XML 70 R45.htm IDEA: XBRL DOCUMENT v3.25.0.1
Fair Value of Financial Assets and Liabilities
 12 Months Ended
Dec. 31, 2024
Interest income and interest expense for financial assets or financial liabilities not at fair value through profit or loss [abstract]  
Fair Value of Financial Assets and Liabilities FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement of fair value assumes the sale transaction of an asset or the transference of the liability happens within the main asset or liability market, or the most advantageous market for the asset or liability.
For financial instruments with no available market prices, fair values have been estimated by using recent transactions in analogous instruments, and in the absence thereof, the present values or other valuation techniques based on mathematical valuation models sufficiently accepted by the international financial community. In the use of these models, consideration is given to the specific particularities of the asset or liability to be valued, and especially to the different kinds of risks associated with the asset or liability.
These techniques are significantly influenced by the assumptions used, including the discount rate, the estimates of future cash flows and prepayment expectations. Hence, the fair value estimated for an asset or liability may not coincide exactly with the price at which that asset or liability could be delivered or settled on the date of its valuation and may not be justified in comparison with independent markets.
Except as detailed in the following table, management considers that the carrying amounts of financial assets and financial liabilities recognised in the consolidated financial statements approximate their fair values.
Determination of fair value of financial instruments
Below is a comparison between the value at which the Bank’s financial assets and liabilities are recorded and their fair value as of December 31, 2024 and 2023:
As of December 31,
20242023
Book valueFair valueBook valueFair value
MCh$MCh$MCh$MCh$
Assets
Financial assets for trading at FVTPL
Financial derivative contracts12,309,770 12,309,770 10,119,486 10,119,486 
Debt financial instruments329,327 329,327 98,308 98,308 
Financial assets at FVOCI    
Debt financial instrument2,687,485 2,687,485 4,536,025 4,536,025 
Other financial instruments74,903 74,903 105,257 105,257 
Financial derivative contracts for hedge accounting843,628 843,628 605,529 605,529 
Financial assets at amortised cost    
Rights under repurchase agreements153,087 153,087 – – 
Debt financial instruments5,176,005 5,207,697 8,176,895 7,927,729 
Interbank loans31,282 31,307 68,438 68,438 
Loans and account receivable from customers40,099,872 40,597,772 39,593,457 39,134,700 
Guarantee deposits (margin accounts)1,847,101 1,847,101 2,238,900 2,238,900 
     
Liabilities    
Financial liabilities for trading at FVTPL    
Financial derivative contracts12,155,024 12,155,024 9,521,575 9,521,575 
Financial derivative contracts for accounting hedges898,394 898,394 2,466,767 2,466,767 
Financial liabilities at amortised cost    
Deposits and other demand liabilities14,260,609 14,260,609 13,537,826 13,537,826 
Time deposits and other time liabilities17,098,625 17,249,068 16,137,942 16,326,525 
Interbank borrowings4,337,947 4,357,838 10,366,499 10,190,640 
Issued debt instruments8,133,275 7,998,659 8,001,045 7,751,672 
Other financial liabilities200,541 200,541 296,273 296,273 
Regulatory capital financial instruments1,910,697 1,945,784 1,813,938 1,825,819 
Guarantees received (margin accounts)1,832,345 1,832,345 1,081,226 1,081,226 
NOTE 36 - FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES. continued
The fair value approximates the carrying amount of the following line items due to their short-term nature: cash and deposits-banks, cash items in process of collection and investments under resale or repurchase agreements.
