Bank Of Chile (BCH) 6-K, filed Jul 30, 2020

FORM 6-KSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

Report of Foreign Private Issuer

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

of the Securities Exchange Act of 1934

For the month of July, 2020

Commission File Number 001-15266

BANK OFCHILE

(Translation of registrant’s name into English)

Ahumada 251

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 June 30, 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: July 29, 2020

	Banco de Chile
	/S/ Eduardo Ebensperger O.
By:	Eduardo Ebensperger O.
	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		F-1
Interim Consolidated Statements of Income		F-2
Interim Consolidated Statements of Other Comprehensive Income		F-3
Interim Consolidated Statement of Changes in Equity		F-4
Interim Consolidated Statements of Cash Flows		F-5
1.	Company information:	F-6
2.	Legal regulations, basis of preparation and Other information:	F-7
3.	New Accounting Pronouncements:	F-10
4.	Changes in Accounting Policies and Disclosures:	F-17
5.	Relevant Events:	F-18
6.	Business Segments:	F-21
7.	Cash and Cash Equivalents:	F-24
8.	Financial Assets Held-for-trading:	F-25
9.	Investments under resale agreements and obligations under repurchase agreements:	F-26
10.	Derivative Instruments and Accounting Hedges:	F-28
11.	Loans and Advances to Banks, net:	F-34
12.	Loans to Customers, net:	F-35
13.	Investment Securities:	F-41
14.	Investments in Other Companies:	F-43
15.	Intangible Assets:	F-45
16.	Fixed assets, leased assets and lease liabilities:	F-47
17.	Current Taxes and Deferred Taxes:	F-52
18.	Other Assets:	F-56
19.	Current Accounts and Other Demand Deposits:	F-57
20.	Savings Accounts and Time Deposits:	F-57
21.	Borrowings from Financial Institutions:	F-58
22.	Debt Issued:	F-59
23.	Other Financial Obligations:	F-63
24.	Provisions:	F-63
25.	Other Liabilities:	F-67
26.	Contingencies and Commitments:	F-68
27.	Equity:	F-73
28.	Interest Revenue and Expenses:	F-76
29.	Income and Expenses from Fees and Commissions:	F-78
30.	Net Financial Operating Income:	F-79
31.	Foreign Exchange Transactions, Net:	F-76
32.	Provisions for Loan Losses:	F-80
33.	Personnel Expenses:	F-81
34.	Administrative Expenses:	F-82
35.	Depreciation, Amortization and Impairment:	F-83
36.	Other Operating Income:	F-84
37.	Other Operating Expenses:	F-85
38.	Related Party Transactions:	F-86
39.	Fair Value of Financial Assets and Liabilities:	F-91
40.	Maturity of Assets and Liabilities:	F-104
41.	Subsequent Events:	F-105

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATEDSTATEMENTS OF FINANCIAL POSITION

For the periods ended June 30, 2020 and December 31, 2019

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

(Expressed in million of Chilean pesos)

		June		December
	Notes	2020		2019
		MCh		MCh
ASSETS
Cash and due from banks	7
Transactions in the course of collection	7
Financial assets held-for-trading	8
Investment under resale agreements	9
Derivative instruments	10
Loans and advances to banks	11
Loans to customers, net	12
Financial assets available-for-sale	13
Financial assets held-to-maturity	13
Investments in other companies	14
Intangible assets	15
Property and equipment	16
Leased assets	16
Current tax assets	17
Deferred tax assets	17
Other assets	18
TOTAL ASSETS
LIABILITIES
Current accounts and other demand deposits	19
Transactions in the course of payment	7
Obligations under repurchase agreements	9
Savings accounts and time deposits	20
Derivative instruments	10
Borrowings from financial institutions	21
Debt issued	22
Other financial obligations	23
Lease liabilities	16
Current tax liabilities	17
Deferred tax liabilities	17
Provisions	24
Other liabilities	25
TOTAL LIABILITIES
EQUITY	27
Attributable to Bank’s Owners:
Capital
Reserves
Other comprehensive income			)		)
Retained earnings:
Retained earnings from previous years
Income for the period
Less:
Provision for minimum dividends			)		)
Subtotal
Non-controlling interests
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY

All values are in US Dollars.

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

F-1

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF INCOME

For the six-month ended June 30, 2020 and 2019

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

(Expressed in million of Chilean pesos)

		June	June
	Notes	2020	2019
		MCh	MCh
Interest revenue	28
Interest expense	28
Net interest income
Income from fees and commissions	29
Expenses from fees and commissions	29
Net fees and commission income
Net financial operating income	30
Foreign exchange transactions, net	31
Other operating income	36
Total operating revenues
Provisions for loan losses	32
OPERATING REVENUES, NET OF PROVISIONS FOR LOAN LOSSES
Personnel expenses	33
Administrative expenses	34
Depreciation and amortization	35
Impairment	35
Other operating expenses	37
TOTAL OPERATING EXPENSES
NET OPERATING INCOME
Income attributable to associates	14
Income before income tax
Income tax	17
NET INCOME FOR THE PERIOD
Attributable to:
Bank’s Owners	27
Non-controlling interests
Net income per share attributable to Bank’s Owners:
Basic net income per share	27
Diluted net income per share	27

All values are in US Dollars.

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

F-2

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF

OTHER COMPREHENSIVE INCOME

For the six-month ended June 30, 2020 and 2019

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

(Expressed in million of Chilean pesos)

		June		June
		2020		2019
	Notes	MCh		MCh
NET INCOME FOR THE PERIOD
OTHER COMPREHENSIVE INCOME THAT WILL BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS
Net gains (losses) on available-for-sale instruments valuation	13
Net gains (losses) on derivatives held as cash flow hedges	10		)		)
Subtotal Other comprehensive income before income taxes			)		)
Income tax relating to the components of other comprehensive income that are reclassified in income for the period
Total other comprehensive income items that will be reclassified subsequently to profit or loss			)		)
OTHER COMPREHENSIVE INCOME THAT WILL NOT BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS
Adjustment for defined benefit plans	24		)		)
Subtotal other comprehensive income before income taxes			)		)
Income tax relating to the components of other comprehensive income that will not be reclassified to income for the period	17
Total other comprehensive income items that will not be reclassified subsequently to profit or loss			)		)
CONSOLIDATED COMPREHENSIVE INCOME FOR THE PERIOD
Attributable to:
Bank’s Owners
Non-controlling interests

All values are in US Dollars.

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

F-3

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CHANGESIN EQUITY

For the six-month ended June 30, 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> Capital	Other<br> reserves		Reserves<br> from earnings	Unrealized<br> gains (losses) on available-for-sale		Derivatives<br> cash flow hedge		Income<br> Tax			Retained<br> earnings from previous period		Income<br> (losses) for the period		Provision<br> for minimum dividends		Attributable<br> to equity holders of the parent		Non-controlling<br> interest	Total<br> equity
		MCh	MCh		MCh	MCh		MCh					MCh		MCh		MCh		MCh		MCh	MCh
Balances<br> as of December 31, 2018							)		)		14,208							)
Retention of profits											—					)
Retention (release) of<br> profits according to bylaws											—					)
Dividends distributions<br> and paid	27										—					)				)			)
Defined benefit plans<br> adjustment, net				)							—									)			)
Other comprehensive income:
Derivatives cash flow<br> hedge	27								)		6,843									)			)
Valuation adjustment<br> on available-for-sale instruments	27										(4,778	)
Equity effect change in<br> accounting policy											—			)						)			)
Income for the period<br> 2019	27										—
Provision<br> for minimum dividends											—							)		)			)
Balances as of June 30,<br> 2019									)		16,273							)
Other comprehensive income:
Defined benefit plans<br> adjustment, net				)							—									)			)
Derivatives cash flow<br> hedge									)		3,295									)			)
Valuation adjustment on<br> available-for-sale instruments							)				1,044									)			)
Income for the period<br> 2019											—
Provision<br> for minimum dividends											—							)		)			)
Balances as of December<br> 31, 2019									)		20,612							)
Retention of profits	27										—					)
Dividends distributions<br> and paid	27										—					)				)			)
Other comprehensive income:
Defined benefit plans<br> adjustment, net				)							—									)			)
Derivatives cash flow<br> hedge, net	27								)		12,182									)			)
Valuation adjustment<br> on available-for-sale instruments	27										(1,581	)
Income for the period<br> 2020	27										—
Provision<br> for minimum dividends	27										—							)		)			)
Balances<br> as of June 30, 2020									)		31,213							)

All values are in US Dollars.

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

F-4

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASHFLOWS

For the six-month ended June 30, 2020 and 2019

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

(Expressed in million of Chilean pesos)

		June		June
		2020		2019
	Notes	MCh		MCh
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the period
Charges (credits) to income that do not represent cash flows:
Depreciation and amortization	35
Impairment	35
Provision for loans and accounts receivable from customers and owed by banks	32
Provision of contingent loans	32
Additional provisions	32
Fair value adjustment of financial assets held-for-trading			)		)
Changes in assets and liabilities by deferred taxes	17		)		)
(Gain) loss attributable to investments in companies with significant influence, net	14		)		)
(Gain) loss from sales of assets received in lieu of payment,net	36		)		)
(Gain) loss on sales of property and equipment, net	36		)		)
Charge-offs of assets received in lieu of payment	37
Other charges (credits) to income that do not represent cash flows
Net changes in exchange rate, interest and fees accrued on assets and liabilities					)
Changes in assets and liabilities that affect operating cash flows:
(Increase) decrease in loans and advances to banks, net			)
(Increase) decrease in loans to customers			)		)
(Increase) decrease in financial assets held-for-trading, net
(Increase) decrease in other assets and liabilities			)
Increase (decrease) in current account and other demand deposits
Increase (decrease) in transactions from reverse repurchase agreements			)		)
Increase (decrease) in savings accounts and time deposits			)
Sale of assets received in lieu of payment or adjudicated
Total cash flows from operating activities			)
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in financial assets available-for-sale, net			)		)
Payments for lease agreements	16		)		)
Net changes in leased assets			)		)
Purchases of property and equipment	16		)		)
Sales of property and equipment
Acquisition of intangible assets	15		)		)
Acquisition of investments in companies	14
Dividends received from investments in companies	14
Total cash flows from investing activities			)		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of letters of credit			)		)
Issuance of bonds	22
Redemption of bonds			)		)
Dividends paid	27		)		)
Increase (decrease) in borrowings from foreign financial institutions			)
Increase (decrease) in other financial obligations			)
Increase (decrease) in other obligations with Central Bank of Chile
Payment of other long-term borrowings			)		)
Total cash flows from financing activities
TOTAL NET POSITIVE CASH FLOWS FOR THE PERIOD
Effect of exchange rate changes
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period	7

All values are in US Dollars.

	June		June
	2020		2019
Operational Cash flow interest:	MCh		MCh
Interest received
Interest paid		)		)

All values are in US Dollars.

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

F-5

BANCO DE CHILE AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(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 June 30, 2020 were approved by the Directors on July 29, 2020.

F-6

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL 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:
---	---

---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
							Indirect				Total
			Functional		December		June		December		June		December
RUT	Subsidiaries	Country	Currency		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

All values are in US Dollars.

F-7

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

2.	Legal regulations, basis of preparation and Other information, 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 11, 12 and 32);
2.	Useful life of intangible, property and equipment and leased assets and lease liabilities (Notes<br>15 and 16);
---	---
3.	Income taxes and deferred taxes (Note 17);
---	---
4.	Provisions (Note 24);
---	---
5.	Contingencies and Commitments (Note 26);
---	---
6.	Fair value of financial assets and liabilities (Note 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 June 30, there have been no significant changes in the estimates made.

(d)	Seasonality or Cyclical Character of the Transactions of 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 six-month period ended June 30, 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.

F-8

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

2.	Legal regulations, basis of preparation and Other information, continued:
(f)	Leases, 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.

F-9

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL 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.

IAS 1 Presentation of FinancialStatements and IAS 8 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.

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

F-10

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

3.	New Accounting Pronouncements, continued:

Amendment to IFRS 16 Leases,for facilities granted to lessees related to Covid-19

During May 2020, the IASB issued the amendment to IFRS 16 Leases, to make it easier for lessees to account for changes in leases, due to the pandemic declared by COVID-19.

The amendment adds a practical simplification that deviates from the requirements in IFRS 16, and is provided only to give lessees practical relief during COVID-19. Therefore, it is not mandatory and empowers the lessee to choose whether or not to use practical simplification.

