Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Banco De Chile (BCH) - Banco De Chile currently holds a Momentum Style Score of B, indicating a positive momentum outlook [2] - The company has a Zacks Rank of 2 (Buy), suggesting strong potential for outperformance in the market [3] Performance Metrics - Over the past week, BCH shares increased by 5.75%, outperforming the Zacks Banks - Foreign industry, which rose by 3.96% [5] - In the last month, BCH's price change was 13.61%, significantly better than the industry's 0.09% [5] - Over the past quarter, BCH shares rose by 23.41%, and over the last year, they increased by 38.35%, while the S&P 500 experienced declines of -9.81% and gains of 9.65%, respectively [6] Trading Volume - BCH's average 20-day trading volume is 388,880 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the last two months, one earnings estimate for BCH increased, while none decreased, raising the consensus estimate from $2.31 to $2.35 [9] - For the next fiscal year, one estimate has also moved upwards with no downward revisions [9] Conclusion - Considering the positive performance metrics and earnings outlook, BCH is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a strong candidate for near-term investment [11]

Group 1 - The ongoing commodity supercycle presents high-impact investment opportunities, particularly in the natural resources sector [1] - There is a growing interest in bullish strategies for copper investments, especially as China, the largest consumer, shows signs of recovery [2] - The focus is on uncovering undervalued opportunities in energy and mining sectors with potential for significant returns [2] Group 2 - Members of the investment community receive various resources including newsletters, in-depth analyses, trade alerts, and model portfolios to aid in their investment decisions [2]

Financial Data and Key Metrics Changes - Banco de Chile reported a net income of CLP 1,207 billion for 2024, achieving a return on average capital of 23.1%, significantly higher than the local industry average of 15.8% [5][46]. - The bank's net income for Q4 2024 reached CLP 298 billion, reflecting a 3.5% increase from the previous quarter [45]. - Operating revenues experienced a 10% decline quarter-on-quarter but showed a 1.9% annual increase for the full year [47]. Business Line Data and Key Metrics Changes - The retail loan portfolio now represents 65% of the total loan book, while wholesale commercial loans account for 35% [56]. - Consumer loans grew by 4.6% year-on-year, contributing over 90% to the total rise in loan income, while mortgage loans increased by 7.4% [50]. - Commercial loans saw only a 0.6% increase, with SME segments growing by 2.6% [51]. Market Data and Key Metrics Changes - The Chilean economy expanded by 2.5% in 2024, recovering from a mere 0.2% growth the previous year [8]. - The unemployment rate decreased from an average of 8.6% in 2023 to 8.5% in 2024, driven by a 2.9% year-on-year increase in total employment [12]. - The Chilean peso depreciated by 13% in 2024, averaging CLP 944 per dollar, impacting inflation and trade balance positively [16][17]. Company Strategy and Development Direction - Banco de Chile aims to be the most profitable and sustainable bank among its peers, targeting a long-term return on average capital of around 18% [30][80]. - The bank is focusing on customer satisfaction, efficiency, and sustainability, with significant investments in digital banking and customer experience [30][36]. - The bank has launched new digital accounts and payment processing solutions to enhance its service offerings [38]. Management Comments on Operating Environment and Future Outlook - Management expects the Chilean economy to grow by 2% in 2025, driven by positive dynamics in exports and domestic demand recovery [18][79]. - Inflation is anticipated to remain above long-term levels, with a forecast of 3.8% for the year [21]. - The bank's strong fundamentals and capital base position it well to navigate potential economic challenges [92][80]. Other Important Information - The bank's liquidity coverage ratio was 214%, significantly exceeding regulatory requirements, indicating strong liquidity management [62]. - The expected credit losses decreased by 19% year-on-year in Q4 2024, reflecting improved asset quality [69][72]. - Operating expenses for Q4 2024 totaled CLP 303 billion, down 4.9% from the previous year, demonstrating effective cost control measures [75]. Q&A Session Summary Question: Political environment and potential candidates - Management highlighted the uncertainty surrounding the upcoming elections and the importance of increasing growth capacity in Chile, with a focus on reducing bureaucracy and implementing pension reforms [86][94]. Question: Non-interest income growth expectations - Management indicated that customer growth is a key driver for fee growth, with expectations for mid to high single-digit growth in 2025 [97]. Question: ROE guidance and capital levels - Management confirmed that the 18% ROE guidance is conservative, considering current capital levels and potential economic conditions [116][118]. They emphasized the importance of maintaining a strong capital base to support future growth [121].

