Banco de Chile(BCH) - 2022 Q4 - Annual Report

Financial Performance - As of December 31, 2022, Banco de Chile ranked first in the Chilean banking industry with a net income attributable to equity holders of Ch$1,445,801 million (approximately U.S.$1,700.5 million), representing a market share of 26.1%[103] - In 2022, the company achieved a 26.1% market share in net income attributable to equity holders, with a 77.8% increase in net income under Chilean GAAP and a ROAE of 31.5%[109] - The operating revenues for 2022 reached Ch$3,115,793 million, reflecting a significant increase from Ch$2,199,024 million in 2021, representing a growth of approximately 42%[176] - The total income before income tax for 2022 was Ch$1,685,192 million, with retail banking contributing Ch$766,259 million and wholesale banking Ch$716,886 million[175] - Banco de Chile reported a return on capital and reserves of 35.5% for 2022, up from 21.1% in 2021[263] Assets and Loans - Total assets reached Ch$55,108,854 million (approximately U.S.$64,818.7 million) and total loans amounted to Ch$36,726,297 million (approximately U.S.$43,197.2 million) as of December 31, 2022[103] - The total loan portfolio amounted to Ch$36,694,804 million, with retail banking contributing 62.6% (Ch$22,955,034 million) and wholesale banking 37.4% (Ch$13,731,449 million) to the total[175] - The loan book increased by 9.7% in 2018, driven by record sales in installment and mortgage loans[105] - The total loan portfolio for the year ended December 31, 2022, totaled Ch$36,694,804 million, with significant contributions from various customer segments including individuals, SMEs, and large companies[180] Market Position - Banco de Chile held a market share of 23.9% in current account balances held by individuals, ranking first in this category as of December 31, 2022[103] - The company maintained a market-leading position in current accounts with a 23.9% market share and ranked second in demand deposits with a 19.9% market share as of December 2022[109] - The company maintained a market share of 16.6% in commercial loans and 23.9% in current accounts held by individuals as of December 31, 2022, solidifying its position as a market leader[124] - The retail banking segment achieved a market share of 20.6% in consumer installment loans, with an 8.3% increase in loans issued[183] Digital Transformation - The FAN account, a fully digital onboarding bank account, reached one million users by adding approximately 350,000 new users in 2022[109] - In 2022, the company launched the first digital current account for individuals, which can be fully opened online in three steps, and introduced a new digital account for SMEs and entrepreneurs (FAN Emprende) that allows full access to digital channels[119] - The number of mobile transactions on Banco de Chile's platforms rose to 35.1 million in 2018, reflecting a 60.8% annual increase[105] - The company expanded its ATM network by 15% through a commercial partnership with a local retailer, enhancing customer access to banking services[116] Customer Engagement - The bank's net promoter score was 75.3% as of December 31, 2022, reflecting high customer satisfaction levels[151] - The company attracted nearly 581,000 new clients in 2021, resulting in a year-end increase of 22.3% in current accounts and demand deposits[109] - The Retail Banking Segment recorded a 25% growth in personal banking customers in 2022, reaching a total of 1,337,404 core customers[183] Operational Efficiency - The cost-to-income ratio improved from 39.6% in 2021 to 31.9% in 2022, leading the industry in terms of efficiency[153] - The bank's cost base recorded a 14.2% nominal annual increase in 2022, with a small real annual increase of 0.8% after adjusting for inflation[153] - The company reduced response time to critical events by 50% in 2022, reinforcing its commitment to cybersecurity and operational efficiency[119] Risk Management - The delinquency ratio was 1.08% as of December 31, 2022, significantly lower than the industry average of 1.79%[135] - The coverage ratio for loans 90 days or more past due was 197.3%, compared to the industry average of 140.4%[135] - The ratio of allowances to total loans for Banco de Chile was 2.12% in 2022, compared to 2.10% in 2021 and 2.41% in 2020[249] Capital Adequacy - As of December 31, 2022, the Total Capital and CET1 ratios were 17.9% and 13.6%, respectively, positioning the company as the leading local bank in terms of capital adequacy[109] - Banco de Chile is in full compliance with all capital adequacy requirements as of December 31, 2022[292] - The CET1 ratio for Banco de Chile improved to 12.9% in 2021 and 12.2% in 2020, reaching 12.9% in 2022[257] Sustainability Initiatives - The bank issued its first green bond in 2019 to finance renewable energy projects in Chile, marking a significant step in its sustainability efforts[105] - The "Mujeres que Inspiran" program recognized 40 women for their contributions to sustainable initiatives in their communities[163] Employee Engagement - The company has focused on enhancing employee engagement and leadership capabilities through various training initiatives, aligning corporate values with employee goals[171] - Employee headcount decreased from 13,562 in 2019 to 12,550 in December 2022, representing a 7.5% reduction[155]