In addition, the fair value estimates presented above do not attempt to estimate the value of the Bank’s profits generated by its business activity, nor its future activities, and accordingly, they do not represent the Bank’s value as a going concern. Below is a detail of the methods used to estimate the financial instruments’ fair value.
a.Financial assets held for trading and Debt instruments at FVOCI
The estimated fair value of these financial instruments was established using market values or estimates from an available dealer, or quoted market prices of similar financial instruments. Investments are evaluated at recorded value since they are considered as having a fair value not significantly different from their recorded value. To estimate the fair value of debt investments or representative values in these lines of businesses, we take into consideration additional variables and elements, as long as they apply, including the estimate of prepayment rates and credit risk of issuers.
b.Loans and accounts receivable at amortised cost and Interbank
Fair value of commercial, mortgage and consumer loans and credit cards are measured through a discounted cash flow (DCF) analysis. We use current market interest rates considering product, term, amount and similar loan quality. Fair value of loans with 90 days or more of delinquency are measured by means of the market value of the associated guarantee, minus the rate and term of expected payment. For variable rate loans whose interest rates change frequently (monthly or quarterly) and that are not subjected to any significant credit risk change, the estimated fair value is based on their book value.
c.Deposits
Disclosed fair value of deposits that do not bear interest and saving accounts is the amount payable at the reporting date and, therefore, equals the recorded amount. Fair value of time deposits is calculated through a discounted cash flow calculation that applies current interest rates from a monthly calendar of scheduled maturities in the market.
d.Short and long term issued debt instruments
The fair value of these financial instruments is calculated by using a discounted cash flow analysis based on the current incremental lending rates for similar types of loans having similar maturities.
e.Financial derivative contracts for trading and hedge accounting
The estimated fair value of financial derivative contracts is calculated using the prices quoted on the market for financial instruments having similar characteristics.
The fair value of interest rate swaps represents the estimated amount that the Bank determines as exit price in accordance with IFRS 13. If there are no quoted prices from the market (either direct or indirect) for any derivative instrument, the respective fair value estimates have been calculated by using models and valuation techniques such as Black-Scholes, Hull, and Monte Carlo simulations, taking into consideration the relevant inputs/outputs such as volatility of options, observable correlations between underlying assets, counterparty credit risk, implicit price volatility, the velocity with which the volatility reverts to its average value, and the straight-line relationship (correlation) between the value of a market variable and its volatility, among others.
Measurement of fair value and hierarchy
IFRS 13 - Fair Value Measurement, provides a hierarchy of reasonable values which separates the inputs and/or valuation technique assumptions used to measure the fair value of financial instruments. The hierarchy reflects the significance of the inputs used in making the measurement. The three levels of the hierarchy of fair values are the following:
•Level 1: the inputs are quoted prices (unadjusted) on active markets for identical assets and liabilities that the Bank can access on the measurement date
•Level 2: inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
•Level 3: inputs are unobservable inputs for the asset or liability i.e. they are not based on observable market data
NOTE 36 - FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The hierarchy level within which the fair value measurement is categorized in its entirety is determined based on the lowest level of input that is significant to the fair value measurement in its entirety.
The best evidence of a financial instrument’s fair value at the initial time is the transaction price.
In cases where quoted market prices cannot be observed, Management makes its best estimate of the price that the market would set using its own internal models which in most cases use data based on observable market parameters as a significant input (Level 2) and, in very specific cases, significant inputs not observable in market data (Level 3), various techniques are employed to make these estimates, including the extrapolation of observable market data.
Financial instruments at fair value and determined by quotations published in active markets (Level 1) include:
-Chilean Government and Department of Treasury bonds
-Foreign instruments
-Mutual funds
Instruments which cannot be 100% observable in the market are valued according to other inputs observable in the market (Level 2).
The following financial instruments are classified under Level 2:
Type of
 financial instrument		Model
 used in valuation		Description of unobservable inputs
● Mortgage and private bonds Present Value of Cash Flows ModelInternal Rates of Return (“IRRs”) are provided by RiskAmerica, according to the following criterion: If, at the valuation day, there are one or more valid transactions at the Santiago Stock Exchange for a given nemotechnic, the reported rate is the weighted average amount of the observed rates. In the case there are no valid transactions for a given mnemonic on the valuation day, the reported rate is the IRR base from a reference structure, plus a spread model based on historical spread for the same item or similar ones.
