Exhibit 99.2
Itaú Corpbanca and subsidiaries
Interim Report - Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 2020 and for the six-month
periods ended June 30, 2021 and 2020
Content
| |
| |
| |
F-2 | |
| |
F-3 | |
| |
Condensed Consolidated Statements of Other Comprehensive Income (Loss) | F-4 |
| |
F-5 | |
| |
F-6 | |
| |
F-9 |
$ | = | Amounts expressed in Chilean pesos. |
MCh$ | = | Amounts expressed in millions of Chilean pesos. |
US$ | = | Amounts expressed in US dollars. |
ThUS$ | = | Amounts expressed in thousands of US dollars. |
MUS$ | = | Amounts expressed in millions of US dollars. |
COP$ | = | Amounts expressed in Colombian pesos. |
MCOP$ | = | Amounts expressed in millions of Colombian pesos. |
UF | = | Amounts expressed in Unidades de Fomento |
| | (a Chilean inflation-indexed, peso-denominated monetary unit that is set daily based on changes in the Chilean Consumer Price Index). |
ITAÚ CORPBANCA AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Financial Position
(In millions of Chilean pesos - MCh$)
| | | | | | |
| | | | As of June 30, | | As of December 31, |
|
| Notes |
| 2021 |
| 2020 |
| | | | MCh$ | | MCh$ |
ASSETS | |
| |
| |
|
Cash and deposits in banks |
| |
| 2,875,942 |
| 3,089,072 |
Cash items in process of collection |
| |
| 442,662 |
| 173,192 |
Financial instruments at fair value through profit or loss |
| |
| 301,239 |
| 582,710 |
Financial instruments at fair value through other comprehensive income |
| 6 |
| 3,914,198 |
| 3,970,899 |
Interbank loans at amortized cost |
| |
| 57,499 |
| 7,121 |
Loans and accounts receivable from customers at amortized cost |
| 5 |
| 22,017,132 |
| 21,576,108 |
Financial instruments at amortized cost |
| 6 |
| 173,227 |
| 111,542 |
Investments under resale agreements |
| |
| 122,998 |
| 105,580 |
Financial derivative contracts |
| 4 |
| 2,588,103 |
| 3,982,803 |
Investments in associates |
| 7 |
| 8,218 |
| 7,149 |
Intangible assets |
| |
| 702,939 |
| 718,683 |
Property, plant, and equipment |
| |
| 72,831 |
| 80,615 |
Right of use assets under lease agreements |
| |
| 128,765 |
| 146,008 |
Current taxes |
| |
| 100,123 |
| 64,699 |
Deferred taxes |
| |
| 273,589 |
| 312,556 |
Other assets |
| |
| 498,099 |
| 542,633 |
Other non-current assets held for sale |
| |
| 15,143 |
| 15,078 |
TOTAL ASSETS |
| |
| 34,292,707 |
| 35,486,448 |
LIABILITIES |
| |
| |
|
|
Deposits and other demand liabilities |
| |
| 6,550,657 |
| 6,197,406 |
Cash in process of being cleared |
| |
| 420,259 |
| 154,232 |
Obligations under repurchase agreements |
| |
| 483,241 |
| 638,851 |
Time deposits and other time liabilities |
| |
| 10,269,825 |
| 11,433,064 |
Financial derivative contracts |
| 4 |
| 2,377,921 |
| 3,673,591 |
Interbank borrowings |
| |
| 4,453,688 |
| 3,798,978 |
Debt instruments issued |
| |
| 6,335,525 |
| 6,204,856 |
Other financial liabilities |
| |
| 29,163 |
| 13,123 |
Lease contracts liabilities |
| |
| 133,594 |
| 151,885 |
Current taxes |
| |
| 344 |
| 1,766 |
Deferred taxes |
| |
| 102 |
| 237 |
Provisions |
| |
| 175,779 |
| 135,090 |
Other liabilities |
| |
| 684,594 |
| 700,034 |
Liabilities directly associated with non-current assets held for sale |
| |
| — |
| — |
TOTAL LIABILITIES |
| |
| 31,914,692 |
| 33,103,113 |
EQUITY |
| |
| |
|
|
Attributable to equity holders of the Bank: |
| |
| |
|
|
Capital |
| 10 |
| 1,862,826 |
| 1,862,826 |
Reserves |
| 10 |
| 468,759 |
| 1,195,849 |
Valuation accounts |
| 10 |
| (140,997) |
| 26,824 |
Retained earnings (losses): |
| |
| 118,966 |
| (771,251) |
Retained earnings from prior years |
| 10 |
| — |
| 37,533 |
Net income for the period/(loss) for the year |
| 10 |
| 166,334 |
| (808,784) |
Less: Provision for mandatory dividends |
| |
| (47,368) |
| — |
Total equity attributable to equity holders of the Bank |
| |
| 2,309,554 |
| 2,314,248 |
Non-controlling interest |
| 10 |
| 68,461 |
| 69,087 |
TOTAL EQUITY |
| |
| 2,378,015 |
| 2,383,335 |
TOTAL LIABILITIES AND EQUITY |
|
|
| 34,292,707 |
| 35,486,448 |
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-2 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Income (Loss)
(In millions of Chilean pesos - MCh$)
| | | | | | |
| | | | For the six-month periods ended on June 30, | ||
|
| Notes |
| 2021 |
| 2020 |
| | | | MCh$ | | MCh$ |
Interest income | | 11 | | 749,685 | | 855,330 |
Interest expense |
| 11 |
| (272,589) |
| (401,810) |
Net interest income |
| |
| 477,096 |
| 453,520 |
Fee and commission income |
| 12 |
| 103,453 |
| 104,298 |
Fee and commission expense |
| 12 |
| (30,949) |
| (30,716) |
Net fee and commission income |
| |
| 72,504 |
| 73,582 |
Net income from financial operations |
| 13 |
| 34,820 |
| 204,173 |
Net foreign exchange gain (loss) |
| |
| 36,385 |
| (87,596) |
Other operating income |
| |
| 19,151 |
| 26,892 |
Net operating profit before provision for loan losses |
| |
| 639,956 |
| 670,571 |
Provision for loan losses |
| 14 |
| (88,583) |
| (293,999) |
NET OPERATING PROFIT |
| |
| 551,373 |
| 376,572 |
Personnel salaries and expenses |
| |
| (143,384) |
| (150,737) |
Administrative expenses |
| |
| (123,132) |
| (122,397) |
Depreciation and amortization |
| 15 |
| (49,202) |
| (63,569) |
Impairment |
| 15 |
| (1) |
| (765,746) |
Other operating expenses |
| |
| (23,066) |
| (12,703) |
Total operating expenses |
| |
| (338,785) |
| (1,115,152) |
TOTAL OPERATING INCOME (LOSS) |
| |
| 212,588 |
| (738,580) |
Income (loss) from investments in associates |
| 7 |
| (1,122) |
| 370 |
Operating (loss) income before income taxes |
| |
| 211,466 |
| (738,210) |
Income taxes |
| 8 |
| (43,287) |
| 6,007 |
Consolidated income (loss) from continuing operations |
| |
| 168,179 |
| (732,203) |
Income (loss) from discontinued operations |
| |
| |
| |
TOTAL CONSOLIDATED INCOME (LOSS) FOR THE PERIOD |
| |
| 168,179 |
| (732,203) |
Attributable to: |
| |
| |
| |
Equity holders of the Bank |
| |
| 166,334 |
| (719,020) |
Non-controlling interest |
| |
| 1,845 |
| (13,183) |
Earnings (losses) per share attributable to equity holders of the Bank |
|
|
| |
| |
(in Chilean pesos) | | | | | | |
Basic earnings (loss) per share |
| 10 |
| 0.325 |
| (1.403) |
Diluted earnings (loss) per share |
| 10 |
| 0.325 |
| (1.403) |
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-3 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Other Comprehensive Income (Loss)
(In millions of Chilean pesos - MCh$)
| | | | | | |
| | | | For the six-month periods ended on June 30, | ||
|
| Notes |
| 2021 |
| 2020 |
| | |
| MCh$ |
| MCh$ |
CONSOLIDATED INCOME (LOSS) FOR THE PERIOD |
| 10 | | 168,179 |
| (732,203) |
OTHER COMPREHENSIVE INCOME (LOSS) WHICH MAY BE |
|
| | |
| |
RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS: |
|
| | |
| |
Debt instruments at fair value through other comprehensive income |
| 10 | | (118,979) |
| (2,033) |
Exchange differences on investment in Colombia and New York branch |
| 10 | | (26,686) |
| (11,501) |
Gain (loss) from hedge of net investments in foreign operations |
| 10 | | (4,567) |
| 23,179 |
Gain (loss) from cash flows hedges |
| 10 | | 11,619 |
| (11,301) |
Other comprehensive income (loss) before income taxes |
| | | (138,613) |
| (1,656) |
Income taxes related to debt instruments at FV through OCI |
| | | 9,308 |
| (681) |
Income taxes related to hedge of net investment in foreign operations |
| 10 | | 2,974 |
| (6,258) |
Income taxes related to cash flows hedges |
| 10 | | (1,041) |
| (1,391) |
Income taxes on other comprehensive income (loss) |
| | | 11,241 |
| (8,330) |
Other comprehensive income (loss) which may be reclassified |
| | | (127,372) |
| (9,986) |
subsequently to profit or loss, net of income taxes |
|
| | |
| |
OTHER COMPREHENSIVE INCOME (LOSS) WHICH MAY NOT BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS: |
|
| | |
| |
Defined benefits obligations |
| 10 | | 1,889 |
| 1,607 |
Income taxes related to defined benefits obligations |
| 10 | | (566) |
| (492) |
Changes in the fair value of equity investments at fair value through other comprehensive income | | 10 | | (82) | | (471) |
Other comprehensive loss which may not be reclassified subsequently to profit or loss, net of income taxes |
| | | 1,241 |
| 644 |
| | | | | | |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD |
| | | (126,131) |
| (9,342) |
CONSOLIDATED COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD |
| | | 42,048 |
| (741,545) |
Attributable to: |
|
| | |
| |
Equity holders of the Bank |
| 10 | | 42,674 |
| (724,921) |
Non-controlling interest |
| 10 | | (626) |
| (16,624) |
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-4 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Changes in Equity
(In millions of Chilean pesos - MCh$)
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Retained earnings |
| Total | | | | | ||||
| | | | | | Reserves | | |
| Retained | | |
| Provision |
| attributable |
| | | | ||
|
| |
| |
| Reserves |
| Other non- |
| |
| earnings |
| |
| for |
| to equity |
| Non- |
| |
|
| Number of | | |
| from |
| earnings |
| Valuation |
| from prior |
| Income (loss) |
| mandatory |
| holders of |
| controlling | | |
| | shares | | Capital |
| earnings |
| reserves | | accounts |
| years | | for the period |
| dividends |
| the Bank | | interest | | Total equity |
|
| Millions |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
Equity as of December 31, 2019 |
| 512,407 |
| 1,862,826 |
| 451,011 |
| 744,838 |
| 47,117 |
| 50,537 |
| 113,684 |
| (38,120) | | 3,231,893 | | 94,445 | | 3,326,338 |
Reclassification of income from previous year |
| — |
| — |
| — |
| — |
| — |
| 113,684 |
| (113,684) |
| — |
| — |
| — |
| — |
Equity as of January 1, 2020 |
| 512,407 |
| 1,862,826 |
| 451,011 |
| 744,838 |
| 47,117 |
| 164,221 |
| — |
| (38,120) |
| 3,231,893 |
| 94,445 |
| 3,326,338 |
Distribution of prior year's net income |
| — |
| — |
| — |
| — |
| — | | (127,065) | | — |
| — |
| (127,065) |
| — |
| (127,065) |
Provision for mandatory dividends | | — | | — | | — | | — | | — | | — | | — | | 38,120 | | 38,120 | | — | | 38,120 |
Comprehensive loss for the period | | — | | — | | — | | — | | (5,901) | | — | | (719,020) | | — | | (724,921) | | (16,624) | | (741,545) |
Equity as of Juner 30, 2020 |
| 512,407 |
| 1,862,826 |
| 451,011 |
| 744,838 |
| 41,216 |
| 37,156 |
| (719,020) |
| — |
| 2,418,027 |
| 77,821 |
| 2,495,848 |
| | | | | | | | | | | | | | | | | | | | | | |
Equity as of December 31, 2020 |
| 512,407 |
| 1,862,826 |
| 451,011 |
| 744,838 |
| 26,824 |
| 37,533 |
| (808,784) |
| — | | 2,314,248 | | 69,087 | | 2,383,335 |
Reclassification of income from previous year |
| — |
| — |
| (451,011) |
| (320,240) |
| — |
| (37,533) |
| 808,784 |
| — |
| — |
| — |
| — |
Equity as of January 1, 2021 |
| 512,407 |
| 1,862,826 |
| — |
| 424,598 |
| 26,824 |
| — |
| — |
| — |
| 2,314,248 |
| 69,087 |
| 2,383,335 |
Distribution of prior year's net income | | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
Provision for mandatory dividends | | — |
| — |
| — |
| — |
| — |
| — |
| — |
| (47,368) |
| (47,368) |
| — |
| (47,368) |
Reclassifications due to the discontinuation of the net investment in Itaú Corpbanca Colombia hedge | | — |
| — |
| — |
| 44,161 |
| (44,161) |
| — |
| — |
| — |
| — |
| — |
| — |
Comprehensive income (loss) for the period | | — |
| — |
| — |
| — | | (123,660) | | — | | 166,334 | | — | | 42,674 | | (626) | | 42,048 |
Equity as of June 30, 2021 |
| 512,407 |
| 1,862,826 |
| — |
| 468,759 |
| (140,997) |
| — |
| 166,334 |
| (47,368) |
| 2,309,554 |
| 68,461 |
| 2,378,015 |
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-5 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(In millions of Chilean pesos - MCh$)
| | | | | | |
| | | | For the six-month periods ended on June 30, | ||
| | Notes | | 2021 | | 2020 |
|
| |
| MCh$ |
| MCh$ |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | |
| |
Operating income (loss) before income taxes | | | | 211,466 | | (738,210) |
Debits (credits) to income that do not represent cash flows |
| | | | | |
Depreciation and amortization | | 15 | | 49,202 |
| 63,569 |
Provisions for loans and accounts receivable from customers and interbank loans |
| 14 | | 117,288 |
| 320,779 |
Provisions and write-offs for assets received in lieu of payment |
| |
| 3,710 |
| 3,036 |
Provisions for contingencies |
| |
| (2,671) |
| 158 |
Impairment |
| 15 |
| 1 |
| 765,746 |
Net gain on sale of loans and accounts receivable from customers |
| |
| (5,172) |
| 458 |
Income received from Financial instruments at fair value through profit or loss |
| |
| — |
| — |
Income received from sale of Financial instruments at fair value through other comprehensive income |
| |
| (757) |
| (51,517) |
Net interest income |
| 11 |
| (477,096) |
| (453,520) |
Fee and commission income |
| 12 |
| (103,453) |
| (104,298) |
Fee and commission expense |
| 12 |
| 30,949 |
| 30,716 |
Net foreign exchange gain (loss) |
| |
| (36,385) |
| 87,596 |
Net gain on sale of property, plant and equipment |
| |
| (74) |
| 101 |
Net gain on sale of assets received in lieu of payment | | | | (1,862) | | (942) |
Net gain on sale of assets held for sale | | | | — | | (970) |
Increase on deferred tax assets and liabilities | | | | (51,124) | | (60,229) |
Other charges (credits) that do not represent cash flows | | | | (17,144) | | (114,787) |
Subtotal |
| |
| (283,122) |
| (252,314) |
Loans and accounts receivable from customers and interbank loans |
| 14 |
| (478,523) |
| (1,093,508) |
Investments under resale agreements |
| |
| (26,455) |
| (48,885) |
Obligations under repurchase agreements |
| |
| (155,610) |
| 53,493 |
Financial instruments at fair value through profit or loss |
| |
| 240,334 |
| (49,737) |
Financial instruments at fair value through other comprehensive income |
| |
| 21,419 |
| 444,078 |
Financial instruments at amortized cost |
| |
| (61,589) |
| (54,331) |
Other assets and liabilities |
| |
| (187,346) |
| (73,958) |
Time deposits and other time liabilities |
| |
| (1,163,239) |
| 938,692 |
Deposits and other demand liabilities |
| |
| 353,251 |
| 802,905 |
Dividends recieved from investments in associates | | | | 1,338 | | 1,185 |
Foreign borrowings obtained |
| |
| 992,614 |
| 1,521,053 |
Repayment of foreign borrowings |
| |
| (940,657) |
| (1,660,339) |
Interest paid |
| |
| (234,519) |
| (364,968) |
Interest received |
| |
| 689,708 |
| 766,270 |
Net fee and commission income |
| 12 |
| 55,749 |
| 58,970 |
Taxes paid |
| |
| (91,454) |
| (107,888) |
Repayment of other borrowings |
| |
| 16,040 |
| (3,752) |
Proceeds from sale of assets received in lieu of payment |
| |
| 7,228 |
| 4,502 |
Net cash flows provided by (used in) operating activities |
| |
| (1,244,833) |
| 881,468 |
CASH FLOWS FROM INVESTMENT ACTIVITIES: |
| |
|
|
| |
Purchase of property, plant and equipment and intangible assets |
| |
| (17,831) |
| (30,935) |
Sales of property, plant and equipment |
| |
| 13 |
| 109 |
Proceeds from sale of assets held for sale | | | | — | | 1,550 |
Payments for investments in associates | | | | (872) | | (338) |
Net cash flows provided by (used in) investing activities |
| |
| (18,690) |
| (29,614) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
| |
Borrowing obtained from the Central Bank of Chile | | | | 750,000 | | 2,004,267 |
Debt instruments issued |
| |
| 229,488 |
| 349,207 |
Redemption of debt issued |
| |
| (111,163) |
| (323,505) |
Dividends paid |
| |
| (14) |
| (127,078) |
Payments of lease liabilities | | | | (16,326) | | (17,467) |
Net cash flows provided by financing activities |
| |
| 851,985 |
| 1,885,424 |
Effect of changes in exchange rates |
| |
| 98,614 |
| 75,726 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
| |
| (312,924) |
| 2,813,004 |
Cash and cash equivalents at the beginning of the period |
| |
| 4,506,256 |
| 1,447,939 |
Cash and cash equivalents at end of the period |
| |
| 4,193,332 |
| 4,260,943 |
Net increase (decrease) in cash and cash equivalents |
| |
| (312,924) |
| 2,813,004 |
| | | | | | |
COMPONENTS OF CASH AND CASH EQUIVALENT AT END OF PERIOD | | | | | | |
Cash and deposits in banks | | | | 2,875,942 | | 2,129,179 |
Cash items in process of collection, net (1) | | | | 22,403 | | 7,950 |
Highly liquid financial instruments (2) | | | | 1,243,554 | | 2,086,581 |
Investments under resale agreements (3) | | | | 51,433 | | 37,233 |
| | | | 4,193,332 | | 4,260,943 |
| | | | | | |
(1) Cash items in process of collection and in process of being cleared represent domestic transactions, which have not been processed through the central domestic clearinghouse, or international transactions that may be delayed in settlement due to timing differences. | ||||||
(2) Corresponds to financial instruments at fair value through profit and loss and financial instrument at fair value through othercomprehensive income with maturities that do not exceed three months. As of June 30, 2021, the financial instruments at fair value through profit and loss include MCh$64,783 (MCh$MM$100,945 as of June 30, 2020) and financial instrument at fair value through other comprehensive income include MCh$1,178,771 (MCh$1,985,636 as of june 30, 2020). | ||||||
(3) Corresponds to resale agreements with maturities that do not exceed three months from the acquisition date. |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-6 |
| | | | | | | | | | | | | | | | | | |
| | As of | | | | | | Changes other than cash | | | | | | | | As of | ||
|
| January 1, | | Cash flows |
| Changes other | | |
| Interest and |
| Currency |
| Fair value |
| June 30, | ||
Item | | 2021 | | Received | | Paid | | than cash | | Acquisition | | readjustment | | exchange effects | | changes | | 2021 |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
Debt instruments issued | | | | | | | | | | | | | | | | | | |
Borrowing obtained from Chilean Central Bank | | 2,257,226 | | 750,000 | | — | | — | | — | | 190 | | — | | — | | 3,007,416 |
Mortgage finance bonds |
| 30,846 |
| — |
| (4,846) |
| — |
| — |
| 656 |
| — |
| — |
| 26,656 |
Bonds (senior and subordinated) |
| 6,174,010 |
| 229,488 |
| (106,317) |
| 192 |
| — |
| 202,202 |
| (35,001) |
| (155,705) |
| 6,308,869 |
Lease contracts liabilities | | 151,885 | | — | | (16,326) | | 758 | | (3,309) | | 2,113 | | (1,527) | | — | | 133,594 |
Totals |
| 8,613,967 |
| 979,488 |
| (127,489) |
| 950 |
| (3,309) |
| 205,161 |
| (36,528) |
| (155,705) |
| 9,476,535 |
| | | | | | | | | | | | | | | | | | |
Dividends approved and paid in 2021 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
Dividends approved in prior years and paid in 2021 |
| — |
| — |
| (14) |
| — |
| — |
| — |
| — |
| — |
| — |
Total Dividends paid | | — |
| — |
| (14) |
| — |
| |
| |
| |
| — |
| |
Subtotal cash flows from (used in) financing activities |
| — |
| 979,488 | | (127,503) |
| — |
| — |
| — |
| — |
| — |
| — |
Total cash flows from financing activities (net) |
| | | 851,985 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | As of | | | | | | Changes other than cash | | | | | | | | As of | ||
|
| January 1, | | Cash flows |
| Changes other | | |
| Interest and |
| Currency |
| Fair value |
| June 30, | ||
Item | | 2020 | | Received | | Paid | | than cash | | Acquisition | | readjustment | | exchange effects | | changes | | 2020 |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
Debt instruments issued | | | | | | | | | | | | | | | | | | |
Borrowing obtained from Chilean Central Bank | | — | | 2,004,267 | | — | | — | | — | | 26 | | — | | — | | 2,004,293 |
Mortgage finance bonds |
| 40,933 |
| — |
| (6,148) |
| — |
| — |
| 1,262 |
| — |
| — |
| 36,047 |
Bonds (senior and subordinated) |
| 6,367,423 |
| 349,207 |
| (317,357) |
| — |
| — |
| 328,348 |
| (59,631) |
| 53,213 |
| 6,721,203 |
Lease contracts liabilities | | 172,924 | | — | | (17,467) | | 4,100 | | 7,279 | | 4,919 | | (3,650) | | — | | 168,105 |
Totals |
| 6,581,280 |
| 2,353,474 |
| (340,972) |
| 4,100 |
| 7,279 |
| 334,555 |
| (63,281) |
| 53,213 |
| 8,929,648 |
| | | | | | | | | | | | | | | | | | |
Dividends approved and paid in 2020 |
| — |
| — |
| (127,065) |
| — |
| — |
| — |
| — |
| — |
| — |
Dividends approved in prior years and paid in 2020 |
| — |
| — |
| (13) |
| — |
| — |
| — |
| — |
| — |
| — |
Total Dividends paid | | — |
| — |
| (127,078) |
| — |
| |
| |
| |
| — |
| |
Subtotal cash flows from (used in) financing activities |
| — |
| 2,353,474 | | (468,050) |
| — |
| — |
| — |
| — |
| — |
| — |
Total cash flows from financing activities (net) |
| | | 1,885,424 | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-7 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
Index | | Page |
GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | F-9 | |
F-15 | ||
F-16 | ||
F-20 | ||
LOANS AND ACCOUNTS RECEIVABLE AT AMORTIZED COST AND LOANS AND ACCOUNTS RECEIVABLE FROM CUSTOMERS | F-24 | |
F-39 | ||
F-45 | ||
F-46 | ||
F-47 | ||
F-52 | ||
F-60 | ||
F-61 | ||
F-62 | ||
F-63 | ||
F-65 | ||
F-68 | ||
F-71 | ||
F-84 | ||
F-87 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-8 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 1 – General Information and Summary of Significant Accounting Policies
General Information – Background of Itaú Corpbanca and subsidiaries
Itaú Corpbanca (the “Bank”) is a corporation incorporated under the laws of the Republic of Chile and regulated by the Commission for the Financial Market (onwards “CMF”) which, as of June 1, 2019, assumed the functions of the Superintendency of Banks and Financial Institutions (“SBIF”), according to the Decree with Force of Law (DFL) No.3 of January 12, 2019, which sets a new consolidated, systematized and agreed text for the General Bank Law. The entity is the merger result between Banco Itaú Chile and Corpbanca (the latter is the legal successor) which was consummated on April 1, 2016, the date on which the Bank was renamed “Itaú Corpbanca”1.
The current ownership structure is 39.22% owned by Itaú Unibanco, 27.49% owned by CorpGroup (Saieh Family) and 33.29% owned by minority shareholders. Itaú Unibanco is the sole controlling shareholder of the merged bank. Within this context and without limiting the above, Itaú Unibanco and CorpGroup have signed a shareholders’ agreement relating to corporate governance, dividend policy (based on performance and capital metrics), transfer of shares, liquidity, and other matters.
Itaú Corpbanca is headquartered in Chile and has operations in Colombia and Panama. In addition, Itaú Corpbanca has a branch in New York and a representative office in Lima. The Bank has total consolidated assets for MCh$34,292,707 (MMUS$46,854) and total equity attributable to holders of the Bank for MCh$2,309,544 (MMUS$3,156).
The legal address of Itaú Corpbanca is Rosario Norte No. 660, Las Condes, Santiago, Chile, and its website is www.itau.cl
These Unaudited Condensed Consolidated Financial Statements as of June 30, 2021, were approved by the Board of Directors on September 23, 2021.
Significant Accounting Policies and Others
This condensed consolidated financial statements for the half-year reporting period ended 30 June, 2021 has been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”).
The interim report does not include all the notes of the type normally included in an annual financial statements. Accordingly, this statements is to be read in conjunction with the annual financial statements for the year ended 31 December, 2020
The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the adoption of new and amended standards as set out below.
a) | Accounting period |
The condensed consolidated financial statements are referred as of June 30, 2021 and December 31, 2020 and comprise the six-month periods ended June 31, 2021 and 2020.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-9 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 1 – General Information and Summary of Significant Accounting Policies, continued
b) | New and revised accounting pronouncements introduced by IASB |
1.1) Covid-19-Related Rent Concessions beyond 30 June 2021 amendment to IFRS 16.
On June 30, 2021 the Board issued Covid-19-Related Rent Concessions beyond 30 June 2021 which extended the availability of the practical expedient in IFRS 16 (the 2021 amendment), that provides lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification by one year. The 2021 amendment resulted applying to rent concessions for which any reduction in lease payments affects only payments originally due on or before 30 June 2022, provided the other conditions for applying the practical expedient are met.
The amendment is effective for annual reporting periods beginning on or after 1 April 2021.
The adoption of the amendment did not have a significant impact on the Consolidated Financial Statements since to date there have been no significant changes on current contracts to make use of this amendment.
2.1) | Sale or Contribution of assets between an investor and its Association or Joint Business (amendments to IFRS 10 and IAS 28) |
The amendments to IFRS 10 and IAS 28 address situations where there is a sale or contribution of assets between an investor and its associate or joint venture. Specifically, the amendments provide that gains or losses, resulting from the loss of control of a subsidiary that does not contain a business in a transaction with an associate or joint venture, accounted for using the equity method are recognized in the parent's profit or loss only to the extent of the unrelated investors' interests in that associate or joint venture. Similarly, gains or losses resulting from the remeasurement to fair value of investments held in a former subsidiary (which has become an associate or joint venture that is accounted for using the equity method) are recognized in the results of the former parent only to the extent of the unrelated investors' interests in the new associate or joint venture.
The effective date of the amendments was initially from January 1, 2016, however the IASB on December 17, 2015 indefinitely postponed their entry into force.
The Bank's Management will evaluate the potential impacts of these amendments, once the new implementation date for these amendments is announced.
