Table of Contents

 

 

 

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 April, 2013

 

Commission File Number 001-15266

 

BANK OF CHILE

(Translation of registrant’s name into English)

 

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- o

 

 

 



Table of Contents

 

BANCO DE CHILE
REPORT ON FORM 6-K

 

Attached Banco de Chile’s Financial Statements with notes for the First Quarter of 2013.

 



Table of Contents

 

BANCO DE CHILE AND SUBSIDIARIES

 

Index

 

I.                     Interim Condensed Consolidated Statements of Financial Position

II.                Interim Condensed Consolidated Statements of Comprehensive Income

III.           Interim Condensed Consolidated Statements of Other Comprehensive Income

IV.            Interim Condensed Consolidated Statements of Changes in Equity

V.                 Interim Condensed Consolidated Statements of Cash Flows

VI.            Notes to the Interim Condensed 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

 

UF 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 month’s inflation rate).

 

 

 

 

 

IFRS

=

International Financial Reporting Standards

 

IAS

=

International Accounting Standards

 

RAN

=

Compilation of Norms of the Chilean Superintendency of Banks

 

IFRIC

=

International Financial Reporting Interpretations Committee

 

SIC

=

Standards Interpretation Committee

 



Table of Contents

 

BANCO DE CHILE AND SUBSIDIARIES

 

INDEX

 

 

Page

Interim Condensed Consolidated Statement of Financial Position

3

Interim Condensed Consolidated Statements of Comprehensive Income

4

Interim Condensed Consolidated Statement of Changes in Equity

6

Interim Condensed Consolidated Statements of Cash Flows

7

1.

Company Information:

8

2.

Legal provisions, basis of preparation and other information:

8

3.

New Accounting Pronouncements:

11

4.

Changes in Accounting Policies and Disclosures:

14

5.

Relevant Events:

14

6.

Segment Reporting:

17

7.

Cash and Cash Equivalents:

20

8.

Financial Assets Held-for-trading:

21

9.

Cash collateral on securities borrowed and reverse repurchase agreements:

22

10.

Derivative Instruments and Accounting Hedges:

25

11.

Loans and advances to Banks:

30

12.

Loans to Customers, net:

31

13.

Investment Securities:

35

14.

Investments in Other Companies:

37

15.

Intangible Assets:

39

16.

Property and equipment:

42

17.

Current Taxes and Deferred Taxes:

44

18.

Other Assets:

48

19.

Current accounts and Other Demand Deposits:

49

20.

Savings accounts and Time Deposits:

49

21.

Borrowings from Financial Institutions:

50

22.

Debt Issued:

52

23.

Other Financial Obligations:

55

24.

Provisions:

55

25.

Other Liabilities:

59

26.

Contingencies and Commitments:

60

27.

Equity:

64

28.

Interest Revenue and Expenses:

68

29.

Income and Expenses from Fees and Commissions:

70

30.

Net Financial Operating Income:

71

31.

Foreign Exchange Transactions, net:

71

32.

Provisions for Loan Losses:

72

33.

Personnel Expenses:

73

34.

Administrative Expenses:

74

35.

Depreciation, Amortization and Impairment:

75

36.

Other Operating Income:

76

37.

Other Operating Expenses:

77

38.

Related Party Transactions:

78

39.

Fair Value of Financial Assets and Liabilities:

83

40.

Maturity of Assets and Liabilities:

92

41.

Subsequent Events:

94

 



Table of Contents

 

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

For the periods ended March 31, 2013 and 2012

(Translation of financial statements originally issued in Spanish)

(Expressed in million of Chilean pesos)

 

 

 

Notes

 

March
2013

 

December
2012

 

March
2012

 

 

 

 

 

MCh$

 

MCh$

 

MCh$

 

ASSETS

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

7

 

629,627

 

684,925

 

996,023

 

Transactions in the course of collection

 

7

 

478,296

 

396,611

 

546,454

 

Financial assets held-for-trading

 

8

 

328,921

 

192,724

 

346,338

 

Cash collateral on securities borrowed and reverse repurchase agreements

 

9

 

44,816

 

35,100

 

40,050

 

Derivative instruments

 

10

 

334,163

 

329,497

 

375,169

 

Loans and advances to banks

 

11

 

966,762

 

1,343,322

 

299,377

 

Loans to customers, net

 

12

 

18,762,438

 

18,334,330

 

17,357,290

 

