Operator: Ladies and gentlemen, thank you for standing by and welcome to the Banco Itaú Chile Q3 2026 financial results conference call. This presentation and the Q3 2026 earnings release are available on our investor relations website. During the company's presentation, all microphones will be disabled. Later, we will begin the Q&A session. To ask questions on audio, click on raise hand and state your name and company. You will then receive a request to activate your microphone. Please activate your microphone to ask the questions. To ask questions in writing, just queue the question in the Q&A button. Please be aware that your company's name should be visible for your questions to be taken. I would now like to turn the conference over to Matías Valenzuela, Head of Planning and Corporate Strategy.
Matías Valenzuela: Good morning, everyone, and thank you for joining our Q3 earnings conference call. I would like to note that the voices used in this presentation were generated using artificial intelligence. My name is Matías Valenzuela, Head of Planning and Corporate Strategy at Itaú Chile, and I am joined today by our CEO, André Gailey, our CFO, Emiliano Muratore, and our Chief Economist, Andrés Pérez. I would also like to remind you that this presentation may include forward-looking statements. Actual results may differ materially from those discussed. As always, we report under our managerial model, which reflects how we allocate capital, manage risk, and assess performance internally. This framework provides a transparent and consistent view of underlying earnings and aligns management decisions with shareholder value. For additional detail, please refer to our management commentary. With that, I will turn the presentation over to our CEO, André Gailey. Good morning, André.
André Gailey: Good morning, everyone, and thank you for joining us today. It is a pleasure to be with you again as we discuss Itaú Chile's results for the quarter. Let me begin with the key developments of the period. Overall, we are pleased with the progress we delivered this quarter. In Chile, commercial activity remained strong, supported by continued client engagement and solid execution across our businesses. This translated into robust loan growth, while we remained disciplined in terms of origination and risk selection. Our Chilean loan portfolio grew 10.4% year-on-year, significantly outpacing the banking industry and allowing us to continue gaining market share. Importantly, this growth has not come at the expense of asset quality. Credit performance remained favorable throughout the quarter, with cost of credit declining to its lowest level of the year, reflecting the quality of the portfolio and our continued focus on disciplined underwriting.
André Gailey: At the same time, our earnings trajectory continued to improve, supported by a stronger revenue contribution and a favorable evolution in credit costs and operating efficiency. Chile delivered its strongest quarterly result of 2026, with recurring net income increasing more than 20% sequentially and ROE reaching 14.3%. The improvement reflected higher client-related revenues, together with a recovery in market-related income following the weaker performance observed earlier in the year. This was complemented by cost of credit reaching its lowest level of 2026 and continued discipline on expenses, resulting in a more balanced earnings contribution across the main components of the P&L. We also reached an important milestone in Colombia with the completion of the retail portfolio transfer. This represents a significant step in the strategic repositioning of our Colombian franchise toward a simpler and more focused corporate operation.
André Gailey: Finally, we continue to make progress across our strategic priorities, particularly in customer experience, digital innovation, and culture. We are proud to have been recognized for the fifth consecutive year as the leader in customer satisfaction, reinforcing our commitment to a differentiated client experience. Together, these developments reinforce our confidence in the direction of the franchise and in our ability to combine growth with disciplined risk management and improving profitability. With that, I will hand the floor to Andrés Pérez, who will walk us through the macroeconomic outlook for Chile and Colombia. Good morning, Andrés.
Andrés Pérez: Good morning, André. Good morning, everyone. On this slide, I will provide a brief overview of Chile's recent economic performance and outlook. Economic activity weakened further during the third quarter, reflecting a significant disruption in the mining sector together with continued softness in domestic demand. Heavy rainfall in northern Chile led to a sharp decline in mining production, while labor market conditions, investment, and household confidence also remained weak. Against this backdrop, we expect GDP to contract by approximately 0.3% in 2026. For 2027, we continue to expect a recovery, with growth reaching around 2.8%, supported by a stronger investment pipeline, reconstruction initiatives, and elevated copper prices. The inflation outlook has also become more challenging, although the recent increase in pressures remains largely supply-driven. Higher fuel prices and the depreciation of the Chilean peso have increased near-term inflation risks, while underlying inflation remains comparatively contained.
