6-K

FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

For the month of October, 2022

Commission File Number 001-15266

BANK OF CHILE
(Translation of registrant’s name into English)

Ahumada 251
Santiago, Chile
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F þ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐ No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________

BANCO DE CHILE
REPORT ON FORM 6-K

Attached Banco de Chile’s Consolidated Financial Statements with notes as of September 30, 2022.

1

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: October 27, 2022

Banco de Chile
By:	/S/ Eduardo Ebensperger O.
	Eduardo Ebensperger O.
	CEO

2

EX-99.1

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:	51
4.	Accounting Changes:	58
5.	Relevant Events:	68
6.	Business Segments:	69
7.	Cash and Cash Equivalents:	72
8.	Financial Assets Held for Trading at Fair Value through Profit or Loss:	73
9.	Non-trading Financial Assets mandatorily measured at Fair Value through Profit or Loss:	75
10.	Financial Assets and Liabilities designated as at Fair Value through Profit or Loss:	75
11.	Financial Assets at Fair Value through Other Comprehensive Income:	76
12.	Derivative Financial Instruments for hedging purposes:	79
13.	Financial assets at amortized cost:	84
14.	Investments in other companies:	110
15.	Intangible Assets:	113
16.	Property and equipment:	114
17.	Right-of-use assets and Lease liabilities:	116
18.	Taxes:	119
19.	Other Assets:	125
20.	Non-current assets and disposal groups held for sale and Liabilities included in disposal groups for sale:	126
21.	Financial liabilities held for trading at fair value through profit or loss:	127
22.	Financial liabilities at amortized cost:	128
23.	Financial instruments of regulatory capital issued:	133
24.	Provisions for contingencies:	137
25.	Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued:	142
26.	Special provisions for credit risk:	143
27.	Other Liabilities:	144
28.	Equity:	145
29.	Contingencies and Commitments:	150
30.	Interest Revenue and Expenses:	155
31.	UF indexation revenue and expenses:	158
32.	Income and Expeses from commissions:	161
33.	Net Financial income (expense):	162
34.	Income attributable to investments in other companies:	163
35.	Result from non-current assets and disposal groups held for sale not admissible as discontinued operations:	164
36.	Other operating Income and Expenses:	165
37.	Expenses from salaries and employee benefits:	166
38.	Administrative expenses:	166
39.	Depreciation and Amortization:	167
40.	Impairment of non-financial assets:	167
41.	Credit loss expense:	168
42.	Income from discontinued operations:	170
43.	Related Party Disclosures:	170
44.	Fair Value of Financial Assets and Liabilities:	176
45.	Maturity according to their remaining Terms of Financial Assets and Liabilities:	188
46.	Financial and Non-Financial Assets and Liabilities by Currency:	190
47.	Risk Management and Report:	194
48.	Information on Regulatory Capital and Capital Adequacy Ratios:	235
49.	Subsequent Events:	238

i

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

For the periods ended September 30, 2022 and December 31, 2021

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

______________

			September		December
	Notes		2022		2021
			MCh$		MCh$
ASSETS
Cash and due from banks		7		2,857,318		3,713,734
Transactions in the course of collection		7		488,526		486,700
Financial assets held for trading at fair value through profit or loss:
Derivative financial instruments		8		4,158,473		2,705,496
Debt financial instruments		8		2,183,448		3,737,942
Others		8		5,274		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		3,662,443		3,054,809
Others		11		—		—
Derivative financial instruments for hedging purposes		12		168,146		277,802
Financial assets at amortized cost:
Rights by resale agreements and securities lending		13		44,488		64,365
Debt financial instruments		13		885,951		839,744
Loans and advances to Banks		13		3,111,269		1,529,313
Loans to customers - Commercial loans		13		19,786,445		19,217,868
Loans to customers - Residential mortgage loans		13		11,136,919		10,315,921
Loans to customers - Consumer loans		13		4,400,347		3,978,079
Investments in other companies		14		59,732		52,757
Intangible assets		15		86,916		72,532
Property and equipment		16		210,311		222,320
Right-of-use assets		17		100,541		100,188
Current tax assets		18		75,562		846
Deferred tax assets		18		521,337		434,277
Other assets		19		856,833		795,461
Non-current assets and disposal groups held for sale		20		13,176		19,419
TOTAL ASSETS				54,813,455		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 September 30, 2022 and December 31, 2021

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

______________

			September			December
	Notes		2022			2021
			MCh$			MCh$
LIABILITIES
Transactions in the course of payment		7		402,356			369,980
Financial liabilities held for trading at fair value through profit or loss:
Derivative financial instruments		21		4,321,134			2,772,503
Others		21		2,742			9,610
Financial liabilities designated as at fair value through profit or loss		10		—			—
Derivative Financial Instruments for hedging purposes		12		28,930			696
Financial liabilities at amortized cost:
Current accounts and other demand deposits		22		14,298,698			18,249,881
Saving accounts and time deposits		22		12,992,748			8,803,713
Obligations by repurchase agreements and securities lending		22		201,805			85,399
Borrowings from financial institutions		22		5,360,800			4,861,865
Debt financial instruments issued		22		8,782,813			8,561,395
Other financial obligations		22		234,149			250,005
Lease liabilities		17		95,457			95,670
Financial instruments of regulatory capital issued		23		1,002,053			917,510
Provisions for contingencies		24		151,369			143,858
Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued		25		375,197			323,897
Special provisions for credit risk		26		761,441			601,574
Currents tax liabilities		18		677			113,129
Deferred tax liabilities		18		—			—
Other liabilities		27		1,115,413			1,304,119
Liabilities included in disposal groups held for sale		20		—			—
TOTAL LIABILITIES				50,127,782			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		2,608			2,469
Elements that can be reclassified in profit and loss		28		(43,415	)		36,270
Retained earnings from previous periods		28		908,572			655,478
Income for the period/year		28		1,062,823			792,191
Less: Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued		28		(375,197	)		(323,897	)
Shareholders of the Bank		28		4,685,671			4,293,521
Non-controlling interests		28		2			1
TOTAL EQUITY				4,685,673			4,293,522
TOTAL LIABILITIES AND EQUITY				54,813,455			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 September 30,
(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

______________

			For the nine-months period ended September 30,						01.07.2022 to			01.07.2021 to
	Notes		2022			2021			30.09.2022			30.09.2021
			MCh$			MCh$			MCh$			MCh$
Interest revenue		30		1,620,414			985,544			629,903			340,488
Interest expense		30		(683,201	)		(179,728	)		(316,751	)		(63,521	)
Net interest income				937,213			805,816			313,152			276,967
UF indexation revenue		31		1,683,547			518,442			599,991			195,552
UF indexation expenses		31		(911,247	)		(291,179	)		(330,063	)		(105,624	)
Net income from UF indexation				772,300			227,263			269,928			89,928
Income from commissions		32		501,230			438,520			174,285			153,243
Expenses from commissions		32		(106,051	)		(87,154	)		(36,390	)		(32,245	)
Net income from commissions				395,179			351,366			137,895			120,998
Financial income (expense) for:
Financial assets and liabilities held for trading		33		124,876			120,160			74,857			102,381
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		(57,902	)		9,358			(58,376	)		(50	)
Exchange, indexation and accounting hedging of foreign currency		33		111,449			(29,073	)		29,244			(64,746	)
Reclassification of financial assets for changes in the business model		33		—			—			—			—
Other financial result		33		—			—			—			—
Net Financial income (expense)		33		178,423			100,445			45,725			37,585
Income attributable to investments in other companies		34		8,427			(2,847	)		3,139			(353	)
Result from non-current assets and disposal groups held for sale not admissible as discontinued operations		35		(134	)		3,585			(1,194	)		820
Other operating income		36		18,729			13,932			9,541			5,141
TOTAL OPERATING INCOME				2,310,137			1,499,560			778,186			531,086
Expenses from salaries and employee benefits		37		(382,327	)		(335,929	)		(137,349	)		(111,335	)
Administrative expenses		38		(265,402	)		(239,882	)		(91,978	)		(78,115	)
Depreciation and amortization		39		(62,819	)		(57,003	)		(21,806	)		(19,235	)
Impairment of non-financial assets		40		(60	)		342			(160	)		12
Other operating expenses		36		(18,269	)		(14,513	)		(7,311	)		(6,915	)
TOTAL OPERATING EXPENSES				(728,877	)		(646,985	)		(258,604	)		(215,588	)
OPERATING RESULT BEFORE CREDIT LOSSES				1,581,260			852,575			519,582			315,498

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 September 30,
(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

______________

			For the nine-months period ended September 30,						01.07.2022 to			01.07.2021 to
	Notes		2022			2021			30.09.2022			30.09.2021
			MCh$			MCh$			MCh$			MCh$
Credit loss expense for:
Provisions for credit risk of loans and advances to banks and loans to customers		41		(194,324	)		(116,829	)		(74,504	)		(46,441	)
Special provisions for credit risk		41		(158,378	)		(144,081	)		(41,248	)		(52,538	)
Recovery of written-off credits		41		48,606			47,406			16,214			16,406
Impairments for credit risk from other financial assets at amortized cost and financial assets at fair value through other comprehensive income		41		(7,653	)		(5,381	)		(6,680	)		(6,504	)
Credit loss expense		41		(311,749	)		(218,885	)		(106,218	)		(89,077	)
NET OPERATING INCOME				1,269,511			633,690			413,364			226,421
Income from continuing operations before tax
Income tax		18		(206,686	)		(128,513	)		(73,788	)		(46,933	)
Income from continuing operations after tax				1,062,825			505,177			339,576			179,488
Income from discontinued operations before tax
Discontinued operations income tax		18		—			—			—			—
Income from discontinued operations after tax		42		—			—			—			—
NET INCOME FOR THE PERIOD		28		1,062,825			505,177			339,576			179,488
Attributable to:
Shareholders of the Bank		28		1,062,823			505,176			339,574			179,487
Non-controlling interests				2			1			2			1
Earnings per share:			$			$			$			$
Basic earnings		28		10.52			5.00			3.36			1.78
Diluted earnings		28		10.52			5.00			3.36			1.78

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 September 30,
(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

______________

			For the nine-months period ended September 30,						01.07.2022 to			01.07.2021 to
	Notes		2022			2021			30.09.2022			30.09.2021
			MCh$			MCh$			MCh$			MCh$
NET INCOME FOR THE PERIOD		28		1,062,825			505,177			339,576			179,488
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	)		500			—			130
Fair value changes of equity instruments designated as at fair value through other comprehensive income		28		199			(1,254	)		—			(435	)
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				191			(754	)		—			(305	)
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		28		(52	)		204			—			84
TOTAL OTHER COMPREHENSIVE INCOME THAT WILL NOT BE RECLASSIFIED TO INCOME AFTER TAXES		28		139			(550	)		—			(221	)
ELEMENTS THAT CAN BE RECLASSIFIED TO PROFIT OR LOSS
Fair value changes of financial assets at fair value through other comprehensive income		28		5,118			(111,710	)		13,348			(62,318	)
Cash flow hedges		28		(119,933	)		198,321			20,018			115,948
Participation in other comprehensive income of entities registered under the equity method		28		(48	)		(7	)		(48	)		(12	)
OTHER COMPREHENSIVE INCOME THAT WILL BE RECLASSIFIED TO INCOME BEFORE TAXES				(114,863	)		86,604			33,318			53,618
Income tax on other comprehensive income that can be reclassified in profit or loss		28		35,178			(50,641	)		(2,193	)		(41,737	)
TOTAL OTHER COMPREHENSIVE INCOME THAT WILL BE RECLASSIFIED TO PROFIT OR LOSS AFTER TAX		28		(79,685	)		35,963			31,125			11,881
TOTAL OTHER COMPREHENSIVE INCOME FOR THE PERIOD		28		(79,546	)		35,413			31,125			11,660
CONSOLIDATED COMPREHENSIVE INCOME FOR THE PERIOD				983,279			540,590			370,701			191,148
Attributable to:
Shareholders of the Bank				983,277			540,589			370,699			191,147
Non-controlling interests				2			1			2			1

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 September 30, 2022 and 2021

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

______________

			Attributable to shareholders of the Bank
	Note		Capital		Reserves			Accumulated other comprehnsive 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				—		—			—			(226,135	)		(226,135	)		—			(226,135	)
Subtotal: transactions with owners during the year (period)				—		—			—			(226,135	)		(226,135	)		—			(226,135	)
Income for the period 2021				—		—			—			505,176			505,176			1			505,177
Other comprehensive income for the period		28		—		—			35,413			—			35,413			—			35,413
Subtotal: Comprehensive income for the period				—		—			35,413			505,176			540,589			1			540,590
Closing balance as of 30.09.2021				2,420,538		699,800			(10,516	)		934,519			4,044,341			2			4,044,343
Common shares subscribed and paid				—		—			—			—			—			(1	)		(1	)
Provision for payment of common stock dividends				—		—			—			(97,762	)		(97,762	)		—			(97,762	)
Subtotal: transactions with owners during the period				—		—			—			(97,762	)		(97,762	)		(1	)		(97,763	)
Income for the period 2021				—		—			—			287,015			287,015			—			287,015
Other comprehensive income for the period				—		—			49,255			—			49,255			—			49,255
Subtotal:  Comprehensive income for the period				—		—			49,255			287,015			336,270			—			336,270
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
Opening balance as of al 01.01.2022				2,420,538		710,472			38,739			1,123,772			4,293,521			1			4,293,522
Common stocks subscribed and paid		28		—		—			—			(539,827	)		(539,827	)		(1	)		(539,828	)
Dividend payment os common stocks		28		—		—			—			323,897			323,897			—			323,897
Earnings reserves from previous year				—		(730	)		—			730			—			—			—
Provision for payment of common stock dividends		28		—		—			—			(375,197	)		(375,197	)		—			(375,197	)
Subtotal: transactions with owners during the year (period)				—		(730	)		—			(590,397	)		(591,127	)		(1	)		(591,128	)
Income for the period 2022				—		—			—			1,062,823			1,062,823			2			1,062,825
Other comprehensive income for the period		28		—		—			(79,546	)		—			(79,546	)		—			(79,546	)
Subtotal: Comprehensive income for the period				—		—			(79,546	)		1,062,823			983,277			2			983,279
Balances as of September 30, 2022				2,420,538		709,742			(40,807	)		1,596,198			4,685,671			2			4,685,673

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 September 30, 2022 and 2021

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

______________

			September			September
	Notes		2022			2021
			MCh$			MCh$
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit for the period before taxes				1,269,511			633,690
Income tax		18		(206,686	)		(128,513	)
Profit for the period after taxes				1,062,825			505,177
Charges (credits) to income (loss) that do not represent cash flows
Depreciation and amortization		39		62,819			57,003
Impairment of non-financial assets		40		60			(342	)
Provisiones constituted by credit risk				209,994			125,432
Provisions for contingencies		26		5,361			859
Additional provisions		41		145,000			140,000
Fair value of debt financial instruments held for trading at fair value through in profit or loss				(2,844	)		7,824
Change in deferred tax assets and liabilities		18		(84,316	)		(26,577	)
Net (income) loss from investments in companies with significant influence		14		(7,927	)		3,237
Net (income) loss on sale of assets received in payments				(3,070	)		(2,124	)
Net (income) loss on sale of sale of fixed assets				(553	)		(208	)
Write-offs of assets received in payment				5,144			1,557
Other charges (credits) that do not represent cash flows				(1,599	)		20,808
Net change in exchange rates, interest, readjustments and commissions accrued on assets and liabilities				(401,535	)		59,867
Changes due to (increase) decrease in assets and liabilities affecting the operating flow:
Net ( increase ) decrease in accounts receivable from banks				(1,579,147	)		921,370
Net ( increase ) decrease in loans and accounts receivables from customers				(588,685	)		(2,080,457	)
Net ( increase ) decrease of debt financial instruments held for trading at fair value through profit or loss				7,543			85,561
Net ( increase ) decrease in other assets and liabilities				(263,926	)		127,953
Increase ( decrease ) in deposits and other demand obligations				(3,953,440	)		2,307,159
Increase ( decrease ) in repurchase agreements and securities loans				(73,805	)		(163,883	)
Increase ( decrease ) in deposits and other time deposits				4,037,361			(125,188	)
Sale of assets received in lieu of payment				13,029			6,827
Increase ( decrease ) in  obligations with foreign banks				492,410			(92,466	)
Increase ( decrease ) in other financial obligations				(15,755	)		67,614
Increase ( decrease ) in obligations with the Central Bank of Chile				(14	)		1,237,800
Payment of other long-term loans				(91	)		(174	)
Net increase ( decrease ) of debt financial instruments at fair value through other comprehensive income				(502,210	)		(2,482,319	)
Net increase ( decrease)  of investment instruments held-to-maturity				6,257			(299,324	)
Total net cash flows provided by (used in) operating activities				(1,431,114	)		402,986
TOTAL NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Leasedhold improvements				(1,815	)		(1,191	)
Fixed assets purchase		16		(11,811	)		(27,870	)
Fixed assets sale				553			208
Acquisition of intangibles		15		(31,295	)		(20,759	)
Acquisition of investments in companies		14		—			(7,847	)
Dividend received of investments in companies				1,622			1,487
Total net cash flows from (used in) investing activities				(42,746	)		(55,972	)
CASH FLOW FROM FINANCING ACTIVITIES:
Attributable to the interest of the owners:
Redemption and payment of interest of letters of credit				(1,659	)		(1,263	)
Redemption and payment of interest on current bonds				(1,095,904	)		(1,146,515	)
Redemption and payment of interest on subordinated bonds				(34,090	)		(34,720	)
Current bonds issuance		22		350,068			765,735
Subordinated bonds issuance				—			—
Capital increase by issuance of common shares				—			—
Payment of common stock dividends		28		(539,827	)		(220,271	)
Principal and interest payments for obligations under lease contracts		17		(24,136	)		(22,988	)
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				(1	)		(1	)
Total net cash flows from (used in) financing activities				(1,345,549	)		(660,023	)
VARIATION IN CASH AND CASH EQUIVALENTS DURING THE PERIOD				(2,819,409	)		(313,009	)
Exchange variations effect				244,962			226,682
Opening balance of cash and  cash equivalent		7		7,288,827			6,088,462
Final balance of cash and  cash equivalent		7		4,714,380			6,002,135

	September			September
	2022			2021
	MCh$			MCh$
Interest operating cash flow:
Interest and readjustments received		1,696,141			1,210,855
Interest and readjustments paid		(143,201	)		108,773

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 September 30, 2022 and 2021

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

______________

Reconciliation of liabilities arising from financing activities:

			Changes other than Cash
	31.12.2021		Net Cash Flow			Acquisition / (Disposals)		Foreign currency		UF Movement		30.09.2022
	MCh$		MCh$			MCh$		MCh$		MCh$		MCh$
Letters of credit		4,114		(1,659	)		—		—		306		2,761
Bonds		9,474,791		(779,926	)		—		204,999		882,241		9,782,105
Dividends paid		—		(539,827	)		—		—		—		(539,827	)
Payments for lease agreements		95,670		(24,136	)		14,332		—		9,591		95,457
Dividend payment and/or withdrawals of paid-in capital in respect of the subsidiaries corresponding to the non-controlling interest		—		(1	)		—		—		—		(1	)
Total liabilities from financing activities		9,574,575		(1,345,549	)		14,332		204,999		892,138		9,340,495

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 September 30, 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:

(i) Controlled companies (Subsidiaries)

Interim Consolidated Financial Statements as of September 30, 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	September		December		September		December			September		December
Rut	Entity	Country	Currency	2022		2021		2022		2021			2022		2021
				%		%		%		%			%		%
96,767,630-6	Banchile Administradora General de Fondos S.A.	Chile	Ch$		99.98		99.98		0.02		0.02			100.00		100.00
96,543,250-7	Banchile Asesoría Financiera S.A.	Chile	Ch$		99.96		99.96		—		—			99.96		99.96
77,191,070-K	Banchile Corredores de Seguros Ltda.	Chile	Ch$		99.83		99.83		0.17		0.17			100.00		100.00
96,571,220-8	Banchile Corredores de Bolsa S.A.	Chile	Ch$		99.70		99.70		0.30		0.30			100.00		100.00
96,932,010-K	Banchile Securitizadora S.A. en Liquidación (*)	Chile	Ch$		—		99.01		—		0.99			—		100.00
96,645,790-2	Socofin S.A.	Chile	Ch$		99.00		99.00		1.00		1.00			100.00		100.00

(*) See Note No. 5, letter (b). 

11

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, 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:

(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 September 30, 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 September 30, 2022 and 2021 act as agent, and therefore do not consolidate any fund, no funds are part of the consolidation.

(b) 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.

13

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

(c) 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 (Notes No. 10 and No. 41)
2.	Provision for credit risk (Notes No. 13, No. 26 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 September 30, 2022 there have been no significant changes in the estimates made.

(d) 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.

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.

14

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

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.

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.

15

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

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.

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.

16

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

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.

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)

17

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

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.

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).

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.

18

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

(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.

(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.

19

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

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.

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.

20

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

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.

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.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, continued:

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.

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.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

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).

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.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, continued:

(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 mitigations. 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. To determine the aggregate exposure, the bank must consider the definition of corporate group established in Title II of Chapter 12-16 of the Actualized Standards Compilation.

Banks must carry out a complete and permanent monitoring of all operations with entities belonging to business groups. Considering the costs that may result the conformation of groups for all debtors, the bank must at least keep control and form groups, if applicable, for all debtors who maintain a current exposure greater than a minimum amount established by the banking institution which may not be greater than 1% of its effective equity at the time the definition of the group portfolio is made

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.

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.

24

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

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.

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

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, 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.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, 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).

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.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

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.

(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.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, 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 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.

(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.

29

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

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.

- 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.

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____________

2. Summary of Significant Accounting Principles, 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.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, 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.

(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.

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____________

2. Summary of Significant Accounting Principles, 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).

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, 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).

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

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.

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 effective interest rate method (EIR).

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.

35

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, 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.

(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.

36

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

(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 September 30, 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$ 969.66 US$1 (Ch$811.60 US$1 as of September 30, 2021).

The amount of Ch$178,423 million for net foreign exchange transactions, net (Ch$100,445 million as of September 30, 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.

(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.

37

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

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.

(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.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, continued:

(k) Financial derivative contracts for accounting hedges:

The Bank has chosen to continue applying the hedge accounting requirements of IAS 39 when adopting IFRS 9.

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.

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”.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, continued:

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).

(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.

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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

____________

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.

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

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

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	%

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.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, continued:

(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.

(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 September 30, 2022 and 5.70% as of December 31, 2021).

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, continued:

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.

(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 September 30, 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:

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.

− 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.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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2. Summary of Significant Accounting Principles, continued:

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 September 30, 2022, the balance of additional provisions amounts to Ch$685,252 million (Ch$540,252 million in December 2021), which are presented in the caption “Special Provisions for Credit Risk” of liabilities in the Consolidated Statement of Financial Position.

(ab) 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”).

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

2. Summary of Significant Accounting Principles, continued:

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 September 30, 2022, there have been no significant reclassifications.

50

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 Interim Consolidated Financial Statements.

As of the date of issuance of these Interim 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.

In May 2020, the IASB published a package of amendments of limited scope, 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, or an allocation of other costs that relate directly to the fulfillment of contracts.

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.

Annual Improvements to the IFRS Standards 2018-2020

On May 2020, the IASB issued the document “Annual Improvements to the IFRS Standards 2018-2020”, which contains amendments to the following International Financial Reporting Standards (IFRS):

IFRS 1 First-time Adoption of International Financial Reporting Standards - Affiliate as first time adopter: The amendment allows a subsidiary that applies paragraph D16(a) of IFRS 1 to measure cumulative translation differences using the amounts reported by its parent, based on the parent’s date of transition to IFRS.

51

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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

IFRS 9 Financial Instruments - The amendment clarifies what fees an entity includes when applying the “10 per cent” test in paragraph B3.3.6 of IFRS 9 when assessing whether a financial liability should be derecognized. An entity includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by the entity or the lender on behalf of the other.

IFRS 16 Leases - Leasing incentives: The amendment removes from Illustrative Example 13 the reimbursement of improvements to the lessor to resolve any possible confusion, which may arise, regarding the treatment of lease incentives.

The improvements to IFRS 1 and IFRS 9 are effective as of January 1, 2022, with early application permitted. The amendment to IFRS 16 only refers to an illustrative example, so it does not establish an effective date.

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.

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. This implementation 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.

52

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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

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 was 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 added 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 was 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 corresponded to: the valuation of financial assets due to the adoption of IFRS 9 in replacement of IAS 39, provisions for contingent credits as a result of the modification of the Credit Conversion Factor (CCF) and deferred taxes associated with these modifications. The foregoing had an impact of an increase in equity for a net amount of 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” was 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 was 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” was incorporated into the Information System Manual (ISM), whose purpose is that the banks 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 Bank has implemented this Circular, complying with the sending of the new regulatory file.

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 modified 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.

53

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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

The amendment introduced by the CMF seeks to provide 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 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.

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

Circular No. 2,313. Amends Chapter B-1 “Provisions for credit risk” of the CNC

On April 27, this circular was issued that establishes the modifications to chapter B-1 CNC and Risk System for the implementation of the definition of business group, to be used in the calculation of aggregate exposure for the conformation of the group portfolio. The criterion for grouping debtors came into force on July 1, 2022.

The application of this amendment did not have significant impacts for the Bank.

Circulars issued in the process of implementing the Basel III standards

During the year 2022, the CMF has issued the following regulations related to the implementation of Basel III:

On March 30, 2022, through a press release, 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 Basic Capital charge with respect to the assets weighted by 1.25% risk.

The requirements derived from the first application of this standard may be gradually constituted. The initial charge was 0% in December 2021 and will increase by 25% each year until it reaches the regime in December 2025.

Circular No. 2,311. Amends Chapter 21-6 “Determination of assets weighted by credit risk” of the RAN. On April 4, 2022, this circular was issued that establishes the amendments to chapter 21-6 in order to establish the criteria that allow assigning a preferential treatment to the exposure with an international Central Counterparty Entity (CCP).

54

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. 2,312. On April 27, 2022, the CMF for the purpose of updating the regulations associated with the measurement of market risks, in accordance with the gradual repeal of the provisions established in Chapter III.B.2.2 of the Compendium of Financial Regulations of the Central Bank, modifies Chapters 1-13 “Classification of management and solvency” and 12-21 “Measurement and control of market risks” and defines the validity of the files associated with the measurement of market risk.

Circular No. 2,314. On June 6, 2022, the CMF adjusts the instructions established in Chapter 12-20 of the RAN, Tables 87 and 88 of the MSI and regulatory file C46, in consistency with the amendments made by the Central Bank of Chile to Chapter III.B.2.1 of the Compendium of Financial Regulations, with the aim of reducing the existing gaps with the latest update of the Basel III international standard on liquidity.

Circular No. 2,318. On August 12, 2022, the CMF incorporates the new files R13 and R14, which establish information requirements, with the aim of allowing the supervision of risks not contemplated in Pillar 1, particularly, the market risk of the banking book (MRBB) and credit concentration risk (CCR) and its monitoring in the process of transition to a state in regime.

Circular No. 2,319. On September 8, the CMF issued Circular No. 2,319, which incorporates adjustments to the files “Operational Risk-Weighted Assets” (R08), “Global consolidated supplementary information” (MC1), “Individual supplementary information” (MC2), “Complementary information branch abroad” (MC3) and “Complementary local consolidated information” (MC4), respectively, together with adjustments to Table 121 of the Information System Manual (MSI) related to the measurement and supervision of the loss component used in the computation of Operational Risk-Weighted Assets.

