In a market peppered with other well-positioned banks, Banco de
Chile remains one of the country¹s strongest, with a
432-branch network and 1.7 million customers some 22% of
the Chilean workforce along with a solid funding
structure and asset quality.
It is the country¹s largest bank by a host of measures
including net income, return on average capital, total loans.
Though it is not the country¹s largest bank by assets,
with total assets of $44.9 billion, Banco de Chile is the most
profitable, with a return on equity of 23% as of June, and
return on assets of 2.1%.
Like many countries in the region, Chile has maintained
robust economic growth against the backdrop of slowing global
output. GDP expectations of between 4.8% and 5.0% for 2012, and
levels of growth seen around 4.5% for the next year paint an
encouraging picture says Pedro Samhan, Banco de Chile¹s
Cooling economic growth, will mean that ³the banking
sector will continue growing, but at a slower pace than it has
grown during the last four months,² Samhan says.
Banco de Chile is focused on expanding its retail business
via new product offerings, a new internet delivery platform and
updated mobile banking application. Meanwhile, the small and
medium enterprise segment has also been an area of competitive
advantage for the bank, says Samhan, as it looks to strengthen
customer loyalty to maintain market leadership.
In the first half of 2012, Banco de Chile led in development
agency-backed Corfo (Chilean Economic Development Agency)
guarantees, with 190 billion pesos in funding. Credit cards and
retail mortgage loans are an emphasis as well, as they are key
to relationship building with customers, the bank says.
Banco de Chile¹s commercial strategy is to keep growing
its retail business and increasing its profitability in the
wholesale segment, while on the retail side, it will continue
to expand in consumer loans and fee products, he says. And on
the wholesale side, the bank will look to increase
cross-selling as it looks to grow in areas such as foreign
trade letter of credit, cash management, and treasury
³Our focus will continue to be to expand in the
consumer segment, because we still have some room to
grow,² Samhan says. ³This is the most profitable
business.² The bank will keep looking for new customer
segments in retail and wholesale and establish metrics for
measuring quality, and seek to provide competitive service,
inclusive of best practices.
As it grows, the bank¹s funding has become more
diversified. It registered a bond line for $720
million-equivalent in Mexican pesos, becoming one of the few
foreign banks to tap the Mexican bond market, raising $110
million-equivalent in pesos at the end of last year. It will
continue watching the market for the right environment to issue
debt, Samhan says.
The bank took advantage of international interest in Chilean
debt to place $50 million-equivalent in 2027 bonds trading on
the Hong Kong market in September.
It recently announced plans for an equity capital increase
of $530 million-equivalent, aimed at solidifying the capital