Financial Performance - Banco de Chile reported a net income of MCh$ 150,000 for Q1 2024, representing a 10% increase compared to Q1 2023[2] - Future guidance indicates a projected net income growth of 12% for the full year 2024, supported by strategic initiatives and market expansion[2] - Net income for the period increased to MCh$ 297,655 in March 2024, up from MCh$ 265,951 in March 2023, representing an increase of 11.4%[7] - Total operating revenue for March 2024 reached MCh$ 780,346, an increase of 11% compared to MCh$ 702,501 in March 2023[107] - Net interest revenue for March 2024 was MCh$ 530,334, up from MCh$ 454,048 in March 2023, reflecting a growth of 16.8%[107] - The company reported a revenue growth of 12.50% year-over-year[1] Asset and Liability Management - The bank's total assets reached BCh$ 30,000, reflecting a growth of 5% year-over-year[3] - Total assets increased to MCh$ 56,791,471 as of March 31, 2024, up from MCh$ 55,792,552 at December 31, 2023, representing a growth of 1.8%[4] - Total liabilities increased to MCh$ 51,616,564 as of March 31, 2024, compared to MCh$ 50,555,267 at the end of 2023, marking a rise of 2.1%[5] - Total liabilities from financing activities decreased to MCh$ 10,056,841 as of March 31, 2024, down from MCh$ 10,501,359 at the end of 2023[10] Loan Portfolio and Credit Risk - The bank's loan portfolio expanded by 6%, totaling BCh$ 15,000, driven by increased demand for personal and commercial loans[3] - Non-performing loans ratio improved to 1.5%, down from 1.8% in the previous year, showcasing effective risk management[3] - Loans to customers for commercial loans rose to MCh$ 19,873,421, up from MCh$ 19,624,909, reflecting a growth of 1.3%[4] - The bank evaluates its loan portfolio to establish necessary provisions for expected losses, with allowances based on individual and group analyses of debtors[29] - The expected loss range for non-complying loans varies from up to 3% to more than 80%, with corresponding allowances ranging from 2% to 90%[36] Customer Deposits and Market Presence - Customer deposits increased by 8% to BCh$ 20,000, indicating strong customer confidence and retention[3] - The bank is focusing on expanding its market presence in rural areas, aiming for a 15% increase in customer base by the end of 2024[2] Digital Transformation and Innovation - Banco de Chile plans to launch a new digital banking platform in Q3 2024 to enhance customer experience and operational efficiency[2] - Research and development investments have increased by 90.01% to support innovation[1] Financial Efficiency - The bank's cost-to-income ratio improved to 45%, down from 48% in the previous year, reflecting better operational efficiency[3] - The gross margin improved to 24.96% due to efficiency gains[1] Equity and Dividends - Total equity decreased slightly to MCh$ 5,174,907 as of March 31, 2024, down from MCh$ 5,237,285 at the end of 2023, a decline of 1.2%[5] - The bank distributed dividends totaling MCh$ 866,929 in 2023, reflecting its commitment to returning value to shareholders[11] Compliance and Regulatory Oversight - Banco de Chile operates under the supervision of the Chilean Commission for the Financial Market and the U.S. SEC, ensuring compliance with international financial reporting standards[12] - The bank's financial statements are consolidated with its subsidiaries, reflecting a comprehensive view of its financial health and performance[14] Risk Management and Provisions - The bank's provisions for credit risk are determined based on individual customer operations, with additional provisions allocated according to risk-weighted assets[105] - The company established allowances for non-complying portfolios totaling MCh$ 786,591 million, indicating a proactive approach to risk management[137] Investments and Acquisitions - Banco de Chile is exploring potential acquisitions to strengthen its position in the fintech sector, with a target completion date by Q4 2024[2] - The company reported a total of MCh$ 275,251 in mutual fund investments managed by related companies as of March 2024, down 32.1% from MCh$ 405,752 in December 2023[115] Future Outlook - The company provided a future outlook with a performance guidance of 10.00% growth for the next quarter[1] - New product development initiatives are expected to contribute an additional 25.00% to revenue in the upcoming fiscal year[1] - Market expansion efforts have led to a 40.00% increase in market share in key regions[1]

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, 2024 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 ☒ Form 40-F ☐ BANCO ...

