Q3 2010 November 3, 2010
2 Agenda Chilean Economy Financial Highlights 3Q10 Financial Results Key Balance Sheet Figures
Chile: Third Quarter 2010 Highlights Outstanding economic outlook for Chile Estimated 3Q10 GDP above 7% Unemployment strengthened despite winter seasonal effects Inflation continues to reach more normalized levels Monetary policy rate reached 2.75% in October 2010 3
4 BCH: Financial Highlights Excellent 2010 quarterly results which have been consistently above Ch$100 billion 3Q09 1Q10 2Q10 3Q10 Net Income (BCh$) 68.7 100.8 107.8 100.0 EPS (Local Share, Ch$) 0.83 1.22 1.31 1.21 ROAE* (%) 18.9 26.4 30.0 26.1 Tier 1 Capital / RWA (%) 9.95 8.62 8.64 8.79 Total Capital Ratio / RWA (%) 13.41 11.85 13.49 13.64 *Does not include provision for minimum dividends
BCH: Operating Segment Highlights Picking up speed Retail Banking Leading loan growth with an expansion of 15% Continued improvements in provision expenses (-20% vs 3Q09) Net income before taxes up 67% vs 3Q09 Wholesale Banking Firm increase in fee revenue of 33% as compared to 3Q09 Provision expenses down by 48% vs 3Q09 Operating expenses down by 23% as compared to 3Q09 Treasury Net income before taxes up by 65% US$339 million local bond placements with spread between 51bp and 70bp above the central bank benchmark Subsidiaries Stock brokerage volumes up 25% y/y Assets under management up 20% y/y Net income up 16% as compared to 3Q09 5
BCH: Consistent Returns (Billions of Ch$) Firm net income growth, providing a solid 26.1% return-on-average-equity Quarterly Net Income & ROAE 3Q09/3Q10 Highlights +46% 101 108 100 Higher net interest income (+18%) 69 26.4% 30.0% 26.1% Strong fee revenue growth (+21%) Lower loan loss provisions (-32%) 18.9% Controlled increase in expenses (+8%) 3Q09 1Q10 2Q10 3Q10 ROAE* Net Income *ROAE does not include provision for minimum dividends 6
BCH: Operating Revenues (Billions of Ch$) Solid growth in core banking revenues Total Operating Revenues +8% Avg. Interest Earning Assets & NIM +6% 258 22 61 13 288 294 279 7 5 34 25 10 66 73 65 4 15,272 2,726 4.3% 16,293 16,192 2,855 2,652 4.8% 4.7% 162 184 196 192 12,546 13,438 13,540 3Q09 1Q10 2Q10 3Q10 3Q09 2Q10 3Q10 Net Interest Revenues Fx & Trading Net Fees Other Var. UF: -0.47% 0.97% 0.65% Loans Other financial assets NIM 7
BCH: Treasury Operating Revenues (Billions of Ch$) Excellent ability of the treasury area to generate complementary revenues Treasury Operating Revenues 3Q09/3Q10 Highlights +55% 51 26 29 7 22 25 45 35 10 Proactive and strategic management of UF GAP position Positive results associated with funding Ch$ denominated assets by US$ denominated liabilities hedged with derivatives 3Q09 2Q10 3Q10 Net financial and Fx operating income Segment Information* *Other operating revenues generated by the treasury area 8
BCH: Net Fee Revenues (Billions of Ch$) Strong growth in all transactional products Net Fees by Segment +20% 61 65 66 8 9 10 53 56 56 73 11 62 Breakdown of Net Fee Revenue 3Q09 2Q10 3Q10 12M Portfolio management 12.6 14.9 16.6 4.0 Card services, net 9.8 10.6 11.9 2.1 Trading & securities mgt 6.0 11.9 10.7 4.8 Checking accounts 9.0 11.1 10.3 1.3 Insurance Brokerage 8.8 8.6 10.0 1.2 Collection services 8.7 9.0 9.3 0.6 Guarantees & ltrs of cred. 3.4 3.8 4.1 0.7 Other fees & commissions 1.7 (3.7) 0.4 (1.4) Total 60.1 66.1 73.4 13.3 3Q09 1Q10 2Q10 3Q10 Retail Banking & Subsidiaries* Wholesale Banking & Treasury *Consolidation adjustments have been included in the Retail Banking & Subsidiaries segments 9
