Business Segment

12 Months Ended

Dec. 31, 2022

Business Segment Disclosure [Abstract]

Business Segment

6. Business Segment:

For management purposes, the Bank has organized its operations and commercial strategies into four business segments, which are defined in accordance with the type of products and services offered to target customers. These business segments are currently defined as follows:

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 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.

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 relies mainly 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.

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

● Operational expenses are recognized at the level of the different functional areas of the Bank. Then, for the business segment purposes, the allocation of expenses from functional areas is done using different allocation criteria, at the level of the different concepts and expense items.

The Bank did not enter into transactions with any particular customer or third party that collectively generated more than 10% of the Bank’s total income in 2022 and 2021.

Taxes are managed at the consolidated level and are not allocated to business segments.

	As of December 31, 2022
	Retail			Wholesale			Treasury			Subsidiaries			Subtotal			Reclassifications and adjustments to conform IFRS					Total
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			Note		MCh$
Net interest income and UF indexation		1,446,495			862,976			(60,467	)		(13,592	)		2,235,412			30,717					2,266,129
Net commissions income		301,638			73,208			(2,280	)		174,246			546,812			(24,680	)				522,132
Net financial income		8,248			57,389			172,949			64,933			303,519			3,305					306,824
Other income		22,973			11,349			—			3,530			37,852			(3,345	)				34,507
Income attributable to investments in other companies		9,089			3,496			345			650			13,580			(549	)				13,031
Operating income, before expected credit losses		1,788,443			1,008,418			110,547			229,767			3,137,175			5,448			(1)		3,142,623
Expenses for expected credit losses		(323,364	)		(103,745	)		(8,009	)		—			(435,118	)		22,988			(2)		(412,130	)
Total operating income, after expected credit losses		1,465,079			904,673			102,538			229,767			2,702,057			28,436					2,730,493
Expenses from salaries and employee benefits		(339,849	)		(102,395	)		(2,645	)		(83,356	)		(528,245	)		19					(528,226	)
Administrative expenses		(272,748	)		(66,547	)		(1,771	)		(34,474	)		(375,540	)		20,266					(355,274	)
Depreciation and amortization		(69,100	)		(8,540	)		(424	)		(6,141	)		(84,205	)		—					(84,205	)
Impairment of non-financial assets		(9	)		(122	)		—			54			(77	)		—					(77	)
Other operating expenses		(17,114	)		(10,183	)		—			(1,501	)		(28,798	)		1,097					(27,701	)
Total operating expenses		(698,820	)		(187,787	)		(4,840	)		(125,418	)		(1,016,865	)		21,382			(3)		(995,483	)
Income from operations		766,259			716,886			97,698			104,349			1,685,192			49,818					1,735,010
Income taxes														(275,757	)		(13,452	)		(4)		(289,209	)
Income after income taxes														1,409,435			36,366					1,445,801
Assets		22,025,372			13,576,675			18,602,123			561,621			54,765,791			(212,524	)				54,553,267
Current and deferred taxes														726,910			(171,323	)				555,587
Total assets														55,492,701			(383,847	)		(5)		55,108,854
Liabilities		17,572,012			10,151,503			22,182,398			727,529			50,633,442			(956,957	)				49,676,485
Current and deferred taxes														932			—					932
Total liabilities														50,634,374			(956,957	)		(6)		49,677,417

Reclassifications and adjustments to conform IFRS

(1) The total effect due to the elimination adjustments to conform the total operating revenue is MCh$(21,382). In addition, the total effect of IFRS adjustments is MCh$26,830, which mainly stems from the recognition of interest income on accrual basis.

(2) The total effect relates to IFRS adjustments of MCh$22,988, which mainly stems from differences in the calculation model of allowances for ECL.

(3) The total effect due to the elimination adjustments to conform total operating expenses is MCh$21,382.

(4) The total effect relates to IFRS adjustments of MCh$(13,452), which stems from deferred taxes.

(5) The total effect due to the elimination adjustments to conform the consolidated financial position data in assets is MCh$(237,339). In addition, the total effect of IFRS adjustments in assets is MCh$(146,508), which mainly stems from differences in the calculation model for ECL, the acquisition of Citibank Chile and deferred taxes effects.

