Analyst Note| Michael Miller |
Narrow-moat rated Banco de Chile reported solid first-quarter results, comfortably beating the FactSet consensus EPS of CLP 1.42 per share with reported earnings of CLP 1.61 per share. First-quarter net income was CLP 162 billion, up 29% sequentially and up 19% on a year-over-year basis. Coronavirus cases in Chile began to rise during the quarter, and some lockdown restrictions were put into place in March and April. However, with around 40% of the Chilean population fully vaccinated, we are increasingly seeing evidence of a broad-based economic recovery. First-quarter results were driven by recovering fee income, significantly lower credit costs, and controlled expenses. We do not expect to change our fair value estimate of $23.00 per ADR share.