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 October, 2015
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 as of September 30, 2015.
BANCO DE CHILE AND SUBSIDIARIES
|
Interim Condensed Consolidated Statements of Financial Position | |||
|
Interim Condensed Consolidated Statements of Comprehensive Income for the Period | |||
|
Interim Condensed Consolidated Statements of Other Comprehensive Income for the Period | |||
|
Interim Condensed Consolidated Statements of Changes in Equity | |||
|
||||
|
Notes to the Interim Condensed Consolidated Financial Statements | |||
|
|
|
|
|
|
|
MCh$ |
= |
Millions of Chilean pesos |
|
|
ThUS$ |
= |
Thousands of U.S. dollars |
|
|
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 months inflation rate). |
|
|
Ch$ or CLP |
= |
Chilean pesos |
|
|
US$ or USD |
= |
U.S. dollars |
|
|
JPY |
= |
Japanese yen |
|
|
EUR |
= |
Euro |
|
|
MXN |
= |
Mexican pesos |
|
|
HKD |
= |
Hong Kong dollars |
|
|
PEN |
= |
Peruvian nuevo sol |
|
|
CHF |
= |
Swiss franc |
|
|
|
|
|
|
|
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 |
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 | ||
7 | |||
8 | |||
Legal provisions, basis of preparation and other information: |
8 | ||
11 | |||
15 | |||
16 | |||
19 | |||
22 | |||
23 | |||
Cash collateral on securities borrowed and reverse repurchase agreements: |
24 | ||
26 | |||
31 | |||
32 | |||
38 | |||
40 | |||
42 | |||
45 | |||
48 | |||
53 | |||
54 | |||
54 | |||
55 | |||
56 | |||
61 | |||
61 | |||
65 | |||
66 | |||
72 | |||
76 | |||
78 | |||
78 | |||
79 | |||
80 | |||
81 | |||
82 | |||
83 | |||
84 | |||
85 | |||
86 | |||
92 | |||
106 | |||
108 | |||
BANCO DE CHILE AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
For the periods ended September 30, 2015 and December 31, 2014
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
|
|
|
|
September |
|
December |
|
|
|
Notes |
|
MCh$ |
|
MCh$ |
|
ASSETS |
|
|
|
|
|
|
|
Cash and due from banks |
|
7 |
|
982,340 |
|
915,133 |
|
Transactions in the course of collection |
|
7 |
|
579,892 |
|
400,081 |
|
Financial assets held-for-trading |
|
8 |
|
570,562 |
|
548,471 |
|
Cash collateral on securities borrowed and reverse repurchase agreements |
|
9 |
|
36,890 |
|
27,661 |
|
Derivative instruments |
|
10 |
|
1,416,203 |
|
832,193 |
|
Loans and advances to banks |
|
11 |
|
1,563,739 |
|
1,155,365 |
|
Loans to customers, net |
|
12 |
|
23,446,019 |
|
21,348,033 |
|
Financial assets available-for-sale |
|
13 |
|
1,241,722 |
|
1,600,189 |
|
Financial assets held-to-maturity |
|
13 |
|
|
|
|
|
Investments in other companies |
|
14 |
|
27,570 |
|
25,312 |
|
Intangible assets |
|
15 |
|
25,984 |
|
26,593 |
|
Property and equipment |
|
16 |
|
212,585 |
|
205,403 |
|
Current tax assets |
|
17 |
|
3,104 |
|
3,468 |
|
Deferred tax assets |
|
17 |
|
238,524 |
|
202,869 |
|
Other assets |
|
18 |
|
476,732 |
|
355,057 |
|
TOTAL ASSETS |
|
|
|
30,821,866 |
|
27,645,828 |
|
LIABILITIES |
|
|
|
|
|
|
|
Current accounts and other demand deposits |
|
19 |
|
7,292,658 |
|
6,933,679 |
|
Transactions in the course of payment |
|
7 |
|
386,559 |
|
96,945 |
|
Cash collateral on securities lent and repurchase agreements |
|
9 |
|
267,548 |
|
249,482 |
|
Savings accounts and time deposits |
|
20 |
|
10,308,250 |
|
9,721,246 |
|
Derivative instruments |
|
10 |
|
1,344,472 |
|
859,752 |
|
Borrowings from financial institutions |
|
21 |
|
1,569,095 |
|
1,098,716 |
|
Debt issued |
|
22 |
|
5,978,984 |
|
5,057,956 |
|
Other financial obligations |
|
23 |
|
153,508 |
|
186,573 |
|
Current tax liabilities |
|
17 |
|
23,048 |
|
22,498 |
|
Deferred tax liabilities |
|
17 |
|
33,391 |
|
35,029 |
|
Provisions |
|
24 |
|
545,465 |
|
601,714 |
|
Other liabilities |
|
25 |
|
251,069 |
|
247,082 |
|
TOTAL LIABILITIES |
|
|
|
28,154,047 |
|
25,110,672 |
|
|
|
|
|
|
|
|
|
EQUITY |
|
27 |
|
|
|
|
|
Attributable to Banks Owners: |
|
|
|
|
|
|
|
Capital |
|
|
|
2,041,173 |
|
1,944,920 |
|
Reserves |
|
|
|
390,640 |
|
263,258 |
|
Other comprehensive income |
|
|
|
42,870 |
|
44,105 |
|
Retained earnings: |
|
|
|
|
|
|
|
Retained earnings from previous periods |
|
|
|
16,060 |
|
16,379 |
|
Income for the period |
|
|
|
418,897 |
|
591,080 |
|
Less: |
|
|
|
|
|
|
|
Provision for minimum dividends |
|
|
|
(241,823 |
) |
(324,588 |
) |
Subtotal |
|
|
|
2,667,817 |
|
2,535,154 |
|
Non-controlling interests |
|
|
|
2 |
|
2 |
|
TOTAL EQUITY |
|
|
|
2,667,819 |
|
2,535,156 |
|
TOTAL LIABILITIES AND EQUITY |
|
|
|
30,821,866 |
|
27,645,828 |
|
The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE PERIOD
For the nine-month ended September 30, 2015 and 2014
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
|
|
|
|
