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 October, 2013
Commission File Number 001-15266
BANK OF CHILE
(Translation of registrants name into English)
Paseo 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 x Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7): o
Indicate by check mark whether by furnishing the information contained in this Form, the
registrant is also thereby furnishing the information to the Commission pursuant to Rule
12g3-2(b) under the Securities Exchange Act of 1934.
Yes o No x
If Yes is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-
BANCO DE CHILE
REPORT ON FORM 6-K
Attached Banco de Chiles Financial Statements with notes for the Third Quarter of 2013.
BANCO DE CHILE AND SUBSIDIARIES
Index
|
I. |
|
Interim Condensed Consolidated Statements of Financial Position |
|
II. |
|
Interim Condensed Consolidated Statements of Comprehensive Income for the Period |
|
III. |
|
Interim Condensed Consolidated Statements of Other Comprehensive Income for the Period |
|
IV. |
|
Interim Condensed Consolidated Statements of Changes in Equity |
|
V. |
|
Interim Condensed Consolidated Statements of Cash Flows |
|
VI. |
|
Notes to the Interim Condensed Consolidated Financial Statements |
MCh$ |
|
= |
|
Millions of Chilean pesos |
ThUS$ |
|
= |
|
Thousands of U.S. dollars |
UF or CLF |
|
= |
|
Unidad de Fomento |
|
|
|
|
(The Unidad de Fomento is an inflation-indexed, Chilean peso denominated monetary unit set daily in advance on the basis of the previous months inflation rate). |
Ch$ or CLP |
|
= |
|
Chilean pesos |
US$ or USD |
|
= |
|
U.S. dollars |
JPY |
|
= |
|
Japanese yen |
EUR |
|
= |
|
Euro |
MXN |
|
= |
|
Mexican pesos |
HKD |
|
= |
|
Hong Kong dollars |
PEN |
|
= |
|
Peruvian nuevo sol |
CHF |
|
= |
|
Swiss franc |
|
|
|
|
|
IFRS |
|
= |
|
International Financial Reporting Standards |
IAS |
|
= |
|
International Accounting Standards |
RAN |
|
= |
|
Compilation of Norms of the Chilean Superintendency of Banks |
IFRIC |
|
= |
|
International Financial Reporting Interpretations Committee |
SIC |
|
= |
|
Standards Interpretation Committee |
BANCO DE CHILE AND SUBSIDIARIES
|
|
Page |
Interim Condensed Consolidated Statement of Financial Position |
3 | |
Interim Condensed Consolidated Statements of Comprehensive Income |
4 | |
Interim Condensed Consolidated Statement of Changes in Equity |
6 | |
7 | ||
8 | ||
Legal provisions, basis of preparation and other information: |
8 | |
12 | ||
15 | ||
15 | ||
20 | ||
23 | ||
24 | ||
Cash collateral on securities borrowed and reverse repurchase agreements: |
25 | |
28 | ||
33 | ||
34 | ||
39 | ||
41 | ||
43 | ||
46 | ||
48 | ||
53 | ||
54 | ||
54 | ||
55 | ||
57 | ||
60 | ||
60 | ||
64 | ||
65 | ||
69 | ||
73 | ||
75 | ||
76 | ||
76 | ||
77 | ||
78 | ||
79 | ||
80 | ||
81 | ||
82 | ||
83 | ||
88 | ||
97 | ||
99 |
BANCO DE CHILE AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
For the periods ended September 30, 2013 and 2012
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
|
|
Notes |
|
September |
|
December |
|
|
|
|
|
MCh$ |
|
MCh$ |
|
ASSETS |
|
|
|
|
|
|
|
Cash and due from banks |
|
7 |
|
998,770 |
|
684,925 |
|
Transactions in the course of collection |
|
7 |
|
513,900 |
|
396,611 |
|
Financial assets held-for-trading |
|
8 |
|
365,892 |
|
192,724 |
|
Cash collateral on securities borrowed and reverse repurchase agreements |
|
9 |
|
20,501 |
|
35,100 |
|
Derivative instruments |
|
10 |
|
290,487 |
|
329,497 |
|
Loans and advances to banks |
|
11 |
|
676,953 |
|
1,343,322 |
|
Loans to customers, net |
|
12 |
|
19,957,386 |
|
18,334,330 |
|
Financial assets available-for-sale |
|
13 |
|
1,784,353 |
|
1,264,440 |
|
Financial assets held-to-maturity |
|
13 |
|
|
|
|
|
Investments in other companies |
|
14 |
|
16,697 |
|
13,933 |
|
Intangible assets |
|
15 |
|
30,947 |
|
34,290 |
|
Property and equipment |
|
16 |
|
198,797 |
|
205,189 |
|
Current tax assets |
|
17 |
|
3,018 |
|
2,684 |
|
Deferred tax assets |
|
17 |
|
135,961 |
|
127,143 |
|
Other assets |
|
18 |
|
259,656 |
|
296,878 |
|
TOTAL ASSETS |
|
|
|
25,253,318 |
|
23,261,066 |
|
LIABILITIES |
|
|
|
|
|
|
|
Current accounts and other demand deposits |
|
19 |
|
5,927,692 |
|
5,470,971 |
|
Transactions in the course of payment |
|
7 |
|
314,489 |
|
159,218 |
|
Cash collateral on securities lent and repurchase agreements |
|
9 |
|
223,409 |
|
226,396 |
|
Savings accounts and time deposits |
|
20 |
|
10,332,890 |
|
9,612,950 |
|
Derivative instruments |
|
10 |
|
375,028 |
|
380,322 |
|
Borrowings from financial institutions |
|
21 |
|
876,247 |
|
1,108,681 |
|
Debt issued |
|
22 |
|
4,056,885 |
|
3,273,933 |
|
Other financial obligations |
|
23 |
|
174,967 |
|
162,123 |
|
Current tax liabilities |
|
17 |
|
2,043 |
|
25,880 |
|
Deferred tax liabilities |
|
17 |
|
36,851 |
|
27,630 |
|
Provisions |
|
24 |
|
467,405 |
|
504,837 |
|
Other liabilities |
|
25 |
|
239,581 |
|
301,066 |
|
TOTAL LIABILITIES |
|
|
|
23,027,487 |
|
21,254,007 |
|
|
|
|
|
|
|
|
|
EQUITY |
|
27 |
|
|
|
|
|
Attributable to Banks Owners: |
|
|
|
|
|
|
|
Capital |
|
|
|
1,849,351 |
|
1,629,078 |
|
Reserves |
|
|
|
213,767 |
|
177,574 |
|
Other comprehensive income |
|
|
|
13,182 |
|
18,935 |
|
Retained earnings: |
|
|
|
|
|
|
|
Retained earnings from previous periods |
|
|
|
16,379 |
|
16,379 |
|
Income for the period |
|
|
|
380,720 |
|
465,850 |
|
Less: |
|
|
|
|
|
|
|
Provision for minimum dividends |
|
|
|
(247,569 |
) |
(300,759 |
) |
Subtotal |
|
|
|
2,225,830 |
|
2,007,057 |
|
Non-controlling interests |
|
|
|
1 |
|
2 |
|
|
|
|
|
|
|
|
|
TOTAL EQUITY |
|
|
|
2,225,831 |
|
2,007,059 |
|
TOTAL LIABILITIES AND EQUITY |
|
|
|
25,253,318 |
|
23,261,066 |
|
The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE PERIOD
For the nine-month ended September 30, 2013 and 2012
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
A. CONSOLIDATED STATEMENT OF INCOME
|
|
Notes |
|
September |
|
September |
|
|
|
|
|
MCh$ |
|
MCh$ |
|
Interest revenue |
|
28 |
|
1,272,595 |
|
1,182,658 |
|
Interest expense |
|
28 |
|
(503,902 |
) |
(497,974 |
) |
Net interest income |
|
|
|
768,693 |
|
684,684 |
|
|
|
|
|
|
|
|
|
Income from fees and commissions |
|
29 |
|
288,089 |
|
275,326 |
|
Expenses from fees and commissions |
|
29 |
|
(72,239 |
) |
(62,826 |
) |
Net fees and commission income |
|
|
|
215,850 |
|
212,500 |
|
|
|
|
|
|
|
|
|
Net financial operating income |
|
30 |
|
23,687 |
|
15,766 |
|
Foreign exchange transactions, net |
|
31 |
|
36,764 |
|
24,829 |
|
Other operating income |
|
36 |
|
17,924 |
|
16,341 |
|
Total operating revenues |
|
|
|
1,062,918 |
|
954,120 |
|
|
|
|
|
|
|
|
|
Provisions for loan losses |
|
32 |
|
(173,817 |
) |
(137,584 |
) |
|
|
|
|
|
|
|
|
OPERATING REVENUES, NET OF PROVISIONS FOR LOAN LOSSES |
|
|
|
889,101 |
|
816,536 |
|
|
|
|
|
|
|
|
|
Personnel expenses |
|
33 |
|
(234,191 |
) |
(231,632 |
) |
Administrative expenses |
|
34 |
|
(184,309 |
) |
(176,048 |
) |
Depreciation and amortization |
|
35 |
|
(21,332 |
) |
(23,267 |
) |
Impairment |
|
35 |
|
(133 |
) |
(648 |
) |
Other operating expenses |
|
37 |
|
(13,789 |
) |
(25,125 |
) |
|
|
|
|
|
|
|
|
TOTAL OPERATING EXPENSES |
|
|
|
(453,754 |
) |
(456,720 |
) |
|
|
|
|
|
|
|
|
NET OPERATING INCOME |
|
|
|
435,347 |
|
359,816 |
|
|
|
|
|
|
|
|
|
Income attributable to associates |
|
14 |
|
2,044 |
|
857 |
|
Income before income tax |
|
|
|
437,391 |
|
360,673 |
|
|
|
|
|
|
|
|
|
Income tax |
|
|
|
(56,671 |
) |
(32,762 |
) |
|
|
17 |
|
|
|
|
|
NET INCOME FOR THE PERIOD |
|
|
|
380,720 |
|
327,911 |
|
Attributable to: |
|
|
|
|
|
|
|
Banks Owners |
|
|
|
380,720 |
|
327,910 |
|
Non-controlling interests |
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
Net income per share attributable to Banks Owners: |
|
|
|
Ch$ |
|
Ch$ |
|
Basic net income per share |
|
27 |
|
4.10 |
|
3.72 |
|
Diluted net income per share |
|
27 |
|
4.10 |
|
3.72 |
|
The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE PERIOD
For the nine-month ended September 30, 2013 and 2012
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
B. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|
Notes |
|
September |
|
September |
|
|
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
NET INCOME FOR THE PERIOD |
|
|
|
380,720 |
|
327,911 |
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME THAT WILL BE RECLASSIFIED TO INCOME FOR THE PERIOD |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains (losses): |
|
|
|
|
|
|
|
Net change in unrealized gains (losses) on available-for-sale instruments |
|
13 |
|
9,149 |
|
23,294 |
|
Gains and losses on derivatives held as cash flow hedges |
|
10 |
|
(16,389 |
) |
1,294 |
|
Cumulative translation adjustment |
|
|
|
39 |
|
(65 |
) |
Other comprehensive income before income taxes |
|
|
|
(7,201 |
) |
24,523 |
|
|
|
|
|
|
|
|
|
Income tax related to other comprehensive income |
|
17 |
|
1,448 |
|
(4,880 |
) |
|
|
|
|
|
|
|
|
Total other comprehensive income that will be reclassified to income for the period |
|
|
|
(5,753 |
) |
19,643 |
|
Other comprehensive income that will not be reclassified to income for the period |
|
|
|
|
|
|
|
TOTAL OTHER COMPREHENSIVE INCOME |
|
|
|
(5,753 |
) |
19,643 |
|
|
|
|
|
|
|
|
|
TOTAL CONSOLIDATED COMPREHENSIVE INCOME |
|
|
|
374,967 |
|
347,554 |
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
Banks owners |
|
|
|
374,967 |
|
347,553 |
|
Non-controlling interest |
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
Comprehensive net income per share attributable to Banks owners: |
|
|
|
Ch$ |
|
Ch$ |
|
Basic net income per share |
|
|
|
4.03 |
|
3.95 |
|
Diluted net income per share |
|
|
|
4.03 |
|
3.95 |
|
The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the nine-month ended September 30, 2013 and 2012
(Translation of financial statements originally issued in Spanish)
(Expressed in millions of Chilean pesos)
|
|
|
|
|
|
Reserves |
|
Other comprehensive income |
|
Retained earnings |
|
|
|
|
|
|
| ||||||||||
|
|
Notes |
|
Paid-in |
|
Other |
|
Reserves |
|
Unrealized for- sale |
|
Derivatives |
|
Cumulative |
|
Retained |
|
Income for |
|
Provision |
|
Attributable |
|
Non- controlling |
|
Total |
|
|
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances as of December 31, 2011 |
|
|
|
1,436,083 |
|
32,256 |
|
87,226 |
|
(1,644 |
) |
(395 |
) |
(36 |
) |
16,379 |
|
428,805 |
|
(259,501 |
) |
1,739,173 |
|
2 |
|
1,739,175 |
|
Capitalization of retained earnings |
|
27 |
|
73,911 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(73,911 |
) |
|
|
|
|
|
|
|
|
Retention (released) earnings |
|
27 |
|
|
|
|
|
58,092 |
|
|
|
|
|
|
|
|
|
(58,092 |
) |
|
|
|
|
|
|
|
|
Dividends distributions and paid |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(296,802 |
) |
259,501 |
|
(37,301 |
) |
(2 |
) |
(37,303 |
) |
Other comprehensive income: |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative translation adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
(65 |
) |
|
|
|
|
|
|
(65 |
) |
|
|
(65 |
) |
Cash flow hedge adjustment, net |
|
|
|
|
|
|
|
|
|
|
|
1,044 |
|
|
|
|
|
|
|
|
|
1,044 |
|
|
|
1,044 |
|
Valuation adjustment on available-for-sale instruments, net |
|
|
|
|
|
|
|
|
|
18,666 |
|
|
|
|
|
|
|
|
|
|
|
18,666 |
|
|
|
18,666 |
|
Income for the period 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
327,910 |
|
|
|
327,910 |
|
1 |
|
327,911 |
|
Provision for minimum dividends |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(214,885 |
) |
(214,885 |
) |
|
|
(214,885 |
) |
Balances as of September 30, 2012 |
|
|
|
1,509,994 |
|
32,256 |
|
145,318 |
|
17,022 |
|
649 |
|
(101 |
) |
16,379 |
|
327,910 |
|
(214,885 |
) |
1,834,542 |
|
1 |
|
1,834,543 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative translation adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
7 |
|
|
|
|
|
|
|
7 |
|
1 |
|
8 |
|
Cash flow hedge adjustment, net |
|
|
|
|
|
|
|
|
|
|
|
385 |
|
|
|
|
|
|
|
|
|
385 |
|
|
|
385 |
|
Valuation adjustment on available-for-sale instruments, net |
|
|
|
|
|
|
|
|
|
973 |
|
|
|
|
|
|
|
|
|
|
|
973 |
|
|
|
973 |
|
Subscribed and paid shares |
|
|
|
119,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
119,084 |
|
|
|
119,084 |
|
Income for the period 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,940 |
|
|
|
137,940 |
|
|
|
137,940 |
|
Provision for minimum dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(85,874 |
) |
(85,874 |
) |
|
|
(85,874 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances as of December 31, 2012 |
|
|
|
1,629,078 |
|
32,256 |
|
145,318 |
|
17,995 |
|
1,034 |
|
(94 |
) |
16,379 |
|
465,850 |
|
(300,759 |
) |
2,007,057 |
|
2 |
|
2,007,059 |
|
Capitalization of retained earnings |
|
27 |
|
86,202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(86,202 |
) |
|
|
|
|
|
|
|
|
Retention (released) earnings |
|
27 |
|
|
|
|
|
36,193 |
|
|
|
|
|
|
|
|
|
(36,193 |
) |
|
|
|
|
|
|
|
|
Dividends distributions and paid |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(343,455 |
) |
300,759 |
|
(42,696 |
) |
(1 |
) |
(42,697 |
) |
Other comprehensive income: |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative translation adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
39 |
|
|
|
|
|
|
|
39 |
|
|
|
39 |
|
Cash flow hedge adjustment, net |
|
|
|
|
|
|
|
|
|
|
|
(13,112 |
) |
|
|
|
|
|
|
|
|
(13,112 |
) |
|
|
(13,112 |
) |
Valuation adjustment on available-for-sale instruments (net) |
|
|
|
|
|
|
|
|
|
7,320 |
|
|
|
|
|
|
|
|
|
|
|
7,320 |
|
|
|
7,320 |
|
Subscribed and paid shares |
|
27 |
|
134,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
134,071 |
|
|
|
134,071 |
|
Income for the period 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
380,720 |
|
|
|
380,720 |
|
|
|
380,720 |
|
Provision for minimum dividends |
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(247,569 |
) |
(247,569 |
) |
|
|
(247,569 |
) |
Balances as of September 30, 2013 |
|
|
|
1,849,351 |
|
32,256 |
|
181,511 |
|
25,315 |
|
(12,078 |
) |
(55 |
) |
16,379 |
|
380,720 |
|
(247,569 |
) |
2,225,830 |
|
1 |
|
2,225,831 |
|
The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine-month ended September 30, 2013 and 2012
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
|
|
Notes |
|
September |
|
September |
|
|
|
|
|
MCh$ |
|
MCh$ |
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
Net income for the period |
|
|
|
380,720 |
|
327,911 |
|
Items that do not represent cash flows: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
35 |
|
21,332 |
|
23,267 |
|
Impairment of intangible assets and property and equipment |
|
35 |
|
133 |
|
648 |
|
Provision for loan losses |
|
32 |
|
186,118 |
|
164,370 |
|
Provision of contingent loans |
|
32 |
|
10,632 |
|
2,909 |
|
Fair value adjustment of financial assets held-for-trading |
|
|
|
(282 |
) |
626 |
|
Income attributable to investments in other companies |
|
14 |
|
(1,792 |
) |
(648 |
) |
Income from sales of assets received in lieu of payment |
|
36 |
|
(3,627 |
) |
(5,246 |
) |
Net gain on sales of property and equipment |
|
|
|
(205 |
) |
(224 |
) |
(Increase) decrease in other assets and liabilities |
|
|
|
(15,828 |
) |
(6,244 |
) |
Charge-offs of assets received in lieu of payment |
|
37 |
|
1,308 |
|
1,974 |
|
Other charges (credits) to income that do not represent cash flows |
|
|
|
4,865 |
|
(466 |
) |
(Gain) loss from foreign exchange transactions of other assets and other liabilities |
|
|
|
(55,566 |
) |
(38,070 |
) |
Net changes in interest and fee accruals |
|
|
|
28,759 |
|
21,374 |
|
Changes in assets and liabilities that affect operating cash flows: |
|
|
|
|
|
|
|
(Increase) decrease in loans and advances to banks, net |
|
|
|
666,372 |
|
(144,957 |
) |
(Increase) decrease in loans to customers |
|
|
|
(1,799,468 |
) |
(1,146,224 |
) |
(Increase) decrease in financial assets held-for-trading, net |
|
|
|
(191,188 |
) |
123,829 |
|
(Increase) decrease in deferred taxes, net |
|
17 |
|
403 |
|
(13,113 |
) |
(Increase) decrease in current account and other demand deposits |
|
|
|
456,348 |
|
107,096 |
|
(Increase) decrease in payables from repurchase agreements and security lending |
|
|
|
21,656 |
|
56,397 |
|
(Increase) decrease in savings accounts and time deposits |
|
|
|
717,671 |
|
673,172 |
|
Proceeds from sale of assets received in lieu of payment |
|
|
|
5,593 |
|
7,074 |
|
Total cash flows from operating activities |
|
|
|
433,954 |
|
155,455 |
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
(Increase) decrease in financial assets available-for-sale, net |
|
|
|
(532,350 |
) |
81,974 |
|
Purchases of property and equipment |
|
16 |
|
(8,535 |
) |
(15,285 |
) |
Proceeds from sales of property and equipment |
|
|
|
491 |
|
119 |
|
Purchases of intangible assets |
|
15 |
|
(3,773 |
) |
(6,001 |
) |
Investments in other companies |
|
14 |
|
(1,440 |
) |
(71 |
) |
Dividends received from investments in other companies |
|
14 |
|
931 |
|
915 |
|
Total cash flows from investing activities |
|
|
|
(544,676 |
) |
61,651 |
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
Proceeds of mortgage finance bonds |
|
|
|
|
|
|
|
Repayment of mortgage finance bonds |
|
|
|
(15,869 |
) |
(20,791 |
) |
Proceeds from bond issuances |
|
22 |
|
1,245,262 |
|
815,989 |
|
Redemption of bond issuances |
|
|
|
(484,375 |
) |
(244,075 |
) |
Proceeds from subscription and payment of shares |
|
27 |
|
134,071 |
|
|
|
Dividends paid |
|
27 |
|
(343,455 |
) |
(296,802 |
) |
(Increase) decrease in borrowings from financial institutions |
|
|
|
(392,878 |
) |
19,285 |
|
(Increase) decrease in other financial obligations |
|
|
|
15,731 |
|
(33,206 |
) |
(Increase) decrease in borrowings from Central Bank of Chile |
|
|
|
|
|
(22,793 |
) |
Borrowings from Central Bank of Chile (long-term) |
|
|
|
|
|
15 |
|
Payment of borrowings from Central Bank of Chile (long-term) |
|
|
|
(7 |
) |
(48 |
) |
Long-term foreign borrowings |
|
|
|
622,630 |
|
336,103 |
|
Payment of long-term foreign borrowings |
|
|
|
(460,418 |
) |
(815,838 |
) |
Proceeds from other long-term borrowings |
|
|
|
538 |
|
666 |
|
Payment of other long-term borrowings |
|
|
|
(3,821 |
) |
(4,270 |
) |
Total cash flows from financing activities |
|
|
|
317,409 |
|
(265,765 |
) |
TOTAL NET POSITIVE CASH FLOWS FOR THE PERIOD |
|
|
|
206,687 |
|
(48,659 |
) |
Net effect of exchange rate changes on cash and cash equivalents |
|
|
|
33,848 |
|
(34,148 |
) |
Cash and cash equivalents at beginning of year |
|
|
|
1,236,324 |
|
1,429,908 |
|
Cash and cash equivalents at end of period |
|
7 |
|
1,476,859 |
|
1,347,101 |
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
2013 |
|
2012 |
|
Cash paid during the year for: |
|
|
|
MCh$ |
|
MCh$ |
|
Interest received |
|
|
|
1,240,417 |
|
1,184,733 |
|
Interest paid |
|
|
|
(442,965 |
) |
(478,675 |
) |
The accompanying notes 1 to 41 are an integral part of these interim condensed consolidated financial statements
BANCO DE CHILE AND SUBSIDIARIES
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Translation of financial statements originally issued in Spanish)
(Expressed in million of Chilean pesos)
Banco de Chile is authorized to operate like a commercial bank since September 17, 1996, in conformity with the Article 25 of Law No. 19,396. Banco de Chile, resulting from the merger of Banco Nacional de Chile, Banco Agrícola and Banco de Valparaíso, was formed on October 28, 1893 in the city of Santiago, in the presence of the Notary Eduardo Reyes Lavalle.
Banco de Chile (Banco de Chile or the Bank) is a Corporation organized under the laws of the Republic of Chile, regulated by the Superintendency of Banks and Financial Institutions (SBIF), Since 2001, - when the bank was first listed on the New York Stock Exchange (NYSE), in the course of its American Depository Receipt (ADR) program, which is also registered at the London Stock Exchange Banco de Chile additionally follows the regulations published by the United States Securities and Exchange Commission (SEC), Banco de Chiles shares are also listed on the Latin American securities market of the Madrid Stock Exchange (LATIBEX). As indicate in Note No. 41 Subsequent Events since October 18, 2013 the Bank has resolved to exclude its shares of this stock exchange.
Banco de Chile offers a broad range of banking services to its customers, ranging from individuals to large corporations. The services are managed in large corporate banking, middle and small corporate banking, personal banking services and retail. Additionally, the Bank offers international as well as treasury banking services. The Banks subsidiaries provide other services including securities brokerage, mutual fund and investment management, factoring, insurance brokerage, financial advisory and securitization.
Banco de Chiles legal address is Paseo Ahumada 251, Santiago, Chile and its website is www.bancochile.cl.
The Interim Condensed Consolidated Financial Statements of Banco de Chile, for the period ended September 30, 2013 were approved for issuance in accordance with the directors on October 24, 2013.
2. Legal provisions, basis of preparation and other information:
(a) Legal provisions:
The General Banking Law in its Article No.15 authorizes the Chilean Superintendency of Banks (SBIF) to issue generally applicable accounting standards for entities it supervises. The Corporations Law, in turn, requires generally accepted accounting principles to be followed.
Based on the aforementioned laws, banks should use the criteria provided by the Superintendency in accordance with the Compendium of Accounting Standards, and any matter not addressed therein, as long as it does not contradict its instructions, should adhere to generally accepted accounting principles in technical standards issued by the Chilean Association of Accountants, that coincide with international accounting standards and international financial reporting standards agreed upon by the International Accounting Standards Board (IASB). Should there be discrepancies between these generally accepted accounting principles and the accounting criteria issued by the SBIF, the latter shall prevail.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Legal provisions, basis of preparation and other information, continued:
(b) Basis of preparation:
(b.1) These Interim Condensed Consolidated Financial Statements are presented according to Chapter C-2 of the Compendium of Accounting Standards, issued by the Superintendency of Banks and Financial Institutions (SBIF).