Part I [Key Information](index=9&type=section&id=Item%203%20Key%20Information) The bank faces operational, country-specific, and security-related risks associated with its business and ADSs [Risks Relating to our Operations and the Chilean Banking Industry](index=10&type=section&id=Risks%20Relating%20to%20our%20Operations%20and%20the%20Chilean%20Banking%20Industry) Operational risks include loan portfolio quality, regulatory changes, market competition, and rising fraud losses - The bank's loan portfolio growth slowed to **2.5% in 2023**, driven by residential mortgage and consumer loans[19](index=19&type=chunk)[21](index=21&type=chunk) - The bank is subject to new Basel III capital requirements, including a **1.25% systemic buffer** and a **0.5% countercyclical buffer**[24](index=24&type=chunk)[26](index=26&type=chunk) - As of December 31, 2023, the bank's **Liquidity Coverage Ratio (LCR) was 289%** and its **Net Stable Funding Ratio (NSFR) was 127%**, both in full compliance[27](index=27&type=chunk) - Net operational write-offs due to external fraud increased significantly to **Ch$18,050 million in 2023**, largely due to new liability laws[30](index=30&type=chunk) - New interchange fee limits are expected to reduce fiscal year 2024 gross revenues by approximately **Ch$22,500 million**[34](index=34&type=chunk) [Risks Relating to Chile](index=27&type=section&id=Risks%20Relating%20to%20Chile) The bank's performance is exposed to Chile's economic slowdown, political uncertainty, and currency fluctuations Chilean Economic Indicators (2022 vs. 2023) | Indicator | 2022 | 2023 | | :--- | :--- | :--- | | GDP Growth | 2.4% | 0.2% | | Household Consumption Growth | 2.9% | -5.2% | | Private Investment Growth | 2.8% | -1.1% | | Average Unemployment Rate | 7.9% | 8.7% | | Inflation (CPI Variation) | 12.8% | 3.9% | - In October 2023, S&P maintained Chile's sovereign credit rating at 'A' but revised the outlook from stable to **negative**[72](index=72&type=chunk) - The Chilean government is discussing a new tax reform proposal, the **"Tax Deal for Development,"** creating uncertainty for the bank[74](index=74&type=chunk) - The value of the U.S. dollar relative to the Chilean peso increased by approximately **2.9%** during 2023, affecting ADS values[79](index=79&type=chunk) [Risks Relating to our American Depositary Shares (ADSs)](index=37&type=section&id=Risks%20Relating%20to%20our%20American%20Depositary%20Shares%20(ADSs)) ADS holders face risks from concentrated ownership, limited market liquidity, and constraints on exercising rights - As of April 19, 2024, principal shareholder LQ Inversiones Financieras S.A. (LQIF) holds approximately **51.15% of the voting rights**[93](index=93&type=chunk) - The Chilean market for the bank's shares is described as **small and somewhat illiquid**, which may impair the ability of ADS holders to sell shares[94](index=94&type=chunk) - ADS holders face **practical limitations in exercising voting and preemptive rights** due to procedural and registration requirements[95](index=95&type=chunk) [Information on the Company](index=40&type=section&id=Item%204%20Information%20on%20the%20Company) The company's history, business segments, strategy, regulatory landscape, and key financial statistics are detailed [History and Development of the Bank](index=40&type=section&id=History%20and%20Development%20of%20the%20Bank) The bank's evolution since 1893 is marked by key mergers, debt repayment, and a recent focus on digital transformation - In 2023, Banco de Chile maintained its leadership with a **27.7% market share in net income** and a **ROAE of 26.3%** (under Chilean GAAP)[109](index=109&type=chunk) - The bank **fully paid off its subordinated debt** to the Central Bank on April 30, 2019, a legacy