A lessee making this election must recognize in the accounting the changes resulting from the reductions in the rental payment, directly related to the Covid-19, consistent with the treatment that currently exists in the standard, to reflect a modification that does not mean a change in the lease contract.

Lessees are required to retrospectively apply the amendment, recognizing any differences that arise from initial application in the opening balance of retained earnings at the beginning of the annual reporting period from which the lessee first applies the amendment.

The amendment is applicable to the annual fiscal years beginning on or after June 1, 2020.

The implementation of this amendment had no impact for Banco de Chile and its subsidiaries.

Accounting Standards issuedby the CMF.

Circular No. 2,247. Foreclosedassets or received in lieu of payment. The sale period is extended.

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. This circular is part of the work being done by the CMF in face of the worldwide outbreak of COVID19 virus.

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.

F-11

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

3.	New Accounting Pronouncements, continued:

Circular No. 2,248. Equityfor legal and regulatory purposes. Treatment of guarantees in favor of third parties in bilateral compensation agreements.

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.

Circular No. 2,250. Equityfor legal and regulatory purposes. It allows adding to the additional provisions a proportion of the State guarantees.

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.

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

Circular No. 2,252. Aspectsrelated to the Guarantee Lines COVID-19 of the Guarantee Fund for Small and Medium Entrepreneurs (“FOGAPE”), regardingprovisions and other matters.

On April 30, 2020, the CMF published this circular that regulates aspects related to the FOGAPE Guarantee Lines COVID-19, addressing the following matters:

1)	Exceptional measures for the treatment of loan provisions in installments of the commercial portfolio;
2)	The classification of the debtors and the calculation of the default;
---	---
3)	The establishment of procedures to control the eligibility conditions of the debtors;
---	---
4)	The destination of the financing and;
---	---
5)	Sending periodic information to the CMF incorporating news regulatory files.
---	---

These modifications are valid until October 31, 2021.

F-12

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

3.	New Accounting Pronouncements, continued:

Circular No. 2,254. Reservein foreign currency, transitory disposition.

On May 8, 2020, the CMF published circular 2,254 which, in line with the provisions of the Central Bank of Chile (BCCh), which temporarily modified the rules on reserve requirements in foreign currency contained in Chapter 3.1 of the Compendium of Monetary Standards and Financial, the CMF adds a transitory disposition to Chapter 4-1 of the RAN on Reserve in foreign currency.

This transitory norm that will be applicable between the reserve periods that start from March 9, 2020 and that ends on September 8, 2020, indicates that the reserve requirement in foreign currency may also be constituted in euros or Japanese yen, valued by its equivalent in dollars.

Likewise, during said period the surpluses of reserve requirements in national currency may be used to cover reserve deficits in any foreign currency, converted by their equivalent in dollars.

In accordance with the provisions of the Central Bank, the remaining amount that arises when the amount of the obligations related to the technical reserve to be deducted is greater than the demand obligations in national currency affected by reserve requirements may be reduced from the term obligations.

Banco de Chile implemented this facility from the reserve period from May 9 to June 8, 2020.

Circular No. 2,257. It allowsthe recognition of the mortgage guarantee surplus for the housing in the standard provisions model as a risk mitigator of the groupalcommercial portfolio.

On May 22, 2020, the CMF published circular 2,257 which introduces modifications to Chapter B-1 “Provisions for credit risk” of the Compendium of Accounting Standards for Banks.

Due to the effects that the health crisis caused by the Covid-19 pandemic will have on banking activity and credit risk, the modification allowed the recognition of the mortgage guarantee surplus associated with mortgage loans in the standard model as a mitigator in the standard provisioning model for the groupal commercial portfolio. This is a temporary relaxation, once the new Basel III capital framework has been implemented, the standard provisions models will be reviewed to make them consistent with those used to calculate credit risk-weighted assets.

The application of this modification did not generate a material impact on the results of the period.

Other standards adopted.

Law 21,167

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

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

F-13

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

3.	New Accounting Pronouncements, continued:

Law 21,210

On February 24, 2020, Law 21,210 was published in the Official Journal, which modernizes the tax legislation, incorporating modifications to different legal texts, mainly the Tax Code, the Law on Income Tax and the Law on Sales and Services Tax (VAT).

In relation to the tax regime of income tax, the regime with partial credit imputation is maintained.

In terms of expenses necessary to produce the income of companies, a new definition is established, linking it to the interest, development or maintenance of the business, of the sole tax established in article 21 of the Income Law.

In relation to the VAT Law, one of the relevant changes corresponded to the incorporation of certain services related to entertainment, intermediation, software and other items that are carried out through digital platforms.

Another relevant modification refers to the land tax surcharge incorporated in Law 17,235, which taxes all the real estate that is registered in the taxpayer’s name, incorporating the real estate delivered in leasing with purchase option (Leasing).

The implementation of these legal changes will not have a significant impact on the Consolidated Financial Statements of Banco de Chile and its subsidiaries.

Other instructions issuedby the CMF – Management Letter

In the context of the circumstances facing the country due to the Covid-19 pandemic and the consequent state of catastrophe decreed and in order to facilitate the implementation by the banks of payment flexibilities for its debtors, the CMF on April 2, 2020 temporarily authorized, under certain conditions, exceptional measures to the treatment of the provisions of the credit operations for the credit portfolios evaluated as a group (mortgage, commercial and consumer) that have been renegotiated.

The validity of the exceptional period for the treatment of provisions for group portfolios begins on March 18, 2020 and ends on July 31, 2020, both dates inclusive. As a necessary condition to be able to use the relaxations in provisions, the banks must fully evaluate the financial and credit condition of the debtors who will be eligible for the granting of the relaxations conditions. In no case may the treatment include debtors in default in accordance with the provisions regulations. Additionally, the debtors eligible for the special treatment of provisions indicated will be those that are up to date or have a default of no more than 30 days in the month in which the rescheduling is performed, during the period of validity.

Exceptional treatment allows the entity to maintain the associated provisions in the standard matrix of provisions that corresponds at the time of reprogramming. On the other hand, in the case of consumer portfolios, the parameters of Expected Credit Loss (PI and PDI) may be maintained, according to the specific provisions models used by each institution.

These instructions were implemented during April 2020.

F-14

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

3.	New Accounting Pronouncements, continued:

Law 21,234

On May 29, 2020, Law No. 21,234 was published in the Official Journal, effective as of the same date, which modifies and replaces Law No. 20,009, limiting the liability of payment card holders or users and electronic transactions in the event of loss, theft, robbery or fraud.

This new law applies to users or holders of “Payment Methods” defined as all payment cards (debit, credit and pre-payment cards), whether or not they are issued by entities subject to the supervision of the CMF and electronic transactions, giving it a fairly broad definition, which includes any operations carried out by electronic means that cause charges, credits or money orders in different types of account.

Users or holders of Payment Methods are obliged to send a notice to the respective issuer, as soon as they become aware of a loss, theft, robbery or fraud that affects their payment methods. Immediately after receiving this notice, the issuer must proceed to block it.

In the case of operations subsequent to the notice, the user or owner will be exempt from liability, and the respective issuer must answer for them.

For operations prior to the notice, the user or owner will have a period of 30 business days following the notice, to claim them, being able to refer to operations carried out up to 120 calendar days prior to the date of the notice.

The burden of proof for operations that the user does not know to have authorized will always fall on the issuer, who is also prevented from offering users the purchase of insurance whose coverage corresponds to risks or claims that the issuer must assume in accordance with this law.

The implementation of this new law does not have significant impacts on the Consolidated Financial Statements.

3.1.2 New standards and interpretationsthat 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 June 30, 2020, are detailed below:

Accounting standards issuedby 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.

F-15

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

3.	New Accounting Pronouncements, continued:

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.

Limited Scope Amendments andAnnual Improvements 2018-2020.

In May 2020, the IASB published a package of amendments of limited scope, as well as the 2018-2020 Annual Improvements, whose changes clarify the wording or correct minor consequences, omissions or conflicts between the requirements of the Standards.

Among other modifications, it contains amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets which specify the costs that an entity should include when evaluating whether a contract will cause losses.

These amendments will be effective as of January 1, 2022 and it is estimated that Banco de Chile and its subsidiaries will not have significant impacts on the Interim Consolidated Financial Statements as a result of the application of these amendments.

Accounting standards issuedby the CMF.

Circular No. 2,243. AmendsCompendium of Accounting Standards for Banks.

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.
---	---

F-16

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

3.	New Accounting Pronouncements, continued:

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 equal to or greater than 90 days (Chapter B-2 of the CNC). Currently, the suspension<br>of the recognition of interests and UF indexation occurs after 180 days.
---	---
8)	Adaptation of the limitations and precisions to the use of IFRS contained in Chapter A-2 of the<br>CNC.
---	---

In accordance with that established under the Circular No. 2,249 dated April 20, 2020, 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 have structured an implementation project and have established various Committees to ensure its implementation. 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.

CMF informs the flexibilityof the Basel III implementation deadlines.

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.

Other laws enacted

On June 3, 2020, Law 21,236 regulating Financial Portability was published, which aims to facilitate people, micro and small businesses to change from one financial service provider to another, or from a financial product or service valid to another new contracted with the same provider, for deeming it convenient.

This new law will enter into force on September 8, 2020. To date, it is not possible to determine the impact that the implementation of this law will have.

4.	Changes in Accounting Policies and Disclosures:

During the period ended June 30, 2020, there have been no accounting changes other than those indicated in Note No. 3 related to transitional measures for the treatment of provisions of credit operations that have been reprogrammed.

F-17

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL 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.

F-18

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL 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)	On April 20, 2020, the subsidiary Banchile Administradora General de Fondos S.A. reported that<br>in Ordinary Session held that day, the Board was given notice of and accepted the resignation presented by Mr. Francisco Javier<br>Brancoli Bravo to his position as Director of the company. On the occasion of the aforementioned resignation, the Board of Directors<br>agreed to appoint Mr. Paul Javier Fürst Gwinner as the new Director.
---	---
g)	On June 19, 2020, the subsidiary Banchile Corredores de Bolsa S.A. reported that in an Ordinary<br>Session held that day, the Board of Directors appointed Mr. Jorge Antonio Carrasco De Groote as Director, replacing Mr. Fuad Jorge<br>Muvdi Arenas, who presented his resignation from the position of director.
---	---
h)	During March 2020, the World Health Organization (“WHO”) described the outbreak of<br>the new strain of coronavirus (“COVID-19”) as a pandemic. The global spread of this disease has forced the authorities<br>to take drastic sanitary and financial measures to contain and mitigate its effects on global health and economic 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.

F-19

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

5.	Relevant Events, continued:

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. Among the measures implemented by the Central Bank to deliver liquidity to the economy and support the flow of credit, are the establishment of the Conditional Credit Facility to Increase Placements (FCIC by its Spanish initials), as a special financial line for banking companies complemented by the activation of a “Liquidity Credit Line” (LCL) for which a limit equivalent to the Average Reserve Requirement in national currency of each entity is defined. The FCIC is available to banking companies that have commercial and consumer loans, subject to the granting by them of sufficient collateral guarantees in favor of the Central Bank. The limit for the FCIC line is up to 15% of the base portfolio (sum of commercial and consumer loans), which was expanded with the establishment of a second program announced during the month of June called FCIC2 with similar financial conditions to the first, aimed at deepening and extending commercial credit to respond to the prolongation of the health emergency caused by Covid-19. As of June 30, the Bank has made use of these financing facilities for an amount of Ch$3,110,703 million

The CMF, for its part, adopted measures tending to temporary flexibility 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. As of June 30, operations have been reprogrammed for an approximate amount of Ch$493,604 million.

During April 2020, the Guarantee Fund for Small Entrepreneurs (FOGAPE), announced the increase of its capital by up to US$3,000 million, in order to guarantee financing of up to US$25,000 million. The objective of this initiative has been to facilitate access to working capital loans for individuals and legal entities with annual sales of less than UF 1,000,000 affected by the COVID-19 pandemic. The guarantee coverage of these loans - differentiated according to sales tranche - is between 60% and 85% of financing, after applying a deductible that may not exceed 5% of the guaranteed amount. From the beginning of the program and until June 30, 2020, the Bank has carried out 22,363 operations for an aggregate amount of Ch$1,131,067 million.

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 service remote channels and the implementation of remote working for a large group of our employees.

While the potential impact of the pandemic on our operating results remains is 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 will be significant, it is not possible to determine their magnitude since they will depend on the duration and depth of the pandemic.