Financial assets available-for-sale

 

13

 

1,602,820

 

1,264,440

 

1,359,057

 

Financial assets held-to-maturity

 

13

 

 

 

 

Investments in other companies

 

14

 

14,247

 

13,933

 

15,880

 

Intangible assets

 

15

 

33,019

 

34,290

 

35,216

 

Property and equipment

 

16

 

203,495

 

205,189

 

209,188

 

Current tax assets

 

17

 

3,153

 

2,684

 

2,197

 

Deferred tax assets

 

17

 

124,618

 

127,143

 

112,394

 

Other assets

 

18

 

299,371

 

296,878

 

261,008

 

TOTAL ASSETS

 

 

 

23,825,746

 

23,261,066

 

21,955,641

 

LIABILITIES

 

 

 

 

 

 

 

 

 

Current accounts and other demand deposits

 

19

 

5,455,183

 

5,470,971

 

5,155,775

 

Transactions in the course of payment

 

7

 

317,569

 

159,218

 

349,718

 

Cash collateral on securities lent and repurchase agreements

 

9

 

329,557

 

226,396

 

301,456

 

Savings accounts and time deposits

 

20

 

9,831,738

 

9,612,950

 

9,140,305

 

Derivative instruments

 

10

 

367,884

 

380,322

 

393,669

 

Borrowings from financial institutions

 

21

 

1,184,869

 

1,108,681

 

1,698,913

 

Debt issued

 

22

 

3,462,679

 

3,273,933

 

2,499,397

 

Other financial obligations

 

23

 

150,245

 

162,123

 

146,950

 

Current tax liabilities

 

17

 

26,455

 

25,880

 

7,442

 

Deferred tax liabilities

 

17

 

31,656

 

27,630

 

23,722

 

Provisions

 

24

 

270,370

 

504,837

 

258,396

 

Other liabilities

 

25

 

252,459

 

301,066

 

213,311

 

TOTAL LIABILITIES

 

 

 

21,680,664

 

21,254,007

 

20,189,054

 

 

 

 

 

 

 

 

 

 

 

EQUITY

 

27

 

 

 

 

 

 

 

Attributable to Bank’s Owners:

 

 

 

 

 

 

 

 

 

Capital

 

 

 

1,849,433

 

1,629,078

 

1,509,994

 

Reserves

 

 

 

213,767

 

177,574

 

177,574

 

Other comprehensive income

 

 

 

24,690

 

18,935

 

12,883

 

Retained earnings:

 

 

 

 

 

 

 

 

 

Retained earnings from previous periods

 

 

 

16,379

 

16,379

 

16,379

 

Income for the period

 

 

 

121,470

 

465,850

 

121,161

 

Less:

 

 

 

 

 

 

 

 

 

Provision for minimum dividends

 

 

 

(80,658

)

(300,759

)

(71,405

)

Subtotal

 

 

 

2,145,081

 

2,007,057

 

1,766,586

 

Non-controlling interests

 

 

 

1

 

2

 

1

 

 

 

 

 

 

 

 

 

 

 

TOTAL EQUITY

 

 

 

2,145,082

 

2,007,059

 

1,766,587

 

TOTAL LIABILITIES AND EQUITY

 

 

 

23,825,746

 

23,261,066

 

21,955,641

 

 

The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements

 

3



Table of Contents

 

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the three-month ended March 31, 2013 and 2012

(Translation of financial statements originally issued in Spanish)

(Expressed in million of Chilean pesos)

 

A. CONSOLIDATED STATEMENT OF INCOME

 

 

 

Notes

 

March
2013

 

March
2012

 

 

 

 

 

MCh$

 

MCh$

 

Interest revenue

 

28

 

397,542

 

434,426

 

Interest expense

 

28

 

(153,082

)

(190,071

)

Net interest income

 

 

 

244,460

 

244,355

 

 

 

 

 

 

 

 

 

Income from fees and commissions

 

29

 

94,356

 

91,301

 

Expenses from fees and commissions

 

29

 

(17,388

)

(16,035

)

Net fees and commission income

 

 

 

76,968

 

75,266

 

 

 

 

 

 

 

 

 

Net financial operating income

 

30

 

4,870

 

(1,779

)

Foreign exchange transactions, net

 

31

 

9,960

 

12,241

 

Other operating income

 

36

 

7,892

 

7,637

 

Total operating revenues

 

 

 

