Corporate Presentation As of December 31, 2015 Banco de Chile
Chile: Macro Environment and Financial System
Economic Highlights Solid economic fundamentals Output (YoY%) 6 Labor Market (% and YoY%, respectively) 8 4 2 6 4 2 Unemployment Rate Real Wages 0 2012 2013 2014 2015e 2016e 0 dic-12 dic-13 dic-14 dic-15 Trade Balance (USD Bn, rolling year) 10 8 6 4 2 Current Account (%GDP) 2 1 0-1 -2-3 0 dic-12 dic-13 dic-14 dic-15-4 2010 2011 2012 2013 2014 2015e 3
Economic Highlights Solid economic fundamentals Inflation (YoY%) 5 4 3 2 1 Tradable vs non Tradable CPI (YoY%) 8 6 4 2 0 Tradables non Tradables 0 2011 2012 2013 2014 2015 2016e -2 dic-12 dic-13 dic-14 dic-15 Copper and Exchange Rate (CLP/USD and USD per Pound, respectively) 750 650 550 CLP Copper (right) 4.0 3.5 3.0 2.5 Monetary Policy Rate (%) 6 5 4 3 450 2.0 ene-12 ene-13 ene-14 ene-15 ene-16 2 dic-12 dic-13 dic-14 dic-15 4
Substantial Growth Potential Low penetration in SMEs and personal banking Assets in the Chilean Financial System 1 % of GDP 2, as of December 2015 Banking System Loan Penetration 1 % of GDP Total Loans Assets Under Management 171% 202% 235% Consumer Mortgage Commercial 87% 13% 27% 60% 71% 19% 19% 38% 46% 56% 87% 114% 122% 130% GDP per Capita (US$ Thousands) 2 Banks Pension Funds Mutual Funds 10 6 6 9 13 28 56 26 44 41 44 1.- Source: Banco Central, SBIF, SAFP, AAFM, and SVS. 2.- Percentage of 3Q15 nominal GDP 1.- Source: The Economist Intelligence Unit as of Dec. 20, 2013, central banks and regulators. 2.- Source: IMF, WEO Oct. 2015 (e) 3.- Source: Central Bank and SBIF, as of Dec. 2015 5
Solid and Profitable Banking Industry With sustained growth in loans of 2x 4 GDP Growth dic-14 ene-15 feb-15 mar-15 abr-15 may-15 jun-15 jul-15 ago-15 sep-15 oct-15 nov-15 dic-15 Industry Loan Growth (Var. Real YoY) Net Income Variation (In billions of CLP) Commercial Consumer Mortgage Total Net Income 2014 2,482 10.4% 10.3% 10.7% 10.5% 10.5% Op. Income 205 4.7% 4.9% 3.2% 3.4% 2.7% 3.0% 5.6% 6.0% 6.4% 4.9% 3.9% 4.8% 4.8% 3.6% 2.9% Risk Op.Expenses Taxes 219 41 239 Net Income 2015 2,187 Note: Excludes loans from subsidiaries abroad, Ripley Bank and Cencosud/Scotiabank Consolidation in Dec-13 and May-15 respectively. 6
Introduction to Banco de Chile
Snapshot of Banco de Chile A leading financial institution in profitability and soundness As of December 2015 US$44 billion in Assets US$26 billion in Total Deposits Most Profitable and Strongest Bank Institution in LatAm 1 ROAE 2014 24.5% Rating S&P, Feb-16 A+ US$3.8 billion in Equity Itau 23.9% BB S&P: A+ Moody s: Aa3 (Strongest Private Bank in Latam) Santander CL 22.3% A Listed locally and internationally Bradesco 19.8% BB Credicorp 18.5% n/a 1.- Source: Bloomberg as of February 22, 2016. Five most profitable private and listed banks in LATAM 8
Ownership Structure Attractive free float of 25.4% Free Float Evolution Simplified Ownership Structure As of December 2015 Pre Capital Increase 2011 12.1% 50.0% 50.0% Pre Capital Increase 2012 15.7% 26.2% 58.2% LQIF s Direct and Indirect Stake in Banco de Chile 51.1% Pre LQIF Secondary Offering 2013 17.6% Free Float SM-Chile 12.6% 100% SAOS Ergas Group Current 25.4% 25.4% 29.7% 6.0% Free Float 9