Andrés Pérez: Weak domestic demand, labor market slack, and a negative output gap should limit broader second-round effects. Under this scenario, we now expect inflation to end 2026 at approximately 4.9% before gradually converging toward 3.2% by the end of 2027. Against this backdrop, we expect the central bank to maintain the monetary policy rate at 4.5% throughout 2027. In October, the central bank moved toward a more balanced and data-dependent stance, reflecting renewed inflation concerns related to FX and rising energy costs. At the same time, subdued domestic activity limits the case for policy rate hikes. Overall, the current policy stance appears well-positioned to balance these two-sided risks, although the balance of risks has shifted somewhat to the upside. On the currency front, we now forecast the Chilean peso at approximately 955 Chilean pesos per US dollar at the end of 2026 and 920 Chilean pesos at the end of 2027.
Andrés Pérez: The peso remains under pressure from elevated oil prices, higher global long-term rates, and a more hawkish Fed outlook, which have outweighed the support provided by strong copper prices. Nevertheless, Chile continues to benefit from a sizable trade surplus, providing an important external buffer against global volatility. Looking beyond the near-term macro weakness, we are also seeing a more supportive policy environment for investment and financial activity. Two initiatives are particularly relevant. First, the capital markets reform, currently in discussion in Congress, seeks to deepen Chile's financial markets, broaden financing alternatives, and strengthen the development of the local capital market. For the banking industry, one of the most relevant initiatives is FONAVI, which aims to increase mortgage market liquidity by mobilizing public and private capital into housing finance. Over time, this could provide banks with greater flexibility to manage mortgage portfolios and support additional lending capacity.
Andrés Pérez: The reform also includes measures aimed at increasing flexibility in asset management, broadening investment alternatives, and facilitating access to capital markets. This could support further development in areas such as asset and wealth management, as well as create additional opportunities in investment banking and market-based financing. Second, the National Reconstruction and Economic and Social Development Law combines near-term support for reconstruction, housing, and employment with broader incentives for private investment, including greater tax certainty and a gradual reduction in the corporate tax rate. For the banking system, the impact would be primarily macro-driven.
Andrés Pérez: A recovery in investment and construction activity should support demand for corporate and commercial credit, while housing-related measures could provide an additional tailwind to mortgage activity. While the near-term environment in Chile remains challenging, we see a more constructive backdrop emerging for 2027, supported by investment, strong external fundamentals, and a more supportive environment for private sector activity.
Andrés Pérez: Turning now to Colombia. Economic activity lost some momentum during Q3, particularly following the August earthquake, which temporarily affected manufacturing, construction, agriculture, and services. However, we expect this weakness to be largely transitory, with reconstruction activity supporting a gradual recovery in the coming quarters. Against this backdrop, we expect GDP growth of approximately 2.4% in both 2026 and 2027. Domestic demand remains relatively resilient, although the widening trade deficit continues to reflect some imbalance between internal demand and external activity. The inflation outlook also remains challenging. Headline inflation is still well above the central bank's 3% target, despite some moderation in underlying inflation dynamics during Q3. We now expect inflation to end 2026 at approximately 7.0%, mainly reflecting renewed food price pressures associated with El Niño, before gradually declining to around 5.6% by the end of 2027.
Andrés Pérez: Importantly, inflation expectations also remain above target, reinforcing the need for monetary policy to remain restrictive for longer. Specifically on this matter, BanRep resumed its tightening cycle in September, bringing the policy rate to 12.25% and then held in October. We believe the cycle is close to its peak and expect the policy rate to end 2026 at approximately 12.5%. A gradual easing cycle should follow as inflation pressures begin to moderate, with the policy rate declining toward 11% by the end of 2027. For the Colombian peso, we now forecast an exchange rate of approximately 3,100 Colombian pesos per US dollar at the end of both 2026 and 2027. The currency is supported by high local interest rates, which have led to favorable rate differentials. At the same time, fiscal developments have become increasingly important for the macro outlook and for local risk premiums.
Andrés Pérez: In this context, fiscal consolidation has therefore moved to the forefront. The government has announced spending cuts for the remainder of 2026 and submitted a broader fiscal rescue law aimed at containing the deterioration in the fiscal accounts from 2027 onward. While these measures represent an important step toward restoring fiscal credibility, execution risks remain significant, and fiscal balances are expected to remain under pressure over the next two years. With that, I will now hand the presentation over to our CFO, Emiliano Muratore. Good morning, Emiliano.
