Operator: Good afternoon, everyone. And welcome to Banco de Chile’s Fourth Quarter 2020 Results Conference Call. If you need a copy of the press release issued yesterday, it is available on the company’s website. Today with us we have Mr. Rodrigo Aravena, Chief Economist and Senior VP of Institutional Relations, Mr.

Pablo Mejia, Head of Investor Relations and Daniel Galarce, Head of Financial Control. Before we begin, I would like to remind you that this call is being recorded and that information discussed today may include forward-looking statements regarding the company’s financial and operating performance. All projections are subject to risks and uncertainties, and actual results may differ materially. Please refer to the detailed note in the company’s press release regarding forward-looking statements. I will now turn the call over to Mr.

Rodrigo Aravena. Please go ahead.

Rodrigo Aravena: Good afternoon. Thank you for joining this conference call today, where we will present the financial earnings posted by Banco de Chile during the last quarter. We have divided this presentation into three parts.

First, I'll discuss relative to the main economic trends and our forecast for this year. Then, we summarize the main achievements and key advances in our strategic pillars. The final section includes a review of our financial results late in the fourth quarter, and consequently, during the full year. Let me start with a brief discussion of the Chilean economy. Please move to Slide number 3.

As the IMF recently said, 2020 was a year like no other. The entire world was totally affected by pandemic that can be comparable only with the Spanish Flu of 1918. In order to review the spread of the virus, several authorities implemented strong sanitary measures and mobility restrictions, leading to the worst recession, at least in the last century. All in all, the global economy probably contracted more than 3% in the last year. Chile has a similar trend, as the economy was affected by the global recession and the negative impact of the pandemic.

The GDP fell 6% in a year, led by substantial contraction in the second quarter. Nevertheless, the resilience of the Chilean economy is positively compared with most of Latin American countries, as reflected by a robust recovery and better expectation for the future. On the whole, this recovery has been led by the joint contribution of three main factors, easy mobility restriction, expansionary fiscal and monetary policies and to a lesser extent, the temporary impact of pension funds withdrawal on consumption. I will go over the factors later in this presentation. As can be seen in this chart on the top left, GDP posted a significant recovery during the second half of the year.

In fact, the GDP posted annualized rate of 23% and 28% quarter-on-quarter in the third quarter and the fourth quarter, respectively, after plummeting by 44% on a sequential basis in the second quarter. Due to this, the GDP has reduced its annual decline rate, and it will probably retain positive rates over the next few months. The overall inflation is slightly increased by the end of the year, in line with the greater dynamism of the chart on the upper right shows. Specifically, the CPI went up by 1.2% in the fourth quarter from 0.3%in the previous one, lifting the year-on-year figure to 3% at the end of the year. Since the CPI is within the policy targets, in an economy with an important output gap the central bank seems to be comfortable with maintaining the overall rate of 0.5%.

In fact, the board has mentioned the intention of keeping the policy rate for a long period of time, as well as most of liquidity measures announced since the beginning of the pandemic. The recovery has also being reflected in the labor market, although at a slower pace. The employment rate has fallen from the peak of 15% observed in July to 10% in December, as the bottom left chart shows. This improvement has been driven by the steady rise in total employment as seen in the bottom right chart. This creation has been concentrated in sectors that benefit from the greater mobility, such as contraction and retail.

On the other hand, services sectors remain subject since they've been much more effective during this pandemic. Based on these trends, there's been an improvement in the Chilean economy expectation. In fact, according to different sources, including the consensus released by Bloomberg, and Latin Focus, as well as their IMF based on the scenario, Chile should have the best average growth rate between 2020 and this year. I'd like now to focus on the main reasons that support this positive view. Please move to Slide number 4.

Chile has been recognized for implementing several active and effective measures during this pandemic. In this slide, I'd like to highlight some of these policies. The country has also been successful in terms of reducing the spread of the virus. After implementing a strong lockdown in mid-2020, the number of new enacted cases of COVID-19 has remained under control, leaving room to ease some mobility constraints relative to those that we have in the first wave of the pandemic. Consequently, on the chart on the other list shows the share of positive test has remained well below, not only the threshold of 10%, but also from levels seen in other countries.

Additionally, the government began a vaccination process with an increasing number of people being immunized at the chart of the other right shows. According to government estimates, nearly 80% of the population will receive the vaccine during this semester. Chile has also made a difference in the economic area. On the monetary side, the Central Bank adopted several measures beyond the low interest rates. At the chart on the bottom left shows the money supply has shortly risen as a result of bond purchasing, effects interventions, and the FCAC line among others.

The government has also played a key role, since the fiscal targets is equivalent to nearly 10% of the GDP, being the only country able to maintain an expansionary policy in the region, according to the IMF estimate. This position shown in the chart on the bottom right is possible, thanks to the strong fiscal position held before the pandemic. Therefore, we are confident that the recent green shoots will gradually translate into better dynamism in the next couple of years. Let's move to the next slide, where I will share with you our forecast, as well as the main reason supporting this positive view. We saved economy to grow nearly 5.3% year after falling 6% in 2020.

These figures positions Chile as one of the strongest and most resealing countries in the region at the chart on the right shows. The existence of better perspective for Chile is based on the following factors. First, the persistence of expansionary policy. The government announced that the fiscal spending will be maintained this year with a special emphasis on infrastructure and public investment. This type of policy is particularly favorable for employment and consumption.

A second factor is an improvement in the external scenario. The pick-up in the copper price, which represents more than half of our exports, is undoubtedly positive for the country. This trend is even better when we also consider the acceleration in China, a country that explains nearly one-third of total exports. Finally, as I mentioned before, Chile has begun a vaccination process, which will allow greater mobility levels in the future. The table summarizes our main forecast, we see a recovery in all the components of the GDP, mainly in private consumption, which should be the main driver of growth.

Additionally, we see an inflation rate is stable at 3% over the next couple of years, leaving room to the central bank to maintain the interest rate of 3.5% for a longer period of time. Despite our expectations, we are aware of several risks for the future. Some of them include the global GDP growth, especially considering the high dependence of Chile to the international trade. The evolution of the pandemic is also a critical factor to monitor in the future. Also, the last but not the least important, will be the political discussion in Chile.

2021 will be a key year for the future, since in only nine months between April and November, there will be elections for a new President for most of the Congress and members of the body in charge to prepare the proposal for the new Constitution. Now, I'd like to revise the main trends in the banking industry. Let's move to Slide number 6. Over the last 12 months, loans in the Chilean banking system have consistently slowed down, in line with the weak economic growth, by increasing only 2.4% year-on-year. As you can see on the chart on the top left, on the mortgage loans remain relatively stable, rising 8.1% year-on-year.