As a result of the prospective analysis of the effects of the spread of Covid-19, both domestically and internationally, as well as the effects of mitigation measures adopted by local and global authorities, during the second quarter of 2020 the Bank established Ch$70,000 million of additional, in accordance with current policy on the matter.

F-20

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 up to UF 70,000, where the product offering focuses primarily on consumer loans, commercial loans, checking accounts, credit cards, credit lines and mortgage loans.
Wholesale:	This segment focused on corporate clients and large companies, whose annual revenue exceed UF 70,000, where the product offering focuses primarily on commercial loans, checking accounts and liquidity management services, debt instruments, foreign trade, derivative contracts and leases.
Treasury:	This segment includes the associated revenues to the management of the investment portfolio and 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 activities complementary to the bank business. The companies that comprise this segment are:

Entity

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

F-21

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 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, the volume of each operation and its contribution<br>margin are considered, which in turn 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, the net margin includes the result<br>of interest and indexation from the accounting hedges.
●	The capital and its financial impacts on outcome have been assigned to each segment based on the<br>risk-weighted assets.
---	---
●	Operational expenses are reflected at the level of the different functional areas of the Bank.<br>The allocation of expenses from functional areas to business segments is done using different allocation criteria, at the level<br>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 June 30, 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.

F-22

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

6.	Business Segments, continued:

The following table presents the income by segment for the periods ended June 30, 2020 and 2019 for each of the segments defined above:

	Retail				Wholesale				Treasury				Subsidiaries				Subtotal				Consolidation adjustment				Total
	June		June		June		June		June		June		June		June		June		June		June		June		June		June
	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										)		)		)		)
Net commissions income (loss)										)		)										)		)
Financial and exchange operations results																						)		)
Other operating income																						)		)
Total operating revenue																						)		)
Provision for loan losses		)		)		)		)						)		)		)		)						)		)
Depreciation and amortization		)		)		)		)		)		)		)		)		)		)						)		)
Other operating expenses		)		)		)		)		)		)		)		)		)		)						)		)
Income attributable to associates
Income before income taxes
Income taxes																										)		)
Income after income taxes

All values are in US Dollars.

The following table presents assets and liabilities of the periods ended June 30, 2020 and December 31, 2019 by each segment defined above:

	Retail		Wholesale		Treasury		Subsidiaries		Subtotal		Consolidation adjustment				Total
	June	December	June	December	June	December	June	December	June	December	June		December		June	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												)		)
Current and deferred taxes
Total assets
Liabilities												)		)
Current and deferred taxes
Total liabilities

All values are in US Dollars.

F-23

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

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

	June		December
	2020		2019
	MCh		MCh
Cash and due from banks:
Cash (*)
Deposit in Chilean Central Bank (*)
Deposits in other domestic banks
Deposits abroad
Subtotal - Cash and due from banks
Net transactions in the course of collection		)
Highly liquid financial instruments (**)
Repurchase agreements (**)
Total cash and cash equivalents

All values are in US Dollars.

(*)	Amounts in cash funds and in Central Bank are regulatory<br>reserve deposits that the Bank must maintain as a monthly average.
(**)	It corresponds to negotiation instruments and repurchases<br>contracts that meet the definition of cash and cash equivalents.
---	---
(b)	Transactions 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:

	June		December
	2020		2019
	MCh		MCh
Assets
Documents drawn on other banks (clearing)
Funds receivable
Subtotal - assets
Liabilities
Funds payable		)		)
Subtotal - liabilities		)		)
Net transactions in the course of settlement		)

All values are in US Dollars.

F-24

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

8.	Financial Assets Held-for-trading:

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

	June	December
	2020	2019
	MCh	MCh
Instruments issued by the Chilean Government and Central Bank of Chile
Central Bank of Chile bonds
Central Bank of Chile promissory notes
Other instruments issued by the Chilean Government and Central Bank
Other instruments issued in Chile
Bonds from other domestic companies
Bonds from domestic banks
Deposits in domestic banks
Other instruments issued in Chile
Instruments issued Abroad
Instruments from foreign governments or central banks
Other instruments issued abroad
Mutual fund investments
Funds managed by related companies
Funds managed by third-party
Total

All values are in US Dollars.

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$125,324 million as of June 30, 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). Additionally, under this line are maintained instruments to comply with the requirements for the constitution of the technical reserve for an amount equivalent to Ch$1,430,000 million.

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$52,563 as of June 30, 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$78,343 million as of June 30, 2020 (Ch$251,158 million as of December 31, 2019). The repurchase agreements have an average expiration of 8 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$6,535 million as of June 30, 2020 (Ch$8,029 million as of December 31, 2019), which are presented as a reduction of the liability line item “Debt issued”.

F-25

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

9.	Investments under resale agreements and obligations under<br>repurchase agreements:
(a)	Rights arising from resale repurchase agreements: The Bank provides financing to its customers<br>through repurchase agreements and securities lending, in which the financial instrument serves as collateral. As of June 30, 2020<br>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
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	June	December	June	December	June	December	June	December	June	December	June	December	June	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
Central Bank promissory notes
Other instruments issued by the Chilean Government and Central Bank of Chile
Subtotal
Other Instruments issued in Chile
Deposit promissory notes from domestic banks
Mortgage bonds from domestic banks
Bonds from domestic banks
Deposits in domestic banks
Bonds from other Chilean companies
Other instruments issued in Chile
Subtotal
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

All values are in US Dollars.

Securities received:

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 June 30, 2020, the fair value of the instruments received amounts to Ch$46,116 million (Ch$142,370 million as of December, 2019).

F-26

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

9.	Investments under resale agreements and obligationsunder repurchase agreements, continued:
(b)	Obligations arising from repurchase agreements: The Bank obtains financing by selling financial<br>instruments and agreeing to repurchase them in the future, plus interest at a prefixed rate. As of June 30, 2020 and December 31,<br>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
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	June	December	June	December	June	December	June	December	June	December	June	December	June	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
Central Bank promissory notes
Other instruments issued by the Chilean Government and Central Bank of Chile
Subtotal
Other Instruments issued in Chile
Deposit promissory notes from domestic banks
Mortgage bonds from domestic banks
Bonds from domestic banks
Deposits in domestic banks
Bonds from other Chilean companies
Other instruments issued in Chile
Subtotal
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

All values are in US Dollars.

Securities sold:

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 June 30, 2020 amounts to Ch$237,481 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.

F-27

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

10.	Derivative Instruments and Accounting<br>Hedges:
(a)	As of June 30, 2020 and December 31,<br>2019, the Bank’s portfolio of derivative instruments is detailed as follows:
---	---

	Notional amount of contract with final expiration date in							Fair Value
As of June 30, 2020	Up to 1 month	Over 1 month and up to 3 months	Over 3 months and up to 12 months	Over<br>1 year and up to 3 years	Over<br>3 year and up to 5 years	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
Interest rate swap
Total derivatives held for hedging purposes
Derivatives held as cash flow hedges
Interest rate swap and cross currency swap
Total derivatives held as cash flow hedges
Trading derivatives
Currency forward
Interest rate swap
Interest rate swap and cross currency swap
Call currency options
Put currency options
Total trading derivatives
Total

All values are in US Dollars.

F-28

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

10.	Derivative Instruments and AccountingHedges, continued:
(a)	Portfolio of derivative<br>instruments, continued:
---	---

	Notional amount of contract with final expiration date in							Fair Value
As of December 31, 2019	Up to 1 month	Over 1 month and up to 3 months	Over 3 months and up to 12 months	Over<br>1 year and up to 3 years	Over<br>3 year and up to 5 years	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
Interest rate swap
Total derivatives held for hedging purposes
Derivatives held as cash flow hedges
Interest rate swap and cross currency swap
Total derivatives held as cash flow hedges
Trading derivatives
Currency forward
Interest rate swap
Interest rate swap and cross currency swap
Call currency options
Put currency options
Total trading derivatives
Total

All values are in US Dollars.

F-29

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

10.	Derivative Instruments and Accounting Hedges, continued:
(b)	Fair value 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 June 30, 2020 and December 31, 2019:

	June	December
	2020	2019
	MCh	MCh
Hedge element
Commercial loans
Corporate bonds
Hedge instrument
Cross currency swap
Interest rate swap

All values are in US Dollars.

(c)

Cash flow Hedges:

(c.1)

The Bank uses cross currency swaps to hedge the risk from variability of cash flows attributable to changes in the interest rates and foreign exchange of foreign banks obligations and bonds issued abroad in US Dollars, Hong Kong dollars, Swiss Franc, Japanese Yens, Peruvian Sol, Australian Dollars, Euros and Norwegian kroner. The cash flows of the cross currency swaps equal the cash 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.

F-30

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

10.	Derivative Instruments and Accounting Hedges, continued:

(c)	Cash flow Hedges, continued:
(c.2)	Below are the cash flows from bonds issued abroad objects<br>of this hedge and the cash flows of the asset part of the derivative instrument:
---	---
				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
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		December		June		December		June		December		June		December		June		December		June		December		June		December
		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
Hedge element
Outflows:
Corporate Bond									)		)		)		)		)		)		)		)		)		)
Corporate Bond HKD	)				)				)		)		)		)		)		)		)		)		)		)
Corporate Bond PEN					)		)		)		)		)		)		)		)		)		)		)		)
Corporate Bond CHF									)		)		)		)		)		)				)		)		)
Corporate Bond									)		)		)		)		)		)		)		)		)		)
Obligation	)		)		)		)		)		)		)		)										)		)
Corporate Bond							)		)		)		)		)		)		)		)		)		)		)
Corporate Bond AUD					)		)		)		)		)		)		)		)		)		)		)		)
Corporate Bond NOK									)		)		)		)		)		)		)		)		)		)
Hedge instrument
Inflows:
Cross Currency Swap
Cross Currency Swap HKD
Cross Currency Swap PEN
Cross Currency Swap CHF
Cross Currency Swap
Cross Currency Swap
Cross Currency Swap
Cross Currency Swap AUD
Cross Currency Swap NOK
Net cash flows

All values are in Euros.

F-31

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

10.	Derivative Instruments and Accounting Hedges, continued:
(c)	Cash flow Hedges, continued:
---	---
(c.2)	Below are the cash flows from underlying assets and the<br>cash flows of the liability part of the derivative instrument:
---	---
				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
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		December		June		December		June		December		June		December		June		December		June		December		June		December
		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
Hedge element
Inflows:
Cash flows in CLF
Hedge instrument
Outflows:
Cross Currency Swap HKD	)		)		)				)		)		)		)		)		)		)		)		)		)
Cross Currency Swap PEN					)		)		)		)		)		)		)		)		)		)		)		)
Cross Currency Swap							)		)		)		)		)		)		)		)		)		)		)
Cross Currency Swap									)		)		)		)		)		)		)		)		)		)
Cross Currency Swap CHF									)		)		)		)		)		)						)		)
Cross Currency Swap									)		)		)		)		)		)		)		)		)		)
Cross Currency Swap AUD					)		)		)		)		)		)		)		)		)		)		)		)
Cross Currency Swap NOK									)		)		)		)		)		)		)		)		)		)
Net cash flows

All values are in Japanese Yen.

F-32

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

10.	Derivative Instruments and Accounting Hedges, continued:
(c)	Cash flow 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 charge to equity amounting to Ch$45,119 million (charge to equity of Ch$25,344 million in June 30, 2019). The net effect of taxes charge to equity amounts to Ch$32,937 million (net charge to equity of Ch$18,501 million equity during the period June 2019).

The accumulated balance for this concept as of June 30, 2020 corresponds to a charge in equity amounted to Ch$126,159 million (charge to equity of Ch$81,040 million as of December 2019).

(c.4)	The effect of the cash flow hedging derivatives that offset the result of the hedged instruments<br>corresponds to a credit to income of Ch$107,463 million during the period 2020 (charge to results for Ch$36,663 million during<br>the June 2019 period).
(c.5)	As of June 30, 2020 and 2019, it not exist inefficiency in cash flow hedge, because both, hedge<br>item and hedge instruments, are mirrors of each other, it means that all variation of value attributable to rate and revaluation<br>components are netted totally.
---	---
(c.6)	As of June 30, 2020 and 2019, the Bank does not have hedges of net investments in foreign business.
---	---

F-33

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

11.	Loans and Advances to Banks, net:
(a)	At the end of each reporting period, the balances presented in the item “Loans and advances<br>to Banks” are as follows:
---	---
	June		December
---	---	---	---	---
	2020		2019
	MCh		MCh
Domestic Banks
Interbank loans of liquidity
Provisions for loans to domestic banks				)
Subtotal
Foreign Banks
Interbank loans commercial
Credits with third countries
Chilean exports trade loans
Provisions for loans to foreign banks		)		)
Subtotal
Central Bank of Chile
Central Bank deposits
Other Central Bank credits
Subtotal
Total

All values are in US Dollars.