Emiliano Muratore: Thank you, Andres, and good morning, everyone. Let me now highlight some of the progress we made on our strategy during the quarter. On brand penetration, we continued to strengthen Itaú's visibility and relevance in Chile. During the quarter, we expanded our sports platform, becoming the first bank to sponsor Team Chile, alongside major running, triathlon, and rugby events across the country, reinforcing our association with high performance, a core value of Itaú's culture. At the same time, brand consideration continues to strengthen, while both brand and advertising awareness maintain positive momentum and remain at high levels compared with historical performance. Customer experience also remains at the center of our strategy. We were recognized for the fifth consecutive year for leadership in client satisfaction in the Servitest by Ipsos, reinforcing the strength of our franchise and the importance of building deeper long-term relationships with our customers.
Emiliano Muratore: On customer experience, we were also once again recognized at the 2026 Alco Awards, receiving distinctions for both digital leadership and customer loyalty. Most notably, Itaú ranked first among banks in the NPS category, reinforcing the strength of our customer relationships. This recognition is particularly meaningful as it is based directly on our clients' assessment and continues a track record of recognition since 2023. We were also recognized in Extel's Latin American Financials and Banks Mid-Cap Ranking, with distinctions across several categories, including CEO, CFO, and Investor and Analyst Event. Our culture continues to be another important competitive advantage. During the period, Itaú was ranked fifth among Latin America's best workplaces by Great Place to Work, first in the Great Place to Work Women Ranking, and second in the Employers for Youth Chile 2026 Ranking, in addition to being recognized by Merco among Chile's leading companies for talent attraction.
Emiliano Muratore: These recognitions reflect our progress across several dimensions of our strategy: our people, our clients, our brand, and our ability to execute consistently. I will now walk you through our financial performance in greater detail, starting with our loan growth in Chile. Our loan portfolio continued to significantly outperform the market during the third quarter. Total loans grew 10.4% year on year and 3.1% quarter on quarter, compared with annual industry growth of 5.1%. Growth was broad-based across all of our major portfolios, while maintaining disciplined origination and a healthy risk profile. Importantly, this solid loan growth was accompanied by a favorable evolution in credit quality, with cost of credit improving during the quarter. Commercial loans increased 10.0% year on year and 3.6% quarter over quarter, with growth primarily driven by clients with strong credit ratings.
Emiliano Muratore: In the year-on-year comparison, 83% of the increase in commercial loans came from exposures rated A3 or better. This also contributed to an improvement in the overall credit profile of the portfolio, with A1 to A4 rating categories increasing their share from 72% to 78%, while exposure to higher-risk B and C categories declined from 9% to 7% in the last year. Consumer loans also returned to growth, increasing 3.1% year on year and 1.2% quarter on quarter. We have seen steady growth since June, with new money originations continuing to grow at a double-digit pace year on year while maintaining the selectivity of our origination standards. Mortgages remained particularly strong, growing 13.4% year on year and 2.7% compared to Q2, significantly above the industry, allowing us to continue gaining market share in this segment.
Emiliano Muratore: This combination of above-market growth and improving credit quality demonstrates both the strength of our commercial franchise and the robustness of our risk models and underwriting standards. Turning to funding. Our deposit franchise continues to develop positively and remains an important component of our client relationship strategy. Demand deposits grew 7.8% year on year, compared with approximately 5.2% for the banking system, allowing us to maintain the highest 12-month growth rate among our peer group. Growth was broad-based, with demand deposits from individuals increasing 9.4% and from companies increasing 9.2%. Time deposits increased 18.0% year on year, also positioning Itaú second among our peers in terms of 12-month growth, while AUM increased 12.0% year on year. Importantly, our client funding base has become structurally stronger over the past several years, with deposits to loans reaching 70.8% and deposits plus AUM to loans reaching 90.6%.
Emiliano Muratore: Turning to our main financial indicators. Financial margin with clients reached CLP 333.1 billion on a consolidated basis, down 0.8% from the previous quarter, but up 1.4% year on year. In Chile, it reached CLP 259.7 billion, increasing 2.1% during the quarter and remaining stable year on year, supported by higher loan volumes. Financial margin with the market reached CLP 14.5 billion on a consolidated basis, increasing 12.5% from Q2, although remaining below the level recorded a year ago. In Chile, we saw a meaningful recovery, with financial margin with the market reaching CLP 10.3 billion after the negative result recorded in Q2. Consolidated fee income reached CLP 58.9 billion, down 2.0% from the previous quarter, while increasing 26.3% year on year.
