |
468 |
|
(Income) loss sales of assets received in lieu of payment |
|
36 |
|
(6,126 |
) |
(5,674 |
) |
(Income) loss on sales of property and equipment |
|
36 - 37 |
|
(219 |
) |
(318 |
) |
(Increase) decrease in other assets and liabilities |
|
|
|
(42,730 |
) |
34,555 |
|
Charge-offs of assets received in lieu of payment |
|
37 |
|
1,891 |
|
2,600 |
|
Other credits (debits) that do not represent cash flows |
|
|
|
9,890 |
|
5,174 |
|
(Gain) loss from foreign exchange transactions of other assets and other liabilities |
|
|
|
(148,118 |
) |
37,133 |
|
Net changes in interest and fee accruals |
|
|
|
29,324 |
|
4,049 |
|
Changes in assets and liabilities that affect operating cash flows: |
|
|
|
|
|
|
|
(Increase) decrease in loans and advances to banks, net |
|
|
|
281,524 |
|
(695,376 |
) |
(Increase) decrease in loans to customers, net |
|
|
|
(2,259,317 |
) |
(1,529,338 |
) |
(Increase) decrease in financial assets held-for-trading, net |
|
|
|
(165,629 |
) |
52,892 |
|
(Increase) decrease in deferred taxes, net |
|
17 |
|
(12,381 |
) |
(11,657 |
) |
Increase (decrease)in current account and other demand deposits |
|
|
|
512,875 |
|
576,301 |
|
Increase (decrease) in payables from repurchase agreements and security lending |
|
|
|
33,016 |
|
(15,277 |
) |
Increase (decrease) in savings accounts and time deposits |
|
|
|
797,009 |
|
327,980 |
|
Proceeds from sale of assets received in lieu of payment |
|
|
|
8,454 |
|
9,510 |
|
Total cash flows provided by (used in) operating activities |
|
|
|
(144,011 |
) |
(479,698 |
) |
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
(Increase) decrease in financial assets available-for-sale |
|
|
|
(367,258 |
) |
295,572 |
|
Purchases of property and equipment |
|
16 |
|
(12,249 |
) |
(17,981 |
) |
Proceeds from sales of property and equipment |
|
|
|
505 |
|
400 |
|
Purchases of intangible assets |
|
15 |
|
(5,511 |
) |
(9,116 |
) |
Investments in other companies |
|
14 |
|
(1,440 |
) |
(71 |
) |
Dividends received from investments in other companies |
|
14 |
|
956 |
|
943 |
|
Total cash flows provided by (used in) investing activities |
|
|
|
(384,997 |
) |
269,747 |
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
Increase in mortgage finance bonds |
|
|
|
|
|
|
|
Repayment of mortgage finance bonds |
|
|
|
(20,734 |
) |
(27,529 |
) |
Proceeds from bond issuances |
|
22 |
|
1,607,265 |
|
1,233,985 |
|
Redemption of bond issuances |
|
|
|
(536,823 |
) |
(389,382 |
) |
Proceeds from subscription and payment of shares |
|
27 |
|
134,071 |
|
119,084 |
|
Dividends paid |
|
27 |
|
(343,455 |
) |
(296,802 |
) |
Increase (decrease) in borrowings from financial institutions |
|
|
|
(323,055 |
) |
142,573 |
|
Increase (decrease) in other financial obligations |
|
|
|
54,074 |
|
(16,512 |
) |
Increase (decrease) in Borrowings from Central Bank |
|
|
|
|
|
(22,793 |
) |
Proceeds from borrowings with Central Bank of Chile (long-term) |
|
|
|
|
|
20 |
|
Payment of borrowings from Central Bank (long-term) |
|
|
|
(7 |
) |
(56 |
) |
Proceeds from foreign borrowings |
|
|
|
844,776 |
|
325,247 |
|
Payment of foreign borrowings |
|
|
|
(639,571 |
) |
(1,013,911 |
) |
Proceeds from other long-term borrowings |
|
|
|
609 |
|
1,526 |
|
Payment of other long-term borrowings |
|
|
|
(6,285 |
) |
(7,363 |
) |
Total cash flows provided by (used in) financing activities |
|
|
|
770,865 |
|
48,087 |
|
|
|
|
|
|
|
|
|
TOTAL NET POSITIVE (NEGATIVE) CASH FLOWS FOR THE YEAR |
|
|
|
241,857 |
|
(161,864 |
) |
Net effect of exchange rate changes on cash and cash equivalents |
|
|
|
60,437 |
|
(31,720 |
) |
Cash and cash equivalents at beginning of year |
|
|
|
1,236,324 |
|
1,429,908 |
|
Cash and cash equivalents at end of year |
|
7 |
|
1,538,618 |
|
1,236,324 |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Operating cash flow of Interest: |
|
|
|
|
|
Interest received |
|
1,669,559 |
|
1,614,122 |
|
Interest paid |
|
(581,066 |
) |
(657,235 |
) |
The accompanying notes 1 to 43 form an
integral part of these consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and 2012
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
Banco de Chile is authorized to operate as a commercial bank from September 17, 1996, and according to the Article 25 of the Law 19.396 is the legal continuer of the Banco de Chile, which in turn resulted from the merger between Banco Nacional of Chile, Banco Agricola y Banco de Valparaiso. Banco de Chile was formed on October 28, 1893, granted in front of the Public Notary of Santiago Mr. Eduardo Reyes Lavalle, authorized by Supreme Decree of November 28, 1893.
Banco de Chile (Banco de Chile or the Bank) is a Corporation organized under the laws of the Republic of Chile, regulated by the Superintendency of Banks and Financial Institutions (SBIF or Superintendencia). Since 2001, - when the bank was first listed on the New York Stock Exchange (NYSE), in the course of its American Depository Receipt (ADR) program, which is also registered at the London Stock Exchange Banco de Chile additionally follows the regulations published by the United States Securities and Exchange Commission (SEC).
Banco de Chile offers a broad range of banking services to its customers, ranging from individuals to large corporations. The services are managed in large corporate banking, middle and small corporate banking, personal banking services and retail. Additionally, the Bank offers international as well as treasury banking services. The Banks subsidiaries provide other services including securities brokerage, mutual fund and investment management, insurance brokerage, financial advisory and securitization.
Banco de Chiles legal domicile is Paseo Ahumada 251, Santiago, Chile and its Web site is www.bancochile.cl.
The consolidated financial statements of the Bank for the year ended December 31, 2013 were authorized for issuance in accordance with the directors resolution on January 30, 2014.
For convenience of reader, these financial statements and their accompanying notes have been translated from Spanish to English. Certain accounting practices applied by the Bank that conform to rules issued by the Chilean Superintendency of Banks (SBIF) may not conform to generally accepted accounting principles in the United States (US GAAP) or to International Financial Reporting Standards (IFRS).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles:
(a) Basis of preparation:
Legal provisions
The General Banking Law in its Article No. 15 authorizes the Chilean Superintendency of Banks (SBIF) to issue generally applicable accounting standards for entities it supervises. The Corporations Law, in turn, requires generally accepted accounting principles to be followed.
Based on the aforementioned laws, banks should use the criteria provided by the Superintendency in accordance with the Compendium of Accounting Standards, and any matter not addressed therein, as long as it does not contradict its instructions, should adhere to generally accepted accounting principles in technical standards issued by the Chilean Association of Accountants, that coincide with International Accounting Standards and International Financial Reporting Standards agreed upon by the International Accounting Standards Board (IASB). Should there be discrepancies between these generally accepted accounting principles and the accounting criteria issued by the SBIF, these shall prevail.
(b) Basis of consolidation:
The financial statements of Banco de Chile as of December 31, 2013 and 2012 have been consolidated with its Chilean subsidiaries and foreign subsidiary using the global integration method (line-by-line). They include preparation of individual financial statements of the Bank and companies that participate in the consolidation, and it include adjustments and reclassifications necessary to homologue accounting policies and valuation criteria applied by the Bank. The Consolidated Financial Statements have been prepared using the same accounting policies for similar transactions and other events in equivalent circumstances.
Significant intercompany transactions and balances (assets, liabilities, equity, income, expenses and cash flows) originated in operations performed between the Bank and its subsidiaries and between subsidiaries have been eliminated in the consolidation process. The non-controlling interest corresponding to the participation percentage of third parties in subsidiaries, which the Bank does not own directly or indirectly, has been recognized and is shown separately in the consolidated shareholders equity of Banco de Chile.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(b) Basis of consolidation, continued:
(i) Subsidiaries
Consolidated financial statements as of December 31, 2013 and 2012 incorporate financial statements of the Bank and its subsidiaries. According IFRS 10 Consolidated Financial Statements, control requires exposure or rights to variable returns and the ability to affect those returns through power over an investee. Specifically the Bank controls an investee if and only if the investor has all of the following elements:
I. power over the investee, i.e. the investor has existing rights that give it the ability to direct the relevant activities;
II. exposure, or rights, to variable returns from its involvement with the investee; and
III. the ability to use its power over the investee to affect the amount of the investors returns.
When the Bank has less than a majority of the voting rights of an investee, but these voting rights are enough to have the ability to direct the relevant activities unilaterally, then conclude the Bank has control. The Bank considers all factors and relevant circumstances to evaluate if their voting rights are enough to obtain the control, which it includes:
· The amount of voting rights that the Bank has, related to the amount of voting rights of the others stakeholders.
· Potential voting rights maintained by the Bank, other holders of voting rights or other parties.
· Rights emanated from other contractual arrangements.
· Any additional circumstance that indicate that the Bank have or have not the ability to manage the relevant activities when that decisions need to be taken, including behavior patterns of vote in previous shareholders meetings.
The Bank reevaluates if it has or has not the control over an investee when the circumstances indicates that exists changes in one or more elements of control listed above.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
The entities controlled by the Bank and which form parts of the consolidation are detailed as follows:
|
|
|
|
|
|
|
|
Interest Owned |
| ||||||||||
|
|
|
|
|
|
Functional |
|
Direct |
|
Indirect |
|
Total |
| ||||||
RUT |
|
Subsidiaries |
|
Country |
|
Currency |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
|
|
|
|
|
|
% |
|
% |
|
% |
|
% |
|
% |
|
% |
|
44,000,213-7 |
|
Banchile Trade Services Limited |
|
Hong Kong |
|
US$ |
|
100.00 |
|
100.00 |
|
|
|
|
|
100.00 |
|
100.00 |
|
96,767,630-6 |
|
Banchile Administradora General de Fondos S.A. |
|
Chile |
|
Ch$ |
|
99.98 |
|
99.98 |
|
0.02 |
|
0.02 |
|
100.00 |
|
100.00 |
|
96,543,250-7 |
|
Banchile Asesoría Financiera S.A. |
|
Chile |
|
Ch$ |
|
99.96 |
|
99.96 |
|
|
|
|
|
99.96 |
|
99.96 |
|
77,191,070-K |
|
Banchile Corredores de Seguros Ltda. |
|
Chile |
|
Ch$ |
|
99.83 |
|
99.83 |
|
0.17 |
|
0.17 |
|
100.00 |
|
100.00 |
|
96,894,740-0 |
|
Banchile Factoring S.A.(*) |
|
Chile |
|
Ch$ |
|
|
|
99.75 |
|
|
|
0.25 |
|
|
|
100.00 |
|
96,571,220-8 |
|
Banchile Corredores de Bolsa S.A. |
|
Chile |
|
Ch$ |
|
99.70 |
|
99.70 |
|
0.30 |
|
0.30 |
|
100.00 |
|
100.00 |
|
96,932,010-K |
|
Banchile Securitizadora S.A. |
|
Chile |
|
Ch$ |
|
99.00 |
|
99.00 |
|
1.00 |
|
1.00 |
|
100.00 |
|
100.00 |
|
96,645,790-2 |
|
Socofin S.A. |
|
Chile |
|
Ch$ |
|
99.00 |
|
99.00 |
|
1.00 |
|
1.00 |
|
100.00 |
|
100.00 |
|
96,510,950-1 |
|
Promarket S.A. |
|
Chile |
|
Ch$ |
|
99.00 |
|
99.00 |
|
1.00 |
|
1.00 |
|
100.00 |
|
100.00 |
|
(*) See note No. 5 (j) about Relevant Events
(ii) Associates and Joint Ventures:
Associates
An associate is an entity over whose operating and financial management policy decisions the Bank has significant influence, without to have the control over the associate. Significant influence is generally presumed when the Bank holds between 20% and 50% of the voting rights. Other considered factors when determining whether the Bank has significant influence over another entity are the representation on the board of directors and the existence of material intercompany transactions. The existence of these factors could determine the existence of significant influence over an entity even though the Bank had participation less than 20% of the voting rights.
Investments in associates where exists significant influence, are accounted for using the equity method.
In accordance with the equity method, the Banks investments are initially recorded at cost, and subsequently increased or decreased to reflect the proportional participation of the Bank in the net income or loss of the associate and other movements recognized in its shareholders equity. Goodwill arising from the acquisition of an associate is included in the net book value, net of any accumulated impairment loss.
Joint Ventures
Joint Ventures are joint arrangements whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint control exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.
According IFRS 11, an entity shall be determining type of joint arrangement: Joint Operation or Joint Venture.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(b) Basis of consolidation, continued:
(ii) Associates and Joint Ventures, continued:
Joint Ventures, continued
For investments defined like Joint Operation, their assets, liabilities, income and expenses are recognised by their participation in joint operation.
For investments defined like Joint Venture, they will be registered according equity method.
Investments that, for their characteristics, are defined like Joint Ventures are the following:
· Artikos S.A.
· Servipag Ltda.
(iii) Shares or rights in other companies
These are entities in which the Bank does not have significant influence. They are presented at acquisition value (historical cost).
(iv) Special purpose entities
According to current regulation, the Bank must be analyzing continuously its consolidation area, considering that the principal criteria are the control that the Bank has in an entity and not its percentage of equity participation.
The Bank has securitized certain credits and have been transferred to its associate Banchile Securitizadora, which created the Segregated Equity No. 17, according established by Law 18,045 and Superintendencia de Valores y Seguros. The Bank has not maintained control thereon (see details in Note No. 12(h)). As of December 31, 2013 and 2012 the Bank does not control and has not created any SPEs.
(v) Fund management
The Bank manages assets maintained in common investment funds and other investment products on behalf of investors. Different entities which conform consolidation group of Banco de Chile (Banchile Administradora General de Fondos S.A. and Banchile Securitizador S.A) and owned by third parties are not included in Consolidated Statements of Financial Position, unless the Bank has the control. As of December 31, 2013 and 2012, the Bank does not control and hence, does not consolidate any of these funds.
Fees generates by this activity are included in the item Income from fees and commissions of Consolidates Statements of Comprehensive Income.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(c) Non-controlling interest
Non-controlling interest represents the share of losses, income and net assets that the Bank does not control, neither directly or indirectly. It is presented as a separate item in the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Financial Position.
(d) Use of estimates and judgment
The Consolidated Financial Statements include estimates made by the Senior Management of the Bank and of the consolidated entities to quantify certain of the assets, liabilities, income, expenses and commitments that are recorded in them. Basically, these estimates are made in function of the best information available, and refer to:
1. Goodwill valuation (Note No. 15);
2. Useful lives of property and equipment and intangible assets (Note No. 15 and No. 16);
3. Current taxes and deferred taxes (Note No.17);
4. Provisions (Note No. 24);
5. Contingencies and commitments (Note No. 26);
6. Provision for loan losses (Note No.11, Note No. 12 and Note No. 32);
7. Impairment of other financial assets (Note No. 35);
8. Fair value of financial assets and liabilities (Note No. 39)
During period 2013, the Bank has made a modification to the derivatives valuation model. This consists in the incorporation of Counterparty Value Adjustment (CVA) in the valuation of derivatives, to reflect the counterparty risk in determining the fair value. This valuation does not consider the credit risk of the issuer Debit Valuation Adjustment (DVA) in accordance with it was established by the SBIF. In accordance with IAS 8 Accounting Policies: Changes in Accounting Estimates and Errors, this modification has been treated as a change in accounting estimate and its effect recorded in earnings. The effect of this change involved a charge of income of Ch$16,413 million.
During the year ended December 31, 2013, there have been no other significant changes, different to it indicated above.
Estimates and relevant assumptions are regularly reviewed by the Banks Management to quantify certain assets, liabilities, income, expenses and commitments. The accounting estimations reviewed are recognised in the period in which the estimate is evaluated.
(e) Financial asset and liability valuation criteria:
Measurement is the process of determining the monetary amounts at which the elements of the financial statements are to be recognized and carried in the Statement of Financial Position and the Comprehensive Income. This involves selecting the particular basis or method of measurement.
In the Consolidated Financial Statements several measuring bases are used with different levels mixed among them. These bases or methods include the following:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(e) Financial asset and liability valuation criteria, continued:
(i) Initial recognition
The Bank and its subsidiaries recognize loans to customers, trading and investment securities, deposits, debt issued and subordinated liabilities and other assets o liabilities on the date of negotiation. Purchases and sales of financial assets performed on a regular basis are recognized as of the trade date on which the Bank committed to purchase or sell the asset.
(ii) Classification
Assets, liabilities and income accounts have been classified in conformity with standards issued by the Superintendency of Banks.
(iii) Derecognition
The Bank and its subsidiaries derecognize a financial asset (or where applicable part of a financial asset) from its Consolidated Statement of Financial Position when the contractual rights to the cash flows of the financial asset have expired or when the contractual rights to receive the cash flows of the financial asset are transferred during a transaction in which all ownership risks and rewards of the financial asset are transferred. Any portion of transferred financial assets that is created or retained by the Bank is recognized as a separate asset or liability.
When the Bank transfers a financial asset, it assesses to what extent it has retained the risks and rewards of ownership. In this case:
(a) If substantially all risks and rewards of ownership of the financial asset have been transferred, it is derecognized, and any rights or obligations created or retained upon transfer are recognized separately as assets or liabilities.
(b) If substantially all risks and rewards of ownership of the financial asset have been retained, the Bank continues to recognize it.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(e) Financial asset and liability valuation criteria, continued:
(iii) Derecognition, continued:
(c) If substantially all risks and rewards of ownership of the financial asset are neither transferred nor retained, the Bank will determine if it has retained control of the financial asset. In this case:
(i) If it has not retained control, the financial asset will be derecognized, and any rights or obligations created or retained upon transfer will be recognized separately as assets or liabilities.
(ii) If the entity has retained control, it will continue to recognize the financial asset in the Consolidated Financial Statement by an amount equal to its exposure to changes in value that can experience and recognize a financial liability associated to the transferred financial asset.
The Bank derecognizes a financial liability (or a portion thereof) from its Consolidated Statement of Financial Position if, and only if, it has extinguished or, in other words, when the obligation specified in the corresponding contract has been paid or settled or has expired.
(iv) Offsetting
Financial assets and liabilities are offset and the net amount is reported in the Statement of Financial Position if, and only if, the Bank has the legally enforceable right to set off the recognized amounts and there is an intention to settle on a net basis or to realize an asset and settle the liability simultaneously.
Income and expenses are shown net only if accounting standards allow such treatment, or in the case of gains and losses arising from a group of similar transactions such as the Banks trading activities.
(v) Valuation at amortized cost
Amortized cost is the amount at which a financial asset or liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortization (calculated using the effective interest rate method) of any difference between that initial amount and the maturity amount and minus any reduction for impairment.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(e) Financial asset and liability valuation criteria, continued:
(vi) Fair value measurements
Fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The most objective and common fair value is the price that you would pay on an active, transparent and deep market (quoted price or market price).
When available, the Bank estimates the fair value of an instrument using quoted prices in an active market for that instrument. A market is considered active if quoted prices are readily and regularly available and represent actual and regularly occurring market transactions on an arms length basis.
If a market for a financial instrument is not active, the Bank establishes fair value using a valuation technique. These valuation techniques include the use of recent market transactions between knowledgeable, willing parties in an arms length transaction, if available, as well as references to the fair value of other instruments that are substantially the same, discounted cash flows and options pricing models.
The chosen valuation technique use the maximum observable market data, relies as little as possible on estimates performed by the Bank, incorporates factors that market participants would consider in setting a price and is consistent with accepted economic methodologies for pricing financial instruments. Inputs into the valuation technique reasonably represent market expectations and include risk and return factors that are inherent in the financial instrument. Periodically, the Bank calibrates the valuation techniques and tests it for validity using prices from observable current market transaction in the same instrument or based on any available observable market data.
The best evidence of the fair value of a financial instrument at initial recognition is the transaction price (i.e. the fair value of the consideration given or received) unless the fair value of that instrument is evidenced by comparison with other observable current market transactions in the same instrument (i.e. without modification or repackaging) or based on a valuation technique whose variables include only data from observable markets. When transaction price provides the best evidence of fair value at initial recognition, the financial instrument is initially measured at the transaction price and any difference between this price and the value initially obtained from a valuation model is subsequently recognized in income depending on the individual facts and circumstances of the transaction.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(e) Financial asset and liability valuation criteria, continued:
(vi) Fair value measurements, continued:
Generally, the Bank has assets and liabilities that offset each others market risks. In these cases, average market prices are used as a basis for establishing these values.
Fair value estimates obtained from models are adjusted for any other factors, such as liquidity risk or model uncertainties; to the extent that the Bank believes that a third-party market participant would take them into account in pricing a transaction.
The available-for-sale instruments market valuation process consists in changing the rate from an average rate of sale (mid-rate) at the rate of sale of these instruments (offer-rate).
When the transaction price is different from the fair value derived from other observable current market transactions in the same instrument or based on a valuation technique whose variables include only data from observable markets, the Bank immediately recognizes the difference between the transaction price and fair value (a Day 1 profit or loss) in Net financial operating income. In cases where fair value is determined using data that is not observable, the difference between the transaction price and model value is only recognized in the Consolidated Statement of Comprehensive Income when the inputs become observable, or when the document is derecognized.
The Banks fair value disclosures are included in Note 39.
(f) Presentation and functional currency
The items included in the financial statements of each of the entities of Banco de Chile and its subsidiaries are valued using the currency of the primary economic environment in which it operates (functional currency). The functional currency of Banco de Chile is the Chilean peso, which is also the currency used to present the entitys consolidated financial statements, that is the currency of the primary economic environment in which the Bank operates, as well as obeying to the currency that influences in the costs and income structure.
(g) Transactions in foreign currency
Transactions in currencies other than the functional currency are considered to be in foreign currency and are initially recorded at the exchange rate of the functional currency on the transaction date. Monetary assets and liabilities denominated in foreign currencies are converted using the exchange rate of the functional currency as of the date of the Statement of Financial Position. All differences are recorded as a debit or credit to income.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(g) Transactions in foreign currency, continued:
Transactions in a currency other than the functional currency are considered in foreign currency and are initially recorded at the exchange rate of the currency at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are converted at the exchange rate of the functional currency at the date of the Statement of Financial Position. All differences are recorded as a charge or credit to income.
As of December 31, 2013, the Bank applied the exchange rate of accounting representation according to the standards issued by the Superintendency of Banks, where assets expressed in dollars are shown to their equivalent value in Chilean pesos calculated using the following exchange rate of Ch$525.72 to US$1. As of December 31, 2012, the Bank used the observed exchange rate equivalent to Ch$479.47 to US$1.
The gain of MCh$71,457 for net foreign exchange income (MCh$35,136 in 2012) shown in the Consolidated Statement of Comprehensive Income, includes recognition of the effects of exchange rate variations on assets and liabilities in foreign currency or indexed to exchange rates, and the result of foreign exchange transactions conducted by the Bank and its subsidiaries.
(h) Segment reporting:
The Banks operating segments are determined based on its different business units, considering the following factors:
(i) That it conducts business activities from which income is obtained and expenses are incurred (including income and expenses relating to transactions with other components of the same entity).
(ii) That its operating results are reviewed regularly by the entitys highest decision-making authority for operating decisions, to decide about resource allocation for the segment and evaluate its performance; and
(iii) That separate financial information is available.
(i) Cash and cash equivalents:
The Consolidated Statement of Cash Flows shows the changes in cash and cash equivalents derived from operating activities, investment activities and financing activities during the year. The indirect method has been used in the preparation of this statement.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(i) Cash and cash equivalents, continued:
For the preparation of Consolidated Financial Statements of Cash Flow it is considered the following concepts:
(i) Cash and cash equivalents correspond to Cash and Bank Deposits, plus (minus) the net balance of transactions in the course of collection that are shown in the Consolidated Statement of Financial Position, plus instruments held-for-trading and available-for-sale that are highly liquid and have an insignificant risk of change in value, maturing in less than three months from the date of acquisition, plus repurchase agreements that are in that situation. Also includes investments in fixed income mutual funds that are presented under Trading Instruments in the Consolidated Statement of Financial Position.
(ii) Operating activities: corresponds to normal activities of the Bank, as well as other activities that cannot classify like investing or financing activities.
(iii) Investing activities: correspond to the acquisition, sale or disposition other forms, of long-term assets and other investments that not include in cash and cash equivalent.
(iv) Financing activities: corresponds to the activities that produce changes in the amount and composition of the equity and the liabilities that are not included in the operating or investing activities.
(j) Financial assets held-for-trading:
Financial assets held-for-trading consist of securities acquired with the intention of generating profits as a result of short-term prices fluctuation or as a result of brokerage activities, or are part of a portfolio on which a short-term profit-generating pattern exists.
Financial assets held-for-trading are stated at their fair market value as of the Consolidated Statement of Financial Position date. Gains or losses from their fair market value adjustments, as well as gains or losses from trading activities, are included in Gains (losses) from trading and brokerage activities in the Consolidated Statement of Comprehensive Income. Accrued interest and revaluations are reported as Gains (losses) from trading and brokerage activities.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(k) Repurchase agreements and security lending and borrowing transactions:
The Bank engages in transactions with repurchase agreements as a form of investment. The securities purchased under these agreements are recognized on the Banks Consolidated Statement of Financial Position under Receivables from Repurchase Agreements and Security Lending, which is valued in accordance with the agreed-upon interest rate, through of method of amortised cost.
The Bank also enters into security repurchase agreements as a form of financing. Investments that are sold subject to a repurchase obligation and serve as collateral for borrowings are reclassified as Financial Assets held-for-trading or Available-for-sale Instruments. The liability to repurchase the investment is classified as Payables from Repurchase Agreements and Security Lending, which is valued in accordance with the agreed-upon interest rate.
As of December 31, 2013 and 2012 it not exist operations corresponding to securities lending.
(l) Derivative instruments:
The Bank maintains contracts of Derivative financial instruments, for cover the exposition of risk of foreign currency and interest rate. These contracts are recorded in the Consolidated Statement of Financial Position at their cost (included transactions costs) and subsequently measured at fair value. Derivative instruments are reported as an asset when their fair value is positive and as a liability when negative under the item Derivative Instruments.
Changes in fair value of derivative contracts held for trading purpose are included under Profit (loss) net of financial operations, in the Consolidated Statement of Comprehensive Income.
Certain embedded derivatives in other financial instruments are treated as separate derivatives when their risk and characteristics are not closely related to those of the main contract and if the contract in its entirety is not recorded at its fair value with its unrealized gains and losses included in income.
At the moment of subscription of a derivative contract must be designated by the Bank as a derivative instrument for trading or hedging purposes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(l) Derivative instruments, continued:
If a derivative instrument is classified as a hedging instrument, it can be:
(1) A hedge of the fair value of existing assets or liabilities or firm commitments, or
(2) A hedge of cash flows related to existing assets or liabilities or forecasted transactions.
A hedge relationship for hedge accounting purposes must comply with all of the following conditions:
(a) at its inception, the hedge relationship has been formally documented;
(b) it is expected that the hedge will be highly effective;
(c) the effectiveness of the hedge can be measured in a reasonable manner; and
(d) the hedge is highly effective with respect to the hedged risk on an ongoing basis and throughout the entire hedge relationship.
The Bank presents and measures individual hedges (where there is a specific identification of hedged item and hedged instruments) by classification, according to the following criteria:
Fair value hedges: changes in the fair value of a hedged instruments derivative, designed like fair value hedges, are recognised in income. Hedged item also is presented to fair value, related to the risk to be hedge. Gains or losses from fair value adjustments, both the hedged item and the derivative instrument, are recognized in income.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(l) Derivative instruments, continued:
Cash flow hedge: changes in the fair value of financial instruments derivative designated like cash flow hedge are recognised in Other Comprehensive Income, to the extent that hedge is effective and hedge is reclassified to income when hedged item affects such income. If the hedge is not effective, changes in fair value are recognised directly in income.
If the hedged instruments does not comply with criteria of hedge accounting of cash flow, it expires or is sold, it suspend or executed, this hedge must be discontinued prospectively. Accumulated gains or losses recognised previously in the equity are maintained there until projected transactions occur, in that moment will be registered in Consolidated Statement of Income, lesser than it foresees that the transaction will not execute, in this case it will be registered immediately in Consolidated Statement of Income.
(m) Loans to customers:
Loans to customers include originated and purchased non-derivative financial assets with fixed or determinable payments that are not quoted on an active market and which the Bank does not intend to sell immediately or in the short-term.
(i) Valuation method
Loans are initially measured at cost plus incremental transaction costs, and subsequently measured at amortized cost using the effective interest rate method, except when the Bank defined some loans as hedged items, which are measured at fair value, changes are recorded in the Consolidated Statement of Income, as described in letter (l) of this note.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(m) Loans to customers, continued:
(ii) Lease contracts:
Accounts receivable for leasing contracts, included under the caption Loans to customers are recorded MCh$1,209,747 as of December 31, 2013 (MCh$1,113,272 in 2012), correspond to periodic rent installments of contracts which meet the definition to be classified as financial leases and are presented at their nominal value net of unearned interest as of each year-end.
(iii) Factoring transactions:
The Bank carry out factoring transactions, where they receive invoices and other commercial instruments representative of credit, with or without recourse, and they advance to the assignor a percentage of the total amounts to be collected from the original debtor.
As of December 31, 2013, the item Loans to customers includes MCh$524,059 (MCh$606,137 in 2012), corresponding to the amount advanced to the assignor, plus accrued interest net of payments received.
In those cases where the transfer of these instruments it was made without responsibility of the grantor, the Bank assumes the default risk.
(iv) Impairment of loans
The impaired portfolio includes loans of debtors for which there is evidence that they will not fulfill some of their obligations on the agreed upon payment conditions without the possibility of recovering what is owed, having to recur to the guarantees, through exercising judicial payment actions or agreeing upon other conditions.
The following are certain situations that constitute evidence that the debtors will not fulfill their obligations with the Bank in accordance with what has been agreed upon, and that their loans are impaired:
· Financial difficulties evident of the debtor or significant worsening of their credit quality.
· Notorious indicators that the debtor will go into bankruptcy or into a forced restructuring of debts or that effectively bankruptcy or a similar measure has been filed in relation to their payment obligations, including delaying or non-payment of obligations.
· Forced restructuring of a loan due to economic or legal factors related to the debtor, whether by decreasing the payment obligation or delaying the principal, interest or commissions.
· The obligations of the debtor are negotiated with a significant loss due to the vulnerability of the debtors payment capacity.
· Adverse changes produced in the technological, market, economic or legal area in which the debtor operates, which potentially compromise the debtors payment capacity.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(m) Loans to customers, continued:
(iv) Impairment of loans, continued
In any case, when dealing with debtors subject to individual assessment, are considered in impaired portfolio all credits of debtors classified in some the Non-complying Loans categories, as well as in categories B3 and B4 of Substandard Portfolio. Also, being subject to assessment debtors group, the impaired portfolio includes all credits of the Non-complying loans.
The Bank incorporates the loans to impaired portfolio and keeps them in that portfolio, until it is not observed a normalization of the capacity or conduct of payment.
(v) Allowance for loan losses
Allowances are required to cover the risk of loan losses have been established in accordance with the instructions issued by the Superitendency of Banks. The loans are presented net of those allowances and, in the case of loans and in the case of contingent loans, they are shown in liabilities under Provisions.
In accordance with what is stipulated by the Superintendency of Banks, models or methods are used based on an individual and group analysis of debtors, to establish allowance for loan losses.
(v.i) Allowance for individual evaluations
An individual analysis of debtors is applied to individuals and companies that are of such significance with respect to size, complexity or level of exposure to the bank, that they must be analyzed in detail.
Likewise, the analysis of borrowers should focus on its ability to payment, to have sufficient and reliable information, and to analyze in regard to guarantees, terms, interest rates, currency and revaluation, etc.
For purposes of establish the allowances and before the assignment to one of three categories of loans portfolio: Normal, Substandard and Non-complying Loans, it must classify the debtors and their operations related to loans and contingent loans in the categories that apply.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(m) Loans to customers, continued:
(v) Allowance for loan losses, continued:
(vi) Allowance for individual evaluations, continued:
vi.1 Normal Loans and Substandard Loans:
Normal loans correspond to borrowers who are up to date on their payment obligations and show no sign of deterioration in their credit quality. Loans classified in categories A1 through A6.
Substandard loans includes all borrowers with insufficient payment capacity or significant deterioration of payment capacity that may be reasonably expected not to comply with all principal and interest payments obligations set forth in the credit agreement.
This category also includes all loans that have been non-performing for more than 30 days. Loans classified in this category are B1 through B4.
As a result of individual analysis of the debtors, the banks must classify them in the following categories, assigning, subsequently, the percentage of probability of default and loss given default resulting in the corresponding percentage of expected loss:
Classification |
|
Category |
|
Probability of |
|
Loss given |
|
Expected |
|
|
|
A1 |
|
0.04 |
|
90.0 |
|
0.03600 |
|
|
|
A2 |
|
0.10 |
|
82.5 |
|
0.08250 |
|
Normal Loans |
|
A3 |
|
0.25 |
|
87.5 |
|
0.21875 |
|
|
|
A4 |
|
2.00 |
|
87.5 |
|
1.75000 |
|
|
|
A5 |
|
4.75 |
|
90.0 |
|
4.27500 |
|
|
|
A6 |
|
10.00 |
|
90.0 |
|
9.00000 |
|
|
|
B1 |
|
15.00 |
|
92.5 |
|
13.87500 |
|
Substandard Loans |
|
B2 |
|
22.00 |
|
92.5 |
|
20.35000 |
|
|
|
B3 |
|
33.00 |
|
97.5 |
|
32.17500 |
|
|
|
B4 |
|
45.00 |
|
97.5 |
|
43.87500 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(m) Loans to customers, continued:
(v) Allowance for loan losses, continued:
(vi) Allowance for individual evaluations, continued:
vi.1 Normal Loans and Substandard Loans, continued:
Allowances for Normal and Substandard Loans
To determine the amount of allowances to be constitute for normal and substandard portfolio, previously should be estimated the exposure to subject to the allowances, which will be applied to respective expected loss (expressed in decimals), which consist of probability of default (PD) and loss given default (LGD) established for the category in which the debtor and/or guarantor belong, as appropriate.
The exposure affects to allowances applicable to loans plus contingent loans minus the amounts to be recovered by way of the foreclosure of guarantees. Loans means the book value of credit of the respective debtor, while for contingent loans, the value resulting from to apply the indicated in No.3 of Chapter B-3 of Compilation of Standards of the Chilean Superintendency of Banks (RAN).
The banks must use the following equation:
Provision = (ESA-GE) x (PD debtor /100)x(LGD debtor/100)+GE x(PD guarantor/100)x(LGD guarantor /100)
Where:
ESA |
= |
Exposure subject to allowances |
GE |
= |
Guaranteed exposure |
EAP |
= |
(Loans + Contingent Loans) Financial Guarantees |
However, independent of the results obtained from the equation above, the bank must be assigned a minimum provision level of 0.5% of the Normal Loans (including contingent loans).
vi.2 Non-complying Loans
The non-complying loans corresponds to borrowers and its credits whose payment capacity is seriously at risk and who have a high likelihood of filing for bankruptcy or are renegotiating credit terms to avoid bankruptcy. This category comprises all loans and contingent loans outstanding from debtors that have at least one installment payment of interest or principal overdue for 90 days or more. This group is composed of debtors belonging to categories C1 through C6 of the classification level and all loans, inclusive contingent loans, which maintain the same debtors.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(m) Loans to customers, continued:
(v) Allowance for loan losses, continued:
(vi) Allowance for individual evaluations, continued:
vi.2 Non-complying Loans, continued:
For purposes to establish the allowances on the non-complying loans, the Bank dispose the use of percentage of allowances to be applied on the amount of exposure, which corresponds to the amount of loans and contingent loans that maintain the same debtor. To apply that percentage, must be estimated a expected loss rate, less the amount of the exposure the recoveries by way of foreclosure of guarantees and, if there are available specific background, also must be deducting present value of recoveries obtainable exerting collection actions, net of expenses associated with them. This loss percentage must be categorized in one of the six levels defined by the range of expected actual losses by the Bank for all transactions of the same debtor.
These categories, their range of loss as estimated by the Bank and the percentages of allowance that definitive must be applied on the amount of exposures, are listed in the following table:
Type of Loan |
|
Classification |
|
Expected loss |
|
Allowance (%) |
|
|
|
C1 |
|
Up to 3% |
|
2 |
|
|
|
C2 |
|
More than 3% up to 20% |
|
10 |
|
Non-complying loans |
|
C3 |
|
More than 20% up to 30% |
|
25 |
|
|
|
C4 |
|
More than 30% up to 50% |
|
40 |
|
|
|
C5 |
|
More than 50% up to 80% |
|
65 |
|
|
|
C6 |
|
More than 80% |
|
90 |
|
For these loans, the expected loss must be calculated in the following manner:
Expected loss |
= |
(TE R) / TE |
Allowance |
= |
TE x (AP/100) |
Where:
TE |
= |
total exposure |
R |
= |
recoverable amount based on estimates of collateral value and collection efforts |
AP |
= |
allowance percentage (based on the category in which the expected loss should be classified). |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(m) Loans to customers, continued:
(v) Allowance for loan losses, continued:
(vii) Allowances for group evaluations
Group evaluations are relevant to address a large number of operations whose individual amounts are low or small companies. Such assessments, and the criteria for application, must be consistent with the transaction of give the credit.
Group evaluations requires the formation of groups of loans with similar characteristics in terms of type of debtors and conditions agreed, to establish technically based estimates by prudential criteria and following both the payment behavior of the group that concerned as recoveries of defaulted loans and consequently provide the necessary provisions to cover the risk of the portfolio.
Banks may use two alternative methods for determining provisions for retail loans that are evaluated as a group.
Under first method, it will be used the experience to explain the payment behavior of each homogeneous group of debtors and recoveries through collateral and of collection process, when it correspond, with objective of to estimate directly a percentage of expected losses that will be apply to the amount of the loans of respective group.
Under second method, the banks will segment to debtors in homogeneous groups, according described above, associating to each group a determined probability of default and a percentage of recovery based in a historic analysis. The amount of provisions to register it will be obtained multiplied the total loans of respective group by the percentages of estimated default and of loss given the default.
In both methods, estimated loss must be related with type of portfolio and terms of operations.
The Bank to determine its provisions has opted for using second method.
In the case of consumer loans are not considered collateral for purposes of estimating the expected loss.
Allowances are establish according with the results of the application of the methods used by the Bank, distinguishing between allowances over normal portfolio and over the non-complying loans, and those that protect the contingent credit risks associated with these portfolios.
The non-complying loans includes loans and contingent credits linked to debtors that have delay more than 90 days in the payment of interest or principal, including all their credits, even 100% of the amount of contingent credit, related to the same debtor has it .
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(m) Loans to customers, continued:
(viii) Charge-offs
Generally, the charge-offs are produced when the contractual rights on cash flows end. In case of loans, even if the above does not happen, it will proceed to charge-offs the respective asset balances.
The charge-off refers to derecognition of the assets in the Statement of Financial Position, related to the respective transaction and, therefore, the part that could not be past-due if a loan is payable in installments, or a lease.
The charge-off must be to make using credit risk provisions constituted, whatever the cause for which the charge-off was produced.
(viii.i) Charge-offs of loans to customers
Charge-off loans to customers, other than leasing operations, shall be made in accordance to the following circumstances occurs:
a) The Bank, based on all available information, concludes that will not obtain any cash flow of the credit recorded as an asset.
b) When the debt (without executive title, a collectability category pursuant to local law) meets 90 days since it was recorded as an asset.
a) At the time the term set by the statute of limitations runs out and as result legal actions are precluded in order to request payment through executive trial or upon rejection or abandonment of title execution issued by judicial and non-recourse resolution.
b) When past-due term of a transaction complies with the following:
Type of Loan |
|
Term |
Consumer loans - secured and unsecured |
|
6 months |
Other transactions - unsecured |
|
24 months |
Commercial loans - secured |
|
36 months |
Residential mortgage loans |
|
48 months |
The term represents the time elapsed since the date on which payment of all or part of the obligation in default became due.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(m) Loans to customers, continued:
(viii) Charge-offs, continued
(viii.ii) Charge-offs of lease operations
Assets for leasing operations must be charge-offs against the following circumstances, whichever occurs first:
a) The bank concludes that there is no possibility of the rent recoveries and the value of the property cannot be considered for purposes of recovery of the contract, either because the lessee have not the asset, for the propertys conditions, for expenses that involve its recovery, transfer and maintenance, due to technological obsolescence or absence of a history of your location and current situation.
b) When it complies the prescription term of actions to demand the payment through executory or upon rejection or abandonment of executory by court.
c) When past-due term of a transaction complies with the following:
Type of Loan |
|
Term |
Consumer leases |
|
6 months |
Other non-real estate lease transactions |
|
12 months |
Real estate leases (commercial or residential) |
|
36 months |
The term represents the time elapsed since the date on which payment of all or part of the obligation in default became due.
(vii) Loan loss recoveries
Cash recoveries on charge-off loans including loans that were reacquired from the Central Bank of Chile are recorded directly in income in the Consolidated Statement of Comprehensive Income, as a reduction of the Provisions for Loan Losses item.
In the event that there are recovery in assets, is recognized in income the revenues for the amount they are incorporated in the asset. The same criteria will be followed if the leased assets are recovered after the charge-off of a lease operation, to incorporate those to the asset.
(viii) Renegotiations of charge-off transactions
Any renegotiation of a charge-off loan it not recognize in income, while the operation continues to have deteriorated quality. Payments must be recognized as loan recoveries.
Therefore, renegotiated credit can be recorded as an asset only if it has not deteriorated quality; also recognizing revenue from activation must be recorded like recovery of loans.
The same criteria should apply in the case that was give credit to pay a charge-off loan.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(n) Financial assets held-to-maturity and available-for-sale:
Financial assets held-to-maturity includes only those securities for which the Bank has the ability and intention of keeping until maturity. The remaining investments are considered as financial assets available-for-sale. On an ongoing basis the Bank reassesses whether the ability and intention to sell available-for-sale instruments remains to be given.
Financial assets held-to-maturity are recorded at their cost plus accrued interest and indexations less impairment provisions made when the carrying amount exceeds the estimated recoverable amount.
A financial asset classified as available-for-sale is initially recognized at its fair value plus transaction costs that are directly attributable to the acquisition of the financial asset.