|
September |
|
September |
| |
|
|
|
Notes |
|
MCh$ |
|
MCh$ |
| |
A, |
CONSOLIDATED STATEMENT OF INCOME |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| ||
|
Interest revenue |
|
28 |
|
1,396,266 |
|
1,480,538 |
| |
|
Interest expense |
|
28 |
|
(489,714 |
) |
(577,679 |
) | |
|
Net interest income |
|
|
|
906,552 |
|
902,859 |
| |
|
|
|
|
|
|
|
|
| |
|
Income from fees and commissions |
|
29 |
|
320,520 |
|
286,153 |
| |
|
Expenses from fees and commissions |
|
29 |
|
(97,361 |
) |
(85,663 |
) | |
|
Net fees and commission income |
|
|
|
223,159 |
|
200,490 |
| |
|
|
|
|
|
|
|
|
| |
|
Net financial operating income |
|
30 |
|
36,923 |
|
23,551 |
| |
|
Foreign exchange transactions, net |
|
31 |
|
44,598 |
|
61,561 |
| |
|
Other operating income |
|
36 |
|
20,742 |
|
17,488 |
| |
|
Total operating revenues |
|
|
|
1,231,974 |
|
1,205,949 |
| |
|
|
|
|
|
|
|
|
| |
|
Provisions for loan losses |
|
32 |
|
(229,051 |
) |
(210,362 |
) | |
|
|
|
|
|
|
|
|
| |
|
OPERATING REVENUES, NET OF PROVISIONS FOR LOAN LOSSES |
|
|
|
1,002,923 |
|
995,587 |
| |
|
|
|
|
|
|
|
|
| |
|
Personnel expenses |
|
33 |
|
(278,386 |
) |
(255,519 |
) | |
|
Administrative expenses |
|
34 |
|
(214,171 |
) |
(201,230 |
) | |
|
Depreciation and amortization |
|
35 |
|
(21,999 |
) |
(20,897 |
) | |
|
Impairment |
|
35 |
|
(144 |
) |
(1,771 |
) | |
|
Other operating expenses |
|
37 |
|
(23,591 |
) |
(18,402 |
) | |
|
|
|
|
|
|
|
|
| |
|
TOTAL OPERATING EXPENSES |
|
|
|
(538,291 |
) |
(497,819 |
) | |
|
|
|
|
|
|
|
|
| |
|
NET OPERATING INCOME |
|
|
|
464,632 |
|
497,768 |
| |
|
|
|
|
|
|
|
|
| |
|
Income attributable to associates |
|
14 |
|
2,705 |
|
1,927 |
| |
|
Income before income tax |
|
|
|
467,337 |
|
499,695 |
| |
|
|
|
|
|
|
|
|
| |
|
Income tax |
|
17 |
|
(48,439 |
) |
(36,747 |
) | |
|
|
|
|
|
|
|
|
| |
|
NET INCOME FOR THE PERIOD |
|
|
|
418,898 |
|
462,948 |
| |
|
Attributable to: |
|
|
|
|
|
|
| |
|
Banks Owners |
|
|
|
418,897 |
|
462,947 |
| |
|
Non-controlling interests |
|
|
|
1 |
|
1 |
| |
|
|
|
|
Ch$ |
|
Ch$ |
| |
|
Net income per share attributable to Banks Owners: |
|
|
|
|
|
|
|
|
Basic net income per share |
|
27 |
|
4.36 |
|
4.82 |
|
|
Diluted net income per share |
|
27 |
|
4.36 |
|
4.82 |
|
The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE PERIOD
For the nine-month ended September 30, 2015 and 2014
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
|
|
|
|
September |
|
September |
|
|
|
Notes |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
NET INCOME FOR THE YEAR |
|
|
|
418,898 |
|
462,948 |
|
|
|
|
|
|
|
|
|
Other comprehensive income that will be reclassified subsequently to profit or loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains (losses): |
|
|
|
|
|
|
|
Net change in unrealized gains (losses) on available for sale instruments |
|
13 |
|
3,527 |
|
7,589 |
|
Gains and losses on derivatives held as cash flow hedges |
|
10 |
|
(5,122 |
) |
(5,446 |
) |
Cumulative translation adjustment |
|
|
|
1 |
|
79 |
|
Subtotal Other comprehensive income before income taxes |
|
|
|
(1,594 |
) |
2,222 |
|
|
|
|
|
|
|
|
|
Income tax |
|
|
|
359 |
|
(1,381 |
) |
|
|
|
|
|
|
|
|
Total other comprehensive income items that will be reclassified subsequently to profit or loss |
|
|
|
(1,235 |
) |
841 |
|
|
|
|
|
|
|
|
|
Other comprehensive income that will not be reclassified subsequently to profit or loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss in defined benefit plans |
|
|
|
|
|
(290 |
) |
|
|
|
|
|
|
|
|
Subtotal other comprehensive income before income taxes |
|
|
|
|
|
(290 |
) |
|
|
|
|
|
|
|
|
Income taxes |
|
|
|
|
|
75 |
|
|
|
|
|
|
|
|
|
Total other comprehensive income items that will not be reclassified subsequently to profit or loss |
|
|
|
|
|
(215 |
) |
|
|
|
|
|
|
|
|
TOTAL CONSOLIDATED COMPREHENSIVE INCOME |
|
|
|
417,663 |
|
463,574 |
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
Equity holders of the parent |
|
|
|
417,662 |
|
463,573 |
|
Non-controlling interest |
|
|
|
1 |
|
1 |
|
|
|
Ch$ |
|
Ch$ |
|
Comprehensive net income per share from continued operations attributable to equity holders of the parent: |
|
|
|
|
|
Basic net income per share |
|
4.34 |
|
4.82 |
|
Diluted net income per share |
|
4.34 |
|
4.82 |
|
The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the nine-month ended September 30, 2015 and 2014
(Translation of financial statements originally issued in Spanish)
(Expressed in millions of Chilean pesos)
|
|
|
|
|
|
Reserves |
|
Other comprehensive income |
|
Retained earnings |
|
|
|
|
|
|
| ||||||||||
|
|
|
|
Paid-in |
|
Other |
|
Reserves |
|
Unrealized |
|
Derivatives |
|
Cumulative |
|
Retained |
|
Income for the |