344,150

 

337,720

 

 

 

 

 

 

 

 

 

Provisions for loan losses

 

32

 

(49,843

)

(46,950

)

 

 

 

 

 

 

 

 

OPERATING REVENUES, NET OF PROVISIONS FOR LOAN LOSSES

 

 

 

294,307

 

290,770

 

 

 

 

 

 

 

 

 

Personnel expenses

 

33

 

(77,932

)

(75,204

)

Administrative expenses

 

34

 

(59,299

)

(57,525

)

Depreciation and amortization

 

35

 

(7,201

)

(7,720

)

Impairment

 

35

 

(5

)

 

Other operating expenses

 

37

 

(10,151

)

(14,901

)

 

 

 

 

 

 

 

 

TOTAL OPERATING EXPENSES

 

 

 

(154,588

)

(155,350

)

 

 

 

 

 

 

 

 

NET OPERATING INCOME

 

 

 

139,719

 

135,420

 

 

 

 

 

 

 

 

 

Income attributable to associates

 

14

 

608

 

590

 

Income before income tax

 

 

 

140,327

 

136,010

 

 

 

 

 

 

 

 

 

Income tax

 

 

 

(18,857

)

(14,849

)

 

 

17

 

 

 

 

 

NET INCOME FOR THE PERIOD

 

 

 

121,470

 

121,161

 

Attributable to:

 

 

 

 

 

 

 

Bank’s Owners

 

 

 

121,470

 

121,161

 

Non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to Bank’s Owners:

 

 

 

Ch$

 

Ch$

 

Basic net income per share

 

27

 

1.33

 

1.38

 

Diluted net income per share

 

27

 

1.33

 

1.38

 

 

The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements

 

4



Table of Contents

 

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the three-month ended March 31, 2013 and 2012

(Translation of financial statements originally issued in Spanish)

(Expressed in million of Chilean pesos)

 

B. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

Notes

 

March
2013

 

March
2012

 

 

 

 

 

MCh$

 

MCh$

 

 

 

 

 

 

 

 

 

NET INCOME FOR THE PERIOD

 

 

 

121,470

 

121,161

 

 

 

 

 

 

 

 

 

OTHER COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gains (losses):

 

 

 

 

 

 

 

Net change in unrealized gains (losses) on available-for-sale instruments

 

13

 

7,751

 

17,436

 

Gains and losses on derivatives held as cash flow hedges

 

 

 

(542

)

772

 

Cumulative translation adjustment

 

 

 

(12

)

(45

)

Other comprehensive income before income taxes

 

 

 

7,197

 

18,163

 

 

 

 

 

 

 

 

 

Income tax related to other comprehensive income

 

17

 

(1,442

)

(3,118

)

 

 

 

 

 

 

 

 

Total other comprehensive income

 

 

 

5,755

 

15,045

 

 

 

 

 

 

 

 

 

TOTAL CONSOLIDATED COMPREHENSIVE INCOME

 

 

 

127,225

 

136,206

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

Bank’s owners

 

 

 

127,225

 

136,206

 

Non-controlling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive net income per share attributable to Bank’s owners:

 

 

 

Ch$

 

Ch$

 

Basic net income per share

 

 

 

1.39

 

1.55

 

Diluted net income per share

 

 

 

1.39

 

1.55

 

 

The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements

 

5



Table of Contents

 

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the three-month ended March 31, 2013 and 2012

(Translation of financial statements originally issued in Spanish)

(Expressed in millions of Chilean pesos)

 

 

 

 

 

 

 

Reserves

 

Other comprehensive income

 

Retained earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

Retained

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

gains

 

 

 

 

 

earnings

 

 

 

Provision

 

Attributable

 

 

 

 

 

 

 

Notes

 

Paid-in
Capital

 

Other
reserves

 

Reserves
from
earnings

 

(losses) on
available-
for- sale

 

Derivatives
cash flow
hedge

 

Cumulative
translation
adjustment

 

from
previous
periods

 

Income for
the year

 

for
minimum
dividends

 

to equity
holders of
the parent

 

Non-
controlling
interest

 

Total
equity

 

 

 

 

 

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

)

1739,173

 

2

 

1,739,175

 

Capitalization of retained earnings

 

27

 

73,911

 

 

 

 

 

 

 

(73,911

)

 

 

 

 

Retention (released) earnings

 

27

 

 

 

58,092

 

