Exhibit 99.1

BANCO DE CHILE AND SUBSIDIARIES

(Free translation of Consolidated Financial Statements originally issued in Spanish)

INDEX

I.	Interim Consolidated Statements of Financial Position
II.	Interim Consolidated Statements of Income
III.	Interim Consolidated Statements of Other Comprehensive Income
IV.	Interim Consolidated Statements of Changes in Equity
V.	Interim Consolidated Statements of Cash Flows
VI.	Notes to the Interim Consolidated Financial Statements

MCh$	=	Millions of Chilean pesos
ThUS$	=	Thousands of U.S. dollars
UF or CLF	=	Unidad de Fomento
		(The UF is an inflation-indexed, Chilean peso denominated monetary unit set daily in advance on the basis of the previous month’s inflation rate).
Ch$ or CLP	=	Chilean pesos
US$ or USD	=	U.S. dollar
JPY	=	Japanese yen
EUR	=	Euro
HKD	=	Hong Kong dollar
CHF	=	Swiss Franc
PEN	=	Peruvian sol
AUD	=	Australian dollar
NOK	=	Norwegian krone
IFRS	=	International Financial Reporting Standards
IAS	=	International Accounting Standards
RAN	=	Actualized Standards Compilation of the Chilean Commission for Financial Market (“CMF”)
IFRIC	=	International Financial Reporting Interpretations Committee
SIC	=	Standards Interpretation Committee

BANCO DE CHILE AND SUBSIDIARIES

INDEX

		Page
Interim Consolidated Statements of Financial Position		1
Interim Consolidated Statements of Income		3
Interim Consolidated Statements of Other Comprehensive Income		5
Interim Consolidated Statements of Change Equity		6
Interim Consolidated Statements of Cash Flows		7
1.	Company information:	9
2.	Summary of Significant Accounting Principles:	10
3.	New Accounting Pronouncements Issued and Adopted, or Issued that have not yet been Adopted:	57
4.	Accounting Changes:	65
5.	Relevant Events:	76
6.	Business Segments:	77
7.	Cash and Cash Equivalents:	80
8.	Financial Assets Held for Trading at Fair Value through Profit or Loss:	81
9.	Non-trading Financial Assets mandatorily measured at Fair Value through Profit or Loss:	83
10.	Financial Assets and Liabilities designated as at Fair Value through Profit or Loss:	83
11.	Financial Assets at Fair Value through Other Comprehensive Income:	84
12.	Derivative Financial Instruments for hedging purposes:	87
13.	Financial assets at amortized cost:	92
14.	Investments in other companies:	117
15.	Intangible Assets:	120
16.	Property and equipment:	122
17.	Right-of-use assets and Lease liabilities:	124
18.	Taxes:	127
19.	Other Assets:	133
20.	Non-current assets and disposal groups held for sale and Liabilities included in disposal groups for sale:	134
21.	Financial liabilities held for trading at fair value through profit or loss:	135
22.	Financial liabilities at amortized cost:	136
23.	Financial instruments of regulatory capital issued:	141
24.	Provisions for contingencies:	145
25.	Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued:	150
26.	Special provisions for credit risk:	151
27.	Other Liabilities:	152
28.	Equity:	153
29.	Contingencies and Commitments:	158
30.	Interest Revenue and Expenses:	163
31.	UF indexation revenue and expesenses:	165
32.	Income and Expeses from commissions:	167
33.	Net Financial income (expense):	168
34.	Income attributable to investments in other companies:	169
35.	Result from non-current assets and disposal groups held for sale not admissible as discontinued operations:	170
36.	Other operating Income and Expenses:	171
37.	Expenses from salaries and employee benefits:	172
38.	Administrative expenses:	172
39.	Depreciation and Amortization:	173
40.	Impairment of non-financial assets:	173
41.	Operating expenses credit losses:	174
42.	Income from discontinued operations:	176
43.	Related Party Disclosures:	176
44.	Fair Value of Financial Assets and Liabilities:	182
45.	Maturity according to their remaining Terms of Financial Assets and Liabilities:	195
46.	Financial and Non-Financial Assets and Liabilities by Currency:	199
47.	Risk Management and Report:	203
48.	Information on Regulatory Capital and Capital Adequacy Ratios:	247
49.	Subsequent Events:	250

i

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

For the periods ended March 31, 2022 and December 31, 2021

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

(Expressed in million of Chilean pesos)

______________

			March		December
	Notes		2022		2021
			MCh$		MCh$
ASSETS
Cash and due from banks		7		4,882,248		3,713,734
Transactions in the course of collection		7		433,912		486,700
Financial assets held for trading at fair value through profit or loss
Derivative financial instruments		8		2,394,461		2,705,496
Debt financial instruments		8		482,186		3,737,942
Others		8		3,199		138,753
Non-trading financial assets mandatorily measured at fair value through profit or loss		9		—		—
Financial assets at fair value through profit or loss		10		—		—
Financial assets at fair value through other comprehensive income
Debt financial instruments		11		2,720,499		3,054,809
Others		11		—		—
Derivative financial instruments for hedging purposes		12		92,256		277,802
Financial assets at amortized cost
Rights by resale agreements and securities lending		13		25,861		64,365
Debt financial instruments		13		846,983		839,744
Loans and advances to Banks		13		2,991,417		1,529,313
Loans to customers - Commercial loans		13		18,938,101		19,217,868
Loans to customers - Residential mortgage loans		13		10,426,250		10,315,921
Loans to customers - Consumer loans		13		4,144,395		3,978,079
Investments in other companies		14		54,359		52,757
Intangible assets		15		72,665		72,532
Property and equipment		16		217,760		222,320
Right-of-use assets		17		96,046		100,188
Current tax assets		18		956		846
Deferred tax assets		18		445,033		434,277
Other assets		19		697,666		795,461
Non-current assets and disposal groups held for sale		20		19,661		19,419
TOTAL ASSETS				49,985,914		51,758,326

The accompanying notes 1 to 49 are an integral part of these interim consolidated financial statements

1

 

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

For the periods ended March 31, 2022 and December 31, 2021

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

(Expressed in million of Chilean pesos)

______________

			March			December
	Notes		2022			2021
			MCh$			MCh$
LIABILITIES
Transactions in the course of payment		7		433,362			369,980
Financial liabilities held for trading at fair value through profit or loss
Derivative financial instruments		21		2,520,859			2,772,503
Others		21		1,725			9,610
Financial liabilities designated as at fair value through profit or loss		10		—			—
Derivative Financial Instruments for hedging purposes		12		49,029			696
Financial liabilities at amortized cost
Current accounts and other demand deposits		22		16,493,474			18,249,881
Saving accounts and time deposits		22		9,801,495			8,803,713
Obligations by repurchase agreements and securities lending		22		99,268			85,399
Borrowings from financial institutions		22		4,657,937			4,861,865
Debt financial instruments issued		22		8,431,761			8,561,395
Other financial obligations		22		201,563			250,005
Lease liabilities		17		91,311			95,670
Financial instruments of regulatory capital issued		23		939,099			917,510
Provisions for contingencies		24		113,213			143,858
Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued		25		116,359			323,897
Special provisions for credit risk		26		669,589			601,574
Currents tax liabilities		18		106,257			113,129
Deferred tax liabilities		18		—			—
Other liabilities		27		1,059,706			1,304,119
Liabilities included in disposal groups held for sale		20		—			—
TOTAL LIABILITIES				45,786,007			47,464,804
EQUITY
Capital		28		2,420,538			2,420,538
Reserves		28		709,742			710,472
Accumulated other comprehensive income
Elements that are not reclassified in profit and loss		28		2,517			2,469
Elements that can be reclassified in profit and loss		28		(16,831	)		36,270
Retained earnings from previous periods		28		908,572			655,478
Income for the period		28		291,727			792,191
Less: Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued		28		(116,359	)		(323,897	)
Shareholders of the Bank		28		4,199,906			4,293,521
Non-controlling interests		28		1			1
TOTAL EQUITY				4,199,907			4,293,522
TOTAL LIABILITIES AND EQUITY				49,985,914			51,758,326

The accompanying notes 1 to 49 are an integral part of these interim consolidated financial statements

2

 

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF INCOME

for the period between January 1, and March, 31

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

(Expressed in million of Chilean pesos

______________

			March			March
	Notes		2022			2021
			MCh$			MCh$
Interest revenue		30		449,518			321,170
Interest expense		30		(143,303	)		(58,789	)
Net interest income				306,215			262,381
UF indexation revenue		31		386,218			162,960
UF indexation expenses		31		(199,064	)		(94,098	)
Net income from UF indexation				187,154			68,862
Income from commissions		32		160,709			140,118
Expenses from commissions		32		(30,469	)		(28,986	)
Net income from commissions				130,240			111,132
Financial income (expense) for:
Financial assets and liabilities held for trading		33		27,371			1,122
Non-trading financial assets mandatorily measured at fair value through profit or loss		33		—			—
Financial assets and liabilities designated as at fair value through profit or loss		33		—			—
Result from derecognition of financial assets and liabilities at amortized cost and financial assets at fair value through other comprehensive income		33		508			3,803
Exchange, indexation and accounting hedging of foreign currency		33		28,100			25,273
Reclassification of financial assets for changes in the business model		33		—			—
Other financial result		33		—			—
Net Financial income (expense)		33		55,979			30,198
Income attributable to investments in other companies		34		1,534			(657	)
Result from non-current assets and disposal groups held for sale not admissible as discontinued operations		35		977			1,580
Other operating income		36		3,086			3,970
TOTAL OPERATING INCOME				685,185			477,466
Expenses from salaries and employee benefits		37		(122,067	)		(113,698	)
Administrative expenses		38		(86,834	)		(82,889	)
Depreciation and amortization		39		(19,925	)		(18,619	)
Impairment of non-financial assets		40		98			421
Other operating expenses		36		(5,679	)		(3,986	)
TOTAL OPERATING EXPENSES				(234,407	)		(218,771	)
OPERATING RESULT BEFORE CREDIT LOSSES				450,778			258,695

The accompanying notes 1 to 49 are an integral part of these interim consolidated financial statements

3

 

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF INCOME

for the period between January 1, and March, 31

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

(Expressed in million of Chilean pesos

______________

			March			March
	Notes		2022			2021
			MCh$			MCh$
Credit loss expense for:
Provisions for credit risk of loans and advances to banks and loans to customers		41		(43,055	)		(31,425	)
Special provisions for credit risk		41		(69,784	)		(38,785	)
Recovery of written-off credits		41		13,641			14,743
Impairments for credit risk from other financial assets at amortized cost and financial assets at fair value through other comprehensive income		41		(206	)		(724	)
Credit loss expense		41		(99,404	)		(56,191	)
NET OPERATING INCOME				351,374			202,504
Income from continuing operations before tax
Income tax		18		(59,647	)		(40,540	)
Income from continuing operations after tax				291,727			161,964
Income from discontinued operations before tax
Discontinued operations income tax		18		—			—
Income from discontinued operations after tax		42		—			—
NET INCOME FOR THE PERIOD		28		291,727			161,964
Attributable to:
Shareholders of the Bank		28		291,727			161,964
Non-controlling interests				—			—
Earnings per share:				$			$
Basic earnings		28		2,89			1,60
Diluted earnings		28		2,89			1,60

The accompanying notes 1 to 49 are an integral part of these interim consolidated financial statements

4

 

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF

OTHER COMPREHENSIVE INCOME

for the period between January 1, and March 31,

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

(Expressed in million of Chilean pesos)

______________

			March			March
	Notes		2022			2021
			MCh$			MCh$
NET INCOME FOR THE PERIOD		28		291,727			161,964
ITEMS NOT TO BE RECLASSIFIED TO PROFIT OR LOSS
Re-measurement of the liability (asset) for net defined benefits and actuarial results for other employee benefit plans		28		(8	)		229
Fair value changes of equity instruments designated as at fair value through other comprehensive income		28		75			36
Fair value changes of financial liabilities designated as at fair value through profit or loss attributable to changes in the credit risk of the financial liability		28		—			—
Others		28		—			—
TOTAL ELEMENTS THAT WILL NOT BE RECLASSIFIED IN PROFIT OR LOSS				67			265
OTHER COMPREHENSIVE INCOME THAT WILL NOT BE RECLASSIFIED TO PROFIT OR LOSS BEFORE TAX
Income tax on other comprehensive income that will not be reclassified to profit or loss		18		(18	)		(72	)
TOTAL OTHER COMPREHENSIVE INCOME THAT WILL NOT BE RECLASSIFIED TO INCOME AFTER TAXES		28		49			193
ELEMENTS THAT CAN BE RECLASSIFIED TO PROFIT OR LOSS
Fair value changes of financial assets at fair value through other comprehensive income		28		(5,436	)		1,232
Cash flow hedges		28		(64,626	)		1,539
Participation in other comprehensive income of entities registered under the equity method		28		(7	)		(2	)
OTHER COMPREHENSIVE INCOME THAT WILL BE RECLASSIFIED TO INCOME BEFORE TAXES		28		(70,069	)		2,769
Income tax on other comprehensive income that can be reclassified in profit or loss		28		16,967			(748	)
TOTAL OTHER COMPREHENSIVE INCOME THAT WILL BE RECLASSIFIED TO PROFIT OR LOSS AFTER TAX		28		(53,102	)		2,021
TOTAL OTHER COMPREHENSIVE INCOME FOR THE PERIOD		28		(53,053	)		2,214
CONSOLIDATED COMPREHENSIVE INCOME FOR THE PERIOD		28		238,674			164,178
Attributable to:
Shareholders of the Bank		28		238,674			164,178
Non-controlling interests		28		—			—

The accompanying notes 1 to 49 are an integral part of these interim consolidated financial statements

5

 

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

for the period between January 1, 2021 and March 31, 2022 and 2021

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

(Expressed in millions of Chilean pesos)

______________

			Attributable to shareholders of the Bank
	Note		Capital		Reserves			Accumulated other comprehensive income			Retained earnings from previous periods and income (loss) for the period			Total			Non- controlling interests		Total Equity
			MCh$		MCh$			MCh$			MCh$			MCh$			MCh$		MCh$
Closing balances as of December 31, 2020 before restatement as of January 1, 2021				2,418,833		703,206			(51,250	)		655,478			3,726,267			1		3,726,268
Accounting Policies Changes Effects				1,705		(3,406	)		5,321			—			3,620			—		3,620
Opening balances as of January 1, 2021				2,420,538		699,800			(45,929	)		655,478			3,729,887			1		3,729,888
Common shares subscribed and paid		28		—		—			—			(220,271	)		(220,271	)		—		(220,271	)
Payment of common stock dividends				—		—			—			220,271			220,271			—		220,271
Provision for payment of common stock dividends				—		—			—			(70,297	)		(70,297	)		—		(70,297	)
Subtotal: transactions with owners during the year (period)				—		—			—			(70,297	)		(70,297	)		—		(70,297	)
Income for the period 2021				—		—			—			161,964			161,964			—		161,964
Other comprehensive income for the period		28		—		—			2,214			—			2,214			—		2,214
Subtotal:  Comprehensive income for the period				—		—			2,214			161,964			164,178			—		164,178
Closing balance as of 31.03.2021				2,420,538		699,800			(43,715	)		747,145			3,823,768			1		3,823,769
Common shares subscribed and paid				—		—			—			—			—			—		—
Provision for payment of common stock dividends				—		—			—			(253,600	)		(253,600	)		—		(253,600	)
Subtotal: transactions with owners during the period				—		—			—			(253,600	)		(253,600	)		—		(253,600	)
Income for the period 2021				—		—			—			630,227			630,227			—		630,227
Other comprehensive income for the period				—		—			82,454			—			82,454			—		82,454
Subtotal:  Comprehensive income for the period				—		—			82,454			630,227			712,681			—		712,681
Closing balances as of December 31, 2021 before restatement				2,420,538		699,800			38,739			1,123,772			4,282,849			1		4,282,850
Accounting Policies Changes Effects				—		10,672			—			—			10,672			—		10,672
Balances as of December 31, 2021				2,420,538		710,472			38,739			1,123,772			4,293,521			1		4,293,522
Closing balances as of December 31, 2021 before restatement as of January 1, 2022				2,418,833		703,604			(23,927	)		1,124,503			4,223,013			1		4,223,014
Accounting Policies Changes Effects				1,705		6,138			62,666			—			70,509			—		70,509
Opening balance as of al 01.01.2022				2,420,538		709,742			38,739			1,124,503			4,293,522			1		4,293,523
Common stocks  subscribed and paid		28		—		—			—			(539,828	)		(539,828	)		—		(539,828	)
Dividend payment os common stocks				—		—			—			323,897			323,897			—		323,897
Provision for payment of common stock dividends		28		—		—			—			(116,359	)		(116,359	)		—		(116,359	)
Subtotal: transactions with owners during the year (period)				—		—			—			(332,290	)		(332,290	)		—		(332,290	)
Income for the period 2022				—		—			—			291,727			291,727			—		291,727
Other comprehensive income for the period				—		—			(53,053	)		—			(53,053	)		—		(53,053	)
Subtotal: Comprehensive income for the period				—		—			(53,053	)		291,727			238,674			—		238,674
Balances as of March 31, 2022				2,420,538		709,742			(14,314	)		1,083,940			4,199,906			1		4,199,907

The accompanying notes 1 to 49 are an integral part of these interim consolidated financial statements

6

 

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

for the periods between January 1 and March 31, 2022 and 2021

(Free translation of Consolidated Financial Statements originally issued in Spanish)

(Expressed in million of Chilean pesos) 

______________

			March			March
	Notes		2022			2021
			MCh$			MCh$
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit for the period before taxes				351,374			202,504
Income tax				(59,647	)		(40,540	)
Profit for the period after taxes				291,727			161,964
Charges (credits) to income (loss) that do not represent cash flows
Depreciation and amortization		39		19,925			18,619
Impairment of non-financial assets		40		(98	)		(421	)
Provisiones constituted by credit risk				43,808			34,271
Provisions for contingencies				(763	)		(3,337	)
Additional provisions		41		70,000			40,000
Fair value of debt financial instruments held for trading at fair value through in profit or loss				(4,140	)		1,922
Change in deferred tax assets and liabilities		18		(11,256	)		5,232
Net (income) loss from investments in companies with significant influence		14		(1,522	)		668
Net (income) loss on sale of assets received in payments				(921	)		(648	)
Net (income) loss on sale of sale of fixed assets				(21	)		(3	)
Write-offs of assets received in payment				736			472
Other charges (credits) that do not represent cash flows				600,430			5,470
Net change in exchange rates, interest, readjustments and commissions accrued on assets and liabilities				11,851			1,600
Changes due to (increase) decrease in assets and liabilities affecting the operating flow:
Net ( increase ) decrease in accounts receivable from banks				(1,461,944	)		(1,615,282	)
Net ( increase ) decrease in loans and accounts receivables from customers				258,504			(816,058	)
Net ( increase ) decrease of debt financial instruments held for trading at fair value through profit or loss				107,496			128,074
Net ( increase ) decrease in other assets and liabilities				(543,312	)		43,193
Increase ( decrease ) in deposits and other demand obligations				(1,754,648	)		408,767
Increase ( decrease ) in repurchase agreements and securities loans				(78,235	)		(175,531	)
Increase ( decrease ) in deposits and other time deposits				979,781			(610,591	)
Sale of assets received in lieu of payment				3,374			2,362
Increase ( decrease ) in  obligations with foreign banks				(204,235	)		4,833
Increase ( decrease ) in other financial obligations				(48,404	)		71,280
Increase ( decrease ) in obligations with the Central Bank of Chile				(14	)		—
Payment of other long-term loans				(34	)		(68	)
Net increase ( decrease ) of debt financial instruments at fair value through other comprehensive income				360,810			(6,803	)
Net increase ( decrease)  of investment instruments held-to-maturity				3,174			—
Total net cash flows provided by (used in) operating activities				(1,357,931	)		(2,300,015	)
TOTAL NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Leasedhold improvements				(352	)		(382	)
Fixed assets purchase		16		(3,066	)		(11,878	)
Fixed assets sale				21			301
Acquisition of intangibles		15		(6,140	)		(6,018	)
Acquisition of investments in companies		14		—			—
Dividend received of investments in companies		34		12			11
Total net cash flows from (used in) investing activities				(9,525	)		(17,966	)
CASH FLOW FROM FINANCING ACTIVITIES:
Attributable to the interest of the owners :
Redemption and payment of interest of letters of credit				(708	)		(505	)
Redemption and payment of interest on current bonds				(360,525	)		(133,783	)
Redemption and payment of interest on subordinated bonds				(7,534	)		(7,056	)
Current bonds issuance		22		247,298			415,543
Subordinated bonds issuance				—			—
Capital increase by issuance of common shares				—			—
Payment of common stock dividends		28		(539,828	)		(220,271	)
Principal and interest payments for obligations under lease contracts		17		(7,709	)		(7,401	)
Attributable to non-controlling interest:
Dividend payment and/or withdrawals of paid-in capital in respect of the subsidiaries corresponding to the non-controlling interest				—			—
Total net cash flows from (used in) financing activities				(669,006	)		46,527
VARIATION IN CASH AND CASH EQUIVALENTS DURING THE PERIOD				(2,036,462	)		(2,271,454	)
Exchange variations effect				(215,951	)		14,337
Opening balance of cash and  cash equivalent		7		7,288,827			6,088,462
Final balance of cash and  cash equivalent				5,036,414			3,831,345

	March			March
	2022			2021
	MCh$			MCh$
Interest operating cash flow:
Interest and readjustments received		512,335			409,083
Interest and readjustments paid		(223,396	)		(61,903	)

The accompanying notes 1 to 49 are an integral part of these interim consolidated financial statements

7

 

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

for the periods between January 1 and March 31, 2022 and 2021

(Free translation of Consolidated Financial Statements originally issued in Spanish)

(Expressed in million of Chilean pesos) 

______________

Reconciliation of liabilities arising from financing activities:

	Changes other than Cash
	31.12.2021		Net Cash Flow			Acquisition / (Disposals)		Foreign currency			UF Movement		31.03.2022
	MCh$		MCh$			MCh$		MCh$			MCh$		MCh$
Letters of credit		4,116		(708	)		—		—			80		3,488
Bonds		9,474,788		(120,761	)		—		(204,891	)		218,237		9,367,373
Dividends paid		—		(539,828	)		—		—			—		(539,828	)
Payments for lease agreements		95,670		(7,709	)		986		—			2,362		91,309
Total liabilities from financing activities		9,574,574		(669,006	)		986		(204,891	)		220,679		8,922,342

The accompanying notes 1 to 49 are an integral part of these interim consolidated financial statements

8

BANCO DE CHILE AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

 ______________

1. Company information:

Banco de Chile is authorized to operate as a commercial bank since September 17, 1996, being, in conformity with the stipulations of article 25 of Law No. 19,396, the legal continuation of Banco de Chile resulting from the merger of the Banco Nacional de Chile, Banco Agrícola and Banco de Valparaiso, which was constituted by public deed dated October 28, 1893, granted before the Notary Public of Santiago, Mr. Eduardo Reyes Lavalle, authorized by Supreme Decree of November 28, 1893.

The Bank is a Corporation organized under the laws of the Republic of Chile, regulated by the Chilean Commission for the Financial Market (“CMF”). Since 2001, it is subject to the supervision of the Securities and Exchange Commission of the United States of America (“SEC”), in consideration of the fact that the Bank is registered on the New York Stock Exchange (“NYSE”), through a program of American Depositary Receipt (“ADR”).

Banco de Chile offers a broad range of banking services to its customers, ranging from individuals to large corporations. Additionally, the Bank offers international as well as treasury banking services, in addition to those offered by subsidiaries that include securities brokerage, mutual fund and investment management, insurance brokerage and financial advisory services.

Banco de Chile’s legal address is Ahumada 251, Santiago, Chile and its website is www.bancochile.cl.

9

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles:

(a) Legal Dispositions:

Decree Law No. 3,538 of 1980, according to the text replaced by the first article of Law No. 21,000 that “Creates the Commission for the Financial Market”, provides in numeral 6 of its article 5 that the Commission for the Market Financial (CMF) may “set the standards for the preparation and presentation of reports, balance sheets, statements of situation and other financial statements of the audited entities and determine the principles under which they must keep their accounting”.

According to the current legal framework, banks must use the accounting principles provided by the CMF and in everything that is not dealt with by it or in contravention of its instructions, they must adhere to the generally accepted accounting principles, which correspond to the technical standards issued by the College of Accountants of Chile AG, coinciding with the International Financial Reporting Standards (“IFRS”) agreed by the International Accounting Standards Board (“IASB”). If there are discrepancies between these accounting principles of general acceptance and the accounting criteria issued by the CMF, the latter shall prevail.

The notes to the Interim Consolidated Financial Statements contain additional information to that presented in the Consolidated Statement of Financial Position, in the Interim Consolidated Statement of Income, Interim Consolidated Statement of Other Comprehensive Income, Interim Consolidated Statement of Changes in Equity and Interim Consolidated Statement of Cash Flows. They provide narrative descriptions or disaggregation of such statements in a clear, relevant, reliable and comparable way.

(b) Basis of Consolidation:

The Interim Financial Statements of Banco de Chile as of March 31, 2022 and 2021 have been consolidated with its Chilean subsidiaries and foreign subsidiary, using the global integration method (line-by-line). They include preparation of individual financial statements of the Bank and companies that participate in the consolidation and it include adjustments and reclassifications necessary to homologue accounting policies and valuation criteria applied by the Bank. The Interim Consolidated Financial Statements have been prepared using the same accounting policies for similar transactions and other events, in equivalent circumstances.

Significant intercompany transactions and balances (assets and liabilities, equity, income, expenses and cash flows) originated in operations performed between the Bank and its subsidiaries and between subsidiaries have been eliminated in the consolidation process. The non-controlling interest corresponding to the participation percentage of third parties in subsidiaries, which the Bank does not own directly or indirectly, has been recognized and is shown separately in the consolidated shareholders’ equity of Banco de Chile.

10

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(b) Basis of Consolidation, continued:

(i) Controlled companies (Subsidiaries)

Interim Consolidated Financial Statements as of March 31, 2022 and 2021 incorporate Financial Statements of the Bank and the controlled companies (subsidiaries) in accordance with IFRS 10 “Consolidated Financial Statements”. Control is obtained when the Bank has exposure or rights to variable returns and has the ability to affect those returns through power over an investee. Specifically the Bank have power over the investee when has existing rights that give it the ability to direct the relevant activities of the investee.

When the Bank has less than a majority of the voting rights of an investee, but these voting rights are enough to have the ability to direct the relevant activities unilaterally, then conclude the Bank has control. The Bank considers all factors and relevant circumstances to evaluate if their voting rights are enough to obtain the control, which it includes:

● The amount of voting rights that the Bank has, related to the amount of voting rights of the others stakeholders;

● Potential voting rights maintained by the Bank, other holders of voting rights or other parties;

● Rights emanated from other contractual arrangements;

● Any additional circumstance that indicate that the Bank have or have not the ability to manage the relevant activities when that decisions need to be taken, including behavior patterns of vote in previous shareholders meetings.

The Bank reevaluates if it has or has not the control over an investee when the circumstances indicates that exists changes in one or more elements of control listed above.

The entities controlled by the Bank and which form parts of the consolidation are detailed as follows:

				Interest Owned
				Directa				Indirect				Total
			Functional	March		December		March		December		March		December
Rut	Entity	Country	Currency	2022		2021		2022		2021		2022		2021
				%		%		%		%		%		%
96,767,630-6	Banchile Administradora General de Fondos S.A.	Chile	$		99.98		99.98		0.02		0.02		100.00		100.00
96,543,250-7	Banchile Asesoría Financiera S.A.	Chile	$		99.96		99.96		—		—		99.96		99.96
77,191,070-K	Banchile Corredores de Seguros Ltda.	Chile	$		99.83		99.83		0.17		0.17		100.00		100.00
96,571,220-8	Banchile Corredores de Bolsa S.A.	Chile	$		99.70		99.70		0.30		0.30		100.00		100.00
96,932,010-K	Banchile Securitizadora S.A. en Liquidación (*)	Chile	$		99.01		99.01		0.99		0.99		100.00		100.00
96,645,790-2	Socofin S.A.	Chile	$		99.00		99.00		1.00		1.00		100.00		100.00

(*) Company in the process of early dissolution.

11

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(b) Basis of Consolidation, continued:

(ii) Investments in companies as a joint venture

Associates

An associate is an entity over which the Bank has significant influence on its operating and financial management policy decisions, without having control over the associate. Significant influence is generally presumed when the Bank holds between 20% and 50% of the voting rights. Other factors considered when determining whether the Bank has significant influence over another entity are the representation on the Board of Directors and the existence of material intercompany transactions. The existence of these factors could determine the existence of significant influence over an entity despite the Bank holding a participation of less than 20% of the entity’s voting rights.

Investments in associates where exists significant influence, are accounted for using the equity method. In accordance with the equity method, the Bank’s investments are initially recorded at cost, and subsequently increased or decreased to reflect the proportional participation of the Bank in the net income or loss of the associate and other movements recognized in its shareholders’ equity. Goodwill arising from the acquisition of an associate is included in the net book value, net of any accumulated impairment loss.

Joint Ventures

Joint Ventures are joint arrangements whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint control exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

According to IFRS 11 “Joint Arrangements”, an entity will determine the type of joint arrangement in which it is involved, and may classify the agreement as a “Joint operation” or a “Joint venture”.

For investments defined as a “Joint Operation”, the assets, liabilities, income and expenses are recognized by the participation in the joint operation.

Investments defined as a “Joint Venture” will be registered according to the equity method.

Investments in other companies that, for their characteristics, are defined as “Joint Ventures” are as follows:

● Artikos Chile S.A.

● Servipag Ltda.

12

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(b) Basis of Consolidation, continued:

(iii) Minority investments in other companies

On initial recognition, the Bank may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is not held for trading and is not contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies.

(iv) Special purpose entities

According to current regulation, the Bank must be analyzing periodically its consolidation area, considering that the principal criteria are the control that the Bank has in an entity and not its percentage of equity participation.

As of March 31, 2022 and 2021, the Bank does not control and has not created any SPEs.

(v) Fund administration

The Bank and its subsidiaries manage and administer assets held in mutual funds and other investment products on behalf of investors, perceiving a paid according to the service provided and according to market conditions. Managed resources are owned by third parties and, therefore, not included in the Consolidated Statements of Financial Position.

According to established in IFRS 10, for consolidation purposes is necessary to assess the role of the Bank and its subsidiaries with respect to the funds they manage, must determine whether that role is Agent or Principal. This assessment should consider the following:

- The scope of their authority to make decisions about the investee.

- The rights held by third parties.

- The remuneration to which it is entitled in accordance with the remuneration arrangements.

- Exposure, decision maker, the variability of returns from other interests that keeps the investee.

The Bank and its subsidiaries manage on behalf and for the benefit of investors, acting in that relationship only as Agent. Under this category, and as provided in the aforementioned regulation, it does not control such funds when exercise its authority to make decisions. Therefore, as of March 31, 2022 and 2021 act as agent, and therefore do not consolidate any fund, no funds are part of the consolidation.

13

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(c) Non-controlling interest:

Non-controlling interest represents the share of losses, income and net assets of which, directly or indirectly, the Bank does not own. It is presented separately from the equity of the owners of the Bank in the Interim Consolidated Statements of Income and the Consolidated Statements of Financial Position.

(d) Use of Estimates and Judgment:

Preparing Interim Consolidated Financial Statements requires Management to make judgments, estimations and assumptions that affect the application of accounting policies and the valuation of assets, liabilities, income and expenses presented. Real results could differ from these estimated amounts. The estimates made refer to:

1. Impairment of debt instruments (Note No. 10 and No. 41)

2. Provision for credit risk (Notes No 13, No. 16 and No. 41);

3. Useful life of intangible assets, property and equipment and leased assets and lease liabilities (Notes No. 15, No. 16 and No. 17);

4. Income taxes and deferred taxes (Note No. 18);

5. Provisions (Note No. 24);

6. Contingencies and Commitments (Note No. 29);

7. Fair value of financial assets and liabilities (Note No. 44).

Estimates and relevant assumptions are regularly reviewed by the management according to quantify certain assets, liabilities, gains, loss and commitments. Estimates reviewed are registered in income in the year that the estimate is reviewed.

During the period ended March 31, 2022 there have been no significant changes in the estimates made.

(e) Financial Assets and Liabilities:

The classification, measurement and presentation of financial assets and liabilities has been carried out based on the standards issued by the CMF in the Compendium of Accounting Standards, considering the criteria described below.

Financial Assets:

Classification of financial assets:

On initial recognition, a financial asset is classified within the following categories: Financial assets held for trading at fair value through profit or loss; Financial assets not held for trading mandatorily valued at fair value through profit or loss; Financial assets designated as at fair value through profit or loss; Financial assets at fair value through other comprehensive income and Financial assets at amortized cost.

14

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Classification of financial assets, continued:

The criteria for classifying financial assets, which incorporates the standards defined in IFRS 9, depends on the business model with which the entity manages the assets and the contractual characteristics of the cash flows, commonly known as “solely payments of principal and interest” (SPPI) criterion.

The valuation of these assets should reflect how the Bank manages groups of financial assets and does not depend on the intent for an individual instrument.

A financial assets should be valued at amortized cost if both of the following conditions are met:

- The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

- The contractual terms of the financial asset give rise to cash flows that are solely payments of principal and interest.

A debt financial instrument must be valued at fair value with changes in “Other comprehensive income” if the following two conditions are met:

- The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and

- The contractual terms of the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt financial instrument will be classified at fair value through profit or loss whenever, due to the business model or the characteristics of its contractual cash flows, it is not appropriate to classify it in any of the other categories described.

In general, equity financial instruments are valued at fair value through profit or loss.

However, the Bank may make an irrevocable election at initial recognition to present subsequent changes in fair value in “Other Comprehensive Income”.

Financial assets will only be reclassified when the Bank decides to change the business model. In this case, all the financial assets of said business model will be reclassified. The change in the objective of the business model must be prior to the date of reclassification.

15

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Valuation of financial assets:

Initial recognition:

Financial assets are initially recognized at fair value plus, in the case of a financial asset that is not carried at fair value through profit or loss, the transaction costs that are directly attributable to its purchase or issuance, using the Effective Interest Rate method (EIT). The calculation of the EIT includes all fees and other items paid or received that are part of the EIT. Transaction costs include incremental costs that are directly attributable to the acquisition or issuance of a financial asset.

Post measurement:

All variations in the value of financial assets due to the accrual of interest and items assimilated to interest are recorded in “Interest income” or “Interest expense” of the Consolidated Income Statement for the year in which the accrual occurred, except for trading derivatives that are not part of accounting hedges.

The changes in the valuations that occur after the initial registration for reasons other than those mentioned in the previous paragraph, are treated as described below, based on the categories in which the financial assets are classified.

Financial assets held for trading at fair value through profit or loss, Financial assets not held for trading mandatorily valued at fair value through profit or loss and Financial assets designated as at fair value through profit or loss:

In “Financial assets held for trading at fair value through profit or loss” will record financial assets whose business model aims to generate profits through purchases and sales or to generate results in the short term.

The financial assets recorded under “Financial assets not held for trading mandatorily valued at fair value through profit or loss” are assigned to a business model whose objective is achieved by obtaining contractual cash flows and/or selling financial assets but where the cash flows contracts have not met the conditions of the SPPI test.

In “Financial assets designated as at fair value through profit or loss” financial assets will be classified only when such designation eliminates or significantly reduces the inconsistency in the valuation or in the recognition that would arise from valuing or recognizing the assets on a different basis.

16

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets held for trading at fair value through profit or loss, Financial assets not held for trading mandatorily valued at fair value through profit or loss and Financial assets designated as at fair value through profit or loss, continued:

The assets recorded in these items of the Consolidated Statement of Financial Position are valued after their acquisition at their fair value and changes in their value are recorded, at their net amount, under “Financial assets and liabilities held for trading”, “Financial assets and liabilities financial assets not held for trading mandatorily valued at fair value through profit or loss” and “Financial assets and liabilities designated as at fair value through profit or loss” of the Consolidated Income Statement. Variations originated from exchange differences are recorded under “Foreign currency changes, UF indexation and accounting hedge” in the Consolidated Income Statement.

Financial assets at fair value through other comprehensive income

Debt financial instruments:

The assets recorded in this item of the Consolidated Statement of Financial Position are valued at their fair value, interest income and UF indexation of these instruments, as well as exchange differences and impairment arising, are recorded in the Consolidated Statement of Income, while subsequent variations in their valuation are temporarily recorded (for its amount net of taxes) in “Changes in the fair value of financial assets at fair value through other comprehensive income” of the Consolidated Statements of Other Comprehensive Income.

The amounts recorded in “Changes in the fair value of financial assets at fair value through other comprehensive income” continue to form part of the Bank’s consolidated equity until the asset is derecognized in the consolidated balance. In the case of selling these assets, the result is recognized in “Financial result for derecognizing financial assets and liabilities at amortized cost and financial assets at fair value with changes in others comprehensive income” of the Consolidated Income Statement.

Net losses due to impairment of financial assets at fair value through other comprehensive income produced in the year are recorded in “Impairment due to credit risk of other financial assets at amortized cost and financial assets at fair value through other comprehensive income” of the Consolidated Income Statement of the period.

17

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at fair value through other comprehensive income, continued:

Equity financial instruments:

At the time of initial recognition of investments in equity instruments, the Bank may make the irrevocable decision to present subsequent changes in fair value in other comprehensive income. Subsequent variations in this valuation will be recognized in “Changes in the fair value of equity instruments designated as at fair value through other comprehensive income”. The dividends received from these investments are recorded in “Income from investments in companies” of the Consolidated Income Statement. These instruments are not subject to the impairment model of IFRS 9.

Financial assets at amortized cost:

The assets recorded in this item of the Consolidated Statement of Financial Position are valued after their acquisition at their “amortized cost”, in accordance with the “effective interest rate” method.

The financial assets that are included in this item, for presentation purposes, in the Statement of Financial Position are subdivided according to the following:

- Investment under resale agreements and securities loans

- Debt financial instruments

- Due from banks

- Loans and accounts receivable from customers (Commercial, Mortgage and Consumer)

Losses due to impairment of assets at amortized cost generated in each year are recorded in “Provisions for credit risk and loans and accounts receivable from customers” and “Impairment due to credit risk of other financial assets at amortized cost and financial assets at fair value through other comprehensive income” of the Consolidated Income Statement.

18

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Investment under resale agreements, obligations under repurchase agreements and securities loans:

Resale agreement operations are carried out as a form of investment. Under these agreements, financial instruments are purchased, which are included as assets in “Investment under resale agreements and securities loans”, which are valued according to the interest rate of the agreement through the amortized cost method. In accordance with current regulations, the Bank does not record as its own portfolio those papers purchased under resale agreements.

Repurchase agreement operations are also carried out as a form of financing, which are included as liabilities in “Obligations for repurchase agreements and securities loans”. In this regard, the investments that are sold subject to a repurchase obligation and that serve as collateral for the loan correspond to debt financial instruments. The obligation to repurchase the investment is classified in liabilities as “Obligations under repurchase agreements and securities loans” and is valued according to the interest rate of the agreement.

Debt financial instruments

Debt financial instruments at amortized cost are recorded at their cost value plus interest and accrued UF indexation, less provisions for impairment constituted when their recorded amount is greater than the estimated amount of recovery.

Interest and UF indexation of debt financial instrument at amortized cost are included in “Interest income and UF indexation”.

The investment instruments that are subject to accounting hedges are adjusted according to the accounting hedge rules as described in Note No. 2 letter (k).

19

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and Advances to Banks:

This item shows the balances of operations with local and abroad banks, including the Central Bank of Chile and foreign Central Banks. See detail in Note No. 13 (c) Financial Assets at Amortized Cost.

Loans and accounts receivable from customers:

Loans to customers include originated and purchased non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and which the Bank does not intend to sell immediately or in the short term.

(i) Valuation method

Loans and accounts receivable from customers are initially measured at cost plus incremental transaction costs and income, and subsequently measured at amortized cost, using the effective interest rate method minus, less any impairment loss, except when the Bank defined some loans as hedged items, measured at fair value through profit or loss as described in letter (k) of this note.

(ii) Lease contracts

Accounts receivable for leasing contracts, included under the caption “Loans to customers” correspond to periodic rent installments of contracts which meet the definition to be classified as financial leases and are presented at their nominal value net of unearned interest as of each year-end.

(iii) Factoring transactions

They are valued for the amounts disbursed by the Bank in exchange for invoices or other commercial instruments representative of credit, with or without responsibility of the grantor, received in discount. Price differences between the amounts disbursed and the nominal value of the credits are recorded in the result as interest income, through the effective interest method, during the financing period.

In those cases where the transfer of these instruments it was made without responsibility of the grantor, it is the Bank who assumes the insolvency risks of those required to pay.

20

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

(iv) Impairment of loans

The impaired loans include the following assets, according to Chapter B-1 of Accounting Standards Compendium of the CMF:

a) In case of debtors subject to individual assessment, includes credits from “Non-complying loans” those that must be classified in categories B3 and B4 of “Substandar loans”.

b) Debtors subject to assessment group evaluation, the impaired portfolio includes all credits of the “Non-complying loans”.

(v) Credit risk allowance

The Bank permanently evaluates the entire portfolio of loans and contingent loans, with the aim of establishing the necessary and sufficient provisions in a timely manner to cover the expected losses associated with the characteristics of the debtors and their credits, based on the payment and subsequent recovery.

Allowances are required to cover the risk of loan losses have been established in accordance with the instructions issued by the CMF. The loans are presented net of those allowances and, in the case of contingent loans are shown in liabilities under the item “Special provisions for credit risk”.

In accordance with what is stipulated by the CMF, models or methods are used based on an individual and group analysis of debtors, to establish allowance for loan losses. Said models, as well as modifications to their design and application, are approved by the Bank’s Board of Directors.

(v.i) Allowance for individual evaluations:

An individual analysis of debtors is applied to companies that are of such significance with respect to size, complexity or level of exposure to the bank, that they must be analyzed in detail.

Likewise, the analysis of borrowers focuses on its credit quality related to the capacity and willingness to meet their credit obligations, through sufficient and reliable information, and should also be analyzed in terms of guarantees, terms, interest rates, currency and revaluation, etc.

For purposes of establish the allowances, the banks must assess the credit quality, then classify to one of three categories of loans portfolio: Normal, Substandard and Non-complying Loans, it must classify the debtors and their operations related to loans and contingent loans in the categories that apply.

21

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

(v.i) Allowance for individual evaluations, continued:

v.i.1 Normal Loans and Substandard Loans:

Normal loans: includes those debtors whose payment capacity allows them to meet their obligations and commitments, and according to the evaluation of their economic-financial situation no change in this condition are displayed. Loans classified in categories A1 through A6.

Substandard loans: includes all borrowers with insufficient payment capacity or significant deterioration of payment capacity that may be reasonably expected not to comply with all principal and interest payments obligations set forth in the credit agreement, showing a low flexibility to meet its financial obligations in the short term.

This category also includes all loans that have been non-performing for more than 30 days. Loans classified in this category are B1 through B4.

As a result of individual analysis of the debtors, the Bank must classify them in the following categories, assigning, subsequently, the percentage of probability of default and loss given default resulting in the following percentage of expected loss:

Classification	Category of the debtors	Probability of default (%) PD		Loss given default (%) LGD		Expected loss (%) EL
Normal Loans	A1		0.04		90.0		0.03600
	A2		0.10		82.5		0.08250
	A3		0.25		87.5		0.21875
	A4		2.00		87.5		1.75000
	A5		4.75		90.0		4.27500
	A6		10.00		90.0		9.00000
Substandard Loans	B1		15.00		92.5		13.87500
	B2		22.00		92.5		20.35000
	B3		33.00		97.5		32.17500
	B4		45.00		97.5		43.87500

Allowances for Normal and Substandard Loans:

To determine the amount of allowances to be constitute for normal and substandard portfolio, previously should be estimated the exposure to subject to the allowances, which will be applied to respective expected loss (expressed in decimals), which consist of probability of default (PD) and loss given default (LGD) established for the category in which the debtor and/or guarantor belong, as appropriate.

22

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

(v.i) Allowance for individual evaluations, continued:

v.i.1 Normal Loans and Substandard Loans, continued:

The exposure affects to allowances applicable to loans plus contingent loans minus the amounts to be recovered by way of the foreclosure of financial or real guarantees of the operations. Loans mean the book value of credit of the respective debtor, while for contingent loans, the value resulting from to apply the indicated in No. 3 of Chapter B-3 of Banking Accounting Standards Compendium.

In the case of real guarantees, the Bank must demonstrate that the value assigned to this deduction reasonably reflects the value that it would obtain in the sale of the assets or capital instruments. Also, in qualified cases, the direct debtor’s credit risk may be substituted for the credit quality of the guarantor. In no case may the guaranteed securities be discounted from the amount of the exposure, since this procedure is only applicable when it comes to financial or real guarantees.

For calculation purposes, the following must be considered:

Provision debtor = (ESA-GE) x (PDdebtor /100)x(LGDdebtor /100)+GE x(PDguarantor/100)x(LGDguarantor/100)

Where:

ESA = Exposure subject to allowances, (Loans + Contingent Loans) – Financial Guarantees

GE = Guaranteed exposure

However, the Bank must maintain a minimum provision level of 0.50% over normal portfolio and contingents loans.

23

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

(v.i) Allowance for individual evaluations, continued:

v.i.2 Non-complying Loans:

The non-complying portfolio includes the debtors and their credits for which their recovery is considered remote, as they show an impaired or no payment capacity. This category comprises all debtors who have stopped paying their creditors or with visible evidence that they will stop doing so, as well as those for which a forced restructuring of their debts is necessary, reducing the obligation or postponing the payment of the principal or interest and, in addition, any debtor that has 90 days overdue or more in the payment of interest or principal of any credit. This portfolio is composed of the debtors belonging to categories C1 to C6 of the rating scale and all credits, including 100% of the amount of contingent loans, held by those same debtors.

For purposes to establish the allowances on the non-complying loans, the Bank disposes the use of percentage of allowances to be applied on the amount of exposure, which corresponds to the amount of loans and contingent loans that maintain the same debtor. To apply that percentage, must be estimated a expected loss rate, less the amount of the exposure the recoveries by way of foreclosure of financial or real guarantees that to support the operation and, if there are available specific background, also must be deducting present value of recoveries obtainable exerting collection actions, net of expenses associated with them. This loss percentage must be categorized in one of the six levels defined by the range of expected actual losses by the Bank for all transactions of the same debtor.

These categories, their range of loss as estimated by the Bank and the percentages of allowance that must be applied on the amount of exposures, are listed in the following table:

Type of Loan	Classification	Expected loss	Allowance (%)
Non-complying loans	C1	Up to 3 %		2
	C2	More than 3% up to 20%		10
	C3	More than 20% up to 30%		25
	C4	More than 30 % up to 50%		40
	C5	More than 50% up to 80%		65
	C6	More than 80%		90

For calculation purposes, the following must be considered:

Expected loss	= (TE – R) / TE
Allowance	= TE x (AP/100)

Where:

TE = Total Exposure

R = Recoverable amount

AP = Allowance Percentage (based on the category in which the expected credit loss should be classified).

24

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

(v.i) Allowance for individual evaluations, continued:

v.i.2 Non-complying Loans, continued:

All credits of the debtor must be kept in the Default Portfolio until there is a normalization of their ability or payment behavior, without prejudice to punishment of each particular credit that meets the condition indicated in Title II of Chapter B-2 of the Compendium of Accounting Standards. To remove a debtor from the Default Portfolio, once the circumstances that lead to classification in this portfolio according to these regulations have been overcome, at least the following copulative conditions must be met:

- No obligation of the debtor with the bank with more than 30 calendar days overdue.

- No new refinances granted to pay its obligations.

- At least one of the payments includes amortization of capital.

- If the debtor has a credit with partial payment periods less than six months, has already made two payments.

- If the debtor must pay monthly fees for one or more credits, has paid four consecutive dues.

- The debtor does not have direct debts unpaid in the CMF recast information, except in the case of insignificant amounts.

(v.ii) Allowances for group evaluations

Group evaluations are relevant for residential mortgage and consumer loan exposures, in addition to commercial exposures related to student loans and exposures with debtors that simultaneously meet the following conditions:

i) The Bank has an aggregate exposure to the same counterparty of less than 20,000 UF. The aggregate exposure should require gross provisions or other mitigators. In addition, for its computation, mortgage loans must be excluded. In the case of off-balance sheet items, the gross amount is calculated by applying the credit conversion factors, defined in chapter B-3 of the CNC.

ii) Each aggregate exposure to the same counterparty does not exceed 0.2% of the total commercial group portfolio. To avoid circular computation, the criterion will be checked only once.

For the remaining commercial credit exposures, the individual analysis model of the debtors must be applied.

25

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

(v.ii) Allowances for group evaluations, continued:

The determination of the type of analysis (group or individual) must be carried out at the global consolidated level, once a year, or after significant adjustments in the Bank’s portfolio, such as mergers, acquisitions, purchases or significant portfolio sales.

To determine the allowances, the group evaluations require the formation of groups of loans with similar characteristics in terms of type of debtors and conditions agreed, to establish technically based estimates by prudential criteria and following both the payment behavior of the group that concerned as recoveries of defaulted loans and consequently provide the necessary provisions to cover the risk of the portfolio.

Banks may use two alternative methods for determining provisions for retail loans that are evaluated as a group.

Under first method, it will be used the experience to explain the payment behavior of each homogeneous group of debtors and recoveries through collateral and of collection process, when it correspond, with objective of to estimate directly a percentage of expected losses that will be apply to the amount of the loans of respective group.

Under second method, the banks will segment to debtors in homogeneous groups, according described above, associating to each group a determined probability of default and a percentage of recovery based in a historic analysis. The amount of provisions to register it will be obtained multiplied the total loans of respective group by the percentages of estimated default and of loss given the default.

In both methods, estimated loss must be related with type of portfolio and terms of operations.

The Bank to determine its provisions has opted for using second method.

In the case of consumer loans, collateral are not considered for the purpose of estimating the expected loss.

26

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

(v.ii) Allowances for group evaluations, continued:

The Bank must discriminate between provisions on the normal portfolio and on the portfolio in default, and those that protect the risks of contingent credits associated with those portfolios.

(v.ii.1) Standard method of provisions for group portfolio

The standard methodologies presented below establish the variables and parameters that determine the provision factor for each type of portfolio that the CMF has defined as representative, according to the common characteristics shared by the operations that comprise them.

- Residential mortgage portfolio

The provision factor applicable, represented by expected loss over the mortgage loans, it will depend to the past due of each credit and the relation, at the end of month, between outstanding capital and the value of the mortgage guarantees (CMG), according the following table:

	Provision factor applicable according to delinquency and PVG
		Past due days at the end-month
CMG section	Concept	0	1-29		30-59		60-89		Non- Complying Loans
CMG ≤ 40%	PD (%)	1.0916		21.3407		46.0536		75.1614		100.0000
	LGD (%)	0.0225		0.0441		0.0482		0.0482		0.0537
	EAD (%)	0.0002		0.0094		0.0222		0.0362		0.0537
40% < CMG ≤ 80%	PD (%)	1.9158		27.4332		52.0824		78.9511		100.0000
	LGD (%)	2.1955		2.8233		2.9192		2.9192		3.0413
	EAD (%)	0.0421		0.7745		1.5204		2.3047		3.0413
80% < CMG ≤ 90%	PD (%)	2.5150		27.9300		52.5800		79.6952		100.0000
	LGD (%)	21.5527		21.6600		21.9200		22.1331		22.2310
	EAD (%)	0.5421		6.0496		11.5255		17.6390		22.2310
CMG > 90%	PD (%)	2.7400		28.4300		53.0800		80.3677		100.0000
	LGD (%)	27.2000		29.0300		29.5900		30.1558		30.2436
	EAD (%)	0.7453		8.2532		15.7064		24.2355		30.2436

Where:

PD : Probability of default

LGD : Loss given default

EAD : Exposure at default

CMG : Outstanding loan capital /Mortgage Guarantee value

27

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

- Commercial portfolio

To determine the allowances of the commercial portfolio, the Bank must consider the standard methods presented below, as applicable to commercial leasing operations or other types of commercial loans. Then, the applicable provision factor will be assigned considering the parameters defined for each method.

a) Commercial Leasing Operations

The provision factor must be applied to the current value of commercial leasing operations (including the purchase option) and will depend on the default of each operation, the type of leased asset and the relationship between the current value of each operation and the leased asset value (PVB) at each month-end, as indicated in the following tables:

Probability of default (PD) applicable according to default and type of asset (%)
	Type of asset
Days of default of the operation at the month-end	Real estate		Non-real estate
0		0.79		1.61
1-29		7.94		12.02
30-59		28.76		40.88
60-89		58.76		69.38
Portfolio in default		100.00		100.00

Loss given the default (LGD) applicable according to PVB section and type of asset (%)
PVB = Current value of the operation / Value of the leased asset
PVB section	Real estate		Non-real estate
PVB ≤ 40%		0.05		18.2
40% < PVB ≤ 50%		0.05		57.00
50% < PVB ≤ 80%		5.10		68.40
80% < PVB ≤ 90%		23.20		75.10
PVB > 90%		36.20		78.90

The determination of the PVB relationship will be made considering the appraisal value expressed in UF for real estate and in Chilean pesos for non-real estate, recorded at the time of the respective loan granting, taking into account possible situations that may be causing temporary increases in the assets prices at that time.

28

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

b) Generic commercial placements and factoring

In the case of factoring operations and other commercial placements, other than those indicated above, the provision factor, applicable to the amount of the placement and the exposure of the contingent loan risk (as indicated in paragraph 3 of Chapter B-3 of the CNC), will depend on the default of each operation and the relationship that exists at the end of each month, between the obligations that the debtor has with the bank and the value of the collateral that protect them (PTVG), as indicated in the following tables:

Probability of default (PD) applicable according to default and PTVG section (%)
	With collateral				Without
Days of default at the month-end	PTVG≤100%		PTVG>100%		collateral
0		1.86		2.68		4.91
1-29		11.60		13.45		22.93
30-59		25.33		26.92		45.30
60-89		41.31		41.31		61.63
Portfolio in default		100.00		100.00		100.00

Loss given the default (LGD) applicable according to PTVG section (%)
Collateral (with / without)	PTVG section	Generic commercial operations or factoring without the responsibility of the transferor		Factoring with the responsibility of the transferor
With collateral	PTVG ≤ 60%		5.0		3,2
	60% < PTVG≤ 75%		20.3		12,8
	75% < PTVG ≤ 90%		32.2		20,3
	90% < PTVG		43.0		27,1
Without collateral			56.9		35.9

The collaterals used for the purposes of calculating the PTVG relationship of this method may be specific or general, including those that are simultaneously specific and general. Collateral can only be considered if, according to the respective coverage clauses, it was constituted in the first degree of preference in favor of the Bank and only guarantees the debtor’s credits with respect to which it is imputed (not shared with other debtors).

29

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

b) Generic commercial placements and factoring, continued:

The invoices assigned in the factoring operations will not be considered for purposes of calculating the PTVG. The excess of collateral associated with mortgage loans referred to in numeral 3.1.1 Residential mortgage portfolio in Chapter B-1 of CNC may be considered, computed as the difference between 80% of the property’ commercial value, according to with the conditions set out in that framework, and the mortgage loan that guarantees.

For the calculation of the PTVG ratio, the following considerations must be taken:

i. Transactions with specific collaterals: when the debtor granted specific collateral for generic commercial loans and factoring, the PTVG ratio is calculated independently for each covered transaction, such as the division between the amount of the loans and the contingent loans exposure and the collateral’s value of the covered product.

ii. Transactions with general collaterals: when the debtor granted general or general and specific collaterals, the Bank calculates the respective PTVG, jointly for all generic commercial loans and factoring and not contemplated in the preceding paragraph i), as the quotient between the sum of the amounts of the loans and exposures of contingent loans and the general, or general and specific collateral that, according to the scope of the remaining coverage clauses, safeguard the loans considered in the numerator aforementioned coverage ratio.

The amounts of the guarantees used in the PTVG ratio of numerals i) and ii), different from those associated with excess guarantees from mortgage loans to which the residential mortgage portfolio refers, must be determined according to:

- The last valuation of the collateral, be it appraisal or fair value, according to the type of real guarantee in question. For the determination of fair value, the criteria indicated in Chapter 7-12 (Fair Value of Financial Instruments) of the Actualized Standards Compilation should be considered.

- Possible situations that could be causing temporary increases in the values of the collaterals.

- Limitations on the amount of coverage established in their respective clauses.

30

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

(v.ii.2) Portfolio in default.

The portfolio in default includes all placements and 100% of the amount of the contingent loans, of the debtors that the closing of a month presents a delay equal to or greater than 90 days in the payment of the interest of the capital of any credit. It will also include debtors who are granted a credit to leave an operation that has more than 60 days of delay in their payment, as well as those debtors who were subject to forced restructuring or partial forgiveness of a debt.

They may exclude from the portfolio in default: a) mortgage loans for housing, which delinquent less than 90 days, unless the debtor has another loan of the same type with greater delinquency; and, b) credits for financing higher studies of Law No. 20,027, which do not yet present the non-compliance conditions indicated in Circular No. 3,454 of December 10, 2008.

All credits of the debtor must be kept in the Default Portfolio until there is a normalization of their ability or payment behavior, without prejudice to punishment of each particular credit that meets the condition indicated in Title II of Chapter B-2 of the Compendium of Accounting Standards. To remove a debtor from the Default Portfolio, once the circumstances that lead to classification in this portfolio according to the present rules have been overcome, at least the following copulative conditions must be met:

- No obligation of the debtor with the bank with more than 30 calendar days overdue.

- No new refinances granted to pay its obligations.

- At least one of the payments includes amortization of capital. This condition does not apply in the case of debtors who only have credits for financing higher education in accordance with Law No. 20,027.

- If the debtor has a credit with partial payment periods less than six months, has already made two payments.

- If the debtor must pay monthly fees for one or more credits, has paid four consecutive dues.

- The debtor does not appear with unpaid debts direct according to the information recast by CMF, except for insignificant amounts.

31

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

(v.iii) Provisions related to financing with FOGAPE COVID-19 guarantee.

On July 17, 2020, the CMF requested to determine specific provisions of the credits guaranteed by the FOGAPE COVID-19 guarantee, for which the expected losses were determined estimating the risk of each operation, without considering the substitution of credit quality of the guarantee, according to the corresponding individual or group analysis method, in accordance with the provisions of Chapter B-1 of the CNC. This procedure must be carried out in an aggregate manner, grouping all those operations to which the same deductible percentage is applicable.

The deductible is applied by the Fund Administrator, which must be borne by each financial institution and does not depend on each particular operation, but is determined based on the total of the balances guaranteed by the Fund, for each group of companies that have the same coverage, according to their net sales size.

(v.iv) Provisions related to financing with FOGAPE Reactivation guarantee.

To determine the provisions of the amounts guaranteed by the FOGAPE Reactivation, the Bank considers the substitution of the credit quality of the debtors for that of the FOGAPE, for all the types of financing indicated, up to the amount covered by the aforementioned guarantee. Naturally, the option to consider the risk attributable to FOGAPE may be made while said guarantee remains in force, without considering the capitalized interest, in accordance with the provisions of article 17 of the Fund Regulations.

Likewise, for the computation of the provisions of the amount not covered by the guarantee, corresponding to the debtors, the treatment must be differentiated according to the level of default of the refinanced credit and the grace period, which must consider the cumulative consecutive months grace period between the refinanced loan and other prior measures. For this purpose, the following situations should be considered:

- Refinancing with less than 60 days past due and less than 180 days of grace.

When the Bank grants the refinancing and is the current creditor, depending on the methodology used in accounting for provisions (standard or internal method) for the group portfolio, the computation of default and the expected loss parameters remain constant at the time to carry out the refinancing, as long as no payment is due.

In the case of debtors evaluated on an individual basis, their risk category is maintained at the time of rescheduling, which does not prevent them from being reclassified to the category that corresponds to them, in the event of a worsening of their payment capacity.

32

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

(v.iv) Provisions related to financing with FOGAPE COVID-19 guarantee, continued:

- Refinancing with greater than 60 days and less than 89 days past due or grace periods greater than 180 days and less than 360 days.

