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Segment Reporting

12 Months Ended

Dec. 31, 2021

Segment Reporting:

For management purposes, the Bank has organized its operations and commercial strategies into four business segments, which are defined in accordance with the type of products and services offered to target customers. These business segments are currently defined as follows:

Retail:

This segment focuses on individuals and small and medium-sized companies (SMEs) with annual sales up to UF 70,000, where the product offering focuses primarily on consumer loans, commercial loans, checking accounts, credit cards, credit lines and mortgage loans.

Wholesale:

This segment focused on corporate clients and large companies, whose annual revenue exceed UF 70,000, where the product offering focuses primarily on commercial loans, checking accounts and liquidity management services, debt instruments, foreign trade, derivative contracts and leases.

Treasury:

This segment includes the associated revenues to the management of the investment portfolio and the business of financial transactions and currency trading.

Transactions with customers carried out by the Treasury are reflected in the respective aforementioned segments. These products are highly transaction-focused and include foreign exchange transactions, derivatives and financial instruments in general, among others.

Subsidiaries:

Corresponds to the businesses generated by the companies controlled by the Bank, which carry out activities complementary to the bank business. The companies that comprise this segment are:

	●	Banchile Administradora General de Fondos S.A.

	●	Banchile Asesoría Financiera S.A.

	●	Banchile Corredores de Seguros Ltda.

	●	Banchile Corredores de Bolsa S.A.

	●	Banchile Securitizadora S.A. en Liquidación

●

Socofin S.A.

The financial information used to measure the performance of the Bank’s business segments is not necessarily comparable with similar information from other financial institutions because it is based on internal reporting policies. The Bank obtains the majority of its income from: interest, UF indexation and fees and financial operations and changes, discounting provisions for credit risk and operating expenses. Management is mainly focused on these concepts in its evaluation of segment performance and decision-making regarding goals and allocation of resources for each unit individually. Although the results of the segments reconcile with those of the Bank at total level, this is not necessarily the case for all concepts on an individual basis, since the management is measured and controlled in individual form and additionally applies the following criteria:

●

The net interest margin of loans and deposits is obtained aggregating the net financial margins of each individual operation of credit and uptake made by the Bank. For these purposes, the volume of each operation and its contribution margin are considered, which in turn corresponds to the difference between the effective rate of the customer and the internal transfer price established according to the term and currency of each operation. Additionally, the net margin includes the result of interest and indexation from the accounting hedges.

●

Provisions for credit risk are determined at the customer level based on the characteristics of each of their operations.

●

The capital and financial impacts on outcome have been assigned to each segment based on the risk-weighted assets.

●

Operational expenses are reflected at the level of the different functional areas of the Bank. The allocation of expenses from functional areas to business segments is done using different allocation criteria, at the level of the different concepts and expense items.

The Bank did not enter into transactions with any particular customer or third party that collectively generated more than 10% of the Bank’s total income in 2020 and 2021.

Taxes are managed at the consolidated level and are not allocated to business segments.

	As of December 31, 2019
	Retail			Wholesale			Treasury			Subsidiaries			Subtotal			Reclassifications and adjustments to conform IFRS				Total
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			Note	MCh$
Net interest income		1,020,346			366,638			(13,511	)		(7,650	)		1,365,823			5,455				1,371,278
Net fees and commissions income		268,345			49,492			(2,917	)		153,330			468,250			(10,948	)			457,302
Other operating income		37,225			62,153			42,087			53,931			195,396			(18,758	)			176,638
Total operating revenue		1,325,916			478,283			25,659			199,611			2,029,469			(24,251	)	(1)		2,005,218
Provisions for Expected Credit losses		(332,833	)		(14,375	)		—			(66	)		(347,274	)		15,673		(2)		(331,601	)
Depreciation and amortization		(57,826	)		(6,605	)		(264	)		(5,846	)		(70,541	)		—				(70,541	)
Other operating expenses		(588,997	)		(151,949	)		(2,967	)		(111,499	)		(855,412	)		23,703		(3)		(831,709	)
Income attributable to associates		4,826			1,020			111			493			6,450			(411	)			6,039
Income before income taxes		351,086			306,374			22,539			82,693			762,692			14,714				777,406
Income taxes														(169,683	)		(3,978	)	(4)		(173,661	)
Income after income taxes														593,009			10,736				603,745