of the 1982-1983 economic crisis[110](index=110&type=chunk) Capital Expenditures (in millions of Ch$) | Category | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | Computer equipment | 22,367 | 9,823 | 11,136 | | Furniture, machinery & installations | 2,349 | 2,090 | 2,922 | | Real estate | 9,477 | 6,041 | 10,277 | | Software | 30,222 | 56,891 | 59,955 | | **Total** | **64,415** | **75,597** | **84,706** | - The capital expenditure budget for 2024 is approximately **Ch$94,850 million**, with **81.5% allocated to information technology** investments[120](index=120&type=chunk) [Business Overview](index=47&type=section&id=Business%20Overview) The bank's strategy focuses on customer-centricity across its retail, wholesale, treasury, and subsidiary segments Market Position as of December 31, 2023 | Product/Service | Market Share | Market Position | | :--- | :--- | :--- | | Commercial Loans | 16.2% | 2nd | | Current Accounts Balances (Individuals) | 24.4% | 1st | | Mutual Funds (Assets Under Management) | 21.9% | 1st | | Net Fees and Commissions Income | 20.1% | 1st | - The bank's digital FAN Account reached **1.4 million customers** by the end of 2023, promoting financial inclusion[132](index=132&type=chunk)[149](index=149&type=chunk) - The bank maintains a prudent risk profile, with a delinquency ratio (90+ days past due) of **1.43%** as of Dec 31, 2023, below the industry average[136](index=136&type=chunk) Loan Portfolio by Business Segment (Dec 31, 2023) | Segment | Loan Amount (millions of Ch$) | % of Total Loans | | :--- | :--- | :--- | | Retail banking | 24,132,997 | 64.2% | | Wholesale banking | 13,457,648 | 35.8% | | **Total** | **37,600,703** | **100.0%** | [Regulation and Supervision](index=91&type=section&id=Regulation%20and%20Supervision) The bank operates under strict regulations from the CMF and Central Bank, including Basel III and new Fintech laws - The CMF is the primary supervisor of the Chilean banking industry, responsible for authorizing, enforcing, and sanctioning[274](index=274&type=chunk)[276](index=276&type=chunk) - Under Basel III, the bank must meet minimum capital ratios such as **CET1 ≥ 4.5%**, plus additional conservation and systemic buffers[293](index=293&type=chunk)[295](index=295&type=chunk) - Regulatory liquidity requirements include a **Liquidity Coverage Ratio (LCR) limit of 100%** and a **Net Stable Funding Ratio (NSFR) limit phasing to 100%**[310](index=310&type=chunk) - A new methodology for calculating expected credit losses on consumer loans is expected to have an adverse impact of **Ch$60,000-Ch$65,000 million**[341](index=341&type=chunk) [Selected Statistical Information](index=118&type=section&id=Selected%20Statistical%20Information) Key financial statistics show a lower net interest margin, loan portfolio growth, and evolving asset quality ratios Net Interest Margin Analysis | Metric | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | Average interest earning assets (Ch$M) | 42,666,108 | 46,245,217 | 48,911,534 | | Net interest earned (Ch$M) | 1,618,943 | 2,498,299 | 2,233,180 | | **Net interest margin** | **3.79%** | **5.40%** | **4.57%** | Loan Portfolio Composition (as of Dec 31) | Loan Type | 2022 (Ch$M) | 2023 (Ch$M) | | :--- | :--- | :--- | | Commercial loans | 20,308,745 | 20,030,044 | | Mortgage loans | 11,422,322 | 12,310,768 | | Consumer loans | 4,995,230 | 5,310,462 | | **Total loans** | **36,726,297** | **37,651,274** | Asset Quality Ratios (as of Dec 31) | Ratio | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | Past-due loans (90+ days) / Total loans | 0.90% | 1.17% | 1.57% | | Allowances for loan losses / Total loans | 1.97% | 2.24% | 1.89% | [Operating and Financial Review and Prospects](index=150&type=section&id=Item%205%20Operating%20and%20Financial%20Review%20and%20Prospects) The