 

 

 

 

(58,092

)

 

 

 

 

Dividends distributions and paid

 

27

 

 

 

 

 

 

 

 

(296,802

)

259,501

 

(37,301

)

(1

)

(37,302

)

Other comprehensive income:

 

27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative translation adjustment

 

 

 

 

 

 

 

 

(45

)

 

 

 

(45

)

 

(45

)

Cash flow hedge adjustment, net

 

 

 

 

 

 

 

633

 

 

 

 

 

633

 

 

633

 

Valuation adjustment on available-for-sale instruments, net

 

 

 

 

 

 

14,370

 

 

 

 

 

 

14,370

 

 

14,370

 

Income for the period 2012

 

 

 

 

 

 

 

 

 

 

121,161

 

 

121,161

 

 

121,161

 

Provision for minimum dividends

 

27

 

 

 

 

 

 

 

 

 

(71,405

)

(71,405

)

 

(71,405

)

Balances as of March 31, 2012

 

 

 

1,500,994

 

32,256

 

145,318

 

12,726

 

238

 

(81

)

16,379

 

121,161

 

(71,405

)

1,766,586

 

1

 

1,766,587

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative translation adjustment

 

 

 

 

 

 

 

 

(13

)

 

 

 

(13

)

 

(13

)

Cash flow hedge adjustment, net

 

 

 

 

 

 

 

796

 

 

 

 

 

 

796

 

 

796

 

Valuation adjustment on available-for-sale instruments, net

 

 

 

 

 

 

5,269

 

 

 

 

 

 

5,269

 

 

5,269

 

Subscribed and paid shares

 

 

 

119,084

 

 

 

 

 

 

 

 

 

119,084

 

 

119,084

 

Income for the period 2012

 

 

 

 

 

 

 

 

 

 

344,689

 

 

344,689

 

1

 

344,690

 

Provision for minimum dividends

 

 

 

 

 

 

 

 

 

 

 

(229,354

)

(229,354

)

 

(229,354

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances as of December 31, 2012

 

 

 

1,629,078

 

32,256

 

145,318

 

17,995

 

1,034

 

(94

)

16,379

 

465,850

 

(300,759

)

2,007,057

 

2

 

2,007,059

 

Capitalization of retained earnings

 

27

 

86,202

 

 

 

 

 

 

 

(86,202

)

 

 

 

 

Retention (released) earnings

 

27

 

 

 

36,193

 

 

 

 

 

(36,193

)

 

 

 

 

Dividends distributions and paid

 

27

 

 

 

 

 

 

 

 

(343,455

)

300,759

 

(42,696

)

(1

)

(42,697

)

Other comprehensive income:

 

27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative translation adjustment

 

 

 

 

 

 

 

 

(12

)

 

 

 

(12

)

 

(12

)

Cash flow hedge adjustment, net

 

 

 

 

 

 

 

(433

)

 

 

 

 

(433

)

 

(433

)

Valuation adjustment on available-for-sale instruments (net)

 

 

 

 

 

 

6,200

 

 

 

 

 

 

6,200

 

 

6,200

 

Subscribed and paid shares

 

 

 

134,153

 

 

 

 

 

 

 

 

 

134,153

 

 

134,153

 

Income for the period 2013

 

 

 

 

 

 

 

 

 

 

121,470

 

 

121,470

 

1

 

121,471

 

Provision for minimum dividends

 

27

 

 

 

 

 

 

 

 

 

(80,658

)

(80,658

)

 

(80,658

)

Balances as of March 31, 2013

 

 

 

1,849,433

 

32,256

 

181,511

 

24,195

 

601

 

(106

)

16,379

 

121,470

 

(80,658

)

2,145,081

 

1

 

2,145,082

 

 

The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements

 

6



Table of Contents

 

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three-month ended March 31, 2013 and 2012

(Translation of financial statements originally issued in Spanish)

(Expressed in million of Chilean pesos)

 

 

 

Notes

 

March
2013

 

March
2012

 

 

 

 

 

MCh$

 

MCh$

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net income for the period

 

 

 

121,470

 

121,161

 

Items that do not represent cash flows:

 

 

 

 

 

 

 

Depreciation and amortization

 

35

 

7,201

 

7,720

 

Impairment of intangible assets and property and equipment

 

35

 

5

 

 

Provision for loan losses

 

32

 

57,140

 

55,157

 