Diversified Business Model Focused on profitability in every segment we serve Total Loans As of December 31, 2015 Income Before Taxes As of December 31, 2015 3% 8% 21% 52% US$34.7 bn 27% 41% US$876.5 mn 19% 18% 6% 5% 1 Subsidiaries Individuals and SMEs Consumer Finance Large Companies Corporate Treasury Note: CLP/US$ = 708.24 as of December 31, 2015. Information in Chilean GAAP. 1.- Subsidiaries include Banchile Corredores de Bolsa S.A., Banchile Administradora General de Fondos S.A., Banchile Corredores de Seguros Ltda., Banchile Asesoría Financiera S.A., Banchile Securitizadora S.A., Promarket S.A., Socofin S.A. 10
Corporate Strategy Consistent and focused long term objectives Lead the Wholesale Business Lead the Retail Business Operational Excellence Service Quality Aligning People/ Culture/Strategy Building a Corporate Reputation 11
Lead the Retail and Wholesale Business Greater dynamism in middle-upper retail banking 2015 (Bn) YoY QoQ Retail 13,549 15.3% 4.8% Mortgage 6,395 18.2% 4.9% Commercial 3,424 14.3% 3.6% Consumer: Middle & Upper Income 3,036 14.9% 7.1% Consumer Finance 1 693-0.9% 1.6% Wholesale 11,008 8.7% -0.8% Corporate 4,367 5.9% 0.3% Large Companies 6,641 10.6% -1.5% Nominal Loan Growth %, QoQ 3.8% 2.4% 2.3% 3.7% 2.0% 1.4% 2.0% 0.7% 3.4% 1.2% 7.1% 5.1% 5.2% 3.3% -0.9% sep-14 dic-14 mar-15 jun-15 sep-15 dic-15 6.0% 4.9% 0.2% Total Loans 24,558 12.3% 2.2% Commercial Consumer Mortgage +10.0% YoY +11.5% YoY +18.2% YoY 1- CrediChile 12
Service Quality & Aligning People/Culture/Strategy Customer service is Banco de Chile s first priority Service Quality Net Promoter Score, % 60.0 66.6 67.9 71.0 2012 2013 2014 2015 A bank that listens; that tailors its products and services to its customers; that adopts service industry best practices; that establishes emotional bonds based on experience, and that prioritizes closeness and customer satisfaction. Aligning People/Culture/Strategy Employee Development Workshops & Continual Training Courses 41 Country-wide events 80 Courses 6,585 Participants 1,800 Participants With a consistent culture recognized for its responsibility, ethics, transparency and respect for people and the environment; that attracts the best talent from each field of study; that is demanding with a passion for a job well done, and that offers opportunities for personal and professional growth. 13
Solid Competitive Position 14
Solid Competitive Position: Brand Strong brand recognition translates into high client attraction and retention Santander BCI Itau CorpBanca Santander BCI Itau CorpBanca Santander BCI Itau CorpBanca First Mention by Attribute % of Total Mentions, December 2015 Top of Mind Bank You Would Change to Security and Solvency 30% 25% 32% 16% 16% 3% 3% 9% 14% 4% 4% 10% 14% 2% 1% Source: Adimark GFK. Includes all brands from each institution. 15