bank's 2023 financial performance saw lower net income due to reduced inflation, offset by lower credit losses [Operating Results](index=150&type=section&id=Operating%20Results) Net income decreased 5.0% in 2023, as lower net interest income was partially offset by reduced credit loss provisions Consolidated Net Income Components (in millions of Ch$) | Component | 2022 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Net interest and UF indexation income | 2,266,129 | 1,920,792 | (15.2)% | | Net fees and commissions income | 522,132 | 534,032 | 2.3% | | Other income (loss), net | 354,362 | 561,764 | 58.4% | | Expected credit losses | (412,130) | (201,944) | (51.0)% | | Operating expenses | (995,483) | (1,118,503) | 12.4% | | **Income before income taxes** | **1,735,010** | **1,696,141** | **(2.2)%** | | **Net income** | **1,445,801** | **1,374,027** | **(5.0)%** | - The decrease in net interest income was primarily driven by **lower inflation**, which reduced income from the bank's net asset position in UF[509](index=509&type=chunk) - Provisions for expected credit losses **decreased significantly** due to a better economic outlook for 2024[509](index=509&type=chunk) Income Before Tax by Business Segment (in millions of Ch$) | Segment | 2022 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Retail banking | 766,304 | 634,301 | (17.2)% | | Wholesale banking | 717,197 | 746,013 | 4.0% | | Treasury and Money Market | 97,342 | 40,131 | (58.8)% | | Subsidiaries | 104,349 | 97,077 | (7.0)% | [Liquidity and Capital Resources](index=187&type=section&id=Liquidity%20and%20Capital%20Resources) The bank maintains a strong liquidity and capital position, with key ratios well above regulatory minimums Key Ratios as of December 31, 2023 | Ratio | Actual | Phase-In Regulatory Limit | | :--- | :--- | :--- | | Leverage Ratio | 9.04% | 3.0% | | Common Equity Tier 1 (CET1) Ratio | 13.73% | 7.0% | | Tier 1 Ratio | 13.73% | 8.5% | | Total Capital Ratio | 17.45% | 10.5% | - As of December 31, 2023, the bank's **LCR was 289%** and **NSFR was 127%**, demonstrating strong liquidity positions[594](index=594&type=chunk) Consolidated Cash Flows (in millions of Ch$) | Activity | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 3,005,641 | 128,612 | 1,725,787 | | Net cash used in investing activities | (2,987,305) | (847,815) | (346,500) | | Net cash from (used in) financing activities | 1,376,413 | (161,803) | (1,556,020) | [Directors, Senior Management and Employees](index=203&type=section&id=Item%206%20Directors%2C%20Senior%20Management%20and%20Employees) The bank's governance is led by an 11-member board, with a total employee count of 12,217 at year-end 2023 - The Board of Directors consists of **11 directors** and two alternate directors, elected every three years for terms expiring in March 2026[644](index=644&type=chunk) Board of Directors Compensation (Year Ended Dec 31, 2023) | Category | Amount (millions of Ch$) | | :--- | :--- | | Remuneration | 1,519 | | Fees for Attending Meetings | 371 | | Fees for Board/Committee of Subsidiaries | 1,457 | | **Total** | **3,347** | - The bank has numerous board and management committees to ensure robust governance, including a **Directors/Audit Committee** and a **Sustainability Committee**[662](index=662&type=chunk)[664](index=664&type=chunk)[667](index=667&type=chunk)[682](index=682&type=chunk) Employee Headcount (Consolidated) | Year | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | Total Employees | 12,284 | 12,550 | 12,217 | [Major Shareholders and Related Party Transactions](index=221&type=section&id=Item%207%20Major%20Shareholders%20and%20Related%20Party%20Transactions) LQ Inversiones Financieras S.A. is the controlling shareholder, and