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Banco de Chile delivered Q1 2026 net income of CLP 268.6 billion, down 18.3% year-over-year as lower inflation-linked revenues and higher credit loss provisions weighed on results. Core business momentum remained intact, with loan growth accelerating to +2.6% quarter-over-quarter and fee income rising 6.9% year-over-year, while the efficiency ratio improved to a best-in-class 38.4%.
Performance Highlights
Banco de Chile reported Q1 2026 net income of CLP 268.6 billion, an 18.3% year-over-year decline versus CLP 328.9 billion in Q1 2025, as normalizing inflation headwinds compressed total operating revenues to CLP 748.9 billion, down 3.9% year-over-year. The results came in below prior-year comparatives, reflecting the significant drag from lower UF variation of just 0.3% in Q1 2026 versus 1.2% in Q1 2025, which reduced non-customer financial income by 43.5%.
Despite the revenue decline, the bank maintained a strong ROAE of 18.2% and a best-in-class efficiency ratio of 38.4%, demonstrating the resilience of its core franchise. Total loans reached CLP 40.2 trillion, up 2.6% quarter-over-quarter, led by consumer loan originations rising 16% year-over-year and SME installment commercial originations up 18% year-over-year, while fee income grew 6.9% supported by 2.9 million active customers and a 22% year-over-year increase in FAN digital accounts.
Management Outlook and Forward Catalysts
Management reaffirmed full-year 2026 guidance targeting approximately 7% nominal loan growth, a net interest margin of approximately 4.6%, cost of risk in the 1.1–1.2% range, an efficiency ratio of approximately 38%, and ROAE of 21.5–22.5%, contingent on no further escalation of geopolitical tensions. The guidance signals confidence in a business recovery trajectory as inflation stabilizes around 4.3% for the full year and the overnight rate holds at 4.50%, supporting gradual margin normalization.
The central investor debate for Q2 2026 centers on whether structural NIM can recover toward the 4.6% full-year target as the UF-linked income base normalizes and loan volume growth accelerates. Bulls will focus on the bank's best-in-class capital position with CET1 at 13.3%, disciplined zero real cost growth, and fee momentum, while bears will monitor whether cost of risk, which rose to 1.16% in Q1, remains contained within the 1.1–1.2% guided band amid a Chile GDP growth slowdown to 2.1%.
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