For the rest, commercial loan growth dropped 23.6% year-on-year as FOGAPE loan demand put off by the end of the last year. The most intense drop was seen in consumer loans, which fell …

Pablo Mejia: Sorry for the interruption. Just in case, for the people that may be having trouble seeing the presentation, if you could just refresh the slide presentation on the page and they'll pop up again.

Rodrigo Aravena: Okay, thanks Pablo. So, as I was mentioning about the banking industry, about the loan growth, okay.

I'd like to mention that the most intense growth was seen in consumer loans, which fell by almost 14% over the last year, in line with the filing percent that did the Central Bank survey that, with exception, while the fourth quarter has shown a weaker supply and demand for loans, as you can see on the chart on the bottom left. Nevertheless, loan demand for mortgage and consumer loans has risen sharply in the fourth quarter, while SMEs and corporations have normalized due to lower demand for COVID loans and a reduction in excess liquidity levels. We believe this indicates that we will begin to see an improvement in loan growth during the year, in line with a better evolution of economy. In terms of results, the Chilean banking industry focused on net income of CLP607 billion in the fourth quarter, excluding Itau figures, which is the highest level recorded during the year, due to high inflation and lower cost of risk as shown on the chart to the right. 2021 will probably be a transitional year for the industry.

It is not yet totally clear how the pandemic will continue affecting the economy, but we think it's reasonable to expect that loan should grow in line with GDP growth of 8% nominal, and cost of risk should return to the levels seen pre-COVID towards the medium term. Before passing the call to Pablo, to discuss our strategic advances and financial results, we want to highlight some achievements that we obtained during 2020. Please move to Slide number 8. Once again, we ended the year as the leader of the industry in many aspects, regarding our financial figures and social initiatives. First, despite the crisis, we were able to increase our loan book by 3% in a scenario where the global economy decreased.

In addition, during these uncertain times, our bank remains a supply to quality institution, leaving the industry and demand deposits and assets under management through Bank Chile investment. This was achieved by our corporate reputation and our focus on growing responsibly, which is constrained by the lowest non-performing loans ratio of only 0.97%, and the highest coverage ratio of 366%, both far superior from our peers. In the same line, this soundness was further reinforced by obtaining the strongest capital adequacy of the largest bank in Chile, as measured by the Basel index rating at 16%. We also know that more than ever, 2020 was a year when financial institutions must participate in the solution and provide assistance to citizens to overcome this crisis. In this context, we granted CLP2.6 billion in FOGAPE loans, and we've scheduled 1000s of loans for SMEs and personal banking customer.

Please move to Slide 9. These excellent results in 2020 were also recognized, as you can see on this slide. First, we received a National Customer Satisfaction award for providing the best service in the Chilean banking industry. This is a result of our efforts to offer the best experience to our customers through initiatives in innovation and other fields of our operations. In this line, we have seen significant advances in digital banking.

By far the most important was the announcing of our digital modern bank account, that has attracted 170,000 customers. As a result of our improvements in data transformation, we were recognized as Innovative Digital Bank of the Year by the European Magazine. As we mentioned in the last slide, we created a national plan to support our customers in this difficult moment. Therefore, we have made in this sense, where unknown risks by global finance, that owner asked with the outstanding crisis leadership recognition, and by surveys that resulted in our bank being the best financial institution in dealing with this health crisis. Since 2016, Banco de Chile has had a plan to promote inclusion within the organization, based on a policy and a declaration of principles, which is materialized in various initiatives to support employees, clients and the community.

Our actions are bearing fruit, and the European recognized us as the best bank for financial inclusion in Chile. As a result of our continuing goal of developing our employees, we were considered the best company in the country to attract and retain talent and the best time to work for in Chile according to university students. Finally, our sustainable business model was recognized once again, and the European, the bankers and global finance considered us the Bank of the Year. Now, I will pass the call to Pablo Mejia to discuss our advances and our strategic initiatives, and financial results posted by Banco de Chile. Pablo?

Pablo Mejia: Thanks, Rodrigo.

Please move to Slide number 10. Throughout our history, we have been able to be being very successful in providing attractive returns to our shareholders through a proven track record of consistent and robust results. We aspire to continue doing so and we truly believe that this is the only way to maintain our lead position to continue to be the most sustainable bank. To do so, we're continually reinforcing three key areas of our long-term strategy, digital transformation, efficiency and productivity as well as ESG. Strengthening these key areas will allow us to support our success in the long term and overcome future challenges.

Please move to Slide 11.The pandemic has accelerated the use of technology and the banking industry has been part of this change. During the past year, we confirmed a leadership in digital banking by successfully managing a very important increase in the usage levels of our digital channels by processing over 400,000 loans online to support our customers’ liquidity needs. Additionally, we innovated in several fields, updating all of our main online platforms, bringing more functionality, agility, inclusion and security to our channels and then integrating analytics tools, which provide us with valuable information to better understand customers’ preferences. Among the valuable advances in digital banking in the second half of 2020, we released our new digital bank account called Cuenta FAN. This account was created through a new methodology that allows us to design and add new complements easily with marginal costs.

Cuenta FAN account offers many benefits to customers in all segments of the population, because it focuses on bringing new clients to Banco de Chile, with all the advantages that our current customers already enjoy. For this reason, we've seen an important demand to open this accounts from low income to high income individuals. And this makes us very confident that this product will be profitable quickly. We believe that banks that only focus on providing digital payment means are neither an ideal way to compete nor suitable platform to generate profitability. Some of the most valuable benefits for our Cuenta FAN account customers are that there is no entrance and maintenance fees, and that these customers have access to the same loyalty program as a traditional bunch of a Chile customer.

All of our customers use the same loyalty program with the same banking. There is a potential customer base in Chile which found of around 5 million and that could become a Cuenta FAN account customer and 2 million of these individuals are already pre-qualified with products. In terms of numbers, Cuenta FAN has been a total success. Since its launch in September, we have already had around 170,000 new customers. This is a huge figure, when we take into consideration the total current account customer base, which is around 1 million.

It's also important to mention that part of our strategy is to expand and get closer to the younger segment and grow this customer base. This is also very clear that 92% of customers are new to Banco de Chile, and almost 90% of customers are younger than 50 years old. Please turn to Slide number 12. The successful implementation of the complete digital package of our customers has played a critical role in providing the best experience and standing up from our peers. Even through this period, that has been very challenging, we continue to maintain our high and leading indicators.