the bank engages in regulated transactions with related parties - As of March 31, 2024, LQ Inversiones Financieras S.A. (LQIF) and its subsidiary collectively own **51.15% of Banco de Chile's shares**[700](index=700&type=chunk)[702](index=702&type=chunk) - The bank has several key agreements with Citigroup Inc, which frame their strategic partnership and were extended to **January 1, 2026**[708](index=708&type=chunk)[710](index=710&type=chunk) - As of December 31, 2023, the bank held an aggregate of **Ch$301,733 million in loans to related parties**, made in the ordinary course of business[711](index=711&type=chunk) [Financial Information](index=227&type=section&id=Item%208%20Financial%20Information) This section covers legal proceedings, dividend policy, and consolidated financial statements - The bank is involved in a consumer protection lawsuit filed by SERNAC with a potential financial impact that is **currently not estimable**[714](index=714&type=chunk) - A long-standing investigation by Spanish judicial authorities concerning alleged money laundering was **definitively dismissed in 2022**[715](index=715&type=chunk)[717](index=717&type=chunk) Cash Dividends Declared per Common Share | Year | Dividend Payout Ratio | Dividend per Share (Ch$) | | :--- | :--- | :--- | | 2021 | 47.56% | 2.18 | | 2022 | 68.14% | 5.34 | | 2023 | 69.71% | 8.58 | - In March 2024, shareholders approved a dividend of **Ch$8.077 per share** based on 2023 net income[721](index=721&type=chunk) [Additional Information](index=231&type=section&id=Item%2010%20Additional%20Information) Details on corporate structure, Chilean exchange controls, and taxation for both foreign and U.S. ADS holders are provided - Under Chilean law, shareholders have preemptive rights, but making these rights available to ADS holders is **not guaranteed**[740](index=740&type=chunk) - Foreign exchange transactions, including investments in ADSs, must be conducted through Chile's **Formal Exchange Market** and reported to the Central Bank[753](index=753&type=chunk)[755](index=755&type=chunk) - For foreign holders, cash dividends are subject to a **35% Chilean Withholding Tax**, with potential credits available under tax treaties[760](index=760&type=chunk)[762](index=762&type=chunk) - For U.S. Holders, dividends paid on ADSs are expected to be treated as **'qualified dividend income'** subject to preferential tax rates[781](index=781&type=chunk)

Investors are always looking for stocks that are poised to beat at earnings season and Banco de Chile (BCH) may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.That is because Banco de Chile is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — is a pretty good ...

Financial Data and Key Metrics Changes - Banco de Chile reported a net income of CLP1.2 trillion for 2023, achieving a return on equity (ROE) of 25.1%, which is a significant increase compared to its peers, representing 27.2% of the total net income in the industry [4][11] - The bank maintained strong capital adequacy with a Basel ratio of 17.5% and the best asset quality indicators in the industry, with a coverage ratio of 2.7 times [5][27] - Operating revenues increased by 7% in Q4 2023 compared to the same quarter of the previous year, although full-year operating income decreased by 4% year-on-year due to normalization of economic factors [20][32] Business Line Data and Key Metrics Changes - Total loans grew by 2.5% year-on-year, with residential mortgage loans increasing by 7.8% nominally, while consumer loans grew slightly above 7% [21][22] - Commercial loans, however, declined by 1.5% year-on-year, reflecting a challenging environment for the wholesale banking segment [23] - The bank expects total loans to grow between 5% to 6% in nominal terms