Banco de Chile

SGO:CHILE

Earnings Call Transcript 2020-Q4

[Operator]

Good afternoon, everyone, and welcome to Banco de Chile's Fourth Quarter 2020 Results Conference Call. If you need a copy of the press release issued yesterday, it is available on the company's website. Today with us, we have Mr. Rodrigo Aravena, Chief Economist and Senior VP of Institutional Relations; Mr. Pablo Mejia, Head of Investor Relations; and Daniel Galarce, Head of Financial Control.

Before we begin, I would like to remind you that this call is being recorded and that information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risks and uncertainties, and actual results may differ materially. Please refer to the detailed note in the company's press release regarding forward-looking statements.

I will now turn the call over to Mr. Rodrigo Aravena. Please go ahead.

[Rodrigo Aravena, executive]

Good afternoon. Thank you for joining this conference call today. Well, where we present the financial earnings posted by Banco de Chile during the last quarter.

We have divided this presentation into 3 parts. First, a discussion relative to the main economic trends and our forecast for this year, then we summarize the main achievements and key advances in our strategic pillars.

The final section includes a review of our financial results, raised in the fourth quarter and consequently, during the full year.

Let me start with a brief discussion of the Chilean economy. Please move to Slide #3. As the IMF recently said, 2020 was a year like no other. The entire world was strongly affected by a pandemic that can be comparable only with the Spanish flu of 1918.

In order to review the spread of the virus, several authorities implemented strong sanitary measures and mobility restrictions, leading to the worst recession at least in the last century. All in all, the global economy probably contracted more than 3% in the last year.

Chile has a similar trend the economy was so affected by the global recession and the negative impact of the pandemic. The GDP fell 6% in the year, led by substantial contraction in the second quarter.

Nevertheless, the resilience of the Chilean economy positively compared with most of Latin American countries as reflected by a robust recovery and better expectation for the future. On the whole, this recovery has been led by the joint contribution of 3-main factors: Easy mobility restrictions, expansionary fiscal and monetary policies, and to a lesser extent, the temporary impact of pension funds withdraw on consumption.

I will go over these factors later in this presentation. As can be seen in the chart on the top left, GDP posted a significant recovery during the second half of the year.

In fact, the GDP posted annualized rate of 23% and 28% quarter-on-quarter in the third quarter and the fourth quarter relatively after plummeting by 44% on a sequential basis in the second quarter. Due to this, the GDP has reduced its annual decline rate, and it will probably repay positive rates over the next few months.

The order inflation has slightly increased by the end of the year, in line with the greater dynamism at the chart on the other right shows. Specifically, the CPI went up by 1.2% in the fourth quarter from 0.3% in the previous one, listing the year-on-year figure to 3% at the end of the year.

Since the CPI is within the policy target, in an economy with an in Force 10, output gap, the Central Bank seems to be comfortable with maintaining the opener rate at 0.5%. In fact, the Board has mentioned the intention of keeping the policy rate for a long period of time as well as most of liquidity measures announced since the beginning of the pandemic.

The recovery has also been reflected in the labor market, although at a slower pace. The employment rate has fallen from the peak of 15% observed in July to 10% in December, at the bottom left chart shows. This improvement has been driven by the steady rise in total employment as seen in the bottom right chart. The creation has been concentrated in sectors that benefit from the greater mobility, such as contraction and retail.

On the other hand, services sectors remain subdued since they've been much more affected during this pandemic. Based on these trends, there's been an improvement in the Chilean economy expectations. In fact, according to different sources, including the consensus released by Bloomberg and Latin Focus as well as the IMS based scenario, Chile should have the best average growth rate between 2020 and this year.

I'd like now to focus on the main reasons that support this positive view. Please move to Slide #4. Chile has been recognized for implementing several active and effective measures during this pandemic. In this slide, I'd like to highlight some of these policies.

The country has also been successful in terms of reducing the spread of the virus after implementing a strong lockdown in mid-2020, the number of new inactive cases of COVID-19 have remained under control, leaving room to ease some mobility constraints relative to those that we have in the first wave of the pandemic.

Consequently at the chart on the other left shows the share of positive tax has remained well below not only the threshold of 10%, but also from levels seen in other countries. Additionally, the government began a vaccination process with an increasing number of people being immunized at the chart of the other right shows. According to government estimates nearly 80% of the population will receive the vaccine during this semester. Billy has also made a difference in the economic area.

On the monetary side, the Central Bank adopted several measures beyond the low interest rate. And the chart on the bottom left shows the money supply has sharply risen as a result of bond purchasing, effect interventions, and the FCAC line, among others.

The government has also played a key role since the fiscal target is equivalent to nearly 10% of the GDP being the only country, able to maintain an expansionary fiscal policy in the region according to the IMS estimate.

This position shown in the chart on the bottom right is possible, thanks to the strong fiscal position held before the pandemic. Therefore, we are confident that the recent green shoots will gradually translate into better dynamism in the next couple of years.

Please move to the next slide, where I will share with you our forecast as well as the main reasons supporting this positive deal. We expect the economy to grow nearly 5.3% this year after falling 6% in 2020. These figures position Chile as one of the strongest and most Brazilian countries in the region at the chart on the right shows. The existence of better perspective for tile is based on the following factors: First, the persistence of expansionary policies, the government announced that the fiscal spending will be maintained this year with a special emphasis on infrastructure and public investment. This type of policy is particularly favorable for employment and consumption.

A second factor is an improvement in the external scenario the pickup in the copper price, which represents more than half of our export is undoubtedly positive for the country.

This trend is even better when we also consider the acceleration in China, a country that explains nearly 1/3 of total exports. Finally, as I mentioned before, Chile has begun a vaccination process, which will allow greater mobility levels in the future.

The table summarizes our main forecast we see a recovery in all the components of the GDP, mainly in private consumption, which would be the main driver of growth. Additionally, we've seen an inflation rate table at 3% over the next couple of years, leaving room to the Central Bank to maintain the interest rate of 3.5% for a longer period of time.

Despite our expectations, we are aware of several risks for the future. Some of them include the global GDP growth, especially considering the high dependence of tile to the international trade.

The evolution of the pandemic is also a critical factor to monitor in the future. Also, the last but not the least important will be the political discussion in Chile.

2021 will be a key year for the future since in only 9-months between April and November, there will be elections for a new precedent for most of the Congress, and members of the body in charge to prepare the proposal for the new constitution.