(b.2) The following table details the entities in which the Bank directly or indirectly owns a controlling interest and that are therefore consolidated in these financial statements:
|
|
|
|
|
|
|
|
Interest Owned |
| ||||||||||
|
|
|
|
|
|
|
|
Direct |
|
Indirect |
|
Total |
| ||||||
|
|
|
|
|
|
Functional |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
Rut |
|
Subsidiaries |
|
Country |
|
Currency |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
|
|
|
|
|
|
% |
|
% |
|
% |
|
% |
|
% |
|
% |
|
44,000,213-7 |
|
Banchile Trade Services Limited |
|
Hong Kong |
|
US$ |
|
100.00 |
|
100.00 |
|
|
|
|
|
100.00 |
|
100.00 |
|
96,767,630-6 |
|
Banchile Administradora General de Fondos S.A. |
|
Chile |
|
Ch$ |
|
99.98 |
|
99.98 |
|
0.02 |
|
0.02 |
|
100.00 |
|
100.00 |
|
96,543,250-7 |
|
Banchile Asesoría Financiera S.A. |
|
Chile |
|
Ch$ |
|
99.96 |
|
99.96 |
|
|
|
|
|
99.96 |
|
99.96 |
|
77,191,070-K |
|
Banchile Corredores de Seguros Ltda. |
|
Chile |
|
Ch$ |
|
99.83 |
|
99.83 |
|
0.17 |
|
0.17 |
|
100.00 |
|
100.00 |
|
96,894,740-0 |
|
Banchile Factoring S.A. (*) |
|
Chile |
|
Ch$ |
|
|
|
99.75 |
|
|
|
0.25 |
|
|
|
100.00 |
|
96,571,220-8 |
|
Banchile Corredores de Bolsa S.A. |
|
Chile |
|
Ch$ |
|
99.70 |
|
99.70 |
|
0.30 |
|
0.30 |
|
100.00 |
|
100.00 |
|
96,932,010-K |
|
Banchile Securitizadora S.A. |
|
Chile |
|
Ch$ |
|
99.00 |
|
99.00 |
|
1.00 |
|
1.00 |
|
100.00 |
|
100.00 |
|
96,645,790-2 |
|
Socofin S.A. |
|
Chile |
|
Ch$ |
|
99.00 |
|
99.00 |
|
1.00 |
|
1.00 |
|
100.00 |
|
100.00 |
|
96,510,950-1 |
|
Promarket S.A. |
|
Chile |
|
Ch$ |
|
99.00 |
|
99.00 |
|
1.00 |
|
1.00 |
|
100.00 |
|
100.00 |
|
(*) See note No.5 (j) of Relevant events
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Legal provisions, basis of preparation and other information, continued:
(c) Use of estimates and judgment:
Preparing financial statements requires management to make judgments, estimations and assumptions that affect the application of accounting policies and the valuation of assets, liabilities, income and expenses presented. Real results could differ from these estimated amounts. Details on the use of estimates and judgment and their effect on the amounts recognized in the Interim Condensed Consolidated Financial Statement are included in the following notes:
1. Goodwill valuation (Note No. 15);
2. Useful lives of property and equipment and intangible assets (Notes No. 15 and No. 16);
3. Income taxes and deferred taxes (Note No. 17);
4. Provisions (Note No. 24);
5. Commitments and contingencies (Note No. 26);
6. Provision for loan losses (Note No. 32);
7. Impairment of other financial assets (Note No. 35);
8. Fair value of financial assets and liabilities (Note No. 39).
During period 2013, the Bank has made a modification to the derivatives valuation model. This consists in the incorporation of Counterparty Value Adjustment (CVA) in the valuation of derivatives, to reflect the counterparty risk in determining the fair value. In accordance with IAS 8 Accounting Policies: Changes in Accounting Estimates and Errors, this modification has been treated as a change in accounting estimate and its effect recorded in earnings. The effect of this change involved an initial charge of income of Ch$7,821 million.
There have been no significant changes to estimates made during period 2013, except for the above.
(d) Seasonality or Cyclical Character of the Transactions of the Intermediate Period:
Due to the nature of its business, the Bank and its subsidiaries activities do not have a cyclical or seasonal character. Accordingly, no specific details have been included on the notes to this Interim Condensed Consolidated Financial Statements with the information regarding the period of nine-month ended September 30, 2013.
(e) Relative Importance:
When determining the information to present on the different items from the financial statements or other subjects, the Bank has considered the relative importance in relation to the Interim Condensed Consolidated financial statements of the period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
2. Legal provisions, basis of preparation and other information, continued:
(f) Reclassifications:
During this period, the expense that, by their nature is directly related with credit cards was reclassified from Other operational expenses to Expenses from fees and commissions, in order to relate them better with the revenues from that product. The effect of this reclassification is the following:
|
|
Balance |
|
Reclassification |
|
Reclassified |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
Expenses from fees and commissions |
|
(48,089 |
) |
(14,737 |
) |
(62,826 |
) |
Other operational expenses |
|
(39,862 |
) |
14,737 |
|
(25,125 |
) |
This reclassification does not affect any comply of covenants.
There are not other significant reclassifications at the end period 2013, different to described above.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
3. New Accounting Pronouncements:
The following is a summary of new standards, interpretations and improvements to the International Financial Reporting Standards issued by the International Accounting Standards Board (IASB) and rules issued by the Superintendency of Banks and Financial Institutions (SBIF), as per the following detail:
3.1 Accounting rules issued by IASB:
IAS 32 Financial Instruments: Presentation
The amendments issued in December 2011, clarify the meaning of currently has a legally enforceable right to set-off. The amendments also clarify the application of the IAS 32 offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. The standard is effective for annual periods beginning on or after January 1, 2014 and early adoption is permitted.
According to current rules about netting force in Chile, this rule has no impact on the consolidated financial statements of Banco de Chile and its subsidiaries.
IAS 36 Impairment assets
On May 29, 2013, the IASB issued amendments to IAS 36 respect to disclosures information related to recoverable amount of impaired assets, if this amount corresponded to fair value less disposal cost. These modifications are related to IFRS 13: Fair Value measurement.
The amendments will be applied retrospectively to annual periods beginning in January 1, 2014. Early adoption is permitted for the periods that the entity has applied IFRS 13.
The Bank and its subsidiaries appraises that this amendment will not have impact in the consolidated financial statements.
IAS 39 Financial Instruments: Recognition and Measurement
On June 27, 2013 the IASB issue amendments to IAS 39 related to continuing hedge accounting after novation. This amendment provides an exception to the requirement to discontinue hedge accounting in situations where over-the-counter (OTC) derivatives designated in hedging relationships are directly or indirectly, novated to a central counterparty (CCP) as a consequence of laws or regulations, or the introduction of laws or regulations.
The effective date for annual periods beginning on or after January 1, 2014. Early adoption is permitted.
The Bank will make updates related to documentation that will be required and adjustments in operating process for compliance of novations. It is important to say that the hedges will not be interrupted for this novation, so there is no impact in financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
3. New Accounting Pronouncements, continued:
IFRS 9 Financial Instruments: Financial liabilities
In October, 2010, the IASB published the requirements for classifying and measuring financial liabilities were added to IFRS 9. Most of the added requirements were carried forward unchanged from IAS 39. However, the requirements related to the fair value option for financial liabilities were changed to address the issue of own credit risk in response to consistent feedback from users of financial statements and others that the effects of changes in a liabilitys credit risk ought not to affect profit or loss unless the liability is held for trading.
The mandatory effective date for annual periods beginning on or after January 1, 2015.
IFRS 9 Financial Instruments: Recognition and Measurement
In November 2009, the IASB issued IFRS 9, Financial Instruments, the first step in its project to replace IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 introduces new requirements for classifying and measuring financial assets that are in the scope of the application of IAS 39. This new regulation requires that all financial assets be classified in function of the entitys business model for the management of financial assets and of the characteristics of the contractual cash flows of financial assets. A financial asset shall be measured at amortized cost if two criteria are fulfilled: (a) the objective of the business model is to maintain a financial asset to receive contractual cash flows, and (b) contractual cash flows represent principal and interest payments. Should a financial asset not comply with the aforementioned conditions, it will be measured at fair value. In addition, this standard allows a financial asset that fulfills the criteria to be valued at amortized cost to be designated at fair value with changes in income under the fair value option, as long as this significantly reduces or eliminates an accounting asymmetry. Likewise, IFRS 9 eliminates the requirement of separating embedded derivatives from the host financial assets. Therefore, it requires that a hybrid contract be classified entirely in amortized cost or fair value.
IFRS 9 requires, mandatory and prospective way, that the entity makes reclassifications of financial assets when the entity modifies the business model.
Under IFRS 9, all equity investments of are measured at fair value. However, the Management has the option of present the changes of fair value in the item Other Comprehensive Income in equity. This accounting treatment is available for the initial recognition of an instruments and it is irrevocable. The unrealized income (loss) recognized in Other Comprehensive Income, derived from the changes of fair value, and must be not included in income statements.
IFRS 9 is effective for annual periods commencing as of January 1, 2015, and allows adoption prior to that date. IFRS 9 must be applied retroactively, however if it is adopted before January 1, 2012, there is no need to reformulate comparative periods.
Banco de Chile and its subsidiaries are assessing the possible impact of adoption of these changes on the consolidated financial statements, however, that impact will depend on the assets maintained by the institution as of the adoption date. It is not practicable to quantify the effect on the issuance of these consolidated financial statements. To date, neither of these standards has been approved by the Superintendency of Banks, event that is required for their application.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
3. New Accounting Pronouncements, continued:
IFRS 10 Consolidated Financial Statement, IFRS 12 Disclosure of Interests in Other Entities and IAS 27 Separate Financial Statements
The Amendments to IFRS 10, IFRS 12 and IAS 27 incorporate a definition of an investment entity and also introduce an exception to consolidate certain subsidiaries owned investment entities. These amendments require an entity to measure investment considered its investments in subsidiaries at fair value through profit or loss in accordance with IFRS 9 instead of consolidating such subsidiaries.
Amendments also introduce new disclosure requirements related to investment entities IFRS 12 and IAS 27.
If an entity applies these amendments but not applies IFRS 9 yet, any reference in this document to IFRS 9 must be interpreted as a reference to IAS 39 Financial Instruments: Recognition and Measurement.
The standard is effective for annual periods beginning on or after January 1, 2014 and early adoption is permitted.
3.2 Accounting rules issued by SBIF:
On March 19, 2013 the Superintendency of Banks issued a Circular No. 3,548 that modified the following:
(a) The instructions relative to the presentation of Statements of Income for matching the names used in the Compendium of Accounting Standards issued by the Chilean Superintendency of Banks with last modifications of IAS 1.
The expressions: Statement of Income and Statement of Comprehensive Income must be replaced by Statement of Income for the Period and Statement of Other Comprehensive Income for the Period respectively.
(b) Accurate presentation of income (loss) that originate in the case of sale portfolio loans, stipulated that the net income (loss) for sale portfolio loans classified in the item Net financial operating income, corresponds to differences between the cash perceived (or fair value of the instruments that are received as consideration) and the value net of provisions of the transferred assets, registered at the sale date.
Before this regulatory change, the net income (loss) of sale portfolio loans, corresponded to differences between the cash perceived (or fair value of the instruments that are received as consideration) and the gross value of transferred assets, proceeding after to release of the established provisions for that loans, being this last effect recognized in the item Provisions for loan losses of the Income Statements of the Periods.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
4. Changes in Accounting Policies and Disclosures:
During the period ended September 30, 2013, there have not been significant accounting changes that affect the presentation of consolidated financial statements.
(a) On January 04, 2013 Banco de Chile has concluded the execution process of the insurance agreements between Banco de Chile and its subsidiary Banchile Corredores de Seguros Limitada, with Banchile Seguros de Vida S.A., which were entered into through private instruments dated on December 28, 2012, which are:
(1) Brokerage Agreement entered into by the affiliate Banchile Corredores de Seguros Limitada and the related company Banchile Seguros de Vida S.A.
(2) Agreements entered into by Banco de Chile and Banchile Seguros de Vida S.A.:
i) Collection and Data Administration Agreement.
ii) Use Agreement for Distribution Channels.
iii) Banchiles Trademark License Agreement.
iv) Credit Life Insurance Agreement.
(3) Framework agreement for Insurance Banking, entered into by Banco de Chile, Banchile Corredores de Seguros Limitada and Banchile Seguros de Vida S.A.
All of the agreements have a duration of 3 years effective from January 1, 2013, excluding those insurances, as applicable, that are related to loan mortgages subject to public bid in accordance with article 40 of DFL No. 251 of 1931.
It is worth noting that Banchile Seguros de Vida S.A. is a related party to Banco de Chile in accordance with Article 146 of the Chilean Corporations Law. In turn, Banchile Corredores de Seguros Limitada is a subsidiary of Banco de Chile, incorporated pursuant to Article 70 letter a) of the Chilean Banking Act.
(b) On January 17, 2013 the Central Bank of Chile, in session No.1730-02-130117 held on that day, agreed and determined, in accordance with article 30 letter b) of Law No. 19,396, the selling price of the subscription options pertaining the 1,279,502,316 (Banco de Chile-T series) cash shares issued by Banco de Chile as agreed during the Extraordinary Shareholders Meeting held on October 17, 2012. Those shares are owned by Sociedad Administradora de la Obligación Subordinada SAOS S.A. and are pledged as collateral to the Chilean Central Bank.
The above referred subscription options shall be preferentially offered to shareholders of series A, B and D of Sociedad Matriz del Banco de Chile S.A. during the so called Special Preferential Rights Offering Period which will begin running on January 19, 2013, and shall be elapsed on February 17, 2013.
In accordance with the above referred resolution of the Council of the Central Bank of Chile, the price of each option shall be as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
5. Relevant Events, continued:
The price of the subscription option, hereinafter the Option Price, shall correspond to the higher value between Ch$0.1 and the value resulting from the difference obtained after multiplying 0.9752 over the average stock trading price of Banco de Chile´s shares registered in local stock exchanges during the three business trading days preceding the date in which the corresponding option is acquired, hereinafter the Weighted Average Share Price (Precio Promedio Ponderado de la Acción), and Ch$62.0920.
For these purposes, the Weighted Average Share Price was determined, for each day, in accordance to the weighted average price of Banco de Chile´s shares traded during the three business trading days preceding the date in which the corresponding option is acquired, having in mind that the value corresponding to the Weighted Average Price, in relation to the beginning of the Special Preferential Rights Offering Period shall be of Ch$71.4. This value considers the resulting prices from the Ordinary Preferential Rights Offering Period referred to in letter a) of article 30 of Law N°19,396, so that, initially, the Option Price shall correspond to Ch$7.5 per each Banco de Chile´s share, and subsequently, he Option Price shall be determined pursuant to the Weighted Average Share Price, as explained before.
In any event, and for the purposes of selling the subscription options, the Option Price shall corresponded to Ch$7.5 for each Banco de Chile´s share, as long as the Weighted Average Share Price, determined as described before, does not exceed Ch$76.9 nor be less than Ch$71.3.
The Option Price that is determined in accordance with the aforementioned shall be paid up front pursuant to the conditions set forth by Banco de Chile for purposes of the Banks capital increase and its calculation procedure shall also be governed by the term established in the final paragraph of letter b) of article 30 of the Law No. 19,396, in accordance to the conditions established by the same legal provision.
In addition, the Central Bank of Chile resolved that Sociedad Administradora de la Obligación Subordinada SAOS S.A. shall preferentially offer the options to the mentioned shareholders at the price singularized before. The price was notified by Sociedad Administradora de la Obligación Subordinada SAOS S.A. to the Central Bank of Chile and also be informed to interested persons at the beginning of each day of the Special Preferential Rights Offering Period.
(c) On January 24, 2013 in the Ordinary Meeting No. BCH 2,769, the Board of Directors of Banco de Chile resolved to call an Ordinary Shareholders Meeting to be held on the 21th of March, 2013 with the objective of proposing, among other matters, the distribution of the Dividend number 201 of Ch$3.41625263165 per every of the 88,037,813,511 Banco de Chile shares, which will be payable at the expense of the distributable net income obtained during the fiscal year ending the 31st of December, 2012, corresponding to 70% of such income.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
5. Relevant Events, continued:
In the Ordinary and Extraordinary Banco de Chiles meetings held on March 21, 2013 it was agreed to comply the previous agreements.
Likewise, the Board of Directors resolved to call an Extraordinary Shareholders Meeting to be held on the same date in order to propose, among other things, the capitalization of 30% of the distributable net income obtained during the fiscal year ending the 31st of December, 2012, through the issuance of fully paid-in shares, of no par value, with a value of Ch$71.97 per Banco de Chile share which will be distributed among the shareholders in the proportion of 0.02034331347 shares for each Banco de Chile share, and to adopt the agreements that are necessary in this regard, subject to the exercise of the options established in article 31 of Law 19,396.
(d) On March 21, 2013 Banco de Chile informed that the Ordinary Shareholders Meeting of the Bank held today, agreed to definitely appoint Mr. Francisco Aristeguieta Silva as Director of the Bank, position that he will hold until the next renewal of the Board.
(e) On March 26, 2013 the Central Bank of Chile communicated to Banco de Chile that in the Extraordinary Session, No. 1742E, held today, the Board of the Central Bank of Chile resolved to request its corresponding surplus, from the fiscal year ended on December 31, 2012, including the proportional part of the profits agreed upon capitalization, be paid in cash currency.
(f) On March 27, 2013 Mr. Guillermo Luksic Craig. died, an important member of our Board since 2001 and member of controlling group of our Bank.
(g) According to Note 27 (a) during April concluded the process of subscription and payment of shares of increase capital authorized in the Extraordinary Shareholders Meeting held on October 17, 2012.
(h) On April 11, 2013 in Extraordinary Meeting appointed to Mr. Jean-Paul Luksic Fontbona like Director, until the next Ordinary Shareholders Meeting, replacing to Mr. Guillermo Luksic Craig.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
5. Relevant Events, continued:
(i) On May 13, 2013 and regarding the capitalization of 30% of the distributable net income obtained during the fiscal year ending as of December 31, 2012, through the issuance of fully paid-in shares, agreed in the Extraordinary Shareholders Meeting held on the March 21, 2013, it is informed the following information:
a) In the Extraordinary Shareholders Meeting mentioned above, it was agreed to increase the Bank´s capital in the amount of Ch$86,201,422,505 through the issuance of 1,197,741,038 fully paid-in shares, of no par value, payable under the distributable net income for the year 2012 that was not distributed as dividends as agreed at the Ordinary Shareholders Meeting held on the same day.
The Chilean Superintendency of Banks and Financial Institutions approved the amendment of the bylaws, through resolution No. 126 dated April 30, 2013, which was registered on page 34,465, No. 23,083 of the register of the Chamber of Commerce of Santiago for the year 2013, and was published at Diario Oficial on May 8, 2013.
The issuance of fully in paid shares was registered in the Securities Register of the Superintendence of Banks and Financial Institutions with No. 2/2013, on May 10, 2013.
b) The Board of Directors of Banco de Chile, at the meeting No. 2,775, dated May 09, 2013, set May 30, 2013, as the date for issuance and distribution of the fully paid in shares.
c) The shareholders are entitled to receive the new shares, at a ratio of 0.02034331347 fully in paid shares for each Banco de Chile share, shall be those registered in the Register of Shareholders on May 24, 2013.
d) In accordance to the first transitory article of the Banks bylaws, Banco de Chile-T shares issued as a consequence of the capital increase agreed on the Extraordinary Shareholders Meeting held on October 17, 2012, do not allow their holders to receive dividends or fully paid-in shares in respect to Banco de Chiles net distributable earnings for fiscal year 2012. Once any dividends and/or fully paid-in shares are distributed, the Banco de Chile-T series shares automatically convert to Banco de Chile ordinary shares.
e) The titles were duly assigned to each shareholder. The Bank only print the titles for those shareholders who request it in writing at the Shareholders Department of Banco de Chile.
f) As a consequence of the issuance of the fully in paid shares, the capital of the Bank will be divided in 93,175,043,991 nominative shares, without par value, completely subscribed and paid.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
5. Relevant Events, continued:
(j) On July 1, 2013 it is informed that through Public Deed dated June 19, 2013 in Notary´s office Raul Perry Pefaur of Santiago, Banco de Chile has acquired the totally of shares of Banchile Asesoría Financiera S.A. in the entity Banchile Factoring S.A, subsidiary of Banco de Chile, taking over assets and liabilities of such subsidiary.
According to Article 103 No. 2 of Law No. 18,046 of Corporate Law, it has elapsed an uninterrupted period of more 10 of days. Consequently as of 30th. of June, it has dissolved Banchile Factoring S.A., so 100% of shares belong to Banco de Chile, which since 30th. of June is its legal successor.
(k) On August 9, 2013 it was informed that in Ordinary Board Meeting held on 8th. of August, the Board accepted resignation of Director Fernando Concha Ureta, with effective date on August 21, 2013
Since August 22, 2013 the Board designated to Juan Enrique Pino Visinteiner like Director until next Ordinary Shareholders Meeting
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
For management purposes, the Bank has organized its operations and commercial strategies into four business segments, which are defined in accordance with the type of products and services offered to target customers. These business segments are currently defined as follows:
Retail: This segment focuses on individuals and small and medium-sized companies with annual sales up to 70,000UF, where the product offering focuses primarily on consumer loans, commercial loans, checking accounts, credit cards, credit lines and mortgage loans.
Wholesale: This segment focused on corporate clients and large companies, whose annual revenue exceed 70,000UF, where the product offering focuses primarily on commercial loans, checking accounts and liquidity management services, debt instruments, foreign trade, derivative contracts and leases.
Treasury and money market operations:
This segment includes revenue associated with managing the Banks balance sheet (currencies, maturities and interest rates) and liquidity, including financial instrument and currency trading on behalf of the Bank itself, and lesser extent in the item Interest revenue
Transactions on behalf of customers carried out by the Treasury are reflected in the respective aforementioned segments. These products are highly transaction-focused and include foreign exchange transactions, derivatives and financial instruments in general.
Subsidiaries: Corresponds to companies and corporations controlled by the Bank, where income is obtained individually by the respective subsidiary. The companies that comprise this segment are:
Entity |
|
· Banchile Trade Services Limited |
· Banchile Administradora General de Fondos S.A. |
· Banchile Asesoría Financiera S.A. |
· Banchile Corredores de Seguros Ltda. |
· Banchile Factoring S.A. (*) |
· Banchile Corredores de Bolsa S.A. |
· Banchile Securitizadora S.A. |
· Socofin S.A. |
· Promarket S.A. |
(*) See Note No. 5 (j) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
6. Segment Reporting, continued:
The financial information used to measure the performance of the Banks business segments is not necessarily comparable with similar information from other financial institutions because it is based on internal reporting policies. The accounting policies used to prepare the Banks operating segment information are similar as those described in Summary of Significant Accounting Principles. The Bank obtains the majority of its income from: interest, revaluations and fees, discounted the credit cost and expenses. Management is mainly based on these concepts in its evaluation of segment performance and decision-making regarding goals, allocation of resources for each unit individually. Although the results of the segments reconcile with those of the Bank at total level, it is not thus necessarily concerning the different concepts, since the management is measured and controls in individual form and additionally applies the following criteria:
· The net interest margin of loans and deposits is measured on an individual transaction and individual client basis, stemming from the difference between the effective customer rate and the related Banks fund transfer price in terms of maturity, re-pricing and currency.
· The internal performance profitability system considers capital allocation in each segment in accordance to the Basel guidelines.
· Operating expenses are distributed at each area level. The Bank allocates all of its indirect operating costs to each business segment by utilizing a different cost driver in order to allocate such costs to the specific segment.
The Bank did not enter into transactions with a particular customer or third parties that exceed 10% or more of its total income during the nine-month period ended September 30, 2013 and 2012.
Transfer pricing between operating segments are on an arms length basis in a manner similar to transactions with third parties.
Taxes are managed at a corporate level and are not allocated to business segments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
6. Segment Reporting, continued:
The following table presents the income by segment for the periods ended September 30, 2013 and 2012 for each of the segments defined above:
|
|
Retail |
|
Wholesale |
|
Treasury(1) |
|
Subsidiaries |
|
Subtotal |
|
Consolidation |
|
Total |
| ||||||||||||||
|
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
533,191 |
|
481,852 |
|
217,369 |
|
181,664 |
|
11,350 |
|
9,006 |
|
(288 |
) |
4,994 |
|
761,622 |
|
677,516 |
|
7,071 |
|
7,168 |
|
768,693 |
|
684,684 |
|
Net fees and commissions income (loss) |
|
113,794 |
|
113,752 |
|
32,162 |
|
29,440 |
|
(371 |
) |
(210 |
) |
78,527 |
|
77,945 |
|
224,112 |
|
220,927 |
|
(8,262 |
) |
(8,427 |
) |
215,850 |
|
212,500 |
|
Other operating income |
|
22,535 |
|
10,392 |
|
36,837 |
|
20,380 |
|
2,996 |
|
11,574 |
|
25,134 |
|
23,717 |
|
87,502 |
|
66,063 |
|
(9,127 |
) |
(9,127 |
) |
78,375 |
|
56,936 |
|
Total operating revenue |
|
669,520 |
|
605,996 |
|
286,368 |
|
231,484 |
|
13,975 |
|
20,370 |
|
103,373 |
|
106,656 |
|
1,073,236 |
|
964,506 |
|
(10,318 |
) |
(10,386 |
) |
1,062,918 |
|
954,120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions for loan losses |
|
(157,840 |
) |
(138,141 |
) |
(16,628 |
) |
(90 |
) |
(45 |
) |
84 |
|
696 |
|
563 |
|
(173,817 |
) |
(137,584 |
) |
|
|
|
|
(173,817 |
) |
(137,584 |
) |
Depreciation and amortization |
|
(15,018 |
) |
(15,603 |
) |
(4,225 |
) |
(5,498 |
) |
(765 |
) |
(999 |
) |
(1,324 |
) |
(1,167 |
) |
(21,332 |
) |
(23,267 |
) |
|
|
|
|
(21,332 |
) |
(23,267 |
) |
Other operating expenses |
|
(287,983 |
) |
(285,074 |
) |
(78,482 |
) |
(85,741 |
) |
(5,623 |
) |
(5,360 |
) |
(70,652 |
) |
(67,664 |
) |
(442,740 |
) |
(443,839 |
) |
10,318 |
|
10,386 |
|
(432,422 |
) |
(433,453 |
) |
Income attributable to associates |
|
1,060 |
|
384 |
|
618 |
|
193 |
|
65 |
|
21 |
|
301 |
|
259 |
|
2,044 |
|
857 |
|
|
|
|
|
2,044 |
|
857 |
|
Income before income taxes |
|
209,739 |
|
167,562 |
|
187,651 |
|
140,348 |
|
7,607 |
|
14,116 |
|
32,394 |
|
38,647 |
|
437,391 |
|
360,673 |
|
|
|
|
|
437,391 |
|
360,673 |
|
Income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(56,671 |
) |
(32,762 |
) |
Income after income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
380,720 |
|
327,911 |
|
(1) The Treasurys income of September 2013 considers effect of Counterparty Value Adjustment described in Note No. 2 (c), equivalent to Ch$7,821 million, of which MCh$6,945 million corresponds to this segment.
