BCH 6-K, filed Apr 30, 2020, 0001213900-20-010486

FORM 6-K

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

Reportof Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of April, 2020

Commission File Number 001-15266

BANKOF CHILE

(Translation of registrant’s name into English)

Ahumada251

Santiago,Chile

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐ No ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________

BANCO DE CHILE

REPORT ON FORM 6-K

Attached Banco de Chile’s Consolidated Financial Statements with notes as of March 31, 2020.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 29, 2020

	Banco de Chile
By:	/s/ Eduardo Ebensperger O.
	Eduardo Ebensperger O.<br><br> <br>CEO

Exhibit 99.1

BANCO DE CHILE AND SUBSIDIARIES

(Free translation of Consolidated Financial Statements originally issued in Spanish)

INDEX

I.	Interim Consolidated Statements of Financial Position
II.	Interim Consolidated Statements of Income
III.	Interim Consolidated Statements of Other Comprehensive Income
IV.	Interim Consolidated Statements of Changes in Equity
V.	Interim Consolidated Statements of Cash Flows
VI.	Notes to the Interim Consolidated Financial Statements
MCh$	=	Millions of Chilean pesos
---	---	---
ThUS$	=	Thousands of U.S. dollars
UF or CLF	=	Unidad de Fomento
		(The UF is an inflation-indexed, Chilean peso denominated monetary unit set daily in advance on the basis of the previous month’s inflation rate).
Ch$ or CLP	=	Chilean pesos
US$ or USD	=	U.S. dollar
JPY	=	Japanese yen
EUR	=	Euro
HKD	=	Hong Kong dollar
CHF	=	Swiss Franc
PEN	=	Peruvian sol
AUD	=	Australian dollar
NOK	=	Norwegian krone
IFRS	=	International Financial Reporting Standards
IAS	=	International Accounting Standards
RAN	=	Actualized Standards Compilation of the Chilean Commission for Financial Market (“CMF”)
IFRIC	=	International Financial Reporting Interpretations Committee
SIC	=	Standards Interpretation Committee

BANCO DE CHILE AND SUBSIDIARIES

INDEX

		Page
Interim Consolidated Statement of Financial Position		1
Interim Consolidated Statements of Income		2
Interim Consolidated Statements of Other Comprehensive Income		3
Consolidated Statement of Changes in Equity		4
Interim Consolidated Statements of Cash Flows		5
1.	Company information:	6
2.	Legal regulations, basis of preparation and Other information:	7
3.	New Accounting Pronouncements:	10
4.	Changes in Accounting Policies and Disclosures:	14
5.	Relevant Events:	15
6.	Business Segments:	18
7.	Cash and Cash Equivalents:	21
8.	Financial Assets Held-for-trading:	22
9.	Investments under resale agreements and obligations under repurchase agreements:	23
10.	Derivative Instruments and Accounting Hedges:	25
11.	Loans and Advances to Banks, net:	31
12.	Loans to Customers, net:	32
13.	Investment Securities:	38
14.	Investments in Other Companies:	40
15.	Intangible Assets:	42
16.	Fixed assets, leased assets and lease liabilities:	44
17.	Current Taxes and Deferred Taxes:	49
18.	Other Assets:	53
19.	Current Accounts and Other Demand Deposits:	54
20.	Savings Accounts and Time Deposits:	54
21.	Borrowings from Financial Institutions:	55
22.	Debt Issued:	56
23.	Other Financial Obligations:	59
24.	Provisions:	59
25.	Other Liabilities:	63
26.	Contingencies and Commitments:	64
27.	Equity:	69
28.	Interest Revenue and Expenses:	72
29.	Income and Expenses from Fees and Commissions:	74
30.	Net Financial Operating Income:	75
31.	Foreign Exchange Transactions, Net:	75
32.	Provisions for Loan Losses:	76
33.	Personnel Expenses:	77
34.	Administrative Expenses:	78
35.	Depreciation, Amortization and Impairment:	79
36.	Other Operating Income:	80
37.	Other Operating Expenses:	81
38.	Related Party Transactions:	82
39.	Fair Value of Financial Assets and Liabilities:	87
40.	Maturity of Assets and Liabilities:	100
41.	Subsequent Events:	102

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATEDSTATEMENTS OF FINANCIAL POSITION

For the periods ended March 31, 2020 and December 31, 2019

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

(Expressed in million of Chilean pesos)

		March			December
	Notes	2020			2019
		MCh$			MCh$
ASSETS
Cash and due from banks	7		2,780,469			2,392,166
Transactions in the course of collection	7		520,711			584,672
Financial assets held-for-trading	8		1,690,563			1,872,355
Investment under resale agreements	9		55,441			142,329
Derivative instruments	10		4,757,187			2,786,215
Loans and advances to banks	11		1,342,754			1,139,433
Loans to customers, net	12		30,156,969			29,334,052
Financial assets available-for-sale	13		1,632,229			1,357,846
Financial assets held-to-maturity	13		—			—
Investments in other companies	14		52,647			50,758
Intangible assets	15		58,763			58,307
Property and equipment	16		225,135			220,262
Leased assets	16		145,728			150,665
Current tax assets	17		1,567			357
Deferred tax assets	17		316,599			320,948
Other assets	18		1,059,936			862,968
TOTAL ASSETS			44,796,698			41,273,333
LIABILITIES
Current accounts and other demand deposits	19		11,869,854			11,326,133
Transactions in the course of payment	7		482,664			352,121
Obligations under repurchase agreements	9		345,808			308,734
Savings accounts and time deposits	20		11,469,658			10,856,618
Derivative instruments	10		4,721,257			2,818,121
Borrowings from financial institutions	21		1,703,821			1,563,277
Debt issued	22		9,224,225			8,813,414
Other financial obligations	23		121,674			156,229
Lease liabilities	16		141,434			146,013
Current tax liabilities	17		66,545			76,289
Deferred tax liabilities	17		242			—
Provisions	24		419,044			684,663
Other liabilities	25		679,580			643,498
TOTAL LIABILITIES			41,245,806			37,745,110
EQUITY	27
Attributable to Bank’s Owners:
Capital			2,418,833			2,418,833
Reserves			703,331			703,272
Other comprehensive income			(62,327	)		(56,601	)
Retained earnings:
Retained earnings from previous years			412,641			170,171
Income for the period			136,882			593,008
Less:
Provision for minimum dividends			(58,469	)		(300,461	)
Subtotal			3,550,891			3,528,222
Non-controlling interests			1			1
TOTAL EQUITY			3,550,892			3,528,223
TOTAL LIABILITIES AND EQUITY			44,796,698			41,273,333

The accompanying notes 1 to 41 are an integral part of these interim consolidated financial statements

BANCODE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF INCOME

For the three-month ended March 31, 2020 and 2019

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

(Expressed in million of Chilean pesos)

		March			March
	Notes	2020			2019
		MCh$			MCh$
Interest revenue	28		554,274			430,654
Interest expense	28		(204,577	)		(129,684	)
Net interest income			349,697			300,970
Income from fees and commissions	29		161,671			134,223
Expenses from fees and commissions	29		(36,200	)		(30,813	)
Net fees and commission income			125,471			103,410
Net financial operating income	30		9,154			8,566
Foreign exchange transactions, net	31		19,380			16,117
Other operating income	36		9,391			15,533
Total operating revenues			513,093			444,596
Provisions for loan losses	32		(125,560	)		(89,156	)
OPERATING REVENUES, NET OF PROVISIONS FOR LOAN LOSSES			387,533			355,440
Personnel expenses	33		(107,043	)		(113,555	)
Administrative expenses	34		(82,688	)		(78,994	)
Depreciation and amortization	35		(18,469	)		(17,203	)
Impairment	35		—			(6	)
Other operating expenses	37		(12,093	)		(11,066	)
TOTAL OPERATING EXPENSES			(220,293	)		(220,824	)
NET OPERATING INCOME			167,240			134,616
Income attributable to associates	14		1,895			1,110
Income before income tax			169,135			135,726
Income tax	17		(32,253	)		(34,189	)
NET INCOME FOR THE PERIOD			136,882			101,537
Attributable to:
Bank’s Owners	27		136,882			101,537
Non-controlling interests			—			—
Net income per share attributable to Bank’s Owners:			Ch$			Ch$
Basic net income per share	27		1.36			1.01
Diluted net income per share	27		1.36			1.01

The accompanying notes 1 to 41 are an integral part of these interim consolidated financial statements

BANCODE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF

OTHER COMPREHENSIVE INCOME

For the three-month ended March 31, 2020 and 2019

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

(Expressed in million of Chilean pesos)

		March			March
		2020			2019
	Notes	MCh$			MCh$
NET INCOME FOR THE PERIOD			136,882			101,537
OTHER COMPREHENSIVE INCOME THAT WILL BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS
Net gains (losses) on available-for-sale instruments valuation	13		(9,768	)		8,836
Net gains (losses) on derivatives held as cash flow hedges	10		1,935			889
Subtotal Other comprehensive income before income taxes			(7,833	)		9,725
Income tax relating to the components of other comprehensive income that are reclassified in income for the period			2,107			(2,643	)
Total other comprehensive income items that will be reclassified subsequently to profit or loss			(5,726	)		7,082
OTHER COMPREHENSIVE INCOME THAT WILL NOT BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS
Adjustment for defined benefit plans	24		81			—
Subtotal other comprehensive income before income taxes			81			—
Income tax relating to the components of other comprehensive income that will not be reclassified to income for the period	17		(22	)		—
Total other comprehensive income items that will not be reclassified subsequently to profit or loss			59			—
CONSOLIDATEDCOMPREHENSIVE INCOME FOR THE PERIOD			131,215			108,619
Attributable to:
Bank’s Owners			131,215			108,619
Non-controlling interests			—			—

The accompanying notes 1 to 41 are an integral part of these interim consolidated financial statements

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CHANGESIN EQUITY

For the three-month ended March 31, 2020 and 2019

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

(Expressed in millions of Chilean pesos)

				Reserves					Other<br> comprehensive income									Retained<br> earnings
	Notes	Paid-in<br><br> Capital		Other<br> <br> reserves			Reserves<br> <br> from <br> earnings		Unrealized<br> <br> gains <br> (losses) on <br> available-for-sale			Derivatives<br> <br> cash flow <br> hedge			Income<br> <br> Tax			Retained<br> <br> earnings from <br> previous <br> period			Income<br> <br> (losses) for <br> the period			Provision<br> for <br> minimum <br> dividends			Attributable<br> <br> to equity <br> holders of the <br> parent			Non-<br><br> controlling <br> interest		Total<br> equity
		MCh$		MCh$			MCh$		MCh$			MCh$						MCh$			MCh$			MCh$			MCh$			MCh$		MCh$

Balances as of December 31, 2018			2,418,833		31,961			585,636		(9,936	)		(43,494	)		14,208			17,481			594,872			(305,409	)		3,304,152			1		3,304,153
Retention of profits			—		—			—		—			—			—			152,705			(152,705	)		—			—			—		—
Retention (release) of profits according to bylaws			—		—			85,856		—			—			—			—			(85,856	)		—			—			—		—
Dividends distributions and paid	27		—		—			—		—			—			—			—			(356,311	)		305,409			(50,902	)		—		(50,902	)
Equity effect change in accounting policy			—		—			—		—			—			—			2			—			—			2			—		2
Other comprehensive income:
Derivatives cash flow hedge	27		—		—			—		—			889			(240	)		—			—			—			649			—		649
Valuation adjustment on available-for-sale instruments	27		—		—			—		8,836			—			(2,403	)		—			—			—			6,433			—		6,433
Income for the period 2019	27		—		—			—		—			—			—			—			101,537			—			101,537			—		101,537
Provision for minimum dividends			—		—			—		—			—			—			—			—			(60,922	)		(60,922	)		—		(60,922	)
Balances as of March 31, 2019			2,418,833		31,961			671,492		(1,100	)		(42,605	)		11,565			170,188			101,537			(60,922	)		3,300,949			1		3,300,950
Equity effect change in accounting policy			—		—			—		—			—			—			(17	)		—			—			(17	)		—		(17	)
Other comprehensive income:
Defined benefit plans adjustment, net			—		(181	)		—		—			—			—			—			—			—			(181	)		—		(181	)
Derivatives cash flow hedge			—		—			—		—			(38,435	)		10,378			—			—			—			(28,057	)		—		(28,057	)
Valuation adjustment on available-for-sale instruments			—		—			—		4,927			—			(1,331	)		—			—			—			3,596			—		3,596
Income for the period 2019			—		—			—		—			—			—			—			491,471			—			491,471			—		491,471
Provision for minimum dividends			—		—			—		—			—			—			—			—			(239,539	)		(239,539	)		—		(239,539	)
Balances as of December 31, 2019			2,418,833		31,780			671,492		3,827			(81,040	)		20,612			170,171			593,008			(300,461	)		3,528,222			1		3,528,223
Retention of profits			—		—			—		—			—			—			242,470			(242,470	)		—			—			—		—
Dividends distributions and paid	27		—		—			—		—			—			—			—			(350,538	)		300,461			(50,077	)		—		(50,077	)
Other comprehensive income:
Defined benefit plans adjustment, net			—		59			—		—			—			—			—			—			—			59			—		59
Derivatives cash flow hedge, net	27		—		—			—		—			1,935			(521	)		—			—			—			1,414			—		1,414
Valuation adjustment on available-for-sale instruments	27		—		—			—		(9,768	)		—			2,628			—			—			—			(7,140	)		—		(7,140	)
Income for the period 2020	27		—		—			—		—			—			—			—			136,882			—			136,882			—		136,882
Provision for minimum dividends	27		—		—			—		—			—			—			—			—			(58,469	)		(58,469	)		—		(58,469	)
Balancesas of March 31, 2020			2,418,833		31,839			671,492		(5,941	)		(79,105	)		22,719			412,641			136,882			(58,469	)		3,550,891			1		3,550,892

The accompanying notes 1 to 41 are an integral part of these interim consolidated financial statements

BANCODE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASHFLOWS

For the three-month ended March 31, 2020 and 2019

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

(Expressed in million of Chilean pesos)

		March			March
		2020			2019
	Notes	MCh$			MCh$
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the period			136,882			101,537
Charges (credits) to income that do not represent cash flows:
Depreciation and amortization	35		18,469			17,203
Impairment	35		—			6
Provision for loans and accounts receivable from customers and owed by banks	32		128,356			100,412
Provision of contingent loans	32		7,007			884
Fair value adjustment of financial assets held-for-trading			1,016			(1,029	)
Changes in assets and liabilities by deferred taxes	17		7,197			(1,019	)
(Gain) loss attributable to investments in companies with significant influence, net	14		(1,876	)		(1,110	)
(Gain) loss from sales of assets received in lieu of payment,net	36		(1,361	)		(4,503	)
(Gain) loss on sales of property and equipment, net	36		(18	)		(31	)
Charge-offs of assets received in lieu of payment	37		1,245			2,623
Other charges (credits) to income that do not represent cash flows			2,695			4,021
Net changes in exchange rate, interest and fees accrued on assets and liabilities			144,753			18,362
Changes in assets and liabilities that affect operating cash flows:
(Increase) decrease in loans and advances to banks, net			(203,433	)		578,924
(Increase) decrease in loans to customers			(866,758	)		(413,306	)
(Increase) decrease in financial assets held-for-trading, net			(69,749	)		(78,625	)
(Increase) decrease in other assets and liabilities			(273,963	)		85,193
Increase (decrease) in current account and other demand deposits			543,498			16,786
Increase (decrease) in transactions from reverse repurchase agreements			35,540			(11,677	)
Increase (decrease) in savings accounts and time deposits			630,811			602,676
Sale of assets received in lieu of payment or adjudicated			4,310			9,115
Total cash flows from operating activities			244,621			1,026,442
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in financial assets available-for-sale, net			(283,201	)		(264,952	)
Payments for lease agreements	16		(7,509	)		(6,116	)
Net changes in leased assets	16		(419	)		(1,352	)
Purchases of property and equipment	16		(11,999	)		(12,950	)
Sales of property and equipment			18			31
Acquisition of intangible assets	15		(4,238	)		(3,799	)
Acquisition of investments in companies	14		—			—
Dividends received from investments in companies	14		19			—
Total cash flows from investing activities			(307,329	)		(289,138	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of letters of credit			(670	)		(981	)
Issuance of bonds	22		459,510			281,884
Redemption of bonds			(334,388	)		(316,050	)
Dividends paid	27		(350,538	)		(356,311	)
Increase (decrease) in borrowings from foreign financial institutions			142,618			(141,254	)
Increase (decrease) in other financial obligations			(34,421	)		(6,596	)
Payment of other long-term borrowings			(147	)		(532	)
Total cash flows from financing activities			(118,036	)		(539,840	)
TOTAL NET POSITIVE CASH FLOWS FOR THE PERIOD			(180,744	)		197,464
Effect of exchange rate changes			34,299			8,673
Cash and cash equivalents at beginning of period			3,931,371			2,256,375
Cash and cash equivalents at end of period	7		3,784,926			2,462,512
	March		March
---	---	---	---	---	---
	2020		2019
	MCh$		MCh$
Operational Cash flow interest:
Interest received		466,572		489,275
Interest paid		62,177		(161,270	)

The accompanying notes 1 to 41 are an integral part of these interim consolidated financial statements

BANCO DE CHILE AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

1.	Company information:

Banco de Chile is authorized to operate as a commercial bank since September 17, 1996, being, in conformity with the stipulations of article 25 of Law No. 19,396, the legal continuation of Banco de Chile resulting from the merger of the Banco Nacional de Chile, Banco Agrícola and Banco de Valparaiso, which was constituted by public deed dated October 28, 1893, granted before the Notary Public of Santiago, Mr. Eduardo Reyes Lavalle, authorized by Supreme Decree of November 28, 1893.

Banco de Chile (or the “Bank”) is a Corporation organized under the laws of the Republic of Chile, regulated by the Chilean Commission for the Financial Market (“CMF”), in accordance with the established in the Law 21,130 dated January 12, 2019, which ordered the integration of the Superintendency of Banks and Financial Institutions (“SBIF”) with the Commission for the Financial Market as of June 1, 2019. Since 2001, it is subject to the supervision of the Securities and Exchange Commission of the United States of America (“SEC”), in consideration of the fact that the Bank is registered on the New York Stock Exchange (“NYSE”), through a program of American Depositary Receipt (“ADR”).

Banco de Chile offers a broad range of banking services to its customers, ranging from individuals to large corporations. Additionally, the Bank offers international as well as treasury banking services, in addition to those offered by subsidiaries that include securities brokerage, mutual fund and investment management, insurance brokerage, financial advisory services and securitization.

Banco de Chile’s legal address is Ahumada 251, Santiago, Chile and its website is www.bancochile.cl.

The Interim Consolidated Financial Statements of Banco de Chile, for the period ended March 31, 2020 were approved by the Directors on April 29, 2020.

NOTES TO THE INTERIM CONSOLIDATEDFINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

2.	Legal regulations, basis of preparation and Other information:
(a)	Legal regulations:
---	---

The Law 21,000 that creates the CMF, in its article 5, empowers it to issue accounting standards of general application for entities it supervises. The Corporations Law, in turn, requires following the generally accepted accounting principles.

Based on the aforementioned laws, banks should use the criteria provided by the Compendium of Accounting Standards (“Compendium”), and any matter not addressed therein, as long as it does not contradict its instructions, should adhere to generally accepted accounting principles standards issued by the Chilean Association of Accountants (Colegio de Contadores de Chile A.G.), that coincide with the International Financial Reporting Standards (“IFRS”) agreed upon by the International Accounting Standards Board (“IASB”). Should there be discrepancies between these generally accepted accounting principles and the accounting criteria issued by the CMF, the latter shall prevail.

(b)	Basis of preparation:

(b.1)	These Interim Consolidated Financial Statements are presented according to Chapter C-2 of the Compendium<br>of Accounting Standards, issued by the CMF.
(b.2)	The following table details the entities in which the Bank has control and are part of this consolidated<br>financial statements:
---	---
								Interest<br> Owned
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
								Direct								Indirect								Total
						Functional		March				December				March				December				March				December
RUT		Subsidiaries		Country		Currency		2020				2019				2020				2019				2020				2019
								%				%				%				%				%				%
96,767,630-6		Banchile Administradora General de Fondos S.A.		Chile		Ch$			99.98				99.98				0.02				0.02				100.00				100.00
96,543,250-7		Banchile Asesoría Financiera S.A.		Chile		Ch$			99.96				99.96				—				—				99.96				99.96
77,191,070-K		Banchile Corredores de Seguros Ltda.		Chile		Ch$			99.83				99.83				0.17				0.17				100.00				100.00
96,571,220-8		Banchile Corredores de Bolsa S.A.		Chile		Ch$			99.70				99.70				0.30				0.30				100.00				100.00
96,932,010-K		Banchile Securitizadora S.A.		Chile		Ch$			99.01				99.01				0.99				0.99				100.00				100.00
96,645,790-2		Socofin S.A.		Chile		Ch$			99.00				99.00				1.00				1.00				100.00				100.00

NOTES TO THE INTERIM CONSOLIDATEDFINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

2.	Legal regulations, basis of preparation and Otherinformation, continued:

(c)	Use of estimates and judgments:

Preparing the Interim Consolidated Financial Statements requires the Bank’s Management to make judgments, estimations and assumptions that affect the application of accounting policies and the valuation of assets, liabilities, income and expenses presented. Actual results could differ from these estimated amounts. These estimates refer to:

1.	Provision for loan losses (Notes No. 11, No. 12 and No. 32);
2.	Useful life of intangible, property and equipment and leased assets and lease liabilities (Notes<br>No.15 and No.16);
---	---
3.	Income taxes and deferred taxes (Note No. 17);
---	---
4.	Provisions (Note No. 24);
---	---
5.	Contingencies and Commitments (Note No. 26);
---	---
6.	Fair value of financial assets and liabilities (Note<br>No. 39).
---	---

Estimates and relevant assumptions are regularly reviewed by the management of the Bank, according to quantify certain assets, liabilities, gains, loss and commitments. Estimates reviewed are registered in income in the period that the estimate is reviewed.

As of March 31, there have been no significant changes in the estimates made.

(d)	Seasonality or Cyclical Character of the Transactionsof the Intermediate Period:

Given the activities to which the Bank and its subsidiaries are engaged, the transactions of the Bank do not have a cyclical or seasonal nature. For this reason, specific breakdowns in these notes to the Interim Consolidated Financial Statements for the three-month period ended March 31, 2020 are not included.

(e)	Relative Importance:

In determining the information to be disclosed on the different items of the financial statements or other matters, the relative importance in relation to the Financial Statements of the period has been taken into account.

(f)	Leases:

The Bank acts as a lessor

Assets that are leased to clients under contracts that substantially transfer all risks and property recognition, with or without legal title, are classified as a financial lease. When the retained assets are subject to a financial leasing, the leased assets are no longer recognized and are recorded an account receivable, which is equal to the minimum value of the lease payment, discounted at the interest rate of the lease. The initial negotiation expenses in a financial lease are incorporated into the account receivable through the discount rate applied to the lease. Lease income is recognized on lease terms based on a model that consistently reflects a periodic rate of return on the net investment of the lease.

NOTES TO THE INTERIM CONSOLIDATEDFINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

2.	Legal regulations, basis of preparation and Otherinformation, continued:

Assets that are leased to customers under contracts that do not transfer substantially all the risks and benefits of the property are classified as an operating lease.

The leased investment properties, under the operating lease modality, are included in “Other assets” in the statement of financial position and depreciation is determined on the book value of these assets, applying a proportion of the value in a systematic way on the economic use of the estimated useful life. Lease income is recognized on a straight-line basis over the lease period.

The Bank acts as a lessee

A contract is or contains a lease if it has the right to control the use of an identified asset for a period of time in exchange for a consideration.

At the start date of a lease, an asset is determined by right of use of the leased asset at cost, which comprises the amount of the initial measurement of the lease liability plus other disbursements made.

The amount of the lease liability is measured at the present value of future lease payments that have not been paid on that date, which are discounted using the Bank’s incremental financing interest.

The right-of-use asset is measured using the cost model less accumulated depreciation and accumulated impairment losses. The depreciation of the right-of-use asset is recognized in the Income Statement based on the straight-line method of depreciation from the start date and until the end of the term of the lease.