|
Provision for |
|
Attributable |
|
Non- |
|
Total equity |
|
|
|
Notes |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
Capitalization of retained earnings |
|
27 |
|
95,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(95,569 |
) |
|
|
|
|
|
|
|
|
Income retention (released) according to law |
|
27 |
|
|
|
|
|
49,913 |
|
|
|
|
|
|
|
|
|
(49,913 |
) |
|
|
|
|
|
|
|
|
Dividends distributions and paid |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(368,120 |
) |
324,582 |
|
(43,538 |
) |
(1 |
) |
(43,539 |
) |
Equity adjustment investment in other companies |
|
|
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
4 |
|
Defined benefit plans adjustment |
|
|
|
|
|
(215 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(215 |
) |
|
|
(215 |
) |
Other comprehensive income: |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative translation adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
79 |
|
|
|
|
|
|
|
79 |
|
|
|
79 |
|
Derivatives cash flow hedge, net |
|
|
|
|
|
|
|
|
|
|
|
(4,302 |
) |
|
|
|
|
|
|
|
|
(4,302 |
) |
|
|
(4,302 |
) |
Valuation adjustment on available-for-sale instruments (net) |
|
|
|
|
|
|
|
|
|
5,064 |
|
|
|
|
|
|
|
|
|
|
|
5,064 |
|
|
|
5,064 |
|
Income for the period 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
462,947 |
|
|
|
462,947 |
|
1 |
|
462,948 |
|
Provision for minimum dividends |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(266,044 |
) |
(266,044 |
) |
|
|
(266,044 |
) |
Balances as of September 30, 2014 |
|
|
|
1,944,920 |
|
31,914 |
|
231,424 |
|
34,436 |
|
(17,723 |
) |
56 |
|
16,379 |
|
462,947 |
|
(266,044 |
) |
2,438,309 |
|
2 |
|
2,438,311 |
|
Defined benefit plans adjustment |
|
|
|
|
|
(81 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(81 |
) |
|
|
(81 |
) |
Equity adjustment investment in other companies |
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
1 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative translation adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
1 |
|
|
|
1 |
|
Cash flow hedge adjustment, net |
|
|
|
|
|
|
|
|
|
|
|
27,809 |
|
|
|
|
|
|
|
|
|
27,809 |
|
|
|
27,809 |
|
Valuation adjustment on available-for-sale instruments, net |
|
|
|
|
|
|
|
|
|
(474 |
) |
|
|
|
|
|
|
|
|
|
|
(474 |
) |
|
|
(474 |
) |
Income for the period 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
128,133 |
|
|
|
128,133 |
|
|
|
128,133 |
|
Provision for minimum dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(58,544 |
) |
(58,544 |
) |
|
|
(58,544 |
) |
Balances as of December 31, 2014 |
|
|
|
1,944,920 |
|
31,834 |
|
231,424 |
|
33,962 |
|
10,086 |
|
57 |
|
16,379 |
|
591,080 |
|
(324,588 |
) |
2,535,154 |
|
2 |
|
2,535,156 |
|
Capitalization of retained earnings |
|
27 |
|
96,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(96,253 |
) |
|
|
|
|
|
|
|
|
Retention (released) earnings |
|
27 |
|
|
|
|
|
127,383 |
|
|
|
|
|
|
|
|
|
(127,383 |
) |
|
|
|
|
|
|
|
|
Dividends distributions and paid |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(367,444 |
) |
324,588 |
|
(42,856 |
) |
(1 |
) |
(42,857 |
) |
Definedvest benefit plans adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital increase investment in other companies |
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
|
|
(1 |
) |
Other comprehensive income: |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative translation adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
1 |
|
|
|
1 |
|
Cash flow hedge adjustment, net |
|
|
|
|
|
|
|
|
|
|
|
(3,970 |
) |
|
|
|
|
|
|
|
|
(3,970 |
) |
|
|
(3,970 |
) |
Valuation adjustment on available-for-sale instruments (net) |
|
|
|
|
|
|
|
|
|
2,734 |
|
|
|
|
|
|
|
|
|
|
|
2,734 |
|
|
|
2,734 |
|
Income for the period 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
418,897 |
|
|
|
418,897 |
|
1 |
|
418,898 |
|
Equity adjustment investment in other companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(319 |
) |
|
|
|
|
(319 |
) |
|
|
(319 |
) |
Provision for minimum dividends |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(241,823 |
) |
(241,823 |
) |
|
|
(241,823 |
) |
Balances as of September 30, 2015 |
|
|
|
2,041,173 |
|
31,833 |
|
358,807 |
|
36,696 |
|
6,116 |
|
58 |
|
16,060 |
|
418,897 |
|
(241,823 |
) |
2,667,817 |
|
2 |
|
2,667,819 |
|
The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine-month ended September 30, 2015 and 2014
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
|
|
|
|
September |
|
September |
|
|
|
Notes |
|
MCh$ |
|
MCh$ |
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
Net income for the period |
|
|
|
418,898 |
|
462,948 |
|
Items that do not represent cash flows: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
