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Financial Assets Available-for-Sale and Financial Assets at Fair Value through Other Comprehensive Income | 12 Months Ended
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Dec. 31, 2018
Financial Assets Available-for-Sale and Financial Assets at Fair Value through Other Comprehensive Income |
Financial Assets Available-for-Sale and Financial Assets at Fair Value through Other Comprehensive Income | 13. Financial Assets Available-for-Sale and Financial Assets at Fair Value through Other Comprehensive Income: As of December 31, 2017 and 2018, financial assets are detailed as follows:
|  | 2017 |  | 2018
|  | MCh$ |  | MCh$
Assets instruments Available-for Sale |  | 1,526,315 |  | —
Debt instruments at fair value through OCI |  | — |  | 1,043,440
Equity instruments valued at fair value through OCI |  | — |  | 9,751
Total |  | 1,526,315 |  | 1,053,191
(a)Assets instruments available-for-sale: As of December 31, 2017 instruments classified as available-for-sale are detailed as follows:
|  | 2017 |  | 2018
|  | MCh$ |  | MCh$
Instruments issued by the Chilean Government and Central Bank: |  |  |  |
Bonds issued by the Chilean Government and Central Bank |  | 204,128 |  | —
Promissory notes issued by the Chilean Government and Central Bank |  | 3,346 |  | —
Other instruments |  | 148,894 |  | —
Other instruments issued in Chile: |  |  |  |
Equity instruments valued at fair value |  | 9,218 |  | —
Mortgage bonds from domestic banks |  | 99,572 |  | —
Bonds from domestic banks |  | 5,415 |  | —
Deposits from domestic banks |  | 956,733 |  | —
Bonds from other Chilean companies |  | 14,969 |  | —
Other instruments |  | 83,006 |  | —
Instruments issued by foreign institutions: |  |  |  |
Equity instruments valued at cost |  | 50 |  | —
Other instruments issued abroad |  | 984 |  | —
Total |  | 1,526,315 |  | —
Instruments issued by the Chilean Government and Central Bank include instruments with repurchase agreements sold to clients and financial institutions, totaling Ch$5,177 million as of December 31, 2017. The repurchase agreements have an average maturity of 3 days as of December 31, 2017. Additionally, under the same item, other financial instruments are maintained as collateral guaranteeing the derivative transactions executed through Comder Contraparte Central S.A. for an amount of Ch$31,415 million as of December 31, 2017. As of December 31, 2017, the portfolio of financial assets available-for-sale includes a net unrealized gain of Ch$9,521 million, recorded in other comprehensive income within equity. (b)Debt instruments at fair value through OCI: (b.1) The breakdown of the balance under the heading “Debt instruments at fair value through OCI” as of December 31, 2017 and 2018 is, as follows:
|  | 2017 |  | 2018
|  | MCh$ |  | MCh$
Instruments issued by the Chilean Government and Central Bank: |  |  |  |
Bonds issued by the Chilean Government and Central Bank |  | — |  | 135,145
Promissory notes issued by the Chilean Government and Central Bank |  | — |  | —
Other instruments |  | — |  | 29,077
Other instruments issued in Chile: |  |  |  |
Mortgage bonds from domestic banks |  | — |  | 92,491
Bonds from domestic banks |  | — |  | 5,351
Deposits from domestic banks |  | — |  | 559,108
Bonds from other Chilean companies |  | — |  | 6,599
Other instruments |  | — |  | 107,125
Instruments issued by foreign institutions: |  |  |  |
Other instruments |  | — |  | 108,544
Total |  | — |  | 1,043,440
Instruments issued by the Chilean Government and Central Bank include instruments with repurchase agreements sold to clients and financial institutions, totaling Ch$6,965 million as of December 31, 2018. The repurchase agreements have an average maturity of 3 days as of December 31, 2018. As of December 31, 2018, the portfolio of financial assets at FVOCI includes a net unrealized gain of Ch$3,649 million, recorded in other comprehensive income within equity. As of December 31, 2018 the impairment for debt instruments at Fair Value through OCI was MCh$4,268. (b.2) The credit ratings of the issuers of debt instruments as of December 31, 2018 and 2017, are as follows:
|  | 2017 |  | 2018
|  | Stage 1 |  | Stage 2 |  | Stage 3 |  |  |  |
|  | Individual |  | Individual |  | Individual |  | Total |  | Total
|  | MCh$ |  | MCh$ |  | MCh$ |  | MCh$ |  | MCh$
Debt Instrument |  |  |  |  |  |  |  |  |  |
Investment grade |  | 827,770 |  | — |  | — |  | 827,770 |  | 1,433,057
Non-investment grade |  | — |  | — |  | — |  | — |  | —