2.2) | Amendment to IAS 1 "Presentation of Financial Statements" - Classification of liabilities as current or non-current |
On January 23, 2020, the IASB published the amendment to IAS 1, which addresses the classification of liabilities and clarifies their presentation as current or non-current. This amendment applies as of January 1, 2023 retroactively and its early application is permitted.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-10 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 1 – General Information and Summary of Significant Accounting Policies, continued
Among the modifications are the following:
• An entity shall classify a liability as current when it does not have a right to postpone its liquidation for at least twelve months following the date of the reporting period. The amendment removes the factor of "unconditionality" from this right.
• The right to defer settlement of the liability must have substance and must exist at the end of the reporting period. If this right is subject to the entity that covers any condition, such right only exists if it is effectively fulfilled by fulfilling these conditions at the end of the reporting period and can be classified as non-current. The entity must comply with these conditions, although the counterparty does not carry out a testing of these.
• The classification of the liability will not be affected by the probability that the entity exercises its right to defer its settlement. Therefore, if the liability meets the non-current condition specified in the standard, it will be classified as non-current, even if the entity plans to liquidate it in less than 12 months from the period in which it is reported or between the periods in which it is reported. And the one that is reported to the regulator. If any of the above cases occurs, it must be disclosed in the Financial Statements to understand the impact of the entity's financial position.
• The liability is understood as liquid when the entity extinguishes the obligation to control its effective counterparty, other economic resources, or its own equity instruments.
The Bank's Management is currently assessing the potential impact of the adoption of these amendments on the Consolidated Financial Statements.
On May 14, 2020, the IASB published, amendments to IFRS 3 'Business Combinations' that update an outdated reference in IFRS 3 without significantly changing its requirements.
The changes in Reference to the Conceptual Framework (Amendments to IFRS 3):
- | update IFRS 3 so that it refers to the 2018 Conceptual Framework instead of the 1989 Framework; |
- | add to IFRS 3 a requirement that, for transactions and other events within the scope of IAS 37 or IFRIC 21, an acquirer applies IAS 37 or IFRIC 21 (instead of the Conceptual Framework) to identify the liabilities it has assumed in a business combination; and |
- | add to IFRS 3 an explicit statement that an acquirer does not recognize contingent assets acquired in a business combination. |
The amendments published are effective for annual periods beginning on or after 1 January 2022. Early application is permitted if an entity also applies all other updated references (published together with the updated Conceptual Framework) at the same time or earlier.
The adoption of the amendment will not have material impacts on the Consolidated Financial Statements.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-11 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 1 – General Information and Summary of Significant Accounting Policies, continued
2.4) | Amendments to IAS 16 'Property, Plant and Equipment — Proceeds before Intended Use |
On May 14, 2020, the IASB published amendments to IAS 16 regarding proceeds from selling items produced while bringing an asset into the location and condition necessary for it to be capable of operating in the manner intended by management.
Amends the standard to prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling such items, and the cost of producing those items, in profit or loss.
The amendments is effective for annual periods beginning on or after 1 January 2022. Early application is permitted
The Bank's Management is currently evaluating the potential impact of the adoption of these amendments in its Consolidated Financial Statements.
2.5) | Amendments to IAS 37 'Onerous Contracts — Cost of Fulfilling a Contract |
On May 14, 2020, the IASB published 'Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37) amending the standard regarding costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.
The changes in Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37) specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labor, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract).
The amendments published today are effective for annual periods beginning on or after 1 January 2022. Early application is permitted.
The Bank's Management is currently evaluating the potential impact of the adoption of these amendments in its Consolidated Financial Statements.
2.6) | Annual improvements to IFRS standards 2018–2020 |
On May 14, 2020, the IASB published Annual Improvements to IFRS Standards 2018–2020 makes amendments to the following standards:
IFRS 1 First-time Adoption of International Financial Reporting Standards - Subsidiary as a first-time adopter. The amendment permits a subsidiary that applies paragraph D16(a) of IFRS 1 to measure cumulative translation differences using the amounts reported by its parent, based on the parent’s date of transition to IFRSs.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-12 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 1 – General Information and Summary of Significant Accounting Policies, continued
IFRS 9 Financial Instruments - Fees in the ‘10 per cent’ test for derecognition of financial liabilities. The amendment clarifies which fees an entity includes when it applies the ‘10 per cent’ test in paragraph B3.3.6 of IFRS 9 in assessing whether to derecognize a financial liability. An entity includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either the entity or the lender on the other’s behalf.
IFRS 16 Leases - Lease incentives. The amendment to Illustrative Example 13 accompanying IFRS 16 removes from the example the illustration of the reimbursement of leasehold improvements by the lessor in order to resolve any potential confusion regarding the treatment of lease incentives that might arise because of how lease incentives are illustrated in that example.
IAS 41 Agriculture - Taxation in fair value measurements. The amendment removes the requirement in paragraph 22 of IAS 41 for entities to exclude taxation cash flows when measuring the fair value of a biological asset using a present value technique. This will ensure consistency with the requirements in IFRS 13.
The amendments to IFRS 1, IFRS 9, and IAS 41 published today are all effective for annual periods beginning on or after 1 January 2022. Early application is permitted.
The amendment to IFRS 16 only regards an illustrative example, so no effective date is stated.
The Bank's Management is currently evaluating the potential impact of the adoption of these amendments in its Consolidated Financial Statements.
2.8) Disclosure of Accounting Policies, which amends IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements.
On february 12, 2021, the International Accounting Standards Board (IASB) issued 'Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)' with amendments that are intended to help preparers in deciding which accounting policies to disclose in their financial statements.
The amendments are applied prospectively. The amendments to IAS 1 are effective for annual periods beginning on or after 1 January 2023. Earlier application is permitted. Once the entity applies the amendments to IAS 1, it is also permitted to apply the amendments to IFRS Practice Statement 2.
The Bank's Management is currently evaluating the potential impact of the adoption of these amendments in its Consolidated Financial Statements.
2.9) Definition of Accounting Estimates amendments to IAS 8.
On february 12, 2021, the Board issued Definition of Accounting Estimates, which amended IAS 8. The amendments introduced the definition of accounting estimates and included other amendments to IAS 8 to help entities distinguish changes in accounting estimates from changes in accounting policies. The amendment makes the distinction between how an entity should present and disclose different types of accounting changes in its financial statements. Changes in accounting policies must be applied retrospectively while changes in accounting estimates are accounted for prospectively.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-13 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 1 – General Information and Summary of Significant Accounting Policies, continued
The amendments are effective for annual periods beginning on or after 1 January 2023 and changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. Earlier application is permitted.
The Bank's Management is currently evaluating the potential impact of the adoption of these amendments in its Consolidated Financial Statements.
2.10)Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
On may 7, 2021, the International Accounting Standards Board (IASB) published 'Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)' that clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations.
The main change in deferred tax related to assets and liabilities arising from a single transaction (Amendments to IAS 12) is an exemption from the initial recognition exemption provided for in IAS 12.15 (b) and IAS 12.24. Consequently, the initial recognition exemption does not apply to transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition.
The amendment is effective for annual reporting periods beginning on or after January 1, 2023. Early application is permitted.
The Bank's Management is currently evaluating the potential impact of the adoption of these amendments in its Consolidated Financial Statements.
c) Accounting changes
No new accounting pronouncements have been adopted in the period ended June 30, 2021 in the condensed consolidated financial statements.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-14 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 2 - Significant Events
As of June 30, 2021, the following significant events have influenced the operations of the Bank and its subsidiaries or the Consolidated Financial Statements:
ITAÚ CORPBANCA
Discontinuation of the net investment in Itaú Corpbanca Colombia hedge
During January 2021, by decision of Management, the hedge of net investment in Itaú Corpbanca Colombia was discontinued. The impact of discontinuing the hedge relationship was reclassified from valuation accounts to reserves, without generating an effect on the Consolidated Statement of Income.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-15 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 3 - Reporting Segments
The information on interest income and interest expenses for the six-month periods ended June 30, 2021 and 2020, of our reporting segments is presented below:
| | | | | | | | | | | | |
| | 2021 | | 2020 | ||||||||
|
| Chile |
| Colombia |
| Total |
| Chile |
| Colombia |
| Total |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
Interest income |
| 568,455 |
| 181,230 |
| 749,685 |
| 601,024 |
| 254,306 |
| 855,330 |
Interest expense |
| (212,810) |
| (59,779) |
| (272,589) |
| (288,047) |
| (113,763) |
| (401,810) |
Net interest income |
| 355,645 | | 121,451 | | 477,096 |
| 312,977 |
| 140,543 |
| 453,520 |
Segment information on assets and liabilities is presented for the as of June 30, 2021 and December 31, 2020.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-16 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 3 - Reporting Segments, continued
b.1) Assets and Liabilities
| | | | | | | | |
| | | | As of June 30, 2021 | ||||
| | Note | | Chile | | Colombia | | Total |
| | |
| MCh$ |
| MCh$ |
| MCh$ |
Cash and deposits in banks | | | | 2,469,761 | | 406,181 | | 2,875,942 |
Cash items in process of collection | | | | 442,141 | | 521 | | 442,662 |
Financial instruments at fair value through profit or loss | | | | 88,859 | | 212,380 | | 301,239 |
Financial instruments at fair value through other comprehensive income | | 6 | | 3,402,139 | | 512,059 | | 3,914,198 |
Loans and accounts receivable at amortized cost and interbank loans | | | | 18,029,772 | | 4,044,859 | | 22,074,631 |
Investment in associates | | 7 | | 8,218 | | — | | 8,218 |
Financial instruments at amortized cost | | 6 | | 7 | | 173,220 | | 173,227 |
Investments under resale agreements | | | | 116,606 | | 6,392 | | 122,998 |
Financial derivative contracts | | 4 | | 2,495,053 | | 93,050 | | 2,588,103 |
Intangible assets (*) | | | | 668,836 | | 34,103 | | 702,939 |
Property, plant, and equipment | | | | 49,396 | | 23,435 | | 72,831 |
Right of use assets under lease agreements | | | | 108,394 | | 20,371 | | 128,765 |
Current taxes | | | | 73,929 | | 26,194 | | 100,123 |
Deferred taxes | | | | 221,294 | | 52,295 | | 273,589 |
Other assets | | | | 430,411 | | 67,688 | | 498,099 |
Other non-current assets held for sale | | | | 12,237 | | 2,906 | | 15,143 |
TOTAL ASSETS | | | | 28,617,053 | | 5,675,654 | | 34,292,707 |
| | | | | | | | |
| | | | | | | | |
| | | | As of June 30, 2021 | ||||
| | Note | | Chile | | Colombia | | Total |
| | |
| MCh$ |
| MCh$ |
| MCh$ |
LIABILITIES | | |
|
|
|
|
|
|
Deposits and other demand liabilities | | |
| 4,566,185 |
| 1,984,472 |
| 6,550,657 |
Cash in process of being cleared | | |
| 420,259 |
| — |
| 420,259 |
Obligations under repurchase agreements | | |
| 142,737 |
| 340,504 |
| 483,241 |
Time deposits and other time liabilities | | |
| 8,920,893 |
| 1,348,932 |
| 10,269,825 |
Financial derivative contracts | | 4 |
| 2,301,356 |
| 76,565 |
| 2,377,921 |
Interbank borrowings | | |
| 3,976,708 |
| 476,980 |
| 4,453,688 |
Debt instruments issued | | |
| 5,588,827 |
| 746,698 |
| 6,335,525 |
Other financial liabilities | | |
| 29,163 |
| — |
| 29,163 |
Lease contracts liabilities | | |
| 111,549 |
| 22,045 |
| 133,594 |
Current taxes | | |
| 219 |
| 125 |
| 344 |
Deferred taxes | | |
| — |
| 102 |
| 102 |
Provisions | | |
| 107,675 |
| 68,104 |
| 175,779 |
Other liabilities | | |
| 605,233 |
| 79,361 |
| 684,594 |
Liabilities directly associated with non-current assets held for sale | | |
| — |
| — |
| — |
TOTAL LIABILITIES | | |
| 26,770,804 |
| 5,143,888 |
| 31,914,692 |
(*) This includes goodwill generated in business combination between Itaú Chile and Corpbanca totaling MCh$492,512 as of June 30, 2021.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-17 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 3 - Reporting Segments, continued
| | | | | | | | |
| | | | As of December 31, 2020 | ||||
| | Note | | Chile | | Colombia | | Total |
|
| |
| MCh$ |
| MCh$ |
| MCh$ |
Cash and deposits in banks |
| | | 2,761,202 | | 327,870 |
| 3,089,072 |
Cash items in process of collection |
| | | 173,099 | | 93 |
| 173,192 |
Financial instruments at fair value through profit or loss |
| | | 145,671 | | 437,039 |
| 582,710 |
Financial instruments at fair value through other comprehensive income |
| 6 | | 3,353,241 | | 617,658 |
| 3,970,899 |
Loans and accounts receivable at amortized cost and interbank loans |
| | | 17,503,371 | | 4,079,858 |
| 21,583,229 |
Investment in associates |
| 7 | | 7,149 | | — |
| 7,149 |
Financial instruments at amortized cost |
| 6 | | 7,202 | | 104,340 |
| 111,542 |
Investments under resale agreements |
| | | 84,173 | | 21,407 |
| 105,580 |
Financial derivative contracts |
| 4 | | 3,817,286 | | 165,517 |
| 3,982,803 |
Intangible assets (*) |
| | | 682,695 | | 35,988 |
| 718,683 |
Property, plant, and equipment | | | | 56,756 | | 23,859 | | 80,615 |
Right of use assets under lease agreements |
| | | 117,513 | | 28,495 |
| 146,008 |
Current taxes |
| | | 44,976 | | 19,723 |
| 64,699 |
Deferred taxes |
| | | 264,668 | | 47,888 |
| 312,556 |
Other assets |
| | | 453,702 | | 88,931 |
| 542,633 |
Other non-current assets held for sale |
| | | 10,818 | | 4,260 |
| 15,078 |
TOTAL ASSETS | | | | 29,483,522 | | 6,002,926 | | 35,486,448 |
| | | | | | | | |
|
| | | As of December 31, 2020 | ||||
|
| Note | | Chile | | Colombia | | Total |
|
| |
| MCh$ |
| MCh$ |
| MCh$ |
LIABILITIES | | | | | | | | |
Deposits and other demand liabilities |
| |
| 3,939,501 |
| 2,257,905 |
| 6,197,406 |
Cash in process of being cleared |
| |
| 154,231 |
| 1 |
| 154,232 |
Obligations under repurchase agreements |
| |
| 399,593 |
| 239,258 |
| 638,851 |
Time deposits and other time liabilities |
| |
| 9,984,010 |
| 1,449,054 |
| 11,433,064 |
Financial derivative contracts |
| 4 |
| 3,494,611 |
| 178,980 |
| 3,673,591 |
Interbank borrowings |
| |
| 3,393,160 |
| 405,818 |
| 3,798,978 |
Debt instruments issued |
| |
| 5,472,392 |
| 732,464 |
| 6,204,856 |
Other financial liabilities |
| |
| 13,123 |
| — |
| 13,123 |
Lease contracts liabilities |
| |
| 125,265 |
| 26,620 |
| 151,885 |
Current taxes |
| |
| 596 |
| 1,170 |
| 1,766 |
Deferred taxes |
| |
| — |
| 237 |
| 237 |
Provisions |
| |
| 33,310 |
| 101,780 |
| 135,090 |
Other liabilities |
| |
| 619,955 |
| 80,079 |
| 700,034 |
Liabilities directly associated with non-current assets held for sale |
| |
| — |
| — |
| — |
TOTAL LIABILITIES |
| |
| 27,629,747 |
| 5,473,366 |
| 33,103,113 |
(*) This includes goodwill generated in business combination between Itaú Chile and Corpbanca totaling MCh$492,512 as of December 31, 2020.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-18 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 3 - Reporting Segments, continued
b.2) Income for the six month periods ended June 30, 2021 and 2020
| | | | | | | | | | | | |
| | For the six-month periods ended June 30, | ||||||||||
| | 2021 | | 2020 | ||||||||
|
| Chile |
| Colombia |
| Total |
| Chile |
| Colombia |
| Total |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
Net interest income | | 355,645 | | 121,451 | | 477,096 |
| 312,977 | | 140,543 | | 453,520 |
Net fee and commission income | | 59,741 | | 12,763 | | 72,504 |
| 58,728 | | 14,854 | | 73,582 |
Net income from financial operations |
| (2,816) |
| 37,636 |
| 34,820 |
| 93,385 |
| 110,788 |
| 204,173 |
Net foreign exchange gain (loss) |
| 55,163 |
| (18,778) |
| 36,385 |
| 4,912 |
| (92,508) |
| (87,596) |
Other operating income |
| 9,284 |
| 9,867 |
| 19,151 |
| 12,664 |
| 14,228 |
| 26,892 |
Provision for loan losses |
| (41,178) |
| (47,405) |
| (88,583) |
| (208,219) |
| (85,780) |
| (293,999) |
NET OPERATING PROFIT |
| 435,839 | | 115,534 |
| 551,373 |
| 274,447 | | 102,125 |
| 376,572 |
Depreciation and amortization |
| (40,668) |
| (8,534) |
| (49,202) |
| (43,265) |
| (20,304) |
| (63,569) |
Operating expenses (*) (**) |
| (204,696) |
| (84,887) |
| (289,583) |
| (602,385) |
| (449,198) |
| (1,051,583) |
OPERATING INCOME (LOSS) |
| 190,475 |
| 22,113 |
| 212,588 |
| (371,203) |
| (367,377) |
| (738,580) |
Income from investment in associates |
| (2,380) | | 1,258 | | (1,122) |
| 370 | | — |
| 370 |
Income taxes |
| (35,021) |
| (8,266) |
| (43,287) |
| (33,416) |
| 39,423 |
| 6,007 |
CONSOLIDATED INCOME (LOSS) FOR THE PERIOD |
| 153,074 |
| 15,105 |
| 168,179 |
| (404,249) |
| (327,954) |
| (732,203) |
(*) Includes personnel salaries and expenses, administrative expenses, impairment, and other operating expenses
(**) The six month period ended 30, 2020, includes the recognition of an impairment loss of MCh$765,736. The impairment is broken down into MCh$651,825 corresponding to the impairment on Goodwill, MCh$412,356 and MCh$239,469 of CGUs of Chile and Colombia, respectively, and MCh$113,911 corresponding to the intangibles generated in the business combination of the CGU Colombia (see Note 15).
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-19 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 4 - Financial Derivative Contracts and Hedge Accounting
a) | Total derivative contracts portfolio |
The Bank and subsidiaries measures their derivative financial instruments at its fair value. In addition, the following derivative financial instruments for hedge accounting and trading purposes, which, in order to capture the credit risk in the valuation, are adjusted to reflect the CVA (Credit Value Adjustment) and DVA (Debit Value Adjustment). The detail of these instruments is presented below:
| | | | | | | | |
| | As of June 30, 2021 | | As of December 31, 2020 | ||||
| | Assets | | Liabilities | | Assets | | Liabilities |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
Derivatives held for hedge accounting |
| 86,410 | | 73,907 |
| 306,472 |
| 162,450 |
Derivatives held for trading |
| 2,501,693 | | 2,304,014 |
| 3,676,331 |
| 3,511,141 |
Totals |
| 2,588,103 |
| 2,377,921 |
| 3,982,803 |
| 3,673,591 |
a.1) Financial derivative assets
| | | | | | | | |
| | As of June 30, 2021 | ||||||
| | Notional | | | ||||
|
| |
| Between 3 months |
| |
| |
| | Up to 3 months | | and 1 year | | Over 1 year | | Fair value |
| | MCh$ | | MCh$ | | MCh$ | | MCh$ |
Currency forwards |
| 5,494,373 | | 2,145,176 | | 438,308 | | 191,385 |
Currency swaps |
| 292,322 | | 1,345,106 | | 8,617,676 | | 834,442 |
Interest rate swaps |
| 2,903,393 | | 4,791,629 | | 26,308,236 | | 1,561,620 |
Call currency options |
| 15,720 | | 10,574 | | — | | 498 |
Put currency options |
| 3,935 | | 5,354 | | — | | 158 |
Totals |
| 8,709,743 |
| 8,297,839 |
| 35,364,220 | | 2,588,103 |
| | | | | | | | |
| | As of December 31, 2020 | ||||||
| | Notional | | | ||||
|
| |
| Between 3 months |
| |
| |
| | Up to 3 months | | and 1 year | | Over 1 year | | Fair value |
| | MCh$ | | MCh$ | | MCh$ | | MCh$ |
Currency forwards |
| 7,882,839 |
| 2,358,854 |
| 417,178 |
| 472,208 |
Currency swaps |
| 246,599 |
| 932,372 |
| 8,656,771 |
| 938,762 |
Interest rate swaps |
| 3,828,930 |
| 6,424,682 |
| 26,020,406 |
| 2,570,553 |
Call currency options |
| 13,402 |
| 15,483 |
| — |
| 195 |
Put currency options |
| 7,797 |
| 10,514 |
| — |
| 1,085 |
Totals |
| 11,979,567 |
| 9,741,905 |
| 35,094,355 |
| 3,982,803 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-20 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 4 - Financial Derivative Contracts and Hedge Accounting, continued
a.2) Financial derivative liabilities
| | | | | | | | |
| | As of June 30, 2021 | ||||||
| | Notional | | | ||||
|
| |
| Between 3 months |
| |
| |
| | Up to 3 months | | and 1 year | | Over 1 year | | Fair value |
| | MCh$ | | MCh$ | | MCh$ | | MCh$ |
Currency forwards |
| 4,534,735 | | 3,686,172 | | 1,840,657 | | 175,051 |
Currency swaps |
| 236,597 | | 1,193,334 | | 7,964,413 | | 671,692 |
Interest rate swaps |
| 2,224,111 | | 5,804,777 | | 26,720,991 | | 1,530,003 |
Call currency options |
| 7,375 | | 10,084 | | — | | 928 |
Put currency options |
| 6,624 | | 4,510 | | — | | 247 |
Totals |
| 7,009,442 |
| 10,698,877 |
| 36,526,061 | | 2,377,921 |
| | | | | | | | |
| | As of December 31, 2020 | ||||||
| | Notional | | | ||||
|
| |
| Between 3 months |
| |
| |
| | Up to 3 months | | and 1 year | | Over 1 year | | Fair value |
| | MCh$ | | MCh$ | | MCh$ | | MCh$ |
Currency forwards |
| 7,913,739 |
| 1,989,333 |
| 935,565 | | 433,863 |
Currency swaps |
| 335,192 |
| 953,275 |
| 7,480,516 | | 775,122 |
Interest rate swaps |
| 3,509,633 |
| 6,205,021 |
| 27,404,647 | | 2,463,249 |
Call currency options |
| 9,434 |
| 15,404 |
| — | | 271 |
Put currency options |
| 5,753 |
| 5,786 |
| — | | 1,086 |
Totals |
| 11,773,751 |
| 9,168,819 |
| 35,820,728 |
| 3,673,591 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-21 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 4 - Financial Derivative Contracts and Hedge Accounting, continued
a.3) Portfolio detail
As of June 30, 2021 and as of December 31, 2020, the portfolio of financial derivative instruments held for hedge accounting and trading purposes is as follows:
| | | | | | | | | | |
| | As of June 30, 2021 | ||||||||
| | Notional | | Fair value | ||||||
| | | | Between 3 | | | | | | |
| | | | months and | | | | | | |
| | Up to 3 months | | 1 year | | Over 1 year | | Assets | | Liabilities |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
Derivatives held for hedge accounting |
| 792,339 |
| 2,296,575 |
| 2,970,766 |
| 86,410 |
| 73,907 |
Fair value hedge |
|
|
|
|
|
|
|
|
|
|
Currency forwards |
| | | | | | | | | |
Currency swaps |
| | | | | 76,711 | | 14,926 | | |
Interest rate swaps |
| 194,310 | | 1,188 | | 1,950,827 | | 44,120 | | 43,525 |
Subtotals |
| 194,310 |
| 1,188 |
| 2,027,538 |
| 59,046 |
| 43,525 |
Cash flow hedge |
|
|
|
|
|
|
|
|
|
|
Currency forwards |
| 461,819 | | 2,131,634 | | 912,092 | | 24,827 | | 25,424 |
Currency swaps |
| | | | | | | | | |
Interest rate swaps |
| | | 44,348 | | 31,136 | | 1,932 | | 111 |
Subtotals |
| 461,819 |
| 2,175,982 |
| 943,228 |
| 26,759 |
| 25,535 |
Hedge of net investment in a foreign operation |
|
|
|
|
|
|
|
|
|
|
Currency forwards |
| 136,210 | | 119,405 | | | | 605 | | 4,847 |
Subtotals |
| 136,210 |
| 119,405 |
| — |
| 605 |
| 4,847 |
| | | | | | | | | | |
Derivatives held for trading |
| 14,926,846 |
| 16,700,141 |
| 68,919,515 |
| 2,501,693 |
| 2,304,014 |
Currency forwards |
| 9,431,079 | | 3,580,309 | | 1,366,873 | | 165,953 | | 144,780 |
Currency swaps |
| 528,919 | | 2,538,440 | | 16,505,378 | | 819,516 | | 671,692 |
Interest rate swaps |
| 4,933,194 | | 10,550,870 | | 51,047,264 | | 1,515,568 | | 1,486,367 |
Call currency options |
| 23,095 | | 20,658 | | — | | 498 | | 928 |
Put currency options |
| 10,559 | | 9,864 | | — | | 158 | | 247 |
Subtotals |
| 14,926,846 |
| 16,700,141 |
| 68,919,515 |
| 2,501,693 |
| 2,304,014 |
Totals |
| 15,719,185 |
| 18,996,716 |
| 71,890,281 |
| 2,588,103 |
| 2,377,921 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-22 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 4 - Financial Derivative Contracts and Hedge Accounting, continued
| | | | | | | | | | |
| | As of December 31, 2020 | ||||||||
| | Notional | | Fair value | ||||||
| | | | Between 3 | | | | | | |
| | | | months and | | | | | | |
| | Up to 3 months | | 1 year | | Over 1 year | | Assets | | Liabilities |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
Derivatives held for hedge accounting |
| 3,704,562 |
| 965,569 |
| 2,261,626 |
| 306,472 |
| 162,450 |
Fair value hedge |
| |
| |
| |
| |
| |
Currency forwards |
| — |
| — |
| — |
| — |
| — |
Currency swaps |
| — |
| — |
| 74,894 |
| 9,666 |
| — |
Interest rate swaps |
| — |
| 201,193 |
| 1,960,759 |
| 203,913 |
| 61,705 |
Subtotals |
| — |
| 201,193 |
| 2,035,653 |
| 213,579 |
| 61,705 |
Cash flow hedge |
| |
| |
| |
| |
| |
Currency forwards |
| 1,657,848 |
| 716,842 |
| 178,107 |
| 3,919 |
| 33,112 |
Currency swaps |
| — |
| — |
| — |
| — |
| — |
Interest rate swaps |
| 4,000 |
| 29,233 |
| 47,866 |
| 2,094 |
| 238 |
Subtotals |
| 1,661,848 |
| 746,075 |
| 225,973 |
| 6,013 |
| 33,350 |
Hedge of net investment in a foreign operation |
| |
| |
| |
| |
| |
Currency forwards |
| 2,042,714 | | 18,301 |
| — |
| 86,880 |
| 67,395 |
Subtotal |
| 2,042,714 |
| 18,301 |
| — |
| 86,880 |
| 67,395 |
| | | | | | | | | | |
Derivatives held for trading |
| 20,048,756 |
| 17,945,155 |
| 68,653,457 |
| 3,676,331 |
| 3,511,141 |
Currency forwards |
| 12,096,016 |
| 3,613,044 |
| 1,174,636 |
| 381,409 |
| 333,356 |
Currency swaps |
| 581,791 |
| 1,885,647 |
| 16,062,393 |
| 929,096 |
| 775,122 |
Interest rate swaps |
| 7,334,563 |
| 12,399,277 |
| 51,416,428 |
| 2,364,546 |
| 2,401,306 |
Call currency options |
| 22,836 |
| 30,887 |
| — |
| 195 |
| 271 |
Put currency options |
| 13,550 |
| 16,300 |
| — |
| 1,085 |
| 1,086 |
Subtotals |
| 20,048,756 |
| 17,945,155 |
| 68,653,457 |
| 3,676,331 |
| 3,511,141 |
Totals |
| 23,753,318 |
| 18,910,724 |
| 70,915,083 |
| 3,982,803 |
| 3,673,591 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-23 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - Loans and Accounts Receivable from Customers
a) | Loans and accounts receivable from customers |
As of June 30, 2021, the loan portfolio is detailed as follows:
| | | | | | | | | | |
| | | | Allowances for loan losses | | | ||||
| | | | Individual | | Group | | | | |
As of June 30, 2021 | | Gross Assets | | allowances | | allowances | | Totals | | Net assets |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
Commercial loans: |
|
|
|
|
|
|
|
|
|
|
Commercial loans |
| 12,001,359 |
| (198,485) |
| (303,585) |
| (502,070) |
| 11,499,289 |
Foreign trade loans |
| 964,632 |
| — |
| (31,925) |
| (31,925) |
| 932,707 |
Checking account debtors |
| 69,024 |
| — |
| (9,306) |
| (9,306) |
| 59,718 |
Factoring transactions |
| 167,019 |
| — |
| (5,590) |
| (5,590) |
| 161,429 |
Student loans |
| 617,214 |
| — |
| (22,222) |
| (22,222) |
| 594,992 |
Leasing transactions |
| 908,166 |
| — |
| (22,965) |
| (22,965) |
| 885,201 |
Other commercial loans and receivables |
| 19,338 |
| — |
| (2,427) |
| (2,427) |
| 16,911 |
Subtotals |
| 14,746,752 |
| (198,485) |
| (398,020) |
| (596,505) |
| 14,150,247 |
Mortgage loans: |
|
|
|
|
|
|
|
|
|
|
Loans with mortgage finance bonds |
| 20,644 |
| — |
| (244) |
| (244) |
| 20,400 |
Endorsable mutual mortgage loans |
| 84,017 |
| — |
| (633) |
| (633) |
| 83,384 |
Other mutual mortgage loans |
| 5,197,016 |
| — |
| (55,158) |
| (55,158) |
| 5,141,858 |
Mortgage leasing transactions |
| 286,309 |
| — |
| (10,970) |
| (10,970) |
| 275,339 |
Other mortgage loans and receivables |
| 65,450 |
| — |
| (1,187) |
| (1,187) |
| 64,263 |
Subtotals |
| 5,653,436 |
| — |
| (68,192) |
| (68,192) |
| 5,585,244 |
Consumer loans: |
|
|
|
|
|
|
|
|
|
|
Installment consumer loans |
| 1,867,767 |
| — |
| (165,072) |
| (165,072) |
| 1,702,695 |
Checking account debtors |
| 104,419 |
| — |
| (9,135) |
| (9,135) |
| 95,284 |
Credit card balances |
| 474,005 |
| — |
| (19,727) |
| (19,727) |
| 454,278 |
Consumer leasing transactions |
| 1,000 |
| — |
| (89) |
| (89) |
| 911 |
Other consumer loans and receivables |
| 30,690 |
| — |
| (2,217) |
| (2,217) |
| 28,473 |
Subtotals |
| 2,477,881 |
| — |
| (196,240) |
| (196,240) |
| 2,281,641 |
Totals |
| 22,878,069 |
| (198,485) |
| (662,452) |
| (860,937) |
| 22,017,132 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-24 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - Loans and Accounts Receivable from Customers, continued
As of December 31, 2020, the loan portfolio is detailed as follows:
| | | | | | | | | | |
| | | | Allowances for loan losses | | | ||||
| | | | Individual | | Group | | | | |
As of December 31, 2020 | | Gross Assets | | allowances | | allowances | | Totals | | Net assets |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
Commercial loans: |
|
|
|
|
|
|
|
|
|
|
Commercial loans |
| 12,172,207 |
| (321,444) |
| (347,928) |
| (669,372) |
| 11,502,835 |
Foreign trade loans |
| 847,086 |
| — |
| (21,641) |
| (21,641) |
| 825,445 |
Checking account debtors |
| 70,126 |
| — |
| (8,080) |
| (8,080) |
| 62,046 |
Factoring transactions |
| 155,540 |
| — |
| (4,053) |
| (4,053) |
| 151,487 |
Student loans |
| 594,688 |
| — |
| (17,702) |
| (17,702) |
| 576,986 |
Leasing transactions |
| 940,989 |
| — |
| (24,402) |
| (24,402) |
| 916,587 |
Other commercial loans and receivables |
| 28,163 |
| — |
| (2,367) |
| (2,367) |
| 25,796 |
Subtotals |
| 14,808,799 |
| (321,444) |
| (426,173) |
| (747,617) |
| 14,061,182 |
Mortgage loans: |
|
|
|
|
|
|
|
|
|
|
Loans with mortgage finance bonds |
| 23,345 |
| — |
| (232) |
| (232) |
| 23,113 |
Endorsable mutual mortgage loans |
| 90,456 |
| — |
| (1,047) |
| (1,047) |
| 89,409 |
Other mutual mortgage loans |
| 4,820,863 |
| — |
| (59,799) |
| (59,799) |
| 4,761,064 |
Mortgage leasing transactions |
| 307,574 |
| — |
| (11,718) |
| (11,718) |
| 295,856 |
Other mortgage loans and receivables |
| 74,515 |
| — |
| (669) |
| (669) |
| 73,846 |
Subtotals |
| 5,316,753 |
| — |
| (73,465) |
| (73,465) |
| 5,243,288 |
Consumer loans: |
|
|
|
|
|
|
|
|
|
|
Installment consumer loans |
| 1,866,015 |
| — |
| (181,319) |
| (181,319) |
| 1,684,696 |
Checking account debtors |
| 124,009 |
| — |
| (11,064) |
| (11,064) |
| 112,945 |
Credit card balances |
| 467,624 |
| — |
| (24,770) |
| (24,770) |
| 442,854 |
Consumer leasing transactions |
| 1,467 |
| — |
| (182) |
| (182) |
| 1,285 |
Other consumer loans and receivables |
| 33,314 |
| — |
| (3,456) |
| (3,456) |
| 29,858 |
Subtotals |
| 2,492,429 |
| — |
| (220,791) |
| (220,791) |
| 2,271,638 |
Totals |
| 22,617,981 |
| (321,444) |
| (720,429) |
| (1,041,873) |
| 21,576,108 |
As of June 30, 2021, the Bank pledged as collateral to the Central Bank of Chile (BCCh) loans from the commercial portfolio in order to access the new Conditional Funding Facility (FCIC). The program includes access to 4-year funds at the BCCh overnight rate, with available funds size increasing as a function of additional loans pledged as collateral. The pledged loans have an outstanding principal balance of Ch$1,946,822 million (Ch$1,766,997 million as of December 2020). Additional disclosures on FCIC are included in Note 9 e).