(6) The total effect due to the elimination adjustments to conform the consolidated financial position data in liabilities is MCh$(237,339). In addition, the total effect of IFRS adjustments in liabilities is MCh$(719,618), which mainly stems from provision for minimum dividends and differences in the calculation model of allowances for ECL.

	As of December 31, 2021
	Retail			Wholesale			Treasury			Subsidiaries			Subtotal			Reclassifications and adjustments to conform IFRS					Total
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			Note		MCh$
Net interest income and UF indexation		1,083,179			472,520			(1,416	)		(847	)		1,553,436			20,586					1,574,022
Net commissions income		260,416			67,343			(2,288	)		159,628			485,099			(30,071	)				455,028
Net financial income		15,211			49,864			51,918			34,070			151,063			19,916					170,979
Other income		16,653			9,456			—			3,075			29,184			(6,135	)				23,049
Income attributable to investments in other companies		(452	)		2,075			118			499			2,240			(447	)				1,793
Operating income, before expected credit losses		1,375,007			601,258			48,332			196,425			2,221,022			3,849			(1)		2,224,871
Expenses for expected credit losses		(257,547	)		(98,516	)		(1,002	)		—			(357,065	)		337,893			(2)		(19,172	)
Total operating income, after expected credit losses		1,117,460			502,742			47,330			196,425			1,863,957			341,742					2,205,699
Expenses from salaries and employee benefits		(289,103	)		(82,706	)		(2,156	)		(77,004	)		(450,969	)		17					(450,952	)
Administrative expenses		(252,858	)		(58,940	)		(1,360	)		(30,559	)		(343,717	)		19,092					(324,625	)
Depreciation and amortization		(62,728	)		(8,107	)		(365	)		(5,598	)		(76,798	)		—					(76,798	)
Impairment of non-financial assets		(30	)		(1,169	)		—			(223	)		(1,422	)		(268	)				(1,690	)
Other operating expenses		(13,776	)		(5,073	)		(21	)		(1,709	)		(20,579	)		1,231					(19,348	)
Total operating expenses		(618,495	)		(155,995	)		(3,902	)		(115,093	)		(893,485	)		20,072			(3)		(873,413	)
Income from operations		498,965			346,747			43,428			81,332			970,472			361,814					1,332,286
Income taxes														(178,280	)		(97,689	)		(4)		(275,969	)
Income after income taxes														792,192			264,125					1,056,317
Assets		20,515,244			12,806,409			17,412,551			958,447			51,692,651			(543,103	)				51,149,548
Current and deferred taxes														435,123			(158,723	)				276,400
Total assets														52,127,774			(701,826	)		(5)		51,425,948
Liabilities		16,779,925			10,530,749			19,640,221			770,228			47,721,123			(1,226,430	)				46,494,693
Current and deferred taxes														113,129			(846	)				112,283
Total liabilities														47,834,252			(1,227,276	)		(6)		46,606,976

Reclassifications and adjustments to conform IFRS

(1) The total effect due to the elimination adjustments to conform the total operating revenue is MCh$(21,998). In addition, the total effect of IFRS adjustments and reclassifications is MCh$25,847, which difference mainly stems from the recognition of interest income on accrual basis and reclassification of FX indexation.

(2) The total effect relates to IFRS adjustments and reclassifications of MCh$337,893, which mainly stems from differences in the calculation model of allowances for ECL.

(3) The total effect due to the elimination adjustments to conform total operating expenses is MCh$21,998. In addition, the total effect of other reclassifications is MCh$(1,926).

(4) The total effect relates to IFRS adjustments of MCh$(97,689), which stems from deferred taxes.

(5) The total effect due to the elimination adjustments to conform the consolidated financial position data in assets is MCh$(369,448). In addition, the total effect of IFRS adjustments in assets is MCh$(332,378), which mainly stems from differences in the calculation model of ECL, the acquisition of Citibank Chile, deferred taxes effects and settlement of transactions in the course of collection.

