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Banco de Chile posts 14.8% rise in Q4'17 profit as loan-loss provisions slide

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Banco de Chile posts 14.8% rise in Q4'17 profit as loan-loss provisions slide

Banco de Chile on Feb. 1 posted net income attributable to its owners of 142.35 billion Chilean pesos for the fourth quarter of 2017, 14.8% higher year over year from 124.03 billion pesos.

Quarterly earnings per share came to 1.43 pesos, compared to 1.27 pesos in the year-ago period.

Net interest income was slightly up 4.2% yearly to 318.87 billion pesos, from 306.11 billion pesos. Net income from fees and commissions were also up 6.6% to 86.47 billion pesos. As a result, net interest margin slightly increased to 4.37% from 4.35% a year ago.

Meanwhile, total operating expenses reached 202.54 billion pesos, 6.1% higher annually from 190.86 billion pesos.

However, loan loss provisions for the bank stood at 59.32 billion pesos in the fourth quarter, a 32.0% yearly drop from 87.28 billion pesos.

Banco de Chile attributed the drop in provisions to a credit quality improvement of approximately 25.5 billion pesos, mainly due to the retail banking segment that posted higher credit risk expenses in the year-ago quarter. The bank also had a positive foreign exchange impact on dollar-denominated loan loss allowances of about 6.1 billion pesos, due to higher appreciation in the Chilean peso in the quarter compared to the year-ago period.

Net total loans to customers reached about 24.881 trillion pesos as of December 2017, a slight 0.4% uptick from 24.776 trillion pesos as of December 2016. Total past due loans as a portion of total loans was 1.19% in the quarter, up from 1.15% a year earlier.

Return on average total assets stood at 1.77% in the quarter, compared to 1.59% a year earlier. Return on average equity was also up to 18.56% from 17.17% a year earlier.

For full year 2017, Banco de Chile recorded net income of 576.01 billion pesos, up 4.3% annually from 552.25 billion pesos.

As of Jan. 31, US$1 was equivalent to 601.44 Chilean pesos.