BCH: Superior Asset Quality (Billions of Ch$) Asset quality and NPLs continue to improve coverage ratio reaches 410%... Provisions Expenses Asset Quality Indicators -32% 64 2.1% 54 14 1.6% 36 1.1% 44 14 1.3% 410% 373% 358% 346% 0.70% 0.73% 0.68% 0.64% 3Q09 1Q10 2Q10 3Q10 3Q09 1Q10 2Q10 3Q10 1 Provisions Downgrade Provisions to Avg. Loans Coverage Ratio Past-due to total loans (1) Downgrade of certain wholesale debtor 10
BCH: Operating Expenses (Billions of Ch$) Operating expenses remain under control... Total Operating Expenses Detail of Operating Expenses 141 118 123 127 45.7% 42.6% 47.8% 45.4% 3Q09 1Q10 2Q10 3Q10 3Q09 1Q10 2Q10 3Q10 12M Personnel* 62.2 65.8 66.7 67.7 5.5 Administration* 39.8 38.4 42.1 45.2 5.4 Dep. /Amort/Imp* 8.0 7.6 7.5 7.7 (0.3) Other ** 8.0 6.9 8.7 8.0 - Subtotal 118.0 118.7 125.0 128.6 10.6 Earthquake - 2.8 1.9 1.4 1.4 Non-recurring - 1.3 13.6 (3.0) (3.0) Total Expenses 118.0 122.8 140.5 127.0 9.0 Total Operating Expenses Efficiency Ratio *Excludes earthquake expenses **Excludes earthquake and non-recurring expenses 11
BCH: Total loan portfolio (Trillions of Ch$) Loan growth is being driven by retail segments Total Loan Portfolio Breakdown of Retail Loan Portfolio +9% 13.5 13.7 +15% 12.6 5.74 6.35 6.60 3Q09 2Q10 3Q10 3Q09 2Q10 3Q10 12
BCH: Retail loan portfolio (Trillions of Ch$) Strong retail loan growth by both individuals and SMEs Individual Loan Portfolio SME Loan Portfolio +15% +15% 4.22 4.67 4.85 1.52 1.68 1.75 1.83 1.96 2.04 2.39 2.71 2.81 3Q09 2Q10 3Q10 3Q09 2Q10 3Q10 Mortgage Consumer Commercial 13
BCH: Funding Structure (Trillions of Ch$) Growth has been funded through a rise of 26% in non-interest bearing deposits Funding Structure Non-interest bearing deposits September 2009 September 2010 +26% 1% 10% 11% 22% 1% 10% 11% 26% 3.37 26.8% 4.42 32.7% 4.25 31.1% 8% 8% 48% 44% Non-interest bearing deposits Financial Institutions Other Source: SBIF Time Deposits Debt Issued Equity 3Q09 2Q10 3Q10 Non-interest bearing deposits Non-interest bearing deposits to loans 14
BCH: Strong Capital Base Capital adequacy ratios remain high... Capital Adequacy Ratios (%) Effective Equity 13.4 13.5 13.6 10.0 8.6 8.8 64% 32% 4% 2Q09 2Q10 3Q10 Tier 1 Capital / RWA Total Capital / RWA Capital & Reserves Subordinated Bonds Additional Provisions & Others 15
BCH: A profitable investment Banco de Chile s share has outperformed the IPSA index throughout the year. 180 170 160 BCH IPSA Q3 +29.3% Nov-2-2010 $70.2 pesos/share YTD +66.2% 150 Jan-1-2010 140 130 $42.15 pesos/share YTD +37.7% 120 110 +18.0% 100 90 16
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; and 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 after completion of this offering to reflect later events or circumstances or to reflect the occurrence of unanticipated events. 17
End of Presentation 18