Loans and Accounts Receivable from Customers | Note 10 - Loans and Accounts Receivable from Customers a) Loans and accounts receivable from customers As of December 31, 2019, the composition of the loan portfolio is as follows: Allowances for loan losses Individual Group As of December 31, 2019 Gross Assets allowances allowances Totals Net assets MCh$ MCh$ MCh$ MCh$ MCh$ Commercial loans: Commercial loans 12,288,810 193,135 224,925 418,060 11,870,750 Foreign trade loans 1,109,169 — 74,488 74,488 1,034,681 Checking account debtors 154,276 — 10,508 10,508 143,768 Factoring transactions 221,104 — 3,694 3,694 217,410 Student loans 654,721 — 19,442 19,442 635,279 Leasing transactions 1,005,209 — 16,302 16,302 988,907 Other commercial loans and receivables 27,255 — 2,705 2,705 24,550 Subtotals 15,460,544 193,135 352,064 545,199 14,915,345 Mortgage loans: Loans with mortgage finance bonds 30,269 — 378 378 29,891 Endorsable mutual mortgage loans 103,850 — 1,408 1,408 102,442 Other mutual mortgage loans 4,384,547 — 63,528 63,528 4,321,019 Mortgage leasing transactions 336,587 — 12,879 12,879 323,708 Other mortgage loans and receivables 20,788 — 308 308 20,480 Subtotals 4,876,041 — 78,501 78,501 4,797,540 Consumer loans: Installment consumer loans 2,005,038 — 193,726 193,726 1,811,312 Checking account debtors 206,738 — 20,106 20,106 186,632 Credit card balances 537,741 — 37,998 37,998 499,743 Consumer leasing transactions 3,113 — 227 227 2,886 Other consumer loans and receivables 45,599 — 4,360 4,360 41,239 Subtotals 2,798,229 — 256,417 256,417 2,541,812 Totals 23,134,814 193,135 686,982 880,117 22,254,697 Note 10 - Loans and Accounts Receivable from Customers, continued As of December 31, 2018, the composition of the loan portfolio is as follows: Allowances for loan losses Individual Group As of December 31, 2018 Gross Assets allowances allowances Totals Net assets MCh$ MCh$ MCh$ MCh$ MCh$ Commercial loans: Commercial loans 11,457,388 133,610 258,177 391,787 11,065,601 Foreign trade loans 928,443 — 7,964 7,964 920,479 Checking account debtors 131,100 — 6,801 6,801 124,299 Factoring transactions 210,567 — 9 9 210,558 Student loans 676,689 — 51,091 51,091 625,598 Leasing transactions 928,160 — 25,113 25,113 903,047 Other commercial loans and receivables 34,553 — 1,942 1,942 32,611 Subtotals 14,366,900 133,610 351,097 484,707 13,882,193 Mortgage loans: Loans with mortgage finance bonds 38,364 — 472 472 37,892 Endorsable mutual mortgage loans 118,668 — 8,016 8,016 110,652 Other mutual mortgage loans 3,953,245 — 52,138 52,138 3,901,107 Mortgage leasing transactions 312,118 — 4,395 4,395 307,723 Other mortgage loans and receivables 23,432 — 1,096 1,096 22,336 Subtotals 4,445,827 — 66,117 66,117 4,379,710 Consumer loans: Installment consumer loans 1,921,785 — 155,472 155,472 1,766,313 Checking account debtors 209,492 — 17,579 17,579 191,913 Credit card balances 481,567 — 38,426 38,426 443,141 Consumer leasing transactions 6,203 — 476 476 5,727 Other consumer loans and receivables 50,716 — 5,343 5,343 45,373 Subtotals 2,669,763 — 217,296 217,296 2,452,467 Totals 21,482,490 133,610 634,510 768,120 20,714,370 Guarantees taken by the Bank to secure collections of rights reflected in its loan portfolios are real mortgage-type guarantees (urban and rural property, farm land, ships and aircraft, mining claims and other assets) and pledges (inventory, farm assets, industrial assets, plantings and other pledged assets). As of December 31, 2019 and 2018, the fair value of guarantees taken corresponds to 135.51% and 136.48% of the assets covered, respectively. In