1Q18 Financial Results May 3rd, PDF Free Download

1Q18 Financial Results May 3rd, 2018

AGENDA I. Chilean Economy II. Banking Industry Overview III. Banco de Chile 1Q18 Results and Strategy 2

CHILEAN ECONOMY Monthly GDP (YoY, MA3 %) 5% 4% 3% 2% 1% 0% -1% Business and Consumer Confidence (YoY, %) 60 55 50 45 40 35 30 25 20 Mar-14 Mar-14 Jun-14 Jun-14 Sep-14 Sep-14 Dec-14 Dec-14 Mar-15 Mar-15 Jun-15 Jun-15 Sep-15 Source: Bloomberg, Central Bank of Chile Dec-15 Business Sep-15 Dec-15 Mar-16 Mar-16 Jun-16 Jun-16 Sep-16 Dec-16 Mar-17 Consumer Sep-16 Dec-16 Mar-17 Jun-17 Jun-17 Sep-17 Dec-17 Sep-17 Mar-18 Dec-17 Mar-18 Business Confidence vs Monthly GDP Growth (YoY, MA3 %) 60 55 50 45 40 35 30 Mar-14 Headline and Core CPI (YoY, %) 6% 5% 4% 3% 2% 1% 0% Jun-14 Mar-14 Jun-14 Sep-14 Sep-14 Dec-14 Dec-14 Mar-15 Mar-15 Jun-15 Business confidence Jun-15 Sep-15 Sep-15 Dec-15 CPI Dec-15 Mar-16 Mar-16 Jun-16 CPI core Jun-16 Sep-16 Sep-16 Dec-16 Dec-16 Imacec Mar-17 Mar-17 Jun-17 Jun-17 Sep-17 Sep-17 Dec-17 Dec-17 Mar-18 Mar-18 5% 4% 3% 2% 1% 0% -1% -2% 3

CHILEAN ECONOMY GDP (YoY, %) 2.3 3.7 Gross Investment (YoY, %) 4.0 1.3 1.5 2015 2016 2017 2018f -0.3-0.7-1.1 2015 2016 2017 2018f CPI (YoY, %, end of period) Monetary Policy Rate (%, end of period) 4.4 3.50 3.50 2.7 2.3 2.5 2.50 2.50 2015 2016 2017 2018f Source: Bloomberg, Central Bank of Chile 2015 2016 2017 2018f 4

AGENDA I. Chilean Economy II. Banking Industry Overview III. Banco de Chile 1Q18 Results and Strategy 5

Banking Industry Loan Evolution by Product 1 (Real Growth) Net Income (In billions of CLP) 10.4% 10.5% Net Income 1Q17 617 9.0% 7.6% 8.7% 8.2% 7.7% Total operating income 152 6.8% 4.7% 3.2% 2.7% 6.4% 4.9% 4.8% 6.6% 2.4% 5.6% 2.9% 5.3% 3.6% 5.2% Provisions for loan losses Total operating expenses Income attributable to investments in other companies 2-61 -79 1.2% Income taxes 3-0.2% -0.2% Minority interest -4 Dec-13 Dec-14 Dec- 15 Dec- 16 Dec-17 Mar-18 Net income 1Q18 630 Total Loans Commercial Mortgage Consumer ROAE: 1Q17-14.0% 1Q18-13.6% Source: Banco de Chile, SBIF. 1. Loan growth excludes Chilean loans held by subsidiaries abroad. 6

AGENDA I. Chilean Economy II. Banking Industry Overview III. Banco de Chile 1Q18 Results and Strategy 7

1Q18 BCH RESULTS QuarterlyNet Income (Net income in billions of CLP and UF variation in %) Quarterly Net Income UF variation 132 151 145 124 140 160 134 142 143 0.71% 0.93% 0.66% 0.47% 0.47% 0.73% 0.53% 0.63% -0.03% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2016 2017 2018 Full year 2016 Net income: $552 Bn. ROAE: 20% Inflation 1 : 2.8% Corporate tax rate: 24.0% Full year 2017 Net income: $576 Bn. ROAE: 19% Inflation 1 : 1.7% Corporate tax rate: 25.5% 1Q18 Net income: $143 Bn. ROAE 2 : 18% Inflation 1 :0.63% Corporate tax rate: 27.0% 1.- UF Variation 2- Annualized 8