The provisions established in the previous point apply, and at least one of the following conditions must also be met:

i. In its credit granting policies, the Bank considers at least the following aspects:

a. A robust procedure for the categorization of viable debtors, which considers at least the sector and its solvency and liquidity situation.

b. Efficient mechanisms for monitoring the debtor’s situation, with formally defined internal governance.

ii. Interest is charged in the months of grace, in accordance with the guidelines established in article 15 letter a) of the Regulation, or there is a demand for payment in another credit with the bank. In the latter case, if noncompliance is observed, the carry forward rules contained in numerals 2.2 and 3.2 of Chapter B-1 of the CNC must be considered, depending on whether it is a credit subject to individual or group evaluation, respectively.

- Refinancing with grace periods greater than 360 days.

The Bank must apply the provisions established in Chapter B-1 of the CNC, considering the operation as a forced renegotiation and, therefore, apply the provisions that correspond to the portfolio in default.

33

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

(vi) Charge-offs

As a general rule, the charge-offs are produced when the contractual rights on cash flows end. In case of loans, even if the above does not happen, it will proceed to charge-offs the respective asset balances.

The charge-off refers to derecognition of the assets in the Consolidated Statement of Financial Position, related to the respective transaction and, therefore, the part that could not be past-due if a loan is payable in installments, or a lease.

(vi.i) Charge-offs of loans to customers

The charge-off must be to make using credit risk provisions constituted, whatever the cause for which the charge-off was produced.

Charge-off loans to customers, other than leasing operations, shall be made in accordance to the following circumstances occurs:

a) The Bank, based on all available information, concludes that will not obtain any cash flow of the credit recorded as an asset.

b) When the debt without executive title expires 90 days after it was recorded in asset.

c) At the time the term set by the statute of limitations runs out and as result legal actions are precluded in order to request payment through executive trial or upon rejection or abandonment of title execution issued by judicial and non-recourse resolution.

d) When past-due term of a transaction complies with the following:

Type of Loan	Term
Consumer loans - secured and unsecured	6 months
Other transactions - unsecured	24 months
Commercial loans - secured	36 months
Residential mortgage loans	48 months

The term represents the time elapsed since the date on which payment of all or part of the obligation in default became due.

34

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

(vi) Charge-offs, continued:

(vi.ii) Charge-offs of lease operations

Assets for leasing operations must be charge-offs against the following circumstances, whichever occurs first:

a) The Bank concludes that there is no possibility of the rent recoveries and the value of the property cannot be considered for purposes of recovery of the contract, either because the lessee have not the asset, for the property’s conditions, for expenses that involve its recovery, transfer and maintenance, due to technological obsolescence or absence of a history of your location and current situation.

b) When it complies the prescription term of actions to demand the payment through executory or upon rejection or abandonment of executory by court.

c) When past-due term of a transaction complies with the following:

Type of Loan	Term
Consumer leases	6 months
Other non-real estate lease transactions	12 months
Real estate leases (commercial or residential)	36 months

The term represents the time elapsed since the date on which payment of all or part of the obligation in default became due.

35

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial assets at amortized cost, continued:

Loans and accounts receivable from customers, continued:

(vi.iii) Written-off loans recoveries

Cash recoveries on charge-off loans including loans that were reacquired from the Central Bank of Chile are recorded directly in income in the Consolidated Statement of Income, as a reduction of the “Recoveries of written-off loans” item.

In the event that there are recovery in assets, is recognized in income the revenues for the amount they are incorporated in the asset. The same criteria will be followed if the leased assets are recovered after the charge-off of a lease operation, to incorporate those to the asset.

Any renegotiation of a credit already written off does not give rise to income, as long as the operation remains to have an impaired quality; the actual payments received must be treated as recoveries of credits written off, as indicated above.

Therefore, renegotiated credit can be recorded as an asset only if it has not deteriorated quality; also recognizing revenue from activation must be recorded like recovery of loans.

The same criteria should apply in the case that was give credit to pay a charge-off loan.

36

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Impairment due to credit risk of Financial assets at amortized cost and Financial assets at fair value through other comprehensive income (FVOCI):

In accordance with the established in Chapter A-2 of the CNC of the CMF, the impairment model of IFRS 9 will not be applied to loans in the category “Financial assets at amortized cost” (“Due from banks” and “Loans and accounts receivable from customers”), nor on “Contingent loans”, since the criteria for these instruments are defined in Chapters B-1 to B-3 of the CNC.

For the rest of the financial assets measured at Amortized Cost or FVOCI, the model on which impairment losses must be calculated corresponds to one of Expected Credit Loss (ECL) as established in IFRS 9.

Debt financial instruments whose subsequent valuation is at amortized cost or at FVOCI will be subject to impairment due to credit risk. On the contrary, those instruments at fair value through profit or loss do not require this measurement.

The measurement of impairment is carried out in accordance with a general impairment model that is based on the existence of 3 possible phases of the financial asset, the existence or not of a significant increase in credit risk and the condition of impairment. The 3 phases determine the amount of impairment that will be recognized as an expected credit loss, as well as the interest income that will be recorded at each reporting date. Each phase is listed below:

1. Phase 1:

a. Incorporates financial assets whose credit risk has not increased significantly since initial recognition.

b. Expected credit losses are recognized to 12-month.

c. Interest is recognized based on the gross amount on the balance sheet.

2. Phase 2:

a. Incorporates financial assets whose credit risk has increased significantly since initial recognition.

b. Expected credit losses are recognized throughout the life of the financial asset.

c. Interest is recognized based on the gross amount on the balance sheet.

3. Phase 3:

a. Incorporates impaired financial assets.

b. Expected credit losses are recognized throughout the life of the financial asset.

c. Interest is recognized based on the net amount (gross amount on the balance sheet less allowance for credit risk).

37

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Impairment of debt financial instruments measured at fair value through other comprehensive income

The Bank applies the value impairment requirements for the recognition and measurement of a value correction for losses to financial assets that are measured at fair value through other comprehensive income in accordance with IFRS 9. This value adjustment for losses is recognized in Other Comprehensive Income (OCI) and does not reduce the carrying amount of the financial asset in the Consolidated Statement of Financial Position. The accumulated loss recognized in OCI is recycled in results when derecognizing the financial assets.

Financial liabilities:

Classification of financial liabilities

Financial liabilities are classified in the following categories:

- Financial liabilities at amortized cost;

- Financial liabilities held for trading at fair value through profit or loss: Financial instruments are recorded in this item when the Bank's objective is to generate profits through purchases and sales with these instruments. This item includes financial derivative trading contracts that are liabilities, which will be measured subsequently at fair value.

- Financial liabilities designated as at fair value through profit or loss: The Bank has the option to irrevocably designate, at the time of initial recognition, a financial liability as measured at fair value through profit or loss if the application of this criterion eliminates or significantly reduces inconsistencies in the measurement or recognition, or if it is a group of financial liabilities, or a group of financial assets and liabilities, that is managed, and its performance evaluated, based on fair value in line with a risk management or investment strategy.

Valuation of financial liabilities:

Initial valuation:

Financial liabilities are initially recorded at fair value, less transaction costs that are directly attributable to the issuance of the instruments, except for financial instruments that are classified at fair value through profit or loss.

Variations in the value of financial liabilities due to the accrual of interest, UF indexation and similar concepts are recorded under the headings "Interest expenses" of the Consolidated Income Statement for the period in which the accrual occurred (see Note No. 30).

Subsequent valuation:

The changes in the valuations that will occur after the initial registration for reasons other than those mentioned in the previous paragraph, are treated as described below, based on the categories in which the financial liabilities are classified.

38

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Financial liabilities at amortized cost:

The liabilities recorded in this item are valued after their acquisition at their amortized cost, which is determined in accordance with the EIR method.

Financial liabilities held for trading and Financial liabilities designated as at fair value through profit or loss:

The liabilities recorded in these items are valued after their initial recognition at fair value and changes are recorded, at their net amount, under the items "Financial assets and liabilities for trading" and "Designated financial assets and liabilities at fair value through profit or loss” of the Consolidated Income Statement. However, the change in the credit risk of the liabilities designated under the fair value option is presented in "Other comprehensive income". Nevertheless, the variations originating from exchange differences are recorded in the caption "Foreign currency changes, UF indexation and accounting hedge" of the Consolidated Income Statement.

Derecognition of financial assets and liabilities

The Bank and its subsidiaries derecognize a financial asset from its Statement of Financial Position, when the contractual rights to the cash flows of the financial asset have expired or when the contractual rights to receive the cash flows of the financial asset are transferred during a transaction in which all ownership risks and rewards of the financial asset are transferred. Any portion of transferred financial assets that is created or retained by the Bank is recognized as a separate asset or liability.

When the Bank transfers a financial asset, it assesses to what extent it has retained the risks and rewards of ownership. In this case:

(a) If substantially all risks and rewards of ownership of the financial asset have been transferred, it is derecognized, and any rights or obligations created or retained upon transfer are recognized separately as assets or liabilities.

(b) If substantially all risks and rewards of ownership of the financial asset have been retained, the Bank continues to recognize it.

39

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(e) Financial Assets and Liabilities, continued:

Derecognition of financial assets and liabilities, continued:

(c) If substantially all risks and rewards of ownership of the financial asset are neither transferred nor retained, the Bank will determine if it has retained control of the financial asset. In this case:

(i) If the Bank has not retained control, the financial asset will be derecognized, and any rights or obligations created or retained upon transfer will be recognized separately as assets or liabilities.

(ii) If the Bank has retained control, it will continue to recognize the financial asset in the Consolidated Financial Statement by an amount equal to its exposure to changes in value that can experience and recognize a financial liability associated to the transferred financial asset.

The Bank derecognizes a financial liability (or a portion thereof) from its Consolidated Statement of Financial Position if, and only if, it has extinguished or, in other words, when the obligation specified in the corresponding contract has been paid or settled or has expired.

Compensation

Financial assets and liabilities are subject to compensation, so that their net amount is presented in the Consolidated Statement of Financial Position, when and only when the Bank has the right, legally enforceable, to offset the recognized amounts and intends to settle the net amount, or to realize the asset and settle the liability simultaneously.

Income and expenses are presented net only when permitted by accounting standards, or in the case of gains and losses arising from a group of similar transactions such as the Bank's trading and foreign exchange activity.

40

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(f) Functional currency:

The items included in the Financial Statements of Banco de Chile and its subsidiaries are valued using the currency of the primary economic environment in which it operates (functional currency). The functional currency of Banco de Chile is the Chilean peso, which is also the currency used to present the entity’s Consolidated Financial Statements, that is the currency of the primary economic environment in which the Bank operates, as well as obeying to the currency that influences in the costs and income structure.

(g) Transactions in foreign currency:

Transactions in currencies other than the functional currency are considered to be in foreign currency and are initially recorded at the exchange rate of the functional currency on the transaction date. Monetary assets and liabilities denominated in foreign currencies are converted using the exchange rate of the functional currency as of the date of the Consolidated Statement of Financial Position. All differences are recorded as a debit or credit to income.

As of March 31, 2022, the Bank and its subsidiaries applied the exchange rate of accounting representation according to the standards issued by the CMF, where assets expressed in dollars are shown to their equivalent value in Chilean pesos calculated using the following exchange rate of Ch$784.30 US$1 (Ch$852.63 US$1 as of March 31, 2021).

The amount of Ch$55,979 million for net foreign exchange transactions, net (Ch$30,198 million as of March 31, 2021) shown in the Consolidated Statements of Income, includes recognition of the effects of exchange rate variations on assets and liabilities in foreign currency or indexed to exchange rates, and the result of foreign exchange transactions conducted by the Bank and its subsidiaries.

(h) Operating Segments:

The Bank discloses information by segment in accordance with IFRS 8. The Bank’s operating segments are determined based on its different business units, considering the following:

(i) That it conducts business activities from which income is obtained and expenses are incurred (including income and expenses relating to transactions with other components of the same entity).

(ii) That its operating results are reviewed regularly by the entity’s highest decision-making authority for operating decisions, to decide about resource allocation for the segment and evaluate its performance; and

(iii) That separate financial information is available.

41

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(i) Statement of cash flows:

The Consolidated Statement of Cash Flows shows the changes in cash and cash equivalents derived from operating activities, investment and financing activities during the year. The indirect method has been used in the preparation of this statement of cash flows.

For the preparation of Consolidated Financial Statements of Cash Flow it is considered the following concepts:

(i) Cash and cash equivalents: corresponds to the item "Cash and deposits in banks", plus (minus) the net balance corresponding to operations with liquidation in progress that are shown in the Consolidated Statement of Financial Position, plus other cash equivalents such as investments in short-term debt financial instruments that meet the criteria to be considered "cash equivalents", for which they must have an original maturity of 90 days or less from the date of acquisition, be highly liquid, easily convertible into amounts known amounts of cash as of the date of the initial investment, and that the financial instruments are exposed to an insignificant risk of changes in value.

(ii) Operating activities: corresponds to normal activities of the Bank, as well as other activities that cannot classify like investing or financing activities.

(iii) Investing activities: correspond to the acquisition, sale or disposition other forms, of long-term assets and other investments that not include in cash and cash equivalent.

(iv) Financing activities: corresponds to the activities that produce changes in the amount and composition of the equity and the liabilities that are not included in the operating or investing activities.

42

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(j) Financial derivative contracts:

A “Financial Derivative” is a financial instrument whose value changes in response to changes in an observable market variable (such as an interest rate, exchange rate, the price of a financial instrument or a market index, including credit ratings), whose initial investment is very small in relation to other financial instruments with a similar response to changes in market conditions and which is generally settled at a future date.

The Bank maintains contracts of Derivative financial instruments, for cover the exposition of risk of foreign currency and interest rate. These contracts are recorded in the Consolidated Statement of Financial Position at their cost (included transactions costs) and subsequently measured at fair value. Derivative instruments are reported as an asset when their fair value is positive and as a liability when negative under the item “Derivative Instruments”.

Changes in fair value of derivative contracts held for trading purpose are included under “Profit (loss) net of financial operations”, in the Consolidated Statement of Income.

In addition, the Bank includes in the valorization of derivatives the “Credit valuation adjustment” (CVA), to reflect the counterparty risk in the determination of fair value and the Bank's own credit risk, known as "Debit valuation adjustment" (DVA).

Certain embedded derivatives in other financial instruments are treated as separate derivatives when their risk and characteristics are not closely related to those of the main contract and if the contract in its entirety is not recorded at its fair value with its unrealized gains and losses included in income.

(k) Financial derivative contracts for accounting hedges:

At the moment of subscription of a derivative contract must be designated by the Bank as a derivative instrument for trading or hedging purposes.

If a derivative instrument is classified as a hedging instrument, it can be:

(1) A hedge of the fair value of existing assets or liabilities or firm commitments, or;

(2) A hedge of cash flows related to existing assets or liabilities or forecasted transactions.

43

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(k) Financial derivative contracts for accounting hedges, continued:

A hedge relationship for accounting hedges purposes must comply with all of the following conditions:

(a) at its inception, the hedge relationship has been formally documented;

(b) it is expected that the hedge will be highly effective;

(c) the effectiveness of the hedge can be measured in a reasonable manner; and

(d) the hedge is highly effective with respect to the hedged risk on an ongoing basis and throughout the entire hedge relationship.

The Bank presents and measures individual hedges (where there is a specific identification of hedged item and hedged instruments) by classification, according to the following criteria:

Fair value hedges: Changes in the fair value of a derivative hedging instrument, designated as a fair value hedge, are recognized in income under the lines "Net interest income" and "Net indexation income" and/or "Foreign currency changes, UF indexation and accounting hedge”, depending on the type of risk covered. The hedged item is also presented at fair value in relation to the risk being hedged; gains or losses attributable to the hedged risk are recognized in income under the lines "Net interest income" and "Net income from UF indexation" and adjust the book value of the item subject to the hedge.

Cash flow hedge: Changes in the fair value of financial instruments derivative designated like “cash flow hedge” are recognised in “Cash flow accounting hedge” included in the Consolidated Other Comprehensive Income, to the extent that hedge is effective and hedge is reclassified to income in the item “Net interest income” and "Net income from UF indexation" and/or “Foreign currency changes, UF indexation and accounting hedge”, when hedged item affects the income of the Bank produced for the “interest rate risk” or “foreign exchange risk”, respectively. If the hedge is not effective, the changes in the fair value are recognized directly in the results of the year under the caption "Other financial result".

If the hedged instruments does not comply with criteria of cash flow accounting hedges, it expires or is sold, it suspend or executed, this hedge must be discontinued prospectively. Accumulated gains or losses recognised previously in the equity are maintained there until projected transactions occur, in that moment will be registered in Consolidated Statement of Income (in the item “Net interest income” and "Net income from UF indexation" and/or “Foreign currency changes, UF indexation and accounting hedge”, depend of the hedge), lesser than it foresees that the transaction will not execute, in this case it will be registered immediately in Consolidated Statement of Income (in the item “Net interest income” and "Net income from UF indexation" and/or “Foreign currency changes, UF indexation and accounting hedge”, depend of the hedge).

44

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(l) Intangible Assets:

Intangible assets are identified as non-monetary assets (separately identifiable from other assets) without physical substance which arise as a result of a legal transaction or are developed internally by the consolidated entities. They are assets whose cost can be estimated reliably and from which the consolidated entities have control and consider it probable that future economic benefits will be generated. Intangible assets are recorded initially at acquisition cost and are subsequently measured at cost less any accumulated amortization or any accumulated impairment losses.

Software or computer programs purchased by the Bank and its subsidiaries are accounted for at cost less accumulated amortization and impairment losses.

The subsequent expense in software assets is capitalized only when it increases the future economic benefit for the specific asset. All other expenses are recorded as an expense as incurred.

Amortization is recorded in income using the straight-line amortization method based on the estimated useful life of the software, from the date on which it is available for use. The estimated useful life of software is a maximum of 6 years.

(m) Property and equipment:

Property and equipment includes the amount of land, real estate, furniture, computer equipment and other installations owned by the consolidated entities and which are for own use. These assets are stated at historical cost less depreciation and accumulated impairment. This cost includes expenses than have been directly attributed to the asset’s acquisition.

Depreciation is recognized in the Consolidated Statements of Income on a straight-line basis over the estimated useful lives of each part of an item of property and equipment.

The estimated average useful lives for the years 2022 and 2021 are as follows:

- Buildings	50 years
- Installations	10 years
- Equipment	5 years
- Supplies and accessories	5 years

Maintenance expenses relating to those assets held for own uses are recorded as expenses in the year in which they are incurred.

45

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(n) Deferred taxes and income taxes:

The income tax provision of the Bank and its subsidiaries has been determined in conformity with current legal regulations.

The Bank and its subsidiaries recognize, when appropriate, deferred tax assets and liabilities for future estimates of tax effects attributable to temporary differences between the book and tax values of assets and liabilities. Deferred tax assets and liabilities are measured based on the tax rate expected to be applied, in accordance with current tax law, in the year that deferred tax assets are realized or liabilities are settled. The effects of future changes in tax legislation or tax rates are recognized in deferred taxes starting on the date of publication of the law approving such changes.

Deferred tax assets are recognized only when it is likely that future tax profits will be sufficient to recover deductions for temporary differences. According to instructions from the CMF, deferred taxes are presented in the Consolidated Statement of Financial Position according with IAS 12 "Income Tax".

(o) Assets received in lieu of payment:

Assets received or awarded in lieu of payment of loans and accounts receivable from customers are recorded, in the case of assets received in lieu of payment, at the price agreed by the parties, or otherwise, when the parties do not reach an agreement, at the amount at which the Bank is awarded those assets at a judicial auction.

Assets received in lieu of payment are classified under “Non-current assets and disposal groups held for sale” and they are recorded at the lower of its carrying amount or net realizable value, less charge-off and presented net of a portfolio valuation allowance. The CMF requires regulatory charge-offs if the asset is not sold within a one year of foreclosure.

(p) Investment properties:

Investments properties are real estate assets held to earn rental income or for capital appreciation or both, but are not held-for-sale in the ordinary course of business or used for administrative purposes. Investment properties are measured at cost, less accumulated depreciation and impairments and are presented under “Other Assets”.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, continued:

(q) Provisions, contingent assets and liabilities:

Provisions are liabilities involving uncertainty about their amount or maturity. They are recorded in the Consolidated Statement of Financial Position when the following requirements are jointly met:

(i) a present obligation has arisen from a past event;

(ii) as of the date of the Financial Statements it is probable that the Bank or its subsidiaries have to disburse resources to settle the obligation; and

(iii) the amount of these resources can be reliably measured.

A contingent asset or liability is any right or obligation arising from past events whose existence will be confirmed by one or more uncertain future events which are not within the control of the Bank.

Contingent credits are understood as operations or commitments in which the Bank assumes a credit risk by committing itself to third parties, in the event of a future event, to make a payment or disbursement that must be recovered from its clients.

The following are classified as contingent credits in off-balance sheet information:

i. Undrawn credit lines: Considers the unused amounts of lines of credit that allow customers to make use of credit without prior decisions by the bank.

ii. Undrawn credit lines with immediate termination: Considers those undrawn credit lines, defined in the previous numeral, that the bank can unconditionally cancel at any time and without prior notice, or for which its automatic cancellation is contemplated in case of deterioration of the debtor's solvency, as permitted by the current legal framework and the contractual conditions established between the parties.

iii. Contingent credits linked to the CAE: Correspond to credit commitments granted in accordance with Law No. 20,027 (“CAE”).

iv. Letters of credit for goods circulation operations: Considers the commitments that arise, both to the issuing bank and to the confirming bank, from self-settled commercial letters of credit with a maturity period of less than 1 year, arising from merchandise circulation operations (for example, confirmed foreign or documentary letters of credit). Includes documentary letters of credit issued by the Bank, which have not yet been negotiated.

v. Debt purchase commitments in local currency abroad: Note issuance facility (NIF) and revolving underwriting facility (RUF) are considered.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(q) Provisions, contingent assets and liabilities, continued:

vi. Transactions related to contingent events: Guarantee bonds with promissory notes referred to in Chapter 8-11 of the Actualized Standards Compilation are considered.

vii. Warranty by endorsement and sureties: Includes warranty by endorsement, sureties and standby letters of credit referred to in Chapter 8-10 of the Actualized Standards Compilation. In addition, it includes the payment guarantees of buyers in factoring operations, as indicated in Chapter 8-38 of that Compilation.

viii. Other credit commitments: It includes the unplaced amounts of committed credits, which must be disbursed on an agreed future date or processed when the contractually foreseen events occur with the client, as occurs in the case of irrevocable credit lines linked to the progress status of projects (in which for provisions purposes, both the gross exposure referred to in No. 3 and future increases in the amount of guarantees associated with committed disbursements must be considered).

Exposure to credit risk on contingent loans:

Until December 31, 2021, to calculate provisions on contingent loans, as indicated in Chapter B-3 of the Accounting Standards Compendium of the CMF, the amount of exposure was determined considering the percentage of the amounts of the contingent credits indicated below:

Type of contingent loan	Exposure
a) Warranty by endorsement and sureties		100	%
b) Confirmed foreign letters of credit		20	%
c) Issued letters of credit		20	%
d) Guarantee deposits		50	%
e) Undrawn credit lines		35	%
f) Other loan commitments:
- College education loans Law No. 20,027		15	%
- Others		100	%
g) Other contingent loans		100	%

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, continued:

(q) Provisions, contingent assets and liabilities, continued:

Beginning January 1, 2022, to calculate contingent provisions, the exposure amount that must be equal to the percentage of contingent amounts indicated below:

Type of contingent credit	Credit Conversion Factor
Undrawn credit lines with immediate termination		10	%
Contingent credits linked to the CAE		15	%
Letters of credit for goods circulation operations		20	%
Other undrawn credit lines		40	%
Debt purchase commitments in local currency abroad		50	%
Transactions related to contingent events		50	%
Warranty by endorsement and sureties		100	%
Other credit commitments		100	%
Other contingent loans		100	%

Notwithstanding, when dealing with transactions performed with customers with overdue loans as indicated in Chapter B-1 of the Compendium of Accounting Standards of the CMF, that exposure shall be equivalent to 100% of its contingent loans.

(r) Provisions for minimum dividends:

According with the Accounting Standards Compendium of the CMF, the Bank records within liabilities the portion of net income for the year that should be distributed to comply with the Corporations Law or its dividend policy. For these purposes, the Bank establishes a provision in a complementary equity account within retained earnings.

For purposes of calculating the provision of minimum dividends, the distributable net income is considered, which is defined as that which results from reducing or adding to the net income for the year, the correction of the value of the paid-in capital and reserves, due to the effects of the variation of the Consumer Price Index.

49

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(s) Employee benefits:

Employee benefits are all forms of consideration granted by an entity in exchange for services provided by employees or severance pay.

Short-term employee benefits are employee benefits (other than termination benefits) that are expected to be settled in full before twelve months after the end of the annual reporting period in which the employees have rendered the related services.

i) Staff vacations

The annual costs of vacations and staff benefits are recognized on an accrual basis.

(ii) Other short-term benefits

The entity contemplates for its employees an annual incentive plan for meeting objectives and individual contribution to the company’s results, which are eventually delivered, consisting of a certain number or portion of monthly salaries and are provisioned based on the estimated amount to be distributed.

Other long-term employee benefits are all employee benefits other than short-term employee benefits, post-employment benefits, and termination benefits.

(iii) Employee benefits for termination of employment contract

The Bank has agreed with part of the staff the payment of compensation to those who have completed 30 or 35 years of permanence, in the event that they retired from the Institution. The proportional part accrued by those employees who will have access to exercise the right to this benefit and who at the end of the year have not yet acquired it has been incorporated into this obligation.

The obligations of this benefit plan are valued according to the projected credit unit method, including as variables the staff turnover rate, the expected salary growth and the probability of using this benefit, discounted at the current rate for long-term operations (6.49% as of March 31, 2022 and 5.70% as of December 31, 2021).

The discount rate used corresponds to the rate of 10-year Bonds in pesos of the Central Bank of Chile (BCP).

Gains and losses arising from changes in actuarial variables are recognized in Other Comprehensive Income. There are no other additional costs that should be recognized by the Bank.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, continued:

(t) Earnings per share:

The basic earnings per share is determined by dividing the net income attributed to the Bank's owners in a period and the weighted average number of shares outstanding during that period.

Diluted earnings per share are determined similarly to basic earnings, but the weighted average number of outstanding shares is adjusted to take into account the potential dilutive effect of the options on shares, warrants and convertible debt. At the end of the periods ended March 31, 2022 and 2021 there are no concepts to adjust.

(u) Interest revenue and expense and UF indexation:

Interest income and expenses and UF indexation are recognized in the Consolidated Statement of Income using the effective interest rate method. The effective interest rate is the rate which exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument (or a shorter period) where appropriate, to the carrying amount of the financial asset or financial liability. To calculate the effective interest rate, the Bank determines cash flows by taking into account all contractual conditions of the financial instrument, excluding future credit losses.

The effective interest rate calculation includes all fees and other amounts paid or received that form part of the effective interest rate. Transaction costs include incremental costs that are directly attributable to the purchase or issuance of a financial asset or liability.

In the case of the impaired portfolio and current loans with a high risk of irrecoverability of loans and accounts receivable from customers, the Bank has applied a conservative position of discontinuing the accrual of interest and UF indexation on an accrual basis in the Consolidated Statement of Income, when the credit or one of its installments has been 90 days default in its payment.

(v) Commission income and expenses:

Revenue and expenses from fees are recognized in the Consolidated Income Statement using the criteria established in IFRS 15 "Revenue from contracts with customers”.

Under IFRS 15, revenues are recognized considering the terms of the contract with customers. Revenue is recognized when or as the performance obligation is satisfied by transferring the goods or services committed to the customer.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, continued:

(v) Commission income and expenses, continued:

Under IFRS 15, revenues are recognized using different criteria depending on their nature. The most significant are:

− Those that correspond to a singular act, when the act that originates them takes place.

− Those that originate in transactions or services that are extended over time, during the life of such transactions or services.

− Commissions on loan commitments and other fees related to credit operations are deferred (together with the incremental costs directly related to the placement) and recognized as an adjustment to the effective interest rate of the placement. In the case of loan commitments, when there is no certainty of the date of effective placement, the commissions are recognized in the period of the commitment that originates it on a linear basis.

The fees registered by the Bank correspond mainly to:

− Commissions for credit prepayment: These commissions are accrued at the time the credits are prepaid.

− Commissions for lines of credit and overdrafts: These commissions are accrued in the period related to the granting of lines of credit and overdrafts in checking accounts.

− Commissions for warranty by endorsement and letters of credit: These commissions are accrued in the period related to the granting by the bank of payment guarantees for real or contingent obligations of third parties.

− Commissions for card services: Correspond to commissions accrued for the period, related to the use of credit cards, debit cards and other.

− Commissions for account management: Includes commissions for the maintenance of current accounts and other deposit accounts.

− Commissions for collections and payments: Includes commissions generated by the collection and payment services provided by the Bank.

− Commissions for intermediation and management of securities: correspond to income from brokerage service, placements, administration and custody of securities.

− Remuneration for administration of mutual funds, investment funds or others: corresponds to the commissions from the General Fund Administrator for the administration of third-party funds.

− Remuneration for brokerage and insurance consulting services: Income from brokerage and insurance advice by the Bank or its subsidiaries is included.

− Commissions for factoring operations services: Commissions for factoring operations services performed by the Bank are included.

− Commissions for services of financial leasing operations: Commissions for services of financial leasing operations carried out by the Bank as lessor are included.

− Commissions for financial consulting services: commissions for financial advisory services performed by the Bank and its subsidiary are included.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, continued:

(v) Commission income and expenses, continued:

− Other commissions earned: includes income generated from foreign currency exchange, issuance bank guarantees, issuance of bank check, use of distribution channels, agreement on the use of a brand and placement of financial products and cash transfers, and recognition of payments associated with commercial alliances, among others.

Commission expenses include:

− Commissions for card operations: commissions paid for credit and debit card operations are included.

− Commissions for licensing the use of card brands

− Expenses for obligations of loyalty and merits programs for card customers.

− Commissions for operations with securities: commissions for deposit and custody of securities and brokerage of securities are included.

− Other commissions for services received: Commissions are included for guarantees and endorsements of Bank obligations, for foreign trade operations, for correspondent banks in the country and abroad, for ATMs and electronic fund transfer services.

− Commissions for compensation of large value payments: corresponds to commissions paid to entities such as ComBanc, CCLV Contraparte Central, etc.

(w) Impairment of non-financial assets

The carrying amounts of the non-financial assets of the Bank and its subsidiaries, are reviewed throughout the year and especially at each reporting date, to determine if any indication of impairment exists. If such indication exists, the recoverable amount of the asset is then estimated.

Impairment losses recognized in prior years are assessed at each reporting date in search of any indication that the loss has decreased or disappeared. An impairment loss is reversed if there has been a change in the estimations used to determine the recoverable amount. An impairment loss is reverted only to the extent that the book value of the asset does not exceed the carrying. Impairment losses related to goodwill cannot be reversed in future years.

The Bank assesses at each reporting date and on an ongoing basis whether there is an indication that an asset may be impaired. If any indication exists, the Bank estimates the asset’s recoverable amount. An asset’s recoverable amount is the major value between fair value (less costs to sell) and its value in use. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated cash flows are discounted to their present value using a discount rate that reflects the current market assessments of the time value of money and risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, share prices and other available fair value indicators.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, continued:

(x) Financial and operating leases:

(i) The Bank acting as lessor

Assets leased to customers under agreements which transfer substantially all the risks and rewards of ownership, with or without ultimate legal title, are classified as finance leases. When assets held are subject to a finance lease, the leased assets are derecognized and a receivable is recognized which is equal to the present value of the minimum lease payments, discounted at the interest rate implicit in the lease. Initial direct costs incurred in negotiating, and arranging a finance lease are incorporated into the receivable through the discount rate applied to the lease. Finance lease income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the finance lease.

Assets leased to customers under agreements, which do not transfer substantially all the risks, and rewards of ownership are classified as operating leases.

The leased investment properties, under the operating lease modality, are included in the Consolidated Statement of Financial Position as “Other assets” and depreciation is determined on the book value of these assets, applying a proportion of the value in a systematic way on the economic use of the estimated useful life. Lease income is recognized on a straight-line basis over the lease term.

(ii) The Bank acting as lessee

A contract is, or contains a lease, if one party has the right to control the use of an identified asset for a period of time in exchange for a regular payment.

On the start date of a lease, a right-to-use assets leased is determined at cost, which includes the amount of the initial measurement of the lease liability plus other disbursements made.

The amount of the lease liability is measured at the present value of future lease payments that have not been paid on that date, which are discounted using the Bank's incremental financing interest rate.

The right-of-use asset is measured using the cost model, less accumulated depreciation and accumulated losses due to impairment of value, depreciation of the right-of-use asset, is recognized in the Consolidated Statements of Income based on the linear depreciation method from the start date and until the end of the lease term.

The monthly variation of the UF for the contracts established in said monetary unit should be treated as a new measurement, therefore the UF readjustment modifies the value of the lease liability, and in parallel, the amount of the right-of-use asset must be adjusted by this effect.

After the start date, the lease liability is measured by lowering the carrying amount to reflect the lease payments made and the modifications to the lease.

According to IFRS 16 "Leases" the Bank does not apply this rule to contracts whose duration is 12 months or less and those that contain an underlying asset of low value. In these cases, payments are recognized as a lease expense.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, continued:

(y) Fiduciary activities:

The Bank provides trust and other fiduciary services that result in the holding or investing of assets on behalf of the clients. Assets held in a fiduciary capacity are not reported in the Consolidated Financial Statements, as they are not the assets of the Bank. Contingencies and commitments arising from this activity are disclosed in Note No. 29.

(z) Customer loyalty program:

The Bank maintains a loyalty program to provide incentives to its customers, which allows to acquire goods and/or services, based on the exchange of prize points ("Dolares-Premio"), which are granted based on the purchases made with Bank's credit cards and the compliance of certain conditions established in said program. A third party makes the consideration for the prizes. In accordance with IFRS 15, these associated benefit plans have the necessary provisions to meet the delivery of committed future performance obligations.

(aa) Additional provisions:

In accordance to the CMF regulations, the banks have recorded additional allowances for its individually evaluated loan portfolio, taking into consideration the expected impairment of this portfolio. The calculation of this allowance is performed based on the Bank’s historical experience and considering possible future adverse macroeconomic conditions or circumstances that could affect a specific sector.

The provisions made in order to forestall the risk of macroeconomic fluctuations should anticipate situations reversal of expansionary economic cycles in the future, could translate into a worsening in the conditions of the economic environment and thus, function as a countercyclical mechanism accumulation of additional provisions when the scenario is favorable and release or assignment to specific provisions when environmental conditions deteriorate.

According to the above, additional provisions must always correspond to general provisions on commercial, consumer or mortgage loans, or segments identified, and in no case may be used to offset weaknesses of the models used by the Bank.

As of March 31, 2022, the balance of additional provisions amounts to Ch$610,252 million (Ch$540,252 million in December 2021), which are presented in the caption "Provisions for dividends" of liabilities in the Consolidated Statement of Financial Position.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

2. Summary of Significant Accounting Principles, continued:

(ac) Fair value measurement

“Fair value” is understood as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants in a principal (or more advantageous) market at the measurement date under current market conditions, independent whether that price is directly observable or estimated using another valuation technique. The most objective and usual reference of fair value is the price that would be paid in an active, transparent and deep market (“quoted price” or “market price”).

When available, the Bank estimates the fair value of an instrument using quoted prices in an active market for that instrument. A market is considered active if quoted prices are readily and regularly available and represent actual and regularly occurring market transactions on an arm’s length basis.

If a market for a financial instrument is not active, the Bank establishes fair value using a valuation technique. These valuation techniques include the use of recent market transactions between knowledgeable, willing parties in an arm’s length transaction, if available, as well as references to the fair value of other instruments that are substantially the same, discounted cash flows and options pricing models.

The chosen valuation technique makes maximum use of information obtained in the market, using the least possible amount of data estimated by the Bank, incorporates all the factors that market participants would consider to establish the price, and will be consistent with generally accepted economic methodologies for calculating the price of financial instruments. The variables used by the valuation technique reasonably represent market expectations and reflect the return-risk factors inherent to the financial instrument. Periodically, the Bank calibrates the valuation techniques and tests it for validity using prices from observable current market transaction in the same instrument or based on available observable market information.

The best evidence of the fair value of a financial instrument at initial recognition is the transaction price (i.e. the fair value of the consideration given or received) unless the fair value of that instrument is evidenced by comparison with other observable current market transactions in the same instrument (i.e. without modification or repackaging) or based on a valuation technique whose variables include only data from observable markets. However, when transaction price provides the best evidence of fair value at initial recognition, the financial instrument is initially measured at the transaction price and any difference between this price and the value initially obtained from a valuation model is subsequently recognized in incomes.

On the other hand, it should be noted that the Bank has financial assets and liabilities offset each other’s market risks, based on which average market prices are used as a basis for determining their fair value.

Then, the fair value estimates obtained from models are adjusted for any other factors, such as liquidity risk or model uncertainties; to the extent that the Bank believes that a third-party market participant would take them into account in pricing a transaction.

The Bank’s fair value disclosures are included in Note No. 44.

(ac) Reclassifications:

As of March 31, 2022, there have been no significant reclassifications.

56

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

3. New Accounting Pronouncements Issued and Adopted, or Issued that have not yet been Adopted:

Standards approved and/or modified by the International Accounting Standards Board (IASB) and by the Commission for the Financial Market (CMF):

Standards and interpretations that have been adopted in these Consolidated Financial Statements.

As of the date of issuance of these Consolidated Financial Statements, the new accounting pronouncements issued by both the IASB and the CMF, which have been adopted by the Bank and its subsidiaries, are detailed below:

Accounting standards issued by IASB.

Limited Scope Amendments and Annual Improvements 2018-2020.

In May 2020, the IASB published a package of amendments of limited scope, as well as the 2018-2020 Annual Improvements, whose changes clarify the wording or correct minor consequences, omissions or conflicts between the requirements of the Standards.

Among other modifications, it contains amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets, which specify the costs that an entity must include when evaluating whether a contract will cause losses, these costs include those that are directly related to the contract and may be incremental costs of fulfilling that contract (for example, direct labor and materials), or an allocation of other costs that relate directly to the fulfillment of contracts (for example, the allocation of the depreciation charge for an item of property, plant and equipment used to perform the contract).

These amendments are effective as of January 1, 2022. Banco de Chile and its subsidiaries had no impact on the Interim Consolidated Statements of Position as a result of the application of these amendments.

Accounting standards issued by CMF.

Circulars No. 2,243, No. 2,249 and No. 2,295 - Amends Compendium of Accounting Standards for Banks.

On December 20, 2019, the CMF published Circular No. 2,243, which updates the instructions of the Accounting Standards Compendium (CNC) for Banks.

The changes seek achieve greater convergence with IFRS, as well as an improvement in the quality of financial information, to contribute to the financial stability and transparency of the banking system.

In April 2020, the CMF issued Circular No. 2,249, which postponed the entry into force of the new CNCB to January 1, 2022, with a transition date of January 1, 2021.

57

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

3. New Accounting Pronouncements Issued and Adopted, or Issued that have not yet been Adopted, continued:

Notwithstanding the foregoing, the change of criteria for the suspension of the recognition of interest income and UF indexation on an accrual basis according to the Chapter B-2, had to be adopted no later than January 1, 2022. By virtue of this standard, the Bank’s Management implemented in advance during 2021 the suspension of the recognition of interest and readjustments on an accrual basis after 90 days of delinquency, which did not have a significant impact on the Consolidated Financial Statements, it should be noted that Before the change, the suspension of the recognition of interest income and UF indexation occurred after 6 months of default.

On October 7, 2021, the CMF issued Circular No. 2,295, which updates the Compendium of Accounting Standards for Banks (CNCB) that is in force from 2022 and introduces various adjustments to the files of the Information System Manual. In this way, the accounting information necessary to agree the Financial Statements with the full implementation of Basel III is incorporated, in addition to making some clarifications in its instructions, arising both from the internal analysis and from inquiries received from actors of the banking system. Likewise, this Circular adds a term to implement the criterion for grouping debtors whose aggregate exposure must be measured jointly, established in literal i) of No. 3 of Chapter B-1, which must be considered as of July 1, 2022.

As a result of the application of the new CNC instructions, the main equity effects measured as of January 1, 2022 correspond to the valuation of financial assets due to the adoption of IFRS 9 in replacement of IAS 39, in provisions for contingent credits as a result of the modification of the Credit Conversion Factor (CCF) and in the deferred taxes associated with these modifications. The foregoing had an impact of an increase in equity for a net amount of approximately Ch$70,508 million (see note No. 4 Accounting Changes).

Circular No. 2,297. On the control of the limit that banks must observe when granting financing to business groups.

On November 3, 2021, the new Chapter 12-16 “Limit of credits granted to business groups” is incorporated into the Updated Compilation of Regulations for banks (RAN by its Spanish initials), which establishes the scope and exceptions for the control of the credit limit granted to business groups referred to in the seventh subparagraph of article 84 No. 1 of the General Banking Law, together with the manner of making up the payrolls of the business groups and the entities that compose them for that purpose; as well as, the way of computing the credits granted to entities belonging to the same business group is defined, in order to determine their degree of credit concentration and compliance with the aforementioned limit. The new file D60 “Operations with entities belonging to the same business group” is incorporated into the Information System Manual (ISM), the purpose of which is for banks to report monthly the information referring to the daily operations carried out with entities belonging to a same business group, in addition to identifying the groups to which they belong and the amounts owed.

The adoption of this circular does not have significant impacts for the Bank.

58

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

3. New Accounting Pronouncements Issued and Adopted, or Issued that have not yet been Adopted, continued:

Circular No. 2,305. Amendment to the annex for the disclosure of Capital Adequacy Ratios of chapter C-1 of the CNC.

On February 16, 2022, the CMF published this circular that modifies Table No. 2 of Annex No. 6 of Chapter C-1 of the CNC, in which it is required to disclose in the quarterly and annual Consolidated Financial Statements a summary of capital adequacy ratios and regulatory compliance ratios according to Basel III.

The modification is due to the fact that the CMF considers that the current version of this table is not broad enough to collect information to assess whether the bank’s capital adequacy level meets the regulatory requirements at all levels of capital, as it is, for example, to determine the deficit of the capital buffers that defines the percentage of dividends that the bank can distribute by virtue of what is stated in Chapter 21-12 of the Updated Compilation of Regulations for banks. Additionally, the table asks to disclose the level of compliance of the buffers in the Tier 1 Capital.

The adoption of these disclosures is included in these Interim Consolidated Financial Statements (see note No. 48).

Circular No. 2,307. Updates and modifies the administration regulations of the guarantee fund for small and medium-sized entrepreneurs.

On February 24, 2022, this circular was issued that relaxes the requirements and conditions for the delivery of financing with a FOGAPE guarantee and, at the same time, safeguards an adequate management of the credit risk of the institutions that avail themselves of said guarantees.

The new dispositions apply to future bids carried out by the Administrator of the Fund (Banco Estado).

The adoption of this circular has no impact on these Interim Consolidated Financial Statements.

Circulars issued in the process of implementing the Basel III standards.

As of the date of issuance of these Consolidated Statements of Financial Position, the CMF has issued the following circulars related to the regulatory framework of Basel III:

Circular 2,270. Issued on September 11, 2020, sets the general criteria and guidelines for the determination of additional equity requirements as a result of the supervision process, called Pillar 2.

This standard updates Chapter 1-13 “Management and solvency classification” and introduces the new Chapter 21-13 “Evaluation of the adequacy of effective equity of banks” to the RAN.

59

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

3. New Accounting Pronouncements Issued and Adopted, or Issued that have not yet been Adopted, continued:

This standard also establishes that the effective equity self-assessment report to be submitted by banks during 2021 will be based only on credit risk, and the one for 2022 will additionally incorporate market and operational risks. As of 2023, the report with all its sections will be required, considering all the material risks of the institution.

Circular No. 2,272. September 25, 2020, the CMF published the regulations that define the operating procedures for the calculation, implementation and supervision of additional capital charges, known as capital buffers (Conservation Buffer and a Countercyclical Buffer).

This rule incorporates Chapter 21-12 “Additional basic capital, articles 66 bis and 66 ter of the General Banking Act (LGB, for its Spanish initials)” into the RAN. This rule establishes that, as of December 1, 2021, the requirement of the Conservation Buffer will be 0.625%, increasing by the same percentage each year, until reaching the regime on December 1, 2024. The same transitory requirement will apply to the maximum value of the Countercyclical Buffer that can be defined by the Chile Central Bank.

Circular No. 2,273. On October 5, 2020, the CMF issued the norm that regulates the calculation of the relationship between Common Equity Tier 1 and total assets (leverage ratio). Incorporates Chapter 21-30 “Relationship between Common Equity Tier 1 and total assets” into the RAN. The standard introduces improvements both in the measurement of Common Equity Tier 1 and of the bank’s total assets.

This standard is effective as of December 1, 2020, without prejudice to the transitory measures for the calculation of regulatory capital, contemplated in Title V of Chapter 21-1 “Equity for legal and regulatory purposes” of the RAN.

Circular No. 2,274. On October 8, 2020, the CMF established the guidelines for calculating equity for legal and regulatory purposes, debugging low quality items or whose value is uncertain in a settlement scenario and sets prudential concentration rules, in accordance with the current legal framework. Incorporates Chapter 21-1 “Equity for legal and regulatory purposes” replacing Chapter 12-1 “Equity for legal and regulatory purposes” into the RAN.

The first adjustment must be made on December 1, 2022, corresponding to 15% of the discounts. This amount will increase to 30% on December 1, 2023 and 65% on December 1, 2024, until reaching full implementation as of December 1, 2025.

Circular No. 2,276. On November 2, 2020, the CMF, with the prior favorable agreement of the Central Bank of Chile, established the dispositions that have as a reference framework the evaluation methodology established by the Basel Committee on Banking Supervision and international practice, considered for the identification and treatment of banks classified as systemically important at the local level. It incorporates into the RAN Chapter 21-11 “Factors and methodology for banks or group of banks rated as systemically important and requirements that may be imposed as a result of this rating”.

The requirements derived from the first application may be gradually established. The initial charge in December 2021 will be 0% and will increase by 25% each year until reaching the regime in December 2025.

60

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

3. New Accounting Pronouncements Issued and Adopted, or Issued that have not yet been Adopted, continued:

Circular No. 2,279. On November 24, 2020, the CMF incorporated Chapter 21-2 into the RAN, which contains the minimum requirements and conditions that preference shares and bonds with no fixed maturity term must satisfy in article 55 bis of the LGB and Chapter 21-3 of the RAN which contains the minimum requirements and conditions that subordinate bonds must satisfy in article 55 of the LGB, this chapter repeals and replaces chapter 9-6 of the RAN. These regulations came into effect on December 1, 2020, the date on which banks determined the level of capital AT1 and T2 that is applicable, in accordance with the regulations.

During the first year of application, subordinated bonds and voluntary provisions may be computed as equivalent to AT1 instruments, with a limit of 1.5% of the RWA net of required provisions. From December 1, 2021, the substitution limit will progressively decrease (by 0.5%) to reach 0% in 4 years.

Circular No. 2,280. On December 1, 2020, the CMF issued the definitive norm related to the standardized methodology for computing ORWAs, incorporating chapter 21-8 to the RAN. The dispositions of this new Chapter consider the methodology established by the Basel Committee on Banking Supervision as a reference framework.

For the computation of operational risk, a single standard method is established, in accordance with the recommendations of the aforementioned Committee, not allowing the use of own methodologies for this type of risk.

The regulations entered into force on December 1, 2020. Also, it was established that until December 1, 2021, Operational Risk-Weighted Assets are equal to zero.

Circular No. 2,281. Issued on December 1, 2020, it corresponds to the definitive regulations related to the determination of the Credit Risk-Weighted Assets, incorporating chapter 21-6 to the RAN.

As set out in the Article 67 of the LGB, it is up to the CMF to establish standardized methodologies to cover the relevant risks of banking companies, among which is credit risk, with a prior favorable agreement from the Central Bank of Chile.

This new standard includes a transitory disposition, which establishes that the computation of Credit Risk-Weighted Assets is carried out in accordance with the current dispositions of Title II of Chapter 12-1 of the RAN, until November 30, 2021, and the new methodology must be applied from December 1, 2021.

Circular No. 2,282. Issued on December 1, 2020, this standard incorporated the new Chapter 21-7 on the determination of Market Risk-Weighted Assets (MRWA) into the RAN.

For the application of the provisions of this new Chapter, which will be in force as of December 1, 2020, a transitional disposition is contemplated that considers a market risk weight equal to zero until December 1, 2021.

61

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

3. New Accounting Pronouncements Issued and Adopted, or Issued that have not yet been Adopted, continued:

Circular No. 2,283. On December 1, 2020, the CMF published the definitive regulation related to the promotion of market discipline and transparency through the disclosure of information requirements from banking entities (Pillar 3), incorporating Chapter 21-20 into the Updated Compilation of Standards (RAN).

The information referred to in this new Chapter is effective as of December 1, 2022 and must be published for the first time in April 2023 with information regarding the January-March quarter of said year.

Circular No. 2,284. On December 31, 2020, the CMF creates the file “Rating of systemically important banks” (R11), related to the measurement of the systemic importance index and dated January 26, 2021, through Circular No. 2,286, the instructions for the preparation of the new R11 file are supplemented.

On March 30, 2022, the CMF reported that its Board approved Resolution No. 2,044 on the rating of systemically important banks and the additional requirements for them, assigning the Bank an additional CET 1 Capital charge with respect to the risk-weighted assets of 1.25%.

Circular No. 2,288. On April 27, 2021, the CMF creates the files “Capital adequacy limits and effective equity” (R01), “Regulatory capital instruments” (R02), “Credit risk-weighted assets” (R06), “Market risk-weighted assets” (R07) and “Operational risk-weighted assets” (R08).

Circular Letter No. 1,207. On April 28, 2021, the CMF specified that the subordinated bonds and additional provisions that are accounted for as equivalent to preferred shares or bonds without a fixed maturity term according to the third transitory article of Law No. 21,130, must be adapted to the limits established in literals c) and d) of article 66 of the General Banking Act.

Circular No. 2,290. On May 28, 2021, the CMF specifies the implementation calendar of the new Risk System files incorporated into the Information Systems Manual (ISM).

Circular No. 2,292. On August 19, 2021, the CMF incorporates modifications to the RAN, Chapter B-1 “Provisions for credit risk” of the CNC, which governs from the year 2022, incorporates more precise conditions to determine the debtors that must be evaluated using models based on group analysis and modifications to file R08 on operational risk-weighted assets of the Information System Manual (ISM).

Circular Letter No. 1,226. On October 7, 2021, the CMF clarifies aspects of the procedure that banks must follow for the registration of bonds without a fixed maturity or perpetual term referred to in article 55 bis of the General Banking Act, in those cases in which the issuance and placement is intended to be carried out entirely abroad.

Circular No. 2,296. On November 2, 2021, the CMF incorporates modifications to Chapter 1-13 “Classification of management and capital adequacy” of the Updated Compilation of Standards (RAN). In order to specify the criteria used to classify banks by capital adequacy.

62

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

3. New Accounting Pronouncements Issued and Adopted, or Issued that have not yet been Adopted, continued:

Circular No. 2,300. On November 25, 2021, the CMF establishes clarifications to the definition of subfactors of the index of systemic importance, contained in Table 106 of the Bank Information System Manual (ISM).

Circular No. 2,303. On December 24, 2021, the CMF incorporated adjustments to Chapter 21-2 “Additional Tier 1 Capital Instruments for the constitution of effective equity: preferred shares and bonds without a fixed maturity term of article 55 bis of the General Law of Banks” and Chapter 21-6 “Determination of credit risk-weighted assets” of the Updated Compilation of Standards (RAN).

New Standards and interpretations that have been issued but their application date is not yet in force:

The following is a summary of new standards, interpretations and improvements to the International Financial Reporting Standards issued by the International Accounting Standards Board (IASB) that are not yet effective as of March 31, 2022.

Accounting standards issued by IASB.

IAS 28 Investments in Associates and Joint Venture and IFRS 10 Consolidated Financial Statements.

In September 2014, the IASB published this modification, which clarifies the scope of the profits and losses recognized in a transaction that involves an associate or joint venture, and that this depends on whether the asset sold or contribution constitutes a business. Therefore, the IASB concluded that all gains or losses should be recognized against loss of control of a business.

Likewise, the gains or losses that result from the sale or contribution of a subsidiary that does not constitute a business (definition of IFRS 3) to an associate or joint venture should be recognized only to the extent of unrelated interests in the associate or joint venture.

During December 2015, the IASB agreed to set the effective date of this modification in the future, allowing its immediate application.

Banco de Chile and its subsidiaries will have no impact on the Consolidated Financial Statements as a result of the application of this amendment.

IAS 1 Presentation of Financial Statements and IFRS Practice Statement No. 2 Accounting Policy Disclosures.

In February 2021, the IASB published amendments to IAS 1 to require companies to disclose material information on accounting policies, the foregoing in order to improve the disclosures of their accounting policies and provide useful information to investors and other users of financial statements.

63

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

3. New Accounting Pronouncements Issued and Adopted, or Issued that have not yet been Adopted, continued:

To help entities apply the amendments to IAS 1, the Board also amended IFRS Practice Statement No. 2 to illustrate how an entity can judge whether accounting policy information is material to its financial statements.

The amendments to IAS 1 will be effective for Financial Statement presentation periods beginning on or after January 1, 2023. Early application is permitted. If an entity applies those amendments to prior periods, it must disclose that fact.

The application of this amendment will not generate material impacts on the disclosure of accounting policies in the Consolidated Financial Statements of Banco de Chile and its subsidiaries.

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Definition of Accounting Estimate.

In February 2021, the IASB incorporated changes to the definition of accounting estimates contained in IAS 8, the amendments to IAS are intended to help entities distinguish changes in accounting estimates from changes in accounting policies.

The amendments to IAS 8 will be effective for Financial Statement presentation periods beginning on or after January 1, 2023. Early application is permitted.

The application of this amendment will not have an impact on the Consolidated Financial Statements of Banco de Chile and its subsidiaries.

IAS 12 Income Tax.

In May 2021 the IASB published amendments to IAS 12, to specify how companies should account for deferred taxes on transactions such as leases and decommissioning obligations.

IAS 12 Income Tax specifies how a company accounts for income tax, including deferred tax, which represents tax to be paid or recovered in the future. In certain circumstances, companies are exempt from recognizing deferred taxes when they first recognize assets or liabilities. Prior to the amendment, there was some uncertainty as to whether the exemption applied to transactions such as leases and decommissioning obligations, transactions for which companies recognize both an asset and a liability.

The amendments clarify that the exemption does not apply and that companies are required to recognize deferred taxes on such transactions. The purpose of the amendments is to reduce the differences in reporting deferred tax on leases and decommissioning obligations.

The amendments are effective for the presentation periods of the Financial Statements beginning on January 1, 2023, and early application is permitted.

The implementation of this amendment will not have a material impact on Banco de Chile and its subsidiaries.

64

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

4. Accounting Changes:

The CMF through its Circular No. 2,243 dated December 20, 2019, subsequently supplemented by Circular No. 2,295 dated October 7, 2021, released the rules that update the instructions of the Compendium of Accounting Standards for Banks (CNC) effective as of January 1, 2022.

These modifications seek to achieve greater convergence with IFRS, as well as an improvement in the quality of financial information, to contribute to the financial stability and transparency of the banking system.

The main changes introduced to the CNC correspond to:

1) Incorporation of new presentation formats for the Statements of Financial Position, Statements of Income, Statements of Changes in Equity and Statements of Cash Flows, as well as the incorporation and modification of some disclosures, among which stand out: note on financial assets at amortized cost and note on risk management and reporting, in order to better comply with the disclosure criteria contained in IFRS 7. In addition, the disclosures on related parties are aligned according to IAS 24.

2) Incorporation of a Financial Report, which must be prepared in accordance with IASB practice document No. 1, which will complement the information provided by the interim and annual financial statements.

3) Changes in the accounting plan of Chapter C-3 of the CNC, both in the coding of accounts, as well as in their description. The foregoing corresponds to the detailed information of the formats for the Statement of Financial Position, Statement of Income and the Statement of Other Comprehensive Income.

4) Changes in the presentation of financial instruments in the Statement of Financial Position and Statement of Income, when adopting IFRS 9 to replace IAS 39.

5) Incorporation of IFRS 9 with the exception of Chapter 5.5 on impairment of loans classified as “financial assets at amortized cost”. This exception is mainly due to prudential criteria set by the CMF. These criteria have given rise, over time, to the establishment of standard models that banking institutions must apply to determine the impairment of the credit portfolio.

6) Modification of the criteria for the suspension of the recognition of interest income and UF indexation on an accrual basis, for any credit that presents a delinquency equal to or greater than 90 days.

65

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

4. Accounting Changes, continued:

In accordance with the instructions of the CMF defined in Chapter E of the CNC, the implementation adjustments made in the transition financial statements must be treated as adjustments to a pro forma financial statement.

The reconciliations presented below show the quantification of the impacts of the transition to the new standards, according to the following:

4.1 Reconciliation of transition effects in the Consolidated Statement of Financial Position as of January 1, 2021.

4.2 Reconciliation of transition effects in the Consolidated Statement of Financial Position as of December 31, 2021.

4.3 Reconciliation of the Summarized Interim Consolidated Income Statement for the period ended March 31, 2021.

4.4 Reconciliation of the Consolidated Interim Statement of Comprehensive Income summarized for the period ended March 31, 2021.

