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Industry Profile

The Chilean financial industry is highly competitive and consists of various market sectors. The most important sector is commercial banking with total loans (excluding operations of subsidiaries abroad) representing over 80% of the Chilean GDP. Currently, industry consists of over 20 privately owned banks and one government owned bank, named Banco Estado.

We face significant and increasing competition in all market segments in which we operate. We deal with a variety of competitors, ranging from large privately-owned commercial banks to more specialized entities, such as “niche” banks. We also increasingly face competition from non-banking companies like large department stores, private compensation funds, and saving and credit cooperatives. In addition, we face competition from other types of competitors, such as leasing, factoring and automobile financing companies, as well as mutual funds, pension funds and insurance companies. However, 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.

Within the local banking industry, our primary competitors are the main privately-owned commercial banks in Chile, namely, Banco Santander—Chile, Banco de Crédito e Inversiones (Bci), Itau-Corp, and Banco Bilbao Vizcaya Argentaria Chile (BBVA). Nevertheless, we also face competition from Banco del Estado.

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 finance loans. 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.

See 20F