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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
For the transition period from to
Commission file number 001-15266
| Banco de Chile |
| (Exact name of Registrant as specified in its charter) |
| Bank of Chile |
| (Translation of Registrant’s name into English) |
| Republic of Chile |
| (Jurisdiction of incorporation or organization) |
| Banco de Chile |
| Paseo Ahumada 251 |
| Santiago, Chile |
| (Address of principal executive offices) |
| Rolando Arias Sánchez (rarias@bancochile.cl) (562)-2653-3535 Paseo Ahumada 251 Santiago, Chile |
| (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) |
Securities registered or to be registered pursuant to Section 12(b) of the Act.
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| American Depositary Shares, each representing 200 shares of common stock, without nominal (par) value (“ADSs”) | BCH | New York Stock Exchange | ||
| Shares of common stock, without nominal (par) value | New York Stock Exchange (for listing purposes only) |
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
(Title of Class)
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
Shares of common stock: 101,017,081,114
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No
Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large, accelerated filer ☒ | Accelerated filer ☐ | Non-accelerated filer ☐ | Emerging growth company ☐ |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
| † | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
| U.S. GAAP ☐ | International
Financial Reporting Standards as issued by the International Accounting Standards Board ☒ | Other ☐ |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No
TABLE OF CONTENTS
SUMMARY OF RISK FACTORS
An investment in our American Depositary Shares (“ADSs”) is subject to a number of risks, including risks relating to the nature of our business as a financial institution in Chile. The following list summarizes some, but not all, of these risks. Please read the information in the section entitled “Risk Factors” for a more thorough description of these and other risks.
Risks Relating to our Operations and the Chilean Banking Industry
| ● | The growth of our loan portfolio in riskier segments may expose us to increased loan losses. |
| ● | Our loan portfolio may not continue to grow at the same or similar rates as it has in the past. |
| ● | Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations. |
| ● | Enhanced ESG and climate change disclosure may impose additional costs on our bank. |
| ● | Modifications to reserve requirements may affect our growth capacity and margins. |
| ● | Changes in accounting standards could impact our results. |
| ● | Increased competition and industry consolidation may adversely affect our operations. |
| ● | Our exposure to certain segments of the retail market could lead to higher levels of total past-due loans and subsequent charge-offs. |
| ● | Our results of operations are affected by interest rate volatility and inflation. |
| ● | Our loan portfolio is subject to prepayment risk, which could have an adverse effect on our results of operations. |
| ● | Part of the information included in our financial statements considers assumptions, estimates and modeling which, if inaccurate, could have a material impact on our results of operations and financial position. |
| ● | Market turmoil could result in negative adjustments to the fair value of our financial assets, which could translate into a material effect on our results or financial condition. |
| ● | Operational problems, errors, criminal events or terrorism or other events relating to force majeure may have a material adverse impact on our business, financial condition, and results of operations. |
| ● | The use of AI, machine learning and data-driven models and adoption of new technologies may increase our exposure to operational, regulatory, legal, reputational, and financial risks, which could adversely affect our business, results of operations, and financial condition. |
| ● | Cybersecurity events could negatively affect our reputation or results of operations and may result in litigation. |
| ● | As a financial institution, we are subject to reputational risk that could materially affect our results of operations or financial condition. |
| ● | Despite our policies and procedures to detect or prevent money laundering and other financial crime activities, we may not be able to fully detect them or on a timely basis. |
Risks Relating to Chile
| ● | Our growth and profitability depend on the level of economic activity in Chile. |
| ● | Any downgrade in Chile’s or our credit rating could increase our cost of funding, affecting our interest margins, results of operations and profitability. |
| ● | Changes in tax law could adversely affect our net income and could also result in higher taxes on distributions to our foreign shareholders. |
| ● | Climate change presents various financial and non-financial risks to us and our customers that are not directly observable and, therefore, are difficult to mitigate in advance. |
| ● | Currency fluctuations could adversely affect our results of operations, the value of our ADSs and any distributions on the ADSs. |
| ● | Chile has corporate disclosure standards different from those you may be familiar with in the United States. |
| ● | Our exemption as a “foreign private issuer” from certain rules under the U.S. securities laws results in less information about us being available to investors than for U.S. companies. |
| ● | Chilean law may provide shareholders with fewer and less well-defined rights. |
| ● | Our business growth, asset quality and profitability may be affected by political, legal and economic uncertainty, as well as social developments in Chile. |
| ● | Reforms to labor laws, the pension system and the healthcare system as well as labor strikes or slowdowns could adversely affect our results of operations. |
| ● | Pandemics, epidemics and other health events will affect both the global and the Chilean economy, our business or results of operations and could affect our financial condition. |
Risks Relating to our American Depositary Shares (“ADSs”)
| ● | Our principal shareholders may have interests that differ from those of our other shareholders and their significant share ownership may have an adverse effect on the future market price of our ADSs and shares. |
| ● | There may be a lack of liquidity and a limited market for our shares and ADSs. |
| ● | ADS holders may be unable to exercise voting rights at shareholders’ meetings and preemptive rights. |
| ● | Developments in international financial markets may adversely affect the market price of the ADSs and shares. |
| ● | In the past, Chile has imposed controls on foreign investment and repatriation of investments that affected investments in, and earnings from, our ADSs. |
FORWARD-LOOKING STATEMENTS
This annual report on Form 20-F contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although we have based these forward-looking statements on our expectations and projections about future events, it is possible that actual results may differ materially from our expectations. In many cases, we include a discussion of the factors that are most likely to cause forward-looking statements to differ from actual results together with the forward-looking statements themselves. These statements appear throughout this annual report, including, without limitation, under “Item 4. Information on the Company” and “Item 5. Operating and Financial Review and Prospects.” Examples of such forward-looking statements include:
| ● | projections of operating revenues, net income (loss), net income (loss) per share, capital expenditures, dividends, capital structure or other financial items or ratios; |
| ● | statements of our plans, objectives or goals, including those related to anticipated trends, competition and regulation; |
| ● | statements about market risks, including interest rate risk and foreign exchange risk; |
| ● | statements about our future economic performance or that of Chile or other countries in which we operate; and |
| ● | statements of assumptions underlying such statements. |
Words such as “believe,” “anticipate,” “plan,” “aims,” “seeks,” “expect,” “intend,” “target,” “objective,” “estimate,” “project,” “potential,” “predict,” “forecast,” “guideline,” “could,” “may,” “will,” “should” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. These statements may relate to (i) our asset growth and financing plans, (ii) trends affecting our financial condition or results of operations and (iii) the impact of competition and regulations but are not limited to such topics. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those described in such forward-looking statements included in this annual report as a result of various factors (including, without limitation, the actions of competitors, future global economic conditions, market conditions, foreign exchange rates and operating and financial risks), many of which are beyond our control. The occurrence of any such factors not currently expected by us could significantly alter the results set forth in these statements.
Factors that could cause actual results to differ materially and adversely include, but are not limited to:
| ● | changes in general economic, business, political or other conditions in Chile, or changes in general economic or business conditions in Latin America, the United States, Europe, Asia or the Middle East; |
| ● | the continuation, escalation or eruption of geopolitical conflicts in eastern Europe, the Middle East, or other areas of the world, including the ongoing conflicts involving Russia, Ukraine, Israel, Hamas, Iran, Cuba and Venezuela; |
| ● | changes in capital markets in general that may affect policies or attitudes towards lending to Chile or Chilean companies; |
| ● | increased costs; |
| ● | increased competition and changes in competition or pricing environments, including the effect of new technological developments; |
| ● | unanticipated increases in financing and other costs or the inability to obtain additional debt or equity financing on attractive terms; |
| ● | natural disasters, epidemics or pandemics; |
| ● | the effect of tax laws on our business; and |
| ● | the factors discussed under “Item 3. Key Information—Risk Factors.” |
You should not place undue reliance on forward-looking statements, which speak only as of the date that they were made. This cautionary statement should be considered in connection with any written or oral forward-looking statements that we may issue in the future. We do not undertake any obligation to publicly release any revisions to such forward-looking statements after the filing of this annual report to reflect later events or circumstances or to reflect the occurrence of unanticipated events.
PRESENTATION OF FINANCIAL INFORMATION
We prepare our audited consolidated financial statements in Chilean pesos and in accordance with International Financial Reporting Standards (“IFRS”) Accounting Standards as issued by the International Accounting Standards Board (“IASB”).
Unless otherwise indicated, the financial information included in this annual report with respect to 2023, 2024 and 2025 has been derived from financial statements that have been prepared in accordance with IFRS Accounting Standards. See Note 2(a) to our audited consolidated financial statements as of and for the year ended December 31, 2025, included elsewhere in this annual report. IFRS Accounting Standards differs in certain significant respects from Chilean Generally Accepted Accounting Principles (the “Chilean GAAP”) as issued by the Comisión para el Mercado Financiero (“Financial Market Commission” or “CMF”). As a result, our financial information presented under IFRS Accounting Standards is not directly comparable to any of our financial information presented under Chilean GAAP, and readers should avoid such comparison. Readers should also note that information in this document associated with our business segments and for the calculation and compliance with local regulatory requirements is based on Chilean GAAP.
In this annual report, references to “$,” “U.S.$,” “U.S. dollars” and “dollars” are to United States dollars, references to “pesos” or “Ch$” are to Chilean pesos (see Note 2(f) to our audited consolidated financial statements as of and for the year ended December 31, 2025, included elsewhere in this annual report), and references to “UF” are to “Unidades de Fomento.” The UF is an inflation indexed Chilean monetary unit of account with a value in Chilean pesos that is linked to and adjusted daily to reflect changes in the Consumer Price Index (“CPI”) of the Instituto Nacional de Estadísticas (the “Chilean National Statistics Institute”). As of December 31, 2025, one UF equaled Ch$39,727.96.
This annual report contains translations of certain Chilean peso amounts into U.S. dollars at specified rates. These translations should not be construed as representations that the Chilean peso amounts actually represent such U.S. dollar amounts, were converted from U.S. dollars at the rate indicated in our audited consolidated financial statements as of and for the year ended December 31, 2025, or could be converted into U.S. dollars at the rate indicated. Banco de Chile utilizes the exchange rate of accounting representation, or spot exchange rate, for such matters. Thus, unless otherwise indicated, the U.S. dollar amounts have been translated from Chilean pesos based on the exchange rate of accounting representation as of December 30, 2025 (last trading date), as determined by our Treasury on a daily basis, based on the average of the daily closing bid and offer rates reported by Bloomberg for the Santiago Stock Exchange. As of December 31, 2025, the exchange rate of accounting representation was Ch$900.40 = U.S.$1.00, and the observed exchange rate, as published by Banco Central de Chile (the “Central Bank”), was Ch$911.18 = U.S.$1.00.
Unless otherwise specified, all references in this annual report to total loans are to loans to customers before deducting allowances for loan losses, and they do not include loans to banks or contingent loans. Also, in this annual report, “past-due loans” are any loans for which the counterparty has failed to make a payment when contractually due, including installments that are overdue, plus the remaining balance of principal and interest on such loans. In order to distinguish between different overdue time periods, the corresponding time period is included after the term “Past-due Loans” (for example, “Past-due Loans—90 days or more”). For more information, please see “Item 4. Information on the Company—Selected Statistical Information—Analysis of Substandard and Past-Due Loans.”
According to Chilean regulations and as defined by the CMF for local regulatory purposes, as of the filing date and for the purposes of this annual report, total regulatory capital (“Total Regulatory Capital”) consists of:
| ● | CET1 Capital (“CET1”), which is composed of: (i) paid-in capital related to common shares, (ii) stock surplus (share premium) resulting from the issuance of instruments included in CET1, (iii) reserves, whether they come from net income, depreciation or expiration of perpetual bonds or not, (iv) accumulated other comprehensive income related to financial instruments measured at fair-value, (v) retained earnings or losses, net of provisions for minimum dividends, appreciation of perpetual bonds or interests/dividends paid on financial instruments issued for capital adequacy purposes and (vi) minority interest. The CET1, however, is subject to a set of adjustments that include: (i) minority interest, (ii) goodwill and intangible assets, (iii) deferred tax assets (not related to temporary differences), (iv) accumulated other comprehensive income related to cash flow hedge accounting derivatives, (v) insufficiency of credit risk allowances when using internal methodologies for risk weighted assets, (vi) earnings from the sale of securitized assets, (vii) accumulated gains or losses from changes in own issuer risk related to financial liabilities measured at fair value (such as debit value adjustment for derivatives), (viii) assets related to pension plans for staff, (ix) investments in own assets, (x) significant and not significant investments and (xi) threshold adjustments in line with Basel III. CET1, for compliance with minimum levels, must be equal to at least 4.5% of risk-weighted assets; |
| ● | Additional Tier 1 Capital (“AT1”), which is comprised of perpetual bonds and preferred stocks that, for compliance with minimum levels, must be equal to at least 1.5% of risk-weighted assets, once the CET1 minimum requirements have been fulfilled. Instruments issued by banks’ subsidiaries do not get counted for these purposes; and |
| ● | Tier 2 Capital (“Tier 2”), which is composed of (i) subordinated bonds of up to 50% of CET1, excluding subordinated bonds issued by banks’ subsidiaries and (ii) voluntary provisions of up to 1.25% of credit risk-weighted assets if computed by standardized method or 0.625% if computed by internal method. Tier 2 capital may be computed, for compliance with minimum levels, with up to 2.0% of risk-weighted assets, once Tier 1 Capital minimum requirements have been fulfilled. |
These definitions for Total Regulatory Capital took effect on December 1, 2021. For more information, see “Item 4. Information on the Company—Regulation and Supervision—Modifications to the General Banking Act.”
EFFECT OF ROUNDING
Certain figures included in this annual report and in our audited consolidated financial statements as of and for the year ended December 31, 2025, have been rounded for ease of presentation. Percentage figures included in this annual report have not in all cases been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this annual report may vary slightly from those obtained by performing the same calculations using the figures in our audited consolidated financial statements as of and for the year ended December 31, 2025. Certain other amounts that appear in this annual report may similarly not sum due to rounding.
MACRO-ECONOMIC AND MARKET DATA
In this annual report, most of the macro-economic data relating to the Chilean economy is based on information published by the Central Bank, except for (i) inflation statistics that are based on data published by the Chilean National Institute of Statistics, and (ii) certain other information based on data published by other sources as stated herein.
In addition, most of the market share data, financial indicators and other data relating to the Chilean banking system as compared to Banco de Chile’s financial information presented in this annual report are based on information published periodically by the CMF, which is published under Chilean GAAP and prepared on a consolidated basis, unless otherwise indicated. For more information see “Item 4. Information on the Company—Business Overview—Competition.” Information regarding the mutual funds industry is based on statistics published by the National Association of Mutual Funds.
MANAGEMENT INFORMATION SYSTEM
Banco de Chile records information associated with the normal course of the business in order to measure performance and carry out business analysis, among other activities. This information includes the number and the financial amount of transactions executed through diverse commercial platforms by the Bank or its customers or counterparties. All this information is referred to as the Bank’s “Management Information System” throughout the document.
PART I
Item 1 Identity of Directors, Senior Management and Advisers
Not Applicable.
Item 2 Offer Statistics and Expected Timetable
Not Applicable.
Item 3 Key Information
RISK FACTORS
The risks and uncertainties described below are not the only ones that we face. Additional risks and uncertainties that we do not know about or that we currently think are immaterial may also impair our business operations in the future. Any of the following risks, if they occur, could materially and adversely affect our business, results of operations, prospects and financial condition.
We are also subject to market risks that are presented both in this subsection and in Note 44 to our audited consolidated financial statements as of and for the year ended December 31, 2025, included elsewhere in this annual report.
Risks Relating to our Operations and the Chilean Banking Industry
The growth of our loan portfolio in riskier segments may expose us to increased loan losses.
During the last five years, our total loan portfolio has grown at a compounded average growth rate (“CAGR”) of 4.9% per year in nominal terms. This expansion has been composed of CAGR of 8.2% in residential mortgage loans, 7.9% in consumer loans, and 2.1% in commercial loans, all in nominal terms. Over this period, nominal average growth in residential mortgage loans has clearly decoupled from macroeconomic fundamentals, being driven by a steadily growing housing demand linked to demographic trends in Chile, yet at a slower pace than prior to 2020, due to the combined impact of higher long-term interest rates and a local inflation rate that remained above the two-year target inflation range set by the Chilean Central Bank for most of the period. In consumer lending, this portfolio began to show positive growth once the liquidity surplus generated by financial support deployed by the Chilean government and Congress during the COVID-19 pandemic began to decrease in 2021, coupled with our efforts to improve value offerings for targeted segments. As such, demand for consumer loans reactivated in 2022, resulting in a 17.6% expansion in our consumer loans compared to 2021. However, in 2023, 2024 and 2025 our consumer loans slowed by growing 6.3%, 4.6%, and 3.9%, respectively, on an annual basis. These trends in consumer loans resulted from the combination of a deceleration in installment loans and increased year-end balances of credit card-related loans. Overall, the slowdown in consumer loans has been linked to changes in the economy, characterized by moderate GDP growth, higher-than-normal interest rates, and an unemployment rate above medium-term figures, together with a customer base that appears to be less willing to borrow under the prevailing economic and financial environment.
On the other hand, the nominal average expansion in commercial loans has steadily decelerated over the last five years, particularly due to weakened demand from the wholesale banking segment, as a result of political and economic uncertainty in Chile caused by: (i) two failed attempts to change the constitution, (ii) the government’s intention to introduce deep reforms in key economic sectors, (iii) lengthy approval processes for large-scale investment projects, and (iv) a decrease in the economy’s potential growth. These drivers have also adversely affected commercial loans to small and medium-sized enterprises (“SMEs”). Although successive state-guaranteed loan programs partially mitigated the impact on loans granted to SMEs, such loans slowed significantly between 2022 and 2024, resulting in a nominal annual expansion of 2.6% in 2024. Loans to SMEs showed a slight recovery over the past year, increasing in line with inflation in 2025, compared to the previous year. More importantly, core borrowing by SMEs grew well above inflation in 2025, after adjusting for the scheduled amortization of state-guaranteed loans granted in prior years.
For the year ended December 31, 2025, our loan portfolio was Ch$39,254,314 million, which represented a 0.8% annual increase compared to the Ch$38,936,296 million we recorded as of December 31, 2024. In turn, our allowances for expected credit losses increased 2.7% on an annual basis from Ch$693,434 million in 2024 to Ch$712,003 million in 2025. This increase in allowances for expected credit losses is in line with the increase in delinquency, which has remained above historical average levels for longer than expected. It also reflects macroeconomic environment that, according to market estimates, would improve marginally over the next twelve months. These factors have a direct effect on forward-looking provisioning models. The increase in delinquency has affected the entire banking industry. In the wholesale banking segment, certain industries continued to experience financial difficulties associated with specific business dynamics, such as the real estate and construction sector that showed improvements by the end of 2025, while other industries continued to be affected by subdued business activity. Likewise, in the retail banking segment, unemployment rates have remained above levels seen before 2022 yet borrowing costs and the inflation rate have gradually converged to neutral levels. However, the effect of cumulative inflation on durable and non-durable goods has continued to negatively impact disposable income of individual customers. All these factors contributed to the increase in allowances for expected credit losses that, in turn, resulted in a slight increase in our risk-index ratio (allowances for expected credit losses to total loans) from 1.78% in 2024 to 1.81% in 2025.
We recognize that the expansion experienced by our retail banking segment over the last years may expose us to higher levels of charge-offs and may require us to establish higher levels of allowances for loan losses in the future. This is because the average retail customer is riskier than wholesale banking counterparties, as they are more exposed to the economic cycle than wholesale customers, as evidenced during prior economic and financial crises. For example, individuals are impacted by economic factors such as unemployment, and SMEs are impacted by economic conditions affecting domestic demand. For this reason, we are constantly striving to develop and utilize improved scoring and approval models, while strengthening our collection procedures in order to mitigate the risks associated with this business growth.
Our loan portfolio may not continue to grow at the same or similar rates as it has in the past.
Our results of operations depend on our ability to grow our loan portfolio in a credit-sustainable way. Over the past decade, loan growth has been highly influenced by increased volatility in the Chilean economy and diverse reforms on general matters, including both banking and non-banking rules. Since the banking business is highly correlated with the economic cycle, the evolution of both the Chilean and global economy impacts the growth of the local industry’s loan portfolio and ours.
In 2023, lending activity decelerated, as demonstrated by nominal annual growth of only 3.2% in the industry’s loan portfolio, compared to a rate of 10.1% in 2022 (a significant rebound from its contraction due to the pandemic). This nominal annual growth of 3.2% which translated into a 1.5% real contraction, was well aligned with the slowdown evidenced by the Chilean economy, which recorded GDP growth of 0.7%. The real contraction in the industry’s loan book was the result of: (i) a 3.7% real contraction in commercial loans, primarily explained by a modest 0.3% annual expansion in private investment, in turn driven by uncertainties associated with two consecutive constitutional processes carried out in 2022 and 2023, reforms sponsored by the government aimed at introducing material changes to crucial economic areas, and lengthy approval processes for large-scale investment projects, and (ii) a real annual decline of 2.3% in consumer loans, primarily associated with (a) the 4.7% decrease in household consumption due to a longer-than-expected contractionary monetary policy that resulted in a reference interest rate of 11.25% until July 2023 and translated into increased borrowing costs, and (b) the adverse impact of economic slowdown on the labor market, leading to an increase in the average unemployment rate from 7.9% in 2022 to 8.7% in 2023. These trends were offset by a 2.4% real expansion in the industry’s residential mortgage loan portfolio, which has continued to grow steadily, though at a slower pace than in the past, given the prevailing scenario of long-term term interest rates that continue to be above the levels seen in the past decade. Within this scenario, our loan portfolio grew 2.5% in 2023 in nominal terms, which means a 2.2% annual contraction when adjusting for inflation. This slowdown was primarily attributable to a nominal annual decrease of 1.4% in commercial loans, or a 5.9% contraction in real terms, mainly concentrated in lower demand from the wholesale banking segment and moderate growth among SMEs, due to the factors mentioned above. In personal banking, instead, our residential mortgage loans grew 7.8% and our consumer loans increased 6.3%, both in nominal terms, evidencing slight real growth when adjusted by inflation. Whereas residential mortgage loans continued to be decoupled from the overall economic environment due to the dynamics in the housing market, the increase in consumer loans was principally driven by higher growth in credit card-related loans, due to both lower liquidity among individuals and enhanced commercial strategies implemented throughout the year to promote credit card use among targeted segments.
During 2024, the industry’s loan book grew 4.0% in nominal terms, which denotes a real annual contraction of 0.4%, once adjusted for inflation. This figure reflects the impact of subdued economic activity, with GDP growth of 2.8% in 2024, characterized by reduced private investment and moderate household consumption. The evolution of the industry’s loan portfolio was primarily driven by commercial loans, which recorded a real annual contraction of 1.9% (2.4% nominal growth), as a result of: (i) an annual decrease of 1.6% in private investment, amid weak business sentiment regarding the uncertain economic and political outlook; and (ii) credit-granting conditions that remained tight during the year, particularly for some industries, such as real estate, construction, and health services. This was partially offset by real annual expansions of 1.7% in residential mortgage loans (6.2% nominal growth) and 0.2% in consumer loans (4.6% nominal growth). In this context, our loan portfolio grew 3.4% in nominal terms, representing a 1.0% real contraction. The behavior of our loan book in 2024 was caused by a real annual contraction of 3.7% in commercial loans (0.6% nominal growth), primarily associated with decelerated lending activity in the wholesale banking segment. This was partially offset by higher dynamism in the SME subsegment, which managed to overcome the scheduled amortization of state-guaranteed loans (“FOGAPE”) granted in previous years. Personal banking continued to be the main source of growth for us in 2024, based on residential mortgage loans and consumer loans that grew 2.9% and 0.2% in real terms (nominal growth of 4.6% and 7.5%), respectively.
During 2025, lending activity continued to lack dynamism, translating into a 2.6% nominal annual expansion in total loans, or a 0.8% real annual contraction once adjusted for inflation, compared to the loan book recorded as of December 31, 2024. Although the local economy showed some signs of improvement by the end of 2025 —such as higher-than-expected growth in gross fixed capital formation of 7.0% as of December 31, 2025— overall economic activity remained subdued, with annual GDP growth of 2.5% as of the same date, partly due to modest private consumption. In this environment, the industry’s loan book was marked by commercial loans that remained flat in nominal terms, denoting a 3.3% real annual contraction when adjusting for inflation. Despite the rebound in private investment, demand for loans among companies remained weak throughout the year, particularly in the wholesale banking segment, which would have been caused by: (i) private investment primarily focused on large-scale projects in mining and energy, while construction and other categories lagged; (ii) financing initiatives by some corporations and large companies that resulted in the issuance of medium- and long-term debt in local and international capital markets to fund projects abroad; and (iii) lending conditions that remained strict, at least during the first half of the year, for certain industries such as real estate and construction.
On the other hand, lending products associated with personal banking managed to grow positively in nominal terms. In 2025, industry residential mortgage loans increased 1.5% and consumer loans grew 3.2% in real terms (nominal growth of 5.0% and 6.8%, respectively). Along with the impact of recent demographic changes in Chile on housing demand, growth in residential mortgage loans during 2025 was also driven by a special state-guaranteed program launched by the government to help middle-income families to access bank financing by guaranteeing borrowers’ obligations to banks and by subsidizing part of the interest rate paid by customers on such loans. These initiatives resulted in stronger demand, particularly by the end of the year. Regarding consumer loans, lending growth was the consequence of a combination of factors, including: (i) an improvement in private consumption that increased 2.7% in 2025 in comparison with the 1.1% expansion observed in 2024; (ii) lower borrowing costs, particularly for revolving loans, as the average monetary policy rate decreased from 6.2% in 2024 to 4.9% in 2025; and (iii) lower inflation for tradable goods, which benefited individuals’ disposable income.
Amid these trends, our loan portfolio recorded a 2.5% real annual contraction (0.8% nominal growth) as of December 31, 2025, compared to December 31, 2024. The pattern adopted by our commercial loans, which recorded a real annual decrease of 6.2% (3.0% nominal contraction), marked the evolution of our loan book in 2025, particularly towards the end of the year. Along with the drivers affecting commercial loans across the industry, we also faced the early repayment of certain trade finance loans—partly related to funding raised by companies in the capital markets—and the maturity of other credits that were not rolled over by certain corporate customers. This factor was partly offset by a recovery in core lending to SMEs. Whereas SME loans grew 3.3% in 2025 in nominal terms, this was primarily fostered by the expansion of other-than-FOGAPE loans granted to these customers. On the other hand, loans to personal banking continued to grow in nominal terms, as evidenced by residential mortgage loans that increased 1.8% in real terms (5.3% nominal growth) for the reasons noted above and our ability to tailor value offerings for our higher-income customer base. Furthermore, our portfolio of consumer loans increased 0.4% in real terms (3.9% nominal growth), fostered by positive real growth in both credit card-related loans and installment loans, as a consequence of our commercial strategies, risk origination protocols, and loyalty programs aimed at targeted segments.
Going forward, several factors could adversely affect the growth rate of the industry and, therefore, the expansion of our loan portfolio. This includes, but is not limited to: (i) a slowdown or negative GDP growth in the Chilean economy, (ii) deceleration or contraction in household consumption or private investment, (iii) changes in banking customers’ payment behavior, (iv) changes in banking regulation, (v) deterioration of consumer confidence and business sentiment as a consequence of increased uncertainty regarding economic activity or the social and political environment, (vi) economic reforms to be introduced by the current administration, including the pension, tax, and healthcare systems, among others, (vii) increasing barriers to, or failure to streamline, approval processes for high-impact investment projects, (viii) any new attempt to change core constitutional principles, and (ix) any effects related to social trends, social unrest, pandemics or other events affecting the growth potential of the Chilean economy. Similarly, these factors could affect our credit quality indicators causing us to establish higher allowances for loan losses.
For more information, see “Item 4. Information on the Company—Regulation and Supervision” and “Item 4. Information on the Company—Selected Statistical Information.”
Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations.
The CMF is the entity that oversees and regulates the Chilean financial market, which is comprised of publicly traded companies, insurance companies, insurance brokers, mutual funds, fintech companies and investment funds as well as the Chilean banking industry as a whole and some non-bank lenders. In addition to being subject to regulation by the CMF, in certain matters, we are also subject to regulations issued by the Central Bank. See “Item 4. Information on the Company—Regulation and Supervision.”
Pursuant to the Ley General de Bancos (the “General Banking Act”) all Chilean banks may, subject to the approval of the CMF, engage in certain non-banking businesses approved by the law. The CMF’s approval will depend on the risk of the activity and the strength of the bank. Furthermore, the General Banking Act currently imposes on the Chilean banking system the Basel III capital adequacy guidelines issued by the Basel Committee on Banking Regulation and Supervisory Practices (the “Basel Committee”) and limits the discretion of the CMF to deny new banking licenses.
Capital Requirements and Basel III Implementation
On January 12, 2019, Law No. 21,130 was enacted, addressing four main topics with the aim of modernizing the Chilean banking framework by: (i) adopting the Basel III guidelines, considering a phased-in transition, (ii) introducing changes to the local regulator’s corporate governance by transferring powers formerly vested in the Superintendencia de Bancos e Instituciones Financieras de Chile (the “Superintendency of Banks and Financial Institutions” or “SBIF”) (the former banking supervisor) to the CMF in June 2019, (iii) reforming the resolution regime for Chilean banks in the case of insolvency, and (iv) introducing changes in relation to confidential information of banks’ customers, among other topics. For more information, see “Item 4. Information on the Company—Regulation and Supervision— Modifications to the General Banking Act.”
Regarding capital requirements, since December 1, 2021, new regulatory thresholds have been imposed on local banks, based on the specific regulations issued by the CMF, as follows: (i) CET1 ≥ 4.5% of risk-weighted assets (CET1 ratio); (ii) CET1 ≥ 3.0% of total risk assets (Leverage ratio); (iii) Tier 1 = CET1 + AT1 ≥ 6.0% of risk-weighted assets (Tier 1 ratio); (iv) Tier 1 + Tier 2 ≥ 8.0% of risk-weighted assets (Total Regulatory Capital ratio); (v) Conservation Buffer = 2.5% of risk-weighted assets; (vi) Countercyclical Buffer of up to 2.5% of risk-weighted assets, if any; (vii) Domestic Systemically-Important Banks (“D-SIB”) Buffer (“systemic buffer”) in the range of 1.0% to 3.5% of risk-weighted assets, if any; and (viii) Pillar 2 Buffer of up to 4.0% of risk-weighted assets, if any. As of the date of this annual report, all the main capital requirements and methodological adjustments associated with Basel III implementation were fully in place, except for specific Pillar 2 capital charges imposed by the CMF to certain local banks, for which the regulator sets particular phase-in periods.
On March 31, 2021, the CMF announced there were six D-SIB in Chile, including us, which would be subject to systemic capital charges to be determined by means of the CMF’s D-SIB methodology. On March 30, 2022, the CMF announced the systemic capital charges for the six previously-determined D-SIB, including a systemic capital charge equivalent to 1.25% of risk-weighted assets assigned to us, which was set to be gradually introduced over a four-year period starting December 1, 2022, at an annual and cumulative rate of 25% per year. The 1.25% systemic capital charge assigned to us was successively reaffirmed by the CMF on March 31, 2023, April 1, 2024, and April 1, 2025, which became fully in place on December 1, 2025. On March 30, 2026, the CMF announced systemic capital charges for local D-SIB and confirmed the 1.25% systemic capital requirement for us while maintaining the designation of D-SIB on six local banks, including us.
On May 23, 2023, the Chilean Central Bank activated a countercyclical buffer for the local banking system amounting to 0.5% of the banks’ risk-weighted assets, starting May 2024. In November 2024, the Central Bank maintained the countercyclical buffer unchanged while noting that it could converge to a neutral level of 1.0% in the medium term, which is expected to be determined by the Central Bank’s Board in May 2026. This guidance was reaffirmed by the Central Bank in November 2025. If increased, the new capital buffer is expected to become effective one year after its definition.
On January 13, 2023, we received communication from CMF stating that, based on the overhaul of our Internal Capital Adequacy Assessment Process (“ICAAP”) for the year ended December 31, 2022, as defined by RAN 21-13, a Pillar 2 capital requirement equivalent to 0.5% of our risk-weighted assets was assigned to us, to be completed in a four-year period starting June 30, 2024, at an annual rate of 25% per year. On January 16, 2025, the CMF informed us that the Pillar 2 capital requirement assigned to us was revised to 0.13% of the risk-weighted assets, net of required provisions, which we fulfilled since June 2024. On January 16, 2026, the CMF announced Pillar 2 capital charges for the local banks and removed the Pillar 2 capital requirement previously assigned to us, effective from such date.
On July 8, 2025, the CMF published the final set of amendments to Chapter 21-13 of the RAN, which among other topics introduced changes to the regulatory methodology for the measurement of the interest rate risk in the banking book (“IRRBB”) and new criteria for determining both outlier banks and potential capital requirements given banks’ IRRBB exposure in the short-term (∆NII metric) or the long-term (∆EVE metric). Depending on compliance with regulatory IRRBB thresholds, these new criteria could lead to additional minimum Pillar 2 capital charges and/or internal capital buffers as part of the ICAAP carried out by each bank on an annual basis. Although these amendments resulted in a decrease of our ∆EVE metric and an increase in our ∆NII metric, no additional Pillar 2 requirements have been imposed on us as of the date of this annual report on the basis of these amendments. However, we cannot assure you that further capital requirements will not be imposed in the future, which could translate into lower profitability if we are unable to cover such requirements with our current capital buffers.
On March 5, 2026, the CMF published a set of adjustments to Chapter 21-7 of the RAN for public comment. This proposal aims to modify the calculation of market risk weighted assets associated with the trading book by: (i) reducing the “vertical adjustment” parameter from 10% to 7%, which weighs notional amounts of financial instruments in order to determine the general interest rate risk, and (ii) easing the criteria used to determine the possibility of netting between similar positions held through derivatives rather than considering perfect match (identical positions) of maturity dates or interest rates. Although, as of the date of this annual report, the final rules have not been published yet, if enacted, these amendments would be expected to result in a decrease of approximately 20% on market risk-weighted assets and an improvement in capital adequacy ratios by approximately 10 to 15 basis points. Based on the schedule proposed by the CMF, these changes are expected to become effective in July 2026.
Although based on the current capital requirements assigned to us and to the banking system as a whole we continue to be in full compliance with the minimum requirements, we cannot be certain about any further potential capital requirements the regulator could impose on us in the future and, therefore, we cannot assure you that our profitability will not be impacted by actions we may take in order to fulfill new regulatory thresholds. For more detailed information on specific regulations currently in effect, capital thresholds and compliance, see “Item 4. Information on the Company—Regulation and Supervision—Modifications to the General Banking Act,” “Item 4. Information on the Company—Regulation and Supervision—Capital Adequacy Regulations,” and “Item 4. Information on the Company—Regulation and Supervision—Market Risk Regulations.”
Regarding banking resolution, on January 31, 2023, the CMF published a white paper “Guidelines for a new banking resolution framework and deposit insurance in Chile”. The white paper proposed the creation of a new agency, with financial and operating independence, in charge of both the administration and resolution of deposit insurance. Whereas in business-as-usual times, this entity should develop contingency and resolution plans for D-SIB, in times of crisis the agency would be responsible for the resolution process. According to the proposal, D-SIB should comply with a loss absorption capital requirement of at least 1.0% of total assets to ensure a stabilization scheme and a bail-in mechanism amount that would not be computed as Total Regulatory Capital for capital adequacy purposes. However, if not fulfilled, restrictions on dividend distribution would apply to banks. Likewise, the white paper discusses the key topics of an insurance deposit scheme, which should be funded by banks that apply for its use.
More recently, on January 21, 2026, the CMF published for public comment until June 10, 2026, a set of amendments to the local banking regulation, which are aligned with recommendations provided by the Financial Sector Assessment Program of the International Monetary Fund in 2021, that seek to: (i) strengthen the corporate governance framework for banks by reorganizing and consolidating currently existing rules in a new chapter of the RAN named “Principles and best practices of banking corporate governance,” which would address the roles and responsibilities of the board of directors, skills suitability of board members and the senior management, the functioning of board committees, and the mechanisms of internal oversight and risk control, among others; (ii) reinforce the risk-management framework through the implementation of an integrated risk-management and compliance function; and (iii) introduce a formal recovery-planning process by establishing the guidelines and requirements for this new function, which is intended to be part of the supervisory review and evaluation process carried out by the CMF on banks. If implemented, this set of amendments will be part of the 2028 supervisory review and evaluation process performed by the CMF. Even though this new proposal may be seen as a first step taken by the CMF towards the introduction of a resolution regime, as of the date of this annual report we cannot assure you as to when or how a resolution regime will be implemented in Chile. Similarly, we cannot assure you that the implementation of a new resolution framework and/or a deposit insurance scheme will not have an impact on our profitability, since as a D-SIB we could be subject to further capital requirements if this or another framework is adopted by the Chilean regulator in the future.
Liquidity Requirements
Since 2016 banks have been required to report and monitor liquidity ratios, such as the Liquidity Coverage Ratio (“LCR”) and Net Stable Funding Ratio (“NSFR”), for information purposes only. Through amendments to Chapter III.B.2.1 of the Compendio de Normas Financieras (the Compendium of Financial Norms) on May 4, 2018, and March 8, 2022, the Central Bank set minimum requirements for both the LCR and the NSFR. Accordingly, the regulatory limit for the LCR became 100% in June 2022, while the threshold for the NSFR was also set at 100% with phased-in implementation, reaching 100% on January 1, 2026. Likewise, in the last amendment to Chapter III.B.2.1 of the Compendio de Normas Financieras the Central Bank also: (i) removed the regulatory limit for 30-day and 90-day cash flow mismatches in local currency as measured by the C46 index while maintaining the limit for 30-day cash flow mismatches in foreign currency as measured by the C46 index; and (ii) introduced specifications on the treatment of securities pledged as technical reserves (arising from demand-deposits levels) in order to take them into account as high quality liquid assets. As part of the same amendment, the Central Bank established that banks are required to carry out an annual Internal Liquidity Adequacy Assessment Process (“ILAAP”). The final rules associated with ILAAP were published on January 16, 2023. The possibility of imposing additional High Quality Liquid Assets (“HQLA”) requirements based on the information disclosed in the ILAAP has been in effect since April 2025. As of December 31, 2025, our LCR and NSFR were 198% and 118%, respectively, and we were in compliance with the applicable regulatory thresholds of 100% and 90% in effect as of that date. Regardless of the current levels of these ratios, we cannot assure you that we will remain in compliance with regulatory requirements if, based on the ILAAP results, the regulator requires us to maintain greater amounts of HQLA. This could also lead us to acquire lower-margin financial instruments, which could have an adverse effect on our results of operations and profitability.
Changes in Credit Risk Methodologies
Since 2010, the CMF has developed and required banks to adopt diverse standardized methodologies for the determination of probabilities of default (“PD”) and loss given default (“LGD”) parameters used to calculate credit loss expenses under Chilean GAAP. Thus, in 2011 the CMF introduced a new standardized provisioning method for the individually assessed portfolio. Later, in 2014, a new standardized provisioning model for residential mortgage loans was established. In 2018, the standardized approach was extended to commercial loans in the group-based evaluated portfolio, which was supplemented in 2021 with a more precise treatment for certain sub-segments of this portfolio to achieve further alignment to Basel III. None of these rules had any impact on our results of operations under IFRS Accounting Standards or material impact on our results of operations under Chilean GAAP. On January 1, 2025, a standardized methodology to compute credit loss expenses for consumer loans became effective. This new methodology did not have any impact on our operational results or financial condition under IFRS Accounting Standards. However, the implementation of this new standardized provisioning method resulted in an impact of approximately Ch$69,035 million on our operating results before income tax for 2025, which was recognized as a release of additional provisions in accordance with Chilean GAAP. Based on the diverse changes introduced to the provisioning rules in the past, we cannot assure you that future changes, especially in the provisioning rules or related definitions, will not affect our results under IFRS Accounting Standards or Chilean GAAP, as applicable. For more detailed information on the changes in credit risk methodologies introduced by the CMF see “Item 4. Information on the Company—Regulation and Supervision—Credit Risk Provisioning.”
New Legislation, Other Bills and Regulatory Guidelines Affecting the Banking Business
Additionally, during recent years, several legal and administrative regulations have been enacted and amended to strengthen consumer protection and the relationship between financial institutions and their customers.
In May 2020, the Chilean Congress enacted Law No. 20,009, which expanded the liabilities of payment service providers, including banks, in connection with fraudulent transactions involving credit cards, debit cards, and electronic funds transfers. The implementation of this legislation has led to a significant increase in our liability exposure to customers for digital fraud in recent years. This increase was further exacerbated by the law's reduction of the requirements for customers to request reimbursement from banks in cases of fraud, resulting in a substantial rise in the number of complaints from credit card users, including instances of self-initiated fraud. Consequently, we experienced a marked upward trend in operational write-offs attributable to external fraud between 2021 and 2023. However, after the changes introduced to Law No. 20,009 through Law No. 21,673 that became effective in May 2024, we began to see a decrease in operational write-offs due to external fraud, since the new law introduced a set of responsibilities for users of credit or debit cards and specific deadlines for claiming the reversal or reimbursement of unknown charges on credit or debit cards. Notwithstanding such amendments, and although we have implemented measures and campaigns with our customers and have been able to adequately mitigate the impact of this legislation so far, we cannot assure you that we will not continue to see an increase in our liabilities or operational write-offs as a result of this legislation, particularly given the widespread use of credit and debit cards in Chile in recent years. For the year ended December 31, 2025, we incurred net operational write-offs (gross operational losses less recoveries) attributable to external fraud of Ch$13,226 million, compared to Ch$13,447 million and Ch$18,051 million in 2024 and 2023, respectively. For further information on the obligations and liabilities imposed by, and characteristics of, this legislation, see “Item 4. Information on the Company—Regulation and Supervision—Consumer-Oriented Regulation.”
Law No. 21,365 was enacted in July 2021, regulating interchange fees in the payment cards market in Chile. An autonomous and technical committee was created to determine, on a periodic basis, the fees or rates to be charged by payment card issuers such as banks (“Interchange Rates”) to the operating companies (acquirers). The technical committee is comprised of four members, each one appointed by: the Central Bank; the CMF; the Office of National Economic Prosecution (Fiscalía Nacional Económica); and the Ministry of Finance. This committee had six months to announce the first transitory limits and, afterwards, Interchange Rates will be reset every three years. On February 5, 2022, the committee announced new preliminary maximum fees of 0.6% for debit cards, 1.48% for credit cards and 1.04% for prepaid cards. On February 22, 2023, the technical committee determined the definitive scheme that will be applicable in Chile by defining a maximum interchange fee of 0.35% for debit cards and 0.80% for credit cards and prepaid cards. These limits went into effect in October 2023, and from that date the current limits will converge to the new ones during a phase-in period of 18 months. On September 30, 2024, the technical committee postponed the second phase of the interchange-rates reduction that was initially set to become effective on October 1, 2024, as a result of questions from market participants regarding the interchange rates set by the technical committee, given the significant changes evidenced in the credit and debit card market in recent years that could result in revised limits. As a consequence, as of the date of this annual report, the interchange rates were the same as those in effect on October 1, 2024, amounting to 0.5% for debit cards, 1.14% for credit cards and 0.94% for prepaid cards. Although we believe the prevailing or new limits —as currently known— will not have a material impact on our results of operations, given the uncertainty on the limits that could be determined by the technical committee in the future, we cannot currently assure you whether this new regulation will have a negative impact on the banking industry and on our results of operations in the long term.
Law No. 21,389, which creates an alimony debtor registry, came into effect in November 2022. This law requires banks and other financial service providers to retain amounts of credits granted to debtors that are registered in such registry, for the purpose of paying overdue alimonies. It further imposes fines on banks and financial institutions that do not consult the registry and do not withhold the amount specified. These fines amount to twice the money the bank should have withheld. For the year ended December 31, 2023, four Chilean banks, excluding us, were fined for not complying with the provisions of this law. For the year ended December 31, 2024, we were fined, along with five other Chilean banks, for non-compliance with the provisions established in Law No. 21,389. The fine imposed on us was informed to us on May 3, 2024, and amounted to UF111.48 (Ch$4.3 million as of December 31, 2024). We paid this fine during fiscal year 2024. For the year ended December 31, 2025, we were fined, together with five other Chilean banks (or their subsidiaries), for non-compliance with the provisions established in Law No. 21,389. The fine was imposed on us on May 20, 2025, and amounted to UF617.98 (Ch$24.6 million as of December 31, 2025). On May 29, 2025, we filed an appeal for reconsideration and reversal of this resolution. The courts resolved to dismiss the appeal and maintained the fine imposed on us by the CMF. We paid this fine during fiscal year 2025. Although we have continued optimizing our Management Information System and procedures to address the requirements imposed by Law No. 21,389, we cannot assure you that we will be able to comply with the provisions in the future if we do not have access to timely and adequate information provided by third parties or our Management Information System do not suitably discriminate customers’ information.
In December 2021, Law No. 21,398 was enacted. Among other measures to enhance consumer protection, this law introduced rules, such as: (i) requiring a competent court to construe certain provisions in favor of the consumer in court procedures, (ii) imposing new obligations applicable to financial service providers in connection with certain products, (iii) introducing new minimum requirements for pre-payments in credit transactions, and (iv) requiring an economic solvency analysis before contracting a credit product and informing the consumer of the result of said analysis, among other measures. On April 21, 2022, the Ministry of Economy, Development and Tourism published the Regulation on Analysis of Economic Solvency and Information to Consumers. This regulation, which came into force on May 4, 2024, establishes the requirements that such economic solvency analysis must contain. These new measures may increase our due diligence, operating and legal costs, affect the growth of our customer base and increase the costs associated with the management of our consumer loan portfolio. However, as of the date of this annual report, we cannot currently ascertain its impact, if any, on our results of operations in the future.
On May 30, 2024, Law No. 21,673 was published to avoid overborrowing by Chilean individuals and companies, among other purposes. This law also amended Law No. 18,010, among others, by empowering the CMF to determine the calculation algorithm or the variables to be used in the calculation of the minimum monthly payment required from credit card holders with respect to billed purchases or cash withdrawals. On June 4, 2025, through Norma de Carácter General No. 537, the CMF published the formulae and components for determining the minimum monthly payment required by banks to credit card users, together with the exceptional situations in which credit card issuers may exempt credit card users from a minimum payment requirement. In summary, the regulation establishes that the minimum payment will be determined as the sum of the Non-Financing Amount (“NFA”) plus 5% of the Financing Amount (“FA”). Whereas the NFA considers interest-free installments payable within the billing period, together with interest, fees and other charges (such as insurance premiums, taxes, etc.), the FA corresponds mainly to the outstanding capital. In addition, credit card issuers will be entitled to exempt credit card users from the minimum payment in accordance with their internal policies, only if the definitions of such payment consider the total amortization of the obligation exempted from payment over a maximum timeframe of 24 months, while the exemptions may not be granted for more than two consecutive months. This regulation will go into effect on June 4, 2026. Based on internal preliminary analysis of this new regulation, as of the date of this annual report, we do not expect it to have a material impact on our future results of operations or financial condition.
On July 3, 2024, Law No. 21,680 was published and became effective on April 1, 2026. This law creates an official information register that consolidates information on debtors’ obligations to improve credit assessment while providing more information to the Financial Market Commission for regulatory purposes. This consolidated debt register includes other-than-banking lenders as reporting entities thus allowing a more comprehensive and accurate view of the debtors’ creditworthiness. This information will be managed exclusively by the CMF and will allow lenders to access debtors' credit information and perform a more detailed credit risk assessment. Debtors, including both individuals and companies, will have the right to access their information and may request updates, rectifications or deletions if found to be incorrect. In July 2025 the CMF published the Norma de Carácter General No. 540, which defines the operating framework of the consolidated debt register by considering roles and responsibilities of reporting institutions, while in December 2025 the CMF published for public comment a framework for the obtaining, administration, and reporting of debtors’ consent in the context of the consolidated debt register. Although banks see this law favorably from the commercial and credit risk perspectives by permitting a more accurate assessment of current and future borrowers, such law may also result in both a one-time impact on expected credit losses for some specific borrowers or clusters of borrowers and increased operating expenses due to further information requests in the long run, which we are not currently able to predict.
In addition, Law No. 21,719 regulating the protection and processing of personal data was published on December 13, 2024. This law aims to improve the rules relating to the processing of personal data of individuals, so that it is carried out with the consent of the owner of such data or in cases authorized by law, ensuring standards of quality, information, transparency, and security. Likewise, the Personal Data Protection Agency was created under this law and is in charge of ensuring personal data protection. For companies in charge of managing personal data from their customers or counterparties as part of their normal course of business, starting in December 2026, the sanctions for non-compliance with the law may range from written warnings to fines of up to 4% of the company’s revenues depending on the severity of the violation and potential backsliding of large companies. This new framework could require changes in our current procedures to duly comply with these standards of data-privacy protection. If we fail to comply with these requirements or in case of breach of our systems and platforms through which we manage third-party data, we may be fined by the Personal Data Protection Agency, which could adversely affect our reputation and results of operations. For more information, see “Item 4. Information on the Company—Regulation and Supervision—Personal Data Protection Law.”
Another pending bill is expected to introduce additional requirements to judicially exercise rights attached to mortgage loan collateral, which could affect our ability to recover past-due loans by means of foreclosure. Yet another bill related to insolvency law, would limit a bank’s ability to deny providing certain banking products to personal banking customers (individuals) on the grounds that they have been debtors in an insolvency procedure in the past. Further, a bill introduced at the end of 2022 proposes to eliminate information on debtors’ behavior that occurred before the last five years, thereby limiting the available information to properly assess and evaluate the credit risks of a broad customer base. In addition, a bill proposed in March 2023 would preclude certain service providers from charging and indexing installments and bills to UF (the local inflation- indexed united of account), which in the case of banks would relate to mortgage loans granted to personal and SME banking customers. Likewise, in June 2024, a new bill was introduced in the lower house that aims to provide individual debtors with a timeframe of 13 years to repay both commercial and consumer loans granted by local banks while cancelling any type of interest previously agreed on such loans and prohibiting interest compounding over time. Also, in April 2025 a new bill was introduced in the lower house with the aim of prohibiting financial and healthcare institutions from setting age limits for customers when offering their services. In the case of banks, the bill proposes that credit-granting decisions be based only on objective criteria related to the loan applicant’s payment capacity and credit risk, without considering age as a determinant factor in the commercial decision. Also, banks will have to maintain a granular recordkeeping process that shall be subject to oversight by regulatory bodies. If enacted, such laws may limit the effectiveness of our credit evaluation process and the due diligence we perform over potential customers, may generate mismatches between assets and liabilities denominated in UF, or deteriorate our asset quality and require us to increase provisions for expected credit losses while affecting our results of operations.
From the consumer-protection perspective, in July 2025 a new bill intended to modify the General Banking Act was introduced for discussion in the Chilean lower house, which seeks to allow banking customers to gather in customer associations to negotiate interest rates, credit restructurings or any other topic covered by the customer-bank relationship. Also, customer associations would be entitled to form federations to represent customers of two or more banks and negotiate for the benefit of their members. According to the bill, banks would be compelled to recognize those associations and to negotiate with those composed of their customers. Also, the bill establishes that a representative of the customer associations or federations would be part of banks’ boards of directors.
Some of these bills are currently in the early or middle stages in the Chilean Congress, and some of them have been under discussion for several years, and there is no certainty whether any or all of them will be further discussed or not, and as to when or how these bills could change the current regulatory framework if approved. Therefore, we cannot determine or assure you whether they will materially affect our business and, in turn, our financial condition and results of operations in the future.
In September 2023, a Chilean private consumer body requested to the Chilean Antitrust Court (Tribunal de Defensa de la Libre Competencia) to initiate a regulatory recommendation process to propose to the President of Chile a draft bill to regulate the participation of conglomerates in the Chilean economy. As of the date of this annual report, this process is pending a decision by the Chilean Antitrust Court.
There are several bills introduced in recent years that would modify matters related to loans and credit products, such as interest-rate ceilings, prepayment fees, and the possibility of capitalizing interests. Some of them also aim to ease the financial burden of certain banking borrowers, such as SMEs and individuals. These bills, if enacted, may increase the costs of our consumer loan and mortgage products by setting higher mandatory protections for customers.
Future changes in regulations may also cause us to face increased compliance costs and limitations on our ability to pursue certain business opportunities and provide certain products and services. As some banking laws and regulations have been recently adopted, the way they are applied to the operations of financial institutions is still evolving. We cannot generally assure you that laws or regulations will be adopted, enforced or interpreted in a manner that will not have a material adverse effect on our business and results of operations. Lastly, we cannot assure you that regulators will not impose more restrictive limitations in the future on the activities of banks, including us, than those that are currently in effect. Any such change in terms of capital and liquidity adequacy, credit risk provisioning, and consumer protection, among other matters, could have a material adverse effect on our results of operations or financial condition in a fashion that we cannot determine in advance. For more information, see “Item 4. Information on the Company—Regulation and Supervision.”
Enhanced ESG and climate change disclosure may impose additional costs on our bank.
In recent years, various guidelines and regulations have been issued recommending or requiring companies to adopt policies and procedures with the purpose of enhancing the approach to environmental, governance and social (ESG) matters. On October 4, 2022, the CMF published guidelines for the implementation and supervision of sustainability standards by means of section 8.2 of Norma de Carácter General N°461, which is aimed at improving the quality of information released by Chilean companies on sustainability and corporate governance matters on their annual report, which are in accordance with the guidelines of the Sustainable Accounting Standards Board. On October 29, 2024, Norma de Carácter General N° 461 was amended by Norma de Carácter General N° 519 making these new rules effective and mandatory for local banks as of the fiscal year ending on December 31, 2025.
Similarly, in March 2024, the SEC adopted rules aimed at enhancing and standardizing climate-related disclosures. The rules require registrants to include certain climate-related information in their registration statements and annual reports, including data regarding greenhouse gas emissions and information regarding climate-related risks and opportunities and related financial impacts, governance, and strategy. However, in March 2025, the SEC voted to end its defense of such rules. On September 12, 2025, the U.S. Court of Appeals for the Eighth Circuit maintained a pause on litigation regarding the rule and directed the SEC either to defend the rules or propose changes through notice-and-comment rulemaking. However, the Court did not impose any deadlines on the SEC, and the SEC has not taken further action. The September 4, 2025 Unified Agenda of Regulatory and Deregulatory Actions (the "Regulatory Agenda"), which outlines forthcoming actions by the SEC and other administrative agencies, did not include re-proposal of the rules. Accordingly, the climate-related disclosure rules issued by SEC currently have no legal force.
We cannot rule out that the adoption of new guidelines and regulations on ESG and climate change matters could limit our lending business, restrict our ability to recruit new customers, increase compliance requirements or result in higher operating or funding costs, among other effects in the future that we cannot predict now, given the still-developing and evolving regulatory environment related to ESG and climate change matters.
Modifications to reserve requirements may affect our growth capacity and margins.
According to the Chilean banking regulation, demand deposits and time deposits are subject to reserve requirements of 9.0% and 3.6% (with terms of less than one year), respectively. However, the Central Bank is entitled to require banks to maintain reserves of up to 40.0% for demand deposits and up to 20.0% for time deposits, to the extent needed for monetary policy purposes. In addition, if the aggregate balance of demand deposits and other demand accounts (e.g., deposits in current accounts, other demand deposits or obligations payable on demand and incurred in the ordinary course of business, saving deposits that allow unconditional withdrawals that bear a stated maturity, and other deposits payable immediately unconditionally) held by a bank exceeds 2.5 times its Total Regulatory Capital (including CET1, additional Tier 1 capital and Tier 2 capital) the bank is required to set aside a technical reserve equivalent to the full amount of that excess. In addition, under Basel III, banks denominated as D-SIB could be subject to stricter technical reserve requirements by which the threshold of 2.5 times the Total Regulatory Capital could be reduced to 1.5 times. The imposition of this additional requirement depends on the assessment of the CMF, although the decision must be agreed with the Central Bank. The CMF first designated six local banks (including us) as D-SIBs in March 2021. Our designation was subsequently reaffirmed in March 2022, March 2023, April 2024, April 2025 and March 2026, resulting in the imposition of a systemic capital charge on us. However, as of the date of this annual report, we have not received any notice of additional requirements—such as stricter technical reserve thresholds—arising from our D-SIB designation. Nonetheless, we cannot assure you that we will not be subject to such additional requirements in the future, to the extent we continue to be qualified as D-SIB, which in turn could impact our capacity to sustain balance sheet growth or lead us to raise funding from alternative sources if a greater amount of demand deposits must be set aside, which could have a material adverse effect on our net interest margin and results of operations. For more information on the implementation of the systemic buffer, see “Item 3. Key Information—Risk Factors—Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations.”
Changes in accounting standards could impact our results.
The IASB, or other regulatory bodies, periodically introduce modifications to financial accounting and reporting standards under which we prepare our consolidated financial statements. These changes can materially impact on how we report financial information, affecting our results of operations. Also, we could be required to apply new or revised standards retroactively.
Currently, we cannot assure you that future changes in financial accounting and reporting standards will not substantially affect our results of operations or performance indicators, as we do not know the extent of future standards.
Increased competition and industry consolidation may adversely affect our operations.
The Chilean market for financial services is highly competitive. We compete with Chilean and foreign banks, with Banco del Estado de Chile, which is state-owned, and with other providers of financial services new to the banking industry and the traditional financial system. In addition, the retail segment (which encompasses individuals and small and medium-sized companies) has become the target market of several banks, since banking penetration is still in progress in Chile, particularly in this segment. Accordingly, competition within this market is increasing as banks are frequently incorporating new and tailored products and services, while striving to improve service quality and to accelerate digital transformation.
We also face increasingly significant competition from non-banking competitors in some of our credit products, especially credit cards and installment loans, including large department stores, pharmacy chains, supermarkets and private compensation funds, as well as saving and credit cooperatives. In addition, we face competition from other types of lenders, such as non-banking leasing, crowdfunding, factoring and automobile financing companies, especially in credit products, as well as mutual fund managers, pension fund managers and insurance companies within the market for savings and investment products and insurance companies in the market for mortgage loans. Likewise, new providers of financial services have emerged over the last years, such as e-commerce, local and foreign fintech companies, Telecom companies, like internet and mobile phone providers, and more recently several alternative marketplaces that are allowed to provide temporary financing directly to their customers or providers.
These new ways of doing business are based on the disintermediation of traditional banking service providers. Some of these companies may have more resources than us, including larger customer bases, stronger brand recognition and more effective marketing tools to approach banking current or potential customers. They may also adopt more aggressive pricing, while devoting significant resources to technology, infrastructure and marketing as it is part of their core business. Some of these non-banking competitors have recently commenced to be regulated by the CMF for purposes of banking supervision through Law No. 21,521, which regulates fintechs and open banking by establishing a general framework for financial services provided through technological means (including banks) in order to protect financial customers and data privacy while preserving financial stability and strengthening anti money-laundering. Although this law introduced specific requirements for fintechs, they are not subject to the same solvency, liquidity or reserve requirements imposed by the banking regulator, among other requisites, if any, as banks generally are. Therefore, these providers represent a challenge for the traditional banking industry that may result in lower margins and profitability in the future. Nevertheless, banks continue to be the main suppliers of loans, leasing, factoring and mutual fund management, directly or indirectly through subsidiaries, while growing quickly in insurance brokerage services. By the end of 2025, the CMF published for public comment a set of amendments to the open banking regulations addressing the exchange of information between banks and payment card issuers through the open banking system. The proposed modifications seek to implement the open banking system on a more gradual basis, improve operational feasibility, and ensure a proper balance between innovation, competition, and financial stability. Accordingly, the proposed regulation extends the rollout schedule, introduces interim milestones and a testing phase before full enforcement, simplifies the participation requirements imposed on certain players, refines the management of user consent, reinforces data traceability and interoperability rules, adjusts governance and operational responsibilities among participants, and enhances technical protocols for APIs and IT testing environments. Notwithstanding the evolution of the regulatory framework for fintechs and open banking, there remain uncertainties regarding final technical standards requirements, the cost compensation model, regulatory symmetry, operational burden and legal liability. To address these issues, the CMF convened a working group with representatives from participant industries, which is expected to inform supplementary rulemaking. However, we cannot assure you that the current regulatory framework or competitive landscape will develop in a manner that is favorable to us. For more information on these matters and on the implementation process of Law No. 21,521, see “Item 4. Regulation and Supervision—Fintech Law.”
Likewise, we are aware that new competitors may enter the market, or existing competitors may innovate their services and strategies to improve the quality of services rendered to their customers. If we fail to effectively anticipate or adapt to new trends in the financial services industry, including changes in the way of delivering financial products and services, introduction of emerging technologies, changes in customer behavior or adaption of the kinds of services offered to or needed by them, our business may be adversely affected.
In addition, the continuous introduction and application of new technologies, including –but not limited to– distributed ledger, artificial intelligence (“AI”) and biometrics, to provide customers with diverse financial products and services, may result in substantial expenditures to adapt and update our existing products and services as we continue to grow our internet and mobile banking capabilities and could result in direct financial and non-financial risks and indirect risks related to loss of competitive position. In this context, competitors could adapt faster than us to these new trends, which could lead to a temporary competitive disadvantage that could translate into lower revenues or a reduced ability to raise funding from retail depositors as customers may choose to conduct business with other financial service providers. Since we are aware of these new trends, we have devoted efforts to adapt our organization in pursuit of enhanced flexibility while looking for business and technological partnerships in order to take advantage of business opportunities arising in the market while keeping our value offerings adapted to new customers’ needs. As such, we have continued to deploy our digital strategy to offer tailored services and products to customers from different segments by leveraging our strategic capabilities, entering into alliances with other banking and non-banking providers, developing innovative digital solutions, and reinforcing benefits from using our payment and savings systems. We cannot assure that present or future competitors will not copy our strategy to launch new digital products or enter into digital alliances or that they will not develop better solutions by acquiring more modern technology or designing more innovative solutions.
Also, in the past, increasing competition within the Chilean banking industry has been accompanied by a consolidation wave and the entry of international players into the system through multiple mergers and acquisitions. These trends have continued and resulted in the creation of larger and stronger banking conglomerates, offering a wide range of products and services and targeting most of the segments in the Chilean banking market. These dynamics may adversely impact our results of operations as they may translate into higher interest rates paid on deposits and lower interest rates earned on loans, resulting in decreased net interest margins.
Further, following the new rules issued in recent years by the Chilean regulator, the processing and merchant acquiring services for payment cards (particularly related to new acquirers) may now be accomplished through a four-party mechanism, as done in some developed economies. This model facilitates the entry of new market players. As of December 31, 2025, a significant part of transaction processing services continued to be provided in Chile by Transbank S.A., a company owned by us and nine other banks (of which we held a 26.16% direct ownership as of December 31, 2025). However, some of the main Chilean banking players, including us, have already begun to implement the new four-party model for their own business. In this regard, on July 29, 2024, we created a dedicated acquiring and processing credit and debit card subsidiary named “ Operadora de Tarjetas Banchile Pagos S.A.” (“Banchile Pagos”), which is owned by Banco de Chile (99.9% share ownership) and Banchile Asesoría Financiera S.A. (0.1% share ownership). This subsidiary participates in the new four-party model with other banking and non-banking competitors. When creating this subsidiary, we granted a mandate to an independent third party to exercise all our voting rights in Transbank S.A. without receiving instructions from, nor sharing information with, us. Also, given the new four-party model, on January 23, 2023, the Chilean Association of Banks and Financial Institutions (“ABIF”) announced the willingness of banks participating in the ownership of Transbank S.A. to relinquish part or total control of the company, process that, as of the date of this annual report, is still open. In addition, as previously mentioned, a technical committee is responsible for determining the maximum interchange fees that may be charged by credit card issuers (including us) to companies that provide merchant acquiring services.
Also, by the end of 2025, the Central Bank approved regulations for a new payment clearinghouse for low-value transactions, which is expected to start operations in the second half of 2026. The entry of new participants into the local payment infrastructure may increase competition in diverse markets, such as current accounts and debit cards, produce disruptions in the flow of transactions within the local financial system, or result in further capital expenditures on information technology.
Based on these dynamics, net interest margins (once deducted provisions for loan losses) or fee-based income in certain sub-segments on targeted markets could decline over time.
For more information regarding past and recent changes in the Chilean banking industry see “Item 4. Information on the Company—Business Overview—Competition.”
Our exposure to certain segments of the retail market could lead to higher levels of total past-due loans and subsequent charge-offs.
Although we have historically been focused on wholesale banking, over the last years we have continued to reorient our commercial strategy to increase penetration of the retail banking segment. In fact, according to our Management Information System, the share of the retail banking segment in our total loan book has increased from 64.1% in 2020 to 67.5% in 2025. Although this trend has been primarily associated with an expansion in middle- and higher-income personal banking, our retail banking segment is also composed of small and medium-sized companies (approximately 13.8% of our total loan book as of December 31, 2025, which consists of companies with annual sales of up to approximately UF70,000 (approximately Ch$2,781 million or U.S.$3.1 million). Since these customers are likely to be more severely affected by adverse developments in the Chilean economy than large corporations and higher-income individuals, we may be exposed to higher levels of delinquency and subsequent charge-offs in the future, which could result in materially higher allowances for loan losses that could adversely affect our results of operations.
As of December 31, 2025, our past-due loans (loans 90-days or more past due) amounted to Ch$721,003 million, which represented a 15.8% annual increase when compared to the Ch$622,440 million recorded in 2024. These figures translated into an increase in our total past-due ratio (loans 90-days or more past due over total loans) from 1.60% in 2024 to 1.83% in 2025. According to our Management Information System, as of December 31, 2025, our past-due loans (loans 90-days or more past due) were composed of 87.6% of retail banking 90-days or more past-due loans (consumer and residential mortgage loans to individuals, as well as commercial loans to small and medium sized companies) and 12.4% of wholesale banking 90 days or more past-due loans (commercial loans to large companies and corporations). During the prior fiscal year, our past-due loans (90 days or more) portfolio was composed of 90.1% retail banking past-due loans (90 days or more) and 9.9% wholesale banking past-due loans (90 days or more).
Diverse financial and economic dynamics contributed to the increase in both the amount of total past-due loans and our total past-due loans ratio from 2024 to 2025, with these trends present across all lending families and business segments. According to our Management Information System, the increase in past-due loans was mainly explained by an annual increase of Ch$64,881 million in retail banking past-due loans (loans 90 days or more past due). This change, in turn, was primarily explained by an increase of Ch$57,922 million in personal banking loans, attributable to higher delinquency in both residential mortgage and consumer loans, which resulted in year-end past-due ratios that exceeded the levels seen before 2020. These trends have been caused by several factors which have negatively impacted the entire industry, such as unemployment rates higher than average levels seen in previous years, the effect of cumulative inflation on tradable and non-tradable goods that has negatively impacted household disposable income, and lagged effects of subdued economic growth after the end of the COVID-19 pandemic. In the case of commercial loans granted to SMEs, we also experienced an annual increase in past-due loans, amounting to Ch$6,959 million in December 2025 when compared to December 2024. The increase in this banking unit was primarily driven by the end of state-guaranteed programs for support of these kinds of companies and the maturity of loans formerly granted under such programs. In this regard, the modest evolution observed for leading economic activity indicators during the year, together with tempered business activity in the wholesale banking segment resulted in increased delinquency for small- and medium-sized companies. Similarly, the wholesale banking segment recorded an increase of Ch$33,682 million in past-due loans (loans 90 days or more past due) as of December 31, 2025, compared to a year earlier. This increase in delinquency was driven by reduced business activity in some specific industries and was particularly concentrated in our large companies banking unit and, to a lesser extent, in the corporate banking unit. As mentioned earlier, although private investment grew in 2025, the recovery was primarily concentrated in the mining and energy sectors, which represent a small share of our commercial loan portfolio, while the exports sector also presented a lower expansion in comparison with the performance observed in 2024. Accordingly, business activity in most of the industries continued to be tempered in 2025, which translated into worsened risk profiles for some customers.
As a result, the total past-due ratios (90 days or more past-due loans over total loans) increased from 1.81% in 2024 to 1.96% in 2025 in the retail banking segment and from 0.51% in 2024 to 0.88% in 2025 in the wholesale banking segment.
Given the unpredictability of certain social developments, the effects of political and social events in Chile affecting consumer confidence and business sentiment, international health events such as pandemics or epidemics, market fluctuations, changes to macroeconomic indicators, effects of global armed conflicts on the worldwide and local economies and delayed effects of these developments, may affect our diverse customer segments, we cannot assure you that we will be able to maintain a balanced risk-return equation if some or all of these developments materialize in the future. In this regard, economic recessions, social turmoil or market volatility could adversely affect the financial condition of our borrowers, which could translate into an increase in our non-performing loans, impair our loan portfolio and result in lower demand for our loans. Any of these trends could have a material adverse effect on our business, financial condition and results of operations.
For more information on past-due loans, see “Item 3. Key Information—Risk Factors—Risks Relating to our ADSs— Developments in international financial markets may adversely affect the market price of the ADSs and shares,” “Item 3. Key Information—Risk Factors—Risks Relating to Chile—Pandemics, epidemics and other health events will affect both the global and the Chilean economy, our business or results of operations and could affect our financial condition” and “Item 4. Information on the Company—Selected Statistical Information—Analysis of Substandard and Past-due loans.”
Our results of operations are affected by interest rate volatility and inflation.
Our results of operations depend greatly on our net interest income (including both net interest income and net inflation-indexation income), which represented 68.3% of our total operating revenues as of December 31, 2025. Changes in nominal interest rates and inflation could affect the interest rates earned on our interest-earning assets differently from the interest rates paid on our interest-bearing liabilities, resulting in lower net interest income. Likewise, changes in the inflation rate could affect the contribution of our inflation-indexed net asset position in the banking book, which could translate into lower inflation-indexation income. Inflation and interest rates are sensitive to several factors beyond our control, including the Central Bank’s monetary policy, deregulation of the Chilean financial sector, local and international economic developments and political conditions, among other factors. In addition, changes in interest rates affect the fair value of tradable securities and other investments or assets and are therefore exposed to potential negative value adjustments. Similarly, changes in the inflation rate could have an indirect effect on interest rates and a direct impact on revenues coming from assets indexed to the variation of the CPI or the UF, which is a functional currency indexed to the CPI. Therefore, any volatility in interest rates and inflation could have a material adverse effect on our results of operations and financial condition. Also, real negative interest rates could negatively impact our ability to raise funding for our operations, particularly for short-term maturities, which could result in higher funding costs and lower net interest margin.
The average annual short-term nominal interest rate in Chile for 90 to 360 day deposits received by Chilean financial institutions was 9.83% in 2023, 5.74% in 2024 and 4.69% in 2025, following the trend seen in the monetary policy interest rate, which averaged 10.5% in 2023, 6.2% in 2024 and 4.9% in 2025. The evolution of the reference rate has been associated with the attempts of the Chilean Central Bank to control inflation over recent years. As inflation began to decrease over the second half of 2023, the Central Bank began to reduce the monetary policy rate, which continued in 2024 by taking the reference rate from 8.25% on December 31, 2023 to 5.0% on December 31, 2024. During 2025, the Chilean Central Bank continued to reduce the monetary policy interest rate towards a neutral level, though at a slower pace due to certain inflationary pressures related to the delayed recognition of changes in energy prices (postponed due to ease the effect of the economic aftermath of the COVID-19 pandemic on household incomes). As a result, the monetary policy interest rate decreased from 5.0% on December 31, 2024, to 4.5% as of December 31, 2025. For 2026, the Chilean Central Bank has anticipated the monetary policy interest rate would converge to neutrality as long as inflation rate remains within the two-year target range, as expected. As of March 31, 2026, the monetary policy interest rate remained at 4.5%. Similarly, the average interest rate paid by Chilean financial institutions for 90 to 360 day Chilean peso denominated deposits was 4.39% in the three-month period ended on March 31, 2026. Regarding long-term interest rates, the average long-term nominal interest rate based on the interest rate of the ten-year bonds traded in the secondary market, issued by both the Central Bank and the Chilean Government, was 5.66% in 2023, 5.79% in 2024 and 5.68% in 2025. In 2025, long-term nominal interest rates showed a general downward trend rooted in inflationary pressures that decreased over the year, after the impact produced by electricity bills over the first half of 2025, as the 12-month inflation rate continued to decline to the monetary policy target range of 2% to 4%, from which point market agents’ expectations on inflation stabilized at 3%. As a result, the interest rate of ten-year Chilean peso denominated bonds, issued by both the Central Bank and the Chilean Government, decreased from an average level of 5.76% in December 2024 to an average of 5.36% in December 2025. In the three-month period ended March 31, 2026 the interest rate for the same Central Bank and Chilean Government bonds averaged 5.40%, while reaching an average of 5.56% for the month of March 2026.
Prior to 2021, inflation in Chile had been moderate, especially in comparison with periods of high inflation experienced in the 1980s and 1990s. High levels of inflation in Chile could adversely affect the Chilean economy, consumer purchasing power, household consumption and investment in machinery and equipment and, therefore, the demand for financing and our business. The annual inflation rate (as measured by annual changes in the CPI and as reported by the Chilean National Institute of Statistics) during the last five years and the first three months of 2026 was:
| Year | Inflation (CPI Variation) |
|||
| 2021 | 7.2 | % | ||
| 2022 | 12.8 | |||
| 2023 | 3.9 | |||
| 2024 | 4.5 | |||
| 2025 | 3.4 | |||
| 2026 (through March 31, 2026) | 1.4 | % | ||
Source: Chilean National Institute of Statistics In 2025, the inflation rate, measured as CPI variation, was 3.4%.
This CPI variation was within the medium-term inflation target range of 2% to 4% as set by the Chilean Central Bank and favorably compared to the level of 4.5% registered in 2024. The decrease in the inflation rate was the consequence of several factors that resulted in a steady decrease in core inflation and volatile prices. In this regard, the inflation rate for tradable goods declined as a result of the positive impact on local prices of: (i) the 9.5% appreciation of the Chilean peso against the U.S. dollar between December 2024 and December 2025, which benefited prices of tradable goods indexed to the exchange rate, (ii) the potential impact of international trade redirection as a result of an upward revision of tariffs for certain trade players in specific destinations, (iii) an unusual behavior of some volatile food prices that declined significantly over the year, particularly fruits and vegetables, (iv) a monetary policy interest rate that remained above neutral levels to keep aware of inflationary pressures, and (v) subdued household consumption in alignment with overall economic activity. Consequently, 12-month inflation for tradable goods decreased from 4.2% in December 2024 to 2.7% in December 2025. To a lesser degree, the annual variation of CPI for non-tradable goods decreased from 5.0% in December 2024 to 4.4% in December 2025, which was primarily explained by: (i) a smoother convergence to the inflation target range as a result of energy prices that continued to internalize the adjustment in electricity bills, especially in the first half of the year, and (ii) prices of services that reflected the impact of increased labor costs, given the increase in minimum wages and the reduction in weekly working hours. As a result of the decreasing trend recorded by the inflation rate over 2025, the Chilean Central Bank continued to deploy an easing monetary policy, although at a slower pace than in 2024, primarily due to the higher volatility observed in local prices, which could have impacted inflation. Thus, after taking the reference rate from 8.25% in December 2023 to 5.0% in December 2024, the Central Bank took the overnight rate to 4.5% in December 2025 through two cuts of 25 basis points each in July 2025 and December 2025. Although we benefit from a higher-than-expected inflation rate in Chile in the short term, due to the structure of our assets and liabilities (we have a net asset position indexed to inflation, which is composed of both an economic hedge of our shareholders’ equity against the effect of inflation on the loss in purchasing power and directional positions taken by our treasury as part of our asset and liability management strategies and risk appetite), significant and persistent increases or decreases in inflation with respect to current levels or the target set by the Central Bank could adversely affect our net interest income, results of operations and, therefore, the value of our securities and profitability in the long term.
Additionally, measures being taken by the Central Bank to control inflation may adversely affect the Chilean economy, the banking business and our results of operations and financial condition. In this regard, the measures adopted by the Central Bank in the past to control inflation have included monetary policy interest rate hikes, which have restricted the demand for loans while negatively affecting economic growth through constrained household spending and capital expenditures. As mentioned earlier, in 2025, the Central Bank reduced the monetary policy interest rate twice, ending the year at 4.5%. Although the Central Bank has declared the intention to reduce the monetary policy interest rate towards neutral levels in 2026, this will finally depend on the evolution of 12-month inflation and its eventual convergence to the medium-term target. As of March 31, 2026, the monetary policy interest rate remained at 4.5%.
For more information, see “Item 3. Key Information—Risk Factors—Risks Relating to our ADSs—Developments in international financial markets may adversely affect the market price of the ADSs and shares,” “Item 3. Key Information—Risk Factors—Risks Relating to Chile—Pandemics, epidemics and other health events will affect both the global and the Chilean economy, our business or results of operations and could affect our financial condition” “Item 5. Operating and Financial Review and Prospects—Operating Results—Overview—Inflation” and “Item 5. Operating and Financial Review and Prospects—Operating Results—Overview—Interest Rates.”
Our loan portfolio is subject to prepayment risk, which could have an adverse effect on our results of operations.
Most of our loan portfolio is subject to prepayment risk, which is associated with the borrowers’ or issuers’ ability to pay off an obligation prior to its maturity. Prepayment risk increases when interest rates decline, which could result in unexpected repricing of our assets that may have a material adverse effect on us if we are not able to reprice our liabilities. In the past, prepayment risk has had an adverse impact on credit card loans and residential mortgage loans by reducing the average repricing tenor of these assets, which may result in mismatches with liabilities used to finance them that could be just partly offset by investment choices at lower interest rates or prepayment fees charged to borrowers that only represent a portion of the incurred financial loss. After the COVID-19 pandemic, short-term interest rates increased significantly from the levels seen after the subprime crisis due to the attempts of central banks to control the inflationary wave observed across the globe. Likewise, greater fiscal deficits in developed and developing economies, concerns over the convergence of inflation rates to target levels in the medium-term given economic growth expectations and increased household consumption, resulted in an increase in long-term interest rates. In Chile, such effect was amplified by pension funds withdrawals approved by Congress to help the population to address the economic aftermath of the pandemic. As inflation ceded, the Chilean Central Bank decided to ease the monetary policy by reducing the monetary policy interest rate towards neutral levels in 2025. Although long-term interest rates continue to be above pre-pandemic levels, they also decreased in Chile during 2025. Notwithstanding these trends, lower-than-forecasted economic dynamism or a decrease in inflationary pressures may result in lower interest rates in the future. Also, in the past, there have existed diverse initiatives sponsored by the Chilean government or members of Congress intended to limit prepayment fees, which could have a negative effect on our results if implemented, in an amount that we are not able to estimate. Accordingly, we cannot assure you that any future changes related to prepayment fees or a decline in interest rates to the levels seen prior to 2019 will not have a material impact on our business.
Part of the information included in our financial statements considers assumptions, estimates and modeling which, if inaccurate, could have a material impact on our results of operations and financial position.
The preparation of our financial statements requires management to make judgments and estimates that affect the amounts of assets, liabilities, income and expenses reported in our financial statements. Estimates and assumptions are based on historical experience, expert judgment and other factors, including expectations of future developments under certain alternative scenarios. Although assumptions and estimates are assessed and revised on an ongoing basis, we cannot rule out that projected scenarios could dramatically change in the short term, causing a severe impact on fundamentals and estimates.
We are also subject to model risk since the valuation of financial instruments relies on models (such as cash flows valuation models for fixed-income securities, valuation models for derivatives including technical approximations, value adjustments models for derivatives, models for determining the impairment of financial assets and IFRS 9 forward-looking provisioning models, among others) and inputs, which, in some cases, are not observable. Accordingly, computed values for securities and financial instruments may be inaccurate or subject to change, since the inputs used for specific models may be unavailable, particularly for illiquid assets or under scenarios of financial turmoil. In these cases, we will make assumptions and judgments in order to establish the fair value of certain instruments, which involves uncertainty and may translate into inaccurate estimates of actual results. In this regard, the main accounting items subject to risk of incorrect valuation include impairment of loans to customers and advances to banks, valuation of fixed-income securities and financial derivatives held for trading and hedge accounting, valuation and impairment of financial assets measured at fair value through other comprehensive income, and deferred tax assets and provisions for liabilities, among others. If our judgment, assumptions or models used in valuing these items are inaccurate, there could be a material effect on our results, funding requirements and capital ratios.
Likewise, in the normal course of business, we develop and utilize diverse models for risk management purposes, which rely on assumptions, judgment and statistical simulations, which could lead us to inaccurate conclusions and inadequate decision making. For these purposes, we also rely on inputs and information provided by third parties. For example, we assess the credit quality of our borrowers based on the information that is available in Chile regarding their indebtedness with the financial system. This includes information provided by the CMF, the local credit bureaus, databases we have created through the years and other public sources. Also, as mentioned in this annual report, a consolidated debtor registry that includes banking and non-banking loan providers in the form of credit card loans, leasing loans, factoring loans, and other credit obligations, particularly for individuals, is expected to be in place during 2026. Therefore, information on the indebtedness of our customers and non-customers with these lenders is not publicly available or consolidated with borrowings from banks as of the date of this annual report. As such, our assessment of customers for the scoring and provisioning processes may be based on partial, inaccurate or unreliable information on the borrowers’ creditworthiness, which could lead us to increase our expected credit losses in the future once complete information is fully available through the consolidation of customers’ indebtedness with all banking and non-banking lenders. In addition, we retrieve financial information, such as interest rates, exchange rates, swap spreads, credit spreads and option volatilities from extensively used financial terminals and well-known market data providers that, nevertheless, could be inaccurate or could misrepresent actual market conditions that may result in inadequate conclusions about financial exposures.
Moreover, the cessation or replacement of certain rates, market indices or benchmarks extensively used by financial markets and practitioners for valuation purposes, such as interest rates or foreign exchange rates indices, could also impact the accuracy of the estimates we include in our financial statements. An example of such changes was the transition from the London Interbank Offer Rate or LIBOR to the Secured Overnight Financing Rate or SOFR, which did not have a material impact on us. However, it is important to note that we cannot predict the future performance of SOFR and other alternative benchmarks that replaced LIBOR. Likewise, we cannot assure you that other similar reforms and changes or the establishment of alternative reference rates or any other reforms to these reference rates that may be enacted will not have a material impact on our results of operations in the future.
Market turmoil could result in negative adjustments to the fair value of our financial assets, which could translate into a material effect on our results or financial condition.
Over the last decade worldwide financial markets have been subject to stress coming from diverse fronts that has resulted in sharp temporary changes in interest rates and credit spreads, including those related to the effects of the COVID-19 pandemic, the banking crisis in the United States and Europe during the spring of 2023, and more recently, the impact of geopolitical conflicts arising in eastern Europe and the Middle East, and changes in the foreign policy of the United States, particularly in relation to migration, criminality and trade matters, all of which have also affected or could further affect the Chilean economy and the local financial market to different extents. We have material exposures to debt securities issued by the Chilean Government and the Chilean Central Bank and to other fixed-income securities issued by local and foreign banking and corporate issuers. Most of these securities are measured at fair value with direct impact either on our income statement (trading securities) or through other comprehensive income, while a remaining minor portion is measured at amortized cost. Therefore, these positions expose us to potential negative fair value adjustments in the short- or medium-term and to impairments in the long-term, if dramatic and unexpected changes in short- or long-term local and foreign interest rates and credit spreads take place. Any of these factors could have a material adverse effect on our results of operations and financial condition.
In general terms, in 2025, the Chilean financial market was marked by an overall decline in interest rates and lower volatility than in previous years. In particular, as inflation began to recede over the second half of the year, interest rates steadily decreased when compared to December 2024. In this context, the monetary policy interest rate decreased from 5.00% as of December 31, 2024 to 4.50% on December 31, 2025. Thus, in 2025, the Central Bank continued to deploy an easing monetary policy as expected, although at a slower pace than in 2024, mainly due to 12-month inflation records that remained above the Central Bank’s two-year target range for most of the year while only converging close to the midpoint of the target range by December 2025. Aligned with the evolution of the monetary policy interest rate, the average interest rates paid by Chilean banks on 90 to 360-day deposits decreased from 5.0% in December 2024 to 4.38% in December 2025. In the case of long-term interest rates, we witnessed an average decline over the year, as evidenced by interest rates of ten-year Central Bank bonds denominated in Chilean peso that decreased from 5.76% on average in December 2024 to 5.36% on average in December 2025, while interest rates for ten-year Central Bank bonds denominated in UF decreased from an average of 2.42% in December 2024 to 2.33% on average for the month of December 2025. The evolution of longer-term interest rates was marked by increased confidence of market agents in the Central Bank’s commitment to returning inflation to the neighborhood of 3% in the medium term, which resulted in a decrease in nominal interest rates and, to a lesser degree, in real interest rates. Based on these changes, the Chilean peso yield curve steepened by the end of the year as evidenced by an average term spread between interest rates of ten-year Central Bank bonds denominated in Chilean peso and the monetary policy interest rate that changed from -0.42% in 2024 to 0.8% in 2025 and from 0.61% in the month of December 2024 to 0.73% in the month of December 2025.
Globally, after a period of tightening monetary policies deployed across the globe to control inflationary pressures in both developed and developing economies, central banks continued easing their monetary stances in order to reactivate economic growth and avoid an increase of unemployment rates. Accordingly, the Federal Reserve of the United States decreased the reference interest rate from 4.50% on December 31, 2024, to 3.75% on December 31, 2025, while the European Central Bank took the monetary policy interest rate from 3.00% on December 31, 2024, to 2.00% on December 31, 2025. For longer terms, interest rates of U.S. ten-year bonds displayed an average downward trend in 2025 by decreasing from 4.6% on December 31, 2024, to 4.2% on December 31, 2025.
These factors had mixed impacts on the market value of financial assets for the entire industry and us, including financial instruments measured at fair value with direct impact on the income statement and those measured at fair value through other comprehensive income.
As of December 31, 2025, our fixed-income portfolio was composed of securities measured at fair value through profit or loss (including debt securities and other trading positions while excluding derivatives) amounting to Ch$3,523,961 million (approximately U.S.$3,914 million), financial instruments measured at fair value through other comprehensive income (including minor equity positions held by our securities brokerage subsidiary) amounting to Ch$3,560,203 million (approximately U.S.$3,954 million), and financial instruments measured at amortized cost (so not affected by changes in market factors in terms of fair value adjustments) for an amount of Ch$460,937 million (approximately U.S.$512 million), which are mostly concentrated in bonds and notes issued by the Central Bank and the Chilean Government. Likewise, as of the same date we maintained asset and liability balances in derivatives held for trading and derivatives hedge accounting measured at fair value of Ch$1,899,181 million (approximately U.S.$2,109 million) and Ch$2,378,551 million (approximately U.S.$2,642 million), respectively.
The approval of additional pension fund withdrawals by Congress, the introduction of further changes to the pension fund system, increased uncertainty regarding economic and social reforms to be implemented by Chile’s current or future administrations, increased and persistent fiscal deficit in Chile, significant changes in global trade as a result of the new tariffs foreign policy adopted by the current U.S. administration and potential retaliation of other countries in response to revised tariffs, changes in the U.S. foreign policy in relation to South America and Caribbean region, or the persistence of armed conflicts in eastern Europe and the Middle East or the sudden escalation of international conflicts, such as the events involving the United States, Israel, Iran and other countries of the Middle East which escalated in March 2026, market turmoil associated with the financial distress of local or global banking players and internal or external forces sustaining persistent inflation, among other factors, could cause further increases in short- and long-term local interest rates, which could have additional impacts on the market value of our fixed-income portfolio measured at fair value.
See also “Item 3. Key Information—Risk Factors—Risks Relating to our ADSs—Developments in international financial markets may adversely affect the market price of the ADSs and shares” and “Item 3. Key Information—Risk Factors—Risks Relating to Chile—Pandemics, epidemics and other health events will affect both the global and the Chilean economy, our business or results of operations and could affect our financial condition.”
Operational problems, errors, criminal events or terrorism or other events relating to force majeure may have a material adverse impact on our business, financial condition, and results of operations.
As all large financial institutions, we are exposed to many operational risks, including the risk of fraud by employees and outsiders, failure to obtain suitable internal authorizations, failure to properly document in-person and online transactions, equipment failures, new technologies (such as artificial intelligence), mistakes made by employees and natural disasters, such as earthquakes, tsunamis, wildfires, and floods.
Chile is located in one of the most seismically active regions in the world– the Nazca tectonic plate. Our results of operations can be materially affected by natural disasters, particularly in locations where a significant portion of our loan portfolio is composed of real estate loans. These force majeure events related to nature include, but are not limited to, earthquakes, tsunamis, floods, extreme heat, droughts, increase in the sea level and storms may cause thorough damage which could impair the asset quality of our loan portfolio and our collateral as well as a material adverse impact on the economy of the affected region and therefore on our bank.
We could also be affected by operational disruptions associated with intentional or unintentional mass employee absence due to social unrest, demonstrations, street riots, transportation or energy services interruptions, massive strikes or strikes at an industry level, massive epidemic or pandemic outbreaks, among others.
In addition, given recent changes in the way we provide services to our customers, which have resulted in a wide array of digital solutions ranging from refurbished websites to improved mobile applications for smartphones and tablets, we are increasingly dependent on the stability of on-site servers, remote servers or cloud servers in order to provide timely and high standard services. Disruptions or interruptions in connectivity or operational disruptions could lead to a deterioration in our service quality indicators and, more specifically, customers complaints, legal actions, and reputational damage. Similarly, as the use of a wide array of technological solutions—including AI, distributed ledger technology (DLT), blockchain, and quantum computing—becomes common, we may be increasingly exposed to risks related to flawed or poor algorithms, false inferences or outputs, heightened legal and regulatory challenges and inadvertent disclosure of proprietary or confidential information. Although these technological solutions are expected to improve efficiency, transparency and traceability, they also translate into technological and operational risks, which eventually could negatively affect the integrity and resilience of operations. Also, there is no certainty that we will be able to adopt new technology to replace critical systems and applications that become obsolete. In this regard, in the migration process of legacy systems to hybrid or fully distributed environments, we may face transitional, technological and integration difficulties that could affect system resilience, data integrity and cybersecurity. These factors could adversely affect our ability to deliver critical services, to comply with regulatory requirements, and to maintain the continuity of our operations. Although we strive to continually improve the stability of our services while reinforcing protocols to overcome new technological challenges that may impact our operations, we cannot assure you that specific events that could affect our results of operations, financial condition, or the value of our shares and ADSs, will not occur.
Furthermore, we may be exposed to criminal events, terrorist attacks or rioting that could result in physical damage to our buildings (including our headquarters, offices and automatic teller machines (“ATMs”)) and/or injury to customers, employees, providers and others. Likewise, we are exposed to internal and external fraud actions that may produce an increase in operational losses. Although we maintain an operational control model that relies on a comprehensive operational risk policy, trained staff and world-class technological resources that have been enhanced over the last years, as well as comprehensive contingency plans and security procedures, there can be no assurances that operational problems, errors, criminal events or terrorist attacks will not occur and that their occurrence will not have a material adverse impact on our results of operations, financial condition and the value of our shares and ADSs.
The use of AI, machine learning and data-driven models and adoption of new technologies may increase our exposure to operational, regulatory, legal, reputational, and financial risks, which could adversely affect our business, results of operations, and financial condition.
We use and expect to expand our use of AI, machine learning and data-driven models in customer interactions, micro-credit assessment, risk management, financial research and analysis, internal data processing, fraud detection, and support tools for commercial decision making, among other tasks. Although the design, development, implementation, and ongoing operation of these technologies are accompanied by appropriate usage protocols and human oversight, they may result in risks and challenges that are difficult to anticipate or fully mitigate. In this regard, these technologies may produce inaccurate, incomplete, biased, inconsistent, or inappropriate outputs due to limitations in data quality, failures in model design, ineffective human oversight, incomplete training processes, incorrect underlying assumptions, or abrupt changes in the economic, business or social environment. As such, weaknesses in data governance, insufficient data quality controls, biased or unrepresentative datasets, or unauthorized access to or use of data may impair AI tools and model’s performance. Accordingly, the use of AI tools and models is expected to rely on effective model risk management and data governance, independent validation, and ongoing monitoring. If these controls are not effective, if model limitations are not identified in a timely manner, or if the AI tools we use are alleged or determined to be unreliable, insufficiently explainable, unfair, or otherwise inconsistent with applicable legal, regulatory, or ethical expectations, we could experience incorrect decision-making, model failures, obsolescence, compliance issues, customer dissatisfaction and loss of trust, failure to comply with personal data and consumer protection requirements, financial losses, deterioration of our competitive position, increased operational risk, potential cybersecurity breaches, increased litigation and reputational risk.
Also, the development and deployment of AI technologies may increase our reliance on third-party vendors, cloud providers, and specialized technology and consultancy firms. Concentration among service providers, deficiencies in third-party risk management or controls, data handling failures, or changes in contractual terms may disrupt our operations, constrain our ability to use certain AI capabilities, or increased operating expenses. In addition, AI techniques may be used by cybercriminals to facilitate fraud, cyberattacks, identity theft, or disinformation, which may increase the frequency, sophistication, or impact of such incidents.
Furthermore, it is important to note that the regulatory and supervisory framework applicable to AI is in continuous evolution and may change significantly in the coming years. Current and future laws, regulations, supervisory guidance, and enforcement actions relating to AI, machine learning data usage, model governance, algorithmic accountability, and ethical standards may impose additional compliance requirements or result in more sophisticated oversight expectations. These developments could translate into restrictions or specific conditions for the use of certain technologies or data, increased complexity in the adoption or implementation of new technologies, higher operating expenses related to compliance, litigation, remediation measures, fines, penalties, or other supervisory requirements, together with increased capital expenditures aimed at reinforcing cybersecurity protocols and bolstering data handling capabilities.
See also “Item 3. Key Information—Risk Factors—Risks Relating to our Operations and the Chilean Banking Industry—Cybersecurity events could negatively affect our reputation or results of operations and may result in litigation”; “Item 3. Key Information—Risk Factors—Risks Relating to our Operations and the Chilean Banking Industry—Operational problems, errors, criminal events or terrorism or other events relating to force majeure may have a material adverse impact on our business, financial condition, and results of operations” and “Item 4. Information on the Company—History and Development of the Bank—Technological Projects.”
Cybersecurity events could negatively affect our reputation or results of operations and may result in litigation.
We have access to large amounts of confidential financial information and hold substantial financial assets belonging to our customers as well as to us. In addition, we provide our customers with online access to their accounts. Customers can transfer substantial financial assets in Chile and abroad through electronic channels, while purchasing goods or withdrawing funds with credit and debit cards issued by us in Chile and abroad. Among the most significant cyber-attack risks that we are constantly facing are internet fraud and loss of sensitive information, both from our customers and ourselves. Loss from internet fraud occurs when cyber criminals extract funds directly from customers’ or our accounts using fraudulent schemes that may include internet-based fund transfers or fraudulent charges in credit and debit cards. We are also exposed to cyber-attacks, hacking and other cybersecurity incidents in the normal course of business. More recently, given the fast development and spreading of AI tools, new and increasingly sophisticated and effective cybersecurity threats are constantly arising, which poses a challenging environment for the development of new digital-based solutions for customers and the introduction of new technologies for middle- and back-office tasks. Thus, as a financial institution, we are under a constant threat of suffering losses due to these reasons. In addition, our risk and exposure to these matters remains heightened because of the evolving nature and complexity of these threats from cybercriminals and hackers, the increased reliance on new technologies (including new developments in AI), our plans to continue to provide and enhance our internet banking and mobile banking channels, and our plans to develop additional remote connectivity solutions to serve our customers. Accordingly, cybersecurity is a material risk for us.
There has been an increased level of attention focused on cyber-attacks against large corporations and financial services providers like us, that include, but are not limited to, obtaining unauthorized access to digital systems for purposes of misappropriating cash, other assets or sensitive information, corrupting data or causing operational disruptions. Cybersecurity incidents, such as computer break-ins, phishing, identity theft and other disruptions, could negatively affect the security of information stored in and transmitted through our computer systems and network infrastructure. Subsequently, this may result in significant liability to us in excess of insurance coverage, which may carry low coverage limits, and may cause existing and potential customers to refrain from doing business with us. Additionally, cyber-attacks on our network or other systems could have a material adverse effect on our business and results of operations due to financial losses, losses of sensitive information, interruption or delays in our business and operations, regulatory fines, reimbursement or other compensation costs, compliance costs and reputational damage, among other things.
Since we suffered a cyber-attack in 2018, we have continued to enhance our data security and IT infrastructure and have consistently enhanced our cybersecurity protocols, infrastructure, and access-control to our networks, while simultaneously improving our technological capabilities and human resources on the detection and management of high-risk threats. We have worked on creating a corporate culture on cybersecurity matters, establishing cybersecurity guidelines for providers, and enhancing internal channels to report cybersecurity threats. Likewise, we have made advances in cybersecurity standards for datacenters and the cloud while developing new cybersecurity capabilities. We continued to reinforce the corporate culture on cybersecurity while enhancing measures and means to enhance confidentiality of our customers’ private information. Furthermore, in 2023, we deployed an “Awareness Program” for employees, customers, suppliers and the overall community. In 2024, we continued to deploy the main pillars of our cybersecurity strategy, which become increasingly important in the context of our digital strategy and the increased use of AI. Thus, we developed and promoted internal channels to facilitate the reporting of suspicious cybersecurity threats by our personnel through our corporate Awareness Program. Such measure resulted in a 42% increase in the number of threats reported in 2024 compared to 2023.
In 2025, we focused on strengthening measures countering identity theft and cybersecurity risk in response to new emerging threats. The measures implemented included access control for human and non-human identities; protection of customer and employee data; and comprehensive risk management throughout the ecosystem, including the supply chain. In addition, we managed to: (i) optimize the technological architecture to support increased volumes of information, (ii) reinforce the vulnerability management process through secure development practices and process automation, and (iii) include analytical models to prioritize critical actions. Likewise, in 2025, the Awareness Program continued to promote practices aimed at strengthening the culture of security and early detection of threats, which enabled us to maintain the effectiveness of the reporting process and ensure that employees have the necessary tools to identify and report incidents in a timely manner. In this regard, during 2025 the reporting channels remained effective, as demonstrated by a real threat rate of 32% achieved over the total amount of potential threats reported. Finally, during fiscal year 2025, there were no cybersecurity incidents affecting our operations or customers. Even though we have not experienced any material losses related to cybersecurity and we have been working to prevent them, we cannot assure you that we will not suffer additional losses in the future related to these kinds of events.
The occurrence of any cyber-attack or information security breach could result in material adverse consequences to us, including damage to our reputation and the loss of confidence from customers. We could also face litigation or additional regulatory and public scrutiny. Litigation or regulatory actions in turn could lead to significant liability or other sanctions, including fines and penalties or fund reimbursements to customers adversely affected by any security breach. As mentioned above, successful attacks or systems failures at our bank or at other financial institutions could lead to a general loss of customer confidence in financial institutions, including us. In addition, we depend on a variety of internet-based data processing, communication, and information exchange platforms and networks, including the use of both on-premises and cloud servers. We cannot assure you that all our systems are entirely free from vulnerability. Additionally, we enter into contracts with several third parties to provide our customers with data processing and communication services. Therefore, if information security is breached, or if one of our employees or external service providers’ breaches compliance procedures, information could be lost or misappropriated, which may affect our results of operations, damage others or result in potential litigation. Further, due to the high volume of transactions we process, the large number of customers, partners and counterparties, and the increasing sophistication of malicious actors, a cyber-attack could occur and persist for an extended period of time without detection. We expect any cyber-attack investigation to take substantial amounts of time, and that there may be extensive delays before we obtain full and reliable information. Although we have substantially increased measures to address cybersecurity during the last years and, with the help of service providers, intend to implement security technology devices and establish operational procedures to prevent such damage from time to time, we cannot assure you that these security measures will be successful.
On April 8, 2024, Law No. 21,663 (Cybersecurity Framework Law), which establishes the general regulatory environment and guidelines for private and public entities, was published in the Chilean Official Gazette.
For further information, see “Item 4. Information on the Company—Regulation and Supervision—Reporting of Operational and Cybersecurity Incidents and Cybersecurity Framework Law.”
As a financial institution, we are subject to reputational risk that could materially affect our results of operations or financial condition.
Corporate reputation is a crucial competitive advantage for us, as it allows us to attract and retain customers, appeal to investors, and avoid employee attrition. Also, reputation is a key element in banking since access to funding is driven by the confidence of depositors and the opinion of ratings agencies on the value of our franchise. Therefore, any disreputable event, including employee misconduct, legal proceedings, failure to comply with regulatory requirements, regulatory sanctions, failure to deliver minimum standards of service quality, unethical behavior by our staff or involvement in political issues or public scandals (or gossip related thereto), complaints filed by customers or non-customers, failure to detect or prevent illicit activities by our customer through the use of the products or services we provide, failure to comply with anti-money laundering regulatory guidelines, fake news or alleged issues about us, our senior management, members of our board of directors, or the projects, business activities or customers financed by us, or our operations in social media could damage our reputation and produce significant harm to our results of operations or financial condition. Furthermore, our reputation is highly aligned with the reputation of the banking industry in which we participate and, therefore, actions by other providers of financial services or the banking industry could also harm our own reputation.
Similarly, the ability to manage potential conflicts of interest has become an increasingly important factor for our business given our widespread operations in many economic sectors with diverse third parties. Accordingly, the failure to address –or even the perceived failure to address– conflicts of interest could affect the willingness of customers and investors to work with us or could lead to legal actions against us. To address and avoid these potential events, we strive to improve our corporate governance standards by detecting potential failures and adopting world-class principles and procedures. Nevertheless, we cannot assure you that we will not face reputational events in the future that could harm our prospects or the value of our franchise. For more information on corporate governance, see “Item 6. Directors, Senior Management and Employees—Board Practices.”
Despite our policies and procedures to detect or prevent money laundering and other financial crime activities, we may not be able to fully detect them or on a timely basis.
We are subject to many anti-money laundering (“AML”), anti-terrorism, anti-bribery and corruption laws and regulations. Furthermore, due to our relationship with Citigroup, we have implemented similar AML policies that such bank has implemented which, in cases, are stricter than those applicable to Chilean banks.
We constantly update our policies and procedures for the purpose of timely detection and the prevention of the use of our banking network for money laundering and other criminal activities. Nevertheless, we are aware that new technologies, such as cryptocurrencies and innovative payment methods, could limit our ability to track the movement of funds.
Many threats can never be fully eliminated, and there will be instances where we may be used by other parties to engage in money laundering and other illegal or improper activities. Moreover, we rely on our employees to assist us by spotting such activities and reporting them, and our employees have varying degrees of experience in recognizing criminal tactics and understanding the level of sophistication of criminal organizations. Also, we conduct AML training programs for our employees on a regular basis to enable them to adequately detect and report suspicious transactions to our AML team, to allow conduct subsequent proper investigation from law enforcement agencies. If we are unable to apply the necessary scrutiny and oversight, or to fully comply with applicable laws, regulations and expectations, our regulators and relevant law enforcement agencies have the ability and authority to impose significant sanctions, fines and harsh penalties on us.
There are laws, regulations and policies that require us to, among other things, conduct full customer due diligence (including, but not limited to, sanctions and politically-exposed person screening), keep our customer, account and transaction information updated and, at the same time, implement and develop an array of policies and procedures to prevent the facilitation of financial crime. In addition, we have policies and procedures to reasonably assure compliance with legal requirements and policies; however, our ability to comply thereto depends on improving detection and reporting capabilities and reducing variation in control processes and oversight accountability. The latter requires us to implement and enhance our business with effective controls and monitoring. We are also aware that financial crime is permanently evolving and is subject to increasingly stringent regulatory oversight and focus. This requires proactive and adaptable responses from us to deter threats and criminality effectively and in a timely fashion. On September 1, 2024, certain provisions of Law No. 21,595 regarding criminal liability for legal entities became effective, which widened the list of potential crimes that may subject companies to liability. For more information on this matter see “Item 4. Information on the Company—Regulation and Supervision—Economic Crimes Law.” In 2025, to address the challenges associated with Law No. 21,595, we continued strengthening the Bank’s Crime Prevention model and focused on dissemination, training and awareness-raising on risky behavior and compliance with internal guidelines in order to ensure a comprehensive understanding of employees on these matters. Also, as a result of the changes introduced by Law No. 21,595, which replaced the optional “certification” of the Crime Prevention Model with “independent periodic assessments” as an integral part of the model, we carried out a comprehensive review of the Bank’s Crime Prevention model, which enabled us to reaffirm its adequacy in terms of implementation and operation.
The reputational damage to our business and brand could be severe if we were found to have breached AML, anti-bribery and corruption or sanctions requirements. Our reputation could also suffer if we are unable to protect our customers’ bank products and services from being used by criminals for illegal or improper purposes. Any such risks could have a material adverse effect on our results of operation, financial condition and prospects.
Risks Relating to Chile
Our growth and profitability depend on the level of economic activity in Chile.
Our core business and transactions are with customers doing business in Chile. Accordingly, our ability to grow our business volumes and results of operations, as well as enhance our financial condition, in general, depends on the dynamics of the Chilean economy or the effects of economic developments in other countries affecting Chile, and specific macroeconomic variables such as inflation, unemployment, interest rates, consumption and private investment. In the past, global events, such as the 2008 subprime crisis and the COVID-19 pandemic, have dramatically affected economic growth in developed countries, as well as in Chile where a subsequent slowdown in the local banking industry was observed due to lower levels of consumption and deteriorated asset quality prompted by unemployment and financial stress experienced by certain industries. After experiencing the shaking effects of the COVID-19 pandemic, the Chilean economy showed a strong recovery in 2021. In 2022, the Chilean economy followed similar trends when compared to the global economy, characterized by a moderation in GDP growth, higher inflation, and fiscal and monetary policy adjustments.
In 2023, the Chilean economy continued to slow down steadily and experienced a 0.7% GDP growth as compared to 2022. This performance was primarily driven by an annual contraction of 4.7% in household consumption and a modest expansion of 0.3% in private investment, following the adjustment process of the economy after a period of significant growth in 2021. The decrease in household spending was primarily produced by: (i) tightening monetary policy deployed by the Central Bank to control inflation that resulted in higher-than-normal interest rates throughout the year, as evidenced by a monetary policy interest rate that evolved from 11.25% in December 2022 to 8.25% in December 2023, and (ii) the extinction of the liquidity excess seen in the economy in previous years, as a result of pension fund withdrawals during the COVID-19 crisis, which mostly affected individuals. In a similar fashion, the contraction in private investment was primarily prompted by a business sentiment that remained in negative territory all through 2023, as a result of uncertainties generated by: (i) the second constitutional process that concluded with a national referendum held on December 17, 2023 by which the Chilean population rejected the new constitution draft, (ii) diverse reforms sponsored by the current administration that pursue to introduce material changes in key economic fields, such as the pension system, the healthcare system and the tax system, (iii) lengthy approval processes for large-scale investment projects, and (iv) interest rates that remained high, which increased financing costs for projects and capital expenditures. On the other hand, fiscal spending recorded a moderate annual increase of 2.3% in 2023, as a result of the government attempts to improve the fiscal balance after periods of higher-than-expected spending intended to cover social needs. All of these factors were coupled with an improved balance of trade (exports minus imports).
In 2024, the Chilean economy performed in line with its growth potential (as measured by the Finance Ministry) by recording a 2.8% GDP expansion, driven by a recovery in household consumption that increased by 1.1% on an annual basis, an annual expansion of 2.8% in fiscal spending, and an improved trade balance due to a 7.2% increase in exports in 2024 compared to a 2.1% increase in imports. Annual consumption improvement is consistent with: (i) an inflation rate that is gradually returning to the Central Bank’s two-year target range, though staying slightly above the upper limit, as reflected by a 12-month CPI variation of 4.5% in 2024, (ii) lower short-term borrowing costs associated with the easing cycle the Central Bank continued to deploy during the year by lowering the reference interest rate from 8.25% in December 2023 to 5.0% in December 2024, and (iii) an improved labor market as evidenced by an unemployment rate that averaged 8.5% in 2024 compared to 8.7% in 2023. These positive figures were to some degree offset by an annual contraction of 1.6% in private investment, which was particularly caused by a marked decline in capital expenditures in machinery and equipment, due to: (i) a business sentiment that remained pessimistic in relation to the local economic outlook, as a result of the uncertain outcome of pending reforms, such as in the pension fund system and the tax system, (ii) the deteriorating financial condition of some companies in the real estate and construction sectors, given particular dynamics affecting these industries, such as long-term interest rates that remained above the levels seen in the 2010 decade and restricted credit access for individuals, the end of certain tax benefits for residential construction and soaring costs due to the impact of cumulative inflation.
During 2025, even though the Chilean economy showed some signs of recovery and normalization of key market drivers, particularly by the end of the year, GDP only grew by 2.5%, aligned with growth potential. Unlike previous years, private investment (gross fixed capital formation) performed above expectations by growing 7.0% in real terms. Additionally, household consumption and fiscal spending grew by 2.7% and 3.0%, respectively, and the trade balance decreased as a result of a 10.5% increase in imports and a 4.6% increase in exports. According to the Central Bank, growth in private investment was primarily steered by specific large-scale projects undertaken in the mining and the energy sectors rather than benefiting all industries and some positive externalities resulting in more dynamism in the construction sector and the engineering services industry. Despite certain positive indicators, except for the mining industry, overall business sentiment in the local economy remained negative as measured by the Monthly Business Sentiment Index “IMCE” (Índice Mensual de Confianza Empresarial) and reported by the Central Bank. The IMCE results are partly explained by economic and political uncertainty, and delays in the approval of large-scale processes. On the other hand, the expansion in private consumption was due to: (i) the decline in the inflation rate that –measured as CPI variation– reached 3.4% in 2025, which benefits individuals’ purchasing power, (ii) a decline in borrowing costs, mainly due to the decrease in the monetary policy interest rate from 5.0% in December 2024 to 4.5% in December 2025, (iii) an unemployment rate that, instead of increasing in 2025, remained at the average level of 2024, and (iv) household expectations on the economic outlook that, despite remaining negative, displayed a steady upward trend, particularly over the second half of 2025.
Additionally, social and political developments occurring in Chile could affect both consumer confidence and business sentiment, which may in turn result in lower economic growth potential in the long-term, as well as subdued economic activity in medium-term and lowered demand for loans and banking services. For example, the inability to reach political consensus on addressing diverse issues, including: (i) reforms affecting crucial economic and social fields, (ii) an effective control on immigration and criminality, and (iii) an adequate balance between environmental care and economic growth that permits clearer and swifter approval processes for high-impact investment projects, among others, may result in increased uncertainty that could translate into higher long-term interest rates, higher inflation, economic slowdown and increased unemployment, which could affect our cost of funds, labor costs, net interest margins, results of operations, business volumes and financial condition.
Likewise, international conflicts or changes in foreign policy by leading economies could affect the Chilean economy, one of the most open in the world. In that regard, disruptions in global trade resulting from measures adopted by the current U.S. administration, retaliatory measures by the affected countries, the continuation of conflicts in Europe and the Middle East, or the sudden escalation of international conflicts such as the events involving the United States, Israel, Iran and other countries of the Middle East which escalated in March 2026 could result in lower economic growth in Chile that may adversely impact the dynamism of the banking industry, our business growth and results of operations.
Therefore, we cannot assure you that the local economy will grow in the coming years, as it has in the past, or that developments affecting the Chilean economy and the local banking industry will not materially affect our business, financial condition or results of operations. For more information, see “Item 5. Operating and Financial Review and Prospects—Trend Information,” “Item 3. Key Information—Risk Factors—Pandemics, epidemics and other health events will affect both the global and the Chilean economy, our business or results of operations and could affect our financial condition” and “Item 3. Key Information—Risk Factors— Developments in international financial markets may adversely affect the market price of the ADSs and shares.”
Any downgrade in Chile’s or our credit rating could increase our cost of funding, affecting our interest margins, results of operations and profitability.
Our credit ratings determine the cost and the terms upon which we are able to obtain funding in the ordinary course of business. Rating agencies regularly evaluate us by considering diverse factors, including our financial strength, capital adequacy, the business environment and the economic backdrop in which we operate. Thus, methodologies used by rating agencies evaluate Chile’s sovereign debt ratings when determining our ratings. In addition, from time to time, rating agencies review their methodologies, which in some cases could result in adjustments to Chile’s sovereign debt prevailing credit ratings or those of our debt. In March 2021, Standard & Poor’s Ratings Service (“S&P”) downgraded Chile’s sovereign credit rating from “A+” to “A” while modifying the credit outlook from negative to stable due to the expected negative effects of the COVID-19 pandemic and social demands on Chile’s fiscal deficit in the long-run. Given this rating action S&P also downgraded four local banks (excluding us) by one notch, while maintaining the negative outlook for the whole banking industry (including us), except for Banco Estado (a state-owned bank) that received a stable outlook. However, in June 2021, S&P improved the outlook for two banks from negative to stable, excluding us. Moreover, in September 2022, Moody’s downgraded Chile’s sovereign credit rating from “A1” to “A2” with stable outlook, which also led Moody’s to downgrade three local banks (including us) by one notch from “A1” to “A2,” though improving our intrinsic (BCA) rating from “Baa1” to “a3.” In October 2023, S&P kept the Chile’s sovereign credit rating at “A,” but revised the outlook from stable to negative, due to the potential effect of weaker political consensus on the country’s political and economic agenda on economic growth potential and social welfare as well as fiscal and external balances. Following this rating action, S&P revised the outlooks for us and another Chilean banks from stable to negative while maintaining credit ratings. On the other hand, during 2023, 2024 and 2025, Moody’s maintained Chile’s sovereign credit rating at A2 and outlook unchanged as stable, also keeping ratings and outlooks for local banks. On October 15, 2024, S&P maintained the credit rating for Chile’s sovereign debt at “A” while improving the outlook from negative to stable, which consequently resulted in an improved outlook for two local banks (excluding us). Subsequently, on October 28, 2024, S&P revised the outlook on us and four other local banks from negative to stable while reaffirming ratings. On October 23, 2025 S&P reaffirmed ratings and outlooks for Chile’s sovereign debt. Also, during 2025 S&P reaffirmed credit ratings and outlooks for all the Chilean banks under coverage (including us), except for one local bank that received an outlook improvement from stable to positive. While Chile’s current long-term debt credit ratings remain investment grade, these credit ratings may deteriorate further and adversely affect our credit rating.
Any downgrade in our debt credit ratings could result in higher borrowing costs for us, while requiring us to post additional collateral or take other actions under some of our derivative and other contracts and limit our access to debt and capital markets. All of these factors could adversely impact our commercial business by affecting our ability to: (i) sell or market our products, (ii) issue long-term debt in Chile or abroad, (iii) retain customers who need minimum ratings thresholds to operate with us, (iv) maintain derivative contracts that require us to have a minimum credit ratings, and (v) enter into new derivative or other contracts, which could impact our market risk profile, among other effects. Any of these factors could have an adverse effect on our liquidity, capital adequacy, results of operations and financial condition.
Due to: (i) the volatility in the financial markets and concerns about the soundness of developed and emerging economies, (ii) potential changes to be introduced in the fiscal policy or government spending in the short- and the long-term by the current or future government administrations in Chile, (iii) further social demands leading to increasing fiscal spending, (iv) unwillingness or inability to reach political consensus on economic and social reforms in a timely and effective manner, (v) deterioration in Chile’s terms of trade following the evolution of energy and commodity prices, (vi) reforms to be proposed or introduced by the current or future administrations to modify the characteristics of the current economic and financial system, (vii) the impact of the revised foreign trade policy by the current United States administration on Chilean exports, and (viii) the effects that current or potential geopolitical worldwide conflicts and global trade tensions may have on the local economy, we cannot assure you that rating agencies will maintain our and Chile’s sovereign debt current ratings and outlooks.
Changes in tax law could adversely affect our net income and could also result in higher taxes on distributions to our foreign shareholders.
Over the last decade, there have been various changes in, and attempts to modify, the Chilean tax regime, which resulted in reforms enacted in 2014, 2016, 2020, and 2022. Among other things, these reforms have: (i) changed the local tax system from an integrated to a semi-integrated one, (ii) increased the statutory corporate tax rate for companies to 27%, (iii) risen taxes for higher income individuals through new tax brackets and additional property taxes, (iv) reduced taxes for SMEs, (v) levied VAT on services that were not formerly taxed, such as those provided online, (vi) removed or limited certain tax exemptions, and (vii) strengthened tax enforcement in order to reduce tax evasion and tax avoidance. Some of these elements also affected the taxes paid on dividend distributions by local and foreign investors.
The current Chilean administration announced its intention to introduce further temporary or permanent modifications to the Chilean tax system to promote private investment and economic growth in Chile over the medium term. These changes are part of a broader package that also includes non-tax matters, which was presented by the Finance Ministry to Congress through the “National Reconstruction and Economic & Social Development” bill on April 22, 2026 for discussion. Among the main topics related to the Chilean tax system, this bill includes: (i) a gradual reintegration of the Chilean tax system over a four-year period to allow companies’ shareholders to use 100% of the taxes paid by the company as a tax credit for personal taxation purposes, instead of the current 65% tax credit permitted under the semi-integrated regime for larger companies, (ii) a gradual reduction of the statutory corporate tax rate for companies over a four-year period, from the current 27% to 25.5% for fiscal year 2027, 24.0% for fiscal year 2028, and 23.0% for fiscal year 2029 onwards, (iii) a substitutive tax rate of 10% on the distribution of retained earnings accumulated in the Fund of Taxable Earnings (“Fondo de Utilidades Tributables”) for which no associated tax credits may be claimed, (iv) the elimination of the current 10% flat tax rate levied on capital gains from trading of highly-traded stocks, (v) tax invariability over a 25-year period for investment projects above U.S.$50 million, (vi) the introduction of a tax benefit for companies –regardless of their size– aimed at promoting formal employment through a tax credit that may be deducted from monthly provisional tax payments or VAT payments, of up to 15% of salaries ranging from UTM 7.8 to UTM 12.0 (approximately Ch$542,428 to Ch$834,504 as of December 31, 2025), (vii) a VAT exemption for 12 months on the sale of new properties in order to reactivate the construction sector, (viii) extension of the existing tax exemption on rental income from up to two properties, by introducing a flat tax rate of 5% on rental income derived from a third property, (ix) a temporary reduction of 50% in taxes levied on donations, and (x) a temporary 10% tax rate levied on the repatriation of funds, investments and savings held by Chilean taxpayers abroad for 12 months in order to promote private investment in the country. As of the date of this annual report, this bill is in the very first legislative stage and, as such, we cannot yet determine whether all or part of the topics covered by this bill, if enacted, would have a material effect on our business, results of operations or financial condition. Nevertheless, should the reduction of the statutory corporate tax rate be passed, we would expect one-time impacts on our income tax expenses during the years of gradual adoption as a result of our deferred tax assets and liabilities, which cannot be reasonably estimated at this time.
For more information on the main topics addressed by these reforms see “Item 4. Information on the Company—Regulation and Supervision— Modifications to Tax Legislation” and “Item 10—Additional Information—Taxation—Chilean Tax Considerations.”
Climate change presents various financial and non-financial risks to us and our customers that are not directly observable and, therefore, are difficult to mitigate in advance.
Climate change presents various financial and non-financial risks to us, our customers, business counterparties and suppliers. It poses both immediate and long-term risks, which are expected to increase over time. Climate risks may be of two types: (i) physical risks (related to the direct physical effects of climate change), and (ii) transition risks (related to regulatory, market, technological, stakeholder and legal changes from a transition to a low-carbon economy).
Physical risks from climate change include acute risks, such as more intense storms and floods, as well as consequences of chronic changes in climate, like rising sea levels, prolonged droughts, unexpected floods, wildfires, systemic changes to geographies and any other resulting in population migration. Such physical risks could have adverse financial, operational, and other impacts on us, both directly on our infrastructure, business activity and operations, and indirectly as a result of impacts to our customers, suppliers and other counterparties. These impacts may include destruction, damage or impairment of properties, infrastructure and other fixed-assets, business continuity breaches, massive staff absence due to inability to reach their workplace, disruptions to supply chains, reduced availability of goods or increased cost of insurance policies. Physical risks can also impact the credit risk of our loan portfolio due to damage to customers’ assets pledged as collateral to us, adverse effects on the credit condition of our investment portfolio’s counterparties or increased liquidity risk if physical destruction produces liquidity shortage in capital markets due to disruptions in communication networks, among other sources of financial risks.
Transition risks may arise from changes in regulations or market preferences toward low-carbon industries or sectors, which in turn could have negative impacts on asset valuation, results of operations or our customers’ reputation that may negatively affect their financial condition and payment capacity while affecting our own reputation for doing business with them. Failure to adequately recognize transition risks in developing and executing our business strategy could lead to market share loss, decreased revenues and higher expected credit losses and increased cost of funds. Moreover, banking regulators and others are increasingly focusing on the issue of climate risk at financial institutions, both directly and in relation to their customers, which could translate in increased regulatory requirements on diverse matters. Legislative and regulatory changes and uncertainties regarding climate-related risk management and disclosures are likely to result in higher risks and costs for us from the regulatory, compliance, reputational and other perspectives.
Even as some regulators seek to require disclosure of climate-related information, our ability to comply with such requirements and conduct more robust climate-related risk analyses may be hampered by lack of information and reliable data. Data on climate-related risks is still limited in availability, often based on unverified figures or sources, collected and reported on a lag, and variable in quality. Likewise, since modeling capabilities to analyze climate-related risks and their impacts to financial institutions are in first stages of development, and to date those tools are still under continuing improvement and revision, the severity of the impacts of climate change on banking business may not be predictable and, therefore, may challenge the effectiveness of our risk management strategies to mitigate our climate risk exposure. Thus, our failure to detect the aforementioned conditions or to identify other risks related to climate change could materially affect our financial condition, business and results of operations.
Currency fluctuations could adversely affect our results of operations, the value of our ADSs and any distributions on the ADSs.
The Chilean Government’s economic policies and any future changes in the value of the Chilean peso with respect to the U.S. dollar could affect the dollar value of our common stock and our ADSs. Given the floating exchange rate regime that exists in Chile, the Chilean peso has been subject to large fluctuations in the past and this trend could occur again in the future. According to information published by the Central Bank (“Dólar Observado,” which differs from exchange rate of accounting representation or market exchange rate), between December 31, 2024, and December 31, 2025, the value of the U.S. dollar relative to the Chilean peso decreased by approximately 8.2%, as compared to the increase of 12.2% recorded in the period from December 31, 2023 to December 31, 2024. Chilean trading in the shares underlying our ADSs is conducted in Chilean pesos. Cash dividends associated with our shares of common stock are received in Chilean pesos by the depositary, which then converts such amounts to U.S. dollars at the then-prevailing exchange rate for making payments in respect of our ADSs. If the value of the U.S. dollar increases relative to the Chilean peso, the dollar value of our ADSs, and any distributions to be received from the depositary, will decrease. In addition, the depositary will incur customary currency conversion costs (to be borne by the holders of our ADSs) in connection with the conversion and subsequent distribution of dividends or other payments. For more information, see “Item 10. Additional Information—Exchange Controls.”
Since we manage assets and liabilities denominated in foreign currency, our results of operations may be affected by fluctuations in the exchange rates between the Chilean peso and the U.S. dollar, or the Chilean peso in relation to other currencies, despite our policy and Chilean regulations related to the general avoidance of material exchange rate mismatches. In order to reduce the effect of exchange rate mismatches, we enter into foreign exchange derivative transactions, including both hedge accounting derivatives and trading derivatives not classified as hedge accounting, that hedge most of our exposure to foreign currency. As of December 31, 2025, our foreign currency-denominated liabilities and Chilean peso-denominated liabilities, which contain repayment terms linked to changes in foreign currency exchange rates, were exceeded by our foreign currency-denominated assets and Chilean peso denominated assets, which contain repayment terms linked to changes in foreign currency exchange rates, by an amount of Ch$10,495 million (amounting to approximately U.S.$11.7 million as of December 31, 2025), or 0.28% of our paid-in capital and reserves.
We may decide to change our policy regarding exchange rate mismatches. Regulations that limit such mismatches may also be amended or eliminated by regulatory institutions. Higher exchange rate mismatches will increase our exposure to the depreciation of the Chilean peso, and any such depreciation may impair our capacity to service foreign-currency obligations and may, therefore, materially, and adversely affect us, our financial condition and results of operations. Additionally, the economic policies of the Chilean Government and any future fluctuations of the Chilean peso, with respect to the U.S. dollar, could adversely affect our financial condition and results of operations.
Chile has corporate disclosure standards different from those you may be familiar with in the United States.
Chilean disclosure requirements for publicly listed companies differ from those in the United States in some significant respects. In addition, although Chilean law imposes restrictions on insider trading and price manipulation, the Chilean securities markets are not as highly regulated and closely supervised as the U.S. securities markets. Accordingly, the information available to you regarding our corporation will not be the same as the information available to shareholders of a U.S. company. For more information, see “Item 16G. Corporate Governance.”
Our exemption as a “foreign private issuer” from certain rules under the U.S. securities laws results in less information about us being available to investors than for U.S. companies.
As a “foreign private issuer” in the United States, we are exempt from certain rules under the Exchange Act, including certain disclosure obligations and procedural requirements for proxy solicitations under Section 14, the “short-swing” profit recovery provisions of Section 16, the requirement to file periodic reports and financial statements as frequently or as promptly as U.S. domestic issuers, and compliance with Regulation FD. In June 2025, the SEC issued a concept release soliciting public comment on potential changes to the definition of “foreign private issuer” under U.S. securities laws. If we were to lose our foreign private issuer status, we would be required to comply with all disclosure and procedural requirements applicable to U.S. domestic issuers, which would significantly increase our legal, accounting, and other expenses.
In addition, the recently enacted “Holding Foreign Insiders Accountable Act” extends Section 16 reporting requirements to directors and officers of foreign private issuers. However, on March 5, 2026, the SEC issued an order exempting Section 16(a) reporting by directors and officers of foreign private issuers that are both (i) organized or incorporated in a specified “qualifying jurisdiction,” including the Republic of Chile, and (ii) subject to reporting obligations under a specified “qualifying regulation,” such as current regulations in force in the Republic of Chile. As a result, our directors and officers are currently exempt from Section 16 reporting requirements but remain subject to reporting requirements in the Republic of Chile. We plan to post English translations on our website of reports filed by our directors and officers with the Chilean regulator, in accordance with such SEC exemptive order
Chilean law may provide shareholders with fewer and less well-defined rights.
Our corporate affairs are governed by our bylaws (estatutos) and the laws of Chile. Under such laws, our shareholders may have fewer or less well-defined rights than they might have as shareholders of a corporation incorporated in a U.S. jurisdiction. For example, our shareholders would not be entitled to appraisal rights in the event of a merger or other business combination undertaken by us.
Our business growth, asset quality and profitability may be affected by political, legal and economic uncertainty, as well as social developments in Chile.
Our operations are highly dependent on the Chilean political and social environment, as most of our customers and borrowers do business in Chile. Thus, our results of operations could be negatively impacted by unfavorable political and diplomatic developments, social instability or unrest, as well as dramatic changes in public policies, including expropriation, nationalization, international ownership legislation, interest rate caps and tax policy.
The social unrest that occurred at the end of 2019 led to increased volatility in the Chilean stock market, with a significant correction of stock prices and a sharp depreciation of the Chilean peso against the U.S. dollar, both of which were further affected by the COVID-19 outbreak in March 2020. Furthermore, share prices of local banks, including ours, suffered significant declines in the market due to both events, while bond spreads of local banks increased.
In response to the social unrest, the Chilean Government announced a social agenda intended to increase basic pensions, expand social health coverage, and reduce and stabilize the price of some public services. To fund these initiatives, the Chilean Government and the opposition at that time agreed on amendments to certain tax legislation that was passed by the Chilean Congress and enacted on January 29, 2020. See “Item 5. Operating and Financial Review and Prospects—Operating Results—Income Tax and Item 10. Additional Information—Taxation—Chilean Tax Considerations.”
Another measure agreed by the government and Congress to tackle the political crisis of October 2019 was a process to draft a new constitution to replace the one dating from 1980. This process lasted approximately two years, and the first project of new constitution was rejected by a relevant majority of 61.86% of the Chilean voters in a national referendum held on September 4, 2022. Following this outcome, the Chilean congress agreed to start over a second constitutional process by setting certain basic principles and standards that the new constitution must incorporate. The new draft was voted and once again rejected by a majority of 55.79% in a national referendum held on December 17, 2023. Notwithstanding this evidence, we cannot rule out that new attempts to change the prevailing constitution will not take place in the future. Accordingly, we cannot assure you that economic growth, asset quality, profitability and investment in Chile, and consequently our results of operations or financial condition, will not be adversely affected by political, legal and economic uncertainty.
Additionally, in recent years we have seen a surge in certain violent crimes and insecurity in Chile, some of them related to drug trafficking and organized crime, which have raised concerns among the population and the Chilean Government. Accordingly, Congress has approved new legal bodies to fight criminality, while the government is implementing focused plans to reinforce public security at Chilean borders and in specific cities and districts with high criminality indices. Similarly, the construction of new penitentiary locations is under evaluation and discussion by political coalitions.
On December 14, 2025, José Antonio Kast, a conservative candidate backed by far-right and center-right parties, won Chile’s presidential run-off election against Jeannette Jara, a member of the Communist Party and the candidate of a left-wing coalition. President Kast, who obtained approximately 58% of votes, took office on March 11, 2026, succeeding President Gabriel Boric. President Kast has announced plans to implement significant changes to the current political, social and economic frameworks, with a strong emphasis on public security and law enforcement policies as well as reforms to boost economic growth. In this regard, the new administration’s priorities include strengthening border control to address illegal immigration, imposing harsher penalties for organized crime, creating maximum-security prisons, strengthening prison security conditions, and combating illicit trade. From the economic perspective, the new administration is expected to: (i) reduce fiscal spending in order to return to a structural fiscal balance, (ii) reduce the tax burden on individuals and businesses in order to promote economic activity, (iii) carry out a comprehensive revision of red-tape practices by accelerating approval processes for investment projects while reducing the possibility of government representatives making discretionary decisions, and (iv) promote deregulation measures in diverse economic activities. However, at this point, there is uncertainty as to which specific measures will ultimately be proposed and adopted, the timing of any such actions, and whether President Kast’s administration will be successful in obtaining the legislative and regulatory approvals needed to implement them, all of which could affect their implementation and impact. Also, it remains to be seen how effective these measures will be in stimulating economic growth and addressing security concerns in Chile.
Accordingly, we cannot assure you that the social unrest will not reappear in Chile and that violent crimes and insecurity will not further increase in the future and, therefore, we can offer no assurance that it will not have a negative impact on economic growth, the overall Chilean business environment and our results of operations and financial condition. We are not able to currently predict the effects that any future policies or reforms in other economic and social fields may have on the Chilean economy, the banking activity and our business, financial condition and results of operations.
Reforms to labor laws, the pension system and the healthcare system as well as labor strikes or slowdowns could adversely affect our results of operations.
We are a party to collective bargaining agreements with various labor unions to which most of our employees belong. Therefore, disputes regarding the terms of these agreements, or our potential inability to negotiate acceptable contracts with these unions, could result in strikes, work stoppages, or other slowdowns by the affected workers, among other things. If unionized workers were to engage in a strike, work stoppage, or other slowdown, or other employees were to become unionized, we could experience disruption of our operations or higher ongoing labor costs, either of which could have a material adverse effect on our results of operations. See “Item 6. Directors, Senior Management and Employees—Employees.”
Current labor legislation defines a company’s minimum services and emergency teams by the applicable labor regulator after negotiations between a company and each labor union. As such, minimum services refer to those functions of a company which must continue to be provided during a strike because they have been determined to be essential to protect assets and facilities, to prevent accidents, guarantee public utility services, meet the basic needs of the population and prevent environmental damage or harm to health. A company’s emergency teams are made up of workers assigned by each union to fulfill such minimum services. Therefore, in the event of futures strikes, we could face operational disruptions due to an inadequate number of minimum services and insufficient staff for the emergency teams.
Over the last years, diverse laws related to the labor market have been enacted. In 2023, for instance, new legislation for the treatment of working hours reduced the workweek from 45 to 40 hours over a three-year period starting in 2024. Accordingly, the workweek was reduced to 44 hours in April 2024, to 42 hours in April 2026 and will be reduced to 40 hours in April 2028. For this reason, in 2023, based on the experience of diverse pilot projects, we adopted a new framework, with no material effect on our labor costs or the service quality delivered to our customers. Another law enacted in 2023 increased the monthly statutory gross minimum wage (before social security contributions and taxes), under which the minimum wage was set to Ch$500,000 starting on July 1, 2024 (approximately U.S.$555 per month as of December 31, 2025). The same law considered an automatic adjustment, based on CPI variation between July and December 2024, starting in January 2025, while further adjustments were introduced by another law enacted in 2025. Also, in January 2024, a new law went into effect setting forth certain teleworking rights for workers who care for children and disabled or dependent people regardless of their age, among other matters. From the perspective of workplace harassment, in August 2024, a new legal framework went into effect, which aims to prevent workplace harassment, sexual harassment and violence at the workplace, which required companies both to define a solid framework in order to prevent workplace harassment and set adequate and transparent procedures in order to investigate the occurrence of such events within the companies while protecting the dignity, integrity and confidentiality of potential victims and, if proved, proceed in accordance with the legal framework. In January 2026, the former government submitted a bill to Congress, aimed at introducing a multi-sector collective bargaining system in Chile, which would mean a significant change from the current scheme utilized in Chile. However, in March 2026, the bill was withdrawn by the new administration. In addition, as of the date of this annual report, a bill intended to implement a universal childcare benefit in order to promote women participation in the labor market, which would be financed by employers, is pending. Although the current administration believes this should be a tax-based social benefit, no amendments have been submitted to Congress yet. Given the wide array of changes introduced in labor matters, we cannot assure you that they will not have an adverse impact on us by translating into increased labor costs, lowered service quality or productivity in case of disruption of internet connection for the staff allowed to work remotely, increased expenses to address non-monetary requirements set by the laws or changes in the organizational climate, all of which could negatively impact our results of operations and profitability. For more information, see Item 4. Information on the Company—Regulation and Supervision—Labor-related Laws.”
In recent years, the Chilean Government has presented several bills with the purpose of improving the Chilean pension system. On March 26, 2025, Law No. 21,735 was enacted, which considers, among other changes: (i) an increase of 4.5 percentage points in the contribution to individual pension fund accounts to be financed by employers, from the current 10% contributed by each worker, to be managed by the current pension fund administrators (“AFP”) with the establishment of the generational funds, (ii) a further 1.5 percentage points of contribution charged to the monthly salary to be financed by the employer, which will contribute to a new fund managed by a special purpose vehicle that will reimburse funds to the contributor after 20 years and is intended to increase pensions for current pensioners, (iii) one percentage point to be financed by the employer, which is intended to improve current and future pensions for women by addressing gender disparities in the contribution to the pension fund system, and (iv) the possibility of carrying out public bidding processes from time to time for part of the pension funds (about 10% each time) in order reduce fees and commissions charged to contributors and pensioners by pension fund managers. Several of the provisions of this law are still pending to be implemented. Although we expect this reform to result in increased labor costs in the medium term, we do not expect a material impact on our results of operations or financial condition. From the funding perspective, the funds available in the pension fund system should increase due to this reform in the long-term. However, the new framework for the pension fund industry could result in our inability to raise funds from pension fund managers as we have in the past if profitability for pension fund managers declines significantly due to the introduction of the bidding process. As a result, there could be further restrictions to our access to long-term financing, compelling us to seek alternative funding sources in Chile and abroad, which may bear higher interest rates and include higher transactional costs, and, therefore, may have an adverse effect on our net interest margin, results of operations and financial condition in the long-term. Also, in the past, pension fund withdrawals were approved by the Chilean Congress in order to assist people to overcome the financial aftermath of the COVID-19 pandemic. In 2025, no pension fund withdrawals were approved, but there is no certainty that members of Congress will not propose similar initiatives in the future. Any such withdrawals, if approved, could have a material adverse effect on our financial condition, liquidity levels, and our ability to obtain funding from pension funds.
Pandemics, epidemics and other health events will affect both the global and the Chilean economy, our business or results of operations and could affect our financial condition.
The spread of illnesses, epidemics, or pandemics such as the COVID-19 has caused, and could in the future cause, quarantines, shutdowns, reduction in business activity and financial transactions, labor shortages, supply chain interruptions and overall economic and financial market instability in many countries, including Chile, with subsequent adverse effects on our business growth, results of operations or financial condition. If new variants of viruses appear to be resistant to the currently existing vaccines or other kind of viruses with similar adverse effects spread, the health authority could impose restrictions, such as country-wide lockdowns, which could result in a shutdown involving the Bank, our subsidiaries and some or all of our customers operations or the services provided by our suppliers, such that we would be unable to meet the needs of our customers for an unknown period of time, which could adversely affect our results of operations by reducing revenues, decreasing our collection capabilities and increasing operating expenses.
The spread of new variants of viruses or the appearance of other kinds of diseases or viruses that threaten to become a pandemic continues to result, from time to time, in increased volatility in both the local and the international financial markets and economic indicators, such as exchange rates, interest rates, credit spreads and commodity prices. Any shocks or unexpected movements in these market factors could result in financial losses associated with our fixed-income trading portfolio, trading derivatives or financial assets measured at fair value through other comprehensive income, which could then cause deterioration of our financial condition or limitations to meet our liabilities. Furthermore, market fears could translate into liquidity constraints and reduced access to funding in both the local and the international markets, negatively affecting our net interest margin and net income. Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which could have an adverse impact on our earnings. Even though the Chilean financial authorities made various decisions in order to ensure liquidity within the Chilean financial system to overcome the impact of the COVID-19 pandemic on the local economy, we cannot assure you that these measures will be replicated if a new pandemic or the spread of other illnesses occur in the future, which could translate into liquidity constraints for the whole banking system, including us. Lastly, contingency plans in order to address health emergency, including remote working arrangements, implementation of alternative offsite locations and so on, could have a negative impact on us in terms of operating expenses, service quality delivered to our customers and lowered net income.
Risks Relating to our American Depositary Shares (“ADSs”)
Our principal shareholders may have interests that differ from those of our other shareholders and their significant share ownership may have an adverse effect on the future market price of our ADSs and shares.
As of April 24, 2026, LQ Inversiones Financieras S.A. (“LQIF”), a holding company beneficially owned by Quiñenco S.A. and Citigroup Chile S.A., holds directly and indirectly approximately 51.15% of the voting rights of our shares. Subject to our bylaws and applicable law, such principal shareholders are in a position to elect a majority of the members of our board of directors and control all matters decided by a shareholder vote, including the approval of fundamental corporate transactions.
Actions taken by our principal shareholders regarding the disposition of the shares or ADSs they beneficially own, or the perception that such actions may occur, may adversely affect the trading price of our shares on the various stock exchanges on which they are listed and, consequently, the market price of the ADSs.
There may be a lack of liquidity and a limited market for our shares and ADSs.
While our ADSs have been listed on the New York Stock Exchange (the “NYSE”) since the first quarter of 2002, there can be no assurance that an active trading market for our ADSs will be sustained. For the year ended December 31, 2025, a daily average volume of approximately 295,445 of our American Depositary Receipts (“ADRs”) and a daily average turnover of approximately U.S.$8.8 million were traded on the NYSE, according to data provided by Bloomberg. Although our shares are traded on the Santiago Stock Exchange and the Chilean Electronic Stock Exchange, the Chilean market for our shares in Chile is small and somewhat illiquid. As of April 24, 2026, approximately 48.85% of our outstanding shares were held by shareholders other than our principal shareholders.
If an ADS holder withdraws the underlying shares from the ADR facility, the small size of the market, its limited liquidity, as well as our concentrated ownership, may impair the ability of the ADS holder to sell the shares in the Chilean market in the amount and at the price and time such holder desires, and could increase the volatility of the price of our ADSs.
ADS holders may be unable to exercise voting rights at shareholders’ meetings and preemptive rights.
ADS holders may exercise voting rights associated with common stock only in accordance with the deposit agreement governing our ADSs. Accordingly, ADS holders will face practical limitations when exercising their voting rights because ADS holders must first receive notice of a shareholders’ meeting from the Depositary and may then exercise their voting rights by instructing the Depositary, on a timely basis, on how they wish to vote. This voting process will necessarily take longer for ADS holders than for direct common stockholders, who are able to exercise their vote by attending our shareholders’ meetings. Therefore, if the Depositary fails to receive timely voting instructions from some or all ADS holders, the Depositary will assume that ADS holders agree to give a discretionary proxy to a person designated by us to vote their ADSs on their behalf. Furthermore, ADS holders may not receive voting materials in time to instruct the Depositary to vote. Accordingly, ADS holders may not be able to properly exercise their voting rights.
Furthermore, the Ley Sobre Sociedades Anónimas No. 18,046 (the “Chilean Corporations Law”) and the Reglamento de Sociedades Anónimas (the “Chilean Corporations Regulation”) require that whenever we issue new common stock for cash, we grant preemptive rights to all of our shareholders (including holders of ADSs) to purchase a sufficient number of shares to maintain their existing ownership percentage. Such an offering would not be possible unless a registration statement under the Securities Act were effective with respect to such rights and common stock, or an exemption from the registration requirements thereunder were available.
We may choose not to make a registration statement available with respect to the preemptive rights and the common stock, in which case you may be unable to exercise your preemptive rights. If a registration statement is not filed, the depositary will sell such holders’ preemptive rights and distribute the proceeds thereof if a premium can be recognized over the cost of any such sale.
Developments in international financial markets may adversely affect the market price of the ADSs and shares.
The market price of our ADSs and shares may be adversely affected by volatility in international financial markets and unfavorable developments in global economic conditions. The market for Chilean securities and the Chilean economy as a whole are influenced by: (i) economic and market conditions in Chile’s main commercial partners such as the United States, Europe and certain emerging economies, especially Asian countries, (ii) economic as well as political developments in Latin American countries, and (iii) armed conflicts in which some of the Chile’s main trade partners participate or by which they could be affected. Although economic conditions are different in each country, investors’ reactions to specific issues in one country may affect the financial markets in others, including Chile.
After a long period of turbulence and volatility, which began in 2007 with the subprime mortgage crisis, when many U.S. banks and financial institutions disclosed significant write-downs related to their exposure to mortgage-backed securities and other similar financial instruments, the world’s economy began to show a gradual recovery thanks to significant government intervention for important banks worldwide, in order to maintain investors’ and customers’ confidence and to prevent bank runs. At the same time, stricter capital requirements were established for banks around the world, namely the Basel III framework or more recently the Basel IV framework.
During 2020, the COVID-19 pandemic was a principal source of instability for global financial markets, leading to lower valuations in the stock market and decreased liquidity in fixed income markets. In 2021, most of the developed and developing economies recovered from the contraction displayed in 2020, due to aggressive monetary and fiscal packages, resulting in a 6.2% expansion in global GDP. In 2022, however, global GDP grew by 3.5%. This performance was influenced by rising inflation that reached 8.7%, because of the overall increase in fiscal spending during the COVID-19 pandemic, increased liquidity that fostered consumption and the disruption in the supply chain due to geopolitical issues between Russia and Ukraine. Consequently, central banks deployed aggressive monetary contractionary policies that resulted in a sharp increase in short-term interest rates, which had a direct effect on economic performance. In 2023, the global economy evidenced a continuation of the adjustment process. According to the International Monetary Fund (“IMF”), global GDP growth decreased to 3.0% in 2023, due to diverse factors, including: (i) disruptions generated by armed conflicts in Eastern Europe and in the Middle East, (ii) the effect of persistent inflation on purchasing power, and (iii) still elevated short-term interest rates. Nevertheless, according to the IMF, inflation fell to 6.9% in 2023, due to contractionary monetary policies, which also resulted in currency strengthening in developed countries and currency weakening in developing economies.
In 2024, according to the IMF, the global economy recorded a GDP expansion of 3.2% when compared to 2023. This performance was marked by mixed forces, including: (i) lower than expected growth in emerging economies, as reflected by GDP growth rates of 4.8% and 6.5% for China and India, respectively, due to lower consumption and manufacturing (ii) a 0.8% contraction in the GDP of the Euro Zone, due to weakened dynamism in manufacturing and exports, and (iii) a 2.7% economic growth in the United States, supported by steadily increasing consumption. Although most economies managed to reduce inflation, it continued to be a major challenge for central banks that had to maintain reference interest rates high, which negatively impacted on consumption and overall economic activity. For that reason, central banks in developed economies started to gradually ease their monetary strategies only during the second half of the year as other-than-monetary factors continued to put pressure on prices, including fiscal spending and geopolitical conflicts that generated disruption in the global supply chain. As a result, consumption remained subdued in many economies, particularly due to the effect of weak consumer confidence.
In 2025, global economic growth was under pressure due to changes in foreign trade policies across the globe, which threatened international trade agreements in place and amplified the possibility of new inflationary waves and contractionary monetary policies. Thus, global economic activity demonstrated to be resilient, regardless of the persistence of diverse sources of stress. Also, political and social instability in some Latin American countries like Colombia, Venezuela, Ecuador, Argentina and even Chile, as well as some Caribbean countries, has produced migration issues in more stable countries within the region. Moreover, the armed conflict between Russia and Ukraine in Eastern Europe continues to affect international trade and global economic conditions.
Global markets have also been, and may continue to be, adversely affected by the ongoing conflict following the Hamas attack on October 7, 2023, and the subsequent military response by Israel. After an initial agreement in January 2025, as of October 9, 2025, Israel and Hamas entered into a renewed ceasefire agreement calling for a permanent end of the war. However, there are no assurances that such agreement will hold.
Iran also launched direct attacks on Israel in April and October 2024, and in June 2025, Israel launched a preemptive strike on Iranian military and nuclear infrastructure. The United States also conducted strikes on Iranian nuclear facilities in June 2025. Iran responded with drone and missile attacks on Israeli cities and U.S. bases in the region. More recently, on February 28, 2026, the United States and Israel launched a joint military operation against Iran—codenamed "Operation Epic Fury"—targeting the country's leadership, nuclear facilities, missile sites, and security forces, resulting in the killing of Supreme Leader Ayatollah Ali Khamenei and other senior Iranian officials. In retaliation, Iran launched hundreds of ballistic missiles and drones against Israel, United Arab Emirates, Qatar, Bahrain, Saudi Arabia, Kuwait, Oman, Iraq, Azerbaijan, and U.S. military bases in the region. Iran is also believed to have significant influence over extremist groups in the region, including Hamas, Hezbollah, and the Houthis. These proxy organizations have carried out attacks on commercial shipping, critical infrastructure, and civilian targets, further destabilizing the region and disrupting global supply chains. The conflict and negotiations to solve it are ongoing. These ongoing geopolitical tensions, including the potential for military escalation and broader regional conflict, may adversely affect economic conditions and create uncertainty that could negatively impact our business, financial condition and results of operations. In addition, the imposition of new or expanded international sanctions, trade restrictions, or retaliatory measures by affected states could further disrupt international financial markets and our financial performance.
In addition to the ongoing conflict in the Middle East, on January 3, 2026, United States military forces conducted a large-scale operation in Venezuela known as “Operation Absolute Resolve,” which resulted in the capture of Venezuelan President Nicolás Maduro and his wife, Cilia Flores, in Caracas and their transfer to the United States to face federal charges. The intervention has elicited strong international reactions and underscored the potential for rapid shifts in political dynamics in the region, which could influence investor perceptions of risk and volatility in emerging markets, including Chile.
More recently, tensions between the United States and Cuba appeared to reemerge, which could also translate into increased instability in the Caribbean region. Given the recency of these events, their ultimate political, economic and financial impact remains uncertain. These factors could harm foreign trade and economic growth for both developed and developing countries while generating significant volatility in international markets and commodity prices.
We cannot predict the progress, outcome or consequences of the conflicts in Ukraine or Israel, or their broader impacts in Ukraine, Russia, Belarus, Europe, the U.S., the Middle East or Venezuela. The duration and effects of military conflicts are highly unpredictable and could lead to significant market and other disruptions, including significant volatility in and instability in financial markets, political and social instability, trade disputes, as well as an increase in cyberattacks and espionage.
As of December 31, 2025, and as of the date of this annual report, we did not have any exposure to customers or financial counterparties in Ukraine, Russia, Venezuela or Iran, whereas we had immaterial exposures (contingent loans) to Israeli financial institutions.
Furthermore, the slowdown of the Chinese economy has led to increasing volatility in the financial markets in the past, affecting international commodity prices, including copper, which is Chile’s main export. Due to the importance of copper exports and overall mining activity to Chilean economic growth, a prolonged slowdown in the Chinese economy, a Chinese-U.S. trade war or other developments may drive copper prices down and adversely affect the Chilean economy, and consequently negatively affect us.
Similarly, the foreign trade policy adopted by the current U.S. administration, which has included –from time to time– sudden and dramatic changes in tariffs for imported goods could continue to adversely affect international trade and potentially cause further disruption in international prices of commodities, including those exported by Chile, in a manner that is not possible to predict. Even though Chile and the U.S. have a free trade agreement in place, during 2025 the U.S. administration set a 50% tariff on semi-finished copper products and high-intensity copper derivatives, excluding refined copper (cathodes), which is the main Chilean export to the U.S. Nevertheless, other important Chilean export products, such as softwood timber and lumber, were assigned a tariff of 10%, the same as the general tariff applicable to all other Chilean export products to the U.S. Although the imposition of global tariffs set by the U.S. administration was struck down by the U.S. Supreme Court in February 2026, the U.S. administration subsequently determined to impose a new temporary surcharge of 15% on global imports under Section 122 of the Trade Act of 1974 for at least 150 days. As of the date of this annual report, there is no certainty whether tariffs on Chilean products will definitively be removed, revised or restored to the levels established under the free trade agreement between the U.S. and Chile.
The effect of all these trends on market volatility and the economic outlook of developed countries, emerging economies and Chile’s commercial partners could adversely impact the local economy, the local banking industry and, ultimately, our results of operations, financial condition and the price of our shares and ADS.
In the past, Chile has imposed controls on foreign investment and repatriation of investments that affected investments in, and earnings from, our ADSs.
Equity investments held in Chile by non-Chilean residents have historically been subject to various exchange control regulations that restrict the repatriation of investments and earnings from Chile. In April 2001, the Central Bank eliminated most of the regulations affecting foreign investors. However, foreign investors still must provide the Central Bank with information related to equity investments and must conduct such operations within the Formal Exchange Market. Additional Chilean restrictions applicable to holders of our ADSs, the disposition of the shares underlying them, the repatriation of the proceeds from such disposition or the payment of dividends may be imposed in the future, and we can neither determine in advance nor advise you as to when or how those restrictions could impact you, if imposed.
If for any reason, including changes in Chilean law, the depositary for our ADSs were unable to convert Chilean pesos to U.S. dollars, investors would receive dividends and other distributions, if any, in Chilean pesos.
Item 4 Information on the Company
History and Development of the Bank
Overview
We were founded in 1893, and we have been, for much of our history, among the largest and most profitable Chilean banks in terms of return on average assets and average equity in Chile. Our core business is commercial banking in Chile, providing traditional banking products and specialized financial services to our large and diversified customer base of individuals and companies.
Our legal name is Banco de Chile and we are organized as a banking corporation under the laws of Chile and were licensed by the CMF to operate as a commercial bank on September 17, 1996. Our main executive offices are located at Paseo Ahumada 251, Santiago, Chile, our telephone number is +56 (2) 2637-1111 and our website is www.bancochile.cl. Our representative in the United States is Puglisi & Associates, with offices at 850 Library Avenue, Suite 204, Newark, Delaware 19711.
We are a full-service financial institution that provides, directly and indirectly through our subsidiaries, a wide variety of lending and non-lending products and services to all segments of the Chilean financial market, providing our customers with powerful, differentiated, and comprehensive value offerings. In addition to our traditional banking operations, our subsidiaries and affiliates permit us to offer a variety of non-banking but specialized financial services including securities brokerage, mutual funds management, investment banking, insurance brokerage as well as acquiring and processing services for credit and debit cards.
Our business is not materially affected by seasonality.
We organize our operations and deliver our services to our customers through the following four principal business segments:
| (i) | retail banking; |
| (ii) | wholesale banking; |
| (iii) | treasury; and |
| (iv) | subsidiaries. |
Through our retail banking segment, we provide our individual customers with credit cards, installment loans and residential mortgage loans, as well as traditional deposit services, such as current accounts, demand deposits, demand accounts, savings accounts, and time deposits. We and our subsidiaries also offer financial solutions such as insurance brokerage, securities brokerage, mutual funds management, among others. In addition to personal banking, our retail segment comprises micro, small and medium-sized companies that we serve by providing them with short- and long-term financing, deposit and cash management solutions, in addition to an array of financial services, such as insurance brokerage. Our banking services for wholesale customers include commercial loans (including factoring and leasing), trade finance, capital markets services, cash management and non-lending services, such as payroll, payment and collection services, as well as a wide range of treasury, financial advisory and risk management products.
In 2008, we enhanced our value offerings by entering into a strategic partnership with Citigroup Inc., as a result of our merger with Citibank Chile. We also offer international banking services through our representative office in Beijing and a worldwide network of correspondent banks.
The year ended December 31, 2023 was significant for Banco de Chile, as we celebrated 130 years of history and maintained leadership in the Chilean banking industry. As reported by the CMF, we led the local banking industry in both net income and profitability, achieving a 27.7% market share in net income attributable to shareholders and a return on average equity (ROAE) of 26.3% (attributable to shareholders), which reflects a successful and prudent business and risk management, consistent with a long-term strategic vision that permanently seeks the creation of sustainable value for all our stakeholders. In terms of operating income, we were able to largely mitigate the impact of lower inflation, as compared to 2022, through the expansion of customer income by more than 11%, mainly due to a higher margin from deposits, a boost in income from consumer loans based on attractive value offerings, as well as higher fees from transactional services and insurance brokerage. We also highlight the contribution of our Treasury in terms of generation of operating income by means of offering sophisticated financial products and services adjusted to the customers’ needs. The lending activity was constrained at the industry level, which translated into limited growth in our loan portfolio. In commercial loans, we recorded a 16.2% market share, 39 basis points below what was achieved at the end of 2022, in a context characterized by the negative impact of lower economic activity on the dynamism of companies. However, in consumer loans, we achieved 6.3% annual growth and increased our market share from 18.0% in 2022 to 18.7% in 2023, mainly due to attractive offers enhanced through a distinctive digital experience with the highest service quality standards. Finally, our residential mortgage loan portfolio expanded by 7.8%, in line with limited but sustained market growth despite higher interest rates that prevailed during the year, reaching a market share of 15.3%, slightly higher than the stake achieved in 2022. In 2023, we also achieved important advances in each of our strategic pillars: (i) regarding the pillar “customer at the center,” we extended the ongoing advance of digital solutions by expanding the capabilities of our remote service channels, implementing technology and advanced analytics to enhance the value offer, enabling new payment functionalities and expanding the scope of digital onboarding tools for both people and companies, while promoting financial inclusion through our FAN Account and cluster of products, (ii) in terms of our pillar “efficiency and productivity,” we managed to reengineer processes in the branches, reduce waiting and service times, reinforce the use of self-service ATMs, consolidate the digital sale of insurance, promote adoption of a new corporate purchasing model, and implement 100% digital granting of loans for SMEs, among many other initiatives and (iii) for the strategic pillar of “commitment to sustainability and Chile” we issued bonds abroad in the amount of approximately U.S.$85 million under our ESG Financing Framework. The resources obtained through such issuance will be entirely allocated to initiatives promoting the country’s sustainable development and inclusive economic growth, in line with the Sustainable Development Goals (SDG) of the United Nations and Global Compact Chile. Finally, our financial results allowed us to improve our capital base as reflected by a Total Regulatory Capital and CET1 ratio of 17.4% and 13.7%, respectively, as of December 31, 2023, both under Basel III framework.
As of December 31, 2024, according to the CMF, we ranked first in the Chilean banking industry in terms of net income attributable to equity holders with a market share of 24.6%. As of the same date and excluding operations of subsidiaries abroad, we were the second largest bank in Chile in terms of total loans with a market share of 16.1%, the second largest provider of commercial loans with a market share of 15.9%, the second largest provider of consumer loans with a market share of 18.6% and the fourth largest private sector bank in terms of residential mortgage loans with a market share of 15.5%. As for liabilities, excluding operations of subsidiaries abroad, we were the largest private bank in Chile in terms of current accounts and demand deposit balances (net of clearance) denominated in local currency with a market share of 20.1% and, more importantly, we ranked first in current account balances held by individuals with a market share of 23.8%, both as reported by the CMF and as of December 31, 2024. Lastly, according to the Chilean Association of Mutual Funds, as of December 31, 2024, we were the largest provider of mutual funds management services in Chile with a market share of 23.6%.
In 2025, we focused on consistently executing our corporate strategy, which enabled us to lead the industry not only in financial performance but also across several key dimensions. As of December 31, 2025, for the fifth year in a row, we were the leading bank in the Chilean industry in terms of net income attributable to equity holders, with a market share of 22.4%. At the same date, and excluding operations of subsidiaries abroad, we ranked as the second-largest bank in Chile in total loans, with a market share of 15.8%, the second-largest provider of commercial loans with a 15.4% market share, the second-largest provider of consumer loans with a market share of 18.1%, and the third-largest private bank in residential mortgage loans with a market share of 15.5%. Despite moderate loan growth and a financial scenario marked by lower interest rates and inflation, in 2025, our operating revenues managed to grow steadily on the grounds of solid customer revenues, supported by an active and diversified commercial strategy. This performance was demonstrated by a robust increase of 11.6% in net fee income and a 7.3% rise in income from loans, primarily driven by improved lending spreads that are continuing to approach the average levels observed prior to 2020. During 2025, we also made significant progress in the evolution of our FAN account model, which has become a key driver for customer acquisition and engagement, reaching approximately two million customers by December 2025, an increase of 17.7% when compared to December 2024. In addition, the launch of our new acquiring and processing subsidiary, Banchile Pagos , on November 17, 2025 was a significant milestone for the corporation, which will allow us to expand our value proposition for companies and entrepreneurs. Efficiency and productivity remained a core strategic priority in 2025 as well. Thus, throughout the year, we continued optimizing our branch network, which resulted in a targeted workforce reduction that has enabled us to increase productivity with a front-to-back approach. Additionally, we successfully completed the merger of our former collection subsidiary, Socofin S.A. (“Socofin”), into the bank. This merger is intended to enhance our control standards, strengthen governance practices, and improve customer experience over the medium term, while also streamlining collection processes and increasing productivity. Regarding information technology, we deepened the modernization of our technological architecture, achieving 54% cloud migration, while implementing a new corporate ERP system and advancing the update of the core banking platform. In parallel, we continued to advance the adoption of AI through a strategic alliance with Microsoft, which focuses on three main areas: (i) generative AI (GenAI), involving the application of advanced models for predictive analytics, simulations, data mining, and customer service, together with the integration of AI assistants to enhance employee productivity and experience through the adoption of Microsoft 365 Copilot, (ii) automation technologies, aimed at implementing automated processes to maximize operational efficiency, and (iii) low-code/no-code development, involving the use of agile development tools to accelerate the creation of digital solutions and improve the customer experience. By December 2025, our interaction with AI tools was primarily related to internal AI assistants and Copilot. During 2025, 60% of our employees used Copilot.
As of December 31, 2025, we had:
| ● | total assets of Ch$54,104,608 million (approximately U.S.$60,089.5 million); |
| ● | total loans of Ch$39,254,314 million (approximately U.S.$43,596.5 million), before deducting allowances for expected credit losses; |
| ● | total deposits of Ch$28,954,278 million (approximately U.S.$32,157.1 million), of which Ch$14,791,870 million (approximately U.S.$16,428.1 million) correspond to current accounts and demand deposits; |
| ● | equity (including net income, non-controlling interest, and provisions for minimum dividends) of Ch$6,687,847 million (approximately U.S.$7,427.6 million); |
| ● | net income of Ch$1,185,413 million (approximately U.S.$1,316.5 million); and |
| ● | market capitalization of approximately Ch$17,576,972 million (approximately U.S.$19,521.3 million). |
As of December 31, 2025, we had 11,156 employees and delivered financial products and services through a nationwide distribution network of 217 branches and 1,884 ATMs. Our ATMs are part of a larger network of 7,608 ATMs operating in Chile, of which 4,688 ATMs operate under a network managed by Redbanc S.A., a company we partly own along with eight other private sector banks.
History
We were founded in 1893 as a result of the merger of Banco Nacional de Chile, Banco Agrícola and Banco de Valparaíso, which created the largest private sector bank in Chile. We have played an important role in the economic history of Chile. Before the creation of the Central Bank in 1926 and prior to the enactment of the General Banking Act, we were the main stabilization agent of the Chilean banking system, a role that is now performed by the Central Bank. Beginning in the early 1970s, the Chilean Government assumed control of a majority of Chilean banks, and all but one of the foreign banks that were operating at that time closed their branches and offices within the country. Throughout this era, we remained as a private sector bank, except for a portion of our shares owned by the Chilean Government that were sold to private investors in 1975. Throughout our history we have developed a well-recognized brand name in Chile and expanded our operations in foreign markets, where we developed an extensive network of correspondent banks. In 1987 and 1988, we established four subsidiaries to provide a full range of specialized financial products and services as permitted by the General Banking Act. In 1999, we widened our scope of specialized financial services by creating our insurance brokerage and factoring subsidiaries. During the early 2000s, the Chilean banking industry witnessed intense merger and acquisition activity. In 2002, we merged with Banco A. Edwards, which allowed us to expand our business to new customer segments. In 2008, we merged our operations with Citibank Chile. As a result of these consolidations, we currently operate a distribution network that is composed of two brand names, namely, “Banco de Chile” (which operates throughout Chile) and “Banco Edwards-Citi” (which is primarily oriented to higher income segments).
The 1982-1983 Economic Crisis
During the 1982-1983 economic crisis, the Chilean banking system experienced significant instability that required the Central Bank and the Chilean Government to provide assistance to most Chilean private sector banks, including us. Subsequent to the crisis, like most major Chilean banks, we sold certain of our non-performing loans to the Central Bank at face value on terms that included a repurchase obligation. In 1989, banks were permitted to repurchase the portfolio of non-performing loans in exchange for assuming a subordinated debt equal to the difference between the face and economic value of such loans, which we did in November 1989.
In November 1996, pursuant to Law No. 19,396, our shareholders approved a reorganization by which Banco de Chile was converted into a holding company named SM-Chile S.A. (“SM-Chile”). In turn, SM-Chile organized a new wholly-owned banking subsidiary named Banco de Chile, to which the former contributed all its assets and liabilities, other than the Central Bank subordinated debt. In addition, SM-Chile created a second wholly-owned subsidiary named SAOS that assumed a new obligation in favor of the Central Bank that fully replaced the Central Bank’s subordinated debt. In exchange, the Central Bank received 63.6% of our shares from SM-Chile. Thus, SAOS would repay the new obligation by means of the proceeds of the dividends it would receive from us. Pursuant to SM-Chile’s bylaws, that company would remain in existence until the Central Bank subordinated debt was completely paid off by SAOS, which occurred on April 30, 2019. Since that date, SM-Chile was in the process of liquidation while SAOS was dissolved immediately. SM-Chile was officially liquidated on February 24, 2026. For more information on the Central Bank Subordinated Debt and the liquidation process of SM-Chile, see “Item 4. Information on the Company—History and Development of the Bank–History—The 1982-1983 Economic Crisis and the Central Bank Subordinated Debt” and “Item 7. Major Shareholders and Related Party Transactions—Ownership Structure” in the Form 20-F for the year ended December 31, 2020, filed with the SEC on April 30, 2021.
Merger with Banco A. Edwards
On December 6, 2001, our shareholders approved our merger with Banco A. Edwards, which became effective on January 1, 2002. Banco A. Edwards had been listed on the NYSE since 1995, and since January 2002, we have been listed on the NYSE under the symbol BCH. We concluded the merger process with the consolidation of a new corporate structure and the integration of our technological platforms.
Merger with Citibank Chile
On December 27, 2007, our shareholders approved our merger with Citibank Chile, which became effective on January 1, 2008. During 2008, we integrated Citibank Chile’s technological platforms with ours and established a new organizational structure in order to satisfy the needs of our customers and to achieve important synergies. We concluded the merger process with the integration of Corporación Financiera Atlas S.A. (former Citibank Chile’s consumer area) into our Consumer Finance Area (CrediChile formerly), which allowed us to nearly double our customer base and market share in consumer finance. As result of this merger and integration process, we entered into the following agreements with Citigroup Inc. to provide a framework for our relationship with Citigroup Inc., its services and trademarks in Chile: (i) the Global Connectivity Agreement, (ii) the Cooperation Agreement, (iii) the Trademark License Agreement and, (iv) the Master Services Agreement. All of these agreements have continued to be extended, amended and/or restated successively. For more information, see “Item 7. Major Shareholders and Related Party Transactions—Related Party Transactions.”
Technological Projects
During 2023, we maintained the focus on providing individuals and companies with excellent services and products as well as timely and effective solutions, through proactive and agile service in order to build relationships of trust with our customers. In this process, we launched innovative products, as well as renewed and updated various services, functionalities and digital tools that seek to deliver a more flexible and accessible experience, with high security standards and availability to customers and users. In this context, we became the first bank in Chile in the “Decentraland,” a decentralized metaverse platform where we launched “Dimension B,” a new virtual space of Banco de Chile, which represents an open space where the user can roam freely and access information on financial products and services. Moreover, we successfully released the Apple Pay digital wallet, which allows customers to pay in on-site stores without the need for a physical card. In the retail segment, different functionalities were added to the MiBanco, MiPago, MiSeguro y MiInversión mobile applications. In MiBanco, the renewal of the information on the home page and the creation of widgets or tools that allow viewing the benefits of the day, using the MiPago mobile application to add funds to (and pay for purchases using) the bracelet used to attend the Lollapalooza music festival in Chile, among others, stand out. On the online banking website, we were able to implement the digitization of the entire digital income situation statement and digital onboarding for current accounts in U.S. dollars. In the wholesale segment, improvements and new functionalities were added to the MiBanconexión application, such as enabling digital onboarding for current accounts in U.S. dollars, allowing online repayment and review of leasing products, permitting review of bank warranty bills, enabling digital ordering of mass payments, incorporating multi-company authorization for electronic funds transfer, applying for credits digitally, among others.
In 2024, we made significant progress in our digital transformation strategy, which has allowed us to launch innovative products and update our services, functionalities and digital tools, in order to deliver a simpler, more accessible and flexible experience to customers and users while ensuring high standards of cybersecurity and availability. These advances have resulted in a high degree of digital adoption by customers, such as the current account onboarding that has leveraged improvements in credit monitoring and electronic signature. In this regard, in 2024, we consolidated a digital marketing strategy for digital products fully based on digital onboarding through personalized actions and active presence on the main digital platforms. In the Retail Segment, we updated and incorporated several functionalities on the website and applications, including the integration of MiSeguro into the MiBanco application, allowing customers to take and manage their insurance policies in one place. Additionally, we incorporated new functionalities in MiBanco to allow customers to open digital checking accounts, make payments through QR code and receive daily notifications with offers and promotions of our loyalty program. Also, at the beginning of 2024, we launched “FAN Ahorro,” a savings account with no maintenance costs or minimum opening amount, which may be opened 100% digitally and only requires having a valid FAN Account and an identification card. This product earns monthly interest and allows the customer to make up to two withdrawals without losing the interest earned. Meanwhile, in the Wholesale Banking segment, we updated the Banconexión 2.0 platform with a new design focused on simplicity and ease of use, seeking to increase customers’ productivity when managing their transactions. In addition, we renovated investment tools by incorporating the possibility of investing in mutual funds while introducing an investment summary dashboard. Also, we launched Pago Fácil, a payment solution that allows companies to pay us and other banks fully online at any time. Likewise, in 2024, we made significant IT developments intended to reinforce and increase productivity of our back and middle office operations, such as: (i) robotic process automation, development of AI use cases, and digitization of transactions, (ii) our new ERP platform for the automation and centralization of purchasing and payment activities, along with new processes to optimize capital expenditures in infrastructure, (iii) the strengthening of the technological architecture and high service standards through the update of our data center networks and the implementation of a multicloud strategy, and (iv) transformation and modernization of our mutual funds and stock brokerage subsidiaries. Also, during 2024, we continued to incorporate AI tools as part of our digital transformation process through the exploration and integration of generative AI in various areas of our operations. In this regard, we managed to: (i) provide more than 300 software developers with AI assistance, (ii) launch a customer service chat for FAN Clan account holders, and (iii) make an assistance chat available to our account officers. In addition, our advanced analytics area developed models and systems that provide our customers with accurate recommendations by considering their areas of interest while maintaining strict information security standards. Furthermore, we have integrated AI to streamline our processes, which has allowed us to improve the efficiency of manual procedures with advanced data processing technologies, increasing verification and accuracy, and improving our service quality.
In 2025, we continued deploying our digital transformation strategy by enhancing digital services and tools to provide our customers with a simpler, more accessible, more secure and flexible experience. In the retail banking segment, we redesigned the MiBanco mobile application by introducing faster access to key functions and a new section that highlights benefits, products, and promotions. Through this innovation, we also expanded some digital capabilities through automated credit limit adjustments, fully digital credit card onboarding, new options for installment loan analysis and a debt consolidation simulator. We also introduced a benefits search tool and an upgraded notification system to support personalization and customer engagement. In addition, we integrated the former MiPago application into the MiBanco application to centralize payment and collection functionalities. For wholesale banking customers to SME customers, we continued developing a digital ecosystem through the ongoing evolution of Banconexión 2.0 and the MiBanconexión application, both designed to support productivity and streamlining banking operations to provide these customers with timely service, such as enabling multi-company authorization dashboards, introducing gadgets for online credit origination, incorporating new features in the MiBanconexión application for digital onboarding of U.S. dollar accounts and mass payment approval tools. Likewise, we launched an Application Programming Interface (“API”) Store. Furthermore, we introduced MiPass application for companies to expedite the approval of banking operations. In November 2025, the CMF granted operating authorization to Banchile Pagos , which was officially launched in December 2025. This subsidiary’s value proposition relies on a business platform that allows companies to contract acquiring services—both physical and digital—within five minutes, while accessing a smart POS device for on-site sales and centralized account management through Banconexión 2.0 and MiBanconexión. Also in 2025, we took further steps in the adoption of AI tools, which were used by more than 60% of our employees as of December 31, 2025 while over 800 developers actively incorporated AI into their workflows. Currently, our efforts have focused on the use of AI assistants for diverse commercial, investing and technological tasks. In this regard, we have increased AI-assisted code generation and deployed digital onboarding support, advanced analytics and AI-enabled personalization tools—supported by our data governance framework—to enhance customer experience and operational efficiency. In 2025, we also entered into a strategic alliance with Microsoft, which is expected to promote innovation, strengthen digital security initiatives, and enhance internal productivity through the development of three main areas: (i) generative AI (GenAI), (ii) automation technologies, and (iii) low-code/no-code development.
Through these efforts, we have maintained our commitment to anticipating changes and minimizing risks related to technological advances, including cybersecurity risks, as discussed in “Item 3. Key Information—Risk Factors—Risks Relating to Our Operations and the Chilean Banking Industry.”
Capital Expenditures
The following table sets forth our capital expenditures for each of the three years ended December 31, 2023, 2024, and 2025:
| For the Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| (in millions of Ch$) | ||||||||||||
| Computer equipment | Ch$ | 11,136 | Ch$ | 5,286 | Ch$ | 9,854 | ||||||
| Furniture, machinery and installations | 2,922 | 3,210 | 1,896 | |||||||||
| Real estate | 10,277 | 7,369 | 6,161 | |||||||||
| Vehicles | 416 | 489 | 26 | |||||||||
| Subtotal | 24,751 | 16,354 | 17,937 | |||||||||
| Software | 59,955 | 57,617 | 58,597 | |||||||||
| Total | Ch$ | 84,706 | Ch$ | 73,971 | Ch$ | 76,534 | ||||||
Our budget for capital expenditures for 2026 amounts to approximately Ch$107,239 million, of which information technology investments are expected to represent 80.8% and infrastructure projects, the remaining 19.2%. The budget is aligned with our mid-term strategic priorities of improving efficiency and productivity while enhancing customer service capabilities with a focus on digitalization. We expect to finance these capital expenditures principally with our own resources and long-term debt financing.
Among the budgeted expenditures for information technology, 35.8% corresponds to new and ongoing IT projects under agile methodologies, intended to provide business solutions for customers, enhance technological stability and productivity, and strengthen our communication network, cloud servers and cybersecurity infrastructure and systems. In addition, 24.2% of the IT budget consists of investments in technological equipment and system improvements to be carried out by some of our subsidiaries, of which more than 70.0% of the expenditure is expected to be incurred by our new acquiring and processing services subsidiary, Banchile Pagos , which is still in a start-up phase. Of the remaining 40.0%, 18.5% relates to traditional development of applications and remote service channels to provide digital alternatives to meet customers’ needs on a timely basis, 12.5% is expected to support regulatory compliance requirements and 8.9% is intended to support the update of our technological infrastructure, including further optimization and enhancement of security standards for our nationwide ATM network.
Our 2026 infrastructure budget is expected to include initiatives to enhance security standards in our branch and ATM network as required by the Chilean security authority (32.7%); disbursements associated with the refurbishment of our branch network (26.0%), which seeks to upgrade the layout of some of our branches in order to align them with the service model we are promoting across the country, and the renovation and restoration of corporate buildings together with changes in infrastructure to complete the integration of former Socofin employees to Banco de Chile’s headquarters (11.1%). Furthermore, the annual budget includes additional efficiency initiatives (10.0%), capital expenditures to reinforce security standards (7.5%) and improvements to recreational facilities (3.8%).
All the aforementioned investments have been made or are intended to be made in Chile.
BUSINESS OVERVIEW
Our Competitive Strengths
Building on our knowledge of the Chilean financial market, we have historically been able to develop significant competitive advantages based on our strong brand recognition, our widespread branch network, the diversity and relative size of our customer base, our highly competitive funding structure, the superior asset quality of our loan portfolio as compared to our peers in Chile, an attractive risk-return relationship and our market leadership in a diverse range of financial products and services.
Our main competitive strengths are:
Brand Recognition and Strong Corporate Image
We have operated in the Chilean financial industry for 132 years under the “Banco de Chile” brand name. In order to provide our customers with specialized value offerings and a wider range of financial products and services, we have also developed the “Banco Edwards-Citi” and “Banchile” brand names. We believe our long-standing history in the Chilean market is recognized by our customers and the general public, who associate our brands with value, quality, reliability and social responsibility within the Chilean financial industry, as demonstrated in various polls conducted by well-known market research companies. We believe that our long history in the Chilean banking industry is a key element that differentiates us from our competitors.
Additionally, we believe that our merger with Citibank Chile reinforced our corporate image as a leading financial institution in Chile and allowed us to gain recognition among customers and investors all over the world.
We also believe that our strong corporate image is further strengthened by our commitment to social responsibility, which includes supporting the Teleton Foundation (a non-governmental organization dedicated to assisting and treating disabled Chilean children), our partnership with institutions dedicated to improving the quality of Chilean education, our participation in campaigns intended to improve the quality of life of needy people, our commitment to supporting and sponsoring diverse monetary and non-monetary campaigns for recovery efforts from natural disasters in Chile, including wildfires, earthquakes, floods and tsunamis, and the development of other initiatives intended to strengthen our role in, and contribution to, Chilean society. Furthermore, over the last years we have devoted efforts to improving our commitment to the environment by carrying out numerous initiatives.
In 2025, we received several distinctions due to our strong brand recognition and corporate image in the banking industry. We were recognized by Merco (a corporate reputation monitor) as the fourth Chilean company with the best corporate reputation across all industries and second among local banks. Likewise, Global Finance Review recognized us as the “Best Bank” in Chile.
Business Scale and Leading Market Position
We are one of the largest financial institutions in Chile and a market leader in a broad range of financial products and services within the Chilean financial system, as listed in the following table:
| As of December 31, 2025 | ||||||||
| Market Share |
Market Position |
|||||||
| Demand Deposits in Local Currency(1) | 19.9 | % | 1st | |||||
| Current Accounts Balances held by Individuals | 23.6 | % | 1st | |||||
| Mutual Funds (Assets Under Management) | 22.5 | % | 1st | |||||
| Net Fee and Commissions Income | 20.0 | % | 1st | |||||
| Net Income attributable to equity holders | 22.4 | % | 1st | |||||
| Net Income of Securities Brokerage Subsidiary (2) | 22.2 | % | 1st | |||||
Source: Chilean Association of Mutual Funds and the CMF.
| (1) | Excluding operations of subsidiaries abroad. |
| (2) | Including the whole market and not only subsidiaries of local banks. |
Through our history, we have been able to maintain a leading position in the wholesale banking segment, which characterized us in the past, by improving our products and services and supplementing them with comprehensive and tailored service models that allow us to successfully meet our customers’ needs while maintaining long-term relationships with major local and multinational companies that operate in Chile. We have also added value to our service offerings by including treasury products for hedging purposes, together with investment banking, insurance brokerage and other specialized financial services provided by our subsidiaries.
In the last decade we have also achieved significant market share in the retail banking segment through diverse value offerings intended to cover our target demographics and enterprises. Therefore, we have prioritized the expansion of our residential mortgage portfolio and our presence in transactional services such as credit cards, current accounts and demand accounts, as we believe they are effective means to build long-term relationships and customer loyalty, while increasing cross-selling opportunities. For this reason, through our Individual and SME Banking Area, we aim to lead the market in services offered to high and medium-income individuals for whom we have developed an attractive and complete portfolio of financial services, including a full range of wealth management services through one of our subsidiaries. We supplement these value offerings with specific proposals for SMEs, which in recent years have coupled with value offerings satisfying small scale entrepreneurs’ financial needs, including the services provided by our acquiring and processing subsidiary, Banchile Pagos , and individual customers in outlying districts seeking deposit and transactional solutions. This broad variety of services has also enabled us to lead the Chilean market in terms of net fee and commission income.
We believe our financial strength, prestige and brand recognition among Chilean customers have allowed us to become the market leader in many banking products and services, such as commercial loans, fees and commissions and demand deposits held by individuals, among others.
Broad and Diversified Customer Base
We believe that we have one of the largest customer bases among financial institutions in Chile. In recent years, we have been able to expand our customer base by providing attractive and tailored value offerings based on improving segmentation and by applying sophisticated business intelligence tools. As of December 31, 2025, according to our Management Information System, we had 1,510,415 core customers, which had at least a current account or a loan outstanding with us. In addition, with respect to our main banking products, as of December 31, 2025, we had 1,303,518 current accounts holders; 228,353 time deposit holders; and 241,734 saving account holders. Similarly, as of December 31, 2025, we were the second largest privately-owned bank in terms of number of borrowers with a 21.9% market share associated with 1,385,878 debtors (excluding contingent loans), according to data published by the CMF. As of the same date, according to the CMF, we had 1,585,888 credit card account primary holders.
We believe that our broad customer base is both an essential driver of our business and a valuable asset that enables us to cross-sell our traditional lending products and services along with non-lending services provided primarily through our subsidiaries, including our securities brokerage, mutual funds management, financial advisory, insurance brokerage and collection services.
Multichannel Distribution Approach
In order to better serve our customers, we offer a distribution approach composed of both physical and non-physical channels.
We are present in all regions of Chile and strive to be accessible to every Chilean customer through our large branch network as well as non-physical contact channels. As of December 31, 2025, we had a nationwide branch network of 217 branches, the largest in Chile among private sector banks, according to information published by the CMF. This network is composed of 187 branches under our “Banco de Chile” brand name and 30 branches under our “Banco Edwards Citi” brand name. We believe that our branch network enables us to develop close relationships with our customers and therefore we are constantly assessing new branch locations throughout Chile.
We have also complemented our branch network with non-physical remote channels, such as ATMs, internet-based online platforms and mobile banking applications. As of December 31, 2025, we had 1,884 ATMs throughout Chile and we provided our customers with specialized internet websites for each of the segments we target, coupled with diverse mobile banking applications, including MiBanco, MiBanconexion, MiPass and MiInversion. During 2025, monetary transactions carried out by customers and non-customers through mobile applications or internet-based platforms jointly increased 8.1%, compared to a 5.8% decrease in transactions performed in branches and ATMs.
Proven Digital Banking and Business Intelligence Capabilities
Over the last years, digital transformation has been steadily increasing its importance within the Chilean banking industry, a trend that was accelerated during 2020 as a result of the COVID-19 pandemic’s mobility restrictions. In order to be aligned with our customers’ needs during such a challenging period, we have made several cultural changes within our organization, which include the introduction of new financial products, services and technologies. By doing so, we expect to achieve sustainable growth in the coming years and to improve both our processes’ efficiency and the consumer experience with the Bank.
As a result, in recent years we have implemented several advances in both the back and front office aimed at improving customer experience by expanding digital channels while adding new products and functionalities. We have also continued increasing sales through these points of contact by working with advanced analytics to improve cross-selling. Additionally, digital transformation has become a crucial goal across the Bank, which has led us to focus on talent and digital culture in order to bolster our capabilities while emboldening innovation in all aspects of the banking business with a front-to-end approach by adopting new work methodologies such as agile.
One of the key pillars of our digital banking strategy has been the development of cutting-edge mobile applications and customized websites. Over the last years, we have devoted efforts to enhance our mobile banking platforms by developing and launching diverse applications, including MiBanco, MiBanconexion, MiInversion, and MiPass. We are continually improving the functionalities and robustness of applications that enable our customers to perform most of the transactions they can execute on our websites, such as: (i) accessing their account balances, (ii) executing electronic money transfers, (iii) applying for pre-approved installment loans, (iv) generating secure passwords to make such transfers, (v) making cash advances from credit cards to checking accounts, (vi) setting cash withdrawals from our ATM branch network, (vii) making bill payments, (viii) requesting reimbursements from other Banco de Chile customers by scanning a QR code, (ix) managing their personal investment portfolios by investing or disinvesting in equity, fixed-income, and mutual funds, and (x) contracting insurance policies while managing their stock of policies, among others.
The FAN Account, a fully digital-onboarding demand account, has remained a cornerstone of our digital strategy in recent years. Since its launch in 2020, the FAN Account has aimed to improve customer experience and promote loyalty through ongoing enhancements to available functionalities. In 2022, we broadened the scope of the FAN Account by introducing tailored offerings for specific customer segments. In this regard, we launched “FAN Emprende,” a fully digital demand account for SMEs, start-ups, and entrepreneurs that provides access to our digital channels and segment-specific benefits. We also introduced “FAN Clan,” a fully digital-onboarding demand account for teenagers from 14 to 17 years of age, which customizes the customer experience through the use of avatars and provides access to benefits and discounts included in our loyalty program. In 2024, we launched “FAN Ahorro,” a savings account with no maintenance fees or minimum opening amounts that is opened digitally and requires a valid FAN Account and a national identification card. This product accrues monthly interest and allows up to two withdrawals without forfeiting accrued interest. During the same year, we launched the Digital Student Plan for higher-education students between 18 and 27 years of age, which includes a checking account and provides the possibility to apply for a credit card. As of December 31, 2025, the FAN Account had reached two million customers, most of whom had no prior relationship with us.
In 2025, within the retail banking segment, we enhanced our digital value proposition by updating the MiBanco application to simplify navigation and improve access to key functionalities, while strengthening personalization and expanding digital processes across credit and benefits-related services. We continued to consolidate our digital channels through the integration of payment features into the MiBanco application, seeking to provide customers with a more unified and efficient experience across platforms. As such, we integrated former applications, such as the former MiPago application into the MiBanco application in order to streamline our customers’ interaction with our mobile tools. For wholesale banking customers and SME customers, we advanced the development of our digital ecosystem by enhancing the Banconexión 2.0 and MiBanconexión mobile application with improvements focused on usability, operational efficiency and connectivity, including multi-company authorization dashboards while introducing tools for online credit origination and new features, such as digital onboarding for U.S. dollar accounts and mass payment approval tools. We also launched our API Store, enabling clients to connect certain internal systems with the Bank’s digital services to support automation, productivity, and service quality. Furthermore, we introduced the MiPass application for companies to streamline the approval of banking operations.
We believe these and other similar initiatives have allowed us to continue improving our online channel usage rates, as illustrated in the table below, which sets forth information regarding the evolution of the number of transactions (monetary and non-monetary) carried out by customers and non-customers through our diverse distribution channels that were performed through non-physical remote channels.
Competitive Funding Structure
We believe that we have a cost-effective and highly competitive funding structure based on our leading market position in current accounts and demand deposits, especially among individuals. According to the CMF, as of December 31, 2025, with a 23.6% market share, we ranked first within the Chilean banking industry in current accounts and demand deposits held by individuals. As of that same date and excluding operations of subsidiaries abroad, we were the first private bank in Chile in terms of total balances of non-interest bearing current accounts and demand deposits denominated in local currency, representing 19.9% of the industry (net of clearing), as reported by the CMF. Under Chilean GAAP, our total balances of current accounts and demand deposits represented 30.0% of our funding structure (excluding equity) as of December 31, 2025, as compared to the 23.4% reported by the Chilean banking industry, excluding Banco de Chile. In addition, we have a solid base of funding from retail banking customers, who held demand deposits and time deposits that jointly represented 36.6% of our total liabilities (excluding equity) as of December 31, 2025. This provides us with a stable source of funding that is reflected by a 30-day moving average renewal rate of retail time deposits, which reached approximately 72.4% as of December 31, 2025.
We strive to diversify our liability structure in terms of sources, types of instruments and markets with the aim of maintaining a competitive cost of funding and improving our liquidity. In 2025, we were more active in our long-term debt placements in both the local and foreign markets, based on a funding strategy that aims to diversify our liability structure to finance loan growth at the most convenient cost of funds while adequately managing financial gaps in the banking book. Accordingly, in 2025, we carried out the following debt placements: (i) Ch$1,572,815 million in the local market with an average maturity of 10 years; (ii) Ch$115,739 million in Switzerland with a six-year maturity; (iii) Ch$75,233 million in Hong Kong with a seven-year maturity; (iv) Ch$65,260 million in Japan with a five-year maturity; (v) Ch$50,998 million in Mexico with a five-year maturity; and (vi) Ch$43,101 million in Australia with a ten-year maturity.
We believe that our funding structure provides us with a cost advantage over many of our competitors (which use a higher proportion of interest-bearing liabilities), as current accounts and demand deposits are non-interest bearing in Chile. We also believe that our solid market position in demand deposits, together with our high international credit ratings, translated into one of the lowest costs of funding from liabilities associated with interest bearing deposits and long-term debt, among the five largest banks in Chile.
Prudent Risk Management & Superior Asset Quality
Of the Chilean financial institutions, we have among the highest credit quality and the healthiest loan portfolio in Chile. We believe this asset quality is the result of our well-known prudent risk management approach and accurate credit risk models that are updated from time to time and have enabled us to maintain relatively low levels of past-due loans (loans 90 days or more past due) and high coverage indicators over the last few years. According to the CMF, as of December 31, 2025, we had a delinquency ratio (loans 90 days or more past due as a percentage of total loans) of 1.68% which was well below the industry average delinquency ratio of 2.57% recorded by the Chilean banking industry (excluding Banco de Chile) as of the same date. Additionally, according to data published by the CMF, as of December 31, 2025, we had a coverage ratio (allowances for loan losses over loans 90 days or more past due) of 127.1%, which was well above the industry average coverage ratio of 103.9% as of the same date (excluding Banco de Chile). Over the last few years, the utilization of business intelligence tools has also contributed to an improvement in our credit risk management. During 2025, we kept a constant monitoring of risk conditions, particularly in those sectors most sensitive to the economic environment and in relation to the retail banking segment, which presented a steady convergence to past-due indicators seen before 2020 after periods of extremely low delinquency in the local banking industry. Likewise, we focused on the analysis of the financial condition of economic sectors adversely affected by specific dynamics, such as the real estate and construction industry and the transportation industry, which tended to improve their credit risk profiles throughout the year. In the retail banking segment, increased delinquency among individuals characterized the performance of the industry as a whole, with past-due indicators that –particularly in residential mortgage loans– increased above figures seen before 2020. We recognize that the current period reflects an adjustment following several years of atypical payment behavior. Throughout 2025, we have made concerted efforts to closely monitor these trends with the objective of restoring delinquency rates to more typical levels as economic activity recovers.
International Coverage
In 2008, we enhanced our value offerings by entering into a strategic partnership with Citigroup Inc., as a result of our merger with Citibank Chile, effective on January 1, 2008. As result of the merger and integration process, we entered into various agreements with Citigroup Inc. to establish a framework for our relationship with Citigroup Inc., including the services to be rendered by each party and the use of trademarks in Chile. For more information, see “Item 7. Major Shareholders and Related Party Transactions—Related Party Transactions.”
This strategic alliance, backed by a Global Connectivity Agreement with Citigroup Inc., has allowed us to broaden our service offerings by adding a comprehensive portfolio of international financial services that previously we could only partially provide. Based on this relationship, we are able to provide our local customers with world-class financial services and participate with them in their international ventures. Furthermore, we provide a reliable business platform for Citibank’s customers who aim to operate in Chile.
Our Business Strategy
Mission
‘We are a leading and globally-connected corporation with a prestigious business tradition. We provide excellent financial services to all of our customer segments by offering creative and effective solutions while at the same time ensuring that we add value for our shareholders, employees and community as a whole.’
To accomplish this mission, we believe it is essential to attain industry leadership in all businesses and financial areas in which we operate, namely, profitability, efficiency, business scale, customer base, human resources development and corporate social responsibility.
Vision
‘We aspire to be, in all things we do, the best bank for our customers, the best place to work and the best investment for our shareholders. In order to accomplish this vision, we are committed to the development of our employees and the community as a whole.’
Our mission and vision commit us to all of the diverse stakeholders related to our business, including customers, employees, investors and the community. Thus, our vision is shared and internalized by all areas across the corporation, senior management and the board of directors while also constituting the basis for our strategic objectives. This vision requires initiatives to achieve comprehensive excellence in management, with customer satisfaction as our major goal. For this reason, we apply high industry standards in information technology, business models and service quality, all of which are summarized by the value creation cycle below:
Source: Banco de Chile.
Corporate Values
Our way of thinking is reflected by a set of values that are shared by our employees and shareholders, which are aimed at providing our customers with world-class financial solutions and quality standards:
| ● | Integrity; |
| ● | Commitment; |
| ● | Respect; |
| ● | Loyalty; |
| ● | Prudence; |
| ● | Responsibility; and |
| ● | Justice. |
Purpose
‘We are a company that contributes to the economic development of the country by generating favorable conditions for the development of individuals and enterprises, providing them with financial solutions that fit their needs at every stage of their lifetime.’
In order to accomplish this, we have made commitments to all of our stakeholders, since we are convinced that we will achieve excellence in all of our businesses and projects as long as we are able to satisfy stakeholders in their interactions with us.
Commitments
We aim to satisfy the expectations of the following stakeholders by:
| ● | Our Customers |
| ● | Seeking to be the bank with the best service quality, offering innovative, simple, safe and secure products and services designed to meet the needs and aspirations of each segment, with timely, agile and proactive service, thus building trusting and long-term relationships. |
| ● | Having customer service channels that are always available, allowing fluid and timely communication. |
| ● | Relying on collaborators with a vocation for customer service and digital knowledge. |
| ● | Our Employees |
| ● | Offering development and growth opportunities based on merit. |
| ● | Providing competitive compensation and economic and welfare benefits. |
| ● | Seeking to promote a respectful, nice and collaborative work environment in a place that has the appropriate technological tools and infrastructure. |
| ● | Building a homogeneous and distinctive culture, based on corporate commitments and values through participation in social activities, to become a corporation recognized as the best place to work and the best banking team in Chile. |
| ● | Our Community |
| ● | Being convinced that our success is linked to the sustainable development of the country and the community. |
| ● | Being committed to our community every day by supporting various initiatives to overcome adversity through the development of internal policies and being present in emblematic solidarity crusades. |
| ● | Being committed to respect for diversity and inclusion, entrepreneurship, care for the environment and criteria of equity and governance. |
| ● | Our Shareholders |
| ● | Rewarding our shareholders’ trust by maximizing the value of the Company, with responsibility, prudence and a long-term business vision. |
| ● | Implementing our strategy through appropriate risk management and a culture of operational excellence and a culture of operational excellence that while enabling us to project the Corporation’s sustainable leadership of the Corporation. |
Strategic Priorities
Our long-term strategy is intended to maintain profitable growth by placing the customer at the center of all of our decisions and to improve efficiency and productivity in all of our processes and procedures while maintaining a strong commitment to sustainability and the country. These are our strategic priorities and we aspire to attain them through collaboration and teamwork.
Source: Banco de Chile.
| ● | Customer Centric Decision Making |
We aim to support our customers and meet their needs throughout their lives. In order to achieve this goal, we strive to promote customer proximity and reliability, while providing our customers with the best service quality within the local market.
In our retail banking segment, our aim is to lead the market by providing differentiated and comprehensive value offerings based on a deep and focused ongoing improvement of our segmentation, which allows us to engage in profitable and high-growth potential business opportunities. Thus, we expect to expand our business and customer base by developing tailored service models, optimizing our branch network, enhancing our presence in the small and medium-size company market and reinforcing certain lending products that should enable us to consolidate long-term relationships with the upper and middle-income individual customers, particularly through payment channel usage (such as credit cards), digital banking, installment loans and residential mortgage loans. Similarly, we aspire to target middle-income individuals and microbusinesses by promoting payroll-deduction lending and attracting customers previously unattached to any bank through a basic array of services.
We firmly believe that there continues to be room to grow in retail banking. Although Chile’s per capita GDP has increased fourfold over the last 30 years, banking penetration is still below that in developed countries, particularly in relation to residential mortgage and consumer loans. In fact, as of December 31, 2025, the loan book of the Chilean banking industry (excluding operations of subsidiaries abroad) represented 73% of Chilean GDP. As of the same date, mortgage and consumer loans represented 26% and 9%, respectively. On the other hand, according to the CMF, as of December 31, 2025, we had market shares of 18.1% and 15.5% in residential mortgage loans and consumer loans, respectively. Given the fierce competition in the Chilean banking industry, in order to take advantage of these opportunities, we are frequently seeking to develop innovative products and services to diversify our revenue sources. Accordingly, we have strived to build comprehensive value offerings for our retail segment in order to continue enhancing our fee-based income by promoting the digitalization of products and services provided to these customers while improving benefits related to our customer loyalty programs.
Similarly, in our wholesale banking segment, we aim to maintain a market-leading position in loans while growing profitably in a market that is characterized by low margins and fierce competition. We intend to accomplish these goals by increasing our cross-selling of non-lending products and services. For this reason, we are focused on improving our cash management services, enhancing our internet-based and mobile services, increasing the penetration of products designed by our treasury segment, strengthening our presence in certain lending products such as leasing and factoring and promoting international businesses by taking advantage of the Global Connectivity Agreement we maintain with Citigroup and the specialized array of financial services offered by our subsidiaries, such as securities brokerage, mutual funds management and financial advisory in order to meet the needs of certain niches within this business segment. The success of our wholesale banking segment is critical to our ability to maintain sustainable growth in revenues, particularly in fee-based income. Thus, cross-selling is one of our main priorities in this segment.
In our treasury segment, we intend to take advantage of our specialized knowledge in order to increase the penetration of widely-used products in our current customer base while offering innovative products to potential customers. Also, we frequently seek newer and more convenient funding choices, locally and internationally, in order to support our long-term business strategy by promoting an adequate diversification of our funding structure.
| ● | Main Achievements in 2025: |
(1) Reinforcement of FAN Account Cluster
In the second half of 2020, we launched “FAN Account,” our fully digital onboarding account designed for all types of individual customers. This account may be digitally opened without visiting our branches, with no paperwork but still subject to our strict account approval processes. Additionally, the Fan Account permits holders to perform local and international purchases with no entrance or maintenance fees, which seeks to promote financial inclusion. Also, FAN Account users have access to all the benefits and platforms offered by the Bank to its customers. Between 2021 and 2024, we enhanced the value offering behind the Fan Account by developing a FAN Account Ecosystem while deploying a wide array of services and features, including: (i) a new customer service channel with a chatbot called FANi, (ii) full access to Banco de Chile’s digital ecosystem. and (iii) cardless cash withdrawals. Likewise, over the years, we have created tailored solutions for SMEs and young people, such as: (i) FAN Emprende, which is a fully digital account for SMEs, start-ups, and entrepreneurs that allows access to our digital channels and benefits by enabling customers to perform transactions online while having no requisites for opening, (ii) FAN Clan that targets teenagers and promotes financial inclusion by offering benefits that are part of our loyalty program through a customized digital environment, and (iii) “FAN Ahorro,” a 100% digital savings account that earns monthly interest and allows customers to carry out up to two withdrawals without losing accrued interest, with no maintenance cost or minimum opening amount. In 2025, we continued to widen the services and products offered to FAN Account customers. We also managed to develop a micro-credit offering and low-limit credit cards for FAN Account holders without a credit history in the local financial industry or who did not qualify under traditional risk parameters, which is in line with the inclusion initiatives that are part of the FAN Account Ecosystem. These products are digitally delivered through the MiBanco application or our website. During 2025, we granted more than 24,000 micro-credits and opened approximately 12,000 low-limit credit cards for FAN Account holders.