4.5 Reconciliation of the Summarized Interim Consolidated Cash Flow Statement for the period ended March 31, 2021.

66

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

4. Accounting Changes, continued:

4.1 Reconciliation of transition effects in the Consolidated Statement of Financial Position as of January 1, 2021.

Concept	01.01.2021 Previous CNC		Reclassification			Ref.	Adjustment			Ref.		01.01.2021 Current CNC
	MCh$		MCh$				MCh$					MCh$
ASSETS
Cash and due from banks		2,560,216		—				—					2,560,216
Transactions in the course of collection		582,308		(49,541	)	a)		—					532,767
Financial assets held-for-trading		4,666,156		(4,666,156	)	b)		—					—
Investment under resale agreements		76,407		(76,407	)	c)		—					—
Financial assets held for trading at fair value through profit or loss:
Derivative financial instruments		2,618,004		(51,062	)	d)		—					2,566,942
Debt financial instruments		—		4,264,251		b)		—					4,264,251
Others		—		401,905		b)		—					401,905
Financial assets available-for-sale		1,060,523		(1,060,523	)	e)		—					—
Non-trading financial assets mandatorily measured at fair value through profit or loss		—		—				—					—
Financial assets at fair value through profit or loss		—		—				—					—
Financial assets at fair value through other comprehensive income:
Debt financial instruments		—		1,060,523		e)		—					1,060,523
Other financial instruments		—		—				—					—
Derivative financial instruments for hedging purposes		—		51,062		d)		—					51,062
Financial assets held-to-maturity		—		—				—					—
Financial assets at amortized cost:
Rights by resale agreements and securities lending		—		76,407		c)		—					76,407
Debt financial instruments		—		—				—					—
Loans and advances to Banks		2,938,991		—				—					2,938,991
Loans to customers - Commercial loans		17,169,744		(20,705	)	g)		—					17,149,039
Loans to customers - Residential mortgage loans		9,354,890		—				—					9,354,890
Loans to customers - Consumer loans		3,665,424		—				—					3,665,424
Investments in other companies		44,649		—				4,958			d)		49,607
Intangible assets		60,701		—				—					60,701
Property and equipment		217,928		—				—					217,928
Right-of-use assets		118,829		—				—					118,829
Current tax assets		22,949		—				—					22,949
Deferred tax assets		357,945		—				(1,339	)		d)		356,606
Other assets		579,467		63,913		a); g); h)		—					643,380
Non-current assets and disposal groups held for sale		—		6,333		h)		—					6,333
TOTAL ASSETS		46,095,131		—				3,619					46,098,750

67

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

4. Accounting Changes, continued:

Concept	01.01.2021 Previous CNC			Reclassification			Ref.	Adjustment			Ref.		01.01.2021 Current CNC
	MCh$			MCh$				MCh$					MCh$
LIABILITIES
Transactions in the course of payment		1,302,000			(49,888	)	a)		—					1,252,112
Financial liabilities held for trading at fair value through profit or loss:
Derivative financial instruments		2,841,756			(71,690	)	d)		—					2,770,066
Other financial instruments		—			379		i)		—					379
Financial liabilities designated at fair value designated as at fair value through profit or loss		—			—				—					—
Derivative Financial Instruments for hedging purposes		—			71,690		d)		—					71,690
Obligations under repurchase agreements		288,917			(288,917	)	i)		—					—
Financial liabilities at amortized cost:
Current accounts and other demand deposits		15,167,229			(303,668	)	j)		—					14,863,561
Saving accounts and time deposits		8,899,541			(95,073	)	k)		—					8,804,468
Obligations by repurchase agreements and securities lending		—			288,538		i)		—					288,538
Borrowings from financial institutions		3,669,753			—				—					3,669,753
Debt financial instruments issued		8,593,595			(886,407	)	l)		—					7,707,188
Other financial obligations		191,713			(25,122	)	m)		—					166,591
Lease liabilities		115,017			—				—					115,017
Financial instruments of regulatory capital issued		—			886,407		l)		—					886,407
Provisions		733,911			(733,911	)	n)		—					—
Provisions for contingencies		—			141,938		n); o)		—					141,938
Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued		—			220,271		n)		—					220,271
Special provisions for credit risk		—			401,890		n)							401,890
Currents tax liabilities		311			—				—					311
Deferred tax liabilities		—			—				—					—
Other liabilities		565,120			443,563		a); j); k); m); o)		—					1,008,683
Liabilities included in disposal groups held for sale		—			—				—					—
TOTAL LIABILITIES		42,368,863			—				—					42,368,863
EQUITY
Capital		2,418,833			1,705		p)		—					2,420,538
Reserves		703,206			(1,155	)	p); q)		(2,251	)		a)		699,800
Accumulated other comprehensive income
Elements that are not reclassified in profit and loss		—			(550	)	q)		3,619			d)		3,069
Elements that can be reclassified in profit and loss		(51,250	)		—				2,251			a)		(48,999	)
Retained earnings from previous periods		412,641			—				—					412,641
Income for the year		463,108			—				—					463,108
Less: Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued		(220,271	)		—				—					(220,271	)
Shareholders of the Bank:		3,726,267			—				3,619					3,729,886
Non-controlling interests		1			—				—					1
TOTAL EQUITY		3,726,268			—				3,619					3,729,887
TOTAL LIABILITIES AND EQUITY		46,095,131			—				3,619					46,098,750

68

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

4. Accounting Changes, continued:

4.2 Reconciliation of transition effects in the Consolidated Statement of Financial Position as of December 31, 2021.

Concept	31.12.2021 Previous CNC		Reclassification			Ref.	Adjustment			Ref.		31.12.2021 Current CNC
	MCh$		MCh$				MCh$					MCh$
ASSETS
Cash and due from banks		3,713,734		—				—					3,713,734
Transactions in the course of collection		576,457		(89,757	)	a)		—					486,700
Financial assets held-for-trading		3,876,695		(3,876,695	)	b)		—					—
Investment under resale agreements		64,365		(64,365	)	c)		—					—
Financial assets held for trading at fair value through profit or loss:
Derivative financial instruments		2,983,298		(277,802	)	d)		—					2,705,496
Debt financial instruments		—		3,737,942		b)		—					3,737,942
Others		—		138,753		b)		—					138,753
Financial assets available-for-sale		3,054,809		(3,054,809	)	e)		—					—
Non-trading financial assets mandatorily measured at fair value through profit or loss		—		—				—					—
Financial assets at fair value through profit or loss		—		—				—					—
Financial assets at fair value through other comprehensive income:
Debt financial instruments		—		3,054,809		e)		—					3,054,809
Other financial instruments		—		—				—					—
Derivative financial instruments for hedging purposes		—		277,802		d)		—					277,802
Financial assets held-to-maturity		782,529		(782,529	)	f)		—					—
Financial assets at amortized cost:
Rights by resale agreements and securities lending		—		64,365		c)		—					64,365
Debt financial instruments		—		782,529		f)		57,215			c)		839,744
Loans and advances to Banks		1,529,313		—				—					1,529,313
Loans to customers - Commercial loans		19,243,758		(25,890	)	g)		—					19,217,868
Loans to customers - Residential mortgage loans		10,315,921		—				—					10,315,921
Loans to customers - Consumer loans		3,978,079		—				—					3,978,079
Investments in other companies		49,168		—				3,589			d)		52,757
Intangible assets		72,532		—				—					72,532
Property and equipment		222,320		—				—					222,320
Right-of-use assets		100,188		—				—					100,188
Current tax assets		846		—				—					846
Deferred tax assets		439,194		—				(4,917	)		a);b);d)		434,277
Other assets		699,233		96,228		a); g); h)		—					795,461
Non-current assets and disposal groups held for sale		—		19,419		h)		—					19,419
TOTAL ASSETS		51,702,439		—				55,887					51,758,326

69

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

4. Accounting Changes, continued:

Concept	31.12.2021 Previous CNC			Reclassification			Ref.	Adjustment			Ref.	31.12.2021 Current CNC
	MCh$			MCh$				MCh$				MCh$
LIABILITIES
Transactions in the course of payment		460,490			(90,510	)	a)		—				369,980
Financial liabilities held for trading at fair value through profit or loss:
Derivative financial instruments		2,773,199			(696	)	d)		—				2,772,503
Other financial instruments		—			9,610		i)		—				9,610
Financial liabilities designated as at fair value through profit or loss		—			—				—				—
Derivative Financial Instruments for hedging purposes		—			696		d)		—				696
Obligations under repurchase agreements		95,009			(95,009	)	i)		—				—
Financial liabilities at amortized cost:
Current accounts and other demand deposits		18,542,791			(292,910	)	j)		—				18,249,881
Saving accounts and time deposits		9,140,006			(336,293	)	k)		—				8,803,713
Obligations by repurchase agreements and securities lending		—			85,399		i)		—				85,399
Borrowings from financial institutions		4,861,865			—				—				4,861,865
Debt financial instruments issued		9,478,905			(917,510	)	l)		—				8,561,395
Other financial obligations		274,618			(24,613	)	m)		—				250,005
Lease liabilities		95,670			—				—				95,670
Financial instruments of regulatory capital issued		—			917,510		l)		—				917,510
Provisions		1,048,013			(1,048,013	)	n)						—
Provisions for contingencies		—			143,858		n); o)		—				143,858
Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued		—			323,897		n)		—				323,897
Special provisions for credit risk		—			616,195		n)		(14,621	)	b)		601,574
Currents tax liabilities		113,129			—				—				113,129
Deferred tax liabilities		—			—				—				—
Other liabilities		595,730			708,389		a); j); k); m); o)		—				1,304,119
Liabilities included in disposal groups held for sale		—			—				—				—
TOTAL LIABILITIES		47,479,425			—				(14,621	)			47,464,804
EQUITY
Capital		2,418,833			1,705		p)		—				2,420,538
Reserves		703,604			(1,554	)	p); q)		8,422		a); b)		710,472
Accumulated other comprehensive income
Elements that are not reclassified in profit and loss		—			(151	)	q)		2,620		d)		2,469
Elements that can be reclassified in profit and loss		(23,927	)		—				60,197		c)		36,270
Retained earnings from previous periods		655,478			—				—				655,478
Income for the year		792,922			—				(731	)	a)		792,191
Less: Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued		(323,897	)		—				—				(323,897	)
Shareholders of the Bank:		4,223,013			—				70,508				4,293,521
Non-controlling interests		1			—				—				1
TOTAL EQUITY		4,223,014			—				70,508				4,293,522
TOTAL LIABILITIES AND EQUITY		51,702,439			—				55,887				51,758,326

70

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

4. Accounting Changes, continued:

Reclassifications:

a) From “Transactions in the course of collection” (asset) and “Transactions in the course of payment” (liability) to “Other Assets and Other Liabilities for intermediation of financial instruments”.

b) From “Trading instruments” to “Financial assets to be traded at fair value through profit or loss”.

c) From “Investment under resale agreements” to “Rights by resale agreements and securities lending”.

d) The assets and liabilities “Derivative instruments” are separated into “Derivative financial instruments” and “Derivative Financial Instruments for hedging purposes”.

e) From “Financial assets available-for-sale” to “Financial assets at fair value through other comprehensive income”.

f) From “Financial assets held-to-maturity” to “Financial assets at amortized cost - Debt financial instruments”.

g) Accounts receivable from customers under IFRS 15 were reclassified from “Loans to customers - Commercial loans” to “Other Assets”.

h) Investment in Nexus S.A and assets received in lieu of payment were reclassified from “Other assets” to “Non-current assets and disposal groups held for sale”.

i) Short sales of shares were reclassified from “Obligations under repurchase agreements” to “Obligations by repurchase agreements and securities lending” and to “Financial liabilities held for trading at fair value through profit or loss”.

j) The payments received on loans to be settled were reclassified from “Current accounts and other demand deposits” to “Other liabilities”.

k) Cash guarantees received for derivative financial operations were reclassified from “Saving accounts and time deposits” to “Other Liabilities”.

l) Subordinated bonds were reclassified from “Debt financial instruments issued” to “Financial instruments of regulatory capital issued”.

m) Suppliers of goods for leasing were reclassified from “Other financial obligations” to “Other liabilities”.

n) “Provisions” were opened in “Provisions for contingencies”, “Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued” and “Special provisions for credit risk”.

o) Loyalty program provision were reclassified from “Other Liabilities” to “Provisions for contingencies”.

p) Share premium account were reclassified from “Reserves” to “Capital”.

q) “Accumulated other comprehensive income” were opened in “Elements that are not reclassified in profit and loss” for employee benefits and “Elements that can be reclassified in profit and loss”.

71

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

4. Accounting Changes, continued:

Adjustment:

a) Net charge in equity for impairment of financial instruments at Fair Value through Other Comprehensive Income (FVOCI) for Ch$2,251 million net of taxes as of January 1, 2021 (Ch$2,982 million as of December 31, 2021), therefore, the impact on income for the year 2021 is Ch$731 million.

b) Credit in equity for modification of the Credit Conversion Factor (FCC) for Ch$10,673 million net of taxes.

c) Credit to equity for Ch$57,215 million due to the application of IFRS 9 when reclassifying financial instruments from “Financial assets at fair value through other comprehensive income” to “Financial assets at amortized cost”, carried out during 2021.

d) Net credit in equity for $3,619 million as of January 1, 2021 ($2,620 million as of December 31, 2021) for adjustment to fair value of investments of the subsidiary Banchile Corredores de Bolsa S.A. in Bolsa de Comercio de Santiago S.A.

72

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

4. Accounting Changes, continued:

4.3 Reconciliation of the Summarized Interim Consolidated Income Statement for the period ended March 31, 2021.

	31/03/2021												31/03/2021
	Previous CNC			Reclassification			Ref.	Adjustment			Ref.		Current CNC
	MCh$			MCh$				MCh$					MCh$
Interest and UF indexation revenue		334,577			(3,334	)	a)		—					331,243
Income from commissions		108,270			2,862		a)		—					111,132
Other operating income		39,578			(4,487	)	b) c) e)		—					35,091
Total operating income		482,425			(4,959	)			—					477,466
Provisions for loan losses		(54,067	)		54,067		c)		—					—
Credit loss expense		—			(55,468	)	c) d)		(723	)		a)		(56,191	)
Operating expenses		(224,474	)		5,703		b) d)		—					(218,771	)
Operating income		203,884			(657	)			(723	)				202,504
Income attributable to associates		(657	)		657		e)		—					—
Income before income tax		203,227			—				(723	)				202,504
Income tax		(40,735	)		—				195			a)		(40,540	)
Net Income for the period		162,492			—				(528	)				161,964

4.4 Reconciliation of the Consolidated Interim Statement of Comprehensive Income (summarized) for the period ended March 31, 2021.

	31/03/2021										31/03/2021
	Previous CNC		Reclassification		Ref.	Adjustment			Ref.		Current CNC
	MCh$		MCh$			MCh$					MCh$
Net Income for the period		162,492		—			(528	)		a)		161,964
Other comprehensive income that will not be reclassified to income for the period		167		—			25			b)		192
Other comprehensive income that will be reclassified to profit for the period		1,494		—			528			a)		2,022
Consolidated comprehensive income for the period		164,153		—			25					164,178

73

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

4. Accounting Changes, continued:

The summary of the main reclassifications and accounting adjustments that were applied to the Interim Consolidated Income Statement and the Interim Statement of Other Comprehensive Income, consider the following:

Reclassifications:

a) Commissions for prepayment of credits were reclassified from “Net income from interest and UF indexation” to “Net income from commissions”.

b) Expenses for assets received in lieu of payment were reclassified from “Operating expenses” to “Other operating income”.

c) From “Provisions for loan losses” to “Credit loss expense” and the foreign currency impact to “Other operating income”.

d) Country risk provisions were reclassified from “Operating expenses” to “Credit loss expenses”.

e) From “Income attributable to associates” to “Other operating income”.

Adjustment:

a) Net charge to income and credit to OCI for impairment of financial instruments measured at fair value through other comprehensive income (FVOCI).

b) Net credit in OCI for adjustment to fair value of investments of the subsidiary Banchile Corredores de Bolsa S.A. in Bolsa de Comercio de Santiago S.A.

74

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

4. Accounting Changes, continued:

4.5 Reconciliation of the Summarized Interim Consolidated Cash Flow Statement for the period ended March 31, 2021.

	31/03/2021											31/03/2021
	Previous CNC			Reclassification			Ref.	Adjustment			Ref.	Current CNC
	MCh$			MCh$				MCh$				MCh$
Cash flows from operating activities :
Profit for the period		162,492			—				(528	)			161,964
Charges (credits) to income (loss) that do not represent cash flows :		54,737			45,619				528				100,884
Changes due to (increase) decrease in assets and liabilities affecting the operating flow :		(2,639,398	)		76,535				—				(2,562,863	)
Total net cash flows provided by (used in) operating activities		(2,422,169	)		122,154				—				(2,300,015	)
Cash flows from (used in) investing activities :		(32,170	)		14,204				—				(17,966	)
Cash flows from (used in) financing activities :		165,727			(119,200	)			—				46,527
Variation in cash and cash equivalents during the period		(2,288,612	)		17,158				—				(2,271,454	)
Exchange variations effect		14,337			—				—				14,337
Opening balance of cash and  cash equivalent		6,088,115			347				—				6,088,462
Final balance of cash and  cash equivalent		3,813,840			17,505				—				3,831,345

Reclassifications:

a) From other debits (credits) that do not imply cash movements to net flows originated by financing activities.

b) Reclassification from net flows originated by investment activities to net flows originated by financing activities for lease payments and to flows originated by operating activities for the net increase of debt financial instruments at fair value through OCI (previously classified as net increase in investment instruments available-for-sale).

c) Reclassifications mainly of other financial obligations from flows originated by financing activities to flows originated by operating activities.

Adjustment:

a) Net charge to income for impairment of financial instruments measured at fair value through other comprehensive income (FVOCI).

During the period ended March 31, 2022, there have been no other significant accounting changes that affect the presentation these Interim Consolidated Financial Statements.

75

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

5. Relevant Events:

(a) On January 27, 2022, the Board of Directors of Banco de Chile agreed to convene an Ordinary Shareholders Meeting on March 17, 2022 in order to propose, among other matters, the following:

1. The following distribution of profits for the year ended on December 31, 2021:

i. Deduct and withhold from the net income of the year, an amount equivalent to the effect of inflation of the paid capital and reserves according to the variation of the Consumer Price Index that occurred between November 2020 and November 2021, amounting to Ch$253,093,655,744 which will be added to retained earnings from previous periods.

ii. Distribute in the form of a dividend the remaining liquid profit, corresponding to a dividend of Ch$5.34393608948 to each of the 101,017,081,114 shares of the Bank.

Consequently, the distribution as dividend of 68.1% of the profits for the year ending December 31, 2021, was proposed.

2. The shareholders who choose to, may at their option apply all or part of their dividend to the optional and transitory taxation regime that contemplates a substitute tax payment for the final taxes, called ISFUT (for its Spanish initials), in accordance with the transitory article 25 of Law No. 21,210.

3. The dividend, if approved by the Meeting, would be paid on March 31, 2022.

76

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

6. Business Segments:

For management purposes, the Bank is organized into four segments, which are defined based on the types of products and services offered, and the type of client in which focuses as described below:

Retail: This segment focuses on individuals and small and medium-sized companies (SMEs) with annual sales up to UF 70,000, where the product offering focuses primarily on consumer loans, commercial loans, checking accounts, credit cards, credit lines and Residential mortgage loans.

Wholesale: This segment focused on corporate clients and large companies, whose annual revenue exceed UF 70,000, where the product offering focuses primarily on commercial loans, checking accounts and liquidity management services, debt instruments, foreign trade, derivative contracts and leases.

Treasury: This segment includes the associated revenues to the management of the investment portfolio and the business of financial transactions and currency trading.

Transactions with customers carried out by the Treasury are reflected in the respective aforementioned segments. These products are highly transaction-focused and include foreign exchange transactions, derivatives and financial instruments in general, among others.

Subsidiaries: Corresponds to the businesses generated by the companies controlled by the Bank, which carry out activities complementary to the bank business. The companies that comprise this segment are:

Entity

- Banchile Administradora General de Fondos S.A.

- Banchile Asesoría Financiera S.A.

- Banchile Corredores de Seguros Ltda.

- Banchile Corredores de Bolsa S.A.

- Banchile Securitizadora S.A. en Liquidación (*)

- Socofin S.A.

(*) Company in the process of dissolution.

77

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

6. Business Segments, continued:

The financial information used to measure the performance of the Bank’s business segments is not comparable with similar information from other financial institutions because each institution relies on its own definitions. The accounting policies applied to the segments is the same as those described in the summary of accounting principles. The Bank obtains the majority of the results for: interest, indexation and commissions and financial operations and changes, discounting provisions for credit risk and operating expenses. Management is mainly based on these concepts to evaluate the performance of the segments and make decisions about the goals and allocations of resources of each unit. Although the results of the segments reconcile with those of the Bank at the total level, this is not necessarily the case in terms of the different concepts, given that management is measured and controlled individually and not on a consolidated basis, applying the following criteria:

● The net interest margin of loans and deposits is obtained aggregating the net financial margins of each individual operation of credit and uptake made by the bank. For these purposes, the volume of each operation and its contribution margin are considered, which in turn corresponds to the difference between the effective rate of the customer and the internal transfer price established according to the term and currency of each operation. Additionally, the net margin includes the result of interest and indexation from the accounting hedges.

● Provisions for credit risk are determined at the customer and counterparty level based on the characteristics of each of their operations. In the case of additional provisions, these are assigned to the different business segments based on the credit risk weighted assets that each segment has.

● The capital and its financial impacts on outcome have been assigned to each segment based on the risk-weighted assets.

● Operational expenses are reflected at the level of the different functional areas of the Bank. The allocation of expenses from functional areas to business segments is done using different allocation criteria, at the level of the different concepts and expense items.

Taxes are managed at a corporate level and are not allocated to business segments.

For the periods ended March 31, 2022 and 2021 there was no income from transactions with a customer or counterparty that accounted for 10% or more of the Bank’s total revenues.

78

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

6. Business Segments, continued:

The following table presents the income by segment for the periods ended between January 1, and March 31, 2022 and 2021 for each of the segments defined above:

	Retail						Wholesale						Treasury						Subsidiaries						Subtotal						Consolidation adjustment						Total
	March			March			March			March			March			March			March			March			March			March			March			March			March			March
	2022			2021			2022			2021			2022			2021			2022			2021			2022			2021			2022			2021			2022			2021
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Net interest income and UF indexation		335,630			231,389			167,227			97,842			(8,135	)		2,009			(1,355	)		(28	)		493,367			331,212			2			31			493,369			331,243
Net commissions income		78,434			63,632			16,818			15,687			(456	)		(441	)		38,969			35,303			133,765			114,181			(3,525	)		(3,049	)		130,240			111,132
Net financial income		138			103			5,311			5,258			18,758			(2,399	)		3,674			1,994			27,881			4,956			(2	)		(31	)		27,879			4,925
Exchange position		(1,567	)		1,647			7,769			5,923			15,338			13,494			6,560			4,209			28,100			25,273			—			—			28,100			25,273
Other income		2,902			3,501			1,812			2,335			—			—			825			977			5,539			6,813			(1,476	)		(1,263	)		4,063			5,550
Income attributable to investments in other companies		1,184			(963	)		299			295			29			1			22			10			1,534			(657	)		—			—			1,534			(657	)
Total operating revenue		416,721			299,309			199,236			127,340			25,534			12,664			48,695			42,465			690,186			481,778			(5,001	)		(4,312	)		685,185			477,466
Expenses from salaries and employee benefits		(80,320	)		(72,388	)		(22,113	)		(22,507	)		(601	)		(568	)		(19,037	)		(18,239	)		(122,071	)		(113,702	)		4			4			(122,067	)		(113,698	)
Administrative expenses		(65,751	)		(63,640	)		(17,021	)		(15,134	)		(379	)		(317	)		(8,395	)		(8,062	)		(91,546	)		(87,153	)		4,712			4,264			(86,834	)		(82,889	)
Depreciation and amortization		(16,363	)		(15,198	)		(2,088	)		(1,923	)		(103	)		(81	)		(1,371	)		(1,417	)		(19,925	)		(18,619	)		—			—			(19,925	)		(18,619	)
Impairment of non-financial assets		—			(1	)		—			—			—			—			98			422			98			421			—			—			98			421
Other operating expenses		(3,923	)		(2,164	)		(1,753	)		(1,916	)		—			(9	)		(288	)		59			(5,964	)		(4,030	)		285			44			(5,679	)		(3,986	)
Total operating expenses		(166,357	)		(153,391	)		(42,975	)		(41,480	)		(1,083	)		(975	)		(28,993	)		(27,237	)		(239,408	)		(223,083	)		5,001			4,312			(234,407	)		(218,771	)
Expenses for credit losses (*)		(65,236	)		(37,811	)		(33,962	)		(19,104	)		(206	)		724			—			—			(99,404	)		(56,191	)		—			—			(99,404	)		(56,191	)
Income from operations		185,128			108,107			122,299			66,756			24,245			12,413			19,702			15,228			351,374			202,504			—			—			351,374			202,504
Income taxes																																						(59,647	)		(40,540	)
Income after income taxes																																						291,727			161,964

(*) As of March 31, 2022 and 2021, the Retail and Wholesale segments include additional provisions allocated based on their risk-weighted assets.

The following table presents assets and liabilities of the periods ended March 31, 2022 and December 31, 2021 by each segment defined above:

	Retail				Wholesale				Treasury				Subsidiaries				Subtotal				Consolidation adjustment						Total
	March		December		March		December		March		December		March		December		March		December		March			December			March		December
	2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022			2021			2022		2021
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$		MCh$
Assets		20,651,690		20,519,142		12,427,780		12,806,598		15,788,677		17,412,053		871,480		954,858		49,739,627		51,692,651		(199,702	)		(369,448	)		49,539,925		51,323,203
Current and deferred taxes																												445,989		435,123
Total assets																												49,985,914		51,758,326
Liabilities		16,377,742		16,779,925		10,041,420		10,530,749		18,741,464		19,640,221		718,826		770,228		45,879,452		47,721,123		(199,702	)		(369,448	)		45,679,750		47,351,675
Current and deferred taxes																												106,257		113,129
Total liabilities																												45,786,007		47,464,804

79

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

7. Cash and Cash Equivalents:

The detail of the balances included under cash and cash equivalents as follows:

	March		December
	2022		2021
	MCh$		MCh$
Cash and due from banks:
Cash		1,127,320		1,073,601
Deposit in Chilean Central Bank (*)		2,536,416		1,545,472
Deposit in abroad Central Bank		—		—
Deposits in domestic banks		45,062		129,858
Deposits in abroad banks		1,173,450		964,803
Subtotal – Cash and due from banks		4,882,248		3,713,734
Net transactions in the course of collection (**)		550		116,720
Others cash equivalents (***)		153,616		3,458,373
Total cash and cash equivalents		5,036,414		7,288,827

The detail of the balances included under net ongoing clearance operations is as follows:

	March			December
	2022			2021
	MCh$			MCh$
Assets
Documents drawn on other banks (clearing)		106,159			123,051
Funds receivable		327,753			363,649
Subtotal - assets		433,912			486,700
Liabilities
Funds payable		(433,362	)		(369,980	)
Subtotal - liabilities		(433,362	)		(369,980	)
Net transactions in the course of settlement		550			116,720

(*) The level of funds in cash and in the Central Bank of Chile responds to regulations on reserve requirements that the bank must maintain on average in monthly periods.

(**) Ongoing clearance operations correspond to transactions in which only the settlement remains that will increase or decrease the funds in the Central Bank of Chile or in foreign banks, normally within 12 or 24 business hours.

(***) Refers to financial instruments that meet the criteria to be considered as “cash equivalents” as defined by IAS 7, i.e., to qualify as “cash equivalents” investments in debt financial instruments must be: short-term with an original maturity of 90 days or less from the date of acquisition, highly liquid, readily convertible to known amounts of cash from the date of initial investment, and that the financial instruments are exposed to an insignificant risk of changes in their value.

80

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

8. Financial Assets Held for Trading at Fair Value through Profit or Loss:

(a) The Bank as of March 31, 2022 and December 31, 2021, maintains the following portfolio of derivative instruments:

	Notional amount of contract with final expiration date in
									Over 1 month and up				Over 3 months and up				Over 1 year and up				Over 1 year and up												Fair Value
	Demand				Up to 1 month				to 3 months				to 12 months				to 3 years				to 3 years				Over 5 years				Total				Assets
	March		December		March		December		March		December		March		December		March		December		March		December		March		December		March		December		March		December
	2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Currency forward		—		—		8,711,981		6,289,327		4,673,031		5,532,323		8,772,742		8,429,176		1,139,706		1,320,406		62,548		74,865		17,255		18,758		23,377,263		21,664,855		439,501		742,545
Interest rate swap		—		—		2,945,723		1,255,464		3,793,719		4,110,203		9,789,478		10,616,344		11,237,742		11,611,771		6,606,714		6,939,951		9,693,078		10,277,577		44,066,454		44,811,310		1,055,103		825,525
Interest rate swap and cross currency swap		—		—		357,760		288,582		675,974		771,916		3,827,773		3,659,286		4,723,652		5,055,449		3,557,721		3,769,369		5,269,458		5,253,837		18,412,338		18,798,439		896,299		1,132,718
Call currency options		—		—		31,342		19,681		44,627		41,274		79,096		53,074		2,510		2,972		—		—		—		—		157,575		117,001		1,931		4,509
Put currency options		—		—		22,946		11,952		31,580		34,859		49,394		43,991		2,353		2,631		—		—		—		—		106,273		93,433		1,627		199
Total		—		—		12,069,752		7,865,006		9,218,931		10,490,575		22,518,483		22,801,871		17,105,963		17,993,229		10,226,983		10,784,185		14,979,791		15,550,172		86,119,903		85,485,038		2,394,461		2,705,496

81

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

8. Financial Assets Held for Trading at Fair Value through Profit or Loss, continued:

b) The detail of the instruments designated as Debt Financial Instruments is the following:

	March		December
	2022		2021
	MCh$		MCh$
Instruments issued by the Chilean Government and Central Bank of Chile
Debt financial instruments from the Central Bank of Chile		219,705		3,297,100
Bonds and Promissory notes from the Chilean Government		51,105		175,022
Other fiscal debt financial instruments		—		—
Other Instruments Issued in Chile
Debt financial instruments from other domestic banks		211,376		265,820
Bonds and trade effects from domestic companies		—		—
Other debt financial instruments issued in the country		—		—
Instruments Issued Abroad
Financial instruments from foreign governments or Central Banks		—		—
Financial debt instruments from foreign goverments and fiscal entities		—		—
Debt financial instruments from other foreign banks		—		—
Bonds and trade effects from foreign companies		—		—
Total		482,186		3,737,942

Instruments sold under repurchase agreements to clients and financial institutions are classified under instruments of the State and Central Bank of Chile by an amount of Ch$16,998 million as of March 31, 2022. As of December 31, 2021, there are no documents sold with a repurchase agreement. Repurchase agreements have an average expiration of 1 day at closure March 2022. Additionally, instruments are maintained under this item to comply with the technical reserve constitution requirements for an amount equivalent to Ch$83,002 million as of March 31, 2022 (Ch$3,288,800 million in December 2021).

Instruments sold under repurchase agreements to clients and financial institutions include other debt financial instruments issued in the country, by an amount of Ch$60,492 million as of March 31, 2022 (Ch$84,969 million in December 2021). The repurchase agreements have an average maturity of 10 days at the end of the 2022 period (12 days in December 2021).

Additionally, the Bank has investments in own-issued letters of credit for an amount equivalent to Ch$3,511 million as of March 31, 2022 (Ch$3,832 million in December 2021), which are presented as a reduction of the liability item “Debt Financial Instruments Issued”.

82

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

8. Financial Assets Held for Trading at Fair Value through Profit or Loss, continued:

c) The detail of other financial instruments is as follows:

	March		December
	2022		2021
	MCh$		MCh$
Mutual fund investments
Funds managed by related companies		27		125,145
Funds managed by third-party		—		—
Equity instruments
Domestic equity instruments		2,032		3,062
Foreign equity instruments		—		—
Loans originated and acquired by the entity
Loans and advances to banks		—		—
Commercial loans		—		—
Residential mortgage loans		—		—
Consumer loans		—		—
Others		1,140		10,546
Total		3,199		138,753

9. Non-trading Financial Assets mandatorily measured at Fair Value through Profit or Loss:

As of March 31, 2022 and December 31, 2021, the Bank does not hold any non-trading financial assets mandatorily measured at fair value through profit or loss.

10. Financial Assets and Liabilities designated as at Fair Value through Profit or Loss:

As of March 31, 2022 and December 31, 2021, the Bank does not hold financial assets and liabilities designated as at fair value through profit or loss.

83

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

11. Financial Assets at Fair Value through Other Comprehensive Income:

(a) As of March 31, 2022 and December 31, 2021, the detail of debt financial instruments is as follows:

	March		December
	2022		2021
	MCh$		MCh$
Instruments issued by the Chilean Government and Central Bank of Chile
Debt financial instruments from the Central Bank of Chile		—		102
Bonds and Promissory notes from the Chilean Government		2,046,031		2,480,423
Other fiscal debt financial instruments		7,220		8,325
Other Instruments Issued in Chile
Debt financial instruments from other domestic banks		648,516		538,486
Bonds and trade effects from domestic companies		18,732		27,473
Other debt financial instruments issued in the country		—		—
Instruments Issued Abroad
Financial instruments from foreign Central Banks		—		—
Financial instruments from foreign governments and fiscal entities		—		—
Debt financial instruments from other foreing banks		—		—
Bonds and trade effects from foreign companies		—		—
Other debt financial instruments issued abroad		—		—
Total		2,720,499		3,054,809

Instruments of the Government and the Central Bank of Chile include instruments sold under repurchase agreements to clients and financial institutions for an amount of Ch$21,772 million in March, 2022 (Ch$351 million in December 2021). The repurchase agreements have an average maturity of 4 days in March 2022 (4 days in December 2021). As part of the FCIC program, instruments delivered as collateral are included for an approximate amount of Ch$457,794 million as of March 31, 2022 (Ch$456,057 million as of December 31, 2021. Additionally, under this item, instruments are maintained to comply with the requirements for the constitution of a technical reserve for an amount equivalent to Ch$1,515,110 million as of March 31, 2022 (Ch$2,336,780 million as of December 31, 2021).

Under the same item, instruments that guarantee margins for cleared derivatives transactions are classified through Comder Contraparte Central S.A. for an amount of Ch$49,057 million as of March, 2022 (Ch$33,599 million as of December 31, 2021).

Under Instruments of Other National Institutions are classified instruments delivered as collateral as part of FCIC program for an approximate amount of Ch$345,791 as of March 31, 2022 (Ch$185,417 million as of December 31, 2021).

As of March 31, 2022 the impairment for debt instruments at fair value through other comprehensive income was Ch$4,244 million (Ch$4,085 million as of December 31, 2021).

84

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

11. Financial Assets at Fair Value through Other Comprehensive Income, continued:

a.1) The credit rating of the issuers of debt instruments as of March 31, 2022 and December 31, 2021 is as follows:

	March 2022								December 2021
	Phase 1		Phase 2		Phase 3		Total		Phase 1		Phase 2		Phase 3		Total
	Individual		Individual		Individual		Individual		Individual		Individual		Individual		Individual
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Debt instruments
Investment grade		2,720,499		—		—		2,720,499		3,054,795		14		—		3,054,809
No investment grade		—		—		—		—		—		—		—		—
No rating		—		—		—		—		—		—		—		—
Total		2,720,499		—		—		2,720,499		3,054,795		14		—		3,054,809

a.2) The analysis of changes in fair value and the provision for credit risk of debt instruments measured at fair value is as follows:

	Phase 1 Individual						Phase 2 Individual						Phase 3 Individual				Total
	Fair value			Impairment			Fair value			Impairment			Fair value		Impairment		Fair value			Impairment
	MCh$			MCh$			MCh$			MCh$			MCh$		MCh$		MCh$			MCh$
Balance as of January 1, 2021		1,060,307			3,078			216			6			—		—		1,060,523			3,084
Net change in balance		2,045,246			1,005			(276	)		(10	)		—		—		2,044,970			995
Change in fair value		(51,656	)		—			(60	)		—			—		—		(51,716	)		—
Transfer to Phase 1		—						—			—			—		—		—			—
Transfer to Phase 2		(134	)		(4	)		134			4			—		—		—			—
Transfer to Phase 3		—			—			—			—			—		—		—			—
Impact due to transfer between phases		—			—			—			—			—		—		—			—
Net impact due to impairment		—			—			—			—			—		—		—			—
Foreign Exchange adjustments		1,032			6			—			—			—		—		1,032			6
Balance as of December 31, 2021		3,054,795			4,085			14			—			—		—		3,054,809			4,085

	Phase 1 Individual					Phase 2 Individual					Phase 3 Individual				Total
	Fair value			Impairment		Fair value			Impairment		Fair value		Impairment		Fair value			Impairment
	MCh$			MCh$		MCh$			MCh$		MCh$		MCh$		MCh$			MCh$
Balance as of December 31, 2021		3,054,795			4,085		14			—		—		—		3,054,809			4,085
Net change in balance		(328,363	)		159		(14	)		—		—		—		(328,377	)		159
Change in fair value		(5,436	)		—		—			—		—		—		(5,436	)		—
Transfer to Phase 1		—			—		—			—		—		—		—			—
Transfer to Phase 2		—			—		—			—		—		—		—			—
Transfer to Phase 3		—			—		—			—		—		—		—			—
Impact due to transfer between phases		—			—		—			—		—		—		—			—
Net impact due to impairment		—			—		—			—		—		—		—			—
Foreign Exchange adjustments		(497	)		—		—			—		—		—		(497	)		—
Balance as of March 31, 2022		2,720,499			4,244		—			—		—		—		2,720,499			4,244

85

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

11. Financial Assets at Fair Value through Other Comprehensive Income, continued:

(b) Realized and unrealized gains and losses:

As of March 31, 2022, the portfolio of debt financial instruments includes an accumulated unrealized loss of Ch$53,244 millones (accumulated unrealized loss of Ch$47,808 million in December 2021), recorded as an equity valuation adjustment.

During the periods 2022 and 2021, there is no evidence of impairment of financial assets.

Gross realized gains and losses on the sale of debt financial instruments, as of March 31, 2022 and 2021 are reported under “Net Financial income (expense)” (See Note No. 33). The changes in realized gains and losses at the end of both periods are the following:

	March			March
	2022			2021
	MCh$			MCh$
Unrealized (losses) gains		(4,928	)		4,211
Realized gains reclassified to income		(508	)		(2,979	)
Subtotal		(5,436	)		1,232
Income tax on other comprehensive income		482			(332	)
Net effect in equity		(4,954	)		900

86

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

12. Derivative Financial Instruments for hedging purposes:

(a) As of March 31, 2022 and December 31, 2021, the Bank has the following portfolio of financial derivative instruments for accounting hedging purposes:

	Notional amount of contract with final expiration date in
	Demand				Up to 1 month				Over 1 month and up to 3 months				Over 3 months and up to 12 months				Over 1 year and up to 3 years				Over 3 year and up to 5 years				Over 5 years				Total
	March		December		March		December		March		December		March		December		March		December		March		December		March		December		March		December
	2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Currency forward		—		—		—		—		—		3,099		—		—		—		—		—		—		—		—		—		3,099
Interest rate swap and cross currency swap		—		—		—		—		38,384		—		—		37,494		330,562		322,894		228,061		108,759		1,169,296		895,312		1,766,303		1,364,459
Call currency options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Put currency options		—		—		—		—				—		—		—		—		—		—		—		—		—		—		—
Total		—		—		—		—		38,384		3,099		—		37,494		330,562		322,894		228,061		108,759		1,169,296		895,312		1,766,303		1,367,558

	ASSETS				LIABILITIES
	March		December		March		December
	2022		2021		2022		2021
	MCh$		MCh$		MCh$		MCh$
Currency forward		—		—		—		88
Interest rate swap		—		—		—		—
Interest rate swap and cross currency swap		92,256		277,802		49,029		608
Call currency options		—		—		—		—
Put currency options		—		—		—		—
Total		92,256		277,802		49,029		696

87

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

12. Derivative Financial Instruments for hedging purposes, continued:

(b) Fair value Hedges:

The Bank uses cross-currency swaps to hedge its exposure to changes in the fair value of the hedged elements of loans. The aforementioned hedge instruments change the effective cost of long-term assets from a fixed interest rate to a floating rate, decreasing the duration and modifying the sensitivity to the shortest segments of the curve.

Below is a detail of the hedged elements and instruments under fair value hedges as of March 31, 2022 and December 31, 2021:

	March		December
	2022		2021
	MCh$		MCh$
Hedge element
Commercial loans		1,830		1,788
Corporate bonds		—		—
Hedge instrument
Cross currency swap		1,830		1,788
Interest rate swap		—		—

(c) Cash flow Hedges:

(c.1) The Bank uses cross currency swaps to hedge the risk from variability of cash flows attributable to changes in the interest rates and foreign exchange of foreign banks obligations and bonds issued abroad in US Dollars, Hong Kong dollars, Swiss Franc, Japanese Yens, Peruvian Sol, Australian Dollars, Euros and Norwegian kroner. The cash flows of the cross currency swaps equal the cash flows of the hedged items, which modify uncertain cash flows to known cash flows derived from a fixed interest rate.

Additionally, these cross currency swap contracts used to hedge the risk from variability of the Unidad de Fomento (“CLF”) in assets flows denominated in CLF until a nominal amount equal to the portion notional of the hedging instrument CLF, whose readjustment impact the item “Interest Revenue” of the Income Financial Statements.

88

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

12. Derivative Financial Instruments for hedging purposes, continued:

(c) Cash flow Hedges, continued:

(c.2) Below are the cash flows from bonds issued abroad objects of this hedge and the cash flows of the asset part of the derivative instrument:

	Demand				Up to 1 month						Over 1 month and up to 3 months						Over 3 months and up to 12 months						Over 1 year and up to 3 years						Over 3 years and up to 5 years						Over 5 years						Total
	March		December		March			December			March			December			March			December			March			December			March			December			March			December			March			December
	2022		2021		2022			2021			2022			2021			2022			2021			2022			2021			2022			2021			2022			2021			2022			2021
	MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Hedge element
Outflows:
Corporate Bond EUR		—		—		(786	)		—			—			—			(679	)		(1,626	)		(2,930	)		(3,252	)		(43,113	)		(47,854	)		(50,794	)		(56,380	)		(98,302	)		(109,112	)
Corporate Bond HKD		—		—		(2,264	)		—			—			—			(12,297	)		(15,897	)		(96,933	)		(105,828	)		(83,600	)		(91,271	)		(283,849	)		(309,896	)		(478,943	)		(522,892	)
Corporate Bond PEN		—		—		—			—			—			(841	)		(6,068	)		(841	)		(9,942	)		(3,366	)		(11,297	)		(3,366	)		(162,063	)		(43,383	)		(189,370	)		(51,797	)
Corporate Bond CHF		—		—		—			(64	)		—			—			(1,223	)		(958	)		(227,314	)		(249,008	)		(111,282	)		(764	)		—			(121,521	)		(339,819	)		(372,315	)
Corporate Bond USD		—		—		(834	)		—			(4,690	)		—			(5,525	)		(1,814	)		(22,098	)		(3,629	)		(22,098	)		(3,629	)		(403,175	)		(46,260	)		(458,420	)		(55,332	)
Obligation USD		—		—		—			—			—			—			(393	)		(427	)		(55,235	)		(60,047	)		—			—			—			—			(55,628	)		(60,474	)
Corporate Bond JPY		—		—		—			—			(33,242	)		(130	)		(1,039	)		(39,208	)		(3,703	)		(4,249	)		(3,703	)		(4,249	)		(210,793	)		(242,020	)		(252,480	)		(289,856	)
Corporate Bond AUD		—		—		—			—			(105	)		(1,220	)		(5,607	)		(4,794	)		(10,953	)		(12,024	)		(10,859	)		(12,023	)		(251,653	)		(264,901	)		(279,177	)		(294,962	)
Corporate Bond NOK		—		—		—			—			—			—			(2,447	)		(2,646	)		(4,893	)		(5,292	)		(4,893	)		(5,292	)		(74,444	)		(80,515	)		(86,677	)		(93,745	)
Hedge instrument
Inflows:
Cross Currency Swap EUR		—		—		786			—			—			—			679			1,626			2,930			3,252			43,113			47,854			50,794			56,380			98,302			109,112
Cross Currency Swap HKD		—		—		2,264			—			—			—			12,297			15,897			96,933			105,828			83,600			91,271			283,849			309,896			478,943			522,892
Cross Currency Swap PEN		—		—		—			—			—			841			6,068			841			9,942			3,366			11,297			3,366			162,063			43,383			189,370			51,797
Cross Currency Swap CHF		—		—		—			64			—			—			1,223			958			227,314			249,008			111,282			764			—			121,521			339,819			372,315
Cross Currency Swap USD		—		—		834			—			4,690			—			5,525			1,814			22,098			3,629			22,098			3,629			403,175			46,260			458,420			55,332
Cross Currency Swap USD		—		—		—			—			—			—			393			427			55,235			60,047			—			—			—			—			55,628			60,474
Cross Currency Swap JPY		—		—		—			—			33,242			130			1,039			39,208			3,703			4,249			3,703			4,249			210,793			242,020			252,480			289,856
Cross Currency Swap AUD		—		—		—			—			105			1,220			5,607			4,794			10,953			12,024			10,859			12,023			251,653			264,901			279,177			294,962
Cross Currency Swap NOK		—		—		—			—			—			—			2,447			2,646			4,893			5,292			4,893			5,292			74,444			80,515			86,677			93,745
Net cash flows		—		—		—			—			—			—			—			—			—			—			—			—			—			—			—			—

89

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

12. Derivative Financial Instruments for hedging purposes, continued:

(c) Cash flow Hedges, continued:

(c.2) Below are the cash flows from underlying assets and the cash flows of the liability part of the derivative instrument:

	Demand				Up to 1 month						Over 1 month and up to 3 months						Over 3 months and up to 12 months						Over 1 year and up to 3 years						Over 3 years and up to 5 years						Over 5 years						Total
	March		December		March			December			March			December			March			December			March			December			March			December			March			December			March			December
	2022		2021		2022			2021			2022			2021			2022			2021			2022			2021			2022			2021			2022			2021			2022			2021
	MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Hedge element
Inflows:
Cash flows in CLF		—		—		2,752			537			46,089			4,031			23,582			59,853			397,520			370,886			282,356			144,432			1,299,721			968,900			2,052,020			1,548,639
Hedge instrument
Outflows:
Cross Currency Swap HKD		—		—		(1,983	)		(171	)		—			—			(8,050	)		(9,630	)		(77,370	)		(75,575	)		(81,242	)		(79,358	)		(218,976	)		(214,067	)		(387,621	)		(378,801	)
Cross Currency Swap PEN		—		—		—			—			—			(51	)		(1,387	)		(52	)		(2,778	)		(207	)		(2,774	)		(206	)		(105,548	)		(33,974	)		(112,487	)		(34,490	)
Cross Currency Swap JPY		—		—		—			—			(38,828	)		(341	)		(2,501	)		(40,029	)		(8,587	)		(8,388	)		(8,575	)		(8,376	)		(258,006	)		(252,362	)		(316,497	)		(309,496	)
Cross Currency Swap USD		—		—		(358	)		—			(4,003	)		—			(4,385	)		(1,104	)		(74,563	)		(57,936	)		(16,667	)		(1,402	)		(396,256	)		(39,368	)		(496,232	)		(99,810	)
Cross Currency Swap CHF		—		—		—			(366	)		(2,146	)		—			(4,385	)		(5,281	)		(225,407	)		(220,166	)		(121,192	)		(4,387	)		—			(115,104	)		(353,130	)		(345,304	)
Cross Currency Swap EUR		—		—		(411	)		—			(626	)		—			(1,039	)		(2,028	)		(4,167	)		(4,070	)		(47,261	)		(46,165	)		(48,770	)		(47,638	)		(102,274	)		(99,901	)
Cross Currency Swap AUD		—		—		—			—			(148	)		(540	)		(1,492	)		(1,064	)		(3,285	)		(3,212	)		(3,284	)		(3,208	)		(201,259	)		(197,125	)		(209,468	)		(205,149	)
Cross Currency Swap NOK		—		—		—			—			(338	)		—			(343	)		(665	)		(1,363	)		(1,332	)		(1,361	)		(1,330	)		(70,906	)		(69,262	)		(74,311	)		(72,589	)
Forward UF		—		—		—			—			—			(3,099	)		—			—			—			—			—			—			—			—			—			(3,099	)
Net cash flows		—		—		—			—			—			—			—			—			—			—			—			—			—			—			—			—

90

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

12. Derivative Financial Instruments for hedging purposes, continued:

(c) Cash flow Hedges, continued:

With respect to CLF assets hedged; these are revalued monthly according to the variation of the UF, which is equivalent to monthly reinvest the assets until maturity of the relationship hedging.

(c.3) The unrealized results generated during the period 2022 by those derivative contracts that conform the hedging instruments in this cash flow hedging strategy, have been recorded with charge to equity amounting to Ch$64,626 million (credit to equity of Ch$1,539 million in March 2021). The net effect of taxes charge to equity amounts to Ch$47,177 million (credit to equity of Ch$1,123 million during the period March 2021).

The accumulated balance for this concept as of March 31, 2022 corresponds to a credit in equity amounted to Ch$47,068 million (credit to equity of Ch$111,694 million as of December 2021).

(c.4) The effect of the cash flow hedging derivatives that offset the result of the hedged instruments corresponds to a charge to income of Ch$168,632 million during the period 2022 (charge to results for Ch$33,472 million during the period March 2021).

(c.5) As of March 30, 2022 and 2021, it not exist inefficiency in cash flow hedge, because both, hedge item and hedge instruments, are mirrors of each other, it means that all variation of value attributable to rate and revaluation components are netted totally.

(c.6) As of March 30, 2022 and 2021, the Bank does not have hedges of net investments in foreign business.

91

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost:

(a) Rights arising from resale repurchase agreements:

The Bank provides financing to its customers through repurchase agreements and securities lending, in which the financial instrument serves as collateral. As of March 31, 2022 and December 31, 2021, the detail is as follows:

	Demand				Up to 1 month				Over 1 month and up to 3 months				Over 3 months and up to 12 months				Over 1 year and up to 3 years				Over 3 years and up to 5 years				Over 5 years				Total
	March		December		March		December		March		December		March		December		March		December		March		December		March		December		March		December
	2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Instruments issued by the Chilean Governments and Central Bank of Chile
Central Bank bonds		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Central Bank promissory notes		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Other instruments issued by the Chilean Government and Central Bank of Chile		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Other Financial Instruments issued in Chile
Deposit promissory notes from domestic banks		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Mortgage bonds from domestic banks		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Bonds from domestic banks		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Deposits in domestic banks		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Bonds from other Chilean companies		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Other instruments issued in Chile		—		—		13,398		37,763		3,668		14,013		8,795		12,589		—		—		—		—		—		—		25,861		64,365
Subtotal		—		—		13,398		37,763		3,668		14,013		8,795		12,589		—		—		—		—		—		—		25,861		64,365
Financial Instruments issued by foreign institutions
Instruments from foreign governments or Central Bank		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Other instruments from foreign		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Total		—		—		13,398		37,763		3,668		14,013		8,795		12,589		—		—		—		—		—		—		25,861		64,365

Purchased Instruments:

The Bank and its subsidiaries have received financial instruments that they can sell or give as collateral in case the owner of these instruments enters into default or in bankruptcy. As of March 31, 2022, the fair value of the instruments received amounts to Ch$25,945 million (Ch$65,531 million in December 2021).

92

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(b) Debt financial instruments:

At the end of each period, the balances presented under this item are as follows:

	March		December
	2022		2021
	MCh$		MCh$
Instruments issued by the Chilean Government and Central Bank of Chile
Debt financial instruments from the Central Bank of Chile		—		—
Bonds and promissory notes from the Chilean Government		846,983		839,744
Other fiscal debt financial instruments		—		—
Other Finacial Instruments issued in Chile
Debt financial instruments from other domestic banks		—		—
Bonds and trade effects from domestic companies		—		—
Other debt financial instruments issued in the country		—		—
Financial Instruments issued Abroad
Debt financial instruments from foreign Central Banks		—		—
Debt financial instruments from foreign governments and fiscal entities		—		—
Debt financial instruments from other foreing banks		—		—
Bonds and trade effects from foreign companies		—		—
Other debt financial instruments issued abroad		—		—
Accumulated Impairment Value of Financial Assets at Amortized Cost Debt Financial Instruments
Financial assets with no significant increase in credit risk since initial recognition (phase 1)		—		—
Financial assets with a significant increase in credit risk since initial recognition, but without credit impairment (phase 2)		—		—
Financial assets with credit impairment (phase 3)		—		—
Total		846,983		839,744

Under Instruments of the Government and the Central Bank of Chile, instruments are classified to comply with the requirements for the constitution of a technical reserve for an amount equivalent to Ch$100,399 million as of March 31, 2022. Additionally, instruments pledged as collateral as part of the FCIC program are included for an approximate amount of Ch$641,788 million as of March 31, 2022.

93

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(c) Loans and advances to Banks: At the end of each period, the balances presented under this item are as follows:

	Assets before allowances								Allowances established
	Normal Portfolio		Substandard Portfolio		Non-Complying Portfolio				Normal Portfolio			Substandard Portfolio		Non-Complying Portfolio
	Individual		Individual		Individual				Individual			Individual		Individual					Financial
As of March 31,  2022	Evaluation		Evaluation		Evaluation		Total		Evaluation			Evaluation		Evaluation		Total			Asset Net
	MCh$		MCh$		MCh$		MCh$		MCh$			MCh$		MCh$		MCh$			MCh$
Domestic Banks
Interbank loans of liquidity		—		—		—		—		—			—		—		—			—
Interbank loans commercial		—		—		—		—		—			—		—		—			—
Current accounts overdrafts		—		—		—		—		—			—		—		—			—
Chilean exports foreign trade loans		—		—		—		—		—			—		—		—			—
Chilean imports foreign trade loans		—		—		—		—		—			—		—		—			—
Credits with third countries		—		—		—		—		—			—		—		—			—
Non-transferable deposits in domestic banks		—		—		—		—		—			—		—		—			—
Other debts with domestic banks		—		—		—		—		—			—		—		—			—
Foreign Banks
Interbank loans of liquidity		—		—		—		—		—			—		—		—			—
Interbank loans commercial		122,260		—		—		122,260		(267	)		—		—		(267	)		121,993
Current accounts overdrafts		—		—		—		—		—			—		—		—			—
Chilean exports foreign trade loans		67,318		—		—		67,318		(79	)		—		—		(79	)		67,239
Chilean imports foreign trade loans		—		—		—		—		—			—		—		—			—
Credits with third countries		2,187		—		—		2,187		(2	)		—		—		(2	)		2,185
Current account deposits with foreign banks for derivatives transactions		—		—		—		—		—			—		—		—			—
Other non-transferable deposits with foreign banks		—		—		—		—		—			—		—		—			—
Other debts with foreign banks		—		—		—		—		—			—		—		—			—
Subtotal Domestic Bank and Foreign		191,765		—		—		191,765		(348	)		—		—		(348	)		191,417
Central Bank of Chile
Current account deposits for derivative transactions with a counterparty		—		—		—		—		—			—		—		—			—
Other deposits not available		2,800,000		—		—		2,800,000		—			—		—		—			2,800,000
Other receivables		—		—		—		—		—			—		—		—			—
Foreign Central Banks		—		—		—		—		—			—		—		—			—
Current account deposits for derivatives transactions		—		—		—		—		—			—		—		—			—
Other deposits not available		—		—		—		—		—			—		—		—			—
Other receivables		—		—		—		—		—			—		—		—			—
Subtotal Central Bank of Chile  and Foreign Central Banks		2,800,000		—		—		2,800,000		—			—		—		—			2,800,000
Total		2,991,765		—		—		2,991,765		(348	)		—		—		(348	)		2,991,417

94

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(c) Loans and advances to Banks, continued:

	Assets before allowances								Allowances established
	Normal Portfolio		Substandard Portfolio		Non-Complying Portfolio				Normal Portfolio			Substandard Portfolio		Non-Complying Portfolio
	Individual		Individual		Individual				Individual			Individual		Individual					Financial
As of December 31,  2021	Evaluation		Evaluation		Evaluation		Total		Evaluation			Evaluation		Evaluation		Total			Asset Net
	MCh$		MCh$		MCh$		MCh$		MCh$			MCh$		MCh$		MCh$			MCh$
Domestic Banks
Interbank loans of liquidity		160,018		—		—		160,018		(58	)		—		—		(58	)		159,960
Interbank loans commercial		—		—		—		—		—			—		—		—			—
Current accounts overdrafts		—		—		—		—		—			—		—		—			—
Chilean exports foreign trade loans		—		—		—		—		—			—		—		—			—
Chilean imports foreign trade loans		—		—		—		—		—			—		—		—			—
Credits with third countries		—		—		—		—		—			—		—		—			—
Non-transferable deposits in domestic banks		—		—		—		—		—			—		—		—			—
Other debts with foreign banks		—		—		—		—		—			—		—		—			—
Foreign Banks
Interbank loans of liquidity		—		—		—		—		—			—		—		—			—
Interbank loans commercial		158,308		—		—		158,308		(347	)		—		—		(347	)		157,961
Current accounts overdrafts		—		—		—		—		—			—		—		—			—
Chilean exports foreign trade loans		121,008		—		—		121,008		(114	)		—		—		(114	)		120,894
Chilean imports foreign trade loans		—		—		—		—		—			—		—		—			—
Credits with third countries		498		—		—		498		—			—		—		—			498
Current account deposits with foreign banks for derivatives transactions		—		—		—		—		—			—		—		—			—
Other non-transferable deposits with foreign banks		—		—		—		—		—			—		—		—			—
Other debts with foreign banks		—		—		—		—		—			—		—		—			—
Subtotal Domestic Bank and Foreign		439,832		—		—		439,832		(519	)		—		—		(519	)		439,313
Central Bank of Chile
Current account deposits for derivative transactions with a counterparty		—		—		—		—		—			—		—		—			—
Other deposits not available		1,090,000		—		—		1,090,000		—			—		—		—			1,090,000
Other receivables		—		—		—		—		—			—		—		—			—
Foreign Central Banks		—		—		—		—		—			—		—		—			—
Current account deposits for derivatives transactions		—		—		—		—		—			—		—		—			—
Other deposits not available		—		—		—		—		—			—		—		—			—
Other receivables		—		—		—		—		—			—		—		—			—
Subtotal Central Bank of Chile  and Foreign Central Banks		1,090,000		—		—		1,090,000		—			—		—		—			1,090,000
Total		1,529,832		—		—		1,529,832		(519	)		—		—		(519	)		1,529,313

95

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(d) Loans to Customers: At the end of each period, the balances presented under this item are as follows:

	Assets before allowances												Allowances established
	Normal Portfolio				Substandard Portfolio		Non-Complying Portfolio						Normal Portfolio						Substandard Portfolio			Non-Complying Portfolio									Deductible Warranties						Net
	Evaluation				Evaluation		Evaluation						Evaluation						Evaluation			Evaluation									Fogape						Financial
Loans to Customers	Individual		Group		Individual		Individual		Group		Total		Individual			Group			Individual			Individual			Group			Sub Total			Covid-19			Total			Asset
As of March 31, 2022	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Commercial loans
Commercial loans		11,123,454		4,132,638		144,561		127,092		237,179		15,764,924		(99,094	)		(46,402	)		(4,726	)		(56,323	)		(70,422	)		(276,967	)		(43,296	)		(320,263	)		15,444,661
Chilean exports foreign trade loans		621,848		4,900		3,684		10,905		937		642,274		(17,278	)		(185	)		(106	)		(5,465	)		(299	)		(23,333	)		—			(23,333	)		618,941
Chilean imports foreign trade loans		471,053		42,690		5,789		3,368		1,291		524,191		(17,310	)		(1,160	)		(188	)		(1,607	)		(633	)		(20,898	)		—			(20,898	)		503,293
Foreign trade loans between third countries		3,001		—		—		—		—		3,001		(133	)		—			—			—			—			(133	)		—			(133	)		2,868
Current account debtors		82,226		77,913		3,828		925		858		165,750		(2,183	)		(4,432	)		(302	)		(454	)		(415	)		(7,786	)		—			(7,786	)		157,964
Credit card debtors		14,271		49,997		552		365		3,149		68,334		(586	)		(2,211	)		(74	)		(243	)		(1,779	)		(4,893	)		—			(4,893	)		63,441
Factoring transactions		397,900		33,080		2,908		545		58		434,491		(7,982	)		(876	)		(185	)		(348	)		(21	)		(9,412	)		—			(9,412	)		425,079
Commercial lease transactions (1)		1,323,661		279,569		42,540		10,207		7,412		1,663,389		(2,822	)		(3,374	)		(81	)		(2,451	)		(1,240	)		(9,968	)		(1,294	)		(11,262	)		1,652,127
Student loans		—		55,987		—		—		2,411		58,398		—			(2,527	)		—			—			(1,644	)		(4,171	)		—			(4,171	)		54,227
Other loans and accounts receivable		5,564		7,291		228		10,189		1,426		24,698		(181	)		(3	)		(48	)		(8,386	)		(580	)		(9,198	)		—			(9,198	)		15,500
Subtotal		14,042,978		4,684,065		204,090		163,596		254,721		19,349,450		(147,569	)		(61,170	)		(5,710	)		(75,277	)		(77,033	)		(366,759	)		(44,590	)		(411,349	)		18,938,101
Residential mortgage loans
Letters of credit		—		5,182		—		—		288		5,470		—			(3	)		—			—			(14	)		(17	)		—			(17	)		5,453
Endorsable mortgage loans		—		16,089		—		—		660		16,749		—			(8	)		—			—			(40	)		(48	)		—			(48	)		16,701
Loans with mutual funds financed by mortgage bonds		—		—		—		—		—		—		—			—			—			—			—			—			—			—			—
Other residential lending		—		10,042,874		—		—		235,876		10,278,750		—			(9,501	)		—			—			(17,149	)		(26,650	)		—			(26,650	)		10,252,100
Residential lease transactions (1)		—		—		—		—		—		—		—			—			—			—			—			—			—			—			—
Other loans and accounts receivable		—		145,356		—		—		8,619		153,975		—			(487	)		—			—			(1,492	)		(1,979	)		—			(1,979	)		151,996
Subtotal		—		10,209,501		—		—		245,443		10,454,944		—			(9,999	)		—			—			(18,695	)		(28,694	)		—			(28,694	)		10,426,250
Consumer loans
Consumer loans in installments		—		2,792,328		—		—		160,607		2,952,935		—			(119,197	)		—			—			(103,664	)		(222,861	)		—			(222,861	)		2,730,074
Current account debtors		—		189,504		—		—		3,236		192,740		—			(6,235	)		—			—			(1,542	)		(7,777	)		—			(7,777	)		184,963
Credit card debtors		—		1,247,772		—		—		19,277		1,267,049		—			(26,490	)		—			—			(11,750	)		(38,240	)		—			(38,240	)		1,228,809
Consumer lease transactions (1)		—		520		—		—		—		520		—			(5	)		—			—			—			(5	)		—			(5	)		515
Other loans and accounts receivable		—		6		—		—		932		938		—			(1	)		—			—			(903	)		(904	)		—			(904	)		34
Subtotal		—		4,230,130		—		—		184,052		4,414,182		—			(151,928	)		—			—			(117,859	)		(269,787	)		—			(269,787	)		4,144,395
Total		14,042,978		19,123,696		204,090		163,596		684,216		34,218,576		(147,569	)		(223,097	)		(5,710	)		(75,277	)		(213,587	)		(665,240	)		(44,590	)		(709,830	)		33,508,746

(1) In this item, the Bank finances its clients the acquisition of movable and immovable property through financial lease agreements. As of March 31, 2022 Ch$855,234 million correspond to finance leases on immovable property and Ch$808,675 million correspond to finance leases on movable property.