LONG-TERM CUSTOMER CENTRIC STRATEGY To be the best bank for our customers, the best place to work, and the best investment for our shareholders Delivering sustainable and profitable growth based on: I. Greater penetration in the retail segment II. III. IV. Strengthening customer experience Continual improvements in productivity Proven risk management practices 9

SETTING THE STAGE FOR GROWTH Our steady increases in our customer base provide the foundation for revenue growth Loans by Segment (In billions of CLP) +1.8% +1.7% Retail Loans 6.9% YoY Quarterly Consumer Loan Sales (In billions of CLP) 397 384 +26% 451 446 499 25,408 25,860 25,440 11,851 12,390 12,543 +5.8% 3,055 3,278 3,389 10,502 9,772 9,928 +10.9% -5.5% 1Q17 2Q17 3Q17 4Q17 1Q18 DDA 1 Cost of Funding 2 (Average, in billions of CLP) (Local Currency 3, %) 1Q17 4Q17 1Q18 YoY Wholesale SME Personal 8,177 7.7% 8,804 2.5% 2.7% 2.8% 1. Demand deposit account 2. Excludes results from accounting hedges 3. Cost of funding as of March 2018 1Q17 1Q18 BCH BSAN BCI 10

SETTING THE STAGE FOR GROWTH Effective business strategies that attract profitable customers Retail Banking Customers 1 (Thousands current account holders) Current Account Balance Personal Banking 2 (In millions of CLP and Market Share in %, As of January 2018) +54.4% 2.98 +45.4% +36.7% +6.4% 787 798 810 823 837 101 102 103 104 105 Personal Banking SME Banking 30.1% 2.18 2.05 1.93 22.9% 14.2% 6.6% BCH BSAN BCI Itau Market share Avg DDA balance per account 686 696 707 719 732 Total Debtors (Market Share as of March 2018) 18.9% 15.4% 2017 2018 10.9% 7.4% 1. Source: Internal information 2. Source: SBIF - Variation YoY total current accounts, January 2018. Itau includes Corpbanca BCH BSAN BCI Itau 11

ROBUST OPERATING INCOME Consistently growing customer income by improving mix in retail products, managing spreads proactively and improving fee income Quarterly Operating Revenues 1 (In billions of CLP) Net Interest Margin and Spread (%) 423 88 448 104 +5.3% 404 67 434 445 91 102 15.5% 4.25% 4.28% 3.00% 3.06% 1Q17 1Q18 65 70 62 65 65 0.7% 270 274 276 278 278 1Q17 2Q17 3Q17 4Q17 1Q18 Non-customer income Customer income - wholesale Customer income - retail UF (QoQ) 1Q17 2Q17 3Q17 4Q17 1Q18 0.47% 0.73% -0.03% 0.53% 0.63% 3.0% YoY Net Fees (In billions of CLP) 87 8 79 NIM +2.2% Spread 88 86 86 89 +12.8% 1Q17 2Q17 3Q17 4Q17 1Q18 1.- Non-customer income includes income from the contribution UF GAP position and treasury activities. Recurring net fees One time lower commission expenses 12

SUPERIOR INITIATIVES THAT MAKE A DIFFERENCE CUSTOMER EXPERIENCE Net Promoter Score CADEM, March 2018, (%) 73 70 63 BCH BCI BSAN Brand Asset Valuator (BAV) 2017, (percentile) 86 67 46 BCH BSAN BCI DIGITAL BANKING Online and Branch Monetary Transactions As of March 1Q17 & 1Q18, total number of personal banking transactions (millions) Online 20.1 51% 43% 49% 57% 1Q17 Branches +18.3% 23.7 1Q18 +1.0% +36.1% YoY Evolution of Online Monetary Transactions As of March 1Q17 & 1Q18, total number of personal banking transactions (millions) Mobile 9.9 56% 44% 1Q17 Webpage +36.1% 13.4 48% 52% 1Q18 +16.8% +61.1% YoY 14