Letter to Management. On July 5, 2022, the CMF sent a Letter to Management in which it requests to review the proper application of IFRS 9 on the recognition of a value adjustment for expected credit losses for debt financial instruments, issued by the Central Bank of Chile and the General Treasury of the Republic, measured at amortized cost and fair value with changes in other comprehensive income. As of the date of issuance of these Consolidated Financial Statements, the Bank is evaluating the model used to determine the expected credit losses for said financial instruments and estimates that, if any modification is required, it will not have a significant impact.

55

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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

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) and the CMF that are not yet effective as of September 30, 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 must 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 must 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 in order to improve the disclosures of their accounting policies and provide useful information to investors and other users of financial statements.

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 allowed. 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.

56

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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

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 allowed.

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 allowed.

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

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:

Accounting Standards issued by the CMF.

General Regulation (NCG by its Spanish initials) No. 484. Commissions in credit operations Law 18,010 and adjustments to current contracts.

On August 5, the CMF issued this General Regulation, which defines the criteria and conditions that must be met by the collections made to the debtor in a credit operation to be considered commission and not interest. By virtue of the above definitions, the CMF made modifications to RAN Chapters 2-2 on Bank Current Accounts and Checks, Chapter 8-1 on Overdraft in Bank Current Accounts, and NCGs No. 208 and No. 136.

The instructions established in this General Regulation are effective as of August 1, 2023.

The Bank is evaluating the impacts of adopting this new standard.

Other Regulations.

Law 21,420 modifies art. 2 No. 2 of DL 825 of 1974, on Sales and Services Tax (VAT).

On January 1, 2023, the legal modifications incorporated into the basic service taxable event defined in art. 2 No. 2 of DL No. 825 Law on Sales and Services Tax will come into effect. Said legal modification will imply a greater expense or a higher cost, since some contracted services are provided as of January 1, 2023, will go from not being affected to being taxed with VAT.

The Bank is evaluating the impacts of the adoption of this new Law, however, it estimates that it will not have a material impact.

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.

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, 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.

58

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

4. Accounting Changes, continued:

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.

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 in sections 4.1 to 4.6 below show the quantification of the impacts of the transition to the new standards:

4.1 Reconciliation of equity as of January 1, 2021 and December 31, 2021:

	01/01/2021			31/12/2021
	MCh$			MCh$
Equity before regulatory changes		3,726,268			4,223,014
Financial assets at amortized cost		—			57,215
Modification of provision for automatic cancellation lines of credit		—			14,621
Fair value adjustment of investments in equity instruments		4,958			3,589
Deferred taxes on adjustments		(1,338	)		(4,917	)
Subtotal adjustments		3,620			70,508
Total adjusted equity		3,729,888			4,293,522

59

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 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		—				(1,338	)	d)		356,607
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		—				3,620				46,098,751

60

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)		3,620		d)		3,070
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			—				3,620				3,729,887
Non-controlling interests		1			—				—				1
TOTAL EQUITY		3,726,268			—				3,620				3,729,888
TOTAL LIABILITIES AND EQUITY		46,095,131			—				3,620				46,098,751

61

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

4. Accounting Changes, continued:

4.3 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

62

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

63

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”.

64

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 Ch$3,620 million as of January 1, 2021 (Ch$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.

4.4 Reconciliation of the Summarized Interim Consolidated Income Statement for the period ended September 30, 2021.

	30/09/2021 Previous CNC			Reclassification			Ref.	Adjustment			Ref.	30/09/2021 Current CNC
	MCh$			MCh$				MCh$				MCh$
Interest and UF indexation revenue		1,044,518			(11,439	)	a)		—				1,033,079
Income from commissions		341,205			10,161		a)		—				351,366
Other operating income		140,283			(25,168	)	b) c) e)		—				115,115
Total operating income		1,526,006			(26,446	)			—				1,499,560
Provisions for loan losses		(223,781	)		223,781		c)		—				—
Credit loss expense		—			(213,504	)	c) d)		(5,381	)	a)		(218,885	)
Operating expenses		(660,306	)		13,321		b) d)		—				(646,985	)
Operating income		641,919			(2,848	)			(5,381	)			633,690
Income attributable to associates		(2,848	)		2,848		e)		—				—
Income before income tax		639,071			—				(5,381	)			633,690
Income tax		(129,966	)		—				1,453		a)		(128,513	)
Net Income for the period		509,105			—				(3,928	)			505,177

65

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

4. Accounting Changes, continued:

4.5 Reconciliation of the Consolidated Interim Statement of Comprehensive Income (summarized) for the period ended September 30, 2021.

	30/09/2021 Previous CNC		Reclassification		Ref.	Adjustment			Ref.	30/09/2021 Current CNC
	MCh$		MCh$			MCh$				MCh$
Net Income for the period		509,105		—			(3,928	)	a)		505,177
Other comprehensive income that will not be reclassified to income for the period		366		—			(916	)	b)		(550	)
Other comprehensive income that will be reclassified to profit for the period		32,035		—			3,928		a)		35,963
Consolidated comprehensive income for the period		541,506		—			(916	)			540,590

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.

66

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

4. Accounting Changes, continued:

4.6 Reconciliation of the Summarized Interim Consolidated Cash Flow Statement for the period ended September 30, 2021.

	30/09/2021 Previous CNC			Reclassification			Ref.	Adjustment			Ref.	30/09/2021 Current CNC
	MCh$			MCh$				MCh$				MCh$
Cash flows from operating activities :
Profit for the period		509,105			—				(3,928	)	a)		505,177
Charges (credits) to income (loss) that do not represent cash flows		141,507			241,902		a)		3,928		a)		387,337
Changes due to (increase) decrease in assets and liabilities affecting the operating flow		1,076,029			(1,565,556	)	c)		—				(489,527	)
Total cash flows provided by (used in) operating activities, net		1,726,641			(1,323,654	)			—				402,987
Cash flows from (used in) investing activities, net		(2,837,511	)		2,781,538		b) c)		—				(55,973	)
Cash flows from (used in) financing activities, net		795,572			(1,455,595	)	b) a)		—				(660,023	)
Variation in cash and cash equivalents during the period		(315,298	)		2,289				—				(313,009	)
Exchange rate variation effect		226,682			—				—				226,682
Opening balance of cash and  cash equivalent		6,088,115			347				—				6,088,462
Final balance of cash and  cash equivalent		5,999,499			2,636				—				6,002,135

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 September 30, 2022, there have been no other significant accounting changes that affect the presentation these Interim Consolidated Financial Statements.

67

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

5. Relevant Events:

(e) 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.

(f) On July 19, 2022, the Liquidation Commission of the subsidiary Banchile Securitizadora S.A. en Liquidación agreed to approve in all its parts the end of the liquidation process, the final account and the distribution of capital to its shareholders, according to its balance sheet as of June 30, 2022. This return of capital to each of the shareholders was materialized on July 29, 2022.

(g) On September 30, 2022, as reported by an essential event dated November 30, 2021, Banco de Chile, together with the rest of the shareholder banks of the banking support company “Operadora de Tarjeta de Crédito Nexus S.A.” (hereinafter, “Nexus”) reached an agreement with Minsait Payments Systems Chile S.A. (a subsidiary of the Spanish company Indra Sistemas S.A.) for the sale of 100% of the shares they own in Nexus, subject to the fulfillment or waiver of various conditions precedent, among which was the authorization of the CMF for the sale of 100% of the shares of Nexus and that the transaction was approved by the National Economic Prosecutor (hereinafter, the “Transaction”).

Having fulfilled the conditions for the closing of the Transaction, on September 30, 2022, the closing of the same has been carried out and, consequently, Minsait Payments Systems Chile S.A. has acquired 100% of Nexus shares. As of that date, the price of the Transaction amounts to Ch$8,900,682,219, notwithstanding the price adjustments and additional payments provided for in the Nexus share purchase agreement, if the milestones and conditions established therein are met.

As a result of the foregoing, Minsait, Payments Systems Chile S.A. has taken control of Nexus and Banco de Chile together with the rest of the shareholder banks have ceased to be shareholders of Nexus.

68

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:

- 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.

(*) See Note No. 5, letter (b).

69

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 from: 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 September 30, 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.

70

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 September 30, 2022 and 2021 for each of the segments defined above:

	Retail						Wholesale						Treasury						Subsidiaries						Subtotal						Consolidation adjustment						Total
	September			September			September			September			September			September			September			September			September			September			September			September			September			September
	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		1,108,690			740,056			617,362			293,716			(8,771	)		(817	)		(7,846	)		87			1,709,435			1,033,042			78			37			1,709,513			1,033,079
Net commissions income		223,430			196,787			55,320			49,467			(1,702	)		(1,639	)		129,265			117,683			406,313			362,298			(11,134	)		(10,932	)		395,179			351,366
Profit (loss) of financial operations		333			562			16,988			18,802			29,750			102,791			19,981			7,401			67,052			129,556			(78	)		(38	)		66,974			129,518
Foreign currency changes, indexation and accounting hedge		11,716			9,947			25,275			18,590			54,393			(71,944	)		20,065			14,334			111,449			(29,073	)		—			—			111,449			(29,073	)
Other income		13,701			11,601			6,970			7,575			—			—			2,501			2,155			23,172			21,331			(4,577	)		(3,814	)		18,595			17,517
Income attributable to investments in other companies		5,229			(4,571	)		2,387			1,284			255			24			556			416			8,427			(2,847	)		—			—			8,427			(2,847	)
Total operating revenue		1,363,099			954,382			724,302			389,434			73,925			28,415			164,522			142,076			2,325,848			1,514,307			(15,711	)		(14,747	)		2,310,137			1,499,560
Expenses from salaries and employee benefits		(247,864	)		(214,847	)		(73,014	)		(62,950	)		(1,817	)		(1,667	)		(59,646	)		(56,478	)		(382,341	)		(335,942	)		14			13			(382,327	)		(335,929	)
Administrative expenses		(204,081	)		(186,378	)		(49,544	)		(44,332	)		(1,347	)		(960	)		(25,295	)		(22,825	)		(280,267	)		(254,495	)		14,865			14,613			(265,402	)		(239,882	)
Depreciation and amortization		(51,375	)		(46,513	)		(6,477	)		(5,970	)		(321	)		(268	)		(4,646	)		(4,252	)		(62,819	)		(57,003	)		—			—			(62,819	)		(57,003	)
Impairment of non-financial assets		(9	)		(2	)		(122	)		—			—			—			71			344			(60	)		342			—			—			(60	)		342
Other operating expenses		(10,485	)		(10,831	)		(7,582	)		(3,714	)		—			(14	)		(1,034	)		(75	)		(19,101	)		(14,634	)		832			121			(18,269	)		(14,513	)
Total operating expenses		(513,814	)		(458,571	)		(136,739	)		(116,966	)		(3,485	)		(2,909	)		(90,550	)		(83,286	)		(744,588	)		(661,732	)		15,711			14,747			(728,877	)		(646,985	)
Expenses for credit losses (*)		(217,303	)		(151,080	)		(86,793	)		(62,424	)		(7,653	)		(5,381	)		—			—			(311,749	)		(218,885	)		—			—			(311,749	)		(218,885	)
Income from operations		631,982			344,731			500,770			210,044			62,787			20,125			73,972			58,790			1,269,511			633,690			—			—			1,269,511			633,690
Income taxes																																						(206,686	)		(128,513	)
Income after income taxes																																						1,062,825			505,177

(*) As of September 30, 2022, the retail and wholesale segments include additional provisions assigned based on their risk-weighted assets for Ch$73,907 million (Ch$83,643 million in 2021) and Ch$71,093 million (Ch$56,357 million in 2021), respectively.

The following table presents assets and liabilities of the periods ended September 30, 2022 and December 31, 2021 by each segment defined above:

	Retail				Wholesale				Treasury				Subsidiaries				Subtotal				Consolidation adjustment						Total
	September		December		September		December		September		December		September		December		September		December		September			December			September		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		21,421,563		20,519,142		13,366,780		12,806,598		18,915,671		17,412,053		687,311		954,858		54,391,325		51,692,651		(174,769	)		(369,448	)		54,216,556		51,323,203
Current and deferred taxes																												596,899		435,123
Total assets																												54,813,455		51,758,326
Liabilities		17,300,493		16,779,925		10,128,772		10,530,749		22,228,880		19,640,221		643,729		770,228		50,301,874		47,721,123		(174,769	)		(369,448	)		50,127,105		47,351,675
Current and deferred taxes																												677		113,129
Total liabilities																												50,127,782		47,464,804

71

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:

	September		December
	2022		2021
	MCh$		MCh$
Cash and due from banks:
Cash		1,090,569		1,073,601
Deposit in Chilean Central Bank (*)		395,103		1,545,472
Deposit in abroad Central Bank		—		—
Deposits in domestic banks		33,703		129,858
Deposits in abroad banks		1,337,943		964,803
Subtotal – Cash and due from banks		2,857,318		3,713,734
Net transactions in the course of settlement (**)		86,170		116,720
Others cash equivalents (***)		1,770,892		3,458,373
Total cash and cash equivalents		4,714,380		7,288,827

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

	September			December
	2022			2021
	MCh$			MCh$
Assets
Documents drawn on other banks (clearing)		106,649			123,051
Funds receivable		381,877			363,649
Subtotal - assets		488,526			486,700
Liabilities
Funds payable		(402,356	)		(369,980	)
Subtotal - liabilities		(402,356	)		(369,980	)
Net transactions in the course of settlement		86,170			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.

72

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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

The item detail is as follows:

	September		December
	2022		2021
	MCh$		MCh$
Financial derivative contracts		4,158,473		2,705,496
Debt Financial Instruments		2,183,448		3,737,942
Other financial instruments		5,274		138,753
Total		6,347,195		6,582,191

(a) The Bank as of September 30, 2022 and December 31, 2021, maintains the following asset portfolio of derivative instruments:

	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				Fair Value Assets
	September		December		September		December		September		December		September		December		September		December		September		December		September		December		September		December		September		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		—		—		4,151,835		3,576,287		2,526,235		2,684,713		4,344,887		4,847,747		916,495		782,755		38,309		70,262		19,393		18,758		11,997,154		11,980,522		903,092		742,545
Interest rate swap		—		—		880,707		653,112		1,195,290		2,158,595		6,363,706		4,953,398		5,537,320		6,053,885		3,779,226		3,627,267		5,239,093		5,350,526		22,995,342		22,796,783		1,810,793		825,525
Interest rate and cross currency swap		—		—		152,869		130,280		332,908		335,102		1,385,409		1,091,777		2,438,566		2,197,804		1,503,321		1,751,790		2,546,299		2,580,685		8,359,372		8,087,438		1,434,776		1,132,718
Call currency options		—		—		11,649		12,853		35,698		31,914		56,008		28,495		2,909		2,631		—		—		—		—		106,264		75,893		9,341		4,509
Put currency options		—		—		5,611		6,495		25,854		8,191		19,110		16,392		—		—		—		—		—		—		50,575		31,078		471		199
Total		—		—		5,202,671		4,379,027		4,115,985		5,218,515		12,169,120		10,937,809		8,895,290		9,037,075		5,320,856		5,449,319		7,804,785		7,949,969		43,508,707		42,971,714		4,158,473		2,705,496

73

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:

	September		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		1,742,758		3,297,100
Bonds and Promissory notes from the General Treasury of the Republic		102,381		175,022
Other fiscal debt financial instruments		—		—
Other Instruments Issued in Chile
Debt financial instruments from other domestic banks		338,309		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		2,183,448		3,737,942

As of September 30, 2022 under instruments of the State and Central Bank of Chile are classified instruments sold under repurchase agreements to clients and financial institutions (there are no documents sold with a repurchase agreement as of December 31, 2021). Additionally, instruments are maintained under this item to comply with the technical reserve constitution requirements for an amount equivalent to Ch$3,288,800 million as of December 31, 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$201,012 million as of September 30, 2022 (Ch$84,969 million in December 2021). The repurchase agreements have an average maturity of 5 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$3,056 million as of September 30, 2022 (Ch$3,832 million in December 2021), which are presented as a reduction of the liability item “Debt Financial Instruments Issued”.

74

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:

	September		December
	2022		2021
	MCh$		MCh$
Mutual fund investments
Funds managed by related companies		2		125,145
Funds managed by third-party		—		—
Equity instruments
Domestic equity instruments		2,580		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		2,692		10,546
Total		5,274		138,753

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

As of September 30, 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 September 30, 2022 and December 31, 2021, the Bank does not hold financial assets and liabilities designated as at fair value through profit or loss.

75

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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

The item detail is as follows:

	September		December
	2022		2021
	MCh$		MCh$
Debt Financial Instruments		3,662,443		3,054,809
Other financial instruments		—		—
Total		3,662,443		3,054,809

(a) As of September 30, 2022 and December 31, 2021, the detail of debt financial instruments is as follows:

	September		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 General Treasury of the Republic		2,178,244		2,480,423
Other fiscal debt financial instruments		5,551		8,325
Other Instruments Issued in Chile
Debt financial instruments from other domestic banks		1,304,315		538,486
Bonds and trade effects from domestic companies		31,876		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		142,457		—
Bonds and trade effects from foreign companies		—		—
Other debt financial instruments issued abroad		—		—
Total		3,662,443		3,054,809

76

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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

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$716 million in September, 2022 (Ch$351 million in December 2021). The repurchase agreements have an average maturity of 4 days in September 2022 (4 days in December 2021). As part of the FCIC program, instruments delivered as collateral are included for an approximate amount of Ch$255,860 million as of September 30, 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$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$44,279 million as of September, 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$513,172 as of September 30, 2022 (Ch$185,417 million as of December 31, 2021).

As of September 30, 2022 the accumulated credit impairment for debt instruments at fair value through other comprehensive income was Ch$11,186 million (Ch$4,085 million as of December 31, 2021).

a.1) The credit rating of the issuers of debt instruments as of September 30, 2022 and December 31, 2021 is as follows:

	September 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		3,662,443		—		—		3,662,443		3,054,795		14		—		3,054,809
No investment grade		—		—		—		—		—		—		—		—
No rating		—		—		—		—		—		—		—		—
Total		3,662,443		—		—		3,662,443		3,054,795		14		—		3,054,809

77

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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

a.2) The analysis of changes in fair value and expected losses 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
Balance as of January 1, 2022		3,054,795			4,085			14			—			—		—		3,054,809			4,085
Net change in balance		602,530			7,101			(14	)		—			—		—		602,516			7,101
Change in fair value		5,118			—			—			—			—		—		5,118			—
Transfer to Phase 1		—			—			—			—			—		—		—			—
Transfer to Phase 2		—			—			—			—			—		—		—			—
Transfer to Phase 3		—			—			—			—			—		—		—			—
Impact due to transfer between phases		—			—			—			—			—		—		—			—
Net impact due to impairment		—			—			—			—			—		—		—			—
Balance as of September 30, 2022		3,662,443			11,186			—			—			—		—		3,662,443			11,186

(b) Realized and unrealized gains and losses:

As of September 30, 2022, the portfolio of debt financial instruments includes an accumulated unrealized loss of Ch$42,690 millones (accumulated unrealized loss of Ch$47,808 million in December 2021), recorded as an equity valuation adjustment.

Gross realized gains and losses on the sale of debt financial instruments, as of September 30, 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:

	September			September
	2022			2021
	MCh$			MCh$
Unrealized (losses) gains		(52,783	)		(107,018	)
Realized losses (gains) reclassified to income		57,901			(4,692	)
Subtotal		5,118			(111,710	)
Income tax on other comprehensive income		2,796			2,904
Net effect in equity		7,914			(108,806	)

78

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

12. Derivative Financial Instruments for hedging purposes:

(a.1) As of September 30, 2022 and December 31, 2021, the Bank has the following asset 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				Fair value Assets
	September		December		September		December		September		December		September		December		September		December		September		December		September		December		September		December		September		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$
Derivatives held for fair value hedges
Currency forward		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Interest rate swap		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Interest rate swap and cross currency swap		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Call currency options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Put currency options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Cash flow hedge derivatives
Currency forward		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Interest rate swap		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Interest rate swap and cross currency swap		—		—		—		—		—		—		64,081		35,706		292,845		322,894		72,323		108,759		1,025,089		895,312		1,454,338		1,362,671		168,146		277,802
Call currency options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Put currency options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		—		—		—		64,081		35,706		292,845		322,894		72,323		108,759		1,025,089		895,312		1,454,338		1,362,671		168,146		277,802
Total		—		—		—		—		—		—		64,081		35,706		292,845		322,894		72,323		108,759		1,025,089		895,312		1,454,338		1,362,671		168,146		277,802

79

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

12. Derivative Financial Instruments for hedging purposes, continued:

(a.2) As of September 30, 2022 and December 31, 2021, the Bank has the following debt 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				Fair value Liabilities
	September		December		September		December		September		December		September		December		September		December		September		December		September		December		September		December		September		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$
Derivatives held for fair value hedges
Currency forward		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Interest rate swap		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Interest rate swap and cross currency swap		—		—		—		—		—		—		—		1,788		—		—		—		—		—		—		—		1,788		—		608
Call currency options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Put currency options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		—		—		—		—		1,788		—		—		—		—		—		—		—		1,788		—		608
Cash flow hedge derivatives
Currency forward		—		—		—		—		—		3,099		—		—		—		—		—		—		—		—		—		3,099		—		88
Interest rate swap		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Interest rate swap and cross currency swap		—		—		—		—		—		—		—		—		—		—		173,927		—		326,812		—		500,739		—		28,930		—
Call currency options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Put currency options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		—		—		3,099		—		—		—		—		173,927		—		326,812		—		500,739		3,099		28,930		88
Total		—		—		—		—		—		3,099		—		1,788		—		—		173,927		—		326,812		—		500,739		4,887		28,930		696

80

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 September 30, 2022 and December 31, 2021:

	September		December
	2022		2021
	MCh$		MCh$
Hedge element
Commercial loans		—		1,788
Corporate bonds		—		—
Hedge instrument
Cross currency swap		—		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.

81

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
	September		December		September			December			September			December			September			December			September			December			September			December			September			December			September			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		—		—		—			—			(741	)		—			(858	)		(1,626	)		(3,198	)		(3,252	)		(47,060	)		(47,854	)		(54,588	)		(56,380	)		(106,445	)		(109,112	)
Corporate Bond HKD		—		—		(7,522	)		—			—			—			(96,904	)		(15,897	)		(30,309	)		(105,828	)		(96,833	)		(91,271	)		(348,836	)		(309,896	)		(580,404	)		(522,892	)
Corporate Bond PEN		—		—		—			—			—			(841	)		(6,921	)		(841	)		(11,338	)		(3,366	)		(12,884	)		(3,366	)		(181,358	)		(43,383	)		(212,501	)		(51,797	)
Corporate Bond CHF		—		—		—			(64	)		(1,013	)		—			(404	)		(958	)		(263,222	)		(249,008	)		(128,861	)		(764	)		—			(121,521	)		(393,500	)		(372,315	)
Corporate Bond USD		—		—		(1,032	)		—			(7,248	)		—			(8,280	)		(1,814	)		(33,120	)		(3,629	)		(33,120	)		(3,629	)		(601,641	)		(46,260	)		(684,441	)		(55,332	)
Obligation USD		—		—		—			—			(206	)		—			(205	)		(427	)		(68,084	)		(60,047	)		—			—			—			—			(68,495	)		(60,474	)
Corporate Bond JPY		—		—		—			—			(844	)		(130	)		(1,079	)		(39,208	)		(3,845	)		(4,249	)		(3,845	)		(4,249	)		(217,970	)		(242,020	)		(227,583	)		(289,856	)
Corporate Bond AUD		—		—		—			—			(1,781	)		(1,220	)		(4,277	)		(4,794	)		(11,600	)		(12,024	)		(9,805	)		(12,023	)		(265,377	)		(264,901	)		(292,840	)		(294,962	)
Corporate Bond NOK		—		—		—			—			(2,437	)		—			—			(2,646	)		(4,874	)		(5,292	)		(4,874	)		(5,292	)		(74,159	)		(80,515	)		(86,344	)		(93,745	)
Hedge instrument
Inflows:
Cross Currency Swap EUR		—		—		—			—			741			—			858			1,626			3,198			3,252			47,060			47,854			54,588			56,380			106,445			109,112
Cross Currency Swap HKD		—		—		7,522			—			—			—			96,904			15,897			30,309			105,828			96,833			91,271			348,836			309,896			580,404			522,892
Cross Currency Swap PEN		—		—		—			—			—			841			6,921			841			11,338			3,366			12,884			3,366			181,358			43,383			212,501			51,797
Cross Currency Swap CHF		—		—		—			64			1,013			—			404			958			263,222			249,008			128,861			764			—			121,521			393,500			372,315
Cross Currency Swap USD		—		—		1,032			—			7,248			—			8,280			1,814			33,120			3,629			33,120			3,629			601,641			46,260			684,441			55,332
Cross Currency Swap USD		—		—		—			—			206			—			205			427			68,084			60,047			—			—			—			—			68,495			60,474
Cross Currency Swap JPY		—		—		—			—			844			130			1,079			39,208			3,845			4,249			3,845			4,249			217,970			242,020			227,583			289,856
Cross Currency Swap AUD		—		—		—			—			1,781			1,220			4,277			4,794			11,600			12,024			9,805			12,023			265,377			264,901			292,840			294,962
Cross Currency Swap NOK		—		—		—			—			2,437			—			—			2,646			4,874			5,292			4,874			5,292			74,159			80,515			86,344			93,745
Net cash flows		—		—		—			—			—			—			—			—			—			—			—			—			—			—			—			—

82

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
	September		December		September			December			September			December			September			December			September			December			September			December			September			December			September			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		—		—		5,006			537			10,459			4,031			88,031			59,853			363,038			370,886			424,695			144,432			1,365,624			968,900			2,256,853			1,548,639
Hedge instrument
Outflows:
Cross Currency Swap HKD		—		—		(4,173	)		(171	)		—			—			(70,685	)		(9,630	)		(17,341	)		(75,575	)		(206,883	)		(79,358	)		(112,982	)		(214,067	)		(412,064	)		(378,801	)
Cross Currency Swap PEN		—		—		—			—			—			(51	)		(1,498	)		(52	)		(2,999	)		(207	)		(2,995	)		(206	)		(113,211	)		(33,974	)		(120,703	)		(34,490	)
Cross Currency Swap JPY		—		—		—			—			(1,953	)		(341	)		(2,677	)		(40,029	)		(9,272	)		(8,388	)		(9,259	)		(8,376	)		(276,284	)		(252,362	)		(299,445	)		(309,496	)
Cross Currency Swap USD		—		—		(386	)		—			(4,983	)		—			(5,343	)		(1,104	)		(82,832	)		(57,936	)		(20,536	)		(1,402	)		(518,443	)		(39,368	)		(632,523	)		(99,810	)
Cross Currency Swap CHF		—		—		—			(366	)		(2,313	)		—			(4,730	)		(5,281	)		(241,076	)		(220,166	)		(129,651	)		(4,387	)		—			(115,104	)		(377,770	)		(345,304	)
Cross Currency Swap EUR		—		—		(447	)		—			(676	)		—			(1,120	)		(2,028	)		(4,499	)		(4,070	)		(50,355	)		(46,165	)		(52,215	)		(47,638	)		(109,312	)		(99,901	)
Cross Currency Swap AUD		—		—		—			—			(163	)		(540	)		(1,614	)		(1,064	)		(3,547	)		(3,212	)		(3,546	)		(3,208	)		(216,292	)		(197,125	)		(225,162	)		(205,149	)
Cross Currency Swap NOK		—		—		—			—			(371	)		—			(364	)		(665	)		(1,472	)		(1,332	)		(1,470	)		(1,330	)		(76,197	)		(69,262	)		(79,874	)		(72,589	)
Forward UF		—		—		—			—			—			(3,099	)		—			—			—			—			—			—			—			—			—			(3,099	)
Net cash flows		—		—		—			—			—			—			—			—			—			—			—			—			—			—			—			—

83

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$119,933 million (credit to equity of Ch$198,321 million in September 2021). The net effect of taxes charge to equity amounts to Ch$87,551 million (credit to equity of Ch$144,775 million during the period September 2021).