Now I'd like to revise the main trends in the banking industry. Please move to Slide #6. Over the last 12 months, loans in the planned banking system have consistently slowed down in line with the weak economic growth by increasing only 2.4% year-on-year as you can see in the chart on the top left, on the mortgage loans remained relatively stable, rising 8.1% year-on-year as for the rest, commercial loan growth dropped to under 2.6% year-on-year as for Gate loan demand pulled off by the end of last year. The most intense drop was same in consumer loans, which fell.

[Operator]

Sorry for the interruption. Just in case for the people that may be having trouble seeing the presentation. If you could just refresh the slide presentation on the page, and then it will pop up again.

[Rodrigo Aravena, executive]

Thanks, operator. So as I was mentioning about the banking industry, about the loan growth, okay? I'd like to mention that the most intense drop was seen in consumer loans, which fell by almost 14% over last year. In line with the finding presented in the Central Bank survey debt with exception of the fourth quarter has shown a weaker supply and demand for loans. As you can see on the chart on the bottom left.

Nevertheless, loan demand for mortgage and consumer loans has risen sharply in the fourth quarter while SMEs and corporation have normalized due to lower demand for COVID loans and a reduction in excess liquidity levels.

We believe this indicates that we will begin to see an improvement in loan growth during this year, in line with the better evolution of the economy.

In terms of results, the client banking industry posted a net income of CLP 607 billion in the fourth quarter, excluding Itaú figures, which is the highest level recorded during the year, due to high inflation and lower cost of risk, as shown on the chart to the right.

2021 will probably be a transitional year for the industry. It's not yet totally clear how the pandemic will continue affecting the economy, but we think it's reasonable to expect that loans should grow in line with GDP growth of 8% nominal and cost of risk should return to the level same pre-COVID towards the medium term.

Before passing the call to Pablo to discuss our today advances and financial results, we want to highlight some achievements that we obtained during 2020. Please move to Slide #8.

Once again, we ended the year as the leader of the industry in many aspects regarding our financial figures and social initiatives.

First, despite the crisis, we were able to increase our loan book by 3% in a scenario where the global economy decreased. In addition, during this uncertain time, our bank remain as applied to quality institution, leaving the industry and demand deposits and asset under management through Banco Chile in version.

This trust was achieved by our corporate reputation and our focus on growing responsibly, which is confirmed by the lowest nonperforming loan ratio of only 0.97% and the highest coverage ratio of 356%, both far superior from our peers. In the same line, this soundness was further reinforced by obtaining the strongest capital adequacy of the largest banking sale as measured by the Basel index reaching up 16%.

We also know that more than ever, 2020 was a year when financial institutions must participate in the solution and provide a system to citizens to overcome this crisis. In this context, we granted $2.6 billion in FOGAPE loans, and were scheduled thousands of loans for SMEs and personal banking customers.

Please move to Slide 9. These excellent results in 2020 were also recognized, as you can see on this slide, first, we received the national customer satisfaction award for providing the best service in the Chilean banking Industry.

This is a result of our efforts to offer the best experience to our customers through initiatives in innovation and other fields of our operations. In this line, we achieved significant advances in digital banking. By far, the most important was the launching of our digital and board in bank accounts that has attached 170,000 customers.

As a result of our improvements in digital transformation, we were recognized as innovative digital bank of the year by the European Magazine. As we mentioned in the last slide, we created a national plan to support our customers in this difficult moment. Therefore we have made in this sense -- we're known by global finance that owner us with the outstanding crisis leadership recognition and by a survey that resulted in our time being the best financial institution in dealing with the health crisis.

Since 2016, Banco de Chile has had a plan to promote inclusion within the organization based on a policy and a declaration of principles, which is materialized in values initiative to support employees, clients and the community. Our actions are being fruit and the European recognized us as the best bank for financial inclusion in Chile.

As a result of our continued goal of developing our employees, we will consider the best company in the country to attract and retain talent at the best time to work for in Chile according to university students.

Finally, our sustainable business model was recognized once again and the European, the banker and global finance considered as the bank of the year. Now I will pass the call to Pablo Mejia to discuss our advances in our strategic initiatives and financial results posted by Banco de Chile. Paul.

[Pablo Ricci, executive]

Thanks, Rodrigo. Please move to Slide #10. Throughout our history, we have been able to be being very successful in providing attractive returns to our shareholders through a proven track record of consistent and robust results.

We aspire to continue doing so, and we truly believe that this is the only way to maintain our lead position to continue to be the most sustainable bank.

To do so, we are continually reinforcing 3 key areas of our long-term strategy. Digital transformation, efficiency and productivity as well as ESG. Strengthening these key areas will allow us to support our success in the long-term and overcome future challenges.

Please move to Slide 11. the pandemic has accelerated the use of technology in the banking industry has been part of this change. During the past year, we confirmed our leadership in digital banking by successfully managing a very important increase in the usage levels of our digital channels by processing over 400,000 loans online to support our customers' liquidity needs.

Additionally, we innovated in several fields, updating all of our main online platforms, bringing more functionality, agility, inclusion and security to our channels and in integrating analytics tools, which provide us with valuable information to better understand customers' preferences.

Among the valuable advances in digital banking in the second half of 2020, we released our new digital bank account called Cuenta FAN. This account was created through a new methodology that allows us to design and add new complements easily with marginal costs. Cuenta FAN offers many benefits to customers in all segments of the population because it focuses on bringing new clients to Banco De Chile with all the advantages that our current customers already enjoy. For this reason, we have had -- we've seen an important demand to open this account from low-income to high-income individuals, and this makes us very confident that this product will be profitability quickly.

We believe that banks that only focus on providing digital payment means are neither an ideal way to compete or Sue platform to generate profitability.

Some of the most valuable benefits for our Cuenta FAN customers are that there is no entrance in maintenance fees and that these customers have access to the same loyalty program as a traditional bank of the Chile customer. All of our customers use the same loyalty program with the same banking ops. There's a potential customer base in Chile wiband of around 5 million, and this could become -- that could become a Cuenta FAN customer and 2 million of these individuals are already prequalified with products.

In terms of numbers, Cuenta FAN has been a total success. Since its launched in September, we have already had around 170,000 new customers. This is a huge figure when we take into consideration the total current account customer base which is around $1 million.

It's also important to mention that part of our strategy is to expand and get closer to the younger segment and grow this customer base. This is also bearing food as 92% of customers are native to the Chile and almost 90% of customers are younger than 50-years old.