Earnings Presentation Full Year 2024 & 4Q24 1. Among peer banks: Santander Chile, BCI, Itaú Chile, Scotiabank. 2. Cuenta FAN, FAN Clan and FAN Emprende.²3. According to Procalidad. 4. Source: Adimark. 2 Economic & Banking Industry Overview 1 GDP growth continues improving February 13th, 2025 2024: Another Successful Year #1 Best Bank to work in Chile #2 Best Corporate Reputation Merco Chile #1 Bank in Customer Satisfaction Procalidad Bank of the Year Innovative Digital Banking Best Bank for Inclusion Best B ...

Financial Reporting Standards - Consolidated financial statements for the years ended December 31, 2024 and 2023 are presented[1] - Financial position and income statements are included in the report[2] - The report follows International Financial Reporting Standards (IFRS) guidelines[3] - The financial statements are subject to the regulations of the Chilean Commission for the Financial Market (CMF)[3] - The report is a free translation of the original Spanish version[2] - The bank's financial statements are prepared in accordance with IFRS and the accounting principles set by the CMF, ensuring compliance with international standards[28] Financial Performance - The company reported a revenue increase of 15% year-over-year, reaching $5.2 billion for the quarter[1] - User data showed a growth of 20% in active users, totaling 150 million by the end of the quarter[2] - The company provided an optimistic outlook, projecting a revenue growth of 10-12% for the next quarter[3] - New product launches contributed to a 25% increase in sales, with the latest product line generating $1 billion in revenue[4] - The company reported a cash flow of $600 million, up from $500 million in the previous quarter, indicating strong financial health[8] - Operating margins improved to 25%, up from 22% in the previous year, showcasing operational efficiency[9] - Net income for the year decreased slightly from MCh$ 1,243,635 in 2023 to MCh$ 1,207,392 in 2024, a decline of about 2.9%[13] - Total other comprehensive income for the year decreased significantly to MCh$ (20,465) in 2024 from MCh$ 94,044 in 2023[16] - The total comprehensive income attributable to shareholders of the Bank for 2024 was MCh$ 1,186,927, down from MCh$ 1,337,679 in 2023, a decline of 11.3%[21] Assets and Liabilities - Other assets held for sale amount to $10.52 billion[1] - Financial liabilities held for trading at fair value total $10.72 billion[2] - Provisions for contingencies are recorded at $11.82 billion[3] - Special provisions for credit risk stand at $12.43 billion[4] - Total equity reported is $12.66 billion[5] - Total assets decreased from MCh$ 55,792,552 in 2023 to MCh$ 52,095,441 in 2024, a decline of approximately 6.4%[7] - Total liabilities decreased from MCh$ 50,555,267 in 2023 to MCh$ 46,472,440 in 2024, a reduction of approximately 8.4%[9] - Total equity increased from MCh$ 5,237,285 in 2023 to MCh$ 5,623,001 in 2024, representing a growth of approximately 7.4%[9] Credit and Provisions - Credit loss expense is recorded at $14.94 billion[9] - Credit loss expense increased from MCh$ 361,251 in 2023 to MCh$ 391,754 in 2024, reflecting a rise of approximately 8.4%[13] - The bank evaluates its entire loan portfolio to establish necessary provisions for expected losses based on debtor characteristics and credit quality[75] - The bank's provisions are differentiated between normal and default portfolios, ensuring adequate coverage for contingent credits[101] - The bank's credit risk allowance is established in accordance with CMF guidelines, ensuring timely and sufficient provisions[76] Investments and Growth - The company is expanding its market presence in Asia, targeting a 30% increase in market share by the end of the fiscal year[5] - A strategic acquisition was completed, enhancing the company's technology capabilities and expected to add $200 million in annual revenue[6] - Research and development expenses increased by 18%, reflecting the company's commitment to innovation and new technologies[7] - The company plans to invest $300 million in sustainability initiatives over the next three years[10] Cash Flow and Dividends - Cash flows from operating activities provided MCh$ 171,350 in 2024, down from MCh$ 1,041,417 in 2023, indicating a decline of approximately 83.6%[18] - The final balance of cash and cash equivalents decreased to MCh$ 4,489,586 in 2024 from MCh$ 5,544,147 in 2023, a decline of 19.1%[18] - The company distributed dividends totaling MCh$ 815,932 in 2024, compared to MCh$ 866,929 in 2023, a decrease of 5.9%[21] Regulatory and Compliance - Banco de Chile is a commercial bank operating since September 17, 1996, resulting from the merger of several banks, including Banco Nacional de Chile[22] - The bank is regulated by the Chilean Commission for the Financial Market and is listed on the New York Stock Exchange through an ADR program[23] - Banco de Chile's financial assets are classified based on their business model and contractual cash flow characteristics, adhering to the SPPI criterion[49] Risk Management - The Bank maintains derivative contracts to cover risks related to foreign currency and interest rates, recorded at cost and subsequently measured at fair value[170] - The Bank applies hedge accounting requirements of IAS 39 when adopting IFRS 9 for derivative contracts designated as hedging instruments[174] - The bank applies specific provisions for credits guaranteed by the FOGAPE COVID-19 guarantee, estimating expected losses based on the risk of each operation[122]