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-25 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - 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 as of June 30, 2021 and December 31, 2020:
| | | | | | | | | | | | | | | | | | |
| | 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, 2021 | | 100,922 |
| 499,537 |
| 488,495 |
| 1,088,954 |
| 16,327,018 |
| 4,277,136 |
| 924,873 |
| 21,529,027 | | 22,617,981 |
Changes in Gross Assets |
| |
| |
| |
| |
| |
| |
| |
| |
| |
- Net transfer stage 1 |
| — |
| — |
| — |
| — |
| 579,715 |
| (573,869) |
| (5,846) |
| — |
| — |
- Net transfer stage 2 |
| — |
| (11,126) |
| 11,126 |
| — |
| (844,391) |
| 903,704 |
| (59,313) |
| — |
| — |
- Net transfer stage 3 |
| — |
| (1,927) |
| 1,927 |
| — |
| (34,725) |
| (119,377) |
| 154,102 |
| — |
| — |
- Increases due to change in credit risk |
| — |
| — | | — |
| — |
| — |
| — |
| — |
| — |
| — |
- Decreases due to change in credit risk |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
- Charge-offs |
| — |
| — |
| (499) |
| (499) |
| (2,156) |
| (18,032) |
| (119,238) |
| (139,426) |
| (139,925) |
- Changes due to modifications that did not result in derecognition | | — |
| (727) |
| 2,602 |
| 1,875 |
| (171,420) |
| (22,719) |
| 3,837 |
| (190,302) | | (188,427) |
New financial assets originated or purchased |
| 4,704 |
| 39,822 |
| 1,434 |
| 45,960 |
| 6,780,677 |
| 789,483 |
| 47,682 |
| 7,617,842 |
| 7,663,802 |
Financial assets that have been derecognized |
| (67,355) |
| (16,337) |
| (1,908) |
| (85,600) |
| (5,410,008) |
| (1,205,525) |
| (126,997) |
| (6,742,530) |
| (6,828,130) |
Net transfer (from) to group and individually assessed | | 3,510 |
| (42,345) |
| (42,986) |
| (81,821) |
| (3,510) |
| 42,345 |
| 42,986 |
| 81,821 | | — |
Foreign exchange and other movements |
| — |
| (7,398) |
| (16,520) | | (23,918) |
| (184,315) |
| (42,605) |
| 3,606 |
| (223,314) |
| (247,232) |
Ending balances as of June 30, 2021 |
| 41,781 |
| 459,499 |
| 443,671 |
| 944,951 |
| 17,036,885 |
| 4,030,541 |
| 865,692 |
| 21,933,118 |
| 22,878,069 |
| | | | | | | | | | | | | | | | | | |
| | 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, 2020 | | 20,807 |
| 321,488 |
| 268,211 |
| 610,506 |
| 18,691,115 |
| 2,864,199 |
| 968,994 |
| 22,524,308 | | 23,134,814 |
Changes in Gross Assets |
| |
|
|
|
|
|
|
| |
| |
| |
|
|
| |
- Net transfer stage 1 |
| — |
| — |
| — |
| — |
| 627,546 |
| (601,963) |
| (25,583) |
| — |
| — |
- Net transfer stage 2 |
| (7,573) |
| 7,573 |
| — |
| — |
| (1,791,800) |
| 1,876,532 |
| (84,732) |
| — |
| — |
- Net transfer stage 3 |
| (5,410) |
| (84,512) |
| 89,922 |
| — |
| (69,979) |
| (153,174) |
| 223,153 |
| — |
| — |
- Increases due to change in credit risk |
| — |
| — | | — |
| — |
| — |
| — |
| — |
| — |
| — |
- Decreases due to change in credit risk | | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — | | — |
- Charge-offs |
| — |
| — |
| (198) |
| (198) |
| (15,705) |
| (38,228) |
| (261,634) |
| (315,567) |
| (315,765) |
- Changes due to modifications that did not result in derecognition |
| — |
| (1,810) |
| (1,279) |
| (3,089) |
| (235,650) |
| (25,330) |
| (1,908) |
| (262,888) |
| (265,977) |
New financial assets originated or purchased |
| 32,170 |
| 80,355 |
| 122,624 |
| 235,149 |
| 6,798,612 |
| 1,474,294 |
| 408,576 |
| 8,681,482 |
| 8,916,631 |
Financial assets that have been derecognized |
| (13,399) |
| (73,546) |
| (104,964) |
| (191,909) |
| (7,224,940) |
| (837,836) |
| (195,902) |
| (8,258,678) |
| (8,450,587) |
Net transfer (from) to group and individually assessed | | 49,231 |
| 170,722 |
| 152,019 |
| 371,972 |
| (49,231) |
| (170,722) |
| (152,019) |
| (371,972) | | — |
Foreign exchange and other movements |
| 25,096 |
| 79,267 |
| (37,840) | | 66,523 |
| (402,950) |
| (110,636) |
| 45,928 |
| (467,658) |
| (401,135) |
Ending balances as of December 31, 2020 |
| 100,922 |
| 499,537 |
| 488,495 |
| 1,088,954 |
| 16,327,018 |
| 4,277,136 |
| 924,873 |
| 21,529,027 |
| 22,617,981 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-26 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - Loans and Accounts Receivable from Customers, continued
The following table presents the movements for the Commercial loans portfolio disaggregated by individually and group assessed loans for the period ended June 30, 2021:
| | | | | | | | | | | | | | | | | | |
| | 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, 2021 | | 100,922 |
| 499,537 |
| 488,495 |
| 1,088,954 |
| 10,427,978 |
| 2,564,516 |
| 727,351 |
| 13,719,845 | | 14,808,799 |
Changes in gross assets |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
| |
- Net transfer stage 1 |
| — |
| — |
| — |
| — |
| 197,566 |
| (196,331) | | (1,235) |
| — |
| — |
- Net transfer stage 2 |
| — |
| (11,126) |
| 11,126 |
| — |
| (393,788) |
| 421,591 | | (27,803) |
| — |
| — |
- Net transfer stage 3 | | — |
| (1,927) |
| 1,927 |
| — |
| (19,392) |
| (69,611) | | 89,003 |
| — | | — |
- Charge-offs |
| — |
| — |
| (499) |
| (499) |
| (34) |
| (102) | | (60,920) |
| (61,056) |
| (61,555) |
- Changes due to modifications that did not result in derecognition |
| — |
| (727) |
| 2,602 |
| 1,875 |
| (118,577) |
| (4,910) | | 3,093 |
| (120,394) |
| (118,519) |
New financial assets originated or purchased |
| 4,704 |
| 39,822 |
| 1,434 |
| 45,960 |
| 4,693,301 |
| 426,540 | | 2,349 |
| 5,122,190 |
| 5,168,150 |
Financial assets that have been derecognized |
| (67,355) |
| (16,337) |
| (1,908) |
| (85,600) |
| (3,957,353) |
| (762,712) | | (84,327) |
| (4,804,392) |
| (4,889,992) |
Net transfer (from) to group and individually assessed | | 3,510 |
| (42,345) |
| (42,986) |
| (81,821) |
| (3,510) |
| 42,345 | | 42,986 |
| 81,821 | | — |
Foreign exchange and other movements |
| — |
| (7,398) |
| (16,520) | | (23,918) |
| (121,124) |
| (20,500) | | 5,411 |
| (136,213) |
| (160,131) |
Ending balances as of June 30, 2021 |
| 41,781 |
| 459,499 |
| 443,671 |
| 944,951 |
| 10,705,067 |
| 2,400,826 |
| 695,908 |
| 13,801,801 |
| 14,746,752 |
The following table presents the movements for the Commercial loans portfolio disaggregated by individually and group assessed loans for the year ended December 31, 2020:
| | | | | | | | | | | | | | | | | | |
| | 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, 2020 |
| 20,807 |
| 321,488 |
| 268,211 |
| 610,506 |
| 12,445,411 |
| 1,725,817 |
| 678,810 |
| 14,850,038 |
| 15,460,544 |
Changes in gross assets |
| |
|
|
|
|
| |
|
|
|
|
|
|
| |
| |
- Net transfer stage 1 |
| — |
| — |
| — |
| — |
| 196,395 |
| (188,266) |
| (8,129) |
| — |
| — |
- Net transfer stage 2 |
| (7,573) |
| 7,573 |
| — |
| — |
| (829,499) |
| 848,497 |
| (18,998) |
| — |
| — |
- Net transfer stage 3 |
| (5,410) |
| (84,512) |
| 89,922 |
| — |
| (37,142) |
| (95,739) |
| 132,881 |
| — |
| — |
- Charge-offs | | — |
| — |
| (198) | | (198) | | (443) |
| (2,370) |
| (165,651) | | (168,464) |
| (168,662) |
- Changes due to modifications that did not result in derecognition | | — |
| (1,810) |
| (1,279) | | (3,089) | | (156,731) |
| (11,529) |
| (2,906) | | (171,166) |
| (174,255) |
New financial assets originated or purchased |
| 32,170 |
| 80,355 |
| 122,624 |
| 235,149 |
| 5,000,040 |
| 1,070,353 |
| 357,615 |
| 6,428,008 |
| 6,663,157 |
Financial assets that have been derecognized |
| (13,399) |
| (73,546) |
| (104,964) |
| (191,909) |
| (5,865,418) |
| (508,072) |
| (143,255) |
| (6,516,745) |
| (6,708,654) |
Net transfer (from) to group and individually assessed |
| 49,231 |
| 170,722 |
| 152,019 |
| 371,972 |
| (49,231) |
| (170,722) |
| (152,019) |
| (371,972) |
| — |
Foreign exchange and other movements |
| 25,096 |
| 79,267 |
| (37,840) |
| 66,523 |
| (275,404) |
| (103,453) |
| 49,003 |
| (329,854) |
| (263,331) |
Ending balances as of December 31, 2020 |
| 100,922 |
| 499,537 |
| 488,495 |
| 1,088,954 |
| 10,427,978 |
| 2,564,516 |
| 727,351 |
| 13,719,845 |
| 14,808,799 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-27 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - Loans and Accounts Receivable from Customers, continued
The following table presents the movements of the Mortgage loans portfolio for the period ended June 30, 2021:
| | | | | | | | |
| | Group assessed | ||||||
| | Stage 1 | | Stage 2 | | Stage 3 | | |
|
| 12-Month |
| Lifetime |
| Lifetime |
| |
|
| ECL | | ECL | | ECL | | Totals |
| | | | | | | | |
Opening balances as of January 1, 2021 |
| 4,166,515 |
| 1,025,921 |
| 124,317 |
| 5,316,753 |
Changes in gross assets |
|
|
|
|
|
|
| |
- Net transfer stage 1 |
| 198,745 | | (198,394) | | (351) |
| — |
- Net transfer stage 2 |
| (246,234) | | 264,703 | | (18,469) |
| — |
- Net transfer stage 3 |
| (2,077) | | (16,173) | | 18,250 |
| — |
- Charge-offs |
| (1) | | (66) | | (6,461) |
| (6,528) |
- Changes due to modifications that did not result in derecognition |
| (19,396) | | (8,062) | | 311 |
| (27,147) |
New financial assets originated or purchased |
| 1,388,545 | | 253,176 | | 25,438 |
| 1,667,159 |
Financial assets that have been derecognized |
| (945,543) | | (277,136) | | (35,508) |
| (1,258,187) |
Foreign exchange and other movements |
| (27,406) | | (10,210) | | (998) |
| (38,614) |
Ending balances as of June 30, 2021 |
| 4,513,148 |
| 1,033,759 |
| 106,529 |
| 5,653,436 |
The following table presents the movements of the Mortgage loans portfolio for the year ended December 31, 2020:
| | | | | | | | |
| | Group assessed | ||||||
| | Stage 1 | | Stage 2 | | Stage 3 | | |
|
| 12-Month |
| Lifetime |
| Lifetime |
| |
|
| ECL | | ECL | | ECL | | Totals |
| | | | | | | | |
Opening balances as of January 1, 2020 |
| 4,043,765 |
| 656,010 |
| 176,266 |
| 4,876,041 |
Changes in gross assets |
| |
| |
|
|
| |
- Net transfer stage 1 |
| 265,412 |
| (259,632) |
| (5,780) |
| — |
- Net transfer stage 2 |
| (613,181) |
| 669,912 |
| (56,731) |
| — |
- Net transfer stage 3 |
| (7,706) |
| (36,114) |
| 43,820 |
| — |
- Charge-offs |
| — |
| (63) |
| (12,428) |
| (12,491) |
- Changes due to modifications that did not result in derecognition |
| (27,511) |
| (6,693) |
| 612 |
| (33,592) |
New financial assets originated or purchased |
| 971,616 |
| 76,558 |
| 2,117 | | |
Financial assets that have been derecognized |
| (411,059) |
| (71,328) |
| (22,524) |
| (504,911) |
Foreign exchange and other movements |
| (54,821) |
| (2,729) |
| (1,035) |
| (58,585) |
Ending balances as of December 31, 2020 |
| 4,166,515 |
| 1,025,921 |
| 124,317 |
| 5,316,753 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-28 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - Loans and Accounts Receivable from Customers, continued
The following table presents the movements of the Consumer loans portfolio for the period ended June 30, 2021:
| | | | | | | | |
| | Group assessed | ||||||
| | Stage 1 | | Stage 2 | | Stage 3 | | |
|
| 12-Month |
| Lifetime |
| Lifetime |
| |
|
| ECL | | ECL | | ECL | | Totals |
| | | | | | | | |
Opening balances as of January 1, 2021 |
| 1,732,525 |
| 686,699 |
| 73,205 |
| 2,492,429 |
Changes in gross assets |
| |
| |
| |
| |
- Net transfer stage 1 | | 183,404 |
| (179,144) |
| (4,260) | | — |
- Net transfer stage 2 |
| (204,369) |
| 217,410 |
| (13,041) |
| — |
- Net transfer stage 3 | | (13,256) |
| (33,593) |
| 46,849 | | — |
- Charge-offs |
| (2,121) | | (17,864) | | (51,857) |
| (71,842) |
- Changes due to modifications that did not result in derecognition |
| (33,447) | | (9,747) | | 433 |
| (42,761) |
New financial assets originated or purchased |
| 698,831 | | 109,767 | | 19,895 |
| 828,493 |
Financial assets that have been derecognized |
| (507,112) | | (165,677) | | (7,162) |
| (679,951) |
Foreign exchange and other movements |
| (35,785) | | (11,895) | | (807) |
| (48,487) |
Ending balances as of June 30, 2021 |
| 1,818,670 |
| 595,956 |
| 63,255 |
| 2,477,881 |
The following table presents the movements of the Consumer loans portfolio for the year ended December 31, 2020:
| | | | | | | | |
| | Group assessed | ||||||
| | Stage 1 | | Stage 2 | | Stage 3 | | |
|
| 12-Month |
| Lifetime |
| Lifetime |
| |
|
| ECL | | ECL | | ECL | | Totals |
| | | | | | | | |
Opening balances as of January 1, 2020 |
| 2,201,939 |
| 482,372 |
| 113,918 |
| 2,798,229 |
Changes in gross assets |
| |
| |
|
|
| |
- Net transfer stage 1 |
| 165,739 |
| (154,065) |
| (11,674) |
| — |
- Net transfer stage 2 |
| (349,120) |
| 358,123 |
| (9,003) |
| — |
- Net transfer stage 3 |
| (25,131) |
| (21,321) |
| 46,452 |
| — |
- Charge-offs | | (15,262) |
| (35,795) |
| (83,555) | | (134,612) |
- Changes due to modifications that did not result in derecognition | | (51,408) |
| (7,108) |
| 386 | | (58,130) |
New financial assets originated or purchased |
| 826,956 |
| 327,383 |
| 48,844 |
| 1,203,183 |
Financial assets that have been derecognized |
| (948,463) |
| (258,436) |
| (30,123) |
| (1,237,022) |
Foreign exchange and other movements |
| (72,725) |
| (4,454) |
| (2,040) |
| (79,219) |
Ending balances as of December 31, 2020 |
| 1,732,525 |
| 686,699 |
| 73,205 |
| 2,492,429 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-29 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - Loans and Accounts Receivable from Customers, continued
b) | Allowances for loans losses |
Credit risk
Credit risk is the risk that a customer or counterparty will default on its contractual obligations resulting in financial loss to the Bank. The Bank’s main income generating activity is lending to customers and therefore credit risk is a principal risk. Credit risk mainly arises from loans and advances to customers and other Banks (including related commitments to lend such as loan or credit card facilities), investments in debt securities and derivatives that are an asset position. The Bank considers all elements of credit risk exposure such as counterparty default risk, geographical risk and sector risk for risk management purposes.
Credit risk management
The Bank’s credit committee is responsible for managing the Bank’s credit risk by:
● | Ensuring that the Bank has appropriate credit risk practices, including an effective system of internal control, to consistently determine adequate allowances in accordance with the Bank’s stated policies and procedures, IFRS and relevant supervisory guidance. |
● | Identifying, assessing and measuring credit risk across the Bank, from an individual instrument to a portfolio level. |
● | Creating credit policies to protect the Bank against the identified risks including the requirements to obtain collateral from borrowers, to perform robust ongoing credit assessment of borrowers and to continually monitor exposures against internal risk limits. |
● | Limiting concentrations of exposure by type of asset, counterparties, industry, credit rating, geographic location etc. |
● | Establishing a robust control framework regarding the authorization structure for the approval and renewal of credit facilities. |
● | Developing and maintaining the Bank’s risk grading to categorize exposures according to the degree of risk of default. Risk rating are subject to regular reviews. |
● | Developing and maintaining the Bank’s processes for measuring ECL including monitoring of credit risk, incorporation of forward looking information and the method used to measure ECL. |
● | Ensuring that the Bank has policies and procedures in place to appropriately maintain and validate models used to assess and measure ECL. |
● | Establishing a sound credit risk accounting assessment and measurement process that provides it with a strong basis for common systems, tools and data to assess credit risk and to account for ECL. Providing advice, guidance and specialist skills to business units to promote best practice throughout the Bank in the management of credit risk. |
The internal audit function performs regular audits making sure that the established controls and procedures are adequately designed and implemented.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-30 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - Loans and Accounts Receivable from Customers, continued
Significant increase in credit risk
The Bank analyzes all data collected using statistical models and estimates the remaining lifetime PD of exposures and how these are expected to change over time. The factors taken into account in this process include macro-economic data such as GDP growth, unemployment, benchmark interest rates and house prices. The Bank generates a ‘base case’ scenario of the future direction of relevant economic variables as well as a representative range of other possible forecast scenarios. The Bank then uses these forecasts, which are probability-weighted, to adjust its estimates of PDs.
Under the Bank’s monitoring procedures a significant increase in credit risk is identified before the exposure has defaulted, and at the latest when the exposure becomes 30 days past due, unless the Bank has reasonable and supportable information that demonstrates otherwise.
As of December 31, 2020 and considering the current pandemic situation, the IASB required special attention to the assets of the impairment reflected in the ECL calculation and the SICR triggers, taking in account not only the current conditions and forecast of the economic factors, but also the Government support measures. As part of our permanent monitoring process to properly reflect expected credit losses some improvements have been implemented during 2020, mainly related to SICR which now is calculated for each category of loans and SICR related to Covid-19 relief measures for our clients.
The Bank uses different criteria to determine whether credit risk has increased significantly per portfolio of assets. The criteria used are both quantitative changes in PDs as well as qualitative. The table below summarizes per type of asset the range above which an increase in lifetime PD is determined to be significant, as well as some indicative qualitative indicators assessed.