Provision of contingent loans

 

32

 

1,561

 

750

 

Fair value adjustment of financial assets held-for-trading

 

 

 

(346

)

1,378

 

Income attributable to investments in other companies

 

14

 

(608

)

(590

)

Income from sales of assets received in lieu of payment

 

36

 

(1,777

)

(1,695

)

Net gain on sales of property and equipment

 

 

 

(160

)

(57

)

(Increase) decrease in other assets and liabilities

 

 

 

(80,504

)

(117,648

)

Charge-offs of assets received in lieu of payment

 

37

 

388

 

254

 

Other charges (credits) to income that do not represent cash flows

 

 

 

(1,686

)

(389

)

(Gain) loss from foreign exchange transactions of other assets and other liabilities

 

 

 

11,400

 

(43,543

)

Net changes in interest and fee accruals

 

 

 

24,562

 

3,875

 

Changes in assets and liabilities that affect operating cash flows:

 

 

 

 

 

 

 

(Increase) decrease in loans and advances to banks, net

 

 

 

376,721

 

349,072

 

(Increase) decrease in loans to customers

 

 

 

(484,889

)

(375,193

)

(Increase) decrease in financial assets held-for-trading, net

 

 

 

(118,379

)

(76,249

)

(Increase) decrease in deferred taxes, net

 

17

 

6,551

 

4,397

 

(Increase) decrease in current account and other demand deposits

 

 

 

(15,796

)

260,467

 

(Increase) decrease in payables from repurchase agreements and security lending

 

 

 

109,187

 

56,037

 

(Increase) decrease in savings accounts and time deposits

 

 

 

196,836

 

(166,389

)

Proceeds from sale of assets received in lieu of payment

 

 

 

1,885

 

2,228

 

Total cash flows from operating activities

 

 

 

210,762

 

80,743

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 (Increase) decrease in financial assets available-for-sale, net

 

 

 

(150,906

)

114,873

 

Purchases of property and equipment

 

16

 

(3,358

)

(6,339

)

Proceeds from sales of property and equipment

 

 

 

416

 

73

 

Purchases of intangible assets

 

15

 

(1,040

)

(2,300

)

Investments in other companies

 

14

 

 

 

Dividends received from investments in other companies

 

14

 

 

 

Total cash flows from investing activities

 

 

 

(154,888

)

106,307

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Proceeds of mortgage finance bonds

 

 

 

 

 

Repayment of mortgage finance bonds

 

 

 

(5,785

)

(7,497

)

Proceeds from bond issuances

 

22

 

374,323

 

109,811

 

Redemption of bond issuances

 

 

 

(188,958

)

(26,038

)

Proceeds from subscription and payment of shares

 

27

 

134,153

 

 

Dividends paid

 

27

 

(343,455

)

(296,802

)

(Increase) decrease in borrowings from financial institutions

 

 

 

(85,528

)

234,001

 

(Increase) decrease in other financial obligations

 

 

 

(10,708

)

(36,652

)

(Increase) decrease in borrowings from Central Bank of Chile

 

 

 

 

(22,793

)

Proceeds from borrowings from Central Bank (long-term)

 

 

 

 

 

Payment of borrowings from Central Bank of Chile (long-term)

 

 

 

(3

)

(8

)

Long-term foreign borrowings

 

 

 

252,109

 

63,492

 

Payment of long-term foreign borrowings

 

 

 

(90.468

)

(189,716

)

Proceeds from other long-term borrowings

 

 

 

53

 

249

 

Payment of other long-term borrowings

 

 

 

(1,248

)

(1,355

)

Total cash flows from financing activities

 

 

 

34,485

 

(173,308

)

TOTAL NET POSITIVE CASH FLOWS FOR THE PERIOD

 

 

 

90,359

 

13,742

 

Net effect of exchange rate changes on cash and cash equivalents

 

 

 

(5,935

)

(26,875

)

Cash and cash equivalents at beginning of year

 

 

 

1,236,324

 

1,429,908

 

Cash and cash equivalents at end of period

 

7

 

1,320,748

 

1,416,775

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

Cash paid during the year for:

 

 

 

 

 

 

 

Interest received

 

 

 

396,318

 

385,864

 

Interest paid

 

 

 

(127,196

)

(137,634

)

 

The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements

 

7



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BANCO DE CHILE AND SUBSIDIARIES

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three-month ended March 31, 2013 and 2012

 (Translation of financial statements originally issued in Spanish)

(Expressed in million of Chilean pesos)

 


 

1.                   Company Information:

 

Banco de Chile, resulting from the merger of Banco Nacional de Chile, Banco Agrícola and Banco de Valparaíso, was formed on October 28, 1893 in the city of Santiago, in the presence of the Notary Eduardo Reyes Lavalle.