Emiliano Muratore: In Chile, fee income reached CLP 48.6 billion, down 1.9% during the quarter, but up 23.8% year on year, maintaining a strong annual growth trajectory. Consolidated cost of credit reached CLP 79.0 billion, increasing 5.3% from Q2, mainly reflecting higher provisions in Colombia, while declining 5.8% year on year. In Chile, credit performance remained favorable, with cost of credit declining 2.1% during the quarter and 6.7% year on year to CLP 57.1 billion, despite the strong growth of the loan portfolio. Altogether, these dynamics resulted in consolidated recurring net income of CLP 115.4 billion, increasing 5.9% from the previous quarter and 4.5% year on year. Chile delivered its strongest quarterly earnings performance of the year, with recurring net income reaching CLP 110.6 billion, up 23.6% quarter on quarter and 2.2% year on year.
Emiliano Muratore: As a result, consolidated recurring ROTE reached 11.9%, improving approximately 45 basis points from Q2. In Chile, recurring ROTE reached 14.3%, an improvement of approximately 270 basis points during the quarter and broadly stable year on year. Let me now go into more detail on financial margin with clients. Financial margin with clients increased 2.1% quarter on quarter to CLP 259.7 billion, while remaining broadly stable year on year. Compared to Q2, the improvement was mainly driven by higher average loan volumes, particularly across retail segments. This was partially offset by lower revenues from derivatives and FX transactions with clients. Compared with Q3 of last year, the result reflected a mix effect from stronger growth in mortgages and commercial loans, with commercial growth concentrated in higher-rated clients.
Emiliano Muratore: Together with continued competitive pressure on spreads, these effects were partially offset by higher derivatives and client FX revenues. As a result, the financial margin with clients rate declined from 3.2% in Q2 to 3.1% in Q3. This also reflects the timing of loan growth, as a significant portion of new origination occurred late in the quarter, particularly in September, and therefore its revenue contribution was not yet fully reflected in the average margin for the period. Importantly, despite competitive pressure and portfolio mix weighing on the headline margin rate, strong loan growth and the favorable evolution in cost of credit allowed us to preserve net financial margin with clients at 2.4%, reflecting the resilience of our risk-adjusted margin.
Emiliano Muratore: Turning to financial margin with the market, we saw a meaningful improvement during the quarter, increasing by approximately CLP 12.7 billion and returning to positive territory at CLP 10.3 billion compared with a negative CLP 2.4 billion in Q2. Banking remained a positive contributor, supported by effective asset and liability management and gains related to bond buybacks during the period. At the same time, market-making regained momentum, particularly rates trading, following the challenging market conditions experienced during H1 of the year. Looking ahead, our focus is on sustaining the positive contribution from banking while achieving greater stability in market-making results. This should support a more consistent contribution from financial margin with the market over time. Turning now to commissions and fees. Fee income remained broadly stable, declining 1.9% to CLP 48.6 billion, while maintaining very strong year-on-year momentum with growth of 23.8%.
Emiliano Muratore: The quarter-on-quarter comparison was mainly affected by insurance brokerage due to a one-off recorded in Q2. Excluding this effect, insurance brokerage revenues remained broadly stable compared with the previous quarter. This was offset by strong performance across several other businesses. Fees from credit operations and guarantees increased 26.5% quarter on quarter and 31.6% year on year, supported by greater activity in contingent operations, particularly guarantees. Financial advisory also performed strongly, supported by a solid project pipeline and higher execution during the quarter. In this context, advisory fees represented an increased share of total fees, reaching 6.6%. Asset management fees increased 1.7% sequentially and 10.8% year on year, consistent with continued growth in assets under management.