the case of mortgage guarantees, as of December 31, 2019 and 2018, the fair value of the guarantees taken corresponds to 89.87% and 90.10% of the balance receivable on loans, respectively. The Bank finances its customers’ purchases of assets, including real estate and other personal property, through finance lease agreements that are presented within this item. As of December 31, 2019, the Bank recorded MCh$ 628,823 in finance leases for property (MCh$436,654 as of December 31, 2018) and MCh$ 716,401 in finance leases for real estate property (MCh$809,826 as of December 31, 2018). Note 10 - Loans and Accounts Receivable from Customers, continued The following tables present the movements for the total loan portfolio disaggregated by individually and group assesed loans for the year ended December 31, 2019 and 2018: Individually assessed Group assessed Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 12-Month Lifetime Lifetime 12-Month Lifetime Lifetime ECL ECL ECL Subtotals ECL ECL ECL Subtotals Totals Loan portfolio Opening balances as of January 1, 2019 — 367,611 140,943 508,554 17,697,774 2,532,128 744,034 20,973,936 21,482,490 Changes in the allowances — — - Transfer to stage 1 — — — — 392,454 (371,983) (20,471) — — - Transfer to stage 2 — — — — (749,463) 816,577 (67,114) — — - Transfer to stage 3 — (116,202) 116,202 — (113,903) (192,565) 306,468 — — -Charge-off — — (21,841) (21,841) (13,979) (22,862) (114,590) (151,431) (173,272) - Changes due to modifications that did not result in derecognition — — — — — — — — — New financial assets originated or purchased — 55,367 32,129 87,496 6,487,407 583,765 184,664 7,255,836 7,343,332 Financial assets that have been derecognized — (46,681) (11,754) (58,435) (5,024,522) (771,046) (201,451) (5,997,019) (6,055,454) Net transfer from (to) group assessed 20,807 25,659 — 46,466 (20,807) (25,659) — (46,466) — Foreign exchange and other movements — 35,734 12,532 48,266 36,154 315,844 137,454 489,452 537,718 Ending balances as of December 31, 2019 20,807 321,488 268,211 610,506 18,691,115 2,864,199 968,994 22,524,308 23,134,814 Individually assessed Group assessed Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 12-Month Lifetime Lifetime 12-Month Lifetime Lifetime ECL ECL ECL Subtotals ECL ECL ECL Subtotals Totals Loan portfolio Opening balances as of January 1, 2018 39,213 307,702 22,132 369,047 15,227,713 3,540,274 1,245,571 20,013,558 20,382,605 Changes in the allowances — — - Transfer to stage 1 — — — — 465,545 (453,418) (12,127) — — - Transfer to stage 2 (39,213) 39,213 — — (624,014) 684,868 (60,854) — — - Transfer to stage 3 — — — — (63,263) (138,912) 202,175 — — -Charge-off — — — — (13,837) (26,525) (105,451) (145,813) (145,813) - Changes due to modifications that did not result in derecognition — — — — — — — — — New financial assets originated or purchased — 69,356 41,626 110,982 5,530,053 501,380 186,025 6,217,458 6,328,440 Financial assets that have been derecognized — (8,129) — (8,129) (4,221,649) (871,600) (212,737) (5,305,986) (5,314,115) Net transfer from (to) group assessed — — — — — — — — — Foreign exchange and other movements — (40,531) 77,185 36,654 1,397,226 (703,939) (498,568) 194,719 231,373 Ending balances as of December 31, 2018 — 367,611 140,943 508,554 17,697,774 2,532,128 744,034 20,973,936 21,482,490 Note 10 - Loans and Accounts Receivable from Customers, continued The following table presents the movements for the Commercial loans portfolio disaggregated by individually and group assesed loans for the year ended December 31, 2019: Individually