96

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(d) Loans to Customers, continued:

	Assets before allowances												Allowances established
	Normal Portfolio				Substandard Portfolio		Non-Complying Portfolio						Normal Portfolio						Substandard Portfolio			Non-Complying Portfolio									Deductible Warranties						Net
	Evaluation				Evaluation		Evaluation						Evaluation						Evaluation			Evaluation									Fogape						Financial
Loans to Customers	Individual		Group		Individual		Individual		Group		Total		Individual			Group			Individual			Individual			Group			Sub Total			Covid-19			Total			Asset
As of December 31, 2021	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Commercial loans
Commercial loans		11,228,744		4,230,007		140,134		126,750		252,100		15,977,735		(99,681	)		(42,951	)		(4,994	)		(55,238	)		(78,173	)		(281,037	)		(47,196	)		(328,233	)		15,649,502
Chilean exports foreign trade loans		696,471		5,622		3,991		11,890		1,035		719,009		(16,382	)		(149	)		(96	)		(5,799	)		(528	)		(22,954	)		—			(22,954	)		696,055
Chilean imports foreign trade loans		494,706		45,839		3,264		3,750		1,728		549,287		(18,219	)		(1,146	)		(230	)		(1,808	)		(958	)		(22,361	)		—			(22,361	)		526,926
Foreign trade loans between third countries		2,950		—		—		—		—		2,950		(128	)		—			—			—			—			(128	)		—			(128	)		2,822
Current account debtors		69,300		69,301		3,521		832		1,056		144,010		(1,638	)		(1,653	)		(231	)		(418	)		(444	)		(4,384	)		—			(4,384	)		139,626
Credit card debtors		12,443		45,972		498		417		3,262		62,592		(510	)		(1,283	)		(84	)		(259	)		(1,773	)		(3,909	)		—			(3,909	)		58,683
Factoring transactions		446,556		36,272		2,924		411		93		486,256		(9,051	)		(924	)		(415	)		(265	)		(33	)		(10,688	)		—			(10,688	)		475,568
Commercial lease transactions (1)		1,275,806		275,147		43,174		10,124		7,812		1,612,063		(2,917	)		(1,842	)		(53	)		(2,439	)		(2,977	)		(10,228	)		(1,338	)		(11,566	)		1,600,497
Student loans		—		55,346		—		—		2,602		57,948		—			(2,555	)		—			—			(1,754	)		(4,309	)		—			(4,309	)		53,639
Other loans and accounts receivable		5,569		6,808		159		8,788		1,582		22,906		(178	)		(9	)		(18	)		(7,451	)		(700	)		(8,356	)		—			(8,356	)		14,550
Subtotal		14,232,545		4,770,314		197,665		162,962		271,270		19,634,756		(148,704	)		(52,512	)		(6,121	)		(73,677	)		(87,340	)		(368,354	)		(48,534	)		(416,888	)		19,217,868
Residential mortgage loans
Letters of credit		—		5,722		—		—		334		6,056		—			(4	)		—			—			(15	)		(19	)		—			(19	)		6,037
Endorsable mortgage loans		—		16,941		—		—		842		17,783		—			(9	)		—			—			(48	)		(57	)		—			(57	)		17,726
Loans with mutual funds financed by mortgage bonds		—		—		—		—		—		—		—			—			—			—			—			—			—			—			—
Other residential lending		—		9,896,877		—		—		273,164		10,170,041		—			(9,049	)		—			—			(19,591	)		(28,640	)		—			(28,640	)		10,141,401
Residential lease transactions (1)		—		—		—		—		—		—		—			—			—			—			—			—			—			—			—
Other loans and accounts receivable		—		142,754		—		—		10,018		152,772		—			(450	)		—			—			(1,565	)		(2,015	)		—			(2,015	)		150,757
Subtotal		—		10,062,294		—		—		284,358		10,346,652		—			(9,512	)		—			—			(21,219			(30,731	)		—			(30,731	)		10,315,921
Consumer loans
Consumer loans in installments		—		2,684,317		—		—		190,964		2,875,281		—			(112,005	)		—			—			(115,100	)		(227,105	)		—			(227,105	)		2,648,176
Current account debtors		—		168,993		—		—		3,630		172,623		—			(5,422	)		—			—			(1,324	)		(6,746	)		—			(6,746	)		165,877
Credit card debtors		—		1,179,592		—		—		19,534		1,199,126		—			(25,195	)		—			—			(10,443	)		(35,638	)		—			(35,638	)		1,163,488
Consumer lease transactions (1)		—		510		—		—		—		510		—			(10	)		—			—			—			(10	)		—			(10	)		500
Other loans and accounts receivable		—		6		—		—		1,163		1,169		—			(2	)		—			—			(1,129	)		(1,131	)		—			(1,131	)		38
Subtotal		—		4,033,418		—		—		215,291		4,248,709		—			(142,634	)		—			—			(127,996	)		(270,630	)		—			(270,630	)		3,978,079
Total		14,232,545		18,866,026		197,665		162,962		770,919		34,230,117		(148,704	)		(204,658	)		(6,121	)		(73,677	)		(236,555	)		(669,715	)		(48,534	)		(718,249	)		33,511,868

(1) In this item, the Bank finances its clients the acquisition of movable and immovable property through financial lease agreements. As of December 31, 2021 Ch$810,611 million correspond to finance leases on movable property and Ch$801,962 million correspond to finance leases on movable property.

97

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(e) Contingent loan: At the close of each reporting period, the contingent credit risk exposure is as follows;

	Outstanding exposure before provisions												Provisions established
					Substandard		Non-Complying												Substandard			Non-Complying									Net exposure for credit
	Normal Portfolio				Portfolio		Portfolio						Normal Portfolio						Portfolio			Portfolio									risk of
	Evaluation				Evaluation		Evaluation						Evaluation						Evaluation			Evaluation									contingent
As of March 31, 2022	Individual		Group		Individual		Individual		Group		Total		Individual			Group			Individual			Individual			Group			Total			loans
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Warranty by endorsement and sureties		417,203		501		6,595		—		—		424,299		(3,770	)		(37	)		(2,771	)		—			—			(6,578	)		417,721
Letters of credit for goods circulation operations		529,142		611		1		—		—		529,754		(1,263	)		(3	)		—			—			—			(1,266	)		528,488
Commitments to purchase local currency debt abroad		—		—		—		—		—		—		—			—			—			—			—			—			—
Contingent event transactions		2,177,840		45,758		30,572		2,199		350		2,256,719		(27,260	)		(606	)		(1,233	)		(1,051	)		(171	)		(30,321	)		2,226,398
Undrawn credit lines with immediate termination		1,200,902		7,333,860		4,459		685		16,308		8,556,214		(1,815	)		(3,058	)		(48	)		(428	)		(7,912	)		(13,261	)		8,542,953
Undrawn credit lines		—		—		—		—		—		—		—			—			—			—			—			—			—
Credits for Higher Education Law No. 20,027 (CAE)		—		—		—		—		—		—		—			—			—			—			—			—			—
Other irrevocable loan commitments		—		—		—		—		—		—		—			—			—			—			—			—			—
Other contingent loans		78,355		—		—		—		—		78,355		(28	)		—			—			—			—			(28	)		78,327
Total		4,403,442		7,380,730		41,627		2,884		16,658		11,845,341		(34,136	)		(3,704	)		(4,052	)		(1,479	)		(8,083	)		(51,454	)		11,793,887

	Outstanding exposure before provisions												Provisions established
					Substandard		Non-Complying												Substandard			Non-Complying									Net exposure for credit
	Normal Portfolio				Portfolio		Portfolio						Normal Portfolio						Portfolio			Portfolio									risk of
	Evaluation				Evaluation		Evaluation						Evaluation						Evaluation			Evaluation									contingent
As of December 31, 2021	Individual		Group		Individual		Individual		Group		Total		Individual			Group			Individual			Individual			Group			Total			loans
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Warranty by endorsement and sureties		431,932		567		7,170		—		—		439,669		(3,720	)		(8	)		(3,015	)								(6,743	)		432,926
Letters of credit for goods circulation operations		448,300		1,604		120		—		—		450,024		(1,577	)		(6	)		(2	)		—			—			(1,585	)		448,439
Commitments to purchase local currency debt abroad		—		—		—		—		—		—		—			—			—			—			—			—			—
Contingent event transactions		2,290,721		45,447		28,697		1,728		361		2,366,954		(27,541	)		(470	)		(1,223	)		(871	)		(198	)		(30,303	)		2,336,651
Undrawn credit lines with immediate termination		1,311,852		7,310,486		4,421		719		23,715		8,651,193		(1,921	)		(3,887	)		(57	)		(409	)		(9,055	)		(15,329	)		8,635,864
Undrawn credit lines		—		—		—		—		—		—		—			—			—			—			—			—			—
Credits for Higher Education Law No. 20,027 (CAE)		—		—		—		—		—		—		—			—			—			—			—			—			—
Other irrevocable loan commitments		—		—		—		—		—		—		—			—			—			—			—			—			—
Other contingent loans		78,951		—		—		—		—		78,951		(26	)		—			—			—			—			(26	)		78,925
Total		4,561,756		7,358,104		40,408		2,447		24,076		11,986,791		(34,785	)		(4,371	)		(4,297	)		(1,280	)		(9,253	)		(53,986	)		11,932,805

98

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(f) Provisions:

Summary of changes in due from banks provisions constituted by credit risk portfolio in the period:

	Changes in provisions constituted by portfolio in the period
	Individual Evaluation
	Normal Portfolio			Substandard Portfolio		Non-Complying Portfolio		Total
	MCh$			MCh$		MCh$		MCh$
Loans and advances to Banks
Balance as of January 1, 2022		519			—		—		519
Allowances established/ released:		—			—		—		—
Change in measurement without portfolio reclassification during the period:		—			—		—		—
Change in measurement without portfolio reclassification from the beginning to the end of the period (portfolio from (-) until (+)):		—			—		—		—
Transfer from Normal individual to Substandard		—			—		—		—
Transfer from Normal individual to Non-Complying individual		—			—		—		—
Transfer from Substandard to Non-Complying individual		—			—		—		—
Transfer from Substandard to Normal individual		—			—		—		—
Transfer from Non-Complying individual to Substandard		—			—		—		—
Transfer from Non-Complying individual to Normal individual		—			—		—		—
New assets originated		209			—		—		209
New credits for conversion of contingent to loan		—			—		—		—
New assets purchased		—			—		—		—
Sales or transfers of credits		—			—		—		—
Payment of credit		(345	)		—		—		(345	)
Provisions for write-offs		—			—		—		—
Recovery of written-off loans		—			—		—		—
Foreign exchange adjustments		(35	)		—		—		(35	)
Other changes in allowances (if applicable)		—			—		—		—
Balance as of March 31, 2022		348			—		—		348

99

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(f) Provisions, continued:

	Changes in provisions constituted by portfolio in the period
	Individual Evaluation
	Normal Portfolio			Substandard Portfolio		Non-Complying Portfolio		Total
	MCh$			MCh$		MCh$		MCh$
Loans and advances to Banks
Balance as of January 1, 2021		665			—		—		665
Allowances established/ released:		—			—		—		—
Change in measurement without portfolio reclassification during the period:		11			—		—		11
Change in measurement without portfolio reclassification from the beginning to the end of the period (portfolio from (-) until (+)):		—			—		—		—
Transfer from Normal individual to Substandard		—			—		—		—
Transfer from Normal individual to Non-Complying individual		—			—		—		—
Transfer from Substandard to Non-Complying individual		—			—		—		—
Transfer from Substandard to Normal individual		—			—		—		—
Transfer from Non-Complying individual to Substandard		—			—		—		—
Transfer from Non-Complying individual to Normal individual		—			—		—		—
New assets originated		335			—		—		335
New credits for conversion of contingent to loan		—			—		—		—
New assets purchased		—			—		—		—
Sales or transfers of credits		—			—		—		—
Payment of credit		(536	)		—		—		(536	)
Provisions for write-offs		—			—		—		—
Recovery of written-off loans		—			—		—		—
Foreign exchange adjustments		7			—		—		7
Other changes in allowances (if applicable)		—			—		—		—
Balance as of March 31, 2021		482			—		—		482
Balance as of December 31, 2021		519			—		—		519

100

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(f) Provisions, continued:

Summary of changes in commercial loan provisions constituted by credit risk portfolio in the period;

	Changes in provisions constituted by portfolio in the period
	Normal Portfolio									Substandard Portfolio												Deductible
	Evaluation									Evaluation						Sub total						Warranties
	Group			Individual			Substandard Portfolio			Group			Individual			Group			Individual			FOGAPE Covid-19			Total
Commercial loans	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Balance as of January 1, 2022		52,512			148,704			6,121			87,340			73,677			139,852			228,502			48,534			416,888
Provisions established/ released:
Change in measurement without portfolio reclassification during the period:		15,213			1,841			161			1,723			2,816			16,936			4,818			—			21,754
Change in measurement without portfolio reclassification from the beginning to the end of the period (portfolio from (-) until (+)):
Transfer from Normal individual to Substandard		—			(224	)		448			—			—			—			224			—			224
Transfer from Normal individual to Non-Complying individual		—			(133	)		—			—			878			—			745			—			745
Transfer from Substandard to Non-Complying individual		—			—			(303	)		—			1,384			—			1,081			—			1,081
Transfer from Substandard to Normal individual		—			62			(112	)		—			—			—			(50	)		—			(50	)
Transfer from Non-Complying individual to Substandard		—			—			19			—			(26	)		—			(7	)		—			(7	)
Transfer from Non-Complying individual to Normal individual		—			—			—			—			—			—			—			—			—
Transfer from Normal group to Non-Complying group		(3,724	)		—			—			7,756			—			4,032			—			—			4,032
Transfer from Non-Complying group to Normal group		1,020			—			—			(4,959	)		—			(3,939	)		—			—			(3,939	)
Transfer from Individual (normal, substandard, non-complying) to Group (normal, non-complying)		—			—			—			—			—			—			—			—			—
Transfer from Group (normal, non-complying) to Individual (normal, substandard, non-complying)		(175	)		217			6			(58	)		—			(233	)		223			—			(10	)
New assets originated		6,299			49,563			601			3,948			7,086			10,247			57,250			20			67,517
New credits for conversion of contingent to loan		1,606			1,683			104			107			99			1,713			1,886			—			3,599
New assets purchased		—			—			—			—			—			—			—			—			—
Sales or transfers of credits		—			—			—			—			—			—			—			—			—
Payment of credit		(11,320	)		(49,606	)		(1,275	)		(7,533	)		(6,193	)		(18,853	)		(57,074	)		(3,964	)		(79,891	)
Provisions for write-offs		(195	)		(2	)		(5	)		(11,144	)		(2,058	)		(11,339	)		(2,065	)		—			(13,404	)
Recovery of written-off loans		63			—			—			—			—			63			—			—			63
Changes to models and assumptions		—			—			—			—			—			—			—			—			—
Foreign exchange adjustments		(129	)		(4,536	)		(55	)		(147	)		(2,386	)		(276	)		(6,977	)		—			(7,253	)
Other changes in allowances (if applicable)		—			—			—			—			—			—			—			—			—
Balance as of March 31, 2022		61,170			147,569			5,710			77,033			75,277			138,203			228,556			44,590			411,349

101

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(f) Provisions, continued:

	Changes in provisions constituted by portfolio in the period
	Normal Portfolio									Substandard Portfolio												Deductible
	Evaluation									Evaluation						Sub total						Warranties
	Group			Individual			Substandard Portfolio			Group			Individual			Group			Individual			FOGAPE Covid-19			Total
Commercial loans	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Balance as of January 1, 2021		62,256			143,912			6,579			95,229			90,731			157,485			241,222			24,109			422,816
Allowances established/ released:
Change in measurement without portfolio reclassification during the period:		5,911			5,378			310			9,854			1,973			15,765			7,661			—			23,426
Change in measurement without portfolio reclassification from the beginning to the end of the period (portfolio from (-) until (+)):
Transfer from Normal individual to Substandard		—			(80	)		129			—			—			—			49			—			49
Transfer from Normal individual to Non-Complying individual		—			(22	)		—			—			249			—			227			—			227
Transfer from Substandard to Non-Complying individual		—			—			(311	)		—			542			—			231			—			231
Transfer from Substandard to Normal individual		—			3			(6	)		—			—			—			(3	)		—			(3	)
Transfer from Non-Complying individual to Substandard		—			—			8			—			(59	)		—			(51	)		—			(51	)
Transfer from Non-Complying individual to Normal individual		—			—			—			—			—			—			—			—			—
Transfer from Normal group to Non-Complying group		(3,022	)		—			—			6,950			—			3,928			—			—			3,928
Transfer from Non-Complying group to Normal group		2,386			—			—			(7,272	)		—			(4,886	)		—			—			(4,886	)
Transfer from Individual (normal, substandard, non-complying) up to Group (normal, non-complying)		141			(259	)		(39	)		119			(42	)		260			(340	)		—			(80	)
Transfer from Group (normal, non-complying) to Individual (normal, substandard, non-complying)		(614	)		859			45			(1,225	)		662			(1,839	)		1,566			—			(273	)
New assets originated		26,528			60,489			1,552			15,050			9,043			41,578			71,084			3,697			116,359
New credits for conversion of contingent to loan		1,410			1,712			83			168			80			1,578			1,875			—			3,453
New assets purchased		—			—			—			—			—			—			—			—			—
Sales or transfers of credits		—			—			—			—			—			—			—			—			—
Payment of credit		(29,741	)		(66,058	)		(2,752	)		(14,153	)		(11,024	)		(43,894	)		(79,834	)		(270	)		(123,998	)
Provisions for write-offs		(9	)		—			—			(15,044	)		(3,306	)		(15,053	)		(3,306	)		—			(18,359	)
Recovery of written-off loans		9			—			—			—			—			9			—			—			9
Changes to models and assumptions		—			—			—			—			—			—			—			—			—
Foreign exchange adjustments		14			386			9			47			439			61			834			—			895
Other changes in allowances (if applicable)		—			—			—			—			—			—			—			—			—
Balance as of March 31, 2021		65,269			146,320			5,607			89,723			89,288			154,992			241,215			27,536			423,743
Balance as of December 31, 2021		52,512			148,704			6,121			87,340			73,677			139,852			228,502			48,534			416,888

102

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(f) Provisions, continued:

Summary of changes in residential mortgage loan provisions constituted by credit risk portfolio in the period;

	Changes in provisions constituted by portfolio in the period Group Evaluation
	Normal Portfolio			Non-Complying Portfolio			Total
Residential mortgage loans	MCh $			MCh $			MCh $
Balance as of January 1, 2022		9,512			21,219			30,731
Allowances established/ released:
Change in measurement without portfolio reclassification during the period:		1,005			2,725			3,730
Change in measurement without portfolio reclassification from the beginning to the end of the period (portfolio from (-) until (+)):
Transfer from Normal group to Non-Complying group		(457	)		1,523			1,066
Transfer from Non-Complying group to Normal group		308			(3,278	)		(2,970	)
New assets originated		298			17			315
New assets purchased		—			—			—
Sales or transfers of credits		—			—			—
Payment of credit		(667	)		(818	)		(1,485	)
Provisions for write-offs		—			(2,693	)		(2,693	)
Recovery of written-off loans		—			—			—
Changes to models and assumptions		—			—			—
Foreign exchange adjustments		—			—			—
Other changes in allowances (if applicable)		—			—			—
Balance as of March 31,  2022		9,999			18,695			28,694

103

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(f) Provisions, continued:

	Changes in provisions constituted by portfolio in the period Group Evaluation
	Normal Portfolio			Non-Complying Portfolio			Total
Residential mortgage loans	MCh $			MCh $			MCh $
Balance as of January 1, 2021		13,600			20,164			33,764
Allowances established/ released:
Change in measurement without portfolio reclassification during the period:		792			2,050			2,842
Change in measurement without portfolio reclassification from the beginning to the end of the period (portfolio from (-) until (+)):
Transfer from Normal group to Non-Complying group		(391	)		642			251
Transfer from Non-Complying group to Normal group		350			(1,131	)		(781	)
New assets originated		5,378			1,155			6,533
New assets purchased		—			—			—
Sales or transfers of credits		—			—			—
Payment of credit		(6,235	)		(628	)		(6,863	)
Provisions for write-offs		—			(2,956	)		(2,956	)
Recovery of written-off loans		—			—			—
Changes to models and assumptions		—			—			—
Foreign exchange adjustments		—			—			—
Other changes in allowances (if applicable)		—			—			—
Balance as of  March 31, 2021		13,494			19,296			32,790
Balance as of December 31, 2021		9,512			21,219			30,731

104

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(f) Provisions, continued:

Summary of changes in consumer loan provisions constituted by credit risk portfolio in the period;

	Changes in provisions constituted by portfolio in the period Group Evaluation
	Normal Portfolio			Non-Complying Portfolio			Total
Consumer loans	MCh $			MCh $			MCh $
Balance as of January 1, 2022		142,634			127,996			270,630
Allowances established/ released:
Change in measurement without portfolio reclassification during the period:		24,835			26,694			51,529
Change in measurement without portfolio reclassification from the beginning to the end of the period (portfolio from (-) until (+)):
Transfer from Normal group to Non-Complying group		(13,829	)		22,552			8,723
Transfer from Non-Complying group to Normal group		4,574			(20,878	)		(16,304	)
New assets originated		21,276			8,016			29,292
New credits for conversion of contingent to loan		8,705			1,374			10,079
New assets purchased		—			—			—
Sales or transfers of credits		—			—			—
Payment of credit		(35,966	)		(19,943	)		(55,909	)
Provisions for write-offs		(565	)		(27,941	)		(28,506	)
Recovery of written-off loans		326			—			326
Changes to models and assumptions		—			—			—
Foreign exchange adjustments		(62	)		(11	)		(73	)
Other changes in allowances (if applicable)		—			—			—
Balance as of March 31,  2022		151,928			117,859			269,787

105

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(f) Provisions, continued:

	Changes in provisions constituted by portfolio in the period Group Evaluation
	Normal Portfolio			Non-Complying Portfolio			Total
Consumer loans	MCh $			MCh $			MCh $
Balance as of January 1, 2021		145,683			144,168			289,851
Allowances established/ released:
Change in measurement without portfolio reclassification during the period:		14,225			18,154			32,379
Change in measurement without portfolio reclassification from the beginning to the end of the period (portfolio from (-) until (+)):
Transfer from Normal group to Non-Complying group		(8,427	)		16,203			7,776
Transfer from Non-Complying group to Normal group		4,484			(12,383	)		(7,899	)
New assets originated		58,446			26,540			84,986
New credits for conversion of contingent to loan		7,504			1,196			8,700
New assets purchased		—			—			—
Sales or transfers of credits		—			—			—
Payment of credit		(85,238	)		(30,023	)		(115,261	)
Provisions for write-offs		(114	)		(38,298	)		(38,412	)
Recovery of written-off loans		558			—			558
Changes to models and assumptions		—			—			—
Foreign exchange adjustments		105			29			134
Other changes in allowances (if applicable)		—			—			—
Balance as of  March 31, 2021		137,226			125,586			262,812
Balance as of December 31, 2021		142,634			127,996			270,630

106

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(f) Provisions, continued:

Summary of changes in contingent credit risk provisions constituted by credit risk portfolio in the period;

	Changes in provisions constituted by portfolio in the period
	Normal Portfolio									Non-Complying Portfolio
	Evaluation						Substandard			Evaluation						Subtotal
	Group			Individual			Portfolio			Group			Individual			Group			Individual			Total
Contingent loan exposure	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Balance as of January 1, 2022		4,371			34,785			4,297			9,253			1,280			13,624			40,362			53,986
Provisions established/ released:
Change in measurement without portfolio reclassification during the period:		458			796			41			1,835			252			2,293			1,089			3,382
Change in measurement without portfolio reclassification from the beginning to the end of the period (portfolio from (-) until (+)):
Transfer from Normal individual to Substandard		—			(31	)		57			—			—			—			26			26
Transfer from Normal individual to Non-Complying individual		—			(65	)		—			—			982			—			917			917
Transfer from Substandard to Non-Complying individual		—			—			(15	)		—			65			—			50			50
Transfer from Substandard to Normal individual		—			—			(2	)		—			—			—			(2	)		(2	)
Transfer from Non-Complying individual to Substandard		—			—			—			—			—			—			—			—
Transfer from Non-Complying individual to Normal individual		—			—			—			—			(21	)		—			(21	)		(21	)
Transfer from Normal group to Non-Complying group		(44	)		—			—			387			—			343			—			343
Transfer from Non-Complying group to Normal group		18			—			—			(2,289	)		—			(2,271	)		—			(2,271	)
Transfer from ndividual (normal, substandard, non-complying) to Group (normal, non-complying )		—			—			—			—			—			—			—			—
Transfer from Group (normal, non-complying) to Individual (normal, substandard, non-complying)		(17	)		14			—			—			—			(17	)		14			(3	)
New contingent loan granted		577			9,324			98			388			59			965			9,481			10,446
Contingent credits for conversion		(4,466	)		(1,173	)		(66	)		(828	)		(118	)		(5,294	)		(1,357	)		(6,651	)
Changes to models and assumptions		—			—			—			—			—			—			—			—
Foreign exchange adjustments		(308	)		(684	)		(245	)		(301	)		(4	)		(609	)		(933	)		(1,542	)
Other changes in provisions (if applicable)		3,115			(8,830	)		(113	)		(362	)		(1,016	)		2,753			(9,959	)		(7,206	)
Balance as of March 31,  2022		3,704			34,136			4,052			8,083			1,479			11,787			39,667			51,454

107

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(f) Provisions, continued:

	Changes in provisions constituted by portfolio in the period
	Normal Portfolio									Non-Complying Portfolio
	Evaluation						Substandard			Evaluation						Subtotal
	Group			Individual			Portfolio			Group			Individual			Group			Individual			Total
Contingent loan exposure	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Balance as of January 1, 2021		25,257			35,157			761			9,112			5,903			34,369			41,821			76,190
Provisions established/ released:
Change in measurement without portfolio reclassification during the period:		2,078			1,006			89			1,887			267			3,965			1,362			5,327
Change in measurement without portfolio reclassification from the beginning to the end of the period (portfolio from (-) until (+)):
Transfer from Normal individual to Substandard		—			(18	)		28			—			—			—			10			10
Transfer from Normal individual to Non-Complying individual		—			—			—			—			10			—			10			10
Transfer from Substandard to Non-Complying individual		—			—			(4	)		—			14			—			10			10
Transfer from Substandard to Normal individual		—			4			(6	)		—			—			—			(2	)		(2	)
Transfer from Non-Complying individual to Substandard		—			—			1			—			(26	)		—			(25	)		(25	)
Transfer from Non-Complying individual to Normal individual		—			—			—			—			—			—			—			—
Transfer from Normal group to Non-Complying group		(91	)		—			—			356			—			265			—			265
Transfer from Non-Complying group to Normal group		49			—			—			(943	)		—			(894	)		—			(894	)
Transfer from ndividual (normal, substandard, non-complying) to Group (normal, non-complying )		126			(151	)		—			39			(7	)		165			(158	)		7
Transfer from Group (normal, non-complying) to Individual (normal, substandard, non-complying)		(28	)		40			—			—			—			(28	)		40			12
New contingent loan granted		1			9			—			—			1			1			10			11
Contingent credits for conversion		(2,875	)		(742	)		(52	)		(1,463	)		(111	)		(4,338	)		(905	)		(5,243	)
Changes to models and assumptions		—			—			—			—			—			—			—			—
Foreign exchange adjustments		2			64			—			—			37			2			101			103
Other changes in provisions (if applicable)		(757	)		(644	)		(68	)		(543	)		(811	)		(1,300	)		(1,523	)		(2,823	)
Balance as of March 31,  2021		23,762			34,725			749			8,445			5,277			32,207			40,751			72,958
Balance as of December 31,  2021		4,371			34,785			4,297			9,253			1,280			13,624			40,362			53,986

108

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(f) Provisions, continued:

In addition to these provisions for credit risk, country risk provisions are maintained to cover foreign operations and additional provisions agreed by the Board of Directors, which are presented in liabilities under the item Special provisions for credit risk (See Note No. 26).

Other disclosures:

1. As of March 31, 2022, the Bank and its subsidiaries have made sales of loan portfolios. The effect in income of these sales, net before taxes, is described in Note No. 13 letter (m).

2. As of March 31, 2022, the Bank and its subsidiaries derecognized 100% of its portfolio of loans sold and on which all or substantially all of the risks and benefits associated to these financial assets have been transferred (see Note No. 13 letter (m)).

3. As of March 31, 2022, under the Commercial Loans item, operations are maintained that guarantee obligations maintained with the Central Bank of Chile as part of the Loan Increase Conditional Credit Facility (FCIC by its Spanish initials) program for an approximate amount of Ch$3,304,338 million (Ch$3,024,118 million in December 2021).

109

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

g) Industry sector:

At the closing of each reporting period, the composition of economic activity for loans, contingent loans exposure and provisions constituted are as follows:

	Credit and Contingent loans Exposure in												Allowances Established in
	Domestic				Foreign				Total		Total		Domestic						Foreign						Total			Total
	March		December		March		December		March		December		March			December			March			December			March			December
	2022		2021		2022		2021		2022		2021		2022			2021			2022			2021			2022			2021
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Loans and advances to Banks		2,800,000		1,250,018		191,765		279,814		2,991,765		1,529,832		—			(58	)		(348	)		(461	)		(348	)		(519	)
Commercial loans
Agriculture and livestock		800,944		811,014		—		—		800,944		811,014		(23,747	)		(18,772	)		—			—			(23,747	)		(18,772	)
Fruit		605,541		636,015		—		—		605,541		636,015		(13,925	)		(12,678	)		—			—			(13,925	)		(12,678	)
Forestry		290,693		315,375		—		—		290,693		315,375		(2,575	)		(2,548	)		—			—			(2,575	)		(2,548	)
Fishing		31,566		33,984		—		—		31,566		33,984		(3,200	)		(3,365	)		—			—			(3,200	)		(3,365	)
Mining		164,464		162,823		—		—		164,464		162,823		(2,380	)		(2,512	)		—			—			(2,380	)		(2,512	)
Oil and natural gas		587		783		—		—		587		783		(23	)		(22	)		—			—			(23	)		(22	)
Product manufacturing industries;
Foods, beverages and tobacco		520,375		505,171		—		—		520,375		505,171		(12,833	)		(12,648	)		—			—			(12,833	)		(12,648	)
Textiles, leather goods and footwear		28,857		33,862		—		—		28,857		33,862		(1,169	)		(1,192	)		—			—			(1,169	)		(1,192	)
Woods and furnitures		170,177		152,548		—		—		170,177		152,548		(3,187	)		(2,780	)		—			—			(3,187	)		(2,780	)
Cellulose, Paper  and printing		21,668		22,820		—		—		21,668		22,820		(1,149	)		(1,285	)		—			—			(1,149	)		(1,285	)
Chemicals and petroleum products		394,985		388,778		—		—		394,985		388,778		(6,062	)		(5,894	)		—			—			(6,062	)		(5,894	)
Metal, non-metal, machine or others		436,554		498,520		—		—		436,554		498,520		(11,440	)		(11,535	)		—			—			(11,440	)		(11,535	)
Electricity, gas and water		459,717		464,080		—		—		459,717		464,080		(4,268	)		(4,201	)		—			—			(4,268	)		(4,201	)
Residential construction		266,456		260,234		—		—		266,456		260,234		(11,840	)		(10,182	)		—			—			(11,840	)		(10,182	)
Non-residential construction (office, civil engineering)		546,032		540,999		—		—		546,032		540,999		(8,576	)		(6,820	)		—			—			(8,576	)		(6,820	)
Wholesale		1,632,422		1,760,313		—		—		1,632,422		1,760,313		(58,813	)		(59,808	)		—			—			(58,813	)		(59,808	)
Retail, restaurants and hotels		1,079,651		1,131,523		6,688		7,793		1,086,339		1,139,316		(48,540	)		(46,177	)		(546	)		(641	)		(49,086	)		(46,818	)
Transport and storage		1,171,326		1,179,301		—		—		1,171,326		1,179,301		(31,788	)		(31,083	)		—			—			(31,788	)		(31,083	)
Communications		282,506		290,936		—		—		282,506		290,936		(3,310	)		(3,462	)		—			—			(3,310	)		(3,462	)
Financial services		3,010,251		3,043,255		1,591		1,723		3,011,842		3,044,978		(38,820	)		(41,132	)		(28	)		(30	)		(38,848	)		(41,162	)
Business services		1,763,553		1,775,689		—		—		1,763,553		1,775,689		(48,766	)		(44,738	)		—			—			(48,766	)		(44,738	)
Real estate services		3,092,796		3,034,750		23,270		4,202		3,116,066		3,038,952		(28,732	)		(26,637	)		(995	)		(180	)		(29,727	)		(26,817	)
Student loans		58,398		57,947		—		—		58,398		57,947		(4,170	)		(4,308	)		—			—			(4,170	)		(4,308	)
Government administration, defence and police force		31,065		33,803		—		—		31,065		33,803		(476	)		(490	)		—			—			(476	)		(490	)
Social services and other  community services		765,623		770,529		—		—		765,623		770,529		(18,039	)		(17,275	)		—			—			(18,039	)		(17,275	)
Personal services		1,691,694		1,715,986		—		—		1,691,694		1,715,986		(21,952	)		(44,493	)		—			—			(21,952	)		(44,493	)
Subtotal		19,317,901		19,621,038		31,549		13,718		19,349,450		19,634,756		(409,780	)		(416,037	)		(1,569	)		(851	)		(411,349	)		(416,888	)
Residential mortgage loans		10,454,944		10,346,652		—		—		10,454,944		10,346,652		(28,694	)		(30,731	)		—			—			(28,694	)		(30,731	)
Consumer loans		4,414,182		4,248,709		—		—		4,414,182		4,248,709		(269,787	)		(270,630	)		—			—			(269,787	)		(270,630	)
Contingent loan exposure		11,845,341		11,986,791		—		—		11,845,341		11,986,791		(51,454	)		(53,986	)		—			—			(51,454	)		(53,986	)

110

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(h) Residential mortgage loans and its provisions established by insolvent tranche of the loan on the value of the mortgage guarantee (PVG) and days of default respectively:

As of March 31, 2022

Loan Tranche /	Residential mortgage loans (MCh$)												Allowances established of Residential mortgage loans (MCh$)
Guarantee Value	Days in default at the end of the period												Days in default at the end of the period
(%)	0		1 to 29		30 to 59		60 to 89		>  = 90		Total		0			1 to 29			30 to 59			60 to 89			>  = 90			Total
PVG <=40%		1,306,784		13,291		5,541		2,280		6,787		1,334,683		(1,126	)		(212	)		(167	)		(94	)		(361	)		(1,960	)
40% < PVG <= 80%		7,638,784		110,060		34,744		17,622		48,016		7,849,226		(10,306	)		(2,337	)		(1,382	)		(844	)		(2,890	)		(17,759	)
80% < PVG <= 90%		686,169		6,780		1,704		983		9,782		705,418		(2,018	)		(301	)		(135	)		(127	)		(2,088	)		(4,669	)
PVG > 90%		556,681		2,234		737		931		5,034		565,617		(2,911	)		(103	)		(34	)		(83	)		(1,175	)		(4,306	)
Total		10,188,418		132,365		42,726		21,816		69,619		10,454,944		(16,361	)		(2,953	)		(1,718	)		(1,148	)		(6,514	)		(28,694	)

As of December 31, 2021

Loan Tranche /	Residential mortgage loans (MCh$)												Allowances established of Residential mortgage loans (MCh$)
Guarantee Value	Days in default at the end of the period												Days in default at the end of the period
(%)	0		1 to 29		30 to 59		60 to 89		>  = 90		Total		0			1 to 29			30 to 59			60 to 89			>  = 90			Total
PVG <=40%		1,253,226		12,079		4,214		2,274		6,063		1,277,856		(1,212	)		(233	)		(120	)		(76	)		(331	)		(1,972	)
40% < PVG <= 80%		7,413,470		93,651		29,636		15,132		47,030		7,598,919		(11,539	)		(2,237	)		(1,107	)		(704	)		(2,847	)		(18,434	)
80% < PVG <= 90%		712,433		5,415		1,363		1,446		10,884		731,541		(2,215	)		(267	)		(116	)		(149	)		(2,336	)		(5,083	)
PVG > 90%		728,402		1,895		474		243		7,322		738,336		(3,323	)		(93	)		(46	)		(27	)		(1,753	)		(5,242	)
Total		10,107,531		113,040		35,687		19,095		71,299		10,346,652		(18,289	)		(2,830	)		(1,389	)		(956	)		(7,267	)		(30,731	)

111

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(i) Loans and advances to Banks and Commercial loans and their allowances established by classification category:

Below is the concentration of loans and advances to banks and commercial loans and their provisions constituted by classification category:

	Individual																																																												Group												Provisions of deductible
	Normal Portfolio																					Substandard Portfolio															Non-Complying Portfolio																								Portfolio			Portfolio Non-									warranties Fogape
As of March 31,	A1			A2			A3			A4			A5			A6			Subtotal			B1			B2			B3			B4			Subtotal			C1			C2			C3			C4			C5			C6			Subtotal			Total			Normal			Complying			Total			Total			Covid 19
2022	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Loans and advances to Banks
Interbank loans for liquidity		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Interbank commercial loans		—			—			122,260			—			—			—			122,260			—			—			—			—			—			—			—			—			—			—			—			—			122,260			—			—			—			122,260			—
Current accounts overdrafts		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Chilean imports foreign trade loans		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Chilean exports foreign trade loans		615			49,420			17,283			—			—			—			67,318			—			—			—			—			—			—			—			—			—			—			—			—			67,318			—			—			—			67,318			—
Foreign trade loans between third countries		—			2,187			—			—			—			—			2,187			—			—			—			—			—			—			—			—			—			—			—			—			2,187			—			—			—			2,187			—
Non-transferable deposits in banks		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Other debts with banks		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Subtotal		615			51,607			139,543			—			—			—			191,765			—			—			—			—			—			—			—			—			—			—			—			—			191,765			—			—			—			191,765			—
Allowances established		—			43			305			—			—			—			348			—			—			—			—			—			—			—			—			—			—			—			—			348			—			—			—			348			—
% Allowances established		0.00	%		0.08	%		0.22	%		—			—			—			0.18	%		—			—			—			—			—			—			—			—			—			—			—			—			0.18	%		—			—			—			0.18	%		—
Commercial loans
Commercial loans		—			1,108,298			2,427,963			2,355,201			3,390,094			1,841,898			11,123,454			104,985			24,175			10,123			5,278			144,561			28,332			10,860			16,619			10,388			33,772			27,121			127,092			11,395,107			4,132,638			237,179			4,369,817			15,764,924			43,296
Chilean imports foreign trade loans		—			121,732			31,446			95,874			229,294			143,502			621,848			3,684			—			—			—			3,684			1,594			215			1,589			1,149			4,671			1,687			10,905			636,437			4,900			937			5,837			642,274			—
Chilean exports foreign trade loans		—			9,310			102,242			70,152			164,567			124,782			471,053			4,533			1,256			—			—			5,789			1,550			—			—			33			174			1,611			3,368			480,210			42,690			1,291			43,981			524,191			—
Foreign trade loans between third countries		—			—			—			—			2,896			105			3,001			—			—			—			—			—			—			—			—			—			—			—			—			3,001			—			—			—			3,001			—
Current account debtors		—			13,943			15,399			19,931			12,616			20,337			82,226			1,422			591			1,723			92			3,828			304			30			14			66			180			331			925			86,979			77,913			858			78,771			165,750			—
Credit card debtors		9			414			1,096			2,392			5,394			4,966			14,271			321			155			52			24			552			20			3			23			68			69			182			365			15,188			49,997			3,149			53,146			68,334			—
Factoring transactions		3,654			98,751			63,800			59,781			97,685			74,229			397,900			2,833			75			—			—			2,908			85			—			—			—			270			190			545			401,353			33,080			58			33,138			434,491			—
Commercial lease transactions		—			61,241			41,694			333,321			419,902			467,503			1,323,661			13,610			2,615			24,347			1,968			42,540			1,204			4,235			1,938			1,873			369			588			10,207			1,376,408			279,569			7,412			286,981			1,663,389			1,294
Student loans		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			55,987			2,411			58,398			58,398			—
Other loans and accounts receivable		—			283			1,025			937			1,783			1,536			5,564			55			32			57			84			228			431			2			94			15			1,342			8,305			10,189			15,981			7,291			1,426			8,717			24,698			—
Subtotal		3,663			1,413,972			2,684,665			2,937,589			4,324,231			2,678,858			14,042,978			131,443			28,899			36,302			7,446			204,090			33,520			15,345			20,277			13,592			40,847			40,015			163,596			14,410,664			4,684,065			254,721			4,938,786			19,349,450			—
Allowances established		1			926			4,690			24,792			49,689			67,471			147,569			2,504			1,037			412			1,757			5,710			672			1,534			5,069			5,437			26,551			36,014			75,277			228,556			61,170			77,033			138,203			366,759			44,590
% Allowances established		0.03	%		0.07	%		0.17	%		0.84	%		1.15	%		2.52	%		1.05	%		1.91	%		3.59	%		1.13	%		23.60	%		2.80	%		2.00	%		10.00	%		25.00	%		40.00	%		65.00	%		90.00	%		46.01	%		1.59	%		1.31	%		30.24	%		2.80	%		1.90	%

112

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(i) Loans and advances to Banks and Commercial loans and their allowances established by classification category, continued:

	Individual																																																												Group												Provisions of deductible
	Normal Portfolio																					Substandard Portfolio															Non-Complying Portfolio																								Portfolio			Portfolio Non-									warranties Fogape
As of December 31,	A1			A2			A3			A4			A5			A6			Subtotal			B1			B2			B3			B4			Subtotal			C1			C2			C3			C4			C5			C6			Subtotal			Total			Normal			Complying			Total			Total			Covid 19
2021	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Loans and advances to Banks
Interbank loans for liquidity		160,018			—			—			—			—			—			160,018			—			—			—			—			—			—			—			—			—			—			—			—			160,018			—			—			—			160,018			—
Interbank commercial loans		—			—			158,308			—			—			—			158,308			—			—			—			—			—			—			—			—			—			—			—			—			158,308			—			—			—			158,308			—
Current accounts overdrafts		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Chilean imports foreign trade loans		771			109,595			10,642			—			—			—			121,008			—			—			—			—			—			—			—			—			—			—			—			—			121,008			—			—			—			121,008			—
Chilean exports foreign trade loans		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Foreign trade loans between third countries		—			498			—			—			—			—			498			—			—			—			—			—			—			—			—			—			—			—			—			498			—			—			—			498			—
Non-transferable deposits in banks		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Other debts with banks		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Subtotal		160,789			110,093			168,950			—			—			—			439,832			—			—			—			—			—			—			—			—			—			—			—			—			439,832			—			—			—			439,832			—
Allowances established		58			91			370			—			—			—			519			—			—			—			—			—			—			—			—			—			—			—			—			519			—			—			—			519			—
% Allowances established		0.04	%		0.08	%		0.22	%		—			—			—			0.12	%		—			—			—			—			—			—			—			—			—			—			—			—			0.12	%		—			—			—			0.12	%		—
Commercial loans
Commercial loans		—			1,060,723			2,549,327			2,359,408			3,374,839			1,884,447			11,228,744			100,251			24,528			9,949			5,406			140,134			30,420			11,562			14,239			9,459			35,335			25,735			126,750			11,495,628			4,230,007			252,100			4,482,107			15,977,735			47,196
Chilean imports foreign trade loans		—			154,895			105,806			104,617			200,161			130,992			696,471			3,991			—			—			—			3,991			1,779			234			2,056			1,237			4,777			1,807			11,890			712,352			5,622			1,035			6,657			719,009			—
Chilean exports foreign trade loans		—			11,784			103,769			80,476			156,175			142,502			494,706			1,938			1,326			—			—			3,264			1,684			—			—			85			170			1,811			3,750			501,720			45,839			1,728			47,567			549,287			—
Foreign trade loans between third countries		—			—			—			—			2,903			47			2,950			—			—			—			—			—			—			—			—			—			—			—			—			2,950			—			—			—			2,950			—
Current account debtors		—			2,941			24,469			17,598			8,464			15,828			69,300			1,291			444			1,707			79			3,521			285			25			48			22			71			381			832			73,653			69,301			1,056			70,357			144,010			—
Credit card debtors		18			331			1,077			2,106			4,486			4,425			12,443			288			121			44			45			498			54			7			32			52			67			205			417			13,358			45,972			3,262			49,234			62,592			—
Factoring transactions		6,586			94,772			80,973			83,096			99,865			81,264			446,556			2,347			13			564			—			2,924			82			—			—			—			130			199			411			449,891			36,272			93			36,365			486,256			—
Commercial lease transactions		—			61,693			35,053			310,203			407,440			461,417			1,275,806			13,266			2,723			25,171			2,014			43,174			1,294			4,169			1,888			1,748			393			632			10,124			1,329,104			275,147			7,812			282,959			1,612,063			1,338
Student loans		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			55,346			2,602			57,948			57,948			—
Other loans and accounts receivable		—			346			1,248			972			1,620			1,383			5,569			37			18			80			24			159			405			1			21			11			324			8,026			8,788			14,516			6,808			1,582			8,390			22,906			—
Subtotal		6,604			1,387,485			2,901,722			2,958,476			4,255,953			2,722,305			14,232,545			123,409			29,173			37,515			7,568			197,665			36,003			15,998			18,284			12,614			41,267			38,796			162,962			14,593,172			4,770,314			271,270			5,041,584			19,634,756			—
Allowances established		2			1,025			4,929			26,264			47,212			69,272			148,704			2,712			1,057			611			1,741			6,121			719			1,600			4,571			5,046			26,824			34,917			73,677			228,502			52,512			87,340			139,852			368,354			48,534
% Allowances established		0.03	%		0.07	%		0.17	%		0.89	%		1.11	%		2.54	%		1.04	%		2.20	%		3.62	%		1.63	%		23.00	%		3.10	%		2.00	%		10.00	%		25.00	%		40.00	%		65.00	%		90.00	%		45.21	%		1.57	%		1.10	%		32.30	%		2.77	%		1.88	%

113

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(j) Loans and their provisions for loan losses by tranches of days past-due:

The concentration of credit risk by days past due is as follows;

	Financial assets before allowances													Allowances established
		Normal Portfolio				Substandard Portfolio		Non-Complying Portfolio						Normal Portfolio						Substandard Portfolio			Non-Complying Portfolio									Deductible
		Evaluation				Evaluation		Evaluation						Evaluation						Evaluation			Evaluation									Warranties						Net
		Individual		Group		Individual		Individual		Group		Total		Individual			Group			Individual			Individual			Group			Sub Total			FOGAPE Covid-19			Total			Financial Assets
As of March 31, 2022		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Loans and advances to Banks
0 days			137,421		—		—		—		—		137,421		(282	)		—			—			—			—			(282	)		—			(282	)		—
1 to 29 days			54,344		—		—		—		—		54,344		(66	)		—			—			—			—			(66	)		—			(66	)		—
30 to 59 days			—		—		—		—		—		—		—			—			—			—			—			—			—			—			—
60 to 89 days			—		—		—		—		—		—		—			—			—			—			—			—			—			—			—
>  = 90 days			—		—		—		—		—		—		—			—			—			—			—			—			—			—			—
Subtotal			191,765		—		—		—		—		191,765		(348	)		—			—			—			—			(348	)		—			(348	)		191,417
Commercial loans
0 days			13,930,280		4,568,177		202,390		72,000		80,464		18,853,311		(145,607	)		(54,823	)		(5,657	)		(31,641	)		(21,404	)		(259,132	)		(43,354	)		(302,486	)		—
1 to 29 days			94,765		85,274		790		18,300		22,856		221,985		(1,694	)		(4,077	)		(21	)		(4,552	)		(6,704	)		(17,048	)		(671	)		(17,719	)		—
30 to 59 days			17,515		24,587		910		6,529		17,152		66,693		(266	)		(1,661	)		(32	)		(2,737	)		(4,799	)		(9,495	)		(240	)		(9,735	)		—
60 to 89 days			418		6,027		—		2,935		11,864		21,244		(2	)		(609	)		—			(1,581	)		(2,798	)		(4,990	)		(71	)		(5,061	)		—
>  = 90 days			—		—		—		63,832		122,385		186,217		—			—			—			(34,766	)		(41,328	)		(76,094	)		(254	)		(76,348	)		—
Subtotal			14,042,978		4,684,065		204,090		163,596		254,721		19,349,450		(147,569	)		(61,170	)		(5,710	)		(75,277	)		(77,033	)		(366,759	)		(44,590	)		(411,349	)		18,938,101
Residential mortgage loans
0 days			—		10,076,682		—		—		111,736		10,188,418		—			(8,243	)		—			—			(8,118	)		(16,361	)		—			(16,361	)		—
1 to 29 days			—		103,794		—		—		28,571		132,365		—			(1,092	)		—			—			(1,861	)		(2,953	)		—			(2,953	)		—
30 to 59 days			—		22,484		—		—		20,242		42,726		—			(479	)		—			—			(1,239	)		(1,718	)		—			(1,718	)		—
60 to 89 days			—		6,541		—		—		15,276		21,817		—			(185	)		—			—			(963	)		(1,148	)		—			(1,148	)		—
>  = 90 days			—		—		—		—		69,618		69,618		—			—			—			—			(6,514	)		(6,514	)		—			(6,514	)		—
Subtotal			—		10,209,501		—		—		245,443		10,454,944		—			(9,999	)		—			—			(18,695	)		(28,694	)		—			(28,694	)		10,426,250
Consumer loans
0 days			—		4,073,683		—		—		81,818		4,155,501		—			(120,539	)		—			—			(52,738	)		(173,277	)		—			(173,277	)		—
1 to 29 days			—		108,068		—		—		20,153		128,221		—			(17,122	)		—			—			(13,119	)		(30,241	)		—			(30,241	)		—
30 to 59 days			—		35,422		—		—		24,127		59,549		—			(9,681	)		—			—			(16,531	)		(26,212	)		—			(26,212	)		—
60 a 89 days			—		12,957		—		—		13,548		26,505		—			(4,586	)		—			—			(8,787	)		(13,373	)		—			(13,373	)		—
>  = 90 days			—		—		—		—		44,406		44,406		—			—			—			—			(26,684	)		(26,684	)		—			(26,684	)		—
Subtotal			—		4,230,130		—		—		184,052		4,414,182		—			(151,928	)		—			—			(117,859	)		(269,787	)		—			(269,787	)		4,144,395
Total Loans			14,234,743		19,123,696		204,090		163,596		684,216		34,410,341		(147,917	)		(223,097	)		(5,710	)		(75,277	)		(213,587	)		(665,588	)		(44,590	)		(710,178	)		33,700,163

114

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(j) Loans and their provisions for loan losses by number of days past-due, continued:

	Financial assets before allowances												Allowances established
	Normal Portfolio				Substandard Portfolio		Non-Complying Portfolio						Normal Portfolio						Substandard Portfolio			Non-Complying Portfolio									Deductible
	Evaluation				Evaluation		Evaluation						Evaluation						Evaluation			Evaluation									Warranties						Net
	Individual		Group		Individual		Individual		Group		Total		Individual			Group			Individual			Individual			Group			Sub Total			FOGAPE Covid-19			Total			Financial Assets
As of December 31, 2021	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Loans and advances to Banks
0 days		323,525		—		—		—		—		323,525		(409	)		—			—			—			—			(409	)		—			(409	)		—
1 to 29 days		116,307		—		—		—		—		116,307		(110	)		—			—			—			—			(110	)		—			(110	)		—
30 to 59 days		—		—		—		—		—		—		—			—			—			—			—			—			—			—			—
60 to 89 days		—		—		—		—		—		—		—			—			—			—			—			—			—			—			—
>  = 90 days		—		—		—		—		—		—		—			—			—			—			—			—			—			—			—
Subtotal		439,832		—		—		—		—		439,832		(519	)		—			—			—			—			(519	)		—			(519	)		439,313
Commercial loans
0 days		14,119,750		4,685,181		185,345		55,345		108,631		19,154,252		(145,669	)		(46,334	)		(5,524	)		(20,058	)		(29,675	)		(247,260	)		(47,587	)		(294,847	)		—
1 to 29 days		106,131		64,441		9,710		7,540		21,049		208,871		(2,902	)		(3,377	)		(304	)		(3,693	)		(5,774	)		(16,050	)		(583	)		(16,633	)		—
30 to 59 days		6,609		15,521		1,806		27,924		17,009		68,869		(131	)		(1,833	)		(218	)		(15,256	)		(5,073	)		(22,511	)		(103	)		(22,614	)		—
60 to 89 days		55		5,171		804		5,073		8,598		19,701		(2	)		(968	)		(75	)		(1,147	)		(2,768	)		(4,960	)		(67	)		(5,027	)		—
>  = 90 days		—		—		—		67,080		115,983		183,063		—			—			—			(33,523	)		(44,050	)		(77,573	)		(194	)		(77,767	)		—
Subtotal		14,232,545		4,770,314		197,665		162,962		271,270		19,634,756		(148,704	)		(52,512	)		(6,121	)		(73,677	)		(87,340	)		(368,354	)		(48,534	)		(416,888	)		19,217,868
Residential mortgage loans
0 days		—		9,954,536		—		—		152,995		10,107,531		—			(8,022	)		—			—			(10,267	)		(18,289	)		—			(18,289	)		—
1 to 29 days		—		82,007		—		—		31,033		113,040		—			(941	)		—			—			(1,889	)		(2,830	)		—			(2,830	)		—
30 to 59 days		—		19,188		—		—		16,499		35,687		—			(384	)		—			—			(1,005	)		(1,389	)		—			(1,389	)		—
60 to 89 days		—		6,563		—		—		12,532		19,095		—			(166	)		—			—			(790	)		(956	)		—			(956	)		—
>  = 90 days		—		—		—		—		71,299		71,299		—			—			—			—			(7,267	)		(7,267	)		—			(7,267	)		—
Subtotal		—		10,062,294		—		—		284,358		10,346,652		—			(9,512	)		—			—			(21,219	)		(30,731	)		—			(30,731	)		10,315,921
Consumer loans
0 days		—		3,899,346		—		—		116,450		4,015,796		—			(116,186	)		—			—			(66,084	)		(182,270	)		—			(182,270	)		—
1 to 29 days		—		96,823		—		—		27,599		124,422		—			(15,670	)		—			—			(16,838	)		(32,508	)		—			(32,508	)		—
30 to 59 days		—		27,558		—		—		24,547		52,105		—			(7,646	)		—			—			(16,270	)		(23,916	)		—			(23,916	)		—
60 a 89 days		—		9,691		—		—		11,670		21,361		—			(3,132	)		—			—			(7,602	)		(10,734	)		—			(10,734	)		—
>  = 90 days		—		—		—		—		35,025		35,025		—			—			—			—			(21,202	)		(21,202	)		—			(21,202	)		—
Subtotal		—		4,033,418		—		—		215,291		4,248,709		—			(142,634	)		—			—			(127,996	)		(270,630	)		—			(270,630	)		3,978,079
Total Loans		14,672,377		18,866,026		197,665		162,962		770,919		34,669,949		(149,223	)		(204,658	)		(6,121	)		(73,677	)		(236,555	)		(670,234	)		(48,534	)		(718,768	)		33,951,181

115

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

13. Financial assets at amortized cost, continued:

(k) Finance lease contracts:

The cash flows to be received by the Bank from finance lease contracts have the following maturities:

	Total receivable				Unearned income						Net balance receivable (*)
	March		December		March			December			March		December
	2022		2021		2022			2021			2022		2021
	MCh$		MCh$		MCh$			MCh$			MCh$		MCh$
Within one year		535,622		525,720		(57,271	)		(53,312	)		478,351		472,408
From 1 to 2 years		398,347		385,118		(42,523	)		(38,653	)		355,824		346,465
From 2 to 3 years		267,674		260,002		(27,774	)		(25,228	)		239,900		234,774
From 3 to 4 years		174,358		166,416		(18,688	)		(17,015	)		155,670		149,401
From 4 to 5 years		122,478		116,650		(13,218	)		(12,038	)		109,260		104,612
After 5 years		350,174		327,071		(29,036	)		(25,624	)		321,138		301,447
Total		1,848,653		1,780,977		(188,510	)		(171,870	)		1,660,143		1,609,107

(*) The net balance receivable does not include past-due portfolio totaling Ch$3,766 million as of March 31, 2022 (Ch$3,466 million in December 2021).

The Bank maintains financial lease operations associated with real estate, industrial machinery, vehicles and transportation equipment. These leases contracts have an average term between 2 and 15 years.

(l) Purchase of loan portfolio:

During the period ended March 31, 2022 and the year ended 2021 no portfolio purchases were made.

(m) Sale or transfer of loans from the loan portfolio:

During the period, 2022 and 2021 there have not been operations of sale or transfer of the loan portfolio.

(n) Securitization of own assets:

During the period 2022 and the year 2021, there is no securitization transactions executed involving its own assets.

116

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

14. Investments in other companies:

(a) In the item “Investments in other companies” include investments of Ch$54,359 million as of March 31, 2022 (Ch$49,168 million as of December 31, 2021), as follows:

		% Ownership Interest				Equity				Assets
		March		December		March		December		March		December
		2022		2021		2022		2021		2022		2021
Company	Shareholder	%		%		MCh$		MCh$		MCh$		MCh$
Associates
Transbank S.A.	Banco de Chile		26.16		26.16		88,621		84,898		23,180		22,207
Administrador Financiero del Transantiago S.A.	Banco de Chile		20.00		20.00		19,446		19,158		4,029		3,947
Redbanc S.A.	Banco de Chile		38.13		38.13		10,107		9,935		3,916		3,842
Centro de Compensación Automatizado S.A.	Banco de Chile		33.33		33.33		11,236		10,728		3,852		3,663
Sociedad Interbancaria de Depósitos de Valores S.A.	Banco de Chile		26.81		26.81		6,447		6,317		1,823		1,788
Sociedad Imerc OTC S.A.	Banco de Chile		12.33		12.33		12,831		12,609		1,582		1,541
Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A.	Banco de Chile		15.00		15.00		6,691		6,638		1,041		1,025
Subtotal Associates							155,379		150,283		39,423		38,013
Joint Ventures
Servipag Ltda.	Banco de Chile		50.00		50.00		14,950		14,930		7,475		7,465
Artikos Chile S.A.	Banco de Chile		50.00		50.00		2,747		2,527		1,555		1,445
Subtotal Joint Ventures							17,697		17,457		9,030		8,910
Subtotal							173,076		167,740		48,453		46,923
Minority Investments
Bolsa de Comercio de Santiago S.A.  (*)	Banchile Corredores de Bolsa										5,420		5,282
Banco Latinoamericano de Comercio Exterior S.A. (Bladex)	Banco de Chile										309		309
Bolsa Electrónica de Chile S.A. (*)	Banchile Corredores de Bolsa										146		210
Sociedad de Telecomunicaciones Financieras  Interbancarias Mundiales (Swift)	Banco de Chile										23		25
CCLV Contraparte Central S.A.	Banchile Corredores de Bolsa										8		8
Subtotal Minority Investments											5,906		5,834
Total											54,359		52,757

(*) Investments valued at fair value, with effects on Other Comprehensive Income. See Note No. 28 “Equity”.