As you can see, we posted once again the highest brand recognition in the Chilean industry with a top of mind of 23%, with a wide gap with our closest competitors. Also, when banking customers were asked, they were to switch to another bank, which bank would they choose, we remained in the top six with a large difference to all of our peers, as you can see on the chart to the right. This position in these surveys is especially relevant in the context of new regulations will be much easier for customers to switch from one bank to another. Along with this superior brand recognition, we are also the leader in best service quality, as shown in the chart on the bottom left. The success in the satisfaction levels has been precisely due to the quality of our services and the products that we provide, and which help to generate strong, long lasting relationships.

These figures are reinforced with the evolution of client complaints, which, despite all the challenges that the industry incurred in 2020, we managed to improve from our prior years as a chart on the bottom right shows. Please turn to Slide 13. We continue to advance in optimizing our resources in 2020. To reduce our operational costs, we set clear targets based on three main areas. During the year, we moved forward and continued automating processes by leveraging technologies and simplifying procedures through greater use of IP in all areas of the bank, we are expecting that we will remain competitive in this highly challenging industry that is continually being disrupted by new financial technology firms.

The advances in technology have permitted us to reach more efficient processes in many areas of our bank. As a result, during January, we had to adjust our organizational structure, laying off approximately 4% of our staff to maintain the high level of competitiveness, and ensure long-term sustainability. Then revenues associated to this decision were reflected in our P&L in December of 2020. The second area identified for optimization is our branch network. In 2019, we started the process, but just in our structure that led to a reduction of 14% of our branches in two years.

This strategy includes a new service model that involves integrating great [ph] Chilean network, merger of nearby offices, as well as automation of customer service and cashier areas. It had a positive impact on operational productivity and efficiency. Another measure that contributes to reducing costs is the implementation of a specialized area that evaluates all purchases in the bank and has had excellent results in reducing admin expenses. We have especially seen advances in expenses related to maintenance, rental, travel, marketing and external advisory services. Additionally, we have created a new division called connectivity and efficiency, which will be responsible for accelerating the implementation of savings initiatives that we've already identified, and discovering new opportunities for improvements in productivity across the entire organization.

The improvement in efficiency and productivity can be seen on the charts of this slide. For instance, loan per employee has improved 36% since 2016, and total expenses to assets has dropped 59 basis points. We expect that we should be able to continue improving our efficiency ratio and reach a level closer to 42% in the medium term. Please turn to Slide 14. Another key strategic pillar of Banco de Chile is our strong commitment to sustainability that has accompanied us during 127 years of our history.

Since we're living in an unprecedented health crisis, our sustainability strategy during 2020 was concentrated in responding to the emergency and bringing support to the most effective by the COVID pandemic. In this context, we implemented a national support plan that included diverse initiatives to directly assist the most vulnerable families, customers, SMEs and community in general. These initiatives, I would like to mention their alliance with Desafío Levantemos Chile, a non-profit organization that allows us to support the health emergency raising resources to benefit almost 440,000 people. In addition, one segment that was particularly affected by the pandemic is SMEs. In order to promote their entrepreneurship and support the segment we launched the 5th National Entrepreneur Challenge which attracted over 56,000 participants.

Our national plan also consider supporting our customers as well as mentioned in the previous calls, we were the first Bank to implement a national plan for retail banking and commercial customers that include a series of special measures to support their clients so they cover their most urgent financial needs. All the initiatives that we've been taking to support the society maintain their bank as a financial institution with the best performance in terms of actions taken during this health crisis, according to IPSOS a leading surveying company. This recognition demonstrates that we are advancing the right direction as a sustainable institution that contributes to the development of Chile and its people. Finally, as a result of our actions toward sustainability Banco de Chile is listed in the Dow Jones Sustainability Index. In addition through our mutual fund subsidiary Banco Chile, we incorporate ESG factors and investment decisions that were adopted by the United Nations principles for responsible investment.

Now, please move to Slide 16, where we go into further details of our financial results. As Rodrigo highlighted in the presentation, 2020 was a very challenging year. The subdued GDP growth and higher unemployment observed in 2019 was further amplified by the arrival of COVID. GDP sank as unemployment skyrocketed. This was accompanied by a major drop in business and consumer confidence adversely affecting the banking industry's perspective.

Thankfully, it looks like we're beginning to see the light at the end of this COVID tunnel. In the fourth quarter, the economy gradually opened, loan originations increased and activity and transactional products began to return to more normal levels. This more dynamic environment together with the effective and consistent business strategy permitted us to post a good bottom-line this quarter of CLP126 billion, showing a slight change in trend, when compared to the prior two quarters. On a full year basis, we recorded CLP463 billion with an ROE of 13%, a level that is more than acceptable considering the magnitude of this crisis. Nevertheless, if we exclude the one-time effect associated to the recalibration of our group based provisioning model that was implemented in the third quarter 2020, as reported in now two of our financial statements, our full year bottom-line would have reached CLP520 billion.

This actually confirms our more conservative and prudent risk approach during the crisis. This is especially noteworthy when we compare outperforming results to all our peers as you can see on the bottom left of the slide. We also beat all of these banks in profitability as measured by return on assets, and recorded by far the highest Tier 1 ratio, both of which have shown on the chart on the bottom right. We've managed to this leading result not by chance, but by a consequence of a consistent strategy that puts a risk first. We fairly record more predictable results throughout the economic cycles, clearly setting us apart from our peers and generating greater value for our shareholders.

Please turn to Slide 17. Operating revenues in 2020 decreased 3.7% year-on-year in line with the weak economy, but rose to 8.4% on a sequential basis. As expected, the pandemic affected all of our lines of business as you can see on the trend in middle of the slide, for the first time in many years. Customer income for the full year fell from CLP1.6 trillion to CLP1.5 trillion or 5%. This was mainly due to the factors shown on the top right chart.

Specifically, income from loans went down by CLP35 billion due to the sharp contraction in consumer loan balances as a consequence of both a more prudent bank offering and the same time, the lower demand from customers as a result of the pandemic. Additionally, the low overnight rate negatively affected the contribution of our DDAs, which was partially offset by a 34% rise in deposits during the same period. Despite our fee-based business was very resilient because most of our revenues are generated by our large and well diversified retail customer base, it also dropped but only marginally by 2.5% year-on-year, thanks to the joint venture we embarked with an international insurance company. On other hand, sales and distribution revenues grew by CLP6.2 billion during the year, as a result of more activity from derivative transactions related to our corporate and wholesale banking units. Overall, negative growth and customer income was partially offset by non-customer income, which grew 3% year-on-year.