35 |
|
21,999 |
|
20,897 |
|
Impairment of intangible assets and property and equipment |
|
35 |
|
144 |
|
1,771 |
|
Provision for loan losses |
|
32 |
|
232,686 |
|
227,938 |
|
Provision of contingent loans |
|
32 |
|
5,055 |
|
4,111 |
|
Fair value adjustment of financial assets held-for-trading |
|
|
|
215 |
|
467 |
|
Income attributable to investments in other companies |
|
14 |
|
(2,337 |
) |
(1,609 |
) |
Income from sales of assets received in lieu of payment |
|
36 |
|
(2,568 |
) |
(2,450 |
) |
Net gain on sales of property and equipment |
|
36-37 |
|
(124 |
) |
(82 |
) |
(Increase) decrease in other assets and liabilities |
|
|
|
(216,911 |
) |
(80,895 |
) |
Charge-offs of assets received in lieu of payment |
|
37 |
|
1,220 |
|
1,231 |
|
Other charges (credits) to income that do not represent cash flows |
|
|
|
30,048 |
|
10,064 |
|
(Gain) loss from foreign exchange transactions of other assets and other liabilities |
|
|
|
(519,370 |
) |
(183,601 |
) |
Net changes in interest and fee accruals |
|
|
|
178,213 |
|
(40,580 |
) |
Changes in assets and liabilities that affect operating cash flows: |
|
|
|
|
|
|
|
(Increase) decrease in loans and advances to banks, net |
|
|
|
(406,619 |
) |
384,944 |
|
(Increase) decrease in loans to customers |
|
|
|
(2,202,521 |
) |
(492,848 |
) |
(Increase) decrease in financial assets held-for-trading, net |
|
|
|
57,098 |
|
23,628 |
|
(Increase) decrease in deferred taxes, net |
|
17 |
|
(37,985 |
) |
(36,211 |
) |
(Increase) decrease in current account and other demand deposits |
|
|
|
357,618 |
|
360,826 |
|
(Increase) decrease in payables from repurchase agreements and security lending |
|
|
|
21,018 |
|
(10,771 |
) |
(Increase) decrease in savings accounts and time deposits |
|
|
|
601,165 |
|
(814,068 |
) |
Proceeds from sale of assets received in lieu of payment |
|
|
|
5,775 |
|
4,362 |
|
Total cash flows from operating activities |
|
|
|
(1,457,283 |
) |
(159,928 |
) |
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
(Increase) decrease in financial assets available-for-sale, net |
|
|
|
98,172 |
|
321,738 |
|
Purchases of property and equipment |
|
16 |
|
(23,098 |
) |
(21,807 |
) |
Proceeds from sales of property and equipment |
|
|
|
191 |
|
122 |
|
Purchases of intangible assets |
|
15 |
|
(5,751 |
) |
(3,263 |
) |
Investments in other companies |
|
14 |
|
(314 |
) |
(6,608 |
) |
Dividends received from investments in other companies |
|
14 |
|
632 |
|
195 |
|
Total cash flows from investing activities |
|
|
|
69,832 |
|
290,377 |
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
Repayment of mortgage finance bonds |
|
|
|
(10,248 |
) |
(13,107 |
) |
Proceeds from bond issuances |
|
22 |
|
1,839,964 |
|
1,580,224 |
|
Redemption of bond issuances |
|
|
|
(788,049 |
) |
(839,362 |
) |
Proceeds from subscription and payment of shares |
|
|
|
|
|
|
|
Dividends paid |
|
27 |
|
(367,444 |
) |
(368,120 |
) |
(Increase) decrease in borrowings from financial institutions |
|
|
|
(45,226 |
) |
(50,524 |
) |
(Increase) decrease in other financial obligations |
|
|
|
(31,205 |
) |
(23,896 |
) |
(Increase) decrease in borrowings from Central Bank of Chile |
|
|
|
|
|
|
|
Borrowings from Central Bank of Chile (long-term) |
|
|
|
28 |
|
18 |
|
Payment of borrowings from Central Bank of Chile (long-term) |
|
|
|
(30 |
) |
(19 |
) |
Long-term foreign borrowings |
|
|
|
1,904,913 |
|
623,695 |
|
Payment of long-term foreign borrowings |
|
|
|
(1,389,885 |
) |
(758,143 |
) |
Proceeds from other long-term borrowings |
|
|
|
13,764 |
|
6,669 |
|
Payment of other long-term borrowings |
|
|
|
(16,255 |
) |
(10,927 |
) |
Total cash flows from financing activities |
|
|
|
1,110,327 |
|
146,508 |
|
TOTAL NET POSITIVE CASH FLOWS FOR THE PERIOD |
|
|
|
(277,124 |
) |
276,957 |
|
Net effect of exchange rate changes on cash and cash equivalents |
|
|
|
67,539 |
|
33,538 |
|
Cash and cash equivalents at beginning of year |
|
|
|
1,825,578 |
|
1,538,618 |
|
Cash and cash equivalents at end of period |
|
7 |
|
1,615,993 |
|
1,849,113 |
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
Cash paid during the year for: |
|
|
|
|
|
|
|
Interest received |
|
|
|
1,255,570 |
|
1,273,145 |
|
Interest paid |
|
|
|
(170,805 |
) |
(410,866 |
) |
The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
Banco de Chile is authorized to operate like a commercial bank since June 17, 1996, in conformity with the Article 25 of Law No, 19,396. 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 or Superintendency). 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 address is Paseo Ahumada 251, Santiago, Chile and its website is www.bancochile.cl.