The accumulated balance for this concept as of September 30, 2022 corresponds to a charge in equity amounted to Ch$8,239 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$17,292 million during the period 2022 (credit to results for Ch$87,893 million during the period September 2021).

(c.5) As of September 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 September 30, 2022 and 2021, the Bank does not have hedges of net investments in foreign business.

13. Financial assets at amortized cost:

The item detail is as follows:

	September			Dicember
	2022			2021
	MCh$			MCh$
Rights by resale agreements and securities lending		44,488			64,365
Debt financial instruments		885,951			839,744
Loans and advances to Banks		3,111,269			1,529,313
Loans to customers:
Commercial loans		20,211,364			19,634,756
Residential mortgage loans		11,164,422			10,346,652
Consumer loans		4,709,681			4,248,709
Provisions established for credit risk:
Commercial loans provisions		(424,919	)		(416,888	)
Mortgage loans provisions		(27,503	)		(30,731	)
Consumer loans provisions		(309,334	)		(270,630	)
Total		39,365,419			35,945,290

84

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

13. Financial assets at amortized cost, continued:

(a) Rights arising from resale agreements:

The Bank provides financing to its customers through resale agreements and securities lending, in which the financial instrument serves as collateral. As of September 30, 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
	September		December		September		December		September		December		September		December		September		December		September		December		September		December		September		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		—		—		29,962		37,763		9,072		14,013		5,454		12,589		—		—		—		—		—		—		44,488		64,365
Subtotal		—		—		29,962		37,763		9,072		14,013		5,454		12,589		—		—		—		—		—		—		44,488		64,365
Financial Instruments issued by foreign institutions
Instruments from foreign governments or Central Bank		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Other instruments from foreign		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Total		—		—		29,962		37,763		9,072		14,013		5,454		12,589		—		—		—		—		—		—		44,488		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 September 30, 2022, the fair value of the instruments received amounts to Ch$42,298 million (Ch$65,531 million in December 2021).

85

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:

	September		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 General Treasury of the Republic		885,951		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		885,951		839,744

Under Instruments of the Government and the Central Bank of Chile, instruments are classified pledged as collateral as part of the FCIC program are included for an approximate amount of Ch$578,050 million as of September 30, 2022 (Ch$456,057 million as of December 31, 2021).

86

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					Net
	Individual		Individual		Individual				Individual			Individual		Individual					Financial
As of September 30,  2022	Evaluation		Evaluation		Evaluation		Total		Evaluation			Evaluation		Evaluation		Total			Asset
	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		211,169		—		—		211,169		(462	)		—		—		(462	)		210,707
Current accounts overdrafts		—		—		—		—		—			—		—		—			—
Chilean exports foreign trade loans		99,411		—		—		99,411		(163	)		—		—		(163	)		99,248
Chilean imports foreign trade loans		—		—		—		—		—			—		—		—			—
Credits with third countries		497		—		—		497		—			—		—		—			497
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		311,077		—		—		311,077		(625	)		—		—		(625	)		310,452
Central Bank of Chile
Current account deposits for derivative transactions with a counterparty		—		—		—		—		—			—		—		—			—
Other deposits not available		2,800,817		—		—		2,800,817		—			—		—		—			2,800,817
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		2,800,817		—		—		2,800,817		—			—		—		—			2,800,817
Total		3,111,894		—		—		3,111,894		(625	)		—		—		(625	)		3,111,269

87

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					Net
	Individual		Individual		Individual				Individual			Individual		Individual					Financial
As of December 31,  2021	Evaluation		Evaluation		Evaluation		Total		Evaluation			Evaluation		Evaluation		Total			Asset
	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

88

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
Loans to Customers	Evaluation				Evaluation		Evaluation						Evaluation						Evaluation			Evaluation									Fogape						Financial
As of September 30, 2022	Individual		Group		Individual		Individual		Group		Total		Individual			Group			Individual			Individual			Group			Sub Total			Covid-19			Total			Asset
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Commercial loans
Commercial loans		11,229,533		3,991,315		243,975		132,402		267,521		15,864,746		(100,294	)		(37,085	)		(19,638	)		(51,158	)		(87,008	)		(295,183	)		(32,438	)		(327,621	)		15,537,125
Chilean exports foreign trade loans		836,998		4,223		6,526		8,347		710		856,804		(21,986	)		(140	)		(283	)		(4,871	)		(338	)		(27,618	)		—			(27,618	)		829,186
Accrediting foreign trade loans negotiated in terms of Chilean imports		2,699		—		—		—		—		2,699		(120	)		—			—			—			—			(120	)		—			(120	)		2,579
Chilean imports foreign trade loans		789,998		49,826		7,925		3,984		1,808		853,541		(24,362	)		(1,369	)		(416	)		(2,213	)		(1,002	)		(29,362	)		—			(29,362	)		824,179
Current account debtors		97,712		85,327		6,050		1,303		1,053		191,445		(2,408	)		(2,023	)		(687	)		(664	)		(516	)		(6,298	)		—			(6,298	)		185,147
Credit card debtors		18,302		56,676		706		496		4,271		80,451		(749	)		(1,673	)		(119	)		(291	)		(2,320	)		(5,152	)		—			(5,152	)		75,299
Factoring transactions		510,169		31,045		3,934		187		77		545,412		(8,850	)		(819	)		(344	)		(121	)		(28	)		(10,162	)		—			(10,162	)		535,250
Commercial lease transactions (1)		1,382,908		280,917		49,517		10,667		8,441		1,732,450		(2,521	)		(3,477	)		(86	)		(2,318	)		(1,209	)		(9,611	)		(1,167	)		(10,778	)		1,721,672
Student loans		—		57,257		—		—		2,763		60,020		—			(2,647	)		—			—			(1,952	)		(4,599	)		—			(4,599	)		55,421
Other loans and accounts receivable		7,157		9,408		267		5,676		1,288		23,796		(231	)		(4	)		(41	)		(2,516	)		(417	)		(3,209	)		—			(3,209	)		20,587
Subtotal		14,875,476		4,565,994		318,900		163,062		287,932		20,211,364		(161,521	)		(49,237	)		(21,614	)		(64,152	)		(94,790	)		(391,314	)		(33,605	)		(424,919	)		19,786,445
Residential mortgage loans
Letters of credit		—		4,210		—		—		183		4,393		—			(3	)		—			—			(9	)		(12	)		—			(12	)		4,381
Endorsable mortgage loans		—		14,969		—		—		377		15,346		—			(13	)		—			—			(28	)		(41	)		—			(41	)		15,305
Loans with mutual funds financed by mortgage bonds		—		—		—		—		—		—		—			—			—			—			—			—			—			—			—
Other residential lending		—		10,803,352		—		—		179,661		10,983,013		—			(12,961	)		—			—			(12,949	)		(25,910	)		—			(25,910	)		10,957,103
Residential lease transactions (1)		—		—		—		—		—		—		—			—			—			—			—			—			—			—			—
Other loans and accounts receivable		—		155,763		—		—		5,907		161,670		—			(596	)		—			—			(944	)		(1,540	)		—			(1,540	)		160,130
Subtotal		—		10,978,294		—		—		186,128		11,164,422		—			(13,573	)		—			—			(13,930	)		(27,503	)		—			(27,503	)		11,136,919
Consumer loans
Consumer loans in installments		—		2,901,631		—		—		172,943		3,074,574		—			(137,375	)		—			—			(108,503	)		(245,878	)		—			(245,878	)		2,828,696
Current account debtors		—		227,870		—		—		3,141		231,011		—			(8,462	)		—			—			(1,571	)		(10,033	)		—			(10,033	)		220,978
Credit card debtors		—		1,375,663		—		—		26,899		1,402,562		—			(35,645	)		—			—			(16,788	)		(52,433	)		—			(52,433	)		1,350,129
Consumer lease transactions (1)		—		510		—		—		—		510		—			(5	)		—			—			—			(5	)		—			(5	)		505
Other loans and accounts receivable		—		16		—		—		1,008		1,024		—			(5	)		—			—			(980	)		(985	)		—			(985	)		39
Subtotal		—		4,505,690		—		—		203,991		4,709,681		—			(181,492	)		—			—			(127,842	)		(309,334	)		—			(309,334	)		4,400,347
Total		14,875,476		20,049,978		318,900		163,062		678,051		36,085,467		(161,521	)		(244,302	)		(21,614	)		(64,152	)		(236,562	)		(728,151	)		(33,605	)		(761,756	)		35,323,711

(1) In this item, the Bank finances its clients the acquisition of movable and immovable property through financial lease agreements. As of September 30, 2022 Ch$883,468 million correspond to finance leases on immovable property and Ch$849,492 million correspond to finance leases on movable property.

89

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
Loans to Customers	Evaluation				Evaluation		Evaluation						Evaluation						Evaluation			Evaluation									Fogape						Financial
As of December 31, 2021	Individual		Group		Individual		Individual		Group		Total		Individual			Group			Individual			Individual			Group			Sub Total			Covid-19			Total			Asset
	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
Accrediting foreign trade loans negotiated in terms of Chilean imports		2,950		—		—		—		—		2,950		(128	)		—			—			—			—			(128	)		—			(128	)		2,822
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
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.

90

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																		Net exposure
	Normal Portfolio				Substandard Portfolio		Non-Complying Portfolio						Normal Portfolio						Substandard Portfolio			Non-Complying Portfolio									for credit risk of
	Evaluation				Evaluation		Evaluation						Evaluation						Evaluation			Evaluation									contingent
As of September 30, 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		526,063		601		8,154		54		—		534,872		(4,161	)		(8	)		(3,365	)		(22	)		—			(7,556	)		527,316
Letters of credit for goods circulation operations		678,518		746		—		—		—		679,264		(1,208	)		(3	)		—			—			—			(1,211	)		678,053
Commitments to purchase local currency debt abroad		—		—		—		—		—		—		—			—			—			—			—			—			—
Contingent event transactions		2,278,831		50,825		111,181		2,348		270		2,443,455		(26,320	)		(511	)		(9,246	)		(854	)		(132	)		(37,063	)		2,406,392
Undrawn credit lines with immediate termination		1,237,767		8,399,359		4,576		660		16,022		9,658,384		(2,067	)		(4,156	)		(60	)		(400	)		(8,294	)		(14,977	)		9,643,407
Undrawn credit lines		—		—		—		—		—		—		—			—			—			—			—			—			—
Credits for Higher Education Law No. 20,027 (CAE)		—		—		—		—		—		—		—			—			—			—			—			—			—
Other irrevocable loan commitments		—		—		—		—		—		—		—			—			—			—			—			—			—
Other contingent loans		53,358		—		—		—		—		53,358		(29	)		—			—			—			—			(29	)		53,329
Total		4,774,537		8,451,531		123,911		3,062		16,292		13,369,333		(33,785	)		(4,678	)		(12,671	)		(1,276	)		(8,426	)		(60,836	)		13,308,497

	Outstanding exposure before provisions												Provisions established																		Net exposure
	Normal Portfolio				Substandard Portfolio		Non-Complying Portfolio						Normal Portfolio						Substandard Portfolio			Non-Complying Portfolio									for credit risk of
	Evaluation				Evaluation		Evaluation						Evaluation						Evaluation			Evaluation									contingent
As of December 31, 2021	Individual		Group		Individual		Individual				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

91

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:		(55	)		—		—		(55	)
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		1,230			—		—		1,230
New credits for conversion of contingent to loan		—			—		—		—
New assets purchased		—			—		—		—
Sales or transfers of credits		—			—		—		—
Payment of credit		(1,133	)		—		—		(1,133	)
Provisions for write-offs		—			—		—		—
Recovery of written-off loans		—			—		—		—
Foreign exchange adjustments		64			—		—		64
Other changes in allowances		—			—		—		—
Balance as of September 30, 2022		625			—		—		625

92

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		807			—		—		807
New credits for conversion of contingent to loan		—			—		—		—
New assets purchased		—			—		—		—
Sales or transfers of credits		—			—		—		—
Payment of credit		(1,004	)		—		—		(1,004	)
Provisions for write-offs		—			—		—		—
Recovery of written-off loans		—			—		—		—
Foreign exchange adjustments		60			—		—		60
Other changes in allowances		—			—		—		—
Balance as of September 30, 2021		517			—		—		517
Balance as of December 31, 2021		519			—		—		519

93

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 Warranties
	Evaluation						Substandard			Evaluation						Sub total						FOGAPE
	Group			Individual			Portfolio			Group			Individual			Group			Individual			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:		15,205			22,562			1,970			15,821			18,005			31,026			42,537			—			73,563
Change in measurement without portfolio reclassification from the beginning to the end of the period (portfolio from (-) until (+)):
Transfer from Normal individual to Substandard		—			(2,602	)		18,011			—			—			—			15,409			—			15,409
Transfer from Normal individual to Non-Complying individual		—			(398	)		—			—			3,133			—			2,735			—			2,735
Transfer from Substandard to Non-Complying individual		—			—			(1,664	)		—			5,395			—			3,731			—			3,731
Transfer from Substandard to Normal individual		—			746			(585	)		—			—			—			161			—			161
Transfer from Non-Complying individual to Substandard		—			—			32			—			(208	)		—			(176	)		—			(176	)
Transfer from Non-Complying individual to Normal individual		—			1			—			—			—			—			1			—			1
Transfer from Normal group to Non-Complying group		(11,894	)		—			—			25,124			—			13,230			—			—			13,230
Transfer from Non-Complying group to Normal group		1,474			—			—			(7,874	)		—			(6,400	)		—			—			(6,400	)
Transfer from Individual (normal, substandard, non-complying) to Group (normal, non-complying)		—			—			—			—			—			—			—			—			—
Transfer from Group (normal, non-complying) to Individual (normal, substandard, non-complying)		(2,005	)		2,382			335			(226	)		73			(2,231	)		2,790			—			559
New assets originated		20,048			124,273			4,838			8,855			14,378			28,903			143,489			20			172,412
New credits for conversion of contingent to loan		4,149			6,187			759			327			292			4,476			7,238			—			11,714
New assets purchased		—			—			—			—			—			—			—			—			—
Sales or transfers of credits		—			—			—			—			—			—			—			—			—
Payment of credit		(30,694	)		(148,277	)		(8,303	)		(23,596	)		(41,133	)		(54,290	)		(197,713	)		(14,949	)		(266,952	)
Provisions for write-offs		(4	)		—			—			(11,118	)		(12,723	)		(11,122	)		(12,723	)		—			(23,845	)
Recovery of written-off loans		209			—			—			—			—			209			—			—			209
Changes to models and assumptions		—			—			—			—			—			—			—			—			—
Foreign exchange adjustments		237			7,943			100			137			3,263			374			11,306			—			11,680
Other changes in allowances		—			—			—			—			—			—			—			—			—
Balance as of September 30,  2022		49,237			161,521			21,614			94,790			64,152			144,027			247,287			33,605			424,919

94

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 Warranties
	Evaluation						Substandard			Evaluation						Sub total						FOGAPE
	Group			Individual			Portfolio			Group			Individual			Group			Individual			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:		59,410			22,633			1,316			26,189			11,075			85,599			35,024			—		120,623
Change in measurement without portfolio reclassification from the beginning to the end of the period (portfolio from (-) until (+)):
Transfer from Normal individual to Substandard		—			(856	)		1,439			—			—			—			583			—		583
Transfer from Normal individual to Non-Complying individual		—			(148	)		—			—			1,396			—			1,248			—		1,248
Transfer from Substandard to Non-Complying individual		—			—			(1,587	)		—			2,894			—			1,307			—		1,307
Transfer from Substandard to Normal individual		—			186			(319	)		—			—			—			(133	)		—		(133	)
Transfer from Non-Complying individual to Substandard		—			—			17			—			(135	)		—			(118	)		—		(118	)
Transfer from Non-Complying individual to Normal individual		—			6			—			—			(158	)		—			(152	)		—		(152	)
Transfer from Normal group to Non-Complying group		(10,985	)		—			—			24,257			—			13,272			—			—		13,272
Transfer from Non-Complying group to Normal group		3,519			—			—			(12,243	)		—			(8,724	)		—			—		(8,724	)
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)		(2,293	)		2,137			191			(1,412	)		798			(3,705	)		3,126			—		(579	)
New assets originated		26,539			135,899			2,921			10,632			23,692			37,171			162,512			—		199,683
New credits for conversion of contingent to loan		7,362			4,990			305			510			319			7,872			5,614			—		13,486
New assets purchased		—			—			—			—			—			—			—			—		—
Sales or transfers of credits		—			—			—			—			(14,457	)		—			(14,457	)		—		(14,457	)
Payment of credit		(90,915	)		(168,065	)		(6,104	)		(29,414	)		(38,376	)		(120,329	)		(212,545	)		—		(332,874	)
Provisions for write-offs		(44	)		—			—			(26,694	)		(7,336	)		(26,738	)		(7,336	)		—		(34,074	)
Recovery of written-off loans		109			—			—			—			—			109			—			—		109
Changes to models and assumptions		—			—			—			—			—			—			—			—		—
Foreign exchange adjustments		278			5,394			147			373			4,629			651			10,170			—		10,821
Other changes in allowances		—			—			—			—			—			—			—			24,811		24,811
Balance as of September 30, 2021		55,377			145,829			4,866			87,546			75,030			142,923			225,725			48,920		417,568
Balance as of December 31, 2021		52,512			148,704			6,121			87,340			73,677			139,852			228,502			48,534		416,888

95

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:		3,795			1,749			5,544
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		(1,818	)		4,361			2,543
Transfer from Non-Complying group to Normal group		1,707			(9,262	)		(7,555	)
New assets originated		989			279			1,268
New assets purchased		—			—			—
Sales or transfers of credits		—			—			—
Payment of credit		(612	)		(3,003	)		(3,615	)
Provisions for write-offs		—			(1,413	)		(1,413	)
Recovery of written-off loans		—			—			—
Changes to models and assumptions		—			—			—
Foreign exchange adjustments		—			—			—
Other changes in allowances		—			—			—
Balance as of September 30,  2022		13,573			13,930			27,503

96

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:		10,938			5,136			16,074
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		(1,435	)		2,347			912
Transfer from Non-Complying group to Normal group		801			(2,487	)		(1,686	)
New assets originated		1,246			410			1,656
New assets purchased		—			—			—
Sales or transfers of credits		—			—			—
Payment of credit		(9,518	)		(7,868	)		(17,386	)
Provisions for write-offs		—			(1,071	)		(1,071	)
Recovery of written-off loans		—			—			—
Changes to models and assumptions		—			—			—
Foreign exchange adjustments		—			—			—
Other changes in allowances		—			—			—
Balance as of  September 30, 2021		15,632			16,631			32,263
Balance as of December 31, 2021		9,512			21,219			30,731

97

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:		75,821			84,502			160,323
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		(56,399	)		76,523			20,124
Transfer from Non-Complying group to Normal group		6,630			(28,660	)		(22,030	)
New assets originated		70,352			29,159			99,511
New credits for conversion of contingent to loan		34,971			3,893			38,864
New assets purchased		—			—			—
Sales or transfers of credits		—			—			—
Payment of credit		(92,578	)		(96,878	)		(189,456	)
Provisions for write-offs		(6	)		(68,741	)		(68,747	)
Recovery of written-off loans		—			—			—
Changes to models and assumptions		—			—			—
Foreign exchange adjustments		67			48			115
Other changes in allowances		—			—			—
Balance as of September 30,  2022		181,492			127,842			309,334

98

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:		19,272			88,609			107,881
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		(26,664	)		50,585			23,921
Transfer from Non-Complying group to Normal group		7,807			(20,540	)		(12,733	)
New assets originated		32,356			21,886			54,242
New credits for conversion of contingent to loan		31,764			3,862			35,626
New assets purchased		—			—			—
Sales or transfers of credits		—			—			—
Payment of credit		(87,430	)		(107,655	)		(195,085	)
Provisions for write-offs		(101	)		(78,451	)		(78,552	)
Recovery of written-off loans		—			—			—
Changes to models and assumptions		—			—			—
Foreign exchange adjustments		1,182			106			1,288
Other changes in allowances		—			—			—
Balance as of  September 30, 2021		123,869			102,570			226,439
Balance as of December 31, 2021		142,634			127,996			270,630

99

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 Evaluation						Substandard			Non-Complying Portfolio 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:		(764	)		(567	)		(169	)		702			78			(62	)		(658	)		(720	)
Change in measurement without portfolio reclassification from the beginning to the end of the period (portfolio from (-) until (+)):
Transfer from Normal individual to Substandard		—			(2,009	)		6,856			—			—			—			4,847			4,847
Transfer from Normal individual to Non-Complying individual		—			(100	)		—			—			1,379			—			1,279			1,279
Transfer from Substandard to Non-Complying individual		—			—			(302	)		—			701			—			399			399
Transfer from Substandard to Normal individual		—			15			(18	)		—			—			—			(3	)		(3	)
Transfer from Non-Complying individual to Substandard		—			—			1			—			(17	)		—			(16	)		(16	)
Transfer from Non-Complying individual to Normal individual		—			1			—			—			(33	)		—			(32	)		(32	)
Transfer from Normal group to Non-Complying group		(192	)		—			—			1,247			—			1,055			—			1,055
Transfer from Non-Complying group to Normal group		32			—			—			(3,308	)		—			(3,276	)		—			(3,276	)
Transfer from ndividual (normal, substandard, non-complying) to Group (normal, non-complying )		—			—			—			—			—			—			—			—
Transfer from Group (normal, non-complying) to Individual (normal, substandard, non-complying)		(79	)		115			5			(6	)		2			(85	)		122			37
New contingent loan granted		1,744			25,719			3,559			1,124			122			2,868			29,400			32,268
Contingent credits for conversion		(5,564	)		(1,475	)		(19	)		(2,557	)		(266	)		(8,121	)		(1,760	)		(9,881	)
Changes to models and assumptions		—			—			—			—			—			—			—			—
Foreign exchange adjustments		7			872			415			420			2			427			1,289			1,716
Other changes in provisions		5,123			(23,571	)		(1,954	)		1,551			(1,972	)		6,674			(27,497	)		(20,823	)
Balance as of September 30,  2022		4,678			33,785			12,671			8,426			1,276			13,104			47,732			60,836

100

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 Evaluation						Substandard			Non-Complying Portfolio 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:		(2,191	)		(1,270	)		24			494			277			(1,697	)		(969	)		(2,666	)
Change in measurement without portfolio reclassification from the beginning to the end of the period (portfolio from (-) until (+)):
Transfer from Normal individual to Substandard		—			(362	)		795			—			—			—			433			433
Transfer from Normal individual to Non-Complying individual		—			(9	)		—			—			109			—			100			100
Transfer from Substandard to Non-Complying individual		—			—			(56	)		—			207			—			151			151
Transfer from Substandard to Normal individual		—			44			(69	)		—			—			—			(25	)		(25	)
Transfer from Non-Complying individual to Substandard		—			—			52			—			(327	)		—			(275	)		(275	)
Transfer from Non-Complying individual to Normal individual		—			8			—			—			(4	)		—			4			4
Transfer from Normal group to Non-Complying group		(337	)		—			—			1,243			—			906			—			906
Transfer from Non-Complying group to Normal group		89			—			—			(1,874	)		—			(1,785	)		—			(1,785	)
Transfer from ndividual (normal, substandard, non-complying) to Group (normal, non-complying )		208			(211	)		—			57			(7	)		265			(218	)		47
Transfer from Group (normal, non-complying) to Individual (normal, substandard, non-complying)		(111	)		148			8			—			5			(111	)		161			50
New contingent loan granted		4,703			26,478			299			1,043			836			5,746			27,613			33,359
Contingent credits for conversion		(7,901	)		(1,870	)		(382	)		(4,115	)		(196	)		(12,016	)		(2,448	)		(14,464	)
Changes to models and assumptions		—			—			—			—			—			—			—			—
Foreign exchange adjustments		6			909			7			229			513			235			1,429			1,664
Other changes in provisions		5,654			(21,560	)		(124	)		2,724			(1,901	)		8,378			(23,585	)		(15,207	)
Balance as of September 30,  2021		25,377			37,462			1,315			8,913			5,415			34,290			44,192			78,482
Balance as of December 31,  2021		4,371			34,785			4,297			9,253			1,280			13,624			40,362			53,986

101

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

13. Financial assets at amortized cost, 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:

As of September 30, 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$3,433,071 million (Ch$3,024,118 million in December 2021).

