Banco de Chile : Annual financial and audit reports - Banco de Chile's financial statements for the 4Q21 and FY2021

CONSOLIDATED FINANCIAL STATEMENTS

for the years ended December 31, 2021 and 2020

BANCO DE CHILE AND SUBSIDIARIES

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

INDEX

1. Consolidated Statements of Financial Position

1. Consolidated Statements of Income

1. Consolidated Statements of Other Comprehensive Income IV. Consolidated Statements of Changes in Equity

1. Consolidated Statements of Cash Flows

VI. Notes to the 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
Consolidated Statement of Financial Position.....................................................................................................	5
Consolidated Statements of Income ....................................................................................................................	6
Consolidated Statements of Other Comprehensive Income ................................................................................	7
Consolidated Statement of Changes in Equity ....................................................................................................	8
Consolidated Statements of Cash Flows .............................................................................................................	9
1.	Company information: ..............................................................................................................................	11
2.	Summary of Significant Accounting Principles: ......................................................................................	12
3.	New Accounting Pronouncements:...........................................................................................................	55
4.	Changes in Accounting Policies and Disclosures: ....................................................................................	67
5.	Relevant Events: .......................................................................................................................................	68
6.	Business Segments: ..................................................................................................................................	71
7.	Cash and Cash Equivalents:......................................................................................................................	74
8.	Financial Assets Held-for-trading:............................................................................................................	75
9.	Investments under resale agreements and obligations under repurchase agreements: ..............................	76
10.	Derivative Instruments and Accounting Hedges: .....................................................................................	78
11.	Loans and Advances to Banks, net: ..........................................................................................................	84
12.	Loans to Customers, net: ..........................................................................................................................	85
13.	Investment Securities:...............................................................................................................................	92
14.	Investments in Other Companies: .............................................................................................................	94
15.	Intangible Assets:......................................................................................................................................	97
16.	Fixed assets, leased assets and lease liabilities: ........................................................................................	99
17.	Current Taxes and Deferred Taxes: ........................................................................................................	104
18.	Other Assets:...........................................................................................................................................	109
19.	Current Accounts and Other Demand Deposits: .....................................................................................	110
20.	Savings Accounts and Time Deposits: ...................................................................................................	110
21.	Borrowings from Financial Institutions: .................................................................................................	111
22.	Debt Issued: ............................................................................................................................................	112
23.	Other Financial Obligations:...................................................................................................................	115
24.	Provisions: ..............................................................................................................................................	115
25.	Other Liabilities: .....................................................................................................................................	119
26.	Contingencies and Commitments: ..........................................................................................................	120
27.	Equity: ....................................................................................................................................................	126
28.	Interest Revenue and Expenses: .............................................................................................................	131
29.	Income and Expenses from Fees and Commissions: ..............................................................................	133
30.	Net Financial Operating Income:............................................................................................................	134
31.	Foreign Exchange Transactions, Net: .....................................................................................................	134
32.	Provisions for Loan Losses:....................................................................................................................	135
33.	Personnel Expenses: ...............................................................................................................................	136
34.	Administrative Expenses: .......................................................................................................................	137
35.	Depreciation, Amortization and Impairment: .........................................................................................	138
36.	Other Operating Income: ........................................................................................................................	139
37.	Other Operating Expenses: .....................................................................................................................	140
38.	Related Party Transactions: ....................................................................................................................	141
39.	Fair Value of Financial Assets and Liabilities: .......................................................................................	146
40.	Maturity of Assets and Liabilities:..........................................................................................................	159
41.	Risk Management: ..................................................................................................................................	161
42.	Subsequent Events: .................................................................................................................................	197

Consolidated Financial Statements

BANCO DE CHILE AND SUBSIDIARIES

As of December 31, 2021 and 2020

BANCO DE CHILE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

For the years ended December 31,

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

(Expressed in million of Chilean pesos)

	Notes	2021	2020
		MCh$		MCh$
ASSETS
Cash and due from banks	7	3,713,734	2,560,216
Transactions in the course of collection	7	576,457	582,308
Financial assets held-for-trading	8	3,876,695	4,666,156
Investment under resale agreements	9	64,365	76,407
Derivative instruments	10	2,983,298	2,618,004
Loans and advances to banks	11	1,529,313	2,938,991
Loans to customers, net	12	33,537,758	30,190,058
Financial assets available-for-sale	13	3,054,809	1,060,523
Financial assets held-to-maturity	13	782,529		-
Investments in other companies	14	49,168	44,649
Intangible assets	15	72,532	60,701
Property and equipment	16	222,320	217,928
Leased assets	16	100,188	118,829
Current tax assets	17	846	22,949
Deferred tax assets	17	439,194	357,945
Other assets	18	699,233		579,467
TOTAL ASSETS		51,702,439	46,095,131
LIABILITIES
Current accounts and other demand deposits	19	18,542,791	15,167,229
Transactions in the course of payment	7	460,490	1,302,000
Obligations under repurchase agreements	9	95,009	288,917
Savings accounts and time deposits	20	9,140,006	8,899,541
Derivative instruments	10	2,773,199	2,841,756
Borrowings from financial institutions	21	4,861,865	3,669,753
Debt issued	22	9,478,905	8,593,595
Other financial obligations	23	274,618	191,713
Lease liabilities	16	95,670	115,017
Current tax liabilities	17	113,129	311
Deferred tax liabilities	17	-		-
Provisions	24	1,048,013	733,911
Other liabilities	25	595,730		565,120
TOTAL LIABILITIES		47,479,425	42,368,863
EQUITY	27
Attributable to Bank's Owners:
Capital		2,418,833	2,418,833
Reserves		703,604	703,206
Other comprehensive income		(23,927)	(51,250)
Retained earnings:
Retained earnings from previous years		655,478	412,641
Income for the year		792,922	463,108
Less:
Provision for minimum dividends		(323,897)		(220,271)
Subtotal		4,223,013	3,726,267
Non-controlling interests		1		1
TOTAL EQUITY		4,223,014		3,726,268
TOTAL LIABILITIES AND EQUITY		51,702,439		46,095,131

The accompanying notes 1 to 42 are an integral part of these consolidated financial statements