Through FAN Account, we were able to attract 300,000 new customers in 2025 and reached two million users as of December 31, 2025.
(2) Advances in Digital Banking for Strengthened Value Offerings
In 2025, we continued to deploy our ambitious digital strategy to deliver improved and tailored banking solutions for our customers by generating a simpler, more accessible, and flexible experience. Through the digital transformation process, we focused on the launch of innovative products and the ongoing modernization of our services, functionalities, and digital tools.
In the retail banking segment, we renewed the MiBanco mobile application, focusing on simplifying the user experience through faster access to frequently used functions and the incorporation of a new section highlighting benefits, new products, promotions, and other relevant content for customers. Additional digital functionalities were introduced to streamline key processes, including: (i) automated and pre-approved increases and distribution of credit card and credit line limits, (ii) digital onboarding for credit cards within the MiBanco application, (iii) a widget that allows users to convert the billed monthly use of credit cards into installment loans, and (iv) a debt-consolidation simulator in order to promote financial planning. We also introduced a new benefits search tool—available on the Bank’s website —that allows customers to find active benefits by type and category. The MiBanco mobile application was further enhanced with the integration of Travel Sky Plus Platinum-level benefits and direct access to the Bank’s VIP lounge offerings at Santiago International Airport. Additionally, we updated our customer notification system to deliver more personalized and timely alerts related to benefits and relevant content. As part of our strategy to consolidate our digital channels, we integrated the former MiPago application into the MiBanco application, enabling clients to execute peer-to-peer transfers, RedGiro QR operations, and Webpay QR payments directly within the main mobile application.
For companies ranging from corporations to SMEs, our strategic focus continued to advance the development of a comprehensive digital ecosystem in order to streamline banking operations carried out by these types of customers to ensure timely and tailored solutions. This progress was reflected in the ongoing evolution of our Banconexión 2.0 platform and MiBanconexión mobile application, both designed with interfaces focused on simplicity to streamline daily operations and enhance client productivity. Also, during 2025, we launched our API Store, which enables these kinds of customers to integrate their internal financial management systems with our API-based services to support efficiency, productivity, and service quality by delivering on-time solutions for diverse customers’ needs.
We also strengthened our digital offering for companies through several enhancements, including the implementation of a multi-company authorization dashboard that supports integrated management for organizations with multiple legal vehicles. In addition, for FAN Emprende customers, we developed online applications for pre-approved loans and introduced digital onboarding for current accounts. Furthermore, we launched MiPass for companies, a mobile application designed to digitally approve banking transactions, while through the MiBanconexión mobile application we incorporated new features ranging from digital onboarding for U.S. dollar accounts to approval of mass payments and high-value transfers.
(3) New Subsidiary Banchile Pagos : Acquiring and Processing Services for Credit and Debit Cards
Over the past few years, especially since the end of 2020, cash payments for goods and services have declined while being substituted by credit and debit cards as the most used payment methods. In addition, the significant increase in online transactions has further driven the growth and use of digital payment methods both locally and internationally. As part of the transformation experienced by the payment ecosystem since March 2020, a “four-party model” is currently operating in Chile, which has allowed the appearance of new players in the acquiring market. This has resulted in increased competition and reduced fees for customers and has facilitated the financial management for customers and SMEs through the tracking of sales, deposits, charges, and various types of related reports.
In July 2024, we created a new subsidiary, Banchile Pagos , an acquiring and processing service company that seeks to compete in the prevailing four-party model ecosystem for credit and debit cards while widening the value proposition we offer to our customers, with a special focus on SMEs and middle market companies, through innovative payment and cash management solutions. During 2025, Banchile Pagos carried out a pilot phase with a limited group of clients in order to evaluate the adequacy of its operating model and technological platforms. In December 2025, the company officially started operations, and by the end of December 2025, Banchile Pagos had enrolled approximately 6,800 merchants, delivered more than 7,800 Smart POS devices in use, and processed over 4.7 million transactions.
(4) Ongoing Improvements in Service Quality
We are convinced that in a highly competitive industry such as the Chilean banking system, a customer-centric focus is critical to generating loyalty and creating long-term profitable relationships. We believe that our high service quality is a competitive strength that differentiates us from competitors and supports our long-term strategy by responding to the preferences of our current and potential customers. Accordingly, we strive to improve our relationships with customers by developing commercial strategies and value offerings aligned with their needs, as well as improving our response time and customer satisfaction indicators. Consistent with this view, during 2025, we continued enhancing our commitment to service quality, improving existing capabilities and developing new online channels and enhanced functionalities for mobile applications, while implementing organizational changes to provide our customers with a more comprehensive approach and customized solutions.
We believe that our efforts in developing comprehensive and customized value offerings for customers have contributed to improving customer experience over time. In this regard, as of December 31, 2025, we ranked first among relevant peers with a net promoter score of 61%, according to the study conducted by Procalidad, an independent Chilean customer satisfaction survey. Also, the average voluntary attrition rate was 2.7% for the year ended December 31, 2025, compared to an average voluntary attrition rate of 2.5% between 2019 and 2024.
| ● | Operating Efficiency and Productivity |
We believe that efficiency and productivity are key competitive strengths that we have to maintain in order to sustain profitable growth in a changing business environment that is under increasing regulatory focus. Accordingly, we aim to become a productive and efficiency-oriented organization in all business aspects by developing simple, effective, secure and low-cost processes while maintaining the tightest cost control in the industry. To accomplish these goals, we have invested in information technology and the development of simpler, more manageable, secure and modern business processes and platforms to attain faster response times and higher productivity. We also continue to enhance our strategic development capabilities, increase our business scale, develop economies of scope by incorporating new financially related products and services, optimize our branch network, enhance our remote transactional channels, improve our credit processes, develop a higher level of automation in our internal processes and consolidate our cost control policy and monitoring procedures.
We are dedicated to developing and optimizing internal processes to reduce and manage our expenses. Throughout 2025, we continued to enhance our IT infrastructure to improve stability and efficiency for all of our customers. Likewise, we continued to disburse financial resources to reinforce our IT infrastructure on cybersecurity matters. We believe this is the best way to improve our operating efficiency and enhance security standards while properly meeting our customers’ needs, which are increasingly linked to digital channels, fast response and timely service. For more information, see “Item 4. Information on the Company—Capital Expenditures.”
| ● | Main Achievements in 2025 |
(1) Integration of Socofin into the Bank
In July 2025, our former collection subsidiary, Socofin , was merged into the Bank and subsequently dissolved. This initiative was part of our continuous focus on efficiency and productivity as we realized that the credit recovery function that was formerly carried out by Socofin could be integrated into the Bank in order to optimize the staff and all the related processes in terms of control, governance and customer experience by means of automated solutions and a redesign of crucial activities in direct coordination and organizational dependence of our recently created Corporate Risk Division.
We expect the merger of Socofin into the Bank to result in enhanced operational efficiency in the credit recovery process by leveraging economies of scale and scope. This integration is also expected to provide our customers with more direct and transparent management of overdue loans, thereby supporting the maintenance of strong, long-term relationships.
(2) Branch Network and Headcount Optimization
We believe that remote channels are key to the future of banking, particularly amid new regulatory requirements, intensified competition, the entry of new banking players, and higher reputational exposure, all of which translates into higher costs. Similarly, customers are increasingly demanding new and innovative distribution channels and visiting branches less, given lack of time, but mostly due to the massive use of the internet and the fast adoption of smartphones. In 2018, these trends led us to undertake financial and strategic analyses aimed at revising our entire branch network in terms of profitability, location, layout and services offered through these channels.
In 2025, we completed the optimization of our nationwide branch network, resulting in more efficient operations through the implementation of new self-service devices for customers, the redesign of branch layouts, and the integration of a comprehensive service model tailored to the needs of customers in the retail banking segment.
As a result, as of December 31, 2025, our branch network was composed of 217 branches, compared to 334 branch locations as of December 31, 2020.
Likewise, the deployment of our efficiency program has enabled us to streamline several internal processes with a front-to-back approach that, along with the organizational restructuring we have carried out in order to both imprint an efficiency-focused culture across the corporation and due to the branch network optimization, has translated into a steady optimization in headcount from 12,541 employees in 2022 to 11,156 employees in December 2025, which represents an 11.0% decrease.
| For the Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| (in millions of Ch$) | ||||||||||||
| Operational Ratios | ||||||||||||
| Loans per Branch (in Millions of Ch$) | 146,306 | 172,014 | 180,608 | |||||||||
| Loans per Employee (in Millions of Ch$) | 3,078 | 3,347 | 3,513 | |||||||||
(3) Technological Advances in Internal Processes and Infrastructure
In 2025, we continued to promote our focus on efficiency and productivity in all aspects of the banking business. In this line, during 2025 we focused on capturing value through efficiency and cost savings by implementing initiatives aimed at centralizing subsidiary functions, optimizing organizational structures and infrastructure expenses, and redesigning our service model.
Additionally, during 2025, we continued to make steady progress in the transformation process of our subsidiaries Banchile Administradora General de Fondos and Banchile Corredores de Bolsa toward a renewed digital offering for their clients, while maintaining market-leading positions within their respective industries.
Also, we have continued to promote the progressive evolution of our technological infrastructure and capabilities to keep them modern, flexible, scalable, and aligned with market-leading practices, which in the end should translate into increased efficiency and productivity. As part of these efforts, we seek to promote the development of highly automated processes and the adoption of specialized software that allow us to accelerate our knowledge to address digital transformation. Accordingly, during 2025, we continued to adopt AI, with the aim of improving internal productivity and enhancing customer service quality, for instance through the AI-powered virtual assistant FANi, whose capabilities were expanded to address inquiries related to all FAN products, providing a unified experience for new and existing clients. These efforts were further reinforced through a strategic alliance we established with Microsoft starting in October 2025, which is focused on accelerating innovation, strengthening commercial team productivity, enhancing customer experience, and reinforcing digital security through three main areas, including: (i) generative AI, (ii) automation technologies, and (iii) low-code/no-code development. Employees were granted access to secure and validated generative AI tools, such as Copilot 365, to support their daily tasks and increase their productivity with solid standards of digital security. By December 2025, more than 60% of employees had access to these tools across commercial, investment, and technology teams, including AI assistants deployed across the organization—such as CAP, SARA, Risky, I-BAN, MinervAI, Wayo, PRAI, and Jarvis—.Similarly, we expanded analytical capabilities for managing credit collection and financial inclusion through Labrisk AI, while AI-based tools were used to enhance the effectiveness of customer communications and marketing campaigns. The number of software developers utilizing AI doubled to more than 800.
| ● | Commitment to Sustainability and Chile |
We are devoted to focus on the progress of our customers by means of providing them with a wide array of services while supporting their funding needs. Furthermore, we are committed to the development of Chile and its individuals and companies by providing innovative tools that contribute to improve their quality of life. In this regard, we firmly believe that modern companies need to create effective mechanisms to build positive connections with all of their stakeholders and the society in which they carry out their business activities. This has become increasingly important in the midst of societal changes in Chile and worldwide.
This view is shared by the Bank and its employees, who support the development of Chile through diverse methods such as promoting social progress, contributing to environmental protection, decreasing extreme poverty, providing high-quality education to needy people, assisting disabled young people, fostering cultural development and embracing campaigns intended to overcome the effects of specific adverse events such as natural disasters.
Over the years, in line with its commitment to Sustainability and Chile, we have promoted different initiatives focused mainly on the areas of: (i) training and education for communities, (ii) entrepreneurship support, (iii) inclusion, and (iv) environment commitment. Our sustainability strategy is aligned with the Sustainable Development Goals (SDGs) and therefore seeks to promote inclusive economic development, promote environmental sustainability, stimulate innovation and partnerships, in addition to strengthening the relationship with the communities in which the Bank operates.
| ● | Main Achievements in 2025 |
In recent years, we have successfully rolled out a variety of initiatives, achieving significant milestones in 2025, including the following:
(1) Training and Education for Communities
We believe that education is a cornerstone for the country’s social and economic progress. Through the “Educación para Chile” program, we seek to broaden learning opportunities and create pathways that can improve people’s lives. The program focuses on strengthening the educational ecosystem by building strategic partnerships and implementing initiatives that provide individuals with tools to enhance employability and well-being. Accordingly, diverse initiatives are implemented under the following strategic focus areas:
| ● | “Financial Education” |
Aims to strengthen the financial capability of students, elderly people, workers, entrepreneurs, and disabled people by translating core financial concepts into everyday habits and informed decision-making through initiatives such as: (i) financial education mentors, where 81 volunteers from Banco de Chile delivered mentorship to improve budgeting, planning, and responsible financial choices, reaching approximately 5,600 people of all ages; and (ii) the “Comunidad del Ahorro” (Saving Community) program, a community-based learning initiative aimed at offering digital courses that prioritized women heads of household while integrating financial education by means of practical guidance on managing household food spending, reaching 1,027 women in 2025.
| ● | “Early Education” |
We promote foundational reading skills and interest in books from early ages through volunteering and community events. In 2025, 100 children ranging from six to 10 years old participated in activities to support interest in reading and comprehension. Also, more than 1,000 students took part in the “Reading Fair,” which included workshops, storytelling, and activities to encourage reading for pleasure.
| ● | “Civic Education and Values” |
Through this initiative, we promote informed and engaged citizenship by creating spaces for reflection, cultural access and skills development that broaden perspectives and strengthen community bonding across the country.
During 2025, we undertook the following key actions on this topic: (i) the “Education for Chile Dialogues” convened 400 participants to discuss the future of education, complemented by six expert talks on subjects such as inclusive pedagogy, innovation, and skills development, which collectively attracted 800 attendees; (ii) the “Challengers Contest," organized in collaboration with Universidad de los Andes, engaged over 7,000 students from technical and vocational education and training (TVET) institutions in addressing a social challenge—financial education in open-air markets—which culminated in three TVET students and one professor traveling to South Korea for an international learning experience that connected education with global culture; (iii) the “My First Opera” program, as part of the Education for Chile initiative, presented The Barber of Seville at the Municipal Theater of La Pintana to more than 500 attendees, primarily local families and children, providing a free and inclusive cultural experience that brought art and classical music closer to the community; and (iv) the “Heritage Tours," designed to promote culture and institutional history by opening our headquarters to groups of students, teachers, and workers to foster community engagement, together with "Heritage Day 2025,” a governmental initiative that enabled nearly 4,000 visitors to explore the first floor of our main headquarters building, recognized as a National Historic Monument.
| ● | “More and Better Job Opportunities” |
We seek to connect learning with labor-market needs through practical training, work-based experiences, and targeted support that enhance employability for students, teachers, and underrepresented talent in high-demand fields.
The “Compromiso TP” (TP Commitment) initiative aims to promote work opportunities for technical school students through an alliance with Fundación Chile. In the first stage, this program focuses on management and information technology skills through integration and curricular strengthening. Compromiso TP also includes a new educational approach in relation to lecturer skills and provides students with the opportunity to use tools and practices that allow them to pursue employment opportunities upon graduation. In 2025, through this program, more than 861 students received certification in matters such as accounting, networks and connectivity, programming, and telecommunications.
Also, to promote community training, during 2025 the “More Women in Technology” initiative granted a total of 316 scholarships to entrepreneurs, migrants, and young women through intensive bootcamps organized with specialized training partners to support employability.
(2) Entrepreneurship Support
Throughout our history, we have demonstrated our commitment to the development and success of entrepreneurs, for which we have implemented different gathering and supporting instances in order to promote their advancement in their business goals. During 2025, the main initiatives we carried out in this area were:
| ● | “10th National Entrepreneur Challenge Contest” |
The “Concurso Desafío Emprendedor” (National Entrepreneur Challenge Contest) program, which seeks to promote the development of micro-entrepreneurs and SMEs throughout the country, in association with Desafío Levantemos Chile, has become one of the most important entrepreneurship support programs in Chile. In 2025, more than 25,000 entrepreneurs signed up for the contest, which provides cash prizes and training activities for entrepreneurs on various topics such as budgeting, work methodologies, saving alternatives, investment choices and responsible financial indebtedness. Likewise, this initiative permits entrepreneurs to access an ecosystem in which they increase visibility, boost sales and generate stronger and long-lasting relationships with their current and potential customers. The contest’s runners-up were provided with mentoring to build their pitch with the support of experts and participation in an open television program, along with cash prizes.
| ● | “Entrepreneurship Impact” |
The “Impacto Emprendedor” program focuses on students from middle- and high-school to undergraduate, graduate and recent graduates of higher education establishments in the country (universities and technical schools). In 2025, we organized the fifth version of the national university entrepreneurship contest “Impacto Emprendedor Universitario,” convening 263 projects composed of more than 686 students. Participants received support through a training program that included online activities, as well as seed funding to help validate their prototypes. We also organized the fourth version of the national school entrepreneurship contest “Impacto Emprendedor Escolar,” bringing together 603 teams composed of more than 2,000 students from 178 educational institutions. This program aims to strengthen the entrepreneurial culture among middle and high-school students across the country, fostering leadership, innovation, critical thinking, and social commitment through a training process.
| ● | “Women Who Inspire” |
The “Mujeres que Inspiran” program aims to have a positive impact on the development of the country by promoting gender equality, education, employment and the development of local economies through women who lead their communities. In 2025, for the fifth consecutive year, this program received over 1,500 applications, of which 30 women were awarded as microentrepreneurs or leaders of social organizations that have marked their communities through sustainable initiatives in the social, environmental and economic fields. Based on this recognition, these women received mentoring and specialized training to strengthen their leadership and collaboration networks.
| ● | “Entrepreneur Club” |
This initiative, developed in alliance with Desafío Levantemos Chile, aims to support the economic and social recovery of entrepreneurs in the Valparaíso Region who have been affected by emergencies. The program combines training, personalized mentorship, and financial support, with the objective of strengthening businesses in areas such as business model development, financial health, and digital marketing. During 2025, 30 entrepreneurs benefited from the training and financial support, and were accompanied by 30 volunteers from the Bank.
(3) Inclusion
In 2025, we continued to promote Inclusion, Non-Discrimination and Respect to Diversity across the corporation and in our interaction with the community. Through this pillar, we aim to improve our knowledge of physical disability, discrimination, and diversity while developing higher sensitivity on these matters.
Our commitment to disabled people is permanent. In 2025, we worked once again with Teleton Foundation (“Teleton”) in the annual fund-raising campaign by putting our nationwide distribution network, internet-based platforms, and mobile applications for smartphones, in addition to other technological resources, at Teleton’s disposal. Also, more than 7,000 of our employees participated as volunteers in the annual campaign carried out in November 2025. We have been supporting the Teleton Foundation since its establishment in 1978.
Likewise, we sponsor paralympic sportsmen and sportswomen while organizing sporting events for disabled people like the Chilean Open Wheelchair Tennis Tournament. The 26th edition of this tournament received around 40 Chilean and foreign players, and awards distributed during the tournament totaled U.S.$14,000.
Additionally, in 2025, we held the eighth version of “Navidad con Sentido” (A Meaningful Christmas), an initiative that allows volunteers teams from Banco de Chile to design and implement sustainable impact projects that benefit social organizations across the country. In 2025, this activity involved more than 1,200 volunteers with 120 projects, benefiting around 13,000 children, teenagers, disabled people and elderly people from all regions of the country.
(4) Environment Commitment
We prioritize sustainable development along with responsible environmental and social management, recognizing the role that financial entities play in driving the economic system. Through diverse initiatives, we focus on enhancing community engagement through competitive funds, partnerships, and volunteer programs, strengthening strategic collaborations with foundations, universities, and organizations aligned with the pillars of sustainability—entrepreneurship and education, contribution to environmental care, emergency support, and inclusion—placing a strong emphasis on local relevance.
| ● | “Emergency Response” |
In 2025, we worked in alliance with “Desafío Levantemos Chile” to provide support to communities and institutions affected by emergencies across the country. Following the tornado that struck Puerto Varas, in the Los Lagos Region—causing damage to homes, businesses, vehicles, and public infrastructure—we contributed through the donation of reconstruction prepaid cards and work tools to help families and entrepreneurs.
We also delivered support to La Providencia high school in Traiguén, in the Araucanía Region, an educational institution with more than 130 years of history, whose facilities were damaged by wildfires. Our assistance supported the continuity of learning for the 125 students, including 90 students who live in its free boarding school. This institution has a School Vulnerability Index (SVI) of 99%, which demonstrates the important social role it plays for the community by providing secondary and technical-professional education.
| ● | “Blue Commitment” Program |
In May 2022, we launched the “Compromiso Azul” (Blue Commitment) Program, which is a roadmap on environmental and climate change matters. This program is composed of diverse initiatives that seek to contribute to environmental care through different initiatives, such as operational eco-efficiency, community relations, recycling and the offer of products and services for people and SMEs. In 2025, we carried out several volunteer programs called “Cuadrilla Azul” (Blue Crew) focused on environmental care. Through this initiative, during the last year we primarily focused on cleaning beaches, rivers, and wetlands. In two days, 660 volunteers of Banco de Chile managed to cover nine locations nationwide, where more than 277,000 square meters were cleaned, and around 7.7 tons of waste were collected and taken to recycling plants and official landfills. Likewise, our insurance brokerage subsidiary, in collaboration with the international organization Parley for The Oceans, carried out a campaign aimed at cleaning rivers and wetlands nationwide. This project involved more than 60 locations in 14 regions of the country and included the participation of more than 2,500 volunteers, who collected 15 tons of waste, including more than 2.5 tons of plastic, preventing it from entering the sea.
Principal Business Activities
We are a full-service financial institution that provides, directly and indirectly through our subsidiaries and affiliates, a wide variety of lending and non-lending products and services to all segments of the Chilean financial market. Accordingly, for management purposes we organize our operations in the following business segments:
Source: Banco de Chile.
The business segments information presented in this section has been prepared in accordance with Chilean GAAP, which are the principles applied by management in identifying and measuring business segments, including the application of the management approach described in IFRS 8 and used by the CEO, as Chief Operating Decision Maker (CODM) to monitor and report our business performance to the Bank’s board of directors. For a discussion of the most significant differences between Chilean GAAP and IFRS Accounting Standards, see “Item 5. Operating and Financial Review and Prospects—Operating Results—Results of Operations for the Years Ended December 31, 2023, 2024, and 2025—Business Segments” and “Item 5. Operating and Financial Review and Prospects—Operating Results—Results of Operations for the Years Ended December 31, 2023, 2024, and 2025—Summary of Differences between Chilean GAAP and IFRS Accounting Standards”. Also, see Note 6 to our audited consolidated financial statements as of and for the year ended December 31, 2025 included elsewhere in this annual report for the reconciliation of business segment information from Chilean GAAP to IFRS Accounting Standards.
The following table sets forth information on the composition of our loan portfolio and our consolidated net operating income before income tax, in accordance with Chilean GAAP for the year ended December 31, 2025, allocated among our principal business segments:
| For the Year Ended December 31, 2025 | ||||||||||||
| Total Loans | % Participation in Total Loans | Net Operating Income before Income Tax(1) | ||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||
| Retail banking | Ch$ | 26,443,984 | 67.5 | % | Ch$ | 710,733 | ||||||
| Wholesale banking | 12,747,986 | 32.5 | 630,597 | |||||||||
| Treasury | — | — | 55,988 | |||||||||
| Subsidiaries | — | — | 115,865 | |||||||||
| Other (adjustments and eliminations) | — | — | — | |||||||||
| Total | Ch$ | 39,191,970 | 100.0 | % | Ch$ | 1,513,183 | ||||||
| (1) | This breakdown of net operating income before income tax is used for internal reporting and planning purposes, which is consistent with business segment information presented in Note 6 to our financial statements appearing elsewhere in this annual report. Information on the operations, assets and income of our financial services subsidiaries and affiliates is provided below under “—Subsidiaries.” |
The following table sets forth our total operating income, before expected credit losses, allocated among our principal business segments, for the years indicated:
| For the Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| (in millions of Ch$) | ||||||||||||
| Retail banking | Ch$ | 1,823,839 | Ch$ | 1,894,425 | Ch$ | 1,904,689 | ||||||
| Wholesale banking | 954,944 | 898,822 | 835,903 | |||||||||
| Treasury | 22,292 | 60,830 | 67,285 | |||||||||
| Subsidiaries | 233,275 | 243,095 | 252,570 | |||||||||
| Other (adjustments and eliminations) | (39,478 | ) | (46,887 | ) | (34,404 | ) | ||||||
| Total Operating Income, before expected credit losses (Chilean GAAP) | 2,994,872 | 3,050,285 | 3,026,043 | |||||||||
| Reconciliation to IFRS | 19,312 | 17,232 | 3,558 | |||||||||
| Total Operating Income, before expected credit losses (IFRS) | Ch$ | 3,014,184 | Ch$ | 3,067,517 | Ch$ | 3,029,601 | ||||||
| (1) | Related to intersegment operations. |
The following table sets forth a breakdown of our loan portfolio by customer and business segments for the year ended December 31, 2025:
| For the Year Ended December 31, 2025 | ||||||||||||||||
| Commercial Loans |
Mortgage Loans |
Consumer Loans |
Total Loans |
|||||||||||||
| (in millions of Ch$) | ||||||||||||||||
| Individuals (Personal Banking) | Ch$ | 2,679,901 | Ch$ | 12,850,859 | Ch$ | 5,522,986 | Ch$ | 21,053,746 | ||||||||
| Small & Medium Enterprises | 4,105,037 | 1,047,132 | 238,069 | 5,390,238 | ||||||||||||
| Retail Banking | 6,784,938 | 13,897,991 | 5,761,055 | 26,443,984 | ||||||||||||
| Corporate Banking | 4,748,556 | — | 9 | 4,748,565 | ||||||||||||
| Special Businesses | 2,651,933 | — | 200 | 2,652,133 | ||||||||||||
| Large Companies | 5,323,928 | 18,627 | 4,733 | 5,347,288 | ||||||||||||
| Wholesale Banking | 12,724,417 | 18,627 | 4,942 | 12,747,986 | ||||||||||||
| Subsidiaries | — | — | — | — | ||||||||||||
| Total Loans (Chilean GAAP) | 19,509,355 | 13,916,618 | 5,765,997 | 39,191,970 | ||||||||||||
| Reconciliation to IFRS | 40,192 | 17,851 | 4,301 | 62,344 | ||||||||||||
| Total Loans (IFRS) | Ch$ | 19,549,547 | Ch$ | 13,934,469 | Ch$ | 5,770,298 | Ch$ | 39,254,314 | ||||||||
Retail Banking Segment
Our retail banking segment serves the financial needs of individuals and small and medium-sized companies through our branch network. As of December 31, 2025, loans granted by our retail banking segment amounted to Ch$26,443,984 million and represented 67.5% of our total loans as of the same date.
In terms of composition, as set forth in the following table, as of December 31, 2025, our retail segment’s loan portfolio was principally focused on residential mortgage loans, which represented 52.6% of the segment’s loan book. The remaining loans were distributed between commercial loans (25.7%) and consumer loans (21.8%).
| As of December 31, 2025 | ||||||||
| (in millions of Ch$, except percentages) | ||||||||
| Commercial loans | ||||||||
| Commercial credits | Ch$ | 5,889,612 | 22.3 | % | ||||
| Leasing contracts | 613,391 | 2.3 | ||||||
| Other loans | 281,935 | 1.1 | ||||||
| Total Commercial Loans | 6,784,938 | 25.7 | ||||||
| Residential Mortgage Loans | 13,897,991 | 52.6 | ||||||
| Consumer Loans | ||||||||
| Installment loans | 3,374,691 | 12.8 | ||||||
| Credit cards | 2,091,618 | 7.9 | ||||||
| Lines of credit and other loans | 294,746 | 1.1 | ||||||
| Total Consumer Loans | 5,761,055 | 21.8 | ||||||
| Total | Ch$ | 26,443,984 | 100.0 | % | ||||
We serve the retail market through our Retail Banking Segment, which is responsible for offering financial services to individuals and microentrepreneurs, as well as small and medium-sized companies with annual sales of up to UF70,000 (approximately Ch$2,781.0 million as of December 31, 2025). This segment manages our branch network operating under the brand names “Banco de Chile” and “Banco Edwards Citi” and had 217 branches as of December 31, 2025. For purposes of personal banking, the Individuals and SME Area maintain a segmentation to provide customers of middle- and high-income segments with tailored value propositions.
The strategy followed by our Retail Banking Segment is mainly focused on sub-segmentation, multi-brand positioning, cross-selling of lending and non-lending products and service quality based on customized service models for specific customer needs. Also, loyalty programs have been increasingly incorporated into our commercial targets for each sub-segment and they have enabled us to increase the use of our credit cards and our fee-based income. In addition, the area’s operations count on the support of specialized call centers, mobile and internet banking services, along with a wide range of management tools that allow us to measure returns, the performance of cross sold products and the effectiveness of marketing campaigns. Similarly, over the last years the area has strengthened value offering for SMEs by promoting a close relationship, while accompanying entrepreneurs in the diverse stages of their life cycle.
We complement the services offered by our other business segments, especially our wholesale market segment, by offering services to employers, such as direct deposit capabilities for payroll payment purposes, which in turn enable employees to use our deposit services.
In 2025, the Retail Banking Segment focused on targeted growth opportunities while developing new business solutions and benefits to improve our customers’ experience. Based on these pillars, this business segment recorded a 2.5% growth in personal banking customers (number of individuals), which was partly explained by revised value propositions that were split into two customer clusters composed of transactional (retail, young and traditional) and relational (preferential and private) customers in order to better satisfy their needs. Likewise, we introduced tailored value offerings for both digitally-oriented customers and customers who prefer more traditional channels. We also continued to reinforce the FAN Account ecosystem, which includes the FAN Ahorro account, a digital savings account designed for both current and new customers that simplifies the saving process and earns monthly interest. As a result, this business segment recorded a 33.3% growth in savings accounts during 2025. Moreover, this business segment achieved a 3.6% increase in checking account holders in 2025, which was in part the consequence of revised current account plans that became simpler, more flexible and more connected to the benefits of the loyalty program.
Also, during 2025, this segment continued to advance in the penetration of payment channels, which translated into: (i) a 4.1% increase in credit card-related loans, which allowed us to gain market share in this lending product, (ii) an increased amount of transactions made through payment channels, as reflected by a 6.4% and 11.8% rise in purchases with both credit and debit cards, respectively, together with annual increases of 4.0% and 2.4% in the total stock of credit and debit cards issued in 2025, respectively, when compared to 2024, (iii) an increase of 3.7% in consumer installment loans that enabled us to achieve a market share of 20.4% as of December 31, 2025, and (iv) the consolidation of the FAN Account ecosystem, which reached more than two million customers in 2025 on the grounds of improved service quality and strengthened relationships with customers.
During 2025, the SME banking unit continued to implement digital solutions to provide timely and efficient services while expanding the range of digital products. As a result, in 2025, approximately 79.0% of transactions carried out by SME customers were conducted digitally, including loan applications and payment orders. In line with this strategy, current accounts opened by the SME banking unit increased 33.6% when compared to 2024, reaching approximately 31,600 new clients. Current accounts opened under the FAN Emprende product increased 30.9% in 2025 when compared to 2024, which resulted in approximately 61,000 total FAN Emprende clients. This growth was primarily driven by the introduction of new commercial plans that leveraged technological capabilities that have been developed for this type of customer. In addition, we enhanced our value proposition for SMEs through the establishment of Banchile Pagos, our acquiring and processing company for credit and debit cards, intended to improve customer experience, especially for SMEs and middle-market companies, through payment and cash management solutions as part of the four-party model prevailing in the cards market.
As of December 31, 2025, the Retail Banking segment served 1,477,998 core customers (customers holding a current account or a loan) of whom 1,290,180 were individuals and 187,818 were small and medium-sized Chilean companies. This customer base resulted in total loans to 1,168,840 borrowers, including 148,198 residential mortgage loan debtors, 138,708 commercial loan debtors, 562,422 utilized lines of credit, and 319,512 installment loans. As of December 31, 2025, 79.6% of loans managed by this segment were granted to individuals, representing approximately Ch$21,053,743 million, while 20.4% of the loans of the segment were granted to SMEs, amounting to Ch$5,390,238 million.
We offer a variety of financial services to individuals, SMEs and microbusinesses, directly through the Individuals and SME Area or indirectly through our subsidiaries, such as current accounts, automatic bill payment, debit cards, credit cards, revolving credit lines, residential mortgage loans, consumer loans, commercial loans, mortgage loans for general purposes, leasing agreements, factoring services, mutual funds management and stock brokerage, trade finance, payments and collections, insurance brokerage (which includes life and casualty insurance), acquiring and processing services for credit and debit cards, savings instruments and foreign currency services.
Installment Loans
Our consumer installment loans are generally granted, up to a customer’s approved credit limit, to afford purchases of goods and/or services, such as cars, travel, household furnishings and education, among others. Consumer loans may be denominated in both pesos and UF, bear fixed or variable interest rates and are generally repayable in installments over a period of up to 46 months.
As of December 31, 2025, we had Ch$3,375,533 million in installment loans granted by the Bank as a whole, which accounted for 58.5% of our total consumer loans. Most of these installment loans are denominated in Chilean pesos and are payable on a monthly basis.
Residential Mortgage Loans
As of December 31, 2025, we had outstanding residential mortgage loans of Ch$13,916,618 million, which represented 35.5% of our total loan book as of the same date. According to information published by the CMF, as of December 31, 2025, we were Chile’s third-largest private sector bank in terms of year-end mortgage loan balances, accounting for approximately 15.5% of the mortgage loans granted by the Chilean banking industry, excluding the operations of banks’ subsidiaries operating abroad.
Our residential mortgage loans are generally denominated in UF and have maturities ranging from five to 30 years. As of December 31, 2025, the average residual maturity of our residential mortgage loan portfolio was 16.6 years. Originally, we funded our residential mortgage loans through the issuance of mortgage finance bonds, which are recourse obligations only to us with payment terms that are matched to the residential loans. Also, the mortgage finance bonds bear real market interest rates plus a fixed spread over the variable rate of the UF, which permits us to partially reduce our exposure to interest rate fluctuations and inflation. Chilean banking regulations allow us to finance up to 100% of a residential mortgage loan with mortgage finance bonds, based on the purchase price of the property securing the loan or the appraised value of such property. In addition, we generally require that the monthly payments on a residential mortgage loan do not exceed 25% of the borrower’s household after tax monthly income. However, that limit may be adjusted for the middle- and high-income population segments.
For loans that finance a higher portion of the property appraised value, we demand that customers comply with stricter requirements, which are verified during the credit assessment stage. These requirements are related to: (i) the history of the relationship between the Bank and the customer (new or current customer), (ii) credit risk scores, (iii) monthly income, (iv) type of job (employed or self-employed) and (v) years employed. In order to illustrate the above, the table below sets forth an example of requirements for residential mortgage loans that finance up to 80% and more than 80% of the property value, with a common term and granted to employed as well as self-employed new customers.
Credit–Granting Requirements
| Requirements | ||||
| (in millions of Ch$, except percentages) | ||||
| Loan–to–Value Ratio | ≤ 80% | >80%(4) | ||
| New Customers(1) | ||||
| Employed | ||||
| Years employed | ≥ 1 year | ≥ 1 year | ||
| Monthly Income | ≥ Ch$0.75 | > Ch$3.0 | ||
| Self-Employed | ||||
| Years Employed(2) | ≥ 2 years | ≥ 2 years | ||
| Monthly Income | ≥ Ch$0.75 | > Ch$3.0 | ||
| New Customers with a University Degree(3) | ||||
| Employed | ||||
| Years employed | ≥ 1 year | ≥ 1 year | ||
| Monthly Income | ≥ Ch$0.75 | > Ch$1.2 | ||
| Self-Employed | ||||
| Years Employed(2) | ≥ 2 years | ≥ 2 years | ||
| Monthly Income | ≥ Ch$0.75 | > Ch$1.2 | ||
| (1) | Refers to customers with or without a university degree, who do not supplement income with a guarantor’s income. |
| (2) | In the case of self-employed customers, years employed refers to the minimum period of time in which the customer has filed annual tax bills with the Chilean Internal Revenue Service. |
| (3) | Refers to customers with a university degree awarded by a group of universities according to our internal credit approval process. |
| (4) | Figures in Ch$ are expressed in UF in our credit granting protocols and have been translated into Ch$ as of December 31, 2025 for comparison purposes. |
During 2025, 1.3% of the residential mortgage loans granted to our customers financed between 90% and 100% of the property value. Similarly, during 2025, loans financing between 75% and 90% of the property appraised value represented 59.5% of these loans, loans financing between 50% and 75% of the property value represented 32.9% of these loans, and loans financing less than 50% of the property value represented 6.2% of these loans. According to our prudent risk approach, we have been tightening our credit granting policy for residential mortgage loans by restricting the loan financing limit as a percentage of the property’s value, although higher financing may be granted to longstanding customers within specific segments.
An additional feature of our mortgage loans is that mortgaged property sometimes, and under certain conditions, secures some of the mortgagor’s other credits with us, including installment loans and due balances associated with credit cards and credit lines. Our total amount of loans secured by real estate guarantees, under Chilean GAAP, their loan–to–value (LTV) ratio and their relative share in our total loan portfolio, as of December 31, 2025, are depicted in the table below:
| As of December 31, 2025 | ||||||||||||
| Outstanding Balance |
LTV(2)(3)(4) | % of Bank’s Total Loans | ||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||
| Secured Loans(1) | ||||||||||||
| Residential Mortgage Loans | Ch$ | 13,916,618 | 66.0 | % | 35.5 | % | ||||||
| Other than Residential Mortgage Loans | 1,230,877 | 17.2 | 3.1 | |||||||||
| Total Secured Loans | Ch$ | 15,147,495 | 71.9 | % | 38.6 | % | ||||||
| (1) | Corresponds to the Bank's total secured loans and not solely those associated with the Retail Banking Segment. |
| (2) | For residential mortgage loans, the LTV ratio is computed as the balance of secured loans divided by the value of their associated collateral. |
| (3) | For other-than-residential mortgage loans, the LTV ratio is computed as the balance of other-than-residential mortgage loans divided by the value of the remaining collateral, after deduction of the balance of the associated residential mortgage loan, as such collateral is initially established to secure the residential mortgage loan. |
| (4) | The LTV ratio for total secured loans is computed as the sum of the balances of residential mortgage and other-than-residential mortgage loans divided by the total value of the associated collateral. |
The LTV ratios provided above are based on estimated property values that we update monthly with the collateral valuation models managed by our Corporate Risk Division. These models determine a rate of depreciation that provides an updated collateral value, based on variables such as geographic location, last appraisal date, type of property and type of customer. Accordingly, the LTV ratios set forth above take into account the most recent available data regarding collateral values.
In addition, the following table sets forth the composition of the other-than-mortgage loans secured by real estate guarantees:
| As of December 31, 2025 | ||||||||
| (in millions of Ch$, except percentages) | ||||||||
| Secured Other-than-Mortgage Loans(1) | ||||||||
| Consumer Loans | Ch$ | 812,065 | 66.0 | % | ||||
| Credit Cards | 366,847 | 29.8 | ||||||
| Credit Lines | 51,965 | 4.2 | ||||||
| Total Secured Other-than-Mortgage Loans | Ch$ | 1,230,877 | 100.0 | % | ||||
| (1) | Corresponds to the Bank’s total secured Other-than-Mortgage Loans and not only those associated with the Retail Banking Segment. |
Unlike in other countries, in addition to the specific legal rights afforded by the mortgage loan (including foreclosure rights), the Bank may collect the pending balance of the mortgage loan over other assets of the mortgage debtor based on certain legal liens provided by law (derecho de prenda general). Regarding the foreclosure processes, as permitted by Chilean regulations we may write-off secured loans (such as residential mortgage loans) the earlier of 48 months from the date the loans become overdue and once we have made all efforts for recovering the past-due loans without success. This applies to residential mortgage loans financed with mortgage finance bonds as well as for Mutuos Hipotecarios. Our foreclosure processes comply with the procedures specified by Chilean regulation. However, as we strive to improve our collection processes, we have achieved average terms of 13 months for foreclosures associated with residential mortgage loans.
As for our historical loss rates, we periodically review our collateral pricing models by adjusting the parameters that support them, such as appreciation and depreciation rates, as well as updated recovery and loss rates, based on historical and empirical data. Thus, we normally revise our collateral pricing models by incorporating updated information from re-appraised assets or foreclosure processes that have been completed by the Bank in the past.
In addition, the valuation of guarantees is based on a prudent approach, which aims to anticipate and cover unexpected reductions in their market price as a result of changes in market variables, such as an unforeseen slowdown in the global or local economy, lack of liquidity of real estate assets or decrease in real salaries. Accordingly, our collateral pricing models depreciate the value of the guarantee regarding the market value determined by an independent appraiser. This approach has allowed us to minimize the loss rates, as the value obtained from auctions (if foreclosure applies) generally exceeds the value assigned to the asset as guarantee.
Credit Cards
As of December 31, 2025, we issued both individual and corporate Visa and MasterCard credit cards. In addition to traditional credit cards, our portfolio also includes co-branded cards. As of December 31, 2025, we had two loyalty programs or cobranding agreements, namely “Travel Club” and “Entel Visa.” Credit cards issued under these cobranding agreements supplemented the credit cards that we issued under the brand names Banco de Chile and Banco Edwards-Citi. In addition, as of December 31, 2025, we offered 13 types of credit cards, targeting diverse types of segments and encompassing different benefits, including: Visa Corporate, Visa Dorada, Visa Infinite, Visa Internacional, Visa Platinum, Visa Signature, Visa Entel, Visa ChilePyme, MasterCard Black, MasterCard Dorada, MasterCard Internacional, MasterCard Platinum and MasterCard Corporate.
Our affiliate, Transbank S.A., provides us with services related to payment transactions support. As of December 31, 2025, Transbank S.A. had 10 shareholders (including us) and as of the same date, our equity ownership in Transbank S.A. was 26.16%.
As of December 31, 2025, we had 1,605,991 valid credit card accounts, with 1,832,845 credit cards issued to individuals and small and medium sized companies (according to the CMF), held by 1,592,815 customers. Total charges on our credit cards during 2025 amounted to approximately Ch$9,171,006 million, with Ch$8,367,719 million corresponding to purchases in Chile and abroad and Ch$803,287 million corresponding to cash withdrawals both within Chile and abroad. The amount of purchases made by our customers accounted for 17.2% of the total purchase volume of banks’ credit cards in 2025, according to statistics provided by the CMF. Similarly, our market share in terms of cash withdrawals and automatic bill charges were 18.5% and 14.7% as of the same date, according to the CMF.
As of December 31, 2025, our credit card loans to individuals and small and medium sized companies amounted to Ch$2,091,618 million and represented 36.3% of our retail market business segment’s consumer loans.
We believe that the Chilean market for credit cards has attractive growth potential, especially in the middle-income customer segment, where banking penetration is still low. Likewise, fees associated with credit cards should continue to decline due to increasing competition from traditional banks operating in Chile and non-banking players, such as large department stores and other companies, from diverse industries, involved in the issuance of credit cards. As a result, we strive to develop customized commercial strategies to reinforce this payment channel by applying business intelligence tools that enable us to satisfy the needs of our diverse customer base. Also, based on the new rules issued in the last years by our regulator in relation to the four-party model and its implications for the processing and merchant acquiring services market for credit and debit cards, in 2024, we established Banchile Pagos , which offers acquiring and processing services for credit and debit cards. This company started operations in December 2025 and is expected to widen the value offerings we provide to companies, particularly SMEs and middle market companies.
Regarding the four-party new model, a technical committee is responsible for determining the maximum interchange fees that may be charged by credit card issuers (such as banks, including us) to companies that provide merchant acquiring services. Since its inception functioning the technical committee has reduced the maximum interchange fees twice, which resulted in lower net fee income for banks. Although the fees were scheduled to be redefined in October 2024, the process was again postponed due to the variety of comments received by the technical committee from market participants, in light of the significant changes that have occurred in the credit and debit card market in recent years. Thus, as of the date of this annual report, the interchange rates were the same as those in effect on October 1, 2024 (0.5% for debit cards, 1.14% for credit cards and 0.94% for prepaid cards). For more information see Item 3. Key Information–Risk Factors–Risks Relating to our Operations and the Chilean Banking Industry–Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations–Other Legal and Regulatory Requirements.
Commercial Credits
Commercial credits granted by our Retail Banking Segment mainly consist of project finance loans, trade finance loans, long-term financing and working capital loans granted to small and medium sized companies, which are denominated in Chilean pesos, UF and U.S. dollars and may bear fixed or variable rates of interest with average maturities of approximately five years (excluding non-residential mortgage loans). As of December 31, 2025, our Retail Banking Segment had outstanding commercial loans of Ch$5,889,613 million, representing 22.3% of the retail banking segment’s total loans and 15.0% of our total loans as of the same date.
Leasing Contracts
Leasing contracts are financial leases for capital equipment and property. Leasing contracts may bear fixed or variable interest rates and they generally have terms that range from one to five years for equipment and from five to 20 years for properties. Most of these contracts are denominated in UF. As of December 31, 2025, our Retail Banking Segment had outstanding leasing contracts of Ch$613,393 million, representing 2.3% of the retail banking segment’s total loans and 1.6% of our total loans as of the same date.
Lines of Credit
As of December 31, 2025, the Retail Banking Segment had approximately 1,129,414 approved lines of credit to individual customers and small and medium sized companies. Also, this segment had outstanding advances to 562,422 individual customers and small and medium sized companies that totaled Ch$292,113 million, or 1.1% of the retail banking segment’s total loans and 0.7% of our total loans.
Our lines of credit for individual customers are generally available on a revolving basis, up to an approved credit limit, and may be used for any purpose. Advances under lines of credit are denominated in Chilean pesos and bear an interest rate that is set monthly.
Debit Cards
We offer different types of debit cards to our customers. Depending on their specifications, these cards can be used for banking transactions at ATMs that operate on the local network provided by Redbanc and the local network of merchants participating in the local Redcompra debit program. Also, our debit cards can be used internationally through the Visa International PLUS network or the international network of merchants associated with the Electron program. We name these debit cards depending on the card’s specific features and the link between the brand and target market which they serve. During 2025, we offered the following debit cards: Visa Infinite, Visa Estándar, Visa Estándar FAN, Visa Signature, Visa Platinum and Visa Debit Business. As of December 31, 2025, according to the CMF, we held a 11.5% market share of debit card transactions, which corresponds to approximately 527.9 million transactions throughout the year.
Deposit Products
We strategically offer deposit products to increase our deposit-taking activities as a means of diversifying our sources of funding. We believe that the deposits of our individual customers provide us with a relatively low-cost, stable source of funding, as well as an opportunity to cross-market our other products and services. In this regard, we offer current accounts, time deposits and savings accounts to our individual customers. Current accounts are Chilean peso-denominated and the majority bear no interest (approximately 0.04% or 516 of our total current accounts are interest-bearing), and savings accounts are denominated in UF and bear a fixed-interest rate. Time deposits may be denominated in Chilean pesos, UF and U.S. dollars and most of them bear interest at a fixed rate with terms that range between seven to 360 days.
While demand has historically been focused on UF-denominated deposits during periods of high inflation, demand for Chilean peso-denominated deposits has increased in recent years as a consequence of lower and more stable inflation rates in Chile.
As a result of the inflationary pressure due to the boost in household spending caused by a liquidity surplus in the economy in 2021 and 2022, the Central Bank then adopted an aggressive monetary policy, which increased from 0.5% in July 2021 to 4.00% in December 2021 and to 11.25% in December 2022. Since inflation took longer-than-expected to decline, the Central Bank kept the monetary policy interest rate at 11.25% until July 2023, after the 12-month CPI variation began to show signs of retreat. Based on that, the Central Bank reduced the monetary policy interest rate gradually until such rate reached 8.25% in December 2023. Due to both the higher opportunity cost of funds and the loss in purchasing power due to inflation, depositors began to move from demand deposits to short-term time deposits, which resulted in annual declines of 27.8% and 0.5% in year-end total demand deposit balances for us in 2022 and 2023, respectively. In 2024, even though inflation registered a moderate rebound by ending the year at 4.5%, measured as CPI variation, the Central Bank continued to have an easing monetary stance by decreasing the reference interest rate to 5.0% in December 2024. In 2025, the Central Bank maintained the monetary policy interest rate at 5.0% for most of the first half, adopting a cautious stance given global uncertainty and inflation risks. In September 2025, the Central Bank held the rate at 4.75% in response to stronger domestic activity and persistent core inflation pressures. In December 2025, the Central Bank reduced the rate to 4.5%, the second cut of the year, as inflation continued to improve. As a result, given the downward trend in interest rates, the annual average balances of time deposits managed by our Retail Banking Segment decreased by 8.1% in 2024 and by 8.9% in 2025. Also, given the lower opportunity cost once inflation began to decrease, average demand deposits managed by the Retail Banking increased by 6.1% in 2025, compared to the 3.8% increase recorded in 2024 given the prevailing level of interest rates at that point.
Wholesale Banking Segment
Our wholesale banking segment serves the needs of corporate customers. In 2025, this business segment recorded annual total operating income before expected credit losses of approximately Ch$835,903 million, which represented 27.6% of our total operating revenues. Also, for the year ended December 31, 2025, this segment recorded an income before income tax of Ch$630,597 million, which represented 41.7% of our consolidated income before income tax. As of December 31, 2025, loans granted by this business segment amounted to Ch$12,747,986 million and represented 32.5% of our total loan portfolio.
The following table sets forth the composition of our portfolio of loans to the wholesale market as of December 31, 2025:
| As of December 31, 2025 | ||||||||
| (in millions of Ch$, except percentages) | ||||||||
| Commercial credits | Ch$ | 9,282,744 | 72.8 | % | ||||
| Leasing loans | 1,482,402 | 11.6 | ||||||
| Foreign trade loans | 1,073,770 | 8.4 | ||||||
| Factoring loans | 769,661 | 6.0 | ||||||
| Other loans | 139,409 | 1.2 | ||||||
| Total | Ch$ | 12,747,986 | 100.0 | % | ||||
As of December 31, 2025, we had 10,681 debtors out of a total of 27,590 core customers (customers holding either a loan or a current account with us). Our wholesale customers are engaged in a wide range of economic sectors. As of December 31, 2025, loans granted by our wholesale banking segment were mainly related to:
| ● | financial services (approximately 20.3% of all loans granted by this business segment); |
| ● | manufacturing (approximately 9.1% of all loans granted by this business segment); |
| ● | commerce and trade (approximately 7.5% of all loans granted by this business segment); |
| ● | construction (approximately 7.1% of all loans granted by this business segment); |
| ● | agriculture, forestry and fishing (approximately 5.9% of all loans granted by this business segment); |
| ● | communication and transportation (approximately 3.9% of all loans granted by this business segment); |
| ● | utilities (approximately 2.3% of all loans granted by this business segment); |
| ● | community, social and personal services (approximately 2.3% of all loans granted by this business segment); and |
| ● | mining (approximately 1.2% of all loans granted by this business segment). |
In line with our strategy of identifying and differentiating market segments in order to provide improved value propositions for a diversified customer base, three of our areas provide our wholesale customer base with banking and financial products and services: (i) the Corporate Banking Unit, (ii) the Special Businesses Banking Unit and (iii) the Large Companies Banking Unit.
Corporate Banking Unit
The Corporate Banking Unit provides banking products and services to corporations with annual sales exceeding UF3.0 million (approximately Ch$119,183.9 million as of December 31, 2025). The customers served by this banking unit consist of a large proportion of Chile’s publicly-traded and non-listed companies, subsidiaries of multinational companies and conglomerates operating in Chile (including those operating in the financial, commercial, manufacturing, industrial and infrastructure sectors), as well as projects and concessions. Thus, in addition to traditional lending products, this banking unit offers a wide range of non-lending services related to project finance, deal structuring associated with business acquisitions, cash management, deposits and funds administration, financial advisory, among others. Also, this banking unit oversees and coordinates our Investment Banking Business (through Banchile Asesoría Financiera).
As of December 31, 2025, the Corporate Banking Unit had approximately 479 debtors out of a total of approximately 2,108 core customers (customers holding either a current account or a loan with us). As of the same date, this banking unit managed total outstanding loans of Ch$4,748,565 million, which represented 12.1% of our total loan book as of the same date.
The following table sets forth the composition of our Corporate Banking Unit’s loan portfolio as of December 31, 2025:
| As of December 31, 2025 | ||||||||
| (in millions of Ch$, except percentages) | ||||||||
| Commercial credits | Ch$ | 3,680,374 | 77.5 | % | ||||
| Factoring loans | 520,625 | 11.0 | ||||||
| Foreign trade loans | 316,312 | 6.7 | ||||||
| Leasing loans | 169,255 | 3.6 | ||||||
| Other loans | 61,999 | 1.2 | ||||||
| Total | Ch$ | 4,748,565 | 100.0 | % | ||||
We offer a wide range of products to corporations that include short- and long-term financing, working capital loans, mortgage loans, leasing, long-term syndicated loans and factoring, as well as investment banking services offered by our subsidiary Banchile Asesoría Financiera S.A. We also offer cash management services, including payment services (payrolls, suppliers, pensions, dividends, etc.), collection services and connections to international funds transfer networks, as well as traditional deposit products, in particular current accounts.
In cash management, as of December 31, 2025, we were party to approximately 13,324 payment service contracts and approximately 847 collection service agreements with corporations. We believe that cash management and payment service contracts provide us with a source of low-cost deposits and the opportunity to cross sell our products and fees to payees, many of whom maintain accounts with us. Under our collection contracts, we act as a collection agent for our corporate customers, providing centralized collection services for their accounts receivable and other similar payments. For the year ended December 31, 2025, joint volumes associated with collection and payment agreements increased by approximately 33.4% when compared to 2024.
In order to provide highly competitive and differentiated services, in conjunction with our Treasury segment, our Corporate Banking Unit offers its customers diverse solutions to meet their liquidity, short-term loans and hedging needs. Similarly, we offer derivative products, which we believe have become increasingly important, especially those associated with Chilean peso-U.S. dollar and UF-U.S. dollar forward contracts, cross currency swaps, interest rate swaps and options, among other derivative products.
In addition, the Corporate Banking Unit offers specialized services of assets custody and financial advisory in diverse matters such as capital increases, purchase and sale of shares, private equity placements, public share offerings, mergers and acquisitions, capital markets, initial public offerings and bond placements.
In recent years, the market for loans to corporations in Chile has reduced margins due to increasing competition and moderate expansion in terms of borrowing. More recently, some local companies have raised long-term financing in the local and foreign capital markets. For this reason, we have focused on optimizing the profitability in this segment by enhancing our cross selling through the generation and enhancement of fee-based services, such as payroll processing, dividend payments and billing services, as well as computer banking services. This strategy has enabled us to maintain profitable and long-term relationships with our corporate customers while preserving the ability to grant loans when appropriate business opportunities arise.
In 2025, the Corporate Banking Unit continued to develop digital capabilities and update its products and services to enhance customer experience. This banking unit also strengthened the monitoring of commercial performance through the adoption of digital tools, improved prioritization and tracking of opportunities in the commercial pipeline and increased the effectiveness of campaigns through better segmentation and monitoring. Notwithstanding these efforts, 2025 was a challenging year for this banking unit due to macroeconomic and business dynamics. As a result, total loans managed by this banking unit declined 14.3% compared to 2024, mainly driven by lower demand for loans from corporations, the maturity of specific trade finance operations, and the emergence of alternative funding sources for customers in the capital markets.
Special Businesses Banking Unit
The Special Business Banking Unit provides tailored financial products and services to the real estate and construction industries, as well as family offices. Thus, in addition to traditional lending products, this area offers a wide range of non-lending services related to project finance, deal structuring associated with business acquisitions, cash management, custody services, deposits and funds administration, investment banking, derivative instruments, among others.
As of December 31, 2025, our Special Businesses Banking Unit had approximately 678 borrowers out of a total of 4,874 core customers (those holding either a current account or a loan with us). In addition, as of the same date, loans granted by this area accounted for Ch$2,652,133 million, which represented 6.8% of our total loans.
The following table displays the loan portfolio composition of the Special Businesses Banking Unit as of December 31, 2025:
| As of December 31, 2025 | ||||||||
| (in millions of Ch$, except percentages) | ||||||||
| Commercial credits | Ch$ | 2,533,422 | 95.5 | % | ||||
| Leasing loans | 72,389 | 2.7 | ||||||
| Other loans | 46,322 | 1.8 | ||||||
| Total | Ch$ | 2,652,133 | 100.0 | % | ||||
In 2025, the Special Businesses Banking Unit continued to deploy a differentiation strategy focused on the family office sub-segment. In this group of customers, relationships play a significant role and, therefore, this area has sought to strengthen the team’s capabilities while coordinating with certain of our subsidiaries in order to widen the value propositions by providing customers with an array of wealth management services and products tailored to their needs. Furthermore, over the past year, the Special Businesses Banking Unit strengthened its core services, including custody and trust services, as well as cash management, in order to remain a primary provider to its customers. In terms of loan balances, the Special Businesses Banking Unit recorded annual growth of 2.9% in total loans during 2025, driven by commercial loans and, to a lesser extent, leasing.
Large Companies Banking Unit
Our Large Companies Banking Unit provides a broad range of financial products and services to companies with annual sales that range from UF70,000 (approximately Ch$2,781.0 million as of December 31, 2025) to UF3.0 million (approximately Ch$119,183.9 million as of December 31, 2025). Customers served by this banking unit are those related to the commercial, manufacturing, agricultural, forestry, fishing and infrastructure sectors, among others.
As of December 31, 2025, this banking unit had 9,018 debtors out of a total of 19,070 core customers (those holding either a current account or a loan with us). Loans granted by the Large Companies Banking Unit amounted to Ch$5,347,288 million as of the same date, which represented 13.6% of our total loans.
The following table sets forth the loan portfolio composition of the Large Companies Banking Unit as of December 31, 2025:
| As of December 31, 2025 | ||||||||
| (in millions of Ch$, except percentages) | ||||||||
| Commercial credits | Ch$ | 3,068,948 | 57.4 | % | ||||
| Leasing loans | 1,240,758 | 23.2 | ||||||
| Foreign trade loans | 750,362 | 14.0 | ||||||
| Factoring loans | 214,230 | 4.0 | ||||||
| Other loans | 72,990 | 1.4 | ||||||
| Total | Ch$ | 5,347,288 | 100.0 | % | ||||
Products and services offered by this banking unit are mainly related to commercial loans, lines of credit, trade finance and foreign currency transactions, factoring services, leasing, non-residential mortgage loans, syndicated loans, investment banking and financial advisory services for mergers and acquisitions, debt restructuring assistance, payments and collections services, current accounts and related saving services, corporate credit cards, cash and investment management, derivative contracts to hedge against currency or interest rate fluctuations, insurance brokerage, among other traditional and tailored services. Also, this banking unit is in charge of coordinating and overseeing our Factoring Business, our Leasing Business and our Trade Finance Business.
The Large Companies Banking Unit aims to provide its customers with excellent service based on proactive financial support that enhances long-term relationships with customers. Over time, the banking unit has developed service models intended to take advantage of synergies arising from the interaction of account and specialized support executives responsible for ensuring comprehensive customer service. These models have enabled the Large Companies Banking Unit to strengthen customer relationships and product offerings.
In 2025, the Large Companies Banking Unit continued to prioritize a customer-centric approach by improving value offerings in order to provide more diverse lending products amid an economic slowdown. Even though this banking unit experienced a decrease of 0.5% in total loans in 2025 compared to 2024, mainly driven by the contraction in trade finance and commercial loans, it recorded growth in certain lending products through revised value offerings aimed at recovering its competitive position. In particular, leasing loans recorded a 4.1% increase in year-end balances.
Treasury Segment
Our Treasury segment provides a wide range of financial services to our customers, including currency intermediation, forward contracts, interest rate swaps, transactions under repurchase agreements and investment products based on bonds, mortgage finance bonds and deposits.
In addition, our Treasury segment is focused on managing currency, interest rate and term mismatches, ensuring our liquidity adequacy, managing the investment portfolio and trading fixed-income, foreign exchange and derivative instruments. This segment also manages mismatches with the aim of securing a suitable financing structure and diversifying its sources of financing.
The Treasury segment is also responsible for: (i) the issuance of short and long-term senior bonds, as well as long-term subordinated bonds, in Chile or abroad, (ii) monitoring compliance with regulatory deposit limits, technical reserves and maturity and rate matches/mismatches in the banking book, and (iii) monitoring our adherence to the security margins defined by regulatory limits, and risk limits for interest rate, currency and investment gaps. This segment continually monitors the Bank’s cost of funding by benchmarking with the rest of the local financial system and financing alternatives in Chile or abroad.
In 2025, our Treasury segment continued to develop a funding diversification strategy by conducting important transactions, principally in Chile. This strategy is aimed at maintaining a competitive cost of funding that supports the value offerings we provide to our wide customer base, improving our liquidity and managing financial exposures in the banking book by issuing debt of longer maturities that match long-term assets. For that reason, we are continually seeking alternative sources, types of instruments and markets. We generally conduct international bond issuances only if the cost (including costs of interest rate swaps and other transactional expenses) is below the cost of raising funds locally and the currency or interest rate exposure is fully hedged via cross currency swaps.
We are constantly striving to diversify our liability structure in terms of sources, types of instruments and markets with the aim of maintaining a competitive cost of funding and improving our liquidity. In 2025, we carried out the following debt placements:
| ● | Approximately Ch$1,572,815 million (denominated in UF) within the local market. These debt placements had an average maturity of 10 years, while bearing premium spreads over the relevant benchmark. |
| ● | We also executed placement of debt in the international capital markets totaling Ch$350,331 million in Switzerland, Hong Kong, Japan, Mexico and Australia, with an average maturity of 6.4 years, taking advantage of our higher credit rating within Chile and the Latin American region, which enabled us to benefit from liquidity and lower interest rates. These placements were accompanied by a cross-currency swap hedge arrangement in order to offset any effects associated with changes in foreign exchange that could impact our cost of funding. |
The funding functions carried out by our Treasury area are complemented by our international area, namely International Financial Institutions (“IFI”), which manages relations with correspondent banks worldwide, facilitating international payments and obtaining foreign currency financing for us. As of December 31, 2025, we have established a network of approximately 600 foreign banks, among which we maintained credit relationships with approximately 125 correspondent banks, from which we maintained 15 account relationships. IFI played an important role in structuring international transactions aimed at diversifying our funding.
From the business perspective, our Treasury segment recorded total operating income before expected credit losses of Ch$67,285 million in 2025, which was Ch$6,455 million higher than the amount recorded in 2024. This performance was primarily attributable to higher revenues generated by our Debt Securities desk as a result of favorable movements in local interest rates during 2025, particularly in the second and fourth quarters of the year. In addition, specific changes in U.S. dollar-denominated mid- and long-term interest rates during the third quarter of 2025 benefited the fair value adjustments of our U.S. dollar fixed-income portfolio. To a lesser extent, these interest-rate dynamics also affected the funding cost of fixed-income positions, consistent with the downward trend in short-term rates during 2025 following the monetary policy easing by the Central Bank. These effects more than offset the impact of higher impairment of financial instruments and lower income from the management of interest rate and inflation indexation gaps in the banking book (a portion of which is allocated to this segment).
Regarding the management of our securities portfolio, as of December 31, 2025, our total investment portfolio amounted to Ch$7,545,101 million and was composed of financial instruments measured at fair value through other comprehensive income that totaled Ch$3,560,203 million, securities held for trading measured at fair value through profit or loss amounting to Ch$3,523,961 million, and financial instruments measured at amortized cost totaling Ch$460,937 million. As for the type of instruments included in our securities portfolio, as of December 31, 2025, 58.8% consisted of securities issued by the Central Bank and the Chilean Government, 33.3% consisted of securities issued by local financial institutions, and 8.0% consisted of securities issued by non-financial Chilean corporate issuers, foreign issuers, and other securities. Our investment strategy is designed to supplement our expected profitability, risks and projections of economic variables while adhering to the regulatory guidelines and internal limits defined by our finance, international and market risk committee. In this regard, neither proprietary trading nor speculation on equity holdings are business goals for us and, therefore, equity instruments only represented 0.16% of our total investment portfolio as of December 31, 2025.
Subsidiaries
We have made several strategic long-term investments in financial services companies that are engaged in activities complementary to our commercial banking activities. In making these investments our goal is to develop a comprehensive financial group capable of meeting the diverse financial needs of our current and potential customers by offering traditional banking products and specialized financial services through our different subsidiaries.
The following table sets forth information with respect to our financial services subsidiaries in accordance with their statutory financial statements as of December 31, 2025:
| As of December 31, 2025 | ||||||||||||
| Assets | Equity | Net Income | ||||||||||
| (in millions of Ch$) | ||||||||||||
| Banchile Corredores de Bolsa S.A. | Ch$ | 1,162,125 | Ch$ | 186,447 | Ch$ | 37,524 | ||||||
| Banchile Administradora General de Fondos S.A. | 82,593 | 53,066 | 47,377 | |||||||||
| Banchile Corredores de Seguros Ltda. | 26,316 | 4,860 | 6,623 | |||||||||
| Socofin S.A.(1) | — | 307 | 307 | |||||||||
| Banchile Asesoría Financiera S.A. | 3,922 | 3,351 | (280 | ) | ||||||||
| Operadora de Tarjetas Banchile Pagos S.A. | 18,099 | 12,565 | (3,378 | ) | ||||||||
| Total | Ch$ | 1,293,055 | Ch$ | 260,596 | Ch$ | 88,173 | ||||||
| (1) | Socofin S.A. was absorbed by the Bank on July 4, 2025. |
The following table sets forth information with respect to our ownership interest in our financial services subsidiaries as of December 31, 2025:
| Ownership Interest | ||||||||||||
| Direct (%) | Indirect (%) | Total (%) | ||||||||||
| Banchile Corredores de Bolsa S.A. | 99.70 | % | 0.30 | % | 100.00 | % | ||||||
| Banchile Administradora General de Fondos S.A. | 99.98 | 0.02 | 100.00 | |||||||||
| Banchile Corredores de Seguros Ltda. | 99.83 | 0.17 | 100.00 | |||||||||
| Banchile Asesoría Financiera S.A. | 99.96 | — | 99.96 | |||||||||
| Operadora de Tarjetas Banchile Pagos S.A. | 99.90 | % | 0.10 | % | 100.00 | % | ||||||
Securities Brokerage Services
We provide securities brokerage services through Banchile Corredores de Bolsa S.A. is registered as a securities broker with the CMF, the regulator of Chilean publicly listed companies, and is a member of the Santiago Stock Exchange and the Chilean Electronic Stock Exchange. Since it was founded in 1989, Banchile Corredores de Bolsa S.A. has provided stock brokerage services, fixed income investments and foreign exchange products to individuals and companies through our branch network. In early 2009, Citibank Agencia de Valores S.A. merged with Banchile Corredores de Bolsa S.A.
During the year ended December 31, 2025, Banchile Corredores de Bolsa S.A. recorded an aggregate stock trading turnover on the Santiago Stock Exchange and the Chilean Electronic Stock Exchange that amounted to approximately Ch$14,258,509 million, which represented a 13.1% market share within the Chilean stock market.
Also, as of December 31, 2025, Banchile Corredores de Bolsa S.A. had equity amounting to Ch$186,447 million and, for the year ended December 31, 2025, recorded net income of Ch$37,524 million, which represented 3.2% of our consolidated net income for that period.
Mutual and Investment Fund Management
Since 1980, we have provided mutual fund management services through Banchile Administradora General de Fondos S.A. As of December 31, 2025, according to data published by the Chilean Association of Mutual Funds, Banchile Administradora General de Fondos S.A. was the largest mutual fund manager in Chile, managing approximately 22.5% of all Chilean mutual funds’ assets. Also, as of December 31, 2025, Banchile Administradora General de Fondos S.A. operated 40 mutual funds and had Ch$15,834,009 million in assets under management owned by 468,022 corporate and individual investors. As of the same date, Banchile Administradora General de Fondos S.A. operated 41 public investment funds. Banchile Administradora General de Fondos S.A. managed Ch$2,204,779 million in net assets associated with these public investment funds on behalf of 2,119 participants. As of December 31, 2025, Banchile Administradora General de Fondos S.A. managed five private investment funds of Ch$58,378 million in net assets associated with these private investment funds on behalf of 54 participants. During 2025, Banchile Administradora General de Fondos S.A. created one new mutual fund and two new public investment funds.
The mutual and investment funds mentioned above are managed by Banchile Administradora General de Fondos S.A., but neither the Bank nor Banchile Administradora General de Fondos S.A. have ownership of these funds and, accordingly, they are not booked in our audited consolidated financial statements.
The following table sets forth information regarding the various mutual funds managed by Banchile Administradora General de Fondos S.A. as of December 31, 2025:
| As of December 31, 2025 | ||||||||||
| Name of Fund | Type of Fund | Net Asset Value (in millions of Ch$) |
Number of Investors | |||||||
| Agresivo | Blend | Ch$ | 41,201 | 5,508 | ||||||
| Ahorro Nominal | Fixed income (medium/long term) | 373,443 | 5,614 | |||||||
| Alianza | Fixed income (medium/long term) | 25,025 | 3,451 | |||||||
| Asiatico Emergente | Equity | 18,752 | 2,272 | |||||||
| Blackrock ESG | Equity | 15,185 | 1,562 | |||||||
| Capital Empresarial | Fixed income (short term) | 1,600,037 | 29,547 | |||||||
| Capital Financiero | Fixed income (short term) | 2,997,270 | 30,795 | |||||||
| Conservador | Blend | 90,854 | 6,558 | |||||||
| Corporate Dólar | Fixed income (short term) | 1,522,805 | 46,175 | |||||||
| Deposito XXI | Fixed income (medium/long term) | 175,933 | 10,065 | |||||||
| Deuda Dólar | Fixed income (medium/long term) | 196,624 | 4,146 | |||||||
| Deuda Global | Fixed income (medium/long term) | 31,863 | 954 | |||||||
| Deuda Soberana | Fixed income (medium/long term) | 12,656 | 711 | |||||||
| Disponible | Fixed income (short term) | 389,816 | 94,042 | |||||||
| Dividendos Acciones Chilenas | Equity | 105,936 | 4,086 | |||||||
| Emerging | Equity | 6,017 | 1,499 | |||||||
| Emerging Dólar | Equity | 5,878 | 535 | |||||||
| Estatal Largo Plazo | Fixed income (medium/long term) | 186,646 | 405 | |||||||
| Estrategico | Fixed income (medium/long term) | 702,276 | 21,173 | |||||||
| Europa Desarrollada | Equity | 12,869 | 1,743 | |||||||
| Global Accionario | Equity | 29,244 | 3,305 | |||||||
| Global Dólar | Equity | 20,020 | 489 | |||||||
| Horizonte | Fixed income (medium/long term) | 139,632 | 4,312 | |||||||
| Inversion USA | Equity | 125,127 | 5,445 | |||||||
| Latam Accionario | Equity | 13,321 | 2,791 | |||||||
| Moderado | Blend | 78,306 | 6,711 | |||||||
| Portafolio Activo Dólar Agresivo | Blend | 14,224 | 318 | |||||||
| Portafolio Activo Dólar Conservador | Blend | 67,565 | 1,042 | |||||||
| Portafolio Activo Dólar Moderado | Blend | 66,863 | 1,406 | |||||||
| Portafolio Agresivo Largo Plazo | Blend | 287,114 | 9,131 | |||||||
| Portafolio Ahorro Corto Plazo | Fixed income (medium/long term) | 2,032,320 | 45,618 | |||||||
| Portafolio Ahorro Dólar Corto Plazo | Fixed income (medium/long term) | 331,409 | 5,159 | |||||||
| Portafolio Conservador Largo Plazo | Blend | 730,690 | 18,294 | |||||||
| Portafolio Moderado Largo Plazo | Blend | 884,639 | 22,521 | |||||||
| Portafolio Retorno Mediano Plazo | Fixed income (medium/long term) | 928,406 | 13,932 | |||||||
| Renta Corto Plazo | Fixed income (medium/long term) | 434,627 | 24,326 | |||||||
| Renta Variable Nacional | Equity | 40,645 | 3,092 | |||||||
| Selección Acciones Chilenas | Equity | 379,251 | 11,901 | |||||||
| U.S. Dollar | Equity | 47,650 | 1,013 | |||||||
| Utilidades | Fixed income (medium/long term) | 671,870 | 16,375 | |||||||
| Total | Ch$ | 15,834,009 | 468,022 | |||||||
The following table sets forth information regarding the investment funds managed by Banchile Administradora General de Fondos S.A. as of December 31, 2025:
| As of December 31, 2025 | ||||||||||
| Name of Fund | Type of Fund | Net Asset Value (in millions of Ch$) |
Number of Investors |
|||||||
| AG Direct Lending IV | Public | Ch$ | 5,117 | 6 | ||||||
| AG Direct Lending V | Public | 5,803 | 8 | |||||||
| ALLVP III | Private | 2,949 | 11 | |||||||
| Axon Aurora I | Public | 5,192 | 41 | |||||||
| Banchile AG DL IV | Public | 8,043 | 1 | |||||||
| Chile Blend | Public | 97,144 | 8 | |||||||
| Chile Small Cap | Public | 5,829 | 12 | |||||||
| Desarrollo Inmobiliario Peru-Colombia | Public | 4,575 | 18 | |||||||
| Desarrollo y Rentas Residenciales | Public | 26,563 | 275 | |||||||
| Deuda Chilena | Public | 778,255 | 410 | |||||||
| Deuda Global | Public | 61,032 | 340 | |||||||
| Deuda Global High Yield | Public | 22,166 | 10 | |||||||
| Deuda Largo Plazo | Public | 42,101 | 14 | |||||||
| Deuda Nacional Corto Plazo | Public | 113,072 | 64 | |||||||
| Deuda Privada I | Public | 44,252 | 5 | |||||||
| Deuda Privada II | Public | 40,773 | 8 | |||||||
| Energias Renovables I | Public | 639 | 41 | |||||||
| European Value Partners II | Public | 13,517 | 7 | |||||||
| F2 VC III | Public | 6,205 | 6 | |||||||
| F2 VC Select Fund I | Public | 5,434 | 4 | |||||||
| Infraestructura Chile I | Public | 55,422 | 12 | |||||||
| Inmobiliario Capitolio | Private | 23,626 | 30 | |||||||
| Inmobiliario IX | Public | 4,546 | 290 | |||||||
| Inmobiliario X | Public | 45,566 | 10 | |||||||
| Inmobiliario XI | Public | 41,007 | 24 | |||||||
| MarketPlus EEUU | Public | 116,089 | 40 | |||||||
| MarketPlus Emergente | Public | 22,650 | 21 | |||||||
| MarketPlus Europa | Public | 8,400 | 15 | |||||||
| MarketPlus Global | Public | 222,808 | 62 | |||||||
| Millesima I | Public | 5,704 | 80 | |||||||
| PE Secondary Deal I | Public | 3,909 | 6 | |||||||
| PE Secondary Deal II | Public | 21,532 | 10 | |||||||
| Plusvalia Eficiente | Public | 10,990 | 24 | |||||||
| Privado F2 | Private | 16,442 | 6 | |||||||
| Private Market Deuda Evergreen | Public | 31,720 | 4 | |||||||
| Private Opportunity I | Public | 11,613 | 4 | |||||||
| Real Estate USA I | Public | 113,130 | 8 | |||||||
| Real Estate USA II | Public | 56,564 | 6 | |||||||
| Renta Inmobiliaria JDA700 Perú | Public | 13 | 50 | |||||||
| Rentas Habitacionales | Public | 5,636 | 54 | |||||||
| Rentas Inmobiliarias | Public | 129,052 | 94 | |||||||
| Rentas Peru I | Private | 14,651 | 1 | |||||||
| Schroder Private Equity Evergreen | Public | 9,262 | 6 | |||||||
| Social I | Private | 710 | 6 | |||||||
| United States Property Fund VI | Public | 1,334 | 18 | |||||||
| VC ALLVP IV | Public | 2,121 | 3 | |||||||
| Total | Ch$ | 2,263,158 | 2,173 | |||||||
As of December 31, 2025, Banchile Administradora General de Fondos S.A. had equity of Ch$53,066 million and, for the year ended December 31, 2025, net income of Ch$47,377 million, which represented 4.0% of our 2025 consolidated net income.
Insurance Brokerage
We provide insurance brokerage services to our customers through Banchile Corredores de Seguros Limitada. In 2000, we began to offer life insurance policies associated with consumer loans and non-credit related insurance to our individual customers and the public. As of December 31, 2025, Banchile Corredores de Seguros Limitada had equity of Ch$4,860 million and, for the year ended December 31, 2025, it recorded net income of Ch$6,623 million, which represented 0.6% of our 2025 consolidated net income. According to data published by the CMF, as of December 31, 2025, Banchile Corredores de Seguros Limitada had a 2.3% market share in the total amount of life and casualty insurance policies (in Chilean pesos) sold by insurance brokerage companies in Chile, including life annuities.
Since 2019 we have partnered with Chubb Seguros Chile S.A. and Chubb Seguros de Vida Chile S.A., local subsidiaries of Chubb Limited, as our exclusive provider of life and non-life insurances to be distributed by our insurance brokerage subsidiary. For non-life products, the partnership became effective in June 2019, and for life products, it became effective in January 2020. The partnership does not include life and non-life insurance products that in accordance with local regulation must be publicly auctioned.
Financial Advisory Services
We provide financial advisory and other investment banking services to our customers through Banchile Asesoría Financiera S.A. The services offered by Banchile Asesoría Financiera S.A. are primarily targeted to our corporate customers and include advisory services concerning mergers and acquisitions, restructuring, project finance and strategic alliances. As of December 31, 2025, Banchile Asesoría Financiera S.A. had equity of Ch$3,351 million and, for the year ended December 31, 2025, recorded a net loss of Ch$280 million.
Acquiring and Processing Services
We provide products and services that enable customers to connect to payment networks using credit and debit cards, along with other complementary services and activities related to payment card operations. As of December 31, 2025, Banchile Pagos had equity of Ch$12,565 million and recorded a net loss of Ch$3,378 million.
Distribution Channels and Electronic Banking
Our distribution network provides integrated financial services and products to our customers through a wide range of channels. The network includes ATMs, branches, internet-based banking platforms, mobile banking applications and call centers.
As of December 31, 2025, we had a network of 217 retail branches throughout Chile. Our branch system serves as a distribution network for all of the products and services offered to our customers. Our full-service branches accept deposits, cash withdrawals, offer the full range of our retail banking products, such as consumer loans, credit cards, mortgage loans and current accounts, and provide financial and non-financial information to current and potential customers. As of December 31, 2025, we had 1,884 ATMs that were part of a larger network of 7,608 ATMs operating in Chile, of which 4,688 ATMs operate under a network managed by Redbanc S.A.
We also offer electronic banking services to our customers 24 hours a day through our website, www.bancochile.cl, which has tailored homepages for the different segments we serve. Thus, by accessing our website, our individual customers may execute electronic money transfers, access their account balances, pay utilities bills, apply for loans, make time deposits, purchase insurance premiums, invest in mutual funds, and so on. On the other hand, our corporate homepage offers a broad range of services, including the payment of bills, electronic fund transfers, non-charge orders, as well as a wide variety of account inquiries. These services include our office banking service, Banconexion Web for Enterprises, which enables our corporate customers to perform all of their banking transactions from their offices. Our homepage also offers products with exclusive benefits provided by our customer loyalty marketing programs, which enhance our relationships with customers. Through the jointly administered website of Banchile Administration General de Fondos and Banchile Corredores de Bolsa, our mutual funds and securities brokerage subsidiaries, respectively, we also provide customers interested in investing and saving their funds with an internet-based platform on which they can trade stocks and currencies, make time deposits and take positions in mutual funds, foreign stock markets, investments funds and derivatives. Our foreign trade customers can rely on our international business homepage, www.bancochile.com, which enables them to inquire about the status of their foreign trade transactions and perform transactions, such as opening letters of credit, recording import collection and hedging on instructions and letters of credit.
Also, we provide our customers with access to a 24-hour phone-bank through which they can access account information and execute certain transactions. This service, through which we receive nearly 335,145 calls per month on average, has enabled us to develop customer loyalty campaigns, sell financial products and services, answer specialized inquiries and receive and resolve complaints by customers and non-customers.
Lastly, over the last years we have devoted efforts to enhance our mobile banking platforms by developing and launching diverse applications, including the mobile applications MiBanco, MiBanconexion, MiPago, and MiBeneficio. Similarly, we launched MiCuenta, MiPass, and MiSeguro. MiBanco is a mobile banking platform that enables our customers to perform most of the operations they can execute on our website, such as accessing their account balances, making bill payments and electronic money transfers, carrying out cash advances from credit cards to checking accounts. MiBanconexion is an application designed for treasury managers of companies or entrepreneurs, which allows our customers to make massive transfers, pay their use of credit lines and check movements in their demand account, among other functionalities. MiPago is a specialized mobile application that permits requests for reimbursements from other Banco de Chile’s customers and performs the transaction by generating and scanning a QR code, which reinforces the security standards for these types of operations. MiCuenta is a mobile application that enables users to make monthly payments associated with utility bills and other types of services. MiPass is a password-generating application that, among other features, allows users to set a list of money transfer recipients to make transfers without requiring another password-generating device. Also, we continued to expand our digital banking offerings by launching the new mobile application called MiInversion. This application serves as a portfolio management mobile platform for retail customers by enabling them to manage their investments in equity, fixed-income and mutual funds. Furthermore, we added new functionalities to these mobile applications by incorporating an on/off service for credit and debit cards in case of theft, misplacement or other security issues detected by the user, authorization of web transactions with MiPass, biometric access to MiBanco and MiBanconexion, through fingerprint, onsite payment in shops and commerce through MiPago, among other features. Likewise, we also added new functionalities by expanding our RedGiro service to permit our customers to perform transactions through their smartphones and added new functionalities to MiInversion, through which our customers are able to invest in time deposits while exchanging foreign currency. Also, we launched Pago Fácil, a payment solution that allows companies to pay us and other banks fully online at any time.
Throughout 2025, we continued to strengthen Banco de Chile’s leadership in the digitalization of our services by enhancing key functionalities and tools aimed at delivering a simpler, more accessible, secure, and flexible experience. These initiatives are part of our long-term digital strategy designed to broaden the range of financial solutions available to our clients through best-in-class digital channels. In line with this strategic focus, within the retail banking segment we launched a new version of the MiBanco application, designed to further simplify the user experience. The new version provides faster access to the most frequently used functions and incorporates a dedicated section to showcase benefits, new products, promotions, and other relevant information. Also, in 2025, we integrated the former MiPago application into the MiBanco application in order to improve the user experience by streamlining banking operations through one application. Within the corporate and SME segments, our strategic priorities have centered on building a comprehensive digital ecosystem. This vision has driven the continuous evolution of our Banconexión 2.0 platform and the MiBanconexión mobile application, both designed with an intuitive and user-centric interface. These enhancements aim to improve client productivity by facilitating day-to-day operations through a positive, efficient, and user-friendly navigation and usability experience.
The following table sets forth information regarding the evolution of the number of transactions carried out by customers and non-customers on our diverse distribution channels, as of December 31, 2023, 2024 and 2025:
| For the Year Ended December 31, | % Increase (Decrease) | |||||||||||||||||||
| 2023 | 2024 | 2025 | 2023/2024 | 2024/2025 | ||||||||||||||||
| (in millions of transactions) | ||||||||||||||||||||
| Teller | 16.5 | 14.5 | 11.8 | (12.3 | )% | (18.3 | )% | |||||||||||||
| ATMs | 113.3 | 85.4 | 82.3 | (24.6 | ) | (3.7 | ) | |||||||||||||
| Website (Monetary Transactions) | 62.3 | 62.6 | 64.6 | 0.4 | 3.3 | |||||||||||||||
| Mobile Banking | 147.6 | 181.7 | 199.5 | 23.1 | 9.8 | |||||||||||||||
| Total | 339.7 | 344.2 | 358.3 | 1.3 | % | 4.1 | % | |||||||||||||
Competition
Overview
The Chilean market for banking and other financial services is highly and increasingly competitive and consists of various market sectors. The most important sector is commercial banking with total loans (excluding operations of subsidiaries abroad) representing 73% of the Chilean GDP as of December 31, 2025. As of the same date, the Chilean banking industry consisted of 17 banks, 16 of which were private sector banks and one state-owned bank, namely, Banco del Estado. As of December 31, 2025, the six largest Chilean banks accounted for approximately 86% of all outstanding loans granted by Chilean financial institutions (excluding operations of subsidiaries abroad): Banco Santander—Chile (16.6%), Banco de Chile (15.8%), Banco del Estado (15.4%), Banco de Crédito e Inversiones (“BCI”) (14.9%), Scotiabank Chile (13.1%) and Itaú–Chile (9.7%).
We face significant and increasing competition in all market segments in which we operate. As a comprehensive commercial bank that offers a wide range of services to all types of enterprises and individual customers, we deal with a variety of competitors, ranging from large private sector commercial banks to more specialized entities, such as “niche” banks. In addition, we face competition from other types of lenders, such as non-banking leasing, crowdfunding, factoring and automobile financing companies, especially in credit products, mutual funds, pension funds and insurance companies within the market for savings products and insurance companies in the market for mortgage loans. Furthermore, in recent years and given the high credit rating held by the country, as well as the liquidity observed in overseas markets, local middle market, corporations and multinational branches in Chile have increasingly replaced loans rendered by local banks with off-shore long-term debt. In addition, we face competition from other types of competitors, such as leasing, factoring and automobile financing companies (especially in lending products), as well as mutual funds, pension funds and insurance companies, within the market for savings and mortgage loans. Nevertheless, banks continue to be the main suppliers of leasing, factoring and mutual funds, while the insurance brokerage business has become an important component of the value offerings provided by banks.
Likewise, other non-traditional providers of financial services have emerged over the last years, such as e-commerce, local and foreign fintech companies, Telecom companies, like internet and mobile phone providers, and more recently some marketplaces that may set and provide offerings, in the form of temporary financing, directly to their customers or providers. These new ways of doing business are based on the disintermediation of traditional banking service providers while not being subject to the same capital requirements that banks are. Therefore, these providers represent a challenge for the traditional banking industry that may result in lowered margins in the future. In order to address these kinds of businesses, Law No. 21,521 was enacted in January 2023 with the aim of establishing a general framework for financial services provided through technological means (including banks) in order to protect financial customers and data privacy while preserving financial stability and strengthening anti money-laundering. For more information see “—Fintech Law.”
Within the local banking industry, our primary competitors are the main private sector commercial banks in Chile, namely, Banco Santander – Chile, BCI, Scotiabank Chile, and Itaú–Chile. Nevertheless, we also face competition from Banco del Estado, a state-owned bank, which has a larger customer base than we do. Banco del Estado, which operates under the same regulatory regime as Chilean private sector banks, was the third largest bank in Chile as of December 31, 2025, with outstanding total loans of Ch$38,254,477 million, representing a 15.4% market share (excluding operations of subsidiaries abroad), according to data published by the CMF.
In the retail market, we compete with other private sector Chilean banks, as well as with Banco del Estado, which has a large individual customer base. Among private sector banks, we believe our strongest competitors in this market are Banco Santander – Chile, Scotiabank Chile and BCI, as these banks have developed diversified business strategies focused on both small and medium-sized companies and lower to middle income segments of the Chilean population. In addition, we believe our strongest competitors in the high-income individual segment are Banco Santander—Chile and Banco Bice, as these banks rely on specialized business models that provide wealth management and traditional banking services, as we do.
Historically, commercial banks in Chile have competed in the retail market against each other, and finance companies and department stores, with the latter two having traditionally been focused on consumer loans to low and middle-income segments. However, finance companies gradually disappeared between the 1990s and 2000s, as most of them merged into the largest commercial banks that dominate the Chilean banking industry today. Also, by the end of 1990s, the Chilean financial industry witnessed the rise of non-traditional banking competitors, such as large department stores. During the 2000s, these players gained increasing significance in the consumer lending sector, as they were permitted to issue financial products such as credit cards. Currently, there are two consumer-oriented banks affiliated with Chile’s largest department stores: Banco Falabella and Banco Ripley. Although these banks had a combined market share (excluding operations of subsidiaries abroad) of only 2.4% as of December 31, 2025, according to the CMF, the presence of these banks is likely to make consumer banking more competitive over the next few years, especially within the lower income segment. As of December 31, 2025, consumer loans granted by Banco Falabella and Banco Ripley represented 13.0% and 3.6%, respectively, of the total consumer loans granted by the industry (excluding operations of subsidiaries abroad).
In the wholesale market, we believe our strongest competitors are also Banco Santander—Chile, BCI, Itaú–Chile and Scotiabank Chile. Similarly, we believe these banks are our most significant competitors in the small and medium-sized companies’ business segment.
We also compete, mainly through our subsidiaries, with companies that offer non-banking specialized financial services in the high-income individuals segment and the middle market and corporate segment such as Larrain Vial, BTG Pactual, Moneda Patria Investments and Credicorp Capital, whose core businesses are stock brokerage, financial advisory and wealth management services. Other Chilean commercial banks also compete in these markets of specialized financial services, but they are less focused on such businesses.
The Chilean banking industry has experienced increased levels of competition in recent years from domestic as well as foreign banks. This phenomenon has triggered a consolidation wave within the industry and the creation of more comprehensive banking entities that participate in most of our markets. Consequently, banks’ strategies have been increasingly focused on reducing costs and improving efficiency standards in order to compete effectively with the larger banks. Although we believe that we are currently large enough to compete effectively in all of our target markets and are making our best efforts to effectively operate within this competitive environment, we acknowledge that our net income may decrease as a result of increasing competition.
In this regard, Bicecorp S.A. and Grupo Security S.A. announced an agreement to merge their operations in April 2024. The completion of this process was subject to approval by the Chilean Antitrust Agency, which was granted in October 2024. Likewise, the CMF authorized new shareholders to join Grupo Security by the end of October 2024. The merger was completed on September 1, 2025, and resulted in the absorption of Grupo Security by Bicecorp S.A. As of December 31, 2025, the merged Banco BICE (that absorbed former Banco Security’s operations) represented approximately 6.6% of the total loans managed by the Chilean banking industry, excluding the operations of subsidiaries abroad.
For comparison purposes, all information presented in the tables below has been prepared in accordance with Chilean GAAP as defined by the CMF for the Chilean banking industry.
Balance Sheet
The following table sets forth certain statistical information on the Chilean financial system as of December 31, 2025, according to information published by the CMF:
| As of December 31, 2025 | ||||||||||||||||||||||||
| Private sector banks | Banco del Estado | Total banking system | ||||||||||||||||||||||
| Amount | Share | Amount | Share | Amount | Share | |||||||||||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||||||||||||||
| Assets | Ch$ | 349,829,556 | 85.3 | % | Ch$ | 60,202,509 | 14.7 | % | Ch$ | 410,032,065 | 100.0 | % | ||||||||||||
| Loans(1)(2) | 209,878,927 | 84.6 | 38,254,477 | 15.4 | 248,133,404 | 100.0 | ||||||||||||||||||
| Deposits(2) | 149,413,233 | 80.8 | 35,493,222 | 19.2 | 184,906,455 | 100.0 | ||||||||||||||||||
| Equity(3) | Ch$ | 30,960,412 | 88.1 | % | Ch$ | 4,174,535 | 11.9 | % | Ch$ | 35,134,947 | 100.0 | % | ||||||||||||
Source: CMF
| (1) | Loans to customers. Interbank loans are not included. |
| (2) | Excludes operations of subsidiaries abroad. |
| (3) | For purposes of this table, equity includes capital and reserves, net income for the period and provisions for minimum dividends. |
Loans and Deposits
| a. | Total Loans |
We had total loans of Ch$39,254,314 million as of December 31, 2025, under IFRS. The following table sets forth our market share and the market share of our principal private sector competitors in terms of total loans, as of the dates indicated, according to information published by the CMF, under Chilean GAAP:
| Total Loans(1)(2) | ||||||||||||
| As of December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco Santander – Chile | 17.6 | % | 17.1 | % | 16.6 | % | ||||||
| Banco de Chile | 16.2 | 16.1 | 15.8 | |||||||||
| Banco de Crédito e Inversiones | 14.6 | 14.7 | 14.9 | |||||||||
| Scotiabank Chile | 13.8 | 13.5 | 13.1 | |||||||||
| Itaú–Chile | 9.9 | 9.7 | 9.7 | |||||||||
| Total market share | 72.1 | % | 71.1 | % | 70.1 | % | ||||||
Source: CMF
| (1) | Allowances for loan losses not deducted. |
| (2) | Excludes operations of subsidiaries abroad. |
| b. | Total Deposits |
We had total deposits (including demand deposits and time deposits) of Ch$28,954,278 million as of December 31, 2025, under IFRS. The following table sets forth the market shares in terms of total deposits (time deposits and demand deposits) for private banks as of December 31, 2023, 2024 and 2025 on a consolidated basis, according to information published by the CMF, under Chilean GAAP:
| Total Deposits(1)(2) | ||||||||||||
| As of December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco Santander – Chile | 17.3 | % | 17.2 | % | 16.5 | % | ||||||
| Banco de Chile | 16.7 | 15.6 | 15.3 | |||||||||
| Banco de Crédito e Inversiones | 13.9 | 15.1 | 14.2 | |||||||||
| Scotiabank Chile | 10.5 | 10.3 | 10.0 | |||||||||
| Itaú–Chile | 8.9 | 9.1 | 9.0 | |||||||||
| Total market share | 67.3 | % | 67.3 | % | 65.0 | % | ||||||
Source: CMF
| (1) | Excludes operations of subsidiaries abroad. |
| (2) | Considers demand deposits net of clearance. |
| c. | Demand Deposits |
We had current accounts and other demand deposits of Ch$14,791,870 million as of December 31, 2025, under IFRS. The following table sets forth the market shares in terms of demand deposits for private banks as of the dates indicated, on a consolidated basis, according to information published by the CMF, under Chilean GAAP:
| Demand Deposits(1) (2) | ||||||||||||
| As of December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco de Chile | 19.7 | % | 20.1 | % | 19.9 | % | ||||||
| Banco Santander – Chile | 20.0 | 20.0 | 19.3 | |||||||||
| Banco de Crédito e Inversiones | 14.1 | 14.9 | 14.5 | |||||||||
| Scotiabank Chile | 7.5 | 8.0 | 8.0 | |||||||||
| Itaú–Chile | 5.0 | 5.2 | 5.3 | |||||||||
| Total market share | 66.3 | % | 68.2 | % | 67.0 | % | ||||||
Source: CMF
| (1) | Excludes operations of subsidiaries abroad. |
| (2) | Considers demand deposits in local currency and net of clearance. |
| d. | Time Deposits |
We had saving accounts and time deposits of Ch$14,162,408 million as of December 31, 2025, under IFRS. The following table sets forth the market shares in terms of time deposits for private banks as of the dates indicated, on a consolidated basis, according to information published by the CMF, under Chilean GAAP:
| Time Deposits(1) | ||||||||||||
| As of December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco Santander – Chile | 15.2 | % | 15.3 | % | 14.5 | % | ||||||
| Banco de Crédito e Inversiones | 13.6 | 15.0 | 13.9 | |||||||||
| Banco de Chile | 14.5 | 12.7 | 12.3 | |||||||||
| Scotiabank Chile | 12.4 | 11.7 | 11.2 | |||||||||
| Itaú–Chile | 10.9 | 10.9 | 10.7 | |||||||||
| Total market share | 66.6 | % | 65.6 | % | 62.6 | % | ||||||
Source: CMF
| (1) | Excludes operations of subsidiaries abroad. |
Credit Quality and Risk Management
| a. | Risk Index |
The following table sets forth the ratio of allowances to total loans of the largest private banks in Chile and of the Chilean financial system (including such banks) as of December 31, 2023, 2024 and 2025, according to information published by the CMF:
| Allowances to Total Loans(1) | ||||||||||||
| As of December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| CHILEAN GAAP: | ||||||||||||
| Banco de Crédito e Inversiones | 1.71 | % | 1.66 | % | 1.66 | % | ||||||
| Banco de Chile | 2.05 | 2.02 | 2.14 | |||||||||
| Itaú–Chile | 2.99 | 2.99 | 2.72 | |||||||||
| Scotiabank Chile | 2.20 | 2.33 | 2.84 | |||||||||
| Banco Santander—Chile | 2.83 | 2.94 | 3.26 | |||||||||
| Financial system | 2.58 | % | 2.52 | % | 2.60 | % | ||||||
Source: CMF
| (1) | Includes operations of subsidiaries abroad. |
| b. | Non-Performing Loans |
The following table sets forth the ratio of past-due loans (90 days or more) over total loans for the largest private banks in Chile as of December 31, 2023, 2024 and 2025, on an individual basis, according to information published by the CMF:
| Past-due loans to Total Loans(1)(2) | ||||||||||||
| As of December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco de Crédito e Inversiones | 1.33 | % | 1.59 | % | 1.53 | % | ||||||
| Banco de Chile | 1.43 | 1.44 | 1.68 | |||||||||
| Itaú–Chile | 2.29 | 2.24 | 2.29 | |||||||||
| Scotiabank Chile | 2.16 | 2.37 | 2.68 | |||||||||
| Banco Santander – Chile | 2.27 | 3.17 | 3.24 | |||||||||
| Financial system | 2.15 | % | 2.38 | % | 2.44 | % | ||||||
Source: CMF
| (1) | Past-due loans refer to loans 90 days or more past due, including overdue installments and the remaining amount of principal and interest. |
| (2) | Includes operations of subsidiaries abroad. |
| c. | Additional Allowances |
The following table sets forth the amount of additional allowances established by the largest private Chilean banks as of the dates indicated, according to information published by the CMF:
| Additional Allowances(1) | ||||||||||||
| As of December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco de Chile | Ch$ | 700,252 | Ch$ | 700,252 | Ch$ | 631,217 | ||||||
| Banco de Crédito e Inversiones | 375,900 | 262,102 | 218,976 | |||||||||
| Banco Santander – Chile | 293,000 | 293,000 | 179,098 | |||||||||
| Itaú–Chile | 169,869 | 109,052 | 107,379 | |||||||||
| Scotiabank Chile | 164,249 | 164,249 | 101,030 | |||||||||
| Financial System | Ch$ | 2,808,542 | Ch$ | 2,626,339 | Ch$ | 2,275,648 | ||||||
Source: CMF
| (1) | Includes operations of subsidiaries abroad. |
Capital Adequacy
| a. | Capital and Reserves |
The following table sets forth year-end balances of average capital and reserves for the largest private banks in Chile as of December 31, 2023, 2024 and 2025 according to information published by the CMF:
| Average Capital and Reserves(1)(2) | ||||||||||||
| As of December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco de Crédito e Inversiones | Ch$ | 4,972,912 | Ch$ | 6,320,485 | Ch$ | 6,924,746 | ||||||
| Banco de Chile | 4,695,823 | 5,146,501 | 5,375,840 | |||||||||
| Banco Santander – Chile | 4,045,944 | 4,153,906 | 4,421,561 | |||||||||
| Banco Itaú–Chile | 3,395,304 | 3,744,996 | 4,000,401 | |||||||||
| Scotiabank Chile | Ch$ | 3,114,867 | Ch$ | 3,412,313 | Ch$ | 3,633,523 | ||||||
Source: CMF
| (1) | Average Capital and Reserves equals to total equity before provisions for minimum dividends and net income for the period for the year ended December 31, 2023, 2024, and 2025. |
| (2) | Includes operations of subsidiaries abroad. |
| b. | Average Equity |
The following table sets forth balances of average equity for the largest private banks in Chile as of the dates indicated, according to information published by the CMF:
| Average Equity(1)(2) | ||||||||||||
| As of December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco de Crédito e Inversiones | Ch$ | 5,176,958 | Ch$ | 6,567,640 | Ch$ | 7,232,368 | ||||||
| Banco de Chile | 4,946,135 | 5,365,170 | 5,610,822 | |||||||||
| Banco Santander – Chile | 4,150,128 | 4,248,017 | 4,488,664 | |||||||||
| Itaú–Chile | 3,509,489 | 3,863,109 | 4,126,067 | |||||||||
| Scotiabank Chile | Ch$ | 3,237,393 | Ch$ | 3,558,357 | Ch$ | 3,743,726 | ||||||
Source: CMF
| (1) | Includes operations of subsidiaries abroad. |
| (2) | Average total equity attributable to equity holders for the year ended December 31, 2023, 2024, and 2025. |
| c. | Basel Ratio |
The following table sets forth the BIS ratios of the largest private Chilean banks as of the dates indicated, according to information published by the CMF:
| BIS Ratios(1) | ||||||||||||
| Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco de Chile | 17.4 | % | 18.1 | % | 18.3 | % | ||||||
| Itaú–Chile | 15.6 | 15.8 | 17.7 | |||||||||
| Scotiabank Chile | 15.0 | 17.3 | 17.2 | |||||||||
| Banco Santander – Chile | 17.6 | 17.1 | 16.9 | |||||||||
| Banco de Crédito e Inversiones | 14.4 | 15.5 | 15.4 | |||||||||
| Financial system | 16.2 | % | 16.9 | % | 17.2 | % | ||||||
Source: CMF
| (1) | Total Regulatory Capital divided by Risk Weighted Assets (RWA). |
| d. | CET1 Ratio |
The following table sets forth the CET1 ratios of the largest private Chilean banks as of the dates indicated, according to information published by the CMF:
| CET1 Ratios(1) | ||||||||||||
| Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco de Chile | 13.7 | % | 14.4 | % | 14.5 | % | ||||||
| Itaú–Chile | 11.0 | 10.9 | 12.2 | |||||||||
| Scotiabank Chile | 11.2 | 11.3 | 11.5 | |||||||||
| Banco de Crédito e Inversiones | 11.1 | 11.0 | 11.2 | |||||||||
| Banco Santander – Chile | 11.1 | 10.5 | 11.0 | |||||||||
| Financial system | 11.9 | % | 11.9 | % | 12.3 | % | ||||||
Source: CMF
| (1) | CET1 Capital divided by Risk Weighted Assets (RWA). |
Operating Revenue Generation
| a. | Net Income attributable to equity holders |
The following table sets forth the market shares in net income attributable to equity holders for private sector banks as of December 31, 2023, 2024 and 2025, according to information published by the CMF:
| Net Income(1)(2) | ||||||||||||
| Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco de Chile | 27.7 | % | 24.6 | % | 22.4 | % | ||||||
| Banco Santander – Chile | 11.1 | 17.4 | 19.8 | |||||||||
| Banco de Crédito e Inversiones | 15.2 | 16.3 | 18.7 | |||||||||
| Scotiabank Chile | 9.1 | 8.8 | 8.2 | |||||||||
| Itaú–Chile | 7.9 | 7.7 | 8.1 | |||||||||
| Total Market Share | 71.0 | % | 74.8 | % | 77.2 | % | ||||||
Source: CMF
| (1) | Includes operations of subsidiaries abroad. |
| (2) | Net income attributable to equity holders. |
| b. | Operating Revenues |
The following table sets forth the market shares in terms of operating revenues for private banks as of December 31, 2023, 2024 and 2025, on a consolidated basis, according to information published by the CMF:
| Operating Revenues(1) | ||||||||||||
| Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco de Crédito e Inversiones | 15.3 | % | 15.8 | % | 17.1 | % | ||||||
| Banco de Chile | 18.2 | 17.6 | 16.9 | |||||||||
| Banco Santander – Chile | 11.9 | 15.2 | 16.1 | |||||||||
| Scotiabank Chile | 9.6 | 9.6 | 9.7 | |||||||||
| Itaú–Chile | 9.1 | 9.4 | 8.5 | |||||||||
| Total Market Share | 64.1 | % | 67.6 | % | 68.3 | % | ||||||
Source: CMF
| (1) | Includes operations of subsidiaries abroad. |
| c. | Net Fee and Commission Income |
The following table sets forth the market shares in terms of revenues coming from net fee and commission income for private banks as of the dates indicated, on a consolidated basis, according to information published by the CMF:
| Net Fee and Commission Income(1) | ||||||||||||
| Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco de Chile | 20.1 | % | 19.5 | % | 20.0 | % | ||||||
| Banco Santander – Chile | 18.5 | 18.6 | 18.7 | |||||||||
| Banco de Crédito e Inversiones | 12.6 | 13.6 | 14.8 | |||||||||
| Itaú–Chile | 9.0 | 6.8 | 6.8 | |||||||||
| Scotiabank Chile | 7.3 | 7.4 | 6.6 | |||||||||
| Total Market Share | 67.5 | % | 65.9 | % | 66.9 | % | ||||||
Source: CMF
| (1) | Includes operations of subsidiaries abroad. |
| d. | Operating Margin |
The following table sets forth the operating margins for private banks as of December 31, 2023, 2024 and 2025, on a consolidated basis, according to information published by the CMF:
| Operating Margin(1)(2) | ||||||||||||
| Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco de Chile | 6.3 | % | 6.5 | % | 6.3 | % | ||||||
| Banco Santander – Chile | 3.6 | 4.9 | 5.5 | |||||||||
| Scotiabank Chile | 4.3 | 4.6 | 4.8 | |||||||||
| Banco de Crédito e Inversiones | 4.0 | 4.1 | 4.4 | |||||||||
| Itaú–Chile | 4.4 | 4.6 | 4.4 | |||||||||
| Financial System average | 5.0 | % | 5.2 | % | 5.3 | % | ||||||
Source: CMF
| (1) | Includes operations of subsidiaries abroad. |
| (2) | Operating income divided by average interest earning assets. |
Profitability Ratios
| a. | Return on Average Equity (ROAE) Attributable to Equity Holders |
The following table sets forth our return on average equity and the returns on average equity of our principal private sector competitors and the Chilean banking industry, in each case as of the dates indicated, according to information published by the CMF:
| Return on Average Equity (1)(2) | ||||||||||||
| Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco Santander – Chile | 12.0 | % | 20.2 | % | 23.5 | % | ||||||
| Banco de Chile | 25.1 | 22.5 | 21.2 | |||||||||
| Banco de Crédito e Inversiones | 13.2 | 12.2 | 13.8 | |||||||||
| Scotiabank Chile | 12.6 | 12.2 | 11.6 | |||||||||
| Itaú–Chile | 10.1 | 9.7 | 10.4 | |||||||||
| Financial System average | 15.4 | % | 15.1 | % | 15.1 | % | ||||||
Source: CMF
| (1) | Corresponds to net income attributable to equity holders divided by the average balance of Total Equity attributable to equity holders. |
| (2) | Includes operations of subsidiaries abroad. |
| b. | Return on Average Capital and Reserves (ROAC) |
The following table sets forth our return on average capital and reserves and the return on average capital and reserves of our principal private sector competitors and the entire Chilean banking industry, in each case as of December 31, 2023, 2024 and 2025, according to information published by the CMF:
| Return on Average Capital and Reserves(1)(2) | ||||||||||||
| Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco Santander – Chile | 12.3 | % | 20.6 | % | 23.8 | % | ||||||
| Banco de Chile | 26.5 | 23.5 | 22.2 | |||||||||
| Banco de Crédito e Inversiones | 13.7 | 12.7 | 14.4 | |||||||||
| Scotiabank Chile | 13.1 | 12.7 | 11.9 | |||||||||
| Itaú–Chile | 10.5 | 10.1 | 10.7 | |||||||||
| Financial System average | 16.0 | % | 15.6 | % | 15.6 | % | ||||||
Source: CMF
| (1) | Corresponds to net income attributable to equity holders divided by the average balance of Capital and Reserves. |
| (2) | Includes operations of subsidiaries abroad. |
| c. | Return on Average Assets (ROAA) Attributable to Equity Holders |
The following table sets forth our return on average assets and the returns on average assets of our principal private sector competitors and the Chilean banking industry, in each case as of the dates indicated, according to information published by the CMF:
| Return on Average Assets (1)(2) | ||||||||||||
| Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco de Chile | 2.3 | % | 2.2 | % | 2.2 | % | ||||||
| Banco Santander – Chile | 0.7 | 1.2 | 1.5 | |||||||||
| Banco de Crédito e Inversiones | 0.9 | 1.0 | 1.2 | |||||||||
| Scotiabank Chile | 0.9 | 1.0 | 1.0 | |||||||||
| Itaú–Chile | 0.9 | 0.9 | 1.0 | |||||||||
| Financial System average | 1.1 | % | 1.2 | % | 1.3 | % | ||||||
Source: CMF
| (1) | Corresponds to net income attributable to equity holders divided by the average balance of Total Assets. |
| (2) | Includes operations of subsidiaries abroad. |
Operating Efficiency
| a. | Operating Expenses |
The following table sets forth the market shares in terms of operating expenses for private sector banks as of December 31, 2023, 2024 and 2025, on a consolidated basis, according to information published by the CMF:
| Operating Expenses(1) | ||||||||||||
| As of December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Scotiabank Chile | 9.3 | % | 8.8 | % | 8.5 | % | ||||||
| Itaú–Chile | 10.7 | 10.5 | 10.3 | |||||||||
| Banco Santander – Chile | 12.7 | 13.3 | 12.8 | |||||||||
| Banco de Chile | 15.6 | 14.7 | 13.9 | |||||||||
| Banco de Crédito e Inversiones | 18.2 | 17.4 | 19.4 | |||||||||
| Total Market Share | 66.5 | % | 64.7 | % | 64.9 | % | ||||||
Source: CMF
| (1) | Includes operations of subsidiaries abroad. |
| b. | Efficiency Ratio (Cost-to-income Ratio) |
The following table sets forth the efficiency ratios of the largest private Chilean banks as of December 31, 2023, 2024 and 2025, according to information published by the CMF:
| Efficiency Ratio(1)(2) | ||||||||||||
| As of December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco Santander – Chile | 46.6 | % | 39.0 | % | 36.0 | % | ||||||
| Banco de Chile | 37.3 | 37.1 | 37.4 | |||||||||
| Scotiabank Chile | 42.1 | 40.7 | 39.7 | |||||||||
| Banco de Crédito e Inversiones | 51.7 | 48.9 | 51.7 | |||||||||
| Itaú–Chile | 51.1 | 49.8 | 55.0 | |||||||||
| Financial System average | 43.6 | % | 44.4 | % | 45.4 | % | ||||||
Source: CMF
| (1) | Operating expenses divided by operating revenues. |
| (2) | Includes operations of subsidiaries abroad. |
REGULATION AND SUPERVISION
General
In Chile, only banks may maintain current accounts for their customers and, together with certain other specific non-banking financial institutions, may accept time deposits. The main authorities regulating financial institutions in Chile are the CMF and the Central Bank. Chilean banks are primarily subject to the General Banking Act and secondarily, to the extent not inconsistent with that law, the provisions of the Chilean Corporations Law governing publicly listed corporations, except for certain provisions that are expressly excluded. The Chilean banking regulatory system dates back to 1925, with the creation of the Chilean Central Bank, and has been characterized by periods of substantial regulation and government intervention, as well as periods of deregulation. In 2004, amendments to the General Banking Act granted additional powers to banks, including general underwriting powers for new issuances of certain debt and equity securities and the power to create subsidiaries to engage in banking supplementary activities, such as brokerage, investment advisory, mutual fund services, investment fund management, factoring, securitization products and financial leasing services. During the last years, several modifications to the General Banking Act were issued with the purpose of implementing the Basel III guidelines in Chile. For more information on updates to the General Banking Act see “Item 4. Information on the Company—Regulation and Supervision—Modifications to the General Banking Act.”
Due to the integration and replacement of the SBIF into the CMF in June 2019, references herein that formerly applied to the SBIF are hereinafter, interchangeably, referred to as the “CMF,” “regulator,” “banking regulator” or “Chilean regulator.” For more information regarding the legal amendments that led to the replacement of the SBIF by the CMF, see both “Item 4. Information on the Company—Regulation and Supervision—The Financial Market Commission” and “Item 4. Information on the Company—Regulation and Supervision—Modifications to the General Banking Act.”
The Central Bank
The Central Bank is an autonomous legal entity created under the framework of the Chilean Constitution. It is subject to its Ley Orgánica Constitucional (the “Organic Constitutional Law”) and the current Chilean Constitution. To the extent not inconsistent with its Organic Constitutional Law or the current Chilean Constitution, the Central Bank is also subject to general laws applicable to the private sector but is not subject to the laws applicable to the public sector. The Central Bank is directed and administered by a board composed of five members appointed by the President of Chile, subject to Senate’s approval.
The legal purpose of the Central Bank is to maintain the stability of the Chilean peso, control inflation and the orderly functioning of Chile’s internal and external payment systems. The Central Bank’s powers include setting reserve requirements for banks, regulating the amount of money and credit in circulation, and establishing regulations and guidelines regarding financial companies, foreign exchange (including the Formal Exchange Market) and bank deposit-taking activities.
The Financial Market Commission
The CMF was established in January 2018, pursuant to Law No. 21,000 to replace the former Superintendencia de Valores y Seguros (“Superintendency of Securities and Insurance” or “SVS”) and, in accordance with modifications introduced in January 2019 to the General Banking Act, the CMF also took over the authority previously vested on the SBIF and replaced it as the Chilean banking regulator in June 2019. For more information on such replacement and further amendments introduced to the General Banking Act, see “Item 4. Information on the Company—Regulation and Supervision—Modifications to the General Banking Act.”
The CMF is a professional and technical institution, led by a board of five members whose chairman is appointed by the Chilean Government. The CMF framework includes a special financial prosecutor who is responsible for identifying, investigating, and prosecuting potential infringements of the rules that govern the markets and industries regulated by the CMF. In addition to the powers formerly vested on both the SBIF and the SVS, the CMF has additional powers that should improve the supervision of the Chilean financial markets while providing due process for regulated companies by incorporating new tools that promote the cooperation of companies purportedly involved with infringements of applicable rules.
Since January 2021, the CMF moved towards a “twin peaks” system, which means it is divided into two sections depending on the supervisory and regulatory objects. One of these sections exclusively addresses prudential and solvency regulation and supervision that seeks to oversee, while the other focuses on market conduct regulation and supervision in order to ensure transparency and integrity of capital markets as well as the protection of financial customers.
Specifically, the CMF must regulate, oversee, sanction and ensure the correct operation, the stability and the development of the Chilean financial market, composed of publicly traded companies, banks and financial institutions, insurance companies, insurance brokers, mutual funds and investment funds, by easing the participation of market agents while keeping public trust. In order to do so, the CMF must have an overall and systemic vision by protecting interests of investors and insured agents. The CMF also can impose sanctions on the supervised entities.
Also, in January 2023, Law No. 21,521 was enacted, through which the CMF regulates financial technology providers, such as fintechs, and the local open banking system. For more information regarding the Fintech Law or the type of Fintech providers see “Item 4. Information on the Company—Regulation and Supervision—Fintech Law.”
Regarding the specific powers of the CMF related to banking regulation, this entity authorizes the creation of new banks and has broad powers to interpret and enforce legal and regulatory requirements applicable to banks and financial institutions. Furthermore, in cases of noncompliance with its legal and regulatory requirements, the CMF is entitled to impose sanctions. In extreme cases, as defined in Articles No. 117 and No. 130 of the General Banking Act, the CMF may appoint, with the prior approval of the board of directors of the Central Bank, a provisional administrator to manage a bank or a bank liquidator, respectively. It also has the mandate to approve any amendment to a bank’s bylaws or any increase in its capital.
Furthermore, the CMF has the authority to request information of banking transactions of specific persons, even those subject to secrecy or confidentiality provisions; interception of all kinds of communications and requesting telecommunication companies any communication transmitted or received by them, and order other public agencies to provide background information, even when such information is confidential or classified. These measures, among others, are subject to control and prior authorization of the Santiago Court of Appeal.
The CMF examines all banks, usually at least once a year or more often, if necessary, under certain circumstances. Banks are required to submit unaudited financial statements to the CMF on a monthly basis and to publish their unaudited financial statements at least four times a year in a newspaper of national circulation. A bank’s financial statements as of December 31 of each year must be audited and submitted to the CMF together with the opinion of its independent auditors, while financial statements as of June 30 of every fiscal year must include an auditor’s review statement in accordance with Chilean GAAP. Likewise, banks are required to accompany their interim quarterly financial statements by a management commentary that pursues to provide a comprehensive assessment of the banks’ financial and strategic performance. In addition, banks are required to provide extensive information regarding their operations at various periodic intervals to the CMF by means of specialized reports associated with business-related risks, products, transactions, distribution channels, among others. Also, as defined in Pillar 3 guidelines of Basel III, banks are required to disclose substantial information related to capital and risk management on a quarterly basis.
Any person wishing to acquire, directly or indirectly, 10% or more of the share capital of a bank must obtain prior approval from the CMF. Without such approval, the holder will not have the right to vote such shares. The CMF may only refuse to grant its approval based on specific grounds set forth in the General Banking Act.
According to Article 35 bis of the General Banking Act, the prior authorization of the CMF is required for each of the following:
| ● | the merger of two or more banks; |
| ● | the acquisition of all or a substantial portion of a bank’s assets and liabilities by another bank; |
| ● | the control by the same person, or controlling group, of two or more banks; or |
| ● | a substantial increase in the share ownership of a bank by the controlling shareholder of that bank. |
Such prior authorization may be granted or rejected by the CMF, which is further authorized to set rules or specific requirements in that regard. If granted, the CMF is also empowered to imposed one or more of the capital requirements for systemically important banks as defined in Article No. 66 quarter of the General Banking Act.
Pursuant to the regulations of the CMF, the following ownership disclosures are required:
| ● | banks must disclose to the CMF the identity of any person owning, directly or indirectly, 5% or more of its shares; |
| ● | holders of ADSs must disclose to the depositary the identity of beneficial owners of ADSs registered under such holders’ names; |
| ● | the depositary must disclose to the bank the identity of beneficial owners of ADSs which the depositary has registered, and the bank, in turn, must disclose to the CMF the identity of the beneficial owners of the ADSs representing 5% or more of such bank’s shares; and |
| ● | bank shareholders who individually hold 10% or more of a bank’s capital stock and who are controlling shareholders must periodically inform the CMF of their financial condition. |
All of our subsidiaries are supervised by the CMF.
For more information on the timeframe for such implementation see “Item 4. Information on the Company—Regulation and Supervision—Modifications to the General Banking Act.”
Limitations on Types of Activities
Chilean banks can only conduct those activities expressly allowed by Article 69 of the General Banking Act, including among others, opening bank accounts, bond issuance, consumer and commercial (secured or unsecured) loan placements, consumer mortgages, engaging in financial derivatives, factoring and leasing activities, accepting deposits and, subject to certain limitations, making investments and performing financial services. Investments are restricted to real estate for the bank’s own use, gold, foreign exchange and debt securities. Through subsidiaries, banks may also engage in other specific financial service activities such as securities brokerage services, mutual fund management, investment fund management, foreign capital fund management, financial advisory, securitization and factoring activities. Subject to specific limitations and the prior approval of the CMF and the Central Bank, Chilean banks may own majority or non-controlling interests in foreign banks. The CMF and the Central Bank are allowed by the General Banking Act to dictate and issue ancillary regulation stating additional requirements for certain activities in which banks can engage.
Deposit Guarantee
According to the General Banking Act, local or foreign currency denominated deposits at banks or financial companies are insured as described below.
The Chilean Government guarantees up to 100% of the principal amount of the following deposits:
| ● | deposits in current accounts; |
| ● | deposits in savings accounts of demand deposits; |
| ● | other demand deposits; and |
| ● | deposits in savings accounts with unlimited withdrawals. |
The General Banking Act contemplates a current deposit guarantee for time deposits such that the principal amount of time deposits would be 100% guaranteed by the Chilean Government with a limit of UF 200 per person (approximately Ch$7.9 million or U.S.$8,825 as of December 31, 2025) in a single bank and UF 400 per person (approximately Ch$15.9 million or U.S.$17,649 as of December 31, 2025) in the Chilean banking system as a whole.
On January 31, 2023, the CMF published a white paper “Guidelines for a new banking resolution framework and deposit insurance in Chile” for comment until July 31, 2023. For further information see “Item 3. Key Information—Risk Factors—Risks Relating to our Operations and the Chilean Banking Industry—Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations—Basel III Implementation.”
Reserve Requirements
Deposits are subject to a reserve requirement of 9.0% for demand deposits and 3.6% for time deposits (with terms of less than one year). The Central Bank has statutory authority to increase these percentages to as much as 40% for demand deposits and as much as 20% for time deposits, to implement monetary policy.
In addition, Chilean banks must hold a certain amount of assets in cash or highly liquid instruments. This reserve requirement, also known as “technical reserve,” is equal to the amount by which the daily balance of demand deposits, net of clearing, exceeds 2.5 times the amount of the bank’s Total Regulatory Capital. Deposits payable on demand include the following:
| ● | deposits in current accounts; |
| ● | other demand deposits or obligations payable on demand and incurred in the ordinary course of business; |
| ● | saving deposits that allow unconditional withdrawals that bear a stated maturity; and |
| ● | other deposits unconditionally payable immediately. |
As of December 31, 2025, we have fully complied with these reserve requirements.
In accordance with the General Banking Act, if a Chilean bank or a foreign bank operating in Chile is defined to be a D-SIB by the CMF, it may be subject to one or a combination of additional restrictions, including but not limited to, more restrictive reserve requirements associated with the “technical reserve.” Thus, under certain conditions, the “technical reserve” threshold may be reduced from 2.5 times the amount of the bank’s Total Regulatory Capital, as requested for any bank, to 1.5 times the bank’s Total Regulatory Capital for a D-SIB bank. On March 31, 2021, the CMF announced that six local banks (including us) were designated as D-SIB banks, based on the CMF’s standardized methodology. Subsequently, on March 30, 2022, March 31, 2023, April 1, 2024, April 1, 2025, and March 30, 2026, the CMF reaffirmed the designation of us as a D-SIB bank in Chile. However, as of the date of this annual report, no stricter reserve requirements have been set on us on the grounds of our designation as a D-SIB bank. For more information on this regulation see “Item 4. Information on the Company—Regulation and Supervision—Modifications to the General Banking Act.” And “Item 4. Information on the Company—Regulation and Supervision—Capital Adequacy Regulations.”
Minimum Capital
Under Article No. 50 of the General Banking Act, a bank must have a minimum paid in capital and reserves of UF 800,000 (approximately Ch$31,782 million or U.S.$35.3 million as of December 31, 2025). If the paid-in capital and reserves decrease below that amount, that bank will be compelled to cover that deficit in a timeframe no longer than one year, which could be extended by the CMF under certain circumstances. If not addressed, the CMF could revoke such a bank’s authorization to operate.
In accordance with Article No. 51 of the General Banking Act, a bank may begin its operations with 50% of the previously mentioned amount, with no specific timeframe for the establishment of the remaining amount. However, if the bank does not comply with the minimum capital amount, it would be required to hold further Common Equity Tier 1 capital for an amount representing 2.0% of its risk-weighted assets, in addition to the 4.5% required for all banks, plus any capital buffer or charge as defined by the regulation. The additional amount of Common Equity Tier 1 capital will be reduced to 1.0%, as a percentage of its risk-weighted assets, when the bank’s paid-in capital and reserves reach at least UF 600,000 (approximately Ch$23,837 million or U.S.$26.5 million as of December 31, 2025).
As of December 31, 2025, we fully complied with such minimum capital requirements.
Modifications to the General Banking Act
The legal framework incorporated into the General Banking Act (Decreto con Fuerza de Ley No. 3) by Law No. 21,130 (Modernization of Banking Legislation) published on January 12, 2019, addressed the following four main topics on banking regulation and supervision:
| ● | Adoption of Basel III guidelines on capital adequacy. Under regulatory modifications adopting Basel III, new minimum capital requirements levels, in line with the main standards of Basel III Pillar 1, must be fulfilled by Chilean banks, considering a phased-in transition of four years after the specific regulatory framework is issued by the regulator. The new legal framework established additional potential capital requirements associated with Pillar 2 of Basel III, for banks having objective deficiencies in terms of coverage and management of banking-related risks. The phase-in period for the transition from Basel I to Basel III was originally expected to start in December 2020 and subsequently postponed to December 2021, due to the COVID-19 pandemic, including the measurement of risk-weighted assets, the fulfillment of the systemic capital charge and the conservation buffer. Adjustments to CET1 Capital were postponed for one year and commenced in December 2022 at 15%. As of December 31, 2025, all Basel III core capital requirements and guidelines were fully in place. |
Following the above, after periods for public comment, by December 2021, all the final rules had been issued by the CMF. The rules already in place are part of the Recopilación Actualizada de Normas (“RAN”) of the CMF and relate to:
| a. | The guidelines for calculation and composition of Total Regulatory Capital for banks (RAN 21-1), are as follows: |
| 1. | CET1 Capital: is composed of (i) paid-in capital related to common shares, (ii) stock surplus (share premium) resulting from the issuance of instruments included in CET1, (iii) reserves whether they come from net income, depreciation or expiration of perpetual bonds or not, (iv) accumulated other comprehensive income related to financial instruments measured at fair-value, (v) retained earnings or losses, net of provisions for minimum dividends, appreciation of perpetual bonds or interests/dividends paid on financial instruments issued for capital adequacy purposes, and (vi) minority interest. The CET1, however, is subject to a set of adjustments that include: (i) minority interest, (ii) goodwill and intangible assets, (iii) deferred tax assets (not related to temporary differences), (iv) accumulated other comprehensive income related to cash flow hedge accounting derivatives, (v) insufficiency of credit risk allowances when using internal methodologies for risk weighted assets, (vi) earnings from the sale of securitized assets, (vii) accumulated gains or losses from changes in own issuer risk related to financial liabilities measured at fair value (such as debit value adjustment for derivatives), (viii) assets related to pension plans for staff, (ix) investments in own assets, (x) significant and not significant investments, and (xi) threshold adjustments in line with Basel III. Banks are required to have CET1 Capital (for compliance with minimum levels) equal to at least 4.5% of risk-weighted assets. |
| 2. | AT1 Capital: is comprised of perpetual bonds and preferred stocks that (for compliance with minimum levels) must be equal to at least 1.5% of risk-weighted assets, once the CET1 minimum requirements have been fulfilled. Instruments issued by banks’ subsidiaries are not taken into consideration for these purposes. |
| 3. | Tier 1 Capital or T1: is the sum of CET1 and AT1. |
| 4. | Tier 2 Capital: is comprised of (i) subordinated bonds of up to 50% of CET1 Capital, excluding subordinated bonds issued by banks’ subsidiaries, and (ii) voluntary provisions of up to 1.25% of credit risk-weighted assets if computed by standardized methodology or 0.625% if computed through internal methodologies (if approved by the CMF). Tier 2 capital may represent (for compliance of minimum levels) up to 2.0% of risk-weighted assets, once fulfilled the Tier 1 Capital minimum requirements; and |
| 5. | Total Regulatory Capital: is the sum of Tier 1 Capital and Tier 2 Capital. |
| b. | Conditions to be fulfilled for the issuance of financial instruments representing AT1 Capital (RAN 21-2), while permitting a temporary substitution of AT1 Capital with T2 Capital of up to 1.5% of risk-weighted assets starting December 1, 2020, decreasing by 0.5% per year until reaching zero on December 1, 2023. |
| c. | Conditions to be fulfilled for the issuance of financial instruments representing Tier 2 capital (RAN 21-3), to be computed as part of Total Regulatory Capital. |
| d. | A comprehensive framework for the measurement of credit risk-weighted assets for banks under both a standardized methodology and internal models (RAN 21-6). The framework permits the application for internal models (Foundational Internal Ratings Based Approach), which –if approved by the CMF– will be subject to an output floor of 72.5% of the credit-risk weighted assets determined under the standardized methodology. |
| e. | A standardized framework for determining market risk-weighted assets for the trading book (RAN 21-7). The framework does not consider the possibility of using internal models or fundamental review of the trading book, which would be analyzed by the CMF in the future; |
| f. | A standardized methodology for determining operational risk-weighted assets of banks (RAN 21-8), with no possibility of applying internal models. |
| g. | Additional CET1 capital requirements (RAN 21-12), including both the conservation buffer equivalent to 2.5% of risk-weighted assets and the countercyclical buffer of up to 2.5% of risk-weighted assets. The conservation buffer commenced on December 1, 2021 at 0.625% and gradually increased to 2.5% on December 1, 2024. The Central Bank is responsible for activating or deactivating the countercyclical buffer, which afterwards must be monitored by the CMF. As of the date of this annual report, there was a countercyclical buffer fully in place amounting to 0.5% of banks’ risk-weighted assets. |
| h. | A methodology for determining a D-SIB or groups of banks (RAN 21-11), including the guidelines to determine the corresponding capital requirement. This capital requirement, imposed by the CMF in agreement with the Central Bank, could range from 1.0% to 3.5% of risk-weighted assets and it should be met with CET1. As of the date of this annual report, a systemic capital charge of 1.25% was assigned on us, which became fully in place on December 31, 2025. |
Banks designated as D-SIB could also be subject to add-ons to the leverage ratio requirement and other restrictions, such as an increase in technical reserve requirements (from the excess of demand deposit balances over 2.5 times the Total Regulatory Capital to 1.5 times the Total Regulatory Capital) and a decrease in the portion of interbank loans that a systemically important bank can have (from 30% to 20%), among others.
| i. | A framework for the calculation of leverage ratio (RAN 21-30), which considers a minimum level CET1 Capital equivalent to 3.0% of banks’ total risk assets, although an add-on of up to 50% of the systemic capital charge could be imposed to D-SIB banks; |
| j. | The Pillar 2 framework (RAN 21-13 and amendments to the current RAN 1-13) for the regulatory review process, which establishes a set of requirements associated with the infrastructure, processes and governance that banks should comply with in order to ensure proper capital and risk management protocols. Pillar 2 includes other-than-Pillar-1 risks to be addressed by banks, such as interest rate risk in the banking book (“IRRBB”), credit concentration risk, strategic risk and reputational risk, among others. Also, Pillar 2 incorporates the obligation for banks to carry out stress tests for relevant risks while incorporating their results for capital management purposes. Under Pillar 2, a bank will be subject to closer supervision if defined as “outlier” bank, i.e., if the IRRBB metrics exceed (i) 15% of the Tier 1 capital in the case of long-term IRRBB metric, or (ii) 5% of the Tier 1 capital or 18% of the net interest and inflation-indexation income over a rolling 12-month period. Also, Pillar 2 empowers the CMF to impose further capital requirements of up to 4.0% of risk-weighted assets. |
| k. | Pillar 3 disclosure requirements became effective in April 2023 and require banks to disclose information on risk and capital management related matters, on a quarterly basis. |
| l. | Limits to significant exposures (Article 84 of General Banking Act) through RAN 12-16. |
| ● | Changes to the governance of the banking regulator. According to these modifications and timeframe for implementation, the SBIF ceased its operations and all of its powers, authority and personnel were transferred to the CMF. As a result, the local supervision model changed from a specific regulator to an integrated supervision model. For further information on the description of this new banking regulator, see “Item 4. Information on the Company—Regulation and Supervision—The Financial Market Commission.” |
| ● | Establishment of a new banking resolution regime for the Chilean banks in the case of insolvency. The new banking framework outlines specific actions to be taken under scenarios of insolvency or signs of financial distress. In this regard, the General Banking Act, as modified, establishes the possibility of undertaking an early regularization plan in case of signs of financial weakness, capitalization in the form of loans to be granted by other banks or forced liquidation in case of insolvency. For each scenario, the appointment of a delegated inspector, a provisional administrator or a liquidator, among other elements, is introduced. On January 31, 2023, the CMF published a white paper titled “Guidelines for a new banking resolution framework and deposit insurance in Chile” for comment until July 31, 2023. Also, on January 21, 2026, the CMF published for public comment until June 10, 2026, a set of amendments to the RAN that seek to strengthen the corporate governance framework, reinforce the risk management framework and introduce a formal recovery planning process. As of the date of this annual report, no final rules on these matters have been published yet. For further information see “Item 3. Key Information—Risk Factors—Risks Relating to our Operations and the Chilean Banking Industry—Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations—Basel III Implementation.” |
| ● | The modifications to the General Banking Act also address other matters such as increased deposit insurance for time deposits, stricter requirements for members of banks’ boards of directors, changes in relation to confidential information of bank customers, among others. With regards to confidentiality of customers, certain conditions of access to information subject to banking secrecy are required, upon special request of the Financial Analysis Unit (responsible for watching anti-money laundering activities) in the case of an investigation or prosecution. |
For further information, see “Item 3. Key Information—Risk Factors—Risks Relating to our Operations and the Chilean Banking Industry—Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations—Basel III Implementation.”
Capital Adequacy Regulations
After a phase-in period of four years, as of December 31, 2025 all capital requirements related to the adoption of Basel III framework became fully in place, which may be summarized as follows:
| ● | According to Article No. 66 of the General Banking Act, each bank should comply with the following capital requirements as a percentage of its risk-weighted assets, net of required provisions: |
| ○ | Common Equity Tier 1 Capital (CET1) above 4.5% of risk-weighted assets; |
| ○ | Tier 1 Capital = CET1 Capital + Additional Tier 1 Capital (AT1) above 6.0% of risk-weighted assets; and |
| ○ | Tier 1 + Tier 2 above 8.0% of risk-weighted assets. |
| ● | Conservation Buffer of 2.5% of risk-weighted assets, as defined in Article No. 66 bis of the General Banking Act. |
| ● | Countercyclical Buffer of up to 2.5% of risk-weighted assets, as defined in Article No. 66 ter of the General Banking Act, to the extent applicable. |
| ● | D-SIB capital charge in the range of 1.0% to 3.5% of risk-weighted assets, as defined in Article No. 66 quáter of the General Banking Act. |
| ● | Pillar 2 capital charge of up to 4.0% of risk-weighted assets, as defined in Article No. 66 quinquies of the General Banking Act, to the extent applicable, to be fulfilled in a six-month timeframe. |
| ● | A leverage ratio, meaning CET1 Capital of at least 3% of their total risk assets, net of required provisions. If a bank is defined as a D-SIB bank, the threshold for the leverage ratio could further increase up to 50% of the systemic capital charge imposed over risk-weighted assets but over total risk assets. |
These thresholds, except for Pillar 2, must be fulfilled with CET1 capital exclusively. However, the Pillar 2 charge, if any, could be met with CET1 capital, AT1 capital (perpetual bonds or preferred stocks) or Tier 2 Capital (subordinated bonds or disclosed reserves) according to the bank’s actual capital structure or as requested by the CMF.
Furthermore, in accordance with the modifications to the General Banking Act, the authorization and/or report from the Central Bank will be necessary for the implementation of several Basel III capital adequacy guidelines set forth in these modifications, such as the countercyclical buffer, which will rely on a methodology defined by the Central Bank while its activation will be in agreement with the CMF. On the other hand, the systemic and the Pillar 2 capital charges, if any, will be defined exclusively by the CMF with agreement of the Central Bank board.
For more information on the composition of capital tiers and guidelines associated with calculation of risk-weighted assets and buffers, see “Item 4. Information on the Company—Regulation and Supervision—Modifications to the General Banking Act.”
On March 30, 2022, the CMF announced systemic charges for the six previously-determined D-SIB banks, including us. Based on the methodology established by the CMF for this purpose, a systemic charge equivalent to 1.25% was assigned to us, to be fulfilled on a gradual basis at an annual and cumulative rate of 25% per year, commencing December 1, 2022, and (if maintained unchanged) completed on December 1, 2025. On March 31, 2023, April 1, 2024, April 1, 2025, and March 30, 2026 the CMF reaffirmed the systemic charge on us at the level of 1.25%. Accordingly, as of December 31, 2025 and as of the date of this annual report, we were subject to a systemic charge of 1.25%.
On May 23, 2023, the Chilean Central Bank activated a countercyclical buffer for the local banking system amounting to 0.5% of the banks’ risk-weighted assets, starting in May 2024. According to the Central Bank’s Board, the countercyclical buffer was set as a prudential measure in view of the increased uncertainty regarding the likelihood of a severe external shock. Although the probability of this kind of shock is low, its occurrence could have a significant negative effect on the economy, in which case the countercyclical buffer would be released in order to mitigate the second-round effects on lending for individuals and companies. The 0.5% countercyclical buffer was subsequently reaffirmed by the Central Bank in November 2024 and November 2025. It is worth noting the Central Bank has declared the intention to set a neutral countercyclical buffer of approximately 1.0% in the future, which will be assessed by the Central Bank’s board in May 2026.
On January 13, 2024, we received communication from the CMF stating that, based on the overhaul of our Internal Capital Adequacy Assessment Process for the year ended December 31, 2022, a Pillar 2 capital requirement equivalent to 0.5% of our risk-weighted assets was imposed on us. On January 16, 2025, the CMF informed us the decision to maintain the Pillar 2 capital requirement at 0.13% of the risk-weighted assets, net of required provisions, which is equivalent to the Pillar 2 requirement we already fulfilled since June 2024, given the phase-in period considered for such purposes. More recently, on January 16, 2026 the CMF informed Pillar 2 capital charges assigned to seven local banks while removing the capital requirement formerly imposed on us.
As of December 31, 2025, and as of the date of this annual report, we are in full compliance with all capital adequacy requirements. For further information on the types and levels of capital CET1, Tier 1, Tier 2 and Total Regulatory Capital we currently hold, our capital ratios and compliance, see “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Capital Adequacy Requirements.”
For more information on potential changes to capital requirements for the industry and specific capital requirements for us, see “Item 3. Key Information—Risk Factors—Risks Relating to our Operations and the Chilean Banking Industry—Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations—Basel III Implementation.”
Market Risk Regulations
Classification of Financial Instruments
In June 2006, the banking regulator introduced new regulations concerning: (i) the valuation process of debt instruments and (ii) the measurement and reporting of counterparty credit risk generated by derivative transactions. Since the implementation of the new Compendium of Accounting Standards for Banks starting January 1, 2022, Chilean banks classify debt instruments for accounting and business purposes as either Financial Assets measured at Fair Value through Other Comprehensive Income (“FVOCI”) or Financial Assets measured at “Amortized Cost,” which is aligned with IFRS Accounting Standards as issued by the IASB.
Market Risk-Weighted Assets
As part of the new regulations associated with the implementation of Basel III, the standardized model for measuring the price risk of the trading book was modified by the CMF and began to be reported by banks for market risk and capital management purposes beginning in July 2021 through report R07 while being utilized to measure risk-weighted assets for market risk starting December 1, 2021. The new guidelines, as appearing in RAN 21-7, introduced more definitions to precisely distinguish the trading and the banking book while the new standardized model incorporated certain methodological changes and revised treatments while adding further trading exposures when compared to the former model used since 2005. Thus, the new standardized model continues to determine general interest rate risk, foreign exchange or exchange rate risk (taken in both their trading and banking books) and option risk, to the extent applicable, while adding specific interest rate risk for the fixed-income portfolio (issuer risk), commodity risk and stock market risk (including stocks, indices and funds). The outcome of the application of the new standardized model delivers the Market Risk Exposure (EMR), which is multiplied by 12.5 to compute the market risk-weighted assets that are part of the total risk-weighted assets over which Chilean banks are required to maintain minimum amounts of CET1, Tier 1 Capital, and Total Regulatory Capital as defined in “Item 4. Information on the Company—Regulation and Supervision—Capital Adequacy Requirements.”
According to the RAN 21-7, the trading book is composed of portfolios of debt and equity instruments that have a liquid secondary market and therefore their valuation is at market prices and the corresponding profit and losses impact is representative of market conditions. In addition, all derivative transactions, options, exchange rate mismatches and positions in mutual funds, investment funds and stock indices are also part of the trading book, to the extent applicable. The accrual book comprises all the asset and liability balance sheet items that are not part of the trading book.
As of December 31, 2025, we had the following consolidated exposure to market risk and consolidated market risk-weighted assets in our trading book:
| As
of December 31, 2025 |
||||
| In Millions of Ch$ | ||||
| Market Risk Exposure (MRE) | Ch$ | 136,963 | ||
| Market Risk-Weighted Assets (MRE x 12.5) | Ch$ | 1,712,039 | ||
Interest Rate Risk of the Banking Book (IRRBB)
Aligned with the implementation of the Basel III, the CMF proposed a revised standardized methodology for measuring IRRBB, which is contained in the RAN 21-13 as part of the Pillar 2 guidelines. In November 2022, the new standardized model began to be reported to the CMF through report R13, on both an individual and a consolidated basis. The standardized model was revised by the CMF in November 2025. As of the date of this annual report, the IRRBB is reported to the CMF in accordance with self-imposed internal limits, both on an individual and consolidated basis. As of the same date, for short-term interest rate risk (∆NII) in the banking book, the internal limit has been set at 20% of the 12-month rolling net interest and inflation-indexation income. For long-term (full life) interest rate risk (∆EVE) in the banking book, the internal limit has been set at 15% of Tier 1 Capital.
As of December 31, 2025, we had the following exposure to the IRRBB:
| As
of December 31, 2025 |
||||
| In Millions of Ch$ | ||||
| Regulatory Metrics | ||||
| Short-Term Interest Rate Risk | Ch$ | 142,570 | ||
| Inflation-Indexation Risk | 220,773 | |||
| Total Short-Term Interest Rate Risk (∆NII) | Ch$ | 363,343 | ||
| Long-Term Interest Rate Risk (∆EVE) | Ch$ | 552,270 | ||
| As
of December 31, 2025 |
||||
| In % | ||||
| Regulatory Indices | ||||
| ∆NII / 12-month Net Interest and Inflation-Indexation Income | 17.7 | % | ||
| ∆NII / Tier 1 Capital | 6.4 | |||
| ∆EVE / Tier 1 Capital | 9.8 | % | ||
Prior to November 2025, the CMF determined whether a bank is “outlier,” if the outcome of the long-term interest rate risk in the banking book (∆EVE) exceeded 15% of the Tier 1 Capital. If defined as outlier, a bank could be subject to further capital requirements and closer supervision. Likewise, if the CMF determines that an outlier bank presents evident deficiencies in risk or capital management or capital adequacy weaknesses in view of its risk exposures, the bank could be subject to additional capital requirements as defined in RAN 21-13. More recently, after two public comment periods initiated in December 2023 and October 2024, on July 8, 2025, the CMF published the final set of amendments to Chapter 21-13 of the RAN, which included: (i) the removal of the 15% threshold of the Tier 1 Capital that previously determined a potential capital requirement for the amount equivalent to the excess of the ∆EVE over such threshold while allowing the CMF to impose capital requirements for the full amount of the ∆EVE or the amount of the ∆NII interest rate risk in the banking book, (ii) a revised framework to determine outlier banks (also called as “prioritized”) by maintaining the 15% threshold of the Tier 1 Capital based on ∆EVE while adding new thresholds for ∆NII amounting to 5% of Tier 1 Capital and 18% of 12-month rolling Net Interest and Inflation-Indexation Income, conditions that –if individually met– will determine an outlier bank that would be subject to further assessment and additional capital requirements, (iii) some methodological modifications to the standardized model for computing IRRBB by allowing the netting for some specific currencies (CLP and CLF) while differentiating interest rate shocks for ∆NII and ∆EVE, (iv) the possibility for banks to use internal models in order to determine potential internal capital buffers associated with IRRBB, (v) specific guidelines for banks in order to assess their risk profile and measure material risks, (vi) new guidelines for the definition of internal capital targets by adopting the Pillar 2 Requirement and Pillar 2 Guidance concepts, as defined in the Basel III framework, (vii) new disclosure requirements for Pillar 2 capital requirements, and (viii) the establishment of a maximum extension for the ICAAP Annual Report.
For further information see “Item 3. Key Information—Risk Factors—Risks Relating to Our Operations and the Chilean Banking Industry—Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations—Basel III Implementation.”
Counterparty Credit Risk for Derivative Positions
The counterparty credit risk for derivative transactions, for regulatory purposes, must be measured and reported as:
| Derivatives Counterparty Credit risk |
= | Current Mark-to-Market (if positive) |
+ | Credit Conversion Factor (%) |
* | Notional Amount |
The Current Mark-to-Market (“CMTM”) of the transaction, if positive, reflects the amount of money owed by the counterparty to us at a specific date, e.g., the amount the counterparty would pay us if the transaction were unwound as of that date. As we are interested in measuring the maximum amount of money that the customer would owe us within the life of the transaction, the maximum potential future value of the transaction is added to the CMTM. This potential value is measured as the Credit Conversion Factor multiplied by the Notional Amount involved in the transaction. Hence, the Credit Conversion Factor reflects the potential value that the transaction may hold for us (under some confidence level) within its remaining tenor. The regulator determines the Credit Conversion Factor depending on the market factors involved in the respective transactions and the remaining tenor by considering three categories (interest rates, exchange rates, and equity prices). In addition, banks usually develop their own Credit Conversion Factors models to assess credit risk not only under regulatory guidelines. Netting and credit mitigation schemes, such as recouping, early termination, margins, etc., have been allowed by regulators so that banks can better manage their credit risk while including them (netting in particular) to measure credit risk for regulatory purposes.
For derivative contracts cleared and settled through a Central Counterparty Entity (CCP) authorized by the CMF, the regulatory framework establishes a risk-weighting of 2% over the amount of Derivatives Credit Risk for calculation of credit risk-weighted assets. Also, due to its original interbank nature, exposures to CCPs are subject to a credit concentration limit of 30% of the Total Regulatory Capital, as defined above.
Liquidity Risk Regulations
The Bank establishes a liquidity risk tolerance to maintain a suitable liquidity position to meet all its contractual obligations at any time and under any circumstances, as well as to meet the minimum requirements defined by regulators, as established by Chapter III.B.2.1 of the Compendium of Financial Regulations of the Chilean Central Bank and Chapters 12-20 and 21-14 of the RAN of the CMF. In addition, the Bank seeks to ensure the availability of funds to take advantage of business opportunities and to be duly prepared to face extreme scenarios of stress and/or liquidity contingency.
The guidelines for measuring liquidity risk in Chile are mainly focused on:
| ● | C46 index or C46 report: Effective since 2015, this index analyzes the expected cash flows for the following 30 and 90 days, broken down by currency. Net outflows may not exceed the amount of CET1 Capital for the following 30 days or two times that amount for the following 90 days. |
Even though since 2015, the C46 index was subject to the mentioned limits, on March 8, 2022, the Chilean Central Bank removed the regulatory limit for 30-day and 90-day cash flow mismatches in local currency while maintaining the limit for 30-day cash flow mismatches in foreign currency as measured by the C46 index.
Subject to approval of the CMF, the cash flow analysis may include behavioral run-off assumptions for some specific liability balance sheet items (demand deposits, time deposits, etc.) and behavioral roll-over assumptions for some asset items of the consolidated statement of financial position (loans, etc.).
| ● | Liability Concentration or C47 report: Effective since 2016, this report focuses on liabilities analysis from the concentration, maturity and renewal perspectives. As a result, this report characterizes the balance sheet liability structure considering retail, non-financial wholesale, and financial wholesale counterparties. |
| ● | Basel III Liquidity Requirements: Effective since 2016, and revised in 2018, these guidelines address liquidity requirements through C49 report (formerly C48 report between 2016 and 2018) and, more specifically, by means of the follow-up of both the LCR and the NSFR. |
On May 4, 2018, through an amendment to Chapter III.B.2.1 of Compendio de Normas Financieras (the Compendium of Financial Norms), the Central Bank outlined the main guidelines for banks to measure and control the liquidity position while establishing a five-year period for minimum LCR requirements to be fulfilled by banks, starting at 60% in 2019 and reaching the final limit of 100% in 2023 (with annual increases of 10%).
Subsequently, on March 8, 2022, the Chilean Central Bank introduced changes to Chapter III.B.2.1 of the Compendium of Financial Norms, that resulted in: (i) bringing forward the increase of the LCR limit to 90% for the period between January and June 2022 and to 100% from June 2022 onwards, (ii) the incorporation of a regulatory limit for NSFR starting at 60% in June 2022 and increasing 10% in January 2023 and subsequently 10% per year until reaching 100% in January 2026, and (iii) a specific treatment for securities pledged as “technical reserve” in order to take them into account as high-quality liquid assets, among other topics.
Therefore, as of the date of this annual report, we are subject to the following liquidity regulatory limits:
| ● | For C46 index, mismatches between modeled cash inflows and cash outflows over a 30-day period in foreign currency must not exceed one time the amount of CET1 Capital. |
| ● | For C49 report, the LCR must exceed the regulatory limit of 100%. |
| ● | For C49 report, the NSFR must exceed the regulatory limit of 100%. |
As of December 31, 2025 and as of the date of this annual report, we fully complied with all minimum liquidity requirements.
As of the date of this annual report, no further liquidity requirements have been imposed on us as a result of the CMF’s analysis of our Internal Liquidity Adequacy Assessment Process report.
Lending Limits
Under the General Banking Act, Chilean banks are subject to certain lending limits, including the following material limits:
| ● | A bank may not extend to any entity or individual, directly or indirectly, unsecured credit in an amount that exceeds 10% of the bank’s Total Regulatory Capital, or in an amount of up to 30% of its Total Regulatory Capital if the excess over 10% is secured by certain assets with a value equal to or higher than such excess. |
| ● | In the case of loans associated with financing for infrastructure projects built through the concession mechanism, the 10% ceiling for unsecured credits is raised to 15% of the bank’s Total Regulatory Capital if secured by a pledge over the concession, or if granted by two or more banks or financial companies which have executed a credit agreement with the builder or holder of the concession. |
| ● | A bank may not extend loans in an aggregate amount exceeding 30% of its Total Regulatory Capital to a group of persons or entities belonging to the same holding group (grupo empresarial) as defined in the Securities Market Law. |
| ● | A bank may not extend loans to another financial institution subject to the General Banking Act in an aggregate amount exceeding 30% of its Total Regulatory Capital. |
| ● | A bank may not extend to any individual or entity that is, directly or indirectly, related to the ownership or management of the bank, credit under more favorable terms with respect to repayment conditions, interest rates or collateral than those granted to third parties in similar transactions. The aggregate amount of such credits granted to related parties may not exceed 5% of the bank’s Total Regulatory Capital. The 5% unsecured ceiling is raised to 25% of the bank’s Total Regulatory Capital if the excess over 5% is secured by certain assets with a value equal to or higher than such excess. In any case, the aggregate amount of these credits granted by the bank may not exceed the bank’s Total Regulatory Capital. |
| ● | A bank may not directly or indirectly grant a loan, the purpose of which is to allow an individual or entity to acquire shares of the lender bank. |
| ● | A bank may not lend, directly or indirectly, to a director or any other person who has the power to act on behalf of the bank. |
| ● | A bank may not grant loans to related parties (including holders of more than 1% of its shares or 5% of its shares if these are actively traded stocks) on more favorable terms than those generally offered to non-related parties. Loans granted to related parties are subject to the limitations above. The aggregate amount of loans to related parties may not exceed a bank’s Total Regulatory Capital. |
As of December 31, 2025, we fully complied with the lending limits established by the General Banking Act.
Classification of Banks
The CMF regularly examines and evaluates each bank’s solvency and credit management process, including its compliance with loan classification guidelines. On the basis of this evaluation, it classifies banks into various categories.
Solvency and Management
Under current Chilean banking regulations, banks are classified into categories “I” through “V” based upon their solvency and management ratings. This classification is confidential.
| Category I: | This category is reserved for banks that have been rated level A in terms of solvency and management. |
| Category II: | This category is reserved for banks that have been rated (i) level A in terms of solvency and level B in terms of management, (ii) level B in terms of solvency and level A in terms of management, or (iii) level B in terms of solvency and level B in terms of management. |
| Category III: | This category is reserved for banks that have been rated (i) level B in terms of solvency and level B in terms of management for two or more consecutive review periods, (ii) level A in terms of solvency and level C in terms of management, or (iii) level B in terms of solvency and level C in terms of management. |
| Category IV: | This category is reserved for banks that are rated level A or B in terms of solvency and have been rated level C in terms of management for two or more consecutive review periods. |
| Category V: | This category is reserved for banks that have been rated level C in terms of solvency, irrespective of their rating level of management. |
A bank’s solvency may be classified in level A, B or C in accordance with the following:
| ● | Level A (solvency): when a bank’s Total Regulatory Capital to risk weighted assets ratio (including additional tier 1 Capital associated with conservation buffer) is equal to or greater than 10.5% and, when applicable, the additional requirements of systemic charge and countercyclical buffer and Pillar 2 charge. Likewise, the common equity tier 1 to risk weighted assets ratio must be 7.0% or higher and, when applicable, the additional requirements of systemic charge and countercyclical buffer and Pillar 2 charge. Finally, the ratio between the common equity tier 1 and total assets must be 3% or higher, and, when applicable, the domestic, systemic charge. |
| ● | Level B (solvency): bank that meets requirements for Common Equity Tier 1 Capital and Total Regulatory Capital but does not meet the additional requirements stated for Level A (solvency). |
| ● | Level C (solvency): bank that meets neither Common Equity Tier 1 Capital nor Total Regulatory Capital requirements as required by the General Banking Act. |
With respect to a bank’s management rating, level A banks are those that are not rated as level B or C. Level B banks display some weakness in corporate governance, internal controls, IT security, information systems for decision making, timely follow-up of risks private risk rating or ability to manage contingency scenarios. Level C banks display significant deficiencies in the abovementioned matters.
The above-mentioned requirements are set forth in both the General Banking Act and the Chapter 1-13 of the RAN. The latter further states an array of requirements, guidelines and good practices to be considered by banks in the management of business continuity risks, considering the volume and complexity of their operations. The corresponding adherence to these practices will be considered in the management evaluation “Solvency and Management Classification” carried out by the CMF.
Requirements for Obligations Denominated in Foreign Currencies
Foreign currency-denominated obligations of Chilean banks are subject to two requirements:
| ● | a reserve requirement of 9.0% for demand deposits and 3.6% for time deposits (see “Item 4. Information on the Company—Regulation and Supervision—Reserve Requirements”); and |
| ● | net foreign currency outflows may not exceed the amount of the Common Equity Tier 1 Capital for the next 30 days as measured by the C46 index. |
Capital Markets
Under the General Banking Act, banks in Chile may purchase, sell, place, underwrite and act as paying agents with respect to certain debt securities. Likewise, banks in Chile may place and underwrite certain equity securities. Bank subsidiaries may also engage in debt placement and trading, equity issuance advice and securities brokerage, as well as mutual fund and investment fund administration, factoring, investment advisory services and merger and acquisition services. The CMF regulates these subsidiaries.
Provisions on Banking Institutions with Economic Difficulties
The General Banking Act provides that if specified adverse circumstances exist at any bank, it must promptly inform the CMF and must shortly propose to the CMF an early regularization plan duly approved by its board of directors. If the plan is approved by the CMF, which may also require additional measures, the bank must report periodically to the regulator regarding the implementation of such plan. All communications between a bank with economic difficulties and the CMF regarding this matter is reserved. If, among the measures addressed by the early regularization plan, a capital increase is required, the board of directors must call for an extraordinary shareholders meeting setting forth the conditions of such capital increase, which must be approved by the banking regulator. Another measure that may be included in the early regularization plan is that the bank may receive a loan of up to three-year term from other bank(s). The terms and conditions of such loan must be approved by the board of directors of both banks, as well as by the banking regulator, but need not be submitted to the borrowing bank’s shareholders for their approval. A creditor bank may not grant such interbank loans to an insolvent bank in an amount exceeding 25% of the creditor bank’s Total Regulatory Capital. Such loan may only be repaid if the borrowing bank complies with certain capital requirements. If this loan is not repaid timely, the General Banking Law provides the possibility that such loan may be capitalized by the lending banks in the form of equity of the borrowing bank.
The CMF may further impose certain prohibitions to banks with economic difficulties, such as prohibitions on granting loans to related parties, renewing any loan for more than 180 days, releasing guarantees, acquiring or selling certain assets, granting unsecured loans, investing in any securities other than instruments issued by the Central Bank or by the Chilean Treasury, among others. Furthermore, if the bank with economic difficulties does not present an early regularization plan (or if it is unfulfilled or breached by this bank, among other reasons provided by the General Banking Act), the banking regulator may appoint a delegate inspector to oversee the bank’s operations or a provisional administrator (appointment to be approved by the Central Bank as well) who will take over the powers and authority of the bank’s board of director and chief executive officer; however, the provisional administrator authority is limited to the extent provided by the General Banking Act and should always be in line with the interests of depositors, creditors and those of the general public related to financial stability.
On January 21, 2026, the CMF published for public comment a set of amendments to the RAN, intended to reinforce banks’ risk management framework while introducing a requirement for banks to establish recovery planning processes in the event of financial distress. The public comment period for this proposal ends on June 10, 2026. As of the date of this annual report, the final rules, if any, have not been published. For further information, see “Item 3. Key Information—Risk Factors—Risks Relating to our Operations and the Chilean Banking Industry—Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations.”
Dissolution and Liquidation of Banks
The banking regulator may establish that a bank should be liquidated for the benefit of its depositors or other creditors when the bank does not have the necessary solvency to continue its operations. In which case, the CMF must revoke the bank’s authorization to exist and order its mandatory liquidation, subject to the agreement of the Central Bank. The General Banking Act establishes certain criteria by which it will be deemed that a bank does not have the necessary solvency or that the safety of its depositors may be jeopardized, such as when it does not reach certain minimum or Total Regulatory Capital thresholds, upon aggregate and consecutive losses, when urgency credits with the Central Bank are due and when it has suspended the repayment of its obligations. The resolution of the banking regulator must state the reason for ordering the liquidation and must name a liquidator. When a liquidation is declared, all current accounts, other demand deposits received in the ordinary course of business, other deposits unconditionally payable immediately or that have a maturity of no more than 30 days, and any other deposits and receipts payable within 10 days of its maturity date, are required to be paid by using the bank’s existing funds, its deposits with the Central Bank, or its investments in instruments that represent its reserves. If these funds are insufficient to pay these obligations, the liquidator may seize the bank’s remaining assets, as needed. If necessary, and in specified circumstances, the Central Bank will lend the bank the funds necessary to pay these obligations. Any such loans are preferential to any claims of other creditors of the liquidated bank.
On January 30, 2023, the CMF published a white paper “Guidelines for a new banking resolution framework and deposit insurance in Chile” for public comment until July 31, 2023. As of the date of this annual report, no final regulation has been issued on this matter. For further information, see “Item 3. Key Information—Risk Factors—Risks Relating to our Operations and the Chilean Banking Industry—Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations.”
Investments in Foreign Securities
Under current Chilean banking regulations, banks in Chile may grant loans to foreign individuals and entities and invest in certain foreign currency securities. Chilean banks may only invest in equity securities of foreign banks and certain other foreign companies which may be affiliates of the bank or which would support the bank’s business if such companies were incorporated in Chile. Banks in Chile may also invest in debt securities traded in formal secondary markets. Such debt securities shall qualify as (i) securities issued or guaranteed by foreign sovereign states or their central banks or other foreign or international financial entities, and (ii) bonds issued by foreign companies. Such foreign currency securities must have a minimum rating as indicated in the table below and, if the investments in these securities and the loans referred to above exceed 70% of the bank’s Total Regulatory Capital, an allowance for 100% of the excess shall be established:
| Rating Agency | Short Term | Long Term | ||
| Moody’s Investor Service (Moody’s) | P2 | Baa3 | ||
| Standard and Poor’s (S&P) | A2 | BBB– | ||
| Fitch Rating Service (Fitch) | F2 | BBB– | ||
| Dominion Bond Rating Service (DBRS) | R2 | BBB(low) |
A Chilean bank may invest in securities having a minimum rating as follows, provided that if the total amount of these investments and the loans referred to above exceed 20% (or 30% in certain cases) of the bank’s Total Regulatory Capital, an allowance of 100% of the excess shall be established by the bank:
| Rating Agency | Short Term | Long Term | ||
| Moody’s Investor Service (Moody’s) | P2 | Ba3 | ||
| Standard and Poor’s (S&P) | A2 | BB– | ||
| Fitch Rating Service (Fitch) | F2 | BB– | ||
| Dominion Bond Rating Service (DBRS) | R2 | BB(low) |
However, a Chilean bank may invest in securities up to an additional amount of 70% of the bank’s Total Regulatory Capital without having to establish an additional allowance, if such securities have a minimum rating of:
| Rating Agency | Short Term | Long Term | ||
| Moody’s Investor Service (Moody’s) | P1 | Aa3 | ||
| Standard and Poor’s (S&P) | A1+ | AA– | ||
| Fitch Rating Service (Fitch) | F1+ | AA– | ||
| Dominion Bond Rating Service (DBRS) | R1(high) | AA(low) |
Subject to specific conditions, a bank may grant loans in U.S. dollars to subsidiaries or branches of Chilean companies located abroad, to companies listed on foreign stock exchanges located in countries with an international risk rating no less than BB- or its equivalent and, in general, to individuals and entities residing or domiciled abroad.
Internationalization of the Chilean peso
In December 2020, the Central Bank enacted regulation with the purpose of internationalizing the Chilean peso, by virtue of which certain offshore transactions denominated in Chilean pesos shall be allowed. For instance, since March 2021, Chilean banks may: (i) execute off-shore derivative transactions settled or paid in Chilean pesos; (ii) open and maintain Chilean peso denominated current accounts to non-Chilean residents and (iii) grant off-shore loans denominated in Chilean pesos to non-Chilean residents. Likewise, since September 2021, Chilean residents are permitted to make Chilean peso denominated foreign deposits or investments and to grant loans, make capital contributions and other investments abroad, all denominated in Chilean pesos.
Management of Information of Interest to the Market, Financial Information and Pillar 3 Information
In order to ensure compliance with the provisions of the Ley de Mercado de Valores No. 18,045 (the Chilean “Securities Market Law”) and further specific regulations, our board of directors has approved the Manual for the Management of Information of Interest to the Market (the “Manual”).
The Manual’s main objective is to provide timely disclosure of our policies and internal regulations in connection with the disclosure of information to the public and the systems that have been implemented by us. In addition, these policies and internal regulations establish codes of conduct that our employees and other people with access to certain information must comply with in order to protect information related to us.
The Manual is available to the public on our web page at www.bancochile.cl.
In addition, through RAN 21-20 associated with the Pillar 3 requirements of Basel III, the CMF establishes that local banks must have an internal policy pursuing to verify the Basel III information to be disclosed to the market is at least subject to the same degree of internal review and the same internal control process as financial information. As such, our board of directors and the senior management are responsible for establishing and maintaining an effective internal control environment for information to be disclosed while ensuring and certifying that the information has been reviewed in accordance with the guidelines defined by the CMF and prepared under the internal control processes approved by the board.
In this regard, our board of directors approved a corporate Financial Information Disclosure Policy that covers requirements of the RAN 21-20, best market practices and other reporting requirements related to financial information. This policy defines the general guidelines and criteria to be followed by us in the disclosure of financial information, as well as the mechanisms for verifying the consistency and integrity of such information, responsibilities of the main participants in such process to ensure the quality and integrity of the information disclosed to the market, to minimize risks of incompleteness, inaccuracy or inadequacy of the information.
Prevention of Money Laundering, the Financing of Terrorism and Non-Proliferation of Weapons of Mass Destruction
Law No. 19,913, enacted in 2003, created the Financial Analysis Unit and established specific regulations regarding money laundering. The CMF issues further regulations governing the requirements applicable to banks in relation to the prevention of money laundering, terrorism financing and non-proliferation of weapons of mass destruction. The regulations, as amended, are aimed at incorporating international AML and terrorism financing laws to the Chilean banking industry. Pursuant to these regulations, the CMF requires that banks implement an Anti-Money Laundering and Terrorism Financing system based mainly on the “know your customer” and source of wealth concepts. Moreover, these policies and procedures must be approved by the board of directors of each bank and must consider the volume and complexity of its operations and other related parties.
On January 30, 2026, through Circular No. 2368, the CMF introduced modifications to the former rules associated with prevention of money laundering, the financing of terrorism and non-proliferation of weapons of mass destruction with the aim of aligning this framework to the guidelines and requirements established by the Financial Analysis Unit (UAF) through Circular No. 62 in effect since June 2025. As a result, the CMF introduced precisions and amendments to chapters 1-7, 1-13, 1-14, 1-16 of the RAN, which set the guidelines for banks on these matters, in order to align definitions and concepts.
Based on these requirements, a Customer Identification Program (as part of the Anti-Money Laundering and Terrorism Financing system) is needed to enable a bank to establish the reasonable belief that it knows the true identity of its customers. In general, the program includes controls and procedures to:
| ● | properly identifying customers, by means of an in-depth due diligence and know-your-customer process, as defined by the UAF, including their background (in particular their Ultimate Beneficial Owner statement), source and amount of funds, country of origin and other risk factors; |
| ● | identifying and monitoring what the CMF has defined as politically exposed persons (“PEPs”) both within Chile and abroad; and |
| ● | ensuring a safe and suitable account opening process, with different documentation requirements needed for different types of accounts and products. |
The anti-laundering, terrorism financing and non-proliferation of weapons of mass destruction system required by local regulations must also include the following components:
| ● | policies and procedures aimed at preventing a bank from being used as an intermediary to carry out money laundering operations; |
| ● | appointment of a compliance officer on a senior management level who is responsible for coordinating and monitoring day-to-day AML compliance, while being entitled to have access to all operations and transactions carried out by the bank; |
| ● | establishment of a committee for the purposes of planning and coordinating compliance with AML policies and procedures; |
| ● | establishment of an adequate, detailed and structured process that allows the bank to analyze and detect unusual operations, including deposits in cash in banking accounts, while maintaining a record keeping of actions implemented, sources of information used for such purposes and unusual operations reported to the UAF or discarded; |
| ● | use of software tools to detect, monitor and report unusual operations related to transactions made by customers on different products; |
| ● | implementation of personnel selection policies and a training program, in order to prevent money laundering; |
| ● | establishment of a Code of Conduct in order to, among other things, guide employee behavior and prevent possible conflicts of interest; and |
| ● | independent testing by the compliance department, which must be reviewed by a bank’s internal audit department. |
Among other regulations of the CMF related to PEPs, it requires banks to keep specific PEPs policy and procedures in place to grant certain loans to PEPs, as well as to carry out controls procedures associated with service providers when PEPs are involved therewith. As such, our board of directors has approved related policies that have been duly implemented by our bank.
Prevention, Detection and Prosecution of Corruption
Law No. 21,121, which came into force on November 20, 2018, amends the Criminal Code for the Prevention, Detection and Prosecution of Corruption, and Law No. 20,393 on Criminal Liability of Legal Entities, addresses business-to-business bribery and discretion abuse, increasing prison time and pecuniary penalties and criminalizing corruption and unfair administration affecting private individuals and companies, among other matters. This law criminalizes the behavior of private businesses with the aim of regulating transparency between them, without need for a public official to participate in the crime, and with a very wide range of alternatives that could configure the crime. Particularly, in relation to the crime of unfair administration, this law incorporates a penalty for anyone who, being responsible for the management of third-party assets, commits abusive acts or omissions that damage the owner of those assets.
Economic Crimes Law
On August 17, 2023, law No. 21,595, also known as “Economic Crimes Law,” was enacted. The main intention of this law is to improve the criminal regulations related to “white collar crimes” and the penalties that are applicable to them. This law also created new environmental crimes, and systematized exiting crimes while regulating penalties and legal actions applicable to the persons responsible for these crimes, among other changes.
The main aspects addressed by this law are: (i) the creation of four categories of economic crimes, including already existing criminal offences and new types of crimes, (ii) the application of custodial or restrictive penalties fines, disqualifications and prohibitions, in accordance with the provisions set in the law, (iii) the establishment of a special regime of mitigating and aggravating circumstances for the determination of penalties, (iv) the possibility of substituting sentences, by remission and partial reclusion either at home or at special institutions, excluding parole, (v) the confiscation of profits regardless of conviction (in certain cases), (vi) the determination that profits obtained include benefits and earnings, regardless of their nature, and (vii) the introduction of a series of amendments to the Criminal Code, the Code of Criminal Procedure, Chilean Corporation law and other legal bodies that establish economic crimes, with the aim of improving and complementing those regulations in relation to several aspects of economic crimes.
The categories of economic crimes included in this law may be summarized, as follows:
| ● | First category: are those related to banking and stock market activities, which will be considered economic crimes in all circumstances, |
| ● | Second category: are those considered to be “economic crimes” when committed by individuals in the exercise of their function or position within a company or when they are committed for the benefit of the company, |
| ● | Third category: are those considered to be “economic crimes” when committed by a civil servant, to the extent someone, in the exercise of its function or position in a company, was involved in the offence or for the benefit of the company, and |
| ● | Fourth category: are those considered to be “economic crimes” when associated with money laundering and receiving stolen goods. |
In addition to the creation of the “economic crimes,” this law amended the regime of criminal liability of legal entities (Law No. 20,393) mainly by: (i) extending the catalog of crimes attributable to legal entities (around 200 types); and (ii) creating new classes of criminally responsible legal entities (universities, political parties, among others).
Furthermore, on September 1, 2024, certain provisions of Law No. 21,595 regarding criminal liability for entities became effective, which widened the list of potential crimes that may subject legal entities to criminal liability. Among the main topics addressed by these provisions are: (i) an extension of the kind of entity who may be found criminally liable, including private companies, public companies created by law, state-owned companies, political parties, among others, (ii) an increased list of crimes attributable to entities, including economic crimes that can be committed without intent, but with negligence, such as certain environmental crimes, injuries, homicide, and offences committed within the scope of a company’s activities, among others, (iii) modified sanctions, including fines that are calculated on the basis of the average revenue of the sanctioned entity, (iv) criminal liability of natural persons that act on behalf of a legal person when the offence is committed by the natural person, regardless of his/her position in the legal person, or by a person providing services to the legal person, and (v) the need for companies to implement a high-standard crime prevention model as a defense to exempt the legal person from criminal liability, among other things.
Personal Data Protection Law
On December 13, 2024, Law No. 21,719 regulating the protection and processing of personal data was published. This law aims to improve the rules on processing personal data of individuals, requiring consent of the owner of such data or in cases authorized by law, seeking to ensure standards of quality, information, transparency, and security. Likewise, under this law, the Personal Data Protection Agency was created, which aims to ensure the protection of personal data.
The law defines a series of data protection violations, ranging from minor to very serious depending on the intention behind the acts of the responsible for protecting the information or the consent requested to the data owner. For companies in charge of managing personal data from their customers or counterparties as part of their normal course of business, starting on December 2026, the sanctions for non-compliance with the law may include: (i) a written warning or fine of up to UTM 5,000 (Ch$347.7 million as of December 31, 2025) for minor infractions; (ii) fines of up to UTM 10,000 (Ch$695.4 million as of December 31, 2025) for serious violations, (iii) fines of up to UTM 20,000 (Ch$1,390.8 million as of December 31, 2025) for very serious violations. In the case of backsliding, large companies could be fined with an equivalent amount for very serious violations or up to an amount equivalent to 2% or 4% of the revenues for serious and very serious violations, respectively.
To comply with the provisions included in this law, during 2024, we created the Data Protection Area, which belongs to our Global Compliance Division and is responsible for implementing and enhancing procedures and data protection rights for our customers, staff, and providers. The manager of this area became our Data Protection Officer, who oversees our compliance with this law and the internal regulatory bodies on related matters, while being responsible for ensuring adequate training of our staff and addressing customers’ inquiries. During 2025, we were not fined due to events related to data protection and customer privacy.
Consumer-Oriented Regulation
During the last decade, a wide array of legislation has been enacted with the purpose of enhancing consumer rights.
Law No. 21,081 enacted in 2019 strengthened consumer protection, granting new powers to the National Consumer Service (Servicio Nacional del Consumidor, “SERNAC”) in matters of oversight. Likewise, fines were increased and the authority of SERNAC was reinforced in the scope of collective actions and collective voluntary procedures. Among other matters that affect banks as financial services providers are:
| ● | SERNAC inspectors shall be empowered to request the assistance of public force to be granted by local courts, in the event that the provider does not provide access to its facilities to SERNAC. |
| ● | SERNAC is granted authority to initiate collective voluntary procedures. |
| ● | Fines for adhesion contract infringement and misleading advertising are increased to up to 1,500 UTM (Unidades Tributarias Mensuales) which, as of December 31, 2025, would amount to approximately Ch$104.5 million (approximately U.S.$115,852). |
| ● | For the determination of fines, within the framework of collective actions, mitigating and aggravating circumstances and the number of affected consumers will be weighted. In case of full and effective compensation damages for all consumers, a lump sum will be applied as a fine, which may not exceed 30% of the sales of the product or service line made in the period of the infringement, or double the economic benefit obtained as a result of it. In any case, the fine may not exceed 45,000 UTA (Unidades Tributarias Anuales) for each event, which as of December 31, 2025 amounted to approximately Ch$37,552.7 million (approximately U.S.$41.7 million). |
| ● | In collective lawsuits, in addition to the material damage, moral damage may be also sought, and the judge may establish a common minimum amount. |
| ● | The court is empowered to increase the amount of the compensation granted by 25% in case of aggravating circumstances, established in the Consumer Protection Law. |
Law No. 20,009 establishes certain liabilities of payment service providers (such as banks) and their customers, was modified in 2020, setting high standards that banks must comply with in cases of fraudulent transactions carried out with payment cards (i.e., credit or debit cards), including electronic means. According to this law, debits to payment cards unrecognized by the customer, must be returned to the cardholder’s account. This legislation provides that, if such unrecognized debits amount up to UF 35 (equivalent to Ch$1.4 million as of December 31, 2025), the payment service provider must return these funds to the cardholder’s account within five business days. If unrecognized debits exceed UF 35, the payment service provider has seven more days to return the excess of UF 35. However, in this case, the payment service provider may retain such excess on the grounds of having sufficient evidence to establish that the cardholder acted with fraud or gross negligence, in which case the payment service provider will be required to prove this in court. Also, this law prohibits payment service providers from offering fraud insurance for such cards. It further establishes obligations for the payment service provider to take adequate measures to protect the payment services in case of unlawful acts, holding them liable for damages caused by security and protection deficiencies in their technological systems through which such services are provided. Accordingly, this law establishes that certain fraudulent transactions with payments cards and electronic payments (such as forgery of credit or debit cards, sale of forged or stolen cards and/or its data, impersonation of a card/accountholder, etc.) are constitutive of crimes subject to prison and fines up to threefold the fraudulent transaction. It also provides the Chilean public prosecutor with broad powers to investigate when such frauds are suspected to be related to organized crime. Some of the effects that this new regulation has caused since its publication are: (i) banks’ liabilities towards clients in cases of fraudulent transactions carried out with credit or debit cards, including those by electronic means, have increased; (ii) litigation and related costs have increased; (iii), thresholds and evidentiary standards were raised in litigation to determine the liability of the customer.
Law No. 21,314 from 2021, among other matters, sets rules on the application of interests and fees in relation to certain loan products. Some of the modifications introduced by this law include: (i) the prohibition of charging interests on the portion of credits that is already paid; (ii) the prohibition of charging simultaneously and jointly default interests with other kinds of interest over the same amount; and (iii) the determination that, during the 12 months following the publication of this law, the CMF must enact specific regulations addressing the extent to which fees or and/or commissions may be charged on credit transactions. On August 5, 2022, CMF issued General Standard No. 484, which set forth the requirements, rules and conditions regarding commissions charged on money credit operations. This rule came into effect on August 1, 2023, adapting the commissions charged by the Bank to these regulations as of that date.
In May 2024, Law No. 21,673 came into effect, resulting in –among others– the following amendments to Law No. 20,009: (i) a decrease in the timeframe for cardholders to unrecognized transactions and charges to their credit and debit cards from 120 to 60 days, (ii) changes to the complaint procedure, including the entitlement of the credit or debit card issuer to require the cardholder to provide a certified declaration indicating the claimed amount, the transaction date and the product and payment channel through which the fraud would have been carried out, while requiring the card user to submit a formal complaint before the public prosecutor, local courts or local police that should be shared with the card issuer, who is entitled to retain claimed funds until the submission of the complaint or deny the reimbursement of funds if the formal complaint is not submitted within 30 days, (iii) the introduction of new reimbursement thresholds from the former UF35 (Ch$1.4 million as of December 31, 2025) to differentiated thresholds ranging from UF15 to UF35 (Ch$0.6 million to Ch$1.4 million as of December 31, 2025), (iv) an increase in the timeframe for fund reimbursement from five to 10 working days for card issuers, and (v) the possibility for card issuers to deny fund reimbursement if having enough evidence of willful misconduct or gross negligence by the card user.
For more information on this specific regulation and other bills currently being discussed in the Chilean Congress, and laws recently enacted, related to consumer protection, see “Item 3. Key Information—Risk Factors—Risks Relating to our Operations and the Chilean Banking Industry—Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations.”
Fintech Law
In January 2023, Law No. 21,521 (the “Fintech Law”) was enacted. The general purpose of this law is to establish a general framework to encourage the provision of financial services through technological means by an array of providers (including banks), promoting financial inclusion and innovation, competition in the financial markets, protection of the clients of financial products and services, adequate protection of the data processed, preservation of financial integrity and stability, and strengthening anti money-laundering legislation. The Fintech Law, together with the adoption of several amendments to relevant laws of Chilean financial institution regulation, sets out the general rules for financial technology providers of technological infrastructure services, payments and remittances services, enterprise financial management services, cryptocurrencies, lending services, open finance services, technological insurance services, crowdfunding platforms, digital banking services, wealth management services and personal financial management services, among others.
Also, Law No. 21,521 expressly recognizes that banks may provide the services of order routing, investment advice, intermediation and custody of financial instruments under the legal and regulatory framework governing banks and without the need to be registered in the Registry of Financial Service Providers created by this law.
The Fintech Law also creates the “Open Finance System” that allows the exchange of client information between different providers of financial services, such as banks, using remote and automated access interfaces that channels interconnection and direct communication among the participating institutions of the system, subject to the security standards and regulations provided by the Fintech Law and the rules the CMF must issue.
The CMF established a schedule for implementing the Fintech Law, including several roundtables with market agents and the issuance of diverse rules, such as:
| ● | Normas de Carácter General (Norms of General Application) No. 502 and No. 524, issued between January and December 2024, which regulate fintech services, including crowdfunding platforms, alternative trading systems, financial and lending advisors, order routers, and financial instruments intermediaries and custodians. Through these sets of rules, the CMF also regulates the registry, authorization, and obligation of financial services providers. |
| ● | Norma de Carácter General No. 514 issued in July 2024, which regulates the Open Finance System to oversee the exchange of information among the Open Finance System participants. |
Maximum Legal Interest Rates
Maximum interest rates are regulated by Law No. 20,715, enacted in 2013. This legislation affects all Chilean businesses that charge interests (including all banks, department stores and any other commerce or financial provider) on loans up to UF 200 (approximately Ch$7.9 million or U.S.$8,825 as of December 31, 2025), including installment loans, credit cards and credit lines related loans, as well as overdue loans. This regulation established among other things, a new methodology for calculating the maximum legal interest rate for loans –not indexed to inflation– longer than a 90-day term, which resulted in a reduction of the maximum legal interest rate applicable to such debtors.
In addition, in September 2023, the Chilean Supreme Court established that the maximum legal interest established in Article No. 6 of Law No. 18,010 (complemented by Law No. 20,715) applies to credit operations expressed in any currency, including those expressed and payable in foreign currency, except for the exclusions defined in Article No. 5 of the same law. Based on this, on November 30, 2023, the CMF determined that from the date of the next publication of the maximum legal interest rates, credit operations in foreign currency or expressed in foreign currency would be covered by the provisions set in the law, and any infringement would be subject to the consequences set out in Law No. 18,010 and other legal provisions. This change in the treatment for operations in foreign currency or expressed in foreign currency did not have a material effect on our results of operations or financial condition for the year ended December 31, 2025.
We cannot rule out that new limits to the maximum interest rates may be imposed to local banks or foreign banks operating in Chile in the future.
Furthermore, as of the date of this annual report, amendments to this legislation are under discussion in the Chilean Congress. For further information, see “Item 3. Key Information—Risk Factors—Risks Relating to our Operations and the Chilean Banking Industry—Restrictions imposed by banking regulations may constrain our operations and thereby adversely affect our financial condition and results.”
Credit Risk Provisioning
On July 6, 2018, the banking regulator published a set of amendments (Circular No. 3,638) to Chapter B-1 of the Compendio de Normas Contables introducing changes to provisioning rules for commercial loans evaluated on a group basis, under Chilean GAAP, with no impact on IFRS expected credit losses. These rules supplemented the changes introduced by the CMF in 2014 (Circular No. 3,573 mentioned above) by establishing a standardized methodology to compute minimum acceptable level of loan loss allowances for commercial loans evaluated on a group basis. This framework is composed of three methods depending on the type of loans, as follows: (i) leasing loan allowances are set by considering delinquency, the type of asset underlying the contract and the ratio of present value to book value, (ii) student loan allowances are based on the type of loan (government-backed or not), if the loan is callable or not and delinquency, and (iii) other commercial loan allowances are set based on delinquency, guarantees and the loan to guarantee ratio. In addition, these rules addressed other topics related to loan provisioning, including (i) a minimum risk index of 0.5% for other-than-past-due loans that a bank must hold on an individual basis and on a consolidated basis considering both operations in Chile and abroad, (ii) the establishment that allowances for leasing residential loans must be in consistency with residential mortgage loans managed by the same bank, and (iii) that non-performing residential mortgage loans will drag into the same condition other credits owed by the same debtor for provisioning purposes. These provisioning criteria became effective in July 2019 and had no material impact on our results of operations under Chilean GAAP and no impact at all under IFRS Accounting Standards.
On April 27, 2021, to further align Chapter B-1 of the Compendium of Accounting Standards for Banks to the Basel III framework, the CMF published for comment some modifications to Chapter B-1 by introducing a more precise treatment for certain sub-segments of the group-based evaluated portfolio. The final ruling, published on August 19, 2021, did not have a material impact on our financial results under Chilean GAAP and no impact at all under IFRS Accounting Standards.
On November 22, 2022 and October 12, 2023, the CMF published for comment a standardized methodology to compute loan loss provisions for consumer loans (including contingent loans) while allowing the use of guarantees in order to determine both the probability of default (“PD”) and the loss given default (“LGD”). Final rules on this matter were published by the CMF on March 8, 2024 through Circular No. 2,346. The new regulation introduced standardized matrices for the determination of the PD and LGD to be used to compute the minimum level of loan loss provisions for consumer loans under Chilean GAAP. The PD matrix is based on diverse factors including: (i) the debtor’s overdue loans in the specific bank, (ii) the debtor’s overdue loans in the whole banking industry, and (iii) the holding of a mortgage loan as a proxy of willingness of payment. In the case of LGD, a breakdown by lending product is introduced in order to recognize the differences in the recovery rate for installment loans, credit cards and credit lines, and leasing or car financing loans, also depending on whether the debtor has a residential mortgage loan in the financial system. The new standardized provisioning method became effective on January 1, 2025, and had an impact of approximately Ch$69,035 million on our operational results before income tax, under Chilean GAAP during 2025. To address this effect, under Chilean GAAP, the Bank resolved to release additional provisions when the new standardized method became effective. These rules did not and will not have any impact on our results of operations or financial condition under IFRS Accounting Standards.
Modifications to Tax Legislation
Over recent years, the tax system has been subject to diverse modifications and reforms. For instance, Law No. 20,780 of 2014 gradually increased the corporate tax rate between 2014 and 2018 while establishing two alternative tax regimes from 2017 onwards: (i) the Semi-Integrated Regime and (ii) the Attribution Regime. In 2016, Law No. 20,899, was enacted with the aim to simplify 2014 reform by limiting the possibility of choosing between the two alternative tax regimes. According to this amendment, publicly traded companies are only subject to the Semi-Integrated Regime. Consequently, the statutory corporate tax rate for Banco de Chile was set at 27.0% from 2018 onwards. This also affected the taxes levied on dividends received by investors that hold shares of common stock or ADS from 2017 onwards.
Under the Semi-Integrated Regime, holders of shares or ADS pay taxes on the dividends effectively received from the company (subject to withholding tax of 35% for foreign investors and a general regime tax for local investors).
Foreign investors from Double Taxation Avoidance Treaty (“DTAT”) countries are able to use 100% of the corporate tax paid by the company as a tax credit, which is the case of the DTAT between the United States of America and Chile, which became effective on December 19, 2023. However, local investors and holders from non-DTAT countries are permitted to use only 65% of the corporate tax paid by the company as a tax credit. In order to provide evidence of their tax residence, foreign holders of our ADSs or of our shares of common stock must submit a certificate of residence issued by their local tax authority to Banco de Chile. This certificate must be legalized or apostilled and be valid on the date of the distribution of dividends, otherwise the Tax credit will be 65%. As a result of the above, the effective tax rate paid by local (individual) investors or foreign holders from non-DTAT countries has increased to 44.45%. This is the effect of adding taxes paid by the company on earnings before distributing dividends and taxes paid by this type of investor when receiving those dividends, given the inability to use 100% of the corporate tax expense as tax credit. For more information, see “Item 10. Additional Information— Taxation—Chilean Tax Considerations.”
Following the social unrest which occurred in Chile in late 2019, Law No. 21,210 was enacted to modernize the local tax system with the aim of addressing social demands. This law became effective in February 2020 and focused on: (i) promoting entrepreneurship by providing SMEs with a special tax regime based on total integration and a statutory tax rate of 25%, as opposed to large companies and corporations, which continue to be subject to a semi-integrated system while bearing a statutory corporate tax rate of 27%, (ii) encouraging private investment by introducing instantaneous or accelerated depreciation for fixed-assets while reducing the time frame to receive reimbursements of VAT paid on fixed-assets, (iii) introducing reductions or exemptions of property taxes paid by elderly people and low income pensioners; (iv) increasing taxes paid by high-income individuals by adding a new tax bracket of 40% and raising taxes on properties exceeding U.S.$500,000 in assessed value, (v) incorporating a regional green tax of 1% levied on investment projects exceeding U.S.$10 million in capital expenditures that were subject to environmental approval, (vi) lowering tax benefits on capital gains obtained in stock markets, (vii) creating a Taxpayer Protection & Advisory Agency, which aims to be a counterpoint to the Chilean Internal Revenue Service on taxation matters, and (viii) introducing a digital approach, which considers both the compulsory use of electronic bill and invoices, aimed at reducing tax evasion while levying VAT on digital services. In addition, this law kept stock dividends (dividends paid by means of the distribution of fully paid-in shares) free of tax for the shareholders on the dividend distribution date, although capital gains associated with the sale of such shares received as stock dividends are subject to the general tax regime. Therefore, foreign investors are subject to Chilean Withholding Tax on capital gains arising from the sale of such shares, if any. Law No. 21,210 established shares received as stock dividends would have no acquisition cost for tax purposes and would not be eligible for sale under Article 107 of the Chilean Income Tax Law, resulting in the total amount of the sale price affected by the general tax regime.
In September 2020, Law No 21,256 was enacted. This law introduced additional tax measures as part of the emergency plan for economic reactivation following the COVID-19 pandemic. Among other matters, this law considered: (i) temporary reduction of the statutory corporate tax rate to 10% for SMEs for the business years 2020, 2021 and 2022, (ii) refund to SMEs the accumulated VAT from purchases and/or services acquired between January and May 2020, and (iii) a temporary further acceleration of depreciation for fixed assets acquired between June 1, 2020 and December 31, 2022, for all types of companies.
In February 2022, Law No. 21,420 was enacted with the purpose of increasing tax collection by an amount equivalent to 0.7% of GDP in order to finance the universal guaranteed pension for individuals belonging to the bottom 80% of the population by income. The main tax measures included in this law are: (i) the taxation of any type of service with VAT, unless expressly exempted, for services provided from January 1, 2023, (ii) the establishment of the same treatment for financial and tax purposes for financial leasing agreements entered into on or after January 1, 2023, although it was reversed on February 2023 under Law No. 21,540 (so it never went into effect), (iii) a 10% tax on capital gains produced by the sale of actively traded stocks for sales performed on or after September 1, 2022, which will not apply to local or foreign institutional investors (including us), (iv) an inheritance tax on profits from life insurance contracts agreed on or after February 4, 2022, (v) an increase in the wealth tax on real estate from 0.275% to 0.425% starting January 1, 2023, (vi) the elimination of the special VAT credit for construction companies targeting middle income homes starting January 1, 2025, (vii) the establishment of a 2.0% annual tax on luxury goods such as airplanes, helicopters, yachts and luxury vehicles, (viii) the reduction of tax benefits on middle income housing, namely, DFL No. 2 of 1959, by limiting the tax exemption on rental income to individuals only and for a maximum of two homes, regardless of the purchase date, starting January 1, 2023, (ix) the elimination of the tax credit on the purchase of fixed assets for large companies and (x) the increase of mining patents’ value.
In December 2023, Law No. 21,641 was enacted. This law aims to strengthen the resilience of the financial system and its infrastructure. Among other matters, this law: (i) requires the Chilean Tax Authority to implement a simplified procedure for certain non-residents to obtain a Chilean Tax ID (RUT) for the purposes of opening and operating a CLP current account in the market, (ii) includes the requirement of a tax information exchange agreement in place between Chile and the non-resident’s country of tax residency, and (iii) modifies the Tax Code to require local banks or correspondent banks to report to the Chilean tax authority the identification of non-residents that open CLP current accounts and contains requirements that these local banks provide information such as credits and debits in these accounts and the amount of these transactions. On April 3, 2025, the Chilean IRS issued regulations addressing the specific requirements for the implementation of the simplified procedure for certain non-residents to obtain a Chilean Tax ID (RUT).
On October 24, 2024, Law No. 21,713 was enacted. This law is primarily focused on tax compliance and improving tax enforcement under the prevailing tax system by considering seven main pillars: (i) the modernization of the tax management framework and the tax and customs courts, (ii) improved control of informality, (iii) the introduction of new rules that aim to prevent and uncover tax crimes, including the creation of an “anonymous whistleblower,” (iv) the reinforcement of the local IRS capabilities to avoid aggressive tax planning through the tax avoidance regulation, (v) the introduction of additional powers for the Taxpayer’s Ombudsman Agency, (vi) the regularization of tax obligations by making payment programs more flexible, and (vii) a strong focus on institutional strengthening and probity. For more information see “Item 3. Key Information—Risk Factors—Risks Relating to Our Operations and the Chilean Banking Industry—Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations,” and for additional information on the Chilean Tax framework, see “Item 10. Additional Information—Taxation—Chilean Tax Considerations.”
Law No. 21,755, published on July 11, 2025, aims to simplify regulations and promote economic activity. It introduced a temporary modification to the tax regime applicable to SMEs by reducing the statutory corporate tax rate from 25.0% to 12.5% (Article 14 letter (d) of the Chilean Tax Law) for fiscal years 2025, 2026, and 2027, rising to 15% in 2028, provided that certain conditions, such as the employers’ social security contribution rates, are met. Furthermore, this law amended the Chilean Tax Code by including prepaid card issuers, whether banking or non-banking institutions, within the scope of financial reporting obligations to the Chilean Internal Revenue Service (Article 85 bis of the Tax Code), requiring them to report balances and credit amounts equal to or exceeding UF 1,500 (approximately Ch$59.6 million as of December 31, 2025) related to prepaid card products. This law also creates tax incentives for private investment in research and development and adjusts the procedure and penalties for tax avoidance, establishing the enforceability and limitation period for fines.
Law No. 21,806, published on February 5, 2026, contains several tax-related provisions. Regarding real estate taxes (impuesto territorial), it postpones property reappraisals and extends the validity of current valuations. It also establishes an exceptional procedure for reducing real estate tax contributions for occupied real estate. Regarding VAT, it creates a new exemption for the sale of used tangible movable goods by nonprofit entities, provided that these goods come exclusively from donations received by the taxpayer.
The recently appointed administration has announced its intention to propose further modifications to the Chilean tax system in order to promote investment and economic growth. For more information see “Item 3. Key Information—Risk Factors—Risks Relating to Our Operations and the Chilean Banking Industry—Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations.”
Bankruptcy Law
Chilean Bankruptcy Law which aims to promote agreements and avoid liquidations became effective in September 2014. Article 57 thereto intends to protect debtors by providing a 30-day term beginning on the date of the appointment of observers, in which:
| (i) | the creditors of a debtor may not request its liquidation; |
| (ii) | no proceeding seeking the issuance of a warrant of attachment, execution or similar process may be initiated against a debtor; |
| (iii) | no proceeding seeking the restitution of leased assets may be initiated against a debtor; |
| (iv) | all proceedings referred to in (ii) and (iii) directly above will be suspended, as well as the term of the statute of limitations; |
| (v) | all the agreements entered into by a debtor will remain valid and effective and its payments terms and conditions will remain in force. Consequently, these agreements may not be early terminated without the consent of the debtor nor be enforced, even if the commencement of a reorganization proceeding under the Bankruptcy Law constitutes an event of default under such agreement. Thus, any guarantees granted to secure the obligations of the debtor may not be enforced; and |
| (vi) | if a debtor forms part of a public registry as a contractor or service provider, and it is in compliance with its obligations with the relevant principal, it cannot be excluded from such public registry and may not be prohibited from participating in any relevant bidding process. |
Labor-related laws
On April 26, 2023, Law No. 21,561 was enacted to define a clearer framework on working hours for specific types of workers. According to the law, the working hours per week will be reduced from 45 hours to 44, 42, and 40 hours one year, three years and five years after the enactment of the law, respectively. Before the enactment of this law, the effective working hours of Banco de Chile’s staff were 42.5 hours per week. During 2023, based on diverse pilot projects to assess the impact of reducing the weekly working hours to 40 hours per week, we decided to fully spread this new framework to the entire workforce, with no material effects on our labor costs or the quality of services delivered to our customers.
On May 30, 2023, Law No. 21,578 was enacted and went into effect immediately. Among other matters related to the labor framework, this law aims to both set and gradually increase the monthly statutory minimum wage for workers while also widening benefits for workers who receive family and maternity bonuses and subsidizing micro, small and medium enterprises to afford the increase in the statutory minimum wage. According to the law, the monthly gross minimum wage (before social security contributions and taxes) is expected to be Ch$440,000 starting May 1, 2023, Ch$460,000 starting September 1, 2023, Ch$500,000 starting July 1, 2024, and Ch$510,636 starting January 1, 2025 (approximately U.S.$489, U.S.$511, U.S.$555 and U.S.$567 per month, respectively, as of December 31, 2025). The same law also considered an automatic adjustment, based on CPI variation between July and December 2024, starting in January 2025, from which the monthly statutory gross minimum wage reached Ch$510,000 (approximately U.S.$566 per month as of December 31, 2025). Also, in 2025, through Law No. 21,751, the minimum wage increased to Ch$529,000 (approximately U.S.$588 per month as of December 31, 2025) starting on May 1, 2025, and to Ch$539,000 (approximately U.S.$599 per month as of December 31, 2025) starting on January 1, 2026. As of the date of this annual report, none of our employees are subject to the monthly statutory minimum wage.
On December 29, 2023, Law No. 21,645 was enacted and went into effect on January 29, 2024. This law establishes the right to work remotely for all workers who care for children younger than fourteen years old, disabled people or dependent people regardless of age. This law does not apply to workers who have the power to represent the employer, such as managers, assistant managers, among others. Also, this law establishes the right to preferential use of legal holidays during school holidays as established by the Ministry of Education for workers who care for children younger than fourteen years old and either disabled or dependent teenagers younger than eighteen years old, over workers without such obligations. In addition, the law seeks to promote equal treatment between women and men while introducing new labor rights aimed at reconciling family life.
On January 5, 2024, Law No. 21,643 was enacted. This law, which went into effect on August 1, 2024, aims to reinforce the prevention, investigation and sanctions for workplace harassment, sexual harassment and violence at the workplace. In order to achieve these goals, the law establishes specific definitions for harassment in order to promote identification and prevention, while introducing specific responsibilities for employers in relation to preventing and treating harassment situations. Also, the law establishes specific complaint and investigation procedures while defining the corresponding sanctions. Thus, the main topics addressed by this law are related to: (i) the definition of workplace harassment as any abusive, hostile or intimidating behavior that affects worker's dignity, while sexual harassment is defined as any verbal, non-verbal or physical behavior of a sexual nature that affects the dignity of a person at work, (ii) the obligation for companies to implement clear and effective protocols to prevent workplace and sexual harassment, including the creation of accessible and confidential reporting channels, as well as training of all employees on these matters, (iii) the introduction of a clear procedure for the reporting and investigation of harassment cases, for which employers must ensure confidentiality and professional treatment for all complaints while taking immediate action to investigate and resolve reported cases, and (iv) the establishment of severe sanctions for employers who fail to comply with their obligations defined by the law, which may include fines, as well as civil and criminal liabilities.
Reporting of Operational and Cybersecurity Incidents and Cybersecurity Framework Law
According to Chapter 20-8 of the RAN, banks must report immediately to the CMF certain types of significant operational incidents to keep the regulator properly informed. For purposes of the regulation, an operational incident is deemed significant if the event affects the business continuity, information security or reputation of the bank.