Criteria used for Chile
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Type of portfolio |
| Debtor category |
| Stages |
| Days of arrears to the end of the month |
|
| A1, A2, A3 | | Stage 1 |
| Up to 29 days |
|
| A4 | | Stage 1 | | Up to 29 days |
Corporate |
| A5 (*), A6 | | Stage 1 |
| Up to 29 days |
|
| B1, B2, B3 | | Stage 2 | | From 30 to 89 days |
|
| B4, C1, C2, C3, C4, C5, C6 | | Stage 3 | | 90 days or more |
(*) Loans originated in A5 are considered Stage 1 at inception. Loans that were originated in a higher category and subsequently downgraded to A5 are considered Stage 2.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-31 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - Loans and Accounts Receivable from Customers, continued
| | | | | | |
| | | | | | Days of arrears to the end of the month, |
| | | | | | probability of default (PD) and |
Type of portfolio |
| Portfolio | | Stages |
| qualitative considerations |
|
| | | Stage 1 |
| Up to 29 days |
| | CAE | | Stage 2 | | From 30 to 89 days or (difference Referential Life Time PD >=1.61 and difference PD Life Time at origination >= 0.13) combinated with a client with a extension and (with a minimun payment or a debt increase in 25%) |
|
| | | Stage 3 |
| 90 days or more |
| | | | Stage 1 | | Up to 29 days |
| | Condell / Restructured Condell | | Stage 2 (Condell) | | From 30 to 89 days or (difference Referential Life Time PD >=1.59 and difference PD Life Time at origination >= 0.04) combinated with a client with a extension and (with a protest or a debt increase) |
| | | | Stage 2 (Restructured Condell) | | From 30 to 89 days or (difference Referential Life Time PD >=1.47 and difference PD Life Time at origination >= 0.08) combinated with a client with a extension and (with a protest or a debt increase) |
| | | | Stage 3 | | 90 days or more |
| | | | Stage 1 | | Up to 29 days |
| | Commercial/ | | Stage 2 (Commercial) | | From 30 to 89 days or (difference Referential Life Time PD >=1.71 and difference PD Life Time at origination >= 0.11) combinated with a client with a extension and (with a minimun payment or a debt increase in 25%) |
Group | | | | Stage 2 (Rotative Commercial) | | From 30 to 89 days or (difference Referential Life Time PD >=2.25 and difference PD Life Time at origination >= 0.07) combinated with a client with a extension and (with a minimun payment or a debt increase in 25%) |
| | | | Stage 3 | | 90 days or more |
| | | | Stage 1 | | Up to 29 days |
| | | | Stage 2 (Consumer) | | From 30 to 89 days or (difference Referential Life Time PD >=2.08 and difference PD Life Time at origination >= 0.08) combinated with a client with a extension and (with a minimun payment or a debt increase in 25%) |
| | Consumer/ | | Stage 2 (Renegotiated Consumer) | | From 30 to 89 days or (difference Referential Life Time PD >=1.79 and difference PD Life Time at origination >= 0.20) combinated with a client with a extension and (with a minimun payment or a debt increase in 25%) |
| | | | Stage 2 (Rotative Consumer) | | From 30 to 89 days or (difference Referential Life Time PD >=2.46 and difference PD Life Time at origination >= 0.08) combinated with a client with a extension and (with a minimun payment or a debt increase in 25%) |
| | | | Stage 3 | | 90 days or more |
| | | | Stage 1 |
| Up to 29 days |
| | Mortgage | | Stage 2 | | From 30 to 89 days or (difference Referential Life Time PD >=2.41 and difference PD Life Time at origination >= 0.20) combinated with a client with a extension and (with a minimun payment or a debt increase in 25%) |
| | | | Stage 3 |
| 90 days or more |
The quantitative criteria is used to identify where an exposure has increased in credit risk and it is applied based on whether an increase in the lifetime PD since the recognition date exceeds the threshold set in absolute and relative terms. The following formulas are used to determine such thresholds:
Relative comparison formula
Threshold = Lifetime PD (at reporting date) - 1
Lifetime PD (at origination)
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-32 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - Loans and Accounts Receivable from Customers, continued
Absolute comparison formula
Threshold = Lifetime PD (at reporting date) – Lifetime PD (at origination)
Criteria used for Colombia
| | | | | | |
|
| % of absolute increase in |
| % of relative increase |
| Qualitative |
| | lifetime PD | | in lifetime PD | | indicators assessed |
Corporate portfolio | | | | | | Debt restructuring and increase in credit risk of other financial instruments |
Without information |
| 69.09 | % | 2,558.55 | % | |
Small company |
| 17.51 | % | 2,027.22 | % | |
Small company |
| 20.08 | % | 1,156.16 | % |
|
Medium company |
| 4.92 | % | 1,181.62 | % | |
Medium company |
| 9.46 | % | 81.69 | % | |
Large company |
| 5.97 | % | 738.75 | % |
|
Low default |
| 1.61 | % | 149.62 | % |
|
Low default (Government and Financial) |
| 0.4 | % | 621.57 | % |
|
Group portfolio |
|
|
|
|
| Increase in credit risk of other financial instruments |
Leasing |
| 50.56 | % | 236.20 | % | |
Payroll deductible loan |
| 53.44 | % | 424.01 | % |
|
Revolving line of credit |
| 40.95 | % | 221.72 | % |
|
Overdraft limit |
| 55.32 | % | 2.29 | % | |
Credit card |
| 23.83 | % | 42.33 | % |
|
Mortgage loan |
| 2.61 | % | 137.24 | % |
|
Personal debt restructuring |
| 41.69 | % | 879.62 | % | |
Other loans |
| 58.26 | % | 286.72 | % |
|
Loan commitments are assessed along with the category of loan the Bank is committed to provide, i.e. commitments to provide mortgages are assessed using similar criteria to mortgage loans, while commitments to provide a corporate loan are assessed using similar criteria to corporate loans.
The Bank has monitoring procedures in placfe to make sure that the criteria used to identify significant increases in credit are effective, meaning that significant increase in credit risk is identified before the exposure is defaulted or when the asset becomes 30 days past due. The Bank performs periodic back-testing of its ratings to consider whether the drivers of credit risk that led to default were accurately reflected in the rating in a timely manner.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-33 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - Loans and Accounts Receivable from Customers, continued
Incorporation of forward-looking information
The Bank uses forward-looking information that is available without undue cost or effort in its assessment of significant increase of credit risk as well as in its measurement of ECL. The Bank employs experts who use external and internal information to generate a ‘base case’ scenario of future forecast of relevant economic variables along with a representative range of other possible forecast scenarios. The external information used includes economic data and forecasts published by governmental bodies and monetary authorities.
The Bank applies probabilities to the forecast scenarios identified. The base case scenario is the single most-likely outcome and consists of information used by the Bank for strategic planning and budgeting. The Bank has identified and documented key drivers of credit risk and credit losses for each portfolio of financial instruments and, using a statistical analysis of historical data, has estimated relationships between macro-economic variables and credit risk and credit losses.
The Bank has not made changes in the estimation techniques or significant assumptions made during the reporting period.
During the six-month period ended 30 June 2021, there have been no significant changes in the estimates made at the end of 2020, as disclosed in our financial statements issued as of December 31, 2020.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-34 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - Loans and Accounts Receivable from Customers, continued
Movements in allowances for loan losses during the six month period ended June 30, 2021 and for the year ended on December 31, 2020, are 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 |
Allowances of the loan portfolio |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Opening balances as of January 1, 2021 |
| (46) |
| (66,280) |
| (255,118) |
| (321,444) |
| (165,461) |
| (280,410) |
| (274,558) |
| (720,429) |
| (1,041,873) |
Changes in the allowances |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
| — |
- Net transfer stage 1 |
| — |
| — | | — |
| — |
| (41,128) |
| 38,513 |
| 2,615 |
| — |
| — |
- Net transfer stage 2 |
| — | | — | | — |
| — |
| 19,172 | | (33,958) |
| 14,786 |
| — |
| — |
- Net transfer stage 3 |
| — | | 5,699 | | (5,699) |
| — |
| 2,236 | | 24,079 | | (26,315) |
| — |
| — |
- Increases due to change in credit risk |
| (608) | | (6,296) | | (2,259) | | (9,163) | | (11,685) | | (54,539) | | (64,100) | | (130,324) |
| (139,487) |
- Decreases due to change in credit risk | | — | | 501 | | 3,395 | | 3,896 | | 56,425 | | 36,873 | | 8,008 | | 101,306 | | 105,202 |
- Charge-offs |
| — | | — | | 499 |
| 499 |
| 456 | | 7,020 | | 79,664 |
| 87,140 |
| 87,639 |
- Changes due to modifications that did not result in derecognition |
| — | | — | | — |
| — |
| — | | — | | — |
| — |
| — |
New financial assets originated or purchased |
| (16) | | (4,199) | | (125) |
| (4,340) |
| (47,974) | | (51,501) | | (18,525) |
| (118,000) |
| (122,340) |
Financial assets that have been derecognized |
| 2 | | 3,604 | | 1,039 |
| 4,645 |
| 31,487 | | 61,695 | | 133,589 |
| 226,771 |
| 231,416 |
Net transfer (from) group to individually assessed |
| (284) | | 6,139 | | 107,017 | | 112,872 | | 284 | | (6,139) | | (107,017) | | (112,872) |
| — |
Foreign exchange and other movements |
| — | | 2,498 | | 12,052 |
| 14,550 |
| 4,805 | | 3,960 |
| (4,809) |
| 3,956 |
| 18,506 |
Ending balances as of June 30, 2021 |
| (952) |
| (58,334) |
| (139,199) |
| (198,485) |
| (151,383) |
| (254,407) |
| (256,662) |
| (662,452) |
| (860,937) |
| | | | | | | | | | | | | | | | | | |
| | 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, 2020 |
| — |
| (42,000) |
| (151,135) |
| (193,135) |
| (145,415) |
| (260,297) |
| (281,270) |
| (686,982) |
| (880,117) |
Changes in the allowances |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
| |
- Net transfer stage 1 |
| — |
| — |
| — |
| — |
| (49,315) |
| 39,672 |
| 9,643 |
| — |
| — |
- Net transfer stage 2 |
| 82 |
| (82) |
| — |
| — |
| 19,402 |
| (36,007) |
| 16,605 |
| — |
| — |
- Net transfer stage 3 |
| 63 |
| 9,055 |
| (9,118) |
| — |
| 2,280 |
| 28,404 |
| (30,684) |
| — |
| — |
- Increases due to change in credit risk |
| | | (8,381) | | (43,940) | | (52,321) | | (28,719) | | (64,496) | | (138,605) | | (231,820) |
| (284,141) |
- Decreases due to change in credit risk | | | | 4,761 | | 2,088 | | 6,849 | | 59,996 | | 37,255 | | 8,515 | | 105,766 | | 112,615 |
- Charge-offs |
| — |
| — |
| 198 |
| 198 |
| 1,390 |
| 14,707 |
| 158,261 |
| 174,358 |
| 174,556 |
- Changes due to modifications that did not result in derecognition |
| — |
| — |
| — |
| — |
| — |
| — |
| 789 |
| 789 |
| 789 |
New financial assets originated or purchased |
| (46) |
| (12,567) |
| (104,044) |
| (116,657) |
| (80,071) |
| (118,827) |
| (99,210) |
| (298,108) |
| (414,765) |
Financial assets that have been derecognized |
| 500 |
| 4,873 |
| 61,022 |
| 66,395 |
| 50,438 |
| 68,536 |
| 59,044 |
| 178,018 |
| 244,413 |
Net transfer (from) group to individually assessed |
| — | | 3,009 | | (46,698) | | (43,689) | | — | | (3,009) | | 46,698 | | 43,689 |
| — |
Foreign exchange and other movements |
| (645) |
| (24,948) |
| 36,509 |
| 10,916 |
| 4,553 |
| 13,652 |
| (24,344) |
| (6,139) |
| 4,777 |
Ending balances as of December 31, 2020 |
| (46) |
| (66,280) |
| (255,118) |
| (321,444) |
| (165,461) |
| (280,410) |
| (274,558) |
| (720,429) |
| (1,041,873) |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-35 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - Loans and Accounts Receivable from Customers, continued
The following analysis details the movement on allowances by type of portfolio (commercial, mortgage and consumer) for the six month period ended June 30, 2021 and for the year ended on December 31, 2020, 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, 2021 |
| (46) |
| (66,280) |
| (255,118) |
| (321,444) |
| (88,080) |
| (126,543) |
| (211,550) |
| (426,173) |
| (747,617) |
Changes in the allowances |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
| - |
- Net transfer to stage 1 |
| — |
| — |
| — |
| — |
| (10,515) |
| 10,247 |
| 268 |
| — |
| — |
- Net transfer to stage 2 |
| — |
| — |
| — |
| — |
| 7,156 |
| (12,874) |
| 5,718 |
| — |
| — |
- Net transfer to stage 3 |
| — |
| 5,699 |
| (5,699) |
| — |
| 703 |
| 10,004 |
| (10,707) |
| — |
| — |
- Increases due to change in credit risk |
| (608) |
| (6,296) |
| (2,259) |
| (9,163) |
| (3,869) |
| (21,114) |
| (36,080) |
| (61,063) |
| (70,226) |
- Decreases due to change in credit risk |
| — |
| 501 |
| 3,395 |
| 3,896 |
| 22,859 |
| 15,259 |
| 6,653 |
| 44,771 |
| 48,667 |
- Charge-offs |
| — |
| — |
| 499 |
| 499 |
| 1 |
| 10 |
| 35,233 |
| 35,244 |
| 35,743 |
- Changes due to modifications that did not result in derecognition |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
New financial assets originated or purchased |
| (16) |
| (4,199) |
| (125) |
| (4,340) |
| (24,514) |
| (26,720) |
| (3,254) |
| (54,488) |
| (58,828) |
Financial assets that have been derecognized |
| 2 |
| 3,604 |
| 1,039 |
| 4,645 |
| 19,781 |
| 33,231 |
| 125,214 |
| 178,226 |
| 182,871 |
Net transfer (from) to group and individually assessed |
| (284) |
| 6,139 |
| 107,017 |
| 112,872 |
| 284 |
| (6,139) |
| (107,017) |
| (112,872) |
| — |
Foreign exchange and other movements |
| — |
| 2,498 |
| 12,052 |
| 14,550 |
| 3,103 |
| 1,167 |
| (5,935) |
| (1,665) |
| 12,885 |
Ending balances as of June 30, 2021 |
| (952) |
| (58,334) |
| (139,199) |
| (198,485) |
| (73,091) |
| (123,472) |
| (201,457) |
| (398,020) |
| (596,505) |
| | | | | | | | | | | | | | | | | | |
|
| 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, 2020 |
| — |
| (42,000) |
| (151,135) |
| (193,135) |
| (73,036) |
| (109,671) |
| (169,357) |
| (352,064) |
| (545,199) |
Changes in the allowances |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
| |
- Net transfer stage 1 |
| — |
| — |
| — |
| — |
| (10,902) | | 9,080 | | 1,822 |
| — |
| — |
- Net transfer stage 2 |
| 82 |
| (82) |
| — |
| — |
| 6,731 | | (10,831) | | 4,100 |
| — |
| — |
- Net transfer stage 3 |
| 63 |
| 9,055 |
| (9,118) |
| — |
| 797 | | 15,934 | | (16,731) |
| — |
| — |
- Increases due to change in credit risk |
| | | (8,381) | | (43,940) |
| (52,321) |
| (18,554) | | (33,761) | | (102,904) |
| (155,219) |
| (207,540) |
- Decreases due to change in credit risk |
| | | 4,761 | | 2,088 |
| 6,849 |
| 18,779 | | 12,941 | | 4,913 |
| 36,633 |
| 43,482 |
- Charge-offs |
| — |
| — |
| 198 |
| 198 |
| 72 | | 305 | | 86,507 |
| 86,884 |
| 87,082 |
- Changes due to modifications that did not result in derecognition |
| — |
| — |
| — |
| — |
| — | | — | | (869) |
| (869) |
| (869) |
New financial assets originated or purchased |
| (46) |
| (12,567) |
| (104,044) |
| (116,657) |
| (43,530) | | (57,865) | | (73,813) |
| (175,208) |
| (291,865) |
Financial assets that have been derecognized |
| 500 |
| 4,873 |
| 61,022 |
| 66,395 |
| 30,039 | | 27,096 | | 38,989 |
| 96,124 |
| 162,519 |
Net transfer (from) group to individually assessed |
| — | | 3,009 | | (46,698) |
| (43,689) |
| — | | (3,009) | | 46,698 |
| 43,689 |
| — |
Foreign exchange and other movements |
| (645) |
| (24,948) |
| 36,509 | | 10,916 |
| 1,524 | | 23,238 | | (30,905) |
| (6,143) |
| 4,773 |
Ending balances as of December 31, 2020 |
| (46) |
| (66,280) |
| (255,118) |
| (321,444) |
| (88,080) |
| (126,543) |
| (211,550) |
| (426,173) |
| (747,617) |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-36 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - 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, 2021 |
| (10,732) |
| (48,514) |
| (14,219) |
| (73,465) |
| (73,465) |
Changes in the allowances |
| | | | | |
| |
| |
- Net transfer stage 1 |
| (4,969) |
| 4,911 |
| 58 |
| — |
| — |
- Net transfer stage 2 |
| 1,348 |
| (3,394) |
| 2,046 |
| — |
| — |
- Net transfer stage 3 |
| 24 |
| 2,364 |
| (2,388) |
| — |
| — |
- Increases due to change in credit risk |
| (911) |
| (7,739) |
| (1,147) |
| (9,797) |
| (9,797) |
- Decreases due to change in credit risk |
| 5,290 |
| 5,196 |
| 1,044 |
| 11,530 |
| 11,530 |
- Charge-offs |
| — |
| 8 |
| 1,530 |
| 1,538 |
| 1,538 |
- Changes due to modifications that did not result in derecognition |
| — |
| — |
| — |
| — |
| — |
New financial assets originated or purchased |
| (2,963) |
| (11,708) |
| (2,782) |
| (17,453) |
| (17,453) |
Financial assets that have been derecognized |
| 2,098 |
| 13,028 |
| 3,388 |
| 18,514 |
| 18,514 |
Changes in models/risk parameters |
| — |
| — |
| — |
| — |
| — |
Foreign exchange and other movements |
| 217 |
| 401 |
| 323 |
| 941 |
| 941 |
Ending balances as of June 30, 2021 |
| (10,598) |
| (45,447) |
| (12,147) |
| (68,192) |
| (68,192) |
| | | | | | | | | | |
| | Group assessed | | | ||||||
| | Stage 1 | | Stage 2 | | Stage 3 | | | | |
Mortgage |
| 12-Month ECL |
| Lifetime ECL |
| Lifetime ECL |
| Subtotals |
| Totals |
Opening balances as of January 1, 2020 |
| (5,680) |
| (49,072) |
| (23,749) |
| (78,501) |
| (78,501) |
Changes in the allowances |
|
|
|
|
|
|
| |
|
|
- Net transfer stage 1 |
| (8,391) | | 7,706 | | 685 |
| — |
| — |
- Net transfer stage 2 |
| 1,243 | | (8,157) | | 6,914 |
| — |
| — |
- Net transfer stage 3 |
| 29 | | 3,576 | | (3,605) |
| — |
| — |
- Increases due to change in credit risk |
| (3,313) | | (8,190) | | (3,238) |
| (14,741) |
| (14,741) |
- Decreases due to change in credit risk |
| 6,499 | | 4,572 | | 2,870 |
| 13,941 |
| 13,941 |
- Charge-offs |
| — | | 9 | | 2,700 |
| 2,709 |
| 2,709 |
- Changes due to modifications that did not result in derecognition |
| — | | — | | 1,344 |
| 1,344 |
| 1,344 |
New financial assets originated or purchased |
| (2,010) | | (1,626) | | 5,948 |
| 2,312 |
| 2,312 |
Financial assets that have been derecognized |
| 557 | | 2,561 | | 2,198 |
| 5,316 |
| 5,316 |
Foreign exchange and other movements |
| 334 | | 107 | | (6,286) |
| (5,845) |
| (5,845) |
|
| |
| |
| |
| — |
| — |
Ending balances as of December 31, 2020 |
| (10,732) |
| (48,514) |
| (14,219) |
| (73,465) |
| (73,465) |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-37 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 5 - 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, 2021 |
| (66,649) |
| (105,353) |
| (48,789) |
| (220,791) |
| (220,791) |
Changes in the allowances |
| | | | | |
| |
| |
- Net transfer stage 1 |
| (25,644) |
| 23,355 |
| 2,289 |
| — | | — |
- Net transfer stage 2 |
| 10,668 |
| (17,690) |
| 7,022 |
| — |
| — |
- Net transfer stage 3 |
| 1,509 |
| 11,711 |
| (13,220) |
| — |
| — |
- Increases due to change in credit risk |
| (6,905) |
| (25,686) |
| (26,873) |
| (59,464) |
| (59,464) |
- Decreases due to change in credit risk |
| 28,276 |
| 16,418 |
| 311 |
| 45,005 |
| 45,005 |
- Charge-offs |
| 455 |
| 7,002 |
| 42,901 |
| 50,358 |
| 50,358 |
- Changes due to modifications that did not result in derecognition |
| — |
| — |
| — |
| — |
| — |
New financial assets originated or purchased |
| (20,497) |
| (13,073) |
| (12,489) |
| (46,059) |
| (46,059) |
Financial assets that have been derecognized |
| 9,608 |
| 15,436 |
| 4,987 |
| 30,031 |
| 30,031 |
| | — |
| — |
| — | | | | |
Foreign exchange and other movements |
| 1485 |
| 2392 |
| 803 |
| 4,680 |
| 4,680 |
Ending balances as of June 30, 2021 |
| (67,694) |
| (85,488) | | (43,058) |
| (196,240) | | (196,240) |
| | | | | | | | | | |
| | Group assessed | | | ||||||
| | Stage 1 | | Stage 2 | | Stage 3 | | | | |
Consumer |
| 12-Month ECL |
| Lifetime ECL |
| Lifetime ECL |
| Subtotals |
| Totals |
Opening balances as of January 1, 2020 |
| (66,692) |
| (113,507) |
| (76,218) |
| (256,417) |
| (256,417) |
Changes in the allowances |
| | | | | |
| |
| |
- Net transfer stage 1 |
| (30,022) |
| 22,886 |
| 7,136 |
| — |
| — |
- Net transfer stage 2 |
| 11,428 |
| (17,019) |
| 5,591 |
| — |
| — |
- Net transfer stage 3 |
| 1,454 |
| 8,894 |
| (10,348) |
| — |
| — |
- Increases due to change in credit risk |
| (6,852) | | (22,545) | | (32,463) |
| (61,860) |
| (61,860) |
- Decreases due to change in credit risk |
| 34,718 | | 19,742 | | 732 |
| 55,192 |
| 55,192 |
- Charge-offs |
| 1,318 | | 14,393 | | 69,054 |
| 84,765 |
| 84,765 |
- Changes due to modifications that did not result in derecognition |
| — | | — | | 314 |
| 314 |
| 314 |
New financial assets originated or purchased |
| (34,531) | | (59,336) | | (31,345) |
| (125,212) |
| (125,212) |
Financial assets that have been derecognized |
| 19,842 | | 38,879 | | 17,857 |
| 76,578 |
| 76,578 |
Foreign exchange and other movements |
| 2,688 | | 2,260 | | 901 |
| 5,849 |
| 5,849 |
Ending balances as of December 31, 2020 |
| (66,649) |
| (105,353) |
| (48,789) |
| (220,791) |
| (220,791) |
c) | Portfolio sales |
During the six-month period ended 30, 2021, the Bank sold part of its current and written-off loan portfolios, recognizing a profit of Ch$1,939 million and Ch$3,290 million, respectively. During the period ended on June 30, 2020, no sales of this type were performed.
Additionally, during the six month period ended June 30, 2021, the Bank sold part of its Government guaranteed students loan portfolio (Law No. 20,027) which generated a loss, net of provisions for loan losses, of Ch$57 million (a loss of Ch$458 million as of June 31, 2020). The provisions for loan losses of the sold portfolio amount to Ch$444 million.
These effects are included in "Net income (expense) from financial operations" in the Condensed Consolidated Statement of Income for the period (see Note 14).
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-38 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 6 – Investment instruments
a) | Investment instruments at fair value through other comprehensive income and at amortized cost |
As of June 30, 2021 and December 31, 2020, the detail of financial instruments measured at FVOCI and at amortized cost is as follows:
| | | | | | | | | | | | |
| | As of June 30, 2021 | | As of December 31, 2020 | ||||||||
| | At FVOCI | | At amortized cost | | Totals | | At FVOCI | | At amortized cost | | Totals |
| | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ |
Debt instruments | | 3,903,774 | | 173,227 | | 4,077,001 | | 3,960,104 | | 111,542 | | 4,071,646 |
Equity instruments | | 10,424 | | — | | 10,424 | | 10,795 | | — | | 10,795 |
Totals | | 3,914,198 | | 173,227 | | 4,087,425 | | 3,970,899 | | 111,542 | | 4,082,441 |
b) | Debt instruments at fair value through other comprehensive income and at amortized cost |
As of June 30,2021 and December 31, 2020, the detail of financial instruments measured at FVOCI and at amortized cost is as follows:
| | | | | | | | | | | | |
| | As of June 30, 2021 | | As of December 31, 2020 | ||||||||
| | At FVOCI | | At amortized cost | | Totals | | At FVOCI | | At amortized cost | | Totals |
| | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ |
Securities quoted in active markets | |
|
|
|
|
| | | | | | |
Chilean Central Bank and Government securities | |
|
|
|
|
| | | | | | |
Chilean Central Bank instruments | | 1,493,570 | | — |
| 1,493,570 | | 1,170,841 |
| — | | 1,170,841 |
Chilean Treasury bonds | | 1,638,745 | | — |
| 1,638,745 | | 1,783,765 |
| — | | 1,783,765 |
Other goverment securities | | 116,507 | | — |
| 116,507 | | 101,573 |
| — | | 101,573 |
Other local institutions financial instruments | | | | |
| | |
|
|
| | |
Time deposits in local banks | | 8,908 | | — |
| 8,908 | | 14,856 |
| — | | 14,856 |
Mortgage finance bonds | | 24 | | — |
| 24 | | 30 |
| — | | 30 |
Chilean financial institutions bonds | | 115,012 | | — |
| 115,012 | | 277,163 |
| — | | 277,163 |
Other local financial investments | | 19,105 | | — |
| 19,105 | | — |
| — | | — |
Foreign institutions financial instruments | | | | |
| | |
|
|
| | |
Foreign Governments and Central Banks financial instruments | | 334,591 | | — |
| 334,591 | | 217,185 |
| — | | 217,185 |
Other foreign financial instruments | | 177,312 | | 173,227 |
| 350,539 | | 394,691 |
| 111,542 | | 506,233 |
Investments not quoted in active markets |
| | | |
| — |
|
|
|
|
| — |
Corporate bonds | | — | | — |
| — | | — |
| — | | — |
Totals |
| 3,903,774 |
| 173,227 |
| 4,077,001 |
| 3,960,104 |
| 111,542 |
| 4,071,646 |
As of June 30, 2021 this total includes MCh$1,178,771, included in “Cash and cash equivalents” which corresponds to those financial instruments with maturities that do not exceed three months from their dates of acquisition.
As of June 30, 2021, the portfolio at FVTOCI includes an unrealized loss of MCh$83,917, presented in Equity as valuation accounts, distributed among a loss of MCh$86,298 attributable to equity holders and a gain of MCh$2,381 attributable to non-controlling interest.
