Exhibit 1

BANCO DE CHILE AND SUBSIDIARIES

Index

I.	Interim Condensed Consolidated Statements of Financial Position
II.	Interim Condensed Consolidated Statements of Comprehensive Income
III.	Interim Condensed Consolidated Statements of Changes in Equity
IV.	Interim Condensed Consolidated Statements of Cash Flows
V.	Notes to the Interim Condensed Consolidated Financial Statements

MCh$	=	Millions of Chilean pesos
ThUS$	=	Thousands of U.S. dollars
UF or CLF	=	Unidad de Fomento
		(The Unidad de Fomento is an inflation-indexed, Chilean peso denominated monetary unit set daily in advance on the basis of the previous month’s inflation rate).
Ch$ or CLP	=	Chilean pesos
US$ or USD	=	U.S. dollars
JPY	=	Japanese yen
EUR	=	Euro
MXN	=	Mexican pesos
HKD	=	Hong Kong dollars
PEN	=	Peruvian nuevo sol
CHF	=	Swiss franc
IFRS	=	International Financial Reporting Standards
IAS	=	International Accounting Standards
RAN	=	Compilation of Norms of the Chilean Superintendency of Banks
IFRIC	=	International Financial Reporting Interpretations Committee
SIC	=	Standards Interpretation Committee

BANCO DE CHILE AND SUBSIDIARIES

INDEX

		Page
Interim Condensed:
Consolidated Statement of Financial Position			3
Consolidated Statement of Comprehensive Income			4
Consolidated Statement of Changes in Equity			6
Consolidated Statement of Cash Flows			7
Notes to the Interim Condensed Consolidated Financial Statements			8
1.	Company Information:		8
2.	Basis of Preparation and Other Information:		8
3.	Basis of Preparation and Changes to the Bank’s Accounting Policies:		10
4.	Segment Reporting:		14
5.	Cash and Cash Equivalents:		20
6.	Derivative Instruments and Accounting Hedges:		21
7.	Loans to Customers, net:		23
8.	Investment in Other Companies:		27
9.	Income Tax:		30
10.	Debt Issued:		31
11.	Contingencies and Commitments:		34
12.	Payment of Dividends and Earnings per Share:		38
13.	Related Party Transactions:		39
14.	Fair Value of Financial Assets and Liabilities:		43
15.	Offsetting financial assets and financial liabilities		51
16.	Financial Risk Management:		53
17.	Subsequent Events:		57

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2012 and September 30, 2013

(Expressed in million of Chilean pesos, unless otherwise specified)

					Unaudited		Unaudited
	Notes	December 31, 2012 MCh$			September 30, 2013 MCh$		September 30, 2013 ThUS$
ASSETS
Cash and due from banks	5		684,925			998,770		1,979,056
Transactions in the course of collection	5		310,077			506,318		1,003,266
Financial assets held-for-trading			159,682			317,627		629,376
Cash collateral on securities borrowed and reverse repurchase agreements			35,100			20,501		40,623
Derivative instruments	6		326,083			286,959		568,607
Loans and advance to banks			1,343,322			676,953		1,341,378
Loans to customers, net	7		18,383,958			20,010,809		39,651,275
Financial assets available-for-sale			1,272,316			1,792,453		3,551,733
Investments in other companies			11,674			14,436		28,605
Intangible assets			75,610			73,397		145,436
Property and equipment			205,189			198,797		393,915
Investments properties			16,698			16,412		32,520
Current tax assets			—			975		1,932
Deferred tax assets, net			55,801			47,816		94,747
Other assets			317,765			299,200		592,863
TOTAL ASSETS			23,198,200			25,261,423		50,055,332
LIABILITIES
Current accounts and other demand deposits			5,470,971			5,927,692		11,745,679
Transactions in the course of payments	5		72,684			306,905		608,130
Cash collateral on securities lent and repurchase agreements			226,396			223,409		442,683
Saving accounts and time deposits			9,612,950			10,332,890		20,474,548
Derivate instruments	6		380,322			360,848		715,018
Borrowings from financial institutions			1,108,681			876,247		1,736,277
Debt issued	10		3,273,933			4,056,885		8,038,689
Other financial obligations			162,123			174,967		346,696
Current tax liabilities			23,189			—		—
Provisions			141,839			1,852		3,670
Employee benefits			64,545			60,648		120,174
Other liabilities			305,105			247,931		491,275
TOTAL LIABILITIES			20,842,738			22,570,274		44,722,839
EQUITY
Attributable to equity holders of the parent:
Capital			1,629,078			1,849,351		3,664,476
Reserves			296,937			345,400		684,408
Other comprehensive income			25,769			20,191		40,008
Retained earnings:
Retained earnings from previous periods			65,311			65,311		129,413
Income for the year			478,120			410,895		814,186
Less:
Provisions for minimum dividend			(139,755	)		—		—
Non-controlling interest			2			1		2
TOTAL EQUITY			2,355,462			2,691,149		5,332,493
TOTAL LIABILITIES AND EQUITY			23,198,200			25,261,423		50,055,332