102

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												Allowances Established
	Domestic loans				Foreign loans				Total		Total		Domestic loans						Foreign loans						Total			Total
	September		December		September		December		September		December		September			December			September			December			September			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		2,800,817		1,250,018		311,077		279,814		3,111,894		1,529,832		—			(58	)		(625	)		(461	)		(625	)		(519	)
Commercial loans
Agriculture and livestock		832,258		811,014		—		—		832,258		811,014		(19,163	)		(18,772	)		—			—			(19,163	)		(18,772	)
Fruit		703,907		636,015		—		—		703,907		636,015		(13,117	)		(12,678	)		—			—			(13,117	)		(12,678	)
Forestry		99,703		315,375		—		—		99,703		315,375		(2,383	)		(2,548	)		—			—			(2,383	)		(2,548	)
Fishing		35,412		33,984		—		—		35,412		33,984		(3,536	)		(3,365	)		—			—			(3,536	)		(3,365	)
Mining		172,789		162,823		—		—		172,789		162,823		(2,275	)		(2,512	)		—			—			(2,275	)		(2,512	)
Oil and natural gas		1,311		783		—		—		1,311		783		(20	)		(22	)		—			—			(20	)		(22	)
Product manufacturing industries;
Foods, beverages and tobacco		581,277		505,171		—		—		581,277		505,171		(13,617	)		(12,648	)		—			—			(13,617	)		(12,648	)
Textiles, leather goods and footwear		36,460		33,862		—		—		36,460		33,862		(970	)		(1,192	)		—			—			(970	)		(1,192	)
Woods and furnitures		126,679		152,548		—		—		126,679		152,548		(2,898	)		(2,780	)		—			—			(2,898	)		(2,780	)
Cellulose, Paper  and printing		21,367		22,820		—		—		21,367		22,820		(996	)		(1,285	)		—			—			(996	)		(1,285	)
Chemicals and petroleum products		451,696		388,778		—		—		451,696		388,778		(7,607	)		(5,894	)		—			—			(7,607	)		(5,894	)
Metal, non-metal, machine or others		678,117		498,520		—		—		678,117		498,520		(11,609	)		(11,535	)		—			—			(11,609	)		(11,535	)
Electricity, gas and water		434,344		464,080		—		—		434,344		464,080		(5,230	)		(4,201	)		—			—			(5,230	)		(4,201	)
Residential construction		268,349		260,234		—		—		268,349		260,234		(12,817	)		(10,182	)		—			—			(12,817	)		(10,182	)
Non-residential construction (office, civil engineering)		395,548		540,999		—		—		395,548		540,999		(8,796	)		(6,820	)		—			—			(8,796	)		(6,820	)
Wholesale		1,948,782		1,760,313		—		—		1,948,782		1,760,313		(60,794	)		(59,808	)		—			—			(60,794	)		(59,808	)
Retail, restaurants and hotels		1,092,041		1,131,523		7,690		7,793		1,099,731		1,139,316		(50,252	)		(46,177	)		(622	)		(641	)		(50,874	)		(46,818	)
Transport and storage		1,229,828		1,179,301		—		—		1,229,828		1,179,301		(22,178	)		(31,083	)		—			—			(22,178	)		(31,083	)
Communications		243,339		290,936		—		—		243,339		290,936		(3,534	)		(3,462	)		—			—			(3,534	)		(3,462	)
Financial services		2,940,198		3,043,255		—		1,723		2,940,198		3,044,978		(29,673	)		(41,132	)		—			(30	)		(29,673	)		(41,162	)
Business services		2,011,518		1,775,689		—		—		2,011,518		1,775,689		(65,922	)		(44,738	)		—			—			(65,922	)		(44,738	)
Real estate services		3,221,937		3,034,750		3,552		4,202		3,225,489		3,038,952		(24,712	)		(26,637	)		(152	)		(180	)		(24,864	)		(26,817	)
Student loans		60,021		57,947		—		—		60,021		57,947		(4,598	)		(4,308	)		—			—			(4,598	)		(4,308	)
Government administration, defence and police force		27,737		33,803		—		—		27,737		33,803		(559	)		(490	)		—			—			(559	)		(490	)
Social services and other  community services		783,569		770,529		—		—		783,569		770,529		(16,716	)		(17,275	)		—			—			(16,716	)		(17,275	)
Personal services		1,801,935		1,715,986		—		—		1,801,935		1,715,986		(40,173	)		(44,493	)		—			—			(40,173	)		(44,493	)
Subtotal		20,200,122		19,621,038		11,242		13,718		20,211,364		19,634,756		(424,145	)		(416,037	)		(774	)		(851	)		(424,919	)		(416,888	)
Residential mortgage loans		11,164,422		10,346,652		—		—		11,164,422		10,346,652		(27,503	)		(30,731	)		—			—			(27,503	)		(30,731	)
Consumer loans		4,709,681		4,248,709		—		—		4,709,681		4,248,709		(309,334	)		(270,630	)		—			—			(309,334	)		(270,630	)
Contingent loan exposure		13,369,333		11,986,791		—		—		13,369,333		11,986,791		(60,836	)		(53,986	)		—			—			(60,836	)		(53,986	)

103

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 September 30, 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%		1,445,736		17,869		6,955		2,947		7,969		1,481,476		(1,120	)		(258	)		(170	)		(101	)		(436	)		(2,085	)
40% < PVG <= 80%		8,343,925		149,647		49,083		22,946		61,162		8,626,763		(9,377	)		(2,539	)		(1,533	)		(930	)		(3,679	)		(18,058	)
80% < PVG <= 90%		679,742		12,322		3,838		1,393		4,927		702,222		(2,238	)		(478	)		(278	)		(189	)		(1,019	)		(4,202	)
PVG > 90%		345,671		2,711		913		498		4,168		353,961		(1,948	)		(142	)		(54	)		(49	)		(965	)		(3,158	)
Total		10,815,074		182,549		60,789		27,784		78,226		11,164,422		(14,683	)		(3,417	)		(2,035	)		(1,269	)		(6,099	)		(27,503	)

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	)

104

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									warranties Fogape
As of September 30, 2022	A1		A2			A3			A4			A5			A6			Subtotal			B1			B2			B3			B4			Subtotal			C1			C2			C3			C4			C5			C6			Subtotal			Total			Normal			Non-Complying			Total			Total			Covid 19
	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		—		—			211,169			—			—			—			211,169			—			—			—			—			—			—			—			—			—			—			—			—			211,169			—			—			—			211,169			—
Current accounts overdrafts		—		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Chilean imports foreign trade loans		—		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Chilean exports foreign trade loans		100		94,463			—			4,848			—			—			99,411			—			—			—			—			—			—			—			—			—			—			—			—			99,411			—			—			—			99,411			—
Foreign trade loans between third countries		—		497			—			—			—			—			497			—			—			—			—			—			—			—			—			—			—			—			—			497			—			—			—			497			—
Non-transferable deposits in banks		—		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Other debts with banks		—		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Subtotal		100		94,960			211,169			4,848			—			—			311,077			—			—			—			—			—			—			—			—			—			—			—			—			311,077			—			—			—			311,077			—
Allowances established		—		78			462			85			—			—			625			—			—			—			—			—			—			—			—			—			—			—			—			625			—			—			—			625			—
% Allowances established		—		0.08	%		0.22	%		1.75	%		—			—			0.20	%		—			—			—			—			—			—			—			—			—			—			—			—			0.20	%		—			—			—			0.20	%
Commercial loans
Commercial loans		—		1,095,123			2,162,601			2,515,707			3,489,323			1,966,779			11,229,533			124,432			52,641			55,066			11,836			243,975			33,489			12,940			19,381			23,639			15,057			27,896			132,402			11,605,910			3,991,315			267,521			4,258,836			15,864,746			32,438
Chilean exports foreign trade loans		—		139,101			115,669			139,490			268,612			174,126			836,998			5,287			—			1,239			—			6,526			1,157			11			119			948			4,254			1,858			8,347			851,871			4,223			710			4,933			856,804			—
Accrediting foreign trade loans negotiated in terms of Chilean imports		—		—			—			—			2,604			95			2,699			—			—			—			—			—			—			—			—			—			—			—			—			2,699			—			—			—			2,699			—
Chilean imports foreign trade loans		—		110,668			150,290			145,968			202,132			180,940			789,998			7,447			263			215			—			7,925			1,379			—			—			146			340			2,119			3,984			801,907			49,826			1,808			51,634			853,541			—
Current account debtors		—		2,537			20,087			45,407			10,092			19,589			97,712			1,914			2,183			1,837			116			6,050			287			112			55			98			328			423			1,303			105,065			85,327			1,053			86,380			191,445			—
Credit card debtors		13		398			1,677			2,955			6,484			6,775			18,302			382			204			58			62			706			84			12			34			48			102			216			496			19,504			56,676			4,271			60,947			80,451			—
Factoring transactions		742		109,232			141,525			80,904			89,679			88,087			510,169			3,199			735			—			—			3,934			—			—			—			—			187						187			514,290			31,045			77			31,122			545,412			—
Commercial lease transactions		—		59,879			41,404			369,421			429,709			482,495			1,382,908			15,987			3,130			28,440			1,960			49,517			1,071			4,968			1,176			2,993			421			38			10,667			1,443,092			280,917			8,441			289,358			1,732,450			1,167
Student loans		—		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			57,257			2,763			60,020			60,020			—
Other loans and accounts receivable		—		356			1,140			1,716			2,100			1,845			7,157			81			103			59			24			267			1,257			4			166			2,442			620			1,187			5,676			13,100			9,408			1,288			10,696			23,796			—
Subtotal		755		1,517,294			2,634,393			3,301,568			4,500,735			2,920,731			14,875,476			158,729			59,259			86,914			13,998			318,900			38,724			18,047			20,931			30,314			21,309			33,737			163,062			15,357,438			4,565,994			287,932			4,853,926			20,211,364			—
Allowances established		—		1,019			4,591			31,544			47,558			76,809			161,521			3,288			5,963			10,308			2,055			21,614			774			1,805			5,233			12,125			13,851			30,364			64,152			247,287			49,237			94,790			144,027			391,314			33,605
% Allowances established		—		0.07	%		0.17	%		0.96	%		1.06	%		2.63	%		1.09	%		2.07	%		10.06	%		11.86	%		14.68	%		6.78	%		2.00	%		10.00	%		25.00	%		40.00	%		65.00	%		90.00	%		39.34	%		1.61	%		1.08	%		32.92	%		2.97	%		1.94	%

105

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, 2021	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
	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 exports 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			—
Accrediting foreign trade loans negotiated in terms of Chilean imports		—			—			—			—			2,903			47			2,950			—			—			—			—			—			1,684			—			—			85			170			1,811			3,750			501,720			45,839			1,728			47,567			549,287			—
Chilean imports 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			—
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	%

106

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 Warranties						Net
	Evaluation				Evaluation		Evaluation						Evaluation						Evaluation			Evaluation						Sub			FOGAPE						Financial
As of September 30, 2022	Individual		Group		Individual		Individual		Group		Total		Individual			Group			Individual			Individual			Group			Total			Covid-19			Total			Assets
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Loans and advances to Banks
0 days		306,146		—		—		—		—		306,146		(621	)		—			—			—			—			(621	)		—			(621	)
1 to 29 days		4,931		—		—		—		—		4,931		(4	)		—			—			—			—			(4	)		—			(4	)
30 to 59 days		—		—		—		—		—		—		—			—			—			—			—			—			—			—
60 to 89 days		—		—		—		—		—		—		—			—			—			—			—			—			—			—
>  = 90 days		—		—		—		—		—		—		—			—			—			—			—			—			—			—
Subtotal		311,077		—		—		—		—		311,077		(625	)		—			—			—			—			(625	)		—			(625	)		310,452
Commercial loans
0 days		14,676,837		4,411,463		274,458		57,943		77,196		19,497,897		(158,494	)		(39,816	)		(20,302	)		(18,887	)		(20,477	)		(257,976	)		(32,232	)		(290,208	)
1 to 29 days		180,510		115,315		21,554		10,082		22,885		350,346		(2,699	)		(5,037	)		(945	)		(2,351	)		(6,185	)		(17,217	)		(766	)		(17,983	)
30 to 59 days		14,431		27,712		20,682		6,024		20,192		89,041		(281	)		(2,500	)		(279	)		(2,827	)		(5,718	)		(11,605	)		(175	)		(11,780	)
60 to 89 days		3,698		11,504		2,206		4,069		12,117		33,594		(47	)		(1,884	)		(88	)		(748	)		(3,591	)		(6,358	)		(92	)		(6,450	)
>  = 90 days		—		—		—		84,944		155,542		240,486		—			—			—			(39,339	)		(58,819	)		(98,158	)		(340	)		(98,498	)
Subtotal		14,875,476		4,565,994		318,900		163,062		287,932		20,211,364		(161,521	)		(49,237	)		(21,614	)		(64,152	)		(94,790	)		(391,314	)		(33,605	)		(424,919	)		19,786,445
Residential mortgage loans
0 days		—		10,756,021		—		—		59,053		10,815,074		—			(10,183	)		—			—			(4,500	)		(14,683	)		—			(14,683	)
1 to 29 days		—		161,079		—		—		21,470		182,549		—			(1,916	)		—			—			(1,501	)		(3,417	)		—			(3,417	)
30 to 59 days		—		45,038		—		—		15,751		60,789		—			(990	)		—			—			(1,045	)		(2,035	)		—			(2,035	)
60 to 89 days		—		16,156		—		—		11,628		27,784		—			(484	)		—			—			(785	)		(1,269	)		—			(1,269	)
>  = 90 days		—		—		—		—		78,226		78,226		—			—			—			—			(6,099	)		(6,099	)		—			(6,099	)
Subtotal		—		10,978,294		—		—		186,128		11,164,422		—			(13,573	)		—			—			(13,930	)		(27,503	)		—			(27,503	)		11,136,919
Consumer loans
0 days		—		4,280,311		—		—		71,373		4,351,684		—			(136,319	)		—			—			(46,187	)		(182,506	)		—			(182,506	)
1 to 29 days		—		159,560		—		—		20,438		179,998		—			(24,987	)		—			—			(12,925	)		(37,912	)		—			(37,912	)
30 to 59 days		—		43,032		—		—		24,154		67,186		—			(11,902	)		—			—			(16,191	)		(28,093	)		—			(28,093	)
60 a 89 days		—		22,787		—		—		15,753		38,540		—			(8,284	)		—			—			(9,678	)		(17,962	)		—			(17,962	)
>  = 90 days		—		—		—		—		72,273		72,273		—			—			—			—			(42,861	)		(42,861	)		—			(42,861	)
Subtotal		—		4,505,690		—		—		203,991		4,709,681		—			(181,492	)		—			—			(127,842	)		(309,334	)		—			(309,334	)		4,400,347
Total Loans		15,186,553		20,049,978		318,900		163,062		678,051		36,396,544		(162,146	)		(244,302	)		(21,614	)		(64,152	)		(236,562	)		(728,776	)		(33,605	)		(762,381	)		35,634,163

107

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 Warranties						Net
	Evaluation				Evaluation		Evaluation						Evaluation						Evaluation			Evaluation						Sub			FOGAPE						Financial
As of December 31, 2021	Individual		Group		Individual		Individual		Group		Total		Individual			Group			Individual			Individual			Group			Total			Covid-19			Total			Assets
	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		—			(8,021	)		—			—			(10,268	)		(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

108

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 (*)
	September		December		September			December			September		December
	2022		2021		2022			2021			2022		2021
	MCh$		MCh$		MCh$			MCh$			MCh$		MCh$
Within one year		566,802		525,720		(69,218	)		(53,312	)		497,584		472,408
From 1 to 2 years		418,846		385,118		(50,423	)		(38,653	)		368,423		346,465
From 2 to 3 years		286,225		260,002		(32,170	)		(25,228	)		254,055		234,774
From 3 to 4 years		181,137		166,416		(20,812	)		(17,015	)		160,325		149,401
From 4 to 5 years		126,245		116,650		(14,566	)		(12,038	)		111,679		104,612
After 5 years		366,639		327,071		(30,158	)		(25,624	)		336,481		301,447
Total		1,945,894		1,780,977		(217,347	)		(171,870	)		1,728,547		1,609,107

(*) The net balance receivable does not include past-due portfolio totaling Ch$4,413 million as of September 30, 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 2022 and the year ended 2021 no portfolio purchases were made.

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

No sales or assignments of credit have been made during the 2022 period.

During the period September 2021, there have been operations of sale or transfer of the loan portfolio according to the following:

	As of September 30, 2021
	Carrying amount		Allowances			Sale price		Effect on income (loss) gain (*)
	MCh$		MCh$			MCh$		MCh$
Sale of current loans		16,327		(14,457	)		6,537		4,667
Sale of written – off loans		—		—			—		—
Total		16,327		(14,457	)		6,537		4,667

(n) Securitization of own assets:

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

109

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$59,732 million as of September 30, 2022 (Ch$52,557 million as of December 31, 2021), as follows:

		% Ownership Interest				Equity				Assets
		September		December		September		December		September		December
Company	Shareholder	2022		2021		2022		2021		2022		2021
		%		%		MCh$		MCh$		MCh$		MCh$
Associates
Transbank S.A.	Banco de Chile		26.16		26.16		98,471		84,898		25,757		22,207
Administrador Financiero del Transantiago S.A.	Banco de Chile		20.00		20.00		19,610		19,158		4,076		3,947
Centro de Compensación Automatizado S.A.	Banco de Chile		33.33		33.33		13,743		10,728		4,687		3,663
Sociedad Imerc OTC S.A.	Banco de Chile		12.33		12.33		13,126		12,609		1,646		1,541
Redbanc S.A.	Banco de Chile		38.13		38.13		11,641		9,935		4,506		3,842
Sociedad Interbancaria de Depósitos de Valores S.A.	Banco de Chile		26.81		26.81		7,413		6,317		1,987		1,788
Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A.	Banco de Chile		15.00		15.00		7,195		6,638		1,110		1,025
Subtotal Associates							171,199		150,283		43,769		38,013
Joint Ventures
Servipag Ltda.	Banco de Chile		50.00		50.00		17,319		14,930		8,659		7,465
Artikos Chile S.A.	Banco de Chile		50.00		50.00		2,534		2,527		1,267		1,445
Subtotal Joint Ventures							19,853		17,457		9,926		8,910
Subtotal							191,052		167,740		53,695		46,923
Minority Investments
Bolsa de Comercio de Santiago S.A.  (*)	Banchile Corredores de Bolsa										5,342		5,282
Bolsa Electrónica de Chile S.A. (*)	Banchile Corredores de Bolsa										350		210
Banco Latinoamericano de Comercio Exterior S.A. (Bladex)	Banco de Chile										309		309
Sociedad de Telecomunicaciones Financieras  Interbancarias Mundiales (Swift)	Banco de Chile										28		25
CCLV Contraparte Central S.A.	Banchile Corredores de Bolsa										8		8
Subtotal Minority Investments											6,037		5,834
Total											59,732		52,757

(*) Investments in shares have been irrevocably designated as at fair value through other comprehensive income and, therefore, are recorded at market value in accordance with IFRS 9.

110

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

14. Investments in other companies, continued:

(b) Associates:

	September 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		6,825			7,125			96			15,000			1,187,576			61,822			46,976			1,325,420
Non-current assets		10,016			1,098			7,317			16,107			124,724			651			5,067			164,980
Total Assets		16,841			8,223			7,413			31,107			1,312,300			62,473			52,043			1,490,400
Current liabilities		2,752			1,017			—			18,429			1,211,742			42,863			37,244			1,314,047
Non-current liabilities		346			11			—			1,037			2,087			—			1,664			5,145
Total Liabilities		3,098			1,028			—			19,466			1,213,829			42,863			38,908			1,319,192
Equity		13,743			7,195			7,413			11,641			98,471			19,610			13,126			171,199
Minority interest		—			—			—			—			—			—			9			9
Total Liabilities and Equity		16,841			8,223			7,413			31,107			1,312,300			62,473			52,043			1,490,400
Operating income		10,319			2,941			14			33,608			626,265			2,914			5,067			681,128
Operating expenses		(6,875	)		(2,681	)		(21	)		(31,606	)		(551,006	)		(1,466	)		(4,853	)		(598,508	)
Other expenses or income		496			438			1,192			100			(59,835	)		1,528			336			(55,745	)
Gain (loss) before tax		3,940			698			1,185			2,102			15,424			2,976			550			26,875
Income tax		(743	)		(12	)		—			(364	)		(1,850	)		(406	)		193			(3,182	)
Gain for the period		3,197			686			1,185			1,738			13,574			2,570			743			23,693

	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	)

111

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

14. Inversiones en Sociedades, continuación:

(c) Joint Ventures:

The Bank owns a 50% interest in the companies Artikos Chile S.A. and Servipag Ltda., 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.
	September			December			September			December
	2022			2021			2022			2021
	MCh$			MCh$			MCh$			MCh$
Current assets		2,036			2,067			77,441			65,128
Non-current assets		1,886			2,278			14,049			15,721
Total Assets		3,922			4,345			91,490			80,849
Current liabilities		737			1,167			69,576			61,079
Non-current liabilities		651			651			4,595			4,840
Total Liabilities		1,388			1,818			74,171			65,919
Equity		2,534			2,527			17,319			14,930
Total Liabilities and Equity		3,922			4,345			91,490			80,849
Operating income		3,231			3,977			25,155			39,309
Operating expenses		(2,120	)		(2,631	)		(22,575	)		(37,047	)
Other expenses or income		60			7			431			(231	)
Profit before tax		1,171			1,353			3,011			2,031
Income tax		(316	)		(142	)		(622	)		(369	)
Profit for the year		855			1,211			2,389			1,662

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

	September			September
	2022			2021
	MCh$			MCh$
Balance as of January 1,		46,923			42,338
Acquisition of investments in companies		—			7,847
Participation on income in companies with significant influence and joint control		7,927			(3,237	)
Dividends received		(1,122	)		(1,097	)
Others		(33	)		(6	)
Total		53,695			45,845

(e) During the period ended as of September 30, 2022 and 2021 no impairment has incurred in these investments.

112

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

15. Intangible Assets:

(a) The composition of intangible assets as of September 30, 2022 and December 31, 2021, are as follows:

	Useful Life				Average remaining amortization				Gross balance				Accumulated Amortization						Net balance
	September		December		September		December		September		December		September			December			September		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		237,673		209,432		(150,757	)		(136,900	)		86,916		72,532
Total										237,673		209,432		(150,757	)		(136,900	)		86,916		72,532

(b) The change of intangible assets during the periods ended as of September 30, 2022 and December 31, 2021, are as follows:

	September			December
	2022			2021
	MCh$			MCh$
Gross Balance
Balance as of January 1,		209,432			180,669
Acquisition		31,295			30,222
Disposals/ write-downs		(2,750	)		(352	)
Reclassification		(182	)		(89	)
Impairment (*)		(122	)		(1,018	)
Total		237,673			209,432
Accumulated Amortization
Balance as of January 1,		(136,900	)		(119,968	)
Amortization for the period (**)		(15,611	)		(17,831	)
Disposals/ write-downs		1,572			352
Reclassification		182			(2	)
Impairment		—			549
Total		(150,757	)		(136,900	)
Balance Net		86,916			72,532

(*) See Note No. 40 Impairment of non-financial assets.

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

(c) As of September 30, 2022 and December 31, 2021, the Bank maintains the following amounts with technological developments:

Detail	Commitment Amount
	September		December
	2022		2021
	MCh$		MCh$
Software and licenses		10,142		7,097

(d) As of September 30, 2022, there are no indications or concrete evidence of impairment. As of the date of these quarterly financial statements have been no events that require the recognition of impairment in them.

113

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

16. Property and equipment:

(a) The properties and equipment as of September 30, 2022 and December 31, 2021 are composed as follows:

	Useful Life				Average remaining depreciation				Gross balance				Accumulated Depreciation						Net balance
	September		December		September		December		September		December		September			December			September		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		25		26		19		19		315,158		311,279		(155,550	)		(148,645	)		159,608		162,634
Equipment		5		5		3		3		242,477		243,757		(198,557	)		(191,334	)		43,920		52,423
Others		7		7		4		4		57,800		56,582		(51,017	)		(49,319	)		6,783		7,263
Total										615,435		611,618		(405,124	)		(389,298	)		210,311		222,320

114

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

16. Property and equipment, continued:

(b) The changes in properties and equipment as of September 30, 2022 and December 31, 2021, are as follows:

	September 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		4,069			5,555			2,187			11,811
Write-downs and sales of the period		(190	)		(6,861	)		(933	)		(7,984	)
Transfers		—			36			(36	)		—
Impairment (***)		—			(10	)		—			(10	)
Total		315,158			242,477			57,800			615,435
Accumulated Depreciation
Balance as of January 1, 2022		(148,645	)		(191,334	)		(49,319	)		(389,298	)
Reclassification		—			—			—			—
Depreciation charges of the period (*) (**)		(6,960	)		(14,031	)		(2,085	)		(23,076	)
Write-downs and sales of the period		55			6,843			351			7,249
Transfers		—			(36	)		36			—
Impairment (***)		—			1			—			1
Total		(155,550	)		(198,557	)		(51,017	)		(405,124	)
Balance as of  September 30, 2022		159,608			43,920			6,783			210,311

	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 and Amortization.

(**) This amount does not include the depreciation of the year of the Investment Properties, amount is included in “Other Assets” for Ch$268 million (Ch$357 millon in December 2021).

(***) See Note No. 40 Impairment of non-financial assets. As of December 31, 2021 does not include charge-offs of Property and Equipment of Ch$916 million.

115

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 September 30, 2022 and December 31, 2021, is as follows:

	Gross Balance				Accumulated Depreciation						Net Balance
	September		December		September			December			September		December
	2022		2021		2022			2021			2022		2021
	MCh$		MCh$		MCh$			MCh$			MCh$		MCh$
Categories
Buildings		144,068		124,978		(60,462	)		(46,743	)		83,606		78,235
Floor space for ATMs		43,851		42,051		(33,446	)		(25,566	)		10,405		16,485
Improvements to leased properties		27,869		26,066		(21,339	)		(20,598	)		6,530		5,468
Total		215,788		193,095		(115,247	)		(92,907	)		100,541		100,188

(b) The changes of the rights over leased assets as of September 30, 2022 and December 31, 2021, is as follows:

	September 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		21,344			2,460			1,803			25,607
Write-downs		(2,254	)		(484	)		—			(2,738	)
Remeasurement		—			(176	)		—			(176	)
Total		144,068			43,851			27,869			215,788
Accumulated Depreciation
Balance as of January 1, 2022		(46,743	)		(25,566	)		(20,598	)		(92,907	)
Depreciation of the period (*)		(14,761	)		(8,362	)		(741	)		(23,864	)
Write-downs		1,042			482			—			1,524
Total		(60,462	)		(33,446	)		(21,339	)		(115,247	)
Balance as of  September 30, 2022		83,606			10,405			6,530			100,541

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

As of September 30, 2022 and December 31, 2021, there are no restrictions on the fixed assets of the Bank and its subsidiaries.

116

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 September 30, 2022 and December 31, 2021:

	September 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		—		1,895		3,786		16,018		32,260		19,799		22,825		96,583
ATMs		—		1,087		2,151		7,323		1,323		225		92		12,201
Total		—		2,982		5,937		23,341		33,583		20,024		22,917		108,784

	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

117

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
Lease liability	MCh$
Balances as of January 1, 2021		115,017
Liabilities for new lease agreements		6,292
Interest expenses		1,514
Payments of capital and interests		(22,988	)
Remeasurement		—
Derecognized contracts		(4,588	)
Readjustments		3,766
Balances as of  September 30, 2021		99,013
Liabilities for new lease agreements		1,991
Interest expenses		464
Payments of capital and interests		(7,597	)
Remeasurement		(206	)
Derecognized contracts		(936	)
Readjustments		2,941
Balances as of December 31, 2021		95,670
Liabilities for new lease agreements		15,602
Interest expenses		1,400
Payments of capital and interests		(24,136	)
Remeasurement		(176	)
Derecognized contracts		(1,094	)
Readjustments		8,191
Balances as of  September 30, 2022		95,457

(c) The future cash flows related to short-term lease agreements in effect as of September 30, 2022 correspond to Ch$3,370 million (Ch$5,569 million as of December 31, 2021).

118

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 September 30, 2022 and December 31, 2021 according to the following detail:

	September			December
	2022			2021
	MCh$			MCh$
Income tax		250,120			299,396
Tax Previous year		—			—
Less:
Monthly prepaid taxes		(321,692	)		(182,903	)
Credit for training expenses		(1,267	)		(2,000	)
Others		(2,046	)		(2,210	)
Total		(74,885	)		112,283
Tax rate		27	%		27	%

	September			December
	2022			2021
	MCh$			MCh$
Current tax assets		75,562			846
Current tax liabilities		(677	)		(113,129	)
Total tax receivable (payable), net		74,885			(112,283	)

(b) Income Tax:

The effect of the tax expense during the periods between January 1 and September 30, 2022 and 2021, are broken down as follows:

	September			September
	2022			2021
	MCh$			MCh$
Income tax expense:
Current year tax		282,502			154,939
Tax Previous year		2,931			(2,375	)
Subtotal		285,433			152,564
(Credit) Debit for deferred taxes:
Origin and reversal of temporary differences		(84,316	)		(26,577	)
Subtotal		(84,316	)		(26,577	)
Others		5,569			2,526
Net charge to income for income taxes		206,686			128,513

119

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 September 30, 2022 and 2021:

	September 2022						September 2021
	Tax rate						Tax rate
	%			MCh$			%			MCh$
Income tax calculated on net income before tax		27.00			342,768			27.00			171,096
Additions or deductions		1.79			22,823			0.47			3,017
Price-level restatement		(12.52	)		(158,905	)		(7.20	)		(45,600	)
Effective rate and income tax expense		16.27			206,686			20.27			128,513

The effective rate for income tax for the period 2022 is 16.27% (20.27% in September 2021).