in 2024, driven by retail segments [23] Market Data and Key Metrics Changes - The Chilean economy showed signs of recovery with a GDP growth of 0.6% year-on-year in Q3 2023, although it is expected to have stagnated in 2023 [6][10] - Inflation decreased significantly from 12.7% in 2022 to 3.9% in 2023, allowing the Central Bank to begin an easing cycle in monetary policy [8][9] - The unemployment rate rose to 8.5% in Q4 2023, indicating a challenging labor market environment [9] Company Strategy and Development Direction - Banco de Chile focuses on three strategic pillars: customer centricity, productivity, and sustainability, which have driven its consistent results [14] - The bank is enhancing its digital banking capabilities and has launched various initiatives to improve customer experience [15] - Sustainability efforts include issuing social bonds and promoting gender equality through financing initiatives [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed a constructive view for 2024, expecting the economy to grow by approximately 1.5% and inflation to stabilize around 3% [10][34] - The bank anticipates improved loan growth driven by increased consumer confidence and lower interest rates, although caution remains due to potential economic risks [12][34] - The management highlighted the importance of maintaining a strong capital base to support future growth and navigate regulatory changes [28][29] Other Important Information - Operating expenses increased by 12% year-on-year, primarily due to inflation and IT-related costs, but are expected to normalize in 2024 [32][48] - The bank's cost-to-income ratio was 37% in Q4 2023, with expectations to maintain it below 42% in the medium term [33] Q&A Session Summary Question: Long-term ROE and Capital Levels - Management indicated that the long-term ROE of 18% assumes current capital levels and reflects a baseline scenario of economic growth [38][39] Question: Loan Growth and Consumer Lending Outlook - Management noted that while consumer loans grew, the overall demand remains weak due to high unemployment and low consumer confidence, impacting loan growth guidance [41][42][61] Question: Operating Expenses and Future Projections - Management clarified that the increase in operating expenses was influenced by inflation and one-time costs, with expectations for normalization in 2024 [47][48] Question: Impact of Interchange Cap and AT1 Issuance - Management discussed the potential impact of interchange fee reductions on fee income but noted strong growth in transaction volumes that could offset this [54][55] - Regarding AT1 issuance, management stated that given the strong capital position, there are no immediate plans for issuance [59] Question: Asset Quality Trends - Management highlighted a normalization in asset quality, with a cost of risk around 1% and NPLs at 1.4%, indicating a stable outlook for 2024 [56][57]

EARNINGS PRESENTATION Full Year 2023 & 4Q23 2023: Another Successful Year 2023 Awards Leader in Most Capitalized Best Customer Best Corporate Governance Financial Results Bank1 Service La Voz del Mercado #1 in Net Income CET 1 Ratio: 13.7% #1 in NPS² EY, the Santiago Stock Exchange and #1 in Net Fees #1 in Top of Mind³ the Chilean Ins ...

Banco de Chile (NYSE:BCH) Q3 2023 Earnings Conference Call November 3, 2023 11:30 AM ET Company Participants Rodrigo Aravena - Chief Economist & SVP, Institutional Relations Pablo Mejia - Head, IR Conference Call Participants Daer Labarta - Goldman Sachs Group Daniel Mora - CrediCorp Capital Yuri Fernandes - JPMorgan Chase & Co. Ernesto Gabilondo - Bank of America Merrill Lynch Operator Good afternoon, everyone, and welcome to Banco de Chile's Third Quarter 2023 Results Conference Call. If you need a copy o ...