Emiliano Muratore: As a result, commissions and fees represented 15.6% of operating revenues during the first nine months of 2026, up from 13.6% in the same period of 2025, an increase of 200 basis points year on year. This reflects our continued progress in expanding more capital-light sources of revenue and building a more diversified income base. Turning to cost of credit, this remains one of the strongest aspects of our performance. Cost of credit declined to CLP 57.1 billion, down 2.1% from the previous quarter and 6.7% year on year, reaching its lowest level of 2026 and resulting in a ratio of 0.9%, below our original guidance range of 1.0% to 1.1%. This performance is particularly relevant considering that our loan portfolio has been growing significantly faster than the industry. The improvement was supported by lower provisions, particularly in the corporate portfolio, where credit performance remained favorable.
Emiliano Muratore: As mentioned earlier, loan growth has been primarily driven by clients with strong credit ratings, supporting the favorable evolution of our credit risk indicators, while retail risk also remained well-controlled. Asset quality indicators continued to improve. Total NPLs declined to 1.8% from 1.9% in the previous quarter and 2.1% in the same period of last year. Consumer NPLs improved to 2.5%, while commercial NPLs declined to 1.8%. Mortgage NPLs increased slightly to 1.7%. Importantly, this mainly reflects the longer write-off cycle of mortgage loans rather than a deterioration in the underlying credit quality of the portfolio. Finally, our coverage ratio remained robust at approximately 138%. Turning to the next slide, let me provide some more detail on non-interest expenses. Non-interest expenses declined 2.4% quarter over quarter to CLP 137.0 billion, reflecting a favorable evolution in administrative expenses, partially offset by higher personnel costs.
Emiliano Muratore: Personnel expenses increased 1.9%, mainly reflecting higher equity-linked incentive costs, partially offset by lower expenses associated with our headcount. Meanwhile, administrative expenses declined 8.3%, driven by lower general expenses, operational losses, and IT and telecommunications costs. Year on year, total non-interest expenses increased 3.0%, remaining below the 4.1% year-on-year inflation rate. This movement reflects higher equity-linked incentive costs, partially offset by lower administrative expenses. Most importantly, stronger revenue generation combined with disciplined cost management drove a significant improvement in efficiency. Our efficiency ratio improved to 43.0% in the Q3, from 46.6% in the Q2 and 48.2% in the Q1, reflecting a consistent improvement throughout the year. This reinforces our focus on operating leverage, continuing to invest in the capabilities required to support growth while maintaining discipline over the overall cost base. Turning now to Colombia.
Emiliano Muratore: The Q3 marked a major milestone in the transformation of our Colombian operation. The transfer of the retail banking portfolio to Banco de Bogotá was completed at the end of July, with the effective transfer of the portfolios and clients taking place from 1 August. As a result, our Colombian operation is now more focused, centered on corporate, treasury, and our specialized subsidiaries. The impact of the transaction is clearly reflected in the significant reduction of our operating footprint. Headcount declined from approximately 1,758 employees in June to 1,255 in September, while the branch network was reduced from 65 to 25 locations. The transaction also materially reduced the size of the operation. Total assets declined from approximately CLP 9.7 trillion in June to CLP 7.5 trillion in September, primarily reflecting the transfer of the consumer and mortgage portfolios.
Emiliano Muratore: Commercial loans, however, remained broadly stable at approximately CLP 4.1 trillion, illustrating that our core corporate franchise remains in place. At the same time, the transfer of the retail loan portfolio resulted in an improved client funding profile. While retail deposits were also transferred as part of the transaction, the reduction in loans was proportionally larger, strengthening the self-funding position of the remaining operation. As a result, the deposits-to-loans ratio increased from 97% in June to 110% in September. Looking ahead, our focus is on consolidating this new operating model and progressively improving its earnings contribution. While profitability may still reflect some transition effects in the near term, we believe the new structure provides a stronger foundation to deliver more sustainable returns over time. Turning now to the financial performance of our Colombian operation in the quarter.
Emiliano Muratore: Before discussing the results, it is important to note that the Q3 reflects one month of the full operation and two months under the new perimeter, following the transfer of the retail loan and deposit portfolios on 1 August. This should be considered when interpreting the quarter-on-quarter evolution of the main P&L lines. Financial margin declined to CLP 79.3 billion during the quarter, reflecting the change in the operating perimeter. Financial margin with clients was primarily affected by the transfer of the consumer and mortgage portfolios, while financial margin with the market remained positive but declined due to the smaller balance sheet and a higher comparison base in the Q2. On the other hand, commissions and fees remained resilient during the quarter, reaching CLP 10.3 billion, supported mainly by higher advisory and asset management fees.
