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BancoEstado books 23.3% rise in Q4'18 profit; provisions rise

Banco del Estado de Chile posted a 23.3% jump in its fourth-quarter 2018 profit as markedly higher fee income and profit from inflation adjustments offset a sharp increase in provision expenses.

The state-owned Chilean lender recorded net income attributable to owners of 42.41 billion pesos for the three-month period, up from 34.41 billion pesos in the year-ago period.

Net interest income came to 216.85 billion pesos, up 3.5% from 209.46 billion pesos in the linked quarter and 10.7% higher than the 195.89 billion pesos booked in the fourth quarter of 2017. The bank's net interest margin also expanded to 3.5% from 3.3% in the preceding quarter and 3.2% a year ago.

Fee income increased 27.4% year over year to 83.81 billion pesos while net financial transactions rose 20.0% to 28.65 billion pesos. A 67.7% rise in net income from inflation adjustments, which hit 48.22 billion pesos, also anchored the bank's results.

On the other hand, BancoEstado's provision expense surged 143.2% to reach 58.72 billion pesos, as the bank increased its additional voluntary provisions for economic cyclical and portfolio concentration. Nonperforming loans ticked to 3.63% of total loans in the fourth quarter, up from 3.50% three months earlier and 3.09% a year ago.

Operating expenses also jumped 92.9% to 11.79 billion pesos.

The bank's total loans hit 23.935 trillion pesos at the end of the fourth quarter, up 6.2% from a year ago.

Return on average equity was 20.1% in the fourth quarter, down from 26.4% in the linked quarter but up from 18.1% a year earlier.

As of March 21, US$1 was equivalent to 669.58 Chilean pesos.