● Time depositsPresent Value of Cash Flows ModelIRRs are provided by RiskAmerica, according to the following criterion: If, at the valuation day, there are one or more valid transactions at the Santiago Stock Exchange for a given mnemonic, the reported rate is the weighted average amount of the observed rates. In the case there are no valid transactions for a given mnemonic on the valuation day, the reported rate is the IRR base from a reference structure, plus a spread model based on issuer curves.
● Constant Maturity Swaps (CMS), FX and Inflation Forward (Fwd) , Cross Currency Swaps (CCS), Interest Rate Swap (IRS)Present Value of Cash Flows ModelIRRs are provided by ICAP, GFI, Tradition, and Bloomberg according to this criterion: With published market prices, a valuation curve is created by the bootstrapping method and is then used to value different derivative instruments.
● FX OptionsBlack-ScholesFormula adjusted by the volatility simile (implicit volatility), Prices (volatility) are provided by BGC Partners, according to this criterion: With published market prices, a volatility parameter is created by interpolation and then these volatilities are used to value options.
● Guarantee deposits, guarantee received (Threshold)Present Value of Cash Flows ModelCollateral associated to derivatives financial contracts: Average trading swap (CMS), FX and inflation Forward, Cross Currency Swap (CCS), Interest Rate Swap (IRS) y FX options.
In limited occasions significant inputs not observable in market data are used (Level 3). Several techniques are used to perform these estimates, including extrapolation of observable market data or a mix of observable data.
NOTE 36 - FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES. continued
The following financial instruments are classified under Level 3:
Type of
financial instrument		Model
used in valuation		Description of unobservable inputs
● Caps/Floors/SwaptionsBlack Normal model for Cap/Floors and SwaptionsThere is unobservable input of implied volatility.
Black – ScholesThere is unobservable input of implied volatility.
Hull-WhiteHybrid HW model for rates and Brownian motion for FX. There is unobservable volatility input
FRA ImplicitStart FW not supported by Murex (platform) due to UF FW estimation
● CCS, IRS, CMS at TAB ratesPresent Value of Cash Flows Model - Valuation obtained using interest curve interpolating to maturity of flows, however, TAB is not a directly observable variable nor correlated to any market input. - Valuation using prices of instruments with similar characteristics plus a liquidity penalty rate.
● CCS (maturity> 30 years)Present Value of Cash Flows ModelThe rates are provided by ICAP, GFI, Tradition and Bloomberg according following criteria: Using the published market prices, the valuation curve is constructed using the bootstrapping method and this curve is then used to value the different derivatives.
● Debt instruments (in our case, low liquidity bonds)Risk-free spread ModelStochastic dynamic model to obtain discount rate.
● Loans and account receivable at FVOCIPresent Value of Cash Flows ModelMeasured by discounting estimated cash flow using the interest rate of new contracts.
The Bank does not believe that any change in unobservable inputs with respect to level 3 instruments would result in a significantly different fair value measurement.