The Interim Condensed Consolidated Financial Statements of Banco de Chile, for the period ended September 30, 2015 were approved for issuance in accordance with the directors on October 22, 2015.
2. Legal provisions, basis of preparation and other information:
(a) 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 (Compendium), 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Legal provisions, basis of preparation and other information, continued:
(b) Basis of preparation:
(b.1) These Interim Condensed Consolidated Financial Statements are presented according to Chapter C-2 of the Compendium of Accounting Standards, issued by the Superintendency of Banks and Financial Institutions (SBIF).
(b.2) The following table details the entities in which the Bank has controlling interest and that are therefore consolidated in these financial statements:
|
|
|
|
|
|
|
|
Interest Owned |
| ||||||||||
|
|
|
|
|
|
|
|
Direct |
|
Indirect |
|
Total |
| ||||||
|
|
|
|
|
|
Functional |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
RUT |
|
Subsidiaries |
|
Country |
|
Currency |
|
% |
|
% |
|
% |
|
% |
|
% |
|
% |
|
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 |
|
96,571,220-8 |
|
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$ |
|
99.01 |
|
99.00 |
|
0.99 |
|
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 |
|
(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 No. 15);
2. Useful lives of property and equipment and intangible assets (Notes No.15 and No.16);
3. Income 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, No. 12 and No. 32);
7. Impairment of other financial assets (Note No. 35);
8. Fair value of financial assets and liabilities (Note No. 39).
Estimates and relevant assumptions are regularly reviewed by the management of the Bank, according to quantify certain assets, liabilities, gains, loss and commitments. Estimates reviewed are registered in income in the period that the estimate is reviewed.
During the period of September 30, 2015, there have not been significant changes in the estimates.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Legal provisions, basis of preparation and other information, continued:
(d) 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 nine-month ended September 30, 2015.
(e) Relative Importance:
When determining the information to present on the different items from the financial statements or other subjects, the Bank has considered the relative importance in relation to the Interim Condensed Consolidated financial statements of the period.
(f) Reclassifications:
There have not been significant reclassifications at the end of this period 2015.
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 September 30, 2015:
IFRS 9 Financial Instruments
The July 24, 2014, IASB completed its upgrade project about accounting for financial instruments with the publication of IFRS 9 Financial Instruments.
This standard includes new requirements based on new principles for the classification and measurement; it introduces a prospective model of expected credit losses on impairment accounting and changes in hedge accounting.
Classification and measurement
The classification determines how financial assets and liabilities are accounted in financial statements and, in particular, how they are measured. IFRS 9 introduces a new approach for classification of financial assets, based in the business model of the entity for the management of financial assets and the characteristic of its contractual flows. The new model also results in a single impairment model being applied to all financial instruments, removing a source of complexity associated with previous accounting requirements.
Impairment
The IASB has introduced a new impairment model that will require a timely recognition of expected credit losses.
Hedge Accounting
IFRS 9 introduces a new model for hedge accounting with enhanced disclosures about risk management activity. The new model represents a substantial overhaul of hedge accounting that aligns the accounting treatment with risk management activities, enabling entities to better reflect these activities in their financial statements. In addition, as a result of these changes, users of the financial statements will be provided with better information about risk management and the effect of hedge accounting on the financial statements.
Entitys Own Credit Risk
IFRS 9 removes the volatility in profit or loss originated by changes in the credit risk of designated liabilities at fair value. This change means that the change in the fair value that corresponds to credit risk will be registered in other comprehensive income. IFRS 9 permits early application of this improvement, before any other requirement of IFRS 9.
The effective date is beginning on January 1, 2018 and its early application is permitted.
Banco de Chile and its subsidiaries are assessing the possible impact of adoption of these changes on the consolidated financial statements.
At the date, this rule has not been approved by the Superintendency of Banks and Financial Institutions, event required for its application.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
3. New Accounting Pronouncements, continued:
IFRS 11 Joint Arrangements
In May 2014 the IASB modified IFRS 11, providing guides about the accounting of acquisitions of participations in joint operations, whose activity constitute a business. This standard requires the acquirer of a participation in a joint operation, whose activities constitute a business, to apply all the principles on accounting for business combinations of the IFRS 3.
The effective date is beginning on January 1, 2016 and its early application is permitted.
Banco de Chile and its subsidiaries have assessed than this rule will be not significant impact in consolidated financial statements.
IAS 16 Property, plant and equipment and IAS 38 Intangible assets
In May 2014 the IASB modified IAS 16 and 38 with purpose of clarifying accepted methods of depreciation and amortization.
The amendment of IAS 16 prohibits property, plant and equipment, depreciation based on ordinary income.
The amendment of IAS 38 introduces the presumption that ordinary income is not an appropriate base for the amortization of intangible assets. This presumption only is refuted in two circumstances: (a) intangible asset is expressed like a unit of ordinary income; and (b) ordinary income and consumption of intangible assets are highly correlated.
The effective date is beginning on January 1, 2016 and its early application is permitted.
This modification does not impact the consolidated financial statements of Banco de Chile and its subsidiaries, because it is not used as a basis of depreciation and amortization.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 was issued in May 2014. The objective is to establish the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer.