The following table presents assets and liabilities of the period ended September 30, 2013 and December 31, 2012 by each segment defined above:
|
|
Retail |
|
Wholesale |
|
Treasury |
|
Subsidiaries |
|
Subtotal |
|
Consolidation |
|
Total |
| ||||||||||||||
|
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
10,307,129 |
|
9,666,888 |
|
10,394,100 |
|
9,325,032 |
|
3,914,817 |
|
3,746,908 |
|
691,616 |
|
1,123,750 |
|
25,307,662 |
|
23,862,578 |
|
(193,323 |
) |
(731,339 |
) |
25,114,339 |
|
23,131,239 |
|
Current and deferred taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
138,979 |
|
129,827 |
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,253,318 |
|
23,261,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
7,864,055 |
|
7,548,472 |
|
9,700,477 |
|
8,978,963 |
|
5,074,678 |
|
4,495,605 |
|
542,706 |
|
908,796 |
|
23,181,916 |
|
21,931,836 |
|
(193,323 |
) |
(731,339 |
) |
22,988,593 |
|
21,200,497 |
|
Current and deferred taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,894 |
|
53,510 |
|
Total liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,027,487 |
|
21,254,007 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) Cash and cash equivalents and their reconciliation to the statement of cash flows at each period-end are detailed as follows:
|
|
September |
|
December |
|
|
|
MCh$ |
|
MCh$ |
|
Cash and due from banks: |
|
|
|
|
|
Cash |
|
465,027 |
|
400,249 |
|
Current account with the Chilean Central Bank(*) |
|
88,083 |
|
67,833 |
|
Deposits in other domestic banks |
|
44,986 |
|
15,295 |
|
Deposits abroad |
|
400,674 |
|
201,548 |
|
Subtotal - Cash and due from banks |
|
998,770 |
|
684,925 |
|
|
|
|
|
|
|
Net transactions in the course of collection |
|
199,411 |
|
237,393 |
|
Highly liquid financial instruments |
|
259,508 |
|
304,886 |
|
Repurchase agreements |
|
19,170 |
|
9,120 |
|
Total cash and cash equivalents |
|
1,476,859 |
|
1,236,324 |
|
(*) Amounts in cash and Central Bank deposits are regulatory reserve deposits for which the Bank must maintain a certain monthly average.
(b) Transactions in the course of collection:
Transactions in the course of settlement are transactions for which the only remaining step is settlement, which will increase or decrease the funds in the Central Bank or in foreign banks, normally occurring within 12 to 24 business hours, and are detailed as follows:
|
|
September |
|
December |
|
|
|
MCh$ |
|
MCh$ |
|
Assets |
|
|
|
|
|
Documents drawn on other banks (clearing) |
|
200,263 |
|
249,019 |
|
Funds receivable |
|
313,637 |
|
147,592 |
|
Subtotal transactions in the course of collection |
|
513,900 |
|
396,611 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Funds payable |
|
(314,489 |
) |
(159,218 |
) |
Subtotal transactions in the course of payment |
|
(314,489 |
) |
(159,218 |
) |
Net transactions in the course of collection |
|
199,411 |
|
237,393 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
8. Financial Assets Held-for-trading:
The detail of financial instruments classified as held-for-trading is as follows:
|
|
September |
|
December |
|
|
|
MCh$ |
|
MCh$ |
|
Instruments issued by the Chilean Government and Central Bank of Chile: |
|
|
|
|
|
Central Bank bonds |
|
82,026 |
|
25,585 |
|
Central Bank promissory notes |
|
3,102 |
|
3,068 |
|
Other instruments issued by the Chilean Government and Central Bank |
|
14,778 |
|
43,726 |
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
|
|
|
|
Promissory notes from deposits in domestic banks |
|
|
|
|
|
Mortgage bonds from domestic banks |
|
15 |
|
22 |
|
Bonds from domestic banks |
|
1,846 |
|
|
|
Deposits in domestic banks |
|
211,217 |
|
87,093 |
|
Bonds issued in Chile |
|
1,274 |
|
|
|
Other instruments issued in Chile |
|
3,368 |
|
188 |
|
|
|
|
|
|
|
Instruments issued by foreign institutions |
|
|
|
|
|
Instruments from foreign governments or central banks |
|
|
|
|
|
Other instruments issued abroad |
|
|
|
|
|
|
|
|
|
|
|
Mutual fund investments: |
|
|
|
|
|
Funds managed by related companies |
|
48,266 |
|
33,042 |
|
Funds managed by thirds |
|
|
|
|
|
Total |
|
365,892 |
|
192,724 |
|
Other instruments issued in Chile include instruments sold under agreements to repurchase to customers and financial instruments, amounting to MCh$158,881 as of September 30, 2013 (MCh$86,863 as of December 31, 2012).
Agreements to repurchase have an average expiration of 8 days as of period-end (11 days in December 2012).
Additionally, the Bank holds financial investments in mortgage finance bonds issued by itself in the amount of MCh$43,643 as of September 30, 2013 (MCh$51,154 as of September 30, 2012), which are presented as a reduction of the liability line item Debt issued.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
9. Cash collateral on securities borrowed and reverse repurchase agreements:
(a) The Bank provides financing to its customers through Receivables from Repurchase Agreements and Security Borrowing, in which the financial instrument serves as collateral. As of September 30, 2013 and December 31, 2012, the Bank has the following receivables resulting from such transactions:
|
|
Up to 1 month |
|
Over 1 month and up to 3 |
|
Over 3 months and up to |
|
Over 1 year and up to 3 |
|
Over 3 years and up to 5 |
|
Over 5 years |
|
Total |
| ||||||||||||||
|
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Instruments issued by the Chilean Governments and Central Bank of Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Bank bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Bank promissory notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued by the Chilean Government and Central Bank |
|
905 |
|
582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
905 |
|
582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Instruments issued in Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit promissory notes from domestic banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage bonds from domestic banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds from domestic banks |
|
8,935 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,935 |
|
|
|
Deposits in domestic banks |
|
7,078 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,078 |
|
|
|
Bonds from other Chilean companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
2,413 |
|
7,756 |
|
672 |
|
855 |
|
498 |
|
25,907 |
|
|
|
|
|
|
|
|
|
|
|
|
|
3,583 |
|
34,518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instruments issued by foreign institutions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instruments from foreign governments or central bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
19,331 |
|
8,338 |
|
672 |
|
855 |
|
498 |
|
25,907 |
|
|
|
|
|
|
|
|
|
|
|
|
|
20,501 |
|
35,100 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
9. Cash collateral on securities lent and repurchase agreements, continued:
(b) The Bank obtains financing by selling financial instruments and committing to purchase them at future dates, plus interest at a prefixed rate. As of September 30, 2013 and December 31, 2012, the Bank has the following payables resulting from such transactions:
|
|
Up to 1 month |
|
Over 1 month and up to 3 |
|
Over 3 months and up to |
|
Over 1 year and up to 3 |
|
Over 3 years and up to 5 |
|
Over 5 years |
|
Total |
| ||||||||||||||
|
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Instruments issued by the Chilean Governments and Central Bank of Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Bank bonds |
|
21,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,639 |
|
|
|
Central Bank promissory notes |
|
5,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,762 |
|
|
|
Other instruments issued by the Chilean Government and Central Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Instruments Issued in Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit promissory notes from domestic banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage bonds from domestic banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds from domestic banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits in domestic banks |
|
189,781 |
|
224,793 |
|
5,217 |
|
1,603 |
|
36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
195,034 |
|
226,396 |
|
Bonds from other Chilean companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instruments issued by foreign institutions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instruments from foreign governments or central bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
218,156 |
|
224,793 |
|
5,217 |
|
1,603 |
|
36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
223,409 |
|
226,396 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
9. Receivables from Repurchase Agreements and Security Borrowing, continued:
(c) Securities given (purchases):
As part of reverse repurchase and securities borrowing agreements the Bank has received securities that it is allowed to sell or pledge in the absence of default by the owner. As of September 30, 2013, the Bank held securities with a fair value of Ch$20,389 million (Ch$34,865 million in December 2012) on such terms. The Bank has an obligation to return the securities to its counterparties.
(d) Securities received (sales):
The carrying amount of securities lent and of Payables from Repurchase Agreements and Security Lending as of September 30, 2013 is Ch$221,503 million (Ch$266,395 million in December 2012). The counterparty is allowed to sell or pledge those securities in the absence of default by the Bank.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
10. Derivative Instruments and Accounting Hedges:
(a) As of September 30, 2013 and 2012, the Banks portfolio of derivative instruments is detailed as follows:
|
|
Notional amount of contract with final expiration date in |
|
Fair value |
| ||||||||||||||||||||||||||||
|
|
Up to 1 month |
|
Over 1 month and up to 3 |
|
Over 3 months and up to 12 |
|
Over 1 year and up to 3 |
|
Over 3 year and up to 5 |
|
Over 5 years |
|
Asset |
|
Liability |
| ||||||||||||||||
|
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Derivatives held for hedging purposes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross currency swap |
|
|
|
|
|
|
|
|
|
|
|
|
|
31,405 |
|
31,388 |
|
35,993 |
|
41,558 |
|
67,619 |
|
74,626 |
|
|
|
|
|
11,805 |
|
10,332 |
|
Interest rate swap |
|
|
|
|
|
|
|
|
|
|
|
|
|
26,692 |
|
27,570 |
|
18,864 |
|
17,790 |
|
112,585 |
|
116,387 |
|
547 |
|
|
|
12,096 |
|
21,311 |
|
Total derivatives held for hedging purposes |
|
|
|
|
|
|
|
|
|
|
|
|
|
58,097 |
|
58,958 |
|
54,857 |
|
59,348 |
|
180,204 |
|
191,013 |
|
547 |
|
|
|
23,901 |
|
31,643 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives held as cash flow hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap and cross currency swap |
|
|
|
|
|
|
|
|
|
|
|
|
|
181,012 |
|
55,382 |
|
205,359 |
|
14,083 |
|
122,236 |
|
78,861 |
|
11,408 |
|
22 |
|
9,074 |
|
2,055 |
|
Total Derivatives held as cash flow hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
181,012 |
|
55,382 |
|
205,359 |
|
14,083 |
|
122,236 |
|
78,861 |
|
11,408 |
|
22 |
|
9,074 |
|
2,055 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives held-for-trading purposes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency forward |
|
3,634,883 |
|
4,231,746 |
|
2,230,691 |
|
2,519,046 |
|
3,436,749 |
|
3,260,326 |
|
394,501 |
|
191,364 |
|
488 |
|
2,458 |
|
37 |
|
65 |
|
54,439 |
|
70,166 |
|
68,575 |
|
81,790 |
|
Cross currency swap |
|
84,789 |
|
69,220 |
|
351,009 |
|
199,338 |
|
1,523,746 |
|
1,034,040 |
|
1,287,633 |
|
1,721,408 |
|
936,485 |
|
719,073 |
|
1,217,075 |
|
1,026,518 |
|
148,429 |
|
177,403 |
|
189,733 |
|
166,182 |
|
Interest rate swap |
|
555,294 |
|
353,133 |
|
891,809 |
|
905,870 |
|
3,704,275 |
|
3,298,276 |
|
4,390,633 |
|
3,540,462 |
|
2,355,918 |
|
1,505,936 |
|
2,364,538 |
|
1,650,103 |
|
72,465 |
|
81,093 |
|
80,332 |
|
97,870 |
|
Call currency options |
|
23,965 |
|
30,306 |
|
56,670 |
|
20,938 |
|
102,010 |
|
46,686 |
|
13,121 |
|
4,795 |
|
|
|
|
|
|
|
|
|
2,015 |
|
472 |
|
2,528 |
|
395 |
|
Put currency options |
|
14,427 |
|
26,009 |
|
35,114 |
|
15,288 |
|
51,676 |
|
25,980 |
|
1,262 |
|
|
|
|
|
|
|
|
|
|
|
1,184 |
|
341 |
|
885 |
|
387 |
|
Others |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivatives of negotiation |
|
4,313,358 |
|
4,710,414 |
|
3,565,293 |
|
3,660,480 |
|
8,818,456 |
|
7,665,308 |
|
6,087,150 |
|
5,458,029 |
|
3,292,891 |
|
2,227,467 |
|
3,581,650 |
|
2,676,686 |
|
278,532 |
|
329,475 |
|
342,053 |
|
346,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
4,313,358 |
|
4,710,414 |
|
3,565,293 |
|
3,660,480 |
|
8,818,456 |
|
7,665,308 |
|
6,326,259 |
|
5,572,369 |
|
3,553,107 |
|
2,300,898 |
|
3,884,090 |
|
2,946,560 |
|
290,487 |
|
329,497 |
|
375,028 |
|
380,322 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
10. Derivative Instruments and Accounting Hedges, continued:
(b) Fair value Hedges:
The Bank uses cross-currency swaps and interest rate swaps to hedge its exposure to changes in the fair value of the hedged elements attributable to interest rates. The aforementioned hedge instruments change the effective cost of long-term issuances from a fixed interest rate to a variable interest rate, decreasing the duration and modifying the sensitivity to the shortest segments of the curve.
Below is a detail of the hedged elements and hedge instruments under fair value hedges as of September 30, 2013 and December 31, 2012:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Hedged element |
|
|
|
|
|
Commercial loans |
|
135,017 |
|
147,572 |
|
Corporate bonds |
|
158,141 |
|
161,747 |
|
Total |
|
293,158 |
|
309,319 |
|
|
|
|
|
|
|
Hedge instrument |
|
|
|
|
|
Cross currency swap |
|
135,017 |
|
147,572 |
|
Interest rate swap |
|
158,141 |
|
161,747 |
|
Total |
|
293,158 |
|
309,319 |
|
(c) Cash flow Hedges:
(c.1) The Bank uses cross currency swaps to hedge the risk from variability of cash flows attributable to changes in the interest rates of bonds and foreign exchange of bonds issued abroad in Mexican pesos to rate TIIE (Interbank Interest Rate Balance) plus 0.6 percentage points, Hong Kong dollars, Peruvian nuevo sol and Swiss franc. The cash flows of the cross currency swaps equal the cash flows of the hedged items, which modify uncertain cash flows to known cash flows derived from a fixed interest rate.
Additionally, these cross currency swap contracts used to hedge the risk from variability of the Unidad de Fomento (CLF) in assets flows denominated in CLF until a nominal amount equal to the portion notional of the hedging instrument CLF, whose readjustment daily impact the item interest revenue of the financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
10. Derivative Instruments and Accounting Hedges, continued:
(c.2) Below are the cash flows from bonds issued abroad objects of this hedge and the cash flows of the asset part of the derivative instrument:
|
|
As of September 30, 2013 |
| ||||||||||||
|
|
Up to1 |
|
Over 1 month |
|
Over 3 months |
|
Over 1 year |
|
Over 3 years |
|
Over 5 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Outflows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged item (Corporate bonds MXN) |
|
(219 |
) |
(439 |
) |
(2,195 |
) |
(58,252 |
) |
|
|
|
|
(61,105 |
) |
Hedged item (Corporate bonds HKD) |
|
|
|
|
|
(4,796 |
) |
(9,593 |
) |
(9,581 |
) |
(165,763 |
) |
(189,733 |
) |
Hedged item (Corporate bonds PEN) |
|
(550 |
) |
|
|
(550 |
) |
(2,198 |
) |
(15,252 |
) |
|
|
(18,550 |
) |
Hedged item (Corporate bonds CHF) |
|
(764 |
) |
|
|
(3,914 |
) |
(137,171 |
) |
(213,187 |
) |
|
|
(355,036 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged Instrument (Cross currency swap MXN leg) |
|
219 |
|
439 |
|
2,195 |
|
58,252 |
|
|
|
|
|
61,105 |
|
Hedged Instrument (Cross currency swap HKD leg) |
|
|
|
|
|
4,796 |
|
9,593 |
|
9,581 |
|
165,763 |
|
189,733 |
|
Hedged Instrument (Cross currency swap PEN leg) |
|
550 |
|
|
|
550 |
|
2,198 |
|
15,252 |
|
|
|
18,550 |
|
Hedged Instrument (Cross currency swap CHF leg) |
|
764 |
|
|
|
3,914 |
|
137,171 |
|
213,187 |
|
|
|
355,036 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2012 |
| ||||||||||||
|
|
Up to1 |
|
Over 1 month |
|
Over 3 months |
|
Over 1 year |
|
Over 3 years |
|
Over 5 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Outflows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged item (Corporate bonds MXN) |
|
(235 |
) |
(470 |
) |
(2,348 |
) |
(58,199 |
) |
|
|
|
|
(61,252 |
) |
Hedged item (Corporate bonds HKD) |
|
|
|
|
|
(3,149 |
) |
(6,309 |
) |
(6,332 |
) |
(110,408 |
) |
(126,198 |
) |
Hedged item (Corporate bonds PEN) |
|
|
|
|
|
(1,138 |
) |
(2,276 |
) |
(16,358 |
) |
|
|
(19,772 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inflows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged Instrument (Cross currency swap MXN leg) |
|
235 |
|
470 |
|
2,348 |
|
58,199 |
|
|
|
|
|
61,252 |
|
Hedged Instrument (Cross currency swap HKD leg) |
|
|
|
|
|
3,149 |
|
6,309 |
|
6,332 |
|
110,408 |
|
126,198 |
|
Hedged Instrument (Cross currency swap PEN leg) |
|
|
|
|
|
1,138 |
|
2,276 |
|
16,358 |
|
|
|
19,772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
10. Derivative Instruments and Accounting Hedges, continued:
(c.2) Below are the cash flows from underlying assets and the cash flows of the liability part of the derivative instrument:
|
|
As of September 30, 2013 |
| ||||||||||||
|
|
Up to1 |
|
Over 1 month |
|
Over 3 |
|
Over 1 year |
|
Over 3 years |
|
Over 5 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Inflows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged item (Cash flows CLF) |
|
223 |
|
2,913 |
|
12,620 |
|
211,977 |
|
224,002 |
|
158,471 |
|
610,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outflows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged Instrument (Cross currency swap CLF/MXN leg) |
|
|
|
(833 |
) |
(829 |
) |
(60,004 |
) |
|
|
|
|
(61,666 |
) |
Hedged Instrument (Cross currency swap CLF/HKD leg) |
|
|
|
|
|
(4,218 |
) |
(8,464 |
) |
(5,658 |
) |
(158,471 |
) |
(176,811 |
) |
Hedged Instrument (Cross currency swap CLF/PEN leg) |
|
(223 |
) |
|
|
(222 |
) |
(891 |
) |
(14,759 |
) |
|
|
(16,095 |
) |
Hedged Instrument (Cross currency swap CLF/CHF leg) |
|
|
|
(2,080 |
) |
(7,351 |
) |
(142,618 |
) |
(203,585 |
) |
|
|
(355,634 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2012 |
| ||||||||||||
|
|
Up to1 |
|
Over 1 month |
|
Over 3 |
|
Over 1 year |
|
Over 3 years |
|
Over 5 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Inflows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged item (Cash flows CLF) |
|
|
|
|
|
4,496 |
|
66,537 |
|
20,317 |
|
106,869 |
|
198,219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outflows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged Instrument (Cross currency swap CLF/MXN leg) |
|
|
|
|
|
(1,644 |
) |
(60,173 |
) |
|
|
|
|
(61,817 |
) |
Hedged Instrument (Cross currency swap CLF/HKD leg) |
|
|
|
|
|
(2,411 |
) |
(5,482 |
) |
(5,498 |
) |
(106,869 |
) |
(120,260 |
) |
Hedged Instrument (Cross currency swap CLF/PEN leg) |
|
|
|
|
|
(441 |
) |
(882 |
) |
(14,819 |
) |
|
|
(16,142 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
10. Derivative Instruments and Accounting Hedges, continued:
Respect to CLF assets hedged, these are revalued monthly according to the variation of the UF, which is equivalent to realize monthly reinvestment of the assets until maturity of the relationship hedging.
(c.3) Unrealized gain of fair value adjustment for the period 2013 was Ch$16,389 million (Ch$1,294 credit to equity as of September 30, 2012) generated from hedging instruments, which has been recorded in equity. The accumulated net effect for deferred taxes as of September 30, 2013 was Ch$13,112 million (Ch$1,044 credit to equity as of September 30, 2012).
The accumulated amount for this concept (net of deferred taxes) as of September 30, 2013 correspond to a charge to equity amounted Ch$12,078 million (credit to equity of Ch$1,034 million as of December 31, 2012)
(c.4) The net effect in income of derivatives cash flow hedges amount to Ch$23,207 millions in 2013 (Ch$767 charge to equity as of September 30, 2012).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
11. Loans and advances to Banks:
(a) Amounts are detailed as follows:
|
|
September |
|
December |
|
|
|
MCh$ |
|
MCh$ |
|
Domestic Banks |
|
|
|
|
|
Interbank loans |
|
159,000 |
|
14,309 |
|
Overdrafts in current accounts |
|
|
|
|
|
Others credits with domestic banks |
|
|
|
|
|
Provisions for loans to domestic banks |
|
(95 |
) |
(5 |
) |
Subtotal |
|
158,905 |
|
14,304 |
|
|
|
|
|
|
|
Foreign Banks |
|
|
|
|
|
Loans to banks |
|
259,976 |
|
146,980 |
|
Overdrafts in current accounts |
|
|
|
|
|
Credit with domestic companies |
|
96,450 |
|
67,787 |
|
Credits with third countries |
|
12,304 |
|
14,509 |
|
Other credits with foreign banks |
|
1 |
|
|
|
Provisions for loans to foreign banks |
|
(1,357 |
) |
(954 |
) |
Subtotal |
|
367,374 |
|
228,322 |
|
|
|
|
|
|
|
Central Bank of Chile |
|
|
|
|
|
Non-available Central Bank deposits |
|
150,000 |
|
1,100,000 |
|
Other Central Bank credits |
|
674 |
|
696 |
|
Subtotal |
|
150,674 |
|
1,100,696 |
|
Total |
|
676,953 |
|
1,343,322 |
|
(b) Provisions for loans to banks are detailed below:
|
|
Banks Location |
|
|
| ||
Detail |
|
Chile |
|
Abroad |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Balance as of January 1, 2012 |
|
5 |
|
1,001 |
|
1,006 |
|
Charge-offs |
|
|
|
|
|
|
|
Provisions established |
|
31 |
|
|
|
31 |
|
Provisions released |
|
|
|
(173 |
) |
(173 |
) |
Balance as of September 30, 2012 |
|
36 |
|
828 |
|
864 |
|
Charge-offs |
|
|
|
|
|
|
|
Provisions established |
|
|
|
126 |
|
126 |
|
Provisions released |
|
(31 |
) |
|
|
(31 |
) |
Balance as of December 31, 2012 |
|
5 |
|
954 |
|
959 |
|
Charge-offs |
|
|
|
|
|
|
|
Provisions established |
|
90 |
|
403 |
|
493 |
|
Provisions released |
|
|
|
|
|
|
|
Balance as of September 30, 2013 |
|
95 |
|
1,357 |
|
1,452 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) Loans to Customers:
As of September 30, 2013 and December 31, 2012, the composition of the portfolio of loans is the following:
|
|
As of September 30, 2013 |
| ||||||||||||
|
|
Assets before allowance |
|
Allowances established |
|
|
| ||||||||
|
|
Normal |
|
Impaired |
|
Total |
|
Individual |
|
Group |
|
Total |
|
Net assets |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Commercial loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
9,352,627 |
|
259,795 |
|
9,612,422 |
|
(94,056 |
) |
(83,971 |
) |
(178,027 |
) |
9,434,395 |
|
Foreign trade loans |
|
1,156,287 |
|
97,969 |
|
1,254,256 |
|
(59,715 |
) |
(514 |
) |
(60,229 |
) |
1,194,027 |
|
Current account debtors |
|
272,299 |
|
3,015 |
|
275,314 |
|
(3,440 |
) |
(3,141 |
) |
(6,581 |
) |
268,733 |
|
Factoring transactions |
|
505,217 |
|
7,268 |
|
512,485 |
|
(1,230 |
) |
(1 |
) |
(1,231 |
) |
511,254 |
|
Commercial lease transactions(1) |
|
1,164,031 |
|
30,950 |
|
1,194,981 |
|
(5,205 |
) |
(9,876 |
) |
(15,081 |
) |
1,179,900 |
|
Other loans and accounts receivable |
|
31,007 |
|
5,824 |
|
36,831 |
|
(556 |
) |
(3,267 |
) |
(3,823 |
) |
33,008 |
|
Subtotal |
|
12,481,468 |
|
404,821 |
|
12,886,289 |
|
(164,202 |
) |
(100,770 |
) |
(264,972 |
) |
12,621,317 |
|
Mortgage loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage bonds |
|
86,668 |
|
5,835 |
|
92,503 |
|
|
|
(485 |
) |
(485 |
) |
92,018 |
|
Transferable mortgage loans |
|
125,367 |
|
2,741 |
|
128,108 |
|
|
|
(440 |
) |
(440 |
) |
127,668 |
|
Other residential real estate mortgage loans |
|
4,298,350 |
|
57,998 |
|
4,356,348 |
|
|
|
(16,086 |
) |
(16,086 |
) |
4,340,262 |
|
Credits from ANAP |
|
24 |
|
|
|
24 |
|
|
|
|
|
|
|
24 |
|
Residential lease transactions(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loans and accounts receivable |
|
4,878 |
|
370 |
|
5,248 |
|
|
|
(1 |
) |
(1 |
) |
5,247 |
|
Subtotal |
|
4,515,287 |
|
66,944 |
|
4,582,231 |
|
|
|
(17,012 |
) |
(17,012 |
) |
4,565,219 |
|
Consumer loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans in installments |
|
1,840,424 |
|
157,519 |
|
1,997,943 |
|
|
|
(133,395 |
) |
(133,395 |
) |
1,864,548 |
|
Current account debtors |
|
232,704 |
|
10,638 |
|
243,342 |
|
|
|
(7,940 |
) |
(7,940 |
) |
235,402 |
|
Credit card debtors |
|
676,461 |
|
26,908 |
|
703,369 |
|
|
|
(32,498 |
) |
(32,498 |
) |
670,871 |
|
Consumer lease transactions(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loans and accounts receivable |
|
183 |
|
313 |
|
496 |
|
|
|
(467 |
) |
(467 |
) |
29 |
|
Subtotal |
|
2,749,772 |
|
195,378 |
|
2,945,150 |
|
|
|
(174,300 |
) |
(174,300 |
) |
2,770,850 |
|
Total |
|
19,746,527 |
|
667,143 |
|
20,413,670 |
|
(164,202 |
) |
(292,082 |
) |
(456,284 |
) |
19,957,386 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
12. Loans to Customers net, continued:
(a) Loans to Customers, continued:
|
|
As of December 31, 2012 |
| ||||||||||||
|
|
Assets before allowances |
|
Allowances established |
|
|
| ||||||||
|
|
Normal |
|
Substandard |
|
Total |
|
Individual |
|
Group |
|
Total |
|
Net assets |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Commercial loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
8,294,819 |
|
246,355 |
|
8,541,174 |
|
(93,583 |
) |
(67,746 |
) |
(161,329 |
) |
8,379,845 |
|
Foreign trade loans |
|
1,149,923 |
|
91,032 |
|
1,240,955 |
|
(55,216 |
) |
(491 |
) |
(55,707 |
) |
1,185,248 |
|
Current account debtors |
|
187,246 |
|
2,153 |
|
189,399 |
|
(2,418 |
) |
(2,504 |
) |
(4,922 |
) |
184,477 |
|
Factoring transactions |
|
597,266 |
|
8,871 |
|
606,137 |
|
(9,535 |
) |
(556 |
) |
(10,091 |
) |
596,046 |
|
Commercial lease transactions (1) |
|
1,084,877 |
|
28,395 |
|
1,113,272 |
|
(3,528 |
) |
(9,136 |
) |
(12,664 |
) |
1,100,608 |
|
Other loans and accounts receivable |
|
35,736 |
|
4,911 |
|
40,647 |
|
(621 |
) |
(1,974 |
) |
(2,595 |
) |
38,052 |
|
Subtotal |
|
11,349,867 |
|
381,717 |
|
11,731,584 |
|
(164,901 |
) |
(82,407 |
) |
(247,308 |
) |
11,484,276 |
|
Mortgage loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage bonds |
|
103,241 |
|
5,974 |
|
109,215 |
|
|
|
(724 |
) |
(724 |
) |
108,491 |
|
Transferable mortgage loans |
|
148,243 |
|
2,963 |
|
151,206 |
|
|
|
(527 |
) |
(527 |
) |
150,679 |
|
Other residential real estate mortgage loans |
|
3,897,642 |
|
40,124 |
|
3,937,766 |
|
|
|
(14,829 |
) |
(14,829 |
) |
3,922,937 |
|
Credits from ANAP |
|
27 |
|
|
|
27 |
|
|
|
|
|
|
|
27 |
|
Residential lease transactions(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loans and accounts receivable |
|
113 |
|
340 |
|
453 |
|
|
|
|
|
|
|
453 |
|
Subtotal |
|
4,149,266 |
|
49,401 |
|
4,198,667 |
|
|
|
(16,080 |
) |
(16,080 |
) |
4,182,587 |
|
Consumer loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans in installments |
|
1,761,070 |
|
145,203 |
|
1,906,273 |
|
|
|
(124,886 |
) |
(124,886 |
) |
1,781,387 |
|
Current account debtors |
|
235,122 |
|
9,944 |
|
245,066 |
|
|
|
(6,950 |
) |
(6,950 |
) |
238,116 |
|
Credit card debtors |
|
654,976 |
|
25,010 |
|
679,986 |
|
|
|
(31,996 |
) |
(31,996 |
) |
647,990 |
|
Consumer lease transactions (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loans and accounts receivable |
|
183 |
|
6 |
|
189 |
|
|
|
(215 |
) |
(215 |
) |
(26 |
) |
Subtotal |
|
2,651,351 |
|
180,163 |
|
2,831,514 |
|
|
|
(164,047 |
) |
(164,047 |
) |
2,667,467 |
|
Total |
|
18,150,484 |
|
611,281 |
|
18,761,765 |
|
(164,901 |
) |
(262,534 |
) |
(427,435 |
) |
18,334,330 |
|
(1) In this item, the Bank finances its customers purchases of assets, including real estate and other personal property, through finance lease agreements. As of September 30, 2013, MCh$504,912 (MCh$451,647 as of December 31, 2012) correspond to finance leases for real estate and MCh$690,069 (MCh$661,625 as of December 31, 2012), correspond to finance leases for other assets.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
12. Loans to Customers, continued:
(b) Allowances for loan losses:
Movements in allowances for loan losses during periods 2013 and 2012 are as follows:
|
|
Allowances |
|
|
| ||
|
|
Individual |
|
Group |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2012 |
|
160,377 |
|
224,113 |
|
384,490 |
|
Charge-offs: |
|
|
|
|
|
|
|
Commercial loans |
|
(5,759 |
) |
(26,979 |
) |
(32,738 |
) |
Mortgage loans |
|
|
|
(3,117 |
) |
(3,117 |
) |
Consumer loans |
|
|
|
(101,097 |
) |
(101,097 |
) |
Total charge-offs |
|
(5,759 |
) |
(131,193 |
) |
(136,952 |
) |
Allowances established |
|
1,429 |
|
163,083 |
|
164,512 |
|
Allowances released |
|
|
|
|
|
|
|
Balance as of September 30, 2012 |
|
156,047 |
|
256,003 |
|
412,050 |
|
Charge-offs: |
|
|
|
|
|
|
|
Commercial loans |
|
(3,385 |
) |
(7,041 |
) |
(10,426 |
) |
Mortgage loans |
|
|
|
(1,136 |
) |
(1,136 |
) |
Consumer loans |
|
|
|
(34,219 |
) |
(34,219 |
) |
Total charge-offs |
|
(3,385 |
) |
(42,396 |
) |
(45,781 |
) |
Allowances established |
|
12,239 |
|
48,927 |
|
61,166 |
|
Allowances released |
|
|
|
|
|
|
|
Balance as of December 31, 2012 |
|
164,901 |
|
262,534 |
|
427,435 |
|
Charge-offs: |
|
|
|
|
|
|
|
Commercial loans |
|
(5,934 |
) |
(19,473 |
) |
(25,407 |
) |
Mortgage loans |
|
|
|
(2,569 |
) |
(2,569 |
) |
Consumer loans |
|
|
|
(116,244 |
) |
(116,244 |
) |
Total charge-offs |
|
(5,934 |
) |
(138,286 |
) |
(144,220 |
) |
Debt swap |
|
(12,556 |
) |
|
|
(12,556 |
) |
Allowances established |
|
17,791 |
|
167,834 |
|
185,625 |
|
Allowances released |
|
|
|
|
|
|
|
Balance as of September 30, 2013 |
|
164,202 |
|
292,082 |
|
456,284 |
|
In addition to these allowances for loan losses, the Bank also establishes a country risk provisions to hedge foreign transactions and additional provisions agreed upon by the Board of Directors, which are presented within liabilities in Provisions (Note 24).
