The profits of Banco de Credito e Inversiones SA, or Bci, for the fourth quarter of 2017 slid 34.16% to 56.63 billion Chilean pesos from 86.00 billion pesos in the same period in 2016.
The Chilean lender attributed the decrease in profits to an adjustment done in deferred taxes for the City National Bank of Florida, which purchased TotalBank, and the Bci Miami branch in the United States, where they expected a one-off negative impact of about $51.5 million on the bank's financial statements for 2017, due to the tax reform in the U.S. However, Bci noted that it may rebound from the one-off adjustment in three years.
Operating expenses also increased 8.39% to 192.81 billion pesos from 177.88 billion pesos in the fourth quarter of 2016, mainly due to the bank's implementation of a digital transformation plan, under which the lender hired almost 400 staff across different areas such as mobile, technology and innovation. The figure also includes severance payments.
Net fees slid 6.58% to 72.04 billion pesos from 77.12 billion pesos year on year, due to the elimination of the emergency line charge, fewer pension payments, and also higher fee expenses for incentives and promotions, among others.
The ratio for loan-loss provisions to total loans went down to 1.62% from 1.64% in the same period in 2016. Provisions for loan losses ticked 9.91% higher to 66.47 billion pesos from 60.48 billion pesos.
However, the bank's total loan portfolio went up 9.59% to 24.711 trillion pesos, from 22.548 trillion pesos.
Bci's financial margin went up 8.85% to 247.92 billion pesos, mainly due to increases in interest adjustment income for mortgages, which went up 19.16% to 75.19 billion pesos from 63.10 billion pesos in 2016.
Exchange rate and operation income was up 5.32%, while other net operating income went up from a loss of 6.59 billion pesos a year ago to a profit of 2.41 billion pesos.
Return on average assets remained at 1.14%, while return on average equity slipped 4.26% to 14.04% year on year.
As of Jan. 31, US$1 was equivalent to 601.44 Chilean pesos.
