Banco Itau Chile ADR

Ladies and gentlemen, thank you for standing by and welcome to the Banco Itaú Chile 4th Quarter 2024 Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's remarks, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require further assistance, please press star 0. I would now like to turn the conference over to Claudia Lave. Please go ahead.

Thank you. Good morning, everyone. Thank you for joining us for our fourth quarter 2024 conference call. I would like to remind you that our remarks may include forward-looking information. and our actual results could differ materially from what is discussed in this presentation. I would also like to draw your attention to the financial information included in this management discussion and analysis presentation, which is based on our managerial model in which we adjust for non-recurring events and apply managerial criteria to disclose our income statement. Please remember that since the second quarter 2019, we are presenting our income statement in the same manner as we do internally. This managerial financial model reflects how we measure, analyze, and discuss financial results by segregating commercial performance, financial risk management, credit risk management, and cost efficiency. We believe this way of presenting our results will give you a clearer and better view of our performance from these different perspectives, please refer to pages 15 to 18 of our report for further details. I am pleased to welcome Andre Gehli, our CEO, Andres Perez, our chief economist, and Matias Valenzuela, our head of financial planning and analysis and capital, who are here with me today. To comment on the macroeconomic backdrop of the first quarter 2024, and on our expectations for next year for Chile and Colombia, I would like to turn to Andres Perez. Good morning, Andres.

Thank you, Gloria. So, good morning again. So, first off, in this slide, I will provide some very brief remarks on recent macro dynamics in Chile. First off, activity was better than expected during Q4 of 2024, with the quarterly GDP proxy increasing sequentially by 0.4% quarter-to-quarter season adjusted base. This is on the back of a 0.8% expansion in the third quarter. On an annual basis, GDP and QDA rose by 3.7% in the fourth quarter of last year, after increasing by 2.3% in the previous quarter, leading to an overall annual growth during 2024 of 2.5%. Final GDP data will be announced by the central bank on March 18th. Moving on to prices, inflation ended the year at 4.5%, up from 4.1% in September. The increase in the last quarter of the year was mainly driven by another adjustment in electricity prices, the third in the year, and its change rate passed new pressures. During the fourth quarter of 2024, the central bank of Chile cut the monetary policy rate twice, by 25 basis points at each meeting, closing the year at 5.0% in nominal terms. In December, the financial industry's loans totaled 242 billion CLT, essentially flat. The banking industry's demand deposits and time deposits rose on an annual basis by 6.7 and 5.3 percent respectively. Moving on to the next slide, please. Okay. Now, moving on to Colombia. Again, first off on activity. GDP growth came broadly in line with expectations in the fourth quarter of 2024. The Colombian economy increased at 2.3% year-on-year in the fourth quarter, slightly above the 2.1% from the previous quarter. And for the full year, activity rose by 1.7%, up from 0.6% in 2023. On inflation, annual headline inflation ended in 2024 at 5.2%, with the deflation process continuing at a gradual pace. The Central Bank of Colombia slowed the pace of cuts in December to 25 basis points, taking the policy rate to 9.5%. This takes place following a string of 50 basis point cuts throughout previous months, and the decision to slow the pace of cuts took place in the context of above-target inflation expectations, greater-than-expected minimum wage hikes, and the currency depreciation that was in line with . Now, moving forward, I'll briefly discuss for macro alpha for 2025 in Chile and in Colombia. In CMEA, the improved mining quotes in 2024 raises the carryover for this year, while the dynamics of imports of capital goods and record tourism levels will support investment and consumption respectively. We see 2025 GDP growth at 2.3%, with risks tilted to the upside. Expectations that are actually reaffirmed following this morning's January ESA. The forecast equation ending the year at 4.1%, down from 4.5% in December 2024, In this context, we believe the central bank will maintain the policy rate at 5% with year-end, which in its fancy terms has the policy rate already in the neutral range. In Colombia, with an above inflation minimum wage adjustment, the deflation path is likely to be somewhat slower this year, and certainly on the fiscal front, along with a central bank board that may eventually lean more bearish, could see the COP under more pressure. Those risks lead us to believe there is less room for rate cuts in Colombia this year, which we forecast with the policy rate ending at 8.0% in nominal terms. In this scenario, GDP growth is expected to increase to 2.3% in 2025, up from 1.7% in 2024. Inflation is expected to gradually fall to 4.5% this year, from 5.2% last year. Now, our CEO, Andrea Gailey, will continue the presentation. Good morning, Andrea.