Banco de Chile Viewpoint
Comments on the 4Q11
Arturo Tagle, CEO:
‘2011 was a spectacular year for us that included challenges, but also significant achievements. In fact, we reached a record net income of Ch$429 billion that enabled us to post a ROAE of 23.7% - the highest within the Chilean industry - in spite of a successful US$445 million capital increase that had an excellent reception from local and foreign investors. This capitalization supported an outstanding 21.0% YoY growth in total loans, equivalent to ~Ch$3,000 billion that allowed us to achieve the market leadership in total loans with a 19.8% market share by gaining 59 bp. market share in 2011. Besides, the equity offering allowed us to increase our free-float from 12% to 15%, which triggered our entry to the MSCI Index. All of these attainments are the consequence of our solid and continuously improving business strategy that includes attractive value offerings, a prudent risk approach, a competitive funding structure and a significant business scale. Thus, we are very proud of our performance in 2011, while we believe we count on a solid basis for taking advantage of future business opportunities’.
Alejandro Herrera, Commercial Division Manager: ‘The year was full of achievements. The business scale growth was spurred by initiatives to expand our retail business and ensure the service quality. Thus, worth noting is the market share increase in residential mortgage loans, from 14.9% to 16.4%, as a result of several strategies intended to gain presence in this product. Similarly, we improved our approach to SMEs by granting the highest number of government-backed loans for SMEs in Chile, with ~14,000 credits. Also, we aimed to raise the presence in credit cards for individuals. So, in 2011 we added 99,000 new credit card customers, improved our reward programs, and developed the “Banco de Chile | Entel” credit card alliance. Similarly, we incorporated roughly 90,000 new checking account customers. In addition, we added 25 new locations to our distribution network that became one of the largest in the local industry with 441 branches in 2011, while we improved our non-physical channels by creating a new “Mobile Banking System” that accounts for 58,000 active customers and by enhancing our websites’.
Sergio Karlezi, Treasurer: ‘We are ending an important year in terms of funding diversification. In 2011 we took advantage of the market conditions in Chile and abroad, obtaining very attractive terms for our debt placements. Thus, we placed more than US$1,400 million in senior bonds within the local market at very attractive spreads over comparable Central Bank instruments. Also, we entered into a syndicated loan from 15 Asian financial institutions of ~US$200 million, while at the end of the year we carried out a shelf registration in Mexico for issuing senior bonds up to US$720 million. By December 2011 we had placed ~US$110 million of this shelf debt. These actions enabled us to keep a well-diversified funding structure and a low financing cost, some of our main competitive advantages’.