120

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 September 30, 2022:

	Balances as of December 31,		Effect on					Balances as of September 30,
	2021		Income			Equity		2022
	MCh$		MCh$			MCh$		MCh$
Debit Differences:
Allowances for loan losses		317,295		50,119			—		367,414
Personnel provisions		14,304		1,754			—		16,058
Provision of undrawn credit lines		4,139		(95	)		—		4,044
Staff vacations provisions		9,993		400			—		10,393
Accrued interests adjustments from impaired loans		5,073		4,779			—		9,852
Staff severance indemnities provision		345		6			2		353
Provision of credit cards expenses		9,774		(16	)		—		9,758
Provision of accrued expenses		12,315		332			—		12,647
Adjustment for valuation of financial assets at fair value through other comprehensive income		2,792		—			2,796		5,588
Leasing		52,019		26,762			—		78,781
Incomes received in advance		12,368		(2,154	)		—		10,214
Other adjustments		36,871		373			—		37,244
Total Debit Differences		477,288		82,260			2,798		562,346
Credit Differences:
Depreciation and price-level restatement of property and equipment		16,446		(4,835	)		—		11,611
Transitory assets		6,958		4,525			—		11,483
Loans accrued to effective rate		2,437		(90	)		—		2,347
Prepaid expenses		5,668		(2,304	)		—		3,364
Other adjustments		11,502		648			54		12,204
Total Credit Differences		43,011		(2,056	)		54		41,009
Total, Net		434,277		84,316			2,744		521,337

121

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 September 30, 2021 and December 31, 2021:

	Balance as of December 31,		Effect on						Balances as of September 30,		Effect on						Balances as of December 31,
	2020		Income			Equity			2021		Income			Equity			2021
	MCh$		MCh$			MCh$			MCh$		MCh$			MCh$			MCh$
Debit differences:
Allowances for loan losses		268,482		14,109			—			282,591		34,704			—			317,295
Personnel provisions		16,233		(931	)		—			15,302		(998	)		—			14,304
Staff vacations provisions		9,164		893			—			10,057		(64	)		—			9,993
Accrued interest adjustments from impaired loans		4,570		(105	)		—			4,465		608			—			5,073
Staff severance indemnities provision		537		(2	)		(135	)		400		(65	)		10			345
Provisions of credit card expenses		7,959		1,457			—			9,416		358			—			9,774
Provisions of accrued expenses		14,083		(2,470	)		—			11,613		702			—			12,315
Adjustment for valuation of financial assets at fair value through other comprehensive income		—		—			1,849			1,849		—			943			2,792
Leasing		28,835		12,192			—			41,027		10,992			—			52,019
Incomes received in advance		16,088		(2,881	)		—			13,207		(839	)		—			12,368
Other adjustments		27,738		11,588			—			39,326		5,631			(3,947	)		41,010
Total Debit Differences		393,689		33,850			1,714			429,253		51,029			(2,994	)		477,288
Credit differences:
Depreciation and price-level restatement of property and equipment		17,256		7			—			17,263		(817	)		—			16,446
Adjustment for valuation of financial assets at fair value through other comprehensive income		1,056		—			(1,055	)		1		—			(1	)		—
Transitory assets		5,378		3,938			—			9,316		(2,358	)		—			6,958
Loans accrued to effective rate		2,779		(268	)		—			2,511		(74	)		—			2,437
Prepaid expenses		2,234		4,363			—			6,597		(929	)		—			5,668
Other adjustments		8,380		(767	)		(339	)		7,274		4,257			(29	)		11,502
Total Credit Differences		37,083		7,273			(1,394	)		42,962		79			(30	)		43,011
Total, Net		356,606		26,577			3,108			386,291		50,950			(2,964	)		434,277

122

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.

(e.1) Loans and advance to banks and Loans to customers as of September 30, 2022					Tax value assets
	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		3,111,269		3,111,894		—		—		—
Commercial loans		17,508,584		18,390,043		42,354		74,916		117,270
Consumer loans		4,399,842		5,531,995		613		24,025		24,638
Residential mortgage loans		11,136,919		11,168,355		7,073		690		7,763
Total		36,156,614		38,202,287		50,040		99,631		149,671

(e.1) Loans and advance to banks and Loans to customers as of December 31, 2021					Tax value assets
	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		1,529,832		—		—		—
Commercial loans		17,262,707		18,124,405		33,450		63,603		97,053
Consumer loans		3,977,579		5,098,856		503		10,156		10,659
Residential mortgage loans		10,315,921		10,345,098		8,878		363		9,241
Total		33,085,520		35,098,191		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.

123

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 September 30, 2022
	MCh$		MCh$			MCh$		MCh$			MCh$
Commercial loans		63,603		(31,154	)		99,973		(57,506	)		74,916
Consumer loans		10,156		(105,958	)		126,605		(6,778	)		24,025
Residential mortgage loans		363		(3,490	)		16,482		(12,665	)		690
Total		74,122		(140,602	)		243,060		(76,949	)		99,631

(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

(e.3) Charge-offs and recoveries	September		December
	2022		2021
	MCh$		MCh$
Charge-offs Art. 31 No. 4 second subparagraph		18,510		26,712
Write-offs resulting in provisions released		114		1,738
Recovery or renegotiation of written-off loans		47,656		66,227

(e.4) Application of Art. 31 No. 4 first & third subsections of the income tax law	September		December
	2022		2021
	MCh$		MCh$
Charge-offs in accordance with first subsection		—		—
Write-offs in accordance with third subsection		114		1,738

124

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

19. Other Assets:

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

	September			December
	2022			2021
	MCh$			MCh$
Cash collateral provided for derivative financial transactions		393,133			293,378
Debtors from brokerage of financial instruments		124,469			172,769
Accounts receivable from third parties		111,795			117,130
Assets to be leased out as lessor (*)		103,892			94,462
Prepaid expenses		56,091			45,731
Income from regular activities from contracts with customers		21,489			11,132
Investment properties		12,209			12,477
VAT receivable		2			12,703
Pending transactions		2,983			2,292
Other provided cash collateral		2,097			1,921
Accumulated impairment in respect of other assets receivable		(1,216	)		(2,050	)
Other Assets		29,889			33,516
Total		856,833			795,461

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

125

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:

	September			December
	2022			2021
	MCh$			MCh$
Assets received in lieu of payment or awarded at judicial sale (*)
Assets awarded at judicial sale		12,144			11,629
Assets received in lieu of payment		412			954
Provision for assets received in lieu of payment or awarded		(2	)		(79	)
Non-current assets for sale
Investments in other companies (**)		—			3,961
Assets for recovery of assets transferred in financial leasing operations		622			2,954
Disposal groups held for sale		—			—
Total		13,176			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 0.0065% (0.0169% as of December 31, 2021) of the Bank’s effective equity.

(**) At the end of December 2021, it corresponds to the participation in Sociedad Operadora de Tarjeta de Crédito Nexus S.A., which had been reclassified as a non-current asset, which was subsequently sold on September 30, 2022 (See Note No. 5 letter c)).

(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		(97	)
Provisions established		119
Provisions released		—
Balance as of September 30, 2021		74
Provisions used		(41	)
Provisions established		46
Provisions released		—
Balance as of December 31, 2021		79
Provisions used		(335	)
Provisions established		258
Provisions released		—
Balance as of September 30, 2022		2

(c) The Bank does not present liabilities included in the disposal group for sale during the periods September 2022 and December 2021.

126

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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

The item detail is as follows:

	September		December
	2022		2021
	MCh$		MCh$
Financial derivative contracts		4,321,134		2,772,503
Other financial instruments		2,742		9,610
Total		4,323,876		2,782,113

a) As of September 30, 2022 and December 31, 2021, the Bank maintains the following debt portfolio of derivative instruments:

	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				Fair value Liabilities
	September		December		September		December		September		December		September		December		September		December		September		December		September		December		September		December		September		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		—		—		3,963,450		2,713,040		2,842,574		2,847,610		3,735,580		3,581,429		746,132		537,651		9,697		4,603		—		—		11,297,433		9,684,333		746,600		505,179
Interest rate swap		—		—		762,240		602,352		1,152,048		1,951,608		5,952,153		5,662,946		5,584,953		5,557,886		3,696,267		3,312,684		4,809,779		4,927,051		21,957,440		22,014,527		1,722,549		831,338
Interest rate swap and cross currency swap		—		—		365,025		158,302		542,478		436,814		2,251,610		2,567,509		2,911,224		2,857,645		2,171,719		2,017,579		2,906,357		2,673,152		11,148,413		10,711,001		1,845,077		1,432,801
Call currency options		—		—		12,637		6,828		19,665		9,360		24,982		24,579		—		341		—		—		—		—		57,284		41,108		5,757		2,726
Put currency options		—		—		12,378		5,457		27,548		26,668		57,545		27,599		2,909		2,631		—		—		—		—		100,380		62,355		1,151		459
Total		—		—		5,115,730		3,485,979		4,584,313		5,272,060		12,021,870		11,864,062		9,245,218		8,956,154		5,877,683		5,334,866		7,716,136		7,600,203		44,560,950		42,513,324		4,321,134		2,772,503

b) Other instruments or financial liabilities:

	September		December
	2022		2021
	MCh$		MCh$
Current accounts and other demand deposits		—		—
Savings accounts and other time deposits		—		—
Debt instruments issued		—		—
Others		2,742		9,610
Total		2,742		9,610

127

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

22. Financial liabilities at amortized cost:

The item detail is as follows:

	September		December
	2022		2021
	MCh$		MCh$
Current accounts and other demand deposits		14,298,698		18,249,881
Saving accounts and time deposits		12,992,748		8,803,713
Obligations by repurchase agreements and securities lending		201,805		85,399
Borrowings from financial institutions		5,360,800		4,861,865
Debt financial instruments issued		8,782,813		8,561,395
Other financial obligations		234,149		250,005
Total		41,871,013		40,812,258

(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:

	September		December
	2022		2021
	MCh$		MCh$
Current accounts		11,885,607		15,349,225
Other demand obligations		1,309,322		1,259,367
Demand deposits accounts		697,142		952,621
Other demand deposits		406,627		688,668
Total		14,298,698		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:

	September		December
	2022		2021
	MCh$		MCh$
Time deposits		12,522,271		8,319,166
Term savings accounts		433,436		448,257
Other term balances payable		37,041		36,290
Total		12,992,748		8,803,713

128

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 September 30, 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
	September		December		September		December		September		December		September		December		September		December		September		December		September		December		September		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		—		—		716		351		—		—		—		—		—		—		—		—		—		—		716		351
Subtotal		—		—		716		351		—		—		—		—		—		—		—		—		—		—		716		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		—		—		201,030		84,996		59		—		—		52		—		—		—		—		—		—		201,089		85,048
Bonds from other Chilean companies		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Other instruments issued in Chile		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		201,030		84,996		59		—		—		52		—		—		—		—		—		—		201,089		85,048
Financial Instruments issued by Foreign Institutions
Instruments from foreign governments or central bank		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Other instruments issued by foreing		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Total		—		—		201,746		85,347		59		—		—		52		—		—		—		—		—		—		201,805		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 September 30, 2022 amounts to Ch$201,737 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.

129

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:

	September		December
	2022		2021
	MCh$		MCh$
Foreign banks
Foreign banks
Wells Fargo Bank		268,826		145,070
Bank of Nova Scotia		161,603		—
Standard Chartered Bank		103,275		4,990
Bank of New York Mellon		88,165		17,055
Citibank N.A. United State		79,391		70,590
Bank of America		69,040		43,925
Commerzbank AG		289		1,782
Bank of Tokyo		—		412
Sumitomo Mitsui Banking		—		42,641
Borrowings and other obligations
Wells Fargo Bank		145,937		133,692
Citibank N.A. United Kingdom		83,308		48,120
Citibank N.A. United State		8,110		4,173
Standard Chartered Bank		2,642		211
Bank of America		1,582		—
Commerzbank AG		114		568
Others		58		176
Subtotal foreign banks		1,012,340		513,405
Chilean Central Bank (*)		4,348,460		4,348,460
Total		5,360,800		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).

130

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:

	September		December
	2022		2021
	MCh$		MCh$
Letters of credit
Letters of credit for housing		2,697		4,005
Letters of credit for general purposes		64		109
Bonds
Current Bonds		8,780,052		8,557,281
Mortgage bonds		—		—
Total		8,782,813		8,561,395

During the period ended September 30, 2022 Banco de Chile has placed bonds for Ch$350,068 million, which corresponds to Short-Term Current Bonds and Long-Term Bonds for amounts of Ch$102,770 and Ch$247,298 million respectively, according to the following details:

Short-term Current Bonds

Counterparty	Currency	Amount MCh$		Annual interest rate %		Issued date	Maturity date
Wells Fargo Bank	USD		17,065		1.61	18/05/2022	16/08/2022
Wells Fargo Bank	USD		41,944		1.61	19/05/2022	17/08/2022
Citibank N.A.	USD		8,379		2.25	20/05/2022	21/11/2022
Citibank N.A.	USD		5,028		1.60	20/05/2022	22/08/2022
Wells Fargo Bank	USD		28,702		2.35	06/06/2022	06/12/2022
Citibank N.A.	USD		1,652		2.25	09/06/2022	09/12/2022
Total as of September 30, 2022			102,770

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 September 30, 2022			247,298

131

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

22. Financial liabilities at amortized cost, continued:

(e) Debt financial instruments issued, continued:

During the year ended December 31, 2021, Banco de Chile has placed bonds for Ch$1,661,016 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 September 30, 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.

132

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:

	September		December
	2022		2021
	MCh$		MCh$
Other Chilean financial obligations		234,027		249,782
Other financial obligations with the Public sector		122		223
Total		234,149		250,005

23. Financial instruments of regulatory capital issued:

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

	September		December
	2022		2021
	MCh$		MCh$
Subordinated bonds with transitory recognition		—		—
Subordinated bonds		1,002,053		917,510
Bonds with no fixed term of maturity		—		—
Preferred stock		—		—
Total		1,002,053		917,510

b) Issuances of regulatory capital financial instruments in the period:

During the period ended September 30, 2022 and December 31, 2021, no issues of regulatory capital financial instruments have been made.

133

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

23. Financial instruments of regulatory capital issued, continued:

c) Changes in regulatory capital financial instruments:

	Subordinated bonds			Bonds with no maturity		Preferred shares
	MCh$
Balance as of January 1, 2021		886,407			—		—
Emissions made		—			—		—
Transaction costs		—			—		—
Transaction costs amortization		—			—		—
Accrued interest		29,577			—		—
Acquisition or redemption by the issuer		—			—		—
Modification of the issuance conditions		—			—		—
Interest and UF indexation payments to the holder		(39,895	)		—		—
Principal payments to the holder		(16,277	)		—		—
Accrued UF indexation		57,698			—		—
Exchange rate differences		—			—		—
Depreciation		—			—		—
Reappraisal		—			—		—
Expiration		—			—		—
Conversion to common shares		—			—		—
Balance as of December 31, 2021		917,510			—		—
Balance as of January 1, 2022		917,510			—		—
Emissions made		—			—		—
Transaction costs		—			—		—
Transaction costs amortization		—			—		—
Accrued interest		23,094			—		—
Acquisition or redemption by the issuer		—			—		—
Modification of the issuance conditions		—			—		—
Interest and UF indexation payments to the holder		(24,158	)		—		—
Principal payments to the holder		(9,932	)		—		—
Accrued UF indexation		95,539			—		—
Exchange rate differences		—			—		—
Depreciation		—			—		—
Reappraisal		—			—		—
Expiration		—			—		—
Conversion to common shares		—			—		—
Balance as of September 30, 2022		1,002,053			—		—

134

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 September 30, 2022 and December 31, 2021:

September 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		5,320
C1	UF	200,000		7.4	06/12/1999	01/01/2030		3,552
C1	UF	530,000		7.1	06/12/1999	01/01/2030		9,499
C1	UF	300,000		7.1	06/12/1999	01/01/2030		5,380
C1	UF	50,000		6.5	06/12/1999	01/01/2030		913
C1	UF	450,000		6.6	06/12/1999	01/01/2030		8,215
D2	UF	1,600,000		4.3	20/06/2002	01/04/2023		5,502
D2	UF	400,000		4.3	20/06/2002	01/04/2023		1,376
D1	UF	2,000,000		3.6	20/06/2002	01/04/2026		23,732
F	UF	1,000,000		5.0	28/11/2008	01/11/2033		33,461
F	UF	1,500,000		5.0	28/11/2008	01/11/2033		50,192
F	UF	759,000		4.5	28/11/2008	01/11/2033		26,472
F	UF	241,000		4.5	28/11/2008	01/11/2033		8,406
F	UF	4,130,000		4.2	28/11/2008	01/11/2033		147,085
F	UF	1,000,000		4.3	28/11/2008	01/11/2033		35,614
F	UF	70,000		4.2	28/11/2008	01/11/2033		2,501
F	UF	4,000,000		3.9	28/11/2008	01/11/2033		147,340
F	UF	2,300,000		3.8	28/11/2008	01/11/2033		85,082
G	UF	600,000		4.0	29/11/2011	01/11/2036		20,365
G	UF	50,000		4.0	29/11/2011	01/11/2036		1,697
G	UF	80,000		3.9	29/11/2011	01/11/2036		2,735
G	UF	450,000		3.9	29/11/2011	01/11/2036		15,402
G	UF	160,000		3.9	29/11/2011	01/11/2036		5,476
G	UF	1,000,000		2.7	29/11/2011	01/11/2036		39,031
G	UF	300,000		2.7	29/11/2011	01/11/2036		11,709
G	UF	1,360,000		2.6	29/11/2011	01/11/2036		53,253
J	UF	1,400,000		1.0	29/11/2011	01/11/2042		72,259
J	UF	1,500,000		1.0	29/11/2011	01/11/2042		77,536
J	UF	1,100,000		1.0	29/11/2011	01/11/2042		57,293
I	UF	900,000		1.0	29/11/2011	01/11/2040		45,655
					Total subordinated bonds due			1,002,053

135

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

136

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:

	September		December
	2022		2021
	MCh$		MCh$
Provisions for employee benefit obligations		114,272		106,964
Provisions for obligations of customer loyalty and merit programs		35,875		35,937
Provisions for operational risk		958		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		151,369		143,858

137

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			311		264		142,249
Provisions established		91,890			—		—		—			4,424			40		—		96,354
Provisions used		(95,127	)		—		—		—			—			—		—		(95,127	)
Provisions released		—			—		—		(244	)		—			—		—		(244	)
Balances as of September 30, 2021		108,006			—		—		—			34,611			351		264		143,232
Provisions established		16,286			—		—		—			1,326			342		—		17,954
Provisions used		(17,328	)		—		—		—			—			—		—		(17,328	)
Provisions released		—			—		—		—			—			—		—		—
Balances as of December 31, 2021		106,964			—		—		—			35,937			693		264		143,858
Provisions established		82,177			—		—		—			—			265		—		82,442
Provisions used		(74,869	)		—		—		—			—			—		—		(74,869	)
Provisions released		—			—		—		—			(62	)		—		—		(62	)
Balances as of September  30, 2022		114,272			—		—		—			35,875			958		264		151,369

138

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

24. Provisions for contingencies, continued;

(c) Provisions for employee benefit obligations:

	September		December
	2022		2021
	MCh$		MCh$
Provision of short-term employee benefits		107,199		100,518
Provision of benefits to employees for contract termination		7,073		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		114,272		106,964

(d) Provision of short-term employee benefits:

(i) Compliance bonuses provision:

	September			September
	2022			2021
	MCh$			MCh$
Balances as of January 1		53,070			43,941
Net provisions established		43,812			41,207
Provisions used		(46,588	)		(35,429	)
Total		50,294			49,719

(ii) Vacation provision:

	September			September
	2022			2021
	MCh$			MCh$
Balances as of January 1		37,010			33,993
Net provisions established		7,166			9,473
Provisions used		(5,682	)		(6,216	)
Total		38,494			37,250

139

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:

	September			September
	2022			2021
	MCh$			MCh$
Balances as of January 1		10,438			25,728
Net provisions established		29,641			17,173
Provisions used		(21,668	)		(28,390	)
Total		18,411			14,511

(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:

	September			September
	2022			2021
	MCh$			MCh$
Present value of the obligations at the beginning of the period		6,446			7,581
Increase in provision		1,551			306
Benefit paid		(932	)		(863	)
Effect of change in actuarial factors		8			(500	)
Total		7,073			6,524

140

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:

	September		September
	2022		2021
	MCh$		MCh$
Increase (decrease) in provisions		1,193		(64	)
Interest cost of benefits obligations		358		370
Effect of change in actuarial factors		8		(500	)
Net benefit expenses		1,559		(194	)

(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:

	September 30, 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 third quarter of 2022.

(f) Employee benefits share-based provision:

As of September 30, 2022 and December 31, 2021, the Bank and its subsidiaries do not have a stock-based compensation plan.

141

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

25. Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued:

(a) The item detail is as follows:

	September		December
	2022		2021
	MCh$		MCh$
Provisions for dividends		375,197		323,897
Provisions for payment of interest on bonds with no fixed maturity date		—		—
Provision for revaluation of bonds without a fixed term of maturity		—		—
Total		375,197		323,897

(b) 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		226,135			—		—		226,135
Provisions used		(220,271	)		—		—		(220,271	)
Provisions released		—			—		—		—
Balances as of September 30, 2021		226,135			—		—		226,135
Provisions used		97,762			—		—		97,762
Provisions released		—			—		—		—
Provisions used		—			—		—		—
Balances as of December 31, 2021		323,897			—		—		323,897
Provisions used		375,197			—		—		375,197
Provisions released		(323,897	)		—		—		(323,897	)
Provisions used		—			—		—		—
Balances as of September 30, 2022		375,197			—		—		375,197

142

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:

	September		December
	2022		2021
	MCh$		MCh$
Additional loan provisions		685,252		540,252
Provisions for credit risk for contingent loans (*)		60,836		53,986
Provisions for country risk for transactions with debtors with residence abroad		15,353		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		761,441		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		140,000		859			3,222			144,081
Provisions used		—		—			—			—
Provisions released		—		—			—			—
Foreign exchange adjustments		—		1,434			—			1,434
Balances as of September 30, 2021		460,252		78,484			8,669			547,405
Provisions established		80,000		—			—			80,000
Provisions used		—		—			—			—
Provisions released		—		(10,484	)		(1,333	)		(11,817	)
Foreign exchange adjustments		—		(14,014	)		—			(14,014	)
Balances as of December 31, 2021		540,252		53,986			7,336			601,574
Provisions established		145,000		5,361			8,017			158,378
Provisions used		—		—			—			—
Provisions released		—		—			—			—
Foreign exchange adjustments		—		1,489			—			1,489
Balances as of September 30, 2022		685,252		60,836			15,353			761,441

143

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

27. Other Liabilities:

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

	September		December
	2022		2021
	MCh$		MCh$
Accounts payable to third parties		339,344		328,126
Cash guarantees received for derivative financial transactions		295,556		336,292
Obligations for mortgage loans granted to be remit to other banks and/or real estate companies		198,567		285,325
Creditors for intermediation of financial instruments		126,306		174,485
Liability for income from usual activities from contracts with customers		63,550		63,517
Securities to be settled		45,781		54,715
Agreed dividends payable		8,778		5,140
VAT debit		5,878		18,144
Outstanding transactions		1,331		4,789
Other cash guarantees received		553		535
Other liabilities		29,769		33,051
Total		1,115,413		1,304,119

144

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

28. Equity:

(a) Capital:

(i) Authorized, subscribed and paid shares:

As of September 30, 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 September 30, 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.		5,184,896,643		5.133	%
Banco de Chile on behalf of non-resident third parties		5,039,440,023		4.989	%
Banco Santander on behalf foreign investors		4,928,716,512		4.879	%
Inversiones LQ-SM Limitada		4,854,988,014		4.806	%
Banco de Chile on behalf State Street		4,456,135,815		4.411	%
Banco de Chile on behalf  Citibank New York		2,118,878,343		2.098	%
Ever Chile SPA		1,888,369,814		1.869	%
J P Morgan Chase Bank		1,211,482,708		1.199	%
Inversiones Avenida Borgoño SPA		1,190,565,316		1.179	%
Ever 1 BAE SPA		1,166,584,950		1.155	%
Larraín Vial S.A. Corredora de Bolsa		938,989,870		0.930	%
A.F.P Habitat S.A. for A Fund		657,590,265		0.651	%
A.F.P Cuprum S.A. for A Fund		611,341,815		0.605	%
Valores Security S.A. Corredores de Bolsa		519,197,927		0.514	%
Santander S.A. Corredores de Bolsa Limitada		492,746,376		0.488	%
Inversiones CDP SPA		487,744,912		0.483	%
A.F.P Capital S.A. for A Fund		480,915,834		0.476	%
A.F.P Habitat S.A. for B Fund		437,904,047		0.433	%
BCI Corredores de Bolsa S.A.		415,960,815		0.412	%
Subtotal		83,897,739,328		83.053	%
Others shareholders		17,119,341,786		16.947	%
Total		101,017,081,114		100.000	%

145

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		83.226	%
Others shareholders		16,943,817,542		16.774	%
Total		101,017,081,114		100.000	%

146

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 September 30, 2022:

	Total
	Ordinary Shares
Total shares as of December 31, 2021		101,017,081,114
Total shares as of September 30, 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 Ch$539,827 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 September 30, 2022 amounted to Ch$437,494 million.

As indicated, as of September 30, 2022, the amount of the net income determined in accordance with the preceding paragraph is equivalent to Ch$625,329 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 September 30, for an amount of Ch$375,197 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”.

147

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 September 30, 2022 and 2021 were determined as follows:

	September		September
	2022		2021
Basic earnings per share:
Net profits attributable to ordinary equity holders of the bank (in million Chilean pesos)		1,062,823		505,176
Weighted average number of ordinary shares		101,017,081,114		101,017,081,114
Earning per shares (in Chilean pesos)		10.52		5.00
Diluted earnings per share:
Net profits attributable to ordinary equity holders of the bank (in million Chilean pesos)		1,062,823		505,176
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)		10.52		5.00

As of September 30, 2022 and 2021, the Bank does not have instruments that generate dilutive effects.