IFRS 15 replaces the following standards and interpretations: IAS 18 Revenue, IAS 11 Construction contracts, IFRIC 13 Customer loyalty programs, IFRIC 15 Agreements for the construction of real estate, IFRIC 18 Transfers of assets from customers and SIC 31 Revenue Barter transactions involving advertising services.
The new model will be applied to all contracts with customers except those contracts are within the scope of another standard.
Application of the standard is mandatory for annual reporting periods starting from January 1, 2018 onward, early application is permitted.
Banco de Chile and its subsidiaries are assessing the impact of this rule on its consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
3. New Accounting Pronouncements, continued:
IAS 27 Consolidated and Separated Financial Statements
In August 2014, the IASB published the amendment that will allow entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements.
The effective date is beginning on January 1, 2016 and its early application is permitted.
This amendment does not impact the consolidated financial statements of Banco de Chile and its subsidiaries.
IAS 28 Investments in Associates and Join Venture and IFRS 10 - Consolidated Financial Statements
In September 2014, the IASB issued this amendment, which clarifies the scope of recognized gains and losses in a transaction involving an associate or joint venture, and this depends on whether the asset sold or contribution is a business. Therefore, IASB concluded that all of the profit or loss should be recognized against loss of control of a business. Likewise, gains or losses resulting from the sale or contribution of a subsidiary that is not a business (definition of IFRS 3) to an associate or joint venture should be recognized only to the extent of unrelated interests in the associate or joint venture.
The effective date is beginning on January 1, 2016 and its early application is permitted.
This amendment does not impact the consolidated financial statements of Banco de Chile and its subsidiaries.
Annual improvements IFRS
In September 2014, the IASB issued Annual improvements to IFRS: 2012 2014 Cycle, which include changes to the following standards.
· IFRS 5 Non-current assets held for sale and discontinued operations
Add specific guidelines in cases in which an entity reclassifies an asset from held for sale to held for distribution, or vice versa and cases in which assets held for distribution are accounting like discontinued operations. The effective date is beginning on January 1, 2016 and its early application is permitted.
Banco de Chile and its subsidiaries do not register non-current assets held for sale and discontinued operations. Therefore, this modification does not impact the consolidated financial statements of Banco de Chile and its subsidiaries.
· IFRS 7 Financial Instruments: Disclosures
Add guidelines to clarify if a service contract corresponds to a continuing involvement in an asset transfer with the purpose to determine the required disclosures. The effective date is beginning on January 1, 2016 and its early application is permitted.
This amendment does not impact the consolidated financial statements of Banco de Chile and its subsidiaries.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
3. New Accounting Pronouncements, continued:
Annual improvements IFRS, continued:
· IAS 19 Employee Benefits. Discount rate: topic of the regional market
Clarifies that corporate bonds with high quality credit used in the estimation of the discount rate for post-employment benefits must be denominated in the same currency as the benefit paid. The effective date is beginning on January 1, 2016 and its early application is permitted.
This amendment does not impact the consolidated financial statements of Banco de Chile and its subsidiaries.
· IAS 34 Interim Financial Reporting
Clarifies the meaning of disclose information in some other part of interim financial information and the need for a cross-reference. The effective date is beginning on January 1, 2016 and its early application is permitted.
This amendment does not impact the consolidated financial statements of Banco de Chile and its subsidiaries.
· IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interest in Other Entities and IAS 28 Investments in Associates and Join Ventures
In December 2014, the IASB has modified IFRS 10, IFRS 12 and IAS 28 related with the application of the exceptions in the consolidation in investment entities.
The amendments clarify the requirement for the accounting of investment entities. In addition, these amendments in certain circumstances reduce the cost in the application of these standards.
The effective date is mandatory on January 1, 2016 and its early application is permitted.
This amendment does not impact the consolidated financial statements of Banco de Chile and its subsidiaries.
· IAS 1 Presentation of Financial Statements
In December, 2014, the IASB published Disclosure Initiative (Amendments to IAS 1). The amendments aim at clarifying IAS 1 to improve the presentation and disclosure of information in the financial reports.
These amendments answer requests about presentation and disclosure and have been designed with the finality to allow the entities to apply their professional opinion to determine what information must be disclosed in the financial statements.
They are effective for annual periods beginning on or after 1 January 2016, with earlier application being permitted.
This amendment does not significant impact in the consolidated financial statements of Banco de Chile and its subsidiaries.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
3. New Accounting Pronouncements, continued:
Rules issued by the Superintendency of Banks and Financial Institutions
On December 30, 2014 the Superintendency of Banks and Financial Institutions issued Circular No. 3,573, where established changes to the rules which regulate the determination of Allowances for loan losses, contained in the Chapter B-1 of Compendium of Accounting standards.
The summary of changes is the followings:
· Standard Method of Provisions for Mortgage Loans: It is established a standard method to constitute provisions of mortgage loans, which to consider the amount of past due and the relation between outstanding capital of the credit and the value of mortgage guarantee. This method establishes a different treatment to credits with state subsidies and state auction insurance. The effective date is beginning on January 2016.
· Replacing Issuer by Debtor in Factoring Operations: It modifies the instructions to calculate of provisions of factoring operations; permitting that certain conditions, it is considered debtor classification instead grantor for the establishment of provision.