Financial assets available for sale are subsequently measured at their fair value based on market prices or valuation models. Unrealized gains or losses as a result of fair value adjustments are recorded in Other comprehensive income within Equity. When these investments are sold, the cumulative fair value adjustment existing within equity is recorded directly in income under Net financial operating income.
Interest and indexations of financial assets held-to-maturity and available-for-sale are included in the line item Interest revenue.
Investment securities, which are subject to hedge accounting, are adjusted according to the rules for hedge accounting as described in Note No. 2 (l).
As of December 31, 2013 and 2012, the Bank and its subsidiaries do not hold held to maturity instruments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(o) Intangible assets:
Intangible assets are identified as non-monetary assets (separately identifiable from other assets) without physical substance which arise as a result of a legal transaction or are developed internally by the consolidated entities. They are assets whose cost can be estimated reliably and from which the consolidated entities have control and consider it probable that future economic benefits will be generated.
Intangible assets are recorded initially at acquisition cost and are subsequently measured at cost less any accumulated amortization or any accumulated impairment losses.
(i) Goodwill
Goodwill arises on the acquisition of subsidiaries and associates representing the excess of the fair value of the purchase consideration and cost directly attributable to the acquisition over the net fair value of the Banks share of the identifiable assets acquired and the liabilities and contingent liabilities assumed on the date of the acquisition.
For the purpose of calculating goodwill, fair values of acquired assets, liabilities and contingent liabilities are determined by reference to market values or by discounting expected future cash flows to present value. This discounting is either performed using market rates or by using risk-free rates and risk-adjusted expected future cash flows.
Goodwill is presented at cost, less accumulated amortization in accordance with its remaining useful life.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(o) Intangible assets, continued:
(ii) Software or computer programs
Computer software purchased by the Bank and its subsidiaries is accounted for at cost less accumulated amortization and impairment losses.
The subsequent expense in software assets is capitalized only when it increases the future economic benefit for the specific asset. All other expenses are recorded as an expense as incurred.
Amortization is recorded in income using the straight-line amortization method based on the estimated useful life of the software, from the date on which it is available for use. The estimated useful life of software is a maximum of 6 years.
(iii) Other identifiable intangible assets
This item applies to identifiable intangible assets for which the cost can be reliably measured and which are likely to generate future economic benefits for the Bank.
(p) Property and equipment:
Property and equipment includes the amount of land, real estate, furniture, computer equipment and other installations owned by the consolidated entities, and which are for own use. These assets are stated at historical less depreciation and accumulated impairment.
This cost includes expenses than have been directly attributed to the assets acquisition.
Depreciation is recognized in income on a straight-line basis over the estimated useful lives of each part of an item of property and equipment.
Estimated useful lives for 2013 and 2012 are as follows:
Buildings |
|
50 years |
|
Installations |
|
10 years |
|
Equipment |
|
3 years |
|
Supplies and accessories |
|
5 years |
|
Maintenance expenses relating to those assets held for own uses are recorded as expenses in the period in which they are incurred.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(q) Deferred taxes and income taxes:
The income tax provision of the Bank and its subsidiaries has been determined in conformity with current legal provisions.
The Bank and its subsidiaries recognize, when appropriate, deferred tax assets and liabilities for future estimates of tax effects attributable to temporary differences between the book and tax values of assets and liabilities. Deferred tax assets and liabilities are measured based on the tax rate expected to be applied, in accordance with current tax law, in the year that deferred tax assets are realized or liabilities are settled. The effects of future changes in tax legislation or tax rates are recognized in deferred taxes starting on the date of publication of the law approving such changes.
Deferred tax assets and liabilities are recorded at their book value as of the date the deferred taxes are measured. Deferred tax assets are recognized only when it is likely that future tax profits will be sufficient to recover deductions for temporary differences. Deferred taxes are classified in conformity with established by Superintendency of Banks.
(r) Assets received in lieu of payment:
Assets received or awarded in lieu of payment of loans and accounts receivable from customers are recorded, in the case of assets received in lieu of payment, at the price agreed by the parties, or otherwise, when the parties do not reach an agreement, at the amount at which the Bank is awarded those assets at a judicial auction.
Assets received in lieu of payment are classified under Other Assets and they are recorded at the lower of its carrying amount or net realizable value, less charge-off and presented net of a portfolio valuation allowance. The Superitendency of Banks requires regulatory charge-offs if the asset is not sold within a one year of foreclosure.
(s) Investment properties:
Investments properties are real estate assets held to earn rental income or for capital appreciation or both, but are not held-for-sale in the ordinary course of business or used for administrative purposes. Investment properties are measured at fair value as attributed cost, at the moment of transition to IFRS, calculated as of January 1, 2008, less accumulated depreciation and impairment and are presented under Other Assets.
(t) Debt issued and other financial liabilities:
Financial instruments issued by the Bank are classified in the Statement of Financial Position under Debt issued items, where the substance of the contractual arrangement results in the Bank having an obligation either to deliver cash or another financial asset to the holder or to satisfy the obligation other than by the exchange of a fixed amount of cash.
After initial measurement, debt issued is subsequently measured at amortized cost using the effective interest rate. Amortized cost is calculated by taking into account any discount or premium on the issue and costs that are an integral part of the effective interest rate.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(u) Provisions and contingent liabilities:
Provisions are liabilities involving uncertainty about their amount or maturity. They are recorded in the Statement of Financial Position when the following requirements are jointly met:
i) a present obligation has arisen from a past event and,
ii) as of the date of the financial statements it is probable that the Bank or its subsidiaries have to disburse resources to settle the obligation and the amount can be reliably measured.
A contingent asset or liability is any right or obligation arising from past events whose existence will be confirmed by one or more uncertain future events which are not within the control of the Bank.
The following are classified as contingent in the complementary information:
i. Guarantors and pledges: Comprises guarantors, pledges and standby letters of credit. In addition it includes payment guarantees for purchases in factoring transactions.
ii. Confirmed foreign letters of credit: Corresponds to letters of credit confirmed by the Bank.
iii. Documentary letters of credit: Includes documentary letters of credit issued by the Bank which have not yet been negotiated.
iv. Documented guarantee: Guarantee with promissory notes.
v. Interbank guarantee: Correspond to letters of guarantee issued as foreseen in Title II of Chapters 8-12 of the Updated Compilation of Standards.
vi. Free disposal lines of credit: The unused amount of credit lines that allow customers to draw without prior approval by the Bank (for example, using credit cards or overdrafts in checking accounts).
vii. Other credit commitments: Amounts not yet lent under committed loans, which must be disbursed at an agreed future date when events contractually agreed upon with the customer occur, such as in the case of lines of credit linked to the progress of a construction or similar projects.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(u) Provisions and contingent liabilities, continued:
viii. Other contingent loans: Includes any other kind of commitment by the Bank which may exist and give rise to lending when certain future events occur. In general, this includes unusual transactions such as pledges made to secure the payment of loans among third parties or derivative contracts made by third parties that may result in a payment obligation and are not covered by deposits.
Exposure to credit risk on contingent loans:
In order to calculate provisions on contingent loans, as indicated in Chapter B-3 of the Compendium of Accounting Standards of the Superintendency of Banks, the amount of exposure that must be considered shall be equivalent to the percentage of the amounts of contingent loans indicated below:
Type of contingent loan |
|
Exposure |
|
a) Guarantors and pledges |
|
100 |
% |
b) Confirmed foreign letters of credit |
|
20 |
% |
c) Documentary letters of credit issued |
|
20 |
% |
d) Guarantee deposits |
|
50 |
% |
e) Interbank letters of guarantee |
|
100 |
% |
f) Free disposal lines of credit |
|
50 |
% |
g) Other loan commitments |
|
|
|
- College education loans Law No. 20,027 |
|
15 |
% |
- Others |
|
100 |
% |
h) Other contingent loans |
|
100 |
% |
Notwithstanding the above, when dealing with transactions performed with customers with overdue loans as indicated in Chapter B-1 of the Compendium of Accounting Standards of the SBIF: Impaired and/or Written-down Loans, that exposure shall be equivalent to 100% of its contingent loans.
Additional provisions:
In accordance to Superintendency of Banks regulations, the Bank has recorded additional allowances for its individually evaluated loan portfolio, taking into consideration the expected impairment of this portfolio. The calculation of this allowance is performed based on the Banks historical experience and considering possible future adverse macroeconomic conditions or circumstances that could affect a specific sector, industry, groups of debtors or projects.
The provisions made in order to forestall the risk of macroeconomic fluctuations should anticipate situations reversal of expansionary economic cycles in the future, could translate into a worsening in the conditions of the economic environment and thus, function as a countercyclical mechanism accumulation of additional provisions when the scenario is favorable and release or assignment to specific provisions when environmental conditions deteriorate.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(u) Provisions and contingent liabilities, continued:
Additional provisions, continued:
According to the above, additional provisions must always correspond to general provisions on commercial, consumer or mortgage loans, or segments identified, and in no case may be used to offset weaknesses of the models used by the bank.
During the current year, the Bank recorded additional provisions with a charge to income of MCh$10,000 (MCh$2,271 in 2012). As of December 31, 2013 the additional provisions amounted Ch$107,757 million (Ch$97,757 million), which are presents in the item Provisions of the liability in the Consolidated Statement of Financial Position.
(v) Provision for minimum dividends:
According with the Compendium of Accounting Standards of the SBIF, the Bank records within liabilities the portion of net income for the year that should be distributed to comply with the Corporations Law or its dividend policy. For these purposes, the Bank establishes a provision in a complementary equity account within retained earnings.
Distributable net income is considered for the purpose of calculating a minimum dividends provision, which in accordance with the Banks bylaws is defined as that which results from reducing or adding to net income the value of restatement or adjustment of paid-in capital and reserves for the year.
(w) Employee benefits:
(i) Staff vacations:
The annual costs of vacations and staff benefits are recognized on an accrual basis.
(ii) Short-term benefits
The Bank has a yearly bonus plan for its employees based on their ability to meet objectives and their individual contribution to the companys results, consisting of a given number or portion of monthly salaries. It is provisioned for based on the estimated amount to be distributed.
(iii) Staff severance indemnities:
Banco de Chile has recorded a liability for long-term severance indemnities in accordance with employment contracts it has with certain employees. The liability, which is payable to specified retiring employees with 30 or 35 years of service, is recorded at the present value of the accrued benefits, which are calculated by applying a real discount rate to the benefit accrued as of year-end over the estimated average remaining service period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(w) Employee benefits, continued:
(iii) Staff severance indemnities, continued:
Obligations for this defined benefits plan are valued according to the projected unit credit actuarial valuation method, using inputs such as staff turnover rates, expected salary growth in wages and probability that this benefit will be used, discounted at current long-term rates (5.19% as of December 31, 2013 and 5.50% as of December 31, 2012).
The discount rate used corresponds to the return on bonds of the Central Bank with maturity in 10 years (BCP).
Actuarial gains and losses are recognised in Other Comprehensive Income. There are no other additional costs that must be recognised by the Bank.
(x) Earnings per share:
Basic earnings per share is determined by dividing net income for the year attributable to the Bank by the average weighted number of shares in circulation during that year.
Diluted earnings per share is determined in a similar manner as basic earnings per share, but the average weighted number of shares in circulation is adjusted to account for the dilutive effect of stock options, warrants and convertible debt. As of December 31, 2013 and 2012, the Bank does not have any instruments or contracts that could cause dilutions. Therefore, no adjustments have been made.
(y) Interest revenue and expense:
Interest income and expenses are recognized in the income statement using the effective interest rate method. The effective interest rate is the rate which exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument (or a shorter period) where appropriate, to the carrying amount of the financial asset or financial liability. To calculate the effective interest rate, the Bank determines cash flows by taking into account all contractual conditions of the financial instrument, excluding future credit losses.
The effective interest rate calculation includes all fees and other amounts paid or received that form part of the effective interest rate. Transaction costs include incremental costs that are directly attributable to the purchase or issuance of a financial asset or liability.
For its impaired portfolio and high risk loans and accounts receivables from clients, the Bank has applied a conservative position of discontinuing accrual-basis recognition of interest revenue in the income statement; they are only recorded once received. In accordance with the above, suspension occurs in the following cases:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(y) Interest revenue and expense, continued:
Loans with individual evaluation:
· Loans classified in categories C5 and C6: Accrual is suspended by the sole fact of being in the impaired portfolio.
· Loans classified in categories C3 and C4: Accrual is suspended due to having been three months in the impaired portfolio.
Group evaluation loans:
· Loans with less than 80% real guarantees: Accrual is suspended when payment of the loan or one of its installments has been overdue for six months.
Notwithstanding the above, in the case of loans subject to individual evaluation, recognition of income from accrual of interest and readjustments can be maintained for loans that are being paid normally and which correspond to obligations whose cash flows are independent, as can occur in the case of project financing.
The suspension of recognition of revenue on an accrual basis means that, while the credits are kept in the impaired portfolio, the related assets included in the Consolidated Statement of Financial Position will increase with no interest, or fees and adjustments in the Consolidated Statement of Comprehensive Income, and income will not be recognized for these items, unless they are actually received.
(z) Fees and commissions:
Income and expenses from fees and commissions are recognized in income using different criteria based on the nature of the income or expense: The most significant criteria include:
· Fees earned from an single act are recognized once the act has taken place.
· Fees earned from transactions or services provided over a longer period of time are recognized over the life of the transactions or services.
· Loan commitment fees for loans that are likely to be drawn down and other credit-related fees are deferred (together with incremental costs) and recognized as an adjustment to the effective interest rate of the loan. When it is unlikely that a loan is drawn down, the fees are recognized over the commitment period on a straight-line basis.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(aa) Identifying and measuring impairment:
Financial assets, different to loans to customers
Financial assets are reviewed throughout each year, and especially at each reporting date, to determine whether there is objective evidence of impairment as a result of a loss event that occurred after the initial recognition of the asset and the loss event had an impact on the estimated future cash flows of the financial asset that can be reliably calculated.
An impairment loss for financial assets (different to loans to customers) recorded at amortized cost is calculated as the difference between the assets carrying amount and the present value of the estimated future cash flows, discounted using the effective interest rate.
An impairment loss for available-for-sale financial assets is calculated using its fair value, considering fair value changes already recognized in other comprehensive income.
In the case of equity investments classified as available-for-sale financial assets, objective evidence includes a significant or prolonged decline in the fair value of the investment below cost. In the case of debt securities classified as available-for-sale financial assets, the Bank assesses whether there exists objective evidence for impairment based on the same criteria as for loans.
If there is evidence of impairment, any amounts previously recognized in equity, in net gains (losses) not recognized in the income statement, is removed from equity and recognized in the income statement for the period, reported in net gains (losses) on financial assets available for sale. This amount is determined as the difference between the acquisition cost (net of any principal repayments and amortization) and current fair value of the asset less any impairment loss on that investment previously recognized in the income statement.
When the fair value of the available-for-sale debt security recovers to at least amortised cost, it is no longer considered impaired and subsequent changes in fair value are reported in equity.
All impairment losses are recognized in the income statement. Any cumulative loss related to available-for-sale financial assets recognized previously in equity is transferred to the income statement.
An impairment loss can only be reversed if it can be related objectively to an event occurring after the impairment loss was recognized.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(aa) Identifying and measuring impairment, continued:
Financial assets, different to loans to customers, continued
The amount of the reversal is recognized in profit or loss up to the amount previously recognized as impairment.
An impairment loss is reversed if, in a subsequent period, the fair value of the debt instrument classified as available-for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss.
Non-financial assets
The carrying amounts of the non-financial assets of the Bank and its subsidiaries, excluding investment properties and deferred tax assets, are reviewed throughout the year and especially at each reporting date, to determine if any indication of impairment exists. If such indication exists, the recoverable amount of the asset is then estimated.
Impairment losses recognized in prior years are assessed at each reporting date in search of any indication that the loss has decreased or disappeared. An impairment loss is reversed if there has been a change in the estimations used to determine the recoverable amount. An impairment loss is reverted only to the extent that the book value of the asset does not exceed the carrying.
The Bank assesses at each reporting date and on an ongoing basis whether there is an indication that an asset may be impaired. If any indication exists, the Bank estimates the assets recoverable amount. An assets recoverable amount is the fair value less costs to sell and its value in use. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, share prices and other available fair value indicators.
Impairment losses related to goodwill cannot be reversed in future periods.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(ab) Lease transactions:
(i) The Bank acting as lessor
Assets leased to customers under agreements which transfer substantially all the risks and rewards of ownership, with or without ultimate legal title, are classified as finance leases. When assets held are subject to a finance lease, the leased assets are derecognized and a receivable is recognized which is equal to the present value of the minimum lease payments, discounted at the interest rate implicit in the lease. Initial direct costs incurred in negotiating and arranging a finance lease are incorporated into the receivable through the discount rate applied to the lease. Finance lease income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the finance lease.
Assets leased to customers under agreements which do not transfer substantially all the risks and rewards of ownership are classified as operating leases.
The leased assets are include within Other Assets on the Groups balance sheet and depreciation is provided on the depreciable amount of these assets on a systematic basis over their estimated useful economic lives. Rental income is recognized on a straight-line basis over the period of the lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as an expense on a straight-line basis over the lease term.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(ab) Lease transactions, continued:
(ii) The Bank acting as lessee
Assets held under finance leases are initially recognized on the balance sheet at an amount equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. As of December 31, 2013 and 2012, the Bank and its subsidiaries have not signed contracts of this nature.
Operating lease rentals payable are recognized as an expense on a straight-line basis over the lease term, which commences when the lessee controls the physical use of the property. Lease incentives are treated as a reduction of rental expense and are also recognized over the lease term on a straight-line basis. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.
(ac) Fiduciary activities:
The Bank provides trust and other fiduciary services that result in the holding or investing of assets on behalf of the clients. Assets held in a fiduciary capacity are not reported in the financial statements, as they are not the assets of the Bank. Contingencies and commitments arising from this activity are disclosed in Note No. 26 (a).
(ad) Customer loyalty program:
The Bank maintains a customer loyalty programs as an incentive to its clients. The scheme grants its customers certain points depending on the value of credit card purchases they make. The so-collected points can be used to obtain services from a third party. In accordance with IFRIC 13 the costs which the Bank incurs providing this incentive are recognized at fair value when the corresponding revenue is recognized, considering the probabilities of being used by the customers to obtain the third partys service. The points collected cannot be used to obtain services directly from the Bank.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Summary of Significant Accounting Principles, continued:
(ae) Reclassifications
During this period, the expense that, by their nature is directly related with credit cards was reclassified from Other operational expenses to Expenses from fees and commissions, in order to relate them better with the revenues from that product. The effect of this reclassification is the following:
|
|
Balance as of |
|
Reclassification |
|
Reclassified |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Expenses from fees and commissions |
|
(65,510 |
) |
(19,985 |
) |
(85,495 |
) |
Other operational expenses |
|
(42,439 |
) |
19,985 |
|
(22,454 |
) |
This reclassification does not affect any comply of covenants.
There are not other significant reclassifications at the end period 2013, different to described above.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
3. New Accounting Pronouncements:
The following is a summary of new standards, interpretations and improvements to the International Financial Reporting Standards issued by the International Accounting Standards Board (IASB) that it is not effective as of December 31, 2013:
3.1 Accounting rules issued by IASB:
IAS 32 Financial Instruments: Presentation
Amendments issued in December 2011 provide clarifications on the application of the offsetting rules, clarifying the meaning of the criterion currently has a legally enforceable right to set-off and clarifying the criterion intention to settle on a net basis, or to realize assets and settle liabilities simultaneously and this way reduce the diversification that exist in actual practices. The standard is effective for annual periods beginning on or after January 1, 2014 and early adoption is permitted.
According the assessment, current rules about netting force in Chile and practice used by the Bank in financial contracts with foreign counterparties, this rule has no impact on the consolidated financial statements of Banco de Chile and its subsidiaries.
IAS 36 Impairment assets
On May 29, 2013, the IASB issued amendments to IAS 36 respect to disclosures information related to recoverable amount of impaired assets, if this amount corresponded to fair value less disposal cost. These modifications are related to IFRS 13: Fair Value measurement.
The amendments will be applied retrospectively to annual periods beginning in January 1, 2014. Early adoption is permitted for the periods that the entity has applied IFRS 13.
The Bank and its subsidiaries assess that this amendment will not have impact in the consolidated financial statements.
IAS 39 Financial Instruments: Recognition and Measurement
On June 27, 2013 the IASB issue amendments to IAS 39 related to continuing hedge accounting after novation. This amendment provides an exception to the requirement to discontinue hedge accounting in situations where over-the-counter (OTC) derivatives designated in hedging relationships are directly or indirectly, novated to a central counterparty (CCP) as a consequence of laws or regulations, or the introduction of laws or regulations.
The effective date for annual periods beginning on or after January 1, 2014. Early adoption is permitted.
The Bank will make updates related to documentation that will be required and adjustments in operating process for compliance of novations. Hedges will not be interrupted for this novation, so there is no impact in financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
3. New Accounting Pronouncements, continued:
IFRS 9 Financial Instruments: Financial liabilities
On October 28, 2010, the IASB incorporated in IFRS 9 accounting treatment of financial liabilities, maintaining classification and measurement criteria of IAS 39 for all liabilities except those that the entity has used fair value. Entities that their liabilities are valued through fair value shall determine the amount of variation related to credit risk and if they not produce accounting mismatch register them in equity.
IFRS 9 Financial Instruments: Recognition and Measurement
In November 2009, the IASB issued IFRS 9, Financial Instruments, the first step in its project to replace IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 introduces new requirements for classifying and measuring financial assets that are in the scope of the application of IAS 39. This new regulation requires that all financial assets be classified in function of the entitys business model for the management of financial assets and of the characteristics of the contractual cash flows of financial assets. A financial asset shall be measured at amortized cost if two criteria are fulfilled: (a) the objective of the business model is to maintain a financial asset to receive contractual cash flows, and (b) contractual cash flows represent principal and interest payments. Should a financial asset not comply with the aforementioned conditions, it will be measured at fair value. In addition, this standard allows a financial asset that fulfills the criteria to be valued at amortized cost to be designated at fair value with changes in income under the fair value option, as long as this significantly reduces or eliminates an accounting asymmetry. Likewise, IFRS 9 eliminates the requirement of separating embedded derivatives from the host financial assets. Therefore, it requires that a hybrid contract be classified entirely in amortized cost or fair value.
IFRS 9 requires, mandatory and prospective way, that the entity makes reclassifications of financial assets when the entity modifies the business model.
Under IFRS 9, all equity investments of are measured at fair value. However, the Management has the option of present the changes of fair value in the item Other Comprehensive Income in equity. This accounting treatment is available for the initial recognition of an instruments and it is irrevocable. The unrealized income (loss) recognized in Other Comprehensive Income, derived from the changes of fair value, and must be not included in income statements.
In November 2013 IASB issued amendment to IFRS 9 to introduce a new model of hedge accounting, which aligns hedge accounting with risk management.
This amendment removes date of adoption date (January 1, 2015). So, effective date is in process of decision by IASB.
At date, this rule has not approved by the Superintendency of Banks, situation required for its application.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
3. New Accounting Pronouncements, continued:
IFRS 10 Consolidated Financial Statement, IFRS 12 Disclosure of Interests in Other Entities and IAS 27 Separate Financial Statements
During October 2012, IASB issued amendments to definition of an investment entity and introduced an exception for consolidate certain subsidiaries pertaining to investment entity. This modification requires that an entity considered of investment measures its investments in subsidiaries to fair value with changes in profit or loss according IFRS 9 Financial Statements, in its Consolidated and Separated Financial Statements instead to consolidate such subsidiaries.
Amendments also introduce new disclosure requirements related to investment entities IFRS 12 and IAS 27.
If an entity applies these amendments but not applies IFRS 9 yet, any reference in this document to IFRS 9 must be interpreted as a reference to IAS 39 Financial Instruments: Recognition and Measurement.
The standard is effective for annual periods beginning on or after January 1, 2014 and early adoption is permitted.
These modifications will not affect Consolidated Statement of Financial Position.
IAS 19 Employee benefits
On November 2013, IASB modified requirements of IAS 19 respect to employee contributions or third parties contributions, which are related to defined benefit plans.
Adoption date of this modification is beginning July 1, 2014, and anticipated adoption is permitted.
The Bank has not employee contributions related to defined benefit plans, so this amendment has not impacts over consolidated financial statements of Banco de Chiles and its subsidiaries.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
3. New Accounting Pronouncements, continued:
Annual improvements IFRS 2010 2012 Cycle and 2011 2013 Cycle
On December 12, 2013, IASB issued two cycles of annual improvements to IFRS: 2010 2012 and 2011 2013 Cycles, these contain 11 changes in 9 rules:
· IFRS 1 First time adoption; Meaning of effective IFRS. Not applicable.
· IFRS 2 Share based payments; Definition relating to vesting conditions. Not applicable.
· IFRS 3 Business combination; Accounting for contingent consideration in a business combination. Without impact.
· IFRS 8 Operating Segments; Aggregation of operating segments and Reconciliation of the total of the reportable segment assets to the entitys total assets. The Bank and its subsidiaries are assessing the impact of adoption of these changes in its financial position.
· IFRS 13 Fair Value measurement; Scope of portfolio exception (paragraph 52). The Bank and its subsidiaries are assessing the impact of adoption of these changes in its financial position.
· IAS 16 Property, plant and equipment; Revaluation method proportionate restatement of accumulated depreciation. Not applicable.
· IAS 24 Related party disclosures; Key management personnel. Not applicable
· IAS 38 Intangible assets; Revaluation method proportionate restatement of accumulated depreciation. Not applicable.
· IAS 40 Investment properties. Interrelationship between IFRS 3 and IAS 40. Without impact
The effective date of these amendments are beginning on July 1, 2014, except by modifications of IFRS 13 and IFRS 1, which affect basics of conclusions of respective rules and, so are effective immediately.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
3. New Accounting Pronouncements, continued:
3.2 Accounting rules issued by SBIF:
On March 19, 2013 the Superintendency of Banks issued a Circular No. 3,548 that modified the following:
(a) The instructions relative to the presentation of Statements of Income for matching the names used in the Compendium of Accounting Standards issued by the Chilean Superintendency of Banks with last modifications of IAS 1.
The expressions: Statement of Income and Statement of Comprehensive Income must be replaced by Statement of Income for the Period and Statement of Other Comprehensive Income for the Period respectively.
(b) Accurate presentation of income (loss) that originate in the case of sale portfolio loans, stipulated that the net income (loss) for sale portfolio loans classified in the item Net financial operating income, corresponds to differences between the cash perceived (or fair value of the instruments that are received as consideration) and the value net of provisions of the transferred assets, registered at the sale date.
Before this regulatory change, the net income (loss) of sale portfolio loans, corresponded to differences between the cash perceived (or fair value of the instruments that are received as consideration) and the gross value of transferred assets, proceeding after release of the established provisions for that loans, being this last effect recognized in the item Provisions for loan losses of the Income Statements of the Periods.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
3. New Accounting Pronouncements, continued:
3.3 Rules issued by SVS (Superintendency of Securities and Insurance)
On December 1, 2013, new rules are beginning in application. These are about return of premiums not accrued for the insurance contracts, according to established by law No. 20,667 of 9th. of May of 2013 and Circular No. 2,114 issued by the SVS on July 26, 2013. The legal change requires returns of premiums collected in advance but not accrued, due to the early termination or extinction of an insurance contract. The premium to return it will be calculated in proportion of the remaining time.
Before, the premium accrued was returned only if the early termination or extinction of an insurance contract had produced inside forty five days following to the start of coverage or if that was produced inside of tenth of the period of effective coverage insurance, if that was greater.
Delaying the adoption of international financial reporting standards
On January 13, 2014, SVS issued Circular No. 2,137, which includes rules about form and content of financial statements of Insurance Brokerage. Such rules are beginning on January 1, 2015. For accounting purposes this rule gives accounting criteria related to income recognition of commissions. The first criterion establish the option of the commissions are deferred in lineal form in the term of policies, while the second criterion allows recognize in income a percentage of the commission at initial date of policy and the difference in deferred form. Also, this last criterion requires determination of a provision for this commissions returns, according to a defined model for such effects.
This rule does not present significant changes in these financial statements, due to the opportunity of effective date of this new rule.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
4. Changes in Accounting Policies and Disclosures:
Since 2013, IAS 19 Employee Benefits, changed the accounting treatment of the measurements of liability, specifically defined benefit plans and termination benefits. The main effect on the financial statements is related to accounting for gains and losses, originated by changes in actuarial variables which must to be recorded as a charge or credit to Other Comprehensive Income since current year. Until before this change, these effects affected profit or loss directly.
For the purpose of presenting comparative financial statements, the reclassifications made in the Balance and Income Statement for the year 2012, are detailed as follows:
|
|
Balance as of |
|
|
|
Proform Balance as |
|
|
|
2012 |
|
Reclassification |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Equity |
|
|
|
|
|
|
|
Attributable to equity holders of the parent: |
|
|
|
|
|
|
|
Capital |
|
1,629,078 |
|
|
|
1,629,078 |
|
Reserves |
|
177,574 |
|
(1,760 |
) |
175,814 |
|
Other comprehensive income |
|
18,935 |
|
|
|
18,935 |
|
Retained earnings: |
|
|
|
|
|
0 |
|
Retained earnings from previous periods |
|
16,379 |
|
|
|
16,379 |
|
Income for the year |
|
465,850 |
|
1,760 |
|
467,610 |
|
Less |
|
|
|
|
|
0 |
|
Provision for mínimum dividend |
|
(300,759 |
) |
|
|
(300,759 |
) |
Subtotal |
|
2,007,057 |
|
|
|
2,007,057 |
|
Non-controlling interest |
|
2 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
TOTAL EQUITY |
|
2,007,059 |
|
|
|
2,007,059 |
|
TOTAL LIABILITIES AND EQUITY |
|
23,261,066 |
|
|
|
23,261,066 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
4. Changes in Accounting Policies and Disclosures, continued:
|
|
Balance as of |
|
|
|
Proform Balance as |
|
|
|
2012 |
|
Reclassification |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
STATEMENT OF INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING REVENUE, NET OF PROVISION FOR LOAN LOSSES |
|
1,133,864 |
|
|
|
1,133,864 |
|
|
|
|
|
|
|
|
|
Personnel expenses |
|
(312,065 |
) |
2,200 |
|
(309,865 |
) |
Administrative expenses |
|
(247,459 |
) |
|
|
(247,459 |
) |
Depreciations and amortizations |
|
(30,957 |
) |
|
|
(30,957 |
) |
Impairments |
|
(899 |
) |
|
|
(899 |
) |
Other operating expenses |
|
(22,454 |
) |
|
|
(22,454 |
) |
TOTAL OPERATING EXPENSES |
|
(613,834 |
) |
2,200 |
|
(611,634 |
) |
|
|
|
|
|
|
|
|
NET OPERATING INCOME |
|
520,030 |
|
2,200 |
|
522,230 |
|
|
|
|
|
|
|
|
|
Income attributable to associates |
|
(229 |
) |
|
|
(229 |
) |
Income before income taxes |
|
519,801 |
|
2,200 |
|
522,001 |
|
Income taxes |
|
(53,950 |
) |
(440 |
) |
(54,390 |
) |
|
|
|
|
|
|
|
|
NET INCOME FOR THE PERIOD |
|
465,851 |
|
1,760 |
|
467,611 |
|
|
|
|
|
|
|
|
|
|
|
Balances as of |
|
|
|
Proform Balance as |
|
|
|
2012 |
|
Reclasificación |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
|
|
|
|
|
|
|
NET INCOME FOR THE YEAR |
|
465,851 |
|
1,760 |
|
467,611 |
|
|
|
|
|
|
|
|
|
TOTAL OTHER COMPREHENSIVE INCOME ITEMS THAT WILL BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS |
|
21,009 |
|
|
|
21,009 |
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME THAT WILL NOT BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss in defined benefit plans |
|
|
|
(2,200 |
) |
(2,200 |
) |
|
|
|
|
|
|
|
|
Subtotal Other comprehensive income that will not be reclassified subsequently to profit or loss |
|
|
|
(2,200 |
) |
(2,200 |
) |
|
|
|
|
|
|
|
|
Income tax related to other comprehensive income will not be reclassified subsequently to profit or loss |
|
|
|
440 |
|
440 |
|
|
|
|
|
|
|
|
|
TOTAL OTHER COMPREHENSIVE INCOME THAT WILL NOT BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS |
|
|
|
(1,760 |
) |
(1,760 |
) |
|
|
|
|
|
|
|
|
TOTAL CONSOLIDATED COMPREHENSIVE INCOME |
|
486,860 |
|
|
|
486,860 |
|
During the year ended December 31, 2013, have no other accounting changes that affect the presentation of these consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) On January 04, 2013 Banco de Chile has concluded the execution process of the insurance agreements between Banco de Chile and its subsidiary Banchile Corredores de Seguros Limitada, with Banchile Seguros de Vida S.A., which were entered into through private instruments dated on December 28, 2012, which are:
(1) Brokerage Agreement entered into by the affiliate Banchile Corredores de Seguros Limitada and the related company Banchile Seguros de Vida S.A.
(2) Agreements entered into by Banco de Chile and Banchile Seguros de Vida S.A.:
i) Collection and Data Administration Agreement.
ii) Use Agreement for Distribution Channels.
iii) Banchiles Trademark License Agreement.
iv) Credit Life Insurance Agreement.
(3) Framework agreement for Insurance Banking, entered into by Banco de Chile, Banchile Corredores de Seguros Limitada and Banchile Seguros de Vida S.A.
All of the agreements have duration of 3 years effective from January 1, 2013, excluding those insurances, as applicable, that are related to loan mortgages subject to public bid in accordance with article 40 of DFL No. 251 of 1931.
It is worth noting that Banchile Seguros de Vida S.A. is a related party to Banco de Chile in accordance with Article 146 of the Chilean Corporations Law. In turn, Banchile Corredores de Seguros Limitada is a subsidiary of Banco de Chile, incorporated pursuant to Article 70 letter a) of the Chilean Banking Act.
(b) On January 17, 2013 the Central Bank of Chile, in session No.1730-02-130117 held on that day, agreed and determined, in accordance with article 30 letter b) of Law No. 19,396, the selling price of the subscription options pertaining the 1,279,502,316 (Banco de Chile-T series) cash shares issued by Banco de Chile as agreed during the Extraordinary Shareholders Meeting held on October 17, 2012. Those shares are owned by Sociedad Administradora de la Obligación Subordinada SAOS S.A. and are pledged as collateral to the Chilean Central Bank.
The above referred subscription options shall be preferentially offered to shareholders of series A, B and D of Sociedad Matriz del Banco de Chile S.A. during the so called Special Preferential Rights Offering Period which will begin running on January 19, 2013, and shall be elapsed on February 17, 2013.
In accordance with the above referred resolution of the Council of the Central Bank of Chile, the price of each option shall be as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
5. Relevant Events, continued:
The price of the subscription option, hereinafter the Option Price, shall correspond to the higher value between Ch$0.1 and the value resulting from the difference obtained after multiplying 0.9752 over the average stock trading price of Banco de Chile´s shares registered in local stock exchanges during the three business trading days preceding the date in which the corresponding option is acquired, hereinafter the Weighted Average Share Price (Precio Promedio Ponderado de la Acción), and Ch$62.0920.
For these purposes, the Weighted Average Share Price was determined, for each day, in accordance to the weighted average price of Banco de Chile´s shares traded during the three business trading days preceding the date in which the corresponding option is acquired, having in mind that the value corresponding to the Weighted Average Price, in relation to the beginning of the Special Preferential Rights Offering Period shall be of Ch$71.4. This value considers the resulting prices from the Ordinary Preferential Rights Offering Period referred to in letter a) of article 30 of Law N°19,396, so that, initially, the Option Price shall correspond to Ch$7.5 per each Banco de Chile´s share, and subsequently, he Option Price shall be determined pursuant to the Weighted Average Share Price, as explained before.
In any event, and for the purposes of selling the subscription options, the Option Price shall corresponded to Ch$7.5 for each Banco de Chile´s share, as long as the Weighted Average Share Price, determined as described before, does not exceed Ch$76.9 nor be less than Ch$71.3.
The Option Price that is determined in accordance with the aforementioned shall be paid up front pursuant to the conditions set forth by Banco de Chile for purposes of the Banks capital increase and its calculation procedure shall also be governed by the term established in the final paragraph of letter b) of article 30 of the Law No. 19,396, in accordance to the conditions established by the same legal provision.
In addition, the Central Bank of Chile resolved that Sociedad Administradora de la Obligación Subordinada SAOS S.A. shall preferentially offer the options to the mentioned shareholders at the price singularized before. The price was notified by Sociedad Administradora de la Obligación Subordinada SAOS S.A. to the Central Bank of Chile and also be informed to interested persons at the beginning of each day of the Special Preferential Rights Offering Period.
(c) On January 24, 2013 in the Ordinary Meeting No. BCH 2,769, the Board of Directors of Banco de Chile resolved to call an Ordinary Shareholders Meeting to be held on the 21th of March, 2013 with the objective of proposing, among other matters, the distribution of the Dividend number 201 of Ch$3.41625263165 per every of the 88,037,813,511 Banco de Chile shares, which will be payable at the expense of the distributable net income obtained during the fiscal year ending the 31st of December, 2012, corresponding to 70% of such income.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
5. Relevant Events, continued:
In the Ordinary and Extraordinary Banco de Chiles meetings held on March 21, 2013 it was agreed to comply the previous agreements.
Likewise, the Board of Directors resolved to call an Extraordinary Shareholders Meeting to be held on the same date in order to propose, among other things, the capitalization of 30% of the distributable net income obtained during the fiscal year ending the 31st of December, 2012, through the issuance of fully paid-in shares, of no par value, with a value of Ch$71.97 per Banco de Chile share which will be distributed among the shareholders in the proportion of 0.02034331347 shares for each Banco de Chile share, and to adopt the agreements that are necessary in this regard, subject to the exercise of the options established in article 31 of Law 19,396.
(d) On March 21, 2013 Banco de Chile informed that the Ordinary Shareholders Meeting of the Bank held today, agreed to definitely appoint Mr. Francisco Aristeguieta Silva as Director of the Bank, position that he will hold until the next renewal of the Board.
(e) On March 26, 2013 the Central Bank of Chile communicated to Banco de Chile that in the Extraordinary Session, No. 1742E, held today, the Board of the Central Bank of Chile resolved to request its corresponding surplus, from the fiscal year ended on December 31, 2012, including the proportional part of the profits agreed upon capitalization, be paid in cash currency.
(f) On March 27, 2013 Mr. Guillermo Luksic Craig died an important member of our Board since 2001 and member of controlling group of our Bank.
(g) According to Note 27 (a) during April concluded the process of subscription and payment of shares of increase capital authorized in the Extraordinary Shareholders Meeting held on October 17, 2012.
(h) On April 11, 2013 in Extraordinary Meeting appointed to Mr. Jean-Paul Luksic Fontbona like Director, until the next Ordinary Shareholders Meeting, replacing to Mr. Guillermo Luksic Craig.
(i) On May 13, 2013, and regarding the capitalization of 30% of the distributable net income obtained during the fiscal year ending the 31st of December, 2012, through the issuance of fully paid-in shares, agreed in the Extraordinary Shareholders Meeting held on the 21th of March, 2013, it was informed the following:
a) In the said Extraordinary Shareholders Meeting, it was agreed to increase the Bank´s capital in the amount of Ch$86,201,422,505 through the issuance of 1,197,741,038 fully paid-in shares, of no par value, payable under the distributable net income for the year 2012 that was not distributed as dividends as agreed at the Ordinary Shareholders Meeting held on the same day.
The Chilean Superintendency of Banks and Financial Institutions approved the amendment of the bylaws, through resolution No.126 dated April 30, 2013, which was registered on page 34,465, No. 23,083 of the register of the Chamber of Commerce of Santiago for the year 2013, and was published at Diario Oficial on May 8, 2013.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
5. Relevant Events, continued:
The issuance of fully in paid shares was registered in the Securities Register of the Superintendence of Banks and Financial Institutions with No.2/2013, on May 10, 2013.
b) The Board of Directors of Banco de Chile, at the meeting No. 2,775, dated May 9, 2013, set May 30, 2013, as the date for issuance and distribution of the fully paid in shares.
c) The shareholders that will be entitled to receive the new shares, at a ratio of 0.02034331347 fully in paid shares for each Banco de Chile share, shall be those registered in the Register of Shareholders on May 24, 2013.
d) In accordance to the first transitory article of the Banks bylaws, Banco de Chile-T shares issued as a consequence of the capital increase agreed on the Extraordinary Shareholders Meeting held on October 17, 2012, do not allow their holders to receive dividends or fully paid-in shares in respect to Banco de Chiles net distributable earnings for fiscal year 2012. Once any dividends and/or fully paid-in shares are distributed, the Banco de Chile-T series shares will automatically convert to Banco de Chile ordinary shares.
e) The titles will be duly assigned to each shareholder. The Bank will only print the titles for those shareholders who request it in writing at the Shareholders Department of Banco de Chile.
f) As a consequence of the issuance of the fully in paid shares, the capital of the Bank will be divided in 93,175,043,991 nominative shares, without par value, completely subscribed and paid.
(j) On July 1, 2013 it is informed that through Public Deed dated June 19, 2013 in Notary´s office Raul Perry Pefaur of Santiago, Banco de Chile has acquired the totally of shares of Banchile Asesoría Financiera S.A. in the entity Banchile Factoring S.A, subsidiary of Banco de Chile, taking over assets and liabilities of such subsidiary.
According to Article 103 No. 2 of Law No. 18,046 of Corporate Law, it has elapsed an uninterrupted period of more 10 of days. Consequently as of 30th. of June, it has dissolved Banchile Factoring S.A., so 100% of shares belong to Banco de Chile, which since 30th. of June is its legal successor.
(k) On August 9, 2013 it was informed that in Ordinary Board Meeting held on 8th. of August, the Board accepted resignation of Director Fernando Concha Ureta, with effective date on August 21, 2013
Since August 22, 2013 the Board designated to Juan Enrique Pino Visinteiner like Director until next Ordinary Shareholders Meeting.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
5. Relevant Events, continued:
(l) On October 17, 2013 Banco de Chile informed that the Board of Directors of Latibex (Consejo de Administración de Bolsas y Mercados Españoles Sistemas de Negociación, S.A.), within its authority pursuant to the Regulations of the Mercado de Valores Latinoamericanos (Latibex), and based on Banco de Chiles request, has resolved to exclude the negotiation of Banco de Chile issued shares from the Mercado de Valores Latinoamericanos (Latibex), effective October 18, 2013.
All the supporting documentation filled by Banco de Chile is publicly available at the website of Latibex (www.latibex.com) and on our website (www.bancochile.cl).