During 2018, the regulator introduced modifications to the regulation associated with the management of operational risk by supplementing Chapters 1-13 and 20-8 of the RAN with specific guidelines on cybersecurity matters. Under this amendment, the CMF widens its scope of supervision by incorporating cybersecurity matters through the ongoing assessment of banks’ critical technological infrastructure that exposes banks to risks of data integrity, data availability and confidentiality of clients’ information. Also, a dedicated digital platform was created, through which banks should report directly to the regulator within a 30-minute time frame the occurrence of an incident and requires the appointment of the bank’s representative to oversee the communication with the CMF for these purposes. Similarly, banks are required to timely inform customers and users about cybersecurity incidents affecting quality and continuity of services, as well as incidents that are publicly known. In addition, under these guidelines, banks are compelled to maintain an alert system at an industry level to share information about incidents and measures that should be taken in order to mitigate widespread impact.
On April 8, 2024, Law No. 21,663 (Cybersecurity Framework Law) was published in the Chilean Official Gazette. This law establishes a general cybersecurity regulatory environment and creates the National Cybersecurity Agency (Agencia Nacional de Ciberseguridad) as well as a national incident response team (the CSIRT). The Cybersecurity Framework Law also establishes the minimum standards for prevention, resolution and response to cybersecurity incidents. In addition, penalties for non-compliance may range from 5,000 to 40,000 UTM (approximately Ch$347.7 million to Ch$2,781.7 million as of December 31, 2025). The regulation standards will be applicable mainly to public and private institutions that provide essential services, including banking, financial services and payment methods, including us.
Institutions are required to implement ongoing measures to prevent, report and resolve cybersecurity incidents, in accordance with the law and regulations. If a security incident occurs, for example, the institution has to: (a) report it to the authority within three hours of becoming aware of it; (b) supplement the aforementioned report with further information on the incident within the next 72 hours; and (c) submit a final report on the matter.
The National Cybersecurity Agency, which activities officially began on January 2, 2025, has the following key functions: (i) establish regulation, standards and protocols to implement the Cybersecurity Framework Law, (ii) oversee and regulate public and private institutions that provide essential cybersecurity services, (iii) advise and provide support to the President of the Republic in the development of cybersecurity-related policies, plans, and programs, (iv) coordinate and supervise the response to cybersecurity incidents through the CSIRT and other organizations, (v) certify and verify compliance with cybersecurity standards in state agencies, and (vi) promote cybersecurity research and development, as well as strengthening local industry, among others.
Volcker Rule
The Volcker Rule became effective during 2015 in the United States as part of the Dodd–Frank Wall Street Reform and Consumer Protection Act. Among other topics, the Volcker Rule limits proprietary trading and positions taken by banks in covered funds by establishing specific conditions for carrying out these activities. Also, this regulation establishes specific corporate governance measures for conducting these businesses to avoid conflict of interest and high-risk trading strategies by banks.
Section No. 619 of the Volcker Rule is applicable to Citigroup. Since we and our subsidiaries are considered to be Citigroup’s subsidiaries for purposes of this rule, during 2015 we comprehensively revised our internal policies and procedures to establish, maintain, enforce, test and modify our Volcker Rule Compliance Program to enable Citigroup to comply with its regulatory requirements. The new requirements and amendments introduced to the Volcker Rule during 2019, to the extent applicable, have been implemented into our Volcker Rule Compliance Program within the required time periods.
ORGANIZATIONAL STRUCTURE
The following diagram presents our current corporate structure, including our subsidiaries and their respective direct ownership interests, as of April 24, 2026:
All of the subsidiaries presented above have their jurisdiction of incorporation in the Republic of Chile. See “—Business Overview—Principal Business Activities—Subsidiaries” for more information on our subsidiaries.
On July 29, 2024, Banco de Chile incorporated Banchile Pagos, an entity owned by Banco de Chile and Banchile Asesoría Financiera, with 99.9% and 0.1% participation interest, respectively, to provide acquiring and processing services for credit and debit cards. The incorporation of Banchile Pagos was approved by the CMF on July 5, 2024.
On April 10, 2025, our board of directors resolved, subject to prior authorization from the CMF, to absorb our collection services subsidiary, Socofin, through the acquisition of its shares held by Banchile Asesoría Financiera S.A. Consequently, on July 4, 2025, Socofin was dissolved and the Bank assumed the status of its legal successor and continuer thereof.
PROPERTY, PLANT AND EQUIPMENT
We are based in Chile and own the building located at Paseo Ahumada 251, Santiago, Chile, which has 77,517 square meters and serves as the headquarters for the Bank and its subsidiaries. In addition, we own both offices and parking space in four other buildings located at Huérfanos 740, Agustinas 733, Andrés Bello 2687 and El Bosque 500, Santiago, Chile where the rest of our executive offices are located. The total area we own in such buildings is equivalent to 46,335 square meters.
As of December 31, 2025, we owned the properties on which 133 of our full-service branches and other points of sale are located (103,090 square meters of office space). Also, as of December 31, 2025, we had leased office space for 84 of our full-service branches with office space of approximately 35,055 square meters.
We also own properties throughout Chile for back office and administrative operations, as well as for storage of documents and other purposes. We believe that our facilities are adequate for our present needs and suitable for their intended purposes.
As of December 31, 2025, we also owned approximately 133,425 square meters in mainly recreational physical facilities in Chile, which we use to assist our employees in maintaining a healthy work and life balance and which we use for incentive and integration activities.
For more information on our infrastructure expenditures budget for 2026, see “Item 4. Information on the Company—History and Development of the Bank—Capital Expenditures.”
SELECTED STATISTICAL INFORMATION
The following information is included for analytical purposes and should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2025 included elsewhere in this annual report and “Item 5. Operating and Financial Review and Prospects.”
Average Balance Sheets, Interest Earned on Interest Earning Assets and Interest Paid on Interest Bearing Liabilities
The average balances for interest-earning assets and interest-bearing liabilities, including interest and readjustments received and paid, were calculated on the basis of our daily balances and on the basis of monthly balances for our subsidiaries. These average balances are presented in Chilean pesos (Ch$), in UF and in foreign currencies (principally the U.S. dollar). The UF is an inflation-indexed Chilean monetary unit of account with a value in Chilean pesos which is linked to, and which is adjusted daily to reflect changes in, the CPI of the Chilean National Institute of Statistics.
The nominal interest rate has been calculated by dividing the amount of interest and inflation adjustment gain or loss during the period by the related average balance, both amounts expressed in Chilean pesos.
Foreign exchange gains or losses on foreign currency-denominated assets and liabilities have not been included in interest revenue or expense. Interest received on past-due loans includes interest on such loans from the original maturity date.
Included in cash and due from banks are current accounts maintained in the Central Bank and overseas banks. Such assets have a distorting effect on the average interest rate earned on total interest earning assets because of balances maintained in:
| ● | the Central Bank, only the portion that is legally required to be held for liquidity purposes earns interest; and |
| ● | overseas banks earn interest on certain accounts in certain countries. |
Consequently, the average interest earned on such assets is comparatively low. These deposits are maintained by us in these accounts to comply with statutory requirements and to facilitate international business, rather than to earn income.
The following tables set forth, by currency of denomination, average balances and, where applicable, interest amounts and nominal rate for our assets and liabilities under IFRS Accounting Standards for the years ended December 31, 2023, 2024 and 2025:
| For the Year Ended December 31, | ||||||||||||||||||||||||||||||||||||
| 2023 | 2024 | 2025 | ||||||||||||||||||||||||||||||||||
| IFRS: | Average Balance |
Interest Earned(1) |
Average Nominal Rate(2) |
Average Balance |
Interest Earned(1) |
Average Nominal Rate(2) |
Average Balance |
Interest Earned(1) |
Average Nominal Rate(2) |
|||||||||||||||||||||||||||
| (In millions of Ch$, except percentages) | ||||||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||
| Interest earning assets | ||||||||||||||||||||||||||||||||||||
| Cash and Deposits in Banks | ||||||||||||||||||||||||||||||||||||
| Ch$ | Ch$ | ― | Ch$ | ― | ― | % | Ch$ | ― | Ch$ | ― | ― | % | Ch$ | ― | Ch$ | ― | ― | % | ||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 1,197,620 | 45,854 | 3.83 | 1,270,170 | 54,778 | 4.31 | 843,391 | 29,478 | 3.50 | |||||||||||||||||||||||||||
| Total | 1,197,620 | 45,854 | 3.83 | 1,270,170 | 54,778 | 4.31 | 843,391 | 29,478 | 3.50 | |||||||||||||||||||||||||||
| Financial Investments | ||||||||||||||||||||||||||||||||||||
| Ch$ | 6,962,635 | 616,555 | 8.86 | 4,916,092 | 299,499 | 6.09 | 5,113,633 | 229,289 | 4.48 | |||||||||||||||||||||||||||
| UF | 1,430,752 | 92,736 | 6.48 | 1,393,413 | 80,229 | 5.76 | 1,230,298 | 64,951 | 5.28 | |||||||||||||||||||||||||||
| Foreign currency | 173,297 | 8,595 | 4.96 | 149,532 | 7,994 | 5.35 | 116,246 | 5,475 | 4.71 | |||||||||||||||||||||||||||
| Total | 8,566,684 | 717,886 | 8.38 | 6,459,037 | 387,722 | 6.00 | 6,460,177 | 299,715 | 4.64 | |||||||||||||||||||||||||||
| Loans to Banks | ||||||||||||||||||||||||||||||||||||
| Ch$ | 1,470,722 | 158,139 | 10.75 | 879,528 | 57,783 | 6.57 | 515,652 | 25,468 | 4.94 | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 295,615 | 11,455 | 3.87 | 380,771 | 15,924 | 4.18 | 321,001 | 12,704 | 3.96 | |||||||||||||||||||||||||||
| Total | 1,766,337 | 169,594 | 9.60 | 1,260,299 | 73,707 | 5.85 | 836,653 | 38,172 | 4.56 | |||||||||||||||||||||||||||
| Commercial loans | ||||||||||||||||||||||||||||||||||||
| Ch$ | 9,732,662 | 845,148 | 8.68 | 9,124,580 | 675,540 | 7.40 | 9,178,087 | 642,198 | 7.00 | |||||||||||||||||||||||||||
| UF | 6,938,361 | 605,777 | 8.73 | 7,572,541 | 623,870 | 8.24 | 7,799,438 | 546,485 | 7.01 | |||||||||||||||||||||||||||
| Foreign currency | 3,354,785 | 235,076 | 7.01 | 3,441,743 | 252,104 | 7.32 | 3,180,687 | 202,604 | 6.37 | |||||||||||||||||||||||||||
| Total | 20,025,808 | 1,686,001 | 8.42 | 20,138,864 | 1,551,514 | 7.70 | 20,158,212 | 1,391,287 | 6.90 | |||||||||||||||||||||||||||
| Consumer Loans | ||||||||||||||||||||||||||||||||||||
| Ch$ | 4,993,797 | 791,551 | 15.85 | 5,217,477 | 827,532 | 15.86 | 5,408,733 | 836,147 | 15.46 | |||||||||||||||||||||||||||
| UF | 42,516 | 3,798 | 8.93 | 32,618 | 2,819 | 8.64 | 28,635 | 2,256 | 7.88 | |||||||||||||||||||||||||||
| Foreign currency | 57,779 | ― | ― | 64,127 | ― | ― | 62,895 | ― | ― | |||||||||||||||||||||||||||
| Total | 5,094,092 | 795,349 | 15.61 | 5,314,222 | 830,351 | 15.63 | 5,500,263 | 838,403 | 15.24 | |||||||||||||||||||||||||||
| Residential mortgage loans | ||||||||||||||||||||||||||||||||||||
| Ch$ | 48,999 | 1,028 | 2.10 | 58,871 | 1,265 | 2.15 | 66,586 | 1,608 | 2.41 | |||||||||||||||||||||||||||
| UF | 11,764,566 | 916,231 | 7.79 | 12,635,579 | 962,200 | 7.62 | 13,577,061 | 911,824 | 6.72 | |||||||||||||||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Total | 11,813,565 | 917,259 | 7.76 | 12,694,450 | 963,465 | 7.59 | 13,643,647 | 913,432 | 6.69 | |||||||||||||||||||||||||||
| Rights by resale agreements | ||||||||||||||||||||||||||||||||||||
| Ch$ | 48,648 | 5,984 | 12.30 | 69,235 | 4,601 | 6.65 | 88,955 | 5,295 | 5.95 | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Total | 48,648 | 5,984 | 12.30 | 69,235 | 4,601 | 6.65 | 88,955 | 5,295 | 5.95 | |||||||||||||||||||||||||||
| Other assets | ||||||||||||||||||||||||||||||||||||
| Ch$ | 76,762 | 3,114 | 4.06 | 90,155 | 3,731 | 4.14 | 89,385 | 2,854 | 3.19 | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 322,018 | 16,012 | 4.97 | 329,213 | 16,505 | 5.01 | 388,179 | 15,939 | 4.11 | |||||||||||||||||||||||||||
| Total | 398,780 | 19,126 | 4.80 | 419,368 | 20,236 | 4.83 | 477,564 | 18,793 | 3.94 | |||||||||||||||||||||||||||
| Total interest earning assets | ||||||||||||||||||||||||||||||||||||
| Ch$ | 23,334,225 | 2,421,519 | 10.38 | 20,355,938 | 1,869,951 | 9.19 | 20,461,031 | 1,742,859 | 8.52 | |||||||||||||||||||||||||||
| UF | 20,176,195 | 1,618,542 | 8.02 | 21,634,151 | 1,669,118 | 7.72 | 22,635,432 | 1,525,516 | 6.74 | |||||||||||||||||||||||||||
| Foreign currency | 5,401,114 | 316,992 | 5.87 | 5,635,556 | 347,305 | 6.16 | 4,912,399 | 266,200 | 5.42 | |||||||||||||||||||||||||||
| Total | Ch$ | 48,911,534 | Ch$ | 4,357,053 | 8.91 | % | Ch$ | 47,625,645 | Ch$ | 3,886,374 | 8.16 | % | Ch$ | 48,008,862 | Ch$ | 3,534,575 | 7.36 | % | ||||||||||||||||||
| (1) | Interest earned includes interest accrued on trading securities. |
| (2) | Average nominal interest rate includes the effect of inflation indexation on UF-denominated assets. |
| For the Year Ended December 31, | ||||||||||||||||||||||||||||||||||||
| 2023 | 2024 | 2025 | ||||||||||||||||||||||||||||||||||
| IFRS: | Average Balance |
Interest Earned(1) |
Average Nominal Rate(2) |
Average Balance |
Interest Earned(1) |
Average Nominal Rate(2) |
Average Balance |
Interest Earned(1) |
Average Nominal Rate(2) |
|||||||||||||||||||||||||||
| (In millions of Ch$, except percentages) | ||||||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||
| Non-interest earning assets | ||||||||||||||||||||||||||||||||||||
| Cash and Deposits in banks | ||||||||||||||||||||||||||||||||||||
| Ch$ | Ch$ | 1,450,325 | Ch$ | ― | ― | % | Ch$ | 1,458,368 | Ch$ | ― | ― | % | Ch$ | 1,541,146 | Ch$ | ― | ― | % | ||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 345,476 | ― | ― | 389,879 | ― | ― | 308,069 | ― | ― | |||||||||||||||||||||||||||
| Total | 1,795,801 | ― | ― | 1,848,247 | ― | ― | 1,849,069 | ― | ― | |||||||||||||||||||||||||||
| Transactions in the course of collection | ||||||||||||||||||||||||||||||||||||
| Ch$ | 244,853 | ― | ― | 182,031 | ― | ― | 246,236 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 296,058 | ― | ― | 232,138 | ― | ― | 293,618 | ― | ― | |||||||||||||||||||||||||||
| Total | 540,911 | ― | ― | 414,169 | ― | ― | 539,854 | ― | ― | |||||||||||||||||||||||||||
| Allowances for loan losses | ||||||||||||||||||||||||||||||||||||
| Ch$ | (702,567 | ) | ― | ― | (678,981 | ) | ― | ― | (685,006 | ) | ― | ― | ||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Total | (702,567 | ) | ― | ― | (678,981 | ) | ― | ― | (685,006 | ) | ― | ― | ||||||||||||||||||||||||
| Derivative financial instruments | ||||||||||||||||||||||||||||||||||||
| Ch$ | 2,139,099 | ― | ― | 1,927,528 | ― | ― | 1,702,754 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 447,293 | ― | ― | 411,260 | ― | ― | 285,899 | ― | ― | |||||||||||||||||||||||||||
| Total | 2,586,392 | ― | ― | 2,338,788 | ― | ― | 1,988,653 | ― | ― | |||||||||||||||||||||||||||
| Investments in Other Companies | ||||||||||||||||||||||||||||||||||||
| Ch$ | 53,354 | ― | ― | 64,624 | ― | ― | 67,183 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 24 | ― | ― | 80 | ― | ― | 108 | ― | ― | |||||||||||||||||||||||||||
| Total | 53,378 | ― | ― | 64,704 | ― | ― | 67,291 | ― | ― | |||||||||||||||||||||||||||
| Intangible assets | ||||||||||||||||||||||||||||||||||||
| Ch$ | 153,040 | ― | ― | 182,973 | ― | ― | 199,987 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Total | 153,040 | ― | ― | 182,973 | ― | ― | 199,987 | ― | ― | |||||||||||||||||||||||||||
| Property and equipment | ||||||||||||||||||||||||||||||||||||
| Ch$ | 207,600 | ― | ― | 195,741 | ― | ― | 183,816 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Total | 207,600 | ― | ― | 195,741 | ― | ― | 183,816 | ― | ― | |||||||||||||||||||||||||||
| Right-of-use assets | ||||||||||||||||||||||||||||||||||||
| Ch$ | 95,684 | ― | ― | 101,717 | ― | ― | 89,137 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Total | 95,684 | ― | ― | 101,717 | ― | ― | 89,137 | ― | ― | |||||||||||||||||||||||||||
| Current tax assets | ||||||||||||||||||||||||||||||||||||
| Ch$ | 158,434 | ― | ― | 183,119 | ― | ― | 74,838 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Total | 158,434 | ― | ― | 183,119 | ― | ― | 74,838 | ― | ― | |||||||||||||||||||||||||||
| Deferred tax assets | ||||||||||||||||||||||||||||||||||||
| Ch$ | 310,533 | ― | ― | 293,734 | ― | ― | 324,478 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Total | 310,533 | ― | ― | 293,734 | ― | ― | 324,478 | ― | ― | |||||||||||||||||||||||||||
| Other assets | ||||||||||||||||||||||||||||||||||||
| Ch$ | 660,466 | ― | ― | 906,312 | ― | ― | 1,091,792 | ― | ― | |||||||||||||||||||||||||||
| UF | 26,882 | ― | ― | 33,009 | ― | ― | 21,518 | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 51,003 | ― | ― | 89,222 | ― | ― | 110,161 | ― | ― | |||||||||||||||||||||||||||
| Total | 738,351 | ― | ― | 1,028,543 | ― | ― | 1,223,471 | ― | ― | |||||||||||||||||||||||||||
| Total non-interest earning assets | ||||||||||||||||||||||||||||||||||||
| Ch$ | 4,770,821 | ― | ― | 4,817,166 | ― | ― | 4,836,361 | ― | ― | |||||||||||||||||||||||||||
| UF | 26,882 | ― | ― | 33,009 | ― | ― | 21,518 | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 1,139,854 | ― | ― | 1,122,579 | ― | ― | 997,855 | ― | ― | |||||||||||||||||||||||||||
| Total | 5,937,557 | ― | ― | 5,972,754 | ― | ― | 5,855,734 | ― | ― | |||||||||||||||||||||||||||
| Total Assets | ||||||||||||||||||||||||||||||||||||
| Ch$ | 28,105,046 | 2,421,519 | ― | 25,173,104 | 1,869,951 | ― | 25,297,392 | 1,742,859 | ― | |||||||||||||||||||||||||||
| UF | 20,203,077 | 1,618,542 | ― | 21,667,160 | 1,669,118 | ― | 22,656,950 | 1,525,516 | ― | |||||||||||||||||||||||||||
| Foreign currency | 6,540,968 | 316,992 | ― | 6,758,135 | 347,305 | ― | 5,910,254 | 266,200 | ― | |||||||||||||||||||||||||||
| Total | Ch$ | 54,849,091 | Ch$ | 4,357,053 | ― | % | Ch$ | 53,598,399 | Ch$ | 3,886,374 | ― | % | Ch$ | 53,864,596 | Ch$ | 3,534,575 | ― | % | ||||||||||||||||||
| (1) | Interest earned includes interest accrued on trading securities. |
| (2) | Average nominal interest rate includes the effect of inflation indexation on UF-denominated assets. |
| For the Year Ended December 31, | ||||||||||||||||||||||||||||||||||||
| 2023 | 2024 | 2025 | ||||||||||||||||||||||||||||||||||
| IFRS: | Average
Balance |
Interest Accrued(1) | Average Nominal Rate(2) |
Average Balance | Interest Accrued(1) | Average Nominal Rate(2) | Average Balance | Interest Accrued(1) | Average Nominal Rate(2) | |||||||||||||||||||||||||||
| (In millions of Ch$, except percentages) | ||||||||||||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||||||
| Interest bearing liabilities | ||||||||||||||||||||||||||||||||||||
| Savings accounts and time deposits | ||||||||||||||||||||||||||||||||||||
| Ch$ | Ch$ | 11,179,408 | Ch$ | 1,099,488 | 9.83 | % | Ch$ | 11,339,821 | Ch$ | 618,544 | 5.45 | % | Ch$ | 11,598,445 | Ch$ | 480,603 | 4.14 | % | ||||||||||||||||||
| UF | 2,133,234 | 189,210 | 8.87 | 1,954,662 | 149,141 | 7.63 | 1,724,017 | 90,756 | 5.26 | |||||||||||||||||||||||||||
| Foreign currency | 1,822,047 | 90,558 | 4.97 | 1,973,237 | 91,516 | 4.64 | 1,914,004 | 74,026 | 3.87 | |||||||||||||||||||||||||||
| Total | 15,134,689 | 1,379,256 | 9.11 | 15,267,720 | 859,201 | 5.63 | 15,236,466 | 645,385 | 4.24 | |||||||||||||||||||||||||||
| Obligations by repurchase agreements | ||||||||||||||||||||||||||||||||||||
| Ch$ | 137,431 | 15,092 | 10.98 | 175,239 | 9,057 | 5.17 | 175,746 | 7,892 | 4.49 | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 3,881 | 91 | 2.34 | 3,756 | 120 | 3.19 | 3,494 | 126 | 3.61 | |||||||||||||||||||||||||||
| Total | 141,312 | 15,183 | 10.74 | 178,995 | 9,177 | 5.13 | 179,240 | 8,018 | 4.47 | |||||||||||||||||||||||||||
| Borrowings from financial institutions | ||||||||||||||||||||||||||||||||||||
| Ch$ | 4,349,001 | 22,404 | 0.52 | 1,398,497 | 7,331 | 0.52 | ― | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 905,316 | 42,199 | 4.66 | 1,201,803 | 64,396 | 5.36 | 1,362,732 | 61,919 | 4.54 | |||||||||||||||||||||||||||
| Total | 5,254,317 | 64,603 | 1.23 | 2,600,300 | 71,727 | 2.76 | 1,362,732 | 61,919 | 4.54 | |||||||||||||||||||||||||||
| Debt financial instruments issued | ||||||||||||||||||||||||||||||||||||
| Ch$ | 89,603 | 7,097 | 7.92 | 96,722 | 7,658 | 7.92 | 99,116 | 7,839 | 7.91 | |||||||||||||||||||||||||||
| UF | 8,284,133 | 589,448 | 7.12 | 8,582,282 | 590,231 | 6.88 | 9,111,250 | 535,335 | 5.88 | |||||||||||||||||||||||||||
| Foreign currency | 1,884,675 | 55,252 | 2.93 | 2,045,014 | 64,154 | 3.14 | 2,000,538 | 66,905 | 3.34 | |||||||||||||||||||||||||||
| Total | 10,258,411 | 651,797 | 6.35 | 10,724,018 | 662,043 | 6.17 | 11,210,904 | 610,079 | 5.44 | |||||||||||||||||||||||||||
| Commercial Papers | ||||||||||||||||||||||||||||||||||||
| Ch$ | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 151,830 | 8,586 | 5.66 | 13,516 | 800 | 5.92 | 236,847 | 9,115 | 3.85 | |||||||||||||||||||||||||||
| Total | 151,830 | 8,586 | 5.66 | 13,516 | 800 | 5.92 | 236,847 | 9,115 | 3.85 | |||||||||||||||||||||||||||
| Lease Liabilities | ||||||||||||||||||||||||||||||||||||
| Ch$ | 89,887 | 1,980 | 2.20 | 94,931 | 2,381 | 2.51 | 84,041 | 2,112 | 2.51 | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Total | 89,887 | 1,980 | 2.20 | 94,931 | 2,381 | 2.51 | 84,041 | 2,112 | 2.51 | |||||||||||||||||||||||||||
| Other financial obligations | ||||||||||||||||||||||||||||||||||||
| Ch$ | 10,542 | 136 | 1.29 | 12,112 | 322 | 2.66 | 10,332 | 187 | 1.81 | |||||||||||||||||||||||||||
| UF | 36,384 | 1,877 | 5.16 | 37,759 | 2,040 | 5.40 | 36,457 | 2,173 | 5.96 | |||||||||||||||||||||||||||
| Foreign currency | 97,639 | 455 | 0.47 | 126,587 | 613 | 0.48 | 85,125 | 514 | 0.60 | |||||||||||||||||||||||||||
| Total | 144,565 | 2,468 | 1.71 | 176,458 | 2,975 | 1.69 | 131,914 | 2,874 | 2.18 | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||
| Ch$ | 15,855,872 | 1,146,197 | 7.23 | 13,117,322 | 645,293 | 4.92 | 11,967,680 | 498,633 | 4.17 | |||||||||||||||||||||||||||
| UF | 10,453,751 | 780,535 | 7.47 | 10,574,703 | 741,412 | 7.01 | 10,871,724 | 628,264 | 5.78 | |||||||||||||||||||||||||||
| Foreign currency | 4,865,388 | 197,141 | 4.05 | 5,363,913 | 221,599 | 4.13 | 5,602,740 | 212,605 | 3.79 | |||||||||||||||||||||||||||
| Total | Ch$ | 31,175,011 | Ch$ | 2,123,873 | 6.81 | % | Ch$ | 29,055,938 | Ch$ | 1,608,304 | 5.54 | % | Ch$ | 28,442,144 | Ch$ | 1,339,502 | 4.71 | % | ||||||||||||||||||
| (1) | Interest accrued includes interest accrued on trading securities. |
| (2) | Average nominal interest rate includes the effect of inflation indexation on UF-denominated liabilities. |
| For the Year Ended December 31, | ||||||||||||||||||||||||||||||||||||
| 2023 | 2024 | 2025 | ||||||||||||||||||||||||||||||||||
| IFRS: | Average Balance |
Interest Accrued(1) | Average
Nominal Rate(2) |
Average Balance | Interest Accrued(1) | Average
Nominal Rate(2) |
Average Balance |
Interest Accrued(1) |
Average
Nominal Rate(2) |
|||||||||||||||||||||||||||
| (In millions of Ch$, except percentages) | ||||||||||||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||||||
| Non-interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||
| Current accounts and other demand deposits | ||||||||||||||||||||||||||||||||||||
| Ch$ | Ch$ | 11,786,499 | Ch$ | ― | ― | % | Ch$ | 12,306,678 | Ch$ | ― | ― | % | Ch$ | 12,171,946 | Ch$ | ― | ― | % | ||||||||||||||||||
| UF | 625,619 | ― | ― | 687,954 | ― | ― | 410,275 | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 1,052,510 | ― | ― | 1,130,346 | ― | ― | 2,009,116 | ― | ― | |||||||||||||||||||||||||||
| Total | 13,464,628 | ― | ― | 14,124,978 | ― | ― | 14,591,337 | ― | ― | |||||||||||||||||||||||||||
| Transactions in the course of payment | ||||||||||||||||||||||||||||||||||||
| Ch$ | 321,691 | ― | ― | 263,939 | ― | ― | 404,700 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 274,839 | ― | ― | 211,892 | ― | ― | 239,630 | ― | ― | |||||||||||||||||||||||||||
| Total | 596,530 | ― | ― | 475,831 | ― | ― | 644,330 | ― | ― | |||||||||||||||||||||||||||
| Derivative financial instruments | ||||||||||||||||||||||||||||||||||||
| Ch$ | 2,555,557 | ― | ― | 2,191,957 | ― | ― | 2,048,933 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 376,252 | ― | ― | 343,423 | ― | ― | 243,071 | ― | ― | |||||||||||||||||||||||||||
| Total | 2,931,809 | ― | ― | 2,535,380 | ― | ― | 2,292,004 | ― | ― | |||||||||||||||||||||||||||
| Current tax liabilities | ||||||||||||||||||||||||||||||||||||
| Ch$ | 909 | ― | ― | 329 | ― | ― | 19,490 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Total | 909 | ― | ― | 329 | ― | ― | 19,490 | ― | ― | |||||||||||||||||||||||||||
| Deferred tax liabilities | ||||||||||||||||||||||||||||||||||||
| Ch$ | 19 | ― | ― | 664 | ― | ― | 1,479 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Total | 19 | ― | ― | 664 | ― | ― | 1,479 | ― | ― | |||||||||||||||||||||||||||
| Provisions | ||||||||||||||||||||||||||||||||||||
| Ch$ | 355,565 | ― | ― | 421,686 | ― | ― | 406,969 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 11,309 | ― | ― | 12,013 | ― | ― | 21,375 | ― | ― | |||||||||||||||||||||||||||
| Total | 366,874 | ― | ― | 433,699 | ― | ― | 428,344 | ― | ― | |||||||||||||||||||||||||||
| Other liabilities | ||||||||||||||||||||||||||||||||||||
| Ch$ | 343,015 | ― | ― | 422,036 | ― | ― | 693,634 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 92,558 | ― | ― | 120,150 | ― | ― | 130,288 | ― | ― | |||||||||||||||||||||||||||
| Total | 435,573 | ― | ― | 542,186 | ― | ― | 823,922 | ― | ― | |||||||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||||||||||||
| Ch$ | 5,877,738 | ― | ― | 6,429,394 | ― | ― | 6,621,546 | ― | ― | |||||||||||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Total | 5,877,738 | ― | ― | 6,429,394 | ― | ― | 6,621,546 | ― | ― | |||||||||||||||||||||||||||
| Total non-interest-bearing liabilities and equity | ||||||||||||||||||||||||||||||||||||
| Ch$ | 21,240,993 | ― | ― | 22,036,683 | ― | ― | 22,368,697 | ― | ― | |||||||||||||||||||||||||||
| UF | 625,619 | ― | ― | 687,954 | ― | ― | 410,275 | ― | ― | |||||||||||||||||||||||||||
| Foreign currency | 1,807,468 | ― | ― | 1,817,824 | ― | ― | 2,643,480 | ― | ― | |||||||||||||||||||||||||||
| Total | 23,674,080 | ― | ― | 24,542,461 | ― | ― | 25,422,452 | ― | ― | |||||||||||||||||||||||||||
| Total liabilities and equity | ||||||||||||||||||||||||||||||||||||
| Ch$ | 37,096,865 | 1,146,197 | ― | 35,154,005 | 645,293 | ― | 34,336,377 | 498,633 | ― | |||||||||||||||||||||||||||
| UF | 11,079,370 | 780,535 | ― | 11,262,657 | 741,412 | ― | 11,281,999 | 628,264 | ― | |||||||||||||||||||||||||||
| Foreign currency | 6,672,856 | 197,141 | ― | 7,181,737 | 221,599 | ― | 8,246,220 | 212,605 | ― | |||||||||||||||||||||||||||
| Total | Ch$ | 54,849,091 | Ch$ | 2,123,873 | ― | % | Ch$ | 53,598,399 | Ch$ | 1,608,304 | ― | % | Ch$ | 53,864,596 | Ch$ | 1,339,502 | ― | % | ||||||||||||||||||
| (1) | Interest accrued includes interest accrued on trading securities. |
| (2) | Average nominal interest rate includes the effect of inflation indexation on UF-denominated liabilities. |
Interest Earning Assets and Net Interest Margin
The following table sets forth, by currency of denomination, the levels of our average interest earning assets and net interest, and illustrates the comparative margins obtained, for the years ended December 31, 2023, 2024 and 2025:
| For the Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| IFRS: | (in millions of Ch$, except percentages) | |||||||||||
| Total average interest earning assets | ||||||||||||
| Ch$ | Ch$ | 23,334,225 | Ch$ | 20,355,938 | Ch$ | 20,461,031 | ||||||
| UF | 20,176,195 | 21,634,151 | 22,635,432 | |||||||||
| Foreign currency | 5,401,114 | 5,635,556 | 4,912,399 | |||||||||
| Total | 48,911,534 | 47,625,645 | 48,008,862 | |||||||||
| Net interest earned (including interest earned on trading securities)(1) | ||||||||||||
| Ch$ | 1,275,322 | 1,224,658 | 1,244,226 | |||||||||
| UF | 838,007 | 927,706 | 897,252 | |||||||||
| Foreign currency | 119,851 | 125,706 | 53,595 | |||||||||
| Total | Ch$ | 2,233,180 | Ch$ | 2,278,070 | Ch$ | 2,195,073 | ||||||
| Net interest margin, nominal basis(2)(3) | ||||||||||||
| Ch$ | 5.47 | % | 6.02 | % | 6.08 | % | ||||||
| UF | 4.15 | 4.29 | 3.96 | |||||||||
| Foreign currency | 2.22 | 2.23 | 1.09 | |||||||||
| Total | 4.57 | % | 4.78 | % | 4.57 | % | ||||||
| (1) | Net interest earned is defined as interest revenue earned less interest expense incurred. |
| (2) | Net interest margin, nominal basis is defined as net interest earned divided by average interest earning assets. |
| (3) | Net interest margin includes the effect of inflation indexation on UF-denominated assets and liabilities. |
Changes in Net Interest Income—Volume and Rate Analysis
The following tables compare, by currency of denomination, changes in our net interest income between 2023 and 2024, as well as 2024 and 2025, caused by (i) changes in the average volume of interest earning assets and interest-bearing liabilities and (ii) changes in their respective nominal interest rates. Volume and rate variances were calculated based on movements in average balances over the period and changes in nominal interest rate, average interest earning assets and average interest-bearing liabilities. The net change attributable to changes in both volume and rate has been allocated proportionately to the change in volume and the change in rate. Also, the rate effect on assets and liabilities includes the impact of inflation indexation on assets UF-denominated assets and liabilities.
| Increase (Decrease) from 2023 to 2024 due to changes in | Net Change from 2023 to 2024 | Increase (Decrease) from 2024 to 2025 due to changes in | Net Change from 2024 to 2025 | |||||||||||||||||||||
| IFRS: | Volume | Rate | Volume | Rate | ||||||||||||||||||||
| (in millions of Ch$) | ||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Interest earning assets | ||||||||||||||||||||||||
| Cash and Deposits in banks | ||||||||||||||||||||||||
| Ch$ | Ch$ | ― | Ch$ | ― | Ch$ | ― | Ch$ | ― | Ch$ | ― | Ch$ | ― | ||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ||||||||||||||||||
| Foreign currency | 2,892 | 6,032 | 8,924 | (16,175 | ) | (9,125 | ) | (25,300 | ) | |||||||||||||||
| Total | 2,892 | 6,032 | 8,924 | (16,175 | ) | (9,125 | ) | (25,300 | ) | |||||||||||||||
| Financial investments | ||||||||||||||||||||||||
| Ch$ | (153,796 | ) | (163,260 | ) | (317,056 | ) | 11,615 | (81,825 | ) | (70,210 | ) | |||||||||||||
| UF | (2,369 | ) | (10,138 | ) | (12,507 | ) | (8,935 | ) | (6,343 | ) | (15,278 | ) | ||||||||||||
| Foreign currency | (1,237 | ) | 636 | (601 | ) | (1,641 | ) | (878 | ) | (2,519 | ) | |||||||||||||
| Total | (157,402 | ) | (172,762 | ) | (330,164 | ) | 1,039 | (89,046 | ) | (88,007 | ) | |||||||||||||
| Loans to banks | ||||||||||||||||||||||||
| Ch$ | (51,001 | ) | (49,355 | ) | (100,356 | ) | (20,197 | ) | (12,118 | ) | (32,315 | ) | ||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ||||||||||||||||||
| Foreign currency | 3,505 | 964 | 4,469 | (2,400 | ) | (820 | ) | (3,220 | ) | |||||||||||||||
| Total | (47,496 | ) | (48,391 | ) | (95,887 | ) | (22,597 | ) | (12,938 | ) | (35,535 | ) | ||||||||||||
| Commercial loans | ||||||||||||||||||||||||
| Ch$ | (50,487 | ) | (119,121 | ) | (169,608 | ) | 3,940 | (37,282 | ) | (33,342 | ) | |||||||||||||
| UF | 53,438 | (35,345 | ) | 18,093 | 18,226 | (95,611 | ) | (77,385 | ) | |||||||||||||||
| Foreign currency | 6,194 | 10,834 | 17,028 | (18,205 | ) | (31,295 | ) | (49,500 | ) | |||||||||||||||
| Total | 9,145 | (143,632 | ) | (134,487 | ) | 3,961 | (164,188 | ) | (160,227 | ) | ||||||||||||||
| Consumer loans | ||||||||||||||||||||||||
| Ch$ | 35,477 | 504 | 35,981 | 29,880 | (21,265 | ) | 8,615 | |||||||||||||||||
| UF | (859 | ) | (120 | ) | (979 | ) | (327 | ) | (236 | ) | (563 | ) | ||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ||||||||||||||||||
| Total | 34,618 | 384 | 35,002 | 29,553 | (21,501 | ) | 8,052 | |||||||||||||||||
| Residential mortgage loans | ||||||||||||||||||||||||
| Ch$ | 212 | 25 | 237 | 176 | 167 | 343 | ||||||||||||||||||
| UF | 66,676 | (20,707 | ) | 45,969 | 68,419 | (118,795 | ) | (50,376 | ) | |||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ||||||||||||||||||
| Total | 66,888 | (20,682 | ) | 46,206 | 68,595 | (118,628 | ) | (50,033 | ) | |||||||||||||||
| Rights by resale agreements | ||||||||||||||||||||||||
| Ch$ | 1,974 | (3,357 | ) | (1,383 | ) | 1,210 | (516 | ) | 694 | |||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ||||||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ||||||||||||||||||
| Total | 1,974 | (3,357 | ) | (1,383 | ) | 1,210 | (516 | ) | 694 | |||||||||||||||
| Other Assets | ||||||||||||||||||||||||
| Ch$ | 553 | 64 | 617 | (32 | ) | (845 | ) | (877 | ) | |||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ||||||||||||||||||
| Foreign currency | 360 | 133 | 493 | 2,690 | (3,256 | ) | (566 | ) | ||||||||||||||||
| Total | 913 | 197 | 1,110 | 2,658 | (4,101 | ) | (1,443 | ) | ||||||||||||||||
| Total interest earning assets | ||||||||||||||||||||||||
| Ch$ | (217,068 | ) | (334,500 | ) | (551,568 | ) | 26,592 | (153,684 | ) | (127,092 | ) | |||||||||||||
| UF | 116,886 | (66,310 | ) | 50,576 | 77,383 | (220,985 | ) | (143,602 | ) | |||||||||||||||
| Foreign currency | 11,714 | 18,599 | 30,313 | (35,731 | ) | (45,374 | ) | (81,105 | ) | |||||||||||||||
| Total | Ch$ | (88,468 | ) | Ch$ | (382,211 | ) | Ch$ | (470,679 | ) | Ch$ | 68,244 | Ch$ | (420,043 | ) | Ch$ | (351,799 | ) | |||||||
| Increase (Decrease) from 2023 to 2024 due to changes in | Net Change from 2023 to 2024 | Increase (Decrease) from 2024 to 2025 due to changes in | Net Change from 2024 to 2025 | |||||||||||||||||||||
| IFRS: | Volume | Rate | Volume | Rate | ||||||||||||||||||||
| (in millions of Ch$) | ||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Interest bearing liabilities | ||||||||||||||||||||||||
| Savings accounts and time deposits | ||||||||||||||||||||||||
| Ch$ | Ch$ | 15,557 | Ch$ | (496,501 | ) | Ch$ | (480,944) | Ch$ | 13,813 | Ch$ | (151,754) | Ch$ | (137,941) | |||||||||||
| UF | (15,009 | ) | (25,060 | ) | (40,069 | ) | (16,094 | ) | (42,291 | ) | (58,385 | ) | ||||||||||||
| Foreign currency | 7,236 | (6,278 | ) | 958 | (2,677 | ) | (14,813 | ) | (17,490 | ) | ||||||||||||||
| Total | 7,784 | (527,839 | ) | (520,055 | ) | (4,958 | ) | (208,858 | ) | (213,816 | ) | |||||||||||||
| Obligations by repurchase agreements | ||||||||||||||||||||||||
| Ch$ | 3,400 | (9,435 | ) | (6,035 | ) | 26 | (1,191 | ) | (1,165 | ) | ||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ||||||||||||||||||
| Foreign currency | (3 | ) | 32 | 29 | (9 | ) | 15 | 6 | ||||||||||||||||
| Total | 3,397 | (9,403 | ) | (6,006 | ) | 17 | (1,176 | ) | (1,159 | ) | ||||||||||||||
| Borrowing from financial institutions | ||||||||||||||||||||||||
| Ch$ | (15,460 | ) | 387 | (15,073 | ) | (3,666 | ) | (3,666 | ) | (7,331 | ) | |||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ||||||||||||||||||
| Foreign currency | 15,239 | 6,958 | 22,197 | 8,009 | (10,486 | ) | (2,477 | ) | ||||||||||||||||
| Total | (221 | ) | 7,345 | 7,124 | 4,343 | (14,152 | ) | (9,808 | ) | |||||||||||||||
| Debt financial instruments issued | ||||||||||||||||||||||||
| Ch$ | 564 | (3 | ) | 561 | 189 | (8 | ) | 181 | ||||||||||||||||
| UF | 20,847 | (20,064 | ) | 783 | 34,803 | (89,699 | ) | (54,896 | ) | |||||||||||||||
| Foreign currency | 4,962 | 3,940 | 8,902 | (1,502 | ) | 4,253 | 2,751 | |||||||||||||||||
| Total | 26,373 | (16,127 | ) | 10,246 | 33,490 | (85,454 | ) | (51,964 | ) | |||||||||||||||
| Commercial Papers | ||||||||||||||||||||||||
| Ch$ | ― | ― | ― | ― | ― | ― | ||||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ||||||||||||||||||
| Foreign currency | (9,799 | ) | 2,013 | (7,786 | ) | 8,876 | (561 | ) | 8,315 | |||||||||||||||
| Total | (9,799 | ) | 2,013 | (7,786 | ) | 8,876 | (561 | ) | 8,315 | |||||||||||||||
| Lease Liabilities | ||||||||||||||||||||||||
| Ch$ | 116 | 285 | 401 | (274 | ) | 5 | (269 | ) | ||||||||||||||||
| UF | ― | ― | ― | ― | ― | ― | ||||||||||||||||||
| Foreign currency | ― | ― | ― | ― | ― | ― | ||||||||||||||||||
| Total | 116 | 285 | 401 | (274 | ) | 5 | (269 | ) | ||||||||||||||||
| Other financial obligation | ||||||||||||||||||||||||
| Ch$ | 23 | 163 | 186 | (43 | ) | (92 | ) | (135 | ) | |||||||||||||||
| UF | 72 | 91 | 163 | (72 | ) | 205 | 133 | |||||||||||||||||
| Foreign currency | 140 | 18 | 158 | (229 | ) | 130 | (99 | ) | ||||||||||||||||
| Total | 235 | 272 | 507 | (344 | ) | 243 | (101 | ) | ||||||||||||||||
| Total interest-bearing liabilities | ||||||||||||||||||||||||
| Ch$ | 4,200 | (505,104 | ) | (500,904 | ) | 10,045 | (156,706 | ) | (146,660 | ) | ||||||||||||||
| UF | 5,910 | (45,033 | ) | (39,123 | ) | 18,637 | (131,785 | ) | (113,148 | ) | ||||||||||||||
| Foreign currency | 17,775 | 6,683 | 24,458 | 12,468 | (21,462 | ) | (8,994 | ) | ||||||||||||||||
| Total | Ch$ | 27,885 | Ch$ | (543,454 | ) | Ch$ | (515,569 | ) | Ch$ | 41,150 | Ch$ | (309,953 | ) | Ch$ | (268,802 | ) | ||||||||
Financial Investments
Financial assets held for trading at Fair value through profit or loss:
The following table sets forth a breakdown of instruments classified as financial assets held for trading at Fair value through profit or loss, included in our investment portfolio:
| As of December 31, | Weighted
Average Nominal Rate (1) as of December 31, |
|||||||||||
| IFRS: | 2024 | 2025 | 2025 | |||||||||
| (in millions of Ch$) | % | |||||||||||
| Instruments issued by the Chilean Government and the Central Bank of Chile: | ||||||||||||
| Debt financial instruments from the Central Bank of Chile | Ch$ | 1,217,317 | Ch$ | 2,388,127 | 4.56 | % | ||||||
| Bonds and Promissory notes from the General Treasury of the Republic | 278,140 | 410,202 | 4.02 | |||||||||
| Other fiscal debt financial instruments | ― | ― | ― | |||||||||
| Other instruments issued in Chile: | ||||||||||||
| Debt financial instruments from other domestic banks | 217,948 | 277,354 | 3.37 | |||||||||
| Bonds and trade effects from domestic companies | ― | ― | ― | |||||||||
| Other debt financial instruments issued in the country | ― | ― | ― | |||||||||
| Instruments issued by foreign institutions: | ||||||||||||
| Financial instruments from foreign governments or Central Banks | 976 | 46,019 | 4.13 | |||||||||
| Financial debt instruments from other foreign governments and fiscal entities | ― | ― | ― | |||||||||
| Debt financial instruments from other foreign banks | ― | ― | ― | |||||||||
| Bonds and trade effects from foreign companies | ― | ― | ― | |||||||||
| Mutual fund investments: | ||||||||||||
| Funds managed by related companies | 408,121 | 400,222 | 4.56 | |||||||||
| Funds managed by third-party | ― | ― | ― | |||||||||
| Equity instruments | ||||||||||||
| Domestic equity instruments | 1,039 | 619 | ― | |||||||||
| Foreign equity instruments | ― | ― | ― | |||||||||
| Loans originated and acquired by the entity | ||||||||||||
| Loans and advances to banks | ― | ― | ― | |||||||||
| Commercial loans | ― | ― | ― | |||||||||
| Residential mortgage loans | ― | ― | ― | |||||||||
| Consumer loans | ― | ― | ― | |||||||||
| Others | 2,529 | 1,418 | ― | |||||||||
| Total | Ch$ | 2,126,070 | Ch$ | 3,523,961 | 4.39 | % | ||||||
| (1) | Weighted Average Nominal Rate is calculated as the sum of total accrued interests for the type of security divided by the average balance for the same type of security during the reported period, excluding the effect of inflation indexation. |
Under “Other instruments issued in Chile” are included instruments sold under repurchase agreements to clients and financial institutions by an amount of Ch$151,169 million as of December 31, 2025 (Ch$89,223 million in December 2024).
Investment Portfolio:
The detail of instruments classified as financial assets at Fair Value through Other Comprehensive Income and as Financial Instruments at Amortized Cost is as follows:
Financial Assets at Fair Value through Other Comprehensive Income
| As of December 31, | Weighted Average Nominal Rate (1) as of December 31, |
|||||||||||
| IFRS: | 2024 | 2025 | 2025 | |||||||||
| (in millions of Ch$) | % | |||||||||||
| Debt instruments at fair value through OCI | ||||||||||||
| Instruments issued by the Chilean Government and the Central Bank of Chile: | ||||||||||||
| Debt financial instruments from the Central Bank of Chile | Ch$ | ― | Ch$ | ― | ― | % | ||||||
| Bonds and Promissory notes from the General Treasury of the Republic | 660,321 | 1,174,234 | 3.54 | |||||||||
| Other fiscal debt financial instruments | 456 | 72 | 0.44 | |||||||||
| Other instruments issued in Chile: | ||||||||||||
| Debt financial instruments form other domestic banks | 1,321,030 | 2,234,247 | 4.74 | |||||||||
| Bonds and trade effects from domestic companies | 54,600 | 104,679 | 3.64 | |||||||||
| Other debt financial instruments issued in the country | ― | ― | ― | |||||||||
| Instruments Issued Abroad: | ||||||||||||
| Financial instruments form foreign Central Banks | ― | ― | ― | |||||||||
| Financial instruments form foreign governments and fiscal entities | 48,883 | 35,739 | 3.92 | |||||||||
| Debt financial instruments from other foreign banks | ― | ― | ― | |||||||||
| Bonds and trade effects from foreign companies | 3,055 | ― | — | |||||||||
| Other debt financial instruments issued abroad | ― | ― | — | |||||||||
| Equity instruments at fair value through OCI: | ||||||||||||
| Equity instruments issued in Chile | 7,277 | 8,744 | ― | |||||||||
| Equity instruments issued by foreign institutions | 2,215 | 2,488 | ― | |||||||||
| Total | Ch$ | 2,097,837 | Ch$ | 3,560,203 | 4.30 | % | ||||||
| (1) | Weighted Average Nominal Rate is calculated as the sum of total accrued interests for the type of security divided by the average balance for the same type of security during the reported period, excluding the effect of inflation indexation. |
The portfolio of Financial Assets at Fair Value through Other Comprehensive Income included net unrealized gains of Ch$4,478 million and unrealized gains of Ch$13,284 million as of December 31, 2024, and 2025, respectively, both before taxes, in each case recorded in other comprehensive income within equity.
Financial Instruments at Amortized Cost
| As
of December 31, |
Weighted Average Nominal Rate (1) as of December 31, |
|||||||||||
| IFRS: | 2024 | 2025 | 2025 | |||||||||
| (in millions of Ch$) | % | |||||||||||
| Financial Instruments at Amortized Cost | ||||||||||||
| Instruments issued by the Chilean Government and Central Bank of Chile: | ||||||||||||
| Debt financial instruments from the Central Bank of Chile | Ch$ | ― | Ch$ | ― | ― | % | ||||||
| Bonds and promissory notes from the General Treasury of the Republic | 944,109 | 460,956 | 2.53 | |||||||||
| Other fiscal debt financial instruments | ― | ― | ― | |||||||||
| Other instruments issued in Chile: | ||||||||||||
| Debt financial instruments from other domestic banks | ― | ― | ― | |||||||||
| Bonds and trade effects from domestic companies | ― | ― | ― | |||||||||
| Other debt financial instruments issued in the country | ― | ― | ― | |||||||||
| Instruments issued Abroad: | ||||||||||||
| Debt financial instruments from foreign Central Banks | ― | ― | ― | |||||||||
| Debt financial instruments from foreign governments and fiscal entities | ― | ― | ― | |||||||||
| Debt financial instruments from other foreign banks | ― | ― | ― | |||||||||
| Bonds and trade effects from foreign companies | ― | ― | ― | |||||||||
| Other debt financial instruments issued abroad | ― | ― | ― | |||||||||
| Accumulated Impairment Value of Financial Assets at Amortized Cost Debt Financial Instruments: | ||||||||||||
| Financial assets with no significant increase in credit risk since initial recognition (phase 1) | (35 | ) | (19 | ) | ― | |||||||
| Financial assets with a significant increase in credit risk since initial recognition, but without credit impairment (phase 2) | ― | ― | ― | |||||||||
| Financial assets with credit impairment (phase 3) | ― | ― | ― | |||||||||
| Total | Ch$ | 944,074 | Ch$ | 460,937 | 2.53 | % | ||||||
| (1) | Weighted Average Nominal Rate is calculated as the sum of total accrued interests for the type of security divided by the average balance for the same type of security during the reported period, excluding the effect of inflation indexation. |
The fair value of our portfolio of financial instruments at amortized cost was Ch$892,550 million and Ch$435,196 million as of December 31, 2024 and 2025, respectively.
Maturity of Financial Investments:
The maturities of financial assets held for trading at fair value through profit or loss, financial assets at fair value through other comprehensive income and financial assets at amortized cost as of December 31, 2024 and 2025 were, as follows:
| As of December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Due
within 1 year |
Weighted Average Nominal Rate(1) |
Due
after 1 year but within 5 years |
Weighted Average Nominal Rate(1) |
Due
after 5 years but within 10 years |
Weighted Average Nominal Rate(1) |
Due
after 10 years |
Weighted Average Nominal Rate(1) |
Total | ||||||||||||||||||||||||||||
| (In millions of Ch$, except percentages) | ||||||||||||||||||||||||||||||||||||
| Financial assets held for trading: | ||||||||||||||||||||||||||||||||||||
| Instruments issued by the Chilean Government and the Central Bank of Chile: | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments from the Central Bank of Chile | Ch$ | 1,217,317 | 4.97 | % | Ch$ | – | – | % | Ch$ | – | – | % | Ch$ | – | – | % | Ch$ | 1,217,317 | ||||||||||||||||||
| Bonds and Promissory notes from the General Treasury of the Republic | 278,140 | 4.71 | – | – | – | – | – | – | 278,140 | |||||||||||||||||||||||||||
| Other fiscal debt financial instruments | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Other instruments issued in Chile: | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments from other domestic banks | 217,948 | 3.29 | – | – | – | – | – | – | 217,948 | |||||||||||||||||||||||||||
| Bonds and trade effects from domestic companies | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Other debt financial instruments issued in the country | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Instruments issued by foreign institutions: | ||||||||||||||||||||||||||||||||||||
| Financial instruments from foreign governments or Central Banks | 976 | 4.23 | – | – | – | – | – | – | 976 | |||||||||||||||||||||||||||
| Financial debt instruments from other foreign governments and fiscal entities | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Debt financial instruments from other foreign banks | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Bonds and trade effects from foreign companies | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Mutual fund investments: | ||||||||||||||||||||||||||||||||||||
| Funds managed by related companies | 408,121 | 5.06 | – | – | – | – | – | – | 408,121 | |||||||||||||||||||||||||||
| Funds managed by third-party | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Equity instruments | ||||||||||||||||||||||||||||||||||||
| Domestic equity instruments | 1,039 | – | – | – | – | – | – | – | 1,039 | |||||||||||||||||||||||||||
| Foreign equity instruments | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Loans originated and acquired by the entity | ||||||||||||||||||||||||||||||||||||
| Loans and advances to banks | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Commercial loans | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Residential mortgage loans | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Consumer loans | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Others | 2,529 | – | – | – | – | – | – | – | 2,529 | |||||||||||||||||||||||||||
| Total | Ch$ | 2,126,070 | 4.77 | % | Ch$ | – | – | % | Ch$ | – | – | % | Ch$ | – | – | % | Ch$ | 2,126,070 | ||||||||||||||||||
| (1) | Weighted Average Nominal Rate is calculated as the sum of total accrued interests for the type of security divided by the average balance for the same type of security during the reported period, excluding the effect of inflation indexation |
| As of December 31, 2025 | ||||||||||||||||||||||||||||||||||||
| Due
within 1 year |
Weighted Average Nominal Rate(1) |
Due
after 1 year but within 5 years |
Weighted Average Nominal Rate(1) |
Due
after 5 years but within 10 years |
Weighted Average Nominal Rate(1) |
Due after 10 years |
Weighted Average Nominal Rate(1) |
Total | ||||||||||||||||||||||||||||
| (In millions of Ch$, except percentages) | ||||||||||||||||||||||||||||||||||||
| Financial assets held for trading: | ||||||||||||||||||||||||||||||||||||
| Instruments issued by the Chilean Government and the Central Bank of Chile: | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments from the Central Bank of Chile | Ch$ | 2,388,127 | 4.56 | % | Ch$ | – | – | % | Ch$ | – | – | % | Ch$ | – | – | % | Ch$ | 2,388,127 | ||||||||||||||||||
| Bonds and Promissory notes from the General Treasury of the Republic | 410,202 | 4.02 | – | – | – | – | – | – | 410,202 | |||||||||||||||||||||||||||
| Other fiscal debt financial instruments | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Other instruments issued in Chile: | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments from other domestic bank | 277,354 | 3.37 | – | – | – | – | – | – | 277,354 | |||||||||||||||||||||||||||
| Bonds and trade effects from domestic companies | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Other debt financial instruments issued in the country | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Instruments issued by foreign institutions: | ||||||||||||||||||||||||||||||||||||
| Financial instruments from foreign governments or Central Banks | 46,019 | 4.13 | – | – | – | – | – | – | 46,019 | |||||||||||||||||||||||||||
| Financial debt instruments from other foreign governments and fiscal entities | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Debt financial instruments from other foreign banks | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Bonds and trade effects from foreign companies | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Mutual fund investments: | ||||||||||||||||||||||||||||||||||||
| Funds managed by related companies | 400,222 | 4.56 | – | – | – | – | – | – | 400,222 | |||||||||||||||||||||||||||
| Funds managed by third-party | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Equity instruments | ||||||||||||||||||||||||||||||||||||
| Domestic equity instruments | 619 | – | – | – | – | – | – | – | 619 | |||||||||||||||||||||||||||
| Foreign equity instruments | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Loans originated and acquired by the entity | ||||||||||||||||||||||||||||||||||||
| Loans and advances to banks | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Commercial loans | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Residential mortgage loans | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Consumer loans | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Others | 1,418 | – | – | – | – | – | – | – | 1,418 | |||||||||||||||||||||||||||
| Total | Ch$ | 3,523,961 | 4.39 | % | Ch$ | – | – | % | Ch$ | – | – | % | Ch$ | – | – | % | Ch$ | 3,523,961 | ||||||||||||||||||
| (1) | Weighted Average Nominal Rate is calculated as the sum of total accrued interests for the type of security divided by the average balance for the same type of security during the reported period excluding the effect of inflation indexation. |
| As of December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Due within 1 year |
Weighted Average Nominal Rate(1) |
Due
after 1 year but within 5 years |
Weighted Average Nominal Rate(1) |
Due
after 5 years but within 10 years |
Weighted Average Nominal Rate(1) |
Due
after 10 years |
Weighted Average Nominal Rate(1) |
Total | ||||||||||||||||||||||||||||
| (In millions of Ch$, except percentages) | ||||||||||||||||||||||||||||||||||||
| Financial Assets at Fair Value through Other Comprehensive Income: | ||||||||||||||||||||||||||||||||||||
| Instruments issued by the Chilean Government and the Central Bank: | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments from the Central Bank of Chile | Ch$ | ― | ― | % | Ch$ | ― | ― | % | Ch$ | ― | ― | % | Ch$ | ― | ― | % | Ch$ | ― | ||||||||||||||||||
| Bonds and Promissory notes from the General Treasury of the Republic | 43,541 | 5.00 | 616,780 | 3.54 | ― | ― | ― | ― | 660,321 | |||||||||||||||||||||||||||
| Other fiscal debt financial instruments | 329 | 3.86 | 127 | 4.68 | ― | ― | ― | ― | 456 | |||||||||||||||||||||||||||
| Other instruments issued in Chile: | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments form other domestic bank | 958,844 | 5.21 | 161,262 | 4.04 | 128,731 | 5.03 | 72,193 | 3.47 | 1,321,030 | |||||||||||||||||||||||||||
| Bonds and trade effects from domestic companies | 5,117 | 6.80 | 6,549 | 4.49 | 39,203 | 3.61 | 3,731 | 3.65 | 54,600 | |||||||||||||||||||||||||||
| Other debt financial instruments issued in the country | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Instruments Issued Abroad: | ||||||||||||||||||||||||||||||||||||
| Financial instruments form foreign Central Banks | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Financial instruments form foreign governments and fiscal entities | 48,883 | 4.26 | ― | ― | ― | ― | ― | ― | 48,883 | |||||||||||||||||||||||||||
| Debt financial instruments from other foreign banks | ― | ― | 2,063 | 6.80 | 992 | 6.35 | ― | ― | 3,055 | |||||||||||||||||||||||||||
| Bonds and trade effects from foreign companies | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Other debt financial instruments issued abroad | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Equity instruments at fair value through OCI | ||||||||||||||||||||||||||||||||||||
| Equity instruments issued in Chile | ― | ― | ― | ― | ― | ― | 7,277 | ― | 7,277 | |||||||||||||||||||||||||||
| Equity instruments issued by foreign institutions | ― | ― | ― | ― | ― | ― | 2,215 | ― | 2,215 | |||||||||||||||||||||||||||
| Total | Ch$ | 1,056,714 | 5.16 | % | Ch$ | 786,781 | 3.66 | % | Ch$ | 168,926 | 4.71 | % | Ch$ | 85,416 | 3.48 | % | Ch$ | 2,097,837 | ||||||||||||||||||
| (1) | Weighted Average Nominal Rate is calculated as the sum of total accrued interests for the type of security divided by the average balance for the same type of security during the reported period, excluding the effect of inflation indexation. |
| As of December 31, 2025 | ||||||||||||||||||||||||||||||||||||
| Due
within 1 year |
Weighted Average Nominal Rate(1) |
Due
after 1 year but within 5 years |
Weighted Average Nominal Rate(1) |
Due
after 5 years but within 10 years |
Weighted Average Nominal Rate(1) |
Due
after 10 years |
Weighted Average Nominal Rate(1) |
Total | ||||||||||||||||||||||||||||
| (In millions of Ch$, except percentages) | ||||||||||||||||||||||||||||||||||||
| Financial Assets at Fair Value through Other Comprehensive Income: | ||||||||||||||||||||||||||||||||||||
| Instruments issued by the Chilean Government and the Central Bank: | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments from the Central Bank of Chile | Ch$ | ― | ― | % | Ch$ | ― | ― | % | Ch$ | ― | ― | % | Ch$ | ― | ― | % | Ch$ | ― | ||||||||||||||||||
| Bonds and Promissory notes from the General Treasury of the Republic | 65,126 | 4.35 | 1,029,178 | 3.58 | 79,930 | 2.30 | ― | ― | 1,174,234 | |||||||||||||||||||||||||||
| Other fiscal debt financial instruments | 67 | 0.33 | 5 | 1.83 | ― | ― | ― | ― | 72 | |||||||||||||||||||||||||||
| Other instruments issued in Chile: | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments form other domestic bank | 1,473,937 | 4.66 | 513,264 | 4.91 | 192,908 | 5.34 | 54,138 | 3.36 | 2,234,247 | |||||||||||||||||||||||||||
| Bonds and trade effects from domestic companies | ― | ― | 15,848 | 3.34 | 83,661 | 3.71 | 5,170 | 3.46 | 104,679 | |||||||||||||||||||||||||||
| Other debt financial instruments issued in the country | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Instruments Issued Abroad: | ||||||||||||||||||||||||||||||||||||
| Financial instruments form foreign Central Banks | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Financial instruments form foreign governments and fiscal entities | 35,739 | 3.92 | ― | ― | ― | ― | ― | ― | 35,739 | |||||||||||||||||||||||||||
| Debt financial instruments from other foreign banks | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Bonds and trade effects from foreign companies | ― | ― | ― | ― | ― | ― | ― | ― | 3,055 | |||||||||||||||||||||||||||
| Other debt financial instruments issued abroad | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Equity instruments at fair value through OCI | ||||||||||||||||||||||||||||||||||||
| Equity instruments issued in Chile | ― | ― | ― | ― | ― | ― | 8,744 | ― | 8,744 | |||||||||||||||||||||||||||
| Equity instruments issued by foreign institutions | ― | ― | ― | ― | ― | ― | 2,488 | ― | 2,488 | |||||||||||||||||||||||||||
| Total | Ch$ | 1,574,869 | 4.63 | % | Ch$ | 1,558,295 | 4.02 | % | Ch$ | 356,499 | 4.27 | % | Ch$ | 70,540 | 3.37 | % | Ch$ | 3,560,203 | ||||||||||||||||||
| (1) | Weighted Average Nominal Rate is calculated as the sum of total accrued interests for the type of security divided by the average balance for the same type of security during the reported period, excluding the effect of inflation indexation. |
| As of December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Due
within 1 year |
Weighted Average Nominal Rate(1) |
Due
after 1 year but within 5 years |
Weighted Average Nominal Rate(1) |
Due
after 5 years but within 10 years |
Weighted Average Nominal Rate(1) |
Due
after 10 years |
Weighted Average Nominal Rate(1) |
Total | ||||||||||||||||||||||||||||
| (In millions of Ch$, except percentages) | ||||||||||||||||||||||||||||||||||||
| Financial Instruments at Amortized Cost: | ||||||||||||||||||||||||||||||||||||
| Instruments issued by the Chilean Government and Central Bank of Chile: | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments from the Central Bank of Chile | Ch$ | ― | ― | % | Ch$ | ― | ― | % | Ch$ | ― | ― | % | Ch$ | ― | ― | % | Ch$ | ― | ||||||||||||||||||
| Bonds and promissory notes from the General Treasury of the Republic | 16,833 | 1.68 | 608,965 | 1.07 | 318,311 | 2.47 | ― | ― | 944,109 | |||||||||||||||||||||||||||
| Other fiscal debt financial instruments | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Other instruments issued in Chile: | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments from other domestic bank | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Bonds and trade effects from domestic companies | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Other debt financial instruments issued in the country | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Instruments Issued Abroad: | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments from foreign Central Banks | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Debt financial instruments from foreign governments and fiscal entities | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Debt financial instruments from other foreign banks | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Bonds and trade effects from foreign companies | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Other debt financial instruments issued abroad | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Accumulated Impairment Value of Financial Assets at Amortized Cost Debt Financial Instruments: | ||||||||||||||||||||||||||||||||||||
| Financial assets with no significant increase in credit risk since initial recognition (phase 1) | (1 | ) | ― | (23 | ) | ― | (11 | ) | ― | ― | ― | (35 | ) | |||||||||||||||||||||||
| Financial assets with a significant increase in credit risk since initial recognition, but without credit impairment (phase 2) | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Financial assets with credit impairment (phase 3) | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Total | Ch$ | 16,832 | 1.68 | % | Ch$ | 608,942 | 1.07 | % | Ch$ | 318,300 | 2.47 | % | Ch$ | ― | ― | % | Ch$ | 944,074 | ||||||||||||||||||
| (1) | Weighted Average Nominal Rate is calculated as the sum of total accrued interests for the type of security divided by the average balance for the same type of security during the reported period, excluding the effect of inflation indexation. |
| As of December 31, 2025 | ||||||||||||||||||||||||||||||||||||
| Due
within 1 year |
Weighted Average Nominal Rate(1) |
Due
after 1 year but within 5 years |
Weighted Average Nominal Rate(1) |
Due
after 5 years but within 10 years |
Weighted Average Nominal Rate(1) |
Due
after 10 years |
Weighted Average Nominal Rate(1) |
Total | ||||||||||||||||||||||||||||
| (In millions of Ch$, except percentages) | ||||||||||||||||||||||||||||||||||||
| Financial Instruments at Amortized Cost: | ||||||||||||||||||||||||||||||||||||
| Instruments issued by the Chilean Government and Central Bank of Chile: | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments from the Central Bank of Chile | Ch$ | ― | ― | % | Ch$ | ― | ― | % | Ch$ | ― | ― | % | Ch$ | ― | ― | % | Ch$ | ― | ||||||||||||||||||
| Bonds and promissory notes from the General Treasury of the Republic | 8,620 | 2.44 | 452,336 | 2.53 | ― | ― | ― | ― | 460,956 | |||||||||||||||||||||||||||
| Other fiscal debt financial instruments | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Other instruments issued in Chile: | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments from other domestic bank | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Bonds and trade effects from domestic companies | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Other debt financial instruments issued in the country | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Instruments Issued Abroad: | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments from foreign Central Banks | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Debt financial instruments from foreign governments and fiscal entities | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Debt financial instruments from other foreign banks | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Bonds
and trade effects from foreign companies |
― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Other debt financial instruments issued abroad | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Accumulated Impairment Value of Financial Assets at Amortized Cost Debt Financial Instruments: | ||||||||||||||||||||||||||||||||||||
| Financial assets with no significant increase in credit risk since initial recognition (phase 1) | ― | ― | (19 | ) | ― | ― | ― | ― | ― | (19 | ) | |||||||||||||||||||||||||
| Financial assets with a significant increase in credit risk since initial recognition, but without credit impairment (phase 2) | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Financial assets with credit impairment (phase 3) | ― | ― | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||||
| Total | Ch$ | 8,620 | 2.44 | % | Ch$ | 452,317 | 2.53 | % | Ch$ | ― | ― | % | Ch$ | ― | ― | % | Ch$ | 460,937 | ||||||||||||||||||
| (1) | Weighted Average Nominal Rate is calculated as the sum of total accrued interests for the type of security divided by the average balance for the same type of security during the reported period, excluding the effect of inflation indexation. |
Loan Portfolio
The following table sets forth our loans by type of loan and risk classification. All loan amounts stated below are before deduction of allowances for loan losses.
| As of December 31, | ||||||||
| 2024 | 2025 | |||||||
| IFRS: | (in millions of Ch$) | |||||||
| Commercial loans: | ||||||||
| Commercial loans | Ch$ | 15,147,886 | Ch$ | 15,061,510 | ||||
| Chilean exports foreign trade loans | 1,449,806 | 643,773 | ||||||
| Accrediting foreign trade loans negotiated in terms of Chilean imports | 162 | 273 | ||||||
| Chilean imports foreign trade loans | 562,650 | 526,247 | ||||||
| Current account debtors | 196,819 | 183,334 | ||||||
| Credit card debtors | 128,671 | 139,930 | ||||||
| Factoring transactions | 596,935 | 833,975 | ||||||
| Commercial lease transactions | 1,991,663 | 2,096,832 | ||||||
| Student loans | 52,511 | 47,396 | ||||||
| Other loans and accounts receivable | 20,877 | 16,277 | ||||||
| Subtotal | 20,147,980 | 19,549,547 | ||||||
| Mortgage loans: | ||||||||
| Mortgage bonds | 1,400 | 807 | ||||||
| Endorsable mortgage mutual loans | 11,071 | 8,614 | ||||||
| Other mortgage mutual loans | 13,056,028 | 13,763,787 | ||||||
| Other loans and accounts receivable | 164,828 | 161,261 | ||||||
| Subtotal | 13,233,327 | 13,934,469 | ||||||
| Consumer loans: | ||||||||
| Consumer loans in installments | 3,255,475 | 3,377,441 | ||||||
| Current account debtors | 284,207 | 293,111 | ||||||
| Credit card debtors | 2,013,622 | 2,097,110 | ||||||
| Consumer lease transactions | 320 | 1,199 | ||||||
| Other loans and accounts receivable | 1,365 | 1,437 | ||||||
| Subtotal | 5,554,989 | 5,770,298 | ||||||
| Total loans | Ch$ | 38,936,296 | Ch$ | 39,254,314 | ||||
The loan categories are as follows:
| ● | “Commercial Loans” are loans and accounts receivable from customers not included within the mortgage or consumer loans categories. Commercial loans are intended to meet financing needs of companies and entrepreneurs, including corporations, large companies, small and medium sized companies, microentrepreneurs and start-ups. Accordingly, commercial loans pursue to finance capital expenditures through commercial credits or leasing loans, trade finance operations, short-term financing through factoring loans and working capital needs by means of credit lines granted to our customers. |
| ● | “Mortgage Loans” include mortgage loans granted to individuals to acquire, expand, repair or build a home, issued as mortgage bonds, endorsable mortgage loans or by other methods. It also includes supplementary loans for the same purposes and bridge loans granted before the mortgage loan has been settled. This subcategory also includes residential real estate lease transactions and other accounts receivable. |
| ● | “Consumer Loans” are all loans granted to individuals to be used for purchasing goods or services. These include different types of loans (either installments or revolving), as well as balances from credit card transactions or overdrafts on current accounts belonging to individuals. Consumer loans also include consumer lease transactions and other accounts receivable. Consumer loans do not include loans granted to finance business activities that the debtor is developing or that it may develop. |
Maturity and Interest Rate Sensitivity of Loans as of December 31, 2025
The following table sets forth an analysis by type and time remaining to maturity of our loans as of December 31, 2025:
| Balances as of December 31, 2025 |
Due within 1 month |
Due after 1 month but within 6 months |
Due after 6 months but within 12 months |
Due after 1 year but within 3 years |
Due after 3 years but within 5 years |
Due after 5 years but within 15 years |
Due after 15 years |
|||||||||||||||||||||||||
| (in millions of Ch$) | ||||||||||||||||||||||||||||||||
| IFRS: | ||||||||||||||||||||||||||||||||
| Commercial Loans: | ||||||||||||||||||||||||||||||||
| Commercial loans | Ch$ | 15,061,510 | Ch$ | 1,558,839 | Ch$ | 3,567,095 | Ch$ | 2,356,487 | Ch$ | 3,011,290 | Ch$ | 1,904,525 | Ch$ | 2,598,800 | Ch$ | 64,474 | ||||||||||||||||
| Chilean exports foreign trade loans | 643,773 | 210,197 | 384,126 | 46,597 | 1,458 | 231 | 1,164 | ― | ||||||||||||||||||||||||
| Accrediting foreign trade loans negotiated in terms of Chilean imports | 273 | 83 | 190 | ― | ― | ― | ― | ― | ||||||||||||||||||||||||
| Chilean imports foreign trade loans | 526,247 | 131,629 | 368,537 | 26,081 | ― | ― | ― | ― | ||||||||||||||||||||||||
| Current account debtors | 183,334 | 183,334 | ― | ― | ― | ― | ― | ― | ||||||||||||||||||||||||
| Credit card debtors | 139,930 | 139,930 | ― | ― | ― | ― | ― | ― | ||||||||||||||||||||||||
| Factoring loans | 833,975 | 612,433 | 216,412 | 5,130 | ― | ― | ― | ― | ||||||||||||||||||||||||
| Commercial lease transactions | 2,096,832 | 73,037 | 270,818 | 276,865 | 764,089 | 345,425 | 366,429 | 169 | ||||||||||||||||||||||||
| Student loans | 47,396 | 1,622 | 3,647 | 4,541 | 14,550 | 10,731 | 12,274 | 31 | ||||||||||||||||||||||||
| Other loans and accounts receivable | 16,277 | 16,277 | ― | ― | ― | ― | ― | ― | ||||||||||||||||||||||||
| Subtotal | 19,549,547 | 2,927,381 | 4,810,825 | 2,715,701 | 3,791,387 | 2,260,912 | 2,978,667 | 64,674 | ||||||||||||||||||||||||
| Residential Mortgage Loans: | ||||||||||||||||||||||||||||||||
| Loans secured by mortgage finance bonds | 807 | 9 | 41 | 51 | 214 | 228 | 264 | ― | ||||||||||||||||||||||||
| Endorsable mortgage mutual loans | 8,614 | 301 | 974 | 938 | 1,778 | 976 | 2,167 | 1,480 | ||||||||||||||||||||||||
| Mortgage mutual financed with mortgage bonds | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||
| Other residential lending | 13,763,787 | 160,966 | 354,501 | 427,413 | 1,716,289 | 1,714,229 | 6,846,552 | 2,543,837 | ||||||||||||||||||||||||
| Residential lease transactions | ― | ― | ― | ― | ― | ― | ― | |||||||||||||||||||||||||
| Other loans and accounts receivable | 161,261 | 3,561 | 3,559 | 2,170 | 8,504 | 10,742 | 112,049 | 20,676 | ||||||||||||||||||||||||
| Subtotal | 13,934,469 | 164,837 | 359,075 | 430,572 | 1,726,785 | 1,726,175 | 6,961,032 | 2,565,993 | ||||||||||||||||||||||||
| Consumer Loans: | ||||||||||||||||||||||||||||||||
| Consumer loans in installments | 3,377,441 | 145,875 | 507,739 | 533,394 | 1,514,616 | 625,701 | 49,941 | 175 | ||||||||||||||||||||||||
| Current accounts debtors | 293,111 | 293,111 | ― | ― | ― | ― | ― | ― | ||||||||||||||||||||||||
| Credit card debtors | 2,097,110 | 2,097,110 | ― | ― | ― | ― | ― | ― | ||||||||||||||||||||||||
| Consumer lease transactions | 1,199 | 38 | 164 | 185 | 654 | 158 | ― | ― | ||||||||||||||||||||||||
| Other loans and accounts receivable | 1,437 | 1,437 | ― | ― | ― | ― | ― | ― | ||||||||||||||||||||||||
| Subtotal | 5,770,298 | 2,537,571 | 507,903 | 533,579 | 1,515,270 | 625,859 | 49,941 | 175 | ||||||||||||||||||||||||
| Total Loans | Ch$ | 39,254,314 | Ch$ | 5,629,789 | Ch$ | 5,677,803 | Ch$ | 3,679,852 | Ch$ | 7,033,442 | Ch$ | 4,612,946 | Ch$ | 9,989,640 | Ch$ | 2,630,842 | ||||||||||||||||
The following table sets forth a breakdown by variable and fixed rate of our outstanding loans as of December 31, 2025:
| As of December 31, 2025 |
||||
| (in millions of Ch$) | ||||
| IFRS: | ||||
| Variable rate | ||||
| Ch$ | Ch$ | 3,289,604 | ||
| UF | 973,109 | |||
| Foreign currency | 374,066 | |||
| Subtotal | 4,636,779 | |||
| Fixed rate | ||||
| Ch$ | 11,441,986 | |||
| UF | 20,762,951 | |||
| Foreign currency | 2,412,598 | |||
| Subtotal | 34,617,535 | |||
| Total | Ch$ | 39,254,314 | ||
Foreign Country Outstanding Loans
Our cross-border outstanding loans are principally related to trade finance loans. These loans include loans granted to foreign financial institutions or foreign corporations, some of which are guaranteed by their Chilean parent company. The table below lists the total amounts outstanding to borrowers in certain foreign countries as of the dates indicated, under IFRS Accounting Standards. It does not include trade finance loans to domestic borrowers.
| As of December 31, | ||||||||
| 2024 | 2025 | |||||||
| IFRS: | (in millions of Ch$) | |||||||
| Colombia | Ch$ | 1,492 | Ch$ | 1,366 | ||||
| Luxembourg | – | 36,162 | ||||||
| Peru | 14,882 | 2,323 | ||||||
| Spain | 103,496 | – | ||||||
| Total | Ch$ | 119,870 | Ch$ | 39,851 | ||||
As of December 31, 2025, and as of the date of this annual report, we did not have exposures associated with cross-border loans or contingent loans in Ukraine, Russia, Venezuela or Iran, whereas we have immaterial exposures (contingent loans) to Israeli financial institutions.
Credit Review Process
Credit risk is the risk that we will incur a loss because our customers or counterparties do not comply with their contractual obligations.
This risk is managed using a global, unified and forward-looking strategy, which recognizes the current and projected economic environment of the markets and segments in which our different businesses are developing and grants appropriate credit treatment to each such market or segment by using risk limits that we are willing to accept from counterparties.
Managing credit risk is, therefore, inherent to our business and must be incorporated into each segment in which we do business. In this way, we may achieve an optimum balance between assumed risks and attained returns and properly allocate capital to each business line while complying with regulations and criteria defined by our board of directors in order to ensure that we have an appropriate capital base for potential losses that may arise from our credit exposure.
Counterparty limits are established by analyzing financial information, risk ratings, the nature of the exposure, documentation, guarantees, market conditions and the pertinent industry sector, among other factors. The process of monitoring credit quality also includes identifying in advance any possible changes in a counterparty’s payment capacity, which enables us to evaluate the potential loss from these risks and take corrective actions.
Approval Process
The Bank analyzes its loan portfolio on a segmented basis and the same approach is used for approval purposes by taking into account the characteristics of each particular targeted group of customers. Given the diversity of the bank’s loan book, we utilize different techniques in order to evaluate the credit quality, payment capacity and financial structure of every type of customer.
It is important to note that Banco de Chile organizes its lending business in two business segments, namely, retail banking and wholesale banking. Accordingly, for risk management purposes, Banco de Chile has specialized processes and knowledgeable teams for credit approval in each of these segments.
Retail Banking Segment
Credit risk assessment is carried out through automated models for personal banking and parametric models for SME banking. These models allow us to determine suitable levels of financial burden, payment capacity and desired exposure to credit risk. These are build-in models that depend on information associated with customers’ payment behavior, customers’ borrowings with other banks, similarity to the target market and income segment for personal banking. In the case of SME banking, we add information related to the customer’s main commercial activity and diverse financial information. Based on the accuracy we have achieved with these models over time, we are able to provide our commercial areas with timely responses to customer requests.
We have continued to work and focus on the improvement of our retail lending analytics process, covering several elements, such as: (i) data management and data governance, (ii) scoring and loan loss provisioning models, (iii) validation standards and procedures, and (iv) an ongoing monitoring of models and portfolios, among others. These efforts are aimed at enhancing our market-leading position in risk management matters, maintaining a competitive risk-return relationship while reinforcing our governance and regulatory compliance.
Wholesale Banking Segment
Within wholesale banking, credit risk assessment is executed by means of a case-by-case approach, which is based on subjective credit analysis supported by the judgment of specialized officers. This approach consists of a comprehensive individualized review that considers, among other factors, the credit exposure, the loan tenor, the type of loan, the customer’s financial soundness and collaterals that could be used to back the loan. All of these quantitative and objective factors are supplemented by a SWOT analysis of the customer and projections for the industry in which the company operates. This process is supported by a credit rating model that enables us to homogeneously evaluate each customer while establishing approval attributions depending on the credit exposure.
Although the Bank has dedicated monitoring teams within the loan approval areas, monitoring efforts are also carried out collectively by the credit risk and commercial areas, which track operations from application to collection, in order to avoid unexpected risks.
Also, we have set approval attributions that are limited by the total customer credit risk. We define total customer credit risk as the sum of the customer’s loans and other financial obligations in which the customer is the indebted party, the loans and other financial obligations from a third party that are guaranteed by the customer, the customer’s contingent loans and any of the customer’s credit facilities. Also, if the customer is part of an economic group, then the total customer credit risk will also include the total amount of the items described above corresponding to all the parties that make up the economic group.
Transactions in which the total customer credit risk is more than Ch$29,796 million require approval from a credit committee, composed of three members of our board of directors and our chief executive officer. Transactions in which the total customer credit risk is equal to or less than Ch$29,796 million may be approved by other risk officers, depending on the amount involved, as follows:
| Approved by | Limit in Ch$ | |
| Board Credit Committee | Up to legal limits | |
| Executive Committee (Chairman, Chief Executive Officer and Chief Risk Officer). Approved by three of the three, or their respective surrogates approve) | Up to Ch$29,796 million | |
| Senior Risk Committee (Chairman, Chief Executive Officer and Chief Risk Officer or Wholesale Credit Risk Admission Area Manager). Approved by two of the three, or their respective surrogates approve. | Up to Ch$19,864 million | |
| Corporate Risk Division Manager or Wholesale Credit Risk Admissions Area Manager together with the Corporate Division Manager or Commercial Division Manager. | Up to Ch$15,891 million | |
| Corporate and International Risk Area Manager together with Chief Risk Officer | Up to Ch$13,905 million | |
| Real Estate and Construction Risk Area Manager or Large Companies Risk Manager together with Large Companies Banking Unit Manager. | Up to Ch$11,918 million | |
| Deputy Risk Manager for Private Banking and Large Companies together with Large Companies Banking Unit Manager | Up to Ch$7,946 million | |
| Regional Risk Manager and Large Companies Banking Unit Manager | Up to Ch$3,973 million | |
| Risk Deputy Managers | Up to Ch$2,384 million | |
| Risk Officer with Large Companies Banking Unit Manager | Up to Ch$1,589 million | |
| Regional Managers | Up to Ch$397 million |
In addition to reviewing the credit limit, the business segment extending the credit must review the terms of the loan, the interest rate and any security to be obtained.
Control and Follow-up
The ongoing control and follow-up of credit risk is the basis for portfolio management and enables us to recognize risk opportunely while detecting and avoiding potential write-offs in advance. In line with the guidelines we follow for credit assessment purposes, we also utilize control and follow-up procedures in accordance with our main business segments.
Retail Banking Segment
We manage credit risk in this segment by frequently monitoring customers and market trends. This approach permits us to take corrective measures and implement necessary adjustments in order to keep credit risk aligned with desired levels. In order to achieve this goal, we generate a wide set of management reports addressing the evolution of portfolio expected loss, vintage analysis, past due at the level of product and segment, in addition to approval guidelines. Further, we have developed statistical models for this segment, which are intended to support the credit assessment process. These models are frequently monitored through back-testing, variable and segmentation stability, among other techniques. This approach enables us to assure the models’ predictive capability over time.
Wholesale Banking Segment
For wholesale banking segment, we control and monitor credit quality by means of a specialized unit, which has developed diverse methodologies and tools that enable us to carry out a centralized systematic monitoring of thresholds on financial ratios, behavior variables and credit ratings. Thus, for companies reporting risk alerts, we execute a focused follow-up that allows us to take corrective measures in advance.
In addition, portfolio follow-up responsibilities include monitoring of conditions established during the assessment process, such as covenants, collateral, specific restrictions for credit approval and borrowing caps, among others.
Analysis of Our Loan Classification
The following tables provide statistical data under IFRS Accounting Standards regarding the classification of our loans as of the dates indicated. As discussed above, our risk analysis system requires the classification of all of our loans.
| As of December 31, 2024 | ||||||||||||||||||||||||
| Stage 1 | Stage 2 | Stage 3 | Purchased or Originated Credit Impaired | Total Loans | Classification percentage | |||||||||||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||||||||||||||
| Bank’s Credit Rating: | ||||||||||||||||||||||||
| Commercial Loans | ||||||||||||||||||||||||
| Individual | ||||||||||||||||||||||||
| A1 | Ch$ | 2,081 | Ch$ | — | Ch$ | — | Ch$ | — | Ch$ | 2,081 | 0.01 | % | ||||||||||||
| A2 | 1,762,789 | — | — | — | 1,762,789 | 11.53 | ||||||||||||||||||
| A3 | 2,242,611 | — | — | — | 2,242,611 | 14.67 | ||||||||||||||||||
| A4 | 2,790,410 | 348 | — | — | 2,790,758 | 18.25 | ||||||||||||||||||
| A5 | 4,717,901 | 6,736 | — | — | 4,724,637 | 30.90 | ||||||||||||||||||
| A6 | 3,180,519 | 43,793 | — | — | 3,224,312 | 21.09 | ||||||||||||||||||
| Normal Portfolio | 14,696,311 | 50,877 | — | — | 14,747,188 | 96.46 | ||||||||||||||||||
| B1 | — | 132,389 | — | — | 132,389 | 0.87 | ||||||||||||||||||
| B2 | — | 66,219 | — | — | 66,219 | 0.43 | ||||||||||||||||||
| B3 | — | 36,592 | — | 1,443 | 38,035 | 0.25 | ||||||||||||||||||
| B4 | — | 9,568 | — | 87 | 9,655 | 0.06 | ||||||||||||||||||
| Substandard Portfolio | — | 244,768 | — | 1,530 | 246,298 | 1.61 | ||||||||||||||||||
| C1 | — | — | 102,063 | 1,227 | 103,290 | 0.68 | ||||||||||||||||||
| C2 | — | — | 41,853 | 806 | 42,659 | 0.28 | ||||||||||||||||||
| C3 | — | — | 29,357 | 2 | 29,359 | 0.19 | ||||||||||||||||||
| C4 | — | — | 50,991 | 38 | 51,029 | 0.33 | ||||||||||||||||||
| C5 | — | — | 17,875 | 33 | 17,908 | 0.12 | ||||||||||||||||||
| C6 | — | — | 50,602 | 354 | 50,956 | 0.34 | ||||||||||||||||||
| Non-Complying Portfolio | — | — | 292,741 | 2,460 | 295,201 | 1.93 | ||||||||||||||||||
| Subtotal individual loans | 14,696,311 | 295,645 | 292,741 | 3,990 | 15,288,687 | 100.00 | ||||||||||||||||||
| Group | ||||||||||||||||||||||||
| Normal portfolio | 4,028,591 | 411,964 | — | 25 | 4,440,580 | 91.38 | ||||||||||||||||||
| Non-complying portfolio | — | — | 413,618 | 5,095 | 418,713 | 8.62 | ||||||||||||||||||
| Subtotal group loans | 4,028,591 | 411,964 | 413,618 | 5,120 | 4,859,293 | 100.00 | ||||||||||||||||||
| Total Commercial Loans | 18,724,902 | 707,609 | 706,359 | 9,110 | 20,147,980 | |||||||||||||||||||
| Residential Mortgage Loans | ||||||||||||||||||||||||
| Group | ||||||||||||||||||||||||
| Normal portfolio | 12,036,923 | 843,700 | — | — | 12,880,623 | 97.33 | ||||||||||||||||||
| Non-complying portfolio | — | — | 352,469 | 235 | 352,704 | 2.67 | ||||||||||||||||||
| Subtotal group loans | 12,036,923 | 843,700 | 352,469 | 235 | 13,233,327 | 100.00 | ||||||||||||||||||
| Total Residential Mortgage Loans | 12,036,923 | 843,700 | 352,469 | 235 | 13,233,327 | |||||||||||||||||||
| Consumer Loans | ||||||||||||||||||||||||
| Group | ||||||||||||||||||||||||
| Normal portfolio | 4,666,028 | 592,828 | — | 108 | 5,258,964 | 94.67 | ||||||||||||||||||
| Non-complying portfolio | — | — | 294,696 | 1,329 | 296,025 | 5.33 | ||||||||||||||||||
| Subtotal group loans | 4,666,028 | 592,828 | 294,696 | 1,437 | 5,554,989 | 100.00 | ||||||||||||||||||
| Total Consumer Loans | 4,666,028 | 592,828 | 294,696 | 1,437 | 5,554,989 | |||||||||||||||||||
| Total Individual Loans | 14,696,311 | 295,645 | 292,741 | 3,990 | 15,288,687 | 39.27 | ||||||||||||||||||
| Total Group Loans | 20,731,542 | 1,848,492 | 1,060,783 | 6,792 | 23,647,609 | 60.73 | ||||||||||||||||||
| Total Loans | Ch$ | 35,427,853 | Ch$ | 2,144,137 | Ch$ | 1,353,524 | Ch$ | 10,782 | Ch$ | 38,936,296 | 100.00 | % | ||||||||||||
| Percentage Individual classified | 41.48 | % | 13.79 | % | 21.63 | % | 37.01 | % | 39.27 | % | ||||||||||||||
| As of December 31, 2025 | ||||||||||||||||||||||||
| Stage 1 | Stage 2 | Stage 3 | Purchased or Originated Credit Impaired | Total Loans | Classification percentage | |||||||||||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||||||||||||||
| Bank’s Credit Rating: | ||||||||||||||||||||||||
| Commercial Loans | ||||||||||||||||||||||||
| Individual | ||||||||||||||||||||||||
| A1 | Ch$ | — | Ch$ | — | Ch$ | — | Ch$ | — | Ch$ | — | 0.00 | % | ||||||||||||
| A2 | 1,540,482 | — | — | — | 1,540,482 | 10.51 | ||||||||||||||||||
| A3 | 2,241,491 | — | — | — | 2,241,491 | 15.29 | ||||||||||||||||||
| A4 | 2,345,009 | 461 | — | — | 2,345,470 | 16.00 | ||||||||||||||||||
| A5 | 5,034,501 | 3,585 | — | — | 5,038,086 | 34.36 | ||||||||||||||||||
| A6 | 2,954,765 | 13,336 | — | — | 2,968,101 | 20.24 | ||||||||||||||||||
| Normal Portfolio | 14,116,248 | 17,382 | — | — | 14,133,630 | 96.40 | ||||||||||||||||||
| B1 | — | 115,254 | — | — | 115,254 | 0.79 | ||||||||||||||||||
| B2 | — | 63,059 | — | — | 63,059 | 0.43 | ||||||||||||||||||
| B3 | — | 34,571 | — | 152 | 34,723 | 0.24 | ||||||||||||||||||
| B4 | — | 19,840 | — | 72 | 19,912 | 0.14 | ||||||||||||||||||
| Substandard Portfolio | — | 232,724 | — | 224 | 232,948 | 1.60 | ||||||||||||||||||
| C1 | — | — | 97,384 | 596 | 97,980 | 0.67 | ||||||||||||||||||
| C2 | — | — | 49,663 | 392 | 50,055 | 0.34 | ||||||||||||||||||
| C3 | — | — | 20,600 | 10 | 20,610 | 0.14 | ||||||||||||||||||
| C4 | — | — | 43,804 | 1,050 | 44,854 | 0.31 | ||||||||||||||||||
| C5 | — | — | 25,365 | 488 | 25,853 | 0.18 | ||||||||||||||||||
| C6 | — | — | 54,177 | 1,323 | 55,500 | 0.36 | ||||||||||||||||||
| Non-Complying Portfolio | — | — | 290,993 | 3,859 | 294,852 | 2.00 | ||||||||||||||||||
| Subtotal individual loans | 14,116,248 | 250,106 | 290,993 | 4,083 | 14,661,430 | 100.00 | ||||||||||||||||||
| Group | ||||||||||||||||||||||||
| Normal portfolio | 4,034,811 | 434,266 | — | — | 4,469,077 | 91.43 | ||||||||||||||||||
| Non-complying portfolio | — | — | 418,038 | 1,002 | 419,040 | 8.57 | ||||||||||||||||||
| Subtotal group loans | 4,034,811 | 434,266 | 418,038 | 1,002 | 4,888,117 | 100.00 | ||||||||||||||||||
| Total Commercial Loans | 18,151,059 | 684,372 | 709,031 | 5,085 | 19,549,547 | |||||||||||||||||||
| Residential Mortgage Loans | ||||||||||||||||||||||||
| Group | ||||||||||||||||||||||||
| Normal portfolio | 12,565,482 | 944,665 | — | — | 13,510,147 | 96.95 | ||||||||||||||||||
| Non-complying portfolio | — | — | 424,322 | — | 424,322 | 3.05 | ||||||||||||||||||
| Subtotal group loans | 12,565,482 | 944,665 | 424,322 | — | 13,934,469 | 100.00 | ||||||||||||||||||
| Total Residential Mortgage Loans | 12,565,482 | 944,665 | 424,322 | — | 13,934,469 | |||||||||||||||||||
| Consumer Loans | ||||||||||||||||||||||||
| Group | ||||||||||||||||||||||||
| Normal portfolio | 4,817,731 | 652,401 | — | — | 5,470,132 | 94.80 | ||||||||||||||||||
| Non-complying portfolio | — | — | 298,905 | 1,261 | 300,166 | 5.20 | ||||||||||||||||||
| Subtotal group loans | 4,817,731 | 652,401 | 298,905 | 1,261 | 5,770,298 | 100.00 | ||||||||||||||||||
| Total Consumer Loans | 4,817,731 | 652,401 | 298,905 | 1,261 | 5,770,298 | |||||||||||||||||||
| Total Individual Loans | 14,116,248 | 250,106 | 290,993 | 4,083 | 14,661,430 | 37.35 | ||||||||||||||||||
| Total Group Loans | 21,418,024 | 2,031,332 | 1,141,265 | 2,263 | 24,592,884 | 62.65 | ||||||||||||||||||
| Total Loans | Ch$ | 35,534,272 | Ch$ | 2,281,438 | Ch$ | 1,432,258 | Ch$ | 6,346 | Ch$ | 39,254,314 | 100.00 | % | ||||||||||||
| Percentage Individual classified | 39.73 | % | 10.96 | % | 20.32 | % | 64.34 | % | 37.35 | % | ||||||||||||||
Classification of Loan Portfolio
Information about the classification of our loan portfolio (loan to customers) is presented in Note 11(d) to our audited consolidated financial statements as of and for the year ended December 31, 2025 included elsewhere in this annual report.
Analysis of Substandard and Past-due loans(1)
The following table analyzes our substandard loans, total past-due loans and allowances for loan losses existing at the dates indicated under IFRS Accounting Standards.
| Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||
| IFRS: | ||||||||||||
| Total Loans | Ch$ | 37,651,274 | Ch$ | 38,936,296 | Ch$ | 39,254,314 | ||||||
| Impaired loans | 1,204,191 | 1,353,524 | 1,432,258 | |||||||||
| Total past-due loans | ||||||||||||
| To the extent secured(2) | 242,636 | 307,050 | 338,456 | |||||||||
| To the extent unsecured | 349,317 | 315,390 | 382,547 | |||||||||
| Total past-due loans | Ch$ | 591,953 | Ch$ | 622,440 | Ch$ | 721,003 | ||||||
| Impaired loans as a percentage of total loans | 3.20 | % | 3.48 | % | 3.65 | % | ||||||
| Total past-due loans as a percentage of total loans | ||||||||||||
| To the extent secured(2) | 0.64 | 0.79 | 0.86 | |||||||||
| To the extent unsecured | 0.93 | 0.81 | 0.97 | |||||||||
| Total past-due loans as a percentage of total loans | 1.57 | % | 1.60 | % | 1.83 | % | ||||||
| Allowance for loan losses as a percentage of: | ||||||||||||
| Total loans | 1.89 | 1.78 | 1.81 | |||||||||
| Past-due loans | 119.97 | 111.41 | 98.75 | |||||||||
| Unsecured past-due loans | 203.31 | % | 219.87 | % | 186.12 | % | ||||||
| (1) | All references to Total Past-due loans in the table above refer as to Total Past-due loans (90 days or more) including interests and principal. |
| (2) | Collateral generally consists of mortgages on real estate, pledges of marketable securities, letters of credit or cash. |
As of December 31, 2025, our past-due loans (loans 90-days or more past due) amounted to Ch$721,003 million, which represented a 15.8% annual increase when compared to the Ch$622,440 million recorded in 2024. These figures translated into past-due ratios (loans 90-days or more past due over total loans) of 1.60% in 2024 and 1.83% in 2025. Several financial and economic factors underpinned the increase in delinquency across the industry, which also explained the annual increase in both the amount of our total past-due loans and delinquency ratios in 2025. In Retail Banking, the main factors behind the increase in delinquency for Personal Banking loans (consumer and residential mortgage loans), had to do with: (i) an unemployment rate that continued to be above the average levels seen in previous years, particularly before 2020, (ii) the effect of cumulative inflation on tradable and non-tradable goods that negatively impacted household disposable income, after almost four years in which 12-month inflation persistently remained above the Central Bank’s target range of 2% to 4%, and (iii) lagged effects of subdued economic dynamism after the COVID-19 pandemic, which has resulted in lower GDP growth potential for the entire economy and lower consumer confidence.
In the case of SME banking, the increase in past-due loans was primarily caused by (i) the end of state-guaranteed programs for support of these kinds of companies to deal with the aftermath of the COVID-19 pandemic while boosting economic reactivation, and (ii) the impact of lower-than-expected dynamism in projects and business carried out by wholesale banking customers, amid subdued economic growth, which also had a pass-through effect on SMEs’ business activity. Similarly, the higher delinquency in the wholesale banking segment in 2025 when compared to 2024 was driven by reduced business activity in some industries, which continued to be affected by the lagged effects of tempered economic activity on most economic sectors, except for the mining and energy industries, all of which resulted in worsened risk profiles for some wholesale banking customers.
For more information, see “Item 5. Operating Financial Review and Prospects—Results of Operations for the Years Ended December 31, 2022, 2023 and 2024—Provisions for Loan Losses” and “Item 3. Key Information—Risk Factors— Risks Relating to Our Operations and the Chilean Banking Industry—Our exposure to certain segments of the retail market could lead to higher levels of total past-due loans and subsequent charge-offs.”
Analysis of Allowances for Loan Losses
The following table analyzes our allowances for loan losses (excluding contingent loans and advances to banks) and changes in the allowances attributable to charge-offs, allowances established and allowances released:
| As of December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||
| IFRS: | ||||||||||||
| Allowances for expected credit losses at the beginning of the period | Ch$ | 821,609 | Ch$ | 710,187 | Ch$ | 693,434 | ||||||
| Charge-offs | (434,427 | ) | (445,198 | ) | (441,404 | ) | ||||||
| Debt Exchange | — | — | — | |||||||||
| Loan portfolio acquisition | — | — | — | |||||||||
| Sale or transfer of loans | (262 | ) | (410 | ) | — | |||||||
| Allowances for expected credit losses established | 322,099 | 420,651 | 462,277 | |||||||||
| Other impacts | 231 | 4,674 | 2 | |||||||||
| Foreign exchange adjustments | 937 | 3,530 | (2,306 | ) | ||||||||
| Allowances for expected credit losses at the end of the period | Ch$ | 710,187 | Ch$ | 693,434 | Ch$ | 712,003 | ||||||
| Allowances for expected credit losses at the end of period as a percentage of total loans | 1.89 | % | 1.78 | % | 1.81 | % | ||||||
| Changes in provisions for expected credit losses as a percentage of average loans | 0.55 | 0.92 | 1.00 | |||||||||
| Nonaccrual loans as a percentage of total loans | 0.01 | 0.00 | 0.01 | |||||||||
| Allowance for expected credit losses as a percentage of nonaccrual loans | 74.60 | 64.83 | 73.64 | |||||||||
| Ratios of charge-offs to average balance: | ||||||||||||
| Commercial loans | 0.50 | 0.50 | 0.44 | |||||||||
| Mortgage loans | 0.07 | 0.04 | 0.06 | |||||||||
| Consumer loans | 6.39 | 6.36 | 6.26 | |||||||||
| Total loans | 1.18 | % | 1.17 | % | 1.12 | % | ||||||
In 2023, the Chilean economy deepened the deceleration observed in the previous year by evidencing a 0.7% GDP expansion. This performance was evidenced by an annual contraction of 4.7% in household consumption and a modest expansion of 0.3% in private investment, which were partially offset by an improved trade balance (exports minus imports). Based on these drivers, our loan portfolio posted a moderate annual increase of 2.5% in nominal terms, reflecting a significant slowdown when compared to the 7.2% expansion recorded in 2022. The deceleration in our loan portfolio was primarily caused by a nominal annual contraction of 1.4% in commercial loans, largely due to the decline in private investment as a result of deteriorated business sentiment produced by the combination of diverse reforms that continued to be in pipeline, long-lasting approval processes for large-scale investment projects and long-term interest rates that remained at higher-than-normal levels. The decrease in commercial loans more than offset by: (i) a 7.8% expansion in residential mortgage loans, which was primarily influenced by a demand for housing that continued to be strong and decoupled from macroeconomic drivers, and (ii) a 6.3% annual expansion in consumer loans, which resulted from growth in credit cards related loans and deceleration in installment loans. In terms of allowances for expected credit losses, we experienced an annual decrease of Ch$111,422 million, from Ch$821,609 million in 2022 to Ch$710,187 million in 2023. This decline was the consequence of: (i) an annual increase of Ch$168,948 million in charge-offs, from Ch$265,479 million in 2022 to Ch$434,427 million in 2023, which was primarily concentrated in consumer loans, associated with loans for which we exhausted collection efforts while reaching the maximum delinquency periods as permitted by the regulation for purposes of writing off the past due loans, and (ii) a decrease of Ch$94,525 million in the amount of expected credit losses established (excluding expected credit losses for off-balance contingent loans, which are accounted as liability allowances), from Ch$416,624 million in 2022 to Ch$322,099 million in 2023, given the improvement evidenced in inputs used in our forward-looking models for expected credit losses on the grounds of better economic conditions expected for 2024 in comparison with the 2023. Based on these factors, our risk index decreased from 2.24% in 2022 to 1.89% in 2023.
In 2024, the Chilean economy experienced moderate growth compared to the previous year, reaching a 2.8% GPD expansion, driven by a 1.1% increase in household consumption, a 2.8% rise in government spending, and an improved balance of trade. These factors offset a 1.6% decline in private investment. Based on these drivers, our loan portfolio posted an annual increase of 3.4%, which was composed of a 7.5% increase in residential mortgage loans, followed by 4.6% and 0.6% nominal growth in consumer and commercial loans, respectively. From the perspective of residential mortgage loans, growth was driven by the dynamics seen in this lending market over the last decade, which is uncorrelated with the macroeconomic environment, together with tailored value offerings for targeted customer subsegments, all of which enabled us to enhance the origination of this lending product. For consumer loans, the main factors contributing to nominal growth were the increase in both credit card loans and installment loans. The latter was a result of offers designed to meet the financing needs of our customers throughout their entire life cycle. Lastly, the moderate increase in commercial loans was mainly due to the stagnation experienced by private investment, which continued to be impacted by uncertainty regarding economic reforms and longer-than-expected approval processes for large-scale investment projects. In terms of allowances for expected credit losses, we recorded an annual decrease of Ch$16,753 million, from Ch$710,187 million in 2023 to Ch$693,434 million in 2024. This decline was the consequence of: (i) annual charge-offs by Ch$445,198 million in 2024 (which was Ch$10,771 million above the Ch$434,427 million charge-off incurred in 2023), mainly as a result of past-due loan ratios that continued to be above normal levels, resulting in greater-than-normal charge-offs, particularly in consumer loans, and (ii) the establishment of provisions for expected credit losses amounting to Ch$420,651 million in 2024 (which is Ch$98,552 million above the Ch$322,099 million in 2023) that mainly reflects the impact of prevailing higher-than-expected past-due loan ratios on provisioning, which in turn has been to some degree offset by more favorable macroeconomic drivers for the individually-evaluated portfolio, in particular. Based on all of these factors, our risk index decreased from 1.89% in 2023 to 1.78% in 2024.
In 2025, the Chilean economy grew aligned with expectations and potential growth, as evidenced by a GDP expansion of 2.5% when compared to 2024. Although gross fixed capital formation grew 7.0% as of December 31, 2025—showing a sort of acceleration by the end of the year on the grounds of investment projects undertaken in the mining and energy industries—overall economic activity remained subdued, partly due to modest private consumption as evidenced by a 2.7% annual growth in household spending. Other components of GDP in 2025 also grew modestly, as reflected by: (i) an annual increase of 3.0% in fiscal spending, which resulted in a larger fiscal deficit than forecasted, and (ii) a trade balance that decreased as a result of a 10.5% increase in imports and a 4.6% growth in exports, due to greater imports of capital goods. In this environment, our loan portfolio recorded a 2.5% real annual contraction (0.8% nominal growth) as of December 31, 2025, compared to a year earlier. This decline was primarily driven by a real annual decrease of 6.2% (3.0% nominal contraction) in commercial loans, which was the result of subdued lending activity across the industry, particularly in the Wholesale Banking segment, together with early repayment of certain trade finance loans due to funding raised by companies in the capital markets and the maturity of some credits. On the other hand, we recorded real annual expansions of 1.7% (5.2% nominal growth) in residential mortgage loans and 0.4% (3.8% nominal growth) in consumer loans, on the grounds of both tailored value offerings for our higher-income customer base in the residential mortgage business and effective commercial strategies, risk origination protocols, and loyalty programs for targeted segments, which had a positive impact on both credit card-related loans and installment loans. In relation to allowances for expected credit losses, we recorded an annual increase of Ch$18,569 million, from Ch$693,434 million in 2024 to Ch$712,003 million in 2025. This change was primarily the consequence of the establishment of provisions for expected credit losses amounting to Ch$462,277 million in 2025 (which is Ch$41,626 million above the Ch$420,651 million in 2024) that mainly reflects the impact of macroeconomic drivers that are expected to evolve modestly over the next 12 months, particularly for the portfolio evaluated on a group basis. This effect, in turn, was to some extent offset by: (i) annual charge-offs that amounted to Ch$441,404 million in 2025, representing an annual decrease of Ch$3,794 million when compared to the Ch$445,198 million charge-off incurred in 2024, and (ii) a positive exchange rate effect that resulted in lower expected credit losses associated with loans denominated in foreign currency amounting to Ch$5,836 million in 2025 when compared to 2024. Based on these factors, our risk index increased from 1.78% in 2024 to 1.81% in 2025.
For allowances for expected credit losses associated with impaired loans and with non-impaired loans, see Note 11(d) to our audited consolidated financial statements as of and for the year ended December 31, 2025 included elsewhere in this annual report.
Loans are written-off when the collection efforts have been exhausted but not later than the maximum periods as follows:
| Type of Loan | Term | |
| Consumer loans – Secured and Unsecured | 6 months | |
| Other transactions – Unsecured | 24 months | |
| Commercial loans – Secured | 36 months | |
| Residential mortgage loans | 48 months | |
| Consumer leases | 6 months | |
| Other non-real estate lease transactions | 12 months | |
| Real estate leases (commercial or residential) | 36 months |
The following table sets forth our charge-offs for 2023, 2024 and 2025 by major economic sector and loan category:
| Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| (in millions of Ch$) | ||||||||||||
| IFRS: | ||||||||||||
| Commercial Loans: | ||||||||||||
| Agriculture | Ch$ | 13,018 | Ch$ | 12,610 | Ch$ | 9,554 | ||||||
| Mining | 1,078 | 1,040 | 1,065 | |||||||||
| Manufacturing | 5,135 | 7,876 | 5,708 | |||||||||
| Construction | 7,931 | 14,556 | 7,771 | |||||||||
| Commerce | 23,858 | 19,300 | 17,942 | |||||||||
| Transportation | 6,257 | 6,348 | 5,632 | |||||||||
| Financial services | 36,832 | 31,338 | 27,989 | |||||||||
| Community | 5,968 | 8,360 | 12,922 | |||||||||
| Commercial Loans: | Ch$ | 100,077 | Ch$ | 101,428 | Ch$ | 88,583 | ||||||
| Consumer loans | 325,626 | 338,227 | 344,542 | |||||||||
| Mortgage loans | 8,724 | 5,543 | 8,279 | |||||||||
| Total | Ch$ | 434,427 | Ch$ | 445,198 | Ch$ | 441,404 | ||||||
Loan recoveries are presented in Note 39 to our audited consolidated financial statements as of and for the year ended December 31, 2025 included elsewhere in this annual report. The table below sets forth a summary of loan recoveries by type of loan:
| Year ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| (in millions of Ch$) | ||||||||||||
| IFRS: | ||||||||||||
| Commercial loans | Ch$ | 19,660 | Ch$ | 19,752 | Ch$ | 18,127 | ||||||
| Mortgage loans | 11,716 | 6,941 | 7,981 | |||||||||
| Consumer loans | 32,880 | 38,620 | 45,275 | |||||||||
| Subtotal | 63,256 | 65,313 | 71,383 | |||||||||
| Recoveries and sales of loan reacquired from the Central Bank | ― | ― | ― | |||||||||
| Total | Ch$ | 63,256 | Ch$ | 65,313 | Ch$ | 71,383 | ||||||
| Total Recoveries as a percentage of average loans | 0.17 | % | 0.17 | % | 0.18 | % | ||||||
The following tables classify our past-due loans based on the borrower’s payment performance for each of the last two years:
| Year ended December 31, 2024 | ||||||||||||||||
| Commercial Loans | Consumer Loans | Residential Mortgage Loans | Total | |||||||||||||
| (in millions of Ch$) | ||||||||||||||||
| IFRS: | ||||||||||||||||
| Past due loans – 90 days to 6 months | Ch$ | 68,100 | Ch$ | 106,547 | Ch$ | 45,222 | Ch$ | 219,869 | ||||||||
| Past due loans – 6 months to 12 months | 87,108 | – | 51,246 | 138,354 | ||||||||||||
| Past due loans – 12 months to 24 months | 133,457 | – | 61,288 | 194,745 | ||||||||||||
| Past due loans – 24 months to 36 months | 36,024 | – | 25,457 | 61,481 | ||||||||||||
| Past due loans – 36 months to 48 months | – | – | 7,991 | 7,991 | ||||||||||||
| Past due Loans | Ch$ | 324,689 | Ch$ | 106,547 | Ch$ | 191,204 | Ch$ | 622,440 | ||||||||
| Year ended December 31, 2025 | ||||||||||||||||
| Commercial Loans | Consumer Loans | Residential Mortgage Loans | Total | |||||||||||||
| (in millions of Ch$) | ||||||||||||||||
| IFRS: | ||||||||||||||||
| Past due loans – 90 days to 6 months | Ch$ | 87,334 | Ch$ | 121,091 | Ch$ | 51,257 | Ch$ | 259,682 | ||||||||
| Past due loans – 6 months to 12 months | 110,861 | – | 56,997 | 167,858 | ||||||||||||
| Past due loans – 12 months to 24 months | 119,148 | – | 70,551 | 189,699 | ||||||||||||
| Past due loans – 24 months to 36 months | 47,987 | – | 40,320 | 88,307 | ||||||||||||
| Past due loans – 36 months to 48 months | – | – | 15,457 | 15,457 | ||||||||||||
| Past due Loans | Ch$ | 365,330 | Ch$ | 121,091 | Ch$ | 234,582 | Ch$ | 721,003 | ||||||||
Allocation of Allowances for Loan Losses
The following tables set forth the proportions of our required allowances for loan losses attributable to our commercial, consumer and residential mortgage loans under IFRS Accounting Standards as of the dates indicated.
| As of December 31, 2024 | ||||||||||||||||
| Allowance amount |
Allowance amount as a percentage of each type of loans (1) |
Allowance amount as a percentage of total loans |
Loans in category as percentage of total loans(2) |
|||||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||||||
| IFRS: | ||||||||||||||||
| Commercial loans | Ch$ | 254,568 | 1.26 | % | 0.65 | % | 51.74 | % | ||||||||
| Consumer loans | 403,234 | 7.26 | 1.04 | 14.27 | ||||||||||||
| Residential mortgage loans | 35,632 | 0.27 | 0.09 | 33.99 | ||||||||||||
| Total allocated allowances | Ch$ | 693,434 | 1.78 | % | 1.78 | % | 100.00 | % | ||||||||
| (1) | The last row represents the weighted average of allowance amount over total loans regardless of the type of loan. |
| (2) | Based on our loan classification. |
| As of December 31, 2025 | ||||||||||||||||
| Allowance amount |
Allowance amount as a percentage of each type of loans (1) |
Allowance amount as a percentage of total loans |
Loans in category as percentage of total loans(2) |
|||||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||||||
| IFRS: | ||||||||||||||||
| Commercial loans | Ch$ | 253,341 | 1.30 | % | 0.65 | % | 49.80 | % | ||||||||
| Consumer loans | 420,983 | 7.30 | 1.07 | 14.70 | ||||||||||||
| Residential mortgage loans | 37,679 | 0.27 | 0.11 | 35.50 | ||||||||||||
| Total allocated allowances | Ch$ | 712,003 | 1.83 | % | 1.83 | % | 100.00 | % | ||||||||
| (3) | The last row represents the weighted average of allowance amount over total loans regardless of the type of loan. |
| (4) | Based on our loan classification. |
Composition of Deposits and Other Commitments
The following table sets forth under IFRS Accounting Standards the composition of our deposits and similar commitments as of the dates indicated. See “Item 4. Information on the Company––Selected Statistical Information––Average Balance Sheets, Interest Earned on Interest Earning Assets and Interest Paid on Interest Bearing Liabilities” for the average rate paid on each of the following deposit categories.
| As of December 31, | ||||||||
| 2024 | 2025 | |||||||
| (in millions of Ch$) | ||||||||
| IFRS: | ||||||||
| Current accounts | Ch$ | 11,769,419 | Ch$ | 11,775,903 | ||||
| Other demand deposits | 2,861,378 | 3,015,967 | ||||||
| Savings accounts | 374,593 | 405,689 | ||||||
| Time deposits | 13,764,830 | 13,546,479 | ||||||
| Other term balance payables | 205,800 | 210,240 | ||||||
| Total | Ch$ | 28,976,020 | Ch$ | 28,954,278 | ||||
Maturity of Deposits
The following table sets forth information regarding the currency and maturity of our deposits on December 31, 2025, expressed in percentages, under IFRS Accounting Standards. UF-denominated deposits are similar to Chilean peso-denominated deposits in all aspects, except that the principal is readjusted periodically based on the value of the UF.
| As of December 31, 2025 | ||||||||||||||||
| Ch$ | UF | Foreign Currency | Total | |||||||||||||
| (in percentage) | ||||||||||||||||
| IFRS: | ||||||||||||||||
| Demand deposits | 54.77 | % | 18.12 | % | 46.41 | % | 51.09 | % | ||||||||
| Savings accounts | ― | 19.87 | ― | 1.40 | ||||||||||||
| Time deposits: | ||||||||||||||||
| Maturing within three months | 38.81 | 53.17 | 50.64 | 41.38 | ||||||||||||
| Maturing after three but within six months | 4.11 | 2.98 | 1.13 | 3.64 | ||||||||||||
| Maturing after six but within 12 months | 2.30 | 5.66 | 1.75 | 2.46 | ||||||||||||
| Maturing after 12 months | 0.01 | 0.20 | 0.07 | 0.03 | ||||||||||||
| Total time deposits | 45.23 | 62.01 | 53.59 | 47.51 | ||||||||||||
| Total deposits | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | ||||||||
The following table sets forth information regarding the currency and maturity of deposits in excess of U.S.$100,000 as of December 31, 2025, under IFRS Accounting Standards.
| As of December 31, 2025 | ||||||||||||||||
| Ch$ | UF | Foreign Currency | Total | |||||||||||||
| (in millions of Ch$) | ||||||||||||||||
| IFRS: | ||||||||||||||||
| Demand deposits | Ch$ | 5,772,737 | Ch$ | 39,102 | Ch$ | 1,344,737 | Ch$ | 7,156,576 | ||||||||
| Savings accounts | ― | 102,571 | ― | 102,571 | ||||||||||||
| Time deposits: | ||||||||||||||||
| Maturing within three months | 5,157,523 | 664,922 | 1,503,692 | 7,326,137 | ||||||||||||
| Maturing after three but within six months | 894,588 | 40,254 | 35,422 | 970,264 | ||||||||||||
| Maturing after six but within 12 months | 510,054 | 75,936 | 62,364 | 648,354 | ||||||||||||
| Maturing after 12 months | 575 | 1,853 | 1,185 | 3,613 | ||||||||||||
| Total time deposits | 6,562,740 | 782,965 | 1,602,663 | 8,948,368 | ||||||||||||
| Total deposits | Ch$ | 12,335,477 | Ch$ | 924,638 | Ch$ | 2,947,400 | Ch$ | 16,207,515 | ||||||||
The concept of uninsured deposits does not exist under Chilean regulatory reporting requirements. However, the General Banking Act does contemplate a guarantee by the Chilean Government of time deposits up to a certain amount. For more information, see “Item 4. Information on the Company––Regulation and Supervision––Deposit Insurance.”
Deposits in Foreign Countries
We also maintain deposits abroad, as needed to conduct our foreign trade transactions and manage liquidity. The table below lists the largest amounts of foreign deposits by country as of the dates indicated, under IFRS Accounting Standards:
| As of December 31, | ||||||||
| 2024 | 2025 | |||||||
| (in millions of Ch$) | ||||||||
| IFRS: | ||||||||
| Australia | Ch$ | 4,385 | Ch$ | 2,824 | ||||
| Brazil | 8 | ― | ||||||
| Canada | 4,149 | 6,215 | ||||||
| China | 1,940 | 5,270 | ||||||
| Germany | 30,622 | 9,778 | ||||||
| Japan | 17,764 | 12,116 | ||||||
| Mexico | 2,927 | 4,062 | ||||||
| Norway | 1,201 | 4,065 | ||||||
| Peru | 100 | ― | ||||||
| Sweden | 34,144 | 2,993 | ||||||
| United Kingdom | 20,508 | 7,979 | ||||||
| United States | 652,955 | 279,033 | ||||||
| Total | Ch$ | 770,703 | Ch$ | 334,335 | ||||
As of December 31, 2025, and as of the date of this annual report, we do not have exposures associated with deposits either in Ukraine, Russia, Venezuela, Iran or Israel.
Short-Term Borrowings
The principal categories of our short-term borrowings are amounts borrowed under foreign trade lines of credit, domestic inter-bank loans and repurchase agreements. The table below presents the amounts outstanding, the average balance and the weighted average nominal interest rate for each period indicated by type of short-term borrowing under IFRS Accounting Standards.
| As of December 31, 2023 | ||||||||||||
| Year-End Balance |
Average Balance |
Weighted Average Nominal Interest Rate (1) |
||||||||||
| (in millions of Ch$, except interest rate data) | ||||||||||||
| IFRS: | ||||||||||||
| Obligations by repurchase agreements | Ch$ | 157,173 | Ch$ | 141,312 | 10.74 | % | ||||||
| Central Bank borrowings | 4,348,581 | 2,951,973 | 0.50 | |||||||||
| Borrowings from domestic financial institutions | — | — | — | |||||||||
| Borrowings from foreign financial institutions | 1,012,134 | 905,685 | 4.66 | |||||||||
| Commercial Papers | 85,062 | 151,830 | 5.66 | |||||||||
| Other financial obligations | 339,305 | 144,565 | 1.71 | |||||||||
| Total short-term borrowings | Ch$ | 5,942,255 | Ch$ | 4,295,365 | 1.94 | % | ||||||
| (1) | Weighted Average Nominal Rate is calculated as the sum of total accrued interests for the type of security divided by the average balance for the same type of security during the reported period. |
| As of December 31, 2024 | ||||||||||||
| Year-End Balance |
Average Balance |
Weighted Average Nominal Interest Rate (1) |
||||||||||
| (in millions of Ch$, except interest rate data) | ||||||||||||
| IFRS: | ||||||||||||
| Obligations by repurchase agreements | Ch$ | 109,794 | Ch$ | 178,995 | 5.13 | % | ||||||
| Central Bank borrowings(2) | — | 1,396,608 | 0.50 | |||||||||
| Borrowings from domestic financial institutions | — | — | — | |||||||||
| Borrowings from foreign financial institutions | 1,103,468 | 1,201,803 | 5.36 | |||||||||
| Commercial Papers | — | 13,516 | 5.92 | |||||||||
| Other financial obligations | 284,479 | 176,458 | 1.69 | |||||||||
| Total short-term borrowings | Ch$ | 1,497,741 | Ch$ | 2,967,380 | 2.84 | % | ||||||
| (1) | Weighted Average Nominal Rate is calculated as the sum of total accrued interests for the type of security divided by the average balance for the same type of security during the reported period. |
| (2) | Central Bank borrowings refer to the FCIC obligation that was fully paid off on July 1, 2024. As a result, there was no outstanding balance as of December 31, 2024. |
| As of December 31, 2025 | ||||||||||||
| Year-End Balance |
Average Balance |
Weighted Average Nominal Interest Rate (1) |
||||||||||
| (in millions of Ch$, except interest rate data) | ||||||||||||
| IFRS: | ||||||||||||
| Obligations by repurchase agreements | Ch$ | 286,915 | Ch$ | 179,240 | 4.47 | % | ||||||
| Central Bank borrowings(2) | — | — | — | |||||||||
| Borrowings from domestic financial institutions | — | — | — | |||||||||
| Borrowings from foreign financial institutions | 1,296,751 | 1,362,732 | 4.54 | |||||||||
| Commercial Papers | 178,112 | 236,847 | 3.85 | |||||||||
| Other financial obligations | 367,323 | 131,914 | 2.18 | |||||||||
| Total short-term borrowings | Ch$ | 2,129,101 | Ch$ | 1,910,733 | 4.29 | % | ||||||
| (1) | Weighted Average Nominal Rate is calculated as the sum of total accrued interests for the type of security divided by the average balance for the same type of security during the reported period. |
The following table presents the maximum month-end balances of our principal sources of short-term borrowings during the periods indicated:
| Maximum 2023 month-end balance | Maximum 2024 month-end balance | Maximum 2025 month-end balance | ||||||||||
| (in millions of Ch$) | ||||||||||||
| IFRS: | ||||||||||||
| Obligations by repurchase agreements | Ch$ | 254,541 | Ch$ | 367,279 | Ch$ | 286,915 | ||||||
| Central Bank borrowings | 4,348,581 | 4,348,581 | — | |||||||||
| Borrowings from domestic financial institutions | 872 | 13,576 | — | |||||||||
| Borrowings from foreign financial institutions | Ch$ | 1,233,805 | Ch$ | 1,402,602 | Ch$ | 1,525,228 | ||||||
Minimum Capital Requirements
For information on capital adequacy requirements, compliance and capital availability, see “Item 4. Information on the Company—Regulation and Supervision—Capital Adequacy Requirements” and “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Capital Adequacy Requirements.”
Item 4A Unresolved Staff Comments
None.
Item 5 Operating and Financial Review and Prospects
OPERATING RESULTS
Introduction
The following discussion should be read in conjunction with, and is entirely qualified by reference to, our audited consolidated financial statements as of and for the year ended December 31, 2025 included elsewhere in this annual report and “Item 4. Information on the Company—Selected Statistical Information.” Certain amounts (including percentage amounts) that appear in this annual report may not total due to rounding.
Unless otherwise indicated, the financial information included in this annual report with respect to 2023, 2024 and 2025 has been derived from financial statements that have been prepared in accordance with IFRS Accounting Standards as issued by the IASB. See Note 2(a) to our audited consolidated financial statements as of and for the year ended December 31, 2025 included elsewhere in this annual report. IFRS Accounting Standards differs in certain significant respects from Chilean GAAP. As a result, our financial information presented under IFRS Accounting Standards is not directly comparable to any of our financial information presented under Chilean GAAP. Accordingly, readers should avoid such comparison.
Overview
We are a leading bank within the Chilean financial system, providing a broad range of financial products and services to individual and corporate customers who are primarily located in Chile. Accordingly, our financial condition, results of operations and our ability to achieve our strategic business goals could be adversely affected by changes in Chile’s economic conditions and the resulting effects on macroeconomic indicators (such as interest rates, inflation and GDP growth, among others), modifications of non-economic policies implemented by the Chilean Government that can affect private sector activities, or other political and economic developments in Chile, as well as regulatory changes or administrative practices of Chilean authorities over which we have no control. See “Item 3. Key Information—Risk Factors—Risks Relating to Our Operations and the Chilean Banking Industry—The results of our operations are affected by interest rate volatility and inflation,” “Item 3. Key Information—Risk Factors—Risks Relating to Chile—Currency fluctuations could adversely affect the value of our ADSs and any distributions on the ADSs” and “Item 3. Key Information—Risk Factors—Risks Relating to Chile—Our growth and profitability depend on the level of economic activity in Chile.”
Chilean Economy
In 2023, as reported by the Chilean Central Bank, the Chilean economy continued to decelerate as in 2022, mainly due to the poor economic performance recorded in the first semester when GDP decreased 0.2% compared to the same period of 2022. Such a decrease derived from a sharp decline in total consumption that was to some extent offset by moderate growth in private investment. The second half of the year reflected a more dynamic economic environment, mainly due to the ease of the monetary policy after inflation seemed to return to mid-term objectives. Based on these trends, the Chilean GDP economy grew 0.7% in 2023, which was primarily steered by an annual contraction of 4.7% in household consumption. The economy’s growth was adversely affected by: (i) the normalization of liquidity, particularly among individuals, following the end of the monetary supply excess seen during the pandemic as a result of special measures deployed by the Chilean Congress and the Government, which caused a sharp increase in disposable income during 2021 and 2022 while boosting household spending, and (ii) a strict monetary adjustment process to control inflation that took longer-than-expected and resulted in higher-than-normal interest rates throughout the year, as evidenced by a monetary policy rate that evolved from 11.25% in December 2022 (the highest since 1998) to 8.25% in December 2023, and (iii) an increase in unemployment that averaged 8.7% in 2023 when compared to 7.9% in 2022. Private investment (gross fixed capital formation), in turn, recorded a modest annual increase of 0.3% in 2023, in line with a business sentiment that remained negative during the year due to an uncertain political and economic outlook derived from: (i) the national referendum on December 17, 2023, by means of which the Chilean people rejected the new constitution draft, (ii) reforms sponsored by the government in different economic fields, including the pension system, the healthcare system and the tax system, (iii) lengthy approval procedures for large-scale projects, and (iv) high interest rates, which resulted in increased costs for capital expenditures. On the other hand, the Chile’s trade balance contributed positively to GDP growth, mainly due to the decrease of 11.1% recorded by total imports, while exports remained stable by recording an annual increase of 0.3%. To a lesser degree, the fiscal spending continued to slow down by recording an annual expansion of 2.3% in 2023, because of the government attempts to improve the fiscal balance after periods of higher-than-expected spending intended to cover social needs during and immediately after the pandemic.
In 2024, the Chilean economy showed some signs of recovery from the severe slowdown seen in 2023 by growing slightly above the economy’s growth potential of approximately 2.0% in the long term. According to the Chilean Central Bank, Chilean GDP expanded 2.8% in 2024, which was marked by a moderate expansion in household consumption and a deeper contraction of private investment (gross fixed capital formation). In fact, private consumption grew 1.1% in 2024, after the severe contraction seen the previous year, which was the result of certain market factors that continued returning to more normalized levels, such as: (i) short-term interest rates that declined in line with the easing process started by the Central Bank in July 2023, as evidenced by a monetary policy interest rate that decreased from 8.25% in December 2023 to 5.0% in December 2024, which resulted in lower borrowing costs for individuals while promoting the demand for durable goods that increased 2.9% in 2024, (ii) an improved labor market as demonstrated by a decline in the average unemployment rate from 8.7% in 2023 to 8.5% in 2024, and (iii) inflation rate that remained above the two-year target range set by the Central Bank (between 2% and 4%), but seems to be more controlled by staying below the 12-month double-digit inflation seen in 2022 and part of 2023. These factors, however, were to some degree mitigated by consumer confidence that remained pessimistic, as reflected by the Consumer Confidence Index conducted by IPSOS, although the perspective on the economic outlook for coming years tended to improve over 2024. Also, private investment contracted 1.6% in 2024 due to several factors, including: (i) long-term interest rates that remained above the levels seen in pre-pandemic years, (ii) negative business sentiment, as measured by the monthly business confidence indicator (Índice Mensual de Confianza Empresarial – IMCE), given the uncertainty generated by both reforms on diverse economic areas and the extensive administrative procedures required to approve large-scale investment projects, (iii) deteriorated financial conditions in certain industries associated with the construction sector (real estate and construction), which actually resulted in lower investment in construction, together with the 13.8% depreciation of the Chilean peso against the U.S. dollar, which also affected the investment in machinery and equipment. Other factors that explained the GDP expansion in 2024 were: (i) an annual increase of 2.8% in government spending, primarily associated with public policies aimed at satisfying increasing social demands, and (ii) an improved trade balance due to exports that increased 7.2% compared to imports that increased 2.1% both in 2024, based on marginally improved terms of trade, particularly fostered by higher copper prices and lower average crude oil prices in the year.
In 2025, the Chilean economy grew aligned with expectations and potential growth, as evidenced by a GDP expansion of 2.5% when compared to 2024. In contrast to the previous year, economic growth was more focused on domestic demand and gross fixed capital formation (“private investment”), in particular by the end of the year. In this regard, according to the Chilean Central Bank, private investment grew 7.0% in real terms in 2025. According to the Central Bank, this increase in investment was primarily the result of specific investment projects undertaken in the mining and energy sectors and some positive externalities resulting in more dynamism in the construction sector and the engineering services industry. This is more evident when analyzing the overall business sentiment, as measured by the Monthly Business Sentiment Index “IMCE” (Índice Mensual de Confianza Empresarial) and reported by the Central Bank, which remained negative throughout 2025 for all industries other than mining. Thus, capital expenditures in these sectors would have continued to be negatively affected by economic and political uncertainty, as well as unpredictable approval processes for large-scale projects. In addition, household consumption increased 2.7% in 2025. Although still moderate, this figure represented an improvement when compared to 2024, and may have been prompted by: (i) lower inflation, as reflected by a 3.4% annual CPI variation in 2025 as compared to 4.5% in 2024, which benefited the real household disposable income, (ii) short-term interest rates that continued to decrease from 5.0% to 4.5% in 2025, on the grounds of monetary policy, and which resulted in lower interest rates paid on short-term loans, primarily revolving loans and had a positive effect on consumption, (iii) an average unemployment rate that –yet still elevated– remained flat on an annual basis at 8.5% on average, and (iv) a steady improvement in consumer confidence –although remaining in negative territory– as measured by the Consumer Confidence Index conducted by IPSOS and reported by the Central Bank, particularly over the second half of the year, on the grounds of expectations of economic recovery over the coming years. Also, GDP growth in 2025 was the consequence of: (i) an annual increase of 3.0% in fiscal spending, which resulted in increased fiscal deficit than forecasted, and (ii) a trade balance that decreased as a result of a 10.5% increase in imports and a 4.6% growth recorded by exports, primarily as a consequence of increased imports associated with capital goods that were partly used for the investment projects that fostered private investment.
Inflation
In the past, Chile has experienced high levels of inflation that affected private consumption, consumer sentiment, financial conditions and the results of various companies. Nevertheless, since the 1990s, inflation has kept under control through responsible monetary policy carried out by an independent Central Bank and the adoption of a successful inflation target policy. Thus, in Chile inflation is correlated to both local economic dynamics and external factors.
After a CPI increase of 12.8% in 2022, in 2023, inflation gradually began to converge to the mid-point of the target range of 2.0% to 4.0% set by the Chilean Central Bank. Accordingly, on December 31, 2023, the inflation rate, measured as 12-month CPI variation, was 3.9%. This decline had to do with various factors, such as: (i) the lagged effects of the tightening monetary policy deployed by the Chilean Central Bank that resulted in a monetary policy interest rate that remained well above the neutral level for longer-than-expected although evolving from 11.25% in December 2022 to 8.25% in December 2023, which had a direct effect on household spending by increasing the cost of borrowing and promoting short-term saving, particularly among individuals, (ii) the average appreciation of 3.5% of the Chilean peso against the U.S. dollar, exchange rate when compared to 2022, which translated into a favorable pass-through effect to local prices, and (iii) lower inflationary pressures from external price that benefited prices of imported goods.
In 2024, the inflation rate reached 4.5% measured as a 12-month variation of the CPI, which represents an increase when compared to the 3.9% annual inflation recorded in 2023. The evolution of inflation in 2024 was marked by non-recurrent factors that resulted in the overall annual increase, particularly concentrated in the second half of the year. The 12-month inflation rate stayed inside the two-year monetary policy range of 2% to 4% all through the first half of 2024 by averaging 3.4%, which resulted in a very aggressive monetary stance by the Central Bank to cut the reference interest rate. However, over the second half of the year 12-month inflation averaged 4.4% and, therefore, hovered above the upper boundary of the Central Bank’s target range, due to diverse factors, including: (i) the depreciation of the Chilean peso that reached 13.8% in 2024, which has a pass-through effect on local prices via imported goods, (ii) increased electricity bills, which had been postponed due to the pandemic for approximately three years and would explain – according to the Central Bank – approximately 150 basis points of inflation between mid-2024 and mid-2025, and (iii) the increased labor costs as a result of some public policies that resulted in higher minimum wages, which impact the whole value chain, and (iv) remaining disruptions in the international supply chain, with increased shipping costs for imported goods and commodities. Based on the above, we understand that the price level of both tradable and non-tradable goods behaved in line with headline inflation. Also, regardless of the effect of volatile items, such as food and energy, core inflation ended the year at 4.0%, just in the upper limit of the Central Bank’s target range, which underscores such factors.
During 2025, the inflation rate continued to converge to the midpoint of the two-year target range of 2% to 4% as set by the Chilean Central Bank. Actually, the CPI increased 3.4% in 2025, which is below 4.5% recorded in 2024. Although inflationary pressures remained for longer than expected, prices moderated by the second half of the year, primarily as a result of a steady decrease recorded in both core inflation and volatile prices. Thus, inflation associated with tradable goods declined, primarily on the grounds of: (i) the 9.5% appreciation experienced by the Chilean peso against the U.S. dollar between December 2024 and December 2025, as a result of diverse factors, including the sharp increase in copper price and lower uncertainty on the local political outlook, all of which benefited prices indexed to the exchange rate, (ii) the potential impact of international trade redirection as a result of increased tariffs for certain trade players in specific destinations, particularly in the U.S., (iii) according to the Central Bank, an unusual effect of some food prices, such as fruits and vegetables, that significantly declined over the year, (iv) a monetary policy interest rate that remained above neutral levels in order to ensure the convergence of inflation to the target range, and (v) moderate household consumption growth over the year. Therefore, the annual inflation rate for tradable goods decreased from 4.2% in December 2024 to 2.7% in December 2025. To a lesser degree, inflation for non-tradable goods decreased from 5.0% in December 2024 to 4.4% in December 2025, which is mainly explained by: (i) a smoother convergence to the target range due to energy prices that continued to be affected by the adjustment in electricity bills, and (ii) prices of services that reflected the impact of increased labor costs, associated with recent labor-related laws (increased minimum wages and lowered working hours).
An increase in inflation rates could adversely affect the Chilean economy and have an adverse effect on our business, financial condition and results of operations. Our results of operations reflect the effect of inflation in the following ways:
| ● | a substantial portion of our assets and liabilities are denominated in UFs, a unit that is indexed daily to reflect inflation recorded in the previous month, with the net gain or loss resulting from such indexation reflected in income; and |
| ● | the interest rates earned and paid on peso-denominated assets and liabilities to some degree reflect inflation and expectations regarding inflation. |
UF Denominated Assets and Liabilities. The UF is revalued in monthly cycles. On each day in the period beginning the tenth day of the current month through the ninth day of the next month, the nominal peso value of the UF is indexed up (or down in the event of deflation) in order to reflect each day a pro rata amount of the prior calendar month’s change in the CPI as published by the Chilean National Statistics Institute. One UF was equal to Ch$38,416.69 as of December 31, 2024 and Ch$39,727.96 as of December 31, 2025. The effect of any changes in the nominal peso value of our UF denominated assets and liabilities are reflected in our results of operations as an increase (or decrease, in the event of deflation) in interest revenue and expense. Our net interest income will be positively affected by inflation (and negatively affected by deflation) to the extent that our average UF denominated assets exceed our average UF denominated liabilities, while our net interest income will be negatively affected by inflation (and positively affected by deflation) when average UF denominated liabilities exceed our average UF denominated assets. Our average UF denominated assets exceeded our average UF denominated liabilities by Ch$10,404,503 million (U.S.$10,459.41 million) as of December 31, 2024 and by Ch$11,374,951 million (U.S.$12,633.22 million) as of December 31, 2025. These figures exclude positions in derivatives. See “Item 4. Information on the Company—Selected Statistical Information.”
Peso-Denominated Assets and Liabilities. Interest rates in Chile tend to reflect the prevailing inflation rate and expectations regarding future inflation. The sensitivity of our peso denominated interest earning assets and interest-bearing liabilities to the inflation rate may vary. See “Item 5. Operating and Financial Review and Prospects—Operating Results—Overview Interest Rates.” We maintain a substantial amount of noninterest-bearing, peso-denominated current accounts and other demand deposits. The ratio of such deposits to average interest-bearing peso denominated liabilities was 94% in the year ended December 31, 2024 and 102% in the year ended December 31, 2025. Since a large part of such deposits are not indexed to inflation, even a slight decline in the rate of inflation may adversely affect our net interest margin on assets funded with such deposits and even a slight increase in the rate of inflation may increase the net interest margin on such assets. See “Item 4. Information on the Company—Selected Statistical Information—Interest Earning Assets and Net Interest Margin.”
Interest Rates
Interest rates earned and paid on our assets and liabilities reflect in part, inflation and expectations regarding future inflation, shifts in short-term interest rates related to the Central Bank’s monetary policies and movements in long-term real rates. The Central Bank manages short-term interest rates in order to achieve its long-term inflation target and provide the economy with financial stability.
Since our liabilities generally re-price faster than our assets, changes in the rate of inflation or short-term interest rates are reflected in the nominal interest rates we pay on our liabilities before they are reflected in the nominal interest rates we earn on our assets. Accordingly, our net interest margin on assets and liabilities is usually adversely affected in the short-term by increases in short-term nominal interest rates and benefits in the short-term from decreases in short-term nominal interest rates, although the existence of noninterest-bearing peso-denominated demand deposits tends to mitigate both effects. See “—Inflation—Peso-Denominated Assets and Liabilities.” In addition, because our peso-denominated liabilities have relatively short re-pricing periods, those liabilities generally are more sensitive to changes in inflation or short-term interest rates than our UF-denominated liabilities. As a result, during periods when current inflation exceeds the previous month’s inflation, customers often switch funds from peso-denominated deposits to more expensive UF-denominated deposits, thereby adversely affecting our net interest margin.
Following the effects of the economic downturn caused by COVID-19 pandemic, by December 31, 2020, the Chilean Central Bank reduced the monetary policy interest rate from 1.75% (prior to the pandemic) to 0.5% in order to ensure liquidity in the local economy by providing low-cost funding to local banks and promote lending and household consumption. The monetary policy interest rate remained at 0.5% until July 2021. From that moment on, the Central Bank implemented a series of increases with the aim of controlling the inflationary pressures that arose in the local economy as a result of non-recurrent factors (pension funds withdrawals and soaring external prices) taking the reference rate to 4.00% by December 2021 and to 11.25% in December 2022. In July 2023, when 12-month inflation began to show clear signs of retreat, the Chilean Central Bank began to ease the monetary policy, which translated into successive cuts to the reference rate, which reached 8.25% in December 2023. In 2024, the Central Bank continued to deploy a more expansionary monetary policy although at a more measured pace than expected, since 12-month inflation began to rise over the second half of 2024, primarily caused by revised energy prices as a result of adjustments in electricity bills, after staying within the two-year inflation target range of 2% to 4% during the first half of the year. Based on this evidence, the Central Bank carried out four cuts to the monetary policy interest rate, which led the reference rate from 8.25% in December 2023 to 5.0% in December 2024. In 2025, the Central Bank maintained an easing policy to return the monetary policy interest rate to its neutral level. However, some inflationary pressures remained, particularly in the first half of the year due to the increase in electricity bills reflecting the increase in energy prices that had been postponed as a mitigation measure for families in the context of the economic downturn caused by the COVID-19 pandemic. Consequently, the Central Bank carried out only two cuts to the monetary policy interest rate over the year, decreasing from 5.0% on December 31, 2024, to 4.5% as of December 31, 2025.
As of March 31, 2026, the monetary policy interest rate remained at 4.5%. For 2026, the Chilean Central Bank has anticipated the monetary policy interest rate would converge to neutrality to the extent the inflation rate remains within the two-year target range, as expected by market agents in the baseline scenario. However, given the developments in the Middle East and the potential impact of higher oil prices and potential disruptions to the global supply chain on local inflation, the Chilean Central Bank has mentioned that it could reassess the monetary stance.
According to information published by the Central Bank, the average annual short-term nominal interest rate, based on the rate paid by Chilean financial institutions for 90 to 360 days Chilean peso-denominated deposits, was 9.83% in 2023, 5.74% in 2024 and 4.69% for 2025, levels that have been highly influenced by the trend followed by the monetary policy interest rate, which averaged 10.5% in 2023, 6.2% in 2024 and 4.9% in 2025. For the same reason, the average interest rate paid by Chilean financial institutions for 90 to 360 days Chilean peso-denominated deposits in the three-month period ended on March 31, 2026 was 4.39%.
The average annual long-term nominal interest rate, based on the interest rate of the ten-year Chilean peso-denominated bonds in the secondary market, issued by both the Central Bank and the Chilean Government, was 5.66% in 2023, 5.79% in 2024 and 5.68% in 2025. In 2025, the path followed by long-term nominal interest rates was characterized by increased confidence in the Central Bank’s ability to return the inflation rate towards the two-year target range of 2% to 4%, and more specifically to anchor inflation at the midpoint of such range in the medium- and the long-term. Accordingly, the evolution of long-term interest rates in 2025 was highly correlated with the trend followed by 12-month inflation over the year. Thus, during the first half of the year, as 12-month inflation stayed above the upper boundary of the target range, the interest rate of the ten-year Chilean peso denominated bonds averaged 5.83%. Instead, in the second half of the year, when the annual inflation rate began to show an overall downward trend and finally entered into the target range, the interest rate of the ten-year Chilean peso denominated bonds averaged 5.54%. Accordingly, the interest rate of ten-year Chilean peso denominated bonds, issued by both the Central Bank and the Chilean Government, decreased from 5.76% in December 2024 to 5.36% in December 2025, while reaching 5.56% on average for March 2026. In the three-month period ended on March 31, 2026, the interest rate for the same Central Bank and Chilean Government bonds averaged 5.40%.
Chilean Stock Market
During 2025, the S&P/CLX IPSA, a selective stock market price index composed of the 30 most traded Chilean stocks, showed a steady upward trend following the recovery experienced in 2023 and 2024. As of December 30, 2025 (last trading date), the S&P/CLX IPSA reached a level of 10,481 points, which represented an annual increase of 56.2% as compared to the 6,710.0 points recorded as of December 30, 2024 (last trading date), according to data provided by Bloomberg. During 2025 the Chilean stock market performed above expectations while reaching historic highs, on the grounds of diverse factors, including: (i) interest rates that declined from 5.0% in December 2024 to 4.5% in December 2025 as a consequence of the continuation of a monetary easing policy by the Central Bank, as inflation finally converged to the medium-term target range, and long-term interest rates that also declined as inflation expectations became anchored to 3% in the long-run, (ii) valuation terms that seemed to be below medium-term comparables for the local stock market, from which an upside correction was expected by market agents, (iii) a combination of an improved economic outlook and the recovery in private investment, particularly in the mining and the energy sector, which was to some degree supported by the rally experienced by the copper price over the year, (iv) market agents’ optimism on the upcoming political cycle, which would be characterized by market- and investment-oriented reforms, (v) the approval of a pension reform that reaffirmed the role of pension fund managers (AFPs) as part of the pension system while focusing on increasing saving in individual accounts, and (vi) reforms introduced to the permits system in some economic sectors, which should allow to accelerate investment in the future.
During the three-month period ended March 31, 2026, the Chilean stock market displayed a positive overall performance, as reflected by the evolution of the S&P/CLX IPSA, which ended the quarter at 10,640.1 points, representing a year-to-date growth of 1.5% when compared to December 30, 2025 (the last trading date of the year). Although, in general, the Chilean equity market showed a positive overall trend during the quarter, market dynamics were increasingly shaped by heightened uncertainty, particularly toward the end of February, regarding the escalation of the war between the United States, Israel, Iran and other countries of the Middle East. In fact, the conflict resulted in higher volatility across global equity markets, including Chile’s, primarily driven by a sharp increase in oil prices and renewed inflation concerns that could lead to tighter monetary policy stances. Amid this backdrop, the S&P/CLX IPSA showed resilience in March 2026, supported by stocks in certain sectors, although short-term corrections took place due to global market concerns.
Foreign Currency Exchange Rates
A portion of our assets and liabilities are denominated in foreign currencies, principally U.S. dollars. In the past, we have maintained and may continue to maintain gaps between the balances of such assets and liabilities. This gap includes assets and liabilities denominated in foreign currencies and assets and liabilities denominated in Chilean pesos that contain repayment terms linked to changes in foreign currency exchange rates. However, we generally offset this gap by means of hedging derivative positions. Because foreign currency denominated assets and liabilities, as well as interest earned or paid on such assets and liabilities and gains (losses) realized upon the sale of such assets, are translated into pesos in preparing our audited consolidated financial statements, our reported income is affected by changes in the value of the peso with respect to foreign currencies, primarily the U.S. dollar. Adjustments to U.S. dollar-indexed assets are reflected as adjustments in net interest earnings and offset results in our foreign exchange position. See “Item 3. Key Information—Risk Factors—Risks Relating to Chile—Currency fluctuations could adversely affect the value of our ADSs and any distributions on the ADSs.”
Critical Accounting Policies
The preparation of our consolidated financial statements under IFRS Accounting Standards requires management to make certain estimates and assumptions, as some of the amounts reported in the financial statements are related to matters that are uncertain or require modeling. Some of these estimates include, but are not limited to, the determination of allowances for expected credit losses, the calculation of fair value of certain financial instruments, the estimate of deferred tax assets or liabilities, among others. Although we evaluate these estimates, assumptions and models on an ongoing basis, they could change from time to time, which may have a material impact on our financial condition or results of operations. Also, actual results may differ from prior estimates and assumptions, and if these differences were significant enough, our reported results of operations could be affected materially.
We believe the following are the most critical areas that require considerable management judgment or involve a higher degree of complexity in the application of the accounting policies that currently affect our financial condition and results of operations.
For more information on the accounting policies used for the preparation of our financial statements, see Note 2 to our audited consolidated financial statements as of and for the year ended December 31, 2025, which are included in this annual report.
Allowances for Loan Losses
IFRS 9 establishes requirements for the classification and measurement of financial assets by introducing an approach based on both the business model used by the company or bank to manage financial assets and the characteristics of assets’ contractual flows.
In terms of impairment, IFRS 9 establishes a single model to be applied to all financial instruments, which requires timely recognition of the expected credit losses (“ECLs”) by introducing a “prospective” analysis for their calculation.
For assets measured at either amortized cost or measured at FVOCI, including loan commitments and contingent loans, this approach requires a timely recognition of ECLs, which may be accounted as: (i) a loss allowance for assets measured at amortized cost, which is deducted from the actual balance of these assets, (ii) a liability provision for contingent loans, or (iii) a profit or loss in the income statement for financial assets that are measured at FVOCI.
IFRS 9 uses a dual approach for determining loan loss allowances depending on the stage at which the asset is classified in light of its credit risk or changes in credit risk. Thus, loan loss allowances based on ECLs may be measured by considering: (i) a 12-month time horizon or (ii) a lifetime horizon. For these purposes, assets are classified as follows:
| ● | Stage 1: Assets with no significant increase in risk. These are defined as financial assets that have not significantly deteriorated in terms of credit quality as compared to their credit risk evaluation when originated. In this case, ECLs are computed and recognized by considering a 12-month timeframe. This calculation also includes those assets that have been reclassified from Stage 2. |
| ● | Stage 2: Assets with significant increase in risk. These are defined as financial assets that show a significant increase in credit risk as compared to their credit risk evaluation when originated. In this case, ECLs are computed for the whole maturity of the financial instrument by considering lifetime expected loss. For these purposes, Stage 2 also includes those assets with credit risk improvements that have been reclassified from Stage 3. |
| ● | Stage 3: Assets objectively impaired. These are defined as financial assets that show objective evidence of impairment at the end of the reported period. In this case, ECLs are computed for the whole maturity of the financial instrument by considering lifetime expected loss. |
| ● | POCI: Purchased or Originated Credit Impaired. These are defined as financial assets that are credit impaired on initial recognition. POCI assets are recorded at fair value at original recognition and interest income is subsequently recognized based on a risk-adjusted Effective Interest Rate (“EIR”). ECLs are only recognized or released to the extent that there is a subsequent change in the expected credit losses. |
Expected Credit Losses
The expected credit loss is the probability-weighted estimate of credit losses, i.e., the present value of all cash losses. A cash loss is the difference between the cash flows that are due to an entity and the cash flows that the entity expects to receive. The three main parameters used for the calculation of the expected credit losses are as follows:
| ● | Probability of Default (PD): The PD is an estimate of the likelihood of a client or counterparty to fail in meeting its legal obligation of payment at a certain time horizon. The default event only occurs in the event that the asset belongs to the Bank and the counterparty has not complied with the payment of installments as agreed by contract. |
| ● | Loss Given Default (LGD): The LGD is the mathematical expectation of the percentage loss that would be incurred if an asset defaults and is expressed as a percentage of the exposure at the time of default. |
| ● | Exposure at Default (EAD): The EAD is an estimate of the exposure at the expected date of default, which takes into account expected changes in the exposure after the reporting date, including repayments of principal and interest, whether scheduled by contract or not, expected drawdowns on committed facilities, and accrued interest on unpaid installments. |
| ● | Credit Conversion Factor (CCF): The CCF is the percentage amount used to estimate the EAD related to off-balance sheet items, such as contingent loans or credit commitments. |
This policy involves significant management judgment in determining model parameters, such as PD, LGD, and EAD which are each based on historical performance, borrower characteristics and incorporate forward-looking macroeconomic factors. Therefore, minor changes in assumptions on the economic outlook, such as GDP growth, inflation rate, unemployment rate or interest rates, among others, may materially impact the estimates of expected credit losses and therefore our results of operations. The inherent uncertainty, reliance on internal models, and sensitivity to scenario weights make expected credit losses a critical accounting estimate.
Fair Value Estimates for Financial Assets and Liabilities
IFRS 13 defines “fair value” as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. IFRS 13 seeks to increase consistency and comparability in fair value measurements and related disclosures through a ‘fair value hierarchy.’ The hierarchy categorizes the inputs used in valuation techniques into three levels. The hierarchy gives the highest priority (Level 1) to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs (Level 2 and Level 3). Instruments classified in Level 2 and Level 3 of the fair value hierarchy rely heavily on modeling and assumptions. Reasonably, possible changes in key financial inputs may materially impact our results of operations, other comprehensive income, and equity accounts, which makes this a critical accounting policy.
The Bank uses valuation techniques as appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. The objective of using a valuation technique is to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. Three widely used valuation techniques are:
| ● | Market approach – uses prices and other relevant information generated by market transactions involving identical or comparable (similar) assets, liabilities, or a group of assets and liabilities (e.g., a business). |
| ● | Cost approach – reflects the amount that would be required currently to replace the service capacity of an asset (current replacement cost). |
| ● | Income approach – converts future amounts (cash flows or income and expenses) to a single current (discounted) amount, reflecting current market expectations about those future amounts. |
In some cases, a single valuation technique will be appropriate, whereas in others multiple valuation techniques will be appropriate. The objective of a fair value measurement is to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. A fair value measurement requires an entity to determine all of the following:
| ● | The particular asset or liability that is the subject of the measurement (consistently with its unit of account). |
| ● | The principal (or most advantageous) market for the asset or liability. |
| ● | The valuation technique(s) appropriate for the measurement, considering the availability of data with which to develop inputs that represent the assumptions that market participants would use when pricing the asset or liability and the level of the fair value hierarchy within which the inputs are categorized. |
For more information regarding the accounting principles associated with the valuation of financial assets and liabilities, see Note 2(h) to our audited consolidated financial statements as of and for the year ended December 31, 2025 appearing elsewhere in this annual report. Also, for a further description of our internal fair value classification, see Note 41 to our audited consolidated financial statements as of and for the year ended December 31, 2025 appearing elsewhere in this annual report.
Deferred Tax Assets
The Bank records, when appropriate, deferred tax assets and liabilities for the estimated future tax effects attributable to differences between the carrying amount of assets and liabilities and their tax bases. The measurement of deferred tax assets and liabilities is based on the tax rate, in accordance with the applicable tax laws, using the tax rate that applies to the period when the deferred asset and liability will be settled. The future effects of changes in tax legislation or tax rates are recorded in deferred taxes beginning on the date on which the law is enacted or substantially enacted.
The recognition of deferred tax assets depends on management's judgment regarding future taxable income and the probability of realizing tax benefits. This approach relies on assumptions about business performance, economic conditions, changes in the tax law, and the timing of reversal of temporary differences. Therefore, changes in these assumptions may have a material impact on deferred tax balances and our results of operations, which makes this a critical accounting policy.
Results of Operations for the Years Ended December 31, 2023, 2024 and 2025
The consolidated financial information presented in this section for the years ended December 31, 2023, 2024 and 2025 has been audited and prepared in accordance with IFRS Accounting Standards. In addition, to the extent that it is available and because we believe it is useful in analyzing our results, we have included information classified by the business segments that we use for internal reporting purposes.
Net Income for the year
The following table sets forth the principal components of our net income for the year, as detailed in our audited consolidated financial statements for the years ended December 31, 2023, 2024 and 2025:
| For the Year Ended December 31, | % Increase (Decrease) | |||||||||||||||||||
| 2023 | 2024 | 2025 | 2023/2024 | 2024/2025 | ||||||||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||||||||||
| IFRS: | ||||||||||||||||||||
| Net interest and inflation indexation income | Ch$ | 1,920,792 | Ch$ | 2,162,755 | Ch$ | 2,070,082 | 12.6 | % | (4.3 | )% | ||||||||||
| Net fee and commission income | 534,684 | 556,308 | 620,703 | 4.0 | 11.6 | |||||||||||||||
| Other income (loss), net | 558,708 | 348,454 | 338,816 | (37.6 | ) | (2.8 | ) | |||||||||||||
| Expected credit losses | (201,944 | ) | (352,706 | ) | (394,862 | ) | 74.7 | 12.0 | ||||||||||||
| Total Operating expenses | (1,116,099 | ) | (1,132,734 | ) | (1,130,938 | ) | 1.5 | (0.2 | ) | |||||||||||
| Net Operating Income before income tax | 1,696,141 | 1,582,077 | 1,503,801 | (6.7 | ) | (4.9 | ) | |||||||||||||
| Income tax | (322,114 | ) | (333,601 | ) | (318,388 | ) | 3.6 | (4.6 | ) | |||||||||||
| Net income for the year | Ch$ | 1,374,027 | Ch$ | 1,248,476 | Ch$ | 1,185,413 | (9.1 | )% | (5.1 | )% | ||||||||||
2024 and 2025: For the year ended December 31, 2025, our net income for the year decreased by Ch$63,064 million or 5.1% from Ch$1,248,476 million in 2024 to Ch$1,185,412 million recorded in 2025. This annual change was mainly explained by:
| ● | An annual decline of Ch$92,673 million in net interest and inflation indexation income. This annual change was the result of: (i) an annual decline of Ch$73,298 million in the income from the management of term and interest rates mismatches in the banking book, primarily due to the maturity of the FCIC funding in 2024 (a credit line granted by the Chilean Central Bank to Chilean banks in the context of the Covid-19 pandemic), (ii) an annual decrease of Ch$49,100 million in the contribution of our UF-denominated net asset exposure as a result of lower inflation, (iii) an annual decrease of Ch$30,455 million in the contribution of demand deposits to our funding cost, mainly due to lower short-term interest rates, and (iv) lower margin from time deposits by Ch$11,636 million in 2025, also driven by decreasing interest rates. These effects were partly offset by an annual increase of Ch$71,044 million in income from loans (net of funding cost), primarily steered by improved lending spreads. |
| ● | An annual increase of Ch$42,156 million in expected credit losses, from Ch$352,706 million in 2024 to Ch$394,862 million in 2025, mainly reflecting the outlook for the local economy and key market factors incorporated into our provisioning models, such as GDP growth, unemployment, interest rates, and inflation. In this regard, the macroeconomic outlook incorporated into our models assumes economic activity in line with potential GDP growth, inflation continuing to converge toward the Central Bank's target range, and interest rates reaching neutral levels. These assumptions, together with higher delinquency observed at the end of 2025, influenced the projected repayment capacity of customers and resulted in a moderate increase in expected credit losses for 2025. |
| ● | Lower other income (loss), net by Ch$9,638 million on an annual basis, from Ch$348,454 million as of December 31, 2024 to Ch$338,816 million as of December 31, 2025. This performance was mainly explained by: (i) lower income from exchange, indexation and accounting hedging of foreign currency mostly due to changes in exchange rate adjustments on our off-balance foreign exchange net asset position in derivatives and our leasing portfolio denominated in local currency, as a result of an appreciation of the Chilean peso against the U.S. dollar in 2025, and (ii) an annual decrease in income attributable to investments in other companies explained by a comparison base effect due to the sale of Artikos Chile S.A. in 2024. These effects were partly counterbalanced by: (i) the positive effect of lower interest rates in the income from debt financial instruments at FVTPL and the income from the sale of financial assets at FVTOCI, and (ii) increased results from non-current assets and disposal groups held for sale not admissible as discontinued operations. |
These factors were partly offset by:
| ● | An annual increase of Ch$64,395 million in net fee and commission income (“net fee income”), from Ch$556,308 million in 2024 to Ch$620,703 million in 2025. This change was primarily driven by: (i) higher net fee income from mutual funds and investment funds management as a result of a shift in investors’ preferences towards these investment alternatives (instead of time deposits) that offer higher expected returns in a context of lowered short-term interest rates, (ii) an annual increase in net fee income from transactional services coming from higher credit card usage, (iii) an annual growth in net fee income coming from stock brokerage activities, as a consequence of the strong activity observed in the local stock market during 2025 when compared to 2024 and the participation in specific transactions carried out during the year, and (iv) an annual increase in net fee income from demand accounts and ATMs mostly due to higher debit card transactions in 2025. These effects were partly offset by lower net fee income from our insurance brokerage business in 2025 resulting from lower recognition of upfront fees coming from the alliance with an international provider given the expiration of claw-back clauses during the fourth quarter of the year and lower written premiums in 2025. |
| ● | An annual decrease of Ch$1,796 million in total operating expenses, from Ch$1,132,734 million as of December 2024 to Ch$1,130,938 million as of December 2025. Main explanatory factors behind this behavior were: (i) an annual decrease in personnel expenses, mostly attributable to lower severance payments incurred in 2025 given the organizational restructuring process carried out in 2024, which was partly offset by higher bonusses granted to the staff in recognition of the Bank’s strong performance compared to its peers, and higher salaries (although below inflation), and (ii) lower other operating expenses by Ch$2,081 million mostly associated with lower expenses related to financial leasing operations. These effects were almost entirely offset by an annual increase of Ch$12,937 million in administrative expenses explained by: (i) higher advertising and marketing expenses associated with increased sponsorship initiatives, the promotion of new services offered by our subsidiary Banchile Pagos and higher advertising-related expenses regarding our loyalty programs, and (ii) an annual growth in IT-related expenses mostly related to software licencing and cloud service expenses. |
| ● | An annual decrease in outsourced services, which was attributable to the merger of our former collection services subsidiary, Socofin, into the Bank, and lower expenses from product delivery to customers. |
2023 and 2024. For the year ended December 31, 2024, our net income for the year decreased by Ch$125,551 million or 9.1% from Ch$1,374,027 million in 2023 to Ch$1,248,476 million recorded in 2024. This annual change was mainly explained by:
| ● | An annual decrease of Ch$210,254 million or 37.6% in other income (loss), net, from Ch$558,708 million in 2023 to Ch$348,454 million in 2024. This performance was the consequence of: (i) an annual decrease in income from debt financial instruments and other debt financial instruments held for trading at FVTPL due to the decrease in short-term interest rates together with lower exposures due to the end of the FCIC funding, (ii) lower income from financial derivatives contracts held for trading at FVTPL, mostly influenced by the effect of a higher depreciation of the Chilean peso against the U.S. dollar in 2024 on our average net liability position in foreign currency through derivatives, and (iii) an annual decline in other operating income due to a comparison base effect resulting from the release of non-credit related provisions by the end of 2023. These effects were partly offset by: (i) further income from exchange, indexation and accounting hedging of foreign currency resulting from foreign exchange adjustments on both our off-balance net asset position in hedge accounting derivatives and assets denominated in local currency but adjusted by the effect of changes in foreign exchange, and (ii) higher net financial income from the sale of financial assets at FVTOCI. |
| ● | An annual increase of Ch$150,762 million or 74.7% in expected credit losses, from Ch$201,944 million in 2023 to Ch$352,706 million in 2024, which was mostly related to changes in expectations on the macroeconomic environment for the next 12 months, when compared to the expectations existing as of December 31, 2023 for the coming 12-month period. In this regard, perspectives for 2025 considered a more tempered improvement in economic conditions regarding the expectations prevailing in the previous year, which impacted the outcome from provisioning models, together with delinquency levels by the end of 2024 that had an effect on forecasted customers’ payment capacity. |
| ● | An annual increase of Ch$16,635 million or 1.5% in total operating expenses, from Ch$1,116,099 million in 2023 to Ch$1,132,734 million in 2024. This annual change was explained by: (i) an annual increase in administrative expenses, mainly influenced by increased IT-related expenses, along with increased expenses in fixed-asset maintenance (mostly related to changes in our ATM locations) and greater delivery service expenses to customers, (ii) an increase in depreciation and amortization of intangible assets, and (iii) higher impairments of non-financial assets. |
| ● | An annual increase of Ch$11,487 million or 3.6% in income tax, from Ch$322,114 million in 2023 to Ch$333,601 million in 2024, which was mainly explained by: (i) lower balances of fixed-income securities in 2024 that benefited from the tax treatment associated with Art. 104 of the Chilean Tax Law in 2023, which resulted in greater deductions to the taxable base, (ii) the effect of lower inflation on equity, which may be deducted from the taxable base, in 2024 when compared to the previous year. To a lesser degree and in the opposite direction, a lower net operating income before income tax. |
These factors were partly offset by:
| ● | An annual increase of Ch$241,963 million or 12.6% in net interest and inflation indexation income, from Ch$1,920,792 million in 2023 to Ch$2,162,755 million in 2024. This performance was mostly explained by: (i) an annual increase of Ch$107,428 million in income from loans, from Ch$862,856 million in 2023 to Ch$970,285 million in 2024, mostly explained by average consumer loans that increased 4.3% on an annual basis and improved lending spreads that are converging to levels observed before the Covid-19 pandemic, coupled with a 7.5% increase in the average of residential mortgage loans, (ii) higher contribution of demand deposits to our funding cost by Ch$40,377 million, highly influenced by both the annual expansion of 4.9% in average demand deposits balances caused by lower short-term interest rates, and the positive effect of higher average margins in 2024, (iii) an annual increase of Ch$30,104 million in income from time deposits due to a proactive and targeted pricing management and a 0.9% annual growth in average balances (including retail and wholesale customers), and (iv) an annual improvement of Ch$68,897 million from the management of term and interest rates gapping for positions in the banking book. |
| ● | An annual rise of Ch$21,624 million or 4.0% in net fee income, from Ch$534,684 million in 2023 to Ch$556,308 million in 2024, which was mostly explained by: (i) higher net fee income from mutual funds and investment funds management, as a result of a 38.1% growth in assets under management, (ii) greater net fee income from transactional services, (iii) higher net fee income from cash management due to revised interbank clearing fees, and (iv) greater net fee income from letters of credit, guarantees, collateral, and other contingent loans, which was aligned with increased activity in foreign trade. These effects were partly offset by lower net fee income from insurance brokerage related to both lower recognition of the upfront fee that resulted from the strategic alliance started in 2019, and a decrease in average written premiums due to changes in property and casualty insurance business and non-credit related insurance, and (ii) lower net fee income from demand accounts and ATMs due to both revised interchange rates on debit cards and lower transactions in ATMs as a result of the expiration of a former commercial agreement for the location of part of our ATM network. |
Net Interest and Inflation Indexation Income
The tables included under the headings “—Interest and Inflation Indexation Revenue” and “—Interest and Inflation Indexation Expense” set forth information regarding our consolidated interest revenue and expenses, average interest-earning assets and average interest-bearing liabilities for the years ended December 31, 2023, 2024 and 2025. This information is derived from tables included elsewhere in this annual report under “Item 4. Information on the Company—Selected Statistical Information” and is qualified in its entirety by reference to such information.
| For the Year Ended December 31, | % Increase (Decrease) | |||||||||||||||||||
| 2023 | 2024 | 2025 | 2023/2024 | 2024/2025 | ||||||||||||||||
| (in millions of Ch$, except percentages) | % | |||||||||||||||||||
| IFRS: | ||||||||||||||||||||
| Interest and Inflation indexation revenue | Ch$ | 4,044,665 | Ch$ | 3,771,059 | Ch$ | 3,409,584 | (6.8 | )% | (9.6 | )% | ||||||||||
| Interest and Inflation indexation expense | (2,123,873 | ) | (1,608,304 | ) | (1,339,502 | ) | (24.3 | ) | (16.7 | ) | ||||||||||
| Net interest and Inflation indexation income | Ch$ | 1,920,792 | Ch$ | 2,162,755 | Ch$ | 2,070,082 | 12.6 | % | (4.3 | )% | ||||||||||
| Net interest margin(1)(2) | 4.57 | % | 4.78 | % | 4.57 | % | ||||||||||||||
| (1) | Net interest and inflation indexation income divided by average interest-earning assets. The average balances for interest-earning assets, including interest readjustments, were calculated on a daily basis for the Bank’s balances and on a monthly basis for our subsidiaries’ balances. |
| (2) | Net interest margin includes the interest and inflation indexation revenue earned on debt financial instruments held for trading at FVTPL, which is accounted for under Other Income (Loss), net. Similarly, it includes average balances of debt financial instruments held for trading at FVTPL. |
2024 and 2025. For the year ended December 31, 2025, our net interest and inflation indexation income was Ch$2,070,082 million, which represents an annual decrease of 4.3% or Ch$92,673 million, as compared to the Ch$2,162,755 million recorded in 2024. The main drivers explaining the annual decrease in net interest and inflation indexation income were:
| ● | An annual decline of Ch$81,263 million in interest revenue earned on financial investments, including securities at FVTOCI and Amortized Cost (AC). This decrease was partly associated with an annual decline of Ch$43,259 million in interest earned as a result of an annual decrease of 19.6% in the average balances of financial investments, primarily due to the scheduled amortization of the FCIC funding with the Central Bank in 2024, which was repaid with the proceeds obtained from sale or the maturity of FVTOCI and AC securities. In addition, the effect of lower local interest rates during the year resulted in Ch$38,004 million of lower interest revenue earned on fixed-income securities. Accordingly, the average interest rates accrued on these securities declined from 5.2% in 2024 to 4.1% in 2025. |
| ● | An annual decrease of Ch$63,989 million in interest revenue earned on loans to customers (excluding the effect of inflation indexation). This performance was principally explained by a decline of Ch$115,287 million in interest revenue earned on commercial loans, which in turn was almost entirely associated with lower interest rates accrued on these loans, from 6.6% in 2024 to 6.1% in 2025, as a result of: (i) the overall decline in interest rates observed throughout 2025 in both local and foreign markets, and (ii) the scheduled maturity of higher-yielding loans originated from 2022 onwards, reflecting the unprecedented macroeconomic environment experienced during that time. These factors were to some extent offset by: (i) an annual increase of Ch$45,206 million in interest revenue earned on residential mortgage loans, in line with a 7.5% annual growth in average loan balances that resulted in higher interest revenue by Ch$30,511 million, together with an 11 basis points increase in the average interest rate accrued on these long-term loans in 2025, which explained Ch$14,695 million of further interest revenue, and (ii) an annual increase of Ch$6,091 million in interest earned on consumer loans, mostly due to the effect of average consumer loan balances that grew 3.5% over the year, explaining an annual increase of Ch$25,691 million in interest revenue, due to both credit card usage and a moderate reactivation of installment loans in the second half of the year, which was partly offset by an annual decline of Ch$19,600 million in interest revenue produced by lower interest rates accrued on consumer loans in 2025. |
| ● | An annual decrease of Ch$59,331 million in net inflation indexation income due to a lower contribution of our UF-denominated net asset exposure that is indexed to inflation. This annual change was mostly explained by the effect of lower inflation (measured as UF variation) that decreased from 4.4% in 2024 to 3.4% in 2025. This behavior was partly offset by the annual increase in the average net asset exposure to inflation managed by our Treasury segment observed in 2025 when compared to 2024. |
| ● | An annual decrease of Ch$35,535 million in interest revenue earned on loans to banks, mainly explained by: (i) an annual decrease of Ch$20,085 million in interest revenue due to an annual contraction of 33.6% in average balances, largely attributable to overnight deposits in the Chilean Central Bank, as part of liquidity management activities, and (ii) a further reduction in interest revenue by Ch$15,450 million, fostered by the aforementioned trend followed by short-term interest rates in 2025, which decreased from 5.7% in 2024 to 4.5% in 2025. |
| ● | An annual increase of Ch$26,859 million in interest paid on debt financial instruments issued, including commercial paper (“debt instruments” or “debt issued”, hereafter) in 2025 when compared to 2024. In detail, interest paid on debt instruments increased Ch$18,914 million on an annual basis, mainly explained by a 6.6% increase in average balances, which reflected our Treasury’s funding strategy aimed at reducing financial gaps in the banking book by matching long-term assets while raising funding to face the expected reactivation in the lending business. Additionally, interest paid on debt issued rose by Ch$7,945 million in 2025 driven by an annual rise in average interest rates paid on these liabilities from 2.7% in 2024 to 2.8% in 2025, due to the repricing of these liabilities in the prevailing CLF-denominated interest rates scenario. |
| ● | An annual reduction of Ch$25,678 million in interest revenue earned on other assets, which was mostly attributable to a decline in the accrued interest rate on off-shore deposits in correspondent banks, associated with the global easing monetary cycles undertaken by global central banks over the last years. Furthermore, the annual decrease in average balances of deposits in correspondent banks also contributed to the annual decline in interest revenue from other assets. |
These factors were partly offset by an annual decrease of Ch$184,025 million in interest expenses paid on time deposits and saving accounts in 2025. This decline was almost entirely explained by lower interest rates paid on these funding instruments, which decreased from 5.3% in 2024 to 4.1% in 2025, reflecting the downward trend in short-term interest rates following the expansionary monetary policy set by the Central Bank since 2023.
Overall, the impact of lower net interest and inflation indexation income translated into a net interest margin of 4.57% in 2025, which is 21 basis points lower than the net interest margin of 4.78% achieved in 2024.
2023 and 2024. For the year ended December 31, 2024, our net interest and inflation indexation income was Ch$2,162,755 million, which represents an annual increase of 12.6% or Ch$241,963 million, as compared to the Ch$1,920,792 million recorded in 2023. The main drivers for the increase in net interest income were:
| ● | An annual decrease of Ch$497,775 million in interest paid on time deposits and saving accounts in 2024. This variation was mostly explained by an annual decrease of Ch$505,569 million that resulted from lower interest rates paid on these instruments, which declined from an average interest rate of 8.8% in 2023 to 5.4% in 2024, in line with five consecutive cuts to the reference rate in 2024 by the Chilean Central Bank from 8.25% in December 2023 to 5.00% in December 2024. This effect was partly offset by Ch$7,794 million in interest paid driven by an annual rise of 0.9% in average time deposits and saving account balances. |
| ● | An annual increase of Ch$9,424 million in interest earned on other assets, mostly explained by higher interest accrued on deposits held in correspondent banks due to the increase in foreign short-term interest rates. Even though global central banks have been cutting their respective reference rates since the second half of 2024, the average level of interest rates has remained above those observed in 2023. |
These factors were partly offset by:
| ● | An annual decrease of Ch$127,905 million in interest earned on debt instruments at both FVTOCI and AC in 2024. This performance was explained by: (i) an annual decline of Ch$90,133 million in interest earned as a result of average interest rates accrued on these securities from 6.8% in 2023 to 5.1% in 2024, in line with the aforementioned downward trend observed in short-term interest rates, and (ii) a volume effect that translated into Ch$37,711 million of lower interest earned on these securities due to an annual decrease in average balances, due to the repayment of the FCIC funding (with the Central Bank) in April and July 2024 by means of proceeds obtained from sale or the maturity of FVTOCI and AC securities. |
| ● | An annual decrease of Ch$95,887 million in interest revenues earned on loans to banks, mostly explained by the effect of lower interest rates accrued on these instruments, from 9.4% in 2023 to 5.1% in 2024, attributable to: (i) lower short-term interest rates (linked to changes in the local monetary policy) earned on overnight deposits held in the Chilean Central Bank, which explained Ch$77,939 million of lower interest earned, and (ii) an annual decline of 28.6% in average balances of loans to banks that explained an annual decrease of Ch$17,948 million in interest earned, also in connection with the end of the FCIC funding. |
| ● | An annual decrease of Ch$42,494 million in interest revenues earned on loans to customers, mostly explained by the effect of lower interest rates. At a product level, the main explanatory factor was an annual decline of Ch$120,620 million in interest earned on commercial loans, due to average nominal interest rates that declined from 7.4% in 2023 to 6.8% in 2024, in line with scheduled maturities of loans originated before 2023, which carried higher interest rates given the prevailing interest rate scenario in that period, as compared to the current situation marked by interest rates that continue to gradually converge to normalized levels. This effect was partly offset by: (i) an annual increase of Ch$43,424 million in interest revenues earned on residential mortgage loans, mostly explained by both an annual rise of 7.5% on average balances resulting from the effect of inflation on balances denominated in UF and specific market housing dynamics that have prevailed in Chile during the last years, together with a slight increase in average interest rates carried by this product as a result of a slight pickup in average local long-term interest rates, in nominal and real terms, due to long-term inflation expectations, and (ii) an annual increase of Ch$34,701 million in interest revenues earned on consumer loans, associated with a volume effect due to average balances that grew 4.3% on an annual basis, related to both improved installment loan origination and growth in credit card loans. |
| ● | An annual increase of Ch$10,413 million in interest paid on debt instruments (including commercial paper), which was mostly influenced by the annual nominal increase of 3.1% in the average balances of debt issued. The annual increment in average balances was mostly related to the effect of inflation on UF-denominated bonds and the issuance of senior debt in the local market to replace scheduled amortizations. |
Overall, the impact of higher net interest income translated into a net interest margin of 4.78% in 2024, which is 21 basis points higher than the net interest margin of 4.57% achieved in 2023.
Interest and Inflation Indexation Revenue
The following table sets forth information regarding our interest and inflation indexation revenue and average interest-earning assets for the years ended December 31, 2023, 2024 and 2025:
| For the Year Ended December 31, | % Increase (Decrease) | |||||||||||||||||||
| 2023 | 2024 | 2025 | 2023/2024 | 2024/2025 | ||||||||||||||||
| (in millions of Ch$, except percentages) | % | |||||||||||||||||||
| IFRS: | ||||||||||||||||||||
| Interest and inflation indexation revenue | Ch$ | 4,044,665 | Ch$ | 3,771,059 | Ch$ | 3,409,584 | (6.8 | )% | (9.6 | )% | ||||||||||
| Average interest-earning assets: | ||||||||||||||||||||
| Commercial loans | 20,025,808 | 20,138,864 | 20,158,212 | 0.6 | 0.1 | |||||||||||||||
| Residential mortgage loans | 11,813,565 | 12,694,450 | 13,643,647 | 7.5 | 7.5 | |||||||||||||||
| Consumer loans | 5,094,092 | 5,314,222 | 5,500,263 | 4.3 | 3.5 | |||||||||||||||
| Total loans | 36,933,465 | 38,147,536 | 39,302,122 | 3.3 | 3.0 | |||||||||||||||
| Rights by resale agreements | 48,648 | 69,235 | 88,955 | 42.3 | 28.5 | |||||||||||||||
| Other Assets | 398,780 | 419,368 | 477,564 | 5.2 | 13.9 | |||||||||||||||
| Financial investments | 8,566,684 | 6,459,037 | 6,460,177 | (24.6 | ) | 0.0 | ||||||||||||||
| Loans to banks | 1,766,337 | 1,260,299 | 836,653 | (28.6 | ) | (33.6 | ) | |||||||||||||
| Total | Ch$ | 47,713,914 | Ch$ | 46,355,475 | Ch$ | 47,165,471 | (2.8 | )% | 1.7 | % | ||||||||||
| Average nominal rates earned on total interest-earning assets(1)(2): | 9.13 | % | 8.38 | % | 7.49 | % | ||||||||||||||
| (1) | See “Item 4. Information on the Company—Selected Statistical Information—Average Balance Sheets, Interest Earned on Interest-Earning Assets and Interest Paid on Interest-Bearing Liabilities.” |
| (2) | Average rates earned on interest-earning assets do not include the interest earned on debt instruments held for trading at FVTPL, which is accounted for under Other Income (Loss), net. However, it does include average balances of debt instruments held for trading at FVTPL. |
2024 and 2025. For the year ended December 31, 2025, our interest and inflation indexation revenue amounted to Ch$3,409,584 million, which denotes a 9.6% or Ch$361,475 million decrease when compared to the Ch$3,771,059 million recorded in 2024. This annual variation was aligned with the trend observed in key macroeconomic indicators in Chile and abroad. In fact, short-term nominal interest rates closely tracked the local reference rate that was reduced twice by the Chilean Central Bank (25 basis points in July 2025 and 25 basis points in December 2025) in the context of inflation expectations that remained at the midpoint of the Central Bank’s target range as 12-month inflation decreased below the upper boundary of that range. For the same reason, medium- and long-term interest rates also continued to exhibit a downward trend throughout the year, with a more marked decline in the fourth quarter of the year. As a result of the decline in interest rates –in all tenors of the nominal yield curve– interest revenue (excluding the effect of inflation indexation) decreased by Ch$206,289 million in 2025 when compared to 2024, which was partly offset by a 1.7% annual increase in average interest-earning assets, mainly concentrated in residential mortgage and consumer loans. This effect was coupled with an annual decline of Ch$155,186 million in inflation indexation revenue, primarily reflecting the 12-month decrease in inflation from 4.4% in 2024 to 3.4% in 2025, both figures measured as UF variation, which was slightly offset by higher average balances of inflation-indexed assets.
Based on these effects, the overall average interest rate earned on our assets decreased from 8.38% in December 2024 to 7.49% in December 2025.
2023 and 2024. For the year ended December 31, 2024, our interest and inflation indexation revenue amounted to Ch$3,771,059 million, which denotes a 6.8% or Ch$273,606 million decrease when compared to the Ch$4,044,665 million recorded in 2023. This change was mostly associated with the downward trend observed in interest rates in the local market, particularly in the short-term, due to five consecutive cuts made to the local reference interest rate, from 8.25% in December 2023 to 5.00% in December 2024. The expansionary stance adopted by the Chilean Central Bank was based on 12-month inflation that, although remaining above the two-year target range of 2% to 4%, seemed to be converging to desired levels. Medium-term interest rates followed a similar downward trend, in light of expectations on the macro environment for the coming months. Furthermore, average interest-earning assets decreased 2.8% or Ch$1,285,889 million on an annual basis, primarily due to the full repayment of the FCIC by Ch$4,348,400 million in 2024, for which interest earning assets used as collateral of this obligation were sold. As a result of these effects, interest revenues experienced an annual decline of Ch$258,244 million. In addition, the interest revenue from inflation indexation decreased Ch$7,201 million as a result of lower inflation that, measured as UF variation, decreased from 4.8% in 2023 to 4.4% in 2024.
Based on these effects, the overall average interest rate earned on our assets decreased from 9.13% in December 2023 to 8.38% in December 2024.
Interest and Inflation Indexation Expense
The following table sets forth information regarding our interest and inflation indexation expense and average interest-bearing liabilities for the years ended December 31, 2023, 2024 and 2025:
| For the Year Ended December 31, | % Increase (Decrease) | |||||||||||||||||||
| 2023 | 2024 | 2025 | 2023/2024 | 2024/2025 | ||||||||||||||||
| (in millions of Ch$, except percentages) | % | |||||||||||||||||||
| IFRS: | ||||||||||||||||||||
| Interest and inflation indexation expense | Ch$ | 2,123,873 | Ch$ | 1,608,304 | Ch$ | 1,339,502 | (24.3 | )% | (16.7 | )% | ||||||||||
| Average interest-bearing liabilities: | ||||||||||||||||||||
| Time deposits and Saving accounts (1) | 15,134,689 | 15,267,720 | 15,236,466 | 0.9 | (0.2 | ) | ||||||||||||||
| Obligations by repurchase agreements | 141,312 | 178,995 | 179,240 | 26.7 | 0.1 | |||||||||||||||
| Borrowings from financial institutions | 5,254,317 | 2,600,300 | 1,362,732 | (50.5 | ) | (47.6 | ) | |||||||||||||
| Debt financial instruments issued | 10,258,411 | 10,726,687 | 11,210,904 | 4.6 | 4.5 | |||||||||||||||
| Commercial Papers | 151,830 | 10,847 | 236,847 | (92.9 | ) | 2,083.5 | ||||||||||||||
| Lease Liabilities | 89,887 | 94,931 | 84,041 | 5.6 | (11.5 | ) | ||||||||||||||
| Other financial obligations | 144,565 | 176,458 | 131,914 | 22.1 | (25.2 | ) | ||||||||||||||
| Total | Ch$ | 31,175,011 |
Ch$ | 29,055,938 |
Ch$ | 28,442,144 |
(6.8 | )% | (2.1 | )% | ||||||||||
| Average rates paid on total interest-bearing liabilities(2): | 6.81 | % | 5.54 | % | 4.71 | % | ||||||||||||||
| Average noninterest-bearing current account and other demand deposits | Ch$ | 13,464,628 | Ch$ | 14,124,978 | Ch$ | 14,591,337 | 4.9 | % | 3.3 | % | ||||||||||
| (1) | Includes interest-bearing current accounts and other demand deposits. |
| (2) | See “Item 4. Information on the Company—Selected Statistical Information—Average Balance Sheets, Interest Earned on Interest-Earning Assets and Interest Paid on Interest-Bearing Liabilities.” |
2024 and 2025. Our interest and inflation indexation expense decreased 16.7% or Ch$268,802 million, from Ch$1,608,304 million in 2024 to Ch$1,339,502 million in 2025. The annual decrease in interest and inflation indexation expense was mostly explained by the same interest rate effect discussed above. In this regard, the monetary policy interest rate averaged 4.9% in 2025, representing an annual decline of 132 basis points when compared to the annual average of 6.2% recorded in 2024. Since the changes in short-term interest rates are directly linked to changes in the local and foreign reference rates, the interest rate paid on our short-term liabilities significantly benefited from the easing monetary policies followed by central banks during the year, resulting in an annual decline of Ch$173,919 million in interest expense (excluding the effect of inflation indexation), which in turn was slightly offset by a volume effect that translated into higher interest expense of Ch$5,244 million, associated with an average annual growth of 8.0% in debt issued. In addition, the effect of lower inflation on our UF-denominated interest-bearing liabilities in 2025 resulted in an annual decrease of Ch$100,128 million in inflation-indexation expense, compared to 2024.
As a result of the annual decrease of 16.7% in interest and inflation indexation expense, our interest paid on interest bearing liabilities decreased from 5.54% in December 2024 to 4.71% in December 2025.
2023 and 2024. Our interest and inflation indexation expense decreased 24.3% or Ch$515,569 million, from Ch$2,123,873 million in 2023 to Ch$1,608,304 million in 2024. This annual decrease was mostly explained by an annual decline of Ch$486,001 million in interest expenses (excluding the effect of inflation), which was the result of: (i) the negative effect of lower nominal interest rates accrued on interest bearing liabilities, particularly in the short-term, in line with the annual decrease of 325 basis points in the local reference rate throughout the year, together with similar paths followed by reference rates in foreign currencies by the end of 2024, and (ii) a volume effect explained by an annual decrease of 6.8% or Ch$2,119,073 million in average interest-bearing liabilities in 2024, mostly driven by the end of the FCIC funding in July 2024, which explained an annual decrease of 50.5% or Ch$2,654,017 million in average balances of borrowings from financial institutions. To a lesser extent, the effect of lower inflation on our UF-denominated interest-bearing liabilities (from 4.8% in 2023 to 4.4% in 2024, measured as UF variation) explained an annual decline of Ch$19,173 million in interest expenses related to inflation indexation.
As a result of the annual decrease of 24.3% in interest and inflation indexation expense, our interest paid on interest bearing liabilities decreased from 6.81% in December 2023 to 5.54% in December 2024.
Net Fee and Commission Income
The following table sets forth certain components of our net fee and commission income (net of fees paid to third parties that provide support for those services) for the years ended December 31, 2023, 2024 and 2025:
| Year Ended December 31, | % Increase (Decrease) | |||||||||||||||||||
| 2023 | 2024 | 2025 | 2023/2024 | 2024/2025 | ||||||||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||||||||||
| IFRS: | ||||||||||||||||||||
| Mutual funds | Ch$ | 118,170 | Ch$ | 142,311 | Ch$ | 172,785 | 20.4 | % | 21.4 | % | ||||||||||
| Insurance | 119,732 | 104,131 | 102,423 | (13.0 | ) | (1.6 | ) | |||||||||||||
| Current accounts, overdrafts, credit lines and credit cards | 121,240 | 130,104 | 154,607 | 7.3 | 18.8 | |||||||||||||||
| Demand accounts and ATMs | 74,615 | 60,495 | 63,570 | (18.9 | ) | 5.1 | ||||||||||||||
| Stock brokerage | 9,376 | 10,992 | 15,884 | 17.2 | 44.5 | |||||||||||||||
| Cash management services | 2,711 | 10,249 | 12,629 | 278.1 | 23.2 | |||||||||||||||
| Letters of credit, guarantees, collateral and other contingent loans | 38,280 | 42,796 | 43,678 | 11.8 | 2.1 | |||||||||||||||
| Custody and trust services | 10,608 | 11,554 | 12,305 | 8.9 | 6.5 | |||||||||||||||
| Foreign trade and currency exchange | 2,794 | 3,816 | 3,871 | 36.6 | 1.4 | |||||||||||||||
| Financial advisory services | 5,274 | 2,688 | 2,549 | (49.0 | ) | (5.2 | ) | |||||||||||||
| Credits and factoring | 3,563 | 6,124 | 5,284 | 71.9 | (13.7 | ) | ||||||||||||||
| Collection services | 166 | 212 | 205 | 27.7 | (3.3 | ) | ||||||||||||||
| Teller services expenses | (4,279 | ) | (4,120 | ) | (4,010 | ) | (3.7 | ) | (2.7 | ) | ||||||||||
| Wire transfers and payment orders | 19,265 | 22,365 | 24,432 | 16.1 | 9.2 | |||||||||||||||
| Other | 13,169 | 12,591 | 10,491 | (4.4 | ) | (16.2 | ) | |||||||||||||
| Net Fee and Commission Income | Ch$ | 534,684 |
Ch$ | 556,308 |
Ch$ | 620,703 |
4.0 | % | 11.6 | % | ||||||||||
2024 and 2025. Our net fee income totaled Ch$620,703 million in 2025, which denotes an 11.6% annual increase when compared to the Ch$556,308 million recorded in 2024. This annual increase in fee-based income was primarily supported by:
| ● | An annual increase of Ch$30,474 million or 21.4% in net fee income from mutual funds management from Ch$142,311 million in 2024 to Ch$172,785 million in 2025. This performance was primarily attributable to a shift in clients’ preferences that moved from time deposits to investment instruments offering higher expected returns amid the anticipated decline in short-term interest rates. In response to these dynamics, our Mutual Fund and Investment Fund Management subsidiary continued to strengthen the product offering initially developed in 2023, which remained highly demanded by clients throughout 2025. As a result, the subsidiary recorded a 13.1% annual increase in average assets under management (“AUM”) and a 10.6% expansion in its investor base compared to 2024. Additionally, both the appreciation observed in the local equity market and the decline in long-term interest rates contributed to higher valuation of managed portfolios, further supporting the growth in net fee income during the period. |
| ● | An annual increase of Ch$24,503 million or 18.8% in net fee income from transactional services (including current accounts, overdrafts, credit lines, and credit cards), from Ch$130,104 million in 2024 to Ch$154,607 million in 2025. This growth was primarily attributable to: (i) a 6.4% annual increase in the number of credit card transactions, reflecting the continued shift towards digital payment methods and the effectiveness of our enhanced value proposition, including benefits offered through our loyalty programs; and (ii) a 9.5% appreciation of the Chilean peso against the U.S. dollar, which reduced USD-denominated fee expenses associated with our credit card loyalty program, thereby contributing positively to our net fee income. |
| ● | An annual increase of Ch$4,892 million or 44.5% in net fee income from stock brokerage, from Ch$10,992 million in 2024 to Ch$15,884 million in 2025, mainly associated with an 85.4% annual increase in stock trading turnover intermediated by our brokerage subsidiary. The higher activity reflects the strengthened performance of the local equity market during 2025 —particularly in the second half of the year— and the subsidiary’s participation in specific transactions executed in the local market throughout the period, which contributed to the expansion in brokerage net fee income. |
| ● | An annual increase of Ch$3,075 million or 5.1% in net fee income from demand accounts and ATMs, from Ch$60,495 million in 2024 to Ch$63,570 million in 2025. This growth was primarily driven by an 11.8% annual increase in debit card transactions, supported in part by the continued expansion of our FAN Account ecosystem, which added approximately 300,000 new users in 2025, contributing to higher transaction volumes and associated net fee income. |
| ● | An annual increase of Ch$2,380 million or 23.2% in net fee income from cash management services, from Ch$10,249 million in 2024 to Ch$12,629 million in 2025. This annual growth was primarily driven by a downward adjustment in interbank fees paid on electronic money transfers during 2025, which reduced related fee expense and contributed positively to net fee income. |
These positive drivers were partially offset by an annual decrease of Ch$1,708 million or 1.6% in net fee income from the insurance brokerage business, from Ch$104,131 million in 2024 to Ch$102,423 million in 2025. This annual decline was produced by: (i) an annual decrease in the recognition of the upfront fee received as part of the strategic alliance initiated in 2019, due to the expiration of clawback clauses in June 2024 (casualty insurance agreement) and December 2024 (life insurance agreement) and (ii) a 5.4% decrease in average written premiums explained by a change in the dynamics of property and casualty insurance business linked to residential mortgage loans.
2023 and 2024. Our net fee income totaled Ch$556,308 million in 2024, which denotes a 4.0% annual increase when compared to the Ch$534,684 million recorded in 2023. This annual increase in net fee income was primarily supported by:
| ● | An annual increase of Ch$24,141 million or 20.4% in net fee income from mutual funds management from Ch$118,170 million in 2023 to Ch$142,311 million in 2024. This change was largely associated with the 38.1% expansion in AUM, which in turn was supported by new fixed-income funds launched by our mutual funds and investment funds management subsidiary. Through these actions, our subsidiary pursued designing attractive value offerings for the Bank’s former time deposit holders who were seeking to benefit from expected changes in local interest rates by investing in both fixed-income funds and equity funds. |
| ● | An annual increase of Ch$8,864 million or 7.3% in net fee income from transactional services (including current accounts, overdrafts, credit lines, and credit cards), from Ch$121,240 million in 2023 to Ch$130,104 million in 2024. The main factor explaining this change was an annual increase of 12.8% in the amount of billed purchases and an annual increase of 10.9% in the number of transactions made by our customers with credit cards, which is consistent with the widespread and increasing use of this payment channel among customers in conjunction with attractive value offerings we have designed for them, including the benefits provided to credit card users through our loyalty programs. These drivers enabled us to deal with some factors that adversely affected net fee income from transactional services, including: (i) the implementation of the new interchange rates framework, as established by the Technical Committee in October 2023, which revised the previously applicable fees paid by customers on credit cards downwards, and (ii) the impact of a 13.8% depreciation of the Chilean peso against the U.S. dollar in 2024 on USD-denominated fee expenses related to our credit card loyalty program. |
| ● | An annual increase of Ch$7,538 million in net fee income from cash management services, from Ch$2,711 million in 2023 to Ch$10,249 million in 2024. The annual increase was primarily prompted by reduced fees paid on interbank clearance to other banks, which were renegotiated downwards during 2024. |
| ● | An annual increase of Ch$4,516 million or 11.8% in net fee income from contingent loans, from Ch$38,280 million in 2023 to Ch$42,796 million in 2024. This improved performance was aligned with the positive trend experienced by trade finance loans in 2024, which increased due to both improved foreign trade in 2024 and Ch$ depreciation. In addition, contingent loans increased due to specific operations in the corporate banking unit related to natural resources, infrastructure, and the public sector. |
| ● | Increased net fee income from wire transfers and payment orders by Ch$3,100 million or 16.1%, from Ch$19,265 million in 2023 to Ch$22,365 million in 2024. This increase resulted from a higher volume of payments orders in foreign currency, as requested by wholesale banking customers. |
These positive drivers were partially offset by the following factors:
| ● | An annual decrease of Ch$15,601 million or 13.0% in net fee income from the insurance brokerage business, from Ch$119,732 million in 2023 to Ch$104,131 million in 2024. This annual decline was produced by a combination of factors, including: (i) an annual decrease in the recognition of the upfront fee received as part of the strategic alliance initiated in 2019, which explained approximately Ch$6,549 million in lower fee income, due to the expiration of clawback clauses in June 2024 (casualty insurance agreement) and December 2024 (life insurance agreement), (ii) a 3.0% decrease in average written premiums explained by both a change in the dynamics of property and casualty insurance business linked to residential mortgage loans and lower dynamism in the non-credit related insurance, and (iii) an annual increase in loan prepayment, given the downward trend adopted by interest rates in 2024 following the monetary actions taken by the Central Bank, which resulted in greater reimbursements of non-accrued insurance premiums that negatively impacted fee income from insurance brokerage. |
| ● | An annual decrease of Ch$14,120 million or 18.9% in net fee income coming from demand accounts and ATMs, from Ch$74,615 million in 2023 to Ch$60,495 million in 2024, which was primarily caused by: (i) the adverse effect of revised interchange rates on debit and prepayment cards, as set by the technical committee in October 2023, which reduced fees paid by customers on transactions made through these kinds of payment channels, and (ii) the expiration of a former commercial agreement for location of our ATM network and the implementation of a new one in 2024, which partly explained the 24.6% decrease in transaction volume. These drivers were to some extent offset by an annual increase of 14.5% in transactions made with debit cards in 2024 as compared to 2023, which is partly attributable to the expansion of our FAN Account ecosystem that added approximately 308,000 users in 2024. |
Other Income (Loss), Net
Other income (loss), net, consists of net financial result, income from investments in other companies, income (expense) from non-current assets and disposal groups held for sale not admissible as discontinued operations and other operating income. Net financial result includes net gains and losses from financial instruments held for trading at fair value through profit or loss, derecognition of financial assets and liabilities at AC and financial assets at FVTOCI, exchange, indexation and accounting hedging of foreign currency, and ineffective accounting hedges.