Assets		18,215,859			10,765,728			11,351,141			964,695			41,297,423			(515,199	)			40,782,224
Current and deferred taxes														321,305			(89,655	)			231,650
Total assets														41,618,728			(604,854	)	(5)		41,013,874

Liabilities		10,735,252			9,160,441			17,337,471			781,052			38,014,216			(982,392	)			37,031,824
Current and deferred taxes														76,289			—				76,289
Total liabilities														38,090,505			(982,392	)	(6)		37,108,113

Reclassifications and adjustments to conform IFRS

(1)

The total effect due to the elimination adjustments to conform the total operating revenue is MCh$(14,949). In addition the total effect of IFRS adjustments is MCh$(9,302) which mainly stems from the reclassification of interest on repurchase agreements and suspended interest recognition.

(2)

The total effect relates to IFRS adjustments of MCh$15,673, which mainly stems from differences in the calculation of allowances for ECL.

(3)

The total effect due to the elimination adjustments to conform other operating expenses is MCh$14,949. In addition the total effect of IFRS adjustments is MCh$8,754, which mainly represents reversal of write-offs of assets received in lieu of payments.

(4)

The total effect relates to IFRS adjustments of MCh$(3,978), which stems from deferred taxes.

(5)

The total effect due to the elimination adjustments to conform the consolidated financial position data in assets is MCh$(345,395). In addition the total effect of IFRS adjustments in assets is MCh$(259,459), which mainly stems from differences in the calculation of allowances for loan losses, the acquisition of Citibank Chile and deferred taxes effects and settlement of transactions in the course of collection.

(6)

The total effect due to the elimination adjustments to conform the consolidated financial position data in liabilities is MCh$(345,395). In addition the total effect of IFRS adjustments in liabilities is MCh$(636,997), which mainly stems from provision for minimum dividends and differences in the calculation of allowances for ECL.

	As of December 31, 2020
	Retail			Wholesale			Treasury			Subsidiaries			Subtotal			Reclassifications and adjustments to conform IFRS				Total
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			Note	MCh$
Net interest income		940,075			377,314			(3,603	)		(1,923	)		1,311,863			4,925				1,316,788
Net fees and commissions income		265,338			55,599			(1,969	)		143,863			462,831			(16,863	)			445,968
Other operating income		26,231			48,163			75,144			35,991			185,529			(13,475	)			172,054
Total operating revenue		1,231,644			481,076			69,572			177,931			1,960,223			(25,413	)	(1)		1,934,810
Provisions for Expected Credit losses		(325,852	)		(136,448	)		—			(380	)		(462,680	)		(84,426	)	(2)		(547,106	)
Depreciation and amortization		(59,730	)		(7,317	)		(312	)		(5,998	)		(73,357	)		—				(73,357	)
Other operating expenses		(566,688	)		(153,717	)		(3,458	)		(106,591	)		(830,454	)		26,059		(3)		(804,395	)
Income attributable to associates		(6,674	)		1,548			(7	)		472			(4,661	)		(438	)			(5,099	)
Income before income taxes		272,700			185,142			65,795			65,434			589,071			(84,218	)			504,853
Income taxes														(125,962	)		22,739		(4)		(103,223	)
Income after income taxes														463,109			(61,479	)			401,630

Assets		18,800,918			10,811,000			15,400,139			830,910			45,842,967			(607,473	)			45,235,494
Current and deferred taxes														380,894			(65,428	)			315,466
Total assets														46,223,861			(672,901	)	(5)		45,550,960

Liabilities		13,848,124			10,143,939			17,844,350			660,869			42,497,282			(943,714	)			41,553,568
Current and deferred taxes														311			—				311
Total liabilities														42,497,593			(943,714	)	(6)		41,553,879

Reclassifications and adjustments to conform IFRS

(1)

The total effect due to the elimination adjustments to conform the total operating revenue is MCh$(21,480). In addition the total effect of IFRS adjustments is MCh$(3,933) which mainly stems from the reclassification of interest on repurchase agreements and suspended interest recognition.

(2)

The total effect relates to IFRS adjustments of MCh$(84,426), which mainly stems from differences in the calculation of allowances for ECL.