As established by the Circular No. 3,649 of the CMF, the monthly variation of the UF for the contracts established in said monetary unit should be treated as a new measurement, therefore the value effect of this monetary unit as a result of the change in the Consumer Price Index (CPI) modifies the value of the lease liability and in parallel, the amount of the asset for the right to use leased assets must be adjusted for this effect.

After the start date, the lease liability is measured by reducing the carrying amount to reflect the lease payments made and the lease contract modifications.

According to IFRS 16 “Leases”, the bank does not apply this standard to contracts with duration of 12 months or less and those that contain a low value underlying asset. In these cases, the payments are recognized as a lease expense.

(g)	Reclassifications:

There have not been significant reclassifications at the end of this period 2020.

NOTES TO THE INTERIM CONSOLIDATEDFINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

3.	New Accounting Pronouncements:

3.1 Standards approved and/ormodified by the International Accounting Standards Board (IASB) and by the Chilean Commission for the Financial Market (CMF):

3.1.1 Standards and interpretationsthat have been adopted in these Interim Consolidated Financial Statements.

As of the date of issuance of these Interim Consolidated Financial Statements, the new accounting pronouncements issued by both the International Accounting Standards Board and the CMF, which have been adopted by the Bank and its subsidiaries, are detailed below:

Accounting standards issuedby IASB.

Conceptual Framework.

On March 29, 2018, the IASB issued a “Reviewed” Conceptual Framework. Changes to the Conceptual Framework may affect the application of IFRS when no rule applies to a particular transaction or event.

The Conceptual Framework introduces mainly the following improvements:

-	It incorporates some new concepts of measurement, presentation and disclosure and derecognition<br>of assets and liabilities in the Financial Statements.
-	Provides updated definitions of assets, liabilities and includes criteria for the recognition of<br>assets and liabilities in the financial statements.
---	---
-	Clarifies some important concepts such as background on form, prudential criteria and measurement<br>of uncertainty.
---	---

These improvements had no impact on the Consolidated Financial Statements of Banco de Chile and its subsidiaries.

IAS 1 Presentation of Financial Statements and IAS8 Accounting Policies, Changes in Accounting Estimates and Errors. Definition of materiality or relative importance.

The IASB issued changes to IAS 1, Presentation of Financial Statements, and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, to clarify the definition of materiality and align these standards with the Revised Conceptual Framework issued in March 2018, to facilitate companies to make materiality judgments.

Under the old definition omissions or misrepresentations of elements are important if they could, individually or collectively, influence the economic decisions that users make on the basis of financial statements (IAS 1 Presentation of Financial Statements).

The new definition states that information is material if the omission, distortion or concealment of the information can reasonably be expected to influence decisions that primary users of financial statements of general purpose make on the basis of those financial statements, which provide financial information about a specific reporting entity.

NOTES TO THE INTERIM CONSOLIDATEDFINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

3.	New Accounting Pronouncements, continued:

This amendment had no impact on the Consolidated Financial Statements of Banco de Chile and its subsidiaries.

IFRS 9 Financial Instruments,IFRS 7 Financial Instruments: Disclosures and IAS 39 Financial Instruments: Recognition and Measurement. Interest rate benchmarkreform.

In September 2019, the IASB issued amendments to IFRS 9, IFRS 7 and IAS 39, as a result of the IBOR (Interbank Offered Rate) reform, which results in the replacement of existing reference interest rates, by alternative interest rates.

The amendments provide temporary application exceptions that allow hedge accounting to continue during the uncertainty period, prior to the replacement of existing reference interest rates.

This amendment had no impact on the Consolidated Financial Statements of Banco de Chile and its subsidiaries.

Accounting Standards issuedby the CMF.

Circular No. 2,247.

On March 25, 2020, the CMF published this circular, which incorporated modifications to Chapter 10-1 “Assets received or awarded in payment of obligations” of the RAN.

The transitory standard establishes an additional term of up to 18 months to dispose of the assets, in the case of assets that have been received or awarded lieu of payment from March 1, 2019 to September 30, 2020.

The standard also authorizes banks to make use of this additional period, so that the charge-offs that they must currently carry out at 12 months is carried out in installments, at least a proportion of the value of the property must be charge-off, equivalent to the relationship between the number of months elapsed from the date of receipt and the number of months between that date and that the bank sets for its disposal under the additional term granted.

The Bank used the additional term for those assets that meet the requirements required for the application of this standard, not generating a material impact on the results of the period.

NOTES TO THE INTERIM CONSOLIDATEDFINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

3.	New Accounting Pronouncements, continued:

Circular No. 2,248.

Regarding the minimum ratios that effective equity must meet with respect to its risk-weighted assets defined in Chapter 12-1 of the Actualized Standards Compilation (“RAN”), dated March 30, 2020, the CMF issued instructions for the treatment of Guarantees constituted in favor of third parties for bilateral compensation contracts, allowing banks may deduct from them, the net fair value of negative offset positions, to determine the asset subject to risk weighting, to the extent that certain conditions relating to the legal basis that protects them and the controls that they maintain over them are met.

These instructions are consistent with the rules of the Basel III Framework, regarding the determination of the net exposures of assets and liabilities covered by legally recognized compensation contracts in the jurisdictions to which the parties are entitled.

The new rules were implemented at the end of March 2020, without generating a significant impact on the indicators of capital adequacy.

Other standards adopted.

As of January 1, 2020, law 21,167 came into force, which regulates the forms of payment of the lines of credit associated with bank current accounts. This law establishes the automatic payment of the overdraft line associated with the current account, which operates by default, unless the client instructs their respective bank to operate a different payment method that is more comfortable for them.

The implementation of this new law generates a decrease in interest income and loan volumes.

3.1.2 New standards andinterpretations that have been issued but its date of application have not yet come into force:

The following is a summary of new standards, interpretations and improvements to the International Financial Reporting Standards issued by IASB that are not yet effective as of March 31, 2020, are detailed below:

Accounting standards issued by IASB.

IAS 28 — Investmentsin Associates and Joint Venture, and IFRS 10 — Consolidated Financial Statements.

In September 2014, the IASB published this modification, which clarifies the scope of the profits and losses recognized in a transaction that involves an associate or joint venture, and that this depends on whether the asset sold or contribution constitutes a business. Therefore, the IASB concluded that all gains or losses should be recognized against loss of control of a business. Likewise, the gains or losses that result from the sale or contribution of a subsidiary that does not constitute a business (definition of IFRS 3) to an associate or joint venture should be recognized only to the extent of unrelated interests in the associate or joint venture.

During December 2015, the IASB agreed to set the effective date of this modification in the future, allowing its immediate application.

Banco de Chile and its subsidiaries will have no impact on the Interim Consolidated Financial Statements as a result of the application of this amendment.

NOTES TO THE INTERIM CONSOLIDATEDFINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

3.	New Accounting Pronouncements, continued:

Accounting standards issuedby the CMF.

Circular No. 2,243.

On December 20, 2019, the CMF published Circular No. 2,243, which updates the instructions of the Accounting Standards Compendium (CNC) for banks.

The changes tend to further convergence with IFRS, as well as an improvement in the quality of financial information, to contribute to the financial stability and transparency of the banking system.

The main changes introduced to the CNC correspond to:

1)	Incorporation of IFRS 9 with the exception of the Chapter 5.5 on impairment of loans classified<br>as “financial assets at amortized cost”. This exception is mainly due to prudential criteria set by the CMF. These<br>criteria have given rise, over time, to the establishment of standard models that the banking institutions must apply to determine<br>the impairment of the loan portfolio (Chapter B-1 of the CNC, for provisions).
2)	Changes in the presentation formats of the Statement of Financial Position and Income Statement,<br>when adopting IFRS 9 in replacement of IAS 39.
---	---
3)	Incorporation of new presentation formats for the Statement of Other Comprehensive Income and the<br>Statement of Changes in Equity and guidelines on financing and investment activities for the Statement of Cash Flows.
---	---
4)	Incorporation of a financial report “Management Comments” (according to the IASB Practice<br>Document No. 1), which will complement the information provided by the interim and annual financial statements.
---	---
5)	Modifications of some notes of the financial statements, among which are: Financial assets at amortized<br>cost and Risk management, in order to better comply with the disclosure criteria contained in the IFRS 7. In addition, disclosures<br>about related parties are aligned according to IAS 24.
---	---
6)	Changes in the accounting plan of Chapter C-3 of the CNC, both in the accounts coding as well as<br>in their description. The foregoing corresponds to the detailed information of the formats for the Statement of Financial Position,<br>the Income Statement and the Statement of Other Comprehensive Income.
---	---
7)	Modification of the criteria for the suspension of the recognition of interest income and UF indexation<br>on an accrual basis, for any credit with a default greater than 90 days (Chapter B-2 of the CNC). Currently, the suspension of<br>the recognition of interests and UF indexation occurs after 180 days.
---	---

NOTES TO THE INTERIM CONSOLIDATEDFINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

3.	New Accounting Pronouncements, continued:

8)	Adaptation of the limitations and precisions to the use of IFRS contained in Chapter A-2 of the<br>CNC.

In accordance with the Circular 2,249 dated April 20 issued by the CMF, the new standard will be applicable from January 1, 2022, with a transition date of January 1, 2021, for purposes of the comparative Financial Statements that must be published from March 2022.

Nevertheless, the change in criteria for the suspension of the recognition of interest income and UF indexation on an accrual basis as provided in Chapter B-2, shall be adopted no later than January 1, 2022.

The Bank and its subsidiaries since 2019 have worked on the analysis and definition of technological changes and other solutions to address the needs generated by the application of the modifications to the CNC, in addition, Operating and Management Committees have been implemented to address the project and is already working on the technological changes required by these modifications. All this in order to comply with the new standards required for the preparation and presentation of the Financial Statements. The effects of applying the rule of suspension of interest and UF indexation at 90 days will not have a significant impact

Basel III Implementation

On March 30, 2020, the Council of the Commission for the Financial Market resolved to postpone by one year the start of the implementation of the requirements regarding Risk Weighted Assets, which will take effect from 2022. Additionally, it was agreed to postpone by one year, the additional capital charges for systemically important banks, the requirements associated with the conservation buffer and discounts to effective equity.

Circular No. 2,250.

In response to the situation faced by financial markets and audited entities as a result of the health crisis caused by the Covid-19 pandemic, on April 20 the CMF published Circular 2,250, through which Banks may add to the additional provisions, within the limit of 1.25%, an amount of up to 15% of the guarantees that cover the risk-weighted assets, the guarantees that correspond to endorsements or refinancing granted by the Chilean Treasury, CORFO and FOGAPE.

This modification will be applied from April 2020.

4.	Changes in Accounting Policies and Disclosures:

During the period ended March 31, 2020, no significant accounting changes have occurred that affect the presentation of these Interim Consolidated Financial Statements.

NOTES TO THE INTERIM CONSOLIDATEDFINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

5.	Relevant Events:
a)	On January 20, 2020, the subsidiary Banchile Administradora General de Fondos S.A. informed that<br>during the Ordinary Session held that day, the Board of Directors appointed Mr. José Luis Vizcarra Villalobos as director,<br>replacing Mr. Joaquín Contardo Silva, who presented resignation to the director position.
---	---
b)	On January 30, 2020, the Board of Directors of Banco de Chile agreed to convene an Ordinary Shareholders<br>Meeting on March 26, 2020 in order to propose, among other matters, the following distribution of profits for the year ended on<br>December 31, 2019:
---	---
i.	Deduct and withhold from the net income of the year, an amount equivalent to the effect of inflation<br>of the paid capital and reserves according to the variation of the Consumer Price Index that occurred between November 2018 and<br>November 2019, amounting to Ch$92,239,840,420, which will be added to retained earnings from previous periods.
---	---
ii.	From the resulting balance, distribute in the form of a dividend 70% of the remaining liquid profit,<br>corresponding to a dividend of Ch$3.47008338564 to each of the 101,017,081,114 shares of the Bank, retaining the remaining 30%.
---	---

Consequently, the distribution as a dividend that will be proposed will amount to 59.1% of the profits for the year ended December 31, 2019.

c)	On February 21, 2020, in accordance with the disposed in the articles 19 and the following of Law<br>No. 19,913, the Financial Analysis Unit imposed a written admonishment and a fine amounting to UF 800 to Banco de Chile, for not<br>having promptly reported suspicious transactions in accordance with the disposed under numeral 1 of Chapter I of the UAF Circular<br>No. 49 of 2012.
d)	On March 12, 2020, in the Ordinary session celebrated that day, the Board of Directors of Banco<br>de Chile agreed to establish a provision for minimum dividends of the net distributable profit that results from reducing or adding<br>to the net income of the corresponding period, the value effect of the monetary unit of paid capital and reserves, as a result<br>of any change in the Consumer Price Index (CPI) between the month prior to the current month and the month of November of the previous<br>year. It was also agreed to maintain the monthly provision at 60% of the income balance thus calculated.
---	---
e)	On March 26, 2020, at the Bank’s Ordinary Shareholders’ Meeting, our shareholders approved<br>the distribution of the dividend No. 208 of $3.47008338564 per share, to be charged to the income obtained during the fiscal year<br>2019.
---	---

Additionally, the shareholders proceeded to the complete renewal of the Board of Directors, due to the end of the legal and statutory three-year term with respect to the Board of Directors that has ceased in its functions.

NOTES TO THE INTERIM CONSOLIDATEDFINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

5.	Relevant Events, continued:

After the corresponding voting at the aforesaid meeting, the following persons were appointed as the Bank’s Directors for a new three-year term:

Directors:	Hernán Büchi Buc
	Andrés Ergas Heymann
	Alfredo Cutiel Ergas Segal	(Independent)
	Jaime Estévez Valencia	(Independent)
	Julio Santiago Figueroa
	Pablo Granito Lavín
	Álvaro Jaramillo Escallon
	Samuel Libnic
	Andrónico Luksic Craig
	Jean Paul Luksic Fontbona
	Francisco Pérez Mackenna
First Alternate Director:	Paul Fürst Gwinner	(Independent)
Second Alternate Director:	Sandra Marta Guazzotti

Moreover, on March 26, 2020, in its Ordinary Session, the Board of Directors of the Bank agreed to the following officer nominations and appointments:

Chairman:	Pablo Granifo Lavín
Vice Chairman:	Andrónico Luksic Craig
Vice Chairman:	Julio Santiago Figueroa
f)	During March 2020, the World Health Organization (“WHO”)<br>recognized the novel strain of coronavirus (“COVID-19”) as a pandemic. The global spread of this disease has forced<br>the authorities to take drastic sanitary and financial measures to contain and mitigate its effects on global health and economic<br>activity.
---	---

On this basis, on March 18, 2020 the Government decreed a Constitutional State of Exception defined as State of Catastrophe due to “State of Public Calamity” for the entire national territory, as well as has adopted various sanitary measures such as isolation or quarantine of general populations, localities and people determined; sanitary cords; sanitary customs and other protection measures. Additionally, the Government and the Central Bank of Chile have implemented a set of fiscal and financial measures aimed to mitigate COVID-19’s impact on the economy, and to ensure the proper functioning of the financial system.

The CMF, for its part, adopted temporary flexibility measures for the treatment of provisions for credit risk of group portfolios for the period between March 18, 2020 and July 31, 2020. This exceptional treatment will allow reprogramming that meets the eligibility requirements to maintain the associated allowances in the standard matrix (mortgage and commercial) that corresponds at the time of reprogramming. In the case of consumer portfolios, the parameters of Expected Credit Loss may be maintained, in accordance with the allowance internal models used.

NOTES TO THE INTERIM CONSOLIDATEDFINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

5.	Relevant Events, continued:

Within this context, our Bank has carried out several measures, along with executing contingency plans, in order to: (i) safeguard the health of clients and employees, including the temporary suspension of operation of some branches, (ii) ensure the operational continuity of our services and mitigate potential operational risks, and (iii) strengthen our remote channels and the implementation of telecommuting for a large group of our employees.

While the potential impact of the pandemic on our operating results remains uncertain and difficult to quantify, it is possible to anticipate that factors such as: (i) economic contraction, (ii) low interest rates for a long period of time, (iii) deflationary pressures owed to lowered domestic demand, (iv) increased unemployment, (v) total or partial quarantines affecting commercial activities, and (vi) mobility restrictions that will have an adverse effect on our operating revenues, loan loss provisions and operating expenses. Although these effects could be significant, it is not yet possible to determine their magnitude, which will depend on the duration and depth of the pandemic, as well as on the effectiveness of the measures taken to mitigate its consequences.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

6.	Business Segments:

For management purposes, the Bank is organized into four segments, which are defined based on the types of products and services offered, and the type of client in which focuses as described below:

Retail:	This segment focuses on individuals and small and medium-sized companies (SMEs) with annual sales<br>up to UF 70,000, where the product offering focuses primarily on consumer loans, commercial loans, checking accounts, credit cards,<br>credit lines and mortgage loans.
Wholesale:	This segment focused on corporate clients and large companies, whose annual revenue exceed UF 70,000,<br>where the product offering focuses primarily on commercial loans, checking accounts and liquidity management services, debt instruments,<br>foreign trade, derivative contracts and leases.
---	---
Treasury:	This segment includes the associated revenues to the management of the investment portfolio and<br>the business of financial transactions and currency trading.
---	---

Transactions with customers carried out by the Treasury are reflected in the respective aforementioned segments. These products are highly transaction-focused and include foreign exchange transactions, derivatives and financial instruments in general, among others.

Subsidiaries:	Corresponds to the businesses generated by the companies controlled by the Bank, which carry out<br>activities complementary to the bank business. The companies that comprise this segment are:

Entity

-	Banchile Administradora<br>General de Fondos S.A.
-	Banchile Asesoría<br>Financiera S.A.
---	---
-	Banchile Corredores de<br>Seguros Ltda.
---	---
-	Banchile Corredores de<br>Bolsa S.A.
---	---
-	Banchile Securitizadora<br>S.A.
---	---
-	Socofin S.A.
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

6.	Business Segments, continued:

The financial information used to measure the performance of the Bank’s business segments is not comparable with similar information from other financial institutions because each institution relies on its own definitions. The accounting policies applied to the segments is the same as those described in the summary of accounting principles. The Bank obtains the majority of the results for: interest, indexation and commissions and financial operations and changes, discounting provisions for credit risk and operating expenses. Management is mainly based on these concepts to evaluate the performance of the segments and make decisions about the goals and allocations of resources of each unit. Although the results of the segments reconcile with those of the Bank at the total level, this is not necessarily the case in terms of the different concepts, given that management is measured and controlled individually and not on a consolidated basis, applying the following criteria:

●	The<br> net interest margin of loans and deposits is obtained aggregating the net financial margins<br> of each individual operation of credit and uptake made by the bank. For these purposes,<br> the volume of each operation and its contribution margin are considered, which in turn<br> corresponds to the difference between the effective rate of the customer and the internal<br> transfer price established according to the term and currency of each operation. Additionally,<br> the net margin includes the result of interest and indexation from the accounting hedges.
●	The<br> capital and its financial impacts on outcome have been assigned to each segment based<br> on the risk-weighted assets.
---	---
●	Operational<br> expenses are reflected at the level of the different functional areas of the Bank. The<br> allocation of expenses from functional areas to business segments is done using different<br> allocation criteria, at the level of the different concepts and expense items.
---	---

Taxes are managed at a corporate level and are not allocated to business segments.

For the periods ended March 31, 2020 and 2019, there was no income from transactions with a customer or counterparty that accounted for 10% or more of the Bank's total revenues.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

6.	BusinessSegments, continued:

The following table presents the income by segment for the periods ended March 31, 2020 and 2019 for each of the segments defined above:

	Retail						Wholesale						Treasury						Subsidiaries						Subtotal						Consolidation<br> adjustment						Total
	March			March			March			March			March			March			March			March			March			March			March			March			March			March
	2020			2019			2020			2019			2020			2019			2020			2019			2020			2019			2020			2019			2020			2019
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$

Net interest income		253,116			228,589			91,261			69,620			5,865			3,724			(1,576	)		(1,698	)		348,666			300,235			1,031			735			349,697			300,970
Net commissions income (loss)		77,906			57,731			13,847			12,309			(635	)		(720	)		37,686			36,628			128,804			105,948			(3,333	)		(2,538	)		125,471			103,410
Other operating income		17,501			15,977			29,653			16,110			(6,328	)		(661	)		(897	)		10,218			39,929			41,644			(2,004	)		(1,428	)		37,925			40,216
Total operating revenue		348,523			302,297			134,761			98,039			(1,098	)		2,343			35,213			45,148			517,399			447,827			(4,306	)		(3,231	)		513,093			444,596
Provision for loan losses		(95,182	)		(84,567	)		(30,310	)		(4,559	)		—			—			(68	)		(30	)		(125,560	)		(89,156	)		—			—			(125,560	)		(89,156	)
Depreciation and amortization		(15,201	)		(14,255	)		(1,529	)		(1,282	)		(219	)		(178	)		(1,520	)		(1,488	)		(18,469	)		(17,203	)		—			—			(18,469	)		(17,203	)
Other operating expenses		(142,792	)		(142,257	)		(40,414	)		(38,529	)		(1,400	)		(1,119	)		(21,524	)		(24,947	)		(206,130	)		(206,852	)		4,306			3,231			(201,824	)		(203,621	)
Income attributable to associates		1,802			860			36			177			53			51			4			22			1,895			1,110			—			—			1,895			1,110
Income before income taxes		97,150			62,078			62,544			53,846			(2,664	)		1,097			12,105			18,705			169,135			135,726			—			—			169,135			135,726
Income taxes																																						(32,253	)		(34,189	)
Income after income taxes																																						136,882			101,537

The following table presents assets and liabilities of the periods ended March 31, 2020 and December 31, 2019 by each segment defined above:

	Retail				Wholesale				Treasury				Subsidiaries				Subtotal				Consolidation<br> adjustment						Total
	March		December		March		December		March		December		March		December		March		December		March			December			March		December
	2020		2019		2020		2019		2020		2019		2020		2019		2020		2019		2020			2019			2020		2019
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$		MCh$

Assets		18,244,492		18,139,505		11,542,400		10,766,374		14,063,854		11,426,849		1,014,053		964,695		44,864,799		41,297,423		(386,267	)		(345,395	)		44,478,532		40,952,028
Current and deferred taxes																												318,166		321,305
Total assets																												44,796,698		41,273,333

Liabilities		11,855,145		11,407,066		11,405,221		10,750,446		17,429,231		15,075,652		875,689		781,052		41,565,286		38,014,216		(386,267	)		(345,395	)		41,179,019		37,668,821
Current and deferred taxes																												66,787		76,289
Total liabilities																												41,245,806		37,745,110

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

7.	Cash<br>and Cash Equivalents:
(a)	The<br> detail of the balances included under cash and cash equivalents and their reconciliation<br> with the Statement of Cash Flows at the end of each period are detailed as follows:
---	---

	March		December
	2020		2019
	MCh$		MCh$
Cash and due from banks:
Cash (*)		791,473		889,911
Deposit in Chilean Central Bank (*)		756,894		178,429
Deposits in other domestic banks		45,953		75,651
Deposits abroad		1,186,149		1,248,175
Subtotal - Cash and due from banks		2,780,469		2,392,166
Net transactions in the course of collection		38,047		232,551
Highly liquid financial instruments (**)		940,367		1,192,188
Repurchase agreements (**)		26,043		114,466
Total cash and cash equivalents		3,784,926		3,931,371
(*)	Amounts<br> in cash funds and in Central Bank are regulatory reserve deposits that the Bank must<br> maintain as a monthly average.
---	---
(**)	It<br>corresponds to negotiation instruments and repurchases contracts that meet the definition of cash and cash equivalents.
---	---
(b)	Transactions<br>in course of settlement:
---	---

Transactions in course of settlement are transactions for which the only remaining step is settlement, which will increase or decrease the funds in the Central Bank or in foreign banks, normally occurring within 24 to 48 business hours, and are detailed as follows:

	March			December
	2020			2019
	MCh$			MCh$
Assets
Documents drawn on other banks (clearing)		74,782			222,261
Funds receivable		445,929			362,411
Subtotal - assets		520,711			584,672
Liabilities
Funds payable		(482,664	)		(352,121	)
Subtotal - liabilities		(482,664	)		(352,121	)
Net transactions in the course of settlement		38,047			232,551

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

8.	Financial<br>Assets Held-for-trading:

The detail of financial instruments classified as held-for-trading is as follows:

	March		December
	2020		2019
	MCh$		MCh$
Instruments issued by the Chilean Government and Central Bank of Chile
Central Bank of Chile bonds		36,209		16,490
Central Bank of Chile promissory notes		761,130		1,008,035
Other instruments issued by the Chilean Government and Central Bank		329,445		99,164
Other instruments issued in Chile
Bonds from other domestic companies		—		1,556
Bonds from domestic banks		72,794		55,094
Deposits in domestic banks		202,825		315,415
Other instruments issued in Chile		2,378		3,272
Instruments issued Abroad
Instruments from foreign governments or central banks		—		—
Other instruments issued abroad		—		—
Mutual fund investments
Funds managed by related companies		285,782		373,329
Funds managed by third-party		—		—
Total		1,690,563		1,872,355

Under “Instruments issued by the Chilean Government and Central Bank of Chile” are classified instruments sold under repurchase agreements to customers and financial instruments, by an amount of Ch$148,387 million as of March 31, 2020 (Ch$15,243 million as of December 31, 2019). Repurchase agreements had a 1 day average expiration as of period-end 2020 (3 days in December 2019).