The following table sets forth certain components of our other income (loss), net, for the years ended December 31, 2023, 2024 and 2025:
| For the Year Ended December 31, | % Increase (Decrease) | |||||||||||||||||||
| 2023 | 2024 | 2025 | 2023/2024 | 2024/2025 | ||||||||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||||||||||
| IFRS: | ||||||||||||||||||||
| Financial instruments held for trading at fair value through profit or loss: | ||||||||||||||||||||
| Financial derivative contracts | Ch$ | 11,214 | Ch$ | (52,596) | Ch$ | (53,799) | — | % | (2.3 | )% | ||||||||||
| Debt and Other financial instruments | 340,417 | 154,013 | 163,107 | (54.8 | ) | 5.9 | ||||||||||||||
| Derecognition of financial assets and liabilities at amortized cost and financial assets at FVTOCI: | ||||||||||||||||||||
| Financial assets at amortized cost | 256 | 200 | (1,703 | ) | (21.9 | ) | — | |||||||||||||
| Financial assets at fair value through other comprehensive income | (4,522 | ) | 8,050 | 14,875 | — | 84.8 | ||||||||||||||
| Financial liabilities at amortized cost | (1 | ) | — | — | — | — | ||||||||||||||
| Exchange, indexation and accounting hedging of foreign currency | 122,189 | 170,813 | 149,834 | 39.8 | (12.3 | ) | ||||||||||||||
| Ineffective accounting hedges | — | — | — | — | — | |||||||||||||||
| Net financial result | 469,553 | 280,480 | 272,314 | (40.3 | ) | (2.9 | ) | |||||||||||||
| Income from investments in other companies | 13,409 | 16,655 | 11,983 | 24.2 | (28.1 | ) | ||||||||||||||
| Income (expense) from non-current assets and disposal groups held for sale not admissible as discontinued operations | 2,807 | (458 | ) | 6,042 | — | — | ||||||||||||||
| Other operating income | 72,939 | 51,777 | 48,477 | (29.0 | ) | (6.4 | ) | |||||||||||||
| Total other income (loss), net | Ch$ | 558,708 |
Ch$ | 348,454 |
Ch$ | 338,816 |
(37.6 | )% | (2.8 | )% | ||||||||||
2024 and 2025. Our other income (loss), net amounted to Ch$338,816 million in 2025, which denoted a 2.8%, or Ch$9,638 million, annual decrease when compared to the Ch$348,454 million recorded in 2024. This annual decrease was mainly the result of:
| ● | An annual decrease of Ch$20,979 million or 12.3% in income from exchange, indexation and accounting hedging of foreign currency, from a net gain of Ch$170,813 million in 2024 to a net gain of Ch$149,834 million in 2025. This performance was mostly associated with: (i) a decrease of Ch$292,669 million in gains from foreign currency exchange on our off-balance foreign exchange net asset position in derivatives held for hedge accounting (that mirror the on-balance liability exposure to foreign exchange risk), mainly attributable to the 9.5% appreciation of the Chilean peso against the U.S. dollar in 2025 when compared to the 13.8% depreciation observed in 2024, and (ii) gain from indexation for exchange rate on our portfolio of assets denominated in local currency but indexed to exchange rate (mostly leasing loans), explaining Ch$35,937 million of lower income, due to the same trend in exchange rate mentioned above, which more than offset the positive effect of higher average exposure to foreign exchange in 2025 when compared to 2024. These effects offset an annual decrease of Ch$307,627 million in losses from foreign currency exchange adjustments on our on-balance foreign exchange liability exposure (related to long-term senior bonds denominated in foreign currency) as a consequence of the same reasons mentioned above. |
| ● | An annual decrease of Ch$4,672 million or 28.1% in income from investments in other companies, from Ch$16,655 million in 2024 to Ch$11,983 million in 2025, mostly explained by a comparison base effect due to the sale of our total ownership in Artikos Chile S.A. to the Santiago Chamber of Commerce A.G. during December 2024, amounting to Ch$7,925 million. |
These effects were partly offset by:
| ● | An annual increase of Ch$9,094 million in other income (loss), net, coming from debt and other financial instruments at FVTPL. This change was mostly explained by: (i) a growth of 52.1% in average debt and other financial instruments at FVTPL balances in 2025 when compared to 2024, mostly associated with short-term notes issued by the Chilean Central Bank (“PDBC,” for its Spanish acronym), as a consequence of liquidity management activities, and (ii) the effect of lower mid-term interest rates during the year that benefited the fair value of longer-tenor securities booked in this portfolio. These effects were partly offset by short-term nominal interest rates in local currency that tracked the local monetary policy interest rate, which decreased (on average) from 6.2% in 2024 to 4.9% in 2025, reducing the interest rate accrued on these instruments over the year, and (ii) the effect of lower inflation on inflation indexation income earned on debt financial instruments at FVTPL denominated in CLF. |
| ● | An annual increase of Ch$6,825 million in the sale of financial assets at FVTOCI, from a net gain of Ch$8,050 million in 2024 to a net gain of Ch$14,875 million in 2025, which was mostly driven by the sale of local and foreign currency financial assets at FVTOCI that accumulated marking-to-market gains on equity accounts during 2025. This annual change was attributable to the downward trend observed in local interest rates throughout the year and specific shifts in long-term interest rates denominated in USD during the third quarter of the year, all allowing us to benefit from positive fair value adjustments of financial assets at FVTOCI denominated in CLF and USD in 2025. |
| ● | An annual growth of Ch$6,500 million in income (expense) from non-current assets and disposal groups held for sale not admissible as discontinued operations, from a net loss of Ch$458 million in 2024 to a net gain of Ch$6,042 million in 2025, steered by the sale of former branch locations closed as part of our service and sales model transformation program we have deployed over the last years. |
2023 and 2024. Our other income (loss), net amounted to Ch$348,454 million in 2024, which denoted a 37.6%, or Ch$210,254 million, annual decrease when compared to the Ch$558,708 million recorded in 2023. This annual decrease was mainly the result of:
| ● | An annual decrease of Ch$186,404 million in income from debt and other financial instruments at FVTPL, from Ch$340,417 million in 2023 to Ch$154,013 million in 2024. This performance was principally explained by: (i) the effect of lower short-term interest rates on the interest accrued on these securities, in line with the trend followed by local overnight rates that decreased from 10.5% in 2023 to 6.2% in 2024 on average, (ii) the effect of lower inflation on inflation indexation income earned on securities indexed to the UF, and (iii) an annual decrease in average balances of debt and other financial instruments at FVTPL due to the management of the High Quality Liquid Assets (“HQLA”) portfolio in light of the termination of the FCIC funding in 2024. |
| ● | An annual decrease of Ch$63,810 million in income from financial derivative contracts, from a net gain of Ch$11,214 million in 2023 to a net loss of Ch$52,596 million in 2024. This performance was mostly associated with: (i) higher losses by Ch$41,151 million due to exchange rate adjustments of our average net liability position in financial derivative contracts denominated in foreign currency, from a net loss of Ch$38,995 million in 2023 to a net loss of Ch$80,147 million in 2024, related to the sharp year-end depreciation of 13.8% of the Chilean peso against the U.S. dollar in 2024 when compared to a depreciation of only 2.8% of the Chilean peso against the U.S. dollar in 2023, together with greater net liability exposure to exchange rate through foreign currency derivatives in 2024, and (ii) an annual decline of Ch$25,969 million in income from fair value adjustments on financial derivative contracts resulting from shifts in both foreign and local interest rates that negatively impacted the fair value of such instruments. These effects were partly counterbalanced by a lower loss associated with our net liability position in financial derivative contracts indexed to the UF by Ch$3,539 million due to the effect of lower inflation. |
| ● | An annual decrease of Ch$21,162 million or 29.0% in other operating income, from Ch$72,939 million in 2023 to Ch$51,777 million in 2024. This result was almost entirely explained by a comparison base effect arising from the release of non-credit related provisions by approximately Ch$23,355 million by the end of 2023. |
These effects were partly offset by:
| ● | An annual increase of Ch$48,624 million or 39.8% in income from exchange, indexation and accounting hedging of foreign currency. This annual change was mainly due to: (i) an annual increase of Ch$94,424 million in gains from foreign currency exchange on our off-balance foreign exchange net asset position in derivatives held for cash flow hedge accounting that mirrors the on-balance liability exposure to foreign exchange through long-term debt denominated in foreign currency, due to the year-end depreciation of 13.8% of the Chilean peso against the U.S. dollar in 2024 when compared to the year-end depreciation of 2.8% of the Chilean peso against the U.S. dollar in 2023, and (ii) an annual increase of Ch$15,919 million in gains from indexation for exchange rate changes from our portfolio of assets denominated in local currency but adjusted by the effect of changes in the exchange rate, as a result of the mentioned trends in exchange rates. These effects were partly offset by: (i) an annual decline of approximately Ch$66,340 million in gains from foreign currency linked to our on-balance foreign exchange liability exposure, given both the higher depreciation of the Chilean peso against the U.S. dollar in 2024 when compared to 2023, and (ii) an annual decline in gains from foreign currency associated with the management of our foreign currency intra-day position and foreign exchange transactions carried out with customers due to a high basis for comparison. |
| ● | An annual increase of Ch$12,572 million in the sale of financial assets at FVTOCI, from a net loss of Ch$4,522 million in 2023 to a net gain of Ch$8,050 million in 2024. This change was particularly explained by the sale of financial assets at FVTOCI denominated in foreign currency in 2024 with positive fair value adjustments accumulated in other comprehensive income that benefited from the downward trend observed in short-term interest rates in local and foreign markets, as compared to losses recognized in 2023 due to a specific sale of financial assets at FVTOCI, also in foreign currency. |
| ● | An annual increase in income from investments in other companies from Ch$13,409 million in 2023 to Ch$16,655 million in 2024, which was primarily explained by the Ch$7,925 million sale of our total ownership in Artikos Chile S.A., a banking service provider (sociedad de apoyo al giro), to the Cámara de Comercio de Santiago A.G. on December 18, 2024. |
Allowances for Expected Credit Losses
We recognize allowances to cover possible credit losses in accordance with IFRS Accounting Standards as issued by the IASB. For statistical information related to our substandard loans and allowances for loan losses, see “Item 4. Information on the Company—Selected Statistical Information” and Note 11(f) to our audited consolidated financial statements as of and for the year ended December 31, 2025. According to regulations applicable to such periods, the amount of allowances charged to income in any period consists of net allowances for possible loan losses. During 2025, we implemented minor changes to the criteria for identifying a significant increase in credit risk (SICR). However, these adjustments did not result in significant changes to allowances for expected credit losses.
The following table sets forth information with respect to our provisions and allowances for expected credit losses and charge-offs for each of the years ended December 31, 2023, 2024 and 2025:
| For the Year Ended December 31, | % Increase (Decrease) | |||||||||||||||||||
| 2023 | 2024 | 2025 | 2023/2024 | 2024/2025 | ||||||||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||||||||||
| IFRS: | ||||||||||||||||||||
| Allowances: | ||||||||||||||||||||
| Gross allowances for expected credit losses(1) | Ch$ | 265,200 | Ch$ | 418,019 | Ch$ | 466,245 | 57.6 | % | 11.5 | % | ||||||||||
| Total loan loss recoveries | 63,256 | 65,313 | 71,383 | 3.3 | 9.3 | |||||||||||||||
| Net allowances for expected credit losses(1) | 201,944 | 352,706 | 394,862 | 74.7 | 12.0 | |||||||||||||||
| Charge-offs: | ||||||||||||||||||||
| Total charge-offs | 434,427 | 445,198 | 441,404 | 2.5 | (0.9 | ) | ||||||||||||||
| Net charge-offs | Ch$ | 371,171 |
Ch$ | 379,885 |
Ch$ | 370,021 |
2.3 | % | (2.6 | )% | ||||||||||
| Other asset quality data: | ||||||||||||||||||||
| Total loans | Ch$ | 37,651,274 | Ch$ | 38,936,296 | Ch$ | 39,254,314 | 3.4 | % | 0.8 | % | ||||||||||
| Average Loans | 36,933,465 | 38,147,536 | 39,302,122 | 3.3 | 3.0 | |||||||||||||||
| Allowances for loan losses | Ch$ | 710,187 | Ch$ | 693,434 | Ch$ | 712,003 | (2.4 | )% | 2.7 | % | ||||||||||
| Allowances for expected credit losses as a percentage of total loans | 1.89 | % | 1.78 | % | 1.81 | % | ||||||||||||||
| Net allowances for expected credit losses as a percentage of average loans | 0.55 | % | 0.92 | % | 1.00 | % | ||||||||||||||
| (1) | This amount includes allowances for loans to banks, loans to customers, contingent loans and allowances for impairments for credit risk from financial assets at fair value through other comprehensive income. |
2024 and 2025. Our allowances for expected credit losses recorded an annual increase of Ch$42,156 million, from Ch$352,706 million in 2024 to Ch$394,862 million in 2025. The annual increase was primarily the result of:
| ● | Expected credit losses for loans to customers (including contingent loans) and loans to banks that increased Ch$44,823 million on an annual basis, from Ch$417,010 million in 2024 to Ch$461,833 million in 2025. This annual increase was composed of Ch$40,913 million of higher expected credit losses for loans to customers and loans to banks and Ch$3,910 million of higher expected credit losses related to contingent loans. |
By the end of 2025, the baseline macroeconomic scenario included in our provisioning models reflected an outlook marked by gradual and modest adjustments in market variables. Over the next 12 months, economic activity is expected to grow at a moderate pace, broadly aligned with potential GDP growth. Inflation, before the potential effects of recent global changes in oil prices, was expected to continue easing and converging toward the Central Bank’s medium-term target of 3.0%. In this environment, borrowing costs are expected to track the monetary policy interest rate, which is expected to converge to neutral levels gradually. As a result, credit risk dynamics are expected to remain similar to those observed in previous periods. In this regard, during 2025, delinquency indicators increased compared to 2024, suggesting that the normalization of asset quality will take longer than previously anticipated. These higher levels of past-due loans, combined with a macroeconomic environment that is still transitioning toward normalized level, resulted in an increased probability of default for the 12-month horizon as of December 31, 2025 compared to 2024, reflecting a more cautious assessment of short-term credit conditions.
| ● | An annual increase of Ch$3,403 million in impairment for credit risk of other financial assets at amortized cost and fair value through other comprehensive income, from Ch$1,009 million in 2024 to Ch$4,412 million in 2025. This variation was mainly driven by increased expected credit losses associated with positions held in certificates of deposit issued by local banks. |
These effects were partly offset by an annual increase of Ch$6,070 million in recovery of past-due loans, from Ch$65,313 million in 2024 to Ch$71,383 million in 2025. This increase reflects continued strengthening of our collection strategies and operational practices, which contributed to improved recovery performance during the year.
As a result of these factors, our risk expenses ratio (ECLs to average loans) increased from 0.92% in 2024 to 1.01% in 2025.
Regarding delinquency, our past-due loans (loans 90 days or more past-due) reached Ch$721,003 million as of December 31, 2025, representing a 15.8% annual increase compared to the Ch$622,440 million recorded on December 31, 2024. Accordingly, our past-due ratio increased from 1.60% in 2024 to 1.83% in 2025. This increase reflected the persistence of financial and economic dynamics that continued to affect household disposable income and the financial condition of certain companies throughout the year, resulting in higher delinquency levels across the industry and across all lending products. In the Retail Banking segment, past-due loans increased Ch$64,881 million in 2025 compared to 2024, mainly driven by an increase of Ch$57,922 million in Personal Banking past-due loans over the same period. Both consumer and residential mortgage loan portfolios recorded past-due ratios that exceeded the levels observed prior to 2020. These trends were influenced by several factors affecting the industry as a whole, including unemployment rates that remained above historical averages, the cumulative impact of inflation on tradable and non-tradable goods that continued to negatively affect household disposable income after nearly four years of inflation above the Central Bank’s target range, and the lagged effects of subdued economic growth. Furthermore, past-due loans in SME Banking increased Ch$6,959 million in 2025 compared to 2024, primarily driven by the expiration of state-guaranteed programs that had provided financing to SMEs at more favorable terms in previous years, and the impact of modest economic activity on business opportunities for SMEs. Lower-than-expected performance in industries served by our Wholesale Banking segment also had an effect on SMEs, given their dependence on overall commercial activity.
In the Wholesale Banking segment, past-due loans increased Ch$33,682 million in 2025 compared to 2024. This increase was mainly caused by the slowdown in business activity across several industries, which resulted in weaker performance in Corporate Banking and Large Companies Banking. Even though private investment recorded a significant recovery in 2025, this improvement was primarily concentrated in the mining and energy sectors, which represent a limited share of our commercial loan portfolio served by these banking units. Other industries, including those related to exports, exhibited a more moderate evolution compared to 2024, contributing to the deterioration in the risk profile of certain wholesale customers.
Overall, the annual increase in past-due loans during 2025 reflected the combined effect of moderate economic activity, constrained household disposable income, higher unemployment compared to levels observed before 2020, the expiration of exceptional support programs for SMEs, and subdued performance in certain industries served by our wholesale banking segment, all of which contributed to the deterioration of credit behavior.
2023 and 2024. Our allowances for expected credit losses posted an annual increase of Ch$150,762 million, from Ch$201,944 million in 2023 to Ch$352,706 million in 2024. The annual increase in credit risk expenses was primarily the result of:
| ● | Expected credit losses for loans to customers (including contingent loans) and loans to banks increased by Ch$149,056 million on an annual basis, from Ch$267,954 million in 2023 to Ch$417,010 million in 2024. This annual increase was composed of Ch$99,381 million of higher expected credit losses for loans to customers and loans to banks and Ch$49,675 million of higher expected credit losses for contingent loans. |
In contrast to the expectations on the macroeconomic environment for 2024, which determined expected credit losses for the year ended December 31, 2023, the forecast for the next 12 months by the end of 2024 considers a more conservative improvement in economic variables that influence provisioning models. In this regard, for 2025 the expectation on economic activity considers potential GDP growth similar to the level observed in 2024, while inflation would remain above the midpoint of the Central Bank’s target range. Similarly, although a downward correction is expected in the short-term interest rates towards neutral levels, the annual change would be lower than the change observed in 2024. All these factors would contribute to maintaining customer payment capacity and delinquency at similar levels than those seen in 2024, which in turn translates into higher expected credit losses compared to what was projected a year ago, when the expected improvement in the economic landscape was much more pronounced. In addition, current delinquency levels, which remain above long-term average levels, also play a role in forward-looking provisioning models. Accordingly, the increase in past-due loans during 2024, has an impact on expected credit losses for the next 12 months.
| ● | An annual increase of Ch$3,763 million in impairments for credit risk of other financial assets at AC and financial assets at FVTOCI, from a release of Ch$2,754 million in 2023 to a risk charge of Ch$1,009 million in 2024. This change is primarily driven by increased probability of default for positions associated with fixed-income instruments (mainly related to certificates of deposits) issued by counterparties in the local financial sector. This trend represents a shift from the one observed in 2023, when we benefited from lower probabilities of default, given an investment portfolio more concentrated in fixed-income instruments issued by the Central Bank and the Chilean Government. The annual change also reflects prevailing financial environment during 2024, influenced by various economic factors that resulted in increased credit risk charges for our investment portfolio. |
These effects were partly offset by an annual increase of Ch$2,057 million in recoveries of written-off loans, from Ch$63,256 million in 2023 to Ch$65,313 million in 2024. This increase was the result of our ongoing efforts to enhance our recovery processes and methods, which resulted in better outcomes.
As a result of these drivers, our risk expenses ratio (ECLs to average loans) increased from 0.55% in 2023 to 0.92% in 2024.
Regarding delinquency, our past-due loans (loans 90 days or more past-due) increased by Ch$30,487 million or 5.2% on an annual basis, from Ch$591,953 million in 2023 to Ch$622,440 million in 2024. Accordingly, the past-due ratio (90 days or more past-due loans over total loans) increased from 1.57% in 2023 to 1.60% in 2024. The annual increase in past-due loans was mainly caused by higher delinquency in the Retail Banking Segment, as evidenced by past-due loans that increased by Ch$73,826 million in that segment. This was prompted by various dynamics seen across the industry, resulting in delinquency ratios for both consumer and residential mortgage loans that have continued converging to the levels seen before the COVID-19 pandemic. This convergence is due to the negative impact of several factors, such as higher-than-normal interest rates, an inflation rate that has remained above the two-year target range of 2% to 4% as set by the Chilean Central Bank, and unemployment that has stayed above historical figures, affecting customers’ payment capacity. Similarly, the SME sub-segment has also been negatively affected by the prevailing economic and financial scenario, which has resulted in increased borrowing costs, together with the end of former state-guaranteed programs that allowed them to apply for credits bearing lower interest rates. Accordingly, past-due loans in personal banking (composed of both consumer and residential mortgage past-due loans) increased by Ch$54,865 million in 2024 compared to 2023, whereas past-due loans associated with SME banking rose by Ch$18,961 million in the same period. On the other hand, the Wholesale Banking Segment experienced an improvement in delinquency, reflected by a decrease of Ch$43,339 million in past-due loans in 2024 compared to 2023. This change was primarily caused by a net improvement in payment behavior prompted by a more positive evolution on the dynamics of certain industries throughout 2024, such as the health services sector and specific cases in the real estate and construction sector, as well as the transportation sector, which resulted in improved risk profiles of some customers. Given all these factors, the past-due loan ratio in the Retail Banking segment increased from 1.68% in 2023 to 1.81% in 2024, while in the Wholesale Banking segment the delinquency ratio decreased from 0.90% in 2023 to 0.51% in 2024.
ECL Sensitivity Analysis
The following analysis contains a quantitative sensitivity assessment of the ECL in relation to the main macroeconomic assumptions included in the models used for that purpose. The ECL reflects an unbiased probability-weighted loss for a certain range of future economic scenarios. We determine the ECL based on three economic scenarios: (i) base case (60%), (ii) upside case (20%), and (iii) downside case (20%).
The sensitivity of our model to potential changes in projections for key macroeconomics variables (“MEV”) is determined as monetary amounts representing one-time impacts on ECL for Stages 1 and 2, which are broken down by the Retail and the Wholesale Banking Segments. However, since MEV are highly correlated, a scenario-based analysis is provided, which takes into consideration the cross-correlation of the MEV to determine a combine impact on ECL.
The following table sets forth the MEV we use for the analysis and the shifts applied to them. Shifts are defined as one standard deviation from the historical mean over a period of economic stability for each MEVs:
|
Macroeconomic Variable |
Shift 1 Standard Deviation (1) |
|||
| Real Sector MEVs | ||||
| GDP Growth Rate | (1.77 | ) | ||
| Unemployment rate | 0.52 | |||
| Government Expenditure | (3.71 | ) | ||
| Copper Price | (10.26 | ) | ||
| Financial and Monetary Sector MEVs | ||||
| Central Bank Interest Rate | 0.26 | |||
| Consumer Price Index | 0.54 | |||
| M1 Money Supply | (2.91 | ) | ||
| Exchange Rate | 4.91 | |||
| (1) | Values are expressed in percentage change, for example, the shock applied to the copper price is a decrease of 10.26%. |
We define a scenario-based analysis by establishing eight possible scenarios for the MEVs, as follows:
Real Sector MEVs
i) Scenario 1: Shift on GDP growth rate
ii) Scenario 2: Shift on Unemployment Rate
iii) Scenario 3: Shift on Government Expenditure
iv) Scenario 4: Shift on Copper Price
Financial and Monetary Sector MEVs
v) Scenario 5: Shift on Central Bank Interest Rate
vi) Scenario 6: Shift on Consumer Price Index
vii) Scenario 7: Shift on M1 Money Supply
viii) Scenario 8: Shift on Exchange Rate
For the scenario-based analysis one MEV is shifted and the rest of them are related to that shift by multiplying it with a related factor.
| MEV Scenarios | ||||||||||||||||||||||||||||||||
| MEV Sensitivity to MEV Scenarios | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | ||||||||||||||||||||||||
| (in percentage) | ||||||||||||||||||||||||||||||||
| Real Sector Variable | ||||||||||||||||||||||||||||||||
| GDP growth rate | (1.77 | ) | (0.18 | ) | (1.08 | ) | (0.01 | ) | 0.26 | (0.03 | ) | 0.37 | (0.20 | ) | ||||||||||||||||||
| Unemployment rate | 0.07 | 0.52 | 0.15 | (0.08 | ) | (0.18 | ) | (0.14 | ) | (0.14 | ) | (0.05 | ) | |||||||||||||||||||
| Government Expenditure | (1.11 | ) | (0.38 | ) | (3.71 | ) | 0.49 | 0.41 | 0.48 | 0.31 | 0.32 | |||||||||||||||||||||
| Copper Price | (0.26 | ) | 4.38 | 10.54 | (10.26 | ) | (2.67 | ) | (6.14 | ) | (0.25 | ) | (8.35 | ) | ||||||||||||||||||
| Financial and Monetary Variable | ||||||||||||||||||||||||||||||||
| Central Bank Interest Rate | (0.18 | ) | (0.31 | ) | (0.28 | ) | 0.08 | 0.26 | 0.11 | 0.29 | (0.02 | ) | ||||||||||||||||||||
| Consumer Price Index | 0.05 | (0.53 | ) | (0.72 | ) | 0.43 | 0.23 | 0.54 | 0.01 | 0.40 | ||||||||||||||||||||||
| M1 Money Supply | 1.89 | 1.77 | 1.54 | (0.06 | ) | (2.07 | ) | (0.04 | ) | (2.91 | ) | 0.97 | ||||||||||||||||||||
| Exchange rate | 2.33 | (1.47 | ) | (3.51 | ) | 4.30 | (0.25 | ) | 2.95 | (2.17 | ) | 4.91 | ||||||||||||||||||||
As depicted by the table above, MEV scenarios show correlations between most of them. For instance, in Scenario 5, an upward shift in the Central Bank Interest Rate leads to a decrease in M1 Money Supply, which goes the opposite way in Scenario 8, where an increase in the exchange rate leads to an increase in M1 Money Supply.
The following table sets forth the combined impact of shifts in all MEV for each scenario on our ECL:
| Range of MEV Scenarios Impact on the ECL | ||||||||
| Macroeconomic Variable | Retail Banking Segment | Wholesale Banking Segment | ||||||
| (in millions of Ch$) | ||||||||
| Real Sector Scenarios | (3,421) – 9,810 | (809) – 2,500 | ||||||
| Financial and Monetary Sector Scenarios | 1,140 – 4,631 | (991) – 2,737 | ||||||
Total Operating Expenses
The following table sets forth information regarding our total operating expenses for the years ended December 31, 2023, 2024 and 2025:
| For the Year Ended December 31, | % Increase (Decrease) | |||||||||||||||||||
| 2023 | 2024 | 2025 | 2023/2024 | 2024/2025 | ||||||||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||||||||||
| IFRS: | ||||||||||||||||||||
| Salaries | Ch$ | 359,996 | Ch$ | 354,850 | Ch$ | 355,863 | (1.4 | )% | 0.3 | % | ||||||||||
| Benefits and others | 187,297 | 185,572 | 190,359 | (0.9 | ) | 2.6 | ||||||||||||||
| Severance payments | 35,391 | 42,125 | 24,133 | 19.0 | (42.7 | ) | ||||||||||||||
| Personnel expenses | 582,684 | 582,547 | 570,355 | 0.0 | 2.1 | |||||||||||||||
| IT and Communication | 180,075 | 190,672 | 196,362 | 5.9 | 3.0 | |||||||||||||||
| Advertising | 39,617 | 33,948 | 42,466 | (14.3 | ) | 25.1 | ||||||||||||||
| Building maintenance | 49,699 | 51,606 | 52,338 | 3.8 | 1.4 | |||||||||||||||
| Rentals and insurance | 12,967 | 12,549 | 13,287 | (3.2 | ) | 5.9 | ||||||||||||||
| Other expenses | 120,897 | 127,921 | 125,180 | 5.8 | (2.1 | ) | ||||||||||||||
| Administrative expenses | 403,255 | 416,696 | 429,633 | 3.3 | 3.1 | |||||||||||||||
| Depreciation and amortization | 92,308 | 94,601 | 95,110 | 2.5 | 0.5 | |||||||||||||||
| Impairments of non-financial assets | 1,762 | 2,851 | 1,882 | 61.8 | (34.0 | ) | ||||||||||||||
| Other operating expenses | 36,090 | 36,039 | 33,958 | (0.1 | ) | (5.8 | ) | |||||||||||||
| Total Operating Expenses | Ch$ | 1,116,099 |
Ch$ | 1,132,734 |
Ch$ | 1,130,938 |
1.5 | % | (0.2 | )% | ||||||||||
2024 and 2025. Our total operating expenses showed a slight decrease of 0.2% or Ch$1,796 million on an annual basis, from Ch$1,132,734 million in 2024 to Ch$1,130,918 million in 2025. The annual change in total operating expenses was mainly attributable to:
| ● | An annual decrease of Ch$12,192 million or 2.1% in personnel expenses, from Ch$582,547 million in 2024 to Ch$570,355 million in 2025. This behavior was mostly attributable to the decrease of Ch$17,992 million in severance payments in 2025, mostly explained by the organizational restructuring process in 2024 steered by the branch network optimization carried out during the last year. This factor was partly offset by: (i) an annual increase of Ch$5,070 million in benefits granted to the staff as a result of the Bank’s strong performance, and (ii) salaries increasing by Ch$1,014 million or 0.3% resulting from the combined effect of the recognition of the cumulative inflation effect and reduced headcount. |
| ● | An annual decrease of Ch$2,081 million or 5.8% in other operating expenses, from Ch$36,039 million in 2024 to Ch$33,958 million in 2025, which was principally attributable to disciplined cost management, evidenced by lower expenses related to financial leasing operations due to a more proactive management of transactional and operational expenses from underlying assets, as well as reduced expenses related to operational risks. These effects were partly counterbalanced by higher other operational expenses linked to the increased use of credit cards in 2025. |
| ● | An annual decrease of Ch$969 million in impairments of non-financial assets, from Ch$2,851 million as of December 2024 to Ch$1,882 million as of December 2025, primarily attributable to lower impairment charges on property and equipment. This decrease was primarily due to the higher impairment charges recorded in 2024 in connection with branch consolidation initiatives carried out during that year. |
These effects were partly offset by:
| ● | An increase in administrative expenses by Ch$12,937 million or 3.1% in 2025 from the Ch$416,696 million recorded in 2024. This annual increase was mostly related to: (i) an annual growth of Ch$8,518 million in advertising and marketing expenses, steered by both sponsorship initiatives supported in 2025 and advertising campaigns that sought to highlight the benefits of our loyalty programs among credit card users and new services offered by our subsidiary Banchile Pagos, (ii) higher IT-related expenses by Ch$5,572 million in 2025 explained by an increase in cloud service expenses and expenses related to software licensing, together with technological transformation initiatives seeking to modernize and optimize our technological infrastructure, (iii) an annual increase of Ch$738 million in rentals and insurance expenses in connection with short-term lease agreements associated with our ATM network, in line with our strategy to enhance service accessibility and operational coverage, and (iv) additional administrative expenses by Ch$732 million resulting from higher maintenance of fixed assets expenses. These effects were partly offset by: (i) a decrease of Ch$2,245 million in expenses from product delivery services to customers as a result of efficiency initiatives, and (ii) a decrease of Ch$2,130 million in outsourced services, which was prompted by lower expenses related to external collection services due to the integration of our former collection services subsidiary, Socofin, into the Bank, allowing us to enhance our operational efficiency while improving customer experience. |
| ● | An annual increase of Ch$509 million in depreciation and amortization, from Ch$94,601 million in 2024 to Ch$95,110 million in 2025, mostly explained by the implementation of diverse IT projects related to cybersecurity infrastructure and our digital transformation strategy. |
2023 and 2024. Our total operating expenses showed a slight increase of 1.5% or Ch$16,635 million on an annual basis from Ch$1,116,099 million in 2023 to Ch$1,132,734 million in 2024. The annual change in total operating expenses was mainly attributable to:
| ● | An annual increase of Ch$13,441 million or 3.3% in administrative expenses, from Ch$403,255 million in 2023 to Ch$416,696 million in 2024. This annual increase was primarily explained by: (i) an annual rise of Ch$10,597 million or 5.8% in IT-related expenses, which were in turn sustained by updates of software licenses, further expenses related to IT support services and cloud usage that stemmed from internal developments aimed at supporting our digital strategy with a front-to-back approach, (ii) expenses associated with the maintenance of fixed assets that increased Ch$1,907 million in 2024 when compared to 2023, which was mostly explained by expenses related to the relocation of part of our ATM network, due to the expiration of a former commercial agreement and the implementation of a new one, and (iii) to a lesser degree, costs related to product delivery services to customers that experienced an annual rise of Ch$1,486 million in 2024 as compared to 2023. These factors were partly offset by an annual decrease of Ch$5,669 million or 14.3% in advertising and marketing expenses related to fewer campaigns and sponsorship activities in 2024 when compared to a year earlier, given our efficiency initiatives to improve our cost base. |
| ● | An annual increase of Ch$2,293 million or 2.5% in depreciation and amortization expenses, from Ch$92,308 million in 2023 to Ch$94,601 million in 2024. This increase was mainly associated with the amortization of intangible assets related to software licenses, which is in line with the ongoing deployment of our digital strategy through increasing capital expenditure over the last years. |
| ● | An annual increase of Ch$1,089 million or 61.8% in impairments of non-financial assets, from Ch$1,762 million in 2023 to Ch$2,851 million in 2024. This annual change was primarily caused by allowances set at the end of the second quarter of 2024 to cover expected losses for accounts receivable related to fee income from portfolio management services provided by our mutual funds subsidiary, and to a lesser degree, due to the closure of some of our branches as part of the efficiency and productivity initiatives. |
Income Tax
The Chilean tax system contains differences in the tax treatment for monetary correction (effect of inflation on equity), as well as provisions on individual loans and for charge-offs related to past-due loans, all of which has an impact on our effective tax rate through deferred taxes. Also, since 2016, no tax credits have been allowed from taxes paid on leased properties, with the exception of properties used in agricultural activities. For more information, see “Item 10. Additional Information—Taxation—Chilean Tax Considerations—Tax Reform Law No. 20,780.”
Over the last decade, there have been various changes in, and attempts to modify, the Chilean tax regime, which resulted in reforms enacted in 2014, 2016, 2020, and 2022 aimed at increasing tax collection to address social demands. Among other things, these reforms have: (i) changed the local tax system from a integrated to semi-integrated one, (ii) increased the statutory corporate tax rate for companies to 27%, (iii) raised taxes for higher-income individuals through new tax brackets and additional property taxes, (iv) reduced taxes for SMEs, (v) levied VAT on services that were not formerly taxed, such as those provided online, (vi) removed or limited tax exemptions, and (vii) improved tax enforcement in order to reduce tax evasion and tax avoidance. Some of these elements also affected the taxes paid on dividend distributions by local and foreign investors. For more information on the main topics addressed by these reforms, see “Item 4. Information on the Company—Regulation and Supervision— Modifications to Tax Legislation” and “Item 10—Additional Information—Taxation—Chilean Tax Considerations.”
These changes have not had a material impact on our results of operations or financial condition, although some of them have resulted in or will result in increased operating expenses and capital expenditures. However, we cannot rule out that future changes in the Chilean tax system will have an impact on the economy or the banking industry and, consequently, in our results of operations and profitability. For more information, see “Item 3. Key Information—Risk Factors—Risks Relating to our Operations and the Chilean Banking Industry— Changes in tax law could adversely affect our net income and could also result in higher taxes on distributions to our foreign shareholders.”
2024 and 2025. Our income tax expense was Ch$318,389 million in 2025, which represented an annual decrease of 4.6%, or Ch$15,212 million, from the Ch$333,601 million recorded in 2024. The annual change in income tax derived primarily from: (i) a decrease of Ch$78,276 million in net operating income before income tax in 2025 when compared to 2024, which led to a Ch$21,134 million decrease in income tax at the prevailing statutory corporate tax rate of 27.0%, and (ii) a Ch$3,698 million decrease in income tax as a result of higher tax deductions in 2025, arising from the recognition of the effect of interest accrued in specific fixed-income securities qualifying under Art. 104 of the Chilean tax law in 2025. These effects were partly offset by an annual increase of Ch$9,620 million in income tax, reflecting the effect of lower inflation (measured for tax purposes as the 12-month CPI variation from December of the prior year to November of the current year) on shareholders’ equity in 2025, which is tax deductible under the prevailing tax regulation in Chile. As a result of the above, our effective tax rate increased moderately from 21.1% in 2024 to 21.2% in 2025.
2023 and 2024. Our income tax expense amounted to Ch$333,601 million in 2024, representing an annual increase of 3.6%, or Ch$11,487 million, from the Ch$322,114 million recorded in 2023. Accordingly, our effective tax rate rose from 19.0% in 2023 to 21.1% in 2024. The annual change in income tax resulted primarily from: (i) lower tax deductions that translated into further income tax of Ch$36,277 million in 2024 when compared to 2023, mainly due to the sale of part of our FVTOCI fixed-income portfolio that benefited from the treatment defined in Art. 104 of the Chilean Tax Law for some publicly-traded securities during 2023; and (ii) higher income tax of Ch$6,007 million in 2024 as compared to 2023 due to the effect of lower inflation on our shareholders’ equity, which is tax deductible under the Chilean tax system, given the decrease in 12-month inflation used for calculation purposes. These changes were partly offset by an annual decrease of Ch$114,064 million in net operating income before income tax in 2024 as compared to 2023, which resulted in lower income tax of Ch$30,797 million in 2024 compared to 2023 at the statutory corporate tax rate of 27.0%.
Business Segments
To the extent that it is available and because we believe it is useful in analyzing our results, we have included information on a consolidated basis by business segments, disclosed in accordance with Chilean GAAP, which is aligned with the principles used by the CEO (CODM) to monitor and report our business performance to the Bank’s board of directors. A summary of differences between IFRS Accounting Standards and Chilean GAAP is presented under “Item 5. Operating and Financial Review and Prospects—Operating Results—Summary of Differences between Chilean GAAP and IFRS Accounting Standards.” Also, see Note 6 to our audited consolidated financial statements as of and for the year ended December 31, 2025 included elsewhere in this annual report for the reconciliation of business segment information from Chilean GAAP to IFRS Accounting Standards.
For management purposes, we have organized our operations and commercial strategies into four business segments, which are defined according to the type of products and services offered to target customers. These business segments are:
Retail Banking: This segment is focused on individuals and small and medium-sized companies whose annual sales do not exceed UF70,000 (approximately Ch$2,781.0 million as of December 31, 2025). The segment’s value proposition is primarily focused on consumer loans, commercial loans, current accounts, credit cards, credit lines and residential mortgage loans.
Wholesale Banking: This segment is focused on corporate customers and large companies whose annual sales exceed UF70,000 (approximately Ch$2,781.0 million as of December 31, 2025). This segment offers products and services focused on commercial loans, current accounts, cash management services, debt instruments, foreign trade, derivative contracts and leases, as well as corporate finance transactions.
Treasury: The revenue generated by this segment relates to the management of our liquidity and net positions subject to market risks. This segment also includes the results of our securities portfolio, our derivatives positions and currency trading.
Subsidiaries: This segment includes all companies controlled by us whose results are obtained individually by the respective company. As of December 31, 2025, this business segment consisted of:
| ● | Banchile Administradora General de Fondos S.A.; |
| ● | Banchile Asesoría Financiera S.A.; |
| ● | Banchile Corredores de Seguros Ltda.; |
| ● | Banchile Corredores de Bolsa S.A.; and |
| ● | Operadora de Tarjetas Banchile Pagos S.A. |
On July 29, 2024, we established Banchile Pagos, a company owned by Banco de Chile and Banchile Asesoría Financiera, which aims to provide acquiring and processing services for credit and debit cards as part of the four-party model prevailing in Chile. The establishment of Banchile Pagos was approved by the CMF on July 5, 2024.
On April 10, 2025, our board of directors resolved, subject to prior authorization from the CMF, to absorb our collection services subsidiary, Socofin, through the acquisition of its shares held by Banchile Asesoría Financiera S.A. Consequently, on July 4, 2025, Socofin merged into the Bank, which assumed the status of the legal successor and continuer of Socofin thereof, while Socofin was subsequently dissolved.
The accounting policies described in the summary of accounting principles in “Item 5. Operating and Financial Review and Prospects—Operating Results—Critical Accounting Policies” apply to all business segments. Matters such as the evaluation of segment performance and decision-making processes regarding goals and allocation of resources for each segment are based on a cost-benefit analysis and are aligned with our overall strategic goals.
In order to measure each segment’s financial performance, we use a business segment-based profitability system, which allows us to obtain information for each business segment relative to income, balances, revenues and expenses, among other indicators. This system has been internally developed in order to serve our specific requirements and we continue working to improve it. In addition, business segment information is subject to general internal auditing procedures to ensure its integrity and usefulness for management decision-making.
The financial information used to measure the performance of our business segments is not necessarily comparable with similar information from other financial institutions because it is based on Chilean GAAP. The accounting policies used to prepare our operating segment information are similar to those described in Note 2 to our audited consolidated financial statements as of and for the year ended December 31, 2025 included elsewhere in this annual report, except as noted below:
| ● | The net interest margin of loans and deposits is measured on an individual transaction basis, due to the difference between the effective individual transaction rate and our related fund transfer price in terms of maturity, re-pricing and currency. |
| ● | The results associated with gap management (interest rate and currency mismatches) are allocated to the business segments in proportion to the loans and demand deposits managed by each segment. |
| ● | For purposes of allocating the effect of funding through capital and reserves, the internal performance profitability system considers capital allocation in each segment in accordance with Basel guidelines. |
| ● | In addition to direct costs (consisting mainly of labor and administrative expenses of the business segments), we allocate all of our direct and indirect operating costs of back office and support units to each business segment by utilizing the most relevant business driver to assign such costs to a specific segment. |
| ● | We apply Chilean GAAP, as required by the CMF, when measuring and recording allowances for loan losses, assets received in lieu of payments, minimum dividend allowances and other minor items for internal reporting purposes. These accounting principles differ in certain respects from IFRS Accounting Standards. A description of these differences is presented below under “Item 5. Operating and Financial Review and Prospects—Operating Results—Summary of Differences between Chilean GAAP and IFRS Accounting Standards.” |
Net Operating Income before income tax, by Business Segment
The following table sets forth the net operating income before income tax, by business segment for each of the years ended December 31, 2023, 2024 and 2025:
| For the Year Ended December 31, | % Increase (Decrease) | |||||||||||||||||||
| 2023 | 2024 | 2025 | 2023/2024 | 2024/2025 | ||||||||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||||||||||
| Retail banking | Ch$ | 637,036 | Ch$ | 709,126 | Ch$ | 710,733 | 11.3 | % | 0.2 | % | ||||||||||
| Wholesale banking | 763,493 | 665,359 | 630,597 | (12.9 | ) | (5.2 | ) | |||||||||||||
| Treasury | 19,916 | 53,305 | 55,988 | 167.6 | 5.0 | |||||||||||||||
| Subsidiaries | 97,077 | 98,007 | 115,865 | 1.0 | 18.2 | |||||||||||||||
| Other | – | – | – | – | – | |||||||||||||||
| Net Operating Income before income tax | Ch$ | 1,517,522 |
Ch$ | 1,525,797 |
Ch$ | 1,513,183 |
0.5 | % | (0.8 | )% | ||||||||||
Retail Banking
2024 and 2025. Our retail banking segment recorded net operating income before income tax, of Ch$710,733 million in 2025, which represented an annual increase of 0.2% or Ch$1,607 million when compared to the Ch$709,126 million recorded in 2024. The annual increase in net operating income before income tax, in this segment was mainly the consequence of:
| ● | An annual increase of Ch$10,264 million or 0.5% in total operating income before expected credit losses, from Ch$1,894,425 million in 2024 to Ch$1,904,689 million in 2025. This growth was primarily driven by: (i) an annual increase of Ch$68,338 million or 8.8% in income from loans across all lending products but mainly from consumer loans, and (ii) an annual increase of Ch$38,801 million or 12.0% in net fee income, mainly attributable to higher fees from mutual funds management and transactional services. These positive effects more than offset the following factors: (i) an annual decrease in total operating income before expected credit losses, due to lower income from the management of financial gaps (term, currency and interest rate gaps) through Treasury activities that are partially allocated to this segment, mostly due to the effect of the termination of the FCIC funding in mid-2024, (ii) lower contribution from our inflation-indexed structural exposure as a result of lower inflation in 2025, and (iii) an annual decrease in income from time deposits and saving accounts as a consequence of the annual decline of 8.9% in average time deposit balances managed by the segment, and the negative effect of lower short-term interest rates. |
| ● | An annual decrease of Ch$5,370 million or 0.7% in total operating expenses, mainly due to: (i) an annual decrease of Ch$5,300 million or 1.6% in administrative expenses, mostly explained by stricter cost control measures and efficiency initiatives in 2025, particularly in relation to product delivery services to customers, and (ii) an annual reduction of Ch$1,249 million in personnel expenses, mostly associated with lower severance payments in 2025, which is aligned with organizational restructuring activities carried out last year as part of our network optimization program. |
These effects were partly offset by an annual increase of Ch$14,027 million or 3.8% in expected credit losses, under Chilean GAAP, from Ch$364,712 million in 2024, to Ch$378,739 million in 2025. This increase was primarily explained by a 5.3% annual increase in average loan balances, mostly concentrated on residential mortgage loans.
2023 and 2024. Our retail banking segment recorded net operating income before income tax, of Ch$709,126 million in 2024, which represented an annual increase of 11.3% or Ch$72,090 million when compared to the Ch$637,036 million recorded in 2023. The annual increase in net operating income before income tax, in this segment was mainly the consequence of:
| ● | An annual increase of Ch$70,586 million or 3.9% in total operating income before expected credit losses, from Ch$1,823,839 million in 2023 to Ch$1,894,425 million in 2024. This increase was primarily sustained by: (i) higher income from loans by Ch$104,813 million or 15.6% in 2024 as compared to 2023, which in turn was especially promoted by growth in income from consumer loans that increased Ch$99,560 million or 26.8% over the same period, as a result of increased average lending spreads and a 4.5% rise in average total loans managed by the segment, which is in line with the recovery evidenced in private consumption that has translated into further demand for installment loans and credit card loans, both bearing higher spreads, (ii) higher contribution of current accounts and other demand deposits managed by this segment to our funding by Ch$58,795 million or 18.1% on an annual basis, which was the result of the combined effect of both increased average volumes that expanded 3.8% in this segment and average margins that increased on the grounds of mid-term interest rates that increased on average, (iii) higher contribution of time deposits and saving accounts by Ch$29,416 million or 65.2%, which was primarily explained by a proactive pricing management based on advanced business analytics that has enabled us to accurately target diverse clusters of customers, and (iv) annual increment of Ch$2,049 million or 0.6% in net fee income, which was mainly steered by growth in fee income from mutual funds and investment funds management. These factors allowed us to offset lower income from interest rate management and term gapping, which is partly allocated to this segment given: (i) lower inflation (measured as UF variation) that adversely affected the contribution of our inflation-indexed exposure, (ii) the end of the FCIC program, and (iii) flattened yield curves given the prevailing levels of short-term interest rates. |
| ● | A slight annual decline of Ch$8,457 million or 2.3% in expected credit losses, under Chilean GAAP, from Ch$373,169 million in 2023, to Ch$364,712 million in 2024. The decrease was primarily explained by: (i) updated provisioning model parameters in December 2023 for the group-based loan portfolio, which set a high comparison base; and (ii) past-due loans (90 days or more) stabilized throughout 2024 in the range of 1.7% to 1.8% in the retail banking segment, which favorably compares to the persistent upward trend seen in the previous year that resulted in higher provisioning. |
These effects were partly offset by a slight annual increase of Ch$6,953 million or 0.9% in total operating expenses, from Ch$813,634 million in 2023 to Ch$820,587 million in 2024. This change was mainly explained by an annual increase of Ch$10,170 million or 3.1% in administrative expenses due to IT enhancement and internal developments expenses, which are in line with our digital strategy and initiatives we have deployed to improve efficiency and productivity. We believe these initiatives have enabled us to reinforce cost control and process optimization.
Wholesale Banking
2024 and 2025. Our wholesale banking segment recorded an annual decrease of 5.2% or Ch$34,762 million in net operating income before income tax, from Ch$665,359 million in 2024 to Ch$630,597 million in 2025.
This annual decline was mainly attributable to an annual decrease of Ch$62,919 million or 7.0% in total operating income before expected credit losses, from Ch$898,822 million in 2024 to Ch$835,903 million in 2025, largely explained by: (i) lower income from the management of financial gaps (term, currency and interest rate gaps) through Treasury activities that are partially allocated to this segment, mostly due to the effect of the termination of the FCIC funding in mid-2024, (ii) lower contribution from our inflation-indexed structural exposure as a result of lower inflation in 2025, and (iii) an annual decline of Ch$18,849 million in the contribution of current accounts and other demand deposits to our cost of funds, mostly explained by the decrease in short-term interest rates following the expansionary monetary stance adopted by the Central Bank after controlling mid-term inflation expectations, which in turn was partly counterbalanced by the effect of higher average balances managed by this segment. These effects were slightly offset by an annual increase of Ch$6,342 million in income from loans, steered by higher lending spreads in commercial loans offsetting the 0.6% decrease in average commercial loan balances in 2025 when compared to 2024, and (ii) a Ch$3,424 million increase in fee income in 2025 when compared to 2024, which was primarily associated with an increase in net fees from cash management services due to reduced interbank clearance fees.
The annual decline in total operating income, before expected credit losses, was partly offset by an annual decrease in expected credit losses by Ch$27,261 million, which was mostly explained by improved risk profiles of wholesale banking customers from the real estate and construction sectors in 2025.
2023 and 2024. Our wholesale banking segment recorded a 12.9% or Ch$98,134 million annual decrease in net operating income before income tax, from Ch$763,493 million in 2023 to Ch$665,359 million in 2024. This annual decline was mainly attributable to:
| ● | An annual decrease of Ch$56,122 million or 5.9% in total operating income, before expected credit losses, from Ch$954,944 million in 2023 to Ch$898,822 million in 2024, which was mostly influenced by the impact of lower revenues from interest rate and term gapping, which is partly allocated to this segment, as a result of diverse factors including lower contribution of our inflation-indexed exposure due to an annual decrease in inflation, the end of the FCIC program, and flattened yield curves, among others. This factor was partly compensated by: (i) higher contribution of current accounts and other demand deposits managed by the segment to our cost of funds by Ch$22,736 million or 7.8%, mostly associated with average current accounts and other demand deposits balances managed by the segment that increased 10.3% in 2024 as compared to 2023, which compensated a slight decrease in margins due to the decrease in short-term interest rates, and (ii) an annual increase in fee income by Ch$8,663 million or 10.6% on an annual basis, which was primarily associated with the trends followed by the increases in net fees from contingent loans, trade finance and cash management services. |
| ● | An annual increase of Ch$35,197 million in expected credit losses, under Chilean GAAP, from a net risk release of Ch$9,164 million in 2023 to a net risk charge of Ch$26,033 million in 2024. This annual increase was mainly explained by the effect of lower-than-normal expected credit losses in 2023 as a result of asset quality improvements experienced by several customers that participate in certain industries, such as construction, real estate, and transportation, that strengthened their financial condition by the end of 2023. In turn, during 2024 certain customers experienced worsening business environments in their industries, leading to a deterioration in their risk profiles. |
Treasury
2024 and 2025. Our Treasury segment posted a net operating income before income tax, of Ch$55,988 million as of December 2025, which denotes an annual increase of Ch$2,683 million, or 5.0%, when compared to the Ch$53,305 million recorded as of the same date in 2024.
This increase was mainly attributable to an annual increase of Ch$11,355 million in revenues generated by our Debt Securities desk, primarily driven by favorable changes in local interest rates that increased the mark-to-market value of our fixed-income portfolios, particularly during the second and fourth quarters of 2025. To a lesser extent, fair value adjustments of the FVTOCI portfolio managed by this desk benefited from specific trends in mid- and long-term USD-denominated interest rates, which we were able to realize through the sale of a portion of this portfolio during the third quarter of 2025. Additionally, our revenues were favorably impacted by lower cost of funds for fixed-income positions aligned with the decrease in short-term interest rates in 2025, reflected by the easing monetary cycle conducted by the Central Bank.
This effect was partly counterbalanced by:
| ● | An annual increase of Ch$3,403 million in impairments for credit risk of other financial assets at AC and financial assets at FVTOCI, from a net loss of Ch$1,009 million in 2024 to a net loss of Ch$4,412 million in 2025, mainly explained by a comparison base effect due to improved probabilities of default in 2024 that positively influenced credit quality indicators, particularly during the second half of that year. |
| ● | Lower revenues from the management of our financial gaps that are partly allocated to this segment (including term gapping and inflation-indexation results from our directional and structural net asset exposure to the UF), mainly attributable to the scheduled termination of the FCIC funding provided by the Chilean Central Bank in response to the COVID-19 pandemic in 2020 and 2021, and to a 101 basis points annual decline in inflation (measured as UF variation) in 2025 when compared to 2024. |
2023 and 2024. Our Treasury segment posted an increase of Ch$33,389 million, or 167.6% in net operating income before income tax, on an annual basis from Ch$19,916 million in 2023 to Ch$53,305 million in 2024. This increase was mainly attributable to an annual increase of Ch$38,538 million, or 172.9%, in total operating income before expected credit losses, from Ch$22,292 million in 2023 to Ch$60,830 million in 2024, which in turn was caused by:
| ● | Higher income from the management of the debt securities desk by Ch$35,993 million in 2024 when compared to 2023, mostly attributable to a comparison base effect due to the steady increase in local interest rates in the second half of 2023, which resulted in negative fair value adjustments. We profited from favorable interest rate changes due to: (i) positive marking-to-market in fixed-income securities denominated in local currency given auspicious changes in market factors in 2024; (ii) a less challenging funding cost due to the decrease of the monetary policy interest rate from 8.25% to 5.0%; and (iii) proactive management of our offshore fixed-income portfolio in 2024 that enabled us to profit from favorable interest rate changes. |
| ● | An annual increase of Ch$2,556 million in operating revenues from the management of our trading desk, driven by the effect of favorable changes in the nominal short-term interest rates on both derivatives and the funding cost of fixed-income positions, particularly during the first half of 2024, which was partly offset by higher valuation adjustments or XVAs due to changes in probabilities of default. |
These effects were partly offset by an annual increase of Ch$3,763 million in the impairments for credit risk of other financial assets at AC and financial assets at FVTOCI, due to higher probabilities of default in 2024 for some counterparties belonging to the local financial sector.
Subsidiaries
2024 and 2025. Our subsidiaries recorded net operating income before income tax, of Ch$115,865 million for the year ended December 31, 2025, representing an increase of 18.2%, or Ch$17,858 million, on an annual basis when compared to the Ch$98,007 million recorded in 2024. This annual increase in net operating income before income tax, was mainly attributable to:
| ● | An annual increase of Ch$19,083 million, or 42.2%, in net operating income before income tax earned by our mutual funds subsidiary, largely attributable to an annual increase of Ch$15,387 million in total operating income, before expected credit losses, due to higher fee income earned as a result of annual growth of 13.1% in average AUM alongside an annual increase of 10.6% in the investor base. The expansion in average AUM was driven by improved commercial strategies aimed at capturing increased investor demand and the positive momentum observed in the local capital market in fixed-income funds and equity funds throughout the year. To a lesser extent, total operating expenses decreased by Ch$3,695 million on an annual basis, mainly due to lower salaries and benefits associated with a reduction in headcount resulting from organizational restructuring. |
| ● | An annual increase of Ch$4,900 million, or 11.6%, in net operating income before income tax earned by our stock brokerage subsidiary. This growth was primarily driven by higher fee income, supported by an 85.4% increase in stock trading turnover in 2025 when compared to 2024. This effect was partly offset by higher total operating expenses of Ch$9,710 million in this subsidiary, mainly related to personnel expenses that rose by Ch$6,015 million in 2025 as a consequence of both a 4.6% increase in headcount and higher salaries and employee benefits resulting from the cumulative effect of inflation together with the renegotiation of the collective bargaining agreement carried out during 2025. |
These factors were partly offset by a net operating loss of Ch$4,751 million from our recently launched subsidiary Banchile Pagos, which reflects non-recurrent expenses associated with the start-up phase that began during the fourth quarter of 2025.
2023 and 2024. Our subsidiaries recorded net operating income before income tax, of Ch$98,007 million for the year ended December 31, 2024, representing an increase of 1.0% or Ch$930 million on an annual basis when compared to the Ch$97,077 million reached in 2023. This annual increase in net operating income before income tax, was mainly attributable to:
| ● | An annual increase of Ch$9,139 million or 25.3% in net operating income before income tax earned by our mutual funds subsidiary, which was mainly explained by: (i) an annual increase of Ch$13,088 million in total operating income before expected credit losses, largely attributable to higher fee income earned on the grounds of an annual growth of 38.1% in average AUM. The expansion in average AUM was based on new fixed-income funds launched by our mutual funds and investment funds management subsidiary, which seek to offer former Bank’s time deposit holders a wider portfolio, as they are now seeking to benefit from both the actual and the expected changes in local interest rates by investing in both fixed-income funds and equity funds as well. |
| ● | An annual growth of Ch$2,051 million in net operating income before income tax earned by our collection services subsidiary (Socofin), from a negative bottom line of Ch$554 million in 2023 to a positive net result of Ch$1,497 million in 2024. This annual change was primarily due to additional fee income of Ch$2,980 million in 2024 compared to 2023. |
These factors were partly offset by:
| ● | An annual decrease of Ch$4,596 million or 34.2% in net operating income before income tax earned by our insurance brokerage, from Ch$13,432 million in 2023 to Ch$8,837 million in 2024. This annual decline was explained by two main effects: (i) an annual decline of 3.0% in average written premiums because of changes in the dynamics of property and casualty insurance business linked to residential mortgage loans and lower dynamism in the non-credit related insurance business, and (ii) an increase in the reimbursement of non-accrued insurance premiums due to credit prepayment that resulted from the decline in local interest rates. Accordingly, fee income earned by this subsidiary decreased by Ch$5,616 million in 2024 as compared to 2023. |
| ● | An annual decline of Ch$2,800 million or 6.2% in net operating income before income tax from our stock brokerage subsidiary, from Ch$45,093 million in 2023, to Ch$42,294 million in 2024. This decrease is mainly related to greater administrative expenses that increased Ch$5,095 million in 2024 as compared to 2023, primarily because of further expenses associated with IT projects carried out in 2024 that pursued to enhance the company’s technological infrastructure. The increase in the cost base was partially offset by an annual increase of Ch$2,296 million or 2.4% that was primarily steered by higher net fee income on the grounds of a 7.3% increment in stock trading turnover in 2024 when compared to 2023. |
| ● | An annual decrease of Ch$2,788 million in net operating income before income tax from our financial advisory subsidiary, from Ch$2,984 million in 2023 to Ch$196 million in 2024. This annual decline was largely explained by subdued business activity in 2024, following a similar trend to the previous year. On the whole, subdued macroeconomic performance, together with political and economic uncertainty, has resulted in lower dynamism in the local capital markets, affecting income generation for our subsidiary. |
Summary of Differences between Chilean GAAP and IFRS Accounting Standards
We prepare our business segments’ financial information in accordance with Chilean GAAP, which differs in certain significant respects from IFRS Accounting Standards. The following table sets forth net income and equity for the years ended December 31, 2023, 2024 and 2025 in accordance with Chilean GAAP and under IFRS Accounting Standards:
| For the Year Ended December 31, | ||||||||||||
| Statement of Financial Position | 2023 | 2024 | 2025 | |||||||||
| (in millions of Ch$) | ||||||||||||
| Total Assets (Chilean GAAP) | Ch$ | 55,792,552 | Ch$ | 52,095,441 | Ch$ | 54,100,903 | ||||||
| Reconciliation to IFRS | (74,511 | ) | (39,899 | ) | 3,705 | |||||||
| Total Assets (IFRS) | 55,718,041 | 52,055,542 | 54,104,608 | |||||||||
| Total Liabilities (Chilean GAAP) | 50,555,267 | 46,472,440 | 48,301,368 | |||||||||
| Reconciliation to IFRS | (919,171 | ) | (921,794 | ) | (884,607 | ) | ||||||
| Total Liabilities (IFRS) | 49,636,096 | 45,550,646 | 47,416,761 | |||||||||
| Equity (Chilean GAAP) | 5,237,285 | 5,623,001 | 5,799,535 | |||||||||
| Reconciliation to IFRS | 844,660 | 881,895 | 888,312 | |||||||||
| Equity (IFRS) | Ch$ | 6,081,945 |
Ch$ | 6,504,896 |
Ch$ | 6,687,847 |
||||||
| For the Year Ended December 31, | ||||||||||||
| Statement of Income | 2023 | 2024 | 2025 | |||||||||
| (in millions of Ch$) | ||||||||||||
| Net Operating Income before income tax (Chilean GAAP) | Ch$ | 1,517,522 | Ch$ | 1,525,797 | Ch$ | 1,513,183 | ||||||
| Reconciliation to IFRS | 178,619 | 56,280 | (9,382 | ) | ||||||||
| Net Operating Income before income tax (IFRS) | 1,696,141 | 1,582,077 | 1,503,801 | |||||||||
| Net income for the year (Chilean GAAP) | 1,243,635 | 1,207,392 | 1,192,262 | |||||||||
| Reconciliation to IFRS | 130,392 | 41,084 | (6,849 | ) | ||||||||
| Net income for the year (IFRS) | Ch$ | 1,374,027 |
Ch$ | 1,248,476 |
Ch$ | 1,185,413 |
||||||
Certain differences exist between our net income and equity as determined in accordance with Chilean GAAP, which are used for management reporting purposes, as presented in the segment information, and our net income and equity as determined under IFRS Accounting Standards, as presented in our audited consolidated financial statements.
The principal differences that should be considered are the following:
| ● | Loan Loss Allowance |
The main difference between Chilean GAAP and IFRS 9 regarding loan loss allowances is that loan loss allowances under Chilean GAAP are calculated using expected loss models based on specific guidelines set by the CMF, which in turn are based on an expected losses approach. Additionally, if approved by the Board, a bank would be allowed to establish additional (voluntary) provisions to cover credit risk of non-predictable economic changes that could affect the macro-economic environment or a specific economic sector. Under IFRS 9 “Financial instruments,” loan loss allowances are calculated based on the “expected credit losses” models. The CMF has not yet adopted IFRS 9 for banks and therefore we have adjusted our financial statements to fully comply with IFRS Accounting Standards. The most significant impact of IFRS 9 on the Bank’s financial statements arises from the impairment requirements on credit risk matters. As a result of these differences in accounting policies, our net income for the year under IFRS Accounting Standards was Ch$102,373 million higher, Ch$33,359 million higher and Ch$36,712 million lower than our net income for the year under Chilean GAAP in 2023, 2024 and 2025, respectively. The impact on equity was Ch$758,443 million higher, Ch$791,802 million higher, and Ch$755,090 million higher than our equity under Chilean GAAP in 2023, 2024 and 2025, respectively.
| ● | Provisions for contingent credit risk |
Under Chilean GAAP, the Bank provisions for country risk cover the risk taken when holding with or committing resources to any foreign country. These allowances are established according to country risk classifications established by the CMF and therefore are not in accordance with IFRS Accounting Standards as issued by the IASB. The Bank has adjusted its financial statements accordingly. As a result of these accounting policies differences, our net income for the year under IFRS Accounting Standards was Ch$469 million lower, Ch$1,273 million lower and Ch$843 lower than our net income for the year reported under Chilean GAAP in 2023, 2024, and 2025, respectively. The impact on equity was Ch$7,668 million higher, Ch$6,395 million higher and Ch$5,552 higher than our equity under Chilean GAAP in 2023, 2024, and 2025, respectively.
Under Chilean GAAP, the Bank has established allowances related to the undrawn available credit lines and contingent loans in accordance with the CMF. With the adoption of IFRS 9, provisions for contingent loans are calculated based on expected credit losses. As a result of these accounting policies differences, our net income for the year under IFRS Accounting Standards was Ch$57,699 million higher, Ch$8,465 million higher and Ch$18,753 higher than our net income for the year reported under Chilean GAAP in 2023, 2024, and 2025, respectively. The impact on equity was Ch$28,413 million lower, Ch$19,948 million lower and Ch$1,195 lower than our equity under Chilean GAAP in 2023, 2024, and 2025, respectively.
Other differences that do not materially impact the statement of income, total assets or total liabilities:
| ● | Business Combination |
Under Chilean GAAP, our merger with Citibank Chile was accounted for under the pooling of interest method, while under IFRS Accounting Standards, and for external financial reporting purposes, the merger of the two banks was accounted for as a business combination in which we were the acquirer as required by IFRS 3 “Business Combinations.” Under IFRS 3, we recognized all acquired net assets at fair value as determined at the acquisition date, as well as the goodwill resulting from the purchase price in excess of net assets recognized. This accounting difference did not have impact on results for 2023, 2024 and 2025. However, the impact on equity (associated with results recognized before 2020) was Ch$33,410 million in 2023, 2024 and 2025.
| ● | Provision for dividends |
Chilean banks are required by the Chilean Corporations Law to distribute at least 30% of their net income to shareholders unless the shareholders unanimously approve the retention of profits. A bank may, however, according to the General Banking Act, be prohibited from distributing dividends to shareholders, even those representing the mandatory 30% of its net income, if such distribution would cause the bank to violate certain statutory capital requirements. Under Chilean GAAP and as approved by shareholders, we record a minimum dividend allowance of at least 60% of the period’s net distributable income, as permitted by the CMF. Under IFRS Accounting Standards, only the mandatory portion of dividends as required by the Chilean Corporations Law must be recognized (i.e., 30%). This accounting difference does not lead to differences in net income for the year. However, due to this difference our equity under IFRS Accounting Standards was Ch$238,859 million higher, Ch$235,010 million higher and Ch$248,276 million higher than our equity under Chilean GAAP in 2023, 2024 and 2025, respectively.
| ● | Assets Received in Lieu of Payment |
The Compendium of Accounting Standards for Banks, as issued by the CMF, requires that the assets received in lieu of payments are measured at historical cost or fair value, less cost to sell, if lower, on a portfolio basis and written off if not sold after a certain period of time in accordance with specific guidelines established by the CMF. Under IFRS Accounting Standards, these assets are deemed non-current assets held for sale and their accounting treatment is set by IFRS 5 “Non-Current Assets Held for Sale and Discontinued Operations.” In accordance with IFRS 5 these assets are measured at historical cost or fair value, less cost to sell, if lower. Accordingly, under IFRS Accounting Standards these assets are not written off unless they are impaired. As a result of this accounting policy difference, our net income for the year was Ch$339 million lower, Ch$6,007 million higher and Ch$6,407 million higher than our net income for the year under Chilean GAAP in 2023, 2024 and 2025, respectively. This resulted in an equity increase under IFRS Accounting Standards of Ch$2,566 million, Ch$8,573 million and Ch$14,980 million in 2023, 2024 and 2025, respectively, from the equity accounted under Chilean GAAP.
| ● | Suspension of Income Recognition on Accrual Basis |
In accordance with the Compendium of Accounting Standards, financial institutions must suspend recognition of income on an accrual basis in their statements of income for certain loans included in the impaired portfolio. IFRS 9 and IAS 39 did not allow the suspension of accrual of interest on financial assets for which an impairment loss has been determined. As of January 1, 2018, the Bank adopted IFRS 9. Under IFRS 9, interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets, except for financial assets that have subsequently become credit-impaired (or “Stage 3”), for which interest revenue is calculated by applying the effective interest rate to their amortized cost (i.e., net of expected credit losses provision). Off-balance interests are recorded as interest income only if the Bank receives the related payments. This difference does not materially impact our financial statements.
| ● | Deferred taxes |
The Bank records, when appropriate, deferred tax assets and liabilities for the estimated future tax effects attributable to differences between the carrying amount of assets and liabilities and their tax bases. All of the aforementioned differences had an impact on deferred taxes, which resulted in net income for the year under IFRS Accounting Standards that was Ch$48,227 million lower, Ch$15,196 million lower and Ch$2,533 higher than our internally (or under Chilean GAAP) reported net income for the year in 2023, 2024, and 2025 respectively. The impact of these adjustments resulted in lower equity under IFRS Accounting Standards by Ch$219,412 million, Ch$234,608 million and Ch$232,075 million in 2023, 2024 and 2025 respectively.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity Management
A sound liquidity strategy must be focused on ensuring that funds are available to meet our financial commitments when they are due and also to take advantage of attractive business opportunities. To accomplish this, we monitor funding liquidity risk (i.e., the inability to raise funds when they are needed without incurring abnormal costs) and trading liquidity risk (i.e., the inability to easily sell debt instruments held in our portfolios and/or offset price risk positions generated by derivative transactions). These risks can lead to potentially adverse scenarios that might make the Bank unable to meet its payment obligations and/or potential payment obligations when they become due. We manage these risks through a set of principles and tools, as detailed below.
Trading Liquidity Risk Management
We believe that holding debt instruments with deep secondary markets ensures trading liquidity. Central Bank and Government instruments and short-term certificates of deposits issued by banks have these characteristics. These kinds of instruments are held in our trading portfolio while comprising a portion of our portfolio of financial instruments measured at fair value through other comprehensive income as well. In addition, mortgage bonds issued by banks resident in Chile, as well as corporate bonds are also part of our portfolio of financial instruments measured at fair value through other comprehensive income.
Even though mortgage and corporate bonds show much less trading liquidity than Central Bank and Government fixed-income instruments, the former may be sold to the Central Bank under repurchase agreements. Government instruments and short-term certificates of deposits issued by banks can also be sold to the Central Bank under repurchase agreements.
Funding Liquidity Risk Management
Diversifying funding sources and avoiding a concentration of large fund providers or funding maturity dates are means to enhance funding liquidity. We diversify our funding structure through the establishment of triggers that allow us to monitor concentrations of funding sources, maturities, currencies, etc. The aggregation of significant fund providers by currency is monitored as a percentage of our current liabilities (i.e. excluding equity accounts).
Our funding strategy aims to satisfy our customers’ needs by enhancing our product offering while maintaining a prudent liability diversification profile in terms of currencies and maturities. For that reason, we are focused on broadening the current core and diversified funding obtained through the retail banking business. In addition, we are issuing either senior or subordinated bonds from time to time in order to match both the liquidity and the interest rate risk generated by our long-term loans.
In addition to internal metrics in place to monitor liquidity, the Central Bank and the CMF have established regulations on liquidity matters, which include minimum reserve requirements for demand and time deposits, minimum “technical reserve” requirements for demand deposits, as mentioned earlier in this document, and the establishment of regulatory liquidity metrics and thresholds in alignment with Basel III principles, such as the LCR and the NSFR. Also, banks must comply with maximum levels of net cash outflows over 30 and 90 days, as defined in the C46 index.
The Central Bank has established a minimum reserve requirement of 9.0% for demand deposits and 3.6% for time deposits. The reserve requirement must be complied with separately by currency (Chilean Peso and foreign currencies). In addition, we are subject to a “technical” reserve requirement for demand deposits applicable to all banks that operate in Chile. The daily balance of deposits and obligations payable on demand, except for obligations with other banks, may not exceed 2.5 times the amount of the bank’s Total Regulatory Capital. Chilean banks are not required, however, to maintain the minimum reserves referred to above for deposits and obligations subject to this “technical” reserve. In terms of liquidity metrics, the Central Bank requires banks to comply with LCR and NSFR limits of 100% and 90% as of December 31, 2025 (100% for NSFR as of the date of this annual report), as well as a limit of one time the CET1 Capital for the net foreign currency outflows over a 30-day period as measured by the C46 index.
For more information, see “Item 4. Information on the Company—Regulation and Supervision—Reserve Requirements,” “Item 4. Information on the Company—Regulation and Supervision—Liquidity Risk Regulations” and “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources— Regulatory Liquidity Requirements.”
Financing Plan Guidelines
Every year, financing needs arising from operating activities are projected in order to gauge our ability to timely and effectively raise funds in local and foreign markets. For these purposes, we evaluate core commercial banking balances, namely, loans to customers and demand deposits, from which an in-depth analysis of potential sources of funding are assessed, based on public information, liquidity requirements, interest rate trends and debt issuance programs in place in Chile and abroad.
The following are the key drivers our Treasury evaluates in order to determine our ability to meet our cash requirements for the next fiscal year:
| ● | Balance sheet growth expected in the business plan for the next fiscal period, which is mainly associated with growth in loans to customers, loans and advances to banks, positions to be taken in securities measured at fair value through profit and loss statement (trading securities), securities measured at fair value through other comprehensive income, securities measured at amortized cost in order to comply with internal and regulatory liquidity thresholds, and any purchase or investment in fixed-assets or affiliates. |
| ● | Expected growth in demand deposits for the next fiscal period, including the reserve requirements and technical reserves, if any, that may be required for forecasted balances. |
| ● | Expected growth in time deposits for the next fiscal period, including reserve requirements. |
| ● | Scheduled maturity of medium-term and long-term financial assets and liabilities. |
| ● | Maximum participation that local pension funds could be expected to invest in Banco de Chile’s long-term bonds, based on their historical highest participation in Banco de Chile’s securities and the regulatory limits that pension funds managers are subject to per type of fund, considering funds C, D, E of the pension fund system, which are more oriented to fixed-income securities. |
| ● | Maximum participation that local mutual funds have reached in Banco de Chile’s long-term bonds. |
| ● | The unused amount of long-term debt programs in Chile or abroad by which we may raise funding effectively and on a timely basis. |
For more information on our liability structure, see “Item 5. Liquidity And Capital Resources—Borrowings, Off-Balance Sheet Arrangements and Tabular Disclosure of Contractual Obligations” below.
Regulatory Liquidity Requirements
The Bank establishes a liquidity risk tolerance to maintain a suitable liquidity position to meet all its contractual obligations, at any time and circumstances, as well as to meet the minimum requirements defined by regulators, as established by Chapter III.B.2.1 of the Compendium of Financial Regulations of the Chilean Central Bank and Chapters 12-20 and 21-14 of the RAN of the CMF. In addition, the Bank seeks to ensure the availability of funds to take advantage of business opportunities and to be duly prepared to face extreme scenarios of stress and/or liquidity contingency.
The guidelines for measuring liquidity risk in Chile are mainly focused on:
| ● | C46 index or C46 report: Effective since 2015, this index analyzes the expected cash flows for the following 30 and 90 days, broken down by currency. Net outflows may not exceed the amount of CET1 Capital for the following 30 days or two times that amount for the following 90 days. |
On March 8, 2022, the Chilean Central Bank removed the regulatory limit for 30-day and 90-day cash flows mismatches in local currency while maintaining the limit for 30-day cash flows mismatches in foreign currency as measured by the C46 index.
| ● | Liability Concentration or C47 report: Effective since 2016, this report focuses on liabilities analysis from the concentration, maturity and renewal perspectives. As a result, this report characterizes the balance sheet liability structure considering retail, non-financial wholesale, and financial wholesale counterparties. |
| ● | Basel III Liquidity Requirements: Effective since 2016, and revised in 2018, these guidelines address liquidity requirements through C49 report (formerly C48 report between 2016 and 2018) and, more specifically, by means of the follow-up of both the LCR and the NSFR. |
On May 4, 2018, the Central Bank outlined the main guidelines for banks to measure and control the liquidity position while establishing a five-year period for minimum LCR requirements to be fulfilled by banks, starting at 60% in 2019 and reaching the final limit of 100% in 2023 (with annual increases of 10%). Subsequently, on March 8, 2022, the Chilean Central Bank introduced some changes to this phase-in by: (i) bringing forward the increase of the LCR limit to 90% for the period between January and June 2022 and to 100% from June 2022 onwards, (ii) incorporating a regulatory limit for NSFR starting at 60% in June 2022 and increasing 10% in January 2023 and subsequently 10% per year until reaching 100% in January 2026, and (iii) an specific treatment for securities pledged as “technical reserve” in order to take them into account as high-quality liquid assets, among other topics.
As of December 31, 2025, our LCR and NSFR were 198% and 118%, respectively, on a consolidated basis. Accordingly, we were fully in compliance with the prevailing regulatory requirements.
Likewise, in the most recent amendment to Chapter III.B.2.1 of the Compendio de Normas Financieras the Central Bank also established that banks are required to carry out an Internal Liquidity Adequacy Assessment Process (“ILAAP”). The final rules associated with ILAAP were published on January 16, 2023, based on which we submitted such report to the CMF for first time in April 2023, on a summarized basis, as permitted by the regulation.
We supplement regulatory reports and metrics with internally-developed reports that are aimed at providing us with a broader perspective on liquidity matters. The market access report, the liquidity buffer, intraday liquidity and liquidity ratios, are the main internal reports we use in order to monitor liquidity while establishing internal alerts and triggers for decision making. For more information see Note 44(3) to our audited consolidated financial statements.
Mandatory metrics requested by the CMF and internal metrics developed by us utilizing internal models are prepared on a daily basis by the Financial Control of Treasury and Capital Area, which reports to the CFO. These reports are submitted on a daily basis as well to the Market Risk Area and the Treasury Division, which are in charge of overseeing and managing our liquidity, respectively. The finance, international and market risk committee also monitors these metrics on a monthly basis. For further information on the committee, see “Item 6. Directors, Senior Management and Employees—Board Practices—Governance Practices—Finance, International and Market Risk Committee.”
Given our internal metrics and policies, we believe that our working capital is sufficient to meet our present needs.
Cash Flows
The tables below set forth our principal sources of cash. Our subsidiaries are not an important source of cash for us and therefore do not significantly affect our ability to meet our cash obligations. No legal, contractual or economic restrictions exist on the ability of our subsidiaries to transfer funds to us in the form of loans or cash dividends as long as they abide by the regulations in the Chilean Corporations Law regarding loans to related parties and minimum dividend payments.
| For the Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| (in millions of Ch$) | ||||||||||||
| Net cash from operating activities | Ch$ | 1,725,787 | Ch$ | 3,694,137 | Ch$ | 826,075 | ||||||
2024 and 2025. Net cash flows from operating activities recorded a decrease from a net inflow of Ch$3,694,137 million in 2024 to a net inflow of Ch$826,075 million in 2025. The annual change of Ch$2,868,062 million was principally explained by: (i) a net annual increase of Ch$3,024,730 million in net cash outflows associated with investment in fixed-income instruments held-for-trading, using the proceeds from long-term debt issued in the second half of 2025, and (ii) further decrease in lending activity associated with loans and advances to banks that resulted in a net cash inflow of Ch$1,589,576 million in 2025 when compared to 2024, due to lower balance in loans and advances to local banks in 2025 and lower balances in overnight deposits in the Central Bank in 2024. These effects were partly counterbalanced by: (i) an annual decrease of Ch$984,956 million in the net cash outflow associated with the decrease in time deposits and saving accounts balances which decreased 1.4% in 2025 as compared to the annual decline of 7.8% in 2024, and (ii) lower cash outflows related to loans to customers by Ch$767,815 million in 2025 when compared to 2024, which was the consequence of a tempered annual expansion of 0.8% in total loans to customers.
2023 and 2024. Net cash flows from operating activities recorded an increase from a net inflow of Ch$1,725,787 million in 2023 to a net inflow of Ch$3,694,137 million in 2024. The annual change of Ch$1,968,350 million was mostly explained by: (i) a net annual decrease of Ch$2,193,563 million in cash outflows related to loans and advances to banks, which in turn was mainly driven by both a local reference rate remained well above the neutral interest rate in 2023, making these deposits attractive from a profitability point of view, and the liquidity surplus we had in 2023 due to the FCIC funding. However, both factors came to an end with the termination of the FCIC funding and the gradual convergence of the monetary policy interest rate to the neutral level, which reduced the appetite for these overnight deposits with the Central Bank during 2024; (ii) lower cash outflows related to fixed-income held-for-trading securities by Ch$1,683,057 million, given the same drivers in relation to the changes in short-term interest rates and the end of the FCIC funding, for which we had to disinvest in this kind of securities; and (iii) the annual increase of Ch$1,002,596 million in the cash inflow linked to demand deposits and current accounts that increased 7.0% in year-end balances on an annual basis, which replaced time deposits balances. These effects were partly counterbalanced by: (i) a net annual decrease of Ch$2,455,968 in net inflow from time deposits, mostly driven by the annual reduction in short-term interest rates that negatively affected the appetite for this investment choice, and (ii) an annual increase of Ch$621,866 million in the cash outflow associated with loans to customers, as reflected by year-end loan balances increasing 3.3% in 2024 as compared to the 2.5% increment of 2023.
| For the Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| (in millions of Ch$) | ||||||||||||
| Net cash from (used in) investing activities | Ch$ | (346,500) | Ch$ | 2,028,804 | Ch$ | (1,189,085) | ||||||
2024 and 2025. Our cash flows from (used in) investing activities recorded an annual reversal from a net cash inflow of Ch$2,028,804 million in 2024 to a net cash outflow of Ch$1,189,085 million in 2025. The annual change of Ch$3,217,889 million in the cash flow used in investing activities was principally the consequence of: (i) a net annual increase in the cash outflows associated with investment in fixed-income instruments measured at fair value through other comprehensive income, from a net inflow of Ch$1,611,197 million in 2024, when we liquidated part of the portfolio to repay the FCIC obligation with the Central Bank that expired in July 2024, to a net cash outflow of Ch$1,473,436 million in 2025, when we increased positions in these kinds of instruments using proceeds from debt issuances and the exchange of certain securities formerly maintained at amortized cost that were close to maturity for newly series of bonds issued by the Chilean Government, which we recorded as fair value through other comprehensive income securities, and (ii) a net annual decrease of Ch$126,229 million in the cash inflows coming from fixed-income securities held at amortized cost resulting from the difference between a net cash inflow of Ch$506,337 million in 2024 (from the liquidation of securities held to repay the FCIC obligation) and a net cash inflow of Ch$380,108 million in 2025 (from the exchange of certain Chilean Government securities for new bonds issued by the Chilean Government).
2023 and 2024. Our cash flows from (used in) investing activities recorded an annual change of Ch$2,375,304 million, from a net outflow of Ch$346,500 million in 2023 to a net inflow of Ch$2,028,804 million in 2024. The annual change in the cash flow from investing activities was principally the consequence of: (i) a net annual increase of Ch$1,353,584 million in the inflow related to disinvestments in fixed-income securities measured at fair value through other comprehensive income, from a net inflow of Ch$257,613 million in 2023 to a net inflow of Ch$1,611,197 million in 2024, as a result of an annual drop in year-end balances in 2024 when compared to a year ago given both the liquidation of certain fixed-income positions and the scheduled maturity of government bonds that were not renewed (or were reinvested in fixed-income securities measured at amortized cost) in order to repay the FCIC obligation with the Central Bank that expired in July 2024, and (ii) a net annual decrease of Ch$999,968 million in the net outflow of positions taken in fixed-income securities measured at amortized cost, given the same aforementioned factors related to the liquidation of fixed-income positions in liquidity deposits provided by the Central Bank in order to fulfill our FCIC obligation with the Central Bank.
| For the Year Ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| (in millions of Ch$) | ||||||||||||
| Net cash from (used in) financing activities | Ch$ | (1,556,020) | Ch$ | (5,614,179) | Ch$ | 110,759 | ||||||
2024 and 2025. The net cash from (used in) financing activities recorded a reversal from a net outflow of Ch$5,614,179 million in 2024 to a net inflow of Ch$110,759 million in 2025. This annual change of Ch$5,724,938 million was mainly caused by: (i) the absence in 2025 of the Ch$4,348,400 million cash outflow recorded in 2024 in connection with the repayment of the FCIC facility, which had been granted by the Central Bank to local banks in the context of the COVID-19 pandemic, and (ii) an annual increase of Ch$1,729,703 million in net cash inflow from current bonds issued in 2025, as part of a funding strategy deployed by our Treasury to manage financial gaps in the banking book and prepare for the expected expansion of the loan book during 2026, through the issuance of long-term bonds denominated in UF (or in foreign currency swapped to UF), mainly in the local market. These effects were to some degree offset by an annual increase of Ch$542,360 million in repayment of capital and interest associated with the scheduled maturity of formerly issued bonds.
2023 and 2024. The net cash from (used in) financing activities increased Ch$4,058,159 million, from a net outflow of Ch$1,556,020 million in 2023 to a net outflow of Ch$5,614,179 million in 2024. This annual increase in the outflow associated with financing activities was mainly caused by: (i) an annual increase of Ch$4,348,400 million in net outflow related to borrowings from the Central Bank, which was entirely explained by the full repayment of the FCIC funding with the Central Bank according to the scheduled maturity of this obligation, and (ii) an annual decline of Ch$211,842 million in net inflow related to proceeds from bond issuances, based on lower funding needs for longer terms. These effects were moderately counterbalanced by: (i) an annual decrease of Ch$365,425 million in net outflow due to payments of interest and capital on long-term bonds issued by us, or redemption of bond issuances, given the maturity profile of our long-term funding structure and lower bond issuances in the last three years, (ii) an annual increase of Ch$133,840 million in net inflow from obligations with foreign banks, resulting from the annual increase of 32.7% in trade finance loans in 2024, which compared to a 19.0% annual increment in 2023, and (iii) an annual decrease of Ch$50,997 million in the amount of dividends distributed to our shareholders in 2024, explained by both lower net income in 2023 when compared to 2022, and lower payout ratio on the net distributable income earned during the previous year from 100% in 2023 to 80% in 2024.
Asset and Liability Management
Our asset and liability management policy aims to maximize net interest income, return on assets and average equity in light of interest rate, liquidity and foreign exchange risks, within the limits of Chilean banking regulations and our internal risk management policies. Subject to these constraints, we may from time to time take mismatched positions as to interest rates or, in certain limited circumstances, foreign currencies when justified, in our view, by market conditions and prospects, and subject to our asset and liability management policies. Our board of directors determines our asset and liability policies. See Note 44 to our audited consolidated financial statements as of and for the year ended December 31, 2025 included elsewhere in this annual report.
Borrowings by Type of Liability and Terms
The following table presents the maturities of each borrowing category for the indicated year.
| As of December 31, 2024 | As of December 31, 2025 | |||||||||||||||||||||||
| Long-term | Short-term | Total | Long-term | Short-term | Total | |||||||||||||||||||
| (in millions of Ch$) | ||||||||||||||||||||||||
| IFRS: | ||||||||||||||||||||||||
| Borrowings from financial institutions: | ||||||||||||||||||||||||
| Central Bank credit lines for renegotiation of loans | Ch$ | – | Ch$ | – | Ch$ | – | Ch$ | – | Ch$ | – | Ch$ | – | ||||||||||||
| Other borrowings from the Central Bank | – | – | – | – | – | – | ||||||||||||||||||
| Borrowings from domestic financial institutions | – | – | – | – | – | – | ||||||||||||||||||
| Borrowings from foreign institutions | – | 1,103,468 | 1,103,468 | 136,255 | 1,160,496 | 1,296,751 | ||||||||||||||||||
| Debt issued: | ||||||||||||||||||||||||
| Senior Bonds | 8,515,921 | 1,173,298 | 9,689,219 | 9,180,960 | 1,441,258 | 10,622,218 | ||||||||||||||||||
| Commercial papers | – | – | – | – | 178,112 | 178,112 | ||||||||||||||||||
| Subordinated bonds | 954,970 | 113,909 | 1,068,879 | 979,218 | 107,875 | 1,087,093 | ||||||||||||||||||
| Mortgage finance bonds | 412 | 438 | 850 | 414 | 107 | 521 | ||||||||||||||||||
| Other financial obligations | – | 284,479 | 284,479 | – | 367,323 | 367,323 | ||||||||||||||||||
| Total other interest-bearing liabilities | Ch$ | 9,471,303 | Ch$ | 2,675,592 | Ch$ | 12,146,895 | Ch$ | 10,296,847 | Ch$ | 3,255,171 | Ch$ | 13,552,018 | ||||||||||||
The Bank was in full compliance with all terms and conditions of its debt instruments during 2024 and 2025.
Central Bank Borrowings
Central Bank borrowings include credit lines for the renegotiation of loans and other borrowings. Historically, the Central Bank provided credit lines for the renegotiation of mortgage loans due to the need to refinance debts as a result of the economic recession and crisis of the Chilean banking system from 1982 to 1985. These credit lines were linked to the UF index and carry real interest rates.
In the context of the COVID-19 pandemic, the Central Bank provided lending facilities for all banks holding commercial or consumer loans on their balance sheet, conditional on the increase in loan balances (FCIC). On July 1, 2024, the last tranche of the FCIC program expired and was fully paid off by us on that date.
Borrowings from Foreign Financial Institutions
We have short- and long-term borrowings from foreign banks. These loans are denominated in foreign currency and are used to fund our foreign trade loans and carried an average nominal interest rate of 4.50% in the year ended December 31, 2025. The outstanding maturities of these borrowings as of December 31, 2025 were, as follows:
| As of December 31, 2025 | ||||
| (in millions of Ch$) | ||||
| IFRS: | ||||
| Due within 1 year | Ch$ | 1,160,496 | ||
| Due after 1 year but within 2 years | 136,255 | |||
| Due after 2 years but within 3 years | — | |||
| Due after 3 years but within 4 years | — | |||
| Due after 4 years but within 5 years | — | |||
| Due after 5 years | — | |||
| Total foreign borrowings | Ch$ | 1,296,751 | ||
Senior Long-Term Bonds
Our bonds are primarily denominated in local currency, mainly in UF, and, to a lesser extent, in foreign currencies, including Swiss francs (CHF), Hong Kong dollar (HKD), Japanese Yen (JPY), Mexican pesos (MXN) and Australian dollar (AUD).
As of December 31, 2025, bonds denominated in local currency, with semi-annual interest and principal, accounted for Ch$8,585,188 million, all denominated in UF, with a weighted average annual interest rate of 2.54%. As of the same date, bonds denominated in foreign currency, most of them with annual interest and principal payments, amounted to Ch$2,037,030 million and carried an average annual interest rate of 3.28% (excluding the effect of exchange rate adjustments). In general, long-term bonds, denominated in both local and foreign currency, are intended to finance loans that had a maturity of more than one year.
The maturities of bonds denominated in local currency (Ch$ or UF) as of December 31, 2025 were:
| As of December 31, 2025 | ||||
| (in millions of Ch$) | ||||
| IFRS: | ||||
| Due within 1 year | Ch$ | 1,276,117 | ||
| Due after 1 year but within 2 years | 990,641 | |||
| Due after 2 years but within 3 years | 1,010,388 | |||
| Due after 3 years but within 4 years | 880,338 | |||
| Due after 4 years but within 5 years | 680,261 | |||
| Due after 5 years | 3,747,443 | |||
| Total bonds | Ch$ | 8,585,188 | ||
During 2025, we issued bonds denominated in UF for an amount equivalent to Ch$1,572,815 million at a weighted average real interest rate of 3.05% and tenors in the range of 1 to 20 years.
The maturities of bonds denominated in foreign currency as of December 31, 2025 were:
| As of December 31, 2025 | ||||
| (in millions of Ch$) | ||||
| IFRS: | ||||
| Due within 1 year | Ch$ | 165,141 | ||
| Due after 1 year but within 2 years | 388,351 | |||
| Due after 2 years but within 3 years | 126,820 | |||
| Due after 3 years but within 4 years | 96,792 | |||
| Due after 4 years but within 5 years | 58,037 | |||
| Due after 5 years | 1,201,889 | |||
| Total bonds | Ch$ | 2,037,030 | ||
During 2025, we issued bonds denominated in foreign currency for an amount equivalent to Ch$350,331 million at a weighted average interest rate of 3.45% and a term of 7 years.
Commercial paper
During 2025, we issued commercial paper in an amount of Ch$819,195 million, bearing an average interest rate of approximately 4.52%.
Subordinated Bonds
As of December 31, 2025, our outstanding subordinated bonds were denominated in UF. Payments of interests and principal are generally due on a semiannual basis and the discount on the issuance is amortized over the life of the bond. As of December 31, 2025, we had an outstanding balance of Ch$1,087,093 million in subordinated bonds, bearing an effective weighted average real interest rate of 3.22% taking into consideration the discount at issuance.
Subordinated bonds are also intended to finance loans having a maturity of more than one year. As of December 31, 2025, the maturities of subordinated bonds were:
| As of December 31, 2025 | ||||
| (in millions of Ch$) | ||||
| IFRS: | ||||
| Due within 1 year | Ch$ | 107,875 | ||
| Due after 1 year but within 2 years | 5,346 | |||
| Due after 2 years but within 3 years | 5,693 | |||
| Due after 3 years but within 4 years | 6,063 | |||
| Due after 4 years but within 5 years | 3,178 | |||
| Due after 5 years | 958,938 | |||
| Total subordinated bonds | Ch$ | 1,087,093 | ||
During 2025, we did not issue any subordinated bonds.
Mortgage Finance Bonds
Mortgage finance bonds are used to finance the granting of mortgage loans. The outstanding principal amounts of the bonds are amortized on a quarterly basis. The bonds are linked to the UF index and carried a weighted average annual interest rate of 4.53% as of December 31, 2025. After the introduction of Mutuos Hipotecarios decades ago, Mortgage Finance Bonds were no longer issued. As a result, the current outstanding balance corresponds to previously issued bonds that have not yet mature.
The maturities of mortgage finance bonds as of December 31, 2025 were:
| As of December 31, 2025 | ||||
| (in millions of Ch$) | ||||
| IFRS: | ||||
| Due within 1 year | Ch$ | 107 | ||
| Due after 1 year but within 2 years | 40 | |||
| Due after 2 years but within 3 years | 43 | |||
| Due after 3 years but within 4 years | 44 | |||
| Due after 4 years but within 5 years | 45 | |||
| Due after 5 years | 243 | |||
| Total mortgage finance bonds | Ch$ | 521 | ||
Other Financial Obligations
The maturities of other financial obligations as of December 31, 2025 were as follows:
| As of December 31, 2025 | ||||
| (in millions of Ch$) | ||||
| IFRS: | ||||
| Other long-term obligations: | ||||
| Obligations with Chilean Government | Ch$ | — | ||
| Total other long-term obligations | — | |||
| Other short-term obligations | 367,323 | |||
| Total other obligations | Ch$ | 367,323 | ||
As of December 31, 2025, other financial obligations had the following maturities:
| As of December 31, 2025 | ||||
| (in millions of Ch$) | ||||
| IFRS: | ||||
| Due within 1 year | Ch$ | 367,323 | ||
| Due after 1 year but within 2 years | — | |||
| Due after 2 years but within 3 years | — | |||
| Due after 3 years but within 4 years | — | |||
| Due after 4 years but within 5 years | — | |||
| Due after 5 years | — | |||
| Total other obligations | Ch$ | 367,323 |
Funding by Type of Liability and Average Rates
The following table sets forth our average daily balance of liabilities for the years ended December 31, 2024 and 2025 in each case together with the related average nominal interest rates paid thereon:
| Year Ended December 31, | ||||||||||||||||||||||||
| 2024 | 2025 | |||||||||||||||||||||||
| Average Balance |
% of Total Liabilities | Average Nominal Rate | Average Balance |
% of Total Liabilities | Average Nominal Rate | |||||||||||||||||||
| (in millions of Ch$, except percentages) | ||||||||||||||||||||||||
| IFRS: | ||||||||||||||||||||||||
| Current accounts and demand deposits | Ch$ | 14,124,978 | 29.9 | % | —% | Ch$ | 14,591,337 | 30.9 | % | —% | ||||||||||||||
| Time deposits and Savings accounts | 15,267,720 | 32.4 | 5.63 | 15,236,466 | 32.3 | 4.24 | ||||||||||||||||||
| Borrowings from financial institutions | 2,600,300 | 5.5 | 2.76 | 1,362,732 | 2.9 | 4.54 | ||||||||||||||||||
| Debt financial instruments issued | 10,724,018 | 22.7 | 6.17 | 11,210,904 | 23.7 | 5.44 | ||||||||||||||||||
| Commercial Paper | 13,516 | 0.0 | 5.92 | 236,847 | 0.5 | 3.85 | ||||||||||||||||||
| Other financial obligations | 176,458 | 0.4 | 1.69 | 131,914 | 0.3 | 2.18 | ||||||||||||||||||
| Lease Liabilities | 94,931 | 0.2 | 2.51 | 84,041 | 0.2 | 2.51 | ||||||||||||||||||
| Other interest-bearing liabilities | 178,995 | 0.4 | 5.13 | 179,240 | 0.4 | 4.47 | ||||||||||||||||||
| Other noninterest-bearing liabilities | 3,988,089 | 8.5 | — | 4,209,569 | 8.9 | — | ||||||||||||||||||
| Total liabilities | Ch$ | 47,169,005 | 100.0 | % | 3.41 | % | Ch$ | 47,243,050 | 100.0 | % | 2.84 | % | ||||||||||||
Our most important sources of funding are customer deposits, which primarily consist of peso-denominated, noninterest-bearing current accounts and demand deposits and both Chilean Peso and UF-denominated interest-bearing time deposits and savings accounts. Current accounts and demand deposits represented 29.9% and 30.9% of our average total liabilities in 2024 and 2025, respectively. These kinds of liabilities are our least-cost source of funding. On the other hand, time deposits and savings accounts represented 32.4% and 32.3% of our average liabilities in 2024 and 2025, respectively. Lastly, debt financial instruments issued represented 22.7% and 23.7% of our average liabilities in 2024 and 2025, respectively.
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
The following tables set forth our contractual obligations and commercial commitments by residual maturity. As of December 31, 2025, the scheduled maturities of our contractual obligations, including accrued interest, were as follows:
| Due within 1 year | Due after 1 year but within 3 years | Due after 3 years but within 5 years | Due after 5 years | Total | Estimated Interest Payment | |||||||||||||||||||
| (in millions of constant Ch$ as of December 31, 2025) | ||||||||||||||||||||||||
| IFRS: | ||||||||||||||||||||||||
| Contractual Obligations | ||||||||||||||||||||||||
| Currents accounts and other demand deposits | Ch$ | 14,791,870 | Ch$ | — | Ch$ | — | Ch$ | — | Ch$ | 14,791,870 | Ch$ | — | ||||||||||||
| Transaction in the course of payment | 564,172 | — | — | — | 564,172 | — | ||||||||||||||||||
| Time deposits and Saving account | 13,748,828 | 412,156 | 793 | 631 | 14,162,408 | — | ||||||||||||||||||
| Bonds issued: | — | |||||||||||||||||||||||
| Mortgage finance bonds | 107 | 82 | 89 | 243 | 521 | 120 | ||||||||||||||||||
| Bonds | 1,438,800 | 2,516,201 | 1,715,429 | 4,949,330 | 10,619,760 | 1,811,372 | ||||||||||||||||||
| Commercial Bonds | 180,570 | — | — | — | 180,570 | 30,799 | ||||||||||||||||||
| Subordinated Bonds | 107,875 | 11,039 | 9,241 | 958,938 | 1,087,093 | 304,964 | ||||||||||||||||||
| Hedged Instrument | ||||||||||||||||||||||||
| Outflows | ||||||||||||||||||||||||
| Corporate Bond | (62,733 | ) | (572,565 | ) | (297,431 | ) | (1,437,654 | ) | (2,370,383 | ) | — | |||||||||||||
| Obligation USD | — | — | — | — | — | — | ||||||||||||||||||
| Inflows | ||||||||||||||||||||||||
| Cross currency swap | 62,733 | 572,565 | 297,431 | 1,437,654 | 2,370,383 | — | ||||||||||||||||||
| Borrowings from financial institutions | 1,160,496 | 136,255 | — | — | 1,296,751 | — | ||||||||||||||||||
| Other financial obligations | 367,323 | — | — | — | 367,323 | — | ||||||||||||||||||
| Lease contracts | 23,569 | 32,855 | 10,827 | 7,092 | 74,343 | — | ||||||||||||||||||
| Services contracts | 35,871 | 29,094 | 300 | — | 65,265 | — | ||||||||||||||||||
| Obligations by repurchase agreements | 286,915 | — | — | — | 286,915 | — | ||||||||||||||||||
| Total | Ch$ | 32,706,396 | Ch$ | 3,137,682 | Ch$ | 1,736,679 | Ch$ | 5,916,234 | Ch$ | 43,496,991 | Ch$ | 2,147,255 | ||||||||||||
Capital Management
We manage our capital adequacy as efficiently as we can, as we understand that capital is a scarce resource provided by our shareholders and generated by us through the capitalization of both part of our net distributable earnings and the effect of inflation on our shareholders’ equity. In this regard, our senior management and board of directors consider capital management to be a crucial input for the definition, implementation and achievement of our strategic goals, as well as the way in which we can cover all the business-related risks.
Thus, through our capital management policy, we seek to:
| ● | Ensure our capital adequacy and the quality of our capital, on a consolidated basis, based on the management of business-related risks; |
| ● | Establish sufficient capital levels, through the definition of internal capital targets, in order to both support the achievement of our business strategy and face stress scenarios; |
| ● | Ensure compliance with the internal capital objectives in the short- and medium-term while complying with the requirements set by the regulator; |
| ● | Determine a suitable reporting regime to meet the internal and regulatory requirements; |
| ● | Provide corporate governance, in addition to specific roles and responsibilities for capital and risk management purposes. |
Capital Adequacy Requirements
Beginning December 1, 2021, all the requirements related to the adoption of Basel III framework were put in place for all Chilean banks, although considering the phase-in process for the adoption of diverse matters including: (i) adjustments to Common Equity Tier 1 Capital and risk-weighted assets, (ii) the requirement of buffers such as the conservation buffer and the systemic buffer, among others.
According to the General Banking Act, each bank must comply with the following capital requirements as a percentage of its risk-weighted assets, net of required allowances:
| ● | Common Equity Tier 1 Capital (CET1) above 4.5% of risk-weighted assets; |
| ● | Tier 1 Capital = CET1 Capital + Additional Tier 1 Capital (AT1) above 6.0% of risk-weighted assets; |
| ● | Tier 1 + Tier 2 above 8.0% of risk-weighted assets; |
| ● | Conservation Buffer of 2.5% of risk-weighted assets; |
| ● | Countercyclical Buffer of up to 2.5% of risk-weighted assets, to the extent applicable, to be fulfilled with CET1; |
| ● | D-SIB capital charge in the range of 1.0% to 3.5% of risk-weighted assets, to be fulfilled with CET1 at 25% rate every year starting December 1, 2022, to the extent applicable; |
| ● | Pillar 2 capital charge of up to 4.0% of risk-weighted assets, to the extent applicable. |
Banks should also comply with a leverage ratio, meaning CET1 Capital of at least 3% of their total risk assets, net of required allowances. If a bank is defined as a domestic-systemically important bank, the threshold for the leverage ratio could be subject to further requirement of up to 50% of the systemic buffer imposed over risk-weighted assets but over total risk assets.
Pursuant to the general Banking Act, local banks must comply with minimum capital requirements in relation to both total assets and risk-weighted assets (considering credit, market and operational risk). As of December 31, 2025 CET1 Capital must be at least 3.0% of total assets, based on the leverage requirements. In this regard, despite our designation as D-SIB bank, no further leverage requirements were imposed on us as of the date of this annual report. Likewise, as of December 31, 2025, local banks’ Total Regulatory Capital, must be at least 8.00% of their risk-weighted assets, Tier1 Capital must be at least 6.00% of their risk-weighted assets and CET1 Capital must be at least 4.50% of their risk-weighted assets, considering minimum regulatory limits. As of the same date, banks must comply with: (i) the conservation buffer amounting to 2.50% of risk-weighted assets, (ii) the corresponding phase-in implementation of the systemic or D-SIB capital charge, which in our case amounted to 1.25%, (iii) a countercyclical capital buffer equivalent to 0.50% of risk-weighted assets for the industry as a whole, established by the Central Bank in May 2023 and required for local banks starting May 2024, and (iv) the Pillar 2 capital charge, to the extent applicable. These thresholds, except for Pillar 2, must be fulfilled with CET1 capital exclusively. However, the Pillar 2 capital charge, if any, could be met with CET1 capital, AT1 capital (perpetual bonds or preferred stocks) or Tier 2 Capital (subordinated bonds or disclosed reserves) according to the bank’s actual capital structure or as requested by the CMF.
It is important to note that on January 16, 2026, the CMF informed us of its decision to remove the additional Pillar 2 capital requirement formerly assigned to us, starting on the same date. As a result, as of the date of this annual report, we are no longer subject to any Pillar 2 capital charge.
For more information on general capital requirements for the industry and specific capital requirements for us, capital tiers and guidelines associated with calculation of risk-weighted assets and buffers, see “Item 4. Information on the Company—Regulation and Supervision—Modifications to the General Banking Act.” For more information on potential changes to capital requirements for the industry and specific capital requirements for us see “Item 3. Key Information—Risk Factors—Risks Relating to our Operations and the Chilean Banking Industry—Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations—Basel III Implementation.”
As of December 31, 2025, Banco de Chile fully complied with capital adequacy requirements by holding:
| As of December 31, 2025 | ||||||||
| Actual Ratio |
Regulatory Limits (1) | |||||||
| Leverage Ratio | 10.04 | % | 3.000000 | % | ||||
| Common Equity Tier 1 | 14.50 | 8.823125 | ||||||
| Tier 1 Ratio | 14.50 | 10.347500 | ||||||
| Total Regulatory Capital Ratio | 18.28 | % | 12.380000 | % | ||||
| (1) | On December 1, 2025 regulatory limits became fully in place after completing a phase-in period of four years. Accordingly, regulatory limits for Banco de Chile as of December 31, 2025, consider full application of the conservation buffer (2.5%), the systemic capital charge assigned to Banco de Chile (1.25%) and a countercyclical buffer of 0.5% as set by the Central Bank starting in May 2024. As discussed above, the Pillar 2 capital requirement previously assigned by the CMF (0.13% of risk-weighted assets as of December 31, 2025) was removed effective January 16, 2026; accordingly, the regulatory limits shown above exclude such requirement given its elimination prior to the date of this annual report. |
The following table sets forth our minimum capital requirements and capital availability for Banco de Chile for the years ended December 31, 2024, and 2025, based on the requirements set by the CMF under Basel III:
| ● | CET1 Capital over Total Risk Assets |
| As of December 31, | ||||||||
| 2024 | 2025 | |||||||
| (in millions of Ch$) | ||||||||
| CHILEAN GAAP: | ||||||||
| CET1 Capital Minimum Requirement | Ch$ | 1,611,371 | Ch$ | 1,686,379 | ||||
| Excess over minimum CET1 Capital required | Ch$ | 3,900,542 | Ch$ | 3,957,747 | ||||
| ● | CET1 Capital over Risk Weighted Assets |
| As of December 31, | ||||||||
| 2024 | 2025 | |||||||
| (in millions of Ch$) | ||||||||
| CHILEAN GAAP: | ||||||||
| CET1 Capital Minimum Requirement | Ch$ | 3,263,127 | Ch$ | 3,433,850 | ||||
| Excess over minimum CET1 Capital required | Ch$ | 2,248,787 | Ch$ | 2,210,275 | ||||
| ● | Tier 1 Capital over Risk Weighted Assets |
| As of December 31, | ||||||||
| 2024 | 2025 | |||||||
| (in millions of Ch$) | ||||||||
| CHILEAN GAAP: | ||||||||
| Tier 1 Capital Minimum Requirement | Ch$ | 3,847,434 | Ch$ | 4,027,117 | ||||
| Excess over minimum Tier 1 Capital required | Ch$ | 1,664,480 | Ch$ | 1,617,008 | ||||
| ● | Total Regulatory Capital over Risk Weighted Assets |
| As of December 31, | ||||||||
| 2024 | 2025 | |||||||
| (in millions of Ch$) | ||||||||
| CHILEAN GAAP: | ||||||||
| Total Regulatory Capital Minimum Requirement | Ch$ | 4,626,509 | Ch$ | 4,818,141 | ||||
| Excess over minimum Total Regulatory Capital required | Ch$ | 2,328,783 | Ch$ | 2,297,034 | ||||
Capital Expenditures
For information on our capital expenditures, see “Item 4. Information on the Company—History and Development of the Bank—Capital Expenditures.”
RECENT DEVELOPMENTS
As of the date of this annual report, there are no recent developments to report.
TREND INFORMATION
The following trends may have an impact on the Chilean economy and the economic growth of its trade partners, and could therefore affect the Chilean banking industry, and thus, could affect our business, operating results or financial condition:
We believe we have developed strong competitive advantages that will allow us to remain a relevant participant within the Chilean banking industry. We are frequently seeking additional improvements in matters such as operating efficiency, productivity, profitability and service quality by developing new customer-oriented service models, launching new financial products and services and implementing high quality information technologies. Our business environment is increasingly competitive and an active market for mergers and acquisitions tends to result in large financial groups. In addition, competition from non-banking companies, mainly those involved in the retail industry, has encouraged us to develop improved value propositions to satisfy our customers’ needs.
The outbreak of the COVID-19 virus had significant impacts on the Chilean economy, key macroeconomic drivers and the banking activity. If new pandemics or epidemics develop as quickly as COVID-19 in the past, financial institutions may face increased credit risk, market risk, strategic risk, operational risk, and compliance risk. This could also translate into lowered economic performance, liquidity constraints, reduced access to funding, and longstanding contingency plans in order to address the emergency. Likewise, any shocks or unexpected movements in market factors due to new pandemics or epidemics could result in financial losses associated with our trading portfolio or portfolio of financial assets measured at fair value through other comprehensive income.
Unfavorable developments in the U.S.-China “trade-war,” changes in global trade due to increased tariffs, and newly revisited waves of protectionism among major global economies could negatively affect global economic growth and adversely impact Chilean economic growth as a result of external forces affecting copper prices, the growth trends of Chile’s main trade partners, or global trade. Any impact on the local economy would certainly affect the dynamics of the banking industry.
Political and diplomatic events are taking place around world, including recently appointed administrations or the upcoming elections in certain of the principal developed countries and various countries in Latin America, a redefinition of political and economic alliances and the emergence of radicalized political movements in other parts of the world. In addition, the latent threat of armed conflicts or terrorism in the Middle East and Asia, the ongoing armed conflicts in Eastern Europe, between Russia and Ukraine, and in the Middle East, between Israel and Hamas and, more recently, between the U.S. and Israel and Iran and other countries of the Middle East, that threaten to become global or extend beyond current expectations, have contributed to global migration crises and political instability that have been managed in dramatically different ways by developed countries. Similarly, political and social instability in certain Latin American countries, such as Venezuela, Ecuador, Colombia and some Caribbean countries has resulted in massive migration processes within the region. Any further negative development in these matters could result in the adoption of protectionist policies, immigration bans, restrictions on foreign trade or prohibitions on business with specific investors in particular countries or within certain countries. Also, the escalation of geopolitical conflicts, such as the current armed conflicts involving the U.S., Israel and Iran, could result in market turmoil, abrupt changes in international commodity prices, such as oil and gas, volatility in key market factors, such as interest rates, exchange rates or inflation, all of which could translate into economic slowdown or recessions, both locally and globally, affecting Chile’s economic performance, the activity in the local banking business and, ultimately, our results of operations.
In addition, the United States administration has revised the country’s approach on global trade and immigration, among other topics. This has resulted in unilateral or bilateral revision of former trade agreements or arrangements between the U.S. and some of its commercial partners, and an initial increase in tariffs for some specific products and countries and a retaliation wave by some of the affected countries in response. On April 2, 2025, U.S. President Donald J. Trump announced new tariffs on imports into the United States of America. Although the U.S. Supreme Court struck down certain tariffs in February 2026, the Trump administration imposed a new global tariff of 10% under Section 122 of the Trade Act of 1974. Additional industry-specific tariffs remain in effect under Section 232 national security authorities, including a 50% tariff on steel, aluminum, and copper parts. Chile is currently subject to a minimum 10% baseline tariff; however, goods covered by the U.S.-Chile Free Trade Agreement or certain other exemptions may not be subject to these duties. Copper cathode exports from Chile are currently exempt from the 50% copper tariff announced in July 2025, although semi-finished copper products remain subject to this tariff. These tariff policies remain fluid and subject to ongoing legal challenges, trade negotiations, and potential changes, which could result in increased costs for Chilean exports to the United States. The imposition of these tariffs may have significant adverse effects on global trade, which could have a material adverse effect on Chile’s economy, trade balance, and key industries, including second-round effects on the lending business and, ultimately, on our lending activity and results of operations.
The Chilean economy and the Chilean financial system are also exposed to political, social and economic developments occurring in the country. Any uncertainty regarding political or economic reforms could result in deteriorated business sentiment and consumer confidence, which could result in further slowdown of the Chilean economy by affecting both overall capital expenditures and household consumption. Likewise, increased levels of criminality and inability to address that trend on a timely and effective manner could translate into deterioration of consumer confidence and business sentiment, which may result in economic slowdown.
The Chilean economy is also exposed to the negative effects of climate change on macroeconomic indicators, banking business activity, customers, counterparties and suppliers in general. Climate change may materialize as a physical risk related to more intense storms, rising sea levels, prolonged droughts, increased temperatures, unexpected floods, wildfires, systemic changes to geographies, among others. Some of these events are taking place from time to time in Chile and their consequences cannot be foreseen or mitigated in advance. These events may result in operational disruptions for us, interruptions of services we provide to our customers, inability to raise funding, among other impacts. Likewise, climate change is increasingly translating into transition risks related to regulatory, market, technological, stakeholder and legal changes from a transition to a low-carbon economy, which could negatively impact on asset valuation, customers’ financial condition and payment capacity, and our own reputation. Although some international players have agreed on certain actions intended to halt climate change, there is no certainty regarding the ability to address the goals proposed on such matter and, accordingly, the negative effects of physical or transition risks arising from climate change could worsen in the future in a magnitude we are not able to predict in advance.
We believe that Chile and its financial industry have demonstrated success in facing worldwide financial contingencies in the past, based on a strict fiscal policy, forward-looking and independent monetary policy, as well as strong regulation and supervision related to the financial industry. Nevertheless, from time to time, concerns about the soundness of global banking industry arise, which may lead to the collapse of certain financial institutions worldwide, as occurred in the U.S. and Europe in early 2024. This trend could have direct and indirect impacts on macroeconomic performance of various economies, including Chile, potentially resulting in deteriorated local banking activity.
In addition, the recent international trend of improved protection of consumers’ financial rights has become increasingly significant in Chile. If this trend leads to several and/or dramatic changes in the Chilean financial regulation, the banking industry could be adversely affected and, therefore, we could experience a negative impact on our future operating results.
For more information regarding the potential economic or regulatory factors that could affect our results of operations or financial condition, see “Item 3. Key Information—Risk Factors— Risks Relating to our Operations and the Chilean Banking Industry—Stricter banking regulations and changes in law may constrain our operations and thereby adversely affect our financial condition and results of operations,” “Item 3. Key Information—Risk Factors— Risks Relating to our Operations and the Chilean Banking Industry—Market turmoil could result in negative adjustments to the fair value of our financial assets, which could translate into a material effect on our results or financial condition,” “Item 3. Key Information—Risk Factors—Risk Relating to Chile—Our growth and profitability depend on the level of economic activity in Chile,” “Item 3. Key Information—Risk Factors—Risk Relating to Chile—Climate change presents various financial and non-financial risks to us and our customers that are not directly observable and, therefore, are difficult to mitigate in advance,” “Item 3. Key Information—Risk Factors— Risk Relating to Chile—Pandemics, epidemics and other health events will affect both the global and the Chilean economy, our business or results of operations and could affect our financial condition,” and “Item 3. Key Information—Risk Factors— Risks Relating to our American Depositary Shares (“ADSs”)—Developments in international financial markets may adversely affect the market price of the ADSs and shares.
OFF-BALANCE SHEET ARRANGEMENTS
In the normal course of business, we are party to a number of off-balance sheet arrangements that present credit, market and operational risks that are not reflected in our audited consolidated financial statements. These activities include commitments to extend credit not otherwise accounted for as contingent loans, such as overdrafts and credit card lines of credit, and long-term contractual obligations under operating leases or service contracts.
We provide customers with off-balance credit support through loan commitments. Such commitments are agreements to lend to a customer at a future date, subject to compliance with contractual terms. Since substantial portions of these commitments are expected to expire without us having to grant any loans, total commitment amounts do not necessarily represent our actual future cash requirements. The amounts of these loan commitments were Ch$11,125,300 million as of December 31, 2024, and Ch$11,453,782 million as of December 31, 2025. See Note 28 to our audited consolidated financial statements as of and for the year ended December 31, 2025, included elsewhere in this annual report. The amount of subscribed leasing contracts were Ch$171,828 million as of December 31, 2024, and Ch$160,403 million as of December 31, 2025.
Interest rate and cross-currency swaps, which are entered into in order to hedge our foreign investment portfolio, are recorded at their estimated fair market values. For more information, see Note 10 to our audited consolidated financial statements as of and for the year ended December 31, 2025, included elsewhere in this annual report.
The credit risk of both on- and off-balance sheet financial instruments depends on many factors, including the value of collateral held and other security arrangements. To mitigate credit risk, we generally determine the need for specific covenant, guarantee and collateral requirements on a case-by-case basis, depending on the nature of the financial instrument and the customer’s creditworthiness. The amount and type of collateral held to reduce credit risk varies, but may include real estate, machinery, equipment, inventory and accounts receivable, as well as cash on deposit, stocks, bonds and other marketable securities that are generally held in our possession or at another appropriate custodian or depository. This collateral is valued and inspected on a regular basis to ensure both its existence and adequacy. Additional collateral is requested when appropriate. For further information, see Note 28 to our audited consolidated financial statements as of and for the year ended December 31, 2025, included elsewhere in this annual report.
Financial Guarantees
The following is a summary of the nominal value of instruments that are considered financial guarantees, and which are accounted for in off-balance sheet accounts:
| As of December 31, 2025 | ||||
| (in millions of Ch$) | ||||
| Performance bonds | Ch$ | 3,173,261 | ||
| Foreign office guarantees and standby letters of credit | Ch$ | 288,710 | ||
| Total | Ch$ | 3,461,971 | ||
Guarantees in the form of performance bonds, standby letters of credit and foreign office guarantees are issued in connection with agreements made by customers to counterparties. If the customer fails to comply with the agreement, the counterparty may enforce the performance bonds, standby letters of credit or foreign office guarantees as a remedy. Credit risk arises from the possibility that the customer may not be able to repay us for these guarantees.
As of December 31, 2025, the expiration of guarantees per period was as follows:
| Due within 1 year | Due after 1 year but within 3 years | Due after 3 years but within 5 years | Due after 5 years | Total | ||||||||||||||||
| (in millions of Ch$) | ||||||||||||||||||||
| Performance bonds | Ch$ | 2,220,779 | Ch$ | 797,609 | Ch$ | 143,599 | Ch$ | 11,274 | Ch$ | 3,173,261 | ||||||||||
| Foreign office guarantees and standby letters of credit | 218,291 | 32,617 | 34,957 | 2,845 | 288,710 | |||||||||||||||
| Total | Ch$ | 2,439,070 | Ch$ | 830,226 | Ch$ | 178,556 | Ch$ | 14,119 | Ch$ | 3,461,971 | ||||||||||
Item 6 Directors, Senior Management and Employees
DIRECTORS AND SENIOR MANAGEMENT
Directors
Our administration is conducted by our board of directors, which, in accordance with our bylaws (estatutos), consists of nine directors and two alternate directors. The entire board of directors is elected every three years. Our current board of directors was elected in March 2026 and its term expires in March 2029.
Cumulative voting is permitted for the election of directors. Our chairman and our chief executive officer are appointed by our board of directors and hold their offices at its discretion. Ordinary meetings of our board of directors are held at least twice a month, except in February, month in which only one ordinary meeting is held. Extraordinary board of directors’ meetings shall be held when specially called by the chairman or at the direction of one or more directors subject to the chairman’s prior assessment of the need of the meeting, unless it is requested by an absolute majority of the directors, in which case the meeting must necessarily be held without prior assessment by the chairman.
Our current directors are as follows:
| Director | Position | Committee Memberships | Age | |||
| Pablo Granifo Lavín | Chairman | 7 | 67 | |||
| Jean Paul Luksic Fontbona | Vice Chairman | 1 | 61 | |||
| Julio Figueroa | Vice Chairman | 2 | 54 | |||
| Óscar Hasbún Martínez | Director | 3 | 57 | |||
| Ana Holuigue Barros | Director | 5 | 70 | |||
| Hernán Büchi Buc | Director | 3 | 77 | |||
| Patricio Jottar Nasrallah | Director | 2 | 63 | |||
| Vivianne Caumont | Director | 4 | 51 | |||
| Paul Furst Gwinner | Director | 4 | 59 | |||
| Nicolás Lewin Muñoz | First Alternate Director | 2 | 44 | |||
| Sandra Guazzotti | Second Alternate Director | 2 | 59 |
Pablo Granifo L. was reelected as the chairman of our board of directors in March 2026, a position which he has held since 2007. He was our Chief Executive Officer from 2001 to 2007, and previously, Chief Executive Officer of Banco A. Edwards from 2000 to 2001. He is also chairman of the board of directors of Banchile Administradora General de Fondos S.A., Viña San Pedro Tarapacá S.A., LQIF, Quiñenco S.A., Embotelladoras Chilenas Unidas S.A., Cervecera CCU Chile and Compañía Cervecerías Unidas S.A.; vice chairman of the board of directors of Compañía Sudamericana de Vapores S.A.; chairman of the Executive Committee of Banchile Corredores de Seguros Limitada; and a member of the board of directors of Empresa Nacional de Energía Enex S.A., Inversiones y Rentas S.A. and SM SAAM S.A. Mr. Granifo is also a member of the board of the Chilean Bank Association. He holds a degree in business administration from the Pontificia Universidad Católica de Chile.
Jean Paul Luksic F. has been a member of our board of directors since April 2013 and was elected vice chairman in March 2026. He currently serves as chairman of the board of directors of Antofagasta plc (United Kingdom) and of Antofagasta Minerals S.A. He is a member of the board of directors of Quiñenco S.A. and LQIF and vice chairman of Sociedad Matriz SAAM S.A. Mr. Luksic was appointed to the board of directors of Antofagasta plc in 1990 and was the Chief Executive Officer of Antofagasta Minerals until his appointment as chairman of Antofagasta plc in 2004. He is also a member of the Consejo Minero (Mining Counsel), the industry body representing the largest mining companies in Chile. Mr. Luksic holds a B.Sc. degree in management and science from the London School of Economics and Political Science.
Julio Figueroa has been a member of our board of directors since December, 2018 and was elected vice chairman in March 2026. He is Chief Executive Officer at Citi Latin America based in Miami, United States. He serves as chairman of Banchile Asesoría Financiera S.A. and vice chairman of LQIF. He is also a member of the Argentinian Business Association (AEA), the Latin American Business Council (CEAL) in Argentina and the Young President Association (YPO) in Argentina, Mr. Figueroa joined Citi in Buenos Aires in 1994 in CIB after working for IBM Argentina in the finance division. From 1994 to 2001 he has held several roles in CIB Argentina as a senior banker covering Argentine clients in different industries. He moved to the Citi Latin America Regional Office in Miami, U.S.A. in 2001, as a senior corporate finance transactor in CIB, covering corporate clients in Latin America, and to Citi New York, United States, in 2004 as managing director, responsible for Financial Sponsors & Private Equity Clients for CIB Latin America. In 2010, Mr. Figueroa returned to Buenos Aires as CIB Head for Citi Argentina, a position he held until May 2014, when he was appointed Chief Executive Officer for Citi Peru and Vice President of the board of directors of Citibank del Perú S.A., responsible for the wholesale and the consumer businesses. In November 2015, Mr. Figueroa was named Chief Executive Officer for Citi in Argentina, where he led a significant transformation of the franchise, both in the wholesale and consumer businesses. In January 2017, in addition to his role as Chief Executive Officer of Citi Argentina, he became head of Southern Cone (Argentina, Uruguay and Paraguay) and CIB Head for Southern Cone. In January 2020, he expanded his responsibility and became head of Latin America South LAS (Argentina, Chile, Colombia, Ecuador, Peru, Paraguay, Uruguay and Venezuela), a position he held until he assumed his current role. Mr. Figueroa received his MBA finance degree from the CEMA University in Buenos Aires, a B.A. in business administration and a B.A. in accounting, both from Universidad Católica Argentina (U.C.A.) in Buenos Aires.
Ana Holuigue B. (independent) is a member of our board of directors since March 2023. She is currently a member of the board of directors of Grupo Prisma, director of Comunidad Mujer, counselor at Clapes UC, Red de Alimentos and a member of the ICARE Business and Society Circle. Ms. Holuigue was the chairperson at Televisión Nacional de Chile (TVN) and Chile Transparente. She has also served on the boards of Empresa Nacional del Petróleo (ENAP), Parque Arauco, Corpbanca, Copesa, EFE, Centro Cultural GAM, Unimarc, Fundación Techo and Fundación Chile. She was a founding partner of Radio Duna and an executive director of Grupo Dial. She was a member of the Superior Council of the Universidad Alberto Hurtado and was a professor of microeconomics for 10 years at the Economics Institute of the Pontificia Universidad Católica de Chile. She was an executive at Copec, Banco Santiago (now Santander) and Telefónica. Ms. Holuigue is an economist and holds a master’s degree in economics from Pontificia Universidad Católica de Chile.
Vivianne Caumont is a member of our board of directors since March 2026. She has 30 years of experience in financial institutions and multinational companies within the region. Her expertise encompasses corporate and investment banking, finance, strategic planning, and risk. She has led high-performance teams and gender diversity programs at Citi. In 2013, she was appointed Country Director (CEO) of Citi Uruguay, a position she held for four years, covering the Corporate and Private Banking businesses. Subsequently, she was named Chief Financial Officer for South Latin America, excluding Brazil. In 2021, she assumed the role of Head of Financial Planning for Corporate Banking for Citi Latin America, a position she held until July 2023, when she took her current role as Chief Financial Officer (CFO) of Citi Latin America. Ms. Caumont holds a Bachelor’s Degree in Administration and is a certified Public Accountant from the Universidad de la República in Montevideo, Uruguay, and holds a Master’s in Corporate Finance from the Universidad del CEMA in Buenos Aires, Argentina.
Hernán Büchi B. is a member of our board of directors since August 2019. Previously, he served as an advisor to our board between 2008 and 2019 and as a member of our board of directors in 2007. He is the president of the Directive Council of Universidad del Desarrollo. Mr. Büchi is also a board member of, among other companies, Compañía Sudamericana de Vapores S.A. and SQM S.A. Between 1985 and 1989, Mr. Büchi served as the Minister of Finance. He also served as the Superintendent of Banks between 1984 and 1985, Minister of Planning between 1983 and 1984, and Vice-Secretary of Health between 1980 and 1983. Mr. Büchi holds a degree in civil mining engineering from the Universidad de Chile and a Master’s Degree from Columbia University.
Patricio Jottar N. is a member of our board of directors since December 2023. He is currently the CEO of Compañía Cervecerías Unidas S.A. , chairman of Compañía Pisquera de Chile S.A. and board member of LQIF, Cervecera CCU Chile, Embotelladoras Chilenas Unidas S.A., Compañía Cervecerías Unidas Argentina S.A., Viña San Pedro Tarapacá S.A., Aguas CCU-Nestlé Chile S.A., Cervecería Kunstmann S.A., Bebidas CCU-Pepsico SpA, Bebidas del Paraguay S.A., Central Cervecera de Colombia S.A.S., Zona Franca Central Cervecera S.A.S., Banchile Administradora General de Fondos S.A. and Distribuidora del Paraguay S.A. Previously, he was CEO of AFP Bansander and Santander Chile Holding, after working at Citicorp Chile. He has been director and president of ICARE, director of Fundación Teletón, elected Counselor of Sociedad de Fomento Fabril (“SOFOFA”) and a member of its Executive Committee. He is currently the director of Clínica de la Universidad de Los Andes and member of the directive council of Universidad de Los Andes. He has been a professor in Finance, Costs and Administration courses at Pontificia Universidad Católica de Chile and Universidad de Los Andes. Mr. Jottar has a degree in business administration from Pontificia Universidad Católica de Chile and a Master’s in Economics and Business Administration from Instituto de Estudios Superiores de la Empresa, in Barcelona, Spain.
Óscar Hasbún M. is a member of our board of directors since February 2026. He is currently chairman of the board of directors of Compañía Sudamericana de Vapores S.A. (CSAV), chairman of the board of directors of SM SAAM S.A., and a member of the board of directors of Quiñenco S.A., Hapag-Lloyd, Nexans, Compañía Cervecerías Unidas S.A. (CCU) and Invexans. From 2011 to 2026, Mr. Hasbún served as CEO of CSAV, and prior to that he was in charge of the Luksic Group’s tourism and real estate businesses in Croatia. Between 2023 and 2025, he was vice chairman of SOFOFA. Mr. Hasbún holds a degree in business and economics from the Pontificia Universidad Católica de Chile.
Paul Furst G. (independent) is a member of our board of directors since November 2019. From 1998 to date, he has been a member of the board and partner at Grupo Plaza S.A., where he was also a member of the audit committee for two years, until April 2019. In addition, since 2009 he has been a partner and director of the mining company Ventana Minerals, member of the board and partner of the goat industry products company Caprilac, and member of the board and partner of the agricultural company Comaihue. Previously, he was partner and member of the board at Parque Arauco S.A. for eleven years. Mr. Furst Gwinner has a business administration degree from the Universidad de Las Condes. In addition, Mr. Furst pursued the Senior Management Program (PADE) of the ESE Business School at the Universidad de los Andes.
Nicolás Lewin Muñoz (independent) was elected as first alternate director in March 2026. He served as director of Nuevos Desarrollos S.A. (2014–2023), a subsidiary of Plaza S.A. responsible for the development and operation of shopping centers; Falabella Inversiones Financieras S.A. (2013–2014); Banco Falabella, where he was a member of the Risk Committee and the Audit Committee (2013–2014); and Promotora CMR Falabella S.A., where he served as a member of the Board Committee and the Risk Committee (2013–2014), among other entities. He obtained his law degree from the Pontificia Universidad Católica de Chile. He holds a Diploma in Competition Law: Economics, Law and Regulation from the Pontificia Universidad Católica de Chile and a Master of Laws (LL.M.) in Global Competition Law from Loyola University Chicago.
Sandra Guazzotti has been a member of our board of directors since June 2019 and was re-elected as second alternate director in March 2026. Ms. Guazzotti is an independent director of Bancolombia S.A., a board member of Banchile Pagos and Universidad Adolfo Ibañez, president of the advisory council of Endeavor Chile and chair at Women Corporate Directors (WCD) Chile. She previously served as president and member of the board of directors of the Chilean-American Chamber of Commerce (AmCham Chile). She brings over 30 years’ experience, including 25 years in senior leadership roles at technology companies such as Oracle and Google, both in Latin America and Asia. Her career has been focused on business transformation, technology strategy, and digital innovation at scale. Throughout her professional trajectory, she has received multiple recognitions, including “Executive of the Year 2019” by Mujeres Empresarias (Business Women) and Revista Capital (Capital Magazine) and has been named one of “100 Women Leaders in Chile” by Mujeres Empresarias in the newspaper El Mercurio in 2011, 2018, and 2019. She has a degree in International Relations from the University of Tsukuba in Japan and completed the Senior Executive Program (PADE) at Universidad de los Andes in Chile. She also holds a Directors Certificate and Diploma from the Institute of Directors (IoD), United Kingdom, and has completed the Technology Leadership Program at the Massachusetts Institute of Technology (MIT), United States.
Senior Management
As of April 24, 2026 our current executive officers are as follows:
| Executive Officers | Position | Age | ||
| Eduardo Ebensperger Orrego | Chief Executive Officer | 60 | ||
| Rolando Arias Sánchez | Chief Financial Officer | 61 | ||
| Álvaro Cumsille Capponi | Credit Risk Officer (1) | 48 | ||
| Alfredo Villegas Montes | General Counsel and Secretary of the Board | 55 | ||
| Cristián Lagos Contardo | Manager — People and Organization Division | 60 | ||
| Francisco Javier Brancoli Bravo | Manager — Commercial Division | 63 | ||
| Felipe Echaiz Bornemann | Manager — Global Compliance Division | 58 | ||
| Hernán Arellano Salas | Manager — Corporate Banking Division | 48 | ||
| Sergio Karlezi Aboitiz | Manager — Treasury Division | 60 | ||
| Oscar Mehech Castellón | Manager — Internal Audit Division | 61 | ||
| Esteban Kemp De La Hoz | Manager — Marketing, Technology and Digital Division | 46 | ||
| Tatiana Tatter Casanova | Manager —Operational Risk and Global Control Division (1) | 42 | ||
| Salvador Danel Hernández | Manager — Cybersecurity Division | 52 |
| (1) | In March 2026, the Corporate Risk Division was reorganized into two new organizational units: (i) the Credit Risk Division, and (ii) the Operational Risk and Global Control Division. |
Eduardo Ebensperger O. has been our Chief Executive Officer since May 2016. He joined Banco A. Edwards in 1989, where he served as regional branch manager from 1997 to 1999 and as manager of the Medium Sized Companies Division from 1999 to 2001. He subsequently held several positions at Banco de Chile, including Chief Executive Officer of Banchile Factoring S.A. from 2002 to 2005, manager of the Large Companies Division from 2005 to 2007, manager of the Wholesale, Large Companies and Real Estate Division from 2008 to 2014, and manager of the Commercial Division from 2014 to 2016. He was formerly chairman of the Board of Directors of Artikos S.A. He is chairman of the Board of Directors of Operadora de Tarjetas Banchile Pagos S.A. and chairman of the CEO Committee of the Association of Banks and Financial Institutions since 2019; and a member of the Board of Directors of Banchile Asesoría Financiera S.A., Banchile Administradora General de Fondos S.A. and the Executive Committee of Banchile Corredores de Seguros Limitada. He is also a member of the Advisory Council of the Faculty of Economics and Administration of Universidad de Chile. Mr. Ebensperger holds a degree in business administration from the Universidad de Chile.
Rolando Arias S. has been our Chief Financial Officer since June 2014. Prior to this position, Mr. Arias was manager of the Research and Planning Area. He served as manager of the Financial Control Area of Banco de Chile after its merger with Banco A. Edwards from 2002 to 2006. Before this merger, Mr. Arias was in charge of the Planning Area of Banco A. Edwards from 1997 to 2001. Mr. Arias joined Banco A. Edwards in 1987 and until 1997 he held various positions related to controlling and planning. Mr. Arias holds a degree in business administration from Pontificia Universidad Católica de Chile.
Álvaro Cumsille C. serves as Credit Risk Officer since March 2026. Prior to his current role, he served as manager of Special Assets Management since January 2022 and was a member of the board of directors of Socofin until its merger by absorption with the Bank and dissolution in July 2025. Previously, between September 2018 and January 2022, he worked at Scotiabank Chile as director of operations and director of collections, and also served as general manager of the collection subsidiary and as a member of the board of directors of the subsidiaries Bandesarrollo Leasing Inmobiliario S.A., Scotia Azul Leasing S.A., and Fintesa Securitizadora S.A. Mr. Cumsille is an attorney from the Pontificia Universidad Católica de Chile and holds a master’s degree in business law from Universidad Adolfo Ibáñez.
Alfredo Villegas M. has been our General Counsel and Secretary of our board of directors since December 2019. Previously, he served as deputy general counsel since 2017. Before, he was head legal counsel for the Commercial Division since 2008. He joined Banco de Chile in 2002 as a result of its merger with Banco A. Edwards, having joined the latter in 1994. Since January 2021, he has been the vice president of the legal affairs committee of the Chilean Banks Association. Mr. Villegas is an attorney and holds a law degree from the Universidad de Chile.
Cristián Lagos C. has been our People and Organization Division manager since May 2012. From 2008 to March 2012, he was the Corporate Human Resources and Reputational manager of Compañía General de Electricidad S.A. He was the Human Resources manager of Chilesat S.A. and corporate manager of Telmex S.A. after those two companies merged. Previously, he was the Planning and Human Resources Division manager at Banco Sudamericano, and later Scotiabank following the merger of these two banks. Currently, he is also member of the board of directors of Guillermo Subercaseaux Banking Studies Institute. Mr. Lagos holds a degree in psychology from the Universidad Diego Portales.
Francisco Brancoli B. has served as manager of our Commercial Division since March 2026. Prior to his current role, he served as manager in Banco Edwards branches since 2002 and of Private Banking since 2015. Mr. Brancoli joined Banco Edwards in 1994, working in various commercial positions. In 2001, he took part in the Banco de Chile merger, remaining in charge of the branch network under the Edwards brand. In 2008, he was part of the team responsible for integrating former Citibank retail clients and staff into Banco de Chile. In 2018, he participated in the creation and implementation of new service models within Private Banking, notably Private Wealth Management, a proposal developed jointly with Banchile Inversiones. Mr. Brancoli currently serves as a member of the board of Banchile Administradora General de Fondos S.A. Mr. Brancoli holds a degree in Business and Administration from Universidad Diego Portales.
Felipe Echaiz B. has served as manager of our Global Compliance Division since January 2008. Mr. Echaiz previously worked for Citibank for 10 years. Between 2004 and 2005, he was vice-president and head of the Multinationals Cluster Group, and then served as Country Compliance Officer for Citigroup Chile between 2006 and 2007. In 2003, Mr. Echaiz was deputy director of the Anti-Money Laundering and Organized Crime Unit at the Public Prosecutor’s Office. Currently, Mr. Echaiz is a member of the Compliance Committee of the Chilean Association of Banks. Mr. Echaiz is an attorney and holds a law degree from the Pontificia Universidad Católica de Chile and a master’s degree in finance and economics from the Universidad de Chile.
Hernán Arellano S. has been Head of our Corporate Banking Division since November 2024. Previously, he was chief executive officer at Banchile Corredores de Bolsa S.A. between September 2016 and November 2024. He is also member of the board of Banchile Asesoría Financiera S.A. since December 2024 and Bolsa Electronica de Chile since April 2017. Additionally, Mr. Arellano has been a Finance Professor in the Master in Business Administration Program at Pontificia Universidad Católica de Chile since 2014. Mr. Arellano holds a degree in business administration from Pontificia Universidad Católica de Chile, a master’s degree in applied economics in the same university and an MBA from Babson College, United States.
Sergio Karlezi A. has been the Manager of Treasury Division since December 2011. Previously, he was the Manager of Treasury between October 2009 and November 2011. From June 2006 to December 2008, Mr. Karlezi served as Head Trader of Citibank Chile, holding the same position at Banco de Chile until September 2009. Since 2000, he worked for six years as Executive Director of Santander Investment New York. Before that, Mr. Karlezi held positions as Head Trader in Chase Manhattan Bank (now J.P. Morgan) and Santander Investment Chile. Mr. Karlezi holds a degree in Industrial Civil Engineering from the Universidad de Santiago de Chile.
Oscar Mehech C. has been manager of our Internal Audit Division since July 2008. Before that, he was our Regulatory Policies Division manager in 2008, Global Compliance Division manager from 2006 until 2007 and deputy general counsel between 2004 and 2006. Prior to joining the Bank in 2002, he was deputy general counsel at Banco A. Edwards, an institution that he joined in 1991. Mr. Mehech is also the vice chairman of the surveillance committee at Depósito Central de Valores S.A. He holds a law degree from Universidad de Chile and an MBA from Pontificia Universidad Católica de Chile.
Esteban Kemp D. has been manager of our Marketing, Technology and Digital Division since March 2024. Before, he served as our acting manager of our Global Risk Control Division. Prior to that, he had been the manager of the Operational Risk Area since 2016. Mr. Kemp joined Banco de Chile in July 2016, after serving as senior manager at EY Chile. He had his first managerial position as a manager at Everis (now NTT Data), in 2011. Mr. Kemp holds a civil engineer degree in computer science from the Universidad Austral de Chile and holds an MBA from the Universidad Adolfo Ibáñez.
Salvador Danel H. has been manager of our Cybersecurity Division since January 2019. In 2016, he was Cybersecurity Architect at Microsoft, responsible as a cybersecurity advisor for several organizations, cybersecurity assessments, compromise recovery activities and cloud planning. In 2015, he was Senior Security Manager at Accenture, responsible for the evaluation, planning and implementation of plans and processes related to cybersecurity for different industries. Between 2008 and 2014, he held the position of Senior Manager of Enterprise Risk Services at Deloitte, responsible for various areas, including, among others, cybersecurity practices to improve technology solutions, consulting services and business management, cybersecurity projects, define and develop corporate cybersecurity strategies. In addition, Mr. Danel is co-founder of Secure Information Technologies Consulting, responsible for, among other, defining the processes of the cybersecurity business (risk, threat and vulnerability management, incident management, hardening of infrastructure, forensic analysis, data classification, destruction of data and others), and IT and security assessment. Mr. Danel holds a bachelor’s degree in Information Technology Engineering from the Anahuac University (Mexico).
Tatiana Tatter C. has served as manager of the Operational Risk and Global Control Division since March 2026. Prior to her current role, she served as Manager of the Global Control Area from August 2024, leading operational risk management and business continuity. She joined Banco de Chile in August 2016 as Head of the Process Engineering Department and, between 2018 and 2024, served as manager of the Operational Risk and Continuous Improvement Area. Prior to joining Banco de Chile, Ms. Tatter held various positions at EY between 2011 and 2016, including senior consultant, acting manager, and manager in the Financial Services Advisory area. Ms. Tatter holds a degree in Civil Engineering in Computer Science from the Universidad Austral de Chile and a Postgraduate Diploma in Project Preparation and Evaluation from the Universidad de Chile.
COMPENSATION
The table below presents the amount of compensation, as established by our shareholders, to the members of our board of directors for the year ended December 31, 2025. These amounts include remuneration for services, fees for attendance at meetings of our board of directors, meetings of committees of our board of directors and meetings of board of directors of our subsidiaries, consulting services and travel expenses.
| Name of Director | Remuneration | Fees for Attending Meetings of our Board of Directors | Fees for Attending Meetings of Committees of our Board of Directors and Meetings of the Board of Directors of our Subsidiaries(1) | Consulting | Total | |||||||||||||||
| (in millions of Ch$) | ||||||||||||||||||||
| Pablo Granifo Lavín | Ch$ | 736 | (2) | Ch$ | 77 | Ch$ | 359 | Ch$ | – | Ch$ | 1,172 | |||||||||
| Francisco Pérez Mackenna | 229 | 39 | 124 | – | 392 | |||||||||||||||
| Raúl A. Anaya Elizalde | 76 | 39 | 122 | – | 237 | |||||||||||||||
| Hernán Büchi Buc | 76 | 39 | 92 | – | 207 | |||||||||||||||
| Jaime Estévez Valencia | 76 | 39 | 148 | – | 263 | |||||||||||||||
| Sandra Guazzotti | 76 | 37 | 95 | – | 208 | |||||||||||||||
| Patricio Jottar Nasrallah | 76 | 39 | 76 | – | 191 | |||||||||||||||
| Jean-Paul Luksic Fontbona | 76 | 26 | – | – | 102 | |||||||||||||||
| Andrés Ergas Heymann | 76 | 31 | 84 | – | 191 | |||||||||||||||
| Julio Figueroa | – | – | – | – | – | |||||||||||||||
| Paul Furst Gwinner | 76 | 39 | 90 | – | 205 | |||||||||||||||
| Ana Holuigue Barros | 76 | 39 | 166 | – | 281 | |||||||||||||||
| Sinéad O’Connor | – | – | – | – | – | |||||||||||||||
| Other Subsidiary Directors | – | – | 192 | – | 192 | |||||||||||||||
| Total | Ch$ | 1,649 | Ch$ | 444 | Ch$ | 1,548 | Ch$ | – | Ch$ | 3,641 | ||||||||||
| (1) | Includes fees paid to members of the Executive Committee of Banchile Corredores de Seguros Ltda. of Ch$16 million (Ch$18 million in 2024). |
| (2) | Includes a provision of Ch$507 million (Ch$490 million in December 2024), to account for an incentive which will be paid depending on the degree of fulfillment of our results, as determined by the Directors/Audit Committee. |
For the year ended December 31, 2025, travel and other related expenses amounted to Ch$80 million (Ch$78 million in 2024).
Consistent with Chilean law, we do not disclose to our shareholders, or otherwise make public, information regarding the compensation of our executive officers. Pursuant to the Chilean Corporations Law, our directors/audit committee must approve compensation plans, but we are not required to have a compensation committee. For the year ended December 31, 2025, no amounts were set aside or accrued by us to provide pension, retirement or similar benefits for our directors and officers. None of our directors is party to any agreement with us or any of our subsidiaries that provides for benefits upon termination of his appointment as a director.
BOARD PRACTICES
Governance Practices
The board of directors relies on board committees for the performance of certain functions. These committees conduct in-depth analysis of specific matters and provide the board with the information required to discuss and approve general policies and guidelines that govern the Bank’s business activities. Board committees are composed of directors appointed by the board and officers from senior management, as established in their respective bylaws.
The Directors/Audit Committee
The directors/audit committee’s primary objectives are to seek the efficiency, maintenance, application and functioning of our internal control systems and compliance with applicable rules and procedures governing our business; to identify and understand our business risks; to supervise the activities of Internal Audit, ensuring their independence from management; to serve as mediator and coordinator of tasks between the internal audit work and our independent auditors; to act as a communication channel between our internal audit team, our independent auditors and our board of directors; and to ensure the compliance with the duties set forth in Article 50 bis of the Chilean Corporations Law.
Our directors/audit committee is composed of three members appointed by the board of directors. The directors/audit committee is currently composed of the following individuals:
| ● | Anita Holuigue Barros (financial expert); |
| ● | Paul Furst Gwinner; and |
| ● | Vivianne Caumont |
Ms. Holuigue was appointed as member of the directors/audit committee by our board of directors at the meeting held on April 12, 2023. Mr. Furst and Ms. Caumont were appointed to the directors/audit committee by our board of directors at the meeting held on March 26, 2026. Mr. Furst and Ms. Holuigue comply with the independence requirements of both Chilean law and Rule 10A-3 under the Exchange Act and are full voting members of our directors/audit committee.
Ms. Caumont is exempt from the independence requirements of Rule 10A-3 of the Exchange Act pursuant to the exemption under Rule 10A-3(b)(1)(iv)(D). Pursuant to that exemption, Ms. Caumont is a non-voting member of our directors/audit committee with respect to all matters required to be addressed by our directors/audit committee under U.S. federal securities laws.
The directors/audit committee met 14 times (12 ordinary and 2 extraordinary meetings) during 2025. The budget of the directors/audit committee is approved annually at the ordinary annual shareholders’ meeting. The directors/audit committee satisfies the applicable requirements of the CMF and operates pursuant to a charter document. The CMF recommends that at least one of the members of the directors/audit committee be experienced with respect to the accounting procedures and financial aspects of banking operations. The directors/audit committee submits a report regarding its activities to our board of directors after each directors/audit committee meeting and presents an annual report at our ordinary annual shareholder’s meeting. As established in the directors/audit committee’s charter, the chief executive officer, the general counsel and the manager of our Internal Audit Division, or their respective deputies, shall also attend this committee’s meetings. The directors/audit committee may also invite other persons to attend meetings. The directors/audit committee may appoint independent personnel to carry out specific duties.
The directors/audit committee’s specific objectives include, among others:
| ● | Seeking efficiency, maintenance, application and functioning of our internal control systems, and compliance with rules and procedures; |
| ● | Supervising compliance with rules and procedures governing the banking business and identifying the business risks of our and our subsidiaries’ activities; |
| ● | Supervising the activities of our Internal Audit Division and ensuring its independence from management; |
| ● | Serving as an intermediator and coordinator of tasks between our internal audit work and our independent auditors, and acting as a communication channel between these teams and our board of directors; |
| ● | Proposing to the board of directors the independent auditors and the credit rating agencies to be proposed at the shareholders meeting; |
| ● | Analyzing the reports, content, procedures and scope of the revisions by our independent auditors and credit rating agencies; |
| ● | Analyzing the reports of internal audits and revisions and analyzing and reviewing the annual audit program; |
| ● | Analyzing the interim and annual financial statements; |
| ● | Analyzing our financial statements included in the Form 20-F; |
| ● | Gathering information on accounting changes occurring during the year and their effects; |
| ● | Reviewing issues affecting the internal control systems; |
| ● | Analyzing the remuneration systems and compensation plans for managers and executive officers; |
| ● | Analyzing the annual performance self-evaluation process; |
| ● | Analyzing related party transactions pursuant to Title XVI of the Chilean Corporations Law; |
| ● | Analyzing policies relating to operational risk and progress in the risk-management process and SOX self-evaluation; |
| ● | Analyzing and informing on matters related to the Global Compliance Division, principally regarding the revision of policies for detecting and sanctioning money laundering transactions; and |
| ● | Reviewing customer claims filed with the CMF and the Customer Defense Division of the Chilean Association of Banks and Financial Institutions. |
Further to the above, in relation to Banco de Chile’s Clawback Policy, this committee is in charge of determining the application of said policy and resolving on the means to proceed with any recovery thereunder. Also, it is responsible of elaborating such policy in accordance with applicable laws and regulations.
Portfolio Risk Committee
The portfolio risk committee is frequently informed on the composition, concentration and risk of our loan portfolio, from a global, sector-specific and line of business perspective.
The main function of this committee is to monitor and evaluate changes in the composition, concentration and level of risk of our loan portfolio from an overall, industry-sector and business-line perspective. It is also responsible for reviewing and approving the Comprehensive Risk Measurement (CRM) and the Credit Risk Appetite Framework (RAF) in the area of credit risk. The committee’s functions include reviewing the bank’s main debtors, default rates, past-due loan and impairment indicators, charge-offs and allowances for the loan portfolio by segment and proposing differentiated management strategies, as appropriate. It also analyzes and agrees on credit policy proposals to be submitted to the board of directors for approval. In addition, this committee is responsible for reviewing and ratifying the approvals of management models and methodologies previously agreed by the Technical Committee for Internal Models Supervision and Development, ensuring consistency with institutional guidelines. It is also responsible for proposing regulatory models and methodologies that require higher-level validation to the board of directors for its final approval.
The portfolio risk committee meets on a monthly basis and is composed of the chairman of our board of directors three additional members of our board of directors, our chief executive officer; our chief risk officer, the manager of our Commercial Division and the manager of our Risk Management Monitoring and Control Area.
Board Credit Committee
Our governance structure relating to our credit evaluation process is based on our business segments and on the total requested. All credit committees are represented by qualified members with sufficient authority over credit approval limits.
Credit decisions are mostly made by different credit committees, the highest of which, in terms of lending limits, is the board credit committee. The board credit committee meets on a weekly basis and reviews all transactions related to clients or groups of companies exceeding UF 750,000, as well as those transactions that, in accordance with our bank’s credit risk policies must be reviewed and approved by the Board Credit Committee. This committee is chaired by our chairman and is comprised by all of our board members, our chief executive officer and our chief risk officer. The members of the directors’ audit committee and the chief risk officer participate on a non-voting basis.
Additionally, for retail banking, we have loan committees that in exceptional cases review individual customers when they do not meet our customer profile policies, payment behavior requirements or maximum financing amounts.
Finance, International and Financial Risk Committee
The general objectives of this committee are to monitor and review the liquidity status, trends in the most important financial positions, their associated results, and their price and liquidity risks. Some of its specific functions are, among others, reviewing the board’s proposal for the risk appetite framework, the funding plan and the structure of limits and alerts for price and liquidity risks; reviewing and approving the comprehensive risk measurement for subsequent review by the Capital Management Committee and approval by the board of directors ; designing policies and procedures related to limits and alerts for financial positions and liquidity risk, reviewing the trends in financial positions and market risks, monitoring exceeded limits and activated alerts, ensuring that the risk factors affecting financial positions are adequately identified, ensuring that the price and liquidity risk management guidelines at the bank’s subsidiaries are consistent with those of the bank and that these are reflected in its own policies and procedures. This committee has monitored and continuously reviewed the bank’s liquidity status (funding and trading of instruments), trends in the most important financial positions, their associated results, and their price and liquidity risks.
The finance, international and financial risk committee meets on a monthly basis. Its members are the chairman of the board of directors, three other members of the board of directors, the chief executive officer, the chief financial officer, the manager of our Treasury Division, our chief risk officer and the manager of the Market Risk Area.
Compliance Committee
The purpose of this committee is to define the policies of the bank and its subsidiaries that comprise their money laundering and terrorism financing prevention systems, and to evaluate compliance and resolve any associated issues in order to prevent the bank or its subsidiaries from being used to legitimize assets from illicit transactions, to obtain the means to finance terrorism and the proliferation of weapons of mass destruction, thus preventing their exposure to specific reputational, operational or legal risks, and ensure strict compliance with the law and related regulations. This committee is also to be informed of other relevant matters under the responsibility of Banco de Chile’s Global Compliance Division, such as its Crime Prevention Model, derived from Law No. 20,393, Model for the Prevention of Anti-Competitive Practices, Model for the Prevention of Violations of the Personal Data Protection Law (currently under development), the processes derived from the U.S. regulation FATCA, the OECD regulation CRS, and the corporate policies derived from the agreements in force with Citigroup, ensuring their proper functioning.
This committee is composed of three board members, two of which must be independent. Additionally, the committee includes, as non-voting members, our chief executive officer, our general counsel, the chief executive officer of Banchile Administradora General de Fondos S.A., the chief executive officer of Banchile Corredores de Bolsa S.A., the manager of our Marketing, Technology Digital Division, the manager of our Internal Audit Division, the manager of our Global Compliance Division, the manager of our Commercial Division and the manager of our Anti Money Laundering Area.
This committee meets on a quarterly basis. The specific roles of this committee include approving corporate governance policies regarding the prevention of money laundering, terrorism financing and proliferation of weapons of mass destruction and those regarding “know your customer” or KYC, their businesses and accepting and monitoring their accounts, products or businesses; approving policies that define high-risk customers, products and areas and their associated treatment, particularly those involving PEPs; approving policies regarding transactional monitoring and risk escalation processes by members of the bank; approving policies related to understanding and controlling correspondent banks; approving policies related to sanctions applied by the Office of Foreign Assets Control (OFAC) to people or countries on the OFAC list; approving the annual training plan and monitoring progress; approving the employee selection policy; appointing individuals to serve as liaisons with the Financial Analysis Unit, in accordance with Article three of Law 19,913; reviewing and analyzing the results of the reviews conducted to verify compliance with current policies and procedures; being aware of the implementation and operation of the Crime Prevention Model under Law 20.393, the Anti-Competitive Practice Prevention Model, and the Personal Data Violations Prevention Model; and other functions related to these matters.
Senior Operational Risk Committee
The Senior Operational Risk Committee is an executive committee with the authority to approve necessary changes in the processes, procedures, controls, and information systems that support the bank’s transactions in order to mitigate operational risks and assure that different areas of the Bank can appropriately manage and control these risks. Among many other functions related to the supervision of the adequate operational risk management in the bank and its subsidiaries, this committee is responsible for sanctioning the implementation and/or updating of the regulatory framework on policies and bylaws associated with the bank’s comprehensive operational risk management model, incorporating plans and initiatives for its development and dissemination in the organization; promoting a culture of operational risk management in the bank and subsidiaries; reviewing and approving the comprehensive risk measurement in operational risk matters; reviewing and approving the bank’s operational risk appetite framework; ensuring compliance with the regulatory framework in the areas related to operational risk; being aware of the main cases of fraud and other incidents and events and their root causes, impacts and corrective measures, as appropriate; ensuring the long-term solvency of the organization by avoiding those risk factors that may endanger the continuity of the bank; making decisions on new products and services; verifying the consistency of related policies at the bank’s subsidiaries and ensuring compliance; being aware of the operational risk management in subsidiaries and of the level of risk to which the bank is exposed in its outsourced services and approving the models selected for stress testing and the methodologies for selecting scenarios and evaluating the results, among other things.
Some key milestones from 2025 include validating and approving the updated operational risk management policies. These policies include: the operational risk policy, the services outsourcing policy, the policy for complex products and services, the business continuity policy, and the information security and cybersecurity policy, all approved by the board of directors ; the review and validation of the comprehensive risk measurement (CRM) and the risk appetite framework (RAF) for operational and technological risk, the review of the results of the stress testing exercise for operational risk, which were subsequently submitted for review by the capital management committee and approval by the board of directors ; the review and verification of the results of the Risk Management Self-assessment Matrix (as defined in Chapter 21-13 of the Restated Regulations for Banks of the CMF); the knowledge of the subsidiaries’ management of operational risk, including the topics of information security, cybersecurity and business continuity; ratification of the criticality of products and services, and their respective recovery time objectives (RTO); approval of the business continuity strategy, approval of the update of the crisis management manual, as well as of the business continuity standard and norms; approval and acknowledgment of the progress and results of the testing of the operational contingency plans, disaster recovery plans (DRP) and cybersecurity response procedures; presentation of business continuity management on critical suppliers, results of internal audit and regulatory compliance under Chapter 20-9 Restated Regulations for Banks of the CMF; presentation of the results of technology and cybersecurity risk assessments on the bank’s business processes, presentation of the results of operational risk management for critical service providers, cyber risk exposure of suppliers, cyber risk assessment on technology projects and results of phishing exercises conducted. This committee meets on a monthly basis or in extraordinary meetings as convened on short notice, and is composed of the chairman and three additional members of our board of directors, our chief executive officer, our chief risk officer, the manager of our Marketing, Technology Digital Division, the manager of our Commercial Division, the manager of our Cybersecurity Division, the manager of our Marketing and Digital Banking Division and the manager of our Global Control Area.
Capital Management Committee
The main function and objective of this committee is to evaluate, monitor and review the Bank’s capital adequacy under the principles set by the Bank’s Capital Management Policy and applicable risk appetite frame, safeguard that capital resources are adequately managed, that the principles set by the CMF in this respect are complied with, and the sustainability of the Bank’s business in the medium-term horizon.
Among other matters, the Capital Management Committee is responsible for reviewing and updating, at least on an annual basis, the Capital Management Policy; ensuring that the Bank counts with sufficient capital as may be required to properly manage its necessities in normal and stressed scenarios, in a three-year horizon; reviewing the results of stress tests, the Bank’s risk appetite framework related to business and capital and the Bank’s Total Regulatory Capital self-evaluation report; briefing the board of directors on the compliance of the Bank’s capital plan, the Banks’s risk appetite framework related to business and capital, and any variable affecting such parameters.
This committee meets on a quarterly basis and is composed of two members of our board, the chief executive officer, the chief financial officer, our chief risk officer, and by the manager of our Financial Control of Treasury & Capital Area.
Collection Committee
The Collection Committee was created in July 2025 following the dissolution of the subsidiary Socofin. Our chairman, the chief executive officer, the managers of the Corporate Risk Division, the Commercial Division and the Special Assets Management Area managers are members. The manager for Retail Collections participates as a guest. The Legal Division’s lead attorney for the Judicial Area serves as secretary.
The main purpose of the Collections Committee is to provide ongoing and adequate follow-up of loan collections. In particular, the committee must be aware of the results and evolution of the amounts assigned to collections in the different stages of delinquency of each product, as well as the productivity and recovery of the different banking divisions. Since the committee’s creation, monthly meetings have been held to review the portfolio under collections management in consumer banking (consumer and mortgage) and SME - companies banking, as well as information on debtors subject to the procedures of Law 20,720.
Banchile Corredores de Seguros Executive Committee
The main purpose of the Banchile Corredores de Seguros Executive Committee is to review commercial performance and initiatives in the development of the insurance business and to take the actions necessary to implement the business plans undertaken by our insurance brokerage subsidiary Banchile Corredores de Seguros Limitada.
This committee is composed of the chairman of our board of directors, one other member of our board of directors, our chief executive officer, the manager of our Commercial Division and the chief executive officer of Banchile Corredores de Seguros Limitada.
Committees integrated by Banco de Chile’s senior management
The main committees integrated by Banco de Chile’s senior management executives are:
Senior Management Committee
This committee meets every month and is chaired by our chief executive officer. It is comprised of all the division managers and the chief executive officer of Banchile Corredores de Bolsa S.A. Its main duty is to evaluate business performance and analyze the market, the banking industry and the economic, regulatory, and competitive environment. This committee resolves management issues related to the bank’s internal policies and analyzes its performance. It provides its members with the opportunity to share their points of view and prioritize joint initiatives. Each year, the committee outlines the foundations for the annual business plan. To that end, once the chief executive officer, division managers and subsidiary’s chief executive officers agree on their individual annual business plan in coordination with the chief financial officer, the general plan is presented to the board for approval. This committee also reviews progress on regularly approved plans and initiatives.
Disclosure Committee
The main purpose of this committee is to comply with best practices in the disclosure of financial information to the market, to allow the market and its participants an adequate interpretation of our bank’s financial situation, business position and solvency level, through different reports published for such purposes. This committee meets on a quarterly basis, and its members are required to review annual, mid-year and quarterly financial reports and in general all financial information disclosed by us prior to each disclosure.
The members of the disclosure committee include our chief financial officer, our credit risk officer, the manager of our Operational Risk and Global Control Division, our chief accountant, our chief legal counsel for financial and international banking matters, the manager of our Research and Planning Area, the manager of our Financial Control of Treasury & Capital Area, the manager of our Risk Model Area and the manager of our Risk Control and Follow-up Area. The manager of our Internal Audit Division may participate in this committee as well.
Ethics Committee
The purpose of the Ethics Committee is to define, promote and regulate behavior of professional and personal excellence consistent with our philosophy and values to be followed by all our staff in order to meet the expectations of our customers.
To meet these goals and promote a culture of ethical behavior, the Ethics Committee sets policies on ethics and ensures their compliance, develops training plans related to ethics in our business, and reinforces positive behavior among our staff. The Ethics Committee also acts as a forum to address, discuss and resolve any conduct by our staff that is inconsistent with our values. This committee meets every four months and additionally, when necessary, upon receiving internal reports or complaints. It is chaired by the manager of our People and Organization Division and includes our general counsel, the manager of our Internal Audit Division, the manager of our Global Compliance Division, the manager of our Commercial Division, and the manager of our Marketing, Technology and Digital Division.
Sustainability Committee
The main objective of this committee is to analyze and propose sustainability challenges and requirements in business strategies, based on actions related to environmental, social and governance (ESG) matters. Among other tasks, it is also responsible for designing, managing and disseminating our bank’s (and its subsidiaries) sustainability strategy and policies. For such purposes, different stakeholders are considered, including customers, investors, employees, the community and suppliers.
This committee meets every two months and is chaired by our chief executive officer. It is also composed by our chief financial officer, our general counsel, our chief risk officer, the manager of our Marketing, Technology and Digital Division, the manager of our People and Organization Division, our head of Investor Relations (also Chief Economist), the manager of our Corporate Affairs and Sustainable Development area and the manager of our Corporate Image and Advertising area.
Quality Committee
The main objective of this committee is to generate strategic guidelines for decision-making on issues related to the attention of customers, through all channels available at the bank, by means of the analysis of customer perception and relevant competition. In addition, this committee supervises projects and initiatives aimed at increasing the permanence and referrals of our customers.
This committee meets every two months and is chaired by our chief executive officer, our chief financial officer, the manager of our Commercial Division, the manager of our Corporate Banking Division, the manager of our Marketing, Technology and Digital Division, the manager of our Clients Area and the head of the Clients’ Feedback area.
Technical Committee for the Supervision and Development of Internal Models
This committee sets, among other functions, the main criteria and guidelines to be used for the construction of new models; and reviews and approves methodologies associated with non-regulatory models that must be submitted to the Portfolio Risk Committee. This committee reviews regulatory models, with approval remaining in the hands of the Portfolio Risk Committee and the board of directors. It is also responsible for establishing minimum standards for monitoring the quality of the internal models and for documenting the different areas related to the development, construction, monitoring and operation of the models.
It meets on a monthly basis and is composed of the Corporate Risk Division manager; the Monitoring, Reporting, and Planning manager; the Research and Planning Area manager; the Retail Business Development Area manager; the Risk Modeling Area manager; the Retail Origination and Risk Modeling Area manager; the Corporate Credit Risk Admission Area manager; the Data Governance manager; the Special Assets Management Area manager; the deputy manager of Regulatory Models; the deputy manager of Provision Processes; the deputy manager of Model Risk Monitoring and Management; the deputy manager of Validation and Internal Control; and the deputy manager of Decision Models and AI.
Investment and Expenditures Committee
The main objectives of the Investment and Expenditures Committee are to review investment or expenditures related initiatives or projects amounting to more than UF 12,500; to ensure that these investments or expenditures are consistent with our strategic plans; and to evaluate these new projects from an economic perspective, among others. Notwithstanding the foregoing, if a project involves the incremental disbursement of resources for more than UF 25,000, this committee must request the approval of our board of directors.
This committee meets only in extraordinary sessions, on the dates determined by its chair. It is composed of the Chief Executive Officer; the Chief Financial Officer; the Administration Area manager; the Purchasing manager; and the Expense Control Area manager. The Marketing, Technology, and Digital Division manager and the Planning and Project Management Office (PMO) Area manager also serve on the committee when technological projects require approval.
Project Approval Committee
The main objectives of this committee are to approve technology initiatives or projects, whether investments or expenditures; to ensure that these investments or expenditures are consistent with our strategic plans; and to economically evaluate new projects, among others. Notwithstanding the latter, if a project involves the incremental disbursement of resources of more than UF12,500, this committee requires the approval of the Investment and Expenditures Committee.
This committee meets on a weekly basis or in extraordinary sessions as determined by its chair. Its members are the managers of the Marketing, Technology and Digital Division, the Administration Area, the Expense Control Area, and the Planning and Project Management Office (PMO) Area.
Model Risk Management Committee
The main role of this committee is to establish and supervise the model risk management framework and the corresponding methodologies at the institutional level. Among other matters, this committee reviews and discusses the identification and assessment of model risks based on aggregate results, oversees the updating of the inventory of institutional models and submits the Model Risk Management Policy to the board for review and approval.
This committee meets on a quarterly basis and is composed of the Corporate Risk Division manager; the Treasury Division manager; the Anti-Money Laundering Area manager; the Special Asset Management Area manager; the Financial Control of Capital and Treasury Area manager; the Retail Origination, Regulation, and Risk Transformation Area manager; the Risk Modeling Area manager; the Global Control Area manager; the Risk Management Control and Monitoring Area manager; the Internal Risk Modeling and Control Area manager; the Market Risk Area manager; the Corporate Credit Risk Origination Area manager; the Technology Area manager; the Risk Model Monitoring and Management deputy manager; and the Internal Control and Validation deputy manager.
IT Steering Committee
The objective of Banco de Chile’s IT Steering Committee is to align, coordinate, and address the issues set forth in the strategic technology planning and technology guidelines. This committee meets on a monthly basis and is comprised of the managers of the Marketing, Technology, and Digital Division; the Technology Area; Planning and PMO; the Infrastructure Area; the Agility Center; and software development.
Policies and Procedures
Our board of directors has approved policies and procedures addressing several matters. In addition, the Merger Agreement between us and Citibank Chile provided that as a general rule our board of directors would approve and implement certain policies and procedures relating to the operation of the joint entity. These policies are reviewed annually and updated as necessary.
Clawback Policy
In September 2023, our board of directors approved Banco de Chile’s clawback policy providing for the recovery of erroneously awarded incentive-based compensation received by current and former executive officers in connection with a financial restatement, regardless of fault or misconduct, on or after October 2, 2023. A copy of our clawback policy, also referred to herein as Incentive Recovery Policy, is incorporated by reference as Exhibit No. 97.
Policies
As of the date of this annual report, our board of directors or, when applicable, our senior management, have approved policies and/or procedures regarding the following issues, among others:
| ● Code of Conduct; | ● Capital Management Policy | ||
| ● Anti-Money Laundering, Anti-Terrorism Finance and Non-Proliferation of Weapons of Mass Destruction Policy; | ● Capital Expenditure Policy; | ||
| ● Conflict of Interest Management Policy; | ● Expense Management Policy; | ||
| ● Anti-Trust Policy; | ● Accounting Policies and Procedures; | ||
| ● Anti-Bribery and Foreign Corrupt Practices Act; | ● Complex Products and Services Policy; | ||
| ● Office of Foreign Assets Control; | ● Tax Standards for Tax Sensitive Transactions Policy; | ||
| ● Insider Trading Prevention and Personal Investment Management Policy; | ● Tax Policy and Procedures; | ||
| ● Regulation K—Debts Previously Contracted; | ● Fiduciary Policy; | ||
| ● Regulation K—Equity Activity; | ● Mergers and Acquisitions Policy; | ||
| ● Regulation W (23 A/B); | ● Records Management Policy; | ||
| ● Financial Information Disclosure Policy; | ● Electronic Transportable Media Policy; | ||
| ● Fair Lending Policy; | ● Volcker Rule Policy; | ||
| ● Loans to Directors and Senior Management; | ● Market Risk Policy; | ||
| ● Independent Research Policy; | ● Liquidity Risk Policy; | ||
| ● Customary Transactions Policy with Related Parties; | ● Crime Prevention Model Policy; | ||
| ● Charitable Donations Policy; | ● False Corporate Information Delivery Prevention Policy; | ||
| ● Internal Audit Policy; | ● Abusive Board Agreements Crimes Prevention Policy | ||
| ● Non-Discriminatory Access to Credit Product for Natural Persons Policy; | ● Trade Secrets Intrusion, Disclosure and Use Prevention Policy; | ||
| ● Information Security and Cybersecurity Policy; | ● General Banking Law Crimes Prevention Policy; | ||
| ● Strategic Cybersecurity Plan; | ● Public and Private Instruments Falsification Prevention Policy | ||
| ● Industrial Property Crimes Prevention Policy; | ● FATCA Policy; | ||
| ● Anti-Tying Policy; | ● Fair Value Policy; | ||
| ● Mandatory Absence Policy; | ● Compliance Program for Antitrust Regulation; | ||
| ● Compliance Policy/Program; | ● Manual for Handling Information of Interest to the Market; | ||
| ● Legal Entity Management Policy; | ● PEPs Policy; | ||
| ● Fraud Management Policy; | ● Business Continuity (COB); | ||
| ● Anti-Boycott Policy; | ● Citi Information Security Standards; | ||
| ● Issue Tracking, Management and Escalation Process; | ● General Ledger Maintenance Policy; | ||
| ● Operational Risk Management Policy; | ● Quality Policy; | ||
| ● Environmental Sustainability Policy; | |||
| ● Sustainability Policy; | |||
| ● Inclusion, Non-Discrimination Respect for Diversity Policy; | |||
| ● Credit Risk Policy; | |||
| ● Vendor Selection and Management Process; | |||
| ● Web Site Standards Policy; | |||
| ● Information Technology; | |||
| ● Service Outsourcing Policy; and | |||
| ● Clawback Policy. |
EMPLOYEES
The following table shows a breakdown of our full-time, permanent employees at the dates indicated:
| As of December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| Banco de Chile | 10,365 | 9,920 | 10,301 | |||||||||
| Subsidiaries | 1,852 | 1,694 | 855 | |||||||||
| Total | 12,217 | 11,614 | 11,156 | |||||||||
As of December 31, 2025, we had 11,156 employees (on a consolidated basis), of whom 8,787 (including Banco de Chile and subsidiaries) were unionized, representing 78.8% of the total employees of the Bank and its subsidiaries. As of the same date, all management positions were held by non-unionized employees.
Banco de Chile currently has 10 unions that collectively negotiate their bargaining agreements. One of these unions represents workers of both Banchile Administradora General de Fondos and Banchile Corredores de Bolsa subsidiaries. The remaining unions represent the Bank’s employees and five of them negotiate as a single union (Federación de Sindicatos de Banco de Chile). Due to the integration of Socofin into the Bank, effective in July 2025, the former Socofin Union became the “Banco de Chile Socofin” union.
In 2025, we carried out a renegotiation of the collective bargaining agreements with Banchile’s union, reaching a three-year agreement, expiring in 2028. In 2026, we expect to renegotiate the collective bargaining agreements with the rest of the Bank’s unions. We believe that all of the current agreements reflect the satisfactory relationships between the Bank and its employees, while reinforcing our commitment to their career development.
We have comprehensive personnel training and development programs that include internal courses on operational, technical and commercial matters, as well as participation in external seminars and conferences. In 2025, the total cost of training programs was approximately 0.5% of our consolidated personnel expenses. These expenses were associated with 6,796 training courses that were attended by 218,823 attendees. In addition, for the year ended December 31, 2025, the Bank granted 280 scholarships to staff members for specialization purposes.
We do not maintain any pension or retirement programs for the vast majority of our employees. We do, however, pay certain long-serving key employees a severance payment upon retirement. Although we have provided productivity bonuses to individual employees on a discretionary basis, we do not maintain a formal profit-sharing plan.
SHARE OWNERSHIP
Mr. Jean Paul Luksic, member of our board of directors since April 2013, together with members of their family, control Quiñenco S.A. (“Quiñenco”). As of April 24, 2026, Quiñenco directly and indirectly owns 50% of LQIF, which in turns owns directly 46.34% of our outstanding shares and 4.81% through Inversiones LQ-SM Ltda. (“LQ-SM”). Quiñenco also directly holds 0.11% of our total common stock.
LQIF and LQ-SM are investment vehicles incorporated under Chilean law through which Quiñenco and Citigroup hold their ownership interests in Banco de Chile. As part of the strategic partnership between Citigroup and Quiñenco, they entered into a framework agreement which was included in our 6-K filed on July 20, 2007. Pursuant to this agreement and following the merger of Citibank Chile into Banco de Chile, Quiñenco and Citigroup became the shareholders of LQIF, the parent corporation of Banco de Chile. LQ-SM is an investment vehicle whose major shareholder LQIF owns 99.99% of its shares.
As of April 24, 2026, Citigroup is the owner of 50% of LQIF and Quiñenco, directly and indirectly, owns 50% of LQIF. Regardless of any increase in participation by Citigroup, however, the framework agreement provides that Quiñenco will remain in control of LQIF and the corporations that are directly or indirectly controlled by LQIF. Accordingly, Quiñenco will maintain the power to elect the majority of the directors of LQIF and Banco de Chile.
None of our directors or senior management directly owns 1% or more of our outstanding common stock. Further, none of our directors (including Mr. Jean Paul Luksic) or senior management have different or preferential voting rights with respect to the shares they own.
We do not have any arrangements for involving employees in our capital, including any arrangements that involve the issue or grant of options of our shares or securities.
Item 7 Major Shareholders and Related Party Transactions
MAJOR SHAREHOLDERS
Ownership Structure
LQIF and Inversiones LQ-SM Ltda. are vehicles incorporated under Chilean law through which Quiñenco S.A. and Citigroup hold their ownership interests in Banco de Chile. Additionally, Quiñenco S.A. has a direct shareholding of 0.11% of our total common stock.
The following diagram shows our share ownership structure as of April 24, 2026:
Source: Banco de Chile.
Major Shareholders
The following table sets forth certain information regarding the ownership of outstanding shares as of April 24, 2026 for the following:
| ● | each person or entity who is known by us to own beneficially more than 5% of our outstanding shares and LQIF; and |
| ● | our directors and members of our executive management group, as a group. |
Ownership in Banco de Chile
(As of April 24, 2026)
| Name | Amount Owned | Percentage | ||||||
| LQIF and LQ-SM(1) | 51,670,277,343 | 51.15 | % | |||||
| Directors and executive officers as a group(2) | 1,716,174 | 0.0017 | % | |||||
| (1) | LQIF and LQ-SM hold 46.34% and 4.81%, respectively, of our shares. In connection with the framework agreement executed between Citigroup, Inc. and Quiñenco S.A. in July 2007, as amended, and following the merger of Citibank Chile into Banco de Chile, Citigroup became a shareholder of LQIF. As of April 24, 2026, Citigroup is the owner of 50% of LQIF, and Quiñenco directly and indirectly owns 50% of LQIF. Regardless of any increase in participation by Citigroup, however, the agreement provides that Quiñenco will remain in control of LQIF and the corporations that are directly or indirectly controlled by LQIF. Accordingly, Quiñenco will maintain the right to elect the majority of the directors of LQIF and Banco de Chile. As of December 31, 2025, members of the Luksic family or their affiliates beneficially owned 82.9% of the common shares of Quiñenco S.A. Mr. Jean Paul Luksic is a member of our board of directors. |
| (2) | Percentage reflects direct and indirect share ownership, excluding the share ownership of Mr. Jean Paul Luksic, member of our board of directors, whose direct and indirect ownership is reflected and discussed under the share ownership of LQIF and LQ-SM above. |
RELATED PARTY TRANSACTIONS
In the ordinary course of our business, we engage in a variety of transactions with certain of our affiliates and related parties. Financial information concerning these transactions is set forth in Note 40 to our audited consolidated financial statements as of and for the year ended December 31, 2025, included elsewhere in this annual report. In accordance with the Chilean Corporations Law, related party transactions in publicly held corporations are defined as every negotiation, act, contract or operation in which the corporation deals with any of the following persons: (i) one or more persons related to the corporation, in accordance with the Chilean Securities Law No. 18,045; (ii) a director, manager, administrator, main executive or liquidator of the corporation, acting on its own behalf or on behalf of third parties, or their respective husband or wife or any other person to which such director, manager, administrator, main executive or liquidator has a second degree relationship with (either by consanguinity or affinity); (iii) companies or corporations in which the persons mentioned in the previous item are owners, directly or through other juridical or natural persons, of 10% or more of its capital, or directors, managers, administrators or main executives; (iv) those established in the bylaws of the corporation or those identified by the directors committee on a well-founded basis, as the case may be, even in the event of those set out at the final paragraph of article 147; or (v) those in which a director, manager, administrator, main executive or liquidator of the corporation has acted as a director, manager, administrator, main executive or liquidator within 18 months of the relevant transaction.
We may only enter into transactions with related parties if (i) the purpose of the transaction is in our best corporate interest, (ii) the transaction reflects prevailing market prices, terms, and conditions at the time of the approval of the relevant transaction and (iii) the transaction complies with the requirements and procedures specified in the Chilean Corporations Law, which requires our board of directors to approve the relevant transaction based upon the criteria mentioned in items (i) and (ii) of this paragraph, among other requirements. In order for our board of directors to approve any such transactions, the related party involved in or negotiating the transaction must give prior notice to our board of directors and the respective director must abstain from voting.
A violation of these provisions shall not affect the transaction’s validity, but shall grant us or our shareholders the right to request reimbursement of a sum equivalent to the benefits improperly obtained by the related party as a result of the relevant transaction and claim damages for the benefit of the company. All board resolutions approving such related party transactions must be reported to our shareholders at the following shareholders’ meeting. In addition, violations of this provision may result in administrative or criminal sanctions.
The following transactions with related parties may be executed without complying with the requirements and procedures specified in article 147 of the Chilean Corporations Law, subject to the prior approval of our board of directors: (i) transactions whose amount is not material (for this purpose, the amount of an act or contract is deemed material if (1) it exceeds 1% of our paid-in capital and reserves, unless it does not exceed UF 2,000 or (2) in any event if it exceeds UF 20,000; and there is a presumption that all contracts celebrated within a period of 12 months constitute one single transaction, irrespective of whether they are executed in one or more separate transactions during such period of time); (ii) transactions that, according to the customary transactions policy, as assessed by the directors/audit committee and adopted by the board of directors of the corporation in accordance with certain minimum requirements of the Norma de Carácter General N° 501 issued by the CMF in January 2024, are considered customary in connection with the corporate purpose; however, the above mentioned policy may not authorize the execution of acts or contracts that involve more than 10% of the corporation’s assets; and (iii) transactions among corporations in which we own, directly or indirectly, at least 95% of the stake of the counterparty.
In connection with number (ii) above, on August 28, 2024, our board of directors adopted a policy which permits us to carry out certain transactions with related parties without the requirements and procedures set forth in the Chilean Corporations Law. The Customary Transactions Policy adopted by our board of directors permits to execute transactions in the ordinary course of our business with clients such as opening current accounts, making deposits, extending loans or credit lines with or without collateral, factoring transactions, the sale and transfer of commercial paper, collections, payments and funds transfers, foreign exchange transactions and issuing letters of credit, among others, and certain transactions with our banking service provider (sociedad de apoyo al giro). This policy has also been extended to our applicable subsidiaries.
We are of the opinion that we have complied with the applicable requirements of the Chilean Corporations Law in all transactions with related parties and affirm that we will continue to comply with such requirements.
On July 19, 2007, Quiñenco, Citigroup Inc. and Citibank Overseas Investment Corporation entered into a Master Joint Venture Agreement (the “Framework Agreement”) that set forth the parameters of a partnership between Quiñenco and Citigroup Inc., including the eventual merger of Citibank Chile into us. The Framework Agreement provided that Citigroup Inc. would initially acquire a 32.96% equity interest in LQIF, our controlling shareholder, and would be entitled to increase its stake in LQIF to either 41.4778% or 50% through the exercise of several options. Citigroup Inc. could also be required to increase its stake in LQIF to 50% if Quiñenco exercised a put option under the Framework Agreement. The acquisition by Citigroup Inc. of its initial interest in LQIF occurred, with effect on January 1, 2008, under the terms of the Framework Agreement and the corresponding Merger Agreement between us and Citibank Chile dated December 26, 2007. For purposes of the Merger Agreement, the operations and businesses of Citibank Chile that were effectively contributed to us were deemed to represent 10.497% of the post-merger entity and, together with other assets and businesses contributed by Citigroup Inc. to LQIF, were the basis for the issuance by LQIF of the 32.96% equity interest in LQIF transferred to Citigroup Inc. As consideration for the merger, we issued and conveyed to LQIF (and indirectly, the holders of Citibank Chile shares) 8,443,861,140 no-par value “Banco de Chile-S” series shares (which, as of the date hereof, were converted into ordinary shares, by means of the amendment of the Bank’s bylaws).
Under the Framework Agreement, Quiñenco remains as the controlling shareholder of LQIF and therefore of us, while Citigroup Inc. is granted certain governance and other shareholder rights in LQIF. With respect to our corporate governance, Citigroup Inc. has the right to name two directors to our board of directors, which had 11 members prior to the amendment to our bylaws approved on November 10, 2025 and currently has nine members, while Quiñenco maintained the right to appoint a majority of our board of directors. Citigroup Inc. also has the power to propose the appointment of certain of our executive officers (including our chief financial officer) and at least one representative on our directors/audit committees. Under this agreement, Citigroup Inc. was also granted certain veto rights over certain “fundamental strategic decisions” (as defined in the Framework Agreement), such as the delisting of our ADSs from the New York Stock Exchange or the delisting of our shares from the Santiago Stock Exchange and the Bolsa Electrónica de Chile, entry into new lines of business or large acquisitions, approval of related party transactions and certain changes to our bylaws or organizational documents. Furthermore, Citigroup Inc. agreed to purchase substantially all of the assets of our North American (i.e., Miami and New York) branches for U.S.$130 million. The Framework Agreement also sets forth a series of ancillary agreements proposed to be entered into by the parties to the Framework Agreement and some of their affiliates.
On December 27, 2007, Quiñenco, Citigroup Chile S.A. and the minority shareholders of LQIF entered into a shareholders’ agreement (the “Shareholders’ Agreement”) that formalized the rights of Quiñenco and Citigroup Inc. with respect to the governance rights in us as set forth in the Framework Agreement (and as discussed above). The Shareholders Agreement, became effective on January 1, 2008.
On December 31, 2007, we entered into an Asset Purchase Agreement with Citibank, N.A. (the “Asset Purchase Agreement”), whereby we sold substantially all of the assets and operations of our banking businesses in Miami and New York to Citibank, N.A. and Citibank, N.A. agreed to offer employment to substantially all of the employees in those branches and to assume substantially all of the liabilities related to such assets and operations. In consideration for this sale, we were paid an aggregate purchase price of U.S.$130 million, in addition to the assumption of liabilities. Following the completion of the sale, the Miami and New York branches were placed in voluntary liquidation in January 2008. In March 2008, the banking licenses for both branches were surrendered to the appropriate banking regulator.
On December 19, 2008, Quiñenco, Citigroup Inc. and Citibank Overseas Investment Corporation amended the Framework Agreement (the “2008 Amendment”), and through it the Shareholders’ Agreement. The 2008 Amendment provided that if Citigroup Inc. did not acquire 8.52% of LQIF’s shares (to hold at least a 41.4778% ownership interest in LQIF) as a consequence of the actions and decisions of any relevant authority in the United States, Quiñenco shall have the right to compensation as provided in the 2008 Amendment, and Citigroup Inc. shall have the option of acquiring either a 41.4778% or a 50% interest in LQIF. Furthermore, the 2008 Amendment provided that if for any reason Citigroup Inc. did not exercise any of the call options mentioned in the previous sentence, Quiñenco or its affiliates, as applicable, shall be entitled to require Citigroup Inc. to sell to them a number of shares of LQIF such that, after such sale, Quiñenco shall directly or through its affiliates own an 80.1% ownership interest in LQIF. If this had occurred, Citigroup Inc.’s governance and other shareholder rights mentioned in the preceding paragraph should have been those provided in Clause Six of the Shareholders’ Agreement. Notwithstanding these provisions, on January 29, 2010, Citigroup Inc. exercised a call option to acquire 8.52% of LQIF’s shares and, on March 15, 2010, Citigroup Inc. exercised another call option to acquire an additional 8.52% of LQIF’s shares. Consequently, since April 30, 2010, Citigroup Inc. and Citigroup Overseas Investment Corporation indirectly own 50% of LQIF. As a result, since April 30, 2010, Citigroup Inc. has been granted certain corporate governance rights over us, as described above.
Effective January 9, 2014, Quiñenco Citigroup Inc. and Citibank Overseas Investment Corporation entered into an amendment to the Framework Agreement, and additionally Quiñenco, Citigroup Chile S.A. and other shareholders of LQIF entered into an amendment to the Shareholders’ Agreement (collectively, the “2014 Amendments”), to, among other things, reduce LQ Inversiones Financieras S.A.’s minimum shareholding in Banco de Chile (direct and indirect) from 58.33% to 51%. Prior to the 2014 Amendments, Citigroup had the right to appoint five of the regular members of our board of directors, provided that the number of directors Citigroup had the right to appoint was reduced by the number of directors appointed by minority shareholders, subject to a minimum of one regular director appointed by Citigroup. Pursuant to the 2014 Amendments, Citigroup maintains its right to appoint five of the regular members of our board of directors, except that in the event our minority shareholders appoint five regular directors and thus no person proposed by Citigroup can be appointed as a regular director, then Citigroup shall have the right to appoint two alternate directors.
On November 5, 2025, Quiñenco, Citigroup Inc. and Citibank Overseas Investment Corporation entered into an amendment to the Framework Agreement. In addition, Quiñenco, Citigroup Chile SpA and the other shareholders of LQIF entered into an amendment to the Shareholders’ Agreement (collectively, the “2025 Amendments”). Pursuant to the 2025 Amendments, and among other things, the Board of Directors of Banco de Chile is to be composed of nine regular directors, in addition to two alternate directors. The parties further agreed that a majority of the regular directors would be appointed by Quiñenco through LQIF, and that Citigroup has the right to require LQIF to appoint two regular directors and, if Citigroup reaches a 50% ownership interest in LQIF, four regular directors, in each case excluding any directors appointed by minority shareholders. It was also agreed that, if minority shareholders appoint one or more regular directors, the number of regular directors that Citigroup is entitled to propose would be reduced accordingly; however, Citigroup will in all cases be entitled to at least one regular director, corresponding to the sixth regular director that LQIF may appoint, or, if it is not possible to appoint a sixth regular director at Citigroup’s proposal, to appoint two alternate directors. With respect to the election of alternate directors, the parties agreed that, for so long as LQIF is not able to appoint at least six regular directors of the Bank, LQIF shall submit to the Bank’s shareholders’ meeting, as candidates for alternate directors, individuals proposed by Citigroup.
On December 27, 2007, we entered into the Global Connectivity Agreement with Citigroup Inc. The Global Connectivity Agreement enables us and our clients to become part of Citigroup’s global network and provides a framework for us and Citigroup Inc. to direct new business to both companies. The agreement sets forth the terms upon which we, Citigroup Inc. and our respective affiliates will develop a relationship with respect to cross-border business and certain related services (such as corporate and investment banking services, international personal banking services and global transactions services, among others). The parties agreed on the following principles with respect to implementing the terms of the agreement: (i) the promotion of global connectivity products among Chilean customers, (ii) the setup of a technology platform, (iii) the training of employees and officers and (iv) the construction of international support networks to carry out the transactions contemplated by the agreement. This agreement was replaced by the new Global Connectivity Agreement dated October 22, 2015, which has been amended and extended as mentioned below.
On December 27, 2007, we entered into a Cooperation Agreement with Citigroup Inc. with the purpose of providing a framework for the integration of Citibank Chile with us following the merger and ensuring a successful relationship between us and Citigroup Inc. In particular, the Cooperation Agreement establishes a communication mechanism between us and Citigroup Inc. to enhance the exchange of ideas and information related to the integration of our business with that of Citibank Chile and provides for certain specific areas of collaboration going forward (such as with respect to our hedging and derivatives strategies). This agreement was replaced by the new Cooperation Agreement dated October 22, 2015, which has been amended and extended as mentioned below.
On December 27, 2007, we also entered into a Trademark License Agreement with Citigroup Inc. in which Citigroup Inc. granted us a non-exclusive paid-up and royalty-free license to use certain of Citigroup Inc.’s trademarks in Chilean territory. In addition, Citigroup Inc. granted us a license to use its domain name solely in connection with marketing and promoting authorized services in Chilean territory. This agreement was replaced by the new Trademark License Agreement dated October 22, 2015 and by the Amended and Restated Trademark License Agreement dated November 29, 2019, which was further amended on August 29, 2023 and December 11, 2024, and extended as mentioned below.
On September 25, 2009, we entered into a Master Services Agreement with Citigroup Inc. This agreement regulates and supplements certain reciprocal services that, before the merger between us and Citibank Chile, had been provided pursuant to the terms of certain service agreements then in effect between Citigroup Inc. (and certain of its affiliates) and Citibank Chile, which were assumed, after the merger, by us as legal successor to Citibank Chile. Furthermore, this agreement seeks to foster global connectivity with respect to the banking and financial services referred to in the Global Connectivity Agreement and in the other agreements executed with Citigroup Inc. mentioned above. This agreement has been restated and amended as further explained below.
On October 22, 2015, and effective January 1, 2016, we entered into a new Global Connectivity Agreement, a new Cooperation Agreement, and a new Trademark License Agreement with Citigroup Inc., replacing the original agreements mentioned above (the “2015 Global Connectivity Agreement,” “2015 Cooperation Agreement” and “2015 Trademark License Agreement,” respectively). Later, the 2015 Global Connectivity Agreement was amended on April 26, 2021, August 31, 2021, and August 29, 2023. As for the 2015 Trademark License Agreement, it was replaced by the Amended and Restated Trademark License Agreement dated November 29, 2019, for the same term as the 2015 Cooperation Agreement (the “2019 Amended and Restated Trademark License Agreement”). The 2019 Amended and Restated Trademark License Agreement was amended on August 29, 2023 regarding certain licensed logo and trademark and further amended on December 11, 2024 regarding the scope of use of certain brands in terms that the license to use them was circumscribed to certain products and services related to enterprise and corporate banking, investment banking and other businesses, as well as outside the offices of the Banco Edwards network of Banco de Chile.
On January 26, 2017 and effective as of January 1, 2017, we entered into a new Master Services Agreement with Citigroup Inc. replacing the abovementioned agreement dated September 25, 2009, which expired on January 1, 2017 (the “Amended and Restated Master Services Agreement”). This agreement had the same duration of the 2015 Cooperation Agreement as mentioned above. The Amended and Restated Master Services Agreement regulated certain reciprocal services to be provided by the parties and seeks to foster global connectivity with respect to the banking and financial services referred to in the 2015 Global Connectivity Agreement and in the other agreements executed with Citigroup Inc. The Amended and Restated Master Services Agreement has been restated and amended on November 29, 2019, August 31, 2021, August 29, 2023, and August 29, 2025 (the latter, the “2025 Amended and Restated Master Services Agreement”).
The 2015 Global Connectivity Agreement and the 2015 Cooperation Agreement each have a duration period of two years as of January 1, 2016, and have been extended several times. The last time such agreements were extended was on August 29, 2025, when the parties agreed to extend the terms from January 1, 2026, to January 1, 2028. However, the parties may convene before August 31, 2027, to agree on an extension to these agreements for a new period of two years commencing on January 1, 2028. In the event that the parties do not agree to an extension, these agreements will be automatically extended once for a period of one year starting January 1, 2028, until January 1, 2029, date on which they shall terminate without any formality. If the parties agree to the two-year extension mentioned above, the same renewal procedure may be used by the parties to extend the agreements in the future, as many times as they agree. The 2019 Amended and Restated Trademark License Agreement and the 2025 Amended and Restated Master Services Agreement have the same duration as the 2015 Cooperation Agreement.
In addition to the aforementioned regulation set forth in the Chilean Corporations Law, the CMF provides certain rules on related party transactions in Chapter 12-4 of the RAN for purpose of regulatory lending limits. To some extent, such regulation differs from the Chilean Corporations Law in the treatment and definition of related party transactions. Further, in accordance with CMF’s Compendium of Accounting Standards, a note addressing our transactions with related parties must be included in our audited consolidated financial statements. Such note has to comply with the aforementioned CMF rules on related parties and must be prepared in accordance with Chilean GAAP as issued by the CMF.
For more information on our transactions with related parties, see Note 40 to our audited consolidated financial statements as of and for the year ended December 31, 2025, included elsewhere in this annual report.
Loans to Related Parties
As disclosed in Note 40(b) to our audited consolidated financial statements as of and for the year ended December 31, 2025, included elsewhere in this annual report, we incurred an aggregate amount of Ch$174,410 million in expenses and recorded Ch$105,488 million in income from transactions with related parties in 2025, other than loans.
As authorized by the General Banking Act, and within the regulatory lending limits, we hold several outstanding loans owed to us by related parties. All such loans:
| (i) | were made in the ordinary course of business; |
| (ii) | were made on terms, including interest rates and collateral, substantially the same as those prevailing at the time for comparable transactions with other persons; and |
| (iii) | did not involve more than the normal risk of collectability or present other unfavorable features. |
We held an aggregate of Ch$290,479 million in loans (once allowances for loan losses are deducted) to related parties, as of December 31, 2025, excluding contingent loans. As of the same date we held other assets with related parties amounting to Ch$738,426 million (including contingent loans) while liabilities with related party transactions amounted to Ch$1,070,698 million. See Note 40(a) to our audited consolidated financial statements as of and for the year ended December 31, 2025, included elsewhere in this annual report for additional details concerning on these transactions.
Item 8 Financial Information
CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
Audited Consolidated Financial Statements
Please refer to “Item 18. Financial Statements.”
Legal Proceedings
We and our subsidiaries are subject to claims and are parties to legal proceedings in the normal course of business. A summary of certain current legal proceedings is below.
Charges brought under Securities Market Law
On October 30, 2014, the SVS (the former capital market regulator before its replacement by the CMF) imposed a fine of UF 50,000 (approximately U.S.$2 million as of December 31, 2014) on Banchile Corredores de Bolsa S.A. (“Banchile Corredores”), based on alleged infringement of Article 53 second paragraph of Law No. 18,045 for a specific transaction of SQM-A’s shares intermediated by Banchile in 2011. In this regard, Article 53 second paragraph of Law No. 18,045 provides that “…no person may engage in transactions or induce or attempt to induce the purchase or sale of securities, whether or not governed by this Act, by means of any misleading or deceptive act, practice, mechanism or artifice…” Banchile filed a claim against that fine with the Santiago Civil Courts requesting to void the fine.
On December 2019, the 22nd Santiago Civil Court issued its judgment on Banchile Corredores’ claim, reducing the fine to an amount of UF 7,500, approximately U.S.$275,000, as of December 2019. This ruling was confirmed in second instance by the Santiago Court of Appeals.
Both parties in these proceedings – Banchile Corredores and Consejo de Defensa del Estado (Chilean State Defense Board) filed an appeal in cassation before the Supreme Court of Chile, which are currently pending.
Banchile Corredores de Bolsa’s attorneys in charge of the claim believe that there are solid grounds to obtain a judgment in favor of Banchile Corredores.
As of the date of this annual report, there are no new developments on this case.
Consumer Protection Claim
In March 2022, we were notified of a lawsuit filed by SERNAC on the grounds that: 1) the Bank allegedly charges certain expenses and judicial collection fees that, under SERNAC’s view, should be charged within applicable limits; and 2) certain contractual clauses should be declared as abusive. In the lawsuit, SERNAC requests the court to order the Bank to reimburse the purportedly overcharged expenses and fees and to apply the maximum legal fines. The Bank has contested this lawsuit, seeking its full dismissal on the grounds that it has complied with applicable regulations in all respects. As of the date of this annual report, this procedure is currently in the stage of providing evidence and it is not possible to estimate the monetary amounts involved in this claim or to determine whether it could have a material impact on our results of operations.