Solid Competitive Position: Products and Services Leading market position in the products and services offered Total Loans Market Share, as of Dec. 2015 1 18.9% 18.3% Ranking 1,2 Product Mkt Share 1 st Commercial 18.1% 2 nd Consumer 20.9% 2 nd Mortgage 17.6% Commercial Loans Market Share, as of Dec. 2015 1 12.9% 7.2% 5.1% 18.1% 16.7% 13.9% 9.1% 5.8% Santander BCI CorpBanca Itau Santander BCI CorpBanca Itau Net Fees and Commissions Market Share, as of Dec. 2015 Assets Under Management Market Share, as of Dec. 2015 20.3% 15.8% 15.6% 10.2% 4.7% 21.3% 16.1% 13.1% 6.3% 5.9% Santander BCI CorpBanca Itau Santander BCI LV Security Source: SBIF, AAFM. 1.- Excludes subsidiaries outside Chile. 2.- Mortgage loan ranking excludes Banco Estado 16
Solid Competitive Position: Funding Diversified and stable funding base Liability Structure % Over Total Assets, as of December 2015 Demand Deposits Market Share %, as of December 2015 Equity 9% Financial Institutions 5% Other 8% Current Accounts and Demand Deposits 27% Retail 48% 23.1% 20.4% 14.3% 3.7% 2.7% Santander BCI CorpBanca Itau Debt Issued 19% Savings Accounts and Time Deposits 32% Wholesale 52% Wholesale 57% Retail 43% Cost of Funding 1 %, YTD December 2015 3.7% 3.7% 4.3% 5.2% 5.6% BCI Santander CorpBanca Itau Source: SBIF. Information in Chilean GAAP, as of June 30, 2015. 1.- Cost of funding is defined as the quotient between interest paid and the sum of interest bearing liabilities and non interest bearing deposits, excluding derivatives, annualized 17
Solid Competitive Position: Risk Prudent and effective credit risk management Delinquency Ratio %, Past Due Loans 1 / Total Loans Coverage Ratio Allowances for Loan Losses / Past-Due Loans 1 2.66% 2.30% 1.20% 3.17% 2.95% 2.34% 2.07% 1.03% 0.97% 2.93% 2.39% 1.14% 2.81% 2.29% 1.25% 2.54% 1.68% 1.22% 2.06 2.14 1.06 1.02 1.10 1.04 2.34 1.11 0.92 2.03 1.94 2.01 0.99 1.09 0.97 0.95 1.22 1.17 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Santander BCI Renowned risk management based on: Proven capacity for origination and structuring Solid follow-up and collection processes Senior management deeply involved Source: SBIF. Information in Chilean GAAP. 1.- Loans overdue 90 days or more, including overdue installments, as well as outstanding capital and interests. 18
Solid Competitive Position: Corporate Governance The foundation of our success Solid Corporate Governance Practices Successful Partnership with Citi Active Board involvement 11 board members (2 are independent) 5 risk committees, including weekly sessions of Loan Portfolio Committee 6 monthly business committees Best Practices in pursuant to NYSE and SEC standards Three active board members Growth of existing businesses Transactional and Multinational Banking, Treasury, Investment Banking, Consumer Finance International Connectivity provide us with significant growth potential to develop: International business opportunities Regional and multinational client development Best practices in internal management processes 19
Consistent and Profitable Track Record 20