Moreover, under this same item, other financial instruments are maintained as collateral guaranteeing the derivative transactions executed through Comder Contraparte Central S.A. for an amount of Ch$65,661 as of March 31, 2020 (Ch$57,639 million as of December 31, 2019).

“Other instruments issued in Chile” include instruments sold under repurchase agreements with customers and financial instruments amounting to Ch$131,106 million as of March 31, 2020 (Ch$251,158 million as of December 31, 2019). The repurchase agreements have an average expiration of 5 days as of period-end 2020 (7 days in December 2019).

Additionally, the Bank holds financial investments in mortgage finance bonds issued by itself in the amount of Ch$7,368 million as of March 31, 2020 (Ch$8,029 million as of December 31, 2019), which are presented as a reduction of the liability line item “Debt issued”.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

9.	Investments<br>under resale agreements and obligations under repurchase agreements:
(a)	Rights<br> arising from resale repurchase agreements: The Bank provides financing to its customers<br> through repurchase agreements and securities lending, in which the financial instrument<br> serves as collateral. As of March 31, 2020 and December 31, 2019, the detail is as follows:
---	---
	Up to 1 month				Over 1 month and up to 3 months				Over 3 months and up to 12 months				Over 1 year and up to 3 years				Over 3 years and up to 5 years				Over 5 years				Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	March		December		March		December		March		December		March		December		March		December		March		December		March		December
	2020		2019		2020		2019		2020		2019		2020		2019		2020		2019		2020		2019		2020		2019
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Instruments issued by the Chilean Governments and Central Bank of Chile
Central Bank bonds		—		11,184		—		—		—		—		—		—		—		—		—		—		—		11,184
Central Bank promissory notes		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Other instruments issued by the Chilean Government and Central Bank of Chile		5,636		18,459		—		—		—		—		—		—		—		—		—		—		5,636		18,459
Subtotal		5,636		29,643		—		—		—		—		—		—		—		—		—		—		5,636		29,643
Other Instruments issued in Chile
Deposit promissory notes from domestic banks		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Mortgage bonds from domestic banks		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Bonds from domestic banks		—		15,407		—		—		—		—		—		—		—		—		—		—		—		15,407
Deposits in domestic banks		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Bonds from other Chilean companies		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Other instruments issued in Chile		19,724		57,007		5,548		29,393		24,533		10,879		—		—		—		—		—		—		49,805		97,279
Subtotal		19,724		72,414		5,548		29,393		24,533		10,879		—		—		—		—		—		—		49,805		112,686
Instruments issued by foreign institutions
Instruments from foreign governments or Central Bank		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Other instruments		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Mutual fund investments
Funds managed by related companies		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Funds managed by third-party		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Subtotal		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Total		25,360		102,057		5,548		29,393		24,533		10,879		—		—		—		—		—		—		55,441		142,329

Securitiesreceived:

The Bank and its subsidiaries have received financial instruments that they can sell or give as collateral in case the owner of these instruments enters into default or in bankruptcy. As of March 31, 2020, the fair value of the instruments received amounts to Ch$51,643 million (Ch$142,370 million as of December, 2019).

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

9.	Investmentsunder resale agreements and obligations under repurchase agreements, continued:
(b)	Obligations<br> arising from repurchase agreements: The Bank obtains financing by selling financial instruments<br> and agreeing to repurchase them in the future, plus interest at a prefixed rate. As of<br> March 31, 2020 and December 31, 2019, the repurchase agreements are the following:
---	---
		Up to 1 month								Over 1 month and up to 3 months								Over 3 months and up to 12 months								Over 1 year and up to 3 years								Over 3 years and up to 5 years								Over 5 years								Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		March				December				March				December				March				December				March				December				March				December				March				December				March				December
		2020				2019				2020				2019				2020				2019				2020				2019				2020				2019				2020				2019				2020				2019
		MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$
Instruments issued by the Chilean Governments and Central Bank<br> of Chile
Central Bank bonds			—				7,301				—				—				—				—				—				—				—				—				—				—				—				7,301
Central Bank promissory notes			1,750				9,067				—				—				—				—				—				—				—				—				—				—				1,750				9,067
Other instruments issued by the Chilean Government and Central Bank<br> of Chile			146,405				—				—				—				—				—				—				—				—				—				—				—				146,405				—
Subtotal			148,155				16,368				—				—				—				—				—				—				—				—				—				—				148,155				16,368
Other Instruments issued in Chile
Deposit promissory notes from domestic banks			—				—				—				—				—				—				—				—				—				—				—				—				—				—
Mortgage bonds from domestic banks			—				—				—				—				—				—				—				—				—				—				—				—				—				—
Bonds from domestic banks			20,664				—				—				—				—				—				—				—				—				—				—				—				20,664				—
Deposits in domestic banks			173,830				280,696				452				8,583				46				—				—				—				—				—				—				—				174,328				289,279
Bonds from other Chilean companies			—				—				—				—				—				—				—				—				—				—				—				—				—				—
Other instruments issued in Chile			1,212				1,647				—				—				1,449				1,440				—				—				—				—				—				—				2,661				3,087
Subtotal			195,706				282,343				452				8,583				1,495				1,440				—				—				—				—				—				—				197,653				292,366
Instruments issued by foreign institutions
Instruments from foreign governments or central bank			—				—				—				—				—				—				—				—				—				—				—				—				—				—
Other instruments issued by foreing			—				—				—				—				—				—				—				—				—				—				—				—				—				—
Subtotal			—				—				—				—				—				—				—				—				—				—				—				—				—				—
Mutual fund investments
Funds managed by related companies			—				—				—				—				—				—				—				—				—				—				—				—				—				—
Funds managed by third-party			—				—				—				—				—				—				—				—				—				—				—				—				—				—
Subtotal			—				—				—				—				—				—				—				—				—				—				—				—				—				—
Total			343,861				298,711				452				8,583				1,495				1,440				—				—				—				—				—				—				345,808				308,734

Securitiessold:

The fair value of the financial instruments delivered as collateral by the Bank and its subsidiaries, in sales transactions with repurchase agreement and securities lending as of March 31, 2020 amounts to Ch$341,928 million (Ch$305,593 million in December 2019). In the event that the Bank and its subsidiaries enter into default or bankruptcy, the counterparty is authorized to sell or deliver these investments as collateral.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

10.	Derivative<br>Instruments and Accounting Hedges:
(a)	As<br> of March 31, 2020 and December<br> 31, 2019, the Bank’s portfolio of derivative<br> instruments is detailed as follows:
---	---

	Notional amount of contract with<br> final expiration date in														Fair Value
As of March 31, 2020	Up<br> to 1 month		Over<br> 1 month and up to 3 months		Over<br> 3 months and up to 12 months		Over 1 year and up to 3 years		Over<br> 3 year and up to 5 years		**<br><br>Over 5 years**		Total		Assets		Liabilities
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Derivatives held for hedging purposes
Interest rate swap and cross currency swap	—		—		—		8,249		—		—		8,249		—		2,666
Interest rate swap		—		—		—		7,729		—		59,125		66,854		—		10,433
Total derivatives held for hedging purposes		—		—		—		15,978		—		59,125		75,103		—		13,099

Derivatives held as cash flow hedges
Interest rate swap and cross currency swap		—		—		—		194,604		246,158		756,891		1,197,653		169,307		8,945
Total derivatives held as cash flow hedges		—		—		—		194,604		246,158		756,891		1,197,653		169,307		8,945

Trading derivatives
Currency forward		10,580,276		6,781,323		14,720,513		1,700,957		104,541		43,543		33,931,153		1,702,538		1,265,362
Interest rate swap		1,492,148		8,144,435		18,512,476		16,702,951		7,378,351		12,023,380		64,253,741		1,344,029		1,376,898
Interest rate swap and cross currency swap		366,076		1,345,566		3,791,643		6,192,650		3,732,361		4,376,925		19,805,221		1,529,664		2,051,987
Call currency options		36,019		29,460		88,761		9,336		—		—		163,576		11,504		4,043
Put currency options		23,488		21,547		89,718		8,482		—		—		143,235		145		923
Total trading derivatives		12,498,007		16,322,331		37,203,111		24,614,376		11,215,253		16,443,848		118,296,926		4,587,880		4,699,213

Total		12,498,007		16,322,331		37,203,111		24,824,958		11,461,411		17,259,864		119,569,682		4,757,187		4,721,257

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

10.	DerivativeInstruments and Accounting Hedges, continued:
(a)	Portfolio<br> of derivative instruments, continued:
---	---
		Notional<br> amount of contract with final expiration date in																												Fair<br> Value
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
As of December<br> 31, 2019		**<br><br>Up to 1 month**				Over<br> 1 month and up to 3 months				Over<br> 3 months and up to 12 months				Over<br> 1 year and up to 3 years				Over 3 year and up to 5 years				Over<br> 5 years				Total				Assets				**<br><br>Liabilities**
		MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$
Derivatives held for hedging purposes
Interest rate swap and cross currency swap			—				—				—				8,166				—				—				8,166				—				2,547
Interest rate swap			—				—				—				6,806				—				79,511				86,317				32				6,739
Total derivatives held for hedging purposes			—				—				—				14,972				—				79,511				94,483				32				9,286

Derivatives held as cash flow hedges
Interest rate swap and cross currency swap			—				33,182				—				192,647				134,812				821,241				1,181,882				61,562				34,443
Total derivatives held as cash flow hedges			—				33,182				—				192,647				134,812				821,241				1,181,882				61,562				34,443

Trading derivatives
Currency forward			8,770,180				8,736,613				14,803,058				2,067,618				65,321				38,346				34,481,136				956,632				673,630
Interest rate swap			1,790,715				5,806,453				19,749,389				16,219,325				7,021,586				10,823,786				61,411,254				888,581				886,963
Interest rate swap and cross currency swap			414,717				858,732				3,849,108				5,679,500				3,569,635				4,204,064				18,575,756				873,371				1,210,061
Call currency options			22,620				47,513				96,988				11,293				—				—				178,414				4,961				1,529
Put currency options			19,583				36,024				92,524				10,541				—				—				158,672				1,076				2,209
Total trading derivatives			11,017,815				15,485,335				38,591,067				23,988,277				10,656,542				15,066,196				114,805,232				2,724,621				2,774,392

Total			11,017,815				15,518,517				38,591,067				24,195,896				10,791,354				15,966,948				116,081,597				2,786,215				2,818,121

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

10.	DerivativeInstruments and Accounting Hedges, continued:
(b)	Fairvalue Hedges:
---	---

The Bank uses cross-currency swaps and interest rate swaps to hedge its exposure to changes in the fair value of the hedged elements attributable to interest rates in financial instruments or loans. The aforementioned hedge instruments change the effective cost of long-term assets from a fixed interest rate to a floating rate, decreasing the duration and modifying the sensitivity to the shortest segments of the curve.

Below is a detail of the hedged elements and instruments under fair value hedges as of March 31, 2020 and December 31, 2019:

	March		December
	2020		2019
	MCh$		MCh$
Hedge element
Commercial loans		8,249		8,166
Corporate bonds		66,854		86,317
Hedge instrument
Cross currency swap		8,249		8,166
Interest rate swap		66,854		86,317
(c)	Cashflow Hedges:
---	---
(c.1)	The<br>Bank uses cross currency swaps to hedge the risk from variability of cash flows attributable to changes in the interest rates<br>and foreign exchange of foreign banks obligations and bonds issued abroad in US Dollars, Hong Kong dollars, Swiss Franc, Japanese<br>Yens, Peruvian Sol, Australian Dollars, Euros and Norwegian kroner. The cash flows of the cross currency swaps equal the cash<br>flows of the hedged items, which modify uncertain cash flows to known cash flows derived from a fixed interest rate.
---	---

Additionally, these cross currency swap contracts used to hedge the risk from variability of the Unidad de Fomento (“CLF”) in assets flows denominated in CLF until a nominal amount equal to the portion notional of the hedging instrument CLF, whose readjustment daily impact the item “Interest Revenue” of the Income Financial Statements.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

10.	DerivativeInstruments and Accounting Hedges, continued:

(c)	Cashflow Hedges, continued:
(c.2)	Below<br> are the cash flows from bonds issued abroad objects of this hedge and the cash flows<br> of the asset part of the derivative instrument:
---	---
		Up<br> to 1 month								Over<br> 1 month and up to 3 months								Over<br> 3 months and up to 12 months								Over<br> 1 year and up to 3 years								Over<br> 3 years and up to 5 years								Over<br> 5 years								Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		March				December				March				December				March				December				March				December				March				December				March				December				March				December
		2020				2019				2020				2019				2020				2019				2020				2019				2020				2019				2020				2019				2020				2019
		MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$				MCh$

Hedge element
Outflows:
Corporate Bond		(848	)			—				—				—				(732	)			(1,421	)			(3,159	)			(2,842	)			(3,159	)			(2,842	)			(101,259	)			(91,089	)			(109,157	)			(98,194	)
Corporate Bond HKD		(2,497	)			—				—				—				(13,539	)			(12,829	)			(32,032	)			(25,627	)			(106,627	)			(91,034	)			(404,195	)			(320,604	)			(558,890	)			(450,094	)
Corporate Bond PEN		—				—				—				(894	)			(1,953	)			(894	)			(3,906	)			(3,575	)			(2,929	)			(3,575	)			(54,248	)			(49,651	)			(63,036	)			(58,589	)
Corporate Bond CHF		—				—				—				—				(910	)			(798	)			(1,819	)			(1,597	)			(235,678	)			(90,095	)			—				(116,765	)			(238,407	)			(209,255	)
Corporate Bond		(908	)			—				—				—				(908	)			(1,600	)			(3,634	)			(3,200	)			(3,634	)			(3,200	)			(49,957	)			(43,994	)			(59,041	)			(51,994	)
Obligation		(243	)			(216	)			(90	)			(336	)			(1,006	)			(884	)			(188,837	)			(166,592	)			—				—				—				—				(190,176	)			(168,028	)
Corporate Bond		—				—				(1,217	)			(34,638	)			(1,217	)			(2,121	)			(44,275	)			(38,596	)			(3,994	)			(3,482	)			(222,114	)			(193,625	)			(272,817	)			(272,462	)
Corporate Bond AUD		—				—				—				(428	)			(4,661	)			(3,274	)			(8,902	)			(7,399	)			(8,822	)			(7,401	)			(201,642	)			(156,499	)			(224,027	)			(175,001	)
Corporate Bond NOK		—				—				—				—				(2,226	)			(2,341	)			(4,453	)			(4,682	)			(4,453	)			(4,682	)			(72,194	)			(75,919	)			(83,326	)			(87,624	)

Hedge instrument
Inflows:
Cross Currency Swap		848				—				—				—				732				1,421				3,159				2,842				3,159				2,842				101,259				91,089				109,157				98,194
Cross Currency Swap HKD		2,497				—				—				—				13,539				12,829				32,032				25,627				106,627				91,034				404,195				320,604				558,890				450,094
Cross Currency Swap PEN		—				—				—				894				1,953				894				3,906				3,575				2,929				3,575				54,248				49,651				63,036				58,589
Cross Currency Swap CHF		—				—				—				—				910				798				1,819				1,597				235,678				90,095				—				116,765				238,407				209,255
Cross Currency Swap		908				—				—				—				908				1,600				3,634				3,200				3,634				3,200				49,957				43,994				59,041				51,994
Cross Currency Swap		243				216				90				336				1,006				884				188,837				166,592				—				—				—				—				190,176				168,028
Cross Currency Swap		—				—				1,217				34,638				1,217				2,121				44,275				38,596				3,994				3,482				222,114				193,625				272,817				272,462
Cross Currency Swap AUD		—				—				—				428				4,661				3,274				8,902				7,399				8,822				7,401				201,642				156,499				224,027				175,001
Cross Currency Swap NOK		—				—				—				—				2,226				2,341				4,453				4,682				4,453				4,682				72,194				75,919				83,326				87,624

Net cash flows		—				—				—				—				—				—				—				—				—				—				—				—				—				—

All values are in Euros.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

10.	DerivativeInstruments and Accounting Hedges, continued:
(c)	Cashflow Hedges, continued:
---	---
(c.2)	Below<br> are the cash flows from underlying assets and the cash flows of the liability part of<br> the derivative instrument:
---	---
	Up to 1 month						Over 1 month and up to 3 months						Over 3 months and up to 12 months						Over 1 year and up to 3 years						Over 3 years and up to 5 years						Over 5 years						Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	March			December			March			December			March			December			March			December			March			December			March			December			March			December
	2020			2019			2020			2019			2020			2019			2020			2019			2020			2019			2020			2019			2020			2019
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Hedge element
Inflows:
Cash flows in CLF	3,038			156			4,781			33,648			14,090			21,062			237,236			234,065			283,714			280,074			844,164			795,068			1,387,023			1,364,073
Hedge instrument
Outflows:
Cross Currency Swap HKD	(1,797	)		(156	)		—			—			(7,249	)		(8,798	)		(18,088	)		(17,906	)		(69,736	)		(69,035	)		(270,599	)		(268,034	)		(367,469	)		(363,929	)
Cross Currency Swap PEN	—			—			—			(47	)		(95	)		(48	)		(190	)		(188	)		(191	)		(189	)		(31,493	)		(31,223	)		(31,969	)		(31,695	)
Cross Currency Swap	—			—			(2,061	)		(33,570	)		(2,077	)		(4,096	)		(40,753	)		(40,344	)		(6,489	)		(6,424	)		(201,808	)		(199,778	)		(253,188	)		(284,212	)
Cross Currency Swap	(870	)		—			225			—			(642	)		(1,275	)		(163,586	)		(161,941	)		(1,294	)		(1,281	)		(37,620	)		(37,242	)		(203,787	)		(201,739	)
Cross Currency Swap CHF	—			—			(1,938	)		—			(1,959	)		(3,858	)		(7,731	)		(7,653	)		(199,109	)		(197,107	)		—			—			(210,737	)		(208,618	)
Cross Currency Swap	(371	)		—			(567	)		—			(938	)		(1,857	)		(3,753	)		(3,715	)		(3,756	)		(3,718	)		(86,556	)		(85,686	)		(95,941	)		(94,976	)
Cross Currency Swap AUD	—			—			(134	)		(31	)		(821	)		(521	)		(1,908	)		(1,103	)		(1,910	)		(1,104	)		(150,951	)		(108,622	)		(155,724	)		(111,381	)
Cross Currency Swap NOK	—			—			(306	)		—			(309	)		(609	)		(1,227	)		(1,215	)		(1,229	)		(1,216	)		(65,137	)		(64,483	)		(68,208	)		(67,523	)
Net cash flows	—			—			—			—			—			—			—			—			—			—			—			—			—			—

All values are in Japanese Yen.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

10.	DerivativeInstruments and Accounting Hedges, continued:
(c)	Cashflow Hedges, continued:
---	---

With respect to CLF assets hedged; these are revalued monthly according to the variation of the UF, which is equivalent to monthly reinvest the assets until maturity of the relationship hedging.

(c.3)

The unrealized results generated during the period 2020 by those derivative contracts that conform the hedging instruments in this cash flow hedging strategy, have been recorded with credit to equity amounting to Ch$1,935 million (credit to equity of Ch$889 million in March 31, 2019). The net effect of taxes credit to equity amounts to Ch$1,414 million (net credit to equity of Ch$649 million equity during the period March 2019).

The accumulated balance for this concept as of March 31, 2020 corresponds to a charge in equity amounted to Ch$79,105 million (charge to equity of Ch$81,040 million as of December 2019).