(b)	The changes in provisions of the credits owed by the banks, during the periods 2020 and 2019, are<br>summarized as follows:
	Bank’s Location
---	---	---	---	---	---	---
Detail	Chile		Abroad		Total
	MCh		MCh		MCh
Balance as of January 1, 2019
Provisions established
Provisions released				)		)
Balance as of June 30, 2019
Provisions established
Provisions released		)		)		)
Balance as of December 31, 2019
Provisions established
Provisions released		)		)		)
Balance as of June 30, 2020

All values are in US Dollars.

F-34

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

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

As of June 30, 2020 and December 31, 2019, the portfolio of loans is composed as follows:

	As of June 30, 2020
	Assets before allowances				Allowances established
	Normal Portfolio	Substandard Portfolio	Non-Complying Portfolio	Total	Individual Provisions		Group Provisions		Total		Net assets
	MCh	MCh	MCh	MCh	MCh		MCh		MCh		MCh
Commercial loans
Commercial loans						)		)		)
Foreign trade loans						)		)		)
Current account debtors						)		)		)
Factoring transactions						)		)		)
Student loans								)		)
Commercial lease transactions (1)						)		)		)
Other loans and accounts receivable						)		)		)
Subtotal						)		)		)
Mortgage loans
Letters of credit								)		)
Endorsable mortgage loans								)		)
Other residential lending								)		)
Credit from ANAP
Residential lease transactions
Other loans and accounts receivable								)		)
Subtotal								)		)
Consumer loans
Consumer loans in installments								)		)
Current account debtors								)		)
Credit card debtors								)		)
Consumer lease transactions (1)								)		)
Other loans and accounts receivable								)		)
Subtotal								)		)
Total						)		)		)

All values are in US Dollars.

(1)	In this item, the Bank finances its customers purchases<br>of assets, including real estate and other personal property, through financial lease agreements. As of June 30, 2020 Ch$796,954<br>million correspond to finance leases for real estate and Ch$804,206 million correspond to finance leases for movable assets.

F-35

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

12.	Loans to Customers net, continued:
(a.i)	Loans 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		Total		Net assets
	MCh	MCh	MCh	MCh	MCh		MCh		MCh		MCh
Commercial loans
Commercial loans						)		)		)
Foreign trade loans						)		)		)
Current account debtors						)		)		)
Factoring transactions						)		)		)
Student loans								)		)
Commercial lease transactions (1)						)		)		)
Other loans and accounts receivable						)		)		)
Subtotal						)		)		)
Mortgage loans
Letters of credit								)		)
Endorsable mortgage loans								)		)
Other residential lending								)		)
Credit from ANAP
Residential lease transactions
Other loans and accounts receivable								)		)
Subtotal								)		)
Consumer loans
Consumer loans in installments								)		)
Current account debtors								)		)
Credit card debtors								)		)
Consumer lease transactions (1)								)		)
Other loans and accounts receivable								)		)
Subtotal								)		)
Total						)		)		)

All values are in US Dollars.

(1)	In this item, the Bank finances its customers purchases<br>of assets, including real estate and other personal property, through financial lease agreements. As of December 31, 2019 Ch$779,383<br>million correspond to finance leases for real estate and Ch$839,837 million correspond to finance leases for movable assets..

F-36

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

12.	Loans to Customers, net, continued:
(a.ii)	Impaired Portfolio:
---	---

As of June 30, 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
	June	December	June	December	June	December	June		December		June		December		June		December		June	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								)		)		)		)		)		)
Mortgage loans												)		)		)		)
Consumer loans												)		)		)		)
Total								)		)		)		)		)		)

All values are in US Dollars.

F-37

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

12.	Loans to Customers, continued:

(b)	Credit 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
Charge-offs		)		)		)		)		)
Sales or transfers of credits		)								)
Allowances established
Allowances released
Balance as of June 30, 2019
Charge-offs		)		)		)		)		)
Sales or transfers of credits
Allowances established
Allowances released
Balance as of December 31, 2019
Charge-offs		)		)		)		)		)
Sales or transfers of credits		)								)
Allowances established
Allowances released
Balance as of June 30, 2020

All values are in US Dollars.

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 of June 30, 2020 and December 31, 2019, the Bank and<br>its subsidiaries have made sales of loan portfolios. The effect in income is no more than 5% of net income before taxes, as described<br>in Note No. 12 (e).
2.	As of June 30, 2020 and December 31, 2019, the Bank and<br>its subsidiaries derecognized 100% of its portfolio of loans sold and on which all or substantially all of the risks and benefits<br>associated to these financial assets have been transferred (see Note No. 12 letter (e)).
---	---
3.	As of June 30, 2020, under the Commercial Loans item, operations are maintained that guarantee obligations maintained with the Central Bank of Chile as part of the Loan Increase Conditional Credit Facility (FCIC by its Spanish initials) program for an approximate amount of Ch$813,527 million. See Note No. 5 letter h).
---	---

F-38

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

12.	Loans to Customers, continued:
(c)	Finance 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 (*)
	June	December	June		December		June	December
	2020	2019	2020		2019		2020	2019
	MCh	MCh	MCh		MCh		MCh	MCh
Within one year				)		)
From 1 to 2 years				)		)
From 2 to 3 years				)		)
From 3 to 4 years				)		)
From 4 to 5 years				)		)
After 5 years				)		)
Total				)		)

All values are in US Dollars.

(*)	The net balance receivable does not include past-due portfolio<br>totaling Ch$10,013 million as of June 30, 2020 (Ch$6,674 million as 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 of loan portfolio:

During the period ended June 30, 2020 and the year ended 2019 has not purchases portfolio loans.

F-39

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

12.	Loans to Customers, continued:

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

During the periods 2020 and 2019 there have been operations of sale or transfer of the loan portfolio according to the following:

	As of June 30, 2020
	Carrying amount	Allowances		Sale price	Effect on income (loss) gain (*)
	MCh	MCh		MCh	MCh
Sale of current loans			)
Sale of written – off loans
Total			)

All values are in US Dollars.

	As of June 30, 2019
	Carrying amount	Allowances		Sale price	Effect on income (loss) gain (*)
	MCh	MCh		MCh	MCh
Sale of current loans			)
Sale of written – off loans
Total			)

All values are in US Dollars.

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

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

F-40

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

13.	Investment Securities:

As of June 30, 2020 and December 31, 2019, investment securities classified as available-for-sale and held-to-maturity are detailed as follows:

	June 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
Promissory notes issued by the Central Bank of Chile
Other instruments of the Chilean Government and the Central Bank of Chile
Other instruments issued in Chile
Deposit promissory notes from domestics banks
Mortgage bonds from domestic banks
Bonds from domestic banks
Deposits from domestic banks
Bonds from other Chilean companies
Promissory notes issued by other Chilean companies
Other instruments issued in Chile
Instruments issued Abroad
Instruments from foreign governments or Central Banks
Other instruments
Total

All values are in US Dollars.

F-41

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

13.	Investment Securities, continued:

Instruments given as collateral as part of the Conditional Credit Facility to Increase Placements (FCIC by its Spanish initials) granted by the Central Bank of Chile in the amount of Ch$602,088 million as of June 30, 2020 are classified under Instruments of Other National Institutions. See Note No. 5 letter h).

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

As of June 30, 2020, the portfolio of financial assets available-for-sale includes an accumulated unrealized gain of Ch$9,689 million (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 June 30, 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:

	June		June
	2020		2019
	MCh		MCh
Unrealized gains
Realized gains reclassified to income		)		)
Subtotal
Income tax on other comprehensive income		)		)
Net effect in equity

All values are in US Dollars.

F-42

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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$51,273 million as of June 30, 2020 (Ch$50,758<br>million as of December 31, 2019), as follows:
---	---
								Investment
---	---	---	---	---	---	---	---	---	---	---	---	---
		Ownership Interest				Equity		Assets		Income
		June		December		June	December	June	December	June		June
		2020		2019		2020	2019	2020	2019	2020		2019
Company Associates	Shareholder	%		%		MCh	MCh	MCh	MCh	MCh		MCh
Transbank S.A.	Banco de Chile		26.16		26.16
Soc. Operadora de Tarjetas de Crédito Nexus S.A.	Banco de Chile		29.63		29.63
Administrador Financiero del Transantiago S.A.	Banco de Chile		20.00		20.00
Redbanc S.A.	Banco de Chile		38.13		38.13						)
Centro de Compensación Automatizado S.A.	Banco de Chile		33.33		33.33
Sociedad Imerc OTC S.A.	Banco de Chile		12.33		12.33						)
Sociedad Interbancaria de Depósitos de Valores S.A.	Banco de Chile		26.81		26.81
Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A.	Banco de Chile		15.00		15.00
Subtotal Associates
Joint Ventures
Servipag Ltda.	Banco de Chile		50.00		50.00						)
Artikos Chile S.A.	Banco de Chile		50.00		50.00
Subtotal Joint Ventures
Subtotal
Investments valued at cost (1)
Bolsa de Comercio de Santiago S.A.	Banchile Corredores de Bolsa
Banco Latinoamericano de Comercio Exterior S.A. (Bladex)	Banco de Chile
Bolsa Electrónica de Chile S.A.	Banchile Corredores de Bolsa
Sociedad de Telecomunicaciones Financieras Interbancarias Mundiales (Swift)	Banco de Chile
CCLV Contraparte Central S.A.	Banchile Corredores de Bolsa
Subtotal
Total

All values are in US Dollars.

(1)	Income from investments<br>valorized at cost, corresponds to income recognized on cash basis (dividends).

F-43

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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:
---	---
	June		June
---	---	---	---	---
	2020		2019
	MCh		MCh
Initial book value
Acquisition of investments in companies
Participation on income in companies with significant influence and joint control
Dividends receivable
Dividends Minimum
Dividends received		)		)
Others
Total

All values are in US Dollars.

(c)	During the period ended as of June 30, 2020 and 2019 no impairment has incurred in these investments.

F-44

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

15.	Intangible Assets:
(a)	As of June 30, 2020 and December 31, 2019 intangible assets<br>are composed as follows:
---	---
	Useful Life		Average remaining amortization		Gross balance		Accumulated Amortization				Net balance
---	---	---	---	---	---	---	---	---	---	---	---	---
	June	December	June	December	June	December	June		December		June	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				)		)
Total								)		)

All values are in US Dollars.

F-45

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

15.	Intangible Assets, continued:

(b)	The change of intangible assets as of June 30, 2020 and December 31, 2019 are as follows:
	Software or computer programs
---	---	---	---	---
	June		December
	2020		2019
	MCh		MCh
Gross Balance
Balance as of January 1,
Acquisition
Disposals/ write-downs		)		)
Reclassification		)		)
Impairment (*)				)
Total
Accumulated Amortization
Balance as of January 1,		)		)
Amortization for the period (*)		)		)
Disposals/ write-downs
Reclassification
Total		)		)
Balance Net

All values are in US Dollars.

(*)	See Note No. 35 Depreciation, amortization and impairment.
(c)	As of June 30, 2020 and December 31, 2019, the Bank maintains the following amounts with technological<br>developments:
---	---

	Commitment Amount
	June	December
	2020	2019
Detail	MCh	MCh
Software and licenses

All values are in US Dollars.

F-46

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 June 30, 2020 and December 31, 2019 are composed as follows:
	Useful Life		Average remaining depreciation		Gross balance		Accumulated Depreciation				Net balance
---	---	---	---	---	---	---	---	---	---	---	---	---
	June	December	June	December	June	December	June		December		June	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				)		)
Equipment	5	5	4	4				)		)
Others	7	7	4	4				)		)
Total								)		)

All values are in US Dollars.

F-47

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 June 30, 2020 and December 31, 2019 are as follows:
	June 2020
---	---	---	---	---	---	---	---	---
	Land and Buildings		Equipment		Others		Total
	MCh		MCh		MCh		MCh
Gross Balance
Balance as of January 1, 2020
Reclassification				)				)
Additions
Disposals/write-downs/Sales		)		)		)		)
Impairment () (**)
Total
Accumulated Depreciation
Balance as of January 1, 2020		)		)		)		)
Reclassification
Depreciation charges of the period () (*)		)		)		)		)
Sales and disposals of the period
Total		)		)		)		)
Balance as of June 30, 2020

All values are in US Dollars.