(3)

The total effect due to the elimination adjustments to conform other operating expenses is MCh$21,480. In addition the total effect of IFRS adjustments is MCh$4,579, which mainly represents reversal of write-offs of assets received in lieu of payments.

(4)

The total effect relates to IFRS adjustments of MCh$22,739, which stems from deferred taxes.

(5)

The total effect due to the elimination adjustments to conform the consolidated financial position data in assets is MCh$(128,730). In addition the total effect of IFRS adjustments in assets is MCh$(544,171), which mainly stems from differences in the calculation of allowances for loan losses, the acquisition of Citibank Chile and deferred taxes effects and settlement of transactions in the course of collection.

(6)

The total effect due to the elimination adjustments to conform the consolidated financial position data in liabilities is MCh$(128,730). In addition the total effect of IFRS adjustments in liabilities is MCh$(814,984), which mainly stems from provision for minimum dividends and differences in the calculation of allowances for ECL.

	As of December 31, 2021
	Retail			Wholesale			Treasury			Subsidiaries			Subtotal			Reclassifications and adjustments to conform IFRS				Total
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			Note	MCh$
Net interest income		1,084,191			478,807			6,479			(1,198	)		1,568,279			5,743				1,574,022
Net fees and commissions income		250,470			61,671			(1,864	)		160,507			470,784			(15,756	)			455,028
Other operating income		42,160			80,994			52,058			36,839			212,051			(7,016	)			205,035
Total operating revenue		1,376,821			621,472			56,673			196,148			2,251,114			(17,029	)	(1)		2,234,085
Provisions for Expected Credit losses		(259,229	)		(114,299	)		—			268			(373,260	)		354,088		(2)		(19,172	)
Depreciation and amortization		(62,721	)		(8,114	)		(365	)		(5,598	)		(76,798	)		—				(76,798	)
Other operating expenses		(562,599	)		(155,701	)		(3,538	)		(109,985	)		(831,823	)		24,201		(3)		(807,622	)
Income attributable to associates		(229	)		1,886			84			499			2,240			(447	)			1,793
Income before income taxes		492,043			345,244			52,854			81,332			971,473			360,813				1,332,286
Income taxes														(178,550	)		(97,419	)	(4)		(275,969	)
Income after income taxes														792,923			263,394				1,056,317

Assets		20,458,338			12,806,598			17,412,053			954,858			51,631,847			(482,299	)			51,149,548
Current and deferred taxes														440,040			(163,640	)			276,400
Total assets														52,071,887			(645,939	)	(5)		51,425,948

Liabilities		16,794,546			10,530,749			19,640,221			770,228			47,735,744			(1,241,051	)			46,494,693
Current and deferred taxes														113,129			(846	)			112,283
Total liabilities														47,848,873			(1,241,897	)	(6)		46,606,976

Reclassifications and adjustments to conform IFRS

(1)

The total effect due to the elimination adjustments to conform the total operating revenue is MCh$(20,857). In addition the total effect of IFRS adjustments is MCh$3,828, which mainly stems from the reclassification of interest on repurchase agreements and suspended interest recognition.

(2)

The total effect relates to IFRS adjustments of MCh$354,088, which mainly stems from differences in the calculation of allowances for ECL.

(3)

The total effect due to the elimination adjustments to conform other operating expenses is MCh$20,857. In addition the total effect of IFRS adjustments is MCh$3,344, which mainly represents reversal of write-offs of assets received in lieu of payments.

(4)

The total effect relates to IFRS adjustments of MCh$(97,419), which stems from deferred taxes.

(5)

The total effect due to the elimination adjustments to conform the consolidated financial position data in assets is MCh$(369,448). In addition the total effect of IFRS adjustments in assets is MCh$(276,491), which mainly stems from differences in the calculation of allowances for loan losses, the acquisition of Citibank Chile and deferred taxes effects and settlement of transactions in the course of collection.

(6)

The total effect due to the elimination adjustments to conform the consolidated financial position data in liabilities is MCh$(369,448). In addition the total effect of IFRS adjustments in liabilities is MCh$(872,449), which mainly stems from provision for minimum dividends and differences in the calculation of allowances for ECL.