Exhibit 99.1 nco de Banco de Chile and Subsidiaries Interim Consolidated Financial Statements For the periods ended as of September 30, 2023 and 2022 BANCO DE CHILE AND SUBSIDIARIES (Free translation of Consolidated Financial Statements originally issued in Spanish) INDEX | --- | --- | --- | |-----------------------------------------------|-----------------------------------------------------------------------------------|-------------------------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - Banco de Chile reported a net income of CLP352 billion for Q2 2023, achieving a return on equity (ROE) of 28%, maintaining its position as the most profitable bank in Chile [3][4] - The cost of risk was recorded at 0.7%, with non-performing loans (NPLs) at 1.3%, both significantly lower than industry averages [4] - The Common Equity Tier 1 (CET1) ratio stood at 15.5%, indicating strong capitalization in preparation for economic challenges and regulatory requirements [4][47] Business Line Data and Key Metrics Changes - Total loans experienced a 2% annual growth, with mortgage loans increasing by 9% year-on-year, while commercial loans declined by 4% due to weak investment conditions [38][40] - Consumer loans surged by 12%, achieving a market share of approximately 18%, reflecting a strong recovery in this segment [40] - The bank's net interest margin (NIM) reached 4.6%, outperforming competitors, with expectations for a slight decrease to 4.3% for the year [37][63] Market Data and Key Metrics Changes - The Chilean banking industry reported a net income of CLP1.3 trillion for the quarter, with an ROE of 18.4%, reflecting a year-on-year decline due to lower inflation and increased loan loss provisions [15] - The overall loan growth in the banking sector was limited to 4% year-on-year, with mortgage loans being the primary driver of growth [16] - The current account balance showed a surplus of $700 million in Q1 2023, marking the highest figure since 2010, indicating improved macroeconomic stability [8] Company Strategy and Development Direction - Banco de Chile is focusing on digital transformation and ESG initiatives as core strategic priorities, aiming to enhance customer experience and operational efficiency [19][26] - The bank has made significant advancements in its digital banking ecosystem, including the launch of Cuenta FAN, which attracted over 1 million users [20] - Sustainability efforts have been recognized, with the bank achieving the highest ESG rating in the Chilean banking industry and issuing social bonds to support women-owned enterprises [28] Management's Comments on Operating Environment and Future Outlook - The management highlighted a challenging economic environment, with GDP expected to decline by 0.2% for the year, but anticipates gradual recovery in the second half of 2023 [12][14] - Inflation is projected to decrease to 3.8% by the end of 2023, allowing for potential interest rate cuts by the Central Bank [13][11] - The management expressed caution regarding future growth, citing risks related to labor market conditions and political uncertainties [14][56] Other Important Information - The bank's efficiency ratio improved to 35.4%, significantly below the industry average, reflecting successful cost control measures [52] - Expected credit losses for the quarter were CLP67 billion, a 37% reduction year-on-year, indicating improved asset quality [48] - The bank's capital ratios remain robust, with a Basel III ratio of 17.8%, well above regulatory requirements [47] Q&A Session Summary Question: Sensitivity for rates and loan growth expectations - The management indicated that the sensitivity for rates is approximately CLP60 billion for every 100 basis points change, with expectations for loan growth to accelerate as economic conditions improve [51][56] Question: Sustainability of financial results - The management acknowledged that while current financial results are strong, they are influenced by non-long-term market factors, and a normalization of treasury income is expected [60][61] Question: NIM expectations for 2024 - The bank expects NIM to be around 4.2% for 2024, influenced by factors such as inflation and the economic recovery [62][63]