(m) On December 10, 2013, it was informed that by way of notarized deed in the public notary of Santiago of Chile Mr. René Benavente Cash, Bank of Chile and its affiliate Banchile Corredores de Seguros Limitada entered into an agreement with Banchile Seguros de Vida S.A., namely the Collective Debtors Life Insurance Agreement (Contrato de Seguro Colectivo de Desgravamen) and the Collective Debtors Life, Total and Permanent Disability 2/3 Insurance Agreement (Contrato de Seguro Colectivo de Desgravamen e Invalidez Total y Permanente 2/3)(portfolio in pesos and housing subsidies D.S. No.1 de 2011) both for loan mortgages.
The aforementioned agreements was entered pursuant article 40 of DFL No. 251 of 1931, General Regulation No. 330 of the Superintendency of Securities and Insurance and Circular No. 3,530 of the Superintendency of Banks and Financial Institutions, both dated March 21, 2012, upon which the public bid for the collective policy for life insurance and Total and Permanent Disability 2/3 Insurance Agreement (portfolio in pesos and housing subsidies D.S. N°1 de 2011) was adjudicated to Banchile Seguros de Vida S.A. who offered in both cases the lowest rates of 0.0103% monthly and of 0.0109% monthly, respectively, including a 14.00% commission fee for the insurance broker Banchile Corredores de Seguros Limitada.
(n) On December 27, 2013, it was informed that on this past December 26th, Bank of Chile and Banchile Seguros de Vida S.A. have entered into an amendment to the Convenio Uso de Canales de Distribución (Agreement of use of distribution channels), dated December 28th, 2012, adjusting the percentage of the commission associated to certain insurances and the base calculation formula of the commission agreed in the mentioned Agreement.
This amendment is effective from December 1st, 2013, to December 31st, 2015.
It is noted that Banchile Seguros de Vida S.A. is a company related to Bank of Chile, according to the provisions of article 146 of the Ley de Sociedades Anonimas (Chilean Corporations Law).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
For management purposes, the Bank has organized its operations and commercial strategies into four business segments, which are defined in accordance with the type of products and services offered to target customers. These business segments are currently defined as follows:
Retail: This segment focuses on individuals and small and medium-sized companies with annual sales up to 70,000 UF, where the product offering focuses primarily on consumer loans, commercial loans, checking accounts, credit cards, credit lines and mortgage loans.
Wholesale: This segment focused on corporate clients and large companies, whose annual revenue exceed 70,000 UF, where the product offering focuses primarily on commercial loans, checking accounts and liquidity management services, debt instruments, foreign trade, derivative contracts and leases.
Treasury and money market operations:
This segment includes revenue associated with managing the Banks balance sheet (currencies, maturities and interest rates) and liquidity, including financial instrument and currency trading on behalf of the Bank itself.
Transactions on behalf of customers carried out by the Treasury are reflected in the respective aforementioned segments. These products are highly transaction-focused and include foreign exchange transactions, derivatives and financial instruments in general.
Subsidiaries: Corresponds to companies and corporations controlled by the Bank, where income is obtained individually by the respective subsidiary. The companies that comprise this segment are:
Entity
· Banchile Trade Services Limited
· Banchile Administradora General de Fondos S.A.
· Banchile Asesoría Financiera S.A.
· Banchile Corredores de Seguros Ltda.
· Banchile Corredores de Bolsa S.A.
· Banchile Securitizadora S.A.
· Socofin S.A.
· Promarket S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
6. Segment Reporting, continued:
The financial information used to measure the performance of the Banks business segments is not necessarily comparable with similar information from other financial institutions because it is based on internal reporting policies. The accounting policies used to prepare the Banks operating segment information are similar as those described in Note 2 Summary of Significant Accounting Principles. The Bank obtains the majority of its income from: interest, revaluations and fees, discounted the credit cost and expenses. Management is mainly based on these concepts in its evaluation of segment performance and decision-making regarding goals, allocation of resources for each unit individually. Although the results of the segments reconcile with those of the Bank at total level, it is not thus necessarily concerning the different concepts, since the management is measured and controls in individual form and additionally applies the following criteria:
· The net interest margin of loans and deposits is measured on an individual transaction and individual client basis, stemming from the difference between the effective customer rate and the related Banks fund transfer price in terms of maturity, re-pricing and currency.
· The internal performance profitability system considers capital allocation in each segment in accordance to the Basel guidelines.
· Operating expenses are distributed at each area level. The Bank allocates all of its indirect operating costs to each business segment by utilizing a different cost driver in order to allocate such costs to the specific segment.
The Bank did not enter into transactions with a particular customer or third party that exceed 10% of its total income in 2013 and 2012.
Transfer pricing between operating segments are on an arms length basis in a manner similar to transactions with third parties.
Taxes are managed at a corporate level and are not allocated to business segments.
On July 1, 2013, Banco de Chile absorbed its subsidiary Banchile Factoring SA. This subsidiary was previously presented under the Subsidiaries operating segment. As a result of being absorbed by the Bank, now its operations are presented under Retail and Wholesale segments. Operating segment information for prior periods has been reclassified for comparative purposes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
6. Segment Reporting, continued:
The following table presents the income for 2013 and 2012 for each of the segments defined above:
|
|
December 31, 2013 |
| ||||||||||||
|
|
Retail |
|
Wholesale |
|
Treasury(1) |
|
Subsidiaries |
|
Subtotal |
|
Adjustments |
|
Total |
|
|
|
MCH$ |
|
MCH$ |
|
MCH$ |
|
MCH$ |
|
MCH$ |
|
MCH$ |
|
MCH$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
737,476 |
|
303,128 |
|
23,269 |
|
(12,143 |
) |
1,051,730 |
|
7,439 |
|
1,059,169 |
|
Net fees and commissions income |
|
150,195 |
|
42,615 |
|
(1,355 |
) |
106,280 |
|
297,735 |
|
(10,641 |
) |
287,094 |
|
Other operating income |
|
35,551 |
|
57,320 |
|
(5,607 |
) |
32,439 |
|
119,703 |
|
(9,941 |
) |
109,762 |
|
Total operating revenue |
|
923,222 |
|
403,063 |
|
16,307 |
|
126,576 |
|
1,469,168 |
|
(13,143 |
) |
1,456,025 |
|
Provisions for loan losses |
|
(203,586 |
) |
(38,031 |
) |
47 |
|
(43 |
) |
(241,613 |
) |
|
|
(241,613 |
) |
Depreciation and amortization |
|
(20,068 |
) |
(5,912 |
) |
(1,182 |
) |
(1,747 |
) |
(28,909 |
) |
|
|
(28,909 |
) |
Other operating expenses(2) |
|
(397,456 |
) |
(112,528 |
) |
(5,171 |
) |
(92,023 |
) |
(607,178 |
) |
13,143 |
|
(594,035 |
) |
Income attributable to associates |
|
1,123 |
|
814 |
|
95 |
|
39 |
|
2,071 |
|
|
|
2,071 |
|
Income before income taxes |
|
303,235 |
|
247,406 |
|
10,096 |
|
32,802 |
|
593,539 |
|
|
|
593,539 |
|
Income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
(79,936 |
) |
Income after income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
513,603 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
10,943,080 |
|
10,941,858 |
|
3,456,477 |
|
634,466 |
|
25,975,881 |
|
(191,117 |
) |
25,784,764 |
|
Current and deferred taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
149,106 |
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
25,933,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
8,299,048 |
|
9,633,395 |
|
5,378,699 |
|
482,627 |
|
23,793,769 |
|
(191,117 |
) |
23,602,652 |
|
Current and deferred taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
46,902 |
|
Total liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
23,649,554 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
6. Segment Reporting, continued:
|
|
December 31, 2012 |
| ||||||||||||
|
|
Retail |
|
Wholesale |
|
Treasury(1) |
|
Subsidiaries |
|
Subtotal |
|
Adjustments |
|
Total |
|
|
|
MCH$ |
|
MCH$ |
|
MCH$ |
|
MCH$ |
|
MCH$ |
|
MCH$ |
|
MCH$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
671,971 |
|
263,108 |
|
18,356 |
|
(12,296 |
) |
941,139 |
|
11,699 |
|
952,838 |
|
Net fees and commissions income |
|
153,358 |
|
42,229 |
|
(367 |
) |
103,472 |
|
298,692 |
|
(11,420 |
) |
287,272 |
|
Other operating income |
|
16,759 |
|
33,069 |
|
14,746 |
|
31,522 |
|
96,096 |
|
(14,152 |
) |
81,944 |
|
Total operating revenue |
|
842,088 |
|
338,406 |
|
32,735 |
|
122,698 |
|
1,335,927 |
|
(13,873 |
) |
1,322,054 |
|
Provisions for loan losses |
|
(180,559 |
) |
(7,622 |
) |
(22 |
) |
13 |
|
(188,190 |
) |
|
|
(188,190 |
) |
Depreciation and amortization |
|
(20,903 |
) |
(7,300 |
) |
(1,204 |
) |
(1,550 |
) |
(30,957 |
) |
|
|
(30,957 |
) |
Other operating expenses(2) |
|
(390,055 |
) |
(109,105 |
) |
(8,672 |
) |
(86,718 |
) |
(594,550 |
) |
13,873 |
|
(580,677 |
) |
Income attributable to associates |
|
(288 |
) |
(228 |
) |
(18 |
) |
305 |
|
(229 |
) |
|
|
(229 |
) |
Income before income taxes |
|
250,283 |
|
214,151 |
|
22,819 |
|
34,748 |
|
522,001 |
|
|
|
522,001 |
|
Income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
(54,390 |
) |
Income after income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
467,611 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
9,852,430 |
|
9,614,329 |
|
3,746,908 |
|
635,225 |
|
23,848,892 |
|
(717,653 |
) |
23,131,239 |
|
Current and deferred taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
129,827 |
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
23,261,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
7,706,834 |
|
9,225,881 |
|
4,495,605 |
|
489,830 |
|
21,918,150 |
|
(717,653 |
) |
21,200,497 |
|
Current and deferred taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
53,510 |
|
Total liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
21,254,007 |
|
(1) The Treasurys income of December 2013 considers effect of Counterparty Value Adjustment described in Note No. 2 (d), equivalent to Ch$16,413 million, of which MCh$14,289 million corresponds to this segment.
(2) During period 2013 it has modified assignation methodology of direct expenses for business segments, of demand accounts, related to product remunerations agreement and settlement. According to described, it has updated figures of period 2012.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) Cash and cash equivalents and their reconciliation to the statement of cash flows at each year-end are detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Cash and due from banks: |
|
|
|
|
|
Cash (*) |
|
485,537 |
|
400,249 |
|
Current account with the Chilean Central Bank (*) |
|
71,787 |
|
67,833 |
|
Deposits in other domestic banks |
|
15,588 |
|
15,295 |
|
Deposits abroad |
|
300,396 |
|
201,548 |
|
Subtotal - Cash and due from banks |
|
873,308 |
|
684,925 |
|
|
|
|
|
|
|
Net transactions in the course of collection |
|
248,128 |
|
237,393 |
|
Highly liquid financial instruments |
|
358,093 |
|
304,886 |
|
Repurchase agreements |
|
59,089 |
|
9,120 |
|
Total cash and cash equivalents |
|
1,538,618 |
|
1,236,324 |
|
(*) Amounts in cash and Central Bank deposits are regulatory reserve deposits for which the Bank must maintain a certain monthly average.
(b) Transactions in the course of collection:
Transactions in the course of settlement are transactions for which the only remaining step is settlement, which will increase or decrease the funds in the Central Bank or in foreign banks, normally occurring within 12 to 24 business hours, and are detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Assets |
|
|
|
|
|
Documents drawn on other banks (clearing) |
|
232,698 |
|
249,019 |
|
Funds receivable |
|
141,773 |
|
147,592 |
|
Subtotal - assets |
|
374,471 |
|
396,611 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Funds payable |
|
(126,343 |
) |
(159,218 |
) |
Subtotal - liabilities |
|
(126,343 |
) |
(159,218 |
) |
Net transactions in the course of collection |
|
248,128 |
|
237,393 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
8. Financial Assets Held-for-trading:
The detail of financial instruments classified as held-for-trading is as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Instruments issued by the Chilean Government and Central Bank of Chile: |
|
|
|
|
|
Central Bank bonds |
|
34,407 |
|
25,585 |
|
Central Bank promissory notes |
|
2,995 |
|
3,068 |
|
Other instruments issued by the Chilean Government and Central Bank |
|
27,535 |
|
43,726 |
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
|
|
|
|
Deposit promissory notes from domestic banks |
|
|
|
|
|
Mortgage bonds from domestic banks |
|
14 |
|
22 |
|
Bonds from domestic banks |
|
1,926 |
|
|
|
Deposits in domestic banks |
|
255,582 |
|
87,093 |
|
Bonds from other Chilean companies |
|
3,427 |
|
|
|
Other instruments issued in Chile |
|
1,035 |
|
188 |
|
|
|
|
|
|
|
Instruments issued by foreign institutions |
|
|
|
|
|
Instruments from foreign governments or central banks |
|
|
|
|
|
Other instruments issued abroad |
|
|
|
|
|
|
|
|
|
|
|
Mutual fund investments: |
|
|
|
|
|
Funds managed by related companies |
|
66,213 |
|
33,042 |
|
Funds managed by third parties |
|
|
|
|
|
Total |
|
393,134 |
|
192,724 |
|
Instruments issued by the Chilean Government and Central Bank include instruments sold under agreements to repurchase to customers and financial institutions, for the period 2013 there was not balance for this concept (not balance in 2012).
Other instruments issued in Chile include instruments sold under agreements to repurchase to customers and financial instruments, amounting to MCh$227,453 as of December 31, 2013 (MCh$86,863 in 2012).
Agreements to repurchase have an average expiration of 14 days as of year-end (11 days in 2012).
Additionally, the Bank holds financial investments in mortgage finance bonds issued by itself in the amount of MCh$41,313 as of December 31, 2013 (MCh$51,154 in 2012), which are presented as a reduction of the liability line item Debt issued.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
9. Repurchase Agreements and Security Lending and Borrowing:
(a) The Bank provides financing to its customers through Receivables from Repurchase Agreements and Security Borrowing, in which the financial instrument serves as collateral. As of December 31, 2013 and 2012, the Bank has the following receivables resulting from such transactions:
|
|
Up to 1 month |
|
Over 1 month and |
|
Over 3 months and |
|
Over 1 year and up to 3 |
|
Over 3 years and |
|
Over 5 years |
|
Total |
| ||||||||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Instruments issued by the Chilean Governments and Central Bank of Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Bank bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Bank promissory notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued by the Chilean Government and Central Bank |
|
|
|
582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Instruments Issued in Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit promissory notes from domestic banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage bonds from domestic banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds from domestic banks |
|
8,443 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,443 |
|
|
|
Deposits in domestic banks |
|
46,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,084 |
|
|
|
Bonds from other Chilean companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
3,902 |
|
7,756 |
|
12,250 |
|
855 |
|
11,743 |
|
25,907 |
|
|
|
|
|
|
|
|
|
|
|
|
|
27,895 |
|
34,518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instruments issued by foreign institutions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instruments from foreign governments or central bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
58,429 |
|
8,338 |
|
12,250 |
|
855 |
|
11,743 |
|
25,907 |
|
|
|
|
|
|
|
|
|
|
|
|
|
82,422 |
|
35,100 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
9. Repurchase Agreements and Security Lending and Borrowing, continued:
(b) The Bank obtains financing by selling financial instruments and committing to purchase them at future dates, plus interest at a prefixed rate, As of December 31, 2013 and 2012, the Bank has the following payables resulting from such transactions:
|
|
Up to 1 month |
|
Over 1 month and up |
|
Over 3 months |
|
Over 1 year and up to |
|
Over 3 years and |
|
Over 5 years |
|
Total |
| ||||||||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Instruments issued by the Chilean Governments and Central Bank of Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Bank bonds |
|
16,831 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,831 |
|
|
|
Central Bank promissory notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued by the Chilean Government and Central Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Instruments Issued in Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit from domestic banks |
|
232,512 |
|
219,526 |
|
7,217 |
|
1,603 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
239,729 |
|
221,129 |
|
Mortgage bonds from domestic banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds from domestic banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds from other Chilean companies |
|
206 |
|
5,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
206 |
|
5,267 |
|
Other instruments issued in Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instruments issued by foreign institutions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instruments from foreign governments or central bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
249,549 |
|
224,793 |
|
7,217 |
|
1,603 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
256,766 |
|
226,396 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
9. Receivables from Repurchase Agreements and Security Borrowing, continued:
(c) Securities received:
As part of reverse repurchase and securities borrowing agreements the Bank has received securities that it is allowed to sell or repledge in the absence of default by the owner. At December 31, 2013 the Bank held securities with a fair value of Ch$81,830 million (Ch$34,865 million in 2012) on such terms. The Bank has an obligation to return the securities to its counterparties.
(d) Securities given:
The carrying amount of securities lent and of Payables from Repurchase Agreements and Security Lending at December 31, 2013 is Ch$255,302 million (Ch$266,395 million in 2012). The counterparty is allowed to sell or repledge those securities in the absence of default by the Bank.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
10. Derivative Instruments and Accounting Hedges:
(a) As of December 31, 2013 and 2012, the Banks portfolio of derivative instruments is detailed as follows:
|
|
Notional amount of contract with final expiration date in |
|
Fair value |
| ||||||||||||||||||||||||||||
|
|
Up to 1 month |
|
Over 1 month and up to |
|
Over 3 months and up to |
|
Over 1 year and up to 3 |
|
Over 3 year and up to 5 |
|
Over 5 years |
|
Asset |
|
Liability |
| ||||||||||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Derivatives held for hedging purposes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross currency swap |
|
|
|
|
|
|
|
|
|
32,032 |
|
|
|
17,094 |
|
31,388 |
|
13,416 |
|
41,558 |
|
66,392 |
|
74,626 |
|
|
|
|
|
14,012 |
|
10,332 |
|
Interest rate swap |
|
8,569 |
|
|
|
|
|
|
|
4,731 |
|
|
|
25,394 |
|
27,570 |
|
8,412 |
|
17,790 |
|
117,420 |
|
116,387 |
|
714 |
|
|
|
11,312 |
|
21,311 |
|
Total derivatives held for hedging purposes |
|
8,569 |
|
|
|
|
|
|
|
36,763 |
|
|
|
42,488 |
|
58,958 |
|
21,828 |
|
59,348 |
|
183,812 |
|
191,013 |
|
714 |
|
|
|
25,324 |
|
31,643 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives held as cash flow hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap and cross currency swap |
|
|
|
151,913 |
|
|
|
|
|
59,730 |
|
|
|
313,263 |
|
55,382 |
|
209,465 |
|
14,083 |
|
300,386 |
|
78,861 |
|
37,971 |
|
22 |
|
6,681 |
|
2,055 |
|
Total Derivatives held as cash flow hedges |
|
|
|
151,913 |
|
|
|
|
|
59,730 |
|
|
|
313,263 |
|
55,382 |
|
209,465 |
|
14,083 |
|
300,386 |
|
78,861 |
|
37,971 |
|
22 |
|
6,681 |
|
2,055 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives held-for-trading purposes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency forward |
|
2,815,835 |
|
4,231,746 |
|
2,194,765 |
|
2,519,046 |
|
3,812,356 |
|
3,260,326 |
|
323,882 |
|
191,364 |
|
52,513 |
|
2,458 |
|
39 |
|
65 |
|
41,673 |
|
70,166 |
|
65,396 |
|
81,790 |
|
Cross currency swap |
|
124,909 |
|
69,220 |
|
470,928 |
|
199,338 |
|
1,400,553 |
|
1,034,040 |
|
1,195,627 |
|
1,721,408 |
|
1,024,721 |
|
719,073 |
|
1,465,280 |
|
1,026,518 |
|
193,455 |
|
177,403 |
|
243,979 |
|
166,182 |
|
Interest rate swap |
|
567,058 |
|
353,133 |
|
1,318,722 |
|
905,870 |
|
4,275,295 |
|
3,298,276 |
|
4,767,240 |
|
3,540,462 |
|
2,919,321 |
|
1,505,936 |
|
2,549,584 |
|
1,650,103 |
|
97,974 |
|
81,093 |
|
99,488 |
|
97,870 |
|
Call currency options |
|
12,491 |
|
30,306 |
|
39,109 |
|
20,938 |
|
138,809 |
|
46,686 |
|
6,572 |
|
4,795 |
|
|
|
|
|
|
|
|
|
2,301 |
|
472 |
|
3,559 |
|
395 |
|
Put currency options |
|
7,034 |
|
26,009 |
|
31,078 |
|
15,288 |
|
75,379 |
|
25,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
600 |
|
341 |
|
705 |
|
387 |
|
Total derivatives of negotiation |
|
3,527,327 |
|
4,710,414 |
|
4,054,602 |
|
3,660,480 |
|
9,702,392 |
|
7,665,308 |
|
6,293,321 |
|
5,458,029 |
|
3,996,555 |
|
2,227,467 |
|
4,014,903 |
|
2,676,686 |
|
336,003 |
|
329,475 |
|
413,127 |
|
346,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
3,535,896 |
|
4,862,327 |
|
4,054,602 |
|
3,660,480 |
|
9,798,885 |
|
7,665,308 |
|
6,649,072 |
|
5,572,369 |
|
4,227,848 |
|
2,300,898 |
|
4,499,101 |
|
2,946,560 |
|
374,688 |
|
329,497 |
|
445,132 |
|
380,322 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
10. Derivative Instruments and Accounting Hedges, continued:
(b) Fair value Hedges:
The Bank uses cross-currency swaps and interest rate swaps to hedge its exposure to changes in the fair value of the hedged elements attributable to interest rates. The aforementioned hedge instruments change the effective cost of long-term issuances from a fixed interest rate to a floating interest rate, decreasing the duration and modifying the sensitivity to the shortest segments of the curve.
Below is a detail of the hedged elements and hedge instruments under fair value hedges as of December 31, 2013 and 2012:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Hedged element |
|
|
|
|
|
Commercial loans |
|
128,934 |
|
147,572 |
|
Corporate bonds |
|
164,526 |
|
161,747 |
|
|
|
|
|
|
|
Hedge instrument |
|
|
|
|
|
Cross currency swap |
|
128,934 |
|
147,572 |
|
Interest rate swap |
|
164,526 |
|
161,747 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
10. Derivative Instruments and Accounting Hedges, continued:
(c) Cash flow Hedges:
(c.1) The Bank uses cross currency swaps to hedge the risk from variability of cash flows attributable to changes in the interest rates of bonds and foreign exchange of bonds issued abroad in Mexican pesos, Hong Kong dollars, Peruvian nuevo sol, Swiss franc, Japanese yen to fix rate and foreign banks obligations. The cash flows of the cross currency swaps equal the cash flows of the hedged items, which modify uncertain cash flows to known cash flows derived from a fixed interest rate.
Additionally, these cross currency swap contracts used to hedge the risk from variability of the Unidad de Fomento (CLF) in assets flows denominated in CLF until a nominal amount equal to the portion notional of the hedging instrument CLF, whose readjustment daily impact the item interest revenue of the financial statements.
(c.2) Below are the cash flows of bonds issued abroad objects of this hedge and cash flows of the active part of the derivative:
|
|
2013 |
| ||||||||||||
|
|
Up to1 |
|
Over 1 month |
|
Over 3 |
|
Over 1 year |
|
Over 3 years |
|
Over 5 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Hedge item |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outflows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Bond MXN |
|
(206 |
) |
(619 |
) |
(62,275 |
) |
|
|
|
|
|
|
(63,100 |
) |
Corporate Bond HKD |
|
|
|
|
|
(7,011 |
) |
(14,022 |
) |
(14,009 |
) |
(240,224 |
) |
(275,266 |
) |
Corporate Bond PEN |
|
|
|
|
|
(578 |
) |
(1,154 |
) |
(14,690 |
) |
|
|
(16,422 |
) |
Corporate Bond CHF |
|
(216 |
) |
|
|
(4,720 |
) |
(143,070 |
) |
(229,701 |
) |
(105,325 |
) |
(483,032 |
) |
Obligation USD |
|
(273 |
) |
(82 |
) |
(1,064 |
) |
(135,478 |
) |
|
|
|
|
(136,897 |
) |
Corporate Bond JPY |
|
|
|
(76 |
) |
(560 |
) |
(56,964 |
) |
(598 |
) |
(29,173 |
) |
(87,371 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross Currency Swap MXN |
|
206 |
|
619 |
|
62,275 |
|
|
|
|
|
|
|
63,100 |
|
Cross Currency Swap HKD |
|
|
|
|
|
7,011 |
|
14,022 |
|
14,009 |
|
240,224 |
|
275,266 |
|
Cross Currency Swap PEN |
|
|
|
|
|
578 |
|
1,154 |
|
14,690 |
|
|
|
16,422 |
|
Cross Currency Swap CHF |
|
216 |
|
|
|
4,720 |
|
143,070 |
|
229,701 |
|
105,325 |
|
483,032 |
|
Cross Currency Swap USD |
|
273 |
|
82 |
|
1,064 |
|
135,478 |
|
|
|
|
|
136,897 |
|
Cross Currency Swap JPY |
|
|
|
76 |
|
560 |
|
56,964 |
|
598 |
|
29,173 |
|
87,371 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
10. Derivative Instruments and Accounting Hedges, continued:
(c) Cash flow Hedges, continued:
|
|
2012 |
| ||||||||||||
|
|
Up to1 |
|
Over 1 |
|
Over 3 |
|
Over 1 |
|
Over 3 years |
|
Over 5 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Hedge item |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outflows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Bond MXN |
|
(235 |
) |
(470 |
) |
(2,348 |
) |
(58,199 |
) |
|
|
|
|
(61,252 |
) |
Corporate Bond HKD |
|
|
|
|
|
(3,149 |
) |
(6,309 |
) |
(6,332 |
) |
(110,408 |
) |
(126,198 |
) |
Corporate Bond PEN |
|
|
|
|
|
(1,138 |
) |
(2,276 |
) |
(16,358 |
) |
|
|
(19,772 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross Currency Swap MXN |
|
235 |
|
470 |
|
2,348 |
|
58,199 |
|
|
|
|
|
61,252 |
|
Cross Currency Swap HKD |
|
|
|
|
|
3,149 |
|
6,309 |
|
6,332 |
|
110,408 |
|
126,198 |
|
Cross Currency Swap PEN |
|
|
|
|
|
1,138 |
|
2,276 |
|
16,358 |
|
|
|
19,772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
10. Derivative Instruments and Accounting Hedges, continued:
(c) Cash flow Hedges, continued:
(c.2) Bellow are cash flow of underlying assets portfolio and cash flow of pasive part of derivative:
|
|
2013 |
| ||||||||||||
|
|
Up to1 |
|
Over 1 |
|
Over 3 |
|
Over 1 year |
|
Over 3 years |
|
Over 5 years |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge ítem |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow in CLF |
|
2,751 |
|
233 |
|
82,888 |
|
359,407 |
|
237,627 |
|
351,724 |
|
1,034,630 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outflows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross Currency Swap MXN |
|
|
|
|
|
(61,400 |
) |
|
|
|
|
|
|
(61,400 |
) |
Cross Currency Swap HKD |
|
|
|
|
|
(5,791 |
) |
(11,617 |
) |
(11,562 |
) |
(217,999 |
) |
(246,969 |
) |
Cross Currency Swap PEN |
|
|
|
|
|
(450 |
) |
(898 |
) |
(14,673 |
) |
|
|
(16,021 |
) |
Cross Currency Swap JPY |
|
|
|
(233 |
) |
(2,099 |
) |
(63,679 |
) |
(1,846 |
) |
(30,920 |
) |
(98,777 |
) |
Cross Currency Swap USD |
|
|
|
|
|
(3,314 |
) |
(133,094 |
) |
|
|
|
|
(136,408 |
) |
Cross Currency Swap CHF |
|
(2,751 |
) |
|
|
(9,834 |
) |
(150,119 |
) |
(209,546 |
) |
(102,805 |
) |
(475,055 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
10. Derivative Instruments and Accounting Hedges, continued:
(c) Cash flow Hedges, continued:
|
|
2012 |
| ||||||||||||
|
|
Up to1 |
|
Over 1 |
|
Over 3 |
|
Over 1 year |
|
Over 3 years |
|
Over 5 years |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge ítem |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow in CLF |
|
|
|
|
|
4,496 |
|
66,537 |
|
20,317 |
|
106,869 |
|
198,219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outflows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross Currency Swap MXN |
|
|
|
|
|
(1,644 |
) |
(60,173 |
) |
|
|
|
|
(61,817 |
) |
Cross Currency Swap HKD |
|
|
|
|
|
(2,411 |
) |
(5,482 |
) |
(5,498 |
) |
(106,869 |
) |
(120,260 |
) |
Cross Currency Swap PEN |
|
|
|
|
|
(441 |
) |
(882 |
) |
(14,819 |
) |
|
|
(16,142 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
10. Derivative Instruments and Accounting Hedges, continued:
Respect to assets hedged, these are revalued monthly according to the variation of the UF, which is equivalent to realize monthly reinvestment of the assets until maturity of the relationship hedging.
(c.3) The accumulated amount of unrealized gain was an charge to equity for an amount of Ch$18,069 million (credit to equity for Ch$1,777 million in 2012) generated from hedging instruments, which has been recorded in equity. The net effect of deferred tax was a charge to equity for Ch$14,455 millions in 2013 (credit to equity for Ch$1,429 millions in 2012)
The accumulated balance for this concept net of deferred tax as of December 31, 2013 corresponds to a credit of equity amounted Ch$13,421 million (credit to equity amounted Ch$1,034 million in 2012)
(c.4) The net effect in income of derivatives cash flow hedges amount to Ch$51,795 million in 2013 (charge to income for Ch$2,318 millions en 2012).
(c.5) As of December 31, 2013 and 2012, it not exist inefficiency in cash flow hedge, because both, hedge item and hedge instruments are mirror one of other, it means that all variation of value attributable to rate and revaluation components are netted almost totally.
(c.6) As of December 31, 2013 and 2012, the Bank has not hedges of net investments in foreign business
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
11. Loans and advances to Banks:
(a) As of December 31, 2013 and 2012, amounts are detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Domestic Banks |
|
|
|
|
|
Interbank loans |
|
100,012 |
|
14,309 |
|
Other credits with domestic banks |
|
|
|
|
|
Provisions for loans to domestic banks |
|
(36 |
) |
(5 |
) |
Subtotal |
|
99,976 |
|
14,304 |
|
|
|
|
|
|
|
Foreign Banks |
|
|
|
|
|
Loans to foreign banks |
|
252,697 |
|
146,980 |
|
Chilean exports trade loans |
|
97,194 |
|
67,787 |
|
Credits with third countries |
|
12,864 |
|
14,509 |
|
Provisions for loans to foreign banks |
|
(1,256 |
) |
(954 |
) |
Subtotal |
|
361,499 |
|
228,322 |
|
|
|
|
|
|
|
Central Bank of Chile |
|
|
|
|
|
Non-available Central Bank deposits |
|
600,000 |
|
1,100,000 |
|
Other Central Bank credits |
|
581 |
|
696 |
|
Subtotal |
|
600,581 |
|
1,100,696 |
|
Total |
|
1,062,056 |
|
1,343,322 |
|
(b) Provisions for loans to banks are detailed below:
|
|
Banks Location |
|
|
| ||
Detail |
|
Chile |
|
Abroad |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2012 |
|
5 |
|
1,001 |
|
1,006 |
|
Charge-offs |
|
|
|
|
|
|
|
Provisions established |
|
|
|
|
|
|
|
Provisions released |
|
|
|
(47 |
) |
(47 |
) |
Balance as of December 31, 2012 |
|
5 |
|
954 |
|
959 |
|
Charge-offs |
|
|
|
|
|
|
|
Provisions established |
|
31 |
|
302 |
|
333 |
|
Provisions released |
|
|
|
|
|
|
|
Balance as of December 31, 2013 |
|
36 |
|
1,256 |
|
1,292 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) Loans to Customers:
(a.i) As of December 31, 2013 and 2012, the composition of the portfolio of loans is the following:
|
|
As of December 31, 2013 |
| ||||||||||||||
|
|
Assets before allowance |
|
Allowances established |
|
|
| ||||||||||
|
|
Normal |
|
Substandard |
|
Non-Complying |
|
Total |
|
Individual |
|
Group |
|
Total |
|
Net assets |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Commercial loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
9,501,576 |
|
117,957 |
|
269,260 |
|
9,888,793 |
|
(95,962 |
) |
(86,529 |
) |
(182,491 |
) |
9,706,302 |
|
Foreign trade loans |
|
1,027,507 |
|
73,090 |
|
54,084 |
|
1,154,681 |
|
(68,272 |
) |
(642 |
) |
(68,914 |
) |
1,085,767 |
|
Current account debtors |
|
253,198 |
|
3,160 |
|
2,931 |
|
259,289 |
|
(3,031 |
) |
(3,332 |
) |
(6,363 |
) |
252,926 |
|
Factoring transactions |
|
520,776 |
|
2,538 |
|
745 |
|
524,059 |
|
(9,570 |
) |
(822 |
) |
(10,392 |
) |
513,667 |
|
Commercial lease transactions (1) |
|
1,156,350 |
|
27,394 |
|
26,003 |
|
1,209,747 |
|
(5,265 |
) |
(10,224 |
) |
(15,489 |
) |
1,194,258 |
|
Other loans and accounts receivable |
|
34,621 |
|
307 |
|
5,011 |
|
39,939 |
|
(762 |
) |
(3,287 |
) |
(4,049 |
) |
35,890 |
|
Subtotal |
|
12,494,028 |
|
224,446 |
|
358,034 |
|
13,076,508 |
|
(182,862 |
) |
(104,836 |
) |
(287,698 |
) |
12,788,810 |
|
Mortgage loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage bonds |
|
81,704 |
|
|
|
5,650 |
|
87,354 |
|
|
|
(220 |
) |
(220 |
) |
87,134 |
|
Transferable mortgage loans |
|
120,584 |
|
|
|
2,321 |
|
122,905 |
|
|
|
(285 |
) |
(285 |
) |
122,620 |
|
Other residential real estate mortgage loans |
|
4,455,510 |
|
|
|
61,312 |
|
4,516,822 |
|
|
|
(17,997 |
) |
(17,997 |
) |
4,498,825 |
|
Credits from ANAP |
|
24 |
|
|
|
|
|
24 |
|
|
|
|
|
|
|
24 |
|
Residential lease transactions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loans and accounts receivable |
|
5,155 |
|
|
|
47 |
|
5,202 |
|
|
|
|
|
|
|
5,202 |
|
Subtotal |
|
4,662,977 |
|
|
|
69,330 |
|
4,732,307 |
|
|
|
(18,502 |
) |
(18,502 |
) |
4,713,805 |
|
Consumer loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans in installments |
|
1,865,945 |
|
|
|
169,216 |
|
2,035,161 |
|
|
|
(134,460 |
) |
(134,460 |
) |
1,900,701 |
|
Current account debtors |
|
231,493 |
|
|
|
9,459 |
|
240,952 |
|
|
|
(7,844 |
) |
(7,844 |
) |
233,108 |
|
Credit card debtors |
|
758,742 |
|
|
|
25,040 |
|
783,782 |
|
|
|
(31,666 |
) |
(31,666 |
) |
752,116 |
|
Consumer lease transactions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loans and accounts receivable |
|
185 |
|
|
|
616 |
|
801 |
|
|
|
(308 |
) |
(308 |
) |
493 |
|
Subtotal |
|
2,856,365 |
|
|
|
204,331 |
|
3,060,696 |
|
|
|
(174,278 |
) |
(174,278 |
) |
2,886,418 |
|
Total |
|
20,013,370 |
|
224,446 |
|
631,695 |
|
20,869,511 |
|
(182,862 |
) |
(297,616 |
) |
(480,478 |
) |
20,389,033 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
12. Loans to Customers net, continued:
(a.i) Loans to Customers continued:
|
|
As of December 31, 2012 |
| ||||||||||||||
|
|
Assets before allowances |
|
Allowances established |
|
|
| ||||||||||
|
|
Normal Portfolio |
|
Impaired |
|
Non-Complying |
|
Total |
|
Individual |
|
Group |
|
Total |
|
Net assets |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Commercial loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
8,185,062 |
|
112,507 |
|
243,605 |
|
8,541,174 |
|
(93,583 |
) |
(67,746 |
) |
(161,329 |
) |
8,379,845 |
|
Foreign trade loans |
|
1,134,137 |
|
58,728 |
|
48,090 |
|
1,240,955 |
|
(55,216 |
) |
(491 |
) |
(55,707 |
) |
1,185,248 |
|
Current account debtors |
|
181,709 |
|
5,266 |
|
2,424 |
|
189,399 |
|
(2,418 |
) |
(2,504 |
) |
(4,922 |
) |
184,477 |
|
Factoring transactions |
|
596,916 |
|
1,291 |
|
7,930 |
|
606,137 |
|
(9,535 |
) |
(556 |
) |
(10,091 |
) |
596,046 |
|
Commercial lease transactions (1) |
|
1,061,740 |
|
26,317 |
|
25,215 |
|
1,113,272 |
|
(3,528 |
) |
(9,136 |
) |
(12,664 |
) |
1,100,608 |
|
Other loans and accounts receivable |
|
36,641 |
|
260 |
|
3,746 |
|
40,647 |
|
(621 |
) |
(1,974 |
) |
(2,595 |
) |
38,052 |
|
Subtotal |
|
11,196,205 |
|
204,369 |
|
331,010 |
|
11,731,584 |
|
(164,901 |
) |
(82,407 |
) |
(247,308 |
) |
11,484,276 |
|
Mortgage loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage bonds |
|
103,169 |
|
|
|
6,046 |
|
109,215 |
|
|
|
(724 |
) |
(724 |
) |
108,491 |
|
Transferable mortgage loans |
|
148,216 |
|
|
|
2,990 |
|
151,206 |
|
|
|
(527 |
) |
(527 |
) |
150,679 |
|
Other residential real estate mortgage loans |
|
3,897,399 |
|
|
|
40,367 |
|
3,937,766 |
|
|
|
(14,829 |
) |
(14,829 |
) |
3,922,937 |
|
Credits from ANAP |
|
27 |
|
|
|
|
|
27 |
|
|
|
|
|
|
|
27 |
|
Residential lease transactions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loans and accounts receivable |
|
453 |
|
|
|
|
|
453 |
|
|
|
|
|
|
|
453 |
|
Subtotal |
|
4,149,264 |
|
|
|
49,403 |
|
4,198,667 |
|
|
|
(16,080 |
) |
(16,080 |
) |
4,182,587 |
|
Consumer loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans in installments |
|
1,761,070 |
|
|
|
145,203 |
|
1,906,273 |
|
|
|
(124,886 |
) |
(124,886 |
) |
1,781,387 |
|
Current account debtors |
|
235,122 |
|
|
|
9,944 |
|
245,066 |
|
|
|
(6,950 |
) |
(6,950 |
) |
238,116 |
|
Credit card debtors |
|
654,976 |
|
|
|
25,010 |
|
679,986 |
|
|
|
(31,996 |
) |
(31,996 |
) |
647,990 |
|
Consumer lease transactions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loans and accounts receivable |
|
183 |
|
|
|
6 |
|
189 |
|
|
|
(215 |
) |
(215 |
) |
(26 |
) |
Subtotal |
|
2,651,351 |
|
|
|
180,163 |
|
2,831,514 |
|
|
|
(164,047 |
) |
(164,047 |
) |
2,667,467 |
|
Total |
|
17,996,820 |
|
204,369 |
|
560,576 |
|
18,761,765 |
|
(164,901 |
) |
(262,534 |
) |
(427,435 |
) |
18,334,330 |
|
(1) In this item, the Bank finances its customers purchases of assets, including real estate and other personal property, through finance lease agreements. As of December 31, 2013, MCh$503,972 (MCh$451,647 in 2012) correspond to finance leases for real estate and MCh$705,775 (MCh$661,625 in 2012), correspond to finance leases for other assets.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
12. Loans to Customers net, continued:
(a.ii) Impaired Portfolio
As of December 31, 2013 and 2012, the Bank presents the following details of normal and impaired portfolio:
|
|
Assets before Allowances |
|
Allowances established |
|
|
|
|
| ||||||||||||||||||||
|
|
Normal Portfolio |
|
Impaired Portfolio |
|
Total |
|
Individual Provisions |
|
Group Provisions |
|
Total |
|
Net assets |
| ||||||||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
12,629,450 |
|
11,349,867 |
|
447,058 |
|
381,717 |
|
13,076,508 |
|
11,731,584 |
|
(182,862 |
) |
(164,901 |
) |
(104,836 |
) |
(82,407 |
) |
(287,698 |
) |
(247,308 |
) |
12,788,810 |
|
11,484,276 |
|
Mortgage loans |
|
4,662,977 |
|
4,149,264 |
|
69,330 |
|
49,403 |
|
4,732,307 |
|
4,198,667 |
|
|
|
|
|
(18,502 |
) |
(16,080 |
) |
(18,502 |
) |
(16,080 |
) |
4,713,805 |
|
4,182,587 |
|
Consumer loans |
|
2,856,365 |
|
2,651,351 |
|
204,331 |
|
180,163 |
|
3,060,696 |
|
2,831,514 |
|
|
|
|
|
(174,278 |
) |
(164,047 |
) |
(174,278 |
) |
(164,047 |
) |
2,886,418 |
|
2,667,467 |
|
Total |
|
20,148,792 |
|
18,150,482 |
|
720,719 |
|
611,283 |
|
20,869,511 |
|
18,761,765 |
|
(182,862 |
) |
(164,901 |
) |
(297,616 |
) |
(262,534 |
) |
(480,478 |
) |
(427,435 |
) |
20,389,033 |
|
18,334,330 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
12. Loans to Customers, continued:
(b) Allowances for loan losses:
Movements in allowances for loan losses during the 2013 and 2012 periods are as follows:
|
|
Allowances |
|
|
| ||
|
|
Individual |
|
Group |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2012 |
|
160,377 |
|
224,113 |
|
384,490 |
|
Charge-offs: |
|
|
|
|
|
|
|
Commercial loans |
|
(9,144 |
) |
(34,020 |
) |
(43,164 |
) |
Mortgage loans |
|
|
|
(4,253 |
) |
(4,253 |
) |
Consumer loans |
|
|
|
(135,316 |
) |
(135,316 |
) |
Total charge-offs |
|
(9,144 |
) |
(173,589 |
) |
(182,733 |
) |
Allowances established |
|
13,668 |
|
212,010 |
|
225,678 |
|
Allowances released (*) |
|
|
|
|
|
|
|
Balance as of December 31, 2012 |
|
164,901 |
|
262,534 |
|
427,435 |
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2013 |
|
164,901 |
|
262,534 |
|
427,435 |
|
Charge-offs: |
|
|
|
|
|
|
|
Commercial loans |
|
(8,648 |
) |
(27,381 |
) |
(36,029 |
) |
Mortgage loans |
|
|
|
(3,242 |
) |
(3,242 |
) |
Consumer loans |
|
|
|
(157,264 |
) |
(157,264 |
) |
Total charge-offs |
|
(8,648 |
) |
(187,887 |
) |
(196,535 |
) |
Debt exchange (see letter g) |
|
(12,556 |
) |
|
|
(12,556 |
) |
Allowances established |
|
39,165 |
|
222,969 |
|
262,134 |
|
Allowances released (*) |
|
|
|
|
|
|
|
Balance as of December 31, 2013 |
|
182,862 |
|
297,616 |
|
480,478 |
|
(*) See note No. 12 (e) - Sale or transfer of credits from the loans to customers.