Please turn to Slide #12. The successful implementation of the complete digital package of our customers has played a critical role in providing the best experience and spending out from our peers. Even through this period, that has been very challenging, we continue to maintain our high and leading indicators.

As you can see, we posted once again the highest brand recognition in the Chilean industry with a top of mind of 23% with a wide gap with our closest competitors, also, when banking customers were asked if they were to switch to another bank, which bank would they choose, we remained as a top pick with a large difference to all of our peers, as you can see on the chart to the right.

This position in these surveys is especially relevant in the context of new regulations, where will be much easier for customers to switch from 1 bank to another. Along with our superior brand recognition, we are also the leader in best service quality, as shown in the chart on the bottom left. The success in the satisfaction levels has driven precisely due to the quality of our services and the products that we provide. And which helped to generate strong long lasting relationships. These figures are reinforced with the evolution of client complaints which despite all the challenges that the industry incurred in 2020, we managed to improve from our prior year, as the chart on the bottom right shows.

Please turn to Slide 13. We continue advancing and optimizing our resources in 2020. To reduce our operational costs, we set clear targets based on 3 main areas. During the year, we moved forward and continued automating processes by leveraging technologies and simplifying procedures. Through greater use of it in all areas of the bank, we are assisting that we will be -- remain competitive in this highly challenging industry that is continually being disrupted by new financial technology firms. The advances in technology have permitted us to reach more efficient processes in many areas of our bank. As a result, during January, we had to adjust our organizational structure, laying off approximately 4% of our staff to maintain the high level of competitiveness and ensure long-term sustainability. The indemnities associated to this decision were reflected in our P&L in December of 2020.

The second area identified for optimization is our branch network. In 2019, we started the process adjusting a structure that led to a reduction of 14% of our branches in 2 years. This strategy includes a new service model that involves integrating a telenetwork, merger of nearby offices as well as automation of customer service and cashier areas.

It's had a positive impact on operational productivity and efficiency. Another measure that contributes to reducing costs and the implementation of a specialized area that evaluates all purchases in the bank and has had excellent results in reducing admin expenses. We have especially seen advances in expenses related to maintenance, rental, travel, marketing and external advisory services.

Additionally, we have created a new division called productivity and efficiency, which will be responsible for accelerating the implementation and savings initiatives that were already identified and discovering new opportunities for improvements in productivity across the entire organization. The improvement in efficiency and productivity can be seen on the chart of the slide. For instance, loan per employee has improved 36% since 2016, and total expenses to assets has dropped 59 basis points. We expect that we should be able to continue improving our efficiency ratio and reach a level closer to 42% in the medium term.

Please turn to Slide 14. I another key strategic pillar of Banco de Chile is our strong commitment to sustainability that has accompanied us during 127-years of our history. Since we are living in the unprecedented health crisis, our sustainability strategy during 2020 was concentrated in responding to the emergency and bringing support to the most effective by the COVID pandemic.

In this context, we implemented a national support plan that included diverse initiatives to directly assist the most longwall families, customers, SMEs and community in general. These initiatives that I would like to mention their alliance with [indiscernible] Chile, a nonprofit organization that allows us to support the health emergency raising resources to benefit almost 440,000 people. In addition, one segment that was particularly affected by the pandemic SMEs in order to promote their entrepreneurship and support the segment, we launched the Fifth National Entrepreneurial challenge, which attracted over 56,000 participants.

Our national plan also considers to bring our customers as well, as mentioned in the previous calls. We were the first bank to implement a national plan for retail banking and commercial customers. It includes a series of special measures to support our clients to cover their most urgent financial needs.

All the initiatives that we have been talking taking to support the society, maintain our bank as a financial institution with the best performance in terms of actions taken during this health crisis according to Ipsos, a leading surveying company.

This recognition demonstrates that we are advancing in the right direction as a sustainable institution that contributes to the development of Chile and its people.

Finally, as a result of our actions towards sustainability, Banco Chile is listed in the Dow Jones Sustainability Index. In addition, through our mutual funds subsidiary, Banco de Chile, we incorporate ESG factors and investment decisions that were adopted by the United Nations principles for responsible investment. Now please move to Slide 16, where we go into further details of our financial results.

As Rodrigo highlighted in the presentation, 2020 was a very challenging year. The subdued GDP growth and higher unemployment observed in 2019 was further amplified by the arrival of covid. GDP tank and unemployment skyrocketed. This was accompanied by a major drop in business and consumer confidence, adversely affecting the banking industry's perspective.

Thankfully, it looks like we're beginning to see the light at the end of this Covid tunnel. In the fourth quarter, the economy gradually opened, loan originations increased and activity in transactional products began to return to more normal levels. This more dynamic environment, together with the effective and consistent business strategy permitted us to post a good bottom line this quarter of CLP 126 billion, showing a slight change in trend when compared to the prior 2 quarters. On a full year basis, we recorded CLP 463 billion with an ROE of 13%, a level that is more than acceptable can say in the magnitude of this crisis.

Nevertheless, if we exclude the onetime effect associated to the recalibration of our group based provisioning models that was implemented in the third quarter of 2020, as reported in Note 2 of our financial statements, our full year bottom line would have reached $520 billion. This action confirms our more conservative and prudent risk approach during the crisis.

This is especially noteworthy when we compare outperforming results to all of our peers.

As you can see on the bottom left of the slide. We also beat all of these banks. In profitability is measured by return on assets and required by far the highest Tier-1 ratio, both of which are shown on the chart on the bottom right. We've managed this leading result not by chance, but by a consequence of our consistent strategy that puts risk first. We steadily record more predictable results throughout the economic cycles, clearly setting us apart from our peers and generating greater value for our shareholders.

Please turn to Slide 17. Operating revenues in 2020 decreased 3.7% year-on-year, in line with the weak economy, but rose to 8.4% on a sequential basis. As expected, the pandemic affected all of our business all of our lines of business, as you can see on the chart in the middle of the slide, for the first time in many years.

Customer income for the full year fell 1.6 -- fell from CLP 1.6 trillion to CLP 1.5 trillion or 5%. This is mainly due to the factors shown on the top right chart. Specifically, income from loans went down by CLP 35 billion due to sharp contraction in consumer loan balances as a consequence of both a more prudent bank offering and the same time, the lower demand from customers as a result of the pandemic.

Additionally, the low overnight rate negatively affected the contribution of our DDAS, which was partially offset by a 34% rise in deposits during the same period.

