XML 43 R20.htm IDEA: XBRL DOCUMENT

DEBT INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

12 Months Ended

Dec. 31, 2018

Debt Instruments At Fair Value Through Other Comprehensive Income

DEBT INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

NOTE 12

DEBT INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

I.	Debt instruments at fair value through other comprehensive income (FVOCI) - under IFRS 9

As of December 31, 2018 detail of debt instruments is as follows:

	As of December 31,
	2018	2017
	MCh$	MCh$
Chilean central bank and government securities
Chilean central bank bonds	657,096	-
Chilean central bank notes	56,719	-
Other Chilean central bank and government securities	1,207,221	-
Subtotal	1,921,036	-
of which sold under repurchase agreement	16,109	-
Other Chilean securities
Time deposits in Chilean financial institutions	2,693	-
Mortgage finance bonds of Chilean financial institutions	19,227	-
Other instruments issued in the country	2,907	-
Subtotal	24,827	-
of which sold under repurchase agreement	32,436	-
Foreign financial securities
Foreign Central Banks and Government securities	280,622	-
Other foreign financial securities	167,838	-
Subtotal	448,460	-
of which sold under repurchase agreement	-	-
Total	2,394,323	-

As of December 31, 2018 “Chilean central bank and government securities” guarantee derivatives transactions through Comder Contraparte Central S.A. in the local market for Ch$48,081, while “Foreign financial securities” guarantee derivatives transactions through London Clearing House (LCH) for Ch$58,892. Additionally, the Bank maintains guarantees with Euroclear for Ch$98,832 to comply with the initial margin required by European EMIR standard.

As of December 31, 2018 fair value throgh OCI included a cumulative net unrealised income of Ch$6,424 million, recoded as “valuation adjustment” in OCI, of which Ch$5,114 million are attributable to shareholders and Ch$1,310 million to non-controlling interest.

An analysis of changes in the fair value and the corresponding ECL is as follows:

	Stage1	Stage2	Stage3	TOTAL
	Collective	Collective	Collective	TOTAL
Gross carrying amount at January 1, 2018	2,574,546	-	-	2,574,546
New assets purchased	5,037,857	-	-	5,037,857
Transfers to stage 1	-	-	-	-
Transfers to stage 2	-	-	-	-
Transfers to stage 3	-	-	-	-
Assets derecognised or matured (excluding write offs)	(5,604,114)	-	-	(5,604,114)
Changes due to modifications not derecognised	-	-	-	-
Writte-off	-	-	-	-
Foreign Exchange adjustments	386,034	-	-	386,034
At 31 December 2018	2,394,323	-	-	2,394,323

	Stage1	Stage2	Stage3	TOTAL
	Collective	Collective	Collective	TOTAL
ECL at January 1, 2018	324	-	-	324
New assets purchased	634	-	-	634
Transfers to stage 1	-	-	-	-
Transfers to stage 2	-	-	-	-
Transfers to stage 3	-	-	-	-
Assets derecognised or matured (excluding write offs)	(705)	-	-	(705)
Changes due to modifications not derecognised	-	-	-	-
Writte-off	-	-	-	-
Foreign Exchange adjustments	5	-	-	5
At 31 December 2018	258	-	-	258

Gross profits and losses realized on the sale of available for sale investments as of December 31, 2018 is as follows:

		MCh$
Sale of available for sale investments generating realized profits		3,505,266
Realized profits		5,286
Sale of available for sale investments generating realized losses		709,371
Realized losses		6,788

II.

Available for sale investments - under IAS 39

	As of December 31,
	2018	2017
	MCh$	MCh$
Chilean central bank and government securities
Chilean central bank bonds	-	816,331
Chilean central bank notes	-	330,952
Other Chilean central bank and government securities	-	1,115,518
Subtotal	-	2,262,801
Other Chilean securities
Time deposits in Chilean financial institutions	-	2,361
Mortgage finance bonds of Chilean financial institutions	-	22,312
Other instruments issued in the country	-	3,000
Subtotal	-	27,673
Foreign financial securities
Foreign Central Banks and Government securities	-	132,822
Other foreign financial securities	-	151,250
Subtotal	-	284,072
Total	-	2,574,546

As of December 31, 2017, the line item Chilean central bank and government securities item includes securities sold under repurchase agreements to clients and financial institutions for Ch$241,995 million. Additionally, as of December 31, 2017 these instruments guarantee derivatives transactions through Comder Contraparte Central S,A, for Ch$42,910.