Public Prosecutor Investigation Against Former Commander in Chief
In August 2021, the Chilean Public Prosecutor’s Office requested that we provide background information regarding our compliance with the crime prevention models set forth in local legislation and their implementation in relation to certain transactions carried out by the former Commander in Chief of the Chilean Army, Mr. Juan Miguel Fuente-Alba and his spouse. We also received supplementary requests after the initial request.
These requests from the Chilean Public Prosecutor’s Office are part of an investigation of the purported criminal liability of legal entities or natural persons, other than Mr. Fuente-Alba and his spouse, who are currently defendants in criminal proceedings. Further, this investigation includes banks or financial institutions, and some related parties, who may have been involved in money laundering in connection with the criminal proceedings against Mr. Fuente-Alba.
We fully cooperated with the investigation and provided the necessary documentation to the Chilean Public Prosecutor’s Office.
In July 2025, the Chilean Public Prosecutor’s Office resolved to temporarily close the investigation of the purported criminal liability of Banco de Chile. As of the date of this report, this matter has been temporarily closed for Banco de Chile.
Dividends
General
We currently have a single series of common shares and the dividends on our shares are proposed by our board of directors and are approved by our shareholders at the ordinary annual shareholders’ meeting following the year with respect to which the dividends are proposed. Our ordinary annual shareholders’ meeting is required to be held in the first three months of each year. Following shareholder approval, the dividends are declared and paid. Dividends are paid to shareholders of record on the fifth business day preceding the date set for payment of the dividend. The applicable record dates for the payment of dividends to holders of our ADSs are, to the extent practicable, the same. Under the Chilean Corporations Law and regulations issued thereunder, Chilean publicly held corporations are generally required to distribute at least 30% of their consolidated annual earnings as dividends, except to the extent they have accumulated losses. Under the General Banking Act, a Chilean bank may pay dividends upon approval of its shareholders from (i) net earnings of previous fiscal years (i.e., interim dividends are not permitted), (ii) the reserve kept for that purpose or (iii) other funds permitted under Chilean law. In addition, the amount of the dividends that may be paid by Chilean banks are limited if mandatory additional capital requirements, and/or additional countercyclical buffer capital that may be requested by the Central Bank, are not met.
Cash Dividends
In March 2023, our shareholders at the ordinary annual shareholders meeting agreed to the distribution and payment of dividend No. 211 in the amount of Ch$8.58200773490 per ordinary share, with a corresponding charge to our 2022 net distributable income.
In March 2024, our shareholders at the ordinary annual shareholders meeting agreed to the distribution and payment of dividend No. 212 in the amount of Ch$8.07716286860 per ordinary share, with a corresponding charge to our 2023 net distributable income.
In March 2025, our shareholders at the ordinary annual shareholders meeting agreed to the distribution and payment of dividend No. 213 in the amount of Ch$9.85357420889 per ordinary share, with a corresponding charge to our 2024 net distributable income.
In March 2026, our shareholders at the ordinary annual shareholders meeting agreed to the distribution and payment of dividend No. 214 in the amount of Ch$9.99757030464 per ordinary share, with a corresponding charge to our 2025 net distributable income.
The following table sets forth the cash dividends declared per common share during the years ended December 2023, 2024 and 2025:
| As of and for the Year Ended December 31, | ||||||||||||||||
| 2023 | 2024 | 2025 | ||||||||||||||
| (in Ch$, except percentages) | (in U.S.$) | |||||||||||||||
| Dividend payout ratio(1) | 69.71 | % | 67.58 | % | 83.49 | % | ||||||||||
| Dividend per Common Share(2) | Ch$ | 8.58 | Ch$ | 8.08 | Ch$ | 9.85 | U.S.$ | 0.011 | ||||||||
| (1) | Dividend payout ratio is calculated by dividing the amount of dividends paid by the earnings per share in the prior fiscal year. |
| (2) | Dividends per share are calculated by dividing the amount of the dividend paid during each year by the previous fiscal year’s number of outstanding shares. |
Whether future dividends will be paid will depend upon our earnings, financial condition, capital requirements, governmental regulations and policies and other factors. Accordingly, there can be no assurance that dividends in future years will be paid at a rate similar to dividends paid in past years.
On March 14, 2019, our board of directors resolved to establish a provision for minimum dividends equivalent to 60% of the distributable net income generated during the course of the year. For that purpose, the distributable net income was defined as the amount resulting from the net income for the relevant period minus the inflation effect (or inflation adjustment) on our paid-in capital and reserves, based on the Consumer Price Index variation between the previous month of calculation and the month of November of the previous year. Lastly, on March 12, 2020, our board of directors decided it would, for 2020 and onwards, maintain this net income calculation method to distribute as dividends for 2020, while agreeing to provision a 60% over the net income balance so calculated.
Stock Dividends
During 2023, 2024 and 2025, no stock dividends, in the form of fully paid-in shares, were distributed to our shareholders.
Capital Increases
During 2023, 2024 and 2025, no stock dividends, in the form of fully paid-in shares, were distributed to our shareholders.
ADR Holders
Dividends payable to holders of our ADSs are net of conversion expenses of the depositary and are subject to Chilean Withholding Tax, currently set at the rate of 35%, subject to certain credits. For further information on these taxes see “Item 5. Operating and Financial Review and Prospects—Operating Results—Income Tax and Item 10. Additional Information—Taxation—Chilean Tax Considerations.” Owners of our ADSs are not charged any fees by us with respect to cash or stock dividends.
Pursuant to current Chilean foreign exchange regulations, a shareholder who is not a resident of Chile does not need to be authorized as a foreign investor in order to receive dividends, sale proceeds or other amounts with respect to its shares remitted outside Chile, but the investor must inform the Central Bank about any such transactions and must remit foreign currency through the Formal Exchange Market. See “Item 10. Additional Information—Exchange Controls” for additional information on how ADS holders may remit currency outside Chile.
SIGNIFICANT CHANGES
No significant changes in our financial condition have occurred since the date of the most recent audited consolidated financial statements included in this annual report.
Item 9 The Offer and Listing
Nature of Trading Market
Shares of our common stock are traded on all Chilean stock exchanges. Our shares have been listed on the Santiago Stock Exchange since 1894 and on the Electronic Stock Exchange since 1989. The Santiago Stock Exchange is the main trading market for our shares.
The Chilean securities markets are substantially smaller, less liquid and more volatile than major securities markets in the United States. The Santiago Stock Exchange, which is Chile’s main exchange, had a market capitalization of approximately U.S.$265,216.3 million as of December 31, 2025. As of the same date, the total annual trading turnover was approximately U.S.$51,990.4 million while the average monthly trading turnover was approximately U.S.$4,332.5 million. The Santiago Stock Exchange was established in 1893 and is a private company whose equity consists of 47,999,790 shares owned by 28 shareholders as of December 31, 2025. As of the same date, 185 companies by means of 199 series of stocks were listed on the Santiago Stock Exchange.
In addition, as reported by the Santiago Stock Exchange, the ten largest companies in terms of market capitalization represented approximately 49.2% of the Santiago Stock Exchange’s aggregate market capitalization as of December 31, 2025. As of the same date, the ten most traded companies accounted for approximately 62.6% of the Santiago Stock Exchange’s equity trading. During 2025, approximately 42% of the companies listed on the Santiago Stock Exchange had their shares traded on an average of 70% or more of the exchange’s trading days.
Our ADSs, each representing 200 shares of common stock, without nominal (par) value, have been listed on the NYSE since January 2, 2002, under the symbol “BCH.” JPMorgan Chase Bank is our depositary for purposes of the ADSs. As of December 31, 2025, a maximum of 13,595,495 ADSs were outstanding (equivalent to 2,719,097,000 shares of common stock or 2.69% of the total number of issued shares of common stock as of the same date). Since certain of our ADSs are held by brokers or other nominees, the number of record holders in the United States may not be fully indicative of the number of direct beneficial owners in the United States or of where the beneficial owners of such shares are resident.
On October 23, 2018, we announced a ratio change to our ADR program from one ADS per 600 of our common shares into one ADS per 200 of our common shares. This modification became effective on November 23, 2018, upon which ADR holders received two additional ADSs for each ADS held as of the record date of November 15, 2018. Additionally, the existing ADRs, continued to be valid as of the effective date and were not exchanged for new ones.
Item 10 Additional Information
MEMORANDUM AND ARTICLES OF ASSOCIATION
Set forth below is a brief summary of the significant provisions of our estatutos (bylaws) and Chilean law. This description contains all material information concerning our shares, but does not purport to be complete and is qualified in its entirety by reference to our estatutos (a copy of which is filed as Exhibit 1.1 to this annual report), the General Banking Act, the Chilean Corporations Law and the Securities Market Law.
We are an open stock corporation and are registered with the Chilean Public Registry of Commerce of Santiago under Page 23,859 Number 18,638 of the year 1996, and authorized to operate as a bank by the CMF. The Chilean Corporations Law, the Securities Market Law and the General Banking Act set forth the rules and requirements for establishing, and operating banks in Chile, as well as shareholder rights in a Chilean bank. Additionally, the operation and the shareholder’s rights are also governed by the bank’s estatutos, which effectively serve as both the articles of incorporation and the bylaws of a company incorporated in the United States. Legal provisions in Chile take precedence over any contrary provision set forth in a corporation’s estatutos. Both the Chilean Corporations Law and our estatutos provide that legal actions by shareholders against us (or our officers or directors) to enforce their rights as shareholders or by one shareholder against another in their capacity as such are to be brought in Chile in arbitration proceedings.
The Chilean securities markets are principally regulated by the CMF under the Securities Market Law and the Chilean Corporations Law. In the case of banks, compliance with these laws is also supervised by the CMF.
Purpose
Our corporate purpose is to undertake all acts, contracts, business and transactions as the General Banking Act allows banking institutions to undertake, without prejudice to expanding or restricting our scope of action consistent with current legal precepts or such as may be established in the future.
Capitalization
As of April 24, 2026, there are 101,017,081,114 Banco de Chile shares outstanding of our capital stock. All of such shares are fully paid.
Our shares are no par value and full voting rights. There are no legal restrictions on the payment of dividends from our net income, except that we may only pay a single dividend per year (i.e., interim dividends are not permitted). Under the Chilean Corporations Law and regulations issued thereunder, Chilean public corporations are generally required to distribute at least 30% of their consolidated annual earnings as dividends, except to the extent they have accumulated losses. Under the General Banking Act, a Chilean bank may pay dividends upon approval of its shareholders from (i) net earnings of previous fiscal years (i.e., interim dividends are not permitted), (ii) the reserve kept for that purpose or (iii) other funds permitted under Chilean law. In addition, according to the General Banking Act the amount of dividends that may be paid by Chilean banks is limited if mandatory additional capital requirements, and/or additional counter-cyclical buffer capital requirements that may be requested by the Central Bank, are not met. For more information on the Chilean banking legislation, see “Item 4. Information on the Company—Regulation and Supervision—Modifications to the General Banking Act.”
Under Chilean law, the shareholders of a company, acting at an extraordinary shareholders’ meeting, have the power to authorize an increase in the company’s capital. When an investor subscribes for issued shares, the shares are registered in such investor’s name, even if not paid for, and the investor is treated as a shareholder for all purposes, except with regard to receipt of dividends and the return of capital. The investor becomes eligible to receive dividends or the return of capital once it has paid for the shares; if it has paid for only a portion of such shares, it is entitled to reserve a corresponding pro rata portion of the dividends declared with respect to such shares unless the company’s bylaws provide otherwise. If an investor does not pay for shares for which it has subscribed on or prior to the date agreed upon for payment, the company is entitled under Chilean law to auction the shares on a stock exchange and collect the difference, if any, between the subscription price and the auction proceeds. However, until such shares are sold, the subscriber continues to exercise all the rights of a shareholder (except the right to receive dividends or the return of capital). In the case of banks, authorized shares and issued shares that have not been paid for within the period fixed for their payment by the CMF are cancelled and are no longer available for issuance by the company.
The Chilean Corporations Law provides that the purchaser of shares of a company implicitly accepts its bylaws and any agreements adopted at shareholders’ meetings.
Directors
For a description of the provisions of our estatutos relating to our board of directors and our directors/audit committee, see “Item 6. Directors, Senior Management and Employees—Board Practices.”
Ownership Restrictions
Under the Securities Market Law and the regulations of the CMF, shareholders of open stock corporations are required to report the following to the CMF and the Chilean stock exchanges:
| ● | any direct or indirect acquisition or sale of shares that results in the holder’s acquiring or disposing of, directly or indirectly, 10% or more of an open stock corporation’s share capital; and |
| ● | any direct or indirect acquisition or sale of shares or options to buy or sell shares, in any amount, if made by a holder of 10% or more of an open stock corporation’s capital or if made by a director, liquidator, main officer, general manager or manager of such corporation. |
The foregoing requirements also apply to the acquisition or sale of securities or agreements which price or return depends or is conditioned (all or in a significant part) upon changes or movements in the price of such shares. The report shall be made the day following the execution of the transaction.
In addition, any person who acquires 10% or more of our shares must include in the report whether the purpose of the acquisition is to acquire control of the company or if the acquisition is just a financial investment. A beneficial owner of ADSs representing 10% or more of our share capital will be subject to these reporting requirements under Chilean law.
According to the regulations of the CMF, Chilean banks that issue ADSs are required to inform the CMF if any person, directly or beneficially, acquires ADSs representing 5% or more of the total amount of shares of capital stock issued by such bank.
Under the Securities Market Law and the regulations of the CMF, persons or entities intending to acquire control, directly or indirectly, of an open stock corporation, regardless of the acquisition vehicle or procedure, and including acquisitions made through direct subscriptions or private transactions, are also required to inform the public of such intention at least 10 business days before the date on which the transaction is to be completed, but, in any case, as soon as negotiations regarding the change of control begin or as soon as confidential information and documents concerning the target are delivered to the potential acquirer such delivery can occur through a filing with the CMF, the stock exchanges where its securities are traded, companies controlled by and that control the target and through a notice published in two Chilean newspapers, which notice must disclose, among other information, the person or entity purchasing or selling, the price and the material conditions of any negotiations.
Prior to such publication, a written communication to such effect must be sent to the target corporation, to the controlling corporation, to the corporations controlled by the target corporation, to the CMF and to the Chilean stock exchanges. Title XV of the Securities Market Law provides the definition of a controlling power, direct holding and related party.
In addition to the foregoing, Article 54A of the Chilean Securities Market Law requires that within two business days of the completion of the transactions pursuant to which a person has acquired control of a publicly traded company, a notice shall be published in the same newspapers in which the notice referred to above was published and notices shall be sent to the same persons mentioned in the preceding paragraphs, as well as posted on their websites, if any.
The provisions of the aforementioned articles do not apply when the acquisition is being made through a tender or exchange offer.
Title XXV of the Chilean Securities Market Law on tender offers and the regulations of the CMF provide that the following transactions must be carried out through a tender offer:
| ● | an offer which allows a person to take control of a publicly traded company, unless (i) the shares are being sold by a controlling shareholder of such company at a price in cash which is not substantially higher than the market price and the shares of such company are actively traded on a stock exchange and (ii) those shares are acquired (a) through a capital increase, (b) as a consequence of a merger, (c) by inheritance or (d) through a forced sale; |
| ● | an offer for a controlling percentage of the shares of a listed company if such person intends to take control of the parent company (whether listed or not) of such listed company, to the extent that the listed company represents 75% or more of the consolidated net worth of the parent company; and |
| ● | whenever a controlling shareholder acquires two-thirds of the voting shares of a listed company, such controlling shareholder must offer to purchase the remaining shares from the minority shareholders in a tender offer, unless (i) the controlling shareholder has reached two thirds of the voting shares through a tender offer for all of the shares of the company, or (ii) it reaches such percentage as a result of a reduction of the capital of the company by operation of law. |
Article 200 of the Chilean Securities Market Law prohibits any shareholder that has taken control of a publicly traded company from acquiring, for a period of 12 months from the date of the transaction in which it gained control of the publicly traded company, a number of shares equal to or greater than 3% of the outstanding issued shares of the target without making a tender offer at a price per share not lower than the price paid at the time of taking control. Should the acquisition from the other shareholders of the company be made on a stock exchange and on a pro rata basis, the controlling shareholder may purchase a higher percentage of shares, if so permitted by the regulations of the stock exchange.
Title XV of the Chilean Securities Market Law sets forth the basis to determine what constitutes a controlling power, a direct holding and a related party. The Chilean Securities Market Law defines control as the power of a person or group of persons acting (either directly or through other entities or persons) pursuant to a joint action agreement to direct the majority of the votes at the shareholders’ meetings of the corporation and to elect the majority of members of its board of directors, or to influence the management of the corporation significantly. Significant influence is deemed to exist in respect of the person or group of persons with an agreement to act jointly that holds, directly or indirectly, at least 25% of the voting share capital, unless:
| ● | another person or group of persons acting pursuant to joint action agreement, directly or indirectly, controls a stake equal to or greater than the percentage controlled by such person; |
| ● | the person or group does not control, directly or indirectly, more than 40.0% of the voting share capital and the percentage controlled is lower than the sum of the shares held by other shareholders holding more than 5% of the share capital (either directly or pursuant to a joint action agreement); or |
| ● | in cases where the CMF has ruled otherwise, based on the distribution or atomization of the overall shareholding. |
According to the Chilean Securities Market Law, a joint action agreement is an agreement among two or more parties which, directly or indirectly, own shares in a corporation at the same time and whereby they agree to participate with the same interest in the management of the corporation or in taking control of the same. The law presumes that such an agreement exists between:
| ● | a principal and its agents; |
| ● | spouses and relatives within certain degrees of kinship; |
| ● | entities within the same business group; and |
| ● | an entity and its controller or any of the members of the controller. |
Likewise, the CMF may determine that a joint action agreement exists between two or more entities considering, among other things, the number of companies in which they participate and the frequency with which they vote identically in the election of directors, appointment of managers and other resolutions passed at extraordinary shareholders’ meetings.
According to Article 96 of the Chilean Securities Market Law, a business group is a group of entities with such ties in their ownership, management or credit liabilities that it may be assumed that the economic and financial action of such members is directed by, or subordinated to, the joint interests of the group, or that there are common credit risks in the credits granted to, or in the acquisition of securities issued by, them. According to the Chilean Securities Market Law, the following entities are part of the same business group:
| ● | a company and its controller; |
| ● | all the companies with a common controller together with that controller; and |
| ● | all the entities that the CMF declares to be part of the business group due to one or more of the following reasons: |
| ● | a substantial part of the assets of the company is involved in the business group, whether as investments in securities, equity rights, loans or guaranties; |
| ● | the company has a significant level of indebtedness and the business group has a material participation as a lender or guarantor of such indebtedness; |
| ● | the company is a member of a controlling group of any company of those mentioned in the first two bullets above and there are reasons grounded in ties in the ownership, management or credit liabilities to include it in the business group; or |
| ● | the company is controlled by a member of the controller of any of the entities of the business group if the latter is formed by more than one entity and if there is more than one group of controlling entities and there are reasons grounded in ties in the ownership, management or credit liabilities to include it in the business group. |
The General Banking Act provides that, as a matter of public policy, no person or company may acquire, directly or indirectly, more than 10% of the shares of a bank without the prior authorization of the CMF, which may not be unreasonably withheld. The prohibition also applies to beneficial owners of ADSs. In the absence of such authorization, any person or group of persons acting in concert would not be permitted to exercise voting rights with respect to the shares or ADSs acquired. In determining whether or not to issue such an authorization, the CMF considers factors given by the General Banking Act.
The General Banking Act also requires the prior authorization of the CMF for the following transactions:
| ● | the merger of two or more banks; |
| ● | the acquisition of all or a substantial portion of a bank’s assets and liabilities by another bank; |
| ● | the control by the same person or controlling group of two or more banks; or |
| ● | a substantial increase in the share ownership by a controlling shareholder of a bank. |
Such prior authorization may be granted or rejected by the CMF, which is further authorized to set rules or specific requirements in that regard. For further information, see “Item 4. Information on the Company—Regulation and Supervision—Financial Market Commission.”
According to the General Banking Act, a bank may not grant loans to related parties on terms more favorable than those generally offered to non-related parties. Article 84 No. 2 of the General Banking Act and the regulations issued by the CMF provides that a natural person will not be considered related to the bank by the mere fact of owning up to 1% of the shares of such bank. Likewise, a legal person will not be considered to be related to the bank by the mere fact of owning directly, indirectly or jointly with other companies with which it forms a unit of economic interest, up to a 1% of the bank’s shares. The foregoing percentages shall be 5% in the case of shareholders, whether people or entities, of a bank whose shares are traded on a stock exchange. Additionally, the General Banking Act imposes certain restrictions on the amounts and terms of loans made by banks to related parties. These provisions would also apply to beneficial owners of ADSs representing more than 1% or 5%, as applicable, of the shares. For further information, see “Item 4. Information on the Company—Regulation and Supervision—Lending Limits.”
Article 16 bis of the General Banking Act provides that the individuals or legal entities that, individually or with other people, directly control a bank and who individually own more than 10% of its shares must send to the CMF reliable information on their financial situation in the form and in the opportunity set forth in Resolution No. 3,156 of the CMF.
There are no limitations for non-resident or foreign shareholders to hold or exercise voting rights on the securities of a bank.
Preemptive Rights and Increases of Share Capital
The Chilean Corporations Law provides that whenever a Chilean company issues new shares for cash, it must offer its existing shareholders the right to purchase a number of shares sufficient to maintain their existing ownership percentages in the company. Pursuant to this requirement, preemptive rights in connection with any future issue of shares will be offered by us to the depositary as the registered owner of the shares underlying the ADSs. However, the depositary will not be able to make such preemptive rights available to holders of ADSs unless a registration statement under the Securities Act is effective with respect to the underlying shares or an exemption from the registration requirements thereunder is available.
We intend to evaluate, at the time of any preemptive rights offering, the practicality under Chilean law and Central Bank regulations in effect at the time of making such rights available to our ADS holders, as well as the costs and potential liabilities associated with registration of such rights and the related shares of common stock under the Securities Act, and the indirect benefits to us of thereby enabling the exercise by all or certain holders of ADSs of their preemptive rights and any other factors we consider appropriate at the time, and then to make a decision as to whether to file such registration statement. There can be no assurance that any registration statement would be filed. If we do not file a registration statement and no exemption from the registration requirements under the Securities Act is available, the depositary will sell such holders’ preemptive rights and distribute the proceeds thereof if a premium can be recognized over the cost of such sale. In the event that the depositary is not able, or determines that it is not feasible, to sell such rights at a premium over the cost of any such sale, all or certain holders of ADSs may receive no value for such rights. Non-U.S. holders of ADSs may be able to exercise their preemptive rights regardless of whether a registration statement is filed. The inability of all or certain holders of ADSs to exercise preemptive rights in respect of shares of common stock underlying such ADSs could result in such holders not maintaining their percentage ownership of the common stock following such preemptive rights offering unless such holder made additional market purchases of ADSs or shares of common stock.
Under Chilean law, preemptive rights are exercisable or freely transferable by shareholders during a period that cannot be less than 30 days following the grant of such rights. During such period, and for an additional 30-day period thereafter, a Chilean corporation is not permitted to offer any unsubscribed shares for sale to third parties on terms which are more favorable than those offered to its shareholders. At the end of such additional 30-day period, a Chilean open stock corporation is authorized to sell unsubscribed shares to third parties on any terms, provided they are sold on a Chilean stock exchange. Unsubscribed shares that are not sold on a Chilean stock exchange can be sold to third parties only on terms no more favorable for the purchaser than those offered to shareholders.
Shareholders’ Meetings and Voting Rights
An ordinary annual shareholders’ meeting is held within the first four months of each year. The ordinary annual shareholders’ meeting is the corporate body that approves the annual financial statements, approves all dividends in accordance with the dividend policy determined by our board of directors, elects the members of our board of directors and approves any other matter that does not require an extraordinary shareholders’ meeting. Extraordinary meetings may be called by our board of directors when deemed appropriate, and ordinary or extraordinary meetings must be called by our board of directors when requested by shareholders representing at least 10% of the issued voting shares or by the CMF.
Notice to convene the ordinary annual meeting or an extraordinary meeting is given by means of three notices which must be published in a newspaper of our corporate domicile (currently the city of Santiago, Chile) previously determined by our shareholders at the ordinary annual meeting or, in the event an agreement is not reached in the previous ordinary annual meeting or the newspaper ceases to exist or has its distribution suspended for whatever reason, in the Official Gazette in a prescribed manner, and the first notice must be published not less than 15 calendar days nor more than 20 calendar days in advance of the scheduled meeting. Notice must also be given to the CMF, the Santiago Stock Exchange and the Chilean Electronic Stock Exchange. Currently, we publish our official notices in the El Mercurio newspaper of Santiago.
The Annual Report shall be made available to the shareholders at the Bank’s Head Office and on our website no later than the date of publication of the first notice convening the relevant ordinary shareholders’ meeting. Likewise, the Annual Report shall be made available to the general public on the aforementioned website or through such other means as may be established under the applicable regulations.The quorum for a shareholders’ meeting is established by shareholders representing, personally or by proxy, at least an absolute majority of the issued shares. If a quorum is not present at the first meeting on first call, the meeting can be reconvened (in accordance with the procedures described in the previous paragraphs) and, upon the meeting being reconvened, shareholders present at the reconvened meeting are deemed to constitute a quorum regardless of the percentage of the shares represented.
The shareholders’ meetings pass resolutions by the affirmative vote of an absolute majority of those voting shares present or represented at the meeting. Approval by a two-thirds majority of the issued shares, however, is required at any shareholders’ meeting to approve any of the following actions:
| ● | a change in corporate form, merger or spin-off; |
| ● | an amendment to our term of existence, if any, or our early dissolution; |
| ● | a change in corporate domicile; |
| ● | a decrease of corporate capital previously approved by the CMF, provided it is not reduced below the minimum legal capital; |
| ● | the approval of capital contributions and appraisal of properties other than cash, in those cases where it is permitted by the General Banking Act; |
| ● | a modification of the powers of shareholders or limitations on the powers of our board of directors; |
| ● | a reduction in the number of members of our board of directors; |
| ● | the transfer of 50% or more of the corporate assets or the implementation or amendment of any business plan that contemplates the transfer of more than 50% of our corporate assets or the transfer of 50% or more of the assets of a subsidiary if such subsidiary represents at least 20% of our total corporate assets, as well as transfer of shares of such subsidiary which would make it lose such status; |
| ● | any non-cash distribution in respect of the shares; |
| ● | a change in the manner of distribution of profits established in our bylaws; |
| ● | the granting of guarantees to secure third-party obligations in excess of 50% of our corporate assets, unless granted to a subsidiary; |
| ● | the repurchase of our shares under the conditions set forth in Articles 27A and 27B of the Chilean Corporations Law; |
| ● | the correction of nullity caused by formal defects of any amendments to our bylaws; |
| ● | approval or confirmation of transactions with related parties, as set forth in Articles 44 and 147 of the Chilean Corporations Law; or |
| ● | certain other matters set forth in our bylaws. |
Shareholders may accumulate their votes for the election of directors and cast all of their votes in favor of one person.
In general, Chilean law does not require a Chilean open stock corporation to provide the level and type of information that U.S. securities laws require a reporting company to provide to its shareholders in connection with a solicitation of proxies. However, shareholders are entitled to examine the books of a company and its subsidiaries within the 15-day period before any ordinary annual shareholders’ meeting.
The Chilean Corporations Law provides that a Chilean company’s annual report must include, in addition to the materials provided by the board of directors to shareholders, the comments and proposals made by the directors’ committee, and, whenever shareholders representing 10% or more of the issued voting shares so request, such shareholders’ comments and proposals in relation to the company’s affairs. Similarly, the Chilean Corporations Law provides that whenever the board of directors of a publicly-traded corporation convenes an ordinary annual shareholders’ meeting and solicits proxies for that meeting, or distributes information supporting its decisions or other similar material, it is obligated to include as an annex to its annual report any pertinent comments and proposals that may have been made by the directors’ committee and shareholders owning 10% or more of the company’s voting shares who have requested that such comments and proposals be so included.
Only shareholders registered as such with us on the fifth business day prior to the date of a meeting are entitled to attend and vote their shares. A shareholder may appoint another individual (who need not be a shareholder) as his proxy to attend and vote on his behalf. Every shareholder entitled to attend and vote at a shareholders’ meeting has one vote for every share subscribed, as we do not have special classes of shares with different voting rights.
Our shareholders’ meetings held in 2023 were:
| ● | The ordinary annual shareholders’ meeting held on March 23, 2023, where our shareholders agreed to the distribution and payment of dividend No. 211, in the amount of Ch$ 8.58200773490 per Banco de Chile common share, with a charge to 2022 net distributable income of Banco de Chile. |
Our shareholders’ meetings held in 2024 were:
| ● | The ordinary annual shareholders’ meeting held on March 28, 2024, where our shareholders agreed to the distribution and payment of dividend No. 212, in the amount of Ch$ 8.07716286860 per Banco de Chile common share, with a charge to 2023 net distributable income of Banco de Chile. |
Our shareholders’ meetings held in 2025 were:
| ● | The ordinary annual shareholders’ meeting held on March 27, 2025, where our shareholders agreed to the distribution and payment of dividend No. 213, in the amount of Ch$9.85357420889 per Banco de Chile common share, with a charge to 2024 net distributable income of Banco de Chile. |
| ● | The extraordinary shareholders’ meeting held on November 10, 2025, where our shareholders approved certain amendments to Banco de Chile’s bylaws, including (i) a reduction in the number of regular directors from eleven to nine, (ii) a corresponding adjustment to the minimum quorum for board meetings from six to five regular or alternate members, (iii) modifications to the procedures for convening and holding extraordinary board meetings, and (iv) the incorporation of provisions permitting shareholder participation and/or voting at shareholders’ meetings through technological means. Banco de Chile’s bylaws (including its latest amendment) have been filed as Exhibit 1.1 hereto. |
As of April 24, 2026, the following shareholders’ meeting had been held:
| ● | The ordinary annual shareholders’ meeting held on March 26, 2026, where our shareholders agreed to the distribution and payment of dividend No. 214, in the amount of Ch$9.99757030464 per Banco de Chile common share, with a charge to 2025 net distributable income of Banco de Chile. |
Dividend, Liquidation and Appraisal Rights
For a description of the provisions of our estatutos related to our dividends, see “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Dividends.”
Dividends that are declared but not paid by the date set for payment at the time of declaration are adjusted from the date set for payment to the date such dividends are actually paid, and interest is accrued thereon. The right to receive a dividend expires if it is not claimed within five years from the date the dividend is payable, and the funds may be claimed by the Chilean treasury.
We may declare a dividend in cash or in shares. When a share dividend is declared above the legal minimum (which minimum must be paid in cash), our shareholders must be given the option to elect to receive cash. A holder of our ADSs may, in the absence of an effective registration statement under the Securities Act or an available exemption from the registration requirement thereunder, effectively be required to receive a dividend in cash. See “Item 10. Additional Information—Memorandum and Articles of Association—Preemptive Rights and Increases of Share Capital.”
In the event of our liquidation, the holders of our fully paid shares would participate equally and ratably, in proportion to the number of paid-in shares held by them, in our assets available after payment of all our creditors. The holders of fully paid shares would not be required to contribute additional capital to us in the event of our liquidation.
In accordance with the General Banking Act, our shareholders do not have appraisal rights in the event of a business combination or otherwise.
Approval of Financial Statements
Our board of directors is required to submit our audited consolidated financial statements to the shareholders annually for their approval. The approval or rejection of the audited consolidated financial statements is entirely within our shareholders’ discretion. If our shareholders reject our audited consolidated financial statements, our board of directors must submit new audited consolidated financial statements no later than 60 calendar days from the date of rejection. If our shareholders reject our new audited consolidated financial statements, our entire board of directors is deemed removed from office and a new board of directors shall be elected at the same meeting. Directors who individually approved our audited consolidated financial statements are disqualified from running for re-election for the ensuing period.
Registrations and Transfers
We act as our own registrar and transfer agent,
as is customary among Chilean companies. In the case of jointly owned shares, an attorney-in-fact must be appointed to represent
the joint owners in dealings with us.
MATERIAL CONTRACTS
See “Item 7. Major Shareholders and Related Party Transactions—Related Party Transactions.”
EXCHANGE CONTROLS
The Central Bank is responsible for maintaining the stability of the Chilean peso and the normal functioning of internal and external payments. The authority of the Central Bank for these purposes includes regulation of the amount of currency and credit in circulation, the performance of credit transactions and foreign exchange transactions and the issuance of regulatory provisions regarding monetary, credit, financing and foreign exchange matters.
Under the Basic Constitutional Act of the Central Bank, Law No. 18,840, foreign exchange transactions can be carried out in Chile by any person, subject to the limitations and restrictions established by the Central Bank. Foreign exchange transactions include buying and selling foreign currency and, in general, any act or agreement that may have the effect of creating, amending, or extinguishing an obligation payable in foreign currency, even if no transfer of funds or drafts to or from Chile is actually involved. Foreign exchange transactions also include transfers of or transactions with respect to gold or instruments representing gold.
The Central Bank can impose the following limitations on foreign exchange transactions:
| ● | The Central Bank can require that the transaction of specified foreign exchange operations, such as foreign investments and foreign credits, be reported to it; and |
| ● | The Central Bank can require that the execution of certain foreign exchange operations, such as money transfers to and from Chile, be made only in the Formal Exchange Market. The Formal Exchange Market consists of banks and other entities authorized by the Central Bank. |
Also, the Central Bank has the authority to establish certain restrictions on foreign exchange transactions with respect to the Formal Exchange Market. These restrictions may include the following: the obligation to return to Chile in Chilean pesos the value obtained in the export of goods, services, and other payments to foreign persons or entities that have a right of residency in Chile; that a reserve be maintained for credits, deposits and investments in foreign currency from or to a foreign country; and the obligation to obtain approval for payment or remittance of foreign exchange transactions, among others.
These restrictions may only be imposed by resolution adopted by the majority of board members of the Central Bank if required for the stability of the currency or the financing of the balance of payments of the country. Additionally, these restrictions may only be imposed for a predetermined period, which, at the most, may extend to a year. The resolution may be subject to veto by the Minister of Finance, in which case the restriction may only be adopted pursuant to a favorable vote of all the board members. The restriction, once the predetermined period has expired, may be renewed subject to the preceding rules.
The Deposit Agreement between Banco de Chile and JP Morgan Chase Bank, N.A., as amended from time to time, which set forth the terms and conditions of Banco de Chile’s ADS program are subject to the exchange regulations of general applicability of the Compendium of Foreign Exchange Regulations (“Compendium”), as may be amended from time to time, or such new regulations that may be issued in the future. The Deposit Agreement, as amended, can be found as Exhibits to former annual report and is also available at SEC´s website.
Banco de Chile’s ADS facility is governed by the Compendium. According to the Compendium, the establishment of an ADS facility is regarded as an ordinary foreign investment, subject to the above-mentioned limitations, and it is not necessary to seek the Central Bank’s prior approval in order to establish an ADS facility. The establishment of an ADS facility only requires that the Central Bank be informed of the transaction, and that the transaction be conducted through the Formal Exchange Market.
Investment in Our Shares and ADSs
With regard to exchange controls, investments made in shares of our common stock are subject to the following requirements:
| ● | any foreign investor acquiring shares of our common stock who brought funds into Chile for that purpose must bring those funds through an entity participating in the Formal Exchange Market; |
| ● | any foreign investor acquiring shares of our common stock to be converted into ADSs or deposited into an ADR facility who brought funds into Chile for that purpose must bring those funds through an entity participating in the Formal Exchange Market; |
| ● | in both cases, the entity of the Formal Exchange Market through which the funds are brought into Chile must report such investment to the Central Bank; |
| ● | all remittances of funds from Chile to the foreign investor upon the sale of the acquired shares of our common stock or from dividends or other distributions made in connection therewith must be made through the Formal Exchange Market; |
| ● | all remittances of funds from Chile to the foreign investor upon the sale of shares underlying ADSs or from dividends or other distributions made in connection therewith must be made through the Formal Exchange Market; and |
| ● | all remittances of funds made to the foreign investor must be reported to the Central Bank by the intervening entity of the Formal Exchange Market. |
When funds are brought into Chile for a purpose other than to acquire shares to convert them into ADSs or deposit them into an ADR facility and subsequently such funds are used to acquire shares to be converted into ADSs or deposited into an ADR facility, such investment must be reported to the Central Bank by the custodian within 10 days following the end of each month within which the custodian is obligated to deliver periodic reports to the Central Bank.
When funds to acquire shares of our common stock or to acquire shares to convert them into ADSs or deposit them into an ADR facility are received by us abroad (i.e., outside of Chile), such investment must be reported to the Central Bank directly by the foreign investor or by an entity participating in the Formal Exchange Market within 10 days following the end of the month in which the investment was made.
All payments in foreign currency in connection with our shares of common stock or ADSs made from Chile through the Formal Exchange Market must be reported to the Central Bank by the entity participating in the transaction. In the event there are payments made outside of Chile, the foreign investor must provide the relevant information to the Central Bank directly or through an entity of the Formal Exchange Market within the first 10 calendar days of the month following the date on which the payment was made.
There can be no assurance that additional Chilean restrictions applicable to the holders of ADSs, the disposition of shares of our common shares underlying ADSs or the conversion or repatriation of the proceeds from such disposition will not be imposed in the future, nor can we assess the duration or impact of such restrictions if imposed.
This summary does not purport to be complete and is qualified by reference to the Compendium, a copy of which is available in Spanish at the Central Bank’s website at www.bcentral.cl.
New Compendium of Foreign Exchange Regulations
In January 2026, the new Compendium of Foreign Exchange Regulations published by the Central Bank entered into force. In general terms, this new compendium systematizes and updates the information requirements applicable to international foreign-exchange transactions. Regarding the information required for non-resident investments, the new compendium maintains such reporting responsibility with the custodian bank of the ADR program.
TAXATION
Chilean Tax Considerations
The following discussion is based on income tax laws and other applicable regulations and rulings issued by the Chilean Internal Revenue Service (Servicio de Impuestos Internos) that have been enacted in Chile. The discussion summarizes the main Chilean income tax consequences for investments in ADSs or shares of common stock held by individuals without domicile or residence in Chile or legal entities that are neither incorporated under the laws of Chile nor permanently located in Chile. We refer to these investors as “foreign holders” hereafter.
For Chilean tax law purposes, under Law No. 21,210 published in February 2020, an individual holder resides in Chile if the individual has resided in Chile for more than 183 continuous or discontinuous days within the last 12 months. On its turn, for Chilean tax law purposes an individual holder is domiciled in Chile if he or she resides in Chile with the real or supposed purpose of staying in the country. Domicile is defined as residence in a place with the intention of staying there. The intention is proved through facts and circumstances. Accordingly, the Chilean Internal Revenue Service has interpreted that an individual without residence in Chile may, nonetheless, be considered as domiciled in Chile since the day of entry into the country if he or she intends to stay in Chile and such intention is evidenced, for example, by circumstances such as the acceptance of a job position in Chile or the relocation of his or her family to the country, among other considerations., The Chilean Internal Revenue Service has also interpreted that an individual may lose residence when he or she is absent from Chile for more than 184 days in 12 consecutive months and that he or she may lose his or her domicile when he or she no longer has the main seat of his business in Chile. The Chilean Internal Revenue Service established affidavits under article 103 of the Income Tax Law for those who express their intention to acquire or lose domicile in Chile which will be considered together with other circumstances to define the quality of domiciled in the country. Taxpayers must pay personal income tax accrued through the year in which said affidavit is submitted.
Taxes in Chile are governed by the principle of legality, which precludes the creation, suppression, modification, reduction or waiving of taxes, its essential elements, their form of computation, their collection or their form, proportionality or progression by any means other than a law. Chilean tax authorities, however, have the power to interpret tax laws by issuing rulings and regulations of either general or specific application.
Chile and the United States have subscribed an income and capital tax treaty for the avoidance of double taxation and the prevention of fiscal evasion, which entered into force on December 19, 2023.
In 2014, the Chilean Government enacted a tax reform (Law No. 20,780) that gradually increased the first category tax or corporate tax rate between 2014 and 2018 while establishing two alternative tax regimes from 2017 onwards: (i) the Semi-Integrated Regime and (ii) the Attribution Regime. Nevertheless, following this reform in the Chilean taxation system, in February 2016, another tax law was enacted (Law No. 20,899), which simplified the previously mentioned reform (Law No. 20,780) by limiting the possibility of choosing between the two alternative tax regimes. According to Law No. 20,899, publicly-traded companies, like Banco de Chile, are only subject to a Semi-Integrated Regime. The Chilean IRS has provided instructions regarding these regulations by means of Circular Letter No 49/2016.
Law No. 21,210, which modernizes the local tax system, was passed by the Chilean Congress and enacted by the Chilean Government on February 24, 2020. This law entered into force retroactively on January 1, 2020. The Chilean IRS has provided instructions regarding these regulations by means of Circular Letter No 73/2020. The law mainly focuses on: (i) entrepreneurship promotion measures by providing SMEs with a special tax regime based on total integration and a statutory tax rate of 25%, as opposed to large companies and corporations whom will continue to be subject to a semi-integrated system while bearing a statutory corporate tax rate of 27%, (ii) initiatives to promote private investment by introducing instantaneous or accelerated depreciation for fixed-assets, reducing the time frame to receive reimbursements of VAT paid on fixed-assets while reducing or eliminating property taxes paid by elderly people, (iii) increasing taxes paid by high-income individuals by means of adding a new tax bracket of 40%, raising taxes on properties that exceed U.S.$500,000 in assessed value, incorporating a regional green tax of 1% levied on investment projects exceeding U.S.$10 million in capital expenditures that were subject to environmental approval, and lowering tax benefits on capital gains obtained in stock markets, (iv) the creation of a Taxpayer Protection & Advisory Agency, which aims to be a counterpoint to the Chilean Internal Revenue Service on taxation matters, and (v) the introduction of a digital approach, which considers both the compulsory use of electronic bill and invoices, aimed at reducing tax evasion, and the imposition of VAT on digital services rendered from foreign countries.
In September 2020, Law No 21,256 was enacted establishing additional tax measures as part of the emergency plan for economic reactivation following the COVID-19 pandemic. Among others, the main measures included in this law were: (i) a temporary reduction of the statutory corporate tax rate to 10% for SMEs for the fiscal years 2020, 2021 and 2022, (ii) a refund of accumulated VAT for purchases and/or services acquired between January and May 2020 by SMEs, and (iii) a temporary additional accelerated depreciation for fixed assets newly and imported acquired between June 1, 2020, and December 31, 2022, for all types of companies.
In February 2022, Law No. 21,420 was published, reducing or eliminating a series of tax exemptions. As a result: (i) the taxation of services with VAT was extended to any type of service that is not exempt provided that it is a service performed after January 1, 2023; (ii) financial leasing agreements entered into on or after January 1, 2023 have the same treatment for tax and financial purposes, which was recently reversed by Law No 21.540 on February 2023 (so never went into effect in practice); (iii) a single tax of 10% is applied to the capital gains produced by the sale of actively traded stocks provided that the requirements established by Article N° 107 of the Chilean Income Tax Law apply to sales on or after September 1, 2022, which will not apply to local or foreign institutional investors; (iv) profits from life insurance contracts entered into on or after February 4, 2022 pay inheritance tax; (v) the rate of the upper bracket of the wealth tax on real estate was increased from 0.275% to 0.425%, effective January 1, 2023; (vi) the special VAT credit is eliminated for construction companies that build affordable homes for sales from 1 January 2025 onwards; (vii) 2% annual tax on expensive aircraft, helicopters, yachts and vehicles is implemented; (viii) tax benefits of affordable housing under DFL No. 2 of 1959 are reduced only to individuals and maximum for two homes, regardless of the date of acquisition, as of January 1, 2023; (ix) credit for the purchase of fixed assets is eliminated for large companies; (x) the value of mining patents is increased.
On December 19, 2023, the Double Taxation Avoidance Treaty (DTAT) between Chile and the United States entered into force. The provisions of this DTAT would have effect: a) in respect of taxes withheld at source, for amounts paid or credited on or after February 1, 2024; b) in respect of other taxes, for taxable periods beginning on or after January 1, 2024. In order to claim tax benefits under the DTAT, formal and substantive requirements must be fulfilled. The formal requirements include: (i) proof of the tax residence by means of a certificate of residence issued by the local tax authority, as established by the Chilean IRS in Exempt Resolution number 151 of 2020; (ii) affidavit or equivalent legally binding statement, stating that income from services provided are not attributable to a permanent establishment or fixed base in Chile, as established in Exempt Resolution No. 58 of 2021. The substantive requirements relate to the qualified person requirement as established on Article 24 of the DTAT. If DTAT benefits are not or cannot be claimed, local taxation regulation applies as further detailed below. Meeting the DTAT application requirements, Chilean source income may be exempt from withholding tax, nonetheless, they may be subject to VAT.
Law No. 21,713 was published on October 24, 2024 and is primarily focused on tax compliance and improving tax enforcement under the prevailing tax system by considering seven main pillars: (i) the modernization of the tax management framework and the tax and customs courts (ii) an improved control of informality, (iii) the introduction of new rules that aim to prevent and uncover tax crimes, such as the creation of the “anonymous whistleblower,” (iv) the reinforcement of the local IRS capabilities to avoid aggressive tax planning by the tax avoidance regulation, (v) the introduction of additional powers for the Taxpayer’s Ombudsman Agency, (vi) regularization of tax obligations by making payment programs more flexible, and (vii) a strong focus on institutional strengthening and probity.
Among relevant matters regulated in this law are:
| i. | VAT on imported goods by expanding or replicating the digital services VAT regulation to imported goods under USD$500, wherein foreign digital intermediation platform or marketplaces operators will be VAT payers; |
| ii. | Transfer pricing regulation, which was conformed to OECD standards and expressly recognized the arm’s length principle, prefiling meetings with the Chilean tax authority were introduced and regulated as well as roll-back advance pricing agreements, self-adjustment of transfer prices, and adjustments by interquartile range rather than a fixed value; |
| iii. | Introduction of the concept of tax sustainability and regulation of company groups tax enforcement procedures; |
| iv. | Modifications regarding the recognition of passive income of controlled entities abroad (CFC), the relationship rules are extended for the purpose of determining the control of entities abroad, making the relationship rules of the Tax Code applicable and adding presumptions of relationship; |
| v. | Amendments regarding preferential tax regimes, current text of article 41 H is replaced, modifying the grounds for a jurisdiction to be considered a preferential tax regime. The new proposed conditions must be jointly and severally met. These conditions consist of: (a) That there is not treaty in force with Chile that allows the effective exchange of information for tax purposes and (b) That it is not considered compliant or substantially compliant in terms of transparency and exchange of information for tax purposes, according to the rating made by the global forum on transparency and exchange of information for tax purposes. the Chilean tax authority shall issue a resolution with the territories or jurisdictions that are in this situation. |
In particular, the approved regulations with an impact on the banking industry are:
| vi. | Modifications to the procedure to lift banking secrecy and accessing client´s banking information. |
| vii. | Banks, among other audited institutions, must report to the Chilean tax authority information regarding the number and amount of credits received in their client’s accounts when they surpass 50 movements in one day, week or month, or they surpass 100 movements in six months. The information must contain the amount of the payments, but will not include information regarding the persons or entities that made the payments. |
| viii. | To process any credit or loan application or any operation of a patrimonial nature with commercial banks, and in which the applicant in a legal person or other type of business entity, the bank must require the commencement of activities of the respective legal person or business entity. |
This information is not intended as tax advice to any particular investor. Such advice would require a complete understanding of an investor’s particular tax situation.
Law No. 21,755, published on July 11, 2025, aims to simplify regulations and promote economic activity. It adds prepaid card issuers, whether banking or non-banking institutions, as obligated reporting entities under Article 85 bis of the Tax Code, requiring them to report balances and credit amounts equal to or exceeding UF1,500 (approximately Ch$59.6 million as of December 31, 2025) related to prepaid card products. The law also establishes a temporary reduction of the statutory corporate tax rate to 12.5% for SMEs under the Pro Pyme Regime (Art. 14 letter D of the Chilean Tax Law) during fiscal years 2025, 2026, and 2027, provided that certain conditions set forth in the law are met. Additionally, it creates tax incentives for private investment in research and development.
Law No. 21,806, published on February 5, 2026, contains several tax-related provisions. Regarding the real estate tax (impuesto territorial), it postpones property reappraisals and extends the validity of current valuations. It also establishes an exceptional procedure for reducing real estate tax contributions for occupied real estate. Regarding VAT, it creates a new exemption for the sale of used tangible movable goods by nonprofit entities, provided that these goods come exclusively from donations received by the taxpayer.
Cash Dividends and Other Distributions
Cash dividends distributed by us to foreign holders of our ADSs or shares of common stock are subject to a 35.0% withholding tax, which is withheld, declared and paid to the Chilean Treasury by us (the “Chilean Withholding Tax” hereafter). A tax credit associated with the corporate income tax or the first category tax (the “Corporate Tax” hereafter) actually paid by the company and registered in the Credit Registry may be deducted from the Chilean Withholding Tax levied on cash dividends, up to the amounts registered in the Credit Registry. Finally, distribution of non-taxable income is relieved from Chilean Withholding Tax.
For purposes of applying the Chilean Withholding Tax, cash dividends are grossed-up in the amount the Corporate Tax paid by the company, in the proportion corresponding to the ADS holder.
All dividends will be attached with a provisional Corporate Tax credit (applying the rate of the first category in effect) that should be confirmed by the company’s taxable income as of December 31 of the year in which the dividend was paid. If such provisional credit is determined to be totally or partially not applicable at the end of the year because retained taxable profits were not enough to cover the distribution, the company will have to pay on behalf of the foreign holders such balance, along with its annual tax return to be filed on April of the following year. Foreign holders shall reimburse the company the excess resulting from the tax difference originated by the provisional credit.
Notwithstanding the above, as of January 1, 2017 onwards Banco de Chile has been subject to a semi-integrated system (current general tax regime) by which personal or withholding taxes are only triggered upon distribution of taxable profits to the company’s owners or shareholders, with a tax credit of only 65% of the paid Corporate Tax, unless the owner or shareholder is resident in a country party to a Double Taxation Avoidance Treaty with Chile that meets the legal requirements, in which case a tax credit up to 100% of the corporate tax paid by the company can be used against withholding taxes, which is the case of the DTAT entered between Chile and the United States.
However, in order to provide evidence of their tax residence, foreign holders of our ADSs or of our shares of common stock must comply with the formal and substantive requirements and send to Banco de Chile a certificate of residence issued by their local tax authority and the aforementioned affidavits.
Capital Gains
Capital gains realized on the sale, exchange or other disposition by a foreign holder of ADSs (or ADRs evidencing ADSs) will not be subject to Chilean taxation, provided that such disposition occurs outside Chile or that it is performed under the rules of Title XXIV of the Chilean Securities Market Law. The deposit and withdrawal of shares of common stock in exchange for ADRs will not be subject to any Chilean taxes.
Capital gains recognized on the sale or exchange of shares of common stock (as distinguished from sales or exchanges of ADSs representing such shares of common stock) by a foreign holder will be subject to both Corporate Tax and the Chilean Withholding Tax (Corporate Tax being creditable against the latter) if the seller is a taxpayer who obtains other income effectively taxed as first category. If the transaction does not meet this condition, capital gains will be taxed at the Chilean Withholding Tax of 35.0%, unless the special exemption described in the next paragraph applies.
Finally, an exemption regime is available for capital gains produced by the sale of actively traded stocks (under definitions established by the Chilean IRS) provided that the following requirements established by Article N° 107 of the Chilean Income Tax Law are met:
| a) | The seller must have acquired the shares: (i) on a Chilean stock exchange authorized by the CMF; or (ii) pursuant to a regulated tender offer carried out according to Title XXV of the Chilean Securities Market Law; or (iii) at the time of incorporation of the corporation or pursuant to a capital increase; or (iv) pursuant to the exchange of public traded securities convertible in shares (in this case the acquisition cost of the shares corresponds to the exchange price); or (v) in a redemption of securities from mutual funds. |
Regarding the shares acquired in a capital increase process (as mentioned in (iii) above) before the company was publicly listed, only the greatest amount between the portion which exceeds the price of the offering on the stock exchange (closing price on the first day of transactions for the IRS) and the book value on the prior day will be exempted; This exemption regime was only in force until August 31, 2022, given that, as explained under “Chilean Tax Considerations” above, Law No.
| b) | The shares must be sold: (i) on a stock exchange authorized by the CMF; (ii) pursuant to a regulated tender offer; or (iii) in a contribution of securities on mutual funds; and |
| c) | The exemption under analysis also applies if the sale or transfer of shares is executed within 90 days following the day on which they were no longer considered as actively traded. In such case, the profits exempted from Chilean taxes will correspond to the average price of said shares within the last 90 days in which they were actively traded. Any profits above the average price will be subject to the general tax regime applicable to the transfer of shares. |
21,420 established a single 10% tax on the capital gain produced by the sale of actively traded stocks. In any case, the acquirer or the stockbroker must withhold the tax and if they do not know the amount of the capital gain they will apply a provisional withholding of 1% of the sale price of the shares.
Regarding ADSs, the acquisition value of the shares of common stock received in exchange for them will represent the tax basis of such shares. The acquisition value is determined by the parties in the relevant deposit agreement, and generally corresponds to the highest price at which they are traded on Chilean stock exchanges on the date when the exchange takes place. Consequently, the conversion of ADSs into shares of common stock and the sale of such shares of common stock for the value established under the deposit agreement will not generate a capital gain subject to taxation in Chile in case the sale of shares is made at the same tax basis as of the time of the conversion.
However, as the exchange is generally registered two days after it took place, if the price of the shares goes down, a gain would arise. In order to overcome this situation, on October 1, 1999, the Chilean Internal Revenue Service issued Ruling No. 3,708, allowing Chilean issuers of ADSs to amend the deposit agreements by including a clause stating that when exchanged shares are sold by the ADSs’ holders on a Chilean stock exchange, either on the same day in which the exchange is recorded in the shareholders’ registry of the issuer or within two business days prior to such date, the acquisition price of those exchanged shares will be the price recorded in the invoice issued by the stock broker that participated in the sale. Consequently, if this clause were included in the deposit agreement, the capital gain that may arise if the exchange date was different from the date in which the shares received in exchange for ADSs were sold will not be subject to taxation. Sale of shares at a higher value of the invoice of the broker will be subject to taxes in Chile.
The distribution and exercise of preemptive rights relating to the shares of common stock will not be subject to Chilean taxation. Amounts received in exchange for the shares or assignment of preemptive rights relating to the shares will be subject to both Corporate Tax and Chilean Withholding Tax (the former being creditable against the latter to the extent described above).
Stock dividends
Stock dividends (distributions of fully paid-in shares) are free of tax at the moment they are received by the shareholder.
Until 2019, capital gains obtained on the sale of shares received as stock dividends could be eligible for treatment under the art. 107 regime. Nevertheless, since 2020 capital gains associated with the sale of shares obtained as stock dividends are subject to the general tax regime. Therefore, foreign investors will be subject to Chilean Withholding Tax on capital gains arising as a consequence of the sale of shares received as stock dividends. Law No. 21,210 established that the shares will have no acquisition cost for tax purposes and will not be eligible for sale under Article 107 of the Chilean Income Tax Law, being the total amount of the sale price affected by the general tax regime.
Mutual Funds and Investment Funds
Law No. 20,712, also known as the “Unitary Funds Act,” regulates all aspects related to mutual funds and investment funds, both public and private (creation, accepted investments, administration, forbidden activities, profit taxation, among others), as well as the activity of administrating third-party funds and individual portfolio management.
| (1) | The main aspects concerning taxation of foreign investments made in mutual and public funds are the following: |
| a) | In general, foreign investors are subject to a 10% Sole Tax over dividends and other forms of payment of taxable income originated from the Fund’s investments which would generally be subject to Chilean Withholding Tax, except if they are attributed to non-taxable income or income exempted from Chilean Withholding Tax. |
| b) | The rescue of Fund quotas (capital investments) is not subject to Chilean taxes, only to the extent that the fund has been liquidated, only with respect to the capital invested plus its readjustment by inflation. |
| c) | The capital gains arising from the sale or redemption of Fund’s quotas for reasons other than the Fund’s termination is subject to a 10% Sole Tax. |
| (2) | In the case of Funds that have at least 80% of their investment portfolio invested in certain foreign assets during at least 330 continuous or discontinuous days within the fiscal year, the foreign investments are taxed according to the following rules: |
| a) | Dividends attributed to income proceeding from the Fund’s investments in foreign assets (80% or more) are not subject to taxes in Chile. Dividends attributed to income proceeding from the Fund’s investments in Chilean assets (20% or less) are subject to a 10% Sole Tax, except for those who correspond to non-taxable o exempted income. |
| b) | The capital gains produced by the sale or redemption of fund quotas for reasons other than the Fund’s termination are exempted from Chilean taxes. |
| c) | Interests attributed to income proceeding from the Fund’s investments in foreign assets (80% or more) are not subject to taxes in Chile. Interests attributed to income proceeding from the Fund’s investments in certain Chilean assets (20% or less) and other specific kinds of investments are subject to a 4% Sole Tax, except for those who correspond to non-taxable o exempted income. No tax credits available. |
| d) | Whatever the percentage of the investment portfolio of the Fund is invested in foreign assets, dividends and interest payments will be subject to the general tax regime (Corporate Tax plus Chilean Withholding Tax with a credit for paid Corporate Tax) if any individual or entity with domicile or residence in Chile holds an interest, or is entitled to benefits, of 5% or more in one of the foreign holders, excluding foreign individuals and institutional investors. |
This special tax treatment also requires that the internal investment policy of the Fund:
| (a) | be in line with such percentage being invested specific foreign assets during the referred period of time; and |
| (b) | mandate that all other income proceeding from the remaining percentage of their portfolio investment (local assets) and not exempted from Chilean Withholding Tax be completely distributed among its participants during that year of their perception or during the 180 day-period following such fiscal year’s closing. |
Fixed Income (in force according to the Unitary Funds Act)
There are special tax regulations for bonds issued in Chile in a public offering which fulfill specific conditions established in the Chilean Income Tax Law (“104 Bonds”).
In February 2017, Law No. 20,956 came into effect, according to which the Chilean Withholding Tax on interest accrued by Chilean bonds, as a general rule, must be withheld by the issuer.
However, if the bond issuance agreement provides so, the Chilean Withholding Tax of 4% shall be withheld by the local custodian that is acting as the local tax agent for the foreign investor.
Regarding bonds issued by the Central Bank or by the Chilean Treasury, the withholding tax will always be borne by the issuer.
Finally, with regard to bonds whose issuance agreement was executed prior to the effectiveness of Law No. 20,956, local custodians must withhold the applicable tax unless the issuer adheres to said law by giving notice to the bondholders and to the Chilean Internal Revenue Service.
Capital gain produced in the sale of 104 Bonds should be exempted from Chilean taxes regardless of whether they are traded on a Chilean stock exchange in a continuous auction system, or over the counter.
The governmental bonds included in a list made by the Treasury Department qualify as 104 Bonds (even if some of the requirements mentioned above are not met) and are suitable for a tax exemption, regardless of its trading system, by virtue of Supreme Decree N° 471 of March 25, 2014.
According to the Chilean Income Tax Law, bonds and other debt instruments issued in Chile by Chilean companies are deemed to be located in Chile and therefore, sourced in Chile for income tax purposes. Therefore, the capital gains arising from their sale is subject to Chilean taxes, even if the seller is a non-resident. Also, interests arising from debt securities issued through offshore permanent establishments are deemed to be sourced in Chile.
Capital Gains Tax Regime for Foreign Institutional Investors
The Unitary Funds Act contains an exemption rule for capital gains obtained by foreign institutional investors in the sale of debt securities and the sale of shares subject to Article 107 of the Chilean Income tax Law.
According to this rule, capital gains obtained by foreign institutional investors in the sale of debt securities (public offerings not covered by the regime established in the Article 104 of the Chilean Income Tax Law) are exempted from income tax provided they have been issued prior to May 1, 2014, by companies incorporated in Chile and that the investor meets requirements set by the law.
The exemption shall be applicable for securities purchased before the entry in force of Unitary Funds Act (May 1, 2014), provided that the seller complies with the requirements listed in the repealed article 106, even in the case where the transfer of shares has not been made under any of the modalities set out in Article 107 (as described above).
Amendments to Law No. 21,420 to Article 107 of the Income Tax Act do not affect the capital gain of foreign institutional investors, who will remain exempt from this tax.
Other Chilean Taxes
There are no Chilean inheritance, gift or succession taxes applicable to the transfer or disposition of the ADSs by a foreign holder; however, according to the Chilean Internal Revenue Service’s criteria, such taxes will generally apply to the transfer at death or by a gift of shares of common stock by a foreign holder. No Chilean stamp, issue, registration or similar taxes or duties apply to foreign holders of ADSs or shares of common stock.
Stamp duties are applied only to documented money credit operations. The tax rate varies depending on the transaction: (i) 0.332% flat fee for operations on demand and (ii) 0.066% per month with a 0.8% cap for operations subject to a maturity date.
Other Relevant Aspects
On December 30, 2023, Law No. 21,641 which “Strengthens the Resilience of the Financial Systems and its Infrastructures” was published in the Official Gazette of the Republic of Chile. Among other matters, this law: (i) requires the Chilean Tax Authority to implement a simplified procedure for certain non-residents to obtain a Chilean Tax ID (RUT) for the purposes of opening and operating a CLP current account in the market, (ii) includes the requirement of a tax information exchange agreement in place between Chile and the non-resident’s country of tax residency, and (iii) modifies the Tax Code to require local banks or correspondent banks to report to the Chilean tax authority the identification of non-residents that open CLP current accounts and contains requirements that these local banks provide information such as credits and debits in these accounts and the amount of these transactions. On April 3, 2025, the Chilean IRS issued regulations addressing the specific requirements for the implementation of the aforementioned simplified procedure for certain non-residents to obtain a Chilean Tax ID (RUT).
On February 2, 2024, Law No. 21,648 was published. This law modifies de Tax Code in order to extend the obligation to inform the tax authority of the beginning of taxable activities, to any person or entity that imports goods which cumulatively or individually have “free on board” value of U.S.$3,000 or more. Taxpayers can be relieved from this obligation if they prove the goods are for personal use or consumption.
Tax Reform Currently Under Discussion
On August 4, 2025, the Government introduced legislative bill No. 17725-05, titled “Introduces tax benefits for the middle class, compensated by the taxation indicated, reduces exemptions.” This bill includes: (i) the aforementioned “single tax” regime for small businesses; (ii) an increase in the marginal rate of the two highest brackets of the personal income tax (impuesto global complementario); and (iii) amendments to the Unitary Funds Act, which include: (a) the addition of a new paragraph to Article 82(A)(a), establishing that taxpayers subject to corporate income tax must incorporate into their taxable net income the profits received from investment funds within the same fiscal year, thereby eliminating the current possibility of indefinitely deferring Corporate Income taxation on such income; (b) an increase in the sole tax applicable to profits remitted from investment funds to individuals who are not residents or domiciled in Chile, from 10% to 20%; and (c) the classification of private investment funds as entities subject to the corporate tax under the general regime. The bill is currently in its first legislative stage.
More recently, the administration that took office on March 11, 2026 submitted the “National Reconstruction and Economic & Social Development” bill to Congress on April 22, 2026. Although this bill addresses a wide array of reforms to promote economic development, it also includes diverse proposals aimed at simplifying or modifying the current tax legislation. As of the date of this annual report, the bill is in the very first legislative stage.
Given their current legislative status, we cannot yet determine whether, or to what extent, these or other reforms, if enacted, would have a material effect on our business, results of operations or financial condition, or on the taxes payable by us or our shareholders. For more information, see “Item 3. Key Information—Risk Factors—Risks Relating to Chile—Changes in tax law could adversely affect our net income and could also result in higher taxes on distributions to our foreign shareholders.”
United States Federal Income Tax Considerations
The following discussion is a summary of certain U.S. federal income tax considerations that may be relevant to the acquisition, ownership and disposition of shares of our common stock, as well as the ownership and disposition of ADSs received pursuant to a deposit into the ADR facility of shares of our common stock, by a beneficial owner that is: (i) an individual who is a citizen or resident of the United States; (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof or the District of Columbia; (iii) an estate the income of which is subject to U.S. federal income tax regardless of its source; or (iv) a trust if a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all substantial decisions of the trust (or otherwise if the trust has a valid election in effect under current U.S. Treasury regulations to be treated as a U.S. person). For purposes of this discussion, we refer to these owners of ADSs or shares of our common stock as “U.S. Holders.” If a partnership (or any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds ADSs or shares of our common stock, the tax treatment of a partner generally will depend upon the status of the partner and upon the activities of the partnership. A prospective investor that is a partnership or a partner in a partnership holding ADSs or shares of our common stock should consult its own tax advisors.
This summary is not a comprehensive discussion of all of the tax considerations that may be relevant to a U.S. Holder’s decision to acquire ADSs or shares of our common stock. In particular, this discussion is directed only to U.S. Holders that will hold ADSs or shares of our common stock as capital assets (generally, property held for investment) and it does not address the Medicare tax on net investment income or any special U.S. federal income tax consequences that may be applicable to U.S. Holders that are subject to special treatment under the Internal Revenue Code of 1986, as amended (“U.S. Code”), such as banks, brokers or dealers in securities or currencies, traders in securities electing the mark-to-market method of accounting, financial institutions, insurance companies, tax-exempt entities, regulated investment companies, real estate investment trusts, partnerships, holders that own or are treated as owning 10% or more of our stock (by vote or by value), persons holding ADSs or shares of our common stock as part of a hedging, conversion or other integrated transaction or a straddle, persons subject to the alternative minimum tax or U.S. Holders whose functional currency is not the U.S. dollar. Prospective investors are advised to satisfy themselves as to the overall U.S. federal, state and local tax consequences of their ownership of ADSs or shares of our common stock by consulting their own tax advisors.
Except where specifically described below, this discussion assumes that we are not a passive foreign investment company (“PFIC”), for U.S. federal income tax purposes. Please see the discussion under “—Passive Foreign Investment Companies” below.
The statements of U.S. federal income tax laws set out below are based on the laws in force as of the date of this annual report and may be subject to changes in U.S. federal income tax law occurring after that date, including changes that may have retroactive effect.
ADRs
A U.S. Holder who deposits shares of our common stock into the ADR facility, receiving ADSs in return, will be treated for U.S. federal income tax purposes as the beneficial owner of the underlying shares of our common stock represented by those ADSs and evidenced by ADRs. Deposits and withdrawals of shares of our common stock by U.S. Holders in exchange for ADSs will not result in the realization of gain or loss for U.S. federal income tax purposes.
Taxation of Dividends
Subject to the discussion below under “—Passive Foreign Investment Companies,” distributions of cash or property (other than shares of our common stock, if any, distributed pro rata to all of our shareholders, including holders of ADSs) paid out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) with respect to ADSs or shares of our common stock, including the net amount of the Chilean income tax withheld on the distribution (after taking into account the credit for the first category tax as described in Taxation—Chilean Tax Considerations—Cash Dividends and Other Distributions), will be includible in gross income as ordinary income on the date on which the U.S. Holder receives the distribution, in the case of shares of our common stock, or the date the depositary receives the distribution, in the case of ADSs. To the extent that the amount of any distribution exceeds our current and accumulated earnings and profits as determined for U.S. federal income tax purposes, such excess amounts will be treated first as a non-taxable return of capital to the extent of such U.S. Holder’s tax basis in the shares of our common stock and, thereafter, as capital gain. As used below, the term “dividend” means a distribution that constitutes a dividend for U.S. federal income tax purposes. Dividends paid in Chilean pesos generally will be includible in gross income in a U.S. dollar amount calculated by reference to the spot market exchange rate in effect on the date the U.S. Holder receives the dividends, in the case of shares of our common stock, or the date the depositary receives the dividends, in the case of ADSs, regardless of whether the payment is in fact converted into U.S. dollars. U.S. Holders should consult their own tax advisors regarding the treatment of foreign currency gain or loss, if any, on any Chilean pesos received which are converted into U.S. dollars after they are received.
Dividends paid to corporate U.S. Holders with respect to ADSs or shares of our common stock will not be eligible for the dividends received deduction allowed to corporations under the U.S. Code. Under current law, dividends received by certain non-corporate U.S. Holders (including individuals) with respect to ADSs or shares of our common stock will be subject to U.S. federal income tax at preferential rates if the dividends constitute “qualified dividend income” for U.S. federal income tax purposes. Subject to certain holding period requirements and other conditions, dividends paid on the ADSs or shares of our common stock will be treated as qualified dividend income if:
| (1) | the ADSs or shares of our common stock are either readily tradable on an established securities market in the United States, or we are eligible for the benefits of a comprehensive income tax treaty with the United States that the U.S. Internal Revenue Service (the “U.S. IRS”) has approved for purposes of the qualified dividend rules; and |
| (2) | we were not, in the year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid, a PFIC. |
The ADSs are listed on the NYSE and will qualify as readily tradable on an established securities market in the United States so long as they are so listed. Moreover, as discussed below under “—Passive Foreign Investment Companies,” we believe that we will not be treated as a PFIC for U.S. federal income tax purposes with respect to our 2025 and current taxable year, and based on our current expectations regarding the value and nature of our assets, the sources and nature of our income, relevant market and shareholder data and our current business plans, we do not anticipate becoming a PFIC in the future. However, there can be no assurance in this regard because the PFIC determination is made annually and is based on the portion of our assets (including goodwill) and income that is characterized as passive under the PFIC rules and our continued qualification for an exception to the PFIC rules for certain foreign banks.
Shares of our common stock are not readily tradable on an established securities market in the United States, but based on U.S. IRS guidance, we expect that dividends paid on shares of our common stock will be treated as qualified dividend income because of the comprehensive income tax treaty between Chile and the United States (the “Tax Treaty”) entered into force on December 19, 2023.
Subject to generally applicable limitations and conditions under the U.S. Code (including a minimum holding period requirement), a U.S. Holder may be entitled to a foreign tax credit in respect of any non-U.S. income taxes withheld and paid over to the applicable non-U.S. tax authorities (after taking into account the credit for the first category tax, when it is available). These generally applicable restrictions and conditions include requirements adopted in Treasury regulations promulgated in December 2021, and subject to the discussion below, there can be no assurance that any taxes imposed by Chile will satisfy these requirements. A notice from the U.S. IRS provides temporary relief from such Treasury regulations by allowing taxpayers to apply a modified version of the Treasury regulations for taxable years ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later date specified in such notice or other guidance), provided that the taxpayer consistently applies such modified version of the Treasury regulations and complies with specific requirements set forth in a previous notice. In the case of a U.S. Holder that either (i) is eligible for, and properly elects, the benefits of the Tax Treaty or (ii) consistently elects to apply the modified version of the Treasury regulations in the manner described in the preceding sentence, Chilean income taxes withheld on a dividend distribution generally will qualify as a creditable tax. In the case of all other U.S. Holders, the application of these requirements to the Chilean income taxes withheld on a dividend distribution is uncertain and we have not determined whether these requirements have been met. If the Chilean tax is not a creditable tax for a U.S. Holder or the U.S. Holder does not elect to claim a foreign tax credit for any foreign income taxes, the U.S. Holder may be able to deduct the Chilean tax in computing the U.S. Holder’s taxable income for U.S. federal income tax purposes, subject to applicable limitations and requirements. Dividends paid on the ADSs or shares of our common stock generally will constitute foreign source income, and for purposes of calculating the foreign tax credit, as “passive category income,” for most U.S. Holders. U.S. Holders are not allowed foreign tax credits for income taxes withheld in respect of certain short-term or hedged positions in securities and may not be allowed foreign tax credits in respect of arrangements in which their expected economic profit is insubstantial. The rules governing foreign tax credits are complex. U.S. Holders should consult their own advisors concerning the implications of these rules in light of their particular circumstances.
Taxation of Capital Gains or Losses
Subject to the discussion below under “—Passive Foreign Investment Companies,” gain or loss realized by a U.S. Holder on the sale, exchange or other taxable disposition of ADSs or shares of our common stock generally will be capital gain or loss and generally will be long-term capital gain or loss if the shares of our common stock have been held for more than one year. The amount of gain or loss realized will be the difference between (i) the amount realized on the sale, exchange or other taxable disposition of ADSs or shares of our common stock over (ii) the U.S. Holder’s adjusted tax basis in such ADSs or shares of our common stock. Long-term capital gain realized by certain U.S. Holders (including individuals) generally is eligible for favorable rates of U.S. federal income tax. The deductibility of capital losses is subject to significant limitations under the U.S. Code.
The initial tax basis of shares of our common stock purchased by a U.S. Holder generally will be the U.S. dollar value of the Chilean pesos denominated purchase price determined on the date of purchase. If shares of our common stock are treated as being traded on an “established securities market,” a cash basis U.S. Holder, or, if it elects, an accrual basis U.S. Holder, will determine the U.S. dollar value of the cost of such shares by translating the amount paid at the spot rate of exchange on the settlement date of the purchase. Such an election by an accrual basis U.S. Holder must be applied consistently from year to year and cannot be revoked without the consent of the U.S. IRS. If a U.S. Holder converts U.S. dollars to Chilean pesos and immediately uses the currency to purchase shares of our common stock, such conversion generally will not result in taxable gain or loss to the U.S. Holder.
With respect to the sale, exchange or other taxable disposition of shares of our common stock, the amount realized by a U.S. Holder generally will be the U.S. dollar value of the payment received determined on (1) the date of receipt of payment in the case of a cash basis U.S. Holder or (2) the date of disposition in the case of an accrual basis U.S. Holder. If shares of our common stock are treated as being traded on an “established securities market,” a cash basis U.S. Holder, or, if it elects, an accrual basis U.S. Holder, will determine the U.S. dollar value of the amount realized by translating the amount received at the spot rate of exchange on the settlement date of the sale.
Any gain or loss realized by a U.S. Holder on such a sale, exchange or other taxable disposition of shares of our common stock generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes. If Chilean income tax is withheld on such sale, exchange or other taxable disposition (see “Item 10. Additional Information—Taxation—Chilean Tax Considerations—Capital Gains”), a U.S. Holder’s ability to utilize foreign tax credits in respect of such Chilean income tax may be limited. Alternatively, a U.S. Holder may be able to deduct Chilean income taxes paid with respect to a disposition of shares of our common stock against its taxable income, assuming such U.S. Holder does not take a credit for any foreign income taxes paid or accrued during the taxable year and certain other conditions are met. The availability and calculation of foreign tax credits and deductions for foreign taxes involves the application of rules that depend on your particular circumstances and involve the application of complex rules to those circumstances as described above in “—Taxation of Dividends.” U.S. Holders should consult their own tax advisors regarding the application of the foreign tax credit limitation rules to their investment in, and disposition of, the shares of our common stock.
Passive Foreign Investment Companies
Special U.S. federal income tax rules apply to U.S. persons owning ADSs or common shares of a PFIC. A foreign corporation generally will be classified as a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying relevant look through rules with respect to the income and assets of subsidiaries, either:
| (1) | at least 75% of its gross income is “passive income”; or |
| (2) | on average at least 50% of the gross value of its assets is attributable to assets that produce passive income or are held for the production of passive income. |
For this purpose, passive income generally includes, among other things, dividends, interest, rents, royalties, gains from the disposition of passive assets and gains from commodities and securities transactions. In determining whether a foreign corporation is a PFIC, a pro rata portion of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account.
Banks generally derive a substantial part of their income from assets that are interest bearing or that otherwise could be considered passive under the PFIC rules. An exception, however, is provided for income derived in the active conduct of a banking business (the “Active Bank Exception”). The application of the Active Bank Exception to banks is unclear under present U.S. federal income tax law. The U.S. IRS has issued a notice and has proposed U.S. Treasury regulations which have different requirements for qualifying as a foreign bank and for determining the banking income that may be excluded from passive income under the Active Bank Exception. Based on our current estimates of our gross income and gross assets, the nature of our business and our interpretation of the proposed U.S. Treasury regulations and notice relating to the Active Bank Exception, we do not expect to be classified as a PFIC for our current taxable year (although the determination cannot be made until the end of such taxable year), and we intend to continue our operations in such a manner that we do not expect to be classified as a PFIC in the foreseeable future. There can be no assurances in this regard, however, because the application of the relevant rules is complex and involves some uncertainty. The PFIC determination is made annually and is based on the portion of our assets (including goodwill) and income that is characterized as passive under the PFIC rules. In addition, the relevant U.S. Treasury regulations addressing the Active Bank Exception may not be finalized in their current form, and our PFIC status may be impacted if and when these U.S. Treasury regulations are finalized. Moreover, our business plans may change, which may affect the PFIC determination in future years.
If we are treated as a PFIC for any year, U.S. Holders may be subject to adverse tax consequences upon a sale, exchange or other disposition of ADSs or shares of our common stock, or upon the receipt of certain “excess distributions” (generally distributions in excess of 125% of the average distribution over the shorter of a three-year period or the U.S. Holder’s holding period for shares of our common stock) from us. In this event, unless a U.S. Holder elects to be taxed annually on a mark-to-market basis with respect to ADSs or shares of our common stock, as described below, any gain realized on a sale or other taxable disposition of ADSs or shares of our common stock or excess distributions would be treated as realized ratably over the U.S. Holder’s holding period for such ADSs or shares of our common stock, and amounts allocated to prior years during which we were a PFIC would be taxed at the highest tax rate in effect for each such year. An additional interest charge may apply to the portion of the U.S. federal income tax liability on such gain or distribution treated under the PFIC rules as having been deferred by the U.S. Holder. Amounts allocated to the taxable year in which the sale or excess distribution occurs and to any year before we became a PFIC would be taxed as ordinary income in the taxable year in which the sale or excess distribution occurs. If we were a PFIC, certain subsidiaries and other entities in which we have a direct or indirect interest may also be PFICs (“Lower-tier PFICs”). Under attribution rules, U.S. Holders would be deemed to own their proportionate shares of Lower-tier PFICs and would be subject to U.S. federal income tax according to the rules described above on (i) certain distributions by a Lower-tier PFIC and (ii) a disposition of shares of a Lower-tier PFIC, in each case as if the U.S. Holder held such shares directly, even though such U.S. Holder had not received the proceeds of those distributions or dispositions.
If we are treated as a PFIC, the rules described in the foregoing paragraph can be avoided by a U.S. Holder that makes a “mark-to-market” election. A U.S. Holder may make a mark-to-market election for ADSs or shares of our common stock (but not for the shares of any Lower-tier PFIC) if such ADSs or shares of our common stock constitute “marketable stock” as defined in the U.S. Treasury regulations. ADSs and shares of our common stock will be marketable stock if they are regularly traded on a “qualified exchange or other market” within the meaning of the U.S. Treasury regulations. The ADSs are listed on the NYSE and will qualify as regularly traded on an established securities market so long as they are so listed. No assurance can be given, however, that our common stock will be considered regularly traded on an established securities market. In particular, it is unclear whether the Santiago Stock Exchange and the Bolsa Electrónica de Chile would meet the requirements for a “qualified exchange or other market.” A U.S. Holder electing the mark-to-market regime generally would compute gain or loss at the end of each taxable year as if the ADSs or shares of our common stock had been sold at fair market value. Any gain recognized by the U.S. Holder under mark-to-market treatment, or on an actual sale, would be treated as ordinary income, and the U.S. Holder would be allowed an ordinary deduction for any decrease in the value of its ADSs or shares of our common stock as of the end of any taxable year, and for any loss recognized on an actual sale, but only to the extent, in each case, of previously included mark-to-market income not offset by previously deducted decreases in value. Any loss on an actual sale of ADSs or shares of our common stock would be a capital loss to the extent in excess of previously included mark-to-market income not offset by previously deducted decreases in value. A U.S. Holder’s adjusted tax basis in its ADSs or shares of our common stock will be increased by the amount of income inclusion and decreased by the amount of deductions under the mark-to-market rules. U.S. Holders should be aware, however, that if we are determined to be a PFIC, the interest charge regime described above could be applied to indirect distributions or gains deemed to be attributable to U.S. Holders in respect of any of our Lower-tier PFICs, and the mark-to-market election generally would not be effective for such Lower-tier PFICs.
The rules described in the second preceding paragraph can also be avoided by a U.S. Holder that elects to treat us as a “qualified electing fund.” However, this option generally will not be available to U.S. Holders because we do not intend to provide the information necessary for U.S. Holders to make such election.
A U.S. Holder that owns ADSs or shares of our common stock during any taxable year that we are treated as a PFIC generally would be required to file U.S. IRS Form 8621. U.S. Holders should consult their own tax advisors regarding the application of the PFIC rules to ADSs or shares of our common stock, the availability and advisability of making an election to avoid the adverse tax consequences of the PFIC rules should we be considered a PFIC for any taxable year and the application of the reporting requirements on U.S. IRS Form 8621 to their particular situation.
Backup Withholding and Information Reporting
Dividends paid on, and proceeds from the sale or other disposition of, ADSs or shares of our common stock to a U.S. Holder generally will be subject to the information reporting requirements of the U.S. Code and may be subject to backup withholding unless the U.S. Holder provides an accurate taxpayer identification number and makes any other required certification or otherwise establishes an exemption. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that certain required information is timely furnished to the U.S. IRS.
In addition, U.S. Holders may be required to comply with certain reporting requirements, including filing a U.S. IRS Form 8938, Statement of Foreign Financial Assets, with respect to the holding of certain foreign financial assets, including stock of foreign issuers, either directly or through certain foreign financial institutions, if the aggregate value of all such assets exceeds U.S.$50,000. U.S. Holders should consult their own tax advisors regarding the application of the information reporting rules to ADSs or shares of our common stock and the application of these reporting requirements to their particular situations.
HOLDERS OF ADSs OR SHARES OF OUR COMMON STOCK SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE CHILEAN, U.S. FEDERAL INCOME AND OTHER TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF ADSs OR SHARES OF OUR COMMON STOCK, INCLUDING, IN PARTICULAR, THE EFFECT OF ANY NON-U.S., STATE OR LOCAL TAX LAWS.
WHERE TO FIND ADDITIONAL INFORMATION
The materials included in this annual report on Form 20-F may be downloaded at the SEC’s website: http://www.sec.gov. Additional reports and information about us can be downloaded at the SEC’s website.
ANNUAL REPORT TO SECURITY HOLDERS
We have submitted our 2025 local annual report provided to security holders in electronic format as an exhibit to a report on Form 6-K dated March 6, 2026.
Item 11 Quantitative and Qualitative Disclosures About Market Risk
For quantitative and qualitative information related to market risk, see Note 44 to our audited consolidated financial statements as of and for the year ended December 31, 2025, included elsewhere in this annual report.
Item 12 Description of Securities Other Than Equity Securities
| A | Debt Securities |
Not Applicable.
| B | Warrants and Rights |
Not Applicable.
| C | Other Securities |
Not Applicable.
| D | American Depositary Shares |
JPMorgan Chase Bank, N.A. (the “Depositary”) serves as the depositary for our ADSs. ADS holders are required to pay various fees to the Depositary, and the Depositary may refuse to provide any service for which a fee is assessed until the applicable fee has been paid.
ADS holders are required to pay the Depositary amounts in respect of expenses incurred by the Depositary or its agents on behalf of ADS holders, including expenses arising from compliance with applicable law, taxes or other governmental charges, facsimile transmission or conversion of foreign currency into U.S. dollars.
ADS holders are also required to pay additional fees for certain services provided by the Depositary, as set forth in the table below.
|
Depositary service |
Fee payable by ADS holders |
|
| (a) Issuance and delivery of ADRs against deposits of shares, including deposits in respect of share distributions, rights and other distributions | Up to U.S.$5.00 per 100 ADSs (or portion thereof) | |
| (b) Distribution of dividends | U.S.$0.02 or less per ADS | |
| (c) Withdrawal of shares underlying ADSs | Up to U.S.$5.00 per 100 ADSs (or portion thereof) | |
| (d) Transfer, combination and split-up of ADRs | U.S.$1.50 per ADS |
The Depositary may sell (by public or private sale) sufficient securities and property received in respect of share distributions, rights and other distributions prior to the deposit of shares to pay the charges described in (a) and (c) of the table above. In addition, the Depositary may deduct from any distributions on or in respect of deposited securities, or may sell by public or private sale for the account of a holder, any part or all of such deposited securities (after attempting by reasonable means to notify the holder prior to such sale), and may apply such deduction or the proceeds of any such sale in payment of any tax or other governmental charge that may become payable by or on behalf of a custodian or the Depositary with respect to any ADR, any deposited securities represented by ADSs or any distribution thereon.
ADS Split
On October 23, 2018, we announced a ratio change to our ADR program from one ADS per 600 of our common shares into one ADS per 200 of our common shares. This modification became effective on November 23, 2018, upon which ADR holders received two additional ADSs for each ADS held as of the record date of November 15, 2018. Additionally, the existing ADRs, as of the effective date continued to be valid and were not exchanged for new ones.
Payments by the Depositary
The Depositary has agreed to reimburse us for certain reasonable expenses related to the ADS program, subject to a cap agreed between the Depositary and us. These reimbursable expenses currently include, but are not limited to, legal fees, NYSE listing fees, investor relations servicing, investor-related presentations, ADR-related advertising and public relations in those jurisdictions in which the ADRs may be listed or otherwise quoted for trading, and accountants’ fees in relation to our regulatory filings. During the year ended December 31, 2025, we received gross reimbursements from the depositary for an amount of U.S.$242,937.
Please refer to Exhibit 2.5 filed herein for the remaining information relating to our American Depositary Shares required by Item 12 of Form 20-F.
PART II
Item 13 Defaults, Dividend Arrearages and Delinquencies
None.
Item 14 Material Modifications to the Rights of Security Holders and Use of Proceeds
None.
Item 15 Controls and Procedures
(a) Disclosure Controls and Procedures
We have evaluated, with the participation of our chief executive officer and chief financial officer, the effectiveness of our disclosure controls and procedures as of December 31, 2025.
There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
(b) Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a 15(f) and 15d 15(f) under the Exchange Act. The company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The company’s internal control over financial reporting includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the company’s internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO – 2013 framework) in Internal Control Integrated Framework.
Based on our assessment and those criteria, management believes that the company maintained effective internal control over financial reporting as of December 31, 2025.
(c) Report of Independent Registered Public Accounting Firm on Internal Controls
KPMG Auditores Consultores Limitada (“KPMG”), the independent registered public accounting firm that has audited our financial statements, has issued an audit report on the effectiveness of our internal controls over financial reporting as of December 31, 2025. Their attestation report on internal controls over financial reporting is included herein.
(d) Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting during 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 16A Audit Committee Financial Expert
Our board of directors has determined that Ms. Holuigue, a member of our directors/audit committee who satisfies the independence requirements of both Chilean law and Rule 10A-3 under the Exchange Act, qualifies as an “audit committee financial expert” pursuant to the Instruction to paragraph (a) of this Item 16A. Ms. Holuigue is an economist and holds a master’s degree in economics from the Pontificia Universidad Católica de Chile. She currently serves as a member of the board of directors of Grupo Prisma, a director of Comunidad Mujer, a counselor at Clapes UC and Red de Alimentos, and a member of the ICARE Business and Society Circle. She has also served on the boards of Empresa Nacional del Petróleo (ENAP), Parque Arauco, Corpbanca, Copesa, EFE, Centro Cultural GAM, Unimarc, Fundación Techo and Fundación Chile. She previously held executive positions at Copec, Banco Santiago (now Santander) and Telefónica. She was a professor of microeconomics for 10 years at the Institute of Economics of the Pontificia Universidad Católica de Chile.
Item 16B Code of Ethics
In 2008, we adopted a new Code of Ethics, as defined in Item 16B of Form 20-F under the Exchange Act, which we last updated in August 2024. The Code of Ethics applies to directors and consultants of our board of directors, to our chief executive officer, chief financial officer, principal accounting officer and persons performing similar functions, and to all other employees without exception. A current copy of the Code of Ethics, also referred herein as our Code of Conduct, is incorporated by reference as Exhibit 11.1 to this annual report.
The Code of Ethics is available to the public on
our web page at www.bancochile.cl. This URL is intended to be an inactive textual reference only. It is not intended to be an active
hyperlink to our website. The information on our website, which might be accessible through a hyperlink resulting from this URL, is not
and shall not be deemed to be incorporated into this annual report on Form 20-F.
Item 16C Principal Accountant Fees and Services
Audit and Non-Audit Fees
The following table sets forth the fees billed to us by EY Audit Ltda. (“EY”) and KPMG Auditores Consultores Limitada (“KPMG”) for each of the periods indicated:
| Year ended December 31, | ||||||||||||
| 2023 | 2024 | 2025 | ||||||||||
| (in millions of Ch$) | ||||||||||||
| Audit fees | ||||||||||||
| EY | Ch$ | 750 | Ch$ | 860 | Ch$ | – | ||||||
| KPMG | – | – | 1,053 | |||||||||
| Audit-related fees | ||||||||||||
| EY | – | – | – | |||||||||
| KPMG | – | – | – | |||||||||
| Tax fees | ||||||||||||
| EY | 29 | 30 | – | |||||||||
| KPMG | – | – | 29 | |||||||||
| Other fees | ||||||||||||
| EY | 43 | 23 | – | |||||||||
| KPMG | – | – | 35 | |||||||||
| Total fees | Ch$ | 822 | Ch$ | 913 | Ch$ | 1,117 | ||||||
“Audit fees” in the above table are the aggregate fees billed by EY and KPMG for each of the periods indicated, in connection with the audit of our annual financial statements. This line item includes: (i) the audit of our statutory accounts, and the audit of the consolidated financial statements required by Item 18 of Form 20-F and limited reviews of financial statements, (ii) reviews and issuances of comfort letters and (iii) other local attestation reports required by local regulators.
“Audit-related fees” in the above table are the aggregate fees billed by EY and KPMG for each of the periods indicated, for assurance and related services that are reasonably related to the performance of the audit or review of the Bank’s financial statements and are not reported under “audit fees.” Services such as (i) attestation reports not required by statute or regulations and (ii) merger and acquisition due diligence are included in this line item. During 2023, 2024 and 2025, there were no such services rendered.
“Tax fees” in the above table are the aggregate fees billed by EY and KPMG for each of the periods indicated, for permitted tax advisory and tax compliance services.
“All Other fees” in the above table are fees incurred in 2023, 2024 and 2025 related to certain consulting services such as: (i) operational risk assessment of third-party suppliers, (ii) foreign regulations compliance, and (iii) advisory services.
Directors/Audit Committee Pre-Approval Policies and Procedures
Auditors are pre-approved by our directors/audit committee, whose main duties are disclosed in “Item 6. Directors, Senior Management and Employees—Board Practices.” Furthermore, the selection of external auditors is subject to approval by our shareholders at the ordinary annual shareholders’ meeting. All proposed services carried out by our external auditors as well as corresponding fees related to audit and non-audit services, have been presented to our directors/audit committee, which has determined they are reasonable and consistent with our policies.
Item 16D Exemptions from the Listing Standards for Audit Committees
Ms. Caumont serves on our directors/audit committee in reliance upon the exemption from the independence requirements contained in Rule 10A-3(b)(1)(iv)(D). We do not believe that such reliance would materially adversely affect the ability of the directors/audit committee to act independently and to satisfy the other requirements of Rule 10A-3.
Item 16E Purchases of Equity Securities by the Issuer and Affiliated Purchasers
We did not make, nor to our knowledge any affiliated purchaser has made, any purchases of our previously issued shares during the fiscal years ended December 31, 2023, 2024 and 2025.
Item 16F Change in Registrant’s Certifying Accountant
Please refer to the change of auditors previously reported on Form 6-K dated June 10, 2025.
Item 16G Corporate Governance
Pursuant to Section 303A.11 of the Listed Company Manual of the NYSE, we are required to provide a summary of the significant ways in which our corporate governance practices differ from those required for U.S. companies under the NYSE listing standards. We are a Chilean bank with shares listed on the Santiago Stock Exchange, the Chilean Electronic Stock Exchange and ADSs listed on the New York Stock Exchange. Our corporate governance practices are governed by our bylaws, the General Banking Act, the Chilean Corporations Law, the Securities Market Law, and the regulations issued by the CMF. Therefore, you may not have the same protections afforded to shareholders of U.S. companies under the NYSE listing standards.
The table below discloses the significant differences between our corporate governance practices and the NYSE standards.
|
NYSE Standards |
Our Corporate Governance Practice |
|
| Director Independence. Majority of board of directors must be independent. “Controlled companies,” which would include our company if it were a U.S. issuer, are exempt from this requirement. §303A.01 | Pursuant to the General Banking Act, we are not required to make a determination as to the independence of our directors. However, pursuant to the Chilean Corporations Law, under certain circumstances provided in Article 50b is of such law, we are required to appoint at least one independent director. | |
| The definition of independence applicable to us pursuant to the Chilean Corporations Law differs in certain aspects from the definition applicable to U.S. issuers under the NYSE rules. | ||
| Under the Chilean Corporations Law, there are several factors that must be observed in order to determine whether a director is deemed to be independent. These factors are included in Article 50 bis of the Chilean Corporations Law. In addition, under the regulations of the CMF, members of the directors/audit committee must satisfy international independence criteria set forth by our board of directors. | ||
| Executive Sessions. Non-management directors must meet regularly in executive sessions without management. Independent directors should meet alone in an executive session at least once a year. §303A.03 | There is no similar requirement under our bylaws or under applicable Chilean law. | |
| Audit committee. Audit committee must satisfy the independence and other requirements of Rule 10A-3 under the Exchange Act, and the more stringent requirements under the NYSE standards is required. §§303A.06, 303A.07. | We are in compliance with Rule 10A-3. The members of our directors/audit committee are not required to satisfy the NYSE independence and other audit committee standards that are not prescribed by Rule 10A-3. |
|
NYSE Standards |
Our Corporate Governance Practice |
|
| Nominating/corporate governance committee. Nominating/corporate governance committee of independent directors is required. The committee must have a charter specifying the purpose, duties and evaluation procedures of the committee. “Controlled companies,” which would include our company if it were a U.S. issuer, are exempt from these requirements. §303A.04 | We are not required to have, and do not have, a nominating/corporate governance committee. | |
| Compensation committee. Compensation committee of independent directors is required, which must approve executive officer compensation. The committee must have a charter specifying the purpose, duties and evaluation procedures of the committee. “Controlled companies,” which would include our company if it were a U.S. issuer, are exempt from this requirement. §303A.05 | We are not required to have a compensation committee. Pursuant to the Chilean Corporations Law, our directors/audit committee must approve compensation plans. | |
| Equity compensation plans. Equity compensation plans require shareholder approval, subject to limited exemptions. | Equity compensation plans require shareholder approval, subject to limited exemptions. | |
| Code of Ethics. Corporate governance guidelines and a code of business conduct and ethics is required, with disclosure of any waiver for directors or executive officers. §303A.10 | We have adopted a code of ethics, also referred herein as Code of Ethics, or Code of Conduct, applicable to all of our executive officers, employees, directors and advisors to our board of directors, a version of which is incorporated by reference as an exhibit to this Form 20-F. We are required by Item 16B of Form 20-F to disclose any waivers granted to our chief executive officer, chief financial officer, principal accounting officer and persons performing similar functions. Our Code of Ethics sets forth the principles and values that govern personnel conduct as well as other issues such as conflicts of interests, usage of privileged information, internal controls for fraud prevention and labor responsibility, among others. |
Item 16H Mine Safety Disclosure
Not applicable.
Item 16I Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
Item 16J Insider Trading Policies
On March 28, 2024, Banco de Chile approved its insider trading prevention policy which provides the guidelines and procedures reasonably designed to assist the members of the board, the senior management and employees of Banco de Chile who by his or her job, profession or function has access to non-public information of Banco de Chile, to comply with their obligations under the applicable laws and regulations. The insider trading prevention policy is also referred herein as Insider Trading Prevention and Personal Investment Management Policy.
Item 16K Cybersecurity
Risk Management and Strategy
Banco de Chile considers the technology, information security and cybersecurity risk management a fundamental strategic line to identify and assess the risks associated with the Bank’s information assets. For this reason, the Bank has a Technology Risk Management Area responsible for defining, executing and updating its strategy in line with the objectives and priorities defined in the Information Security and Cybersecurity Policy and the Strategic Cybersecurity Plan.
The Technology Risk Management Area has guidelines integrated into the overall Bank’s risk management process to ensure the execution of risk assessment processes as described below:
| ● | Project Assessment: This process refers to the identification and assessment of risk scenarios arising from new technological changes to be implemented in response to specific business needs (e.g., regulatory changes, system upgrades or implementation of functionalities associated with the Bank's new products). |
| ● | Suppliers Assessment: This process seeks to ensure cybersecurity in the Bank’s supply chain, through risk analysis and controls prior to and during the implementation of outsourced services. The scope of this process considers all current suppliers and those in the process of providing services to the Bank. |
| ● | Asset Assessment: This process consists of assessing the risk level based on threats, vulnerabilities and sensitivity associated with each technology and information asset owned by the Bank. In turn, the asset assessment process allows us to integrate specific information into the evaluation of the processes, projects, and suppliers. |
| ● | Process Assessment: This process enables a comprehensive identification of technology, information security and cybersecurity risks associated with the Bank’s business processes. |
| ● | Red Team Testing: This process consists of an independent technical security test with the objective of identifying and evaluating vulnerabilities, testing hypotheses, techniques, tactics, and procedures (TTP) of a cyber-attack to improve security processes and configurations within the Bank. |
| ● | Phishing Simulation Testing: This process refers to the performance of testing exercises across the Bank in order to evaluate the Bank´s awareness plan, in order to continue learning about malicious emails that may expose the Bank to cybersecurity threats. |
In 2024, we added the following two:
| ● | Vulnerability management: This process assesses and determines the technical vulnerabilities that could affect the Bank, prioritizing them according to their potential impact, as well as ongoing monitoring and verifying the effectiveness of its mitigation. |
| ● | Cyber Intelligence: This process consists of identifying the threat landscape in which the Bank could be exposed. It is supported by the automation of internal and external threat sources and intelligence feeds. |
Furthermore, since 2021 we have engaged an independent third-party provider, which conducts an annual assessment of the Bank’s cybersecurity capabilities and their alignment with the best practices used by banks worldwide.
The Bank considers all information resulting from technology risk management, essential for the risk management process and the control of losses that could occur from operational and cybersecurity incidents. Part of this integration is carried out through executive sessions and aspects mentioned in the governance area.
Although our business strategy, results of operations or financial condition have not been materially affected by cybersecurity incidents during the last five years. We understand that the cybersecurity risks have been increasing, especially as infiltrating technology continues to become increasingly sophisticated, and while we have implemented several procedures, as described above, we must remain vigilant and alert to such risks and keep our systems and procedures updated to the most recent trends.
For further information about the potential cybersecurity risks of the Bank and how they could affect the Company, see “Item 3. Key Information—Risk Factors—Risks Related to Our Business and Industry—Cybersecurity events could negatively affect our reputation or results of operations and may result in litigation,” and “Item 3. Key Information—Risk Factors—Risks Related to Our Business and Industry—The use of AI, machine learning and data-driven models and adoption of new technologies may increase our exposure to operational, regulatory, legal, reputational, and financial risks, which could adversely affect our business, results of operations, and financial condition.”
Governance
The Bank’s governance procedures for technology, information security and cybersecurity risks involve a set of practices and strategies designed to identify, assess, manage and monitor such risks.
To achieve this goal, the Technology Risk Management Area has established a governance framework through the development of a set of regulations, guidelines and methodologies for its management in different scopes of the business including processes, projects, supply chain, and technology changes, among others. This basis provides the Bank with a standardized and clear view of the way in which risks are identified, assessed and monitored and, in turn, allows external parties to gain an initial insight into the Bank's general governance framework and to associate it with Area’s lines of work.
The results of technology risk management are firstly presented to the Bank’s senior management through the Higher Operational Risk Committee. This committee is composed by the chairman of the board, directors and alternate directors. According to its bylaws, this committee also includes the Chief Executive Officer and the managers of the Corporate Risk; the Marketing, Technology, and Digital; the Cybersecurity; and the Commercial Division; and Global Control Area. This committee shares and promotes improvements in risk management with a multidisciplinary view and through collaborative work. See “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management” for further information on the background of the managers from those divisions.
In parallel, the Bank’s Board of Directors engages in cybersecurity decision-making through the higher operational risk committee, in which the technology risk management area consolidates and presents the information and results of the risk assessments, monitoring and management for a specific and accumulated timeframe. This committee meets monthly or in extraordinary sessions that may be convened on short notice.
PART III
Item 17 Financial Statements
Not applicable.
Item 18 Financial Statements
Our audited consolidated financial statements are included in this annual report beginning at page F-1. Our financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the IASB.
Item 19 Exhibits
LIST OF EXHIBITS
| * | Filed herewith. |
Omitted from the exhibits filed with this annual report are certain instruments and agreements with respect to our long-term debt, none of which authorizes securities in a total amount that exceeds 10% of our total assets. We hereby agree to furnish to the SEC copies of any such omitted instruments or agreements as the SEC requests.
SIGNATURE
The registrant, Banco de Chile, hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
Date: April 30, 2026
| BANCO DE CHILE | |||
| By | /s/ Eduardo Ebensperger O. | ||
| Name: | Eduardo Ebensperger O. | ||
| Title: | Chief Executive Officer | ||
Consolidated Financial Statements
BANCO DE CHILE AND SUBSIDIARIES
December 31, 2025 and 2024
| Ch$ or CLP | = | Chilean pesos |
| MCh$ | = | Millions of Chilean pesos |
| US$ or USD | = | U.S. dollars |
| ThUS$ | = | Thousands of U.S. dollars |
| EUR | = | Euro |
| JPY | = | Japanese yen |
| MXN | = | Mexican pesos |
| HKD | = | Hong Kong dollars |
| CHF | = | Swiss franc |
| PEN | = | Peruvian sol |
| AUD | = | Australian dollar |
| NOK | = | Norwegian krone |
| 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 month’s inflation rate). |
F-
Index
F-
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Banco de Chile:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statement of financial position of Banco de Chile and subsidiaries (the Bank) as of December 31, 2025, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for the year ended December 31, 2025 and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Bank as of December 31, 2025, and the results of its operations and its cash flows for the year then ended, in conformity with International Financial Reporting Standards Accounting Standards issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Bank’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated April 29, 2026, expressed an unqualified opinion on the effectiveness of the Bank’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Bank’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Bank in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
| ©KPMG Auditores Consultores Limitada, a Chilean limited liability company (sociedad de responsabilidad limitada) and a member firm of the KPMG global organization of independent members firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. | Santiago Av. Presidente Riesco 5685, piso 15, Las Condes |
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Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Allowance for expected credit losses for loans on collectively assessed consumer loans and individually assessed commercial loans
As described in Note 2 (i) (viii) and 11 in the consolidated financial statements, the Bank calculates its allowance for expected credit losses (ECL) on loans in accordance with International Financial Reporting Standard 9 (IFRS 9). The collectively assessed ECL estimate reflects a probability-weighted outcome of expected credit losses across base, upside and downside economic scenarios. Key parameters include probability of default (PD), loss given default (LGD), and exposure at default (EAD), each based on historical performance, borrower characteristics and macroeconomic factors. For individually assessed loans, the Bank applies a three-stage impairment model based on whether there has been a significant increase in credit risk, using both quantitative and qualitative criteria, including credit risk ratings. As of December 31, 2025, the Bank recorded Ch$342,025 million on collectively assessed consumer loans and Ch$128,442 million of ECL on individually assessed commercial loans.
We identified the assessment of the allowance for expected credit losses on the collectively assessed consumer loans and individually assessed commercial loans as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was required in the assessment due to significant measurement uncertainty. This included our assessment of the consumer loan collective ECL methodology, the parameter models used to estimate ECL and their significant assumptions. Such significant assumptions included the selection of macroeconomic factors and scenarios used in the PD, LGD and EAD parameter models. This also included our assessment of the commercial loan individually assessed ECL methodology and the credit risk ratings. In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the allowance for expected credit losses on loans process. This included controls over:
| ● | the development, validation and performance monitoring of the PD, LGD and EAD parameter models |
| ● | the selection of forward-looking macroeconomic factors, scenario selection and probability-weighting |
| ● | credit risk ratings of individually evaluated commercial loans |
| ● | management’s review and approval of significant assumptions and model outputs. |
©KPMG Auditores Consultores Limitada, a Chilean limited liability company (sociedad de responsabilidad limitada) and a member firm of the KPMG global organization of independent members firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
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We evaluated the Bank’s process to develop the allowance for expected credit losses by testing certain sources of data, assumptions and parameters that the Bank used and considered the relevance and reliability of such data. In addition, we involved credit risk and economics professionals with specialized skills and knowledge, who assisted in:
| ● | evaluating the Banks’s collective ECL methodology for compliance with IFRS 9 and the Bank’s policies |
| ● | assessing the conceptual soundness and performance of the ECL models by inspecting the model documentation to determine whether the model is suitable for its intended use |
| ● | assessing whether PD, LGD and EAD methodologies are consistent with IFRS 9 and the Bank’s policies |
| ● | evaluating the macroeconomic factors, and scenario selection to the Bank’s business environment and relevant industry practice |
| ● | testing credit risk ratings for a selection of individually evaluated commercial loans |
| ● | independently recalculating ECL amounts for individually assessed commercial loans portfolios and collectively assessed consumer loans portfolios. |
We also assessed the sufficiency of the audit evidence obtained related to the allowance for expected credit losses for collectively assessed consumer loans and individually assessed commercial loans by evaluating the:
| ● | cumulative results of the audit procedures |
| ● | qualitative aspects of the Bank’s accounting practices |
| ● | potential bias in the accounting estimates. |
| /s/ KPMG | |
| KPMG Auditores Consultores Ltda. | |
| We have served as the Bank’s auditor since 2025. |
Santiago, Chile
April 29, 2026
©KPMG Auditores Consultores Limitada, a Chilean limited liability company (sociedad de responsabilidad limitada) and a member firm of the KPMG global organization of independent members firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
F-
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Banco de Chile:
Opinion on Internal Control Over Financial Reporting
We have audited Banco de Chile and subsidiaries’ (the Bank) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control –Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Bank maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of financial position of the Bank as of December 31, 2025, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for the year ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated April 29, 2026, expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Bank’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Bank’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Bank in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for
our opinion.
| ©KPMG Auditores Consultores Limitada, a Chilean limited liability company (sociedad de responsabilidad limitada) and a member firm of the KPMG global organization of independent members firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. | Santiago Av. Presidente Riesco 5685, piso 15, Las Condes |
F-
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
| /s/ KPMG | |
| KPMG Auditores Consultores Ltda. |
Santiago, Chile
April 29, 2026
©KPMG Auditores Consultores Limitada, a Chilean limited liability company (sociedad de responsabilidad limitada) and a member firm of the KPMG global organization of independent members firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
F-
 |
EY Chile Gertrudis Echeñique 152, Piso 9, Las Condes, Santiago |
Tel: +56 (2) 2676 1000 www.eychile.cl |
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Banco de Chile
Opinion on the Financial Statements
We have audited the accompanying consolidated statement of financial position of Banco de Chile and subsidiaries (the “Bank”) as of December 31, 2024, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements“). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Bank at December 31, 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
These financial statements are the responsibility of the Bank‘s management. Our responsibility is to express an opinion on the Bank‘s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Bank in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ EY Audit Ltda.
We served as the Bank’s auditor from 2002 to 2024.
Santiago, Chile
April 24, 2025
F-
BANCO DE CHILE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of December 31, 2025 and 2024
(Expressed in millions of Chilean pesos unless otherwise specified)
| 2025 | 2024 | |||||||||
| ASSETS | Note | MCh$ | MCh$ | |||||||
| Cash and deposits in banks | 7 | 2,590,986 | 2,699,076 | |||||||
| Transactions in the course of collection | 7 | 414,419 | 372,456 | |||||||
| Financial assets held for trading at fair value through profit or loss: | ||||||||||
| Derivative financial instruments | 8 | 1,870,640 | 2,303,353 | |||||||
| Debt financial instruments | 8 | 3,121,702 | 1,714,381 | |||||||
| Others | 8 | 402,259 | 411,689 | |||||||
| Financial assets at fair value through other comprehensive income: | ||||||||||
| Debt financial instruments | 9 | 3,548,971 | 2,088,345 | |||||||
| Equity instruments | 9 | 11,232 | 9,492 | |||||||
| Derivative financial instruments for hedging purposes | 10 | 29,714 | 73,959 | |||||||
| Financial assets at amortized cost: | ||||||||||
| Rights by resale agreements | 11 | 100,643 | 87,291 | |||||||
| Debt financial instruments | 11 | 460,937 | 944,074 | |||||||
| Loans to Banks | 11 | 398,028 | 665,715 | |||||||
| Commercial loans | 11 | 19,296,206 | 19,893,412 | |||||||
| Residential mortgage loans | 11 | 13,896,790 | 13,197,695 | |||||||
| Consumer loans | 11 | 5,349,315 | 5,151,755 | |||||||
| Investments in other companies | 12 | 75,828 | 67,277 | |||||||
| Intangible assets | 13 | 207,988 | 191,966 | |||||||
| Property and equipment | 14 | 179,414 | 189,073 | |||||||
| Right-of-use assets | 15 | 79,245 | 96,879 | |||||||
| Current tax assets | 16 | 1,846 | 159,869 | |||||||
| Deferred tax assets | 16 | 331,831 | 322,221 | |||||||
| Other assets | 17 | 1,696,031 | 1,373,541 | |||||||
| Non-current assets and disposal groups held for sale | 18 | 40,583 | 42,023 | |||||||
| TOTAL ASSETS | 54,104,608 | 52,055,542 | ||||||||
The accompanying notes 1 to 47 are an integral part of these consolidated financial statements
F-
BANCO DE CHILE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of December 31, 2025 and 2024
(Expressed in millions of Chilean pesos unless otherwise specified)
| 2025 | 2024 | |||||||||
| LIABILITIES | Note | MCh$ | MCh$ | |||||||
| Transactions in the course of payments | 7 | 564,172 | 283,605 | |||||||
| Financial liabilities held for trading at fair value through profit or loss: | ||||||||||
| Derivative financial instruments | 19 | 2,079,465 | 2,444,721 | |||||||
| Others | 19 | 512 | 990 | |||||||
| Derivative financial instruments for hedging purposes | 10 | 297,817 | 141,040 | |||||||
| Financial liabilities at amortized cost: | ||||||||||
| Current accounts and other demand deposits | 20 | 14,791,870 | 14,630,797 | |||||||
| Time deposits and saving accounts | 20 | 14,162,408 | 14,345,223 | |||||||
| Obligations by repurchase agreements | 20 | 286,915 | 109,794 | |||||||
| Borrowings from financial institutions | 20 | 1,296,751 | 1,103,468 | |||||||
| Debt financial instruments issued | 20 | 10,800,851 | 9,690,069 | |||||||
| Other financial obligations | 20 | 367,323 | 284,479 | |||||||
| Lease liabilities | 15 | 74,343 | 91,429 | |||||||
| Regulatory capital financial instruments | 21 | 1,087,093 | 1,068,879 | |||||||
| Provision for dividends | 22 | 357,679 | 362,218 | |||||||
| Provisions for contingent loan credit risk | 23 | 85,707 | 87,485 | |||||||
| Other provisions | 24 | 40,395 | 43,120 | |||||||
| Current tax liabilities | 16 | 33,809 | 132 | |||||||
| Deferred tax liabilities | 16 | 1,422 | 166 | |||||||
| Employee benefits | 25 | 140,153 | 151,633 | |||||||
| Other liabilities | 26 | 948,076 | 711,398 | |||||||
| TOTAL LIABILITIES | 47,416,761 | 45,550,646 | ||||||||
| EQUITY | ||||||||||
| Capital | 27 | 2,418,833 | 2,418,833 | |||||||
| Reserves | 27 | 1,381,954 | 1,338,954 | |||||||
| Accumulated other comprehensive income | 27 | (9,759 | ) | 3,777 | ||||||
| Retained earnings: | ||||||||||
| Retained earnings from previous years | 27 | 2,069,084 | 1,857,072 | |||||||
| Income for the year | 27 | 1,185,413 | 1,248,476 | |||||||
| Less: Provision for dividends | 27 | (357,679 | ) | (362,218 | ) | |||||
| Bank’s Shareholders | 27 | 6,687,846 | 6,504,894 | |||||||
| Non-controlling interests | 27 | 1 | 2 | |||||||
| TOTAL EQUITY | 6,687,847 | 6,504,896 | ||||||||
| TOTAL LIABILITIES AND EQUITY | 54,104,608 | 52,055,542 | ||||||||
The accompanying notes 1 to 47 are an integral part of these consolidated financial statements
F-
BANCO DE CHILE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the years ended December 31, 2025, 2024 and 2023
(Expressed in millions of Chilean pesos unless otherwise specified)
| 2025 | 2024 | 2023 | ||||||||||||
| Note | MCh$ | MCh$ | MCh$ | |||||||||||
| Interest and Inflation indexation revenue | 29 | 3,409,584 | 3,771,059 | 4,044,665 | ||||||||||
| Interest and Inflation indexation expense | 29 | (1,339,502 | ) | (1,608,304 | ) | (2,123,873 | ) | |||||||
| Net interest and Inflation indexation income | 2,070,082 | 2,162,755 | 1,920,792 | |||||||||||
| Fee and commission income | 30 | 774,154 | 717,347 | 703,134 | ||||||||||
| Fee and commission expense | 30 | (153,451 | ) | (161,039 | ) | (168,450 | ) | |||||||
| Net fee and commission income | 620,703 | 556,308 | 534,684 | |||||||||||
| Net financial result | 31 | 272,314 | 280,480 | 469,553 | ||||||||||
| Income from investments in other companies | 32 | 11,983 | 16,655 | 13,409 | ||||||||||
| Income (expense) from non-current assets and disposal groups held for sale not admissible as discontinued operations | 33 | 6,042 | (458 | ) | 2,807 | |||||||||
| Other operating income | 34 | 48,477 | 51,777 | 72,939 | ||||||||||
| TOTAL OPERATING INCOME, BEFORE EXPECTED CREDIT LOSSES | 3,029,601 | 3,067,517 | 3,014,184 | |||||||||||
| Expected credit losses | 39 | (394,862 | ) | (352,706 | ) | (201,944 | ) | |||||||
| TOTAL OPERATING INCOME, NET OF EXPECTED CREDIT LOSSES | 2,634,739 | 2,714,811 | 2,812,240 | |||||||||||
| Personnel expenses | 35 | (570,355 | ) | (582,547 | ) | (582,684 | ) | |||||||
| Administrative expenses | 36 | (429,633 | ) | (416,696 | ) | (403,255 | ) | |||||||
| Depreciation and amortization | 37 | (95,110 | ) | (94,601 | ) | (92,308 | ) | |||||||
| Impairment of non-financial assets | 38 | (1,882 | ) | (2,851 | ) | (1,762 | ) | |||||||
| Other operating expenses | 34 | (33,958 | ) | (36,039 | ) | (36,090 | ) | |||||||
| TOTAL OPERATING EXPENSES | (1,130,938 | ) | (1,132,734 | ) | (1,116,099 | ) | ||||||||
| NET OPERATING INCOME, BEFORE INCOME TAX | 1,503,801 | 1,582,077 | 1,696,141 | |||||||||||
| Income tax | 16 | (318,388 | ) | (333,601 | ) | (322,114 | ) | |||||||
| NET INCOME FOR THE YEAR | 1,185,413 | 1,248,476 | 1,374,027 | |||||||||||
| Attributable to: | ||||||||||||||
| Bank’s Shareholders | 27 | 1,185,413 | 1,248,476 | 1,374,026 | ||||||||||
| Non-controlling interests | 1 | |||||||||||||
| Earnings per share: | Ch$ | Ch$ | Ch$ | |||||||||||
| Basic earnings | 27 | 11.73 | 12.36 | 13.60 | ||||||||||
| Diluted earnings | 27 | 11.73 | 12.36 | 13.60 | ||||||||||
The accompanying notes 1 to 47 are an integral part of these consolidated financial statements
F-
BANCO DE CHILE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the years ended December 31, 2025, 2024 and 2023
(Expressed in millions of Chilean pesos unless otherwise specified)
| 2025 | 2024 | 2023 | ||||||||||||
| Note | MCh$ | MCh$ | MCh$ | |||||||||||
| NET INCOME FOR THE YEAR | 1,185,413 | 1,248,476 | 1,374,027 | |||||||||||
| ITEMS THAT WILL NOT BE RECLASSIFIED TO PROFIT OR LOSS | ||||||||||||||
| Re-measurement of the liability (asset) for net defined benefits and actuarial results for other employee benefit plans | 27 | (62 | ) | 115 | (75 | ) | ||||||||
| Fair value changes of equity instruments designated as at FVTOCI | 27 | (148 | ) | (212 | ) | 5,367 | ||||||||
| OTHER COMPREHENSIVE INCOME THAT WILL NOT BE RECLASSIFIED TO PROFIT OR LOSS BEFORE TAX | (210 | ) | (97 | ) | 5,292 | |||||||||
| Income tax on other comprehensive income that will not be reclassified to profit or loss | (448 | ) | 893 | (1,429 | ) | |||||||||
| TOTAL OTHER COMPREHENSIVE INCOME THAT WILL NOT BE RECLASSIFIED TO INCOME AFTER TAXES | (658 | ) | 796 | 3,863 | ||||||||||
| ITEMS THAT CAN BE RECLASSIFIED TO PROFIT OR LOSS | ||||||||||||||
| Fair value changes of financial assets at FVTOCI | 27 | 8,806 | (4,664 | ) | 8,874 | |||||||||
| Cash flow hedges | 27 | (28,341 | ) | (21,798 | ) | 113,183 | ||||||||
| Participation in other comprehensive income of entities registered under the equity method | 27 | (59 | ) | 26 | 116 | |||||||||
| OTHER COMPREHENSIVE INCOME THAT WILL BE RECLASSIFIED TO INCOME BEFORE TAXES | (19,594 | ) | (26,436 | ) | 122,173 | |||||||||
| Income tax on other comprehensive income that can be reclassified in profit or loss | 27 | 6,716 | 5,175 | (32,365 | ) | |||||||||
| TOTAL OTHER COMPREHENSIVE INCOME THAT WILL BE RECLASSIFIED TO PROFIT OR LOSS AFTER TAX | (12,878 | ) | (21,261 | ) | 89,808 | |||||||||
| TOTAL OTHER COMPREHENSIVE INCOME FOR THE YEAR | 27 | (13,536 | ) | (20,465 | ) | 93,671 | ||||||||
| COMPREHENSIVE INCOME FOR THE YEAR | 1,171,877 | 1,228,011 | 1,467,698 | |||||||||||
| Attributable to: | ||||||||||||||
| Bank’s Shareholders | 1,171,877 | 1,228,011 | 1,467,696 | |||||||||||
| Non-controlling interests | 2 | |||||||||||||
The accompanying notes 1 to 47 are an integral part of these consolidated financial statements
F-
BANCO DE CHILE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
for the years ended December 31, 2025, 2024 and 2023
(Expressed in millions of Chilean pesos unless otherwise specified)
| Attributable to Bank’s Shareholders | ||||||||||||||||||||||||||||||||
| Capital | Reserves (*) | Accumulated other comprehensive income |
Retained
earnings from previous years and income (loss) for the year |
Total | Non- controlling interests |
Total equity | ||||||||||||||||||||||||||
| Note | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Opening balance as of January 1, 2023 | 2,418,833 | 1,172,196 | (69,429 | ) | 1,909,835 | 5,431,435 | 2 | 5,431,437 | ||||||||||||||||||||||||
| Dividends distributed and paid | 27 | — | — | — | (866,929 | ) | (866,929 | ) | (1 | ) | (866,930 | ) | ||||||||||||||||||||
| Other retention (release) earnings | — | 36,366 | — | (36,366 | ) | — | — | — | ||||||||||||||||||||||||
| Application of provision for payment of common stock dividends | — | — | — | 422,830 | 422,830 | — | 422,830 | |||||||||||||||||||||||||
| Provision for payment of common stock dividends | 27 | — | — | — | (373,090 | ) | (373,090 | ) | — | (373,090 | ) | |||||||||||||||||||||
| Subtotal: transactions with owners during the year | — | 36,366 | — | (853,555 | ) | (817,189 | ) | (1 | ) | (817,190 | ) | |||||||||||||||||||||
| Net income for the year 2023 | — | — | — | 1,374,026 | 1,374,026 | 1 | 1,374,027 | |||||||||||||||||||||||||
| Other comprehensive income for the year | 27 | — | — | 93,671 | — | 93,671 | — | 93,671 | ||||||||||||||||||||||||
| Subtotal: Comprehensive income for the year | — | — | 93,671 | 1,374,026 | 1,467,697 | 1 | 1,467,698 | |||||||||||||||||||||||||
| Balances as of December 31, 2023 | 2,418,833 | 1,208,562 | 24,242 | 2,430,306 | 6,081,943 | 2 | 6,081,945 | |||||||||||||||||||||||||
| Opening balance as of January 1, 2024 | 2,418,833 | 1,208,562 | 24,242 | 2,430,306 | 6,081,943 | 2 | 6,081,945 | |||||||||||||||||||||||||
| Dividends distributed and paid | 27 | — | — | — | (815,932 | ) | (815,932 | ) | — | (815,932 | ) | |||||||||||||||||||||
| Other retention (release) earnings | — | 130,392 | — | (130,392 | ) | — | — | — | ||||||||||||||||||||||||
| Application of provision for payment of common stock dividends | — | — | — | 373,090 | 373,090 | — | 373,090 | |||||||||||||||||||||||||
| Provision for payment of common stock dividends | 27 | — | — | — | (362,218 | ) | (362,218 | ) | — | (362,218 | ) | |||||||||||||||||||||
| Subtotal: transactions with owners during the year | — | 130,392 | — | (935,452 | ) | (805,060 | ) | — | (805,060 | ) | ||||||||||||||||||||||
| Net income for the year 2024 | — | — | — | 1,248,476 | 1,248,476 | — | 1,248,476 | |||||||||||||||||||||||||
| Other comprehensive income for the year | 27 | — | — | (20,465 | ) | — | (20,465 | ) | — | (20,465 | ) | |||||||||||||||||||||
| Subtotal: Comprehensive income for the year | — | — | (20,465 | ) | 1,248,476 | 1,228,011 | — | 1,228,011 | ||||||||||||||||||||||||
| Balances as of December 31, 2024 | 2,418,833 | 1,338,954 | 3,777 | 2,743,330 | 6,504,894 | 2 | 6,504,896 | |||||||||||||||||||||||||
| Opening balance as of January 1, 2025 | 2,418,833 | 1,338,954 | 3,777 | 2,743,330 | 6,504,894 | 2 | 6,504,896 | |||||||||||||||||||||||||
| Dividends distributed and paid | 27 | — | — | — | (995,380 | ) | (995,380 | ) | (1 | ) | (995,381 | ) | ||||||||||||||||||||
| Other retention (release) earnings | — | 41,084 | — | (41,084 | ) | — | — | — | ||||||||||||||||||||||||
| Application of provision for payment of common stock dividends | — | — | — | 362,218 | 362,218 | — | 362,218 | |||||||||||||||||||||||||
| Provision for payment of common stock dividends | 27 | — | — | — | (357,679 | ) | (357,679 | ) | — | (357,679 | ) | |||||||||||||||||||||
| Subtotal: transactions with owners during the year | — | 41,084 | — | (1,031,925 | ) | (990,841 | ) | (1 | ) | (990,842 | ) | |||||||||||||||||||||
| Net income for the year 2025 | — | — | — | 1,185,413 | 1,185,413 | — | 1,185,413 | |||||||||||||||||||||||||
| Other comprehensive income for the year | 27 | — | 1,916 | (13,536 | ) | — | (11,620 | ) | — | (11,620 | ) | |||||||||||||||||||||
| Subtotal: Comprehensive income for the year | — | 1,916 | (13,536 | ) | 1,185,413 | 1,173,793 | — | 1,173,793 | ||||||||||||||||||||||||
| Balances as of December 31, 2025 | 2,418,833 | 1,381,954 | (9,759 | ) | 2,896,818 | 6,687,846 | 1 | 6,687,847 | ||||||||||||||||||||||||
| (*) | Includes share premium of MCh$1,705 for placements of shares. |
The accompanying notes 1 to 47 are an integral part of these consolidated financial statements
F-
BANCO DE CHILE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended December 31, 2025, 2024 and 2023
(Expressed in millions of Chilean pesos unless otherwise specified)
| 2025 | 2024 | 2023 | ||||||||||||
| Note | MCh$ | MCh$ | MCh$ | |||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||
| Net operating income, before income tax | 1,503,801 | 1,582,077 | 1,696,141 | |||||||||||
| Income tax | 16 | (318,388 | ) | (333,601 | ) | (322,114 | ) | |||||||
| Net income for the year | 1,185,413 | 1,248,476 | 1,374,027 | |||||||||||
| Debit (credits) to profit or (loss) that do not represent movements in cash flows: | ||||||||||||||
| Depreciation and amortization | 37 | 95,110 | 94,601 | 92,308 | ||||||||||
| Impairment of non-financial assets | 38 | 1,882 | 2,851 | 1,762 | ||||||||||
| Allowances established for credit risk | 39 | 462,123 | 421,210 | 321,829 | ||||||||||
| Provisions for contingent loans | 39 | (290 | ) | (4,200 | ) | (53,875 | ) | |||||||
| Impairments for credit risk from financial assets at FVTOCI | 39 | 4,412 | 1,009 | (2,754 | ) | |||||||||
| Fair value of debt financial instruments held for trading at FVTPL | (5,183 | ) | (1,712 | ) | 2,318 | |||||||||
| Change in deferred tax assets and liabilities | 16 | (9,721 | ) | (1,482 | ) | 44,545 | ||||||||
| Net gain from investments in associates and joint ventures | 32 | (11,983 | ) | (8,730 | ) | (13,409 | ) | |||||||
| Net gain on sale of assets received in payments | 33 | (2,153 | ) | (2,361 | ) | (1,358 | ) | |||||||
| Net gain on sale of sale of property and equipment | 33 | (6,685 | ) | (938 | ) | (2,971 | ) | |||||||
| Write-off of assets received in lieu of payment or foreclosed at judicial auction | 33 | 225 | 1,187 | 485 | ||||||||||
| Net change in exchange rates, interest, indexation and fees accrued on assets and liabilities | 478,831 | 553,399 | 203,529 | |||||||||||
| Other debits (credits) that do not represent movements in cash flows | 25,089 | (6,458 | ) | (60,160 | ) | |||||||||
| Changes due to (increases) decreases in operating assets and liabilities: | ||||||||||||||
| Net decrease (increase) in loans to banks | 263,618 | 1,853,194 | (340,369 | ) | ||||||||||
| Net (increase) in loans to customers | (767,847 | ) | (1,535,662 | ) | (913,796 | ) | ||||||||
| Net decrease (increase) in debt financial instruments held for trading at FVTPL | (1,396,929 | ) | 1,627,801 | (55,256 | ) | |||||||||
| Net (increase) decrease in other assets and liabilities | 249,197 | (287,129 | ) | (53,404 | ) | |||||||||
| Increase (decrease) in deposits and other demand deposits | 237,018 | 942,650 | (59,946 | ) | ||||||||||
| (Decrease) increase in repurchase agreements | 179,653 | (55,184 | ) | (59,972 | ) | |||||||||
| (Decrease) increase in deposits and other term deposits | (182,985 | ) | (1,167,941 | ) | 1,288,027 | |||||||||
| Sale of assets received in lieu of payment | 27,280 | 19,556 | 14,227 | |||||||||||
| Total net cash from operating activities | 826,075 | 3,694,137 | 1,725,787 | |||||||||||
| CASH FLOW FROM INVESTING ACTIVITIES: | ||||||||||||||
| Net decrease (increase) in debt financial instruments at FVTOCI | (1,473,436 | ) | 1,611,197 | 257,613 | ||||||||||
| Net decrease (increase) in debt financial instruments at amortized cost | 380,108 | 506,337 | (493,631 | ) | ||||||||||
| Payment of principal and interest for obligations under lease contracts | 15 | (30,897 | ) | (29,991 | ) | (32,084 | ) | |||||||
| Leasehold improvements | 15 | (765 | ) | (872 | ) | (1,993 | ) | |||||||
| Property and equipment purchase | 14 | (17,937 | ) | (16,354 | ) | (24,751 | ) | |||||||
| Property and equipment sale | 9,065 | 1,294 | 3,626 | |||||||||||
| Acquisition of intangibles | 13 | (58,597 | ) | (57,617 | ) | (59,955 | ) | |||||||
| Sale of investments in companies | 11,791 | |||||||||||||
| Dividend received of investments in companies | 12 | 3,374 | 3,019 | 4,675 | ||||||||||
| Total net cash (used in) from investing activities | (1,189,085 | ) | 2,028,804 | (346,500 | ) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||
| Attributable to the interest of the owners: | ||||||||||||||
| Redemption and payment of interest on mortgage finance bonds of credit | (350 | ) | (639 | ) | (1,012 | ) | ||||||||
| Redemption and payment of interest on senior bonds | (1,990,111 | ) | (1,447,751 | ) | (1,813,176 | ) | ||||||||
| Redemption and payment of interest on subordinated bonds | (52,944 | ) | (50,637 | ) | (52,199 | ) | ||||||||
| Issuance of senior bonds | 20 | 2,742,341 | 1,012,638 | 1,224,480 | ||||||||||
| Payment of ordinary share dividends | 27 | (995,380 | ) | (815,932 | ) | (866,929 | ) | |||||||
| Increase (decrease) in obligations with foreign banks | 318,702 | 91,361 | (42,479 | ) | ||||||||||
| Increase (decrease) in other financial obligations | 88,501 | (54,802 | ) | (4,646 | ) | |||||||||
| Payment of obligations to the Central Bank of Chile | (4,348,400 | ) | ||||||||||||
| Payment of other long-term borrowings | (17 | ) | (58 | ) | ||||||||||
| Attributable to non-controlling interest: | ||||||||||||||
| Dividends payment and/or withdrawals of paid-in capital related to of the subsidiaries corresponding to the non-controlling interest | (1 | ) | ||||||||||||
| Total net cash from (used in) financing activities | 110,759 | (5,614,179 | ) | (1,556,020 | ) | |||||||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS FOR THE YEAR | (252,251 | ) | 108,762 | (176,733 | ) | |||||||||
| Effect of exchange rate fluctuations on cash and cash equivalents | (78,110 | ) | 164,743 | 15,637 | ||||||||||
| Cash and cash equivalents at the beginning of the year | 7 | 3,264,537 | 2,991,032 | 3,152,128 | ||||||||||
| Cash and cash equivalents at the end of the year | 7 | 2,934,176 | 3,264,537 | 2,991,032 | ||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Interest operating cash flow: | ||||||||||||
| Interest and indexation received | 3,514,835 | 3,645,741 | 3,542,933 | |||||||||
| Interest and indexation paid | (1,391,336 | ) | (1,570,720 | ) | (1,434,701 | ) | ||||||
The accompanying notes 1 to 47 are an integral part of these consolidated financial statements
F-
BANCO DE CHILE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended December 31, 2025, 2024 and 2023
(Expressed in millions of Chilean pesos unless otherwise specified)
Reconciliation of liabilities arising from financing activities:
| Changes from non-cash flow items | ||||||||||||||||||||||||
| 31.12.2024 | Net Cash Flow |
Acquisition / (Disposals) |
Foreign currency |
UF Movement | 31.12.2025 | |||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||
| Mortgage finance bonds | 850 | (350 | ) | 21 | 521 | |||||||||||||||||||
| Bonds | 10,758,098 | 699,286 | (171,603 | ) | 601,642 | 11,887,423 | ||||||||||||||||||
| Obligations with banks | 1,103,468 | 318,702 | (124,660 | ) | (759 | ) | 1,296,751 | |||||||||||||||||
| Obligations with the Central Bank of Chile | ||||||||||||||||||||||||
| Other financial obligations | 284,479 | 88,501 | (5,657 | ) | 367,323 | |||||||||||||||||||
| Dividends paid | (995,380 | ) | (995,380 | ) | ||||||||||||||||||||
| Dividend payment and/or withdrawals of paid-in capital related to subsidiaries corresponding to the non-controlling interest | ||||||||||||||||||||||||
| Total liabilities from financing activities | 12,146,895 | 110,759 | (301,920 | ) | 600,904 | 12,556,638 | ||||||||||||||||||
| Changes from non-cash flow items | ||||||||||||||||||||||||
| 31.12.2023 | Net Cash Flow |
Acquisition / (Disposals) |
Foreign currency |
UF Movement | 31.12.2024 | |||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||
| Mortgage finance bonds | 1,444 | (639 | ) | 45 | 850 | |||||||||||||||||||
| Bonds | 10,398,435 | (485,750 | ) | 186,418 | 658,995 | 10,758,098 | ||||||||||||||||||
| Obligations with banks | 1,012,134 | 91,361 | (27 | ) | 1,103,468 | |||||||||||||||||||
| Obligations with the Central Bank of Chile | 4,348,581 | (4,348,400 | ) | (181 | ) | |||||||||||||||||||
| Other financial obligations | 339,305 | (54,819 | ) | (7 | ) | 284,479 | ||||||||||||||||||
| Dividends paid | (815,932 | ) | (815,932 | ) | ||||||||||||||||||||
| Dividend payment and/or withdrawals of paid-in capital related to subsidiaries corresponding to the non-controlling interest | ||||||||||||||||||||||||
| Total liabilities from financing activities | 16,099,899 | (5,614,179 | ) | 186,391 | 658,852 | 11,330,963 | ||||||||||||||||||
| Changes from non-cash flow items | ||||||||||||||||||||||||
| 31.12.2022 | Net Cash Flow |
Acquisition / (Disposals) |
Foreign currency |
UF Movement | 31.12.2023 | |||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||
| Mortgage finance bonds | 2,377 | (1,012 | ) | 79 | 1,444 | |||||||||||||||||||
| Bonds | 10,276,475 | (640,895 | ) | 113,061 | 649,794 | 10,398,435 | ||||||||||||||||||
| Obligations with banks | 1,049,155 | (42,479 | ) | 5,458 | 1,012,134 | |||||||||||||||||||
| Obligations with the Central Bank of Chile | 4,348,521 | 60 | 4,348,581 | |||||||||||||||||||||
| Other financial obligations | 344,030 | (4,704 | ) | (21 | ) | 339,305 | ||||||||||||||||||
| Dividends paid | (866,929 | ) | (866,929 | ) | ||||||||||||||||||||
| Dividend payment and/or withdrawals of paid-in capital related to subsidiaries corresponding to the non-controlling interest | (1 | ) | (1 | ) | ||||||||||||||||||||
| Total liabilities from financing activities | 16,020,558 | (1,556,020 | ) | 118,519 | 649,912 | 15,232,969 | ||||||||||||||||||
The accompanying notes 1 to 47 are an integral part of these consolidated financial statements
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 1. | Company Information: |
Banco de Chile (“The Bank”) has been authorized to operate as a commercial bank since September 17, 1996, being, in conformity with the stipulations of Article 25 of Law No. 19,396, the legal successor of Banco de Chile, resulting from the merger of Banco Nacional de Chile, Banco Agrícola, and Banco de Valparaíso, which was incorporated by public deed dated October 28, 1893, executed before the Notary Public of Santiago, Mr. Eduardo Reyes Lavalle, and authorized by Supreme Decree dated November 28, 1893.
The Bank is a Corporation organized under the laws of the Republic of Chile, regulated by the Chilean Commission for the Financial Market (“CMF”). Since 2001, it is subject to the supervision of the Securities and Exchange Commission of the United States of America (“SEC”), in consideration of the fact that the Bank is registered on the New York Stock Exchange (“NYSE”), through a program of American Depositary Receipt (“ADR”).
Banco de Chile offers a broad range of banking services to its customers, ranging from individuals to large corporations. Additionally, the Bank offers international as well as treasury banking services, in addition to those offered by subsidiaries that include securities brokerage, mutual fund and investment management, insurance brokerage and financial advisory services.
Banco de Chile’s registered office is located at Ahumada 251, Santiago, Chile and its website is www.bancochile.cl.
| 2. | Summary of Significant Accounting Policies: |
| (a) | Basis of preparation: |
The Bank’s consolidated financial statements for the years 2025, 2024 and 2023 have been prepared in accordance with International Financial Reporting Standards Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
The Bank presents its statement of financial position broadly in order of liquidity. An analysis regarding recovery or settlement is presented in Note No. 42.
The consolidated financial statements comprise the consolidated statement of comprehensive income and the consolidated statements of financial position, changes in equity, cash flows and the related notes. The consolidated financial statements have been prepared under the historical cost convention, except for financial assets at fair value through other comprehensive income, financial assets held for trading measured at fair value through profit or loss and derivative contracts, which have been measured at fair value.
The consolidated statement of cash flows shows the changes in cash and cash equivalents arising from operating activities, investing activities and financing activities during the period.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (b) | Basis of consolidation: |
The Financial Statements of Banco de Chile as of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023 have been consolidated with those of its subsidiaries. The financial statements of the Bank’s subsidiaries are prepared for the same reporting year as for Banco de Chile, using consistent accounting policies.
| (i) | Subsidiaries |
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 | ||||||||||||||||||||||||||||||
| Functional | Direct | Indirect | Total | |||||||||||||||||||||||||||
| RUT | Subsidiaries | Country | Currency | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||
| % | % | % | % | % | % | |||||||||||||||||||||||||
| 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 | |||||||||||||||||||||
| 96,571,220-8 | Banchile Corredores de Bolsa S.A. | Chile | Ch$ | 99.70 | 99.70 | 0.30 | 0.30 | 100.00 | 100.00 | |||||||||||||||||||||
| 77,955,969-6 | Operadora de Tarjetas Banchile Pagos S.A. (*) | Chile | Ch$ | 99.90 | 99.90 | 0.10 | 0.10 | 100.00 | 100.00 | |||||||||||||||||||||
| 96,645,790-2 | Socofin S.A. (**) | Chile | Ch$ | 99.00 | 1.00 | 100.00 | ||||||||||||||||||||||||
| (*) | On July 29, 2024, the public deed of incorporation of the subsidiary of Banco de Chile was signed and on June 24, 2025, the company’s name was changed to Operadora de Tarjetas Banchile Pagos S.A. |
| (**) | On June 17, 2025, the CMF approved, by exempt resolution, the request to absorb and dissolve the subsidiary, which became effective on July 4, 2025. See Note 5 letters (d) and (g) in Relevant Events. |
Intercompany transactions and balances between the Bank and its subsidiaries and among its subsidiaries have been eliminated for consolidation purposes. Any non-controlling interest is recognized as a separate item within the Bank’s consolidated equity.
| (ii) | Investment in Associates and Joint Ventures |
Associates
Associated entities are those over which the Bank has the ability to exercise significant influence, without having control over the associate.
Investments in associates where the entity has significant influence, are accounted for using the equity method.
Joint Ventures
Joint Ventures are joint arrangements whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint control exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.
Investments defined as a “Joint Venture” are recognized using the equity method of accounting.
The investments in other companies that, for its characteristics, is defined as a “joint venture” is Servipag Ltda.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (b) | Basis of consolidation, continued: |
| (iii) | Asset management services investments and mutual funds |
The Bank and its subsidiaries manage and administer assets held in mutual funds and other investment products on behalf of investors, receiving compensation in line with the services provided and in accordance with market conditions. Managed resources are owned by third parties and, therefore, not included in the Consolidated Statements of Financial Position.
In accordance with IFRS 10, for consolidation purposes it is necessary to assess the role of the Bank and its subsidiaries with respect to the funds they manage, to determine whether that role is Agent or Principal.
The Bank and its subsidiaries manage investments and mutual funds on behalf and for the benefit of investors, acting only as an Agent in this relationship. Under this category, and as per the aforementioned rule, these funds are not controlled and therefore not consolidated by the Bank or its subsidiaries.
| (c) | Non-controlling interest: |
Non-controlling interest represents the share of losses, income and net assets that the Bank does not control, either directly or indirectly. It is presented as a separate item in the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Financial Position.
| (d) | Going Concern: |
The Bank’s management has made an assessment of its ability to continue as a going concern and is satisfied that it has the resources to continue in business for the foreseeable future. Furthermore, management is not aware of any material uncertainties that may cast significant doubt upon the Bank’s ability to continue as a going concern. Therefore, the Financial Statements continue to be prepared on the going concern basis.
| (e) | Presentation and functional currency: |
The items included in the Financial Statements of each of the entities of Banco de Chile and its subsidiaries are presented using the currency of the primary economic environment in which it operates (functional currency). The functional currency of Banco de Chile is the Chilean peso, which is also the currency used to present the entity’s consolidated financial statements.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (f) | Foreign currency transactions: |
Transactions in currencies other than the functional currency are considered to be in foreign currency and are initially recorded at the exchange rate of the functional currency on the transaction date. Monetary assets and liabilities denominated in foreign currencies are converted using the exchange rate of the functional currency as of the date of the Statement of Financial Position, for profit or loss the exchange rate corresponding to each month-end is applied. All differences are recorded as a debit or credit to profit or loss
Assets and liabilities in foreign currencies are shown at their equivalent value in Chilean pesos, calculated using the following exchange rates as of December 31, 2025 and 2024: Ch$900.40 and Ch$994.74 to US$1, Ch$5.76 and Ch$6.33 per JPY1, Ch$1,058.78 and Ch$1,032.74 per EUR1.
The amount of Ch$149,834 million corresponds to the net income from exchange, indexation and accounting hedging of foreign currency (net gain of Ch$170,813 million and net gain of Ch$122,189 million as of December 31, 2024 and 2023, respectively) shown in the Consolidated Statements of Income, includes the result of exchange operations, indexation and accounting hedges of foreign currency, including the conversion of assets and liabilities in foreign currency or indexed to exchange rate.
| (g) | Use of estimates and judgment: |
The preparation of Consolidated 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. Actual results could differ from these estimated amounts.
Relevant estimates and assumptions are reviewed regularly by senior management in order to quantify certain assets, liabilities, income, expenses and uncertainties. Revisions to accounting estimates are recognized in the year in which the estimate is revised and for any future period that is affected.
Some accounting matters particularly involve uncertainties and therefore require a considerable degree of estimation and critical judgment when applying accounting policies. Details on the use of estimates and judgment and their effect on the amounts recognized in the Financial Statements are included in the following notes:
| - | Impairment of instruments at fair value through OCI (Notes No. 9 and No. 39) | |
| - | Expected credit losses (Notes No. 11, No. 23 and No. 39) | |
| - | Useful lives of intangible assets, property and equipment and leased assets and lease liabilities and investment properties (Notes No. 13, No. 14 and No. 15) | |
| - | Goodwill valuation (Note No. 13) | |
| - | Deferred taxes and income tax (Note No. 16) | |
| - | Other provisions (Note No. 24) | |
| - | Contingencies and commitments (Note No. 28) | |
| - | Fair value of financial assets and liabilities (Note No. 41) |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (h) | Financial asset and liability valuation criteria: |
Measurement is the process of determining the monetary amounts at which the elements of the Financial Statements are to be recognized and carried in the Consolidated Statement of Financial Position and the Consolidated Statement of Other Comprehensive Income. This involves selecting the particular basis or method of measurement.
These bases or methods include the following:
| (i) | Initial recognition |
The Bank and its subsidiaries recognize loans to customers, trading and investment securities, deposits, debt issued and subordinated liabilities on the date they originated. Purchases and sales of financial assets performed on a regular basis are recognized as of the trade date on which the Bank committed to purchase or sell the asset. All other assets and liabilities (including assets and liabilities at fair value through profit or loss) are initially recognized as of the trade date on which the Bank becomes a party to the contractual provisions of the instrument.
Financial assets or liabilities are initially recognized at fair value plus transaction costs directly attributable to their purchase or issuance, except in the case of financial assets and financial liabilities recorded at fair value through profit or loss (“FVPL”).
| (ii) | Derecognition of financial assets and liabilities |
The Bank and its subsidiaries derecognize a financial asset (or where applicable, part of a financial asset) from its Statement of Financial Position when the contractual rights to the cash flows of the financial asset have expired or when the contractual rights to receive the cash flows of the financial asset are transferred during a transaction in which all ownership risks and rewards of the financial asset are transferred. Any portion of transferred financial assets that is created or retained by the Bank is recognized as a separate asset or liability.
When the Bank transfers a financial asset, it assesses to what extent it has retained the risks and rewards of ownership. In this case:
| (a) | If substantially all risks and rewards of ownership of the financial asset have been transferred, it is derecognized and any rights or obligations created or retained upon transfer are recognized separately as assets or liabilities. |
| (b) | If substantially all risks and rewards of ownership of the financial asset have been retained, the Bank continues to recognize it. |
| (c) | If substantially all risks and rewards of ownership of the financial asset are neither transferred nor retained, the Bank will determine if it has retained control of the financial asset. In this case: |
| (c.i) | If it has not retained control, the financial asset will be derecognized and any rights or obligations created or retained upon transfer will be recognized separately as assets or liabilities. |
| (c.ii) | If the entity has retained control, it will continue to recognize the financial asset to the extent of its continuing involvement in the financial asset. |
A financial liability is derecognized when the obligation under the liability is discharged or canceled or expires.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (h) | Financial asset and liability valuation criteria, continued: |
If an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of the existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in the income statement.
| (iii) | Offsetting |
Financial assets and liabilities are offset and the net amount is reported in the Statement of Financial Position if, and only if, the Bank has the legally enforceable right to set off the recognized amounts and there is an intention to settle on a net basis or to realize an asset and settle the liability simultaneously.
Income and expenses are shown net only if accounting standards allow such treatment, or in the case of gains and losses arising from a group of similar transactions, such as the Bank’s trading activities.
| (iv) | Measurement categories of financial assets and liabilities |
The Bank classifies all of its financial assets based on the business model for managing these assets and each asset’s contractual terms, measured at either amortized cost, fair value through other comprehensive income (FVOCI) or fair value through profit or loss (FVPL).
The Bank classifies and measures its trading portfolio at FVPL as explained in Note No. 2 (i) (ii). The Bank may designate financial instruments at FVPL, if such designation eliminates or significantly reduces measurement or recognition inconsistencies.
Financial liabilities, other than loan commitments and financial guarantees, are measured at amortized cost or at FVPL when they are held for trading and derivative instruments or the fair value designation is applied.
Fair value measurements
The fair value of a financial instrument is the price that would be received to sell an asset or that would be paid to transfer a liability in an orderly transaction between participants in a main market (or more advantageous) at the measurement date under current market conditions, regardless of whether that price is directly observable or estimated using another valuation technique. The most objective and common fair value is the price that you would pay on an active, transparent and deep market (“quoted price” or “market price”).
When available, the Bank estimates the fair value of an instrument using quoted prices in an active market for that instrument. A market is considered active if quoted prices are readily and regularly available and represent actual and regularly occurring market transactions on an arm’s length basis.
If a market for a financial instrument is not active, the Bank establishes fair value using a valuation technique. These valuation techniques include the use of recent market transactions between interested and duly informed parties that act in mutual independence conditions, if available, as well as references to the fair value of other instruments that are substantially the same, discounted cash flows (“DCF”) and options pricing models.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (h) | Financial asset and liability valuation criteria, continued: |
The chosen valuation technique uses the maximum observable market data, relies as little as possible on estimates performed by the Bank, incorporates factors that market participants would consider in setting a price and is consistent with accepted economic methodologies for pricing financial instruments. Inputs into the valuation technique reasonably represent market expectations and include risk and return factors that are inherent in the financial instrument. Periodically, the Bank calibrates the valuation techniques and tests them for validity using prices from observable current market transactions in the same instrument or based on any available observable market data.
The best evidence of the fair value of a financial instrument at initial recognition is the transaction price (i.e., the fair value of the consideration given or received) unless the fair value of that instrument is evidenced by a comparison with other observable current market transactions in the same instrument (i.e., without modification or repackaging) or based on a valuation technique whose variables include only data from observable markets.
When the transaction price provides the best evidence of fair value at initial recognition, the financial instrument is initially measured at the transaction price and any difference between this price and the value initially obtained from a valuation model is subsequently recognized in profit and loss, and/or comprehensive income.
Fair value estimates obtained from models are adjusted for any other factors, such as model uncertainties, to the extent that the Bank believes that a third-party market participant would take them into account in pricing a transaction.
The Bank’s fair value disclosures are included in Note No. 41.
| (i) | Financial assets and liabilities per financial statement line items: |
| (i) | Loans to Banks, loans to customers and other financial assets at amortized cost |
The Bank measure loans to Banks, loans to customers and other financial assets at amortized cost as long as the following conditions are met:
| - | The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows from them. |
| - | The contractual terms of the financial asset give rise on specified dates on which cash flows are to be received and such cash flows are solely payments of principal and interest (“SPPI”) on the principal amount outstanding. |
For classification process, the Bank performs the SPPI test, which assesses the contractual terms of the financial asset to identify whether they meet the SPPI criterion.
“Principal” for the purpose of this test is defined as the fair value of the financial asset at initial recognition and may change over the life of the financial asset (for example, if there are repayments of principal or amortization of the premium/discount).
The most significant elements of interest within a lending arrangement are typically the consideration for the time value of money and credit risk. To make the SPPI assessment, the Bank applies judgement and considers relevant factors, such as the currency in which the financial asset is denominated, and the period for which the interest rate is set.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (i) | Financial asset and liability per financial statement line items, continued: |
In contrast, contractual terms that introduce a more than the minimis exposure to risks or volatility in the contractual cash flows that are unrelated to a basic lending arrangement do not give rise to contractual cash flows that are solely payments of principal and interest on the amount outstanding. In such cases, the financial asset is required to be measured at FVPL.
| (ii) | Financial assets designated at fair value through profit or loss |
Financial assets designated at fair value through profit or loss are securities acquired in order to generate profits from short-term price fluctuations or as a result of brokerage activities, or which are part of a portfolio on which a short-term profit-generating pattern exists. This item includes mainly Central Bank bonds and deposits from domestic banks and mutual fund investments.
Financial assets designated at fair value through profit or loss are stated at their fair value. Accrued interest, gains or losses from their fair market value adjustments, as well as gains or losses from trading activities, are included in “Net Financial Result” in the Consolidated Statement of Income. Dividends, interest and indexations are reported as “Net financial operating income” in the Consolidated Statement of Income.
All purchases and sales of financial assets designated at fair value through profit or loss that must be executed within the period established by market regulations or conventions are recorded using the trade date, which is the date on which the purchase or sale of the asset is committed. Any other purchase or sale is treated as a derivative (forward) until settlement occurs.
| (iii) | Financial assets at FVOCI |
| (iii.1) | Debt instruments at FVOCI |
The Bank applies the new category under IFRS 9 of debt instruments measured through FVOCI when both of the following conditions are met:
| - | The instrument is held within a business model whose, objective is to collect contractual cash flows and sell financial assets. | |
| - | The contractual terms of the financial asset meet the SPPI test. |
FVOCI debt instruments are measured at fair value with gains and losses arising due to changes in fair value are recognized in Other Comprehensive Income (“OCI”). Interest income and foreign exchange gains and losses are recognized in profit or loss. The Expected Credit Losses (“ECL”), which are measured and recorded pursuant to the IFRS 9 adoption, recorded for debt instruments measured at FVOCI does not reduce the carrying amounts of these financial assets, as these remain at fair value in the statement of financial position, but instead, an amount equal to the allowance that would result from the impairment is recognized in OCI, with a corresponding charge to profit or loss. The accumulated loss recognized in OCI is recycled to profit or loss upon derecognition of the asset.
Where the Bank holds more than one investment in the same security, they are deemed to be disposed of on a first–in first–out basis. On derecognition, cumulative gains or losses previously recognized in OCI are reclassified from OCI to profit or loss.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (i) | Financial asset and liability per financial statement line items, continued: |
| (iii.2) | Equity instruments at FVOCI |
Upon initial recognition, the Bank occasionally elects to classify irrevocably some of its equity investments as equity instruments at FVOCI when they meet the definition of Equity under IAS 32 “Financial Instruments: Presentation” and are not held for trading. Such classification is determined on an instrument-by instrument basis.
Gains and losses on these equity instruments are never recycled to profit or loss. Dividends are recognized in profit or loss as other operating income. Equity instruments at FVOCI are not subject to an impairment assessment.
| (iv) | Rights and Obligations by repurchase agreements: |
The Bank carries out operations by repurchase agreements as a form of investment. The securities purchased under these agreements are not recognized on the Bank’s Consolidated Statement of Financial Position. The consideration paid is recognized under “Rights by resale agreements” reflecting the transaction’s economic substance as a loan granted by the Bank. The difference between the purchase and the resale price is recorded in “Net interest income” and is accrued over the duration of the agreement using its effective interest rate. This treatment reflects the economic substance as a loan to the Bank.
The Bank also carries out operations under repurchase agreements as a form of financing. The securities sold under a repurchase agreement at a specific date in the future are not derecognized from the Consolidated Statement of Financial Position because the Bank retains all the risks and rewards of the ownership of the securities. The corresponding cash received is recognized in the balance sheet as an asset, and the corresponding obligation to return the cash, including any accrued interest, is recognized as a liability under “Obligations by repurchase agreements”. The difference between the sale and the repurchase price is treated as “Net interest expense” and is accrued over the duration of the agreement using the effective interest rate.
| (v) | Lease contracts |
Accounts receivable relating to leasing contracts, included under the caption “Loans to customers”, correspond to periodic rent installments of contracts, which meet the definition to be classified as financial leases and are presented at their nominal value net of unearned interest as of each year-end.
| (vi) | Factoring transactions |
Factoring transactions are valued based on the discounted cash flow of the assets received in the transaction. Typically, these assets include invoices or other commercial instruments representative of credit, with or without responsibility of the grantor. Price differences between the amounts disbursed and the nominal value of the credits are recorded in the Consolidated Statements of Income as interest income, through the effective interest method, during the financing period.
In those cases, where the transfer of these instruments was made without responsibility of the grantor, it is the Bank who assumes the insolvency risks of those required to pay.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (i) | Financial asset and liability per financial statement line items, continued: |
| (vii) | Financial guarantees: |
In its ordinary course of business, the Bank gives financial guarantees consisting of letters of credit, guarantees and acceptances. Financial guarantees are initially recognized in the Financial Statements at fair value being the premium received. Subsequent to initial recognition, the Bank’s liability is measured at the higher of the amount originally recognized less, when appropriate, cumulative amortization recognized in the income statement and the best estimate of expenditure required settling the financial obligation arising as the result of the guarantee. The premium received is recognized in the income statement in “Income from Fees and Commissions” on a straight-line basis over the guarantee period.
| (viii) | Allowance for expected credit loss: |
(viii.1) Overview of the principles of Expected Credit Loss (“ECL”)
The Bank records an allowance for expected credit loss for all loans and other debt financial assets not held at FVPL, together with loan commitments and financial guarantee contracts, all referred to as “financial instruments”. Equity instruments are not subject to impairment under IFRS 9.
In this context, and specifically within the scope of the impairment methodology required by IFRS 9, the following key elements are identified:
| ● | Estimate of expected loss based on a scenario analysis. |
| ● | Calculation based on three stages, each as described below. |
| ● | Forward looking analysis of macroeconomic factors and their impact in risk parameters, such as Gross Domestic Product (“GDP”) growth, unemployment rates and Central Banks interest rates. |
(viii.2) Expected Credit Loss (“ECL”)
The expected credit loss reflects an unbiased probability-weighted range of possible economic outcomes. This is achieved by generating three economic scenarios: base, upside and downside.
IFRS 9 requires that a provision be recognized since the date a loan is originated based on its expected credit loss.
IFRS 9 proposes to calculate the expected credit loss based on a staging allocation process that considers three main buckets:
| Stage 1: | No significant increase in risk |
Financial assets whose credit quality has not significantly deteriorated since initial recognition. Twelve months expected losses are recognized. This stage also includes those credits which have been reclassified from stage 2.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (i) | Financial asset and liability per financial statement line items, continued: |
| Stage 2: | With a significant increase in risk |
Financial assets that experienced a significant increase in credit risk since initial recognition, but that do not have objective evidence of impairment are allocated stage 2 operations and are provisioned considering the financial instrument expected life (lifetime); for the discount of the expected losses, the effective rate at the time of origination is used, calculated on the gross amount in the Bank’s books. This stage also includes those credits which have been reclassified from stage 3.
| Stage 3: | Objective impairment evidence |
Financial assets that have objective evidence of impairment at the reporting date are allocated to stage 3, the expected credit losses will consider a lifetime approach. The cash flows discount rate used for this stage corresponds to that of the effective interest rate (“EIR”) applied at the origination of the credit.
| POCI: | Purchased or Originated Credit Impaired |
Purchased or originated credit impaired (“POCI”) assets are financial assets that are credit impaired on initial recognition. POCI assets are recorded at fair value at original recognition and interest income is subsequently recognized based on a credit-adjusted EIR. ECLs are only recognized or released to the extent that there is a subsequent change in their expected credit losses.
The classification of the assets is of special relevance due to the different time horizons considered in the calculation of the provision for customers classified in stage 1 and those classified in stage 2 or 3.
The definition of significant risk increase (“SRI”) plays a key role since the amount of provision depends on the interpretation of this concept.
Individual classified loans
An individual analysis of debtors is applied to individuals and companies that are of such significance considering size, complexity or level of exposure to the Bank, and they must be analyzed in detail.
The Bank classifies the debtors and their operations related to loans into one of three categories of loan portfolio: Normal, Substandard and Non-performing Loans. This internal rating considers the quantitative variables used to determine the SRI in order to establish the appropriate provisions.
| i. | Normal Loans: |
Normal loans correspond to borrowers who are up to date on their payment obligations and no sign of impairment in their credit quality are shown. This situation is reflected in the internal rating that varies from A1 to A6. All exposures rated from A1 to A6 are allocated to stage 1. Exposures rated from A1-A3 downgraded to A5 or exposures rated A1-A4 downgraded to A6 in a 12-month period are allocated to stage 2.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (i) | Financial asset and liability per financial statement line items, continued: |
| ii. | Substandard Loans: |
Substandard loans include all borrowers with a significant increase in risk and insufficient payment capacity or significant deterioration of payment capacity that it may be reasonably expected that they will not comply with all principal and interest payments obligations set forth in the credit agreement.
This category also includes all loans that are more than 30 days past due.
This situation is reflected in the internal rating that considers four classifications from B1 to B4. All exposures rated at these levels are as allocated to stage 2.
| iii. | Non-performing Loans: |
Non-performing loans correspond to borrowers whose payment capacity is seriously at risk and who have a high likelihood of filing for bankruptcy or are renegotiating credit terms to avoid bankruptcy. This category comprises all loans outstanding from debtors for which payments are more than 90 days past due.
This situation is reflected in the internal rating that varies from C1 to C6. All obligors rated at these levels are classified as stage 3.
Group classified loans
The group analysis is used to analyze a large number of loans whose individual amounts are homogenous and not significant. For this analysis, the Bank uses models based on attributes of the debtors and their loans, and on the behavior of a group of loans. The categories used to classify the debtors correspond to “Normal loans” and “Non-performing loans”.
Loans to customers include originated and purchased non-derivative financial assets with fixed or determinable payments that are not quoted on an active market and which the Bank does not intend to sell immediately or in the short-term.
(viii.3) Significant increase in credit risk (“SICR”) (quantitative criteria):
Significant increase in credit risk is determined on a quantitative and qualitative manner.
Wholesale exposures: an exposure will be considered to have a significant increase in credit risk if any of the following are true:
| - | Clients rated from A1-A3 downgraded to A5 in a 12-month period | |
| - | Clients rated from A1-A4 downgraded to A6 in a 12-month period | |
| - | Any of the client’s obligations are past due 60 days or more. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (i) | Financial asset and liability per financial statement line items, continued: |
Retail exposures: an exposure will be considered to have a significant increase in credit risk if any of the following are true:
| - | The exposure is past due 30 days or more. |
Based on changes in Lifetime Probability of Default (“LPD”). A loan is impaired whenever LPD at calculation date is significantly greater than LPD estimated at the loan origination date. In order to estimate current LPD, macroeconomic factors and their projections are taken into account. The exposure shows an increase in its default risk, quantitatively defined as follows:
| - | LPD at date – LPD origination > Average LPD | |
| - | The client has negative behavior records (delinquency over 60 days, default (considering a 4-month probation period) or written off balances at the public bureau (reporting entities only, banks under supervision of the local regulator). |
(viii.4) Default events
In addition to the quantitative criteria described in the previous section, other aspects are considered as indicators of SRI, for which the following entry conditions to the different stages are considered:
A default event is due whenever payments are more than 90 days past due or for a forbearance of a loan that is more than 60 days past due.
Default events are partially identified on a borrower basis: a default event in any exposure triggers a default across any other exposure except for residential mortgages. Instead, residential mortgages do trigger a default event on every other exposure.
In these cases, loans are classified as stage 3.
(viii.5) Probation period
Probation period is aligned with local statutory accounting; therefore it should accomplish the following criteria:
| - | No obligation of the debtor shows a delay in its payment of more than 30 calendar days. | |
| - | Have not been granted new refinancing to pay the obligations. | |
| - | At least one of the payments made includes capital amortization. | |
| - | If the debtor has some credit with partial payments in periods of less than six months, at least two payments have been made. | |
| - | If the debtor must pay monthly instalments for one or more credits, at least four consecutive instalments have been paid. | |
| - | All debtor obligations across the Chilean financial system are current, except for insignificant amounts. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (i) | Financial asset and liability per financial statement line items, continued: |
(viii.6) The ECL calculation
The Bank calculates the ECL based on probability-weighted scenarios to measure the expected credit losses discounted at its effective interest rate (“EIR”). Losses are defined as the difference between the cash flows expected to be received by the Bank versus the contractual cash flows.
For the calculation of the ECL, the following key parameters should be considered:
| ● | Probability of Default (“PD”) |
The PD provides the likelihood that a borrower will not be able to meet debt obligations within a certain period. Point in time estimates are used. Depending on the stage on which the exposure is classified, the time horizon may vary from one year (for stage 1) to lifetime (for stage 2). Naturally, stage 3 exposures carry a PD = 1.
| ● | Exposure at Default (“EAD”) and Credit Conversion Factor (“CCF”) |
The EAD parameter represents an estimate of the amount of loss the bank may face in the event of the borrower’s default. This exposure can be either an asset or a contingent exposure. The latter includes unused limits on revolving facilities such as credit cards, lines of credit, Letters of Credit, etc.; in such cases unused limits are weighted by their CCF, which is an estimate of further utilization before default time.
| ● | Loss Given Default (“LGD”) |
The LGD parameter is defined as the likely loss intensity in case of a borrower’s default. It provides an estimation of the exposure that cannot be recovered in a default event and therefore captures the severity of a loss. It is expressed as a percentage of the EAD. Inflows (payments) and outflows are considered in calculating LGD.
The estimation of the ECL loss parameters, including probability of default (PD), loss given default (LGD) and exposure at default (EAD), is based on the Bank’s historical performance and observed credit behavior, adjusted to reflect current conditions and forward-looking macroeconomic information under multiple economic scenarios.
| (ix) | Loans write-off |
Criteria under which loans are written-off when collection efforts have been exhausted, but not later than the following maximum periods:
| Type of Contract | Term | |
| Consumer loans – secured and unsecured | 6 months | |
| Other transactions – unsecured | 24 months | |
| Commercial loans – secured | 36 months | |
| Residential mortgage loans | 48 months | |
| Consumer leases | 6 months | |
| Other non-real estate lease transactions | 12 months | |
| Real estate leases (commercial or residential) | 36 months |
The term represents the time elapsed by a loan from the date on which the unpaid collection or portion is in default.
Cash recoveries on written-off loans are recorded directly through the income statement.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (i) | Financial asset and liability per financial statement line items, continued: |
| (x) | Renegotiated loans: |
The Bank attempts to restructure loans rather than to take possession of collateral when economically convenient. This may involve extending the payment arrangements and the agreement of new loan conditions. After having renegotiated contractual terms, any impairment is measured using the original effective interest rate as calculated before the modification of terms and the loan is no longer considered past due. Forbearances are continuously reviewed by management to ensure that all criteria are met and that future payments are likely to occur. The loans continue to be subject to an individual or collective impairment assessment, calculated using the loan’s original effective interest rate.
| (xi) | Modified loans: |
When the contractual cash flows of a debt financial instrument are renegotiated or modified, the Bank distinguishes the modifications that originate in financial difficulties of the debtor, from those that are of a commercial nature.
| ● | Contractual modifications due to financial difficulties of the debtor: These occur when the Bank modifies the contractual conditions originally agreed so that the debtor can comply with its payment obligations. When the modification is substantial, it is recorded as a derecognition and the new loan is valued at fair value, and when the modification is not substantial, the loan is not derecognized, and its amortized cost must be adjusted based on the difference between the book value before the modification and the present value of the flows of the modified operation using the effective interest rate (EIR) of the original credit. |
| ● | Contractual modifications for other commercial reasons: These operations normally respond to general market situations at the time of the modification. Such modifications are treated as a total or partial cancellation of the original operation and the recording of a new operation at fair value. |
| (xii) | Collateral valuation: |
The Bank seeks to use collateral, where possible, to mitigate its risks on financial assets. The collateral comes in various forms such as mortgages, pledges, securities, other non-financial assets and credit enhancements. The fair value of collateral is generally assessed, at a minimum, at inception through a certified appraiser, considering factors such as location, collateral type, and observable market value, among others. Additionally, the settlement costs, the time required to sell off the assets and the potential adverse market conditions are considered as well. However, some types of collateral, such as securities, are valued daily. To the extent possible, the Bank uses active market data for valuing financial assets held as collateral. (See Note No. 44 for further analysis of collateral).
For impairment of loans estimates, Collateral is not accounted as an EAD mitigation factor, but as an LGD driver instead.
| (j) | Financial and operating leases: |
The determination of whether an arrangement is a lease, or it contains a lease, is based on the substance of the arrangement and requires an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (j) | Financial and operating leases, continued: |
| (i) | The Bank acting as lessor |
Assets leased to customers under agreements which transfer substantially all the risks and rewards of ownership, with or without ultimate legal title, are classified as financial leases. When assets held are subject to a financial lease, the leased assets are derecognized and a receivable is recognized which is equal to the present value of the minimum lease payments, discounted at the interest rate implicit in the lease. Initial direct costs incurred in negotiating and arranging a financial lease are incorporated into the receivable through the discount rate applied to the lease. Financial lease income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the financial lease.
Assets leased to customers under agreements which do not transfer substantially all the risks and rewards of ownership are classified as operating leases. The leased assets are included within premises and equipment on the Group’s statement of financial position and depreciation is provided on the depreciable amount of these assets on a systematic basis over their estimated useful economic lives. Rental income is recognized on a straight-line basis over the period of the lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as an expense on a straight-line basis over the lease term.
| (ii) | The Bank acting as lessee |
A contract is, or contains a lease, if one party has the right to control the use of an identified asset for a period of time in exchange for a regular payment. On the start date of a lease, a right-to-use assets leased is determined at cost, which includes the amount of the initial measurement of the lease liability plus other disbursements made. The amount of the lease liability is measured at the present value of future lease payments that have not been paid on that date, which are discounted using the Bank’s incremental financing interest rate.
The right-of-use asset is measured using the cost model, less accumulated depreciation and accumulated losses due to impairment of value, depreciation of the right-of-use asset, is recognized in the Income Statement based on the linear depreciation method from the start date and until the end of the lease term.
After the start date, the lease liability is measured by decreasing the carrying amount to reflect the lease payments made and the modifications to the lease.
According to IFRS 16 “Leases” the bank does not apply this rule to contracts whose duration are 12 months or less and those that contain an underlying asset of low value. In these cases, payments are recognized as a lease expense.
| (k) | Interest and Inflation indexation revenue/expense: |
Interest and Inflation indexation revenue/expense are recognized in the Consolidated Statement of Income using the effective interest rate method. The effective interest rate is the rate which exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument (or a shorter period) where appropriate, to the carrying amount of the financial asset or financial liability. To calculate the effective interest rate, the Bank determines cash flows by taking into account all contractual conditions of the financial instrument, excluding future credit losses.
The effective interest rate calculation includes all fees and other amounts paid or received that form part of the effective interest rate. Transaction costs include incremental costs that are directly attributable to the purchase or issuance of a financial asset or liability.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (l) | Fee and commission income and expense: |
Income and expenses from commissions are recognized in the Consolidated Income Statement using the criteria established in IFRS 15 “Revenue from contracts with customers”.
Under IFRS 15, revenues are recognized considering the terms of the contract with customers. Revenue is recognized when, or as the performance obligation is satisfied by transferring the goods or services committed to the customer.
Under IFRS 15, revenues are recognized using different criteria depending on their nature. The most significant are:
| − | Those that correspond to a singular act, when the act that originates them takes place. | |
| − | Those that originate in transactions or services that are extended over time, during the life of such transactions or services. | |
| − | Commissions on loan commitments and other fees related to loan transactions are deferred (together with the incremental costs directly related to the placement) and recognized as an adjustment to the effective interest rate of the placement. For loan commitments, when there is no certainty of the date of effective placement, fees and commissions are recognized in the period of the commitment that originates it on a straight-line basis. |
The fee and commission income corresponds mainly to:
| − | Commissions for loan prepayment: These commissions are accrued at the time the loans are prepaid. | |
| − | Commissions for lines of credit and overdrafts: These commissions are accrued in the period related to the granting of lines of credit and overdrafts in current accounts. | |
| − | Commissions for guarantee and letters of credit: These commissions are accrued in the period related to the granting by the Bank of payment guarantees for real or contingent obligations of third parties. | |
| − | Commissions for card services: Correspond to commissions accrued for the period, related to the use of credit cards, debit cards and other. | |
| − | Commissions for account management: Includes commissions that accrue in the period related to the maintenance of current accounts and other deposit accounts. | |
| − | Commissions for collections and payments: Includes commissions generated by the collection and payment services provided by the Bank. |
| − | Commissions for intermediation and management of securities: correspond to income from brokerage service, placements, administration and custody of securities. | |
| − | Remuneration for management of mutual funds, investment funds or others: corresponds to the commissions from the General Fund Administrator for the administration of third-party funds. | |
| − | Remuneration for brokerage and insurance consulting services: includes income from brokerage and insurance advice by the Bank or its subsidiaries is included. | |
| − | Commissions for factoring operations services: includes commissions for factoring operations services performed by the Bank. | |
| − | Commissions for financial consulting services: includes commissions for financial advisory services performed by the Bank and its subsidiary. | |
| − | Other commissions received: includes income generated from foreign currency exchange, issuance bank guarantees, issuance of bank check, use of distribution channels, agreement on the use of a brand and placement of financial products and cash transfers, and recognition of payments associated with commercial alliances, among others. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (l) | Fee and commission income and expense, continued: |
Fee and commission expenses include:
| − | Commissions for card operations: includes commissions paid for credit and debit card operations. | |
| − | Commissions for licensing the use of card brands. | |
| − | Expenses for obligations of loyalty and merits programs for card customers. | |
| − | Commissions for operations with securities: includes commissions for deposit and custody of securities and brokerage of securities. | |
| − | Other commissions for services received: includes commissions for guarantees and sureties of Bank obligations, for foreign trade operations, for correspondent banks in the country and abroad, for ATMs and electronic fund transfer services. | |
| − | Commissions for compensation of large value payments: corresponds to commissions paid to entities such as ComBanc, CCLV Contraparte Central, etc. |
| (m) | Property and equipment: |
Property and equipment is stated at cost excluding servicing cost, less accumulated depreciation and accumulated impairment. Changes in the expected useful life are accounted for by changing the depreciation period or method, as appropriate, and treated as changes in accounting estimates.
This cost includes expenses that have been directly attributed to the asset’s acquisition.
Depreciation is recognized the Consolidated Statements of Income on a straight-line basis over the estimated useful lives of each part of an item of property and equipment.
Estimated useful lives for 2025 and 2024 are as follows:
| Buildings | 50 years | |
| Installations (in general) | 10 years | |
| Equipment | 5 years | |
| Furniture | 5 years |
Property and equipment is derecognized on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognized in “Impairments” in the income statement in the year the asset is derecognized.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (n) | Intangible assets: |
Intangible assets (Note 13) are initially recognized at their acquisition cost and are subsequently measured at their cost less any accumulated amortization or less any accumulated impairment loss.
| (i) | Goodwill |
Goodwill arises on the acquisition of subsidiaries and associates representing the excess of the fair value of the purchase consideration over the net fair value of the Bank’s share of the identifiable assets acquired and the liabilities and contingent liabilities assumed on the date of the acquisition.
For the purpose of calculating goodwill, fair values of acquired assets, liabilities and contingent liabilities are determined by reference to market values or by discounting expected future cash flows to present value. This discounting is either performed using market rates or by using risk-free rates and risk-adjusted expected future cash flows.
Goodwill originating from the acquisition of subsidiaries is capitalized and reviewed for impairment annually or more frequently if there are indications that impairment may have occurred. Impairment is determined by comparing the present value of expected future cash flows from each cash generating unit with the carrying value of its net assets, including attributable goodwill. Goodwill is allocated to cash generating units for the purpose of impairment testing considering the business level at which goodwill is monitored for internal management purposes.
Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
| (ii) | Software and computer programs |
Software or computer programs purchased by the Bank and its subsidiaries are accounted for at cost less accumulated amortization and impairment losses.
The subsequent expense in software assets is capitalized only when it increases the future economic benefit for the specific asset. All other expenses are recorded as an expense as incurred.
Amortization is recognized in profit or loss on the straight-line amortization method based considering the estimated useful lives of the software, from the date on which they are available for use. The estimated useful life of software is a maximum of 6 years.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (o) | Deferred taxes and income tax: |
The income tax provision of the Bank and its subsidiaries has been determined in conformity with current legal provisions.
The Bank and its subsidiaries recognize, when appropriate, deferred tax assets and liabilities for future estimates of tax effects attributable to temporary differences between the book and tax values of assets and liabilities. Deferred tax assets and liabilities are measured based on the tax rate expected to be applied, in accordance with current tax law, in the year that deferred tax assets are realized or liabilities are settled. The effects of future changes in tax legislation or tax rates are recognized in deferred taxes starting on the date of publication of the law approving such changes.
Deferred tax assets and liabilities are recorded at their book value as of the date the deferred taxes are measured. Deferred tax assets are recognized only when it is likely that future tax profits will be sufficient to recover deductions for temporary differences.
| (p) | Debt issued and other financial liabilities: |
Financial instruments issued by the Bank are classified under “Debt issued”, where the substance of the contractual arrangement results in the Bank having an obligation either to deliver cash or another financial asset to the holder, or to satisfy the obligation other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of equity shares.
After initial measurement, debt issued is subsequently measured at amortized cost using the effective interest rate. Amortized cost is calculated by taking into account any discount or premium on the issue and costs that are an integral part of the effective interest rate.
The Bank applies the same accounting policies for its other financial liabilities.
| (q) | Derivative instruments: |
A “Derivative instrument” is a financial instrument whose value changes in response to changes in an observable market variable (such as an interest rate, exchange rate, the price of a financial instrument or a market index, including credit ratings), whose initial investment is very small in relation to other financial instruments with a similar response to changes in market conditions and which is generally settled at a future date.
Derivative instruments, which include foreign currency and UF forwards, interest rate forwards, currency and interest rate swaps, currency and interest rate options and other financial derivative instruments, are recorded in the Statement of Financial Position at fair value regardless of whether they are held-for-trading or for non-trading purposes.
The fair value is obtained from market quotes, DCF models and options valuation models, as and where applicable. Derivative contracts are reported as an asset when their fair value is positive and as a liability when negative under the item “Derivative Instruments”.
At inception, a derivative contract must be designated by the Bank as a derivative instrument for trading or hedging purposes.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (q) | Derivative instruments, continued: |
Changes in the fair value of derivative contracts held for trading purposes are recorded in “Net financial operating income”, in the Consolidated Statement of Income.
If a derivative instrument is classified as a hedging instrument, it can be:
| (1) | A hedge of the fair value of existing assets or liabilities or firm commitments, or | |
| (2) | A hedge of cash flows related to existing assets or liabilities or forecasted transactions. |
A hedge relationship for hedge accounting purposes must comply with all of the following conditions:
| (a) | at its inception, the hedge relationship has been formally documented; | |
| (b) | it is expected that the hedge will be highly effective; | |
| (c) | the effectiveness of the hedge can be measured in a reasonable manner; and | |
| (d) | the hedge is highly effective with respect to the hedged risk on an ongoing basis and throughout the entire hedge relationship. |
The Bank has chosen to continue applying the hedge accounting requirements of IAS 39 when adopting IFRS 9.
Certain derivatives transactions that do not qualify for hedge accounting are treated and reported as derivatives for trading purposes even though they provide an effective hedge on the risk of net positions.
Changes in the fair value of derivative contracts that qualify for hedge accounting are recorded, as follows:
| ● | If derivative contracts qualify for hedge accounting of changes in the fair value of assets, liabilities or unrecognized firm commitments (Fair Value Hedge), changes in the fair value of both the hedged asset (or liability) and the hedging derivative are recognized in the income statement under “Interest and Inflation indexation revenue and expenses” and/or “Exchange, indexation and accounting hedging of foreign currency”, depending on the risk being hedged. On the other hand, any ineffective portion of the Fair Value Hedge is recognized in the income statement under “Net Financial Operating Income”. |
| ● | If derivative contracts qualify for hedge accounting of the variability of future cash flows from highly probable future transactions and/or floating rate assets or liabilities (Cash Flow Hedge), the changes in fair value are recorded in Equity under “Other Comprehensive Income”, to the extent that the hedge is effective. Changes in the fair value of the Cash Flow Hedge are subsequently reclassified to the income statement when and where the hedged item affects the Bank’s results (e.g. to Interest and Inflation indexation revenue and expenses and/or Exchange, indexation and accounting hedging of foreign currency when the hedged instrument affects the income statement because of interest rate risk, or exchange rate risk, respectively). On the other hand, any ineffective portion of the Cash Flow Hedge is recognized in the comprehensive statement of income under the “Net Financial Operating Income” line item. |
| ● | Finally, if the hedging instrument does not continue qualifying for hedge accounting and/or it is terminated, sold, suspended or executed, the hedge accounting is discontinued prospectively. In this case, gains/losses already accrued will remain in Equity until the expected transactions occur. In that moment, gains/losses will be recorded in the Income Statement (under “Interest and Inflation indexation revenue and expenses” and/or “Exchange, indexation and accounting hedging of foreign currency” depending on the risk being hedged) as long as transactions occur. Otherwise, if transactions are expected to fail, the changes in fair value are immediately recognized in the Income Statement (under “Interest and Inflation indexation revenue and expenses” and/or “Exchange, indexation and accounting hedging of foreign currency” depending on the risk that was used to be hedged)”. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (r) | Provisions and contingent liabilities: |
Provisions are liabilities of uncertain timing or amount. Provisions are recorded in the Statement of Financial Position when the following requirements are jointly met:
| (i) | a present obligation has arisen from a past event, |
| (ii) | as of the date of the Financial Statements it is likely that the Bank or its subsidiaries have to disburse resources to settle the obligation and, |
| (iii) | the amount can be reliably measured. |
A contingent asset or liability is any right or obligation that arises from past events whose existence will be confirmed by one or more uncertain future events which are not within the control of the Bank. Contingent assets and liabilities are not recognized in the Statement of Financial Position according to the above mentioned requirements.
Contingent credits are understood as operations or commitments in which the Bank assumes a credit risk by committing itself to third parties, in the event of a future event, to make a payment or disbursement that must be recovered from its clients.
The following items are classified as contingent credits:
| (i) | Undrawn credit lines: Considers the unused amounts of lines of credit that allow customers to make use of credit without prior decisions by the bank. |
| (ii) | Undrawn credit lines with immediate termination: Considers those undrawn credit lines, defined in the previous numeral, that the bank can unconditionally cancel at any time and without prior notice, or for which its automatic cancellation is contemplated in case of deterioration of the debtor’s solvency, as permitted by the current legal framework and the contractual conditions established between the parties. |
| (iii) | Letters of credit for goods circulation operations: Considers the commitments that arise, both to the issuing bank and to the confirming bank, from self-settled commercial letters of credit with a maturity period of less than 1 year, arising from merchandise circulation operations (for example, confirmed foreign or documentary letters of credit). Includes documentary letters of credit issued by the Bank, which have not yet been negotiated. |
| (iv) | Debt purchase commitments in local currency abroad: Note issuance facility (“NIF”) and revolving underwriting facility (“RUF”) are considered. |
| (v) | Transactions related to contingent events: Guarantee bonds with promissory notes. |
| (vi) | Warranty by endorsement and sureties: Includes warranty by endorsement, sureties and standby letters of credit. In addition, it includes the payment guarantees of buyers in factoring operations. |
| (vii) | Other credit commitments: Includes the unplaced amounts of committed credits, which must be disbursed on an agreed future date or processed when the contractually foreseen events occur with the client, as occurs in the case of irrevocable credit lines linked to the progress status of projects. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (s) | Provisions for minimum dividends: |
The Bank records within liabilities the portion of net income for the year that should be distributed to comply with the Corporations Law that requires a minimum distribution of 30% of net income for the period. For these purposes, the Bank establishes a provision in a complementary equity account within retained earnings.
| (t) | Employee benefits: |
| (i) | Staff accrued vacations |
The annual costs of vacations and staff benefits are recognized on an accrual basis.
| (ii) | Other short-term benefits |
The Bank has a yearly bonus plan for its employees based on their ability to meet objectives and their individual contribution to the Company’s results, consisting of a given number or portion of monthly salaries. It is provisioned for based on the estimated amount to be distributed.
| (iii) | Staff severance indemnities |
Banco de Chile has recorded a liability for long-term severance indemnities in accordance with employment contracts it has with certain employees. The liability, which is payable to specified retiring employees with over 30 years of service, is recorded at the present value of the accrued benefits, which are calculated by applying a real discount rate to the benefit accrued as of year-end over the estimated average remaining service period.
Obligations for this defined benefits plan are valued according to the projected unit credit actuarial valuation method, using inputs such as staff turnover rates, expected salary growth in wages and probability that this benefit will be used, discounted at current long-term rates (5.71% as of December 31, 2025 and December 31, 2024).
The discount rate used corresponds to the rate of 10-year Bonds in pesos of the Central Bank of Chile (BCP).
Actuarial gains and losses are recognized as Other Comprehensive Income at the end of each reporting period. There are no past service costs that would have to be recognized by the Bank.
| (u) | Reserves: |
The equity reserves recorded in the Bank’s Statement of Financial Position include:
| i. | Reserves from Earnings: This item includes all the reserves that were originated from earnings and that by legal or statutory dispositions, or agreements of the shareholders’ meeting, will not be distributed in the form of future dividends. |
| ii. | Other reserves: This item includes all the reserves that do not come from earnings and that do not correspond to those indicated in previous items. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 2. | Summary of Significant Accounting Policies, continued: |
| (v) | Earnings per share: |
The basic earnings per share is determined by dividing the net income attributed to the Bank’s owners in a period and the weighted average number of shares outstanding during that period.
Diluted earnings per share are determined similarly to basic earnings, but the weighted average number of outstanding shares is adjusted to take into account the potential dilutive effect of the options on shares, warrants and convertible debt. As of December 31, 2025, 2024 and 2023, there are no dilutive items on basic earnings per share.
| (w) | Cash and cash equivalents: |
The Consolidated Statement of Cash Flows shows the changes in cash and cash equivalents derived from operating activities, investment and financing activities during the year. The indirect method has been used in the preparation of this statement of cash flows.
For the preparation of Consolidated Financial Statements of Cash Flow, the following concepts have been considered:
Cash flows: Inflows and outflows of cash and cash equivalents, such as deposits with the Central Bank of Chile, deposits in domestic banks, and deposits in foreign banks.
| (i) | Operating activities: corresponds to normal activities of the Bank, as well as other activities that cannot classify, like investing or financing activities. | |
| (ii) | Investing activities: correspond to the acquisition, sale or disposition other forms, of long-term assets and other investments that are not included in cash and cash equivalent. | |
| (iii) | Financing activities: corresponds to the activities that produce changes in the amount and composition of the equity and the liabilities that are not included in the operating or investing activities. |
| (x) | Segment reporting: |
The Bank discloses segment information in accordance with IFRS 8. Under IFRS 8, an operating segment is a component of the Bank that engages in business activities from which it may earn revenues and incur expenses (including transactions with other components of the Bank), whose operating results are regularly used by the entity’s Chief Operating Decision Maker (CODM) (the CEO) to allocate resources and assess performance. Based on this definition, the Bank’s operating segments are determined according to its different business units. The Board of Directors reviews internal management reports of those business units at least on monthly basis.
| (y) | Identifying and measuring impairment on non-financial assets |
The Bank assesses at each reporting date and on an ongoing basis whether there is an indication that an asset may be impaired. If any indication exists, or if annual impairment testing for an asset is required, the Bank estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, share prices and other available fair value indicators.
For assets, excluding goodwill, impairment losses recognized in prior years are assessed at each reporting date in case there are any indications that the loss has decreased or disappeared. A previously recognized impairment is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment was recognized. An impairment loss is reversed only to the extent that the book value of the asset does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Such reversal is recognized in the income statement.
Impairment losses relating to goodwill cannot be reversed in future periods.
| (z) | Reclassifications |
No significant reclassifications have been made during the year ended December 31, 2025.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 3. | New and Amended Standards and Interpretations: |
Amendments that resulted from improvements to IFRS to the following standards did not have any significant impact on the accounting policies, financial position or performance of the Bank:
IAS 21 The Effects of Changes in Foreign Exchange Rates.
The IASB issued amendments to IAS 21. These amendments set out criteria that will allow entities to assess whether a currency is exchangeable and when it is not, so that they can determine the exchange rate to be used and the disclosures to be provided.
| 4. | Changes in Accounting policies, Estimates and Disclosures: |
During the year ended December 31, 2025, there have been no material or relative importance changes in accounting that affect the presentation of these Consolidated Financial Statements.
| 5. | Relevant Events: |
| a) | On January 17, 2025, Banco de Chile reported that the Financial Market Commission informed the Bank that it resolved to maintain as a capital requirement for Pillar II risk, the charge already constituted of 0.13% of the risk-weighted assets net of required provisions, in accordance with article 66 quinquies of the General Banking Law. |
| b) | On January 23, 2025, the subsidiary Banchile Corredores de Bolsa reported that the Board of Directors agreed to appoint Mr. José Antonio Díaz Orellana as General Manager of Banchile Corredores de Bolsa S.A., who until that date was the Interim General Manager. |
| c) | On February 11, 2025, the Board of Directors of Banco de Chile agreed to summon an Ordinary Shareholders’ Meeting for March 27, 2025 in order to propose, among other matters, the following distribution of profits for the year ended December 31, 2024: |
| a) | Deduct and withhold from the net income of the year, an amount equivalent to the effect of inflation of the paid-in capital and reserves according to the variation in the Consumer Price Index that occurred between November 2023 and November 2024, amounting to Ch$212,012,307,434 which will be added to retained earnings from previous periods. |
| b) | Distribute in the form of dividend the remaining profit, corresponding to a dividend of Ch$9.85357420889 to each of the 101,017,081,114 shares of the Bank. |
Consequently, a distribution as dividend of 82.4% of the profits for the year ended December 31, 2024 is proposed.
| d) | On April 10, 2025, at a meeting of the Board of Directors of Banco de Chile, the directors agreed, subject to prior authorization from the Financial Market Commission, to absorb the subsidiary Socofin S.A., by acquiring the shares issued by it whose owner is Banchile Asesoría Financiera S.A. and, dissolve Socofin S.A. in accordance with the provisions of section 2 of article 103 of Law 18,046. Likewise, once the dissolution of the aforementioned company occurs, the Bank will be the legal successor of the entity. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 5. | Relevant Events, continued: |
| e) | During 2025, Banco de Chile has reported as an essential event the following placements in the local market of senior, dematerialized and bearer bonds issued by Banco de Chile and registered with the Securities Registry of the Financial Market Commission: |
| Date | Registration number in the Securities Registry |
Serie | Amount | Currency | Maturity date | Average rate | ||||||||||
| March 17, 2025 | 11/2022 | FC | 600,000 | UF | 01/01/2030 | 2.97 | % | |||||||||
| March 20, 2025 | 11/2022 | FC | 300,000 | UF | 01/01/2030 | 2.97 | % | |||||||||
| March 21, 2025 | 11/2022 | FC | 1,050,000 | UF | 01/01/2030 | 2.97 | % | |||||||||
| April 1, 2025 | 11/2022 | FC | 800,000 | UF | 01/01/2030 | 2.96 | % | |||||||||
| April 3, 2025 | 11/2022 | FO | 900,000 | UF | 01/01/2032 | 2.92 | % | |||||||||
| April 15, 2025 | 11/2022 | FH | 850,000 | UF | 12/01/2030 | 2.84 | % | |||||||||
| April 17, 2025 | 11/2022 | GG | 1,000,000 | UF | 05/01/2035 | 3.03 | % | |||||||||
| April 17, 2025 (*) | 20240002 | HD | 2,000,000 | UF | 10/01/2034 | 3.03 | % | |||||||||
| May 7, 2025 | 11/2022 | FH | 300,000 | UF | 12/01/2030 | 2.92 | % | |||||||||
| May 9, 2025 | 11/2022 | GG | 150,000 | UF | 05/01/2035 | 3.03 | % | |||||||||
| May 9, 2025 (*) | 20240002 | HN | 300,000 | UF | 12/01/2039 | 3.06 | % | |||||||||
| May 30, 2025 | 11/2022 | FA | 590,000 | UF | 08/01/2028 | 2.77 | % | |||||||||
| May 30, 2025 | 11/2022 | FH | 250,000 | UF | 12/01/2030 | 3.06 | % | |||||||||
| June 2, 2025 | 11/2022 | FH | 350,000 | UF | 12/01/2030 | 3.06 | % | |||||||||
| June 2, 2025 | 11/2022 | FH | 250,000 | UF | 12/01/2030 | 3.05 | % | |||||||||
| June 3, 2025 | 11/2022 | FH | 226,000 | UF | 12/01/2030 | 3.04 | % | |||||||||
| June 6, 2025 | 11/2022 | FH | 108,000 | UF | 12/01/2030 | 3.04 | % | |||||||||
| June 10, 2025 | 11/2022 | FH | 666,000 | UF | 12/01/2030 | 3.04 | % | |||||||||
| June 10, 2025 | 11/2022 | FO | 500,000 | UF | 01/01/2032 | 3.06 | % | |||||||||
| July 3, 2025 | 11/2022 | GG | 610,000 | UF | 05/01/2035 | 3.15 | % | |||||||||
| July 9, 2025 | 11/2015 | CI | 500,000 | UF | 02/01/2033 | 3.14 | % | |||||||||
| July 10, 2025 | 11/2015 | CG | 1,250,000 | UF | 08/01/2032 | 3.14 | % | |||||||||
| July 10 2025 | 11/2015 | CH | 400,000 | UF | 12/01/2032 | 3.14 | % | |||||||||
| July 10, 2025 | 11/2015 | CI | 150,000 | UF | 02/01/2033 | 3.14 | % | |||||||||
| July 15, 2025 (*) | 20240002 | HW | 1,600,000 | UF | 06/01/2044 | 3.21 | % | |||||||||
| July 17, 2025 | 11/2022 | GB | 225,000 | UF | 09/01/2034 | 3.18 | % | |||||||||
| July 18, 2025 | 11/2022 | GB | 250,000 | UF | 09/01/2034 | 3.16 | % | |||||||||
| July 21, 2025 | 11/2022 | GB | 150,000 | UF | 09/01/2034 | 3.13 | % | |||||||||
| July 22, 2025 | 11/2022 | GB | 500,000 | UF | 09/01/2034 | 3.11 | % | |||||||||
| July 22, 2025 | 11/2022 | GG | 150,000 | UF | 05/01/2035 | 3.11 | % | |||||||||
| July 22, 2025 (*) | 20240002 | HW | 450,000 | UF | 06/01/2044 | 3.19 | % | |||||||||
| August 22, 2025 | 11/2022 | GG | 100,000 | UF | 05/01/2035 | 2.99 | % | |||||||||
| August 27, 2025 (*) | 20240002 | HN | 550,000 | UF | 12/01/2039 | 3.06 | % | |||||||||
| September 4, 2025 | 11/2022 | GG | 400,000 | UF | 05/01/2035 | 3.01 | % | |||||||||
| September 4, 2025 (*) | 20240002 | HW | 200,000 | UF | 06/01/2044 | 3.12 | % | |||||||||
| September 5, 2025 | 11/2022 | GA | 1,000,000 | UF | 05/01/2034 | 3.05 | % | |||||||||
| September 5, 2025 | 11/2022 | GD | 4,000,000 | UF | 01/01/2035 | 3.09 | % | |||||||||
| September 5, 2025 (*) | 20240002 | HI | 5,000,000 | UF | 06/01/2037 | 3.13 | % | |||||||||
| September 11, 2025 | 11/2022 | GA | 800,000 | UF | 05/01/2034 | 2.99 | % | |||||||||
| September 15, 2025 | 11/2022 | GA | 50,000 | UF | 05/01/2034 | 2.99 | % | |||||||||
| September 15, 2025 (*) | 20240002 | HW | 550,000 | UF | 06/01/2044 | 3.12 | % | |||||||||
| September 16, 2025 (*) | 20240002 | HN | 1,000,000 | UF | 12/01/2039 | 3.03 | % | |||||||||
| September 17, 2025 | 11/2022 | FU | 1,650,000 | UF | 11/01/2032 | 2.91 | % | |||||||||
| September 17, 2025 | 11/2022 | GA | 550,000 | UF | 05/01/2034 | 2.99 | % | |||||||||
| September 22, 2025 | 11/2022 | FU | 800,000 | UF | 11/01/2032 | 2.91 | % | |||||||||
| September 22, 2025 | 11/2022 | GA | 150,000 | UF | 05/01/2034 | 2.98 | % | |||||||||
| September 22, 2025 (*) | 20240002 | HH | 2,100,000 | UF | 12/01/2036 | 3.08 | % | |||||||||
| September 23, 2025 (*) | 20240002 | HH | 1,600,000 | UF | 12/01/2036 | 3.07 | % | |||||||||
| September 25, 2025 | 11/2022 | FU | 150,000 | UF | 11/01/2032 | 2.90 | % | |||||||||
| October 28, 2025 | 11/2022 | GA | 650,000 | UF | 05/01/2034 | 2.99 | % | |||||||||
| October 28, 2025 (*) | 20240002 | HW | 150,000 | UF | 06/01/2044 | 3.03 | % | |||||||||
| October 30, 2025 (*) | 20240002 | HW | 300,000 | UF | 06/01/2044 | 3.02 | % | |||||||||
| November 6, 2025 | 11/2022 | FU | 400,000 | UF | 11/01/2032 | 2.89 | % | |||||||||
| (*) | The bonds have been registered under the Automatic Registration modality, with the registration number dated April 5, 2024. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 5. | Relevant Events, continued: |
| f) | During the year 2025 Banco de Chile has reported as an essential event the following placements in the foreign market, issued under its Medium-Term Notes Program (“MTN”): |
| Date | Amount | Currency | Maturity date | Average rate | ||||||
| June 17, 2025 (*) | 100,000,000 | CHF | 07/15/2031 | 1.1875% | ||||||
| June 18, 2025 | 10,000,000,000 | JPY | 06/27/2030 | 1.635% | ||||||
| July 9, 2025 | 1,000,000,000 | MXN | 07/17/2030 | TIIE (28 days) + 1.05% | ||||||
| October 22, 2025 | 70,000,000 | AUD | 10/30/2035 | BBSW3M +1.28% | ||||||
| October 30, 2025 | 620,000,000 | HKD | 11/12/2032 | 3.735% (annual rate) | ||||||
| (*) | This placement has been listed on the Zurich Stock Exchange in Switzerland and is intended to finance or refinance social and environmental projects in accordance with Banco de Chile’s Sustainability Financing Framework. |
| g) | On July 4, 2025, Banco de Chile announced that, by public deed dated June 23, 2025, granted by the Notary of Santiago, Mrs. María Pilar Gutiérrez Rivera, Banco de Chile acquired all the shares held by Banchile Asesoría Financiera S.A. in the company Socofin S.A., a subsidiary of Banco de Chile. In accordance with item 2 of Article 103 of Law No. 18,046 on Corporations, and after an uninterrupted period of more than 10 days, Socofin S.A. has been dissolved because 100% of its shares are held by Banco de Chile, which, beginning on July 4, 2025, becomes its legal successor and continuator. |
| h) | On August 29, 2025, Banco de Chile announced that, together with Citigroup Inc., they have agreed to extend the term of the Cooperation Agreement, the Global Connectivity Agreement, and the Amended and Restated Trademark License Agreement, the first two originally executed on October 22, 2015, and the latter on November 29, 2019. |
Pursuant to this extension, the term of these agreements will run from January 1, 2026, through January 1, 2028. The parties may agree, prior to August 31, 2027, to extend the term for an additional two years starting January 1, 2028. If such agreement is not reached, the contracts will be automatically extended one time only for a period of one year, from January 1, 2028, to January 1, 2029. The same renewal procedure may be used in the future as often as the parties agree.