· It complements the instruction related non-complying portfolio of portfolio with related to the compliance that the Board must give of adequacy of provisions, it established that, it must be to refer both, Consolidated and Individual Financial Statements, with its domestic and foreign subsidiaries, as appropriate. Individual evaluation, including certain conditions that must be complying to remove the credits of a debtor of that portfolio. Also, this instruction was incorporated to group portfolio. The copulative conditions to remove a debtor of this portfolio it must be the following conditions:
i. Any obligations of the debtor with the bank has left to comply at the time and in the amount that corresponded
ii. It has not delivered new funding to comply its obligations
iii. At least one of the payments made includes amortization of capital
iv. If the debtor had any credit with partial payments in periods less than six months (more than one payment)
v. If the debtor must be to pay monthly installments to one or more credits, it had paid at least six consecutive instalments
vi. The debtor has not direct debts in the information of this Superintendency
· Related to the Compliance that the Board must give of adequacy of provisions, it established that, it must be to refer both, Consolidated and Individual Financial Statements, with its domestic and foreign subsidiaries, as appropriate.
At the date of issuance of this Consolidated Financial Statements and with the available information, the Bank assesses that application of this rule has no significant impact in the income.
4. Changes in Accounting policies and Disclosures:
During the period ended September 30, 2015, there have been no accounting changes that may significantly affect these interim consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) On January 9, 2015 through Resolución Exenta No. 7 the Superintendency of Securities and Insurance approved the reform to the by-laws of Banchile Securitizadora S.A. related to a capital increase of Ch$240,000,000 by means of the issuance of 1,550 shares, as agreed in the fourth Extraordinary Shareholders Meeting of the company held on December 1, 2014. The capital increase was carried out on January 20, 2015.
(b) On January 26, 2015 the board of Banchile Administradora General de Fondos SA accepted the resignation of the director of the company Mr. Jorge Tagle Ovalle.
It was also agreed to appoint new director of the company, from the day January 26, 2015 until the next Annual Meeting, Don Eduardo Ebensperger Orrego.
(c) On January 29, 2015 and Ordinary Meeting No. BCH 2,811 the Board of Banco de Chile agreed to call an Ordinary Shareholders for the day March 26, 2015 for the purpose of proposing, among other things, the distribution Dividend No. 203 on $ 3.42915880220, to each of the 94,655,367,544 shares Banco de Chile, payable out of distributable net income for the year ended December 31, 2014, corresponding to 70% of such profits.
The Board also agreed to call an Extraordinary Shareholders for the same date in order to propose among other matters the capitalization of 30% of the distributable net profit of the Bank for the year 2014, by issuing bonus shares without nominal value, determined at a value of $ 65.31 per share Banco de Chile, distributed among the shareholders at the rate of 0.02250251855 shares for each share Banco de Chile and adopt the necessary arrangements subject to the exercise of the options provided Article 31 of Law No. 19,396.
(d) On March 23, 2015 the subsidiary Banchile Securitizadora S.A. informed that in ordinary meeting held on March 23, 2015 the Board of Directors accepted the resignation of the Director José Vial Cruz.
(e) On March 24, 2015 the subsidiary Banchile Securitizadora S.A. informed as an Essential Information that in the Tenth Ordinary Shareholders meeting proceeded to the total renovation of the Board of Directors of the society.
According to established in seventh and eighth articles of the bylaws, were elected as Directors for a period of three years, the following persons: Pablo Granifo Lavín, Arturo Tagle Quiroz, Eduardo Ebensperger Orrego, Alain Rochette García y José Miguel Quintana Malfanti.
(f) On March 30, 2015 it was reported that the Central Bank of Chile has informed the Bank of Chile that the Council of the Institution, Special Session No. 1894E on the same day, considering the resolutions adopted by the Shareholders Banco de Chile, held dated March 26, 2015, regarding the distribution of dividends and capital increase by issuing bonus shares by the share of 30% of profits for the year ended December 31 2014, decided to opt for the entire surplus that apply, including the part proportional to the agreed cap utility, will be paid in cash, in accordance with the provisions of subparagraph b) of Article 31 of Law 19,396, on modification of the payment of the subordinated obligation, and other applicable standards.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
5. Relevant Events, continued:
(g) The Board of Directors meeting held on April 9, 2015, it was resolved to accept the resignation of the Director Mr. Juan José Bruchou.
Also, the Board of Directors appointed Mr. Samuel Libnic as new Director until the next Ordinary Shareholders Meeting.
(h) On April 10, 2015 Mr. Samuel Libnic, Acting Director of subsidiary Banchile Corredores de Bolsa S.A. presented its resignation to the Board of Directors.
(i) On June 25, 2015 it was informed as Essential Information that, at the Board of Directors meeting was resolved to accept the resignation of the Director and Vice President of the Board Mr. Francisco Aristeguieta Silva.
Also, in the same meeting, the Board of Directors appointed Mrs. Jane Fraser as new Director and new Vice President of the Board, until the next Ordinary Shareholders Meeting.
(j) On July 6, 2015, according to the powers conferred by article 19 of the Chilean General Banking Act, the Superintendency of Banks and Financial Institutions imposed a fine of 2,000 (two thousand) Unidades de Fomento to Banco de Chile, in connection with the erroneous delivery to that Superintendency of file D33 contained in the Information System Manual of the Debtors System (Sistema de Deudores del Manual de Sistemas de Información), in which a number of credit lines and overdraft in current account operations corresponding to December 2014 and month before, were omitted.
(k) On July 10, 2015 Banco de Chile inform that, on July 3, 2015 Banco Penta informed acceptance of Banco de Chiles Offer related to Purchase of Portfolio Loan of that institution. In the same date, Banco Penta informed to the Superintendency of Banks and Financial Institutions, confidentially, acceptance of the offer, and Banco Penta requested to Banco de Chile the refrain its divulgation until its communication to the market.
The credits of that offer, approximately amounted to Ch$588,000 million for capital concept as of May 31, 2015 and corresponds to 95.4% of total portfolio of Banco Penta.