	December 2019
	Land and Buildings		Equipment		Others		Total
	MCh		MCh		MCh		MCh
Gross Balance
Balance as of January 1, 2019
Reclassification		)		)				)
Additions
Disposals/write-downs/Sales		)		)		)		)
Impairment losses (***)		)		)		)		)
Total
Accumulated Depreciation
Balance as of January 1, 2019		)		)		)		)
Reclassification
Depreciation charges of the year (**)		)		)		)		)
Sales and disposals of the year
Transfers				)
Total		)		)		)		)
Balance as of December 31, 2019

All values are in US Dollars.

(*)	See Note No.35 Depreciation, Amortization and Impairment.
(**)	This amount does not include the depreciation of the year<br>of the Investment Properties, amount is included in “Other Assets” for Ch$178 million (Ch$359 million as of December<br>2019).
---	---
(***)	This amount does not include charge-offs of Property and<br>Equipment of Ch$867 million (Ch$949 million as of December 2019).
---	---

F-48

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 June 30, 2020 and December 31, 2019 is as<br>follows:
---	---
	Gross Balance		Accumulated Depreciation				Net Balance
---	---	---	---	---	---	---	---	---
	June	December	June		December		June	December
	2020	2019	2020		2019		2020	2019
	MCh	MCh	MCh		MCh		MCh	MCh
Categories
Buildings				)		)
Floor space for ATMs				)		)
Improvements to leased properties				)		)
Total				)		)

All values are in US Dollars.

(d)	The changes of the rights over leased assets as of June<br>30, 2020 and December 31, 2019 is as follows:
	June 2020
---	---	---	---	---	---	---	---	---
	Buildings		Floor space for ATMs		Improvements to leased properties		Total
	MCh		MCh		MCh		MCh
Gross Balance
Balance as of January 1, 2020
Additions
Write-downs		)		)		)		)
Remeasurement				)				)
Others
Total
Accumulated Depreciation
Balance as of January 1, 2020		)		)		)		)
Depreciation of the period (*)		)		)		)		)
Write-downs
Others
Total		)		)		)		)
Balance as of June 30, 2020

All values are in US Dollars.

(*)	See Note No.35 Depreciation, Amortization and Impairment.

F-49

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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
Reclassification
Additions
Write-downs						)		)
Total
Accumulated Depreciation
Balance as of January 1, 2019
Reclassification						)		)
Depreciation of the year		)		)		)		)
Write-downs
Total		)		)		)		)
Balance as of December 31, 2019

All values are in US Dollars.

(e)	The following are the future maturities of the lease liabilities<br>as of June 30, 2020 and December 31, 2019:
	June 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
ATMs
Total

All values are in US Dollars.

	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
ATMs
Total

All values are in US Dollars.

F-50

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 for the period
Lease liability	MCh
Balances as of January 1, 2019
Liabilities for new lease agreements
Interest expenses
Payments of capital and interests		)
Others
Balances as of June 30, 2019
Liabilities for new lease agreements
Interest expenses
Payments of capital and interests		)
Others
Balances as of December 31, 2019
Liabilities for new lease agreements
Interest expenses
Payments of capital and interests		)
Remeasurement		)
Derecognized contracts		)
Others
Balances as of June 30, 2020

All values are in US Dollars.

(f)	The future cash flows related to short-term lease agreements<br>in effect as of June 30, 2020 correspond to Ch$7,492 million (Ch$8,611 as of December 31, 2019).

F-51

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 June 30, 2020 and December 31, 2019, according to the following detail:

	June		December
	2020		2019
	MCh		MCh
Income tax
Less:
Monthly prepaid taxes		)		)
Credit for training expenses		)		)
Others		)		)
Total		)
Tax rate		%		%

All values are in US Dollars.

	June		December
	2020		2019
	MCh		MCh
Current tax assets
Current tax liabilities		)		)
Total tax payable, net				)

All values are in US Dollars.

(b)	Income Tax:

The effect of the tax expense during the periods between January 1 and June 30, 2020 and 2019, are broken down as follows:

	June		June
	2020		2019
	MCh		MCh
Income tax expense:
Current year tax
Tax Previous year		)		)
Subtotal
(Credit) Charge for deferred taxes:
Origin and reversal of temporary differences		)		)
Subtotal		)		)
Others				)
Net charge to income for income taxes

All values are in US Dollars.

F-52

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 June 30, 2020 and 2019:

	June 2020					June 2019
		Tax rate				Tax rate
	%			MCh		%			MCh
Income tax calculated on net income before tax		27.00					27.00
Additions or deductions		(1.93	)		)		(0.80	)		)
Price-level restatement		(5.88	)		)		(4.03	)		)
Other		1.11					(0.01	)		)
Effective rate and income tax expense		20.30					22.16

All values are in US Dollars.

The effective rate for income tax for the period 2020 is 20.30% (22.16% in June 2019).

F-53

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 as of December 31, 2019	Income		Equity		Balances as of June 30, 2020
	MCh	MCh		MCh		MCh
Debit Differences:
Allowances for loan losses
Personnel provisions			)
Staff vacations provisions
Accrued interests adjustments from impaired loans
Staff severance indemnities provision			)
Provision of credit cards expenses
Provision of accrued expenses
Leasing			)
Incomes received in advance			)
Other adjustments
Total Debit Differences
Credit Differences:
Depreciation and price-level restatement of property and equipment
Adjustment for valuation of financial assets available-for-sale
Transitory assets
Loans accrued to effective rate			)
Prepaid expenses			)
Other adjustments
Total Credit Differences
Deferred, Net					)

All values are in US Dollars.

Reconciliation with the statement of financial position:

	June		December
	2020		2019
	MCh		MCh
Deferred tax assets
Deferred tax Liabilities		)
Total Deferred tax

All values are in US Dollars.

F-54

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 June 30, 2019 and December 31, 2019, are as follows:

	Balance as of	Effect on				Balance as of	Effect on				Balance as of
	December 31, 2018	Income		Equity		June 30, 2019	Income		Equity		December 31, 2019
	MCh	MCh		MCh		MCh	MCh		MCh		MCh
Debit differences:
Allowances for loan losses
Personnel provisions			)
Staff vacations provisions
Accrued interest adjustments from impaired loans
Staff severance indemnities provision			)					)
Provisions of credit card expenses			)					)
Provisions of accrued expenses								)
Adjustment for valuation financial assets available-for-sale					)
Leasing								)
Incomes received in advance								)
Other adjustments
Total Debit Differences					)			)
Credit differences:
Depreciation of property and equipment and investment properties								)
Adjustment for valuation financial assets available-for-sale										)
Transitory assets
Loans accrued to effective rate			)					)
Prepaid expenses			)					)
Other adjustments
Total Credit Differences								)		)
Total, Net					)			)

All values are in US Dollars.

F-55

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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:

	June		December
	2020		2019
	MCh		MCh
Assets held for leasing (*)
Assets received or awarded as payment (**)
Assets awarded at judicial sale
Assets received in lieu of payment
Provision for assets received in lieu of payment or awarded		)		)
Subtotal
Other Assets
Deposits by derivatives margin
Trading and brokerage (***)
Prepaid expenses
Recoverable income taxes
Other accounts and notes receivable
Investment properties
Servipag available funds
Commissions receivable
VAT receivable
Accounts receivable for sale of assets received in lieu of payment
Rental guarantees
Pending transactions
Materials and supplies
Assets recovered from leasing for sale
Others
Subtotal
Total

All values are in US Dollars.

(*)	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>0.0280% % (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.

F-56

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 periods 2020 and<br>2019 are as follows:
---	---
Provision for assets received in lieu of payment	MCh
---	---	---
Balance as of January 1, 2019
Provisions used		)
Provisions established
Provisions released
Balance as of June 30, 2019
Provisions used		)
Provisions established
Provisions released
Balance as of December 31, 2019
Provisions used		)
Provisions established
Provisions released
Balance as of June 30, 2020

All values are in US Dollars.

19.	Current Accounts and Other Demand Deposits:

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

	June	December
	2020	2019
	MCh	MCh
Current accounts
Other demand deposits
Other deposits and sight accounts
Total

All values are in US Dollars.

20.	Savings Accounts and Time Deposits:

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

	June	December
	2020	2019
	MCh	MCh
Time deposits
Term savings accounts
Other term balances payable
Total

All values are in US Dollars.

F-57

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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:

	June	December
	2020	2019
	MCh	MCh
Domestic banks
Banco do Brasil
Banco Santander
Subtotal domestic banks
Foreign banks
Foreign trade financing
Citibank N.A.
Wells Fargo Bank
Bank of New York Mellon
Bank of America
Toronto Dominion Bank
The Bank of Nova Scotia
JP Morgan Chase Bank
Zürcher Kantonalbank
Commerzbank AG
DZ Bank Frankfurt
Sumitomo Mitsui Banking
Standard Chartered Bank
ING Bank
Others
Borrowings and other obligations
Wells Fargo Bank
Deutsche Bank AG
Deutsche Bank Trust Company Americas
Bank of America
Citibank N.A.
ING Bank NV
Others
Subtotal foreign banks
Chilean Central Bank (*)
Total

All values are in US Dollars.

(*)	Measures established by the Central Bank to deliver liquidity to the economy and support the flow<br>of credit to households and companies, among which are the Conditional Credit Facility to Increase Placements (FCIC by its Spanish<br>initials) and the Liquidity Credit Line (LCL). See Note No. 5 letter h).

F-58

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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:

	June	December
	2020	2019
	MCh	MCh
Mortgage bonds
Bonds
Subordinated bonds
Total

All values are in US Dollars.

During the period ended as of June 30, 2020, Banco de Chile issued bonds by an amount of Ch$814,881 million, from which corresponds to Short-Term Bonds and Current Bonds by an amount of Ch$560,698 million and Ch$254,183 million respectively, according to the following details:

Short-term Bonds

Counterparty	Annual interest rate %	Issued date	Maturity date
Citibank N.A.	2.00	07/01/2020	07/07/2020
Citibank N.A.	1.95	09/01/2020	09/04/2020
Citibank N.A.	1.91	13/01/2020	13/04/2020
Citibank N.A.	1.87	14/01/2020	14/04/2020
Citibank N.A.	1.91	29/01/2020	31/07/2020
Citibank N.A.	1.91	29/01/2020	31/07/2020
Citibank N.A.	1.86	29/01/2020	29/05/2020
Citibank N.A.	1.85	30/01/2020	01/06/2020
Citibank N.A.	1.85	03/02/2020	03/06/2020
Citibank N.A.	1.55	08/04/2020	05/06/2020
Citibank N.A.	1.30	13/04/2020	12/05/2020
Citibank N.A.	1.30	13/04/2020	13/05/2020
Citibank N.A.	1.30	13/04/2020	13/05/2020
Citibank N.A.	1.55	16/04/2020	16/06/2020
Citibank N.A.	1.55	16/04/2020	18/06/2020
Citibank N.A.	1.61	17/04/2020	21/08/2020
Wells Fargo Bank	1.60	17/04/2020	21/08/2020
Wells Fargo Bank	1.50	22/04/2020	14/08/2020
Wells Fargo Bank	1.45	24/04/2020	29/01/2021
Wells Fargo Bank	1.30	29/04/2020	29/10/2020
Citibank N.A.	0.45	18/05/2020	20/07/2020
Citibank N.A.	0.45	18/05/2020	20/07/2020
Total as of June 30, 2020

All values are in US Dollars.

F-59

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

22.	Debt Issued, continued:

Current Bonds Long-Term

Serie	Currency	Terms<br> Years	Annual issue rate %	Issue date	Maturity date
BCHIEM0817	UF	7	0.80	06/01/2020	06/01/2027
BCHIEL0717	UF	8	0.72	04/02/2020	04/02/2028
Subtotal UF
BONO AUD	AUD	15	2.65	02/03/2020	02/03/2035
Subtotal Others currency
Total as of June 30, 2020

All values are in US Dollars.

Subordinated bonds

During the period ended June 30, 2020, there were no subordinated bonds, issued.