assessed Group assessed Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 12-Month Lifetime Lifetime 12-Month Lifetime Lifetime ECL ECL ECL Subtotals ECL ECL ECL Subtotals Totals Opening balances as of January 1, 2019 — 367,611 140,943 508,554 11,935,270 1,428,951 494,125 13,858,346 14,366,900 Changes in the allowances - Transfer to stage 1 — — — — 158,836 (145,228) (13,608) — — - Transfer to stage 2 — — — — (430,358) 454,203 (23,845) — — - Transfer to stage 3 — (116,202) 116,202 — (85,689) (113,481) 199,170 — — -Charge-off — — (21,841) (21,841) (654) (1,314) (74,877) (76,845) (98,686) - Changes due to modifications that did not result in derecognition — — — — — — — — — New financial assets originated or purchased — 55,367 32,129 87,496 4,901,848 341,720 115,347 5,358,915 5,446,411 Financial assets that have been derecognized — (46,681) (11,754) (58,435) (4,049,247) (506,777) (149,445) (4,705,469) (4,763,904) Net transfer from (to) group assessed 20,807 25,659 — 46,466 (20,807) (25,659) — (46,466) — Foreign exchange and other movements — 35,733 12,533 48,266 36,212 293,402 131,943 461,557 509,823 Ending balances as of December 31, 2019 20,807 321,487 268,212 610,506 12,445,411 1,725,817 678,810 14,850,038 15,460,544 The following table presents the movements for the Commercial loans portfolio disaggregated by individually and group assesed loans for the year ended December 31, 2018: Individually assessed Group assessed Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 12-Month Lifetime Lifetime 12-Month Lifetime Lifetime ECL ECL ECL Subtotals ECL ECL ECL Subtotals Totals Opening balances as of January 1, 2018 39,213 307,702 22,132 369,047 10,143,732 2,252,265 951,502 13,347,499 13,716,546 Changes in the allowances - Transfer to stage 1 — — — — 252,306 (245,768) (6,538) — — - Transfer to stage 2 (39,213) 39,213 — — (297,179) 319,361 (22,182) — — - Transfer to stage 3 — — — — (38,989) (70,966) 109,955 — — -Charge-off — — — — (248) (2,739) (68,752) (71,739) (71,739) - Changes due to modifications that did not result in derecognition — — — — — — — — — New financial assets originated or purchased — 69,356 41,626 110,982 4,181,172 271,747 131,865 4,584,784 4,695,766 Financial assets that have been derecognized — (8,129) — (8,129) (3,359,810) (638,568) (172,661) (4,171,039) (4,179,168) Net transfer from (to) group assessed — — — — — — Foreign exchange and other movements — (40,531) 77,185 36,654 1,054,286 (456,381) (429,064) 168,841 205,495 Ending balances as of December 31, 2018 — 367,611 140,943 508,554 11,935,270 1,428,951 494,125 13,858,346 14,366,900 Note 10 - Loans and Accounts Receivable from Customers, continued The following table presents the movements of the Mortgage loans portfolio for the year ended December 31, 2019: Group assessed Stage 1 Stage 2 Stage 3 12-Month Lifetime Lifetime ECL ECL ECL Totals Opening balances as of January 1, 2019 3,626,811 659,119 159,897 4,445,827 Changes in the allowances - Transfer to stage 1 112,611 (112,195) (416) — - Transfer to stage 2 (174,723) 210,287 (35,564) — - Transfer to stage 3 (12,815) (64,770) 77,585 — -Charge-off (36) (115) (12,230) (12,381) - Changes due to modifications that did not result in derecognition — — — — New financial assets originated or purchased 763,342 17,230 2,298 782,870 Financial assets that have been derecognized (330,014) (62,240) (20,063) (412,317) Foreign exchange and other movements 58,589 8,694 4,759 72,042 Ending balances as of December 31, 2019 4,043,765 656,010 176,266 4,876,041 The following table presents the movements of the Mortgage loans portfolio