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

3

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the nine and three-month periods ended September 30, 2012 and 2013

(Expressed in million of Chilean pesos, unless otherwise specified)

		Unaudited			Unaudited			Unaudited			Unaudited			Unaudited
		Three-month period ended September 30, 2012			Nine-month period ended September 30, 2012			Three-month period ended September 30, 2013			Nine-month period ended September 30, 2013			Nine-month period ended September 30, 2013
	Notes	MCh$			MCh$			MCh$			MCh$			ThUS$
A. STATEMENT OF INCOME
Interest revenue			356,015			1,191,129			492,080			1,277,260			2,530,882
Interest expense			(143,722	)		(497,974	)		(210,148	)		(503,902	)		(998,478	)
Net interest income			212,293			693,155			281,932			773,358			1,532,404
Income from fees and commissions			91,393			275,326			95,760			288,092			570,852
Expense from fees and commissions			(30,465	)		(62,826	)		(23,800	)		(72,238	)		(143,139	)
Net fees and commissions income			60,928			212,500			71,960			215,854			427,713
Net financial operating income			1,455			8,491			24,239			33,137			65,661
Foreign exchange transactions, net			9,259			24,829			(5,216	)		36,764			72,848
Other operating income			5,259			16,100			4,043			17,924			35,516
Total operating revenues			289,194			955,075			376,958			1,077,037			2,134,142
Provision for loan losses			(37,687	)		(118,551	)		(55,959	)		(154,460	)		(306,061	)
OPERATING REVENUES, NET OF PROVISIONS FOR LOAN LOSSES			251,507			836,524			320,999			922,577			1,828,081
Personnel expenses			(79,229	)		(231,632	)		(78,390	)		(234,191	)		(464,048	)
Administrative expenses			(60,218	)		(176,048	)		(63,133	)		(184,309	)		(365,207	)
Depreciation and amortization			(8,945	)		(26,874	)		(7,457	)		(20,202	)		(40,030	)
Impairments			(518	)		(648	)		(124	)		(133	)		(264	)
Other operating expenses			3,652			(22,842	)		(3,049	)		(10,420	)		(20,647	)
TOTAL OPERATING EXPENSES			(145,258	)		(458,044	)		(152,153	)		(449,255	)		(890,196	)
NET OPERATING INCOME			106,249			378,480			168,846			473,322			937,885
Income attributable to associates			(67	)		648			402			1,792			3,551
Income before income taxes			106,182			379,128			169,248			475,114			941,436
Income taxes	9		(3,689	)		(41,631	)		(21,290	)		(64,218	)		(127,248	)
NET INCOME FOR THE PERIOD			102,493			337,497			147,958			410,896			814,188
Attributable to:
Equity holders of the parent			102,492			337,496			147,957			410,895			814,186
Non-controlling interest			1			1			1			1			2
Net income per share from continued operations attributable to equity holders of the parent:	12
Basic net income per share					$	3.78					$	4.42		US$	0.009
Diluted net income per share						3.78						4.42			0.009