The following table presents the assets and liabilities that are measured at fair value on a recurrent basis:
 Fair value measurement
As of December 31,2024Level 1Level 2Level 3
 MCh$MCh$MCh$MCh$
Assets
Financial assets for trading at FVTPL
Financial derivative contracts12,309,770 - 12,304,162 5,608 
Debt financial instruments329,327 329,327 - - 
Financial assets at FVOCI    
Debt financial instrument2,687,485 2,682,479 - 5,006 
Other financial instruments74,903   74,903 
Financial derivative contracts for hedge accounting843,628 - 843,628 - 
Guarantee deposits (margin accounts)1,847,101 - 1,847,101 - 
Total18,092,214 3,011,806 14,994,891 85,517 
Liabilities    
Financial liabilities for trading at FVTPL    
Financial derivative contracts12,155,024 - 12,155,021 3 
Financial derivative contracts for accounting hedges898,394 - 898,394 - 
Guarantees received (margin accounts)1,832,345 - 1,832,345 - 
Total14,885,763 - 14,885,760 3 
NOTE 36 - FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES. continued
Fair value measurement
As of December 31,2023Level 1Level 2Level 3
MCh$MCh$MCh$MCh$
Assets
Financial assets for trading at FVTPL
Financial derivative contracts10,119,486 - 10,119,486 - 
Debt financial instruments98,308 98,308 - - 
Financial assets at FVOCI    
Debt financial instrument4,536,025 4,528,915 6,656 454 
Other financial instruments105,257 - - 105,257 
Financial derivative contracts for hedge accounting605,529 - 605,529 - 
Guarantee deposits (margin accounts)2,238,900  2,238,900 - 
Total17,703,505 4,627,223 12,970,571 105,711 
Liabilities    
Financial liabilities for trading at FVTPL    
Financial derivative contracts9,521,575 - 9,521,575 - 
Financial derivative contracts for accounting hedges2,466,767 - 2,466,767 - 
Guarantees received (margin accounts)1,081,226 - 1,081,226 - 
Total13,069,568 - 13,069,568 - 
The following table presents assets or liabilities which are not measured at fair value in the statements of financial position but for which the fair value is disclosed:
Fair value measurement
As of December 31,2024Level 1Level 2Level 3
MCh$MCh$MCh$MCh$
Assets
Financial assets at amortised cost
Debt financial instruments5,207,697 5,207,697 -  
Interbank loans31,307 - - 31,307 
Loans and account receivable from customers40,597,772 - - 40,597,772 
Total45,836,776 5,207,697 - 40,629,079 
Liabilities    
Financial liabilities at amortised cost    
Deposits and other demand liabilities14,260,609 -  14,260,609 
Time deposits and other time liabilities17,249,068 - 17,249,068 - 
Interbank borrowings4,357,838 - 4,357,838 - 
Issued debt instruments7,998,659 - 7,998,659 - 
Other financial liabilities200,541 - 200,541 - 
Regulatory capital financial instruments1,945,784 - 1,945,784 - 
Total46,012,499 - 31,751,890 14,260,609 
NOTE 36 - FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES. continued
Fair value measurement
As of December 31,2023Level 1Level 2Level 3
MCh$MCh$MCh$MCh$
Assets
Financial assets at amortised cost
Debt financial instruments7,927,729 7,927,729 - - 
Interbank loans68,438 - - 68,438 
Loans and account receivable from customers39,134,700 - - 39,134,700 
Total47,130,867 7,927,729 - 39,203,138 
Liabilities    
Financial liabilities at amortised cost    
Deposits and other demand liabilities13,537,826 - - 13,537,826 
Time deposits and other time liabilities16,326,525 - 16,326,525 - 
Interbank borrowings10,190,640 - 10,190,640 - 
Issued debt instruments7,751,672 - 7,751,672 - 
Other financial liabilities296,273 - 296,273 - 
Regulatory capital financial instruments1,825,819 - 1,825,819 - 
Total49,928,755 - 36,390,929 13,537,826 
The fair values of other assets and other liabilities approximate their carrying values.
The methods and assumptions to estimate the fair value are defined below:
-Loans and amounts due from credit institutions and from customers – Fair value are estimated for groups of loans with similar characteristics. The fair value was measured by discounting estimated cash flow using the interest rate of new contracts. That is, the future cash flow of the current loan portfolio is estimated using the contractual rates, and then the new loans spread over the risk-free interest rate are incorporated to the risk-free yield curve in order to calculate the loan portfolio fair value. In terms of behavior assumptions, it is important to underline that a prepayment rate is applied to the loan portfolio, thus a more realistic future cash flow is achieved.
-Deposits and interbank borrowings – The fair value of deposits was calculated by discounting the difference between the cash flows on a contractual basis and current market rates for instruments with similar maturities. For variable-rate deposits, the carrying amount was considered to approximate fair value.