Other Disclosures:
1. As of September 30, 2013 and December 31, 2012, the Bank and its subsidiaries have made purchases and sales of loan portfolios. The effect in income is no more than 5% of net income before taxes, as described in Note 12 (d).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
12. Loans to Customers, continued:
2. As of September 30, 2013 and December 31, 2012, the Bank and its subsidiaries have derecognized 100% of its sold loan portfolio and it has been transferred all or substantially all risks and benefits related to these financial assets.
(c) Finance lease contracts:
The Banks scheduled cash flows to be received from finance leasing contracts have the following maturities:
|
|
Total receivable |
|
Unearned income |
|
Net lease receivable(*) |
| ||||||
|
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due within one year |
|
427,146 |
|
394,284 |
|
(53,242 |
) |
(50,643 |
) |
373,904 |
|
343,641 |
|
Due after 1 year but within 2 years |
|
309,491 |
|
293,525 |
|
(37,703 |
) |
(36,615 |
) |
271,788 |
|
256,910 |
|
Due after 2 years but within 3 years |
|
196,542 |
|
189,111 |
|
(26,287 |
) |
(23,440 |
) |
170,255 |
|
165,671 |
|
Due after 3 years but within 4 years |
|
117,921 |
|
112,381 |
|
(16,894 |
) |
(15,766 |
) |
101,027 |
|
96,615 |
|
Due after 4 years but within 5 years |
|
84,355 |
|
75,451 |
|
(12,465 |
) |
(11,339 |
) |
71,890 |
|
64,112 |
|
Due after 5 years |
|
226,483 |
|
206,025 |
|
(28,177 |
) |
(25,733 |
) |
198,306 |
|
180,292 |
|
Total |
|
1,361,938 |
|
1,270,777 |
|
(174,768 |
) |
(163,536 |
) |
1,187,170 |
|
1,107,241 |
|
(*) The net balance receivable does not include past-due portfolio totaling MCh$7,811 as of September 30, 2013 (MCh$6,031 as of December 31, 2012).
The leasing contracts are related to real estate, industrial machinery, vehicles and computer equipment. The leasing contracts have an average life of between 3 and 8 years.
(d) Purchase of credits:
In the present period the Bank has acquired portfolio loans with a nominal value of Ch$435,908 million.
(e) Sale or transfer of credits from the loans to customers:
During the period ended September 30, 2013 and 2012 Banco de Chile has carried out transactions of sale or transfer of the loan portfolio, according the following:
As of September 30, 2013 |
| ||||||
Carrying |
|
Allowances |
|
Sale price |
|
Effect on income |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
47,437 |
|
(354 |
) |
47,752 |
|
669 |
|
As of September 30, 2012 |
| ||||||
Carrying |
|
Allowances |
|
Sale price |
|
Effect on income |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
116,295 |
|
(194 |
) |
116,295 |
|
194 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
12. Loans to Customers, continued:
(f) On June 27, 2013, it was proceeded to make a Debt Swap of impaired portfolio. Representative promissory notes of credit were replaced by financial instruments (bonds), issued by the same debtor. The credit, at date of exchange, amounted MCh$13,952 with a provision for loan losses of MCh$12,556. The financial instruments (bonds) received was classified like financial assets available-for-sale.
At date of exchange, it does not exist active market for this type of financial instrument, and so, there was not sufficient data available for measure its fair value. Then it determined that fair value was equivalent to book value of credit exchanged. For this transaction it was not recognized income effect.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
As of September 30, 2013 and December 31, 2012, investment securities classified as available-for-sale and held-to-maturity are detailed as follows:
|
|
September |
|
December |
| ||||||||
|
|
Available- |
|
Held to |
|
Total |
|
Available- |
|
Held to |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instruments issued by the Chilean Government and Central Bank of Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds issued by the Chilean Government and Central Bank |
|
357,972 |
|
|
|
357,972 |
|
110,569 |
|
|
|
110,569 |
|
Promissory notes issued by the Chilean Government and Central Bank |
|
135,723 |
|
|
|
135,723 |
|
969 |
|
|
|
969 |
|
Other instruments |
|
191,288 |
|
|
|
191,288 |
|
140,246 |
|
|
|
140,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit promissory notes from domestics banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage bonds from domestic banks |
|
99,507 |
|
|
|
99,507 |
|
85,688 |
|
|
|
85,688 |
|
Bonds from domestic banks |
|
186,937 |
|
|
|
186,937 |
|
116,100 |
|
|
|
116,100 |
|
Deposits from domestic banks |
|
573,561 |
|
|
|
573,561 |
|
560,390 |
|
|
|
560,390 |
|
Bonds from other Chilean companies |
|
25,835 |
|
|
|
25,835 |
|
32,281 |
|
|
|
32,281 |
|
Promissory notes issued by other Chilean companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments |
|
145,048 |
|
|
|
145,048 |
|
129,693 |
|
|
|
129,693 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instruments issued abroad |
|
|
|
|
|
|
|
|
|
|
|
|
|
Instruments from foreign governments or Central Banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments |
|
68,482 |
|
|
|
68,482 |
|
88,504 |
|
|
|
88,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
1,784,353 |
|
|
|
1,784,353 |
|
1,264,440 |
|
|
|
1,264,440 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
13. Investment Securities, continued:
Instruments issued by the Chilean Government and Central Bank include instruments with agreements to repurchase sold to clients and financial institutions; totaling MCh$27,399 as of September 30, 2013 (the balance is null for 2012). The agreements to repurchase have an average maturity of 8 days as of September 30, 2013.
In instruments issued by other Chilean institutions are included instruments sold by repurchase agreements to clients and financial institutions, totaling MCh$32 as of September 30, 2013 (Ch$5,267 million as of December 31, 2012).
In instruments issued abroad are included mainly bank bonds and shares.
As of September 30, 2013, the portfolio of financial assets available-for-sale includes a net unrealized gain of MCh$25,315, net of tax (net unrealized gain of MCh$17,995 as of December 31, 2012), recorded in other comprehensive income within equity.
During 2013 and 2012, there is no evidence of impairment of financial assets available-for-sale.
Realized gains and losses are calculated as the proceeds from sales less the cost (specific identification method) of the investments identified as available-for-sale. In addition, any unrealized gain or loss previously recognized in equity for these investments is reversed and recorded in the Consolidated Statements of Comprehensive Income.
Gross profits and losses realized on the sale of available-for-sale investments as of September 30, 2013 and as of December 31, 2012 are shown in Note 30 Net Financial Operating Income.
Gross profits and losses realized and unrealized on the sale of available-for-sale investments for the nine-month period ended September 30, 2013 and September 30, 2012 are as follows:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Unrealized gain (loss) arising during the period |
|
17,354 |
|
25,380 |
|
Realized gain included in the consolidated statement of comprehensive income |
|
(8,205 |
) |
(2,086 |
) |
Net gain (loss) on available-for-sale before income tax |
|
9,149 |
|
23,294 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
14. Investments in Other Companies:
(a) This item includes investments in other companies for an amount of MCh$16,697 as of September 30, 2013 (MCh$13,933 as of December 31, 2012), which is detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Investment |
| ||||||
|
|
|
|
Ownership Interest |
|
Equity |
|
Book Value |
|
Income (Loss) |
| ||||||||
|
|
|
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
September |
|
Company |
|
Shareholder |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
|
|
% |
|
% |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Investments valued at equity method |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Servipag Ltda. |
|
Banco de Chile |
|
50.00 |
|
50.00 |
|
6,956 |
|
6,756 |
|
3,477 |
|
3,378 |
|
100 |
|
(210 |
) |
Soc. Operadora de Tarjetas de Crédito Nexus S.A. |
|
Banco de Chile |
|
25.81 |
|
25.81 |
|
7,501 |
|
6,412 |
|
1,936 |
|
1,655 |
|
402 |
|
313 |
|
Redbanc S.A. |
|
Banco de Chile |
|
38.13 |
|
38.13 |
|
4,366 |
|
4,109 |
|
1,665 |
|
1,567 |
|
140 |
|
574 |
|
Administrador Financiero del Transantiago S.A.(*) |
|
Banco de Chile |
|
20.00 |
|
20.00 |
|
9,425 |
|
6,076 |
|
1,885 |
|
1,215 |
|
669 |
|
(158 |
) |
Transbank S.A. |
|
Banco de Chile |
|
26.16 |
|
26.16 |
|
6,016 |
|
6,306 |
|
1,574 |
|
1,649 |
|
214 |
|
227 |
|
Soc. Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A. |
|
Banco de Chile |
|
15.00 |
|
15.00 |
|
4,467 |
|
4,337 |
|
670 |
|
651 |
|
41 |
|
67 |
|
Artikos Chile S.A. |
|
Banco de Chile |
|
50.00 |
|
50.00 |
|
1,280 |
|
1,129 |
|
640 |
|
564 |
|
75 |
|
(324 |
) |
Centro de Compensación Automatizado S.A. |
|
Banco de Chile |
|
33.33 |
|
33.33 |
|
1,854 |
|
1,609 |
|
618 |
|
536 |
|
78 |
|
70 |
|
Sociedad Interbancaria de Depósitos de Valores S.A. |
|
Banco de Chile |
|
26.81 |
|
26.81 |
|
1,982 |
|
1,711 |
|
531 |
|
459 |
|
73 |
|
89 |
|
Sociedad Omerc OTC S.A.(**) |
|
Banco de Chile |
|
14.49 |
|
|
|
9,952 |
|
|
|
1,440 |
|
|
|
|
|
|
|
Subtotal |
|
|
|
|
|
|
|
53,799 |
|
38,445 |
|
14,436 |
|
11,674 |
|
1,792 |
|
648 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments valued at cost(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bolsa de Comercio de Santiago S.A. |
|
|
|
|
|
|
|
|
|
|
|
1,646 |
|
1,646 |
|
252 |
|
209 |
|
Banco Latinoamericano de Comercio Exterior S.A. (Bladex) |
|
|
|
|
|
|
|
|
|
|
|
309 |
|
309 |
|
|
|
|
|
Bolsa Electrónica de Chile S.A. |
|
|
|
|
|
|
|
|
|
|
|
257 |
|
257 |
|
|
|
|
|
Cámara de Compensación |
|
|
|
|
|
|
|
|
|
|
|
8 |
|
8 |
|
|
|
|
|
Sociedad de Telecomunicaciones Financieras Interbancarias Mundiales (Swift) |
|
|
|
|
|
|
|
|
|
|
|
41 |
|
39 |
|
|
|
|
|
Subtotal |
|
|
|
|
|
|
|
|
|
|
|
2,261 |
|
2,259 |
|
252 |
|
209 |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
16,697 |
|
13,933 |
|
2,044 |
|
857 |
|
(1) Income from investments valorized at cost, corresponds to income recognized on cash basis (dividends).
(*) On July 9, 2013 it was published in Diario Oficial of Chile (Federal Register in USA) the resolution No. 285 between Government Department of Transport and Telecommunications and Government Department of Treasury, which approved a new agreement related to the delivery of complementary services of financial management, whereby the new agreement, AFT only provide services related with financial management of the resourses of Transantiago system, all of that in the terms and conditions that establish the new contract.
(**) On June 21, 2013 it was created, with other banks of the Chilean financial system, the subsidiary banking support called Servicios de Infraestructura de Mercado OTC S.A. (IMERC-OTC S.A.), where its objective will be to operate a centralized register of derivatives operations (register, confirmation, storage, consolidation and conciliation services). This new subsidiary was created with a capital of Ch$12,957,463,890 divided in 10,000 shares, without nominal value, of which Banco de Chile subscribed and paid 1,110 shares, equivalents to MCh$1,440 million paid upon constitution of society. It was subscribed and paid 7,668 shares at the date of these financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
14. Investments in Other Companies, continued:
(b) The reconciliation between opening and ending balance of investments in other companies that are not consolidated in 2013 and 2012 is detailed as follows:
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Balance as of January1, |
|
13,933 |
|
15,418 |
|
Sale of investments |
|
|
|
|
|
Acquisition of investments |
|
1,440 |
|
71 |
|
Participation in net income |
|
1,792 |
|
648 |
|
Dividends receivable |
|
(191 |
) |
(362 |
) |
Dividends received |
|
(931 |
) |
(915 |
) |
Payment of dividends |
|
654 |
|
508 |
|
Balance as of September 30, |
|
16,697 |
|
15,368 |
|
(c) During the nine-month period ended September 30, 2013 and as of December 31, 2012 no impairment has incurred in these investments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) As of September 30, 2013 and December 31, 2012 intangible assets are detailed as follows:
|
|
Years |
|
|
|
|
|
Accumulated |
|
|
|
|
| ||||||||
|
|
Useful Life |
|
Remaining |
|
Gross balance |
|
Amortization and |
|
Net balance |
| ||||||||||
|
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Type of intangible asset: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in other companies |
|
7 |
|
7 |
|
1 |
|
2 |
|
4,138 |
|
4,138 |
|
(3,465 |
) |
(3,000 |
) |
673 |
|
1,138 |
|
Other Intangible Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software or computer programs |
|
6 |
|
6 |
|
2 |
|
3 |
|
85,742 |
|
82,736 |
|
(56,196 |
) |
(50,641 |
) |
29,546 |
|
32,095 |
|
Intangible assets arising from business combinations |
|
7 |
|
7 |
|
1 |
|
2 |
|
1,740 |
|
1,740 |
|
(1,457 |
) |
(1,261 |
) |
283 |
|
479 |
|
Other intangible assets |
|
|
|
|
|
|
|
|
|
487 |
|
612 |
|
(42 |
) |
(34 |
) |
445 |
|
578 |
|
Total |
|
|
|
|
|
|
|
|
|
92,107 |
|
89,226 |
|
(61,160 |
) |
(54,936 |
) |
30,947 |
|
34,290 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
15. Intangible Assets, continued:
(b) Movements in intangible assets during the nine-month period ended September 30, 2013 and December 31, 2012 are as follows:
|
|
Investments in |
|
Software or |
|
Intangible assets |
|
Other |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Gross Balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2012 |
|
4,138 |
|
74,525 |
|
1,740 |
|
102 |
|
80,505 |
|
Acquisitions |
|
|
|
5,999 |
|
|
|
2 |
|
6,001 |
|
Disposals/ write-downs |
|
|
|
(333 |
) |
|
|
(63 |
) |
(396 |
) |
Balance as of September 30, 2012 |
|
4,138 |
|
80,191 |
|
1,740 |
|
41 |
|
86,110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2012 |
|
4,138 |
|
82,736 |
|
1,740 |
|
612 |
|
89,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2013 |
|
4,138 |
|
82,736 |
|
1,740 |
|
612 |
|
89,226 |
|
Acquisitions |
|
|
|
3,518 |
|
|
|
255 |
|
3,773 |
|
Disposals/ write-downs |
|
|
|
(512 |
) |
|
|
(380 |
) |
(892 |
) |
Balance as of September 30, 2013 |
|
4,138 |
|
85,742 |
|
1,740 |
|
487 |
|
92,107 |
|
Accumulated Amortization and Impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2012 |
|
(2,379 |
) |
(41,538 |
) |
(1,000 |
) |
(71 |
) |
(44,988 |
) |
Amortization for the period(*) |
|
(466 |
) |
(7,159 |
) |
(196 |
) |
(15 |
) |
(7,836 |
) |
Impairment loss(*) |
|
|
|
|
|
|
|
|
|
|
|
Disposals/ write-downs |
|
|
|
333 |
|
|
|
62 |
|
395 |
|
Balance as of September 30, 2012 |
|
(2,845 |
) |
(48,364 |
) |
(1,196 |
) |
(24 |
) |
(52,429 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2012 |
|
(3,000 |
) |
(50,641 |
) |
(1,261 |
) |
(34 |
) |
(54,936 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2013 |
|
(3,000 |
) |
(50,641 |
) |
(1,261 |
) |
(34 |
) |
(54,936 |
) |
Amortization for the period(*) |
|
(465 |
) |
(6,067 |
) |
(196 |
) |
(20 |
) |
(6,748 |
) |
Impairment loss(*) |
|
|
|
|
|
|
|
|
|
|
|
Disposals/ write-downs |
|
|
|
512 |
|
|
|
12 |
|
524 |
|
Balance as of September 30, 2013 |
|
(3,465 |
) |
(56,196 |
) |
(1,457 |
) |
(42 |
) |
(61,160 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net balance as of September 30, 2013 |
|
673 |
|
29,546 |
|
283 |
|
445 |
|
30,947 |
|
(*) See Note 35 Depreciation, amortization and impairment.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
15. Intangible Assets, continued:
(c) As of September 30, 2013 and December 31, 2012, the Bank has made the following commitments to purchase intangible assets, which have not been capitalized:
|
|
Amount of Commitment |
| ||
|
|
September |
|
December |
|
Detail |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Software and licenses |
|
8,598 |
|
6,681 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) As of September 30, 2013 and 2012, this account and its movements are detailed as follows:
|
|
Land and |
|
Equipment |
|
Others |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Cost |
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2012 |
|
176,266 |
|
125,819 |
|
137,120 |
|
439,205 |
|
Additions |
|
337 |
|
7,150 |
|
7,798 |
|
15,285 |
|
Disposals/write-downs |
|
(453 |
) |
(1,176 |
) |
(1,704 |
) |
(3,333 |
) |
Transfers |
|
|
|
|
|
|
|
|
|
Reclassifications |
|
|
|
|
|
18 |
|
18 |
|
Total |
|
176,150 |
|
131,793 |
|
143,232 |
|
451,175 |
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
(35,228 |
) |
(108,272 |
) |
(99,890 |
) |
(243,390 |
) |
Impairment loss(*) |
|
|
|
|
|
(130 |
) |
(130 |
) |
Balance as of September 30, 2012 |
|
140,922 |
|
23,521 |
|
43,212 |
|
207,655 |
|
Balance as of December 31, 2012 |
|
176,152 |
|
132,026 |
|
144,637 |
|
452,815 |
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2013 |
|
176,152 |
|
132,026 |
|
144,637 |
|
452,815 |
|
Additions |
|
62 |
|
5,030 |
|
3,443 |
|
8,535 |
|
Disposals/write-downs |
|
(364 |
) |
(236 |
) |
(1,298 |
) |
(1,898 |
) |
Transfers |
|
|
|
(218 |
) |
218 |
|
|
|
Reclassifications |
|
|
|
|
|
|
|
|
|
Total |
|
175,850 |
|
136,602 |
|
147,000 |
|
459,452 |
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
(38,054 |
) |
(115,290 |
) |
(107,128 |
) |
(260,472 |
) |
Impairment loss (*)(***) |
|
|
|
|
|
(183 |
) |
(183 |
) |
Balance as of September 30, 2013 |
|
137,796 |
|
21,312 |
|
39,689 |
|
198,797 |
|
Accumulated Depreciation |
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2012 |
|
(33,503 |
) |
(103,034 |
) |
(94,799 |
) |
(231,336 |
) |
Reclassifications |
|
|
|
|
|
|
|
|
|
Depreciation charges in the period (*)(**) |
|
(2,178 |
) |
(6,414 |
) |
(6,553 |
) |
(15,145 |
) |
Sales and disposals in the period |
|
453 |
|
1,176 |
|
1,462 |
|
3,091 |
|
Balance as of September 30, 2012 |
|
(35,228 |
) |
(108,272 |
) |
(99,890 |
) |
(243,390 |
) |
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2012 |
|
(35,972 |
) |
(109,932 |
) |
(101,722 |
) |
(247,626 |
) |
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2013 |
|
(35,972 |
) |
(109,932 |
) |
(101,722 |
) |
(247,626 |
) |
Reclassifications |
|
|
|
(19 |
) |
19 |
|
|
|
Depreciation charges in the period (*)(**) |
|
(2,210 |
) |
(5,759 |
) |
(6,329 |
) |
(14,298 |
) |
Sales and disposals in the period |
|
128 |
|
420 |
|
904 |
|
1,452 |
|
Balance as of September 30, 2013 |
|
(38,054 |
) |
(115,290 |
) |
(107,128 |
) |
(260,472 |
) |
(*) See Note 35 - Depreciation, Amortization and Impairment.
(**) This amount does not include depreciation charges of the period for investments properties. This amount is included in item Other Assets for MCh$286 (MCh$286 as of September 30, 2012).
(***) It includes charge-offs provision of Property and Equipment of MCh$50 million
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
16. Property and equipment, continued:
(b) As of September 30, 2013 and 2012, the Bank has operating lease agreements in which it acts as lessee that cannot be terminated unilaterally; information on future payments is detailed as follows:
|
|
|
|
September 2013 |
| ||||||||||||
|
|
Expense |
|
Up to 1 |
|
Over 1 |
|
Over 3 |
|
Over 1 |
|
Over 3 |
|
Over 5 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Agreements |
|
21,470 |
|
2,296 |
|
4,576 |
|
16,681 |
|
37,016 |
|
26,735 |
|
49,055 |
|
136,359 |
|
|
|
|
|
September 2012 |
| ||||||||||||
|
|
Expense |
|
Up to 1 |
|
Over 1 |
|
Over 3 |
|
Over 1 |
|
Over 3 |
|
Over 5 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Agreements |
|
20,749 |
|
2,238 |
|
4,395 |
|
16,038 |
|
33,694 |
|
26,882 |
|
53,760 |
|
137,007 |
|
As these lease agreements are operating leases under IAS 17 the leased assets are not presented in the Banks Interim Condensed Consolidated Statement of Financial Position.