117

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

14. Investments in other companies, continued:

(b) Associates:

	March 2022
	Centro de Compensación Automatizado S.A.			Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A.			Sociedad Interbancaria de Depósitos de Valores S.A.			Redbanc S.A.			Transbank S.A.			Administrador Financiero del Transantiago S.A.			Sociedad Imerc OTC S.A.			Total
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Current assets		10,684			5,287			102			12,104			1,509,593			70,075			29,892			1,637,737
Non-current assets		2,532			2,264			6,699			16,504			118,620			687			7,984			155,290
Total Assets		13,216			7,551			6,801			28,608			1,628,213			70,762			37,876			1,793,027
Current liabilities		1,601			784			354			13,496			1,537,184			51,302			23,194			1,627,915
Non-current liabilities		379			76			—			5,005			2,408			14			1,843			9,725
Total Liabilities		1,980			860			354			18,501			1,539,592			51,316			25,037			1,637,640
Equity		11,236			6,691			6,447			10,107			88,621			19,446			12,831			155,379
Minority interest		—			—			—			—			—			—			8			8
Total Liabilities and Equity		13,216			7,551			6,801			28,608			1,628,213			70,762			37,876			1,793,027
Operating income		2,315			693			1			8,135			156,174			702			1,311			169,331
Operating expenses		(1,627	)		(642	)		(3	)		(7,800	)		(138,013	)		(360	)		(1,129	)		(149,574	)
Other expenses or income		(4	)		67			148			(118	)		(13,805	)		221			43			(13,448	)
Gain (loss) before tax		684			118			146			217			4,356			563			225			6,309
Income tax		(119	)		(7	)		—			(25	)		(632	)		(152	)		13			(922	)
Gain (loss) for the year		565			111			146			192			3,724			411			238			5,387

	December 2021
	Centro de Compensación Automatizado S.A.			Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A.			Sociedad Interbancaria de Depósitos de Valores S.A.			Redbanc S.A.			Transbank S.A.			Administrador Financiero del Transantiago S.A.			Sociedad Imerc OTC S.A.			Total
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Current assets		10,501			5,259			108			12,006			1,197,305			53,741			27,628			1,306,548
Non-current assets		2,746			2,310			6,567			16,404			120,282			696			8,013			157,018
Total Assets		13,247			7,569			6,675			28,410			1,317,587			54,437			35,641			1,463,566
Current liabilities		2,126			836			358			9,490			1,230,002			35,189			21,179			1,299,180
Non-current liabilities		393			95			—			8,985			2,687			90			1,844			14,094
Total Liabilities		2,519			931			358			18,475			1,232,689			35,279			23,023			1,313,274
Equity		10,728			6,638			6,317			9,935			84,898			19,158			12,609			150,283
Minority interest		—			—			—			—			—			—			9			9
Total Liabilities and Equity		13,247			7,569			6,675			28,410			1,317,587			54,437			35,641			1,463,566
Operating income		5,675			3,898			10			43,192			821,362			4,033			7,210			885,380
Operating expenses		(2,377	)		(3,653	)		(43	)		(41,066	)		(757,773	)		(2,182	)		(6,864	)		(813,958	)
Other expenses or income		87			134			1,208			(338	)		(83,001	)		296			(5	)		(81,619	)
Gain (loss) before tax		3,385			379			1,175			1,788			(19,412	)		2,147			341			(10,197	)
Income tax		(757	)		13			—			(375	)		6,973			(222	)		31			5,663
Gain (loss) for the year		2,628			392			1,175			1,413			(12,439	)		1,925			372			(4,534	)

118

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

14. Investments in other companies, continued:

(c) Joint Ventures:

The Bank owns a 50% interest in the companies Servipag Ltda. and Artikos Chile S.A., wich it controls jointly. The Bank’s interest in both entities is accounted for using the equity method in the Interim Consolidated Financial Statements.

The table below presents summarized financial information of the entities the Bank controls jointly:

	Artikos S.A.						Servipag Ltda.
	March			December			March			December
	2022			2021			2022			2021
	MCh$			MCh$			MCh$			MCh$
Current assets		2,302			2,067			95,660			65,128
Non-current assets		2,155			2,278			15,047			15,721
Total Assets		4,457			4,345			110,707			80,849
Current liabilities		1,060			1,167			90,981			61,079
Non-current liabilities		650			651			4,776			4,840
Total Liabilities		1,710			1,818			95,757			65,919
Equity		2,747			2,527			14,950			14,930
Total Liabilities and Equity		4,457			4,345			110,707			80,849
Operating income		897			3,977			6,571			39,309
Operating expenses		(607	)		(2,631	)		(6,576	)		(37,047	)
Other expenses or income		11			7			34			(231	)
Profit before tax		301			1,353			29			2,031
Income tax		(81	)		(142	)		(9	)		(369	)
Profit for the year		220			1,211			20			1,662

(d) The change of investments in companies registered under the equity method in the periods of 2022 and 2021, are as follows:

	March		March
	2022		2021
	MCh$		MCh$
Balance as of January 1,		46,923		42,338
Acquisition of investments in companies		—		—
Participation on income in companies with significant influence and joint control		1,522		(668	)
Dividends received		—		—
Others		8		(1	)
Total		48,453		41,669

(e) During the period ended as of March 31, 2022 and 2021 no impairment has incurred in these investments.

119

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

15. Intangible Assets:

(a) The composition of intangible assets as of March 31, 2022 and December 31, 2021, are as follows:

	Useful Life				Average remaining amortization				Gross balance				Accumulated Amortization						Net balance
	March		December		March		December		March		December		March			December			March		December
	2022		2021		2022		2021		2022		2021		2022			2021			2022		2021
	Years		Years		Years		Years		MCh$		MCh$		MCh$			MCh$			MCh$		MCh$
Other independently originated intangible assets		6		6		4		4		212,657		209,432		(139,992	)		(136,900	)		72,665		72,532
Total										212,657		209,432		(139,992	)		(136,900	)		72,665		72,532

120

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

15. Intangible Assets, continued:

(b) The change of intangible assets during the periods ended as of March 31, 2022 and December 31, 2021, are as follows:

	March			December
	2022			2021
	MCh$			MCh$
Gross Balance
Balance as of January 1,		209,432			180,669
Acquisition		6,140			30,222
Disposals/ write-downs		(2,896	)		(352	)
Reclassification		(19	)		(89	)
Impairment		—			(1,018	)
Total		212,657			209,432
Accumulated Amortization
Balance as of January 1,		(136,900	)		(119,968	)
Amortization for the period (*)		(4,829	)		(17,831	)
Disposals/ write-downs		1,718			352
Reclassification		19			(2	)
Impairment		—			549
Total		(139,992	)		(136,900	)
Balance Net		72,665			72,532

(*) See Note No. 39 Depreciation, amortization.

(c) As of March 31, 2022 and December 31, 2021, the Bank maintains the following amounts with technological developments:

Detail	Commitment Amount
	March		December
	2022		2021
	MCh$		MCh$
Software and licenses		5,510		7,097

121

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

16. Property and equipment:

(a) The properties and equipment as of March 31, 2022 and December 31, 2021 are composed as follows:

	Useful Life				Average remaining depreciation				Gross balance				Accumulated Depreciation						Net balance
	March		December		March		December		March		December		March			December			March		December
	2022		2021		2022		2021		2022		2021		2022			2021			2022		2021
	Years		Years		Years		Years		MCh$		MCh$		MCh$			MCh$			MCh$		MCh$
Type of property and equipment:
Land and Buildings		26		26		19		19		312,737		311,279		(150,954	)		(148,645	)		161,783		162,634
Equipment		5		5		3		3		239,383		243,757		(190,249	)		(191,334	)		49,134		52,423
Others		7		7		4		4		56,735		56,582		(49,892	)		(49,319	)		6,843		7,263
Total										608,855		611,618		(391,095	)		(389,298	)		217,760		222,320

122

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

16. Property and equipment, continued:

(b) The changes in properties and equipment as of March 31, 2022 and December 31, 2021, are as follows:

	March 2022
	Land and Buildings			Equipment			Others			Total
	MCh$			MCh$			MCh$			MCh$
Gross Balance
Balance as of January 1, 2022		311,279			243,757			56,582			611,618
Additions		1,460			1,350			256			3,066
Write-downs and sales of the period		(2	)		(5,760	)		(67	)		(5,829	)
Transfers		—			36			(36	)		—
Impairment (*)		—			—			—			—
Total		312,737			239,383			56,735			608,855
Accumulated Depreciation
Balance as of January 1, 2022		(148,645	)		(191,334	)		(49,319	)		(389,298	)
Depreciation charges of the period (*) (**)		(2,311	)		(4,639	)		(676	)		(7,626	)
Write-downs and sales of the period		2			5,760			67			5,829
Transfers		—			(36	)		36			—
Impairment (*)		—			—			—			—
Total		(150,954	)		(190,249	)		(49,892	)		(391,095	)
Balance as of  March 31, 2022		161,783			49,134			6,843			217,760

	December 2021
	Land and Buildings			Equipment			Others			Total
	MCh$			MCh$			MCh$			MCh$
Gross Balance
Balance as of January 1, 2021		304,951			222,624			55,898			583,473
Additions		9,477			22,367			2,349			34,193
Write-downs and sales of the year		(3,132	)		(1,232	)		(1,628	)		(5,992	)
Impairment (***)		(17	)		(2	)		(37	)		(56	)
Total		311,279			243,757			56,582			611,618
Accumulated Depreciation
Balance as of January 1, 2021		(142,543	)		(175,141	)		(47,861	)		(365,545	)
Reclassification		—			—			16			16
Depreciation charges of the year (**)		(8,895	)		(17,409	)		(3,107	)		(29,411	)
Write-downs and sales of the year		2,793			1,216			1,620			5,629
Impairment (***)		—			—			13			13
Total		(148,645	)		(191,334	)		(49,319	)		(389,298	)
Balance as of  December 31, 2021		162,634			52,423			7,263			222,320

(*) See Note No. 39 Depreciation, Amortization.

(**) This amount does not include the depreciation of the year of the Investment Properties, amount is included in “Other Assets” for Ch$89 million (Ch$357 millon in December 2021).

(***) As of December 31, 2021 does not include charge-offs of Property and Equipment of Ch$916 million.

123

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

17. Right-of-use assets and Lease liabilities:

(a) The composition of the rights over leased assets as of March 31, 2022 and December 31, 2021, is as follows:

	Gross Balance				Accumulated Depreciation						Net Balance
	March		December		March			December			March		December
	2022		2021		2022			2021			2022		2021
	MCh$		MCh$		MCh$			MCh$			MCh$		MCh$
Categories
Buildings		127,042		124,978		(51,012	)		(46,743	)		76,030		78,235
Floor space for ATMs		42,628		42,051		(28,215	)		(25,566	)		14,413		16,485
Improvements to leased properties		26,415		26,066		(20,812	)		(20,598	)		5,603		5,468
Total		196,085		193,095		(100,039	)		(92,907	)		96,046		100,188

(b) The changes of the rights over leased assets as of March 31, 2022 and December 31, 2021, is as follows:

	March 2022
	Buildings			Floor space for ATMs			Improvements to leased properties			Total
	MCh$			MCh$			MCh$			MCh$
Gross Balance
Balance as of January 1, 2022		124,978			42,051			26,066			193,095
Additions		3,337			648			349			4,334
Write-downs		(1,273	)		(71	)		—			(1,344	)
Total		127,042			42,628			26,415			196,085
Accumulated Depreciation
Balance as of January 1, 2022		(46,743	)		(25,566	)		(20,598	)		(92,907	)
Depreciation of the period (*)		(4,447	)		(2,720	)		(214	)		(7,381	)
Write-downs		178			71			—			249
Others		—			—			—			—
Total		(51,012	)		(28,215	)		(20,812	)		(100,039	)
Balance as of March 31, 2022		76,030			14,413			5,603			96,046

(*) See Note No. 39 Depreciation, Amortization and Impairment.

124

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

17. Right-of-use assets and Lease liabilities, continued:

	December 2021
	Buildings			Floor space for ATMs			Improvements to leased properties			Total
	MCh$			MCh$			MCh$			MCh$
Gross Balance
Balance as of January 1, 2021		123,215			40,445			26,579			190,239
Additions		12,123			2,867			1,386			16,376
Write-downs		(10,468	)		(1,055	)		(1,899	)		(13,422	)
Remeasurement		—			(206	)		—			(206	)
Others		108			—			—			108
Total		124,978			42,051			26,066			193,095
Accumulated Depreciation
Balance as of January 1, 2021		(33,560	)		(16,496	)		(21,354	)		(71,410	)
Depreciation of the year		(18,244	)		(10,095	)		(860	)		(29,199	)
Write-downs		5,064			1,025			1,616			7,705
Others		(3	)		—			—			(3	)
Total		(46,743	)		(25,566	)		(20,598	)		(92,907	)
Balance as of  December 31, 2021		78,235			16,485			5,468			100,188

(c) The future maturities (including unearned interest) of the lease liabilities as of March 31, 2022 and December 31, 2021:

	March 2022
	Demand		Up to 1 month		Over 1 month and up to 3 months		Over 3 months and up to 12 months		Over 1 year and up to 3 years		Over 3 years and up to 5 years		Over 5 years		Total
Lease associated to:	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Buildings		—		1,667		3,323		11,769		26,878		19,402		25,205		88,244
ATMs		—		983		1,965		8,293		3,772		211		112		15,336
Total		—		2,650		5,288		20,062		30,650		19,613		25,317		103,580

	December 2021
	Demand		Up to 1 month		Over 1 month and up to 3 months		Over 3 months and up to 12 months		Over 1 year and up to 3 years		Over 3 years and up to 5 years		Over 5 years		Total
Lease associated to:	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Buildings		—		1,785		3,555		13,516		28,025		21,530		27,733		96,144
ATMs		—		962		1,921		8,221		6,114		116		108		17,442
Total		—		2,747		5,476		21,737		34,139		21,646		27,841		113,586

125

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

17. Right-of-use assets and Lease liabilities, continued:

The Bank and its subsidiaries maintain contracts with certain renewal options and for which there is reasonable certainty that said option shall be carried out. In such cases, the lease period used to measure the liability and assets corresponds to an estimate of future renewals.

The changes of the obligations for lease liabilities and the flows for the periods 2022 and 2021 are as follows:

	Total cash flow for the period
	MCh$
Lease liability
Balances as of January 1, 2021		115,017
Liabilities for new lease agreements		4,838
Interest expenses		530
Payments of capital and interests		(7,401	)
Remeasurement		(179	)
Derecognized contracts		—
Others		1,254
Balances as of March 31, 2021		114,059
Liabilities for new lease agreements		3,445
Interest expenses		1,448
Payments of capital and interests		(23,184	)
Remeasurement		(27	)
Derecognized contracts		(5,524	)
Others		5,453
Balances as of December 31, 2021		95,670
Liabilities for new lease agreements		2,077
Interest expenses		457
Payments of capital and interests		(7,709	)
Remeasurement		—
Derecognized contracts		(1,092	)
Others		1,908
Balances as of March 31, 2022		91,311

(d) The future cash flows related to short-term lease agreements in effect as of March 31, 2022 correspond to Ch$4,525 million (Ch$5,569 million as of December 31, 2021).

126

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

18. Taxes:

(a) Current Taxes:

The Bank and its subsidiaries at the end of each period, have constituted a First Category Income Tax Provision, which was determined based on current tax regulations, and has been reflected in the Statement of Financial Position net of taxes to be recovered or payable, as applicable, as of March 31, 2022 and December 31, 2021 according to the following detail:

	March			December
	2022			2021
	MCh$			MCh$
Income tax		50,190			299,396
Tax Previous year		112,246			—
Less:
Monthly prepaid taxes		(56,450	)		(182,903	)
Credit for training expenses		—			(2,000	)
Others		(685	)		(2,210	)
Total		105,301			112,283
Tax rate		27	%		27	%

	March			December
	2022			2021
	MCh$			MCh$
Current tax assets		956			846
Current tax liabilities		(106,257	)		(113,129	)
Total tax receivable (payable), net		(105,301	)		(112,283	)

(b) Income Tax:

The effect of the tax expense during the periods between January 1 and March 31, 2022 and 2021, are broken down as follows:

	March			March
	2022			2021
	MCh$			MCh$
Income tax expense:
Current year tax		67,639			35,156
Tax Previous year		—			—
Subtotal		67,639			35,156
(Credit) Debit for deferred taxes:
Origin and reversal of temporary differences		(11,256	)		3,884
Subtotal		(11,256	)		3,884
Others		3,264			1,500
Net charge to income for income taxes		59,647			40,540

127

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

18. Taxes, continued:

(c) Reconciliation of effective tax rate:

The following is a reconciliation of the income tax rate to the effective rate applied to determine the Bank’s income tax expense as of March 31, 2022 and 2021:

	March 2022						March 2021
	Tax rate						Tax rate
	%			MCh$			%			MCh$
Income tax calculated on net income before tax		27.00			94,871			27.00			54,676
Additions or deductions		(0.05	)		(187	)		0.28			570
Price-level restatement		(10.81	)		(37,976	)		(8.09	)		(16,381	)
Others		0.84			2,939			0.83			1,675
Effective rate and income tax expense		16.98			59,647			20.02			40,540

The effective rate for income tax for the period 2022 is 16.98% (20.02% in March 2021).

128

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

18. Taxes, continued:

(d) Effect of deferred taxes on income and equity:

The Bank and its subsidiaries have recorded the effects of deferred taxes in their Interim Consolidated Financial Statements. The effects of deferred taxes on assets, liabilities and income accounts as of March 31, 2022:

			Effect on
	Balances as of December 31, 2021		Income			Equity			Balances as of March 31, 2022
	MCh$		MCh$			MCh$			MCh$
Debit Differences:
Allowances for loan losses		317,295		17,299			—			334,594
Personnel provisions		14,304		(5,804	)		—			8,500
Provision of undrawn credit lines		4,139		(558	)		—			3,581
Staff vacations provisions		9,993		46			—			10,039
Accrued interests adjustments from impaired loans		5,073		910			—			5,983
Staff severance indemnities provision		345		10			2			357
Provision of credit cards expenses		9,774		(1,060	)		—			8,714
Provision of accrued expenses		12,315		(1,766	)		—			10,549
Adjustment for valuation of financial assets at fair value through other comprehensive income		2,792		—			(482	)		2,310
Leasing		52,019		10,399			—			62,418
Incomes received in advance		12,368		(845	)		—			11,523
Other adjustments		36,871		(4,607	)		—			32,264
Total Debit Differences		477,288		14,024			(480	)		490,832
Credit Differences:
Depreciation and price-level restatement of property and equipment		16,446		(1,080	)		—			15,366
Transitory assets		6,958		3,004			—			9,962
Loans accrued to effective rate		2,437		(42	)		—			2,395
Prepaid expenses		5,668		(819	)		—			4,849
Other adjustments		11,502		1,705			20			13,227
Total Credit Differences		43,011		2,768			20			45,799
Total, Net		434,277		11,256			(500	)		445,033

129

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

18. Taxes, continued:

(d) Effect of deferred taxes on income and equity, continued:

The effects of deferred taxes on assets, liabilities and income accounts as of al March 31, 2021 and December 31, 2021:

			Effect on								Effect on
	Balance as of December 31, 2020		Income			Equity			Balances as of March 31, 2021		Income			Equity			Balances as of December 31, 2021
	MCh$		MCh$			MCh$			MCh$		MCh$			MCh$			MCh$
Debit differences:
Allowances for loan losses		268,482		3,402			—			271,884		45,411			—			317,295
Personnel provisions		16,233		(8,227	)		—			8,006		6,298			—			14,304
Staff vacations provisions		9,164		41			—			9,205		788			—			9,993
Accrued interest adjustments from impaired loans		4,570		383			—			4,953		120			—			5,073
Staff severance indemnities provision		537		2,484			(62	)		2,959		(2,551	)		(63	)		345
Provisions of credit card expenses		7,959		507			—			8,466		1,308			—			9,774
Provisions of accrued expenses		14,083		(633	)		—			13,450		(1,135	)		—			12,315
Adjustment for valuation of financial assets at fair value through other comprehensive income		—		—			—			—		—			2,792			2,792
Leasing		28,835		8,654			—			37,489		14,530			—			52,019
Incomes received in advance		16,088		(941	)		—			15,147		(2,779	)		—			12,368
Other adjustments		27,738		743			—			28,481		16,476			(3,947	)		41,010
Total Debit Differences		393,689		6,413			(62	)		400,040		78,466			(1,218	)		477,288
Credit differences:
Depreciation of property and equipment and investment properties		17,256		227			—			17,483		(1,037	)		—			16,446
Adjustment for valuation of financial assets at fair value through other comprehensive income		1,056		—			332			1,388		—			(1,388	)		—
Transitory assets		5,378		2,420			—			7,798		(840	)		—			6,958
Loans accrued to effective rate		2,779		(126	)		—			2,653		(216	)		—			2,437
Prepaid expenses		2,234		6,273			—			8,507		(2,839	)		—			5,668
Other adjustments		8,380		1,503			10			9,893		1,988			(379	)		11,502
Total Credit Differences		37,083		10,297			342			47,722		(2,944	)		(1,767	)		43,011
Total, Net		356,606		(3,884	)		(404	)		352,318		81,410			549			434,277

130

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

18. Taxes, continued:

(e) For the purpose of complying with the Circular No. 47 issued by the Chilean Internal Revenue Service (SII) and No. 3,478 issued by the CMF, dated August 18, 2009 the changes and effects generated by the application of Article 31, No. 4 of the Income Tax Law are detailed below.

As the circular requires, the information corresponds only to the Bank’s credit operations and does not consider operations of subsidiary entities that are consolidated in these Interim Consolidated Financial Statements.

					Tax value assets
(e.1) Loans and advance to banks and Loans to customers as of March 31, 2022	Book value assets (*)		Tax value assets		Past-due loans with guarantees		Past-due loans without guarantees		Total Past-due loans
	MCh$		MCh$		MCh$		MCh$		MCh$
Loans and advance to banks		2,991,417		2,991,417		—		—		—
Commercial loans		16,840,219		17,699,239		27,047		61,762		88,809
Consumer loans		4,143,875		5,248,446		542		13,229		13,771
Residential mortgage loans		10,426,250		10,454,962		8,407		455		8,862
Total		34,401,761		36,394,064		35,996		75,446		111,442

					Tax value assets
(e.1) Loans and advance to banks and Loans to customers as of December 31, 2021	Book value assets (*)		Tax value assets		Past-due loans with guarantees		Past-due loans without guarantees		Total Past-due loans
	MCh$		MCh$		MCh$		MCh$		MCh$
Loans and advance to banks		1,529,313		1,529,831		—		—		—
Commercial loans		17,262,707		18,124,405		33,450		63,603		97,053
Consumer loans		3,977,569		5,098,856		503		10,156		10,659
Residential mortgage loans		10,315,921		10,345,098		8,878		363		9,241
Total		33,085,510		35,098,190		42,831		74,122		116,953

(*) In accordance with the mentioned Circular and instructions from the SII, the value of financial statement assets, are presented on an individual basis (only Banco de Chile) net of allowance for loan losses and do not include lease and factoring operations.

131

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

18. Taxes, continued:

(e.2) Provisions on past-due loans	Balance as of January 1, 2022		Charge-offs against provisions			Provisions established		Provisions released			Balance as of March 31, 2022
	MCh$		MCh$			MCh$		MCh$			MCh$
Commercial loans		63,603		(9,938	)		48,548		(40,451	)		61,762
Consumer loans		10,156		(27,762	)		33,060		(2,225	)		13,229
Residential mortgage loans		363		(1,341	)		9,943		(8,510	)		455
Total		74,122		(39,041	)		91,551		(51,186	)		75,446

(e.2) Provisions on past-due loans	Balance as of January 1, 2021		Charge-offs against provisions			Provisions established		Provisions released			Balance as of December 31, 2021
	MCh$		MCh$			MCh$		MCh$			MCh$
Commercial loans		72,440		(59,081	)		215,638		(165,394	)		63,603
Consumer loans		12,626		(144,810	)		150,834		(8,494	)		10,156
Residential mortgage loans		122		(4,870	)		34,589		(29,478	)		363
Total		85,188		(208,761	)		401,061		(203,366	)		74,122

	March		December
	2022		2021
(e.3) Charge-offs and recoveries	MCh$		MCh$
Charge-offs Art. 31 No. 4 second subparagraph		4,527		26,712
Write-offs resulting in provisions released		17		1,738
Recovery or renegotiation of written-off loans		13,641		66,227

	March		December
	2022		2021
(e.4) Application of Art. 31 No. 4 first & third subsections of the income tax law	MCh$		MCh$
Charge-offs in accordance with first subsection		—		—
Write-offs in accordance with third subsection		17		1,738

132

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

19. Other Assets:

At the end of each period, the item is composed as follows:

	March			December
	2022			2021
	MCh$			MCh$
Debtors from brokerage of financial instruments		215,974			172,769
Cash collateral provided for derivative financial transactions		162,243			293,378
Accounts receivable from third parties		130,917			117,130
Assets to be leased out as lessor (*)		64,457			94,462
Prepaid expenses		54,418			45,731
Investment properties		12,388			12,477
Income from regular activities from contracts with customers		13,188			11,132
VAT receivable		11,511			12,703
Pending transactions		3,193			2,292
Other provided cash collateral		1,949			1,921
Accounts receivable from bank subsidiaries by services rendered		6			6
Accumulated impairment in respect of other assets receivable		(2,270	)		(2,050	)
Other Assets		29,692			33,510
Total		697,666			795,461

(*) Correspond to fixed assets to be delivered under the financial lease modality.

133

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

20. Non-current assets and disposal groups held for sale and Liabilities included in disposal groups for sale:

(a) At the end of each period, the item is composed as follows:

	March			December
	2022			2021
	MCh$			MCh$
Assets received in lieu of payment or awarded at judicial sale (*)
Assets awarded at judicial sale		13,010			11,629
Assets received in lieu of payment		303			954
Provision for assets received in lieu of payment or awarded		(30	)		(79	)
Non-current assets for sale
Investments in other companies (**)		3,961			3,961
Assets for recovery of assets transferred in financial leasing operations		2,417			2,954
Disposal groups held for sale		—			—
Total		19,661			19,419

(*) Assets received in lieu of payment are assets received as payment of customers’ past-due debts. The assets acquired must not exceed the aggregate 20% of the Bank’s effective equity. These assets currently represent 0.0053% (0.0169% as of December 31, 2021) of the Bank’s effective equity.

(**) Corresponds to the participation in Sociedad Operadora de Tarjetas de Crédito Nexus S.A., which has been reclassified as a non-current asset.

(b) The changes of the provision for assets received in lieu of payment during the periods 2022 and 2021 are as follows:

Provision for assets received in lieu of payment	MCh$
Balance as of January 1, 2021		52
Provisions used		(18	)
Provisions established		6
Provisions released		—
Balance as of March 31, 2021		40
Provisions used		(120	)
Provisions established		159
Provisions released		—
Balance as of December 31, 2021		79
Provisions used		(65	)
Provisions established		16
Provisions released		—
Balance as of March 31, 2022		30

134

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

21. Financial liabilities held for trading at fair value through profit or loss:

a) Notionals financial derivative contracts: The notional amounts of contracts with fair value assets and liabilities are disclosed in Note No. 8 letter (a).

b) Financial derivative contracts:

	March		December
	2022		2021
	MCh$		MCh$
Currency forward		379,681		505,179
Interest rate swap		1,025,759		831,338
Interest rate swap and cross currency swap		1,112,138		1,432,801
Call currency options		1,514		2,726
Put currency options		1,767		459
Total		2,520,859		2,772,503

c) Other instruments or financial liabilities:

	March		December
	2022		2021
	MCh$		MCh$
Current accounts and other demand deposits		—		—
Savings accounts and other time deposits		—		—
Debt instruments issued		—		—
Others		1,725		9,610
Total		1,725		9,610

135

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

22. Financial liabilities at amortized cost:

(a) Current accounts and other demand deposits:

At the end of each period, the composition of current accounts and other demand deposits is as follows:

	March		December
	2022		2021
	MCh$		MCh$
Current accounts		13,677,760		15,349,225
Other demand obligations		1,454,813		1,259,367
Demand deposits accounts		830,987		952,621
Other demand deposits		529,914		688,668
Total		16,493,474		18,249,881

(b) Saving accounts and time deposits:

At the end of each period, the composition of saving accounts and time deposits is as follows:

	March		December
	2022		2021
	MCh$		MCh$
Time deposits		9,321,668		8,319,166
Term savings accounts		448,263		448,257
Other term balances payable		31,564		36,290
Total		9,801,495		8,803,713

136

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

22. Financial liabilities at amortized cost, continued:

(c) Obligations by repurchase agreements and securities lending:

The Bank obtains financing by selling financial instruments and agreeing to repurchase them in the future, plus interest at a prefixed rate. As of March 31, 2022 and December 31, 2021, the repurchase agreements are the following:

	Demand				Up to 1 month				Over 1 month and up to 3 months				Over 3 months and up to 12 months				Over 1 year and up to 3 years				Over 3 years and up to 5 years				Over 5 years				Total
	March		December		March		December		March		December		March		December		March		December		March		December		March		December		March		December
	2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Instruments issued by the Chilean Governments and Central Bank of Chile
Central Bank bonds		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Central Bank promissory notes		—		—		16,994		—		—		—		—		—		—		—		—		—		—		—		16,994		—
Other instruments issued by the Chilean Government and Central Bank of Chile		—		—		21,771		351		—		—		—		—		—		—		—		—		—		—		21,771		351
Subtotal		—		—		38,765		351		—		—		—		—		—		—		—		—		—		—		38,765		351
Other Financial Instruments issued in Chile
Deposit promissory notes from domestic banks		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Mortgage bonds from domestic banks		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Bonds from domestic banks		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Deposits in domestic banks		—		—		60,414		84,996		41		—		48		52		—		—		—		—		—		—		60,503		85,048
Bonds from other Chilean companies		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Other instruments issued in Chile		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		60,414		84,996		41		—		48		52		—		—		—		—		—		—		60,503		85,048
Financial Instruments issued by Foreign Institutions
Instruments from foreign governments or central bank		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Other instruments issued by foreing		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Total		—		—		99,179		85,347		41		—		48		52		—		—		—		—		—		—		99,268		85,399

Securities sold:

The fair value of the financial instruments delivered as collateral by the Bank and its subsidiaries, in sales transactions with repurchase agreement and securities lending as of March 31, 2022 amounts to Ch$99,315 million (Ch$85,322 million in December 2021). In the event that the Bank and its subsidiaries enter into default or bankruptcy, the counterparty is authorized to sell or deliver these investments as collateral.

137

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

22. Financial liabilities at amortized cost, continued:

(d) Borrowings from Financial Institutions:

At the end of each period, borrowings from financial institutions are detailed as follows:

	March		December
	2022		2021
	MCh$		MCh$
Domestic banks
Banco Santander		1,087		—
Subtotal domestic banks		1,087		—
Foreign banks
Foreign banks
Wells Fargo Bank		55,008		145,070
Citibank N.A. United State		49,577		70,590
Bank of America		34,257		43,925
Standard Chartered Bank		3,615		4,990
Commerzbank AG		2,294		1,782
Industrial and Commercial Bank of China		586		—
Bank of Tokyo		88		412
Sumitomo Mitsui Banking		—		42,641
Bank of New York Mellon		—		17,055
Others		40		—
Borrowings and other obligations
Wells Fargo Bank		133,840		133,692
Citibank N.A. United Kingdom		20,174		48,120
Commerzbank AG		8,400		568
Bank of America		518		—
Citibank N.A. United State		—		4,173
Standard Chartered Bank		—		211
Others		53		176
Subtotal foreign banks		308,450		513,405
Chilean Central Bank (*)		4,348,400		4,348,460
Total		4,657,937		4,861,865

(*) Financing provided by the Chilean Central Bank to deliver liquidity to the economy and support the flow of credit to households and companies, among which are the Conditional Credit Facility to Increase Placements (FCIC by its Spanish initials) and the Liquidity Credit Line (LCL).

138

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

22. Financial liabilities at amortized cost, continued:

(e) Debt financial instruments issued:

At the end of each period, the composition of debt financial instruments issued as follows:

	March		December
	2022		2021
	MCh$		MCh$
Letters of credit
Letters of credit for housing		3,398		4,005
Letters of credit for general purposes		90		109
Bonds
Current Bonds		8,428,273		8,557,281
Mortgage bonds		—		—
Total		8,431,761		8,561,395

During the period ended March 31, 2022 Banco de Chile has placed bonds for Ch$247,298 million, which corresponds to Long-Term Bonds, according to the following details:

Long-Term Bonds

Serie	Currency		Amount MCh$		Terms Years		Annual interest rate %		Issued date	Maturity date
BCHIBS0815		UF		15,706		14		3.00	05/01/2022	05/01/2036
BCHIBS0815		UF		15,719		14		3.06	20/01/2022	20/01/2036
BCHICF0815		UF		65,738		17		2.65	01/03/2022	01/03/2039
BCHICP0815		UF		65,882		19		2.80	01/03/2022	01/03/2041
BCHIBS0815		UF		32,583		14		2.60	17/03/2022	17/03/2036
Subtotal UF				195,628
BONO PEN		PEN		51,670		20		8.65	09/03/2022	09/03/2042
Subtotal others currency				51,670
Total as of March 31, 2022				247,298

Short-term Current Bonds

During the period ended March 31, 2022, there were no short-term current bonds, issued.

139

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

22. Financial liabilities at amortized cost, continued:

(e) Debt financial instruments issued, continued:

During the year 2021, Banco de Chile has placed bonds for Ch$1,032,016 million, which corresponds to Short-Term Bonds and Current Bonds for amount of Ch$698,435 million and Ch$962,581 million respectively, according to the following details:

Short-term Bonds

Counterparty	Currency	Amount MCh$		Annual interest rate %		Issued date	Maturity date
Wells Fargo Bank	USD		72,240		0.23	20/01/2021	20/04/2021
Wells Fargo Bank	USD		36,736		0.38	09/02/2021	04/02/2022
Citibank N.A.	USD		36,736		0.28	09/02/2021	02/08/2021
Wells Fargo Bank	USD		35,700		0.26	25/02/2021	24/08/2021
Citibank N.A.	USD		71,400		0.23	25/02/2021	01/06/2021
Wells Fargo Bank	USD		35,700		0.26	25/02/2021	26/08/2021
Citibank N.A.	USD		36,295		0.34	04/03/2021	03/09/2021
Citibank N.A.	USD		72,589		0.34	04/03/2021	07/09/2021
Wells Fargo Bank	USD		18,147		0.25	04/03/2021	01/06/2021
Wells Fargo Bank	USD		78,814		0.25	08/09/2021	01/06/2022
Citibank N.A.	USD		78,873		0.23	10/09/2021	10/03/2022
Wells Fargo Bank	USD		39,436		0.25	10/09/2021	08/06/2022
Citibank N.A.	USD		78,413		0.23	13/09/2021	17/03/2022
Wells Fargo Bank	USD		4,283		0.28	15/09/2021	14/09/2022
Citibank N.A.	USD		3,073		0.28	22/09/2021	16/09/2022
Total as of December 31, 2021			698,435

Long-Term Current Bonds

Serie	Currency	Amount MCh$		Terms Years		Annual issue rate %		Issue date	Maturity date
BCHIER1117	UF		109,889		6		3.68	22/10/2021	22/10/2027
BCHICD0815	UF		58,658		9		3.59	25/10/2021	25/10/2030
BCHIEU0917	UF		109,363		7		3.70	25/10/2021	25/10/2028
Subtotal UF			277,910
BONO JPY	JPY		36,097		10		0.70	17/08/2021	17/08/2031
BONO AUD	AUD		31,203		10		Rate BBSW+1.38	12/08/2021	12/08/2031
BONO CHF	CHF		115,483		5		0.32	14/10/2021	14/10/2026
BONO USD	USD		82,543		5		2.22	17/11/2021	17/11/2026
BONO USD	USD		419,345		10		2.99	07/12/2021	07/12/2031
Subtotal Others currency			684,671
Total as of December 31, 2021			962,581

As of March 31, 2022 and December 31, 2021, the Bank has not presented defaults in the payment of principal and interest on its debt instruments. Likewise, there have been no breaches of covenants and other commitments associated with the debt instruments issued.

140

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

22. Financial liabilities at amortized cost, continued:

(f) Other Financial Obligations:

At the end of each period, the composition of other financial obligations as follows:

	March		December
	2022		2021
	MCh$		MCh$
Other Chilean financial obligations		201,378		249,782
Other financial obligations with the Public sector		185		223
Total		201,563		250,005

23. Financial instruments of regulatory capital issued:

a) At the end of each period, this item is composed as follows:

	March		December
	2022		2021
	MCh$		MCh$
Subordinated bonds with transitory recognition	—		—
Subordinated bonds		939,099		917,510
Bonds with no fixed term of maturity		—		—
Preferred stock		—		—
Total		939,099		917,510

b) Issuances of Subordinated Bonds for the period:

During the period ended December 31, 2021 and March 31, 2022, there were no subordinated bonds, issued.

141

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

23. Financial instruments of regulatory capital issued, continued:

c) Changes for subordinated bonds:

	Subordinated bonds
	MCh$
Balance as of January 1, 2021		886,407
Emissions made		—
Accrued interest		29,577
Interest and UF indexation payments to the holder		(39,895	)
Principal payments to the holder		(16,277	)
Accrued UF indexation		57,698
Balance as of December 31, 2021		917,510
Balance as of January 1, 2022		917,510
Emissions made		—
Accrued interest		7,417
Interest and UF indexation payments to the holder		(4,358	)
Principal payments to the holder		(3,176	)
Accrued UF indexation		21,706
Balance as of March 31, 2022		939,099

142

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

23. Financial instruments of regulatory capital issued, continued:

d) Below is the detail of the subordinated bonds due as of March 31, 2022 and December 31, 2021:

March 2022
Serie	Currency	Issuance currency amount		Interest rate %		Registration date	Maturity date	Balance due MCh$
C1	UF		300,000		7.5	06/12/1999	01/01/2030		5,171
C1	UF		200,000		7.4	06/12/1999	01/01/2030		3,453
C1	UF		530,000		7.1	06/12/1999	01/01/2030		9,238
C1	UF		300,000		7.1	06/12/1999	01/01/2030		5,232
C1	UF		50,000		6.5	06/12/1999	01/01/2030		889
C1	UF		450,000		6.6	06/12/1999	01/01/2030		7,998
A7	UF		40,000		6.9	16/07/1999	01/08/2022		59
A7	UF		50,000		6.9	16/07/1999	01/08/2022		74
A7	UF		200,000		6.9	16/07/1999	01/08/2022		295
A7	UF		50,000		6.9	16/07/1999	01/08/2022		74
A7	UF		50,000		6.9	16/07/1999	01/08/2022		74
A7	UF		160,000		6.9	16/07/1999	01/08/2022		236
A7	UF		450,000		6.9	16/07/1999	01/08/2022		664
D2	UF		1,600,000		4.3	20/06/2002	01/04/2023		7,564
D2	UF		400,000		4.3	20/06/2002	01/04/2023		1,891
D1	UF		2,000,000		3.6	20/06/2002	01/04/2026		24,512
F	UF		1,000,000		5.0	28/11/2008	01/11/2033		30,943
F	UF		1,500,000		5.0	28/11/2008	01/11/2033		46,415
F	UF		759,000		4.5	28/11/2008	01/11/2033		24,513
F	UF		241,000		4.5	28/11/2008	01/11/2033		7,784
F	UF		4,130,000		4.2	28/11/2008	01/11/2033		136,321
F	UF		1,000,000		4.3	28/11/2008	01/11/2033		33,004
F	UF		70,000		4.2	28/11/2008	01/11/2033		2,318
F	UF		4,000,000		3.9	28/11/2008	01/11/2033		136,708
F	UF		2,300,000		3.8	28/11/2008	01/11/2033		78,957
G	UF		600,000		4.0	29/11/2011	01/11/2036		18,849
G	UF		50,000		4.0	29/11/2011	01/11/2036		1,571
G	UF		80,000		3.9	29/11/2011	01/11/2036		2,532
G	UF		450,000		3.9	29/11/2011	01/11/2036		14,259
G	UF		160,000		3.9	29/11/2011	01/11/2036		5,070
G	UF		1,000,000		2.7	29/11/2011	01/11/2036		36,263
G	UF		300,000		2.7	29/11/2011	01/11/2036		10,879
G	UF		1,360,000		2.6	29/11/2011	01/11/2036		49,480
J	UF		1,400,000		1.0	29/11/2011	01/11/2042		67,409
J	UF		1,500,000		1.0	29/11/2011	01/11/2042		72,330
J	UF		1,100,000		1.0	29/11/2011	01/11/2042		53,456
I	UF		900,000		1.0	29/11/2011	01/11/2040		42,614
					Total subordinated bonds due				939,099

143

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

23. Financial instruments of regulatory capital issued, continued:

December 2021
Serie	Currency	Issuance currency amount		Interest rate %		Registration date	Maturity date	Balance due MCh$
C1	UF		300,000		7.5	06/12/1999	01/01/2030		5,377
C1	UF		200,000		7.4	06/12/1999	01/01/2030		3,591
C1	UF		530,000		7.1	06/12/1999	01/01/2030		9,605
C1	UF		300,000		7.1	06/12/1999	01/01/2030		5,441
C1	UF		50,000		6.5	06/12/1999	01/01/2030		924
C1	UF		450,000		6.6	06/12/1999	01/01/2030		8,313
C2	UF		250,000		7.5	06/12/1999	01/01/2022		390
C2	UF		350,000		6.6	06/12/1999	01/01/2022		546
C2	UF		1,000,000		6.5	06/12/1999	01/01/2022		1,561
A7	UF		40,000		6.9	16/07/1999	01/08/2022		115
A7	UF		50,000		6.9	16/07/1999	01/08/2022		144
A7	UF		200,000		6.9	16/07/1999	01/08/2022		577
A7	UF		50,000		6.9	16/07/1999	01/08/2022		144
A7	UF		50,000		6.9	16/07/1999	01/08/2022		144
A7	UF		160,000		6.9	16/07/1999	01/08/2022		461
A7	UF		450,000		6.9	16/07/1999	01/08/2022		1,297
C2	UF		60,000		6.7	06/12/1999	01/01/2022		94
C2	UF		280,000		6.7	06/12/1999	01/01/2022		437
C2	UF		170,000		6.7	06/12/1999	01/01/2022		265
C2	UF		110,000		6.6	06/12/1999	01/01/2022		172
C2	UF		30,000		6.7	06/12/1999	01/01/2022		47
D2	UF		1,600,000		4.3	20/06/2002	01/04/2023		7,311
D2	UF		400,000		4.3	20/06/2002	01/04/2023		1,828
D1	UF		2,000,000		3.6	20/06/2002	01/04/2026		23,734
F	UF		1,000,000		5.0	28/11/2008	01/11/2033		29,865
F	UF		1,500,000		5.0	28/11/2008	01/11/2033		44,797
F	UF		759,000		4.5	28/11/2008	01/11/2033		23,686
F	UF		241,000		4.5	28/11/2008	01/11/2033		7,521
F	UF		4,130,000		4.2	28/11/2008	01/11/2033		131,800
F	UF		1,000,000		4.3	28/11/2008	01/11/2033		31,910
F	UF		70,000		4.2	28/11/2008	01/11/2033		2,242
F	UF		4,000,000		3.9	28/11/2008	01/11/2033		132,309
F	UF		2,300,000		3.8	28/11/2008	01/11/2033		76,415
G	UF		600,000		4.0	29/11/2011	01/11/2036		18,235
G	UF		50,000		4.0	29/11/2011	01/11/2036		1,520
G	UF		80,000		3.9	29/11/2011	01/11/2036		2,450
G	UF		450,000		3.9	29/11/2011	01/11/2036		13,797
G	UF		160,000		3.9	29/11/2011	01/11/2036		4,905
G	UF		1,000,000		2.7	29/11/2011	01/11/2036		35,193
G	UF		300,000		2.7	29/11/2011	01/11/2036		10,558
G	UF		1,360,000		2.6	29/11/2011	01/11/2036		48,023
J	UF		1,400,000		1.0	29/11/2011	01/11/2042		65,675
J	UF		1,500,000		1.0	29/11/2011	01/11/2042		70,473
J	UF		1,100,000		1.0	29/11/2011	01/11/2042		52,089
I	UF		900,000		1.0	29/11/2011	01/11/2040		41,529
					Total subordinated bonds due				917,510

144

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

24. Provisions for contingencies:

(a) At the end of each period, this item is composed as follows:

	March		December
	2022		2021
	MCh$		MCh$
Provisions for employee benefit obligations		79,835		106,964
Provisions for obligations of customer loyalty and merit programs		32,011		35,937
Provisions for operational risk		1,103		693
Provisions of a bank branch abroad for profit remittances to its parent company		—		—
Provisions for reestructuring plans		—		—
Provisions for lawsuits and litigation		—		—
Other provisions for contingencies		264		264
Total		113,213		143,858

145

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

24. Provisions for contingencies, continued;

(b) The following table shows the changes in provisions during the period 2022 and 2021:

	Provisions for employee benefit obligations			Provisions of a bank branch abroad for profit remittances to its parent company		Provisions for reestructuring plans		Provisions for lawsuits and litigation			Provisions for obligations of customer loyalty and merit programs			Provisions for operational risk		Other provisions for contingencies		Total
	MCh$			MCh$		MCh$		MCh$			MCh$			MCh$		MCh$		MCh$
Balances as of January 1, 2021		111,243			—		—		244			30,187			—		264		141,938
Provisions established		17,664			—		—		—			906			—		—		18,570
Provisions used		(45,442	)		—		—		—			—			—		—		(45,442	)
Provisions released		—			—		—		(67	)		—			—		—		(67	)
Balances as of March 31, 2021		83,465			—		—		177			31,093			—		264		114,999
Provisions established		90,513			—		—		—			4,844			693		—		96,050
Provisions used		(67,014	)		—		—		—			—			—		—		(67,014	)
Provisions released		—			—		—		(177	)		—			—		—		(177	)
Balances as of December 31, 2021		106,964			—		—		—			35,937			693		264		143,858
Provisions established		29,466			—		—		—			—			410		—		29,876
Provisions used		(56,595	)		—		—		—			—			—		—		(56,595	)
Provisions released		—			—		—		—			(3,926	)		—		—		(3,926	)
Balances as of March 31, 2022		79,835			—		—		—			32,011			1,103		264		113,213

146

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

24. Provisions for contingencies, continued;

(c) Provisions for employee benefit obligations:

	March		December
	2022		2021
	MCh$		MCh$
Provision of short-term employee benefits		73,323		100,518
Provision of benefits to employees for contract termination		6,512		6,446
Provisión of benefits to post-employment employees		—		—
Provision of long-term employee benefits		—		—
Provision of share-based employee benefits		—		—
Provisión for obligations for defined contribution post-employment plans		—		—
Provisión for obligations for post-employment defined benefit plans		—		—
Provision for other employee obligations		—		—
Total		79,835		106,964

(d) Provision of short-term employee benefits:

(i) Compliance bonuses provision:

	March			March
	2022			2021
	MCh$			MCh$
Balances as of January 1		53,070			43,941
Net provisions established		15,344			13,206
Provisions used		(46,465	)		(34,283	)
Total		21,949			22,864

(ii) Vacation provision:

	March			March
	2022			2021
	MCh$			MCh$
Balances as of January 1		37,010			33,993
Net provisions established		2,359			2,760
Provisions used		(2,188	)		(2,606	)
Total		37,181			34,147

147

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

24. Provisions for contingencies, continued;

(d) Provision of short-term employee benefits, continued:

(iii) Provision of other benefits to personnel:

	March			March
	2022			2021
	MCh$			MCh$
Balances as of January 1		10,438			25,728
Net provisions established		11,498			13,739
Provisions used		(7,743	)		(29,119	)
Total		14,193			10,348

(e) Provision of benefits to employees for contract termination:

(i) Changes of the provision for employee benefits due to the termination of the employment contract:

	March			March
	2022			2021
	MCh$			MCh$
Present value of the obligations at the beginning of the period		6,446			7,581
Increase in provision		257			54
Benefit paid		(199	)		(232	)
Effect of change in actuarial factors		8			(229	)
Total		6,512			7,174

148

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

24. Provisions for contingencies, continued;

(e) Provision of benefits to employees for contract termination, continued:

(ii) Net benefits expenses:

	March			March
	2022			2021
	MCh$			MCh$
Increase (decrease) in provisions		(148	)		(204	)
Interest cost of benefits obligations		405			258
Effect of change in actuarial factors		8			(229	)
Net benefit expenses		265			(175	)

(iii) Factors used in the calculation of the provision:

The main assumptions used in the determination of severance indemnity obligations for the Bank's plan are shown below:

	March 31, 2022		December 31, 2021
	%		%
Discount rate		6.49		5.70
Salary increase rate		4.80		3.94
Payment probability		99.99		99.99

The most recent actuarial valuation of the staff severance indemnities provision was carried out during the first quarter of 2022.

(f) Employee benefits share-based provision:

As of December 31, 2021 and March 31, 2022, the Bank and its subsidiaries do not have a stock-based compensation plan.

149

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

25. Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued:

The changes at the end of each period are as follows:

	Provisions for dividends			Provisions for payment of interest on bonds with no fixed maturity date		Provision for revaluation of bonds without a fixed term of maturity		Total
	MCh$			MCh$		MCh$		MCh$
Balances as of January 1, 2021		220,271			—		—		220,271
Provisions established		70,297			—		—		70,297
Provisions used		(220,271	)		—		—		(220,271	)
Provisions released		—			—		—		—
Balances as of March 31, 2021		70,297			—		—		70,297
Provisions used		253,600			—		—		253,600
Provisions released		—			—		—		—
Provisions used		—			—		—		—
Balances as of December 31, 2021		323,897			—		—		323,897
Provisions used		116,359			—		—		116,359
Provisions released		(323,897	)		—		—		(323,897	)
Provisions used		—			—		—		—
Balances as of March 31, 2022		116,359			—		—		116,359

150

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

26. Special provisions for credit risk:

a) At the end of each period, this item is composed as follows:

	March		December
	2022		2021
	MCh$		MCh$
Additional loan provisions		610,252		540,252
Provisions for credit risk for contingent loans (*)		51,454		53,986
Provisions for country risk for transactions with debtors with residence abroad		7,883		7,336
Special provisions for loans abroad		—		—
Provisions for adjustments to the minimum provision required for normal portfolio with individual evaluation		—		—
Provisions constituted by credit risk as a result of additional prudential requirements		—		—
Total		669,589		601,574

(*) The changes of provisions for credit risk for contingent loans is disclosed in Note No. 13 letter f).

b) The changes of provisions for special credit risk is as follows:

	Additional loan provisions		Provisions for credit risk for contingent loans			Provisions for country risk for transactions with debtors with residence abroad			Total
	MCh$		MCh$			MCh$			MCh$
Balances as of January 1, 2021		320.252		76.191			5.447			401.890
Provisions established		40,000		—			2,121			42,121
Provisions used		—		—			—			—
Provisions released		—		(3,336	)		—			(3,336	)
Foreign exchange adjustments		—		103			—			103
Balances as of March 31, 2021		360,252		72,958			7,568			440,778
Provisions established		180,000		—			—			180,000
Provisions used		—		—			—			—
Provisions released		—		(6,289	)		(232	)		(6,521	)
Foreign exchange adjustments		—		(12,683	)		—			(12,683	)
Balances as of December 31, 2021		540,252		53,986			7,336			601,574
Provisions established		70,000		—			547			70,547
Provisions used		—		—			—			—
Provisions released		—		(763	)		—			(763	)
Foreign exchange adjustments		—		(1,769	)		—			(1,769	)
Balances as of March 31, 2022		610,252		51,454			7,883			669,589

151

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

27. Other Liabilities:

At the end of each period, this item is composed as follows:

	March		December
	2022		2021
	MCh$		MCh$
Accounts payable to third parties		349,101		328,126
Creditors for intermediation of financial instruments		203,969		174,485
Obligations for mortgage loans granted to be remit to other banks and/or real estate companies		181,909		285,325
Cash guarantees received for derivative financial transactions		144,968		336,292
Liability for income from usual activities from contracts with customers		60,060		63,517
Securities to be settled		55,391		54,715
VAT debit		16,931		18,144
Agreed dividends payable		8,004		5,140
Outstanding transactions		1,341		4,789
Other cash guarantees received		533		535
Other liabilities		37,499		33,051
Total		1,059,706		1,304,119

152

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

28. Equity:

(a) Capital:

(i) Authorized, subscribed and paid shares:

As of March 31, 2022, the paid-in capital of Banco de Chile is represented by 101,017,081,114 registered shares (101,017,081,114 shares as of December 31, 2021), with no par value, subscribed and fully paid.

	As of March 31, 2022
Corporate Name or Shareholders’s name	Number of Shares		% of Equity Holding
LQ Inversiones Financieras S.A.		46,815,289,329		46.344	%
Banchile Corredores de Bolsa S.A.		5,486,129,079		5.431	%
Banco Santander on behalf foreign investors		5,050,212,545		4.999	%
Inversiones LQ-SM Limitada		4,854,988,014		4.806	%
Banco de Chile on behalf of non-resident third parties		3,957,653,465		3.918	%
Banco de Chile on behalf State Street		3,786,210,319		3.748	%
Ever Chile SPA		2,201,574,554		2.179	%
Ever 1 BAE SPA		2,104,584,950		2.083	%
Banco de Chile on behalf  Citibank New York		2,102,028,161		2.081	%
Inversiones Aspen Ltda.		1,594,040,870		1.578	%
Inversiones Avenida Borgoño SPA		1,190,565,316		1.179	%
J P Morgan Chase Bank		1,093,061,708		1.082	%
Larraín Vial S.A. Corredora de Bolsa		1,050,679,883		1.040	%
Valores Security S.A. Corredores de Bolsa		579,750,046		0.574	%
BCI Corredores de Bolsa S.A.		565,194,784		0.560	%
Santander S.A. Corredores de Bolsa Limitada		543,665,385		0.538	%
A.F.P Habitat S.A. for A Fund		498,995,448		0.494	%
Inversiones CDP SPA		487,744,912		0.483	%
BICE Inversiones  Corredores de Bolsa S.A.		432,785,791		0.428	%
A.F.P Cuprum S.A. for A Fund		361,874,025		0.358	%
Subtotal		84,757,028,584		83.904	%
Others shareholders		16,260,052,530		16.096	%
Total		101,017,081,114		100.000	%

153

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

28. Equity, continued:

(a) Capital, continued:

(i) Authorized, subscribed and paid shares, continued:

	As of December 31, 2021
Corporate Name or Shareholders’s name	Number of Shares		% of Equity Holding
LQ Inversiones Financieras S.A.		46,815,289,329		46.344	%
Banchile Corredores de Bolsa S.A.		5,745,082,033		5.687	%
Inversiones LQ-SM Limitada		4,854,988,014		4.806	%
Banco Santander on behalf foreign investors		4,562,248,706		4.516	%
Banco de Chile on behalf State Street		3,654,038,675		3.617	%
Banco de Chile on behalf of non-resident third parties		3,528,713,024		3.493	%
Ever Chile SPA		2,201,574,554		2.179	%
Ever 1 BAE SPA		2,104,584,950		2.083	%
Banco de Chile on behalf  Citibank New York		2,053,637,155		2.033	%
Inversiones Aspen Ltda.		1,594,040,870		1.578	%
Inversiones Avenida Borgoño SPA		1,190,565,316		1.179	%
Larraín Vial S.A. Corredora de Bolsa		1,085,751,023		1.075	%
J P Morgan Chase Bank		1,063,239,108		1.053	%
A.F.P Habitat S.A. for A Fund		611,001,048		0.605	%
Santander S.A. Corredores de Bolsa Limitada		586,905,632		0.581	%
BCI Corredores de Bolsa S.A.		540,263,012		0.535	%
Inversiones CDP SPA		487,744,912		0.483	%
Valores Security S.A. Corredores de Bolsa		473,695,265		0.469	%
BICE Inversiones  Corredores de Bolsa S.A.		462,020,571		0.457	%
A.F.P Cuprum S.A. for A Fund		457,880,375		0.453	%
Subtotal		84,073,263,572		83.227	%
Others shareholders		16,943,817,542		16.773	%
Total		101,017,081,114		100.000	%

154

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

28. Equity, continued:

(a) Capital, continued:

(ii) Shares:

The following table shows the changes in share from December 31, 2021 to March 31, 2022:

	Total
	Acciones Ordinarias
Total shares as of December 31, 2021		101,017,081,114
Total shares as of March 31, 2022		101,017,081,114

(b) Approval and payment of dividends:

At the Bank Ordinary Shareholders’ Meeting held on March 17, 2022 it was approved the distribution and payment of dividend No. 210 of Ch$5.34393608948 per share of the Banco de Chile, with charge to the net distributable income for the year 2021. The dividends paid in the in the period 2022 amounted to $539,828 million.

At the Bank Ordinary Shareholders’ Meeting held on March 25, 2021 it was approved the distribution and payment of dividend No. 209 of Ch$2.18053623438 per share of the Banco de Chile, with charge to the net distributable income for the year 2020. The dividends paid in the year 2021 amounted to Ch$220,271 million.

(c) Provision for minimum dividends:

The Board of Directors of Banco de Chile agreed for the purposes of minimum dividends, to establish a provision of 60% of the net income resulting from reducing or adding to the net income for the corresponding period, the value effect of the monetary unit of paid capital and reserves, as a result of any change in the Consumer Price Index (CPI) between the month prior to the current month and the month of November of the previous year. The amount to be reduced of the liquid income for the period ended as of March 31, 2022 amounted to Ch$97,795 million.

As indicated, as of March 31, 2022, the amount of the net income determined in accordance with the preceding paragraph is equivalent to Ch$193,932 million (Ch$539,828 million as of December 31, 2021). Consequently, the Bank recorded a provision for minimum dividends under “Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued” as of March 31, for an amount of Ch$116,359 million (Ch$323,897 million in December 2021), which reflects as a counterpart an equity reduction for the same amount in the item "Retained earnings".

155

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

28. Equity, continued:

(d) Earnings per share:

(i) Basic earnings per share:

Basic earnings per share are determined by dividing the net income attributable to the Bank ordinary equity holders in a period between the weighted average number of shares outstanding during that period, excluding the average number of own shares held throughout the period.

(ii) Diluted earnings per share:

In order to calculate the diluted earnings per share, both the amount of income attributable to common shareholders and the weighted average number of shares outstanding, net of own shares, must be adjusted for all the inherent dilutive effects to the potential common shares (stock options, warrants and convertible debt).

Accordingly, the basic and diluted earnings per share as of March 31, 2022 and 2021 were determined as follows:

	March		March
	2022		2021
Basic earnings per share:
Net profits attributable to ordinary equity holders of the bank (in million Chilean pesos)		291,727		161,964
Weighted average number of ordinary shares		101,017,081,114		101,017,081,114
Earning per shares (in Chilean pesos)		2.89		1.60
Diluted earnings per share:
Net profits attributable to ordinary equity holders of the bank (in million Chilean pesos)		291,727		161,964
Weighted average number of ordinary shares		101,017,081,114		101,017,081,114
Assumed conversion of convertible debt		—		—
Adjusted number of shares		101,017,081,114		101,017,081,114
Diluted earnings per share (in Chilean pesos)		2.89		1.60

As of March 31, 2022 and 2021, the Bank does not have instruments that generate dilutive effects.

156

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

28. Equity, continued:

(e) Other comprehensive income:

Below is the composition and changes of accumulated other comprehensive income as of March 31, 2022 and 2021:

	Elements that will not be reclassified in profit or loss										Elements that can be reclassified in profit or loss
	New measurements of net defined benefit liability and actuarial results for other employee benefit plans			Fair value changes of equity instruments designated as at fair value through other comprehensive income		Income tax			Subtotal		Fair value changes of financial assets at fair value through other comprehensive income			Cash flow accounting hedge			Participation in other comprehensive income of entities registered under the equity method			Income tax			Subtotal			Total
	MCh$			MCh$		MCh$			MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Balances as of December 31, 2020 before re-expression as of January 1, 2021		—			—		—			—		801			(70,682	)		—			18,631			(51,250	)		(51,250	)
Effects of changes in accounting policies		(753	)		4,958		(1,134	)		3,071		3,106			—			(23	)		(833	)		2,250			5,321
Opening balances as of January 1, 2021		(753	)		4,958		(1,134	)		3,071		3,907			(70,682	)		(23	)		17,798			(49,000	)		(45,929	)
Other comprehensive income for the period		229			36		(72	)		193		1,232			1,539			(2	)		(748	)		2,021			2,214
Balances as of March 31, 2021		(524	)		4,994		(1,206	)		3,264		5,139			(69,143	)		(25	)		17,050			(46,979	)		(43,715	)
Balances as of December 31, 2021 before re-expression as of January 1, 2022		—			—		—			—		(109,129	)		111,694			—			(26,492	)		(23,927	)		(23,927	)
Effects of changes in accounting policies		(208	)		3,589		(913	)		2,468		61,321			—			(20	)		(1,103	)		60,198			62,666
Opening balances as of January 1, 2022		(208	)		3,589		(913	)		2,468		(47,808	)		111,694			(20	)		(27,595	)		36,271			38,739
Other comprehensive income for the period		(8	)		75		(18	)		49		(5,436	)		(64,626	)		(7	)		16,967			(53,102	)		(53,053	)
Balances as of March 31, 2022		(216	)		3,664		(931	)		2,517		(53,244	)		47,068			(27	)		(10,628	)		(16,831	)		(14,314	)

157

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

28. Equity, continued:

(f) Retained earnings from previous years:

During the year 2022, the Ordinary Shareholders Meeting of Banco de Chile agreed to deduct and withhold from the year 2021 liquid income, an amount equivalent to the value effect of the monetary unit of paid capital and reserves according to the variation in the Consumer Price Index, which occurred between November 2020 and November 2021, amounting to Ch$253,094 million.