Additionally, on this same date, Banco de Chile and Citigroup Inc. executed an Amended and Restated Master Services Agreement, agreeing that its term will be the same as that established in the Cooperation Agreement referred to in the previous paragraph.
The Board of Directors of Banco de Chile, in session No. BCH 3,037 held on August 28, 2025, approved the extension and execution of the previously mentioned agreements under the terms set forth in Articles 146 and following of the Chilean Corporations Law.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 5. | Relevant Events, continued: |
| i) | On September 11, 2025, Banco de Chile announced that its Board of Directors resolved to convene an Extraordinary Shareholders’ Meeting to be held on November 10, 2025, at 10:00 a.m., in the Bank’s Auditorium located at Huérfanos Street No. 930, Santiago, for the purpose of addressing the following matters: |
| 1. | Approve amendments to the bank’s bylaws as detailed below: |
| a) | Amend Article Two to maintain the city of Santiago as the corporate domicile and remove the reference to the commune of Santiago. |
| b) | Amend Article Eight to reduce the number of directors from eleven to nine. |
| c) | Amend Article Nine to adjust the minimum quorum required to hold board meetings from six to five regular or alternate directors. |
| d) | Amend Article Ten regarding the convening of extraordinary board meetings. |
| e) | Replace Article Nineteen to incorporate as a permanent provision in the bylaws the possibility of participating and/or voting in shareholders’ meetings through systems and procedures approved by the board, including technological means, without prejudice to holding meetings with in-person attendance. |
| f) | Amend Article Twenty-Three to update its wording regarding the availability of the Annual Report for shareholders and the public. |
| g) | Amend Articles Thirteen, Sixteen, and Twenty-Four to replace references to the Superintendency and the Superintendent of Banks and Financial Institutions with the Financial Market Commission. |
| h) | Eliminate the Third Transitional Article. |
| i) | Remove the Second and Fourth Transitional Articles. |
| j) | Incorporate a new Second Transitional Article providing that, at the next ordinary shareholders’ meeting held after the registration and publication of the certificate issued by the Financial Market Commission regarding the bylaws amendment, nine regular directors shall be elected in accordance with the amendment to Article Eight, and that from such date Article Nine will be applicable as approved by the extraordinary shareholders’ meeting. |
| 2. | Approve a new consolidated text of the bank’s bylaws. |
| 3. | Adopt any other resolutions necessary to implement the bylaws amendment and grant the powers required to execute the resolutions adopted on the matters indicated above. |
Additional information regarding the board’s resolutions and the proposals to be submitted to the shareholders’ meeting on the matters described in items 1 and 2 above is available on the Bank’s website.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 5. | Relevant Events, continued: |
| j) | On November 10, 2025, Banco de Chile reported that at the Extraordinary Shareholders’ Meeting held on the same day, the following was agreed: |
| 1. | Approved the following modifications into the bylaws; |
| a) | Amend Article Two to maintain the city of Santiago as the corporate domicile, removing the current reference to the commune of Santiago. |
| b) | Amend Article Eight to reduce the number of Directors from eleven to nine, while maintaining two alternate directors. |
| c) | Amend Article Nine to adjust the minimum quorum required to constitute Board meetings, reducing it from 6 to 5 regular or alternate directors. |
| d) | Amend Article Ten with respect to the notice requirements for calling extraordinary Board meetings. |
| e) | Amend Article Nineteen to incorporate, as a permanent provision in the Bylaws, the possibility of participating and/or voting in Shareholders’ Meetings through systems and procedures approved by the Board of Directors, including technological means. |
| f) | Amend Article Twenty-Three to update its wording regarding the availability of the Annual Report for shareholders and the general public. |
| g) | Amend Articles Thirteen, Sixteen, and Twenty-Four to replace references to the Superintendency of Banks and Financial Institutions and the Superintendent of Banks and Financial Institutions with the Financial Market Commission. |
| h) | Delete the Third Transitory Article. |
| i) | Eliminate the Second and Fourth Transitory Articles. |
| j) | Incorporate a new Second Transitory Article establishing that, at the next Ordinary Shareholders’ Meeting held after the registration and publication of the certificate issued by the Financial Market Commission regarding the amendment to the Bylaws, nine Regular Directors shall be elected in accordance with the amendment to Article Eight, and that from that date onward, Article Nine of the bylaws shall apply according to the text approved by the Extraordinary Shareholders’ Meeting. |
| 2. | Approve a new consolidated text of the Bank’s Bylaws. |
| 3. | Grant the necessary powers to implement the amendment to the Bylaws and to carry out the resolutions adopted regarding the aforementioned matters. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 5. | Relevant Events, continued: |
| k) | On November 27, 2025 Banco de Chile informed the CMF that it has become aware of the approval of the general policy for the election of directors in subsidiaries by LQ Inversiones Financieras S.A. The policy applies to the Bank as of December 11, 2025. |
| l) | On November 27, 2025 the subsidiary Banchile Corredores de Bolsa S.A. informed that the board of directors of Banco de Chile approved the policy for the election of directors in subsidiaries, which applies to Banchile CB in its capacity as a subsidiary supervised by the Financial Market Commission. |
The aforementioned policy was made known to Banchile CB and is available on Banco de Chile’s website, in the ‘Our Bank’ section.
| m) | On November 27, 2025 the subsidiary Banchile Administradora General de Fondos S.A. informed that the board of directors of Banco de Chile approved the policy for the election of directors in subsidiaries, which applies to Banchile AGF in its capacity as a subsidiary supervised by the Financial Market Commission. |
The aforementioned policy was made known to Banchile AGF and is available on Banco de Chile’s website, in the ‘Our Bank’ section.
| 6. | Business Segment: |
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 Banking: | This segment focuses on individuals and small and medium-sized companies (SMEs) with annual sales up to UF 70,000, where the product offering focuses primarily on consumer loans, commercial loans, checking accounts, credit cards, credit lines and residential mortgage loans. |
| Wholesale Banking: | This segment focused on corporate clients and large companies, whose annual revenue exceed UF 70,000, where the product offering focuses primarily on commercial loans, checking accounts and liquidity management services, debt instruments, foreign trade, derivative contracts and leases. |
| Treasury: | This segment includes revenues associated with the management of the investment portfolio and the business of financial transactions and currency trading. |
Transactions with customers performed 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, among others.
| Subsidiaries: | Corresponds to the businesses generated by the companies controlled by the Bank, which perform banking business support activities. Companies comprising this segment are the following: |
| ● | Banchile Administradora General de Fondos S.A. | |
| ● | Banchile Asesoría Financiera S.A. | |
| ● | Banchile Corredores de Seguros Ltda. | |
| ● | Banchile Corredores de Bolsa S.A. | |
| ● | Operadora de Tarjetas Banchile Pagos S.A. | |
| ● | Socofin S.A. (*) |
| (*) | See Note 5 letter (d) and (g) on Relevant Events. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 6. | Business Segment, continued: |
The financial information used to measure the performance of the Bank’s business segments is not comparable with similar information from other financial institutions because each institution relies on its own definitions. The accounting policies applied to the segments are the same as those described in the section (x) ¨Segment reporting¨ of the signifcant accounting policies. The Bank obtains the majority of the results from: interest, indexation, fees and commissions and financial transaction and changes, discounting provisions for credit risk and operating expenses. Management relies mainly on these concepts to evaluate the performance of the segments and make decisions about the goals and allocations of resources of each unit. Although the results of the segments reconcile with those of the Bank at the total level, this is not necessarily the case in terms of the different concepts, because management is measured and controlled individually and not on a consolidated basis, applying the following criteria:
| ● | The net interest margin of loans and deposits is obtained by aggregating the net financial margins of each individual operation of credit and deposit transactions performed by the Bank. For these purposes, the volume of each operation and its contribution margin are considered, which in turn corresponds to the difference between the effective rate of the customer and the internal transfer price established according to each transaction’s term and currency of each operation. Additionally, the net margin includes the result of interest and indexation from the accounting hedges. |
| ● | Allowance for credit risk is determined at the customer and counterparty level based on the characteristics of each of their operations. |
| ● | The capital and financial impacts on profit or loss have been assigned to each segment based on the risk-weighted assets. |
| ● | Operating expenses are reflected at the level of the Bank´s different functional areas. Then, for the business segment purposes, the allocation of expenses from functional areas is done using different allocation criteria, at the level of the different concepts and expense items. |
Taxes are managed at the consolidated level and are not allocated to business segments.
For the years ended December 31, 2025, 2024 and 2023 there was no income from transactions with a customer or counterparty that accounted for 10% or more of the Bank’s total revenues.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 6. | Business Segments, continued: |
The following table presents the income, and assets and liabilities by segment as of and for the year ended December 31, 2025 for each of the segments defined above:
| As of December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Retail Banking |
Wholesale Banking |
Treasury | Subsidiaries | Subtotal | Consolidation adjustments |
Subtotal |
Adjustments IFRS |
Note | Total | |||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||||||||||||
| Net interest and Inflation indexation income | 1,485,820 | 674,144 | (107,552 | ) | (2,054 | ) | 2,050,358 | 1,526 | 2,051,884 | 18,198 | 2,070,082 | |||||||||||||||||||||||||||
| Net fee and commission income | 362,587 | 93,767 | 3,399 | 197,034 | 656,787 | (19,528 | ) | 637,259 | (16,556 | ) | 620,703 | |||||||||||||||||||||||||||
| Net Financial Result | 6,111 | 50,055 | 171,280 | 50,411 | 277,857 | (1,526 | ) | 276,331 | (4,017 | ) | 272,314 | |||||||||||||||||||||||||||
| Other income | 40,666 | 15,608 | 6,714 | 62,988 | (14,876 | ) | 48,112 | 6,407 | 54,519 | |||||||||||||||||||||||||||||
| Income from investments in other companies | 9,505 | 2,329 | 158 | 465 | 12,457 | 12,457 | (474 | ) | 11,983 | |||||||||||||||||||||||||||||
| Total operating income, before expected credit losses | 1,904,689 | 835,903 | 67,285 | 252,570 | 3,060,447 | (34,404 | ) | 3,026,043 | 3,558 | (1) | 3,029,601 | |||||||||||||||||||||||||||
| Expected credit losses | (378,738 | ) | 1,228 | (4,412 | ) | (381,922 | ) | (381,922 | ) | (12,940 | ) | (2) | (394,862 | ) | ||||||||||||||||||||||||
| Total operating income, net of expected credit losses | 1,525,951 | 837,131 | 62,873 | 252,570 | 2,678,525 | (34,404 | ) | 2,644,121 | (9,382 | ) | 2,634,739 | |||||||||||||||||||||||||||
| Personnel expenses | (377,347 | ) | (113,707 | ) | (3,945 | ) | (75,377 | ) | (570,376 | ) | 21 | (570,355 | ) | (570,355 | ) | |||||||||||||||||||||||
| Administrative expenses | (331,250 | ) | (78,690 | ) | (2,366 | ) | (50,681 | ) | (462,987 | ) | 33,354 | (429,633 | ) | (429,633 | ) | |||||||||||||||||||||||
| Depreciation and amortization | (80,696 | ) | (7,103 | ) | (542 | ) | (6,769 | ) | (95,110 | ) | (95,110 | ) | (95,110 | ) | ||||||||||||||||||||||||
| Impairment of non-financial assets | (335 | ) | (10 | ) | (1,537 | ) | (1,882 | ) | (1,882 | ) | (1,882 | ) | ||||||||||||||||||||||||||
| Other operating expenses | (25,590 | ) | (7,024 | ) | (32 | ) | (2,341 | ) | (34,987 | ) | 1,029 | (33,958 | ) | (33,958 | ) | |||||||||||||||||||||||
| Total operating expenses | (815,218 | ) | (206,534 | ) | (6,885 | ) | (136,705 | ) | (1,165,342 | ) | 34,404 | (1,130,938 | ) | (1,130,938 | ) | |||||||||||||||||||||||
| Net operating income before income tax | 710,733 | 630,597 | 55,988 | 115,865 | 1,513,183 | 1,513,183 | (9,382 | ) | 1,503,801 | |||||||||||||||||||||||||||||
| Income tax | (320,921 | ) | (320,921 | ) | 2,533 | (3) | (318,388 | ) | ||||||||||||||||||||||||||||||
| Net income for the year | 1,192,262 | 1,192,262 | (6,849 | ) | 1,185,413 | |||||||||||||||||||||||||||||||||
| Assets | 25,819,643 | 12,536,827 | 14,154,573 | 1,285,572 | 53,796,615 | (261,464 | ) | 53,535,151 | 235,780 | 53,770,931 | ||||||||||||||||||||||||||||
| Current and deferred taxes | 565,752 | 565,752 | (232,075 | ) | 333,677 | |||||||||||||||||||||||||||||||||
| Total assets | 54,362,367 | (261,464 | ) | 54,100,903 | 3,705 | (4) | 54,104,608 | |||||||||||||||||||||||||||||||
| Liabilities | 17,893,540 | 10,543,300 | 19,062,619 | 1,028,142 | 48,527,601 | (261,464 | ) | 48,266,137 | (884,607 | ) | 47,381,530 | |||||||||||||||||||||||||||
| Current and deferred taxes | 35,231 | 35,231 | 35,231 | |||||||||||||||||||||||||||||||||||
| Total liabilities | 48,562,832 | (261,464 | ) | 48,301,368 | (884,607 | ) | (5) | 47,416,761 | ||||||||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 6. | Business Segments, continued: |
Reclassifications and adjustments to conform IFRS
| (1) | The total effect of IFRS adjustments is MCh$3,558, which mainly stems from the recognition of interest income on accrual basis. |
| (2) | The total effect relates to IFRS adjustments of MCh$(12,940), which mainly stems from differences in the calculation model of allowances for ECL. |
| (3) | The total effect relates to IFRS adjustments of MCh$2,533, which stems from deferred taxes. |
| (4) | The total effect of IFRS adjustments in assets is MCh$3,705, which mainly stems from differences in the calculation model for ECL and deferred taxes effects. |
| (5) | The total effect of IFRS adjustments in liabilities is MCh$(884,607), which mainly stems from provision for minimum dividends and differences in the calculation model of allowances for ECL. |
The following table presents the income, and assets and liabilities by segment as of and for the year ended December 31, 2024 for each of the segments defined above (*):
| As of December 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| Retail Banking |
Wholesale Banking |
Treasury | Subsidiaries | Subtotal | Consolidation adjustments |
Subtotal | Adjustments to conform IFRS |
Note | Total | |||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||||||||||||
| Net interest and Inflation indexation income | 1,503,824 | 744,346 | (105,115 | ) | (3,759 | ) | 2,139,296 | 1,555 | 2,140,851 | 21,904 | 2,162,755 | |||||||||||||||||||||||||||
| Net fee and commission income | 323,785 | 90,343 | 4,376 | 190,192 | 608,696 | (36,813 | ) | 571,883 | (15,575 | ) | 556,308 | |||||||||||||||||||||||||||
| Net Financial Result | 15,885 | 47,410 | 160,589 | 52,858 | 276,742 | (1,555 | ) | 275,187 | 5,293 | 280,480 | ||||||||||||||||||||||||||||
| Other income | 41,640 | 10,338 | — | 3,408 | 55,386 | (10,074 | ) | 45,312 | 6,007 | 51,319 | ||||||||||||||||||||||||||||
| Income from investments in other companies | 9,291 | 6,385 | 980 | 396 | 17,052 | — | 17,052 | (397 | ) | 16,655 | ||||||||||||||||||||||||||||
| Total operating income, before expected credit losses | 1,894,425 | 898,822 | 60,830 | 243,095 | 3,097,172 | (46,887 | ) | 3,050,285 | 17,232 | (1) | 3,067,517 | |||||||||||||||||||||||||||
| Expected credit losses | (364,712 | ) | (26,033 | ) | (1,009 | ) | — | (391,754 | ) | — | (391,754 | ) | 39,048 | (2) | (352,706 | ) | ||||||||||||||||||||||
| Total operating income, net of expected credit losses | 1,529,713 | 872,789 | 59,821 | 243,095 | 2,705,418 | (46,887 | ) | 2,658,531 | 56,280 | 2,714,811 | ||||||||||||||||||||||||||||
| Personnel expenses | (378,596 | ) | (113,623 | ) | (3,951 | ) | (86,397 | ) | (582,567 | ) | 20 | (582,547 | ) | — | (582,547 | ) | ||||||||||||||||||||||
| Administrative expenses | (336,550 | ) | (75,958 | ) | (1,938 | ) | (48,178 | ) | (462,624 | ) | 45,928 | (416,696 | ) | — | (416,696 | ) | ||||||||||||||||||||||
| Depreciation and amortization | (78,846 | ) | (7,791 | ) | (575 | ) | (7,389 | ) | (94,601 | ) | — | (94,601 | ) | — | (94,601 | ) | ||||||||||||||||||||||
| Impairment of non-financial assets | (1,147 | ) | — | — | (1,704 | ) | (2,851 | ) | — | (2,851 | ) | — | (2,851 | ) | ||||||||||||||||||||||||
| Other operating expenses | (25,448 | ) | (10,058 | ) | (52 | ) | (1,420 | ) | (36,978 | ) | 939 | (36,039 | ) | — | (36,039 | ) | ||||||||||||||||||||||
| Total operating expenses | (820,587 | ) | (207,430 | ) | (6,516 | ) | (145,088 | ) | (1,179,621 | ) | 46,887 | (1,132,734 | ) | — | (1,132,734 | ) | ||||||||||||||||||||||
| Net operating income, before income tax | 709,126 | 665,359 | 53,305 | 98,007 | 1,525,797 | — | 1,525,797 | 56,280 | 1,582,077 | |||||||||||||||||||||||||||||
| Income tax | (318,405 | ) | — | (318,405 | ) | (15,196 | ) | (3) | (333,601 | ) | ||||||||||||||||||||||||||||
| Net income for the year | 1,207,392 | — | 1,207,392 | 41,084 | 1,248,476 | |||||||||||||||||||||||||||||||||
| Assets | 24,832,432 | 13,259,610 | 12,589,488 | 924,392 | 51,605,922 | (227,179 | ) | 51,378,743 | 194,709 | 51,573,452 | ||||||||||||||||||||||||||||
| Current and deferred taxes | 716,698 | — | 716,698 | (234,608 | ) | 482,090 | ||||||||||||||||||||||||||||||||
| Total assets | 52,322,620 | (227,179 | ) | 52,095,441 | (39,899 | ) | (4) | 52,055,542 | ||||||||||||||||||||||||||||||
| Liabilities | 18,015,015 | 10,790,972 | 17,198,350 | 694,984 | 46,699,321 | (227,179 | ) | 46,472,142 | (921,794 | ) | 45,550,348 | |||||||||||||||||||||||||||
| Current and deferred taxes | 298 | — | 298 | — | 298 | |||||||||||||||||||||||||||||||||
| Total liabilities | 46,699,619 | (227,179 | ) | 46,472,440 | (921,794 | ) | (5) | 45,550,646 | ||||||||||||||||||||||||||||||
| (*) | The comparative information was aligned with the new segment structure in accordance with IFRS 8. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 6. | Business Segments, continued: |
Reclassifications and adjustments to conform IFRS
| (1) | The total effect of IFRS adjustments is MCh$17,232, which mainly stems from the recognition of interest income on accrual basis. |
| (2) | The total effect relates to IFRS adjustments of MCh$39,048, which mainly stems from differences in the calculation model of allowances for ECL. |
| (3) | The total effect relates to IFRS adjustments of MCh$(15,196), which stems from deferred taxes. |
| (4) | The total effect of IFRS adjustments in assets is MCh$(39,899), which mainly stems from differences in the calculation model for ECL and deferred taxes effects. |
| (5) | The total effect of IFRS adjustments in liabilities is MCh$(921,794), which mainly stems from provision for minimum dividends and differences in the calculation model of allowances for ECL |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 6. | Business Segments, continued: |
The following table presents the income, and assets and liabilities by segment as of and for the year ended December 31, 2023 for each of the segments defined above (*):
| As of December 31, 2023 | ||||||||||||||||||||||||||||||||||||||
| Retail Banking | Wholesale Banking | Treasury | Subsidiaries | Subtotal | Consolidation adjustments | Subtotal | Adjustments to conform IFRS |
Note | Total | |||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||||||||||||
| Net interest and Inflation indexation income | 1,427,085 | 790,083 | (316,290 | ) | (11,162 | ) | 1,889,716 | 944 | 1,890,660 | 30,132 | 1,920,792 | |||||||||||||||||||||||||||
| Net fee and commission income | 321,736 | 81,680 | 1,725 | 173,416 | 578,557 | (32,627 | ) | 545,930 | (11,246 | ) | 534,684 | |||||||||||||||||||||||||||
| Net Financial Result | 10,771 | 54,902 | 336,515 | 66,521 | 468,709 | (944 | ) | 467,765 | 1,788 | 469,553 | ||||||||||||||||||||||||||||
| Other income | 54,623 | 24,913 | 3,400 | 82,936 | (6,851 | ) | 76,085 | (339 | ) | 75,746 | ||||||||||||||||||||||||||||
| Income from investments in other companies | 9,624 | 3,366 | 342 | 1,100 | 14,432 | 14,432 | (1,023 | ) | 13,409 | |||||||||||||||||||||||||||||
| Total operating income, before expected credit losses | 1,823,839 | 954,944 | 22,292 | 233,275 | 3,034,350 | (39,478 | ) | 2,994,872 | 19,312 | (1) | 3,014,184 | |||||||||||||||||||||||||||
| Expected credit losses | (373,169 | ) | 9,164 | 2,754 | (361,251 | ) | (361,251 | ) | 159,307 | (2) | (201,944 | ) | ||||||||||||||||||||||||||
| Total operating income, net of expected credit losses | 1,450,670 | 964,108 | 25,046 | 233,275 | 2,673,099 | (39,478 | ) | 2,633,621 | 178,619 | 2,812,240 | ||||||||||||||||||||||||||||
| Personnel expenses | (380,149 | ) | (110,822 | ) | (2,972 | ) | (88,761 | ) | (582,704 | ) | 20 | (582,684 | ) | (582,684 | ) | |||||||||||||||||||||||
| Administrative expenses | (326,380 | ) | (74,445 | ) | (1,866 | ) | (39,052 | ) | (441,743 | ) | 38,488 | (403,255 | ) | (403,255 | ) | |||||||||||||||||||||||
| Depreciation and amortization | (76,893 | ) | (8,502 | ) | (289 | ) | (6,624 | ) | (92,308 | ) | (92,308 | ) | (92,308 | ) | ||||||||||||||||||||||||
| Impairment of non-financial assets | (1,773 | ) | (5 | ) | 16 | (1,762 | ) | (1,762 | ) | (1,762 | ) | |||||||||||||||||||||||||||
| Other operating expenses | (28,439 | ) | (6,841 | ) | (3 | ) | (1,777 | ) | (37,060 | ) | 970 | (36,090 | ) | (36,090 | ) | |||||||||||||||||||||||
| Total operating expenses | (813,634 | ) | (200,615 | ) | (5,130 | ) | (136,198 | ) | (1,155,577 | ) | 39,478 | (1,116,099 | ) | (1,116,099 | ) | |||||||||||||||||||||||
| Net operating income, before income tax | 637,036 | 763,493 | 19,916 | 97,077 | 1,517,522 | 1,517,522 | 178,619 | 1,696,141 | ||||||||||||||||||||||||||||||
| Income tax | (273,887 | ) | (273,887 | ) | (48,227 | ) | (3) | (322,114 | ) | |||||||||||||||||||||||||||||
| Net income for the year | 1,243,635 | 1,243,635 | 130,392 | 1,374,027 | ||||||||||||||||||||||||||||||||||
| Assets | 23,583,402 | 13,247,584 | 17,530,710 | 986,697 | 55,348,393 | (236,853 | ) | 55,111,540 | 144,901 | 55,256,441 | ||||||||||||||||||||||||||||
| Current and deferred taxes | 681,012 | 681,012 | (219,412 | ) | 461,600 | |||||||||||||||||||||||||||||||||
| Total assets | 56,029,405 | (236,853 | ) | 55,792,552 | (74,511 | ) | (4) | 55,718,041 | ||||||||||||||||||||||||||||||
| Liabilities | 19,123,031 | 10,671,254 | 20,219,857 | 777,170 | 50,791,312 | (236,853 | ) | 50,554,459 | (919,171 | ) | 49,635,288 | |||||||||||||||||||||||||||
| Current and deferred taxes | 808 | 808 | 808 | |||||||||||||||||||||||||||||||||||
| Total liabilities | 50,792,120 | (236,853 | ) | 50,555,267 | (919,171 | ) | (5) | 49,636,096 | ||||||||||||||||||||||||||||||
| (*) | The comparative information was aligned with the new segment structure in accordance with IFRS 8. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 6. | Business Segments, continued: |
Reclassifications and adjustments to conform IFRS
| (1) | The total effect of IFRS adjustments is MCh$19,312, which mainly stems from the recognition of interest income on accrual basis. |
| (2) | The total effect relates to IFRS adjustments of MCh$159,307, which mainly stems from differences in the calculation model of allowances for ECL. |
| (3) | The total effect relates to IFRS adjustments of MCh$(48,227), which stems from deferred taxes. |
| (4) | The total effect of IFRS adjustments in assets is MCh$(74,511), which mainly stems from differences in the calculation model for ECL and deferred taxes effects. |
| (5) | The total effect of IFRS adjustments in liabilities is MCh$(919,171), which mainly stems from provision for minimum dividends and differences in the calculation model of allowances for ECL. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 7. | Cash and Cash Equivalents: |
Details of cash and cash equivalents and its reconciliation to the Statement of Cash Flows at each year-end are as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Cash and deposits in banks: | ||||||||
| Cash (*) | 900,264 | 879,130 | ||||||
| Deposit in Chilean Central Bank (*) | 1,347,525 | 1,036,476 | ||||||
| Deposits in domestic banks | 8,862 | 12,767 | ||||||
| Deposits in abroad banks | 334,335 | 770,703 | ||||||
| Subtotal - Cash and deposits in banks | 2,590,986 | 2,699,076 | ||||||
| Net transactions in the course of settlement (**) | (149,753 | ) | 88,851 | |||||
| Cash equivalents (***) | 492,943 | 476,610 | ||||||
| Total cash and cash equivalents | 2,934,176 | 3,264,537 | ||||||
The detail of the balances included under net ongoing clearance operations is as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Assets | ||||||||
| Documents drawn on other banks (clearing) | 115,967 | 109,635 | ||||||
| Funds receivable | 298,452 | 262,821 | ||||||
| Subtotal transactions in the course of collection | 414,419 | 372,456 | ||||||
| Liabilities | ||||||||
| Funds payable | (564,172 | ) | (283,605 | ) | ||||
| Subtotal transactions in the course of payments | (564,172 | ) | (283,605 | ) | ||||
| Net transactions in the course of settlement | (149,753 | ) | 88,851 | |||||
| (*) | The level of funds in cash and in the Central Bank of Chile responds to regulations on reserve requirements that the bank must maintain on average in monthly periods. |
| (**) | Pending clearing operations with the Central Bank of Chile and foreign banks. Settlement for these transactions is normally finalized within 12 or 24 business hours since transactions took place. |
| (***) | Refers to financial instruments that meet the criteria to be considered as “cash equivalents” as defined by IAS 7, i.e., to qualify as “cash equivalents” investments in debt financial instruments must be: short-term with an original maturity of 90 days or less from the date of acquisition, highly liquid, readily convertible to known amounts of cash from the date of initial investment, and that the financial instruments are exposed to an insignificant risk of changes in their value. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 8. | Financial Assets Held for Trading at Fair Value through Profit or Loss: |
The detail of this line item is as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Financial derivative contracts | 1,870,640 | 2,303,353 | ||||||
| Debt Financial Instruments | 3,121,702 | 1,714,381 | ||||||
| Others | 402,259 | 411,689 | ||||||
| Total | 5,394,601 | 4,429,423 | ||||||
| (a) | As of December 31, 2025 and 2024, the Bank records the following portfolio of derivative instruments: |
| Notional amount of contract with final expiration date in | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| On demand | Up to 1 month | Over
1 month and up to 3 months |
Over
3 months and up to 12 months |
Over
1 year and up to 3 years |
Over
3 years and up to 5 years |
Over 5 years | Total | Fair
Value Assets |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Currency forward | — | — | 6,451,389 | 3,289,559 | 3,453,741 | 1,712,274 | 3,453,928 | 2,589,278 | 658,475 | 916,016 | 3,028 | 26,575 | — | 4,442 | 14,020,561 | 8,538,144 | 378,983 | 227,670 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate swap | — | — | 384,202 | 376,933 | 2,758,114 | 2,249,606 | 7,746,942 | 5,133,205 | 7,089,417 | 7,253,517 | 4,497,481 | 4,172,518 | 4,088,342 | 4,250,312 | 26,564,498 | 23,436,091 | 451,124 | 732,395 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate and cross currency swap | — | — | 227,581 | 107,571 | 556,735 | 249,871 | 1,527,659 | 2,198,760 | 2,396,969 | 2,164,528 | 2,170,585 | 1,449,064 | 2,529,413 | 2,686,049 | 9,408,942 | 8,855,843 | 1,037,686 | 1,338,086 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Call currency options | — | — | 5,591 | 11,551 | 28,062 | 42,692 | 57,525 | 57,908 | — | 11,340 | — | — | — | — | 91,178 | 123,491 | 332 | 4,949 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Put currency options | — | — | 14,679 | 10,208 | 18,722 | 16,989 | 29,583 | 23,301 | — | — | — | — | — | — | 62,984 | 50,498 | 2,515 | 253 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | — | — | 7,083,442 | 3,795,822 | 6,815,374 | 4,271,432 | 12,815,637 | 10,002,452 | 10,144,861 | 10,345,401 | 6,671,094 | 5,648,157 | 6,617,755 | 6,940,803 | 50,148,163 | 41,004,067 | 1,870,640 | 2,303,353 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 8. | Financial Assets Held for Trading at Fair Value through Profit or Loss, continued: |
| b) | The detail of Debt Financial Instruments is the following: |
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Instruments issued by the Chilean Government and Central Bank of Chile | ||||||||
| Debt financial instruments from the Central Bank of Chile | 2,388,127 | 1,217,317 | ||||||
| Bonds and Promissory notes from the General Treasury of the Republic | 410,202 | 278,140 | ||||||
| Other instruments issued in Chile | ||||||||
| Debt financial instruments from other domestic banks | 277,354 | 217,948 | ||||||
| Instruments issued Abroad | ||||||||
| Financial instruments from foreign governments or Central Banks | 46,019 | 976 | ||||||
| Total | 3,121,702 | 1,714,381 | ||||||
Under “Instruments issued by the Chilean Government and Central Bank of Chile” are classified instruments sold under repurchase agreements to clients and financial institutions, by an amount of Ch$62,046 million as of December 31, 2025 (Ch$10,038 million as of December 31, 2024). The repurchase agreements have an average maturity of 2 days at the end of the year 2025 (2 days in December 2024).
Under “Other instruments issued in Chile” are included instruments sold under repurchase agreements to clients and financial institutions by an amount of Ch$151,169 million as of December 31, 2025 (Ch$89,223 million in December 2024). The repurchase agreements have an average maturity of 4 days at the end of the year 2025 (7 days in December 2024).
Additionally, the Bank has investments in own-issued letters of credit for an amount equivalent to Ch$474 million as of December 31, 2025 (Ch$998 million in December 2024), which are presented as a reduction of the liability item “Debt financial instruments issued”.
| c) | The detail of other financial instruments is as follows: |
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Mutual fund investments | ||||||||
| Funds managed by related companies | 400,222 | 408,121 | ||||||
| Funds managed by third-party | ||||||||
| Equity instruments | ||||||||
| Domestic equity instruments | 619 | 1,039 | ||||||
| Foreign equity instruments | ||||||||
| Loans originated and acquired by the entity | ||||||||
| Loans to Banks | ||||||||
| Commercial loans | ||||||||
| Residential mortgage loans | ||||||||
| Consumer loans | ||||||||
| Others | 1,418 | 2,529 | ||||||
| Total | 402,259 | 411,689 | ||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 9. | Financial Assets at Fair Value through Other Comprehensive Income: |
As of December 31, 2025 and 2024, financial assets are detailed as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Debt Financial Instruments | 3,548,971 | 2,088,345 | ||||||
| Equity Instruments | 11,232 | 9,492 | ||||||
| Total | 3,560,203 | 2,097,837 | ||||||
| (a) | Debt Financial Instruments at fair value through OCI: |
As of December 31, 2025 and 2024 the detail of debt financial instruments is as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Instruments issued by the Chilean Government and Central Bank of Chile | ||||||||
| Debt financial instruments from the Central Bank of Chile | ||||||||
| Bonds and Promissory notes from the General Treasury of the Republic | 1,174,234 | 660,321 | ||||||
| Other fiscal debt financial instruments | 72 | 456 | ||||||
| Other Instruments Issued in Chile | ||||||||
| Debt financial instruments from other domestic banks | 2,234,247 | 1,321,030 | ||||||
| Bonds and trade effects from domestic companies | 104,679 | 54,600 | ||||||
| Other debt financial instruments issued in the country | ||||||||
| Instruments Issued Abroad | ||||||||
| Financial instruments from foreign Central Banks | ||||||||
| Financial instruments from foreign governments and fiscal entities | 35,739 | 48,883 | ||||||
| Debt financial instruments from other foreign banks | ||||||||
| Bonds and trade effects from foreign companies | 3,055 | |||||||
| Other debt financial instruments issued abroad | ||||||||
| Total | 3,548,971 | 2,088,345 | ||||||
“Instruments issued by the Chilean Government and Central Bank of Chile” include instruments sold under repurchase agreements to customers and financial institutions for an amount of Ch$43,599 million in December 2025 (Ch$10,001 million in December 2024). The repurchase agreements have an average maturity of 5 days in December 2025 (2 days in December 2024).
Under the same item, instruments that guarantee margins for cleared derivatives transactions are classified through Comder Contraparte Central S.A. (Chilean clearing-house) for an amount of Ch$20,714 million as of December 31, 2025 (Ch$22,719 million as of December 31, 2024).
As of December 31, 2025 the allowance for ECL for debt instruments at fair value through other comprehensive income was Ch$6,979 million (Ch$4,226 million as of December 31, 2024).
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 9. | Financial Assets at Fair Value through Other Comprehensive Income, continued: |
| (a.1) | The credit ratings of the issuers of debt instruments as of December 31, 2025 and 2024, are as follows: |
| As of December 31, 2025 | As of December 31, 2024 | |||||||||||||||||||||||||||||||
| Stage 1 Individual |
Stage 2 Individual |
Stage 3 Individual |
Total Individual |
Stage 1 Individual |
Stage 2 Individual |
Stage 3 Individual |
Total Individual |
|||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Debt Instrument | ||||||||||||||||||||||||||||||||
| Investment grade | 3,548,971 | 3,548,971 | 2,088,345 | 2,088,345 | ||||||||||||||||||||||||||||
| Non-investment grade | ||||||||||||||||||||||||||||||||
| Without rating | ||||||||||||||||||||||||||||||||
| Total | 3,548,971 | 3,548,971 | 2,088,345 | 2,088,345 | ||||||||||||||||||||||||||||
| (a.2) | Analysis of changes in the fair value and corresponding allowance for ECL by stage for debt instruments measured at FVOCI as of December 31, 2025 and 2024, is as follows: |
| Stage 1 Individual |
Stage 2 Individual |
Stage 3 Individual |
Total | |||||||||||||||||||||||||||||
| Fair value | ECL | Fair value | ECL | Fair value | ECL | Fair value | ECL | |||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Balance as of January 1, 2024 | 3,786,525 | 5,500 | 3,786,525 | 5,500 | ||||||||||||||||||||||||||||
| Net change on Balance * | (1,694,790 | ) | (1,274 | ) | (1,694,790 | ) | (1,274 | ) | ||||||||||||||||||||||||
| Change in fair value | (3,390 | ) | (3,390 | ) | ||||||||||||||||||||||||||||
| Transfer to Stage 1 | ||||||||||||||||||||||||||||||||
| Transfer to Stage 2 | ||||||||||||||||||||||||||||||||
| Transfer to Stage 3 | ||||||||||||||||||||||||||||||||
| Impact on year-end ECL of exposures transferred between stages during the year ** | ||||||||||||||||||||||||||||||||
| Impact of net re-measurement of year-end ECL | ||||||||||||||||||||||||||||||||
| Amounts written off | ||||||||||||||||||||||||||||||||
| Foreign exchange adjustments | ||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | 2,088,345 | 4,226 | 2,088,345 | 4,226 | ||||||||||||||||||||||||||||
| Balance as of January 1, 2025 | 2,088,345 | 4,226 | 2,088,345 | 4,226 | ||||||||||||||||||||||||||||
| Net change on Balance * | 1,454,573 | 2,753 | 1,454,573 | 2,753 | ||||||||||||||||||||||||||||
| Change in fair value | 6,053 | 6,053 | ||||||||||||||||||||||||||||||
| Transfer to Stage 1 | ||||||||||||||||||||||||||||||||
| Transfer to Stage 2 | ||||||||||||||||||||||||||||||||
| Transfer to Stage 3 | ||||||||||||||||||||||||||||||||
| Impact on year-end ECL of exposures transferred between stages during the year ** | ||||||||||||||||||||||||||||||||
| Impact of net re-measurement of year-end ECL | ||||||||||||||||||||||||||||||||
| Amounts written off | ||||||||||||||||||||||||||||||||
| Foreign exchange adjustments | ||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | 3,548,971 | 6,979 | 3,548,971 | 6,979 | ||||||||||||||||||||||||||||
| * | Net change between assets purchased and assets derecognized. | |
| ** | Represents the change in the year-end ECLs of exposures that were transferred from one stage to another during the year. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 9. | Financial Assets at Fair Value through Other Comprehensive Income, continued: |
| (b) | Equity instruments at fair value through OCI: |
As of December 31, 2025 and 2024, the detail of equity instruments is as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Equity instruments issued in Chile | 8,744 | 7,277 | ||||||
| Equity instruments issued by foreign institutions | 2,488 | 2,215 | ||||||
| Total | 11,232 | 9,492 | ||||||
The equity investments issued by foreign institutions represent shares of currency exchange offices and servicing companies that the Bank is obliged to hold in order to benefit from these services. Investments in shares correspond to: Holding Bursátil Regional S.A., Banco Latinoamericano de Comercio Exterior S.A. (Bladex), Bolsa Electrónica de Chile, Bolsa de Valores, Sociedad de Telecomunicaciones Financieras Interbancarias Mundiales (Swift) and CCLV Contraparte Central S.A. These investments have been irrevocably designated as at fair value through other comprehensive income and, therefore, are recorded at market value in accordance with IFRS 9.
| (c) | Realized and unrealized profits: |
As of December 31, 2025, the portfolio of debt financial instruments includes an accumulated unrealized gain of Ch$13,284 million (accumulated unrealized gain of Ch$4,478 million in December 2024), recorded as a valuation adjustment through other comprehensive income.
Gross realized gains and losses on the sale of debt financial instruments, as of December 31, 2025, 2024 and 2023 are reported under “Net Financial Result” (See Note No. 31). The realized gains and losses at the end of both periods are the following:
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Unrealized gains (losses) | 23,681 | 3,386 | 4,352 | |||||||||
| Realized losses (gains) reclassified to income | (14,875 | ) | (8,050 | ) | 4,522 | |||||||
| Subtotal | 8,806 | (4,664 | ) | 8,874 | ||||||||
| Income tax on other comprehensive income | (936 | ) | (710 | ) | (1,806 | ) | ||||||
| Net effect in other comprehensive income | 7,870 | (5,374 | ) | 7,068 | ||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 10. | Derivative financial instruments for hedging purposes: |
| (a.1) | As of December 31, 2025 and 2024, the Bank has the following portfolio of financial derivative instruments for accounting hedging purposes: |
| Notional amount of contract with final expiration date in | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| On demand | Up to 1 month | Over
1 month and up to 3 months |
Over
3 months and up to 12 months |
Over
1 year and up to 3 years |
Over
3 years and up to 5 years |
Over 5 years | Total | Fair
value Assets |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives held for fair value hedges | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash flow hedge derivatives | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate swap and cross currency swap | — | — | — | — | — | — | — | 131,987 | 215,715 | 274,935 | — | 122,041 | 107,073 | 306,460 | 322,788 | 835,423 | 29,714 | 73,959 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | — | — | — | — | — | — | — | 131,987 | 215,715 | 274,935 | — | 122,041 | 107,073 | 306,460 | 322,788 | 835,423 | 29,714 | 73,959 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (a.2) | As of December 31, 2025 and 2024, the Bank has the following debt portfolio of financial derivative instruments for accounting hedging purposes: |
| Notional amount of contract with final expiration date in | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| On demand | Up to 1 month | Over
1 month and up to 3 months |
Over
3 months and up to 12 months |
Over
1 year and up to 3 years |
Over
3 years and up to 5 years |
Over 5 years | Total | Fair
value Liabilities |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives held for fair value hedges | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash flow hedge derivatives | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate swap and cross currency swap | — | — | — | — | — | — | — | 134,806 | 230,019 | 34,060 | 254,545 | 132,265 | 1,350,496 | 875,618 | 1,835,060 | 1,176,749 | 297,817 | 141,040 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | — | — | — | — | — | — | — | 134,806 | 230,019 | 34,060 | 254,545 | 132,265 | 1,350,496 | 875,618 | 1,835,060 | 1,176,749 | 297,817 | 141,040 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 10. | Derivative financial instruments for hedging purposes, continued: |
| (b) | Fair Value hedges: |
As of December 31, 2025 and 2024, no fair value hedges are held.
| (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 and foreign exchange of foreign banks obligations and bonds issued abroad in US dollars, Hong Kong dollars, Swiss Franc, Japanese yen, Peruvian sol, Australian dollars, Euros, Norwegian kroner and Mexican pesos. 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 are used to hedge the risk from variability of the Unidad de Fomento (“UF”) in assets flows denominated in UF until a nominal amount equal to the portion notional of the hedging instrument UF, whose indexation daily the line item “Interest and Inflation indexation revenue” of the Income Financial Statements.
| (c.2) | Below are the cash flows of borrowings from banks and bonds issued abroad objects of these hedges and the cash flows of the asset part of the derivative: |
| On demand | Up to 1 month | Over
1 month and up to 3 months |
Over
3 months and up to 12 months |
Over
1 year and up to 3 years |
Over
3 years and up to 5 years |
Over 5 years | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Hedged item | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outflows: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate Bond | — | — | (1,017 | ) | (472 | ) | (9,291 | ) | (7,576 | ) | (52,425 | ) | (213,764 | ) | (572,565 | ) | (444,033 | ) | (297,431 | ) | (357,141 | ) | (1,437,654 | ) | (1,297,164 | ) | (2,370,383 | ) | (2,320,150 | ) | ||||||||||||||||||||||||||||||||||
| Obligation USD | — | — | — | — | — | — | — | (104,466 | ) | — | — | — | — | — | — | — | (104,466 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| Hedging instrument | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inflows: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cross Currency Swap | — | — | 1,017 | 472 | 9,291 | 7,576 | 52,425 | 318,230 | 572,565 | 444,033 | 297,431 | 357,141 | 1,437,654 | 1,297,164 | 2,370,383 | 2,424,616 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net cash flows | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| (c.3) | Below are the cash flows of the underlying assets portfolio and the cash flow of the liability part of the derivatives: |
| On demand | Up to 1 month | Over
1 month and up to 3 months |
Over
3 months and up to 12 months |
Over
1 year and up to 3 years |
Over
3 years and up to 5 years |
Over 5 years | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Hedged item | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inflows: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash flows in CLF | — | — | 2,270 | 1,588 | 2,881 | 2,804 | 41,030 | 306,543 | 527,973 | 377,477 | 320,395 | 304,794 | 1,549,936 | 1,280,412 | 2,444,485 | 2,273,618 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Hedging instrument | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outflows: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cross Currency Swap | — | — | (2,270 | ) | (1,588 | ) | (2,881 | ) | (2,804 | ) | (41,030 | ) | (306,543 | ) | (527,973 | ) | (377,477 | ) | (320,395 | ) | (304,794 | ) | (1,549,936 | ) | (1,280,412 | ) | (2,444,485 | ) | (2,273,618 | ) | ||||||||||||||||||||||||||||||||||
| Net cash flows | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 10. | Derivative financial instruments for hedging purposes, continued: |
| (c) | Cash flow hedges, continued: |
With respect to CLF assets hedged; these are revalued monthly according to the variation of the UF, which is equivalent to monthly reinvest the assets until maturity of the relationship hedging.
| (c.4) | The unrealized results generated during the year 2025 by those derivative contracts that compose the hedging instruments in this cash flow hedging strategy, have been recorded with a debit to equity of Ch$28,341 million (debit to equity of Ch$21,798 million and credit to equity of Ch$113,183 million as of December 31, 2024 and 2023, respectively). The net effect of taxes amounts to equity of Ch$20,689 million (a debit to equity of Ch$15,913 million and a credit to equity of Ch$82,624 million as of December 31, 2024 and 2023, respectively). |
The accumulated balance for this concept as of December 31, 2025 corresponds to a debit to equity of Ch$40,738 million (a debit to equity amounted to Ch$12,397 million as of December 31, 2024 and a credit to equity amounting to Ch$9,401 million as of December 31, 2023).
| (c.5) | The effect of the cash flow hedging derivatives that offset the result of the hedged instruments corresponds to a debit to result of Ch$169,951 million in 2025 (a credit to income of Ch$100,566 million in 2024 and a charge to result for Ch$4,320 million in 2023). |
| (c.6) | As of December 31, 2025 and 2024, there no ineffectiveness in the cash flow hedge, because both, hedged item and hedging instruments, are mirrors of each other; i.e., all variations in the value attributable to rate and indexation components are fully offset. |
| (c.7) | As of December 31, 2025, 2024 and 2023, the Bank had no hedges of net investments in foreign businesses. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost: |
The detail of this line item is as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Rights by resale agreements | 100,643 | 87,291 | ||||||
| Debt financial instruments | 460,937 | 944,074 | ||||||
| Loans to Banks | 399,792 | 667,703 | ||||||
| Loans to customers: | ||||||||
| Commercial loans | 19,549,547 | 20,147,980 | ||||||
| Residential mortgage loans | 13,934,469 | 13,233,327 | ||||||
| Consumer loans | 5,770,298 | 5,554,989 | ||||||
| Allowances established for credit risk: | ||||||||
| Allowances for ECL - Loans to Banks | (1,764 | ) | (1,988 | ) | ||||
| Allowances for ECL - Commercial loans | (253,341 | ) | (254,568 | ) | ||||
| Allowances for ECL - Residential mortgage loans | (37,679 | ) | (35,632 | ) | ||||
| Allowances for ECL - Consumer loans | (420,983 | ) | (403,234 | ) | ||||
| Total | 39,501,919 | 39,939,942 | ||||||
| (a) | Rights by resale agreements: |
The Bank provides financing to its customers through rights by resale agreements, in which the financial instrument serves as collateral. As of December 31, 2025 and 2024, the detail is as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Transactions with domestic banks | ||||||||
| Resale agreements with other banks | — | — | ||||||
| Resale agreements with the Central Bank of Chile | — | — | ||||||
| Rights from securities lending | — | — | ||||||
| Transactions with foreign banks | ||||||||
| Resale agreements with other banks | — | — | ||||||
| Resale agreements with foreign Central Banks | — | — | ||||||
| Rights from securities lending | — | — | ||||||
| Transactions with other domestic entities | ||||||||
| Resale agreements | 100,643 | 87,291 | ||||||
| Rights from securities lending | — | — | ||||||
| Transactions with other foreign entities | ||||||||
| Resale agreements | — | — | ||||||
| Rights from securities lending | — | — | ||||||
| Accumulated Impairment Value of Financial Assets at Amortized Cost - Rights by resale agreements | ||||||||
| Financial assets with no significant increase in credit risk since initial recognition (phase 1) | — | — | ||||||
| Financial assets with a significant increase in credit risk since initial recognition, but without credit impairment (phase 2) | — | — | ||||||
| Financial assets with credit impairment (phase 3) | — | — | ||||||
| Total | 100,643 | 87,291 | ||||||
The Bank and its subsidiaries have received financial instruments that they can sell or give as collateral in case the owner of these instruments enters into default or in bankruptcy. As of December 31, 2025, the fair value of the instruments received amounts to Ch$107,060 million (Ch$87,157 million in December 2024).
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost, continued: |
| (b) | Debt financial instruments: |
At the end of each year, the balances presented under this line item are detailed as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Instruments issued by the Chilean Government and Central Bank of Chile | ||||||||
| Debt financial instruments from the Central Bank of Chile | — | — | ||||||
| Bonds and promissory notes from the General Treasury of the Republic | 460,956 | 944,109 | ||||||
| Other fiscal debt financial instruments | — | — | ||||||
| Other Financial Instruments issued in Chile | ||||||||
| Debt financial instruments from other domestic banks | — | — | ||||||
| Bonds and trade effects from domestic companies | — | — | ||||||
| Other debt financial instruments issued in the country | — | — | ||||||
| Financial Instruments issued Abroad | ||||||||
| Debt financial instruments from foreign Central Banks | — | — | ||||||
| Debt financial instruments from foreign governments and fiscal entities | — | — | ||||||
| Debt financial instruments from other foreign banks | — | — | ||||||
| Bonds and trade effects from foreign companies | — | — | ||||||
| Other debt financial instruments issued abroad | — | — | ||||||
| Accumulated impairment value of financial assets at amortized Cost Debt Financial Instruments | ||||||||
| Financial assets with no significant increase in credit risk since initial recognition (phase 1) | (19 | ) | (35 | ) | ||||
| Financial assets with a significant increase in credit risk since initial recognition, but without credit impairment (phase 2) | — | — | ||||||
| Financial assets with credit impairment (phase 3) | — | — | ||||||
| Total | 460,937 | 944,074 | ||||||
| (b.1) | The credit ratings of the issuers of instruments assets at amortized cost as of December 31, 2025 and 2024, are as follows: |
| As of December 31, 2025 | As of December 31, 2024 | |||||||||||||||||||||||||||||||
| Stage 1 Individual |
Stage 2 Individual |
Stage 3 Individual |
Total Individual |
Stage 1 Individual |
Stage 2 Individual |
Stage 3 Individual |
Total Individual |
|||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Debt Instrument | ||||||||||||||||||||||||||||||||
| Investment grade | 460,937 | — | — | 460,937 | 944,074 | — | — | 944,074 | ||||||||||||||||||||||||
| Non-investment grade | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Without rating | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Total | 460,937 | — | — | 460,937 | 944,074 | — | — | 944,074 | ||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost, continued: |
| (b.2) | Analysis of changes in gross carrying amount and corresponding allowance for ECL by stage for financial instruments measured at amortized cost as of December 31, 2025 and 2024, is as follows: |
| Stage 1 Individual |
Stage 2 Individual |
Stage 3 Individual |
Total | |||||||||||||||||||||||||||||
| Gross carrying amount |
ECL | Gross carrying amount |
ECL | Gross carrying amount |
ECL | Gross carrying amount |
ECL | |||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Balance as of January 1, 2025 | 944,109 | 35 | — | — | — | — | 944,109 | 35 | ||||||||||||||||||||||||
| Net change in Balance * | (483,153 | ) | (16 | ) | — | — | — | — | (483,153 | ) | (16 | ) | ||||||||||||||||||||
| Change in fair value | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Transfer to Stage 1 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Transfer to Stage 2 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Transfer to Stage 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Impact on year-end ECL of exposures transferred between stages during the year ** | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Impact of net re-measurement of year-end ECL | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Amounts written off | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Balance as of December 31, 2025 | 460,956 | 19 | — | — | — | — | 460,956 | 19 | ||||||||||||||||||||||||
| Stage 1 Individual |
Stage 2 Individual |
Stage 3 Individual |
Total | |||||||||||||||||||||||||||||
| Gross carrying amount |
ECL | Gross carrying amount |
ECL | Gross carrying amount |
ECL | Gross carrying amount |
ECL | |||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Balance as of January 1, 2024 | 1,431,141 | 58 | — | — | — | — | 1,431,141 | 58 | ||||||||||||||||||||||||
| Net change in Balance * | (487,032 | ) | (23 | ) | — | — | — | — | (487,032 | ) | (23 | ) | ||||||||||||||||||||
| Change in fair value | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Transfer to Stage 1 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Transfer to Stage 2 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Transfer to Stage 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Impact on year-end ECL of exposures transferred between stages during the year ** | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Impact of net re-measurement of year-end ECL | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Amounts written off | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Balance as of December 31, 2024 | 944,109 | 35 | — | — | — | — | 944,109 | 35 | ||||||||||||||||||||||||
| * | Net change between assets purchased and assets derecognized excluding write offs. | |
| ** | Represents the change in the year-end ECLs of exposures that were transferred from one stage to another during the year. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost, continued: |
| (c) | Loans to Banks: At the end of each year, the balances presented under this line item are detailed as follows: |
| As of December 31, 2025 | As of December 31, 2024 | |||||||||||||||||||||||
| Assets before Allowances |
Allowances established |
Net assets | Assets before Allowances |
Allowances established |
Net assets | |||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||
| Domestic Banks | ||||||||||||||||||||||||
| Interbank loans of liquidity | — | — | — | 300,042 | (895 | ) | 299,147 | |||||||||||||||||
| Commercial Interbank loans | — | — | — | — | — | — | ||||||||||||||||||
| Overdrafts on current accounts | — | — | — | — | — | — | ||||||||||||||||||
| Chilean exports foreign trade loans | — | — | — | — | — | — | ||||||||||||||||||
| Chilean imports foreign trade loans | — | — | — | — | — | — | ||||||||||||||||||
| Credits with third countries | — | — | — | — | — | — | ||||||||||||||||||
| Non-transferable deposits in domestic banks | — | — | — | — | — | — | ||||||||||||||||||
| Other debts with domestic banks | — | — | — | — | — | — | ||||||||||||||||||
| Foreign Banks | ||||||||||||||||||||||||
| Interbank loans of liquidity | — | — | — | — | — | — | ||||||||||||||||||
| Commercial Interbank loans | 204,397 | (916 | ) | 203,481 | 269,191 | (803 | ) | 268,388 | ||||||||||||||||
| Overdrafts on current accounts | — | — | — | — | — | — | ||||||||||||||||||
| Chilean exports foreign trade loans | 195,395 | (848 | ) | 194,547 | 98,470 | (290 | ) | 98,180 | ||||||||||||||||
| Chilean imports foreign trade loans | — | — | — | — | — | — | ||||||||||||||||||
| Foreign trade loans between third countries | — | — | — | — | — | — | ||||||||||||||||||
| Current account deposits with foreign banks for derivatives transactions | — | — | — | — | — | — | ||||||||||||||||||
| Other non-transferable deposits with foreign banks | — | — | — | — | — | — | ||||||||||||||||||
| Other loans with foreign banks | — | — | — | — | — | — | ||||||||||||||||||
| Subtotal Domestic and Foreign banks | 399,792 | (1,764 | ) | 398,028 | 667,703 | (1,988 | ) | 665,715 | ||||||||||||||||
| Central Bank of Chile | ||||||||||||||||||||||||
| Deposits in foreign current accounts for derivative transactions with a counterparty | — | — | — | — | — | — | ||||||||||||||||||
| Other deposits not available | — | — | — | — | — | — | ||||||||||||||||||
| Other receivables | — | — | — | — | — | — | ||||||||||||||||||
| Foreign Central Banks | ||||||||||||||||||||||||
| Deposits in foreign current accounts for derivatives transactions | — | — | — | — | — | — | ||||||||||||||||||
| Other deposits not available | — | — | — | — | — | — | ||||||||||||||||||
| Other receivables | — | — | — | — | — | — | ||||||||||||||||||
| Subtotal Central Bank of Chile and Foreign Central Banks | — | — | — | — | — | — | ||||||||||||||||||
| Total | 399,792 | (1,764 | ) | 398,028 | 667,703 | (1,988 | ) | 665,715 | ||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost, continued: |
| (c.1) | Allowance for ECL for loans to banks: |
| i. | The credit quality and the maximum exposure to credit risk based on the Bank’s internal credit rating system and year-end stage classification as of December 31, 2025 and 2024, is as follows: |
| 2025 | 2024 | |||||||||||||||||||||||||||||||
| Stage 1 Individual |
Stage 2 Individual |
Stage 3 Individual |
Total | Stage 1 Individual |
Stage 2 Individual |
Stage 3 Individual |
Total | |||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Domestic Banks | ||||||||||||||||||||||||||||||||
| Normal | — | — | — | — | 300,042 | — | — | 300,042 | ||||||||||||||||||||||||
| Substandard | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Non-performing | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Subtotal | — | — | — | — | 300,042 | — | — | 300,042 | ||||||||||||||||||||||||
| Foreign Banks | ||||||||||||||||||||||||||||||||
| Normal | 399,792 | 399,792 | 367,661 | — | — | 367,661 | ||||||||||||||||||||||||||
| Substandard | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Non-performing | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Subtotal | 399,792 | 399,792 | 367,661 | — | — | 367,661 | ||||||||||||||||||||||||||
| Central Bank of Chile | ||||||||||||||||||||||||||||||||
| Normal | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Substandard | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Non-performing | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Subtotal | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Total | 399,792 | 399,792 | 667,703 | — | — | 667,703 | ||||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost, continued: |
| (c.2) | Allowanced for ECL for loans to banks, continued: |
| ii. | Changes in gross carrying amount and corresponding allowance for ECL by stage as of December 31, 2025 and 2024, is as follows: |
| Changes as of December 31, 2025 | ||||||||||||||||||||||||||||||||
| Stage 1 Individual |
Stage 2 Individual |
Stage 3 Individual |
Total | |||||||||||||||||||||||||||||
| Gross carrying amount |
ECL | Gross carrying amount |
ECL | Gross carrying amount |
ECL | Gross carrying amount |
ECL | |||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Balance as of January 1, 2025 | 667,703 | (1,988 | ) | — | — | — | — | 667,703 | (1,988 | ) | ||||||||||||||||||||||
| Net change in Balance * | (243,668 | ) | 794 | (243,668 | ) | 794 | ||||||||||||||||||||||||||
| Transfer to Stage 1 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Transfer to Stage 2 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Transfer to Stage 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Impact on year-end ECL of exposures transferred between stages during the year ** | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Refinements to models used for calculation | — | (640 | ) | — | — | — | — | — | (640 | ) | ||||||||||||||||||||||
| Amounts written off | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Foreign exchange adjustments | (24,243 | ) | 70 | — | — | — | — | (24,243 | ) | 70 | ||||||||||||||||||||||
| Total | 399,792 | (1,764 | ) | — | — | — | — | 399,792 | (1,764 | ) | ||||||||||||||||||||||
| Changes as of December 31, 2024 | ||||||||||||||||||||||||||||||||
| Stage 1 Individual |
Stage 2 Individual |
Stage 3 Individual |
Total | |||||||||||||||||||||||||||||
| Gross carrying amount |
ECL | Gross carrying amount |
ECL | Gross carrying amount |
ECL | Gross carrying amount |
ECL | |||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Balance as of January 1, 2024 | 2,519,931 | (1,341 | ) | — | — | — | — | 2,519,931 | (1,341 | ) | ||||||||||||||||||||||
| Net change in Balance * | (1,890,430 | ) | (559 | ) | — | — | — | — | (1,890,430 | ) | (559 | ) | ||||||||||||||||||||
| Transfer to Stage 1 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Transfer to Stage 2 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Transfer to Stage 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Impact on year-end ECL of exposures transferred between stages during the year ** | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Refinements to models used for calculation | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Amounts written off | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Foreign exchange adjustments | 38,202 | (88 | ) | — | — | — | — | 38,202 | (88 | ) | ||||||||||||||||||||||
| Total | 667,703 | (1,988 | ) | — | — | — | — | 667,703 | (1,988 | ) | ||||||||||||||||||||||
| * | Net change between assets originated and assets repaid, excluding write offs. |
| ** | Represents the change in the year-end ECLs of exposures that were transferred from one stage to another during the year. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost, continued: |
| (d) | Loans to Customers: At the end of each year, the balances presented under this item are as follows: |
| As of December 31, 2025 | As of December 31, 2024 | |||||||||||||||||||||||
| Assets before Allowances |
Allowances established |
Net assets | Assets before Allowances |
Allowances established |
Net assets | |||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||
| Commercial loans | ||||||||||||||||||||||||
| Commercial loans | 15,061,510 | (188,135 | ) | 14,873,375 | 15,147,886 | (189,439 | ) | 14,958,447 | ||||||||||||||||
| Chilean exports foreign trade loans | 643,773 | (7,176 | ) | 636,597 | 1,449,806 | (8,988 | ) | 1,440,818 | ||||||||||||||||
| Accrediting foreign trade loans negotiated in terms of Chilean imports | 273 | (7 | ) | 266 | 162 | (2 | ) | 160 | ||||||||||||||||
| Chilean imports foreign trade loans | 526,247 | (10,933 | ) | 515,314 | 562,650 | (10,006 | ) | 552,644 | ||||||||||||||||
| Current account debtors | 183,334 | (6,940 | ) | 176,394 | 196,819 | (6,417 | ) | 190,402 | ||||||||||||||||
| Credit card debtors | 139,930 | (15,313 | ) | 124,617 | 128,671 | (14,323 | ) | 114,348 | ||||||||||||||||
| Factoring transactions | 833,975 | (6,319 | ) | 827,656 | 596,935 | (3,779 | ) | 593,156 | ||||||||||||||||
| Commercial lease transactions (1) | 2,096,832 | (11,225 | ) | 2,085,607 | 1,991,663 | (10,677 | ) | 1,980,986 | ||||||||||||||||
| Student loans | 47,396 | (2,110 | ) | 45,286 | 52,511 | (2,462 | ) | 50,049 | ||||||||||||||||
| Other loans and accounts receivable | 16,277 | (5,183 | ) | 11,094 | 20,877 | (8,475 | ) | 12,402 | ||||||||||||||||
| Subtotal | 19,549,547 | (253,341 | ) | 19,296,206 | 20,147,980 | (254,568 | ) | 19,893,412 | ||||||||||||||||
| Residential mortgage loans | ||||||||||||||||||||||||
| Loans secured by mortgage finance bonds | 807 | (5 | ) | 802 | 1,400 | (7 | ) | 1,393 | ||||||||||||||||
| Endorsable mortgage mutual loans | 8,614 | (30 | ) | 8,584 | 11,071 | (46 | ) | 11,025 | ||||||||||||||||
| Mortgage mutual financed with mortgage bonds | — | — | — | — | — | — | ||||||||||||||||||
| Other mortgage mutual loans | 13,763,787 | (36,395 | ) | 13,727,392 | 13,056,028 | (33,863 | ) | 13,022,165 | ||||||||||||||||
| Residential lease transactions (1) | — | — | — | — | — | — | ||||||||||||||||||
| Other loans and accounts receivable | 161,261 | (1,249 | ) | 160,012 | 164,828 | (1,716 | ) | 163,112 | ||||||||||||||||
| Subtotal | 13,934,469 | (37,679 | ) | 13,896,790 | 13,233,327 | (35,632 | ) | 13,197,695 | ||||||||||||||||
| Consumer loans | ||||||||||||||||||||||||
| Consumer loans in installments | 3,377,441 | (342,025 | ) | 3,035,416 | 3,255,475 | (333,067 | ) | 2,922,408 | ||||||||||||||||
| Current account debtors | 293,111 | (18,431 | ) | 274,680 | 284,207 | (16,671 | ) | 267,536 | ||||||||||||||||
| Credit card debtors | 2,097,110 | (59,381 | ) | 2,037,729 | 2,013,622 | (52,333 | ) | 1,961,289 | ||||||||||||||||
| Consumer lease transactions (1) | 1,199 | (81 | ) | 1,118 | 320 | (15 | ) | 305 | ||||||||||||||||
| Other loans and accounts receivable | 1,437 | (1,065 | ) | 372 | 1,365 | (1,148 | ) | 217 | ||||||||||||||||
| Subtotal | 5,770,298 | (420,983 | ) | 5,349,315 | 5,554,989 | (403,234 | ) | 5,151,755 | ||||||||||||||||
| Total | 39,254,314 | (712,003 | ) | 38,542,311 | 38,936,296 | (693,434 | ) | 38,242,862 | ||||||||||||||||
| (1) | In this item, the Bank finances its clients’ purchases of assets, including real estate and other personal property, through financial lease agreements. As of December 31, 2024, Ch$1,033,417 million corresponds to financial leases for real estate (Ch$993,167 million in December 31, 2024) and Ch$1,064,614 million corresponds to financial leases for other assets (Ch$998,816 million in December 31, 2024). |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost, continued: |
| (d.1) | Allowance for ECL for loans to customers: |
| i. | The credit quality and the maximum exposure to credit risk based on the Bank’s internal credit rating system and year-end stage classification as of December 31, 2025 and 2024, are as follows: |
| 2025 | ||||||||||||||||||||||||||||||||
| Stage 1 | Stage 2 | Stage 3 | ||||||||||||||||||||||||||||||
| Individual | Group | Individual | Group | Individual | Group | POCI | Total | |||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Commercial loans | ||||||||||||||||||||||||||||||||
| Normal | 14,116,248 | 4,034,811 | 17,382 | 434,266 | — | — | — | 18,602,707 | ||||||||||||||||||||||||
| Substandard | — | — | 232,724 | — | — | — | 224 | 232,948 | ||||||||||||||||||||||||
| Non-performing | — | — | — | — | 290,993 | 418,038 | 4,861 | 713,892 | ||||||||||||||||||||||||
| Subtotal | 14,116,248 | 4,034,811 | 250,106 | 434,266 | 290,993 | 418,038 | 5,085 | 19,549,547 | ||||||||||||||||||||||||
| Residential mortgage loans | ||||||||||||||||||||||||||||||||
| Normal | — | 12,565,482 | — | 944,665 | — | — | — | 13,510,147 | ||||||||||||||||||||||||
| Non-performing | — | — | — | — | 424,322 | — | 424,322 | |||||||||||||||||||||||||
| Subtotal | — | 12,565,482 | — | 944,665 | — | 424,322 | — | 13,934,469 | ||||||||||||||||||||||||
| Consumer loans | ||||||||||||||||||||||||||||||||
| Normal | — | 4,817,731 | — | 652,401 | — | — | — | 5,470,132 | ||||||||||||||||||||||||
| Non-performing | — | — | — | — | — | 298,905 | 1,261 | 300,166 | ||||||||||||||||||||||||
| Subtotal | — | 4,817,731 | — | 652,401 | — | 298,905 | 1,261 | 5,770,298 | ||||||||||||||||||||||||
| Total | 14,116,248 | 21,418,024 | 250,106 | 2,031,332 | 290,993 | 1,141,265 | 6,346 | 39,254,314 | ||||||||||||||||||||||||
| 2024 | ||||||||||||||||||||||||||||||||
| Stage 1 | Stage 2 | Stage 3 | ||||||||||||||||||||||||||||||
| Individual | Group | Individual | Group | Individual | Group | POCI | Total | |||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Commercial loans | ||||||||||||||||||||||||||||||||
| Normal | 14,696,311 | 4,028,591 | 50,877 | 411,964 | — | — | 25 | 19,187,768 | ||||||||||||||||||||||||
| Substandard | — | — | 244,768 | — | — | — | 1,530 | 246,298 | ||||||||||||||||||||||||
| Non-performing | — | — | — | — | 292,741 | 413,618 | 7,555 | 713,914 | ||||||||||||||||||||||||
| Subtotal | 14,696,311 | 4,028,591 | 295,645 | 411,964 | 292,741 | 413,618 | 9,110 | 20,147,980 | ||||||||||||||||||||||||
| Residential mortgage loans | ||||||||||||||||||||||||||||||||
| Normal | — | 12,036,923 | — | 843,700 | — | — | — | 12,880,623 | ||||||||||||||||||||||||
| Non-performing | — | — | — | — | — | 352,469 | 235 | 352,704 | ||||||||||||||||||||||||
| Subtotal | — | 12,036,923 | — | 843,700 | — | 352,469 | 235 | 13,233,327 | ||||||||||||||||||||||||
| Consumer loans | ||||||||||||||||||||||||||||||||
| Normal | — | 4,666,028 | — | 592,828 | — | — | 108 | 5,258,964 | ||||||||||||||||||||||||
| Non-performing | — | — | — | — | — | 294,696 | 1,329 | 296,025 | ||||||||||||||||||||||||
| Subtotal | — | 4,666,028 | — | 592,828 | — | 294,696 | 1,437 | 5,554,989 | ||||||||||||||||||||||||
| Total | 14,696,311 | 20,731,542 | 295,645 | 1,848,492 | 292,741 | 1,060,783 | 10,782 | 38,936,296 | ||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost, continued: |
| (d.1) | Allowanced for ECL for loans to customers, continued: |
| ii. | Changes in gross carrying amount and corresponding allowance for ECL by stage as of December 31, 2025 and 2024, is as follows: |
| Changes as of December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stage 1 | Stage 2 | Stage 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Individual | Group | Individual | Group | Individual | Group | POCI | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross carrying amount |
ECL | Gross carrying amount |
ECL | Gross carrying amount |
ECL | Gross carrying amount |
ECL | Gross carrying amount |
ECL | Gross carrying amount |
ECL | Gross carrying amount |
ECL | Gross carrying amount |
ECL | |||||||||||||||||||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2025 | 14,696,311 | (49,824 | ) | 4,028,591 | (18,179 | ) | 295,645 | (11,171 | ) | 411,964 | (13,665 | ) | 292,741 | (65,893 | ) | 413,618 | (94,591 | ) | 9,110 | (1,245 | ) | 20,147,980 | (254,568 | ) | ||||||||||||||||||||||||||||||||||||||||
| Net change in Balance * | (272,766 | ) | 5,628 | 311,015 | (3,440 | ) | (48,687 | ) | 5,636 | (136,443 | ) | (4,231 | ) | (44,352 | ) | (9,968 | ) | (69,654 | ) | (39,691 | ) | (4,019 | ) | 423 | (264,906 | ) | (45,643 | ) | ||||||||||||||||||||||||||||||||||||
| Transfer to Stage 1 | 230,766 | (4,083 | ) | 1,126,421 | (34,282 | ) | (228,899 | ) | 3,964 | (1,089,693 | ) | 29,412 | (1,867 | ) | 119 | (36,728 | ) | 4,870 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 2 | (304,391 | ) | 1,033 | (1,423,248 | ) | 8,476 | 305,520 | (1,501 | ) | 1,436,764 | (10,395 | ) | (1,128 | ) | 468 | (13,517 | ) | 1,919 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 3 | (4,628 | ) | 30 | (3,552 | ) | 30 | (68,231 | ) | 5,436 | (188,015 | ) | 17,792 | 72,859 | (5,466 | ) | 191,567 | (17,822 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Impact on year-end ECL of exposures transferred between stages during the year** | — | 3,125 | — | 28,322 | — | (9,023 | ) | — | (33,769 | ) | — | (8,043 | ) | — | (11,919 | ) | — | — | — | (31,307 | ) | |||||||||||||||||||||||||||||||||||||||||||
| Refinements to models used for calculation | — | (11,930 | ) | — | — | — | (739 | ) | — | — | — | — | — | — | — | — | — | (12,669 | ) | |||||||||||||||||||||||||||||||||||||||||||||
| Amounts written off | — | — | — | — | — | — | — | — | (21,735 | ) | 21,735 | (66,848 | ) | 66,848 | — | — | (88,583 | ) | 88,583 | |||||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange adjustments | (229,044 | ) | 1,044 | (4,416 | ) | 67 | (5,242 | ) | 137 | (311 | ) | 11 | (5,525 | ) | 844 | (400 | ) | 160 | (6 | ) | — | (244,944 | ) | 2,263 | ||||||||||||||||||||||||||||||||||||||||
| Subtotal Commercial loans | 14,116,248 | (54,977 | ) | 4,034,811 | (19,006 | ) | 250,106 | (7,261 | ) | 434,266 | (14,845 | ) | 290,993 | (66,204 | ) | 418,038 | (90,226 | ) | 5,085 | (822 | ) | 19,549,547 | (253,341 | ) | ||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2025 | — | — | 12,036,923 | (9,134 | ) | — | — | 843,700 | (13,988 | ) | — | — | 352,469 | (12,479 | ) | 235 | (31 | ) | 13,233,327 | (35,632 | ) | |||||||||||||||||||||||||||||||||||||||||||
| Net change in Balance * | — | — | 802,931 | (1,667 | ) | — | — | (37,809 | ) | (4,263 | ) | — | — | (55,466 | ) | (3,552 | ) | (235 | ) | 31 | 709,421 | (9,451 | ) | |||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 1 | — | — | 1,782,132 | (17,616 | ) | — | — | (1,758,693 | ) | 16,883 | — | — | (23,439 | ) | 733 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 2 | — | — | (2,053,384 | ) | 5,045 | — | — | 2,062,489 | (5,331 | ) | — | — | (9,105 | ) | 286 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 3 | — | — | (3,120 | ) | 40 | — | — | (165,022 | ) | 11,414 | — | — | 168,142 | (11,454 | ) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Impact on year-end ECL of exposures transferred between stages during the year** | — | — | — | 14,231 | — | — | — | (20,102 | ) | — | — | — | 4,996 | — | — | — | (875 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| Refinements to models used for calculation | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts written off | — | — | — | — | — | — | — | — | — | — | (8,279 | ) | 8,279 | — | — | (8,279 | ) | 8,279 | ||||||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange adjustments | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal Residential mortgage loans | — | — | 12,565,482 | (9,101 | ) | — | — | 944,665 | (15,387 | ) | — | — | 424,322 | (13,191 | ) | — | — | 13,934,469 | (37,679 | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Consumer loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2025 | — | — | 4,666,028 | (145,207 | ) | — | — | 592,828 | (96,627 | ) | — | — | 294,696 | (160,591 | ) | 1,437 | (809 | ) | 5,554,989 | (403,234 | ) | |||||||||||||||||||||||||||||||||||||||||||
| Net change in Balance * | — | — | 641,137 | (23,139 | ) | — | — | (149,545 | ) | (39,806 | ) | — | — | 73,994 | (185,531 | ) | (176 | ) | 14 | 565,410 | (248,462 | ) | ||||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 1 | — | — | 1,239,479 | (182,465 | ) | — | — | (1,193,002 | ) | 161,097 | — | — | (46,477 | ) | 21,368 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 2 | — | — | (1,721,188 | ) | 63,030 | — | — | 1,743,636 | (73,985 | ) | — | — | (22,448 | ) | 10,955 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 3 | — | — | (2,408 | ) | 150 | — | — | (341,276 | ) | 156,695 | — | — | 343,684 | (156,845 | ) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Impact on year-end ECL of exposures transferred between stages during the year** | — | — | — | 140,190 | — | — | — | (214,648 | ) | — | — | — | (39,414 | ) | — | — | — | (113,872 | ) | |||||||||||||||||||||||||||||||||||||||||||||
| Refinements to models used for calculation | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts written off | — | — | — | — | — | — | — | — | — | — | (344,542 | ) | 344,542 | — | — | (344,542 | ) | 344,542 | ||||||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange adjustments | — | — | (5,317 | ) | 40 | — | — | (240 | ) | 2 | — | — | (2 | ) | 1 | — | — | (5,559 | ) | 43 | ||||||||||||||||||||||||||||||||||||||||||||
| Subtotal Consumer loans | — | — | 4,817,731 | (147,401 | ) | — | — | 652,401 | (107,272 | ) | — | — | 298,905 | (165,515 | ) | 1,261 | (795 | ) | 5,770,298 | (420,983 | ) | |||||||||||||||||||||||||||||||||||||||||||
| Total | 14,116,248 | (54,977 | ) | 21,418,024 | (175,508 | ) | 250,106 | (7,261 | ) | 2,031,332 | (137,504 | ) | 290,993 | (66,204 | ) | 1,141,265 | (268,932 | ) | 6,346 | (1,617 | ) | 39,254,314 | (712,003 | ) | ||||||||||||||||||||||||||||||||||||||||
| * | Net change between assets originated and assets repaid excluding write offs. |
| ** | Represents the change in the year-end ECLs of exposures that were transferred from one stage to another during the year. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost, continued: |
| (d.1) | Allowanced for ECL for loans to customers, continued: |
| Changes as of December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stage 1 | Stage 2 | Stage 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Individual | Group | Individual | Group | Individual | Group | POCI | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross carrying amount | ECL | Gross carrying amount | ECL | Gross carrying amount | ECL | Gross carrying amount | ECL | Gross carrying amount | ECL | Gross carrying amount | ECL | Gross carrying amount | ECL | Gross carrying amount | ECL | |||||||||||||||||||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2024 | 14,599,022 | (55,909 | ) | 4,144,669 | (22,144 | ) | 281,123 | (10,116 | ) | 350,612 | (10,818 | ) | 265,932 | (68,390 | ) | 379,794 | (90,716 | ) | 8,892 | (1,548 | ) | 20,030,044 | (259,641 | ) | ||||||||||||||||||||||||||||||||||||||||
| Net change in Balance * | (72,104 | ) | 7,223 | 193,235 | (2,096 | ) | (80,536 | ) | 4,572 | (90,492 | ) | (2,444 | ) | (32,872 | ) | (12,716 | ) | (66,985 | ) | (42,516 | ) | 218 | 303 | (149,536 | ) | (47,674 | ) | |||||||||||||||||||||||||||||||||||||
| Transfer to Stage 1 | 161,583 | (1,822 | ) | 1,001,203 | (27,789 | ) | (161,158 | ) | 1,798 | (961,260 | ) | 21,839 | (425 | ) | 24 | (39,943 | ) | 5,950 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 2 | (336,150 | ) | 1,150 | (1,302,470 | ) | 11,433 | 352,733 | (1,796 | ) | 1,318,794 | (13,357 | ) | (16,583 | ) | 646 | (16,324 | ) | 1,924 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 3 | (5,313 | ) | 50 | (14,149 | ) | 233 | (102,974 | ) | 6,074 | (205,881 | ) | 17,966 | 108,287 | (6,124 | ) | 220,030 | (18,199 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Impact on year-end ECL of exposures transferred between stages during the year** | — | 1,113 | — | 22,291 | — | (11,514 | ) | — | (26,844 | ) | — | (15,953 | ) | — | (14,312 | ) | — | — | — | (45,219 | ) | |||||||||||||||||||||||||||||||||||||||||||
| Refinements to models used for calculation | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts written off | — | — | — | — | — | — | — | — | (37,936 | ) | 37,936 | (63,492 | ) | 63,492 | — | — | (101,428 | ) | 101,428 | |||||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange adjustments | 349,273 | (1,629 | ) | 6,103 | (107 | ) | 6,457 | (189 | ) | 191 | (7 | ) | 6,338 | (1,316 | ) | 538 | (214 | ) | — | — | 368,900 | (3,462 | ) | |||||||||||||||||||||||||||||||||||||||||
| Subtotal Commercial loans | 14,696,311 | (49,824 | ) | 4,028,591 | (18,179 | ) | 295,645 | (11,171 | ) | 411,964 | (13,665 | ) | 292,741 | (65,893 | ) | 413,618 | (94,591 | ) | 9,110 | (1,245 | ) | 20,147,980 | (254,568 | ) | ||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2024 | — | — | 11,150,943 | (9,056 | ) | — | — | 884,563 | (13,745 | ) | — | — | 275,262 | (10,701 | ) | — | — | 12,310,768 | (33,502 | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Net change in Balance * | — | — | 1,002,887 | (318 | ) | — | — | (37,060 | ) | (5,891 | ) | — | — | (37,960 | ) | (890 | ) | 235 | (31 | ) | 928,102 | (7,130 | ) | |||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 1 | — | — | 2,078,720 | (22,137 | ) | — | — | (2,057,279 | ) | 21,460 | — | — | (21,441 | ) | 677 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 2 | — | — | (2,193,666 | ) | 3,311 | — | — | 2,221,510 | (5,962 | ) | — | — | (27,844 | ) | 2,651 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 3 | — | — | (1,961 | ) | 28 | — | — | (168,034 | ) | 11,315 | — | — | 169,995 | (11,343 | ) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Impact on year-end ECL of exposures transferred between stages during the year** | — | — | — | 19,038 | — | — | — | (21,165 | ) | — | — | — | 1,584 | — | — | — | (543 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| Refinements to models used for calculation | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts written off | — | — | — | — | — | — | — | — | — | — | (5,543 | ) | 5,543 | — | — | (5,543 | ) | 5,543 | ||||||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange adjustments | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal Residential mortgage loans | — | — | 12,036,923 | (9,134 | ) | — | — | 843,700 | (13,988 | ) | — | — | 352,469 | (12,479 | ) | 235 | (31 | ) | 13,233,327 | (35,632 | ) | |||||||||||||||||||||||||||||||||||||||||||
| Consumer loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2024 | — | — | 4,447,346 | (164,290 | ) | — | — | 578,426 | (94,190 | ) | — | — | 283,203 | (157,673 | ) | 1,487 | (891 | ) | 5,310,462 | (417,044 | ) | |||||||||||||||||||||||||||||||||||||||||||
| Net change in Balance * | — | — | 645,182 | (33,166 | ) | — | — | (149,276 | ) | (13,955 | ) | — | — | 79,130 | (183,514 | ) | (50 | ) | 82 | 574,986 | (230,553 | ) | ||||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 1 | — | — | 1,219,853 | (167,617 | ) | — | — | (1,160,767 | ) | 140,356 | — | — | (59,086 | ) | 27,261 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 2 | — | — | (1,644,109 | ) | 99,147 | — | — | 1,669,245 | (110,753 | ) | — | — | (25,136 | ) | 11,606 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Transfer to Stage 3 | — | — | (9,678 | ) | 775 | — | — | (345,130 | ) | 152,660 | — | — | 354,808 | (153,435 | ) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Impact on year-end ECL of exposures transferred between stages during the year** | — | — | — | 120,007 | — | — | — | (170,742 | ) | — | — | — | (43,061 | ) | — | — | — | (93,796 | ) | |||||||||||||||||||||||||||||||||||||||||||||
| Refinements to models used for calculation | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts written off | — | — | — | — | — | — | — | — | — | — | (338,227 | ) | 338,227 | — | — | (338,227 | ) | 338,227 | ||||||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange adjustments | — | — | 7434 | (63 | ) | — | — | 330 | (3 | ) | — | — | 4 | (2 | ) | — | — | 7,768 | (68 | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Subtotal Consumer loans | — | — | 4,666,028 | (145,207 | ) | — | — | 592,828 | (96,627 | ) | — | — | 294,696 | (160,591 | ) | 1,437 | (809 | ) | 5,554,989 | (403,234 | ) | |||||||||||||||||||||||||||||||||||||||||||
| Total | 14,696,311 | (49,824 | ) | 20,731,542 | (172,520 | ) | 295,645 | (11,171 | ) | 1,848,492 | (124,280 | ) | 292,741 | (65,893 | ) | 1,060,783 | (267,661 | ) | 10,782 | (2,085 | ) | 38,936,296 | (693,434 | ) | ||||||||||||||||||||||||||||||||||||||||
| * | Net change between assets originated and assets repaid excluding write offs. | |
| ** | Represents the change in the year-end ECLs of exposures that were transferred from one stage to another during the year. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost, continued: |
| (e) | Loans by industry sector: |
The following table details the Bank’s loan portfolio as of December 31, 2025 and 2024 by the customer’s industry sector and their respective economic activity:
| Loans and Contingent loans Exposure | Allowances Established | |||||||||||||||||||||||||||||||||||||||||||||||
| Domestic loans | Foreign loans | Total | Total | Domestic loans | Foreign loans | Total | Total | |||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||||||||
| Loans to Banks | — | 300,042 | 399,792 | 367,661 | 399,792 | 667,703 | — | (895 | ) | (1,764 | ) | (1,093 | ) | (1,764 | ) | (1,988 | ) | |||||||||||||||||||||||||||||||
| Commercial loans | ||||||||||||||||||||||||||||||||||||||||||||||||
| Agriculture and livestock | 793,863 | 751,838 | — | — | 793,863 | 751,838 | (10,048 | ) | (9,240 | ) | — | — | (10,048 | ) | (9,240 | ) | ||||||||||||||||||||||||||||||||
| Fruit | 659,847 | 730,718 | — | — | 659,847 | 730,718 | (4,847 | ) | (9,087 | ) | — | — | (4,847 | ) | (9,087 | ) | ||||||||||||||||||||||||||||||||
| Forestry | 83,715 | 89,777 | — | — | 83,715 | 89,777 | (2,542 | ) | (2,767 | ) | — | — | (2,542 | ) | (2,767 | ) | ||||||||||||||||||||||||||||||||
| Fishing | 31,258 | 29,465 | — | — | 31,258 | 29,465 | (408 | ) | (644 | ) | — | — | (408 | ) | (644 | ) | ||||||||||||||||||||||||||||||||
| Mining | 245,278 | 864,867 | — | — | 245,278 | 864,867 | (2,724 | ) | (3,750 | ) | — | — | (2,724 | ) | (3,750 | ) | ||||||||||||||||||||||||||||||||
| Oil and natural gas | 113 | 211 | — | — | 113 | 211 | (10 | ) | (8 | ) | — | — | (10 | ) | (8 | ) | ||||||||||||||||||||||||||||||||
| Product manufacturing industries: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Foods, beverages and tobacco | 715,993 | 657,462 | — | — | 715,993 | 657,462 | (6,014 | ) | (5,893 | ) | — | — | (6,014 | ) | (5,893 | ) | ||||||||||||||||||||||||||||||||
| Textiles, leather goods and footwear | 23,987 | 28,874 | — | — | 23,987 | 28,874 | (503 | ) | (788 | ) | — | — | (503 | ) | (788 | ) | ||||||||||||||||||||||||||||||||
| Woods and furnitures | 83,797 | 89,394 | — | — | 83,797 | 89,394 | (1,185 | ) | (1,225 | ) | — | — | (1,185 | ) | (1,225 | ) | ||||||||||||||||||||||||||||||||
| Cellulose, Paper and printing | 17,265 | 15,882 | — | — | 17,265 | 15,882 | (468 | ) | (365 | ) | — | — | (468 | ) | (365 | ) | ||||||||||||||||||||||||||||||||
| Chemicals and petroleum products | 167,929 | 321,820 | — | — | 167,929 | 321,820 | (2,302 | ) | (2,389 | ) | — | — | (2,302 | ) | (2,389 | ) | ||||||||||||||||||||||||||||||||
| Metal, non-metal, machine or others | 512,341 | 482,281 | — | — | 512,341 | 482,281 | (5,578 | ) | (5,541 | ) | — | — | (5,578 | ) | (5,541 | ) | ||||||||||||||||||||||||||||||||
| Electricity, gas and water | 239,128 | 242,052 | 1,366 | 104,988 | 240,494 | 347,040 | (1,722 | ) | (1,448 | ) | (6 | ) | (27 | ) | (1,728 | ) | (1,475 | ) | ||||||||||||||||||||||||||||||
| Residential construction | 175,680 | 195,883 | — | — | 175,680 | 195,883 | (5,342 | ) | (6,461 | ) | — | — | (5,342 | ) | (6,461 | ) | ||||||||||||||||||||||||||||||||
| Non-residential construction (office, civil engineering) | 494,347 | 482,763 | — | — | 494,347 | 482,763 | (5,785 | ) | (10,126 | ) | — | — | (5,785 | ) | (10,126 | ) | ||||||||||||||||||||||||||||||||
| Wholesale | 1,493,771 | 1,581,915 | — | — | 1,493,771 | 1,581,915 | (29,895 | ) | (31,119 | ) | — | — | (29,895 | ) | (31,119 | ) | ||||||||||||||||||||||||||||||||
| Retail, restaurants and hotels | 1,050,581 | 1,044,935 | — | — | 1,050,581 | 1,044,935 | (38,252 | ) | (35,983 | ) | — | — | (38,252 | ) | (35,983 | ) | ||||||||||||||||||||||||||||||||
| Transport and storage | 1,039,488 | 1,036,903 | — | — | 1,039,488 | 1,036,903 | (14,613 | ) | (14,832 | ) | — | — | (14,613 | ) | (14,832 | ) | ||||||||||||||||||||||||||||||||
| Communications | 198,913 | 214,386 | — | — | 198,913 | 214,386 | (2,877 | ) | (2,746 | ) | — | — | (2,877 | ) | (2,746 | ) | ||||||||||||||||||||||||||||||||
| Financial services | 2,806,643 | 2,995,023 | 36,162 | — | 2,842,805 | 2,995,023 | (11,278 | ) | (8,090 | ) | (162 | ) | — | (11,440 | ) | (8,090 | ) | |||||||||||||||||||||||||||||||
| Business services | 2,280,152 | 1,973,354 | — | — | 2,280,152 | 1,973,354 | (46,436 | ) | (39,158 | ) | — | — | (46,436 | ) | (39,158 | ) | ||||||||||||||||||||||||||||||||
| Real estate services | 3,535,915 | 3,349,165 | 2,323 | 14,882 | 3,538,238 | 3,364,047 | (13,773 | ) | (15,786 | ) | (2 | ) | (114 | ) | (13,775 | ) | (15,900 | ) | ||||||||||||||||||||||||||||||
| Student loans | 47,395 | 52,511 | — | — | 47,395 | 52,511 | (2,110 | ) | (2,462 | ) | — | — | (2,110 | ) | (2,462 | ) | ||||||||||||||||||||||||||||||||
| Government administration, defence and police force | 26,116 | 16,895 | — | — | 26,116 | 16,895 | (377 | ) | (228 | ) | — | — | (377 | ) | (228 | ) | ||||||||||||||||||||||||||||||||
| Social services and other community services | 909,366 | 900,847 | — | — | 909,366 | 900,847 | (14,424 | ) | (13,430 | ) | — | — | (14,424 | ) | (13,430 | ) | ||||||||||||||||||||||||||||||||
| Personal services | 1,876,815 | 1,878,889 | — | — | 1,876,815 | 1,878,889 | (29,658 | ) | (30,861 | ) | — | — | (29,658 | ) | (30,861 | ) | ||||||||||||||||||||||||||||||||
| Subtotal | 19,509,696 | 20,028,110 | 39,851 | 119,870 | 19,549,547 | 20,147,980 | (253,171 | ) | (254,427 | ) | (170 | ) | (141 | ) | (253,341 | ) | (254,568 | ) | ||||||||||||||||||||||||||||||
| Residential mortgage loans | 13,934,469 | 13,233,327 | — | — | 13,934,469 | 13,233,327 | (37,679 | ) | (35,632 | ) | — | — | (37,679 | ) | (35,632 | ) | ||||||||||||||||||||||||||||||||
| Consumer loans | 5,770,298 | 5,554,989 | — | — | 5,770,298 | 5,554,989 | (420,983 | ) | (403,234 | ) | — | — | (420,983 | ) | (403,234 | ) | ||||||||||||||||||||||||||||||||
| Contingent loan exposure | 15,434,703 | 15,080,768 | — | — | 15,434,703 | 15,080,768 | (85,707 | ) | (87,485 | ) | — | — | (85,707 | ) | (87,485 | ) | ||||||||||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost, continued: |
| (f) | Loans by tranches of days past-due: |
The following table details the Bank’s loan portfolio as of December 31, 2025 and 2024 by tranches of days past-due:
| Financial assets before allowances | Allowances established | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| As of December 31, 2025 | Stage
1 Evaluation |
Stage
2 Evaluation |
Stage
3 Evaluation |
Stage
1 Evaluation |
Stage
2 Evaluation |
Stage
3 Evaluation |
Net Financial |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Individual | Group | Individual | Group | Individual | Group | POCI | Total | Individual | Group | Individual | Group | Individual | Group | POCI | Total | Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans to Banks | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 days | 275,178 | — | — | — | — | — | — | 275,178 | (1,229 | ) | — | — | — | — | — | — | (1,229 | ) | 273,949 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 1 to 29 days | 124,614 | — | — | — | — | — | — | 124,614 | (535 | ) | — | — | — | — | — | — | (535 | ) | 124,079 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 30 to 59 days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 60 to 89 days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| > = 90 days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 399,792 | — | — | — | — | — | — | 399,792 | (1,764 | ) | — | — | — | — | — | — | (1,764 | ) | 398,028 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 days | 13,984,222 | 4,030,621 | 211,316 | 210,063 | 85,887 | 95,530 | 2,388 | 18,620,027 | (54,128 | ) | (18,874 | ) | (5,393 | ) | (2,782 | ) | (17,088 | ) | (13,661 | ) | (391 | ) | (112,317 | ) | 18,507,710 | |||||||||||||||||||||||||||||||||||||||||||
| 1 to 29 days | 113,716 | 3,362 | 27,551 | 157,768 | 39,517 | 36,164 | 2,697 | 380,775 | (726 | ) | (107 | ) | (1,064 | ) | (6,948 | ) | (4,045 | ) | (4,404 | ) | (431 | ) | (17,725 | ) | 363,050 | |||||||||||||||||||||||||||||||||||||||||||
| 30 to 59 days | 18,310 | 828 | 9,901 | 51,819 | 14,562 | 38,309 | — | 133,729 | (123 | ) | (23 | ) | (678 | ) | (3,546 | ) | (2,345 | ) | (5,147 | ) | — | (11,862 | ) | 121,867 | ||||||||||||||||||||||||||||||||||||||||||||
| 60 to 89 days | — | — | 1,338 | 14,616 | 11,781 | 21,951 | — | 49,686 | — | (2 | ) | (126 | ) | (1,569 | ) | (1,801 | ) | (3,370 | ) | — | (6,868 | ) | 42,818 | |||||||||||||||||||||||||||||||||||||||||||||
| > = 90 days | — | — | — | — | 139,246 | 226,084 | — | 365,330 | — | — | — | — | (40,925 | ) | (63,644 | ) | — | (104,569 | ) | 260,761 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 14,116,248 | 4,034,811 | 250,106 | 434,266 | 290,993 | 418,038 | 5,085 | 19,549,547 | (54,977 | ) | (19,006 | ) | (7,261 | ) | (14,845 | ) | (66,204 | ) | (90,226 | ) | (822 | ) | (253,341 | ) | 19,296,206 | |||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 days | — | 12,425,194 | — | 668,702 | — | 75,124 | — | 13,169,020 | — | (7,664 | ) | — | (5,209 | ) | — | (2,843 | ) | — | (15,716 | ) | 13,153,304 | |||||||||||||||||||||||||||||||||||||||||||||||
| 1 to 29 days | — | 140,288 | — | 142,654 | — | 39,861 | — | 322,803 | — | (1,437 | ) | — | (3,227 | ) | — | (1,158 | ) | — | (5,822 | ) | 316,981 | |||||||||||||||||||||||||||||||||||||||||||||||
| 30 to 59 days | — | — | — | 99,433 | — | 42,995 | — | 142,428 | — | — | — | (4,491 | ) | — | (1,235 | ) | — | (5,726 | ) | 136,702 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 60 to 89 days | — | — | — | 33,876 | — | 31,760 | — | 65,636 | — | — | — | (2,460 | ) | — | (890 | ) | — | (3,350 | ) | 62,286 | ||||||||||||||||||||||||||||||||||||||||||||||||
| > = 90 days | — | — | — | — | — | 234,582 | — | 234,582 | — | — | — | — | — | (7,065 | ) | — | (7,065 | ) | 227,517 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | — | 12,565,482 | — | 944,665 | — | 424,322 | — | 13,934,469 | — | (9,101 | ) | — | (15,387 | ) | — | (13,191 | ) | — | (37,679 | ) | 13,896,790 | |||||||||||||||||||||||||||||||||||||||||||||||
| Consumer loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 days | — | 4,811,443 | — | 399,581 | — | 81,976 | 227 | 5,293,227 | — | (146,533 | ) | — | (23,159 | ) | — | (39,909 | ) | (130 | ) | (209,731 | ) | 5,083,496 | ||||||||||||||||||||||||||||||||||||||||||||||
| 1 to 29 days | — | 6,288 | — | 162,176 | — | 30,494 | 1,034 | 199,992 | — | (868 | ) | — | (46,030 | ) | — | (15,201 | ) | (665 | ) | (62,764 | ) | 137,228 | ||||||||||||||||||||||||||||||||||||||||||||||
| 30 to 59 days | — | — | — | 64,450 | — | 39,232 | — | 103,682 | — | — | — | (24,778 | ) | — | (21,397 | ) | — | (46,175 | ) | 57,507 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 60 to 89 days | — | — | — | 26,194 | — | 26,112 | — | 52,306 | — | — | — | (13,305 | ) | — | (14,762 | ) | — | (28,067 | ) | 24,239 | ||||||||||||||||||||||||||||||||||||||||||||||||
| > = 90 days | — | — | — | — | — | 121,091 | — | 121,091 | — | — | — | — | — | (74,246 | ) | — | (74,246 | ) | 46,845 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | — | 4,817,731 | — | 652,401 | — | 298,905 | 1,261 | 5,770,298 | — | (147,401 | ) | — | (107,272 | ) | — | (165,515 | ) | (795 | ) | (420,983 | ) | 5,349,315 | ||||||||||||||||||||||||||||||||||||||||||||||
| Total Loans | 14,516,040 | 21,418,024 | 250,106 | 2,031,332 | 290,993 | 1,141,265 | 6,346 | 39,654,106 | (56,741 | ) | (175,508 | ) | (7,261 | ) | (137,504 | ) | (66,204 | ) | (268,932 | ) | (1,617 | ) | (713,767 | ) | 38,940,339 | |||||||||||||||||||||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost, continued: |
| (f) | Loans by tranches of days past-due, continued: |
| Financial assets before allowances | Allowances established | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| As of December 31, 2024 | Stage
1 Evaluation |
Stage
2 Evaluation |
Stage
3 Evaluation |
Stage
1 Evaluation |
Stage
2 Evaluation |
Stage
3 Evaluation |
Net Financial |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Individual | Group | Individual | Group | Individual | Group | POCI | Total | Individual | Group | Individual | Group | Individual | Group | POCI | Total | Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans to Banks | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 days | 596,974 | — | — | — | — | — | — | 596,974 | (1,781 | ) | — | — | — | — | — | — | (1,781 | ) | 595,193 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 1 to 29 days | 70,729 | — | — | — | — | — | — | 70,729 | (207 | ) | — | — | — | — | — | — | (207 | ) | 70,522 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 30 to 59 days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 60 to 89 days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| > = 90 days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 667,703 | — | — | — | — | — | — | 667,703 | (1,988 | ) | — | — | — | — | — | — | (1,988 | ) | 665,715 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 days | 14,460,417 | 4,022,272 | 260,184 | 216,024 | 142,884 | 98,943 | 8,434 | 19,209,158 | (48,974 | ) | (18,047 | ) | (9,754 | ) | (3,036 | ) | (20,514 | ) | (15,003 | ) | (809 | ) | (116,137 | ) | 19,093,021 | |||||||||||||||||||||||||||||||||||||||||||
| 1 to 29 days | 214,772 | 6,319 | 22,159 | 139,909 | 18,146 | 35,517 | 676 | 437,498 | (764 | ) | (132 | ) | (858 | ) | (5,985 | ) | (2,750 | ) | (5,129 | ) | (436 | ) | (16,054 | ) | 421,444 | |||||||||||||||||||||||||||||||||||||||||||
| 30 to 59 days | 12,415 | — | 10,990 | 43,057 | 22,310 | 34,271 | — | 123,043 | (34 | ) | — | (380 | ) | (3,106 | ) | (6,776 | ) | (5,361 | ) | — | (15,657 | ) | 107,386 | |||||||||||||||||||||||||||||||||||||||||||||
| 60 to 89 days | 8,707 | — | 2,312 | 12,974 | 8,749 | 20,850 | — | 53,592 | (52 | ) | — | (179 | ) | (1,538 | ) | (1,076 | ) | (3,718 | ) | — | (6,563 | ) | 47,029 | |||||||||||||||||||||||||||||||||||||||||||||
| > = 90 days | — | — | — | — | 100,652 | 224,037 | — | 324,689 | — | — | — | — | (34,777 | ) | (65,380 | ) | — | (100,157 | ) | 224,532 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 14,696,311 | 4,028,591 | 295,645 | 411,964 | 292,741 | 413,618 | 9,110 | 20,147,980 | (49,824 | ) | (18,179 | ) | (11,171 | ) | (13,665 | ) | (65,893 | ) | (94,591 | ) | (1,245 | ) | (254,568 | ) | 19,893,412 | |||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 days | — | 11,924,679 | — | 594,254 | — | 65,275 | 235 | 12,584,443 | — | (7,796 | ) | — | (4,747 | ) | — | (3,047 | ) | (31 | ) | (15,621 | ) | 12,568,822 | ||||||||||||||||||||||||||||||||||||||||||||||
| 1 to 29 days | — | 112,244 | — | 128,071 | — | 35,915 | — | 276,230 | — | (1,338 | ) | — | (2,746 | ) | — | (1,031 | ) | — | (5,115 | ) | 271,115 | |||||||||||||||||||||||||||||||||||||||||||||||
| 30 to 59 days | — | — | — | 90,397 | — | 36,030 | — | 126,427 | — | — | — | (4,185 | ) | — | (1,054 | ) | — | (5,239 | ) | 121,188 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 60 to 89 days | — | — | — | 30,978 | — | 24,045 | — | 55,023 | — | — | — | (2,310 | ) | — | (755 | ) | — | (3,065 | ) | 51,958 | ||||||||||||||||||||||||||||||||||||||||||||||||
| > = 90 days | — | — | — | — | — | 191,204 | — | 191,204 | — | — | — | — | — | (6,592 | ) | — | (6,592 | ) | 184,612 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | — | 12,036,923 | — | 843,700 | — | 352,469 | 235 | 13,233,327 | — | (9,134 | ) | — | (13,988 | ) | — | (12,479 | ) | (31 | ) | (35,632 | ) | 13,197,695 | ||||||||||||||||||||||||||||||||||||||||||||||
| Consumer loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 days | — | 4,661,049 | — | 378,949 | — | 92,941 | 537 | 5,133,476 | — | (144,631 | ) | — | (24,156 | ) | — | (45,890 | ) | (229 | ) | (214,906 | ) | 4,918,570 | ||||||||||||||||||||||||||||||||||||||||||||||
| 1 to 29 days | — | 4,979 | — | 142,585 | — | 32,946 | 900 | 181,410 | — | (576 | ) | — | (42,433 | ) | — | (16,250 | ) | (580 | ) | (59,839 | ) | 121,571 | ||||||||||||||||||||||||||||||||||||||||||||||
| 30 to 59 days | — | — | — | 53,655 | — | 36,266 | — | 89,921 | — | — | — | (21,220 | ) | — | (19,455 | ) | — | (40,675 | ) | 49,246 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 60 to 89 days | — | — | — | 17,639 | — | 25,996 | — | 43,635 | — | — | — | (8,818 | ) | — | (14,668 | ) | — | (23,486 | ) | 20,149 | ||||||||||||||||||||||||||||||||||||||||||||||||
| > = 90 days | — | — | — | — | — | 106,547 | — | 106,547 | — | — | — | — | — | (64,328 | ) | — | (64,328 | ) | 42,219 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | — | 4,666,028 | — | 592,828 | — | 294,696 | 1,437 | 5,554,989 | — | (145,207 | ) | — | (96,627 | ) | — | (160,591 | ) | (809 | ) | (403,234 | ) | 5,151,755 | ||||||||||||||||||||||||||||||||||||||||||||||
| Total Loans | 15,364,014 | 20,731,542 | 295,645 | 1,848,492 | 292,741 | 1,060,783 | 10,782 | 39,603,999 | (51,812 | ) | (172,520 | ) | (11,171 | ) | (124,280 | ) | (65,893 | ) | (267,661 | ) | (2,085 | ) | (695,422 | ) | 38,908,577 | |||||||||||||||||||||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost, continued: |
| (g) | Financial Lease Contracts: |
As of December 31, 2025 and 2024, the Bank’s scheduled cash flows to be received from financial leasing contracts have the following maturities as follows:
| Total receivable | Unearned income | Net lease receivable (*) | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||
| Due within one year | 710,040 | 668,951 | (103,108 | ) | (99,075 | ) | 606,932 | 569,876 | ||||||||||||||||
| Due after 1 year but within 2 years | 535,475 | 501,065 | (75,325 | ) | (71,170 | ) | 460,150 | 429,895 | ||||||||||||||||
| Due after 2 years but within 3 years | 352,493 | 343,985 | (47,794 | ) | (45,055 | ) | 304,699 | 298,930 | ||||||||||||||||
| Due after 3 years but within 4 years | 246,887 | 211,905 | (31,701 | ) | (29,193 | ) | 215,186 | 182,712 | ||||||||||||||||
| Due after 4 years but within 5 years | 152,099 | 165,414 | (21,669 | ) | (20,517 | ) | 130,430 | 144,897 | ||||||||||||||||
| Due after 5 years | 414,606 | 401,645 | (47,937 | ) | (45,823 | ) | 366,669 | 355,822 | ||||||||||||||||
| Total | 2,411,600 | 2,292,965 | (327,534 | ) | (310,833 | ) | 2,084,066 | 1,982,132 | ||||||||||||||||
| (*) | The net balance receivable does not include the total overdue portfolio totaling Ch$13,965 million and Ch$9,851 million as of December 31, 2025 and 2024, respectively. This overdue portfolio only reflects the past due portion without considering the remaining outstanding principal and interest. |
The Bank maintains financial lease operations associated with real estate, industrial machinery, vehicles and transportation equipment. These leases contracts have an average term between 2 and 15 years.
| (h) | Purchase of loan portfolio: |
During the year ended as of December 31, 2025 and 2024 no portfolio purchases were made.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 11. | Financial assets at amortized cost, continued: |
| (i) | Sale or transfer of loans: |
During 2025 and 2024 the Bank has carried out transactions of sale or transfers of the loan portfolio according to the following:
| As of December 31, 2025 | ||||||||||||||||
| Carrying amount | Allowances released | Sale price | Effect on income (loss) gain | |||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||
| Sale of outstanding loans | 17.954 | — | 17.954 | — | ||||||||||||
| Sale of write-off loans | — | — | — | — | ||||||||||||
| Total | 17.954 | — | 17.954 | — | ||||||||||||
| As of December 31, 2024 | ||||||||||||||||
| Carrying amount | Allowances released | Sale price | Effect on income (loss) gain (*) | |||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||
| Sale of outstanding loans | 4,273 | (410 | ) | 4,045 | 182 | |||||||||||
| Sale of write-off loans | — | — | 18 | 18 | ||||||||||||
| Total | 4,273 | (410 | ) | 4,063 | 200 | |||||||||||
| (j) | Securitization of own assets: |
During the years 2025 and 2024, there are not securitization transactions executed involving its own assets.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 12. | Investments in Other Companies: |
| (a) | At the end of each year, investments are presented according to the following detail: |
|
Ownership Interest % |
Assets | |||||||||||||||||
| Company | Shareholder | 2025 | 2024 | 2025 | 2024 | |||||||||||||
| % | % | MCh$ | MCh$ | |||||||||||||||
| Associates | ||||||||||||||||||
| Transbank S.A. | Banco de Chile | 26.16 | 26.16 | 44,601 | 38,660 | |||||||||||||
| Redbanc S.A. | Banco de Chile | 38.13 | 38.13 | 6,685 | 5,447 | |||||||||||||
| Centro de Compensación Automatizado S.A. | Banco de Chile | 33.33 | 33.33 | 6,296 | 6,784 | |||||||||||||
| Sociedad Interbancaria de Depósito de Valores S.A. | Banco de Chile | 26.81 | 26.81 | 3,078 | 2,704 | |||||||||||||
| Administrador Financiero de Transantiago S.A. | Banco de Chile | 20.00 | 20.00 | 2,101 | 2,210 | |||||||||||||
| Servicios de Infraestructura de Mercado OTC S.A. | Banco de Chile | 12.33 | 12.33 | 1,861 | 1,902 | |||||||||||||
| Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A. | Banco de Chile | 15.00 | 15.00 | 1,511 | 1,312 | |||||||||||||
| Subtotal Associates | 66,133 | 59,019 | ||||||||||||||||
| Joint Ventures | ||||||||||||||||||
| Servipag Ltda. | Banco de Chile | 50.00 | 50.00 | 9,695 | 8,258 | |||||||||||||
| Subtotal | 9,695 | 8,258 | ||||||||||||||||
| Total | 75,828 | 67,277 | ||||||||||||||||
| (b) | The reconciliation between opening and ending balance of investments in other companies that are not consolidated in 2025, 2024 and 2023 is detailed as follows: |
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Balance as of January 1, | 67,277 | 65,082 | 56,177 | |||||||||
| Share of profit or loss of companies with significant influence and joint control | 11,983 | 8,730 | 13,409 | |||||||||
| Dividends received | (3,374 | ) | (3,019 | ) | (4,675 | ) | ||||||
| Reclassification to non-current assets for sale | (1,572 | ) | ||||||||||
| Other | (58 | ) | (1,944 | ) | 171 | |||||||
| Balance as of December 31, | 75,828 | 67,277 | 65,082 | |||||||||
| (c) | During the year ended December 31, 2025 and 2024, no impairment has been recorded in these investments. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 12. | Investments in Other Companies, continued: |
| (d) | The total carrying amount of the Bank’s Associates and Joint Ventures as of December 31, 2025 and 2024 is explained as follows: |
| Associates | Joint Ventures | |||||||||||||||||||||||||||||||
| Centro de Compensación Automatizado S.A. | Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A. | Sociedad Interbancaria de Depósito de Valores S.A. | Redbanc S.A. | Transbank S.A. | Administrador Financiero del Transantiago S.A. | Servicios de Infraestructura de Mercado OTC S.A. | Servipag Ltda. | |||||||||||||||||||||||||
| December 2025 | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Current assets | 11,318 | 1,948 | 113 | 17,683 | 1,510,782 | 62,043 | 23,022 | 75,456 | ||||||||||||||||||||||||
| Non-current assets | 11,014 | 9,512 | 11,382 | 12,516 | 126,168 | 814 | 12,510 | 19,150 | ||||||||||||||||||||||||
| Total Assets | 22,332 | 11,460 | 11,495 | 30,199 | 1,636,950 | 62,857 | 35,532 | 94,606 | ||||||||||||||||||||||||
| Current liabilities | 3,816 | 1,599 | 608 | 12,896 | 1,437,807 | 51,445 | 19,976 | 69,469 | ||||||||||||||||||||||||
| Non-current liabilities | 229 | 259 | — | 108 | 29,243 | 1,659 | 536 | 5,748 | ||||||||||||||||||||||||
| Total Liabilities | 4,045 | 1,858 | 608 | 13,004 | 1,467,050 | 53,104 | 20,512 | 75,217 | ||||||||||||||||||||||||
| Equity | 18,287 | 9,602 | 10,887 | 17,195 | 169,900 | 9,753 | 15,011 | 19,389 | ||||||||||||||||||||||||
| Non-controlling interest | — | — | — | — | — | — | 9 | — | ||||||||||||||||||||||||
| Total Liabilities and Equity | 22,332 | 11,460 | 11,495 | 30,199 | 1,636,950 | 62,857 | 35,532 | 94,606 | ||||||||||||||||||||||||
| Operating income | 23,082 | 7,748 | 2 | 63,621 | 895,308 | 5,236 | 8,782 | 42,073 | ||||||||||||||||||||||||
| Operating expenses | (15,635 | ) | (6,054 | ) | (54 | ) | (59,339 | ) | (725,117 | ) | (2,654 | ) | (9,302 | ) | (39,118 | ) | ||||||||||||||||
| Other income (expenses) | 602 | 364 | 2,045 | 137 | (142,240 | ) | 696 | 741 | 839 | |||||||||||||||||||||||
| Income before tax | 8,049 | 2,058 | 1,993 | 4,419 | 27,951 | 3,278 | 221 | 3,794 | ||||||||||||||||||||||||
| Income tax | (2,027 | ) | (477 | ) | — | (1,064 | ) | (5,853 | ) | (773 | ) | 34 | (920 | ) | ||||||||||||||||||
| Income for the year | 6,022 | 1,581 | 1,993 | 3,355 | 22,098 | 2,505 | 255 | 2,874 | ||||||||||||||||||||||||
| Associates | Joint Ventures | |||||||||||||||||||||||||||||||
| Centro de Compensación Automatizado S.A. | Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A. | Sociedad
Interbancaria de Depósito de Valores |
Redbanc S.A. | Transbank S.A. | Administrador Financiero del Transantiago S.A. | Servicios de Infraestructura de Mercado OTC S.A. | Servipag Ltda. | |||||||||||||||||||||||||
| December 2024 | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Current assets | 13,958 | 1,737 | 60 | 15,347 | 1,814,213 | 58,605 | 11,562 | 101,289 | ||||||||||||||||||||||||
| Non-current assets | 9,462 | 8,223 | 10,036 | 14,062 | 161,533 | 887 | 11,538 | 21,034 | ||||||||||||||||||||||||
| Total Assets | 23,420 | 9,960 | 10,096 | 29,409 | 1,975,746 | 59,492 | 23,100 | 122,323 | ||||||||||||||||||||||||
| Current liabilities | 3,585 | 1,120 | 551 | 13,366 | 1,811,753 | 46,985 | 7,285 | 98,808 | ||||||||||||||||||||||||
| Non-current liabilities | 43 | 384 | — | 1,932 | 17,176 | 2,371 | 748 | 6,999 | ||||||||||||||||||||||||
| Total Liabilities | 3,628 | 1,504 | 551 | 15,298 | 1,828,929 | 49,356 | 8,033 | 105,807 | ||||||||||||||||||||||||
| Equity | 19,792 | 8,456 | 9,545 | 14,111 | 146,817 | 10,136 | 15,058 | 16,516 | ||||||||||||||||||||||||
| Non-controlling interest | — | — | — | — | — | — | 9 | — | ||||||||||||||||||||||||
| Total Liabilities and Equity | 23,420 | 9,960 | 10,096 | 29,409 | 1,975,746 | 59,492 | 23,100 | 122,323 | ||||||||||||||||||||||||
| Operating income | 21,282 | 6,651 | 9 | 60,139 | 888,114 | 5,023 | 8,979 | 44,161 | ||||||||||||||||||||||||
| Operating expenses | (14,545 | ) | (5,843 | ) | (54 | ) | (58,167 | ) | (722,391 | ) | (2,541 | ) | (8,557 | ) | (40,929 | ) | ||||||||||||||||
| Other income (expenses) | 741 | 390 | 1,848 | 234 | (154,142 | ) | 1,424 | 1,002 | 1,185 | |||||||||||||||||||||||
| Income before tax | 7,478 | 1,198 | 1,803 | 2,206 | 11,581 | 3,906 | 1,424 | 4,417 | ||||||||||||||||||||||||
| Income tax | (1,853 | ) | (231 | ) | — | (467 | ) | (1,736 | ) | (855 | ) | (202 | ) | (1,066 | ) | |||||||||||||||||
| Income for the year | 5,625 | 967 | 1,803 | 1,739 | 9,845 | 3,051 | 1,222 | 3,351 | ||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 13. | Intangible Assets: |
| (a) | As of December 31, 2025 and 2024 intangible assets are detailed as follows: |
| Useful Life | Average remaining amortization period | Gross balance | Accumulated Amortization | Net balance | ||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
| Years | Years | Years | Years | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||
| Other Intangible Assets: | ||||||||||||||||||||||||||||||||||||||||
| Goodwill | — | — | — | — | 16,714 | 16,714 | — | — | 16,714 | 16,714 | ||||||||||||||||||||||||||||||
| Intangible assets arising from business combinations | — | — | — | — | 56,249 | 56,249 | (39,553 | ) | (39,553 | ) | 16,696 | 16,696 | ||||||||||||||||||||||||||||
| Software or computer programs | 6 | 6 | 4 | 4 | 433,569 | 379,572 | (258,991 | ) | (221,016 | ) | 174,578 | 158,556 | ||||||||||||||||||||||||||||
| Total | 506,532 | 452,535 | (298,544 | ) | (260,569 | ) | 207,988 | 191,966 | ||||||||||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 13. | Intangible Assets, continued: |
| (b) | Changes in intangible assets during the year 2025 and 2024 are as follows: |
| Goodwill (1) | Intangible assets arising from business combinations (2) |
Software or computer programs | Total | |||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||
| Gross Balance | ||||||||||||||||
| Balance as of January 1, 2025 | 16,714 | 56,249 | 379,572 | 452,535 | ||||||||||||
| Acquisitions | 58,597 | 58,597 | ||||||||||||||
| Disposals/write-downs | (9,474 | ) | (9,474 | ) | ||||||||||||
| Transfers | 5,567 | 5,567 | ||||||||||||||
| Impairment (*) | (693 | ) | (693 | ) | ||||||||||||
| Total | 16,714 | 56,249 | 433,569 | 506,532 | ||||||||||||
| Accumulated Amortization | ||||||||||||||||
| Balance as of January 1, 2025 | (39,553 | ) | (221,016 | ) | (260,569 | ) | ||||||||||
| Amortization for the year (**) | (41,453 | ) | (41,453 | ) | ||||||||||||
| Disposals/write-downs | 8,304 | 8,304 | ||||||||||||||
| Transfers | (5,055 | ) | (5,055 | ) | ||||||||||||
| Impairment (*) | 229 | 229 | ||||||||||||||
| Total | (39,553 | ) | (258,991 | ) | (298,544 | ) | ||||||||||
| Balance as of December 31, 2025 | 16,714 | 16,696 | 174,578 | 207,988 | ||||||||||||
| Goodwill (1) | Intangible assets arising from business combinations (2) | Software or computer programs | Total | |||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||
| Gross Balance | ||||||||||||||||
| Balance as of January 1, 2024 | 16,714 | 56,249 | 322,174 | 395,137 | ||||||||||||
| Acquisitions | 57,617 | 57,617 | ||||||||||||||
| Disposals/write-downs | (219 | ) | (219 | ) | ||||||||||||
| Reclassification | ||||||||||||||||
| Impairment (*) | ||||||||||||||||
| Total | 16,714 | 56,249 | 379,572 | 452,535 | ||||||||||||
| Accumulated Amortization | ||||||||||||||||
| Balance as of January 1, 2024 | (39,553 | ) | (184,970 | ) | (224,523 | ) | ||||||||||
| Amortization for the year (**) | (36,265 | ) | (36,265 | ) | ||||||||||||
| Disposals/write-downs | 219 | 219 | ||||||||||||||
| Reclassification | ||||||||||||||||
| Impairment (*) | ||||||||||||||||
| Total | (39,553 | ) | (221,016 | ) | (260,569 | ) | ||||||||||
| Balance as of December 31, 2024 | 16,714 | 16,696 | 158,556 | 191,966 | ||||||||||||
| (1) | Goodwill corresponds mainly to business combination with Citibank Chile whose amount is of MCh$12,576 that represents the value of synergies to be generated in the combination process and the acquisition of know-how. |
| (2) | Intangible assets arising from business combinations include assets with indefinite useful lives acquired in the business combination with Citibank Chile. |
| (*) | See Note No. 38 Impairment of non-financial assets. |
| (**) | See Note No. 37 Depreciation and Amortization. |
| (c) | As of December 31, 2025, the Bank records Ch$18,157 million (Ch$13,889 million as of December 31, 2024) of assets associated with technological developments. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 13. | Intangible Assets, continued: |
| (d) | As of December 31, 2025 and 2024, there are no restrictions on the intangible assets of the Bank. Furthermore, there are no intangible assets held as collateral for the fulfillment of obligations. |
| (e) | Impairment testing of Goodwill: |
For goodwill impairment purposes, testing is carried out at the level of business segments described above and in Note No. 6 to the financial statements. This methodology is in line with IAS 36, where business segments represent the lowest level within the entity at which the goodwill is monitored for internal management purposes.
Accordingly, for goodwill impairment testing purposes, goodwill acquired through business combinations has been allocated to four individual business segments, as follows:
| Business Segments | 2025 | 2024 | ||||||
| MCh$ | MCh$ | |||||||
| Retail Banking | 5,928 | 5,928 | ||||||
| Wholesale Banking | 2,135 | 2,135 | ||||||
| Treasury | 4,513 | 4,513 | ||||||
| Subsidiaries | 4,138 | 4,138 | ||||||
| Total | 16,714 | 16,714 | ||||||
Below are the key assumptions used for determining the value in use for impairment testing purposes:
| ● | The Bank determines the recoverable amount of the business segments based on the value in use criteria by employing a Discounted Cash Flows (“DCF”) valuation model. The DCF model determines the present value of the forecasted earnings that would be distributed to shareholders in the way of dividends, after complying with all capital regulatory requirements. |
| ● | For purposes of the goodwill impairment testing, the DCF model considers earnings projections for a ten-year period, which is deemed as the period in which the Bank is able to achieve the goals set in its long-term business strategy. |
| ● | Earnings projections result from business growth, particularly associated with expected expansion rates for the local economy (i.e. GDP growth), the industry’s loan book and the Bank’s strategic goals in terms of market share in total loans over the future. Then, based on historical data, linear regression analysis and expert judgement, the Bank determines a loan growth multiplier (in real terms) for the industry’s loan book over GDP growth for the local economy. This multiplier is expected to converge to normal levels in the medium-term (year five), after the downturn prompted by the COVID-19 and the second-round effects of one-time policies adopted in order to deal with the pandemic that resulted in below-trend multipliers. Accordingly, the loan growth multiplier would achieve 1.60 times from 2030 onwards. |
| ● | Following the estimated growth rates for the Chilean economy and the banking industry in terms of loans to customers, expansion rates of the Bank’s loan book are determined by considering the achievement of the Bank’s long-term strategic goals. Therefore, real growth rates are expected to be slightly higher than the industry rates within the ten-year period, provided that the Bank expects to recover market share by achieving a 16.5% market stake at year 2030 and remains unchanged afterwards. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 13. | Intangible Assets, continued: |
| (e) | Impairment testing of Goodwill, continued: |
| ● | For purposes of business segments valuation, the DCF model considers discount rates that are determined by carrying out a linear regression analysis based on historical data of daily stock returns for the Bank and the market portfolio (IGPA index in Chile). To do this, an index linear model is applied, which is widely used in finance for these purposes. After estimating the model parameters (alpha and beta), the Capital Asset Pricing Model (“CAPM”) is utilized to determine the cost of equity or discount rate for shareholders’ cash flows. When using CAPM, a 7.0% nominal discount rate is computed by assuming long-term scenarios for market risk premium and the latest available data (December 2025) for both inflation and long-term risk-free rate. We also use alternative methods, such as historical return-on-market-equity (net income over market capitalization) and implied return-on-equity from price-to-earnings ratios projected by market analysts. Based on these methods, we compute real discount rates of 6.1% by using the return-on-market-equity and 4.4% by means of the projected price-to-earnings ratio. By combining the three approaches, an average real discount rate of 5.9% is computed. Based on this data –and adopting a conservative approach– the Bank determines a real cost of equity of 9.0% as a baseline scenario for discount rates used for valuation purposes. The Bank also carries out a sensitivity analysis by setting real discounts rates of 8.0% and 10.0%. |
| (f) | Annual goodwill impairment test: |
The annual goodwill impairment tests for the years ended December 31, 2025 and 2024 did not result in an impairment loss on the goodwill of the Bank’s business segments as their economic values were higher than their carrying amounts.
| (g) | Restrictions: |
Banco de Chile and its subsidiaries have no restrictions on intangible assets as of December 31, 2025 and 2024. Additionally, no intangible assets have been pledged as collateral to secure the fulfillment of any financial obligation. Moreover, there are no amounts owed by the Bank on intangible assets as of the aforementioned dates.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 14. | Property and Equipment: |
| (a) | The properties and equipment as of December 31, 2025 and 2024 are composed as follows: |
| Average useful Life | Average remaining depreciation | Gross balance | Accumulated Depreciation |
Net balance | ||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Years | Years | Years | Years | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||
| Class of property and equipment: | ||||||||||||||||||||||||||||||||
| Land and buildings | 25 | 26 | 17 | 18 | 324,366 | 327,862 | (175,899 | ) | (173,132 | ) | 148,467 | 154,730 | ||||||||||||||||||||
| Equipment | 5 | 5 | 3 | 3 | 259,367 | 261,142 | (236,924 | ) | (236,146 | ) | 22,443 | 24,996 | ||||||||||||||||||||
| Others | 7 | 7 | 4 | 4 | 60,170 | 63,198 | (51,666 | ) | (53,851 | ) | 8,504 | 9,347 | ||||||||||||||||||||
| Total | 643,903 | 652,202 | (464,489 | ) | (463,129 | ) | 179,414 | 189,073 | ||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 14. | Property and Equipment, continued: |
| (b) | Changes in property and equipment as of December 31, 2025 and 2024, are detailed as follows: |
| December 2025 | ||||||||||||||||
| Land and Buildings |
Equipment | Others | Total | |||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||
| Gross Balance | ||||||||||||||||
| Balance as of January 1, 2025 | 327,862 | 261,142 | 63,198 | 652,202 | ||||||||||||
| Reclassification | 1,222 | 309 | (1,531 | ) | ||||||||||||
| Additions | 6,161 | 9,854 | 1,922 | 17,937 | ||||||||||||
| Disposals and sales for the year | (10,853 | ) | (6,138 | ) | (3,413 | ) | (20,404 | ) | ||||||||
| Transfers | (5,567 | ) | (5,567 | ) | ||||||||||||
| Impairment (**) | (26 | ) | (233 | ) | (6 | ) | (265 | ) | ||||||||
| Total | 324,366 | 259,367 | 60,170 | 643,903 | ||||||||||||
| Accumulated Depreciation | ||||||||||||||||
| Balance as of January 1, 2025 | (173,132 | ) | (236,146 | ) | (53,851 | ) | (463,129 | ) | ||||||||
| Reclassification | (1,150 | ) | (173 | ) | 1,323 | |||||||||||
| Depreciation for the year (*) | (9,807 | ) | (11,379 | ) | (2,458 | ) | (23,644 | ) | ||||||||
| Disposals and sales for the year | 8,190 | 5,719 | 3,320 | 17,229 | ||||||||||||
| Transfers | 5,055 | 5,055 | ||||||||||||||
| Total | (175,899 | ) | (236,924 | ) | (51,666 | ) | (464,489 | ) | ||||||||
| Balance as of December 31, 2025 | 148,467 | 22,443 | 8,504 | 179,414 | ||||||||||||
| December 2024 | ||||||||||||||||
| Land and Buildings | Equipment | Others | Total | |||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||
| Gross Balance | ||||||||||||||||
| Balance as of January 1, 2024 | 322,766 | 256,933 | 61,118 | 640,817 | ||||||||||||
| Additions | 7,369 | 5,286 | 3,699 | 16,354 | ||||||||||||
| Disposals and sales for the year | (2,273 | ) | (1,075 | ) | (1,619 | ) | (4,967 | ) | ||||||||
| Impairment (**) (***) | (2 | ) | (2 | ) | ||||||||||||
| Total | 327,862 | 261,142 | 63,198 | 652,202 | ||||||||||||
| Accumulated Depreciation | ||||||||||||||||
| Balance as of January 1, 2024 | (165,286 | ) | (221,083 | ) | (52,791 | ) | (439,160 | ) | ||||||||
| Depreciation for the year (*) | (9,725 | ) | (15,881 | ) | (2,566 | ) | (28,172 | ) | ||||||||
| Disposals and sales for the year | 1,879 | 818 | 1,506 | 4,203 | ||||||||||||
| Total | (173,132 | ) | (236,146 | ) | (53,851 | ) | (463,129 | ) | ||||||||
| Balance as of December 31, 2024 | 154,730 | 24,996 | 9,347 | 189,073 | ||||||||||||
| (*) | See Note No. 37 about Depreciation and Amortization. |
| (**) | See Note No. 38 Impairment of non-financial assets. |
| (***) | Does not include provision for write-off of Property for Ch$1,119 million as of December 31, 2024. |
| (c) | As of December 31, 2025, the Bank records Ch$10,920 million (Ch$5,510 million as of December 31, 2024) in assets under commissioning. |
| (d) | As of December 31, 2025 and 2024, there are no restrictions on the properties and equipment of the Bank and its subsidiaries. Furthermore, there are no properties and equipment held as collateral for the fulfillment of obligations. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 15. | Right-of-use assets and Lease liabilities: |
| (a) | The detail of the right-of-use assets as of December 31, 2025 and 2024 is as follows: |
| Gross Balance |
Accumulated Depreciation |
Net Balance |
||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||
| Categories | ||||||||||||||||||||||||
| Buildings | 111,839 | 126,655 | (62,144 | ) | (63,657 | ) | 49,695 | 62,998 | ||||||||||||||||
| Floor space for ATMs | 41,026 | 36,080 | (18,040 | ) | (9,307 | ) | 22,986 | 26,773 | ||||||||||||||||
| Improvements to leased property | 28,562 | 28,783 | (21,998 | ) | (21,675 | ) | 6,564 | 7,108 | ||||||||||||||||
| Total | 181,427 | 191,518 | (102,182 | ) | (94,639 | ) | 79,245 | 96,879 | ||||||||||||||||
| (b) | The changes in the right-of-use assets as of December 31, 2025 and 2024, are detailed as follows: |
| 2025 | ||||||||||||||||
| Buildings | Floor space for ATMs |
Improvements to leased properties |
Total | |||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||
| Gross Balance | ||||||||||||||||
| Balance as of January 1, 2025 | 126,655 | 36,080 | 28,783 | 191,518 | ||||||||||||
| Additions | 8,256 | 5,239 | 765 | 14,260 | ||||||||||||
| Disposals | (22,850 | ) | (293 | ) | (986 | ) | (24,129 | ) | ||||||||
| Remeasurement | (222 | ) | (222 | ) | ||||||||||||
| Other increases | ||||||||||||||||
| Total | 111,839 | 41,026 | 28,562 | 181,427 | ||||||||||||
| Accumulated Depreciation | ||||||||||||||||
| Balance as of January 1, 2025 | (63,657 | ) | (9,307 | ) | (21,675 | ) | (94,639 | ) | ||||||||
| Depreciation of the year (*) | (19,581 | ) | (9,026 | ) | (1,049 | ) | (29,656 | ) | ||||||||
| Disposals | 21,321 | 293 | 726 | 22,340 | ||||||||||||
| Other increases | (227 | ) | (227 | ) | ||||||||||||
| Total | (62,144 | ) | (18,040 | ) | (21,998 | ) | (102,182 | ) | ||||||||
| Balance as of December 31, 2025 | 49,695 | 22,986 | 6,564 | 79,245 | ||||||||||||
| (*) | See Note No.37 Depreciation and Amortization. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 15. | Right-of-use assets and Lease liabilities, continued: |
| 2024 | ||||||||||||||||
| Buildings | Floor space for ATMs |
Improvements to leased properties |
Total | |||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||
| Gross Balance | ||||||||||||||||
| Balance as of January 1, 2024 | 145,849 | 33,060 | 30,426 | 209,335 | ||||||||||||
| Additions | 13,892 | 4,385 | 872 | 19,149 | ||||||||||||
| Disposals | (33,019 | ) | (1,197 | ) | (2,515 | ) | (36,731 | ) | ||||||||
| Remeasurement | (67 | ) | (168 | ) | (235 | ) | ||||||||||
| Other increases | ||||||||||||||||
| Total | 126,655 | 36,080 | 28,783 | 191,518 | ||||||||||||
| Accumulated Depreciation | ||||||||||||||||
| Balance as of January 1, 2024 | (75,361 | ) | (2,669 | ) | (22,416 | ) | (100,446 | ) | ||||||||
| Depreciation of the year (*) | (20,939 | ) | (7,733 | ) | (1,135 | ) | (29,807 | ) | ||||||||
| Disposals | 32,638 | 1,123 | 1,876 | 35,637 | ||||||||||||
| Other increases | 56 | (28 | ) | (23 | ) | |||||||||||
| Total | (63,657 | ) | (9,307 | ) | (21,675 | ) | (94,639 | ) | ||||||||
| Balance as of December 31, 2024 | 62,998 | 26,773 | 7,108 | 96,879 | ||||||||||||
| (*) | See Note No.37 Depreciation and Amortization. |
| (c) | The future maturities (including unearned interest) of the lease liabilities as of December 31, 2025 and 2024: |
| December 2025 | ||||||||||||||||||||||||||||||||
| On demand | Up to 1 month | Over 1 month up to 3 months |
Over 3 months up to 12 months |
Over 1 year and up to 3 years |
Over 3 years and up to 5 years |
Over 5 years | Total | |||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Lease associated to: | ||||||||||||||||||||||||||||||||
| Buildings | 1,551 | 3,099 | 10,731 | 19,628 | 10,676 | 7,399 | 53,084 | |||||||||||||||||||||||||
| ATMs | 802 | 1,603 | 7,206 | 15,062 | 733 | 20 | 25,426 | |||||||||||||||||||||||||
| Total | 2,353 | 4,702 | 17,937 | 34,690 | 11,409 | 7,419 | 78,510 | |||||||||||||||||||||||||
| December 2024 | ||||||||||||||||||||||||||||||||
| On demand | Up to 1 month | Over 1 month up to 3 months |
Over 3 months up to 12 months |
Over 1 year and up to 3 years |
Over 3 years and up to 5 years |
Over 5 years | Total | |||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Lease associated to: | ||||||||||||||||||||||||||||||||
| Buildings | 1,692 | 3,374 | 14,158 | 23,675 | 14,245 | 10,657 | 67,801 | |||||||||||||||||||||||||
| ATMs | 699 | 1,396 | 6,228 | 15,353 | 5,532 | 28 | 29,236 | |||||||||||||||||||||||||
| Total | 2,391 | 4,770 | 20,386 | 39,028 | 19,777 | 10,685 | 97,037 | |||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 15. | Right-of-use assets and Lease liabilities, continued: |
The Bank and its subsidiaries record contracts with certain renewal options and for which there is reasonable certainty that such option will be exercised. In such cases, the lease term used to measure the liability and assets corresponds to an estimate of future renewals.
| (d) | The changes in the obligations for lease liabilities and the cash flows for the years 2025 and 2024 are detailed as follows: |
| Total cash flow for the year |
||||
| MCh$ | ||||
| Lease liability | ||||
| Balances as of January 1, 2024 | 101,480 | |||
| Liabilities for new lease agreements | 14,648 | |||
| Interest accrual expenses | 2,381 | |||
| Payments of principal and interests | (29,991 | ) | ||
| Remeasurement | (235 | ) | ||
| Derecognized contracts | (457 | ) | ||
| Indexation | 3,603 | |||
| Balances as of December 31, 2024 | 91,429 | |||
| Liabilities for new lease agreements | 10,951 | |||
| Interest accrual expenses | 2,112 | |||
| Payments of principal and interests | (30,897 | ) | ||
| Remeasurement | (222 | ) | ||
| Derecognized contracts | (1,568 | ) | ||
| Indexation | 2,538 | |||
| Balances as of December 31, 2025 | 74,343 | |||
| (e) | The future cash flows related to short-term lease agreements in force as of December 31, 2025 correspond to Ch$5,071 million (Ch$3,557 million as of December 31, 2024). |
| (f) | As of December 31, 2025, the minimum future rental income to be received from operating leases amounts to Ch$19,926 million (Ch$14,101 million as of December 31, 2024). |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 16. | Current tax and deferred tax: |
| (a) | Current Tax: |
The Bank and its subsidiaries at the end of each year, have constituted a provision for first category income tax, which was determined based on current tax regulations, and has been reflected in the Statement of Financial Position net of taxes to be recovered or payable, as applicable, as of December 31, 2025 and 2024, according to the following detail:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Income tax | (325,028 | ) | (333,719 | ) | ||||
| Less: | ||||||||
| Monthly prepaid taxes | 286,874 | 483,615 | ||||||
| Credit for training expenses | 1,920 | 1,820 | ||||||
| Other | 4,271 | 8,021 | ||||||
| Total tax (payable) receivable, net | (31,963 | ) | 159,737 | |||||
| Tax Rate | 27.00 | % | 27.00 | % | ||||
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Current tax assets | 1,846 | 159,869 | ||||||
| Current tax liabilities | (33,809 | ) | (132 | ) | ||||
| Total tax receivable (payable), net | (31,963 | ) | 159,737 | |||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 16. | Current tax and deferred taxes, continued: |
| (b) | Income Tax: |
The Bank’s tax expense recorded for the years ended December 31, 2025, 2024 and 2023 is detailed as follows:
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Income tax expense: | ||||||||||||
| Current year tax | 332,680 | 339,604 | 268,318 | |||||||||
| Previous year tax | (3,710 | ) | (5,343 | ) | 620 | |||||||
| Subtotal | 328,970 | 334,261 | 268,938 | |||||||||
| (Credit) debit for deferred taxes: | ||||||||||||
| Origin and reversal of temporary differences | (9,721 | ) | (1,482 | ) | 44,545 | |||||||
| Subtotal | (9,721 | ) | (1,482 | ) | 44,545 | |||||||
| Others | (861 | ) | 822 | 8,631 | ||||||||
| Net debit to income for income tax | 318,388 | 333,601 | 322,114 | |||||||||
| (c) | Reconciliation of effective tax rate: |
The following table reconciles the income tax rate to the effective rate applied to determine the Bank’s income tax expense as of December 31, 2025, 2024 and 2023:
| 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Tax rate % | MCh$ | Tax rate % | MCh$ | Tax rate % | MCh$ | |||||||||||||||||||
| Income tax calculated on net income before tax | 27.00 | 406,026 | 27.00 | 427,161 | 27.00 | 457,958 | ||||||||||||||||||
| Additions or deductions (*) | (1.37 | ) | (20,660 | ) | (1.13 | ) | (17,924 | ) | (3.21 | ) | (54,476 | ) | ||||||||||||
| Tax price-level adjustment | (4.41 | ) | (66,182 | ) | (4.79 | ) | (75,802 | ) | (4.83 | ) | (81,809 | ) | ||||||||||||
| Other | (0.05 | ) | (796 | ) | 0.01 | 166 | 0.03 | 441 | ||||||||||||||||
| Effective rate and income tax expense | 21.17 | 318,388 | 21.09 | 333,601 | 18.99 | 322,114 | ||||||||||||||||||
| (*) | The deductions of the tax rate mainly relate to permanent differences between tax and financial accounting rules. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 16. | Current tax and deferred taxes, continued: |
| (d) | Effect of deferred taxes on income and equity: |
The effects of deferred taxes on assets, liabilities and income accounts are detailed as follows:
| Balance as of December 31, |
Effect | Balance as of December 31, |
Effect | Balance as of December 31, |
||||||||||||||||||||||||
| 2023 | Income | OCI | 2024 | Income | OCI | 2025 | ||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||
| Debit differences: | ||||||||||||||||||||||||||||
| Allowances for loan losses and provision for contingent loans | 161,352 | 184 | 161,536 | (429 | ) | 161,107 | ||||||||||||||||||||||
| Provision for employee expenses | 24,404 | 232 | 24,636 | (3,201 | ) | 21,435 | ||||||||||||||||||||||
| Accrued vacations | 12,025 | (463 | ) | 11,562 | 112 | 11,674 | ||||||||||||||||||||||
| Accrued interests and indexation of impaired portfolio | 14,937 | 1,597 | 16,534 | 53 | 16,587 | |||||||||||||||||||||||
| Provision for staff severance indemnity payments | 1,252 | (217 | ) | (31 | ) | 1,004 | (42 | ) | 17 | 979 | ||||||||||||||||||
| Provisions for credit card expenses | 9,857 | 1,111 | 10,968 | (760 | ) | 10,208 | ||||||||||||||||||||||
| Provisions for accrued expenses | 10,737 | (506 | ) | 10,231 | (1,100 | ) | 9,131 | |||||||||||||||||||||
| Adjustment for valuation of investments and equity instruments at fair value through OCI | 277 | 198 | 475 | (475 | ) | |||||||||||||||||||||||
| Leases | 103,352 | 7,591 | 110,943 | 15,181 | 126,124 | |||||||||||||||||||||||
| Unearned Income | 5,149 | (1,035 | ) | 4,114 | (625 | ) | 3,489 | |||||||||||||||||||||
| Exchange rate difference | ||||||||||||||||||||||||||||
| Property and equipment valuation difference | 2,876 | 3,924 | 6,800 | 2,788 | 9,588 | |||||||||||||||||||||||
| Other adjustments | 31,322 | (10,174 | ) | 21,148 | 3,188 | 24,336 | ||||||||||||||||||||||
| Total Debit Differences | 377,540 | 2,244 | 167 | 379,951 | 15,165 | (458 | ) | 394,658 | ||||||||||||||||||||
| Credit differences: | ||||||||||||||||||||||||||||
| Intangible assets (software and others) | 24,710 | 5,913 | 30,623 | 3,575 | 34,198 | |||||||||||||||||||||||
| Property and equipment valuation difference | 909 | 909 | ||||||||||||||||||||||||||
| Transitory assets | 8,874 | 852 | 9,726 | (119 | ) | 9,607 | ||||||||||||||||||||||
| Loans accrued to effective rate | 2,484 | (151 | ) | 2,333 | (122 | ) | 2,211 | |||||||||||||||||||||
| Prepaid expenses | 10,885 | (4,485 | ) | 6,400 | (3,839 | ) | 2,561 | |||||||||||||||||||||
| Exchange rate difference | 1,636 | (835 | ) | 801 | 5,916 | 6,717 | ||||||||||||||||||||||
| Capitalized bond placement expense | 5,257 | (362 | ) | 4,895 | 16 | 4,911 | ||||||||||||||||||||||
| Other adjustments | 3,288 | (170 | ) | 3,118 | 17 | 3,135 | ||||||||||||||||||||||
| Total Credit Differences | 57,134 | 762 | 57,896 | 5,444 | 909 | 64,249 | ||||||||||||||||||||||
| Total Debit (Credit), net | 320,406 | 1,482 | 167 | 322,055 | 9,721 | (1,367 | ) | 330,409 | ||||||||||||||||||||
Reconciliation to Statement of Financial Position
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Deferred tax assets | 331,831 | 322,221 | ||||||
| Deferred tax liabilities | (1,422 | ) | (166 | ) | ||||
| Total deferred taxes | 330,409 | 322,055 | ||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 17. | Other Assets: |
As of December 31, 2025 and 2024, other assets are detailed as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Cash collateral provided for derivative financial transactions | 463,266 | 347,788 | ||||||
| Debtors from brokerage of financial instruments | 419,167 | 195,252 | ||||||
| Accounts receivable from the General Treasury of the Republic and other fiscal organizations | 406,395 | 349,282 | ||||||
| Accounts receivable from third parties | 170,185 | 195,364 | ||||||
| Assets to be leased out as lessor (*) | 134,283 | 162,594 | ||||||
| Prepaid expenses | 39,416 | 53,645 | ||||||
| Income assets from regular activities from contracts with customers | 22,350 | 24,006 | ||||||
| Other cash collateral provided | 11,836 | 14,806 | ||||||
| Investment properties (**) | 11,049 | 11,406 | ||||||
| Pending transactions | 3,364 | 3,351 | ||||||
| Accumulated impairment in respect of other assets receivable | (2,638 | ) | (1,817 | ) | ||||
| Other Assets | 17,358 | 17,864 | ||||||
| Total | 1,696,031 | 1,373,541 | ||||||
| (*) | Correspond to fixed assets to be delivered under the financial lease modality. |
Estimated useful lives applied by the Bank are presented in Note No. 2(m) Property and equipment.
| (**) | As of December 31, 2025, the fair value of the investment properties held by the Bank is Ch$65,219 million (Ch$64,207 million as of December 31, 2024). |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 18. | Non-current assets and disposal groups held for sale and liabilities included in disposal groups for sale: |
| (a) | At the end of each year, this line item is composed as follows: |
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Assets received in lieu of payment or awarded in judicial auction (*) | ||||||||
| Assets awarded in judicial auction | 22,571 | 27,854 | ||||||
| Assets received in lieu of payment | 20,207 | 17,022 | ||||||
| Provision for assets received in lieu of payment or awarded | (3,208 | ) | (3,456 | ) | ||||
| Non-current assets for sale | ||||||||
| Investments in other companies | ||||||||
| Assets for recovery of assets transferred in financial leasing operations | 1,013 | 603 | ||||||
| Disposal groups held for sale | ||||||||
| Total | 40,583 | 42,023 | ||||||
| (*) | Assets received in lieu of payment refer to assets accepted as payment for past-due or written-off debts owed by customers. The assets acquired as such do not exceed 20% of the Bank’s effective equity. |
| (b) | Changes in the provision for assets received in lieu of payment during the years 2025 and 2024 are detailed as follows: |
| Provision for assets received in lieu of payment | MCh$ | |||
| Balance as of January 1, 2024 | 2,022 | |||
| Provisions used | (1,890 | ) | ||
| Provisions established | 3,324 | |||
| Provisions released | ||||
| Balance as of December 31, 2024 | 3,456 | |||
| Provisions used | (2,667 | ) | ||
| Provisions established | 2,419 | |||
| Provisions released | ||||
| Balance as of December 31, 2025 | 3,208 | |||
| (c) | The Bank does not record liabilities included in the disposal group for sale during the years 2025 and 2024. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 19. | Financial liabilities held for trading at fair value through profit or loss: |
The detail of this line item is as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Financial derivative contracts | 2,079,465 | 2,444,721 | ||||||
| Others | 512 | 990 | ||||||
| Total | 2,079,977 | 2,445,711 | ||||||
| a) | As of December 31, 2025 and 2024, the Bank maintains the following debt portfolio of derivative instruments: |
| Notional amount of contract with final expiration date in | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| On demand | Up to 1 month | Over
1 month and up to 3 months |
Over
3 months and up to 12 months |
Over
1 year and up to 3 years |
Over
3 years and up to 5 years |
Over 5 years | Total | Fair
value Liabilities |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Currency forward | — | — | 7,393,965 | 3,638,001 | 3,560,210 | 2,003,870 | 3,716,879 | 2,583,070 | 659,862 | 863,850 | 50,930 | — | — | — | 15,381,846 | 9,088,791 | 455,921 | 241,757 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate swap | — | — | 3,093,258 | 619,104 | 2,016,845 | 1,627,918 | 7,398,940 | 4,583,573 | 7,351,083 | 7,622,130 | 4,073,662 | 3,963,087 | 3,779,852 | 3,921,627 | 27,713,640 | 22,337,439 | 414,413 | 650,370 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate swap and cross currency swap | — | — | 151,577 | 96,844 | 369,984 | 198,892 | 1,700,333 | 2,331,613 | 3,071,039 | 2,909,482 | 2,631,798 | 1,978,681 | 3,375,877 | 2,879,356 | 11,300,608 | 10,394,868 | 1,206,802 | 1,547,488 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Currency call options | — | — | 12,533 | 10,499 | 18,722 | 38,376 | 33,332 | 18,825 | — | — | — | — | — | — | 64,587 | 67,700 | 870 | 4,151 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Currency put options | — | — | 5,783 | 4,761 | 7,611 | 46,913 | 21,870 | 64,449 | — | 11,340 | — | — | — | — | 35,264 | 127,463 | 1,459 | 955 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | — | — | 10,657,116 | 4,369,209 | 5,973,372 | 3,915,969 | 12,871,354 | 9,581,530 | 11,081,984 | 11,406,802 | 6,756,390 | 5,941,768 | 7,155,729 | 6,800,983 | 54,495,945 | 42,016,261 | 2,079,465 | 2,444,721 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 20. | Financial liabilities at amortized cost: |
The detail of this line item is as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Current accounts and other demand deposits | 14,791,870 | 14,630,797 | ||||||
| Time deposits and saving accounts | 14,162,408 | 14,345,223 | ||||||
| Obligations by repurchase agreements | 286,915 | 109,794 | ||||||
| Borrowings from financial institutions | 1,296,751 | 1,103,468 | ||||||
| Debt financial instruments issued | 10,800,851 | 9,690,069 | ||||||
| Other financial obligations | 367,323 | 284,479 | ||||||
| Total | 41,706,118 | 40,163,830 | ||||||
| (a) | Current accounts and other demand deposits: |
As of December 31, 2025 and 2024, the composition of current accounts and other demand deposits is as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Current accounts | 11,775,903 | 11,769,419 | ||||||
| Other demand obligations | 1,801,047 | 1,750,048 | ||||||
| Demand deposits accounts | 724,359 | 652,075 | ||||||
| Other demand deposits | 490,561 | 459,255 | ||||||
| Total | 14,791,870 | 14,630,797 | ||||||
| (b) | Time deposits and saving accounts: |
As of December 31, 2025 and 2024, the composition of time deposits and saving accounts is as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Time deposits | 13,546,479 | 13,764,830 | ||||||
| Term savings accounts | 405,689 | 374,593 | ||||||
| Other term balances payable | 210,240 | 205,800 | ||||||
| Total | 14,162,408 | 14,345,223 | ||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 20. | Financial liabilities at amortized cost, continued: |
| (c) | Obligations by repurchase agreements: |
The Bank obtains financing by selling financial instruments and agreeing to repurchase them in the future, plus interest at a rate established previously. As of December 31, 2025 and 2024, the repurchase agreements are detailed as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Transactions with domestic banks | ||||||||
| Repurchase agreements with other banks | ||||||||
| Repurchase agreements with the Central Banks of Chile | ||||||||
| Obligations from securities lending | ||||||||
| Transactions with foreign banks | ||||||||
| Repurchase agreements with other banks | ||||||||
| Repurchase agreements with foreign Central Banks | ||||||||
| Obligations from securities lending | ||||||||
| Transactions with other domestic entities | ||||||||
| Repurchase agreements | 286,915 | 109,794 | ||||||
| Obligations from securities lending | ||||||||
| Transactions with other entities abroad | ||||||||
| Repurchase agreements | ||||||||
| Obligations from securities lending | ||||||||
| Total | 286,915 | 109,794 | ||||||
The fair value of the financial instruments delivered as collateral by the Bank and its subsidiaries, in sales transactions with repurchase agreement and securities lending as of December 31, 2025 amounts to Ch$284,572 million (Ch$109,505 million in December 2024). In the event that the Bank and its subsidiaries enter into default or bankruptcy, the counterparty is authorized to sell or deliver these investments as collateral.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 20. | Financial liabilities at amortized cost, continued: |
| (d) | Borrowings from Financial Institutions: |
As of December 31, 2025 and 2024, borrowings from financial institutions are detailed as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Foreign banks | ||||||||
| Foreign trade financing | ||||||||
| Bank of America, N.A. | 238,925 | 124,057 | ||||||
| HSBC Bank | 208,465 | 245,469 | ||||||
| JP Morgan Chase Bank, N.A. | 168,329 | |||||||
| Caixabank S.A. | 147,091 | 201,802 | ||||||
| Citibank N.A. | 137,114 | 2,189 | ||||||
| Zurcher Kantonalbank | 108,803 | 90,386 | ||||||
| The Bank of New York Mellon | 85,533 | 240,008 | ||||||
| Standard Chartered Bank (Hong Kong) Limited | 63,261 | |||||||
| Standard Chartered Bank | 2,086 | 2,685 | ||||||
| Commerzbank AG | 839 | 1,417 | ||||||
| Wells Fargo Bank N.A. | 50 | 1,890 | ||||||
| DZ Bank AG Deutsche | 41,646 | |||||||
| MUFG Bank, LTD | 71 | |||||||
| Borrowings and other obligations | ||||||||
| Wells Fargo Bank, N.A. | 136,255 | 150,775 | ||||||
| Citibank N.A. United Kingdom | 986 | |||||||
| Deutsche Bank Trust Company Americas | 87 | |||||||
| Subtotal foreign banks | 1,296,751 | 1,103,468 | ||||||
| Banco Central de Chile (the Central Bank of Chile) | ||||||||
| Total | 1,296,751 | 1,103,468 | ||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 20. | Financial liabilities at amortized cost, continued: |
| (e) | Debt financial instruments issued: |
As of December 31, 2025 and 2024, the composition of debt financial instruments issued as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Mortgage finance bonds | ||||||||
| Mortgage finance bonds for housing | 521 | 849 | ||||||
| Mortgage finance bonds for general purposes | 1 | |||||||
| Bonds | ||||||||
| Senior bonds | 10,800,330 | 9,689,219 | ||||||
| Mortgage bonds | ||||||||
| Total | 10,800,851 | 9,690,069 | ||||||
During the year ended December 31, 2025 Banco de Chile has placed bonds for Ch$2,742,341 million, which corresponds to Short-Term Bonds and Long-Term Bonds for amounts of Ch$819,195 and Ch$1,923,146 million respectively, according to the following details:
Short-term Bonds
| Counterparty | Currency | Amount MCh$ |
Annual interest rate % |
Date of issuance |
Maturity date |
|||||||||
| Wells Fargo Bank | USD | 98,630 | 4.68 | 01/27/2025 | 05/02/2025 | |||||||||
| Wells Fargo Bank | USD | 98,630 | 4.65 | 01/27/2025 | 08/01/2025 | |||||||||
| Wells Fargo Bank | USD | 92,519 | 4.55 | 03/07/2025 | 04/07/2025 | |||||||||
| Wells Fargo Bank | USD | 9,252 | 4.45 | 03/07/2025 | 09/05/2025 | |||||||||
| Wells Fargo Bank | USD | 93,634 | 4.60 | 06/25/2025 | 10/01/2025 | |||||||||
| Wells Fargo Bank | USD | 93,062 | 4.55 | 06/26/2025 | 11/03/2025 | |||||||||
| Wells Fargo Bank | USD | 4,653 | 4.55 | 06/26/2025 | 07/31/2025 | |||||||||
| Wells Fargo Bank | USD | 96,646 | 4.45 | 08/05/2025 | 12/08/2025 | |||||||||
| Wells Fargo Bank | USD | 94,372 | 4.10 | 10/28/2025 | 02/06/2026 | |||||||||
| Wells Fargo Bank | USD | 46,310 | 4.20 | 11/26/2025 | 12/29/2025 | |||||||||
| Wells Fargo Bank | USD | 91,487 | 4.01 | 12/29/2025 | 04/02/2026 | |||||||||
| Total | 819,195 | |||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 20. | Financial liabilities at amortized cost, continued: |
| (e) | Debt financial instruments issued, continued: |
Long-Term Bonds
| Series | Currency | Amount MCh$ |
Terms Years |
Annual interest rate % |
Date of issuance |
Maturity date |
||||||||||||
| BCHIFC0721 | UF | 22,830 | 5 | 2.97 | 03/17/2025 | 01/01/2030 | ||||||||||||
| BCHIFC0721 | UF | 11,422 | 5 | 2.97 | 03/20/2025 | 01/01/2030 | ||||||||||||
| BCHIFC0721 | UF | 40,001 | 5 | 2.97 | 03/21/2025 | 01/01/2030 | ||||||||||||
| BCHIFC0721 | UF | 30,548 | 5 | 2.96 | 04/01/2025 | 01/01/2030 | ||||||||||||
| BCHIFO0721 | UF | 34,577 | 7 | 2.92 | 04/03/2025 | 01/01/2032 | ||||||||||||
| BCHIFH1221 | UF | 33,047 | 6 | 2.84 | 04/15/2025 | 12/01/2030 | ||||||||||||
| BCHIGG1121 | UF | 38,413 | 10 | 3.03 | 04/17/2025 | 05/01/2035 | ||||||||||||
| BCHIHD0424 | UF | 81,115 | 10 | 3.03 | 04/17/2025 | 10/01/2034 | ||||||||||||
| BCHIFH1221 | UF | 11,679 | 6 | 2.92 | 05/07/2025 | 12/01/2030 | ||||||||||||
| BCHIGG1121 | UF | 5,712 | 10 | 3.03 | 05/09/2025 | 05/01/2035 | ||||||||||||
| BCHIHN1223 | UF | 12,517 | 15 | 3.06 | 05/09/2025 | 12/01/2039 | ||||||||||||
| BCHIFA0222 | UF | 22,900 | 3 | 2.77 | 05/30/2025 | 08/01/2028 | ||||||||||||
| BCHIFH1221 | UF | 9,575 | 6 | 3.06 | 05/30/2025 | 12/01/2030 | ||||||||||||
| BCHIFH1221 | UF | 13,407 | 6 | 3.06 | 06/02/2025 | 12/01/2030 | ||||||||||||
| BCHIFH1221 | UF | 9,581 | 6 | 3.05 | 06/02/2025 | 12/01/2030 | ||||||||||||
| BCHIFH1221 | UF | 8,667 | 6 | 3.04 | 06/03/2025 | 12/01/2030 | ||||||||||||
| BCHIFH1221 | UF | 4,145 | 6 | 3.04 | 06/06/2025 | 12/01/2030 | ||||||||||||
| BCHIFH1221 | UF | 25,567 | 6 | 3.04 | 06/10/2025 | 12/01/2030 | ||||||||||||
| BCHIFO0721 | UF | 19,306 | 7 | 3.06 | 06/10/2025 | 01/01/2032 | ||||||||||||
| BCHIGG1121 | UF | 23,174 | 10 | 3.15 | 07/03/2025 | 05/01/2035 | ||||||||||||
| BCHICI0815 | UF | 19,989 | 8 | 3.14 | 07/09/2025 | 02/01/2033 | ||||||||||||
| BCHICG0815 | UF | 49,639 | 7 | 3.14 | 07/10/2025 | 08/01/2032 | ||||||||||||
| BCHICH1215 | UF | 15,721 | 8 | 3.14 | 07/10/2025 | 12/01/2032 | ||||||||||||
| BCHICI0815 | UF | 5,996 | 8 | 3.14 | 07/10/2025 | 02/01/2033 | ||||||||||||
| BCHIHW1223 | UF | 65,578 | 19 | 3.21 | 07/15/2025 | 06/01/2044 | ||||||||||||
| BCHIGB0322 | UF | 8,589 | 9 | 3.18 | 07/17/2025 | 09/01/2034 | ||||||||||||
| BCHIGB0322 | UF | 9,557 | 9 | 3.16 | 07/18/2025 | 09/01/2034 | ||||||||||||
| BCHIGB0322 | UF | 5,747 | 9 | 3.13 | 07/21/2025 | 09/01/2034 | ||||||||||||
| BCHIGB0322 | UF | 19,187 | 9 | 3.11 | 07/22/2025 | 09/01/2034 | ||||||||||||
| BCHIGG1121 | UF | 5,718 | 10 | 3.11 | 07/22/2025 | 05/01/2035 | ||||||||||||
| BCHIHW1223 | UF | 18,489 | 19 | 3.19 | 07/22/2025 | 06/01/2044 | ||||||||||||
| BCHIGG1121 | UF | 3,870 | 10 | 2.99 | 08/22/2025 | 05/01/2035 | ||||||||||||
| BCHIHN1223 | UF | 22,894 | 15 | 3.06 | 08/27/2025 | 12/01/2039 | ||||||||||||
| BCHIGG1121 | UF | 15,519 | 10 | 3.01 | 09/04/2025 | 05/01/2035 | ||||||||||||
| BCHIHW1223 | UF | 8,374 | 19 | 3.12 | 09/04/2025 | 06/01/2044 | ||||||||||||
| BCHIGA1121 | UF | 38,815 | 9 | 3.05 | 09/05/2025 | 05/01/2034 | ||||||||||||
| BCHIGD0721 | UF | 153,769 | 10 | 3.09 | 09/05/2025 | 01/01/2035 | ||||||||||||
| BCHIHI1223 | UF | 206,194 | 12 | 3.13 | 09/05/2025 | 06/01/2037 | ||||||||||||
| BCHIGA1121 | UF | 31,211 | 9 | 2.99 | 09/11/2025 | 05/01/2034 | ||||||||||||
| BCHIGA1121 | UF | 1,951 | 9 | 2.99 | 09/15/2025 | 05/01/2034 | ||||||||||||
| BCHIHW1223 | UF | 23,076 | 19 | 3.12 | 09/15/2025 | 06/01/2044 | ||||||||||||
| BCHIHN1223 | UF | 41,978 | 14 | 3.03 | 09/16/2025 | 12/01/2039 | ||||||||||||
| BCHIFU0522 | UF | 64,527 | 7 | 2.91 | 09/17/2025 | 11/01/2032 | ||||||||||||
| BCHIGA1121 | UF | 21,475 | 9 | 2.99 | 09/17/2025 | 05/01/2034 | ||||||||||||
| BCHIFU0522 | UF | 31,288 | 7 | 2.91 | 09/22/2025 | 11/01/2032 | ||||||||||||
| BCHIGA1121 | UF | 5,862 | 9 | 2.98 | 09/22/2025 | 05/01/2034 | ||||||||||||
| BCHIHH1223 | UF | 87,021 | 11 | 3.08 | 09/22/2025 | 12/01/2036 | ||||||||||||
| BCHIHH1223 | UF | 66,367 | 11 | 3.07 | 09/23/2025 | 12/01/2036 | ||||||||||||
| BCHIFU0522 | UF | 5,873 | 7 | 2.90 | 09/25/2025 | 11/01/2032 | ||||||||||||
| BCHIGA1121 | UF | 25,525 | 9 | 2.99 | 10/28/2025 | 05/01/2034 | ||||||||||||
| BCHIHW1223 | UF | 6,410 | 19 | 3.03 | 10/28/2025 | 06/01/2044 | ||||||||||||
| BCHIHW1223 | UF | 12,850 | 19 | 3.02 | 10/30/2025 | 06/01/2044 | ||||||||||||
| BCHIFU0522 | UF | 15,573 | 7 | 2.89 | 11/06/2025 | 11/01/2032 | ||||||||||||
| Subtotal UF | 1,572,815 | |||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 20. | Financial liabilities at amortized cost, continued: |
| (e) | Debt financial instruments issued, continued: |
Long-Term Bonds
| Series | Currency | Amount MCh$ |
Terms Years |
Annual interest rate % |
Date of issuance |
Maturity date |
||||||||
| BONO CHF | CHF | 115,739 | 6 | 1.1875 | 06/17/2025 | 07/15/2031 | ||||||||
| BONO JPY | JPY | 65,260 | 5 | 1.635 | 06/18/2025 | 06/27/2030 | ||||||||
| BONO MXN | MXN | 50,998 | 5 | TIIE (28 days) + 1.05 | 07/09/2025 | 07/17/2030 | ||||||||
| BONO AUD | AUD | 43,101 | 10 | BBSW3M +1.28 | 10/22/2025 | 10/30/2035 | ||||||||
| BONO HKD | HKD | 75,233 | 7 | 3.735 | 10/30/2025 | 11/12/2032 | ||||||||
| Subtotal other currencies | 350,331 | |||||||||||||
| Total | 1,923,146 | |||||||||||||
During the year ended December 31, 2024 Banco de Chile has placed bonds for Ch$1,012,638 million, which corresponds to Short-Term Bonds and Long-Term Bonds for amounts of Ch$28,049 and Ch$984,589 million respectively, according to the following details:
Short-term Bonds
| Counterparty | Currency | Amount MCh$ |
Annual interest rate % |
Issued date |
Maturity date |
|||||||
| Wells Fargo Bank | USD | 28,049 | 05/07/2024 | 08/07/2024 | ||||||||
| Total | 28,049 | |||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 20. | Financial liabilities at amortized cost, continued: |
| (e) | Debt financial instruments issued, continued: |
Long-Term Bonds
| Serie | Currency | Amount MCh$ |
Terms Years |
Annual interest rate % |
Issued date |
Maturity date |
||||||||
| BCHIEZ1121 | UF | 107,462 | 4 | 3.72 | 01/15/2024 | 05/01/2028 | ||||||||
| BCHIEZ1121 | UF | 31,197 | 4 | 3.72 | 01/16/2024 | 05/01/2028 | ||||||||
| BCHICE1215 | UF | 21,998 | 7 | 3.20 | 01/31/2024 | 12/01/2031 | ||||||||
| BCHICH1215 | UF | 7,350 | 8 | 3.15 | 02/08/2024 | 12/01/2032 | ||||||||
| BCHIFA0222 | UF | 32,349 | 4 | 3.25 | 03/15/2024 | 08/01/2028 | ||||||||
| BCHIFA0222 | UF | 19,518 | 4 | 3.32 | 03/21/2024 | 08/01/2028 | ||||||||
| BCHIEY1021 | UF | 12,474 | 4 | 3.29 | 03/22/2024 | 04/01/2028 | ||||||||
| BCHIFA0222 | UF | 14,228 | 4 | 3.29 | 03/25/2024 | 08/01/2028 | ||||||||
| BCHIGG1121 | UF | 12,345 | 11 | 3.35 | 03/26/2024 | 05/01/2035 | ||||||||
| BCHIFA0222 | UF | 3,566 | 4 | 3.24 | 03/27/2024 | 08/01/2028 | ||||||||
| BCHIEY1021 | UF | 17,696 | 4 | 3.28 | 04/04/2024 | 04/01/2028 | ||||||||
| BCHIEX0122 | UF | 9,231 | 1 | 3.10 | 04/12/2024 | 07/01/2025 | ||||||||
| BCHIEX0122 | UF | 14,793 | 1 | 3.02 | 04/17/2024 | 07/01/2025 | ||||||||
| BCHIHX1223 | UF | 32,225 | 20 | 3.49 | 05/08/2024 | 12/01/2044 | ||||||||
| BCHIHX1223 | UF | 11,376 | 20 | 3.49 | 05/09/2024 | 12/01/2044 | ||||||||
| BCHIHX1223 | UF | 5,727 | 20 | 3.46 | 05/17/2024 | 12/01/2044 | ||||||||
| BCHIHX1223 | UF | 15,283 | 20 | 3.46 | 05/22/2024 | 12/01/2044 | ||||||||
| BCHIHX1223 | UF | 37,202 | 20 | 3.55 | 06/04/2024 | 12/01/2044 | ||||||||
| BCHIFO0721 | UF | 3,575 | 8 | 3.48 | 06/06/2024 | 01/01/2032 | ||||||||
| BCHIEY1021 | UF | 3,606 | 4 | 3.20 | 06/10/2024 | 04/01/2028 | ||||||||
| BCHIGG1121 | UF | 8,366 | 11 | 3.53 | 06/11/2024 | 05/01/2035 | ||||||||
| BCHIFB1021 | UF | 21,220 | 5 | 3.35 | 06/12/2024 | 04/01/2029 | ||||||||
| BCHIEY1021 | UF | 12,648 | 4 | 3.29 | 07/09/2024 | 04/01/2028 | ||||||||
| BCHIFB1021 | UF | 39,504 | 5 | 3.50 | 07/09/2024 | 04/01/2029 | ||||||||
| BCHIFB1021 | UF | 1,796 | 5 | 3.49 | 07/09/2024 | 04/01/2029 | ||||||||
| BCHIFB1021 | UF | 5,399 | 5 | 3.45 | 07/10/2024 | 04/01/2029 | ||||||||
| BCHIFC0721 | UF | 37,442 | 6 | 3.47 | 07/11/2024 | 01/01/2030 | ||||||||
| BCHIFC0721 | UF | 7,147 | 6 | 3.43 | 07/12/2024 | 01/01/2030 | ||||||||
| BCHIHX1223 | UF | 7,550 | 20 | 3.50 | 07/18/2024 | 12/01/2044 | ||||||||
| BCHIFB1021 | UF | 25,454 | 5 | 3.23 | 07/23/2024 | 04/01/2029 | ||||||||
| BCHIFA0222 | UF | 18,404 | 4 | 3.04 | 07/24/2024 | 08/01/2028 | ||||||||
| BCHIFO0721 | UF | 19,198 | 8 | 2.50 | 09/27/2024 | 01/01/2032 | ||||||||
| BCHIHX1223 | UF | 94,840 | 20 | 2.36 | 09/30/2024 | 12/01/2044 | ||||||||
| BCHIHP1223 | UF | 220,035 | 16 | 2.37 | 10/01/2024 | 12/01/2040 | ||||||||
| Subtotal | 932,204 | |||||||||||||
| BONO HKD | 52,385 | 10 | 4.22 | 02/02/2024 | 02/09/2034 | |||||||||
| Subtotal other currencies | 52,385 | |||||||||||||
| Total | 984,589 | |||||||||||||
As of December 31, 2025 and 2024, the Bank has not presented defaults in the payment of principal and interest on its debt instruments. Likewise, there have been no breaches of covenants and other commitments associated with the debt instruments issued.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 20. | Financial liabilities at amortized cost, continued: |
| (f) | Other Financial Obligations: |
As of December 31, 2025 and 2024, the detail of other financial obligations as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Other financial obligations in Chile | 367,323 | 284,479 | ||||||
| Other financial obligations with the public sector | ||||||||
| Total | 367,323 | 284,479 | ||||||
| 21. | Regulatory capital financial instruments: |
| a) | At the end of each year, this line item is composed of the following: |
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Subordinated bonds | ||||||||
| Subordinated bonds with transitory recognition | ||||||||
| Subordinated bonds | 1,087,093 | 1,068,879 | ||||||
| Bonds with no fixed term of maturity | ||||||||
| Preferred shares | ||||||||
| Total | 1,087,093 | 1,068,879 | ||||||
| b) | Issuances of regulatory capital financial instruments in the year: |
As of December 31, 2025 and 2024, no issues of regulatory capital financial instruments have been made.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 21. | Regulatory capital financial instruments, continued: |
| c) | Changes in regulatory capital financial instruments: |
| Subordinated bonds |
Bonds with no fixed term of maturity |
Preferred shares |
||||||||||
| MCh$ | ||||||||||||
| Balance as of January 1, 2024 | 1,039,814 | |||||||||||
| New issuances performed | ||||||||||||
| Transaction costs | ||||||||||||
| Amortization of transaction costs | ||||||||||||
| Accrued interest | 34,551 | |||||||||||
| Acquisition or redemption by the issuer | ||||||||||||
| Modification of the issuance conditions | ||||||||||||
| Interest and UF indexation payments to the holder | (41,432 | ) | ||||||||||
| Principal payments to the holder | (9,205 | ) | ||||||||||
| Accrued UF indexation | 45,151 | |||||||||||
| Exchange rate differences | ||||||||||||
| Depreciation | ||||||||||||
| Repricing | ||||||||||||
| Expiration | ||||||||||||
| Conversion to common shares | ||||||||||||
| Balance as of December 31, 2024 | 1,068,879 | |||||||||||
| Balance as of January 1, 2025 | 1,068,879 | |||||||||||
| New issuances performed | ||||||||||||
| Transaction costs | ||||||||||||
| Amortization of transaction costs | ||||||||||||
| Accrued interest | 35,283 | |||||||||||
| Acquisition or redemption by the issuer | ||||||||||||
| Modification of the issuance conditions | ||||||||||||
| Interest and UF indexation payments to the holder | (43,392 | ) | ||||||||||
| Principal payments to the holder | (9,552 | ) | ||||||||||
| Accrued UF indexation | 35,875 | |||||||||||
| Exchange rate differences | ||||||||||||
| Depreciation | ||||||||||||
| Repricing | ||||||||||||
| Expiration | ||||||||||||
| Conversion to common shares | ||||||||||||
| Balance as of December 31, 2025 | 1,087,093 | |||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 21. | Regulatory capital financial instruments, continued: |
| d) | Below is the detail of the subordinated bonds due as of December 31, 2025 and 2024: |
| December 2025 | ||||||||||||||||
| Series | Currency | Issuance currency amount |
Interest rate % |
Registration date |
Maturity date |
Balance owed MCh$ |
||||||||||
| C1 | UF | 300,000 | 7.5 | 12/06/1999 | 01/01/2030 | 4,167 | ||||||||||
| C1 | UF | 200,000 | 7.4 | 12/06/1999 | 01/01/2030 | 2,780 | ||||||||||
| C1 | UF | 530,000 | 7.1 | 12/06/1999 | 01/01/2030 | 7,404 | ||||||||||
| C1 | UF | 300,000 | 7.1 | 12/06/1999 | 01/01/2030 | 4,193 | ||||||||||
| C1 | UF | 50,000 | 6.5 | 12/06/1999 | 01/01/2030 | 706 | ||||||||||
| C1 | UF | 450,000 | 6.6 | 12/06/1999 | 01/01/2030 | 6,350 | ||||||||||
| D1 | UF | 2,000,000 | 3.6 | 06/20/2002 | 04/01/2026 | 3,626 | ||||||||||
| F | UF | 1,000,000 | 5.0 | 11/28/2008 | 11/01/2033 | 38,760 | ||||||||||
| F | UF | 1,500,000 | 5.0 | 11/28/2008 | 11/01/2033 | 58,140 | ||||||||||
| F | UF | 759,000 | 4.5 | 11/28/2008 | 11/01/2033 | 30,367 | ||||||||||
| F | UF | 241,000 | 4.5 | 11/28/2008 | 11/01/2033 | 9,642 | ||||||||||
| F | UF | 4,130,000 | 4.2 | 11/28/2008 | 11/01/2033 | 167,899 | ||||||||||
| F | UF | 1,000,000 | 4.3 | 11/28/2008 | 11/01/2033 | 40,653 | ||||||||||
| F | UF | 70,000 | 4.2 | 11/28/2008 | 11/01/2033 | 2,853 | ||||||||||
| F | UF | 4,000,000 | 3.9 | 11/28/2008 | 11/01/2033 | 166,840 | ||||||||||
| F | UF | 2,300,000 | 3.8 | 11/28/2008 | 11/01/2033 | 96,242 | ||||||||||
| G | UF | 600,000 | 4.0 | 11/29/2011 | 11/01/2036 | 23,505 | ||||||||||
| G | UF | 50,000 | 4.0 | 11/29/2011 | 11/01/2036 | 1,959 | ||||||||||
| G | UF | 80,000 | 3.9 | 11/29/2011 | 11/01/2036 | 3,153 | ||||||||||
| G | UF | 450,000 | 3.9 | 11/29/2011 | 11/01/2036 | 17,751 | ||||||||||
| G | UF | 160,000 | 3.9 | 11/29/2011 | 11/01/2036 | 6,311 | ||||||||||
| G | UF | 1,000,000 | 2.7 | 11/29/2011 | 11/01/2036 | 43,916 | ||||||||||
| G | UF | 300,000 | 2.7 | 11/29/2011 | 11/01/2036 | 13,175 | ||||||||||
| G | UF | 1,360,000 | 2.6 | 11/29/2011 | 11/01/2036 | 59,884 | ||||||||||
| J | UF | 1,400,000 | 1.0 | 11/29/2011 | 11/01/2042 | 79,235 | ||||||||||
| J | UF | 1,500,000 | 1.0 | 11/29/2011 | 11/01/2042 | 85,004 | ||||||||||
| J | UF | 1,100,000 | 1.0 | 11/29/2011 | 11/01/2042 | 62,751 | ||||||||||
| I | UF | 900,000 | 1.0 | 11/29/2011 | 11/01/2040 | 49,827 | ||||||||||
| Total subordinated bonds owed | 1,087,093 | |||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 21. | Regulatory capital financial instruments, continued: |
| December 2024 | ||||||||||||||||
| Serie | Currency | Issuance currency amount | Interest rate % |
Registration date |
Maturity date |
Balance owed MCh$ |
||||||||||
| C1 | UF | 300,000 | 7.5 | 12/06/1999 | 01/01/2030 | 4,761 | ||||||||||
| C1 | UF | 200,000 | 7.4 | 12/06/1999 | 01/01/2030 | 3,178 | ||||||||||
| C1 | UF | 530,000 | 7.1 | 12/06/1999 | 01/01/2030 | 8,472 | ||||||||||
| C1 | UF | 300,000 | 7.1 | 12/06/1999 | 01/01/2030 | 4,797 | ||||||||||
| C1 | UF | 50,000 | 6.5 | 12/06/1999 | 01/01/2030 | 809 | ||||||||||
| C1 | UF | 450,000 | 6.6 | 12/06/1999 | 01/01/2030 | 7,283 | ||||||||||
| D1 | UF | 2,000,000 | 3.6 | 06/20/2002 | 04/01/2026 | 10,335 | ||||||||||
| F | UF | 1,000,000 | 5.0 | 11/28/2008 | 11/01/2033 | 37,358 | ||||||||||
| F | UF | 1,500,000 | 5.0 | 11/28/2008 | 11/01/2033 | 56,037 | ||||||||||
| F | UF | 759,000 | 4.5 | 11/28/2008 | 11/01/2033 | 29,365 | ||||||||||
| F | UF | 241,000 | 4.5 | 11/28/2008 | 11/01/2033 | 9,324 | ||||||||||
| F | UF | 4,130,000 | 4.2 | 11/28/2008 | 11/01/2033 | 162,631 | ||||||||||
| F | UF | 1,000,000 | 4.3 | 11/28/2008 | 11/01/2033 | 39,377 | ||||||||||
| F | UF | 70,000 | 4.2 | 11/28/2008 | 11/01/2033 | 2,764 | ||||||||||
| F | UF | 4,000,000 | 3.9 | 11/28/2008 | 11/01/2033 | 162,042 | ||||||||||
| F | UF | 2,300,000 | 3.8 | 11/28/2008 | 11/01/2033 | 93,507 | ||||||||||
| G | UF | 600,000 | 4.0 | 11/29/2011 | 11/01/2036 | 22,697 | ||||||||||
| G | UF | 50,000 | 4.0 | 11/29/2011 | 11/01/2036 | 1,891 | ||||||||||
| G | UF | 80,000 | 3.9 | 11/29/2011 | 11/01/2036 | 3,046 | ||||||||||
| G | UF | 450,000 | 3.9 | 11/29/2011 | 11/01/2036 | 17,149 | ||||||||||
| G | UF | 160,000 | 3.9 | 11/29/2011 | 11/01/2036 | 6,097 | ||||||||||
| G | UF | 1,000,000 | 2.7 | 11/29/2011 | 11/01/2036 | 42,768 | ||||||||||
| G | UF | 300,000 | 2.7 | 11/29/2011 | 11/01/2036 | 12,831 | ||||||||||
| G | UF | 1,360,000 | 2.6 | 11/29/2011 | 11/01/2036 | 58,330 | ||||||||||
| J | UF | 1,400,000 | 1.0 | 11/29/2011 | 11/01/2042 | 77,836 | ||||||||||
| J | UF | 1,500,000 | 1.0 | 11/29/2011 | 11/01/2042 | 83,509 | ||||||||||
| J | UF | 1,100,000 | 1.0 | 11/29/2011 | 11/01/2042 | 61,667 | ||||||||||
| I | UF | 900,000 | 1.0 | 11/29/2011 | 11/01/2040 | 49,018 | ||||||||||
| Total subordinated bonds owed | 1,068,879 | |||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 22. | Provision for dividends: |
As of December 31, 2025 and 2024, this item is composed as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Provisions for dividends | 357,679 | 362,218 | ||||||
| Total | 357,679 | 362,218 | ||||||
| (a) | The changes at the end of each year are as follows: |
| Provisions for dividends | Total | |||||||
| MCh$ | MCh$ | |||||||
| Balances as of January 1, 2024 | 373,090 | 373,090 | ||||||
| Provisions established | 362,218 | 362,218 | ||||||
| Provisions used | (373,090 | ) | (373,090 | ) | ||||
| Provisions released | ||||||||
| Balances as of December 31, 2024 | 362,218 | 362,218 | ||||||
| Provisions established | 357,679 | 357,679 | ||||||
| Provisions used | (362,218 | ) | (362,218 | ) | ||||
| Provisions released | ||||||||
| Balances as of December 31, 2025 | 357,679 | 357,679 | ||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 23. | Provisions for contingent loans credit risk: |
As of December 31, 2025 and 2024, for credit risk for contingent loans is composed as follows:
| Outstanding exposure | ECL | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||
| Warranty by endorsement and sureties | 288,710 | 336,737 | 1,884 | 1,505 | ||||||||||||
| Confirmed foreign letters of credit | 186,843 | 160,856 | 161 | 92 | ||||||||||||
| Issued foreign letters of credit | 262,916 | 281,360 | 400 | 321 | ||||||||||||
| Performance guarantees | 3,173,261 | 3,124,626 | 18,190 | 16,923 | ||||||||||||
| Undrawn credit lines | 11,453,782 | 11,125,300 | 64,810 | 68,555 | ||||||||||||
| Other commitments | 69,191 | 51,889 | 262 | 89 | ||||||||||||
| Total | 15,434,703 | 15,080,768 | 85,707 | 87,485 | ||||||||||||
| a) | The changes of provisions for credit risk for contingent loans is as follows: |
| Provisions for credit risk for contingent loans | Total | |||||||
| MCh$ | MCh$ | |||||||
| Balances as of January 1, 2024 | 89,640 | 89,640 | ||||||
| Provisions established | ||||||||
| Provisions used | ||||||||
| Provisions released | (4,199 | ) | (4,199 | ) | ||||
| Exchange differences | 2,044 | 2,044 | ||||||
| Balances as of December 31, 2024 | 87,485 | 87,485 | ||||||
| Provisions established | ||||||||
| Provisions used | ||||||||
| Provisions released | (290 | ) | (290 | ) | ||||
| Exchange differences | (1,488 | ) | (1,488 | ) | ||||
| Balances as of December 31, 2025 | 85,707 | 85,707 | ||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 23. | Provisions for contingent loans credit risk, continued: |
| (b) | Impairment losses on contingent loan risks: |
An analysis of changes in the gross carrying amount and the corresponding provision for ECL of contingent loans credit risk is as follow:
The table below shows the credit quality and the maximum exposure to credit risk based on the Bank’s internal credit rating system and year-end stage classification as of December 31, 2025 and 2024.
| As of December 31, 2025 | As of December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Individual MCh$ |
Group MCh$ |
Individual MCh$ |
Group MCh$ |
Individual MCh$ |
Group MCh$ |
Total MCh$ |
Individual MCh$ |
Group MCh$ |
Individual MCh$ |
Group MCh$ |
Individual MCh$ |
Group MCh$ |
Total MCh$ |
|||||||||||||||||||||||||||||||||||||||||||
| Normal | 5,502,166 | 9,569,203 | 11,305 | 292,476 | 15,375,150 | 5,328,378 | 9,397,036 | 19,936 | 262,865 | 15,008,215 | ||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | 39,069 | 39,069 | 40,227 | 40,227 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-performing | 13,813 | 6,671 | 20,484 | 24,503 | 7,823 | 32,326 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 5,502,166 | 9,569,203 | 50,374 | 292,476 | 13,813 | 6,671 | 15,434,703 | 5,328,378 | 9,397,036 | 60,163 | 262,865 | 24,503 | 7,823 | 15,080,768 | ||||||||||||||||||||||||||||||||||||||||||
An analysis of changes in the outstanding exposures and corresponding provision for ECL during the 2025 and 2024 periods are as follows:
| Stage 1 | Stage 2 | Stage 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Individual | Group | Individual | Group | Individual | Group | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross
carrying amount MCh$ |
ECL MCh$ |
Gross
carrying amount MCh$ |
ECL MCh$ |
Gross
carrying amount MCh$ |
ECL MCh$ |
Gross
carrying amount MCh$ |
ECL MCh$ |
Gross
carrying amount MCh$ |
ECL MCh$ |
Gross
carrying amount MCh$ |
ECL MCh$ |
Gross
carrying amount MCh$ |
ECL MCh$ |
|||||||||||||||||||||||||||||||||||||||||||
| Outstanding exposure as of January 1, 2025 | 5,328,378 | 10,684 | 9,397,036 | 61,028 | 60,163 | 4,923 | 262,865 | 2,460 | 24,503 | 4,748 | 7,823 | 3,642 | 15,080,768 | 87,485 | ||||||||||||||||||||||||||||||||||||||||||
| Net change on exposures | 271,262 | 222 | 620,577 | (1,658 | ) | (3,460 | ) | (1,755 | ) | (79,908 | ) | (279 | ) | (13,302 | ) | (1,788 | ) | (5,786 | ) | (864 | ) | 789,383 | (6,122 | ) | ||||||||||||||||||||||||||||||||
| Transfer to Stage 1 | 45,277 | 337 | 737,007 | 8,805 | (45,220 | ) | (301 | ) | (734,234 | ) | (7,544 | ) | (57 | ) | (36 | ) | (2,773 | ) | (1,261 | ) | — | — | ||||||||||||||||||||||||||||||||||
| Transfer to Stage 2 | (41,967 | ) | (122 | ) | (862,155 | ) | (6,016 | ) | 42,749 | 160 | 862,400 | 6,115 | (782 | ) | (38 | ) | (245 | ) | (99 | ) | — | — | ||||||||||||||||||||||||||||||||||
| Transfer to Stage 3 | (94 | ) | — | (619 | ) | (5 | ) | (3,393 | ) | (100 | ) | (7,306 | ) | (1,507 | ) | 3,487 | 100 | 7,925 | 1,512 | — | — | |||||||||||||||||||||||||||||||||||
| Impact on year-end ECL of exposures transferred between stages during the year | — | (206 | ) | — | (3,994 | ) | — | 899 | — | 3,624 | — | 929 | — | 182 | — | 1,434 | ||||||||||||||||||||||||||||||||||||||||
| Refinements to models used for calculation | — | 4,290 | — | — | — | 108 | — | — | — | — | — | — | — | 4,398 | ||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange adjustments | (100,690 | ) | (235 | ) | (322,643 | ) | (1,080 | ) | (465 | ) | (3 | ) | (11,341 | ) | (42 | ) | (36 | ) | (18 | ) | (273 | ) | (110 | ) | (435,448 | ) | (1,488 | ) | ||||||||||||||||||||||||||||
| Total | 5,502,166 | 14,970 | 9,569,203 | 57,080 | 50,374 | 3,931 | 292,476 | 2,827 | 13,813 | 3,897 | 6,671 | 3,002 | 15,434,703 | 85,707 | ||||||||||||||||||||||||||||||||||||||||||
| Outstanding exposure as of January 1, 2024 | 4,775,026 | 12,464 | 8,422,110 | 59,093 | 68,290 | 6,242 | 254,564 | 2,364 | 18,861 | 5,417 | 8,584 | 4,060 | 13,547,435 | 89,640 | ||||||||||||||||||||||||||||||||||||||||||
| Net change on exposures | 446,635 | (2,010 | ) | 640,430 | 1,862 | (10,584 | ) | (1,642 | ) | (61,617 | ) | (72 | ) | (5,580 | ) | (2,106 | ) | (6,498 | ) | (1,056 | ) | 1,002,786 | (5,024 | ) | ||||||||||||||||||||||||||||||||
| Transfer to Stage 1 | 51,618 | 278 | 724,421 | 9,166 | (51,590 | ) | (269 | ) | (718,951 | ) | (6,839 | ) | (28 | ) | (9 | ) | (5,470 | ) | (2,327 | ) | — | — | ||||||||||||||||||||||||||||||||||
| Transfer to Stage 2 | (64,150 | ) | (178 | ) | (781,359 | ) | (6,138 | ) | 64,276 | 242 | 781,686 | 6,272 | (126 | ) | (64 | ) | (327 | ) | (134 | ) | — | — | ||||||||||||||||||||||||||||||||||
| Transfer to Stage 3 | (230 | ) | (1 | ) | (4,778 | ) | (55 | ) | (11,105 | ) | (172 | ) | (6,390 | ) | (1,511 | ) | 11,335 | 173 | 11,168 | 1,566 | — | — | ||||||||||||||||||||||||||||||||||
| Impact on year-end ECL of exposures transferred between stages during the year | — | (137 | ) | — | (4,400 | ) | — | 497 | — | 2,192 | — | 1,314 | — | 1,359 | — | 825 | ||||||||||||||||||||||||||||||||||||||||
| Refinements to models used for calculation | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange adjustments | 119,479 | 268 | 396,212 | 1,500 | 876 | 25 | 13,573 | 54 | 41 | 23 | 366 | 174 | 530,547 | 2,044 | ||||||||||||||||||||||||||||||||||||||||||
| Total | 5,328,378 | 10,684 | 9,397,036 | 61,028 | 60,163 | 4,923 | 262,865 | 2,460 | 24,503 | 4,748 | 7,823 | 3,642 | 15,080,768 | 87,485 | ||||||||||||||||||||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 24. | Other provisions: |
As of December 31, 2025 and 2024, this line item is composed of the following:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Provisions for customer loyalty program and merit program obligations | 37,806 | 40,621 | ||||||
| Provisions for lawsuits and litigation | 2,037 | 1,592 | ||||||
| Provisions for operational risk | 552 | 907 | ||||||
| Other provisions for other contingencies | ||||||||
| Total | 40,395 | 43,120 | ||||||
| (a) | The following table shows the changes in provisions during the year 2025 and 2024: |
| Provisions for customer loyalty program and merit program obligations |
Provisions for lawsuits and litigation |
Provisions for operational risk |
Other provisions for other contingencies |
Total | ||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||
| Balances as of January 1, 2024 | 36,242 | 1,173 | 341 | 264 | 38,020 | |||||||||||||||
| Provisions established | 4,379 | 1,038 | 836 | 6,253 | ||||||||||||||||
| Provisions used | (482 | ) | (157 | ) | (639 | ) | ||||||||||||||
| Provisions released | (137 | ) | (113 | ) | (264 | ) | (514 | ) | ||||||||||||
| Balances as of December 31, 2024 | 40,621 | 1,592 | 907 | 43,120 | ||||||||||||||||
| Balances as of January 1, 2025 | 40,621 | 1,592 | 907 | 43,120 | ||||||||||||||||
| Provisions established | — | 657 | 426 | 1,083 | ||||||||||||||||
| Provisions used | (108 | ) | (695 | ) | (803 | ) | ||||||||||||||
| Provisions released | (2,815 | ) | (104 | ) | (86 | ) | (3,005 | ) | ||||||||||||
| Balances as of December 31, 2025 | 37,806 | 2,037 | 552 | 40,395 | ||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 25. | Employee Benefits: |
As of December 31, 2025 and 2024, this item is composed as follows:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Short-term employee benefits | 131,763 | 143,305 | ||||||
| Benefits to employees for contract termination | 8,390 | 8,328 | ||||||
| Total | 140,153 | 151,633 | ||||||
| (a) | Short-term employee benefits: |
| (i) | Compliance bonuses provision: |
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Balances as of January 1 | 68,356 | 71,102 | ||||||
| Net provisions established | 53,873 | 54,087 | ||||||
| Provisions used | (54,877 | ) | (56,833 | ) | ||||
| Total | 67,352 | 68,356 | ||||||
| (ii) | Accrued vacations: |
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Balances as of January 1 | 42,824 | 43,257 | ||||||
| Net provisions established | 8,322 | 8,433 | ||||||
| Provisions used | (7,908 | ) | (8,866 | ) | ||||
| Total | 43,238 | 42,824 | ||||||
| (iii) | Provision for other benefits to personnel: |
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Balances as of January 1 | 32,125 | 30,096 | ||||||
| Net provisions established | 45,583 | 54,571 | ||||||
| Provisions used | (56,535 | ) | (52,542 | ) | ||||
| Total | 21,173 | 32,125 | ||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 25. | Employee Benefits, continued: |
| (b) | Benefits to employees for contract termination: |
| (i) | Changes in the provision for employee benefits for contract termination are detailed as follows: |
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Present value of the obligations at the beginning of the year | 8,328 | 9,677 | ||||||
| Increase in the provision | 469 | 586 | ||||||
| Payment of benefits | (469 | ) | (1,820 | ) | ||||
| Effect of change in actuarial factors | 62 | (115 | ) | |||||
| Total | 8,390 | 8,328 | ||||||
| (ii) | Net benefits expenses: |
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Increase in the provisions | 21 | 137 | ||||||
| Interest cost of benefits obligations | 448 | 449 | ||||||
| Effect of change in actuarial factors | 62 | (115 | ) | |||||
| Net benefit cost | 531 | 471 | ||||||
| (iii) | Factors used in the calculation: |
The main assumptions used in the determination of staff severance indemnity payment obligations for the Bank’s plan are shown below:
| December 31, 2025 |
December 31, 2024 |
|||||||
| % | % | |||||||
| Discount rate | 5.71 | 5.71 | ||||||
| Salary increase rate | 5.50 | 4.50 | ||||||
| Probability of payment | 99.99 | 99.99 | ||||||
The most recent actuarial valuation of the provision for staff severance indemnity payments was performed during the first quarter of 2025.
| (c) | Share-based compensation programs: |
As of December 31, 2025 and 2024, the Bank and its subsidiaries do not have a stock-based compensation plan.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 26. | Other Liabilities: |
As of December 31, 2025 and 2024, this line item is composed of the following:
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Accounts payable to third parties | 429,864 | 420,260 | ||||||
| Creditors for intermediation of financial instruments | 417,372 | 193,171 | ||||||
| Liability for income from regular activities from contracts with customers | 37,812 | 39,783 | ||||||
| Agreed dividends payable | 16,792 | 13,467 | ||||||
| VAT debit | 4,317 | 4,077 | ||||||
| Outstanding transactions | 1,858 | 1,532 | ||||||
| Other cash guarantees received | 573 | 483 | ||||||
| Securities to be settled | 3,633 | |||||||
| Other liabilities | 39,488 | 34,992 | ||||||
| Total | 948,076 | 711,398 | ||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 27. | Equity: |
| (a) | Capital |
| (i) | Authorized, subscribed and paid shares: |
As of December 31, 2024, the paid-in capital of Banco de Chile is represented by 101,017,081,114 registered shares (101,017,081,114 in 2024), with no par value, subscribed and fully paid.
| As of December 31, 2025 | ||||||||
| Name of the company or shareholders | Number of shares |
Ownership % |
||||||
| LQ Inversiones Financieras S.A. | 46,815,289,329 | 46.344 | % | |||||
| Banchile Corredores de Bolsa S.A. | 5,298,295,922 | 5.245 | % | |||||
| Inversiones LQ-SM Limitada | 4,854,988,014 | 4.806 | % | |||||
| Banco de Chile on behalf of State Street | 4,368,739,111 | 4.325 | % | |||||
| Banco Santander on behalf of foreign investors | 3,959,115,077 | 3.919 | % | |||||
| JP Morgan Chase Bank | 2,719,097,108 | 2.692 | % | |||||
| Banco de Chile on behalf of non-resident third parties | 2,355,382,741 | 2.332 | % | |||||
| Banco Santander Chile | 1,926,817,275 | 1.907 | % | |||||
| Ever Chile SPA | 1,888,369,814 | 1.869 | % | |||||
| Banco de Chile on behalf of Citibank New York | 1,663,309,364 | 1.647 | % | |||||
| Ever 1 BAE SPA | 1,166,584,950 | 1.155 | % | |||||
| Larraín Vial S.A. Corredora de Bolsa | 1,000,886,079 | 0.991 | % | |||||
| Inversiones Avenida Borgoño Limitada | 882,604,102 | 0.874 | % | |||||
| BCI Corredores de Bolsa S.A. | 779,379,823 | 0.772 | % | |||||
| A.F.P Habitat S.A. for A Fund | 758,929,122 | 0.751 | % | |||||
| Santander Corredores de Bolsa Limitada | 703,730,776 | 0.697 | % | |||||
| A.F.P Cuprum S.A. for A Fund | 635,579,418 | 0.629 | % | |||||
| Banco de Chile on behalf of Citibank London | 549,822,754 | 0.544 | % | |||||
| Valores Security S.A. Corredores de Bolsa | 527,069,658 | 0.522 | % | |||||
| A.F.P Capital S.A. Pension Fund A | 518,556,321 | 0.513 | % | |||||
| Subtotal | 83,372,546,758 | 82.534 | % | |||||
| Other shareholders | 17,644,534,356 | 17.466 | % | |||||
| Total | 101,017,081,114 | 100.000 | % | |||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 27. | Equity, continued: |
| (a) | Capital, continued: |
| (i) | Authorized, subscribed and paid shares, continued: |
| As of December 31, 2024 | ||||||||
| Name of the company or shareholders | Number of shares |
Ownership % |
||||||
| LQ Inversiones Financieras S.A. | 46,815,289,329 | 46.344 | % | |||||
| Banco de Chile on behalf of State Street | 6,125,765,969 | 6.064 | % | |||||
| Banchile Corredores de Bolsa S.A | 5,123,539,720 | 5.072 | % | |||||
| Banco Santander on behalf of foreign investors | 5,080,833,862 | 5.030 | % | |||||
| Inversiones LQ-SM Limitada | 4,854,988,014 | 4.806 | % | |||||
| JP Morgan Chase Bank | 3,041,703,508 | 3.011 | % | |||||
| Banco de Chile on behalf of non-resident third parties | 2,666,777,747 | 2.640 | % | |||||
| Banco Santander Chile | 1,941,976,163 | 1.922 | % | |||||
| Ever Chile SPA | 1,888,369,814 | 1.869 | % | |||||
| Ever 1 BAE SPA | 1,166,584,950 | 1.155 | % | |||||
| Larraín Vial S.A. Corredora de Bolsa | 1,042,343,304 | 1.032 | % | |||||
| Banco de Chile on behalf of Citibank New York | 1,038,850,995 | 1.028 | % | |||||
| BCI Corredores de Bolsa S.A. | 989,711,426 | 0.980 | % | |||||
| Inversiones Avenida Borgoño Limitada | 728,439,279 | 0.721 | % | |||||
| Santander Corredores de Bolsa Limitada | 581,788,686 | 0.576 | % | |||||
| A.F.P Habitat S.A. for A Fund | 527,598,687 | 0.522 | % | |||||
| Valores Security S.A. Corredores de Bolsa | 516,192,449 | 0.511 | % | |||||
| A.F.P Cuprum S.A. for A Fund | 492,665,765 | 0.488 | % | |||||
| Inversiones CDP SPA | 487,744,912 | 0.483 | % | |||||
| BTG Pactual Chile S.A. Corredores de Bolsa | 463,503,644 | 0.459 | % | |||||
| Subtotal | 85,574,668,223 | 84.713 | % | |||||
| Other shareholders | 15,442,412,891 | 15.287 | % | |||||
| Total | 101,017,081,114 | 100.000 | % | |||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 27. | Equity, continued: |
| (a) | Capital, continued: |
| (ii) | Shares: |
The following table shows the share movements from December 31, 2023 to December 31, 2025:
| Total | ||||
| ordinary shares |
||||
| Total shares as of December 31, 2023 | 101,017,081,114 | |||
| Total shares as of December 31, 2024 | 101,017,081,114 | |||
| Total shares as of December 31, 2025 | 101,017,081,114 | |||
| (b) | Approval and payment of dividends: |
At the Bank´s Ordinary Shareholders’ Meeting held on March 27, 2025, the distribution and payment of dividend No. 213 of Ch$9.85357420889 per share of the Banco de Chile was approved, with debit to the net distributable income for the year ended as of December 31, 2024. Dividends paid in 2025 amounted to Ch$995,380 million.