(c.4)	The<br> net effect in income of derivatives cash flow hedges amount to Ch$135,650 million credit<br> to income during the period 2020 (charge to income of Ch$34,714 million during the period<br> March 2019).
(c.5)	As<br> of March 31, 2020 and 2019, it not exist inefficiency in cash flow hedge, because both,<br> hedge item and hedge instruments, are mirrors of each other, it means that all variation<br> of value attributable to rate and revaluation components are netted totally.
---	---
(c.6)	As<br> of March 31, 2020 and 2019, the Bank does not have hedges of net investments in foreign<br> business.
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

11.	Loans and Advances to Banks, net:
(a)	At<br> the end of each reporting period, the balances presented in the item "Loans and<br> advances to Banks" are as follows:
---	---
	March			December
---	---	---	---	---	---	---
	2020			2019
	MCh$			MCh$
Domestic Banks
Interbank loans of liquidity		160,000			150,007
Provisions for loans to domestic banks		(58	)		(54	)
Subtotal		159,942			149,953
Foreign Banks
Interbank loans commercial		328,879			289,337
Credits with third countries		10,231			8,934
Chilean exports trade loans		44,513			61,860
Provisions for loans to foreign banks		(811	)		(704	)
Subtotal		382,812			359,427
Central Bank of Chile
Central Bank deposits		800,000			630,053
Other Central Bank credits		—			—
Subtotal		800,000			630,053
Total		1,342,754			1,139,433
(b)	The<br> changes in provisions of the credits owed by the banks, during the periods 2020 and 2019,<br> are summarized as follows:
---	---
	Bank’s Location
---	---	---	---	---	---	---	---	---	---
Detail	Chile			Abroad			Total
	MCh$			MCh$			MCh$
Balance as of January 1, 2019		83			1,006			1,089
Provisions established		—			—			—
Provisions released		(83	)		(25	)		(108	)
Balance as of March 31, 2019		—			981			981
Provisions established		54			—			54
Provisions released		—			(277	)		(277	)
Balance as of December 31, 2019		54			704			758
Provisions established		4			107			111
Provisions released		—			—			—
Balance as of March 31, 2020		58			811			869

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

12.	Loans to Customers, net:
(a.i)	Loans<br>to Customers:
---	---

As of March 31, 2020 and December 31, 2019, the portfolio of loans is composed as follows:

	As of March 31, 2020
	Assets before allowances								Allowances established
	Normal Portfolio		Substandard Portfolio		Non-Complying Portfolio		Total		Individual Provisions			Group Provisions			**<br><br>Total**			Net assets
	MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$			MCh$
Commercial loans
Commercial loans		12,279,247		84,043		379,617		12,742,907		(130,697	)		(131,206	)		(261,903	)		12,481,004
Foreign trade loans		1,701,903		12,483		19,854		1,734,240		(46,565	)		(3,755	)		(50,320	)		1,683,920
Current account debtors		237,147		6,310		3,002		246,459		(4,046	)		(3,480	)		(7,526	)		238,933
Factoring transactions		691,165		3,102		1,001		695,268		(11,089	)		(1,280	)		(12,369	)		682,899
Student loans		55,585		—		1,962		57,547		—			(4,178	)		(4,178	)		53,369
Commercial lease transactions (1)		1,578,971		39,907		25,857		1,644,735		(6,396	)		(8,063	)		(14,459	)		1,630,276
Other loans and accounts receivable		79,975		455		10,926		91,356		(2,636	)		(5,469	)		(8,105	)		83,251
Subtotal		16,623,993		146,300		442,219		17,212,512		(201,429	)		(157,431	)		(358,860	)		16,853,652
Mortgage loans
Letters of credit		12,391		—		995		13,386		—			(31	)		(31	)		13,355
Endorsable mortgage loans		28,904		—		829		29,733		—			(15	)		(15	)		29,718
Other residential lending		8,976,912		—		178,149		9,155,061		—			(26,326	)		(26,326	)		9,128,735
Credit from ANAP		4		—		—		4		—			—			—			4
Residential lease transactions		—		—		—		—		—			—			—			—
Other loans and accounts receivable		10,347		—		339		10,686		—			(355	)		(355	)		10,331
Subtotal		9,028,558		—		180,312		9,208,870		—			(26,727	)		(26,727	)		9,182,143
Consumer loans
Consumer loans in installments		2,752,258		—		256,744		3,009,002		—			(255,070	)		(255,070	)		2,753,932
Current account debtors		237,349		—		1,933		239,282		—			(13,907	)		(13,907	)		225,375
Credit card debtors		1,169,871		—		22,307		1,192,178		—			(50,791	)		(50,791	)		1,141,387
Consumer lease transactions (1)		170		—		—		170		—			(2	)		(2	)		168
Other loans and accounts receivable		9		—		812		821		—			(509	)		(509	)		312
Subtotal		4,159,657		—		281,796		4,441,453		—			(320,279	)		(320,279	)		4,121,174
Total		29,812,208		146,300		904,327		30,862,835		(201,429	)		(504,437	)		(705,866	)		30,156,969
(1)	In<br> this item, the Bank finances its customers purchases of assets, including real estate<br> and other personal property, through financial lease agreements. As of March 31, 2020<br> Ch$796,995 million correspond to finance leases for real estate and Ch$847,910 million<br> correspond to finance leases for movable assets.
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

12.	Loansto Customers net, continued:
(a.i)	Loans<br>to Customers, continued:
---	---
	As of December 31, 2019
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Assets before allowances								Allowances established
	Normal Portfolio		Substandard Portfolio		Non-Complying Portfolio		Total		Individual Provisions			Group Provisions			**<br><br>Total**			Net assets
	MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$			MCh$
Commercial loans
Commercial loans		11,740,263		45,346		351,425		12,137,034		(118,440	)		(125,082	)		(243,522	)		11,893,512
Foreign trade loans		1,407,782		4,111		19,312		1,431,205		(35,995	)		(3,321	)		(39,316	)		1,391,889
Current account debtors		258,195		4,020		3,479		265,694		(3,683	)		(4,181	)		(7,864	)		257,830
Factoring transactions		683,602		2,950		1,533		688,085		(10,642	)		(1,171	)		(11,813	)		676,272
Student loans		54,203		—		1,993		56,196		—			(4,056	)		(4,056	)		52,140
Commercial lease transactions (1)		1,580,443		14,944		23,764		1,619,151		(5,770	)		(7,825	)		(13,595	)		1,605,556
Other loans and accounts receivable		76,287		347		10,110		86,744		(2,412	)		(5,195	)		(7,607	)		79,137
Subtotal		15,800,775		71,718		411,616		16,284,109		(176,942	)		(150,831	)		(327,773	)		15,956,336
Mortgage loans
Letters of credit		13,720		—		1,034		14,754		—			(12	)		(12	)		14,742
Endorsable mortgage loans		31,469		—		882		32,351		—			(15	)		(15	)		32,336
Other residential lending		8,975,754		—		169,482		9,145,236		—			(27,795	)		(27,795	)		9,117,441
Credit from ANAP		4		—		—		4		—			—			—			4
Residential lease transactions		—		—		—		—		—			—			—			—
Other loans and accounts receivable		10,650		—		66		10,716		—			(225	)		(225	)		10,491
Subtotal		9,031,597		—		171,464		9,203,061		—			(28,047	)		(28,047	)		9,175,014
Consumer loans
Consumer loans in installments		2,778,721		—		260,839		3,039,560		—			(262,832	)		(262,832	)		2,776,728
Current account debtors		293,863		—		2,478		296,341		—			(14,740	)		(14,740	)		281,601
Credit card debtors		1,169,820		—		25,794		1,195,614		—			(51,581	)		(51,581	)		1,144,033
Consumer lease transactions (1)		69		—		—		69		—			(1	)		(1	)		68
Other loans and accounts receivable		13		—		703		716		—			(444	)		(444	)		272
Subtotal		4,242,486		—		289,814		4,532,300		—			(329,598	)		(329,598	)		4,202,702
Total		29,074,858		71,718		872,894		30,019,470		(176,942	)		(508,476	)		(685,418	)		29,334,052
(1)	In<br> this item, the Bank finances its customers purchases of assets, including real estate<br> and other personal property, through financial lease agreements. As of December 31, 2019<br> Ch$779,383 million correspond to finance leases for real estate and Ch$839,837 million<br> correspond to finance leases for movable assets..
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

12.	Loansto Customers, net, continued:
(a.ii)	Impaired<br>Portfolio:
---	---

As of March 31, 2020 and December 31, 2019, the Bank presents the following details of normal and impaired portfolio:

	Assets before Allowances												Allowances established
	Normal Portfolio				Impaired Portfolio				Total				Individual Provisions						Group Provisions						Total						Net assets
	March		December		March		December		March		December		March			December			March			December			March			December			March		December
	2020		2019		2020		2019		2020		2019		2020			2019			2020			2019			2020			2019			2020		2019
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$		MCh$
Commercial loans		16,756,313		15,859,496		456,199		424,613		17,212,512		16,284,109		(201,429	)		(176,942	)		(157,431	)		(150,831	)		(358,860	)		(327,773	)		16,853,652		15,956,336
Mortgage loans		9,028,558		9,031,597		180,312		171,464		9,208,870		9,203,061		—			—			(26,727	)		(28,047	)		(26,727	)		(28,047	)		9,182,143		9,175,014
Consumer loans		4,159,657		4,242,486		281,796		289,814		4,441,453		4,532,300		—			—			(320,279	)		(329,598	)		(320,279	)		(329,598	)		4,121,174		4,202,702
Total		29,944,528		29,133,579		918,307		885,891		30,862,835		30,019,470		(201,429	)		(176,942	)		(504,437	)		(508,476	)		(705,866	)		(685,418	)		30,156,969		29,334,052

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

12.	Loansto Customers, continued:

(b)	Credit<br>risk provisions:

The changes in credits risk provisions, during the period 2020 and 2019, are summarized as follows:

	Commercial						Mortgage			Consumer
	Individual			Group			Group			Group			Total
	MCh$			MCh$			MCh$			MCh$			MCh$
Balance as of January 01, 2019		163,204			126,755			26,446			290,694			607,099
Charge-offs		(2,781	)		(11,396	)		(1,862	)		(62,106	)		(78,145	)
Allowances established		6,147			17,006			1,995			75,372			100,520
Allowances released		—			—			—			—			—
Balance as of March 31, 2019		166,570			132,365			26,579			303,960			629,474
Charge-offs		(5,918	)		(35,603	)		(5,928	)		(187,606	)		(235,055	)
Sales or transfers of credits		(2,549	)		—			—			—			(2,549	)
Allowances established		18,839			54,069			7,396			213,244			293,548
Allowances released		—			—			—			—			—
Balance as of December 31, 2019		176,942			150,831			28,047			329,598			685,418
Charge-offs		(4,655	)		(12,835	)		(2,231	)		(88,035	)		(107,756	)
Sales or transfers of credits		(41	)		—			—			—			(41	)
Allowances established		29,183			19,435			911			78,716			128,245
Allowances released		—			—			—			—			—
Balance as of March 31, 2020		201,429			157,431			26,727			320,279			705,866

In addition to these credit risk provisions, also provisions are maintained for country risk to cover foreign operations and additional loan provisions agreed upon by the Board of Directors, which are presented in liabilities under the item Provisions (Note No. 24).

Otherdisclosures:

1.	As<br> of March 31, 2020 and December 31, 2019, the Bank and its subsidiaries have made sales<br> of loan portfolios. The effect in income is no more than 5% of net income before taxes,<br> as described in Note No. 12 (e).
2.	As<br> of March 31, 2020 and December 31, 2019, the Bank and its subsidiaries derecognized 100%<br> of its portfolio of loans sold and on which all or substantially all of the risks and<br> benefits associated to these financial assets have been transferred (see Note No. 12<br> letter (e)).
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

12.	Loansto Customers, continued:
(c)	Finance<br>lease contracts:
---	---

The cash flows to be received by the Bank from finance lease contracts have the following maturities:

	Total receivable				Unearned income						Net balance receivable (*)
	March		December		March			December			March		December
	2020		2019		2020			2019			2020		2019
	MCh$		MCh$		MCh$			MCh$			MCh$		MCh$
Within one year		558,172		544,067		(57,454	)		(58,871	)		500,718		485,196
From 1 to 2 years		394,568		392,832		(41,721	)		(42,302	)		352,847		350,530
From 2 to 3 years		257,632		258,331		(27,001	)		(27,329	)		230,631		231,002
From 3 to 4 years		164,757		163,847		(18,156	)		(18,361	)		146,601		145,486
From 4 to 5 years		109,449		108,192		(13,151	)		(13,242	)		96,298		94,950
After 5 years		339,441		335,695		(29,709	)		(30,313	)		309,732		305,382
Total		1,824,019		1,802,964		(187,192	)		(190,418	)		1,636,827		1,612,546

(*)	The<br>net balance receivable does not include past-due portfolio totaling Ch$8,078 million as of March 31, 2020 (Ch$6,674 million as<br>of December 2019).

The Bank maintains financial lease operations associated with real estate, industrial machinery, vehicles and transportation equipment. These leases contracts have an average term between 2 and 15 years.

(d)	Purchase<br> of loan portfolio:

During the period ended March 31, 2020 and the year ended 2019 has not purchases portfolio loans.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

12.	Loansto Customers, continued:

(e)	Sale<br>or transfer of loans from the loan portfolio:

During the periods 2020 there have been operations of sale or transfer of the loan portfolio according to the following:

	As of March 31, 2020
	Carrying amount		Allowances			Sale price		Effect on income<br> <br>*(loss) gain ()**
	MCh$		MCh$			MCh$		MCh$
Sale of current loans		30,200		(41	)		30,200		41
Sale of written – off loans		—		—			—		—
Total		30,200		(41	)		30,200		41

During the period 2019 there have not been operations of sale or transfer of the loan portfolio.

(*)	See<br>Note No. 30.
(f)	Securitization<br>of own assets:
---	---

During the period 2020 and 2019, there is no securitization transactions executed involving its own assets.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

13.	Investment Securities:

As of March 31, 2020 and December 31, 2019, investment securities classified as available-for-sale and held-to-maturity are detailed as follows:

	March 2020						December 2019
	Available- for-sale		Held-to- maturity		Total		Available-for -sale		Held-to- maturity		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Instruments issued by the Chilean Government and Central Bank of Chile
Bonds issued by the Central Bank of Chile		76,030		—		76,030		76,358		—		76,358
Promissory notes issued by the Central Bank of Chile		—		—		—		16,466		—		16,466
Other instruments of the Chilean Government and the Central Bank of Chile		14,799		—		14,799		16,238		—		16,238
Other instruments issued in Chile
Deposit promissory notes from domestics banks		—		—		—		—		—		—
Mortgage bonds from domestic banks		122,142		—		122,142		122,291		—		122,291
Bonds from domestic banks		49,301		—		49,301		15,927		—		15,927
Deposits from domestic banks		1,272,891		—		1,272,891		1,020,842		—		1,020,842
Bonds from other Chilean companies		35,957		—		35,957		1,395		—		1,395
Promissory notes issued by other Chilean companies		—		—		—		—		—		—
Other instruments issued in Chile		54,104		—		54,104		68,476		—		68,476
Instruments issued Abroad
Instruments from foreign governments or Central Banks		—		—		—		—		—		—
Other instruments		7,005		—		7,005		19,853		—		19,853
Total		1,632,229		—		1,632,229		1,357,846		—		1,357,846

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

13.	Investment Securities, continued:

Instruments issued by the Chilean Government and Central Bank include instruments sold under repurchase agreements with clients and financial institutions. As of March 31, 2020 and December 31, 2019, there is no amount for this concept.

Under the instruments issued abroad mainly include bonds of local companies issued abroad.

As of March 31, 2020, the portfolio of financial assets available-for-sale includes an accumulated unrealized loss of Ch$5,941million (accumulated unrealized gain of Ch$3,827 million in December 2019), recorded as an equity valuation adjustment.

During the period 2020 and 2019, there is no evidence of impairment of financial assets available-for-sale.

Gross profits and losses realized on the sale of available-for-sale investments as of March 31, 2020 and 2019 are shown in Note No. 30 “Net Financial Operating Income”. The changes on results at the end of each period are as fallow:

	March			March
	2020			2019
	MCh$			MCh$
Unrealized (losses) gains		(7,141	)		8,561
Realized losses (gains) reclassified to income		(2,627	)		275
Subtotal		(9,768	)		8,836
Income tax on other comprehensive income		2,628			(2,403	)
Net effect in equity		(7,140	)		6,433

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

14.	Investments in Other Companies:
(a)	Investments in other companies include investments of Ch$52,647 million as of March 31, 2020 (Ch$50,758<br>million as of December 31, 2019), as follows:
---	---
										Investment
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		Ownership Interest				Equity				Assets				Income
		March		December		March		December		March		December		March			March
		2020		2019		2020		2019		2020		2019		2020			2019
Company	Shareholder	%		%		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$
Associates
Transbank S.A.	Banco de Chile		26.16		26.16		89,835		82,667		23,498		21,973		1,524			663
Soc. Operadora de Tarjetas de Crédito Nexus S.A.	Banco de Chile		29.63		29.63		18,445		17,675		5,465		5,238		228			129
Administrador Financiero del Transantiago S.A.	Banco de Chile		20.00		20.00		20,205		19,174		4,041		3,985		56			48
Redbanc S.A.	Banco de Chile		38.13		38.13		9,241		9,221		3,524		3,549		(25	)		85
Centro de Compensación Automatizado S.A.	Banco de Chile		33.33		33.33		6,667		6,464		2,222		2,184		38			59
Sociedad Imerc OTC S.A.	Banco de Chile		12.33		12.33		12,478		12,470		1,539		1,538		1			10
Sociedad Interbancaria de Depósitos de Valores S.A.	Banco de Chile		26.81		26.81		5,179		4,811		1,388		1,359		29			21
Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A.	Banco de Chile		15.00		15.00		6,454		6,290		968		958		10			4
Subtotal Associates							168,504		158,772		42,645		40,784		1,861			1,019
Joint Ventures
Servipag Ltda.	Banco de Chile		50.00		50.00		12,354		12,292		6,177		6,271		(94	)		(6	)
Artikos Chile S.A.	Banco de Chile		50.00		50.00		2,992		2,399		1,496		1,387		109			97
Subtotal Joint Ventures							15,346		14,691		7,673		7,658		15			91
Subtotal							183,850		173,463		50,318		48,442		1,876			1,110
Investments valued at cost (1)
Bolsa de Comercio de Santiago S.A.	Banchile Corredores de Bolsa										1,646		1,646		—			—
Banco Latinoamericano de Comercio Exterior S.A. (Bladex)	Banco de Chile										309		309		19			—
Bolsa Electrónica de Chile S.A.	Banchile Corredores de Bolsa										257		257		—			—
Sociedad de Telecomunicaciones Financieras Interbancarias Mundiales (Swift)	Banco de Chile										109		96		—			—
CCLV Contraparte Central S.A.	Banchile Corredores de Bolsa										8		8		—			—
Subtotal											2,329		2,316		19			—
Total											52,647		50,758		1,895			1,110
(1)	Income from investments valorized at cost, corresponds to income recognized on cash basis<br>(dividends).
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

14.	Investments in Other Companies, continued:
(b)	The change of investments in companies registered under the equity method in the periods of 2020<br>and 2019, are as follows:
---	---
	March		March
---	---	---	---	---
	2020		2019
	MCh$		MCh$
Initial book value		48,442		42,252
Acquisition of investments in companies		—		—
Participation on income in companies with significant influence and joint control		1,876		1,110
Dividends receivable		—		—
Dividends Minimum		—		—
Dividends received		—		—
Others		—		45
Total		50,318		43,407
(c)	During the period ended as of March 31, 2020 and 2019 no impairment has incurred in these investments.
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

15.	Intangible Assets:
(a)	As of March 31, 2020 and December 31, 2019 intangible assets<br>are composed as follows:
---	---
	Useful Life		Average remaining amortization		Gross balance				Accumulated Amortization						Net balance
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	March	December	March	December	March		December		March			December			March		December
	2020	2019	2020	2019	2020		2019		2020			2019			2020		2019
	Years	Years	Years	Years	MCh$		MCh$		MCh$			MCh$			MCh$		MCh$
Other Intangible Assets:
Software or computer programs	6	6	5	5		167,340		163,485		(108,577	)		(105,178	)		58,763		58,307
Total						167,340		163,485		(108,577	)		(105,178	)		58,763		58,307

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

15.	Intangible Assets, continued:

(b)	The change of intangible assets as of March 31, 2020 and December 31, 2019 are as follows:
	Software or computer programs
---	---	---	---	---	---	---
	March			December
	2020			2019
	MCh$			MCh$
Gross Balance
Balance as of January 1,		163,485			144,942
Acquisition		4,238			20,928
Disposals/ write-downs		(348	)		(1,759	)
Reclassification		(35	)		(276	)
Impairment (*)		—			(350	)
Total		167,340			163,485
Accumulated Amortization
Balance as of January 1,		(105,178	)		(92,881	)
Amortization for the period (*)		(3,786	)		(12,875	)
Disposals/ write-downs		353			316
Reclassification		34			262
Total		(108,577	)		(105,178	)
Balance Net		58,763			58,307

(*) See Note No. 35 Depreciation, amortization and impairment.

(c)	As of March 31, 2020 and December 31, 2019, the Bank maintains the following amounts with technological<br>developments:

Detail	Commitment Amount
	March		December
	2020		2019
	MCh$		MCh$
Software and licenses		4,332		7,151

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

16.	Fixed assets, leased assets and lease liabilities:

(a)	The properties and equipment as of March 31, 2020 and December 31, 2019 are composed as follows:
	Useful Life		Average remaining depreciation		Gross balance				Accumulated Depreciation						Net balance
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	March	December	March	December	March		December		March			December			March		December
	2020	2019	2020	2019	2020		2019		2020			2019			2020		2019
	Years	Years	Years	Years	MCh$		MCh$		MCh$			MCh$			MCh$		MCh$
Type of property and equipment:
Land and Buildings	26	26	20	21		303,923		301,619		(138,574	)		(136,394	)		165,349		165,225
Equipment	5	5	4	4		215,492		207,605		(165,641	)		(162,560	)		49,851		45,045
Others	7	7	4	4		56,175		55,519		(46,240	)		(45,527	)		9,935		9,992
Total						575,590		564,743		(350,455	)		(344,481	)		225,135		220,262

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

16.	Fixed assets, leased assets and lease liabilities, continued:

(b)	The changes in properties and equipment as of March 31, 2020 and December 31, 2019 are as follows:
	March 2020
---	---	---	---	---	---	---	---	---	---	---	---	---
	Land and Buildings			Equipment			Others			Total
	MCh$			MCh$			MCh$			MCh$
Gross Balance
Balance as of January 1, 2020		301,619			207,605			55,519			564,743
Reclassification		—			(62	)		—			(62	)
Additions		2,304			8,868			827			11,999
Disposals/write-downs/Sales		—			(919	)		(171	)		(1,090	)
Total		303,923			215,492			56,175			575,590
Accumulated Depreciation
Balance as of January 1, 2020		(136,394	)		(162,560	)		(45,527	)		(344,481	)
Reclassification		—			62			—			62
Depreciation charges of the period () (*)		(2,180	)		(4,004	)		(856	)		(7,040	)
Sales and disposals of the period		—			861			143			1,004
Total		(138,574	)		(165,641	)		(46,240	)		(350,455	)
Balance as of March 31, 2020		165,349			49,851			9,935			225,135
	December 2019
---	---	---	---	---	---	---	---	---	---	---	---	---
	Land and Buildings			Equipment			Others			Total
	MCh$			MCh$			MCh$			MCh$
Gross Balance
Balance as of January 1, 2019		320,585			183,220			53,500			557,305
Reclassification		(25,654	)		(37	)		—			(25,691	)
Additions		12,555			28,118			2,839			43,512
Disposals/write-downs/Sales		(5,437	)		(3,115	)		(762	)		(9,314	)
Impairment losses (***)		(430	)		(581	)		(58	)		(1,069	)
Total		301,619			207,605			55,519			564,743
Accumulated Depreciation
Balance as of January 1, 2019		(150,099	)		(148,455	)		(42,879	)		(341,433	)
Reclassification		21,278			37			—			21,315
Depreciation charges of the year (**)		(8,613	)		(16,819	)		(3,403	)		(28,835	)
Sales and disposals of the year		1,040			2,692			740			4,472
Transfers		—			(15	)		15			—
Total		(136,394	)		(162,560	)		(45,527	)		(344,481	)
Balance as of December 31, 2019		165,225			45,045			9,992			220,262

(*)	See Note No.35 Depreciation, Amortization and Impairment.
(**)	This amount does not include the depreciation of the year of the Investment Properties, amount<br>is included in “Other Assets” for Ch$89 million (Ch$359 million as of December 2019).
---	---
(***)	This amount does not include charge-offs of Property and Equipment of Ch$949 million as of December<br>2019.
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

16.	Fixed assets, leased assets and lease liabilities, continued:
(c)	The composition of the rights over leased assets as of March 31, 2020 and December 31, 2019 is<br>as follows:
---	---
	Gross<br> <br>Balance				Accumulated<br> Depreciation						Net<br> <br>Balance
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	March		December		March			December			March		December
	2020		2019		2020			2019			2020		2019
	MCh$		MCh$		MCh$			MCh$			MCh$		MCh$
Categories
Buildings		132,844		130,853		(23,640	)		(18,722	)		109,204		112,131
Floor space for ATMs		42,078		41,960		(11,383	)		(9,091	)		30,695		32,869
Improvements to leased properties		27,288		27,254		(21,459	)		(21,589	)		5,829		5,665
Total		202,210		200,067		(56,482	)		(49,402	)		145,728		150,665
(d)	The changes of the rights over leased assets as of March 31, 2020 and December 31, 2019 is as follows:
---	---
	March 2020
---	---	---	---	---	---	---	---	---	---	---	---	---
	Buildings			Floor space for ATMs			Improvements to leased properties			Total
	MCh$			MCh$			MCh$			MCh$
Gross Balance
Balance as of January 1, 2020		130,853			41,960			27,254			200,067
Additions		2,890			118			419			3,427
Write-downs (*)		(899	)		—			(385	)		(1,284	)
Total		132,844			42,078			27,288			202,210
Accumulated Depreciation
Balance as of January 1, 2020		(18,722	)		(9,091	)		(21,589	)		(49,402	)
Depreciation of the period (*)		(5,002	)		(2,297	)		(255	)		(7,554	)
Write-downs (*)		84			5			385			474
Total		(23,640	)		(11,383	)		(21,459	)		(56,482	)
Balance as of March 31, 2020		109,204			30,695			5,829			145,728
(*)	See Note No.35 Depreciation, Amortization and Impairment.
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

16.	Fixed assets, leased assets and lease liabilities, continued:

	December 2019
	Buildings			Floor space for ATMs			Improvements to leased properties			Total
	MCh$			MCh$			MCh$			MCh$
Gross Balance
Balance as of January 1, 2019		116,577			27,920			—			144,497
Reclassification		—			—			26,332			26,332
Additions		14,276			14,040			1,725			30,041
Write-downs		—			—			(803	)		(803	)
Total		130,853			41,960			27,254			200,067
Accumulated Depreciation
Balance as of January 1, 2019		—			—			—			—
Reclassification		—			—			(21,546	)		(21,546	)
Depreciation of the year		(18,722	)		(9,091	)		(659	)		(28,472	)
Write-downs		—			—			616			616
Total		(18,722	)		(9,091	)		(21,589	)		(49,402	)
Balance as of December 31, 2019		112,131			32,869			5,665			150,665

(e) The following are the future maturities of the lease liabilities as of March 31, 2020 and December 31, 2019:

	March 2020
	Up to 1 month		Over 1 month and up to 3 months		Over 3 months and up to 12 months		Over 1 year and up to 3 years		Over 3 years and up to 5 years		Over 5 years		Total
Lease associated to:	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Buildings		1,764		3,526		15,539		36,385		24,973		37,678		119,865
ATMs		819		1,637		7,104		18,270		3,283		623		31,736
Total		2,583		5,163		22,643		54,655		28,256		38,301		151,601
	December 2019
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Up to 1 month		Over 1 month and up to 3 months		Over 3 months and up to 12 months		Over 1 year and up to 3 years		Over 3 years and up to 5 years		Over 5 years		Total
Lease associated to:	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Buildings		1,726		3,519		15,286		37,063		24,899		38,526		121,019
ATMs		809		1,618		7,131		18,125		5,403		679		33,765
Total		2,535		5,137		22,417		55,188		30,302		39,205		154,784

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

16.	Fixed assets, leased assets and lease liabilities, continued:

The Bank and its subsidiaries maintain contracts with certain renewal options and for which there is reasonable certainty that said option shall be carried out. In such cases, the lease period used to measure the liability and assets corresponds to an estimate of future renewals.