29. Contingencies and Commitments:

(a) Commitments and responsibilities accounted for in off-balance-sheet accounts:

In order to satisfy its customers’ needs, the Bank entered into several irrevocable commitments and contingent obligations. Although these obligations are not recognized in the Statement of Financial Position, they entail credit risks and, therefore, form part of the Bank’s overall risk.

The Bank and its subsidiaries keep recorded in off-balance sheet accounts the main balances related to commitments or with responsibilities inherent to the course of its normal business:

	Contingent loans
	March		December
	2022		2021
	MCh$		MCh$
Guarantees and sureties
Guarantees and sureties in chilean currency		—		—
Guarantees and sureties in foreing currency		424,299		439,669
Letters of credit for goods circulation operations		529,754		450,024
Debt purchase commitments in local currency abroad		—		—
Transactions related to contingent events
Transactions related to contingent events in chilean currency		1,926,781		1,952,980
Transactions related to contingent events in foreing currency		329,938		413,974
Undrawn credit lines with immediate termination
Balance of lines of credit and agreed overdraft in current account – commercial loans		1,366,739		1,483,884
Balance of lines of credit on credit card – commercial loans		255,224		261,642
Balance of lines of credit and agreed overdraft in current account – consumer loans		1,397,152		1,350,157
Balance of lines of credit on credit card – consumer loans		5,537,099		5,555,510
Balance of lines of credit and agreed overdraft in current account – due from banks loans		—		—
Undrawn credit lines
Balance of lines of credit and agreed overdraft in current account – commercial loans		—		—
Balance of lines of credit on credit card – commercial loans		—		—
Balance of lines of credit and agreed overdraft in current account – consumer loans		—		—
Balance of lines of credit on credit card – consumer loans		—		—
Balance of lines of credit and agreed overdraft in current account – due from banks loans		—		—
Other commitments		—		—
Credits for higher studies Law No. 20,027 (CAE)		—		—
Other irrevocable credit commitments		78,355		78,951
Other credit commitments		—		—
Total		11,845,341		11,986,791

158

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

29. Contingencies and Commitments, continued:

(b) Lawsuits and legal proceedings:

(b.1) Normal judicial contingencies in the industry:

At the date of issuance of these Interim Consolidated Financial Statements, there are legal actions filed against the Bank related with the ordinary course operations. As of March 31, 2022, the Bank maintain provisions for judicial contingencies amounting to Ch$597 million (Ch$474 million as of December 2021), which are part of the item “Provisions for contingencies” in the Statement of Financial Position.

The estimated end dates of the respective legal contingencies are as follows:

	As of March 31, 2022
	2022		2023		2024		2025		2026		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Legal contingencies		28		296		273		—		—		597

(b.2) Contingencies for significant lawsuits in courts:

As of March 31, 2022 and December 31, 2021, there are not significant lawsuits in court that affect or may affect these Interim Consolidated Financial Statements.

159

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

29. Contingencies and Commitments, continued:

(c) Guarantees granted by operations:

i. In subsidiary Banchile Administradora General de Fondos S.A.:

In compliance with Article No, 12 of Law No. 20,712, Banchile Administradora General de Fondos S.A., has designated Banco de Chile as the representative of the beneficiaries of the guarantees it has established, and in such role the Bank has issued bank guarantees totaling UF 4,143,500 maturing January 6, 2023 (UF 4,149,200, maturing on January 7, 2022). The subsidiary took a policy with Mapfre Seguros Generales S.A. for the Real State Funds by a guaranteed amount of UF 928,300.

As of March 31, 2022 and December 31, 2021, the Bank has not guaranteed mutual funds.

ii. In subsidiary Banchile Corredores de Bolsa S.A.:

For the purposes of ensuring correct and complete compliance with all of its obligations as broker-dealer entity, in conformity with the provisions from Article 30 and subsequent of Law No. 18,045 on Securities Markets, the subsidiary established a guarantee in an insurance policy for UF 20.000, insured by Mapfre Seguros Generales S.A., that matures April 22, 2022, whereby the Securities Exchange of the Santiago Stock Exchange was appointed as the subsidiary’s creditor representative.

160

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

29. Contingencies and Commitments, continued:

(c) Guarantees granted by operations, continued:

	March		December
	2022		2021
Guarantees:	MCh$		MCh$
Shares delivered to guarantee forward sales transactions covered simultaneously:
Santiago Securities Exchange, Stock Exchange		2,353		38,279
Electronic Chilean Securities Exchange, Stock Exchange		9,995		12,839
Fixed income securities to guarantee CCLV system:
Santiago Securities Exchange, Stock Exchange		9,990		9,990
Fixed Income securities to guarantee equity short sale and Hedging Loan:
Santiago Securities Exchange, Stock Exchange		—		2,344
Shares delivered to guarantee equity lending and short-selling:
Santiago Securities Exchange, Stock Exchange		3,819		—
Cash guarantees received for operations with derivatives		—		1,723
Equity securities received for operations with derivatives
Electronic Chilean Securities Exchange, Stock Exchange		362		342
Depósito Central de Valores S.A.		1,516		1,726
Financial intermediation securities received for operations with derivatives
Internal custody		219		—
Total		28,254		67,243

In conformity with the internal regulation of the stock exchange in which this subsidiary participates, and for the purpose of securing the broker’s correct performance, the Company established a pledge over 1,000,000 shares of the Santiago Stock Exchange, in favor of that institution, as stated in the Public Deed dated September 13, 1990 before the notary of Santiago Mr. Raul Perry Pefaur, and over 100,000 shares of the Electronic Chilean Stock Exchange, in favor of that Institution, as stated in a contract signed between both entities dated May 16, 1990.

Banchile Corredores de Bolsa S.A. keeps an insurance policy current with Chubb Seguros Chile S.A. that expires May 2, 2022, this considers matters of employee fidelity, physical losses, falsification or adulteration, and currency fraud with a coverage amount equivalent to US$20,000,000.

It also provided a bank guarantee in the amount of UF 309,200 for the benefits of investors in portfolio management contracts. This bank guarantee is revaluated in UF to fixed term, non-endorsable and has a maturity date of January 6, 2023.

It also provided a cash guarantee in the amount of US$122,494.32 for the purpose of complying with the obligations to Pershing, for any operations conducted through that broker.

161

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

29. Contingencies and Commitments, continued:

(c) Guarantees granted by operations, continued:

A guarantee corresponding to Ch$5,000,000 has been constituted, to guarantee the seriousness of the offer presented in the ADC bidding process. Beneficiary: Empresa de Ferrocarriles del Estado Rut. 61,216,000-7, valid until July 4, 2022.

iii. In subsidiary Banchile Corredores de Seguros Ltda.:

According to established in article 58, letter D of D.F.L. 251, as of March 31, 2022 the entity maintains two insurance policies with effect from April 15, 2021 to April 14, 2022 which protect it against of potential damages caused by infractions of the law, regulations and complementary rules that regulate insurance brokers, especially when the non-compliance comes from acts, errors or omissions of the broker, its representatives, agents or dependents that participate in the intermediation.

The policies contracted are:

Matter insured	Amount Insured (UF)
Errors and omissions liability policy		500
Civil liability policy		60.000

(d) Exempt Resolution No. 270 dated October 30, 2014, the Superintendency of Securities and Insurance (current Commission for the Financial Market) imposed a fine of UF 50,000 to Banchile Corredores de Bolsa S.A. for violations of the second paragraph of article 53 of the Securities Market Law, said company filed a claim with the competent Civil Court requesting the annulment of the fine. On December 10, 2019, a judgement in the case was issued reducing the fine to the amount of UF 7,500. The judgment indicated has been subject to cassation appeals filed by both parties, which are pending before the Illustrious Court of Appeals of Santiago.

The company has not made provisions considering that the Bank’s legal advisors in charge of the procedure estimate that there are solid grounds that the claim filed by Banchile Corredores de Bolsa S.A. can be accepted.

162

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

30. Interest Revenue and Expenses:

(a) At the end of the period, the summary of interest is as follows:

	March			March
	2022			2021
	MCh$			MCh$
Interest revenue		449,518			321,170
Interest expenses		(143,303	)		(58,789	)
Total net interest income		306,215			262,381

(b) The composition of interest revenue is as follows:

	March			March
	2022			2021
	MCh$			MCh$
Financial assets at amortized cost
Rights by resale agreements and securities lending		707			258
Debt financial instruments		3,273			—
Loans and advances to Banks		26,262			3,044
Commercial loans		200,392			146,981
Residential mortgage loans		74,427			68,370
Consumer Loans		127,794			107,496
Other financial instruments		98			—
Financial assets at fair value through other comprehensive income
Debt financial instruments		23,030			2,583
Other financial instruments		228			245
Income of accounting hedges of interest rate risk		(6,693	)		(7,807	)
Total		449,518			321,170

(b.1) At the end of the period, the stock of interest not recognized in income is as follows:

	March		March
	2022		2021
	MCh$		MCh$
Commercial loans		12,607		13,044
Residential mortgage loans		2,042		1,986
Consumer Loans		1,215		25
Total		15,864		15,055

163

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

30. Interest Revenue and Expenses, continued:

(b.2) The amount of interest recognized on a received basis for impaired portfolio in the period 2022 amounts to:

	March			March
	2022			2021
	MCh$			MCh$
Commercial loans		128			241
Residential mortgage loans		228			186
Consumer Loans		(10	)		88
Total		346			515

(c) The composition of interest expenses is as follows:

	March			March
	2022			2021
	MCh$			MCh$
Financial liabilities at amortized cost
Current accounts and other demand deposits		892			85
Saving accounts and time deposits		86,455			9,994
Obligations by repurchase agreements and securities lending		1,415			59
Borrowings from financial institutions		6,162			4,885
Debt financial instruments issued		48,316			43,111
Other financial obligations		—			—
Lease liabilities		457			530
Financial instruments of regulatory capital issued		7,417			7,214
Income of accounting hedges of interest rate risk		(7,811	)		(7,089	)
Total		143,303			58,789

(d) As of March 31, 2022 and 2021, the Bank uses cross currency and interest rate swaps to hedge its position on changes on the fair value of corporate bonds and commercial loans and cross currency swaps to hedge the risk of variability of obligations flows with foreign banks and bonds issued in foreign currency.

	March 2022									March 2021
	Income			Expense			Total			Income			Expense			Total
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Gain from fair value accounting hedges		—			—			—			3,481			—			3,481
Loss from fair value accounting hedges		(29	)		—			(29	)		(2,719	)		—			(2,719	)
Gain from cash flow accounting hedges		4,508			9,883			14,391			481			8,800			9,281
Loss from cash flow accounting hedges		(11,201	)		(2,072	)		(13,273	)		(5,976	)		(1,711	)		(7,687	)
Net gain on hedge items		29			—			29			(3,074	)		—			(3,074	)
Total		(6,693	)		7,811			1,118			(7,807	)		7,089			(718	)

164

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

31. UF indexation revenue and expesenses:

(a) At the end of the period, the summary of reajustes is as follows:

	March			March
	2022			2021
	MCh$			MCh$
UF indexation revenue		386,218			162,960
UF indexation expenses		(199,064	)		(94,098	)
Total net income from UF indexation		187,154			68,862

(b) The composition of UF indexation revenue is as follows

	March			March
	2022			2021
	MCh$			MCh$
Financial assets at amortized cost
Rights by resale agreements and securities lending		—			—
Debt financial instruments		12,222			—
Loans and advances to Banks		—			—
Commercial loans		151,548			68,755
Residential mortgage loans		241,286			104,532
Consumer Loans		1,375			804
Other financial instruments		1,063			359
Financial assets at fair value through other comprehensive income		—			—
Debt financial instruments		11,505			2,097
Other financial instruments		—			—
Income of accounting hedges of UF, IVP, IPC indexation risk		(32,781	)		(13,587	)
Total		386,218			162,960

(b.1) At the end of the period, the stock of UF indexation not recognized in results is as follows:

	March		March
	2022		2021
	MCh$		MCh$
Commercial loans		2,927		1,592
Residential mortgage loans		3,322		1,684
Consumer Loans		40		—
Total		6,289		3,276

165

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

31. UF indexation revenue and expesenses, continued:

(b.2) The amount of indexation recognized on the basis received by the impaired portfolio in the period 2022 amounted to:

	March		March
	2022		2021
	MCh$		MCh$
Commercial loans		253		72
Residential mortgage loans		565		121
Consumer Loans		1		—
Total		819		193

(c) The composition of UF indexation expenses is as follows:

	March		March
	2022		2021
	MCh$		MCh$
Financial liabilities at amortized cost
Current accounts and other demand deposits		7,682		4,834
Saving accounts and time deposits		24,587		10,432
Obligations by repurchase agreements and securities lending		—		—
Borrowings from financial institutions		—		—
Debt financial instruments issued		145,089		68,972
Other financial obligations		—		—
Financial instruments of regulatory capital issued		21,706		9,860
Income of accounting hedges of UF, IVP, IPC indexation risk		—		—
Total		199,064		94,098

(d) As of March 31, 2022 and 2021, the Bank uses cross currency and interest rate swaps to hedge its position on Changes on the fair value of corporate bonds and commercial loans and cross currency swaps to hedge the risk of variability of obligations flows with foreign banks and bonds issued in foreign currency

	March 2022								March 2021
	Income			Expense		Total			Income			Expense		Total
	MCh$			MCh$		MCh$			MCh$			MCh$		MCh$
Gain from fair value accounting hedges		—			—		—			—			—		—
Loss from fair value accounting hedges		—			—		—			—			—		—
Gain from cash flow accounting hedges		—			—		—			—			—		—
Loss from cash flow accounting hedges		(32,781	)		—		(32,781	)		(13,587	)		—		(13,587	)
Net gain on hedge items		—			—		—			—			—		—
Total		(32,781	)		—		(32,781	)		(13,587	)		—		(13,587	)

166

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

32. Income and Expeses from commissions:

The income and expenses for commissions that are shown in the Interim Consolidated Statement of Income for the period is as following:

	March		March
	2022		2021
	MCh$		MCh$
Income from commissions and services rendered
Comissions from debit and credit card services		53,485		42,926
Remuneration from administration of mutual funds, investment funds or others		29,037		24,722
Comissions from collections and payments		19,939		17,233
Comissions from portfolio management		13,435		13,006
Remuneration from brokerage and insurance advisory		8,450		7,008
Comissions from guarantees and letters of credit		7,872		7,088
Use of distribution channel		6,773		7,232
Brand use agreement		6,573		5,653
Comissions from trading and securities management		4,668		4,944
Comissions from credit prepayments		2,422		3,242
Comissions from lines of credit and current account overdrafts		1,112		1,105
Insurance not related to the granting of credits to legal entities		881		1,303
Insurance related to the granting of credits to legal entities		398		319
Comissions from factoring operations services		327		293
Loan commissions with letters of credit		43		103
Financial advisory services		266		509
Other commission earned		5,028		3,432
Total		160,709		140,118
Expenses from commissions and services received
Commissions from card transactions		12,840		11,423
Interbank transactions		8,408		6,882
Expenses from obligations of loyalty and merit card customers programs		3,481		6,193
Commissions from use of card brands license		2,581		1,421
Comissions from securities transaction		1,418		1,576
Collections and payments		1,158		1,129
Sales force		63		44
Other commissions from services received		520		318
Total		30,469		28,986

167

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

33. Net Financial income (expense):

(a) The amount of net financial income (expense) shown in the Consolidated Income Statement for the period corresponds to the following concepts:

	March			March
	2022			2021
	MCh$			MCh$
Financial result from:
Financial assets held for trading at fair value through profit or loss		548,179			14,892
Financial liabilities held for trading at fair value through profit or loss		(520,808	)		(13,770	)
Non-trading financial assets mandatorily measured at fair value through profit or loss		—			—
Financial assets designated as at fair value through profit or loss		—			—
Financial liabilities designated as at fair value through profit or loss		—			—
Derecognition of financial assets and liabilities at amortized cost and financial assets at fair value through other comprehensive income		508			3,803
Exchange, indexation and accounting hedging of foreign currency		28,100			25,273
Reclassification of financial assets for changes to business models		—			—
Modifications of financial assets and liabilities		—			—
Ineffective accounting hedges		—			—
Other type of accounting hedges		—			—
Total		55,979			30,198

(b) Below is a detail of the income (expense) associated with the changes of provisions constituted for credit risk related to loans and contingent loans denominated in foreign currency, which is reflected in “Exchange, indexation and accounting hedging of foreign currency”.

	March		March
	2022		2021
	MCh$		MCh$
Loans and advances to Banks		35		(7	)
Commercial loans		7,253		(895	)
Residential mortgage loans		—		—
Consumer loans		73		(134	)
Contingent loans		1,542		(103	)
Total		8,903		(1,139	)

168

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

34. Income attributable to investments in other companies:

The amount of income from investments in companies shown in the Interim Consolidated Statements of Income corresponds to the following:

		Income
		March		March
		2022		2021
Company	Shareholder	MCh$		MCh$
Associates
Transbank S.A.	Banco de Chile		974		(1,528	)
Centro de Compensación Automatizado S.A.	Banco de Chile		188		146
Administrador Financiero del Transantiago S.A.	Banco de Chile		82		48
Redbanc S.A.	Banco de Chile		73		71
Sociedad Interbancaria de Depósitos de Valores S.A.	Banco de Chile		39		49
Sociedad Imerc OTC S.A.	Banco de Chile		29		(4	)
Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A.	Banco de Chile		17		9
Sociedad Operadora de Tarjetas de Crédito Nexus S.A.			—		334
Subtotal Associates			1,402		(875	)
Joint Ventures
Artikos Chile S.A.	Banco de Chile		110		115
Servipag Ltda.	Banco de Chile		10		92
Subtotal Joint Ventures			120		207
Minority Investments
Banco Latinoamericano de Comercio Exterior S.A. (Bladex)	Banco de Chile		12		11
Subtotal Minority Investments			12		11
Total			1,534		(657	)

169

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

35. Result from non-current assets and disposal groups held for sale not admissible as discontinued operations:

	March			March
	2022			2021
	MCh$			MCh$
Net income from assets received in payment or adjudicated in judicial auction
Gain (loss) on sale of assets received in lieu of payment or foreclosed at judicial auction		1,291			1,989
Other income from assets received in payment or foreclosed at judicial auction		117			36
Provisions for adjustments to net realizable value of assets received in lieu of payment or foreclosed at judicial auction		(42	)		(16	)
Charge-off assets received in lieu of payment or foreclosed at judicial auction		(736	)		(472	)
Expenses to maintain assets received in lieu of payment or foreclosed at judicial auction		(123	)		(98	)
Non-current assets held for sale
Investments in other companies		—			—
Intangible assets		—			—
Property and equipment		21			3
Assets for recovery of assets transferred in financial leasing operations		449			138
Other assets		—			—
Total		977			1,580

170

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

36. Other operating Income and Expenses:

a) During the periods 2022 and 2021, the Bank and its subsidiaries present other operating income, according to the following:

	March		March
	2022		2021
	MCh$		MCh$
Income from investment properties		1,680		1,623
Income from correspondent banks		753		646
Expense recovery		313		756
Income from sale leased assets		85		21
Revaluation of prepaid monthly payments		63		29
Fiduciary and trustee commissions		22		72
Tax management income		22		73
Foreign trade income		18		11
Provision for fixed income instruments		13		285
Expense recovery income		1		20
Income from card brands issued (VISA, MC)		—		346
Others income		116		88
Total		3,086		3,970

b) During the periods 2022 and 2021, the Bank and its subsidiaries present other operating expenses, according to the following:

	March			March
	2022			2021
	MCh$			MCh$
Write-offs for operating risks		2,993			2,790
Card administration		1,219			744
Correspondent banks		821			549
Provision for pending operations (90 days)		559			584
Expenses for charge-off leased assets recoveries		509			61
Tax fines		308			—
Operational risk judgments		286			—
Expenses for credit operations of financial leasing		128			63
Renegotiated loan insurance premium		95			103
Life ensurance		77			115
Provisions for judicial contingencies		13			25
Insurance premium expense to cover operational risk events		(20	)		—
Other provisions for contingencies		(120	)		(158	)
Expense recovery from operational risk events		(1,371	)		(1,243	)
Recoverable tax expenses		—			88
Contribution to other organisms		—			66
Others expenses		182			199
Total		5,679			3,986

171

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

37. Expenses from salaries and employee benefits:

The composition of the expense for employee benefit obligations during the period 2022 and 2021 is as follows:

	March		March
	2022		2021
	MCh$		MCh$
Expenses for short-term employee benefit		112,557		107,583
Expenses for employee benefits due to termination of employment contract		6,892		2,653
Training expenses		665		510
Expenses for nursery and kindergarten		360		360
Other personnel expenses		1,593		2,592
Total		122,067		113,698

38. Administrative expenses:

This item is composed as follows:

	March		March
	2022		2021
	MCh$		MCh$
General administrative expenses
Information technology and communications		28,963		25,604
Maintenance and repair of property and equipment		10,473		11,245
External advisory services and professional services fees		4,298		3,470
Surveillance and securities transport services		2,880		3,228
Insurance premiums except to cover operational risk events		2,059		1,827
Office supplies		2,011		1,844
Energy, heating and other utilities		1,208		1,266
Expenses for short-term leases		1,119		813
External service of financial information		1,107		1,261
Other expenses of obligations for lease contracts		1,015		1,222
Postal box, mail, postage and home delivery services		876		1,096
Legal and notary expenses		865		1,005
External service of custody of documentation		813		710
Donations		538		446
Representation and travel expenses		370		678
Fines applied by other agencies		178		73
Fees for review and audit of the financial statements by the external auditor		174		194
Fees for technical reports		172		160
Expenses for  leases low value		129		333
Fees for advisory services carried out by the external auditor		12		10
Fees for advisory services carried out by other auditing companies		5		4
Other general administrative expenses		5,296		4,936
Outsource services
Technological developments expenses, certification and technology testing		4,594		5,641
Data processing		1,973		2,217
External credit evaluation service		1,129		973
External human resources administration services and supply of external personnel		398		332
External cleaning service, casino, custody of files and documents, storage of furniture and equipment		84		100
Call Center service for sales, marketing, quality control customer service		22		—
External collection service		—		5
Other outsource services		—		35
Board expenses
Board of Directors Compensation		705		707
Other Board expenses		2		—
Marketing		7,863		6,747
Taxes, contributions and other legal charges
Contribution to the banking regulator		3,389		2,965
Real estate contributions		1,215		972
Taxes other than income tax		510		391
Municipal patents		377		370
Other legal charges		12		9
Total		86,834		82,889

172

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

39. Depreciation and Amortization:

The amounts corresponding to charges to results for depreciation and amortization during the periods 2022 and 2021, are detailed as follows:

	March		March
	2022		2021
	MCh$		MCh$
Amortization of intangibles assets
Other intangible assets arising from business combinations		—		—
Other independently originated intangible assets		4,829		4,110
Depreciation of property and equipment
Buildings and land		559		560
Other property and equipment		7,156		6,747
Depreciation and impairment of leased assets
Buildings and land		7,167		7,041
Other property and equipment		—		—
Depreciation for improvements in leased real estate as leased of right-to-use assets		214		161
Amortization for the right-to-use other intangible assets under lease		—		—
Depreciation of other assets for investment properties		—		—
Amortization of other assets per activity income asset		—		—
Total		19,925		18,619

40. Impairment of non-financial assets:

As of March 31, 2022 and 2021, the composition of the item for impairment of non-financial assets is composed as follows:

	March		March
	2022		2021
	MCh$		MCh$
Impairment of property and equipment		—		(1	)
Impairment of assets from income from ordinary activities from contracts with customers		98		422
Total		98		421

173

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

41. Operating expenses credit losses:

(a) The composition is as follows:

	March			March
	2022			2021
	MCh$			MCh$
Expense of provisions established for loan credit risk		43,055			31,425
Expense of special provisions for credit risk		69,784			38,785
Recovery of written-off credits		(13,641	)		(14,743	)
Impairments for credit risk from financial assets at fair value through other comprehensive income		206			724
Total		99,404			56,191

(b) Summary of the expense of provisions constituted for credit risk and expense for credit losses:

	Expense of loans provisions constituted in the period
	Normal Portfolio						Substandard Portfolio		Non-Complying Portfolio									Deductible
	Evaluation						Evaluation		Evaluation									warranty Fogape
As of March 31, 2022	Individual			Group			Individual		Individual			Group			Subtotal			Covid-19		Total
	MCh$			MCh$			MCh$		MCh$			MCh$			MCh$			MCh$		MCh$
Loans and advances to Banks
Provisions established		—			—			—		—			—			—
Provisions released		53			—			—		—			—			53
Subtotal		53			—			—		—			—			53
Commercial loans
Provisions established		(3,178	)		(8,864	)		—		(5,606	)		(2,706	)		(20,354	)		—		(20,354	)
Provisions released		—			—			405		—			—			405			3,944		4,349
Subtotal		(3,178	)		(8,864	)		405		(5,606	)		(2,706	)		(19,949	)		3,944		(16,005	)
Residential mortgage loans
Provisions established		—			(486	)		—		—			(170	)		(656	)
Provisions released		—			—			—		—			—			—
Subtotal		—			(486	)		—		—			(170	)		(656	)
Consumer loans
Provisions established		—			(9,311	)		—		—			(17,136	)		(26,447	)
Provisions released		—			—			—		—			—			—
Subtotal		—			(9,311	)		—		—			(17,136	)		(26,447	)
Expense of provisions established for credit risk		(3,125	)		(18,661	)		405		(5,606	)		(20,012	)		(46,999	)		3,944		(43,055	)
Recovery of written-off credits
Loans and advances to Banks																					—
Commercial loans																					3,674
Residential mortgage loans																					2,470
Consumer loans																					—
Subtotal																					13,641
Loan credit loss expenses																					(29,414	)

174

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

41. Operating expenses credit losses, continued:

(b) Summary of the expense of provisions constituted for credit risk and expense for credit losses, continued;

	Expense of loans provisions constituted in the period
	Normal Portfolio						Substandard Portfolio		Non-Complying Portfolio									Deductible
	Evaluation						Evaluation		Evaluation									warranty Fogape
As of March 31, 2021	Individual			Group			Individual		Individual			Group			Subtotal			Covid-19			Total
	MCh$			MCh$			MCh$		MCh$			MCh$			MCh$			MCh$			MCh$
Loans and advances to Banks
Provisions established		—			—			—		—			—			—
Provisions released		190			—			—		—			—			190
Subtotal		190			—			—		—			—			190
Commercial loans
Provisions established		(2,407	)		(2,119	)		—		(1,861	)		(9,550	)		(15,937	)		(3,427	)		(19,364	)
Provisions released		—			—			972		—			—			972			—			972
Subtotal		(2,407	)		(2,119	)		972		(1,861	)		(9,550	)		(14,965	)		(3,427	)		(18,392	)
Residential mortgage loans
Provisions established		—			—			—		—			(2,088	)		(2,088	)
Provisions released		—			105			—		—			—			105
Subtotal		—			105			—		—			(2,088	)		(1,983	)
Consumer loans
Provisions established		—			—			—		—			(19,830	)		(19,830	)
Provisions released		—			8,590			—		—			—			8,590
Subtotal		—			8,590			—		—			(19,830	)		(11,240	)
Expense of provisions established for credit risk		(2,217	)		6,576			972		(1,861	)		(31,468	)		(27,998	)		(3,427	)		(31,425	)
Recovery of written-off credits
Loans and advances to Banks																						—
Commercial loans																						2,151
Residential mortgage loans																						948
Consumer loans																						11,644
Subtotal																						14,743
Loan credit loss expenses																						(16,682	)

175

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

41. Operating expenses credit losses, continued:

(c) Summary of expense for special provisions for credit risk:

 

	March			March
	2022			2021
	MCh$			MCh$
Expenses of provisions for contingent loans
Loans and advances to Banks		—			—
Commercial loans		(96	)		(1,499	)
Consumer loans		(667	)		(1,837	)
Expenses form provisions for country risk for transactions with debtors with residence abroad		547			2,121
Expense of special provisions for loans abroad		—			—
Expenses of additional loan provisions
Loans and advances to Banks		70,000			40,000
Commercial loans		—			—
Consumer loans		—			—
Expense of other special provisions established for credit risk		69,784			38,785

42. Income from discontinued operations:

As of March 31, 2022 and December 31, 2021, the Bank does not maintain income from discontinued operations.

43. Related Party Disclosures:

Related parties are considered to be those natural or legal persons who are in positions to directly or indirectly have significant influence through their ownership or management of the Bank and its subsidiaries, as set out in the Compendium of Accounting Standards and Chapter 12-4 of the current Compilation of Standards issued by the CMF.

According to the above, the Bank has considered as related parties those natural or legal persons who have a direct participation or through third parties on Bank ownership, where such participation exceeds 5% of the shares, and also people who, regardless of ownership, have authority and responsibility for planning, management and control of the activities of the entity or its subsidiaries. There also are considered as related the companies in which the parties related by ownership or management of the Bank have a share which reaches or exceeds 5%, or has the position of director, general manager or equivalent.

176

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

43. Related Party Disclosures, continued:

(a) Assets and liabilities with related parties:

	Related Party Type
Type of current assets and liabilities with related parties As of March 31, 2022	Parent Entity		Other Legal Entity			Key Personnel of the Consolidated Bank			Other Related Party			Total
ASSETS	MCh$		MCh$			MCh$			MCh$			MCh$
Financial assets held for trading at fair value through profit or loss
Derivative Financial Instruments		—		300,215			—			—			300,215
Debt financial instruments		—		—			—			—			—
Non-trading financial assets mandatorily measured at fair value through profit or loss		—		—			—			—			—
Financial assets designated as at fair value through profit or loss		—		114			—			—			114
Financial assets at fair value through other comprehensive income		—		5,662			—			—			5,662
Derivative Financial Instruments for hedging purposes		—		—			—			—			—
Financial assets at amortized cost		—		—			—			—			—
Rights by resale agreements and securities lending		—		—			—			—			—
Debt financial instruments		—		—			—			—			—
Commercial loans		—		531,771			1,058			12,042			544,871
Residential mortgage loans		—		—			15,101			50,942			66,043
Consumer Loans		—		—			1,937			8,737			10,674
Allowances established – Loans		—		(3,850	)		(14	)		(272	)		(4,136	)
Other assets		—		48,612			—			190			48,802
Contingent loans		—		164,163			3,931			17,320			185,414
LIABILITIES
Financial liabilities held for trading at fair value through profit or loss
Derivative Financial Instruments		—		274,286			—			—			274,286
Financial liabilities designated as at fair value through profit or loss		—		—			—			—			—
Derivative Financial Instruments for hedging purposes		—		1,005			—			—			1,005
Financial liabilities at amortized cost		—		—			—			—			—
Current accounts and other demand deposits		340		180,734			7,445			7,960			196,479
Saving accounts and time deposits		131,726		141,796			3,150			21,030			297,705
Obligations by repurchase agreements and securities lending		—		1,505			—			—			1,505
Borrowings from financial institutions		—		69,751			—			—			69,751
Debt financial instruments issued		—		—			—			—			—
Other financial obligations		—		—			—			—			—
Lease liabilities		—		11,687			—			—			11,687
Other liabilities		—		100,854			124			10			100,988

177

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

43. Related Party Disclosures, continued:

(a) Assets and liabilities with related parties, continued:

	Related Party Type
Type of current assets and liabilities with related parties As of December 31, 2021	Parent Entity		Other Legal Entity			Key Personnel of the Consolidated Bank			Other Related Party			Total
ASSETS	MCh$		MCh$			MCh$			MCh$			MCh$
Financial assets held for trading at fair value through profit or loss
Derivative Financial Instruments		—		319,120			—			—			319,120
Debt financial instruments		—		—			—			—			—
Non-trading financial assets mandatorily measured at fair value through profit or loss		—		—			—			—			—
Financial assets designated as at fair value through profit or loss		—		—			—			—			—
Financial assets at fair value through other comprehensive income		—		15,045			—			—			15,045
Derivative Financial Instruments for hedging purposes		—		—			—			—			—
Financial assets at amortized cost		—		—			—			—			—
Rights by resale agreements and securities lending		—		—			—			—			—
Debt financial instruments		—		—			—			—			—
Commercial loans		8		470,581			853			12,718			484,160
Residential mortgage loans		—		—			14,612			51,025			65,637
Consumer Loans		—		—			1,862			8,798			10,660
Allowances established – Loans		—		(3,795	)		(15	)		(416	)		(4,226	)
Other assets		10,689		18,559			—			—			29,248
Contingent loans		—		162,046			4,119			17,713			183,878
LIABILITIES
Financial liabilities held for trading at fair value through profit or loss
Derivative Financial Instruments		—		312,746			—			—			312,746
Financial liabilities designated as at fair value through profit or loss		—		—			—			—			—
Derivative Financial Instruments for hedging purposes		—		608			—			—			608
Financial liabilities at amortized cost		—		—			—			—			—
Current accounts and other demand deposits		254		209,799			7,403			7,219			224,675
Saving accounts and time deposits		19,836		196,913			2,310			19,347			238,406
Obligations by repurchase agreements and securities lending		—		531			—			—			531
Borrowings from financial institutions		—		122,883			—			—			122,883
Debt financial instruments issued		—		—			—			—			—
Other financial obligations		—		—			—			—			—
Lease liabilities		—		10,256			—			—			10,256
Other liabilities		55,067		685			444			—			56,196

178

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

43. Related Party Disclosures, continued:

(b) Income and expenses from related party transactions:

As of March 31, 2022
	Parent Entity		Other Legal Entity			Key personnel of the consolidated Bank			Other Related party			Total
	MCh$		MCh$			MCh$			MCh$			MCh$
Interest revenue		—		3,767			91			409			4,267
UF indexation revenue		—		5,488			264			1,068			6,820
Income from commissions		22		28,095			6			8			28,131
Net Financial income (expense)		—		57,310			—			—			57,310
Other income		—		39			—			—			39
Total Income		22		94,699			361			1,485			96,567
Interest expense		9		645			9			61			724
UF indexation expenses		—		—			—			18			18
Expenses from commissions		—		8,312			—			—			8,312
Expenses credit losses		—		(142	)		(14	)		(142	)		(298	)
Expenses from salaries and employee benefits		—		—			17,237			27,365			44,602
Administrative expenses		—		5,269			808			17			6,094
Other expenses		—		—			—			2			2
Total Expenses		9		14,084			18,040			27,321			59,454

As of March 31, 2021
	Parent Entity		Other Legal Entity			Key personnel of the consolidated Bank			Other Related party			Total
	MCh$		MCh$			MCh$			MCh$			MCh$
Interest revenue		—		2,079			72			418			2,569
UF indexation revenue		—		975			116			227			1,318
Income from commissions		24		24,061			4			19			24,108
Net Financial income (expense)		—		10,900			—			—			10,900
Other income		—		118			—			—			118
Total Income		24		38,133			192			664			39,013
Interest expense		—		87			1			6			94
UF indexation expenses		—		5			—			2			7
Expenses from commissions		—		8,029			—			—			8,029
Expenses credit losses		—		(497	)		(3	)		(4	)		(504	)
Expenses from salaries and employee benefits		—		—			12,960			24,823			37,783
Administrative expenses		—		5,166			805			16			5,987
Other expenses		—		—			—			—			—
Total Expenses		—		12,790			13,763			24,843			51,396

179

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

43. Related Party Disclosures, continued:

(c) Transactions with related parties:

As of March 31, 2022

	Nature of the	Description of the transaction			Transactions under equivalence conditions to those transactions with mutual independence			Effect on Income				Effect on Financial position
Company name	relationship with the Bank	Type of service	Term	Renewal conditions	between the parties	Amount		Income		Expenses		Accounts receivable		Accounts payable
						MCh$		MCh$		MCh$		MCh$		MCh$
Ionix SPA	Other related parties	IT support services	30 days	Contract	Yes		148		—		148		—		24
Canal 13	Other related parties	Advertising service	30 days	Monthly	Yes		159		—		159		—		158
Servipag Ltda.	Joint venture	Software development service	30 days	Contract	Yes		186		—		186		—		—
Bolsa de Comercio de Santiago	Other related parties	IT support services	30 days	Contract	Yes		141		—		141		—		—
Enex S.A.	Other related parties	Rent floor space for ATMs	30 days	Contract	Yes		154		—		154		—		154
Redbanc S.A.	Associates	Software development	30 days	Contract	Yes		61		—		61		—		—
		Equipment maintenance	30 days	Contract	Yes		28		—		28		—		—
Sistemas Oracle de Chile Ltda.	Other related parties	Software services	30 days	Contract	Yes		2,008		—		2,008		—		813
		IT support services	30 days	Contract	Yes		308		—		308		—		—
Depósito Central de Valores	Associates	Custodial services	30 days	Contract	Yes		503		—		503		—		44
Nexus S.A.	Associates	Customer product delivery services	30 days	Contract	Yes		271		—		271		—		466
		Card processing	30 days	Contract	Yes		2,364		—		2,364		—		—
		IT development services	30 days	Contract	Yes		266		—		266		—		—
		Embossing services	30 days	Contract	Yes		139		—		139		—		—
		Fraud prevention services	30 days	Contract	Yes		262		—		262		—		—
Artikos Chile S.A.	Joint venture	IT support services	30 days	Contract	Yes		154		—		154		—		15
Comder Contraparte Central S.A.	Associates	Securities clearing services	30 days	Contract	Yes		215		—		215		—		—
Servipag Ltda.	Joint venture	Collection services	30 days	Contract	Yes		1,137		—		1,137		—		—
Redbanc S.A.	Associates	Electronic transaction management services	30 days	Contract	Yes		3,149		—		3,149		—		—
Transbank S.A.	Associates	Processing fees	30 days	Contract	Yes		324		—		324		—		225
		Exchange commission	30 days	Contract	Yes		25,084		25,084		—		—		—
Centro de Compensación Automatizado S.A.	Associates	Transfer services	30 days	Contract	Yes		488		—		488		—		—
Citibank	Other related parties	Connectivity business commissions	Quarterly	Contract	Yes		1,955		1,955		—		2,770		—

180

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

43. Related Party Disclosures, continued:

(d) Payments to the Board of Directors and to key personnel of the management of the Bank and its subsidiaries:

	March		March
	2022		2021
	MCh$		MCh$
Directory:
Payment of remuneration and attendance fees of the Board of Directors - Bank and its subsidiaries		703		706
Key Personnel of the Management of the Bank and its Subsidiaries:
Payment for benefits to short-term employees		16,751		13,355
Payment for benefits to post-employment employees		—		—
Payment for benefits to long-term employees		—		—
Payment for benefits to employees for termination of employment contract		460		—
Payment to employees based on shares or equity instruments		—		—
Payment for obligations for defined contribution post-employment plans		—		—
Payment for obligations for post-employment defined benefit plans		—		—
Payment for other staff obligations		—		—
Subtotal		17,237		12,961
Total		17,940		13,667

(e) Composition of the Board of Directors and key personnel of the Management of the Bank and its subsidiaries:

	March		March
	2022		2021
	No. Executives
Directory:
Directors – Bank and its subsidiaries		19		18
Key Personnel of the Management of the Bank and its Subsidiaries:
CEO – Bank		1		1
CEOs –  Subsidiaries		5		6
Division Managers / Area – Bank		97		93
Division Managers / Area – Subsidiaries		31		29
Subtotal		134		129
Total		153		147

181

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

44. Fair Value of Financial Assets and Liabilities:

Banco de Chile and its subsidiaries have defined a corporate framework for valuation and control related with the process to the fair value measurement.

Within the established framework includes the Product Control Unit, which is independent of the business areas and reports to the Financial Management and Control Division Manager. This function befall to the Financial Control, Treasury and Capital Manager, through the Financial Risk Information and Control Section, is responsible for independent verification of price and results of trading (including derivatives) and investment operations and all fair value measurements.

To achieve the appropriate measurements and controls, the Bank and its subsidiaries, take into account at least the following aspects:

(i) Industry standard valuation.

To value financial instruments, Banco de Chile uses industry standard modeling; quota value, share price, discounted cash flows and valuation of options through Black-Scholes-Merton, according to the case. The input parameters for the valuation correspond to rates, prices and levels of volatility for different terms and market factors that are traded in the national and international market and that are provided by the main sources of the market.

(ii) Quoted prices in active markets.

The fair value for instruments with quoted prices in active markets is determined using daily quotes from electronic systems information (such as Bolsa de Comercio de Santiago, Bloomberg, LVA and Risk America, etc). This quote represents the price at which these instruments are regularly traded in the financial markets.

(iii) Valuation techniques.

If no specific quotes are available for the instrument to be valued, valuation techniques will be used to determine the fair value.

Due to, in general, the valuation models require a set of market parameters as inputs, the aim is to maximize information based on observable or price-related quotations for similar instruments in active markets. To the extent there is no information in direct from the markets, data from external suppliers of information, prices of similar instruments and historical information are used to validate the valuation parameters.

182

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

44. Fair Value of Financial Assets and Liabilities, continued:

(iv) Fair value adjustments.

Part of the fair value process considers three adjustments to the market value, calculated based on the market parameters, including; a liquidity adjustment, a Bid/Offer adjustment and an adjustment is made for credit risk of derivatives (CVA and DVA). The calculation of the liquidity adjustment considers the size of the position in each factor, the particular liquidity of each factor, the relative size of Banco de Chile with respect to the market, and the liquidity observed in transactions recently carried out in the market. In turn, the Bid/Offer adjustment, represents the impact on the valuation of an instrument depending on whether the position corresponds to a long (bought) or a short (sold).To calculate this adjustment is used the direct quotes from active markets or indicative prices or derivatives of similar assets depending on the instrument, considering the Bid, Mid and Offer, respectively. Finally, the adjustment made for CVA and DVA for derivatives corresponds to the credit risk recognition of the issuer, either of the counterparty (CVA) or of Banco de Chile (DVA).

Liquidity value adjustments are made to trading instruments (including derivatives) only, while Bid / Offer adjustments are made for trading instruments and Financial instrument at fair value through Other Comprehensive Income. Adjustments for CVA / DVA are carried out only for derivatives.

(v) Fair value control.

A process of independent verification of prices and interest rates is executed daily, in order to control that the market parameters used by Banco de Chile in the valuation of the financial instruments relating to the current state of the market and from them the best estimate derived of the fair value. The objective of this process is to control that the official market parameters provided by the respective business areas, before being entered into the valuation, are within acceptable ranges of differences when compared to the same set of parameters prepared independently by the Financial Risk Information and Control Section. As a result, value differences are obtained at the level of currency, product and portfolio. In the event significant differences exist, these differences are scaled according to the amount of individual materiality of each market factor and aggregated at the portfolio level, according to the grouping levels within previously defined ranges. These ranges are approved by the Finance, International and Financial Risk Committee.

Complementary and in parallel, the Financial Risk Information and Control Section generates and reports on a daily basis Profit and Loss (“P&L”) and Exposure to Market Risks, which allow for proper control and consistency of the parameters used in the valuation.

183

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

44. Fair Value of Financial Assets and Liabilities, continued:

(vi) Judgmental analysis and information to Management.

In particular cases, where there are no market quotations for the instrument to be valued and there are no prices for similar transactions instruments or indicative parameters, a specific control and a reasoned analysis must be carried out in order to estimate the fair value of the operation. Within the valuation framework described in the Reasonable Value Policy (and its procedure) approved by the Board of Directors of Banco de Chile, a required level of approval is set in order to carry out transactions where market information is not available or it is not possible to infer prices or rates from it.

(a) Hierarchy of instrument valued at Fair value:

Banco de Chile and its subsidiaries, classify all the financial instruments among the following levels:

Level 1: These are financial instruments whose fair value is calculated at quoted prices (unadjusted) in extracted from liquid and deep markets. For these instruments there are quotes or prices (return internal rates, quote value, price) the observable market, so that assumptions are not required to determine the value .

In this level, the following instruments are considered: currency futures, debt instruments issued by the Treasury and the Central Bank of Chile, which belong to benchmarks, mutual fund investments and equity shares.

For the instruments of the Central Bank of Chile and the General Treasury of the Republic, all those mnemonics belonging to a Benchmark, in other words corresponding to one of the following categories published by the Santiago Stock Exchange, will be considered as Level 1: Pesos-02, Pesos-03, Pesos-04, Pesos-05, Pesos-07, Pesos-10, UF-02, UF-04, UF-05, UF-07, UF-10, UF-20, UF-30. A Benchmark corresponds to a group of mnemonics that are similar in duration and are traded in an equivalent way, i.e., the price (return internal rates in this case) obtained is the same for all the instruments that make up a Benchmark. This feature defines a greater depth of market, with daily quotations that allow classifying these instruments as Level 1.

In the case of debt issued by the Chilean Government, the internal rate of return of the market is used to discount all flows to present value. In the case of mutual funds and equity shares, the current market price per share, which multiplied by the number of instruments results in the fair value.

The preceding described valuation methodology is equivalent to the one used by the Bolsa de Comercio de Santiago (Santiago Stock Exchange) and correspond to the standard methodology used in the market.

184

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

44. Fair Value of Financial Assets and Liabilities, continued:

Level 2: They are financial instruments whose fair value is calculated based on prices other than in quoted in Level 1 that are observable for the asset or liability, directly (that is, as prices or internal rates of return) or indirectly (that is, derived from prices or internal rates of return from similar instruments). These categories include:

a) Quoted prices for similar assets or liabilities in active markets.

b) Quoted prices for identical or similar assets or liabilities in markets that are not active.

c) Inputs data other than quoted prices that are observable for the asset or liability.

d) Inputs data corroborated by the market.

At this level there are mainly derivatives instruments, debt issued by banks, debt issues of Chilean and foreign companies, issued in Chile or abroad, mortgage claims, financial brokerage instruments and some issuances by the Central Bank of Chile and the General Treasury of the Republic, which do not belong to benchmarks.

To value derivatives, depends on whether they are impacted by volatility as a relevant market factor in standard valuation methodologies; for options the Black-Scholes-Merton formula is used; for the rest of the derivatives, forwards and swaps, discounted cash flows method is used.

For the remaining instruments at this level, as for debt issues of level 1, the valuation is done through cash flows model by using an internal rate of return that can be derived or estimated from internal rates of return of similar securities as mentioned above.

In the event that there is no observable price for an instrument in a specific term, the price will be inferred from the interpolation between periods that have observable quoted price in active markets. These models incorporate various market variables, including the credit quality of counterparties, exchange rates and interest rate curves.

185

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

44. Fair Value of Financial Assets and Liabilities, continued:

Valuation Techniques and Inputs for Level 2 Instrument:

Type of Financial Instrument	Valuation Method	Description: Inputs and Sources
Local Bank and Corporate Bonds	Discounted cash flows model	Prices (internal rates of return) are provided by third party price providers that are widely used in the Chilean market. Model is based on a Base Yield (Central Bank Bonds) and issuer spread. The model is based on daily prices and risk/maturity similarities between Instruments.
Offshore Bank and Corporate Bonds		Prices are provided by third party price providers that are widely used in the Chilean market. Model is based on daily prices.
Local Central Bank and Treasury Bonds		Prices (internal rates of return) are provided by third party price providers that are widely used in the Chilean market. Model is based on daily prices.
Mortgage Notes		Prices (internal rates of return) are provided by third party price providers that are widely used in the Chilean market. Model is based on a Base Yield (Central Bank Bonds) and issuer spread. The model takes into consideration daily prices and risk/maturity similarities between instruments.
Time Deposits		Prices (internal rates of return) are provided by third party price providers that are widely used in the Chilean market. Model is based on daily prices and considers risk/maturity similarities between instruments.
Cross Currency Swaps, Interest Rate Swaps, FX Forwards, Inflation Forwards		Forward Points, Inflation forecast and local swap rates are provided by market brokers that are widely used in the Chilean market. Offshore rates and spreads are obtained from third party price providers that are widely used in the Chilean market. Zero Coupon rates are calculated by using the bootstrapping method over swap rates.
FX Options	Black-Scholes Model	Prices for volatility surface estimates are obtained from market brokers that are widely used in the Chilean market.

186

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

44. Fair Value of Financial Assets and Liabilities, continued:

Level 3: These are financial instruments whose fair value is determined using non-observable inputs data neither for the assets or liabilities under analysis nor for similar instruments. An adjustment to an input that is significant to the entire measurement can result in a fair value measurement classified within Level 3 of the fair value hierarchy, if the adjustment uses significant non-observable data entry.

The instruments likely to be classified as level 3 are mainly Corporate Debt by Chilean and foreign companies, issued both in Chile and abroad.

Valuation Techniques and Inputs for Level 3 Instrument:

Type of Financial Instrument	Valuation Method	Description: Inputs and Sources
Local Bank and Corporate Bonds	Discounted cash flows model	Since inputs for these types of securities are not observable by the market, we model interest rate of returns for them based on a Base Yield (Central Bank Bonds) and issuer spread. These inputs (base yield and issuer spread) are provided on a daily basis by third party price providers that are widely used in the Chilean market.
Offshore Bank and Corporate Bonds	Discounted cash flows model	Since inputs for these types of securities are not observable by the market, we model interest rate of returns for them based on a Base Yield (US-Libor) and issuer spread. These inputs (base yield and issuer spread) are provided on a weekly basis by third party price providers that are widely used in the Chilean market.

187

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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44. Fair Value of Financial Assets and Liabilities, continued:

(a) Level chart:

The following table shows the classification by levels, for financial instruments registered at fair value.

	Level 1				Level 2				Level 3				Total
	March		December		March		December		March		December		March		December
	2022		2021		2022		2021		2022		2021		2022		2021
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Financial Assets
Financial Assets held for trading at fair value through profit or loss
Derivative contracts financial:
Forwards		—		—		439,501		742,545		—		—		439,501		742,545
Swaps		—		—		1,951,402		1,958,243		—		—		1,951,402		1,958,243
Call Options		—		—		1,931		4,509		—		—		1,931		4,509
Put Options		—		—		1,627		199		—		—		1,627		199
Futures		—		—		—		—		—		—		—		—
Subtotal		—		—		2,394,461		2,705,496		—		—		2,394,461		2,705,496
Debt Financial Instruments:
From the Chilean Government and Central Bank		50,615		169,067		220,195		3,303,055		—		—		270,810		3,472,122
Other debt financial instruments issued in Chile		—		—		186,971		214,336		24,405		51,484		211,376		265,820
Financial debt instruments issued Abroad		—		—		—		—		—		—		—		—
Subtotal		50,615		169,067		407,166		3,517,391		24,405		51,484		482,186		3,737,942
Others		3,199		138,753		—		—		—		—		3,199		138,753
Financial Assets at fair value through Other Comprehensive Income
Debt Financial Instruments: (1)
From the Chilean Government and Central Bank		515,625		507,368		1,537,626		1,981,482		—		—		2,053,251		2,488,850
Other debt financial instruments issued in Chile		—		—		650,737		540,756		16,511		25,203		667,248		565,959
Financial debt instruments issued Abroad		—		—		—		—				—		—		—
Subtotal		515,625		507,368		2,188,363		2,522,238		16,511		25,203		2,720,499		3,054,809
Derivative contracts financial for hedging purposes
Forwards		—		—		—		—		—		—		—		—
Swaps		—		—		92,256		277,802		—		—		92,256		277,802
Call Options		—		—		—		—		—		—		—		—
Put Options		—		—		—		—		—		—		—		—
Futures		—		—		—		—		—		—		—		—
Subtotal		—		—		92,256		277,802		—		—		92,256		277,802
Total		566,240		676,435		5,082,246		9,022,927		40,916		76,687		5,692,601		9,914,802
Financial Liabilities
Financial liabilities held for trading at fair value through profit or loss
Derivative contracts financial:
Forwards		—		—		379,681		505,179		—		—		379,681		505,179
Swaps		—		—		2,137,897		2,264,139		—		—		2,137,897		2,264,139
Call Options		—		—		1,514		2,726		—		—		1,514		2,726
Put Options		—		—		1,767		459		—		—		1,767		459
Futures		—		—		—		—		—		—		—		—
Subtotal		—		—		2,520,859		2,772,503		—		—		2,520,859		2,772,503
Others		—		—		1,725		9,610		—		—		1,725		9,610
Derivative contracts financial for hedging purposes
Forwards		—		—		—		88		—		—		—		88
Swaps		—		—		49,029		608		—		—		49,029		608
Call Options		—		—		—		—		—		—		—		—
Put Options		—		—		—		—		—		—		—		—
Futures		—		—		—		—		—		—		—		—
Subtotal		—		—		49,029		696		—		—		49,029		696
Total		—		—		2,571,613		2,782,809		—		—		2,571,613		2,782,809

(1) As of March 31, 2022, 100% of instruments of Level 3 have denomination “Investment Grade”. Also, 100% of total of these financial instruments correspond to domestic issuers.

188

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

44. Fair Value of Financial Assets and Liabilities, continued:

(b) Level 3 reconciliation:

The following table shows the reconciliation between the balances at the beginning and at the end of year for those instruments classified in Level 3, whose fair value is reflected in the Interim Consolidated Financial Statements:

	March 2022
	Balance as of January 1, 2022		Gain (Loss) Recognized in Income (1)			Gain (Loss) Recognized in Equity (2)		Purchases		Sales			Transfer from Level 1 and 2		Transfer to Level 1 and 2		Balance as of March 31, 2022
	MCh$		MCh$			MCh$		MCh$		MCh$			MCh$		MCh$		MCh$
Financial Assets held for trading at fair value through profit or loss
Debt Financial Instruments:
Other debt financial instruments issued in Chile		51,484		727			—		—		(27,806	)		—		—		24,405
Subtotal		51,484		727			—		—		(27,806	)		—		—		24,405
Financial Assets at fair value through Other Comprehensive Income
Debt Financial Instruments:
Other debt financial instruments issued in Chile		25,203		(483	)		1,757		—		(9,966	)		—		—		16,511
Subtotal		25,203		(483	)		1,757		—		(9,966	)		—		—		16,511
Total		76,687		244			1,757		—		(37,772	)		—		—		40,916

189

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

44. Fair Value of Financial Assets and Liabilities, continued:

(b) Level 3 reconciliation, continued:

	December 2021
	Balance as of January 1, 2021		Gain (Loss) Recognized in Income (1)			Gain (Loss) Recognized in Equity (2)			Purchases		Sales			Transfer from Level 1 and 2		Transfer to Level 1 and 2			Balance as of December 31, 2021
	MCh$		MCh$			MCh$			MCh$		MCh$			MCh$		MCh$			MCh$
Financial Assets held for trading at fair value through profit or loss
Debt Financial Instruments:
Other debt financial instruments issued in Chile		5,494		(503	)		—			42,484		(3,160	)		7,169		—			51,484
Subtotal		5,494		(503	)		—			42,484		(3,160	)		7,169		—			51,484
Financial Assets at fair value through Other Comprehensive Income
Debt Financial Instruments:
Other debt financial instruments issued in Chile		36,596		1,084			(3,168	)		10,212		(20,453	)		6,399		(5,467	)		25,203
Subtotal		36,596		1,084			(3,168	)		10,212		(20,453	)		6,399		(5,467	)		25,203
Total		42,090		581			(3,168	)		52,696		(23,613	)		13,568		(5,467	)		76,687

(1) Recorded in income under item “Net Financial income (expense)”.

(2) Recorded in equity under item “Accumulated other comprehensive income”.

190

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

44. Fair Value of Financial Assets and Liabilities, continued:

(c) Sensitivity of instruments classified in Level 3 to changes in key assumptions of models:

The following table shows the sensitivity, by type of instrument, of those instruments classified in Level 3 using alternative in key valuation assumptions:

	As of March 31, 2022					As of December 31, 2021
	Level 3		Sensitivity to changes in key assumptions of models			Level 3		Sensitivity to changes in key assumptions of models
	MCh$		MCh$			MCh$		MCh$
Financial Assets held for trading at fair value through profit or loss
Debt Financial Instruments:
Other debt financial instruments issued in Chile		24,405		(131	)		51,484		(506	)
Subtotal		24,405		(131	)		51,484		(506	)
Financial Assets at fair value through Other Comprehensive Income
Debt Financial Instruments:
Other debt financial instruments issued in Chile		16,511		(410	)		25,203		(782	)
Subtotal		16,511		(410	)		25,203		(782	)
Total		40,916		(541	)		76,687		(1,288	)

With the purpose of determining the sensitivity of the financial investments to changes in significant market factors, the Bank has made alternative calculations at fair value, changing those key parameters for the valuation and which are not directly observable in screens. In the case of the financial assets listed in the table above, which correspond to Bank Bonds and Corporate Bonds, it was considered that, since there are no current observables prices, the input prices will be based on brokers' quotes. The prices are usually calculated as a base rate plus a spread. For Local Bonds it was determined to apply a 10% impact on the price, while for the Off Shore Bonds it was determined to apply a 10% impact only on the spread, since the base rate is covered by interest rate swaps instruments in the so-called accounting hedges. The 10% impact is considered reasonable, taking into account the market performance of these instruments and comparing it against the bid / offer adjustment that is provisioned by these instruments.

191

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

44. Fair Value of Financial Assets and Liabilities, continued:

(d) Other assets and liabilities:

The following table summarizes the fair values of the Bank’s main financial assets and liabilities that are not recorded at fair value in the Statement of Financial Position. The values shown in this note are not attempt to estimate the value of the Bank’s income-generating assets, nor forecast their future behavior. The estimated fair value is as follows:

	Book Value				Estimated Fair Value
	March		December		March		December
	2022		2021		2022		2021
	MCh$		MCh$		MCh$		MCh$
Assets
Cash and due from banks		4,882,248		3,713,734		4,882,248		3,713,734
Transactions in the course of collection		433,912		486,700		433,912		486,700
Subtotal		5,316,160		4,200,434		5,316,160		4,200,434
Financial assets at amortized cost
Rights by resale agreements and securities lending		25,861		64,365		25,861		64,365
Debt financial instruments		846,983		839,744		769,843		764,528
Loans and advances to Banks
Domestic banks		—		159,960		—		159,960
Central Bank of Chile		2,800,000		1,090,000		2,800,000		1,090,000
Foreign banks		191,417		279,353		191,557		278,813
Subtotal		3,864,261		2,433,422		3,787,261		2,357,666
Loans to customers, net
Commercial loans		18,938,101		19,217,868		17,949,007		18,423,126
Residential mortgage loans		10,426,250		10,315,921		9,951,579		9,753,455
Consumer loans		4,144,395		3,978,079		4,053,142		3,899,940
Subtotal		33,508,746		33,511,868		31,953,728		32,076,521
Total		42,689,167		40,145,724		41,057,149		38,634,621
Liabilities
Transactions in the course of payment		433,362		369,980		433,362		369,980
Financial liabilities at amortized cost
Current accounts and other demand deposits		16,493,474		18,249,881		16,493,474		18,249,881
Saving accounts and time deposits		9,801,495		8,803,713		9,798,573		8,808,900
Obligations by repurchase agreements and securities lending		99,268		85,399		99,268		85,399
Borrowings from financial institutions		4,657,937		4,861,865		4,139,435		4,325,869
Debt financial instruments issued
Letters of credit for residential purposes		3,398		4,005		3,561		4,209
Letters of credit for general purposes		90		109		94		116
Bonds		8,428,273		8,557,281		8,319,287		8,397,835
Other financial obligations		201,563		250,005		220,537		274,838
Subtotal		39,685,498		40,812,258		39,074,229		40,147,047
Financial instruments of regulatory capital issued
Subordinate bonds		939,099		917,510		917,013		869,364
Total		41,057,959		42,099,748		40,424,604		41,386,391

Other financial assets and liabilities not measured at their fair value, but for which a fair value is estimated, even if not managed based on such value, include assets and liabilities such as placements, deposits and other time deposits, debt issued, and other financial assets and obligations with different maturities and characteristics. The fair value of these assets and liabilities is calculated using the Discounted Cash Flow model and the use of various data sources such as yield curves, credit risk spreads, etc. In addition, due to some of these assets and liabilities are not traded on the market, periodic reviews and analyzes are required to determine the suitability of the inputs and determined fair values.