At the Bank´s Ordinary Shareholders’ Meeting held on March 28, 2024, the distribution and payment of dividend No. 212 of Ch$8.07716286860 per share of the Banco de Chile was approved, with debit to the net distributable income for the year ended as of December 31, 2023. Dividends paid in 2024 amounted to Ch$815,932 million.
| (c) | Provision for minimum dividends: |
The Chilean Corporations Law requires a minimum distribution of 30% of net income for the period. This amount is determined based on net income under Chilean GAAP. Accordingly, the Bank recorded a liability under the line item “Provision for dividends”.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 27. | Equity, continued: |
| (d) | Earnings per share: |
| (i) | Basic earnings per share: |
Basic earnings per share are determined by dividing the net income attributable to the Bank ordinary shareholders in a year between the weighted average number of shares outstanding during that year, excluding the average number of own shares held throughout the year.
| (ii) | Diluted earnings per share: |
In order to calculate the diluted earnings per share, both the amount of income attributable to ordinary shareholders and the weighted average number of shares outstanding, net of own shares, must be adjusted for all the inherent dilutive effects to the potential ordinary shares (stock options, warrants and convertible debt).
The following table shows the income and share data used in the calculation of EPS:
| As of December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Basic earnings per share: | ||||||||||||
| Net income attributable to bank´s shareholders (in million Chilean pesos) | 1,185,413 | 1,248,476 | 1,374,026 | |||||||||
| Weighted average number of ordinary shares | 101,017,081,114 | 101,017,081,114 | 101,017,081,114 | |||||||||
| Earning per shares (in Chilean pesos) | 11.73 | 12.36 | 13.60 | |||||||||
| Diluted earnings per share: | ||||||||||||
| Net income attributable to bank´s shareholders (in million Chilean pesos) | 1,185,413 | 1,248,476 | 1,374,026 | |||||||||
| Weighted average number of ordinary shares | 101,017,081,114 | 101,017,081,114 | 101,017,081,114 | |||||||||
| Assumed conversion of convertible debt | ||||||||||||
| Adjusted number of shares | 101,017,081,114 | 101,017,081,114 | 101,017,081,114 | |||||||||
| Diluted earnings per share (in Chilean pesos) | 11.73 | 12.36 | 13.60 | |||||||||
As of December 31, 2025, 2024 and 2023, the Bank does not have instruments that generate dilutive effects.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 27. | Equity, continued: |
| (e) | Other comprehensive income: |
The detail of and changes in accumulated other comprehensive income as of December 31, 2025, 2024 and 2023:
| Elements that will not be reclassified in profit or loss | Elements that can be reclassified in profit or loss | |||||||||||||||||||||||||||||||||||||||
| New measurements of net defined benefit liability and actuarial results for other employee benefit plans | Fair value changes of equity instruments designated as at fair value through other comprehensive income | Income tax | Subtotal | Fair value changes of financial assets at fair value through other comprehensive income | Cash flow accounting hedge | Participation in other comprehensive income of entities registered under the equity method | Income tax | Subtotal | Total | |||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||
| Opening balances as of January 1, 2023 | (338 | ) | 4,302 | (1,071 | ) | 2,893 | 268 | (103,782 | ) | (190 | ) | 31,382 | (72,322 | ) | (69,429 | ) | ||||||||||||||||||||||||
| Other comprehensive income for the year | (75 | ) | 5,367 | (1,429 | ) | 3,863 | 8,874 | 113,183 | 116 | (32,365 | ) | 89,808 | 93,671 | |||||||||||||||||||||||||||
| Balances as of December 31, 2023 | (413 | ) | 9,669 | (2,500 | ) | 6,756 | 9,142 | 9,401 | (74 | ) | (983 | ) | 17,486 | 24,242 | ||||||||||||||||||||||||||
| Opening balances as of January 1, 2024 | (413 | ) | 9,669 | (2,500 | ) | 6,756 | 9,142 | 9,401 | (74 | ) | (983 | ) | 17,486 | 24,242 | ||||||||||||||||||||||||||
| Other comprehensive income for the year | 115 | (212 | ) | 893 | 796 | (4,664 | ) | (21,798 | ) | 26 | 5,175 | (21,261 | ) | (20,465 | ) | |||||||||||||||||||||||||
| Balances as of December 31, 2024 | (298 | ) | 9,457 | (1,607 | ) | 7,552 | 4,478 | (12,397 | ) | (48 | ) | 4,192 | (3,775 | ) | 3,777 | |||||||||||||||||||||||||
| Opening balances as of January 1, 2025 | (298 | ) | 9,457 | (1,607 | ) | 7,552 | 4,478 | (12,397 | ) | (48 | ) | 4,192 | (3,775 | ) | 3,777 | |||||||||||||||||||||||||
| Other comprehensive income for the year | (62 | ) | (148 | ) | (448 | ) | (658 | ) | 8,806 | (28,341 | ) | (59 | ) | 6,716 | (12,878 | ) | (13,536 | ) | ||||||||||||||||||||||
| Balances as of December 31, 2025 | (360 | ) | 9,309 | (2,055 | ) | 6,894 | 13,284 | (40,738 | ) | (107 | ) | 10,908 | (16,653 | ) | (9,759 | ) | ||||||||||||||||||||||||
During 2025, a reclassification was made from comprehensive income to equity reserves as a result of the sale of equity instruments irrevocably designated at fair value for Ch$1,916 million.
| (f) | Retained earnings from previous years: |
During 2025, the shareholders at the Ordinary Shareholders’ Meeting of Banco de Chile agreed to deduct and retain from net income for 2024, an amount equivalent to the adjustment of the value of paid-in capital and reserves according to the variation in the Consumer Price Index, which occurred between November 2023 and November 2024, of Ch$212,012 million.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 28. | Contingencies and Commitments: |
| (a) | The Bank and its subsidiaries have exposures associated with contingent loans and other liabilities according to the following detail: |
| (a.1) | Contingent loans: |
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Guarantees and sureties | ||||||||
| Guarantees and sureties in domestic currency | ||||||||
| Guarantees and sureties in foreign currency | 288,710 | 336,737 | ||||||
| Letters of credit for goods circulation operations | 449,759 | 442,216 | ||||||
| Debt purchase commitments in local currency abroad | ||||||||
| Transactions related to contingent events | ||||||||
| Transactions related to contingent events in domestic currency | 2,563,484 | 2,544,288 | ||||||
| Transactions related to contingent events in foreign currency | 609,777 | 580,338 | ||||||
| Undrawn credit lines with immediate termination | ||||||||
| Available balance of lines of credit and agreed overdraft in current account – commercial loans | 1,764,560 | 1,642,163 | ||||||
| Available balance of lines of credit on credit card – commercial loans | 370,983 | 359,638 | ||||||
| Available balance of lines of credit and agreed overdraft in current account – consumer loans | 1,501,358 | 1,497,076 | ||||||
| Available balance of lines of credit on credit card – consumer loans | 7,816,881 | 7,626,423 | ||||||
| Available balance of lines of credit and agreed overdraft in current account – due from banks loans | ||||||||
| Undrawn credit lines | ||||||||
| Other commitments | ||||||||
| Credits for higher studies Law No. 20,027 (CAE) | ||||||||
| Other irrevocable credit commitments | 69,191 | 51,889 | ||||||
| Other credit commitments | ||||||||
| Total | 15,434,703 | 15,080,768 | ||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 28. | Contingencies and Commitments, continued: |
| (a.2) | Responsibilities assumed to meet customer needs: |
| 2025 | 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Transactions on behalf of third parties | ||||||||
| Collections | 138,556 | 214,446 | ||||||
| Placement or sale of financial instruments | ||||||||
| Transferred financial assets managed by the bank | ||||||||
| Third-party resources managed by the bank | 1,635,950 | 1,147,660 | ||||||
| Subtotal | 1,774,506 | 1,362,106 | ||||||
| Securities custody | ||||||||
| Securities in custody by a banking subsidiary | 9,719,621 | 7,443,549 | ||||||
| Securities in custody by the bank | 4,438,522 | 3,318,810 | ||||||
| Securities in custody deposited in another entity | 29,035,809 | 19,509,831 | ||||||
| Securities issued by the bank | ||||||||
| Subtotal | 43,193,952 | 30,272,190 | ||||||
| Total | 44,968,458 | 31,634,296 | ||||||
| (b) | Lawsuits and legal proceedings: |
| (b.1) | Normal judicial contingencies in the industry: |
At the date of issuance of these Consolidated Financial Statements, there are legal actions filed against the Bank related with the ordinary course operations. As of December 31, 2025, the Bank maintain provisions for judicial contingencies amounting to Ch$2,037 million (Ch$1,592 million as of December 2024), which are part of the item “Provisions for contingencies” in the Statement of Financial Position.
The estimated end dates of the related legal contingencies are as follows:
| As of December 31, 2025 | ||||||||||||||||||||||||
| 2026 | 2027 | 2028 | 2029 | 2030 | Total | |||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||
| Legal contingencies | 596 | 1,441 | 2,037 | |||||||||||||||||||||
| (b.2) | Contingencies for significant lawsuits: |
As of December 31, 2025 and 2024, there are not significant lawsuits in court that affect or may affect these Consolidated Financial Statements.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 28. | Contingencies and Commitments, continued: |
| (c) | Guarantees granted by operations: |
| (i) | In the subsidiary Banchile Administradora General de Fondos S.A.: |
In compliance with Article No, 12 of Law No. 20,712, 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 such role the Bank has issued bank guarantees totaling UF 4,879,700 maturing January 8, 2026. The subsidiary engaged a policy with Mapfre Seguros Generales S.A. for the Real State Funds by a guaranteed amount of UF 722,700.
As of December 31, 2025 and 2024, the Bank has not guaranteed mutual funds.
| (ii) | In subsidiary Banchile Corredores de Bolsa S.A.: |
For the purposes of ensuring correct and full compliance with all of its obligations as broker-dealer entity, in conformity with the provisions from Article 30 et seq of Law No. 18,045 on the Securities Markets, the subsidiary established a guarantee in an insurance policy for UF 20,000, insured by Mapfre Seguros Generales S.A., that matures on April 22, 2026, whereby the Securities Exchange of the Santiago Stock Exchange was appointed as the subsidiary’s creditor representative.
| 2025 | 2024 | |||||||
| Guarantees: | MCh$ | MCh$ | ||||||
| Shares received as collateral for simultaneous transactions: | ||||||||
| Santiago Securities Exchange, Stock Exchange | 23,244 | 9,171 | ||||||
| Electronic Chilean Securities Exchange, Stock Exchange | 37,559 | 32,024 | ||||||
| Fixed income securities delivered to guarantee CCLV system: | ||||||||
| Santiago Securities Exchange, Stock Exchange | 9,840 | 7,843 | ||||||
| Fixed income securities as collateral for the Santiago Stock Exchange | 2,148 | 2,148 | ||||||
| Shares delivered to guarantee equity lending and short-selling: | ||||||||
| Santiago Securities Exchange, Stock Exchange | 4,744 | |||||||
| Cash guarantees received for operations with derivatives | 8,477 | 3,931 | ||||||
| Cash guarantees for operations with derivatives | 2 | 4,043 | ||||||
| Equity securities received for operations with derivatives: | ||||||||
| Electronic Chilean Securities Exchange, Stock Exchange | 101 | |||||||
| Depósito Central de Valores S.A. | 1,635 | 2,227 | ||||||
| Total | 82,905 | 66,232 | ||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 28. | Contingencies and Commitments, continued: |
| (c) | Guarantees granted by operations, continued: |
In conformity with the internal regulation of the stock exchanges in which it participates, and for the purpose of ensuring its proper performance, the subsidiary Banchile Corredores de Bolsa S.A maintains in favor of the Santiago Stock Exchange a guarantee in fixed income financial instruments equivalent to Ch$2,148 million. It also maintains a pledge in favor of the Electronic Stock Exchange for three hundred thousand shares of said institution.
Banchile Corredores de Bolsa S.A. keeps an insurance policy current with Chubb Seguros Chile S.A. that expires June 30, 2026, this considers matters of employee fidelity, physical losses, falsification or adulteration, and currency fraud with a coverage amount equivalent to US$20,000,000.
It also provided a bank guarantee in the amount of UF 410,800 for the benefit of investors in portfolio management contracts. This bank guarantee is revaluated in UF to fixed term, non-endorsable and has a maturity date of January 8, 2026.
It also provided a cash guarantee in the amount of US$122,494.32 for the purpose of complying with the obligations to Pershing, for any operations conducted through that broker, additionally, there are US$724,107.72 for variable equity operations.
A guarantee of UF 10,000 has been constituted, to guarantee compliance with the investment portfolio management service contract. Such guarantee corresponds to a non-endorsable fixed-term indexable bond in UF issued by Banco de Chile effective through January 27, 2026.
| (iii) | In subsidiary Banchile Corredores de Seguros Ltda. |
According to established in article 58, letter D of D.F.L. 251, as of December 31, 2025 the entity maintains two insurance policies effective from April 15, 2025 to April 14, 2026 which protect it against of potential damages caused by infractions of the law, regulations and complementary rules that regulate insurance brokers, especially when the non-compliance comes from acts, errors or omissions of the broker, its representatives, agents or dependents that participate in the intermediation.
The policies engaged are the following:
| Matter insured | Amount Insured (UF) | |||
| Errors and omissions liability policy | 500 | |||
| Civil responsibility policy | 60,000 | |||
| (d) | Through Exempt Resolution No. 270 dated October 30, 2014, the Superintendency of Securities and Insurance (currently the Financial Market Commission) imposed a fine of UF 50,000 to Banchile Corredores de Bolsa S.A. for violations of the second paragraph of article 53 of the Securities Market Law. The company filed a claim with the competent Civil Court requesting the annulment of the fine. On December 10, 2019, a judgement in the case was issued reducing the fine to the amount of UF 7,500, which was confirmed in the second instance by the Illustrious Court of Appeals of Santiago. The intervening parties filed cassation appeals in form and substance with the Supreme Court against the sentence in second instance. On August 13, 2024 the Supreme Court ordered the hearing of the case, which is pending as of this date. |
The company has not made provisions considering that the Bank’s legal advisors in charge of the procedure estimate that there are solid grounds that the claim filed by Banchile Corredores de Bolsa S.A. can be accepted.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 29. | Interest and Inflation indexation revenue and expenses: |
| (a) | At the end of the year, the summary is as follows: |
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||
| Interest | Inflation indexation | Total | Interest | Inflation indexation | Total | Interest | Inflation indexation | Total | ||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||||||||
| Interest and Inflation indexation revenue | 2,734,108 | 675,476 | 3,409,584 | 2,940,397 | 830,662 | 3,771,059 | 3,211,883 | 832,782 | 4,044,665 | |||||||||||||||||||||||||||
| Interest and Inflation indexation expenses | (969,638 | ) | (369,864 | ) | (1,339,502 | ) | (1,138,312 | ) | (469,992 | ) | (1,608,304 | ) | (1,634,708 | ) | (489,165 | ) | (2,123,873 | ) | ||||||||||||||||||
| Total net interest income | 1,764,470 | 305,612 | 2,070,082 | 1,802,085 | 360,670 | 2,162,755 | 1,577,175 | 343,617 | 1,920,792 | |||||||||||||||||||||||||||
| (b) | The detail of interest and inflation indexation is as follows: |
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||
| Interest | Inflation indexation | Total | Interest | Inflation indexation | Total | Interest | Inflation indexation | Total | ||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||||||||
| Financial assets at amortized cost | ||||||||||||||||||||||||||||||||||||
| Rights by resale agreements | 5,295 | 5,295 | 4,601 | 4,601 | 5,984 | 5,984 | ||||||||||||||||||||||||||||||
| Debt financial instruments | 12,291 | 11,938 | 24,229 | 50,831 | 26,333 | 77,164 | 21,605 | 27,392 | 48,997 | |||||||||||||||||||||||||||
| Loans to banks | 38,172 | 38,172 | 73,707 | 73,707 | 169,594 | 169,594 | ||||||||||||||||||||||||||||||
| Commercial loans | 1,238,418 | 256,024 | 1,494,442 | 1,358,243 | 318,508 | 1,676,751 | 1,490,550 | 320,755 | 1,811,305 | |||||||||||||||||||||||||||
| Residential mortgage loans | 461,354 | 452,078 | 913,432 | 416,119 | 547,346 | 963,465 | 371,043 | 546,216 | 917,259 | |||||||||||||||||||||||||||
| Consumer loans | 837,482 | 921 | 838,403 | 829,034 | 1,317 | 830,351 | 793,499 | 1,850 | 795,349 | |||||||||||||||||||||||||||
| Other financial instruments | 45,884 | 2,387 | 48,271 | 71,561 | 3,453 | 75,014 | 62,137 | 2,843 | 64,980 | |||||||||||||||||||||||||||
| Financial assets at fair value through other comprehensive income | ||||||||||||||||||||||||||||||||||||
| Debt financial instruments | 127,227 | 22,794 | 150,021 | 169,950 | 24,896 | 194,846 | 327,081 | 28,397 | 355,478 | |||||||||||||||||||||||||||
| Other financial instruments | 474 | 474 | 397 | 397 | 1,023 | 1,023 | ||||||||||||||||||||||||||||||
| Income of accounting hedges on interest rate risk | (32,489 | ) | (70,666 | ) | (103,155 | ) | (34,046 | ) | (91,191 | ) | (125,237 | ) | (30,633 | ) | (94,671 | ) | (125,304 | ) | ||||||||||||||||||
| Total | 2,734,108 | 675,476 | 3,409,584 | 2,940,397 | 830,662 | 3,771,059 | 3,211,883 | 832,782 | 4,044,665 | |||||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 29. | Interest and Inflation indexation revenue and expenses, continued: |
| (c) | The composition of interest and inflation indexation expenses is as follows: |
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||
| Interest | Inflation indexation | Total | Interest | Inflation indexation | Total | Interest | Inflation indexation | Total | ||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||||||||
| Financial liabilities at amortized cost | ||||||||||||||||||||||||||||||||||||
| Current accounts and other demand deposits | 985 | 16,346 | 17,331 | 1,186 | 19,956 | 21,142 | 1,343 | 16,677 | 18,020 | |||||||||||||||||||||||||||
| Time deposits and saving accounts | 626,776 | 55,934 | 682,710 | 810,799 | 81,947 | 892,746 | 1,308,575 | 96,446 | 1,405,021 | |||||||||||||||||||||||||||
| Obligations by repurchase agreements | 8,018 | 8,018 | 9,177 | 9,177 | 15,183 | 15,183 | ||||||||||||||||||||||||||||||
| Borrowings from financial institutions | 61,919 | 61,919 | 71,727 | 71,727 | 64,603 | 64,603 | ||||||||||||||||||||||||||||||
| Debt financial instruments issued | 286,327 | 261,709 | 548,036 | 260,203 | 322,938 | 583,141 | 249,438 | 329,837 | 579,275 | |||||||||||||||||||||||||||
| Other financial obligations | ||||||||||||||||||||||||||||||||||||
| Lease liabilities | 2,112 | 2,112 | 2,381 | 2,381 | 1,980 | 1,980 | ||||||||||||||||||||||||||||||
| Financial instruments of regulatory capital issued | 35,283 | 35,875 | 71,158 | 34,551 | 45,151 | 79,702 | 34,903 | 46,205 | 81,108 | |||||||||||||||||||||||||||
| Income of accounting hedges of interest rate risk | (51,782 | ) | (51,782 | ) | (51,712 | ) | (51,712 | ) | (41,317 | ) | (41,317 | ) | ||||||||||||||||||||||||
| Total | 969,638 | 369,864 | 1,339,502 | 1,138,312 | 469,992 | 1,608,304 | 1,634,708 | 489,165 | 2,123,873 | |||||||||||||||||||||||||||
| (d) | As of December 31, 2025, 2024 and 2023, the Bank uses cross currency and interest rate swaps to hedge its position on changes on the fair value of corporate bonds and commercial loans and cross currency swaps to hedge the risk of variability of obligations flows with foreign banks and bonds issued in foreign currency. |
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest | Inflation indexation | Total | Interest | Inflation indexation | Total | Interest | Inflation indexation | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | Expense | Revenue | Expense | Revenue | Expense | Revenue | Expense | Revenue | Expense | Revenue | Expense | Revenue | Expense | Revenue | Expense | Revenue | Expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain from fair value accounting hedges | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss from fair value accounting hedges | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain from cash flow accounting hedges | 314,924 | 361,804 | 6,766 | — | 321,690 | 361,804 | 186,951 | 266,878 | 3,087 | — | 190,038 | 266,878 | 274,897 | 338,551 | 2,308 | — | 277,205 | 338,551 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss from cash flow accounting hedges | (347,413 | ) | (310,022 | ) | (77,432 | ) | — | (424,845 | ) | (310,022 | ) | (220,997 | ) | (215,166 | ) | (94,278 | ) | — | (315,275 | ) | (215,166 | ) | (305,530 | ) | (297,234 | ) | (96,979 | ) | — | (402,509 | ) | (297,234 | ) | |||||||||||||||||||||||||||||||||||||||
| Net gain on hedge item adjustment | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | (32,489 | ) | 51,782 | (70,666 | ) | — | (103,155 | ) | 51,782 | (34,046 | ) | 51,712 | (91,191 | ) | — | (125,237 | ) | 51,712 | (30,633 | ) | 41,317 | (94,671 | ) | — | (125,304 | ) | 41,317 | |||||||||||||||||||||||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 30. | Fee and commission income and expense: |
The income and expenses from fee and commissions shown in the Consolidated Statement of Income for the years ended December 31, 2025, 2024 and 2023 refer to the following items:
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Fee and commission income | ||||||||||||
| Comissions from debit and credit card services | 254,815 | 232,682 | 238,523 | |||||||||
| Remuneration from administration of mutual funds, investment funds or others | 172,785 | 142,311 | 118,170 | |||||||||
| Account management fees | 75,983 | 68,969 | 62,218 | |||||||||
| Comissions from collections, recoveries and payments | 73,654 | 80,326 | 81,043 | |||||||||
| Comissions from guarantees and letters of credit | 42,930 | 41,923 | 37,399 | |||||||||
| Brand use agreement | 32,617 | 29,082 | 32,655 | |||||||||
| Insurance not related to the granting of credits to natural persons | 25,753 | 25,303 | 24,772 | |||||||||
| Comissions from trading and securities management | 25,560 | 19,653 | 17,287 | |||||||||
| Use of distribution channel | 19,946 | 24,670 | 31,184 | |||||||||
| Insurance related to the granting of credits to natural persons | 8,780 | 11,942 | 15,428 | |||||||||
| Insurance not related to the granting of credits to legal entities | 7,055 | 5,144 | 7,317 | |||||||||
| Comissions from lines of credit and overdrafts on current account | 4,894 | 4,978 | 4,958 | |||||||||
| Financial advisory services | 2,549 | 2,688 | 5,274 | |||||||||
| Insurance related to the granting of credits to legal entities | 2,145 | 2,007 | 2,098 | |||||||||
| Comissions from factoring operations services | 1,307 | 1,313 | 1,380 | |||||||||
| Loan commissions with letters of credit | 21 | 68 | 106 | |||||||||
| Other commission earned | 23,360 | 24,288 | 23,322 | |||||||||
| Total | 774,154 | 717,347 | 703,134 | |||||||||
| of which: recognized over time | 766,810 | 706,602 | 678,513 | |||||||||
| of which: recognized at a point in time | 7,344 | 10,745 | 24,621 | |||||||||
| Fee and commission expense | ||||||||||||
| Commissions from card transactions | 64,735 | 59,763 | 54,981 | |||||||||
| Expenses due to obligations on loyalty programs and merits for cardholders | 35,472 | 39,518 | 39,731 | |||||||||
| Interbank transactions | 28,350 | 39,471 | 50,734 | |||||||||
| Commissions from use of card brands license | 9,165 | 8,529 | 9,115 | |||||||||
| Comissions from securities transaction | 6,201 | 5,293 | 4,995 | |||||||||
| Collections and payments | 4,010 | 4,120 | 4,279 | |||||||||
| Other fees for services related to the credit card system and payment cards with funds provision as a means of payment | 288 | |||||||||||
| Other commissions from services received | 5,230 | 4,345 | 4,615 | |||||||||
| Total | 153,451 | 161,039 | 168,450 | |||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 31. | Net Financial Result: |
The amount of net financial result shown in the Consolidated Statement of Income for the year corresponds to the following concepts:
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Financial result from: | ||||||||||||
| Financial assets held for trading at fair value through profit or loss: | ||||||||||||
| Financial derivative contracts | 2,904,785 | 3,646,894 | 4,861,710 | |||||||||
| Debt Financial Instruments | 141,267 | 128,401 | 315,119 | |||||||||
| Other financial instruments | 22,409 | 25,961 | 25,986 | |||||||||
| Financial liabilities held for trading at fair value through profit or loss | ||||||||||||
| Financial derivative contracts | (2,958,584 | ) | (3,699,490 | ) | (4,850,496 | ) | ||||||
| Other financial instruments | (569 | ) | (349 | ) | (688 | ) | ||||||
| Subtotal | 109,308 | 101,417 | 351,631 | |||||||||
| Derecognition of financial assets and liabilities at amortized cost and financial assets at fair value through other comprehensive income: | ||||||||||||
| Financial assets at amortized cost | (1,703 | ) | 200 | 256 | ||||||||
| Financial assets at fair value through other comprehensive income | 14,875 | 8,050 | (4,522 | ) | ||||||||
| Financial liabilities at amortized cost | (1 | ) | ||||||||||
| Financial instruments of regulatory capital issued | ||||||||||||
| Subtotal | 13,172 | 8,250 | (4,267 | ) | ||||||||
| Exchange, indexation and accounting hedging of foreign currency | ||||||||||||
| Gain (loss) from foreign currency exchange | 284,282 | (23,345 | ) | 38,374 | ||||||||
| Gain (loss) from indexation for exchange rate | (15,870 | ) | 20,067 | 4,148 | ||||||||
| Net gain (loss) from derivatives in accounting hedges of foreign currency risk | (118,578 | ) | 174,091 | 79,667 | ||||||||
| Subtotal | 149,834 | 170,813 | 122,189 | |||||||||
| Ineffective accounting hedges: | ||||||||||||
| Gain (loss) from ineffective cash flow accounting hedges | ||||||||||||
| Gain (loss) from ineffective accounting hedges of net investment abroad | ||||||||||||
| Total | 272,314 | 280,480 | 469,553 | |||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 32. | Income from investments in other companies: |
The income obtained from investments in companies detailed in note No. 12 corresponds to the following:
| Shareholder | 2025 | 2024 | 2023 | |||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||||
| Income attributable to investments in other companies: | ||||||||||||||
| Associates | ||||||||||||||
| Transbank S.A. | Banco de Chile | 5,942 | 2,575 | 7,014 | ||||||||||
| Centro de Compensación Automatizado S.A. | Banco de Chile | 2,007 | 1,875 | 1,686 | ||||||||||
| Redbanc S.A. | Banco de Chile | 1,279 | 663 | 288 | ||||||||||
| Sociedad Interbancaria de Depósito de Valores S.A. | Banco de Chile | 549 | 483 | 460 | ||||||||||
| Administrador Financiero del Transantiago S.A. | Banco de Chile | 501 | 610 | 723 | ||||||||||
| Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A. | Banco de Chile | 237 | 145 | 86 | ||||||||||
| Servicios de Infraestructura de Mercado OTC S.A. | Banco de Chile | 31 | 151 | 131 | ||||||||||
| Subtotal Associates | 10,546 | 6,502 | 10,388 | |||||||||||
| Joint Ventures | ||||||||||||||
| Servipag Ltda. | Banco de Chile | 1,437 | 1,676 | 2,201 | ||||||||||
| Artikos Chile S.A. (*) | Banco de Chile | 552 | 820 | |||||||||||
| Subtotal Joint Ventures | 1,437 | 2,228 | 3,021 | |||||||||||
| Subtotal | 11,983 | 8,730 | 13,409 | |||||||||||
| Income from disposal of shares in companies: | ||||||||||||||
| Joint Ventures | ||||||||||||||
| Artikos Chile S.A. (*) | Banco de Chile | 7,925 | ||||||||||||
| Total Investments in other companies | 11,983 | 16,655 | 13,409 | |||||||||||
| (*) | In September 2024, it was agreed to accept the binding purchase offer presented by the Santiago Chamber of Commerce A.G. for 100% of the shares of Artikos Chile S.A. The sale was completed in December of the same year. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 33. | Income (expense) from non-current assets and disposal groups held for sale not admissible as discontinued operations: |
The composition of the income (expense) of non-current assets and disposal groups not eligible as discontinued operations during the years 2025, 2024 and 2023 is as follows
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Net income from assets received in payment or awarded in judicial auction | ||||||||||||
| Gain (loss) on sale of assets received in lieu of payment or awarded in judicial auction | 2,153 | 2,361 | 1,358 | |||||||||
| Other income from assets received in lieu of payment or awarded in judicial auction | 201 | 57 | 53 | |||||||||
| Provisions for adjustments to net realizable value of assets received in lieu of payment or awarded in judicial auction | (2,583 | ) | (3,350 | ) | (2,250 | ) | ||||||
| Write-off of assets received in lieu of payment or awarded in judicial auction | (225 | ) | (1,187 | ) | (485 | ) | ||||||
| Expenses to maintain assets received in lieu of payment or awarded in judicial auction | (1,833 | ) | (1,382 | ) | (1,165 | ) | ||||||
| Non-current assets held for sale | ||||||||||||
| Investments in other companies | ||||||||||||
| Intangible assets | ||||||||||||
| Property and equipment | 6,685 | 938 | 2,971 | |||||||||
| Assets for recovery of assets transferred in financial lease operations | 1,644 | 2,105 | 2,325 | |||||||||
| Other assets | ||||||||||||
| Disposal groups held for sale | ||||||||||||
| Total | 6,042 | (458 | ) | 2,807 | ||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 34. | Other operating income and expenses: |
| a) | During the year 2025, 2024 and 2023, the Bank and its subsidiaries record other operating income, detailed as follows: |
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Expense recovery | 26,688 | 26,179 | 26,310 | |||||||||
| Indexation of tax refunds from previous years | 11,094 | 8,451 | 6,905 | |||||||||
| Income from investment property | 6,976 | 7,147 | 6,793 | |||||||||
| Indexation of monthly tax provisional payments | 2,765 | 9,771 | 9,146 | |||||||||
| Release of provisions not related to credit risk | 23,355 | |||||||||||
| Other income | 954 | 229 | 430 | |||||||||
| Total | 48,477 | 51,777 | 72,939 | |||||||||
| b) | During the year 2025, 2024 and 2023, the Bank and its subsidiaries present other operating expenses, according to the following: |
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Write-offs for operating risks | 27,568 | 29,407 | 30,473 | |||||||||
| Expense in insurance premiums to cover operational risk events | 6,634 | 6,275 | 5,779 | |||||||||
| Expenses for financial lease loan operations | 4,240 | 6,976 | 4,071 | |||||||||
| Card administration | 3,963 | 2,209 | 606 | |||||||||
| Legal expenses and lawsuits | 1,884 | 2,847 | 3,063 | |||||||||
| Write-offs for commercial decisions | 766 | 407 | 290 | |||||||||
| Provision for pending operations | 514 | (124 | ) | (117 | ) | |||||||
| Provisions for lawsuits and litigation | 445 | 419 | (617 | ) | ||||||||
| Expenses for write-off of leased assets recoveries | 398 | 195 | 493 | |||||||||
| Life insurance | 320 | 343 | 275 | |||||||||
| Appraisal expense | 307 | 256 | 250 | |||||||||
| Renegotiated loan insurance premium | 192 | 235 | 290 | |||||||||
| (Release) expense on provisions for operational risk | (355 | ) | 558 | (706 | ) | |||||||
| Expense recovery from operational risk events | (13,554 | ) | (14,314 | ) | (9,216 | ) | ||||||
| Other expenses | 636 | 350 | 1,156 | |||||||||
| Total | 33,958 | 36,039 | 36,090 | |||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 35. | Personnel expenses: |
The detail of this line item during the period 2025, 2024 and 2023 is as follows:
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Expenses for short-term employee benefits | 534,059 | 528,466 | 534,177 | |||||||||
| Expenses for employee benefits due to termination of employment contract | 24,133 | 42,125 | 35,391 | |||||||||
| Training expenses | 3,437 | 3,440 | 3,751 | |||||||||
| Expenses for nursery and kindergarten | 1,494 | 1,618 | 1,513 | |||||||||
| Other personnel expenses | 7,232 | 6,898 | 7,852 | |||||||||
| Total | 570,355 | 582,547 | 582,684 | |||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 36. | Administrative expenses: |
This line item is composed of the following:
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| General administrative expenses | ||||||||||||
| Information technology and communications | 162,788 | 157,216 | 142,731 | |||||||||
| Maintenance and repair of property and equipment | 52,338 | 51,606 | 49,699 | |||||||||
| External advisory services and professional services fees | 11,662 | 11,252 | 10,326 | |||||||||
| Surveillance and securities transport services | 10,854 | 11,651 | 11,265 | |||||||||
| External financial information and fraud prevention service | 8,661 | 8,129 | 7,483 | |||||||||
| Office supplies | 8,483 | 8,497 | 8,724 | |||||||||
| Legal and notary expenses | 7,317 | 5,799 | 5,433 | |||||||||
| Energy, heating and other utilities | 6,844 | 6,132 | 5,513 | |||||||||
| Expenses for short-term leases | 4,856 | 3,658 | 3,860 | |||||||||
| External service of documentation custody | 4,457 | 4,664 | 3,943 | |||||||||
| Other expenses for obligations under lease contracts | 4,099 | 4,200 | 4,431 | |||||||||
| Postal box, mail, postage and home delivery services | 4,080 | 6,325 | 4,839 | |||||||||
| Insurance premiums except to cover operational risk events | 3,792 | 4,142 | 4,167 | |||||||||
| Representation and travel expenses | 3,368 | 3,191 | 3,249 | |||||||||
| Donations | 2,782 | 3,249 | 3,251 | |||||||||
| Card embossing service | 2,168 | 2,084 | 1,756 | |||||||||
| Fees for other technical reports | 1,053 | 1,063 | 1,034 | |||||||||
| Fees for review and audit of the financial statements by the external auditor | 906 | 873 | 750 | |||||||||
| Expenses for leases of low value | 540 | 549 | 509 | |||||||||
| Title classification fees | 168 | 241 | 169 | |||||||||
| Fines applied by other agencies | 58 | 132 | 108 | |||||||||
| Other general administrative expenses | 9,903 | 9,393 | 9,354 | |||||||||
| Outsourced services | ||||||||||||
| Technological developments expenses, certification and technology testing | 21,871 | 22,323 | 25,437 | |||||||||
| Data processing | 11,703 | 11,133 | 11,907 | |||||||||
| External credit evaluation service | 5,041 | 5,820 | 5,729 | |||||||||
| External collection service | 3,551 | 4,841 | 4,414 | |||||||||
| External human resources administration services and supply of external personnel | 1,947 | 1,820 | 1,724 | |||||||||
| Call Center service for sales, marketing, quality control customer service | 766 | 1,695 | 2,192 | |||||||||
| External cleaning service, cafeteria, custody of files and documents, storage of furniture and equipment | 319 | 473 | 390 | |||||||||
| Sales and distribution services for products | 318 | |||||||||||
| Other outsource services | 1,603 | 1,144 | 1,250 | |||||||||
| Board of Director´s expenses | ||||||||||||
| Board of Directors’ remuneration | 3,641 | 3,500 | 3,347 | |||||||||
| Other Board of directors’ expenses | 80 | 78 | 111 | |||||||||
| Advertising | 42,466 | 33,948 | 39,617 | |||||||||
| Taxes, contribution payments and other legal charges | ||||||||||||
| Contribution to the banking regulator | 14,788 | 15,248 | 14,785 | |||||||||
| Property taxes | 5,428 | 6,020 | 5,521 | |||||||||
| Taxes other than income tax | 3,007 | 2,803 | 2,530 | |||||||||
| Municipal patents | 1,880 | 1,752 | 1,647 | |||||||||
| Other legal charges | 47 | 52 | 60 | |||||||||
| Total | 429,633 | 416,696 | 403,255 | |||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 37. | Depreciation and Amortization: |
The amounts corresponding to debits to profit or loss for depreciation and amortization during the year 2025, 2024 and 2023, are detailed as follows:
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Amortization of intangibles assets | ||||||||||||
| Other intangible assets arising from business combinations | ||||||||||||
| Other independently originated intangible assets | 41,453 | 36,265 | 29,346 | |||||||||
| Depreciation of property and equipment | ||||||||||||
| Buildings and land | 9,807 | 9,725 | 9,295 | |||||||||
| Other property and equipment | 13,837 | 18,447 | 21,098 | |||||||||
| Depreciation and impairment of leased assets | ||||||||||||
| Buildings and land | 28,607 | 28,672 | 31,195 | |||||||||
| Other property and equipment | ||||||||||||
| Depreciation for improvements in leased real estate as right-to-use lease assets | 1,049 | 1,135 | 1,017 | |||||||||
| Amortization for the right-to-use other intangible assets under lease | ||||||||||||
| Depreciation of other assets for investment properties | 357 | 357 | 357 | |||||||||
| Amortization of other assets per activity income asset | ||||||||||||
| Total | 95,110 | 94,601 | 92,308 | |||||||||
| 38. | Impairment of non-financial assets: |
As of December 31, 2025, 2024 and 2023, the detail of the line item for impairment of non-financial assets is composed of the following:
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Impairment of intangible assets | 464 | 25 | ||||||||||
| Impairment of property and equipment | 265 | 1,121 | 1,754 | |||||||||
| Impairment of assets from revenue from contracts with customers | 1,153 | 1,730 | (17 | ) | ||||||||
| Total | 1,882 | 2,851 | 1,762 | |||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 39. | Expected credit losses: |
| (a) | The detail of this line item is as follows: |
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Expense of allowances established for credit risk | 462,123 | 421,210 | 321,829 | |||||||||
| Expense of provisions for contingent loans | (290 | ) | (4,200 | ) | (53,875 | ) | ||||||
| Recovery of written-off loans | (71,383 | ) | (65,313 | ) | (63,256 | ) | ||||||
| Impairments for credit risk of other financial assets at amortized cost and financial assets at FVTOCI | 4,412 | 1,009 | (2,754 | ) | ||||||||
| Total | 394,862 | 352,706 | 201,944 | |||||||||
| (b) | Summary of the expense of allowances constituted for credit risk and expected credit losses: |
| Expense of allowances constituted in the year | ||||||||||||
| Evaluation | ||||||||||||
| As of December 31, 2025 | Individual | Group | Total | |||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Loans to Banks | ||||||||||||
| Allowances established | ||||||||||||
| Allowances released | (154 | ) | (154 | ) | ||||||||
| Subtotal | (154 | ) | (154 | ) | ||||||||
| Commercial loans | ||||||||||||
| Allowances established | 26,000 | 63,617 | 89,617 | |||||||||
| Allowances released | ||||||||||||
| Subtotal | 26,000 | 63,617 | 89,617 | |||||||||
| Residential mortgage loans | ||||||||||||
| Allowances established | 10,326 | 10,326 | ||||||||||
| Allowances released | ||||||||||||
| Subtotal | 10,326 | 10,326 | ||||||||||
| Consumer loans | ||||||||||||
| Allowances established | 362,334 | 362,334 | ||||||||||
| Allowances released | ||||||||||||
| Subtotal | 362,334 | 362,334 | ||||||||||
| Expense of allowances established for credit risk | 25,846 | 436,277 | 462,123 | |||||||||
| Contingent loans | ||||||||||||
| Loans to banks | ||||||||||||
| Commercial loans | 2,716 | |||||||||||
| Consumer loans | (3,006 | ) | ||||||||||
| Expenses of provisions for contingent loans | (290 | ) | ||||||||||
| Impairments for credit risk from financial assets at fair value through other comprehensive income | 4,412 | |||||||||||
| Recovery of written-off loans | ||||||||||||
| Loans to banks | ||||||||||||
| Commercial loans | (18,127 | ) | ||||||||||
| Residential mortgage loans | (7,981 | ) | ||||||||||
| Consumer loans | (45,275 | ) | ||||||||||
| Subtotal | (71,383 | ) | ||||||||||
| Total Expected Credit Losses | 394,862 | |||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 39. | Expected credit losses, continued: |
| Expense of allowances constituted in the year | ||||||||||||
| Evaluation | ||||||||||||
| As of December 31, 2024 | Individual | Group | Total | |||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Loans to Banks | ||||||||||||
| Allowances established | 559 | 559 | ||||||||||
| Allowances released | ||||||||||||
| Subtotal | 559 | 559 | ||||||||||
| Commercial loans | ||||||||||||
| Allowances established | 25,039 | 66,749 | 91,788 | |||||||||
| Allowances released | ||||||||||||
| Subtotal | 25,039 | 66,749 | 91,788 | |||||||||
| Residential mortgage loans | ||||||||||||
| Allowances established | 4,976 | 4,976 | ||||||||||
| Allowances released | ||||||||||||
| Subtotal | 4,976 | 4,976 | ||||||||||
| Consumer loans | ||||||||||||
| Allowances established | 323,887 | 323,887 | ||||||||||
| Allowances released | ||||||||||||
| Subtotal | 323,887 | 323,887 | ||||||||||
| Expense of allowances established for credit risk | 25,598 | 395,612 | 421,210 | |||||||||
| Contingent loans | ||||||||||||
| Loans to banks | ||||||||||||
| Commercial loans | (5,258 | ) | ||||||||||
| Consumer loans | 1,058 | |||||||||||
| Expenses of provisions for contingent loans | (4,200 | ) | ||||||||||
| Impairments for credit risk from financial assets at fair value through other comprehensive income | 1,009 | |||||||||||
| Recovery of written-off loans | ||||||||||||
| Loans to banks | ||||||||||||
| Commercial loans | (19,752 | ) | ||||||||||
| Residential mortgage loans | (6,941 | ) | ||||||||||
| Consumer loans | (38,620 | ) | ||||||||||
| Subtotal | (65,313 | ) | ||||||||||
| Total Expected Credit Losses | 352,706 | |||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 39. | Expected credit losses, continued: |
| Expense of allowances constituted in the year | ||||||||||||
| Evaluation | ||||||||||||
| As of December 31, 2023 | Individual | Group | Total | |||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Loans to Banks | ||||||||||||
| Allowances established | ||||||||||||
| Allowances released | (270 | ) | (270 | ) | ||||||||
| Subtotal | (270 | ) | (270 | ) | ||||||||
| Commercial loans | ||||||||||||
| Allowances established | 65,734 | 65,734 | ||||||||||
| Allowances released | (28,145 | ) | (28,145 | ) | ||||||||
| Subtotal | (28,145 | ) | 65,734 | 37,589 | ||||||||
| Residential mortgage loans | ||||||||||||
| Allowances established | (8,422 | ) | (8,422 | ) | ||||||||
| Allowances released | ||||||||||||
| Subtotal | (8,422 | ) | (8,422 | ) | ||||||||
| Consumer loans | ||||||||||||
| Allowances established | 292,932 | 292,932 | ||||||||||
| Allowances released | ||||||||||||
| Subtotal | 292,932 | 292,932 | ||||||||||
| Expense of allowances established for credit risk | (28,415 | ) | 350,244 | 321,829 | ||||||||
| Contingent loans | ||||||||||||
| Loans to banks | ||||||||||||
| Commercial loans | (15,670 | ) | ||||||||||
| Consumer loans | (38,205 | ) | ||||||||||
| Expenses of provisions for contingent loans | (53,875 | ) | ||||||||||
| Impairments for credit risk from financial assets at fair value through other comprehensive income | (2,754 | ) | ||||||||||
| Recovery of written-off loans | ||||||||||||
| Loans to banks | ||||||||||||
| Commercial loans | (19,660 | ) | ||||||||||
| Residential mortgage loans | (11,716 | ) | ||||||||||
| Consumer loans | (31,880 | ) | ||||||||||
| Subtotal | (63,256 | ) | ||||||||||
| Total Expected Credit Losses | 201,944 | |||||||||||
| 40. | Related Party Disclosures: |
Related parties are considered to be those persons or legal entities who are in positions to directly or indirectly have significant influence through their ownership or management of the Bank and its subsidiaries.
According to the above, the Bank has considered as related parties those persons or legal entities who have a direct participation or through third parties on bank ownership, where such interest exceeds 5% of the shares, and also people who, regardless of ownership, have authority and responsibility for planning, management and control of the activities of the entity or its subsidiaries. There also are considered as related the companies in which the parties related by ownership or management of the Bank have a share which is of 5% or higher, or persons who have the position of director, general manager or equivalent.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 40. | Related Party Transactions, continued: |
| (a) | Assets and liabilities with related parties: |
| Related Party Type | ||||||||||||||||||||
|
Type of current assets and liabilities with related parties As of December 31, 2025 |
Parent Entity | Other Legal Entity | Key Personnel of the Consolidated Bank | Other Related Party | Total | |||||||||||||||
| ASSETS | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||
| Financial assets held for trading at fair value through profit or loss | ||||||||||||||||||||
| Derivative financial instruments | 231,036 | 231,036 | ||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||
| Other financial instruments | 20 | 20 | ||||||||||||||||||
| Non-trading financial assets mandatorily measured at fair value through profit or loss | ||||||||||||||||||||
| Financial assets designated as at fair value through profit or loss | ||||||||||||||||||||
| Financial assets at fair value through other comprehensive income | 33,856 | 33,856 | ||||||||||||||||||
| Derivative financial instruments for hedging purposes | ||||||||||||||||||||
| Financial assets at amortized cost: | ||||||||||||||||||||
| Rights by resale agreements | ||||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||
| Commercial loans | 189,539 | 1,928 | 10,553 | 202,020 | ||||||||||||||||
| Residential mortgage loans | 15,440 | 62,685 | 78,125 | |||||||||||||||||
| Consumer Loans | 1,756 | 10,639 | 12,395 | |||||||||||||||||
| Allowances established – Loans | (1,562 | ) | (61 | ) | (438 | ) | (2,061 | ) | ||||||||||||
| Other assets | 17 | 285,355 | 8 | 95 | 285,475 | |||||||||||||||
| Contingent loans | 167,862 | 3,401 | 16,776 | 188,039 | ||||||||||||||||
| LIABILITIES | ||||||||||||||||||||
| Financial liabilities held for trading at fair value through profit or loss | ||||||||||||||||||||
| Derivative financial instruments | 303,280 | 303,280 | ||||||||||||||||||
| Financial liabilities designated as at fair value through profit or loss | ||||||||||||||||||||
| Derivative financial instruments for hedging purposes | 19,931 | 19,931 | ||||||||||||||||||
| Financial liabilities at amortized cost: | ||||||||||||||||||||
| Current accounts and other demand deposits | 300 | 168,799 | 2,281 | 6,105 | 177,485 | |||||||||||||||
| Time deposits and saving accounts | 45,379 | 132,812 | 3,181 | 17,594 | 198,966 | |||||||||||||||
| Obligations by repurchase agreements | 750 | 750 | ||||||||||||||||||
| Borrowings from financial institutions | 137,114 | 137,114 | ||||||||||||||||||
| Debt financial instruments issued | ||||||||||||||||||||
| Other financial obligations | ||||||||||||||||||||
| Lease liabilities | 7,036 | 7,036 | ||||||||||||||||||
| Other liabilities | 225,578 | 556 | 2 | 226,136 | ||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 40. | Related Party Transactions, continued: |
| (a) | Assets and liabilities with related parties, continued: |
| Related Party Type | ||||||||||||||||||||
|
Type of current assets and liabilities with related parties As of December 31, 2024 |
Parent Entity | Other Legal Entity | Key Personnel of the Consolidated Bank | Other Related Party | Total | |||||||||||||||
| ASSETS | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||
| Financial assets held for trading at fair value through profit or loss | ||||||||||||||||||||
| Derivative financial instruments | 273,492 | 273,492 | ||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||
| Other financial instruments | ||||||||||||||||||||
| Non-trading financial assets mandatorily measured at fair value through profit or loss | ||||||||||||||||||||
| Financial assets designated as at fair value through profit or loss | ||||||||||||||||||||
| Financial assets at fair value through other comprehensive income | 5,388 | 5,388 | ||||||||||||||||||
| Derivative financial instruments for hedging purposes | ||||||||||||||||||||
| Financial assets at amortized cost: | ||||||||||||||||||||
| Rights by resale agreements | ||||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||
| Commercial loans | 266,912 | 1,291 | 9,967 | 278,170 | ||||||||||||||||
| Residential mortgage loans | 14,694 | 59,861 | 74,555 | |||||||||||||||||
| Consumer Loans | 1,656 | 11,482 | 13,138 | |||||||||||||||||
| Allowances established – Loans | (1,291 | ) | (30 | ) | (326 | ) | (1,647 | ) | ||||||||||||
| Other assets | 16 | 132,549 | 38 | 7 | 132,610 | |||||||||||||||
| Contingent loans | 159,749 | 3,822 | 17,761 | 181,332 | ||||||||||||||||
| LIABILITIES | ||||||||||||||||||||
| Financial liabilities held for trading at fair value through profit or loss | ||||||||||||||||||||
| Derivative financial instruments | 300,756 | 300,756 | ||||||||||||||||||
| Financial liabilities designated as at fair value through profit or loss | ||||||||||||||||||||
| Derivative financial instruments for hedging purposes | 3,137 | 3,137 | ||||||||||||||||||
| Financial liabilities at amortized cost: | ||||||||||||||||||||
| Current accounts and other demand deposits | 170 | 141,497 | 2,860 | 6,844 | 151,371 | |||||||||||||||
| Time deposits and saving accounts | 151,595 | 78,618 | 3,093 | 19,082 | 252,388 | |||||||||||||||
| Obligations by repurchase agreements | ||||||||||||||||||||
| Borrowings from financial institutions | 3,175 | 3,175 | ||||||||||||||||||
| Debt financial instruments issued | ||||||||||||||||||||
| Other financial obligations | ||||||||||||||||||||
| Lease liabilities | 9,200 | 9,200 | ||||||||||||||||||
| Other liabilities | 140,479 | 532 | 5 | 141,016 | ||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 40. | Related Party Disclosures, continued: |
| (b) | Income and expenses from related party transactions (*): |
| As of December 31, 2025 | Parent Entity | Other Legal Entity | Key personnel of the consolidated Bank | Other Related party | Total | |||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||
| Interest and Inflation indexation revenue | 19,667 | 1,176 | 5,447 | 26,290 | ||||||||||||||||
| Fee and commission income | 219 | 90,950 | 53 | 63 | 91,285 | |||||||||||||||
| Net Financial Result | (12,087 | ) | (12,087 | ) | ||||||||||||||||
| Other income | ||||||||||||||||||||
| Total income | 219 | 98,530 | 1,229 | 5,510 | 105,488 | |||||||||||||||
| Interest and Inflation indexation expense | 7,558 | 4,761 | 157 | 855 | 13,331 | |||||||||||||||
| Fee and commission expense | 30,153 | 30,153 | ||||||||||||||||||
| Expenses credit losses | 241 | 35 | 180 | 456 | ||||||||||||||||
| Personnel expenses | 96 | 34,430 | 81,084 | 115,610 | ||||||||||||||||
| Administrative expenses | 11,051 | 3,665 | 76 | 14,792 | ||||||||||||||||
| Other expenses | 14 | 14 | 40 | 68 | ||||||||||||||||
| Total expenses | 7,558 | 46,316 | 38,301 | 82,235 | 174,410 | |||||||||||||||
| As of December 31, 2024 | Parent Entity | Other Legal Entity | Key personnel of the consolidated Bank | Other Related party | Total | |||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||
| Interest and Inflation indexation revenue | 20,660 | 1,059 | 5,964 | 27,683 | ||||||||||||||||
| Fee and commission income | 146 | 92,827 | 43 | 71 | 93,087 | |||||||||||||||
| Net Financial Result | 35,318 | 35,318 | ||||||||||||||||||
| Other income | ||||||||||||||||||||
| Total income | 146 | 148,805 | 1,102 | 6,035 | 156,088 | |||||||||||||||
| Interest and Inflation indexation expense | 8,420 | 7,166 | 249 | 1,351 | 17,186 | |||||||||||||||
| Fee and commission expense | 28,569 | 28,569 | ||||||||||||||||||
| Expenses credit losses | (1,233 | ) | 12 | 94 | (1,127 | ) | ||||||||||||||
| Personnel expenses | 312 | 37,918 | 81,818 | 120,048 | ||||||||||||||||
| Administrative expenses | 11,462 | 3,628 | 88 | 15,178 | ||||||||||||||||
| Other expenses | 1 | 11 | 12 | |||||||||||||||||
| Total expenses | 8,420 | 46,276 | 41,808 | 83,362 | 179,866 | |||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 40. | Related Party Disclosures, continued: |
| (b) | Income and expenses from related party transactions (*), continued: |
| As of December 31, 2023 | Parent Entity | Other Legal Entity | Key personnel of the consolidated Bank | Other Related party | Total | |||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||
| Interest and Inflation indexation revenue | 29,432 | 1,298 | 6,034 | 36,764 | ||||||||||||||||
| Fee and commission income | 165 | 103,906 | 24 | 84 | 104,179 | |||||||||||||||
| Net Financial Result | (18,367 | ) | (18,367 | ) | ||||||||||||||||
| Other income | 215 | 215 | ||||||||||||||||||
| Total income | 165 | 115,186 | 1,322 | 6,118 | 122,791 | |||||||||||||||
| Interest and Inflation indexation expense | 1,998 | 7,329 | 546 | 2,505 | 12,378 | |||||||||||||||
| Fee and commission expense | 29,508 | 29,508 | ||||||||||||||||||
| Expenses credit losses | (2,078 | ) | (3 | ) | (15 | ) | (2,096 | ) | ||||||||||||
| Personnel expenses | 421 | 38,083 | 80,430 | 118,934 | ||||||||||||||||
| Administrative expenses | 11,776 | 3,786 | 229 | 15,791 | ||||||||||||||||
| Other expenses | 2 | 23 | 25 | |||||||||||||||||
| Total expenses | 1,998 | 46,956 | 42,414 | 83,172 | 174,540 | |||||||||||||||
| (*) | This does not constitute a Statement of Income from operations with related parties since the assets with these parties are not necessarily equal to the liabilities and in each of them the total income and expenses are reflected and not those corresponding to matched operations. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 40. | Related Party Disclosures, continued: |
| (c) | Transactions with related parties: Below are the individual transactions in the period with related parties that are legal entities, which do not correspond to the usual operations of the line of business carried out with customers in general and when said individual transactions consider a transfer of resources, services or obligations greater than UF 2,000. |
As of December 31, 2025
| Transaction description | Effect on Profit or loss | Effect on the statement Financial position | ||||||||||||||||||||||||||||||
| Company name | Nature of the relationship with the Bank | Type of service | Term | Renewal conditions | Transactions under equivalent conditions to those transactions conducted on an arm’s length basis |
Amount MCh$ | Income MCh$ | Expenses MCh$ | Accounts receivable MCh$ | Accounts payable MCh$ | ||||||||||||||||||||||
| Servipag Ltda. | Joint venture | Collection services | 30 days | Contract | Yes | 4,010 | 4,010 | 328 | ||||||||||||||||||||||||
| IT support services | 30 days | Contract | Yes | 296 | 296 | |||||||||||||||||||||||||||
| Software development service | 30 days | Contract | Yes | 85 | 85 | |||||||||||||||||||||||||||
| IT project services | 30 days | Contract | Yes | 94 | 94 | |||||||||||||||||||||||||||
| Bolsa de Comercio de Santiago, Bolsa de Valores | Minority investments | Brokerage commission | 30 days | Contract | Yes | 292 | 292 | |||||||||||||||||||||||||
| Manantial S.A. | Other related parties | General expenses | 30 days | Contract | Yes | 329 | 329 | |||||||||||||||||||||||||
| Universidad Del Desarrollo | Other related parties | Advertising services | 30 days | Contract | Yes | 336 | 336 | 336 | ||||||||||||||||||||||||
| Enex S.A. | Other related parties | Rent spaces for ATM | 30 days | Contract | Yes | 2,257 | 2,257 | 570 | ||||||||||||||||||||||||
| Advertising services | 30 days | Contract | Yes | 132 | 132 | |||||||||||||||||||||||||||
| Redbanc S.A. | Associates | Electronic transaction management services | 30 days | Contract | Yes | 19,080 | 19,080 | 1,609 | ||||||||||||||||||||||||
| IT project services | 30 days | Contract | Yes | 207 | 207 | |||||||||||||||||||||||||||
| IT services | 30 days | Contract | Yes | 190 | 190 | |||||||||||||||||||||||||||
| Depósito Central de Valores S.A. | Other related parties | Quality control and custodial services | 30 days | Contract | Yes | 764 | 764 | 22 | ||||||||||||||||||||||||
| Custodial services | 30 days | Contract | Yes | 1,178 | 1,178 | |||||||||||||||||||||||||||
| CCLV Contraparte Central S.A. | Minority investments | Brokerage commission | 30 days | Contract | Yes | 325 | 325 | |||||||||||||||||||||||||
| Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A. | Associates | Collection services | 30 days | Contract | Yes | 943 | 943 | 91 | ||||||||||||||||||||||||
| Inmobiliaria e Inversiones Capitolio S.A. | Other related parties | Leases | 30 days | Contract | Yes | 83 | 83 | |||||||||||||||||||||||||
| Fundación Teleton | Other related parties | Advertising services | 30 days | Contract | Yes | 577 | 577 | 268 | ||||||||||||||||||||||||
| Donations | 30 days | Contract | Yes | 1,590 | 1,590 | |||||||||||||||||||||||||||
| Canal 13 | Other related parties | Advertising services | 30 days | Contract | Yes | 131 | 131 | |||||||||||||||||||||||||
| La Barra S.A. | Other related parties | Advertising services | 30 days | Contract | Yes | 96 | 96 | |||||||||||||||||||||||||
| Bolsa Electrónica de Chile, Bolsa de Valores | Minority investments | Brokerage commission | 30 days | Contract | Yes | 189 | 189 | 7 | ||||||||||||||||||||||||
| Service of financial information | 30 days | Contract | Yes | 95 | 95 | |||||||||||||||||||||||||||
| Citibank N.A. United Kingdom | Other related parties | Service of financial information | 30 days | Contract | Yes | 106 | 106 | |||||||||||||||||||||||||
| Comder Contraparte Central S.A. | Other related parties | Securities clearing services | 30 days | Contract | Yes | 769 | 769 | |||||||||||||||||||||||||
| Citigroup Global Markets INC | Other related parties | Brokerage commission | 30 days | Contract | Yes | 369 | 369 | 50 | ||||||||||||||||||||||||
| DCV Registros S.A. | Other related parties | IT services | 30 days | Contract | Yes | 258 | 258 | |||||||||||||||||||||||||
| Transbank S.A. | Associates | Card processing | 30 days | Contract | Yes | 631 | 631 | 110 | ||||||||||||||||||||||||
| Exchange commission | 30 days | Contract | Yes | 77,727 | 77,727 | |||||||||||||||||||||||||||
| Centro de Compensación Automatizado S.A. | Associates | Transfer services | 30 days | Contract | Yes | 2,850 | 2,850 | 255 | ||||||||||||||||||||||||
| Fraud prevention services | 30 days | Contract | Yes | 344 | 344 | |||||||||||||||||||||||||||
| Collection services | 30 days | Contract | Yes | 147 | 147 | |||||||||||||||||||||||||||
| Artikos Chile S.A. | Other related parties | IT services | 30 days | Contract | Yes | 280 | 280 | |||||||||||||||||||||||||
| IT support services | 30 days | Contract | Yes | 236 | 236 | |||||||||||||||||||||||||||
| Citibank N.A. | Other related parties | Connectivity business commissions | Quarterly | Contract | Yes | 7,991 | 7,991 | 3,362 | ||||||||||||||||||||||||
| Desarrollos e Inversiones Internacionales SpA | Other related parties | Common area expenses | 30 days | Contract | Yes | 101 | 101 | 13 | ||||||||||||||||||||||||
| Plaza Oeste SPA | Other related parties | Common area expenses | 30 days | Contract | Yes | 167 | 167 | 50 | ||||||||||||||||||||||||
| Financial lease agreements | 30 days | Contract | Yes | 250 | 250 | 592 | ||||||||||||||||||||||||||
| Plaza del Trébol SPA | Other related parties | Common area expenses | 30 days | Contract | Yes | 106 | 106 | 127 | ||||||||||||||||||||||||
| Finance lease contract | 30 days | Contract | Yes | 256 | 256 | 19 | ||||||||||||||||||||||||||
| Nuevos Desarrollos S.A. | Other related parties | Finance lease contract | 30 days | Contract | Yes | 193 | 193 | 335 | ||||||||||||||||||||||||
| Plaza Vespucio SPA | Other related parties | Finance lease contract | 30 days | Contract | Yes | 133 | 133 | 32 | ||||||||||||||||||||||||
| Plaza Tobalaba SPA | Other related parties | Finance lease contract | 30 days | Contract | Yes | 133 | 133 | |||||||||||||||||||||||||
| Plaza La Serena SPA | Other related parties | Finance lease contract | 30 days | Contract | Yes | 257 | 257 | 385 | ||||||||||||||||||||||||
| Inmobiliaria Mall Calama S.A. | Other related parties | Finance lease contract | 30 days | Contract | Yes | 148 | 148 | |||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 40. | Related Party Disclosures, continued: |
| (c) | Transactions with related parties, continued: |
As of December 31, 2024
| Transaction description | Effect on Profit or loss | Effect on the statement Financial position | ||||||||||||||||||||||||||||||
| Company name | Nature of the relationship with the Bank | Type of service | Term | Renewal conditions | Transactions under equivalent conditions to those transactions conducted on an arm’s length basis |
Amount MCh$ | Income MCh$ | Expenses MCh$ | Accounts receivable MCh$ | Accounts payable MCh$ | ||||||||||||||||||||||
| Ionix SPA | Other related parties | IT support services | 30 days | Contract | Yes | 141 | 141 | |||||||||||||||||||||||||
| Servipag Ltda. | Joint venture | IT support services | 30 days | Contract | Yes | 367 | 367 | |||||||||||||||||||||||||
| Collection services | 30 days | Contract | Yes | 4,235 | 4,235 | 387 | ||||||||||||||||||||||||||
| Bolsa de Comercio de Santiago, Bolsa de Valores | Minority investments | Service of financial information | 30 days | Contract | Yes | 356 | 356 | 25 | ||||||||||||||||||||||||
| Brokerage commission | 30 days | Contract | Yes | 423 | 423 | |||||||||||||||||||||||||||
| IT support services | 30 days | Contract | Yes | 256 | 256 | |||||||||||||||||||||||||||
| Enex S.A. | Other related parties | Rent spaces for ATM | 30 days | Contract | Yes | 1,740 | 1,740 | 498 | ||||||||||||||||||||||||
| Universidad del Desarrollo | Other related parties | Advertising service | 30 days | Contract | Yes | 126 | 126 | |||||||||||||||||||||||||
| Universidad Adolfo Ibáñez | Other related parties | Training | 30 days | Contract | Yes | 272 | 272 | |||||||||||||||||||||||||
| Bolsa Electrónica de Chile S.A. | Minority investments | Brokerage commission | 30 days | Contract | Yes | 203 | 203 | 1 | ||||||||||||||||||||||||
| Service of financial information | 30 days | Contract | Yes | 117 | 117 | |||||||||||||||||||||||||||
| DCV Registros S.A. | Other related parties | IT services | 30 days | Contract | Yes | 294 | 294 | |||||||||||||||||||||||||
| Redbanc S.A. | Associates | Electronic transaction management services | 30 days | Contract | Yes | 17,658 | 17,658 | 1,707 | ||||||||||||||||||||||||
| IT project services | 30 days | Contract | Yes | 132 | 132 | |||||||||||||||||||||||||||
| Installation services | 30 days | Contract | Yes | 81 | 81 | |||||||||||||||||||||||||||
| Fraud prevention services | 30 days | Contract | Yes | 108 | 108 | |||||||||||||||||||||||||||
| IT services | 30 days | Contract | Yes | 442 | 442 | |||||||||||||||||||||||||||
| Depósito Central de Valores S.A. | Other related parties | Quality control and custodial services | 30 days | Contract | Yes | 833 | 833 | 90 | ||||||||||||||||||||||||
| Custodial services | 30 days | Contract | Yes | 1,357 | 1,357 | |||||||||||||||||||||||||||
| CCLV Contraparte Central S.A. | Minority investments | Brokerage commission | 30 days | Contract | Yes | 352 | 352 | 22 | ||||||||||||||||||||||||
| Manantial S.A. | Other related parties | General expenses | 30 days | Contract | Yes | 379 | 379 | |||||||||||||||||||||||||
| Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A. | Associates | Collection services | 30 days | Contract | Yes | 881 | 881 | 91 | ||||||||||||||||||||||||
| Comder Contraparte Central S.A. | Other related parties | Securities clearing services | 30 days | Contract | Yes | 529 | 529 | |||||||||||||||||||||||||
| Citigroup Global Markets INC | Other related parties | Brokerage commission | 30 days | Contract | Yes | 387 | 387 | 29 | ||||||||||||||||||||||||
| Transbank S.A. | Associates | Card processing | 30 days | Contract | Yes | 498 | 498 | 97 | ||||||||||||||||||||||||
| Project consultation | 30 days | Contract | Yes | 114 | 114 | |||||||||||||||||||||||||||
| Fraud prevention services | 30 days | Contract | Yes | 87 | 87 | |||||||||||||||||||||||||||
| Exchange commission | 30 days | Contract | Yes | 79,025 | 79,025 | |||||||||||||||||||||||||||
| Centro de Compensación Automatizado S.A. | Associates | Fraud prevention services | 30 days | Contract | Yes | 657 | 657 | 333 | ||||||||||||||||||||||||
| Collection services | 30 days | Contract | Yes | 187 | 187 | |||||||||||||||||||||||||||
| Transfer services | 30 days | Contract | Yes | 2,803 | 2,803 | |||||||||||||||||||||||||||
| Artikos Chile S.A. | Joint venture | IT support services | 30 days | Contract | Yes | 422 | 422 | 2 | ||||||||||||||||||||||||
| IT services | 30 days | Contract | Yes | 465 | 465 | |||||||||||||||||||||||||||
| Citibank N.A. | Other related parties | Connectivity business commissions | Quarterly | Contract | Yes | 8,065 | 8,065 | 3,272 | ||||||||||||||||||||||||
| Fundación Teletón | Other related parties |
Advertising services |
30 days | Contract | Yes | 449 | 449 | 121 | ||||||||||||||||||||||||
| Donations | 30 days | Contract | Yes | 1,599 | 1,599 | |||||||||||||||||||||||||||
| Canal 13 | Other related parties | Advertising service | 30 days | Contract | Yes | 202 | 202 | 73 | ||||||||||||||||||||||||
| Inmobiliaria e Inversiones Capitolio S.A. | Other related parties | Leases | 30 days | Contract | Yes | 84 | 84 | |||||||||||||||||||||||||
| Nuevos Desarrollos S.A. | Other related parties | Finance lease contract | 30 days | Contract | Yes | 180 | 180 | 496 | ||||||||||||||||||||||||
| Plaza Vespucio SPA | Other related parties | Finance lease contract | 30 days | Contract | Yes | 127 | 127 | 154 | ||||||||||||||||||||||||
| Plaza Oeste SPA | Other related parties | Finance lease contract | 30 days | Contract | Yes | 254 | 254 | 810 | ||||||||||||||||||||||||
| Plaza del Trebol SPA | Other related parties | Finance lease contract | 30 days | Contract | Yes | 270 | 270 | 73 | ||||||||||||||||||||||||
| Plaza Tobalaba SPA | Other related parties | Finance lease contract | 30 days | Contract | Yes | 135 | 135 | 113 | ||||||||||||||||||||||||
| Plaza La Serena SPA | Other related parties | Finance lease contract | 30 days | Contract | Yes | 223 | 223 | 543 | ||||||||||||||||||||||||
| Inmobiliaria Mall Calama S.A. | Other related parties | Finance lease contract | 30 days | Contract | Yes | 141 | 141 | 137 | ||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 40. | Related Party Disclosures, continued: |
| (d) | Payments to the Board of Directors and to key personnel of the management of the Bank and its subsidiaries: |
| 2025 | 2024 | 2023 | ||||||||||
| MCh$ | MCh$ | MCh$ | ||||||||||
| Board of Directors: | ||||||||||||
| Payment of remuneration and allowances of the Board of Directors - Bank and its subsidiaries | 3,641 | 3,500 | 3,347 | |||||||||
| Other Board of Director´s expenses | 80 | 78 | 111 | |||||||||
| Key Personnel of the Management of the Bank and its Subsidiaries: | ||||||||||||
| Payment for short-term employee benefits | 33,118 | 33,779 | 36,535 | |||||||||
| Payment for severance | 1,312 | 4,139 | 1,548 | |||||||||
| Subtotal | 34,430 | 37,918 | 38,083 | |||||||||
| Total | 38,151 | 41,496 | 41,541 | |||||||||
| (e) | Composition of the Board of Directors and key personnel of the Management of the Bank and its subsidiaries: |
| 2025 | 2024 | |||||||
| No. of executives | ||||||||
| Board of Directors | ||||||||
| Directors – Bank and its subsidiaries | 17 | 17 | ||||||
| Key Personnel of the Management of the Bank and its Subsidiaries: | ||||||||
| CEO – Bank | 1 | 1 | ||||||
| CEOs – Subsidiaries | 5 | 5 | ||||||
| Division / Area Managers– Bank | 74 | 74 | ||||||
| Division / Area Managers– Subsidiaries | 30 | 27 | ||||||
| Subtotal | 110 | 107 | ||||||
| Total | 127 | 124 | ||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 41. | Fair Value of Financial Assets and Liabilities: |
Banco de Chile and its subsidiaries have defined a corporate framework for valuation and control related with the process to the fair value measurement.
Within the established framework includes the Product Control Unit, which is independent of the business areas and reports to the Financial Management Control and Division Manager. This function befalls to the Financial Control, Treasury and Capital Manager, through the Financial Risk Information and Control Section, is responsible for independent verification of price and results of trading (including derivatives) and investment operations and all fair value measurements.
To achieve the appropriate measurements and controls, the Bank and its subsidiaries, take into account at least the following aspects:
| (i) | Industry standard valuation. |
To value financial instruments, Banco de Chile uses industry standard modeling; quota value, share price, discounted cash flows and valuation of options through Black-Scholes-Merton, according to the case.
The input parameters for the valuation of fixed income instruments and options correspond to rates, prices and volatility levels for different terms and market factors that are traded in the national and international market and that are provided by the main sources of the market.
In the case of the valuation of derivatives under a CSA (Credit Support Annex Discounting) agreement, the rates used to discount the flows correspond to the CSA Discounting methodology, where the discount factors used depend on the collateral agreement that exists with each counterparty.
| (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 (such as Santiago Stock Exchange, Bloomberg, LVA and Risk America, etc.). This quote represents the price at which these instruments are regularly traded in the financial markets.
| (iii) | Valuation techniques. |
If no specific quotes are available for the instrument to be valued, valuation techniques will be used to determine the fair value.
Due to, in general, the valuation models require a set of market parameters as inputs, the aim is to maximize information based on observable or price-related quotations for similar instruments in active markets. To the extent there is no information in direct from the markets, data from external suppliers of information, prices of similar instruments and historical information are used to validate the valuation parameters.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 41. | Fair Value of Financial Assets and Liabilities, continued: |
| (iv) | Fair value adjustments. |
Part of the fair value process considers three adjustments to the market value, calculated based on the market parameters, including; a Bid/Offer adjustment, an adjustment for derivative credit risk (CVA and DVA), and an adjustment for the funding of the derivative cash flows (FVA). Likewise, for certain fixed income instruments held in investment portfolios measured at fair value through other comprehensive income or at amortized cost, the portion of the fair value adjustment explained by impairment due to counterparty credit risk is determined.
In turn, the Bid/Offer adjustment, represents the impact on the valuation of an instrument depending on whether the position corresponds to a long (bought) or a short (sold). To calculate this adjustment is used the direct quotes from active markets or indicative prices or derivatives of similar assets depending on the instrument, considering the Bid, Mid and Offer, respectively. Finally, the adjustment made for CVA and DVA for derivatives corresponds to the credit risk recognition of the issuer, either of the counterparty (CVA) or of Banco de Chile (DVA). Similarly, the determination of credit risk impairment is determined based on the counterparty risk implicit in the instrument’s market rate. Finally, the FVA adjustment for derivatives corresponds to a value adjustment that reflects the expected cost (or benefit) of financing (reinvesting) the cash flows of the derivative, with respect to a reference discount rate, when there are no collaterals or this one is imperfect.
Bid/Offer adjustments are made for trading instruments and Financial instrument at fair value through Other Comprehensive Income. Adjustments for CVA / DVA/FVA/COLVA are carried out only for derivatives. For its part, credit risk impairment is computed only for fixed income instruments measured at fair value through other comprehensive income and fixed income instruments measured at amortized cost.
| (v) | Fair value control. |
A process of independent verification of prices and interest rates is executed daily, in order to control that the market parameters used by Banco de Chile in the valuation of the financial instruments relating to the current state of the market and from them the best estimate derived of the fair value. The objective of this process is to control those the official market parameters provided by the respective business areas, before being entered into the valuation, are within acceptable ranges of differences when compared to the same set of parameters prepared independently by the Financial Risk Information and Control Section. As a result, value differences are obtained at the level of currency, product and portfolio. In the event significant differences exist, these differences are scaled according to the amount of individual materiality of each market factor and aggregated at the portfolio level, according to the grouping levels within previously defined ranges. These ranges are approved by the Finance, International and Financial Risk Committee.
Complementary and in parallel, the Financial Risk Information and Control Section generates and reports daily Profit and Loss (“P&L”) and Exposure to Market Risks, which allow for proper control and consistency of the parameters used in the valuation.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 41. | Fair Value of Financial Assets and Liabilities, continued: |
| (vi) | Judgmental analysis and information to Management. |
Cases, where there are no market quotations for the instrument to be valued and there are no prices for similar transactions instruments or indicative parameters, a specific control and a reasoned analysis must be carried out in order to estimate the fair value of the operation. Within the valuation framework described in the Reasonable Value Policy (and its procedure) approved by the Board of Directors of Banco de Chile, a required level of approval is set in order to carry out transactions where market information is not available, or it is not possible to infer prices or rates from it.
| (a) | Hierarchy of instrument valued at Fair value: |
Banco de Chile and its subsidiaries, classify all the financial instruments among the following levels:
| Level 1: | These are financial instruments whose fair value is calculated at quoted prices (unadjusted) in extracted from liquid and deep markets. For these instruments there are quotes or prices (return internal rates, quote value, price) the observable market, so that assumptions are not required to determine the value. |
In this level, the following instruments are considered: currency futures, debt instruments issued by the Treasury and the Central Bank of Chile, which belong to benchmarks, mutual fund investments and equity shares.
For the instruments of the Central Bank of Chile and the General Treasury of the Republic, all those mnemonics belonging to a Benchmark, in other words corresponding to one of the following categories published by the Santiago Stock Exchange, will be considered as Level 1: Pesos-02, Pesos-03, Pesos-04, Pesos-05, Pesos-07, Pesos-10, Pesos-20, UF-02, UF-03, UF-04, UF-05, UF-07, UF-10, UF-20, UF-30. A Benchmark corresponds to a group of mnemonics that are similar in duration and are traded in an equivalent way, i.e., the price (return internal rates in this case) obtained is the same for all the instruments that make up a Benchmark. This feature defines a greater depth of market, with daily quotations that allow classifying these instruments as Level 1.
In the case of debt issued by the Chilean Government, the internal rate of return of the market is used to discount all flows to present value. In the case of mutual funds and equity shares, the current market price per share, which multiplied by the number of instruments results in the fair value.
The preceding described valuation methodology is equivalent to the one used by the Santiago Stock Exchange and correspond to the standard methodology used in the market.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 41. | Fair Value of Financial Assets and Liabilities, continued: |
| (a) | Hierarchy of instrument valued at Fair value, continued: |
| Level 2: | They are financial instruments whose fair value is calculated based on prices other than in quoted in Level 1 that are observable for the asset or liability, directly (that is, as prices or internal rates of return) or indirectly (that is, derived from prices or internal rates of return from similar instruments). These categories include: |
| a) | Quoted prices for similar assets or liabilities in active markets. |
| b) | Quoted prices for identical or similar assets or liabilities in markets that are not active. |
| c) | Inputs data other than quoted prices that are observable for the asset or liability. |
| d) | Inputs data corroborated by the market. |
At this level there are mainly derivatives instruments, debt issued by banks, debt issues of Chilean and foreign companies, issued in Chile or abroad, mortgage claims, financial brokerage instruments and some issuances by the Central Bank of Chile and the General Treasury of the Republic, which do not belong to benchmarks.
The technique used for derivative valuation depends on whether the instrument is impacted by volatility as a relevant market factor. Accordingly, for options, the Black-Scholes-Merton formula is applied, as it incorporates volatility, whereas for other derivatives, such as forwards and swaps, the discounted cash flow method is used.
For the remaining instruments at this level, as for debt issues of level 1, the valuation is done through cash flows model by using an internal rate of return that can be derived or estimated from internal rates of return of similar securities as mentioned above.
If there is no observable price for an instrument in a specific term, the price will be inferred from the interpolation between periods that have observable quoted price in active markets. These models incorporate various market variables, including the credit quality of counterparties, exchange rates and interest rate curves.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 41. | Fair Value of Financial Assets and Liabilities, continued: |
| (a) | Hierarchy of instrument valued at Fair value, continued: |
Valuation Techniques and Inputs for Level 2 Instrument:
| Type of Financial Instrument | Valuation Method | Description: Inputs and Sources |
| Local Bank and Corporate Bonds | Discounted cash flows model | Prices (internal rates of return) are provided by third party price providers that are widely used in the Chilean market. Model is based on a Base Yield (Central Bank Bonds) and issuer spread. The model is based on daily prices and risk/maturity similarities between Instruments. |
| Offshore Bank and Corporate Bonds | Prices are provided by third party price providers that are widely used in the Chilean market. Model is based on daily prices. |
|
| Local Central Bank and Treasury Bonds | Prices (internal rates of return) are provided by third party price providers that are widely used in the Chilean market. Model is based on daily prices. |
|
| Mortgage Notes | Prices (internal rates of return) are provided by third party price providers that are widely used in the Chilean market. Model is based on a Base Yield (Central Bank Bonds) and issuer spread. The model takes into consideration daily prices and risk/maturity similarities between instruments. |
|
| Time Deposits | Prices (internal rates of return) are provided by third party price providers that are widely used in the Chilean market. Model is based on daily prices and considers risk/maturity similarities between instruments. |
|
| Cross Currency Swaps, Interest Rate Swaps, FX Forwards, Inflation Forwards | Forward Points, Inflation forecast and local swap rates are provided by market brokers that are widely used in the Chilean market. Offshore rates and spreads are obtained from third party price providers that are widely used in the Chilean market. Zero Coupon rates are calculated by using the bootstrapping method over swap rates. |
|
| FX Options | Black-Scholes Model | Prices for volatility surface estimates are obtained from market brokers that are widely used in the Chilean market. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 41. | Fair Value of Financial Assets and Liabilities, continued: |
| (a) | Hierarchy of instrument valued at Fair value, continued: |
Level 3: These are financial instruments whose fair value is determined using unobservable inputs data neither for the assets or liabilities under analysis nor for similar instruments. An adjustment to an input that is significant to the entire measurement can result in a fair value measurement classified within Level 3 of the fair value hierarchy, if the adjustment uses significant unobservable inputs.
The instruments likely to be classified as level 3 are mainly Corporate Debt by Chilean and foreign companies, issued both in Chile and abroad.
Valuation Techniques and Inputs for Level 3 Instrument:
| Type of Financial Instrument | Valuation Method | Description: Inputs and Sources |
| Local Bank and Corporate Bonds | Discounted cash flows model | As inputs for these types of securities are not observable by the market, we model interest rate of returns for them based on a Base Yield (Central Bank Bonds) and issuer spread. These inputs (base yield and issuer spread) are provided on a daily basis by third party price providers that are widely used in the Chilean market. |
| Offshore Bank and Corporate Bonds | Discounted cash flows model | As inputs for these types of securities are not observable by the market, we model interest rate of returns for them based on a Base Yield and issuer spread. These inputs (base yield and issuer spread) are provided on a weekly basis by third party price providers that are widely used in the Chilean market. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 41. | Fair Value of Financial Assets and Liabilities, continued: |
| (b) | Level chart: |
The following table shows the classification by levels, for financial instruments measured at fair value.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Financial Assets | ||||||||||||||||||||||||||||||||
| Financial assets held for trading at fair value through profit or loss | ||||||||||||||||||||||||||||||||
| Financial derivative contracts: | ||||||||||||||||||||||||||||||||
| Forwards | 378,983 | 227,670 | 378,983 | 227,670 | ||||||||||||||||||||||||||||
| Swaps | 1,488,810 | 2,070,481 | 1,488,810 | 2,070,481 | ||||||||||||||||||||||||||||
| Call options | 332 | 4,949 | 332 | 4,949 | ||||||||||||||||||||||||||||
| Put options | 2,515 | 253 | 2,515 | 253 | ||||||||||||||||||||||||||||
| Futures | ||||||||||||||||||||||||||||||||
| Subtotal | 1,870,640 | 2,303,353 | 1,870,640 | 2,303,353 | ||||||||||||||||||||||||||||
| Debt financial instruments: | ||||||||||||||||||||||||||||||||
| From the Chilean Government and Central Bank | 289,581 | 210,418 | 2,508,748 | 1,285,039 | 2,798,329 | 1,495,457 | ||||||||||||||||||||||||||
| Other debt financial instruments issued in Chile | 263,104 | 206,675 | 14,250 | 11,273 | 277,354 | 217,948 | ||||||||||||||||||||||||||
| Financial debt instruments issued Abroad | 46,019 | 976 | 46,019 | 976 | ||||||||||||||||||||||||||||
| Subtotal | 289,581 | 210,418 | 2,817,871 | 1,492,690 | 14,250 | 11,273 | 3,121,702 | 1,714,381 | ||||||||||||||||||||||||
| Others | 402,259 | 411,689 | 402,259 | 411,689 | ||||||||||||||||||||||||||||
| Financial assets at fair value through other comprehensive income | ||||||||||||||||||||||||||||||||
| Debt Financial Instruments: (1) | ||||||||||||||||||||||||||||||||
| From the Chilean Government and Central Bank | 604,907 | 550,418 | 569,399 | 110,359 | 1,174,306 | 660,777 | ||||||||||||||||||||||||||
| Other debt financial instruments issued in Chile | 2,285,253 | 1,303,708 | 53,673 | 71,922 | 2,338,926 | 1,375,630 | ||||||||||||||||||||||||||
| Financial debt instruments issued abroad | 35,739 | 51,938 | 35,739 | 51,938 | ||||||||||||||||||||||||||||
| Equity Instruments: | ||||||||||||||||||||||||||||||||
| Instruments issued in Chile | 8,387 | 6,920 | 357 | 357 | 8,744 | 7,277 | ||||||||||||||||||||||||||
| Instruments issued abroad | 2,386 | 2,103 | 102 | 112 | 2,488 | 2,215 | ||||||||||||||||||||||||||
| Subtotal | 615,680 | 559,441 | 2,890,391 | 1,466,005 | 54,132 | 72,391 | 3,560,203 | 2,097,837 | ||||||||||||||||||||||||
| Derivative financial instruments for hedging purposes | ||||||||||||||||||||||||||||||||
| Forwards | ||||||||||||||||||||||||||||||||
| Swaps | 29,714 | 73,959 | 29,714 | 73,959 | ||||||||||||||||||||||||||||
| Call options | ||||||||||||||||||||||||||||||||
| Put ptions | ||||||||||||||||||||||||||||||||
| Futures | ||||||||||||||||||||||||||||||||
| Subtotal | 29,714 | 73,959 | 29,714 | 73,959 | ||||||||||||||||||||||||||||
| Total | 1,307,520 | 1,181,548 | 7,608,616 | 5,336,007 | 68,382 | 83,664 | 8,984,518 | 6,601,219 | ||||||||||||||||||||||||
| Financial Liabilities | ||||||||||||||||||||||||||||||||
| Financial liabilities held for trading at fair value through profit or loss | ||||||||||||||||||||||||||||||||
| Financial derivative contracts: | ||||||||||||||||||||||||||||||||
| Forwards | 455,921 | 241,757 | 455,921 | 241,757 | ||||||||||||||||||||||||||||
| Swaps | 1,621,215 | 2,197,858 | 1,621,215 | 2,197,858 | ||||||||||||||||||||||||||||
| Call options | 870 | 4,151 | 870 | 4,151 | ||||||||||||||||||||||||||||
| Put options | 1,459 | 955 | 1,459 | 955 | ||||||||||||||||||||||||||||
| Futures | ||||||||||||||||||||||||||||||||
| Subtotal | 2,079,465 | 2,444,721 | 2,079,465 | 2,444,721 | ||||||||||||||||||||||||||||
| Others | 512 | 990 | 512 | 990 | ||||||||||||||||||||||||||||
| Derivative financial instruments for hedging purposes | ||||||||||||||||||||||||||||||||
| Forwards | ||||||||||||||||||||||||||||||||
| Swaps | 297,817 | 141,040 | 297,817 | 141,040 | ||||||||||||||||||||||||||||
| Call options | ||||||||||||||||||||||||||||||||
| Put options | ||||||||||||||||||||||||||||||||
| Futures | ||||||||||||||||||||||||||||||||
| Subtotal | 297,817 | 141,040 | 297,817 | 141,040 | ||||||||||||||||||||||||||||
| Total | 2,377,794 | 2,586,751 | 2,377,794 | 2,586,751 | ||||||||||||||||||||||||||||
| (1) | As of December 31, 2024, 100% of instruments of level 3 are “Investment Grade” instruments . Also, 100% of total of these financial instruments correspond to domestic issuers. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 41. | Fair Value of Financial Assets and Liabilities, continued: |
| (c) | Level 3 Reconciliation: |
The following table shows the reconciliation between the balances at the beginning and at the end of year for those instruments classified in Level 3, whose fair value is reflected in the Consolidated Financial Statements:
| 2025 | ||||||||||||||||||||||||||||||||
| Balance as of January 1, 2025 | Gain (Loss) Recognized in Income (1) | Gain (Loss) Recognized in Equity (2) | Purchases | Sales | Transfer from Level 1 and 2 | Transfer to Level 1 and 2 |
Balance as of December 31, 2025 |
|||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Financial assets held for trading at fair value through profit or loss | ||||||||||||||||||||||||||||||||
| Debt Financial Instruments: | ||||||||||||||||||||||||||||||||
| Other debt financial instruments issued in Chile | 11,273 | 274 | 15,952 | (5,698 | ) | (7,551 | ) | 14,250 | ||||||||||||||||||||||||
| Subtotal | 11,273 | 274 | 15,952 | (5,698 | ) | (7,551 | ) | 14,250 | ||||||||||||||||||||||||
| Financial assets at fair value through Other Comprehensive Income: | ||||||||||||||||||||||||||||||||
| Debt Financial Instruments: | ||||||||||||||||||||||||||||||||
| Other debt financial instruments issued in Chile | 71,922 | 1,225 | 473 | (44,801 | ) | 61,899 | (37,045 | ) | 53,673 | |||||||||||||||||||||||
| Equity Instruments: | ||||||||||||||||||||||||||||||||
| Instruments issued in Chile | 357 | 357 | ||||||||||||||||||||||||||||||
| Instruments issued abroad | 112 | (10 | ) | 102 | ||||||||||||||||||||||||||||
| Subtotal | 72,391 | 1,225 | 463 | (44,801 | ) | 61,899 | (37,045 | ) | 54,132 | |||||||||||||||||||||||
| Total | 83,664 | 1,499 | 463 | 15,952 | (50,499 | ) | 61,899 | (44,596 | ) | 68,382 | ||||||||||||||||||||||
| 2024 | ||||||||||||||||||||||||||||||||
| Balance as of January 1, 2024 | Gain (Loss) Recognized in Income (1) | Gain (Loss) Recognized in Equity (2) | Purchases | Sales | Transfer from Level 1 and 2 | Transfer to Level 1 and 2 |
Balance as of December 31, 2024 |
|||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Financial assets held for trading at fair value through profit or loss | ||||||||||||||||||||||||||||||||
| Debt Financial Instruments: | ||||||||||||||||||||||||||||||||
| Other debt financial instruments issued in Chile | 34,363 | 1,409 | 25,279 | (56,736 | ) | 6,958 | 11,273 | |||||||||||||||||||||||||
| Subtotal | 34,363 | 1,409 | 25,279 | (56,736 | ) | 6,958 | 11,273 | |||||||||||||||||||||||||
| Financial assets at fair value through other comprehensive income: | ||||||||||||||||||||||||||||||||
| Debt Financial Instruments: | ||||||||||||||||||||||||||||||||
| Other debt financial instruments issued in Chile | 88,483 | 586 | 1,682 | 58,608 | (27,961 | ) | 11,268 | (60,744 | ) | 71,922 | ||||||||||||||||||||||
| Equity Instruments: | ||||||||||||||||||||||||||||||||
| Instruments issued in Chile | 358 | (1 | ) | 357 | ||||||||||||||||||||||||||||
| Instruments issued abroad | 25 | 87 | 112 | |||||||||||||||||||||||||||||
| Subtotal | 88,866 | 586 | 1,681 | 58,695 | (27,961 | ) | 11,268 | (60,744 | ) | 72,391 | ||||||||||||||||||||||
| Total | 123,229 | 1,995 | 1,681 | 83,974 | (84,697 | ) | 18,226 | (60,744 | ) | 83,664 | ||||||||||||||||||||||
| (1) | Recorded in income under line item “Net financial result”. |
| (2) | Recorded in equity under the line item “Accumulated other comprehensive income”. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 41. | Fair Value of Financial Assets and Liabilities, continued: |
| (d) | Sensitivity of instruments classified in Level 3 to changes in key assumptions of models: |
The following table shows the sensitivity, by type of instrument, of those instruments classified in Level 3 using alternative in key valuation assumptions:
| As of December 31, 2025 | As of December 31, 2024 | |||||||||||||||
| Level 3 | Sensitivity to changes in key assumptions of models | Level 3 | Sensitivity to changes in key assumptions of models | |||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||
| Financial assets held for trading at fair value through profit or loss | ||||||||||||||||
| Debt financial instruments: | ||||||||||||||||
| Other debt financial instruments issued in Chile | 14,250 | (15 | ) | 11,273 | (255 | ) | ||||||||||
| Subtotal | 14,250 | (15 | ) | 11,273 | (255 | ) | ||||||||||
| Financial assets at fair value through other comprehensive income | ||||||||||||||||
| Debt Financial Instruments: | ||||||||||||||||
| Other debt financial instruments issued in Chile | 53,673 | (1,652 | ) | 71,922 | (2,320 | ) | ||||||||||
| Equity Instruments: | ||||||||||||||||
| Instruments issued in Chile | 357 | 357 | ||||||||||||||
| Instruments issued abroad | 102 | 112 | ||||||||||||||
| Subtotal | 54,132 | (1,652 | ) | 72,391 | (2,320 | ) | ||||||||||
| Total | 68,382 | (1,667 | ) | 83,664 | (2,575 | ) | ||||||||||
With the purpose of determining the sensitivity of the financial investments to changes in significant market factors, the Bank has made alternative calculations at fair value, changing those key parameters for the valuation and which are not directly observable in screens. For financial assets in the table above, which correspond to Bank Bonds and Corporate Bonds, it was considered that, since there are no current observables prices, the input prices will be based on brokers’ quotes. The prices are usually calculated as a base rate plus a spread. For Local Bonds it was determined to apply a 10% impact on the price. The 10% impact is considered reasonable, taking into account the market performance of these instruments and comparing it against the bid/offer adjustment that is provisioned by these instruments.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 41. | Fair Value of Financial Assets and Liabilities, continued: |
| (e) | Other assets and liabilities: |
The following table summarizes the fair values of the Bank’s main financial assets and liabilities that are not recorded at fair value in the Statement of Financial Position. The values shown in this note are not attempt to estimate the value of the Bank’s income-generating assets, nor forecast their future behavior. The estimated fair value is as follows:
| Book Value | Estimated Fair Value | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||
| Assets | ||||||||||||||||
| Cash and deposits in banks | 2,590,986 | 2,699,076 | 2,590,986 | 2,699,076 | ||||||||||||
| Transactions in the course of collection | 414,419 | 372,456 | 414,419 | 372,456 | ||||||||||||
| Subtotal | 3,005,405 | 3,071,532 | 3,005,405 | 3,071,532 | ||||||||||||
| Financial assets at amortized cost | ||||||||||||||||
| Rights by resale agreements | 100,643 | 87,291 | 100,643 | 87,291 | ||||||||||||
| Debt financial instruments | 460,937 | 944,074 | 435,196 | 892,550 | ||||||||||||
| Loans to Banks | ||||||||||||||||
| Domestic banks | 299,147 | 299,147 | ||||||||||||||
| Central Bank of Chile | ||||||||||||||||
| Foreign banks | 398,028 | 366,568 | 397,340 | 366,245 | ||||||||||||
| Subtotal | 959,608 | 1,697,080 | 933,179 | 1,645,233 | ||||||||||||
| Loans to customers, net | ||||||||||||||||
| Commercial loans | 19,296,206 | 19,893,412 | 18,835,985 | 19,561,279 | ||||||||||||
| Residential mortgage loans | 13,896,790 | 13,197,695 | 13,957,541 | 13,000,178 | ||||||||||||
| Consumer loans | 5,349,315 | 5,151,755 | 5,436,873 | 5,247,985 | ||||||||||||
| Subtotal | 38,542,311 | 38,242,862 | 38,230,399 | 37,809,442 | ||||||||||||
| Total | 42,507,324 | 43,011,474 | 42,168,983 | 42,526,207 | ||||||||||||
| Liabilities | ||||||||||||||||
| Transactions in the course of payment | 564,172 | 283,605 | 564,172 | 283,605 | ||||||||||||
| Financial liabilities at amortized cost | ||||||||||||||||
| Current accounts and other demand deposits | 14,791,870 | 14,630,797 | 14,791,870 | 14,630,797 | ||||||||||||
| Time deposits and saving accounts | 14,162,408 | 14,345,223 | 14,155,640 | 14,346,676 | ||||||||||||
| Obligations by repurchase agreements | 286,915 | 109,794 | 286,915 | 109,794 | ||||||||||||
| Borrowings from financial institutions | 1,296,751 | 1,103,468 | 1,278,009 | 1,071,097 | ||||||||||||
| Debt financial instruments issued | ||||||||||||||||
| Mortgage finance bonds for residential purposes | 521 | 849 | 578 | 946 | ||||||||||||
| Mortgage finance bonds for general purposes | 1 | 1 | ||||||||||||||
| Bonds | 10,800,330 | 9,689,219 | 10,725,466 | 9,596,699 | ||||||||||||
| Other financial obligations | 367,323 | 284,479 | 367,323 | 284,479 | ||||||||||||
| Subtotal | 41,706,118 | 40,163,830 | 41,605,801 | 40,040,489 | ||||||||||||
| Debt financial instruments issued for regulatory capital purposes | ||||||||||||||||
| Subordinate bonds | 1,087,093 | 1,068,879 | 1,055,062 | 1,057,509 | ||||||||||||
| Total | 43,357,383 | 41,516,314 | 43,225,035 | 41,381,603 | ||||||||||||
Other financial assets and liabilities not measured at their fair value, but for which a fair value is estimated, even if not managed based on such value, include assets and liabilities such as placements, deposits and other time deposits, debt issued, and other financial assets and obligations with different maturities and characteristics. The fair value of these assets and liabilities is calculated using the Discounted Cash Flow model and the use of several data sources such as yield curves, credit risk spreads, etc. In addition, due to the fact that some of these assets and liabilities are not traded on the market, regular reviews and analyzes are required to determine the suitability of the inputs and fair values determined.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 41. | Fair Value of Financial Assets and Liabilities, continued: |
| (f) | Levels of other assets and liabilities: |
The table below sets forth the fair value of Financial Assets and Liabilities not measured at fair value on the balance sheet, for the years ended December 31, 2025 and 2024:
| Level 1 Estimated Fair Value |
Level 2 Estimated Fair Value |
Level 3 Estimated Fair Value |
Total Estimated Fair Value |
|||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Cash and deposits in banks | 2,590,986 | 2,699,076 | 2,590,986 | 2,699,076 | ||||||||||||||||||||||||||||
| Transactions in the course of collection | 414,419 | 372,456 | 414,419 | 372,456 | ||||||||||||||||||||||||||||
| Subtotal | 3,005,405 | 3,071,532 | 3,005,405 | 3,071,532 | ||||||||||||||||||||||||||||
| Financial assets at amortized cost | ||||||||||||||||||||||||||||||||
| Rights by resale agreements | 100,643 | 87,291 | 100,643 | 87,291 | ||||||||||||||||||||||||||||
| Debt financial instruments | 435,196 | 892,550 | 435,196 | 892,550 | ||||||||||||||||||||||||||||
| Loans to Banks | ||||||||||||||||||||||||||||||||
| Domestic banks | 299,147 | 299,147 | ||||||||||||||||||||||||||||||
| Central Bank of Chile | ||||||||||||||||||||||||||||||||
| Foreign banks | 397,340 | 366,245 | 397,340 | 366,245 | ||||||||||||||||||||||||||||
| Subtotal | 535,839 | 1,278,988 | 397,340 | 366,245 | 933,179 | 1,645,233 | ||||||||||||||||||||||||||
| Loans to customers, net | ||||||||||||||||||||||||||||||||
| Commercial loans | 18,835,985 | 19,561,279 | 18,835,985 | 19,561,279 | ||||||||||||||||||||||||||||
| Residential mortgage loans | 13,957,541 | 13,000,178 | 13,957,541 | 13,000,178 | ||||||||||||||||||||||||||||
| Consumer loans | 5,436,873 | 5,247,985 | 5,436,873 | 5,247,985 | ||||||||||||||||||||||||||||
| Subtotal | 38,230,399 | 37,809,442 | 38,230,399 | 37,809,442 | ||||||||||||||||||||||||||||
| Total | 3,541,244 | 4,350,520 | 38,627,739 | 38,175,687 | 42,168,983 | 42,526,207 | ||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||
| Transactions in the course of payment | 564,172 | 283,605 | 564,172 | 283,605 | ||||||||||||||||||||||||||||
| Financial liabilities at amortized cost | ||||||||||||||||||||||||||||||||
| Current accounts and other demand deposits | 14,791,870 | 14,630,797 | 14,791,870 | 14,630,797 | ||||||||||||||||||||||||||||
| Time deposits and saving accounts | 14,155,640 | 14,346,676 | 14,155,640 | 14,346,676 | ||||||||||||||||||||||||||||
| Obligations by repurchase agreements | 286,915 | 109,794 | 286,915 | 109,794 | ||||||||||||||||||||||||||||
| Borrowings from financial institutions | 1,278,009 | 1,071,097 | 1,278,009 | 1,071,097 | ||||||||||||||||||||||||||||
| Debt financial instruments issued | ||||||||||||||||||||||||||||||||
| Mortgage finance bonds for residential purposes | 578 | 946 | 578 | 946 | ||||||||||||||||||||||||||||
| Mortgage finance bonds for general purposes | 1 | 1 | ||||||||||||||||||||||||||||||
| Bonds | 10,725,466 | 9,596,699 | 10,725,466 | 9,596,699 | ||||||||||||||||||||||||||||
| Other financial obligations | 367,323 | 284,479 | 367,323 | 284,479 | ||||||||||||||||||||||||||||
| Subtotal | 15,078,785 | 14,740,591 | 10,726,044 | 9,597,646 | 15,800,972 | 15,702,252 | 41,605,801 | 40,040,489 | ||||||||||||||||||||||||
| Debt financial instruments issued for regulatory capital purposes | ||||||||||||||||||||||||||||||||
| Subordinate bonds | 1,055,062 | 1,057,509 | 1,055,062 | 1,057,509 | ||||||||||||||||||||||||||||
| Total | 15,642,957 | 15,024,196 | 10,726,044 | 9,597,646 | 16,856,034 | 16,759,761 | 43,225,035 | 41,381,603 | ||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 41. | Fair Value of Financial Assets and Liabilities, continued: |
| (f) | Levels of other assets and liabilities, continued: |
The Bank determines the fair value of these assets and liabilities according to the following:
| ● | Short-term assets and liabilities: For assets and liabilities with short-term maturity, it is assumed that the book values approximate to their fair value. This assumption is applied to the following assets and liabilities: |
| Assets | Liabilities | |
| - Cash and deposits in banks | - Current accounts and other demand deposits | |
| - Transactions in the course of collection | - Transactions in the course of payments | |
| - Rights by resale agreements | - Obligations by repurchase agreements | |
| - Loans to domestic banks (including the Central Bank of Chile) |
| ● | Loans to Customers and Advances to foreign banks: Fair value is determined by using the discounted cash flow model and internally generated discount rates, based on internal transfer rates derived from our internal transfer pricing process. Upon determination of the present value, we deduct the related loan loss allowances to incorporate the credit risk associated with each contract or loan. As we use internally generated parameters for valuation purposes, we categorize these instruments in Level 3. |
| ● | Debt financial instruments at amortized cost: The fair value is calculated with the methodology of the Stock Exchange, using the IRR observed in the market. Because the instruments that are in this category correspond to Treasury Bonds that are Benchmark, they are classified in Level 1. |
| ● | Mortgage finance bonds and Bonds: In order to determine the present value of contractual cash flows, we apply the discounted cash flow model by using market interest rates that are available in the market, either for the instruments under valuation or instruments with similar features that fit valuation needs in terms of currency, maturities and liquidity. The market interest rates are obtained from third party price providers widely used by the market. As a result of the valuation technique and the quality of inputs (observable) used for valuation, we categorize these financial liabilities in Level 2. |
| ● | Saving Accounts, Time Deposits, Borrowings from Financial Institutions (including the Central Bank of Chile), Subordinated Bonds and Other financial liabilities : The discounted cash flow model is used to obtain the present value of committed cash flows by applying a bucket approach and average adjusted discount rates that derived from both market rates for instruments with similar features and our internal transfer pricing process. Because we use internally generated parameters and/or apply significant judgmental analysis for valuation purposes, we categorize these financial liabilities in Level 3. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 42. | Maturity according to their remaining Terms of Financial Assets and Liabilities: |
The table below details the main financial assets and liabilities grouped in accordance with their remaining maturity, including capitals and accrued interest as of December 31, 2025 and 2024. As these are for trading and financial instruments at fair value through other comprehensive income they are included at their fair value:
| 2025 | ||||||||||||||||||||||||||||||||||||||||
| On demand | Up to 1 month | Over 1 month and up to 3 months | Over 3 month and up to 12 months | Subtotal up to 1 year | Over 1 year and up to 3 years | Over 3 years and up to 5 years |
Over 5 years |
Subtotal over 1 year | Total | |||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||||
| Cash and deposits in banks | 2,590,986 | 2,590,986 | 2,590,986 | |||||||||||||||||||||||||||||||||||||
| Transactions in the course of collection | 414,419 | 414,419 | 414,419 | |||||||||||||||||||||||||||||||||||||
| Financial assets held for trading at fair value through profit or loss | ||||||||||||||||||||||||||||||||||||||||
| Derivative financial instruments | 168,297 | 136,487 | 323,653 | 628,437 | 398,808 | 386,942 | 456,453 | 1,242,203 | 1,870,640 | |||||||||||||||||||||||||||||||
| Debt financial instruments | 3,121,702 | 3,121,702 | 3,121,702 | |||||||||||||||||||||||||||||||||||||
| Others | 402,259 | 402,259 | 402,259 | |||||||||||||||||||||||||||||||||||||
| Financial assets at fair value through other comprehensive income | ||||||||||||||||||||||||||||||||||||||||
| Debt Financial Instruments | 71,180 | 341,097 | 1,162,592 | 1,574,869 | 1,339,478 | 218,817 | 415,807 | 1,974,102 | 3,548,971 | |||||||||||||||||||||||||||||||
| Equity Instruments | 11,232 | 11,232 | 11,232 | |||||||||||||||||||||||||||||||||||||
| Derivative financial instruments for hedging purposes | 9,670 | 20,044 | 29,714 | 29,714 | ||||||||||||||||||||||||||||||||||||
| Financial assets at amortized cost | ||||||||||||||||||||||||||||||||||||||||
| Rights by resale agreements | 79,029 | 20,337 | 1,277 | 100,643 | 100,643 | |||||||||||||||||||||||||||||||||||
| Debt financial instruments (*) | 8,620 | 8,620 | 133,217 | 319,119 | 452,336 | 460,956 | ||||||||||||||||||||||||||||||||||
| Loans to Banks (**) | 186,241 | 8,838 | 204,713 | 399,792 | 399,792 | |||||||||||||||||||||||||||||||||||
| Loans to customers (**) | 5,629,789 | 2,215,757 | 7,141,898 | 14,987,444 | 7,033,442 | 4,612,946 | 12,620,482 | 24,266,870 | 39,254,314 | |||||||||||||||||||||||||||||||
| Total financial assets | 2,590,986 | 10,072,916 | 2,731,136 | 8,834,133 | 24,227,998 | 8,914,615 | 5,537,824 | 13,524,018 | 27,976,457 | 52,205,628 | ||||||||||||||||||||||||||||||
| 2025 | ||||||||||||||||||||||||||||||||||||||||
| On demand | Up to 1 month | Over 1 month and up to 3 months | Over 3 month and up to 12 months | Subtotal up to 1 year | Over 1 year and up to 3 years | Over 3 years and up to 5 years |
Over 5 years |
Subtotal over 1 year | Total | |||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||||||||||
| Transactions in the course of payment | 564,172 | 564,172 | 564,172 | |||||||||||||||||||||||||||||||||||||
| Financial liabilities held for trading at fair value through profit or loss | ||||||||||||||||||||||||||||||||||||||||
| Derivative financial instruments | 205,436 | 136,315 | 350,100 | 691,851 | 546,890 | 381,826 | 458,898 | 1,387,614 | 2,079,465 | |||||||||||||||||||||||||||||||
| Others | 203 | 309 | 512 | 512 | ||||||||||||||||||||||||||||||||||||
| Derivative financial instruments for hedging purposes | 4,363 | 53,287 | 240,167 | 297,817 | 297,817 | |||||||||||||||||||||||||||||||||||
| Financial liabilities at amortized cost | ||||||||||||||||||||||||||||||||||||||||
| Current accounts and other demand deposits | 14,791,870 | 14,791,870 | 14,791,870 | |||||||||||||||||||||||||||||||||||||
| Time deposits and saving accounts (***) | 9,119,787 | 2,863,533 | 1,765,508 | 13,748,828 | 6,467 | 793 | 631 | 7,891 | 13,756,719 | |||||||||||||||||||||||||||||||
| Obligations by repurchase agreements | 286,915 | 286,915 | 286,915 | |||||||||||||||||||||||||||||||||||||
| Borrowings from financial institutions | 64,758 | 322,064 | 773,675 | 1,160,497 | 136,254 | 136,254 | 1,296,751 | |||||||||||||||||||||||||||||||||
| Debt financial instruments issued | ||||||||||||||||||||||||||||||||||||||||
| Mortgage finance bonds | 53 | 34 | 20 | 107 | 83 | 89 | 242 | 414 | 521 | |||||||||||||||||||||||||||||||
| Bonds | 85,903 | 412,740 | 1,120,727 | 1,619,370 | 2,516,201 | 1,715,429 | 4,949,330 | 9,180,960 | 10,800,330 | |||||||||||||||||||||||||||||||
| Other financial obligations | 367,323 | 367,323 | 367,323 | |||||||||||||||||||||||||||||||||||||
| Lease liabilities | 2,217 | 4,435 | 16,917 | 23,569 | 32,855 | 10,827 | 7,092 | 50,774 | 74,343 | |||||||||||||||||||||||||||||||
| Regulatory capital financial instruments | 2,153 | 105,722 | 107,875 | 11,039 | 9,241 | 958,938 | 979,218 | 1,087,093 | ||||||||||||||||||||||||||||||||
| Total financial liabilities | 14,791,870 | 10,698,920 | 3,739,430 | 4,132,669 | 33,362,889 | 3,254,152 | 2,171,492 | 6,615,298 | 12,040,942 | 45,403,831 | ||||||||||||||||||||||||||||||
| (*) | These balances are presented without deduction of impairment, which amount to Ch$19 million. |
| (**) | These balances are presented without deduction of their related allowances, which amount to Ch$712,003 million for loans to customers and Ch$1,764 million for borrowings from financial institutions. |
| (***) | Excludes term saving accounts, which amount to Ch$405,689 million. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 42. | Maturity according to their remaining Terms of Financial Assets and Liabilities, continued: |
| 2024 | ||||||||||||||||||||||||||||||||||||||||
| On demand | Up to 1 month | Over 1 month and up to 3 months | Over 3 month and up to 12 months | Subtotal up to 1 year | Over 1 year and up to 3 years | Over 3 year and up to 5 years |
Over 5 years |
Subtotal over 1 year | Total | |||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||||
| Cash and deposits in banks | 2,699,076 | 2,699,076 | 2,699,076 | |||||||||||||||||||||||||||||||||||||
| Transactions in the course of collection | 372,456 | 372,456 | 372,456 | |||||||||||||||||||||||||||||||||||||
| Financial assets held for trading at fair value through profit or loss | ||||||||||||||||||||||||||||||||||||||||
| Derivative financial instruments | 87,403 | 120,813 | 465,718 | 673,934 | 540,872 | 405,243 | 683,304 | 1,629,419 | 2,303,353 | |||||||||||||||||||||||||||||||
| Debt financial instruments | 1,714,381 | 1,714,381 | 1,714,381 | |||||||||||||||||||||||||||||||||||||
| Others | 411,689 | 411,689 | 411,689 | |||||||||||||||||||||||||||||||||||||
| Financial assets at fair value through other comprehensive income | ||||||||||||||||||||||||||||||||||||||||
| Debt Financial Instruments | 123,164 | 250,542 | 683,008 | 1,056,714 | 196,319 | 590,462 | 244,850 | 1,031,631 | 2,088,345 | |||||||||||||||||||||||||||||||
| Equity Instruments | 9,492 | 9,492 | 9,492 | |||||||||||||||||||||||||||||||||||||
| Derivative financial instruments for hedging purposes | 4,783 | 4,783 | 25,936 | 15,741 | 27,499 | 69,176 | 73,959 | |||||||||||||||||||||||||||||||||
| Financial assets at amortized cost | ||||||||||||||||||||||||||||||||||||||||
| Rights by resale agreements | 55,295 | 31,242 | 754 | 87,291 | 87,291 | |||||||||||||||||||||||||||||||||||
| Debt financial instruments (*) | 16,833 | 16,833 | 477,895 | 131,070 | 318,311 | 927,276 | 944,109 | |||||||||||||||||||||||||||||||||
| Loans to Banks (**) | 398,512 | 57,306 | 211,885 | 667,703 | 667,703 | |||||||||||||||||||||||||||||||||||
| Loans to customers, net (**) | 5,405,475 | 2,853,497 | 7,464,859 | 15,723,831 | 6,849,850 | 4,175,945 | 12,186,670 | 23,212,465 | 38,936,296 | |||||||||||||||||||||||||||||||
| Total financial assets | 2,699,076 | 8,568,375 | 3,330,233 | 8,831,007 | 23,428,691 | 8,090,872 | 5,318,461 | 13,470,126 | 26,879,459 | 50,308,150 | ||||||||||||||||||||||||||||||
| 2024 | ||||||||||||||||||||||||||||||||||||||||
| On demand | Up to 1 month | Over 1 month and up to 3 months | Over 3 month and up to 12 months | Subtotal up to 1 year | Over 1 year and up to 3 years | Over 3 year and up to 5 years |
Over 5 years |
Subtotal over 1 year | Total | |||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||||||||||
| Transactions in the course of payment | 283,605 | 283,605 | 283,605 | |||||||||||||||||||||||||||||||||||||
| Financial liabilities held for trading at fair value through profit or loss | ||||||||||||||||||||||||||||||||||||||||
| Derivative financial instruments | 80,124 | 103,327 | 450,350 | 633,801 | 674,660 | 475,577 | 660,683 | 1,810,920 | 2,444,721 | |||||||||||||||||||||||||||||||
| Others | 580 | 580 | 410 | 410 | 990 | |||||||||||||||||||||||||||||||||||
| Derivative financial instruments for hedging purposes | 10,741 | 10,741 | 241 | 28,906 | 101,152 | 130,299 | 141,040 | |||||||||||||||||||||||||||||||||
| Financial liabilities at amortized cost | ||||||||||||||||||||||||||||||||||||||||
| Current accounts and other demand deposits | 14,630,797 | 14,630,797 | 14,630,797 | |||||||||||||||||||||||||||||||||||||
| Time deposits and saving accounts (***) | 9,205,679 | 2,636,427 | 2,073,931 | 13,916,037 | 53,594 | 452 | 547 | 54,593 | 13,970,630 | |||||||||||||||||||||||||||||||
| Obligations by repurchase agreements | 109,214 | 65 | 515 | 109,794 | 109,794 | |||||||||||||||||||||||||||||||||||
| Borrowings from financial institutions | 7,945 | 161,196 | 783,552 | 952,693 | 150,775 | 150,775 | 1,103,468 | |||||||||||||||||||||||||||||||||
| Debt financial instruments issued | ||||||||||||||||||||||||||||||||||||||||
| Mortgage finance bonds | 138 | 140 | 161 | 439 | 40 | 86 | 285 | 411 | 850 | |||||||||||||||||||||||||||||||
| Bonds | 4,451 | 134,852 | 1,033,995 | 1,173,298 | 2,577,932 | 2,043,457 | 3,894,532 | 8,515,921 | 9,689,219 | |||||||||||||||||||||||||||||||
| Other financial obligations | 284,479 | 284,479 | 284,479 | |||||||||||||||||||||||||||||||||||||
| Lease liabilities | 2,252 | 4,728 | 19,046 | 26,026 | 36,552 | 18,746 | 10,105 | 65,403 | 91,429 | |||||||||||||||||||||||||||||||
| Regulatory capital financial instruments | 1,815 | 112,095 | 113,910 | 13,514 | 11,365 | 930,090 | 954,969 | 1,068,879 | ||||||||||||||||||||||||||||||||
| Total financial liabilities | 14,630,797 | 9,980,282 | 3,040,735 | 4,484,386 | 32,136,200 | 3,507,718 | 2,578,589 | 5,597,394 | 11,683,701 | 43,819,901 | ||||||||||||||||||||||||||||||
| (*) | These balances are presented without deduction of impairment, which amounts to Ch$35 million. |
| (**) | These balances are presented without deduction of their related allowances, which amount to Ch$693,434 million for loans to customers and Ch$1,988 million for borrowings from financial institutions. |
| (***) | Excludes term saving accounts, which amount to Ch$374,593 million. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 43. | Financial and Non-Financial Assets and Liabilities by Currency: |
| As of December 31, 2025 | CLP | UF | FX Indexation | USD | GBP | EUR | CHF | JPY | CNY | Others | TOTAL | |||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||||||||
| Financial assets | 24,352,419 | 22,953,795 | 187,136 | 3,761,516 | 18,278 | 148,857 | 4,009 | 13,147 | 29,502 | 23,183 | 51,491,842 | |||||||||||||||||||||||||||||||||
| Non-financial assets | 2,076,559 | 7,822 | 1,209 | 526,132 | 21 | 955 | 68 | 2,612,766 | ||||||||||||||||||||||||||||||||||||
| Total assets | 26,428,978 | 22,961,617 | 188,345 | 4,287,648 | 18,299 | 149,812 | 4,077 | 13,147 | 29,502 | 23,183 | 54,104,608 | |||||||||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||||||||||||||
| Financial liabilities | 26,552,178 | 11,503,391 | 252 | 6,208,712 | 6,079 | 129,357 | 262,499 | 232,405 | 18,817 | 895,830 | 45,809,520 | |||||||||||||||||||||||||||||||||
| Non-financial liabilities | 1,508,458 | 9,797 | 1,687 | 84,012 | 5 | 2,573 | 571 | 12 | 3 | 123 | 1,607,241 | |||||||||||||||||||||||||||||||||
| Total liabilities | 28,060,636 | 11,513,188 | 1,939 | 6,292,724 | 6,084 | 131,930 | 263,070 | 232,417 | 18,820 | 895,953 | 47,416,761 | |||||||||||||||||||||||||||||||||
| Mismatch of financial assets and liabilities (*) | (2,199,759 | ) | 11,450,404 | 186,884 | (2,447,196 | ) | 12,199 | 19,500 | (258,490 | ) | (219,258 | ) | 10,685 | (872,647 | ) | 5,682,322 | ||||||||||||||||||||||||||||
| (*) | This value does not consider non-financial assets and liabilities and the notional values of derivative instruments, which are disclosed at fair value. |
| As of December 31, 2024 | CLP | UF | FX Indexation | USD | GBP | EUR | CHF | JPY | CNY | Others | TOTAL | |||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||||||||
| Financial assets | 21,372,789 | 22,335,846 | 171,396 | 5,307,262 | 35,762 | 280,162 | 62,903 | 18,750 | 5,462 | 22,361 | 49,612,693 | |||||||||||||||||||||||||||||||||
| Non-financial assets | 1,951,157 | 49,318 | 11,699 | 429,341 | 1,270 | 64 | 2,442,849 | |||||||||||||||||||||||||||||||||||||
| Total assets | 23,323,946 | 22,385,164 | 183,095 | 5,736,603 | 35,762 | 281,432 | 62,903 | 18,750 | 5,462 | 22,425 | 52,055,542 | |||||||||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||||||||||||||
| Financial liabilities | 25,758,219 | 11,083,785 | 176 | 5,801,348 | 6,837 | 297,367 | 170,907 | 230,051 | 845,804 | 44,194,494 | ||||||||||||||||||||||||||||||||||
| Non-financial liabilities | 1,222,116 | 6,455 | 1,252 | 122,721 | 26 | 3,375 | 2 | 34 | 171 | 1,356,152 | ||||||||||||||||||||||||||||||||||
| Total liabilities | 26,980,335 | 11,090,240 | 1,428 | 5,924,069 | 6,863 | 300,742 | 170,909 | 230,085 | 845,975 | 45,550,646 | ||||||||||||||||||||||||||||||||||
| Mismatch of financial assets and liabilities (*) | (4,385,430 | ) | 11,252,061 | 171,220 | (494,086 | ) | 28,925 | (17,205 | ) | (108,004 | ) | (211,301 | ) | 5,462 | (823,443 | ) | 5,418,199 | |||||||||||||||||||||||||||
| (*) | This value does not consider non-financial assets and liabilities and the notional values of derivative instruments, which are disclosed at fair value. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report: |
| (1) | Introduction: |
Banco de Chile seeks to maintain a risk profile that ensures the sustainable growth that is aligned with its strategic objectives, maximizing value creation and guarantee its long-term solvency. The Overall risk management takes into consideration the different business segments to which the Bank, provides services, being approached from a comprehensive and differentiated perspective.
Our risk management policies are established to identify and analyze the risks faced by the Bank, set appropriate risk limits, alerts and controls, monitor risks and compliance with limits and alerts in order to perform the necessary action plans. Through its administration policies and procedures, the Bank develops a disciplined and constructive control environment. Policies as well as risk management standards, procedures and systems are regularly reviewed, and with strict adherence to compliance with the current regulatory framework.
For such purposes, the Bank has teams with extensive experience and knowledge in each area associated with risks, ensuring comprehensive and consolidated management of such risks, including the Bank and its subsidiaries.
| (a) | Risk Management Structure |
Credit, Market and Operational Risk Management are at all levels within the Organization, with a Corporate Governance structure that recognizes the significance of the different risk areas that exist.
The Bank’s Board of Directors as the maximum authority is responsible for establishing risk policies, the Risk Appetite Framework, and the guidelines for the measurement criteria and follow up of risks. Also, it approves the risk limits and contingency plans for each of the risks. Moreover, it approves the following policies: Credit risk policy, policy for complex products and services, operational risk policy, business continuation policy, outsourcing policy, market risk policy and liquidity risk policy. Likewise, it approves the provision models, Additional Allowances Policy and pronounces annually on the adequacy of allowances. Additionally, it approves the capital management policy for the monitoring, control, administration and the management of the Bank´s capital. Also, it confirms the strategies, functional structure and comprehensive management model of Operational Risk and guarantees the consistency of this model with the Bank’s strategy and proper implementation of the model within the organization. Accordingly, it has approved the risk management policy of the model together with the development framework, validates and follows up on the models. Furthermore, it establishes the Subsidiary Risk Control Policy, describing the supervision scheme that the Bank applies to the relevant subsidiaries to control the risks that affect them. Management is responsible both for the establishment of standards and associated procedures as well as for the control and compliance with that agreed by the Board of Directors, ensuring that there is consistency between the criteria applied by the Bank and its subsidiaries, maintaining strict coordination at the corporate level and informing the Board of Directors at the defined instances.
The Bank’s Corporate Governance considers the active involvement of the Board, acting directly or through different committees made up of Directors and members of the Senior Management. It is regularly informed and becomes aware of the evolution of the different risk management areas, being involved through its Finance, International and Financial Risk, Credit, Portfolio Risk Committee, Higher Committee on Operational Risk and Capital Management, in which the status of credit, market and operational risks and the Bank’s capital management are reviewed.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (1) | Introduction, continued: |
| (a) | Risk Management Structure, continued: |
In addition to the Directors’ Committees, the Bank’s Management has the Technical Committee for the Supervision of Internal Models, the Model Risk Management Committee and the Operational Risk Committee, which review specific matters.
The sections below describe the different Board of Directors’ and Management’s committees mentioned above.
Risk Management is performed by the Corporate Risk Division, which by having highly experienced and specialized teams, together with a sound regulatory framework, allows for optimal and effective management of the matters it addresses.
The Corporate Risk Division contributes to providing effective governance to the Corporation’s main risks, with a focus on optimizing the risk-return relationship, ensuring business continuity and generating a robust risk culture, identifying potential losses derived from the non-compliance of counterparties, movements in market factors or the lack of adequacy of processes, people or systems, comprehensively contributing to capital management.
Likewise, it continually manages risk knowledge from a comprehensive approach, in order to contribute to the business anticipating threats that may damage the solvency and quality of the portfolio, promoting a unique risk culture towards the Corporation through training and permanent training.
Within this Division, the Bank’s risk functions are integrated as follows, ensuring, at the same time, the correct segregation of duties and independence:
| - | Market Risk: Is responsible for developing the function of measuring, limiting, controlling and reporting on market risk, along with defining valuation standards and managing the Bank’s assets and liabilities. Moreover, this Management is responsible for taking care of the compliance of market risk management policies, liquidity management, investment in debt instruments approved by the Board of Directors and to communicate promptly the status of market risks in detail accordingly. |
| - | Wholesale Credit Risk Admission: is responsible for managing, resolving and controlling the approval process of businesses related to the Wholesale segment portfolio, including specific sectors and products for this portfolio, ensuring consistency, compliance and consistency of policies. for credit risk both in the Bank and in its subsidiaries. |
| - | Retail Admission, Regulations and Risk Transformation: Responsible for defining the credit risk management framework, both for reactive and proactive retail origination, within the defined regulatory scope and risk appetite established by the Bank. Also, the maintenance and implementation of all credit risk strategies associated with the automatic evaluation. |
The regulatory body, manages credit risk, policies, standards and procedures of credit risk, adapting the established requirements and processes, for all segments on a cross-cutting manner in the Bank. Likewise, it conducts reviews of the quality of the credit process applied to retail banks and the continuous training of executives.
| - | Special Asset Management: is responsible for the collection of loans from all of the Bank’s customer segments, with differentiated management in accordance with the institutional policies. |
In addition, it is responsible for managing the sale of assets recovered by the Bank, arising from credit recovery processes.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (1) | Introduction, continued: |
| (a) | Risk Management Structure, continued: |
| - | Risk Management Monitoring, Reporting and Control: is responsible for managing and reporting credit risk, especially through monitoring the main portfolio indicators and in-depth analysis of situations and scenarios of special attention, timely detecting issues that may affect certain products, debtors or sectors, with the aim of minimizing the risk assumed and anticipating situations that could lead to loan losses. |
Likewise, it provides information to the different governance bodies and areas involved in the decision-making process and contributes to providing effective governance to the Corporate Risk Division projects, ensuring regulatory compliance and the proper performance of the projects. Themselves, as well as being responsible for the management control of the Corporate Risk Division.
| - | Risk Models: is responsible for developing, maintaining and updating credit risk models, whether for regulatory or management uses, in accordance with local and international regulations, determining the functional specifications and the most appropriate statistical techniques for the development of the required models. These models are involved in the measurement and management of model risk performed by the Model Risk and Internal Control Management, and presented to the relevant government bodies, such as the Technical Committee for the Supervision of Internal Models, the Portfolio Risk Committee or the Board of Directors, as appropriate. |
Additionally, this Area is responsible for managing the process of calculating allowances for credit risk, ensuring the correct perfomance of the processes and analysis of the results obtained.
| - | Model Risk and Internal Control: Is responsible for managing the risks associated with models and processes, and for such purpose, is supported by the functions of model validation and monitoring, model risk management, and internal control. |
It conducts an independent review, evaluating the quality of the data, modeling techniques, compliance with regulatory provisions, its implementation within the institution and existing documentation. It also tracks the performance of the models and monitors each stage of the life cycle of the models within its scope, with the final purpose of generating mechanisms that allow it to measure and manage the level of model risk to which the Bank is exposed.
Finally, it is responsible for conducting an independent assessment of the internal control environment. For this purpose it has procedures that use the COSO 2013 (Committee of Sponsoring Organizations of the Treadway Commission) framework as a reference, which comprises five components: control environment, risk assessment, control activities, information and communication, and monitoring. This is carried out within the context of complying with local and international regulatory requirements, through the Updated Compilation of Regulations issued by the Financial Market Commission and Section 404 of the Sarbanes-Oxley Act, respectively.
| - | Global Control: Address the operational risk environment and continuity of the business. This management is responsible for managing and supervising the application of policies, standards and procedures in each of the areas within the Bank and Subsidiaries. In relation to the area of Operational Risk, it is in charge for guaranteeing the identification and efficient management of operational risks and promoting a risk culture to prevent financial losses and improve the quality of processes, proposing continuous improvements to risk management, aligned with regulatory requirements of Basel III and business objectives. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (1) | Introduction, continued: |
| (a) | Risk Management Structure, continued: |
As part of the structure, the Business Continuity Management is responsible for the management, control, and administration of recovery strategies in contingency situations. In addition, it ensures the Bank’s operational resilience by maintaining the crisis-management governance model, guaranteeing the continuity of critical services and operations, particularly those related to critical payment products and services. This model is strengthened through a comprehensive resilience framework that includes ongoing training programs, plan updates, and controlled testing to validate the effectiveness of the strategies against disruptive events that may impact the Bank, thereby reinforcing its capacity to respond safely and efficiently. Additionally, the structure includes the role and responsibilities of the Information Security Officer (ISO), who operates independently from the Cybersecurity Division. The ISO’s function is to design and implement controls by monitoring the activities carried out by the organizational units responsible for information security, cybersecurity, and technology risk within the Bank and its subsidiaries.
Additionally, the Bank has the Cybersecurity Division, which is responsible for defining, implementing and reporting the progress of the Strategic Cybersecurity Plan in line with the Bank’s business strategy, with one of its main focuses being to protect internal information, of its clients and collaborators.
This Division consists of the Governance and Identity Management, the Cyber Defense Management and the Technological Risk and Cyber Intelligence Management. The Cybersecurity Management and Subsidiaries Control Department is also part of the division, as a control unit. Section 5 of this Note describes the responsibilities of the indicated Managements.
Bank’s Board of Directors’ and Management’s Committees
| (i) | Finance, International and Financial Risk Committee |
In general terms, the objectives of this committee are to monitor and continuously review the liquidity status and, trends in the most important financial positions, as well as the associated results, and the price and liquidity risks that will be generated. Certain of its specific functions include, the review of the proposal to the Board of Directors of the Risk Appetite Framework (RAF), the Financing Plan and the structure of limits and alerts for price and liquidity risks, reviewing and approving the Comprehensive Risk Measurement (CRM) for subsequent due review in the Capital Management Committee and approval by the Board of Directors, the design of policies and procedures related to the establishment of limits and alerts for price risk and liquidity risk; reviewing the evolution of financial positions and market risks; monitoring limit excesses and alert activations; ensuring adequate identification of risk factors in financial positions; ensuring that the price and liquidity risk management guidelines in the Bank’s subsidiaries are consistent with those of the Bank, and that these are reflected in its own policies and procedures.
| (ii) | Credit Committees |
The credit approval process is performed mainly through several credit committees, which are composed of qualified professionals and with the sufficient powers to make the decisions required.
Each committee defines the terms and conditions under which the Bank accepts counterparty risks, and the Corporate Risk Division participates independently and autonomously of the commercial areas. They are constituted according to the commercial segments and the amounts to be approved and have different meeting periodicities.
Within the Bank´s risk management structure, the maximum approval instance is the Director´s Credit Committee. Its functions are to resolve all credit transactions associated with customers and economic groups with approved lines of credit in excess of UF 750,000, and to approve all credit transactions where the Bank’s internal regulations require approval from this Committee, except for any special powers delegated by the Board of Directors to Management.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (1) | Introduction, continued: |
| (a) | Risk Management Structure, continued: |
| (iii) | Portfolio Risk Committee |
Among other duties, the Portfolio Risk Committee must understand the composition, concentration and risks attached to the bank’s loan portfolio, from a global, sectoral and business unit perspective, review and approve the comprehensive risk measurement (CRM) and the Credit Risk Appetite Framework (RAF) in the area of credit risk; It must review the main debtors, their delinquency, past-due portfolio and impairment indicators, together with the write-offs and loan portfolio allowances for each segment. It must propose differentiated management strategies, as well as analyzing and agreeing on the and analyze credit policy proposals that will be approved by the Board of directors. This committee also reviews and confirms the approvals of management models and methodologies Also, this committee is responsible for reviewing and ratifying the approvals of management models and methodologies previously conducted by the Technical Committee for the Supervision of Internal Models, as well as proposing the regulatory models and methodologies for final approval by the Board of Directors.
| (iv) | Collection Committee |
The purpose of the Collection Committee is fundamentally to ensure the ongoing and proper monitoring of credit collection activities. In particular, it focuses on reviewing the results and evolution of the amounts assigned to collection across the different delinquency stages of each product, as well as the productivity and recovery performance of the various banking segments
| (v) | Senior Operational Risk Committee |
The Senior Operational Risk Committee makes any necessary changes to the processes, controls and information systems that support the Bank’s transactions, to mitigate operational risks, and assure that areas can appropriately manage and control these risks.
This Committee has functions dedicated to supervising appropriate operational risk management at the bank and its subsidiaries, and for implementing the policies, standards and methods associated with the bank’s comprehensive operational risk management model. It plans initiatives to develop it and publishes them throughout the bank. It promotes a culture of operational risk management within the bank and its subsidiaries; review and approve the comprehensive risk measurement regarding Operational Risk. It approves the bank’s operational risk appetite framework; ensures compliance with the current regulatory framework, in matters that are limited to Operational Risk; become aware of the main frauds, incidents, events and their root causes, impacts and corrective measures accordingly; ensure the long-term solvency of the Organization (business continuity plans, information security and cybersecurity, controls, among others), avoiding risk factors that may jeopardize the continuity of the Bank. To decide about new products and services, and to verify the consistency of the operational risk management policies, business continuation, information security and cyber security across the bank’s subsidiaries, monitors their compliance, and reviews operational risk management at subsidiaries; become aware of the level of risk to which the bank is exposed in its outsourced services, sanction the selection of the model to perform stress tests and scenario selection methodologies and evaluate the results, among others.
| (vi) | Capital Management Committee |
The main purpose of this committee is to assess, monitor and review capital adequacy in accordance with the principles in the bank’s capital management policy and its risk framework, to ensure that capital resources are adequately managed, the CMF’s principles are respected, and the bank’s medium-term sustainability.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (1) | Introduction, continued: |
| (a) | Risk Management Structure, continued: |
| (vii) | Technical Committee for the Supervision of Internal Models |
Among other functions, this committee must ensure compliance with the main guidelines to be used for the construction of models; analyze the adopted criteria and review and approve methodologies associated with non-regulatory models, which must be submitted to the Portfolio Risk Committee for consideration, for final confirmation; For regulatory models, this Committee is limited to its review, leaving approval in the hands of the Portfolio Risk Committee and subsequently the Board of Directors. He is also in charge of ensuring compliance with the model monitoring guidelines, which are also approved by the Board of Directors.
| (viii) | Model Risk Management Committee |
Its main function is to establish and oversee the institution-wide model risk management framework. Among other responsibilities, this committee reviews and discusses the identification and assessment of model risks based on aggregated results, provides guidelines and verifies the consistency of policies with subsidiaries, ensures the updating of the institutional inventory of models and methodologies, reviews the status of observations and action plans, and submits the Model Risk Management Policy to the Board of Directors for review and approval.
| (b) | Internal Audit |
The risk management processes of the entire Bank are permanently audited by the Internal Audit Area, which examines the sufficiency of the procedures and their compliance. Internal Audit discusses the results of all evaluations with Management and reports its findings and recommendations to the Board of Directors through the Audit Committee.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (1) | Introduction, continued: |
| (c) | Measurement Methodology |
Regarding to Credit Risk, loan loss provision and write offs are the fundamental metrics of the credit quality of our portfolio.
Banco de Chile permanently evaluates its loan portfolio, timely recognizing its risks. The bank has a set of guidelines related to modelling techniques for decision model development (scoring, campaigns and collection models), expected credit losses and stress testing. These guidelines and the resulting models are approved by the Board of Directors.
As a result of this evaluation, on both individual and group portfolios, expected credit losses are determined.
The individual portfolio encompasses companies that due to their size, complexity or indebtedness, require a more detailed and a case-by-case analysis. Each obligor is assigned one of 16 risk categories (according to qualitative criteria based on the Bank’s internal credit rating system and a scale proposed by the regulator), in order to establish its expected credit losses in a timely and appropriate manner. The review of these classifications is carried out permanently considering the financial situation, payment behavior and the environment of each client.
The group portfolio encompasses natural persons and smaller companies. These assessments are carried out monthly through statistical models that estimate the appropriate level of expected credit losses. The consistency of these models is assessed through an independent validation and, subsequently, through the model monitoring process (i.e. retrospective tests) that compare actual vs expected losses.
In 2025, the Bank made a few adjustments to the ECL models, more precisely to their PD forecasting (forward-looking) model for the individual portfolio, including more recent macroeconomic data. As a result of that, these adjustments resulted in an non-material variation of our ECL estimates.
The monitoring and control of risks are carried through a set of limits established by the Board of Directors. These limits reflect the Bank’s business and market strategy, as well as the level of risk that it is willing to accept.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (2) | Credit Risk |
Credit risk considers the likelihood that the counterparty in the credit operation will not be able to fulfill its contractual obligation due to inability or financial insolvency, and this leads to a potential credit loss.
The Bank seeks an adequate risk-return relation, and an appropriate balance of the risks assumed, through permanent credit risk management considering the processes of admission, monitoring and recovery of the loans granted. It establishes the risk management framework for the different business segments to which it provides services, responding to regulatory demands and commercial dynamism, being part of the digital transformation and contributing from a risk perspective to the various businesses addressed, through a vision of the portfolio that allows managing, resolving and controlling the business approval and monitoring process in an efficient and proactive manner.
The Bank’s credit risk disclosures presented in this note are prepared using internal risk management metrics, including gross exposure and exposure at default (EAD). The gross carrying amounts exposed to credit risk are disclosed in Note 11 and Note 23.
In the business segments, the application of additional management processes is taken into consideration, to the extent required, for those financing requests that that will have a greater exposure to environmental and/or social risks.
The Bank integrates the socio-environmental criteria in its evaluations for the granting of financing destined to the development of projects, whether nation wide or regional, and that can generate an impact of this type, where they are executed. For the financing of projects, projects must have the corresponding permits, authorizations, patents and studies, according to the impact they generate. In addition, the Bank has specialized units for proving services to large customers, through which the financing of project development is concentrated, including those of Public Works concessions that contemplate the construction of infrastructure, mining, electrical and real estate developments that can generate an environmental impact.
During 2025, the Bank continues to identify risks associated with climate change, producing heat maps for the individual portfolio related to exposure to Physical Risks (at the level of geographic areas within the country) and Transition Risks (at the level of economic sectors).
Credit policies and processes materialize in the following management principles, which are addressed with a specialized approach according to the characteristics of the different markets and segments to which services are provided, recognizing the singularities of each one of them:
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (2) | Credit Risk, continued: |
| 1. | Apply a rigorous evaluation in the admission process, based on established credit policies, standards and procedures, together with the availability of sufficient and accurate information. Accordingly, the Bank needs to analyze the generation of flows and solvency of the customer to meet its payment commitments and, when the characteristics of the operation merit it, must constitute adequate guarantees must be constituted that allow mitigating the risk assumed with the customer. |
| 2. | Have permanent and robust portfolio tracking processes, through procedures and systems that alert both the potential indications of impairment of customers, with respect to the original conditions, and also the possible business opportunities with those that present a better payments quality and behavior. |
| 3. | Develop credit risk modeling guidelines, in regulatory aspects and management, for efficient decision-making at different stages of the credit process. |
| 4. | Have a collection structure with timely, agile and effective processes that allow management to be performed in accordance with the different types of customers and the types of breaches that arise, always in strict adherence to the regulatory framework and the Bank’s reputational definitions. |
| 5. | Maintain an efficient administration in the organization of teams, tools and availability of information that allow the Bank to have optimal credit risk management. |
Based on these management principles, the Corporate Risk Division contributes to the business and anticipates threats that may affect the solvency and quality of the portfolio, delivering timely responses to customers, maintaining the solid foundations that characterize the Bank’s portfolio in its different segments. and products.
The credit risk management process consists of the stages of Admission, Monitoring and Recovery or Collection for the retail and wholesale business segments to which the Bank provides services.
| (a) | Admission: |
In the retail segments, admission management performed mainly through a risk evaluation that uses scoring tools and credit attribution to approve each transaction. These evaluations, for natural persons without a business line and clients in the SME segment, take into consideration the level of indebtedness, the payment capacity and the maximum acceptable exposure for the customer, through information on payment behavior, indebtedness in the financial system and business and financial information, as applicable.
Additionally, the Bank has proactive admission processes for a diverse portfolio of customers. These consist of mass evaluation of customers through statistical models of eligibility and payment capacity, generating credit offers aligned with the strategies defined. This results in having preapproved loan offers available through multiple channels taking into consideration the business plan and the relation between risk and return.
Also, for the Wholesale segments, the management of admission is conducted through an individual analysis of the customers, also considering the relationship with the rest of the entities, if applicable. This analysis takes into consideration among other factors the capacity to generate cash, the financial position with an emphasis on the equity solvency, the levels of exposure, variables of the industry, evaluation of the shareholders and the Management, the specific aspects of the operations like the structure and term of the financing, products and guarantees. The aforementioned evaluation is supported by a rating model that allows higher uniformity in the analysis of the customer and its group.
There are also specialized areas of segments that by their nature need the knowledge of an expert, such as real estate, construction, agriculture, finance, international, among others. These experts support the preparation of the transactions having certain tools designed to meet the needs of the specific characteristics of the businesses and their related risks.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (2) | Credit Risk, continued: |
| (b) | Follow Up: |
From granting a loan until its full extinction, it is necessary to have a follow up of the behavior and financial position of the debtor with an emphasis on its payment capacity, as the situation of the customer and associated risk change over time. Portfolio monitoring allows the Bank to act proactively if indications of overall impairment are noted or if the debtor’s ability to meet its obligations is affected.
In the follow up function, methodologies and tools for the different segments in which the bank operates, have been developed, which allow proper management of its credit portfolio.
In the retail segments, the control and follow up concentrate on monitoring the main indicators of the portfolio and analysis of the groups, reported in the management reports, generating significant information for the decision making process in different instances defined. In addition, special follow ups are generated according to the significant events in the environment.
In the wholesale segments, a permanent follow up is performed through management tools at individual level taking into consideration the business segments and economic sectors. Through this process the alarms are generated that guarantee the proper and timely recognition of the risk in the individual portfolio and the special conditions established in the admission stage are monitored , including financial covenants, coverage of certain guarantees and conditions imposed at the time of the approval.
Additionally, in the Admission area, simultaneous follow up tasks are perform that allow the Bank to monitor the evolution of the transactions from the beginning until recovery, with the purpose of making sure that the portfolio’s risks are properly and timely, and proactively managing the cases posing higher risks.
| (c) | Recovery or collection: |
The Bank has specific regulations related to customer collection and normalization, which ensure the quality of the portfolio in accordance with credit policies, and the desired risk appetite framework and strict adherence to the current regulatory framework. Through collection management, customers with temporary cash flow problems are favored, debt normalization plans are proposed for viable customers, so that it is possible to maintain the relationship in the long term once their situation is regularized. The recovery of assets at risk is maximized and the necessary collection actions are conducted, in a timely manner, to ensure the recovery of debts or reduce the potential loss.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (2) | Credit Risk, continued: |
| (c) | Recovery or collection, continued: |
In the retail segments, the Bank defines refinancing criteria through the establishment of predefined renegotiation guidelines to resolve the debt issues of viable customers with payment intentions, maintaining an adequate risk-return ratio, along with the incorporation of robust tools for differentiated collection management.
In the wholesale segments, when detecting customers that show indications of impairment or default of any type or condition, the commercial area to which the customers belongs, together with the Corporate Risk Division, establish action plans for their regularization. For cases of higher complexity where specialized management is required, the Special Asset Management, area is directly in charge of collection management, establishing action plans and negotiations based on the characteristics of each customer.
| (d) | Derivative Transactions |
The Bank estimates the Pre-Settlement Exposure (PSE), used for credit risk management purposes, through simulations of market factors that allow forecasting the potential evolution of the economic value (CMTM) for all derivatives. The PSE corresponds to the value that a transaction could reach, in favor of the Bank, under scenarios of market volatility and with a 95% confidence level.
PSE is calculated daily for each counterparty, updating volatilities, correlations, and the parameters used in the simulation models, in order to keep market conditions as up to date as possible. Each simulation incorporates a full valuation of the transactions at every point in time.
A portfolio approach is taken into account when computing exposures of several transactions executed with a single counterparty.
Credit mitigating conditions for derivative transactions are commonly used in the local financial market. Financial institutions may use early termination clauses, netting arrangements, among others, provided the corresponding contractual documentation has been duly executed.
For counterparties residing abroad (mostly global banks), transactions are documented under ISDA Master Agreements and CSA, where netting and cash collateral above agreed threshold levels constitute the typical credit mitigation schemes.
Collateral agreements have been requested by certain banks for inter-banking transactions within other financial institutions, but its effective application under Chilean Law make advisable not to include it in the exposure measurement.
This metric is used for measuring, limiting, controlling and reporting credit exposures by counterparty.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (2) | Credit Risk, continued: |
| (e) | Portfolio Concentration: |
The maximum exposure to credit risk, by customer or counterparty, without taking into account guarantees or other credit enhancements as of December 31, 2025 and 2024, does not exceed 10% of the Bank’s effective equity.
The tables below show credit risk exposure per balance sheet item, including derivatives, detailed by both geographic region and industry sector as of December 31, 2025:
| Chile | United States | England | Brazil | Others | Total | |||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||
| Financial assets | ||||||||||||||||||||||||
| Cash and deposits in banks | 2,256,651 | 279,035 | 7,971 | 8 | 47,321 | 2,590,986 | ||||||||||||||||||
| Financial assets held for trading at fair value through profit or loss | ||||||||||||||||||||||||
| Derivative financial instruments | ||||||||||||||||||||||||
| Forwards (*) | 220,871 | 9,347 | 73,114 | 75,651 | 378,983 | |||||||||||||||||||
| Swaps (**) | 683,270 | 118,530 | 575,343 | 111,667 | 1,488,810 | |||||||||||||||||||
| Call options | 332 | 332 | ||||||||||||||||||||||
| Put options | 2,515 | 2,515 | ||||||||||||||||||||||
| Futures | ||||||||||||||||||||||||
| Subtotal | 906,988 | 127,877 | 648,457 | 187,318 | 1,870,640 | |||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||||||
| From the Chilean Government and Central Bank | 2,798,329 | 2,798,329 | ||||||||||||||||||||||
| Other debt financial instruments issued in Chile | 277,354 | 277,354 | ||||||||||||||||||||||
| Financial debt instruments issued Abroad | 46,019 | 46,019 | ||||||||||||||||||||||
| Subtotal | 3,075,683 | 46,019 | 3,121,702 | |||||||||||||||||||||
| Others financial instruments | ||||||||||||||||||||||||
| Investments in mutual funds | 400,222 | 400,222 | ||||||||||||||||||||||
| Equity instruments | 619 | 619 | ||||||||||||||||||||||
| Others | 616 | 802 | 1,418 | |||||||||||||||||||||
| Subtotal | 401,457 | 802 | 402,259 | |||||||||||||||||||||
| Financial assets at fair value through other comprehensive income | ||||||||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||||||
| From the Chilean Government and Central Bank | 1,174,306 | 1,174,306 | ||||||||||||||||||||||
| Other debt financial instruments issued in Chile | 2,338,926 | 2,338,926 | ||||||||||||||||||||||
| Financial debt instruments issued Abroad | 35,739 | 35,739 | ||||||||||||||||||||||
| Subtotal | 3,513,232 | 35,739 | 3,548,971 | |||||||||||||||||||||
| Equity Instruments | ||||||||||||||||||||||||
| Equity instruments issued in Chile | 8,744 | 8,744 | ||||||||||||||||||||||
| Equity instruments issued by foreign institutions | 2,488 | 2,488 | ||||||||||||||||||||||
| Subtotal | 8,744 | 2,488 | 11,232 | |||||||||||||||||||||
| Derivative financial instruments for hedging purposes | ||||||||||||||||||||||||
| Forwards | ||||||||||||||||||||||||
| Swaps | 7,130 | 22,584 | 29,714 | |||||||||||||||||||||
| Call Options | ||||||||||||||||||||||||
| Put Options | ||||||||||||||||||||||||
| Futures | ||||||||||||||||||||||||
| Subtotal | 7,130 | 22,584 | 29,714 | |||||||||||||||||||||
| Financial assets at amortized cost | ||||||||||||||||||||||||
| Rights by resale agreements | 100,643 | 100,643 | ||||||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||||||
| From the Chilean Government and Central Bank | 460,956 | 460,956 | ||||||||||||||||||||||
| Subtotal | 460,956 | 460,956 | ||||||||||||||||||||||
| Loans to Banks | ||||||||||||||||||||||||
| Central Bank of Chile | ||||||||||||||||||||||||
| Domestic banks | ||||||||||||||||||||||||
| Foreign banks (***) | 5,024 | 204,397 | 190,371 | 399,792 | ||||||||||||||||||||
| Subtotal | 5,024 | 204,397 | 190,371 | 399,792 | ||||||||||||||||||||
| Loans to customers | ||||||||||||||||||||||||
| Commercial loans | 19,509,696 | 39,851 | 19,549,547 | |||||||||||||||||||||
| Residential mortgage loans | 13,934,469 | 13,934,469 | ||||||||||||||||||||||
| Consumer loans | 5,770,298 | 5,770,298 | ||||||||||||||||||||||
| Subtotal | 39,214,463 | 39,851 | 39,254,314 | |||||||||||||||||||||
| (*) | Others includes France of Ch$70,734 million, Switzerland of Ch$4,917million. |
| (**) | Others includes France of Ch$38,116 million, Spain of Ch$26,711 million and Canada of Ch$46,840 million. |
| (***) | Others includes China of Ch$122,586 million, South Korea of Ch$6,794, Peru of Ch$473 million, Netherlands of Ch$36,303 million, Singapore of Ch$21,658 million and India of Ch$2,557 million. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (2) | Credit Risk, continued: |
| (e) | Portfolio Concentration, continued: |
| Central Bank of Chile | Government | Retail (Individuals) | Financial Services | Trade | Manufacturing | Mining | Electricity, Gas and Water | Agriculture and Livestock | Fishing |
Transportation and Telecom |
Construction | Services | Others | Total | ||||||||||||||||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||||||||||||||||||||||||||
| Cash and deposits in banks | 1,347,525 | 1,243,461 | 2,590,986 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial assets held for trading at fair value through profit or loss | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative financial instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forwards | 337,437 | 13,248 | 6,864 | 1,297 | 586 | 1,437 | 8,506 | 5,667 | 3,941 | 378,983 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Swaps | 8 | 1,412,893 | 2,596 | 3,106 | 17,419 | 4,405 | 33 | 34,024 | 2,654 | 11,672 | 1,488,810 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Call Options | 58 | 204 | 13 | 57 | 332 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Put Options | 425 | 1,866 | 199 | 16 | 8 | 1 | 2,515 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Futures | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 8 | 1,750,813 | 17,914 | 10,182 | 1,297 | 18,005 | 5,899 | 49 | 42,530 | 8,329 | 15,614 | 1,870,640 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| From the Chilean Government and Central Bank | 2,388,127 | 410,202 | 2,798,329 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other debt financial instruments issued in Chile | 277,354 | 277,354 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial debt instruments issued Abroad | 46,019 | 46,019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 2,388,127 | 456,221 | 277,354 | 3,121,702 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Others financial instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments in mutual funds | 400,222 | 400,222 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity instruments | 619 | 619 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Others | 1,418 | 1,418 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 402,259 | 402,259 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial assets at fair value through Other Comprehensive Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| From the Chilean Government and Central Bank | 1,174,306 | 1,174,306 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other debt financial instruments issued in Chile | 2,254,319 | 6,658 | 11,727 | 38,011 | 28,211 | 2,338,926 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial debt instruments issued Abroad | 35,739 | 35,739 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 1,174,306 | 2,290,058 | 6,658 | 11,727 | 38,011 | 28,211 | 3,548,971 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity Instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity instruments issued in Chile | 8,744 | 8,744 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity instruments issued by foreign institutions | 2,488 | 2,488 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 11,232 | 11,232 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative financial instruments for hedging purposes | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forwards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Swaps | 29,714 | 29,714 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Call Options | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Put Options | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Futures | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 29,714 | 29,714 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial assets at amortized cost (*) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rights by resale agreements | 98,266 | 2,377 | 100,643 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| From the Chilean Government and Central Bank | 460,956 | 460,956 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 460,956 | 460,956 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans to Banks | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Central Bank of Chile | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Domestic banks | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign banks | 399,792 | 399,792 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 399,792 | 399,792 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (*) | Economic activity of Loans and accounts receivable from customers disclosed in Note No. 11 e). |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (2) | Credit Risk, continued: |
| (e) | Portfolio Concentration, continued: |
The tables below show credit risk exposure per balance sheet item, including derivatives, detailed by both geographic region and industry sector as of December 31, 2024:
| Chile | United States | England | Brazil | Others | Total | |||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||
| Financial Assets | ||||||||||||||||||||||||
| Cash and deposits in banks | 1,928,373 | 652,953 | 20,508 | 8 | 97,234 | 2,699,076 | ||||||||||||||||||
| Financial assets held for trading at fair value through profit or loss | ||||||||||||||||||||||||
| Derivative financial instruments | ||||||||||||||||||||||||
| Forwards (*) | 161,046 | 4,215 | 30,380 | 32,029 | 227,670 | |||||||||||||||||||
| Swaps (**) | 927,824 | 57,428 | 917,837 | 167,392 | 2,070,481 | |||||||||||||||||||
| Call Options | 3,937 | 1,012 | 4,949 | |||||||||||||||||||||
| Put Options | 250 | 3 | 253 | |||||||||||||||||||||
| Futures | ||||||||||||||||||||||||
| Subtotal | 1,093,057 | 61,643 | 949,232 | 199,421 | 2,303,353 | |||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||||||
| From the Chilean Government and Central Bank | 1,495,457 | 1,495,457 | ||||||||||||||||||||||
| Other debt financial instruments issued in Chile | 217,948 | 217,948 | ||||||||||||||||||||||
| Financial debt instruments issued Abroad | 976 | 976 | ||||||||||||||||||||||
| Subtotal | 1,713,405 | 976 | 1,714,381 | |||||||||||||||||||||
| Others financial instruments | ||||||||||||||||||||||||
| Investments in mutual funds | 408,121 | 408,121 | ||||||||||||||||||||||
| Equity instruments | 1,039 | 1,039 | ||||||||||||||||||||||
| Others | 1,930 | 599 | 2,529 | |||||||||||||||||||||
| Subtotal | 411,090 | 599 | 411,689 | |||||||||||||||||||||
| Financial assets at fair value through other comprehensive income | ||||||||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||||||
| From the Chilean Government and Central Bank | 660,777 | 660,777 | ||||||||||||||||||||||
| Other debt financial instruments issued in Chile | 1,375,630 | 1,375,630 | ||||||||||||||||||||||
| Financial debt instruments issued Abroad | 51,938 | 51,938 | ||||||||||||||||||||||
| Subtotal | 2,036,407 | 51,938 | 2,088,345 | |||||||||||||||||||||
| Equity Instruments | ||||||||||||||||||||||||
| Equity instruments issued in Chile | 7,277 | 7,277 | ||||||||||||||||||||||
| Equity instruments issued by foreign institutions | 2,215 | 2,215 | ||||||||||||||||||||||
| Subtotal | 7,277 | 2,215 | 9,492 | |||||||||||||||||||||
| Derivative financial instruments for hedging purposes | ||||||||||||||||||||||||
| Forwards | ||||||||||||||||||||||||
| Swaps | 28,599 | 40,794 | 4,566 | 73,959 | ||||||||||||||||||||
| Call Options | ||||||||||||||||||||||||
| Put Options | ||||||||||||||||||||||||
| Futures | ||||||||||||||||||||||||
| Subtotal | 28,599 | 40,794 | 4,566 | 73,959 | ||||||||||||||||||||
| Financial assets at amortized cost | ||||||||||||||||||||||||
| Rights by resale agreements | 87,291 | 87,291 | ||||||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||||||
| From the Chilean Government and Central Bank | 944,109 | 944,109 | ||||||||||||||||||||||
| Subtotal | 944,109 | 944,109 | ||||||||||||||||||||||
| Loans to Banks | ||||||||||||||||||||||||
| Central Bank of Chile | ||||||||||||||||||||||||
| Domestic banks | 300,042 | 300,042 | ||||||||||||||||||||||
| Foreign Banks (***) | 269,191 | 98,470 | 367,661 | |||||||||||||||||||||
| Subtotal | 300,042 | 269,191 | 98,470 | 667,703 | ||||||||||||||||||||
| Loans to customers, net | ||||||||||||||||||||||||
| Commercial loans | 20,028,110 | 119,870 | 20,147,980 | |||||||||||||||||||||
| Residential mortgage loans | 13,233,327 | 13,233,327 | ||||||||||||||||||||||
| Consumer loans | 5,554,989 | 5,554,989 | ||||||||||||||||||||||
| Subtotal | 38,816,426 | 119,870 | 38,936,296 | |||||||||||||||||||||
| (*) | Others includes France of Ch$28,892 million, Spain of Ch$2,313 million, Switzerland of Ch$765 million and Belgium of Ch$59 million. |
| (**) | Others includes France of Ch$43,194 million, Spain of Ch$31,437 million and Canada of Ch$92,761 million. |
| (***) | Others includes China of Ch$32,260 million, Netherlands of Ch$26,931 million, Switzerland of Ch$24,665 million and Singapore of Ch$14,614 million. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (2) | Credit Risk, continued: |
| (e) | Portfolio Concentration, continued: |
| Central Bank of Chile | Government | Retail (Individuals) | Financial Services | Trade | Manufacturing | Mining | Electricity, Gas and Water | Agriculture and Livestock | Fishing |
Transportation and Telecom |
Construction | Services | Others | Total | ||||||||||||||||||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||||||||||||||||||||||||||
| Cash and deposits in banks | 1,036,476 | 1,662,600 | 2,699,076 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial assets held for trading at fair value through profit or loss | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative financial instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forwards | 199,429 | 3,890 | 13,094 | 200 | 2,394 | 5,024 | 315 | 1,183 | 638 | 1,503 | 227,670 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Swaps | 1,972,003 | 1,079 | 7,970 | 13,947 | 23,613 | 1,756 | 37,459 | 7,758 | 4,896 | 2,070,481 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Call Options | 1,182 | 1,036 | 1,159 | 1,483 | 76 | 13 | 4,949 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Put Options | 90 | 137 | 26 | 253 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Futures | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 2,172,704 | 6,142 | 22,249 | 200 | 16,341 | 30,120 | 2,071 | 38,718 | 8,396 | 6,412 | 2,303,353 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| From the Chilean Government and Central Bank | 1,217,317 | 278,140 | 1,495,457 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other debt financial instruments issued in Chile | 217,948 | 217,948 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial debt instruments issued Abroad | 976 | 976 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 1,217,317 | 278,140 | 218,924 | 1,714,381 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Others financial instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments in mutual funds | 408,121 | 408,121 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity instruments | 1,039 | 1,039 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Others | 2,529 | 2,529 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 411,689 | 411,689 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial assets at fair value through Other Comprehensive Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Financial Instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| From the Chilean Government and Central Bank | 660,777 | 660,777 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other debt financial instruments issued in Chile | 1,342,558 | 5,202 | 11,315 | 11,503 | 5,052 | 1,375,630 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial debt instruments issued Abroad | 51,938 | 51,938 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 660,777 | 1,394,496 | 5,202 | 11,315 | 11,503 | 5,052 | 2,088,345 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity Instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity instruments issued in Chile | 7,277 | 7,277 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity instruments issued by foreign institutions | 2,215 | 2,215 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 9,492 | 9,492 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative financial instruments for hedging purposes | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forwards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Swaps | 73,959 | 73,959 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Call Options | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Put Options | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Futures | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 73,959 | 73,959 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial assets at amortized cost (*) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rights by resale agreements | 82,505 | 4,786 | 87,291 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt financial instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| From the Chilean Government and Central Bank | 944,109 | 944,109 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 944,109 | 944,109 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans to Banks | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Central Bank of Chile | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Domestic banks | 300,042 | 300,042 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign banks | 367,661 | 367,661 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 667,703 | 667,703 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (*) | Economic activity of Loans and accounts receivable from customers disclosed in Note No. 11 e). |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (2) | Credit Risk, continued: |
| (e) | Collateral and Other Credit Enhancements: |
The amount and type of collateral required depends on the counterparty’s credit risk assessment.
The Bank has guidelines regarding the acceptability of types of collateral and valuation parameters.
The main types of collateral obtained are:
| - | For commercial loans: Residential and non-residential real estate, liens and inventory. |
| - | For retail loans: Mortgages loans on residential property. |
The Bank also obtains collateral from parent companies for loans granted to their subsidiaries.
Management makes sure its collateral is acceptable in accordance with to both external standards and internal policies guidelines and parameters. The Bank has approximately 255,927 collateral constituted as of December 31, 2025 (248,807 in December 2024), the majority of which consist of real estate.
The following table contains guarantees values as of December 31, 2025 and 2024:
| Fair value of collateral and credit enhancements held as of December 31, 2025 | ||||||||||||||||||||||||||||
| Loans to customers: | Maximum exposure to credit risk | Mortgages | Pledge | Securities | Warrants | Net collateral | Net exposure | |||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||
| Loans to corporations | 14,661,553 | 3,943,491 | 132,773 | 471,893 | 3,086 | 4,551,243 | 10,110,310 | |||||||||||||||||||||
| Loans to small business | 4,887,994 | 3,465,683 | 15,860 | 10,592 | 3,492,135 | 1,395,859 | ||||||||||||||||||||||
| Consumer lending | 5,770,298 | 367,490 | 439 | 2,361 | 370,290 | 5,400,008 | ||||||||||||||||||||||
| Mortgage lending | 13,934,469 | 13,457,848 | 63 | 13,457,911 | 476,558 | |||||||||||||||||||||||
| Total | 39,254,314 | 21,234,512 | 149,135 | 484,846 | 3,086 | 21,871,579 |
17,382,735 | |||||||||||||||||||||
| Fair value of collateral and credit enhancements held as of December 31, 2024 | ||||||||||||||||||||||||||||
| Loans to customers: | Maximum exposure to credit risk | Mortgages | Pledge | Securities | Warrants | Net collateral | Net exposure | |||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||
| Loans to corporations | 15,288,676 | 3,985,392 | 137,504 | 559,132 | 1,345 | 4,683,373 | 10,605,303 | |||||||||||||||||||||
| Loans to small business | 4,859,304 | 3,465,474 | 14,464 | 10,240 | 3,490,178 | 1,369,126 | ||||||||||||||||||||||
| Consumer lending | 5,554,989 | 387,195 | 552 | 2,500 | 390,247 | 5,164,742 | ||||||||||||||||||||||
| Mortgage lending | 13,233,327 | 12,711,594 | 120 | 12,711,714 | 521,613 | |||||||||||||||||||||||
| Total | 38,936,296 | 20,549,655 | 152,640 | 571,872 | 1,345 | 21,275,512 | 17,660,784 | |||||||||||||||||||||
The Bank also uses mitigating tactics for credit risk on derivative transactions. Through date, the following mitigating tactics are used:
| ● | Accelerating transactions and net payment using market values at the date of default of one of the parties. |
| ● | Option for both parties to terminate early any transactions with a counterparty at a given date, using market values as of the respective date. |
| ● | Margins established with time deposits by customers who have FX forwards with the subsidiary Banchile Corredores de Bolsa S.A. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (2) | Credit Risk, continued: |
| (e) | Collateral and Other Credit Enhancements, continued: |
The value of the guarantees that the Bank holds related to the loans individually classified as impaired as of December 31, 2025 and 2024 amounted Ch$190,093 million and Ch$183,021 million, respectively.
The value of the guarantees related to past due loans but not impaired as of December 31, 2025 and 2024 amounted Ch$545,626 million and Ch$521,142 million respectively.
| (f) | Credit Quality by Asset Class: |
The Bank determines the credit quality of financial assets using internal credit ratings. The rating process is linked to the Bank’s approval and monitoring processes and is performed in accordance with risk categories established by current standards. Credit quality is continuously updated based on any favorable or unfavorable developments for customers or their environments, considering aspects such as commercial and payment behavior as well as financial information.
The Bank also conducts reviews focused on companies that are involved in specific economic sectors, which are affected either by macroeconomic variables or variables of the sector. In this way, it is possible to timely establish the necessary and sufficient level of allowances to cover the losses due to the possible non-recoverability of the loans granted.
The credit quality by asset class for Consolidated Statements of Financial Position line items, based on the Bank’s credit rating system, is presented in Note No. 11 letter (d).
The detail of the past due but not impaired portfolio is as follows:
| Past due but not impaired(*) | |||||||||||||||||||||||||
| As of December 31, | Neither past due nor impaired | Up to 30 days | Over 30 days and up to 60 days | Over 60 days and up to 90 days | Over 90 days | Total | |||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||
| 2025 | 36,628,529 | 875,025 | 242,698 | 75,804 | — | 37,822,056 | |||||||||||||||||||
| 2024 | 36,465,961 | 837,539 | 207,800 | 70,974 | 498 | 37,582,772 | |||||||||||||||||||
| (*) | These amounts include the past due portion and the remaining balance of loans in default. |
| (g) | Assets Received in Lieu of Payment: |
The Bank has received assets in lieu of payment totaling Ch$42,778 million and Ch$44,876 as of December 31, 2025 and 2024, respectively, the majority of which are properties. All these assets are managed for sale.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (2) | Credit Risk, continued: |
| (h) | Renegotiated Assets: |
The loans are presented as renegotiated in the statement of financial position correspond to those in which the related financial commitments have been restructured, and the Bank assesses the probability of recovery as sufficiently high.
The table below provides the detail of the carrying amounts of loans with renegotiated terms by financial asset class:
| 2025 | 2024 | |||||||
| Financial assets | MCh$ | MCh$ | ||||||
| Loans to Banks | ||||||||
| Domestic banks | ||||||||
| Foreign banks | ||||||||
| Subtotal | — | — | ||||||
| Loans to Customers at amortized cost | ||||||||
| Commercial loans | 504,756 | 484,156 | ||||||
| Residential mortgage loans | 322,610 | 299,599 | ||||||
| Consumer loans | 365,996 | 369,183 | ||||||
| Subtotal | 1,193,362 | 1,152,938 | ||||||
| Total renegotiated financial assets | 1,193,362 | 1,152,938 | ||||||
There is a rise in renegotiated loans. This trend is due to deteriorating payment performance in higher risk borrowers compared to the previous year.
The Bank calculates ECLs either on a group or an individual basis, which are described in more detail in Note 2 (i) (viii).
The renegotiated portfolio of Banco de Chile represents 3.04% of the total loans.
The most common type of modification is to extend the term of the loan. For payment extensions, depending on the characteristics of each credit, the Bank can agree with the client changes in the initial conditions in terms of interest rate and payment schedule. With regard to the forgiveness of the principal, the Bank normally does not give this benefit. The Board of Directors might on rare occasions approve debt forgiveness for a portion of principal on certain credit-operations that have been impaired and provisioned previously. Only those borrowers which are considered viable are renegotiated. If the debtor is not considered to be financially viable, the Bank proceeds to the legal collection of debts.
The table below includes Stage 2 and 3 assets that were modified and, therefore, treated as forborne during the 2025 period, with the related modification loss suffered by the Bank.
| 2025 | ||||
| MCh$ | ||||
| Amortized costs of financial assets modified during the period | 492,329 | |||
| Net modification loss | 91,951 | |||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (2) | Credit Risk, continued: |
| (h) | Renegotiated Assets, continued: |
Although the Bank does not have systematized information related to the balance of modified loans by type of concession, it continuously monitors its impaired portfolio as defined in note 2 (i) (viii). Also, for internal purposes the renegotiated loan portfolio is analyzed and reviewed as part of the impaired portfolio. Therefore, for management and regulatory (local and IFRS) reporting purposes the Bank does not frequently use information on loans modified by types of concession.
The table below shows the gross carrying amount of previously modified financial assets for which loss allowances has changed to 12 month Expected Credit Losses (12mECL) measurement during the 2025 period:
| December 31, 2025 | ||||||||||||||||
| Post modification | Pre-modification | |||||||||||||||
| Gross carrying amount | Corresponding ECL | Gross carrying amount | Corresponding ECL | |||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||
| Facilities that have cured since modification and are now measured using 12mECLs (Stage 1) | 40,095 | 2,149 | 40,802 | 11,743 | ||||||||||||
| Facilities that reverted to (Stage 2/3) lifetime ECLs having once cured | 19,214 | 4,735 | 19,143 | 1,807 | ||||||||||||
The Bank determines the appropriate amount of allowance for expected credit losses as follows:
The commercial loan renegotiations are always evaluated and approved individually by the credit committee with all the background and history of previous approvals, including financial records, delinquencies or other previous renegotiations of the debtor. In this step of renegotiation approval, a reevaluation of the provision level is always carried out for each debtor.
Among the variables that the credit committee considers in establishing the level of provisions for the individual portfolio are payment behavior, payment capacity and collateral coverage are mainly considered.
The approvals of the renegotiation operations are submitted to specialized credit committees, whose members have attributions adjusted to this risk.
Moreover, an operation identified as renegotiation never leaves this classification for purposes of monitoring and provisioning.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (2) | Credit Risk, continued: |
| (i) | Compliance with credit limits granted to related debtors |
Below are detailed the figures for compliance with the credit limit granted to debtors related to the ownership or management of the Bank and subsidiaries, in accordance with the Article 84 No. 2 of the General Banking Law, which establishes that in no case the total of these credits may exceed the amount of its Total or Regulatory Capital:
| December 2025 | December 2024 | |||||||
| MCh$ | MCh$ | |||||||
| Total related debt | 571,097 | 579,923 | ||||||
| Consolidated Total or Regulatory Capital | 7,115,175 | 6,955,292 | ||||||
| Limit used % | 8.03 | % | 8.34 | % | ||||
| (3) | Market Risk: |
Market Risk refers to the loss that the Bank could face due to a liquidity shortage to make the payments, or to close financial transactions in a timely manner (Liquidity Risk), or due to adverse movements in the values of market variables (Price Risk). For its proper management, the guidelines of the Liquidity Risk Management Policy and the Market Risk Management Policy are considered, both are subject to review by the Market Risk Manager and approval by the Bank's Board of Directors, at least annually.
Market risk sensitivities disclosed in this note are based on financial instruments measured at fair value and are prepared using the valuation methodologies and significant inputs described in Note 41. Accordingly, such sensitivities reflect the exposure arising from instruments measured at fair value and do not include financial instruments measured at amortized cost, unless otherwise indicated.
| (a) | Liquidity Risk: |
Liquidity Risk Measurement and Limits
The Bank manages the Liquidity Risk in accordance with the established on the Liquidity Risk Management Policy, managing separately for each sub-category thereof; this is for Trading Liquidity Risk and Funding Liquidity Risk.
Trading Liquidity Risk is the inability to close, at current market prices, the financial positions opened mainly from the Trading Book (which is daily valued at market prices and the value differences instantly reflected in the Statement Income). This risk is controlled by establishing limits on the positions amounts of the Trading Book in accordance with that is estimated to be closed in a short time period. Additionally, the Bank incorporates a negative impact on the Statement of Income whenever it believes that the size of a certain position in the Trading Book exceeds the reasonable amount negotiated in the secondary markets, which would allow the exposure to be offset without altering market prices.
Funding Liquidity Risk refers to the Bank’s inability to obtain sufficient cash to meet its immediate obligations. This risk is managed by a minimum amount of highly liquid assets called liquidity buffer, and establishing limits and controls of internal metrics, among which the Market Access Report (“MAR”) stands out, which estimates the amount of funding that the Bank would need from wholesale financial counterparties, for the next 30 and 90 days in each of the significant currencies in the balance sheet, to face a cash need as a result of the transaction under business as usual conditions.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (3) | Market Risk, continued: |
| (a) | Liquidity Risk, continued: |
The use of December within 2025 is shown below (LCCY = local currency; FCCY = foreign currency):
| MAR LCCY + FCCY BCh$ |
MAR FCCY MUS$ |
||||||||||||||||
| 1 – 30 days | 1 – 90 days | 1 –30 days | |||||||||||||||
| Maximum | 2,693 | 4,922 | Maximum | 1,613 | |||||||||||||
| Minimum | 604 | 2,743 | Minimum | (71) | |||||||||||||
| Average | 1,550 | 3,896 | Average | 718 | |||||||||||||
The Bank also monitors the amount of assets denominated in local currency that is financed by liabilities denominated in foreign currency, including all tenors and the cash flows generated by full delivery derivatives payments. This metric is referred to as Cross Currency Funding. The bank oversees and limits this amount to take precautions against not only Banco de Chile’s event but also against a systemic adverse environment generated by a country risk event that might trigger lack of foreign currency funding.
The use of Cross Currency Funding within year 2025 is illustrated below:
| Cross Currency Funding | ||||
| MUS$ | ||||
| Maximum | 3,635 | |||
| Minimum | 604 | |||
| Average | 2,167 | |||
The Bank establishes thresholds that alert behaviors outside the expected ranges at a normal or prudent level of operation, in order to protect other dimensions of liquidity risk such as, for example, maturities concentration of fund providers, the diversification of sources of funds either by type of counterparty or type of product, among others.
The evolution over time of the statement of financial ratios of the Bank is monitored in order to detect structural changes in the characteristics of the balance sheet, such as those presented in the following table and whose relevant values of use during the year 2025 are shown below:
| Funding Financial Counterparties / Assets | Deposits/ Loans |
|||||||
| Maximum | 39 | % | 65 | % | ||||
| Minimum | 36 | % | 60 | % | ||||
| Average | 38 | % | 62 | % | ||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (3) | Market Risk, continued: |
| (a) | Liquidity Risk, continued: |
Additionally, certain market index, prices and monetary decisions made by the Central Bank of Chile are monitored to detect structural changes in market conditions that can trigger a liquidity shortage or even a financial crisis.
Furthermore, the Liquidity Risk Management Policy requires the regular performance of stress tests periodically which are controlled against potentially accessible action plans in each modeled scenario, accordance with the guidelines established in the Liquidity Contingency Plan. This process is essential in determining the Bank´s liquidity risk appetite.
The Bank measures and controls the mismatch of cash flows under regulatory standards with the C46 index report, which represents the net cash flows expected over time because of the contractual maturity of almost all assets and liabilities. Additionally, the Commission for the Financial Market (hereinafter, “CMF”) authorized Banco de Chile, among others, to report the adjusted C46 index. This allows the Bank to report, in addition to the regular C46 index, outflow behavior assumptions of certain specific elements of the liability, such as on demand deposits and time deposits. In addition, the regulator also requires some rollover assumptions for the loan portfolio.
Through the present date, the CMF establishes the following provisions for the C46 index:
Foreign Currency balance sheet items: 1-30 days, Regulatory Limit C46 index < 1 x Tier-1 Capital
The levels of use of this index during the year 2025 are shown illustrated below:
| Adjusted C46 CCY and FCCY as part of Basic Capital |
Adjusted C46 FCCY as part of Basic Capital |
|||||||||||
| 1 – 30 days | 1 – 90 days | 1 – 30 days | ||||||||||
| Maximum | 0.21 | 0.20 | 0.28 | |||||||||
| Minimum | (0.14 | ) | (0.23 | ) | 0.08 | |||||||
| Average | 0.01 | (0.01 | ) | 0.21 | ||||||||
| Regulatory Limit | N/A | N/A | 1.0 | |||||||||
The following tables present detailed information about the Liquidity Position of the institution separated by currency and time bucket, used for regulatory reporting and liquidity risk management, including contractual and adjusted cash flows positions and Liquidity Gap.
Contractual Basis categorizes the cash flow based on the terms of the underlying contract and the earliest payment or collection that is allowed under the contract terms. The Adjusted Basis is based on the Bank's estimates of when the cash will be paid or received. These estimates incorporate the use of models to allocate the cash inflow and outflow across the defined time buckets based on the historical experience of the bank. This cash flow modeling aims to reflect the expected business behavior and is currently applied in Liquidity Risk Management. In accordance with local regulatory requirements, compliance with the Liquidity Gap limit is assessed and monitored using the Adjusted Basis methodology.
The table presented is in a consolidated level, defined as the bank as a sole institution plus its subsidiaries.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (3) | Market Risk, continued: |
| (a) | Liquidity Risk, continued: |
The consolidated term liquidity gap is presented below:
REPORT
OF CONSOLIDATED LIQUIDITY POSITION
AS OF DECEMBER 31, 2025 CONTRACTUAL BASIS
Amounts in MCh$
| CONSOLIDATED CURRENCY | From 0 to 7 days |
From 0 to 15 days |
From 0 to 30 days |
From 0 to 90 days |
||||||||||||
| Cash flow receivable (assets) and income | 9,350,866 | 12,579,070 | 14,315,907 | 17,529,813 | ||||||||||||
| Cash flow payable (liabilities) and expenses | 20,617,686 | 23,047,061 | 26,450,839 | 30,298,214 | ||||||||||||
| Liquidity Gap | 11,266,820 | 10,467,991 | 12,134,932 | 12,768,401 | ||||||||||||
| FOREIGN CURRENCY | From 0 to 7 days |
From 0 to 15 days |
From 0 to 30 days |
From 0 to 90 days |
||||||||||||
| Cash flow receivable (assets) and income | 693,213 | 979,445 | 968,538 | 1,065,862 | ||||||||||||
| Cash flow payable (liabilities) and expenses | 2,430,507 | 2,876,839 | 3,354,715 | 4,273,320 | ||||||||||||
| Liquidity Gap | 1,737,294 | 1,897,394 | 2,386,177 | 3,207,458 | ||||||||||||
| Limits: | ||||||||||||||||
| One time capital | 5,644,125 | |||||||||||||||
| AVAILABLE MARGIN (*) | 3,257,948 | |||||||||||||||
| * | In the limit up to 30 days, in foreign currency, the Bank has an available margin of Ch$3,257,948,417,020. |
REPORT
OF CONSOLIDATED LIQUIDITY POSITION
AS OF DECEMBER 31, 2025 ADJUSTED BASIS
Amounts in MCh$
| CONSOLIDATED CURRENCY | From 0 to 7 days |
From 0 to 15 days |
From 0 to 30 days |
From 0 to 90 days |
||||||||||||
| Cash flow receivable (assets) and income | 9,018,516 | 11,843,584 | 13,043,834 | 15,347,579 | ||||||||||||
| Cash flow payable (liabilities) and expenses | 10,353,960 | 11,335,132 | 12,788,552 | 15,093,532 | ||||||||||||
| Liquidity Gap | 1,335,444 | (508,452 | ) | (255,282 | ) | (254,047 | ) | |||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (3) | Market Risk, continued: |
| (a) | Liquidity Risk, continued: |
| FOREIGN CURRENCY | From 0 to 7 days |
From 0 to 15 days |
From 0 to 30 days |
From 0 to 90 days |
||||||||||||
| Cash flow receivable (assets) and income | 614,569 | 782,091 | 630,860 | 455,073 | ||||||||||||
| Cash flow payable (liabilities) and expenses | 1,505,842 | 1,863,222 | 2,215,868 | 3,043,949 | ||||||||||||
| Liquidity Gap | 891,273 | 1,081,131 | 1,585,008 | 2,588,876 | ||||||||||||
| Limits: | ||||||||||||||||
| One time capital | 5,644,125 | |||||||||||||||
| AVAILABLE MARGIN (*) | 4,059,117 | |||||||||||||||
In the limit up to 30 days, in foreign currency, the Bank has an available margin of Ch$4,059,117,550,856.
Additionally, the regulatory entities have introduced other metrics that the Bank uses in its management, such as the Liquidity Coverage Ratio (“LCR”) and Net Stable Financing Ratio (“NSFR”), using assumptions similar to those used in the international banking. For the first, the minimum level required is 1 time (100%) of the LCR indicator, where as for the second the limit requirement is 0.9 times (90%) of the NSFR indicator. The evolution of the LCR and NSFR metrics during the year 2025 are shown below:
| LCR | NSFR | |||||||
| Maximum | 2.13 | 1.22 | ||||||
| Minimum | 1.82 | 1.17 | ||||||
| Average | 1.97 | 1.19 | ||||||
| Regulatory Limit | 1.00 | 0.9 | (*) | |||||
| (*) | By transitory disposition of the Central Bank of Chile, in Chapter III.B.2.1 of the Compendium of Accounting Standards for Banks, this limit will gradually increase until reaching 1.0 in January 2026. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (3) | Market Risk, continued: |
| (a) | Liquidity Risk, continued: |
The contractual maturity profile of the financial liabilities of Banco de Chile and its subsidiaries (consolidated basis), to December 2025 and 2024, is as follows:
| Up to 1 month | 1 to 3 months | 3 to 12 months | 1 to 3 years | 3 to 5 years | Over 5 years | Total | ||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||
| Liabilities as of December 31, 2025 | ||||||||||||||||||||||||||||
| Transactions in the course of payment | 564,172 | 564,172 | ||||||||||||||||||||||||||
| Full delivery derivative transactions | 490,271 | 369,130 | 724,294 | 1,153,074 | 1,027,445 | 1,247,938 | 5,012,152 | |||||||||||||||||||||
| Financial liabilities at amortized cost | ||||||||||||||||||||||||||||
| Current accounts and other demand deposits | 14,498,196 | 14,498,196 | ||||||||||||||||||||||||||
| Time deposits and saving accounts | 9,316,902 | 2,897,857 | 1,813,808 | 6,587 | 793 | 646 | 14,036,593 | |||||||||||||||||||||
| Obligations by repurchase agreements | 287,110 | 287,110 | ||||||||||||||||||||||||||
| Borrowings from financial institutions | 64,372 | 318,830 | 778,352 | 135,060 | 1,296,614 | |||||||||||||||||||||||
| Debt financial instruments issued (all currencies) | 18,708 | 370,475 | 1,289,167 | 3,015,473 | 2,119,402 | 5,738,729 | 12,551,954 | |||||||||||||||||||||
| Other financial obligations | 367,323 | 367,323 | ||||||||||||||||||||||||||
| Financial instruments of regulatory capital issued (subordinated bonds) | 3,247 | 46,655 | 92,486 | 89,240 | 1,149,624 | 1,381,252 | ||||||||||||||||||||||
| Total (excluding non-delivery derivative transactions) | 25,610,301 | 3,956,292 | 4,652,276 | 4,402,680 | 3,236,880 | 8,136,937 | 49,995,366 | |||||||||||||||||||||
| Non-delivery derivative transactions | 479,836 | 675,990 | 775,896 | 1,529,409 | 1,014,770 | 2,214,460 | 6,690,361 | |||||||||||||||||||||
| Up to 1 month | 1 to 3 months | 3 to 12 months | 1 to 3 years | 3 to 5 years | Over 5 years | Total | ||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||
| Liabilities as of December 31, 2024 | ||||||||||||||||||||||||||||
| Transactions in the course of payment | 283,605 | 283,605 | ||||||||||||||||||||||||||
| Full delivery derivative transactions | 728,329 | 328,138 | 972,304 | 1,202,183 | 861,833 | 1,490,511 | 5,583,298 | |||||||||||||||||||||
| Financial liabilities at amortized cost | ||||||||||||||||||||||||||||
| Current accounts and other demand deposits | 14,263,303 | 14,263,303 | ||||||||||||||||||||||||||
| Time deposits and saving accounts | 9,437,781 | 2,670,440 | 2,138,233 | 56,593 | 450 | 562 | 14,304,059 | |||||||||||||||||||||
| Obligations by repurchase agreements | 109,280 | 66 | 527 | 109,873 | ||||||||||||||||||||||||
| Borrowings from financial institutions | 22,207 | 159,438 | 921,822 | 1,103,467 | ||||||||||||||||||||||||
| Debt financial instruments issued (all currencies) | 13,893 | 158,375 | 1,178,285 | 2,983,446 | 2,328,034 | 4,472,111 | 11,134,144 | |||||||||||||||||||||
| Other financial obligations | 284,479 | 284,479 | ||||||||||||||||||||||||||
| Financial instruments of regulatory capital issued (subordinated bonds) | 3,140 | 48,654 | 92,974 | 89,437 | 1,153,294 | 1,387,499 | ||||||||||||||||||||||
| Total (excluding non-delivery derivative transactions) | 25,146,017 | 3,316,457 | 5,259,825 | 4,335,196 | 3,279,754 | 7,116,478 | 48,453,727 | |||||||||||||||||||||
| Non-delivery derivative transactions | 153,172 | 399,612 | 1,201,809 | 1,385,711 | 894,295 | 1,912,040 | 5,946,639 | |||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (3) | Market Risk, continued: |
| (b) | Price Risk: |
Price Risk Measurement and Limits
The Price Risk measurement and management processes are carried out in accordance with the established on the Market Risk Management Policy, by using internal metrics developed by the Bank, both for the Trading Book and for the Banking Book (the Banking Book includes all balance sheet items, including those in the Trading Book but in such case these are reported at an interest rate adjustment term of one day, thus not generating accrual interest rate risk). In addition, the portfolio recorded under the Fair Value Through Other Comprehensive Income (hereinafter FVTOCI) is considered, which is a sub-set of the Banking Book, which given its nature is relevant to measure it independently. In addition, the Bank reports metrics to regulatory entities according to the models defined by them.
The Bank has established internal limits for the exposures of the Trading Book. In fact, FX positions (FX delta), interest rate sensitivities generated by the derivatives and debt securities portfolios (DV01 or also referred as to rho) and the FX options volatility sensitivity (vega) are measured, reported and controlled against their limits. Limits are established on an aggregate basis but also for some specific tenor points. The use of these limits is daily monitored, controlled and reported by independent control functions to the senior management of the bank. The internal governance framework also establishes that these limits must be approved by the Board of Directors and reviewed at least annually.
The Bank measures and controls the risk for the Trading Book portfolios using the Value-at-Risk (VaR). The model uses a 99% confidence level, and the most recent one-year observed rates, prices and yields data.
The use of VaR within the year 2025 is shown below:
| Value-at-Risk 99% one-day confidence level |
||||
| MCh$ | ||||
| Maximum | 1,906 | |||
| Minimum | 516 | |||
| Average | 1,117 | |||
Additionally, the Bank performs measuring, limiting, controlling and reporting interest rate exposures and risks for the Banking Book using internally developed methodologies based on the differences in the amounts of assets and liabilities considering the interest rate adjustment dates. Exposures are measured according to the Interest Rate Exposure or IRE metric and their related risks using the Earnings-at-Risk or EaR metric for short-term measurements and metrics such as Delta EVE sensitivities (Economic Value of Equity) and Delta EVE VaR for long-term measurements. Within these metrics, Prepayment Risk is considered, which corresponds to the customer’s ability to pay, fully or partially, their debt before maturity. For such purposes, a loan flow allocation model is generated with exposure to interest rate fluctuations, according to their prepayment behavior, finally reflecting a decrease in their average maturity term.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (3) | Market Risk, continued: |
| (b) | Price Risk, continued: |
The use of EaR within the year 2025 is shown below:
| 12- months Earnings-at-Risk 99% confidence level 3 months closing period |
||||
| MCh$ | ||||
| Maximum | 228,919 | |||
| Minimum | 165,929 | |||
| Average | 203,729 | |||
The regulatory risk measurement for the Trading Book (Market Risk Weighted Assets report or mRWA) is prepared using guidelines provided by the Central Bank of Chile (hereinafter, “BCCh”) and the CMF. The aforementioned methodologies estimate the potential loss that the bank may incur considering standardized fluctuations of the value of market factors such as FX rates, interest rates and volatilities that may adversely impact the value of FX spot positions, interest rate exposures, and volatility exposures, respectively. Interest rates changes are provided by the regulatory entity; moreover, correlation factors and very conservative term are included to explain non-parallel changes in the yield curve.
The risk measurement for the Banking Book, according to regulatory guidelines (RMLB report per its Spanish acronym), because of interest rate fluctuations is carried out through the use of standardized methodologies provided by regulatory entities (BCCh and CMF). The report includes models for reporting interest rate gaps and how their value varies, according to rate fluctuations that are defined by the scenarios provided by the regulations. In addition to this, the regulatory entity has requested banks to establish internal limits, separately for short-term and long-term balances, NII and EVE respectively, for these regulatory measurements.
The results effectively realized during the month for trading activities are controlled against defined loss levels and if these levels are exceeded, senior management is notified to evaluate potential corrective actions.
Finally, the Market Risk Management Policy of Banco de Chile required the performance of daily stress tests for the Trading Book and monthly for the Banking Book. Additionally, the stress test for the FVTOCI portfolio is included, which is reported daily. The output of the stress testing process is monitored against corresponding alert levels; in the case those triggers are breached, the senior management is notified to implement further actions, if necessary. Additionally, these book tests are a fundamental part of establishing the Bank’s price risk appetite framework.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (3) | Market Risk, continued: |
| (b) | Price Risk, continued: |
The following table illustrates the interest rate cash-flows of the Banking Book, considering the interest rate repricing dates on an individual basis, as of December 31, 2025 and 2024:
| Up to 1 month | 1 to 3 months | 3 to 12 months | 1 to 3 years | 3 to 5 years | Over 5 years | Total | ||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||
| Assets as of December 31, 2025 | ||||||||||||||||||||||||||||
| Cash and deposits in banks | 2,574,653 | 2,574,653 | ||||||||||||||||||||||||||
| Transactions in the course of collection | 398,870 | 398,870 | ||||||||||||||||||||||||||
| Financial assets at fair value through other comprehensive income: | ||||||||||||||||||||||||||||
| Debt financial instruments | 122,687 | 364,977 | 1,694,489 | 1,037,150 | 177,600 | 151,991 | 3,548,894 | |||||||||||||||||||||
| Derivative financial instruments for hedging purposes | 1,530 | 7,885 | 40,255 | 564,015 | 298,745 | 1,057,656 | 1,970,086 | |||||||||||||||||||||
| Financial assets at amortized cost: | ||||||||||||||||||||||||||||
| Rights by resale agreements | 57,023 | 57,023 | ||||||||||||||||||||||||||
| Debt financial instruments | 14,089 | 7,859 | 162,583 | 321,295 | 505,826 | |||||||||||||||||||||||
| Loans to Banks | 186,284 | 8,892 | 208,407 | 403,583 | ||||||||||||||||||||||||
| Loans to customers, net | 5,578,003 | 2,465,737 | 8,212,752 | 8,924,482 | 5,793,296 | 16,143,007 | 47,117,277 | |||||||||||||||||||||
| Total Assets | 8,919,050 | 2,861,580 | 10,163,762 | 10,688,230 | 6,590,936 | 17,352,654 | 56,576,212 | |||||||||||||||||||||
| Up to 1 month | 1 to 3 months | 3 to 12 months | 1 to 3 years | 3 to 5 years | Over 5 years | Total | ||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||
| Assets as of December 31, 2024 | ||||||||||||||||||||||||||||
| Cash and deposits in banks | 2,677,676 | 2,677,676 | ||||||||||||||||||||||||||
| Transactions in the course of collection | 382,677 | 382,677 | ||||||||||||||||||||||||||
| Financial assets at fair value through other comprehensive income: | ||||||||||||||||||||||||||||
| Debt financial instruments | 143,990 | 272,612 | 867,605 | 490,101 | 217,174 | 96,808 | 2,088,290 | |||||||||||||||||||||
| Derivative financial instruments for hedging purposes | 747 | 8,544 | 311,890 | 442,555 | 337,594 | 893,516 | 1,994,846 | |||||||||||||||||||||
| Financial assets at amortized cost: | ||||||||||||||||||||||||||||
| Rights by resale agreements | ||||||||||||||||||||||||||||
| Debt financial instruments | 25,951 | 11,478 | 500,385 | 159,001 | 306,586 | 1,003,401 | ||||||||||||||||||||||
| Loans to Banks | 398,595 | 58,098 | 216,769 | 673,462 | ||||||||||||||||||||||||
| Loans to customers, net | 5,417,405 | 3,126,005 | 8,684,037 | 8,875,282 | 5,369,386 | 15,070,223 | 46,542,338 | |||||||||||||||||||||
| Total Assets | 9,021,090 | 3,491,210 | 10,091,779 | 10,308,323 | 6,083,155 | 16,367,133 | 55,362,690 | |||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (3) | Market Risk, continued: |
| (b) | Price Risk, continued: |
| Up to 1 month | 1 to 3 months | 3 to 12 months | 1 to 3 years | 3 to 5 years | Over 5 years | Total | ||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||
| Liabilities as of December 31, 2025 | ||||||||||||||||||||||||||||
| Transactions in the course of payment | 571,023 | 571,023 | ||||||||||||||||||||||||||
| Derivative financial instruments for hedging purposes | 2,252 | 2,021 | 29,606 | 535,849 | 354,597 | 1,481,648 | 2,405,973 | |||||||||||||||||||||
| Financial liabilities at amortized cost | ||||||||||||||||||||||||||||
| Current accounts and other demand deposits | 14,526,894 | 14,526,894 | ||||||||||||||||||||||||||
| Time deposits and saving accounts | 9,316,902 | 2,897,857 | 1,813,808 | 6,587 | 793 | 646 | 14,036,593 | |||||||||||||||||||||
| Obligations by repurchase agreements | 43,509 | 43,509 | ||||||||||||||||||||||||||
| Borrowings from financial institutions | 64,372 | 318,830 | 778,352 | 135,060 | 1,296,614 | |||||||||||||||||||||||
| Debt financial instruments issued (*) | 18,708 | 370,475 | 1,289,167 | 3,015,473 | 2,119,402 | 5,738,729 | 12,551,954 | |||||||||||||||||||||
| Financial instruments of regulatory capital issued (subordinated bonds) | 363,649 | 363,649 | ||||||||||||||||||||||||||
| Other liabilities | 3,247 | 46,655 | 92,486 | 89,240 | 1,149,624 | 1,381,252 | ||||||||||||||||||||||
| Total liabilities | 24,910,556 | 3,589,183 | 3,957,588 | 3,785,455 | 2,564,032 | 8,370,647 | 47,177,461 | |||||||||||||||||||||
| Up to 1 month | 1 to 3 months | 3 to 12 months | 1 to 3 years | 3 to 5 years | Over 5 years | Total | ||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | ||||||||||||||||||||||
| Liabilities as of December 31, 2024 | ||||||||||||||||||||||||||||
| Transactions in the course of payment | 297,983 | 297,983 | ||||||||||||||||||||||||||
| Derivative financial instruments for hedging purposes | 1,588 | 2,755 | 303,336 | 381,790 | 343,096 | 1,133,338 | 2,165,903 | |||||||||||||||||||||
| Financial liabilities at amortized cost | ||||||||||||||||||||||||||||
| Current accounts and other demand deposits | 14,287,507 | 14,287,507 | ||||||||||||||||||||||||||
| Time deposits and saving accounts | 9,437,781 | 2,670,440 | 2,138,233 | 56,593 | 450 | 562 | 14,304,059 | |||||||||||||||||||||
| Obligations by repurchase agreements | 9,984 | 9,984 | ||||||||||||||||||||||||||
| Borrowings from financial institutions | 21,222 | 159,438 | 921,822 | 1,102,482 | ||||||||||||||||||||||||
| Debt financial instruments issued (*) | 13,893 | 158,375 | 1,178,285 | 2,983,446 | 2,328,034 | 4,472,111 | 11,134,144 | |||||||||||||||||||||
| Financial instruments of regulatory capital issued (subordinated bonds) | 284,479 | 284,479 | ||||||||||||||||||||||||||
| Other liabilities | 3,140 | 48,654 | 92,974 | 89,437 | 1,153,294 | 1,387,499 | ||||||||||||||||||||||
| Total liabilities | 24,357,577 | 2,991,008 | 4,590,330 | 3,514,803 | 2,761,017 | 6,759,305 | 44,974,040 | |||||||||||||||||||||
| (*) | Amounts shown here are different from those reported in the liabilities report, which is part of the liquidity analysis, due to differences in the treatment of mortgage bonds issued by the Bank in both reports. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (3) | Market Risk, continued: |
| (b) | Price Risk, continued: |
Price Risk Sensitivity Analysis
The Bank uses stress tests as the main sensitivity analysis tool for Price Risk. The analysis is implemented for the Trading Book, Banking Book and the FVTOCI portfolio separately. The Bank has adopted this tool as it is considered more useful than fluctuations in business as usual scenario, such as VaR or EaR, given that:
| (i) | The financial crisis shows market factors fluctuations that are materially larger than those used in the VaR with 99% of confidence level or EaR with 99% of confidence level. |
| (ii) | The financial crisis also shows that correlations between these fluctuations are materially different from those used in the VaR calculation, since a crisis precisely indicates severe disconnections between the behaviors of market factors fluctuations with respect to the patterns observed under normal conditions. |
| (iii) | Trading liquidity dramatically diminishes during financial distress and especially in emerging markets. Therefore, the overnight VaR number might not be representative of the loss for trading portfolios in such environment since closing exposures period may exceed one business day. This may also happen when calculating EaR, even considering three months as the closing period. |
The impacts are determined through mathematical simulations of fluctuations in the values of market factors, and, estimating the changes of the economic and /or accounting value of the financial positions.
