Banco de Chile (CHILE) Q1 2025 earnings summary

Executive summary

• Net income for 1Q25 reached CLP 328,944 million, up 10.5% year-over-year, with ROAE of 23.3%, maintaining market leadership and strong profitability.

• Results were driven by robust margins, improved asset quality, lower expected credit losses, and strict cost control.

• Strategic focus on digital transformation, customer-centric initiatives, and operational efficiency, with measurable progress in key targets.

• Banco de Chile continues to lead in asset quality, coverage, and efficiency among peers.

• Retail Banking was the main contributor to pre-tax income, with a 13.2% annual increase, while Wholesale Banking saw a 2.8% decrease.

Financial highlights

• Operating revenues for 1Q25 were CLP 779,216 million, nearly flat year-over-year, with net fees and commissions up 14.1% and customer income up 4.3%.

• Net interest margin stood at 4.96%, and operating margin at 6.7%, both above industry peers.

• Operating expenses decreased 1% year-over-year, with efficiency ratio at 36.1%.

• Cost of risk dropped to 0.93%, and expected credit losses were CLP 90 billion, 20% lower year-on-year.

• Return on average equity reached 23.25%.

Outlook and guidance

• GDP growth for Chile expected at 2% in 2025, with inflation forecasted to end below 4%.

• Net interest margin guidance increased to around 4.7%, reflecting confidence in loan mix and margin resilience.

• Loan growth expected to slightly outpace the industry, targeting 4.0–4.5% nominal growth, led by consumer and mortgage loans.

• Medium-term ROE target revised up to around 20%, aiming to remain the most profitable bank in Chile.

• The bank expects to maintain strong capital and liquidity metrics, with no need for new subordinated bond issuances in 2025.