As of June 30, 2021, the portfolio of financial instruments at FVTOCI includes financial instruments for an amount of Ch$837,869 million (Ch$319,213 million as of December 31,2020) pledged as collateral to the Central Bank of Chile (BCCh) in order to access the new Conditional Funding Facility (FCIC). This program was implemented by the BCCh as a measure to support liquidity and credit access as a response to the financial needs generated by the Covid-19 pandemic. Further disclosures on FCIC are included in Note 9.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-39 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 6 – Investment instruments, continued
c) | Impairment of debt instruments at fair value through other comprehensive income and at amortized cost |
As of June, 2021 and December 31, 2020, the portfolios of debt securities classified as investment instruments at fair value through other comprehensive income includes impairment movements as summarized below:
| | | | | | | | |
| | Financial instruments at FVOCI | | | ||||
| | Stage 1 | | Stage 2 | | Stage 3 | | |
|
| 12-Month ECL |
| Lifetime ECL |
| Lifetime ECL |
| Totals |
Opening balances as of January 1, 2021 |
| (911) |
| — |
| — |
| (911) |
Changes in the allowances |
|
|
|
|
|
|
| |
- Net transfer stage 1 |
| — |
| — |
| — |
| — |
- Net transfer stage 2 |
| — |
| — |
| — |
| — |
- Net transfer stage 3 |
| — |
| — |
| — |
| — |
- Increases due to change in credit risk |
| — |
| — |
| — |
| — |
- Decreases due to change in credit risk |
| 658 |
| — |
| — |
| 658 |
- Charge-Offs |
| — |
| — |
| — |
| — |
- Changes due to modifications that did not result in derecognition |
| — |
| — |
| — |
| — |
New financial assets originated or purchased |
| — |
| — |
| — |
| — |
Financial assets that have been derecognized |
| — |
| — |
| — |
| — |
Changes in models/risk parameters |
| — |
| — |
| — |
| — |
Foreign exchange and other movements |
| — |
| — |
| — |
| — |
Ending balances as of June 30, 2021 |
| (253) |
| — |
| — |
| (253) |
| | | | | | | | |
| | Financial instruments at FVOCI | | | ||||
| | Stage 1 | | Stage 2 | | Stage 3 | | |
|
| 12-Month ECL |
| Lifetime ECL |
| Lifetime ECL |
| Totals |
Opening balances as of January 1, 2020 |
| (2,310) |
| — |
| — |
| (2,310) |
Changes in the allowances |
|
|
|
|
|
|
| |
- Net transfer stage 1 |
| — |
| — |
| — |
| — |
- Net transfer stage 2 |
| — |
| — |
| — |
| — |
- Net transfer stage 3 |
| — |
| — |
| — |
| — |
- Increases due to change in credit risk |
| (210) |
| — |
| — |
| (210) |
- Decreases due to change in credit risk |
| 1,127 |
| — |
| — |
| 1,127 |
- Charge-Offs |
| — |
| — |
| — |
| — |
- Changes due to modifications that did not result in derecognition |
| — |
| — |
| — |
| — |
New financial assets originated or purchased |
| (40) |
| — |
| — |
| (40) |
Financial assets that have been derecognized |
| 522 |
| — |
| — |
| 522 |
Changes in models/risk parameters |
| — |
| — |
| — |
| — |
Foreign exchange and other movements |
| — |
| — |
| — |
| — |
Ending balances as of December 31, 2020 | | (911) | | — | | — | | (911) |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-40 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 6 – Investment instruments, continued
As of June, 2021 and December 31, 2020 the portfolios of investment instruments at amortized cost includes impairment movements as summarized below:
| | | | �� | | | | |
| | Financial instruments at Amortized cost | | | ||||
| | Stage 1 | | Stage 2 | | Stage 3 | | |
|
| 12-Month ECL |
| Lifetime ECL |
| Lifetime ECL |
| Totals |
Opening balances as of January 1, 2021 |
| (101) |
| — |
| — |
| (101) |
Changes in the allowances |
|
|
|
|
|
|
| |
- Net transfer stage 1 |
| — |
| — |
| — |
| — |
- Net transfer stage 2 |
| — |
| — |
| — |
| — |
- Net transfer stage 3 |
| — |
| — |
| — |
| — |
- Increases due to change in credit risk |
| (6) |
| — |
| — |
| (6) |
- Decreases due to change in credit risk |
| 102 |
| — |
| — |
| 102 |
- Charge-offs |
| — |
| — |
| — |
| — |
- Changes due to modifications that did not result in derecognition |
| — |
| — |
| — |
| — |
New financial assets originated or purchased |
| — |
| — |
| — |
| — |
Financial assets that have been derecognized |
| — |
| — |
| — |
| — |
Changes in models/risk parameters |
| — |
| — |
| — |
| — |
Foreign exchange and other movements |
| — |
| — |
| — |
| — |
Ending balances as of June 30, 2021 |
| (5) |
| — | | — |
| (5) |
| | | | | | | | |
|
| Financial instruments at Amortized cost | | | ||||
| | Stage 1 | | Stage 2 | | Stage 3 | | |
|
| 12-Month ECL |
| Lifetime ECL |
| Lifetime ECL |
| Totals |
Opening balances as of January 1, 2020 |
| (24) |
| — |
| — |
| (24) |
Changes in the allowances |
|
|
|
|
|
|
|
|
- Net transfer stage 1 |
| — |
| — |
| — |
| — |
- Net transfer stage 2 |
| — |
| — |
| — |
| — |
- Net transfer stage 3 |
| — |
| — |
| — |
| — |
- Increases due to change in credit risk |
| — |
| — |
| — |
| — |
- Decreases due to change in credit risk |
| — |
| — |
| — |
| — |
- Charge-offs |
| — |
| — |
| — |
| — |
- Changes due to modifications that did not result in derecognition |
| — |
| — |
| — |
| — |
New financial assets originated or purchased |
| (86) |
| — |
| — |
| (86) |
Financial assets that have been derecognized |
| 9 |
| — |
| — |
| 9 |
Changes in models/risk parameters |
| — |
| — |
| — |
| — |
Foreign exchange and other movements |
| — |
| — |
| — |
| — |
Ending balances as of December 31, 2020 |
| (101) |
| — | | — |
| (101) |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-41 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 6 – Investment instruments, continued
d) | Unrealized gains and losses of the portfolio at FVTOCI |
Unrealized gains and losses of the FVTOCI portfolio as of as of June, 2021 and December 31, 2020 are detailed as follows:
| | | | | | | | | | | | | | | | |
| | As of June 30, 2021 |
| As of December 31, 2020 | ||||||||||||
| | Acquisition | | Unrealized | | Fair | | Acquisition | | Unrealized | | Fair | ||||
|
| cost |
| Gain |
| Losses |
| value |
| cost |
| Gain |
| Losses |
| value |
| | | | | | | | | | | | | | | | |
Securities quoted in active markets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chilean Central Bank and Government securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chilean Central Bank instruments |
| 1,494,132 | | 29 | | (591) |
| 1,493,570 |
| 1,171,350 |
| 29 |
| (538) |
| 1,170,841 |
Chilean Treasury bonds |
| 1,729,487 | | 164 | | (90,906) |
| 1,638,745 |
| 1,781,626 |
| 8,989 |
| (6,850) |
| 1,783,765 |
Other government securities |
| 114,329 | | 2,400 | | (222) |
| 116,507 |
| 96,924 |
| 4,409 |
| 240 |
| 101,573 |
Other local institutions financial instruments |
| | | | | |
|
|
|
|
|
|
|
|
|
|
Time deposits in local banks |
| 8,885 | | 23 | | — |
| 8,908 |
| 14,622 |
| 252 |
| (18) |
| 14,856 |
Mortgage finance bonds |
| 24 | | — | | — |
| 24 |
| 29 |
| 1 |
| — |
| 30 |
Chilean financial institutions bonds |
| 115,412 | | 662 | | (1,062) |
| 115,012 |
| 273,028 |
| 4,135 |
| — |
| 277,163 |
Other local financial instruments | | 18,261 | | 879 | | (35) |
| 19,105 | | — | | — | | — | | — |
Foreign institutions financial instruments |
| | | | | | | |
|
|
|
|
|
|
|
|
Foreign Governments and Central Banks financial instruments |
| 329,314 | | 15,153 | | (9,876) |
| 334,591 |
| 193,389 |
| 23,848 |
| (52) |
| 217,185 |
Other foreign financial instruments |
| 177,855 | | 582 | | (1,125) |
| 177,312 |
| 391,058 | | 3,724 |
| (91) |
| 394,691 |
Investments not quoted in active markets |
| | | | | |
|
|
|
|
|
|
|
|
|
|
Corporate bonds |
| — | | — | | |
| — |
| — |
| — |
| — |
| — |
Equity instruments | | | | | | | | | | | | | | | | |
Unlisted securities | | 7,643 | | 3,036 | | (255) | | 10,424 | | 6,466 | | 4,329 | | — | | 10,795 |
Totals |
| 3,995,342 |
| 22,928 |
| (104,072) |
| 3,914,198 |
| 3,928,492 |
| 49,716 |
| (7,309) |
| 3,970,899 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-42 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 6 – Investment instruments, continued
e) | Equity instruments at fair value through other comprehensive income |
As of June, 2021 and December 31, 2020 the portfolio of equity investment instruments at fair value through comprehensive income are detail as follows:
| | | | |
|
| 2021 |
| 2020 |
Unlisted securities | | MCh$ | | MCh$ |
Domestic entities |
|
|
|
|
Stock Exchanges |
| 4,068 |
| 4,616 |
| | | | |
Foreign entities |
| |
|
|
A.C.H Colombia |
| 1,205 |
| 1,173 |
Redeban Multicolor S.A. |
| 770 |
| 717 |
Cámara de Compensación Divisas de Colombia S.A. (*) |
| — |
| 309 |
Cámara de Riesgo Central de Contraparte S.A. (*) |
| 338 |
| — |
Bolsa de Valores de Colombia |
| 969 |
| 969 |
Credibanco |
| 3,072 |
| 2,990 |
Others |
| 2 |
| 21 |
Totals |
| 10,424 |
| 10,795 |
(*) During 2021 Cámara de Compensación Divisas de Colombia S.A. merged with Cámara de Riesgo Central de Contraparte S.A. where by the bank received a participation on Cámara de Riesgo Central de Contraparte S.A.as a result of the transaction..
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-43 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 6 – Investment instruments, continued
Amounts recognized in profit or loss
For the six-month periods ended June 30, 2021 and 2020, the following gains and losses were recognized in profit or loss:
| | | | |
|
| 2021 |
| 2020 |
| | MCh$ | | MCh$ |
Dividends from equity investments held at FVOCI recognized in profit or loss |
| 1,338 |
| 1,185 |
Related to investments derecognized during the period |
| 757 |
| 51,517 |
Related to investments held at the end of the reporting period |
| — |
| — |
Totals |
| 2,095 |
| 52,702 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-44 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 7 – Investments in Associates
In 2021, the Bank gained significant influence over Combanc S.A. and Imerc OTC S.A. Management concluded that, by the election of one of the Board members for each one on these entities, in addition to other factors, such as material transactions between the Bank and these entities, exchange of essential technical information with its investees, the Bank has the power to participate in the financial and operating policy decisions of these investees, but does not control them. Consequently, the equity method has been applied.
a) | As of June 30, 2021 and December 31, 2020, investments in associates are as follows: |
| | | | | | | | | | | | |
| | | Investment | | | | Investment | |||||
| Entity's share | | Investment amount | | Income | | Entity's share | | Investment amount | | Income | |
| as of June 30, | | as of June 30, | | as of June 30, | | as of December 31, | | as of December 31, | | as of December 31, | |
Entity | 2021 |
| 2021 |
| 2021 | | 2020 |
| 2020 |
| 2020 |
|
| % | | MM$ |
| MM$ | | % | | MM$ |
| MM$ |
|
Nexus S.A | 14.8148 | % | 1,580 |
| 301 | | 14.8148 | % | 1,278 |
| (1,341) |
|
Transbank S.A (*) | 8.7188 | % | 5,044 | | (1,698) | | 8.7188 | % | 5,871 | | (1,453) | |
Combanc S.A.(**) | 8.1848 | % | 541 | | 234 | | — | | — | | — | |
Imerc OTC S.A(**) | 8.6624 | % | 1,053 | | 41 | | — | | — | | — | |
Totals | | | 8,218 |
| (1,122) | | | | 7,149 |
| (2,794) |
|
(*) On April 22, 2021 the extraordinary shareholders meeting of Transbank S.A agreed to increase its capital in Ch$30,000 million. The Bank subscribed and paid 4,443,856 shares for an amount of Ch$872 million, with which it maintained its participation percentage.
(**)As of May 2021, these investment are recognized by the equity method.
b) | Summarized financial information of associates as of June 30, 2021 and December 31, 2020: |
| | | | | | | | | | | | | | | | |
| As of June 30, | | As of December 31, | | ||||||||||||
| 2021 | | 2020 |
| ||||||||||||
| Assets |
| Liabilities |
| Equity | | Loss | | Assets | | Liabilities |
| Equity |
| Income |
|
| MCh$ |
| MCh$ |
| MCh$ | | MCh$ | | MCh$ | | MCh$ |
| MCh$ |
| MCh$ |
|
Nexus S.A | 19,695 | | 9,066 | | 8,404 | | 2,225 | | 19,210 | | 10,585 |
| 17,676 |
| (9,051) |
|
Transbank S.A | 1,140,290 | | 1,085,897 | | 74,836 | | (20,443) | | 1,006,137 | | 938,800 | | 84,007 | | (16,670) | |
Combanc S.A. | 7,373 | | 820 | | 3,061 | | 3,492 | | — | | — | | — | | — | |
Imerc OTC S.A | 30,156 | | 18,140 | | 12,238 | | (222) | | — | | — | | — | | — | |
Totals | 1,197,514 |
| 1,113,923 |
| 98,539 | | (14,948) | | 1,025,347 | | 949,385 |
| 101,683 |
| (25,721) |
|
c) | During the period ended June 30, 2021 and for the year ended December 31, 2020, the Bank received dividends from its associates, as detailed below: |
| | | |
| 2021 | | 2020 |
| MCh$ | | MCh$ |
Dividends received | 1,338 | | 1,185 |
Totals | 1,338 | | 1,185 |
d) | Investment in associates movements for the periods ended June 30, 2021 and the year ended on December 31,2020 are as follows: |
| | | |
| 2021 | | 2020 |
| MCh$ | | MCh$ |
Balances as of January 1, | 7,149 | | 9,605 |
Investment acquisition | — | | 338 |
Sale of investments | — | | — |
Initial application of the equity method (*) | 1,319 | | — |
Investment on Transbank (**) | 872 | | — |
Participation in income | (1,122) | | (2,794) |
Totals | 8,218 | | 7,149 |
(*) As indicated in a) above “significant influence” was gained in 2021, thus the equity method was initially applied that year.
(**) Refer to capital increase on Transbank as detailed on section a) .
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-45 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 8 - Current Taxes and Deferred Taxes
a) | Effective tax rate reconciliation |
The following table reconciles the statutory income tax rate to the effective rate applied to determine the Bank’s income tax expense for the six month period ended on June 30, 2021 and 2020.
The statutory tax rates of the countries where consolidated subsidiaries are located are:
| | | | | |
|
| 2021 |
| 2020 |
|
| | Tax rates | | Tax rates |
|
Chile |
| 27% |
| 27% | |
Colombia |
| 34% | | 36% | |
USA |
| 24.1% |
| 25.3% | |
| | | | | | | | |
| | For the six months periods ended June, 2021 | ||||||
| | 2021 | | 2020 | ||||
| | Tax rate | | Amount | | Tax rate | | Amount |
|
| % |
| MCh$ |
| % |
| MCh$ |
Amount calculated by using the statutory rates | | 27.00 | | 57,096 |
| 27.00 | | (199,317) |
Effect of rates Colombia subsidiary (**) |
| 0.83 | | 1,764 |
| 1.28 | | (9,441) |
Equity price level restatement for tax purposes (***) |
| (9.68) | | (20,471) |
| 1.75 | | (12,883) |
Exchange differences due to investments in USA |
| 0.74 | | 1,566 |
| (0.13) | | 949 |
Effect of rates New York branch (**) |
| (0.24) | | (505) |
| (0.00) | | 10 |
Exchange differences due to investments in Colombia (****) |
| 3.85 | | 8,134 |
| (4.75) | | 35,075 |
Tax effect due to intangible assets impairment | | — | | — | | (25.44) | | 187,825 |
Permanent and other differences (*) |
| 0.30 | | (4,297) |
| (0.51) | | 3,789 |
Totals |
| 22.80 |
| 43,287 |
| (0.81) |
| 6,007 |
(*) This item contains the effects due to changes in the observed US dollar exchange rate in the valuation of the investment in the New York branch for tax purposes and other effects.
(**) These items reflect differences in tax rates of other jurisdictions, based on the Bank's consolidated result
(***) During the six-month period ended June 30, 2021, the inflation indexation adjustments over the Tax Equity was equal to 2.3% (1.4% in 2020).
(****) For tax purposes, investment in Colombia is measured in US dollars. The devaluation (appreciation) of the Chilean peso against the US dollar generates income (expenses) for tax purposes without a corresponding effect on the accounting results. The value presented here represents the income tax expense (income) due to the effect of the exchange rate on investment in Colombia. As part of its exchange rate risk management policy, the Bank has managed this exposure through instruments available in the market to protect it financially against the tax effect generated by the variation in the exchange rate. The effect of these instruments (which offsets the tax effect presented here) is recognized in the Net exchange profit (loss) line of the Consolidated Statement of Income for the year
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-46 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 9 - Contingencies, Commitments, and Responsibilities
a) Lawsuits and Legal Proceedings
Lawsuits against the Bank with provision
As of the date of issuance of these Condensed Consolidated Financial Statements, legal actions have been filed against the Bank and its subsidiaries involving its transactions in the ordinary course of business. They are mainly lawsuits pending against the Bank related to loans and other matters, most of which, according to the Bank’s Legal Services Divisions involved in the suits, present no risk of significant loss. Notwithstanding the above, provisions for MCh$159 and MCh$545 as of June, 2021 and December 31, 2020, respectively have been established in the Condensed Consolidated Financial Statements.
Other lawsuits against the Bank without provision
Other legal actions have been filed against the Bank and its subsidiaries involving transactions carried out in the ordinary course of business. The Bank’s maximum exposure for these lawsuits amounts to approximately MCh$25,362 as of June 30, 2021 and MCh$22,737 as of December 31, 2020. In Management’s opinion based on reports from the Legal Division as of June 30, 2021, considering the procedural status of these lawsuits, it is not possible at the moment to conclude whether they may result in significant losses not contemplated by the Bank in the Condensed Consolidated Financial Statements.
Itaú Corpbanca Colombia S.A.
The Bank and its subsidiaries are involved in civil, administrative and labor proceedings. The outstanding civil and administrative proceedings, them are related to banking transactions, and the remaining ones derive from the ownership of leased assets.
Such claims amount, in the aggregate, to MCh$34,709 as of June 30, 2021 (MCh$35,043 as of December, 2020). According to the evaluation of the expected results in each lawsuit the Bank has recorded a provision of MCh$96 as of June 30, 2020 (MCh$94 as of December 31, 2020).
b) Commitments
Transaction Agreement
On January 29, 2014, Inversiones Corp Group Interhold Limitada, Inversiones Saga Limitada ( both together “CorpGroup”), Itaú-Unibanco Holding S.A., Corpbanca, and Banco Itaú Chile, subscribed a contract called “Transaction Agreement”, in accordance to the contract, they agreed a strategic association of its operations in Chile and Colombia. This strategic association gave rise to the merger of Corpbanca and Banco Itaú Chile, which was renamed “Itaú Corpbanca” and took place on April 1, 2016
The Transaction Agreement (from January 2014 and its subsequent modifications) also contemplates that on January 28, 2022 Itaú Corpbanca will purchase from CorpGroup the 12.36% of shares in Itaú Corpbanca Colombia, equivalent to the participation that CorpGroup held (directly or through other entities) in said entity at the merger date, corresponding to 93,306,684 shares. The purchase price agreed will be US$3.5367 per share, amounting to US$329,997,749.30, plus interest from August 4, 2015 until the payment date at an annual interest rate equal to Libor plus 2.7% minus the sum of the aggregate amount of dividends paid by Itaú Corpbanca Colombia to CorpGroup for the corresponding shares. This agreement, as explicitly noted, is subject to the prior approvals from the regulators, as applicable, in Chile and abroad.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-47 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 9 - Contingencies, Commitments, and Responsibilities, continued
According to article 76 of the General Banking Law, investments in shares of banks established abroad are subject to the prior approval of the Superintendency of Banks and Financial Institutions in Chile (currently CMF), as well as the Central Bank of Chile (BCCH), which in turn is subject to compliance with the conditions set forth in article 78 of said legal corp.
Additionally, in the case of banks incorporated in Colombia, an eventual acquisition of shares in Itaú Corpbanca Colombia by Itaú Corpbanca is also subject to the prior authorization of the Financial Superintendency of Colombia (SFC).
Consequently, the aforementioned transaction must be confirmed only by the occurrence of one or more future and uncertain events that are not entirely under the control of the Bank.
Acquisition of the MCC entities
In accordance with the Transaction Agreement executed on January 29, 2014 between Inversiones Corp Group Interhold SpA, Inversiones Saga Limitada (these last two, together “CorpGroup”), Itaú Unibanco Holding S.A., Corpbanca and Banco Itaú Chile, subsequently modified on June 2, 2015 and January 20, 2017, hereinafter the “Transaction Agreement”, Itaú Unibanco Holding S.A. assumed the obligation to transfer to Itaú Corpbanca, and the latter the obligation to acquire, 100% of its shares in MCC Securities Inc., MCC Asesorías S.A., and MCC S.A. Corredores de Bolsa (herein “MCC entities”) in accordance with the terms agreed upon and subject to normal terms and conditions for this kind of transactions.
On May 28, 2019, the Board of Directors of Itaú Corpbanca approved to proceed with the acquisition of the MCC entities, in accordance with the provisions of the Transaction Agreement and in compliance with the provisions of Title XVI of Law No. 18,046 on Corporations.
The acquisition of the shares of the MCC entities by Itaú Corpbanca is subject to the corresponding regulatory approvals, including approval from the Commission for the Financial Market.
Acquisition of 20% ownership in Itaú Corredor de Seguros Colombia S.A.
On November 5, 2019, Itaú Corpbanca committed to acquire 20% of the shares that Helm LLC holds in Itaú Corredor de Seguros de Colombia S.A.
The acquisition of the shares of Itaú Corredor de Seguros de Colombia S.A. by Itaú Corpbanca, is subject to the corresponding regulatory approvals, including the approval from the Commission for the Financial Market.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-48 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 9 - Contingencies, Commitments, and Responsibilities, continued
c) | Contingent loans and provisions |
The following table contains the amounts for which the Bank and its subsidiaries are contractually obliged to grant loans together with the relevant allowances for loan losses:
| | | | |
| | As of June 30, | | As of December 31, |
| | 2021 | | 2020 |
|
| MCh$ |
| MCh$ |
Collateral and guarantees |
| 422,079 |
| 437,396 |
Confirmed foreign letters of credit |
| 2,348 |
| 2,207 |
Letters of credit issued |
| 266,712 |
| 136,561 |
Documented guarantees |
| 1,414,260 |
| 1,407,102 |
Available on demand credit lines |
| 4,014,489 |
| 2,656,219 |
Other credit commitments |
| 784,225 |
| 754,375 |
Totals |
| 6,904,113 |
| 5,393,860 |
d) Responsibilities
The Bank and its subsidiaries have the following responsibilities arising from its regular course of business:
| | | | |
| | As of June 30, | | As of December 31, |
| | 2021 | | 2020 |
|
| MCh$ |
| MCh$ |
Third party operations |
|
|
|
|
Collections | | 15,264 |
| 16,540 |
Transferred financial assets managed by the Bank | | 1,145,822 |
| 1,183,053 |
Third party funds under management | | — |
| — |
Subtotals | | 1,161,086 |
| 1,199,593 |
Custody of securities | | |
|
|
Securities held in custody | | 2,892,194 |
| 2,269,967 |
Securities held in custody deposited in other entities | | 172,898 |
| 259 |
Securities issued by the Bank held in custody | | 106,731 |
| 105,585 |
Subtotals | | 3,171,823 |
| 2,375,811 |
Totals | | 4,332,909 |
| 3,575,404 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-49 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 9 - Contingencies, Commitments, and Responsibilities, continued
e) Guarantees, Contingencies and other
Itaú Corpbanca
As a result of the financial needs generated by the Covid-19 pandemic, the Central Bank of Chile (BCCh) has implemented the new Conditional Funding Facility (FCIC) and the Liquidity Credit Line (LCL) as measures to support liquidity and credit access for the Chilean economy. The FCIC program is guaranteed by high credit quality loans and/or bonds issued by the BCCh. The FCIC program provides banks access to 4-year loans at the policy rate, with available funds size increasing as a function of additional loans and financial instruments pledged as collateral .This measure includes the possibility to substitute the financial instruments on which the collateral was initially pledged to the BCCh, if required.
As of June 30, 2021, the Bank has pledged loans to guarantee the access to the new Conditional Funding Facility (FCIC) provided by the BCCh. The principal of the loans amounts to MCh$1,946,822 (MCh$1,766,997 as of December 31,2020), while the credit quality of the loans varies between A1 and A4 according to our loans rating policy, which are from the highest quality. Additionally, the Bank has pledged as collateral, financial instruments from the FVTOCI portfolio for an amount of MCh$837,869 (MCh$319,213 as of December 31,2020).
Itaú Corredores de Seguros S.A.
In order to comply with Article 58, letter d) of the Chilean Decree with Force of Law (“DFL”) 251 of 1930, which states that, “Insurance brokers, in order to conduct business, must comply with the requirement of contracting insurance policies as determined by the Commission for the Financial Market (Ex- Superintendency of Securities and Insurance), in order to correctly and fully comply with the obligations arising from its activities and especially regarding damages that may be incurred by insured parties taking policies through the brokerage house,” the subsidiary has renewed the following insurance policies:
| | | | | | | | |
Entity |
| From |
| To |
| Amount (UF) |
| Beneficiary |
Consorcio Nacional de Seguros S.A. | | 04-15-2021 | | 04-14-2022 | | 60,000 & 500 | | Itaú Corredores de Seguros S.A. |
Itaú Corredores de Bolsa Limitada
In order to comply with articles 30 and 31 of Chilean Law 18,045, this subsidiary kept a bank guarantee certificate with the Chilean Electronic Stock Exchange and Santiago Stock Exchange, to ensure the correct and complete fulfillment of its obligations as stockbroker. The beneficiaries are the current or future creditors that the subsidiary has or will have derived from its transactions. The detail of the bank guarantee certificate is as follows:
| | | | | | | | |
Entity |
| From |
| To |
| Amount (UF) |
| Beneficiary |
Mapfre Compañía de Seguros S.A |
| 04-22-2020 |
| 04-22-2022 |
| 4,000 |
| Bolsa de Comercio de Santiago |
Itaú Corpbanca Chile |
| 04-22-2021 |
| 04-22-2022 |
| 16,000 |
| Bolsa Electrónica de Chile |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-50 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 9 - Contingencies, Commitments, and Responsibilities, continued
In addition, the Company has contracted a comprehensive insurance policy to provide for possible situations of operational fidelity. The detail of the comprehensive insurance policy is as follows:
| | | | | | | | |
Entity |
| From |
| To |
| Amount (UF) |
| Beneficiary |
Orión Seguros Generales S.A. | | 06-19-2021 | | 06-19-2022 | | 5,000 & 10,000 | | Bolsa Electrónica de Chile |
The Company pledged the shares of the Santiago Stock Exchange in favor of said company, to guarantee compliance with the obligations with respect to transactions carried out with other brokers. The amount amounts to MCh$2,843 as of June 30, 2021 (MCh$5,325 as of December 31, 2020).
The Broker is registered in the Registry of Portfolio Administrators since November 22, 2017, for which it maintains a guarantee ticket in Itaú Corpbanca with an expiration date of June 22, 2021, for an amount of UF10,000 as representative of the beneficiaries of the guarantee in articles 98 and 99 of Law No. 20,172, in order to guarantee the faithful and full compliance of the Portfolio Administration obligations.
There are guarantees for ThUS$100 equivalent to ThCh$73, to guarantee operations with foreign traders Pershing.
As of June 30, 2021, the Broker maintains in the Santiago Stock Exchange, cash and fixed income securities to guarantee operations in the Securities Clearing and Settlement House for MCh$4,817 (MCh$5,988 as of December 31, 2020).
Itaú Administradora General de Fondos S.A.
On April 9, 2020, Itaú Administradora General de Fondos S.A. contracted a new guarantee certificate of UF10,000 in favor of Fundación DUOC Pontificia Universidad Católica de Chile, to guarantee faithful compliance with Articles 12, 13 and 14 of Law No. 20,712 on Administration of Third Party Funds and Individual Portfolios, maturing on January 10, 2021. Itaú Corpbanca is the representative of its beneficiaries.
Below are the guarantee slips and beneficiaries that Corpbanca Administradora General de Fondos S.A. maintains in effect to date, which were required to comply with the obligations of portfolio management contracts, their committees, Funds, payment of labor and social obligations with the contractor’s workers
| | | | | | | | | | |
Entity |
| From |
| To |
| Amount (UF) |
| Amount (MCh$) |
| Beneficiary |
Banco Santander Chile |
| 06-02-2017 |
| 08-31-2021 |
| 15,000 |
| — |
| Corporación de Fomento de la Producción CORFO |
Banco Santander Chile | | 08-14-2017 | | 08-30-2021 | | 500 | | — | | Corporación de Fomento de la Producción CORFO |
Itaú Corpbanca |
| 07-02-2020 |
| 07-01-2021 |
| — |
| 50 |
| Ferrocarriles del Estado |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-51 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 10 - Equity
a) Movements in equity accounts and reserves (attributable to the equity holders of the Bank):
As of June 30, 2021 and 2020, the paid-in capital of the Bank is represented by common shares subscribed and paid, with no par value, and its motion presented below:
| | | | |
| | Common shares | ||
| | As of June | | As of June |
| | 2021 | | 2020 |
|
| (number) |
| (number) |
Issued as of January 1, | | 512,406,760,091 |
| 512,406,760,091 |
Issuance of paid shares |
| — |
| — |
Increase in share for Itaú-Corpbanca business combination |
| — |
| — |
Issuance of shares pending payment |
| — |
| — |
Repurchase of own shares |
| — |
| — |
Sale of own shares |
| — |
| — |
Issued |
| 512,406,760,091 |
| 512,406,760,091 |
● | Subscribed and paid shares |
As of June 30, 2021 and 2020, the Bank has a capital in the amount of MCh$1,862,826, consisting of 512,406,760,091 common shares subscribed and paid, with no par value.