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

4

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the three and nine-month periods ended September 30, 2012 and 2013

(Expressed in million of Chilean pesos, unless otherwise specified)

	Unaudited			Unaudited			Unaudited			Unaudited			Unaudited
	Three-month period ended September 30, 2012			Nine-month period ended September 30, 2012			Three-month period ended September 30, 2013			Nine-month period ended September 30, 2013			Nine-month period ended September 30, 2013
	MCh$			MCh$			MCh$			MCh$			ThUS$
B. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
NET INCOME FOR THE PERIOD		102,493			337,497			147,958			410,896			814,188
OTHER COMPREHENSIVE INCOME
Net unrealized gains (losses):
Net change in unrealized gains (losses) on available for sale instruments		12,648			23,294			2,096			9,324			18,476
Gains and losses on derivatives held as cash flow hedges		393			1,294			(165	)		(16,389	)		(32,475	)
Cumulative translation adjustment		(38	)		(65	)		(6	)		39			77
Other comprehensive income before income taxes		13,003			24,523			1,925			(7,026	)		(13,922	)
Income tax related to other comprehensive income		(2,880	)		(4,880	)		(351	)		1,448			2,869
Total other comprehensive income items that will be reclassified subsequently to profit or loss		10,123			19,643			1,574			(5,578	)		(11,053	)
Other comprehensive income that will not be reclassified subsequently profit or loss		—			—			—			—			—
TOTAL OTHER COMPREHENSIVE INCOME		10,123			19,643			1,574			(5,578	)		(11,053	)
TOTAL CONSOLIDATED COMPREHENSIVE INCOME		112,616			357,140			149,532			405,318			803,135
Attributable to:
Equity holders of the parent		112,615			357,139			149,532			405,318			803,135
Non-controlling interest		1			1			—			—			—
Comprehensive net income per share attributable to equity holders of the parent:
Basic net income per share				$	4.00					$	4.36		US$	0.009
Diluted net income per share					4.00						4.36			0.009

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

5

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the nine month period ended September 30, 2012 and 2013

(Expressed in million of Chilean pesos, unless otherwise specified)

				Reserves				Other comprehensive income								Retained earnings
		Paid-in capital		Other reserves		Reserves from earnings		Unrealized gains (losses) on available- for- sale instruments		Cumulative translation adjustment			Cash flow hedge adjustment			Retained earnings from previous periods		Income for the period			Provision for minimum dividends			Attributable to equity holders of the parent			Non- controlling interest			Total equity
	Notes	MCh$		MCh$		MCh$		MCh$		MCh$			MCh$			MCh$		MCh$			MCh$			MCh$			MCh$			MCh$
Balances as of January 1, 2011			1,436,083		99,293		130,171		696		(36	)		(395	)		65,311		438,186			(128,642	)		2,040,667			2			2,040,669
Capitalization of retained earnings			73,911		—		—		—		—			—			—		(73,911	)		—			—			—			—
Retention (release) of earnings			—		67,473		—		—		—			—			—		(67,473	)		—			—			—			—
Dividends distributed and paid			—		—		—		—		—			—			—		(296,802	)		128,642			(168,160	)		(1	)		(168,161	)
Cumulative translation adjustment			—		—		—		—		(65	)		—			—		—			—			(65	)		—			(65	)
Valuation adjustment on available-for-sale instruments (net)			—		—		—		22,508		—			—			—		—			—			22,508			—			22,508
Cash flow hedge adjustment, net			—		—		—		—		—			1,044			—		—			—			1,044			—			1,044
Subscription and payment of shares			—		—		—		—		—			—			—		—			—			—			—			—
Income for the year			—		—		—		—		—			—			—		337,496			—			337,496			—			337,496
Provision for minimum dividends			—		—		—		—		—			—			—		—			—			—			—			—
Balances as of September 30, 2012			1,509,994		166,766		130,171		23,204		(101	)		649			65,311		337,496			—			2,233,490			1			2,233,491
Balances as of January 1, 2012			1,629,078		99,293		197,644		24,829		(94	)		1,034			65,311		478,120			(139,755	)		2,355,460			2			2,355,462
Capitalization of retained earnings			86,202		—		—		—		—			—			—		(86,202	)		—			—			—			—
Retention (release) of earnings			—		48,463		—		—		—			—			—		(48,463	)		—			—			—			—
Dividends distributed and paid			—		—		—		—		—			—			—		(343,455	)		139,755			(203,700	)		(1	)		(203,701	)
Cumulative translation adjustment			—		—		—		—		39			—			—		—			—			39			—			39
Valuation adjustment on available-for-sale instruments (net)			—		—		—		7,495		—			—			—		—			—			7,495			—			7,495
Cash flow hedge adjustment, net			—		—		—		—		—			(13,112	)		—		—			—			(13,112	)		—			(13,112	)
Subscription and payment of shares			134,071		—		—		—		—			—			—		—			—			134,071			—			134,071
Income for the year			—		—		—		—		—			—			—		410,895			—			410,895			—			410,895
Provision for minimum dividends			—		—		—		—		—			—			—		—			—			—			—			—
Balances as of September 30, 2013			1,849,351		147,756		197,644		32,324		(55	)		(12,078	)		65,311		410,895			—			2,691,148			1			2,691,149