In addition to these allowances for loan losses, the Bank also establishes country risk provisions to hedge foreign transactions as well as additional provisions agreed upon by the Board of Directors, which are presented within liabilities in Provisions (Note No. 24).
Other Disclosures:
1. As of December 31, 2013 and 2012, the Bank and its subsidiaries accomplished buy and sell of loan portfolios. The effect in income is no more than 5% of net income before taxes, as detailed in Note No. 12 (e).
2. As of December 31, 2013 and December 31, 2012, the Bank and its subsidiaries have derecognized 100% of its sold loan portfolio and it has been transferred all or substantially all risks and benefits related to these financial assets.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
12. Loans to Customers, continued:
(c) Finance lease contracts:
The Banks scheduled cash flows to be received from finance leasing contracts have the following maturities:
|
|
Total receivable |
|
Unearned income |
|
Net lease receivable (*) |
| ||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due within one year |
|
435,789 |
|
394,284 |
|
(53,920 |
) |
(50,643 |
) |
381,869 |
|
343,641 |
|
Due after 1 year but within 2 years |
|
314,546 |
|
293,525 |
|
(39,405 |
) |
(36,615 |
) |
275,141 |
|
256,910 |
|
Due after 2 years but within 3 years |
|
197,979 |
|
189,111 |
|
(25,097 |
) |
(23,440 |
) |
172,882 |
|
165,671 |
|
Due after 3 years but within 4 years |
|
121,241 |
|
112,381 |
|
(16,987 |
) |
(15,766 |
) |
104,254 |
|
96,615 |
|
Due after 4 years but within 5 years |
|
78,992 |
|
75,451 |
|
(12,663 |
) |
(11,339 |
) |
66,329 |
|
64,112 |
|
Due after 5 years |
|
232,607 |
|
206,025 |
|
(29,879 |
) |
(25,733 |
) |
202,728 |
|
180,292 |
|
Total |
|
1,381,154 |
|
1,270,777 |
|
(177,951 |
) |
(163,536 |
) |
1,203,203 |
|
1,107,241 |
|
(*) The net balance receivable does not include past-due portfolio totaling MCh$6,544 as of December 31, 2013 (MCh$6,031 in 2012).
The bank has entered into commercial leases of real estate, industrial machinery, vehicles and computer equipment. These leases have an average useful life of between 3 and 8 years.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
12. Loans to Customers, continued:
(d) Loans by industry sector:
The following table details the Banks loan portfolio (before allowances for loans losses) as of December 31, 2013 and 2012 by the customers industry sector:
|
|
Location |
|
|
|
|
|
|
|
|
| ||||||
|
|
Chile |
|
Abroad |
|
Total |
| ||||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
|
|
2012 |
|
|
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
% |
|
MCh$ |
|
% |
|
Commercial loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commerce |
|
2,513,287 |
|
2,286,500 |
|
39,677 |
|
28,173 |
|
2,552,964 |
|
12.23 |
|
2,314,673 |
|
12.34 |
|
Transportation |
|
1,602,348 |
|
1,470,358 |
|
|
|
|
|
1,602,348 |
|
7.68 |
|
1,470,358 |
|
7.84 |
|
Manufacturing |
|
1,365,562 |
|
1,380,994 |
|
|
|
|
|
1,365,562 |
|
6.54 |
|
1,380,994 |
|
7.36 |
|
Services |
|
1,240,028 |
|
1,310,573 |
|
|
|
|
|
1,240,028 |
|
5.94 |
|
1,310,573 |
|
6.99 |
|
Construction |
|
1,457,770 |
|
1,252,546 |
|
311 |
|
|
|
1,458,081 |
|
6.99 |
|
1,252,546 |
|
6.68 |
|
Financial Services |
|
1,627,844 |
|
1,148,094 |
|
415,345 |
|
706,477 |
|
2,043,189 |
|
9.79 |
|
1,854,571 |
|
9.88 |
|
Agriculture and livestock |
|
914,105 |
|
901,300 |
|
|
|
|
|
914,105 |
|
4.38 |
|
901,300 |
|
4.80 |
|
Electricity, gas and water |
|
504,088 |
|
328,763 |
|
27,885 |
|
|
|
531,973 |
|
2.55 |
|
328,763 |
|
1.75 |
|
Mining |
|
340,045 |
|
305,386 |
|
|
|
67,051 |
|
340,045 |
|
1.63 |
|
372,437 |
|
1.99 |
|
Fishing |
|
219,173 |
|
233,893 |
|
|
|
|
|
219,173 |
|
1.05 |
|
233,893 |
|
1.25 |
|
Other |
|
790,290 |
|
226,999 |
|
18,750 |
|
84,477 |
|
809,040 |
|
3.87 |
|
311,476 |
|
1.65 |
|
Subtotal |
|
12,574,540 |
|
10,845,406 |
|
501,968 |
|
886,178 |
|
13,076,508 |
|
62.65 |
|
11,731,584 |
|
62.53 |
|
Residential mortgage loans |
|
4,732,307 |
|
4,198,667 |
|
|
|
|
|
4,732,307 |
|
22.68 |
|
4,198,667 |
|
22.38 |
|
Consumer loans |
|
3,060,696 |
|
2,831,514 |
|
|
|
|
|
3,060,696 |
|
14.67 |
|
2,831,514 |
|
15.09 |
|
Total |
|
20,367,543 |
|
17,875,587 |
|
501,968 |
|
886,178 |
|
20,869,511 |
|
100.00 |
|
18,761,765 |
|
100.00 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
12. Loans to Customers, continued:
(e) Purchase of loan portfolio
During months of August, September and December of 2013, the Bank has acquired portfolio loans by an amount of MCh$467,717.
(f) Sale or transfer of credits from the loans to customers:
During 2013 and 2012 Banco de Chile has carried out transactions of sale or transfer of the loan portfolio according to the following:
As of December 31, 2013 |
| ||||||
Carrying |
|
Allowances |
|
Sale price |
|
Effect on income |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
197,820 |
|
(355 |
) |
198,134 |
|
669 |
|
As of December 31, 2012 |
| ||||||
Carrying |
|
Allowances |
|
Sale price |
|
Effect on income |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
118,347 |
|
(199 |
) |
118,347 |
|
199 |
|
(g) On June 27, 2013, it was proceeded to make a Debt Swap of impaired portfolio. Representative promissory notes of credit were replaced by financial instruments (bonds), issued by the same debtor. The credit, at date of exchange, amounted MCh$13,952 with a provision for loan losses of MCh$12,556. Financial instruments (bonds) received was classified like financial assets available-for-sale.
At date of exchange, it does not exist active market for this type of financial instrument, and so, there was not sufficient data available for measure its fair value. Then it determined that fair value was equivalent to book value of credit exchanged. For this transaction it was not recognized income effect.
On December 27, 2013, the SBIF instructed to classify instruments mentioned above like Financial assets Held-for-Trading, which it produced a credit to income for MCh$578 as of December 31, 2013.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
12. Loans to Customers, continued:
(h) Own assets securitizations:
During 2012, the Bank subscribed a Securitization agreement issuance and an assignment agreement without responsibility with the subsidiary Banchile Securitizadora S.A., whereby two fixed rate commercial loans were transferred. Then Banchile Securitizadora S.A. created the Segregated Equity (Patrimonio Separado) according to the title XVIII of the law No. 18,045. The securitizated assets finally became part of the separated equity in order to support the serie A bond issuance, which were fully transferred to third parties.
As of the transaction date, the book value of the credits assigned was Ch$30,276 million and the effective amount received in the transference was Ch$30,407 million, which generated an income of Ch$131 million and also a credit provisions release for the amount of Ch$24 million. Furthermore, the subsidiary Banchile Securitizadora S.A. charged a commission for Ch$160 million, to the bank corresponding to debt structured process services.
The bank acquired the subordinated bond (serie C) issued by Segregated Equity in Ch$23,310 as of December 31, 2013, equivalent to UF 1 (Unidad de Fomento), which represented less than 0.001% of the total amount of the Bond issued by Segregated Equity for the amount of Ch$30,407 million (par value amounted Ch$30,196 million). This bond was registered in available-for-sale and as of December 31, 2012 its fair value is Ch$22,841, this amount represents the maximum exposure of the bank will have in this transaction.
The bank analyzed all the relevant aspects of the transaction, according to indicated in the NIC 39 and in the IFRS 10, related to assets derecognized and consolidation rules. In this regards the bank concludes that (i) has substantially transferred all benefits and risks of assets assigned to the Segregated Equity; (ii) do not manage directly nor indirectly the activities of the segregated equity; (iii) do not have decision rights, which allows to obtain substantial benefits from the assets assigned; (iv) do not maintain any control over assets assigned, neither over the Segregate Equity. As a consequence of this, the bank proceeded to derecognized the credits involved in transaction and have not consolidated with the Segregated Equity.
Additional information of the transaction |
|
2013 |
|
2012 |
|
|
|
|
|
|
|
Securitized asset value |
|
Ch$20,517 million |
|
Ch$24,795 million |
|
Securitized bond value |
|
Ch$20,385 million |
|
Ch$24,644 million |
|
|
|
|
|
|
|
Securitized assets - remaining term |
|
4 years |
|
5 years |
|
Securitized bond - remaining term |
|
4 years |
|
5 years |
|
Rate securitized assets |
|
UF + 4.83% |
|
UF + 4.83% |
|
Rate securitized bond |
|
UF + 4.54% |
|
UF + 4.54% |
|
During 2013 the bank has not executed securitization transaction involving owns assets.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
As of December 31, 2013 and 2012, investment securities classified as available-for-sale and held-to-maturity are detailed as follows:
|
|
2013 |
|
2012 |
| ||||||||
|
|
Available for |
|
Held to |
|
Total |
|
Available for |
|
Held to |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Instruments issued by the Chilean Government and Central Bank of Chile: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds issued by the Chilean Government and Central Bank |
|
333,035 |
|
|
|
333,035 |
|
110,569 |
|
|
|
110,569 |
|
Promissory notes issued by the Chilean Government and Central Bank |
|
50,415 |
|
|
|
50,415 |
|
969 |
|
|
|
969 |
|
Other instruments |
|
202,958 |
|
|
|
202,958 |
|
140,246 |
|
|
|
140,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit promissory notes from domestic banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage bonds from domestic banks |
|
96,933 |
|
|
|
96,933 |
|
85,688 |
|
|
|
85,688 |
|
Bonds from domestic banks |
|
128,500 |
|
|
|
128,500 |
|
116,100 |
|
|
|
116,100 |
|
Deposits from domestic banks |
|
617,816 |
|
|
|
617,816 |
|
560,390 |
|
|
|
560,390 |
|
Bonds from other Chilean companies |
|
13,558 |
|
|
|
13,558 |
|
32,281 |
|
|
|
32,281 |
|
Promissory notes issued by other Chilean companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments |
|
154,267 |
|
|
|
154,267 |
|
129,693 |
|
|
|
129,693 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instruments issued abroad |
|
|
|
|
|
|
|
|
|
|
|
|
|
Instruments from foreign governments or central banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments |
|
76,222 |
|
|
|
76,222 |
|
88,504 |
|
|
|
88,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
1,673,704 |
|
|
|
1,673,704 |
|
1,264,440 |
|
|
|
1,264,440 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
13. Investment Securities, continued:
Instruments issued by the Chilean Government and Central Bank include instruments with agreements to repurchase sold to clients and financial institutions, for December 31, 2013 this amount was $16,840 million (no movements for this item in 2012). Repurchase agreements had a average maturity of 3 day in December 2013.
Under classification of Other instruments issued in Chile are included securities sold under repurchase agreements to customers and financial institutions for an amount of MCh$109 million (MCh$5,266 million in 2012).
In instruments issued abroad are include mainly bonds banks and shares.
As of December 31, 2013, the portfolio of financial assets available-for-sale includes a net unrealized loss of MCh$29,372 (MCh$17,995 in 2012), recorded in other comprehensive income within equity.
As of December 31, 2013 there is not impairment of financial assets available-for-sale (as of December 31, 2012 there was impairment of financial assets available-for-sale for an amount of Ch$551 millions).
Realized profits and losses are calculated as the proceeds from sales less the cost (specific identification method) of the investments identified as for sale. In addition, any unrealized profit or loss previously recorded in equity for these investments is reversed when recorded in the income statements.
Profits and losses realized on the sale of available-for-sale investments as of December 31, 2013 and 2012 are shown in Note 30 Net Financial Operating Income.
Gross profits and losses realized and unrealized on the sale of available for sale investments for the years-ended December 31, 2013 and 2012 are as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Unrealized (losses)/profits during the period |
|
25,972 |
|
26,259 |
|
Realized losses/(profits) (reclassified) |
|
(11,751 |
) |
(1,749 |
) |
Subtotal unrealized during the period |
|
14,221 |
|
24,510 |
|
Income tax |
|
(2,844 |
) |
(4,871 |
) |
Total unrealized during the period |
|
11,377 |
|
19,639 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
14. Investments in Other Companies:
(a) This item includes investments in other companies for an amount of MCh$16,670 (MCh$13,933 in 2012), which is detailed as follows:
|
|
|
|
|
|
|
|
Investment |
| ||||||||||
|
|
|
|
Ownership Interest |
|
Equity |
|
Book Value |
|
Income (Loss) |
| ||||||||
Company |
|
Shareholder |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
|
|
% |
|
% |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Associates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrador Financiero del Transantiago S.A. (*) |
|
Banco de Chile |
|
20.00 |
|
20.00 |
|
9,737 |
|
6,076 |
|
1,948 |
|
1,215 |
|
733 |
|
(527 |
) |
Soc. Operadora de Tarjetas de Crédito Nexus S.A. |
|
Banco de Chile |
|
25.81 |
|
25.81 |
|
7,197 |
|
6,412 |
|
1,858 |
|
1,655 |
|
289 |
|
556 |
|
Redbanc S.A. |
|
Banco de Chile |
|
38.13 |
|
38.13 |
|
4,401 |
|
4,109 |
|
1,678 |
|
1,567 |
|
159 |
|
(376 |
) |
Sociedad Imerc OTC S.A. (**) (***) |
|
Banco de Chile |
|
12.49 |
|
|
|
11,411 |
|
|
|
1,425 |
|
|
|
(18 |
) |
|
|
Transbank S.A. |
|
Banco de Chile |
|
26.16 |
|
26.16 |
|
5,232 |
|
6,306 |
|
1,368 |
|
1,649 |
|
9 |
|
322 |
|
Soc. Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A (***). |
|
Banco de Chile |
|
15.00 |
|
15.00 |
|
4.529 |
|
4.337 |
|
679 |
|
651 |
|
62 |
|
112 |
|
Centro de Compensación Automatizado S.A. |
|
Banco de Chile |
|
33.33 |
|
33.33 |
|
1,982 |
|
1,609 |
|
661 |
|
536 |
|
125 |
|
115 |
|
Sociedad Interbancaria de Depósitos de Valores S.A. |
|
Banco de Chile |
|
26.81 |
|
26.81 |
|
1,978 |
|
1,711 |
|
530 |
|
459 |
|
102 |
|
79 |
|
Subtotal Associates |
|
|
|
|
|
|
|
46,467 |
|
30,560 |
|
10,147 |
|
7,732 |
|
1,461 |
|
281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint Ventures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Servipag Ltda. |
|
Banco de Chile |
|
50.00 |
|
50.00 |
|
7,180 |
|
6,756 |
|
3,590 |
|
3,378 |
|
213 |
|
(321 |
) |
Artikos Chile S.A. |
|
Banco de Chile |
|
50.00 |
|
50.00 |
|
1,341 |
|
1,129 |
|
670 |
|
564 |
|
106 |
|
(428 |
) |
Subtotal Joint Ventures |
|
|
|
|
|
|
|
8,521 |
|
7,885 |
|
4,260 |
|
3,942 |
|
319 |
|
(749 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotales |
|
|
|
|
|
|
|
54,988 |
|
38,445 |
|
14,407 |
|
11,674 |
|
1,780 |
|
(468 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments valued at cost (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bolsa de Comercio de Santiago S.A. |
|
|
|
|
|
|
|
|
|
|
|
1,646 |
|
1,646 |
|
291 |
|
239 |
|
Banco Latinoamericano de Comercio Exterior S.A. (Bladex) |
|
|
|
|
|
|
|
|
|
|
|
309 |
|
309 |
|
|
|
|
|
Bolsa Electrónica de Chile S.A. |
|
|
|
|
|
|
|
|
|
|
|
257 |
|
257 |
|
|
|
|
|
Cámara de Compensación |
|
|
|
|
|
|
|
|
|
|
|
8 |
|
8 |
|
|
|
|
|
Sociedad de Telecomunicaciones Financieras Interbancarias Mundiales (Swift) |
|
|
|
|
|
|
|
|
|
|
|
43 |
|
39 |
|
|
|
|
|
Subtotal |
|
|
|
|
|
|
|
|
|
|
|
2,263 |
|
2,259 |
|
291 |
|
239 |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
16,670 |
|
13,933 |
|
2,071 |
|
(229 |
) |
(1) |
Income from investments valorized at cost, corresponds to income recognized on cash basis (dividends). |
(*) |
On July 9, 2013 it was published in Diario Oficial of Chile (Federal Register in USA) the resolution No. 285 between Government Department of Transport and Telecommunications and Government Department of Treasury, which approved a new agreement related to the delivery of complementary services of financial management, whereby the new agreement, AFT only provide services related with financial management of the resourses of Transantiago system, all of that in the terms and conditions that establish the new contract. |
(**) |
On June 21, 2013 it was created, with other banks of the Chilean financial system, the subsidiary banking support called Servicios de Infraestructura de Mercado OTC S.A. (IMERC-OTC S.A.), where its objective will be to operate a centralized register of derivatives operations (register, confirmation, storage, consolidation and conciliation services). This new subsidiary was created with a capital of Ch$12,957,463,890 divided in 10,000 shares, without nominal value, of which Banco de Chile subscribed and paid 1,111 shares, equivalents to MCh$1,440 million paid upon constitution of society. It was subscribed and paid 8,895 shares at the date of these financial statements. |
(***) |
Banco de Chile has significant influence in Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A. y Sociedad Imerc OTC S.A., due to its right to design a member of Board of each entities mentioned. |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
14. Investments in Other Companies, continued:
(b) Associates
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Current assets |
|
537,515 |
|
383,155 |
|
Non-current assets |
|
64,904 |
|
53,946 |
|
Total Assets |
|
602,419 |
|
437,101 |
|
|
|
|
|
|
|
Current liabilities |
|
550,023 |
|
397,540 |
|
Non-current liabilities |
|
5,919 |
|
9,001 |
|
Total Liabilities |
|
555,942 |
|
406,541 |
|
Equity |
|
46,467 |
|
30,560 |
|
Minority Interest |
|
10 |
|
|
|
Total Liabilities and Equity |
|
602,419 |
|
437,101 |
|
|
|
|
|
|
|
Revenue |
|
184,912 |
|
206,069 |
|
Operating expenses |
|
(178,081 |
) |
(204,929 |
) |
Other income (expenses) |
|
448 |
|
948 |
|
Profit before tax |
|
7,279 |
|
2,088 |
|
Income tax |
|
(982 |
) |
(590 |
) |
Profit for the year |
|
6,297 |
|
1,498 |
|
(c) Joint Ventures:
The Bank has a 50% interest in Servipag Ltda. and a 50% interest in Artikos S.A., two jointly controlled entity. Banks interest of both entities is accounted for using the equity method in the consolidated financial statements.
Below it presents summarised financial information of entities controlled jointly:
|
|
Artikos |
|
Servipag |
| ||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Current assets |
|
920 |
|
442 |
|
42,788 |
|
37,416 |
|
Non-current assets |
|
734 |
|
925 |
|
16,256 |
|
16,708 |
|
Total Assets |
|
1,654 |
|
1,367 |
|
59,044 |
|
54,124 |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
313 |
|
238 |
|
48,343 |
|
44,137 |
|
Non-current liabilities |
|
|
|
|
|
3,521 |
|
3,231 |
|
Total Liabilities |
|
313 |
|
238 |
|
51,864 |
|
47,368 |
|
Equity |
|
1,341 |
|
1,129 |
|
7,180 |
|
6,756 |
|
Total Liabilities and Equity |
|
1,654 |
|
1,367 |
|
59,044 |
|
54,124 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
2,486 |
|
2,451 |
|
35,371 |
|
36,645 |
|
Operating expenses |
|
(2,270 |
) |
(3,027 |
) |
(34,042 |
) |
(36,404 |
) |
Other income (expenses) |
|
4 |
|
(8 |
) |
(808 |
) |
(729 |
) |
Profit (loss) before tax |
|
220 |
|
(584 |
) |
521 |
|
(488 |
) |
Income tax |
|
(8 |
) |
(272 |
) |
(97 |
) |
(154 |
) |
Profit (loss) for the year |
|
212 |
|
(856 |
) |
424 |
|
(642 |
) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
14. Investments in Other Companies, continued:
(d) The reconciliation between opening and ending balance of investments in other companies that are not consolidated in 2013 and 2012 is detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Beginning book value |
|
13,933 |
|
15,418 |
|
Sale of investments |
|
|
|
|
|
Acquisition of investments |
|
1,440 |
|
71 |
|
Participation in income with significant influence |
|
1,780 |
|
(468 |
) |
Dividends receivable |
|
(187 |
) |
(653 |
) |
Dividends received |
|
(956 |
) |
(943 |
) |
Payment of minimum dividends |
|
660 |
|
508 |
|
Total |
|
16,670 |
|
13,933 |
|
(e) As of December 31, 2013 and 2012 no impairment has incurred in these investments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) As of December 31, 2013 and 2012, Intangible assets are detailed as follows:
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
|
Years |
|
|
|
|
|
|
| ||||||||||||
|
|
Useful Life |
|
Remaining |
|
Gross balance |
|
Accumulated |
|
Net balance |
| ||||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of intangible asset: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in other companies |
|
|
|
7 |
|
|
|
2 |
|
4,138 |
|
4,138 |
|
(4,138 |
) |
(3,000 |
) |
|
|
1,138 |
|
Other Intangible Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software or computer programs |
|
6 |
|
6 |
|
2 |
|
3 |
|
87,014 |
|
82,736 |
|
(57,795 |
) |
(50,641 |
) |
29,219 |
|
32,095 |
|
Intangible assets arising from business combinations |
|
|
|
7 |
|
|
|
2 |
|
1,740 |
|
1,740 |
|
(1,740 |
) |
(1,261 |
) |
|
|
479 |
|
Other intangible assets |
|
|
|
|
|
|
|
|
|
501 |
|
612 |
|
(49 |
) |
(34 |
) |
452 |
|
578 |
|
Total |
|
|
|
|
|
|
|
|
|
93,393 |
|
89,226 |
|
(63,722 |
) |
(54,936 |
) |
29,671 |
|
34,290 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
15. Intangible Assets, continued:
(b) Movements in intangible assets during the 2013 and 2012 periods are as follows:
|
|
Investments |
|
Software or |
|
Intangible |
|
Other |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Gross Balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2012 |
|
4,138 |
|
74,525 |
|
1,740 |
|
102 |
|
80,505 |
|
Acquisitions |
|
|
|
8,544 |
|
|
|
572 |
|
9,116 |
|
Disposals |
|
|
|
(333 |
) |
|
|
(62 |
) |
(395 |
) |
Balance as of December 31, 2012 |
|
4,138 |
|
82,736 |
|
1,740 |
|
612 |
|
89,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions |
|
|
|
5,137 |
|
|
|
374 |
|
5,511 |
|
Disposals |
|
|
|
(859 |
) |
|
|
(485 |
) |
(1,344 |
) |
Balance as of December 31, 2013 |
|
4,138 |
|
87,014 |
|
1,740 |
|
501 |
|
93,393 |
|
Accumulated Amortization and Impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2012 |
|
(2,379 |
) |
(41,538 |
) |
(1,000 |
) |
(71 |
) |
(44,988 |
) |
Amortization for the year (*) |
|
(621 |
) |
(9,436 |
) |
(261 |
) |
(25 |
) |
(10,343 |
) |
Impairment loss (*) |
|
|
|
|
|
|
|
|
|
|
|
Disposal |
|
|
|
333 |
|
|
|
62 |
|
395 |
|
Balance as of December 31, 2012 |
|
(3,000 |
) |
(50,641 |
) |
(1,261 |
) |
(34 |
) |
(54,936 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization for the year (*) |
|
(1,138 |
) |
(7,985 |
) |
(479 |
) |
(27 |
) |
(9,629 |
) |
Impairment loss (*) |
|
|
|
(28 |
) |
|
|
|
|
(28 |
) |
Disposals |
|
|
|
859 |
|
|
|
12 |
|
871 |
|
Balance as of December 31, 2013 |
|
(4,138 |
) |
(57,795 |
) |
(1,740 |
) |
(49 |
) |
(63,722 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net balance as of December 31, 2013 |
|
|
|
29,219 |
|
|
|
452 |
|
29,671 |
|
(*) See note No. 35 Depreciation, amortization and impairment
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
15. Intangible Assets, continued:
(c) As of December 31, 2013 and 2012, the Bank has made the following commitments to purchase intangible assets, which have not been capitalized:
|
|
Amount of Commitment |
| ||
Detail |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Software and licenses |
|
9,299 |
|
6,681 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) As of December 31, 2013 and 2012, this account and its movements are detailed as follows:
|
|
Land and |
|
Equipment |
|
Other |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2012 |
|
176,266 |
|
125,819 |
|
137,120 |
|
439,205 |
|
Additions |
|
337 |
|
7,750 |
|
9,894 |
|
17,981 |
|
Disposals/write-downs |
|
(451 |
) |
(1,512 |
) |
(2,232 |
) |
(4,195 |
) |
Transfers |
|
|
|
|
|
|
|
|
|
Reclassifications |
|
|
|
|
|
19 |
|
19 |
|
Total |
|
176,152 |
|
132,057 |
|
144,801 |
|
453,010 |
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
(35,972 |
) |
(109,932 |
) |
(101,722 |
) |
(247,626 |
) |
Impairment loss (*) |
|
|
|
(31 |
) |
(164 |
) |
(195 |
) |
Balance as of December 31, 2012 |
|
140,180 |
|
22,094 |
|
42,915 |
|
205,189 |
|
|
|
|
| ||||||
Balance as of January 1, 2013 |
|
176,152 |
|
132,026 |
|
144,637 |
|
452,815 |
|
Additions |
|
62 |
|
7,509 |
|
4,678 |
|
12,249 |
|
Disposals/write-downs |
|
(365 |
) |
(1,406 |
) |
(1,710 |
) |
(3,481 |
) |
Transfers |
|
|
|
(218 |
) |
218 |
|
|
|
Reclassifications |
|
|
|
|
|
|
|
|
|
Total |
|
175,849 |
|
137,911 |
|
147,823 |
|
461,583 |
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
(38,717 |
) |
(116,081 |
) |
(108,697 |
) |
(263,495 |
) |
Impairment loss (*) (***) |
|
|
|
(84 |
) |
(426 |
) |
(510 |
) |
Balance as of December 31, 2013 |
|
137,132 |
|
21,746 |
|
38,700 |
|
197,578 |
|
|
|
|
|
|
|
|
|
|
|
Accumulated Depreciation |
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2012 |
|
(33,503 |
) |
(103,015 |
) |
(94,799 |
) |
(231,317 |
) |
Reclassifications |
|
|
|
|
|
(19 |
) |
(19 |
) |
Depreciation charges in the period (*) (**) |
|
(2,920 |
) |
(8,429 |
) |
(8,884 |
) |
(20,233 |
) |
Sales and disposals in the period |
|
451 |
|
1,512 |
|
1,980 |
|
3,943 |
|
Balance as of December 31, 2013 |
|
(35,972 |
) |
(109,932 |
) |
(101,722 |
) |
(247,626 |
) |
|
|
|
|
|
|
|
|
|
|
Reclassifications |
|
|
|
(19 |
) |
19 |
|
|
|
Depreciation charges in the period (*) (**) |
|
(2,873 |
) |
(7,716 |
) |
(8,310 |
) |
(18,899 |
) |
Sales and disposals in the period |
|
128 |
|
1,586 |
|
1,316 |
|
3,030 |
|
Balance as of December 31, 2013 |
|
(38,717 |
) |
(116,081 |
) |
(108,697 |
) |
(263,495 |
) |
(*) See Note No. 35 Depreciation, Amortization and Impairment.
(**) This amount not includes depreciation charges in the period for investments properties. This amount is include in item Other Assets for MCh$381 (MCh$381 in 2012)
(***) Not include provision related to write-offs of property and equipment for an amount of Ch$247 million (Ch$153 million in 2012)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
16. Property and equipment, continued:
(b) As of December 31, 2013 and 2012, the Bank has operating lease agreements in which it acts as lessee that cannot be terminated unilaterally; information on future payments is detailed as follows:
|
|
2013 |
| ||||||||||||||
|
|
Expense |
|
Up to 1 |
|
Over 1 |
|
Over 3 |
|
Over 1 |
|
Over 3 |
|
Over 5 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Agreements |
|
28,876 |
|
2,320 |
|
4,633 |
|
19,833 |
|
37,497 |
|
26,517 |
|
48,815 |
|
139,615 |
|
|
|
2012 |
| ||||||||||||||
|
|
Expense |
|
Up to 1 |
|
Over 1 |
|
Over 3 |
|
Over 1 |
|
Over 3 |
|
Over 5 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Agreements |
|
28,036 |
|
2,274 |
|
4,561 |
|
19,219 |
|
37,094 |
|
27,066 |
|
49,523 |
|
139,737 |
|
As these lease agreements are operating leases under IAS 17 the leased assets are not presented in the Banks statement of financial position.
The Bank has entered into commercial leases of real estate. These leases have an average life of 10 years. There are no restrictions placed upon the lessee by entering into the lease.
(c) As of December 31, 2013 and 2012, the Bank does not have any finance lease agreements as lessee and, therefore, there are no property and equipment balances to be reported from such transactions as of December 31, 2013 and 2012.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
17. Current and Deferred Taxes:
(a) Current Taxes:
As of each year end, the Bank and its subsidiaries have established a First Category Income Tax Provision determined in accordance with current tax laws. This provision is presented net of recoverable taxes, detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Income taxes |
|
85,336 |
|
61,876 |
|
Sole first category tax |
|
23 |
|
|
|
Tax on non-deductible expenses (35%) |
|
1,885 |
|
3,860 |
|
Less: |
|
|
|
|
|
Monthly prepaid taxes (PPM) |
|
(73,694 |
) |
(41,960 |
) |
Credit for training expenses |
|
(1,714 |
) |
(1,545 |
) |
Other |
|
(4,705 |
) |
965 |
|
Total current taxes |
|
7,131 |
|
23,196 |
|
|
|
|
|
|
|
Tax rate |
|
20 |
% |
20 |
% |
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Current tax assets |
|
3,202 |
|
2,684 |
|
Current tax liabilities |
|
(10,333 |
) |
(25,880 |
) |
Total current taxes |
|
(7,131 |
) |
(23,196 |
) |
(b) Income Tax:
The Banks tax expense recorded for the years ended December 31, 2013 and 2012 is detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Income tax expense: |
|
|
|
|
|
Current year taxes |
|
88,714 |
|
61,876 |
|
Tax from previous periods |
|
(432 |
) |
(1,147 |
) |
Subtotal |
|
88,282 |
|
60,729 |
|
|
|
|
|
|
|
Credit (charge) for deferred taxes: |
|
|
|
|
|
Origin and reversal of temporary differences |
|
(12,381 |
) |
3,113 |
|
Effect of changes in tax rate |
|
|
|
(14,206 |
) |
Subtotal |
|
(12,381 |
) |
(11,093 |
) |
|
|
|
|
|
|
Non deducible expenses (Art. 21 Ley de la Renta) |
|
1,885 |
|
3,860 |
|
Other |
|
2,150 |
|
894 |
|
Net charge to income for income taxes |
|
79,936 |
|
54,390 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
17. Current and Deferred Taxes, continued:
(c) Reconciliation of effective tax rate:
The following is reconciliation between income tax rate and effective rate applied to determine the Banks income tax expense as of December 31, 2013 and 2012:
|
|
2013 |
|
2012 |
| ||||
|
|
Tax rate |
|
|
|
Tax rate |
|
|
|
|
|
% |
|
MCh$ |
|
% |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
Income tax calculated on net income before tax |
|
20.00 |
|
118,708 |
|
20.00 |
|
104,400 |
|
Additions or deductions |
|
(6.85 |
) |
(40,653 |
) |
(7.10 |
) |
(37,056 |
) |
Non-deductible expenses |
|
0.32 |
|
1,885 |
|
0.74 |
|
3,860 |
|
Tax from previous year |
|
(0.07 |
) |
(432 |
) |
(0.22 |
) |
(1,147 |
) |
Effect of changes in tax rate (*) |
|
|
|
|
|
(2.72 |
) |
(14,206 |
) |
Lease deferred tax adjustment |
|
|
|
|
|
0.56 |
|
2,942 |
|
Others |
|
0.07 |
|
428 |
|
(0.84 |
) |
(4,403 |
) |
Effective rate and income tax expense |
|
13.47 |
|
79,936 |
|
10.42 |
|
54,390 |
|
The effective rate for income tax for 2013 is 13.47% (10.42% in 2012).
(*) According to the Law No. 20,630 issued on September 27, 2011 is permanently changed the tax rates of the first category to 20.00%
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
17. Current and Deferred Taxes, continued:
(d) Effect of deferred taxes on income and equity:
During the year 2013, the Bank has recorded the effects of deferred taxes in accordance with Note No. 2 (r).
The effects of deferred taxes on assets, liabilities and income accounts are detailed as follows:
|
|
Balances as |
|
|
|
Balances as |
| ||
|
|
of December |
|
Effect |
|
of December |
| ||
|
|
31, 2012 |
|
Income |
|
Equity |
|
31, 2013 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Debit Differences: |
|
|
|
|
|
|
|
|
|
Allowances for loan losses |
|
99,113 |
|
8,989 |
|
|
|
108,102 |
|
Obligations with agreements to repurchase |
|
(11 |
) |
216 |
|
|
|
205 |
|
Personnel provisions |
|
6,092 |
|
(345 |
) |
|
|
5,747 |
|
Staff vacation |
|
4,058 |
|
321 |
|
|
|
4,379 |
|
Accrued interests and indexation adjustments from past due loans |
|
2,123 |
|
290 |
|
|
|
2,413 |
|
Staff severance indemnities provisions |
|
960 |
|
(22 |
) |
33 |
|
971 |
|
Provision of credit cards expenses |
|
4,694 |
|
1,799 |
|
|
|
6,493 |
|
Provision of accrued expenses |
|
7,382 |
|
349 |
|
|
|
7,731 |
|
Other adjustments |
|
5,158 |
|
4,705 |
|
|
|
9,863 |
|
Total debit differences |
|
129,569 |
|
16,302 |
|
33 |
|
145,904 |
|
|
|
|
|
|
|
|
|
|
|
Credit Differences: |
|
|
|
|
|
|
|
|
|
Depreciation and price-level restatement of property and equipment |
|
15,423 |
|
(987 |
) |
|
|
14,436 |
|
Adjustment for valuation of financial assets available-for-sale |
|
4,758 |
|
|
|
2,585 |
|
7,343 |
|
Leasing equipment |
|
4,812 |
|
3,688 |
|
|
|
8,500 |
|
Transitory assets |
|
2,449 |
|
290 |
|
|
|
2,739 |
|
Derivative instrument adjustment |
|
378 |
|
(240 |
) |
|
|
138 |
|
Other adjustments |
|
2,236 |
|
1,170 |
|
7 |
|
3,413 |
|
Total credit differences |
|
30,056 |
|
3,921 |
|
2,592 |
|
36,569 |
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets (liabilities), net |
|
99,513 |
|
12,381 |
|
(2,559 |
) |
109,335 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
17. Current and Deferred Taxes, continued:
(e) For the purpose of complying with the Circular No. 47 issued by the Chilean Internal Revenue Service (SII) and No. 3,478 issued by the Superintendency of Banks, dated August 18, 2009 the movements and effects generated by the application of Article 31, No. 4 of the Income Tax Law are detailed as follows:
As the circular requires, the information corresponds only to the Banks credit operations and does not consider operations of subsidiary entities that are consolidated in these consolidated financial statements.
|
|
|
|
|
|
Tax value assets |
| ||||
(e.1) Loans to customers as of |
|
Book value |
|
Tax value |
|
Past-due |
|
Past-due |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and advance to banks |
|
1,062,056 |
|
1,063,348 |
|
|
|
|
|
|
|
Commercial loans |
|
10,975,797 |
|
11,509,434 |
|
18,864 |
|
49,184 |
|
68,048 |
|
Consumer loans |
|
2,886,418 |
|
3,244,149 |
|
561 |
|
17,418 |
|
17,979 |
|
Residential mortgage loans |
|
4,713,805 |
|
4,729,085 |
|
3,381 |
|
111 |
|
3,492 |
|
Total |
|
19,638,076 |
|
20,546,016 |
|
22,806 |
|
66,713 |
|
89,519 |
|
(*) In accordance with the mentioned Circular and instructions from the SII, the value of financial statement assets, are presented on an individual basis (only Banco de Chile) net of allowance for loan losses and do not include lease and factoring operations.
(e.2) Provisions on past-due loans |
|
Balance as of |
|
Charge-offs |
|
Provisions |
|
Provisions |
|
Balance as of |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
33,163 |
|
(21,574 |
) |
69,021 |
|
(31,426 |
) |
49,184 |
|
Consumer loans |
|
17,131 |
|
(148,561 |
) |
171,991 |
|
(23,143 |
) |
17,418 |
|
Residential mortgage loans |
|
151 |
|
(952 |
) |
1,195 |
|
(283 |
) |
111 |
|
Total |
|
50,445 |
|
(171,087 |
) |
242,207 |
|
(54,852 |
) |
66,713 |
|
(e.3) Charge-offs and recoveries |
|
MCh$ |
|
|
|
|
|
Charge-offs Art. 31 No. 4 second subparagraph |
|
10,509 |
|
Condoning resulting in provisions released |
|
1,123 |
|
Recovery or renegotiation of written-off loans |
|
41,802 |
|
(e.4) Application of Art. 31 No. 4 first & third |
|
MCh$ |
|
|
|
|
|
Charge-offs in accordance with first subsection |
|
|
|
Condoning in accordance with third subsection |
|
1,117 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) Item detail:
As of December 31, 2013 and 2012, other assets are detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Assets held for leasing (*) |
|
74,723 |
|
74,986 |
|
|
|
|
|
|
|
Assets received or awarded as payment |
|
|
|
|
|
Assets awarded in judicial sale |
|
2,640 |
|
2,475 |
|
Assets received in lieu of payment |
|
372 |
|
81 |
|
Provision for assets received in lieu of payment (**) |
|
(46 |
) |
(40 |
) |
Subtotal |
|
2,966 |
|
2,516 |
|
|
|
|
|
|
|
Other Assets |
|
|
|
|
|
Documents intermediated (***) |
|
74,366 |
|
89,800 |
|
Deposits by derivatives margin |
|
60,309 |
|
25,984 |
|
Servipag available funds |
|
19,200 |
|
15,534 |
|
Investment properties (Note N° 2 letter s) |
|
16,317 |
|
16,698 |
|
VAT receivable |
|
9,958 |
|
9,292 |
|
Other accounts and notes receivable |
|
8,682 |
|
20,001 |
|
Commissions receivable |
|
7,784 |
|
6,392 |
|
Prepaid expenses |
|
6,589 |
|
3,476 |
|
Recoverable income taxes |
|
6,048 |
|
7,695 |
|
Recovered leased assets for sale |
|
5,463 |
|
777 |
|
Pending transactions |
|
1,803 |
|
8,676 |
|
Rental guarantees |
|
1,456 |
|
1,386 |
|
Accounts receivable for sale of assets received in lieu of payment |
|
1,286 |
|
423 |
|
Materials and supplies |
|
528 |
|
610 |
|
Other |
|
20,551 |
|
12,632 |
|
Subtotal |
|
240,340 |
|
219,376 |
|
Total |
|
318,029 |
|
296,878 |
|
(*) These correspond to property and equipment to be given under a finance lease.
(**) Assets received in lieu of payment are assets received as payment of customers past-due debts. The assets acquired must at no time exceed, in the aggregate, 20% of the Banks effective equity. These assets represent 0.0124% (0.0032% in 2012) of the Banks effective equity.
The assets awarded at judicial sale are assets that have been acquired as payment of debts previously owed towards the Bank. The assets awarded at judicial sales are not subject to the aforementioned requirement. These properties are assets available for sale. For most assets, the sale is expected to be completed within one year from the date on which the asset was received or acquired. If the asset in question is not sold within the year, it must be written off.