148

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 September 30, 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		500			(1,254	)		204			(550	)		(111,710	)		198,321			(7	)		(50,641	)		35,963			35,413
Balances as of September 30, 2021		(253	)		3,704			(930	)		2,521			(107,803	)		127,639			(30	)		(32,843	)		(13,037	)		(10,516	)
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	)		3,590			(913	)		2,469			61,321			—			(21	)		(1,103	)		60,197			62,666
Opening balances as of January 1, 2022		(208	)		3,590			(913	)		2,469			(47,808	)		111,694			(21	)		(27,595	)		36,270			38,739
Other comprehensive income for the period		(8	)		199			(52	)		139			5,118			(119,933	)		(48	)		35,178			(79,685	)		(79,546	)
Balances as of September 30, 2022		(216	)		3,789			(965	)		2,608			(42,690	)		(8,239	)		(69	)		7,583			(43,415	)		(40,807	)

149

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) The Bank and its subsidiaries have exposures associated with contingent loans and other liabilities according to the following detail:

(a.1) Contingent loans:

	September		December
	2022		2021
	MCh$		MCh$
Guarantees and sureties
Guarantees and sureties in chilean currency		—		—
Guarantees and sureties in foreing currency		534,872		439,669
Letters of credit for goods circulation operations		679,264		450,024
Debt purchase commitments in local currency abroad		—		—
Transactions related to contingent events
Transactions related to contingent events in chilean currency		1,999,877		1,952,980
Transactions related to contingent events in foreing currency		443,578		413,974
Undrawn credit lines with immediate termination
Balance of lines of credit and agreed overdraft in current account – commercial loans		1,378,927		1,483,884
Balance of lines of credit on credit card – commercial loans		303,629		261,642
Balance of lines of credit and agreed overdraft in current account – consumer loans		1,448,336		1,350,157
Balance of lines of credit on credit card – consumer loans		6,527,492		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		53,358		78,951
Other credit commitments		—		—
Total		13,369,333		11,986,791

150

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

29. Contingencies and Commitments, continued:

(a.2) Responsibilities assumed to meet customer needs:

	September		December
	2022		2021
	MCh$		MCh$
Transactions on behalf of third parties
Collections		174,692		152,297
Placement or sale of financial instruments		—		—
Transferred financial assets managed by the bank		—		—
Third-party resources managed by the bank		783,372		749,007
Subtotal		958,064		901,304
Securities custody
Securities safekept by a banking subsidiary		5,093,010		5,232,546
Securities safekept by the Bank		3,823,203		2,459,320
Securities safekept deposited in another entity		12,996,471		12,601,349
Securities issued by the bank		—		—
Subtotal		21,912,684		20,293,215
Total		22,870,748		21,194,519

(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 September 30, 2022, the Bank maintain provisions for judicial contingencies amounting to Ch$758 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 September 30, 2022
	2022		2023		2024		2025		2026		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Legal contingencies		28		269		461		—		—		758

(b.2) Contingencies for significant lawsuits in courts:

As of September 30, 2022 and December 31, 2021, there are not significant lawsuits in court that affect or may affect these Interim Consolidated Financial Statements.

151

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 in December 2021). The subsidiary took a policy with Mapfre Seguros Generales S.A. for the Real State Funds by a guaranteed amount of UF 998,300.

As of September 30, 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, 2024, whereby the Securities Exchange of the Santiago Stock Exchange was appointed as the subsidiary’s creditor representative.

152

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

29. Contingencies and Commitments, continued:

(c) Guarantees granted by operations, continued:

	September		December
	2022		2021
Guarantees:	MCh$		MCh$
Shares delivered to guarantee forward sales transactions covered simultaneously:
Santiago Securities Exchange, Stock Exchange		4,947		38,279
Electronic Chilean Securities Exchange, Stock Exchange		14,901		12,839
Fixed income securities to guarantee CCLV system:
Santiago Securities Exchange, Stock Exchange		9,950		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		3,890		—
Cash guarantees received for operations with derivatives		—		1,723
Cash guarantees for operations with derivatives		12,088		3,198
Equity securities received for operations with derivatives
Electronic Chilean Securities Exchange, Stock Exchange		—		342
Depósito Central de Valores S.A.		793		1,726
Financial intermediation securities received for operations with derivatives
Internal custody		286		—
Total		46,855		70,441

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, 2023, 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.

153

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 tender offer for the management service of the fund’s investment portfolio. Said guarantee corresponds to a non-endorsable fixed-term readjustable bond in Pesos issued by Banco de Chile with validity until October 11, 2022.

iii. In subsidiary Banchile Corredores de Seguros Ltda.:

According to established in article 58, letter D of D.F.L. 251, as of September 30, 2022 the entity maintains two insurance policies with effect from April 15, 2022 to April 14, 2023 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.

154

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:

	For the nine-months period ended September 30,						01.07.2022 to 30.09.2022			01.07.2021 to 30.09.2021
	2022			2021
	MCh$			MCh$			MCh$			MCh$
Interest revenue		1,620,414			985,544			629,903			340,488
Interest expenses		(683,201	)		(179,728	)		(316,751	)		(63,521	)
Total net interest income		937,213			805,816			313,152			276,967

(b) The composition of interest revenue is as follows:

	For the nine-months period ended September 30,						01.07.2022 to 30.09.2022		01.07.2021 to 30.09.2021
	2022			2021
	MCh$			MCh$			MCh$		MCh$
Financial assets at amortized cost
Rights by resale agreements and securities lending		2,672			1,297			1,147		634
Debt financial instruments		10,276			433			3,400		391
Loans and advances to Banks		108,857			9,417			43,384		3,519
Commercial loans		720,532			449,979			278,770		154,282
Residential mortgage loans		235,153			206,637			82,077		69,478
Consumer Loans		431,362			319,172			159,866		106,440
Other financial instruments		306			124			105		41
Financial assets at fair value through other comprehensive income
Debt financial instruments		113,975			18,760			53,180		11,331
Other financial instruments		7,108			677			5,662		217
Income of accounting hedges of interest rate risk		(9,827	)		(20,952	)		2,312		(5,845	)
Total		1,620,414			985,544			629,903		340,488

(b.1) At the end of the period, the stock of interest not recognized in income is as follows:

	September		September
	2022		2021
	MCh$		MCh$
Commercial loans		20,504		11,146
Residential mortgage loans		2,415		1,755
Consumer Loans		2,660		23
Total		25,579		12,924

155

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:

	For the nine-months period ended September 30,				01.07.2022 to 30.09.2022		01.07.2021 to 30.09.2021
	2022		2021
	MCh$		MCh$		MCh$		MCh$
Commercial loans		522		697		157		221
Residential mortgage loans		952		700		370		303
Consumer Loans		—		226		—		68
Total		1,474		1,623		527		592

(c) The composition of interest expenses is as follows:

	For the nine-months period ended September 30,						01.07.2022 to 30.09.2022			01.07.2021 to 30.09.2021
	2022			2021
	MCh$			MCh$			MCh$			MCh$
Financial liabilities at amortized cost
Current accounts and other demand deposits		3,403			289			1,386			112
Saving accounts and time deposits		484,025			30,938			238,848			13,492
Obligations by repurchase agreements and securities lending		9,162			277			5,165			161
Borrowings from financial institutions		23,980			17,039			10,367			6,334
Debt financial instruments issued		154,535			129,662			53,773			43,130
Other financial obligations		—			—			—			—
Lease liabilities		1,400			1,514			479			462
Financial instruments of regulatory capital issued		23,094			21,905			8,006			7,380
Income of accounting hedges of interest rate risk		(16,398	)		(21,896	)		(1,273	)		(7,550	)
Total		683,201			179,728			316,751			63,521

156

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

30. Interest Revenue and Expenses, continued:

(d) As of September 30, 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.

	For the nine-months period ended September 30,																		01.07.2022 to									01.07.2021 to
	2022									2021									30.09.2022									30.09.2021
	Income			Expense			Total			Income			Expense			Total			Income			Expense			Total			Income			Expense			Total
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Gain from fair value accounting hedges		608			—			608			4,929			—			4,929			—			—			—			33			—			33
Loss from fair value accounting hedges		(740	)		—			(740	)		(4,309	)		—			(4,309	)		—			—			—			(65	)		—			(65	)
Gain from cash flow accounting hedges		65,327			77,433			142,760			11,664			36,849			48,513			13,033			17,056			30,089			4,043			16,467			20,510
Loss from cash flow accounting hedges		(74,414	)		(61,035	)		(135,449	)		(28,846	)		(14,953	)		(43,799	)		(10,721	)		(15,783	)		(26,504	)		(9,861	)		(8,917	)		(18,778	)
Net gain on hedge items		(608	)		—			(608	)		(4,390	)		—			(4,390	)		—			—			—			5			—			5
Total		(9,827	)		16,398			6,571			(20,952	)		21,896			944			2,312			1,273			3,585			(5,845	)		7,550			1,705

157

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

31. UF indexation revenue and expenses:

(a) At the end of the period, the summary of reajustes is as follows:

	For the nine-months period ended September 30,						01.07.2022 to 30.09.2022			01.07.2021 to 30.09.2021
	2022			2021
	MCh$			MCh$			MCh$			MCh$
UF indexation revenue		1,683,547			518,442			599,991			195,552
UF indexation expenses		(911,247	)		(291,179	)		(330,063	)		(105,624	)
Total net income from UF indexation		772,300			227,263			269,928			89,928

(b) The composition of UF indexation revenue is as follows

	For the nine-months period ended September 30,						01.07.2022 to 30.09.2022			01.07.2021 to 30.09.2021
	2022			2021
	MCh$			MCh$			MCh$			MCh$
Financial assets at amortized cost
Rights by resale agreements and securities lending		—			—			—			—
Debt financial instruments		54,061			3,013			19,358			2,883
Loans and advances to Banks		—			—			—			—
Commercial loans		678,314			211,581			244,173			77,414
Residential mortgage loans		1,060,404			333,200			378,179			125,669
Consumer Loans		5,706			2,416			1,931			856
Other financial instruments		3,033			987			941			347
Financial assets at fair value through other comprehensive income		—			—			—			—
Debt financial instruments		54,421			10,544			20,225			4,900
Other financial instruments		—			—			—			—
Income of accounting hedges of UF, IVP, IPC indexation risk		(172,392	)		(43,299	)		(64,816	)		(16,517	)
Total		1,683,547			518,442			599,991			195,552

(b.1) At the end of the period, the stock of UF indexation not recognized in results is as follows:

	September		September
	2022		2021
	MCh$		MCh$
Commercial loans		4,083		1,731
Residential mortgage loans		6,724		1,846
Consumer Loans		74		—
Total		10,881		3,577

158

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

31. UF indexation revenue and expenses, continued:

(b.2) The amount of indexation recognized on the basis received by the impaired portfolio in the period 2022 amounted to:

	For the nine-months period ended September 30,				01.07.2022 to 30.09.2022		01.07.2021 to 30.09.2021
	2022		2021
	MCh$		MCh$		MCh$		MCh$
Commercial loans		818		245		244		82
Residential mortgage loans		2,933		516		1,233		220
Consumer Loans		1		—		—		—
Total		3,752		761		1,477		302

(c) The composition of UF indexation expenses is as follows:

	For the nine-months period ended September 30,				01.07.2022 to 30.09.2022		01.07.2021 to 30.09.2021
	2022		2021
	MCh$		MCh$		MCh$		MCh$
Financial liabilities at amortized cost
Current accounts and other demand deposits		30,719		17,649		10,576		7,285
Saving accounts and time deposits		144,165		31,481		59,908		10,814
Obligations by repurchase agreements and securities lending		—		—		—		—
Borrowings from financial institutions		—		—		—		—
Debt financial instruments issued		640,824		211,364		225,432		76,184
Other financial obligations		—		—		—		—
Financial instruments of regulatory capital issued		95,539		30,685		34,147		11,341
Income of accounting hedges of UF, IVP, IPC indexation risk		—		—		—		—
Total		911,247		291,179		330,063		105,624

159

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

31. UF indexation revenue and expenses, continued:

(d) As of September 30, 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

	For the nine-months period ended September 30,																01.07.2022 to								01.07.2021 to
	2022								2021								30.09.2022								30.09.2021
	Income			Expense		Total			Income			Expense		Total			Income			Expense		Total			Income			Expense		Total
	MCh$			MCh$		MCh$			MCh$			MCh$		MCh$			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		(172,392	)		—		(172,392	)		(43,299	)		—		(43,299	)		(64,816	)		—		(64,816	)		(16,517	)		—		(16,517	)
Net gain on hedge items		—			—		—			—			—		—			—			—		—			—			—		—
Total		(172,392	)		—		(172,392	)		(43,299	)		—		(43,299	)		(64,816	)		—		(64,816	)		(16,517	)		—		(16,517	)

160

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:

	For the nine-months period ended September 30,				01.07.2022 to 30.09.2022		01.07.2021 to 30.09.2021
	2022		2022
	MCh$		MCh$		MCh$		MCh$
Income from commissions and services rendered
Comissions from debit and credit card services		160,138		131,264		53,362		46,143
Remuneration from administration of mutual funds, investment funds or others		90,388		79,192		31,203		29,722
Comissions from collections and payments		63,050		54,445		22,125		18,919
Comissions from portfolio management		43,720		37,136		15,636		11,372
Remuneration from brokerage and insurance advisory		26,441		23,006		9,305		8,804
Comissions from guarantees and letters of credit		26,117		22,055		9,304		7,494
Use of distribution channel		20,489		23,657		6,876		7,034
Brand use agreement		20,031		16,020		6,806		5,322
Comissions from trading and securities management		15,288		15,396		5,488		4,908
Comissions from credit prepayments		7,306		11,299		2,434		3,318
Financial advisory services		6,704		4,598		4,564		3,910
Comissions from lines of credit and current account overdrafts		3,412		3,293		1,168		1,088
Insurance not related to the granting of credits to legal entities		2,866		4,369		1,151		1,158
Insurance related to the granting of credits to legal entities		1,273		632		413		97
Comissions from factoring operations services		1,026		982		351		325
Loan commissions with letters of credit		124		260		42		75
Other commission earned		12,857		10,916		4,057		3,554
Total		501,230		438,520		174,285		153,243
Expenses from commissions and services received
Commissions from card transactions		36,655		28,797		11,927		8,768
Interbank transactions		28,893		22,473		10,501		7,910
Expenses from obligations of loyalty and merit card customers programs		24,921		21,034		9,672		8,887
Commissions from use of card brands license		6,617		5,808		1,245		3,426
Comissions from securities transaction		4,246		4,381		1,531		1,424
Collections and payments		3,344		3,225		1,125		1,054
Other commissions from services received		1,375		1,436		389		776
Total		106,051		87,154		36,390		32,245

161

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:

	For the nine-months period ended September 30,						01.07.2022 to 30.09.2022			01.07.2021 to 30.09.2021
	2022			2021
Financial result from:	MCh$			MCh$			MCh$			MCh$
Financial assets held for trading at fair value through profit or loss:
Financial derivative contracts		4,883,154			1,962,165			1,911,088			1,615,971
Debt Financial Instruments		149,080			1,097			61,266			5,868
Other financial instruments		7,576			3,391			3,515			915
Financial liabilities held for trading at fair value through profit or loss
Financial derivative contracts		(4,914,853	)		(1,847,232	)		(1,900,576	)		(1,520,789	)
Other financial instruments		(81	)		739			(436	)		416
Subtotal		124,876			120,160			74,857			102,381
Non-trading financial assets mandatorily measured at fair value through profit or loss:
Debt Financial Instruments		—			—			—			—
Other financial instruments		—			—			—			—
Financial assets designated as at fair value through profit or loss:
Debt Financial Instruments		—			—			—			—
Other financial instruments		—			—			—			—
Financial liabilities designated as at fair value through profit or loss:
Current accounts and other demand deposits and savings accounts and other time deposits		—			—			—			—
Debt instruments issued		—			—			—			—
Others		—			—			—			—
Derecognition of financial assets and liabilities at amortized cost and financial assets at fair value through other comprehensive income:
Financial assets at amortized cost		—			4,667			—			—
Financial assets at fair value through other comprehensive income		(57,901	)		4,692			(58,376	)		(50	)
Financial liabilities at amortized cost		(1	)		(1	)		—			—
Financial instruments of regulatory capital issued		—			—			—			—
Subtotal		(57,902	)		9,358			(58,376	)		(50	)
Exchange, indexation and accounting hedging of foreign currency
Gain (loss) from foreign currency exchange		(51,357	)		(165,848	)		(27,458	)		(193,823	)
Gain (loss) from indexation for exchange rate		15,017			10,297			5,576			7,597
Net gain (loss) from derivatives in accounting hedges of foreign currency risk		147,789			126,478			51,126			121,480
Subtotal		111,449			(29,073	)		29,244			(64,746	)
Reclassification of financial assets for changes to business models:
From financial assets at amortized cost to financial assets held for trading at fair value through profit or loss		—			—			—			—
From financial assets at fair value through other comprehensive income to financial assets held for trading at fair value through profit or loss		—			—			—			—
Modifications of financial assets and liabilities:
Financial assets at amortized cost		—			—			—			—
Financial assets at fair value through other comprehensive income		—			—			—			—
Financial liabilities at amortized cost		—			—			—			—
Lease liabilities		—			—			—			—
Financial instruments of regulatory capital issued		—			—			—			—
Ineffective accounting hedges:
Gain (loss) from ineffective cash flow accounting hedges		—			—			—			—
Gain (loss) from ineffective accounting hedges of net investment abroad		—			—			—			—
Other type of accounting hedges:
Hedges of other types of financial assets		—			—			—			—
Total		178,423			100,445			45,725			37,585

162

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

33. Net Financial income (expense), continued:

(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”.

	For the nine-months period ended September 30,						01.07.2022 to 30.09.2022			01.07.2021 to 30.09.2021
	2022			2021
	MCh$			MCh$			MCh$			MCh$
Loans and advances to Banks		(64	)		(60	)		(30	)		(44	)
Commercial loans		(11,680	)		(10,821	)		(4,079	)		(8,097	)
Residential mortgage loans		—			—			—			—
Consumer loans		(115	)		(1,288	)		(44	)		(933	)
Contingent loans		(1,716	)		(1,664	)		(814	)		(1,352	)
Total		(13,575	)		(13,833	)		(4,967	)		(10,426	)

34. Income attributable to investments in other companies:

The income obtained from investments in companies detailed in note No. 14 corresponds to the following:

		September		September
		2022		2021
Company	Shareholder	MCh$		MCh$
Associates
Transbank S.A.	Banco de Chile		3,550		(6,457	)
Centro de Compensación Automatizado S.A.	Banco de Chile		1,066		660
Redbanc S.A.	Banco de Chile		663		398
Administrador Financiero del Transantiago S.A.	Banco de Chile		514		182
Sociedad Interbancaria de Depósitos de Valores S.A.	Banco de Chile		318		196
Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A.	Banco de Chile		103		40
Sociedad Imerc OTC S.A.	Banco de Chile		91		(26	)
Sociedad Operadora de Tarjetas de Crédito Nexus S.A. (*)			—		963
Subtotal Associates			6,305		(4,044	)
Joint Ventures
Servipag Ltda.	Banco de Chile		1,194		405
Artikos Chile S.A.	Banco de Chile		428		402
Subtotal Joint Ventures			1,622		807
Minority Investments
Bolsa de Comercio de Santiago S.A.	Banchile Corredora de Bolsa		451		356
Banco Latinoamericano de Comercio Exterior S.A. (Bladex)	Banco de Chile		37		33
Bolsa Electrónica de Chile S.A.	Banchile Corredora de Bolsa		12		—
CCLV Contraparte Central S.A.	Banchile Corredora de Bolsa		—		1
Subtotal Minority Investments			500		390
Total			8,427		(2,847	)

(*) See Note No. 5, letter (c).

163

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:

	September			September
	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		4,504			4,286
Other income from assets received in payment or foreclosed at judicial auction		161			223
Provisions for adjustments to net realizable value of assets received in lieu of payment or foreclosed at judicial auction		(292	)		(140	)
Charge-off assets received in lieu of payment or foreclosed at judicial auction		(5,144	)		(1,557	)
Expenses to maintain assets received in lieu of payment or foreclosed at judicial auction		(651	)		(434	)
Non-current assets held for sale
Investments in other companies		(435	)		—
Intangible assets		—			—
Property and equipment		553			208
Assets for recovery of assets transferred in financial leasing operations		1,170			999
Other assets		—			—
Disposal groups held for sale		—			—
Total		(134	)		3,585

164

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:

	September		September
	2022		2021
	MCh$		MCh$
Revaluation of prepaid monthly payments		9,426		1,568
Income from investment properties		4,936		4,392
Income from correspondent banks		2,359		2,030
Expense recovery		1,598		1,813
Tax management income		104		3,069
Fiduciary and trustee commissions		55		170
Foreign trade income		52		38
Expense recovery income		35		42
Income from card brands issued		—		346
Provision for fixed income instruments		—		281
Others income		164		183
Total		18,729		13,932

b) During the periods 2022 and 2021, the Bank and its subsidiaries present other operating expenses, according to the following:

	September			September
	2022			2021
	MCh$			MCh$
Write-offs for operating risks		12,052			9,914
Expenses for credit operations of financial leasing		3,802			324
Correspondent banks		2,572			1,844
Card administration		1,937			2,085
Fiscal fines		402			5
Renegotiated loan insurance premium		270			315
Life ensurance		193			205
Expenses for charge-off leased assets recoveries		72			583
Provisions for trials and litigation		39			(40	)
Contribution to other organisms		10			192
Expense of provisions for operational risk and legal expenses		753			500
Provision for pending operations		(380	)		1,131
Expense recovery from operational risk events		(4,317	)		(3,097	)
Recoverable tax expenses		—			88
Others expenses		864			464
Total		18,269			14,513

165

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:

	September		September
	2022		2021
	MCh$		MCh$
Expenses for short-term employee benefit		357,663		320,360
Expenses for employee benefits due to termination of employment contract		17,556		9,765
Training expenses		2,032		1,448
Expenses for nursery and kindergarten		1,051		1,143
Other personnel expenses		4,025		3,213
Total		382,327		335,929

38. Administrative expenses:

This item is composed as follows:

	September		September
	2022		2021
	MCh $		MCh$
General administrative expenses
Information technology and communications		88,838		78,327
Maintenance and repair of property and equipment		30,714		29,696
External advisory services and professional services fees		10,881		9,991
Surveillance and securities transport services		9,699		9,913
Office supplies		6,594		5,181
Insurance premiums except to cover operational risk events		6,172		5,772
External service of financial information and fraud prevention		4,752		4,481
Postal box, mail, postage and home delivery services		4,159		4,180
Energy, heating and other utilities		3,837		3,246
External service of custody of documentation		2,880		2,205
Other expenses of obligations for lease contracts		2,694		3,048
Legal and notary expenses		2,586		3,128
Expenses for short-term leases		2,037		2,704
Representation and travel expenses		1,680		2,154
Donations		1,656		1,535
Expenses for leases low value		1,019		587
Fees for other technical reports		551		494
Fees for review and audit of the financial statements by the external auditor		529		564
Fines applied by other agencies		207		119
Other general administrative expenses		14,331		11,329
Outsource services
Technological developments expenses, certification and technology testing		13,173		13,225
Data processing		6,341		7,106
External credit evaluation service		3,464		3,514
External human resources administration services and supply of external personnel		1,123		821
External cleaning service, casino, custody of files and documents, storage of furniture and equipment		266		249
Call Center service for sales, marketing, quality control customer service		68		63
External collection service		—		5
Board expenses
Board of Directors Compensation		2,304		2,155
Other Board expenses		39		8
Marketing		26,208		19,658
Taxes, contributions and other legal charges
Contribution to the banking regulator		10,145		8,950
Real estate contributions		3,651		3,139
Taxes other than income tax		1,591		1,265
Municipal patents		1,167		1,028
Other legal charges		46		42
Total		265,402		239,882

166

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:

	September		September
	2022		2021
	MCh$		MCh$
Amortization of intangibles assets
Other intangible assets arising from business combinations		—		—
Other independently originated intangible assets		15,611		13,019
Depreciation of property and equipment
Buildings and land		6,960		1,696
Other property and equipment		16,384		20,332
Depreciation and impairment of leased assets
Buildings and land		23,123		21,303
Other property and equipment		—		—
Depreciation for improvements in leased real estate as leased of right-to-use assets		741		653
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		62,819		57,003

40. Impairment of non-financial assets:

As of September 30, 2022 and 2021, the composition of the item for impairment of non-financial assets is composed as follows:

	September			September
	2022			2021
	MCh$			MCh$
Impairment of intangible assets		(122	)		—
Impairment of property and equipment		(9	)		(3	)
Impairment of assets from income from ordinary activities from contracts with customers		71			345
Total		(60	)		342

167

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

41. Credit loss expense:

(a) The composition is as follows:

	For the nine-months period ended September 30,						01.07.2022 to 30.09.2022			01.07.2021 to 30.09.2021
	2022			2021
	MCh$			MCh$			MCh$			MCh$
Expense of provisions established for loan credit risk		194,324			116,829			74,504			46,441
Expense of special provisions for credit risk		158,378			144,081			41,248			52,538
Recovery of written-off credits		(48,606	)		(47,406	)		(16,214	)		(16,406	)
Impairments for credit risk from financial assets at fair value through other comprehensive income		7,653			5,381			6,680			6,504
Total		311,749			218,885			106,218			89,077

(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 warranty
	Evaluation						Evaluation			Evaluation									Fogape
As of September 30, 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		(125	)		—			—			—			—			(125	)		—		(125	)
Provisions released		—			—			—			—			—			—			—		—
Subtotal		(125	)		—			—			—			—			(125	)		—		(125	)
Commercial loans
Provisions established		(4,630	)		—			(15,344	)		(5,477	)		(35,273	)		(60,724	)		—		(60,724	)
Provisions released		—			3,447			—			—			—			3,447			14,929		18,376
Subtotal		(4,630	)		3,447			(15,344	)		(5,477	)		(35,273	)		(57,277	)		14,929		(42,348	)
Residential mortgage loans
Provisions established		—			(4,060	)		—			—			(1,598	)		(5,658	)		—		(5,658	)
Provisions released		—			—			—			—			—			—			—		—
Subtotal		—			(4,060	)		—			—			(1,598	)		(5,658	)		—		(5,658	)
Consumer loans
Provisions established		—			(38,710	)		—			—			(107,483	)		(146,193	)		—		(146,193	)
Provisions released		—			—			—			—			—			—			—		—
Subtotal		—			(38,710	)		—			—			(107,483	)		(146,193	)		—		(146,193	)
Expense of provisions established for credit risk		(4,755	)		(39,323	)		(15,344	)		(5,477	)		(144,354	)		(209,253	)		14,929		(194,324	)
Recovery of written-off credits
Loans and advances to Banks																						—
Commercial loans																						19,267
Residential mortgage loans																						7,963
Consumer loans																						21,376
Subtotal																						48,606
Loan credit loss expenses																						(145,718	)

168

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

41. Credit loss expense, 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 warranty
	Evaluation						Evaluation		Evaluation									Fogape
As of September 30, 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		208			—			—		—			—			208			—			208
Subtotal		208			—			—		—			—			208			—			208
Commercial loans
Provisions established		(1,921	)		—					(13,128	)		(36,306	)		(51,355	)		(24,811	)		(76,166	)
Provisions released		—			17,699			1,711		—			—			19,410			—			19,410
Subtotal		(1,921	)		17,699			1,711		(13,128	)		(36,306	)		(31,945	)		(24,811	)		(56,756	)
Residential mortgage loans
Provisions established		—			(2,032	)		—		—			(4,571	)		(6,603	)		—			(6,603	)
Provisions released		—			—			—		—			—			—			—			—
Subtotal		—			(2,032	)		—		—			(4,571	)		(6,603	)		—			(6,603	)
Consumer loans
Provisions established		—			—			—		—			(77,010	)		(77,010	)		—			(77,010	)
Provisions released		—			23,332			—		—			—			23,332			—			23,332
Subtotal		—			23,332			—		—			(77,010	)		(53,678	)		—			(53,678	)
Expense of provisions established for credit risk		(1,713	)		38,999			1,711		(13,128	)		(117,887	)		(92,018	)		(24,811	)		(116,829	)
Recovery of written-off credits
Loans and advances to Banks																						—
Commercial loans																						8,643
Residential mortgage loans																						4,308
Consumer loans																						34,455
Subtotal																						47,406
Loan credit loss expenses																						(69,423	)

169

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

41. Credit loss expense, continued:

(c) Summary of expense for special provisions for credit risk:

	For the nine-months period ended September 30,						01.07.2022 to 30.09.2022			01.07.2021 to 30.09.2021
	2022			2021
	MCh$			MCh$			MCh$			MCh$
Expenses of provisions for contingent loans:
Loans and advances to Banks		—			—			—			—
Commercial loans		6,293			1,295			6,567			618
Consumer loans		(932	)		(436	)		147			1,837
Expenses form provisions for country risk for transactions with debtors with residence abroad		8,017			3,222			(466	)		83
Expense of special provisions for loans abroad		—			—			—			—
Expenses of additional loan provisions:
Commercial loans		145,000			140,000			35,000			50,000
Residential mortgage loans		—			—			—			—
Consumer loans		—			—			—			—
Expense of other special provisions established for credit risk		158,378			144,081			41,248			52,538

42. Income from discontinued operations:

As of September 30, 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.