(6) The total effect due to the elimination adjustments to conform the consolidated financial position data in liabilities is MCh$(369,448). In addition, the total effect of IFRS adjustments in liabilities is MCh$(857,828), which mainly stems from provision for minimum dividends and differences in the calculation model of allowances for ECL.

	As of December 31, 2020
	Retail			Wholesale			Treasury			Subsidiaries			Subtotal			Reclassifications and adjustments to conform IFRS					Total
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			Note		MCh$
Net interest income and UF indexation		940,075			377,314			(3,603	)		(1,923	)		1,311,863			4,925					1,316,788
Net commissions income		265,338			55,599			(1,969	)		143,863			462,831			(16,863	)				445,968
Net financial income		2,651			34,979			75,144			33,440			146,214			(831	)				145,383
Other income		17,673			8,677			—			2,101			28,451			(9,180	)				19,271
Income attributable to investments in other companies		(6,674	)		1,548			(7	)		472			(4,661	)		(438	)				(5,099	)
Operating income, before expected credit losses		1,219,063			478,117			69,565			177,953			1,944,698			(22,387	)		(1)		1,922,311
Expenses for expected credit losses		(325,852	)		(136,387	)		(1,176	)		(380	)		(463,795	)		(83,311	)		(2)		(547,106	)
Total operating income, after expected credit losses		893,211			341,730			68,389			177,573			1,480,903			(105,698	)				1,375,205
Expenses from salaries and employee benefits		(295,301	)		(85,469	)		(2,023	)		(74,400	)		(457,193	)		17					(457,176	)
Administrative expenses		(249,478	)		(58,440	)		(1,414	)		(31,012	)		(340,344	)		21,463					(318,881	)
Depreciation and amortization		(59,730	)		(7,317	)		(312	)		(5,998	)		(73,357	)		—					(73,357	)
Impairment of non-financial assets		(1,019	)		—			—			(642	)		(1,661	)		—					(1,661	)
Other operating expenses		(14,983	)		(5,362	)		1,155			(87	)		(19,277	)		—					(19,277	)
Total operating expenses		(620,511	)		(156,588	)		(2,594	)		(112,139	)		(891,832	)		21,480			(3)		(870,352	)
Income from operations		272,700			185,142			65,795			65,434			589,071			(84,218	)				504,853
Income taxes														(125,962	)		22,739			(4)		(103,223	)
Income after income taxes														463,109			(61,479	)				401,630
Assets		18,800,918			10,811,000			15,400,139			830,910			45,842,967			(607,473	)				45,235,494
Current and deferred taxes														380,894			(65,428	)				315,466
Total assets														46,223,861			(672,901	)		(5)		45,550,960
Liabilities		13,848,124			10,143,939			17,844,350			660,869			42,497,282			(943,714	)				41,553,568
Current and deferred taxes														311			—					311
Total liabilities														42,497,593			(943,714	)		(6)		41,553,879

Reclassifications and adjustments to conform IFRS

(1) The total effect due to the elimination adjustments to conform the total operating revenue is MCh$(21,480). In addition, the total effect of IFRS adjustments is MCh$(907), which difference mainly stems from the recognition of interest income on accrual basis.

(2) The total effect relates to IFRS adjustments of MCh$(83,311), which mainly stems from differences in the calculation model of allowances for ECL.

(3) The total effect due to the elimination adjustments to conform total operating expenses is MCh$21,480.

(4) The total effect relates to IFRS adjustments of MCh$22,739, which stems from deferred taxes.

(5) The total effect due to the elimination adjustments to conform the consolidated financial position data in assets is MCh$(128,730). In addition, the total effect of IFRS adjustments in assets is MCh$(544,171), which mainly stems from differences in the calculation model of ECL, the acquisition of Citibank Chile, deferred taxes effects and settlement of transactions in the course of collection.

(6) The total effect due to the elimination adjustments to conform the consolidated financial position data in liabilities is MCh$(128,730). In addition, the total effect of IFRS adjustments in liabilities is MCh$(814,984), which mainly stems from provision for minimum dividends and differences in the calculation model of allowances for ECL.