Emiliano Muratore: This performance highlights the increasing relevance of fee-generating businesses within the new perimeter of our Colombian operation. Cost of credit increased to COP 21.9 billion, with the cost of credit ratio reaching 1.7%, mainly reflecting higher country risk provisions and rating changes in the corporate segment during the quarter. As a result, recurring net income reached CLP 4.8 billion, with an ROE of 2.4% in the Q3. These results reflect a transition quarter for Colombia as the operation adjusts to its new perimeter. Our focus is now on improving profitability and efficiency while building a more consistent and sustainable earnings contribution over time. Turning now to capital. Our capital position remains solid and aligned with our risk appetite. CET1 stood at approximately 11.4% in September, compared with 11.5% in June.
Emiliano Muratore: From a capital perspective, the transfer of the Colombian retail portfolio resulted in a meaningful reduction in risk-weighted assets and the corresponding release of capital. This helped absorb the non-recurring expenses associated with the transaction, leaving the overall impact on our consolidated capital position broadly neutral. At the same time, our CET1 ratio remains above the median of our main peers, despite loan growth significantly outpacing the industry during the quarter. This provides us with sufficient capacity to continue supporting sustainable business growth. Turning briefly to our stock performance. Over the 12 months through 30 October, Itaú Chile shares delivered a cumulative return of approximately 27.9%, outperforming both the IPSA and the weighted average of our peers. Over the same period, our share price increased from approximately CLP 17,124 to CLP 21,900, while our price-to-tangible book value multiple expanded from approximately one time to 1.2 times.
Emiliano Muratore: This performance reflects increasing market recognition of the progress we are making across growth, profitability, capital allocation, and strategic execution. Let me conclude by reviewing our performance against our 2026 guidance for Chile and the revisions we are making to our full-year outlook. Starting with loan growth, our portfolio grew 10.4% year-on-year through September, remaining above both our initial expectations and industry growth. Given this strong performance, we are raising our full-year guidance from 6% to 8% to 7% to 9%, while maintaining our disciplined approach to origination. Financial margin with clients averaged 3.2% during the first nine months, slightly below our original guidance range of 3.3% to 3.5%. Considering the dynamics discussed earlier, we now expect the full-year average margin to be approximately 3.2%. Fee income has grown approximately 10% year-to-date, showing a clear improvement compared with the first semester, although still below our initial expectations.
Emiliano Muratore: We are therefore revising our full-year growth guidance from 12% to 14% to 11% to 13%. Cost of credit continues to perform better than expected, reaching 0.9% year-to-date, its lowest quarterly level of the year in Q3. Given the favorable evolution of asset quality, we now expect the full-year cost of credit ratio to be approximately 1.0%, compared with our previous range of 1.0% to 1.1%. Non-interest expenses have increased 2.9% year-to-date, and we are maintaining our full-year expectation of approximately 2% growth, supported by continued cost discipline. Our managerial effective tax rate reached approximately 13% year-to-date, below our previous expectation of around 15%, mainly reflecting higher inflation. We are therefore revising our full-year guidance to approximately 13%. in October, the National Reconstruction and Economic and Social Development Law introduced a gradual reduction in the corporate tax rate to 23% by 2029.
Emiliano Muratore: As a result, we expect a one-off negative impact of approximately CLP 32 billion in Q4 from the remeasurement of deferred taxes, which is not included in our managerial tax rate guidance. Finally, ROE reached 12% year-to-date, while our Q3 ROE was 14.3%, reflecting the improvement in the underlying profitability of our Chilean franchise. Based on our current outlook, we are raising our full-year ROE expectation from the previous 12% to 13% range to approximately 13%. These revisions reflect a combination of stronger-than-expected loan growth and credit quality, alongside some pressure on client margins and fee growth. Importantly, we expect to close the year with profitability at the upper end of our original expectations. Thank you for your time and continued interest in Itaú Chile. With that, we will be happy to take your questions.
Operator: To ask questions on audio, click on Raise Hand and state your name and company. You will then receive a request to activate your microphone. Please activate your microphone to ask the questions. To ask questions in writing, just queue the question in the Q&A button. Please be aware that your company name should be visible for your questions to be taken. Our first question comes from Ernesto Gabilondo of Bank of America. You can open a microphone, sir.