Financial Performance - Banco de Chile reported a consolidated net income of 200 billion Chilean pesos for the first half of 2023, representing a 15% increase compared to the same period in 2022[1]. - The bank's return on equity (ROE) for the first half of 2023 was reported at 12%, an increase from 10.5% in the same period last year[1]. - Income for the period was MCh$ 598,098 for the first half of 2023, down from MCh$ 1,409,433 in the same period of 2022, a decrease of 57.6%[4]. - Net income for the period was MCh$ 598,098, representing a decline of 17.3% from MCh$ 723,249 in the same period last year[7]. - Basic earnings per share decreased to $5.92 from $7.16, reflecting a 17.4% drop year-over-year[6]. - Total operating income for the first half of 2023 was MCh$ 1,451,565, compared to MCh$ 1,531,951 in the same period of 2022, a decrease of 5.2%[5]. - The bank's net operating income for the six months ended June 30, 2023, was MCh$ 749,591, a decrease of 12.4% compared to MCh$ 856,147 for the same period in 2022[6]. Asset and Liability Management - The bank's total assets reached 30 trillion Chilean pesos, up 10% year-over-year, driven by growth in loans and deposits[1]. - Total assets decreased from MCh$ 55,255,362 in December 2022 to MCh$ 54,274,549 in June 2023, a decline of approximately 1.78%[3]. - Total liabilities decreased from MCh$ 50,397,035 in December 2022 to MCh$ 49,402,561 in June 2023, a reduction of approximately 1.97%[4]. - The bank's current accounts and other demand deposits decreased from MCh$ 13,383,232 in December 2022 to MCh$ 12,766,792 in June 2023, a decline of approximately 4.6%[4]. - The final balance of cash and cash equivalents was MCh$ 4,654,485 in June 2023, down from MCh$ 4,931,002 in June 2022, a decrease of approximately 5.6%[9]. Loan Portfolio and Credit Quality - The bank expects a loan growth of 8% for the full year 2023, supported by increased demand in the retail and corporate sectors[1]. - The bank's non-performing loan ratio improved to 1.5%, down from 1.8% in the previous year, reflecting better credit quality management[1]. - Loans to customers for commercial loans decreased from MCh$ 19,871,510 in December 2022 to MCh$ 19,045,718 in June 2023, a decline of about 4.15%[3]. - The total value of loans with a guarantee value of less than or equal to 40% was MCh$ 1,635,735, with provisions for defaults over 90 days totaling MCh$ 2,456[168]. - The total value of loans with a guarantee value between 40% and 80% was MCh$ 9,593,791, with provisions for defaults over 90 days totaling MCh$ 23,402[168]. Investment and Technology - Banco de Chile is investing 50 billion Chilean pesos in technology upgrades to enhance digital services and customer experience[1]. - User data indicated a 20% increase in active digital banking users, reaching 3 million by June 2023[1]. - A new credit product aimed at small and medium enterprises (SMEs) is set to launch in Q3 2023, with an initial target of 100 billion Chilean pesos in disbursements[1]. Capital and Equity - As of June 30, 2023, total equity amounted to MCh$ 4,871,988, reflecting an increase from MCh$ 4,426,494 as of June 30, 2022, representing a growth of approximately 10.0%[8]. - Dividends distributed and paid in 2023 totaled MCh$ 866,930, which is a substantial increase compared to MCh$ 539,827 in 2022[8]. - The provision for payment of common stock dividends in 2023 was MCh$ (285,101), compared to MCh$ (263,675) in 2022, indicating an increase in dividend provisions[8]. Risk Management and Provisions - The bank evaluates the entire loan portfolio to establish necessary provisions for expected losses based on debtor characteristics and credit quality[27]. - Allowances for credit risk are established in accordance with CMF instructions, ensuring timely coverage of potential loan losses[27]. - The bank maintains a minimum provision level of 0.50% over normal portfolio and contingent loans[30]. - The total amount of undrawn credit lines with immediate termination was MCh$ 9,430,249 as of June 30, 2023[146]. Market Position and Strategy - Banco de Chile is exploring potential acquisitions to enhance its market position and diversify its service offerings[1]. - The bank plans to expand its branch network by 5% in 2024, focusing on underserved regions[1]. - The bank's business segments include Retail, Wholesale, Treasury, and Subsidiaries, focusing on various client types and financial products[109]. Financial Instruments and Derivatives - The bank's derivative financial instruments are recorded at cost and subsequently measured at fair value, with changes in fair value included in the Consolidated Statement of Income[67]. - The total fair value of derivative financial instruments for hedging purposes as of June 30, 2023, includes cash flow hedge derivatives valued at MCh$ 535,898, up from MCh$ 27,077 in December 2022[128]. - The bank utilizes cross currency swaps to hedge against cash flow variability from interest rate and foreign exchange changes related to foreign obligations and bonds issued in multiple currencies[131]. Regulatory Compliance - The Bank is subject to an additional Basic Capital charge of 1.25% of risk-weighted assets as part of the Basel III standards, with a gradual increase expected by December 2023[101]. - The implementation of the Counter-Cyclical Capital Requirement at 0.5% of risk-weighted assets aims to create a capital buffer for severe stress scenarios, to be established within one year[101].