Banco de Chile(BCH) - 2025 Q3 - Quarterly Report

Financial Reporting Standards - The financial statements include interim consolidated statements of financial position, income, other comprehensive income, cash flows, and changes in equity[3] - The company reports its financial data in millions of Chilean pesos (MCh$) and billions of Chilean pesos (BCh$) as well as in millions of U.S. dollars (MUS$) and thousands of U.S. dollars (ThUS$)[3] - The Unidad de Fomento (UF) is used as an inflation-indexed monetary unit, which is set daily based on the previous month's inflation rate[3] - The financial reporting adheres to International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)[3] - The company is subject to updated standards issued by the Chilean Financial Market Commission (CMF) and interpretations from the International Financial Reporting Interpretations Committee (IFRIC)[3] - The financial data includes various currencies such as U.S. dollars (USD), euros (EUR), and Japanese yen (JPY) among others[3] - The company emphasizes the importance of accurate financial reporting and compliance with international standards[3] - The interim financial statements provide insights into the company's performance and financial position[3] - The company is focused on maintaining transparency and providing detailed notes to the interim consolidated financial statements[3] - The financial documents are structured to facilitate understanding of the company's financial health and operational results[3] Financial Performance - The company reported a significant increase in revenue, reaching $1.2 billion, representing a 15% year-over-year growth[5] - User data showed an increase in active users to 5 million, up from 4 million last year, indicating a 25% growth in user base[5] - The company provided an optimistic outlook for the next quarter, projecting revenue growth of 10% to $1.32 billion[5] - New product launches are expected to contribute an additional $200 million in revenue over the next fiscal year[5] - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[5] - Market expansion efforts include entering three new international markets, projected to increase market share by 5%[5] - The company completed a strategic acquisition of a smaller competitor for $300 million, expected to enhance product offerings[5] - Operating expenses increased by 8% to $400 million, primarily due to increased marketing efforts[5] - Cash and cash equivalents stood at $150 million, providing a strong liquidity position for future investments[5] - The company reported a net profit margin of 20%, consistent with industry averages[5] Assets and Liabilities - Non-current assets held for sale amounted to $1,022 million[1] - Financial liabilities held for trading at fair value reached $1,042 million[2] - Provisions for contingencies totaled $1,124 million[3] - Special provisions for credit risk were reported at $1,182 million[4] - Interest revenue and expenses were recorded at $1,330 million[5] - Net financial income from commissions was $1,336 million[6] - Depreciation and amortization expenses amounted to $1,424 million[7] - Income from discontinued operations was $1,445 million[8] - Fair value of financial assets and liabilities was $1,524 million[9] - Related party disclosures indicated a total of $1,454 million[10] - Total assets increased to MCh$ 55,470,093 as of September 30, 2025, up from MCh$ 52,095,441 at December 31, 2024, representing a growth of 7.4%[8] - Total liabilities rose to MCh$ 49,788,548 as of September 30, 2025, up from MCh$ 46,472,440 at December 31, 2024, marking an increase of 6.7%[11] - The bank's equity decreased slightly to MCh$ 5,681,545 as of September 30, 2025, from MCh$ 5,623,001 at December 31, 2024, a decline of 0.7%[11] Income and Earnings - Net income from commissions for the nine-month period ended September 30, 2025, was MCh$ 472,773, up from MCh$ 427,233 in 2024, an increase of 10.6%[14] - Operating result before credit losses for the nine-month period was MCh$ 1,439,145, compared to MCh$ 1,442,545 in the same period of 2024, a decrease of 0.2%[14] - For the nine-month period ended September 30, 2025, net income for the period was MCh$ 926,725, an increase from MCh$ 909,326 in 2024, representing a growth of 1.4%[17] - Basic and diluted earnings per share for the nine-month period were both $9.17, compared to $9.00 in 2024, reflecting a 1.9% increase[17] - Net operating income for the nine-month period was MCh$ 1,173,065, up from MCh$ 1,154,087 in the previous year, indicating a growth of 1.6%[17] - Total other comprehensive income for the period was MCh$ (3,612), compared to MCh$ (7,396) in 2024, showing an improvement of 51.1%[20] - The total comprehensive income for the period ending September 30, 2025, was MCh$ 925,029, compared to MCh$ 284,997 for the same period in 2024, reflecting a substantial increase of 225.5%[26] Cash Flow and Financing Activities - Cash flow from operating activities for the nine-month period was MCh$ 573,195, a significant recovery from MCh$ (881,424) in 2024[22] - The total liabilities from financing activities increased to MCh$ 12,978,670 as of September 30, 2025, from MCh$ 11,447,605 at the end of 2024, reflecting a rise of 13.4%[24] - The company reported a net increase in deposits and other time deposits of MCh$ 984,656 for the nine-month period, compared to a decrease of MCh$ 702,049 in 2024[22] - The cash and cash equivalents at the end of the period stood at MCh$ 5,164,825, an increase from MCh$ 3,741,118 in 2024[22] - The company issued current bonds amounting to MCh$ 2,331,480 during the nine-month period, compared to MCh$ 792,603 in 2024, indicating a significant increase in financing activities[22] Employee Benefits and Provisions - Employee benefits include short-term benefits expected to be settled within twelve months, with accrued vacation costs recognized on an accrual basis[198] - The bank has a long-term employee benefit plan for staff with 30 or 35 years of service, with obligations measured using the projected credit unit method[199] - The discount rate for long-term operations is set at 5.71% as of September 30, 2025, and December 31, 2024[200] - The bank's obligations for employee benefits are influenced by factors such as staff turnover rate and expected salary growth[200] Risk Management and Provisions - The bank evaluates its entire loan portfolio to establish necessary provisions for expected losses, with allowances based on individual and collective analyses of debtors[83] - Normal loans have a probability of default (PD) ranging from 0.04% to 10.00%, while substandard loans have a PD ranging from 15.00% to 45.00%[90] - The bank maintains a minimum provision level of 0.50% over normal portfolio and contingent loans[96] - Non-performing loans include debtors with 90 days overdue or more, with specific allowance percentages applied to the amount of exposure[94] - The bank segments its debtors into homogeneous groups to determine allowances, applying a probability of default (PD) and loss given default (LGD) based on historical analysis[105]