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

6

BANCO DE CHILE AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine-month periods ended September 30, 2012 and 2013

(Expressed in million of Chilean pesos, unless otherwise specified)

		Unaudited			Unaudited			Unaudited
		September 30,			September 30,			September 30,
		2012			2013			2013
	Notes	MCh$			MCh$			ThUS$
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income for the year			337,497			410,896			814,188
Items that do not represent cash flows:
Depreciation and amortization			26,874			20,201			40,028
Impairment of property and equipment			648			133			264
Provision for loan losses			144,334			182,117			360,864
Provision for contingent loans			670			2,664			5,279
Fair value adjustment of financial assets held-for-trading			626			(282	)		(559	)
(Income) loss attributable to investments in other companies	8		(648	)		(1,792	)		(3,551	)
(Income) loss on sales of assets received in lieu of payment			(5,246	)		(3,627	)		(7,187	)
(Income) loss on sales of property and equipment			(224	)		(205	)		(406	)
Charge-offs of assets received in lieu of payment			—			—			—
Other credits (debits) that do not represent cash flows			(466	)		(2,523	)		(4,999	)
(Gain) loss from foreign exchange transactions of other assets and other liabilities			(38,070	)		(55,566	)		(110,104	)
Net changes in interest and fee accruals			21,374			17,595			34,864
Changes in assets and liabilities that affect operating cash flows:
(Increase) decrease in loans and advances to banks, net			(144,957	)		666,372			1,320,411
(Increase) decrease in loans to customers, net			(1,308,555	)		(1,791,297	)		(3,549,442	)
(Increase) decrease in financial assets held-for-trading, net			2,403			(157,534	)		(312,152	)
(Increase) decrease in deferred taxes, net	9		(3,285	)		7,983			15,818
Increase (decrease) in current account and other demand deposits			107,096			456,348			904,250
Increase (decrease) in payables from repurchase agreements and securities lending			56,397			21,656			42,911
Increase (decrease) in savings accounts and time deposits			673,172			717,671			1,422,060
(Increase) decrease in other operating assets and liabilities			(3,101	)		(27,782	)		(55,050	)
Proceeds from sale of assets received in lieu of payment			7,074			5,593			11,082
Total cash flows from operating activities			(126,387	)		468,621			928,569
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
(Increase) decrease in financial assets available for sale			(31,547	)		(505,623	)		(1,001,888	)
Purchases of property and equipment			(15,285	)		(8,535	)		(16,912	)
Proceeds from sales of property and equipment			119			491			973
Purchases of intangible assets			(6,001	)		(3,773	)		(7,476	)
Investments in other companies			(71	)		(1,440	)		(2,853	)
Dividends received from investments in other companies			915			931			1,845
(Increase) decrease in other assets and liabilities			(1,101	)		(790	)		(1,565	)
Total cash flows from investing activities			(52,971	)		(518,739	)		(1,027,876	)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Increase in mortgage finance bonds			—			—			—
Repayment of mortgage finance bonds			(20,791	)		(15,869	)		(31,444	)
Proceeds from bond issuances	10		815,989			1,245,262			2,467,478
Redemption of bond issuances			(244,075	)		(484,375	)		(959,786	)
Subscription and payment of shares			—			134,071			265,661
Dividends paid			(296,802	)		(343,455	)		(680,554	)
Increase (decrease) in borrowings from financial institutions			19,285			(392,878	)		(778,485	)
Increase (decrease) in other financial obligations			(33,206	)		15,731			31,171
Increase (decrease) in Borrowings from Central Bank			(22,793	)		—			—
Borrowings with Central Bank of Chile (long-term)			15			—			—
Payment of borrowings from Central Bank (long-term)			(48	)		(7	)		(14	)
Foreign borrowings			336,103			622,630			1,233,737
Payment of foreign borrowings			(815,838	)		(460,418	)		(912,315	)
Other long-term borrowings			666			538			1,066
Payment of other long-term borrowings			(4,270	)		(3,821	)		(7,571	)
Total cash flows from financing activities			(265,765	)		317,409			628,944
TOTAL NET POSITIVE (NEGATIVE) CASH FLOWS FOR THE YEAR			(445,123	)		267,291			529,637
Net effect of exchange rate changes on cash and cash equivalents			(34,148	)		33,848			67,070
Cash and cash equivalents at beginning of period			1,771,749			964,480			1,911,110
Cash and cash equivalents at end of period			1,292,478			1,265,619			2,507,817