The changes of the obligations for lease liabilities and the flows for the periods 2020 and 2019 are as follows:

	Total cash flow<br> <br>for the period
Lease liability	MCh$
Balances as of January 1, 2019		144,497
Liabilities for new lease agreements		14,946
Interest expenses		447
Payments of capital and interests		(6,116	)
Others		122
Balances as of March 31, 2020		153,896
Liabilities for new lease agreements		9,485
Interest expenses		2,127
Payments of capital and interests		(23,259	)
Others		3,764
Balances as of December 31, 2019		146,013
Liabilities for new lease agreements		1,559
Interest expenses		739
Payments of capital and interests		(7,509	)
Derecognized contracts		(817	)
Others		1,449
Balances as of March 31, 2020		141,434
(f)	The future cash flows related to short-term lease agreements in effect as of March 31, 2020 correspond<br>to Ch$7,582 million (Ch$8,611 as of December 31, 2019).
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

17.	Current Taxes and Deferred Taxes:
(a)	Current Taxes:
---	---

The Bank and its subsidiaries at the end of each period, have constituted a First Category Income Tax Provision, which was determined based on current tax regulations, and has been reflected in the Statement of Financial Position net of taxes to be recovered or payable, as applicable, as of March 31, 2020 and December 31, 2019, according to the following detail:

	March			December
	2020			2019
	MCh$			MCh$
Income tax		25,577			222,266
Tax Previous year		72,508			—
Less:
Monthly prepaid taxes		(32,829	)		(143,200	)
Credit for training expenses		—			(1,900	)
Others		(278	)		(1,234	)
Total		64,978			75,932
Tax rate		27	%		27	%
	March			December
---	---	---	---	---	---	---
	2020			2019
	MCh$			MCh$
Current tax assets		1,567			357
Current tax liabilities		(66,545	)		(76,289	)
Total tax payable, net		(64,978	)		(75,932	)

(b)	Income Tax:

The effect of the tax expense during the periods between January 1 and March 31, 2020 and 2019, are broken down as follows:

	March		March
	2020		2019
	MCh$		MCh$
Income tax expense:
Current year tax		25,056		37,209
Subtotal		25,056		37,209
(Credit) Charge for deferred taxes:
Origin and reversal of temporary differences		7,197		(1,019	)
Subtotal		7,197		(1,019	)
Others		—		(2,001	)
Net charge to income for income taxes		32,253		34,189

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

17.	Current and Deferred Taxes, continued:
(c)	Reconciliation of effective tax rate:
---	---

The following is a reconciliation of the income tax rate to the effective rate applied to determine the Bank’s income tax expense as of March 31, 2020 and 2019:

	March						March
	2020						2019
	Tax rate						Tax rate
	%			MCh$			%			MCh$
Income tax calculated on net income before tax		27.00			45,666			27.00			36,646
Additions or deductions		0.03			52			(0.64	)		(872	)
Price-level restatement		(8.54	)		(14,436	)		—			—
Other		0.57			971			(1.17	)		(1,585	)
Effective rate and income tax expense		19.06			32,253			25.19			34,189

The effective rate for income tax for the period 2020 is 19.06% (25.19% in March 2019).

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

17.	Current and Deferred Taxes, continued:
(d)	Effect of deferred taxes on income and equity:
---	---

The Bank and its subsidiaries have recorded the effects of deferred taxes in their Financial Statements. The effects of deferred taxes on assets, liabilities and income accounts are detailed as follows:

			Effect on
	Balances<br> <br>as of<br> <br>December 31,<br> <br>2019		Income			Equity			Balances<br> <br>as of<br> <br>March 31,<br> <br>2020
	MCh$		MCh$			MCh$			MCh$
Debit Differences:
Allowances for loan losses		221,079		5,708			—			226,787
Personnel provisions		16,714		(7,157	)		—			9,557
Staff vacations provisions		7,444		(88	)		—			7,356
Accrued interests adjustments from impaired loans		3,674		338			—			4,012
Staff severance indemnities provision		607		(54	)		(22	)		531
Provision of credit cards expenses		8,221		1,053			—			9,274
Provision of accrued expenses		10,564		(2,710	)		—			7,854
Adjustment for valuation of financial assets available-for-sale		—		—			1,589			1,589
Leasing		41,792		(3,521	)		—			38,271
Incomes received in advance		32,170		(5,554	)		—			26,616
Other adjustments		15,485		4,769			—			20,254
Total Debit Differences		357,750		(7,216	)		1,567			352,101
Credit Differences:
Depreciation and price-level restatement of property and equipment		15,524		55			—			15,579
Adjustment for valuation of financial assets available-for-sale		1,039		—			(1,039	)		—
Transitory assets		7,174		624			—			7,798
Loans accrued to effective rate		1,386		(448	)		—			938
Prepaid expenses		3,334		(719	)		—			2,615
Other adjustments		8,345		469			—			8,814
Total Credit Differences		36,802		(19	)		(1,039	)		35,744
Deferred, Net		320,948		(7,197	)		2,606			316,357

Reconciliation with the statement of financial position:

	March			December
	2020			2019
	MCh$			MCh$
Deferred tax assets		316,599			320,948
Deferred tax Liabilities		(242	)		—
Total Deferred tax		316,357			320,948

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

17.	Current and Deferred Taxes, continued:
(d)	Effect of deferred taxes on income and equity, continued:
---	---

The effects of deferred taxes on assets, liabilities and income as of March 31, 2019 and December 31, 2019, are as follows:

	Balance as of		Effect on						Balance as of		Effect on						Balance as of
	December 31, <br><br>2018		Income			Equity			March 31,<br><br> 2019		Income			Equity			December 31, <br><br>2019
	MCh$		MCh$			MCh$			MCh$		MCh$			MCh$			MCh$
Debit differences:
Allowances for loan losses		206,197		6,574			—			212,771		8,308			—			221,079
Personnel provisions		12,994		(6,515	)		—			6,479		10,235			—			16,714
Staff vacations provisions		7,241		(30	)		—			7,211		233			—			7,444
Accrued interest adjustments from impaired loans		3,232		111			—			3,343		331			—			3,674
Staff severance indemnities		600		1			—			601		(60	)		66			607
Provisions of credit card expenses		9,813		(750	)		—			9,063		(842	)		—			8,221
Provisions of accrued expenses		13,155		1,033			—			14,188		(3,624	)		—			10,564
Adjustment for valuation financial assets available-for-sale		2,695		—			(2,403	)		292		—			(292	)		—
Leasing		42,988		434			—			43,422		(1,630	)		—			41,792
Incomes received in advance		—		—			—			—		32,170			—			32,170
Other adjustments		12,392		2,245			—			14,637		848			—			15,485
Total Assets, Net		311,307		3,103			(2,403	)		312,007		45,969			(226	)		357,750
Credit differences:
Depreciation of property and equipment and investment properties		14,990		736			—			15,726		(202	)		—			15,524
Adjustment for valuation financial assets available-for-sale		—		—								—			1,039			1,039
Transitory assets		4,359		2,063			—			6,422		752			—			7,174
Loans accrued to effective rate		1,569		(1	)		—			1,568		(182	)		—			1,386
Advance payment of lump-sum under union contracts		6,699		(914	)		—			5,785		(2,451	)		—			3,334
Other adjustments		5,768		200			—			5,968		2,377			—			8,345
Total Liabilities, Net		33,385		2,084			—			35,469		294			1,039			36,802
Total Assets (Liabilities), Net		277,922		1,019			(2,403	)		276,538		45,675			(1,265	)		320,948

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

18.	Other Assets:
(a)	Item composition:
---	---

At the end of each period, the item is composed as follows:

	March			December
	2020			2019
	MCh$			MCh$
Assets held for leasing (*)		116,508			139,389
Assets received or awarded as payment (**)
Assets awarded at judicial sale		10,519			10,967
Assets received in lieu of payment		1,399			1,556
Provision for assets received in lieu of payment or awarded		(129	)		(188	)
Subtotal		11,789			12,335
Other Assets
Deposits by derivatives margin		711,419			475,852
Prepaid expenses		39,442			34,934
Trading and brokerage (***)		37,562			40,911
Other accounts and notes receivable		33,886			44,671
Recoverable income taxes		33,208			33,136
Commissions receivable		13,429			14,191
Investment properties		13,101			13,190
Servipag available funds		10,181			17,923
VAT receivable		8,041			11,831
Pending transactions		3,069			2,021
Rental guarantees		1,978			1,957
Accounts receivable for sale of assets received in lieu of payment		1,956			2,184
Assets recovered from leasing for sale		744			871
Materials and supplies		641			672
Others		22,982			16,900
Subtotal		931,639			711,244
Total		1,059,936			862,968
(*)	These correspond to property and equipment to be given under finance lease.
---	---
(**)	Assets received in lieu of payment are assets received as payment of customers’ past-due<br>debts. The assets acquired must not exceed the aggregate 20% of the Bank’s effective equity. These assets currently represent<br>0.0305% % (0.0341% as of December 31, 2019) of the Bank’s effective equity.
---	---

The assets awarded at judicial sale are not subject to the aforementioned margin. These properties are assets available for sale and is expected to be completed the sale within one year from the date the asset is received or acquired. In the event that said assets are not sold within one year, it must be written-off. The assets that have been received in payment or are awarded between March 1, 2019 until September 30, 2020, have an additional term of up to eighteen months for their disposal, also allowing these assets to be written-off proportionally to the number of months between the date of receipt and that fixed by the banks for their disposal.

The provision for assets received in lieu of payment or awarded is recorded as indicated in the Compendium of Accounting Standards, Chapter B-5 No.3, which indicates to recognize a provision for the difference between the initial value plus any additions and its realizable value, when the initial is greater.

(***)	This item mainly includes simultaneous operations carried out by the subsidiary Banchile Corredores<br>de Bolsa S.A.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

18.	Other Assets, continued:
(b)	The changes of the provision for assets received in lieu of payment during the three-month period<br>ended as of March 31, 2020 and 2019 are as follows:
---	---
Provision for assets received in lieu of payment	MCh$
---	---	---	---
Balance as of January 1, 2019		806
Provisions used		(568	)
Provisions established		240
Provisions released		—
Balance as of March 31, 2019		478
Provisions used		(1,591	)
Provisions established		1,301
Provisions released		—
Balance as of December 31, 2019		188
Provisions used		(342	)
Provisions established		283
Provisions released		—
Balance as of March 31, 2020		129
19.	Current Accounts and Other Demand Deposits:
---	---

At the end of each period, this item is composed as follows:

	March		December
	2020		2019
	MCh$		MCh$
Current accounts		9,652,449		8,951,527
Other demand deposits		1,515,550		1,662,950
Other deposits and sight accounts		701,855		711,656
Total		11,869,854		11,326,133
20.	Savings Accounts and Time Deposits:
---	---

At the end of each period, this item is composed as follows:

	March		December
	2020		2019
	MCh$		MCh$
Time deposits		11,038,889		10,537,614
Term savings accounts		257,947		239,850
Other term balances payable		172,822		79,154
Total		11,469,658		10,856,618

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

21.	Borrowings from Financial Institutions:

At the end of each period, borrowings from financial institutions are detailed as follows:

	March		December
	2020		2019
	MCh$		MCh$
Domestic banks
Banco Itaú		15,318		—
Banco do Brasil		—		3,900
Banco Santander		—		2,314
Subtotal domestic banks		15,318		6,214
Foreign banks
Foreign trade financing
Citibank N.A.		363,685		285,974
Sumitomo Mitsui Banking		256,515		213,534
Wells Fargo Bank		240,687		139,845
Bank of America		221,255		194,704
Bank of New York Mellon		144,386		224,812
The Bank of Nova Scotia		134,630		133,539
Zürcher Kantonalbank		89,700		78,872
JP Morgan Chase Bank		68,326		60,150
Commerzbank AG		21,107		2,201
Standard Chartered Bank		4,389		70,128
Toronto Dominion Bank		—		22,556
ING Bank		—		10,987
Others		53		89
Borrowings and other obligations
Wells Fargo Bank		128,661		113,377
Deutsche Bank AG		10,332		6
Citibank N.A.		4,167		6,198
Bank of America		413		—
JP Morgan Chase Bank		100		—
ING Bank NV		97		88
Others		—		3
Subtotal foreign banks		1,688,503		1,557,063
Chilean Central Bank		—		—
Total		1,703,821		1,563,277

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

22.	Debt Issued:

At the end of each period, this item is composed as follows:

	March		December
	2020		2019
	MCh$		MCh$
Mortgage bonds		9,783		10,898
Bonds		8,316,436		7,912,621
Subordinated bonds		898,006		889,895
Total		9,224,225		8,813,414

During the period ended as of March 31, 2020, Banco de Chile issued bonds by an amount of Ch$459,510 million, from which corresponds to Short-Term Bonds and Current Bonds by an amount of Ch$205,327 million and Ch$254,183 million respectively, according to the following details:

Short-term Bonds

Counterparty	Amount MCh$		Annual interest rate %	Issued date
Citibank N.A.	23,078	2.00	07/01/2020	07/07/2020
Citibank N.A.	38,371	1.95	09/01/2020	09/04/2020
Citibank N.A.	34,886	1.91	13/01/2020	13/04/2020
Citibank N.A.	11,629	1.87	14/01/2020	14/04/2020
Citibank N.A.	31,667	1.91	29/01/2020	31/07/2020
Citibank N.A.	7,917	1.91	29/01/2020	31/07/2020
Citibank N.A.	27,709	1.86	29/01/2020	29/05/2020
Citibank N.A.	10,350	1.85	30/01/2020	01/06/2020
Citibank N.A.	19,720	1.85	03/02/2020	03/06/2020
Total as of March 31, 2020		205,327

All values are in US Dollars.

Current Bonds Long-Term

Serie	Currency		Terms<br> <br>Years	Annual issue rate %	Issue date	Maturity date
BCHIEM0817	UF	93,096	7	0.80	06/01/2020	06/01/2027
BCHIEL0717	UF	123,957	8	0.72	04/02/2020	04/02/2028
Subtotal UF		217,053
BONO AUD	AUD	37,130	15	2.65	02/03/2020	02/03/2035
Subtotal Others currency		37,130
Total as of March 31, 2020		254,183

Subordinated bonds

During the period ended March 31, 2020, there were no subordinated bonds, issued.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

22.	Debt Issued, continued:

During the year ended as of December 31, 2019, Banco de Chile issued bonds by an amount of Ch$2,625,176 million, from which corresponds to Short-Term Bonds, Current Bonds and Subordinated Bonds by an amount of Ch$944,413 million, Ch$1,465,406 and Ch$215,357 million respectively, according to the following details:

Short-term Bonds

Counterparty	Amount MCh$		Annual interest rate %	Issued date
Citibank N.A.	40,937	2.91	04/01/2019	04/04/2019
Wells Fargo Bank	40,264	2.85	17/01/2019	24/04/2019
Citibank N.A.	33,598	2.80	22/01/2019	22/04/2019
Citibank N.A.	53,250	2.67	04/04/2019	02/07/2019
Citibank N.A.	27,886	2.67	09/04/2019	09/08/2019
Citibank N.A.	33,257	2.66	11/04/2019	11/07/2019
Wells Fargo Bank	33,257	2.68	11/04/2019	11/10/2019
Citibank N.A.	33,051	2.66	12/04/2019	22/07/2019
Wells Fargo Bank	3,966	2.67	12/04/2019	12/09/2019
Citibank N.A.	27,184	2.67	29/04/2019	29/10/2019
Wells Fargo Bank	33,838	2.60	30/04/2019	30/07/2019
Citibank N.A.	34,795	2.61	17/05/2019	18/11/2019
Citibank N.A.	34,842	2.59	23/05/2019	22/08/2019
Bank of America	34,208	2.50	21/06/2019	22/08/2019
Wells Fargo Bank	3,421	2.50	24/06/2019	25/07/2019
Citibank N.A.	547	2.40	24/06/2019	15/10/2019
Citibank N.A.	13,620	2.50	25/06/2019	05/08/2019
Citibank N.A.	13,575	2.51	28/06/2019	01/08/2019
Citibank N.A.	34,070	2.38	11/07/2019	09/10/2019
Citibank N.A.	29,883	2.25	09/08/2019	12/11/2019
Wells Fargo Bank	3,525	2.03	13/08/2019	08/05/2020
Citibank N.A.	35,676	2.20	22/08/2019	21/11/2019
Wells Fargo Bank	21,350	2.20	10/09/2019	09/12/2019
Wells Fargo Bank	7,117	2.20	11/09/2019	16/12/2019
Wells Fargo Bank	28,466	2.20	11/09/2019	10/12/2019
Citibank N.A.	15,799	2.10	07/10/2019	07/01/2020
Citibank N.A.	36,206	2.07	09/10/2019	09/01/2020
Citibank N.A.	36,212	2.00	24/10/2019	29/01/2020
Bank of America	36,212	2.00	24/10/2019	24/01/2020
Citibank N.A.	18,200	2.00	25/10/2019	03/02/2020
Citibank N.A.	31,819	1.91	04/11/2019	13/01/2020
Citibank N.A.	31,239	1.97	12/11/2019	12/02/2020
Citibank N.A.	4,554	2.05	22/11/2019	07/08/2020
Citibank N.A.	7,989	2.05	22/11/2019	07/08/2020
Citibank N.A.	18,750	2.07	04/12/2019	07/08/2020
Citibank N.A.	23,268	2.05	09/12/2019	09/04/2020
Wells Fargo Bank	3,877	2.04	09/12/2019	05/06/2020
Wells Fargo Bank	15,395	2.04	11/12/2019	27/03/2020
Citibank N.A.	1,792	2.03	30/12/2019	20/07/2020
Wells Fargo Bank	7,518	2.10	30/12/2019	15/12/2020
Total as of December 31, 2019		944,413

All values are in US Dollars.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

22.	Debt Issued, continued:

Current Bonds Long-Term

Serie	Currency	Amount<br> <br>MCh$		Terms<br> <br>Years	Annual issue rate %	Issue date
BCHIEC0817	UF	83,470	5	1.55	30/01/2019	30/01/2024
BCHIED1117	UF	41,711	5	1.54	14/03/2019	14/03/2024
BCHIED1117	UF	5,587	5	1.45	19/03/2019	19/03/2024
BCHIED1117	UF	36,317	5	1.45	20/03/2019	20/03/2024
BCHIDW1017	UF	84,359	2	0.93	09/05/2019	09/05/2021
BCHIDW1017	UF	57,091	2	0.57	24/06/2019	24/06/2021
BCHIEH0917	UF	58,867	7	1.04	01/07/2019	01/07/2026
BCHIEB1117	UF	86,682	4	0.83	01/07/2019	01/07/2023
BCHIEH0917	UF	29,514	7	1.00	02/07/2019	02/07/2026
BCHIEI1117	UF	60,697	7	0.66	19/07/2019	19/07/2026
BCHIEI1117	UF	22,063	7	0.51	30/07/2019	30/07/2026
BCHIEI1117	UF	8,613	7	0.45	01/08/2019	01/08/2026
BCHICC0815	UF	71,703	12	0.54	05/08/2019	05/08/2031
BCHICA1015	UF	71,221	11	0.54	05/08/2019	05/08/2030
BCHICB1215	UF	14,496	11	0.44	07/08/2019	07/08/2030
BCHIEI1117	UF	7,764	7	0.30	07/08/2019	07/08/2026
BCHIEI1117	UF	20,212	7	0.28	08/08/2019	08/08/2026
BCHICB1215	UF	57,926	11	0.45	08/08/2019	08/08/2030
BCHIEI1117	UF	3,108	7	0.29	08/08/2019	08/08/2026
BCHIBV1015	UF	71,063	10	0.37	20/08/2019	20/08/2029
BCHIEV1117	UF	132,366	10	0.34	05/09/2019	05/09/2029
BCHIEK1117	UF	117,493	13	1.38	11/12/2019	11/12/2032
Subtotal UF			1,142,323
BONO JPY		63,041	20	1.00	14/05/2019	14/05/2039
BONO HKD	HKD	32,725	12	2.90	19/07/2019	19/07/2031
BONO AUD	AUD	36,519	20	3.50	28/08/2019	28/08/2039
BONO PEN	PEN	29,969	15	5.40	04/09/2019	04/09/2034
BONO AUD	AUD	24,547	15	3.13	09/09/2019	09/09/2034
BONO NOK	NOK	60,951	10	3.50	07/11/2019	07/11/2029
BONO AUD	AUD	39,067	20	3.55	11/11/2019	11/11/2039
BONO JPY		36,264	10	1.00	19/11/2019	19/11/2029
Subtotal Others currency			323,083
Total as of December 31, 2019			1,465,406

All values are in Japanese Yen.