F-60

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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	Annual interest rate %	Issued date	Maturity date
Citibank N.A.	2.91	04/01/2019	04/04/2019
Wells Fargo Bank	2.85	17/01/2019	24/04/2019
Citibank N.A.	2.80	22/01/2019	22/04/2019
Citibank N.A.	2.67	04/04/2019	02/07/2019
Citibank N.A.	2.67	09/04/2019	09/08/2019
Citibank N.A.	2.66	11/04/2019	11/07/2019
Wells Fargo Bank	2.68	11/04/2019	11/10/2019
Citibank N.A.	2.66	12/04/2019	22/07/2019
Wells Fargo Bank	2.67	12/04/2019	12/09/2019
Citibank N.A.	2.67	29/04/2019	29/10/2019
Wells Fargo Bank	2.60	30/04/2019	30/07/2019
Citibank N.A.	2.61	17/05/2019	18/11/2019
Citibank N.A.	2.59	23/05/2019	22/08/2019
Bank of America	2.50	21/06/2019	22/08/2019
Wells Fargo Bank	2.50	24/06/2019	25/07/2019
Citibank N.A.	2.40	24/06/2019	15/10/2019
Citibank N.A.	2.50	25/06/2019	05/08/2019
Citibank N.A.	2.51	28/06/2019	01/08/2019
Citibank N.A.	2.38	11/07/2019	09/10/2019
Citibank N.A.	2.25	09/08/2019	12/11/2019
Wells Fargo Bank	2.03	13/08/2019	08/05/2020
Citibank N.A.	2.20	22/08/2019	21/11/2019
Wells Fargo Bank	2.20	10/09/2019	09/12/2019
Wells Fargo Bank	2.20	11/09/2019	16/12/2019
Wells Fargo Bank	2.20	11/09/2019	10/12/2019
Citibank N.A.	2.10	07/10/2019	07/01/2020
Citibank N.A.	2.07	09/10/2019	09/01/2020
Citibank N.A.	2.00	24/10/2019	29/01/2020
Bank of America	2.00	24/10/2019	24/01/2020
Citibank N.A.	2.00	25/10/2019	03/02/2020
Citibank N.A.	1.91	04/11/2019	13/01/2020
Citibank N.A.	1.97	12/11/2019	12/02/2020
Citibank N.A.	2.05	22/11/2019	07/08/2020
Citibank N.A.	2.05	22/11/2019	07/08/2020
Citibank N.A.	2.07	04/12/2019	07/08/2020
Citibank N.A.	2.05	09/12/2019	09/04/2020
Wells Fargo Bank	2.04	09/12/2019	05/06/2020
Wells Fargo Bank	2.04	11/12/2019	27/03/2020
Citibank N.A.	2.03	30/12/2019	20/07/2020
Wells Fargo Bank	2.10	30/12/2019	15/12/2020
Total as of December 31, 2019

All values are in US Dollars.

F-61

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

22.	Debt Issued, continued:

Current Bonds Long-Term

Serie	Currency	Terms<br> Years	Annual issue rate %	Issue date	Maturity date
BCHIEC0817	UF	5	1.55	30/01/2019	30/01/2024
BCHIED1117	UF	5	1.54	14/03/2019	14/03/2024
BCHIED1117	UF	5	1.45	19/03/2019	19/03/2024
BCHIED1117	UF	5	1.45	20/03/2019	20/03/2024
BCHIDW1017	UF	2	0.93	09/05/2019	09/05/2021
BCHIDW1017	UF	2	0.57	24/06/2019	24/06/2021
BCHIEH0917	UF	7	1.04	01/07/2019	01/07/2026
BCHIEB1117	UF	4	0.83	01/07/2019	01/07/2023
BCHIEH0917	UF	7	1.00	02/07/2019	02/07/2026
BCHIEI1117	UF	7	0.66	19/07/2019	19/07/2026
BCHIEI1117	UF	7	0.51	30/07/2019	30/07/2026
BCHIEI1117	UF	7	0.45	01/08/2019	01/08/2026
BCHICC0815	UF	12	0.54	05/08/2019	05/08/2031
BCHICA1015	UF	11	0.54	05/08/2019	05/08/2030
BCHICB1215	UF	11	0.44	07/08/2019	07/08/2030
BCHIEI1117	UF	7	0.30	07/08/2019	07/08/2026
BCHIEI1117	UF	7	0.28	08/08/2019	08/08/2026
BCHICB1215	UF	11	0.45	08/08/2019	08/08/2030
BCHIEI1117	UF	7	0.29	08/08/2019	08/08/2026
BCHIBV1015	UF	10	0.37	20/08/2019	20/08/2029
BCHIEV1117	UF	10	0.34	05/09/2019	05/09/2029
BCHIEK1117	UF	13	1.38	11/12/2019	11/12/2032
Subtotal UF
BONO JPY		20	1.00	14/05/2019	14/05/2039
BONO HKD	HKD	12	2.90	19/07/2019	19/07/2031
BONO AUD	AUD	20	3.50	28/08/2019	28/08/2039
BONO PEN	PEN	15	5.40	04/09/2019	04/09/2034
BONO AUD	AUD	15	3.13	09/09/2019	09/09/2034
BONO NOK	NOK	10	3.50	07/11/2019	07/11/2029
BONO AUD	AUD	20	3.55	11/11/2019	11/11/2039
BONO JPY		10	1.00	19/11/2019	19/11/2029
Subtotal Others currency
Total as of December 31, 2019

All values are in Japanese Yen.

Subordinated bonds

Serie	Currency	Terms<br> Years	Annual issue<br><br> rate %	Issue date	Maturity date
UCHI-J1111	UF	23	1.05	20/08/2019	20/08/2042
UCHI-J1111	UF	23	1.04	20/08/2019	20/08/2042
UCHI-J1111	UF	23	0.99	21/08/2019	21/08/2042
UCHI-I1111	UF	21	0.96	24/09/2019	24/09/2040
Total as of December 31, 2019

All values are in US Dollars.

During the period, 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.

F-62

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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:

	June	December
	2020	2019
	MCh	MCh
Other Chilean obligations
Public sector obligations
Total

All values are in US Dollars.

24.	Provisions:
(a)	At the end of each period, this item is composed as follows:
---	---
	June	December
---	---	---
	2020	2019
	MCh	MCh
Provisions for minimum dividends (*)
Provisions for personnel benefits and payroll expenses
Provisions for contingent loan risks
Provisions for contingencies:
Additional loan provisions (**)
Country risk provisions
Other provisions for contingencies
Total

All values are in US Dollars.

(*)	See Note No. 27 letter (c).
(**)	As of June 30, 2020, Ch$70,000 million have been established for additional provisions. See Note<br>No. 24 letter (b).
---	---

F-63

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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
Provisions established
Provisions used		)		)							)
Provisions released
Balances as of June 30, 2019
Provisions established
Provisions used				)							)
Provisions released						)			)		)
Balances as of December 31, 2019
Provisions established
Provisions used		)		)							)
Provisions released									)		)
Balances as of June 30, 2020

All values are in US Dollars.

(c)	Provisions for personnel benefits and payroll:
	June	December
---	---	---
	2020	2019
	MCh	MCh
Staff accrued vacation provision
Provisions for performance bonuses
Staff severance indemnities
Other personnel benefits provision
Total

All values are in US Dollars.

F-64

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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:
---	---
	June		June
---	---	---	---	---
	2020		2019
	MCh		MCh
Present value of the obligations at the beginning of the period
Increase in provision
Benefit paid		)		)
Effect of change in actuarial factors
Total

All values are in US Dollars.

(ii)	Net benefits expenses:
	June	June
---	---	---	---
	2020	2019
	MCh	MCh
Increase (Decrease) in provisions			)
Interest cost of benefits obligations
Effect of change in actuarial factors
Net benefit expenses

All values are in US Dollars.

(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:

	June 30, <br> 2020		December 31, <br> 2019
	%		%
Discount rate		2.31		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 second quarter of 2020.

F-65

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

24.	Provisions, continued:
(e)	Changes in compliance bonuses provision:
---	---
	June		June
---	---	---	---	---
	2020		2019
	MCh		MCh
Balances as of January 1
Net provisions established
Provisions used		)		)
Total

All values are in US Dollars.

(f)	Changes in staff accrued vacation provision:
	June		June
---	---	---	---	---
	2020		2019
	MCh		MCh
Balances as of January 1
Net provisions established
Provisions used		)		)
Total

All values are in US Dollars.

(g)	Employee benefits share-based provision:

As of June 30, 2020 and 2019, the Bank and its subsidiaries do not have a stock-based compensation plan.

(h)	Contingent loan provisions:

As of June 30, 2020 the Bank and its subsidiaries maintain contingent loan provisions by an amount of Ch$68,551 million (Ch$57,042 million at December 2019). See Note No. 26 letter (d).

F-66

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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:

	June	December
	2020	2019
	MCh	MCh
Accounts and notes payable
Income received in advance (*)
Dividends payable
Other liabilities
Documents intermediated (**)
Securities unliquidated
Cobranding
VAT debit
Insurance payments
Outstanding transactions
Others
Total

All values are in US Dollars.

(*)	In relation to the Strategic Alliance Framework Agreement,<br>on June 4, 2019, Banco de Chile received the payment from the Insurance Companies for an amount of Ch$149,061 million, which was<br>recorded according to IFRS 15. The related income is recognized over time, depending on compliance with the associated performance<br>obligation.
(**)	This item mainly includes financing of simultaneous operations<br>performed by subsidiary Banchile Corredores de Bolsa S.A.
---	---

F-67

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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<br>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:

	June	December
	2020	2019
	MCh	MCh
Contingent loans
Guarantees and sureties
Confirmed foreign letters of credit
Issued letters of credit
Bank guarantees
Freely disposition credit lines
Other credit commitments
Transactions on behalf of third parties
Documents in collections
Third-party resources managed by the Bank:
Financial assets managed on behalf of third parties
Other assets managed on behalf of third parties
Financial assets acquired on its own behalf
Other assets acquired on its own behalf
Custody of securities
Securities held in safe custody in the Bank and subsidiaries
Securities held in safe custody in other entities
Total

All values are in US Dollars.

F-68

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 June 30, 2020 the Bank maintain provisions for judicial contingencies amounting to Ch$220 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 June 30, 2020
	2020	2021	2022	2023	2024	Total
	MCh	MCh	MCh	MCh	MCh	MCh
Legal contingencies

All values are in US Dollars.

(b.2)	Contingencies for significant lawsuits in courts:

As of June 30, 2020 and December 31, 2019 there are not significant lawsuits in court that affect or may affect these Interim Consolidated Financial Statements.

F-69

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 3,748,100, maturing January 8, 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 847,000.

As of June 30, 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, 2022, whereby the Securities Exchange of the Santiago Stock Exchange was appointed as the subsidiary’s creditor representative.

	June	December
	2020	2019
Guarantees:	MCh	MCh
Shares delivered to cover simultaneous forward sales transactions:
Santiago Securities Exchange, Stock Exchange
Electronic Chilean Securities Exchange, Stock Exchange
Fixed income securities to guarantee CCLV system,<br><br>Santiago Securities Exchange, Stock Exchange
Shares delivered to guarantee equity lending,<br><br>Santiago Securities Exchange, Stock Exchange
Total

All values are in US Dollars.

F-70

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 Chubb Seguros Chile S.A. that expires April 2, 2021, 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.

F-71

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 June 30, 2020 the entity maintains two insurance policies with effect from April 15, 2020 to April 14, 2021 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		500
Civil liability policy		60,000
(d)	Provisions for contingencies loans:
---	---

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

	June	December
	2020	2019
	MCh	MCh
Freely disposition credit lines
Bank guarantees provision
Guarantees and sureties provision
Letters of credit provision
Other credit commitments
Total

All values are in US Dollars.

F-72

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

26.

Contingencies and Commitments, continued:

(e)

By Exempt Resolution No. 270 dated October 30, 2014, the Superintendency of Securities and Insurance (current Commission for the Financial Market) imposed a fine of UF 50,000 to Banchile Corredores de Bolsa S.A. for violations of the second paragraph of article 53 of the Securities Market Law, said company filed a claim with the competent Civil Court requesting 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. The judgment indicated has been subject to cassation appeals filed by both parties, which are pending before the Court of Appeals of Santiago.

---

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 June 30, 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 June 30, 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 June 30, 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$356,311 million.

F-73

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 June 30, 2020 amounted to Ch$50,087 million.

As indicated, as of June 30, 2020, the amount of the net income determined in accordance with the preceding paragraph is equivalent to Ch$198,498 million (Ch$500,768 million as of December 31, 2019). Consequently, the Bank recorded a provision for minimum dividends under “Provisions” as of June 30, for an amount of Ch$119,099 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).