for the year ended December 31, 2018: Group assessed Stage 1 Stage 2 Stage 3 12-Month Lifetime Lifetime ECL ECL ECL Totals Opening balances as of January 1, 2018 3,273,643 702,101 177,009 4,152,753 Changes in the allowances - Transfer to stage 1 104,374 (103,260) (1,114) — - Transfer to stage 2 (189,936) 223,677 (33,741) — - Transfer to stage 3 (12,797) (57,063) 69,860 — -Charge-off — (3) (8,697) (8,700) - Changes due to modifications that did not result in derecognition — — — — New financial assets originated or purchased 589,959 17,008 2,417 609,384 Financial assets that have been derecognized (302,784) (62,366) (18,533) (383,683) Foreign exchange and other movements 164,352 (60,975) (27,304) 76,073 Ending balances as of December 31, 2018 3,626,811 659,119 159,897 4,445,827 Note 10 - Loans and Accounts Receivable from Customers, continued The following table presents the movements of the Consumer loans portfolio for the year ended December 31, 2019: Group assessed Stage 1 Stage 2 Stage 3 12-Month Lifetime Lifetime ECL ECL ECL Totals Opening balances as of January 1, 2019 2,135,693 444,058 90,012 2,669,763 Changes in the allowances - Transfer to stage 1 121,007 (114,560) (6,447) — - Transfer to stage 2 (144,382) 152,087 (7,705) — - Transfer to stage 3 (15,399) (14,314) 29,713 — -Charge-off (13,289) (21,433) (27,483) (62,205) - Changes due to modifications that did not result in derecognition — — — — New financial assets originated or purchased 822,217 224,815 67,019 1,114,051 Financial assets that have been derecognized (645,261) (202,029) (31,943) (879,233) Foreign exchange and other movements (58,647) 13,748 752 (44,147) Ending balances as of December 31, 2019 2,201,939 482,372 113,918 2,798,229 The following table presents the movements of the Consumer loans portfolio for the year ended December 31, 2018: Group assessed Stage 1 Stage 2 Stage 3 12-Month Lifetime Lifetime ECL ECL ECL Totals Opening balances as of January 1, 2018 1,810,338 585,908 117,060 2,513,306 Changes in the allowances - Transfer to stage 1 108,865 (104,390) (4,475) — - Transfer to stage 2 (136,899) 141,830 (4,931) — - Transfer to stage 3 (11,477) (10,883) 22,360 — -Charge-off (13,589) (23,783) (28,002) (65,374) - Changes due to modifications that did not result in derecognition — — — — New financial assets originated or purchased 758,922 212,625 51,743 1,023,290 Financial assets that have been derecognized (559,055) (170,666) (21,543) (751,264) Foreign exchange and other movements 178,588 (186,583) (42,200) (50,195) Ending balances as of December 31, 2018 2,135,693 444,058 90,012 2,669,763 Note 10 - Loans and Accounts Receivable from Customers, continued b) Portfolio characteristics As of December 31, 2019 and 2018, the loan portfolio before allowances for loan losses by customer economic activity was as follows: As of December 31, 2019 Local loans Foreign loans Totals Distribution percentage MCh$ MCh$ MCh$ % Commercial loans Manufacturing 988,739 111,000 1,099,739 Mining 292,263 259,352 551,615 Electricity, gas and water 685,749 439,792 1,125,541 Agriculture and livestock 309,648 174,295 483,943 Forestry and wood extraction 48,192 5,136 53,328 Fishing 42,397 4,505 46,902 Transport 478,737 80,534 559,271 Communications 25,209 9,717 34,926 Construction 1,757,874 348,955 2,106,829 Commerce 1,439,969 689,210 2,129,179 Services 2,864,307 1,080,264 3,944,571 Others 2,275,275 1,049,425 3,324,700 Subtotals 11,208,359 4,252,185 15,460,544 Mortgage loans 4,211,094 664,947 4,876,041 Consumer loans 1,923,745 874,484 2,798,229 Total 17,343,198 5,791,616 23,134,814 