Ernesto Gabilondo: Thank you. Hi, good morning, André, Emiliano, and Matías. Congrats on your results, and thanks for the opportunity to ask questions. My first question will be on loan growth. For this year, Itaú Chile has been outpacing the industry and taking market share, and all of this with good asset quality. Can you remind us of which banks are you mainly taking market share? For this year, you were saying you are expecting loan growth to be between 7% and 9%, and this is by practically no economic growth. Just wondering for next year, if the economy expands to 2.8%, can we expect Itaú Chile's loan growth to expand at the double digits? If you can elaborate a little bit on your expectations per segment, it will be helpful. Thank you.
Emiliano Muratore: Hello, Ernesto. Good morning. Thank you for your question. Regarding loan growth, basically, if you look at the public figures, we are gaining market share against most of our peer group. Most of the medium to large banks, with the exception of BCI, that is the only other bank who is gaining market share. Going forward, we do expect to keep growing above the market, even though maybe the speed of growth could slow down from where we are now, because this year has been particularly higher the multiple we are showing in growth compared to the system, to the peer groups. Having said that, speed is slowing down, but it is still growing slightly above the system in the high single-digit territory for the rest of this year and also for 2027. The second question, can you repeat it, Ernesto, please?
Ernesto Gabilondo: No, so it was that. It was just if you can also elaborate a little bit on your expectations per segment.
Emiliano Muratore: Okay. It is similar to what we are seeing this year. I am talking about the latest speed of growth where consumer, commercial, and mortgages are going in the high single digits. Mortgages a bit more because of inflation indexation to the UF. I do not foresee a significant difference in the different portfolios or segments, and still, with good asset quality across the board. Growing in a very prudent and conservative approach to the risk profile.
Ernesto Gabilondo: Perfect. Thank you. Just a second question in terms of your return on tangible equity trajectory. For this year, you are expecting to be around 13%. Any preliminary outlook for next year? It could be a little bit going higher, but I do not know if you can start to give us kind of a guidance.
Emiliano Muratore: We are not providing guidance for next year yet. I mean, but we keep our medium-term range of 13% to 15% ROE range. I mean, the H2 of this year, we are going to be in the midpoint of that range, and the full year at the lower part, and next year should be still in that kind of wide range, and we will provide further guidance in the Q1, well, in the Q4 call by the beginning of next year.
Ernesto Gabilondo: Perfect. Thank you very much.
Operator: Our next question comes from Diego Marquez from JP Morgan. You can open a microphone, sir.
Diego Marquez: Hey, good morning, everyone. Thanks for the space for questions. Just a quick one on Colombia here. Following the divestment, what levels of ROTE can we expect for the next few quarters? Do you have a target for the medium and long term? Then a second question regarding if we expect any more non-recurring expenses after the sale going forward. Thank you.
André Gailey: Hi, Diego. Good morning. We expect a few small impacts this year because of some accelerated depreciations we still have during the year. We do not expect any more non-recurring expenses for the next year. For the next year, we are expecting ROTEs for Colombia more closer to the higher single digits, and we will work on growing the operation and making it more efficient so that we can go for our cost of capital in 2 to 3 years, as we explained in the previous calls.
Diego Marquez: Oh, great. Very clear. Thank you. Just a follow-up, if I may, on hedges. I believe you were hedged until full 2026, but do you expect to keep on hedging against UF inflation in 2027, or what is the strategy going forward?
Emiliano Muratore: Yes. I mean, today, we are not fully hedged. I mean, we have a kind of a small exposure to inflation for the rest of this year and the beginning of next year. Having said that, yeah, we do not expect to have a significant exposure to inflation or UF in the top line because we will be, let us say, fully or close to fully hedged as part of our risk management strategy.
Diego Marquez: Oh, great. Very clear. Thank you.
Operator: Our next question comes from Daniel Mora Ardila of Credicorp Capital. You can open a microphone, sir.
Daniel Mora Ardila: Hi, good morning. Thank you for the presentation. I have a couple of questions about Colombia from my side. The first one is regarding margins. I would like to understand what will be the rate of financial margin with clients in Colombia on a normalized basis, considering already the fully corporate-focused structure, because we expect some pressures in the short term given the increase in the deposit-to-loan ratio and also the lower yield in commercial loans. So it will help to understand what you expect in that front. The second question is also about Colombia, cost of risk. With Colombia now focused almost entirely on commercial lending, what is currently keeping the cost of risk elevated, and what would you consider a normalized level going forward? Thank you so much.