The provision for assets received in lieu of payment is recorded as indicated in the Compendium of Accounting Standards, Chapter B-5 No. 3, which indicate to recognize a provision for the difference between the initial value plus any additions and its realizable value when the former is greater
(***) This item mainly includes simultaneous operations carried out by the subsidiary Banchile Corredores de Bolsa S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
18. Other Assets, continued:
(b) Movements in the provision for assets received in lieu of payment during the 2013 and 2012 periods are detailed as follows:
Amortization |
|
MCh$ |
|
|
|
|
|
Balance as of January 1, 2012 |
|
1,118 |
|
Provisions used |
|
(1,178 |
) |
Provisions established |
|
100 |
|
Provisions released |
|
|
|
Balance as of December 31, 2012 |
|
40 |
|
Provisions used |
|
(45 |
) |
Provisions established |
|
52 |
|
Provisions released |
|
(1 |
) |
Balance as of December 31, 2013 |
|
46 |
|
19. Current accounts and Other Demand Deposits:
As of December 31, 2013 and 2012, current accounts and other demand deposits are detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Current accounts |
|
5,018,155 |
|
4,495,134 |
|
Other demand deposits |
|
593,444 |
|
599,320 |
|
Other demand deposits and accounts |
|
372,733 |
|
376,517 |
|
Total |
|
5,984,332 |
|
5,470,971 |
|
20. Savings accounts and Time Deposits:
As of December 31, 2013 and 2012, savings accounts and time deposits are detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Time deposits |
|
10,151,612 |
|
9,370,063 |
|
Term savings accounts |
|
178,012 |
|
179,465 |
|
Other term balances payable |
|
73,101 |
|
63,422 |
|
Total |
|
10,402,725 |
|
9,612,950 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
21. Borrowings from Financial Institutions:
(a) As of December 31, 2013 and 2012, borrowings from financial institutions are detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Domestic banks |
|
|
|
|
|
|
|
|
|
|
|
Foreign banks |
|
|
|
|
|
Foreign trade financing |
|
|
|
|
|
Citibank N.A. |
|
137,914 |
|
107,249 |
|
HSBC Bank |
|
134,814 |
|
|
|
Standard Chartered Bank |
|
103,162 |
|
117,218 |
|
Deutsche Bank AG |
|
94,327 |
|
12,003 |
|
Bank of America |
|
78,642 |
|
189,501 |
|
Commerzbank A.G. |
|
61,958 |
|
182,926 |
|
Bank of Montreal |
|
52,684 |
|
|
|
The Bank of New York Mellon |
|
37,373 |
|
57,161 |
|
ING Bank |
|
26,309 |
|
|
|
Wells Fargo Bank |
|
26,298 |
|
131,763 |
|
Toronto Dominion Bank |
|
23,676 |
|
38,402 |
|
Mercantil Commercebank N.A. |
|
15,888 |
|
19,184 |
|
Zuercher Kantonalbank |
|
5,282 |
|
14,401 |
|
JP Morgan Chase Bank |
|
|
|
24,003 |
|
Sumitomo Banking |
|
|
|
16,828 |
|
Bank of China |
|
|
|
828 |
|
Banco de Sabadell |
|
|
|
337 |
|
Otros |
|
4,040 |
|
22 |
|
|
|
|
|
|
|
Borrowings and other obligations |
|
|
|
|
|
Wells Fargo Bank |
|
105,340 |
|
96,370 |
|
Citibank N.A. |
|
54,768 |
|
27,571 |
|
China Development Bank |
|
26,308 |
|
35,996 |
|
Standard Chartered Bank |
|
|
|
36,084 |
|
Otros |
|
672 |
|
816 |
|
Subtotal |
|
989,455 |
|
1,108,663 |
|
|
|
|
|
|
|
Chilean Central Bank |
|
10 |
|
18 |
|
|
|
|
|
|
|
Total |
|
989,465 |
|
1,108,681 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
21. Borrowings from Financial Institutions, continued:
(b) Borrowings from foreign banks
These obligations maturities are as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Up to 1 month |
|
99,543 |
|
181,954 |
|
Over 1 month and up to 3 months |
|
359,752 |
|
153,702 |
|
Over 3 months and up to 12 months |
|
262,574 |
|
631,051 |
|
Over 1 year and up to 3 years |
|
267,586 |
|
141,956 |
|
Over 3 years and up to 5 years |
|
|
|
|
|
Over 5 years |
|
|
|
|
|
Total |
|
989,455 |
|
1,108,663 |
|
(c) Chilean Central Bank
Debts to the Central Bank of Chile include credit lines for the renegotiation of loans and other Central Bank borrowings.
The outstanding amounts owed to the Central Bank of Chile under these credit lines are as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Borrowings and other obligations |
|
|
|
|
|
Credit lines for the renegotiation of loans |
|
10 |
|
18 |
|
Total |
|
10 |
|
18 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
As of December 31, 2013 and 2012, debt issued is detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Mortgage bonds |
|
86,491 |
|
115,196 |
|
Bonds |
|
3,533,462 |
|
2,412,233 |
|
Subordinated bonds |
|
747,007 |
|
746,504 |
|
Total |
|
4,366,960 |
|
3,273,933 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
22. Debt Issued, continued:
During the period ended as of December 31, 2013, Banco de Chile issued bonds by an amount of MCh$1,607,265, of which corresponds to Unsubordinated bonds and Subordinated bonds by an amount of MCh$1,603,669 and MCh$3,596 respectively, according to the following details:
Bonds
Series |
|
MCh$ |
|
Term |
|
Interest rate |
|
Currency |
|
Issued date |
|
Maturity |
|
BCHIUR1011 |
|
22,114 |
|
12 |
|
3.40 |
|
UF |
|
01/08/2013 |
|
01/08/2025 |
|
BCHIUR1011 |
|
8,521 |
|
12 |
|
3.40 |
|
UF |
|
01/09/2013 |
|
01/09/2025 |
|
BCHIUJ0811 |
|
1,572 |
|
8 |
|
3.20 |
|
UF |
|
01/29/2013 |
|
01/29/2021 |
|
BCHIUZ1011 |
|
89,313 |
|
7 |
|
3.20 |
|
UF |
|
01/31/2013 |
|
01/31/2020 |
|
BCHIAC1011 |
|
45,456 |
|
15 |
|
3.50 |
|
UF |
|
02/28/2013 |
|
02/28/2028 |
|
BCHIAC1011 |
|
34,185 |
|
15 |
|
3.50 |
|
UF |
|
03/26/2013 |
|
03/26/2028 |
|
BCHIUN1011 |
|
72,022 |
|
7 |
|
3.20 |
|
UF |
|
04/08/2013 |
|
04/08/2020 |
|
BCHIUU0212 |
|
68,379 |
|
12 |
|
3.40 |
|
UF |
|
08/29/2013 |
|
08/29/2025 |
|
BCHIAU0213 |
|
69,746 |
|
12 |
|
3.60 |
|
UF |
|
09/11/2013 |
|
09/11/2025 |
|
BCHIAG0213 |
|
46,585 |
|
5 |
|
3.40 |
|
UF |
|
09/13/2013 |
|
09/13/2018 |
|
BCHIAV0613 |
|
47,283 |
|
12 |
|
3.60 |
|
UF |
|
10/16/2013 |
|
09/13/2025 |
|
BONO HKD |
|
43,066 |
|
10 |
|
3.23 |
|
HKD |
|
04/22/2013 |
|
04/24/2023 |
|
BONO HKD |
|
45,133 |
|
15 |
|
4.25 |
|
HKD |
|
10/08/2013 |
|
10/16/2028 |
|
BONO CHF |
|
100,371 |
|
5 |
|
1.13 |
|
CHF |
|
04/26/2013 |
|
05/23/2018 |
|
BONO CHF |
|
25,019 |
|
5 |
|
1.13 |
|
CHF |
|
05/07/2013 |
|
05/23/2018 |
|
BONO CHF |
|
122,380 |
|
3 |
|
0.60 |
|
CHF |
|
06/11/2013 |
|
07/18/2016 |
|
BONO CHF |
|
66,164 |
|
4 |
|
1.13 |
|
CHF |
|
06/28/2013 |
|
05/23/2017 |
|
BONO CHF |
|
98,555 |
|
6 |
|
1.50 |
|
CHF |
|
11/07/2013 |
|
12/03/2019 |
|
BONO JPY |
|
57,716 |
|
3 |
|
0.74 |
|
JPY |
|
11/25/2013 |
|
11/25/2016 |
|
BONO JPY |
|
30,169 |
|
6 |
|
1.03 |
|
JPY |
|
12/05/2013 |
|
03/18/2019 |
|
Subtotal 2013 |
|
1,093,749 |
|
|
|
|
|
|
|
|
|
|
|
Bono de corto plazo |
|
509,920 |
|
|
|
|
|
|
|
|
|
|
|
Total 2013 |
|
1,603,669 |
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
22. Debt Issued, continued:
Subordinated Bonds
Series |
|
MCh$ |
|
Term |
|
Interest |
|
Currency |
|
Issued date |
|
Maturity date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UCHI-G1111 |
|
3,596 |
|
25 |
|
3,75 |
|
UF |
|
01/25/2013 |
|
01/25/2038 |
|
Total |
|
3,596 |
|
|
|
|
|
|
|
|
|
|
|
During the period ended as of December 31, 2012, Banco de Chile issued bonds by an amount of MCh$1,233,985, of which corresponds to Unsubordinated bonds and Subordinated bonds by an amount of MCh$1,207,808 and MCh$26,177 respectively, according to the following details:
Bonds
Series |
|
MCh$ |
|
Term |
|
Interest |
|
Currency |
|
Issue date |
|
Maturity |
|
BCHIUO0911 |
|
89,896 |
|
10 |
|
3.40 |
|
UF |
|
02/15/2012 |
|
02/15/2022 |
|
BCHIUD0510 |
|
14,109 |
|
6 |
|
2.20 |
|
UF |
|
02/16/2012 |
|
02/16/2018 |
|
BCHIUI0611 |
|
1,338 |
|
7 |
|
3.20 |
|
UF |
|
03/05/2012 |
|
03/05/2019 |
|
BCHIUI0611 |
|
3,352 |
|
7 |
|
3.20 |
|
UF |
|
03/07/2012 |
|
03/07/2019 |
|
BCHIUI0611 |
|
1,116 |
|
7 |
|
3.20 |
|
UF |
|
03/23/2012 |
|
03/23/2019 |
|
BCHIUP1211 |
|
88,345 |
|
10 |
|
3.40 |
|
UF |
|
04/04/2012 |
|
04/04/2022 |
|
BCHIUI0611 |
|
2,236 |
|
7 |
|
3.20 |
|
UF |
|
04/17/2012 |
|
04/17/2019 |
|
BCHIUQ1011 |
|
27,343 |
|
11 |
|
3.40 |
|
UF |
|
05/08/2012 |
|
05/08/2023 |
|
BCHIUQ1011 |
|
48,568 |
|
11 |
|
3.40 |
|
UF |
|
05/11/2012 |
|
05/11/2023 |
|
BCHIUQ1011 |
|
12,449 |
|
11 |
|
3.40 |
|
UF |
|
06/04/2012 |
|
06/04/2023 |
|
BCHIUS0212 |
|
46,428 |
|
11 |
|
3.40 |
|
UF |
|
06/04/2012 |
|
06/04/2023 |
|
BCHIUS0212 |
|
20,552 |
|
11 |
|
3.40 |
|
UF |
|
06/07/2012 |
|
06/07/2023 |
|
BCHIUT0112 |
|
66,850 |
|
12 |
|
3.40 |
|
UF |
|
06/12/2012 |
|
06/12/2024 |
|
BCHIUR1011 |
|
33,295 |
|
12 |
|
3.40 |
|
UF |
|
06/20/2012 |
|
06/20/2024 |
|
BCHIUR1011 |
|
4,450 |
|
12 |
|
3.40 |
|
UF |
|
07/30/2012 |
|
07/30/2024 |
|
BCHIUR1011 |
|
13,469 |
|
12 |
|
3.40 |
|
UF |
|
09/14/2012 |
|
09/14/2024 |
|
BCHIUR1011 |
|
1,799 |
|
12 |
|
3.40 |
|
UF |
|
09/24/2012 |
|
09/24/2024 |
|
BCHIUR1011 |
|
5,284 |
|
12 |
|
3.40 |
|
UF |
|
09/25/2012 |
|
09/25/2024 |
|
BCHIUJ0811 |
|
1,334 |
|
8 |
|
3.20 |
|
UF |
|
05/10/2012 |
|
05/10/2020 |
|
BCHIUJ0811 |
|
33,456 |
|
8 |
|
3.20 |
|
UF |
|
10/10/2012 |
|
10/10/2020 |
|
BCHIUV1211 |
|
67,842 |
|
13 |
|
3.50 |
|
UF |
|
10/10/2012 |
|
10/10/2025 |
|
BCHIUJ0811 |
|
1,566 |
|
8 |
|
3.20 |
|
UF |
|
10/19/2012 |
|
10/19/2020 |
|
BCHIUJ0811 |
|
2,241 |
|
8 |
|
3.20 |
|
UF |
|
10/22/2012 |
|
10/22/2020 |
|
BCHIAC1011 |
|
11,118 |
|
15 |
|
3.50 |
|
UF |
|
10/22/2012 |
|
10/22/2027 |
|
BONO HKD |
|
24,487 |
|
15 |
|
4.00 |
|
HKD |
|
09/05/2012 |
|
09/05/2027 |
|
BONO HKD |
|
54,374 |
|
15 |
|
4.00 |
|
HKD |
|
11/07/2012 |
|
09/09/2027 |
|
BONO PEN |
|
14,083 |
|
5 |
|
4.04 |
|
PEN |
|
10/30/2012 |
|
10/30/2017 |
|
Subtotal as of December 31, 2012 |
|
691,380 |
|
|
|
|
|
|
|
|
|
|
|
Short-term as of Bonds |
|
516,428 |
|
|
|
|
|
|
|
|
|
|
|
Total as of December 31, 2012 |
|
1,207,808 |
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
22. Debt Issued, continued:
Subordinated Bonds
Series |
|
MCh$ |
|
Term |
|
Interest |
|
Currency |
|
Issue date |
|
Maturity date |
|
UCHI-G1111 |
|
13,191 |
|
25 |
|
3.75 |
|
UF |
|
07/30/2012 |
|
07/30/2037 |
|
UCHI-G1111 |
|
1,099 |
|
25 |
|
3.75 |
|
UF |
|
07/31/2012 |
|
07/31/2037 |
|
UCHI-G1111 |
|
1,782 |
|
25 |
|
3.75 |
|
UF |
|
08/31/2012 |
|
08/31/2037 |
|
UCHI-G1111 |
|
10,105 |
|
25 |
|
3.75 |
|
UF |
|
12/28/2012 |
|
12/28/2037 |
|
Total |
|
26,177 |
|
|
|
|
|
|
|
|
|
|
|
The Bank has not had breaches of capital and interest with respect to its debts instruments and has complied with its debt covenants and other compromises related to debt issued during periods 2013 and 2012.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
23. Other Financial Obligations:
As of December 31, 2013 and 2012, other financial obligations are detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Other Chilean obligations |
|
160,612 |
|
106,537 |
|
Public sector obligations |
|
50,314 |
|
55,586 |
|
Other foreign obligations |
|
|
|
|
|
Total |
|
210,926 |
|
162,123 |
|
(a) As of December 31, 2013 and 2012, provisions and accrued expenses are detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Provision for minimum dividends |
|
324,582 |
|
300,759 |
|
Provisions for Personnel benefits and payroll expenses |
|
67,943 |
|
64,546 |
|
Provisions for contingent loan risks |
|
49,277 |
|
36,585 |
|
Provisions for contingencies: |
|
|
|
|
|
Additional loan provisions (*) |
|
107,757 |
|
97,757 |
|
Country risk provisions |
|
1,770 |
|
3,107 |
|
Other provisions for contingencies |
|
569 |
|
2,083 |
|
Total |
|
551,898 |
|
504,837 |
|
(*) In 2013, the Bank established an amount of Ch$10,000 million (Ch$2,271 million in 2012) for additional provisions.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
24. Provisions, continued:
(b) The following table details the movements in provisions and accrued expenses during the 2013 and 2012 periods:
|
|
Minimum |
|
Personnel |
|
Contingent |
|
Additional |
|
Country risk |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances as of January 1, 2012 |
|
259,501 |
|
60,634 |
|
35,334 |
|
95,486 |
|
6,983 |
|
457,938 |
|
Provisions established |
|
300,759 |
|
50,799 |
|
1,251 |
|
2,271 |
|
228 |
|
355,308 |
|
Provisions used |
|
(259,501 |
) |
(46,813 |
) |
|
|
|
|
(223 |
) |
(306,537 |
) |
Provisions released |
|
|
|
(74 |
) |
|
|
|
|
(1,798 |
) |
(1,872 |
) |
Balances as of December 31, 2012 |
|
300,759 |
|
64,546 |
|
36,585 |
|
97,757 |
|
5,190 |
|
504,837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances as of January 1, 2013 |
|
300,759 |
|
64,546 |
|
36,585 |
|
97,757 |
|
5,190 |
|
504,837 |
|
Provisions established |
|
324,582 |
|
52,903 |
|
12,692 |
|
10,000 |
|
230 |
|
400,407 |
|
Provisions used |
|
(300,759 |
) |
(44,240 |
) |
|
|
|
|
(369 |
) |
(345,368 |
) |
Provisions released |
|
|
|
(5,266 |
) |
|
|
|
|
(2,712 |
) |
(7,978 |
) |
Balances as of December 31, 2013 |
|
324,582 |
|
67,943 |
|
49,277 |
|
107,757 |
|
2,339 |
|
551,898 |
|
(c) Provisions for personnel benefits and payroll:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Short-term personnel benefits |
|
32,000 |
|
29,649 |
|
Vacation accrual |
|
21,895 |
|
20,842 |
|
Pension plan- defined benefit plan |
|
10,696 |
|
10,633 |
|
Other benefits |
|
3,352 |
|
3,422 |
|
Total |
|
67,943 |
|
64,546 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
24. Provisions, continued:
(d) Pension plan Defined benefit plan:
(i) Movement in the defined benefit obligations are as follow:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Opening defined benefit obligation |
|
10,633 |
|
8,511 |
|
Increase in provisions |
|
793 |
|
808 |
|
Benefit paid |
|
(896 |
) |
(864 |
) |
Prepayments |
|
|
|
(22 |
) |
Effect of change in actuarial factors |
|
166 |
|
2,200 |
|
Total |
|
10,696 |
|
10,633 |
|
(ii) Net benefits expenses:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Current service cost |
|
288 |
|
340 |
|
Interest cost of benefits obligations |
|
505 |
|
468 |
|
Effect of change in actuarial factors |
|
166 |
|
2,200 |
|
Net benefit expenses |
|
959 |
|
3,008 |
|
(iii) Assumptions used to determine pension obligations:
The principal assumptions used in determining pension obligations for the Banks plan are shown below:
|
|
December 31, |
|
December 31, |
|
|
|
% |
|
% |
|
|
|
|
|
|
|
Discount rate |
|
5.19 |
|
5.50 |
|
Annual salary increase |
|
5.19 |
|
5.08 |
|
Payment probability |
|
99.99 |
|
99.99 |
|
The most recent actuarial valuation of the present value of the benefit plan obligation was carried out at December 31, 2013.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
24. Provisions, continued:
(e) Movements in provisions for incentive plans:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Balances as of January 1, |
|
29,649 |
|
28,827 |
|
Provisions established |
|
32,456 |
|
28,406 |
|
Provisions used |
|
(27,069 |
) |
(27,584 |
) |
Provisions release |
|
(3,036 |
) |
|
|
Total |
|
32,000 |
|
29,649 |
|
(f) Movements in provisions for vacations:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Balances as of January 1, |
|
20,842 |
|
20,361 |
|
Provisions established |
|
5,410 |
|
5,655 |
|
Provisions used |
|
(4,181 |
) |
(4,363 |
) |
Provisions release |
|
(176 |
) |
(811 |
) |
Total |
|
21,895 |
|
20,842 |
|
(g) Employee share-based benefits provision:
As of December 31, 2013 and 2012, the Bank and its subsidiaries do not have a stock compensation plan.
(h) Contingent loan provisions:
As of December 31, 2013 and 2012, the Bank and its subsidiaries maintain contingent loan provisions by an amount of Ch$ 49,277 million (Ch$36,585 million in 2012). See note No. 26 (d).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
As of December 31, 2013 and 2012, other liabilities are detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Accounts and notes payable (*) |
|
100,081 |
|
111,358 |
|
Unearned income |
|
4,592 |
|
5,357 |
|
Dividends payable |
|
1,145 |
|
883 |
|
|
|
|
|
|
|
Other liabilities |
|
|
|
|
|
Documents intermediated (**) |
|
108,380 |
|
132,651 |
|
Cobranding |
|
32,085 |
|
23,066 |
|
VAT debit |
|
13,158 |
|
11,689 |
|
Leasing deferred gains |
|
4,207 |
|
5,900 |
|
Pending transactions |
|
1,144 |
|
5,080 |
|
Insurance payments |
|
476 |
|
135 |
|
Others |
|
2,837 |
|
4,947 |
|
Total |
|
268,105 |
|
301,066 |
|
(*) Include obligations that do not correspond to transactions in the line of business, such as withholding tax, pension and healthcare contributions, insurance payable, balances of prices for the purchase of materials and provisions for expenses pending payment.
(**) This item mainly includes financing of simultaneous operations performed by subsidiary Banchile Corredores de Bolsa S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
26. Contingencies and Commitments:
(a) Commitments and responsibilities accounted for in off-balance-sheet accounts:
In order to satisfy its customers needs, the Bank entered into several irrevocable commitments and contingent obligations. Although these obligations are not recognized in the Statement of Financial Position, they entail credit risks and, therefore, form part of the Banks overall risk.
The Bank and its subsidiaries record the following balances related to such commitments and responsibilities, which fall within its line of business, in off-balance-sheet accounts:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Contingent loans |
|
|
|
|
|
Guarantees and surety bonds |
|
491,465 |
|
323,924 |
|
Confirmed foreign letters of credit |
|
68,631 |
|
85,272 |
|
Issued foreign letters of credit |
|
166,849 |
|
138,714 |
|
Bank guarantees |
|
1,402,399 |
|
1,437,312 |
|
Immediately available credit lines |
|
5,436,938 |
|
5,481,235 |
|
Other commitments |
|
|
|
122,997 |
|
Transactions on behalf of third parties |
|
|
|
|
|
Collections |
|
357,672 |
|
386,006 |
|
Third-party resources managed by the Bank: |
|
|
|
|
|
Financial assets managed on behalf of third parties |
|
1,311 |
|
12,144 |
|
Other assets managed on behalf of third parties |
|
|
|
|
|
Financial assets acquired on its own behalf |
|
44,839 |
|
22,802 |
|
Other assets acquired on its own behalf |
|
|
|
|
|
Fiduciary activities |
|
|
|
|
|
Securities held in safe custody in the Bank |
|
7,342,425 |
|
6,237,859 |
|
Securities held in safe custody in other entities |
|
4,501,555 |
|
4,483,567 |
|
Total |
|
19,814,084 |
|
18,731,832 |
|
Above information only includes the most significant balances.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
26. Contingencies and Commitments, continued:
(b) Lawsuits and legal proceedings:
(b.1) Legal contingencies within the ordinary course of business:
In the ordinary course of business, the Bank and its subsidiaries act as defendant or co-defendant in various litigation matters. Although there can be no assurances, the Banks management believes, based on information currently available, that the ultimate resolution of these legal proceedings are not likely to have a material adverse effect on its results of operations, financial position, or liquidity. As of December 31, 2013, the Bank has established provisions for this concept in the amount of MCh$339 (MCh$474 in 2012), recorded within Provisions in the statement of financial position. The following table presents estimated date of completion of the respective litigation:
|
|
As of December 31, 2013 |
| ||||||||||
|
|
2014 |
|
2015 |
|
2016 |
|
2017 |
|
2018 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal contingencies |
|
30 |
|
5 |
|
72 |
|
149 |
|
83 |
|
339 |
|
(b.2) Contingencies for significant lawsuits:
As of December 31, 2013 and 2012, it does not exist any significant demands in courts that they affect or could affect the current consolidated financial statements.
(c) Guarantees granted:
i. In subsidiary Banchile Administradora General de Fondos S.A.:
In compliance with article 226 and subsequent articles of Law 18,045, Banchile Administradora General de Fondos S.A., has designated Banco de Chile as the representative of the beneficiaries of the guarantees it has established and in that character the Bank has issued bank guarantees totaling UF 2,515,500, maturing January 9, 2014 (UF 2,442,000 maturing January 4, 2013 in December 2012).
For Mutual Funds that have not begin its operations as of December 31, 2013, it has constituted bank guarantees, which corresponds to Mutual Fund Booster Brasil 2014 by UF10,000 and Mutual Fund Deposito Plus V Guaranteed by UF10,000.
In addition there are other guarantees for a guaranteed return on certain mutual funds, totaling Ch$75,474 million as of December 31, 2013 (Ch$118,734 million in 2012).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
26. Contingencies and Commitments, continued:
(c) Guarantees granted, continued:
|
|
|
|
Guarantees |
|
|
|
Guarantees |
|
Fund |
|
2013 |
|
Number |
|
2012 |
|
Number |
|
|
|
MCh$ |
|
|
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual Fund Deposito Plus IV Guaranted |
|
16,325 |
|
006392-7 |
|
|
|
|
|
Mutual Fund Deposito Plus Guaranted |
|
14,241 |
|
330681-1 |
|
14,958 |
|
004713-3 |
|
Mutual Fund Deposito Plus III Guaranted |
|
12,937 |
|
006033-5 |
|
|
|
|
|
Mutual Fund Depósito Plus II Guaranted |
|
9,308 |
|
006037-7 |
|
12,552 |
|
005272-2 |
|
Mutual Fund Small Cap USA Guaranted |
|
5,197 |
|
008212-5 |
|
|
|
|
|
Mutual Fund Chile Bursátil Guaranted |
|
5,050 |
|
006034-3 |
|
|
|
|
|
Mutual Fund Twin Win Europa 103 Guaranted |
|
3,537 |
|
006035-1 |
|
3,541 |
|
004712-5 |
|
Mutual Fund Global Stocks Guranted |
|
2,964 |
|
007385-9 |
|
|
|
|
|
Mutual Fund Second Best Chile EEUU Guaranted |
|
2,207 |
|
006032-7 |
|
2,207 |
|
004820-2 |
|
Mutual Fund Europa Accionario Guaranted |
|
2,059 |
|
006036-9 |
|
2,069 |
|
004716-7 |
|
Mutual Fund Second Best Europa China Guaranted |
|
1,649 |
|
007082-7 |
|
|
|
|
|
Mutual Fund Banca Americana Voltarget Guaranted |
|
|
|
|
|
11,878 |
|
336723-1 |
|
Mutual Fund Estrategia Commodities Guaranted |
|
|
|
|
|
6,302 |
|
336721-5 |
|
Mutual Fund Muralla China Guaranted |
|
|
|
|
|
17,795 |
|
336716-8 |
|
Mutual Fund Potencias Consolidadas Guaranted |
|
|
|
|
|
30,381 |
|
336718-4 |
|
Mutual Fund Ahorro Plus I Guaranted |
|
|
|
|
|
730 |
|
336720-7 |
|
Mutual Fund Ahorro Estable II Guaranted |
|
|
|
|
|
11,270 |
|
336722-3 |
|
Mutual Fund Ahorro Estable III Guaranted |
|
|
|
|
|
5,051 |
|
336717-6 |
|
Total |
|
75,474 |
|
|
|
118,734 |
|
|
|
In compliance to stablished by the Superintendence of Securities and Insurance in letter f) of Circular 1,894 of September 24, 20008, the entity has constituted guarantees, by management portfolio, in benefit of investor. Such guarantee corresponds to a bank guarantee for UF100,000, with maturity on January 9, 2014.
ii. In subsidiary Banchile Corredores de Bolsa S.A.:
For the purposes of ensuring correct and complete compliance with all of its obligations as broker-dealer entity, in conformity with the provisions of article 30 and subsequent articles of Law 18,045 on Securities Markets, the subsidiary established a guarantee in an insurance policy for UF 20,000, insured by Cía. de Seguros de Crédito Continental S.A., that matures April 22, 2014, whereby the Securities Exchange of the Santiago Stock Exchange was appointed as the subsidiarys creditor representative.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
26. Contingencies and Commitments, continued:
(c) Guarantees granted, continued:
According to the provisions of internal stock market regulations, and for the purpose of securing the brokers correct performance, the company established a pledge on its share of the Santiago Stock Exchange in favor of that institution, as recorded in Public Deed on September 13, 1990, signed before Santiago public notary Mr. Raúl Perry Pefaur, and on its share in the Electronic Stock Exchange of Chile in favor of that institution, as recorded in a contract entered into by both parties on May 16, 1990.
Banchile Corredores de Bolsa S.A. keeps an insurance policy current with Chartis Chile Compañía de Seguros Generales S.A. that expires January 2, 2013, and that covers employee fidelity, physical losses, falsification or adulteration, and currency fraud with a coverage amount equivalent to US$ 10,000,000. This secure was renewed on January 2, 2013 with maturity of January 2, 2014 for the same amount with AIG Chile Compañía de Seguros Generales S.A.
According to disposition of Chilean Central Bank, it was constituted a bank guarantee corresponding to UF10,500, with purposes to comply with the contract SOMA (Contract for Service System Open Market Operations) of Chilean Central Bank. This bank guarantee is revaluated in UF to fixed term, not endorsable with maturity of July 17, 2014.
It was constituted a bank guarantee No. 373148-0 corresponds to UF272,000, in benefits of investors with contracts of portfolio management. This bank guarantee is revaluated in UF to fixed term, not endorsable with maturity of January 9, 2014.
It was constituted a cash guarantee for an amount of US$122,494.32, whose purpose is to comply obligations with Pershing, by operations made through this broker.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
26. Contingencies and Commitments, continued:
(c) Guarantees granted, continued:
iii. In subsidiary Banchile Corredores de Seguros Ltda.
According to established in article No. 58, letter D of D.F.L. 251, as of December 31, 2013, the entity maintains two insurance policies that protect it in the face of possible damages that it could affect it, due to infractions of the law, regulations and complementary rules that regulate insurance brokers, and specially when the non-compliance is from acts, mistakes or omissions of the brokers, its represents, agent or dependent that participate in the intermediation.
The policies contracted are the following:
Matter insured |
|
Amount Insured (UF) |
|
Responsibility for errors and omissions policy |
|
60,000 |
|
Civil responsibility policy |
|
500 |
|
(d) Provisions for contingencies loans:
Established provisions for credit risk from contingencies operations are the followings:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Credit lines |
|
31,664 |
|
22,661 |
|
Bank guarantees |
|
13,915 |
|
11,407 |
|
Guarantees and surety bonds |
|
3,135 |
|
2,064 |
|
Letters of credit |
|
563 |
|
434 |
|
Other commitments |
|
|
|
19 |
|
Total |
|
49,277 |
|
36,585 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) Capital
i. Authorized, subscribed and paid shares:
As of December 31, 2013, the paid-in capital of Banco de Chile is represented by 93,175,043,991 registered shares (89,898,992,667 in 2012), with no par value, fully paid and distributed.
|
|
As of December 31, 2013 |
| ||
Corporate Name or Shareholderss name |
|
Number of Shares |
|
% of Equity |
|
|
|
|
|
|
|
LQ Inversiones Financieras S.A. |
|
30,353,093,809 |
|
32.58 |
% |
Sociedad Administradora de la Obligacion Subordinada SAOS S.A. |
|
28,593,701,789 |
|
30.69 |
% |
Sociedad Matriz del Banco de Chile S.A. |
|
12,138,543,602 |
|
13.03 |
% |
Banco de Chile on behalf others Chapter. XIV Resolution 5412 and 43 |
|
2,885,367,588 |
|
3.10 |
% |
Banco Itau Chile (on behalf foreign investors) |
|
2,075,139,427 |
|
2.23 |
% |
Ever 1 BAE S. P. A. |
|
2,051,718,312 |
|
2.20 |
% |
Ever Chile S. P. A. |
|
2,051,718,254 |
|
2.20 |
% |
Banchile Corredores de Bolsa S.A. |
|
1,896,640,358 |
|
2.04 |
% |
Inversiones Aspen Ltda. |
|
1,420,073,692 |
|
1.52 |
% |
Banco Santander (on behalf foreign investors) |
|
1,143,062,776 |
|
1.23 |
% |
J. P. Morgan Chase Bank |
|
890,459,393 |
|
0.96 |
% |
Inversiones Avenida Borgoño Limitada |
|
458,199,794 |
|
0.49 |
% |
BTG Pactual Chile S.A. Corredores de Bolsa |
|
421,597,879 |
|
0.45 |
% |
Larraín Vial S.A. Corredora de Bolsa |
|
416,208,843 |
|
0.45 |
% |
BCI Corredor de Bolsa S.A. |
|
276,974,257 |
|
0.30 |
% |
Santander S.A. Corredores de Bolsa |
|
238,526,596 |
|
0.26 |
% |
A F P Provida S.A. for Pension Fund |
|
236,030,921 |
|
0.25 |
% |
Inversiones CDP Limitada |
|
206,235,748 |
|
0.22 |
% |
A F P Cuprum S.A. for Pension Fund |
|
177,464,400 |
|
0.19 |
% |
Inversiones LQ-SM Limitada |
|
154,270,484 |
|
0.17 |
% |
Subtotal |
|
88,085,027,922 |
|
94.56 |
% |
Others shareholders |
|
5,090,016,069 |
|
5.44 |
% |
Total |
|
93,175,043,991 |
|
100.00 |
% |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
27. Equity, continued:
(a) Capital, continued
i. Authorized, subscribed and paid-in capital, continued:
|
|
|
|
|
|
As of December 31, 2012 |
| ||
Corporate Name or Shareholderss name |
|
Subscribed and |
|
Subscribed and |
|
Number of |
|
% of Equity |
|
|
|
|
|
|
|
|
|
|
|
LQ Inversiones Financieras S.A. |
|
28,241,222,862 |
|
1,519,715,819 |
|
29,760,938,681 |
|
33.10 |
|
Sociedad Administradora de la Obligación Subordinada SAOS S.A. |
|
28,593,701,789 |
|
|
|
28,593,701,789 |
|
31.81 |
|
Sociedad Matriz del Banco de Chile S.A. |
|
12,138,537,826 |
|
|
|
12,138,537,826 |
|
13.50 |
|
Ever 1 BAE S. P. A. |
|
1,926,331,458 |
|
|
|
1,926,331,458 |
|
2.14 |
|
Ever Chile S. P. A. |
|
1,926,331,453 |
|
|
|
1,926,331,453 |
|
2.14 |
|
Banco de Chile on behalf others Chapter. XIV Resolution 5412 and 43 |
|
1,917,824,777 |
|
|
|
1,917,824,777 |
|
2.13 |
|
Banchile Corredores de Bolsa S.A. |
|
1,634,542,641 |
|
55,731,549 |
|
1,690,274,190 |
|
1.88 |
|
Banco Itau Chile (on behalf foreign investors) |
|
1,335,644,830 |
|
11,527,535 |
|
1,347,172,365 |
|
1.50 |
|
Inversiones Aspen Ltda. |
|
1,333,288,591 |
|
|
|
1,333,288,591 |
|
1.48 |
|
J. P. Morgan Chase Bank |
|
746,580,394 |
|
|
|
746,580,394 |
|
0.83 |
|
Banco Santander (on behalf foreign investors) |
|
708,503,705 |
|
|
|
708,503,705 |
|
0.79 |
|
Inversiones Avenida Borgoño Limitada |
|
495,315,368 |
|
30,675,913 |
|
525,991,281 |
|
0.59 |
|
Celfin Capital S.A. Corredores de Bolsa |
|
499,986,263 |
|
13,917,749 |
|
513,904,012 |
|
0.57 |
|
Larraín Vial S.A. Corredora de Bolsa |
|
325,708,628 |
|
12,306,250 |
|
338,014,878 |
|
0.38 |
|
Santander S.A. Corredores de Bolsa |
|
326,666,567 |
|
4,433,433 |
|
331,100,000 |
|
0.37 |
|
BCI Corredor de Bolsa S.A. |
|
280,512,369 |
|
12,782,432 |
|
293,294,801 |
|
0.33 |
|
A F P Provida S.A. for Pension Fund |
|
287,285,362 |
|
|
|
287,285,362 |
|
0.32 |
|
BICE Inversiones Corredores de Bolsa S.A. |
|
144,438,155 |
|
7,563,024 |
|
152,001,179 |
|
0.17 |
|
Valores Security S.A. Corredores de Bolsa |
|
141,080,250 |
|
3,916,384 |
|
144,996,634 |
|
0.16 |
|
Inversiones y Asesorias Fabiola S.A. |
|
135,681,958 |
|
6,080,951 |
|
141,762,909 |
|
0.16 |
|
Subtotal |
|
83,139,185,246 |
|
1,678,651,039 |
|
84,817,836,285 |
|
94.35 |
|
Others shareholders |
|
4,898,628,265 |
|
182,528,117 |
|
5,081,156,382 |
|
5.65 |
|
Total |
|
88,037,813,511 |
|
1,861,179,156 |
|
89,898,992,667 |
|
100.00 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
27. Equity, continued:
(a) Capital, continued
(ii) Shares:
(ii.1) |
On May 13, 2013, Banco de Chile informed of the capitalization of 30% of the distributable net income obtained during the fiscal year ending December 31, 2012, through the issuance of fully paid-in shares, of no par value, agreed in the Extraordinary Shareholders Meeting held on March 21, 2013, which are as follows: |
|
|
|
In the said Extraordinary Shareholders Meeting, it was agreed to increase the Bank´s capital in the amount of Ch$86,201,422,505 through the issuance of 1,197,741,038 fully paid-in shares, of no par value, payable under the distributable net income for the year 2012 that was not distributed as dividends as agreed at the Ordinary Shareholders Meeting held on the same day. |
|
|
|
The issuance of fully in paid shares was registered in the Securities Register of the Superintendence of Banks and Financial Institutions with No. 2/2013, on May 10, 2013. |
|
|
|
The Board of Directors of Banco de Chile, at the meeting No. 2,775, dated May 9, 2013, set May 30, 2013, as the date for issuance and distribution of the fully paid in shares |
|
|
(ii.2) |
During the period 2013, it was finished subscription and payment of 2,078,310,286 shares by an amount of Ch$134,071 million, corresponding to the capital increase agreed in Extraordinary Shareholders Meeting held on October 17, 2012. |
|
|
(ii.3) |
The following table shows the share movements from December 31, 2011 to December 31, 2013: |
|
|
Ordinary shares |
|
Ordinary T |
|
Total shares |
|
Total Shares as of December 31, 2011 |
|
86,942,514,973 |
|
|
|
86,942,514,973 |
|
Capitalization of retained earnings (**) |
|
1,095,298,538 |
|
|
|
1,095,298,538 |
|
Fully paid and subscribed shares |
|
|
|
1,861,179,156 |
|
1,861,179,156 |
|
Total shares subscribed and fully paid as of December 31, 2012 |
|
88,037,813,511 |
|
1,861,179,156 |
|
89,898,992,667 |
|
Shares subscribed and paid |
|
|
|
2,078,310,286 |
|
2,078,310,286 |
|
Conversion of Banco de Chile- T shares into Banco de Chile shares(***) |
|
3,939,489,442 |
|
(3,939,489,442 |
) |
|
|
Capitalization of retained earnings(****) |
|
1,197,741,038 |
|
|
|
1,197,741,038 |
|
Total Shares as of December 31, 2013 |
|
93,175,043,991 |
|
|
|
93,175,043,991 |
|
(*) Capital increase as of October 17, 2012.
(**) Capitalization of March 22, 2012
(***) See note No. 5 (i) (d)
(****) Capitalization of May 13, 2013. See note No. 5 (i) (a)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
27. Equity, continued:
(b) Distributable income:
For purposes of Law No. 19,396 (in particular Articles 24, 25 and 28 of such law) and the Central Bank Contract, Banco de Chiles distributable net income will be determined by subtracting or adding to net income the correction of the value of the paid-in capital and reserves according to the variation of the Consumer Price Index between November of the fiscal year prior to the one in which the calculation is made and November of the fiscal year in which the calculation is made. The difference between net income and distributable net income shall be registered in a reserve account since the first day of the fiscal year following the date when the calculation is made. This reserve account cannot be distributed or capitalized. Provisional article four shall be in force until the obligation of Law No. 19,396 owed by Sociedad Matriz del Banco de Chile S.A., directly or through its subsidiary SAOS S.A., has been fully paid. The amount distributable income for the period 2013 was by Ch$463,688 million (Ch$429,656 million in 2012).
The above described agreement was subject to the consideration of the Council of the Central Bank of Chile, and such entity approved, in ordinary meeting that took place on December 3, 2009, determined to resolve in favor regarding the proposal.
As stated, the retention of earnings for the year 2012 made in March 2013 amounted to Ch$36,193 million (Ch$58,092 millions of income for the year 2011 retained in March 2012).
(c) Approval and payment of dividends:
At the Ordinary Shareholders Meeting held on March 21, 2013, the Banks shareholders agreed to distribute and pay dividend No. 201 amounting to Ch$3.41625263165 per common share of Banco de Chile, with charge to net income for the year ended December 31, 2012. The amount of dividend paid of the period 2013 was Ch$343,455 million.
At the Ordinary Shareholders Meeting held on March 22, 2012, the Banks shareholders agreed to distribute and pay dividend No. 200 amounting to Ch$2.984740 per common share of Banco de Chile, with charge to net income for the year ended December 31, 2011. The amount of dividend paid of the period 2012 was Ch$296,802 million.
(d) Provision for minimum dividends:
The Board of Directors established a minimum dividend distribution policy, where the Bank has to record a provision of 70% of net income as described in Note 2 (v). Accordingly, the Bank recorded a liability under the line item Provisions for an amount of MCh$324,582 (MCh$300,759 in 2012) against Retained earnings.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
27. Equity, continued:
(e) Earnings per share:
(i) |
Basic earnings per share: |
|
|
|
Basic earnings per share are determined by dividing the net income attributable to the Bank shareholders in a period by the weighted average number of shares outstanding during the period. |
|
|
(ii) |
Diluted earnings per share: |
|
|
|
Diluted earnings per share are determined in the same way as Basic Earnings, but the weighted average number of outstanding shares is adjusted to take into account the potential diluting effect of stock options, warrants, and convertible debt. |
The basic and diluted earnings per share as of December 31, 2013 and 2012 are shown in the following table, also shows the income and share data used in the calculation of EPS:
|
|
2013 |
|
2012 |
|
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
Net profits attributable to ordinary equity holders of the bank (in millions) |
|
513,602 |
|
467,610 |
|
Weighted average number of Banco de Chile T (*) |
|
|
|
48,987,689 |
|
Weighted average number of ordinary shares |
|
92,991,448,281 |
|
88,100,830,689 |
|
Dividend per shares (in Chilean pesos) (**) |
|
5.52 |
|
5.30 |
|
|
|
|
|
|
|
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
Net profits attributable to ordinary equity holders of the bank (in millions) |
|
513,602 |
|
467,610 |
|
Weighted average number of Banco de Chile T (*) |
|
|
|
48,987,689 |
|
Weighted average number of ordinary shares |
|
92,991,448,281 |
|
88,100,830,689 |
|
Assumed conversion of convertible debt |
|
|
|
|
|
Adjusted number of shares |
|
92,991,448,281 |
|
88,149,818,378 |
|
Diluted earnings per share (in Chilean pesos) (**) |
|
5.52 |
|
5.30 |
|
(*) Banco de Chile T shares had same rights of other shares of Banco de Chile, with the exception that they did not allow its shareholders to receive dividends and/or fully paid-in shares respect income of 2012.
(**) Capitalization of retained earnings is considered in the calculation of earnings per share.
As of December 31, 2013 and 2012, the Bank did not have any instruments that could lead to a dilution of its ordinary shares.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
27. Equity, continued:
(f) Other comprehensive income:
The cumulative translation adjustment is generated from the Banks translation of its investments in foreign companies, as it records the effects of foreign currency translation for these items in equity. During period of 2013 it was made a credit to equity for an amount of Ch$71 million (charge to equity for Ch$58 millions in 2012).
