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Changes in Accounting Policies, Estimates and Disclosures

12 Months Ended

Dec. 31, 2022

Changes in Accounting Policies, Estimates and Disclosures [Abstract]

Changes in Accounting Policies, Estimates and Disclosures

4.	Changes in Accounting policies, Estimates and Disclosures:

Changes in Estimates - Refinements to ECL models used for calculation

COVID-19 pandemic and the various Goverment support measures resulted in an economic environment which differed significantly from the historical economic conditions upon which the impairment models were built. As a result, there was a greater need for management judgements to be applied alongside the use of models as of December 31, 2021.

During 2022 the direct impact of the pandemic on economic performance has reduced, resulting in the release of all material judgements required specifically to capture COVID-19 risks.

The assessment of SICRs and the measurement of ECLs required to be based on reasonable and supportable information that is available to an entity without undue cost or effort. The Bank has developed estimates based on the best available information about past events, current conditions and forecasts of economic conditions. In assessing forecast conditions, the Bank has considered the effects of COVID-19 and the government support measures that were taken. Indeed, in September 2022, the Bank completed a calibration of parameters, such as: a) PD models, considering more recent information concerning COVID-19 pandemic and including new macroeconomics, b) SICRs were adjusted, carrying out a more retrospective comparison of credit rating and c) improvements were made regarding the recognition of collateral, obtaining a more precise estimate of the expected credit loss. The impact of calibrations or refinements in the ECL models and assumptions resulted in an inmaterial amount.

Changes in Accounting plan

During 2022, changes were incorporated into the accounting plan, both in the coding of accounts and in their description. Said changes seek to improve the quality of financial information in order to facilitate the reading, understanding and comparison of the financial statements, along with providing the banking system with more detailed financial information. These changes also ensure that the financial statements comply with the standards of IAS 1 and other applicable accounting standards.

The impacts to these Consolidated Financial Statements according to the changes mentioned above are detailed below:

Consolidated Balance Sheet as of December 31, 2021

	as of December 31, 2021
	Reported Balance		Reclassifications					New Balance
	MCh$		MCh$			Ref.		MCh$
ASSETS
Cash and due from banks		3,713,734		—					3,713,734
Transactions in the course of collection		326,446		—					326,446
Derivative instruments		2,983,298		(2,983,298	)		a		—
Financial assets held-for-trading		3,876,695		(3,876,695	)		b		—
Financial assets held-for-trading at fair value through profit and loss:
Derivative financial instruments		—		2,705,496			a		2,705,496
Debt financial instruments		—		3,737,942			b		3,737,942
Others		—		138,753			b		138,753
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		—					3,054,809
Equity instruments		6,365		—					6,365
Derivative financial instruments for hedging purposes		—		277,802			a		277,802
Financial assets at amortized cost:
Rights by resale agreements and securities lending		64,365		—					64,365
Debt financial instruments		839,744		—					839,744
Loans and advances to Banks		1,529,751		—					1,529,751
Loans to customers - Commercial loans		19,353,491		—					19,353,491
Loans to customers - Residential mortgage loans		10,307,542		—					10,307,542
Loans to customers - Consumer loans		3,931,344		—					3,931,344
Investments in other companies		46,923		—					46,923
Intangible assets		105,942		—					105,942
Property and equipment		222,320		—					222,320
Right-of-use assets		100,188		—					100,188
Current tax assets		—		—					—
Deferred tax assets		276,400		—					276,400
Other assets		674,115		(7,004	)		c;d		667,111
Non-current assets and disposal groups held for sale		—		19,480			c		19,480
Investments properties		12,476		(12,476	)		d		—
TOTAL ASSETS		51,425,948		—					51,425,948