As of December 31, 2017, the line item Other Chilean securities includes securities sold to customers and financial institutions under repurchase agreements totaling Ch$1,156 million.

As of December 31, 2017, the line item Foreign financial securities item includes securities sold under repurchase agreements to clients and financial institutions for Ch$24,910 million. Additionally, this instruments guarantee derivatives transactions through London Clearing House (LCH) for Ch$48,106 million. In order to comply with the initial margin specified in the European EMIR standard, the Bank maintained securities in guaranteed with Euroclear for Ch$33,711 million.

As of December 31, 2017 available for sale investments included a cumulative net unrealized income of Ch$1,855 million, recorded as a “Valuation adjustment” in other comprenhensive income, distributed between Ch$459 million attributable to the shareholders of the Bank and Ch$1,396 million attributable to non-controlling interest.

Gross profits and losses realized on the sale of available for sale investments as of December 31, 2017 and 2016, are as follows:

	For the years ended December 31,
		2017	2016
		MCh$	MCh$
Sale of available for sale investments generating realized profits		6,469,344	6,522,549
Realized profits		4,867	12,333
Sale of available for sale investments generating realized losses		466,732	346,906
Realized losses		3	132

The Bank evaluated those instruments with unrealized losses as of December 31, 2017 and 2016 and concluded they were not impaired. This review consisted of evaluating the economic reasons for any declines, the credit ratings of the securities’ issuers, and the Bank’s intention and ability to hold the securities until the unrealized loss is recovered. Based on this analysis, the Bank believes that there were no significant or prolonged declines nor changes in credit risk which would cause impairment in its investment portfolio, since most of the decline in fair value of these instruments was caused by market conditions which the Bank considers to be temporary. All of the instruments that have unrealized losses as of December 31, 2017 and 2016, were not in a continuous unrealized loss position for more than one year.

The following charts show the available for sale investments cumulative unrealized profit and loss, as of December 31, 2017:

	Less than 12 months				More than 12 months				Total
	Acquisition cost	Fair value	Unrealized profit	Unrealized loss	Acquisition cost	Fair value	Unrealized profit	Unrealized loss	Acquisition cost	Fair value	Unrealized profit	Unrealized loss
	MCh$	MCh$	MCh$	MCh$	MCh$	MCh$	MCh$	MCh$	MCh$	MCh$	MCh$	MCh$

Chilean central bank and government securities
Chilean central bank Bonds	816,164	816,331	5,513	(5,346)	-	-	-	-	816,164	816,331	5,513	(5,346)
Chilean central bank notes	330,923	330,952	30	(1)	-	-	-	-	330,923	330,952	30	(1)
Other Chilean central bank and government securities	1,117,447	1,115,518	2,960	(4,888)	-	-	-	-	1,117,447	1,115,518	2,960	(4,888)
Subtotal	2,264,534	2,262,801	8,503	(10,235)	-	-	-	-	2,264,534	2,262,801	8,503	(10,235)

Other Chilean securities
Time deposits in Chilean financial institutions	2,361	2,361	-	-	-	-	-	-	2,361	2,361	-	-
Mortgage finance bonds of Chilean financial institutions	21,867	22,312	445	-	-	-	-	-	21,867	22,312	445	-
Chilean financial institution bonds	-	-	-	-	-	-	-	-	-	-	-	-
Chilean corporate bonds	-	-	-	-	-	-	-	-	-	-	-	-
Other Chilean securities	220	3,000	2,780	-	-	-	-	-	220	3,000	2,780	-
Subtotal	24,448	27,673	3,225	-	-	-	-	-	24,448	27,673	3,225	-

Foreign financial securities
Foreign central banks and government securities	133,301	132,822	847	(1,326)	-	-	-	-	133,301	132,822	847	(1,326)
Other foreign financial securities	150,408	151,250	1,097	(256)	-	-	-	-	150,408	151,250	1,097	(256)
Subtotal	283,709	284,072	1,944	(1,582)	-	-	-	-	283,709	284,072	1,944	(1,582)

Total	2,572,691	2,574,546	13,672	(11,817)	-	-	-	-	2,572,691	2,574,546	13,672	(11,817)