The Bank has entered into commercial leases of real estate. These leases have an average life of 5 years. There are no restrictions placed upon the lessee by entering into the lease.
(c) As of September 30, 2013 and 2012, the Bank does not have any finance lease agreements as lessee and, therefore, there are no property and equipment balances to be reported from such transactions as of September 30, 2013 and as of December 31, 2012.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
17. Current Taxes and Deferred Taxes:
(a) Current Taxes:
As of each period end, the Bank and its subsidiaries have established a First Category Income Tax Provision determined in accordance with current tax laws. This provision is presented net of recoverable taxes, detailed as follows:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Income taxes |
|
53,734 |
|
61,876 |
|
Tax on non-deductible expenses (tax rate 35 %) |
|
1,049 |
|
3,860 |
|
Less: |
|
|
|
|
|
Monthly prepaid taxes (PPM) |
|
(52,367 |
) |
(41,960 |
) |
Credit for training expenses |
|
(248 |
) |
(1,545 |
) |
Other |
|
(3,143 |
) |
965 |
|
Total |
|
(975 |
) |
23,196 |
|
Tax rate |
|
20.00 |
% |
20.00 |
% |
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Current tax assets |
|
3,018 |
|
2,684 |
|
Current tax liabilities |
|
(2,043 |
) |
(25,880 |
) |
Total tax receivable (payable) |
|
975 |
|
(23,196 |
) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
17. Current Taxes and Deferred Taxes, continued:
(b) Income Tax:
The Banks tax expense recorded for the nine-month period ended September 30, 2013 and 2012 as follows:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Income tax expense: |
|
|
|
|
|
Current year taxes |
|
53,734 |
|
47,334 |
|
Income tax adjustment for change in tax rate |
|
|
|
2,697 |
|
Tax from previous periods |
|
52 |
|
(1,147 |
) |
Subtotal |
|
53,786 |
|
48,884 |
|
|
|
|
|
|
|
Credit (charge) for deferred taxes: |
|
|
|
|
|
Origin and reversal of temporary differences |
|
1,844 |
|
(3,663 |
) |
Effect of changes in tax rate |
|
|
|
(14,206 |
) |
Subtotal |
|
1,844 |
|
(17,869 |
) |
|
|
|
|
|
|
Non deductible expenses (Art. 21 Income Tax Law) |
|
1,049 |
|
1,740 |
|
Other |
|
(8 |
) |
7 |
|
Net charge to income for income taxes |
|
56,671 |
|
32,762 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
17. Current and Deferred Taxes, continued:
(c) Reconciliation of effective tax rate:
The following is a reconciliation of the income tax rate to the effective rate applied to determine the Banks income tax expense as of September 30, 2013 and 2012:
|
|
September |
|
September |
| ||||
|
|
2013 |
|
2012 |
| ||||
|
|
Tax rate |
|
|
|
Tax rate |
|
|
|
|
|
% |
|
MCh$ |
|
% |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
Income tax calculated on net income before tax |
|
20.00 |
|
87,478 |
|
20.00 |
|
72,134 |
|
Additions or deductions |
|
(6.58 |
) |
(28,784 |
) |
(7.09 |
) |
(25,568 |
) |
Non-deductible expenses |
|
0.24 |
|
1,049 |
|
0.48 |
|
1,740 |
|
Tax from previous year |
|
0.01 |
|
52 |
|
(0.32 |
) |
(1,147 |
) |
Effect of changes in tax rate(*) |
|
|
|
|
|
(3.94 |
) |
(14,206 |
) |
Lease deferred tax adjustment |
|
|
|
|
|
0.82 |
|
2,942 |
|
Others |
|
(0.71 |
) |
(3,124 |
) |
(0.87 |
) |
(3,133 |
) |
Effective rate and income tax expense |
|
12.96 |
|
56,671 |
|
9.08 |
|
32,762 |
|
The effective rate for income tax for the period ended September 30, 2013 is 12.96% (9.08% in September 2012).
(*) |
The Law No. 20,630 of September 27, 2012, changed permanently the tax rate of income tax calculated on net income before tax (first category) to 20.00%. |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
17. Current and Deferred Taxes, continued:
(d) Effect of deferred taxes on income and equity:
The Bank and its subsidiaries have recorded the effects of deferred taxes in their financial statements.
The effects of deferred taxes on assets, liabilities and income accounts are detailed as follows:
|
|
Balances as |
|
Unrecognized |
|
Effect |
|
Balances |
| ||
|
|
2012 |
|
Differences |
|
Income |
|
Equity |
|
2013 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debit Differences: |
|
|
|
|
|
|
|
|
|
|
|
Allowances for loan losses |
|
99,113 |
|
|
|
5,289 |
|
|
|
104,402 |
|
Obligations with agreements to repurchase |
|
(11 |
) |
|
|
38 |
|
|
|
27 |
|
Personnel provisions |
|
6,092 |
|
|
|
(941 |
) |
|
|
5,151 |
|
Staff vacation |
|
4,058 |
|
|
|
310 |
|
|
|
4,368 |
|
Accrued interests and indexation adjustments from past due loans |
|
2,123 |
|
|
|
5 |
|
|
|
2,128 |
|
Staff severance indemnities provisions |
|
960 |
|
|
|
(46 |
) |
|
|
914 |
|
Other adjustments |
|
17,234 |
|
|
|
1,737 |
|
|
|
18,971 |
|
Total debit differences |
|
129,569 |
|
|
|
6,392 |
|
|
|
135,961 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Differences: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and price-level restatement of property and equipment |
|
15,423 |
|
|
|
(480 |
) |
|
|
14,943 |
|
Adjustment for valuation of financial assets available-for-sale and cash flow hedge |
|
4,758 |
|
|
|
|
|
(1,448 |
) |
3,310 |
|
Leasing equipment |
|
4,812 |
|
|
|
6,579 |
|
|
|
11,391 |
|
Transitory assets |
|
2,449 |
|
|
|
1,689 |
|
|
|
4,138 |
|
Adjustment for derivative instruments |
|
378 |
|
|
|
(210 |
) |
|
|
168 |
|
Other adjustments |
|
2,236 |
|
|
|
657 |
|
8 |
|
2,901 |
|
Total credit differences |
|
30,056 |
|
|
|
8,235 |
|
(1,440 |
) |
36,851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets (liabilities), net |
|
99,513 |
|
|
|
(1,843 |
) |
1,440 |
|
99,110 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
17. Current and Deferred Taxes, continued:
(d) Effect of deferred taxes on income and equity, continued:
The effects of deferred taxes on assets, liabilities and income as of September 30, 2012 and December 31, 2012, are detailed as follows:
|
|
Balances as |
|
Unrecognized |
|
Effect |
|
Balances |
|
Unrecognized |
|
Effect |
|
Balances |
| ||||
|
|
31, 2011 |
|
Differences |
|
Income |
|
Equity |
|
30, 2012 |
|
Differences |
|
Income |
|
Equity |
|
31, 2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debit Differences: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowances for loan losses |
|
76,910 |
|
|
|
18,734 |
|
|
|
95,644 |
|
|
|
3,469 |
|
|
|
99,113 |
|
Obligations with agreements to repurchase |
|
(263 |
) |
|
|
268 |
|
|
|
5 |
|
|
|
(16 |
) |
|
|
(11 |
) |
Personnel provisions |
|
4,930 |
|
|
|
393 |
|
|
|
5,323 |
|
|
|
769 |
|
|
|
6,092 |
|
Staff vacation |
|
3,637 |
|
|
|
471 |
|
|
|
4,108 |
|
|
|
(50 |
) |
|
|
4,058 |
|
Accrued interests and indexation adjustments from past due loans |
|
1,573 |
|
|
|
359 |
|
|
|
1,932 |
|
|
|
191 |
|
|
|
2,123 |
|
Staff severance indemnities provisions |
|
326 |
|
|
|
214 |
|
|
|
540 |
|
|
|
420 |
|
|
|
960 |
|
Other adjustments |
|
13,600 |
|
119 |
|
5,291 |
|
|
|
19,010 |
|
|
|
(1,776 |
) |
|
|
17,234 |
|
Total debit differences |
|
100,713 |
|
119 |
|
25,730 |
|
|
|
126,562 |
|
|
|
3,007 |
|
|
|
129,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Differences: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and price-level restatement of property and equipment |
|
14,196 |
|
|
|
1,562 |
|
|
|
15,758 |
|
|
|
(335 |
) |
|
|
15,423 |
|
Adjustment for valuation of financial assets available-for-sale and cash flow hedge |
|
(463 |
) |
|
|
|
|
4,880 |
|
4,417 |
|
|
|
|
|
341 |
|
4,758 |
|
Leasing Equipment |
|
(13,311 |
) |
|
|
14,736 |
|
|
|
1,425 |
|
|
|
3,387 |
|
|
|
4,812 |
|
Transitory assets |
|
1,524 |
|
|
|
1,292 |
|
|
|
2,816 |
|
|
|
(367 |
) |
|
|
2,449 |
|
Adjustment for derivative instruments |
|
2,057 |
|
|
|
(8,225 |
) |
|
|
(6,168 |
) |
|
|
6,546 |
|
|
|
378 |
|
Other adjustments |
|
3,641 |
|
(5 |
) |
(1,504 |
) |
|
|
2,132 |
|
|
|
112 |
|
(8 |
) |
2,236 |
|
Total credit differences |
|
7,644 |
|
(5 |
) |
7,861 |
|
4,880 |
|
20,380 |
|
|
|
9,343 |
|
333 |
|
30,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets (liabilities), net |
|
93,069 |
|
124 |
|
17,869 |
|
(4,880 |
) |
106,182 |
|
|
|
(6,336 |
) |
(333 |
) |
99,513 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) Item detail:
At the end of each period, other assets are detailed as follows:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Assets held for leasing(*) |
|
67,530 |
|
74,986 |
|
|
|
|
|
|
|
Assets received or awarded as payment(**) |
|
|
|
|
|
Assets awarded in judicial sale |
|
1,842 |
|
2,475 |
|
Assets received in lieu of payment |
|
208 |
|
81 |
|
Provision for assets received in lieu of payment |
|
(36 |
) |
(40 |
) |
Subtotal |
|
2,014 |
|
2,516 |
|
|
|
|
|
|
|
Other Assets |
|
|
|
|
|
Guaranteed cash deposit |
|
47,930 |
|
25,984 |
|
Documents intermediated(***) |
|
34,495 |
|
89,800 |
|
Other accounts and notes receivable |
|
19,719 |
|
20,001 |
|
Investment properties |
|
16,413 |
|
16,698 |
|
Servipag available funds |
|
16,117 |
|
15,534 |
|
Prepaid expenses |
|
12,925 |
|
3,476 |
|
Commissions receivable |
|
9,167 |
|
6,392 |
|
VAT receivable |
|
7,651 |
|
9,292 |
|
Recoverable income taxes |
|
5,855 |
|
7,695 |
|
Transaction in progress |
|
1,478 |
|
8,676 |
|
Rental guarantees |
|
1,400 |
|
1,386 |
|
Accounts receivable for sale of assets received in lieu of payment |
|
611 |
|
423 |
|
Materials and supplies |
|
544 |
|
610 |
|
Recovered leased assets for sale |
|
129 |
|
777 |
|
Others |
|
15,678 |
|
12,632 |
|
Subtotal |
|
190,112 |
|
219,376 |
|
Total |
|
259,656 |
|
296,878 |
|
(*) |
These correspond to property and equipment to be given under a finance lease. |
|
|
(**) |
Assets received in lieu of payment are assets received as payment of customers past-due debts. The assets acquired must at no time exceed, in the aggregate, 20% of the Banks effective equity. These assets represent 0.0070% (0.0032% as of December 31, 2012) of the Banks effective equity. |
|
|
|
The assets awarded at judicial sale are assets that have been acquired as payment of debts previously owed towards the Bank. The assets awarded at judicial sales are not subject to the aforementioned requirement. These properties are non- current assets available-for-sale. For most assets, the sale is expected to be completed within one year from the date on which the asset was received or acquired. If the asset in question is not sold within the year, it must be written off. |
|
|
|
The provision for assets received in lieu of payment is recorded as indicated in the Compendium of Accounting Standards, which indicate to recognize a provision for the difference between the initial value plus any additions and its realizable value when the former is greater. |
|
|
(***) |
This item mainly includes simultaneous operations carried out by the subsidiary Banchile Corredores de Bolsa S.A. |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
18. Other Assets, continued:
(b) Movements in the provision for assets received in lieu of payment during the nine-month period ended September 30, 2013 and 2012 are detailed as follows:
|
|
MCh$ |
|
|
|
|
|
Balance as of January 1, 2012 |
|
1,118 |
|
Provisions used |
|
(1,146 |
) |
Provisions established |
|
89 |
|
Provisions released |
|
|
|
Balance as of September 30, 2012 |
|
61 |
|
Provisions established |
|
(61 |
) |
Provisions released |
|
40 |
|
Balance as of December 31, 2012 |
|
40 |
|
Provisions used |
|
(39 |
) |
Provisions established |
|
36 |
|
Provisions released |
|
(1 |
) |
Balance as of September 30, 2013 |
|
36 |
|
19. Current accounts and Other Demand Deposits:
At the end of each period, current accounts and other demand deposits are detailed as follows:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Current accounts |
|
4,849,861 |
|
4,495,134 |
|
Other demand deposits and accounts |
|
714,538 |
|
599,320 |
|
Other demand deposits |
|
363,293 |
|
376,517 |
|
Total |
|
5,927,692 |
|
5,470,971 |
|
20. Savings accounts and Time Deposits:
At the end of each period, savings accounts and time deposits are detailed as follows:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Time deposits |
|
10,111,065 |
|
9,370,063 |
|
Term savings accounts |
|
178,741 |
|
179,465 |
|
Other term balances payable |
|
43,084 |
|
63,422 |
|
Total |
|
10,332,890 |
|
9,612,950 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
21. Borrowings from Financial Institutions:
(a) At the end of each period, borrowings from financial institutions are detailed as follows:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Domestic banks |
|
|
|
|
|
Banco Bice |
|
121 |
|
|
|
Subtotal |
|
121 |
|
|
|
|
|
|
|
|
|
Foreign banks |
|
|
|
|
|
Foreign trade financing |
|
|
|
|
|
Citibank N.A. |
|
160,365 |
|
107,249 |
|
Deutsche Bank |
|
113,779 |
|
12,003 |
|
Standard Chartered Bank |
|
105,575 |
|
117,218 |
|
Bank of America N.T. & S.A. |
|
77,761 |
|
189,501 |
|
Wells Fargo Bank |
|
63,066 |
|
131,763 |
|
Commerzbank A.G. |
|
59,242 |
|
182,926 |
|
HSBC Bank |
|
51,134 |
|
|
|
The Bank of New York Mellon |
|
35,855 |
|
57,161 |
|
JP Morgan Chase Bank |
|
25,263 |
|
24,003 |
|
Toronto Dominion Bank |
|
22,728 |
|
38,402 |
|
Mercantil Commercebank N.A. |
|
15,229 |
|
19,184 |
|
Zuercher Kantonalbank |
|
5,049 |
|
14,401 |
|
Bank of China |
|
281 |
|
828 |
|
Sumitomo Banking |
|
|
|
16,828 |
|
Banco de Sabadell |
|
|
|
337 |
|
Others |
|
141 |
|
22 |
|
|
|
|
|
|
|
Borrowings and other obligations |
|
|
|
|
|
Wells Fargo Bank |
|
101,072 |
|
96,370 |
|
China Development Bank |
|
31,732 |
|
35,996 |
|
Citibank N.A. |
|
6,769 |
|
27,571 |
|
Standard Chartered Bank |
|
|
|
36,084 |
|
Others |
|
1,074 |
|
816 |
|
Subtotal |
|
876,115 |
|
1,108,663 |
|
|
|
|
|
|
|
Chilean Central Bank |
|
11 |
|
18 |
|
|
|
|
|
|
|
Total |
|
876,247 |
|
1.108.681 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
21. Borrowings from Financial Institutions, continued:
(b) Domestic Banks Deposits
As of September 30, 2013 and the Bank has financial obligations with domestic banks institutions for an amount of MCh$121 (as of December 31, 2012 the Bank has not balances for this concept).
(c) Foreign Banks Obligations
The maturities are as follows:
|
|
September |
|
December |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Up to 1 month |
|
57,823 |
|
181,954 |
|
Over 1 month and up to 3 months |
|
78,821 |
|
153,702 |
|
Over 3 months and up to 12 months |
|
583,960 |
|
631,051 |
|
Over 1 year and up to 3 years |
|
155,511 |
|
141,956 |
|
Over 3 years and up to 5 years |
|
|
|
|
|
Over 5 years |
|
|
|
|
|
Total |
|
876,115 |
|
1,108,663 |
|
(d) Chilean Central Bank Obligations
Debts to the Central Bank of Chile include credit lines for the renegotiation of loans and other Central Bank borrowings.
The outstanding amounts owed to the Central Bank of Chile under these credit lines are as follows:
|
|
September |
|
December |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Borrowings and other obligations |
|
|
|
|
|
Total credit lines for the renegotiation of loans |
|
11 |
|
18 |
|
Total |
|
11 |
|
18 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
At the end of each period, debt issued is detailed as follows:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Mortgage bonds |
|
92,922 |
|
115,196 |
|
Bonds |
|
3,215,041 |
|
2,412,233 |
|
Subordinated bonds |
|
748,922 |
|
746,504 |
|
Total |
|
4,056,885 |
|
3,273,933 |
|
During the period ended as of September 30, 2013, Banco de Chile issued bonds by an amount of MCh$1,245,262, of which corresponds to Unsubordinated bonds and Subordinated Bonds by an amount of MCh$1,241,666 and MCh$3,596 respectively, according to the following details:
Bonds
Series |
|
MCh$ |
|
Term |
|
Interest rate |
|
Currency |
|
Issued date |
|
Maturity |
|
BCHIUR1011 |
|
22,114 |
|
12 years |
|
3.40 |
|
UF |
|
01/08/2013 |
|
01/08/2025 |
|
BCHIUR1011 |
|
8,521 |
|
12 years |
|
3.40 |
|
UF |
|
01/09/2013 |
|
01/09/2025 |
|
BCHIUJ0811 |
|
1,572 |
|
8 years |
|
3.20 |
|
UF |
|
01/29/2013 |
|
01/29/2021 |
|
BCHIUZ1011 |
|
89,313 |
|
7 years |
|
3.20 |
|
UF |
|
01/31/2013 |
|
01/31/2020 |
|
BCHIAC1011 |
|
45,456 |
|
15 years |
|
3.50 |
|
UF |
|
02/28/2013 |
|
02/28/2028 |
|
BCHIAC1011 |
|
34,185 |
|
15 years |
|
3.50 |
|
UF |
|
03/26/2013 |
|
03/26/2028 |
|
BCHIUN1011 |
|
72,022 |
|
7 years |
|
3.20 |
|
UF |
|
04/08/2013 |
|
04/08/2020 |
|
BCHIUU0212 |
|
68,379 |
|
12 years |
|
3.40 |
|
UF |
|
08/29/2013 |
|
08/29/2025 |
|
BCHIAU0213 |
|
69,746 |
|
12 years |
|
3.60 |
|
UF |
|
09/11/2013 |
|
09/11/2025 |
|
BCHIAG0213 |
|
46,585 |
|
5 years |
|
3.40 |
|
UF |
|
09/13/2013 |
|
09/13/2018 |
|
HKD bond |
|
45,552 |
|
10 years |
|
3.23 |
|
HKD |
|
04/22/2013 |
|
04/22/2023 |
|
CHF bond |
|
111,579 |
|
5 years |
|
1.13 |
|
CHF |
|
04/26/2013 |
|
05/23/2018 |
|
CHF bond |
|
27,895 |
|
5 years |
|
1.13 |
|
CHF |
|
05/07/2013 |
|
05/23/2018 |
|
CHF bond |
|
125,526 |
|
3 years |
|
0.76 |
|
CHF |
|
06/11/2013 |
|
07/18/2016 |
|
CHF bond |
|
69,737 |
|
4 years |
|
1.13 |
|
CHF |
|
06/28/2013 |
|
07/25/2017 |
|
Subtotal as of September 30, 2013 |
|
838,182 |
|
|
|
|
|
|
|
|
|
|
|
Short-term Bonds |
|
403,484 |
|
|
|
|
|
|
|
|
|
|
|
Total as of September 30, 2013 |
|
1,241,666 |
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
22. Debt Issued, continued:
Subordinated Bonds
Series |
|
MCh$ |
|
Term |
|
Interest |
|
Currency |
|
Issued date |
|
Maturity |
|
UCHI-G1111 |
|
3,596 |
|
25 years |
|
3.75 |
|
UF |
|
01/25/2013 |
|
01/25/2038 |
|
Total as of September 30, 2012 |
|
3,596 |
|
|
|
|
|
|
|
|
|
|
|
During the year ended December 31, 2012, Banco de Chile issued bonds by an amount of Ch$1,233,985 million, of which correspond to unsubordinated bond and Subordinated Bonds by an amount of MCh$1,207,808 and MCh$26,177 respectively, according to the following details:
Bonds
Series |
|
MCh$ |
|
Term |
|
Interest |
|
Currency |
|
Issued date |
|
Maturity |
|
BCHIUO0911 |
|
89,896 |
|
10 years |
|
3.40 |
|
UF |
|
02/15/2012 |
|
02/15/2022 |
|
BCHIUD0510 |
|
14,109 |
|
6 years |
|
2.20 |
|
UF |
|
02/16/2012 |
|
02/16/2018 |
|
BCHIUI0611 |
|
1,338 |
|
7 years |
|
3.20 |
|
UF |
|
03/05/2012 |
|
03/05/2019 |
|
BCHIUI0611 |
|
3,352 |
|
7 years |
|
3.20 |
|
UF |
|
03/07/2012 |
|
03/07/2019 |
|
BCHIUI0611 |
|
1,116 |
|
7 years |
|
3.20 |
|
UF |
|
03/23/2012 |
|
03/23/2019 |
|
BCHIUP1211 |
|
88,345 |
|
10 years |
|
3.40 |
|
UF |
|
04/04/2012 |
|
04/04/2022 |
|
BCHIUI0611 |
|
2,236 |
|
7 years |
|
3.20 |
|
UF |
|
04/17/2012 |
|
04/17/2019 |
|
BCHIUQ1011 |
|
27,343 |
|
11 years |
|
3.40 |
|
UF |
|
05/08/2012 |
|
05/08/2023 |
|
BCHIUQ1011 |
|
48,568 |
|
11 years |
|
3.40 |
|
UF |
|
05/11/2012 |
|
05/11/2023 |
|
BCHIUQ1011 |
|
12,449 |
|
11 years |
|
3.40 |
|
UF |
|
06/04/2012 |
|
06/04/2023 |
|
BCHIUS0212 |
|
46,428 |
|
11 years |
|
3.40 |
|
UF |
|
06/04/2012 |
|
06/04/2023 |
|
BCHIUS0212 |
|
20,552 |
|
11 years |
|
3.40 |
|
UF |
|
06/07/2012 |
|
06/07/2023 |
|
BCHIUT0112 |
|
66,850 |
|
12 years |
|
3.40 |
|
UF |
|
06/12/2012 |
|
06/12/2024 |
|
BCHIUR1011 |
|
33,295 |
|
12 years |
|
3.40 |
|
UF |
|
06/20/2012 |
|
06/20/2024 |
|
BONO HKD |
|
24,487 |
|
15 years |
|
4.00 |
|
HKD |
|
09/05/2012 |
|
09/05/2027 |
|
BCHIUR1011 |
|
4,450 |
|
12 years |
|
3.40 |
|
UF |
|
07/30/2012 |
|
07/30/2024 |
|
BCHIUR1011 |
|
13,469 |
|
12 years |
|
3.40 |
|
UF |
|
09/14/2012 |
|
09/14/2024 |
|
BCHIUR1011 |
|
1,799 |
|
12 years |
|
3.40 |
|
UF |
|
09/24/2012 |
|
09/24/2024 |
|
BCHIUR1011 |
|
5,284 |
|
12 years |
|
3.40 |
|
UF |
|
09/25/2012 |
|
09/25/2024 |
|
Subtotal as of September 30, 2012 |
|
505,366 |
|
|
|
|
|
|
|
|
|
|
|
BCHIUJ0811 |
|
1,334 |
|
8 years |
|
3.20 |
|
UF |
|
10/05/2012 |
|
10/05/2020 |
|
BCHIUJ0811 |
|
33,456 |
|
8 years |
|
3.20 |
|
UF |
|
10/10/2012 |
|
10/10/2020 |
|
BCHIUV1211 |
|
67,842 |
|
13 years |
|
3.50 |
|
UF |
|
10/10/2012 |
|
10/10/2025 |
|
BCHIUJ0811 |
|
1,566 |
|
8 years |
|
3.20 |
|
UF |
|
10/19/2012 |
|
10/19/2020 |
|
BCHIUJ0811 |
|
2,241 |
|
8 years |
|
3.20 |
|
UF |
|
10/22/2012 |
|
10/22/2020 |
|
BCHIAC1011 |
|
11,118 |
|
15 years |
|
3.50 |
|
UF |
|
10/22/2012 |
|
10/22/2027 |
|
BONO HKD |
|
54,374 |
|
15 years |
|
4.00 |
|
HKD |
|
11/07/2012 |
|
09/09/2027 |
|
BONO PEN |
|
14,083 |
|
5 years |
|
4.04 |
|
PEN |
|
10/30/2012 |
|
10/30/2017 |
|
Subtotal as of December 31, 2012 |
|
186,014 |
|
|
|
|
|
|
|
|
|
|
|
Short-term Bonds |
|
516,428 |
|
|
|
|
|
|
|
|
|
|
|
Total as of December 31, 2012 |
|
1,207,808 |
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
22. Debt Issued, continued:
Subordinated Bonds
Series |
|
MCh$ |
|
Term |
|
Interest |
|
Currency |
|
Issued date |
|
Maturity |
|
UCHI-G1111 |
|
13,191 |
|
25 years |
|
3.75 |
|
UF |
|
07/30/2012 |
|
07/30/2037 |
|
UCHI-G1111 |
|
1,099 |
|
25 years |
|
3.75 |
|
UF |
|
07/31/2012 |
|
07/31/2037 |
|
UCHI-G1111 |
|
1,782 |
|
25 years |
|
3.75 |
|
UF |
|
08/31/2012 |
|
08/31/2037 |
|
UCHI-G1111 |
|
10,105 |
|
25 years |
|
3.75 |
|
UF |
|
12/28/2012 |
|
12/28/2037 |
|
Total as of December 31, 2012 |
|
26,177 |
|
|
|
|
|
|
|
|
|
|
|
The Bank has not had breaches of capital, interest or other breaches with respect to its debts instruments as of September 30, 2013 and 2012.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
23. Other Financial Obligations:
At the end of each period, other financial obligations are detailed as follows:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Other Chilean obligations |
|
122,269 |
|
106,537 |
|
Public sector obligations |
|
52,698 |
|
55,586 |
|
Other abroad obligations |
|
|
|
|
|
Total |
|
174,967 |
|
162,123 |
|
(a) At the end of each period, provisions and accrued expenses are detailed as follows:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Provision for minimum dividends |
|
247,569 |
|
300,759 |
|
Provisions for Personnel benefits and payroll expenses |
|
60,648 |
|
64,546 |
|
Provisions for contingent loan risks |
|
47,217 |
|
36,585 |
|
Provisions for contingencies: |
|
|
|
|
|
Additional loan provisions(*) |
|
105,145 |
|
97,757 |
|
Country risk provisions |
|
4,974 |
|
3,107 |
|
Other provisions for contingencies |
|
1,852 |
|
2,083 |
|
Total |
|
467,405 |
|
504,837 |
|
(*) In the period it was registered an amount of Ch$7,388 million (MCh$2,271 in 2012) of additional provisions.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
24. Provisions, continued:
(b) The following table details the movements in provisions and accrued expenses during the nine-month period ended September 30, 2013 and December 31, 2012:
|
|
Minimum |
|
Personnel |
|
Contingent |
|
Additional |
|
Country risk |
|
|
|
|
|
dividends |
|
payroll |
|
loan Risks |
|
provisions |
|
contingencies |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances as of January 1, 2012 |
|
259,501 |
|
60,634 |
|
35,334 |
|
95,486 |
|
6,983 |
|
457,938 |
|
Provisions established |
|
214,885 |
|
40,732 |
|
2,909 |
|
|
|
2,219 |
|
260,745 |
|
Provisions used |
|
(259,501 |
) |
(37,606 |
) |
|
|
|
|
(223 |
) |
(297,330 |
) |
Provisions released |
|
|
|
(3,870 |
) |
|
|
|
|
(496 |
) |
(4,366 |
) |
Balances as of September 30, 2012 |
|
214,885 |
|
59,890 |
|
38,243 |
|
95,486 |
|
8,483 |
|
416,987 |
|
Provisions established |
|
85,874 |
|
10,067 |
|
|
|
2,271 |
|
|
|
98,212 |
|
Provisions used |
|
|
|
(5,411 |
) |
|
|
|
|
|
|
(5,411 |
) |
Provisions released |
|
|
|
|
|
(1,658 |
) |
|
|
(3,293 |
) |
(4,951 |
) |
Balances as of December 31, 2012 |
|
300,759 |
|
64,546 |
|
36,585 |
|
97,757 |
|
5,190 |
|
504,837 |
|
Provisions established |
|
247,569 |
|
34,308 |
|
10,632 |
|
7,388 |
|
2,098 |
|
301,995 |
|
Provisions used |
|
(300,759 |
) |
(33,710 |
) |
|
|
|
|
(368 |
) |
(334,837 |
) |
Provisions released |
|
|
|
(4,496 |
) |
|
|
|
|
(94 |
) |
(4,590 |
) |
Balances as of September 30, 2013 |
|
247,569 |
|
60,648 |
|
47,217 |
|
105,145 |
|
6,826 |
|
467,405 |
|
(c) Provisions for personnel benefits and payroll:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Short-term personnel benefits |
|
22,721 |
|
29,649 |
|
Vacation accrual |
|
21,837 |
|
20,842 |
|
Pension plan- defined benefit plan |
|
10,614 |
|
10,633 |
|
Other benefits |
|
5,476 |
|
3,422 |
|
Total |
|
60,648 |
|
64,546 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
24. Provisions, continued:
(d) Pension plan Defined benefit plan:
(i) Movement in the defined benefit obligations are as follow:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Opening defined benefit obligation |
|
10,633 |
|
8,511 |
|
Increase in provisions |
|
421 |
|
1,727 |
|
Benefit paid |
|
(454 |
) |
(624 |
) |
Prepayments |
|
(50 |
) |
(22 |
) |
Actuarial gains |
|
64 |
|
266 |
|
Closing defined benefit obligation |
|
10,614 |
|
9,858 |
|
(ii) Net benefits expenses:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Current service cost |
|
421 |
|
1,727 |
|
Interest cost of benefits obligations |
|
468 |
|
429 |
|
Actuarial gains (losses) |
|
(404 |
) |
(163 |
) |
Net benefit expenses |
|
485 |
|
1,993 |
|
(iii) Assumptions used to determine pension obligations:
The principal assumptions used in determining pension obligations for the Banks plan are shown below:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
% |
|
% |
|
|
|
|
|
|
|
Discount rate |
|
5.50 |
|
5.50 |
|
Annual salary increase |
|
5.19 |
|
5.08 |
|
Payment probability |
|
99.99 |
|
99.99 |
|
The most recent actuarial valuation of the present value of the benefit plan obligation was carried out at December 31, 2012.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
24. Provisions, continued:
(e) Movements in provisions for incentive plans:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Balances as of January 1, |
|
29,649 |
|
28,827 |
|
Provisions established |
|
19,112 |
|
22,315 |
|
Provisions used |
|
(23,004 |
) |
(24,025 |
) |
Provisions release |
|
(3,036 |
) |
(2,870 |
) |
Total |
|
22,721 |
|
24,247 |
|
(f) Movements in vacations accruals:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Balances as of January 1, |
|
20,842 |
|
20,361 |
|
Provisions established |
|
4,321 |
|
4,566 |
|
Provisions used |
|
(3,214 |
) |
(3,485 |
) |
Provisions release |
|
(112 |
) |
(250 |
) |
Total |
|
21,837 |
|
21,192 |
|
(g) Employee share-based benefits provision:
As of September 30, 2013 and as of December 31, 2012, the Bank and its subsidiaries do not have a stock-based compensation plan.