● | Purchase and sale of own shares |
For the six month period ended June 30, 2021 and for the year ended on December 31, 2020, there were no transactions to buy and sell shares of own issuance.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-52 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 10 – Equity, continued
● | List of major shareholders |
The shareholders list as of June 30, 2021 and December 31, 2020, is as follows:
| | | | | | | | | |
| | Shares | |||||||
| | As of June | | As of December | | ||||
| | 2021 | | 2020 | | ||||
|
| Number of |
| Ownership |
| Number of |
| Ownership | |
Company name or shareholder name | | shares | | % | | shares | | % | |
Itaú Unibanco |
| 200,966,823,626 |
| 39.22 | % | 200,966,823,626 |
| 39.22 | % |
Itaú Unibanco Holding S.A. |
| 115,039,610,411 | | 22.45 | % | 115,039,610,411 | | 22.45 | % |
ITB Holding Brasil Participaçoes Ltda. |
| 62,567,655,359 | | 12.21 | % | 62,567,655,359 | | 12.21 | % |
CGB II SpA |
| 10,908,002,836 | | 2.13 | % | 10,908,002,836 | | 2.13 | % |
CGB III SpA |
| 1,800,000,000 | | 0.35 | % | 1,800,000,000 | | 0.35 | % |
Saga II SpA |
| 7,000,000,000 | | 1.37 | % | 7,000,000,000 | | 1.37 | % |
Saga III SpA |
| 3,651,555,020 | | 0.71 | % | 3,651,555,020 | | 0.71 | % |
| | | | | | | | | |
Saieh Family |
| 139,150,760,455 |
| 27.16 | % | 140,835,760,455 |
| 27.49 | % |
Corp Group Banking S.A. (1) |
| 134,442,850,073 | | 26.24 | % | 136,127,850,073 | | 26.57 | % |
Compañía Inmobiliaria y de Inversiones Saga SpA |
| 4,707,910,382 | | 0.92 | % | 4,707,910,382 | | 0.92 | % |
| | | | | | | | | |
International Finance Corporation |
| 17,017,909,711 | | 3.32 | % | 17,017,909,711 |
| 3.32 | % |
| | | | | | | | | |
Others |
| 155,271,266,299 |
| 30.30 | % | 153,586,266,299 |
| 29.97 | % |
Security Brokerage |
| 80,160,839,373 | | 15.64 | % | 80,382,817,848 | | 15.69 | % |
ADR holders and Foreign Inst. Investors |
| 33,941,032,598 | | 6.62 | % | 35,127,077,810 | | 6.86 | % |
Local institutional investors | | 28,283,082,100 | | 5.52 | % | 25,351,261,131 | | 4.95 | % |
Other minority shareholders |
| 12,886,312,228 | | 2.52 | % | 12,725,109,510 | | 2.47 | % |
Total |
| 512,406,760,091 |
| 100 | % | 512,406,760,091 |
| 100 | % |
(1) | As of June 30, 2021, includes 36,000,000 shares owned by Corp Group Banking S.A. held in custody. |
b) Dividends
At the Ordinary Meeting of the Shareholders of Itaú Corpbanca held on March 18, 2021 given the situation of loss as of December 31,2020, there was no distribution of profits. During the six month period ended on June 30, 2021 MCh$14 were paid, corresponding to dividends from prior periods.
At the Ordinary Meeting of the Shareholders of Itaú Corpbanca held on March 18, 2020, the shareholders agreed to distribute net income for MCh$127,065 representing 100% of the profits for 2019 (as filed with the CMF).
| | | | | | | | | | | | |
| | Income | | Allocated to | | | | | | | | |
| | attributable to | | reserves and | | | | | | | | Dividend per |
| | equity holders | | retained | | Allocated to | | Percentage | | | | share |
Years | | (*) | | earnings (*) | | dividends | | distributed | | Number of shares | | (in pesos) |
|
| MCh$ |
| MCh$ |
| MCh$ |
| % |
| |
| |
Year 2020 (Shareholders’ Meeting March 2021) |
| — |
| — |
| — |
| 0% |
| 512,406,760,091 |
| — |
Year 2019 (Shareholders’ Meeting March 2020) |
| 127,065 |
| — |
| 127,065 |
| 100% |
| 512,406,760,091 |
| 0.24798 |
(*) According to the Consolidated Financial Statements filed with the CMF.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-53 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 10 – Equity, continued
For the six month periods ended on June 30, 2021 and 2020, the basic earnings and diluted earnings are as follows:
| | | | | | | | |
| | For the six month periods ended on June 30, | ||||||
| | 2021 | | 2020 | ||||
| | N° of Shares | | Amount | | N° of Shares | | Amount |
|
| Millions |
| MCh$ |
| Millions |
| MCh$ |
Basic earnings per share |
|
|
|
|
|
|
|
|
Net income (loss) for the period |
| — | | 166,334 |
| — | | (719,020) |
Weighted average number of outstanding shares |
| 512,407 | | — |
| 512,407 | | — |
Assumed convertible debt conversion |
| — | | — |
| — | | — |
Adjusted number of outstanding shares |
| 512,407 | | — |
| 512,407 | | — |
Basic earnings per share (Chilean pesos) |
| — | | 0.325 |
| — | | (1.403) |
Diluted earnings per share |
| | | |
| | | |
Net income (loss) for the period |
| — | | 166,334 |
| — | | (719,020) |
Weighted average number of outstanding shares |
| 512,407 | | — |
| 512,407 | | — |
Dilutive effects |
| | | |
| | | |
Assumed convertible debt conversion |
| — | | — |
| — | | — |
Conversion of common shares |
| — | | — |
| — | | — |
Options rights |
| — | | — |
| — | | — |
Adjusted number of shares |
| 512,407 | | — |
| 512,407 | | — |
Diluted earnings per share (Chilean pesos) |
| — | | 0.325 |
| — | | (1.403) |
For the period ended June 30, 2021, and 2020, there were no dilutive effects.
c) Valuation accounts
Financial instruments at FVTOCI: It includes accumulated net changes in the fair value of investments at FVTOCI for the six month period ended on June 30, 2021, and for the year ended on December 31, 2020.
Hedge of net investment in foreign operations: Corresponds to adjustments for hedges of net investments in foreign operations.
Cash flows hedge: It includes the effects of hedges on the Bank’s exposure to variations in cash flows that are attributed to a particular risk related to a recognized asset and/or liability, which may affect the results of the period.
Exchange differences on investments in Colombia and New York branch: It includes the effects of converting the financial statements of the New York branch and Colombian subsidiaries, whose functional currencies are the US dollar and Colombian peso, respectively, to the presentation currency of Bank Itaú Corpbanca (Chilean peso).
Defined benefits obligations: This includes the effects of complying with IAS 19 “Employees Benefit”.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-54 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 10 – Equity, continued
The following are the equity effects and income taxes for the six month periods ended June 30, 2021 and 2020:
| | | | | | | | | | | | | | |
| | | | | | | | Exchange | | | | | | |
| | | | | | | | differences on | | | | | | |
| | | | | | Hedge of net | | investment in | | | | | | |
| | Debt | | | | investments in | | Colombia and | | Defined | | Equity | | |
| | instruments | | Cash flow | | foreign | | New York | | benefits | | instruments | | |
As of June 30, 2021 | | at FVTOCI |
| hedge |
| operations |
| branch |
| obligations | | at FVTOCI |
| Totals |
| | MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ | | MCh$ |
| MCh$ |
Other comprehensive income (loss) before income taxes | |
|
|
|
|
|
|
|
|
| | |
|
|
Opening balances as of January 1, 2021 | | 33,154 |
| (8,621) |
| 63,339 |
| (26,829) |
| (8,116) | | 1,660 |
| 54,587 |
Effects for the period | | (116,058) |
| 12,103 |
| (4,567) |
| (26,134) |
| 1,645 | | (71) |
| (133,082) |
Reclassifications due to the discontinuation of the net investment in Itaú Corpbanca Colombia hedge | | — |
| — |
| (60,847) |
| — |
| — | | — |
| (60,847) |
Ending balances as of June 30, 2021 | | (82,904) |
| 3,482 |
| (2,075) |
| (52,963) |
| (6,471) | | 1,589 |
| (139,342) |
| | | | | | | | | | | | | | |
Income taxes related to components of other comprehensive income (loss) | |
|
|
|
|
|
|
|
|
| | |
|
|
Opening balances as of January 1, 2021 | | (12,760) | | (2,067) | | (15,168) | | — | | 2,232 | | — |
| (27,763) |
Effects for the period | | 8,383 |
| (1,442) |
| 2,974 |
| — |
| (493) | | — |
| 9,422 |
Reclassifications due to the discontinuation of the net investment in Itaú Corpbanca Colombia hedge | | — | | — | | 16,686 | | — | | — | | — | | 16,686 |
Ending balances as of June 30, 2021 | | (4,377) |
| (3,509) |
| 4,492 |
| — |
| 1,739 | | — |
| (1,655) |
Net balances as of June 30, 2021 | | (87,281) |
| (27) |
| 2,417 |
| (52,963) |
| (4,732) | | 1,589 |
| (140,997) |
| | | | | | | | | | | | | | |
| | | | | | | | Exchange | | | | | | |
| | | | | | | | differences on | | | | | | |
| | | | | | Hedge of net | | investment in | | | | | | |
| | Debt | | | | investments | | Colombia and | | Defined | | Equity | | |
| | instruments | | Cash flow | | in foreign | | New York | | benefits | | instruments | | |
As of June 30, 2020 | | at FVTOCI |
| hedge |
| operations |
| branch |
| obligations | | at FVTOCI |
| Totals |
| | MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ | | MCh$ |
| MCh$ |
Other comprehensive income (loss) before income taxes | |
| |
| |
| |
| |
| | | |
|
Opening balances as of January 1, 2020 | | 37,484 |
| (822) |
| (17,383) |
| 37,328 |
| (6,484) | | 1,739 |
| 51,862 |
Effects for the period | | 2,220 | | (12,484) | | 23,179 | | (9,388) | | (229) | | (410) |
| 2,888 |
Ending balances as of June 30, 2020 | | 39,704 |
| (13,306) |
| 5,796 |
| 27,940 |
| (6,713) | | 1,329 |
| 54,750 |
| | | | | | | | | | | | | | |
Income taxes related to components of other comprehensive income (loss) | |
|
|
|
|
|
|
|
|
| | |
|
|
Opening balances as of January 1, 2020 | | (12,705) | | (465) | | 6,627 | | — | | 1,798 | | — |
| (4,745) |
Effects for the period | | (2,325) | | (228) | | (6,258) | | — | | 22 | | — |
| (8,789) |
Ending balances as of June 30, 2020 | | (15,030) |
| (693) |
| 369 |
| — |
| 1,820 | | — |
| (13,534) |
Net balances as of June 30, 2020 | | 24,674 |
| (13,999) |
| 6,165 |
| 27,940 |
| (4,893) | | 1,329 |
| 41,216 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-55 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 10 – Equity, continued
d) Reserves and retained earnings from previous years
In consideration of the loss situation as of December 31, 2020, the losses were absorbed at the opening of the current fiscal year with charge to Reserves. As a result of the absorption of losses, the “Retained earnings from prior years” and the “Reserves from earnings” were fully consumed and the “Other non-earnings reserves” decreased by Ch$320,240 million, amounting to Ch$424,598 million as of January 1, 2021.
e) Non-controlling interest
This corresponds to the net amount of equity in the consolidated subsidiaries attributable to capital that does not belong, directly or indirectly, to the Bank, including the part of profit for the period that is attributed to them. Non-controlling interest in the subsidiary’s equity and profit is detailed as follows:
| | | | | | | | | | | | | | | | | | | | | | |
As of June 30, 2021 | | | | | | | | Other Comprehensive Income | ||||||||||||||
| | | | | | | | | | | | Hedge of | | | | | | | | | | |
| | | | | | | | | | Exchange | | net | | | | | | | | | | |
| | | | | | | | Financial | | differences | | investment | | Cash | | Defined | | | | Total other | | Total |
| | Non- | | | | Net | | instruments at | | on | | in foreign | | flows | | benefits | | Deferred | | comprehensive | | comprehensive |
Subsidiaries | | controlling | | Equity | | income | | FVTOCI (1) |
| translation | | operations | | hedge | | obligations | | Tax | | income | | income |
| | % | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ |
| | | | | | | | | | | | | | | | | | | | | | |
Itaú Corredor de Seguro Colombia S.A. (1) | | 20.200 | % | 393 | | 13 | | — |
| — |
| — |
| — |
| — |
| — |
| — | | 13 |
Itaú Corpbanca Colombia S.A. and subsidiaries | | 12.900 | % | 68,068 | | 1,832 | | (2,932) |
| (552) |
| — |
| (484) |
| 244 |
| 1,253 |
| (2,471) |
| (639) |
Totals | | | | 68,461 | | 1,845 | | (2,932) |
| (552) |
| — |
| (484) |
| 244 |
| 1,253 |
| (2,471) |
| (626) |
(1) | Financial instruments at FVOCI include debt instruments for MCh$(2,921) and equity instruments MCh$(11) loss. |
| | | | | | | | | | | | | | | | | | | | | | | |
As of June 30, 2020 | | | | | | | | Other Comprehensive Income | ||||||||||||||
| | | | | | | | | | | | Hedge of | | | | | | | | | | |
| | | | | | | | | | Exchange | | net | | | | | | | | | | |
| | | | | | | | Financial | | differences | | investment | | Cash | | Defined | | | | Total other | | Total |
| | Non- | | | | Net | | instruments at | | on | | in foreign | | flows | | benefits | | Deferred | | comprehensive | | comprehensive |
Subsidiaries | | controlling | | Equity | | income | | FVTOCI (2) | | translation | | operations | | hedge | | obligations | | Tax | | income | | income |
| | % | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ |
| | | | | | | | | | | | | | | | | | | | | | |
Itaú Corredor de Seguro Colombia S.A. | | 20.200 | % | 389 | | (67) | | — |
| — |
| — |
| — |
| — |
| — |
| — | | (67) |
Itaú Corpbanca Colombia S.A. and subsidiaries (2) | | 12.900 | % | 77,432 | | (13,116) | | (4,314) |
| (2,113) |
| — |
| 1,183 |
| 1,836 |
| (33) |
| (3,441) |
| (16,557) |
Totals | | | | 77,821 | | (13,183) | | (4,314) | | (2,113) | | — | | 1,183 | | 1,836 | | (33) | | (3,441) | | (16,624) |
(2) | Financial instruments at FVOCI include debt instruments for MCh$(4,253) and equity instruments MCh$(61) loss. |
.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-56 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 10 – Equity, continued
The following table shows the non-controlling interest movements for the six month periods ended June 30, 2021, and 2020:
| | | | |
| | As of June | ||
| | 2021 | | 2020 |
|
| MCh$ |
| MCh$ |
Opening balances as of January 1, | | 69,087 | | 94,445 |
Increase participation in Colombia |
| — |
| — |
Comprehensive income |
| (626) |
| (16,624) |
Ending balances |
| 68,461 |
| 77,821 |
Details for the main subsidiary of Itaú Corpbanca with non-controlling interest are as follows:
| | | | | | | | | | | |
| | | | As of June 30, | | As of December 31, | | ||||
| | | | 2021 | | 2020 | | ||||
|
| |
| Group |
| Non-controlling |
| Group |
| Non-controlling | |
Entity Name |
| Country |
| participation |
| participation |
| participation |
| participation |
|
Itaú Corpbanca Colombia S.A. and subsidiaries | | Colombia | | 87.100 | % | 12.900 | % | 87.100 | % | 12.900 | % |
Summarized financial information for the main subsidiary with non-controlling interest, is as follows:
| | | | |
| | As of June 30, | | As of December 31, |
Summary Statements of Financial Position | | 2021 | | 2020 |
|
| MCh$ |
| MCh$ |
Current assets |
| 4,886,755 |
| 5,177,419 |
Current liabilities |
| (2,973,986) |
| (3,184,281) |
Net current assets (liabilities) |
| 1,912,769 |
| 1,993,138 |
| | | | |
Non-current assets |
| 810,433 |
| 856,927 |
Non-current liabilities |
| (2,195,868) |
| (2,286,951) |
Net non-current assets (liabilities) |
| (1,385,435) |
| (1,430,024) |
| | | | |
Total net assets (liabilities) |
| 527,334 |
| 563,114 |
| | | | |
Accumulated non-controlling interest | | 68,068 | | 68,683 |
| | | | |
| | For the six months periods ended June 30, | ||
Summary Income Statements |
| 2021 |
| 2020 |
| | MCh$ | | MCh$ |
Interest income and readjustments |
| 164,036 |
| 232,125 |
Income for the period |
| 11,542 |
| (72,964) |
Non-controlling interests income |
| 1,491 |
| (9,417) |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-57 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 10 – Equity, continued
| | | | |
| | For the six month periods ended June 30, | ||
Summary Cash Flows Statements | | 2021 | | 2020 |
|
| MCh$ |
| MCh$ |
| | | | |
Net cash flows provided by (used in) operating activities |
| (147,595) |
| (165,240) |
Net cash flows provided by (used in) investing activities |
| 109,378 |
| 122,454 |
Net cash flows provided by (used in) financing activities |
| 72,569 |
| 81,245 |
Net increase (decrease) in cash flows |
| 34,352 |
| 38,459 |
f) Consolidated comprehensive income for the six month period ended June 30, 2021 and 2020:
| | | | | | |
| | 2021 | ||||
| | Equity holders | | Non-controlling | | |
Concepts | | of the Bank | | interest | | Totals |
|
| MCh$ |
| MCh$ |
| MCh$ |
Income (loss) for the period |
| 166,334 | | 1,845 |
| 168,179 |
Other comprehensive income (loss) before income taxes |
| | | |
|
|
Debt instruments at fair value through other comprehensive income |
| (116,058) | | (2,921) |
| (118,979) |
Hedge of net investment in foreign operations |
| (4,567) | | — |
| (4,567) |
Cash flows hedge |
| 12,103 | | (484) |
| 11,619 |
Exchange differences |
| (26,134) | | (552) |
| (26,686) |
Changes in the fair value of equity investments at fair value through other comprehensive income |
| (71) | | (11) |
| (82) |
Defined benefits obligation | | 1,645 | | 244 | | 1,889 |
Subtotals |
| (133,082) |
| (3,724) |
| (136,806) |
Income taxes |
|
|
|
|
|
|
Debt instruments at fair value through other comprehensive income |
| 8,383 | | 925 |
| 9,308 |
Hedge of net investment in foreign operations |
| 2,974 | | — |
| 2,974 |
Cash flows hedge |
| (1,442) | | 401 |
| (1,041) |
Defined benefits obligation |
| (493) | | (73) |
| (566) |
Subtotals |
| 9,422 |
| 1,253 |
| 10,675 |
Other comprehensive loss for the period |
| (123,660) |
| (2,471) |
| (126,131) |
Comprehensive loss for the period |
| 42,674 |
| (626) |
| 42,048 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-58 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 10 – Equity, continued
| | | | | | |
| | 2020 | ||||
| | Equity holders | | Non-controlling | | |
Concepts | | of the Bank | | interest | | Totals |
|
| MCh$ |
| MCh$ |
| MCh$ |
Income (loss) for the period |
| (719,020) | | (13,183) |
| (732,203) |
Other comprehensive income (loss) before income taxes |
| | | |
|
|
Debt instruments at fair value through other comprehensive income |
| 2,220 | | (4,253) |
| (2,033) |
Net investment in foreign operations hedges |
| 23,179 | | — |
| 23,179 |
Cash flow hedges |
| (12,484) | | 1,183 |
| (11,301) |
Exchange differences |
| (9,388) | | (2,113) |
| (11,501) |
Changes in the fair value of equity investments at fair value through other comprehensive income | | (410) | | (61) |
| (471) |
Defined benefits obligations |
| (229) | | 1,836 | | 1,607 |
Subtotals |
| 2,888 |
| (3,408) |
| (520) |
Income taxes |
|
|
|
|
|
|
Debt instruments at fair value through other comprehensive income |
| (2,325) | | 1,644 |
| (681) |
Net investment in foreign operations hedges |
| (6,258) | | — |
| (6,258) |
Cash flows hedges |
| (228) | | (1,163) |
| (1,391) |
Defined benefits obligations |
| 22 | | (514) |
| (492) |
Subtotals |
| (8,789) |
| (33) |
| (8,822) |
Other comprehensive income (loss) for the period |
| (5,901) |
| (3,441) |
| (9,342) |
Comprehensive income (loss) for the period |
| (724,921) |
| (16,624) |
| (741,545) |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-59 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 11 - Interest Income and Interest Expense
This item comprises interest accrued in the period by all financial assets and liabilities, interest income and expenses, whose implicit or explicit performance is measured by applying the effective interest rate method, independently if these are measured at fair value, as well as the effects from accounting hedges, which are part of the interest income and expenses included in the Condensed Consolidated Statement of Income (Loss) for the period.
a) The composition of interest income and inflation-indexing for the six-month periods ended June 30, 2021, and 2020 is as follows:
| | | | | | | | | | | | |
| | For the six-month periods ended June 30, | ||||||||||
| | 2021 | | 2020 | ||||||||
|
| |
| Inflation |
| |
| |
| Inflation |
| |
| | Interest | | adjustments (1) | | Totals | | Interest | | adjustments (1) | | Totals |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
Investments under agreements to resell |
| 982 | | — |
| 982 |
| 1,982 | | — |
| 1,982 |
Interbank loans |
| 153 | | — |
| 153 |
| 1,102 | | — |
| 1,102 |
Commercial loans |
| 295,515 | | 99,633 |
| 395,148 |
| 414,026 | | 63,182 |
| 477,208 |
Mortgage loans |
| 92,661 | | 106,804 |
| 199,465 |
| 96,880 | | 60,970 |
| 157,850 |
Consumer loans |
| 146,919 | | 1,248 |
| 148,167 |
| 167,715 | | 81 |
| 167,796 |
Financial investments |
| 17,973 | | 16,899 |
| 34,872 |
| 38,655 | | 14,134 |
| 52,789 |
Other interest income |
| 2,998 | | 2,066 |
| 5,064 |
| 3,852 | | 711 |
| 4,563 |
Gain (loss) from accounting hedges (*) |
| 18,655 | | (52,821) |
| (34,166) |
| 14,213 | | (22,173) |
| (7,960) |
Totals |
| 575,856 |
| 173,829 |
| 749,685 |
| 738,425 |
| 116,905 |
| 855,330 |
b) For the six-month periods ended June 30, 2021 and 2020, the detail of the amount of interest and inflation-indexation adjustment expense is as follows:
| | | | | | | | | | | | |
| | For the six-month periods ended June 30, | ||||||||||
| | 2021 | | 2020 | ||||||||
|
| |
| Inflation |
| |
| |
| Inflation |
| |
| | Interest | | adjustments (1) | | Totals | | Interest | | adjustments (1) | | Totals |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
Deposits and other demand liabilities |
| (12,891) |
| (352) |
| (13,243) |
| (28,321) |
| (158) |
| (28,479) |
Obligations under repurchase agreements |
| (2,145) |
| (1) |
| (2,146) |
| (7,188) |
| (4) |
| (7,192) |
Time deposits and other time liabilities |
| (58,786) |
| (6,435) |
| (65,221) |
| (159,736) |
| (3,983) |
| (163,719) |
Interbank borrowings |
| (13,210) |
| — |
| (13,210) |
| (34,212) |
| — |
| (34,212) |
Debt instruments issued |
| (95,091) |
| (107,569) |
| (202,660) |
| (106,585) |
| (67,980) |
| (174,565) |
Other financial liabilities |
| (26) |
| — |
| (26) |
| (172) |
| — |
| (172) |
Lease obligations | | (2,113) | | — | | (2,113) | | (2,605) | | (22) | | (2,627) |
Other Interest expense |
| (32) |
| (4,341) |
| (4,373) |
| (28) |
| (6,004) |
| (6,032) |
Gain (loss) from hedge accounting (*) |
| 30,403 |
| — |
| 30,403 |
| 15,188 |
| — |
| 15,188 |
Totals |
| (153,891) |
| (118,698) |
| (272,589) |
| (323,659) |
| (78,151) |
| (401,810) |
(1) The inflation indexation adjustment is the result of changes in the Unidades de Fomento (“UF”). The UF is an inflation-index Chilean monetary unit with a value in Chilean pesos that changes daily to reflect changes in the Official Consumer Price Index (“CPI”) of the Instituto Nacional de Estadísticas (the Chilean National Institute of Statistics) for the previous month. The effect of any changes in the nominal peso value of our UF-denominated interest earning assets and interest bearing liabilities is reflected in our results of operations as an increase (or decrease, in the event of deflation) in interest income and expense respectively.
(*) The mark to market adjustments are presented in this line for hedging derivatives used in hedging of assets except in the case of foreign currency hedges and cash flow hedges (cross-currency), their all-in mark to market adjustment is included in the foreign exchange gain (losses) (see Note 13 “Net foreign exchange income (losses)”).
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-60 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 12 - Fee and Commission Income and Expense
This item comprises the amount of all commissions accrued and paid in the period, except for those that form an integral part of the effective interest rate of the financial instruments.
a) Fee and commission income
This item comprises the financial income for the six month periods corresponding to remunerations generated by the services rendered by the Bank and its subsidiaries and corresponds to the following items:
| | | | |
| | For the six-month periods ended June 30, | ||
|
| 2021 |
| 2020 |
| | MCh$ | | MCh$ |
Fees and commissions from lines of credits and overdrafts |
| 1,315 |
| 753 |
Fees and commissions from guarantees and letters of credit |
| 8,963 |
| 10,666 |
Fees and commissions from card services |
| 31,039 |
| 29,589 |
Fees and commissions from accounts management |
| 5,646 |
| 6,871 |
Fees and commissions from collections and payments |
| 11,805 |
| 10,798 |
Fees and commissions from brokerage and securities management |
| 4,186 |
| 4,748 |
Fees and commissions from asset management |
| 10,619 |
| 11,601 |
Compensation for insurance brokerage |
| 16,755 |
| 14,612 |
Investment banking and advisory fees |
| 3,960 |
| 4,821 |
Fees and commissions from student loans ceded |
| 2,838 |
| 2,884 |
Commissions on loan transactions |
| 321 |
| 749 |
Commissions for mortgage loans |
| 28 |
| 22 |
Other fees from services rendered |
| 3,798 |
| 3,793 |
Other commissions earned |
| 2,180 |
| 2,391 |
Totals |
| 103,453 |
| 104,298 |
b) Fee and commission expense
This item includes expenses for commissions accrued during the six month periods from operations, and corresponds to the following items:
| | | | |
| | For the six-month periods ended June 30, | ||
|
| 2021 |
| 2020 |
| | MCh$ | | MCh$ |
Compensation for cards transactions |
| (17,845) |
| (21,992) |
Fees and commissions for securities transactions |
| (2,102) |
| (2,429) |
Commissions paid for foreign trade transactions |
| (1,284) |
| (1,205) |
Commissions paid for customer loyalty program benefits |
| (6,995) |
| (1,476) |
Commissions paid for services to customers management |
| (838) |
| (1,113) |
Other commissions paid |
| (1,885) |
| (2,501) |
Totals |
| (30,949) |
| (30,716) |
Commissions earned on loans with mortgage finance bonds are recorded in the Condensed Consolidated Statement of Income (Loss) under “Interest income.”
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-61 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 13 - Net Income (Expense) from Financial Operations
This item includes the amount of changes in the fair value of financial instruments, except those attributable to interest accrued by applying the effective interest rate method, as well as the results obtained in the purchase and sale thereof.