Despite this our fee-based business was very resilient because most of our revenues are generated by our large and well-diversified retail customer base, it also dropped but only marginally by 2.5% year-on-year, thanks to the joint venture we embarked with an international insurance company.

On other hand, sales and distribution revenues grew by CLP 6.2 billion during the year as a result of more activity from derivative transactions related to our corporate and wholesale banking units.

Overall, negative growth in customer income was partially offset by noncustomer income, which grew 3% year-on-year. Our treasury business had a strong year, and it's explained by the good results in the management of our trading and AFS portfolios and a scenario of decrease in interest rates as well as a lower CBA DVA charges as a result of improved probabilities of default and higher revenues from asset and liability management. Despite that 2020 was very challenging, we have finally begun to see some signs of recovery.

Loan demand started to strengthen, and our view on the economy is improving. This should translate into a better loan growth figures in the near future, which helped grow interest income. We have also begun to see that the normalization in the economic activity, which is being reflected in higher sensationality and in turn fee income.

The second and third quarter were the worst in this respect. Excluding income that we recognized from the joint venture and fee income and the onetime greater expense and commissions paid related to credit cards, we grew fee by 2% quarterly sequential basis or 8% annualized. This is due to the most products are recovery into more normal levels of fee income generation, such as credit cards, collections, payments, as well as mutual fund management and some products are actually posting higher revenues with respect to the same quarter last year.

These products include current account administration, guarantees, layers of credit as well as trading and securities management. We expect this more dynamic activity should continue in the coming quarters and that we should post positive growth figures in 2021. As long as there are no more major lockdowns in tile, similar to the ones that we saw in the second quarter of 2020. It's important also to highlight that the focus of Banco de Chile has always been to promote responsible growth in every segment we serve. We firmly believe that this is one of the main pillars of our proven and successful track record. As you can see on the charts to the right, this focus has allowed us to post once again the highest fee margin and operating margin net of risk in the industry.

Through this approach of growing selectively in positive economic times in taking the proper safeguards during downturns, we have been able to provide an adequate return for our shareholders. On the following slides, we take a closer look on how our portfolio has changed throughout the course of the year and the evolution of our asset quality.

Please turn to Slide 18. Total loans grew by 3% year-on-year, ending the quarter with a portfolio of almost CLP 31 trillion. The general trend in 2020 was an environment of lower demand from customers, stricter credit risk requirements from banks. As you can see on the chart on the top right, loan volumes were sustained by COVID Orgatec program. In our case, the program was mainly focused on customers in our SME segment, which are businesses with annual sales below $3 million per year. As you can see on the chart on the bottom of the slide, loans on the segment grew by 21% when compared to 2019.

On a sequential basis, we saw a little more dynamicism in quarter in personal loan banking posting a rise of 1.3% or 5.2% annualized. Once again, residential mortgage loans were the main driver of growth, up 1.8% from the third quarter of 2020.

Product has been more dynamic and more resilient than initially expected. Investors seem to be seeking more profitable, low-risk investments in real assets as interest rates worldwide reached historically low levels. In terms of origination, mortgage loans grew by 29% on a sequential basis, but only represent approximately 60% of the level we recorded same period last year.

Meanwhile, it's also worth mentioning that consumer loans for the first time since 2019 growth this quarter, growing 0.3% over the third quarter of 2020. It's also notable to highlight that consumer loans have consistently increased monthly originations, accumulating a rise of over 50% when compared to the third quarter of 2020. Despite this impressive rise, it still falls short to even the levels recorded in the fourth quarter of 2019 represented only 73% of the level posted during that period. With regards to wholesale lending, this area slowed and grew 2% year-on-year and on a sequential basis, decreased 5%, mainly due to a reduction of liquidity buffers maintained by a large number of multinational companies during the year, in order to base uncertainties associated with the pandemic. To a lesser extent, a sharp decrease in exchange rate or Chile fest appreciation negatively impacted the balances of foreign currency denominated loans. Looking forward, we expect that 2021, in line with the latest credit survey from the Chilean Central Bank and the better perspectives for the overall economy. Demand should rise and risk appetite from banks will likely rise as well. Thus, we expect lending to gradually resume, particularly consumer and commercial loans, which are the products most affected in 2020. We estimate that the total loans should pick up some market share and grow around 8% in 2021.

Please turn to Slide 19. Without a doubt, the financial institution with the best funding structure in Chile. This is one of the strongest competitive advantages, which has been possible through our ability to provide the best service experience that our customers value and through its solid brand and capital soundness. 2020 had significant changes in their funding structure. First, demand deposits grew significantly, rising 34% over last year and today represents 33% of total assets, as shown on the chart on the top left. This is significantly higher than all of our peers, you can see on the chart to the right. The low interest rates, combined with an uncertain economic scenario and multiple financial aid packages for individuals and SMEs drove this increase in deposits. Second, we also took advantage of the liquidity facilities provided by the Central Bank, which we obtained midterm funding denominated in pesos and bearing the monetary policy interest rates.

These 2 important changes that are shown on the chart on the bottom left, which mainly replaced time deposits held by financial counterparties, particularly in local brands. This combination with a world-class risk ratings that allow us to place volumes at low spreads has permitted us to continue to be the leading banking cost of funding. Finally, we finished the year with the strongest level of Tier-1 in our recent history of a 12.2%. This is especially in preen we begin to implement Basel III at the end of 2021.

In this regard, based on our current information estimates, we expect to implement Basel III without any material issues taking into consideration the phase-in period adopted by the today regulator. Moreover, as you can see on the chart to the right, we have the highest level of Tier 1 versus all of our careers. We are confident that we can take advantage of the opportunities that presented during this period to grow our assets and strengthen our relationships with our current customers as well as to continue increasing our share of wallet, especially through our digital contact channels. Our new digital initiatives should permit us to keep expanding our customer base while improving our market-leading position in core demand deposits.

Please turn to Slide 20. Cost of risk in 2020 reached CLP 463 billion, up from 33% from last year. Nevertheless, if we exclude additional provisions and the onetime adjustment of our risk model in the third quarter, cost of risk would have dropped 20% year-on-year. Clearly, this is not in line with the economic scenario, but shows the impact of diverse financial temporary aid packages and justifies the proactive measures taken by the bank regarding additional provisions and adjustments in risk models. The financial industry and us first gave various payment holidays to its customers, and this was later accompanied by government-guaranteed loans for SMEs as well as 2 pension plan withdrawals that amounted to approximately $35 billion, amongst other initiatives, mainly for the lower income segment of the population.