Emiliano Muratore: Daniel, in terms of financial margin for this new kind of corporate banks, you can expect to have definitely tighter spreads in the portfolio, considering that all the retail part is not going to be there anymore. But also, you mentioned the increase in rates maybe putting some pressure on funding costs. But it is also true that we are still benefiting from the new balance sheet structure where we do have still excess liquidity. First, because basically we received money because it was more the level of assets and liabilities than we transferred, and we received cash for the net. Also, we are in the process of, let us say, improving or optimizing the funding base now that we do need further funding for the business.
Emiliano Muratore: That is going to be maybe a tailwind counterbalancing the kind of pressure in the mix, because now we are going to be a full corporate bank. Going to net margins or cost of risk, to your second question, we are still in the process of normalizing the cost of risk. We do see going forward, as we said in efficiency, that we are starting a process of improving the efficiency of the operation. We are, I would say, also in that path in improving or normalizing the cost of risk to the new situation. Those two elements should help the financial margin with clients going forward, because the gross margin should stabilize and the cost of risk improve going forward. That is another kind of lever in this path to taking our ROTE in Colombia closer to cost of equity in the coming 2, 3 years.
Daniel Mora Ardila: Perfect. Thank you so much. Very clear.
Operator: The next question comes from Alonso Aramburú of BTG Pactual. You can open a microphone.
Alonso Aramburú: Hi. Good morning. Thank you for the call. I wanted to ask about margins in Chile. You mentioned the timing of loan growth towards the end of the quarter as impacting slightly margins. Should we expect a small improvement, assuming rates remain stable in Chile, when you think about margins with clients?
Emiliano Muratore: I mean, you should expect, yes, more stabilization and kind of stop the deterioration, because at the end, the deterioration is part of the growth that we are having that was especially strong in Q3. With loan growth kind of slowing down a bit and rates stabilizing, and with maybe some upwards risk in terms of monetary policy rates, the outlook going forward should be stable to positive in terms of margins.
Alonso Aramburú: Okay. Thank you.
Operator: The next question comes from Andres Soto of Santander. You can open a microphone.
Andrés Soto: Good morning to all, and thank you for the presentation. A follow-up on the margins side, but now looking both to asset mix and funding mix. Can you tell us a little bit of what are your expectation in terms of, first, the competitive environment in Chile? In terms of the strategy of the company, are you still focused on growing share in mortgages, or how do you see the plan moving forward? On the funding side, we continue to see you guys getting more deposits faster than competitors. Do you think that there is still space for you to continue improving your funding structure, particularly in checking and savings accounts?
André Gailey: Hi, Andres. Our core strategy is growing demand deposits, so we believe we are working to grow it above the industry, focusing on transactions, experiences for client, all the digital experience that we offer, and the value proposition of the bank as a whole. We are also growing other part of investments, and we believe that will slowly improve the quality of our funding over time. Finally, in terms of mortgage, we believe that with all the incentives that the government is proposing or making for the industry as a whole, that the whole market will grow next year as well, and we will keep our participation in this market.
Andrés Soto: Thank you very much. In terms of your sensitivity to inflation, should we assume that this is going to increase over time?
André Gailey: No, since we have a hedging policy.
Andrés Soto: You do not want to change that? You want to keep price neutral in regards to inflation?
Emiliano Muratore: Yes, I would say yes, but remember that we do have a sensitivity in the tax rate to inflation, and that is something that we are going to keep. That is basically like USD 1.5 million for every 10 basis points in inflation that we do have in sensitivity there, that it is, in relative terms, I mean, higher than peers because of all the investments we have in Colombia that it also readjusts for inflation. But in terms of top line, we do not plan to have a significant exposure to inflation. We plan to keep it in the low part of the peer group in relative terms.
Andrés Soto: That is very clear. Thank you.
Operator: Once again, to ask questions on audio, click on Raise Hand and state your name and company. To ask questions in writing, just queue the question in the Q&A button. Please be aware that your company's name should be visible for your questions to be taken. Please hold while we pull for questions. Thank you. This concludes today's presentation. You may disconnect now and have a nice day.