-Issued debt instruments and other financial liabilities – The fair value of long-term loans was estimated by cash flow discounted at the interest rate offered on the market with similar terms and maturities.
The valuation techniques used to estimate each level are defined in Note 1,i)
There were no transfers between levels 1 and 2 for the year ended December 31, 2024 and 2023.
The table below shows the effect, at December 31, 2024 and 2023, on the fair value of the main financial instruments classified as Level 3 of a reasonable change in the assumptions used in the valuation. This effect was determined by a sensitivity analysis under a 1bp scenario, detailed in the following table:
As of December 31, 2024
Instrument Level 3Valuation techniqueMain unobservable
 inputs		Impacts (in MCh$)
Sens, -1bp Unfavorable
 scenario		Impacts (in MCh$)
Sens, +1bp Favorable
 scenario
Financial derivatives contracts - FX optionsFX option pricing modelVolatility(4.16)%4.16%
Financial derivatives contracts - CCSDiscounted Cash FlowsCredit spread(12.33)%12.33%
Debt financial instruments at FVOCIDiscounted Cash FlowsObservability(1.08)%1.08%
Other financial instruments at FVOCI - mortgage loansDiscounted Cash FlowsObservability(25.15)%25.15%
Other financial instruments at FVOCI - commercial loansDiscounted Cash FlowsInterest rate curve(147.93)%147.93%
NOTE 36 - FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES. continued
As of December 31, 2023
Instrument Level 3Valuation techniqueMain unobservable inputsImpacts (in MCh$)
Sens, -1bp Unfavorable scenario		Impacts (in MCh$)
Sens, +1bp Favorable scenario
Financial derivatives contractsPresent Value methodCurves on TAB (1)––
Debt financial instruments at FVOCIInternal rate of return methodBR UF (2)–0.29
(1)TAB: “Tasa Activa Bancaria” (Active Bank Rate). Average interest rates on 30, 90, 180 and 360 day deposits published by the Chilean Association of Banks and Financial Institutions (ABIF) in nominal currency (Chilean peso) and in real terms, adjusted for inflation (in Chilean unit of account (Unidad de Fomento - UF)).
(2)BR: “Bonos de Reconocimiento” (Recognition Bonds). The Recognition Bond is an instrument of money provided by the State of Chile to workers who joined the new pension system, which began operating since 1981.
The following table presents the Bank’s activity for assets and liabilities measured at fair value on a recurrent basis using unobserved significant inputs (Level 3) as of December 31, 2024, 2023 and 2022:
Assets Liabilities
MCh$ MCh$
As of January 1, 2024105,711 - 
Total realized and unrealized profits (losses)
Included in statements of income(19)- 
Included in other comprehensive income5,015 - 
Purchases, issuances, and loans (net)(35,802)2 
Level transfer10,612 1 
As of December 31, 202485,517 3 
Total profits or losses included in comprehensive income for 2024 that are attributable to change in unrealized profit (losses) related to assets or liabilities as of December 31, 2024(20,194)3 
Assets Liabilities
MCh$ MCh$
As of January 1, 2023142,776 - 
Total realized and unrealized profits (losses)  
Included in statements of income(19)- 
Included in other comprehensive income9,352 - 
Purchases, issuances, and loans (net)(46,398)- 
Level transfer- - 
As of December 31, 2023105,711 - 
Total profits or losses included in comprehensive income for 2023 that are attributable to change in unrealized profit (losses) related to assets or liabilities as of December 31, 2023(37,065)- 
Assets Liabilities
MCh$ MCh$
As of January 1, 2022102,426 - 
Total realized and unrealized profits (losses)  
Included in statements of income139,848 - 
Included in other comprehensive income(99,498)- 
Purchases, issuances, and loans (net)- - 
Level transfer- - 
As of December 31, 2022142,776 - 
Total profits or losses included in comprehensive income for 2022 that are attributable to change in unrealized profit (losses) related to assets or liabilities as of December 31, 202240,350 - 
NOTE 36 - FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES. continued
The realized and unrealized profits (losses) included in comprehensive income for 2024 and 2023, in the assets and liabilities measured at fair value on a recurrent basis through unobservable market data (Level 3) are recorded in the Statements of Comprehensive Income.