Subordinated bonds

Serie	Currency		Terms<br> <br>Years	Annual issue rate %	Issue date	Maturity date
UCHI-J1111	UF	61,471	23	1.05	20/08/2019	20/08/2042
UCHI-J1111	UF	65,973	23	1.04	20/08/2019	20/08/2042
UCHI-J1111	UF	48,799	23	0.99	21/08/2019	21/08/2042
UCHI-I1111	UF	39,114	21	0.96	24/09/2019	24/09/2040
Total as of December 31, 2019		215,357

During the period ended as of March 31, 2020 and December 31, 2019, the Bank has not been in default of principal and interest on its debt instruments. Likewise, there have been no breaches of covenants and other commitments associated with the debt instruments issued.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

23.	Other Financial Obligations:

At the end of each period, this item is composed as follows:

	March		December
	2020		2019
	MCh$		MCh$
Other Chilean obligations		104,156		138,575
Public sector obligations		17,518		17,654
Total		121,674		156,229
24.	Provisions:
---	---
(a)	At the end of each period, this item is composed as follows:
---	---
	March		December
---	---	---	---	---
	2020		2019
	MCh$		MCh$
Provisions for minimum dividends (*)		58,469		300,461
Provisions for personnel benefits and payroll expenses		71,794		109,075
Provisions for contingent loan risks		64,049		57,042
Provisions for contingencies:
Additional loan provisions		213,252		213,252
Country risk provisions		10,937		4,332
Other provisions for contingencies		543		501
Total		419,044		684,663
(*)	See Note No. 27 letter (c).
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

24.	Provisions, continued:
(b)	The following table shows the changes in provisions and accrued expenses during the periods 2020<br>and 2019:
---	---
	Minimum dividends			Personnel benefits and payroll			Contingent loan Risks		Additional loan provisions		Country risk provisions and other contingencies			Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	MCh$			MCh$			MCh$		MCh$		MCh$			MCh$
Balances as of January 1, 2019		305,409			92,579			55,530		213,252		3,349			670,119
Provisions established		60,922			15,632			884		—		4,334			81,772
Provisions used		(305,409	)		(46,803	)		—		—		—			(352,212	)
Provisions released		—			—			—		—		—			—
Balances as of March 31, 2019		60,922			61,408			56,414		213,252		7,683			399,679
Provisions established		239,539			77,726			628		—		(2,850	)		315,043
Provisions used		—			(30,059	)		—		—		—			(30,059	)
Provisions released		—			—			—		—		—			—
Balances as of December 31, 2019		300,461			109,075			57,042		213,252		4,833			684,663
Provisions established		58,469			14,204			7,007		—		6,647			86,327
Provisions used		(300,461	)		(51,485	)		—		—		—			(351,946	)
Provisions released		—			—			—		—		—			—
Balances as of March 31, 2020		58,469			71,794			64,049		213,252		11,480			419,044
(c)	Provisions for personnel benefits and payroll:
---	---
	March		December
---	---	---	---	---
	2020		2019
	MCh$		MCh$
Staff accrued vacation provision		27,283		27,609
Provisions for performance bonuses		18,850		51,051
Staff severance indemnities		7,099		7,566
Other personnel benefits provision		18,562		22,849
Total		71,794		109,075

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

24.	Provisions, continued:
(d)	Staff severance indemnities:
---	---
(i)	Changes in the staff severance indemnities:
---	---
	March			March
---	---	---	---	---	---	---
	2020			2019
	MCh$			MCh$
Present value of the obligations at the beginning of the period		7,566			7,754
Increase in provision		67			13
Benefit paid		(453	)		(143	)
Effect of change in actuarial factors		(81	)		—
Total		7,099			7,624
(ii)	Net benefits expenses:
---	---
	March			March
---	---	---	---	---	---	---
	2020			2019
	MCh$			MCh$
(Decrease) in provisions		(159	)		(310	)
Interest cost of benefits obligations		226			323
Effect of change in actuarial factors		(81	)		—
Net benefit expenses		(14	)		13
(iii)	Factors used in the calculation of the provision:
---	---

The main assumptions used in the determination of severance indemnity obligations for the Bank's plan are shown below:

	March 31,<br> <br>2020		December 31,<br> <br>2019
	%		%
Discount rate		3.17		3.17
Salary increase rate		4.04		4.42
Payment probability		99.99		99.99

The most recent actuarial valuation of the staff severance indemnities provision was carried out during the first quarter of 2020.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

24.	Provisions, continued:
(e)	Changes in compliance bonuses provision:
---	---
	March			March
---	---	---	---	---	---	---
	2020			2019
	MCh$			MCh$
Balances as of January 1		51,051			47,797
Net provisions established		4,727			5,665
Provisions used		(36,928	)		(37,449	)
Total		18,850			16,013
(f)	Changes in staff accrued vacation provision:
---	---
	March			March
---	---	---	---	---	---	---
	2020			2019
	MCh$			MCh$
Balances as of January 1		27,609			26,855
Net provisions established		1,825			1,733
Provisions used		(2,151	)		(1,847	)
Total		27,283			26,741
(g)	Employee benefits share-based provision:
---	---

As of March 31, 2020 and 2019, the Bank and its subsidiaries do not have a stock-based compensation plan.

(h)	Contingent loan provisions:

As of March 31, 2020 the Bank and its subsidiaries maintain contingent loan provisions by an amount of Ch$64,049 million (Ch$57,042 million in December 2019). See Note No. 26 letter (d).

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

25.	Other Liabilities:

At the end of each period, this item is composed as follows:

	March		December
	2020		2019
	MCh$		MCh$
Accounts and notes payable		219,432		231,465
Income received in advance (*)		105,128		125,418
Dividends payable		4,180		1,443
Other liabilities
Securities unliquidated		184,212		134,253
Documents intermediated (**)		80,723		80,190
Cobranding		34,086		30,186
VAT debit		14,420		16,354
Outstanding transactions		2,302		792
Insurance payments		914		1,157
Others		34,183		22,240
Total		679,580		643,498
(*)	In relation to the Strategic Alliance Framework Agreement, on June 4, 2019, Banco de Chile received<br>the payment from the Insurance Companies for an amount of Ch$149,061 million, which was recorded according to IFRS 15. The related<br>income is recognized over time, depending on compliance with the associated performance obligation.
---	---
(**)	This item mainly includes financing of simultaneous operations performed by subsidiary Banchile<br>Corredores de Bolsa S.A.
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

26.	Contingencies and Commitments:
(a)	Commitments and responsibilities accounted for in off-balance-sheet accounts:
---	---

In order to satisfy its customers’ needs, the Bank entered into several irrevocable commitments and contingent obligations. Although these obligations are not recognized in the Statement of Financial Position, they entail credit risks and, therefore, form part of the Bank’s overall risk.

The Bank and its subsidiaries keep recorded in off-balance sheet accounts the main balances related to commitments or with responsibilities inherent to the course of its normal business:

	March		December
	2020		2019
	MCh$		MCh$
Contingent loans
Guarantees and sureties		298,551		280,838
Confirmed foreign letters of credit		117,691		94,673
Issued letters of credit		338,516		316,916
Bank guarantees		2,248,342		2,283,390
Freely disposition credit lines		8,243,803		7,870,260
Other credit commitments		151,941		155,163
Transactions on behalf of third parties
Documents in collections		124,090		144,043
Third-party resources managed by the Bank:
Financial assets managed on behalf of third parties		5,719		6,418
Other assets managed on behalf of third parties		—		—
Financial assets acquired on its own behalf		83,622		73,140
Other assets acquired on its own behalf		—		—
Custody of securities
Securities held in safe custody in the Bank and subsidiaries		2,666,057		2,677,353
Securities held in safe custody in other entities		14,729,392		18,719,297
Total		29,007,724		32,621,491

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

26.	Contingencies and Commitments, continued:
(b)	Lawsuits and legal proceedings:
---	---
(b.1)	Normal judicial contingencies in the industry:
---	---

At the date of issuance of these Interim Consolidated Financial Statements, there are legal actions filed against the Bank related with the ordinary course operations. As of March 31, 2020 the Bank maintain provisions for judicial contingencies amounting to Ch$280 million (Ch$237 million as of December 2019), which are part of the item “Provisions” in the Statement of Financial Position.

The estimated end dates of the respective legal contingencies are as follows:

	As of March 31, 2020
	2020		2021		2022		2023		2024		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Legal contingencies		120		63		—		—		97		280
(b.2)	Contingencies for significant lawsuits in courts:
---	---

As of March 31, 2020 and December 31, 2019 there are not significant lawsuits in court that affect or may affect these Interim Consolidated Financial Statements.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

26.	Contingencies and Commitments, continued:
(c)	Guarantees granted by operations:
---	---
i.	In subsidiary Banchile Administradora General de FondosS.A.:
---	---

In compliance with Article No, 12 of Law No. 20,712, Banchile Administradora General de Fondos S.A., has designated Banco de Chile as the representative of the beneficiaries of the guarantees it has established, and in such role the Bank has issued bank guarantees totaling UF 3,768,100, maturing January 10, 2021 (UF 3,090,000, maturing on January 10, 2020 as of December 2019). The subsidiary took a policy with Mapfre Seguros Generales S.A. for the Real State Funds by a guaranteed amount of UF 817,000.

As of March 31, 2020 and December 31, 2019 the Bank has not guaranteed mutual funds.

ii.	In subsidiary Banchile Corredores de Bolsa S.A.:

For the purposes of ensuring correct and complete compliance with all of its obligations as broker-dealer entity, in conformity with the provisions from Article No. 30 and subsequent of Law No. 18,045 on Securities Markets, the subsidiary established a guarantee in an insurance policy for UF 20,000, insured by Mapfre Seguros, that matures April 22, 2020, whereby the Securities Exchange of the Santiago Stock Exchange was appointed as the subsidiary’s creditor representative.

	March		December
	2020		2019
Guarantees:	MCh$		MCh$
Shares delivered to cover simultaneous forward sales transactions:
Santiago Securities Exchange, Stock Exchange		30,589		85,302
Electronic Chilean Securities Exchange, Stock Exchange		5,967		6,843
Fixed income securities to guarantee CCLV system, Santiago Securities Exchange, Stock Exchange		8,000		7,985
Shares delivered to guarantee equity lending, Electronic Chilean Securities Exchange, Stock Exchange		2,865		382
Total		47,421		100,512

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

26.	Contingencies and Commitments, continued:
(c)	Guarantees granted, continued:
---	---
ii.	In subsidiary Banchile Corredores de Bolsa S.A., continued:
---	---

In conformity with the internal regulation of the stock exchange in which this subsidiary participates, and for the purpose of securing the broker’s correct performance, the Company established a pledge over 1,000,000 shares of the Santiago Stock Exchange, in favor of that institution, as stated in the Public Deed dated September 13, 1990 before the notary of Santiago Mr. Raul Perry Pefaur, and over 100,000 shares of the Electronic Chilean Stock Exchange, in favor of that Institution, as stated in a contract signed between both entities dated May 16, 1990.

Banchile Corredores de Bolsa S.A. keeps an insurance policy current with Southbridge Compañía de Seguros Generales S.A. that expires April 2, 2020, this considers matters of employee fidelity, physical losses, falsification or adulteration, and currency fraud with a coverage amount equivalent to US$20,000,000.

According to disposition of Chilean Central Bank, it provided a bank guarantee N°9571-2 corresponding to UF 10,500, with purposes to comply with the requirements of the SOMA contract (Contract for Service of System Open Market Operations) of the Chilean Central Bank. This bank guarantee is readjustable in UF to fixed term, non-endorsable and has a maturity date of July 22, 2020.

It also provided a bank guarantee No. 3610198 in the amount of UF 253,800 for the benefits of investors in portfolio management contracts. This bank guarantee is revaluated in UF to fixed term, non-endorsable and has a maturity date of January 8, 2021.

It also provided a cash guarantee in the amount of US$122,494.32 for the purpose of complying with the obligations to Pershing, for any operations conducted through that broker.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

26.	Contingencies and Commitments, continued:
(c)	Guarantees granted, continued:
---	---
iii.	In subsidiary Banchile Corredores de Seguros Ltda.:
---	---

According to established in article No. 58, letter D of D.F.L. 251, as of March 31, 2020 the entity maintains two insurance policies with effect from April 15, 2019 to April 14, 2020 which protect it against of potential damages caused by infractions of the law, regulations and complementary rules that regulate insurance brokers, especially when the non-compliance comes from acts, errors or omissions of the broker, its representatives, agents or dependents that participate in the intermediation.

The policies contracted are:

Matter insured	Amount Insured (UF)
Errors and omissions liability policy		60,000
Civil liability policy		500
(d)	Provisions for contingencies loans:
---	---

Established provisions for credit risk from contingencies operations are the followings:

	March		December
	2020		2019
	MCh$		MCh$
Freely disposition credit lines		33,800		31,121
Bank guarantees provision		24,826		22,268
Guarantees and sureties provision		4,807		3,156
Letters of credit provision		559		440
Other credit commitments		57		57
Total		64,049		57,042
(e)	By Exempt Resolution No. 270 dated October 30, 2014, the Superintendency of Securities and Insurance<br>(current Commission for the Financial Market) imposed a fine of UF 50,000 to Banchile Corredores de Bolsa S.A. for violations of<br>the second paragraph of article 53 of the Securities Market Law, said company filed a claim with the competent Civil Court requesting<br>the annulment of the fine. On December 10, 2019, a judgement in the case was issued reducing the fine to the amount of UF 7,500.<br>The judgment indicated has been subject to cassation appeals filed by both parties, which are pending before the Court of Appeals<br>of Santiago.
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

26.	Contingencies and Commitments, continued:

The company has not made provisions considering that the Bank’s legal advisors in charge of the procedure estimate that there are solid grounds that the claim filed by Banchile Corredores de Bolsa S.A. can be accepted.

27.	Equity:
(a)	Capital:
---	---
(i)	Authorized, subscribed and paid shares:
---	---

As of March 31, 2020, the paid-in capital of Banco de Chile is represented by 101,017,081,114 registered shares (101,017,081,114 shares as of December 31, 2019), with no par value, subscribed and fully paid.

(ii)	Shares:
(ii.1)	The following table shows the changes in share from December<br>31, 2018 to March 31, 2020:
---	---
	Total
---	---	---
	Ordinary<br> <br>Shares
Total shares as of December 31, 2018		101,017,081,114
Total shares as of December 31, 2019		101,017,081,114
Total shares as of March 31, 2020		101,017,081,114
(b)	Approval and payment of dividends:
---	---

At the Bank Ordinary Shareholders’ Meeting held on March 26, 2020 it was approved the distribution and payment of dividend No. 208 of Ch$3.47008338564 per share of the Banco de Chile, with charged to the net distributable income for the year 2019. The amount of the dividend paid in year 2020 amounted to Ch$350,538 million.

At the Bank Ordinary Shareholders’ Meeting held on March 28, 2019 it was approved the distribution and payment of dividend No. 207 of Ch$3.52723589646 per share of the Banco de Chile, with charged to the net distributable income for the year ended as of December 31, 2018. The amount of the dividend paid in year 2019 amounted to Ch$356,311million.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

27.	Equity, continued:
(c)	Provision for minimum dividends:
---	---

The Board of Directors of Banco de Chile agreed for the purposes of minimum dividends, to establish a provision of 60% of the net income resulting from reducing or adding to the net income for the corresponding period, the value effect of the monetary unit of paid capital and reserves, as a result of any change in the Consumer Price Index (CPI) between the month prior to the current month and the month of November of the previous year. The amount to be reduced of the liquid income for the period ended as of March 31, 2020 amounted to Ch$39,433 million.

As indicated, as of March 31, 2020, the amount of the net income determined in accordance with the preceding paragraph is equivalent to Ch$97,449 million (Ch$500,768 million as of December 31, 2019). Consequently, the Bank recorded a provision for minimum dividends under “Provisions” as of March 31, for an amount of Ch$58,469 million (Ch$300,461 million in December 2019), which reflects as a counterpart an equity reduction for the same amount in the item "Retained earnings".

(d)	Earnings per share:
(i)	Basic earnings per share:
---	---

Basic earnings per share are determined by dividing the net income attributable to the Bank ordinary equity holders in a period between the weighted average number of shares outstanding during that period, excluding the average number of own shares held throughout the period.

(ii)	Diluted earnings per share:

In order to calculate the diluted earnings per share, both the amount of income attributable to common shareholders and the weighted average number of shares outstanding, net of own shares, must be adjusted for all the inherent dilutive effects to the potential common shares (stock options, warrants and convertible debt).

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

27.	Equity, continued:

Accordingly, the basic and diluted earnings per share as of March 31, 2020 and 2019 were determined as follows:

	March		March
	2020		2019
Basic earnings per share:
Net profits attributable to ordinary equity holders of the bank (in million Chilean pesos)		136,882		101,537
Weighted average number of ordinary shares		101,017,081,114		101,017,081,114
Earning per shares (in Chilean pesos)		1.36		1.01
Diluted earnings per share:
Net profits attributable to ordinary equity holders of the bank (in million Chilean pesos)		136,882		101,537
Weighted average number of ordinary shares		101,017,081,114		101,017,081,114
Assumed conversion of convertible debt		—		—
Adjusted number of shares		101,017,081,114		101,017,081,114
Diluted earnings per share (in Chilean pesos)		1.36		1.01

As of March 31, 2020 and 2019, the Bank does not have instruments that generate dilutive effects.

(e)	Other comprehensive income:

This item includes the following concepts:

The adjustment of cash flow hedge derivatives comprises the portion of income recorded in equity resulting from changes in fair value due to changes in market factors. During the period 2020 it was made a credit to equity for Ch$1,935 million (credit to equity of Ch$889 million in 2019). The income tax effect presented a charge to equity of Ch$521 million (charge of Ch$240 million in March 2019).

The valuation adjustment of investments available for sale originates from fluctuations in the fair value of such portfolio, with a charge or credit to equity. During the period 2020, it was made a charge to equity for Ch$9,768 million (credit of Ch$8,836 million during the year 2019). The deferred tax effect meant a credit to equity of Ch$2,628 million (charge to equity of Ch$2,403 million in March 2019).

(f)	Retained earnings from previous years:

During the year 2020, the Ordinary Shareholders Meeting of Banco de Chile agreed to deduct and withhold from the 2019 liquid income, an amount equivalent to the value effect of the monetary unit of paid capital and reserves according to the variation in the Consumer Price Index occurred between November 2018 and November 2019, amounting to Ch$92,240 million. Additionally, the Board determined to withhold 30% of the remaining liquid income, equivalent to Ch$150,230 million.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

28.	Interest Revenue and Expenses:
(a)	On the closing date of the Financial Statement, the interest and indexation income, excluding hedge results, are composed as<br>follows:
---	---
	March 2020								March 2019
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Interest		UF<br> <br>Indexation		Prepaid fees		Total		Interest		UF<br> <br>Indexation			Prepaid fees		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$		MCh$
Commercial loans		170,139		62,946		784		233,869		184,133		(18	)		1,413		185,528
Consumer loans		150,519		651		1,756		152,926		155,865		—			2,306		158,171
Residential mortgage loans		68,799		92,265		2,057		163,121		72,594		249			1,095		73,938
Financial investment		8,522		2,717		—		11,239		8,672		(30	)		—		8,642
Repurchase agreements		545		—		—		545		632		—			—		632
Loans to banks		5,087		—		—		5,087		8,551		—			—		8,551
Other interest and indexation revenue		5,731		1,378		—		7,109		3,444		(86	)		—		3,358
Total		409,342		159,957		4,597		573,896		433,891		115			4,814		438,820

The amount of interest recognized on a received basis for impaired portfolio in the period 2020 amounts to Ch$982 million (Ch$1,048 million in March 2019).

(b)	At the each period end, the stock of interest and UF indexation not recognized in incomes is the<br>following:
	March 2020						March 2019
---	---	---	---	---	---	---	---	---	---	---	---	---
	Interest		UF<br> <br>Indexation		Total		Interest		UF<br> <br>Indexation		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Commercial loans		9,835		1,304		11,139		7,509		860		8,369
Residential mortgage loans		2,082		1,603		3,685		2,677		1,286		3,963
Consumer loans		25		—		25		37		—		37
Total		11,942		2,907		14,849		10,223		2,146		12,369

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

28.	Interest Revenue and Expenses, continued:
(c)	At each period end, interest and UF indexation expenses excluding hedge results, are detailed as<br>follows:
---	---
	March 2020						March 2019
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Interest		UF<br> <br>Indexation		Total		Interest		UF<br> <br>Indexation			Total
	MCh$		MCh$		MCh$		MCh$		MCh$			MCh$
Savings accounts and time deposits		52,665		12,087		64,752		72,259		(22	)		72,237
Debt securities issued		55,277		72,947		128,224		51,070		44			51,114
Other financial obligations		193		9		202		226		—			226
Repurchase agreements		1,363		—		1,363		1,615		—			1,615
Obligations with banks		8,970		—		8,970		10,826		—			10,826
Demand deposits		144		5,960		6,104		82		(10	)		72
Lease liabilities		739		—		739		447		—			447
Other interest and indexation expenses		472		297		769		17		(66	)		(49	)
Total		119,823		91,300		211,123		136,542		(54	)		136,488
(d)	As of March 31, 2020 and 2019, the Bank uses cross currency and interest rate swaps to hedge its<br>position on movements on the fair value of corporate bonds and commercial loans and cross currency swaps to hedge the risk of variability<br>of obligations flows with foreign banks and bonds issued in foreign currency.
---	---
	March 2020									March 2019
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Income			Expense			Total			Income			Expense			Total
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Gain from fair value accounting hedges		—			—			—			119			—			119
Loss from fair value accounting hedges		(6,220	)		—			(6,220	)		(5,581	)		—			(5,581	)
Gain from cash flow accounting hedges		34,976			45,455			80,431			145,127			140,047			285,174
Loss from cash flow accounting hedges		(50,918	)		(38,909	)		(89,827	)		(152,956	)		(133,243	)		(286,199	)
Net gain on hedge items		2,540			—			2,540			5,125			—			5,125
Total		(19,622	)		6,546			(13,076	)		(8,166	)		6,804			(1,362	)
(e)	At each period end, the summary of interest is as follows:
---	---
	March			March
---	---	---	---	---	---	---
	2020			2019
	MCh$			MCh$
Interest revenue		573,896			438,820
Interest expense		(211,123	)		(136,488	)
Subtotal interest income		362,773			302,332
Net gain (loss) from accounting hedges		(13,076	)		(1,362	)
Total net interest income		349,697			300,970

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

29.	Income and Expenses from Fees and Commissions:

The income and expenses for commissions that are shown in the Interim Consolidated Statement of Income refers to the following items:

	March			March
	2020			2019
	MCh$			MCh$
Commission income
Debit and credit card services		49,716			45,602
Investments in mutual funds and others		25,252			24,229
Use of distribution channel and access to customers		25,150			6,434
Collections and payments		14,385			13,466
Portfolio management		12,657			11,559
Fees for insurance transactions		8,687			9,213
Guarantees and letters of credit		6,806			6,346
Brand use agreement		6,094			3,763
Trading and securities management		5,304			5,384
Lines of credit and overdrafts		1,125			1,190
Financial advisory services		1,083			318
Other commission earned		5,412			6,719
Total commissions income		161,671			134,223
Commission expenses
Fees for card transactions		(27,041	)		(22,529	)
Interbank transactions		(5,778	)		(4,624	)
Collections and payments		(1,511	)		(1,729	)
Securities transactions		(1,163	)		(1,680	)
Sales force		(42	)		(66	)
Other commission		(665	)		(185	)
Total commissions expenses		(36,200	)		(30,813	)

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

30.	Net Financial Operating Income:

The gains (losses) from trading and brokerage activities are detailed as follows:

	March			March
	2020			2019
	MCh$			MCh$
Financial assets held-for-trading		10,975			16,446
Sale of available-for-sale instruments		3,350			(315	)
Sale of loan portfolios (Note No.12 (e))		41			—
Trading derivative		(4,864	)		(7,378	)
Net income on other transactions		(348	)		(187	)
Total		9,154			8,566
31.	Foreign Exchange Transactions, Net:
---	---

Net foreign exchange transactions are detailed as follows:

	March			March
	2020			2019
	MCh$			MCh$
Gain from accounting hedges		145,046			(33,689	)
Exchange difference, net		12,530			(1,653	)
Indexed foreign currency		(138,196	)		51,459
Total		19,380			16,117

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

32.	Provisions for<br>Loan Losses:

The change registered in income during the periods 2020 and 2019 due to provisions, are summarized as follows:

						Loans<br> to customers
	Loans and advance to<br> <br>banks					Commercial<br> Loans						Mortgage<br> Loans						Consumer<br> Loans						**<br><br>Subtotal**						Contingent<br> Loans						**<br><br>Total**
	March			March		March			March			March			March			March			March			March			March			March			March			March			March
	2020			2019		2020			2019			2020			2019			2020			2019			2020			2019			2020			2019			2020			2019
	MCh$			MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Provisions established:
- Individual<br> provisions		(111	)		—		(29,183	)		(6,147	)		—			—			—			—			(29,183	)		(6,147	)		(4,360	)		—			(33,654	)		(6,147	)
-<br> Group provisions		—			—		(19,435	)		(17,006	)		(911	)		(1,995	)		(78,716	)		(75,372	)		(99,062	)		(94,373	)		(2,647	)		(923	)		(101,709	)		(95,296	)
Provisions<br> established, net		(111	)		—		(48,618	)		(23,153	)		(911	)		(1,995	)		(78,716	)		(75,372	)		(128,245	)		(100,520	)		(7,007	)		(923	)		(135,363	)		(101,443	)

Provisions released:
- Individual provisions		—			108		—			—			—			—			—			—			—			—			—			39			—			147
-<br> Group provisions		—			—		—			—			—			—			—			—			—			—			—			—			—			—
Provisions<br> realeased, net		—			108		—			—			—			—			—			—			—			—			—			39			—			147

Provision,<br> net		(111	)		108		(48,618	)		(23,153	)		(911	)		(1,995	)		(78,716	)		(75,372	)		(128,245	)		(100,520	)		(7,007	)		(884	)		(135,363	)		(101,296	)

Additional<br> provision		—			—		—			—			—			—			—			—			—			—			—			—			—			—

Recovery<br> of written-off assets		—			—		2,116			2,857			1,045			1,191			6,642			8,092			9,803			12,140			—			—			9,803			12,140

Provision<br> for loan losses, net		(111	)		108		(46,502	)		(20,296	)		134			(804	)		(72,074	)		(67,280	)		(118,442	)		(88,380	)		(7,007	)		(884	)		(125,560	)		(89,156	)

In the opinion of the Administration, provisions constituting for credit risk cover all possible losses that may arise from the non-recovery of assets, according to the records examined by the Bank.

