Analyst Note| Eric Compton, CFA |
Narrow-moat rated Banco de Chile reported fourth-quarter earnings of CLP 126 billion, up 43% sequentially, beating the Factset consensus EPS of CLP 1.15 per share with reported EPS of CLP 1.25 per share. These results equate to a return on average equity of 13.70%. The fourth-quarter results were driven by recovering net interest income, improved credit cost, and controlled expenses. As we more fully incorporate these results, we don't expect to materially change our longer-term forecasts, but time value of money and a more favorable exchange rate are likely to help push our current fair value estimate of $18.00 per ADR share higher by a mid-single-digit percentage.