(h) Contingent loan provisions:
As of September 30, 2013 and as of December 31, 2012, the Bank and its subsidiaries maintain contingent loan provisions by an amount of Ch$47,217 million (Ch$36,585 million as of December 31, 2012). See Note No. 26 (d).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
At the end of each period, other liabilities are detailed as follows:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Accounts and notes payable(*) |
|
101,466 |
|
111,358 |
|
Unearned income |
|
4,730 |
|
5,357 |
|
Dividends payable |
|
1,211 |
|
883 |
|
|
|
|
|
|
|
Other liabilities |
|
|
|
|
|
Documents intermediated(**) |
|
82,418 |
|
132,651 |
|
Cobranding |
|
29,451 |
|
23,066 |
|
VAT debit |
|
11,374 |
|
11,689 |
|
Leasing deferred gains |
|
4,842 |
|
5,900 |
|
Transactions in progress |
|
1,251 |
|
5,080 |
|
Insurance payments |
|
528 |
|
135 |
|
Others |
|
2,310 |
|
4,947 |
|
Total |
|
239,581 |
|
301,066 |
|
(*) Comprises obligations that do not correspond to transactions in the line of business, such as withholding tax, pension and healthcare contributions, insurance payable, balances of prices for the purchase of materials and provisions for expenses pending payment.
(**) This item mainly includes financing of simultaneous operations performed by subsidiary Banchile Corredores de Bolsa S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
26. Contingencies and Commitments:
(a) Commitments and responsibilities accounted for in off-balance-sheet accounts:
In order to satisfy its customers needs, the Bank entered into several irrevocable commitments and contingent obligations. Although these obligations are not recognized in the Interim Condensed Consolidated Statement of Financial Position, they contain credit risks and, therefore, form part of the Banks overall risk.
The Bank and its subsidiaries record the following balances related to such commitments and responsibilities, which fall within its line of business, in off-balance-sheet accounts:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Contingent loans |
|
|
|
|
|
Guarantees and surety bonds |
|
407,525 |
|
323,924 |
|
Confirmed foreign letters of credit |
|
96,545 |
|
85,272 |
|
Issued letters of credit |
|
199,807 |
|
138,714 |
|
Bank guarantees |
|
1,497,238 |
|
1,437,312 |
|
Immediately available credit lines |
|
5,762,208 |
|
5,481,235 |
|
Other commitments |
|
672 |
|
122,997 |
|
Transactions on behalf of third parties |
|
|
|
|
|
Collections |
|
338,786 |
|
386,006 |
|
Third-party resources managed by the Bank: |
|
|
|
|
|
Financial assets managed on behalf of third parties |
|
976 |
|
12,144 |
|
Other Financial assets managed on behalf of third parties |
|
|
|
|
|
Financial assets acquired on its own behalf |
|
51,242 |
|
22,802 |
|
Other Financial assets acquired on its own behalf |
|
|
|
|
|
Fiduciary activities |
|
|
|
|
|
Securities held in safe custody in the Bank |
|
7,226,202 |
|
6,237,859 |
|
Securities held in safe custody in other entities |
|
4,529,305 |
|
4,483,567 |
|
Total |
|
20,110,506 |
|
18,731,832 |
|
The prior information only includes the most significant balances.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
26. Contingencies and Commitments, continued:
(b) Lawsuits and legal proceedings:
(b.1) Legal contingencies within the ordinary course of business:
In the ordinary course of business, the Bank and its subsidiaries act as defendant or co-defendant in various litigation matters. Although there can be no assurances, the Banks management believes, based on information currently available, that the ultimate resolution of these legal proceedings are not likely to have a material adverse effect on its results of operations, financial position, or liquidity. As of September 30, 2013, the Bank has established provisions for this concept in the amount of MCh$240 (MCh$474 as of December 31, 2012), recorded within Provisions in the Interim Condensed Consolidated Statement of Financial Position. The following table presents estimated date of completion of the respective litigation:
|
|
September 30, 2013 |
| ||||||||||
|
|
2013 |
|
2014 |
|
2015 |
|
2016 |
|
2017 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal contingencies |
|
30 |
|
5 |
|
67 |
|
135 |
|
3 |
|
240 |
|
(b.2) Contingencies for significant lawsuits:
As of September 30, 2013 and as of December 31, 2012 the Bank is not part to any significant lawsuits that affect or may affect these consolidated financial statements.
(c) Guarantees granted:
i. In subsidiary Banchile Administradora General de Fondos S.A.:
In compliance with Article 226 and subsequent Articles of Law 18,045, Banchile Administradora General de Fondos S.A., has designated Banco de Chile as the representative of the beneficiaries of the guarantees it has established and in that character the Bank has issued bank guarantees totaling UF 2,465,500, maturing January 9, 2014 (UF 2,442,000, maturing on January 4, 2013 as of December 31, 2012).
In addition to these guarantees for creating mutual funds, there are other guarantees for a guaranteed return on certain mutual funds, totaling Ch$59,149 million as of September 30, 2013 (Ch$118,734 million as of December 31, 2012).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
26. Contingencies and Commitments, continued:
(c) Guarantees granted, continued:
The details of guarantees are as follow:
|
|
September |
|
|
|
December |
|
|
|
|
|
2013 |
|
Guarantees |
|
2012 |
|
Guarantees |
|
Fund |
|
MCh$ |
|
Number |
|
MCh$ |
|
Number |
|
Mutual fund Depósito Plus |
|
14,241 |
|
330681-1 |
|
14,958 |
|
004713-3 |
|
Mutual fund Depósito Plus III |
|
12,937 |
|
006033-5 |
|
|
|
|
|
Mutual fund Depósito Plus II |
|
9,308 |
|
006037-7 |
|
12,552 |
|
005272-2 |
|
Mutual fund Small Cap USA |
|
5,197 |
|
008212-5 |
|
|
|
|
|
Mutual fund Chile Bursatil |
|
5,050 |
|
006034-3 |
|
|
|
|
|
Mutual fund Twin Win Europa 103 |
|
3,537 |
|
006035-1 |
|
3,541 |
|
004712-5 |
|
Mutual fund Global Stocks |
|
2,964 |
|
007385-9 |
|
|
|
|
|
Mutual fund Second Best Chile EEUU |
|
2,207 |
|
006032-7 |
|
2,207 |
|
004820-2 |
|
Mutual fund Europa Accionario |
|
2,059 |
|
006036-9 |
|
2,069 |
|
004716-7 |
|
Mutual fund Second Best Europa China |
|
1,649 |
|
007082-7 |
|
|
|
|
|
Mutual fund Potencias Consolidadas |
|
|
|
|
|
30,381 |
|
336718-4 |
|
Mutual fund Muralla China |
|
|
|
|
|
17,795 |
|
336716-8 |
|
Mutual fund Banca Americana Voltarget |
|
|
|
|
|
11,878 |
|
336723-1 |
|
Mutual fund Ahorro Estable II |
|
|
|
|
|
11,270 |
|
336722-3 |
|
Mutual fund Estrategia Commodities |
|
|
|
|
|
6,302 |
|
336721-5 |
|
Mutual fund Ahorro Estable III |
|
|
|
|
|
5,051 |
|
336717-6 |
|
Mutual fund Ahorro Plus I |
|
|
|
|
|
730 |
|
336720-7 |
|
Total |
|
59,149 |
|
|
|
118,734 |
|
|
|
ii. In subsidiary Banchile Corredores de Bolsa S.A.:
For the purposes of ensuring correct and complete compliance with all of its obligations as Stock Brokerage entity, in conformity with the provisions of Article 30 and subsequent Articles of Law 18,045 on Securities Markets, the subsidiary established a guarantee in an insurance policy for UF 20,000, insured by Cía. de Seguros de Crédito Continental S.A., that matures April 22, 2014, whereby the Securities Exchange of the Santiago Stock Exchange was appointed as the subsidiarys creditor representative.
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Guarantees: |
|
|
|
|
|
|
|
|
|
|
|
Shares to secure short-sale transactions in: |
|
|
|
|
|
Securities Exchange of the Santiago, Stock Exchange |
|
1,226 |
|
69 |
|
Securities Exchange of the Electronic, Stock Exchange of Chile |
|
2,246 |
|
33,693 |
|
|
|
|
|
|
|
Fixed income securities to ensure system CCLV, Securities Exchange of the Santiago, Stock Exchange |
|
2,983 |
|
3,068 |
|
|
|
|
|
|
|
Fixed income securities to ensure stock loans, Securities Exchange of the Electronic, Stock Exchange of Chile |
|
439 |
|
47 |
|
|
|
|
|
|
|
Total |
|
6,894 |
|
36,877 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
26. Contingencies and Commitments, continued:
(c) Guarantees granted, continued:
In conformity with the provisions of internal stock market regulations, and for the purpose of securing the brokers correct performance, the company established a pledge on its share of the Santiago Stock Exchange in favor of that institution, as recorded in Public Deed on September 13, 1990, signed before Santiago public notary Mr. Raul Perry Pefaur, and on its share in the Electronic Stock Exchange of Chile in favor of that institution, as recorded in a contract entered into by both parties on May 16, 1990.
Banchile Corredores de Bolsa S.A. keeps an insurance policy current with AIG Chile Compañía de Seguros Generales S.A. that expires January 2, 2014, and that covers employee fidelity, physical losses, falsification or adulteration, and currency fraud with a coverage amount equivalent to US$10,000,000.
(d) Provisions for contingencies loans:
Established provisions for credit risk from contingencies operations are the followings:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Credit lines |
|
31,220 |
|
22,661 |
|
Bank guarantees |
|
12,647 |
|
11,407 |
|
Guarantees and surety bonds |
|
2,549 |
|
2,064 |
|
Letters of credit |
|
800 |
|
434 |
|
Other commitments |
|
1 |
|
19 |
|
Total |
|
47,217 |
|
36,585 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(a) Capital
(i) Authorized, subscribed and paid shares:
As of September 30, 2013, the paid-in capital of Banco de Chile is represented by 93,175,043,991 registered shares (89,898,992,667 shares as of December 31, 2012), with no par value, fully paid and distributed.
(ii) Shares:
(ii.1) On March 21, 2013, the extraordinary shareholders meeting approved the capitalization of 30% of the distributable net income obtained during the fiscal year ending as of December 31, 2012.
(ii.2) The following table shows the share movements from December 31, 2011 to September 30, 2013:
|
|
Ordinary |
|
Ordinary T |
|
Total shares |
|
|
|
|
|
|
|
|
|
As of December 31, 2011 |
|
86,942,514,973 |
|
|
|
86,942,514,973 |
|
|
|
|
|
|
|
|
|
As of September 30, 2012 |
|
88,037,813,511 |
|
|
|
88,037,813,511 |
|
Fully paid and subscribed shares |
|
|
|
1,861,179,156 |
|
1,861,179,156 |
|
Total shares subscribed and fully paid as of December 31, 2012 |
|
88,037,813,511 |
|
1,861,179,156 |
|
89,898,992,667 |
|
Shares subscribed and paid period 2013 |
|
|
|
2,078,310,286 |
|
2,078,310,286 |
|
Conversion of Banco de Chile- T shares into Banco de Chile shares(**) |
|
3,939,489,442 |
|
(3,939,489,442 |
) |
|
|
Capitalization of retained earnings(***) |
|
1,197,741,038 |
|
|
|
1,197,741,038 |
|
Total Shares as of September 30, 2013 |
|
93,175,043,991 |
|
|
|
93,175,043,991 |
|
(*) Capital increase as of October 17, 2012.
(**) See note No. 5 (i) (d)
(**) Capitalization of May 13, 2013. See note No. 5 (i) (a)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
27. Equity, continued:
(b) Distributable income:
For purposes of Law No. 19,396 (in particular Articles 24, 25 and 28 of such law) and the Central Bank Contract between Banco de Chile and Sociedad Matriz del Banco de Chile S.A.- Banco de Chiles distributable net income will be determined by subtracting or adding to net income the correction of the value of the paid-in capital and reserves according to the variation of the Consumer Price Index between November of the fiscal year prior to the one in which the calculation is made and November of the fiscal year in which the calculation is made. The difference between net income and distributable net income shall be registered in a reserve account since the first day of the fiscal year following the date when the calculation is made. This reserve account cannot be distributed or capitalized. Provisional Article four shall be in force until the obligation of Law No. 19,396 owed by Sociedad Matriz del Banco de Chile S.A., directly or through its subsidiary SAOS has been fully paid. The distributable income for the nine-month period ended September 30, 2013 ascend to Ch$353,670 million (Ch$429,656 million as of December 31, 2012).
The above described agreement was subject to the consideration of the Council of the Central Bank of Chile, and such entity approved, in ordinary meeting that took place on December 3, 2009.
As stated, the retention of earnings for the year ended as of December 31, 2012, made in March of 2013, ascend to Ch$36,193 million (Ch$58,092 million of income for the year ended as of December 31, 2011, retained in March of 2012).
(c) Approval and payment of dividends:
At the Ordinary Shareholders Meeting held on March 21, 2013, the Banks shareholders agreed to distribute and pay dividend No. 201 amounting to Ch$3.41625263165 per common share of Banco de Chile, with charge to distributable net income for the year ended as of December 31, 2012. The dividend of period 2013 amounted Ch$343,455 million.
At the Ordinary Shareholders Meeting held on March 22, 2012, the Banks shareholders agreed to distribute and pay dividend No. 200 amounting to Ch$2.984740 per common share of Banco de Chile, with charge to distributable net income for the year ended as of December 31, 2011. The dividend of period 2012 amounted to Ch$296,802 millions.
(d) Provision for minimum dividends:
The Board of Directors established a minimum dividend distribution policy, where the Bank has to record a provision of 70% of net income of the Annual Consolidated Financial Statements. Accordingly, the Bank recorded a liability under the line item Provisions for an amount of MCh$247,569 (MCh$300,759 as of December 31, 2012) against Retained earnings.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
27. Equity, continued:
(e) Earnings per share:
i. Basic earnings per share:
Basic earnings per share are determined by dividing the net income attributable to the Bank shareholders in a period by the weighted average number of shares outstanding during the period.
ii. Diluted earnings per share:
Diluted earnings per share are determined in the same way as Basic Earnings, but the weighted average number of outstanding shares is adjusted to take into account the potential diluting effect of stock options, warrants, and convertible debt.
The following table shows the income and share data used in the calculation of EPS:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
Net profits attributable to ordinary equity holders of the bank (in millions) |
|
380,720 |
|
327,910 |
|
Weighted average number of ordinary shares |
|
92,929,577,197 |
|
88,037,813,511 |
|
Earning per shares (in Chilean pesos) |
|
4.10 |
|
3.72 |
|
|
|
|
|
|
|
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
Net profits attributable to ordinary equity holders of the bank (in millions) |
|
380,720 |
|
327,910 |
|
Weighted average number of ordinary shares |
|
92,929,577,197 |
|
88,037,813,511 |
|
Assumed conversion of convertible debt |
|
|
|
|
|
Adjusted number of shares |
|
92,929,577,197 |
|
88,037,813,511 |
|
Diluted earnings per share (in Chilean pesos) |
|
4.10 |
|
3.72 |
(*) |
(*) Capitalization of retained earnings are considered in the calculation of earnings per share.
As of September 30, 2013 and 2012, the Bank did not have any instruments that could lead to a dilution of its ordinary shares.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
27. Equity, continued:
(f) Other comprehensive income:
The cumulative translation adjustment is generated from the Banks translation of its investments in foreign companies, as it records the effects of foreign currency translation for these items in equity. During period of 2013 it was made a credit to equity for an amount of Ch$39 million (charge to equity for Ch$65 million as of September 30, 2012).
The fair market value adjustment for available-for-sale instruments is generated by fluctuations in the fair value of that portfolio, with a charge or credit to equity, net of deferred taxes. During the period of 2013 it was made a net credit to equity for an amount of Ch$7,320 million (net credit to equity for Ch$18,666 million as of September 30, 2012).
Cash flow hedge adjustment it consists in the portion of income of hedge instruments registered in equity produced in a cash flow hedge. During the period of 2013 it was made a net charge to equity for an amount of Ch$13,112 million (net credit to equity for Ch$1,044 million as of September 30, 2012).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
28. Interest Revenue and Expenses:
(a) On the Interim Condensed Consolidated Financial Statement closing date, the composition of income from interest and adjustments, not including the net loss from hedge accounting, is as follows:
|
|
September |
|
September |
| ||||||||||||
|
|
Interest |
|
Adjustment |
|
Prepaid |
|
Total |
|
Interest |
|
Adjustment |
|
Prepaid |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
546,351 |
|
49,579 |
|
2,064 |
|
597,994 |
|
510,362 |
|
51,120 |
|
1,462 |
|
562,944 |
|
Consumer loans |
|
415,897 |
|
665 |
|
6,195 |
|
422,757 |
|
379,081 |
|
555 |
|
5,122 |
|
384,758 |
|
Residential mortgage loans |
|
142,621 |
|
48,590 |
|
2,736 |
|
193,947 |
|
124,381 |
|
49,182 |
|
2,926 |
|
176,489 |
|
Financial investment |
|
49,790 |
|
10,484 |
|
|
|
60,274 |
|
44,861 |
|
9,521 |
|
|
|
54,382 |
|
Repurchase agreements |
|
1,316 |
|
1 |
|
|
|
1,317 |
|
2,044 |
|
|
|
|
|
2,044 |
|
Loans and advances to banks |
|
11,051 |
|
|
|
|
|
11,051 |
|
8,237 |
|
|
|
|
|
8,237 |
|
Other interest revenue |
|
165 |
|
804 |
|
|
|
969 |
|
122 |
|
970 |
|
|
|
1,092 |
|
Total |
|
1,167,191 |
|
110,123 |
|
10,995 |
|
1,288,309 |
|
1,069,088 |
|
111,348 |
|
9,510 |
|
1,189,946 |
|
The amount of interest revenue recognized on a received basis for impaired portfolio as of September 30, 2013 was Ch$6,108 million (Ch$6,649 million in 2012).
