Banco de Chile (NYSE:BCH) posted a strong second-quarter net income of CLP 391 billion, fueled by robust inflation-linked revenue, consistent fee growth, and stringent cost management, even as the institution bolstered loan-loss provisions to hedge against an uncertain macroeconomic landscape.
Financial Performance and Revenue Drivers
The bank’s operating revenue climbed 20.9% year-over-year to CLP 922 billion. Profitability remained high, with a 27.9% return on average equity for the quarter. Pablo Mejía Ricci, Head of Investor Relations, attributed the success to a 5.8% net interest margin and disciplined expense control. Net financial income reached CLP 736 billion, a 25.3% increase compared to the previous year.
A significant factor in these results was higher inflation. The UF variation hit 2.5% in Q2, compared to 1% in the same period of 2025, providing a tailwind for the bank’s inflation-indexed balance sheet, which held a UF gap of approximately CLP 9.1 trillion as of June.
Customer Engagement and Lending Trends
Customer income remained resilient at CLP 473 billion, supported by improved lending spreads across consumer and commercial sectors. Net fee income rose 10.7%, driven largely by a 20.4% surge in transactional-services fees, while credit and debit card transactions increased by 5.7% and 11.9%, respectively.
By the end of the quarter, the bank served 2.9 million active customers. Current accounts grew by 7.1% year-over-year, and the company reported a strong net promoter score of 77.6%.
Total loans reached CLP 40.3 trillion in June, reflecting a 2.3% annual increase. This figure accounts for a one-time migration effect of the bank’s outsourced credit-card processing platform, which reduced reported loan balances by CLP 210 billion. On a pro forma basis, total loans would have risen by 2.9%, with consumer loans growing by 5.3%, mortgages by 3.4%, and commercial loans by 2%.
Capitalization and Risk Management
Banco de Chile maintains a competitive edge through its deposit franchise, holding a 19.7% market share of local-currency demand deposits. Demand deposits accounted for 26% of total funding, with a loan-to-deposit ratio that management describes as the strongest among its major peers.
The Basel III total capital ratio stands at 17.6%, with a CET1 ratio of 13.9%. Daniel Galarce, head of financial control and capital management, confirmed the bank’s intent to maintain a capital buffer 100 to 200 basis points above regulatory requirements, while upholding a dividend payout target of approximately 60%.
To navigate geopolitical and domestic economic risks, the bank increased total expected credit losses to CLP 165 billion, including CLP 50 billion in additional provisions established in May. While the quarterly cost of risk sat at 1.65%, it would have been 1.15% excluding these conservative, forward-looking allowances.
Operational Efficiency and 2026 Outlook
Efficiency remains a priority, with operating expenses rising only 2.8%—well below inflation—despite ongoing investments in digital infrastructure. The efficiency ratio for the quarter was 31.3%. The bank also optimized its physical footprint, reducing the number of branches by 4.5% while increasing loans per employee by 1.7%.
Reflecting on a weaker-than-expected first half, the bank adjusted its 2026 nominal loan-growth outlook to 6% and improved its full-year efficiency-ratio forecast to 37%. Rodrigo Aravena, Chief Economist, lowered the bank’s 2026 GDP growth forecast for Chile to 1.3% due to mining-sector stagnation, though he anticipates a recovery to 2% in the second half of the year and 3% in 2027.
Strategic Partnerships and Future Growth
The bank is actively expanding its ecosystem through new commercial alliances, including vehicle financing with Linze, a travel-loyalty partnership with Despegar, and a digital factoring initiative with Fingo. Furthermore, the launch of “B Startup” aims to capture the emerging market of science and technology-based companies in collaboration with AWS and UDD Ventures.
Looking toward 2027, management expects improved economic conditions to drive loan growth of 7% to 8%, with net interest margins projected to stabilize between 4.5% and 4.7%.
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