Banco de Chile (NYSE:BCH) Q1 2024 Earnings Call Transcript

But the economy today is still under some pressures, there are some uncertainties for the CMF. For example, on the political side, there’s going to be important elections to monitor by October this year, the municipal election. Some reforms are discussed today as well. So that’s why given our, that in our baseline scenario, the economic conditions would be better in the future. That’s why we’re expecting a normalization and an improvement in terms of asset quality indicators, NPLs, et cetera. But in an environment where, today the economy is under pressure with below trend, growth with still higher improvement rate, it’s important to analyze how fast the economy will convert to the more normalized condition.

Andres Soto: Thank you, Rodrigo. Do you have any timeline? I mean, do you expect this deterioration to get worse before it gets better and when will you be forecasting a turning point for NPLs in Chile?

Rodrigo Aravena: It’s reasonable to expect second half with better figures compared to the first half. That again is very important to analyze the evolution, for example, the monetary policy and also investment, because there is going to be important events to monitor in Chile. But in our baseline scenario, when we consider that in the second half, the interest rate will be lower, the inflation rate will be lower as well with a better economic growth. All these conditions are consistent with better asset quality in that time. That’s why given the current information, I would say that, it’s reasonable to expect improvements since the second half of this year. I mean, probably today, we are in the turning point, an inflection point in terms of NPLs and asset quality indicators during this first half of the year.

Operator: Thank you very much. It looks like we have no further questions. I’ll pass the line back to the team for the concluding remarks.

Pablo Mejia: Thank you, Felicia, and we hope to have you with us for our next conference call results. Thank you very much.

Operator: Thank you very much. This concludes today’s conference call. We’ll now be closing all the lines. Thank you and goodbye.