F-74

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 June 30, 2020 and 2019 were determined as follows:

	June		June
	2020		2019
Basic earnings per share:
Net profits attributable to ordinary equity holders of the bank (in million Chilean pesos)		248,585		293,663
Weighted average number of ordinary shares		101,017,081,114		101,017,081,114
Earning per shares (in Chilean pesos)		2.46		2.91
Diluted earnings per share:
Net profits attributable to ordinary equity holders of the bank (in million Chilean pesos)		248,585		293,663
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)		2.46		2.91

As of June 30, 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 charge to equity for Ch$45,119 million (charge to equity of Ch$25,344 million in 2019). The income tax effect presented a credit to equity of Ch$12,182 million (credit of Ch$6,843 million in June 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 credit to equity for Ch$5,862 million (credit of Ch$17,677 million during the year 2019). The deferred tax effect meant a charge to equity of Ch$1,581 million (charge to equity of Ch$4,778 million in June 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.

F-75

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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<br>and indexation income, excluding hedge results, are composed as follows:
---	---
	June 2020				June 2019
---	---	---	---	---	---	---	---	---
	Interest	UF Indexation	Prepaid fees	Total	Interest	UF Indexation	Prepaid fees	Total
	MCh	MCh	MCh	MCh	MCh	MCh	MCh	MCh
Commercial loans
Consumer loans
Residential mortgage loans
Financial investment
Repurchase agreements
Loans to banks
Other interest and indexation revenue
Total

All values are in US Dollars.

The amount of interest recognized on a received basis for impaired portfolio in the period 2020 amounts to Ch$1,844 million (Ch$2,253 million in June 2019).

(b)	At the each period end, the stock of interest and UF indexation<br>not recognized in incomes is the following:
	June 2020			June 2019
---	---	---	---	---	---	---
	Interest	UF Indexation	Total	Interest	UF Indexation	Total
	MCh	MCh	MCh	MCh	MCh	MCh
Commercial loans
Residential mortgage loans
Consumer loans
Total

All values are in US Dollars.

F-76

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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<br>excluding hedge results, are detailed as follows:
---	---
	June 2020			June 2019
---	---	---	---	---	---	---
	Interest	UF Indexation	Total	Interest	UF Indexation	Total
	MCh	MCh	MCh	MCh	MCh	MCh
Savings accounts and time deposits
Debt securities issued
Other financial obligations
Repurchase agreements
Obligations with banks
Demand deposits
Lease liabilities
Other interest and indexation expenses
Total

All values are in US Dollars.

(d)	As of June 30, 2020 and 2019, the Bank uses cross currency<br>and interest rate swaps to hedge its position on movements on the fair value of corporate bonds and commercial loans and cross<br>currency swaps to hedge the risk of variability of obligations flows with foreign banks and bonds issued in foreign currency.
	June 2020						June 2019
---	---	---	---	---	---	---	---	---	---	---	---	---
	Income		Expense		Total		Income		Expense		Total
	MCh		MCh		MCh		MCh		MCh		MCh
Gain from fair value accounting hedges
Loss from fair value accounting hedges		)				)		)				)
Gain from cash flow accounting hedges
Loss from cash flow accounting hedges		)		)		)		)		)		)
Net gain on hedge items
Total		)				)		)				)

All values are in US Dollars.

(e)	At each period end, the summary of interest is as follows:
	June		June
---	---	---	---	---
	2020		2019
	MCh		MCh
Interest revenue
Interest expense		)		)
Subtotal interest income
Net gain (loss) from accounting hedges		)		)
Total net interest income

All values are in US Dollars.

F-77

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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:

	June		June
	2020		2019
	MCh		MCh
Commission income
Debit and credit card services
Use of distribution channel and access to customers
Investments in mutual funds and others
Collections and payments
Portfolio management
Fees for insurance transactions
Guarantees and letters of credit
Trading and securities management
Brand use agreement
Lines of credit and overdrafts
Financial advisory services
Other commission earned
Total commissions income
Commission expenses
Fees for card transactions		)		)
Interbank transactions		)		)
Collections and payments		)		)
Securities transactions		)		)
Sales force		)		)
Other commission		)		)
Total commissions expenses		)		)

All values are in US Dollars.

F-78

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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:

	June		June
	2020		2019
	MCh		MCh
Financial assets held-for-trading
Sale of available-for-sale instruments
Sale of loan portfolios (Note No.12 (e))
Net income on other transactions				)
Trading derivative		)		)
Total

All values are in US Dollars.

31.	Foreign Exchange Transactions, Net:

Net foreign exchange transactions are detailed as follows:

	June		June
	2020		2019
	MCh		MCh
Gain from accounting hedges				)
Exchange difference, net				)
Indexed foreign currency		)
Total

All values are in US Dollars.

F-79

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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<br> and advance to banks		Commercial<br> Loans				Mortgage<br> Loans				Consumer<br> Loans				Subtotal				Contingent<br> Loans				Total
	June	June	June		June		June		June		June		June		June		June		June		June		June		June
	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 provisions				)		)										)		)		)		)		)		)
- Group provisions				)		)		)		)		)		)		)		)		)		)		)		)
Provisions<br> established, net				)		)		)		)		)		)		)		)		)		)		)		)
Provisions released:
- Individual provisions
- Group provisions
Provisions<br> realeased, net
Provision,<br> net				)		)		)		)		)		)		)		)		)		)		)		)
Additional provision				)												)								)
Recovery<br> of written-off assets
Provision<br> for loan losses, net				)		)		)		)		)		)		)		)		)		)		)		)

All values are in US Dollars.

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.

During the period ended June 30, 2020, the CMF has issued specific regulations for the establishment of provisions. See Note No. 3

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

	June		June
	2020		2019
	MCh		MCh
Allowances established of loans to customer and loans and advances to banks		)		)
Allowances released of loans to customer and loans and advances to banks
Total allowances of loans to customer and loans and advances to banks		)		)

All values are in US Dollars.

F-80

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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:

	June	June
	2020	2019
	MCh	MCh
Remunerations
Bonuses and incentives
Variable compensation
Gratifications
Lunch and health benefits
Staff severance indemnities
Training expenses
Other personnel expenses
Total

All values are in US Dollars.

F-81

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

34.	Administrative Expenses:

This item is composed as follows:

	June	June
	2020	2019
	MCh	MCh
General administrative expenses
Information technology and communications
Maintenance and repair of property and equipment
External advisory services and professional services fees
Office supplies
Surveillance and securities transport services
Insurance premiums
External service of financial information
Energy, heating and other utilities
Expenses for short-term leases and low value
Legal and notary expenses
Postal box, mail, postage and home delivery services
Donations
External service of custody of documentation
Other expenses of obligations for lease agreements
Representation and travel expenses
Other general administrative expenses
Subtotal
Outsource services
Credit pre-evaluation
Data processing
External technological developments expenses
Certification and technology testing
Other
Subtotal
Board expenses
Board of Directors Compensation
Other Board expenses
Subtotal
Marketing expenses
Advertising
Subtotal
Taxes, payroll taxes and contributions
Contribution to the banking regulator
Real estate contributions
Patents
Other taxes
Subtotal
Total

All values are in US Dollars.

F-82

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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<br>and amortization during the periods 2020 and 2019, are detailed as follows:
---	---
	June	June
---	---	---
	2020	2019
	MCh	MCh
Depreciation and amortization
Depreciation of property and equipment (Note No. 16 (b))
Depreciation of leased assets (Note No. 16 (d))
Amortization of intangibles assets (Note No. 15 (b))
Total

All values are in US Dollars.

(b)	As of June 30, 2020 and 2019 the impairment expenses<br>is composed as follows:
	June	June
---	---	---
	2020	2019
	MCh	MCh
Impairment
Impairment of property and equipment (Note No. 16 (b))
Impairment of intangible assets (Note No. 15 (b))
Impairment of leased assets
Total

All values are in US Dollars.

F-83

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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:

	June	June
	2020	2019
	MCh	MCh
Income for assets received in lieu of payment
Income from sale of assets received in lieu of payment
Other income
Subtotal
Release of provisions for contingencies
Country risk provisions
Other provisions for contingencies
Subtotal
Other income
Release of provisions and expense recovery
Reimbursements for insurance policies
Rental investment properties
Recovery from correspondent banks
Income from sale leased assets
Fiduciary and trustee commissions
Revaluation of prepaid monthly payments
Foreign trade income
Tax management income
Gain on sale of fixed assets
Credit/debit card income
Others
Subtotal
Total

All values are in US Dollars.

F-84

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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:

	June	June
	2020	2019
	MCh	MCh
Provisions and expenses for assets received in lieu of payment
Charge-off assets received in lieu of payment
Provisions for assets received in lieu of payment
Maintenance expenses of assets received in lieu of payment
Subtotal
Provisions for contingencies
Country risk provisions
Other provisions
Subtotal
Other expenses
Leasings operational expenses
Write-offs for operating risks
Correspondent banks
Card administration
Credit life insurance
Expenses for charge-off leased assets recoveries
Contribution to other organisms
Civil lawsuits
Others
Subtotal
Total

All values are in US Dollars.

F-85

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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.

F-86

NOTES TO 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 Companies (*)				Investment and Commercial Companies (**)				Individuals (***)				Total
	June		December		June		December		June		December		June		December
	2020		2019		2020		2019		2020		2019		2020		2019
	MCh		MCh		MCh		MCh		MCh		MCh		MCh		MCh
Loans and accounts receivable:
Commercial loans
Residential mortgage loans
Consumer loans
Gross loans
Allowance for loan losses		)		)		)		)		)		)		)		)
Net loans
Contingent loans:
Guarantees and sureties
Letters of credits
Foreign letters of credits
Banks guarantees
Freely disposition credit lines
Other contingencies loans
Total contingent loans
Provision for contingencies loans		)		)		)		)		)		)		)		)
Contingent loans, net
Amount covered by guarantee:
Mortgage
Warrant
Pledge
Others (****)
Total collateral

All values are in US Dollars.

F-87

NOTES TO 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, continued:
---	---
(*)	For these effects are considered productive companies,<br>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<br>or investments.
---	---

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

(**)	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:
---	---
	June	December
---	---	---
	2020	2019
	MCh	MCh
Assets
Cash and due from banks
Transactions in the course of collection
Financial assets held-for-trading
Derivative instruments
Investment instruments
Other assets
Total
Liabilities
Demand deposits
Transactions in the course of payment
Obligations under repurchase agreements
Savings accounts and time deposits
Derivative instruments
Borrowings with banks
Lease liabilities
Other liabilities
Total

All values are in US Dollars.

F-88

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 (*):
	June 2020		June 2019
---	---	---	---	---
	Income	Expense	Income	Expense
	MCh	MCh	MCh	MCh
Type of income or expense recognized
Interest and revenue expenses
Fees and commissions income
Net Financial Operating Income
Derivative instruments (**)
Other financial operations
Released or established of provision for credit risk
Operating expenses
Other income and expenses

All values are in US Dollars.

(*)	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$66,485 million as of June 30, 2020 (net gain of Ch$5,518 million as of June 30, 2019).
---	---
(d)	Contracts with related parties:
---	---

During the period ended June 30, 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
Universidad del Desarrollo	Research projects
Ionix Spa	Technical assistance service and platform support

F-89

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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:
	June	June
---	---	---
	2020	2019
	MCh	MCh
Personnel remunerations
Short-term benefits
Severance pay
Directors’ remunerations and fees (*)
Total

All values are in US Dollars.

(*)	It includes fees paid to members of the Advisory Committee<br>of Banchile Corredores de Seguros Ltda, of Ch$7 million (Ch$7 million in June 2019).

Fees paid to the advisors of the Board of Directors amount to Ch$75 million in June 2019, as of June 30, 2020, there is no amount for this concept. The travel and other related expenses amount to Ch$18 million (Ch$45 million in June 2019).

Composition of key personnel:

	No. of executives
	June		June
	2020		2019
Position
CEO		1		1
CEOs of subsidiaries		6		6
Division Managers		13		13
Directors Bank and subsidiaries		21		21
Total		41		41

F-90

NOTES TO 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:

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.

F-91

NOTES TO 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 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 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.

F-92

NOTES TO 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 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 of instrument valued at Fair value:

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

Level 1:	These are financial instruments whose fair value is calculated<br>at quoted prices (unadjusted) in extracted from liquid and deep markets. For these instruments there are quotes or prices (return<br>internal rates, quote value, price) the observable market, so that assumptions are not required to determine the value.

