In spite of lower income in the fourth quarter, Banco de Chile's (NYSE: BCH) Net Income for 2008 increased by 3.3% year-on-year, and arrived at Ch$272 bln, which amounts to US$438.5 mln at the current exchange rate of CLP620/USD, and US$3.33 per ADR.
The improved result was achieved in spite of an income for 4Q, which was lower than in 2007 due to higher provisions for loan losses and establishment of additional losses.
ROAE reached 20.3% for 2008, which was lower than the 27.4% achieved in 2007. On the other hand, the bank performed better than the average for the Chilean banking sector, which achieved a ROAE of 13.6% in 2008.
The bank's total loans to customers stood at Ch$13.649 bln US$22 bln as of December 2008. This represents an annual growth in total loans of 18.4%, and a market share of 19.4% in Chile.
Banco de Chile reported a 'healthy credit quality' in their 4Q statement, in spite of strong economic deceleration in 2H'08, with a Past Due Loans ratio of 0.60% and an improved Interest Coverage Ratio of 277.2%.
During the fourth quarter, the bank concluded the last part of its organizational integration, as Atlas and CrediChile were unified under a unique commercial and technological platform, keeping the brand CrediChile and becoming the largest player in the lower-income individual segment on the local market. The process included the closing of 18 branches and the relocation of another 6, leaving the bank with a total of 371 branches as of December 31, 2008. The impact in terms of results was approximately Ch$29.7 bln (US$47.9 mln).
At the current price of US$36.35 per ADR, the bank trades at a P/E of 10.21, with a Market Cap of US$4.9 bln, and a 12-month share performance of -34.2%.
In addition, Net Interest Margin for 2008 was 5.4%, and Net Financial Margin was 5.64%.
Equity over Total Assets was 7.16%, down from 7.87% at year end 2007. Operating Expenses over Average Total Assets was 3.65%, compared to 2.87% in 2007.
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