Our Treasury business had a strong year and that's explained by the good results in the management of our trading and AFS portfolios, and a scenario of decreasing interest rates as well as a lower CVA DVA charges as a result of improved probabilities of default and higher revenues from assets and liability management. Despite the 2020 was very challenging, we have finally begun to see some signs of recovery. Loan demand started to strengthen and our view on the economy is improving. This should translate into better loan growth figures in the near future, which helped grow interest income. We've also begun to see that the normalization of economic activity which has been reflected in higher transactionality and in turn fee income.

The second and third quarter were the worst in this respect. Excluding income that we recognize from the joint venture and fee income and the onetime greater expense and commissions paid related to credit cards, we grew fee by 2% quarterly sequential basis or 8% annualized. This is due to the most products are recovering from more normal levels of fee income generations such as credit cards, collections, payments, as well as mutual fund management. Some products are actually posting higher revenues with respect to the same quarter last year. These products include current account administration, guarantees, letters of credit as well as trading securities management.

We expect this more dynamic activity should continue in the coming quarters and that we should post positive growth figures in 2021, as long as there are no more major lockdowns in Chile, similar to the ones we saw in the second quarter of 2020. It's important also to highlight that the focus of Banco de Chile has always been to promote responsible growth in every segment we serve. We firmly believe that this is one of the main pillars of our proven and successful track record. As you can see on the charts to the right, this focus has allowed us to post once again the highest fee margin and operating margin net of risk in the industry. Through this approach of growing selectively in positive economic times and taking the proper safeguards during downturns, we've been able to provide an adequate return for our shareholders.

On the following slides, we take a closer look on how our portfolio has changed throughout the course of the year, and the evolution of our asset quality. Please turn to Slide 18. Total loans grew by 3% year-on-year ending the quarter with a portfolio of almost CLP31 trillion. The general trend in 2020 was an environment of lower demand from customers, stricter credit risk requirements from banks. As you can see on the chart on the top right, loan volumes are sustained by COVID FOGAPE program.

In our case, the program was mainly focused on customers in our SME segment, which are businesses with annual sales below $3 million per year. You can see on the chart on the bottom of the slide, loans on the segment grew by 21% when compared to 2019. On a sequential basis, we saw a little more dynamism in quarter in personnel banking posting the rate of 1.3% or 5.2% annualized. Once again, residential mortgage loans were the main driver of growth, up 1.8% from the third quarter of 2020. The demand for this product has been more dynamic and more resilient than initially expected.

Investors seem to be seeking more profitable, low risk investments and real assets as interest rates worldwide reach historically low levels. In terms of origination, mortgage loans grew by 29% on a sequential basis but only represents approximately 60% of the level we recorded the same period last year. Meanwhile, it's also worth mentioning that consumer loans for the first time since 2019 growth this quarter, growing 0.3% over the third quarter 2020. It's also notable to highlight that consumer loans have consistently increased monthly originations, accumulating a rise of over 50% when compared to the third quarter of 2020. Despite this impressive rise, it still falls short given the levels recorded in the fourth quarter 2019, representing only 73% of the level posted during that period.

With regards to wholesale lending, this area has slowed and grew 2% year-on-year, and on a sequential basis, decreased 5% mainly due to a reduction of liquidity buffers maintained by a large number of multinational companies during the year, in order to face uncertainties associated with the pandemic. To a lesser extent, the sharp decrease in exchange rate at Chilean peso depreciation negatively impacted the balances of foreign currency denominated loans. Looking forward, we expect that 2021 in line with the latest credit survey from the Chilean Central Bank and the better perspectives for the overall economy, demand should rise and risk appetite from banks will likely rise as well. Thus, we expect lending to gradually resume, particularly consumer and commercial loans, which are the products most affected in 2020. We estimate that the total loans should pick up some market share and grow around 8% in 2021.

Please turn to Slide 19, without a doubt, we are the financial institution with the best funding structure in Chile. This is one of the strongest competitive advantages, which has been possible through our ability to provide the best service experience that our customers value and through a solid brand and capital soundness. 2020 had significant changes in our funding structure. First, demand deposits grew significantly, rising 34% over last year, and today represents 33% of total assets as shown on the chart on the top left. This is significantly higher than all of our peers you can see on the chart to the right.

The low interest rates, combined with an uncertain economic scenario and multiple financial aid packages for individuals and SMEs drove this increase in deposits. Second, we also took advantage of the liquidity facilities provided by the Central Bank, which we obtained mid-term funding too dominated in pesos and the monetary policy interest rate. These two important changes that are shown on the chart on the bottom left, which mainly replace time deposits held by financial counterparty, particularly in local currency. This combination with a world class risk ratings that allow us to place bonds at low spreads has permitted us to continue to be the leading bank in cost of funding. Finally, we finished the year with the strongest level of Tier 1 in our recent history of 12.2%.

This is especially important when we begin to implement Basel III at the end of 2021. In this regard, based on our current information estimates, we expect to implement Basel III without any material issues, taking into consideration the phase in period adopted by the Chilean regulators. Moreover, as you can see on the chart to the right, we have the highest level of Tier 1 versus all of our peers. We're confident that we can take advantage of the opportunities that presented during this period to grow our assets and strengthen our relationships with our current customers, as well as to continue increasing their share of wallet, especially through our digital contact channels. Our new digital initiatives should permit us to keep expanding our customer base while improving our market leading position and core demand deposits.

Please turn to Slide 20. Cost of risk in 2020 reached CLP463 billion, up from 33% from last year. Nevertheless, if we exclude additional provisions and the one-time adjustment of our risk following the third quarter, costs of risk would have dropped 20% year-on-year. Clearly, this is not in line with the economic scenario, but showed the impact the diverse financial temporary aid packages and justifies the proactive measures taken by the bank regarding additional provisions and adjustment in risk models. The financial industry and us first gave various payment holidays to its customers, and this was later accompanied by government guaranteed loans for SMEs, as well as two pension fund withdrawals that amounted to approximately $35 billion.

Amongst other initiatives, mainly for the lower income segment of the population. The sum of all the cash disbursements of these assistance programs actually for the first time in Chile history, rose disposable income. These factors drove a reduction and also improved significant customer payment behavior. Nevertheless, we can't rule out that once the one specific we reduced our core cost of risk and NPLs will return to more normal levels. For this reason, we have accumulated at the highest level of coverage in the industry of 3.6 times, clearly differentiating us from our main peers.