170

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 September 30, 2022	Parent Entity		Other Legal Entity			Key Personnel of the Consolidated Bank			Othe Related Party			Total
ASSETS	MCh$		MCh$			MCh$			MCh$			MCh$
Financial assets held for trading at fair value through profit or loss
Derivative Financial Instruments		—		492,586			—			—			492,586
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		—		180			—			—			180
Financial assets at fair value through other comprehensive income		—		16,248			—			—			16,248
Derivative Financial Instruments for hedging purposes		—		—			—			—			—
Financial assets at amortized cost
Rights by resale agreements and securities lending		—		—			—			—			—
Debt financial instruments		—		—			—			—			—
Commercial loans		—		622,654			1,103			11,661			635,418
Residential mortgage loans		—		—			14,999			58,080			73,079
Consumer Loans		—		—			2,082			10,121			12,203
Allowances established – Loans		—		(4,175	)		(20	)		(381	)		(4,576	)
Other assets		—		66,479			1			45			66,534
Contingent loans		—		187,373			4,470			19,891			211,734
LIABILITIES
Financial liabilities held for trading at fair value through profit or loss		—		—			—			—			—
Derivative Financial Instruments		—		473,923			—			—			—
Financial liabilities designated as at fair value through profit or loss		—		—			—			—			—
Derivative Financial Instruments for hedging purposes		—		—			—			—			—
Financial liabilities at amortized cost
Current accounts and other demand deposits		390		189,891			3,676			5,315			199,272
Saving accounts and time deposits		4,886		150,939			3,221			33,756			192,802
Obligations by repurchase agreements and securities lending		—		11,639			—			—			11,639
Borrowings from financial institutions		—		170,809			—			—			170,809
Debt financial instruments issued		—		—			—			—			—
Other financial obligations		—		—			—			—			—
Lease liabilities		—		10,741			—			—			10,741
Other liabilities		—		119,968			757			15			120,740

171

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			Othe 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		—		105,980			—			40			106,020
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		—		130,837			444			57			131,338

172

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

43. Related Party Disclosures, continued:

(b) Income and expenses from related party transactions (*):

As of September 30, 2022	Parent Entity		Other Legal Entity		Key personnel of the consolidated Bank			Other Related party			Total
	MCh$		MCh$		MCh$			MCh$			MCh$
Interest revenue		—		15,696		325			1,517			17,538
UF indexation revenue		—		18,855		1,526			5,906			26,287
Income from commissions		66		83,055		18			50			83,189
Net Financial income (expense)		—		85,709		—			—			85,709
Other income		—		79		—			—			79
Total Income		66		203,394		1,869			7,473			212,802
Interest expense		14		1,756		23			214			2,007
UF indexation expenses		—		—		5			46			51
Expenses from commissions		—		26,332		—			—			26,332
Expenses credit losses		—		256		(7	)		(39	)		210
Expenses from salaries and employee benefits		—		—		27,078			56,571			83,649
Administrative expenses		—		15,421		2,707			74			18,202
Other expenses		—		10		1			10			21
Total Expenses		14		43,775		29,807			56,876			130,472

As of September 30, 2021	Parent Entity		Other Legal Entity			Key personnel of the consolidated Bank		Other Related party		Total
	MCh$		MCh$			MCh$		MCh$		MCh$
Interest revenue		—		4,894			257		1,261		6,412
UF indexation revenue		—		3,211			498		2,016		5,725
Income from commissions		106		71,732			19		50		71,907
Net Financial income (expense)		—		33,947			—		—		33,947
Other income		—		343			—		—		343
Total Income		106		114,127			774		3,327		118,334
Interest expense		1		105			1		6		113
UF indexation expenses		—		7			—		1		8
Expenses from commissions		—		22,041			—		—		22,041
Expenses credit losses		—		(366	)		23		203		(140	)
Expenses from salaries and employee benefits		—		2			21,339		53,304		74,645
Administrative expenses		—		14,914			2,458		67		17,439
Other expenses		—		30			—		2		32
Total Expenses		1		36,733			23,821		53,583		114,138

(*) This does not constitute a Statement of Income from operations with related parties since the assets with these parties are not necessarily equal to the liabilities and in each of them the total income and expenses are reflected and not those corresponding to matched operations.

173

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

43. Related Party Disclosures, continued:

(c) Transactions with related parties:

As of September 30, 2022

	Nature of the relationship	Description of the transaction			Transactions under equivalence conditions to those transactions with mutual independence			Effect on Income				Effect on Financial position
Company name	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 license services	30 days	Contract	Si		340		—		340		—		70
		IT support services	30 days	Contract	Si		247		—		247		—		—
Canal 13	Other related parties	Advertising service	30 days	Monthly	Si		194		—		194		—		48
Servipag Ltda.	Joint venture	Software services	30 days	Contract	Si		650		—		650		—		499
		Collection services	30 days	Contract	Si		3,234		—		3,234		—		499
Bolsa de Comercio de Santiago	Other related parties	IT support services	30 days	Contract	Si		443		—		443		—		—
Enex S.A.	Other related parties	Rent floor space for ATMs	30 days	Contract	Si		155		—		155		—		158
Redbanc S.A.	Associates	Software development	30 days	Contract	Si		316		—		316		—		1,165
		Equipment maintenance	30 days	Contract	Si		41		—		41		—		—
		Electronic transaction management services	30 days	Contract	Si		9,836		—		9,836		—		—
Sistemas Oracle de Chile Ltda.	Other related parties	Software services	30 days	Contract	Si		4,284		—		4,284		—		1,198
		IT support services	30 days	Contract	Si		1,743		—		1,743		—		—
Depósito Central de Valores	Associates	Custodial services	30 days	Contract	Si		1,693		—		1,693		—		44
Manantial S.A	Other related parties	Materials and supplies	30 days	Contract	Si		163		—		163		—		—
Radiodifusion SPA	Other related parties	Advertising service	30 days	Contract	Si		76		—		76		—		10
Nexus S.A.	Other related parties	Customer product delivery services	30 days	Contract	Si		945		—		945		—		1,315
		Card processing	30 days	Contract	Si		7,924		—		7,924		—		—
		IT support services	30 days	Contract	Si		1,207		—		1,207		—		—
		Embossing services	30 days	Contract	Si		534		—		534		—		—
		Fraud prevention services	30 days	Contract	Si		899		—		899		—		—
Artikos Chile S.A.	Joint venture	IT support services	30 days	Contract	Si		288		—		288		—		16
DCV registros S.A	Associates	IT services	30 days	Contract	Si		234		—		234		—		—
Soc operadora de la camara de compensacion	Associates	Collection services	30 days	Contract	Si		432		—		432		—		53
Comder Contraparte Central S.A.	Associates	Securities clearing services	30 days	Contract	Si		599		—		599		—		45,934
Transbank S.A.	Associates	Processing fees	30 days	Contract	Si		1,031		—		1,031		—		252
		Exchange commission	30 days	Contract	Si		71,299		71,299		—		696		—
Centro de Compensación Automatizado S.A.	Associates	Transfer services	30 days	Contract	Si		1,612		—		1,612		—		243
Citibank	Other related parties	Connectivity business commissions	Quarterly	Contract	Si		7,589		7,589		—		4,338		—

174

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:

	September 2022		September 2021
	MCh$		MCh$
Directory:
Payment of remuneration and attendance fees of the Board of Directors - Bank and its subsidiaries		2,304		2,155
Key Personnel of the Management of the Bank and its Subsidiaries:
Payment for benefits to short-term employees		26,253		21,343
Payment for benefits to post-employment employees		—		—
Payment for benefits to long-term employees		—		—
Payment for benefits to employees for termination of employment contract		823		—
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		27,076		21,343
Total		29,380		23,498

(e) Composition of the Board of Directors and key personnel of the Management of the Bank and its subsidiaries:

	September		September
	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		5
Division Managers / Area – Bank		94		96
Division Managers / Area – Subsidiaries		31		25
Subtotal		131		127
Total		150		145

175

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 Control and Productivity 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.

176

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.

177

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.

178

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.

179

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.

180

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.

181

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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
	September		December		September		December		September		December		September		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		—		—		903,092		742,545		—		—		903,092		742,545
Swaps		—		—		3,245,569		1,958,243		—		—		3,245,569		1,958,243
Call Options		—		—		9,341		4,509		—		—		9,341		4,509
Put Options		—		—		471		199		—		—		471		199
Futures		—		—		—		—		—		—		—		—
Subtotal		—		—		4,158,473		2,705,496		—		—		4,158,473		2,705,496
Debt Financial Instruments:
From the Chilean Government and Central Bank		81,608		169,067		1,763,531		3,303,055		—		—		1,845,139		3,472,122
Other debt financial instruments issued in Chile		—		—		332,287		214,336		6,022		51,484		338,309		265,820
Financial debt instruments issued Abroad		—		—		—		—		—		—		—		—
Subtotal		81,608		169,067		2,095,818		3,517,391		6,022		51,484		2,183,448		3,737,942
Others		5,274		138,753		—		—		—		—		5,274		138,753
Financial Assets at fair value through Other Comprehensive Income
Debt Financial Instruments: (1)
From the Chilean Government and Central Bank		833,997		507,368		1,349,798		1,981,482		—		—		2,183,795		2,488,850
Other debt financial instruments issued in Chile		—		—		1,308,498		540,756		27,693		25,203		1,336,191		565,959
Financial debt instruments issued Abroad		—		—		142,457		—		—		—		142,457		—
Subtotal		833,997		507,368		2,800,753		2,522,238		27,693		25,203		3,662,443		3,054,809
Derivative contracts financial for hedging purposes
Forwards		—		—		—		—		—		—		—		—
Swaps		—		—		168,146		277,802		—		—		168,146		277,802
Call Options		—		—		—		—		—		—		—		—
Put Options		—		—		—		—		—		—		—		—
Futures		—		—		—		—		—		—		—		—
Subtotal		—		—		168,146		277,802		—		—		168,146		277,802
Total		920,879		815,188		9,223,190		9,022,927		33,715		76,687		10,177,784		9,914,802
Financial Liabilities
Financial liabilities held for trading at fair value through profit or loss
Derivative contracts financial:
Forwards		—		—		746,600		505,179		—		—		746,600		505,179
Swaps		—		—		3,567,626		2,264,139		—		—		3,567,626		2,264,139
Call Options		—		—		5,757		2,726		—		—		5,757		2,726
Put Options		—		—		1,151		459		—		—		1,151		459
Futures		—		—		—		—		—		—		—		—
Subtotal		—		—		4,321,134		2,772,503		—		—		4,321,134		2,772,503
Others		—		—		2,742		9,610		—		—		2,742		9,610
Derivative contracts financial for hedging purposes
Forwards		—		—		—		88		—		—		—		88
Swaps		—		—		28,930		608		—		—		28,930		608
Call Options		—		—		—		—		—		—		—		—
Put Options		—		—		—		—		—		—		—		—
Futures		—		—		—		—		—		—		—		—
Subtotal		—		—		28,930		696		—		—		28,930		696
Total		—		—		4,352,806		2,782,809		—		—		4,352,806		2,782,809

(1) As of September 30, 2022, 100% of instruments of Level 3 have denomination “Investment Grade”. Also, 100% of total of these financial instruments correspond to domestic issuers.

182

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:

	September 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 September 30, 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		792		—		17,573		(63,827	)		—		—		6,022
Subtotal		51,484		792		—		17,573		(63,827	)		—		—		6,022
Financial Assets at fair value through Other Comprehensive Income
Debt Financial Instruments:
Other debt financial instruments issued in Chile		25,203		887		1,759		11,843		(11,999	)		—		—		27,693
Subtotal		25,203		887		1,759		11,843		(11,999	)		—		—		27,693
Total		76,687		1,679		1,759		29,416		(75,826	)		—		—		33,715

	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”.

183

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 September 30, 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		6,022		(62	)		51,484		(506	)
Subtotal		6,022		(62	)		51,484		(506	)
Financial Assets at fair value through Other Comprehensive Income
Debt Financial Instruments:
Other debt financial instruments issued in Chile		27,693		(696	)		25,203		(782	)
Subtotal		27,693		(696	)		25,203		(782	)
Total		33,715		(758	)		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.

184

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
	September		December		September		December
	2022		2021		2022		2021
	MCh$		MCh$		MCh$		MCh$
Assets
Cash and due from banks		2,857,318		3,713,734		2,857,318		3,713,734
Transactions in the course of collection		488,526		486,700		488,526		486,700
Subtotal		3,345,844		4,200,434		3,345,844		4,200,434
Financial assets at amortized cost
Rights by resale agreements and securities lending		44,488		64,365		44,488		64,365
Debt financial instruments		885,951		839,744		771,684		764,528
Loans and advances to Banks
Domestic banks		—		159,960		—		159,960
Central Bank of Chile		2,800,817		1,090,000		2,800,817		1,090,000
Foreign banks		310,452		279,353		308,987		278,813
Subtotal		4,041,708		2,433,422		3,925,976		2,357,666
Loans to customers, net
Commercial loans		19,786,445		19,217,868		18,852,686		18,423,126
Residential mortgage loans		11,136,919		10,315,921		10,615,550		9,753,455
Consumer loans		4,400,347		3,978,079		4,332,990		3,899,940
Subtotal		35,323,711		33,511,868		33,801,226		32,076,521
Total		42,711,263		40,145,724		41,073,046		38,634,621
Liabilities
Transactions in the course of payment		402,356		369,980		402,356		369,980
Financial liabilities at amortized cost
Current accounts and other demand deposits		14,298,698		18,249,881		14,298,698		18,249,881
Saving accounts and time deposits		12,992,748		8,803,713		12,993,674		8,808,900
Obligations by repurchase agreements and securities lending		201,805		85,399		201,805		85,399
Borrowings from financial institutions		5,360,800		4,861,865		4,745,323		4,325,869
Debt financial instruments issued
Letters of credit for residential purposes		2,697		4,005		2,770		4,209
Letters of credit for general purposes		64		109		67		116
Bonds		8,780,052		8,557,281		8,213,986		8,397,835
Other financial obligations		234,149		250,005		258,042		274,838
Subtotal		41,871,013		40,812,258		40,714,365		40,147,047
Financial instruments of regulatory capital issued
Subordinate bonds		1,002,053		917,510		929,362		869,364
Total		43,275,422		42,099,748		42,046,083		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.

185

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 September 30, 2022 and December 31, 2021:

	Level 1 Estimated Fair Value				Level 1 Estimated Fair Value				Level 3 Estimated Fair Value				Total Estimated Fair Value
	September		December		September		December		September		December		September		December
	2022		2021		2022		2021		2022		2021		2022		2021
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Assets
Cash and due from banks		2,857,318		3,713,734		—		—		—		—		2,857,318		3,713,734
Transactions in the course of collection		488,526		486,700		—		—		—		—		488,526		486,700
Subtotal		3,345,844		4,200,434		—		—		—		—		3,345,844		4,200,434
Financial assets at amortized cost
Rights by resale agreements and securities lending		44,488		64,365		—		—		—		—		44,488		64,365
Debt financial instruments		771,684		764,528		—		—		—		—		771,684		764,528
Loans and advances to Banks
Domestic banks		—		159,960		—		—		—		—		—		159,960
Central Bank of Chile		2,800,817		1,090,000		—		—		—		—		2,800,817		1,090,000
Foreign banks		—		—		—		—		308,987		278,813		308,987		278,813
Subtotal		3,616,989		2,078,853		—		—		308,987		278,813		3,925,976		2,357,666
Loans to customers, net
Commercial loans		—		—		—		—		18,852,686		18,423,126		18,852,686		18,423,126
Residential mortgage loans		—		—		—		—		10,615,550		9,753,455		10,615,550		9,753,455
Consumer loans		—		—		—		—		4,332,990		3,899,940		4,332,990		3,899,940
Subtotal		—		—		—		—		33,801,226		32,076,521		33,801,226		32,076,521
Total		6,962,833		6,279,287		—		—		34,110,213		32,355,334		41,073,046		38,634,621
Liabilities
Transactions in the course of payment		402,356		369,980		—		—		—		—		402,356		369,980
Financial liabilities at amortized cost
Current accounts and other demand deposits		14,298,698		18,249,881		—		—		—		—		14,298,698		18,249,881
Saving accounts and time deposits		—		—		—		—		12,993,674		8,808,900		12,993,674		8,808,900
Obligations by repurchase agreements and securities lending		201,805		85,399		—		—		—		—		201,805		85,399
Borrowings from financial institutions		—		—		—		—		4,745,323		4,325,869		4,745,323		4,325,869
Debt financial instruments issued
Letters of credit for residential purposes		—		—		2,770		4,209		—		—		2,770		4,209
Letters of credit for general purposes		—		—		67		116		—		—		67		116
Bonds		—		—		8,213,986		8,397,835		—		—		8,213,986		8,397,835
Other financial obligations		—		—		—		—		258,042		274,838		258,042		274,838
Subtotal		14,500,503		18,335,280		8,216,823		8,402,160		17,997,039		13,409,607		40,714,365		40,147,047
Financial instruments of regulatory capital issued
Subordinate bonds		—		—		—		—		929,362		869,364		929,362		869,364
Total		14,902,859		18,705,260		8,216,823		8,402,160		18,926,401		14,278,971		42,046,083		41,386,391

186

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.

187

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 September 30, 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:

			September 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
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Assets
Cash and due from banks		2,857,318		—		—		—		2,857,318		—		—		—		—		2,857,318
Transactions in the course of collection		—		488,526		—		—		488,526		—		—		—		—		488,526
Financial assets held for trading at fair value through profit or loss
Derivative contracts financial		—		258,676		311,985		905,526		1,476,187		947,703		583,866		1,150,717		2,682,286		4,158,473
Debt financial instruments		—		2,183,448		—		—		2,183,448		—		—		—		—		2,183,448
Others		—		5,274		—		—		5,274		—		—		—		—		5,274
Financial assets at fair value through other comprehensive income		—		30,397		12,966		2,273,562		2,316,925		580,388		85,334		679,796		1,345,518		3,662,443
Derivative contracts financial for hedging purposes		—		—		—		22,214		22,214		40,284		1,766		103,882		145,932		168,146
Financial assets at amortized cost
Rights by resale agreements and securities lending		—		29,962		9,072		5,454		44,488		—		—		—		—		44,488
Debt financial instruments		—		—		—		—		—		16,075		434,365		435,511		885,951		885,951
Loans and advances to Banks (*)		—		2,807,612		—		304,282		3,111,894		—		—		—		—		3,111,894
Loans to customers, net (*)		—		4,291,044		3,164,671		6,521,644		13,977,359		7,474,265		3,936,952		10,696,891		22,108,108		36,085,467
Total fnancial assets		2,857,318		10,094,939		3,498,694		10,032,682		26,483,633		9,058,715		5,042,283		13,066,797		27,167,795		53,651,428

				September 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
	MCh$			MCh$			MCh$		MCh$		MCh$			MCh$		MCh$		MCh$		MCh$		MCh$
Liabilities
Transactions in the course of payment		—			402,356			—		—		402,356			—		—		—		—		402,356
Financial liabilities held for trading at fair value through profit or loss
Derivative contracts financial		—			324,821			311,108		927,496		1,563,425			902,043		708,338		1,147,328		2,757,709		4,321,134
Others		—			1,748			64		930		2,742			—		—		—		—		2,742
Derivative contracts financial for hedging purposes		—			—			—		—		—			—		4,452		24,478		28,930		28,930
Financial liabilities at amortized cost
Current accounts and other demand deposits		14,298,698			—			—		—		14,298,698			—		—		—		—		14,298,698
Saving accounts and time deposits (**)		—			8,366,011			2,655,229		1,468,845		12,490,085			61,989		6,639		599		69,227		12,559,312
Obligations by repurchase agreements and securities lending		—			201,746			59		—		201,805			—		—		—		—		201,805
Borrowings from financial institutions		—			275,701			28,618		639,515		943,834			4,416,966		—		—		4,416,966		5,360,800
Debt financial instruments issued
Letters of credit		—			352			547		560		1,459			887		43		372		1,302		2,761
Bonds		—			305,120			277,468		755,437		1,338,025			1,907,911		2,347,604		3,186,512		7,442,027		8,780,052
Other financial obligations		—			234,029			20		68		234,117			32		—		—		32		234,149
Lease liabilities		—			2,870			5,272		20,838		28,980			28,803		17,387		20,287		66,477		95,457
Financial instruments of regulatory capital issued		—			6,529			106,795		9,142		122,466			19,544		15,195		844,848		879,587		1,002,053
Total fnancial liabilities		14,298,698			10,121,283			3,385,180		3,822,831		31,627,992			7,338,175		3,099,658		5,224,424		15,662,257		47,290,249
Mismatch		(11,441,380	)		(26,344	)		113,514		6,209,851		(5,144,359	)		1,720,540		1,942,625		7,842,373		11,505,538		6,361,179

(*)  These balances are presented without deduction of their respective provisions, which amount to Ch$761,756 million for loans to customers and Ch$625 million for borrowings from financial institutions.

(**)  Excludes term saving accounts, which amount to Ch$433,436 million.

188

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
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Assets
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

				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.

189

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

46. Financial and Non-Financial Assets and Liabilities by Currency:

As of September 30, 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		1,099,379		—		—		1,605,323		—		20,683		50,707		30,791		11,645		25,752		13,038		2,857,318
Transactions in the course of collection		140,213		—		—		246,161		—		17,266		70,113		—		3,819		2,726		8,228		488,526
Financial assets held for trading at fair value through profit or loss
Derivative financial instruments		3,599,162		—		—		501,701		—		3,429		53,880		—		—		—		301		4,158,473
Debt financial instruments		2,015,024		168,365		—		59		—		—		—		—		—		—		—		2,183,448
Others		5,274		—		—		—		—		—		—		—		—		—		—		5,274
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		2,928,865		586,310		—		147,268		—		—		—		—		—		—		—		3,662,443
Others		—		—		—		—		—		—		—		—		—		—		—		—
Derivative contracts financial for hedging purposes		168,146		—		—		—		—		—		—		—		—		—		—		168,146
Financial assets at amortized cost
Rights by resale agreements and securities lending		44,488		—		—		—		—		—		—		—		—		—		—		44,488
Debt financial instruments		322,052		563,899		—		—		—		—		—		—		—		—		—		885,951
Loans and advances to Banks		2,800,817		—		—		309,458		—		—		994		—		—		—		—		3,111,269
Loans to customers - Commercial		9,139,441		7,215,862		129,789		3,245,104		—		554		49,499		121		2,798		3,277		—		19,786,445
Loans to customers - Residential mortgage		10,204		11,126,715		—		—		—		—		—		—		—		—		—		11,136,919
Loans to customers - Consumer		4,277,772		56,884		—		65,691		—		—		—		—		—		—		—		4,400,347
Investments in other companies		59,704		—		—		25		—		—		3		—		—		—		—		59,732
Intangible assets		86,916		—		—		—		—		—		—		—		—		—		—		86,916
Property and equipment		210,311		—		—		—		—		—		—		—		—		—		—		210,311
Right-of-use assets		100,422		119		—		—		—		—		—		—		—		—		—		100,541
Current tax assets		75,562		—		—		—		—		—		—		—		—		—		—		75,562
Deferred tax assets		521,337		—		—		—		—		—		—		—		—		—		—		521,337
Other assets		415,420		29,964		2,837		405,213		—		5		3,392		—		—		—		2		856,833
Non-current assets and disposal groups held for sale		13,176		—		—		—		—		—		—		—		—		—		—		13,176
TOTAL ASSETS		28,033,685		19,748,118		132,626		6,526,003		—		41,937		228,588		30,912		18,262		31,755		21,569		54,813,455

190

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

46. Financial and Non-Financial Assets and Liabilities by Currency, continued:

As of September 30, 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		172,823			—		—		168,871			—		17,588		35,481			11			672			6,775		135			402,356
Financial liabilities held for trading at fair value through profit or loss
Derivative financial instruments		3,857,422			—		—		423,087			—		2,771		37,854			—			—			—		—			4,321,134
Others		1,812			—		—		930			—		—		—			—			—			—		—			2,742
Financial liabilities designated as at fair value through profit or loss		—			—		—		—			—		—		—			—			—			—		—			—
Derivative contracts financial for hedging purposes		28,930			—		—		—			—		—		—			—			—			—		—			28,930
Financial liabilities at amortized cost
Current accounts and other demand deposits		11,539,840			68,306		—		2,635,679			—		42		54,758			45			1			1		26			14,298,698
Saving accounts and time deposits		9,390,675			1,951,298		—		1,650,445			—		—		330			—			—			—		—			12,992,748
Obligations by repurchase agreements and securities lending		201,632			—		—		173			—		—		—			—			—			—		—			201,805
Borrowings from financial institutions		4,348,460			—		175		1,005,374			—		—		3,045			—			—			3,688		58			5,360,800
Debt financial instruments issued		—			6,490,060		—		780,897			—		—		95,877			390,239			201,616			—		824,124			8,782,813
Other financial obligations		135,114			122		—		98,913			—		—		—			—			—			—		—			234,149
Lease liabilities		95,457			—		—		—			—		—		—			—			—			—		—			95,457
Financial instruments of regulatory capital issued		—			1,002,053		—		—			—		—		—			—			—			—		—			1,002,053
Provisions for contingencies		151,369			—		—		—			—		—		—			—			—			—		—			151,369
Provision for dividends, interests and reappraisal of financial instruments of regulatory capital issued		375,197			—		—		—			—		—		—			—			—			—		—			375,197
Special provisions for credit risk		744,238			—		15		16,485			—		—		510			—			22			171		—			761,441
Currents tax liabilities		677			—		—		—			—		—		—			—			—			—		—			677
Deferred tax liabilities		—			—		—		—			—		—		—			—			—			—		—			—
Other liabilities		545,467			203,275		177		357,470			—		10		8,873			15			25			—		101			1,115,413
Liabilities included in disposal groups held for sale		—			—		—		—			—		—		—			—			—			—		—			—
TOTAL LIABILITIES		31,589,113			9,715,114		367		7,138,324			—		20,411		236,728			390,310			202,336			10,635		824,444			50,127,782
Mismatch of Financial Assets and Liabilities (*)		(3,221,328	)		10,206,196		129,614		(643,604	)		—		21,531		(2,152	)		(359,383	)		(184,027	)		21,291		(802,776	)		5,165,362

(*) This value does not consider non-financial assets and liabilities and the notional values of derivative instruments, which are disclosed at fair value.

191

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

192

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.

193

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.

194

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____________

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 Engineering Management, the Cyber Defense Management and the Strategic Management Deputy Management. The Technological Risk Management and the Cybersecurity Assurance Deputy Management also constitute it, as control units. Numeral 5 of this Note describes the responsibilities of the indicated managers and deputy managers.

195

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 Control and Productivity 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.

196

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____________

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.

197

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____________

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, Retail Monitoring and Models, and the Deputy Managers of Big Data and Regulatory Systems, of Models Validation, 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 Control and Productivity 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.