Net income (expense) from financial operations in the Condensed Consolidated Statements of Income for the six month periods ended on June 30, 2021 and 2020 is as follows:
| | | | |
| | For the six-month periods ended June 30, | ||
|
| 2021 |
| 2020 |
| | MCh$ | | MCh$ |
Trading instruments (securities) |
| (12,767) | | 15,224 |
Financial derivative contracts (trading) |
| 32,102 | | 139,367 |
Sale of loans and accounts receivable from customers (*) |
| 5,172 | | (458) |
Net gain on sale of financial instruments at fair value through other comprehensive income | | 757 | | 51,517 |
Others |
| 9,556 | | (1,477) |
Totals |
| 34,820 |
| 204,173 |
(*) See details Note 5, letter d.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-62 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 14 - Provisions for Impairment of Financial Assets
The movement registered in income for the periods related to allowances and impairment due to credit risk, for the six month period ended June 30, 2021 and 2020, is summarized as follows:
| | | | | | | | | | | | | | | | |
| | | | | | | | | | Financial | | Financial | | | | |
| | Interbank | | Loans and accounts receivable from customers at amortized cost | | instruments at | | instruments at | | Contingent | | | ||||
For the six-month periods ended June 30, 2021 | | loans | | Commercial | | Mortgage | | Consumer | | FVTOCI | | amortized cost | | loans | | Totals |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
Loss for provisions established |
| (490) |
| (126,603) |
| (20,876) |
| (115,542) |
| — |
| (6) |
| (7,465) |
| (270,982) |
Income for provisions released |
| 371 |
| 71,890 |
| 8,065 |
| 60,357 |
| 658 |
| 102 |
| 12,251 |
| 153,694 |
Recovery of loans previously charged-off |
| — |
| 9,869 |
| 2,027 |
| 16,809 |
| — |
| — |
| — |
| 28,705 |
Net charge to income |
| (119) |
| (44,844) |
| (10,784) |
| (38,376) |
| 658 |
| 96 |
| 4,786 |
| (88,583) |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | Financial | | Financial | | | | |
| | Interbank | | Loans and accounts receivable from customers at amortized cost | | instruments at | | instruments at | | Contingent | | | ||||
For the six-month periods ended June 30, 2020 | | loans | | Commercial | | Mortgage | | Consumer | | FVTOCI | | amortized cost | | loans | | Totals |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ | | MCh$ |
Loss for provisions established |
| (308) |
| (251,049) |
| (18,642) |
| (129,462) |
| (97) |
| (20) |
| (20,611) | | (420,189) |
Income for provisions released |
| 431 |
| 48,133 |
| 4,227 |
| 37,725 |
| 1,034 |
| 10 |
| 7,850 | | 99,410 |
Recovery of loans previously charged-off |
| — |
| 10,896 |
| 1,294 |
| 14,590 |
| |
| |
| — | | 26,780 |
Net charge to income |
| 123 |
| (192,020) |
| (13,121) |
| (77,147) |
| 937 |
| (10) |
| (12,761) | | (293,999) |
(*) | The amounts in the Condensed Consolidated Statements of Cash Flows for the six month periods ended on June 30, 2021 and 2020 are as follows: |
| | | | |
| | For the six-month periods ended June 30, | ||
|
| 2021 |
| 2020 |
| | MCh$ | | MCh$ |
Charge to income for provisions established |
| 270,982 |
| 420,189 |
Credit to income for provisions used |
| (153,694) |
| (99,410) |
| | 117,288 |
| 320,779 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-63 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 14 - Provisions for Impairment of Financial Assets, continued
The detail by type of loans, analyzed collectively and individually, which were constituted and released by way of provision, is as follows:
| | | | | | | | |
| | | | As of June 30, 2021 | ||||
|
| Note |
| Provision established |
| Provision released |
| Totals |
| | | | MCh$ | | MCh$ | | MCh$ |
Commercial |
|
|
| (126,603) | | 71,890 |
| (54,713) |
Mortgage |
|
|
| (20,876) |
| 8,065 |
| (12,811) |
Consumer |
|
|
| (115,542) |
| 60,357 |
| (55,185) |
Subtotals |
| 5 |
| (263,021) |
| 140,312 |
| (122,709) |
Interbank loans, net |
| |
| (490) |
| 371 |
| (119) |
Totals |
|
|
| (263,511) |
| 140,683 |
| (122,828) |
| | | | | | | | |
| | | | As of June 30, 2020 | ||||
|
| Note |
| Provision established |
| Provision released |
| Totals |
| | | | MCh$ | | MCh$ | | MCh$ |
Commercial |
|
|
| (251,049) | | 48,133 |
| (202,916) |
Mortgage |
|
|
| (18,642) |
| 4,227 |
| (14,415) |
Consumer |
|
|
| (129,462) |
| 37,725 |
| (91,737) |
Subtotals |
| 5 |
| (399,153) |
| 90,085 |
| (309,068) |
Interbank loans, net |
| |
| (308) |
| 431 |
| 123 |
Totals |
|
|
| (399,461) |
| 90,516 |
| (308,945) |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-64 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 15 - Depreciation, Amortization, and Impairment
a) Depreciation and amortization
The amounts corresponding to charges to results for depreciation and amortization for the six-month periods ended June 30, 2021 and 2020, are detailed below:
| | | | | | |
| | | | For the six-month periods ended | ||
| | | | June 30, | ||
|
| Notes |
| 2021 |
| 2020 |
| | | | MCh$ | | MCh$ |
Depreciation of property, plant and equipment |
| |
| (5,918) |
| (6,591) |
Amortization of intangible assets | | |
| (26,222) |
| (38,532) |
Depreciation of assets for right to use of assets |
| |
| (17,062) |
| (18,446) |
Totals |
|
|
| (49,202) |
| (63,569) |
b) Impairment
For the six-month periods ended June 30, 2021 and 2020 the composition of this item is as follows:
| | | | |
| | For the six-month periods ended | ||
| | June 30, | ||
|
| 2021 |
| 2020 |
| | MCh$ | | MCh$ |
Impairment of financial investments at FVOCI |
| — |
| — |
Impairment of financial investments at amortized cost |
| — |
| — |
Subtotal financial assets |
| — |
| — |
Impairment of intangibles generated in business combinations (1) | | | | (113,911) |
Impairment of goodwill (2) | | | | (651,825) |
Impairment of property, plant and equipment |
| (1) |
| (10) |
Subtotal Non-financial assets |
| (1) |
| (765,746) |
Totals |
| (1) |
| (765,746) |
(1) | Impairment of intangibles generated in business combinations includes MCh$113,138 from Itaú Corpbanca Colombia and MCh$773 from Itaú Corredor de Seguros Colombia. |
(2) | Impairment of Goodwill for MCh$412,356 in Chile CGU and MCh$239,469 in Colombia CGU. |
The Bank has defined two CGUs: CGU Chile (Itaú Corpbanca and its Chileans subsidiaries and subsidiary allocated in New York) and CGU Colombia (Itaú Corpbanca Colombia and its subsidiaries and Itaú Corredores de Seguros S.A.). These CGUs were defined based on their main geographic areas. Their cash flow generation and performance are analyzed separately by the Executive Committee (C-suite) because their contributions to the consolidated entity may be identified independently. It is worth mentioning that these CGUs are consistent with the Bank’s operating segments.
Itaú Corpbanca evaluates, at the end of each reporting period, whether there is any indication of impairment of any asset (including Goodwill). If this indication exists, or when an impairment test is required, the Bank estimates the recoverable amount of the asset. As of June 30, 2021, no indications of impairment where detected, there for the impairmet test wasn’t required to be executed.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-65 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 15 - Depreciation, Amortization, and Impairment, continued
As of June 30, 2020, the bank assessed if there where any indications of impairment, where by identified evidence of impairment and proceded to estimate its recoverable amount of the CGUs detailed below:
The following tables presents the carrying amount of the CGUs, in a pre-taxes basis before impairment losses recognition:
| | |
| | As of June 30, |
CGU |
| 2020 |
| | MCh$ |
Chile |
| 2,261,620 |
Colombia |
| 942,653 |
b.1) Impairment test results and impairment losses recognition as of June 31, 2020
i) Impairment test results
As a consequence of the aforementioned impairment evaluation process, Management concludes that the recoverable amount and carrying amounts ratio of the CGUs as of June 30, 2020 is as follows:
| | | | |
| | | | |
| | As of June 30, 2020 | ||
Main assumptions |
| Chile |
| Colombia |
Recoverable Amount / Carrying Value | (%) | 86.81% | | 62.50% |
The recoverable amount for each CGU corresponds to the value in use, the higher of the fair value less costs to sell and the value in use.
ii) Assumptions used in calculations of the recoverable amount
The key assumptions used in calculating the recoverable amount, defined as those to which the calculation is most sensitive, are presented below:
| | | | |
| | | | |
| | As of June 30, | ||
| | 2020 | ||
|
| Chile |
| Colombia |
Perpetuity rate | (%) | 5.20 | | 6.50 |
Projected inflation rate | (%) | 3.00 | | 3.00 |
Discount rate | (%) | 10.40 | | 12.31 |
Loans growth | (%) | 5.67 - 7.41 | | 6.25 - 8.82 |
Solvency index limit | (%) | 10.81 - 12.12 | | 10.00 - 11.70 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-66 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 15 - Depreciation, Amortization, and Impairment, continued
iii) Impairment loss recognition
As a result the recoverable amount for the CGUs was estimated at the end of the second quarter of 2020, resulting in the recognition of an impairment loss of Ch$765,736 million (Ch$731,189 net of deferred taxes) on the following assets of the respective CGUs as of June 30, 2020:
| | | |
| | | |
Impairmente of intangible assets (1) | CGU Chile | CGU Colombia | Totals |
| MCh$ | MCh$ | MCh$ |
Goodwill impairment loss | (412,356) | (239,469) | (651,825) |
Intangibles assets generated in a business combination impairment loss | — | (113,911) | (113,911) |
Total impairment of Chile and Colombia CGUs | (412,356) | (353,380) | (765,736) |
(1) | As reported in 2016 in the original recognition of the business combination between Banco Itaú Chile and Corpbanca, resulted in a registration of a goodwill not deductible for income tax purposes, therefore, the recognition of impairment loss does not generate effects on tax results. On the other hand, the intangibles assets generated in the business combination had an associated deferred tax liability of Ch$34,547 million, which generated an impact on income tax results equivalent to that amount, by recognizing the impairment. Considering the above, the effect on income net of taxes generated by the recognition of the impairment loss amounts to Ch$731,189 million, distributed between Ch$720,951 million attributable to the owners of the Bank and Ch$10,238 million attributable to non-controlling interest. |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-67 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 16 - Related Party Transactions
In accordance with the provisions set forth in the Chilean General Banking Law and the instructions issued by the CMF, related parties are those individuals or corporations related to the ownership or management of the Institution directly or through third parties.
Article 89 of the Ley de Sociedades Anónimas (Chilean Companies Law), which also applies to Banks, establishes that any transaction with a related party must be carried out on an arm’s length basis.
In the case of sociedades anónimas abiertas (publicly traded companies) and their subsidiaries, transactions with related parties involve any negotiation, act, contract or transaction in which the company must intervene; the following are considered as parties related to them: those entities of the corporate group to which the company belongs; the corporations that, with respect to the company, have the status as parent, controlling entity, affiliate, subsidiary; the Directors, Managers, Administrators, Chief Executive Officer or Liquidators of the company, acting in their own names or on behalf of individuals other than the company, and their respective spouses or their relatives up to the second degree of consanguinity, as well as any entity controlled either directly or indirectly, through any of them; and any person who either acting individually or jointly with others with whom it has executed a joint operation agreement, may appoint at least one member of the management of the company or controls 10% or more of its capital stock, with the right to vote, in the case of a sociedad por acciones (stock corporation); those established by the bylaws of the company, or justifiably identified by the Directors’ Committee; and those in which it has acted as Director, Manager, Administrator, Chief Executive Officer or Liquidator of the company, during the last eighteen months. Article 147 of the Ley de Sociedades Anónimas (Chilean Companies Law) sets forth that a sociedad anónima abierta (publicly traded company) may only carry out transactions with related parties when they are intended to contribute to the corporate interest, are adjusted in the price, terms and conditions to those prevailing in the market at the time of their approval and comply with the requirements and the procedure indicated by it. Moreover, Article 84 of the Chilean General Banking Law establishes limits for the loans that may be granted to related parties and the prohibition to grant loans to the Directors, Managers or General Attorneys of the Bank
a) Loans granted to related parties
As of June 30, 2021 and December 31, 2020, the loans granted to related persons are detailed below:
| | | | | | | | | | | | |
| | As of June 30, 2021 | | As of December 31, 2020 | ||||||||
| | Productive | | Investment | | | | Productive | | Investment | | |
| | companies | | companies | | Individuals | | companies | | companies | | Individuals |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
Loans and accounts receivable from customers | |
| |
| |
| |
| |
| |
|
Commercial loans |
| 91,133 | | 7,540 | | 6,095 |
| 150,796 | | 10,037 | | 6,517 |
Mortgage loans |
| — | | — | | 33,367 |
| — | | — | | 30,124 |
Consumer loans |
| — | | — | | 7,099 |
| — | | — | | 7,189 |
Gross loans and accounts receivable from customers |
| 91,133 |
| 7,540 |
| 46,561 |
| 150,796 |
| 10,037 |
| 43,830 |
Allowance for loan losses |
| (7,105) | | (945) | | (220) |
| (6,333) | | (885) | | (348) |
Loans and receivables to customers, net |
| 84,028 |
| 6,595 |
| 46,341 |
| 144,463 |
| 9,152 |
| 43,482 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-68 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 16 - Related Party Transactions, continued
b) Other transactions and contracts with related parties
Below are the balances as of June 30, 2021, 2020 and for the year ended December 31, 2020, for transactions with related parties and the impact on results:
| | | | | | | | |
| | | | As of June 30, 2021 | ||||
| | | | Balances receivable | | Effect on income (loss) | ||
Name or Corporate Name |
| Description |
| (payable) |
| Income |
| Expense |
| | | | MCh$ | | MCh$ | | MCh$ |
Adexus S.A. |
| Data transmission services |
| — | | — | | — |
Bcycle Latam SPA |
| Administrative consulting |
| — | | — | | — |
Combanc S.A. |
| Data transmission services |
| — | | — | | (225) |
Comder Contraparte Central S.A |
| Banking services |
| — | �� | — | | (415) |
Compañía Chilena de Televisión S.A. | | Tv broadcasting services | | — | | — | | — |
Corp Group Holding Inversiones Limitada |
| Advisory services |
| — | | — | | (220) |
Hotel Corporation of Chile S.A. |
| Hotel, events |
| — | | — | | — |
Inmetrics Chile S.A | | Other services | | — | | — | | — |
Inmobiliaria Edificio Corpgroup S.A. |
| Office lease and building fees |
| (13,663) | | — | | (1,127) |
Inmobiliaria Gabriela S.A | | Other services | | (666) | | — | | (65) |
Inversiones Corp Group Interhold Ltda. |
| Administrative consulting |
| — | | — | | (2,675) |
Itaú Chile Inv. Serv. y Administración S.A. |
| Leases |
| (63) | | — | | (62) |
Itaú Unibanco | | Business management reimbursement | | 1,245 | | 1,301 | | (291) |
Operadora de Tarjeta de Crédito Nexus S.A. |
| Credit card management |
| — | | — | | (1,446) |
Pulso Editorial S.A. |
| Publishing services |
| — | | — | | (89) |
Redbanc S.A. | | ATM management | | — | | — | | (1,796) |
SMU S.A., Rendic Hnos. S.A. |
| Lease of ATM |
| — | | — | | (991) |
Transbank S.A. |
| Credit card management |
| — | | — | | (5,065) |
These transactions were carried out at normal market prices prevailing on the date of the transactions.
| | | | | | | | |
| | | | As of June 30, 2020 | ||||
| | | | Balances receivable | | Effect on income (loss) | ||
Name or Corporate Name |
| Description |
| (payable) |
| Income |
| Expense |
| | | | MCh$ | | MCh$ | | MCh$ |
Adexus S.A. |
| Data transmission services |
| — | | — | | (8) |
Bcycle Latam SPA |
| Administrative consulting |
| — | | — | | (1,109) |
Combanc S.A. |
| Data transmission services |
| — | | — | | (252) |
Comder Contraparte Central S.A |
| Banking services |
| — | | — | | (434) |
Compañía Chilena de Televisión S.A. | | Tv broadcasting services | | — | | — | | (8) |
Corp Group Holding Inversiones Limitada |
| Advisory services |
| — | | — | | (250) |
Hotel Corporation of Chile S.A. |
| Hotel, events |
| — | | — | | (8) |
Inmobiliaria Edificio Corpgroup S.A. |
| Office lease and building fees |
| (14,830) | | — | | (2,323) |
Inmobiliaria Gabriela S.A | | Other services | | (755) | | — | | (63) |
Inversiones Corp Group Interhold Ltda. |
| Administrative consulting |
| — | | — | | (1,301) |
Itaú Chile Cía. de Seguros de Vida S.A. |
| Life insurance |
| — | | — | | — |
Itaú Chile Inv. Serv. y Administración S.A. |
| Leases |
| (192) | | — | | (533) |
Itaú Unibanco | | Business management reimbursement | | 1,121 | | 1,460 | | — |
Operadora de Tarjeta de Crédito Nexus S.A. |
| Credit card management |
| — | | — | | (1,679) |
Pulso Editorial S.A. |
| Publishing services |
| — | | — | | (15) |
Redbanc S.A. | | ATM management | | — | | — | | (1,614) |
SMU S.A., Rendic Hnos. S.A. |
| Lease of ATM |
| 2,190 | | — | | (1,189) |
Transbank S.A. |
| Credit card management |
| 1,121 | | — | | (7,297) |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-69 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 16 - Related Party Transactions, continued
| | | | | | | | |
| | | | | | | | |
| | | | As of and for the year ended December 31, 2020 | ||||
| | | | Balances receivable | | Effect on income (loss) | ||
Name or Corporate Name |
| Description |
| (payable) |
| Income |
| Expense |
| | | | MCh$ | | MCh$ | | MCh$ |
Adexus S.A. | | Data transmission services |
| — |
| — |
| (8) |
Bcycle Latam SPA | | Administrative consulting |
| — |
| — |
| (2,165) |
CAI Gestion Inmobiliaria S.A. | | Department stores |
| — |
| — |
| — |
Combanc S.A. | | Data transmission services |
| — |
| — |
| (472) |
Comder Contraparte Central S.A | | Banking services |
| — |
| — |
| (826) |
Compañía Chilena de Televisión S.A. | | Tv broadcasting services |
| — |
| — |
| (8) |
Corp Group Holding Inversiones Limitada | | Advisory services |
| — |
| — |
| (537) |
Corp Imagen y diseños S.A. | | Marketing |
| — |
| — |
| — |
Corp Research S.A. | | Advisory services |
| — |
| — |
| — |
Hotel Corporation of Chile S.A. | | Hotel, events |
| — |
| — |
| (8) |
Inmetrics Chile S.A | | Other services |
| — |
| — |
| (1,470) |
Inmobiliaria Edificio Corpgroup S.A. | | Office lease and building fees |
| (14,175) |
| — |
| (4,693) |
Inmobiliaria Gabriela S.A | | Other services |
| (708) |
| — |
| (128) |
Inversiones Corp Group Interhold Ltda. | | Administrative consulting |
| — |
| — |
| (2,613) |
Itaú Chile Cía. de Seguros de Vida S.A. | | Life insurance |
| — |
| — |
| — |
Itaú Chile Inv. Serv. y Administración S.A. | | Leases |
| (198) |
| — |
| (1,143) |
Itaú Unibanco | | Business management reimbursement |
| 1,549 |
| 2,213 |
| — |
Operadora de Tarjeta de Crédito Nexus S.A. | | Credit card management |
| — |
| — |
| (3,319) |
Pulso Editorial S.A. | | Publishing services | | — | | — | | (24) |
Redbanc S.A. | | ATM management |
| — |
| — |
| (3,094) |
SMU S.A., Rendic Hnos. S.A. | | Lease of ATM |
| 991 |
| — |
| (2,388) |
Transbank S.A. | | Credit card management |
| — |
| — |
| (13,177) |
These transactions were carried out at normal market prices prevailing at the day of the transactions.
c) Donations
| | | | | | |
| | | | For the six-month periods ended June 30, | ||
Name or corporate name |
| Description |
| 2021 |
| 2020 |
| | | | MCh$ | | MCh$ |
Fundación Corpgroup Centro Cultural |
| Donations | | 721 |
| 1,556 |
Fundación Descúbreme |
| Donations | | 111 |
| 117 |
Fundación Itaú |
| Donations | | 93 |
| 97 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-70 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 17 - Fair Value of Financial Assets and Liabilities
Determination of the fair value as of June 30, 2021 and December 31, 2020
| | | | | | |
| | As of June 30, 2021 | ||||
| | | | Estimated fair value | ||
|
| Book value |
| Recurring |
| Non-recurring (*) |
| | MCh$ | | MCh$ | | MCh$ |
ASSETS | | | | | | |
Cash and deposits in banks |
| 2,875,942 |
| — |
| 2,875,942 |
Cash items in process of collection |
| 442,662 |
| — |
| 442,662 |
Financial instruments at fair value through profit or loss |
| 301,239 |
| 301,239 |
| — |
Financial instruments at fair value through other comprehensive income |
| 3,914,198 |
| 3,914,198 |
| — |
Loans and accounts receivable at amortized cost |
| 22,017,132 |
| — |
| 22,715,286 |
Financial instruments at amortized cost |
| 173,227 |
| — |
| 173,227 |
Investments under resale agreements |
| 122,998 |
| — |
| 122,998 |
Financial derivative contracts |
| 2,588,103 |
| 2,588,103 |
| — |
Interbank loans, net |
| 57,499 |
| — |
| 57,499 |
Totals |
| 32,493,000 |
| 6,803,540 |
| 26,387,614 |
LIABILITIES |
|
|
|
|
|
|
Deposits and other demand liabilities |
| 6,550,657 |
| — |
| 6,550,657 |
Cash in process of being cleared |
| 420,259 |
| — |
| 420,259 |
Obligations under repurchase agreements |
| 483,241 |
| — |
| 483,241 |
Time deposits and other time liabilities |
| 10,269,825 |
| — |
| 10,269,825 |
Financial derivative contracts |
| 2,377,921 |
| 2,377,921 |
| — |
Interbank borrowings |
| 4,453,688 |
| — |
| 4,453,688 |
Debt instruments issued |
| 6,335,525 |
| — |
| 6,335,525 |
Lease contract liabilities | | 133,594 |
| — |
| 133,594 |
Other financial liabilities |
| 29,163 |
| — |
| 29,163 |
Totals |
| 31,053,873 |
| 2,377,921 |
| 28,675,952 |
(*) Non-recurring items correspond to those line items that are carried at cost, but their corresponding fair value has been estimated for disclosure purposes only.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-71 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 17 - Fair Value of Financial Assets and Liabilities, continued
| | | | | | |
| | As of December 31, 2020 | ||||
| | | | Estimated fair value | ||
|
| Book value |
| Recurring |
| Non-recurring (*) |
| | MCh$ | | MCh$ | | MCh$ |
ASSETS | | | | | | |
Cash and deposits in banks |
| 3,089,072 |
| — |
| 3,089,072 |
Cash items in process of collection |
| 173,192 |
| — |
| 173,192 |
Financial instruments at fair value through profit or loss |
| 582,710 |
| 582,710 |
| — |
Financial instruments at fair value through other comprehensive income |
| 3,970,899 |
| 3,970,899 |
| — |
Loans and accounts receivable at amortized cost |
| 21,576,108 |
| — |
| 22,767,597 |
Financial instruments at amortized cost |
| 111,542 |
| — |
| 110,608 |
Investments under resale agreements |
| 105,580 |
| — |
| 105,580 |
Financial derivative contracts |
| 3,982,803 |
| 3,982,803 |
| — |
Interbank loans, net |
| 7,121 |
| — |
| 7,121 |
Totals |
| 33,599,027 |
| 8,536,412 |
| 26,253,170 |
LIABILITIES |
|
|
|
|
|
|
Deposits and other demand liabilities |
| 6,197,406 |
| — |
| 6,197,406 |
Cash in process of being cleared |
| 154,232 |
| — |
| 154,232 |
Obligations under repurchase agreements |
| 638,851 |
| — |
| 638,851 |
Time deposits and other time liabilities |
| 11,433,064 |
| — |
| 11,574,924 |
Financial derivative contracts |
| 3,673,591 |
| 3,673,591 |
| — |
Interbank borrowings |
| 3,798,978 |
| — |
| 3,794,375 |
Debt instruments issued |
| 6,204,856 |
| — |
| 7,330,126 |
Lease contract liabilities | | 151,885 |
| — |
| 164,304 |
Other financial liabilities |
| 13,123 |
| — |
| 13,123 |
Totals |
| 32,265,986 |
| 3,673,591 |
| 29,867,341 |
(*) Non-recurring items correspond to those line items that are carried at cost, but their corresponding fair value has been estimated for disclosure purposes only.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-72 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 17 - Fair Value of Financial Assets and Liabilities, continued
Fair Value Measurements of assets and liabilities only for disclosure purposes (non-recurring):
| | | | |
|
| As of June 30, | | As of December 31, |
Non-recurring fair value measurement | | 2021 | | 2020 |
| | MCh$ | | MCh$ |
ASSETS |
|
|
|
|
Cash and deposits in banks |
| 2,875,942 |
| 3,089,072 |
Cash items in process of collection |
| 442,662 |
| 173,192 |
Loans and accounts receivable at amortized cost |
| 22,715,286 |
| 22,767,597 |
Investments under resale agreements |
| 122,998 |
| 105,580 |
Interbank loans, net |
| 57,499 |
| 7,121 |
Financial instruments at amortized cost |
| 173,227 |
| 110,608 |
Totals |
| 26,387,614 |
| 26,253,170 |
LIABILITIES |
|
|
|
|
Deposits and other demand liabilities |
| 6,550,657 |
| 6,197,406 |
Cash in process of being cleared |
| 420,259 |
| 154,232 |
Obligations under repurchase agreements |
| 483,241 |
| 638,851 |
Time deposits and other time liabilities |
| 10,269,825 |
| 11,574,924 |
Interbank borrowings |
| 4,453,688 |
| 3,794,375 |
Debt issued |
| 6,335,525 |
| 7,330,126 |
Lease contract liabilities | | 133,594 | | 164,304 |
Other financial obligations |
| 29,163 |
| 13,123 |
Totals |
| 28,675,952 |
| 29,867,341 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-73 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 17 - Fair Value of Financial Assets and Liabilities, continued
Fair Value measurement of financial assets and liabilities (recurring):
| | | | |
|
| As of June 30, | | As of December 31, |
Fair value measurement of recurring items | | 2021 | | 2020 |
| | MCh$ | | MCh$ |
ASSETS |
|
|
|
|
Financial instruments at fair value through profit or loss |
| 301,239 |
| 582,710 |
Central Bank of Chile and Government securities |
| 49,811 |
| 108,042 |
Other securities issued in Chile |
| 110 |
| 271 |
Foreign government and Central Bank instruments |
| 210,008 |
| 432,178 |
Other instruments issued abroad |
| 2,372 |
| 4,861 |
Investments in mutual funds |
| 38,123 |
| 35,017 |
Other investments at FVTPL |
| 815 |
| 2,341 |
Financial instruments at fair value through other comprehensive income |
| 3,914,198 |
| 3,970,899 |
Central Bank of Chile and Government securities |
| 3,248,822 |
| 3,056,179 |
Other securities issued in Chile |
| 143,049 |
| 296,665 |
Foreign government and Central Bank instruments |
| 334,591 |
| 217,185 |
Other instruments issued abroad |
| 177,312 |
| 394,691 |
Other investments at FVOCI |
| 10,424 |
| 6,179 |
Financial derivative contracts |
| 2,588,103 |
| 3,982,803 |
Forwards |
| 191,385 |
| 472,208 |
Swaps |
| 2,396,062 |
| 3,509,315 |
Call options |
| 498 |
| 195 |
Put options |
| 158 |
| 1,085 |
Totals |
| 6,803,540 |
| 8,536,412 |
LIABILITIES |
|
|
|
|
Financial derivative contracts |
| 2,377,921 |
| 3,673,591 |
Forwards |
| 175,051 |
| 433,863 |
Swaps |
| 2,201,695 |
| 3,238,371 |
Call options |
| 928 |
| 271 |
Put options |
| 247 |
| 1,086 |
Totals |
| 2,377,921 |
| 3,673,591 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-74 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 17 - Fair Value of Financial Assets and Liabilities, continued
Financial Derivative Instruments
The estimated fair value of derivative instruments is calculated using prices quoted in the market for financial instruments with similar characteristics. Therefore, the methodology recognizes the credit risk of each counterparty.
