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Banco De Chile ADR BCH

Morningstar Rating
$22.11 −0.62 (2.73%)
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Company Report

Banco de Chile Earnings: Strong Results Benefited From High Inflation Adjustment Income

Narrow-moat-rated Banco de Chile reported solid fourth-quarter earnings, though results did benefit from surprisingly high inflation readjustment income, which we do not expect to persist as inflation in Chile has now fallen into the low single digits. The bank’s net revenue increased 7.2% from last year to CLP 805 billion. Meanwhile, net income increased 11% from last year and 48% from last quarter to CLP 386 billion. These results translate to a return on average equity from 30.2%, well above both the bank’s peers and its historical average. However, these strong results did benefit from temporary economic factors, and as we incorporate these results, we do not plan to materially alter our fair value estimate or $21 per ADR share for Banco de Chile.

Price vs Fair Value

BCH is trading at a 5% premium.
Price
$22.11
Fair Value
$85.00
Uncertainty
Medium
1-Star Price
$92.93
5-Star Price
$94.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Banco de Chile has the lowest cost of funding in Chile. This stable deposit base has been cultivated over many years and is a major contributor to the bank's impressive returns.

Bears

Banco de Chile's impressive results are subject to the macroeconomic health of Chile, and high inflation and high interest rates could drive credit costs higher and loan growth lower.

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News

Trading Information

Previous Close Price
$22.73
Day Range
$22.0722.69
52-Week Range
$17.9624.10
Bid/Ask
$21.87 / $22.75
Market Cap
$11.17 Bil
Volume/Avg
275,753 / 130,917

Key Statistics

Price/Earnings (Normalized)
8.26
Price/Sales
3.34
Dividend Yield (Trailing)
9.71%
Dividend Yield (Forward)
9.71%
Total Yield
9.71%

Company Profile

Operating under three separate brand names (Banco de Chile, Banco Edwards-Citi, and Banco CrediChile) Banco de Chile is the second largest in the country by loans and third largest by deposits. Banco de Chile generates most of its net interest income (roughly 60% of total revenue) from its mortgage, unsecured consumer credit lines, and commercial loans, with 25% of its outstanding loans being made to firms with more than 10,000 million CLP in revenue. Outside of its banking business, Banco de Chile is the largest asset manager in the country and one of the largest security brokerages, supporting its substantial fee-based revenue.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Large Core
Total Number of Employees
12,217

Competitors

Valuation

Metric
BCH
BBVA
ITUB
Price/Earnings (Normalized)
8.268.849.53
Price/Book Value
1.991.011.84
Price/Sales
3.341.922.26
Price/Cash Flow
5.063.515.09
Price/Earnings
BCH
BBVA
ITUB

Financial Strength

Metric
BCH
BBVA
ITUB
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
BCH
BBVA
ITUB
Return on Assets (Normalized)
2.26%1.07%1.44%
Return on Equity (Normalized)
25.13%16.35%19.76%
Return on Invested Capital (Normalized)
Return on Assets
BCH
BBVA
ITUB
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Economic Moat
Market Cap
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LYG
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BBD
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DB
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