	September 30,			September 30,			September 30,
	2012			2013			2013
	MCh$			MCh$			ThUS$
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest received		1,184,733			1,240,417			2,457,877
Interest paid		(478,675	)		(442,965	)		(877,732	)

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

7

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Company Information:

Banco de Chile is authorized to operate as a commercial bank since September 17, 1996, in conformity with the Article 25 of Law No. 19,396. Banco de Chile, resulting from the merger of Banco Nacional de Chile, Banco Agrícola and Banco de Valparaíso, was formed on October 28, 1893 in the city of Santiago, in the presence of the Notary Eduardo Reyes Lavalle.

Banco de Chile (“Banco de Chile” or the “Bank”) is a Corporation organized under the laws of the Republic of Chile, regulated by the Superintendency of Banks and Financial Institutions (“SBIF”), Since 2001, - when the bank was first listed on the New York Stock Exchange (“NYSE”), in the course of its American Depository Receipt (ADR) program, which is also registered at the London Stock Exchange – Banco de Chile additionally follows the regulations published by the United States Securities and Exchange Commission (“SEC”).

Until October 17, 2013, Banco de Chile’s shares also were listed on the Latin American securities market of the Madrid Stock Exchange (“LATIBEX”). For more details see Note No. 17 “Subsequent Events”

Banco de Chile offers a broad range of banking services to its customers, ranging from individuals to large corporations. The services are managed in large corporate banking, middle and small corporate banking, personal banking services and retail. Additionally, the Bank offers international as well as treasury banking services. The Bank’s subsidiaries provide other services including securities brokerage, mutual fund and investment management, factoring, insurance brokerage, financial advisory and securitization.

Banco de Chile’s legal address is Paseo Ahumada 251, Santiago, Chile and its website is www.bancochile.cl.

The Interim Condensed Consolidated Financial Statements of Banco de Chile, for the period ended September 30, 2013, were approved for issuance by the Board of directors on January 9, 2014.