192

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

44. Fair Value of Financial Assets and Liabilities, continued:

(e) Levels of other assets and liabilities:

The following table shows the estimated fair value of financial assets and liabilities not valued at their fair value, as of March 31, 2022 and December 31, 2021:

	Level 1 Estimated Fair Value				Level 1 Estimated Fair Value				Level 3 Estimated Fair Value				Total Estimated Fair Value
	March		December		March		December		March		December		March		December
	2022		2021		2022		2021		2022		2021		2022		2021
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Assets
Cash and due from banks		4,882,248		3,713,734		—		—		—		—		4,882,248		3,713,734
Transactions in the course of collection		433,912		486,700		—		—		—		—		433,912		486,700
Subtotal		5,316,160		4,200,434		—		—		—		—		5,316,160		4,200,434
Financial assets at amortized cost
Rights by resale agreements and securities lending		25,861		64,365		—		—		—		—		25,861		64,365
Debt financial instruments		769,843		764,528		—		—		—		—		769,843		764,528
Loans and advances to Banks
Domestic banks		—		159,960		—		—		—		—		—		159,960
Central Bank of Chile		2,800,000		1,090,000		—		—		—		—		2,800,000		1,090,000
Foreign banks		—		—		—		—		191,557		278,813		191,557		278,813
Subtotal		3,595,704		2,078,853		—		—		191,557		278,813		3,787,261		2,357,666
Loans to customers, net
Commercial loans		—		—		—		—		17,949,007		18,423,126		17,949,007		18,423,126
Residential mortgage loans		—		—		—		—		9,951,579		9,753,455		9,951,579		9,753,455
Consumer loans		—		—		—		—		4,053,142		3,899,940		4,053,142		3,899,940
Subtotal		—		—		—		—		31,953,728		32,076,521		31,953,728		32,076,521
Total		8,911,864		6,279,287		—		—		32,145,285		32,355,334		41,057,149		38,634,621
Liabilities
Transactions in the course of payment		433,362		369,980		—		—		—		—		433,362		369,980
Financial liabilities at amortized cost						—		—		—		—		—		—
Current accounts and other demand deposits		16,493,474		18,249,881		—		—		—		—		16,493,474		18,249,881
Saving accounts and time deposits		—		—		—		—		9,798,573		8,808,900		9,798,573		8,808,900
Obligations by repurchase agreements and securities lending		99,268		85,399		—		—		—		—		99,268		85,399
Borrowings from financial institutions		—		—		—		—		4,139,435		4,325,869		4,139,435		4,325,869
Debt financial instruments issued		—		—		—		—		—		—		—		—
Letters of credit for residential purposes		—		—		3,561		4,209		—		—		3,561		4,209
Letters of credit for general purposes		—		—		94		116		—		—		94		116
Bonds		—		—		8,319,287		8,397,835		—		—		8,319,287		8,397,835
Other financial obligations		—		—		—		—		220,537		274,838		220,537		274,838
Subtotal		16,592,742		18,335,280		8,322,942		8,402,160		14,158,545		13,409,607		39,074,229		40,147,047
Financial instruments of regulatory capital issued
Subordinate bonds		—		—		—		—		917,013		869,364		917,013		869,364
Total		17,026,104		18,705,260		8,322,942		8,402,160		15,075,558		14,278,971		40,424,604		41,386,391

193

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

44. Fair Value of Financial Assets and Liabilities, continued:

(e) Levels of other assets and liabilities, continued:

The Bank determines the fair value of these assets and liabilities according to the following:

● Short-term assets and liabilities: For assets and liabilities with short-term maturity, it is assumed that the book values approximate to their fair value. This assumption is applied to the following assets and liabilities:

Assets:	Liabilities:
- Cash and deposits in banks	- Current accounts and other demand deposits
- Transactions in the course of collection	- Transactions in the course of payments
- Investment under resale agreements and securities loans	- Obligations under repurchase agreements and securities loans
- Loans and advance to domestic banks

● Loans to Customers and Advance to foreign banks: Fair value is determined by using the discounted cash flow model and internally generated discount rates, based on internal transfer rates derived from our internal transfer price process. Once the present value is determined, we deduct the related loan loss allowances in order to incorporate the credit risk associated with each contract or loan. As we use internally generated parameters for valuation purposes, we categorize these instruments in Level 3.

● Debt financial instruments at amortized cost: The fair value is calculated with the methodology of the Stock Exchange, using the IRR observed in the market. Because the instruments that are in this category correspond to Treasury Bonds that are Benchmark, they are classified in Level 1.

● Letters of Credit and Bonds: In order to determine the present value of contractual cash flows, we apply the discounted cash flow model by using market interest rates that are available in the market, either for the instruments under valuation or instruments with similar features that fit valuation needs in terms of currency, maturities and liquidity. The market interest rates are obtained from third party price providers widely used by the market. As a result of the valuation technique and the quality of inputs (observable) used for valuation, we categorize these financial liabilities in Level 2.

● Saving Accounts, Time Deposits, Borrowings from Financial Institutions, Subordinated Bonds and Other borrowings financial: The discounted cash flow model is used to obtain the present value of committed cash flows by applying a bucket approach and average adjusted discount rates that derived from both market rates for instruments with similar features and our internal transfer price process. As we use internally generated parameters and/or apply significant judgmental analysis for valuation purposes, we categorize these financial liabilities in Level 3.

194

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

45. Maturity according to their remaining Terms of Financial Assets and Liabilities:

The table below details the main financial assets and liabilities grouped in accordance with their remaining maturity, including capitals and accrued interest as of March 31, 2022 and December 31, 2021. As these are for trading and Financial instrument at fair value through other comprehensive income are included at their fair value:

	March 2022
	Demand		Up to 1 month		Over 1 month and up to 3 months		Over 3 month and up to 12 months		Subtotal up to 1 year		Over 1 year and up to 3 years		Over 3 year and up to 5 years		Over 5 years		Subtotal over 1 year		Total
Assets	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Cash and due from banks		4,882,248		—		—		—		4,882,248		—		—		—		—		4,882,248
Transactions in the course of collection		—		433,912		—		—		—		—		—		—		—		433,912
Financial assets held for trading at fair value through profit or loss
Derivative contracts financial		—		123,427		160,238		470,185		753,850		525,239		367,743		747,629		1,640,611		2,394,461
Debt financial instruments		—		482,186		—		—		482,186		—		—		—		—		482,186
Others		—		3,199		—		—		3,199		—		—		—		—		3,199
Financial assets at fair value through other comprehensive income		—		129,682		435,795		688,996		1,254,473		869,232		78,181		518,613		1,466,026		2,720,499
Derivative contracts financial for hedging purposes		—		—		—		—		—		17,768		—		74,488		92,256		92,256
Financial assets at amortized cost
Rights by resale agreements and securities lending		—		13,398		3,668		8,795		25,861		—		—		—		—		25,861
Debt financial instruments		—		—		—		—		—		15,667		404,771		426,545		846,983		846,983
Loans and advances to Banks (*)		—		2,980,882		2,148		8,735		2,991,765		—		—		—		—		2,991,765
Loans to customers, net (*)		—		3,757,793		2,862,695		5,898,562		12,519,050		7,509,345		3,996,868		10,193,313		21,699,526		34,218,576
Total financial assets		4,882,248		7,924,479		3,464,544		7,075,273		23,346,544		8,937,251		4,847,563		11,960,588		25,745,402		49,091,946

195

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

45. Maturity according to their remaining Terms of Financial Assets and Liabilities, continued:

	March 2022
	Demand			Up to 1 month		Over 1 month and up to 3 months		Over 3 month and up to 12 months		Subtotal up to 1 year			Over 1 year and up to 3 years		Over 3 year and up to 5 years		Over 5 years		Subtotal over 1 year		Total
Liabilities	MCh$			MCh$		MCh$		MCh$		MCh$			MCh$		MCh$		MCh$		MCh$		MCh$
Transactions in the course of payment		—			433,362		—		—		433,362			—		—		—		—		433,362
Financial liabilities held for trading at fair value through profit or loss
Derivative contracts financial		—			98,825		170,587		535,777		805,189			528,063		411,473		776,134		1,715,670		2,520,859
Others		—			1,381		240		104		1,725			—		—		—		—		1,725
Derivative contracts financial for hedging purposes		—			—		5,406		—		5,406			1,748		19,782		22,093		43,623		49,029
Financial liabilities at amortized cost
Current accounts and other demand deposits		16,493,474			—		—		—		16,493,474			—		—		—		—		16,493,474
Saving accounts and time deposits (**)		—			6,609,282		1,820,858		805,886		9,236,026			115,609		1,122		475		117,206		9,353,232
Obligations by repurchase agreements and securities lending		—			99,179		41		48		99,268			—		—		—		—		99,268
Borrowings from financial institutions		—			182,780		12,475		53,311		248,566			4,409,371		—		—		4,409,371		4,657,937
Debt financial instruments issued
Letters of credit		—			352		537		884		1,773			1,198		156		361		1,715		3,488
Bonds		—			144,546		338,340		632,314		1,115,200			1,947,800		2,003,060		3,362,213		7,313,073		8,428,273
Other financial obligations		—			201,382		32		80		201,494			69		—		—		69		201,563
Lease liabilities		—			2,348		4,686		17,687		24,721			26,766		17,188		22,636		66,590		91,311
Financial instruments of regulatory capital issued		—			6,072		101,588		9,643		117,303			20,809		16,588		784,399		821,796		939,099
Total financial liabilities		16,493,474			7,779,509		2,454,790		2,055,734		28,783,507			7,051,433		2,469,369		4,968,311		14,489,113		43,272,620
Mismatch		(11,611,226	)		144,970		1,009,754		5,019,539		(5,436,963	)		1,885,818		2,378,194		6,992,277		11,256,289		5,819,326

(*) These balances are presented without deduction of their respective provisions, which amount to Ch$709,830 million for loans to customers and Ch$348 million for borrowings from financial institutions.

(**) Excludes term saving accounts, which amount to Ch$448,263 million.

196

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

45. Maturity according to their remaining Terms of Financial Assets and Liabilities, continued:

	December 2021
	Demand		Up to 1 month		Over 1 month and up to 3 months		Over 3 month and up to 12 months		Subtotal up to 1 year		Over 1 year and up to 3 years		Over 3 year and up to 5 years		Over 5 years		Subtotal over 1 year		Total
Assets	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Cash and due from banks		3,713,734		—		—		—		3,713,734		—		—		—		—		3,713,734
Transactions in the course of collection		—		486,700		—		—		486,700		—		—		—		—		486,700
Financial assets held for trading at fair value through profit or loss
Derivative contracts financial		—		81,338		235,071		702,581		1,018,990		590,575		394,785		701,146		1,686,506		2,705,496
Debt financial instruments		—		3,737,942		—		—		3,737,942		—		—		—		—		3,737,942
Others		—		138,753		—		—		138,753		—		—		—		—		138,753
Financial assets at fair value through other comprehensive income		—		92,654		475,406		1,008,858		1,576,918		836,880		124,380		516,631		1,477,891		3,054,809
Derivative contracts financial for hedging purposes		—		—		—		960		960		61,035		5,681		210,126		276,842		277,802
Financial assets at amortized cost
Rights by resale agreements and securities lending		—		37,763		14,013		12,589		64,365		—		—		—		—		64,365
Debt financial instruments		—		—		—		—		—		—		413,599		426,145		839,744		839,744
Loans and advances to Banks (*)		—		1,366,332		81,053		81,457		1,528,842		990		—		—		990		1,529,832
Loans to customers, net (*)		—		3,566,966		2,492,113		6,415,681		12,474,760		7,627,207		4,002,539		10,125,611		21,755,357		34,230,117
Total fnancial assets		3,713,734		9,508,448		3,297,656		8,222,126		24,741,964		9,116,687		4,940,984		11,979,659		26,037,330		50,779,294

197

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

45. Maturity according to their remaining Terms of Financial Assets and Liabilities, continued:

	December 2021
	Demand			Up to 1 month		Over 1 month and up to 3 months			Over 3 month and up to 12 months		Subtotal up to 1 year			Over 1 year and up to 3 years		Over 3 year and up to 5 years		Over 5 years		Subtotal over 1 year		Total
Liabilities	MCh$			MCh$		MCh$			MCh$		MCh$			MCh$		MCh$		MCh$		MCh$		MCh$
Transactions in the course of payment		—			369,980		—			—		369,980			—		—		—		—		369,980
Financial liabilities held for trading at fair value through profit or loss
Derivative contracts financial		—			34,654		226,057			712,583		973,294			644,452		399,499		755,258		1,799,209		2,772,503
Others		—			2,320		4			7,286		9,610			—		——		—		—		9,610
Derivative contracts financial for hedging purposes		—			—		—			696		696			—		—		—		—		696
Financial liabilities at amortized cost
Current accounts and other demand deposits		18,249,881			—		—			—		18,249,881			—		—		—		—		18,249,881
Saving accounts and time deposits (**)		—			6,304,693		1,748,178			234,675		8,287,546			65,552		1,906		452		67,910		8,355,456
Obligations by repurchase agreements and securities lending		—			85,347					52		85,399											85,399
Borrowings from financial institutions		—			196,093		1,259,282			18,344		1,473,719			3,388,146		—		—		3,388,146		4,861,865
Debt financial instruments issued
Letters of credit		—			526		544			1,066		2,136			1,425		185		368		1,978		4,114
Bonds		—			139,876		374,532			848,924		1,363,332			1,933,284		1,784,606		3,476,059		7,193,949		8,557,281
Other financial obligations		—			249,800		25			90		249,915			90		—		—		90		250,005
Lease liabilities		—			2,312		6,586			17,502		26,400			29,056		16,449		23,765		69,270		95,670
Financial instruments of regulatory capital issued		—			4,227		1,390			112,859		118,476			19,979		15,854		763,201		799,034		917,510
Total fnancial liabilities		18,249,881			7,389,828		3,616,598			1,954,077		31,210,384			6,081,984		2,218,499		5,019,103		13,319,586		44,529,970
Mismatch		(14,536,147	)		2,118,620		(318,942	)		6,268,049		(6,468,420	)		3,034,703		2,722,485		6,960,556		12,717,744		6,249,324

(*) These balances are presented without deduction of their respective provisions, which amount to Ch$718,249 million for loans to customers and Ch$519 million for borrowings from financial institutions.

(**) Excludes term saving accounts, which amount to Ch$448,257 million.

198

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

46. Financial and Non-Financial Assets and Liabilities by Currency:

As of March 31, 2022	CLP		CLF		FX Indexation		USD		COP		GBP		EUR		CHF		JPY		CNY		Others		TOTAL
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
ASSETS
Cash and due from banks		2,570,725		—		—		2,190,687		—		8,750		40,416		30,004		13,127		18,773		9,766		4,882,248
Transactions in the course of collection		189,374		—		—		182,544		—		14,120		43,357		—		—		—		4,517		433,912
Financial assets held for trading at fair value through profit or loss
Derivative financial instruments		2,210,340		—		—		166,973		—		303		16,843		—		—		—		2		2,394,461
Debt financial instruments		360,104		122,035		—		47		—		—		—		—		—		—		—		482,186
Others		3,199		—		—		—		—		—		—		—		—		—		—		3,199
Non-trading financial assets mandatorily measured at fair value through profit or loss		—		—		—		—		—		—		—		—		—		—		—		—
Financial assets designated at fair value through profit or loss		—		—		—		—		—		—		—		—		—		—		—		—
Financial assets at fair value through other comprehensive income
Debt financial instruments		2,217,107		500,493		—		2,899		—		—		—		—		—		—		—		2,720,499
Others		—		—		—		—		—		—		—		—		—		—		—		—
Derivative contracts financial for hedging purposes		92,256		—		—		—		—		—		—		—		—		—		—		92,256
Financial assets at amortized cost
Rights by resale agreements and securities lending		25,861		—		—		—		—		—		—		—		—		—		—		25,861
Debt financial instruments		322,528		524,455		—		—		—		—		—		—		—		—		—		846,983
Loans and advances to Banks		2,800,000		—		—		190,515		—		—		902		—		—		—		—		2,991,417
Loans to customers - Commercial		9,633,685		6,677,257		84,488		2,495,634		—		855		39,129		13		4,135		2,905		—		18,938,101
Loans to customers - Residential mortgage		7,625		10,418,625		—		—		—		—		—		—		—		—		—		10,426,250
Loans to customers - Consumer		4,035,344		60,738		—		48,313		—		—		—		—		—		—		—		4,144,395
Investments in other companies		54,337		—		—		20		—		—		2		—		—		—		—		54,359
Intangible assets		72,665		—		—		—		—		—		—		—		—		—		—		72,665
Property and equipment		217,760		—		—		—		—		—		—		—		—		—		—		217,760
Right-of-use assets		95,935		111		—		—		—		—		—		—		—		—		—		96,046
Current tax assets		956		—		—		—		—		—		—		—		—		—		—		956
Deferred tax assets		445,033		—		—		—		—		—		—		—		—		—		—		445,033
Other assets		486,497		8,319		7,291		194,450		—		—		1,089		—		—		—		20		697,666
Non-current assets and disposal groups held for sale		19,661		—		—		—		—		—		—		—		—		—		—		19,661
TOTAL ASSETS		25,860,992		18,312,033		91,779		5,472,082		—		24,028		141,738		30,017		17,262		21,678		14,305		49,985,914

199

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

46. Financial and Non-Financial Assets and Liabilities by Currency, continued:

As of March 31, 2022	CLP			CLF		FX Indexation		USD			COP		GBP		EUR			CHF			JPY			CNY		Others			TOTAL
	MCh$			MCh$		MCh$		MCh$			MCh$		MCh$		MCh$			MCh$			MCh$			MCh$		MCh$			MCh$
LIABILITIES
Transactions in the course of payment		225,257			—		—		161,287			—		11,274		31,383			305			2,385			1,189		282			433,362
Financial liabilities held for trading at fair value through profit or loss
Derivative financial instruments		2,355,867			—		—		152,726			—		137		12,054			—			—			—		75			2,520,859
Others		1,621			—		—		104			—		—		—			—			—			—		—			1,725
Financial liabilities designated as at fair value through profit or loss
Derivative contracts financial for hedging purposes		49,029			—		—		—			—		—		—			—			—			—		—			49,029
Financial liabilities at amortized cost
Current accounts and other demand deposits		13,681,063			61,246		—		2,706,279			—		40		44,755			39			1			1		50			16,493,474
Saving accounts and time deposits		7,289,188			1,338,929		—		1,172,956			—		—		422			—			—			—		—			9,801,495
Obligations by repurchase agreements and securities lending		86,376			—		—		12,892			—		—		—			—			—			—		—			99,268
Borrowings from financial institutions		4,349,487			—		24		294,841			—		—		10,694			—			88			2,747		56			4,657,937
Debt financial instruments issued					6,346,296		—		719,356			—		—		87,900			336,394			226,518			—		715,297			8,431,761
Other financial obligations		132,952			185		—		68,426			—		—		—			—			—			—		—			201,563
Lease liabilities		91,311			—		—		—			—		—		—			—			—			—		—			91,311
Financial instruments of regulatory capital issued		—			939,099		—		—			—		—		—			—			—			—		—			939,099
Provisions for contingencies		113,213			—		—		—			—		—		—			—			—			—		—			113,213
Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued		116,359			—		—		—			—		—		—			—			—			—		—			116,359
Special provisions for credit risk		654,818			—		2		14,034			—		13		564			—			12			146		—			669,589
Currents tax liabilities		106,257			—		—		—			—		—		—			—			—			—		—			106,257
Deferred tax liabilities					—		—		—			—		—		—			—			—			—		—			—
Other liabilities		651,537			183,234		51		222,532			—		13		2,250			10			35			—		44			1,059,706
Liabilities included in disposal groups held for sale		—			—		—		—			—		—		—			—			—			—		—			—
TOTAL LIABILITIES		29,904,335			8,868,989		77		5,525,433			—		11,477		190,022			336,748			229,039			4,083		715,804			45,786,007
Mismatch of Financial Assets and Liabilities (*)		(3,794,003	)		9,617,848		84,464		(11,256	)		—		12,577		(46,561	)		(306,721	)		(211,730	)		17,741		(701,475	)		4,660,885

(*) This value does not consider non-financial assets and liabilities and the notional values of derivative instruments, which are disclosed at fair value.

200

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

46. Financial and Non-Financial Assets and Liabilities by Currency, continued:

As of December 31, 2021	CLP		CLF		FX Indexation		USD		COP		GBP		EUR		CHF		JPY		CNY		Others		TOTAL
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
ASSETS
Cash and due from banks		1,134,433		—		—		2,473,380		—		10,837		32,929		26,764		5,068		17,683		12,640		3,713,734
Transactions in the course of collection		156,381		—		—		253,326		—		9,781		57,887		77		9,238				10		486,700
Financial assets held for trading at fair value through profit or loss		—		—		—		—		—		—		—		—		—		—		—		—
Derivative financial instruments		2,529,244		—		—		161,547		—		294		14,391		—						20		2,705,496
Debt financial instruments		3,474,307		263,584		—		51		—		—		—		—		—		—		—		3,737,942
Others		138,740		—		—		13		—		—		—		—		—		—		—		138,753
Non-trading financial assets mandatorily measured at fair value through profit or loss		—		—		—		—		—		—		—		—		—		—		—		—
Financial assets designated at fair value through profit or loss		—		—		—		—		—		—		—		—		—		—		—		—
Financial assets at fair value through other comprehensive income
Debt financial instruments		2,590,509		460,038		—		4,262		—		—		—		—		—		—		—		3,054,809
Others		—		—		—		—		—		—		—		—		—		—		—		—
Derivative contracts financial for hedging purposes		277,802		—		—		—		—		—		—		—		—		—		—		277,802
Financial assets at amortized cost
Rights by resale agreements and securities lending		64,365		—		—		—		—		—		—		—		—		—		—		64,365
Debt financial instruments		324,555		515,189		—		—		—		—		—		—		—		—		—		839,744
Loans and advances to Banks		1,249,500		—		—		278,816		—		—		997		—		—		—		—		1,529,313
Loans to customers - Commercial		9,867,211		6,434,765		87,677		2,782,272		—		753		39,413		13		2,564		3,136		64		19,217,868
Loans to customers - Residential mortgage		6,476		10,309,445		—		—		—		—		—		—		—		—		—		10,315,921
Loans to customers - Consumer		3,863,597		62,839		—		51,643		—		—		—		—		—		—		—		3,978,079
Investments in other companies		52,732		—		—		22		—		—		3		—		—		—		—		52,757
Intangible assets		72,532		—		—		—		—		—				—		—		—		—		72,532
Property and equipment		222,320		—		—		—		—		—				—		—		—		—		222,320
Right-of-use assets		100,080		108		—		—		—		—		—		—		—		—		—		100,188
Current tax assets		846		—		—		—		—		—		—		—		—		—		—		846
Deferred tax assets		434,277		—		—		—		—		—		—		—		—		—		—		434,277
Other assets		472,425		14,763		1,113		306,456		—		30		672		—		—		—		2		795,461
Non-current assets and disposal groups held for sale		19,419		—		—		—		—		—		—		—		—		—		—		19,419
TOTAL ASSETS		27,051,751		18,060,731		88,790		6,311,788		—		21,695		146,292		26,854		16,870		20,819		12,736		51,758,326

201

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

46. Financial and Non-Financial Assets and Liabilities by Currency, continued:

As of December 31, 2021	CLP			CLF		FX Indexation		USD			COP		GBP		EUR			CHF			JPY			CNY		Others			TOTAL
	MCh$			MCh$		MCh$		MCh$			MCh$		MCh$		MCh$			MCh$			MCh$			MCh$		MCh$			MCh$
LIABILITIES
Transactions in the course of payment		193,286			—		—		101,085			—		9,874		58,186			13			5,807			—		1,729			369,980
Financial liabilities held for trading at fair value through profit or loss
Derivative financial instruments		2,578,512			—		—		182,762			—		545		10,684			—			—			—		—			2,772,503
Others		2,324			—		—		7,286			—		—		—			—			—			—		—			9,610
Financial liabilities designated as at fair value through profit or loss		—			—		—		—			—		—		—			—			—			—		—			—
Derivative contracts financial for hedging purposes		696			—		—		—			—		—		—			—			—			—		—			696
Financial liabilities at amortized cost
Current accounts and other demand deposits		14,824,044			57,181		—		3,317,788			—		54		50,755			42			1			1		15			18,249,881
Saving accounts and time deposits		6,709,197			906,019		—		1,188,028			—		—		469			—			—			—		—			8,803,713
Obligations by repurchase agreements and securities lending		85,347			—		—		52			—		—		—			—			—			—		—			85,399
Borrowings from financial institutions		4,348,460			—		11		507,081			—		11		2,677			—			412			3,136		77			4,861,865
Debt financial instruments issued		—			6,135,153		—		991,217			—		—		97,161			368,229			259,431			—		710,204			8,561,395
Other financial obligations		129,274			223		—		120,508			—		—		—			—			—			—		—			250,005
Lease liabilities		95,670			—		—		—			—		—		—			—			—			—		—			95,670
Financial instruments of regulatory capital issued		—			917,510		—		—			—		—		—			—			—			—		—			917,510
Provisions for contingencies		143,858			—		—		—			—		—		—			—			—			—		—			143,858
Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued		323,897			—		—		—			—		—		—			—			—			—		—			323,897
Special provisions for credit risk		601,574			—		—		—			—		—		—			—			—			—		—			601,574
Currents tax liabilities		113,129			—		—		—			—		—		—			—			—			—		—			113,129
Deferred tax liabilities		—			—		—		—			—		—		—			—			—			—		—			—
Other liabilities		620,108			285,683		—		393,737			—		1		2,944			1			1			1,601		43			1,304,119
Liabilities included in disposal groups held for sale		—			—		—		—			—		—		—			—			—			—		—			—
TOTAL LIABILITIES		30,769,376			8,301,769		11		6,809,544			—		10,485		222,876			368,285			265,652			4,738		712,068			47,464,804
Mismatch of Financial Assets and Liabilities (*)		(3,289,690	)		10,029,774		87,666		(410,497	)		—		11,181		(74,315	)		(341,430	)		(248,781	)		17,682		(699,291	)		5,082,299

(*) This value does not consider non-financial assets and liabilities and the notional values of derivative instruments, which are disclosed at fair value.

202

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report:

(1)  Introduction:

Banco de Chile seeks to maintain a risk profile that ensures the sustainable growth of its activity and that is aligned with its strategic objectives, in order to maximize value creation and guarantee its long-term solvency.

Our risk management policies are established in order to identify and analyze the risks faced by the Bank, set appropriate risk limits, alerts and controls, monitor risks and compliance with limits and alerts in order to carry out the necessary action plans. Through its administration policies and procedures, the Bank develops a disciplined and constructive control environment. Policies as well as risk management standards, procedures and systems are regularly reviewed.

For this, the Bank has teams with extensive experience and knowledge in each area associated with risks, ensuring comprehensive and consolidated management of the same, including the Bank and its subsidiaries.

(a) Risk Management Structure

Credit, Market and Operational Risk Management are at the all levels of the Organization, with a Corporate Governance structure that recognizes the relevance of the different risk areas that exist.

The Board of Directors of Banco de Chile is responsible for establishing the policies, the risk appetite framework, the guidelines for the development, validation and monitoring of models. In like manner, it approves the provision models and pronounces annually on the sufficient provisions. For its part, the Administration is responsible both for the establishment of standards and associated procedures as well as for the control and compliance with the disposed by the Board of Directors.

The Bank's Corporate Governance considers the active participation of the Board, either directly or through different committees made up of Directors and Senior Management. It is permanently informed of the evolution of the different risk areas, participating through its Finance, International and Financial Risk, Credit, Portfolio Risk Committee and Higher Operational Risk Committee, in which the status of credit, market and operational risks are reviewed. These committees are described in the next paragraphs.

Risk Management is developed jointly by the Wholesale Credit Risk Division, the Retail Credit Risk and Global Risk Control Division and the Cybersecurity Division, which constitute the corporate risk governance structure, who, by having highly experienced and specialized teams, together with a robust regulatory framework, allow optimal and effective management of the matters they address.

203

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(1) Introduction, continued:

(a) Risk Management Structure, continued:

The Wholesale Credit Risk Division and the Retail Credit Risk and Global Risk Control Division are responsible for credit risk in the admission, monitoring and recovery phases for the different business segments. Additionally, the Wholesale Credit Risk Division has the Market Risk Management that performs the function of measuring, limiting, controlling and reporting said risk together with the definition of valuation and management standards for the Bank's assets and liabilities.

In turn, in the Retail Credit Risk and Global Risk Control Division, the Admissions Area, among its functions, develops the regulatory framework in matters of credit risk, and the Risk Models Area, which develops the different methodologies related to credit risk. Likewise, in this Division, the monitoring and validation of models are carried out by the respective Areas that deal with these matters, ensuring the independence of the function and across the organization.

This Division also has the Operational Risk and Business Continuity Management, in charge of managing and supervising the application of the policies, rules and procedures in each of these areas within the Bank and Subsidiaries. For purposes, the Operational Risk Management is in charge of guaranteeing the identification and efficient management of operational risks and promoting a culture in terms of risks to prevent financial losses and improve the quality of our processes, as well as proposing continuous improvements to risk management, aligned with business objectives. In addition to the above, the Business Continuity Management aims to manage the strategy and control of business continuity in the operational and technological field for the Bank, maintaining alternative operation plans and controlled tests to reduce the impact of disruptive events that may affect the organization. Both in Operational Risk and in Business Continuity, its methodologies, controls and scope are applied at the Banco de Chile level and are replicated in the subsidiaries, guaranteeing their homologation to the Bank's global management model.

For its part, the Cybersecurity Division is responsible for defining, implementing and reporting the progress of the Strategic Cybersecurity Plan in line with the Bank's business strategy, one of its main focuses being to protect internal information, that of its customers and collaborators.

This Division is comprises by the Cybersecurity, Cyberdefense and Technological Risk Engineering Managements, as well as the Strategic Management and Assurance Deputy Managers. Numeral 4 of this Note describes the responsibilities of the indicated managers and Deputy Managers.

204

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(1) Introduction, continued:

(a) Risk Management Structure, continued:

(i) Finance, International and Financial Risk Committee

This committee functions are to design policies and procedures related to price and liquidity risk; design a structure of limits and alerts of financial exposures, review the proposal to the Board of Directors of the Risk Appetite Framework, and ensure a correct and timely measurement, control and reporting thereof; track exposures and financial risks; analyze impacts on the valuation of operations and / or results due to potential adverse movements in the values of market variables or liquidity narrowness; review the stress test assumptions and establish action plans where appropriate ; ensure the existence of independent units that value financial positions, and analyze the results of financial positions; review and approve the Comprehensive Risk Measurement in the area of market and liquidity risk; track the international financial exposure of liabilities; review the main credit exposures of Treasury products (derivatives, bonds); ensure that the management guidelines for price and liquidity risks in subsidiaries are consistent with those of the Bank, and be aware of the evolution of their main financial risks.

The Finance, International and Financial Risk Committee, session monthly and is comprises by the Chairman of the Board, four Directors or Advisors to the Board, General Manager, Financial Management and Control Division Manager, Wholesale Credit Risk Division Manager, Treasury Division Manager and Market Risk Area Manager. If deemed appropriate, the Committee may invite certain persons to participate, on a permanent or occasional basis, in one or more sessions.

(ii) Credit Committees

The credit approval process is done mainly through various credit committees, which are composed of qualified professionals and with the sufficient attributions to take decisions required.

Each committee is responsible for defining the terms and conditions under which the Bank accepts counterparty risks and the Wholesale Credit Risk and Retail Credit Risk Divisions and Global Risk Control participate independently and autonomously of the commercial areas. They are constituted according to the commercial segments and the amounts to approve and have different meeting periodicities.

Within the risk management structure of the Bank, the maximum approval instance is the Credit Committee of Directors. Sessions weekly and is comprises by the Chairman of the Board, regular and alternate directors, General Manager and the Wholesale Credit Risk Division Manager. This Committee is responsible for knowing, analyzing and resolving all credit operations associated with clients and / or economic groups whose total amount subject for approval is equal to or greater than UF 750,000. It also has to know, analyze and resolve all those credit operations that, in accordance with the established in the Bank's internal rules, must be approved by this Committee, with the exception of the special powers delegated by the Board to the Administration.

205

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(1) Introduction, continued:

(a) Risk Management Structure, continued:

(iii) Portfolio Risk Committee

The main function is to know the evolution of the composition, concentration and risk of the loan portfolio of the different banks and segments, covering the complete cycle of credit risk management with the processes of admission, monitoring and recovery of the credits granted. Review the main debtors and the different risk indicators of the portfolio, proposing differentiated management strategies. Approves and proposes to the Board the different credit risk policies. It is responsible for reviewing, approving and recommending to the Board of Directors, for its final approval, the different portfolio evaluation methodologies and provision models. It is also responsible for reviewing and analyzing the adequacy of provisions for the different banks and segments. Also to review the guidelines and methodological advances for the development of internal models of credit risk, together with monitoring the concentration by sectors and segments according to the sectoral limits policy. Reviews and approves both the Comprehensive Risk Measurement (CRM) and the Credit Risk Appetite Framework (RAF) in the area of credit risk, ensuring their due approval by the Board of Directors. Defines the metrics that are part of the Risk Appetite Framework and their acceptable levels. Verifies the consistency of the credit risk policies of the subsidiaries in relation to those of the Bank, controls them globally and becomes aware of the credit risk management carried out by the subsidiaries. In general, know and analyze any relevant aspect in matters of Credit Risk in the portfolio of Banco de Chile.

The Portfolio Risk Committee meets monthly and is comprises by the Chairman of the Board, two regular and alternate Directors, General Manager, Wholesale Credit Risk Division Manager, Retail Credit Risk Division Manager and Global Risk Control, Commercial Division Manager, Risk Management and Information Control Manager.

(iv) Technical Committee for the Supervision of Internal Models

The main function of the Committee is to provide a framework of methodological guidelines for the Development, Follow-up and Documentation of the mathematical models that are used in the massive segments for credit risk management, such as Management Models (Admission, Follow-up, Collection and Rating, among others) and the regulatory models (Capital and Provisions, specific for credit risk or additional, under local or international regulations), among others. The Committee may exceptionally evaluate alternative methodologies, other than those related to credit risk, at the request of its Chairman.

The Committee has the functions of defining the main criteria and guidelines to be used for the construction of new models; Review and approve methodologies associated with non-regulatory models (eg admission, collection), which must be submitted for the consideration of the Portfolio Risk Committee, so that it can rule on their ratification; In the case of regulatory models, the Technical Committee is limited to their review, leaving approval in the hands of the Portfolio Risk Committee and the Board of Directors. Establish minimum standards to monitor the quality of internal models. Establish the minimum standards to document the different areas related to the development, construction, monitoring, and operation of the models.

206

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(1) Introduction, continued:

(a) Risk Management Structure, continued:

(iv) Technical Committee for the Supervision of Internal Models, continued:

In terms of its composition, it is comprises by the manager of the Retail Credit Risk and Global Risk Control Division, the managers of the Risk Monitoring, Studies and Management, People Business Development, Risk Models Areas, by the Deputy Managers of Retail Monitoring and Models, of Big Data and Regulatory Systems, of Validation of Risk Models, of Pre-approved Admission, of Regulatory Models, of Management and Infrastructure Models and of the Head of the Personnel Risk Department. The Committee meets monthly.

(v) Operational Risk Higher Committee

It is enforceable and is empowered to sanction the necessary changes in the processes, procedures, controls and computer systems that support the operation of the Bank, in order to mitigate its operational risks, ensuring that the different areas properly manage and control these risks. Additionally, it must be aware of the operational risk management carried out by the subsidiary companies and reported in their respective Operational Risk Committee, including the issues of Information Security and Business Continuity. Likewise, know the corrective measures adopted in the event of deviations or contingency scenarios that could affect the subsidiaries and/or the Bank in this type of risk.

The Operational Risk Higher Committee is comprises by the Chairman of the Board, three Directors, regular or alternate, appointed by the Bank's Board of Directors, General Manager, Retail Credit Risk Divisions and Global Risk Control Manager, Operations and Technology Division Manager, Commercial Division Manager, Cybersecurity Division Manager, Marketing and Digital Banking Division Manager and Operational Risk Manager. The Committee meets monthly and can be summoned in an extraordinary manner.

(vi) Operational Risk Committee

It is empowered to trigger the necessary changes in the processes, procedures, controls and information systems that support the operation of Banco de Chile, in order to mitigate its operational risks, ensuring that the different areas properly manage and control these risks.

The Operational Risk Committee is comprises by the Retail Credit Risk Divisions and Global Risk Control Manager, Financial Management and Control Division Manager, Cybersecurity Division Manager, Operational Risk Manager, Technological Risk Manager, Business Continuity Manager, Operations Area Manager, Planning and PMO Manager, Customer Area Manager, GG.EE. Group Manager, Customer Service Manager, Chief Attorney and Operational Risk Management Deputy Manager. The Committee session monthly and can be summoned extraordinarily.

207

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(1) Introduction, continued:

(a) Risk Management Structure, continued:

(vii)  Capital Management Committee

This committee meets quarterly and is comprised by two members of the Board of Directors; the General Manager; the Financial Management and Control Division Manager; the Wholesale Credit Risk Division Manager; the Retail Credit Risk and Global Risk Control Division Manager; and the Treasury and Capital Financial Control Area Manager. The Presidency of the Committee is in charge of a member of the board of directors. In case of absence of the Chairman, he is subrogated by the other member of the board of directors.

The Capital Management Committee's main function is to monitor and supervise the capital management of the Bank and its subsidiaries, and ensure its compliance in accordance with the Corporate Capital Management Policy and related regulations, being responsible for: (i) review and update the Corporate Capital Management Policy, at least annually, (ii) review and update the complementary documentation associated with capital management, at least annually, (iii) ensure that the Bank has sufficient capital to meet both its current needs and those arising from stress scenarios, over a three-year horizon, (iv) review and validate, on an annual basis, the Capital Plan and propose an Internal Total or Regulatory Capital Objective for approval by the Board of Directors, (v) review the results of the Stress Tests, the Comprehensive Risk Measurement (MIR), the Risk Appetite Framework ("MAR") and the Self-Assessment Report of the Total or Regulatory Capital, (vi) periodically monitor the different metrics defined for the Bank's capital management, as well as the variables that affect those parameters, (vii) keep the Board of Directors informed of compliance with the capital plan, the Business and Capital MAR, as well as the evolution of the variables that affect capital management, (viii) propose the activation and supervise the execution of the Contingency Plans associated with possible breaches of the Business and Capital MAR, prior to its approval by the Board of Directors, as well as annually review updates to them, (ix) review the results of the validation of the models associated with capital management and quarterly monitor the status of the observations generated from the validations, (x) be aware of the results of the internal control evaluation of the Capital Self-Assessment Process, prior to the issuance of the Total or Regulatory Capital Self-Assessment Report.

(b) Internal Audit

The risk management processes of the entire Bank are permanently audited by the Internal Audit Area, which examines the sufficiency of the procedures and their compliance. Internal Audit discusses the results of all evaluations with the administration and reports its findings and recommendations to the Board of Directors through the Audit Committee.

208

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_____________

47. Risk Management and Report, continued:

(1) Introduction, continued:

(c) Measurement Methodology

Regarding to Credit Risk, provision levels and portfolio expenses are the basic measures for determining the credit quality of our portfolio.

Banco de Chile permanently evaluates its loan portfolio, timely recognizing the associated level of risk of the loan portfolio. For this, there are specific guidelines for the development of provision models under local regulations in accordance with the instructions issued by the CMF, as well as under IFRS 9 and stress tests; these guidelines and the models developed are approved by the Board of Directors.

As a result of this evaluation, on both individual and group portfolios, the level of provisions that the bank should constitute is determined, in the event of customers payment default.

The individual evaluation mainly applies to the Bank's portfolio of legal persons that, due to their size, complexity or indebtedness, requires a more detailed level of knowledge and a case-by-case analysis. Each debtor is assigned one of the 16 risk categories defined by the CMF, in order to establish the provisions in a timely and appropriate manner. The review of the portfolio risk classifications is carried out permanently considering the financial situation, payment behavior and the environment of each client.

The group evaluation mainly applies to the portfolio of natural persons and smaller companies. These assessments are carried out monthly through statistical models that allow estimating the level of provisions necessary to cover the portfolio risk. The consistency analysis of the models is carried out through an independent validation of the unit that develops them and, subsequently, through the analysis of retrospective tests that allow to compare the real losses with the expected ones.

During the year 2021, the Bank maintained prudential adjustments to the provisioning models made in the previous year, in particular to its Probability of Default (PD) parameters, following a conservative and prospective approach in this regard. Also, in December 2021 a new update of the parameters of the internal models of provisions was carried out.

In order to validate the quality and robustness of the risk assessment processes, the Bank annually performs a test of the sufficiency of provisions for the total loan portfolio, thus verifying that the provisions established are sufficient to cover the losses that could derive from the credit operations granted. The result of this analysis is presented to the Board of Directors, who manifests itself on the sufficiency of the provisions in each fiscal year.

209

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(1) Introduction, continued:

(c) Measurement Methodology, continued:

Banco de Chile has additional provisions with the objective of protecting itself from the risk of unpredictable economic fluctuations that may affect the macroeconomic environment or the situation of a specific economic sector. At least once a year, the amount of additional provisions to be constituted or released is annually proposed to the Portfolio Risk Committee and subsequently to the Board of Directors for approval.

In this context, during 2021 and 2022 the Bank has constituted additional provisions taking into account various prospective analyzes regarding the impacts derived from the pandemic, among them: effects of the measures adopted by local and global health authorities for its mitigation, expectations of deterioration of the cycle and local macroeconomic projections of variables such as unemployment and economic growth.

The monitoring and control of risks are carried out mainly based on limits established by the Board of Directors. These limits reflect the Bank's business and market strategy, as well as the level of risk that it is willing to accept, with additional emphasis on the selected industries.

The Bank develops its capital planning process in an integrated manner with its strategic planning, in line with the risks inherent to its activity, the economic and competitive environment, its business strategy, corporate values, as well as its governance, management and risk control. As part of the capital planning process and, in line with what is required by the regulator, it has incorporated the new calculations of Risk-Weighted Assets and stress tests in the dimensions of credit, market and operational risk, as well as the Comprehensive Measurement of financial and non-financial risks.

Along with the above, during 2021, the Bank updated its Risk Appetite Framework, through which it is possible to identify, evaluate, measure, mitigate and control proactively and in advance all relevant risks that could materialize in the normal course of their business. To this end, the Bank uses different management tools and defines an adequate structure of alerts and limits, which are part of said Framework, which allow it to constantly monitor the performance of different indicators and implement timely corrective actions, in the event that are required. The result of these activities is part of the annual self-assessment report of effective equity that is reported to the CMF.

210

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(2) Credit Risk:

Credit risk considers the likelihood that the counterparty in the credit operation will not be able to fulfill its contractual obligation due to incapacity or financial insolvency, and this leads to a potential credit loss.

The Bank seeks an adequate risk-return relation and an appropriate balance of the risks assumed, through a permanent credit risk management considering the processes of admission, monitoring and recovery of the loans granted. Likewise, it continuously manages risk knowledge, from a comprehensive approach, in order to contribute to the business and anticipate threats that could damage the solvency, quality of the portfolio, permeating a unique risk culture towards the Corporation.

The foregoing has the permanent challenge of establishing a risk management framework for the different business segments served by the Bank, responding to regulatory requirements and commercial dynamism, being part of the digital transformation, and contributing from the perspective of risks to the various businesses addressed, through a vision of the portfolio that allows managing, resolving and controlling the business approval process efficiently and proactively.

In the business segments, the application of additional management processes is taken into consideration, to the extent required, for those financing requests that that will have a greater exposure to environmental and/or social risks.

In this respect, the Bank integrates the socio-environmental criteria in its evaluations for the granting of financing destined to the development of projects, whether national or regional and that can generate an impact of this type, where they are executed. For the financing of projects, they must have the corresponding permits, authorizations, patents and studies, according to the impact they generate. In addition, the Bank has specialized units for serving large clients, through which the financing of project development is concentrated, including those of Public Works concessions that contemplate the construction of infrastructure, mining, electrical, real estate developments that can generate an environmental impact.

Credit policies and processes materialize in the following management principles, which are addressed with a specialized approach according to the characteristics of the different markets and segments served, recognizing the singularities of each one of them:

1. Apply a rigorous evaluation in the admission process, based on established credit policies, standards and procedures, together with the availability of sufficient and accurate information. Thus, it corresponds to analyze the generation of flows and solvency of the client to meet their payment commitments and, when the characteristics of the operation merit it, must constitute adequate collateral that allow mitigating the risk incurred with the client.

2. Have permanent and robust portfolio tracking processes, through systems that alert both the potential signs of impairment of clients, with respect to the conditions of origin. That they also alert possible business opportunities with those that present a better payments quality and behavior.

211

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_____________

47. Risk Management and Report, continued:

(2) Credit Risk, continued:

3. To develop credit risk modeling guidelines, both in regulatory aspects (provisions, capital, stress tests) and management (admission, management, collection), for efficient decision-making at different stages of the credit process.

4. Have a collection structure with timely, agile and effective processes that allow management to be carried out in accordance with the different types of clients and the types of breaches that arise, always in strict adherence to the regulatory framework and the Bank's reputational definitions.

5. Maintain an efficient administration in work teams organization, tools and availability of information that allow an optimal credit risk management.

Based on these management principles, the credit risk divisions contribute to the business and anticipate threats that may affect the solvency and quality of the portfolio. In particular, during the years 2021 and 2022 the solidity of these principles and the role of credit risk have made it possible to respond adequately to the challenges derived from the pandemic, providing timely responses to clients while maintaining the solid fundamentals that characterize the Bank's portfolio in its different segments and products.

Within the framework of risk management, during 2022, a permanent and focused monitoring of the portfolios and the results of the temporary measures implemented in the context of the pandemic, such as rescheduling, Fogape Covid, Fogape Reactivation and deferment of mortgage loan payments.

For the development and strengthening of a risk culture in the Bank, during 2021 the training and education of executives was promoted, diffusing risk knowledge from a comprehensive perspective. It is with this in matters of environmental and social risks, training has been carried out for commercial and risk company executives to further ensure that these factors and their impacts are taken into account in the credit analysis and evaluation processes. Specifically, employees from various areas were trained in the Socio-environmental Risk Analysis course taught by the United Nations Environment Programme Finance Initiative (UNEP FI).

212

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(2) Credit Risk, continued:

(a) Retail Segments:

In these segments, admission management is carried out mainly through a risk evaluation that uses scoring tools and an adequate credit attribution model to approve each operation. These evaluations take into consideration the level of indebtedness, payment capacity and the maximum acceptable exposure for the client.

For these segments, the Bank's risk functions are segregated and distributed in the following areas:

− Retail Admission and Regulatory Area, performs the evaluation of operations and clients, with specialization by products and segments. Maintains a framework of policies and standards that ensure the quality of the portfolio according to the desired risk, defining guidelines for the admission of clients and their respective parameterization in the evaluation systems. These definitions are released to commercial and risk areas through programs and continuous training, and their application is monitored through credit review processes.

− Model Area, is responsible for developing, maintaining and updating credit risk models, whether for regulatory or management uses, in accordance with local and international regulations, determining the most appropriate functional specifications and statistical techniques for the development of the required models. These models are validated by the Model Validation Area and presented to the corresponding government bodies, such as the "Technical Committee for the Supervision and Development of Internal Models", the Portfolio Risk Committee or the Board of Directors, as appropriate.

− Retail Tracking and Models Area, is in charge of measuring the behavior of portfolios especially through the monitoring of the main indicators of the aggregate portfolio and the analysis of layers, reported in management reports, generating relevant information for decision-making in different instances defined. Also, special follow-ups are generated according to relevant events in the environment.

This Area also ensures that the different strategies executed meet the risk quality objectives that determined their implementation. Additionally, through the model monitoring function, they monitor the risk models, ensuring compliance with the defined standards to ensure their predictive and discriminating power, identifying the possible associated risks.

− Models Validation Area, is responsible for performs an independent review of the credit and treasury risk models, both in the construction and implementation stages. It considers the validation of compliance with the guidelines established by the Board of Directors, addressing aspects such as governance, data quality, modeling and implementation techniques, and documentation. The results of the review are presented and placed in consideration of the respective Committees, as appropriate.

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_____________

47. Risk Management and Report, continued:

(2) Credit Risk, continued:

(a) Retail Segments, continued:

− Collection Area performs a cross-collection management in the Bank and centralizes recovery management in retail segments through Socofin, Bank's subsidiary. Define refinancing criteria and payment agreements with customers, maintaining an adequate risk-return ratio, together with the incorporation of robust tools for a differentiated collection management according to the institutional policies.

(b) Wholesale Segments:

In these segments, admission management is carried out through an individual evaluation of the client and the relationship of the rest of the group with the Bank is also considered if it belongs to a group of companies. This individual evaluation - and group if applicable - considers, among others, generation capacity, financial capacity with emphasis on equity solvency, exposure levels, industry variables, evaluation of partners and management, and aspects of the operation such as financing structure, term, products and possible collaterals.

The indicated evaluation is supported by a rating model that allows greater homogeneity in the evaluation of the client and his group. This evaluation also includes specialized areas in some segments that by their nature require expert knowledge, such as real estate, construction, agriculture, financial, international, among others.

In a centralized manner, a permanent monitoring of the portfolio is carried at the individual level off business segments and economic sectors, based on periodically updated information from both the client and the industry. Through this process, alerts are generated that ensure the correct and timely recognition of the risk of the individual portfolio and the special conditions established in the admission stage are monitored, such as controls of financial covenants, coverage of certain collaterals and conditions imposed at the time of approval.

Additionally, within the Admission areas, joint monitoring tasks are carried out that allow monitoring the development of operations from their gestation to their recovery, with the aim of ensuring the correct and timely identification of portfolio risks, and to manage in advance those cases with higher risk levels.

Upon detection of clients that show signs of impairment or default with any condition, the commercial area to which the client belongs, together with the Wholesale Credit Risk Division, establish action plans for their regularization. In those more complex cases where specialized management is required, the Special Assets Management area, belonging to the Wholesale Credit Risk Division, is directly in charge of collection management, establishing action plans and negotiations based on the particular characteristics of each client.

214

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(2) Credit Risk, continued:

(c) Portfolio Concentration:

The maximum exposure to credit risk, by client or counterparty, without taking into account guarantees or other credit enhancements as of March 31, 2022 and December 31, 2021, does not exceed 10% of the Bank's effective equity.

The following tables show credit risk exposure per balance sheet item, including derivatives, detailed by both geographic region and industry sector as of March 31, 2022:

	Chile		United States		Brazil		Others		Total
	MCh$		MCh$		MCh$		MCh$		MCh$
Financial Assets
Cash and Due from Banks		3,708,799		1,125,418		—		48,031		4,882,248
Financial assets held for trading at fair value through profit or loss
Derivative contracts Financial
Forwards		280,693		21,619		—		137,189		439,501
Swaps		807,058		143,068		—		1,001,276		1,951,402
Call Options		1,931		—		—		—		1,931
Put Options		1,592		—		—		35		1,627
Futures		—		—		—		—
Subtotal		1,091,274		164,687		—		1,138,500		2,394,461
Debt Financial Instruments
From the Chilean Government and Central Bank		270,810		—		—		—		270,810
Other debt financial instruments issued in Chile		211,376		—		—		—		211,376
Financial debt instruments issued Abroad		—		—		—		—		—
Subtotal		482,186		—		—		—		482,186
Others Financial Instruments		3,199		—		—		—		3,199
Subtotal		3,199		—		—		—		3,199
Financial Assets at fair value through other comprehensive income
Debt Financial Instruments
From the Chilean Government and Central Bank		2,053,251		—		—		—		2,053,251
Other debt financial instruments issued in Chile		667,248		—		—		—		667,248
Financial debt instruments issued Abroad		—		—		—		—		—
Subtotal		2,720,499		—		—		—		2,720,499
Derivative contracts financial for hedging purposes
Forwards		—		—		—		—		—
Swaps		4,921		36,569		—		50,766		92,256
Call Options		—		—		—		—		—
Put Options		—		—		—		—		—
Futures		—		—		—		—		—
Subtotal		4,921		36,569		—		50,766		92,256
Financial assets at amortized cost
Rights by resale agreements and securities lending		25,861		—		—		—		25,861
Debt Financial Instruments
From the Chilean Government and Central Bank		846,983		—		—		—		846,983
Subtotal		846,983		—		—		—		846,983
Loans and advances to Banks
Central Bank of Chile		2,800,000		—		—		—		2,800,000
Domestic banks		—		—		—		—		—
Foreign banks		—		—		122,259		69,506		191,765
Subtotal		2,800,000		—		122,259		69,506		2,991,765
Loans to Customers, Net
Commercial loans		19,317,902		—		—		31,548		19,349,450
Residential mortgage loans		10,454,944		—		—		—		10,454,944
Consumer loans		4,414,182		—		—		—		4,414,182
Subtotal		34,187,028		—		—		31,548		34,218,576

215

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(2) Credit Risk, continued:

	Central Bank of Chile		Government		Retail (Individuals		Financial Services		Trade		Manufacturing		Mining		Electricity, Gas  and Water		Agriculture and Livestock		Fishing		Transportation and Telecom		Construction		Services		Others		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Cash and Due from Banks	2,536,416		—		—-		2,345,832		—		—		—		—		—		—		—		—		—		—		4,882,248
Financial Assets held for trading at fair value through profit or loss
Derivative contracts Financial
Forwards		—		—		—		269,051		8,917		11,903		3,070		7,229		1,560		7		67		186		134,069		3,442		439,501
Swaps		—		—		—		1,846,267		83		483		—		1,600		8,720		2,597		7,384		2,478		13,218		68,572		1,951,402
Call Options		—		—		—		494		316		4		—		—		20		21		—		954		122		—		1,931
Put Options		—		—		—		380		859		90		—		—		—		—		—		293		5		—		1,627
Futures		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		2,116,192		10,175		12,480		3,070		8,829		10,300		2,625		7,451		3,911		147,414		72,014		2,394,461
Debt Financial Instruments
From the Chilean Government and Central Bank		222,114		48,696		—		—		—		—		—		—		—		—		—		—		—		—		270,810
Other debt financial instruments issued in Chile		—		—		—		211,376		—		—		—		—		—		—		—		—		—		—		211,376
Financial debt instruments issued Abroad		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		222,114		48,696		—		211,376		—		—		—		—		—		—		—		—		—		—		482,186
Others Financial Instruments		—		—		—		3,199		—		—		—		—		—		—		—		—		—		—		3,199
Subtotal		—		—		—		3,199		—		—		—		—		—		—		—		—		—		—		3,199
Financial Assets at fair value through Other Comprehensive Income
Debt Financial Instruments
From the Chilean Government and Central Bank		—		2,053,251		—		—		—		—		—		—		—		—		—		—		—		—		2,053,251
Other debt financial instruments issued in Chile		—		—		—		653,219		—		—		—		5,384		—		—		5,363		—		—		3,282		667,248
Financial debt instruments issued Abroad		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		2,053,251		—		653,219		—		—		—		5,384		—		—		5,363		—		—		3,282		2,720,499
Derivative contracts financial for hedging purposes
Forwards		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Swaps		—		—		—		92,256		—		—		—		—		—		—		—		—		—		—		92,256
Call Options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Put Options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Futures		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		92,256		—		—		—		—		—		—		—		—		—		—		92,256
Financial assets at amortized cost (*)
Rights by resale agreements		—		—		82		18,045		62		—		—		—		—		—		—		15		—		7,657		25,861
Debt financial instruments
From the Chilean Government and Central Bank		—		846,983		—		—		—		—		—		—		—		—		—		—		—		—		846,983
Subtotal		—		846,983		—		—		—		—		—		—		—		—		—		—		—		—		846,983
Loans and advances to Banks
Central Bank of Chile		2,800,000		—		—		—		—		—		—		—		—		—		—		—		—		—		2,800,000
Domestic banks		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Foreign banks		—		—		—		191,765		—		—		—		—		—		—		—		—		—		—		191,765
Subtotal		2,800,000		—		—		191,765		—		—		—		—		—		—		—		—		—		—		2,991,765

(*) Economic activity of Loans and accounts receivable from customers disclosed in Note No. 13 g).

216

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(2) Credit Risk, continued:

The following tables show credit risk exposure per balance sheet item, including derivatives, detailed by both geographic region and industry sector as of December 31, 2021:

	Chile		United States		Brazil		Others		Total
	MCh$		MCh$		MCh$		MCh$		MCh$
Financial Assets
Cash and Due from Banks		2,748,930		897,881		8		66,915		3,713,734
Financial assets held for trading at fair value through profit or loss
Derivative contracts Financial
Forwards		585,463		90,461		—		66,621		742,545
Swaps		1,113,136		256,829		—		588,278		1,958,243
Call Options		4,509		—		—		—		4,509
Put Options		199		—		—		—		199
Futures		—		—		—		—		—
Subtotal		1,703,307		347,290		—		654,899		2,705,496
Debt Financial Instruments
From the Chilean Government and Central Bank		3,472,122		—		—		—		3,472,122
Other debt financial instruments issued in Chile		265,820		—		—		—		265,820
Financial debt instruments issued Abroad		—		—		—		—		—
Subtotal		3,737,942		—		—		—		3,737,942
Others Financial Instruments		138,753		—		—		—		138,753
Subtotal		138,753		—		—		—		138,753
Financial Assets at fair value through Other Comprehensive Income
Debt Financial Instruments
From the Chilean Government and Central Bank		2,488,850		—		—		—		2,488,850
Other debt financial instruments issued in Chile		565,959		—		—		—		565,959
Financial debt instruments issued Abroad		—		—		—		—		—
Subtotal		3,054,809		—		—		—		3,054,809
Derivative contracts financial for hedging purposes
Forwards		—		—		—		—		—
Swaps		16,374		79,904		—		181,524		277,802
Call Options		—		—		—		—		—
Put Options		—		—		—		—		—
Futures		—		—		—		—		—
Subtotal		16,374		79,904		—		181,524		277,802
Financial assets at amortized cost
Rights by resale agreements and securities lending		64,365		—		—		—		64,365
Debt Financial Instruments
From the Chilean Government and Central Bank		839,744		—		—		—		839,744
Subtotal		839,744		—		—		—		839,744
Loans and advances to Banks
Central Bank of Chile		1,090,000		—		—		—		1,090,000
Domestic banks		160,018		—		—		—		160,018
Foreign banks		—		—		141,249		138,565		279,814
Subtotal		1,250,018		—		141,249		138,565		1,529,832
Loans to Customers, Net
Commercial loans		19,621,038		—		—		13,718		19,634,756
Residential mortgage loans		10,346,652		—		—		—		10,346,652
Consumer loans		4,248,709		—		—		—		4,248,709
Subtotal		34,216,399		—		—		13,718		34,230,117

217

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(2) Credit Risk, continued:

	Central Bank of Chile		Government		Retail (Individuals		Financial Services		Trade		Manufacturing		Mining		Electricity, Gas  and Water		Agriculture and Livestock		Fishing		Transportation and Telecom		Construction		Services		Others		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Cash and Due from Banks		1,545,472		—		—-		2,168,262		—		—		—		—		—		—		—		—		—		—		3,713,734
Financial Assets held for trading at fair value through profit or loss
Derivative contracts Financial
Forwards		—		—		—		521,735		3,685		18,806		1,343		12,623		4,873		—		—		247		—		179,233		742,545
Swaps		—		—		—		1,870,975		342		3,444		2		8,129		17,815		5,409		11,516		3,098		—		37,513		1,958,243
Call Options		—		—		—		251		3,595		474		—		—		80		109		—		—		—		—		4,509
Put Options		—		—		—		21		178		—		—		—		—		—		—		—		—		—		199
Futures		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		2,392,982		7,800		22,724		1,345		20,752		22,768		5,518		11,516		3,345		—		216,746		2,705,496
Debt Financial Instruments
From the Chilean Government and Central Bank		3,287,111		162,433		—		22,578		—		—		—		—		—		—		—		—		—		—		3,472,122
Other debt financial instruments issued in Chile		—		—		—		265,820		—		—		—		—		—		—		—		—		—		—		265,820
Financial debt instruments issued Abroad		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		3,287,111		162,433		—		288,398		—		—		—		—		—		—		—		—		—		—		3,737,942
Others Financial Instruments		—		—		—		138,753		—		—		—		—		—		—		—		—		—		—		138,753
Subtotal		—		—		—		138,753		—		—		—		—		—		—		—		—		—		—		138,753
Financial Assets at fair value through Other Comprehensive Income
Debt Financial Instruments
From the Chilean Government and Central Bank		102		2,488,748		—		—		—		—		—		—		—		—		—		—		—		—		2,488,850
Other debt financial instruments issued in Chile		—		—		—		537,036		—		—		—		5,254		—		—		5,321		4,609		—		13,739		565,959
Financial debt instruments issued Abroad		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		102		2,488,748		—		537,036		—		—		—		5,254		—		—		5,321		4,609		—		13,739		3,054,809
Derivative contracts financial for hedging purposes
Forwards		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Swaps		—		—		—		277,802		—		—		—		—		—		—		—		—		—		—		277,802
Call Options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Put Options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Futures		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		277,802		—		—		—		—		—		—		—		—		—		—		277,802
Financial assets at amortized cost (*)
Rights by resale agreements		—		—		232		62,030		1,327		—		—		—		—		—		—		13		—		763		64,365
Debt financial instruments
From the Chilean Government and Central Bank		—		839,744		—		—		—		—		—		—		—		—		—		—		—		—		839,744
Subtotal		—		839,744		—		—		—		—		—		—		—		—		—		—		—		—		839,744
Loans and advances to Banks
Central Bank of Chile		1,090,000		—		—		—		—		—		—		—		—		—		—		—		—		—		1,090,000
Domestic banks		—		—		—		160,018		—		—		—		—		—		—		—		—		—		—		160,018
Foreign banks		—		—		—		279,814		—		—		—		—		—		—		—		—		—		—		279,814
Subtotal		1,090,000		—		—		439,832		—		—		—		—		—		—		—		—		—		—		1,529,832

(*) Economic activity of Loans and accounts receivable from customers disclosed in Note No. 13 g).