(b) At the each period end, the detail of income from suspended interest is as follows:
|
|
September |
|
September |
| ||||||||
|
|
Interest |
|
Adjustment |
|
Total |
|
Interest |
|
Adjustment |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
7,622 |
|
642 |
|
8,264 |
|
5,478 |
|
1,762 |
|
7,240 |
|
Residential mortgage loans |
|
1,377 |
|
662 |
|
2,039 |
|
1,449 |
|
687 |
|
2,136 |
|
Consumer loans |
|
295 |
|
|
|
295 |
|
194 |
|
|
|
194 |
|
Total |
|
9,294 |
|
1,304 |
|
10,598 |
|
7,121 |
|
2,449 |
|
9,570 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
28. Interest Revenue and Expenses, continued:
(c) At the each period end, interest and adjustment expenses (not including hedge gain) are detailed as follows:
|
|
September |
|
September |
| ||||||||
|
|
Interest |
|
Adjustment |
|
Total |
|
Interest |
|
Adjustment |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings accounts and time deposits |
|
330,617 |
|
23,670 |
|
354,287 |
|
325,390 |
|
31,420 |
|
356,810 |
|
Debt issued |
|
97,504 |
|
33,823 |
|
131,327 |
|
78,528 |
|
29,814 |
|
108,342 |
|
Other financial obligations |
|
1,483 |
|
458 |
|
1,941 |
|
1,594 |
|
546 |
|
2,140 |
|
Repurchase agreements |
|
10,164 |
|
|
|
10,164 |
|
11,634 |
|
10 |
|
11,644 |
|
Borrowings from financial institutions |
|
11,449 |
|
|
|
11,449 |
|
18,400 |
|
1 |
|
18,401 |
|
Demand deposits |
|
48 |
|
1,646 |
|
1,694 |
|
58 |
|
2,245 |
|
2,303 |
|
Other interest expenses |
|
|
|
87 |
|
87 |
|
14 |
|
98 |
|
112 |
|
Total |
|
451,265 |
|
59,684 |
|
510,949 |
|
435,618 |
|
64,134 |
|
499,752 |
|
(d) As of September 30, 2013 and 2012, the Bank uses interest rate swaps to hedge its position on the fair value of corporate bonds and commercial loans through micro-hedging.
|
|
September |
|
September |
| ||||||||
|
|
Income |
|
Expenses |
|
Total |
|
Income |
|
Expenses |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from accounting hedges |
|
16,758 |
|
10,264 |
|
27,022 |
|
2,400 |
|
1,778 |
|
4,178 |
|
Loss from accounting hedges |
|
(24,193 |
) |
(3,217 |
) |
(27,410 |
) |
(11,246 |
) |
|
|
(11,246 |
) |
Net gain on hedged items |
|
(8,279 |
) |
|
|
(8,279 |
) |
1,558 |
|
|
|
1,558 |
|
Total |
|
(15,714 |
) |
7,047 |
|
(8,667 |
) |
(7,288 |
) |
1,778 |
|
(5,510 |
) |
(e) At the each period end, the summary of interest and expenses is as follows:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Interest revenue |
|
1,288,309 |
|
1,189,946 |
|
Interest expenses |
|
(510,949 |
) |
(499,752 |
) |
Subtotal |
|
777,360 |
|
690,194 |
|
|
|
|
|
|
|
Income accounting hedges (net) |
|
(8,667 |
) |
(5,510 |
) |
|
|
|
|
|
|
Total interest revenue and expenses, net |
|
768,693 |
|
684,684 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
29. Income and Expenses from Fees and Commissions:
At the each period end, the income and expenses for fees and commissions shown in the Interim Consolidated Statements of Comprehensive Income refer to the following items:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Income from fees and commission |
|
|
|
|
|
Card services |
|
79,953 |
|
74,908 |
|
Collections and payments |
|
46,990 |
|
44,705 |
|
Investments in mutual funds and others |
|
40,628 |
|
42,645 |
|
Portfolio management (*) |
|
27,965 |
|
23,029 |
|
Lines of credit and overdrafts |
|
16,674 |
|
17,082 |
|
Fees for insurance transactions |
|
14,250 |
|
12,913 |
|
Trading and securities management |
|
13,322 |
|
12,879 |
|
Use of distribution channel |
|
13,185 |
|
11,914 |
|
Guarantees and letters of credit |
|
12,791 |
|
10,481 |
|
Usage Banchiles brand |
|
9,382 |
|
9,241 |
|
Financial advisory services |
|
1,995 |
|
2,908 |
|
Other fees earned (*) |
|
10,954 |
|
12,621 |
|
Total income from fees and commissions |
|
288,089 |
|
275,326 |
|
|
|
|
|
|
|
Expenses from fees and commissions |
|
|
|
|
|
Fees for credit card transactions(**) |
|
(54,089 |
) |
(44,822 |
) |
Sales force fees |
|
(8,441 |
) |
(7,206 |
) |
Fees for collections and payments |
|
(5,038 |
) |
(4,965 |
) |
Fees for securities transactions |
|
(2,413 |
) |
(2,494 |
) |
Sale of mutual fund units |
|
(1,765 |
) |
(2,142 |
) |
Other fees |
|
(493 |
) |
(1,197 |
) |
Total expenses from fees and commissions |
|
(72,239 |
) |
(62,826 |
) |
(*) During 2013 it was reclassified fees related to income from portfolio management from Other fees earned to Portfolio management. The reclassified amount in the period September 2012 was MCh$2,941 millions.
(**) See Note 2 (f) about Reclassifications
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
30. Net Financial Operating Income:
The gains (losses) from trading and brokerage activities is detailed as follows:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Financial assets held-for-trading |
|
17,980 |
|
14,777 |
|
Sale of available-for-sale instruments |
|
11,137 |
|
5,620 |
|
Sale of loan portfolios |
|
314 |
|
|
|
Net income on other transactions |
|
(281 |
) |
2,219 |
|
Trading derivative instruments |
|
(5,463 |
) |
(6,850 |
) |
Total |
|
23,687 |
|
15,766 |
|
31. Foreign Exchange Transactions, net:
Net foreign exchange transactions are detailed as follows:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Gain from accounting hedges |
|
27,988 |
|
(693 |
) |
Translation difference, net |
|
4,616 |
|
35,812 |
|
Indexed foreign currency, net |
|
4,160 |
|
(10,290 |
) |
Total |
|
36,764 |
|
24,829 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
32. Provisions for Loan Losses:
The movement during the nine-month period ended September 2013 and 2012 is the following:
|
|
Loans and |
|
Loans to customers |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
|
advances to |
|
Commercial |
|
Mortgage |
|
Consumer |
|
Total |
|
Contingent |
|
Total |
| ||||||||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Provisions established: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual provisions |
|
(493 |
) |
(31 |
) |
(17,791 |
) |
(1,429 |
) |
|
|
|
|
|
|
|
|
(17,791 |
) |
(1,429 |
) |
(2,138 |
) |
(1,068 |
) |
(20,422 |
) |
(2,528 |
) |
Group provisions |
|
|
|
|
|
(37,835 |
) |
(33,736 |
) |
(3,502 |
) |
(2,449 |
) |
(126,497 |
) |
(126,898 |
) |
(167,834 |
) |
(163,083 |
) |
(8,494 |
) |
(1,841 |
) |
(176,328 |
) |
(164,924 |
) |
Provisions established, net |
|
(493 |
) |
(31 |
) |
(55,626 |
) |
(35,165 |
) |
(3,502 |
) |
(2,449 |
) |
(126,497 |
) |
(126,898 |
) |
(185,625 |
) |
(164,512 |
) |
(10,632 |
) |
(2,909 |
) |
(196,750 |
) |
(167,452 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions released: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual provisions |
|
|
|
173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
173 |
|
Group provisions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions released, net |
|
|
|
173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision, net |
|
(493 |
) |
142 |
|
(55,626 |
) |
(35,165 |
) |
(3,502 |
) |
(2,449 |
) |
(126,497 |
) |
(126,898 |
) |
(185,625 |
) |
(164,512 |
) |
(10,632 |
) |
(2,909 |
) |
(196,750 |
) |
(167,279 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional provision |
|
|
|
|
|
(7,388 |
) |
|
|
|
|
|
|
|
|
|
|
(7,388 |
) |
|
|
|
|
|
|
(7,388 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery of written-off assets |
|
|
|
|
|
8,467 |
|
10,091 |
|
1,306 |
|
1,456 |
|
20,548 |
|
18,148 |
|
30,321 |
|
29,695 |
|
|
|
|
|
30,321 |
|
29,695 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions,for loan losses, net |
|
(493 |
) |
142 |
|
(54,547 |
) |
(25,074 |
) |
(2,196 |
) |
(993 |
) |
(105,949 |
) |
(108,750 |
) |
(162,692 |
) |
(134,817 |
) |
(10,632 |
) |
(2,909 |
) |
(173,817 |
) |
(137,584 |
) |
According to the management, the provisions constituted by credit risk, cover all the possible losses that could arise from the non-recovery of assets.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
At the each period end personnel expenses are detailed as follows:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Salaries |
|
143,242 |
|
134,965 |
|
Bonuses |
|
50,798 |
|
53,964 |
|
Lunch and health benefits |
|
16,947 |
|
16,300 |
|
Staff severance indemnities |
|
6,576 |
|
9,152 |
|
Training expenses |
|
1,988 |
|
1,269 |
|
Other personnel expenses |
|
14,640 |
|
15,982 |
|
Total |
|
234,191 |
|
231,632 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
At the each period end, administrative expenses are detailed as follows:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
General administrative expenses |
|
|
|
|
|
Information Technology and communications |
|
36,794 |
|
34,887 |
|
Maintenance and repair of property and equipment |
|
20,997 |
|
21,830 |
|
Office rental |
|
14,942 |
|
14,335 |
|
Securities and valuables transport services |
|
7,094 |
|
6,821 |
|
Office supplies |
|
6,556 |
|
4,796 |
|
Rent ATM area |
|
5,619 |
|
5,539 |
|
External advisory services |
|
4,736 |
|
4,876 |
|
Lighting, heating and other utilities |
|
3,332 |
|
3,673 |
|
Representation and transferring of personnel |
|
3,092 |
|
2,530 |
|
Legal and notary |
|
2,693 |
|
2,321 |
|
Insurance premiums |
|
2,418 |
|
2,052 |
|
P.O. box, mail and postage |
|
2,145 |
|
1,965 |
|
Donations |
|
1,468 |
|
1,059 |
|
Equipment rental |
|
909 |
|
875 |
|
Fees for professional services |
|
580 |
|
521 |
|
Other general administrative expenses |
|
7,029 |
|
7,977 |
|
Subtotal |
|
120,404 |
|
116,057 |
|
|
|
|
|
|
|
Outsources services |
|
|
|
|
|
Credit pre-evaluation services |
|
16,267 |
|
14,197 |
|
Data processing |
|
5,381 |
|
5,814 |
|
Other |
|
10,536 |
|
8,419 |
|
Subtotal |
|
32,184 |
|
28,430 |
|
|
|
|
|
|
|
Board expenses |
|
|
|
|
|
Board remunerations |
|
1,569 |
|
1,517 |
|
Other Board expenses |
|
363 |
|
322 |
|
Subtotal |
|
1,932 |
|
1,839 |
|
|
|
|
|
|
|
Marketing expenses |
|
|
|
|
|
Advertising |
|
20,522 |
|
21,209 |
|
Subtotal |
|
20,522 |
|
21,209 |
|
|
|
|
|
|
|
Taxes, payroll taxes and contributions |
|
|
|
|
|
Contribution to the Superintendency of Banks |
|
5,170 |
|
4,782 |
|
Real estate contributions |
|
1,684 |
|
1,981 |
|
Patents |
|
1,299 |
|
1,133 |
|
Other taxes |
|
1,114 |
|
617 |
|
Subtotal |
|
9,267 |
|
8,513 |
|
Total |
|
184,309 |
|
176,048 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
35. Depreciation, Amortization and Impairment:
(a) At the each period end, the amounts charged to income for depreciation and amortization are detailed as follows:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
Depreciation of property and equipment (Note No. 16a) |
|
14,584 |
|
15,431 |
|
Amortization of intangibles assets (Note No. 15b) |
|
6,748 |
|
7,836 |
|
Total |
|
21,332 |
|
23,267 |
|
(b) As of September 30, 2013 and 2012, the composition of impairment expenses is the following:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Impairment |
|
|
|
|
|
Impairment of Financial Instruments |
|
|
|
518 |
|
Impairment of Properties and Equipment (Note No. 16a) |
|
133 |
|
130 |
|
Impairment of Intangible Assets (Note No. 15b) |
|
|
|
|
|
Total |
|
133 |
|
648 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
At the each period end, the Bank and its subsidiaries present the following under other operating income:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Income for assets received in lieu of payment |
|
|
|
|
|
Income from sale of assets received in lieu of payment |
|
3,627 |
|
5,246 |
|
Other income |
|
113 |
|
2 |
|
Subtotal |
|
3,740 |
|
5,248 |
|
|
|
|
|
|
|
Release of provisions for contingencies |
|
|
|
|
|
Country risk provisions |
|
|
|
241 |
|
Provisions for credits abroad |
|
|
|
|
|
Other provisions for contingencies |
|
94 |
|
255 |
|
Subtotal |
|
94 |
|
496 |
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
Rental income |
|
5,291 |
|
4,427 |
|
Income from sale of leased assets |
|
2,229 |
|
191 |
|
Recovery from external branches |
|
1,635 |
|
1,865 |
|
Expense recovery |
|
1,427 |
|
1,885 |
|
Indemnities received |
|
898 |
|
|
|
Release of provision other assets |
|
551 |
|
|
|
Gain on sale of property and equipment |
|
210 |
|
231 |
|
Fiduciary and trustee commissions |
|
155 |
|
423 |
|
Foreign trade income |
|
20 |
|
41 |
|
Others |
|
1,674 |
|
1,534 |
|
Subtotal |
|
14,090 |
|
10,597 |
|
|
|
|
|
|
|
Total |
|
17,924 |
|
16,341 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
At the each period end, the Bank and its subsidiaries incurred the following other operating expenses:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Provisions and expenses for assets received in lieu of payment |
|
|
|
|
|
Charge-off assets received in lieu of payment |
|
1,308 |
|
1,974 |
|
Expenses to maintain assets received in lieu of payment |
|
361 |
|
423 |
|
Provisions for assets received in lieu of payment |
|
35 |
|
89 |
|
Subtotal |
|
1,704 |
|
2,486 |
|
|
|
|
|
|
|
Provisions for contingencies |
|
|
|
|
|
Country risk provisions |
|
1,868 |
|
|
|
Provisions for credits abroad |
|
|
|
|
|
Other provisions for contingencies |
|
369 |
|
3,337 |
|
Subtotal |
|
2,237 |
|
3,337 |
|
|
|
|
|
|
|
Other expenses |
|
|
|
|
|
Provisions for other expenses |
|
6,000 |
|
6,175 |
|
Write-offs for operating risks |
|
2,642 |
|
7,382 |
|
Card administration |
|
817 |
|
841 |
|
Provisions for other assets |
|
23 |
|
2,576 |
|
Others |
|
366 |
|
2,328 |
|
Subtotal |
|
9,848 |
|
19,302 |
|
|
|
|
|
|
|
Total |
|
13,789 |
|
25,125 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
38. Related Party Transactions:
The related parties of the Bank and its subsidiaries include entities of the Banks corporate group; corporations which are the Banks parent company, associated companies, subsidiaries, associates; directors, managers, administrators, main executives or receivers of the company on their own behalf or in representation of persons other than the Bank, and their respective spouses or family members up to the second degree of consanguinity or affinity, as well as any entity directly or indirectly controlled through any of them, the partnerships or companies in which the aforementioned persons are owners, directly or through other individuals or corporations, of 10% or more of their capital or directors, managers, administrators or main executives; any person that on their own or with others with whom they have a joint action agreement can designate at least one member of the companys management or controls 10% or more of the capital or of the voting capital, if dealing with a public corporation; those that establish the companys bylaws, or with a sound basis identify the directors committee; and those who have held the position of director, manager, administrator, main executive or receiver within the last eighteen months.
Article 147 of the Companies Act, states that a public corporation can only enter into transactions with related parties when the objective is to contribute to the companys interests, when terms of price, terms and conditions are commensurate to those prevailing in the market at the time of their approval and comply with the requirements and procedures stated in the same standard.
Moreover, Article 84 of the Chilean Banking Act. establishes limits for loans granted to related parties and prohibits the granting of loans to the Banks directors, managers and general representatives.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
38. Related Party Transactions, continued:
(a) Loans to related parties:
|
|
Production |
|
Investment Companies(**) |
|
Individuals(***) |
|
Total |
| ||||||||
|
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and accounts receivable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
286,577 |
|
250,983 |
|
36,354 |
|
63,576 |
|
914 |
|
704 |
|
323,845 |
|
315,263 |
|
Residential mortgage loans |
|
|
|
|
|
|
|
|
|
16,298 |
|
14,974 |
|
16,298 |
|
14,974 |
|
Consumer loans |
|
|
|
|
|
|
|
|
|
3,307 |
|
3,920 |
|
3,307 |
|
3,920 |
|
Gross loans |
|
286,577 |
|
250,983 |
|
36,354 |
|
63,576 |
|
20,519 |
|
19,598 |
|
343,450 |
|
334,157 |
|
Provision for loan losses |
|
(973 |
) |
(761 |
) |
(154 |
) |
(136 |
) |
(61 |
) |
(68 |
) |
(1,188 |
) |
(965 |
) |
Net loans |
|
285,604 |
|
250,222 |
|
36,200 |
|
63,440 |
|
20,458 |
|
19,530 |
|
342,262 |
|
333,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Off balance sheet accounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guarantees |
|
1,330 |
|
1,864 |
|
|
|
|
|
|
|
|
|
1,330 |
|
1,864 |
|
Letters of credits |
|
2,605 |
|
280 |
|
|
|
|
|
|
|
|
|
2,605 |
|
280 |
|
Banks guarantees |
|
18,900 |
|
24,361 |
|
2,000 |
|
2,374 |
|
|
|
|
|
20,900 |
|
26,735 |
|
Immediately available credit lines |
|
58,942 |
|
46,179 |
|
5,143 |
|
4,532 |
|
9,897 |
|
9,320 |
|
73,982 |
|
60,031 |
|
Total off balance sheet account |
|
81,777 |
|
72,684 |
|
7,143 |
|
6,906 |
|
9,897 |
|
9,320 |
|
98,817 |
|
88,910 |
|
Provision for contingencies loans |
|
(25 |
) |
(44 |
) |
(1 |
) |
(1 |
) |
|
|
|
|
(26 |
) |
(45 |
) |
Off balance sheet account, net |
|
81,752 |
|
72,640 |
|
7,142 |
|
6,905 |
|
9,897 |
|
9,320 |
|
98,791 |
|
88,865 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount covered by Collateral |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage |
|
31,327 |
|
31,034 |
|
55 |
|
55 |
|
14,270 |
|
15,325 |
|
45,652 |
|
46,414 |
|
Warrant |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pledge |
|
13 |
|
13 |
|
|
|
|
|
7 |
|
7 |
|
20 |
|
20 |
|
Others(****) |
|
2,842 |
|
2,842 |
|
17,300 |
|
17,300 |
|
10 |
|
10 |
|
20,152 |
|
20,152 |
|
Total colateral |
|
34,182 |
|
33,889 |
|
17,355 |
|
17,355 |
|
14,287 |
|
15,342 |
|
65,824 |
|
66,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired Instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For trading purposes |
|
12 |
|
|
|
|
|
|
|
|
|
|
|
12 |
|
|
|
Total acquired instruments |
|
12 |
|
|
|
|
|
|
|
|
|
|
|
12 |
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
38. Related Party Transactions, continued:
(a) Loans with related parties, continued:
(*) Production companies are legal entities which comply with the following conditions:
i) They engage in productive activities and generate a separable flow of income
ii) Less than 50% of their assets are trading securities or investments
(**) Investment companies include those legal entities that do not comply with the conditions for production companies and are profit-oriented.
(***) Individuals include key members of the management, who directly or indirectly posses the authority and responsibility of planning, administrating and controlling the activities of the organization, including directors. This category also includes their family members who are expected to have an influence or to be influenced by such individuals in their interactions with the organization.
(****) These guarantees correspond mainly to shares and other financial guarantees.
(b) Other assets and liabilities with related parties:
|
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
Assets |
|
|
|
|
|
Cash and due from banks |
|
10,674 |
|
11,174 |
|
Derivative instruments |
|
77,146 |
|
107,487 |
|
Other assets |
|
2,594 |
|
2,931 |
|
Total |
|
90,414 |
|
121,592 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Demand deposits |
|
149,037 |
|
87,480 |
|
Savings accounts and time deposits |
|
277,812 |
|
378,965 |
|
Derivative instruments |
|
85,092 |
|
83,582 |
|
Debt issued |
|
53,036 |
|
79,821 |
|
Borrowings from financial institutions |
|
167,134 |
|
134,820 |
|
Other liabilities |
|
18,014 |
|
9,044 |
|
Total |
|
750,125 |
|
773,712 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
38. Related Party Transactions, continued:
(c) Income and expenses from related party transactions (*):
|
|
September |
|
September |
| ||||
|
|
2013 |
|
2012 |
| ||||
|
|
Income |
|
Expense |
|
Income |
|
Expense |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Type of income or expense recognized |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and revenue expenses |
|
15,128 |
|
12,194 |
|
12,584 |
|
14,929 |
|
Fees and commission income |
|
37,752 |
|
24,948 |
|
43,093 |
|
22,184 |
|
Financial operating |
|
104,418 |
|
148,570 |
|
161,390 |
|
132,764 |
|
Released or established of provision for credit risk |
|
133 |
|
|
|
|
|
349 |
|
Operating expenses |
|
|
|
51,378 |
|
|
|
50,478 |
|
Other income and expenses |
|
412 |
|
23 |
|
601 |
|
15 |
|
Total |
|
157,843 |
|
237,113 |
|
217,668 |
|
220,719 |
|
(*) This detail does not correspond constitute a Statement of Comprehensive Income for related party transactions, soassets with these parties are not necessarily equal to liabilities and each item reflects total income and expense and does not correspond to exact transactions.
(d) Related party contracts:
There are no contracts entered during the period 2013 and 2012 which does not represent a customary transaction within the Banks line of business with general customers and which accounts for amounts greater than UF 1,000.
(e) Payments to key management personnel:
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
Remunerations |
|
2,559 |
|
2,939 |
|
Short-term benefits |
|
3,093 |
|
3,871 |
|
Contract termination indemnity |
|
418 |
|
260 |
|
Paid based on shares |
|
|
|
|
|
Total |
|
6,070 |
|
7,070 |
|
Composition of key personnel:
|
|
N° of executives |
| ||
|
|
September |
|
September |
|
|
|
2013 |
|
2012 |
|
Position |
|
|
|
|
|
CEO |
|
1 |
|
1 |
|
Deputy general manager |
|
|
|
1 |
|
CEOs of subsidiaries |
|
6 |
|
8 |
|
Division Managers |
|
11 |
|
14 |
|
Total |
|
18 |
|
24 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
38. Related Party Transactions, continued:
(f) Directors expenses and remunerations:
|
|
Remunerations |
|
Fees for attending |
|
Fees for attending |
|
Consulting |
|
Total |
| ||||||||||
Name of Directors |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
September |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pablo Granifo Lavín |
|
270 |
(*) |
267 |
(*) |
35 |
|
32 |
|
240 |
|
216 |
|
|
|
|
|
545 |
|
515 |
|
Andrónico Luksic Craig |
|
111 |
|
110 |
|
10 |
|
6 |
|
|
|
|
|
|
|
|
|
121 |
|
116 |
|
Jaime Estévez Valencia |
|
37 |
|
37 |
|
16 |
|
15 |
|
72 |
|
69 |
|
|
|
|
|
125 |
|
121 |
|
Gonzalo Menéndez Duque |
|
37 |
|
37 |
|
13 |
|
13 |
|
82 |
|
84 |
|
|
|
|
|
132 |
|
134 |
|
Jorge Awad Mehech |
|
37 |
|
37 |
|
18 |
|
15 |
|
84 |
|
80 |
|
|
|
|
|
139 |
|
132 |
|
Francisco Pérez Mackenna |
|
37 |
|
37 |
|
17 |
|
13 |
|
44 |
|
38 |
|
|
|
|
|
98 |
|
88 |
|
Rodrigo Manubens Moltedo |
|
37 |
|
37 |
|
17 |
|
16 |
|
39 |
|
37 |
|
|
|
|
|
93 |
|
90 |
|
Jorge Ergas Heymann |
|
37 |
|
37 |
|
13 |
|
13 |
|
32 |
|
33 |
|
|
|
|
|
82 |
|
83 |
|
Thomas Fürst Freiwirth |
|
37 |
|
37 |
|
14 |
|
14 |
|
30 |
|
30 |
|
|
|
|
|
81 |
|
81 |
|
Guillermo Luksic Craig |
|
12 |
|
37 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
12 |
|
41 |
|
Jean-Paul Luksic |
|
22 |
|
|
|
5 |
|
|
|
2 |
|
|
|
|
|
|
|
29 |
|
|
|
Jacob Ergas Ergas |
|
|
|
|
|
|
|
|
|
5 |
|
7 |
|
|
|
|
|
5 |
|
7 |
|
Others directors of subsidiaries |
|
|
|
|
|
|
|
|
|
118 |
|
123 |
|
|
|
|
|
118 |
|
123 |
|
Total |
|
674 |
|
673 |
|
158 |
|
141 |
|
748 |
|
717 |
|
|
|
|
|
1,580 |
|
1,531 |
|
(1) Includes fees paid to members of the Advisory Committee of Banchile Corredores de Seguros Ltda. of MCh$11 (MCh$13 as of September 30, 2012).
(*) Includes a provision of MCh$159 (MCh$155 as of September 30, 2012) for an incentive subject to achieving the Banks forecasted earnings.
Fees paid for advisory services to the Board of Directors amount to MCh$203 (MCh$198 as of September 30, 2012).
Travel and other related expenses amount to MCh$149 (MCh$110 as of September 30, 2012).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities:
Banco de Chile and its subsidiaries have defined a corporate framework for the Fair Value measurement and control to accomplish the Fair Value process according to local regulations, market standards and best practices in the industry. This framework is contained into the Banco de Chiles Fair Value Policy.
One of the most important definition in this framework is the Product Control Unit, hereinafter PCU, function. This area is independent from both the principal management and the business unit, and reports to the CFO of Banco de Chile. This area is responsible for the independent verification of Profit and Losses, and Fair Value measurement and control for all Treasury transactions; Trading, Funding and gapping and Investments deals.
To accomplish the measurements and controls, Banco de Chile and its subsidiaries, take into account at least the following aspects:
(i) Industry standards of fair value measurements
In the fair value calculation process, Banco de Chile uses standard methodologies; closing prices, discounted cash flows and option models, Black-Scholes models, in case of options. The input parameters are rates, prices and volatility levels for each term and market factor that can change the fair value of any instrument in the portfolio.
(ii) Quoted prices in active markets
The fair value for instruments with quoted prices in active markets is determined using daily quotes from electronic systems information as Bloomberg and Bolsa de Comercio de Santiago terminals. This quote represents the price at which the instrument is frequently buy and sell in financial markets.
(iii) Valuation techniques
If there is not market quotes in active markets for the financial instrument, valuation techniques will be used to determine the fair value.
Due to the fact that fair value models requires a set of market parameters as inputs, it is part of the fair value process to maximize the utilization based in observable quoted prices or derived from similar instruments in active markets. Nevertheless there are some cases for which neither quoted prices nor derived prices are available; in these cases external data from specialized providers, brokers such as ICAP, price for similar transactions and historical information it is used for validate the parameters that will be used as inputs.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(iv) Fair value adjustments
Part of the fair value process consist in adjustment, Market Value Adjustments or MVA for short, to take into account two different market facts; bid/offer spreads and market factors liquidity. These adjustments are calculated and analyzed by the PCU and Risk Market areas.
The bid/offer spread adjustment reflects the expected impact on fair value due to close long or short positions in a specific market factor and term, valuated at midpoint. For example, long positions in an asset will be impacted in order to reflect the fact that in selling that position will be quoted at bid instead at midpoint. For the bid/offer spread adjustment, market quotes or indicative prices for each position, instrument, currency and term are used. Bid, mid and offer market quotes are considered.
The liquidity adjustment considers the relative size to the market of each position in the portfolio. This adjustment is intended to reflect the relative size of Banco de Chile and the deepness of the markets. For this adjustment, the size of each position, recent transaction in active markets and recently observed liquidity are taking into account.
(v) Fair value control
To ensure that the market input parameters that Banco de Chile is using for fair value calculations represent the state of the market and the best estimate of fair value, the PCU unit runs on a daily basis an independent verification of prices and rates. This process aims to set a preventive control on the official market parameters provided by the respective business area. A comparative control based on Mark-to-Market differences, using one set of inputs prepared by the business area and one set prepared by the PCU, is conducted before fair value calculations. The output of this process is a set of differences in fair value by currency, product and portfolio. These differences are compared with specific ranges by grouping level; currency, product and portfolio.