The detail of the amounts presented in the Interim Consolidated Statement of Cash Flow is as follows:

	March			March
	2020			2019
	MCh$			MCh$
Allowances established of loans to customer and loans and advances to banks		(128,356	)		(100,520	)
Allowances released of loans to customer and loans and advances to banks		—			108
Total allowances of loans to customer and loans and advances to banks		(128,356	)		(100,412	)

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

33.	Personnel Expenses:

Salaries and personnel expenses during the periods 2020 and 2019 are as follows:

	March		March
	2020		2019
	MCh$		MCh$
Remunerations		64,332		63,328
Bonuses and incentives		9,456		14,825
Variable compensation		9,156		10,087
Lunch and health benefits		7,093		6,926
Gratifications		7,049		6,949
Staff severance indemnities		4,502		5,921
Training expenses		708		862
Other personnel expenses		4,747		4,657
Total		107,043		113,555

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

34.	Administrative Expenses:

This item is composed as follows:

	March		March
	2020		2019
	MCh$		MCh$
General administrative expenses
Information technology and communications		23,587		22,516
Maintenance and repair of property and equipment		13,817		10,187
Surveillance and securities transport services		2,920		2,990
Office supplies		2,707		2,622
External advisory services and professional services fees		2,516		2,735
Energy, heating and other utilities		1,742		1,496
Insurance premiums		1,600		1,304
External service of financial information		1,545		1,413
Legal and notary expenses		1,127		872
Expenses for short-term leases and low value (*)		1,079		904
External service of custody of documentation		911		785
Postal box, mail, postage and home delivery services		864		1,502
Other expenses of obligations for lease agreements (*)		721		681
Representation and travel expenses		618		813
Donations		585		499
Other general administrative expenses		4,818		4,244
Subtotal		61,157		55,563
Outsource services
Data processing		2,714		2,212
Credit pre-evaluation		2,712		4,797
External technological developments expenses		2,648		2,234
Certification and technology testing		1,421		1,911
Other		1,011		1,117
Subtotal		10,506		12,271
Board expenses
Board of Directors Compensation		628		603
Other Board expenses		18		61
Subtotal		646		664
Marketing expenses
Advertising		6,183		6,628
Subtotal		6,183		6,628
Taxes, payroll taxes and contributions
Contribution to the banking regulator		2,745		2,520
Real estate contributions		747		700
Patents		328		313
Other taxes		376		335
Subtotal		4,196		3,868
Total		82,688		78,994
(*)	See Note No. 3 Adoption of IFRS 16 "Leases”.
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

35.	Depreciation, Amortization and Impairment:
(a)	The amounts corresponding to charges to results for depreciation and amortization during the periods<br>2020 and 2019, are detailed as follows:
---	---
	March		March
---	---	---	---	---
	2020		2019
	MCh$		MCh$
Depreciation and amortization
Depreciation of leased assets (Note No. 16 (d))		7,554		7,251
Depreciation of property and equipment (Note No. 16 (b))		7,129		7,117
Amortization of intangibles assets (Note No. 15 (b))		3,786		2,835
Total		18,469		17,203
(b)	As of March 31, 2020 and 2019 the impairment expenses is composed as follows:
---	---
	March		March
---	---	---	---	---
	2020		2019
	MCh$		MCh$
Impairment
Impairment of property and equipment (Note No. 16 (b))		—		6
Impairment of intangible assets (Note No. 15 (b))		—		—
Impairment of leased assets (Note No. 16 (d))		—		—
Total		—		6

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

36.	Other Operating Income:

During the periods 2020 and 2019, the Bank and its subsidiaries present other operating income, according to the following:

	March		March
	2020		2019
	MCh$		MCh$
Income for assets received in lieu of payment
Income from sale of assets received in lieu of payment		1,361		4,503
Other income		12		6
Subtotal		1,373		4,509
Release of provisions for contingencies
Country risk provisions		—		—
Other provisions for contingencies		—		—
Subtotal		—		—
Other income
Release and expense recovery		2,302		5,513
Reimbursements for insurance policies		2,086		347
Rental investment properties		1,728		2,132
Recovery from correspondent banks		841		667
Income from sale leased assets		172		438
Fiduciary and trustee commissions		124		62
Gain on sale of fixed assets		18		31
Credit/debit card income		—		1,386
Others		747		448
Subtotal		8,018		11,024
Total		9,391		15,533

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

37.	Other Operating Expenses:

During the periods 2020 and 2019, the Bank and its subsidiaries present other operating expenses, according to the following:

	March		March
	2020		2019
	MCh$		MCh$
Provisions and expenses for assets received in lieu of payment
Charge-off assets received in lieu of payment		1,245		2,623
Provisions for assets received in lieu of payment		293		363
Maintenance expenses of assets received in lieu of payment		152		170
Subtotal		1,690		3,156
Provisions for contingencies
Country risk provisions		6,605		4,306
Other provisions		42		28
Subtotal		6,647		4,334
Other expenses
Leasings operational expenses		1,378		1,106
Write-offs for operating risks		981		956
Correspondent banks		453		371
Card administration		158		283
Expenses for charge-off leased assets recoveries		112		58
Credit life insurance		98		81
Civil lawsuits		80		36
Contribution to other organisms		60		65
Others		436		620
Subtotal		3,756		3,576
Total		12,093		11,066

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

38.	Related Party Transactions:

Related parties are considered to be those natural or legal persons who are in positions to directly or indirectly have significant influence through their ownership or management of the Bank and its subsidiaries, as set out in the Compendium of Accounting Standards and Chapter 12-4 of the current Compilation of Standards issued by the CMF.

According to the above, the Bank has considered as related parties those natural or legal persons who have a direct participation or through third parties on Bank ownership, where such participation exceeds 5% of the shares, and also people who, regardless of ownership, have authority and responsibility for planning, management and control of the activities of the entity or its subsidiaries. There also are considered as related the companies in which the parties related by ownership or management of the Bank have a share which reaches or exceeds 5%, or has the position of director, general manager or equivalent.

NOTESTO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

38.	Related Party Transactions, continued:
(a)	Loans with related parties:
---	---

The following are the loans and accounts receivable and contingent loans, corresponding to related entities.

	Productive and Services<br> Companies (*)						Investment and<br> Commercial<br> Companies (**)						Individuals (***)						Total
	March			December			March			December			March			December			March			December
	2020			2019			2020			2019			2020			2019			2020			2019
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$
Loans and accounts receivable:
Commercial loans		148,204			174,370			173,349			130,237			13,680			13,563			335,233			318,170
Residential mortgage loans		—			—			—			—			58,908			58,477			58,908			58,477
Consumer loans		—			—			—			—			9,191			9,862			9,191			9,862
Gross loans		148,204			174,370			173,349			130,237			81,779			81,902			403,332			386,509
Allowance for loan losses		(1,392	)		(782	)		(251	)		(243	)		(856	)		(889	)		(2,499	)		(1,914	)
Net loans		146,812			173,588			173,098			129,994			80,923			81,013			400,833			384,595
Contingent loans:
Guarantees and sureties		6,280			5,531			11,657			9,470			—			—			17,937			15,001
Letters of credits		2,297			2,365			—			328			—			—			2,297			2,693
Foreign letters of credits		—			—			—			—			—			—			—			—
Banks guarantees		35,651			32,650			43,449			43,478			57			57			79,157			76,185
Freely disposition credit lines		51,063			52,916			14,087			14,364			22,787			21,519			87,937			88,799
Other contingencies loans		—			—			—			—			—			—			—			—
Total contingent loans		95,291			93,462			69,193			67,640			22,844			21,576			187,328			182,678
Provision for contingencies loans		(164	)		(214	)		(57	)		(52	)		(33	)		(37	)		(254	)		(303	)
Contingent loans, net		95,127			93,248			69,136			67,588			22,811			21,539			187,074			182,375
Amount covered by guarantee:
Mortgage		30,736			30,807			58,408			57,456			72,845			69,165			161,989			157,428
Warrant		—			—			—			—			—			—			—			—
Pledge		—			—			—			—			—			—			—			—
Others (****)		36,880			37,794			11,773			12,921			5,517			5,250			54,170			55,965
Total collateral		67,616			68,601			70,181			70,377			78,362			74,415			216,159			213,393
(*)	For these effects are considered productive companies, those that meet the following conditions:
---	---
i)	They engage in production activities and generate a separate<br>flow of income.
---	---
ii)	Less than 50% of their assets are financial assets held-for-trading or investments.
---	---

Service companies are considered entities whose main purpose is oriented to rendering services to third parties.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

38.	Related Party Transactions, continued:
(a)	Loans with related parties, continued:
---	---
(**)	Investment companies and commercial include those legal entities that do not meet the conditions<br>for productive companies or services providers and are profit-oriented.
---	---
(***)	Individuals include key members of the management and correspond to those who directly or indirectly<br>have authority and responsibility for planning, administrating and controlling the activities of the organization, including directors.<br>This category also includes their family members who influence or are influenced by such individuals in their interactions with<br>the organization.
---	---
(****)	These guarantees mainly correspond to shares and other financial guarantees.
---	---
(b)	Other assets and liabilities with related parties:
---	---
	March		December
---	---	---	---	---
	2020		2019
	MCh$		MCh$
Assets
Cash and due from banks		78,832		99,802
Transactions in the course of collection		60,524		63,969
Financial assets held-for-trading		878		880
Derivative instruments		815,984		495,378
Investment instruments		11,975		12,141
Other assets		67,229		76,548
Total		1,035,422		748,718
Liabilities
Demand deposits		198,710		227,377
Transactions in the course of payment		58,896		16,202
Obligations under repurchase agreements		843		54,030
Savings accounts and time deposits		289,353		396,028
Derivative instruments		723,374		432,669
Borrowings with banks		367,852		292,172
Lease liabilities		11,579		11,888
Other liabilities		201,275		151,335
Total		1,851,882		1,581,701

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

38.	Related Party Transactions, continued:

(c)	Income and expenses from related party transactions (*):
	March 2020				March 2019
---	---	---	---	---	---	---	---	---
	Income		Expense		Income		Expense
	MCh$		MCh$		MCh$		MCh$
Type of income or expense recognized
Interest and revenue expenses		4,991		570		4,089		1,607
Fees and commissions income		18,315		14,249		18,645		16,235
Net Financial Operating Income
Derivative instruments (**)		124,828		105,987		25,370		5,759
Other financial operations		3		—		—		—
Released or established of provision for credit risk		—		447		109		—
Operating expenses		—		48,540		—		44,968
Other income and expenses		116		4		113		16
(*)	This detail does not constitute a Statement of Comprehensive<br>Income for related party transactions since the assets with these parties are not necessarily equal to liabilities and each item<br>reflects total income and expense and not those corresponding to exact transactions.
---	---
(**)	The outcome of derivative operations is presented net<br>at each related counterparty level. Additionally, this line includes operations with local counterpart banks (unrelated) which<br>have been novated by Comder Contraparte Central S.A. (Related entity) for centralized clearing purposes, which generated a net<br>gain of Ch$121,255 million as of March 31, 2020 (net gain of Ch$3,614 million as of March 31, 2019).
---	---
(d)	Contracts with related parties:
---	---

During the period ended March 31, 2020, the Bank has signed, renewed or amended the contractual terms and conditions of the following contracts with related parties that do not correspond to the ordinary transactions with clients in general, for above UF 1,000:

Company name	Concept or service description
Sistemas Oracle de Chile S.A	Licensing services, support and implementation of hardware and software.
Canal 13 S.A.	Advertising service
Nexus S.A.	Credit card operation services
Artikos S.A.	Development services for electronic invoicing
Fundación Libertad y Desarrollo	Economic reports
Servipag Ltda.	Collection services

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

38.	Related Party Transactions, continued:
(e)	Directors’ remunerations and payments to key management<br>personnel:
---	---
	March		March
---	---	---	---	---
	2020		2019
	MCh$		MCh$
Personnel remunerations		975		979
Short-term benefits		3,642		3,037
Severance pay		784		—
Directors’ remunerations and fees (*)		628		603
Total		6,029		4,619
(*)	It includes fees paid to members of the Advisory Committee<br>of Banchile Corredores de Seguros Ltda, of Ch$3 million (Ch$3 million in March 2019).
---	---

Fees paid to the advisors of the Board of Directors amount to Ch$37 million in March 2019, as of March 31, 2020, there is no amount for this concept. The travel and other related expenses amount to Ch$18 million (Ch$24 million in March 2019).

Composition of key personnel:

	No. of executives
	March		March
	2020		2019
Position
CEO		1		1
CEOs of subsidiaries		6		6
Division Managers		12		13
Directors Bank and subsidiaries		20		20
Total		39		40

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

39.	Fair Value of Financial Assets and Liabilities:

Banco de Chile and its subsidiaries have defined a corporate framework for valuation and control related with the process to the fair value measurement.

Within the established framework includes the Product Control Unit, which is independent of the business areas and reports to the Financial Management and Control Division Manager. This function befall to the Financial Control and Treasury Manager, through the Financial Risk Information and Control Section, is responsible for independent verification of price and results of trading (including derivatives) and investment operations and all fair value measurements.

To achieve the appropriate measurements and controls, the Bank and its subsidiaries, take into account at least the following aspects:

(i)	Industry standard valuation.

To value financial instruments, Banco de Chile uses industry standard modeling; quota value, share price, discounted cash flows and valuation of options through Black-Scholes-Merton, according to the case. The input parameters for the valuation correspond to rates, prices and levels of volatility for different terms and market factors that are traded in the national and international market and that are provided by the main sources of the market.

(ii)	Quoted prices in active markets.

The fair value for instruments with quoted prices in active markets is determined using daily quotes from electronic systems information (such as Bolsa de Comercio de Santiago, Bloomberg, LVA and Risk America, etc). This quote represents the price at which these instruments are regularly traded in the financial markets.

(iii)	Valuation techniques.

If no specific quotes are available for the instrument to be valued, valuation techniques will be used to determine the fair value.

Due to, in general, the valuation models require a set of market parameters as inputs, the aim is to maximize information based on observable or price-related quotations for similar instruments in active markets. To the extent there is no information in direct from the markets, data from external suppliers of information, prices of similar instruments and historical information are used to validate the valuation parameters.

NOTESTO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

39.	Fair Value of Financial Assets and Liabilities, continued:
(iv)	Fair<br> value adjustments.
---	---

Part of the fair value process considers three adjustments to the market value, calculated based on the market parameters, including; a liquidity adjustment, a Bid/Offer adjustment and an adjustment is made for credit risk of derivatives (CVA and DVA). The calculation of the liquidity adjustment considers the size of the position in each factor, the particular liquidity of each factor, the relative size of Banco de Chile with respect to the market, and the liquidity observed in transactions recently carried out in the market. In turn, the Bid/Offer adjustment, represents the impact on the valuation of an instrument depending on whether the position corresponds to a long (bought) or a short (sold).To calculate this adjustment is used the direct quotes from active markets or indicative prices or derivatives of similar assets depending on the instrument, considering the Bid, Mid and Offer, respectively. Finally, the adjustment made for CVA and DVA for derivatives corresponds to the credit risk recognition of the issuer, either of the counterparty (CVA) or of Banco de Chile (DVA).

Liquidity value adjustments are made to trading instruments (including derivatives) only, while Bid / Offer adjustments are made for trading instruments and available for sale. Adjustments for CVA / DVA are carried out only for derivatives.

(v)	Fair<br> value control.

A process of independent verification of prices and rates is executed daily, in order to control that the market parameters used by Banco de Chile in the valuation of the financial instruments relating to the current state of the market and from them the best estimate derived of the fair value. The objective of this process is to control that the official market parameters provided by the respective business area, before being entered into the valuation, are within acceptable ranges of differences when compared to the same set of parameters prepared independently by the Financial Risk Information and Control Section. As a result, value differences are obtained at the level of currency, product and portfolio. In the event significant differences exist, these differences are scaled according to the amount of individual materiality of each market factor and aggregated at the portfolio level, according to the grouping levels within previously defined ranges. These ranges are approved by the Finance, International and Financial Risk Committee.

Complementary and in parallel, the Financial Risk Information and Control Section generates and reports on a daily basis Profit and Loss (“P&L”) and Exposure to Market Risks, which allow for proper control and consistency of the parameters used in the valuation.

NOTESTO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

39.	Fair Value of Financial Assets and Liabilities, continued:
(vi)	Judgmental<br> analysis and information to Management.
---	---

In particular cases, where there are no market quotations for the instrument to be valued and there are no prices for similar transactions instruments or indicative parameters, a specific control and a reasoned analysis must be carried out in order to estimate the fair value of the operation. Within the valuation framework described in the Reasonable Value Policy (and its procedure) approved by the Board of Directors of Banco de Chile, a required level of approval is set in order to carry out transactions where market information is not available or it is not possible to infer prices or rates from it.

(a)	Hierarchy<br> of instrument valued at Fair value:

Banco de Chile and its subsidiaries, classify all the financial instruments among the following levels:

Level 1:	These<br> are financial instruments whose fair value is calculated at quoted prices (unadjusted)<br> in extracted from liquid and deep markets. For these instruments there are quotes or<br> prices (return internal rates, quote value, price) the observable market, so that assumptions<br> are not required to determine the value.
In<br> this level, the following instruments are considered: currency futures, debt instruments<br> issued Chilean Central Bank and Treasury, which belong to benchmarks, mutual fund investments<br> and equity shares.
---
For<br> the instruments of the Central Bank of Chile and the General Treasury of the Republic,<br> all those mnemonics belonging to a Benchmark, in other words corresponding to one of<br> the following categories published by the Santiago Stock Exchange, will be considered<br> as Level 1: Pesos-02, Pesos-03, Pesos-04, Pesos-05, Pesos-07, Pesos-10, UF-02, UF-04,<br> UF-05, UF-07, UF-10, UF-20, UF-30. A Benchmark corresponds to a group of mnemonics that<br> are similar in duration and are traded in an equivalent way, i.e., the price (return<br> internal rates in this case) obtained is the same for all the instruments that make up<br> a Benchmark. This feature defines a greater depth of market, with daily quotations that<br> allow classifying these instruments as Level 1.
---
In<br> the case of debt issued by the Government, the internal rate of return of the market<br> is used to discount all flows to present value. In the case of mutual funds and equity<br> shares, the current market price per share, which multiplied by the number of instruments<br> results in the fair value.
---
The<br> preceding described valuation methodology is equivalent to the one used by the Bolsa<br> de Comercio de Santiago (Santiago Stock Exchange) and correspond to the standard methodology<br> used in the market.
---

NOTESTO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

39.	Fair Value of Financial Assets and Liabilities, continued:

Level 2:	They<br> are financial instruments whose fair value is calculated based on prices other than in<br> quoted in Level 1 that are observable for the asset or liability, directly (that is,<br> as prices or internal rates of return) or indirectly (that is, derived from prices or<br> internal rates of return from similar instruments). These categories include:
a)	Quoted<br> prices for similar assets or liabilities in active markets.
---	---
b)	Quoted<br> prices for identical or similar assets or liabilities in markets that are not active.
---	---
c)	Inputs<br> data other than quoted prices that are observable for the asset or liability.
---	---
d)	Inputs<br> data corroborated by the market.
---	---
At<br> this level there are mainly derivatives instruments, debt issued by banks, debt issues<br> of Chilean and foreign companies, issued in Chile or abroad, mortgage claims, financial<br> brokerage instruments and some issuances by the Central Bank of Chile and the General<br> Treasury of the Republic, which do not belong to benchmarks.
---
		To<br> value derivatives, depends on whether they are impacted by volatility as a relevant market<br> factor in standard valuation methodologies; for options the Black-Scholes-Merton formula<br> is used; for the rest of the derivatives, forwards and swaps, discounted cash flows method<br> is used.
---	---	---

For<br> the remaining instruments at this level, as for debt issues of level 1, the valuation<br> is done through cash flows model by using an internal rate of return that can be derived<br> or estimated from internal rates of return of similar securities as mentioned above.
---
In<br> the event that there is no observable price for an instrument in a specific term, the<br> price will be inferred from the interpolation between periods that have observable quoted<br> price in active markets. These models incorporate various market variables, including<br> the credit quality of counterparties, exchange rates and interest rate curves.
---

NOTESTO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

39.	Fair Value of Financial Assets and Liabilities, continued:

Valuation Techniques and Inputs for Level 2 Instrument:

Type of Financial<br><br> <br>Instrument	Valuation Method	Description: Inputs and Sources
Local Bank and<br><br> <br>Corporate Bonds	Discounted cash flows model	Prices (internal rates of return) are provided by third party<br> price providers that are widely used in the Chilean market.<br><br> <br><br><br> <br>Model is based on a Base Yield (Central Bank Bonds) and issuer<br> spread.<br><br> <br><br><br> <br>The model is based on daily prices and risk/maturity similarities<br> between<br><br> <br>Instruments.
Offshore Bank and<br><br> <br>Corporate Bonds		Prices are provided by third party price providers that are<br> widely used in the Chilean market.<br><br> <br><br><br> <br>Model is based on daily prices.
Local Central Bank<br><br> <br>and Treasury Bonds		Prices (internal rates of return) are provided by third party<br> price providers that are widely used in the Chilean market.<br><br> <br><br><br> <br>Model is based on daily prices.
Mortgage<br><br> <br>Notes		Prices (internal rates of return) are provided by third party<br> price providers that are widely used in the Chilean market.<br><br> <br><br><br> <br>Model is based on a Base Yield (Central Bank Bonds) and issuer<br> spread.<br><br> <br><br><br> <br>The model takes into consideration daily prices and risk/maturity<br> similarities between instruments.
Time<br><br> <br>Deposits		Prices (internal rates of return) are provided by third party<br> price providers that are widely used in the Chilean market.<br><br> <br><br><br> <br>Model is based on daily prices and considers risk/maturity similarities<br> between instruments.
Cross Currency Swaps,<br><br> <br>Interest Rate Swaps,<br><br> <br>FX Forwards, Inflation<br><br> <br>Forwards		Forward Points, Inflation forecast and local swap rates are<br> provided by market brokers that are widely used in the Chilean market.<br><br> <br><br><br> <br>Offshore rates and spreads are obtained from third party price<br> providers that are widely used in the Chilean market.<br><br> <br><br><br> <br>Zero Coupon rates are calculated by using the bootstrapping<br> method over swap rates.
FX Options	Black-Scholes<br><br> <br>Model	Prices for volatility surface estimates are obtained from market brokers that are widely used in the Chilean market.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

39.	FairValue of Financial Assets and Liabilities, continued:

Level 3:	These<br>are financial instruments whose fair value is determined using non-observable inputs data neither for the assets or liabilities<br>under analysis nor for similar instruments. An adjustment to an input that is significant to the entire measurement can result<br>in a fair value measurement classified within Level 3 of the fair value hierarchy, if the adjustment uses significant non-observable<br>data entry.
The<br>instruments likely to be classified as level 3 are mainly Corporate Debt by Chilean and foreign companies, issued both in Chile<br>and abroad.
---
Valuation<br>Techniques and Inputs for Level 3 Instrument:
---
Type of Financial Instrument	Valuation Method	Description: Inputs and Sources
---	---	---
Local Bank and Corporate Bonds	Discounted cash<br><br> <br>flows model	Since inputs for these types of securities are not observable by the market, we model interest rate of returns for them based on a Base Yield (Central Bank Bonds) and issuer spread. These inputs (base yield and issuer spread) are provided on a daily basis by third party price providers that are widely used in the Chilean market.
Offshore Bank and Corporate Bonds	Discounted cash<br><br> <br>flows model	Since inputs for these types of securities are not observable<br> by the market, we model interest rate of returns for them based on a Base Yield (US-Libor) and issuer spread. These inputs (base<br> yield and issuer spread) are provided on a weekly basis by third party price providers that are widely used in the Chilean market.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

39.	FairValue of Financial Assets and Liabilities, continued:
(b)	Level<br>chart:
---	---

The following table shows the classification by levels, for financial instruments registered at fair value.