In this level, the following instruments are considered: currency futures, debt instruments issued Chilean Central Bank and Treasury, which belong to benchmarks, mutual fund investments and equity shares.

For the instruments of the Central Bank of Chile and the General Treasury of the Republic, all those mnemonics belonging to a Benchmark, in other words corresponding to one of the following categories published by the Santiago Stock Exchange, will be considered as Level 1: Pesos-02, Pesos-03, Pesos-04, Pesos-05, Pesos-07, Pesos-10, UF-02, UF-04, UF-05, UF-07, UF-10, UF-20, UF-30. A Benchmark corresponds to a group of mnemonics that are similar in duration and are traded in an equivalent way, i.e., the price (return internal rates in this case) obtained is the same for all the instruments that make up a Benchmark. This feature defines a greater depth of market, with daily quotations that allow classifying these instruments as Level 1.

In the case of debt issued by the Government, the internal rate of return of the market is used to discount all flows to present value. In the case of mutual funds and equity shares, the current market price per share, which multiplied by the number of instruments results in the fair value.

The preceding described valuation methodology is equivalent to the one used by the Bolsa de Comercio de Santiago (Santiago Stock Exchange) and correspond to the standard methodology used in the market.

F-93

NOTES TO 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 are financial instruments whose fair value is calculated<br>based on prices other than in quoted in Level 1 that are observable for the asset or liability, directly (that is, as prices or<br>internal rates of return) or indirectly (that is, derived from prices or internal rates of return from similar instruments). These<br>categories include:
a)	Quoted prices for similar assets or liabilities in active<br>markets.
---	---
b)	Quoted prices for identical or similar assets or liabilities<br>in markets that are not active.
---	---
c)	Inputs data other than quoted prices that are observable<br>for the asset or liability.
---	---
d)	Inputs data corroborated by the market.
---	---

At this level there are mainly derivatives instruments, debt issued by banks, debt issues of Chilean and foreign companies, issued in Chile or abroad, mortgage claims, financial brokerage instruments and some issuances by the Central Bank of Chile and the General Treasury of the Republic, which do not belong to benchmarks.

To value derivatives, depends on whether they are impacted by volatility as a relevant market factor in standard valuation methodologies; for options the Black-Scholes-Merton formula is used; for the rest of the derivatives, forwards and swaps, discounted cash flows method is used.

For the remaining instruments at this level, as for debt issues of level 1, the valuation is done through cash flows model by using an internal rate of return that can be derived or estimated from internal rates of return of similar securities as mentioned above.

In the event that there is no observable price for an instrument in a specific term, the price will be inferred from the interpolation between periods that have observable quoted price in active markets. These models incorporate various market variables, including the credit quality of counterparties, exchange rates and interest rate curves.

F-94

NOTES TO 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 FinancialInstrument	Valuation Method	Description: Inputs and Sources
Local Bank and<br><br> <br>Corporate Bonds	Discounted cash<br><br> <br>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.

F-95

NOTES TO 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 3:

These are financial instruments whose fair value is determined using non-observable inputs data neither for the assets or liabilities under analysis nor for similar instruments. An adjustment to an input that is significant to the entire measurement can result in a fair value measurement classified within Level 3 of the fair value hierarchy, if the adjustment uses significant non-observable data entry.

The instruments likely to be classified as level 3 are mainly Corporate Debt by Chilean and foreign companies, issued both in Chile and abroad.

Valuation Techniques and Inputs for Level 3 Instrument:

Type of Financial Instrument	Valuation Method	Description: Inputs and Sources
Local Bank and<br><br> <br>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<br>observable by the market, we model interest rate of returns for them based on a Base Yield (US-Libor) and issuer spread. These<br>inputs (base yield and issuer spread) are provided on a weekly basis by third party price providers that are widely used in the<br>Chilean market.

F-96

NOTES TO 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:
(b)	Level chart:
---	---

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

	Level 1		Level 2		Level 3		Total
	June	December	June	December	June	December	June	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
Other instruments issued in Chile
Instruments issued abroad
Mutual fund investments
Subtotal
Derivative contracts for trading purposes
Forwards
Swaps
Call Options
Put Options
Futures
Subtotal
Hedge derivative contracts
Fair value hedge (Swap)
Cash flow hedge (Swap)
Subtotal
Financial assets available-for-sale (1)
From the Chilean Government and Central Bank
Other instruments issued in Chile
Instruments issued abroad
Subtotal
Total
Financial Liabilities
Derivative contracts for trading purposes
Forwards
Swaps
Call Options
Put Options
Futures
Subtotal
Hedge derivative contracts
Fair value hedge (Swap)
Cash flow hedge (Swap)
Subtotal
Total

All values are in US Dollars.

(1)	As of June 30, 2020, 99% of instruments of Level 3 have<br>denomination “Investment Grade”. Also, 100% of total of these financial instruments correspond to domestic issuers.

F-97

NOTES TO 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:
(c)	Level 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:

	June 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	Balance as of June 30, 2020
	MCh	MCh		MCh		MCh	MCh		MCh	MCh	MCh
Financial Assets
Financial assets held-for-trading:
Other instruments issued in Chile			)					)
Subtotal			)					)
Available-for-Sale Instruments:
Other instruments issued in Chile					)			)
Subtotal					)			)
Total			)		)			)

All values are in US Dollars.

	December 2019
	Balance as of January 1, 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		Balance as of December 31, 2019
	MCh	MCh		MCh		MCh	MCh		MCh	MCh		MCh
Financial Assets
Financial assets held-for-trading:
Other instruments issued in Chile			)					)			)
Subtotal			)					)			)
Available-for-Sale Instruments:
Other instruments issued in Chile					)			)
Subtotal					)			)
Total					)			)			)

All values are in US Dollars.

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

F-98

NOTES TO 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:
(d)	Sensitivity of instruments classified in Level 3 to changes<br>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 June 30, 2020			As of December 31, 2019
	Level 3	Sensitivity to changes in key assumptions of models		Level 3	Sensitivity to changes in key assumptions of models
Financial Assets	MCh	MCh		MCh	MCh
Financial assets held-for-trading
Other instruments issued in Chile			)			)
Subtotal			)			)
Available-for- Sale Instruments
Other instruments issued in Chile			)			)
Subtotal			)			)
Total			)			)

All values are in US Dollars.

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 June 30, 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.

F-99

NOTES TO 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:
(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
	June	December	June	December
	2020	2019	2020	2019
	MCh	MCh	MCh	MCh
Assets
Cash and due from banks
Transactions in the course of collection
Investments under resale agreements
Subtotal
Loans and advances to banks
Domestic banks
Central Bank of Chile
Foreign banks
Subtotal
Loans to customers, net
Commercial loans
Residential mortgage loans
Consumer loans
Subtotal
Total
Liabilities
Current accounts and other demand deposits
Transactions in the course of payment
Obligations under repurchase agreements
Savings accounts and time deposits
Borrowings from banks
Other financial obligations
Subtotal
Debt Issued
Letters of credit for residential purposes
Letters of credit for general purposes
Bonds
Subordinate bonds
Subtotal
Total

All values are in US Dollars.

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.

F-100

NOTES TO 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:
(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 June 30, 2020 and December 31, 2019:

	Level 1 Estimated Fair Value		Level 2 Estimated Fair Value		Level 3 Estimated Fair Value		Total Estimated Fair Value
	June	December	June	December	June	December	June	December
	2020	2019	2020	2019	2020	2019	2020	2019
	MCh	MCh	MCh	MCh	MCh	MCh	MCh	MCh
Assets
Cash and due from banks
Transactions in the course of collection
Investments under resale agreements
Subtotal
Loans and advances to banks
Domestic banks
Central Bank
Foreign banks
Subtotal
Loans to customers, net
Commercial loans
Residential mortgage loans
Consumer loans
Subtotal
Total
Liabilities
Current accounts and other demand deposits
Transactions in the course of payment
Obligations under repurchase agreements
Savings accounts and time deposits
Borrowings from banks
Other financial obligations
Subtotal
Debt Issued
Letters of credit for residential purposes
Letters of credit for general purposes
Bonds
Subordinated bonds
Subtotal
Total

All values are in US Dollars.

F-101

NOTES TO 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:
(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<br>with short-term maturity, it is assumed that the book values approximate to their fair value. This assumption is applied to the<br>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.
---	---

F-102

NOTES TO 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:
(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 contracts with right to offset				Financial Collateral				Net Fair Value
	June	December	June		December		June		December		June		December		June	December
	2020	2019	2020		2019		2020		2019		2020		2019		2020	2019
	MCh	MCh	MCh		MCh		MCh		MCh		MCh		MCh		MCh	MCh
Derivative financial assets				)		)		)		)		)		)
Derivative financial liabilities				)		)		)		)		)		)

All values are in US Dollars.

F-103

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, 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 June 30, 2020 and December 31, 2019, respectively. As these are for trading and available-for-sale instruments are included at their fair value:

	As of June 30, 2020
	Up to 1 month	Over 1 month and up to 3 months	Over 3 month and up to 12 months	Subtotal up to 1 year	Over 1 year and up to 3 years	Over 3 year and up to 5 years	Over 5 years	Subtotal over 1 year	Total
Assets	MCh	MCh	MCh	MCh	MCh	MCh	MCh	MCh	MCh
Cash and due from banks
Transactions in the course of collection
Financial Assets held-for-trading
Investments under resale agreements
Derivative instruments
Loans and advances to banks (*)
Loans to customers (*)
Financial assets available-for-sale
Financial assets held-to-maturity
Total financial assets

All values are in US Dollars.

	As of December 31, 2019
	Up to 1 month	Over 1 month and up to 3 months	Over 3 month and up to 12 months	Subtotal up to 1 year	Over 1 year and up to 3 years	Over 3 year and up to 5 years	Over 5 years	Subtotal over 1 year	Total
Assets	MCh	MCh	MCh	MCh	MCh	MCh	MCh	MCh	MCh
Cash and due from banks
Transactions in the course of collection
Financial Assets held-for-trading
Investments under resale agreements
Derivative instruments
Loans and advances to banks (*)
Loans to customers (*)
Financial assets available-for-sale
Financial assets held-to-maturity
Total financial assets

All values are in US Dollars.

(*)	These balances are presented without deduction of their<br>respective provisions, which amount to Ch$679,274 million (Ch$685,418 million in December 2019) for loans to customers and Ch$470<br>million (Ch$758 million in December 2019) for borrowings from financial institutions.

F-104

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

40.	Maturity of Assets and Liabilities, continued:
	As of June 30, 2020
---	---	---	---	---	---	---	---	---	---
	Up to 1 month	Over 1 month and up to 3 months	Over 3 month and up to 12 months	Subtotal up to 1 year	Over 1 year and up to 3 years	Over 3 year and up to 5 years	Over 5 years	Subtotal over 1 year	Total
Liabilities	MCh	MCh	MCh	MCh	MCh	MCh	MCh	MCh	MCh
Current accounts and other demand deposits
Transactions in the course of payment
Obligations under repurchase agreements
Savings accounts and time deposits (**)
Derivative instruments
Borrowings from financial institutions
Debt issued:
Mortgage bonds
Bonds
Subordinate bonds
Other financial obligations
Lease liabilities
Total financial liabilities

All values are in US Dollars.

	As of December 31, 2019
	Up to 1 month	Over 1 month and up to 3 months	Over 3 month and up to 12 months	Subtotal up to 1 year	Over 1 year and up to 3 years	Over 3 year and up to 5 years	Over 5 years	Subtotal over 1 year	Total
Liabilities	MCh	MCh	MCh	MCh	MCh	MCh	MCh	MCh	MCh
Current accounts and other demand deposits
Transactions in the course of payment
Obligations under repurchase agreements
Savings accounts and time deposits (**)
Derivative instruments
Borrowings from financial institutions
Debt issued:
Mortgage bonds
Bonds
Subordinate bonds
Lease liabilities
Other financial obligations
Total financial liabilities

All values are in US Dollars.

(**)	Excludes term saving accounts, which amount to Ch$284,429<br>million (Ch$239,850 million in December 2019).

F-105

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued

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

41.	Subsequent Events:

By means of a Letter to Management dated July 17, 2020, the CMF instructed the way in which institutions should consider the effect of the deductible in the computation of provisions of the loans with Fogape Covid-19 guarantee, and the conditions under which can replace the credit risk of the direct debtor with the credit quality of FOGAPE. As of the date of issuance of these financial statements, the Bank is evaluating how to implement the established requirements.

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 June 30, 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

F-106

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

About this 6-K