The sum of all the cash disbursements of these assistant programs, actually for the first time in Tula's history, gross disposable income. These factors drove a reduction in NPLs and improve significant customer payment behavior. Nevertheless, we can't rule out that one sequel is used our core cost of risk and NPLs will return to more normal levels. For this reason, we have accumulated the highest level of coverage in the industry of 3.6x, clearly differentiating us from our main tiers, as you can see on the chart on the top right. Our delinquency ratio is more than 50% lower than our peers and the level of additional provisions, despite that we have the best portfolio.

In terms of the quality of our retail book, had payment holidays in this portfolio has evolved well. The personal banking area has shown excellent payment behavior with low levels of NPLs that are below the levels reported prior to the curses. With regards to the SMES, we provided a 6-month grace period to almost 40,000 small and medium-sized businesses, and 1/3 of these customers have begun to pay their first installment in December. Of this client base, we've also seen very positive payment behavior as reflected in our good cost of risk indicators. All of these results are a consequence of the important resources that we deployed, the credit risk in Banco de Chile. We're confident that our commitment to manage risk prudently, growing responsibly with consistent strategy will permit us to continue posting a track record about ranking our competition, not only in credit risk but also in profitability.

Please turn to Slide 21. Our determination to improve our operating costs continue to vary fruit. Year-on-year total operating expenses decreased 3.1% for the full year when compared to last year and 2% this quarter when compared to the fourth quarter of 2019. As you can see on the chart to the right, personnel expenses decreased CLP 18 billion, driven by lower variable compensation and the drop in severance and revenues that was partially offset by a rise in salaries. But was below the level of inflation, mainly as a result of the strict rehiring processes that we have implemented, and this produced a reduction in our headcount throughout the prior year.

Administration expenses also had an important drop explained by the lower outsourced and external advisory services due to the internalization of core development, aiming to improve efficiency and due to lower business activity affected by the pandemic. There was also a reduction in maintenance of fixed assets and lower marketing expenses, thanks to improvement in cost-effective campaigns implemented throughout 2020. These effects were partially offset by a rise in it expenses explained by various IT projects related to digital transformation and regulatory projects as well as the temporary expenses due to sanitation measures that we had to undertake to keep our customers in sub state during the pandemic. For effective cost control measures, we've been able to maintain our efficiency ratio flat this year at 45.5% and actually reduced our cost of assets from 2.2 to 1.9, as you can see on the chart on the bottom line.

Also, I think it's important to highlight how we compare to our peers in terms of cost of control. Please take a look at the charts at the right. Since 2018, we have been able to improve our cost base in both salary expenses as well as administrative and other expenses while our main pears have been performing comparatively worse.

Please turn to Slide #22. 2020 was one of the most challenging years in the last century. The good results in the banking industry has been attained due to solid risk management practices in the banking industry as well as a coordinated effort that took place between the financial industry and government to reduce as much as possible the negative effects of the crisis and to avoid this temporary cyclo effect economy on a permanent basis.

We are positive for 2021, especially as Chile has already begun the vaccination process, and this should allow us to get back to more normal life faster than other Latin American countries. As you can see on the chart, Bank Vecima has been the best-performing bank, not only in Chile, but also between our main peers. This shows how much confidence the market has in our superior business approach as well as its view on our outcome in the crisis. We are confident that this will continue to support the leading banking in Chile, and thanks to a superior risk management that supports our business model and permits us to have a more stable and reliable returns for our shareholders.

Finally, before moving on to questions, I'd like to mention some key takeaways. In terms of GDP, we expect activity to grow around 5% in 2020. And like other years, we don't expect that the banking industry will grow 2x real and GDP loan growth. For this reason, it's important to understand that the current state of the cycle in 2020, total loans for the industry grew 2% year-on-year despite the 6% decline in the overall activity, showing countercyclical role that we haven't seen in any other crisis.

This growth was driven by commercial loans due to the Bogata program and mortgage loans partially offset the reduction of 14% in consumer loans. In this environment, given a very high comparison base, we anticipate that 2021 loan growth for the banking industry will only partially recover the expansion rates that we saw prior to the pandemic even though we have better perspectives for GDP.

Specifically, we think it's reasonable to expect loan growth of around 8% in nominal terms for the system. In terms of bank of maturity, we expect to grow slightly higher than the industry's average. Focused on high-margin products. We continue to focus on growing in the consumer to middle and upper income segments as well as commercial loans for the we're expecting that we should pick up market share in consumer loans in 2021. In this environment, we expect NIM for us and the industry to be below the level obtained in 2020 because of the negative effect of the low overnight rate on loan spreads, flat inflation as well as the reduction of the contribution of BBA's net interest income. We think it's reasonable and realistic to expect a slightly lower for us and then this year with respect to the average level obtained in 2020.

In terms of risk, we expect 2021 as a transitional year, more likely it worse is behind us, and we should begin to see cost of risk above the lung -- an improvement above the levels that we've seen, especially in banks that have not made adjustments in the provisioning malls. Despite the NPLs are very low at 1%, it's important to highlight that this was positively affected by the various temporary factors such as assistance programs to our customers and withdrawn from the pension funds. Since these factors will tend to dissipate during the year, it's reasonable to expect a more normal level of NPLs and a cost of risk this year, probably around 1.2% to 1.3%, respectively.

Nevertheless, it's even more important to note that we have solid loan portfolio with the retail customer base that is more concentrated and lower risk segments and a strong SME book with a historic of low levels of delinquency. Actually, we've been recognized for having the strongest customer base in the industry with a proven track record. This has been as a result of our solid risk culture, which always focuses on growing responsibly. This strategy should allow us to slowly transition back to more normal levels of cost of risk.

We expect that the top line growth should slow, but given our emphasis to cost control, this should permit us to maintain our cost ratios relatively flat in 2021. Efficiency ratios. And finally, in terms of profitability, we are still facing several sources of uncertainty, mainly in terms of the degree of the recovery of the pandemic. We don't know the impact of this crisis in critical areas as employment and potential growth, which will affect the dilution of the asset quality indicators. So the future trend of risk indicators will be a critical role for will be critical for the ROE for us and then this year as a whole.