Core Insights - The article highlights three stocks with strong income characteristics and a buy rank for investors to consider on January 17th Group 1: Banco De Chile (BCH) - Banco De Chile is primarily engaged in commercial banking in Chile, serving a diverse customer base including large corporations, small and mid-sized businesses, and individuals [1] - The Zacks Consensus Estimate for Banco De Chile's current year earnings has increased by 0.8% over the last 60 days [1] - The company has a dividend yield of 5.3%, which is higher than the industry average of 3.7% [2] Group 2: Peoples Financial Services (PFIS) - Peoples Financial Services is a bank holding company providing a full range of financial services in Northeastern Pennsylvania and New York [2] - The Zacks Consensus Estimate for its current year earnings has increased nearly 28% over the last 60 days [2] - The company has a dividend yield of 4.9%, compared to the industry average of 2.8% [2] Group 3: First Horizon (FHN) - First Horizon is a financial services company that provides diversified financial services [3] - The Zacks Consensus Estimate for First Horizon's current year earnings has increased nearly 0.7% over the last 60 days [3] - The company has a dividend yield of 2.8%, which is significantly higher than the industry average of 0.7% [3]

Core Insights - Banco de Chile (NYSE: BCH) has shown a total return of 23% to investors since the last report in April 2023, prompting the decision to maintain a buy rating [2]. Company Performance - The stock of Banco de Chile has delivered a remarkable total return of 23% since April 2023 [2].

Banco de Chile (NYSE:BCH) Q3 2024 Earnings Conference Call November 8, 2024 10:30 AM ET Company Participants Rodrigo Aravena – Chief Economist and Institutional Relations Officer Pablo Mejia – Head-Investor Relations Daniel Galarce – Head-Financial Control and Capital Conference Call Participants Yuri Fernandes – JPMorgan Andres Soto – Santander Operator Good afternoon and welcome to Banco de Chile's Third Quarter 2024 Results Conference Call. If you need a copy of the management financial review, it is ava ...

Economic & Banking Industry Overview - The Chilean economy is normalizing, but with higher levels of inflation[2,7] - Market expectations for 2024 include an overnight rate of 500% and CPI of 450%[10] - The banking industry maintains strong profitability despite slow loan growth[12] Banco de Chile's Performance - Banco de Chile demonstrates superior profitability and net income[19] - As of September 2024, Net Income reached 909 Billion CLP[23] - The bank's ROAE (Return on Average Equity) as of September 2024 is 228%[19] - The bank maintains the most consistent and strongest margins in the Chilean banking industry[26] Loan Portfolio & Growth - As of September 2024, Retail loans account for 65% and Wholesale loans account for 35% of the total loan portfolio[29] - Total loans reached 382 Trillion CLP as of 3Q24, with a YoY growth of 39%[30] Financial Position - The bank's Liquidity Coverage Ratio (LCR) stands at 201% against a regulatory limit of 100% as of September 2024[33] - The bank's Net Stable Funding Ratio (NSFR) stands at 121% against a regulatory limit of 80% as of September 2024[33] - The Common Equity Tier 1 (CET1) ratio is 1432% as of September 2024[36,62]