Consistent and Profitable Track Record $559 CLP Net Income and 21% ROAE for 2015 Quarterly Net Income and ROAE (In billions of CLP, %) Full year 2013 Net Income: $514 Bn. ROAE: 24% Inflation 1 : 2.05% Full year 2014 Net Income: $591 Bn. ROAE: 24% Inflation 1 : 5.65% Full year 2015 Net Income: $559 Bn. ROAE: 21% Inflation 1 : 4.07% 121 122 137 133 151 154 159 128 117 168 134 140 23% 23% 25% 24% 25% 26% 26% 24% 18% 26% 20% 21% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2013 2014 2015 QoQ 1Q 2Q 3Q 4Q UF 0.12% -0.07% 1.04% 0.95% 1Q 2Q 3Q 4Q 1.28% 1.76% 0.60% 1.90% 1Q 2Q 3Q 4Q -0.02% 1.46% 1.46% 1.11% 1.- UF Variation 21
Proven Value Creation Capabilities Distinguished in the local market Highest Profitability in the Local Industry Based on Superior Risk Management and Efficiency Operating Margin % Over Average Loans, YTD December 2015 ROAE YTD December 2015 7.2% 6.8% 6.8% 6.8% 21.4% 5.4% 17.0% 17.5% 13.8% 13.7% Santander BCI CorpBanca Itau Loan Loss Provisions Ratio %, Provisions for Loan Losses / Average Loans, YTD December 2015 1.7% 1.3% 1.1% 1.1% 0.7% Santander BCI CorpBanca Itau Santander BCI CorpBanca Itau ROAA: 1.9% 1.4% 1.3% 1.1% 1.3% Source: SBIF Efficiency Ratio Operating Expenses / Operating Revenues, YTD December 2015 44.1% 43.3% 50.3% 50.5% 52.2% Santander BCI CorpBanca Itau 22
2015 BCH Results Solid loan and deposit growth offsets lower non-customer income Operating Revenues (In billions of CLP) 1,646 1,646 8.1% 475 428 Operating Margin Breakdown (Operating Income / Avg. Daily Loans) 7.0% 7.6% 7.4% 6.8% 1,172 1,218 2014 2015 Non-customer income Customer income 4.2% 4.1% 4.1% 3.9% 3.9% 2.6% 1.5% 2.1% 2.2% 1.6% 1.3% 1.3% 1.3% 1.3% 1.4% 4Q14 1Q15 2Q15 3Q15 4Q15 Total Operating Income Interest Income from Customers Fees Non-customer income* Total Loans (In billions of CLP) 21,877 24,558 18.1% Market Share 18.3% Market Share Demand Deposits (In billions of CLP) 6,934 22.5% Market Share 8,327 23.1% Market Share Basel Ratio (% of RWA) 13.3% 12.6% 2.9% 2.6% Tier 2 10.4% Tier 1 10.0% 2014 2015 2014 2015 2014 2015 23
2015 BCH Results Diversified and stable fee generation Fee Breakdown & YoY Variation Fee Composition (In billions of CLP, except %) (% of Total Net Fees) 47% 40% Subsidiaries Retail Wholesale & Treasury 13% Mutual Funds +17.9 % Current & Sight accounts, overdrafts & ATMs +14.9 % Insurance +7.7 % Credits & Collections +4.4 % Letter s of credit, guarantees & foreign trade Cash Management & Custody Services +7.6 % +11.5 % Financial Advisory Services +78.8 % Stock Brokerage -19.7 % Credit Cards +48.2 % Others +70.7 % Total -7-4 11 6 6 8 7 5 26 25 27 25 25 22 2014: $ 272 Bn 2015: $ 306 Bn 59 54 77 65 75 65 2015 2014 +12.4% 24
2015 BCH Results Prudent risk policy explains increase in LLP Loan Loss Provisions (In billions of CLP) Annual Variation in LLP (LLP in billions of CLP and LLP ratio in %) 284 303 8 1 4 5 284 303 1.34% 1.32% 4Q 74 74 3Q 62 104 2Q 72 59 Coverage Ratio (Times) 1Q 76 65 2.0 1.8 1.2 1.2 0.9 1.3 2014 2015 25
2015 BCH Results Cost base increase mainly due to inflation and peso depreciation Operating Expenses Breakdown & YoY Variation (In billions of CLP, except %) Efficiency Ratio (Operating Expenses/Operating Revenues, %) 381 Personnel 385-0.8 % Administrative 290 269 +7.7 % Other 55-9.8 % 61 Total Expenses 2014: $ 715 Bn 2015: $ 726 Bn +1.6 % 50.3% 47.7% 44.3% 44.1% 2010 2011 2012 2013 2014 2015 BCH Local Peers* 2015 2014 Note: 4Q14 expenses include $40 Bn. Due to our collective bargaining agreement. * Santander, BCI, CorpBanca, and Itau 26