To comply with IFRS 9, the following exercise was included illustrating an estimation of the impact of extreme but reasonable fluctuations of interest rates, swaps yields, FX rates and exchange volatility, which are used for valuing Trading Book, Banking Book and the FVTOCI portfolio. Because the Bank’s portfolio includes positions denominated in nominal and real interest rates, these fluctuations must be aligned with extreme but realistic Chilean inflation changes forecasts.
For the Trading Book, the exercise is implemented by multiplying the sensitivity by the fluctuations obtained as the results of mathematical simulations over a two-week time horizon and using the maximum historical volatility, within a significant period of time, in each of the market factor present. In the case of the FVTOCI portfolio a four-week time horizon is used due to liquidity constrains; Banking Book impacts are estimated by multiplying cumulative gaps by forward interest rates fluctuations modeled over a three-month time horizon and using the maximum historical volatility of interest fluctuations but limited by maximum fluctuations and / or levels observed within a significant period of time. It is relevant to note that the methodology might ignore some portion of the interest rates convexity, since it is not captured properly when large fluctuations are modeled. Because of the magnitude of the changes, the methodology may be reasonable enough for the purposes and scope of the analysis.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (3) | Market Risk, continued: |
| (b) | Price Risk, continued: |
The following table illustrates the fluctuations resulting from the main market factors in the maximum stress test exercise, or more adverse, for the Trading Book.
The directions or signs of these fluctuations related to those that generate the most adverse impact in the aggregate level.
|
Average Fluctuations of Market Factors for Maximum Stress Scenario Trading Book |
||||||||||||||||||||||||
| CLP Derivatives (bps) |
CLP Bonds (bps) |
CLF Derivatives (bps) |
CLF Bonds (bps) |
USD Offshore SOFR Derivatives (bps) |
Spread USD On/Off Derivatives (bps) |
|||||||||||||||||||
| Lower than 1 year | 8 | 89 | 126 | 60 | 34 | (65 | ) | |||||||||||||||||
| Higher than 1 year | (13 | ) | 126 | (24 | ) | 111 | 33 | (23 | ) | |||||||||||||||
bps = basis points
The worst impact on the Bank’s Trading Book as of December 31, 2025, as a result of the simulation process described above, is as follows:
| Most Adverse Stress Scenario P&L
Impact Trading Book (MCh$) |
||||
| CLP Interest Rate | (13,347 | ) | ||
| Derivatives | 100 | |||
| Debt instruments | (13,447 | ) | ||
| CLF Interest Rate | (1,890 | ) | ||
| Derivatives | (823 | ) | ||
| Debt instruments | (1,067 | ) | ||
| Interest rate US SOFR | (2,960 | ) | ||
| SOFR/CAM interest rate spread | (1,247 | ) | ||
| Total Interest rates | (19,444 | ) | ||
| Banking spread | ||||
| Total FX and FX Options | (474 | ) | ||
| Total | (19,918 | ) | ||
The modeled scenario would generate losses in the Trading Book of Ch$19,918 million. Such fluctuations would not result in material losses compared to Basic Capital or to the P&L estimate for the next 12-months.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (3) | Market Risk, continued: |
| (b) | Price Risk, continued: |
The impact on the Banking Book as of December 31, 2025, which does not necessarily mean a net loss (gain) but a lower (higher) net income from funds generation (resulting in the generation of the net interest rate), is shown below:
| Most Adverse Stress Scenario 12-Month Revenue Accrual Book (MCh$) |
||||
| Impact by Base Interest Rate shocks | (262,853 | ) | ||
| Impact due to Spreads Shocks | (20,924 | ) | ||
| Higher / (Lower) Net revenues | (283,777 | ) | ||
The impact on the FVTOCI portfolio is detailed in the tables below. First there are the main fluctuation in the market factors, due to the scenarios provided for the stress test meltdown (more adverse), for this portfolio.
The signs of the variations below correspond to the ones that generate the most adverse impact.
| Average Fluctuations of Market
Factors for Maximum Stress Scenario FVOCI Portfolio |
||||||||||||||||
CLP Bonds (bps) |
CLF Bonds (bps) |
USD
(bps) |
Spread USD On/Off Derivatives (bps) |
|||||||||||||
| Lower than 1 year | 151 | 232 | (13 | ) | (71 | ) | ||||||||||
| Higher than 1 year | 142 | 249 | 6 | (30 | ) | |||||||||||
bps = basis points
The worst impact on the Bank’s FVTOCI portfolio as of December 31, 2025, because of the simulation process described above, is as follows:
| Most Adverse Stress Scenario P&L Impact FVOCI portfolio (MCh$) |
||||
| CLP Debt Instrument | (45,843 | ) | ||
| CLF Debt Instrument | (80,393 | ) | ||
| Interest rate US SOFR | 11 | |||
| Banking spread | (4,515 | ) | ||
| Corporative spread | 1,719 | |||
| Total | (129,021 | ) | ||
The modeled for the FVTOCI Portfolio would generate potential impacts on equity accounts for Ch$129,021 million.
The main negative impact on the Trading Book would occur because of an increase in rates on debt instruments in CLP and CLF over 1 year, while in the case of the FVTOCI portfolio the main impact comes from upward fluctuations in interest rates of debt instruments in CLP and CLF greater than 1 year. For its part, the lowest potential income in the next 12 months in the Banking Book would occur in a scenario of a sharp inflation rates and a limited fall in nominal interest rates.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 44. | Risk Management and Report, continued: |
| (4) | Other Information related to Financial Risks: |
Offsetting of financial assets and liabilities:
The Bank trades financial derivatives with foreign counterparties using ISDA Master Agreement (International Swaps and Derivatives Association, Inc.), under legal jurisdiction of the City of New York – USA or London – United Kingdom. Legal framework in these jurisdictions, along with documentation mentioned, it allows Banco de Chile the right to anticipate the maturity of the transaction and then, offset the net value of those transactions in case of default of counterparty. Additionally, the Bank has negotiated with these counterparties an additional annex (CSA Credit Support Annex), that includes other credit mitigating, such as entering margins on a certain amount of net value of transactions, early termination (optional or mandatory) of transactions at certain dates in the future, coupon adjustment of transaction in exchange for payment of the debtor counterpart over a certain threshold amount, etc.
Below are detail the contracts susceptible to offset:
| Fair Value | Contracts with a negative fair value with right to offset |
Contracts with positive fair value with right to offset |
Financial guarantee | Net fair value | ||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
| MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||||||||||||||||||||||||||
| Derivative financial assets | 1,900,354 | 2,377,312 | (715,643 | ) | (817,430 | ) | (839,686 | ) | (1,103,430 | ) | (172,966 | ) | (169,344 | ) | 172,059 | 287,108 | ||||||||||||||||||||||||
| Derivative financial liabilities | 2,377,282 | 2,585,761 | (715,643 | ) | (817,430 | ) | (839,686 | ) | (1,103,430 | ) | (456,594 | ) | (334,897 | ) | 365,359 | 330,004 | ||||||||||||||||||||||||
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 45. | Information on Regulatory Capital and Capital Adequacy Ratios: |
Requirements and Capital Management:
The main objectives of the Bank’s capital management are to ensure the adequacy and quality of its capital, at a consolidated level, based on the adequate management of the risks it faces in its operations, establishing sufficient capital levels, through the definition of internal objectives, that supports both the business strategy in both normal and stress scenarios in the short and medium term, thus ensuring compliance with regulatory requirements, coverage of its material risks, a sound credit classification and the generation of adequate capital headroom. During 2025, the Bank has met the required capital requirements and its internal adequacy objectives.
As part of its Capital Management Policy, the Bank has established capital adequacy alerts and limits approved by the Board of Directors, which are monitored by the governance structures that the Bank has established for these purposes, including the Capital Management Committee. During 2025, none of the internal alerts defined by the Bank were activated as part of the Capital Risk Appetite Framework. In this sense, the Bank manages capital based on its strategic objectives, its risk profile and its ability to generate cash flows, as well as the economic and business context in which it operates. If it requires strengthening its capital structure, the Bank may, among other options, propose to its shareholders meeting modifications to the dividend payment ratio, as well as issue basic capital, additional tier 1 capital or tier 2 capital instruments.
Capital Requirements
In accordance with the General Banking Law, the effective equity of a bank may not be less than 8% of its risk-weighted assets (RWA), net of required provisions. Additionally, it establishes that the Basic Capital may not be less than 4.5% of its RWA or 3% of its total assets, net of required provisions. Regarding Tier 1 capital, corresponding to the sum of Basic Capital and Additional Tier 1 Capital, the latter in the form of bonds with no maturity date and preferred shares, the requirements establish that it may not be less than 6% of their RWAs, net of required provisions. Likewise, banking entities must comply, as established by current regulations or regulators, with buffers and capital charges, such as the conservation buffer, the countercyclical buffer and capital charges by the systemically important buffer and/or Pillar 2.
On May, 2023, the Central Bank reported that its board agreed to activate the counter-cyclical core capital buffer for banks, at a local banking industry level, equivalent to 0.5% of the risk-weighted assets of banking institutions, effective beginning in May 2024. In the monetary policy meeting of November 2025, the Central Bank agreed to maintain the same level of 0.5% requirement for the capital buffer.
On January 16, 2024, the Financial Market Commission (CMF) reported that, as a result of the supervision process, it made the decision to apply additional Pillar 2 capital requirements of 0.5% for Banco de Chile within an implementation period of four years. This charge must be constituted in a ratio of 25% beginning on June 30, 2024. Likewise, this requirement must be recognized at least 56.3% with basic capital proportionally to the minimum legal requirements. On January 17, 2025 the CMF communicated that, as a result of the supervisory process, it decided to maintain the additional capital requirement for Pillar 2 effective on that date for the equivalent to 0.13% of the RWA, which was fully constituted in June 2025. On January 16, 2026, as a result of the supervisory process, the CMF resolved and communicated the removal of the additional Pillar 2 requirement for Banco de Chile.
On April 1, 2025, the CMF reported the result of the annual review of the systemic importance rating for local banks, maintaining an additional basic capital charge of 1.25% of the RWA for Banco de Chile.
As of December 1, 2025, the phased implementation of requirements for systemic banks and the gradual adjustments to regulatory capital have been fully completed. From this date onward, the only remaining transitional measure relates to the continued recognition of subordinated bonds issued by banking subsidiaries as effective equity. Furthermore, as of December 1, 2024, the adoption process for the capital conservation buffer was finalized, reaching 2.5% of risk-weighted assets, a requirement fully met by Banco de Chile.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 45. | Information on Regulatory Capital and Capital Adequacy Ratios, continued: |
Information on regulatory capital and capital adequacy indicators is presented below:
| Local and Overall consolidated |
Local and Overall consolidated |
|||||||||||
| Total assets, risk-weighted assets and effective equity components under Basel III | December 31, 2025 |
December 31, 2024 |
||||||||||
| Item No. | Item description | Note | MCh$ | MCh$ | ||||||||
| 1 | Total assets as per the statement of financial position | 54,100,903 | 52,095,441 | |||||||||
| 2 | Non-consolidated investment in subsidiaries | a | ||||||||||
| 3 | Assets discounted from regulatory capital, other than item 2 | b | 2,069,627 | 2,544,175 | ||||||||
| 4 | Derivative credit equivalents | c | 1,070,598 | 1,056,941 | ||||||||
| 5 | Contingent loans | d | 3,110,749 | 3,104,187 | ||||||||
| 6 | Assets generated by the intermediation of financial instruments | e | ||||||||||
| 7 | = (1-2-3+4+5-6) Total assets for regulatory purposes | 56,212,623 | 53,712,394 | |||||||||
| 8.a | Credit risk weighted assets, estimated according to the standard methodology (CRWA) | f | 33,093,851 | 32,704,910 | ||||||||
| 8.b | Credit risk weighted assets, estimated according to internal methodologies (CRWA) | f | ||||||||||
| 9 | Market risk weighted assets (MRWA) | h | 1,712,039 | 1,309,590 | ||||||||
| 10 | Operational risk weighted assets (ORWA) | g | 4,112,856 | 4,339,979 | ||||||||
| 11.a | = (8.a/8.b+9+10) Risk-weighted assets (RWA) | 38,918,746 | 38,354,479 | |||||||||
| 11.b | = (8.a/8.b+9+10) Risk-weighted assets, after application of the output floor (RWA) | 38,918,746 | 38,354,479 | |||||||||
| 12 | Owner’s equity | 5,799,534 | 5,622,999 | |||||||||
| 13 | Non-controlling interest | i | 1 | 2 | ||||||||
| 14 | Goodwill | j | ||||||||||
| 15 | Excess minority investments | k | ||||||||||
| 16 | = (12+13-14-15) Core Tier 1 Capital (CET1) | 5,799,535 | 5,623,001 | |||||||||
| 17 | Additional deductions to core tier 1 capital, other than item 2 | l | 155,410 | 111,087 | ||||||||
| 18 | = (16-17-2) Core Tier 1 Capital (CET1) | 5,644,125 | 5,511,914 | |||||||||
| 19 | Voluntary (additional) provisions located as additional Tier 1 capital (AT1) | m | ||||||||||
| 20 | Subordinated bonds imputed as additional tier 1 capital (AT1) | m | ||||||||||
| 21 | Preferred shares allocated to additional tier 1 capital (AT1) | |||||||||||
| 22 | Bonds without a fixed term of maturity imputed to additional tier 1 capital (AT1) | |||||||||||
| 23 | Discounts on AT1 | l | ||||||||||
| 24 | = (19+20+21+22-23) Additional Tier 1 Capital (AT1) | |||||||||||
| 25 | = (18+24) Tier 1 Capital | 5,644,125 | 5,511,914 | |||||||||
| 26 | Voluntary provisions (additional) imputed as Tier 2 capital (T2) | n | 413,673 | 408,811 | ||||||||
| 27 | Subordinated bonds imputed as Tier 2 capital (T2) | n | 1,057,377 | 1,034,567 | ||||||||
| 28 | = (26+27) Equivalent tier 2 capital (T2) | 1,471,050 | 1,443,378 | |||||||||
| 29 | Discounts applied to T2 | l | ||||||||||
| 30 | = (28-29) Tier 2 capital (T2) | 1,471,050 | 1,443,378 | |||||||||
| 31 | = (25+30) Effective equity | 7,115,175 | 6,955,292 | |||||||||
| 32 | Additional basic capital required for the constitution of the conservation buffer | o | 972,969 | 958,862 | ||||||||
| 33 | Additional basic capital required to set up the countercyclical buffer | p | 194,594 | 191,772 | ||||||||
| 34 | Additional basic capital required for banks qualified as systemic | q | 486,484 | 359,573 | ||||||||
| 35 | Additional capital required for the evaluation of the adequacy of effective equity (Pillar 2) | r | 37,946 | 35,957 | ||||||||
| a) | Relates to the value of the investment in subsidiaries that are not consolidated. Applies only in the local consolidation when the bank has subsidiaries abroad, fully deducting its value in assets and CET1. |
| b) | Relates to the value of the asset items that are discounted from the regulatory capital, in accordance with the paragraph(a) of title N°3 of chapter 21-30 of the RAN. |
| c) | Relates to the credit equivalents of the derivative instruments, in accordance with the paragraph (b) of title N°3 of chapter 21-30 of the RAN. |
| d) | Relates to the contingent exposure according to the paragraph c) of the title N°3 of chapter 21-30 of the RAN. |
| e) | Relates to the intermediation of financial instrument assets in the name of the bank on behalf of third parties that are consolidated as established in the paragraph d) of the title N°3 of chapter 21-30 of the RAN. |
| f) | Relates to the estimated credit risk weighted assets according to the chapter 21-6 of RAN. If the bank does not have the authorization to apply internal methodologies, needs to inform the field 8.b as zero. |
| g) | Relates to market risk weighted assets according to the chapter 21-7 of the RAN. |
| h) | Relates to the estimated operational risk weighted assets according to the chapter 21-8 of the RAN. |
| i) | Corresponds to the non-controlling interest, depending on the level of consolidation, up to 20% of the owners’ assets. |
| j) | Assets that correspond to goodwill. |
| k) | Relates to the balances of investment assets in non-business support companies that do not participate in the consolidation, above 5% of the owners’ equity. |
| l) | For CET1 and T2, banks must estimate the equivalent value for each tier of capital, as well as that obtained by fully applying Chapter 21-1 of the RAN. Then, the difference between the equivalent value and the fully applied value must be weighted by the discount factor in force on the reporting date according to the transitional provisions of Chapter 21-1 of the RAN and reported in this row. For AT1, discounts are applied directly if any. |
| m) | Provisions and subordinated bonds allocated to additional tier 1 capital (AT1), as established in Chapter 21-2 of the RAN. |
| n) | Provisions and subordinated bonds allocated to the equivalent definition of tier 2 capital (T2), as established in Chapter 21-1 of the RAN. |
| o) | Relates to the additional basic capital (CET1) for the constitution of the conservation buffer, as established in Chapter 21-12 of the RAN. |
| p) | Relates to the additional basic capital (CET1) for the constitution of the countercyclical buffer, as established in Chapter 21-12 of the RAN. |
| q) | Relates to the additional basic capital (CET1) for banks qualified as systemic banks, as established in Chapter 21-11 of the RAN. |
| r) | Relates to the additional capital for the evaluation of the sufficiency of the effective equity (Pillar 2) of the bank, as established in Chapter 21-13 of the RAN. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 45. | Information on Regulatory Capital and Capital Adequacy Ratios, continued: |
| Local and Overall consolidated |
Local and Overall consolidated |
|||||||||||
| Capital Adequacy Ratios and Regulatory Compliance according to Basel III | December 31, 2025 |
December 31, 2024 |
||||||||||
| No. Item | Item description (*) | Note | % | % | ||||||||
| 1 | Leverage Ratio (T1 I18/T1 I7) | 10.04 | % | 10.26 | % | |||||||
| 1.a | Leverage Ratio that the bank must meet, considering the minimum requirements | a | 3 | % | 3 | % | ||||||
| 2 | CET 1 Capital Ratio (T1 I18/T1 I11.b) | 14.50 | % | 14.37 | % | |||||||
| 2.a | CET 1 Capital Ratio that the bank must meet, considering the minimum requirements | a | 5.82 | % | 5.51 | % | ||||||
| 2.b | Capital buffer shortfall | b | ||||||||||
| 3 | Tier 1 Capital Ratio (T1 I25/T1 I11.b) | 14.50 | % | 14.37 | % | |||||||
| 3.a | Tier 1 Capital Ratio that the bank must meet, considering the minimum requirements | a | 7.35 | % | 7.03 | % | ||||||
| 4 | Regulatory Capital Ratio (T1 I31/T1 I11.b) | 18.28 | % | 18.13 | % | |||||||
| 4.a | Regulatory Capital Ratio that the bank must meet, considering the minimum requirements | a | 9.38 | % | 9.06 | % | ||||||
| 4.b | Regulatory Capital Ratio that the bank must meet, considering the charge for article 35 bis | c | N/A | N/A | ||||||||
| 4.c | Regulatory Capital Ratio that the bank must meet, considering the minimum requirements, conservation buffer and countercyclical buffer | b | 12.38 | % | 12.06 | % | ||||||
| 5 | Credit rating | d | A | A | ||||||||
| Regulatory compliance for Capital Adequacy | ||||||||||||
| 6 | Additional provisions computed in Tier 2 capital (T2) in relation to CRWA (T1 I26/T1 I8.a) | e | 1.25 | % | 1.25 | % | ||||||
| 7 | Subordinated bonds computed as Tier 2 capital (T2) in relation to CET 1 Capital | f | 18.23 | % | 18.40 | % | ||||||
| 8 | Additional Tier 1 Capital (AT1) in relation to CET 1 Capital (T1 I24/T1 I18) | g | ||||||||||
| 9 | Voluntary (additional) provisions and subordinated bonds computed as AT1 in relation to RWAs ((T1 I19+T1 I20)/T1 I11.b) | h | N/A | N/A | ||||||||
| (*) | T1 Ix: corresponds to item x of the previous table. |
| a) | In the case of the leverage indicator, the requirement is 3% without prejudice to the additional requirements for systemic banks that could be set according to the provisions of Chapter 21-30 of the RAN. |
In the case of core capital, the bank considers a charge of 4.5% of risk-weighted assets (RWA) plus the systemic charge and Pillar 2 requirements.
In Tier 1 capital, a value of 6% plus the systemic bank charge and Pillar 2 charge is considered the minimum requirement.
For effective equity, 8% of the RWA is considered, adding to this value the additional charges for systemic bank and Pillar 2.
The systemic bank and Pillar 2 requirements for Banco de Chile are equivalent to 1.25% and 0.13%, respectively. The transitional provisions require 100% of the capital charge per systemic bank (75% as of December 31, 2024) and 100% of the charge for Pillar 2 for Banco de Chile (25% as of December 31, 2024 equivalent to 0.125%) which is covered by 56.3% with basic capital).
| b) | The capital buffer deficit must be estimated according to the provisions of Chapter 21-12 of the RAN. This value defines the restriction on the distribution of dividends, as provided in the Chapter mentioned above. |
In the case of effective equity, the requirement of 100% of the conservation buffer of 2.5% and a counter-cyclical capital charge are added to the value reported in note 4.a). of 0.5.
| c) | It corresponds to the effective equity requirement in force by article 35 bis of the General Banking Law. |
| d) | It corresponds to the solvency classification as established in article 61 of the general banking law. |
| e) | Limit is equivalent to 1.25% when using standard methodology for determining CRWAs. |
| f) | Limit is equivalent to 50% of the basic capital, considering the discounts applied to these instruments according to Chapter 21-1 of the RAN. |
| g) | Additional Tier 1 capital cannot exceed 1/3 of core capital. |
| h) | Additional provisions and subordinated bonds could be temporarily allocated until November 2023 to AT 1 for up to 1% of the RWA as of December 1, 2021. This value decreased annually by 0.5% in accordance with the transitional provisions of Chapter 21-2 of the RAN. |
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 46. | 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) that are not yet effective as of December 31, 2025:
IAS 28 Investments in Associates and Joint Venture and IFRS 10 Consolidated Financial Statements.
In September 2014, the IASB issued this amendment, which clarifies the scope of the gains and losses recognized in a transaction, that involves an associate or joint venture, and that this depends on whether the asset sold, or contribution constitutes a business. Accordingly, the IASB concluded that all gains or losses must be recognized against loss of control of a business.
Likewise, the gains or losses that result from the sale or contribution of a subsidiary that does not constitute a business (definition of IFRS 3) to an associate or joint venture must be recognized only to the extent of unrelated interests in the associate or joint venture.
During December 2015, the IASB agreed to set the effective date of this amendment in the future, allowing its immediate adoption.
Banco de Chile and its subsidiaries will have no impact on the Consolidated Financial Statements as a result of the application of this amendment.
IFRS 18 – Presentation and Disclosure in Financial Statements.
In April 2024, IASB issued a new accounting standard, IFRS 18 Presentation and Disclosure in Financial Statements, replacing the IAS 1 Presentation of Financial Statements.
This new standard aims to improve the usefulness of the information presented and disclosures so that the comparability of the financial information is enhanced, complying with the qualitative characteristics defined in the conceptual framework of the International Financial Reporting Standards (IFRS).
According to the information provided by IASB, the standard introduces three new requirements:
| - | Improvement comparability of the statement of income. |
| - | Higher transparency in measuring performance defined by Management. |
| - | More useful grouping of the information in the financial statements. |
The standard will be effective for annual accounting periods beginning on or after January 1, 2027.
The Bank is still evaluating the impact.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 46. | New Accounting Pronouncements, continued: |
IFRS 9 and IFRS 7 Financial Instruments: Classification and Measurement
In May 2024, the IASB issued amendments to the classification and measurement requirements of IFRS 9, “Financial Instruments”, and to the disclosure requirements of IFRS 7, “Financial Instruments: Disclosures”, as follows:
Derecognition of financial liabilities settled by electronic transfer.
The amendment allows an entity to consider that a financial liability (or part of it) that is settled using an electronic payment system is cancelled, expires or the liability otherwise qualifies for derecognition before the settlement date, if certain specified criteria are met. An entity that chooses to apply the deregistration option would be required to apply it to all settlements made through the same electronic payment system.
Classification of financial assets
The amendment provides guidance on how an entity can evaluate whether the contractual cash flows of a financial asset are consistent with a basic loan agreement, for classification and measurement purposes.
The amendment also improves the description of the term “non-recourse”, meaning that a financial asset has “non-recourse” features if an entity’s ultimate right to receive cash flows is contractually limited to the cash flows generated by specific assets.
Disclosures
For investments in equity financial instruments designated at fair value through other comprehensive income, an entity is required to disclose the fair value gain or loss presented in other comprehensive income during the period, showing separately the fair value gain or loss that relates to investments derecognized in the period and the fair value gain or loss that relates to investments held at the end of the period.
Additional disclosures are required for financial assets and liabilities with contractual terms that reference a contingent event (including those that are linked to Environmental, Social and Governance factor (ESG)).
The amendments are effective for annual periods beginning on or after January 1, 2026. Early adoption is permitted.
The Bank is in the process of analyzing the impact of this new standard.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 47. | Subsequent Events: |
| a) | During 2026, Banco de Chile issued the following placements in the local market of senior, dematerialized and bearer bonds issued by Banco de Chile and registered with the Securities Registry of the Financial Market Commission: |
| Date | Registration number in the Securities Registry |
Serie | Amount | Currency | Maturity date | Average rate | ||||||||||||
| January 8, 2026 (*) | 20240002 | HW | 750,000 | UF | 06/01/2044 | 2.93 | % | |||||||||||
| January 12, 2026 (*) | 20240002 | HW | 100,000 | UF | 06/01/2044 | 2.92 | % | |||||||||||
| January 14, 2026 | 11/2022 | FU | 500,000 | UF | 11/01/2032 | 2.81 | % | |||||||||||
| January 14, 2026 | 11/2022 | GG | 350,000 | UF | 05/01/2035 | 2.89 | % | |||||||||||
| January 14, 2026 (*) | 20240002 | HW | 300,000 | UF | 06/01/2044 | 2.91 | % | |||||||||||
| January 15, 2026 | 11/2022 | FU | 500,000 | UF | 11/01/2032 | 2.78 | % | |||||||||||
| January 15, 2026 (*) | 20240002 | HH | 400,000 | UF | 12/01/2036 | 2.87 | % | |||||||||||
| January 15, 2026 (*) | 20240002 | HW | 50,000 | UF | 06/01/2044 | 2.89 | % | |||||||||||
| February 10, 2026 | 11/2022 | FG | 860,000 | UF | 11/01/2030 | 2.59 | % | |||||||||||
| March 5, 2026 | 11/2022 | FG | 1,000,000 | UF | 11/01/2030 | 2.51 | % | |||||||||||
| (*) | The bonds have been registered under the Automatic Registration modality, with the registration number dated April 5, 2024. |
| b) | On January 21, 2026, Banco de Chile reported that Mr. Francisco Pérez Mackenna submitted his resignation from the positions of Regular Director and Vice Chairman of Banco de Chile, effective January 31, 2026, which was accepted by the Board of Directors. Likewise, the Board agreed to appoint Mr. Óscar Hasbún Martínez as Regular Director, replacing Mr. Francisco Pérez Mackenna, effective February 1, 2026 and until the next Annual General Shareholders’ Meeting. Finally, the Board agreed to appoint Regular Director Mr. Jean-Paul Luksic Fontbona as Vice Chairman of the Board, effective February 1, 2026. |
| c) | On January 29, 2026, the Board of Directors of Banco de Chile agreed to convene an Ordinary Shareholders’ Meeting for March 26, 2026 in order to propose, among other matters, the following distribution of profits for the year ended on December 31, 2025: |
| a) | Deduct and withhold from the net income of the year, an amount equivalent to the effect of inflation of the paid capital and reserves according to the variation of the Consumer Price Index that occurred between November 2024 and November 2025, amounting to Ch$182,336,381,737 which will be added to retained earnings from previous periods. |
| b) | Distribute in the form of dividend the remaining profit, corresponding to a dividend of Ch$9.99757030464 to each of the 101,017,081,114 shares of the Bank. |
Consequently, it will be proposed a distribution as dividend of 84.7% of the profits for the year ended December 31, 2025.
Additionally, in accordance with the Bank’s Bylaws, and considering the amendment to Article Eight approved at the Extraordinary Shareholders’ Meeting held on November 10, 2025, the election of the Board of Directors to take place at the upcoming Ordinary Shareholders’ Meeting on March 26, 2026 will require the appointment of nine Principal Directors, as well as two Alternate Directors.
F-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
| 47. | Subsequent Events, continued: |
| d) | On March 6, 2026, the subsidiary Banchile Administradora de Fondos S.A. reported that Mr. José Luis Vizcarra Villalobos submitted his resignation from his position as Director of Banchile Administradora General de Fondos S.A. |
| e) | On March 12, 2026, the subsidiary Banchile Administradora de Fondos S.A. reported that Mr. Andrés Ergas Heymann submitted his resignation from his position as Director of Banchile Administradora General de Fondos S.A. |
| f) | On March 12, 2026, Banco de Chile reported that Mr. Andrés Ergas Heymann submitted his resignation from his position as Regular Director of Banco de Chile. At the Ordinary Meeting of the Board of Directors held on the same date, the Board of Directors of Banco de Chile acknowledged and accepted said resignation. |
Likewise, and in accordance with the provisions of Article Eight of the Bank’s Bylaws, the First Alternate Independent Director, Mr. Paul Furst Gwinner, assumed the position of Regular Independent Director.
| g) | On March 26, 2026, Banco de Chile reported that, at the Ordinary Shareholders’ Meeting, the Board of Directors was fully renewed, as the legal and bylaw-mandated three-year term of office of the outgoing Board of Directors had expired. |
Following the corresponding vote held at said meeting, the following individuals were elected as Directors of the Bank for a new three-year term:
| Regular Directors: | Hernán Büchi Buc | |
| Vivianne Caumont | ||
| Julio Santiago Figueroa | ||
| Paul Furst Gwinner (Independent) | ||
| Pablo Granifo Lavín | ||
| Oscar Hasbún Martínez | ||
| Ana Holuigue Barros (Independent) | ||
| Patricio Jottar Nasrallah | ||
| Jean-Paul Luksic Fontbona |
| First Alternate Director: | Nicolás Lewin Muñoz (Independent) | |
| Second Alternate Director: | Sandra Marta Guazzotti |
Furthermore, at an Ordinary Meeting of the Board of Directors held on the same date, the following appointments and designations were agreed upon:
| Chairman: | Pablo Granifo Lavín | |
| Vice Chairman: | Jean-Paul Luksic Fontbona | |
| Vice Chairman: | Julio Santiago Figueroa |
| h) | On March 26, 2026 the Bank informed the CMF and local stock exchanges that at the Ordinary Shareholders’ Meeting held on the same day, it was resolved to approve the payment of a dividend in the amount of CLP $9.99757030464 per share, to be paid out of the net income for the financial year 2025. |
| i) | On April 27, 2026, the subsidiary Operadora de Tarjetas Banchile Pagos S.A. reported that, at an extraordinary meeting of its Board of Directors, the resignation submitted by its General Manager, Mr. Rodrigo Devía González, was acknowledged, which will become effective on April 30, 2026. |
At the same meeting of the Board of Directors, it was resolved to appoint Mr. Felipe Pérez González as General Manager of the Company, effective as of May 1, 2026. Mr. Pérez González currently serves as the Company’s Commercial Manager.
These Consolidated Financial Statements of Banco de Chile for the year ended December 31, 2025 were approved by the Directors on April 29, 2026.
In Management’s opinion, there are no other significant subsequent events that affect or could affect the Consolidated Financial Statements of Banco de Chile and its subsidiaries between December 31, 2025 and the date of issuance of these Consolidated Financial Statements.
F-
Exhibit 1.1
BANCO DE CHILE
BYLAWS
TITLE I
NAME, DOMICILE AND DURATION OF THE COMPANY
Article One:
A company is hereby created which shall do business under the name of “BANCO DE CHILE,” and shall be governed by these bylaws, by the General Banking Law, and by any other legal and statutory rules currently in effect or to be enacted in the future that may be applicable to it.
Article Two:
The company shall have its corporate domicile in the city of Santiago, where its Headquarters or Main Office will be located, regardless of any other branches or agencies that it may establish in Chile or abroad, pursuant to the Law. Its Board of Directors shall meet, and its General Management shall operate in the city of Santiago.
Article Three:
The term of duration of the company shall be indefinite.
TITLE II
PURPOSE AND OPERATIONS OF THE COMPANY
Article Four:
The Bank shall be engaged in performing any kind of acts, enter into any kind of contracts, carry out any kind of business, and transactions usually authorized to be performed and carried out by banking institutions under the General Banking Law, without prejudice to expanding or restricting its scope of action consistent with legal rules currently in full force and effect or to be enacted in the future.
TITLE III
CAPITAL AND STOCK
Article Five:
The Bank’s capital is CH$ 2,418,833,181,067 divided into 101,017,081,114 nominative shares with no par value, which are fully subscribed and paid-up in accordance with the First Transitional Article.
Article Six:
The company shall maintain a Shareholders’ Registry.
TITLE IV
MANAGEMENT
Article Seven:
Management of the Bank shall be exercised by a Board of Directors, which shall represent it judicially and extra-judicially, for the achievement of the corporate purpose, a fact that shall not have to be proven to third parties. It is vested with all powers to manage and dispose which the law or these bylaws do not establish as exclusive to the Shareholders Meeting, and it is also empowered to perform such acts and enter into any kind of agreements or contracts with respect to which the laws require a special power of attorney. The foregoing is without prejudice to the powers of the General Manager. Directors shall be compensated for their services, and the amount of such compensation shall be set at the Shareholders’ Meeting.
Article Eight:
The Board of Directors shall consist of nine regular directors (“Directores Titulares”) and two alternate directors (“Directores Suplentes”), whether or not shareholders, elected by the respective Shareholders’ Meeting, all of whom shall hold offices for three years, and may be reelected indefinitely. The election of directors shall be undertaken in a single vote, and those receiving the greatest number of votes shall be elected until the number of directors who must be elected is reached. Likewise, separately, in a single vote, alternate directors shall be elected. The Board of Directors elected by shareholders may only be removed in its entirety by the resolution adopted at an Ordinary or Extraordinary Shareholders’ Meeting, and therefore individual removal is not allowed. Alternate directors may always participate at the meetings of the Board of Directors with right to speak, and they shall only have right to vote in case of a temporary absence of the director/s they replace. The person who received the greatest number of votes among the alternates shall be the first alternate director, and the second alternate director shall be the one who received the second greatest number of votes. In the case of a temporary absence of one or more directors, they may be replaced temporarily by the alternate directors in the order of precedence established in the bylaws.
In the case of a vacancy of one or more regular directors (“Directores Titulares”), for any reason, vacancies shall be filled as follows:
| a) | Vacancies of directors shall be filled by alternate directors in the aforementioned order of precedence, except if the respective alternate director in a period of three business days calculated from the giving of notice thereof, states in writing his intention to continue acting as an alternate director; and |
| b) | If vacancies occur among regular directors which were not filled in the manner established in letter a) above, the Board of Directors, at the first meeting it holds, shall proceed to name the relevant successor or successors, who shall hold office until the next Ordinary Shareholders Meeting is held, at which time the final appointment shall be made. The director or directors so named by the Shareholders Meeting shall remain in office only during the period of time remaining to complete the term of office of the replaced director or directors. |
In the case of a vacancy of one or more alternate director for any cause, the Board of Directors, at the first meeting it holds, shall proceed to name the replacement or replacements, who shall hold office until the next Ordinary Shareholders Meeting, at which time the final appointment shall be made. The alternate director or directors so named by the Shareholders Meeting shall remain in office only during the period of time remaining to complete the term of office of the replaced director or directors. In the event the Board of Directors names a replacement for an alternate Director, the designee shall have the same order of precedence as the replaced alternate director.
Article Nine:
Meetings of the Board of Directors shall be held with the attendance of no fewer than five of its regular or alternate members, and resolutions shall be adopted by an absolute majority of directors attending with right to vote. In case of a tie, the chairman of the meeting shall have a casting vote.
Article Ten:
Meetings of the Board of Directors shall be ordinary or extraordinary. Ordinary meetings shall be those that are held on the dates and at the times established in advance by the Board of Directors, at least once per month. Extraordinary meetings shall be held when specially called by the President, himself, or at the direction of one or more directors, subject to the President’s prior assessment of the need for the meeting, unless it is requested by an absolute majority of the directors, in which case the meeting must necessarily be held without prior assessment. Notices for Extraordinary meetings shall be made through communication methods that provide reasonable assurance of their reliability and are unanimously agreed upon by the Board of Directors, or alternatively by certified mail posted, at least, four business days in advance, or two business days if respective notice has been delivered through a Notary Public or by the respective Chilean Consul if the Director is domiciled outside Chile. Likewise, for this type of Notices and together with the delivery of the aforesaid letter or by posting in the mail a copy of the Notice shall be forwarded by electronic mail. A Notice of an Extraordinary meeting shall contain a reference to the matter to be dealt with, and the Notice may be omitted if all full members of the Board of Directors unanimously attend thereat.
Article Eleven:
At the first meeting held by the Board of Directors, after the Shareholders’ Meeting that appointed it, the Board of Directors shall choose its Chairman and two Vice Chairman, and these persons shall also serve in the same roles for the company. The Secretary of the Board of Directors shall also be appointed at that same meeting.
Article Twelve:
Directors who, with regards to a specific transaction, have an interest themselves or as representatives of another person, shall report such interest to the other directors and refrain from deliberating and voting.
Article Thirteen:
All elections of directors shall be published in a newspaper in the Bank’s domicile and shall be reported to the Financial Market Commission, to which shall be sent an authorized copy of the public deed prepared from the Minutes of the Shareholders Meeting or the meeting of the Board of Directors where the appointments have been made. The appointment of a General Manager shall likewise be reported to the aforementioned Commission and be documented in a public deed.
TITLE V
PRESIDENT
Article Fourteen:
The President of the Bank, beyond the other powers granted to him by these bylaws or by Law, shall have the following powers and obligations, to wit:
One) Shall preside over meetings of both the Board of Directors and Shareholders; Two) Shall call meetings of the Board of Directors; Three) Shall propose to the Board of Directors measures aiming at furthering the business of the Bank and improving the organization and regime of all aspects of the offices; Four) Shall sign all reports and notes or resolutions adopted by the Board of Directors and the Shareholders at the relevant Meetings; and Five) Unless otherwise agreed upon by the Shareholders Meeting or the Board of Directors, if applicable, he shall sign the public deed containing the Minutes of the meetings of the former or the latter.
Article Fifteen:
In case of absence or incapacity of the President of the Bank, he shall be replaced in by the Vice President appointed, for this purpose, by the Board of Directors. Likewise, in case of absence or incapacity of the appointed Vice President, he shall be replaced by the Director appointed by the Board of Directors, for such purpose. The replacement is an internal procedure of the company and shall not require any formality and it shall not be necessary to prove its appropriateness to third parties for the validity of acts performed by the successor, the mere fact of the successor’s acting being sufficient for the effectiveness thereof.
TITLE VI
GENERAL MANAGER
Article Sixteen:
The General Manager is responsible for:
One) Leading and performing the general transactions of the Bank, making its acts conform to the laws, regulations, bylaws, and resolutions of the Board of Directors; Two) In addition to the authorities corresponding to him as a business agent by reason of his position, he shall have general power of attorney for the Bank at all its offices, with express authority to revoke such powers of attorney as may have been granted at any time. In the legal sphere, beyond the authorities granted to him by the first section of Article Seven of the Civil Procedure Code, he shall have the special power to abandon actions filed in the first instance; accept counterclaims; answer interrogatories; waive appeals or legal terms; approve Agreements; settle; grant powers to arbitrators; and receive money. Settlements and arbitration agreements made by the Board of Directors shall be signed by the General Manager, with no requirement beyond inserting the pertinent part of the Minutes authorized by the Secretary in the respective public deed or private document. He may also, in any case, and without prejudice to the powers of the President, sign public deeds or contracts agreed by the General Shareholders Meeting or the Board of Directors, with no requirement beyond the aforementioned, provided that they must be made public deeds; Three) Appointing such Managers to be named for the proper performance of the company business; Four) Granting powers of attorney or delegate all or part of his authorities to other persons for special cases or business; Five) Reporting to the Board of Directors on the handling, management, and financial condition of the Bank in the manner and at the time it and/or the Financial Market Commission may determine; Six) Attending meetings of the Board of Directors with a right to speak; and Seven) Performing other functions decided by the Board of Directors and, in general, exercise any other functions which appertain to him pursuant to the Law and these bylaws. In case of temporary absence or inability, the General Manager shall be replaced by the Manager designated by the Board of Directors.
TITLE VII
SHAREHOLDERS MEETINGS
Article Seventeen:
Shareholders shall hold ordinary or extraordinary meetings. The former shall be held once a year, within the four-month period following the date of the close of the fiscal year. At those meetings the shareholders shall review all matters that are proper for them to consider, without being limited to the matters described in the respective notice of the meeting. The latter may be held at any time, to decide on any matters that the law or these Bylaws authorize the shareholders meetings to transact and provided that such matters are specified in the corresponding notices.
Article Eighteen:
The resolutions passed at properly called and convened Shareholders Meetings pursuant to the law and the bylaws shall bind all shareholders. Shareholder Meetings shall be held in the city of Santiago.
Article Nineteen:
Notwithstanding the holding of Shareholders’ Meetings with the physical attendance of shareholders or their proxies, participation and/or voting may also take place through systems and procedures agreed upon by the Board of Directors, in accordance with the law and current regulations, including the implementation of technological means that allow for in-person or remote participation and/or voting.
Article Twenty:
If any of the persons who must sign Minutes of the Shareholders Meeting should die, be absent, or unable for any reason to sign it, a note shall be made at the end of the Minutes stating the respective circumstances of the impediment.
Article Twenty-One:
The Minutes shall contain an extract of the resolutions adopted at the meeting. Only upon unanimous consent of the attendees may the evidence of any event occurring at the meeting, and which is related to the interests of the company, be deleted.
TITLE VIII
ANNUAL REPORT AND BALANCE SHEET
Article Twenty-Two:
The Bank shall prepare its General Balance Sheet annually as of December thirty-first.
Article Twenty-Three:
The Board of Directors shall submit for consideration at the Ordinary Shareholders Meeting, a reasoned Report on the financial condition of the company over the last fiscal year, accompanied by the General Balance Sheet, the Statement of Profit and Loss, and the Report of the External Auditors. The Annual Report will be made available to the shareholders in the Bank’s Headquarters and its website, no later than the date of the first notice convening the appropriate Ordinary Shareholders’ Meeting. Likewise, the Annual Report shall be made available to the general public on the aforementioned website or through other means established by applicable regulations.
TITLE IX
DISSOLUTION AND LIQUIDATION
Article Twenty-Four:
The Company shall be dissolved by resolution adopted in that regard at an Extraordinary Shareholders Meeting, approved by the Financial Market Commission in the manner stipulated by law, and for any other legal causes. The aforesaid is without prejudice to that established in Title Fifteenth of the General Banking Law.
Article Twenty-Five:
Once the voluntary dissolution mentioned in the preceding article has been agreed upon, the Shareholders Meeting shall elect a Liquidation Committee consisting of three members to proceed wind up the Company, who shall have the powers, obligations, and responsibilities stipulated in the law, and who shall comply with the provisions of the Chilean Corporations Law and its Regulations.
The Shareholders Meeting shall establish the duration of the functions of the Liquidation Committee, and shall determine the compensation to be paid to its members.
TITLE X
AUDITING THE MANAGEMENT
Article Twenty-Six:
The Ordinary Shareholders Meeting shall annually appoint independent external auditors to examine the accounting, inventory, balance sheets, and financial statements of the company, and who shall have the obligation to report in writing to the next Ordinary Shareholders Meeting on the performance of their duties.
TITLE XI
JURISDICTION
Article Twenty-Seven:
Differences that arise among shareholders in their capacity as such, or between them and the Company or its managers, either during the life of the Company or during its liquidation, shall be submitted for resolution to an arbitrator who shall have the ability to establish procedural rules for the proceeding and who shall be bound by the law as to decisions on the merits of the case, who must be named by joint agreement of the parties or by the Ordinary Courts, alternatively, in case of a disagreement on his appointment. The award to be rendered by the arbitrator shall be subject to a motion for appeal and cassation on the merits. Such arbitrator shall be, or have been, at the time of the appointment, an attorney who is or has served as an auxiliary judge on the Court of Appeals of Santiago or the Supreme Court, for no less than one year. The arbitration established in this clause is without prejudice to, if a conflict occurs, the petitioner’s being able to remove the matter from the jurisdiction of the arbitrator and submit it for a decision by the ordinary courts.
TRANSITIONAL ARTICLES
First Transitional Article:
The Bank’s capital is CH$ 2,418,833,181,067, divided into 101,017,081,114 nominative shares with no par value, which are subscribed and paid-up as follows:
| a) | With the sum of CH$ 2,271,400,678,608 divided into 99,444,132,192 nominative shares with no par value, all of them totally subscribed and paid; |
| b) | With the sum of CH$147,432,502,459 which corresponds to the issuance of 1,572,948,922 fully paid-in shares, of no par value, with charge to the net income obtained during the fiscal year 2017 that was not distributed as a dividend, in accordance with the resolutions adopted by the Extraordinary Shareholders Meeting held on March 22, 2018. The new shares that will be issued shall be distributed among the shareholders in the proportion of 0.02238030880 fully paid-in shares for each share they own at the relevant date in accordance with the Law. |
Second Transitional Article:
At the next Ordinary Shareholders’ Meeting held after the registration and publication of the certificate issued by the Financial Market Commission regarding the amendments to the Bylaws approved at the Extraordinary Shareholders’ Meeting held on November 10, 2025, the election of the nine Principal Directors shall take place in accordance with the amendment to Article Eight approved at said Extraordinary Meeting. Likewise, from the date of the aforementioned Ordinary Shareholders’ Meeting, Article Nine of the Bylaws shall apply pursuant to the wording approved at the aforementioned Extraordinary Meeting. During the period between the legalization of the Bylaw amendment and the date of the next Ordinary Shareholders’ Meeting, the current Board of Directors, composed of eleven Principal Directors and two Alternate Directors, shall remain in full exercise of its functions, and Board meetings shall be validly constituted with the attendance of no fewer than six of its principal or alternate members.
Eduardo Ebensperger Orrego
Chief Executive Officer
BANCO DE CHILE
Banco de Chile was established as a corporation as a result of the merger of the banks Nacional de Chile, Valparaíso and Agrícola, as evidenced in the deed dated October 28, 1893, granted before Notary Public of the city of Santiago Mr. Eduardo Reyes Lavalle, authorized by Supreme Decree of November 28 of the same year, registered on page 125 No. 150 of the Commercial Ledger of Santiago of the year 1893.
The bylaws were amended by the following public deeds:
| 1. | Deed dated May 4, 1896, before Notary Public Mr. C. R. Abalos, authorized by Supreme Decree of May of the same year. |
| 2. | Deed dated June 11, 1906, before Notary Public Mr. E. Reyes Lavalle, authorized by Supreme Decree of June of the same year, registered in the Commercial Ledger of Santiago on pages 1037 and 1039 Nos. 305 and 306 of the year 1906. |
| 3. | Deed dated July 31, 1911, before Notary Public Mr. E. Reyes Lavalle, registered in the Commercial Ledger of Santiago on page 5 No. 9 of the same year. |
| 4. | Deed dated July 31, 1917, before Notary Public Mr. A del Río, authorized by Supreme Decree of August 25 of the same year, registered in the Commercial Ledger of Santiago on page 570 No. 376 of 197. |
| 5. | Deed dated October 25, 1919, before Notary Public Mr. Javier Jara, authorized by Supreme Decree of November of the same year, registered in the Commercial Ledger of Santiago on page 870 reverse No. 668 of the year 1919. |
| 6. | Deed dated August 30, 1928, before Notary Public Mr. A. del Río, authorized by Supreme Decree of December 11 of 1928, registered in the Commercial Ledger of Santiago on page 206 reverse No. 1077 of the year 1928. |
| 7. | Deed dated January 18, 1940, before Notary Public Mt. L. Hiriart Corvalán, authorized by Supreme Decree of April 17 of the same year, registered in the Commercial Ledger of Santiago on page 675 No. 60 of the year 1940. |
| 8. | Deed dated January 16, 1946, before Notary Public Mr. Luis Azócar, authorized by Supreme Decree of July 24 of the same year, registered in the Commercial Ledger of Santiago on page 2095 reverse No. 1551 of the year 1946. |
| 9. | Deed dated Augst 4, 1952, before Notary Public Mr. J. Echeverría V., authorized by Supreme Decree of September 24 of the same year, registered in the Commercial Ledger of Santiago on page 3697 No. 2251 of the year 1952. |
| 10. | Deed dated January 27, 1956, before Notary Public Mr. Javier Echeverría, authorized by Supreme Decree of April 4 of the same year, registered in the Commercial Ledger of Santiago on page 2013 No. 1140 of the year 1956. |
| 11. | Deed dated October 13, 1956, before Notary Public Mr. Javier Echeverría, authorized by Supreme Decree of December 18 of the same year, registered in the Commercial Ledger of Santiago on page 115 No. 61 of the year 1957. |
| 12. | Deed dated August 27, 1957, before Notary Public Mr. Javier Echeverría, authorized by Supreme Decree of October 31 of the same year, registered in the Commercial Ledger of Santiago on page 5934 No. 3232 of the year 1957. |
| 13. | Deed dated August 16, 1958, before Notary Public Mr. Javier Echeverría, authorized by Supreme Decree of October 6 of the same year, registered in the Commercial Ledger on page 5147 No. 2687 of the year 1958. |
| 14. | Deed dated January 18, 1961, before Notary Public Mr. Gustavo Infante, deputy for Mr. Javier Echeverría, registered in the Commercial Ledger on page 2365 No. 2041 of the year 1961. |
| 15. | Deed dated January 16, 1963, before Notary Public Mr. Gustavo Infante, deputy of Mr. Javier Echeverría, registered in the Commercial Ledger on page 1781 No. 939 of the year 1963. |
| 16. | Deed dated August 7, 1964, before Notary Public Mr. Gustavo Infante, deputy of Mr. Javier Echeverría, registered in the Commercial Ledger on page 6964 No. 3593 of the year 1964. |
| 17. | Deed dated January 31, 1966, before Notary Public Mr. Javier Echeverría, registered in the Commercial Ledger on page 2205 No. 1119 of the year 1966. |
| 18. | Deed dated August 3, 1966, before Notary Public Mr. Javier Echeverría, registered in the Commercial Ledger on page 7268 No. 3742 of the year 1966. |
| 19. | Deed dated August 18, 1967, before Notary Public Mr. Gustavo Infante, deputy of Mr. Javier Echeverría, registered in the Commercial Ledger on page 7434 No. 3114 of the year 1967. |
| 20. | Deed dated February 21, 1969, before Notary Public Mr. Jaime García, registered in the Commercial Ledger on page 3101 No. 1122 of the year 1969. |
| 21. | Deed dated January 30, 1970, before Notary Public Mr. Víctor Bianchi, deputy of Mr. Jaime García, registered in the Commercial Ledger on page 2894 No. 1274 of the year 1970. |
| 22. | Deed dated April 1, 1971, before Notary Public Mr. Sergio Rodríguez, registered in the Commercial Ledger on page 6081 No. 2824 of the year 1971. |
| 23. | Deed dated March 22, 1976, supplemented by one dated April 8 of the same year, both before Notary Public Mr. Andrés Rubio, registered in the Commercial Ledger on page 2892 No. 1666 of the year 1976. |
| 24. | Deed dated February 1, 1977, before Notary Public Mr. Andrés Rubio, registered in the Commercial Ledger on page 1977 No. 1075 of the year 1977. |
| 25. | Deed dated February 10, 1978, before Notary Public Mr. Andrés Rubio, registered in the Commercial Ledger on page 2268 No. 1149 of the year 1978. |
| 26. | Deed dated March 15, 1979, before Notary Public Mr. Andrés Rubio, registered in the Commercial Ledger on page 4240 No. 3008 of the year 1979. |
| 27. | Deed dated March 26, 1981, before Notary Public Mr. Andrés Rubio, bylaw amendment approved by Resolution No. 111 of the Superintendency of Banks and Financial Institutions, dated March 14, 1981. The corresponding certificate of said Superintendency was registered on page 9,681 No. 5,422 of the Commercial Ledger of the year 1981 and published in the Official Gazette on June 3 of the same year. |
| 28. | Deed dated April 19, 1982, before Notary Public Mr. Andrés Rubio, bylaw amendment approved by Resolution No. 102 of the Superintendency of Banks and Financial Institutions, dated June 22, 1982. The corresponding certificate of said Superintendency was registered on page 11,689 No. 6,600 of the Commercial Ledger of the year 1982 and published in the Official Gazette on August 18, 1982. |
| 29. | Deed dated June 11, 1985, before Notary Public Mr. Álvaro Bianchi R., bylaw amendment approved by Resolution No. 71 of the Superintendency of Banks and Financial Institutions, dated June 28, 1985. The corresponding certificate of said Superintendency was registered on page 10,269 No. 5,286 of the Commercial Ledger of the year 1985 and published in the Official Gazette on July 10, 1985. |
| 30. | Deed dated July 19, 1996, before Notary Public Mr. René Benavente C., formalizing the resolution of the Extraordinary Shareholders’ Meeting of July 18, 1996, whereby the company then known as Banco de Chile adopted the provisions of sections three and five of Law No. 19,396 on the amendment of payment terms of the subordinated obligation with the Central Bank of Chile. |
By Resolution No. 132 of September 17, 1996, corrected on the 20th of the same month and year, the Superintendency of Banks and Financial Institutions approved the resolution that was formalized in the public deed dated July 19, 1996 and authorized the existence as well as approved the bylaws of Banco de Chile as the legal successor of the Banco de Chile established in 1893, pursuant to article 25 of Law 19.396. The corresponding certificate of said Superintendency was registered on page 23,859 No. 18,638 of the Commercial Ledger of the year 1996 and was published in the Official Gazette on September 26, 1996.
| 31. | Deed dated October 13, 1999, before Notary Public Mr. René Benavente C., bylaw amendment approved by Resolution No. 102 of the Superintendency of Banks and Financial Institutions, dated November 9, 1999, which adopted a new consolidated, coordinated, updated and systematized text of the bylaws of Banco de Chile. The certificate of said Superintendency was registered on page 27,736 No. 22,037 of the Commercial Ledger of the year 1999 of Santiago’s Real Estate Registrar and was published in the Official Gazette on November 17 of the same year. |
| 32. | At Banco de Chile’s Extraordinary Shareholders’ Meeting held on December 6, 2001, recorded in public deed dated December 7, 2001 before Notary Public Mr. René Benevante Cash, and in Banco de A. Edwards’ Extraordinary Shareholders’ Meeting held on December 18, 2001, recorded in public deed dated December 19, 2001 before Notary Public Mt. Andrés Rubio Flores, the merger by incorporation was agreed and approved, by the absorption of Banco de A. Edwards by Banco de Chile, effective January 1, 2022. |
Further, the aforementioned Extraordinary Shareholders’ Meetings of Banco de Chile and Banco de A. Edwards agreed upon a consolidated and systemized bylaws of Banco de Chile.
The Superintendency of Banks and Financial Institutions approved the adoptions agreed upon in the Shareholders’ Meetings of both banks, by Resolution No. 146 dated December 21, 2001, which was published in the Official Gazette on December 26 of the same year and registered on page 33,188 No. 27,064 of Santiago’s Commercial Ledger on December 21, 2001.
Further, the certificate that contains the bylaw amendment of Banco de Chile was recorded on page 33,189 No. 27,065 of Santiago’s Commercial Ledger corresponding to the year 2001 and was published in the Official Gazette on December 26 of the same year.
| 33. | At Banco de Chile’s Extraordinary Shareholders’ Meeting held on March 23, 2006, recorded in public deed dated April 5, 2006 before Notary Public Mr. Andrés Rubio Flores, it was resolved to increase the share capital by the amount of CLP 30,984,217,291, corresponding to the issuance of 957,781,060 fully paid shares, issued and paid with undistributed profits from the 2005 fiscal year, in the manner set out in the aforementioned Extraordinary Shareholders’ Meeting. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 39 dated April 13, 2006, which was published in the Official Gazette on April 18 of the same year, and registered on page 20,718 No. 14,349 of Santiago’s Commercial Ledger on April 17, 2006.
| 34. | At Banco de Chile’s Extraordinary Shareholders’ Meeting held on March 22, 2007, recorded in public deed dated April 9, 2007 before the Notary Public of Santiago, Mr. Andrés Rubio Flores, it was resolved to increase the share capital by the amount of CLP 33,833,485,728, which was paid through the issuance of 882,459,200 fully paid shares, without par value, payable with the profits of the 2006 fiscal year that were not distributed as dividend, in the manner set out in the Extraordinary Shareholders’ Meeting. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 41 dated April 23, 2007, which was published in the Official Gazette on April 25 of the same year, and registered on page 16,267 No. 12,046 of Santiago’s Commercial Ledger on April 24, 2007.
| 35. | At Banco de Chile’s Extraordinary Shareholders’ Meeting held on May 17, 2007, recorded in public deed dated May 18, 2007, complemented by public deed dated May 31, 2007, both before the Notary Public of Santiago, Mr. Andrés Rubio Flores, it was resolved to increase the share capital by the amount of CLP 110,000,000,000, which was paid through the issuance of 2,516,010,979 fully payable shares, without par value, which were to be subscribed and paid in the manner and within the time period indicated in the aforementioned Extraordinary Shareholders’ Meeting. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 58 dated June 1, 2007, which was published in the Official Gazette on June 6 of the same year, and registered on page 22,282 No. 16,239 of Santiago’s Commercial Ledger on June 5, 2007.
| 36. | In Extraordinary Shareholders’ Meetings of Banco de Chile and Citibank Chile, both held on December 27, 2007, the merger of both banks was resolved, through the incorporation of the latter into the former, along with the adoption of a consolidated version of Banco de Chile’s bylaws. The minutes of Banco de Chile’s Shareholders’ Meeting was reduced to public deed on December 28, 2007 before the Notary Public of Santiago, Mr. Andrés Rubio Flores and the minutes of Citibank Chile’s Shareholders’ Meeting was reduced to public deed on December 27, 2007, before the Notary Public of Santiago, Mr. Iván Torrealba Acevedo. |
The aforementioned resolutions were approved by the Superintendency of Banks and Financial Institutions by Resolution No. 3 and its corresponding Bylaw Amendment Certificate dated January 8, 2008, which were published in the Official Gazette No. 38,958 on January 11, 2008, and registered on page 1,284 No.820 and on page 1,286 No. 821, both in Santiago’s Real Estate Registrar’s Commercial Ledger of the year 2008.
| 37. | In Banco de Chile’s Extraordinary Shareholders’ Meeting, held on March 26, 2009, recorded in public deed dated April 7, 2009 before the Notary Public of Santiago Mr. Andrés Rubio Flores, it was resolved to increase the share capital by the amount of CLP 52,260,575,508, which was paid through the issuance of 1,671,803,439 fully paid shares, without par value, payable with the profits of the 2008 fiscal year that were not distributed as dividend, in the manner set out in the aforementioned Extraordinary Shareholders’ Meeting. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 110 dated April 16, 2009, which was published in the Official Gazette on April 24 of the same year, and registered on page 18,021 No. 12,091 of Santiago’s Commercial Ledger on April 21, 2009.
| 38. | In Banco de Chile’s Extraordinary Shareholders’ Meeting, held on March 25, 2010, recorded in public deed dated April 12, 2010 before the Notary Public of Santiago, Mr. Andrés Rubio Flores it was resolved to amend Banco de Chile’s bylaws, adding a fourth transitory article in order to establish the “distributable net profit” in compliance with the agreement set forth in the contract dated November 8, 1996 between the Central Bank of Chile and SM Chile S.A., pursuant to Law No. 19,396. Additionally, in accordance with what was approved at the Meeting and with the provisions of Chapter 18-4 of the Updated Compilation of Regulations of the Superintendency of Banks and Financial Institutions, a consolidated version of the bylaws was issued. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 56 dated April 22, 2010, which was published in the Official Gazette on April 30 of the same year, and registered on page 20,718 No. 14,036 of Santiago’s Commercial Ledger on April 29, 2010.
| 39. | In Banco de Chile’s Extraordinary Shareholders’ Meeting, held on January 20, 2011, recorded in public deed dated January 27 of the same year before Notary Public of Santiago Mr. Andrés Rubio Flores, it was resolved to increase the share capital by the amount of CLP 240,000,000,000, which was paid through the issuance of 3,385,049,365 fully payable shares, without par value, which were to be subscribed and paid in the manner and within the time period indicated in the aforementioned Extraordinary Shareholders’ Meeting. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 60 dated February 7, 2011, which was published in the Official Gazette on February 10 of the same year, and registered on page 8,136 No. 6,092 of Santiago’s Commercial Ledger on February 8, 2011.
| 40. | In Banco de Chile’s Extraordinary Shareholders’ Meeting, held on March 17, 2011, recorded in public deed dated March 22, 2011 before the Notary Public of Santiago, Mr. Andrés Rubio Flores, it was resolved to increase the share capital by the amount of CLP 67,216,540,955, which was paid through the issuance of 1,005,766,185 fully paid shares, without par value, payable with the profits of the 2010 fiscal year that were not distributed as dividend, in the manner set out in the aforementioned Extraordinary Shareholders’ Meeting. Further, it was resolved to transform the “Banco de Chile-S” shares to “Banco de Chile” shares. As a result of the aforementioned conversion, the 86,942,514,973 shares into which the capital of Banco de Chile is divided and which are registered in the Securities Registry of the Superintendence of Banks and Financial Institutions, now bear the sole denomination “Banco de Chile”. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 114 dated March 31, 2011, which was published in the Official Gazette on April 4 of the same year, and registered on page 17,110 No. 12,951 of Santiago’s Commercial Ledger on April 4, 2011.
| 41. | Public deed dated August 12, 2011, before the Notary Public of Santiago, Mr. Andrés Rubio Flores, annotated in the margin of the bylaw registration, the Chief Executive Officer, in compliance with article 33 of the Regulations of Corporations, recorded that once concluded the placement process of the 3,385,049,365 shares approved for issuance at the Extraordinary Shareholders’ Meeting held on January 20, 2011, the total amount of CLP 210,693,503,468 as obtained, and therefore, as of August 12, 2011, the share capital of Banco de Chile amounts to CLP 1,436,083,470,917, divided into 86,942,514,973 shares. |
| 42. | In Banco de Chile’s Extraordinary Shareholders’ Meeting, held on March 22, 2012, recorded in public deed dated April 9, 2012 before Notary Public Mr. Andrés Rubio Flores, it was resolved to increase the share capital by the amount of CLP 73,910,745,344, which was paid through the issuance of 1,095,298,538 fully paid shares, without par value, payable with the profits of the 2011 fiscal year that were not distributed as dividend, in the manner set out in the aforementioned Extraordinary Shareholders’ Meeting. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 118 dated May 17, 2012, which was published in the Official Gazette on May 22 of the same year, and registered on page 33,050 No. 23,246 of Santiago’s Commercial Ledger on May 18, 2012.
| 43. | In Banco de Chile’s Extraordinary Shareholders’ Meeting, held on October 17, 2012, recorded in public deed dated October 24 of the same year, before Notary Public of Santiago Mr. Andrés Rubio Flores, it was resolved to increase the share capital by the amount of CLP 250,000,000,000, which was paid through the issuance of 3,939,489,442, fully payable shares, without par value, of the “Banco de Chile-T” Serie, which are to be subscribed and paid in the form and period indicated in the aforementioned Extraordinary Shareholders’ Meeting. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 263 dated November 15, 2012, which was published in the Official Gazette on November 19 of the same year, and registered on page 80,851 No. 56,413 of Santiago’s Commercial Ledger on November 15, 2012.
| 44. | In Banco de Chile’s Extraordinary Shareholders’ Meeting, held on March 21, 2013, recorded in public deed dated April 2, 2013, before Notary Public of Santiago Mr. Andrés Rubio Flores, it was resolved to increase the share capital by the amount of CLP 86,201,422,505, which was paid through the issuance of 1,197,741,038 fully paid shares, without par value, payable with the profits of the 2012 fiscal year that were not distributed as dividend, in the manner set out in the aforementioned Extraordinary Shareholders’ Meeting. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 126 dated April 30, 2013, which was published in the Official Gazette on May 8 of the same year, and registered on page 34,465 No. 23,083 of Santiago’s Commercial Ledger on May 3, 2013.
| 45. | In Banco de Chile’s Extraordinary Shareholders’ Meeting, held on March 27, 2014, recorded in public deed dated April 11, 2014, before Notary Public of Santiago, Mr. Andrés Rubio Flores, it was resolved to increase the share capital by the amount of CLP 95,569,688,582, which was paid through the issuance of 1,480,323,553 fully paid shares, without par value, payable with the profits of the 2013 fiscal year that were not distributed as dividend, in the manner set out in the aforementioned Extraordinary Shareholders’ Meeting. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 153 dated May 30, 2014, which was published in the Official Gazette on June 5 of the same year, and registered on page 40,254 No. 24,964 of Santiago’s Commercial Ledger on June 3, 2014.
| 46. | In Banco de Chile’s Extraordinary Shareholders’ Meeting, held on March 26, 2015, recorded in public deed dated April 16, 2015, before Notary Public of Santiago, Mr. Andrés Rubio Flores, it was resolved to increase the share capital by the amount of CLP 96.252.499.241, which was paid through the issuance of 1,473,778,889 fully paid shares, without par value, payable with the profits of the 2014 fiscal year that were not distributed as dividend, in the manner set out in the aforementioned Extraordinary Shareholders’ Meeting. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 285 dated June 5, 2015, which was published in the Official Gazette on June 12 of the same year, and registered on page 42,128 No. 24,868 of Santiago’s Commercial Ledger on June 3, 2015.
| 47. | In Banco de Chile’s Extraordinary Shareholders’ Meeting, held on March 24, 2016, recorded in public deed dated April 12, 2016, before Notary Public of Santiago, Mr. Andrés Rubio Flores, it was resolved to increase the share capital by the amount of CLP 96,874,072,595, which was paid through the issuance of 1,495,200,997 fully paid shares, without par value, payable with the profits of the 2015 fiscal year that were not distributed as dividend, in the manner set out in the aforementioned Extraordinary Shareholders’ Meeting. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 162 dated May 13, 2016, which was published in the Official Gazette on May 20 of the same year, and registered on page 35,404 No. 19,610 of Santiago’s Commercial Ledger on May 18, 2016.
| 48. | In Banco de Chile’s Extraordinary Shareholders’ Meeting, held on March 23, 2017, recorded in public deed dated April 11, 2017, before Notary Public of Santiago, Mr. René Benavente Cash, it was resolved to increase the share capital by the amount of CLP 133,353,827,359, which was paid through the issuance of 1,819,784,762 fully paid shares, without par value, payable with the profits of the 2016 fiscal year that were not distributed as dividend, in the manner set out in the aforementioned Extraordinary Shareholders’ Meeting. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 260 dated May 25, 2017, which was published in the Official Gazette on June 1 of the same year, and registered on page 43,218 No. 23,646 of Santiago’s Commercial Ledger on June 2, 2017.
| 49. | In Banco de Chile’s Extraordinary Shareholders’ Meeting, held on March 22, 2018, recorded in public deed dated April 9, 2018, before Notary Public of Santiago, Me. René Benavente Cash, corrected by public deed dated May 16 of the same year, before the same Notary Public, it was resolved to increase the share capital by the amount of CLP 147,432,502,459, which was paid through the issuance of 1,572,948,922 fully paid shares, without par value, payable with the profits of the 2017 fiscal year that were not distributed as dividend, in the manner set out in the aforementioned Extraordinary Shareholders’ Meeting. |
The Superintendency of Banks and Financial Institutions approved the resolutions adopted at the Shareholders’ Meeting by Resolution No. 258 dated May 29, 2018, which was published in the Official Gazette on June 8 of the same year, and registered on page 41,929 No. 21,966 of Santiago’s Commercial Ledger on June 5, 2018.
| 50. | In Banco de Chile’s Extraordinary Shareholders’ Meeting, held on November 10, 2025, recorded in public deed dated November 27, 2025 before Notary Public of Santiago Mrs. María Pilar Gutiérrez Rivera, it was resolved to amend the Bank’s bylaws. Additionally, in accordance with what was approved at the Meeting and with the provisions of Chapter 18-4 of the Updated Compilation of Regulations of the Financial Market Commission, a consolidated version of the bylaws was approved. |
By resolution No. 804, dated January 15, 2026, the Financial Market Commission approved the amendment included to Banco de Chile’s bylaws, as resolved in the Extraordinary Shareholders’ Meeting held on November 10, 2025. The corresponding certificate issued by said Commission was registered on Page 6,854 No. 2,735 of the Commercial Ledger of the Real Estate Registrar of Santiago, corresponding to the year 2026 and was published in the Official Gazette on January 23, 2026.
Exhibit 2.5
DESCRIPTION
OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
Description of American Depositary Shares
This section summarizes material provisions of the deposit agreement dated as of November 27, 2001, pursuant to which the ADRs were issued, as amended by Amendment No. 1, dated as of February 1, 2011, by Amendment No. 2, dated as of October 23, 2018, and by Amendment No. 3, dated as of August 30, 2021, among Banco de Chile, JPMorgan Chase Bank, N.A., as depositary, and the holders from time to time of ADRs. We refer to the deposit agreement, including the amendments thereto, which are included as exhibits to our most recent Annual Report on Form 20-F, as the “amended deposit agreement.” You should read the amended deposit agreement for a more detailed description of the terms of the ADRs. Additional copies of the amended deposit agreement are available for inspection at the Corporate Trust Office of the depositary, which is presently located at 383 Madison Avenue, Floor 11, New York, New York 10179. Attention: ADR Administration.
American Depositary Receipts
The depositary will issue ADRs evidencing American depositary shares (which we refer to as “ADSs”) pursuant to the amended deposit agreement. Each ADS will represent 200 shares of our common stock, including shares of our common stock and shares of common stock of the “Banco de Chile-S” series. An ADR may represent any number of ADSs. Only persons in whose names ADRs are registered on the books of the depositary will be treated by the depositary and us as holders of ADRs.
Pursuant to the terms of the amended deposit agreement, holders, owners and beneficial owners of ADRs will be subject to any applicable disclosure requirements regarding acquisition and ownership of shares of common stock or ADSs representing shares of our common stock as are applicable pursuant to the terms of our by-laws or Chilean laws, as each may be amended from time to time. See “Item 10—Additional Information—Memorandum and Articles of Association” in our most recent Annual Report on Form 20-F for a description of these disclosure requirements applicable to shares of common stock and the consequences of noncompliance as of the date of this prospectus. The depositary has agreed, subject to the terms and conditions of the amended deposit agreement, to comply with our instructions as to such requirements.
Deposit and Withdrawal of Common Stock
The depositary will execute and deliver to, or upon the written order of, the persons specified in a written order of the depositor, an ADR or ADRs registered in the name of such person or persons for the number of ADSs issuable in respect of such deposit, subject to the terms of the amended deposit agreement and upon the:
| ● | deposit with the custodian of the required number of shares of common stock accompanied by any appropriate instrument of transfer or endorsement in the form satisfactory to the custodian; |
| ● | delivery of such certifications and payments as may be required by the custodian or the depositary; |
| ● | payment of the required fees, charges and taxes; and |
| ● | if required by the depositary and as applicable, the delivery to the depositary of an agreement or instrument providing full transfer to the custodian or its nominee of any dividend or right to subscribe shares or to receive other property or the proxy or proxies entitling the custodian to vote on the shares. |
The execution and delivery of the ADRs will take place at any of the depositary’s designated transfer offices.
The depositary will not accept for deposit any shares of common stock unless it receives evidence of necessary regulatory approvals, if any.
The depositary may issue ADRs against rights to receive shares from us, any registrar, any of our agents, a central clearing agency, or other entity recording share ownership or transactions approved in writing by us. The depositary may issue ADRs against other rights to receive shares only if:
| ● | such other rights are fully collateralized (marked-to-market daily) with cash or U.S. government securities; |
| ● | each applicant for such ADRs represents in writing that it owns such shares, has assigned all beneficial right, title and interest in such shares to the depositary and will hold such shares for the account of the depositary and will deliver such shares to the custodian as soon as practicable and promptly upon demand; |
| ● | we have not requested the depositary to cease doing so at least two business days in advance of a proposed deposit; and |
| ● | all ADRs issued against rights to receive shares represent no more than 30.0% of the shares actually deposited. The depositary may retain any compensation received by it in connection with these transactions, including, without limitation, earnings on such collateral. |
At its discretion, the depositary may deliver the property that the ADR holders surrendering ADRs have the right to receive (other than the certificates representing the shares) at its office. At the request, risk and expense of the ADR holder surrendering ADRs, deposited shares and other proper documents of title may be forwarded from our office in Chile to the depositary’s office for delivery to the surrendering holders. In the event the depositary determines that there is a reasonable possibility that a tax would be imposed upon the withdrawal of shares in exchange for surrendered ADRs, it may require that the withdrawing investor provide satisfactory security to it in an amount sufficient to cover the estimated amount of the tax.
Dividends, Other Distributions and Rights
The depositary is required to convert promptly into U.S. dollars and transfer to the United States all cash dividends and other cash distributions denominated in Chilean pesos (or any other currency other than U.S. dollars) that it receives in respect of the deposited shares, to the extent that it can do so on a reasonable basis and subject to Chilean law. The depositary is also required to distribute the amount received in U.S. dollars to the holders of ADRs upon an averaged or other practicable basis without regard to any distinctions among holders on account of exchange restrictions or the date of delivery of any ADR or ADRs or otherwise. The amount distributed by the depositary will be reduced by any amounts to be withheld by us, the depositary or by us acting as custodian, including amounts on account of any applicable taxes and certain other expenses.
If the depositary determines that in its judgment any currency other than U.S. dollars received by it cannot be converted on a reasonable basis and transferred, the depositary may, subject to applicable laws and regulations, distribute such foreign currency received by it or hold such foreign currency (without liability for interest) for the respective accounts of the ADR holders entitled to receive the same.
If we declare a dividend in or free distribution of additional shares, the depositary may (with our approval) and shall (if we so request), distribute to the ADR holders (in proportion to the number of ADSs evidenced by their respective ADRs) additional ADRs evidencing an aggregate number of ADSs that represents the number of shares of common stock received in such dividend or free distribution. Instead of delivering ADRs of fractional ADSs, the depositary will sell the amount of shares represented by the aggregate of such fractions and will distribute the net proceeds to holders of ADRs in accordance with the amended deposit agreement. If additional ADRs (other than ADRs for fractional ADSs) are not so distributed, each ADS shall thereafter also represent the additional shares distributed.
If we offer (or cause to be offered) to the holders of shares any rights to subscribe for additional shares of common stock or any rights of any other nature, the depositary shall, after consultation with us, have discretion:
| ● | as to the procedure followed to make such rights available to ADR holders; |
| ● | in disposing of such rights for the benefit of such owners and making the net proceeds available in U.S. dollars to holders; or |
| ● | if the depositary may not make such rights available or dispose of such rights and make the proceeds available, allowing the rights to lapse unexercised (without incurring liability to any person as a consequence thereof); |
provided that the depositary will, at our request, either:
| ● | if it determines that it is lawful and feasible to do so, make such rights available to ADR holders by means of warrants or employ such other method as it may deem feasible in order to facilitate the exercise, sale or transfer of rights by such holder; or |
| ● | sell such rights or warrants or other instruments at public or private sale, at such place or places and upon such terms as it may deem proper, and allocate the net proceeds of such sales for the account of the owners of ADRs otherwise entitled upon an averaged or other practicable basis without regard to any distinctions among holders on account of exchange restrictions or the date of delivery of an ADR or ADRs or otherwise. |
In this regard, we may, in our sole discretion, decide not to register the securities to which such rights relate under the Securities Act where such registration may be required in connection with the offer or sale of such securities. In this case, ADR holders would not be permitted to purchase such securities or otherwise exercise such rights and the depositary would, to the extent possible, dispose of such rights for the account of such holders as provided above. Such a disposal or rights may reduce the equity interest that ADR holders have in us.
If the depositary determines that any distribution of property other than cash (including shares of common stock or rights to subscribe therefor) is subject to any tax or governmental charge that it is obligated to withhold, the depositary may dispose of all or a portion of such property in such amounts and in such manner as it deems necessary and practicable to pay such taxes or governmental charges. The depositary will distribute the net proceeds of any such sale or the balance of any such property after deduction of such taxes or governmental charges to the ADR holders.
Upon any split, consolidation, cancellation or any other reclassification of shares of common stock, or upon any recapitalization, reorganization, merger or consolidation or sale of assets affecting us, or to which we are a party, any securities that shall be received by the depositary or the custodian in respect of shares shall be treated as newly deposited shares under the amended deposit agreement, and ADSs shall from then on represent the right to receive the securities so received, except when (1) additional ADRs (as in the case of a stock dividend), or (2) the depositary calls for the surrender of outstanding ADRs to be exchanged for new ADRs.
Record Dates
The depositary may, after consultation with us if practicable, fix a record date (which shall be as near as practicable to any corresponding record date set by us) for the determination of the holders of ADRs who shall be entitled to receive any distribution on or in respect of deposited securities, to give instructions for the exercise of any voting rights, to receive any notice or to act in respect of other matters and only such holders of ADRs shall be so entitled.
Voting of the Underlying Deposited Securities
When the depositary receives any notice of a meeting of holders of common stock, it will mail to all ADR holders a notice containing:
| ● | the information included in such notice received by it; |
| ● | a statement that each holder as of a specified record date will be entitled, subject to Chilean law and the provisions of or governing the deposited shares, to instruct the depositary as to the exercise of the voting rights, if any, pertaining to the deposited shares represented by ADSs evidenced by such holder’s ADRs; and |
| ● | a statement as to the manner in which each such holder of ADRs may instruct the depositary to exercise any right to vote held by such holder, including instructions to give a discretionary proxy to a person designated by us. |
See “Item 10—Memorandum and Articles of Association—Shareholders’ Meetings and Voting Rights.” The holders of ADRs at the close of business on the date specified by the depositary are entitled, subject to any applicable provisions of Chilean law, our bylaws or the shares, to instruct the depositary how to exercise the voting rights, if any, pertaining to the shares represented by their ADSs. The depositary will endeavor, insofar as practicable and permitted under Chilean law and the shares, to vote the shares so represented in accordance with any such written instructions of holders of ADRs. The depositary may not itself exercise any voting discretion over any shares. If the depositary does not receive instructions from a holder of ADRs, the depositary shall deem such holder to have instructed it to give discretionary proxy to a person designated by us to vote the underlying shares.
Reports and Notices
The depositary will mail ADR holders any reports and communications received from us that are made generally available to holders of shares of common stock. The depositary will also send to ADR holders copies or summaries of such reports when furnished by us.
On or before the first date notice is given by us, by publication or otherwise, of any meeting or adjournment of a meeting of shareholders or of the taking of any action by shareholders other than at a meeting, or the making of any distribution on or offering of rights in respect of the deposited shares, we will send the depositary a copy of the notice in the form given or to be given to holders of shares. The depositary will arrange for the mailing to all ADR holders of a notice containing the information (or a summary of the information) contained in any notice of a meeting of holders of shares it receives.
Amendment and Termination of the Deposit Agreement
The form of the ADRs and the amended deposit agreement may at any time be amended by agreement between us and the depositary. Any amendment that imposes or increases any fees or charges (other than the fees of the depositary for the execution and delivery or the cancellation of ADRs and taxes and other governmental charges), or that otherwise negatively affects any substantial existing right of ADR holders, will not take effect as to outstanding ADRs until the expiration of 30 days after notice of such amendment has been given to the holders of outstanding ADRs. Every holder of an ADR at the time such amendment becomes effective will be deemed, by continuing to hold such ADR, to consent and agree to such amendment and to be bound by the amended deposit agreement as amended. Except in order to comply with mandatory provisions of applicable law, in no event may any amendment impair the right of any ADR holder to surrender his ADR and receive therefor the shares and other property represented by it.
Whenever so directed by us, the depositary will terminate the amended deposit agreement by mailing notice of such termination to the holders of all ADRs at least 30 days prior to the date fixed in such notice for termination. The depositary may likewise terminate the amended deposit agreement at any time six months after it has delivered to us a notice of its election to resign, provided that a successor depositary shall not have been appointed and accepted its appointment as provided in the amended deposit agreement.
If any ADRs remain outstanding after the date of termination, the depositary will:
| ● | discontinue the registration of transfer of ADRs; |
| ● | suspend the distribution of dividends to the holders thereof; and |
| ● | not give any further notices or perform any further acts under the amended deposit agreement, except |
| ● | the collection of dividends and other distributions pertaining to the shares of common stock and any other property represented by such ADRs; |
| ● | the sale of rights as provided in the amended deposit agreement; and |
| ● | the delivery of shares, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for surrendered ADRs. |
As soon as practicable after the six month anniversary of any date of termination, the depositary shall sell the shares and any other property represented by any ADRs that have not been surrendered and hold the net proceeds in a segregated account, together with any other cash then held, without liability for interest, in trust for the pro rata benefit of ADR holders that have not surrendered their ADRs. After making such sale, the depositary shall be discharged from all obligations to us, except to account for such net proceeds and other cash. Upon termination of the amended deposit agreement, we will also be discharged from all obligations thereunder, except for certain obligations to the depositary and its agents.
Charges of Depositary
Among other fees, the depositary will charge anyone to whom ADRs are delivered and anyone who surrenders ADRs $5.00 per 100 ADSs (or portion thereof) so issued or surrendered.
We will pay certain other charges of the depositary under the amended deposit agreement, except for:
| ● | stock transfer or other taxes and other governmental charges (which are payable by holders of ADRs or persons depositing shares); |
| ● | cable, telex and facsimile transmission and delivery charges incurred at the request of persons depositing, or holders of ADRs delivering shares, ADRs or deposited securities (which are payable by such persons or holders); |
| ● | transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities (which are payable by persons depositing shares or holders of ADRs withdrawing deposited securities); |
| ● | expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars (which are paid out of such foreign currency); and |
| ● | such fees and expenses as are incurred by the depositary (including without limitation expenses incurred on behalf of holders of ADRs in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in delivery of deposited securities or otherwise in connection with the depositary’s or its custodian’s compliance with applicable law, rule or regulation. |
Liability of Holders for Taxes or Other Charges
If any tax or other governmental charge shall become payable by or on behalf of the custodian or the depositary with respect to an ADR, any deposited securities represented by the ADSs evidenced such ADR or any distribution thereon, such tax or other governmental charge shall be paid by the holder of such security to the depositary. The depositary may refuse to effect any registration, registration of transfer, split-up or combination or, subject to the reasons set forth in General Instruction I.A.(1) of Form F-6 under the Securities Act (as such instructions may be amended from time to time), any withdrawal of such deposited securities until such payment is made. The depositary may also deduct from any distributions on or in respect of deposited securities, or may sell by public or private sale for the account of the holder of such security any part or all of such deposited securities (after attempting by reasonable means to notify the holder of such security prior to such sale), and may apply such deduction or the proceeds of any such sale in payment of such tax or other governmental charge, the holder of such security remaining liable for any deficiency, and shall reduce the corresponding number of ADSs to reflect any such sales of shares.
Transfer of American Depositary Receipts
The ADRs are transferable on the books of the depositary, provided that the depositary may close the transfer books, at any time and from time to time, when deemed expedient by it in connection with the performance of its duties or at our request. The depositary or the custodian may require payment from the person presenting an ADR or the depositor of the shares of a sum sufficient to reimburse it for any tax or other governmental charge, and any stock transfer or registration fee with respect thereto and payment of any applicable fees payable by the holders of ADRs as a condition to the execution and delivery, registration of transfer, split-up, combination or surrender of any ADR or transfer and withdrawal of shares of common stock.
The depositary may refuse to deliver ADRs, register the transfer of any ADR or make any distribution of, or related to, shares until it has received such proof of citizenship, residence, exchange control approval, payment of all applicable Chilean taxes or other governmental charges, legal or beneficial ownership or other information as it may deem necessary or proper or as we may require by written request to the depositary. The execution and delivery or transfer of ADRs generally may be suspended during any period when our transfer books or the transfer books of the depositary are closed or if deemed necessary or advisable by us or the depositary. ADR holders may inspect the transfer books of the depositary at any reasonable time, provided that such inspection shall not be for the purpose of communicating with other holders of the ADRs in the interest of a business or object other than our business or a matter related to the amended deposit agreement or the ADRs.
General
Neither we nor the depositary will be liable to the holders of ADRs if prevented or delayed in performing their obligations under the amended deposit agreement by any present or future law, regulation, decree, order or other action of the United States, Chile or any other country, or of any other governmental authority, or by reason of any act of God, war or circumstances beyond their control or in the case of the depositary, any provision of our bylaws or of the securities deposited. Neither the depositary nor any of its agents shall be liable for any indirect, special, punitive or consequential damages (including, without limitation, lost profits) of any form incurred by any person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought. Our obligations and those of the depositary are expressly limited to performing their respective duties specified therein without gross negligence or bad faith.
ADS holders are subject to certain provisions of the rules and regulations promulgated under the Exchange Act and to the regulations of the Comisión para el Mercado Financiero (“Financial Market Comission” or “CMF”) relating to the disclosure of interests in the shares of common stock. Any ADS holder who has or comes to have, directly or indirectly, an interest of 5.0% (or such other percentage as may be prescribed by law or regulation) or more of our outstanding shares must:
| ● | under the Exchange Act, within five business days after acquiring such interest and thereafter upon certain changes in such interests, notify us as required by such rules and regulations; and |
| ● | under regulations of the CMF, within 15 days after acquiring such interest, send to us a notarized declaration as to the number of shares and ADSs beneficially owned by it and commit to report to us any subsequent acquisitions of shares or ADSs. |
In addition, ADR holders are subject to the reporting requirements contained in Articles 12 and 54 and Titles XV and XXV of the Chilean Securities Market Law and Article 16 bis of the General Banking Law and the ownership limitations of Articles 35 bis and 36 of the General Banking Law (which provisions may apply when a holder beneficially owns or intends to purchase 10.0% or more of our shares or has the intention of taking control of us).
ADS holders who beneficially own more than 1.0% of the shares of common stock are also subject to the presumption created by Article 84 No. 2 of the General Banking Law that such owners are our related parties, and are thus subject to certain restrictions on the amounts and terms of loans made by banks to related parties.
Valuation of Underlying Shares for Chilean Law Purposes
For all purposes of valuation under Chilean law, the acquisition value of the shares of common stock delivered to any holder upon surrender of ADRs shall be the highest reported sale price of the shares on the Santiago Stock Exchange on the day during which the transfer of the shares is recorded under the name of such holder. In the event that no such sale price is reported by the Santiago Stock Exchange during that day, the value shall be deemed to be the highest trade price on the day during which the last trade took place. However, if 30 or more days have elapsed since the last trade, such value shall be adjusted in accordance with the variation of the Chilean consumer price index during the period since such last trade date.
Exhibit 4.22
FIFTH EXTENSION OF THE COOPERATION AGREEMENT
This Fifth Extension of the Cooperation Agreement (hereinafter, the “Fifth Extension”) is entered into on this 29th day of August, 2025, by and between:
Banco de Chile (“Banco de Chile”), a publicly held corporation duly organized and validly existing under the laws of the Republic of Chile, and
Citigroup Inc. (“Citigroup”), a corporation duly organized and validly existing under the laws of the State of Delaware, United States of America; Banco de Chile and Citigroup, jointly, the “Parties” and individually, a “Party”.
RECITALS
I. On October 22, 2015, the Parties entered into a Cooperation Agreement, effective as of January 1, 2016 (the “Cooperation Agreement”), for the purpose of, among other things, regulating certain common aspects of the direct relationship to be maintained by Banco de Chile and its subsidiaries, on the one hand, and Citigroup and its subsidiaries, on the other hand, pursuant to certain agreements between the Parties, namely the Global Connectivity Agreement (the “Connectivity Agreement”) and the Trademark License Agreement (“TMLA”), both dated October 22, 2015 and effective as of January 1, 2016 (such agreements, together with the Cooperation Agreement, as each of them may be amended, substituted, replaced, supplemented or extended pursuant to a written agreement between the Parties, the “Relevant Agreements”), and the Master Services Agreement dated January 26, 2017, effective as of January 1, 2017 (“MSA”).
II. On August 24, 2017, the Parties entered into an Extension of the Cooperation Agreement pursuant to which the term of the Relevant Agreements and the MSA was extended for a period of two years as of January 1, 2018, that is, until January 1, 2020, with the Parties being entitled to agree on additional extensions on the terms set forth in the Cooperation Agreement.
III. On November 29, 2019, the Parties executed an Amended and Restated Trademark License Agreement (“New TMLA”) and an Amended and Restated Master Services Agreement (“New MSA”).
IV. On November 29, 2019, the Parties entered into a Second Extension of the Cooperation Agreement pursuant to which the Parties agreed that, as of the effective date of such Second Extension: (i) the New TMLA and the New MSA amended and restated in their entirety the TMLA and the MSA; (ii) the New TMLA would be considered by the Parties as one of the Relevant Agreements, together with the Connectivity Agreement and the Cooperation Agreement; and (iii) the term of the Relevant Agreements and the New MSA was extended for a period of two years as of January 1, 2020, that is, until January 1, 2022, with the Parties being entitled to agree on additional extensions on the terms set forth in the Cooperation Agreement.
V. On August 31, 2021, the Parties entered into an Amended and Restated Master Services Agreement (“MSA 2021”). Likewise, on April 26, 2021 and August 31, 2021, the Parties entered into a First Amendment and a Second Amendment, respectively, to the Connectivity Agreement.
VI. On August 31, 2021, the Parties entered into a Third Extension of the Cooperation Agreement pursuant to which the Parties agreed that, as of the effective date of such Third Extension: (i) the MSA 2021 amended and restated in its entirety the New MSA; and (ii) the term of the Relevant Agreements and the MSA 2021 was extended for a period of two years as of January 1, 2022, that is, until January 1, 2024, with the Parties being entitled to agree on additional extensions on the terms set forth in the Cooperation Agreement.
VII. On August 29, 2023, the Parties entered into an Amended and Restated Master Services Agreement (“MSA 2023”). Likewise, on August 29, 2023, the Parties entered into a Third Amendment to the Connectivity Agreement. Additionally, on August 29, 2023 and December 11, 2024, the Parties amended the New TMLA.
VIII. On August 29, 2023, the Parties entered into a Fourth Extension of the Cooperation Agreement pursuant to which the Parties agreed that, as of the effective date of such Fourth Extension: (i) the MSA 2023 amended and restated in its entirety the MSA 2021; and (ii) the term of the Relevant Agreements and the MSA 2023 was extended for a period of two years as of January 1, 2024, that is, until January 1, 2026, with the Parties being entitled to agree on additional extensions on the terms set forth in the Cooperation Agreement.
IX. The Parties have agreed to (i) extend the Cooperation Agreement on the terms set forth below, and (ii) execute an Amended and Restated Master Services Agreement (“MSA 2025”).
NOW, THEREFORE, in consideration of the foregoing recitals and the terms and conditions set forth herein and for other valuable consideration received by both Parties, the receipt of which is hereby acknowledged by the Parties through this amendment, and with the intention that the Parties be bound by the agreements herein set forth, the Parties hereby agree as follows:
CLAUSES
First. Definitions. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Cooperation Agreement.
Second. MSA 2025. The Parties agree that, as of the effective date of this Fifth Extension, the MSA 2025 amends and restates in its entirety the MSA 2023.
Third. Extension. In accordance with Clause Sixth of the Cooperation Agreement, the Parties agree to (a) extend the Relevant Agreements and (b) grant effectiveness to the MSA 2025, with respect to both (a) and (b), for a period of two years as of January 1, 2026 and until January 1, 2028. Likewise, the Parties agree that they may continue extending the Relevant Agreements and the MSA 2025 in accordance with the renewal procedure and for the terms set forth in Clause Sixth of the Cooperation Agreement as many times as the Parties may agree. In the event that such agreement does not occur, the Relevant Agreements and the MSA 2025 shall be extended once only for a period of one year as of January 1, 2028 and until January 1, 2029, on which date they shall expire automatically, without any further formality.
Solely for the purposes of clarification, it is hereby stated that the third and fourth paragraphs of Clause Sixth of the Cooperation Agreement remain unchanged.
Fourth. Term. This Fifth Extension shall be effective as of January 1, 2026 and once each counterpart thereof signed by each Party has been received by electronic mail.
Fifth. Scope. Except as amended by this instrument, the Cooperation Agreement shall remain in full force and effect.
Sixth. Governing Law and Jurisdiction. The Parties agree that Clause Seventh, letter (n), “Governing Law and Jurisdiction”, of the Cooperation Agreement shall apply to this Amendment.
Seventh. Counterparts. This Fifth Extension may be executed in any number of counterparts, each of which shall be deemed an original and shall have the same effects as if the signatures contained therein were in a single instrument, but all of such counterparts together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereby execute this Fifth Extension through their duly authorized representatives on the date indicated in the preamble hereto.
| CITIGROUP INC. | ||
| By: | /s/ Julio Figueroa | |
| Julio Figueroa | ||
| Latin America Cluster and Banking Head | ||
| BANCO DE CHILE | ||
| By: | /s/ Eduardo Ebensperger Orrego | |
| Eduardo Ebensperger Orrego | ||
| Chief Executive Officer | ||
[Signature Page of the Fifth Extension of the Cooperation Agreement]
Exhibit 4.23
AMENDED AND RESTATED MASTER SERVICES AGREEMENT
by and between
BANCO DE CHILE
and
CITIGROUP INC.
Dated August 29, 2025 and with effect as of January 1, 2026
Amended and Restated Master Services Agreement
Banco de Chile – Citigroup Inc.
Effective January 1, 2026
MASTER SERVICES AGREEMENT
This MASTER SERVICES AGREEMENT (this “Agreement”), dated as of August 29, 2025, with effect as of January 1, 2026, by and between Banco de Chile, a banking corporation organized under the laws of Chile (together with its Subsidiaries, “Banco de Chile”), and Citigroup Inc. (“Citigroup” and together with its Subsidiaries and Affiliates, “Citi”).
RECITALS
WHEREAS, as of January 1, 2008, Citi combined its banking operations in Chile with those of Banco de Chile and Banco de Chile migrated the business conducted by its North American branches to Citi;
WHEREAS, the terms for the migration of the business conducted by Banco de Chile’s North American branches to Citi are set forth in an Asset Purchase Agreement, dated as of December 31, 2007 (as the same may be amended or modified from time to time, the “Asset Purchase Agreement”), between Banco de Chile and Citibank, N.A.;
WHEREAS, Banco de Chile and Citigroup entered into a Global Connectivity Agreement (Contrato de Conectividad Global), dated October 22, 2015, with effect as of January 1, 2016 (as the same may be amended, modified, extended, supplemented or restated from time to time, the “Connectivity Agreement”), which replaced a previous Global Connectivity Agreement dated December 27, 2007 (as amended), and which provides for the collaboration between Citi and Banco de Chile in connection with the marketing, sales and services activities described therein;
WHEREAS, Banco de Chile and Citigroup entered into a Cooperation Agreement (Contrato de Cooperación), dated October 22, 2015, with effect as of January 1, 2016 (as the same may be amended, modified, extended, supplemented or restated from time to time, the “Cooperation Agreement”), which replaced a previous Cooperation Agreement dated December 27, 2007 (as amended), and which regulates certain aspects of the relationship between Citi and its Subsidiaries, on the one hand, and Banco de Chile and its Subsidiaries, on the other hand, pursuant to the Connectivity Agreement and the Trademark License Agreement (as defined herein);
WHEREAS, Banco de Chile and Citigroup entered into a Master Services Agreement dated as of January 26, 2017, with effect as of January 1, 2017 (as amended or modified from time to time, the “Previous MSA”), which replaced a previous Master Services Agreement dated as of September 25, 2009 (the “Original MSA”), and which regulates and implements the mutual services resulting from the above mentioned agreements; WHEREAS, Banco de Chile and Citigroup entered into an Amended and Restated Master Services Agreement dated as of November 29, 2019, with effect as of January 1, 2020 (as amended or modified from time to time, the “2019 MSA”), which replaced the Previous MSA and regulated and implemented the mutual services resulting from the above mentioned agreements;
WHEREAS, Banco de Chile and Citigroup entered into an Amended and Restated Master Services Agreement dated as of August 31, 2021, with effect as of January 1, 2022 (as amended or modified from time to time, the “2021 MSA”), which replaced the 2019 MSA and regulated and implemented the mutual services resulting from the above mentioned agreements;
WHEREAS, Banco de Chile and Citigroup entered into an Amended and Restated Master Services Agreement dated as of August 29, 2023, with effect as of January 1, 2024 (as amended or modified from time to time, the “2023 MSA”), which replaced the 2021 MSA and regulated and implemented the mutual services resulting from the above mentioned agreements; and
WHEREAS the Parties wish to continue to provide certain services to each other and have agreed to modify certain terms and conditions of such services;
NOW, THEREFORE, in consideration of the mutual covenants, agreements and promises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I. DEFINITIONS
1.1 Definitions. For the purposes of this Agreement, unless the context clearly requires otherwise, the following terms shall have the following meanings:
“Additional Service” shall have the meaning set forth in Section 2.4(a).
“Affiliate” means any person who is an “affiliate” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended; provided, that for purposes of this Agreement, Citi and Banco de Chile shall not be Affiliates of each other.
“Agreement” shall have the meaning set forth in the introduction to this agreement.
“Authorized User” shall mean a Banco de Chile Authorized User or a Citi Authorized User.
“Banco de Chile” shall have the meaning set forth in the introduction to this Agreement.
“Banco de Chile Authorized User” shall have the meaning set forth in Section 5.8(a).
“Banco de Chile Browse-Wrap Agreement” shall have the meaning set forth in Section 5.9(b).
“Banco de Chile Business” shall mean the business of Banco de Chile and its Affiliates.
“Banco de Chile Click-Wrap Agreement” shall have the meaning set forth in Section 5.10(b).
“Banco de Chile Fees” shall have the meaning set forth in Section 4.1(b).
“Banco de Chile Hosted Application” shall have the meaning set forth in Section 5.9(a).
“Banco de Chile Hosted Application-Specific Agreement” shall have the meaning set forth in Section 5.9(b).
“Banco de Chile Indemnified Parties” shall have the meaning set forth in Section 9.1.
“Banco de Chile Intellectual Property” means any Intellectual Property owned by Banco de Chile.
“Banco de Chile Parties” shall mean, as applicable, (a) Banco de Chile, its Affiliates and any third parties engaged by Banco de Chile or its Affiliates to provide Services, when providing Services or (b) Banco de Chile and its Subsidiaries, when receiving Services.
“Banco de Chile Permitted Customer” shall have the meaning set forth in Section 3 of Schedule 2.1(a)(3).
“Banco de Chile Services” shall have the meaning set forth in Section 2.2(a)(i).
“Banco de Chile Terms of Use” shall have the meaning set forth in Section 5.9(a).
“Banco de Chile Written Usage Agreement” shall have the meaning set forth in Section 5.9(b).
“Business Day” means any day other than Saturday, Sunday or a day on which commercial banks in Santiago de Chile, Chile, New York, New York or Miami, Florida are authorized or required by Law to close.
“Citi” shall have the meaning set forth in the introduction to this Agreement.
“Citi Authorized User” shall have the meaning set forth in Section 5.9(a).
“Citi Browse-Wrap Agreement” shall have the meaning set forth in Section 5.8(b).
“Citi Business” shall mean the business of Citi and its Affiliates.
“Citi Click-Wrap Agreement” shall have the meaning set forth in Section 5.8(b).
“Citi Fees” shall have the meaning set forth in Section 4.1(a).
“Citi Hosted Application” shall have the meaning set forth in Section 5.8(a).
“Citi Hosted Application-Specific Agreement” shall have the meaning set forth in Section 5.8(b).
“Citi Indemnified Parties” shall have the meaning set forth in Section 9.2.
“Citi Intellectual Property” means any Intellectual Property owned by Citi.
“Citi Parties” shall mean, as applicable, (a) Citi, its Affiliates and any third parties engaged by Citi or its Affiliates to provide Services, when providing Services or (b) Citi and its Subsidiaries, when receiving Services.
“Citi Permitted Customer” shall have the meaning set forth in Section 3 of Schedule 2.2(a)(1).
“Citi Services” shall have the meaning set forth in Section 2.1(a)(i).
“Citi Terms of Use” shall have the meaning set forth in Section 5.8(a).
“Citi Written Usage Agreement” shall have the meaning set forth in Section 5.8(b).
“Confidential Information” shall have the meaning set forth in Section 6.1.
“Connectivity Agreement” shall have the meaning set forth in the Recitals.
“Content” means, with respect to a Citi Hosted Application or a Banco de Chile Hosted Application, such website and/or interactive service and the content, information, data, tools, software, photographs, video, audio, graphics, logos and overall “look and feel”, and other products, services and materials contained or accessible thereon.
“Control” means the direct or indirect possession of the power to elect at least a majority of the Board of Directors or other governing body of a Person through the ownership of voting securities, ownership or partnership interests, by contract or otherwise or, if no such governing body exists, the direct or indirect ownership of 50% or more of the equity interests of a Person.
“Cooperation Agreement” shall have the meaning set forth in the Recitals.
“Direct Cost” shall mean all costs incurred by the party providing a Service in connection with providing such Service.
“Dispute” shall have the meaning set forth in Section 11.14.
“Effective Date” shall mean January 1, 2026.
“Fees” shall mean, collectively, Citi Fees and Banco de Chile Fees.
“Force Majeure Event” shall have the meaning set forth in Section 3.4(a).
“Governmental Entity” means any (i) country, region, state, county, municipality, city, town, village, district or other jurisdiction, (ii) federal, state, provincial, local, municipal, foreign or other government, (iii) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, self-regulatory organization or other entity and any court or other tribunal), (iv) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, policy, regulatory or taxing authority or power of any nature or (v) official of any of the foregoing.
“Indemnified Parties” shall have the meaning set forth in Section 9.2.
“Indemnifying Party” shall have the meaning set forth in Section 9.3.
“Indemnity Payments” shall have the meaning set forth in Section 9.6.
“Intellectual Property” means all of the following in any jurisdiction throughout the world: (i) patents, patent applications and patent disclosures, (ii) trademarks, service marks, trade dress, trade names, corporate names, logos and slogans and Internet domain names, together with all goodwill associated with each of the foregoing, (iii) copyrights and copyrightable works, (iv) registrations and applications for any of the foregoing, (v) trade secrets, confidential information, know-how and inventions, (vi) computer software (including, without limitation, source code, executable code, data, databases and related documentation) and (vii) all other intellectual property.
“Law” means any writ, injunction, Judgment, law, decision, opinion, statute, rule or regulation of any governmental, judicial, legislative, executive, administrative or regulatory authority of the United States or Chile, or of any state or local government or any subdivision thereof, or of any Governmental Entity.
“Losses” means any debts, obligations and other liabilities (whether known or unknown, absolute or contingent, liquidated or unliquidated, due or to become due, accrued or not accrued, asserted or unasserted or otherwise), losses, claims, damages, Taxes, diminutions in value of the applicable Indemnified Party or its assets, interest obligations, deficiencies, judgments, assessments, fines, fees, penalties, expenses (including amounts paid in settlement, interest, court costs, costs of investigators, fees and expenses of attorneys, accountants, financial advisors, consultants and other experts, and other expenses of litigation), any incidental or consequential damages and any punitive damages payable to third parties that may be imposed or otherwise incurred or suffered and other liabilities.
“Merger Agreement” means the Convenio de Fusión, dated December 26, 2007, between Banco de Chile and Citibank Chile.
“Mutual Services” shall have the meaning set forth in Section 2.3.
“Operating Agreements” means the Asset Purchase Agreement, the Connectivity Agreement and the Trademark License Agreement.
“Party” shall mean each of Banco de Chile and Citi.
“Passwords” shall have the meaning set forth in Section 5.4(a).
“Person” means any individual, corporation, partnership, limited partnership, limited liability company, trust, association or entity or Governmental Entity or authority.
“Personnel” shall mean, with respect to any Party providing Services hereunder, the employees, officers, agents, independent contractors and consultants of (a) such Party; (b) the Affiliates of such Party; and (c) any third parties engaged by such Party or its Affiliates to provide the Services.
“Resumed Service” shall have the meaning set forth in Section 2.5.
“Sales Taxes” shall have the meaning set forth in Section 4.4.
“Security Regulations” shall have the meaning set forth in Section 5.4(a).
“Service Coordinator” shall have the meaning set forth in Section 2.6.
“Services” shall have the meaning set forth in Section 2.2(a)(i).
“Subsidiary” of any Person means another Person under the Control of such Person.
“Systems” shall have the meaning set forth in Section 5.4(a).
“Tax” means any federal, state, local and foreign income, profits, franchise, license, capital, transfer, ad valorem, wage, severance, occupation, import, custom, gross receipts, payroll, sales, employment, use, stamp, alternative or add-on minimum, environmental, withholding and any other tax, duty, assessment or governmental tax charge of any kind whatsoever, imposed or required to be withheld by any taxing authority including any interest, additions to tax, or penalties applicable or related thereto.
“Trademark License Agreement” means the Amended and Restated Trademark License Agreement dated as of November 29, 2019, with effect as of January 1, 2020, as may be amended from time to time, between Citigroup and Banco de Chile, which sets forth the terms for the use of the Licensed Citi Marks, as defined in such Trademark License Agreement, by Banco de Chile in Chile.
“Term” means the period during which this Agreement is in effect, as provided in Section 10.1.
“Third Party Claim” shall have the meaning set forth in Section 9.1.
ARTICLE II. SERVICES
2.1 Services to be Provided to Banco de Chile.
(a) In General.
(i) Citi shall provide, or shall cause its Affiliates or third parties to provide, to the Banco de Chile Parties the services set forth on Schedules 2.1(a) (together with any Resumed Services provided by Citi, and the portion of any Mutual Services provided by Citi, the “Citi Services”).
(ii) In the event that Banco de Chile internally restructures, reorganizes or transfers the Banco de Chile Business to which the Citi Services relate to an Affiliate or a third party, Citi shall continue to provide the Citi Services to such Affiliate or third party to the extent provided prior to such restructuring, reorganization or transfer, but only insofar as such Affiliate or such third party continues to conduct the Banco de Chile Business to which the Citi Services relate.
(iii) In the event that Citi is involved in any transaction covered by Cláusula Cuarta of the Cooperation Agreement, Citi shall comply with Cláusula Cuarta of the Cooperation Agreement so that the assignee, transferee, or other entity resulting from the transaction or succeeding to Citi’s interest as a result thereof becomes obligated to provide the Citi Services to Banco de Chile (or to an Affiliate or third party pursuant to clause (ii) above) on the same terms and conditions as Citi is obligated to do so. For purposes of this clause (iii), this Agreement shall be deemed to be an “Operating Agreement” as such term is used in Cláusula Cuarta of the Cooperation Agreement.
2.2 Services to be Provided to Citi.
(a) In General.
(i) Banco de Chile shall provide, or shall cause its Affiliates or third parties to provide, to the Citi Parties the services set forth on Schedule 2.2(a)(1) (together with any Resumed Services provided by Banco de Chile, and the portion of any Mutual Services provided by Citi, the “Banco de Chile Services” and, together with the Citi Services and the Additional Services, the “Services”).
(ii) In the event that Citi internally restructures, reorganizes or transfers the Citi Business to which the Banco de Chile Services relate to an Affiliate or a third party, Banco de Chile shall continue to provide the Banco de Chile Services to such Affiliate or third party to the extent provided prior to such restructuring, reorganization or transfer, but only insofar as such Affiliate or such third party continues to conduct the Citi Business to which the Banco de Chile Services relate.
(iii) In the event that Banco de Chile is involved in any transaction covered by Cláusula Cuarta of the Cooperation Agreement, Banco de Chile shall comply with Cláusula Cuarta of the Cooperation Agreement so that the assignee, transferee, or other entity resulting from the transaction or succeeding to Banco de Chile’s interest as a result thereof becomes obligated to provide the Banco de Chile Services to Citi (or to an Affiliate or third party pursuant to clause (ii) above) on the same terms and conditions as Banco de Chile is obligated to do so. For purposes of this clause (iii), this Agreement shall be deemed to be an “Operating Agreement” as such term is used in Cláusula Cuarta of the Cooperation Agreement.
2.3 Mutual Services.
Schedule 2.3 set forth certain collaborative arrangements between Citi and Banco de Chile that involve the provision of services by one or more of the Citi Parties, on the one hand, to one or more of the Banco de Chile Parties, on the other hand, or by one or more of the Banco de Chile Parties, on the one hand, to one or more of the Citi Parties, on the other hand (the “Mutual Services”).
2.4 Additional Services.
(a) If either Party desires to receive an additional service (or to expand the scope or lengthen the duration of any Service) that is not a Resumed Service, the Service Coordinators shall meet (in person or by telephone) within ten (10) days of the other Party’s receipt of a written notice by the Party desiring to receive such additional service to discuss in good faith whether and on what terms and conditions such other Party is willing to provide such additional service (or such expanded scope or lengthened duration of a Service) (each such service, to the extent provided, will be considered an “Additional Service”).
(b) The Parties shall mutually agree on the scope, terms, cost and duration of all Additional Services, all of which shall be set forth on Schedule 2.5, as amended from time to time and signed by the Parties.
2.5 Resumed Services.
If after a Service has been terminated in accordance with Section 10.2 by the Party that received such Service, and the applicable receiving Party is unable to provide such Service for itself despite using its commercially reasonable efforts to do so, then such receiving Party shall so notify the Party that provided such Service, and such providing Party will resume providing such Service as soon as reasonably practicable, if commercially and technologically feasible and subject to such providing Party’s ability to obtain any third party consents necessary to provide the Service (each, a “Resumed Service”). Each Resumed Service shall be provided in the same terms and conditions as it was provided prior to its termination as they may be amended from time to time pursuant to the terms of this Agreement. The Party that received such Service shall be responsible for all costs of the Party that provided such Service associated with resuming such Service, and to the extent reasonably practicable, such providing Party shall provide such receiving Party with advance notice of such expenses.
2.6 Service Coordinators.
Citi and Banco de Chile shall each nominate a representative to act as the primary contact person with respect to the performance of each of the Services contemplated in the Schedules hereto (each, a “Service Coordinator”); provided, however, that the Service Coordinators under one Schedule may be the same individuals as those provided under other Schedules. Unless otherwise agreed upon by the Parties, all communications relating to this Agreement and to the Services provided hereunder shall be directed to the Service Coordinators. The Service Coordinators shall keep a record of all Additional Services as provided in Section 2.4 hereof, any Resumed Services as provided in Section 2.5 hereof, and any other documentation in connection therewith. Either Party may replace its Service Coordinator at any time by providing notice in accordance with Section 11.3 of this Agreement.
2.7 Standard of Performance.
Except as otherwise specifically agreed on a Schedule thereto, and only in respect of such Schedule, each Party shall (and shall cause any party performing services on its behalf to) use commercially reasonable efforts, skill and judgment in providing the Services. Without limiting the foregoing, all Services shall be provided in a timely and workmanlike manner, reasonably consistent with recent past practice and to the extent provided prior to the Effective Date.
2.8 Cooperation.
(a) Each Party shall, and shall cause its respective Affiliates and use commercially reasonable efforts to cause its third party service providers, to reasonably cooperate with the other Party in all matters relating to the provision and receipt of the Services and to minimize the expense, distraction and disturbance to each Party; shall perform all obligations hereunder in good faith and in accordance with principles of fair dealing; and shall not engage in any willful or intentional misconduct, gross negligence, common law fraud or otherwise violate any applicable Law in connection with the provision and receipt of the Services. Such cooperation shall include (i) the execution and delivery of such further instruments or documents as may be reasonably requested by the other Party to enable the full performance of each Party’s obligations hereunder and (ii) notifying the other Party in advance of any material changes to a Party’s operating environment or Personnel (especially changes with respect to employee status), and working with the other Party to minimize the effect of such changes.
(b) Each Party will use commercially reasonable efforts, in accordance with applicable Law, to provide information and documentation necessary for the other Party to perform the Citi Services or the Banco de Chile Services, as applicable, in a manner similar as they were provided in the ordinary course prior to the Effective Date, and will use commercially reasonable efforts to make available, as reasonably requested by the other Party, sufficient resources and timely decisions, approvals and acceptances in order that the other Party may perform its obligations under this Agreement in a timely and efficient manner.
(c) The Banco de Chile Parties and the Citi Parties shall follow, and shall cause their respective Affiliates to follow, the policies, procedures and practices of the other Party and its Affiliates applicable to the Services being provided by or on behalf of such other Party that are in effect as of the Effective Date and of which the applicable Party has been made aware. Except as specifically provided in the preceding sentence or in any other agreements between the Parties or the Operating Agreements, nothing in this Agreement shall require either Party or its Affiliates to adopt, or to conduct business in accordance with, the policies, procedures, or practices of the other Party or its Affiliates.
2.9 Subcontracting.
(a) Either Party may subcontract the provision of Services to another provider (including third parties and such Party’s own Subsidiaries and Affiliates), or change an existing subcontractor of any Service provided only with the other Party’s prior written consent (which consent may not be unreasonably withheld). Such consent shall not be required when the other provider is a Subsidiary or an Affiliate of the Party providing the Service. Nothing herein shall require either Party to obtain the consent of the other Party to engage or change any subcontractor except to the extent that such engagement or change directly involves the provision of Services.
(b) Notwithstanding any subcontracting or change of subcontractors permitted under this Section 2.9, Citi or Banco de Chile, as applicable, shall always remain responsible for the performance of the Citi Services or Banco de Chile Services, as applicable, in accordance with the service levels, quality and costs set forth herein.
(c) In the event that Banco de Chile subcontracts Services to Third Parties which require access to Citi Confidential Information, Citi shall previously approve such Third Party and shall be allowed to conduct due diligence on such Third Party in accordance with Citi’s policies. In the event that Citi subcontracts Services to Third Parties which require access to Banco de Chile Confidential Information, Banco de Chile shall previously approve such Third Party and shall be allowed to conduct due diligence on such Third Party in accordance with Banco de Chile’s policies.
2.10 Certain Changes.
Either Party, when acting as a service provider, may change (a) its policies and procedures or (b) the location from which any Service is provided at any time; provided, that such Party shall always remain responsible for the performance of the Services in accordance with the service levels, quality and costs set forth herein. Such providing Party shall give the other Party reasonable prior notice of the change (which notice shall be provided no later than the time at which, and in the same manner as, such Party provides notice of such change to any applicable Affiliates).
ARTICLE III. LIMITATIONS
3.1 General Limitations.
(a) Unless expressly provided otherwise herein (i) the Citi Services provided by Citi hereunder shall be available only for the purposes of conducting the Banco de Chile Business; and (ii) the Banco de Chile Services provided by Banco de Chile hereunder shall be available only for the purposes of conducting the Citi Business.
(b) In no event shall either Party be obligated to (i) to acquire any specific additional equipment or software unless the other party agrees to bear all associated costs or (ii) maintain the employment of any specific employee; provided that such Party shall remain responsible for the performance of the Citi Services or Banco de Chile Services, as applicable, in accordance with this Agreement.
3.2 Third Party Limitations.
Each Party acknowledges and agrees that the Services provided by a Party through third parties or using third party Intellectual Property are subject to the terms and conditions of any applicable agreements between the provider of such Service and such third parties. Each Party shall use commercially reasonable efforts to (a) obtain any necessary consent from such third parties in order to provide such Services or (b) if any such consent is not obtained, provide acceptable alternative arrangements to provide the relevant Services sufficient for the other Party’s purposes. All costs associated with (a) and (b), above, shall be borne by the Party receiving the applicable Service, except that any one time costs incurred in connection with the migration of any Service to an alternative arrangement shall be borne by the Party providing the applicable Service. Notwithstanding the foregoing, the Party providing the applicable Service shall provide reasonable prior notice to the Party receiving the applicable Service of the costs associated with (a) and (b), and the Parties shall cooperate to mitigate such costs (including exploring alternative arrangements, if any).
3.3 Compliance with Laws.
Neither Party shall provide, or cause to be provided, any Service to the extent that the provision of such Service would require such Party, any of its Affiliates or any of their respective officers, directors, employees, agents or representatives to violate (a) any applicable Law, (b) any policies and/or procedures of such Party designed to respond to an applicable Law, to a new legal or regulatory issue or to a security threat or (c) any other policies and/or procedures of such Party in existence on the Effective Date. If a Party cannot provide a Service due to (c), above, the Parties shall cooperate in good faith to identify an acceptable alternative arrangement to provide the affected Service sufficient for the purposes of the other Party; provided, that the Party providing such Service shall bear any additional costs resulting from such acceptable alternative arrangement. It is further acknowledged and agreed that a Party’s failure to provide a Service or to perform an obligation, or its delay in providing a Service or performing an obligation, shall not constitute a breach of this Agreement or a default hereunder when and to the extent that such Party is prohibited by applicable Law, regulation, policy or procedure from providing the Service or performing such obligation.
3.4 Force Majeure.
(a) The Parties shall use commercially reasonable efforts to provide, or cause to be provided, the Services without interruption. In the event that any Party providing, or causing to be provided, Services is wholly or partially prevented from, or delayed in, providing one or more Services, or one or more Services are interrupted or suspended, by reason of events beyond its reasonable control (including acts of God, fire, explosion, floods, embargoes, epidemics, war, acts of terrorism, nuclear disaster, labor strikes, civil unrest and/or riots) (each, a “Force Majeure Event”), such Party shall not be obligated to deliver the affected Services during such period, and the Party that would have received such Services shall not be obligated to pay for any Services not delivered.
(b) Upon the occurrence of a Force Majeure Event, the affected Party shall promptly give written notice to the other Party of the Force Majeure Event upon which it intends to rely to excuse its performance, and of the expected duration of such Force Majeure Event. The duties and obligations of such Party hereunder shall be tolled for the duration of the Force Majeure Event, but only to the extent that the Force Majeure Event prevents such Party from performing its duties and obligations hereunder.
(c) During the duration of a Force Majeure Event, the affected Party shall use commercially reasonable efforts to avoid or remove such Force Majeure Event, and shall use commercially reasonable efforts to resume its performance under this Agreement with the least practicable delay. From and during the occurrence of a Force Majeure Event, the other Party may replace the affected Services by providing such Services for itself or engaging a third party to provide such Services.
(d) For the period beginning sixty (60) days after the occurrence of a Force Majeure Event and ending upon the termination of such Force Majeure Event, the affected Party shall pay or reimburse, as applicable, the difference, if any, between (i) all of the other Party’s reasonable costs associated with any replacement Services and (ii) the amount the other Party would have paid to such Party under the terms of this Agreement for the provision of such Services had such Party continued to perform such Services. The Party obtaining replacement Services shall use commercially reasonable efforts to mitigate the costs thereof.
3.5 Disaster Recovery Services.
No Party shall be required to provide disaster recovery Services to the extent that the Party that would receive such Services has, after the Effective Date and without the consent of the other Party (which shall not be unreasonably withheld), materially altered the equipment, hardware or software to which such disaster recovery Services pertain.
3.6 No Adverse Effect.
In providing the Services, no Party shall take any action that could reasonably be expected to have a material adverse effect on the assets or business of the other Party or any of its Affiliates, or on the ability of the other Party to comply with its obligations under this Agreement, without obtaining such other Party’s prior written consent.
3.7 Non Performance.
(a) By Citi. If Citi fails to timely provide, or cause to be provided, one or more Citi Services, other than as a result of and during the occurrence of a Force Majeure Event, and such failure prevents Banco de Chile from operating the Banco de Chile Business as it was operated in the ordinary course prior to the Effective Date, from and during such failure to provide such Citi Services, Banco de Chile, after providing prior written notice to Citi, may replace the affected Citi Services by providing such Citi Services for itself or engaging a third party to provide such Citi Services. In addition to any other remedies that Banco de Chile may be entitled to, Citi shall also pay Banco de Chile the difference, if any, between (i) all of Banco de Chile’s reasonable costs associated with such replacement Citi Services and (ii) the amount Banco de Chile would have paid to Citi under the terms of this Agreement for the provision of such Citi Services, had Citi Parties continued to perform such Citi Services.
(b) By Banco de Chile. If Banco de Chile fails to timely provide, or cause to be provided, one or more Banco de Chile Services, other than as a result of and during the occurrence of a Force Majeure Event, and such failure prevents Citi from operating the Citi Business as it was operated in the ordinary course prior to the Effective Date, from and during such failure to provide such Banco de Chile Services, Citi, after providing prior written notice to Banco de Chile, may replace the affected Banco de Chile Services by providing such Banco de Chile Services for itself or engaging a third party to provide such Banco de Chile Services. In addition to any other remedies that Citi may be entitled to, Banco de Chile shall also pay Citi the difference, if any, between (i) all of Citi’s reasonable costs associated with such replacement Banco de Chile Services and (ii) the amount Citi would have paid to Banco de Chile under the terms of this Agreement for the provision of such Banco de Chile Services, had Banco de Chile Parties continued to perform such Banco de Chile Services.
ARTICLE IV. PAYMENT
4.1 Fees.
(a) In consideration for the Citi Services and any Additional Services provided by Citi hereunder, Banco de Chile shall pay to Citi the fees for such services as determined pursuant to this Article IV (collectively, “Citi Fees”). The initial fees for the Citi Services are as set forth on each Schedule hereto, as applicable. The initial fees for each Additional Service shall be determined on a case by case basis as mutually agreed to by the Parties under Section 2.4(b).
(b) In consideration for the Banco de Chile Services and any Additional Services provided by Banco de Chile hereunder, Citi shall pay to Banco de Chile the fees for such services as determined pursuant to this Article IV (collectively, “Banco de Chile Fees”). The initial fees for the Banco de Chile Services are as set forth on each schedule hereto, as applicable. The initial fees for each Additional Service shall be determined on a case by case basis as mutually agreed to by the Parties under Section 2.4(b).
4.2 Adjustments to Initial Fees.
(a) Increases or Decreases in Direct Costs. Notwithstanding anything to the contrary set forth herein, in the event that following the date hereof the Direct Costs of Citi or Banco de Chile, as applicable, to provide a Service increase or decrease (including as a result of increases in volume under any contract), Citi or Banco de Chile, as applicable, may adjust the fees for providing such Service by the amount of such increase or decrease, in connection with and only to the extent that such adjustment is reasonable, consistent with the then prevailing market conditions, and generally applicable to all recipients of such Service, including similar services provided to Affiliates of the Party providing the Service.
(b) Adjustment Mechanism. Except as otherwise specifically provided in the Schedules hereto, and only in respect to such Schedules, the Parties, through their respective Service Coordinators, shall meet (in person or via telephone) on an annual basis to review the Services provided during the immediately preceding year; provided, however, that the Parties may meet more frequently if so agreed between them. At each such meeting, the Parties shall adjust the applicable fee for each Service for which the fees are determined by reference to the number of units used during a given year. Such adjustment shall be based on the number of units of each such Service added or reduced, as applicable, during the preceding year multiplied by the unit cost of each such Service. All adjustments to the fees for a Service pursuant to this Section 4.2(b) shall be subject to the terms and conditions of any third party contract used to provide such Service.
4.3 Billing and Payment Terms.
(a) For each country in which a Party provides Services to a recipient located in the same country: (i) such providing Party shall invoice the Party receiving such Services on a monthly or quarterly basis (such invoice to set forth a description of the Services provided and reasonable documentation to support the charges thereon) for all Services that such providing Party delivered during the preceding month or quarter, as applicable, denominated in the local currency of such country, (ii) each such invoice shall be payable within sixty (60) days after such receiving Party’s receipt of the invoice and (iii) payment of such invoices shall be made by such receiving Party to such providing Party in the local currency of the applicable country. Any Service for which the foregoing process does not apply shall be invoiced by the Party providing such Service to the Party receiving such Service in accordance with the foregoing timetable and in U.S. Dollars, and shall be paid by the Party receiving such Services in accordance with the foregoing timetable and in U.S. Dollars.
(b) If any undisputed invoice or undisputed portion of an invoice is not paid in full within sixty (60) days after the date of the invoice, interest shall accrue on the unpaid amount at the annual rate equal to the U.S. “Prime Rate” as reported on the thirtieth day after the date of the invoice in The Wall Street Journal (or, if such day is not a Business Day, the first Business Day immediately after such day), calculated on the basis of a year of three hundred sixty (360) days and the actual number of days elapsed between the end of the sixty (60) day period and the actual payment date.
(c) A Party may dispute any or all charges for ninety (90) days after the receipt of the applicable invoice. If a Party disputes any charges, the Parties shall work together in good faith to resolve such dispute in accordance with Section 11.14. If the resolution of such a dispute is that a Party owes an amount of money to the other Party, the Party that owes money shall add a credit of such owed amount to the next invoice that such Party prepares as a Service provider, provided, that if no further such invoices are due, the Party owing such amount shall pay it to the other Party within sixty (60) days following resolution of the dispute. A failure by a Party to dispute a charge within ninety (90) days after receipt of invoice shall not waive such Party’s audit and collection rights under Section 5.5.
(d) The Parties acknowledge that there may be a lag in the submission of charges from third parties relating to the provision of Services, and that the Party providing Services through such third parties shall use commercially reasonable efforts to obtain such third party invoices, and to provide same to the other Party, in a timely fashion.
(e) The existence of a dispute pursuant to Section 4.3(c) above shall not excuse either Party from any other obligation under this Agreement, including each Party’s obligations to continue to provide Services hereunder.
4.4 Sales Taxes.
All fees charged by one Party to the other under this Agreement, are exclusive of any sales, transfer, value added, goods or services tax or similar gross receipts based tax (including any such taxes that are required to be withheld, but excluding all other taxes including taxes based upon or calculated by reference to income, receipts or capital) imposed against or on Services provided (“Sales Taxes”) by a Party providing Services hereunder and such Sales Taxes will be added to the consideration where applicable. Such Sales Taxes shall be separately stated on the relevant invoice to the Party receiving Services hereunder. All taxable goods and services for which a Party receiving Services hereunder is compensating, or reimbursing, a Party providing Services hereunder shall be set out separately from non-taxable goods and services, if practicable. The Party receiving Services hereunder shall be responsible for any Sales Taxes and shall (i) remit such Sales Taxes to the Party providing Services hereunder (and such providing Party shall remit the such amounts to the applicable taxing authority), (ii) remit the applicable Sales Taxes to the applicable taxing authority directly, providing evidence of such remittance, or (ii) provide such providing Party with a certificate or other acceptable proof evidencing an exemption from liability for such Sales Taxes. In the event the Party providing Services hereunder fails timely to invoice Sales Taxes on taxable goods or services covered by this Agreement, such providing Party shall notify the Party receiving Services hereunder in a timely manner and such receiving Party shall remit such Sales Taxes to such providing Party, provided, however, that such receiving Party shall not be responsible for the payment of any additions to such Sales Taxes, including penalties and interest imposed due to a failure by such providing Party to remit or cause to be remitted such Sales Taxes in a timely manner to the appropriate taxing authority, unless such failure relates to the failure of such receiving Party to pay to such providing Party the amount of the Sales Taxes properly invoiced in accordance with the terms herein.
4.5 Offset.
In no event shall a Party offset any amounts payable by it hereunder for its receipt of Services by amounts owed to it hereunder for its provision of Services.
ARTICLE V. ACCESS AND SECURITY
5.1 Access; Work Policy.
(a) At all times during the Term, each Party shall provide, and shall cause its Affiliates and third parties to provide, the other Party and its Personnel reasonable ingress to and egress from its facilities and premises, and reasonable access to its equipment and Personnel, for any purpose solely connected with the due delivery or receipt of Services hereunder, the exercise of any right under this Agreement or the performance of any obligations required by this Agreement.
(b) Subject to the conditions set forth in (a) above, each Party’s Personnel shall comply with the other Party’s safety and security regulations applicable to each specific site or facility while working at such site or facility. Except as otherwise agreed to by the Parties, each Party’s Personnel shall observe the working hours, working rules, and holiday schedules of the other Party while working on the premises of the other Party.
(c) All Schedules hereto that refer to access to facilities, premises, equipment, Personnel and Systems (as defined below) to the relevant Parties, shall be subject to the provisions set forth in this Article V and Schedule 5.4 hereto.
5.2 Security Level; Additional Security Measures.
(a) Citi Parties and Banco de Chile Parties shall work together to ensure that, when providing Services, they are each able to maintain their current level (or, if greater, an industry standard level) of physical and electronic security during the Term (including data security and data privacy), and to address any new security related issues, including compliance with any applicable Law related to security and issues related to new technologies or threats.
(b) Any Party providing Services may take physical or information security measures that affect the manner in which Services are provided, so long as the substance or overall functionality of the affected Services is not materially altered by such measures; provided, that the Party receiving such Services shall be given reasonable, prior notice of any such physical or information security measures that are material.
5.3 Security Breaches.
In the event of a security breach that relates to the Services, Citi Parties and Banco de Chile Parties shall, subject to any applicable Law and their respective internal policies, cooperate with each other regarding the timing and manner of (a) notification to their respective customers, potential customers, employees and/or agents concerning a breach or potential breach of security and (b) disclosures to appropriate Governmental Entities.
5.4 Systems Security.
(a) If any Citi Party or Banco de Chile Party, or its Personnel or authorized third party, will be given passwords and/or access codes or any other form or mechanism (collectively, “Passwords”) to limit or control access to any Banco de Chile Party’s or Citi Party’s, as applicable, computer systems or software (“Systems”) in connection with the performance of the Services, the accessing Party or its Personnel, as the case may be, shall comply with (i) the processes and procedures set forth in Schedule 5.4, and (ii) all of such other Party’s system security policies, procedures and requirements (as amended from time to time, the “Security Regulations”), and will not tamper with, compromise or circumvent any security or audit measures employed by such other Party. Such Passwords are Confidential Information as provided in Section 5.4(e), and may only be used by such receiving Party and its Authorized Users. Each of Citi and Banco de Chile represents that any user of the Banco de Chile Services or the Citi Services, as the case may be, gaining access by means of such Passwords has been expressly authorized by Citi and Banco de Chile, as the case may be, to use them. Where a Password has been provided to a Party’s employee, agent or customer, such Party shall cause such employee, agent or customer to cease all use of such Password if such employment, agency or customer relationship with such Party terminates for any reason, and in addition such Party shall give the other Party immediate notice of the need to de-activate such Password. Each Party acknowledges and agrees that the other Party may rely on any communications or instructions made online by a person using a Password as if coming from the person authorized to use such Password acting on behalf of such Party, and that any such communications or instructions, including any use or misuse of Passwords by anyone, will be binding on such Party and, if applicable, the person or entity to whom the Password was issued.
(b) Each Party shall use commercially reasonable efforts to ensure that only those of its Personnel who are specifically authorized to have access to the Systems of the other Party gain such access, and to prevent unauthorized access, use, destruction, alteration or loss of information contained therein, including notifying its Personnel regarding the restrictions set forth in this Agreement and establishing appropriate policies designed to effectively enforce such restrictions.
(c) If, at any time, either Party determines that the other Party or its Personnel has sought to circumvent, or has circumvented, its Security Regulations, that any unauthorized Personnel of the other Party has accessed its Systems or that the other Party or any of its Personnel has engaged in activities that may lead to the unauthorized access, use, destruction, alteration or loss of data, information or software, such Party shall immediately terminate any such Personnel’s access to the Systems and immediately notify the other Party.
(d) Citi Parties, Banco de Chile Parties and their respective Personnel, shall access and use only those Systems, and only such data and information within such Systems to which they have been granted the right to access and use. Any Party shall have the right to deny the Personnel of the other Party access to such Party’s Systems, after prior written notice, in the event the Party reasonably believes that such Personnel pose a security concern.
(e) All user identification numbers and Passwords of a Party disclosed to the other Party, and any information obtained from the use of such disclosing Party’s Systems, shall be deemed Confidential Information of the relevant disclosing Party.
(f) Each Party will cooperate with the other Party in investigating any apparent unauthorized access to a Party’s Systems or any apparent unauthorized release by a Party or such Party’s Personnel of Confidential Information of Citi or Confidential Information of Banco de Chile, as applicable. Each Party will (i) immediately notify the other Party if such Party has revoked access to its own Systems to any of its Personnel if such Personnel also has access to the other Party’s Systems and (ii) immediately revoke any access to the other Party’s Systems once such Personnel no longer has a need to access the other Party’s Systems.
5.5 Records; Inspection and Audit Rights.
(a) During the Term and for six years thereafter, each Party agrees to maintain accurate records arising from or related to any Service provided hereunder, including accounting records and documentation produced in connection with the provision of any Service; provided, that each Party shall maintain such records for any longer duration required by any Law that is applicable to the other Party and of which such Party has reasonable prior notice.
(b) Upon reasonable written notice from the Party receiving a Service, the Party providing such Service shall make available to such receiving Party or its designees (at such receiving Party’s sole expense) reasonable access to or, at the providing Party’s option and expense, copies of, the records with respect to such Service during regular business hours. Such records shall include documents relating to the amounts charged by the Party providing the Service, and the Party receiving the Service shall have the right to review and audit such records to verify such amounts. The rights and obligations of the Parties under the foregoing provisions of this Section 5.5(b) shall be subject to any limitations imposed by applicable Law. In the event of any discrepancies or disputes between the amounts charged by a Party and such Party’s records, the Parties shall work together to resolve such dispute in accordance with Section 11.14. If the resolution of such a dispute is that a Party owes money to the other Party, the Party to which money is owed shall add the amount owed to the next invoice that such Party prepares as a service provider; provided, that if no further invoices are due, the Party owing such amount shall pay it to the other Party within sixty (60) days following resolution of the dispute).
5.6 Legal and Regulatory Audit Rights.
Each Party providing a Service shall permit the auditors of the recipient of such Service charged with evaluating the Service recipient’s compliance with any applicable Law, reasonable access to the providing Party’s relevant documentation, facilities and personnel, as applicable, in accordance with and subject to applicable Laws and regulations for purposes of auditing such Services for compliance with such Laws pursuant to commercially reasonable market practices of both Parties, and solely connected with the due delivery or receipt of Services hereunder. Such access shall be granted only pursuant to reasonable procedures to be reasonably agreed to by the Parties (e.g. that the auditors be accompanied by personnel of the Party being audited) and approved by the relevant audit committee, if required (with such consent to not be unreasonably withheld or delayed by such audit committee). Once granted, such access shall include, if necessary, access to Governmental Entities of the recipient’s Party, provided that, with respect to such Governmental Entities such access is granted in accordance with the procedures that have been agreed to between the relevant Government Entities in Chile and those of the United States. The audit rights granted herein shall not include any information, matter or documentation related to or included in the “Políticas y Procedimientos Aprobados” or in the “Políticas y Procedimientos Requeridos”, as defined in Sixth Clause of the Merger Agreement, nor any material strategic information (as reasonably determined by the providing Party), or any information subject to banking secrecy laws, of the providing Party. To the extent that information related to or included in the “Politicas y Procedimientos Aprobados” is needed in order to complete an audit, such information may be obtained pursuant to the procedures that are referred to in the Merger Agreement.
For the avoidance of doubt, unless previously agreed to in writing between the Parties by means of a corresponding Schedule to this Agreement, the providing Party shall not be obligated to comply with any Law that is applicable to the recipient Party in connection with the delivery of Services hereunder. Unless such corresponding Schedule describes in writing the standards or procedures that the providing Party must follow in order for the recipient Party to be in compliance with Law, the recipient Party acknowledges and agrees that the providing Party will not be in breach of this Agreement or constitute a default hereunder if it acts or fails to act in a manner that results in a violation of Law applicable to such recipient Party.
5.7 Duty to Remedy.
In the event that (a) a Party cannot demonstrate the existence of adequate controls in accordance with Section 5.5, or (b) an audit under Section 5.6 identifies noncompliance with an applicable Law, the Party providing the applicable Service shall remedy such lack of controls or noncompliance, as applicable, in a commercially reasonable time and manner.
5.8 Citi Web Sites, Platforms and Other Hosted Services.
(a) Citi Hosted Applications. In connection with the Services provided hereunder, Citi will provide Banco de Chile access, solely for the internal use of Banco de Chile, except as provided in Section 5.8(e), to certain web sites, platforms and other interactive services hosted by or for Citi as set forth on Schedules 2.1(a)(1), 2.1(a)(2) and 2.1(a)(3) (each, a “Citi Hosted Application”) subject to the terms and conditions of this Section 5.8 (the “Citi Terms of Use”). These Citi Terms of Use govern use by Banco de Chile, and other users deemed to be acting on its behalf due to use of Passwords issued to Banco de Chile (the “Banco de Chile Authorized Users”), of the Citi Hosted Applications, including the Content, products and services provided and/or accessible thereby.
(b) Hosted Application-Specific Agreements. One or more of the Citi Hosted Applications may be subject to a client access agreement, system rules, and or/other agreement specific to the use of such Hosted Application(s) (each, a “Citi Hosted Application-Specific Agreement”). Citi Hosted Application-Specific Agreements may be identified to Banco de Chile and/or a Banco de Chile Authorized User (a) by written notice with a requirement that Banco de Chile physically execute and deliver a tangible copy of such Citi Hosted Application-Specific Agreement (“Citi Written Usage Agreement”), (b) by an execution procedure implemented on such Citi Hosted Application(s) requiring affirmative acknowledgement of the terms of such Citi Hosted Application-Specific Agreement and entry thereto by clicking or other recordable acknowledgement (“Citi Click-Wrap Agreement”), or (c) by the posting of such Citi Hosted Application-Specific Agreement on such Citi Hosted Application in a manner that permits browsing thereof by any Authorized User of such Citi Hosted Application (“Citi Browse-Wrap Agreement”). Regardless of whether a Citi Hosted Application-Specific Agreement constitutes a Citi Written Usage Agreement, Citi Click-Wrap Agreement or Citi Browse-Wrap Agreement, the Parties agree that, upon Banco de Chile’s use of any Citi Hosted Application for which such a Citi Hosted Application-Specific Agreement is so identified, the Parties will be subject to and bound by such Citi Hosted Application-Specific Agreement in connection with Banco de Chile’s or any Banco de Chile Authorized User’s use of such Citi Hosted Application and in particular Banco de Chile’s or any Banco de Chile Authorized User’s use of such Citi Hosted Application shall constitute Banco de Chile’s acceptance of such Citi Hosted Application-Specific Agreement. These Citi Terms of Use are in addition to the terms of such Citi Hosted Application-Specific Agreement and are not intended to modify or supersede the terms of such Citi Hosted Application-Specific Agreement, which Agreement, in the event of any conflicting terms, will govern.
(c) Links to or From Third Party Websites. Solely as a convenience to Banco de Chile and the Authorized Users, the Citi Hosted Applications may contain links to certain Internet sites or other interactive services sponsored and maintained by third parties. Citi is not responsible or liable for, and makes no representations or warranties, concerning the Content of any such third party sites or services, including appropriateness of any products, services or transactions described therein, and any such link does not constitute an endorsement, authorization, sponsorship, or affiliation by Citi with respect to that site or service, or its owners or providers, and Banco de Chile may access that site or service solely at Banco de Chile’s own risk.
(d) Intellectual Property Matters. All Content on the Citi Hosted Applications is the exclusive property of Citi or its licensors and is protected by intellectual property Laws of the United States of America and international intellectual property Laws. All rights not expressly granted herein are reserved to Citi. Citi hereby grants Banco de Chile a non-exclusive, non-transferable license for the term of the Agreement to access and download, display, and print the Content accessible via the Citi Hosted Applications solely to the extent necessary for the operation of the Banco de Chile Business, provided that Banco de Chile does not republish such Content and that Banco de Chile retains all copyright and other proprietary notices pertaining to such Content. In connection with any Citi Hosted Application, including but not limited to a web-based service, that enables Banco de Chile to post or publish Content to third parties via such Citi Hosted Application, Banco de Chile acknowledges and agrees that Citi shall have the limited right to use, publish, and otherwise exploit any and all Content that Banco de Chile so posts or publishes as may be reasonably necessary in connection with such Citi Hosted Application, and Banco de Chile hereby waives any claims against Citi for any alleged or actual infringements of any Intellectual Property or other proprietary rights in connection with such use of such Content. Banco de Chile covenants that Banco de Chile shall not post or otherwise publish on the Citi Hosted Applications any Content in violation of any Law; containing a computer virus or other destructive element; containing advertising; or constituting or containing false or misleading statements. Citi does not and cannot review all Content posted to the Citi Hosted Applications by Banco de Chile and is not responsible for such Content. However, Citi reserves the right to refuse to post and the right to remove any Content, in whole or in part, for any reason or for no reason.
(e) Right to Grant Access to Citi Hosted Applications to Banco de Chile Permitted Customers. Banco de Chile and its Affiliates may grant Banco de Chile Permitted Customers access to the portions of the Citi Hosted Applications designated by Citi for such purpose and to use the Citi Customer Documentation related thereto. Each such grant of access to a Banco de Chile Permitted Customer shall be solely for the purposes of and as each such Citi Hosted Application relates to the servicing of such Banco de Chile Permitted Customer in the operation of the Banco de Chile Business. Furthermore, each such permitted grant shall be nonexclusive, non-assignable, non-transferable, and shall not include any right to grant further access rights. Banco de Chile shall require each subgrantee to execute and deliver an agreement respecting access to such Citi Hosted Applications in a form approved in advance by Citi. Such form shall contain (a) a disclaimer of liability and waiver of special damages with respect to Citi, (b) restrictions on Confidential Information of Citi consistent with the restrictions set forth in ARTICLE VI of this Agreement, and (c) restrictions on use and ownership of the applicable Citi Hosted Applications otherwise consistent with the terms and conditions of this Agreement. In addition, Banco de Chile shall not enter into any such subgrantee access agreement without the prior approval of Citi in each case.
5.9 Banco de Chile Web Sites, Platforms and Other Hosted Services.
(a) Banco de Chile Hosted Applications. In connection with the Services provided hereunder, Banco de Chile will provide Citi access, solely for the internal use of Citi, except as provided in Section 5.9(e) to certain web sites, platforms and other interactive services hosted by or for Banco de Chile as set forth on Schedule 2.2(a)(1) (each, a “Banco de Chile Hosted Application”) subject to the terms and conditions of this Section 5.9 (the “Banco de Chile Terms of Use”). These Banco de Chile Terms of Use govern use by Citi, and other users deemed to be acting on its behalf due to use of Passwords issued to Citi (the “Citi Authorized Users”), of the Banco de Chile Hosted Applications, including the Content, products and services provided and/or accessible thereby.
(b) Hosted Application-Specific Agreements. One or more of the Banco de Chile Hosted Applications may be subject to a client access agreement, system rules, and or/other agreement specific to the use of such Hosted Application(s) (each, a “Banco de Chile Hosted Application-Specific Agreement”). Banco de Chile Hosted Application-Specific Agreements may be identified to Citi and/or a Citi Authorized User (a) by written notice with a requirement that Citi physically execute and deliver a tangible copy of such Banco de Chile Hosted Application-Specific Agreement (“Banco de Chile Written Usage Agreement”), (b) by an execution procedure implemented on such Banco de Chile Hosted Application(s) requiring affirmative acknowledgement of the terms of such Banco de Chile Hosted Application-Specific Agreement and entry thereto by clicking or other recordable acknowledgement (“Banco de Chile Click-Wrap Agreement”), or (c) by the posting of such Banco de Chile Hosted Application-Specific Agreement on such Banco de Chile Hosted Application in a manner that permits browsing thereof by any Authorized User of such Banco de Chile Hosted Application (“Banco de Chile Browse-Wrap Agreement”). Regardless of whether a Banco de Chile Hosted Application-Specific Agreement constitutes a Banco de Chile Written Usage Agreement, Banco de Chile Click-Wrap Agreement or Banco de Chile Browse-Wrap Agreement, the Parties agree that, upon Citi’s use of any Banco de Chile Hosted Application for which such a Banco de Chile Hosted Application-Specific Agreement is so identified, the Parties will be subject to and bound by such Banco de Chile Hosted Application-Specific Agreement in connection with Citi’s or any Citi Authorized User’s use of such Banco de Chile Hosted Application and in particular Citi’s or any Citi Authorized User’s use of such Banco de Chile Hosted Application shall constitute Citi’s acceptance of such Banco de Chile Hosted Application-Specific Agreement. These Banco de Chile Terms of Use are in addition to the terms of such Banco de Chile Hosted Application-Specific Agreement and are not intended to modify or supersede the terms of such Banco de Chile Hosted Application-Specific Agreement, which Agreement, in the event of any conflicting terms, will govern.
(c) Links to or From Third Party Websites. Solely as a convenience to Citi and the Citi Authorized Users, the Banco de Chile Hosted Applications may contain links to certain Internet sites or other interactive services sponsored and maintained by third parties. Banco de Chile is not responsible or liable for, and makes no representations or warranties, concerning the Content of any such third party sites or services, including appropriateness of any products, services or transactions described therein, and any such link does not constitute an endorsement, authorization, sponsorship, or affiliation by Banco de Chile with respect to that site or service, or its owners or providers, and Citi may access that site or service solely at Citi’s own risk.
(d) Intellectual Property Matters. All Content on the Banco de Chile Hosted Applications is the exclusive property of Banco de Chile or its licensors and is protected by intellectual property Laws of Chile and international intellectual property Laws. All rights not expressly granted herein are reserved to Banco de Chile. Banco de Chile hereby grants Citi a non-exclusive, non-transferable license for the term of the Agreement to access and download, display, and print the Content accessible via the Banco de Chile Hosted Applications solely to the extent necessary for the operation of the Citi Business, provided that Citi does not republish such Content and that Citi retains all copyright and other proprietary notices pertaining to such Content. In connection with any Banco de Chile Hosted Application, including but not limited to a web-based service, that enables Citi to post or publish Content to third parties via such Banco de Chile Hosted Application, Citi acknowledges and agrees that Banco de Chile shall have the limited right to use, publish, and otherwise exploit any and all Content that Citi so posts or publishes as may be reasonably necessary in connection with such Banco de Chile Hosted Application, and Citi hereby waives any claims against Banco de Chile for any alleged or actual infringements of any Intellectual Property or other proprietary rights in connection with such use of such Content. Citi covenants that Citi shall not post or otherwise publish on the Banco de Chile Hosted Applications any Content in violation of any Law; containing a computer virus or other destructive element; containing advertising; or constituting or containing false or misleading statements. Banco de Chile does not and cannot review all Content posted to the Banco de Chile Hosted Applications by Citi and is not responsible for such Content. However, Banco de Chile reserves the right to refuse to post and the right to remove any Content, in whole or in part, for any reason or for no reason.
(e) Right to Grant Access to Banco de Chile Hosted Applications to Citi Permitted Customers. Citi and its Affiliates may grant Citi Permitted Customers access to the portions of the Banco de Chile Hosted Applications designated by Banco de Chile for such purpose and to use the Banco de Chile Customer Documentation related thereto. Each such grant of access to a Citi Permitted Customer shall be solely for the purposes of and as each such Banco de Chile Hosted Application relates to the servicing of such Citi Permitted Customer in the operation of the Citi Business. Furthermore, each such permitted grant shall be nonexclusive, non-assignable, non-transferable, and shall not include any right to grant further access rights. Citi shall require each subgrantee to execute and deliver an agreement respecting access to such Banco de Chile Hosted Applications in a form approved in advance by Banco de Chile. Such form shall contain (a) a disclaimer of liability and waiver of special damages with respect to Banco de Chile, (b) restrictions on Confidential Information of Banco de Chile consistent with the restrictions set forth in ARTICLE VI of this Agreement, and (c) restrictions on use and ownership of the applicable Banco de Chile Hosted Applications otherwise consistent with the terms and conditions of this Agreement. In addition, Citi shall not enter into any such subgrantee access agreement without the prior approval of Banco de Chile in each case.
ARTICLE VI. CONFIDENTIALITY
6.1 Confidential Information.
Information of the Parties relating to the Services or otherwise disclosed by the Parties to each other in connection with this Agreement, to the extent it qualifies as “Información Confidencial” under subsection (a) of Cláusula Quinta of the Connectivity Agreement, shall be subject to the provisions of subsection (a) of Cláusula Quinta of the Connectivity Agreement, hereinafter “Confidential Information”. In addition, the Parties agree to periodically review applicable regulatory guidelines and industry standards relating to confidentiality, the retention and/or destruction of third party information, including third party data, and disclosure of information security breaches. The Parties will comply with the applicable Law and any applicable regulatory guidelines and industry standards, and will confer regarding internal policies reflecting such Law and good practices regarding data retention and deletion and implement such practices as deemed necessary or desirable.
ARTICLE VII. INTELLECTUAL PROPERTY AND DATA
7.1 Ownership of Data and Intellectual Property.
(a) Notwithstanding anything contained herein to the contrary, (i) all data created pursuant to a Service and on behalf of the Party receiving such Service, shall be owned by such receiving Party, and (ii) all systems, technology and Intellectual Property owned by Banco de Chile or Citi, as applicable, shall continue to be owned by Banco de Chile or Citi, as applicable, even if such systems, technology and Intellectual Property are serviced by Citi or Banco de Chile, as applicable.
(b) Citi shall be the sole and exclusive owner of all rights, title and interest in the data, source code and other Intellectual Property it creates (or, subject to the terms of any applicable third party contracts, has created on its behalf) pursuant to its performance under this Agreement, including any modification, enhancement, or derivative work of any Citi Intellectual Property. To the extent that such Intellectual Property is to be used or accessed by Banco de Chile as part of the Citi Services hereunder, Citi shall grant Banco de Chile a non-exclusive license or right of access, as applicable, during the Term, to use the foregoing in the Banco de Chile Business subject to the terms and conditions applicable to such Citi Services hereunder, or as Citi and Banco de Chile may otherwise agree in writing on a case-by-case basis. For the avoidance of doubt, if Banco de Chile requests, commissions or otherwise suggests new features or functionality that Citi, at its sole discretion, creates or adopts for any Citi Service or Citi Intellectual Property, or if Citi otherwise produces materials, including but not limited to applications, new services or Additional Services at Banco de Chile’s request, any and all of the foregoing, including all Intellectual Property rights associated therewith will be the sole and exclusive property of Citi.
(c) This Agreement grants no express or implied license, right or interest in or to any copyright, patent, trade secret, trademark, invention or other intellectual property right of Citi other than the express licenses and rights set forth in this ARTICLE VII. Banco de Chile shall not encumber or suffer to exist any lien or security interest on any Intellectual Property owned by Citi, nor shall Banco de Chile take any action that would cause any Intellectual Property owned by Citi to be placed in the public domain. Banco de Chile shall not remove, or allow (through act or omission) to be removed, any copyright, trade secret or other proprietary rights notice from any Intellectual Property owned by Citi. Banco de Chile shall take any actions reasonably requested by Citi, at Citi’s expense, to perfect and protect Citi’s right, title, and interest acknowledged and agreed to in this ARTICLE VII.
(d) Banco de Chile shall be the sole and exclusive owner of all rights, title and interest in the data, source code and other Intellectual Property it creates (or, subject to the terms of any applicable third party contracts, has created on its behalf) pursuant to its performance under this Agreement, including any modification, enhancement, or derivative work of any Banco de Chile Intellectual Property. To the extent that such Intellectual Property is to be used or accessed by Citi as part of the Banco de Chile Services hereunder, Banco de Chile shall grant Citi a non-exclusive license or right of access, as applicable, during the Term, to use the foregoing in the Citi Business subject to the terms and conditions applicable to such Banco de Chile Services hereunder, or as Banco de Chile and Citi may otherwise agree in writing on a case-by-case basis. For the avoidance of doubt, if Citi requests, commissions or otherwise suggests new features or functionality that Banco de Chile, at its sole discretion, creates or adopts for any Banco de Chile Service or Banco de Chile Intellectual Property, such new features or functionality will be the sole and exclusive property of Banco de Chile.
(e) This Agreement grants no express or implied license, right or interest in or to any copyright, patent, trade secret, trademark, invention or other intellectual property right of Banco de Chile other than the express licenses and rights set forth in this ARTICLE VII and Schedule 2.2(a)(1) hereto. Citi shall not encumber or suffer to exist any lien or security interest on any Intellectual Property owned by Banco de Chile, nor shall Citi take any action that would cause any Intellectual Property owned by Banco de Chile to be placed in the public domain. Citi shall not remove, or allow (through act or omission) to be removed, any copyright, trade secret or other proprietary rights notice from any Intellectual Property owned by Banco de Chile. Citi shall take any actions reasonably requested by Banco de Chile, at Banco de Chile’s expense, to perfect and protect Banco de Chile’s right, title, and interest acknowledged and agreed to in this ARTICLE VII.
(f) Except as provided in the Trademark License Agreement, to the extent that Citi and Banco de Chile jointly create Intellectual Property hereunder, such Intellectual Property shall be owned jointly by Citi and Banco de Chile (with no right of accounting); provided, that no Trademarks shall be jointly owned; and provided, further, that if such Intellectual Property is derived from or otherwise based upon a Party’s Intellectual Property, only the newly created derivative Intellectual Property shall be jointly owned, and such joint ownership shall not affect the ownership of the underlying Intellectual Property. If the Parties collaborate to create any Trademarks (i) that are derived from or based upon a Party’s Intellectual Property, such Trademarks shall be owned by such Party and (ii) that are not derived from or based upon a Party’s Intellectual Property, the Parties shall agree in writing before such creation which Party shall own such Trademarks, and the other Party’s rights therein.
7.2 Data Protection.
To the extent reasonably required by a Party providing Services, each Party shall cause the Citi Parties or Banco de Chile Parties, as applicable, that receive Services hereunder to execute a written agreement with such Party, sufficient to comply with any applicable Law relating to data protection.
ARTICLE VIII. DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
8.1 Disclaimer of Representations and Warranties.
THE CITI SERVICES, ON THE ONE HAND, AND THE BANCO DE CHILE SERVICES, ON THE OTHER HAND (INCLUDING IN EACH CASE ANY SOFTWARE OR DOCUMENTATION RELATED THERETO ANDCONTENT PROVIDED THEREFROM), ARE PROVIDED “AS IS,” WITH ALL FAULTS, AND THE ENTIRE RISK AS TO THE SATISFACTORY QUALITY, PERFORMANCE, AND ACCURACY THEREOF SHALL BE WITH THE RECIPIENT OF THE SERVICES. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE OPERATING AGREEMENTS, EACH PARTY ON BEHALF OF ITSELF AND ITS SUBSIDIARIES, AFFILIATES, LICENSORS, THIRD PARTY VENDORS AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS EXPRESSLY DISCLAIMS AND MAKES NO REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO ANY CITI SERVICE OR THE CITIDOCUMENTATION OR CONTENT, OR THE BANCO DE CHILE SERVICES OR THE BANCO DE CHILE DOCUMENTATION OR CONTENT, AS THE CASE MAY BE (INCLUDING THE INFORMATION PROVIDED THEREFROM), WITH RESPECT TO THE SERVICES TO BE PROVIDED UNDER THIS AGREEMENT, INCLUDING WARRANTIES WITH RESPECT TO MERCHANTABILITY, OR SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON INFRINGEMENT OF ANY SOFTWARE OR HARDWARE PROVIDED HEREUNDER AND ANY WARRANTIES ARISING FROM COURSE OF DEALING, COURSE OF PERFORMANCE OR TRADE USAGE. NOTHING IN THIS AGREEMENT IS INTENDED TO LIMIT ANY RIGHTS OR REMEDIES OF EITHER PARTY UNDER THE OPERATING AGREEMENTS.
ARTICLE IX. INDEMNIFICATION
9.1 Indemnification of Banco de Chile.
Subject to the terms of this ARTICLE IX and to the specific indemnifications provisions agreed between the Parties in one or more of the Schedules hereto (and applicable exclusively to such Schedules), from and after the Effective Date, Citi shall indemnify, defend, save and hold harmless Banco de Chile and each of its officers, directors, employees, agents, representatives, successors and assigns (collectively, the “Banco de Chile Indemnified Parties”), from and against any and all Losses (including such fees and expenses related to the enforcement of this Agreement), to the extent resulting from or arising out of any action, suit, proceedings, claim, demand, investigation or assessment made or brought by a third party that is unaffiliated with the Indemnified Party (each, a “Third Party Claim”) to the extent arising from or related to any Citi Party’s breach of this Agreement including, without limitation, any (a) unauthorized use or access to the Systems or security breaches as described in Article V hereof (and other Sections in connection therewith) by a Citi Party or (b) any negligent action or willful misconduct by a Citi Party or (c) any misuse of Confidential Information as provided in Section 6.1 herein (and other Sections in connection therewith) by a Citi Party or (d) infringement or misappropriation by the Services and materials provided by a Citi Party under this Agreement of such third party’s (i) patents or (ii) copyrights, trademarks or trade secrets.
9.2 Indemnification of Citi.
Subject to the terms of this ARTICLE IX and to the specific indemnifications provisions agreed between the Parties in one or more of the Schedules hereto (and applicable exclusively to such Schedules), from and after the Effective Date, Banco de Chile shall indemnify, defend, save and hold harmless Citi and each of its officers, directors, employees, agents, representatives, successors and assigns (collectively, the “Citi Indemnified Parties” and, together with the Banco de Chile Indemnified Parties, the “Indemnified Parties”), from and against any and all Losses (including such fees and expenses related to the enforcement of this Agreement), to the extent resulting from or arising out of any Third Party Claim to the extent arising from or related to any Banco de Chile Party’s breach of this Agreement including, without limitation, any (a) unauthorized use or access to the Systems or security breaches as described in Article V hereof (and other Sections in connection therewith) by a Banco de Chile Party or (b) any negligent action or willful misconduct by a Banco de Chile Party or (c) any misuse of Confidential Information as provided in Section 6.1 herein (and other Sections in connection therewith) by a Banco de Chile Party or (d) infringement or misappropriation by the Services and materials provided by a Banco de Chile Party under this Agreement of such third party’s (i) patents or (ii) copyrights, trademarks or trade secrets.
9.3 Claims.
(a) Upon receipt by an Indemnified Party of notice of a Third Party Claim with respect to a matter for which such Indemnified Party is indemnified under this ARTICLE IX which has given, or is reasonably expected to give, rise to a claim for Losses, the Indemnified Party shall as soon as practicable, in the case of a Banco de Chile Indemnified Party, notify Citi, and, in the case of a Citi Indemnified Party, notify Banco de Chile (Citi or Banco de Chile, as the case may be, the “Indemnifying Party”), in writing, indicating the nature of such Third Party Claim and the basis therefor; provided, however, that any delay or failure by the Indemnified Party to give notice to the Indemnifying Party shall relieve the Indemnifying Party of its obligations hereunder only to the extent, if at all, that it is prejudiced by reason of such delay or failure. Such written notice requirement shall be satisfied by promptly transmitting the statement of claim, complaint, regulatory correspondence or other document triggering the indemnification to the Indemnifying Party along with a cover letter stating briefly why the Indemnified Party believes the claim is subject to indemnification. Such notice shall be sent by facsimile or overnight delivery service in accordance with Section 11.3.
(b) The Indemnifying Party shall have ten (10) Business Days after receipt of notice to elect, at its option, to assume and control the defense of, at its own expense and by its own counsel, any such Third Party Claim, and shall be entitled to assert any and all defenses available to the Indemnified Party to the fullest extent permitted under the applicable Law.
(c) If the Indemnifying Party shall undertake to compromise any such Third Party Claim, it shall promptly, but in any event within ten (10) Business Days of the receipt of notice from the Indemnified Party of such Third Party Claim, notify the Indemnified Party of its intention to do so, and the Indemnified Party agrees to cooperate fully with the Indemnifying Party and its counsel in the compromise of, or defense against, any such Third Party Claim; provided, however, that the Indemnifying Party shall not settle, compromise or discharge, or admit any liability with respect to, any such Third Party Claim without the prior written consent of the Indemnified Party (which consent will not be unreasonably withheld or delayed) unless the relief consists solely of money Losses to be paid by the Indemnifying Party and includes a provision whereby the plaintiff or claimant in the matter releases the Banco de Chile Indemnified Parties or Citi Indemnified Parties, as applicable, from all liability with respect thereto.
(d) Notwithstanding an election by the Indemnifying Party to assume the defense of any action or proceeding, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such action or proceeding, and the Indemnifying Party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the Indemnified Party shall have determined in good faith that an actual or potential conflict of interest makes representation by the same counsel or the counsel selected by the Indemnifying Party inappropriate or (ii) the Indemnifying Party shall have authorized the Indemnified Party to employ separate counsel at the Indemnifying Party’s expense.
(e) In any event, the Indemnified Party and Indemnifying Party and their counsel shall cooperate in the defense of any Third Party Claim subject to this ARTICLE IX, keep such Persons informed of all developments relating to any such Third Party Claims and provide copies of all relevant correspondence and documentation relating thereto. All costs and expenses incurred in connection with the Indemnified Party’s cooperation shall be borne by the Indemnifying Party. In any event, the Indemnified Party shall have the right at its own expense to participate in the defense of such asserted liability.
(f) If the Indemnifying Party receiving such notice of a Third Party Claim does not elect to defend such Third Party Claim pursuant to Section 9.3(b), or does not defend such Third Party Claim in good faith, the Indemnified Party shall have the right, in addition to any other right or remedy it may have hereunder, at the Indemnifying Party’s expense, to defend such Third Party Claim; provided, however, that the Indemnified Party shall not settle, compromise or discharge, or admit any liability with respect to, any such Third Party Claim without the written consent of the Indemnifying Party (which consent will not be unreasonably withheld or delayed).
9.4 Limitations.
Notwithstanding anything else contained in this Agreement to the contrary:
(a) Citi or Banco de Chile, as applicable, shall not be liable for any amounts for which the Banco de Chile Indemnified Parties or the Citi Indemnified Parties, as applicable, are otherwise entitled to indemnification pursuant to Section 9.1 or Section 9.2, as applicable, unless the amount of Losses with respect to the particular act, circumstance, development, event, fact, occurrence or omission giving rise to such Losses exceeds $50,000 and shall be liable only to the extent such Losses exceed $50,000 (aggregating all such Losses arising from the same set of facts or circumstances).
(b) Citi’s total liability with respect to Losses incurred by Banco de Chile Indemnified Parties under this Agreement in any year shall not exceed, in the aggregate, two times the aggregate amount of the Citi Fees paid hereunder during such year, except to the extent that any liability arises out of Citi’s gross negligence, willful or intentional misconduct, common law fraud or other violation of any applicable Law.
(c) Banco de Chile’s total liability with respect to Losses incurred by Citi Indemnified Parties under this Agreement in any year shall not exceed, in the aggregate, two times the aggregate amount of the Banco de Chile Fees paid hereunder during such year, except to the extent that any liability arises out of Banco de Chile’s gross negligence, willful or intentional misconduct, common law fraud or other violation of any applicable Law.
9.5 Exclusions.
Notwithstanding anything contained in this Agreement to the contrary, in no event shall any Indemnifying Party be obligated under this ARTICLE IX to indemnify an Indemnified Party otherwise entitled to indemnity hereunder in respect of any Losses to the extent that such Losses result from (a) the Indemnified Party’s willful or intentional misconduct or gross negligence, (b) the Indemnified Party’s failure to perform its obligations under this Agreement, (c) the Indemnified Party’s violation of any applicable Law, (d) acts of the Indemnified Party that are outside of the ordinary course of business, other than reasonable acts taken pursuant to Section 9.9 hereunder unless (i) taken at the Indemnifying Party’s written request and direction or (ii) approved in advance in writing by the Indemnifying Party, or (e) acts taken by the Indemnifying Party pursuant to the Indemnified Party’s specific (x) written request and direction, provided that no schedule to this Agreement shall constitute such a request or (y) oral request and direction, so long as such oral request or direction was made, and the acts taken in response to such oral request or direction were taken, in the ordinary course of business, consistent with past practice between the Parties; provided, that in the case of (x) or (y), such acts taken by the Indemnifying Party were in compliance with the sections of this Agreement, unless non-compliance was specified by, or reasonably foreseeable in the fulfillment of, the request or direction of the Indemnified Party. Nothing in this Section 9.5 shall affect either Party’s obligations under Section 9.9 hereunder. Under no circumstances shall any Indemnifying Party be obligated under this Article IX to indemnify an Indemnified Party for Losses consisting of punitive, exemplary, special, indirect, incidental, or consequential damages, except to the extent such damages may be payable in connection with a Third Party Claim.
9.6 Payments.
Amounts payable by the Indemnifying Party to the Indemnified Party in respect of any Losses for which such Party is entitled to indemnification hereunder (“Indemnity Payments”) and to which the limitations set forth in Section 9.4 do not apply shall be paid in immediately available funds within ten (10) Business Days after the later of (i) the receipt of a written request from the Indemnified Party entitled to such Indemnity Payment and (ii) the date of payment of the amount that is the subject of the Indemnity Payment by the Party entitled to receive the Indemnity Payment, except to the extent then being contested in good faith by the Indemnifying Party. All such Indemnity Payments shall be made to the designated account of, and in the manner specified in writing by, the Party entitled to such Indemnity Payments.
9.7 Insurance; Tax Benefits.
(a) Notwithstanding anything contained in this Agreement to the contrary, Losses shall be net of any insurance or other prior or subsequent recoveries actually received by the Indemnified Party or its Affiliates in connection with the facts giving rise to the claim for indemnification. If an Indemnified Party shall have used commercially reasonable efforts to recover any amounts recoverable under insurance policies and shall not have recovered the applicable Losses, the Indemnifying Party shall be liable for the amount by which such Losses exceeds the amounts actually recovered.
(b) Any Indemnity Payments made pursuant to this ARTICLE IX by any Indemnifying Party to an Indemnified Party shall be increased to account for any Tax cost incurred by the Indemnified Party upon the receipt of such payment (grossed up for such payment) and shall be made net of any Tax benefit realized or utilized by the Indemnified Party or any of its Affiliates resulting from the payments of the amounts indemnified against giving rise to such Indemnity Payments. For purposes of determining the amount of any Tax benefit or Tax cost incurred, the Indemnified Party shall be deemed to pay Tax at the highest United States federal income tax corporate marginal rate or Chilean income tax corporate marginal rate, as applicable, in effect in the year such indemnifiable Loss is incurred and the recipient of the Tax benefit shall be deemed to realize or utilize any Tax benefit in the first taxable year that such Tax benefit may be realized or utilized under any applicable Law after taking into account all other Tax attributes of such Indemnified Party and the projected utilization of such Tax attributes as computed by the recipient of such Tax benefit. If a Tax benefit resulting from the incurrence or payment of Losses is available to any Indemnified Party or its Affiliates in multiple Tax years, the amount of such Tax benefit for purposes of this Section 9.7(b) shall be the net present value of all of such available Tax benefits, calculated by using a discount rate equal to the long term applicable federal rate for the month in which such Losses are incurred. The amount of any increase or reduction hereunder shall be adjusted to reflect any final determination (which shall include the execution of Form 870 AD or successor form) with respect to the Indemnified Party’s liability for Taxes, and any payments, if necessary, by the Indemnified Party or the Indemnifying Party to reflect such adjustment shall be made if necessary within ten (10) days of such determination.
9.8 Remedies Exclusive.
The right to indemnification provided in this ARTICLE IX shall be the exclusive remedy (including equitable remedies that involve monetary payment, such as restitution or disgorgement, other than specific performance to enforce any payment or performance due hereunder) of the Parties from and after the Effective Date in connection with any Third Party Claims.
9.9 Mitigation.
Notwithstanding anything contained in this Agreement to the contrary, each Indemnified Party shall use commercially reasonable efforts to mitigate any claim or liability that an Indemnified Party asserts or may assert under this Agreement. In the event that an Indemnified Party shall fail to make such commercially reasonable efforts to mitigate any such claim or liability, then notwithstanding anything contained in this Agreement to the contrary, neither Citi nor Banco de Chile, as the case may be, shall be required to indemnify any Indemnified Party for that portion of any Losses that would reasonably be expected to have been avoided if the Indemnified Party had made such efforts.
ARTICLE X. TERM AND TERMINATION
10.1 Term of Agreement.
Although this Agreement is not one of the Contratos Operativos covered by the Cooperation Agreement, the Parties acknowledge that this Agreement complements and carries out the objectives of the Cooperation Agreement. Accordingly, the Parties agree that this Agreement shall become effective as of the Effective Date and shall remain in force and, except as specifically provided in the applicable Schedule to this Agreement, each Service shall continue, for the period specified in Cláusula Sexta of the Cooperation Agreement, unless earlier terminated by the Parties as provided in this ARTICLE X.
10.2 Termination.
(a) Elective Partial Termination.
(i) Either Party, as a Service recipient, may on sixty (60) days’ written notice to the other Party, terminate any Citi Service, Banco de Chile Service or Additional Service, as applicable. Any such terminated Service shall be deleted from Schedules 2.1(a)(1), 2.1(a)(2), 2.1(a)(3) or 2.2(a)(1), as applicable, and the terminating Party shall have no obligation to continue to use or pay for any such Citi Service or Banco de Chile Service, as applicable; provided, however, that this Agreement shall remain in effect until neither Party requires any Service from the other Party, or until otherwise terminated pursuant to this ARTICLE X.
(ii) Either Party may immediately terminate any Citi Service, Banco de Chile Service or Additional Service, as applicable, if such Party reasonably determines that it is required to terminate such Service or rights and licenses to such Service by applicable Law, regardless of whether such Party is the provider or recipient of such Services.
(iii) Any termination notice delivered by either Party pursuant to this Section 10.2(a) shall specify in detail the Service or Services to be terminated, and the effective date of such termination.
10.3 Effect of Termination. In the event that this Agreement is terminated for any reason:
(a) Each Party agrees and acknowledges that the obligations of each Party to provide the Services, or to cause the Services to be provided, hereunder shall immediately cease, and any licenses to Citi facilities and Banco de Chile facilities granted hereunder shall immediately terminate. Upon cessation of the applicable Party’s obligation to provide any Service, the Party receiving the Service shall stop using, directly or indirectly, such Service. In addition, during the six (6) months following such termination, each Party shall use commercially reasonable efforts (i) to provide the other Party with a copy of such other Party’s data created pursuant to any Service and (ii) to destroy (and certify to the destruction of) all data owned by such other Party or its Affiliates and third parties which was created in connection with such Services and which are in their possession as of the termination date.
(b) Upon request, each Party shall, and shall cause its Affiliates and third parties (subject to the terms of such Party’s agreements with such third parties) retained by such Party or Affiliates to, return to the other Party or destroy (and certify to the destruction of) all tangible personal property and books, records or files owned by such other Party or its Affiliates and third parties and used in connection with the provision of Services that are in their possession as of the termination date.
(c) In the event that the Party receiving a Service seeks to discontinue such Service without providing the sixty (60) day notice provided for herein, the Party receiving such Service shall be responsible to the Party providing such Service for reasonable and proper termination charges, including all reasonable cancellation costs, that are actually incurred by the Party providing such Service; provided, that (i) the Party providing such Service shall use commercially reasonable efforts to minimize all such costs; and (ii) such costs shall be no greater than the amount the Party receiving such Service would have paid for sixty (60) days of such Service had the Party receiving such Service actually received such Service.
(d) The following matters shall survive the termination of this Agreement (i) the rights and obligations of each Party under Section 5.5(a), Section 5.5(b), ARTICLE VI, ARTICLE VII, ARTICLE VIII, ARTICLE IX, this Section 10.3 and ARTICLE XI and (ii) the obligations under ARTICLE IV of each Party to pay the applicable Fees for Services furnished prior to the effective date of termination.
ARTICLE XI. MISCELLANEOUS
11.1 Construction.
(a) For the purposes of this Agreement (i) words (including capitalized terms defined herein) in the singular shall be held to include the plural and vice versa and words (including capitalized terms defined herein) of one gender shall be held to include the other gender as the context requires, (ii) all references to the “Agreement” shall include all Exhibits, Schedules and Attachments to this Agreement unless otherwise specified, (iii) the terms “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Exhibits) and not to any particular provision of this Agreement, and Article, Section, paragraph and Exhibit references are to the Articles, Sections, paragraphs and Exhibits to this Agreement, unless otherwise specified, (iv) the word “including” and words of similar import when used in this Agreement mean “including without limitation,” (v) “commercially reasonable efforts” shall not require a waiver by any Party of any material rights or any action or omission that would be a breach of this Agreement, (vi) all references to any period of days shall be deemed to be to the relevant number of calendar days unless otherwise specified, (vii) all references herein to “$” or dollars shall refer to United States dollars, unless otherwise specified and (viii) all terms defined in this Agreement shall have the meanings ascribed herein when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.
(b) The Parties acknowledge and agree that, to the extent there is a conflict between the terms and provisions of this Agreement and the terms and provisions of any Exhibit (including any Attachment thereto) or Schedule hereto, the terms and provisions of this Agreement shall control. Unless expressly provided otherwise herein, this Agreement is not intended to affect the Parties’ rights and obligations under the Operating Agreements. Subject to the preceding sentence, to the extent there is a conflict between the terms and provisions of this Agreement and the terms and provisions of any of the Operating Agreements, the terms and provisions of this Agreement shall be interpreted in a manner to maximize their consistency with those of the Operating Agreements.
(c) The Parties acknowledge that each Party and its respective counsel have reviewed and revised this Agreement, and that no rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall be employed in the interpretation of this Agreement or any amendments hereto.
11.2 Headings.
The Article and Section headings contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Agreement.
11.3 Notices.
All notices, demands, and other communications required or permitted to be given to any Party under this Agreement shall be in writing and any such notice, demand or other communication shall be deemed to have been duly given when delivered by hand, by courier or overnight delivery service, by certified or registered mail, or, in the case of facsimile notice, when sent and transmission is confirmed, and, regardless of method, addressed to the Party at its address or facsimile number set forth below (or at such other address or facsimile number as the Party shall furnish the other parties in accordance with this Section 11.3), with a copy sent in a like manner to the applicable Service Coordinator:
If to Citigroup:
Citigroup Inc.
201 South Biscayne Blvd., 29th Floor
Miami, Florida 33131
Attn: Julio Figueroa
Title: Latin America Cluster & Banking Head
Email: julio.figueroa@citi.com
If to Banco de Chile:
Banco de Chile
Ahumada 251, Piso 2, Gerencia General, Santiago, Chile.
Attn: Eduardo Ebensperger
Title: Chief Executive Officer
Facsimile: (562) 653 23 03
Email: eebenspe@bancochile.cl
11.4 Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflict of laws principles of such State.
11.5 Arbitration of Disputes; Attorney’s Fees.
(a) Any Disputes (as defined in Section 11.14) that cannot be resolved under Section 11.14 shall be resolved by arbitration in accordance with Subsection (l) of Cláusula Quinta of the Connectivity Agreement.
(b) The arbitrators shall have the power to require the losing party in a Dispute to pay the attorney’s fees of the prevailing Party if they deem it appropriate to do so.
11.6 Entire Agreement.
This Agreement, together with all Schedules hereto, the Operating Agreements, any Citi Hosted Application-Specific Agreements and any Banco de Chile Hosted Application-Specific Agreements constitute the entire agreement of the Parties with respect to the subject matter hereof and supersede all prior agreements with respect thereto. The Parties intend that this Agreement (including its Schedules) shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever, other than the Operating Agreements, may be introduced in any judicial proceeding involving this Agreement.
11.7 Amendment, Modification and Waiver.
No amendment to this Agreement shall be effective unless it shall be in writing and signed by each Party hereto. Any failure of a Party to comply with any obligation, covenant, agreement or condition contained in this Agreement may be waived by the Party entitled to the benefits thereof only by a written instrument duly executed and delivered by the Party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure of compliance.
11.8 Severability.
If any provision of this Agreement, or the application of any such provision, is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, or invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by the Law, the Parties waive any provision under the applicable Law that renders any provision of this Agreement invalid, illegal or unenforceable in any respect. The Parties shall, to the extent lawful and practicable, use commercially reasonable efforts to enter into arrangements to reinstate the intended benefits, net of the intended burdens, of any such provision held invalid, illegal or unenforceable.
11.9 Successors and Assigns; No Third Party Beneficiaries.
This Agreement and all its provisions shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns. Nothing in this Agreement, whether expressed or implied, will confer on any Person, other than the Parties or their respective permitted successors and assigns, any rights, remedies or liabilities; provided that the provisions of ARTICLE IX will inure to the benefit of the Indemnified Parties.
11.10 Assignment.
Without the prior written consent of the other Party (which consent may not be unreasonably withheld), no Party may assign its rights or obligations under this Agreement, including in the case of a merger or other change of control, except as provided in Cláusula Cuarta of the Cooperation Agreement. Any purported assignment or transfer in violation of this Section 11.10 shall be void and shall constitute a material breach of this Agreement.
11.11 Expenses.
Whether or not the transactions contemplated hereby are consummated, all expenses incurred in connection with the drafting and negotiation of this Agreement shall be paid by the Party incurring such expenses.
11.12 Counterparts.
This Agreement may be executed by the Parties in multiple counterparts which may be delivered by facsimile transmission. Each counterpart when so executed and delivered shall be deemed an original, and all such counterparts taken together shall constitute one and the same instrument.
11.13 Relationship of the Parties.
Each Party and its Affiliates shall be acting as an independent contractor in performing under this Agreement, and shall not be considered or deemed to be an agent, employee, joint venturer or partner of the other Party or any of its Affiliates. Each Party and its Affiliates shall, at all times, maintain complete control over its Personnel and operations, and shall have sole responsibility for staffing, instructing and compensating its Personnel. Neither Party (nor its Affiliates) shall have, or shall represent that it has, any power, right or authority to bind the other Party (or its Affiliates) to any obligation or liability, to assume or create any obligation or liability or transact any business in the name or on behalf of the other Party (or its Affiliates), or make any promises or representations on behalf of the other Party (or its Affiliates), unless agreed to in writing.
11.14 Dispute Resolution.
In the event of any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or validity thereof, including the dispute of any fees invoiced under ARTICLE IV or any claim by any Party that any other Party has breached the material terms hereof (each, a “Dispute”), the Service Coordinators of Citi and Banco de Chile shall meet (by telephone or in person) no later than two (2) Business Days after receipt of notice by any Party of a request for resolution of a Dispute. The Service Coordinators shall enter into negotiations aimed at resolving any such Dispute. If the Service Coordinators are unable to reach mutually satisfactory resolution of the Dispute within ten (10) Business Days after receipt of notice of the Dispute, the Dispute shall be referred to the Comité de Dirección (Steering Committee), as defined in the Cooperation Agreement. If the Comité de Dirección is unable to reach mutually satisfactory resolution of the Dispute within thirty (30) days after referral of the Dispute by the Service Coordinators (or such other longer period agreed by the members of the Comité de Dirección, paragraph (c) of Cláusula Tercera of the Cooperation Agreement shall apply. For purposes of this Section 11.14, this Agreement shall be deemed to be an Operating Agreement as such term is used in Cláusula Primera of the Cooperation Agreement.
11.15 Schedules.
The following Schedules to this Agreement are incorporated by reference herein and shall be considered to be part of this Agreement.
| Schedule | Description | |
| Schedule 2.1(a)(1) | - | Custody Processing Services |
| Schedule 2.1(a)(2) | - | Citi Regional Technology Services |
| Schedule 2.1(a)(3) | - | License of Citi Software Applications |
| Schedule 2.2(a)(1) | - | License of Banco de Chile Software Applications |
| Schedule 2.3.1 | - | Services provided by Citi (Latam TTS Onboarding Hub) to Banco de Chile and by Banco de Chile to Citi (Latam TTS Onboarding Hub) |
| Schedule 2.3.2 | - | Treasury and Trade Solutions Services provided by Citi to Banco de Chile and by Banco de Chile to Citi |
| Schedule 2.3.3 | - | Customer Service |
| Schedule 2.5 | - | Additional Services (if applicable) |
| Schedule 5.4 | - | Systems Access Procedure |
[Remainder of Page Intentionally Left Blank. Signature Pages Follow.]
IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be duly executed and delivered on its behalf as of the first date above written, and the Parties agree that this Agreement shall be effective as of January 1, 2026.
| CITIGROUP INC. | ||
| Por: | /s/ Julio Figueroa | |
| Julio Figueroa | ||
| Latin America Cluster & Banking Head | ||
| BANCO DE CHILE | ||
| Por: | /s/ Eduardo Ebensperger Orrego | |
| Eduardo Ebensperger Orrego | ||
| Gerente General | ||
[2025 Amended and Restated Master Services Agreement – signature page]
Exhibit 4.24
FOURTH AMENDMENT TO MASTER JOINT VENTURE AGREEMENT
The following parties appear:
| (a) | Quiñenco S.A. (“Quiñenco”), a company duly incorporated and validly existing under the laws of the Republic of Chile, represented for these purposes by its Chief Executive Officer, Mr. Francisco Pérez Mackenna, and by its Legal Manager, Mr. Rodrigo Hinzpeter Kirberg; |
| (b) | Citigroup Inc., a company duly incorporated and validly existing under the laws of the State of Delaware, United States of America, represented for these purposes by Mr. Julio Figueroa; |
| (c) | Citibank Overseas Investment Corporation (“COIC”, together with Citigroup Inc., jointly “Citigroup”, and Citigroup together with Quiñenco, the “Parties”), a company duly incorporated and validly existing under the Federal Reserve Act of the United States of America, represented for these purposes by Mr. Michael Brisgone; |
By this instrument, the Parties agree to the following amendment (the “Fourth Amendment”) to the Master Joint Venture Agreement entered into on July 19, 2007, as amended by private instruments dated December 19, 2008, March 4, 2010, and January 9, 2014 (the latter, the “Third Amendment” and collectively, the “Framework Agreement”), it being understood that capitalized terms used in this Fourth Amendment, unless otherwise indicated, shall have the meanings ascribed to them in the Framework Agreement.
Section One
It is hereby acknowledged that, by Resolutions No. 1378 and No. 1379 of the Superintendency of Banks and Financial Institutions, dated May 13, 2019, the dissolution of Sociedad Matriz del Banco de Chile S.A. (“SM Chile”) and its subsidiary Sociedad Administradora de la Obligación Subordinada S.A. (“SAOS”) was confirmed, pursuant to the sixth paragraph of Article 26 of Law No. 19,396. Accordingly, it is acknowledged that LQIF’s participation in Banco de Chile is direct, and all references in the Master Joint Venture Agreement to SM Chile and SAOS are deleted, including the following amendments:
| Section Amended | Amendment | |
| Background, No. II | Replaced in its entirety with: “Quiñenco, through LQIF, controls Banco de Chile and, through the Financial Subsidiaries of Quiñenco, engages in the provision of Financial Businesses and Services.” | |
| Clause One, subsection (a) | Deletion of: (a) the defined term “SAOS” and its definition; (b) the defined term “SM Chile” and its definition; (c) references to SM Chile from the definition of “Tender Offer (OPA)”; and (d) references to SM Chile and SAOS from the definition of “Quiñenco Financial Subsidiaries”. | |
| Clause Three, subsection (a) | Deletion of references to SM Chile, it being recorded that the Parties’ participation in Banco de Chile is directly through LQIF (and its subsidiary, Inversiones LQ SM). | |
| Clause Three, subsection (i) | Deletion of references to SM Chile, and thus it no longer being considered as a “Chilean Company of the Association”. | |
| Clause Three, subsection (j) | Deletion of references to SM Chile. | |
| Clause Three, subsection (k) | Deletion of references to SM Chile, recording that the right in favor of Citigroup applies exclusively to Banco de Chile. | |
| Clause Eight, subsection (b) | Deletion in full of paragraph (ii) “Board of Directors of SM Chile”, which is replaced with the words “Intentionally left blank”. | |
| Clause Eight, subsection (e) | In paragraph (i), deletion of the final phrase “and it shall not apply if a higher dividend distribution were required in order to comply with the obligations of SM Chile and SAOS to the Central Bank of Chile pursuant to the agreement entered into under Law No. 19,396, as amended, in connection with the subordinated obligation.” Following “pursuant to Chilean regulations”. |
Clause Two
Numeral (iii) of subsection (b) of Clause Eight 1 is replaced in its entirety with the following text:
“(iii) Board of Directors of Banco de Chile: With nine (9) members. The majority of the principal directors shall be appointed by Quiñenco through LQIF and Citigroup shall have the right to require LQIF to appoint two (2) principal directors of Banco de Chile and, if Citigroup reaches fifty percent (50%) of the shares of LQIF, four (4) principal directors, in all cases excluding those appointed by minority shareholders, if any. In all cases, it is understood that if minority shareholders appoint one or more principal directors, the number of directors that Citigroup is entitled to propose shall be correspondingly reduced; provided, however, that Citigroup shall in all events be entitled to either (y) one (1) principal director, corresponding to the sixth principal director that LQIF may elect, or (z) if it is not possible to elect a sixth principal director proposed by Citigroup in accordance with this clause, two (2) alternate directors. In order to maximize the number of directors proposed by Citigroup who may be elected within the parameters of the preceding sentence, Quiñenco undertakes to cause LQIF to take steps to obtain proxies from third parties and to allocate such proxies, together with discretionary votes received, to the election of such Citigroup-proposed directors. Until a principal director proposed by Citigroup has been elected, the Parties agree that LQIF shall use its best efforts to ensure that it may once again appoint at least six (6) principal directors (it being understood that LQIF shall not be required to increase the number of shares it controls, directly or indirectly). Once at least one individual proposed by Citigroup has been elected as a principal director, Quiñenco shall promote the appointment of the Chairman of the Board from among the directors proposed by it, and the Vice-Chairman shall be a director appointed by Citigroup.”
| 1 | Amended pursuant to the Third Amendment. |
Clause Three
Numeral (vii) of subsection (b) of Clause Eight2 is amended by replacing the last sentence of the first paragraph with the following:
“Notwithstanding the foregoing, while LQIF is unable to appoint at least six (6) principal directors of Banco de Chile, LQIF shall submit to the Shareholders’ Meeting of Banco de Chile, as candidates for alternate directors, individuals proposed by Citigroup.”
Clause Four
The amendment to Clause One shall take effect as of this date. The amendments to Clauses Two and Three shall take effect on the same date on which the amendment to the bylaws of Banco de Chile becomes effective, pursuant to which the number of directors is reduced to nine (9) principal directors and two (2) alternate directors.
Except as expressly amended by this Fourth Amendment, the Framework Agreement remains unmodified and in full force and effect. This Fourth Amendment supersedes and renders without effect any notice, communication, or correspondence among the Parties relating to its subject matter issued prior to this Fourth Amendment.
(The remainder of this page has been intentionally left blank.)
| 2 | Amended pursuant to the Third Amendment. |
IN WITNESS THEREOF, the Parties execute this Fourth Amendment as of November 5, 2025.
| QUIÑENCO S.A. | ||
| By: | /s/ Francisco Pérez M. | |
| Francisco Pérez M. | ||
| By: | /s/ Rodrigo Hinzpeter K. | |
| Rodrigo Hinzpeter K. | ||
| CITIGROUP INC. | ||
| By: | /s/ Julio Figueroa | |
| Julio Figueroa | ||
| CITIBANK OVERSEAS INVESTMENT CORPORATION | ||
| By: | /s/ Michael Brisgone | |
| Michael Brisgone | ||
Exhibit 4.25
AMENDMENT TO SHAREHOLDERS’ AGREEMENT
This amendment to the Shareholders’ Agreement of LQ Inversiones Financieras S.A., originally entered into on December 27, 2007 and subsequently amended by private instruments dated April 29, 2010 and January 9, 2014 (the “Shareholders’ Agreement”), is agreed as of November 5, 2025, by and between:
| (a) | On the one hand: |
| (i) | Quiñenco S.A. (“Quiñenco”), a company duly incorporated and validly existing under the laws of the Republic of Chile, represented herein by its Chief Executive Officer, Mr. Francisco Pérez Mackenna, and by its Legal Manager, Mr. Rodrigo Hinzpeter Kirberg; and |
| (ii) | Empresa El Peñón S.A. (“Peñón”), a company duly incorporated and validly existing under the laws of the Republic of Chile, represented herein by its Directors, duly authorized, Mr. Davor Domitrovic Grubisic and Mr. Eduardo Garnham Léniz. |
Hereinafter, and unless expressly agreed otherwise, for all purposes of these amendments, any reference to Quiñenco or otherwise to a party to this Shareholders’ Agreement shall be understood to include both Quiñenco and Peñón, who for all legal and contractual purposes shall be deemed to be a single party, actin, exercising their rights and fulfilling their obligations under this Shareholders’ Agreement as one indivisible block, and which has granted an irrevocable power of attorney to Quiñenco to represent it with full powers in matters regarding the Shareholders’ Agreement, including the judicial powers set forth in Article 7 of the Code of Civil Procedure; and
| (b) | On the other hand, Citigroup Chile SpA – formerly Citigroup Chile S.A. – (“Citigroup Chile”), a company duly incorporated under the laws of the Republic of Chile, represented by its attorney-in-fact, Mr. José Miguel Salvador (together with Quiñenco and Peñón, the “Parties”). |
This amendment records the agreement of the Parties to amend certain provisions of the Shareholders’ Agreement as follows.
The defined terms used in these amendments shall have the meanings ascribed to them in paragraph (a) of Clause One of the Shareholders’ Agreement.
The First and Fourth amendments shall take effect as of this date. The Second and Third amendments shall take effect on the same date on which the amendment to the bylaws of Banco de Chile becomes effective, pursuant to which the number of directors is reduced to nine regular directors and two alternate directors.
Except as expressly amended by this document, the Shareholders’ Agreement shall remain unmodified and in full force and effect.
AMENDMENTS
First Amendment: It is recorded that: (i) by public deed dated February 9, 2022, granted before the Fifth Notary Public of Santiago, Citigroup Chile S.A. was transformed into a by-stock corporation (sociedad por acciones) named Citigroup Chile SpA; and (ii) that Inversiones Citigroup Chile Limitada was dissolved by public deed dated February 28, 2022, granted in the Fifth Notary Public of Santiago, by the concentration of all company shares in the possession of Citigroup Chile SpA. Accordingly, all references in the Shareholders’ Agreement to Citigroup Chile, Citigroup Chile S.A., or Inversiones Citigroup Chile Limitada shall be understood to refer exclusively to Citigroup Chile SpA.
Second Amendment: Clause Four, numeral (iii) subsection (c) is replaced in its entirety by the following:
(iii) Board of Directors of Banco de Chile: With nine (9) members. The majority of the principal directors shall be designated by Quiñenco through LQIF, and Citigroup Chile shall have the right to instruct LQIF to designate two (2) principal directors of Banco de Chile and, if Citigroup Chile reaches fifty percent (50%) of the shares of LQIF, four (4) principal directors, in all cases excluding those designated by minority shareholders, if any. In all cases, it is understood that if minority shareholders designate one or more principal directors, the number of directors that Citigroup Chile is entitled to propose shall be correspondingly reduced; however, Citigroup Chile shall in all events be entitled to either (y) one (1) principal director, which shall correspond to the sixth principal director that LQIF may elect, or (z) if it is not possible to elect a sixth principal director proposed by Citigroup Chile in accordance with this clause, two (2) alternate directors. In order to maximize the number of directors proposed by Citigroup Chile who may be elected as directors within the parameters set forth in the preceding sentence, Quiñenco undertakes to cause LQIF to take steps to obtain proxies from third parties in order to allocate such proxies, together with any discretionary votes it receives, to the election of the directors proposed by Citigroup Chile. Until a principal director proposed by Citigroup Chile has been elected, the Parties agree that LQIF shall use its best efforts to ensure that it may again designate at least six (6) principal directors (it being understood that LQIF shall have no obligation to increase the number of shares it controls, directly or indirectly). Once at least one individual proposed by Citigroup Chile has been elected as a principal director, Quiñenco shall promote the appointment of the Chairman of the Board from among the directors proposed by it, and the Vice-Chairman shall be a director designated by Citigroup Chile.
Third Amendment: Clause Four, subsection (c), numeral (v) is amended by replacing the last sentence of the first paragraph with the following:
“Notwithstanding the foregoing, while LQIF is unable to designate at least six (6) principal directors of Banco de Chile, LQIF shall submit to the Shareholders’ Meeting of Banco de Chile, as candidates for alternate directors, individuals proposed by Citigroup Chile”
Fourth Amendment: It is recorded that by Resolutions No. 1378 and 1379 of the Superintendency of Banks and Financial Institutions, dated 13 May 2019, the dissolution of Sociedad Matriz del Banco de Chile S.A. (“SM Chile”) and its subsidiary Sociedad Administradora de la Obligación Subordinada S.A. (“SAOS”) was confirmed, in accordance with the sixth paragraph of article 26 of Law No. 19.396. Accordingly, it is recorded that LQIF’s participation in Banco de Chile is now direct, and all references in the Shareholders’ Agreement to SM Chile and SAOS are eliminated, including the following amendments:
| Section Amended | Amendment | |
| Background Section, No. VI, subsections (c), (e), (g), and (h) | All references to SM Chile and SAOS are deleted, with the necessary adjustments to reflect the direct participation of LQIF (and its subsidiary Inversiones LQ SM) in Banco de Chile. | |
| Clause One, subsection (a) | The following are deleted: (a) the defined term “SAOS” and its definition; (b) the defined term “SM Chile” and its definition; (c) references to SM Chile from the definitions of “Custody and Voting Trust” and “Tender Offer (OPA)”; (d) references to SM Chile and SAOS from the definitions of “Chilean Association Companies” and “Quiñenco Financial Subsidiaries”. | |
| Clause Three, subsection (g) | All references to SM Chile are deleted. | |
| Clause Three, subsection (h) | All references to SM Chile are deleted. | |
| Clause Three, subsection (i) | All references to SM Chile are deleted, and it is stipulated that the right granted in favor of Citigroup applies solely to Banco de Chile. | |
| Clause Four, subsection (c) | Paragraph (ii) “Board of Directors of SM Chile” is deleted in its entirety and replaced with the words “Intentionally left blank.” | |
| Clause Four, subsection (f) | All references to SM Chile, SAOS, obligations owed to the Central Bank of Chile by the contract executed under Law No. 19,396, are deleted. | |
| Clause Four, subsection (l) | All references to SM Chile, SAOS and the amendment of the Subordinated Obligation Agreement between Banco de Chile and the Central Bank of Chile, and the Deficit Account are deleted. | |
| Clause Five, subsection (h) | All references to SM Chile are deleted. |
(The remainder of this page has been intentionally left blank.)
The parties signed this amendment on 5 November 2025.
| QUIÑENCO S.A. | ||
| By: | /s/ Francisco Pérez M. | |
| Francisco Pérez M. | ||
| By: | /s/ Rodrigo Hinzpeter K. | |
| Rodrigo Hinzpeter K. | ||
| EMPRESA EL PEÑÓN S.A. | ||
| By: | /s/ Eduardo Garnham L. | |
| Eduardo Garnham L. | ||
| By: | /s/ Davor Domitrovic G. | |
| Davor Domitrovic G. | ||
| CITIGROUP CHILE SpA | ||
| By: | /s/ José Miguel Salvador | |
| José Miguel Salvador | ||
Exhibit 8.1
LIST OF SUBSIDIARIES
Banco de Chile
| 1. | Banchile Administradora General de Fondos S.A. |
| 2. | Banchile Corredores de Seguros Limitada. |
| 3. | Banchile Corredores de Bolsa S.A. |
| 4. | Banchile Asesoría Financiera S.A. | |
| 5. | Operadora de Tarjetas Banchile Pagos S.A. |
The jurisdiction of incorporation of the subsidiaries listed above is the Republic of Chile.
Exhibit 12.1
CERTIFICATION
I, Eduardo Ebensperger O., certify that:
| 1. | I have reviewed this annual report on Form 20-F of Banco de Chile; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
| 4. | The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
| 5. | The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
Date: April 30, 2026
| By: | /s/ Eduardo Ebensperger O. | |
| Name: | Eduardo Ebensperger O. | |
| Title: | Chief Executive Officer |
Exhibit 12.2
CERTIFICATION
I, Rolando Arias S., certify that:
| 1. | I have reviewed this annual report on Form 20-F of Banco de Chile; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
| 4. | The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
| 5. | The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
Date: April 30, 2026
| By: | /s/ Rolando Arias S. | |
| Name: | Rolando Arias S. | |
| Title: | Chief Financial Officer |
Exhibit 13.1
Certification
Pursuant to Section 906 of the Sarbanes Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Banco de Chile (the “Company”), does hereby certify, to such officer’s knowledge, that:
The Annual Report on Form 20-F for the year ended December 31, 2025 (the “Form 20-F”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: April 30, 2026
| By: | /s/ Eduardo Ebensperger O. | |
| Name: | Eduardo Ebensperger O. | |
| Title: | Chief Executive Officer |
Date: April 30, 2026
| By: | /s/ Rolando Arias S. | |
| Name: | Rolando Arias S. | |
| Title: | Chief Financial Officer |
A signed original of this written statement required by Section 906 has been provided to Banco de Chile and will be retained by Banco de Chile and furnished to the Securities and Exchange Commission or its staff upon request.