Moody's rates Banco de Chile notes A1

Moody's Investors Service said it assigned an A1 rating to Banco de Chile's ¥10 billion fixed-rate senior unsecured notes due June 3, 2039.

The outlook is stable.

The notes will be governed by New York law and used for general corporate purposes, Moody's said.

The A1 debt rating is based on Banco de Chile's strong asset quality, good profitability and stable, low cost retail deposit funding, although its capitalization remains moderate by global standards, the agency said.

Banco de Chile's asset quality benefits from a conservative risk management and a predominant focus on low-risk large corporations, high income consumer clients and residential mortgages, Moody's said.

As of March 2019, Banco de Chile reported stable and low nonperforming loans equal to just 1.2% of gross loans, while loan loss reserves covered non-performing loans by an ample 190%, the agency said.

Banco de Chile's robust core profitability reflects its diverse revenue sources, owing to a leading position in several of its target market segments and low credit and operating costs, Moody's said.

The agency said it believes these factors will continue to support strong profitability despite the 29% net income decrease in the first three months of 2019, the agency said.

Banco de Chile benefits from low cost retail deposit funding that boosts margins and limits its vulnerability to refinancing and interest rate risks, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.