The acceptance offer is subject to the compliance of conditions established in it, particularly the legal and financial due diligences over the portfolio loan of this transaction, and other legal terms agreed with the parties.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
5. Relevant Events, continued:
(l) On July 23, 2015 and regarding the capitalization of 30% of the distributable net income obtained during the fiscal year ending the 31st of December, 2014, through the issuance of fully paid-in shares, agreed in the Extraordinary Shareholders Meeting held on the 26th of March, 2015, it was informed as an essential information:
i. In the said Extraordinary Shareholders Meeting, it was agreed to increase the Bank´s capital in the amount of $ 96,252,499,241 through the issuance of 1,473,778,889 fully paid-in shares, of no par value, payable under the distributable net income for the year 2014 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 N°285 dated June 5, 2015, which was registered on page 42,128 N° 24,868 of the register of the Chamber of Commerce of Santiago for the year 2015, and was published at Diario Oficial on June 10, 2015.
The issuance of fully in paid shares was registered in the Securities Register of the Superintendence of Banks and Financial Institutions with N°2/2015, on July 14, 2015.
ii. The Board of Directors of Banco de Chile, at the meeting N°2,821, dated July 23, 2015, set August 6, 2015, as the date for issuance and distribution of the fully paid in shares.
iii. The shareholders that will be entitled to receive the new shares, at a ratio of 0.02250251855 fully in paid shares for each Banco de Chile share, shall be those registered in the Register of Shareholders on July 31, 2015.
iv. 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.
v. As a consequence of the issuance of the fully in paid shares, the capital of the Bank will be divided in 96,129,146,433 nominative shares, without par value, completely subscribed and paid.
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 70,000UF, 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 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 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. |
|
· Banchile Trade Services Limited |
|
· 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 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 applying the following criteria:
· The net interest margin of loans and deposits is obtained aggregating the net financial margins of each individual operation of credit and uptake made by the bank. For these purposes is considered the volume of each operation and its contribution margin, stemming from the difference between the effective customer rate and the related Banks fund transfer price in terms of maturity 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 parties that exceed 10% or more of its total income during the nine-month period ended September 30, 2015 and 2014.
Taxes are managed at a corporate level and are not allocated to business segments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
6. Segment Reporting, continued:
The following table presents the income by segment for the periods ended September 2015 and 2014 for each of the segments defined above:
|
|
Retail |
|
Wholesale |
|
Treasury |
|
Subsidiaries |
|
Subtotal |
|
Consolidation |
|
Total |
| ||||||||||||||
|
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
623,657 |
|
611,664 |
|
264,922 |
|
273,209 |
|
21,724 |
|
23,143 |
|
(5,048 |
) |
(7,013 |
) |
905,255 |
|
901,003 |
|
1,297 |
|
1,856 |
|
906,552 |
|
902,859 |
|
Net fees and commissions income (loss) |
|
105,641 |
|
98,770 |
|
37,232 |
|
30,138 |
|
(1,580 |
) |
(1,280 |
) |
94,064 |
|
83,966 |
|
235,357 |
|
211,594 |
|
(12,198 |
) |
(11,104 |
) |
223,159 |
|
200,490 |
|
Other operating income |
|
17,691 |
|
21,112 |
|
48,744 |
|
45,716 |
|
19,882 |
|
15,530 |
|
19,071 |
|
24,030 |
|
105,388 |
|
106,388 |
|
(3,125 |
) |
(3,788 |
) |
102,263 |
|
102,600 |
|
Total operating revenue |
|
746,989 |
|
731,546 |
|
350,898 |
|
349,063 |
|
40,026 |
|
37,393 |
|
108,087 |
|
100,983 |
|
1,246,000 |
|
1,218,985 |
|
(14,026 |
) |
(13,036 |
) |
1,231,974 |
|
1,205,949 |
|
Provisions for loan losses |
|
(175,129 |
) |
(170,940 |
) |
(54,033 |
) |
(39,586 |
) |
|
|
|
|
111 |
|
164 |
|
(229,051 |
) |
(210,362 |
) |
|
|
|
|
(229,051 |
) |
(210,362 |
) |
Depreciation and amortization |
|
(15,795 |
) |
(14,974 |
) |
(4,014 |
) |
(3,923 |
) |
(265 |
) |
(194 |
) |
(1,925 |
) |
(1,806 |
) |
(21,999 |
) |
(20,897 |
) |
|
|
|
|
(21,999 |
) |
(20,897 |
) |
Other operating expenses |
|
(341,150 |
) |
(321,548 |
) |
(107,322 |
) |
(91,705 |
) |
(4,253 |
) |
(3,574 |
) |
(77,593 |
) |
(73,131 |
) |
(530,318 |
) |
(489,958 |
) |
14,026 |
|
13,036 |
|
(516,292 |
) |
(476,922 |
) |
Income attributable to associates |
|
1,955 |
|
1,293 |
|
386 |
|
312 |
|
15 |
|
17 |
|
349 |
|
305 |
|
2,705 |
|
1,927 |
|
|
|
|
|
2,705 |
|
1,927 |
|
Income before income taxes |
|
216,870 |
|
225,377 |
|
185,915 |
|
214,161 |
|
35,523 |
|
33,642 |
|
29,029 |
|
26,515 |
|
467,337 |
|
499,695 |
|
|
|
|
|
467,337 |
|
499,695 |
|
Income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(48,439 |
) |
(36,747 |
) |
Income after income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
418,898 |
|
462,948 |
|
The following table presents assets and liabilities of the period ended September 30, 2015 and December 31, 2014 by each segment defined above:
|
|
Retail |
|
Wholesale |
|
Treasury |
|
Subsidiaries |
|
Subtotal |
|
Consolidation |
|
Total |
| ||||||||||||||
|
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
2 |