Higher fee and interest income as well as a sharp drop in provision expenses helped Banco del Estado de Chile book an 84.6% year-over-year increase in its attributable profit for the second quarter.
The Santiago-based bank posted quarterly net income attributable to owners of 70.98 billion Chilean pesos, jumping from 38.46 billion pesos from the prior-year quarter.
The company's net interest income grew 4.5% annually to about 213.77 billion pesos from 204.56 billion pesos. Its net interest margin improved to 3.7% from 3.2% in the first quarter and 3.3% a year earlier.
BancoEstado said fee income ticked 15.1% higher to 83.70 billion pesos from 72.74 billion pesos in the second quarter of 2018, driven by an increase in fees from collection and payment services and more fees from advisory services. Net income from inflation adjustments, meanwhile, more than doubled to 77.22 billion pesos.
The bank's provision expenses fell 18.7% year over year to 64.23 billion pesos from 79.03 billion pesos. The decline came as the company did not register any additional provisions in the three months through June, compared to additional provisions of 15.50 billion pesos in the year-ago quarter.
Operating expenses increased 16.3% to 217.65 billion pesos due to higher wages and a rise in depreciation and amortization expenditures.
At the close of the second quarter, the bank had a market share of 14.4% in Chile's loan market. Its total credit portfolio grew 7.2% in the 12 months through June to reach 24.751 trillion pesos, with consumer loans expanding 14.4% and mortgages up 7.9%.
Some asset quality deterioration accompanied the loan growth, however, as the bank's past-due loan ratio increased to 1.22% from 1.16% in the linked quarter and 1.06% a year earlier.
BancoEstado's BIS ratio improved to 11.1% from 10.9% year over year, while its return on average equity jumped to 28.2% from 19.0%.
As of Aug. 23, US$1 was equivalent to 716.24 Chilean pesos.