In the event when significant differences were detected, these differences are scaled according to the amount of materiality for each grouping level, from a single report to the trader until a report to the Board. These ranges of materiality control are approved by the Assets and Liabilities Committee (ALCO).
Complementary and in parallel, the PCU generates daily reports of P&L and risk market exposure. These two kind of reports allows adequate control and consistency of the parameters used in the valuation, looking backwards revision.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(vi) Judgmental analysis and information to Senior Management.
In particular no cases where there is no market quotations for the instrument, similar transaction prices or indicative parameters, a reasoned analysis and specific controls should be made to estimate the fair value of the operation or transaction. Within the Banco de Chiles framework for fair value, described in the Fair Value Policy approved by the Board of Banco de Chile, the approval level required for operate this kind of instruments, there is no market information or cannot be inferred from prices or rates, is established.
(a) Fair value hierarchy
Banco de Chile and his subsidiaries, taken into account the preceding statements, classify all the financial instruments among the following levels:
Level 1: Observable, quoted price in active markets for the same instrument or specific type of transaction to be evaluated.
In this level are considered the following instruments: currency futures, Chilean central bank and treasury securities, mutual funds investments and equity.
For the Chilean central bank and treasury securities, all instruments that belong to one of the following benchmark groups will be considered as Level 1: Pesos-02, Pesos-05, Pesos-07, Pesos-10, UF-02, UF-05, UF-07, UF-10, UF-20, UF-30. A benchmark group is composed by a number of instruments that have similar duration and share the same quoted price within the group. This condition allows for a greater depth of the market, assuring daily observable quotes.
For each and every one of these instruments exist daily observable market valuation parameters; internal rates of return and closing prices, respectively, therefore no assumptions are needed to calculate the fair value. For currency futures as well as mutual funds and equity, closing prices times the number of instruments is used for fair value calculations. For Chilean central bank and treasury securities the internal rate of return is used to discount every cash flow and obtain the fair value of each instrument, for each currency; CLP or CLF.
The preceding described methodology corresponds to the one utilized for the Bolsa de Comercio de Santiago (Santiagos main Exchange) and is recognized as the standard in the market.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
Level 2: No market quotes are available for the specific financial instrument. For instruments in this level the valuation is done based on inference from observable market parameters; quoted prices for similar instruments in active markets.
This level is composed mostly by derivatives, currency and rate derivatives, banks debt securities, mortgage claims, money market instruments and less liquid Chilean Central Bank and treasury securities.
For derivatives the fair value process depend upon his value is impacted by volatility as a relevant market factor; if is the case, Black-Scholes-Merton type of formula it is used. For the rest of the derivatives, swaps and forwards, net present value through discounted cash flows is used. For securities classified as level 2, the obtained internal rate of return is used to discount every cash flow and obtain the fair value of each instrument, for each currency.
In the event that there is no observable price for an instrument in a specific term, the price will be inferred from the interpolation between periods that do have observable quoted price in active markets. These models incorporate various market variables, including foreign exchange rates and interest rate curves. In some cases external data from specialized providers, brokers such as ICAP and Riskamerica, price for similar transactions and historical information it is used for validate the parameters that will be used as inputs.
The techniques described above are used by the Santiago Stock Exchange in Chile, Bloomberg or the Over-the-Counter, and correspond to the standard methodology used in the local and international markets.
Level 3: The input parameters used in the valuation are not observable through market quotes in active markets neither can be inferred directly from other transaction information in active markets. This category also includes instruments that are valued based on quoted prices for similar instruments where adjustments or assumptions are needed to reflect the differences between them.
Instruments classified as level 3 correspond to Corporate Debt issued mainly Chilean and foreign companies, issued both in Chile and abroad. These instruments are classified, for accounting purposes, as Available for Sale. For this securities classified as level 3, the indicative internal rate of return is used to discount every cash flow and obtain the fair value of each instrument, for each currency. In this case only external data from specialized providers, brokers such as ICAP, Riskamerica and Interactive Data, it is used to for validate the parameters that will be used as inputs.
For this level corresponds to the described technique used by both the Bolsa de Comercio de Santiago de Chile as Bloomberg, and correspond to the standard methodology used in the local and international market.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(b) Level hierarchy classification and figures
The following table shows the figures by hierarchy, for instruments registered at fair value.
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
| ||||||||
|
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
September |
|
December |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held-for-trading from the Chilean Government and Central Bank |
|
55,221 |
|
65,548 |
|
44,685 |
|
6,831 |
|
|
|
|
|
99,906 |
|
72,379 |
|
Other instruments issued in Chile |
|
3,367 |
|
188 |
|
211,233 |
|
87,115 |
|
3,120 |
|
|
|
217,720 |
|
87,303 |
|
Instruments issued abroad |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual fund investments |
|
48,266 |
|
33,042 |
|
|
|
|
|
|
|
|
|
48,266 |
|
33,042 |
|
Subtotal |
|
106,854 |
|
98,778 |
|
255,918 |
|
93,946 |
|
3,120 |
|
|
|
365,892 |
|
192,724 |
|
Derivative contracts for trading purposes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forwards |
|
|
|
|
|
54,439 |
|
70,166 |
|
|
|
|
|
54,439 |
|
70,166 |
|
Swaps |
|
|
|
|
|
220,894 |
|
258,496 |
|
|
|
|
|
220,894 |
|
258,496 |
|
Call Options |
|
|
|
|
|
2,015 |
|
472 |
|
|
|
|
|
2,015 |
|
472 |
|
Put Options |
|
|
|
|
|
1,184 |
|
341 |
|
|
|
|
|
1,184 |
|
341 |
|
Futures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
|
|
|
|
278,532 |
|
329,475 |
|
|
|
|
|
278,532 |
|
329,475 |
|
Hedge accounting derivative contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swaps |
|
|
|
|
|
11,955 |
|
22 |
|
|
|
|
|
11,955 |
|
22 |
|
Subtotal |
|
|
|
|
|
11,955 |
|
22 |
|
|
|
|
|
11,955 |
|
22 |
|
Financial assets available-for-sale(1) from the Chilean Government and Central Bank |
|
153,688 |
|
136,554 |
|
531,295 |
|
115,230 |
|
|
|
|
|
684,983 |
|
251,784 |
|
Other instruments issued in Chile |
|
|
|
|
|
673,068 |
|
646,079 |
|
357,820 |
|
278,073 |
|
1,030,888 |
|
924,152 |
|
Instruments issued abroad |
|
35,288 |
|
30,538 |
|
|
|
|
|
33,194 |
|
57,966 |
|
68,482 |
|
88,504 |
|
Subtotal |
|
188,976 |
|
167,092 |
|
1,204,363 |
|
761,309 |
|
391,014 |
|
336,039 |
|
1,784,353 |
|
1,264,440 |
|
Total |
|
295,830 |
|
265,870 |
|
1,750,768 |
|
1,184,752 |
|
394,134 |
|
336,039 |
|
2,440,732 |
|
1,786,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative contracts for trading purposes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forwards |
|
|
|
|
|
68,575 |
|
81,790 |
|
|
|
|
|
68,575 |
|
81,790 |
|
Swaps |
|
|
|
|
|
270,065 |
|
264,052 |
|
|
|
|
|
270,065 |
|
264,052 |
|
Call Options |
|
|
|
|
|
2,528 |
|
395 |
|
|
|
|
|
2,528 |
|
395 |
|
Put Options |
|
|
|
|
|
885 |
|
387 |
|
|
|
|
|
885 |
|
387 |
|
Futures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
|
|
|
|
342,053 |
|
346,624 |
|
|
|
|
|
342,053 |
|
346,624 |
|
Hedge derivative contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swaps |
|
|
|
|
|
32,975 |
|
33,698 |
|
|
|
|
|
32,975 |
|
33,698 |
|
Subtotal |
|
|
|
|
|
32,975 |
|
33,698 |
|
|
|
|
|
32,975 |
|
33,698 |
|
Total |
|
|
|
|
|
375,028 |
|
380,322 |
|
|
|
|
|
375,028 |
|
380,322 |
|
(1) As of September 30, 2013, 96% of instruments of level 3 have the denomination Investment Grade, meaning are assets with a classification BBB- or higher. Also, 90% of total of these financial instruments correspond to domestic issuers.
Since last quarter of period 2012, it was established more precisely the classification of the level of financial instruments, according to what observables are their prices in the market. The new definition is described above of this disclosure. It should be noted that this change has no impact on the valuation of financial assets and liabilities measured at fair value.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(c) Level 3 reconciliation
The following table shows the reconciliation between stock at the beginning and the end of balance periods for instruments classified in Level 3:
|
|
As of September 30, 2013 |
| ||||||||||
|
|
Balance as of |
|
Gain (Loss) |
|
Gain (Loss) |
|
Purchases, Sales |
|
Transfer |
|
Balance as |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held-for-trading |
|
|
|
|
|
|
|
|
|
|
|
|
|
From the Chilean Government and Central Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
|
|
92 |
|
|
|
3,028 |
|
|
|
3,120 |
|
Instruments issued abroad |
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
|
|
92 |
|
|
|
3,028 |
|
|
|
3,120 |
|
Available-for-Sale Instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
From the Chilean Government and Central Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
278,073 |
|
(3,571 |
) |
4,968 |
|
78,350 |
|
|
|
357,820 |
|
Instruments issued abroad |
|
57,966 |
|
(3,945 |
) |
304 |
|
(21,131 |
) |
|
|
33,194 |
|
Subtotal |
|
336,039 |
|
(7,516 |
) |
5,272 |
|
57,219 |
|
|
|
391,014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
336,039 |
|
(7,424 |
) |
5,272 |
|
60,247 |
|
|
|
394,134 |
|
|
|
As of December 31, 2012 |
| ||||||||||
|
|
Balance as of |
|
Gain (Loss) |
|
Gain (Loss) in Equity |
|
Purchases, Sales |
|
Transfer |
|
Balance as |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held-for-trading |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
585 |
|
183 |
|
|
|
(768 |
) |
|
|
|
|
Instruments issued abroad |
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
585 |
|
183 |
|
|
|
(768 |
) |
|
|
|
|
Available-for- Sale Instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
321,378 |
|
1,511 |
|
(1,410 |
) |
(43,406 |
) |
|
|
278,073 |
|
Instruments issued abroad |
|
128,403 |
|
(5,713 |
) |
19,666 |
|
(59,432 |
) |
(24,958 |
) |
57,966 |
|
Subtotal |
|
449,781 |
|
(4,202 |
) |
18,256 |
|
(102,838 |
) |
(24,958 |
) |
336,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
450,366 |
|
(4,019 |
) |
18,256 |
|
(103,606 |
) |
(24,958 |
) |
336,039 |
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(d) Sensitivity of level 3 instruments to changes in key assumptions of the input parameters for the valuation model.
The following table shows the sensitivity, by instrument, for instruments classified as level 3 to changes in key assumptions:
|
|
As of September 30, 2013 |
|
As of December 31, 2012 |
| ||||
|
|
Level 3 |
|
Sensitivity to changes in |
|
Level 3 |
|
Sensitivity to changes in |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Financial Assets |
|
|
|
|
|
|
|
|
|
Financial assets held-for-trading |
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
3,120 |
|
(44 |
) |
|
|
|
|
Total |
|
3,120 |
|
(44 |
) |
|
|
|
|
Financial assets available-for-Sale |
|
|
|
|
|
|
|
|
|
Other instruments issued in Chile |
|
357,820 |
|
(5,301 |
) |
278,073 |
|
(802 |
) |
Instruments issued abroad |
|
33,194 |
|
(246 |
) |
57,966 |
|
(762 |
) |
Total |
|
391,014 |
|
(5,547 |
) |
336,039 |
|
(1,564 |
) |
With the purpose to determine the sensitivity of the financial investments to changes in significant factors market, the Bank has made alternative calculations at fair value, changing those key parameters for the valuation and which are not directly observables in screens. In the case of financial assets presented above table, which corresponds to bank bonds and corporate bonds, considering that these instruments do not have current prices or observables, was used as inputs prices, prices based on broker quotes or runs. Prices are generally calculated as a base rate plus a spread. For local bonds, this was determined by applying only a 10% impact on the price, while for offshore bonds this was determined by applying only a 10% impact on the spread because the base rate is hedged with instruments on interest rate swaps so-called hedge accounting. The impact of 10% is considered a reasonable move considering the market performance of these instruments and comparing it against the adjustment bid/offer that is provided for by these instruments. The methodology described above begins in March 2013. Before that date, the methodology consisted in compare the valuation of these instruments using market rates given by Trading Desk of the Bank, with the same calculate, but using rates of independent sources. If this methodology had used in balances as of December 31, 2012, the effect would have been a charge to income of MCh$5,276 million.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
(e) Other assets and liabilities
The following table summarizes the fair values of the Banks main financial assets and liabilities that are not recorded at fair value in the Statement of Financial Position. The values shown in this note do not attempt to estimate the value of the Banks income-generating assets, nor forecast their future behavior. The estimated fair value is as follows:
|
|
Book Value |
|
Fair Value |
| ||||
|
|
September |
|
December |
|
September |
|
December |
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Assets |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
998,770 |
|
684,925 |
|
998,770 |
|
684,925 |
|
Transactions in the course of collection |
|
513,900 |
|
396,611 |
|
513,900 |
|
396,611 |
|
Cash collateral on securities borrowed and reverse repurchase agreements |
|
20,501 |
|
35,100 |
|
20,501 |
|
35,100 |
|
Subtotal |
|
1,533,171 |
|
1,116,636 |
|
1,533,171 |
|
1,116,636 |
|
Loans and advances to banks |
|
|
|
|
|
|
|
|
|
Domestic banks |
|
158,905 |
|
14,304 |
|
158,905 |
|
14,304 |
|
Central Bank of Chile |
|
150,674 |
|
1,100,696 |
|
150,674 |
|
1,100,696 |
|
Foreign banks |
|
367,374 |
|
228,322 |
|
367,374 |
|
228,322 |
|
Subtotal |
|
676,953 |
|
1,343,322 |
|
676,953 |
|
1,343,322 |
|
Loans to customers, net |
|
|
|
|
|
|
|
|
|
Commercial loans |
|
12,621,317 |
|
11,484,276 |
|
12,525,231 |
|
11,473,251 |
|
Residential mortgage loans |
|
4,565,219 |
|
4,182,587 |
|
4,622,541 |
|
4,201,091 |
|
Consumer loans |
|
2,770,850 |
|
2,667,467 |
|
2,804,063 |
|
2,683,593 |
|
Subtotal |
|
19,957,386 |
|
18,334,330 |
|
19,951,835 |
|
18,357,935 |
|
Total |
|
22,167,510 |
|
20,794,288 |
|
22,161,959 |
|
20,817,893 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current accounts and other demand deposits |
|
5,927,692 |
|
5,470,971 |
|
5,927,692 |
|
5,470,971 |
|
Transactions in the course of payment |
|
314,489 |
|
159,218 |
|
314,489 |
|
159,218 |
|
Cash collateral on securities lent and repurchase agreements |
|
223,409 |
|
226,396 |
|
223,409 |
|
226,396 |
|
Savings accounts and time deposits |
|
10,332,890 |
|
9,612,950 |
|
10,330,483 |
|
9,589,643 |
|
Borrowings from financial institutions |
|
876,247 |
|
1,108,681 |
|
871,530 |
|
1,103,252 |
|
Other financial obligations |
|
174,967 |
|
162,123 |
|
174,967 |
|
162,123 |
|
Subtotal |
|
17,849,694 |
|
16,740,339 |
|
17,842,570 |
|
16,711,603 |
|
Debt Issued |
|
|
|
|
|
|
|
|
|
Letters of credit for residential purposes |
|
71,503 |
|
85,967 |
|
74,207 |
|
87,088 |
|
Letters of credit for general purposes |
|
21,419 |
|
29,229 |
|
22,229 |
|
29,610 |
|
Bonds |
|
3,215,041 |
|
2,412,233 |
|
3,126,751 |
|
2,282,014 |
|
Subordinate bonds |
|
748,922 |
|
746,504 |
|
732,368 |
|
726,369 |
|
Subtotal |
|
4,056,885 |
|
3,273,933 |
|
3,955,555 |
|
3,125,081 |
|
Total |
|
21,906,579 |
|
20,014,272 |
|
21,798,125 |
|
19,836,684 |
|
The fair value of assets not presented at fair value in the Statement of Financial Position is derived from balance sheet stocks and cash flows that Banco de Chile expects to receive, discounted using the relevant market interest rate for each type of transaction. These lasts cash flows are obtained from regulatory reports, in particular the C40 report.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
39. Fair Value of Financial Assets and Liabilities, continued:
The C40 report contains cash flows, in future value, for assets and liabilities, by maturity and currency. For long term assets and liabilities, contractual cash flows are used to calculate the fair value. The cash flows are discounted by type of asset and currency to obtain their present value. The discount rates used to calculate the present value for each type of asset and liability correspond to the marginal rates of each product, considering specific rates by currency and term to capture both the risk inherent to the term as well as the expected level of each currency.
For financial assets and liabilities that have a short term maturity (less than three months) it is assumed that the carrying amounts approximate their fair value. This assumption is also applied to demand deposits and savings accounts without specific maturity.
For loans, contractual cash flows and loan loss provisions are used to calculate the fair value. The cash flows are discounted by type of asset and currency to obtain their present value. Consecutively, the loan loss provision, by type of asset, is subtracted from the present value to take into account the fact that the Bank has already model the estimate probability that his customers do not fulfill their obligations.
In the case of held to maturity investment, the fair value is based on market prices. The fair value of liabilities that do not have quoted market prices, it is based on discounted cash flows, using interest rates to similar terms.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
40. Maturity of Assets and Liabilities:
The table below shows details of loans and other financial assets and liabilities grouped in accordance with their remaining maturity, including accrued interest as of September 30, 2013 and December 31, 2012, respectively. Trading and available-for-sale instruments are included at their fair value:
|
|
As of September 30, 2013 |
| ||||||||||||
|
|
Up to 1 |
|
Over 1 month |
|
Over 3 month |
|
Over 1 year |
|
Over 3 year |
|
Over 5 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
998,770 |
|
|
|
|
|
|
|
|
|
|
|
998,770 |
|
Transactions in the course of collection |
|
513,900 |
|
|
|
|
|
|
|
|
|
|
|
513,900 |
|
Financial Assets held-for-trading |
|
365,892 |
|
|
|
|
|
|
|
|
|
|
|
365,892 |
|
Cash collateral on securities borrowed and reverse repurchase agreements |
|
19,331 |
|
672 |
|
498 |
|
|
|
|
|
|
|
20,501 |
|
Derivative instruments |
|
19,472 |
|
17,047 |
|
61,705 |
|
63,766 |
|
56,048 |
|
72,449 |
|
290,487 |
|
Loans and advances to banks(**) |
|
391,332 |
|
32,650 |
|
254,423 |
|
|
|
|
|
|
|
678,405 |
|
Loans to customers(*)(**) |
|
1,857,652 |
|
1,928,885 |
|
3,413,068 |
|
4,723,780 |
|
2,223,640 |
|
5,010,164 |
|
19,157,189 |
|
Financial assets available-for-sale |
|
376,379 |
|
35,218 |
|
499,979 |
|
134,363 |
|
496,388 |
|
242,026 |
|
1,784,353 |
|
Financial assets held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
4,542,728 |
|
2,014,472 |
|
4,229,673 |
|
4,921,909 |
|
2,776,076 |
|
5,324,639 |
|
23,809,497 |
|
|
|
As of December 31, 2012 |
| ||||||||||||
|
|
Up to 1 |
|
Over 1 month |
|
Over 3 month |
|
Over 1 year |
|
Over 3 year |
|
Over 5 years |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
684,925 |
|
|
|
|
|
|
|
|
|
|
|
684,925 |
|
Transactions in the course of collection |
|
396,611 |
|
|
|
|
|
|
|
|
|
|
|
396,611 |
|
Financial Assets held-for-trading |
|
192,724 |
|
|
|
|
|
|
|
|
|
|
|
192,724 |
|
Cash collateral on securities borrowed and reverse repurchase agreements |
|
8,338 |
|
855 |
|
25,907 |
|
|
|
|
|
|
|
35,100 |
|
Derivative instruments |
|
19,155 |
|
26,190 |
|
85,576 |
|
93,733 |
|
40,801 |
|
64,042 |
|
329,497 |
|
Loans and advances to banks(**) |
|
1,152,642 |
|
14,409 |
|
177,230 |
|
|
|
|
|
|
|
1,344,281 |
|
Loans to customers(*)(**) |
|
1,743,729 |
|
1,863,499 |
|
3,512,461 |
|
4,110,399 |
|
1,945,584 |
|
4,653,379 |
|
17,829,051 |
|
Financial assets available-for-sale |
|
272,371 |
|
171,017 |
|
343,665 |
|
152,075 |
|
132,382 |
|
192,930 |
|
1,264,440 |
|
Financial assets held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
4,470,495 |
|
2,075,970 |
|
4,144,839 |
|
4,356,207 |
|
2,118,767 |
|
4,910,351 |
|
22,076,629 |
|
(*) This only includes loans that are current as of period end. Therefore, it excludes past due loans amounting to MCh$1,256,481 (MCh$932,714 as of December 31, 2012) of which MCh$727,515 (MCh$524,552 as of December 31, 2012) were less than 30 days past due.
(**) The respective provisions, which amount to MCh$456,284 (MCh$427,435 as of December 31, 2012) for loans to customers and MCh$1,452 (MCh$959 as of December 31, 2012) for borrowings from financial institutions, have not been deducted from these balance.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
40. Maturity of Assets and Liabilities, continued:
|
|
As of September 30, 2013 |
| ||||||||||||
|
|
Up to 1 |
|
Over 1 month |
|
Over 3 month |
|
Over 1 year |
|
Over 3 year |
|
Over 5 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accounts and other demand deposits |
|
5,927,692 |
|
|
|
|
|
|
|
|
|
|
|
5,927,692 |
|
Transactions in the course of payment |
|
314,489 |
|
|
|
|
|
|
|
|
|
|
|
314,489 |
|
Cash collateral on securities lent and repurchase agreements |
|
218,156 |
|
5,217 |
|
36 |
|
|
|
|
|
|
|
223,409 |
|
Savings accounts and time deposits(***) |
|
5,132,138 |
|
2,057,195 |
|
2,679,039 |
|
285,621 |
|
126 |
|
30 |
|
10,154,149 |
|
Derivative instruments |
|
31,600 |
|
23,040 |
|
94,046 |
|
70,714 |
|
56,198 |
|
99,430 |
|
375,028 |
|
Borrowings from financial institutions |
|
57,955 |
|
78,821 |
|
583,960 |
|
155,511 |
|
|
|
|
|
876,247 |
|
Debt issued: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage bonds |
|
4,786 |
|
5,381 |
|
13,911 |
|
28,448 |
|
17,250 |
|
23,146 |
|
92,922 |
|
Bonds |
|
185,229 |
|
92,383 |
|
183,984 |
|
411,085 |
|
703,674 |
|
1,638,686 |
|
3,215,041 |
|
Subordinate bonds |
|
9,759 |
|
13,310 |
|
16,194 |
|
158,774 |
|
48,768 |
|
502,117 |
|
748,922 |
|
Other financial obligations |
|
122,931 |
|
1,874 |
|
3,970 |
|
9,354 |
|
7,112 |
|
29,726 |
|
174,967 |
|
Total liabilities |
|
12,004,735 |
|
2,277,221 |
|
3,575,140 |
|
1,119,507 |
|
833,128 |
|
2,293,135 |
|
22,102,866 |
|
|
|
As of December 31, 2012 |
| ||||||||||||
|
|
Up to 1 |
|
Over 1 month |
|
Over 3 month |
|
Over 1 year |
|
Over 3 year |
|
Over 5 |
|
Total |
|
|
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
MCh$ |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accounts and other demand deposits |
|
5,470,971 |
|
|
|
|
|
|
|
|
|
|
|
5,470,971 |
|
Transactions in the course of payment |
|
159,218 |
|
|
|
|
|
|
|
|
|
|
|
159,218 |
|
Cash collateral on securities lent and repurchase agreements |
|
224,793 |
|
1,603 |
|
|
|
|
|
|
|
|
|
226,396 |
|
Savings accounts and time deposits(***) |
|
3,832,538 |
|
2,356,386 |
|
2,846,609 |
|
397,643 |
|
279 |
|
30 |
|
9,433,485 |
|
Derivative instruments |
|
27,981 |
|
30,469 |
|
60,284 |
|
116,048 |
|
48,616 |
|
96,924 |
|
380,322 |
|
Borrowings from financial institutions |
|
181,972 |
|
153,702 |
|
631,051 |
|
141,956 |
|
|
|
|
|
1,108,681 |
|
Debt issued: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage bonds |
|
5,351 |
|
5,853 |
|
15,859 |
|
35,502 |
|
21,843 |
|
30,788 |
|
115,196 |
|
Bonds |
|
47,119 |
|
133,570 |
|
56,633 |
|
456,334 |
|
358,097 |
|
1,360,480 |
|
2,412,233 |
|
Subordinate bonds |
|
1,164 |
|
2,276 |
|
34,731 |
|
48,378 |
|
151,612 |
|
508,343 |
|
746,504 |
|
Other financial obligations |
|
106,972 |
|
1,005 |
|
5,140 |
|
10,534 |
|
7,201 |
|
31,271 |
|
162,123 |
|
Total liabilities |
|
10,058,079 |
|
2,684,864 |
|
3,650,307 |
|
1,206,395 |
|
587,648 |
|
2,027,836 |
|
20,215,129 |
|
(***) Excluding term saving accounts, which amount to MCh$178,741 (MCh$179,465 as of December 31, 2012).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
On October 17, 2013 Banco de Chile informed that the Board of Directors of Latibex (Consejo de Administración de Bolsas y Mercados Españoles Sistemas de Negociación, S.A.), within its authority pursuant to the Regulations of the Mercado de Valores Latinoamericanos (Latibex), and based on Banco de Chiles request, has resolved to exclude the negotiation of Banco de Chile issued shares from the Mercado de Valores Latinoamericanos (Latibex), effective October 18, 2013.
All the supporting documentation filled by Banco de Chile is publicly available at the website of Latibex (www.latibex.com) and on our website (www.bancochile.cl).
In Managements opinion, there are no other significant subsequent events that affect or could affect the Interim Condensed Consolidated Financial Statements of the Bank and its subsidiaries between September 30, 2013 and the date of issuance of these Interim Condensed Consolidated Financial Statements.
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Héctor Hernández G. |
|
Arturo Tagle Q. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: October 29, 2013 |
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| |
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Banco de Chile |
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/S/ Arturo Tagle Q. |
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By: |
Arturo Tagle Q. |
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CEO |