 

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”), 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’s shares are also listed on the Latin American securities market of the Madrid Stock Exchange (“LATIBEX”).

 

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 Bank’s subsidiaries provide other services including securities brokerage, mutual fund and investment management, factoring, insurance brokerage, financial advisory and securitization.

 

Banco de Chile’s legal address is Paseo Ahumada 251, Santiago, Chile and its Website is www.bancochile.cl.

 

 

2.                   Legal provisions, basis of preparation and other information:

 

(a)                        Legal provisions:

 

The General Banking Law in its Article N° 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, the latter shall prevail.

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued

 


 

2.                           Legal provisions, basis of preparation and other information, continued:

 

(b)                       Basis of consolidation:

 

(b.1)          These Interim Condensed Consolidated Financial Statements for the three-months period ended March 31, 2013 are presented based on the same accounting principles described in the Bank’s audited Consolidated Financial Statements at December 31, 2012 and for the year then ended (audited financial statements), and have been prepared according to the Compendium of Accounting Standards, Chapter C-2 issued by the Superintendency of Banks and Financial Institutions and the International Financial Reporting Standard N°34 (“IAS 34”) “Intermediate Financial Information”.

 

According to IAS 34, the intermediate financial information is prepared solely with the intention of updating the content of the last annual Consolidated Financial Statements, putting emphasis on the new activities, events and circumstances occurred during the nine-month period after period end and not duplicating the previous published information in the last Consolidated Financial Statements. Consequently, the Interim Consolidated  Financial Statements do not include all the complete information and notes required for the complete Consolidated Financial statements according to the International Accounting Standards and International Financial Information issued by the IASB, reason by which for a suitable understanding of the information that is included in these Interim Condensed Consolidated Financial Statements, they must be read along with the annual Consolidated Financial statements of Banco de Chile, corresponding to the year  ended December 31, 2012.

 

(b.2)            The following table details the entities in which the Bank —directly or indirectly— owns a controlling interest and that are therefore consolidated in these financial statements:

 

 

 

 

 

 

 

 

 

Interest Owned

 

 

 

 

 

 

 

 

 

Direct

 

Indirect

 

Total

 

 

 

 

 

 

 

Functional

 

March

 

March

 

March

 

March

 

March

 

March

 

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

 

99.75

 

0.25

 

0.25

 

100.00

 

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

 

 

9



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued

 


 

2.                          Legal provisions, basis of preparation and other information, continued:

 

(c)   Use of estimates and judgment

 

Preparing financial statements requires management to make judgments, estimations and assumptions that affect the application of accounting policies and the valuation of assets, liabilities, income and expenses presented. Real results could differ from these estimated amounts.  Details on the use of estimates and judgment and their effect on the amounts recognized in the Interim Condensed Consolidated Financial Statement are included in the following notes:

 

1.         Goodwill valuation (Note 15);

2.         Useful lives of property and equipment and intangible assets (Notes 15 y 16);

3.         Income taxes and deferred taxes (Note 17);

4.         Provisions (Note 24);

5.         Commitments and contingencies (Note 26);

6.         Provision for loan losses (Note 32);

7.         Impairment of other financial assets (Note 35);

8.         Fair value of financial assets and liabilities (Note 39).

 

During the three month period ended March 31, 2013 there have been no significant changes to estimations made when preparing the Bank’s 2012 Annual Consolidated Financial Statements, other than those indicated in these Interim Condensed Consolidated Financial Statements.

 

(d)   Comparison of the Information:

 

The information contained in these financial statements corresponding to year 2012 is presented, unique and exclusively, to compare with the information regarding the period of three month ended March 31, 2013.

 

(e)   Seasonality or Cyclical Character of the Transactions of the Intermediate Period:

 

Due to the nature of its business, the Bank and its subsidiaries’ activities do not have a cyclical or seasonal character. Accordingly, no specific details have been included on the notes to this Interim Condensed Consolidated Financial Statements with the information regarding the period of three month ended March 31, 2013.