The fair market value adjustment for available-for-sale instruments is generated by fluctuations in the fair value of that portfolio, with a charge or credit to equity, net of deferred taxes. During the period of 2013 it was made a net credit to equity for an amount of Ch$11,377 million (net credit to equity for Ch$19,639 millions in 2012).
Cash flow hedge adjustment it consists in the portion of income of hedge instruments registered in equity produced in a cash flow hedge. During the period of 2013 it was made a charge to equity for an amount of Ch$14,455 million (credit to equity for Ch$1,429 millions for the period 2012).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
28. Interest Revenue and Expenses:
(a) On the financial statement closing date, the composition of income from interest and adjustments, not including income from hedge accounting, is as follows:
|
|
2013 |
|
2012 |
| ||||||||||||
|
|
Interest |
|
Adjustment |
|
Prepayment |
|
Total |
|
Interest |
|
Adjustment |
|
Prepayment |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
735,513 |
|
93,758 |
|
2,631 |
|
831,902 |
|
691,745 |
|
95,691 |
|
1,967 |
|
789,403 |
|
Consumer loans |
|
558,365 |
|
1,283 |
|
8,339 |
|
567,987 |
|
514,599 |
|
1,063 |
|
7,245 |
|
522,907 |
|
Residential mortgage loans |
|
193,135 |
|
92,036 |
|
3,719 |
|
288,890 |
|
168,937 |
|
93,775 |
|
3,913 |
|
266,625 |
|
Financial investment |
|
66,135 |
|
18,698 |
|
|
|
84,833 |
|
60,791 |
|
15,546 |
|
|
|
76,337 |
|
Repurchase agreements |
|
1,645 |
|
1 |
|
|
|
1,646 |
|
2,786 |
|
|
|
|
|
2,786 |
|
Loans and advances to banks |
|
15,728 |
|
|
|
|
|
15,728 |
|
12,993 |
|
|
|
|
|
12,993 |
|
Other interest revenue |
|
265 |
|
1,386 |
|
|
|
1,651 |
|
143 |
|
1,569 |
|
|
|
1,712 |
|
Total |
|
1,570,786 |
|
207,162 |
|
14,689 |
|
1,792,637 |
|
1,451,994 |
|
207,644 |
|
13,125 |
|
1,672,763 |
|
The amount of interest revenue recognized on a received basis for impaired portfolio in 2013 by Ch$8,734 million (Ch$9,038 million in 2012).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
28. Interest Revenue and Expenses, continued:
(b) At the period end, the detail of income from suspended interest is as follows:
|
|
2013 |
|
2012 |
| ||||||||
|
|
Interest |
|
Adjustment |
|
Total |
|
Interest |
|
Adjustment |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
8,899 |
|
751 |
|
9,650 |
|
6,185 |
|
1,961 |
|
8,146 |
|
Residential mortgage loans |
|
1,342 |
|
744 |
|
2,086 |
|
1,380 |
|
772 |
|
2,152 |
|
Consumer loans |
|
275 |
|
|
|
275 |
|
269 |
|
|
|
269 |
|
Total |
|
10,516 |
|
1,495 |
|
12,011 |
|
7,834 |
|
2,733 |
|
10,567 |
|
(c) As of each year end, interest and adjustment expenses (not including hedge gain) are detailed as follows:
|
|
2013 |
|
2012 |
| ||||||||
|
|
Interest |
|
Adjustment |
|
Total |
|
Interest |
|
Adjustment |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings accounts and time deposits |
|
439,553 |
|
43,047 |
|
482,600 |
|
441,256 |
|
55,729 |
|
496,985 |
|
Debt issued |
|
134,585 |
|
64,745 |
|
199,330 |
|
109,742 |
|
60,480 |
|
170,222 |
|
Other financial obligations |
|
1,977 |
|
837 |
|
2,814 |
|
2,117 |
|
961 |
|
3,078 |
|
Repurchase agreements |
|
13,149 |
|
|
|
13,149 |
|
14,976 |
|
10 |
|
14,986 |
|
Borrowings from financial institutions |
|
13,791 |
|
|
|
13,791 |
|
22,308 |
|
|
|
22,308 |
|
Demand deposits |
|
168 |
|
2,985 |
|
3,153 |
|
76 |
|
3,870 |
|
3,946 |
|
Other interest expenses |
|
|
|
99 |
|
99 |
|
15 |
|
92 |
|
107 |
|
Total |
|
603,223 |
|
111,713 |
|
714,936 |
|
590,490 |
|
121,142 |
|
711,632 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
28. Interest Revenue and Expenses, continued:
(d) As of December 31, 2013 and 2012, the Bank uses interest rate swaps to hedge its position on the fair value of corporate bonds and commercial loans through micro-hedging.
|
|
2013 |
|
2012 |
| ||||||||
|
|
Income |
|
Expenses |
|
Total |
|
Income |
|
Expenses |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from accounting hedges |
|
20,804 |
|
14,015 |
|
34,819 |
|
3,632 |
|
3,003 |
|
6,635 |
|
Loss from accounting hedges |
|
(42,249 |
) |
(3,450 |
) |
(45,699 |
) |
(12,637 |
) |
|
|
(12,637 |
) |
Net gain on hedged items |
|
(7,652 |
) |
|
|
(7,652 |
) |
(2,291 |
) |
|
|
(2,291 |
) |
Total |
|
(29,097 |
) |
10,565 |
|
(18,532 |
) |
(11,296 |
) |
3,003 |
|
(8,293 |
) |
(d) At the end of the period the summary of interest and expenses is as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Interest revenue |
|
1,792,637 |
|
1,672,763 |
|
Interest expenses |
|
(714,936 |
) |
(711,632 |
) |
Subtotal |
|
1,077,701 |
|
961,131 |
|
|
|
|
|
|
|
Income accounting hedges (net) |
|
(18,532 |
) |
(8,293 |
) |
|
|
|
|
|
|
Total interest revenue and expenses, net |
|
1,059,169 |
|
952,838 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
29. Income and Expenses from Fees and Commissions:
The income and expenses for fees and commissions shown in the Consolidated Statements of Comprehensive Income refer to the following items:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Income from fees and commission |
|
|
|
|
|
Card services(*) |
|
108,851 |
|
104,007 |
|
Collections and payments |
|
64,135 |
|
60,341 |
|
Investments in mutual funds and other |
|
54,833 |
|
56,043 |
|
Portfolio management(**) |
|
35,920 |
|
31,446 |
|
Lines of credit and overdrafts |
|
22,206 |
|
22,892 |
|
Fees for insurance transactions |
|
18,840 |
|
17,404 |
|
Guarantees and letters of credit |
|
17,611 |
|
14,454 |
|
Trading and securities management |
|
17,526 |
|
16,892 |
|
Use of distribution channel |
|
14,705 |
|
15,942 |
|
Use Banchiles brand |
|
12,551 |
|
12,356 |
|
Financial advisory services |
|
4,054 |
|
3,955 |
|
Other fees earned(**) |
|
15,501 |
|
17,035 |
|
Total income from fees and commissions |
|
386,733 |
|
372,767 |
|
|
|
|
|
|
|
Expenses from fees and commissions |
|
|
|
|
|
Credit card transactions(***) |
|
(75,083 |
) |
(62,020 |
) |
Sales force fees |
|
(11,815 |
) |
(10,098 |
) |
Fees for collections and payments |
|
(6,658 |
) |
(6,534 |
) |
Fees for securities transactions |
|
(3,103 |
) |
(2,994 |
) |
Sale of mutual fund units |
|
(2,318 |
) |
(2,488 |
) |
Other fees |
|
(662 |
) |
(1,361 |
) |
Total expenses from fees and commissions |
|
(99,639 |
) |
(85,495 |
) |
(*) During 2013 it was reclassified fees related to income from card services from Other fees earned to Card services. Reclassified amount in the period 2012 was Ch$1,600 millions.
(**) During 2013 it was reclassified fees related to income from portfolio management from Other fees earned to Portfolio management. Reclassified amount in the period 2012 was Ch$4,129 millions.
(***) See Note 2 (ae) about Reclassifications
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
30. Net Financial Operating Income:
The gain (losses) from trading and brokerage activities is detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Financial assets held-for-trading |
|
25,434 |
|
18,798 |
|
Sale of available-for-sale instruments |
|
14,881 |
|
8,088 |
|
Sale of loan portfolios |
|
314 |
|
146 |
|
Net loss on other transactions |
|
(1,089 |
) |
2,567 |
|
Derivative instruments |
|
(28,456 |
) |
(4,852 |
) |
Total |
|
11,084 |
|
24,747 |
|
31. Foreign Exchange Transactions, net:
Net foreign exchange transactions are detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
(Loss) gain from accounting hedges |
|
65,802 |
|
(196 |
) |
(Loss) gain on translation difference, net |
|
7,451 |
|
(9,404 |
) |
Indexed foreign currency |
|
(1,796 |
) |
44,736 |
|
Total |
|
71,457 |
|
35,136 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
32. Provisions for Loan Losses:
The movement of the results during 2013 and 2012, by concept of provisions, is summarized as follows:
|
|
Loans and |
|
Loans to customers |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
|
advances to |
|
Commercial |
|
Mortgage |
|
Consumer |
|
Total |
|
Contingent |
|
Total |
| ||||||||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Provisions established: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual provisions |
|
(333 |
) |
|
|
(39,165 |
) |
(13,668 |
) |
|
|
|
|
|
|
|
|
(39,165 |
) |
(13,668 |
) |
(3,955 |
) |
(1,029 |
) |
(43,453 |
) |
(14,697 |
) |
Group provisions |
|
|
|
|
|
(49,808 |
) |
(46,807 |
) |
(5,665 |
) |
(4,428 |
) |
(167,496 |
) |
(160,775 |
) |
(222,969 |
) |
(212,010 |
) |
(8,737 |
) |
(222 |
) |
(231,706 |
) |
(212,232 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions established, net |
|
(333 |
) |
|
|
(88,973 |
) |
(60,475 |
) |
(5,665 |
) |
(4,428 |
) |
(167,496 |
) |
(160,775 |
) |
(262,134 |
) |
(225,678 |
) |
(12,692 |
) |
(1,251 |
) |
(275,159 |
) |
(226,929 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions released: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual provisions |
|
|
|
47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47 |
|
Group provisions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions released, net |
|
|
|
47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision, net |
|
(333 |
) |
47 |
|
(88,973 |
) |
(60,475 |
) |
(5,665 |
) |
(4,428 |
) |
(167,496 |
) |
(160,775 |
) |
(262,134 |
) |
(225,678 |
) |
(12,692 |
) |
(1,251 |
) |
(275,159 |
) |
(226,882 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional provision |
|
|
|
|
|
(10,000 |
) |
(2,271 |
) |
|
|
|
|
|
|
|
|
(10,000 |
) |
(2,271 |
) |
|
|
|
|
(10,000 |
) |
(2,271 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery of written-off assets |
|
|
|
|
|
13,921 |
|
14,893 |
|
1,927 |
|
1,971 |
|
27,698 |
|
24,099 |
|
43,546 |
|
40,963 |
|
|
|
|
|
43,546 |
|
40,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions, net allowances for credit risk |
|
(333 |
) |
47 |
|
(85,052 |
) |
(47,853 |
) |
(3,738 |
) |
(2,457 |
) |
(139,798 |
) |
(136,676 |
) |
(228,588 |
) |
(186,986 |
) |
(12,692 |
) |
(1,251 |
) |
(241,613 |
) |
(188,190 |
) |
According to the Administration, the provisions constituted by credit risk, covers probable losses that could arise from the non-recovery of assets.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
Personnel expenses in 2013 and 2012 are detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Remuneration |
|
192,182 |
|
185,479 |
|
Bonuses |
|
76,285 |
|
71,674 |
|
Lunch and health benefits |
|
22,631 |
|
21,954 |
|
Staff severance indemnities |
|
10,523 |
|
10,408 |
|
Training expenses |
|
2,877 |
|
1,671 |
|
Other personnel expenses |
|
18,738 |
|
18,679 |
|
Total |
|
323,236 |
|
309,865 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
As of December 31, 2013 and 2012, administrative expenses are detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
General administrative expenses |
|
|
|
|
|
Information Technology and communications |
|
50,465 |
|
48,670 |
|
Maintenance and repair of property and equipment |
|
28,067 |
|
29,332 |
|
Office rental |
|
20,176 |
|
19,589 |
|
Securities and valuables transport services |
|
9,741 |
|
9,217 |
|
Office supplies |
|
8,375 |
|
6,346 |
|
Rent ATM area |
|
7,496 |
|
7,283 |
|
External advisory services |
|
6,843 |
|
7,601 |
|
Lighting, heating and other utilities |
|
4,394 |
|
4,733 |
|
Representation and transferring of personnel |
|
4,359 |
|
3,611 |
|
Legal and notary |
|
3,781 |
|
3,291 |
|
Insurance premiums |
|
3,121 |
|
2,897 |
|
P.O box, mail and postage |
|
2,892 |
|
2,739 |
|
Donations |
|
1,929 |
|
2,029 |
|
Home delivery products |
|
1,430 |
|
1,648 |
|
Equipment rental |
|
1,204 |
|
1,164 |
|
Collection service |
|
1,012 |
|
880 |
|
Fees for professional services |
|
592 |
|
776 |
|
SBIF fines |
|
|
|
40 |
|
Other general administrative expenses |
|
8,351 |
|
8,871 |
|
Subtotal |
|
164,228 |
|
160,717 |
|
|
|
|
|
|
|
Outsources services |
|
|
|
|
|
Credit pre-evaluation services |
|
23,471 |
|
21,316 |
|
Data processing |
|
7,159 |
|
7,646 |
|
Expenditure on external technological developments |
|
6,430 |
|
6,196 |
|
Certification and testing technology |
|
4,314 |
|
4,342 |
|
Other |
|
2,743 |
|
2,515 |
|
Subtotal |
|
44,117 |
|
42,015 |
|
|
|
|
|
|
|
Board expenses |
|
|
|
|
|
Board remunerations |
|
2,110 |
|
2,042 |
|
Other board expenses |
|
479 |
|
614 |
|
Subtotal |
|
2,589 |
|
2,656 |
|
|
|
|
|
|
|
Marketing expenses |
|
|
|
|
|
Advertising |
|
29,053 |
|
30,572 |
|
Subtotal |
|
29,053 |
|
30,572 |
|
|
|
|
|
|
|
Taxes, payroll taxes and contributions |
|
|
|
|
|
Contribution to the Superintendency of Banks |
|
6,949 |
|
6,434 |
|
Real estate contributions |
|
3,101 |
|
2,672 |
|
Patents |
|
1,675 |
|
1,379 |
|
Other taxes |
|
789 |
|
1,014 |
|
Subtotal |
|
12,514 |
|
11,499 |
|
Total |
|
252,501 |
|
247,459 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
35. Depreciation, Amortization and Impairment:
(a) Amounts charged to income for depreciation and amortization during the 2013 and 2012 periods are detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
Depreciation of property and equipment (Note No.16a) |
|
19,280 |
|
20,614 |
|
Amortization of intangibles assets (Note No.15b) |
|
9,629 |
|
10,343 |
|
Total |
|
28,909 |
|
30,957 |
|
(b) As of December 31, 2013 and 2012, the impairment loss is detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Impairment loss |
|
|
|
|
|
Impairment loss on investment instruments |
|
|
|
551 |
|
Impairment loss on property and equipment (Note No.16a) |
|
757 |
|
348 |
|
Impairment loss on intangibles assets(*) |
|
1,490 |
|
|
|
Total |
|
2,247 |
|
899 |
|
(*) As of December 31, 2013, it is recognised impairment by an amount of Ch$1,462 million that at the end of this period it has been not applied.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
During 2013 and 2012, the Bank and its subsidiaries present the following under other operating income:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Income for assets received in lieu of payment |
|
|
|
|
|
Income from sale of assets received in lieu of payment |
|
6,126 |
|
5,674 |
|
Other income |
|
113 |
|
8 |
|
Subtotal |
|
6,239 |
|
5,682 |
|
|
|
|
|
|
|
Release of provisions for contingencies |
|
|
|
|
|
Country risk provisions |
|
1,336 |
|
1,174 |
|
Special provisions for foreign loans |
|
|
|
|
|
Other provisions for contingencies |
|
1,376 |
|
624 |
|
Subtotal |
|
2,712 |
|
1,798 |
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
Rental income |
|
7,440 |
|
6,007 |
|
Recovery from external branches |
|
2,264 |
|
2,379 |
|
Expense recovery |
|
2,044 |
|
2,782 |
|
Sale of recoveries charge-off leased assets |
|
1,626 |
|
113 |
|
Monthly prepaid taxes revaluation |
|
934 |
|
315 |
|
Indemnities received |
|
901 |
|
|
|
Income from differences sale leased assets |
|
614 |
|
135 |
|
Gain on sale of property and equipment |
|
224 |
|
325 |
|
Fiduciary and trustee commissions |
|
201 |
|
466 |
|
Refund of insurance |
|
40 |
|
18 |
|
Foreign trade income |
|
27 |
|
51 |
|
Income tax management |
|
17 |
|
275 |
|
Others |
|
1,938 |
|
1,715 |
|
Subtotal |
|
18,270 |
|
14,581 |
|
|
|
|
|
|
|
Total |
|
27,221 |
|
22,061 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
During 2013 and 2012, the Bank and its subsidiaries incurred the following other operating expenses:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Provisions and expenses for assets received in lieu of payment |
|
|
|
|
|
Charge-off assets received in lieu of payment |
|
1,891 |
|
2,600 |
|
Expenses to maintain assets received in lieu of payment |
|
502 |
|
622 |
|
Provisions for assets received in lieu of payment |
|
51 |
|
100 |
|
Subtotal |
|
2,444 |
|
3,322 |
|
|
|
|
|
|
|
Provisions for contingencies |
|
|
|
|
|
Country risk provisions |
|
|
|
|
|
Special provisions for foreign loans |
|
|
|
|
|
Other provisions for contingencies |
|
582 |
|
1,109 |
|
Subtotal |
|
582 |
|
1,109 |
|
|
|
|
|
|
|
Other expenses |
|
|
|
|
|
Provisions and Write-offs other assets |
|
4,745 |
|
6,333 |
|
Write-offs for operating risks |
|
4,145 |
|
9,526 |
|
Card administration |
|
1,106 |
|
1,113 |
|
Provision for recovery of leased assets |
|
852 |
|
227 |
|
Mortgage life insurance |
|
432 |
|
309 |
|
Contributions to government organizations |
|
218 |
|
225 |
|
Civil judgments |
|
209 |
|
224 |
|
Losses on sale of property and equipment |
|
5 |
|
7 |
|
Others |
|
1,313 |
|
59 |
|
Subtotal |
|
13,025 |
|
18,023 |
|
|
|
|
|
|
|
Total |
|
16,051 |
|
22,454 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
38. Related Party Transactions:
The related parties of companies and their subsidiaries include entities of the companys corporate group; corporations which are the companys parent company, associated companies, subsidiaries, associates; directors, managers, administrators, main executives or receivers of the company on their own behalf or in representation of persons other than the company, and their respective spouses or family members up to the second degree of consanguinity or affinity, as well as any entity directly or indirectly controlled through any of them, the partnerships or companies in which the aforementioned persons are owners, directly or through other individuals or corporations, of 10% or more of their capital or directors, managers, administrators or main executives; any person that on their own or with others with whom they have a joint action agreement can designate at least one member of the companys management or controls 10% or more of the capital or of the voting capital, if dealing with a public corporation; those that establish the companys bylaws, or with a sound basis identify the directors committee; and those who have held the position of director, manager, administrator, main executive or receiver within the last eighteen months.
Corporations Art. 147, states that a public corporation can only enter into transactions with related parties when the objective is to contribute to the companys interests, when terms of price, terms and conditions are commensurate to those prevailing in the market at the time of their approval and comply with the requirements and procedures stated in the same standard.
Moreover, article 84 of the General Banking Law establishes limits for loans granted to related parties and prohibits the granting of loans to the Banks directors, managers and general representatives.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
38. Related Party Transactions, continued:
(a) Loans to related parties:
The following table details loans and accounts receivable, contingent loans and assets related to trading and investment securities, corresponding to related entities.
|
|
Production |
|
Investment |
|
|
|
|
|
|
|
|
| ||||
|
|
Companies (*) |
|
Companies (**) |
|
Individuals (***) |
|
Total |
| ||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Loans and accounts receivable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
287,500 |
|
250,983 |
|
70,004 |
|
63,576 |
|
1,199 |
|
704 |
|
358,703 |
|
315,263 |
|
Residential mortgage loans |
|
|
|
|
|
|
|
|
|
16,911 |
|
14,974 |
|
16,911 |
|
14,974 |
|
Consumer loans |
|
|
|
|
|
|
|
|
|
3,790 |
|
3,920 |
|
3,790 |
|
3,920 |
|
Gross loans |
|
287,500 |
|
250,983 |
|
70,004 |
|
63,576 |
|
21,900 |
|
19,598 |
|
379,404 |
|
334,157 |
|
Provision for loan losses |
|
(929 |
) |
(761 |
) |
(152 |
) |
(136 |
) |
(52 |
) |
(68 |
) |
(1,133 |
) |
(965 |
) |
Net loans |
|
286,571 |
|
250,222 |
|
69,852 |
|
63,440 |
|
21,848 |
|
19,530 |
|
378,271 |
|
333,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Off balance sheet accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guarantees |
|
1,109 |
|
1,864 |
|
|
|
|
|
|
|
|
|
1,109 |
|
1,864 |
|
Letters of credits |
|
3,390 |
|
280 |
|
|
|
|
|
|
|
|
|
3,390 |
|
280 |
|
Banks guarantees |
|
23,172 |
|
24,361 |
|
1,599 |
|
2,374 |
|
|
|
|
|
24,771 |
|
26,735 |
|
Immediately available credit lines |
|
58,023 |
|
46,179 |
|
9,519 |
|
4,532 |
|
10,165 |
|
9,320 |
|
77,707 |
|
60,031 |
|
Total off balance sheet account |
|
85,694 |
|
72,684 |
|
11,118 |
|
6,906 |
|
10,165 |
|
9,320 |
|
106,977 |
|
88,910 |
|
Provision for contingencies loans |
|
(34 |
) |
(44 |
) |
(1 |
) |
(1 |
) |
|
|
|
|
(35 |
) |
(45 |
) |
Off balance sheet account, net |
|
85,660 |
|
72,640 |
|
11,117 |
|
6,905 |
|
10,165 |
|
9,320 |
|
106,942 |
|
88,865 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount covered by Collateral |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage |
|
27,122 |
|
31,034 |
|
55 |
|
55 |
|
14,476 |
|
15,325 |
|
41,653 |
|
46,414 |
|
Warrant |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pledge |
|
13 |
|
13 |
|
|
|
|
|
7 |
|
7 |
|
20 |
|
20 |
|
Other (****) |
|
2,849 |
|
2,842 |
|
17,300 |
|
17,300 |
|
10 |
|
10 |
|
20,159 |
|
20,152 |
|
Total collateral |
|
29,984 |
|
33,889 |
|
17,355 |
|
17,355 |
|
14,493 |
|
15,342 |
|
61,832 |
|
66,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired Instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For trading purposes |
|
1,078 |
|
|
|
|
|
|
|
|
|
|
|
1,078 |
|
|
|
For investment purposes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquired instruments |
|
1,078 |
|
|
|
|
|
|
|
|
|
|
|
1,078 |
|
|
|
(*) |
Production companies are legal entities which comply with the following conditions: | |
|
i) |
They engage in productive activities and generate a separable flow of income, |
|
ii) |
Less than 50% of their assets are trading securities or investments. |
|
| |
(**) |
Investment companies include those legal entities that do not comply with the conditions for production companies and are profit-oriented. | |
|
| |
(***) |
Individuals include key members of the management, who directly or indirectly posses the authority and responsibility of planning, administrating and controlling the activities of the organization, including directors. This category also includes their family members who are expected to have an influence or to be influenced by such individuals in their interactions with the organization. | |
|
| |
(****) |
These guarantees correspond mainly to shares and other financial guarantees |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
38. Related Party Transactions, continued:
(a) Other assets and liabilities with related parties:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Assets |
|
|
|
|
|
Cash and due from banks |
|
12,692 |
|
11,174 |
|
Derivative instruments |
|
76,532 |
|
107,487 |
|
Other assets |
|
2,847 |
|
2,931 |
|
Total |
|
92,071 |
|
121,592 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Demand deposits |
|
123,223 |
|
87,480 |
|
Savings accounts and time deposits |
|
233,172 |
|
378,965 |
|
Derivative instruments |
|
85,694 |
|
83,582 |
|
Borrowings from financial institutions |
|
192,682 |
|
134,820 |
|
Other liabilities |
|
23,836 |
|
9,044 |
|
Total |
|
658,607 |
|
693,891 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
38. Related Party Transactions, continued:
(c) Income and expenses from related party transactions (*):
|
|
2013 |
|
2012 |
| ||||
Type of income or expense recognized |
|
Income |
|
Expense |
|
Income |
|
Expense |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
Interest and revenue expenses |
|
21,280 |
|
15,917 |
|
18,759 |
|
21,501 |
|
Fees and commission income |
|
61,560 |
|
35,897 |
|
56,717 |
|
33,337 |
|
Financial operating |
|
130,344 |
|
177,692 |
|
188,990 |
|
152,819 |
|
Provision for credit risk |
|
81 |
|
|
|
|
|
677 |
|
Operating expenses |
|
|
|
66,313 |
|
|
|
64,213 |
|
Other income and expenses |
|
553 |
|
27 |
|
744 |
|
40 |
|
Total |
|
213,818 |
|
295,846 |
|
265,210 |
|
272,587 |
|
(*) This detail does not constitute an Income Statement for related party transactions since assets with these parties are not necessarily equal to liabilities and each item reflects total income and expense and does not correspond to exact transactions.
(d) Related party contracts:
There are no any contracts entered during 2013 and 2012 which does not represent a customary transaction within the Banks line of business with general customers and which accounts for amounts greater than UF 1,000.
(e) Payments to key management personnel:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Remunerations |
|
3,372 |
|
3,820 |
|
Short-term benefits |
|
3,093 |
|
3,871 |
|
Contract termination indemnity |
|
418 |
|
668 |
|
Stock-based benefits |
|
|
|
|
|
Others |
|
|
|
|
|
Total |
|
6,883 |
|
8,359 |
|
Composition of key personnel:
|
|
N° of executives |
| ||
Position |
|
2013 |
|
2012 |
|
CEO |
|
1 |
|
1 |
|
CEOs of subsidiaries |
|
6 |
|
8 |
|
Division Managers |
|
12 |
|
12 |
|
Total |
|
19 |
|
21 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
38. Related Party Transactions, continued:
(f) Directors expenses and remunerations:
|
|
Remunerations |
|
Fees for attending |
|
Fees for attending |
|
Consulting |
|
Total |
| ||||||||||
Name of Directors |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pablo Granifo Lavín |
|
363 |
(*) |
358 |
(*) |
48 |
|
45 |
|
321 |
|
294 |
|
|
|
|
|
732 |
|
697 |
|
Andrónico Luksic Craig |
|
149 |
|
147 |
|
13 |
|
8 |
|
|
|
|
|
|
|
|
|
162 |
|
155 |
|
Jorge Awad Mehech |
|
50 |
|
49 |
|
24 |
|
23 |
|
113 |
|
110 |
|
|
|
|
|
187 |
|
182 |
|
Gonzalo Menéndez Duque |
|
50 |
|
49 |
|
20 |
|
21 |
|
110 |
|
112 |
|
|
|
|
|
180 |
|
182 |
|
Jaime Estévez Valencia |
|
50 |
|
49 |
|
23 |
|
23 |
|
97 |
|
92 |
|
|
|
|
|
170 |
|
164 |
|
Francisco Pérez Mackenna |
|
50 |
|
49 |
|
21 |
|
17 |
|
60 |
|
50 |
|
|
|
|
|
131 |
|
116 |
|
Rodrigo Manubens Moltedo |
|
50 |
|
49 |
|
23 |
|
23 |
|
52 |
|
49 |
|
|
|
|
|
125 |
|
121 |
|
Jorge Ergas Heyman |
|
50 |
|
49 |
|
19 |
|
17 |
|
46 |
|
47 |
|
|
|
|
|
115 |
|
113 |
|
Thomas Fürst Freiwirth |
|
50 |
|
49 |
|
20 |
|
18 |
|
39 |
|
37 |
|
|
|
|
|
109 |
|
104 |
|
Jean-Paul Luksic Fontbona |
|
34 |
|
|
|
10 |
|
|
|
2 |
|
|
|
|
|
|
|
46 |
|
|
|
Guillermo Luksic Craig |
|
12 |
|
49 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
12 |
|
53 |
|
Jacob Ergas Ergas |
|
|
|
|
|
|
|
|
|
8 |
|
9 |
|
|
|
|
|
8 |
|
9 |
|
Other directors subsidiaries |
|
|
|
|
|
|
|
|
|
149 |
|
165 |
|
|
|
|
|
149 |
|
165 |
|
Total |
|
908 |
|
897 |
|
221 |
|
199 |
|
997 |
|
965 |
|
|
|
|
|
2,126 |
|
2,061 |
|
(1) Includes fees paid to members of the Advisory Committee of Banchile Corredores de Seguros Ltda. of MCh$15 (MCh$19 in 2012).
(*) Includes a provision of MCh$214(MCh$210 in 2012) for an incentive subject to achieving the Banks forecasted earnings.
Fees paid for advisory services to the Board of Directors amount to MCh$273 (MCh$266 in 2012).
Travel and other related expenses amount to MCh$190 (MCh$329 in 2012).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities:
Banco de Chile and its subsidiaries have defined a corporate framework for the Fair Value measurement and control to accomplish the Fair Value process according to local regulations, market standards and best practices in the industry. This framework is contained into the Banco de Chiles Fair Value Policy.
One of the most important definition in this framework is the Product Control Unit, hereinafter PCU, function. This area is independent from both the principal management and the business unit, and reports to the CFO of Banco de Chile. This area is responsible for the independent verification of Profit and Losses, and Fair Value measurement and control for all Treasury transactions; Trading, Funding and gapping and Investments deals.
To accomplish the measurements and controls, Banco de Chile and its subsidiaries, take into account at least the following aspects:
(i) Industry standards of fair value measurements
In the fair value calculation process, is used standard methodologies; closing prices, discounted cash flows and option models, Black-Scholes model, in the options case. The input parameters are rates, prices and volatility levels for each term and market factor that can change the fair value of any instrument in the portfolio.
(ii) Quoted prices in active markets
The fair value for instruments with quoted prices in active markets is determined using daily quotes from electronic systems information as Bloomberg and Bolsa de Comercio de Santiago terminals. This quote represents the price at which the instrument is frequently buy and sell in financial markets.
The prices used for determine the fair value of each instrument corresponds to the midpoint for a specific market factor, currency and term.
(iii) Valuation techniques
If there is not market quotes in active markets for the financial instrument, valuation techniques will be used to determine the fair value.
Due to the fact that fair value models requires a set of market parameters as inputs, it is part of the fair value process to maximize the utilization based in observable quoted prices or derived from similar instruments in active markets. Nevertheless there are some cases for which neither quoted prices nor derived prices are available; in these cases external data from specialized providers, brokers such as ICAP, price for similar transactions and historical information it is used for validate the parameters that will be used as inputs.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(iv) Fair value adjustments
Part of the fair value process consist in adjustment, Market Value Adjustments or MVA for short, to take into account two different market facts; bid/offer spreads and market factors liquidity. These adjustments are calculated and analyzed by the PCU and Risk Market areas.
The bid/offer spread adjustment reflects the expected impact on fair value due to close long or short positions in a specific market factor and term, valuated at midpoint. For example, long positions in an asset will be impacted in order to reflect the fact that in selling that position will be quoted at bid instead at midpoint. For the bid/offer spread adjustment, market quotes or indicative prices for each position, instrument, currency and term are used. Bid, mid and offer market quotes are considered.
The liquidity adjustment considers the relative size to the market of each position in the portfolio. This adjustment is intended to reflect the relative size of Banco de Chile and the deepness of the markets. For this adjustment, the size of each position, recent transaction in active markets and recently observed liquidity are taking into account.
(v) Fair value control
To ensure that the market input parameters that Banco de Chile is using for fair value calculations represent the state of the market and the best estimate of fair value, the PCU unit runs on a daily basis an independent verification of prices and rates. This process aims to set a preventive control on the official market parameters provided by the respective business area. A comparative control based on Mark-to-Market differences, using one set of inputs prepared by the business area and one set prepared by the PCU, is conducted before fair value calculations. The output of this process is a set of differences in fair value by currency, product and portfolio. These differences are compared with specific ranges by grouping level; currency, product and portfolio.
In the event when significant differences were detected, these differences are scaled according to the amount of materiality for each grouping level, from a single report to the trader until a report to the Board. These ranges of materiality control are approved by the Assets and Liabilities Committee (ALCO).
Complementary and in parallel, the PCU generates daily reports of P&L and risk market exposure. These two kind of reports allows adequate control and consistency of the parameters used in the valuation, looking backwards revision.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(vi) Judgmental analysis and information to Senior Management
In particular no cases where there is no market quotations for the instrument, similar transaction prices or indicative parameters, a reasoned analysis and specific controls should be made to estimate the fair value of the operation or transaction. Within the Banco de Chiles framework for fair value, described in the Fair Value Policy approved by the Board of Banco de Chile, the approval level required for operate this kind of instruments, there is no market information or cannot be inferred from prices or rates, is established.
(a) Fair value hierarchy
Banco de Chile and his subsidiaries, taken into account the preceding statements, classify all the financial instruments among the following levels:
Level 1: Observable, quoted price in active markets for the same instrument or specific type of transaction to be evaluated.
In this level are considered the following instruments: currency futures, Chilean central bank and treasury securities, mutual funds investments and equity.
For the Chilean central bank and treasury securities, all instruments that belong to one of the following benchmark groups will be considered as Level 1: Pesos-02, Pesos-05, Pesos-07, Pesos-10, UF-02, UF-05, UF-07, UF-10, UF-20, UF-30. A benchmark group is composed by a number of instruments that have similar duration and share the same quoted price within the group. This condition allows for a greater depth of the market, assuring daily observable quotes.
For each and every one of these instruments exist daily observable market valuation parameters; internal rates of return and closing prices, respectively, therefore no assumptions are needed to calculate the fair value. For currency futures as well as mutual funds and equity, closing prices times the number of instruments is used for fair value calculations. For Chilean central bank and treasury securities the internal rate of return is used to discount every cash flow and obtain the fair value of each instrument, for each currency; CLP or CLF.
The preceding described methodology corresponds to the one utilized for the Bolsa de Comercio de Santiago (Santiagos main Exchange) and is recognized as the standard in the market.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(a) Fair value hierarchy, continued
Level 2: No market quotes are available for the specific financial instrument, or the observable prices are sporadic and therefore the market does not have enough depth. For instruments in this level the valuation is done based on inference from observable market parameters; quoted prices for similar instruments in active markets.
This level is composed mostly by derivatives, currency and rate derivatives, banks debt securities, mortgage claims, money market instruments and less liquid Chilean central bank and treasury securities.
For derivatives the fair value process depend upon his value is impacted by volatility as a relevant market factor; if is the case, Black-Scholes-Merton type of formula it is used. For the rest of the derivatives, swaps and forwards, net present value through discounted cash flows is used. For securities classified as level 2, the obtained internal rate of return is used to discount every cash flow and obtain the fair value of each instrument, for each currency.
In the event that there is no observable price for an instrument in a specific term, the price will be inferred from the interpolation between periods that do have observable quoted price in active markets. These models incorporate various market variables, including foreign exchange rates and interest rate curves. In some cases external data from specialized providers, brokers such as ICAP and Riskamerica, price for similar transactions and historical information it is used for validate the parameters that will be used as inputs.
The techniques described above are used by the Santiago Stock Exchange in Chile, Bloomberg or the Over-the-Counter, and correspond to the standard methodology used in the local and international markets.
Level 3: The input parameters used in the valuation of financial instruments classified in this level, are not observable through market quotes in active markets neither can be inferred directly from other transaction information in active markets.
Instruments classified as level 3 correspond to Corporate Debt issued mainly Chilean and foreign companies, issued both in Chile and abroad. These instruments are classified, for accounting purposes, as Available for Sale. For this securities classified as level 3, the indicative internal rate of return is used to discount every cash flow and obtain the fair value of each instrument, for each currency. In this case only external data from specialized providers, brokers such as ICAP, Riskamerica and Interactive Data, it is used to for validate the parameters that will be used as inputs.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(a) Fair value hierarchy, continued
For this level corresponds to the described technique used by both the Bolsa de Comercio de Santiago de Chile as Bloomberg, and correspond to the standard methodology used in the local and international market.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(b) Level hierarchy classification and figures
The following table shows the figures by hierarchy, for instruments registered at fair value.
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
| ||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held-for-trading from the Chilean Government and Central Bank |
|
31,326 |
|
65,548 |
|
33,611 |
|
6,831 |
|
|
|
|
|
64,937 |
|
72,379 |
|
Other instruments issued in Chile |
|
1,034 |
|
188 |
|
255,597 |
|
87,115 |
|
5,353 |
|
|
|
261,984 |
|
87,303 |
|
Instruments issued abroad |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual fund investments |
|
66,213 |
|
33,042 |
|
|
|
|
|
|
|
|
|
66,213 |
|
33,042 |
|
Subtotal |
|
98,573 |
|
98,778 |
|
289,208 |
|
93,946 |
|
5,353 |
|
|
|
393,134 |
|
192,724 |
|
Derivative contracts for trading purposes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forwards |
|
|
|
|
|
41,673 |
|
70,166 |
|
|
|
|
|
41,673 |
|
70,166 |
|
Swaps |
|
|
|
|
|
291,429 |
|
258,496 |
|
|
|
|
|
291,429 |
|
258,496 |
|
Call Options |
|
|
|
|
|
2,301 |
|
472 |
|
|
|
|
|
2,301 |
|
472 |
|
Put Options |
|
|
|
|
|
600 |
|
341 |
|
|
|
|
|
600 |
|
341 |
|
Futures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
|
|
|
|
336,003 |
|
329,475 |
|
|
|
|
|
336,003 |
|
329,475 |
|
Hedge accounting derivative contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swaps |
|
|
|
|
|
38,685 |
|
22 |
|
|
|
|
|
38,685 |
|
22 |
|
Subtotal |
|
|
|
|
|
38,685 |
|
22 |
|
|
|
|
|
38,685 |
|
22 |
|
Financial assets available-for-sale from the Chilean Government and Central Bank |
|
163,875 |
|
136,554 |
|
422,533 |
|
115,230 |
|
|
|
|
|
586,408 |
|
251,784 |
|
Other instruments issued in Chile |
|
|
|
|
|
714,747 |
|
646,079 |
|
296,327 |
|
278,073 |
|
1,011,074 |
|
924,152 |
|
Instruments issued abroad |
|
42,236 |
|
30,538 |
|
|
|
|
|
33,986 |
|
57,966 |
|
76,222 |
|
88,504 |
|
Subtotal |
|
206,111 |
|
167,092 |
|
1,137,280 |
|
761,309 |
|
330,313 |
|
336,039 |
|
1,673,704 |
|
1,264,440 |
|
Total |
|
304,684 |
|
265,870 |
|
1,801,176 |
|
1,184,752 |
|
335,666 |
|
336,039 |
|
2,441,526 |
|
1,786,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative contracts for trading purposes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forwards |
|
|
|
|
|
65,396 |
|
81,790 |
|
|
|
|
|
65,396 |
|
81,790 |
|
Swaps |
|
|
|
|
|
343,467 |
|
264,052 |
|
|
|
|
|
343,467 |
|
264,052 |
|
Call Options |
|
|
|
|
|
3,559 |
|
395 |
|
|
|
|
|
3,559 |
|
395 |
|
Put Options |
|
|
|
|
|
705 |
|
387 |
|
|
|
|
|
705 |
|
387 |
|
Futures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
|
|
|
|
413,127 |
|
346,624 |
|
|
|
|
|
413,127 |
|
346,624 |
|
Hedge derivative contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swaps |
|
|
|
|
|
32,005 |
|
33,698 |
|
|
|
|
|
32,005 |
|
33,698 |
|
Subtotal |
|
|
|
|
|
32,005 |
|
33,698 |
|
|
|
|
|
32,005 |
|
33,698 |
|
Total |
|
|
|
|
|
445,132 |
|
380,322 |
|
|
|
|
|
445,132 |
|
380,322 |
|
(1) As of December 31, 2013, 92% of instruments of level 3 have denomination Investment Grade, meaning are assets with a classification BBB- or higher. Also, 90% of total of these financial instruments correspond to domestic issuers.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(c) Level 3 reconciliation
The following table shows the reconciliation between stock at the beginning and the end of balance periods for instruments classified in Level 3:
|
|
As of December 31, 2013 |
| ||||||||||
|
|
Balance as |
|
Gain (Loss) |
|
Gain (Loss) |
|
Purchases, |
|
Transfer to |
|
Balance as of |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held-for-trading |
|
|
|
|
|
|
|
|
|
|
|
|
|
From Government and Chilean |
|
|
|
|
|
|
|
|
|
|
|
|
|
Central bank instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
|
|
(1,526 |
) |
|
|
6,879 |
|
|
|
5,353 |
|
Instruments issued abroad |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
|
|
(1,526 |
) |
|
|
6,879 |
|
|
|
5,353 |
|
Available for Sale Instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
From Government and Chilean |
|
|
|
|
|
|
|
|
|
|
|
|
|
Central bank instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
278,073 |
|
(5,441 |
) |
4,903 |
|
18,792 |
|
|
|
296,327 |
|
Instruments issued abroad |
|
57,966 |
|
(4,320 |
) |
412 |
|
(20,072 |
) |
|
|
33,986 |
|
Subtotal |
|
336,039 |
|
(9,761 |
) |
5,315 |
|
(1,280 |
) |
|
|
330,313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
336,039 |
|
(11,287 |
) |
5,315 |
|
5,599 |
|
|
|
335,666 |
|
|
|
As of December 31, 2012 |
| ||||||||||
|
|
Balance as of |
|
Gain (Loss) |
|
Gain (Loss) |
|
Purchases, |
|
Transfer to |
|
Balance as of |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held-for-trading |
|
|
|
|
|
|
|
|
|
|
|
|
|
Central bank instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
585 |
|
183 |
|
|
|
(768 |
) |
|
|
|
|
Instruments issued abroad |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
585 |
|
183 |
|
|
|
(768 |
) |
|
|
|
|
Available for Sale Instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
Central bank instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
321,378 |
|
1,511 |
|
(1,410 |
) |
(43,406 |
) |
|
|
278,073 |
|
Instruments issued abroad |
|
128,403 |
|
(5,713 |
) |
19,666 |
|
(59,432 |
) |
(24,958 |
) |
57,966 |
|
Subtotal |
|
449,781 |
|
(4,202 |
) |
18,256 |
|
(102,838 |
) |
(24,958 |
) |
336,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
450,366 |
|
(4,019 |
) |
18,256 |
|
(103,606 |
) |
(24,958 |
) |
336,039 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(d) Sensitivity of level 3 instruments to changes in key assumptions of the input parameters for the valuation model.
