Strong net income and strategic growth …

Appearance date: May 07, 2025

You can find the complete copy of the earnings call in the complete earnings call.

• Banco de Chile (NYSE: BCH) reported a strong net result of 329 billion pesos for the first quarter of 2025, exceeded peers and achieved a return that was achieved over average equity (RoAE) of 23.3%.

• The bank's cost-to-income ratio of the bank is 36.1%, exceeds expectations and shows disciplined cost management.

• Banco de Chile (NYSE: BCH) has a robust capital base with a Basel -III ratio of 17.4%, which is significantly above the fully stressed requirements of 12.4%.

• The bank's digital transformation initiatives, including AI tools and new digital products, drove a growth of 21% in their fan customer tribe compared to the previous year.

• Banco de Chile (NYSE: BCH) holds a high liquidity coverage rate of 186%, far beyond the regulatory limits, which guarantees strong financial stability.

• The macroeconomic environment remains uncertain, with potential effects of the global trade conditions and the local elections in Chile.

• Inflation in Chile was above the goal of the central bank, with annual inflation in March of 4.9%and the challenges for future financial planning.

• The loan growth was modest, with an increase of 3.2% compared to the previous year, and the commercial loans have remained flat, which indicates potential challenges when expanding the credit portfolio.

• The bank's non -customer income decreased due to the due date of central bank financing, which affected total sales growth.

• There is uncertainty about future use in capital, with discussions about maintaining capital buffers for potential regulatory changes and growth opportunities.

Q: How does Banco de Chile plan to use this excess capital with the current surplus of capital? Are there plans for increased dividends, M&A or growth initiatives? A: Daniel Valarte, head of financial control and capital, said that the bank is aiming to maintain cheap capital buffers to support future organic or inorganic growth opportunities. The current capital position is partly due to strong profitability in the past five years. Bank plans to maintain a 60% dividend distribution rate, unless the growth is below expectations or results about expectations, which could lead to higher payouts.

Q: What are Banco de Chile's expectations of the loan growth according to segment and what factors could growth accelerate beyond the mid-single-digit level? A: Pablo Mejia, head of investor relationships, found that the bank expects a loan growth in the industry average of 4%, which is due to consumer and mortgage loans. The growth of the commercial loan can be slower, with more activities to be expected from SMEs than large companies. Economic recovery and increased private investments could further increase growth.