198

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____________

47. Risk Management and Report, continued:

(1) Introduction, 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 Control and Productivity 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.

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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 management models (admission, campaigns, collection) both 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; in the case of commercial and mortgage portfolios, these results are contrasted with the standard models provided by the regulator, with the resulting provision being the largest between both methods. 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, which remain in force, accompanied by permanent monitoring of them as established in the guidelines approved by the Board of Directors.

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.

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____________

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, the Bank annually reviews and updates 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.

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____________

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.

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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, the training and education of executives is promoted, diffusing risk knowledge from a comprehensive perspective.

203

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.

− Risk 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.

− Model Validation Area, belonging to the Model Risk and Internal Control Management, is responsible for performs an independent review of the 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, methodological and parametric analysis, and documentation. The results of the review are presented and placed in consideration of the respective Committees, 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.

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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.

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____________

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 September 30, 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 September 30, 2022:

	Chile		United States		England		Brazil		Others		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Financial Assets
Cash and Due from Banks		1,519,373		1,152,961		24,476		—		160,508		2,857,318
Financial assets held for trading at fair value through profit or loss
Derivative contracts Financial
Forwards (*)		591,687		25,302		133,830		—		152,273		903,092
Swaps (**)		1,472,818		39,456		1,460,592		—		272,703		3,245,569
Call Options		9,341		—		—		—		—		9,341
Put Options		471		—		—		—		—		471
Futures		—		—		—		—		—		—
Subtotal		2,074,317		64,758		1,594,422		—		424,976		4,158,473
Debt Financial Instruments
From the Chilean Government and Central Bank		1,845,139		—		—		—		—		1,845,139
Other debt financial instruments issued in Chile		338,309		—		—		—		—		338,309
Financial debt instruments issued Abroad		—		—		—		—		—		—
Subtotal		2,183,448		—		—		—		—		2,183,448
Others Financial Instruments				—				—
Investments in mutual funds		5,274		—		—		—		—		5,274
Subtotal		5,274		—		—		—		—		5,274
Financial Assets at fair value through other comprehensive income
Debt Financial Instruments
From the Chilean Government and Central Bank		2,183,795		—		—		—		—		2,183,795
Other debt financial instruments issued in Chile		1,336,191		—		—		—		—		1,336,191
Financial debt instruments issued Abroad		—		142,457		—		—		—		142,457
Subtotal		3,519,986		142,457		—		—		—		3,662,443
Derivative contracts financial for hedging purposes
Forwards		—		—		—		—		—		—
Swaps		17,963		54,406		80,484		—		15,293		168,146
Call Options		—		—		—		—		—		—
Put Options		—		—		—		—		—		—
Futures		—		—		—		—		—		—
Subtotal		17,963		54,406		80,484		—		15,293		168,146
Financial assets at amortized cost
Rights by resale agreements and securities lending		44,488		—		—		—		—		44,488
Debt Financial Instruments
From the Chilean Government and Central Bank		885,951		—		—		—		—		885,951
Subtotal		885,951		—		—		—		—		885,951
Loans and advances to Banks
Central Bank of Chile		2,800,817		—		—		—		—		2,800,817
Domestic banks		—		—		—		—		—		—
Foreign banks		—		—		—		206,262		104,815		311,077
Subtotal		2,800,817		—		—		206,262		104,815		3,111,894
Loans to Customers, Net
Commercial loans		20,200,121		—		—		—		11,243		20,211,364
Residential mortgage loans		11,164,422		—		—		—		—		11,164,422
Consumer loans		4,709,681		—		—		—		—		4,709,681
Subtotal		36,074,224		—		—		—		11,243		36,085,467

(*) Others includes: France Ch$106,653 million and Spain Ch$32,869 million.

(**) Others includes: France Ch$90,240 million and Spain Ch$48,761 million.

206

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		395,103		—		—		2,462,215		—		—		—		—		—		—		—		—		—		—		2,857,318
Financial Assets held for trading at fair value through profit or loss
Derivative contracts Financial
Forwards		—		—		—		645,870		8,392		14,292		2,520		4,320		19,737		—		365		79		207,517		—		903,092
Swaps		—		—		—		3,125,082		9,254		25,963		—		7,372		28,909		8,472		19,227		17,918		3,372		—		3,245,569
Call Options		—		—		—		1,398		3,448		413		—		—		499		92		132		3,282		77		—		9,341
Put Options		—		—		—		315		105		17		—		—		1		—		6		—		27		—		471
Futures		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		3,772,665		21,199		40,685		2,520		11,692		49,146		8,564		19,730		21,279		210,993		—		4,158,473
Debt Financial Instruments
From the Chilean Government and Central Bank		1,774,534		70,605		—		—		—		—		—		—		—		—		—		—		—		—		1,845,139
Other debt financial instruments issued in Chile		—		—		—		338,309		—		—		—		—		—		—		—		—		—		—		338,309
Financial debt instruments issued Abroad		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		1,774,534		70,605		—		338,309		—		—		—		—		—		—		—		—		—		—		2,183,448
Others Financial Instruments										—		—		—		—		—		—		—		—		—		—
Investments in mutual funds		—		—		—		5,274		—		—		—		—		—		—		—		—		—		—		5,274
Subtotal		—		—		—		5,274		—		—		—		—		—		—		—		—		—		—		5,274
Financial Assets at fair value through Other Comprehensive Income
Debt Financial Instruments
From the Chilean Government and Central Bank		—		2,183,795		—		—		—		—		—		—		—		—		—		—		—		—		2,183,795
Other debt financial instruments issued in Chile		—		—		—		992,111		—		—		—		45,183		—		—		295,645		—		—		3,252		1,336,191
Financial debt instruments issued Abroad		—		—		—		142,457		—		—		—		—		—		—		—		—		—		—		142,457
Subtotal		—		2,183,795		—		1,134,568		—		—		—		45,183		—		—		295,645		—		—		3,252		3,662,443
Derivative contracts financial for hedging purposes
Forwards		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Swaps		—		—		—		168,146		—		—		—		—		—		—		—		—		—		—		168,146
Call Options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Put Options		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Futures		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		168,146		—		—		—		—		—		—		—		—		—		—		168,146
Financial assets at amortized cost (*)
Rights by resale agreements		—		—		—		37,466		451		—		—		—		—		—		—		3,493		—		3,078		44,488
Debt financial instruments
From the Chilean Government and Central Bank		—		885,951		—		—		—		—		—		—		—		—		—		—		—		—		885,951
Subtotal		—		885,951		—		—		—		—		—		—		—		—		—		—		—		—		885,951
Loans and advances to Banks
Central Bank of Chile		2,800,817		—		—		—		—		—		—		—		—		—		—		—		—		—		2,800,817
Domestic banks		—		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Foreign banks		—		—		—		311,077		—		—		—		—		—		—		—		—		—		—		311,077
Subtotal		2,800,817		—		—		311,077		—		—		—		—		—		—		—		—		—		—		3,111,894

(*) Economic activity of Loans and accounts receivable from customers disclosed in Note No. 13 g).

207

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		England		Brazil		Others		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Financial Assets
Cash and Due from Banks		2,748,930		897,881		10.782		8		56,133		3,713,734
Financial assets held for trading at fair value through profit or loss
Derivative contracts Financial
Forwards		585,463		90,461		59.444		—		7,177		742,545
Swaps		1,113,136		256,829		516.952		—		71,326		1,958,243
Call Options		4,509		—		—		—		—		4,509
Put Options		199		—		—		—		—		199
Futures		—		—		—		—		—		—
Subtotal		1,703,307		347,290		576.396		—		78,503		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		162.478		—		19,046		277,802
Call Options		—		—		—		—		—		—
Put Options		—		—		—		—		—		—
Futures		—		—		—		—		—		—
Subtotal		16,374		79,904		162.478		—		19,046		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

208

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).

209

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 243,974 collateral assets as of September 30, 2022 (242,870 in December 2021), the majority of which consist of real estate. The following table contains guarantees value:

			Guarantee
September 2022	Loans		Mortgages		Pledges		Securities		Warrants		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Corporate Lending		15,366,152		3,589,093		156,548		559,105		5,203		4,309,949
Small Business Lending		4,845,212		3,229,528		18,834		10,087		—		3,258,449
Consumer Lending		4,709,681		310,408		670		2,739		—		313,817
Mortgage Lending		11,164,422		9,651,175		119		281		—		9,651,575
Total		36,085,467		16,780,204		176,171		572,212		5,203		17,533,790

			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

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.

210

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 value of the guarantees that the Bank maintains related to the loans individually classified as impaired as of September 30, 2022 and December 31, 2021 amounted Ch$87,590 million and Ch$28,189 million, respectively.

The value guarantees related to past due loans but no impaired as of September 30, 2022 and December 31, 2021 amounted Ch$265,982 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 credit quality by asset class for Consolidated Statements of Financial Position sheet items, based on the Bank’s credit rating system, is presented in Note No. 13 letter (d).

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		90 or more days
	MCh$		MCh$		MCh$		MCh$
September 2022		624,738		144,859		55,582		—
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$12,556 million and Ch$12,583 million as of September 30, 2022 and December 31, 2021, respectively, the majority of which are properties. All of these assets are managed for sale.

211

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:

	September		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		379,016		331,127
Residential mortgage loans		247,690		243,684
Consumer loans		268,318		361,015
Subtotal		895,024		935,826
Total renegotiated financial assets		895,024		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:

	September 2022			December 2021
	MCh$			MCh$
Total related debt		1,009,125			798,419
Consolidated Total or Regulatory Capital		6,322,750			5,634,345
Limit used %		15.96	%		14.17	%

212

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.

213

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 September 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		1,197		2,962		893		1,765
Minimum		-1,726		1,467		-896		27
Average		-179		2,120		90		997

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		1,552
Average		2,374

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	%		93	%		65	%
Average		192	%		99	%		66	%

214

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.

To date, the CMF establish the following dispositions for the C46 index:

Foreign Currency balance sheet items: 1-30 days, Regulatory Limit C46 index < 1 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	)		0.24
Minimum		(0.26	)		(0.35	)		0.07
Average		(0.03	)		(0.17	)		0.17
Regulatory Limit		N/A			N/A			1.0

215

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 liquidity gap are presented below:

QUARTERLY STATEMENT OF INDIVIDUAL LIQUIDITY SITUATION

AS OF SEPTEMBER 30, 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		9,522,188		11,168,247		12,166,928		15,380,602
Cash flow payable (liabilities) and expenses		19,063,898		20,883,969		24,587,949		27,766,943
Liquidity Gap		9,541,711		9,715,722		12,421,021		12,386,340

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		2,048,593		2,216,907		2,180,928		2,535,104
Cash flow payable (liabilities) and expenses		3,654,333		3,874,924		4,465,627		4,940,002
Liquidity Gap		1,605,740		1,658,017		2,284,699		2,404,899
Limits:
One time capital						4,565,677
AVAILABLE MARGIN						2,280,978		—

* In the limit up to 30 days, in consolidated currency, the Bank has a liquidity situation of Ch$2,280,977,674,708.

QUARTERLY STATEMENT OF INDIVIDUAL LIQUIDITY SITUATION

AS OF SEPTEMBER 30, 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		9,220,353			10,681,664			11,291,246			13,416,418
Cash flow payable (liabilities) and expenses		9,016,971			9,669,936			11,190,300			12,823,943
Liquidity Gap		(203,382	)		(1,011,728	)		(100,946	)		(592,474	)

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		1,952,874		2,023,230		1,862,452		1,886,488
Cash flow payable (liabilities) and expenses		2,362,610		2,498,069		2,961,359		3,345,550
Liquidity Gap		409,736		474,839		1,098,908		1,459,062
Limits:
One time capital						4,565,677
AVAILABLE MARGIN						3,466,769		—

* In the limit up to 30 days, in consolidated currency, the Bank has a liquidity situation of Ch$3,466,769,322,059.

216

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 SEPTEMBER 30, 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		10,100,115		11,756,199		12,765,150		15,982,312
Cash flow payable (liabilities) and expenses		19,502,571		21,324,526		25,029,272		28,208,324
Liquidity Gap		9,402,456		9,568,327		12,264,122		12,226,012

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		2,048,651		2,216,997		2,181,088		2,535,285
Cash flow payable (liabilities) and expenses		3,654,333		3,874,924		4,465,627		4,940,061
Liquidity Gap		1,605,681		1,657,926		2,284,539		2,404,776
Limits:
One time capital						4,565,677
AVAILABLE MARGIN						2,281,138		—

* In the limit up to 30 days, in consolidated currency, the Bank has a liquidity situation of Ch$2,281,137,629,677.

QUARTERLY STATEMENT OF CONSOLIDATED LIQUIDITY SITUATION

AS OF SEPTEMBER 30, 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		9,798,280			11,269,616			11,889,468			14,018,128
Cash flow payable (liabilities) and expenses		9,455,643			10,110,493			11,631,623			13,265,325
Liquidity Gap		(342,637	)		(1,159,124	)		(257,845	)		(752,803	)

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		1,952,933		2,023,320		1,862,612		1,886,669
Cash flow payable (liabilities) and expenses		2,362,610		2,498,069		2,961,359		3,345,609
Liquidity Gap		409,678		474,748		1,098,748		1,458,939
Limits:
One time capital						4,565,677
AVAILABLE MARGIN						3,466,929		—

* In the limit up to 30 days, in consolidated currency, the Bank has a liquidity situation of Ch$3,466,929,277,032.

217

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 September 30, 2022, values in MMM$

 

Source: Financial Statements Banco de Chile as of September 30, 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. For the first, its phase-in was accelerated, increasing the minimum level required to 100%, while for the second, the requirement of the limit began at 60%. The evolution of the LCR and NSFR metrics during the year 2022 are shown below:

	LCR			NSFR
Maximum		4.10			1.35
Minimum		2.74			1.29
Average		3.45			1.32
Regulatory Limit		1.0	(*)		0.6	(**)

(*) Valid value from June 1, 2022.

(**) Effective value from June 1, 2022, which will gradually increase until reaching 1.0 in January 2026.

218

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 September 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 September 30, 2022
Transactions in the course of payment		402,356		—		—		—		—		—		402,356
Full delivery derivative transactions		449,692		709,240		1,896,297		2,352,005		1,093,315		2,033,118		8,533,667
Financial liabilities at amortized cost
Current accounts and other demand deposits		14,298,698		—		—		—		—		—		14,298,698
Saving accounts and time deposits		8,810,934		2,705,244		1,504,269		64,553		6,639		599		13,092,238
Obligations by repurchase agreements and securities lending		204,276		59		—		—		—		—		204,335
Borrowings from financial institutions		116,999		28,182		634,027		4,561,725		—		—		5,340,933
Debt financial instruments issued (all currencies)		160,168		378,545		866,952		2,260,950		2,585,574		3,566,960		9,819,149
Other financial obligations		234,297		40		137		65		—		—		234,539
Financial instruments of regulatory capital issued (subordinated bonds)		6,631		17,140		29,371		92,380		86,070		1,125,421		1,357,013
Total (excluding non-delivery derivative transactions)		24,684,051		3,838,450		4,931,053		9,331,678		3,771,598		6,726,098		53,282,928
Non-delivery derivative transactions		878,946		1,061,683		1,911,497		1,112,315		1,105,813		2,319,517		8,389,771

	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

219

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 portfolio recorded under the Fair Value Through Other Comprehensive Income (hereinafter FVOCI) 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		1,700
Minimum		487
Average		1,101

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 their average maturity term.

220

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		237,932
Minimum		179,379
Average		211,476

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. 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 Management Policy of Banco de Chile enforces to perform daily stress tests for the Trading Book and monthly for the Accrual Book. Additionally, the stress test for the FVOCI portfolio is included, which is reported daily. The output of the stress testing process is monitored against corresponding alert 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.

221

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 September 30,  2022
Cash and due from banks		2,818,647		—		—		—		—		—		2,818,647
Transactions in the course of collection		480,033		—		—		—		—		—		480,033
Financial assets at fair value through other comprehensive income
Debt financial instruments		69,743		95,290		2,519,550		526,565		195,765		265,688		3,672,601
Derivative financial instruments for hedging purposes		6,992		10,446		120,187		474,148		564,955		1,275,622		2,452,350
Financial assets at amortized cost
Rights by resale agreements and securities lending		—		—		—		—		—		—		—
Debt financial instruments		1,203		—		18,638		55,630		449,602		450,995		976,068
Loans and advances to Banks		2,808,428		—		308,504		—		—		—		3,116,932
Loans to customers, net		4,371,998		3,409,083		7,515,010		9,153,771		4,859,847		12,789,114		42,098,823
Total Assets		10,557,044		3,514,819		10,481,889		10,210,114		6,070,169		14,781,419		55,615,454

	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

222

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 September 30,  2022
Transactions in the course of payment		387,887		—		—		—		—		—		387,887
Derivative Financial Instruments for hedging purposes		5,040		5,798		85,408		384,382		481,828		1,420,824		2,383,280
Financial liabilities at amortized cost
Current accounts and other demand deposits		14,337,471												14,337,471
Saving accounts and time deposits		8,810,934		2,705,244		1,504,269		64,553		6,639		599		13,092,238
Obligations by repurchase agreements and securities lending		717		—		—		—		—		—		717
Borrowings from financial institutions		116,999		28,182		634,027		4,561,725		—		—		5,340,933
Debt financial instruments issued (*)		160,168		378,545		866,952		2,260,950		2,585,574		3,566,960		9,819,149
Financial instruments of regulatory capital issued (subordinated bonds)		6,631		17,140		29,371		92,380		86,070		1,125,421		1,357,013
Other liabilities		234,297		40		137		65						234,539
Total liabilities		24,060,144		3,134,949		3,120,164		7,364,055		3,160,111		6,113,804		46,953,227

	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.

223

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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.

224

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

47. Risk Management and Report, continued:

(3) Market Risk, continued:

(c) 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.

For the Trading Book, 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 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		(109	)		141		86			148		6		(4	)
Greater than 1 year		(46	)		86		(24	)		102		20		2

bps = basis points

225

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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 September 30, 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			(3,256	)
Derivatives	(1,839	)
Debt instruments	(1,417	)
CLF Interest Rate			(1,318	)
Derivatives	(138	)
Debt instruments	(1,180	)
Interest rate USD offshore			47
Domestic/offshore interest rate spread USD			(272	)
Banking spread			(5	)
Total Interest rates			(4,804	)
Total FX and FX Options			(47	)
Total			(4,851	)

The modeled scenario would generate losses in the Trading Book for approximately Ch$4,851 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 September 30, 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	(493,469	)
Impact due to Spreads Shocks	(7,197	)
Higher / (Lower) Net revenues	(500,666	)

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.

226

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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		132		95		(1	)		87
Greater than 1 year		149		182		45			34

bps = basis points

The worst impact on the Bank’s FVOCI portfolio as of September 30, 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	(39,292	)
CLF Debt Instrument	(50,193	)
Interest rate USD offshore	(5,660	)
Domestic/offshore interest rate spread USD	-
Banking spread	(4,320	)
Corporative spread	(12,358	)
Total	(111,823	)

The modeled for the FVTOCI Portfolio would generate potential impacts on equity accounts for approximately Ch$111,823.

The main negative impact on the Trading Book would occur as a result of an increase in interest rates in CLF over 1 year, while in the case of the FVTOCI portfolio the main impact comes from upward fluctuations in interest rates on debt instruments in both CLP and CLF. 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.

227

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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 the Bank has been 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.

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 the year 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.

● 5th phase, currently in process:

- Renegotiation of contracts with impacted clients

228

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

47. Risk Management and Report, 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.

● Phase currently in process:

- Renegotiation of contracts with impacted clients

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
	September		December		September			December			September			December			September			December			September		December
	2022		2021		2022			2021			2022			2021			2022			2021			2022		2021
	MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$		MCh$
Derivative financial assets		4,326,619		2,983,298		(2,096,839	)		(1,259,233	)		(1,249,118	)		(782,776	)		(289,702	)		(327,840	)		690,960		613,449
Derivative financial liabilities		4,350,064		2,773,199		(2,096,839	)		(1,259,233	)		(1,249,118	)		(782,776	)		(336,569	)		(275,191	)		667,538		455,999

229

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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. For this, the Operational Risk Management has a process map that allows organizing and planning the evaluation, according to different perspectives of criticality

− 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 promoting mitigating measures that ensure an adequate control environment and thus prevent these events from happening again.

− 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.

230

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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 Capital Management: Its objective is to ensure compliance with regulatory requirements related to the capital requirement for operational risk and to establish methodologies to evaluate stress scenarios, which provide information for decision-making on capital matters, in coherence with the bank’s strategic plans.

− 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.

− 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.

231

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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 September 30, 2022 and 2021:

	September 2022							September 2021
	Lost					Lost		Lost					Lost
Category	Gross		Recoveries			Net		Gross		Recoveries			Net
	MCh$		MCh$			MCh$		MCh$		MCh$			MCh$
Internal fraud		58		(5	)		53		—		—			—
External fraud		10,352		(4,182	)		6,170		7,727		(2,922	)		4,805
Work practices and safety in the business position		845		(3	)		842		377		—			377
Customers, products and business practices		664		—			664		60		(1	)		59
Damage to physical assets		253		(3	)		250		469		(328	)		141
Business interruption and system failures		115		—			115		126		(15	)		111
Execution, delivery and process management		2,348		(315	)		2,033		2,710		(46	)		2,664
Total		14,635		(4,508	)		10,127		11,469		(3,312	)		8,157

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:

− Documentary 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.

232

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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.

233

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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.

234

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 the adequate management of the risks it faces in its operations, establishing sufficient capital levels, through the definition of an internal objective, which supports both the business strategy in normal scenarios, as well as stress scenarios in the short and medium terms, thus ensuring compliance with regulatory requirements, coverage of its material risks, a solid credit classification and the generation of adequate capital clearances. During 2022, the Bank has comfortably met the required capital requirements and its internal sufficiency objectives.

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 2022, 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 and Additional Tier 1 Capital, the latter in the form of 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 additional tier 1 and tier 2 capital hybrid 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.

235

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

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, requirements for systemic banks and repeal of the requirements of article 35 of the LGB, 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, among other matters.

Below are indicators applicable as of December 1, 2021:

	Total assets, risk-weighted assets and components of the effective equity according to Basel III	Local and Overall consolidated September -2022		Local and Overall consolidated Dec-2021
Item No.	Item description	MCh$		MCh$
1	Total assets according to the statement of financial position		54,813,455		51,702,439
2	Non-consolidated investment in subsidiaries		—		—
3	Assets discounted from regulatory capital, other than item 2		150,628		61,953
4	Derivative credit equivalents		1,909,497		1,782,784
4.1	Financial derivative contracts		4,326,619		2,983,298
5	Contingent loans		2,913,080		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		55,158,785		53,052,142
8.a	Credit risk weighted assets, estimated according to the standard methodology (CRWA)		30,250,301		28,278,181
8.b	Credit risk weighted assets, estimated according to internal methodologies (CRWA)		—		—
9	Market risk weighted assets (MRWA)		1,430,322		1,342,767
10	Operational risk weighted assets (ORWA)		3,449,848		2,946,980
11.a	= (8.a/8.b+9+10) Risk-weighted assets (RWA)		35,130,471		32,567,928
11.b	= (8.a/8.b+9+10) Risk-weighted assets, after application of the output floor (RWA)		35,130,471		32,567,928
12	Owner’s equity		4,685,671		4,223,013
13	Non-controlling interest		2		1
14	Goodwill		—		—
15	Excess minority investments		—		—
16	= (12+13-14-15) Core Tier 1 Capital (CET1)		4,685,673		4,223,014
17	Additional deductions to core tier 1 capital, other than item 2		—		—
18	= (16-17-2) Core Tier 1 Capital (CET1)		4,685,673		4,223,014
19	Voluntary provisions (additional) imputed as additional Tier 1 capital (AT1)		351,305		325,679
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)		351,305		325,679
25	= (18+24) Tier 1 Capital		5,036,978		4,548,693
26	Voluntary provisions (additional) imputed as Tier 2 capital (T2)		333,947		214,573
27	Subordinated bonds imputed as Tier 2 capital (T2)		951,825		871,079
28	= (26+27) Equivalent tier 2 capital (T2)		1,285,772		1,085,652
29	Discounts applied to T2		—		—
30	= (28-29) Tier 2 capital (T2)		1,285,772		1,085,652
31	= (25+30) Effective equity		6,322,750		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)		—		—

236

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

48. Information on Regulatory Capital and Capital Adequacy Ratios, continued:

Capital Adequacy Ratios and Regulatory Compliance according to Basel III	Local and Overall consolidated September -2022 %
Leverage Ratio		8.49	%
Leverage Ratio that the bank must meet, considering the minimum requirements		3	%
CET 1 Capital Ratio		13.34	%
CET 1 Capital Ratio that the bank must meet, considering the minimum requirements		4.50	%
Capital buffer shortfall		0	%
Tier 1 Capital Ratio		14.34	%
Tier 1 Capital Ratio that the bank must meet, considering the minimum requirements		6.00	%
Total or Regulatory Capital Ratio		18.00	%
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		1.10	%
Subordinated bonds computed as Tier 2 capital (T2) in relation to CET 1 Capital		20.31	%
Additional Tier 1 Capital (AT1) in relation to CET 1 Capital		7.50	%
Voluntary (additional) provisions and subordinated bonds computed as AT1 in relation to RWAs		1.00	%

Below, for comparative purposes, are the amounts and ratios determined using the dispositions in effect up to November 30, 2021:

	Consolidated assets		Risk-weighted assets
	Dec-2021		Dec-2021
	MCh$		MCh$
Balance sheet assets (net of provisions)
Cash and due from banks		3,713,734		17,922
Transactions in the course of collection		576,457		199,528
Financial Assets held-for-trading		3,876,695		209,420
Investments under resale agreements		64,365		64,365
Derivative instruments (*)		1,773,383		1,481,241
Loans and advances to Banks		1,529,313		311,345
Loans to customers, net		33,537,758		27,606,449
Financial instrument available-for-sale		3,054,809		384,045
Instruments assets held-to-maturity		782,529		78,253
Investments in other companies		49,168		49,168
Intangible assets		72,532		72,532
Property and equipment		222,320		222,319
Right-of-use assets		100,188		100,188
Current tax assets		846		85
Deferred tax assets		439,194		43,919
Other assets		699,233		587,791
Subtotal		50,492,524		31,428,570
Off-balance-sheet assets
Contingent loans		4,768,847		2,860,163
Total		55,261,371		34,288,733

(*) According to Chapter 12-1 of the Compilation of Standards, financial derivative contracts are presented as an equivalent credit risk for the purposes of calculating consolidated assets.

237

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

____________

48. Information on Regulatory Capital and Capital Adequacy Ratios, continued:

	December
	2021(*)
	MCh$
Basic capital		4,223,013
Effective equity		5,522,703
Consolidated assets Total		55,261,371
Consolidated credit risk weighted assets Total		34,288,733

	Ratio
	December
	2021(*)
	%
Basic capital / consolidated assets		7.64
Effective equity/ Consolidated risk weighted assets		16.11

(*) Information for comparative purposes based on dispositions contained in Chapter 12-1 of the RAN.

49. Subsequent Events:

The Interim Consolidated Financial Statements of Banco de Chile for the period ended September 30, 2022 were approved by the Directors on October 27, 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 September 30, 2022 and the date of issuance of these Interim Consolidated Financial Statements.

_________________

Héctor Hernández G. General Accounting Manager	Eduardo Ebensperger O. Chief Executive Officer

238