As you can see on the chart on the top right, our delinquency ratio is more than 50% lower than our peers and the level of additional provisions despite we have the best portfolio. In terms of the quality of our retail books that had payment holidays in this portfolio has evolved well. The personal banking area has shown excellent payment behavior with low levels of NPL. They're below the level required prior to the crisis. With regard to the SMEs, we provided a six month grace period to almost 40,000 small and medium sized businesses.

And one-third of these customers have begun to pay their first installment in December. Of this kind of pace, we've also seen very positive payment behavior as reflected in our good cost of risk indicators. All of these results are the consequences of important resources that we've deployed to credit risk in Banco de Chile. We're confident that our commitment to manage risk prudently, growing responsibly with a consistent strategy will permit us to continue posting a track record about ranking our competition not only in credit risk but also in profitability. Please turn to Slide 21.

Our determination to improve our operating costs continue to bear fruit. Year-on-year total operating expenses decreased 3.1% for the full year when compared to last year, and 2% this quarter when compared to the fourth quarter of 2019. As you can see on the chart to the right, personnel expenses decreased CLP18 billion driven by lower variable compensation and the drop in seven days that was partially offset by rising salaries, but was below the level of inflation mainly as a result of the strict rehiring processes that we have implemented, and this produced a reduction in headcount throughout the prior year. Administration expenses also had an important drop explained by the lower outsource and external advisory services, due to the internalization of core developments aiming to improve efficiency, and due to lower business activity affected by the pandemic. There was also a reduction in maintenance of fixed assets and lower marketing expenses, thanks to improvement in cost effective campaigns implemented throughout 2020.

These effects were partially offset by rising IT expenses, explained by various IT projects related to digital transformation and regulatory projects, as well as the temporary expenses due to sanitation measures that we had to undertake to keep our customers and staff safe during the pandemic. Through effective cost control measures, we've been able to maintain our efficiency ratio flat this year at 45.5%, and actually reduced our cost of assets from 2.2% to 1.9%, as you can see on the chart on the bottom left. Also, I think it's important to highlight how we compare to our peers in terms of cost control. Please take a look at the charts to the right. Since 2018, we have been able to improve our cost base in both salary expenses, as well as administrative and other expenses while our main peers have been performing comparatively worse.

Please turn to Slide number 22. 2020 was one of the most challenging years in the last century. The good results in the banking industry has been attained due to solid risk management practices in the banking industry, as well as a coordinated effort that took place between the financial industry and government to reduce as much as possible the negative effects of the crisis, and to avoid this temporary cycle effects economy on a permanent basis. We're positive for 2021, especially as Chile has already begun the vaccination process and this should allow us to get back to more normal life faster than other Latin American countries. As you can see on the chart, Banco de Chile has been the best performing bank not only in Chile, but also between our main peers.

This shows how much confidence the market has in our superior business approach as well as its view on outcome of the crisis. We're confident that this will continue to support the leading banking in Chile, and thanks to superior risk management that supports our business model and permits us to have a more stable and reliable returns for our shareholders. Finally, before moving on to questions, I'd like to mention some key takeaways. In terms of GDP, we expect activity to grow around 5% in 2020. Unlike other years, we don't expect that the banking industry will grow 2 times real in GDP loan growth.

For this reason, it's important to understand that the current state of the cycle 2020 total loans for the industry grew 2% year-on-year, despite the 6% decline in the overall activity, showing counter cyclical role that we hadn't seen in any other crisis. This growth was driven by commercial loans due to the FOGAPE program and mortgage loans, partially offset the reduction of 14% in consumer loans. In this environment, given a very high comparison base, we anticipate that 2021 loan growth for the banking industry will only partially recover the expansion rates that we saw prior to the pandemic, even though we have better perspectives for GDP. Specifically, we think it's reasonable to expect long growth of around 8% in nominal terms for the system. In terms of Banco de Chile, we expect to grow slightly higher than the industry's average, focused on high margin products.

We continue to focus on growing in the consumer to middle and upper income segments, as well as commercial loans for SMEs. We're expecting that we should pick up market share in consumer loans in 2021. In this environment, we expect NIM for us and the industry to be below the level obtained in 2020, because of the negative effects of the low overnight rates on loan spreads, flat inflation as well as the reduction of the contribution of DDAs net interest income. We think it's reasonable and realistic to expect a slightly lower NIM for us and the industry with respect to the average level obtained in 2020. In terms of risks, we expect 2021 as a transitional year more likely the worst is behind us and we should begin to see a cost of risk above the loan and improvements above the levels that we've seen, especially in banks that have not made adjustments in the provisioning models.

Despite that NPLs are very low at 1%, it's important to highlight this was positively affected by the various temporary factors, such as assistance programs to our customers and withdrawal from the pension funds. These factors will tend to dissipate during the year, it's reasonable to expect a more normal level of NPLs and a cost of risk this year, probably around 1.2% to 1.3%, respectively. Nevertheless, it's even more important to note that we have a solid loan portfolio with a retail customer base that is more concentrated in lower risk segments in a strong SME book with a historic low levels of delinquency. Actually, we've been recognized for having the strongest customer base in the industry with a proven track record. This has been as a result of a solid risk culture, which always focuses on growing responsibly.

This strategy should allow us to slowly transition back to more normal levels of cost of risk. We expect to the top line growth should slow. But given our emphasis cost control, this should permit us to maintain our cost ratios relatively flat in 2021, efficiency ratios. And finally, in terms of profitability, we're still facing several sources of uncertainty mainly in terms of the degree of the recovery of the pandemic. We don't know the impact of this crisis in critical areas as employment and potential growth, which will affect the evolution of the asset quality indicators.

So the future trend of risk indicators will be critical for the ROE for us and the industry as a whole. In this environment, we expect a gradual increase of ROE this year, relative to the average level posted in 2020. The implementation of the strategic projects will allow us to offset some negative forces, such as lower interest rates and still weak employment. In the medium term, we think that this should see an improvement in the ROE towards levels closer to our history, as long as the economy improves, and the capacity of growth and interest rates converge towards higher levels. It's important to reinforce the idea that it will be strongly depend on the evolution of the economy once the pandemic was left behind us.

Thank you. And if you have any questions, we'll be happy to answer them.