As of December 31, 2018 Local loans Foreign loans Totals Distribution percentage MCh$ MCh$ MCh$ % Commercial loans Manufacturing 982,497 114,714 1,097,211 5.11 % Mining 424,883 252,894 677,777 3.16 % Electricity, gas and water 600,667 356,706 957,373 4.46 % Agriculture and livestock 207,271 139,098 346,369 1.61 % Forestry and wood extraction 24,511 5,172 29,683 0.14 % Fishing 1,945 1,530 3,475 0.02 % Transport 509,354 191,047 700,401 3.26 % Communications 23,886 62,191 86,077 0.40 % Construction 1,436,096 310,530 1,746,626 8.13 % Commerce 861,291 758,817 1,620,108 7.54 % Services 2,735,023 1,137,037 3,872,060 18.02 % Others 2,436,337 793,403 3,229,740 15.03 % Subtotals 10,243,761 4,123,139 14,366,900 66.88 % Mortgage loans 3,852,962 592,865 4,445,827 20.70 % Consumer loans 1,750,986 918,777 2,669,763 12.43 % Total 15,847,709 5,634,781 21,482,490 100 % Note 10 - Loans and Accounts Receivable from Customers, continued c) Allowances for loans losses Movements in allowances for loan losses during the year ended December 31, 2019 and 2018, under IFRS 9, detailed as follows: Individually assessed Group assessed Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 12-Month Lifetime Lifetime 12-Month Lifetime Lifetime ECL ECL ECL Subtotals ECL ECL ECL Subtotals Totals Opening balances as of January 1, 2019 — 46,153 87,457 133,610 138,492 232,447 263,571 634,510 768,120 Changes in the allowances -Net transfer to stage 1 — — — — 29,418 (23,245) (6,173) — — -Net transfer to stage 2 — — — — (14,077) 28,023 (13,946) — — -Net transfer to stage 3 — (22,642) 22,642 — (5,171) (29,876) 35,047 — — - Increases due to change in credit risk — 1,216 62,685 63,901 19,691 80,613 105,143 205,447 269,348 - Decreases due to change in credit risk — (7,758) (1,096) (8,854) (51,409) (39,540) (11,452) (102,401) (111,255) - Charge-Offs — — (13,891) (13,891) (983) (7,631) (144,859) (153,473) (167,364) - Changes due to modifications that did not result in derecognition — — — — — — — — — New financial assets originated or purchased — 12,496 7,376 19,872 73,009 91,324 98,595 262,928 282,800 Financial assets that have been derecognized — (1,824) (3,152) (4,976) (49,158) (62,668) (82,517) (194,343) (199,319) Net transfer from (to) group assessed — 933 — 933 — (933) — (933) — Foreign exchange and other movements — 13,426 (10,886) 2,540 5,603 (8,217) 37,861 35,247 37,787 Ending balances as of December 31, 2019 — 42,000 151,135 193,135 145,415 260,297 281,270 686,982 880,117 Note 10 - Loans and Accounts Receivable from Customers, continued Individually assessed Group assessed Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 12-Month Lifetime Lifetime 12-Month Lifetime Lifetime ECL ECL ECL Subtotals ECL ECL ECL Subtotals Totals Opening balances as of January 1, 2018 — 49,389 32,736 82,125 126,230 248,129 284,089 658,448 740,573 Changes in the allowances -Net transfer to stage 1 — — — — — 36,325 41,471 77,796 77,796 -Net transfer to stage 2 — — — — (5,233) — 49,097 43,864 43,864 -Net transfer to stage 3 — — — — (4,354) (22,811) — (27,165) (27,165) - Increases due to change in credit risk — 3,732 16,587 20,319 18,307 18,459 28,670 65,436 85,755 - Decreases due to change in credit risk — (532) (1,706) (2,238) (23,460) (27,162) (9,105) (59,727) (61,965) - Charge-Offs — — — — (21,316) (18,559) (95,091) (134,966) (134,966) - Changes due to modifications that did not result in derecognition — — — — — — — — — New financial assets originated or purchased — 6,428 17,037 23,465 66,074 54,568 77,069 197,711 221,176 Financial assets that have been derecognized — (20,636) (15,355) (35,991) (19,950) (58,405) (78,728) (157,083) (193,074) Net transfer from (to) group assessed — 7,772 38,158 45,930 138 (1,761) (38,158) (39,781) 6,149 Foreign exchange and other movements — — — — 2,056 3,664 4,257 9,977 9,977 Ending balances as of December 31, 2018 — 46,153 87,457 133,610 138,492 232,447 263,571 634,510 768,120 The detail by type of portfolio (commercial, mortgage and consumer) is as follow: Individually assessed Group assessed Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 12-Month Lifetime Lifetime 12-Month Lifetime Lifetime Commercial ECL ECL ECL Subtotals ECL ECL ECL Subtotals Totals Opening balances as of January 1, 2019 — 46,153 87,457 133,610 61,971 109,805 179,321 351,097 484,707 Changes in the allowances -Net transfer to stage 1 — — — — 9,243 (7,555) (1,688) — — -Net transfer to stage 2 — — — — (6,626) 10,260 (3,634) — — -Net transfer to stage 3 — (22,642) 22,642 — (1,927) (11,340) 13,267 — — - Increases due to change in credit risk — 1,216 62,685 63,901 13,071 32,280 46,212 91,563 155,464 - Decreases due to change in credit risk — (7,758) (1,096) (8,854) (18,572) (19,449) (8,373) (46,394) (55,248) - Charge-Offs — — (13,891) (13,891) (28) (179) (68,119) (68,326) (82,217) - Changes due to modifications that did not result in derecognition — — — — — — — — — New financial assets originated or purchased — 12,496 7,376 19,872 36,672 35,008 45,007 116,687 136,559 Financial assets that have been derecognized — (1,824) (3,152) (4,976) (23,152) (28,514) (58,013) (109,679) (114,655) Net transfer from (to) group assessed — 933 — 933 — (933) — (933) — Foreign exchange and other movements — 13,426 (10,886) 2,540 2,384 (9,712) 25,377 18,049 20,589 Ending balances as of December 31, 2019 — 42,000 151,135 193,135 73,036 109,671 169,357 352,064 545,199 Note 10 - Loans and Accounts Receivable from Customers, continued Individually assessed Group assessed Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 12-Month Lifetime Lifetime 12-Month Lifetime Lifetime Commercial ECL ECL ECL Subtotals ECL ECL ECL Subtotals Totals Opening balances as of January 1, 2018 — 49,389 32,736 82,125 63,093 131,854 211,463 406,410 488,535 Changes in the allowances -Net transfer to stage 1 — — — — — 14,148 24,174 38,322 38,322 -Net transfer to stage 2 — — — — (1,047) — 39,461 38,414 38,414 -Net transfer to stage 3 — — — — (3,426) (18,176) — (21,602) (24,602) - Increases due to change in credit risk — 3,732 16,587 20,319 8,594 6,716 12,823 28,133 48,452 - Decreases due to change in credit risk — (532) (1,706) (2,238) (12,651) (10,713) (8,321) (31,685) (33,923) - Charge-Offs — — — — (10,983) (7,447) (57,566) (75,996) (75,996) - Changes due to modifications that did not result in derecognition — — — — — — — — — New financial assets originated or purchased — 6,428 17,037 23,465 27,419 16,594 42,544 86,557 110,022 Financial assets that have been derecognized — (20,636) (15,355) (35,991) (10,395) (23,782) (50,516) (84,693) (120,684) Net transfer from (to) group assessed — 7,772 38,158 45,930 138 (1,761) (38,158) (39,781) 6,149 Foreign exchange and other movements — — — — 1,229 2,372 3,417 7,018 7,018 Ending balances as of December 31, 2018 — 46,153 87,457 133,610 61,971 109,805 179,321 351,097 484,707 Note 10 - Loans and Accounts Receivable from Customers, continued Group assessed Stage 1 Stage 2 Stage 3 Mortgage 12-Month ECL Lifetime ECL Lifetime ECL Subtotals Totals Opening balances as of January 1, 2019 5,756 37,800 22,561 66,117 66,117 Changes in the allowances - Transfer to stage 1 3,316 (2,901) (415) — — - Transfer to stage 2 (484) 