In this environment, we expect a gradual increase of ROE this year relative to the average level posted in 2020. The implementation of the strategic projects will allow us to offset some negative forces, such as lower interest rates and still weak employment. In the medium term, we think that this should see an improvement in our ROE towards levels closer to our history as long as the economy improves and the capacity of growth and interest rates converts towards higher levels. It's important to reinforce the idea that it will be strongly depend on the evolution of the economy once the pandemic was left behind us. Thank you. And if you have any questions, we'll be happy to answer them.

[Operator]

[Operator Instructions]. The first question is from Yuri Fernandes with JP Morgan.

[Yuri Fernandes, analyst]

I have some question on the strategy of Banco de Chile. Regarding consumer loans, right? I guess with the fund account maybe the bank will return stronger to this market, I guess, so U.S., the credit Chile years ago, this has been a market, the bank has not been focusing a lot. So I would like to understand if this is correct, like this is part of your core strategy now. The bank going to be more aggressive. On consumer loans, maybe moving slightly to the lower income segment. And if that's right, how do you see competition there? Because we see other banks doing a similar approach like Santander with Life and Superdigital, you have matched with BCI, we have like maybe the retailers, right? Like how do see competition there?

Like how much should we expect the customers of fund to keep it growing? I don't know, like a little bit more of color on the consumer side. And I have a second question regarding margins. This year, your NIM ended at CLP 3.5 million this is about 50 bps lower tenement Santander Chile. And when we look historically, the NIM of Banco de Chile and Santander Chile, it has always been very close, right, like 10 bps, sometimes you having higher margins, sometimes Santander Chile has higher margins. And I guess the message you had in the call is that maybe margins pressure may continue a little bit in 2021. So maybe it will still come down from this 3.5 million and when we take your peer message, they also point to some decrease, but as you said, like some marginal decrease.

And my point is, why now in 2021, should we see a bigger gap between your margin and your peer, like why should we not expect Banco de Chile to catch up in the margins versus your peer?.

[Pablo Ricci, executive]

Thanks, Yuri. So in terms of our strategy going forward, the strategy is today being focused on growing our customer base. You've seen the Cuenta FAN. So the quintain is a product, which is something that was recently launched, as mentioned, we've grown strongly with over 170,000 new customers and less than 1 -- in around one quarter, which is super relevant. If we consider that our customer base is current accounts is about 1-million customers. So the interesting thing of this account is that permits us to cross-sell these customers quickly. It's a plan that we're developing in order to cross-sell these customers quickly into Banco de Chile customers where they can maintain their current account, their bank account number and transfer that as a current account, plus there's a lot of incentives for these customers to come into the bank, which is not only lower income segments, which maybe some players in the industry are focusing on.

But for us is to bring these new customers into Banco de Chile, which can be from all customer segments because we're providing them with the same loyalty program. So the idea for us is to pick up market check. In consumer loans, but it's more focused on the middle and upper income individuals and to bring new customers into the bank, using this new Cuenta FAN, which is attractive for all the customer segments. Thanks to the initiatives. We're not -- they used to say as we use this loyalty program, et cetera. So that's been one of the -- that's been the main driver for customer growth today. In terms of margins, what I can say in terms of margins is that what we're trying -- what we've mentioned in the presentation and in the press release is that one of the pressures in margins has been from a variety of factors, the loan book in high-margin products has decreased. For example, consumer loans is in low double-digit figures in terms of percentages around 13% -- 13%, 14% for us in the industry. If you look at the growth in SME loans, it's been focused more in terms of for gap so that's a lower interest rate product. So you're having a negative impact on that side. You also have the effect that we've had a huge increase in deposits in Banco de Chile. So that also increases the level of available for sale instruments, which is recorded in interest income. So that affects the margins. As well as some other players in the industry, as you well know, have acquired portfolios.

And that also increases their margins or maintain some flat, while the rest of the industry in 2020, probably saw a decrease in margins. So it's also in terms of comparison base. And by saying that also by acquiring another company, you may maintain your margins flat, but you also have to take into consideration. The risk of the portfolio, which maybe today, risk hasn't been a major impact on banks other than with the additional provisions because there has been many different programs to just the customers and all of these payment holidays, all this help from the government. But in reality, the reason why we did the additional provisions and we've made these changes in provisioning models is because these programs can't last forever. So we decided that was prudent to time to take these provisioning models, adjustments and additional provisions, which from our understanding from financial statements, no other banks actually did an adjustment in their risk model last year. And that's why we highlighted on the first slide of Banco de Chile, that we had the highest net income when we adjust this, higher risk. If we hadn't adjusted our risk model, we would have had a higher net income than the main peer in the industry.

[Yuri Fernandes, analyst]

No, super clear, Pablo. Regarding the consumer loans, so do you think it's reasonable to work, I don't know, you said maybe percent nominal for the industry, and you're growing slightly ahead? Do you think like 10%, 12%, it's reasonable for consumer loans growth this year?

[Pablo Ricci, executive]

Yes, slightly above 8% in low-double digits. It really depends on the evolution of economy outcome of the vaccines how quickly how quickly the economy unemployment improves. So there is a possibility that 2021 could be better than the market's perspectives. But today, it will all depend on the outcome of the vaccination process.

[Operator]

Next question is from Tito Labarta with Goldman Sachs.

[Daer Labarta, analyst]

My question is on efficiency. You mentioned you think you can eventually get, I think, around 42% efficiency. Just, I guess, the -- how you would get there? And you mentioned your cost control, I think it's definitely near your focus. I mean you're seeing some pressure on margins, as you mentioned, and revenue growth in general. So to achieve that 42% efficiency, what type of cost control does that imply expenses in line with inflation below that? What type of revenue growth do you think it would take to get there in terms of timing in a couple of years? Any color you can give on that would be helpful. And also just to add to that, just given the quintain and digital initiatives, right? How much is all this digitalization trend benefiting their efficiency or potential improvements to efficiency?

[Pablo Ricci, executive]

Thanks. Well, today, on how we measure our efficiency ratio, we have 45 -- 45.5% level. We think that we have room to continue improving that level to levels around 42%. And it's really focused, as we showed in the presentation, in those 3 main areas. One is to control our costs better in order to use our resources better across all the bank, we implemented in 2020 in an area that focuses on reviewing all the major purchases in Banco de Chile advisory services and is really focused on reducing our administration expenses. We also have been implementing for a while now, more automation in the back-office processes.