 

(f)    Relative Importance:

 

When determining the information to present on the different items from the financial statements or other subjects, in accordance with IAS 34, the Bank has considered the relative importance in relation to the Interim Condensed Consolidated financial statements of the period.

 

10



Table of Contents

 

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) but which have not come into effect as of March 31, 2013, as per the following detail:

 

IAS 32 Financial Instruments: Presentation

 

The amendments issued in December 2011, clarify the meaning of “currently has a legally enforceable right to set-off”. The amendments also clarify the application of the IAS 32 offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous.  The standard is effective for annual periods beginning on or after January 1, 2014 and early adoption is permitted.

 

According to current rules about netting force in Chile, this rule has no impact on the consolidated financial statements of Banco de Chile and its subsidiaries.

 

IFRS 9 Financial Instruments: Financial liabilities

 

In October, 2010, the IASB published the requirements for classifying and measuring financial liabilities were added to IFRS 9.  Most of the added requirements were carried forward unchanged from IAS 39.  However, the requirements related to the fair value option for financial liabilities were changed to address the issue of own credit risk in response to consistent feedback from users of financial statements and others that the effects of changes in a liability’s credit risk ought not to affect profit or loss unless the liability is held for trading.

 

The mandatory effective date to annual periods beginning on or after January 1, 2015.

 

11



Table of Contents

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued

 


 

3.                            New Accounting Pronouncements, continued:

 

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 entity’s 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 prospectively that the entity makes reclassifications of financial assets when the entity modifies the business model.

 

Under IFRS 9, all investments of variable rent were measured for its fair value. However, the Management has the option of present directly the variations of fair value in equity in the item “Other Comprehensive Income”. This designation is available for the initial recognize of an instruments and is irrevocable. The unrealized income (loss) recognized in “Other Comprehensive Income”, from the variations of fair value shall be not included in income statements.

 

IFRS 9 is effective for annual periods commencing as of January 1, 2015, and allows adoption prior to that date.  IFRS 9 must be applied retroactively, however if it is adopted before January 1, 2012, there is no need to reformulate comparative periods.

 

Banco de Chile and its subsidiaries are assessing the possible impact of adoption of these changes on the consolidated financial statements, however, that impact will depend on the assets maintained by the institution as of the adoption date.  It is not practicable to quantify the effect on the issuance of these consolidated financial statements.  To date, neither of these standards has been approved by the Superintendency of Banks, event that is required for their application.

 

12



Table of Contents

 

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

 

The Amendments to IFRS 10, IFRS 12 and IAS 27 introduce a definition of an investment entity and also introduce an exception for consolidate certain subsidiaries that form part of an investment entity. An investment entity must also evaluate the performance of its investments on a fair value basis, recognizing changes on results according to IFRS 9.

 

Amendments also introduce new requirements of information to disclose, referred to investment entities on IFRS 12 and IAS 27.

 

If an entity applies this 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.

 

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.

 

Until 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 to 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.

 

13



Table of Contents

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued

 


 

4.                   Changes in Accounting Policies and Disclosures:

 

During the period ended March 31, 2013, have not occurred significant accounting changes that affect the presentation of consolidated financial statements.

 

5.                   Relevant Events:

 

(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, 2013, 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.:

 

ii)                           Collection and Data Administration Agreement.

iii)                        Use Agreement for Distribution Channels.

iv)                       Banchile’s Trademark License Agreement.

v)                          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 a 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 N° 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 N°1730-02-130117 held today, agreed and determined, in accordance with article 30 letter b) of Law N°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:

 

“The price of the subscription option, hereinafter the “Option Price”, shall correspond to the higher value between $0.1 and the value resulting from the difference obtained after multiplying

 

14



Table of Contents

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued

 


 

5.                                     Relevant Events, continued:

 

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 $62.0920.

 

For these purposes, the “Weighted Average Share Price” shall be 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 $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 $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 correspond to $7.5 for each Banco de Chile´s share, as long as the Weighted Average Share Price, determined as described before, does not exceed $76.9 nor be less than $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 Bank’s 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 N° 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 shall be previously 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 $ 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.

 

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 $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.

 

In the Ordinary and Extraordinary Banco de Chile’s meetings held on March 21, 2013 was agree to comply de previous agreements.

 

15



Table of Contents

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued

 


 

5.                                      Relevant Events, continued:

 

(d)         On March 21, 2013 Banco de Chile inform 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 died Mr. Guillermo Luksic C., important member of our Board since 2001 and member of controlling group of our Bank.