Operator: Thank you. The floor is now open for questions. [Operator Instructions] The first question is from Yuri Fernandes with JP Morgan.

Please go ahead.

Yuri Fernandes: Hi. Pablo, Rodrigo, thank you very much. I have some question on the strategy of Banco de Chile regarding consumer loans. I guess with a FAN account, maybe the bank will return stronger to this market I guess CECL, USD, Credit Chile years ago.

This has been a market the bank has not been focusing a lot. So I would like to understand if this is correct. Like this is part of your core strategy. Now the bank want to be more aggressive on consumer loans maybe moving as likely to the lower income segments. And if that's right, how do you see competition there? Because we see all the banks doing a similar approach.

Like something there we slice and super digital you have match who’s shy we have like maybe the retailers, right? How do you see competition there? Like, how much should we expect the customers upfront to keep growing? I don't know like a little bit more of color on the consumer side. And I have a second question regarding margins. This year, your NIM ended at 3.5, this is about 50 bps lower than your main peers, than Santander Chile. And when we look historically, the name of Banco de Chile and Santander Chile, it has always been very close, right, like 10 bps. Sometimes you have higher margin sometimes Santander Chile having higher margins.

And I guess the message you had in the call is that maybe margins pressure may continue a little bit in 2021, so maybe it will still come down from this 3.5. And when we take your peer message, they also point to some decrease but as you said, like some marginal decrease. And my point is, why now in 2021 should we see a bigger gap between your margin and your peer? Why should we not expect the Banco de Chile to catch up in the margins versus your peer? Thank you.

Pablo Mejia: Thanks, Yuri. So, in terms of our strategy going forward, our strategy is today being focused on growing our customer base using the Cuenta FAN.

So the Cuenta FAN is a product, which is something that was recently launched, as mentioned. We've grown strongly with over 170,000 new customers in less than around one quarter, which is super relevant, if we consider that our customer base as current accounts is about 1 million customers. So the interesting thing of this account is it permits us to cross sell these customers quickly. Cuenta FAN, we are developing in order to cross sell these customers quickly into Banco de Chile customers, where they can maintain their current account their bank account number and transfer that as a current account. Plus, there's a lot of incentives for these customers to come into the bank, which is not only lower income segments, which maybe some players in the industry are focusing on.

And for us is to bring up these new customers into Banco de Chile, which can be from all customer segments, because we're providing them with the same loyalty program. So the idea for us is to pick up market share in consumer loans, but it's more focused on the middle and upper income individuals and to bring new customers into the bank, using this new Cuenta FAN, which is attractive for all the customer segments. Thanks for the initiatives, we're not they use the same apps, they use the same loyalty program, et cetera. So that's been the main driver for customer growth today. In terms of margins, what I can say in terms of margins is that what we've mentioned in the presentation and in the press release, that's one of the pressures on margins has been from a variety of factors.

The loan book and high margin products has decreased, for example, consumer loans in low double digit figures in terms of percentages around 13%-14% for us and the industry. If you look at the growth in SME loans, it's been focused more in terms of FOGAPE, so that's a lower interest rate product. So you're having a negative impact. On that side, you also have the fact that we've had a huge increase in deposits in Banco de Chile. So that also increases the level of available for sale instruments, which is recorded in interest income, so that affects the margins.

And as well as some other players in the industry, as you well know, have acquired portfolios, and that also increases their margins or maintain some slots while the rest of the industry in 2020 probably saw a decrease in margins. So it's also in terms of comparison base. And by saying that also, by acquiring another company, you may maintain your margins flat. But you also have to take into consideration the risk of the portfolio, which may be today risk hasn't been a major impact on banks, other than with additional provisions, because there's been many different programs to assist the customers and the all these payment holidays all this help from the government. But in reality, the reason why we did the additional provisions and we made these changes in the provisioning model is because these programs can last forever.

So we decided that it was prudent to undertake these provisioning models, adjustments and additional provisions, which from our understanding from financial statements, no other banks actually did an adjustment in their risk model last year. And that's why we highlighted on the first slide of Banco de Chile that we had the highest net income and we adjust this by our risk. If we hadn't adjusted our risk model, we would have had a higher net income than the main peer in the industry.

Yuri Fernandes: Super clear, Pablo. And regarding the consumer loans, so the thing is it's reasonable to work.

I don't know, you said maybe 8% nominal for the industry and you're growing slightly higher. Do you think like 10, 12, it's reasonable for consumer loans growth this year?

Pablo Mejia: Slightly above 8% in low double digits. It really depends on the evolution of the economy, the outcome of the vaccines, how quickly the economy and unemployment improves. So there is a possibility that 2021 could be better than the markets perspective. But today, it all depend on the outcome of the vaccination process.

Yuri Fernandes: Super clear. Thank you very much.

Pablo Mejia: You're welcome.

Operator: The next question is from Tito Labarta with Goldman Sachs. Please go ahead.

Tito Labarta: Hi, good morning, Rodrigo and Pablo. Thanks for the call. My question is on efficiency. You mentioned you think you can eventually get, I think, around 42% efficiency, just, I guess how you would get there? And you mentioned your cost control, I think it's definitely an area of focus. I mean, you're seeing some pressure on margins, as you mentioned, and revenue growth in general.

So to achieve that, 42% efficiency, what type of cost control does that imply? Expenses in line with inflation below that, what type of revenue growth do you think it would take to get there? And in terms of timing in a couple of years? Any color you can give on that would be helpful. Thank you. And also, just to add to that, just given the Cuenta FAN and digital initiatives, how much is all this digitalization trend benefiting the efficiency or potential improvements of efficiency? Thanks.

Pablo Mejia: Thanks. Well, today how we measure our efficiency ratio, we have a 45.5% level.

We think that we have room to continue improving that level to levels around 42%, and it's really focused, as we showed in the presentation in those three main areas. One is to control our costs better in order to use our resources better across all the bank, we implemented in 2020, an area that focuses on reviewing all the major purchases in Banco de Chile advisory services and is really focused on reducing our administration expenses. We also have been implementing for a while now more automation and the back office processes. And we're also improving our service model across the branches, as well as being very, very drift in terms of rehiring individuals who leave the bank on their own. So over the last five, 10 years, you can see how this evolved and their headcount has gradually reduced because of this strict rehiring process.