5,430 (4,946) — — - Transfer to stage 3 (244) (7,413) 7,657 — — - Increases due to change in credit risk 530 25,837 5,502 31,869 31,869 - Decreases due to change in credit risk (4,200) (8,916) (2,564) (15,680) (15,680) - Write-Offs — (16) (2,624) (2,640) (2,640) - Changes due to modifications that did not result in derecognition — — — — — New financial assets originated or purchased 1,347 1,622 512 3,481 3,481 Financial assets that have been derecognized (605) (2,553) (2,343) (5,501) (5,501) Changes in models/risk parameters — — — — — Foreign exchange and other movements 264 182 409 855 855 Ending balances as of December 31, 2019 5,680 49,072 23,749 78,501 78,501 Group assessed Stage 1 Stage 2 Stage 3 Mortgage 12-Month ECL Lifetime ECL Lifetime ECL Subtotals Totals Opening balances as of January 1, 2018 3,962 37,460 19,049 60,471 60,471 Changes in the allowances - Transfer to stage 1 — 5,344 2,644 7,988 7,988 - Transfer to stage 2 (206) — 4,253 4,047 4,047 - Transfer to stage 3 (73) (2,918) — (2,991) (2,991) - Increases due to change in credit risk 1,203 5,921 1,619 8,743 8,743 - Decreases due to change in credit risk (394) (7,002) (321) (7,717) (7,717) - Write-Offs — (13) (2,491) (2,504) (2,504) - Changes due to modifications that did not result in derecognition — — — — — New financial assets originated or purchased 1,639 1,577 405 3,621 3,621 Financial assets that have been derecognized (399) (2,792) (271) (5,901) (5,901) Changes in models/risk parameters — — — — — Foreign exchange and other movements 24 223 113 360 360 Ending balances as of December 31, 2018 5,756 37,800 22,561 66,117 66,117 Note 10 - Loans and Accounts Receivable from Customers, continued Group assessed Stage 1 Stage 2 Stage 3 Consumer 12-Month ECL Lifetime ECL Lifetime ECL Subtotals Totals Opening balances as of January 1, 2019 70,765 84,842 61,689 217,296 217,296 Changes in the allowances - Transfer to stage 1 16,859 (12,789) (4,070) — — - Transfer to stage 2 (6,968) 12,334 (5,366) — — - Transfer to stage 3 (3,000) (11,123) 14,123 — — - Increases due to change in credit risk 6,090 34,493 53,429 94,012 94,012 - Decreases due to change in credit risk (28,637) (11,175) (515) (40,327) (40,327) - Write-Offs (955) (7,436) (74,116) (82,507) (82,507) - Changes due to modifications that did not result in derecognition — — — — — New financial assets originated or purchased 34,990 54,694 53,076 142,760 142,760 Financial assets that have been derecognized (25,401) (31,601) (22,161) (79,163) (79,163) Changes in models/risk parameters — — — — — Foreign exchange and other movements 2,949 1,268 129 4,346 4,346 Ending balances as of December 31, 2019 66,692 113,507 76,218 256,417 256,417 Group assessed Stage 1 Stage 2 Stage 3 Consumer 12-Month ECL Lifetime ECL Lifetime ECL Subtotals Totals Opening balances as of January 1, 2018 59,175 78,815 53,577 191,567 191,567 Changes in the allowances - Transfer to stage 1 — 16,833 14,653 31,486 31,486 - Transfer to stage 2 (3,980) — 5,383 1,403 1,403 - Transfer to stage 3 (855) (1,717) — (2,572) (2,572) - Increases due to change in credit risk 8,510 5,822 14,228 28,560 28,560 - Decreases due to change in credit risk (10,415) (9,447) (463) (20,325) (20,325) - Write-Offs (10,333) (11,099) (35,034) (56,466) (56,466) - Changes due to modifications that did not result in derecognition — — — — — New financial assets originated or purchased 37,016 36,397 34,120 107,533 107,533 Financial assets that have been derecognized (9,156) (31,831) (25,502) (66,489) (66,489) Changes in models/risk parameters — — — — Foreign exchange and other movements 