The adjustments are known internationally as the counterparty value adjustment (“CVA”), which consists of an adjustment for debtor risk (credit value adjustment or CVA) and for creditor risk (debit value adjustment or “DVA”). The sum of these adjustments gives the effective counterparty risk that the derivative contract must have.
These adjustments are recorded periodically in the financial statements. As of June 30, 2021 and December 31, 2020, the portfolio of derivative contracts in both Chile and Colombia is detailed as follows:
| | | | | | | | |
| | As of June 30, | | As of December 31, | ||||
| | 2021 | | 2020 | ||||
|
| CVA |
| DVA |
| CVA |
| DVA |
| | MCh$ | | MCh$ | | MCh$ | | MCh$ |
Derivatives held for hedging |
| (2) | | — |
| — | | — |
Fair value hedge |
| — |
| — |
| — |
| — |
Currency forwards |
| — |
| — |
| — |
| — |
Currency swaps |
| — |
| — |
| — |
| — |
Interest rate swaps |
| — |
| — |
| — |
| — |
Cash flow hedge |
| — |
| — |
| — |
| — |
Currency forwards |
| — |
| — |
| — |
| — |
Currency swaps |
| — |
| — |
| — |
| — |
Interest rate swaps |
| — |
| — |
| — |
| — |
Hedge of net investments in a foreign operation |
| (2) |
| — |
| — |
| — |
Currency forwards |
| — |
| — |
| — |
| — |
Currency swaps |
| — |
| — |
| — |
| — |
Interest rate swaps |
| — |
| — |
| — |
| — |
Derivatives held for trading |
| (27,298) |
| 436 |
| (40,971) |
| 589 |
Currency forwards |
| (304) | | 170 |
| (443) |
| 205 |
Currency swaps |
| (22,261) | | 41 |
| (36,363) |
| 37 |
Interest rate swaps |
| (4,733) | | 225 |
| (4,165) | | 347 |
Call currency options |
| — | | — |
| — |
| — |
Put currency options |
| — | | — |
| — |
| — |
Total financial derivative contracts |
| (27,300) |
| 436 |
| (40,971) |
| 589 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-75 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 17 - Fair Value of Financial Assets and Liabilities, continued
The following table summarizes the fair value hierarchy for the Bank’s recurring valuation of financial instruments:
| | | | | | | | |
Level |
| Instrument |
| Issuer |
| Price Source |
| Model |
1 |
| Currencies |
| Not Applicable |
| OTC, Bloomberg |
| Directly observable price. |
|
| Shares |
| Others |
| Santiago Exchange |
| Directly observable price. |
|
| Mutual Funds |
| Asset Managers |
| CMF (formerly the SVS) |
| Directly observable price. |
|
| Bonds |
| Chilean Central Bank and Chilean Treasury |
| Santiago Exchange |
| Internal rate of return (“IRR”) based on prices. |
2 |
| Derivatives |
| Not Applicable |
| OTC (brokers), Bloomberg |
| Interest rate curves based on forward prices and coupon rates. |
|
| Money market |
| Chilean Central Bank and Chilean Treasury |
| Santiago Exchange |
| Interest rate curves based on prices. |
|
| Money market |
| Banks |
| Santiago Exchange |
| Interest rate curves based on prices. |
|
| Bonds |
| Companies, Banks |
| Pricing provider |
| Interest rate curves based on correlations, spreads, extrapolations, etc. |
3 |
| Derivatives, active Banking rate (TAB) |
| Not Applicable |
| OTC (brokers) |
| Interest rate curves based on modeling of TAB - Chamber spread. |
|
| Derivatives, American forwards |
| Not Applicable |
| Bloomberg |
| Black and Scholes with inputs from European options. |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-76 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 17 - Fair Value of Financial Assets and Liabilities, continued
The following table classifies assets and liabilities measured at fair value on a recurring basis, in accordance with the fair value hierarchy established in IFRS 13, as of June 30, 2021 and December 31, 2020:
| | | | | | | | |
| | As of June 30, 2021 | ||||||
| | | | Market value of the | | Other observable | | Non-observable |
Measurement at fair value of instruments | | | | asset for identified assets | | significant inputs | | significant inputs |
on a recurring basis using |
| Fair value |
| (Level 1) |
| (Level 2) |
| (Level 3) |
| | MCh$ | | MCh$ | | MCh$ | | MCh$ |
ASSETS | | | | | | | | |
Financial instruments at fair value through profit or loss | | 301,239 | | 297,942 | | 3,297 | | — |
Central Bank of Chile and Government securities | | 49,811 | | 49,811 | | — | | — |
Other securities issued locally | | 110 | | — | | 110 | | — |
Foreign government and Central Bank instruments | | 210,008 | | 210,008 | | — | | — |
Other securities issued abroad | | 2,372 | | — | | 2,372 | | — |
Investments in mutual funds | | 38,123 | | 38,123 | | — | | — |
Other investments at FVTPL | | 815 | | — | | 815 | | — |
Financial instruments at fair value through other comprehensive income | | 3,914,198 | | 3,740,534 | | 177,740 | | — |
Central Bank of Chile and Government securities | | 3,248,822 | | 3,248,822 | | — | | — |
Other securities issued locally | | 143,049 | | — | | 147,125 | | — |
Foreign government and Central Bank instruments | | 334,591 | | 334,591 | | — | | — |
Other securities issued abroad | | 177,312 | | 157,121 | | 20,191 | | — |
Other investments at FVOCI | | 10,424 | | — | | 10,424 | | — |
Financial derivative contracts | | 2,588,103 | | — | | 2,567,898 | | 20,205 |
Forwards | | 191,385 | | — | | 190,199 | | 1,186 |
Swaps | | 2,396,062 | | — | | 2,377,043 | | 19,019 |
Call options | | 498 | | — | | 498 | | — |
Put options | | 158 | | — | | 158 | | — |
Totals | | 6,803,540 | | 4,038,476 | | 2,748,935 | | 20,205 |
LIABILITIES | | | | | | | | |
Financial derivative contracts | | 2,377,921 | | — | | 2,376,996 | | 925 |
Forwards | | 175,051 | | — | | 174,546 | | 505 |
Swaps | | 2,201,695 | | — | | 2,201,275 | | 420 |
Call options | | 928 | | — | | 928 | | — |
Put options | | 247 | | — | | 247 | | — |
Totals | | 2,377,921 | | — | | 2,376,996 | | 925 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-77 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 17 - Fair Value of Financial Assets and Liabilities, continued
| | | | | | | | |
| | As of December 31, 2020 | ||||||
| | | | Market value of the | | Other observable | | Non-observable |
Measurement at fair value of instruments |
| | | asset for identified assets | | significant inputs | | significant inputs |
on a recurring basis using |
| Fair value |
| (Level 1) |
| (Level 2) |
| (Level 3) |
|
| MCh$ | | MCh$ | | MCh$ | | MCh$ |
ASSETS |
|
|
|
|
|
|
|
|
Financial instruments at fair value through profit or loss |
| 582,710 | | 575,237 | | 7,473 | | — |
Central Bank of Chile and Government securities |
| 108,042 | | 108,042 | | — | | — |
Other securities issued locally |
| 271 | | — | | 271 | | — |
Foreign government and Central Bank instruments |
| 432,178 | | 432,178 | | — | | — |
Other securities issued abroad |
| 4,861 | | — | | 4,861 | | — |
Investments in mutual funds |
| 35,017 | | 35,017 | | — | | — |
Other investments at FVTPL |
| 2,341 | | — | | 2,341 | | — |
Financial instruments at fair value through other comprehensive income |
| 3,970,899 | | 3,608,717 | | 362,182 | | — |
Central Bank of Chile and Government securities |
| 3,056,179 | | 3,056,179 | | — | | — |
Other securities issued locally |
| 296,665 | | — | | 296,665 | | — |
Foreign government and Central Bank instruments |
| 217,185 | | 217,185 | | — | | — |
Other securities issued abroad |
| 394,691 | | 335,353 | | 59,338 | | — |
Other investments at FVOCI |
| 6,179 | | — | | 6,179 | | — |
Financial derivative contracts |
| 3,982,803 | | — | | 3,955,538 | | 27,265 |
Forwards |
| 472,208 | | — | | 468,632 | | 3,576 |
Swaps |
| 3,509,315 | | — | | 3,485,626 | | 23,689 |
Call options |
| 195 | | — | | 195 | | — |
Put options |
| 1,085 | | — | | 1,085 | | — |
Totals |
| 8,536,412 | | 4,183,954 | | 4,325,193 | | 27,265 |
LIABILITIES |
| | | | | | | |
Financial derivative contracts |
| 3,673,591 | | — | | 3,672,751 | | 840 |
Forwards |
| 433,863 | | — | | 433,747 | | 116 |
Swaps |
| 3,238,371 | | — | | 3,237,647 | | 724 |
Call options |
| 271 | | — | | 271 | | — |
Put options |
| 1,086 | | — | | 1,086 | | — |
Totals |
| 3,673,591 | | — | | 3,672,751 | | 840 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-78 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 17 - Fair Value of Financial Assets and Liabilities, continued
Transfers between level 1 and 2
As of June 30, 2021 and December 31, 2020 no transfers were observed between Level 1 and Level 2, as shown below
| | | | | | |
| | As of June 30, | ||||
Measurement at fair value of instruments | | 2021 | ||||
that are valued recurrently | | Fair value | | Level 1 to 2 | | Level 2 to 1 |
|
| MCh$ |
| MCh$ |
| MCh$ |
ASSETS | | | | | | |
Financial instruments at fair value through profit or loss |
| 301,239 |
| — |
| — |
Financial instruments at fair value through other comprehensive income |
| 3,914,198 |
| — |
| — |
Financial derivative contracts |
| 2,588,103 |
| — |
| — |
Totals |
| 6,803,540 |
| — |
| — |
LIABILITIES |
|
|
|
|
|
|
Financial derivative contracts |
| 2,377,921 |
| — |
| — |
Totals |
| 2,377,921 |
| — |
| — |
| | | | | | |
| | As of December 31, | ||||
Measurement at fair value of instruments | | 2020 | ||||
that are valued recurrently |
| Fair value |
| Level 1 to 2 |
| Level 2 to 1 |
|
| MCh$ |
| MCh$ |
| MCh$ |
ASSETS |
|
|
|
|
|
|
Financial instruments at fair value through profit or loss |
| 582,710 |
| — |
| — |
Financial instruments at fair value through other comprehensive income |
| 3,970,899 |
| — |
| — |
Financial derivative contracts |
| 3,982,803 |
| — |
| — |
Totals |
| 8,536,412 |
| — |
| — |
LIABILITIES |
|
|
|
|
|
|
Financial derivative contracts |
| 3,673,591 |
| — |
| — |
Totals |
| 3,673,591 |
| — |
| — |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-79 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 17 - Fair Value of Financial Assets and Liabilities, continued
The following table reconciles assets and liabilities measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020.
| | | | | | | | | | | | |
| | As of June 30, 2021 | ||||||||||
| | | | Gain (loss) | | Gain (loss) | | Purchases, | | Transfers | | |
| | Opening | | recognized in | | recognized in | | sales and | | from level 1 | | Ending |
Level 3 reconciliation | | balance | | profit or loss | | equity | | agreements | | or level 2 | | balance |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Financial derivative contracts |
| 27,265 |
| (1,173) |
| — |
| (5,887) |
| — |
| 20,205 |
Forwards |
| 3,576 | | 741 | | | | (3,131) | | | | 1,186 |
Swaps |
| 23,689 | | (1,914) | | | | (2,756) | | | | 19,019 |
Call options |
| — | | — | | | | — | | | | — |
Put options |
| — | | — | | | | — | | | | — |
Totals |
| 27,265 |
| (1,173) |
| — |
| (5,887) |
| — |
| 20,205 |
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
Financial derivative contracts |
| 840 |
| 369 |
| — |
| (284) |
| — |
| 925 |
Forwards |
| 116 | | 1,856 | | | | (1,467) | | | | 505 |
Swaps |
| 724 | | (1,487) | | | | 1,183 | | | | 420 |
Call options |
| — | | — | | | | — | | | | — |
Put options |
| — | | — | | | | — | | | | — |
Totals |
| 840 |
| 369 |
| — |
| (284) |
| — |
| 925 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-80 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 17 - Fair Value of Financial Assets and Liabilities, continued
| | | | | | | | | | | | |
| | As of December 31, 2020 | ||||||||||
|
| |
| Gain (loss) |
| Gain (loss) |
| Purchases, |
| Transfers |
| |
| | Opening | | recognized in | | recognized in | | sales and | | from level 1 | | Ending |
Level 3 reconciliation | | balance | | profit or loss | | equity | | agreements | | or level 2 | | balance |
| | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ | | MCh$ |
ASSETS | | | | | | | | | | | | |
Financial derivative contracts |
| 27,432 |
| 28,603 |
| — |
| (28,770) |
| — |
| 27,265 |
Forwards |
| 5,060 |
| 23,803 |
| — |
| (25,287) |
| — |
| 3,576 |
Swaps |
| 22,372 |
| 4,800 |
| — |
| (3,483) |
| — |
| 23,689 |
Call options |
| — |
| — |
| — |
| — |
| — |
| — |
Put options |
| — |
| — |
| — |
| — |
| — |
| — |
Totals |
| 27,432 |
| 28,603 |
| — |
| (28,770) |
| — |
| 27,265 |
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
Financial derivative contracts |
| 1,119 |
| 725 |
| — |
| (1,004) |
| — |
| 840 |
Forwards |
| 181 |
| 2,397 |
| — |
| (2,462) |
| — |
| 116 |
Swaps |
| 938 |
| (1,672) |
| — |
| 1,458 |
| — |
| 724 |
Call options |
| — |
| — |
| — |
| — |
| — |
| — |
Put options |
| — |
| — |
| — |
| — |
| — |
| — |
Totals |
| 1,119 |
| 725 |
| — |
| (1,004) |
| — |
| 840 |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-81 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 17 - Fair Value of Financial Assets and Liabilities, continued
Hierarchy for remaining assets and liabilities
The following table classifies assets and liabilities measured at fair value on a non-recurring basis, in accordance with the fair value hierarchy as of June 30, 2021 and December 31, 2020.
| | | | | | | | |
| | As of June 30, 2021 | ||||||
| | | | Market value of the | | Other observable | | Non-observable |
| | Estimated fair | | asset for identified | | significant inputs | | significant inputs |
Measurement at fair value of items on a non-recurring basis |
| value |
| assets (Level 1) |
| (Level 2) |
| (Level 3) |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
ASSETS | | | | | | | | |
| | | | | | | | |
Cash and deposits in banks |
| 2,875,942 | | 2,875,942 | | — | | — |
Cash items in process of collection |
| 442,662 | | 442,662 | | — | | — |
Loans and accounts receivable at amortized cost |
| 22,715,286 | | — | | — | | 22,715,286 |
Financial instruments at amortized cost |
| 173,227 | | 173,227 | | — | | — |
Investments under resale agreements |
| 122,998 | | 122,998 | | — | | — |
Interbank loans, net |
| 57,499 | | 57,499 | | — | | — |
Totals |
| 26,387,614 | | 3,672,328 | | — | | 22,715,286 |
LIABILITIES | | | | | | | | |
Deposits and other demand liabilities |
| 6,550,657 | | 6,550,657 | | — | | — |
Cash in process of being cleared |
| 420,259 | | 420,259 | | — | | — |
Obligations under repurchase agreements |
| 483,241 | | 483,241 | | — | | — |
Time deposits and other time liabilities |
| 10,261,883 | | — | | 10,261,883 | | — |
Interbank borrowings |
| 4,445,864 | | 4,445,864 | | — | | — |
Debt instruments issued |
| 6,711,805 | | — | | 6,711,805 | | — |
Lease contract liabilities | | 136,046 | | — | | 136,046 | | — |
Other financial liabilities |
| 29,163 | | 29,163 | | — | | — |
Totals |
| 29,038,918 | | 11,929,184 | | 17,109,734 | | — |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-82 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 17 - Fair Value of Financial Assets and Liabilities, continued
| | | | | | | | |
| | As of December 31, 2020 | ||||||
| | | | Market value of the | | Other observable | | Non-observable |
| | Estimated fair | | asset for identified | | significant inputs | | significant inputs |
Measurement at fair value of items on a non-recurring basis |
| value |
| assets (Level 1) |
| (Level 2) |
| (Level 3) |
|
| MCh$ |
| MCh$ |
| MCh$ |
| MCh$ |
ASSETS | | | | | | | | |
| | | | | | | | |
Cash and deposits in banks |
| 3,089,072 | | 3,089,072 | | — | | — |
Cash items in process of collection |
| 173,192 | | 173,192 | | — | | — |
Investments under resale agreements |
| 22,767,597 | | — | | — | | 22,767,597 |
Interbank loans, net |
| 110,608 | | 110,608 | | — | | — |
Loans and accounts receivable from customers, net |
| 105,580 | | 105,580 | | — | | — |
Financial instruments at amortized cost |
| 7,121 | | 7,121 | | — | | — |
Totals |
| 26,253,170 |
| 3,485,573 |
| — |
| 22,767,597 |
LIABILITIES | | | | | | | | |
Deposits and other demand liabilities |
| 6,197,406 | | 6,197,406 | | — | | — |
Cash in process of being cleared |
| 154,232 | | 154,232 | | — | | — |
Obligations under repurchase agreements |
| 638,851 | | 638,851 | | — | | — |
Time deposits and other time liabilities |
| 11,574,924 | | — | | 11,574,924 | | — |
Interbank borrowings | | 3,794,375 | | 3,794,375 | | — | | — |
Debt instruments issued |
| 7,330,126 | | — | | 7,330,126 | | — |
Lease contract liabilities | | 164,304 | | — | | 164,304 | | — |
Other financial liabilities |
| 13,123 | | 13,123 | | — | | — |
Totals |
| 29,867,341 |
| 10,797,987 |
| 19,069,354 |
| — |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-83 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 18 - Regulatory Capital Requirements
The primary objectives of capital management are to ensure compliance with regulatory requirements and to maintain a solid risk rating and healthy capital ratios. During 2021 and 2020, the Bank has complied fully with all capital requirements.
In accordance with the General Banking Law, the Bank must maintain a minimum ratio of Regulatory Capital to Consolidated Risk-Weighted Assets of 8%, net of required provisions, and a minimum ratio of Core Capital to Total Consolidated Assets of 3%, net of required provisions. However, after the merger, the CMF determined that the Bank’s Regulatory Capital could not be less than 10% of its Risk-Weighted Assets. For this purpose, the Bank has applied the dispose in the Chapter 12-1 “Heritage for legal and regulatory purposes” of RAN.
Assets are weighted using risk categories, which are assigned a risk percentage based on the capital needed to back up each asset. There are 5 risk categories (0%, 10%, 20%, 60% and 100%) and additionally a category intermediate with a risk weighting percentage of 2%. For example, cash, due from Banks and financial instruments issued by the Chilean Central Bank have 0% risk, which means that, in accordance with current standards, no capital is required to back these assets. Bank have 100% risk, which means that a minimum capital equivalent to 8% of the value of these assets is needed. In the case of Itaú, it uses 10%.
All derivative instruments traded off-market are taken into account to determine risk assets using conversion factors over notional values, thus calculating the value of the credit risk exposure (or "credit equivalent"). For weighting purposes, “credit equivalent” also considers contingent loans not recorded in the Consolidated Statement of Financial Position.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-84 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 18 - Regulatory Capital Requirements, continued
According to local regulations, as of June 30, 2021 and December 31, 2020, the relation between assets and risk weighted assets is as follow:
| | | | | | | | |
| | Consolidated assets | | Risk-weighted assets | ||||
| | As of June 30, | | As of December 31, | | As of June 30, | | As of December 31, |
|
| 2021 |
| 2020 |
| 2021 |
| 2020 |
| | MCh$ | | MCh$ | | MCh$ | | MCh$ |
Assets balance (net of allowances) |
|
|
|
|
|
|
|
|
Cash and deposits in banks |
| 2,875,942 |
| 3,089,072 |
| — |
| — |
Cash items in process of collection |
| 442,662 |
| 173,192 |
| 84,245 |
| 30,919 |
Trading securities |
| 300,424 |
| 580,369 |
| 63,248 |
| 90,149 |
Investments under resale agreements |
| 122,998 |
| 105,580 |
| 122,998 |
| 97,525 |
Financial derivative contract (*) |
| 1,137,961 |
| 1,302,692 |
| 745,255 |
| 859,464 |
Interbank loans |
| 57,489 |
| 7,115 |
| 57,489 |
| 7,115 |
Loans and accounts receivable from customers |
| 22,113,418 |
| 21,685,269 |
| 18,741,810 |
| 18,634,870 |
Available for sale investments |
| 3,907,850 |
| 3,964,720 |
| 288,703 |
| 334,632 |
Held to maturity investments |
| 173,232 |
| 111,643 |
| 113,071 |
| 49,627 |
Investments in companies |
| 12,035 |
| 11,983 |
| 12,035 |
| 11,983 |
Intangible |
| 702,939 |
| 718,683 |
| 210,427 |
| 226,171 |
Fixed assets |
| 50,893 |
| 56,020 |
| 50,893 |
| 56,020 |
Right-of-use asset under lease agreements | | 150,703 | | 170,603 | | 150,703 | | 170,603 |
Current taxes |
| 100,123 |
| 64,699 |
| 10,012 |
| 6,470 |
Deferred taxes |
| 275,276 |
| 314,112 |
| 27,528 |
| 31,411 |
Other assets |
| 528,293 |
| 602,769 |
| 403,964 |
| 410,854 |
Off-balance sheet assets |
| |
|
|
| |
|
|
Contingent loans |
| 2,930,959 |
| 2,381,233 |
| 1,758,575 |
| 1,428,740 |
Totals |
| 35,883,197 |
| 35,339,754 |
| 22,840,956 |
| 22,446,553 |
(*) Items presented at their Equivalent Credit Risk value, in accordance with the provisions of Chapter 12 1 “Equity for Legal and Regulatory Effects” of the RAN, issued by the Commission for the Financial Market (former SBIF).
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-85 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 18 - Regulatory Capital Requirements, continued
| | | | | | | | |
| Amount | | Ratio |
| ||||
| As of June 30, | | As of December 31, | | As of June 30, | | As of December 31, | |
| 2021 | | 2020 | | 2021 | | 2020 | |
| MCh$ | | MCh$ | | % | | % | |
Basic capital | 2,297,933 | | 2,315,411 | (a) | 6.40 | | 6.54 | (c) |
Effective equity | 2,976,143 | | 3,044,661 | (b) | 13.03 | | 13.56 | (d) |
(*) Includes transactions denominated in foreign currencies but that are settled in pesos.
(a) Basic Capital Corresponds to the net amount that must be shown in the Consolidated Financial Statements filed with the CMF under the line item “Equity attributable to equity holders of the Bank” as indicated in the Compendium of Accounting Standards.
(b) Based on the consolidated financial statements filed with CMF, the effective net equity of a bank is the sum of (i) a bank’s basic capital, (ii) subordinated bonds issued by a bank valued at their placement price up to 50% of its net capital base; provided that the value of the bonds shall decrease 20% for each year that lapses during the period commencing six years prior to their maturity and (iii) voluntary loan loss allowances in an amount up to 1.25% of a bank’s risk-weighted assets (if a bank has goodwill, this value would be required to be deducted from the calculation of the effective net equity). The calculation of the effective net equity does not include the capital contributions made to subsidiaries of a bank and is made on a consolidated basis rather than on an unconsolidated basis.
(c) Consolidated basic capital ratio corresponding to basic capital divided by total assets for capital purposes (includes items outside the Consolidated Financial Statements).
(d) Consolidated solvency ratio corresponds to the ratio of effective equity to weighted assets.
The shareholders’ agreement established an “Optimal Regulatory Capital” with respect to Itaú Corpbanca Chile and Colombia, which must be, at any date, the highest between 120% of the minimum regulatory capital ratio established by the respective legislation and the average of the regulatory capital ratio of the 3 largest private Banks in the respective country, multiplied by the consolidated risk-weighted assets (APR) of the Chilean or Colombian Bank, as applicable, on the date that is one year from the last day of the fiscal year more recent, assuming that the assets weighted by their level of risk grow during that year at a rate equal to the Minimum Growth Rate. The Bank, in consolidated terms (owners of the Bank), as of June 30, 2021, maintains a total equity of Ch$2,297,933 million (Ch$2,315,411 million in December 2020) in the Consolidated Financial Statements filed with the CMF, according to local regulations.
As of June 30, 2021 and December 31, 2020, the Bank is in compliance with the “Optimal Regulatory Capital” requirements, as well as with all financial covenants related to regulatory capital requirements.
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-86 |
ITAÚ CORPBANCA AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
As of June 30, 2021 and December 31, 2020 and for the six-month periods ended June 30, 2021 and 2020
Note 19 - Subsequent events
Capital increase approval
In the Extraordinary Shareholders Meeting held on July 13, 2021, the following agreements were met: (a) increase the Bank’s capital in the amount of $830,000,000,000 Chilean pesos, from $1,862,826,231,184 Chilean pesos divided into 512,406,760,091 nominative, ordinary, no par value, fully subscribed and paid-in shares, to $2,692,826,231,184, divided into 973,517,871,202 nominative, ordinary, no par value shares, throughout the issuance of 461,111,111,111 new ordinary shares, to be issued, subscribed and paid until July 13, 2024; (b) authorize the Board of Directors to freely set the price of these shares in accordance to the rule set forth in the second paragraph of article 23 of the Reglamento de Sociedades Anónimas; and (c) amend the fifth permanent and first transitory articles of the Bank’s bylaws, related to capital stock, based on the agreements reached in the aforementioned Shareholders Meeting.
Through Resolution No. 4,177, issue on August 3, 2021, the Financial Market Commission (Comisión para el Mercado Financiero) authorized the increase of the Bank's capital and the amendment of its bylaws, in accordance with the resolutions approved at the mentioned shareholders extraordinary meeting, as set forth in Articles 31 and 52 of the General Banking Law, Article 127 of the Chilean Corporations Act and other applicable regulations.
The Extraordinary Meeting of Itaú Corpbanca’s Board of Directors held on August 12, 2021 approved, among other matters, the following: (a) proceed with the issuance of 461,111,111,111 ordinary shares related to the Bank's capital increase approved at the aforementioned Shareholders’ Meeting; (b) request the registration of the agreed-to-be-issued 461,111,111,111 shares before the Financial Market Commission (Comisión para el Mercado Financiero) and the Stock Exchanges in Chile, so that they may be traded in the Chilean local market; (c) require the registration of the new American Depositary Shares before the Securities and Exchange Commission of the United States of America and the New York Stock Exchange; (d) offer and place the agreed-to-be-issued 461,111,111,111 shares as per the procedure set forth in the aforementioned Board Meeting; and (e) postpone the pricing of the shares for a later date.
Through Resolution No. 5230, dated September 15, 2021, the Financial Market Commission (Comisión para el Mercado Financiero) authorized the registration in the Securities Registry of 461,111,111,111 shares issued under the capital increase agreed by the Bank's Extraordinary Shareholders' Meeting held on July 13, 2021.
461,111,111,111 of the new shares issued under the Bank’s capital increase will be offered at the price of $1.80 per share, as set forth in the Extraordinary Meeting of Itaú Corpbanca’s Board of Directors held on September 23, 2021.
Others
Between July 1 and September 9, 2021, the date of issuance of these Condensed Consolidated Financial Statements, there have been no other events after the reporting period that could affect the presentation and results of the financial statements.
Roxana Zamorano |
| Gabriel Moura | |
Chief Accounting Officer | | Chief Executive Officer | |
| |
Itaú Corpbanca and subsidiaries – Unaudited Condensed Consolidated Financial Statements – June 30, 2021 | F-87 |