FIRM FOCUS ON COST CONTROL Streamlining processes has translated into improved productivity and cost reductions Operating expenses (In billions of CLP) 192 197 +6.3% 197 91 95 95 203 204 98 96 +5.7% Branch and Employee Evolution 14,883-6.6% -1.4% 14,105 13,908-4.8% 418 422-5.7% 398 101 102 102 104 102 +1.4% 1Q16 1Q17 1Q18 Employees 1Q16 1Q17 1Q18 Branches 5 1Q17 2Q17 3Q17 4Q17 1Q18 Col. Bargaining Agreement Personnel Administration & Others YoY Productivity (In billions of CLP) Productivity + 7% YoY Efficiency Ratio (%) 1Q17 2Q17 3Q17 4Q17 1Q18 45.5 44.1 48.8 46.6 45.9 0.92 1.06 1.14 Operating Expenses/Average Total Assets (%) 2.4 2.5 2.5 2.5 2.5 1Q16 1Q17 1Q18 Retail Loans by Employee 16

SUSTAINABLE LONG-TERM FOCUS ON RISK MANAGEMENT Prudent risk management practices has allowed us to maintain risk at low levels Quarterly Loan Loss Provisions (In billions of CLP) Variation in LLP by Concept (In billions of CLP) 70.9 63.1 3.4 4.2 0.3 70.9 63.1 62.1 50.4 59.3 1Q17 Volume & Mix Deterioration Exchange Rate 1Q18 1.12% 1.00% 0.98% 0.94% 0.79% 1Q17 2Q17 3Q17 4Q17 1Q18 Total LLP Ratio Variation in LLP by Product (In billions of CLP) 63.1 16.6 2.1 1.8 4.8 70.9 1Q17 Commercial Contingent and Other Mortgage Consumer 1Q18 18

Highlights: First Quarter 2018 Net Income $143bn Retail Current Accounts Consumer loan Sales Recurring Retail Customer Income 1 837,000 $499 bn $278 bn +2% (YoY) +6.4% (YoY) +26% (YoY) +6.1% (YoY) Recurring Net Fees 1 NPL 90d Adjusted Efficiency Ratio 2 Basel Ratio $89bn 1.17% 44.7% 14.2% +13% (YoY) -5 bps (YoY) -73 bps (YoY) +38bps (YoY) 1. Excludes one-time lower commission expense in 1Q17 related to loyalty program. 2. Excludes one-time expense related to collective bargaining agreement 19

FORWARD-LOOKING INFORMATION The information contained herein incorporates by reference statements which constitute forward-looking statements, in that they include statements regarding the intent, belief or current expectations of our directors and officers with respect to our future operating performance. Such statements include any forecasts, projections and descriptions of anticipated cost savings or other synergies. You should be aware that any such forward-looking statements are not guarantees of future performance and may involve risks and uncertainties, and that actual results may differ from those set forth in the forward-looking statements as a result of various factors (including, without limitations, the actions of competitors, future global economic conditions, market conditions, foreign exchange rates, and operating and financial risks related to managing growth and integrating acquired businesses), many of which are beyond our control. The occurrence of any such factors not currently expected by us would 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 or political or other conditions in Chile or changes in general economic or business conditions in Latin America; Changes in capital markets in general that may affect policies or attitudes toward lending to Chile or Chilean companies; Unexpected developments in certain existing litigation; Increased costs; Unanticipated increases in financing and other costs or the inability to obtain additional debt or equity financing on attractive terms. You should not place undue reliance on such statements, which speak only as of the date that they were made. Our independent public accountants have not examined or compiled the forward-looking statements and, accordingly, do not provide any assurance with respect to such statements. These cautionary statements 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 release publicly any revisions to such forward-looking statements to reflect later events or circumstances or to reflect the occurrence of unanticipated events. 20