218

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(2) Credit Risk, continued:

(d) Collaterals and Other Credit Enhancements:

The amount and type of collateral required depends on the counterparty’s credit risk assessment.

The Bank has guidelines regarding the acceptability of types of collateral and valuation parameters.

The main types of collateral obtained are:

● For commercial loans: Residential and non-residential real estate, liens and inventory.

● For retail loans: Mortgages loans on residential property.

The Bank also obtains collateral from parent companies for loans granted to their subsidiaries.

Management makes sure its collateral is acceptable according to both external standards and internal policies guidelines and parameters. The Bank has approximately 242,860 collateral assets as of March 31, 2022 (240,870 in December 2021), the majority of which consist of real estate. The following table contains guarantees value:

			Guarantee
March 2022	Loans		Mortgages		Pledges		Securities		Warrants		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Corporate Lending		14,417,442		3,564,953		150,539		595,098		10,334		4,320,924
Small Business Lending		4,932,008		3,287,794		26,885		15,485		—		3,330,164
Consumer Lending		4,414,182		349,706		653		2,877		—		353,236
Mortgage Lending		10,454,944		9,258,504		109		181		—		9,258,794
Total		34,218,576		16,460,957		178,186		613,641		10,334		17,263,118

			Guarantee
December 2021	Loans		Mortgages		Pledges		Securities		Warrants		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Corporate Lending		14,599,427		3,392,760		149,892		508,711		4,451		4,055,814
Small Business Lending		5,035,329		3,124,172		26,310		12,898		—		3,163,380
Consumer Lending		4,248,709		317,215		622		2,498		—		320,335
Mortgage Lending		10,346,652		8,730,747		96		196		—		8,731,039
Total		34,230,117		15,564,894		176,920		524,303		4,451		16,270,568

219

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(2) Credit Risk, continued:

(d) Collaterals and Other Credit Enhancements, continued:

The Bank also uses mitigating tactics for credit risk on derivative transactions. To date, the following mitigating tactics are used:

● Accelerating transactions and net payment using market values at the date of default of one of the parties.

● Option for both parties to terminate early any transactions with a counterparty at a given date, using market values as of the respective date.

● Margins established with time deposits by customers who have FX forwards with subsidiary Banchile Corredores de Bolsa S.A.

The value of the guarantees that the Bank maintains related to the loans individually classified as impaired as of March 31, 2021 and December 31, 2021 amounted Ch$93,195 million and Ch$28,189 million, respectively.

The value guarantees related to past due loans but no impaired as of March 31, 2021 and December 31, 2021 amounted Ch$221,128 million and Ch$177,169 million respectively.

(e) Credit Quality by Asset Class:

The Bank determines the credit quality of financial assets using internal credit ratings. The rating process is linked to the Bank’s approval and monitoring processes and is carried out in accordance with risk categories established by current standards. Credit quality is continuously updated based on any favorable or unfavorable developments to customers or their environments, considering aspects such as commercial and payment behavior as well as financial information.

The Bank also carries out reviews focused on companies that participate in specific economic sectors, which are affected either by macroeconomic variables or variables of the sector. In this way, it is possible to timely establish the necessary and sufficient level of provisions to cover the losses due to the eventual non-recoverability of the credits granted.

The following tables shows credit quality by asset class for Consolidated Statements of Financial Position sheet items, based on the Bank’s credit rating system.

As of March 31, 2022:

	Individual Portfolio						Group Portfolio
	Normal		Substandard		Non-complying		Normal		Non-complying		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Financial Assets
Loans and advances to banks
Central Bank of Chile		2,800,000		—		—		—		—		2,800,000
Domestic banks		—		—		—		—		—		—
Foreign banks		191,765		—		—		—		—		191,765
Subtotal		2,991,765		—		—		—		—		2,991,765
Loans to customers (does not include allowances for loan losses)
Commercial loans		14,042,978		204,090		163,596		4,684,065		254,721		19,349,450
Residential mortgage loans		—		—		—		10,209,501		245,443		10,454,944
Consumer loans		—		—		—		4,230,130		184,052		4,414,182
Subtotal		14,042,978		204,090		163,596		19,123,696		684,216		34,218,576

220

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(2) Credit Risk, continued:

(e) Credit Quality by Asset Class, continued:

As of December 31, 2021:

	Individual Portfolio						Group Portfolio
	Normal		Substandard		Non-complying		Normal		Non-complying		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Loans and advances to banks
Central Bank of Chile		1,090,000		—		—		—		—		1,090,000
Domestic banks		160,018		—		—		—		—		160,018
Foreign banks		279,814		—		—		—		—		279,814
Subtotal		1,529,832		—		—		—		—		1,529,832
Loans to customers (before allowances for loan losses)
Commercial loans		14,232,545		197,665		162,962		4,770,314		271,270		19,634,756
Residential mortgage loans		—		—		—		10,062,294		284,358		10,346,652
Consumer loans		—		—		—		4,033,418		215,291		4,248,709
Subtotal		14,232,545		197,665		162,962		18,866,026		770,919		34,230,117

Below is the detail of the default but not impaired portfolio:

	Past due but no impaired (*)
	1 to 29 days		30 to 59 days		60 to 89 days		over 90 days
	MCh$		MCh$		MCh$		MCh$
March 2022		472,572		100,767		25,876		—
December 2021		474,092		70,188		21,965		—

(*) These amounts include the overdue portion and the remaining balance of loans in default.

(f) Assets Received in Lieu of Payment:

The Bank has received assets in lieu of payment totaling Ch$13.313 million and Ch$12.583 million as of March 31, 2022 and December 31, 2021, respectively, the majority of which are properties. All of these assets are managed for sale.

221

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(2) Credit Risk, continued:

(g) Renegotiated Assets:

The loans are considered to be renegotiated when the corresponding financial commitments are restructured and the Bank assesses the probability of recovery as sufficiently high.

The following table details the book value of loans with renegotiated terms per financial asset class:

	March		December
	2022		2021
Financial Assets	MCh$		MCh$
Loans and advances to banks
Central Bank of Chile		—		—
Domestic banks		—		—
Foreign banks		—		—
Subtotal		—		—
Loans to customers, net
Commercial loans		348,115		331,127
Residential mortgage loans		243,380		243,684
Consumer loans		323,588		361,015
Subtotal		915,083		935,826
Total renegotiated financial assets		915,083		935,826

(h) Compliance with credit limit granted to related debtors:

Below are detailed the figures for compliance with the credit limit granted to debtors related to the ownership or management of the Bank and subsidiaries, in accordance with the Article 84 No. 2 of the General Banking Law, which establishes that in no case the total of these credits may exceed the amount of its Total or Regulatory Capital:

	March  2022			December  2021
	MCh$			MCh$
Total related debt		853,856			798,419
Consolidated Total or Regulatory Capital		5,694,018			5,634,345
Limit used %		15.00	%		14.17	%

222

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(3) Market Risk:

Market Risk refers to the loss that the Bank could face due to a liquidity shortage to honor the payments, or to close financial transactions in a timely manner (Liquidity Risk), or due to adverse movements in the values of market variables (Risk Price). For its correct management, the guidelines of the Liquidity Risk Management Policy and the Market Risk Management Policy are considered, both are subject to review, at least annually, by the Market Risk Manager and approval by the Bank’s Board of Directors, at least annually.

(a) Liquidity Risk:

Liquidity Risk Measurement and Limits

The Bank manages the Liquidity Risk in accordance with the established on the Liquidity Risk Management Policy, managing separately for each sub-category thereof; this is for Trading Liquidity Risk and Funding Liquidity Risk.

Trading Liquidity Risk is the inability to close, at current market prices, the financial positions opened mainly from the Trading Book (which is daily valued at market prices and the value differences instantly reflected in the Income Statement). This risk is controlled by establishing limits on the positions amounts of the Trading Book in accordance with what is estimated to be closed in a short time period. Additionally, the Bank incorporates a negative impact on the Income Statement whenever it considers that the size of a certain position in the Trading Book exceeds the reasonable amount, negotiated in the secondary markets, which would allow the exposure to be offset without altering market prices.

Funding Liquidity Risk refers to the Bank’s inability to obtain sufficient cash to meet its immediate obligations. This risk is managed by a minimum amount of highly liquid assets called liquidity buffer, and establishing limits and controls of internal metrics, among which the Market Access Report (“MAR”) stands out, which estimates the amount of funding that the Bank would need from wholesale financial counterparties, for the next 30 and 90 days in each of the relevant currencies of the balance sheet, to face a cash need as a result of the operation under business as usual conditions.

223

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(3) Market Risk, continued:

(a) Liquidity Risk, continued:

The use of MAR within 2022 is illustrated below (LCCY = local currency; FCCY = foreign currency):

	MAR LCCY + FCCY MMM$				MAR FCCY MMUS$
	1 - 30 days		1 - 90 days		1 - 30 days		1 - 90 days
Maximum		1,027		3,081		8		1,068
Minimum		-964		2,240		-896		27
Average		-80		2,734		-403		586

The Bank also monitors the amount of assets denominated in local currency that is funded by liabilities denominated in foreign currency, including all tenors and the cash flows generated by full delivery derivatives payments. This metric is referred to as Cross Currency Funding. The bank oversees and limits this amount in order to take precautions against not only Banco de Chile’s event but also against a systemic adverse environment generated by a country risk event that might trigger lack of foreign currency funding.

The use of Cross Currency Funding within the year 2022 is illustrated below:

	Cross Currency Funding MMUS$
Maximum		3,378
Minimum		2,254
Average		2,696

The Bank establishes thresholds that alert behaviors outside the expected ranges at a normal or prudent level of operation, in order to protect other dimensions of liquidity risk such as, for example, maturities concentration of fund providers, the diversification of sources of funds either by type of counterparty or type of product, among others.

The evolution over time of the statement of financial ratios of the Bank is monitored in order to detect structural changes in the characteristics of the balance sheet, such as those presented in the following table and whose relevant values of use during the year 2022 are shown below:

	Liquid Assets/ Net Funding <30 days			Liabilities>1 year/ Assets >1 year			Deposits/ Loans
Maximum		214	%		101	%		68	%
Minimum		174	%		100	%		65	%
Average		188	%		101	%		67	%

224

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(3) Market Risk, continued:

(a) Liquidity Risk, continued:

Additionally, some market index, prices and monetary decisions taken by the Central Bank of Chile are monitored to detect structural changes in market conditions that can trigger a liquidity shortage or even a financial crisis.

Furthermore, the Liquidity Risk Management Policy enforces to perform stress tests periodically which are controlled against potentially accessible action plans in each modeled scenario, according with the guidelines established in the Liquidity Contingency Plan. This process is essential in determining the liquidity risk appetite framework of the institution.

The Bank measures and controls the mismatch of cash flows under regulatory standards with the C46 index report, which represents the net cash flows expected over time as a result of the contractual maturity of almost all assets and liabilities. Additionally, the Commission for the Financial Market (hereinafter, “CMF”) authorized Banco de Chile, among others, to report the adjusted C46 index. This allows the Bank to report, in addition to the regular C46 index, outflow behavior assumptions of certain specific elements of the liability, such as demand deposits and time deposits. In addition, the regulator also requires some rollover assumptions for the loan portfolio.

The CMF establish the following limits for the C46:

Foreign Currency balance sheet items:	1-30 days C46 index < 1 x Tier-1 Capital
All Currencies balance sheet items:	1-30 days C46 index < 1 x Tier-1 Capital
All Currencies balance sheet items:	1-90 days C46 index < 2 x Tier-1 Capital

The use of this index in the period 2022 is illustrated below:

	Adjusted C46 All CCYs as part of Basic Capital						Adjusted C46 FCCY as part of Basic Capital
	1 - 30 days			1 - 90 days			1 - 30 days
Maximum		0.13			(0.03	)		0.22
Minimum		(0.26	)		(0.29	)		0.07
Average		(0.07	)		(0.14	)		0.13
Regulatory Limit		1.0			2.0			1.0

225

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(3) Market Risk, continued:

(a) Liquidity Risk, continued:

The individual and consolidated term mismatches are presented below:

QUARTERLY STATEMENT OF INDIVIDUAL LIQUIDITY SITUATION
AS OF MARCH 31, 2022 CONTRACTUAL BASIS
Values in MCh$
CONSOLIDATED CURRENCY	From 0 to 7 days		From 0 to 15 days		From 0 to 30 days			From 0 to 90 days
Cash flow receivable (assets) and income		10,993,191		11,988,284		12,822,355			16,050,314
Cash flow payable (liabilities) and expenses		20,638,481		22,235,832		25,085,480			27,341,191
Mismatch		9,645,290		10,247,547		12,263,125			11,290,876
Limits:
One time capital						4,199,906
Two times capital									8,399,811
AVAILABLE MARGIN						(8,063,219	)		(2,891,065	)

* In the limit up to 30 days, in consolidated currency, the Bank has a liquidity situation of Ch$(8,063,219,741,979)

* In the limit up to 90 days, in consolidated currency, the Bank has a liquidity situation of Ch$(2,891,065,143,629)

FOREIGN CURRENCY	From 0 to 7 days		From 0 to 15 days		From 0 to 30 days		From 0 to 90 days
Cash flow receivable (assets) and income		2,500,824		2,585,623		2,562,739		3,046,930
Cash flow payable (liabilities) and expenses		3,494,230		3,648,394		3,982,123		4,406,610
Mismatch		993,406,0		1,062,771		1,419,384		1,359,680
Limits:
One time capital						4,199,906
AVAILABLE MARGIN						2,780,522		—

226

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(3) Market Risk, continued:

(a) Liquidity Risk, continued:

QUARTERLY STATEMENT OF INDIVIDUAL LIQUIDITY SITUATION
AS OF MARCH 31, 2022 ADJUSTED BASIS
Values in MCh$
CONSOLIDATED CURRENCY	From 0 to 7 days			From 0 to 15 days			From 0 to 30 days			From 0 to 90 days
Cash flow receivable (assets) and income		10,729,115			11,499,064			11,892,322			13,884,805
Cash flow payable (liabilities) and expenses		9,704,190			10,352,164			11,552,971			12,673,589
Mismatch		(1,024,925	)		(1,146,900	)		(339,351	)		(1,211,216	)
Limits:
One time capital								4,199,906
Two times capital											8,399,811
AVAILABLE MARGIN								4,539,256			9,611,028

* In the limit up to 30 days, in consolidated currency, the Bank has a liquidity float of Ch$4,539,256,153,412

* In the limit up to 90 days, in consolidated currency, the Bank has a liquidity float of Ch$9,611,027,779,612

FOREIGN CURRENCY	From 0 to 7 days			From 0 to 15 days			From 0 to 30 days		From 0 to 90 days
Cash flow receivable (assets) and income		2,429,378			2,460,578			2,292,323		2,443,097
Cash flow payable (liabilities) and expenses		2,263,545			2,370,157			2,611,327		2,978,644
Mismatch		(165,832	)		(90,421	)		319,004		535,547
Limits:
One time capital								4,199,906
AVAILABLE MARGIN								3,880,902		—

227

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(3) Market Risk, continued:

(a) Liquidity Risk, continued:

QUARTERLY STATEMENT OF CONSOLIDATED LIQUIDITY SITUATION
AS OF MARCH 31, 2022 CONTRACTUAL BASIS
Values in MCh$
CONSOLIDATED CURRENCY	From 0 to 7 days		From 0 to 15 days		From 0 to 30 days			From 0 to 90 days
Cash flow receivable (assets) and income		11,554,840		12,550,078		13,397,732			16,629,411
Cash flow payable (liabilities) and expenses		21,175,294		22,775,017		25,624,998			27,880,749
Mismatch		9,620,454		10,224,939		12,227,266			11,251,338
Limits:
One time capital						4,199,906
Two times capital									8,399,811
AVAILABLE MARGIN						(8,027,360	)		(2,851,527	)

* In the limit up to 30 days, in consolidated currency, the Bank has a liquidity situation of Ch$(8,027,360,135,868)

* In the limit up to 90 days, in consolidated currency, the Bank has a liquidity situation of Ch$(2,851,526,534,916)

FOREIGN CURRENCY	From 0 to 7 days		From 0 to 15 days		From 0 to 30 days		From 0 to 90 days
Cash flow receivable (assets) and income		2,495,902		2,580,702		2,557,818		3,042,009
Cash flow payable (liabilities) and expenses		3,494,230		3,648,394		3,982,123		4,406,610
Mismatch		998,328		1,067,693		1,424,305		1,364,602
Limits:
One time capital						4,199,906
AVAILABLE MARGIN						2,775,601		—

228

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(3) Market Risk, continued:

(a) Liquidity Risk, continued:

QUARTERLY STATEMENT OF CONSOLIDATED LIQUIDITY SITUATION
AS OF MARCH 31, 2022 ADJUSTED BASIS
Values in MCh$
CONSOLIDATED CURRENCY	From 0 to 7 days			From 0 to 15 days			From 0 to 30 days			From 0 to 90 days
Cash flow receivable (assets) and income		11,290,763			12,060,858			12,467,699			14,463,902
Cash flow payable (liabilities) and expenses		10,241,002			10,891,350			12,092,489			13,213,147
Mismatch		(1,049,761	)		(1,169,508	)		(375,210	)		(1,250,755	)
Limits:
One time capital								4,199,906
Two times capital											8,399,811
AVAILABLE MARGIN								4,575,116			9,650,566

* In the limit up to 30 days, in consolidated currency, the Bank has a liquidity float of Ch$4,575,115,759,508

* In the limit up to 90 days, in consolidated currency, the Bank has a liquidity float of Ch$9,650,566,388,308

FOREIGN CURRENCY	From 0 to 7 days			From 0 to 15 days			From 0 to 30 days		From 0 to 90 days
Cash flow receivable (assets) and income		2,424,456			2,455,656			2,287,402		2,438,175
Cash flow payable (liabilities) and expenses		2,263,545			2,370,157			2,611,327		2,978,644
Mismatch		(160,911	)		(85,500	)		323,925		540,469
Limits:
One time capital								4,199,906
AVAILABLE MARGIN								3,875,980		—

229

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(3) Market Risk, continued:

(a) Liquidity Risk, continued:

Liquid Assets Consolidated Balance Statement as of March 31, 2022, values in MMM$

 

Source: Financial Statements Banco de Chile as of March 31, 2022

Additionally, the regulatory entities have introduced other metrics that the Bank uses in its management, such as the Liquidity Coverage Ratio (“LCR”) and Net Stable Financing Ratio (“NSFR”), using assumptions similar to those used in the international banking. Only for the first one, a limit implementation calendar has been established and that during the year 2022 was with a minimum level of 90%. The evolution of the LCR and NSFR metrics during the year 2022 are shown below:

	LCR			NSFR
Maximum		3.30			1.19
Minimum		2.56			1.15
Average		2.98			1.17
Regulatory Limit		0.9	(*)		N/A

(*) This is the current minimum value for the year 2022 and that increases 0.1 annually until reaching 1.0 in 2023.

230

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(3) Market Risk, continued:

(a) Liquidity Risk, continued:

The contractual maturity profile of the financial liabilities of Banco de Chile and its subsidiaries (consolidated basis), to March 2022 and 2021, is as follows:

	Up to 1 month		1 to 3 months		3 to 12 months		1 to 3 years		3 to 5 years		Over 5 years		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Liabilities as of March 31, 2022
Transactions in the course of payment		433,362		—		—		—		—		—		433,362
Full delivery derivative transactions		486,138		564,791		2,765,569		1,480,524		870,690		1,936,443		8,104,155
Financial liabilities at amortized cost
Current accounts and other demand deposits		16,493,474		—		—		—		—		—		16,493,474
Saving accounts and time deposits		7,062,514		1,850,111		831,507		120,841		1,122		475		9,866,570
Obligations by repurchase agreements and securities lending		101,641		40		47		—		—		—		101,728
Borrowings from financial institutions		67,288		12,490		59,081		4,520,946		—		—		4,659,805
Debt financial instruments issued (all currencies)		18,866		319,535		834,158		2,292,775		2,244,470		3,748,953		9,458,757
Other financial obligations		200,410		64		163		140		—		—		200,777
Financial instruments of regulatory capital issued (subordinated bonds)		6,141		15,874		28,710		88,775		82,634		1,060,759		1,282,893
Total (excluding non-delivery derivative transactions)		24,869,834		2,762,905		4,519,235		8,504,001		3,198,916		6,746,630		50,601,521
Non-delivery derivative transactions		628,702		661,909		2,453,751		1,071,267		867,052		2,093,021		7,775,701

	Up to 1 month		1 to 3 months		3 to 12 months		1 to 3 years		3 to 5 years		Over 5 years		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Liabilities as of December 31, 2021
Transactions in the course of payment		460,490		—		—		—		—		—		460,490
Full delivery derivative transactions		434,113		469,349		2,603,467		1,645,489		968,078		1,761,581		7,882,077
Financial liabilities at amortized cost
Current accounts and other demand deposits		18,542,791		—		—		—		—		—		18,542,791
Saving accounts and time deposits		7,103,640		1,774,627		240,912		66,492		1,619		—		9,187,290
Obligations by repurchase agreements and securities lending		88,433		—		52		—		—		—		88,485
Borrowings from financial institutions		67,813		1,259,167		18,344		3,515,979		—		—		4,861,303
Debt financial instruments issued (all currencies)		17,154		369,988		1,083,540		2,358,966		2,104,219		4,839,310		10,773,177
Other financial obligations		273,394		50		183		183		—		—		273,810
Total (excluding non-delivery derivative transactions)		26,987,828		3,873,181		3,946,498		7,587,109		3,073,916		6,600,891		52,069,423
Non-delivery derivative transactions		271,193		586,231		2,602,915		1,030,628		669,796		2,145,008		7,305,771

231

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(3) Market Risk, continued:

(b) Price Risk:

Price Risk Measurement and Limits

The Price Risk measurement and management processes are carried out in accordance with the established on the Market Risk Management Policy, by using internal metrics developed by the Bank, both for the Trading Book and for the Accrual Book (the Accrual Book includes all balance sheet items, including those in the Trading Book but in such case these are reported at an interest rate adjustment term of one day, thus not generating accrual interest rate risk) , in addition, the Fair Value Through Other Comprehensive Income (hereinafter FVOCI) portfolio is considered, which is a sub-set of the Accrual Book, which given its nature is relevant to measure it independently. In addition, the Bank reports metrics to regulatory entities according to the models defined by them.

The Bank has established internal limits for the exposures of the Trading Book. In fact, FX positions (FX delta), interest rate sensitivities generated by the derivatives and debt securities portfolios (DV01 or also referred as to rho) and the FX options volatility sensitivity (vega) are measured, reported and controlled against their limits. Limits are established on an aggregate basis but also for some specific tenor points. The use of these limits is daily monitored, controlled and reported by independent control functions to the senior management of the bank. The internal governance framework also establishes that these limits must be approved by the board and reviewed at least annually.

The Bank measures and controls the risk for the Trading Book portfolios using the Value-at-Risk (VaR). The model uses a 99% confidence level and the most recent one-year observed rates, prices and yields data.

The use of VaR within the year 2022 is illustrated below:

	Value-at-Risk 99% one-day confidence level MCh$
Maximum		1,451
Minimum		640
Average		1,018

Additionally, the Bank performs measuring, limiting, controlling and reporting interest rate exposures and risks for the Accrual Book using internally developed methodologies based on the differences in the amounts of assets and liabilities considering the interest rate repricing dates. Exposures are measured according to the Interest Rate Exposure or IRE metric and their corresponding risks using the Earnings-at-Risk or EaR metric. Within these metrics, Prepayment Risk is considered, which corresponds to the customer’s ability to pay, totally or partially, their debt before maturity. For this, a loan flow allocation model is generated with exposure to interest rate fluctuations, according to their prepayment behavior, finally reflecting a decrease in the average maturity of the loans, which allows determining the possible impacts on the Bank’s Balance Sheet.

232

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(3) Market Risk, continued:

(b) Price Risk, continued:

The use of EaR within the year 2022 is illustrated below::

	12-months Earnings-at-Risk 99% confidence level 3 months closing period MCh$
Maximum		229,044
Minimum		179,379
Average		199,725

The regulatory risk measurement for the Trading Book (APRM report, from the spanish Activos Ponderados por Riesgo Mercado) is produced by utilizing guidelines provided by the Central Bank of Chile (hereinafter, “BCCh”) and the CMF, which are adopted based on standardized BIS methodologies. The referred methodologies estimate the potential loss that the bank may incur considering standardized fluctuations of the value of market factors such as FX rates, interest rates and volatilities that may adversely impact the value of FX spot positions, interest rate exposures, and volatility exposures, respectively. In addition, correlation factors are included to represent non-parallel changes in the yield curve.

The risk measurement for the Banking Book, according to regulatory guidelines (C40 report), as a result of interest rate fluctuations is carried out through the use of standardized methodologies provided by regulatory entities (BCCh and CMF). The report includes models for reporting interest rate gaps and standardized adverse interest rate fluctuations. In addition to this, the regulatory entity has requested banks to establish internal limits, separately for short-term and long-term balances, for these regulatory measurements.

The results effectively realized during the month for trading activities are controlled against defined loss levels and if these levels are exceeded, senior management is notified in order to evaluate potential corrective actions.

In addition to the above, the Market Risk Policy of Banco de Chile enforces to perform daily stress tests for the Trading Book and monthly for the Accrual Book, additionally a stress test for the FVOCI portfolio is included, which is reported daily. The output of the stress testing process is monitored against corresponding trigger levels: in the case those triggers are breached, the senior management is notified in order to implement further actions, if necessary. In addition, the results during the month for the trading activities are controlled against defined loss levels and in case such levels are exceeded, senior management is also notified.

233

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(3) Market Risk, continued:

(b) Price Risk, continued:

	Up to 1 month		1 to 3 months		3 to 12 months		1 to 3 years		3 to 5 years		Over 5 years		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Assets as of March 31, 2022
Cash and due from banks		4,827,029		—		—		—		—		—		4,827,029
Transactions in the course of collection		413,482		—		—		—		—		—		413,482
Financial assets at fair value through other comprehensive income
Debt financial instruments		251,947		578,100		893,431		622,557		158,227		221,702		2,725,964
Derivative financial instruments for hedging purposes		3,891		34,735		30,511		476,118		335,288		1,407,952		2,288,495
Financial assets at amortized cost
Rights by resale agreements and securities lending		—		—		—		—		—		—		—
Debt financial instruments		1,203		—		18,045		54,171		421,731		447,819		942,969
Loans and advances to Banks		2,858,611		77,393		56,795		—		—		—		2,992,799
Loans to customers, net		4,028,955		3,073,254		6,739,169		8,963,312		4,822,255		12,068,456		39,695,401
Total Assets		12,385,118		3,763,482		7,737,951		10,116,158		5,737,501		14,145,929		53,886,139

	Up to 1 month		1 to 3 months		3 to 12 months		1 to 3 years		3 to 5 years		Over 5 years		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Assets as of December 31, 2021
Cash and due from banks		3,579,634		—		—		—		—		—		3,579,634
Transactions in the course of collection		446,603		—		—		—		—		—		446,603
Financial assets at fair value through other comprehensive income
Debt financial instruments		95,585		488,919		1,479,321		619,044		169,289		208,507		3,060,665
Derivative financial instruments for hedging purposes		64		2,163		69,192		500,218		198,926		1,669,980		2,440,543
Financial assets at amortized cost
Rights by resale agreements and securities lending		—		—		—		—		—		—		—
Debt financial instruments		—		8,334		10,740		38,148		431,285		450,200		938,707
Loans and advances to Banks		1,366,378		81,164		81,800		—		—		—		1,529,342
Loans to customers, net		2,529,601		2,676,130		7,226,224		9,018,799		4,798,188		11,955,962		38,204,904
Total Assets		8,017,865		3,256,710		8,867,277		10,176,209		5,597,688		14,284,649		50,200,398

234

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

47. Risk Management and Report, continued:

(3) Market Risk, continued:

(b) Price Risk, continued:

	Up to 1 month		1 to 3 months		3 to 12 months		1 to 3 years		3 to 5 years		Over 5 years		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Liabilities as of March 31,  2022
Transactions in the course of payment		323,671		—		—		—		—		—		323,671
Derivative Financial Instruments for hedging purposes		2,769		43,522		19,297		429,959		320,492		1,496,931		2,312,969
Financial liabilities at amortized cost
Current accounts and other demand deposits		16,543,322		—		—		—		—		—		16,543,322
Saving accounts and time deposits		7,062,514		1,850,111		831,507		120,841		1,122		475		9,866,570
Obligations by repurchase agreements and securities lending		21,777		—		—		—		—		—		21,777
Borrowings from financial institutions		63,086		12,490		59,081		4,520,947		—		—		4,655,604
Debt financial instruments issued (*)		18,866		319,535		834,158		2,292,775		2,244,469		3,748,953		9,458,756
Financial instruments of regulatory capital issued (subordinated bonds)		6,141		15,874		28,710		88,775		82,634		1,060,759		1,282,893
Other liabilities		200,410		64		163		140		—		—		200,777
Total liabilities		24,242,556		2,241,595		1,772,916		7,453,437		2,648,717		6,307,118		44,666,339

	Up to 1 month		1 to 3 months		3 to 12 months		1 to 3 years		3 to 5 years		Over 5 years		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Liabilities as of December 31, 2021
Transactions in the course of payment		333,431		—		—		—		—		—		333,431
Derivative Financial Instruments for hedging purposes		538		979		62,220		407,960		167,805		1,401,836		2,041,338
Financial liabilities at amortized cost
Current accounts and other demand deposits		18,611,880		—		—		—		—		—		18,611,880
Saving accounts and time deposits		7,103,640		1,774,627		240,912		66,492		1,619		—		9,187,290
Obligations by repurchase agreements and securities lending		351		—		—		—		—		—		351
Borrowings from financial institutions		63,611		1,259,167		18,344		3,515,979		—		—		4,857,101
Debt financial instruments issued (*)		17,154		369,988		1,083,540		2,358,966		2,104,219		4,839,310		10,773,177
Other liabilities		273,394		50		183		183		—		—		273,810
Total liabilities		26,403,999		3,404,811		1,405,199		6,349,580		2,273,643		6,241,146		46,078,378

(*) Amounts shown here are different from those reported in the liabilities report which is part of the liquidity analysis, due to differences in the treatment of mortgage bonds issued by the Bank in both reports.

235

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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47. Risk Management and Report, continued:

(3) Market Risk, continued:

(b) Price Risk, continued:

Price Risk Sensitivity Analysis

The Bank uses stress tests as the main sensitivity analysis tool for Price Risk. The analysis is implemented for the Trading Book, Accrual Book and the FVOCI portfolio separately. The Bank has adopted this tool as it is considered more useful than fluctuations in business as usual scenario, such as VaR or EaR, given that:

(i) The financial crisis show market factors fluctuations that are materially larger than those used in the VaR with 99% of confidence level or EaR with 99% of confidence level.

(ii) The financial crisis also show that correlations between these fluctuations are materially different from those used in the VaR computation, since a crisis precisely indicates severe disconnections between the behaviors of market factors fluctuations respect to the patterns observed under normal conditions.

(iii) Trading liquidity dramatically diminishes during financial distress and especially in emerging markets. Therefore, the overnight VaR number might not be representative of the loss for trading portfolios in such environment since closing exposures period may exceed one business day. This may also happen when calculating EaR, even considering three months as the closing period.

The impacts are determined by mathematical simulations of fluctuations in the values of market factors, and also, estimating the changes of the economic and /or accounting value of the financial positions.

236

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47. Risk Management and Report, continued:

(3) Market Risk, continued:

(b) Price Risk, continued:

In order to comply with IFRS 7.40, the following exercise was included illustrating an estimation of the impact of extreme but reasonable fluctuations of interest rates, swaps yields, FX rates and exchange volatility, which are used for valuing Trading Book, Accrual Book and the FVOCI portfolio. Given that the Bank’s portfolio includes positions denominated in nominal and real interest rates, these fluctuations must be aligned with extreme but realistic Chilean inflation changes forecasts.

The exercise is implemented by multiplying the sensitivities by the fluctuations obtained as the results of mathematical simulations over a two-week time horizon and using the maximum historical volatility, within a significant period of time, in each of the market factor present in the Trading Book, in the case of the FVOCI portfolio a four-week time horizon is used due to liquidity constrains; Accrual Book impacts are estimated by multiplying cumulative gaps by forward interest rates fluctuations modeled over a three-month time horizon and using the maximum historical volatility of interest fluctuations but limited by maximum fluctuations and / or levels observed within a significant period of time. It is relevant to note that the methodology might ignore some portion of the interest rates convexity, since it is not captured properly when large fluctuations are modeled. In any case, given the magnitude of the changes, the methodology may be reasonable enough for the purposes and scope of the analysis.

The following table illustrates the fluctuations resulting from the main market factors in the maximum stress test exercise, or more adverse, for the Trading Book.

The directions or signs of these fluctuations are those that correspond to those that generate the most adverse impact at the aggregate level.

Average Fluctuations of Market Factors for Maximum Stress Scenario Trading Book
	CLP Derivatives (bps)			CLP Bonds (bps)		CLF Derivatives (bps)			CLF Bonds (bps)			USD Offshore Libor Derivatives (bps)		Spread USD On/Off Derivatives (bps)
Less than 1 year		(11	)		30		30			(559	)		10		33
Greater than 1 year		(6	)		30		(121	)		(86	)		8		14

bps = basis points

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47. Risk Management and Report, continued:

(3) Market Risk, continued:

(b) Price Risk, continued:

The worst impact on the Bank’s Trading Book as of March 31, 2022, as a result of the simulation process described above, is as follows:

Most Adverse Stress Scenario P&L Impact Trading Book (MCh$)
CLP Interest Rate			(188	)
Derivatives	109
Debt instruments	(297	)
CLF Interest Rate			(6,019	)
Derivatives	(6,769	)
Debt instruments	750
Interest rate USD offshore			(119	)
Domestic/offshore interest rate spread USD			(96	)
Banking spread			(72	)
Total Interest rates			(6,494	)
Total FX and FX Options			(48	)
Total			(6,542	)

The modeled scenario would generate losses in the Trading Book for approximately Ch$6,542 million. In any case, such fluctuations would not result in material losses compared to Basic Capital or to the P&L estimate for the next 12-months.

The impact on the Accrual Book as of March 31, 2022, which does not necessarily mean a net loss(gain) but a greater(lower) net income from funds generation (resulting net interest rate generation), is illustrated below:

Most Adverse Stress Scenario 12-Month Revenue Accrual Book (MCh$)
Impact by Base Interest Rate shocks	(540,657	)
Impact due to Spreads Shocks	(37,530	)
Higher / (Lower) Net revenues	(578,187	)

The impact on the FVOCI portfolio it is show in the followings tables. First are the main fluctuation in the market factors, due to the scenarios provided for the stress test meltdown (more adverse), for this portfolio.

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_____________

47. Risk Management and Report, continued:

(3) Market Risk, continued:

(b) Price Risk, continued:

The sign of the fluctuation below, correspond to the ones that generate the most adverse impact.

Average Fluctuations of Market Factors for Maximum Stress Scenario FVOCI Portfolio
	CLP Bonds (bps)		CLF Bonds (bps)		USD Offshore Libor Derivatives (bps)			Spread USD On/Off Derivatives (bps)
Less than 1 year		365		239		(2	)		21
Greater than 1 year		365		355		(26	)		9

bps = basis points

The worst impact on the Bank’s FVOCI portfolio as of March 31, 2022, as a result of the simulation process described above, is as follows:

Most Adverse Stress Scenario P&L Impact
FVOCI portfolio
(MCh$)
CLP Debt Instrument	(76,821	)
CLF Debt Instrument	(98,879	)
Interest rate USD offshore	—
Domestic/offshore interest rate spread USD	—
Banking spread	(93	)
Corporative spread	398
Total	(175,395	)

The modeled scenario would generate losses in the FVOCI portfolio for approximately Ch$175,395 million.

The main negative impact on the Trading Book would occur as a result of an increase in interest rates, especially CLF Derivatives rates, in the case of the FVOCI portfolio, the main impact would be due to Debt Instruments. For its part, the lowest potential income in the next 12 months in the Accrual Book would occur in a scenario of a sharp decline in inflation and nominal rates. Although the impacts would be greater than the Bank’s budgeted annual profits, the probability of occurrence given market conditions is very low.

239

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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47. Risk Management and Report, continued:

(4) Other Information related to Financial Risks:

a) Libor transition project:

As a consequence of the decisions made by the Financial Conduct Authority (FCA) of the United Kingdom and the recommendations of the Alternative Reference Rates Committee (ARRC) made up of the Federal Reserve Board and the New York FED, since 12-31-2021 Libor rates in currencies other than US$ are no longer published, as of 06-30-2023 Libor in US$ is no longer published and as of 01-01-2022 new Libor-based operations are no longer processed. Only US$ Libor may be used in contracts in force as of 12-31-2021 and until the last date of publication of this.

Because of this, since 2020, we have been working on enabling and implementing, in its different dimensions, the new risk-free reference rates (“RFR”) for carrying out operations in foreign currency as of 01-01-2022.

To this end, work has been done in coordination with the different areas of the Bank involved, which include Treasury, Prosecution, Operations, IT, Business Development for SMEs and Companies, Studies and Planning, Accounting, Foreign Trade, Market Risk and the International Area.

The process has been structured in 5 phases:

● 1st phase

- Identification of the risks associated with the Libor transition process through the collection of information regarding the number of operations, amounts involved, remaining terms, types of products and course coins.

- Periodic exchange of information with the main global banks regarding the RFRs that were being defined as a replacement for Libor rates.

- Review of the documents published by the ARRC with its recommendations.

● 2nd phase

- Preparation and presentation to the CMF in 2021 of the situational analysis of Banco de Chile regarding the end of Libor. This included reporting on the information research carried out in the 1st stage and the impact that the end of the libor rate had both at the level of Products and at the level of Bank Areas.

● 3rd phase

- Definition of the new RFRs to be used in the different currencies (daily SOFR, term SOFR, TONAR, SONIA, etc.)

- Implementation of the RFR in the Bank’s systems

● 4th phase

- Carrying out tests of course of financial operations to review the correct accrual of the new RFR.

- Preparation of documentation with the RFR.

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47. Risk Management and Report, continued:

(4) Other Information related to Financial Risks, continued:

a) Libor transition project, continued:

These phases were successfully completed at the end of 2021 and since the beginning of 2022 the Bank is already operating with the new RFRs.

● 5th phase, currently in process:

- Renegotiation of contracts with impacted clients

Current portfolio affected by the transition process of the libor rate:

● Credit operations in US$ of Foreign Trade, Commercial Credits and Leasing contracts:

o USD 697 million equivalent to 1.5% of the total portfolio of direct loans of Banco de Chile.

● Derivative contracts portfolio

o Assets USD 11,843 million

o Liabilities USD 11,633 million

b) Offsetting of financial assets and liabilities:

The Bank trades financial derivatives with foreign counterparties using ISDA Master Agreement (International Swaps and Derivatives Association, Inc.), under legal jurisdiction of the City of New York – USA or London – United Kingdom. Legal framework in these jurisdictions, along with documentation mentioned, it allows Banco de Chile the right to anticipate the maturity of the transaction and then, offset the net value of those transactions in case of default of counterparty. Additionally, the Bank has negotiated with these counterparties an additional annex (CSA Credit Support Annex), that includes other credit mitigating, such as entering margins on a certain amount of net value of transactions, early termination (optional or mandatory) of transactions at certain dates in the future, coupon adjustment of transaction in exchange for payment of the debtor counterpart over a certain threshold amount, etc.

Below are detail the contracts susceptible to offset:

	Fair Value				Negative Fair Value of contracts with right to offset						Positive Fair Value of contracts with right to offset						Financial Collateral						Net Fair Value
	March		December		March			December			March			December			March			December			March		December
	2022		2021		2022			2021			2022			2021			2022			2021			2022		2021
	MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$		MCh$
Derivative financial assets		2,486,717		2,983,298		(1,092,343	)		(1,259,233	)		(933,956	)		(782,776	)		(130,065	)		(327,840	)		330,353		613,449
Derivative financial liabilities		2,569,888		2,773,199		(1,092,343	)		(1,259,233	)		(933,956	)		(782,776	)		(145,701	)		(275,191	)		397,888		455,999

241

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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47. Risk Management and Report, continued:

(5) Operational risk:

One of the Bank’s objectives is to monitor, control and maintain at adequate levels, the risk of losses resulting from a lack of adequacy or a failure of processes, personnel and/or internal systems, or due to external events. This definition includes legal risk and excludes strategic and reputational risk.

Operational risk is inherent in all activities, products and systems, and cuts across the entire organization in its strategic, business and support processes. It is the responsibility of all the Bank’s collaborators to manage and control the risks generated within their scope of action, since their materialization may lead to direct or indirect financial losses.

To face this risk, the Bank has defined a Regulatory Framework and a governance structure according to the volume and complexity of its activities. The Retail Credit Risk and Global Risk Control Division administer the management of this risk, through the establishment of an Operational Risk Management. Likewise, the “Superior Committee for Operational Risk” and the “Committee for Operational Risk” supervise it.

The Operational Risk Policy defines a comprehensive management framework that considers the identification, evaluation, control, mitigation, monitoring and reporting of these risks. This comprehensive management considers the execution of a series of structured activities in the following fields of action:

− Process Evaluation: Its objective is to identify, evaluate and monitor the risks and controls associated with the Bank’s processes, together with analyzing and determining the acceptable risk levels and mitigation actions to be applied in the event of deviation from these levels, allowing the maintenance of an adequate control environment over the operational risks.

− Management of Events and Operational Losses: consists of identifying, analyzing, controlling and reporting the operational losses generated by the different areas, maintaining a consolidated base that allows comprehensive management of the different areas of Operational Risk. On the other hand, those significant Operational Risk events, whether or not they constitute losses, are analyzed, controlled and reported to the defined government instances, with the aim of preventing their recurrence, ensuring the correct execution of the processes and promoting measures mitigants that ensure an adequate control environment.

− Fraud Management: this field considers the permanent analysis of information (both internal and external), in order to identify sources of risk and analyze their different behaviors, which allows defining and promoting various mitigation actions, seeking to improve security for our clients and reduce the economic losses associated with this concept. To ensure adequate mitigation of these risks, the Bank has established a fraud management and prevention model, which includes: a governance structure, roles and responsibilities of the different areas involved and a definition of the processes that are part of the management of these risks.

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47. Risk Management and Report, continued:

(5) Operational risk, continued:

− Operational risk assessment for projects: the Bank is constantly working on the development of projects, including from the creation of new products and services, large technological implementations to operational changes in its processes. The implementation of these projects may lead to the appearance of new risks that must be correctly mitigated prior to their implementation, through the design of robust controls. For this, there is a methodological framework and specific tools that allow carrying out an evaluation of the different risks and controls, establishing a general level of exposure to operational risk, and determining mitigation actions in cases where it is necessary.

− Supplier management: its objective is to identify, manage and monitor the risks that may arise from the outsourcing of services. For this, the Bank has a governance framework, a regulatory framework and a supplier management model that considers an analysis of the criticality and risk associated with the contracted services and an evaluation and monitoring scheme with a special focus on those considered relevant or critical to the entity.

− Operational risk culture: with the aim of building a solid culture of operational risk management throughout the corporation and promoting the importance and responsibility of each of the employees in this area, the Bank has established an annual training process and dissemination that considers the different areas of Operational Risk management.

− Internal Control: Through the evaluation of the design and operational effectiveness of the internal control environment, the aim is to ensure the reliability and transparency of the financial information generated by the Bank. For this, a periodic evaluation process is carried out, based on the materiality of the risks in relation to their impact on the financial statements. The evaluation of the design of the controls allows to identify if the associated risks are covered by adequate controls. On the other hand, the evaluation of operational effectiveness, which considers the testing of controls, makes it possible to verify that they are correctly executed.

− Risk appetite: considers the periodic control and monitoring of the level of risk appetite for Operational Risk, based on the defined metrics and thresholds.

The combination of all the areas previously indicated, together with the regulatory framework and the corresponding governance structure, constitute the comprehensive management of Operational Risk. This management focuses on the identification of the root cause of the risks to prevent their occurrence and the mitigation of their possible consequences.

Each of the areas can give rise to the definition of action plans or indicators that allow adequate monitoring of each risk.

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47. Risk Management and Report, continued:

(5) Operational risk, continued:

Below is the exposure to net loss, gross loss and recoveries due to operational risk events as of March 31, 2022 and 2021:

	March 2022									March 2021
Category	Lost Gross MCh$		Recoveries MCh$			Lost Net MCh$		Lost Gross MCh$		Recoveries MCh$			Lost Net MCh$
Internal fraud		—		—			—		9		—			9
External fraud		2,311		(1,124	)		1,187		2,745		(1,312	)		1,433
Work practices and safety in the business position		120		—			120		371		—			371
Customers, products and business practices		41		—			41		107		—			107
Damage to physical assets		171		(126	)		45		60		—			60
Business interruption and system failures		57		—			57		27		—			27
Execution, delivery and process management		484		(3	)		481		617		(64	)		553
Total		3,184		(1,253	)		1,931		3,936		(1,376	)		2,560

Business Continuity

The Bank has a Business Continuity Management (BCM), which is in charge of the Business Continuity Management, responsible for managing and supervising the application of the policies, rules and procedures of each of these areas within the Bank and Subsidiaries.

In addition to the above, the Business Continuity Management aims to manage the strategy and control of business continuity in the operational and technological field for the Bank, maintaining alternative operation plans and controlled tests to reduce the impact of disruptive events that may affect the organization, in addition to establishing general guidelines to ensure the safety of employees, protect the organization’s assets against catastrophic scenarios, maintain and update the necessary documentation and carry out training associated with this matter.

That is why Business Continuity has methodologies and controls that contribute to the application of the management model within the corporation, mainly represented in the following management areas:

− Document management: consists of submitting the documentation that supports Business Continuity to methodological updating processes, with the aim of keeping the strategy implemented in the Bank current under the BCM (Business Continuity Management) guidelines. The documents managed are, Business Continuity Policy, Business Continuity Standards, Business Continuity Testing Standard, Crisis Management Manual, Continuity Plans and Technological Recovery Procedures.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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47. Risk Management and Report, continued:

(5) Operational risk, continued:

− Business continuity tests: refers to simulations of contingencies scheduled annually and that address the different risk scenarios defined for the Bank in the operational and technological fields (Failure in the Technological Infrastructure, Failure in the Physical Infrastructure, Mass Absence of Personnel, Critical Provider Service Failure and Cybersecurity). These tests allow us to keep the critical staff that operates the payment chain trained, verify and maintain the effectiveness of the Business Continuity model, under the defined procedures that support the Bank’s critical products and services.

− Crisis management: internal Bank process that maintains and trains the main executive roles associated with the Crisis Groups in conjunction with the main strategic recovery processes and the structures defined in the BCM model. In such a way to maintain validity and constantly strengthen the different areas necessary for the preparation, execution and monitoring, which will allow facing crisis events in the Bank.

− Management with critical suppliers: constitutes the management, control and testing of the Business Continuity Plans implemented by the suppliers involved in the processing of critical products and services for the Bank, associated with the established risk scenarios and with the direct relation to the contracted service. Likewise, there is an integration and participation of the Suppliers Operating Committee.

− Alternate sites: contemplates the management and control of secondary physical locations for the critical units of the Bank, to continue the operation in case of failure in the main work location. The objective is to protect and maintain the validity of the technological and operational functionalities of the alternative sites, to reduce recovery times in the event of a crisis and that the activation be effective when their use is required.

− Relationship with subsidiaries: consists of the permanent control, management and leveling of the compliance of subsidiaries under the methodology and strategic lines established by the Bank in crisis environments and Business Continuity management. Safeguarding the homologation of Policies, Continuity Plans, Procedures and Standards established in the Bank.

− Complements to internal and management processes: considers the application of continuous improvement, automation and adaptation of the resources used in the internal processes of the business continuity model, with the aim of improving response times before the delivery and analysis of information in contingencies, complementing the processes managed by the BCM.

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_____________

47. Risk Management and Report, continued:

(5) Operational risk, continued:

− Internal control activities: Includes the performance of activities of the global and comprehensive management of BCM, in the field of compliance with both internal and external regulators. In the same way, the permanent participation and presence in the different Boards/Committees established within the government and management of the Bank.

The global integration of all the areas previously mentioned, together with the regulatory framework and the corresponding governance structure, constitute the integral management of the business continuity model or BCM of Banco de Chile.

Cybersecurity

The Cyber Defense Management is responsible for safeguarding information assets through the detection, response and containment of threats. Likewise, this department is responsible for managing cybersecurity incidents in an assertive and timely manner, minimizing the impact and improving response times, with the aim of protecting the bank’s operations. The Engineering Department is in charge of defining, implementing and maximizing existing protection technologies against cyber threats, and defining and maintaining the security architecture. The Technological Risk Management is responsible for identifying, evaluating, treating and reporting information security, technological and cybersecurity risks, this includes the management of technological risks in the Bank’s projects. The Strategic Management Deputy Manager is responsible for defining and managing the Cybersecurity Project Plan in line with the Bank’s Strategic Plan, guaranteeing the effective and efficient use of resources, and imparting and controlling the Cybersecurity guidelines to suppliers. Finally, the Assurance Deputy Manager is responsible for reviewing compliance with the Strategic Plan, the policies, procedures and the regulatory framework regarding cybersecurity. Also to develop and implement the Cybersecurity Awareness Program.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

_____________

48. Information on Regulatory Capital and Capital Adequacy Ratios:

Requirements and Capital Management:

The main objectives of the Bank’s capital management are to ensure the adequacy and quality of its capital, at a consolidated level, based on managing the risks it faces in its operations, establishing sufficient capital levels, through the definition of an internal objective, which supports both the business strategy and stress scenarios in the short and medium terms, thus ensuring compliance with regulatory requirements, a solid credit rating and adequate capital clearances. During 2021, the Bank has comfortably met the required capital requirements.

As part of its Capital Management Policy, the Bank has established capital adequacy alerts and limits, which are monitored by the governance structures that the Bank has established for these purposes, including the Capital Management Committee. During 2021, none of the internal alerts defined by the Bank were activated as part of the Capital Risk Appetite Framework.

The Bank manages capital based on its strategic objectives, its risk profile and its ability to generate cash flows, as well as the economic and business context in which it operates. Consequently, the Bank may modify the amount of payment of dividends to its shareholders or issue basic capital, additional tier 1 capital or tier 2 capital instruments. The adequacy of the Bank’s capital is monitored using, among other measures, the indices and rules established by the CMF, as well as the alerts and internal limits that the Capital Management Committee and board of directors have defined for such purposes.

Capital Requirements

In accordance with the General Banking Law, the effective equity of a bank may not be less than 8% of its risk-weighted assets (RWA), net of required provisions. Additionally, it establishes that the Basic Capital may not be less than 4.5% of its APR or 3% of its total assets. Regarding Tier 1 capital, corresponding to the sum of Basic Capital, bonds with no maturity date and preferred shares, it is established that it may not be less than 6% of their RWAs, net of required provisions. Likewise, banking entities must comply, as established by current regulations or regulators, with capital buffers, such as the conservation buffer, the systemically important buffer, the countercyclical buffer and/or capital charges by pillar 2.

Adoption of the Basel III standard

In 2019, the CMF began the regulatory process for the implementation of Basel III standards in Chile, as established in Law No. 21,130 that modernizes banking legislation. During the years 2020 and 2021, the CMF promulgated the different regulations for the adequacy of the Basel III standard for local banking, which are applicable as of December 1, 2021. The regulation includes the standard methodologies to determine, among others, Credit, Operational and Market Risk-Weighted Assets, regulatory capital, leverage ratio and systemically important banks. Additionally, the regulations describe requirements and conditions applicable to: (i) the application of internal models for the calculation of certain risk-weighted assets, (ii) the issuance of hybrid capital instruments, (iii) market disclosure requirements (Pillar 3), (iv) the principles for determining capital buffers (countercyclical and conservation), (v) additional requirements to which banks defined as systemically important and (vi) the criteria to determine additional capital requirements for banks with deficiencies identified in the supervision process (Pillar 2), among others.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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48. Information on Regulatory Capital and Capital Adequacy Ratios, continued:

The aforementioned Basel III banking solvency standards consider a series of transitory regulations. These measures include: i) the gradual adoption of the conservation buffer and requirements for systemic banks, ii) the gradual application of adjustments to regulatory capital, iii) the temporary substitution of additional tier 1 capital (AT1) for tier 2 capital instruments, that is, subordinated bonds and additional provisions and iv) gradualness to continue recognizing subordinated bonds issued by banking subsidiaries as effective equity.

Below are indicators and indices applicable as of December 1, 2021:

	Total assets, risk-weighted assets and components of the	Overall consolidated		Local and Overall consolidated
	effective equity according to Basel III	Mar-2022		Dec-2021
Item No.	Item description	MCh$		MCh$
1	Total assets according to the statement of financial position		49,985,914		51,702,439
2	Non-consolidated investment in subsidiaries		—		—
3	Assets discounted from regulatory capital, other than item 2		109,800		61,953
4	Derivative credit equivalents		1,218,729		1,782,784
4.1	Financial derivative contracts		2,486,717		2,983,299
5	Contingent loans		2,595,988		2,612,170
6	Assets generated by the intermediation of financial instruments		—		—
7	= (1-2-3+4-4.1+5-6) Total assets for regulatory purposes		51,204,114		53,052,141
8.a	Credit risk weighted assets, estimated according to the standard methodology (CRWA)		27,458,583		28,280,605
8.b	Credit risk weighted assets, estimated according to internal methodologies (CRWA)		—		—
9	Market risk weighted assets (MRWA)		1,343,355		1,342,767
10	Operational risk weighted assets (ORWA)		3,116,651		2,946,980
11.a	= (8.a/8.b+9+10) Risk-weighted assets (RWA)		31,918,589		32,570,352
11.b	= (8.a/8.b+9+10) Risk-weighted assets, after application of the output floor (RWA)		31,918,589		32,570,352
12	Owner’s equity		4,199,906		4,223,013
13	Non-controlling interest		1		1
14	Goodwill		—		—
15	Excess minority investments		—		—
16	= (12+13-14-15) Core Tier 1 Capital (CET1)		4,199,907		4,223,014
17	Additional deductions to core tier 1 capital, other than item 2		—		—
18	= (16-17-2) Core Tier 1 Capital (CET1)		4,199,907		4,223,014
19	Voluntary provisions (additional) imputed as additional Tier 1 capital (AT1)		319,186		325,704
20	Subordinated bonds imputed as additional tier 1 capital (AT1)		—		—
21	Preferred shares allocated to additional tier 1 capital (AT1)		—		—
22	Bonds without a fixed term of maturity imputed to additional tier 1 capital (AT1)		—		—
23	Discounts applied to AT1		—		—
24	= (19+20+21+22-23) Additional Tier 1 Capital (AT1)		319,186		325,704
25	= (18+24) Tier 1 Capital		4,519,093		4,548,718
26	Voluntary provisions (additional) imputed as Tier 2 capital (T2)		291,066		214,548
27	Subordinated bonds imputed as Tier 2 capital (T2)		883,859		871,079
28	= (26+27) Equivalent tier 2 capital (T2)		1,174,925		1,085,627
29	Discounts applied to T2
30	= (28-29) Tier 2 capital (T2)		1,174,925		1,085,627
31	= (25+30) Effective equity		5,694,018		5,634,345
32	Additional basic capital required for the constitution of the conservation buffer		—		—
33	Additional basic capital required to set up the countercyclical buffer		—		—
34	Additional basic capital required for banks qualified as systemic		—		—
35	Additional capital required for the evaluation of the adequacy of effective equity (Pillar 2)		—		—

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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48. Information on Regulatory Capital and Capital Adequacy Ratios, continued:

Capital Adequacy Ratios and Regulatory Compliance according to Basel III	Local and Overall consolidated March-2022 %
Leverage Ratio		8.20	%
Leverage Ratio that the bank must meet, considering the minimum requirements		3	%
CET 1 Capital Ratio		13.16	%
CET 1 Capital Ratio that the bank must meet, considering the minimum requirements		4.50	%
Capital buffer shortfall		—
Tier 1 Capital Ratio		14.16	%
Tier 1 Capital Ratio that the bank must meet, considering the minimum requirements		6.00	%
Total or Regulatory Capital Ratio		17.84	%
Total or Regulatory Capital Ratio that the bank must meet, considering the minimum requirements		8.00	%
Total or Regulatory Capital Ratio that the bank must meet, considering the charge for article 35 bis		9.5	%
Total or Regulatory Capital Ratio that the bank must meet, considering the minimum requirements, conservation buffer and countercyclical buffer		8.625	%
Credit rating		A
Regulatory compliance for Capital Adequacy
Additional provisions computed in Tier 2 capital (T2) in relation to CRWA		1.06	%
Subordinated bonds computed as Tier 2 capital (T2) in relation to CET 1 Capital		21.04	%
Additional Tier 1 Capital (AT1) in relation to CET 1 Capital		7.60	%
Voluntary (additional) provisions and subordinated bonds computed as AT1 in relation to RWAs		1.00	%

Below, for comparative purposes, the amounts and ratios determined using the dispositions in effect up to November 30, 2021 are presented:

	March		December
	2022 (*)		2021(*)
	MCh$		MCh$
Basic capital		4,199,906		4,223,013
Effective equity		5,501,094		5,522,703
Consolidated assets Total		53,402,715		55,261,371
Consolidated credit risk weighted assets Total		33,386,369		34,288,733

	Ratio
	March		December
	2022 (*)		2021(*)
	%		%
Basic capital / consolidated assets		7.86		7.64
Effective equity/ Consolidated risk weighted assets		16.48		16.11

(*) Information for comparative purposes based on dispositions contained in Chapter 12-1 of the RAN.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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49. Subsequent Events:

The Interim Consolidated Financial Statements of Banco de Chile for the the period ended March 31, 2022 were approved by the Directors on April 28, 2022.

In Management’s opinion, there are no significant subsequent events that affect or could affect the Interim Consolidated Financial Statements of Banco de Chile and its subsidiaries between March 31, 2022 and the date of issuance of these Interim Consolidated Financial Statements.

Héctor Hernández G.	Eduardo Ebensperger O.
General Accounting Manager	Chief Executive Officer

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