Going forward, we've also implemented a new area that's looking at making the banks more productive and efficient, and there we'll be looking at many diverse areas that we can continue improving. This includes visualization of the bank. But there's no one key area that I can say that this is the key area that will mean 1% reduction in efficiency. It's the effort across all areas of the bank, a conscious effort to reduce expenses in each division by each manager. Also this year for 2021, I think it's important to mention that the costs going forward for 2021 in general, what we should expect is costs outside extraordinary events should be below efficiency inflation.

Tito Labarta: Okay, great. Thanks, Pablo. And is that a trend that can continue sort of keeping the cost growth below inflation? Is that part of what it will take to get there?

Pablo Mejia: Yes, so if we look at some important facts to consider as well, I'm not sure how you have face the efficiency ratio, but our efficiency ratio, we don't include its operating income, excluding its not net operating other expenses. So if we look at the leader of the industry, the leader has 42.5%. So we have a gap there with 3%.

And we should think that Banco de Chile still has a lot of room to continue improving our efficiency across administration expenses. You can see there is room as well to be more efficient as we grow. We can use digitalization the Banco de Chile more efficiently to grow in the future without having to rise our expenses.

Tito Labarta: All right. Thank you, Pablo.

Operator: The next question is from Neha Agarwala with HSBC. Please go ahead.

Neha Agarwala: Hi, Pablo and Rodrigo. Thank you for the presentation. And thank you for taking my question.

Could you give us some sort of guidance or indication on how the cost of risk could evolve for next year? And what kind of dividends can we expect for 2021? Thank you so much.

Pablo Mejia: Cost of risk, we are still in a very uncertain time. So it's uncertain for the -- uncertain economically. We don't have a clear idea, understanding yet on the evolution of COVID. But we think that 2021 should be a better year economically than 2020, which that should mean that we should gradually like a transitional year gradually begin to return to more normal levels of cost of risk which is between 1.2% to 1.3%.

Probably, because of all these measures that the government undertook and different benefits of the banking industry provided, we should probably see NPLs for the industry rise a little, because the level that we've seen in 2020 are probably artificially low. And then in the medium-term 2022 probably, around the cost of risk, which is more in line with our long-term level of 1.1% would be reasonable to expect.

Rodrigo Aravena: Hi, Neha, this is Rodrigo Aravena. I'd like to add one AVSD [ph] here is that important to keep in mind that 2021, I mean this year will be a transitional year, and we will have a lot of uncertainty this year. So we don't know for example, what will be the long-term impacts of the pandemic in key factors, key drivers of our business.

For example, the long-term impact on potential growth in terms of long-term interest rates. As I mentioned before, this year we will have a very important discussions for the future of the country, a lot of elections, et cetera. So that's why we tried to provide the most realistic guidance in terms of providing more basic fundamentals and mentioning that we have seen a lot of uncertainty, just to have any [Indiscernible], for example. Only in 2022, we will recover the GDP level that we have in 2020. The unemployment rate will likely remain around 10%, 10.5% during this year.

So that's why, we are still caution for this year. We are now less than 2021 is at all the transitional year. And we will likely have more long-term figures only in 2022.

Pablo Mejia: In terms of dividends, we recently announced that we proposed for the shareholder meeting payout of 50% of distributable net income, which is in line with what we had mentioned and released in material pack, and 2019 would be our level 60% of net income payout ratio. That's the level that we provision in our equity account.

Neha Agarwala: That's with relation 2019 earnings, right?

Pablo Mejia: In 2019, there's a material factor we mentioned that the level of provision, the level that we saved in terms of equity accounts will be -- the balance sheet will be 60% of distributable net income. So in the past two years, we had 70%, if I'm not mistaken and 60% for this year, based on distributable net income.

Neha Agarwala: So based on 2020 distributable net income, would you be paying out 60% during this year?

Pablo Mejia: 60% of distributable net income, so distributable net income it's slightly below 50% of net income.

Neha Agarwala: Okay, got it. Thank you so much.

Pablo Mejia: Net income less the effect of inflation on -- you get to distributable net income and based on that figure 60%.

Neha Agarwala: Okay, great. Thank you.

Pablo Mejia: You are welcome.

Operator: The next question is from Pierre-Alexandre [ph] with Credit Core Capital.

Please go ahead.

Unidentified Analyst: Hi, Pablo. Hi, everybody. I had two questions. First is [Indiscernible] regarding maybe [Indiscernible] you mentioned that as of December you had 460,000 of personal loans still in the program.

You could give us the amount that is related to those 460,000. And the second one is regarding return on equity. Do you believe that returning to 50% ROE for 2021 as a challenge? Or it's something realistic for the bank given the current expectations?

Pablo Mejia: In terms of the second question, ROE for us, we think that ROE it's still difficult based on the information that we had in our expectations and all the different variables that can occur compared to the year-end. But we're confident is that 2021 should be a better year than 2020, costs of risk should be lower. We're expecting more dynamic loan growth, which should be able to have at least a partial recovery of high margin products that we launched in 2020, consumer loans, for example.

So it's a transitional year, which we think that after this while interest rates return more to normal levels, as GDP maintains to the levels that we've seen in the past, we can return to more similar levels of ROE that we had in the past. But for 2021, they still have many uncertainties, so it's difficult to give you a clear answer. But what we're certain of is that we should have the best profitability ratios in Chile amongst the banks.

Rodrigo Aravena: And can you repeat the first question, please?

Unidentified Analyst: Okay, it's regarding [Indiscernible] I'm going to say here in which page, okay, it's in Page 14 of the presentation. You have, personal banking in the customer support front, 460,000 of personal loans rescheduled, that is as of December 2020.

And if you could give us the amount to be at least 460,000 that's personal loans is scheduled to the value.

Pablo Mejia: Okay. So the personal loan rescheduled we had in 2020 there is different plans that were implemented in Chile to help customers reschedule personal loans, which are related to consumer loans and mortgage loans. We also have customers in credit cards as well. So what we provided customers in the second quarter of last year and the third quarter, is to reschedule or defer consumer loans for three months.

And in terms of mortgage loans, we offered them the possibility that we schedule those loans for up to six months. Today, the customer support plan for personal loans for consumer loans and mortgage loans has already come due, so these customers are already paying. In terms of SMEs there's about 40,000 customers that were benefited from the COVID-19 government guaranteed loans. And for these customers, it also included a deferral fund. So of the 40,000 customers, of the almost 40,000 customers, about one-third of those customers received or began paying their first installment in December, and these customers and also the other personal banking customers are all having very good payment behavior and have been doing exceptionally well, and you can see that in the numbers that we've posted in cost of risk.

