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BancoEstado's Q1 profit slides 18.7% as inflation adjustment income plummets


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BancoEstado's Q1 profit slides 18.7% as inflation adjustment income plummets

Banco del Estado de Chile's attributable profit for the first quarter fell 18.7% year over year as net income from inflation adjustments plummeted and income tax expenses jumped.

The Santiago-based bank posted net income attributable to owners of about 36.33 billion Chilean pesos for the three-month period, down from 44.67 billion pesos in the year-ago period.

The state-run lender's net interest income reached 249.07 billion pesos during the quarter, up 14.9% from 216.85 billion pesos in the linked quarter and an increase of 22.7% from 202.91 billion pesos in the year-ago period. The bank's net interest margin declined to 3.2% from 3.5% in the previous quarter and 3.3% a year earlier.

Fee income ticked 7.6% higher annually to 80.81 billion pesos. However, these gains were partly offset by a 93.1% decline in net income from inflation adjustments, which declined to 2.32 billion pesos from 33.84 billion pesos a year ago.

BancoEstado's provision expenses fell 10.3% to 46.77 billion pesos from 52.12 billion pesos in the prior-year quarter, mainly "due to a decrease of our additional (voluntary) provisions for economic cyclical and portfolio concentration," the company said.

Operating expenses increased 0.8% year over year to 203.67 billion pesos. The bank also booked income tax expenses of 62.68 billion pesos in the first quarter, up 90.1% from 32.98 billion pesos a year earlier.

The bank's total loan portfolio expanded 7.2% in the 12 months through March 31 to reach about 23.999 trillion pesos. Commercial loans grew 5.4%, while consumer loans and mortgages increased 15.5% and 7.6%, respectively.

BancoEstado's nonperforming loans represented 3.64% of total loans at the end of the first quarter, up from 3.63% in the linked quarter and 3.30% a year earlier.

The bank's return on average equity rose to 23.7% from 19.4% in the year-ago period.

As of May 24, US$1 was equivalent to 694.68 Chilean pesos.