And we're also improving our service model across the branches. As well as being very, very stripped in terms of rehiring individuals who leave the bank on their own. So over the last 5, 10 years, you can see a you can see how that has evolved and their head count has gradually reduced because of the strict rehiring process. Going forward, we've also implemented a new area that's looking at making the bank more productive and efficient. And there be looking at many diverse areas that we can continue improving. This includes utilization of the bank.

But there's no one key area that I could say that this is the key area that will mean 1% reduction in efficiency. It's the effort across all areas of the bank, a conscious effort to reduce expenses in each division by each manager. Also this year, for 2021, I think it's important to mention that the costs going forward for 2021, in general, what we should expect is costs outside extraordinary events should be below efficiency -- efficient inflation.

[Daer Labarta, analyst]

Okay. Great. And is that a trend that can continue sort of keeping the cost growth below inflation? Is that part of what it will take to get there?

[Pablo Ricci, executive]

Yes. So the focus -- if we look at some important facts to consider as well. I'm not sure how you calculate the efficiency ratio. But our efficiency ratio, we don't include its operating income, excluding -- it's not net operating and other expenses.

So if we look at the leader of the industry, the leader has 42.5%. So we have a gap there with 3%, and we should think that Banco de Chile still has a lot of room to continue improving our efficiency across administration expenses, you can see there is room as well to be more efficient as we grow. We can use digitalization, the Banco de Chile, more efficiency -- efficiently to grow in the future without having to rise their expenses.

[Operator]

The next question is from Neha Agarwala with HSBC.

[Neha Agarwala, analyst]

Could you give us some sort of guidance or indication on how the cost of risk could evolve for next year? And what kind of dividends can we expect for 2021?

[Pablo Ricci, executive]

Cost of risk, we're still in a very uncertain time. So uncertain for the politically uncertain economically. We don't have a clear idea understanding yet on the evolution of COVID. But we think that 2021 should be a better year economically than 2020, which that should mean that we should gradually, it's like a transitional year gradually begin to return to more normal levels of cost of risk, which is between 1.2% to 1.3%.

Probably because of all these measures that the government undertook and different benefits of the banking industry provided. We should probably see NPLs for the industry rise a little because the level that we see in 2020 are probably artificially low. And that should for -- in the medium term, 2022, probably, around the cost of risk, which is more in line with our long-term level of 1.1% would be reasonable to expect.

[Rodrigo Aravena, executive]

This is Rodrigo Aravena. I'd like to as 1 idea here is that it's important to keep in mind that 2021, I mean, this year will be a transitional year, and we will have a lot of uncertainty this year. So we don't know, for example, what will be the long-term impact of the Standen in key factors, key drivers of our business, for example, the long-term impact on potential growth in terms of long-term interest rates.

As I mentioned before, this year, we will have a very important discussion for the future of the country, a lot of elections, et cetera. So that's why we try to provide the most realistic guidance in terms of in terms of providing more basis, fundamentals and mentioning that, we have still a lot of uncertainty. Just to have an idea, for example, only in 2022, we will recover the GDP level that we have in 2020 the employment rate will likely remain around 10%, 10.5% during this year. So that's why we are still cautioned for this year. We acknowledge that 2021 is at all the transitional year, and we will likely have more long-term figures only in 2022.

[Pablo Ricci, executive]

In terms of dividend, we recently announced that we proposed for the shareholder meeting, a payout of 60% of distributable net income, which is in line with what we had mentioned and released a material fact in 2019 would be our level, 60% of net income payout ratio. That's the level that we reprovisioned in our equity account.

[Daer Labarta, analyst]

That's with relation to 2019 earnings, right?

[Pablo Ricci, executive]

We -- in 2019, there's a material factor. We mentioned that the level of provisions, the level that we save in terms of -- in our equity accounts, will be -- the balance sheet will be 60% of the distributable net income. So in the past 2 years, we had 70%, 70%, if I'm not mistaken, and 60% for this year, based on distributable net income.

[Daer Labarta, analyst]

So based on 2020 distributable net income, would you be paying out 60% during this year?

[Pablo Ricci, executive]

60% of distributable net income. So distributable net income, it's slightly below 50% of net income. Net income, less effective inflation on -- you get to distributable net income. And based on that, figure, 60%.

[Operator]

The next question is from [ Pia Alessandri ] with Credicorp Capital.

[Unknown Analyst]

I have 2 questions. First, it was one regarding the release program. You mentioned that as of December, you had [ 4,600,000 ] personal loans still in the program, if you could give us the amount that is related to those [ 4,600,000 ].

And the second one is regarding return on equity. Do you believe that returning to 16% ROE for 2021? It's a challenge? Or it's something realistic for the bank given the current expectation.

[Pablo Ricci, executive]

In terms of the second question, ROE for us. We think the ROE is it's still difficult based on the information that we have and the expectations and all the different variables that can occur from here to the year-end. What we're confident in is that 2021 should be a better year than 2020. Cost of risk should be lower.

We're expecting a more dynamic loan growth, which should be able to have at least a partial recovery of high-margin products that we lost in 2020, consumer loans, for example. So it's a transitional year, which we think that after this, while interest rates return more to normal levels, GDP maintained at the levels that we've seen in the past, we can return to more similar levels of ROE that we had in the past. But for 2021, there's still many uncertainties that's difficult to give you a clear answer. But what we're saying now is that we should have the best profitability ratios in Chile amongst the banks. And can you repeat the first question, please?

[Unknown Analyst]

Okay. Regarding the [indiscernible] which page of the -- okay. It's on Page 14 of the presentation, you have personal banking in the customer support plan, [ 4,600,000 ] of personal loan schedule that is as of December 2020. And if you could give us the amount considering these is [ 4,600,000 ], that's personal loan to schedule the value.

[Pablo Ricci, executive]

Okay. So the first on loans we scheduled, we had in 2020, there's different plans that were implemented in Chile to help customers reschedule personal loans, which are related to consumer loans and mortgage loans. We also help customers and credit cards as well. So what we provided customers in the second quarter of last year and the third quarter is to reschedule or defer consumer loans to -- for 3 months. And in terms of mortgage loans, we offered them the possibility that reschedule those loans for up to 6 months.

Today, the customer support plan for personal loans, for consumer loans and mortgage loans has already come due. So these customers are already paying. In terms of SME, there's about 40,000 customers that were benefited from the COVID-19 government-guaranteed loans. And for these customers, it also included a deferral plan. So of the 40,000 customers of almost 40,000 customers, about 1/3 of those customers received or began paying their first installment in December. And these customers and also the other personal banking customers are all having very good payment behavior and have been doing exceptionally well, and you can see that in the numbers that we posted in cost of risk. Our models are sensitive to early deterioration.