803 1,069 727 2,599 2,599 Ending balances as of December 31, 2018 70,765 84,842 61,689 217,296 217,296 Note 10 - Loans and Accounts Receivable from Customers, continued d) Portfolio sales As of December 31, 2019 and 2018, the Bank and its subsidiaries engaged in portfolio purchases and sales. The effect on result of these transactions amounts to MCh$14,588 as of December 31, 2019 (MCh$1,602 as of December 31, 2018), is recorded within net gains from trading and investment income activities in the consolidated statement of income for the year, disclosed in Note 25 “Net income (expense) from financial operations” within “Sale of loans and accounts receivable from customers”. d.1) Current and charged-off portfolios sales As of December 31, 2019 and 2018, the Bank and its subsidiaries derecognized 100% of its sold portfolio, thus complying with the requirements of the accounting policy for derecognizing financial assets and liabilities in Note 1, letter l), point iv) of the annual Consolidated Financial Statements. The main sales during 2019 and 2018 were of loans related to Law 20,027, which are detailed in point d.2). For the year ended December 31, 2019 For the year ended December 31, 2018 Adjustment Net effect on Adjustment Net effect on Portfolio Loan Value Allowances Sale price to EIR income Loan Value Allowances Sale price to EIR income MCh$ MCh$ MCh$ MCh$ MCh$ MCh$ MCh$ MCh$ MCh$ MCh$ Currents 14,231 (14,113) 4,130 (207) 3,805 62,261 24,797 24,662 — (12,802) Charged-offs — — 2,199 — 2,199 — — 1,132 — 1,132 Totales 14,231 (14,113) 6,329 (207) 6,004 62,261 24,797 25,794 — (11,670) d.2) CAE portfolio sale For the year ended December 31, 2019, a gain was recognized amounting to MCh$8,584 (MCh$13,272 for the year ended December 31, 2018) corresponding to the income generated in the sale included directly in the Consolidated Statement of Income under “Net income from financial operations”. An adjustment to the effective interest rate for MCh$9,079 as of December 31, 2019 (MCh$11,768 as of December 31, 2018) is allocated to the portion of the CAE portfolio that was classified as loans at amortized cost, recognizing an effective interest rate equivalent for all these operations, according to IFRS 9. Al 31 de diciembre de 2019 Al 31 de diciembre de 2018 Adjustment Net effect on Adjustment Net effect on Portfolio Loan Value Allowances Sale price to EIR income Loan Value Allowances Sale price to EIR income MCh$ MCh$ MCh$ MCh$ MCh$ MCh$ MCh$ MCh$ MCh$ MCh$ CAE 103,201 (849) 120,015 9,079 8,584 95,521 (119) 120,442 11,768 13,272 Note 10 - Loans and Accounts Receivable from Customers, continued e) Lease As of December 31, 2019 and 2018, the Bank’s scheduled cash flows to be received from finance lease contracts have the following maturities: Total receivable Unearned income Net lease receivable As of December 31, As of December 31, As of December 31, 2019 2018 2019 2018 2019 2018 MCh$ MCh$ MCh$ MCh$ MCh$ MCh$ Up to one month 13,793 29,177 7 1,310 13,786 27,867 More than 1 month to 3 months 4,033 31,278 54 2,636 3,979 28,642 More than 3 months up to 1 year 39,184 116,526 1,839 10,621 37,345 105,905 More than 1 year up to 3 years 263,280 257,976 23,286 31,491 239,994 226,485 More than 3 years up to 6 years 413,066 28,492 71,543 54,922 341,523 229,998 More than 6 years 1,172,198 1,077,447 463,916 449,864 708,282 627,584 Totals 1,905,554 1,797,324 560,645 550,844 1,344,909 1,246,481 As of December 31, Leasing transactions 2019 2018 MCh$ MCh$ Commercial 1,005,209 928,160 Mortgage 336,587 312,118 Consumer 3,113 6,203 Totals 1,344,909 1,246,481 |