2. Basis of Preparation and Other Information:

a) Basis of Preparation:

The Interim Condensed Consolidated Financial Statements for the nine-month period ended September 30, 2012 and 2013 have been prepared in accordance with International Accounting Standard 34 (IAS 34) “Interim Financial Reporting” as issued by the IASB.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Bank’s IFRS annual financial statements as of December 31, 2012, as filed with the SEC on April 26, 2013.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

8

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. Basis of Preparation and Other Information:, continued:

b) Use of Estimations and Judgments:

Preparing financial statements requires the Bank’s management to make judgments, estimations and assumptions that affect the application of accounting policies and the valuation of assets, liabilities, income and expenses presented. Real results could differ from these estimated amounts. Details on the use of estimates and judgment and their effect on the amounts recognised in the Interim Condensed Consolidated Financial Statement are included in the following notes:

1. Derivatives instruments and Accounting Hedges (Note No. 6)

2. Allowances for loan losses (Note No. 7)

3. Income tax (Note No. 9);

4. Commitments and contingencies (Note No. 11);

5. Fair value of financial assets and liabilities (Note No. 14);

There have been no significant changes to estimates made during the nine-month period 2013, except for the mentioned in Note No. 6.

c) Seasonality of Operations:

Due to the nature of its business, the Bank and its subsidiaries’ activities do not have a cyclical or seasonal character. Accordingly, no specific details regarding seasonality have been included on the notes to this Interim Condensed Consolidated Financial Statements.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

9

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3. Basis of Preparation and Changes to the Bank’s Accounting Policies:

The accounting policies applied in the preparation of the Interim Condensed Consolidated Financial Statements are consistent with those applied in the Annual Consolidated Financial Statements as of December 31, 2012, except for the adoption of new standards and interpretations as of January 1, 2013.

The Bank applies, for the first time, certain standards and amendments such as IFRS 10 – Consolidated Financial Statements, IFRS 11 – Joint Arrangements, IFRS 12 – Disclosure of Interest in Other Entities, IAS 19 – Employee Benefits and IFRS 13- Fair Value Measurement, IAS 1 – Presentation of Financial Statements and IFRS 7 – Financial Instruments: Disclosure. The nature and effect of these changes are disclosed bellow:

IAS 1 Presentation of Items of Other Comprehensive Income

This rule introduces a grouping of items presented in other comprehensive income (OCI). Items that could be reclassified (or recycled) to profit or loss at a future point in time (e.g., net gain on hedge of net investment, exchange differences on translation of foreign operations, net movement on cash flow hedges and net loss or gain on available-for-sale financial assets) now have to be presented separately from items that will never be reclassified (e.g., actuarial gains and losses on defined benefit plans and revaluation of land and buildings). The amendment affected presentation only and had no impact on the Bank’s financial position or performance.

IFRS 7 Financial Instruments: Disclosures Offsetting Financial Assets and Financial Liabilities

The amendment requires an entity to disclose information about rights to set-off financial instruments and related arrangements (e.g., cash collateral agreements). The disclosures would provide users with information that is useful in evaluating the effect of netting arrangements on an entity’s financial position. The new disclosures are required for all recognised financial instruments that are set off in accordance with IAS 32. The disclosures also apply to recognised financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether the financial instruments are set off in accordance with IAS 32. The Bank has disclosed the impact of master netting agreements on note No. 15 below. None of these netting arrangements qualify for netting under the requirements of IAS 32; therefore, financial instruments subject to netting arrangements are presented on a gross basis in the balance sheet.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

10

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3. Basis of preparation and changes to the Bank’s accounting policies, continued:

IFRS 10 Consolidated Financial Statements

IFRS 10 establishes a single control model that applies to all entities including special purposes entities. IFRS 10 replaces the parts of previously existing IAS 27 – Consolidated and Separate Financial Statements that dealt with consolidated financial statements and SIC – 12 Consolidation – Special Purposes Entities. IFRS 10 changes the definition of control such that an investor controls and investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The Bank and its subsidiaries performed an in-depth analysis on all entities to which they are exposed or have rights to variable returns in order to determine if entities, other than wholly owned entities, needs to be consolidated as result of controlling them under the new control definition. Although the Bank and its subsidiaries are exposed or have rights on variable returns on other entities, such as mutual and investment funds and some sponsored securitization vehicles, it has determined that no control exists over these entities and, therefore, there is no need to consolidate entities other than its wholly owned subsidiaries. Although there is no impact as to entities that need to be consolidated, new disclosures are required by IFRS 12.