The following table shows the sensitivity, by instrument, for instruments classified as level 3 to changes in key assumptions:
|
|
As of December 31, 2013 |
|
As of December 31, 2012 |
| ||||
|
|
Level 3 |
|
Sensitivity to changes |
|
Level 3 |
|
Sensitivity to changes |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
Financial assets held-for-trading |
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
5,353 |
|
(320 |
) |
|
|
|
|
Total |
|
5,353 |
|
(320 |
) |
|
|
|
|
Financial assets available-for-Sale |
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
296,327 |
|
(3,971 |
) |
278,073 |
|
(802 |
) |
Instruments issued abroad |
|
33,986 |
|
(227 |
) |
57,966 |
|
(762 |
) |
Total |
|
330,313 |
|
(4,198 |
) |
336,039 |
|
(1,564 |
) |
With the purpose to determine the sensitivity of the financial investments to changes in significant factors market, the Bank has made alternative calculations at fair value, changing those key parameters for the valuation and which are not directly observables in screens. In the case of financial assets presented above table, which corresponds to bank bonds and corporate bonds, considering that these instruments do not have current prices or observables, was used as inputs prices, prices based on broker quotes or runs. Prices are generally calculated as a base rate plus a spread. For local bonds, this was determined by applying only a 10% impact on the price, while for offshore bonds this was determined by applying only a 10% impact on the spread because the base rate is hedged with instruments on interest rate swaps so-called hedge accounting. The impact of 10% is considered a reasonable move considering the market performance of these instruments and comparing it against the adjustment bid/offer that is provided for by these instruments. The methodology described above begins in the period 2013. Before that date, the methodology consisted in compare the valuation of these instruments using market rates given by Trading Desk of the Bank, with the same calculate, but using rates of independent sources. If this methodology had used in balances as of December 31, 2012, the effect would have been less income of MCh$5,276 million.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(e) Other assets and liabilities
The following table summarizes the fair values of the Banks main financial assets and liabilities that are not recorded at fair value in the Statement of Financial Position. The values shown in this note do not attempt to estimate the value of the Banks income-generating assets, nor forecast their future behavior. The estimated fair value is as follows:
|
|
Book Value |
|
Fair Value |
| ||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Assets |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
873,308 |
|
684,925 |
|
873,308 |
|
684,925 |
|
Transactions in the course of collection |
|
374,471 |
|
396,611 |
|
374,471 |
|
396,611 |
|
Receivables from repurchase agreements and security borrowing |
|
82,422 |
|
35,100 |
|
82,422 |
|
35,100 |
|
Subtotal |
|
1,330,201 |
|
1,116,636 |
|
1,330,201 |
|
1,116,636 |
|
Loans and advances to banks |
|
|
|
|
|
|
|
|
|
Domestic banks |
|
99,976 |
|
14,304 |
|
99,976 |
|
14,304 |
|
Central bank |
|
600,581 |
|
1,100,696 |
|
600,581 |
|
1,100,696 |
|
Foreign banks |
|
361,499 |
|
228,322 |
|
361,499 |
|
228,322 |
|
Subtotal |
|
1,062,056 |
|
1,343,322 |
|
1,062,056 |
|
1,343,322 |
|
Loans to customers, net |
|
|
|
|
|
|
|
|
|
Commercial loans |
|
12,788,810 |
|
11,484,276 |
|
12,695,722 |
|
11,473,251 |
|
Residential mortgage loans |
|
4,713,805 |
|
4,182,587 |
|
4,760,593 |
|
4,201,091 |
|
Consumer loans |
|
2,886,418 |
|
2,667,467 |
|
2,914,188 |
|
2,683,593 |
|
Subtotal |
|
20,389,033 |
|
18,334,330 |
|
20,370,503 |
|
18,357,935 |
|
Total |
|
22,781,290 |
|
20,794,288 |
|
22,762,760 |
|
20,817,893 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current accounts and other demand deposits |
|
5,984,332 |
|
5,470,971 |
|
5,984,332 |
|
5,470,971 |
|
Transactions in the course of payment |
|
126,343 |
|
159,218 |
|
126,343 |
|
159,218 |
|
Payables from repurchase agreements and security lending |
|
256,766 |
|
226,396 |
|
256,766 |
|
226,396 |
|
Savings accounts and time deposits |
|
10,402,725 |
|
9,612,950 |
|
10,422,095 |
|
9,589,643 |
|
Borrowings from financial institutions |
|
989,465 |
|
1,108,681 |
|
984,999 |
|
1,103,252 |
|
Other financial obligations |
|
210,926 |
|
162,123 |
|
210,926 |
|
162,123 |
|
Subtotal |
|
17,970,557 |
|
16,740,339 |
|
17,985,461 |
|
16,711,603 |
|
Debt Issued |
|
|
|
|
|
|
|
|
|
Letters of credit for residential purposes |
|
67,514 |
|
85,967 |
|
70,351 |
|
87,088 |
|
Letters of credit for general purposes |
|
18,977 |
|
29,229 |
|
19,775 |
|
29,610 |
|
Bonds |
|
3,533,462 |
|
2,412,233 |
|
3,446,571 |
|
2,282,014 |
|
Subordinate bonds |
|
747,007 |
|
746,504 |
|
739,184 |
|
726,369 |
|
Subtotal |
|
4,366,960 |
|
3,273,933 |
|
4,275,881 |
|
3,125,081 |
|
Total |
|
22,337,517 |
|
20,014,272 |
|
22,261,342 |
|
19,836,684 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(d) Other assets and liabilities, continued:
The fair value of assets not presented at fair value in the Statement of Financial Position is derived from balance sheet stocks and cash flows that Banco de Chile expects to receive, discounted using the relevant market interest rate for each type of transaction. These lasts cash flows are obtained from regulatory reports, in particular the C40 report.
The C40 report contains cash flows, in future value, for assets and liabilities, by maturity and currency. For long term assets and liabilities, contractual cash flows are used to calculate the fair value. The cash flows are discounted by type of asset and currency to obtain their present value. The discount rates used to calculate the present value for each type of asset and liability correspond to the marginal rates of each product, considering specific rates by currency and term to capture both the risk inherent to the term as well as the expected level of each currency.
For financial assets and liabilities that have a short term maturity (less than three months) it is assumed that the carrying amounts approximate their fair value. This assumption is also applied to demand deposits and savings accounts without specific maturity.
For loans, contractual cash flows and loan loss provisions are used to calculate the fair value. The cash flows are discounted by type of asset and currency to obtain their present value. Consecutively, the loan loss provision, by type of asset, is subtracted from the present value to take into account the fact that the Bank has already model the estimate probability that his customers do not fulfill their obligations.
The fair value of liabilities that do not have quoted market prices, it is based on discounted cash flows, using interest rates to similar terms.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(f) Offsetting of financial assets and liabilities
The Bank trades financial derivatives with foreign counterparties using ISDA Master Agreement (International Swaps and Derivatives Association, Inc.), under legal jurisdiction of the City of New York USA or London United Kingdom. Legal framework in these jurisdictions, along with documentation mentioned, it allows to Banco de Chile the right to anticipate the maturity of the transaction and then, offset the net value of those transactions in case of default of counterparty. The Bank has negotiated with these counterparties an additional annex (CSA Credit Support Annex), including other credit mitigating, such as margins about a certain threshold, early termination (optional or mandatory), coupon adjustment transaction over a certain threshold amount, etc.
Below are detail contracts susceptible to offset:
|
|
Fair Value |
|
Negative Fair |
|
Positive Fair Value |
|
Financial |
|
Net Fair |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Derivative financial assets as of December 31, 2013 |
|
374,688 |
|
(42,315 |
) |
(116,095 |
) |
(31,651 |
) |
184,627 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial assets as of December 31, 2012 |
|
329,497 |
|
(104,142 |
) |
(43,099 |
) |
(42,635 |
) |
139,621 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
40. Maturity of Assets and Liabilities:
The table below shows details of loans and other financial assets and liabilities grouped in accordance with their remaining maturity, including accrued interest as of December 31, 2013 and 2012, respectively. Trading and available for sale instruments are included at their fair value:
|
|
2013 |
| ||||||||||||
|
|
Up to 1 month |
|
Over 1 month |
|
Over 3 month |
|
Over 1 year and |
|
Over 3 year |
|
Over 5 years |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
873,308 |
|
|
|
|
|
|
|
|
|
|
|
873,308 |
|
Transactions in the course of collection |
|
374,471 |
|
|
|
|
|
|
|
|
|
|
|
374,471 |
|
Financial Assets held-for-trading |
|
393,134 |
|
|
|
|
|
|
|
|
|
|
|
393,134 |
|
Receivables from repurchase agreements and security borrowing |
|
58,429 |
|
12,250 |
|
11,743 |
|
|
|
|
|
|
|
82,422 |
|
Derivative instruments |
|
15,374 |
|
21,074 |
|
53,595 |
|
94,914 |
|
86,438 |
|
103,293 |
|
374,688 |
|
Loans and advances to banks (*) |
|
791,112 |
|
116,968 |
|
155,268 |
|
|
|
|
|
|
|
1,063,348 |
|
Loans to customers (*) |
|
2,962,896 |
|
1,988,697 |
|
4,014,131 |
|
4,543,507 |
|
2,252,631 |
|
5,107,649 |
|
20,869,511 |
|
Financial assets available-for-sale |
|
116,319 |
|
63,919 |
|
184,940 |
|
442,170 |
|
466,247 |
|
400,109 |
|
1,673,704 |
|
Financial assets held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
5,585,043 |
|
2,202,908 |
|
4,419,677 |
|
5,080,591 |
|
2,805,316 |
|
5,611,051 |
|
25,704,586 |
|
|
|
2012 |
| ||||||||||||
|
|
Up to 1 month |
|
Over 1 month |
|
Over 3 month |
|
Over 1 year and |
|
Over 3 year |
|
Over 5 years |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
684,925 |
|
|
|
|
|
|
|
|
|
|
|
684,925 |
|
Transactions in the course of collection |
|
396,611 |
|
|
|
|
|
|
|
|
|
|
|
396,611 |
|
Financial Assets held-for-trading |
|
192,724 |
|
|
|
|
|
|
|
|
|
|
|
192,724 |
|
Receivables from repurchase agreements and security borrowing |
|
8,338 |
|
855 |
|
25,907 |
|
|
|
|
|
|
|
35,100 |
|
Derivative instruments |
|
19,155 |
|
26,190 |
|
85,576 |
|
93,733 |
|
40,801 |
|
64,042 |
|
329,497 |
|
Loans and advances to banks (*) |
|
1,152,642 |
|
14,409 |
|
177,230 |
|
|
|
|
|
|
|
1,344,281 |
|
Loans to customers (*) |
|
2,676,443 |
|
1,863,499 |
|
3,512,461 |
|
4,110,399 |
|
1,945,584 |
|
4,653,379 |
|
18,761,765 |
|
Financial assets available-for-sale |
|
272,371 |
|
171,017 |
|
343,665 |
|
152,075 |
|
132,382 |
|
192,930 |
|
1,264,440 |
|
Financial assets held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
5,403,209 |
|
2,075,970 |
|
4,144,839 |
|
4,356,207 |
|
2,118,767 |
|
4,910,351 |
|
23,009,343 |
|
(*) The respective provisions, which amount to MCh$480,748 (MCh$427,435 in 2012) for loans to customers and MCh$1,292 (MCh$959 in 2012) for borrowings from financial institutions, have not been deducted from these balance.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
40. Maturity of Assets and Liabilities, continued:
|
|
2013 |
| ||||||||||||
|
|
Up to 1 month |
|
Over 1 month |
|
Over 3 month |
|
Over 1 year and |
|
Over 3 year |
|
Over 5 years |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accounts and other demand deposits |
|
5,984,332 |
|
|
|
|
|
|
|
|
|
|
|
5,984,332 |
|
Transactions in the course of payment |
|
126,343 |
|
|
|
|
|
|
|
|
|
|
|
126,343 |
|
Payables from repurchase agreements and security lending |
|
249,549 |
|
7,217 |
|
|
|
|
|
|
|
|
|
256,766 |
|
Savings accounts and time deposits (**) |
|
4,875,437 |
|
2,193,563 |
|
2,948,201 |
|
207,347 |
|
135 |
|
31 |
|
10,224,714 |
|
Derivative instruments |
|
26,750 |
|
37,008 |
|
95,582 |
|
96,757 |
|
67,742 |
|
121,293 |
|
445,132 |
|
Borrowings from financial institutions |
|
99,553 |
|
359,752 |
|
262,574 |
|
267,586 |
|
|
|
|
|
989,465 |
|
Debt issued: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage bonds |
|
4,554 |
|
4,966 |
|
13,534 |
|
27,826 |
|
16,095 |
|
19,516 |
|
86,491 |
|
Bonds |
|
287,732 |
|
117,008 |
|
47,271 |
|
471,230 |
|
797,585 |
|
1,812,636 |
|
3,533,462 |
|
Subordinate bonds |
|
1,560 |
|
2,476 |
|
34,865 |
|
162,382 |
|
47,890 |
|
497,834 |
|
747,007 |
|
Other financial obligations |
|
161,053 |
|
901 |
|
4,948 |
|
8,736 |
|
13,503 |
|
21,785 |
|
210,926 |
|
Total liabilities |
|
11,816,863 |
|
2,722,891 |
|
3,406,975 |
|
1,241,864 |
|
942,950 |
|
2,473,095 |
|
22,604,638 |
|
|
|
2012 |
| ||||||||||||
|
|
Up to 1 month |
|
Over 1 month |
|
Over 3 month |
|
Over 1 year and |
|
Over 3 year |
|
Over 5 years |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accounts and other demand deposits |
|
5,470,971 |
|
|
|
|
|
|
|
|
|
|
|
5,470,971 |
|
Transactions in the course of payment |
|
159,218 |
|
|
|
|
|
|
|
|
|
|
|
159,218 |
|
Payables from repurchase agreements and security lending |
|
224,793 |
|
1,603 |
|
|
|
|
|
|
|
|
|
226,396 |
|
Savings accounts and time deposits (**) |
|
3,832,539 |
|
2,356,386 |
|
2,846,609 |
|
397,643 |
|
279 |
|
30 |
|
9,433,486 |
|
Derivative instruments |
|
27,981 |
|
30,469 |
|
60,284 |
|
116,048 |
|
48,616 |
|
96,924 |
|
380,322 |
|
Borrowings from financial institutions |
|
181,972 |
|
153,702 |
|
631,051 |
|
141,956 |
|
|
|
|
|
1,108,681 |
|
Debt issued: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage bonds |
|
5,351 |
|
5,853 |
|
15,859 |
|
35,502 |
|
21,843 |
|
30,788 |
|
115,196 |
|
Bonds |
|
47,119 |
|
133,570 |
|
56,633 |
|
456,334 |
|
358,097 |
|
1,360,480 |
|
2,412,233 |
|
Subordinate bonds |
|
1,164 |
|
2,276 |
|
34,731 |
|
48,378 |
|
151,612 |
|
508,343 |
|
746,504 |
|
Other financial obligations |
|
106,972 |
|
1,005 |
|
5,140 |
|
10,534 |
|
7,201 |
|
31,271 |
|
162,123 |
|
Total liabilities |
|
10,058,080 |
|
2,684,864 |
|
3,650,307 |
|
1,206,395 |
|
587,648 |
|
2,027,836 |
|
20,215,130 |
|
(***) Excluding term saving accounts, which amount to MCh$178,011 (MCh$179,464 in 2012).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(1) Introduction
The Banks risk management is based on specialization, knowledge of the business and the experience of its teams, with professionals specifically dedicated to each different type of risks. Our policy is to maintain an integrated, forward looking approach to risk management, taking into account the current and forecasted economic environment and the risk/return ratio of all products for both the Bank and its subsidiaries.
Our credit policies and processes acknowledge the particularities of each market and segment, thus affording specialized treatment to each one of them. The integrated information prepared for risk analysis is key to developing our strategic plan, this objectives include: determining the desired risk level for each business line; aligning all strategies with the established risk level; communicating desired risk levels to Banks commercial areas; developing models, processes and tools for evaluating, measuring and controlling risk throughout the different business lines and areas; informing the board of directors about risks and their evolution; proposing action plans to address important deviations in risk indicators and enforcing compliance of applicable standards and regulations.
(a) Risk Management Structure
Credit and Market Risk Management lies at the all levels of the Organization, with a structure that recognizes the relevance of the different risk areas that exist. Current levels are:
(i) Board of Directors
The Board is responsible for the establishment and monitoring of the Banks risk management structure. Due to the above, it is permanently informed regarding the evolution of the different risk areas, participating through its Finance and Financial Risk Committees, Credit Committees, Portfolio Committees and Audit Committee, which check the status of credit and market risks. In addition, it actively participates in each of them, informed of the status of the portfolio and participating in the strategic definitions that impact the quality of the portfolio.
Risk management policies are established in order to identify and analyze the risks faced by the Bank, to set adequate limits and controls and monitor risks and compliance with limits. The policies and risk management systems are regularly reviewed in order for them to reflect changes in market conditions and the Banks activities. It, through its standards and management procedures intends to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(1) Introduction, continued
(a) Risk Management Structure, continued
(ii) Finance, International and Financial Risk Committee
This committee meets monthly to review developments and the current status of financial positions and market, price and liquidity risk. It reviews estimated results from financial positions in order to measure the risk/return ratio of the Banks Treasury business, as well as the evolution of and forecasts regarding use of capital. The knowledge of the current state of the market risks allow to forecast potential future loss, with an important confidence level, in the case of adverse transactions in the main market variables or illiquidity (exchange rate, interest rates and options volatility) or a tight liquidity (either liquidity of trading in financial instruments as funding liquidity).
Additionally, the Committee reviews the estimated financial results that generate these positions separately, in order to measure the risk-return businesses involved in handling financial positions of the Treasury, the evolution of the use of capital, and the estimated credit risk and market that the Bank will face in the future. The Committee also discussed the international financial exposure and liabilities major credit exposures generated by derivatives transactions.
Committee is responsible for the design of policies and procedures related to the establishment of limits and alerts financial positions, as well as measurement, control and reporting of the same. Subsequently, policies and procedures are subject to approval by the Bank Board.
The Finance, International and Financial Risk Committee comprises the Chairman, four Directors, the General Manager, the Manager of Corporate Risk Division, the Manager of the Corporate and Investment Banking Division, the Manager of Financial Control Division, the Manager of Treasury Division and the Manager of Financial Risk Area.
The Committee meets in regular session once a month and may be cited extraordinary request of the President, two Directors or the General Manager.
(iii) Credit Committees
The corporate governance structure of the Bank provides various credit committees responsible for credit decisions related to the different business segments and the type of risk involved. These committees have higher expression in the Credit Committee of the Board, consisting of the General Manager, the Manager of Corporate Risk Division, and at least three directors who review weekly all operations that exceed UF750,000.
Each credit committee is responsible for defining the terms and conditions of acceptance of counterparty risks considered in the evaluation, and are comprised of members with sufficient powers for decision-making. The Corporate Risk Division participates in an independently and autonomic form from commercial areas.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(1) Introduction, continued
(a) Risk Management Structure, continued
(iv) Portfolio Risk Committee
The main function of Portfolio Risk Committee is to know, from a global perspective, the evolution of the composition of the Banks loan portfolio. This is, according to economic sectors, business segments, products, terms, and everything that would have a broad view of counterparty risk is assumed. This Committee reviews, in detail, the main exposures by economic groups, debtors, and behavioral parameters such as default indicators, past due loans, impairment, charges-off and provisions for loan losses for each segment.
The mission of this Committee is to approve and propose to the Board risk management strategies differentiated. This includes credit policies, the portfolio assessment methodologies and calculation of provisions to cover expected losses. Is responsible also know the sufficiency of provision; authorize extraordinary charge-offs when it exhausted the recoveries instances and management control settlement of assets received in lieu of payments. It also reviews the methodological guidelines for the development of credit risk models, which are assessed on the Technical Committee for the Supervision of internal models.
The Portfolio Risk Committee meets monthly and is composed of the Chairman of the Board, two Directors, the General Manager, the Manager of Corporate Risk Division, the Manager of the Risk Division and the Area Manager Risk Architecture. The Committee may be summoned to an extraordinary request of the President, two Directors or the General Manager.
(v) Treasury
The Banks Treasury Division is responsible for managing price risks (interest rates, exchange rates and options volatility) for its Trading and Accrual Portfolios, based on limits approved by the Board of Directors. In addition, it is the sole body responsible for ensuring that the Bank maintains adequate liquidity levels in line with market conditions and the needs of its different business units.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(1) Introduction, continued
(a) Risk Management Structure, continued
(vi) Corporate Risk Division
Banco de Chile has a team with a vast experience and knowledge in each matter related to risks associated with credit, market, operational and technology, which ensures comprehensive and consolidated management of the same, including the Bank and its subsidiaries, identifying and evaluating the risks generated in customers, in their own operations and their suppliers. The focus is on the future, finding determine with different techniques and tools, the potential changes that could affect the solvency, liquidity, the correct operation or the reputation of Banco of Chile.
Regarding the management of Credit Risk, Corporate Risk Division oversees the quality of the portfolio and optimizing the risk - return to all segments of people and companies managing the stages of approval, monitoring and recovery of loans granted.
(vii) Operational Risk Committee
The mission of Operational Risk Committee is to identify, prioritize and set strategies to mitigate key operational risk events, ensure the implementation of the management model, establish tolerances risk, ensure compliance programs, policies and procedures relating to Privacy and Information Security, Business Continuity and Operational Risk Banco de Chile.
Monthly Senior Management Committee, becoming the governing body for the Operational Risk Management and Technology. Risk management also involves the Directors of the Bank through quarterly presentations to Directors and Audit Committee on these matters.
The Operational Risk Committee is composed of the General Manager, Division Manager Corporate Risk, Manager of Financial Control Division, Manager of Operations and Technology Division, Manager of Commercial Banking Area and Manager of Operational Risk and Technology.
(b) Internal Audit
Risk management processes throughout the Bank are continually audited by the Internal Audit Area, which analyzes the sufficiency of and compliance with risk management procedures, Internal Audit discusses the results of all evaluations with management and reports its findings and recommendations to the Board of Directors.
(c) Measurement Methodology
In terms of Credit Risk, provision levels and portfolio expenses are the basic measurements used to determine the credit quality of our portfolio.
Risk monitoring and control are performed primarily based on established limits. These limits reflect the Banks business and market strategy as well as the risk level it is willing to accept, with added emphasis on selected industry sectors.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(1) Introduction, continued
(c) Measurement Methodology, continued
The Banks Chief Executive Officer, on a daily basis, and the Finance, International and Market Risk Committee, on a monthly basis, receive a report detailing the evolution of the Banks price and liquidity risk, based on both internal and regulator-imposed metrics.
Each year, the Board of Directors is presented with the results of a sufficiency test for allowances for loan loss. This test shows whether the Banks existing level of allowances for loan loss, both for the individual and group portfolios, is sufficient, based on historic losses or impairment experienced by the portfolio. The Board of Directors must issue a formal opinion on its sufficiency.
(2) Credit Risk
Credit risk is the risk that we will incur a loss because a customer or counterparty do not comply with their contractual obligations, mainly its origin is in account receivable and financial investments.
This risk is managed using a global, unified and forward-looking strategy, which recognizes the current and projected economic environment of the markets and segments in which our different businesses are developing and grants appropriate credit treatment to each such market or segment by using risk limits that we are willing to accept from counterparties.
Managing credit risk is, therefore, inherent to our business and must be incorporated into each segment in which we do business: In this way, we may achieve an optimum balance between assumed risks and attained returns and properly allocate capital to each business line while complying with regulations and criteria defined by the Board of Directors, in order to ensure that the Bank has an appropriate capital base for potential losses that may arise from its credit exposure.
Counterparty limits are established by analyzing financial information, risk ratings, the nature of the exposure, documentation, guarantees, market conditions and the pertinent industry sector, among other factors. The process of monitoring credit quality also includes identifying in advance any possible changes in counterpartys payment capacity, which enables us to evaluate the potential loss from these risks and take corrective actions.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(2) Credit Risk, continued
(a) Approval Process
Examination and approval of Bank loans operating under a differentiated approach, because there are different nature of the segments, which it characterizes by different basics in its variables of explanation of its financial structure and repayment ability. The areas involved in each approval process are:
· Politics and procedures
· Specialization and experience level of participant of the process
· Types and depth of technological platforms required
· Type of model/indicators predictives for each segments (Scoring or Rating)
According to the mentioned above there are three areas relevant to the admissions process:
Minimum credit profile (scoring)
Borrowing Limits (exposure)
Target Market
The credit profile is evaluated using statistics models of Credit Scoring, which are different for Commercial Area and Credichile, and also are segmented and specifics for different types of clients.
The predictive ability of the models is fundamental to do successful risk management during different economics cycles, which force to be permanently reviewed actual market conditions.
For ensure high standards in quality of information of customers, Risk area consolidates an important volume of input data to our clients system and also it has permanent process of revision or audits to verify the correct application of process of credit.
Definition of target market is an elemental dimension to guide the commercial efforts and business strategies. Offer of products more efficient allow to maximize the individual exposition and expected returns.
Parametric Model:
The SME segment is a segment that has developed assessment schemes and ad hoc admission to their characteristics. This segment has defined a parametric model that is responsible for mass segment features a segment as well as case by case analysis. This model considers the evaluation of customers based on three pillars. These are payment behavior both, internal and external, financial reporting analysis and evaluation of the clients business. This process yields a parametric evaluation category that summarizes the credit quality of the customer through a rating, which is linked directly to the powers of credit required for each operation.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(2) Credit Risk, continued
(a) Approval Process, continued
Parametric Model, continued:
Casuistry of cases occur in which lower level of information available and/or economic sector, do not have a rating, in such cases being managed directly by the Risk area, which makes the credit assessment criteria applying their expert. Note that internal audits are performed on an ongoing basis to ensure the quality of the information used in the preparation of Rating.
Additionally, the Corporate Risk Division supports business significantly through the process of pre-approval of loans to customers, for optimize the relation risk-return of these segments. Thus, both the retail market and in the small and medium enterprises has specialized units that generate credit offers, according to predefined strategies for the different group of clients, according to statistic models which it is calibrating based in evolution of macroeconomics variables and behavior that group of clients have in the time. These offers of credits and operations approval are supported by the constitution of collateral.
Case to case model:
This type of analysis applies to wholesale market, corporations and real-state. Consist in individual assessment expert, which provides the level of risk, terms, transaction amount and complexity and perspective of the business, among other variables. This approval process is also supported by a rating model which gives a more uniform assessment and determines the level of credit. In this sense there are a process and consolidated team with high level of experience and expertise in approving appropriations for the various segments and sectors in which the Bank participates, with a perspective of medium and long term respect different industries and clients. Additionally, to make more effective the admission process, improving quality of assessment and optimizing times of responses to clients, the process of data collection, analysis and discussion of the proposed credit are supported by the areas of credit risk.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(2) Credit Risk, continued
(b) Control and Follow up
(b.i) Corporations
In the wholesale business segment, control and follow-up are realized through a combination of reviews. The most relevant are the following:
· Delinquencies management, supported by the information of predictive indicators of risk level, with follow up and action plans in the case of more important clients, also manage of different strategies of early collection.
· Structured controls of clients with credit covenants
· Quick review of the portfolio, determining clients potentially affected by a price change of any macroeconomic variable in specific sector or segment.
· Systematic follow up of variables of credit behavior and financial figures of the corporations, as well as particular conditions and restrictions of credits.
· Management portfolio classification, which determines risk and required rate of provision, according to general rules established by the Superintendency of Banks and Financial Institutions and specific criteria set out in the Bank, allowing correct application over special clients.
· Management portfolio in special follow up (Vigilance), through committee periodic and permanent monitoring, allowing establish action plans for entities that presents risk alerts.
(b.ii) Individuals
In individual markets, control and follow up focus in the permanent monitoring of principal indicator of aggregate portfolio and by litter analysis; this is revision of evolution portfolio in a determinate date. Principal index are:
· Follow up of the expected loss of portfolio through of general model of provision and back-test of loss for portfolio that have maturity required.
· Litter analysis of new clients and respective decomposition of loss rate by products, campaigns champion/challenger, segments, etc
· Delinquencies general of portfolio with special follow up of products, segments, income brackets, branches, zones, campaigns, etc., oriented to early detection of risk sources higher than expected in the portfolio, to regularization of cases and to integral management of politics of credits and campaigns of pre-approval.
· Rate of approval and rejection for request presented in first instance and through appeal, with details of information by different explicative attributes.
· Follow up of mortgage portfolio according to variables of politics, tranches (loan to value), terms, relation dividend/income clients, segments, income brackets, etc.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(2) Credit Risk, continued
(b) Control and Follow up, continued
(b.ii) Individuals, continued
Strategies of Risk Segmentation for processes and collection policies, which are compatibles with services quality and maximization of recovery, in different delinquencies stages of customer. Also models are structured to collect useful information to achieve better integration with granting and monitoring processes, aligned by a same vision about fundamentals of credit of customer.
(c) Derivative Instruments
The value of derivative financial instruments is always reflected in the Banks balance sheet. The risks derived from these instruments, determined using SBIF models, are controlled against lines of credit of the counterparty at the inception of each transaction.
(d) Portfolio Concentration
Maximum credit risk exposure per counterparty without considering collateral or other credit enhancements as of December 31, 2013 and 2012 does not exceed 10% of the Banks effective equity.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(2) Credit Risk, continued
The following tables show credit risk exposure per balance sheet item, including derivatives, detailed by both geographic region and industry sector as of December 31, 2013:
|
|
Chile |
|
United States |
|
Brazil |
|
Other |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Due from Banks |
|
582,022 |
|
268,217 |
|
|
|
23,069 |
|
873,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets held-for-trading from the Chilean Government and Central Bank of Chile |
|
64,937 |
|
|
|
|
|
|
|
64,937 |
|
Other instruments issued in Chile |
|
261,984 |
|
|
|
|
|
|
|
261,984 |
|
Instruments issued abroad |
|
|
|
|
|
|
|
|
|
|
|
Mutual fund investments |
|
66,213 |
|
|
|
|
|
|
|
66,213 |
|
Subtotal |
|
393,134 |
|
|
|
|
|
|
|
393,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables from repurchase agreements and security borrowing |
|
82,422 |
|
|
|
|
|
|
|
82,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Contracts for Trading Purposes |
|
|
|
|
|
|
|
|
|
|
|
Forwards |
|
28,701 |
|
1,833 |
|
|
|
11,139 |
|
41,673 |
|
Swaps |
|
158,810 |
|
88,495 |
|
|
|
44,124 |
|
291,429 |
|
Call Options |
|
2,241 |
|
|
|
|
|
60 |
|
2,301 |
|
Put Options |
|
525 |
|
|
|
|
|
75 |
|
600 |
|
Futures |
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
190,277 |
|
90,328 |
|
|
|
55,398 |
|
336,003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge Derivative Contracts |
|
|
|
|
|
|
|
|
|
|
|
Forwards |
|
|
|
|
|
|
|
|
|
|
|
Swaps |
|
2,993 |
|
3,971 |
|
|
|
31,721 |
|
38,685 |
|
Call Options |
|
|
|
|
|
|
|
|
|
|
|
Put Options |
|
|
|
|
|
|
|
|
|
|
|
Futures |
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
2,993 |
|
3,971 |
|
|
|
31,721 |
|
38,685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to Banks |
|
|
|
|
|
|
|
|
|
|
|
Central Bank of Chile |
|
600,581 |
|
|
|
|
|
|
|
600,581 |
|
Domestic banks |
|
100,012 |
|
|
|
|
|
|
|
100,012 |
|
Foreign banks |
|
|
|
|
|
254,977 |
|
107,778 |
|
362,755 |
|
Subtotal |
|
700,593 |
|
|
|
254,977 |
|
107,778 |
|
1,063,348 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans to Customers, Net |
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
12,574,539 |
|
51,268 |
|
270,480 |
|
180,221 |
|
13,076,508 |
|
Residential mortgage loans |
|
4,732,307 |
|
|
|
|
|
|
|
4,732,307 |
|
Consumer loans |
|
3,060,696 |
|
|
|
|
|
|
|
3,060,696 |
|
Subtotal |
|
20,367,542 |
|
51,268 |
|
270,480 |
|
180,221 |
|
20,869,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets Available-for-Sale |
|
|
|
|
|
|
|
|
|
|
|
from the Chilean Government and Central Bank of Chile |
|
586,408 |
|
|
|
|
|
|
|
586,408 |
|
Other instruments issued in Chile |
|
1,011,074 |
|
|
|
|
|
|
|
1,011,074 |
|
Instruments issued abroad |
|
|
|
71,533 |
|
4,689 |
|
|
|
76,222 |
|
Subtotal |
|
1,597,482 |
|
71,533 |
|
4,689 |
|
|
|
1,673,704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held-to-Maturity |
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(2) Credit Risk, continued
|
|
Financial |
|
Chilean Central |
|
Government |
|
Retail |
|
Trade |
|
Manufacturing |
|
Mining |
|
Electricity, Gas and |
|
Agriculture and |
|
Forestry |
|
Fishing |
|
Transportation |
|
Construction |
|
Services |
|
Other |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Due from Banks |
|
801,521 |
|
71,787 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
873,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets held-for-trading from the Chilean Government and Central Bank of Chile |
|
|
|
37,402 |
|
27,535 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,937 |
|
Other instruments issued in Chile |
|
257,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,461 |
|
261,984 |
|
Instruments issued abroad |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual fund investments |
|
66,213 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,213 |
|
Subtotal |
|
323,736 |
|
37,402 |
|
27,535 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,461 |
|
393,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables from repurchase agreements and security borrowing |
|
82,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
82,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Contracts for Trading Purposes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forwards |
|
34,384 |
|
|
|
|
|
13 |
|
1,024 |
|
2,885 |
|
1,050 |
|
25 |
|
694 |
|
|
|
546 |
|
450 |
|
11 |
|
105 |
|
486 |
|
41,673 |
|
Swaps |
|
233,083 |
|
|
|
|
|
|
|
7,470 |
|
6,613 |
|
249 |
|
11,660 |
|
26,420 |
|
|
|
182 |
|
2,353 |
|
2,050 |
|
1,224 |
|
125 |
|
291,429 |
|
Call Options |
|
446 |
|
|
|
|
|
|
|
647 |
|
1,017 |
|
|
|
|
|
48 |
|
|
|
|
|
60 |
|
8 |
|
75 |
|
|
|
2,301 |
|
Put Options |
|
322 |
|
|
|
|
|
|
|
231 |
|
42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
1 |
|
600 |
|
Futures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
268,235 |
|
|
|
|
|
13 |
|
9,372 |
|
10,557 |
|
1,299 |
|
11,685 |
|
27,162 |
|
|
|
728 |
|
2,863 |
|
2,073 |
|
1,404 |
|
612 |
|
336,003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge Derivative Contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forwards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swaps |
|
38,685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,685 |
|
Call Options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Put Options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
38,685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to Banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Bank of Chile |
|
|
|
600,581 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600,581 |
|
Domestic banks |
|
100,012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,012 |
|
Foreign banks |
|
362,755 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
362,755 |
|
Subtotal |
|
462,767 |
|
600,581 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,063,348 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans to Customers, Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans (*) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans |
|
9,393 |
|
|
|
|
|
3,976,564 |
|
90,981 |
|
18,879 |
|
3,221 |
|
|
|
28,928 |
|
|
|
1,777 |
|
26,801 |
|
19,539 |
|
148,419 |
|
407,805 |
|
4,732,307 |
|
Consumer loans |
|
4,033 |
|
|
|
|
|
2,772,544 |
|
41,052 |
|
9,537 |
|
1,683 |
|
18 |
|
34,650 |
|
|
|
823 |
|
16,920 |
|
10,320 |
|
51,633 |
|
117,483 |
|
3,060,696 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets Available-for-Sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from the Chilean Government and Central Bank of Chile |
|
|
|
383,451 |
|
202,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
586,408 |
|
Other instruments issued in Chile |
|
847,941 |
|
|
|
|
|
|
|
15,826 |
|
|
|
13,750 |
|
36,861 |
|
49 |
|
72,804 |
|
|
|
|
|
1,671 |
|
|
|
22,172 |
|
1,011,074 |
|
Instruments issued abroad |
|
76,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76,222 |
|
Subtotal |
|
924,163 |
|
383,451 |
|
202,957 |
|
|
|
15,826 |
|
|
|
13,750 |
|
36,861 |
|
49 |
|
72,804 |
|
|
|
|
|
1,671 |
|
|
|
22,172 |
|
1,673,704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held-to-Maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) See commercial loans by industry sector in Note 12 (d).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(2) Credit Risk, continued
The following tables show credit risk exposure per balance sheet item, including derivatives, detailed by both geographic region and industry sector as of December 31, 2012:
|
|
Chile |
|
United States |
|
Brazil |
|
Other |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Due from Banks |
|
499,473 |
|
167,186 |
|
|
|
18,266 |
|
684,925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets held-for-trading |
|
|
|
|
|
|
|
|
|
|
|
from the Chilean Government and Central Bank of Chile |
|
72,379 |
|
|
|
|
|
|
|
72,379 |
|
Other instruments issued in Chile |
|
87,303 |
|
|
|
|
|
|
|
87,303 |
|
Instruments issued abroad |
|
|
|
|
|
|
|
|
|
|
|
Mutual fund investments |
|
33,042 |
|
|
|
|
|
|
|
33,042 |
|
Subtotal |
|
192,724 |
|
|
|
|
|
|
|
192,724 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables from repurchase agreements and security borrowing |
|
35,100 |
|
|
|
|
|
|
|
35,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Contracts for Trading Purposes |
|
|
|
|
|
|
|
|
|
|
|
Forwards |
|
57,852 |
|
2,652 |
|
|
|
9,662 |
|
70,166 |
|
Swaps |
|
99,245 |
|
123,676 |
|
|
|
35,575 |
|
258,496 |
|
Call Options |
|
439 |
|
|
|
|
|
33 |
|
472 |
|
Put Options |
|
341 |
|
|
|
|
|
|
|
341 |
|
Futures |
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
157,877 |
|
126,328 |
|
|
|
45,270 |
|
329,475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge Derivative Contracts |
|
|
|
|
|
|
|
|
|
|
|
Forwards |
|
|
|
|
|
|
|
|
|
|
|
Swaps |
|
22 |
|
|
|
|
|
|
|
22 |
|
Call Options |
|
|
|
|
|
|
|
|
|
|
|
Put Options |
|
|
|
|
|
|
|
|
|
|
|
Futures |
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
22 |
|
|
|
|
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to Banks |
|
|
|
|
|
|
|
|
|
|
|
Central bank of Chile |
|
1,100,696 |
|
|
|
|
|
|
|
1,100,696 |
|
Domestic banks |
|
14,309 |
|
|
|
|
|
|
|
14,309 |
|
Foreign banks |
|
|
|
|
|
109,505 |
|
119,771 |
|
229,276 |
|
Subtotal |
|
1,115,005 |
|
|
|
109,505 |
|
119,771 |
|
1,344,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans to Customers, Net |
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
10,845,406 |
|
36,474 |
|
200,016 |
|
649,688 |
|
11,731,584 |
|
Residential mortgage loans |
|
4,198,667 |
|
|
|
|
|
|
|
4,198,667 |
|
Consumer loans |
|
2,831,514 |
|
|
|
|
|
|
|
2,831,514 |
|
Subtotal |
|
17,875,587 |
|
36,474 |
|
200,016 |
|
649,688 |
|
18,761,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets Available-for-Sale |
|
|
|
|
|
|
|
|
|
|
|
from the Chilean Government and Central Bank of Chile |
|
251,784 |
|
|
|
|
|
|
|
251,784 |
|
Other instruments issued in Chile |
|
924,152 |
|
|
|
|
|
|
|
924,152 |
|
Instruments issued abroad |
|
|
|
83,759 |
|
4,745 |
|
|
|
88,504 |
|
Subtotal |
|
1,175,936 |
|
83,759 |
|
4,745 |
|
|
|
1,264,440 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held-to-Maturity |
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(2) Credit Risk, continued
|
|
Financial |
|
Chiean Central |
|
Government |
|
Retail |
|
Trade |
|
Manufacturing |
|
Mining |
|
Electricity, Gas |
|
Agriculture and |
|
Forestry |
|
Fishing |
|
Transportation |
|
Construction |
|
Services |
|
Other |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Due from Banks |
|
617,092 |
|
67,833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
684,925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets held-for-trading |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from the Chilean Government and Central Bank of Chile |
|
|
|
28,653 |
|
43,726 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,379 |
|
Other instruments issued in Chile |
|
87,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
188 |
|
87,303 |
|
Instruments issued abroad |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual fund investments |
|
33,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,042 |
|
Subtotal |
|
120,157 |
|
28,653 |
|
43,726 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
188 |
|
192,724 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables from repurchase agreements and security borrowing |
|
25,979 |
|
|
|
|
|
2,280 |
|
3,212 |
|
|
|
|
|
|
|
160 |
|
|
|
|
|
|
|
1,854 |
|
1,615 |
|
|
|
35,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Contracts for Trading Purposes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forwards |
|
65,113 |
|
|
|
|
|
1 |
|
3,092 |
|
1,084 |
|
53 |
|
75 |
|
321 |
|
|
|
114 |
|
207 |
|
13 |
|
93 |
|
|
|
70,166 |
|
Swaps |
|
232,459 |
|
|
|
|
|
|
|
6,039 |
|
5,447 |
|
725 |
|
4,986 |
|
1,819 |
|
|
|
279 |
|
5,569 |
|
963 |
|
210 |
|
|
|
258,496 |
|
Call Options |
|
354 |
|
|
|
|
|
|
|
92 |
|
26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
472 |
|
Put Options |
|
85 |
|
|
|
|
|
|
|
215 |
|
27 |
|
|
|
|
|
|
|
9 |
|
5 |
|
|
|
|
|
|
|
|
|
341 |
|
Futures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
298,011 |
|
|
|
|
|
1 |
|
9,438 |
|
6,584 |
|
778 |
|
5,061 |
|
2,140 |
|
9 |
|
398 |
|
5,776 |
|
976 |
|
303 |
|
|
|
329,475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge Derivative Contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forwards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swaps |
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22 |
|
Call Options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Put Options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to Banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Bank of Chile |
|
|
|
1,100,696 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,100,696 |
|
Domestic banks |
|
14,309 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,309 |
|
Foreign banks |
|
229,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
229,276 |
|
Subtotal |
|
243,585 |
|
1,100,696 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,344,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans to Customers, Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans (*) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans |
|
6,609 |
|
|
|
|
|
3,503,474 |
|
80,676 |
|
15,970 |
|
2,702 |
|
|
|
27,697 |
|
|
|
1,840 |
|
23,934 |
|
17,322 |
|
105,181 |
|
413,262 |
|
4,198,667 |
|
Consumer loans |
|
3,131 |
|
|
|
|
|
2,557,411 |
|
40,109 |
|
9,400 |
|
1,532 |
|
5 |
|
33,664 |
|
|
|
840 |
|
16,280 |
|
9,870 |
|
38,440 |
|
120,832 |
|
2,831,514 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets Available-for-Sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from the Chilean Government and Central Bank of Chile |
|
|
|
111,538 |
|
140,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
251,784 |
|
Other instruments issued in Chile |
|
801,159 |
|
|
|
|
|
|
|
18,262 |
|
|
|
5,024 |
|
41,309 |
|
|
|
44,303 |
|
|
|
7,640 |
|
|
|
2,164 |
|
4,291 |
|
924,152 |
|
Instruments issued abroad |
|
88,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
88,504 |
|
Subtotal |
|
889,663 |
|
111,538 |
|
140,246 |
|
|
|
18,262 |
|
|
|
5,024 |
|
41,309 |
|
|
|
44,303 |
|
|
|
7,640 |
|
|
|
2,164 |
|
4,291 |
|
1,264,440 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held-to-Maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) See commercial loans by industry sector in Note No.12 (d).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(2) Credit Risk, continued
(e) Collaterals and Other Credit Enhancements
The amount and type of collateral required depends on the counterpartys credit risk assessment.