	Level 1				Level 2				Level 3				Total
	March		December		March		December		March		December		March		December
	2020		2019		2020		2019		2020		2019		2020		2019
Financial Assets	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Financial assets held-for-trading
From the Chilean Government and Central Bank		253,951		93,032		872,833		1,030,657		—		—		1,126,784		1,123,689
Other instruments issued in Chile		2,378		3,272		202,825		316,971		72,794		55,094		277,997		375,337
Instruments issued abroad		—		—		—		—		—		—		—		—
Mutual fund investments		285,782		373,329		—		—		—		—		285,782		373,329
Subtotal		542,111		469,633		1,075,658		1,347,628		72,794		55,094		1,690,563		1,872,355
Derivative contracts for trading purposes
Forwards		—		—		1,702,538		956,632		—		—		1,702,538		956,632
Swaps		—		—		2,873,693		1,761,952		—		—		2,873,693		1,761,952
Call Options		—		—		11,504		4,961		—		—		11,504		4,961
Put Options		—		—		145		1,076		—		—		145		1,076
Futures		—		—		—		—		—		—		—		—
Subtotal		—		—		4,587,880		2,724,621		—		—		4,587,880		2,724,621
Hedge derivative contracts
Fair value hedge (Swap)		—		—		—		32		—		—		—		32
Cash flow hedge (Swap)		—		—		169,307		61,562		—		—		169,307		61,562
Subtotal		—		—		169,307		61,594		—		—		169,307		61,594
Financial assets available-for-sale (1)
From the Chilean Government and Central Bank		66,577		66,953		24,252		42,109		—		—		90,829		109,062
Other instruments issued in Chile		—		—		1,493,734		1,221,862		40,661		7,069		1,534,395		1,228,931
Instruments issued abroad		—		—		7,005		19,853		—		—		7,005		19,853
Subtotal		66,577		66,953		1,524,991		1,283,824		40,661		7,069		1,632,229		1,357,846
Total		608,688		536,586		7,357,836		5,417,667		113,455		62,163		8,079,979		6,016,416
Financial Liabilities
Derivative contracts for trading purposes
Forwards		—		—		1,265,362		673,630		—		—		1,265,362		673,630
Swaps		—		—		3,428,885		2,097,024		—		—		3,428,885		2,097,024
Call Options		—		—		4,043		1,529		—		—		4,043		1,529
Put Options		—		—		923		2,209		—		—		923		2,209
Futures		—		—		—		—		—		—		—		—
Subtotal		—		—		4,699,213		2,774,392		—		—		4,699,213		2,774,392
Hedge derivative contracts
Fair value hedge (Swap)		—		—		13,099		9,286		—		—		13,099		9,286
Cash flow hedge (Swap)		—		—		8,945		34,443		—		—		8,945		34,443
Subtotal		—		—		22,044		43,729		—		—		22,044		43,729
Total		—		—		4,721,257		2,818,121		—		—		4,721,257		2,818,121
(1)	As<br> of March 31, 2020, 99% of instruments of Level 3 have denomination “Investment<br> Grade”. Also, 100% of total of these financial instruments correspond to domestic<br> issuers.
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

39.	FairValue of Financial Assets and Liabilities, continued:
(c)	Level<br>3 reconciliation:
---	---

The following table shows the reconciliation between the balances at the beginning and at the end of period for those instruments classified in Level 3, whose fair value is reflected in the Financial Statements:

	March 2020
	Balance as of January 1, 2020		Gain (Loss) Recognized in Income (1)			Gain (Loss) Recognized in Equity (2)			Purchases		Sales			Transfer from Level 1 and 2		Transfer to Level 1 and 2		Balanceas of March 31, 2020
	MCh$		MCh$			MCh$			MCh$		MCh$			MCh$		MCh$		MCh$
Financial Assets
Financial assets held-for-trading:
Other instruments issued in Chile		55,094		(873	)		—			39,968		(21,395	)		—		—		72,794
Subtotal		55,094		(873	)		—			39,968		(21,395	)		—		—		72,794
Available-for-Sale Instruments:
Other instruments issued in Chile		7,069		677			(712	)		33,627		—			—		—		40,661
Subtotal		7,069		677			(712	)		33,627		—			—		—		40,661
Total		62,163		(196	)		(712	)		73,595		(21,395	)		—		—		113,455
	December 2019
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Balance as of January 1,<br><br> 2019		Gain (Loss) Recognized in Income (1)			Gain (Loss) Recognized in Equity (2)			Purchases		Sales			Transfer from Level 1 and 2		Transfer to Level 1 and 2			Balanceas of December 31, 2019
	MCh$		MCh$			MCh$			MCh$		MCh$			MCh$		MCh$			MCh$
Financial Assets
Financial assets held-for-trading:
Other instruments issued in Chile		20,866		(38	)		—			48,017		(26,504	)		13,368		(615	)		55,094
Subtotal		20,866		(38	)		—			48,017		(26,504	)		13,368		(615	)		55,094
Available-for-Sale Instruments:
Other instruments issued in Chile		23,021		968			(517	)		—		(18,177	)		1,774		—			7,069
Subtotal		23,021		968			(517	)		—		(18,177	)		1,774		—			7,069
Total		43,887		930			(517	)		48,017		(44,681	)		15,142		(615	)		62,163

(1)	Recorded<br>in income under item “Net financial operating income”.
(2)	Recorded<br>in equity under item “Other Comprehensive Income”.
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

39.	FairValue of Financial Assets and Liabilities, continued:
(d)	Sensitivity<br>of instruments classified in Level 3 to changes in key assumptions of models:
---	---

The following table shows the sensitivity, by type of instrument, of those instruments classified in Level 3 using alternative in key valuation assumptions:

	As of March 31, 2020					As of December 31, 2019
	Level 3		Sensitivity to changes in<br> key assumptions of<br> models			Level 3		Sensitivity to changes in<br> key assumptions of<br> models
Financial Assets	MCh$		MCh$			MCh$		MCh$
Financial assets held-for-trading
Other instruments issued in Chile		72,794		(723	)		55,094		(466	)
Subtotal		72,794		(723	)		55,094		(466	)
Available-for- Sale Instruments
Other instruments issued in Chile		40,661		(649	)		7,069		(86	)
Subtotal		40,661		(649	)		7,069		(86	)
Total		113,455		(1,372	)		62,163		(552	)

With the purpose to determine the sensitivity of the financial investments to changes in significant market factors, the Bank has made alternative calculations at fair value, changing those key parameters for the valuation and which are not directly observable in screens. In the case of the financial assets listed in the table above, which correspond to Bank Bonds and Corporate Bonds, it was considered that, since there are no current observables prices, the input prices will be based on brokers’ quotes. The prices are usually calculated as a base rate plus a spread. For Local Bonds it was determined to apply a 10% impact on the price, while for the Off Shore Bonds (associated with national issuers as of December 31, 2019 and March 31, 2020) it was determined to apply a 10% impact only on the spread, since the base rate is covered by interest rate swaps instruments in the so-called accounting hedges. The 10% impact is considered a reasonable move taking into account the market performance of these instruments and comparing it against the bid / offer adjustment that is provisioned by these instruments.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

39.	Fair Value of Financial Assets and Liabilities, continued:
(e)	Other assets and liabilities:
---	---

The following table summarizes the fair values of the Bank’s main financial assets and liabilities that are not recorded at fair value in the Statement of Financial Position. The values shown in this note are not attempt to estimate the value of the Bank’s income-generating assets, nor forecast their future behavior. The estimated fair value is as follows:

	Book Value				Estimated Fair Value
	March		December		March		December
	2020		2019		2020		2019
	MCh$		MCh$		MCh$		MCh$
Assets
Cash and due from banks		2,780,469		2,392,166		2,780,469		2,392,166
Transactions in the course of collection		520,711		584,672		520,711		584,672
Investments under resale agreements		55,441		142,329		55,441		142,329
Subtotal		3,356,621		3,119,167		3,356,621		3,119,167
Loans and advances to banks
Domestic banks		159,942		149,953		159,942		149,953
Central Bank of Chile		800,000		630,053		800,000		630,053
Foreign banks		382,812		359,427		382,484		358,542
Subtotal		1,342,754		1,139,433		1,342,426		1,138,548
Loans to customers, net
Commercial loans		16,853,652		15,956,336		16,678,838		15,988,330
Residential mortgage loans		9,182,143		9,175,014		9,527,695		9,888,506
Consumer loans		4,121,174		4,202,702		4,131,103		4,215,509
Subtotal		30,156,969		29,334,052		30,337,636		30,092,345
Total		34,856,344		33,592,652		35,036,683		34,350,060
Liabilities
Current accounts and other demand deposits		11,869,854		11,326,133		11,869,854		11,326,133
Transactions in the course of payment		482,664		352,121		482,664		352,121
Obligations under repurchase agreements		345,808		308,734		345,808		308,734
Savings accounts and time deposits		11,469,658		10,856,618		11,474,071		10,795,125
Borrowings from banks		1,703,821		1,563,277		1,696,181		1,555,129
Other financial obligations		121,674		156,229		123,393		160,361
Subtotal		25,993,479		24,563,112		25,991,971		24,497,603
Debt Issued
Letters of credit for residential purposes		9,227		10,229		9,831		11,081
Letters of credit for general purposes		556		669		592		725
Bonds		8,316,436		7,912,621		8,400,813		8,340,272
Subordinate bonds		898,006		889,895		929,488		1,004,621
Subtotal		9,224,225		8,813,414		9,340,724		9,356,699
Total		35,217,704		33,376,526		35,332,695		33,854,302

Other financial assets and liabilities not measured at their fair value, but for which a fair value is estimated, even if not managed based on such value, include assets and liabilities such as placements, deposits and other time deposits, debt issued, and other financial assets and obligations with different maturities and characteristics. The fair value of these assets and liabilities is calculated using the Discounted Cash Flow model and the use of various data sources such as yield curves, credit risk spreads, etc. In addition, due to some of these assets and liabilities are not traded on the market, periodic reviews and analyzes are required to determine the suitability of the inputs and determined fair values.

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

39.	Fair Value of Financial assets and liabilities, continued:
(f)	Levels of other assets and liabilities:
---	---

The following table shows the estimated fair value of financial assets and liabilities not valued at their fair value, as of March 31, 2020 and December 31, 2019:

	Level 1<br> <br>Estimated Fair Value				Level 2<br> <br>Estimated Fair Value				Level 3<br> <br>Estimated Fair Value				Total<br> <br>Estimated Fair Value
	March		December		March		December		March		December		March		December
	2020		2019		2020		2019		2020		2019		2020		2019
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Assets
Cash and due from banks		2,780,469		2,392,166		—		—		—		—		2,780,469		2,392,166
Transactions in the course of collection		520,711		584,672		—		—		—		—		520,711		584,672
Investments under resale agreements		55,441		142,329		—		—		—		—		55,441		142,329
Subtotal		3,356,621		3,119,167		—		—		—		—		3,356,621		3,119,167
Loans and advances to banks
Domestic banks		159,942		149,953		—		—		—		—		159,942		149,953
Central Bank		800,000		630,053		—		—		—		—		800,000		630,053
Foreign banks		—		—		—		—		382,484		358,542		382,484		358,542
Subtotal		959,942		780,006		—		—		382,484		358,542		1,342,426		1,138,548
Loans to customers, net
Commercial loans		—		—		—		—		16,678,838		15,988,330		16,678,838		15,988,330
Residential mortgage loans		—		—		—		—		9,527,695		9,888,506		9,527,695		9,888,506
Consumer loans		—		—		—		—		4,131,103		4,215,509		4,131,103		4,215,509
Subtotal		—		—		—		—		30,337,636		30,092,345		30,337,636		30,092,345
Total		4,316,563		3,899,173		—		—		30,720,120		30,450,887		35,036,683		34,350,060
Liabilities
Current accounts and other demand deposits		11,869,854		11,326,133		—		—		—		—		11,869,854		11,326,133
Transactions in the course of payment		482,664		352,121		—		—		—		—		482,664		352,121
Obligations under repurchase agreements		345,808		308,734		—		—		—		—		345,808		308,734
Savings accounts and time deposits		—		—		—		—		11,474,071		10,795,125		11,474,071		10,795,125
Borrowings from banks		—		—		—		—		1,696,181		1,555,129		1,696,181		1,555,129
Other financial obligations		—		—		—		—		123,393		160,361		123,393		160,361
Subtotal		12,698,326		11,986,988		—		—		13,293,645		12,510,615		25,991,971		24,497,603
Debt Issued
Letters of credit for residential purposes		—		—		9,831		11,081		—		—		9,831		11,081
Letters of credit for general purposes		—		—		592		725		—		—		592		725
Bonds		—		—		8,400,813		8,340,272		—		—		8,400,813		8,340,272
Subordinated bonds		—		—		—		—		929,488		1,004,621		929,488		1,004,621
Subtotal		—		—		8,411,236		8,352,078		929,488		1,004,621		9,340,724		9,356,699
Total		12,698,326		11,986,988		8,411,236		8,352,078		14,223,133		13,515,236		35,332,695		33,854,302

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

39.	Fair Value of Financial Assets and Liabilities, continued:
(f)	Levels of other assets and liabilities, continued:
---	---

The Bank determines the fair value of these assets and liabilities according to the following:

·	Short-term assets and liabilities: For assets and liabilities with short-term maturity, it is assumed<br>that the book values approximate to their fair value. This assumption is applied to the following assets and liabilities:
Assets:	Liabilities:
---	---
- Cash and deposits in banks	- Current accounts and other demand deposits
- Transactions in the course of collection	- Transactions in the course of payments
- Investments under resale agreements	- Obligations under repurchase agreements
- Loans and advance to domestic banks
·	Loans to Customers and Advance to foreign banks: Fair value is determined by using the discounted<br>cash flow model and internally generated discount rates, based on internal transfer rates derived from our internal transfer price<br>process. Once the present value is determined, we deduct the related loan loss allowances in order to incorporate the credit risk<br>associated with each contract or loan. As we use internally generated parameters for valuation purposes, we categorize these instruments<br>in Level 3.
---	---
·	Letters of Credit and Bonds: In order to determine the present value of contractual cash flows,<br>we apply the discounted cash flow model by using market interest rates that are available in the market, either for the instruments<br>under valuation or instruments with similar features that fit valuation needs in terms of currency, maturities and liquidity. The<br>market interest rates are obtained from third party price providers widely used by the market. As a result of the valuation technique<br>and the quality of inputs (observable) used for valuation, we categorize these financial liabilities in Level 2.
---	---
·	Saving Accounts, Time Deposits, Borrowings from Financial Institutions, Subordinated Bonds and<br>Other borrowings financial: The discounted cash flow model is used to obtain the present value of committed cash flows by applying<br>a bucket approach and average adjusted discount rates that derived from both market rates for instruments with similar features<br>and our internal transfer price process. As we use internally generated parameters and/or apply significant judgmental analysis<br>for valuation purposes, we categorize these financial liabilities in Level 3.
---	---

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

39.	Fair Value of Financial Assets and Liabilities, continued:
(g)	Offsetting of financial assets and liabilities:
---	---

The Bank trades financial derivatives with foreign counterparties using ISDA Master Agreement (International Swaps and Derivatives Association, Inc.), under legal jurisdiction of the City of New York – USA or London – United Kingdom. Legal framework in these jurisdictions, along with documentation mentioned, it allows Banco de Chile the right to anticipate the maturity of the transaction and then, offset the net value of those transactions in case of default of counterparty. Additionally, the Bank has negotiated with these counterparties an additional annex (CSA Credit Support Annex), that includes other credit mitigating, such as entering margins on a certain amount of net value of transactions, early termination (optional or mandatory) of transactions at certain dates in the future, coupon adjustment of transaction in exchange for payment of the debtor counterpart over a certain threshold amount, etc.

Below are detail the contracts susceptible to offset:

	Fair Value				Negative Fair Value of contracts with right to offset						Positive Fair Value of<br> contracts with right to offset						Financial Collateral						Net Fair Value
	March		December		March			December			March			December			March			December			March		December
	2020		2019		2020			2019			2020			2019			2020			2019			2020		2019
	MCh$		MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$		MCh$
Derivative financial assets		4,757,187		2,786,215		(912,603	)		(952,762	)		(2,621,332	)		(1,161,208	)		(137,835	)		(43,337	)		1,085,417		628,908
Derivative financial liabilities		4,721,257		2,818,121		(912,603	)		(952,762	)		(2,621,332	)		(1,161,208	)		(700,238	)		(418,988	)		487,084		285,163

NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

40.	Maturity of Assets and Liabilities:

The table below details the main financial assets and liabilities grouped in accordance with their remaining maturity, including accrued interest as of March 31, 2020 and December 31, 2019, respectively. As these are for trading and available-for-sale instruments are included at their fair value:

	As of March 31, 2020
	Up to 1 <br> month		Over 1 <br> month and <br> up to 3 <br> months		Over 3 <br> month and <br> up to 12 <br> months		Subtotal up <br> to 1 year		Over 1 year <br> and up to 3 years		Over 3 year <br> and up to 5 years		Over<br> <br>5 years		Subtotal over <br> 1 year		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Assets
Cash and due from banks		2,780,469		—		—		2,780,469		—		—		—		—		2,780,469
Transactions in the course of collection		520,711		—		—		520,711		—		—		—		—		520,711
Financial Assets held-for-trading		1,690,563		—		—		1,690,563		—		—		—		—		1,690,563
Investments under resale agreements		25,360		5,548		24,533		55,441		—		—		—		—		55,441
Derivative instruments		233,472		556,032		1,157,898		1,947,402		993,881		662,917		1,152,987		2,809,785		4,757,187
Loans and advances to banks (*)		1,097,515		99,137		146,971		1,343,623		—		—		—		—		1,343,623
Loans to customers (*)		4,011,415		2,913,577		5,760,402		12,685,394		5,869,518		3,275,113		9,032,810		18,177,441		30,862,835
Financial assets available-for-sale		29,012		273,332		986,970		1,289,314		106,668		23,548		212,699		342,915		1,632,229
Financial assets held-to-maturity		—		—		—		—		—		—		—		—		—
Total financial assets		10,388,517		3,847,626		8,076,774		22,312,917		6,970,067		3,961,578		10,398,496		21,330,141		43,643,058
	As of December 31, 2019
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Up to 1 <br> month		Over 1 <br> month and <br> up to 3 <br> months		Over 3 <br> month and <br> up to 12 <br> months		Subtotal up <br> to 1 year		Over 1 year <br> and up to 3 years		Over 3 year <br> and up to 5 years		Over<br> <br>5 years		Subtotal over <br> 1 year		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Assets
Cash and due from banks		2,392,166		—		—		2,392,166		—		—		—		—		2,392,166
Transactions in the course of collection		584,672		—		—		584,672		—		—		—		—		584,672
Financial Assets held-for-trading		1,872,355		—		—		1,872,355		—		—		—		—		1,872,355
Investments under resale agreements		102,057		29,393		10,879		142,329		—		—		—		—		142,329
Derivative instruments		158,873		314,446		621,036		1,094,355		543,469		411,470		736,921		1,691,860		2,786,215
Loans and advances to banks (*)		876,119		97,585		166,487		1,140,191		—		—		—		—		1,140,191
Loans to customers (*)		4,161,262		2,340,320		5,685,646		12,187,228		5,624,031		3,198,639		9,009,572		17,832,242		30,019,470
Financial assets available-for-sale		23,786		225,772		779,872		1,029,430		106,930		30,080		191,406		328,416		1,357,846
Financial assets held-to-maturity		—		—		—		—		—		—		—		—		—
Total financial assets		10,171,290		3,007,516		7,263,920		20,442,726		6,274,430		3,640,189		9,937,899		19,852,518		40,295,244
(*)	These balances are presented without deduction of their respective provisions, which amount to Ch$705,866 million (Ch$685,418<br>million in December 2019) for loans to customers and Ch$869 million (Ch$758 million in December 2019) for borrowings from financial<br>institutions.
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NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

40.	Maturity of Assets and Liabilities, continued:
	As of March 31, 2020
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Up to 1<br> <br>month		Over 1 <br> month and <br> up to 3 <br> months		Over 3 <br> month and <br> up to 12 <br> months		Subtotal up <br> to 1 year		Over 1 year <br> and up to 3 years		Over 3 year <br> and up to 5 years		Over<br> <br>5 years		Subtotal <br> over 1 year		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Liabilities
Current accounts and other demand deposits		11,869,854		—		—		11,869,854		—		—		—		—		11,869,854
Transactions in the course of payment		482,664		—		—		482,664		—		—		—		—		482,664
Obligations under repurchase agreements		343,861		452		1,495		345,808		—		—		—		—		345,808
Savings accounts and time deposits (**)		6,386,968		2,343,869		2,174,669		10,905,506		305,329		633		243		306,205		11,211,711
Derivative instruments		251,178		490,838		1,176,979		1,918,995		1,053,505		681,120		1,067,637		2,802,262		4,721,257
Borrowings from financial institutions		264,738		346,217		985,724		1,596,679		107,142		—		—		107,142		1,703,821
Debt issued:
Mortgage bonds		883		1,222		2,200		4,305		3,618		1,359		501		5,478		9,783
Bonds		448,615		162,132		465,907		1,076,654		1,520,459		1,802,714		3,916,609		7,239,782		8,316,436
Subordinate bonds		5,833		100,723		15,926		122,482		35,130		18,748		721,646		775,524		898,006
Other financial obligations		105,168		2,622		6,018		113,808		6,518		1,348		—		7,866		121,674
Lease liabilities		2,390		4,792		21,068		28,250		50,861		26,116		36,207		113,184		141,434
Total financial liabilities		20,162,152		3,452,867		4,849,986		28,465,005		3,082,562		2,532,038		5,742,843		11,357,443		39,822,448
	As of December 31, 2019
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Up to 1 <br> month		Over 1 <br> month and <br> up to 3 <br> months		Over 3 <br> month and <br> up to 12 <br> months		Subtotal up <br> to 1 year		Over 1 year <br> and up to 3 years		Over 3 year <br> and up to 5<br> years		Over<br> <br>5 years		Subtotal <br> over 1 year		Total
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$
Liabilities
Current accounts and other demand deposits		11,326,133		—		—		11,326,133		—		—		—		—		11,326,133
Transactions in the course of payment		352,121		—		—		352,121		—		—		—		—		352,121
Obligations under repurchase agreements		298,711		8,583		1,440		308,734		—		—		—		—		308,734
Savings accounts and time deposits (**)		6,130,583		1,979,110		2,224,778		10,334,471		281,384		492		421		282,297		10,616,768
Derivative instruments		155,991		237,743		616,472		1,010,206		608,516		469,861		729,538		1,807,915		2,818,121
Borrowings from financial institutions		69,711		349,478		1,049,781		1,468,970		94,307		—		—		94,307		1,563,277
Debt issued:
Mortgage bonds		1,102		1,212		2,622		4,936		3,868		1,579		515		5,962		10,898
Bonds		423,966		211,648		413,485		1,049,099		1,460,318		1,746,745		3,656,459		6,863,522		7,912,621
Subordinate bonds		3,041		2,460		115,933		121,434		38,525		18,251		711,685		768,461		889,895
Lease liabilities		140,449		1,436		6,490		148,375		6,383		1,471		—		7,854		156,229
Other financial obligations		2,353		4,776		20,841		27,970		51,571		28,463		38,009		118,043		146,013
Total financial liabilities		18,904,161		2,796,446		4,451,842		26,152,449		2,544,872		2,266,862		5,136,627		9,948,361		36,100,810
(**)	Excludes term saving accounts, which amount to Ch$257,947<br>million (Ch$239,850 million in December 2019).
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NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS, continued

(Free translation of Interim Consolidated Financial Statements originally issued in Spanish)

41.	Subsequent Events:

On April 20, 2020, the subsidiary Banchile Administradora General de Fondos S.A. reported that in Ordinary Session held that day, the Board was given notice of and accepted the resignation presented by Mr. Francisco Javier Brancoli Bravo to his position as Director of the company. On the occasion of the aforementioned resignation, the Board of Directors agreed to appoint Mr. Paul Javier Fürst Gwinner as the new Director.

In Management’s opinion, there are no others significant subsequent events that affect or could affect the Interim Consolidated Financial Statements of Banco de Chile and its subsidiaries between March 31, 2020 and the date of issuance of these Interim Consolidated Financial Statements.

Héctor Hernández G.<br><br> <br>General Accounting Manager	Eduardo Ebensperger O.<br><br> <br>Chief Executive Officer

102

Bank Of Chile 6-K, filed Apr 30, 2020

About this 6-K