Our models are sensitive to early deterioration, early delinquency. So if they don't pay within the first month, generally you can see those impacts. And what we've seen and what you can see otherwise is that the payment behavior of the personal banking customers and SMEs has been very positive.

Unidentified Analyst: So that 460,000, what is the number of the loans rescheduled throughout 2020, not necessarily the ones that are pending or still have a rescheduled, value?

Pablo Mejia: So, what was rescheduled at one point in time, not what’s pending.

Unidentified Analyst: Okay.

Rodrigo Aravena: Perhaps it's important to mention that in the annual report of the bank of 2020, which will be released by early March, there will be much more information breakdown and details about all the program what were scheduled for loans and other similar things.

Pablo Mejia: That's all in the financial statements, you can see in the financial statement, there is a note regarding that with the breakdown.

Unidentified Analyst: Thank you. Thank you very much.

Pablo Mejia: You're welcome.

Operator: The next question is from Ernesto Gabilondo with Bank of America. Please go ahead.

Ernesto Gabilondo: Hi, good morning. Rodrigo and Pablo, thanks for the presentation and for the opportunity to ask questions. My first question is a follow up with program portfolio.

I know that you will provide further details, but can you share with us what is the percentage of delay that you have seen so far? And for my second question, can you provide your expectations for fee income? Should we expect they growing above or in line loan growth? I don't know, this could be supported by a recovery in insurance and your alliance with Chubb. And how should we think about your effective tax rate? Then finally, when incorporating your guidance, would it be reasonable to expect a net income of around CLP600 million? Thank you.

Pablo Mejia: One second, please. Okay. So in terms of your -- as I mentioned, in terms of your first question of the payment behavior of customers in all the segments has been evolving very positively.

So we've had a good level of payment behavior in SMEs and consumers and mortgage loans. And we're posting, as you can see throughout the first quarter, sorry fourth quarter, very low cost of risk, which most of the cost of risk that we had was we had a level of around 85 billion and 80 billion was additional provisions. So you can confirm that the payment behavior has been exceptionally well at Banco de Chile. So we have around and there's different ways to look at this. So I could tell you in 30 days, 60 days, 90 days overdue, in 30 days overdue, we have a level close to 2% of loans that are overdue from customers who have had some sort of payment holiday.

And the second question for fees, what we've seen in fees is more transactionality and good performance in the last months, returning to more normal levels. It's like a V shape. So what we've been seeing is customers as the economy continues to open transact more. And this has been helping our fee based business. Obviously, we're still not at the levels that we've had prior to the crisis, but we think as the economy continues to evolve, the vaccine to continue the rollout and normalization begins, we can return to those levels.

So in terms of fee growth, we think that the core fee growth is around 8% for us. And that would be excluding all of the Chubb fees that we had. In terms of expectations, obviously, those could be better if the economy improves faster than we expect and the market expects.

Rodrigo Aravena: And also important to consider the role of inflation in the future. So as Pablo mentioned, we will likely have a V shaped recovery during the year.

In the margin, we're expecting more than any economy in the second half of the year. So that's why there is a possibility to have greater economic growth, high inflation, probably potential recovery interest rates back. Given the uncertainty, we are not providing a more specific guidance in terms of numbers for the year, especially in terms of ROE, et cetera. That's why we would like to reinforce the idea that it will be an efficient year and on average perhaps in some measures, on average 2021 will be similar to 2020, but we're expecting a better performance in the future, especially in the next year.

Ernesto Gabilondo: Perfect.

Thank you, Rodrigo and Pablo. And just for my question on your expectations for the three consecutive tax rate?

Pablo Mejia: Expectations of a tax rate was a 3% level of cost of inflation. Generally, the banking industry should be around 23% more or less. So in general, that should be the level. There's extraordinary items in there.

For others, I'm not sure, but for us, 23% with 3% inflation.

Ernesto Gabilondo: Perfect. Thank you so much.

Pablo Mejia: You're welcome.

Operator: The next question is from Claudia Benavente with Santander.

Please go ahead.

Claudia Benavente: Hi, thank you. So basically, I'd like to know a little bit more in additional provisions. Let's suppose that we see an economic recovery, how should we see the amount of additional provisions created in 2020? Not the buffer that you already have created since years ago. So basically, I would like to know if there is a likelihood that we see this amount of provisions being released? Or should we see as an additional security buffer? Thank you.

Pablo Mejia: In terms of additional provisions, these provisions were made throughout a large amounts of these provisions were made in 2020, because of all the uncertainties that exists in the economy, with regards to the pandemic, and how this is evolving. I think today, it's very early to tell how the economy will evolve, the expectations is that it should be better, but we can't rollout. We can't rollout anything at this moment in time. So it's still a moment of uncertainty and it's difficult to say, the evolution of those additional provisions in the future.

Rodrigo Aravena: So we are waiting for more information in terms of the impact of the pandemic in the economy with now what will be the legacy of this crisis in the economy.

So that's why today we can rule out similar actions that perhaps what is more important is to keep in mind, the total stock of provisions that the bank has today, especially when we compare with other banks in Chile. So I will quote operationally it's much better than our main competitors.

Claudia Benavente: No. I know -- what I was asking is supposing that we see an economic recovery, should we see this created additional provisions in 2020, something that could be released? Or you believe that having a 3.5 times coverage ratio, is better like an economic recovery?

Rodrigo Aravena: Sorry. In that case, Claudia, what we would need is a more sustainable recovery.

It's almost impossible to have this year in Chile, a nearly zero output gap, the unemployment rate. Despite the recovery, we can discuss, for example, if the economy will grow this year 5% or 6% that in any case, the unemployment rate will likely remain above the levels that we saw in the past. So that's why today it's very difficult to answer this question, because despite the potential recovery, we need that this recovery will be sustainable in the time, without having that type of policies from the government. So I would say now that we would need more information and more signs of recovery to sustain the direction of provisions. So that's why today, we remain very bullish].

We would like to see the quality of recovery in the beginning of the year. Perhaps in the next quarter, our vision will be different I don't know, but according to the information that we have so far, we will remain very cantilevered. And we prefer to say that we can rule out similar decisions today. Let's see what happens over the next few months.

Claudia Benavente: Okay.

Thank you.

Operator: This concludes the question-and-answer session. At this time, I would like to turn the floor back to Banco de Chile for any closing remarks.

Pablo Mejia: Okay. Thank you for participating and we look forward to speaking with you in the next quarter earnings.

Operator: Thank you. This concludes today's presentation. You may disconnect your line at this time and have a nice day.