The potential effect as of December 31, 2024 and 2023 on the valuation of assets and liabilities valued at fair value on a recurrent basis through unobservable significant inputs (level 3), generated by changes in the principal assumptions if other reasonably possible assumptions that are less or more favorable were used, is not considered by the Bank to be significant.
The following tables show the financial instruments subject to compensation in accordance with IAS 32, for 2024 and 2023:
As of December 31, 2024
On-balance sheet amounts with netting agreementsRemaining financial
 instruments not linked,
 nor subject to neeting
 agreements		Statements of
 Financial Position
 balances
Gross
 amounts		Compensated
in balance		Net amount presented
 in balance
Ch$ MillionCh$ MillionCh$ MillionCh$ MillionCh$ Million
Financial instruments Assets
Financial derivative contracts and hedge accounting (1)12,942,081 - 12,942,081 221,652 13,163,733 
Loans and accounts receivable and interbank loans (2)- - - 40,109,498 40,109,498 
Total12,942,081 - 12,942,081 40,331,150 53,273,231 
Liabilities     
Financial derivative contracts and hedge accounting12,738,714 - 12,738,714 321,207 13,059,921 
Investments under resale agreements276,588 - 276,588 - 276,588 
Deposits and interbank borrowings- - - 35,697,181 35,697,181 
Total13,015,302 - 13,015,302 36,018,388 49,033,690 
(1)Derivatives contract have guarantees associated for assets Ch$1,840,673 million and liabilities Ch$1,594,111 million.
(2)Loans and accounts receivable and interbank loans at amortised cost
As of December 31, 2023
On-balance sheet amounts with netting agreementsRemaining financial
 instruments not subject to neeting agreements		Amount in
 Statements of
 Financial Position
Gross
 amounts		Compensated
in balance		Net amount presented
 in balance
Ch$ MillionCh$ MillionCh$ MillionCh$ MillionCh$ Million
Financial instruments Assets
Financial derivative contracts and hedge accounting (1)10,575,817 - 10,575,817 149,198 10,725,015 
Loans and accounts receivable and interbank loans (2)- - - 39,657,783 39,657,783 
Total10,575,817 - 10,575,817 39,806,981 50,382,798 
Liabilities     
Financial derivative contracts and hedge accounting11,732,137 - 11,732,137 256,205 11,988,342 
Investments under resale agreements282,584 - 282,584 - 282,584 
Deposits and interbank borrowings (3)- - - 40,042,267 40,042,267 
Total12,014,721 - 12,014,721 40,298,472 52,313,193 
(1)Derivatives contract have guarantees associated for aseets Ch$2,225,820 million and liabilities Ch$839,201 million.
(2)Loans and accounts receivable and interbank loans at amortised cost
(3)Include Deposits and other demand liabilities, Time deposits and other time liabilities and interbank borrowings
NOTE 36 - FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES. continued

The Bank, in order to reduce its credit exposure in its financial derivative operations, has entered into collateral contracts with its counterparties, in which it establishes the terms and conditions under which they operate. In terms collateral (received/delivered) operates when the net of the fair value of the financial instruments held exceed the thresholds defined in the respective contracts.
As of December 31, 2024As of December 31, 2023
Financial derivative contractsAssetsLiabilityAssetsLiability
MCh$MCh$MCh$MCh$
Financial derivative contracts with collateral agreement threshold equal to zero12,081,545 11,782,472 9,802,491 10,836,243 
Financial derivative contracts with non-zero threshold collateral agreement850,201 949,739 773,325 895,894 
Financial derivative contracts without collateral agreement221,652 321,207 149,199 256,205 
Total13,153,398 13,053,418 10,725,015 11,988,342