The Bank has guidelines regarding the acceptability of types of collateral and valuation parameters.
The main types of collateral obtained are:
· For commercial loans: Residential and non-residential real estate, liens and inventory.
· For retail loans: Mortgages on residential property.
The Bank also obtains collateral from parent companies for loans granted to their subsidiaries.
Management makes sure its collateral is acceptable according to both external standards and internal policies guidelines and parameters. The Bank has approximately 192,200 collateral assets, the majority of which consist of real estate.
The Bank also uses mitigating tactics for credit risk on derivative transactions. To date, the following mitigating tactics are used:
· Accelerating transactions and net payment using market values at the date of default of one of the parties.
· Option for both parties to terminate early any transactions with a counterparty at a given date, using market values as of the respective date.
· Margins established with time deposits by customers that close FX forwards with subsidiary Banchile Corredores de Bolsa S.A.
(f) Credit Quality by Asset Class
The Bank determines the credit quality of financial assets using internal credit ratings. The rating process is linked to the Banks approval and monitoring processes and is carried out in accordance with risk categories established by current standards. Credit quality is continuously updated based on any favorable or unfavorable developments to customers or their environments, considering aspects such as commercial and payment behavior as well as financial information.
The Bank also conducts reviews of companies in certain industry sectors that are affected by macroeconomic or sector-specific variables. Such reviews allow the Bank to timely establish any necessary allowance loan losses that are sufficient to cover losses for potentially uncollectable loans.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(2) Credit Risk, continued
(f) Credit Quality by Asset Class, continued:
The following table shows credit quality by asset class for balance sheet items, based on the Banks credit rating system.
As of December 31, 2013:
|
|
Individual Portfolio |
|
Group Portfolio |
|
|
| ||||||
|
|
Normal |
|
Substandard |
|
Non-complying |
|
Normal |
|
Non-complying |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Bank of Chile |
|
600,581 |
|
|
|
|
|
|
|
|
|
600,581 |
|
Domestic banks |
|
100,012 |
|
|
|
|
|
|
|
|
|
100,012 |
|
Foreign banks |
|
362,755 |
|
|
|
|
|
|
|
|
|
362,755 |
|
Subtotal |
|
1,063,348 |
|
|
|
|
|
|
|
|
|
1,063,348 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans to customers (before allowances for loan losses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
10,482,866 |
|
224,446 |
|
152,871 |
|
2,011,162 |
|
205,163 |
|
13,076,508 |
|
Residential mortgage loans |
|
|
|
|
|
|
|
4,662,977 |
|
69,330 |
|
4,732,307 |
|
Consumer loans |
|
|
|
|
|
|
|
2,856,365 |
|
204,331 |
|
3,060,696 |
|
Subtotal |
|
10,482,866 |
|
224,446 |
|
152,871 |
|
9,530,504 |
|
478,824 |
|
20,869,511 |
|
As of December 31, 2012:
|
|
Individual Portfolio |
|
Group Portfolio |
|
|
| ||||||
|
|
Normal |
|
Substandard |
|
Non-complying |
|
Normal |
|
Non-complying |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Bank of Chile |
|
1,100,696 |
|
|
|
|
|
|
|
|
|
1,100,696 |
|
Domestic banks |
|
14,309 |
|
|
|
|
|
|
|
|
|
14,309 |
|
Foreign banks |
|
229,276 |
|
|
|
|
|
|
|
|
|
229,276 |
|
Subtotal |
|
1,344,281 |
|
|
|
|
|
|
|
|
|
1,344,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans to customers (before allowances for loan losses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
9,331,408 |
|
204,369 |
|
145,022 |
|
1,864,797 |
|
185,988 |
|
11,731,584 |
|
Residential mortgage loans |
|
|
|
|
|
|
|
4,149,264 |
|
49,403 |
|
4,198,667 |
|
Consumer loans |
|
|
|
|
|
|
|
2,651,351 |
|
180,163 |
|
2,831,514 |
|
Subtotal |
|
9,331,408 |
|
204,369 |
|
145,022 |
|
8,665,412 |
|
415,554 |
|
18,761,765 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(2) Credit Risk, continued
(f) Credit Quality by Asset Class, continued:
Analysis of age of portfolio loan, over-due loans by financial asset class:
Terms:
Default 1: 1 to 29 days
Default 2: 30 to 59 days
Default 3: 60 to 89 days
As of December 31, 2013:
|
|
Default 1 |
|
Default 2 |
|
Default 3 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to banks |
|
1,515 |
|
|
|
|
|
1,515 |
|
Commercial loans |
|
23,699 |
|
8,281 |
|
4,737 |
|
36,717 |
|
Import-export financing |
|
34,906 |
|
230 |
|
368 |
|
35,504 |
|
Factoring transactions |
|
30,158 |
|
5,754 |
|
1,606 |
|
37,518 |
|
Commercial lease transactions |
|
2,660 |
|
970 |
|
723 |
|
4,353 |
|
Other loans and receivables |
|
837 |
|
808 |
|
533 |
|
2,178 |
|
Residential mortgage loans |
|
1,016 |
|
642 |
|
428 |
|
2,086 |
|
Consumer loans |
|
19,539 |
|
8,148 |
|
7,564 |
|
35,251 |
|
Total |
|
114,330 |
|
24,833 |
|
15,959 |
|
155,122 |
|
As of December 31, 2012:
|
|
Default 1 |
|
Default 2 |
|
Default 3 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to banks |
|
52 |
|
|
|
|
|
52 |
|
Commercial loans |
|
23,049 |
|
20,677 |
|
3,774 |
|
47,500 |
|
Import-export financing |
|
22,717 |
|
102 |
|
193 |
|
23,012 |
|
Factoring transactions |
|
38,976 |
|
6,289 |
|
1,061 |
|
46,326 |
|
Commercial lease transactions |
|
2,551 |
|
750 |
|
366 |
|
3,667 |
|
Other loans and receivables |
|
1,269 |
|
1,050 |
|
920 |
|
3,239 |
|
Residential mortgage loans |
|
1,111 |
|
647 |
|
457 |
|
2,215 |
|
Consumer loans |
|
16,010 |
|
6,775 |
|
6,873 |
|
29,658 |
|
Total |
|
105,735 |
|
36,290 |
|
13,644 |
|
155,669 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(2) Credit Risk, continued
(f) Credit Quality by Asset Class, continued:
The value of collateral maintained by the Bank for loans individually classified as impaired as of December 31, 2013 and 2012 is MCh$91,105 and MCh$29,952 respectively.
The value of collateral maintained by the Bank for loans over-due but non-impaired as of December 31, 2013 and 2012 is MCh$249,058 and MCh$214,093 respectively.
(g) Assets Received in Lieu of Payment
The Bank has received assets in lieu of payment totaling MCh$3,012 and MCh$2,556 as of December 31, 2013 and 2012, respectively, the majority of which are properties. All of these assets are managed for sale.
(h) Renegotiated Assets
The impaired loans are considered to be renegotiated when the corresponding financial commitments are restructured and the Bank assesses the probability of recovery as sufficiently high.
The following table details the book value of loans with renegotiated terms per financial asset class:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to banks |
|
|
|
|
|
Central Bank of Chile |
|
|
|
|
|
Domestic banks |
|
|
|
|
|
Foreign banks |
|
|
|
|
|
Subtotal |
|
|
|
|
|
|
|
|
|
|
|
Loans to customers, net |
|
|
|
|
|
Commercial loans (*) |
|
163,827 |
|
149,323 |
|
Residential mortgage loans |
|
21,411 |
|
23,132 |
|
Consumer loans |
|
311,363 |
|
220,451 |
|
Subtotal |
|
496,601 |
|
392,906 |
|
Total renegotiated financial assets |
|
496,601 |
|
392,906 |
|
(*)Model of calculate of commercial portfolio was modified, incorporating case to case, debtors evaluated in groups, and maintained the model for debtors evaluated individually.
The Bank evaluates allowances loan losses in two segments: individually assessed allowances loan losses and group assessed allowances loan losses, which are described in more detail in Note No. 2(m).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(3) Market Risk
Market Risk is referred as to the potential loss the Bank may incur due to the scarcity of liquidity or due to an adverse change of market factors levels (such as FX rates, equity prices, interest rates, options volatility, etc).
(a) Liquidity Risk:
Liquidity Risk Measurement and Limits
The Bank measure and control the Trading Liquidity risk for trading portfolios by establishing: DV01 limits to certain specific tenors for each yield curve, limits to spot positions for FX or Equity portfolios and vega limits to FX options portfolios. Trading Liquidity for debt instruments that are part of the Accrual Book is not limited explicitly, taking into account that in this case the positions are expected to be held until medium term or even until maturity.
Funding Liquidity is controlled and limited using the regulatory C08 Index report.
The SBIF sets the following limits for the C08 index:
Foreign Currency balance sheet: |
1-30 days C08 index < 1x Tier 1 Capital |
All Currencies balance sheet: |
1-30 days C08 index < 1x Tier 1 Capital |
All Currencies balance sheet: |
1-90 days C08 index < 2x Tier 1 Capital |
The SBIF authorized Banco de Chile to utilize the C08 Adjusted Index report, which includes in addition to the regular report, behavioral maturity assumptions for some specific balance sheet items, such as roll-over or evergreen pattern for some portion of the loan portfolio; some portion of the demand deposits are considered core and therefore no withdrawal is reported, etc.
As of December 31, 2011, the 1-30 days Adjusted C08 Index for the foreign currency balance sheet items was slightly lower than 0.13. The 1-30 days Adjusted C08 Index for all currencies balance sheet items on that date is reported as 0.31; the value of the same index for the period 1 to 90 days is 0.39.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(3) Market Risk, continued:
(a) Liquidity Risk, continued
The maturity profile of the consolidated financial liabilities of Banco de Chile and its subsidiaries, as of 2013 and 2012 end-of-year, is detailed below:
|
|
Up to 1 |
|
Between |
|
Between 3 |
|
Between |
|
Between |
|
More |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Liabilities as of December 31, 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accounts and other demand deposits |
|
5,984,332 |
|
|
|
|
|
|
|
|
|
|
|
5,984,332 |
|
Transactions in the course of payment |
|
126,343 |
|
|
|
|
|
|
|
|
|
|
|
126,343 |
|
Accounts Payable from repurchase agreements and security lending |
|
259,688 |
|
|
|
|
|
|
|
|
|
|
|
259,688 |
|
Savings accounts and time deposits |
|
5,009,358 |
|
2,351,121 |
|
3,005,112 |
|
213,203 |
|
145 |
|
31 |
|
10,578,970 |
|
Derivative instruments |
|
301,981 |
|
159,374 |
|
293,688 |
|
236,384 |
|
244,998 |
|
377,838 |
|
1,614,263 |
|
Borrowings from financial institutions |
|
95,776 |
|
361,825 |
|
262,142 |
|
|
|
|
|
|
|
719,743 |
|
Other financial obligations |
|
267,881 |
|
144,898 |
|
259,689 |
|
826,803 |
|
803,737 |
|
2,500,987 |
|
4,803,995 |
|
Debt issued in foreign currency different USD |
|
437 |
|
770 |
|
70,215 |
|
204,925 |
|
248,714 |
|
345,363 |
|
870,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total undiscounted financial liabilities (excluding derivatives with offsetting agreements) |
|
12,045,796 |
|
3,017,988 |
|
3,890,846 |
|
1,481,315 |
|
1,297,594 |
|
3,224,219 |
|
24,957,758 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives with offsetting agreements |
|
45,775 |
|
188,282 |
|
513,583 |
|
688,081 |
|
519,512 |
|
899,830 |
|
2,855,063 |
|
|
|
Up to 1 |
|
Between |
|
Between 3 |
|
Between |
|
Between |
|
More |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Liabilities as of December 31, 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accounts and other demand deposits |
|
5,470,971 |
|
|
|
|
|
|
|
|
|
|
|
5,470,971 |
|
Transactions in the course of payment |
|
159,218 |
|
|
|
|
|
|
|
|
|
|
|
159,218 |
|
Accounts Payable from repurchase agreements and security lending |
|
226,396 |
|
|
|
|
|
|
|
|
|
|
|
226,396 |
|
Savings accounts and time deposits |
|
4,271,345 |
|
2,508,688 |
|
2,814,055 |
|
393,247 |
|
279 |
|
30 |
|
9,987,644 |
|
Derivative instruments |
|
231,117 |
|
134,729 |
|
321,148 |
|
244,826 |
|
132,688 |
|
236,071 |
|
1,300,579 |
|
Borrowings from financial institutions |
|
135,353 |
|
176,467 |
|
630,745 |
|
141,444 |
|
|
|
|
|
1,084,009 |
|
Other financial obligations |
|
875,866 |
|
606,008 |
|
499,644 |
|
832,427 |
|
691,489 |
|
2,267,548 |
|
5,772,982 |
|
Debt issued in foreign currency different USD |
|
234 |
|
469 |
|
6,075 |
|
65,891 |
|
21,564 |
|
110,414 |
|
204,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total undiscounted financial liabilities (excluding derivatives with offsetting agreements) |
|
11,370,500 |
|
3,426,361 |
|
4,271,667 |
|
1,677,835 |
|
846,020 |
|
2,614,063 |
|
24,206,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives with offsetting agreements |
|
154,600 |
|
79,406 |
|
256,717 |
|
425,612 |
|
229,070 |
|
434,677 |
|
1,580,082 |
|
The evolution of the loan-to-deposit ratio for 2013 and 2012 is detailed below:
Loans-to-Deposit Ratio
|
|
December 31, |
|
December 31, |
|
Maximum |
|
2.47 |
|
2.35 |
|
Minimum |
|
2.28 |
|
2.20 |
|
Average |
|
2.38 |
|
2.31 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(3) Market Risk, continued
(a) Liquidity Risk, continued:
Banco de Chile has established internal liquidity metrics, in addition to those required by the regulatory entities, with the objective of covering other dimensions of liquidity risk, such as large funds providers diversification; maturity concentration triggers; etc. These and other financial ratios are monthly monitored in order to early detect structural changes of the balance sheet profile. Additionally, the bank is closely monitoring market triggers, such as interest rates levels, intervention of the markets made by the Central Bank, the 5-year Chile CDS spread, etc. These allow the bank to early prevent systemic crisis due to market conditions.
Additionally, the bank is closely monitoring market triggers, such as interest rates levels, intervention of the FX market by the Central Bank, the 5-year Chile CDS spread, etc. These allow the bank to early prevent systemic crisis due to market conditions.
(b) Price Risk:
Price Risk Measurement and Limits
The Price Risk measurement and management processes are implemented utilizing various internal metrics and reports. These are built for the Trading portfolio and separately for the Bank book (also referred as to the Accrual book). In addition to this, and just on supplementary basis, the bank submits regulatory reports to the corresponding regulatory entities.
The regulatory risk measurement for the Trading portfolio (SBIF C41 report) is made by using standardized methodologies provided by the regulatory entities (Central Bank of Chile and SBIF), which are adopted from BIS 1993 standardized methodologies for the risk measurement of such portfolios. The referred methodologies estimate the potential loss that the Bank may incur considering standardized fluctuations of the market factors (FX rates, interest rates, etc,) relevant market factors that may adversely impact the value of interest rate positions, FX spot positions and vega positions generated by either FX or interest rate options portfolios. The interest rate shifts are provided by the regulatory entity; in addition, very conservative correlation and tenors factors are included in order to include non-parallel yield curve shifts reflecting steepening/flattering behaviors. The impact due to FX open positions is obtained by using huge fluctuations (8% for liquid FX rates and 30% for the illiquid ones). The SBIF does not establish a separate limit for this particular risk but a global one that includes this risk (also called Market Risk Equivalent or ERM) and the Risk Weighted Assets (also called RAAP assets). The sum of ERM and the 10% of the RAAP assets cannot exceed the 100% of the banks Tier2 Capital. In the future, the Operational Risk will be included to the above sum.
Additionally, the Bank has established internal limits for the Trading Book. In fact, there are limits for the FX net open positions (FX delta), for the interest rate sensitivities generated by the derivatives and debt securities portfolios (DV01 or also referred as to rho) and for the FX volatility sensitivity (vega). Limits are established on an aggregate basis but also for some specific repricing tenor points. The use of these limits are monitored, controlled and reported on a daily basis by independent parties to the senior management of the Bank. The internal governance framework also establishes that these limits are approved by the board and must be reviewed at least annually.
The Bank utilizes the parametric VaR (Value-at-Risk or VaR) as the risk measurement tool for the trading portfolio exposures. The model includes 99% confidence level; overnight volatility of market factors fluctuations and correlations between them are obtained from historical closing rates observed the most recent one-year period. This VaR number is escalated by 22 days (a calendar month) for reporting purposes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(3) Market Risk, continued
(b) Price Risk, continued
The regulatory risk measurement for the Bank Book (SBIF C40 report) due to interest rate fluctuations is made by using standardized methodologies provided by the regulatory entities (Central Bank of Chile and SBIF). The report includes models for reporting interest rate gaps and standardized adverse interest rate fluctuations. In addition to this, the regulatory entity has requested from banks to establish internal limits for this regulatory risk measurement. Limits must be established separately for short term and long term portfolios. The short term risk limit must be expressed as a percentage of the NIM and the long term risk limit as a percentage of the Tier-2 Capital. The bank is currently using 25% for both limits. The use of these limits during 2013 is illustrated below:
|
|
Banking Risk Book |
|
Banking Risk Book |
|
Maximum Use |
|
11.4 |
% |
18.1 |
% |
Average Use |
|
9.6 |
% |
17.4 |
% |
Minimum Use |
|
8.1 |
% |
16.8 |
% |
Additionally, the Bank utilizes build-in models for measuring, limiting, controlling and reporting interest rate exposures (IRE) and interest rate risks (also called Earnings at Risk or EaR) for the Accrual Book. The Accrual book includes all balance sheet items (even some items that are excluded by the regulators in the analysis of the Bank Book, such as Capital and Fixed Assets, for example). The internal models consider a more comprehensive and detailed analysis of interest rates fluctuations, exchange rates and inflation than the SBIF C40 report required by regulators.
In addition to the above, the Market Risk Policy of Banco de Chile enforces to perform daily stress tests for trading portfolios and on a monthly basis for accrual portfolios. The output of the stress testing process is compared to corresponding trigger levels: in the case triggers are breached, the senior management is notified in order to implement further actions, if necessary. Moreover, intra-month actual P&L for trading activities is compared to some trigger levels: escalation to senior levels is also done when breaches occur.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(3) Market Risk, continued:
(b) Price Risk, continued
The following table illustrates the interest rate positions of the Bank Book (repricing tenors) as of December 31, 2013 and 2012:
Accrual Book Interest Rate Exposure by Maturity
|
|
Up to 1 |
|
Between |
|
Between 3 |
|
Between |
|
Between |
|
More |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Assets as of December 31, 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
848,757 |
|
|
|
|
|
|
|
|
|
|
|
848,757 |
|
Transactions in the course of collection |
|
360,806 |
|
|
|
|
|
|
|
|
|
|
|
360,806 |
|
Accounts receivable from repurchase agreements and security borrowing |
|
54,591 |
|
|
|
|
|
|
|
|
|
|
|
54,591 |
|
Derivative instruments |
|
361,734 |
|
86,268 |
|
176,636 |
|
80,287 |
|
258,915 |
|
374,745 |
|
1,338,585 |
|
Loans and advances to banks |
|
791,728 |
|
117,220 |
|
156,297 |
|
|
|
|
|
|
|
1,065,245 |
|
Loans to customers, net |
|
3,457,101 |
|
2,743,019 |
|
5,681,608 |
|
4,582,528 |
|
2,293,838 |
|
5,890,051 |
|
24,648,145 |
|
Financial assets available-for-sale |
|
85,500 |
|
187,044 |
|
455,332 |
|
174,413 |
|
517,638 |
|
388,187 |
|
1,808,114 |
|
Financial assets held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
5,960,217 |
|
3,133,551 |
|
6,469,873 |
|
4,837,228 |
|
3,070,391 |
|
6,652,983 |
|
30,124,243 |
|
|
|
Up to 1 |
|
Between |
|
Between 3 |
|
Between |
|
Between |
|
More |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Assets as of December 31, 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
653,511 |
|
|
|
|
|
|
|
|
|
|
|
653,511 |
|
Transactions in the course of collection |
|
366,036 |
|
|
|
|
|
|
|
|
|
|
|
366,036 |
|
Accounts receivable from repurchase agreements and security borrowing |
|
582 |
|
|
|
|
|
|
|
|
|
|
|
582 |
|
Derivative instruments |
|
128,964 |
|
81,085 |
|
150,971 |
|
7,463 |
|
21,564 |
|
110,414 |
|
500,461 |
|
Loans and advances to banks |
|
1,152,648 |
|
14,731 |
|
178,761 |
|
|
|
|
|
|
|
1,346,140 |
|
Loans to customers, net |
|
3,172,424 |
|
2,390,933 |
|
4,769,542 |
|
4,329,131 |
|
2,083,220 |
|
5,314,078 |
|
22,059,328 |
|
Financial assets available-for-sale |
|
57,370 |
|
178,055 |
|
381,448 |
|
235,786 |
|
192,490 |
|
323,967 |
|
1,369,116 |
|
Financial assets held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
5,531,535 |
|
2,664,804 |
|
5,480,722 |
|
4,572,380 |
|
2,297,274 |
|
5,748,459 |
|
26,295,174 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(3) Market Risk, continued
(b) Price Risk, continued
|
|
Up to 1 |
|
Between |
|
Between 3 |
|
Between 1 |
|
Between |
|
More |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Liabilities as of December 31, 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accounts and demand deposits |
|
6,012,841 |
|
|
|
|
|
|
|
|
|
|
|
6,012,841 |
|
Transactions in the course of payment |
|
114,589 |
|
|
|
|
|
|
|
|
|
|
|
114,589 |
|
Accounts payable from repurchase agreements and security lending |
|
16,964 |
|
|
|
|
|
|
|
|
|
|
|
16,964 |
|
Savings accounts and time deposits |
|
5,141,774 |
|
2,211,623 |
|
3,005,229 |
|
213,224 |
|
135 |
|
31 |
|
10,572,016 |
|
Derivative instruments |
|
12,396 |
|
3,372 |
|
142,660 |
|
435,245 |
|
279,419 |
|
492,682 |
|
1,365,774 |
|
Borrowings from financial institutions |
|
279,063 |
|
513,096 |
|
194,863 |
|
|
|
|
|
|
|
987,022 |
|
Debt issued |
|
300,614 |
|
143,669 |
|
259,129 |
|
881,605 |
|
1,033,552 |
|
2,819,652 |
|
5,438,221 |
|
Other financial obligations |
|
161,134 |
|
1,258 |
|
7,013 |
|
13,604 |
|
17,438 |
|
23,840 |
|
224,287 |
|
Total liabilities |
|
12,039,375 |
|
2,873,018 |
|
3,608,894 |
|
1,543,678 |
|
1,330,544 |
|
3,336,205 |
|
24,731,714 |
|
|
|
Up to 1 |
|
Between |
|
Between 3 |
|
Between |
|
Between |
|
More |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Liabilities as of December 31, 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accounts and demand deposits |
|
5,531,827 |
|
|
|
|
|
|
|
|
|
|
|
5,531,827 |
|
Transactions in the course of payment |
|
127,611 |
|
|
|
|
|
|
|
|
|
|
|
127,611 |
|
Accounts payable from repurchase agreements and security lending |
|
5,268 |
|
|
|
|
|
|
|
|
|
|
|
5,268 |
|
Savings accounts and time deposits |
|
4,223,812 |
|
2,371,455 |
|
2,908,748 |
|
417,885 |
|
279 |
|
30 |
|
9,922,209 |
|
Derivative instruments |
|
3,903 |
|
3,477 |
|
26,924 |
|
175,376 |
|
83,186 |
|
260,272 |
|
553,138 |
|
Borrowings from financial institutions |
|
304,070 |
|
450,332 |
|
348,390 |
|
|
|
|
|
|
|
1,102,792 |
|
Debt issued |
|
119,449 |
|
162,656 |
|
253,617 |
|
683,676 |
|
689,980 |
|
2,337,558 |
|
4,246,936 |
|
Other financial obligations |
|
96,108 |
|
1,373 |
|
7,246 |
|
15,543 |
|
11,432 |
|
34,754 |
|
166,456 |
|
Total liabilities |
|
10,412,048 |
|
2,989,293 |
|
3,544,925 |
|
1,292,480 |
|
784,877 |
|
2,632,614 |
|
21,656,237 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(3) Market Risk, continued:
(b) Price Risk, continued:
Price Risk Sensitivity Analysis
The Bank has focused on stress tests as the main measurement tool for analyzing price risk sensitivity. The analysis is implemented for the Trading Book and the Bank Book separately. After the financial crisis started during 2008 and based on the various studies and analyses made on this specific matter, the Bank adopted this tool for sensitivity analysis when it notices that it is more reliable than normal distribution instruments such as VaR for trading portfolios or EaR for accrual portfolios, since:
(a) The financial crisis showed fluctuations that are materially higher than those used in the VaR with 99% of confidence level.
(b) The financial crisis showed also that correlations between these fluctuations that are materially different to those used in the VaR, since crisis precisely indicate severe disconnections between the behavior of market factors respect to the patterns normally observed.
(c) Trading liquidity dramatically decreased in emerging markets during the financial crisis (in the case of Chile too) and therefore, the escalaltion of the daily VaR is a very gross approximation of the expected loss.
Stress tests are produced observing historical events and collecting market factors data.
The former allow the Bank to gauge actual distress events in terms of magnitude but mainly focused on detecting unusual fluctuations.
The latter gives the Bank the technical background for implementing statistical analysis. An updated database is maintained including historical data of foreign exchange rates, debt instruments yields to maturity, derivatives swap yields, foreign exchange volatilities, etc. that enable the Bank to maintain up-to-date records of historical volatility of market factors fluctuations and correlations between these ones.
Given the above, the stress tests may be implemented modeling directional fluctuations but also knowing the magnitude of the modeled fluctuations relative to statistical data and also how frequent the fluctuation modeled occurred in the past.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(3) Market Risk, continued:
(b) Price Risk, continued:
In order to comply with IFRS 7.40, we include the following exercise illustrating an estimation of the impact of feasible but reasonable fluctuations of interest rates, swaps yield, foreign exchange rates and foreign exchange volatilities embedded in the Trading and Accrual portfolios. Given that the Banks portfolio includes positions denominated in nominal and real interest rates, these fluctuations must be aligned with realistic inflation changes forecast. The exercise is implemented in a very simplistic way: trading portfolios impacts are estimated by multiplying DV01s by expected interest rates shifts; accrual portfolios impacts are computed by multiplying cumulative gaps by forward interest rates modeled fluctuations. It is relevant to note, this methodology includes the limitation that the interest rates convexity is not properly captured when material fluctuations are modeled; additionally, neither convexity nor prepayments behaviors are captured for the accrual portfolio analysis. In any case, given the magnitude of the shifts, the methodology may be accurate enough for the purposes and scope of the analysis.
The following table illustrates the fluctuations modeled and used in the stress testing process. Bonds yields, derivatives yields, FX rates, FX CLP/USD volatility and inflation fluctuations are shown for each tenor point. Equity prices fluctuations are not included given that the positions held in the stockbrokerage house (Banchile Corredores de Bolsa SA) are negligible. In fact, equity positions are typically very small given that this legal vehicle is mostly focused on customer driven transactions (brokerage service or equity swaps transactions closed with customers).
The directions of these fluctuations were chosen between four scenarios (two positive economic scenarios and two negative economic scenarios) in order to generate the worst impact within the four above mentioned:
Market Factor Fluctuations: adverse scenario
|
|
CLP |
|
CLP |
|
CLF |
|
CLF |
|
USD |
|
Spread USD |
|
Vol FX |
|
Inflations |
|
3 months |
|
(93 |
) |
(75 |
) |
533 |
|
601 |
|
(2 |
) |
295 |
|
7.3 |
% |
(0.60 |
)% |
6 months |
|
(116 |
) |
(88 |
) |
245 |
|
267 |
|
(8 |
) |
225 |
|
6.1 |
% |
(0.12 |
)% |
9 months |
|
(128 |
) |
(95 |
) |
108 |
|
128 |
|
(10 |
) |
213 |
|
5.5 |
% |
(0.07 |
)% |
1 year |
|
(140 |
) |
(99 |
) |
27 |
|
55 |
|
(11 |
) |
188 |
|
5.1 |
% |
(0.07 |
)% |
2 years |
|
(153 |
) |
(95 |
) |
(22 |
) |
4 |
|
(18 |
) |
104 |
|
5.1 |
% |
|
|
4 years |
|
(174 |
) |
(127 |
) |
(62 |
) |
(46 |
) |
(31 |
) |
76 |
|
|
|
(0.02 |
)% |
6 years |
|
(162 |
) |
(127 |
) |
(76 |
) |
(70 |
) |
(38 |
) |
70 |
|
|
|
|
|
10 years |
|
(139 |
) |
(125 |
) |
(91 |
) |
(87 |
) |
(42 |
) |
78 |
|
|
|
(0.01 |
)% |
16 years |
|
(143 |
) |
(127 |
) |
(80 |
) |
(76 |
) |
(43 |
) |
83 |
|
|
|
(0.06 |
)% |
20 years |
|
(151 |
) |
(127 |
) |
(79 |
) |
(71 |
) |
(44 |
) |
86 |
|
|
|
(0.06 |
)% |
Bps = Basic points
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(3) Market Risk, continued:
(b) Price Risk, continued
The impact on Trading Book as of 31 December 2013 is the following:
POTENTIAL P&L IMPACT
TRADING BOOK
|
|
MCh$ |
|
CLP Interest Rate |
|
(3,383 |
) |
Derivatives |
|
(3,578 |
) |
Securities |
|
195 |
|
CLF Interest Rate |
|
(4,824 |
) |
Derivatives |
|
(5,248 |
) |
Securities |
|
424 |
|
USD, EUR, JPY Offshore Interest Rate |
|
(857 |
) |
USD, EUR, JPY On/Off Spread |
|
4,232 |
|
Total Interest Rate |
|
(4,831 |
) |
Total FX |
|
(100 |
) |
Total FX Option Vega |
|
1,312 |
|
Potential P&L Impact: Interest Rate + FX + Vega |
|
(3,619 |
) |
Banco de Chile Tier1 Capital |
|
2,284,314 |
|
The scenario modeled would generate losses in the Trading Book up to Ch$ 3,600 MM or slightly above USD 7 MM. In any case, these huge fluctuations would not result in material losses compared to the historical observed P&L for one month or the Tier 1 Capital.
The impact of such fluctuations in the Accrual portfolio, which is not necessarily a gain/loss but greater/lower net revenue from funds generation, is illustrated below:
POTENTIAL MARGINAL NRFF(*) ACCRUAL BOOK
(next 12 months)
|
|
MCh$ |
|
Higher / (Lower NRFF) |
|
(146,485 |
) |
Impact Due to Inter-Banking yield curve (swap yield) shock |
|
(121,170 |
) |
Impact Due to Spreads Shock |
|
(25,315 |
) |
(*) Net revenue from funds.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(3) Market Risk, continued:
(b) Price Risk, continued
The adverse impact in the Accrual book would be the result of two events: a severe drop in the local inflation and the increase of our funding spread. The lower net revenues from funds in the following 12 months would reach CH$ 146 billion, which is still much lower of the current annual 12-month rolling P&L generation.
The following table illustrates the changes in fair value of Available-for-Sale securities as the result of stress test modeled above. These changes are recorded in Other Comprehensive Income, a component of shareholders Equity, and not current earnings:
AVAILABLE FOR SALE PORTFOLIO IMPACT
ADVERSE SCENARIO
|
|
DV01(+1 bps) |
|
Impact due |
|
Impact due to |
|
Instrument |
|
(USD) |
|
(USD) |
|
(MCh$) |
|
CLP |
|
(189,961 |
) |
(11.9 |
) |
(6,230 |
) |
CLF |
|
(500,888 |
) |
(37.6 |
) |
(19,781 |
) |
USD |
|
(146,947 |
) |
(16.1 |
) |
(8,442 |
) |
Total |
|
|
|
(65.6 |
) |
(34,453 |
) |
(4) Capital Requirements and Capital Management:
The main objectives of the Capital Management process are to ensure the compliance with regulatory requirements, to keep a strong credit rating and healthy capital ratios. Within 2013, the Bank has complied with all these tasks.
As a part of the Capital Management Policy, it has been established capital sufficiency triggers in order to prevent capital ratios usage close to the limits. The triggers are established at levels much lower than the limits and the usage is monitored monthly. Within 2013, there were no triggrers breaches.
The capital amount is managed according to the risk environment, the economic performance of Chile and the main economies and the business cycle. For implementing this, the board may change the dividend policy or authorize equity issuance or stocks repurchase programs.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(4) Capital Requirements and Capital Management, continued:
Regulatory Capital
According to the Chilean Bank Law, banks must comply with a minimum Basel I Tier 2 Capital ratio of 8%. Therefore, the bank must maintain a minimum Tier 2 Capital that cannot be lower than 8% of the sum of 12,5 times the ERM (market risk computed for trading portfolios, see 41 (3) (b) above) and RAAP assets. Additionally, the Bank must comply with a minimum capital to total assets ratio: the law establish that banks must maintain a minimum Tier 1 Capital that cannot be lower than the 3% of total assets. The authorities have requested Banco de Chile, due to the merge with the operation of Citibank, N.A. in Chile that maintains the first percentage as a minimum of 10%.
Tier 1 and Tier 2 Capital are computed according the international standards; assets are risk weighted, for reporting purposes, according to SBIF instructions which are adopted from BIS guidelines. For derivatives, the risk weighting process is applied over the loan equivalent of each derivative transaction. The loan equivalent is sum of the current value of the transaction, if positive, and the maximum exposure the Bank may face in the future, along the life of the transaction, considering the increase in value of it due to market factor fluctuations including some confidence level. The loan equivalent is expressed as a percentage of the notional amount of the transaction, being these percentages much larger for FX transactions than for interest rate swaps or for longer tenors than for shorter ones.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(4) Capital Requirements and Capital Management, continued:
The risk-weighted assets and Tier 1 and Tier 2 Capital, as of end of year 2012 and 2013, are the following:
|
|
Consolidated assets |
|
Risk-weighted assets |
| ||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Balance sheet assets (net of provisions) |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
873,308 |
|
684,925 |
|
20,654 |
|
832 |
|
Transactions in the course of collection |
|
374,471 |
|
396,611 |
|
39,728 |
|
53,978 |
|
Financial Assets held-for-trading |
|
393,134 |
|
192,724 |
|
124,932 |
|
55,025 |
|
Receivables from repurchase agreements and security borrowing |
|
82,422 |
|
35,100 |
|
82,422 |
|
35,100 |
|
Derivative instruments |
|
374,688 |
|
329,497 |
|
460,537 |
|
328,642 |
|
Loans and advances to banks |
|
1,062,056 |
|
1,343,322 |
|
381,494 |
|
231,182 |
|
Loans to customers, net |
|
20,389,033 |
|
18,334,330 |
|
18,505,593 |
|
16,658,476 |
|
Financial assets available-for-sale |
|
1,673,704 |
|
1,264,440 |
|
432,995 |
|
416,938 |
|
Financial assets held-to-maturity |
|
|
|
|
|
|
|
|
|
Investments in other companies |
|
16,670 |
|
13,933 |
|
16,670 |
|
13,933 |
|
Intangible assets |
|
29,671 |
|
34,290 |
|
29,671 |
|
33,151 |
|
Property and equipment |
|
197,578 |
|
205,189 |
|
197,578 |
|
205,189 |
|
Current tax assets |
|
3,202 |
|
2,684 |
|
320 |
|
268 |
|
Deferred tax assets |
|
145,904 |
|
127,143 |
|
14,590 |
|
12,714 |
|
Other assets |
|
318,029 |
|
296,878 |
|
318,029 |
|
296,879 |
|
Subtotal |
|
|
|
|
|
20,625,213 |
|
18,342,307 |
|
|
|
|
|
|
|
|
|
|
|
Off-balance-sheet assets |
|
|
|
|
|
|
|
|
|
Contingent loans |
|
3,927,627 |
|
3,945,940 |
|
2,355,879 |
|
2,367,215 |
|
Total risk-weighted assets |
|
|
|
|
|
22,981,092 |
|
20,709,522 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
41. Risk Management, continued:
(4) Capital Requirements and Capital Management, continued:
|
|
As of December 31, 2013 |
|
As of December 31, 2012 |
| ||||
|
|
MCh$ |
|
% |
|
MCh$ |
|
% |
|
|
|
|
|
|
|
|
|
|
|
Tier 1 Capital (*) |
|
2,284,314 |
|
7.57 |
|
2,007,057 |
|
7.33 |
|
Tier 2 Capital |
|
2,999,061 |
|
13.05 |
|
2,738,311 |
|
13.22 |
|
(*) Corresponds to equity attributable to equity holders in the Statement of Consolidated Financial Position
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) On January 9, 2014 LQ Inversiones Financieras S.A. (LQIF) informed Banco de Chile that LQIF will carry out a process to offer for sale or transfer up to 6,900,000,000 shares of Banco de Chile (a secondary offering). In addition, LQIF has requested that Banco de Chile perform all the actions related to the execution of this kind of transaction in the local and international markets.
Furthermore, the letter indicates that, if consummated, this transaction will reduce LQIFs share of outstanding voting rights from 58.4% to 51%, so that the control status of LQIF with respect to Banco de Chile will not be altered.
With regard to the above, on this date the Board of Directors of Banco de Chile has agreed to LQIFs request and the conditions under which Banco de Chile will participate in the appropriate filings with foreign regulators, the entering into of contracts and other documents required by law and consistent with securities market practice in the United States of America and other international markets, and in the performing of such other steps and actions as are necessary for the consummation of this transaction in the local and international markets and that are related to the commercial and financial condition of Banco de Chile.
(b) On January 14, 2014, in relation to the relevant event dated January 9, 2014, it is informed that Banco de Chile has filed with the Securities and Exchange Commission of the United States of America (SEC), Supplemental Preliminary a prospectus which contains financial and business information of the Bank.
Also, it has been registered the agreed contract text called Underwriting Agreement that will be subscribed by LQ Inversiones Financieras S.A. (LQIF), as a seller of securities, Banco de Chile as issuer, and Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc. and Banco BTG Pactual SA - Cayman Branch, as underwriters.
Additionally, LQIF and Banco de Chile have agreed the terms and general conditions under which the Bank will participate in this process.
(c) On January 29, 2014, LQ Inversiones Financieras S.A. informed as a relevant event that was placed of 6,700,000,000 shares of Banco de Chile, in the local market and the United States of America, by American Depositary Receipts Program, at a price of $ 67 per share, declaring successful offer for sale. Additionally, it informed that the 6,700,000,000 shares of Banco de Chile offered for sale will be placed in stock exchange at price stated on January 29, 2014.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
42. Subsequent Events, continued:
(d) On January 29, 2014, Bank is informed that in relation to the secondary offering shares of Banco de Chile that is performing with LQ Inversiones Financieras S.A., in this date Banco de Chile as issuer, LQ Investments SA, as seller of the securities, and Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc., and Banco BTG Pactual SA - Cayman Branch as underwriters, have been subscribed a contract called Underwriting Agreement, according to relevant event dated January 14, 2014.
Also, later than January 30, 2014, Banco de Chile will proceed to register in Securities and Exchange Commission of the United States of America (SEC), Final Prospectus Supplement, which contains financial and commercial information of the Bank.
(e) On January 31, 2014, it was informed that in the Ordinary Meeting No. BCH 2,790 held on January 30th, 2014, the Board of Directors of Banco de Chile resolved to call an Ordinary Shareholders Meeting to be held on March 27th, 2014, with the objective of proposing, among other matters, the distribution of the Dividend number 202 of $3.48356970828 per each of the 93,175,043,991 Banco de Chile shares, which will be payable at the expense of the distributable net income obtained during the fiscal year ending on December 31st, 2013, corresponding to the 70% of such income.
Likewise, the Board of Directors resolved to call an Extraordinary Shareholders Meeting to be held on the same date in order to propose, among other things, the capitalization of the 30% of the distributable net income of the Bank obtained during the fiscal year ending on December 31st, 2013, through the issuance of fully paid-in shares, of no par value, with a value of $64.56 per Banco de Chile share, which will be distributed among the shareholders in the proportion of 0.02312513083 shares for each Banco de Chile share and to adopt the necessary agreements subject to the exercise of the options established in article 31 of Law 19,396.
(f) By Oficio Reservado N° 064 dated January 30th, 2014 the Superintendency of Securities and Insurance (Superintendencia de Valores y Seguros) brought charges against Banchile Corredores de Bolsa S.A. for the alleged infringement of Article 53 second paragraph of Law 18,045 (Ley de Mercado de Valores), for certain specific transactions performed during the years 2009, 2010 and 2011.
In Managements opinion, there are no other significant subsequent events that affect or could affect the consolidated financial statements of the Bank and its subsidiaries between December 31, 2013 and the date of issuance of these consolidated financial statements.
|
|
|
|
Héctor Hernández G. |
Arturo Tagle Q. |
General Accounting Manager |
Chief Executive Officer |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 6, 2014
|
| |
|
Banco de Chile | |
|
| |
|
/S/ Arturo Tagle Q. | |
|
By: |
Arturo Tagle Q. |