 

(g)          According to Note 27 (a) as of March 31, 2013 it was subscribed the total shares of increase capital authorized in the Extraordinary Shareholders Meeting held on October 17, 2012.  As of March 31, 2013 are 92,696 shares pending to payment.

 

16



Table of Contents

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued

 


 

6.                   Segment Reporting:

 

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 70,000UF, 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 70,000UF, 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 Bank’s 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 Factoring S.A.

·  Banchile Corredores de Bolsa S.A.

·  Banchile Securitizadora S.A.

·  Socofin S.A.

·  Promarket S.A.

 

17



Table of Contents

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued

 


 

6.                           Segment Reporting, continued:

 

The financial information used to measure the performance of the Bank’s 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 Bank’s operating segment information are similar as those described in “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 Bank’s 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% or more of its total income during the three-month period ended March 31, 2013 and 2012.

 

Transfer pricing between operating segments are on an arm’s 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.

 

18



Table of Contents

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued

 


 

6.                            Segment Reporting, continued:

 

The following table presents the information by segment for the periods ended March 31, 2013 and 2012 for each of the segments defined above:

 

 

 

Retail

 

Wholesale

 

Treasury

 

Subsidiaries

 

Subtotal

 

Adjustment (*)

 

Total

 

 

 

March

 

March

 

March

 

March

 

March

 

March

 

March

 

March

 

March

 

March

 

March

 

March

 

March

 

March

 

 

 

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$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

172,476

 

163,398

 

66,249

 

66,135

 

1,395

 

10,337

 

1,584

 

1,114

 

241,704

 

240,984

 

2,756

 

3,371

 

244,460

 

244,355

 

Net fees and commissions income (loss)

 

44,757

 

44,333

 

10,066

 

8,812

 

(67

)

(131

)

24,992

 

24,447

 

79,748

 

77,461

 

(2,780

)

(2,195

)

76,968

 

75,266

 

Other operating income

 

4,234

 

5,700

 

8,645

 

7,144

 

3,639

 

1,858

 

9,621

 

7,423

 

26,139

 

22,125

 

(3,417

)

(4,026

)

22,722

 

18,099

 

Total operating revenue

 

221,467

 

213,431

 

84,960

 

82,091

 

4,967

 

12,064

 

36,197

 

32,984

 

347,591

 

340,570

 

(3,441

)

(2,850

)

344,150

 

337,720

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provisions for loan losses

 

(51,878

)

(46,935

)

2,248

 

(441

)

 

374

 

(213

)

52

 

(49,843

)

(46,950

)

 

 

(49,843

)

(46,950

)

Depreciation and amortization

 

(5,184

)

(5,327

)

(1,446

)

(1,896

)

(139

)

(132

)

(432

)

(365

)

(7,201

)

(7,720

)

 

 

(7,201

)

(7,720

)

Other operating expenses

 

(99,602

)

(99,003

)

(26,517

)

(29,254

)

(1,554

)

(1,379

)

(23,155

)

(20,844

)

(150,828

)

(150,480

)

3,441

 

2,850

 

(147,387

)

(147,630

)

Income attributable to associates

 

472

 

385

 

108

 

177

 

11

 

13

 

17

 

15

 

608

 

590

 

 

 

608

 

590

 

Income before income taxes

 

65,275

 

62,551

 

59,353

 

50,677

 

3,285

 

10,940

 

12,414

 

11,842

 

140,327

 

136,010

 

 

 

140,327

 

136,010

 

Income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,857

)

(14,849

)

Income after income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

121,470

 

121,161

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

9,864,246

 

8,861,180

 

9,669,674

 

9,388,447

 

3,731,439

 

3,112,230

 

1,109,082

 

1,147,974

 

24,374,441

 

22,509,831

 

(676,466

)

(668,781

)

23,697,975

 

21,841,050

 

Current and deferred taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

127,771

 

114,591

 

Total assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23,825,746

 

21,955,641

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

7,504,295

 

6,639,249

 

9,126,483

 

8,865,354

 

4,753,406

 

4,360,228

 

914,835

 

961,840

 

22,299,019

 

20,826,671

 

(676,466

)

(668,781

)

21,622,553

 

20,157,890

 

Current and deferred taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

58,111

 

31,164

 

Total liabilities