Consistent Higher Profitability Generated by a unique and consistent business strategy Return on Average Equity (ROAE) %, Times over Peers Return on Average Assets (ROAA) %, Times over Peers Banco de Chile s Multiple over Peers 0.8x 1.1x 1.2x 1.4x 1.3x 1.3x 1.3x 0.9x 1.1x 1.2x 1.4x 1.4x 1.4x 1.5x 22.6% 19.1% 27.8% 26.9% 25.7% 23.5% 24.7% 21.4% 24.5% 21.7% 17.9% 17.5% 18.7% 16.0% 1.7% 1.5% 2.2% 2.1% 2.1% 2.1% 2.2% 2.0% 1.7% 1.4% 1.5% 1.6% 1.9% 1.3% 2009 2010 2011 2012 2013 2014 2015 2009 2010 2011 2012 2013 2014 2015 Local Peers 1 Source: SBIF. 1.- Santander, BCI, CorpBanca, and Itau 27
Year-end Summarized Financial Statements 28
Yearly Financial Performance Summary Chilean GAAP Variation 2011 2012 2013 2014 2015 2015 / 2014 Statement of Income (in billions of CLP) Net Interest Income 871 953 1,059 1,245 1,219 (2.1)% Total Operating Revenue 1,224 1,342 1,456 1,646 1,646 (0.0)% Provisions for Loan Losses (125) (188) (242) (284) (303) 6.7% Total Operating Expenses (614) (634) (623) (715) (726) 1.6% Net income 429 466 514 591 559 (5.4)% Balance Sheet (in billions of CLP) Total Loans 17,378 18,762 20,870 21,877 24,558 12.3% Total Assets 21,741 23,261 25,934 27,646 31,293 13.2% Total Equity 1,739 2,007 2,284 2,535 2,740 8.1% Profitability Indicators Net Interest Margin 1 4.77% 4.62% 4.71% 5.15% 4.62% (53) bp Operating Margin 1 6.70% 6.41% 6.47% 6.81% 6.24% (57) bp ROAE - Return on Average Equity 2 24.03% 23.31% 21.30% 24.43% 21.41% (302) bp ROAA - Return on Average Assets 3 2.12% 2.09% 2.13% 2.25% 1.91% (34) Bp Credit Quality Provisions for Loan Losses/ Average Loans 0.79% 1.04% 1.23% 1.34% 1.32% (2) bp Non-Performing Loans / Total Loans 1.03% 0.97% 1.13% 1.25% 1.22% (3) bp Allowances for Loan Losses / Non-Performing Loans 2.1x 2.4x 2.0x 1.9x 2.0x 0.07x Operational Efficiency Operating Expenses / Operating Revenues 50.16% 46.26% 42.78% 43.41% 44.11% +70 bp Capital Ratios Total Regulatory Capital / Risk-weighted Assets 12.91% 13.22% 13.05% 13.32% 12.58% (74) bp Tier 1 Capital / Risk-weighted Assets 8.88% 9.69% 9.94% 10.39% 9.97% (42) bp Source: Banco de Chile, based on historical Financial Statements submitted to the SBIF and not including reclassifications. Information in Chilean GAAP. 1.- Annualized net interest income divided by average interest earning assets. The average balances for interest earning assets, including interest and readjustments, have been calculated on the basis of our daily balances and on the basis of monthly balances for our subsidiaries. 2.- Annualized net income (loss) divided by average equity. The average balances for equity have been calculated on the basis of our daily average balances. 3.- Annualized net income (loss) divided by average total assets. The average balances for total assets have been calculated on the basis of our daily balances and on the basis of monthly balances for our subsidiaries. 29
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 to reflect later events or circumstances or to reflect the occurrence of unanticipated events. 30