Without rating |  | 215,670 |  | — |  | — |  | 215,670 |  | 83,006
Total |  | 1,043,440 |  | — |  | — |  | 1,043,440 |  | 1,516,063
(b.3) Analysis of changes in the fair value of debt instrument is, as follows:
|  | 2018
|  | Stage 1 |  | Stage 2 |  | Stage 3 |  |
|  | Individual |  | Individual |  | Individual |  | Total
|  | MCh$ |  | MCh$ |  | MCh$ |  | MCh$
Gross Carrying amount as at 1 January 2018 |  | 1,516,063 |  | — |  | — |  | 1,516,063
Net change on gross carrying amount* |  | (515,343) |  | — |  | — |  | (515,343)
Change in fair value |  | 14,162 |  | — |  | — |  | 14,162
Transfer to Stage 1 |  | — |  | — |  | — |  | —
Transfer to Stage 2 |  | — |  | — |  | — |  | —
Transfer to Stage 3 |  | — |  | — |  | — |  | —
Amounts written off |  | — |  | — |  | — |  | —
Foreign exchange adjustments |  | 28,558 |  | — |  | — |  | 28,558
Total |  | 1,043,440 |  | — |  | — |  | 1,043,440
* Net allowance change between assets originated and assets repaid, excluding write-offs. (b.4) Analysis of changes in the corresponding ECLs of debt instrument is, as follows:
|  | 2018
|  | Stage 1 |  | Stage 2 |  | Stage 3 |  |
|  | Individual |  | Individual |  | Individual |  | Total
|  | MCh$ |  | MCh$ |  | MCh$ |  | MCh$
ECL allowances as at 1 January 2018 |  | 5,820 |  | — |  | — |  | 5,820
Net change on ECL allowances * |  | (1,978) |  | — |  | — |  | (1,978)
Transfer to Stage 1 |  | — |  | — |  | — |  | —
Transfer to Stage 2 |  | — |  | — |  | — |  | —
Transfer to Stage 3 |  | — |  | — |  | — |  | —
Impact on year end ECL of exposures transferred between stages during the year ** |  | — |  | — |  | — |  | —
Impact of net re-measurement of year end ECL |  | 258 |  | — |  | — |  | 258
Amounts written off |  | — |  | — |  | — |  | —
Foreign exchange adjustments |  | 168 |  | — |  | — |  | 168
Total |  | 4,268 |  | — |  | — |  | 4,268
* Net allowance change between assets originated and assets repaid, excluding write-offs. ** Represents the change in the year-end ECLs of exposures that were transferred from one stage to another during the year. (c)Equity instruments at fair value through OCI: The breakdown of the balance under the heading “Equity instruments at fair value through OCI” as of December 31, 2017 and 2018 is as follows:
|  | 2017 |  | 2018
|  | MCh$ |  | MCh$
Equity instruments issued in Chile |  | — |  | 8,939
Equity instruments issued by foreign institutions |  | — |  | 812
Total |  | — |  | 9,751
The equity investments issued by foreign institutions represent shares of currency exchange offices and servicing companies that the Bank is obliged to hold in order to benefit from these services. Shares that do not have an active market and their value cannot be reliably measured are presented at cost, the difference between cost and fair value is not expected to be significant. (d)Realized and unrealized profits: Realized profits and losses are calculated as the proceeds from sales less the cost (specific identification method) of the investments identified as for sale and fair value through OCI. In addition, any unrealized profit or loss previously recorded in other comprehensive income for these investments is reclassified when recorded in the income statements. The gross gains (losses) realized in sale of financial instruments, as of December 31, 2017 and 2018, is recorded in the item “Net financial operating income” (Note No. 32). Change in profits and losses unrealized on the sale of debt instruments for the periods ended December 31, 2016, 2017 and 2018 are as follows:
|  | 2016 |  | 2017 |  | 2018
|  | MCh$ |  | MCh$ |  | MCh$
Net gain (loss) on financial assets before income tax (1) |  | (52,345) |  | 4,775 |  | (13,878)
Tax (expense) benefit |  | 12,575 |  | (1,299) |  | 3,757
Net of tax amount (2) |  | (39,770) |  | 3,476 |  | (10,121)
| (1) |  | As of December 31, 2016, 2017 and 2018, realized gains reclassified to the income statement line item “Net financial operating income” amounted to Ch$64,011 million, Ch$5,149 million and Ch$400 million, respectively.
| (2) |  | This amount corresponds to the unrealized gain or loss, net of deferred tax and which are included in “Consolidated Statement of Changes in Equity”.

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- Definition The entire disclosure of financial assets classified as available for sale and financial assets at fair value through other comprehensive income. + References No definition available. + Details
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