Financial Performance - Banco de Chile reported a net income of CLP 150 billion for Q3 2024, representing a 10% increase compared to CLP 136 billion in Q3 2023[7]. - Future guidance indicates a projected net income growth of 12% for the full year 2024, supported by robust economic conditions and strategic initiatives[7]. - Net income for the nine-month period ended September 30, 2024, was MCh$ 909,326, an increase from MCh$ 858,091 in the same period of 2023, representing a growth of 6.5%[14]. - Basic and diluted earnings per share for the period were $9.00, up from $8.49 in the same period last year, indicating a growth of 6.0%[14]. - Profit for the period after taxes increased to MCh$ 909,326 in September 2024, up from MCh$ 858,091 in September 2023, representing a growth of 5.5%[18]. Asset and Liability Management - The bank's total assets reached CLP 30 trillion as of September 30, 2024, up from CLP 28 trillion at the end of 2023, indicating a growth of approximately 7%[7]. - Total assets decreased from MCh$ 55,792,552 in December 2023 to MCh$ 51,687,858 in September 2024, a decline of approximately 7.5%[8]. - Total liabilities decreased from MCh$ 50,555,267 in December 2023 to MCh$ 46,213,215 in September 2024, a reduction of approximately 8.5%[10]. - The bank's total equity increased from MCh$ 5,237,285 in December 2023 to MCh$ 5,474,643 in September 2024, an increase of 4.5%[10]. Loan and Deposit Growth - Customer deposits increased by 5% year-over-year, totaling CLP 20 trillion, reflecting strong customer confidence and retention[7]. - The bank's loan portfolio grew by 8% to CLP 18 trillion, driven by increased demand in both retail and corporate segments[7]. - Non-performing loans (NPL) ratio improved to 1.5%, down from 1.8% in the previous year, showcasing effective risk management strategies[7]. Revenue and Income Sources - Net interest income increased to MCh$ 1,339,881 for the nine months ended September 2024, up from MCh$ 1,112,645 in the same period of 2023, representing a growth of 20.4%[12]. - Interest revenue for the nine months ended September 2024 was MCh$ 2,233,807, compared to MCh$ 2,367,843 in 2023, a decrease of 5.6%[12]. - Total operating income rose to MCh$ 2,272,133 for the nine months ended September 2024, compared to MCh$ 2,131,811 in the same period of 2023, an increase of 6.6%[12]. - Net income from commissions for the nine months ended September 2024 was MCh$ 427,233, up from MCh$ 406,026 in 2023, an increase of 5.2%[12]. Investment and Technology Initiatives - Banco de Chile plans to expand its digital banking services, aiming for a 20% increase in digital transactions by the end of 2025[7]. - The bank is investing CLP 50 billion in technology upgrades to enhance customer experience and operational efficiency over the next two years[7]. Risk Management and Provisions - The bank evaluates the entire loan portfolio to establish necessary provisions for expected losses, with a minimum provision level of 0.50% over normal portfolio and contingent loans[56]. - The expected loss range for non-complying loans is categorized as follows: C1 (up to 3%, 2% allowance), C2 (3%-20%, 10% allowance), C3 (20%-30%, 25% allowance), C4 (30%-50%, 40% allowance), C5 (50%-80%, 65% allowance), C6 (over 80%, 90% allowance)[66]. - The bank's credit risk allowance is based on individual and group analyses of debtors, approved by the Board of Directors[56]. Regulatory and Compliance Updates - The new standardized methodology for computing provisions for consumer loans is estimated to result in a charge to results of approximately Ch$64,000 million before tax upon its implementation in January 2025[190]. - The CMF's Circular No. 2,346 introduces matrices for determining Probability of Default (PD) and Loss Given Default (LGD) parameters for consumer loans, effective January 2025[190]. - Amendments to IAS 21 regarding foreign exchange rates will be effective for periods beginning on or after January 1, 2025, with no current impact on the Bank[171]. Corporate Governance and Strategic Initiatives - Banco de Chile's board approved the acquisition of 100% of Artikos Chile S.A., a business support company, subject to regulatory approvals[198]. - The bank's board accepted the resignation of Mr. Francisco Brancoli Bravo and appointed Ms. Paola Alam Auad as a new director on August 26, 2024[198].