	as of December 31, 2021
	Reported Balance			Reclassifications					New Balance
	MCh$			MCh$			Ref.		MCh$
LIABILITIES
Transactions in the course of payments		210,479			—					210,479
Obligations under repurchase agreements		95,009			(95,009	)		e		—
Derivative instruments		2,773,476			(2,773,476	)		a		—
Financial liabilities held for trading at fair value through profit or loss:
Derivative financial instruments		—			2,772,780			a		2,772,780
Others		—			—					—
Financial liabilities designated as at fair value through profit or loss		—			—					—
Derivative Financial Instruments for hedging purposes		—			696			a		696
Financial liabilities at amortized cost:
Current accounts and other demand deposits		18,542,791			—					18,542,791
Saving accounts and time deposits		9,140,006			—					9,140,006
Obligations by repurchase agreements and securities lending		—			95,009			e		95,009
Borrowings from financial institutions		4,861,865			—					4,861,865
Debt financial instruments issued		9,478,905			(917,510	)		f		8,561,395
Other financial obligations		274,618			(24,613	)		g		250,005
Lease liabilities		95,670			—					95,670
Debt financial instruments issued for regulatory capital purposes		—			917,510			f		917,510
Provisions
Provision for dividends		237,877			—					237,877
Provisions for contingent loan credit risk		93,049			—					93,049
Other provisions		958			35,937			h		36,895
Currents tax liabilities		112,283			—					112,283
Deferred tax liabilities		—			—					—
Employee benefits		106,963			—					106,963
Other liabilities		583,027			(11,324	)		g;h		571,703
Liabilities included in disposal groups held for sale		—			—					—
TOTAL LIABILITIES		46,606,976			—					46,606,976
EQUITY
Attributable to equity holders of the parent:
Capital		2,418,833			—					2,418,833
Reserves		904,059			—					904,059
Accumulated other comprehensive income		41,617			—					41,617
Retained earnings:
Retained earnings from previous periods		636,023			—					636,023
Income for the year		1,056,316			—					1,056,316
Less: Provision for dividends		(237,877	)		—					(237,877	)
Non-controlling interest		1			—					1
TOTAL EQUITY		4,818,972			—					4,818,972
TOTAL LIABILITIES AND EQUITY		51,425,948			—					51,425,948

Reclassifications:

The assets and liabilities “Derivative instruments” are separated into “Derivative financial instruments held for trading at fair value through profit or loss” and “Derivative Financial Instruments for hedging purposes”.

Debt financial instruments and mutual funds were reclassified from “Financial assets held-for-trading” to “Financial assets held-for-trading at fair value through profit or loss”.

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”.

Investment properties were reclassified from “Investment properties” to “Other assets”.

Short sales of shares were reclassified from “Obligations under repurchase agreements” to “Obligations by repurchase agreements and securities lending at amortized cost”.

Subordinated bonds were reclassified from “Debt financial instruments issued” to “Debt financial instruments issued for regulatory capital purposes”.

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

Loyalty provision were reclassified from “Other Liabilities” to “Other provisions”.

Consolidated Income Statement as of December 31, 2021

	as of December 31, 2021
	Reported Balance			Reclassifications				New Balance
	MCh$			MCh$			Ref.	MCh$
STATEMENT OF INCOME
Interest revenue		2,388,470			—				2,388,470
Interest expense		(814,448	)		—				(814,448	)
Net interest income		1,574,022			—				1,574,022

Income from commissions		584,321			—				584,321
Expense from commissions		(129,293	)		—				(129,293	)
Net income from commissions		455,028			—				455,028

Net Financial income (expense)		186,941			(15,962	)	a		170,979
Foreign exchange transactions, net		(15,962	)		15,962		a		—
Income attributable to investments in other companies		—			1,793		b		1,793
Result from non-current assets and disposal groups held for sale not admissible as discontinued operations		—			1,986		c		1,986
Other operating income		34,056			(12,993	)	c;d		21,063
TOTAL OPERATING INCOME, BEFORE EXPECTED CREDIT LOSSES		2,234,085			(9,214	)			2,224,871

Expected credit losses		(19,172	)		—				(19,172	)

TOTAL OPERATING INCOME, NET OF EXPECTED CREDIT LOSSES		2,214,913			(9,214	)			2,205,699

Expenses from salaries and employee benefits		(450,952	)		—				(450,952	)
Administrative expenses		(324,625	)		—				(324,625	)
Depreciation and amortization		(76,798	)		—				(76,798	)
Impairment of non-financial assets		(1,690	)		—				(1,690	)
Other operating expenses		(30,355	)		11,007		c;d		(19,348	)
TOTAL OPERATING EXPENSES		(884,420	)		11,007				(873,413	)

Income attributable to associates		1,793			(1,793	)	b		—

NET OPERATING INCOME		1,332,286			—				1,332,286

Income taxes		(275,969	)		—				(275,969	)

NET INCOME FOR THE YEAR		1,056,317			—				1,056,317

Reclassifications:

Income and expense from foreign exchange were included as part of “Net Financial income (expense)”.

Income from investments in associates and other companies were reclassified from “Income attributable to associates” to “Other operating income”.

Expenses for assets received in lieu of payment and income from sale of noncurrent assets were reclassified from “Other operating expenses” and “Other Operating income” to “Result from non-current assets and disposal groups held for sale not admissible as discontinued operations”.

Income for recovery of expenses for credit operations of financial leasing and other operational risk events were reclassified from “Other operating income” to “Other Operating expenses”.

During the year ended December 31, 2022, there have been no other significant accounting changes that affect the presentation of these Consolidated Financial Statements.