So our early delinquency. So if they don't pay within the first month, generally, you can see those impacts. and what we've seen and what you can see analyze is the payment behavior of the personal banking customers and SME intimates and SMEs has been very positive.

[Unknown Analyst]

So that 454,000 is the number of the loans scheduled throughout 2020, not necessarily the ones that are spending or still have every schedule?

[Pablo Ricci, executive]

So what was rescheduled at one point in time. Not what spending. Perhaps it's important to mention that in the annual report of the bank of 2020, which will be released by early March. There will be a much more information breakdown and details about all the program over-scheduled loans and other similar things.

[Rodrigo Aravena, executive]

As well as the financials, you can see in the financial statements, there's a note regarding that with the breakdown.

[Operator]

The next question is from Ernesto Gabilondo with Bank of America.

[Ernesto María Gabilondo Márquez, analyst]

Thanks for the presentation and for the opportunity to ask questions. My first question is a follow-up in the reprogram portfolio. I know that you will provide further details, but can you share with us what is the percentage of delays that you have seen so far? And for my second question, can you provide your expectations for fee income? Should we expect to grow above or in line loan growth? And I don't know this could be supported by a recovery in insurance and your alliance with Chubb? And how should we think about your effective tax rate? Then finally, when incorporating your guidance, would it be reasonable to expect a net income of around CLP 600 billion?

[Pablo Ricci, executive]

Okay. So in terms of your -- as I mentioned, in terms of your first question, so the payment behavior of customers and all the segments has been evolving very positively. So we've had a good level of payment behavior in SMEs and consumers and mortgage loans. And we're posting, as you can see in first quarter -- sorry, the fourth quarter, very low-cost of risk, which most of the cost of risk that we had was we had a level of around CLP 85 billion and CLP 80 billion was additional provisions.

So you can confirm that the payment behavior has been exceptionally well on to. So we have around -- and there's different ways to look at this. So I could tell you in 30 days, 60 days, 90 days overdue. In 30 days overdue, we have a level of close to 2% of loans that are overdue from customers who have had some sort of payment holiday. And the second question for feed, what we've seen in speed, is more transactionality and good performance in the last months, returning to more normal levels. It's like a V-shape.

So what we've been seeing is customers, as the economy continues to open. Transact more, and this has been helping our fee-based business. Obviously, we're still not at the levels that we've had prior to the crisis, but we think as the economy continues to evolve, the vaccines continue to roll out and normalization begins, we can return to those levels. So in terms of fee growth, we think that the core fee growth is around 8% for us. And that would be excluding all the Chubb fees that we had. In terms of expectations, obviously, those to be better if the economy improves faster than we expect and the market expects. The third.

[Rodrigo Aravena, executive]

And also important to consider the arrow of inflation in the future, so as Pablo mentioned, we will likely have a V-shaped recovery during this year. In the margin, we're expecting a more dynamic economy in the second half of the year. So that's why there is a possibility to have a greater economic growth, higher inflation, probably potential recovery interest rate.

But given the uncertainty, we are not providing a more specific guidance in terms of numbers for this year, especially in terms of ROE, et cetera. That's why we would like to reinforce the idea that it will be a transitional year. And on average, perhaps in some measures on average, a 2021 will be similar to 2020, but we are expecting a better performance in the future, especially the next year.

[Ernesto María Gabilondo Márquez, analyst]

And just for my question on your expectations for the effective tax rate?

[Pablo Ricci, executive]

Expectations of the tax rate with a 3% level of cost of -- sorry, of inflation. Generally, the banking industry should be around the 23%. In general, that should be the level. If there's extraordinary items in there for others, I'm not sure, but for us, 23%, with 3% interest.

[Operator]

The next question is from Claudia Benavente with Santander.

[Claudia Benavente, analyst]

So basically, I would like to know a little bit more on additional provisions. Let's suppose that we see an economic recovery? How should we see the amount of additional provisions created in 2020, not the buffer that you already have created since years ago? So basically, I would like to know if there is the likelihood that we see this amount of provisions being released? Or should we see as an additional security buffer?

[Pablo Ricci, executive]

In terms of additional provisions. These provisions were made through a large amount of these provisions were made in 2020 because of all that [indiscernible] exists in the economy. With regards to the anemic and how this is evolving. I think today, it's very early to tell how the economy will evolve, the expectations is that it should be better, but we can't roll out we can't roll out anything at this moment in time. So it's still a moment of uncertainty, and it's difficult to say the evolution of those additional provisions in the future.

[Rodrigo Aravena, executive]

So we are waiting for more information in terms of the impact of the pandemic in the economy. We don't know what will be the legacy of this crisis in the economy. So that's why today, we can rule out similar actions. But perhaps what is more important is to keep in mind the total stock of provisions that the banks have today, especially when we compare with other banks in CRE. So our cover is much better than our main competitors.

[Claudia Benavente, analyst]

No. I know what I was asking is supposing that we see an economic recovery. Should we see this created additional provisions in 2020 as something that could be released or you believe that having a 3.5x coverage ratio, it's better? Like what we need an economic recovery.

[Rodrigo Aravena, executive]

Sorry. In that case, Claudia, what we would need is a more sustainable recovery. It's almost impossible to have this year in Chile and nearly zero output gap, unemployment rate despite the recovery, we can discuss, for example, if the economy will grow this year, 5% or 6%. But in any case, that employment rate will likely remain above the levels that we saw in the past.

So that's why today, it's very difficult to answer this question because despite the potential recovery, we mean that this recovery will be sustainable. In the time without having that type of policies from the government. So I would say now that we would need more information and more signs of recovery to sustain the direction of provisions. So that's why today, we remain very docent we would like to see the quality of recovery in the beginning of the year, perhaps in the next quarter, our vision will be different, I don't know.

But according to the information that we have, so far, we remain very position and we prefer to say that we can rule out similar decisions today. Let's see what happens over the next few months.

[Operator]

This concludes the Question-and-Answer Session. At this time, I would like to turn the floor back to Banco de Chile for any closing remarks.

[Rodrigo Aravena, executive]

Okay. Thank you for participating, and we look forward to speaking with you in the next quarter, Lear earnings.

[Operator]

Thank you. This concludes today's presentation. You may disconnect your line at this time, and have a nice day.