IFRS 11 Joint Arrangements

IFRS 11 removes the option to account for jointly controlled entities using proportionate consolidation. Instead, the entity that meets the definition of a joint venture under IFRS 11 must be accounted for using the equity method.

Based on the above, the Bank has performed an in-depth review of its investment in Servipag Ltda. and Artikos Chile S.A. and has determined that these qualify as joint ventures. These entities were previously recorded under the equity method; therefore, there is no accounting impact. As result of the adoption of IFRS 12, some new disclosures are required for joint ventures. See Note No. 8 for further details.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

11

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3. Basis of preparation and changes to the Bank’s accounting policies, continued:

IFRS 12 Disclosure of Interest in Other Entities

IFRS 12 sets out the requirements for disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. As mentioned in previous paragraphs, the Bank has expanded and included some new disclosures required by IFRS 12 for associates, joint arrangements and structured entities on this interim period, as none of these disclosure requirements are applicable for interim condensed consolidated financial statements, unless significant events and transactions in the interim period requires that they be provided. See Note No. 8, for further details on some new additional disclosures.

IFRS 13 Fair Value Measurement

IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted.

The application of IFRS 13 has impacted fair value measurements related to derivatives by including the Bank’s own credit risk (commonly referred as to “Debit Value Adjustment”). During the nine month period ended September 30, 2013, the Bank recorded a gain of MCh$14,180 for this concept. See Note No. 6 for further details.

IFRS 13 also requires specific disclosures on fair values, some of which replace existing disclosure requirements in other standards, including IFRS 7 Financial Instruments: Disclosures. Some of these disclosures are specifically required for financial instruments by IAS 34.16A(j), thereby affecting the interim condensed consolidated financial statements period. The Bank provides these disclosures in Notes No. 14 and 15.

IAS 19 Employee Benefits

IAS 19 includes a number of amendments to the accounting for defined benefit plans, including actuarial gains and losses that are now recognised in Other Comprehensive Income (OCI) and permanently excluded from profit and loss; expected returns on plan assets that are no longer recognised in profit or loss, instead, there is a requirement to recognize interest on the net defined benefit liability (asset) in profit or loss, calculated using the discount rate used to measure the defined benefit obligation, and; unvested past service costs are now recognised in profit or loss at the earlier of when the related restructuring or termination costs are recognised.

The application of IAS 19 has not materially impacted the Consolidated Financial Statements of the Bank.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

12

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3. Basis of preparation and changes to the Bank’s accounting policies, continued:

The followings standards and improvements will be effective in upcoming period:

• IAS 32 Financial Instruments: Offsetting Financial Asset and Financial Liabilities – beginning on or after January 1, 2014. Early adoption is permitted.

• IAS 36 Impairment assets: Recoverable Amount Disclosures for Non-Financial Assets – beginning in January 1, 2014. Early adoption is permitted for the periods that the entity has applied IFRS 13.

• IAS 39 Financial Instruments Recognition and Measurement: Continuing hedge accounting after novation – beginning on or after January 1, 2014. Early adoption is permitted.

• IFRS 9 Financial Instruments – beginning on or after January 1, 2015.

• IFRS 10, IFRS 12 and IAS 27 Investments Entities – beginning on or after January 1, 2014. Early adoption is permitted.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

13

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. Segment Reporting:

For management purposes, the Bank has organized its operations and commercial strategies into four business segments, which are defined according to type of products and services offered and the target customers. These business segments are currently defined as follows:

Retail:	This segment focuses on individuals and small and medium-sized companies with annual sales up to 70,000UF, and the product offering focuses primarily on consumer loans, commercial loans, checking accounts, credit cards, credit lines and mortgage loans.
Wholesale:	This segment focused on corporate clients and large companies, whose annual revenue exceed 70,000UF, where the product offering focuses primarily on commercial loans, checking accounts and liquidity management services, debt instruments, foreign trade, derivative contracts and leases.
Treasury and Money Market Operations:
	This segment includes revenue associated with managing the Bank’s balance sheet (currencies, maturities and interest rates) and liquidity, including financial instrument and currency trading on behalf of the Bank itself, and lesser extent in the item “Interest revenue”
	Transactions on behalf of customers carried out by the Treasury are reflected in the respective aforementioned segments. These products are highly transaction-focused and include foreign exchange transactions, derivatives and financial instruments in general.
Subsidiaries:	This segment includes companies and corporations controlled by the Bank, whose financial results are obtained individually by the respective subsidiary. The companies that comprise this segment are:
	Entity
	•       Banchile Trade Services Limited
	•       Banchile Administradora General de Fondos S.A.
	•       Banchile Asesoría Financiera S.A.
	•       Banchile Corredores de Seguros Ltda.
	•       Banchile Factoring S.A. (*)
	•       Banchile Corredores de Bolsa S.A.
	•       Banchile Securitizadora S.A.
	•       Socofin S.A.
	•       Promarket S.A.

^(*)  On July 1, 2013, Banco de Chile has absorbed its subsidiary Banchile Factoring S.A. This subsidiary was previously presented under the subsidiaries operating segment. As result of being absorbed by the Bank, its operations are now presented under the retail and wholesale operating segment. Previous periods operating segment information have been restated for comparative purposes.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

14

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. Segment Reporting, continued:

The financial information used to measure the performance of the Bank’s business segments is not necessarily comparable with similar information from other financial institutions because it is based on internal reporting policies. The accounting policies used to prepare the Bank’s business segment information are similar to those described in “Summary of Significant Accounting Principles”. The Bank obtains the majority of its income from: interest, revaluations and fees, discounts on credit cost and expenses. Management of the Bank is mainly based on these concepts and evaluates segment performance and decision-making regarding goals and allocation of resources for each segment individually. Although the results of the segments reconcile with those of the Bank at the consolidated level, it is not thus necessarily concerning the different concepts, since the management is measured and controls in individual form and additionally applies the following criteria:

• The net interest margin of loans and deposits is measured on an individual transaction and individual client basis, stemming from the difference between the effective customer rate and the Bank related fund transfer price in terms of maturity, re-pricing and currency.

• The internal performance profitability system considers capital allocation in each segment in accordance with the Basel guidelines.

• Operating expenses are distributed at each area level. The Bank allocates all of its indirect operating costs to each business segment by utilizing a different cost driver in order to allocate such costs to the specific segment.

The Bank did not enter into transactions with any customer or third party that exceeded 10% or more of its total income during the nine-month periods ended September 30, 2012 or 2013.

Transfer pricing between business segments is on an arm’s length basis, similar to transactions with third parties.

Taxes are managed at a corporate level and are not allocated to business segments.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

15

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. Segment Reporting, continued:

The following table presents the results for the nine-month period ended September 30, 2013 and as of December 31, 2012 for each of the segments defined above:

	Unaudited
	Nine-months period ended September 30, 2012
	Retail MCh$			Wholesale MCh$			Treasury MCh$			Subsidiaries MCh$			Subtotal MCh$			Reclassifications and adjustments to conform IFRS MCh$			Note (*)	Total MCh$
Net interest income		487,212			190,492			9,006			(9,394	)		677,316			15,839				693,155
Net fees and commissions income		114,031			29,896			(210	)		77,211			220,928			(8,428	)			212,500
Other operating income		10,485			20,538			11,574			23,463			66,060			(16,640	)			49,420
Total operating revenue		611,728			240,926			20,370			91,280			964,304			(9,229	)	(1)		955,075
Provisions for loan losses		(137,831	)		176			84			(12	)		(137,583	)		19,032		(2)		(118,551	)
Depreciation and amortization		(15,617	)		(5,511	)		(999	)		(1,140	)		(23,267	)		(3,607	)	(3)		(26,874	)
Other operating expenses		(287,295	)		(87,677	)		(5,360	)		(63,309	)		(443,641	)		12,471		(4)		(431,170	)
Income attributable to associates		383			193			21			259			856			(208	)			648
Income before income taxes		171,368			148,107			14,116			27,078			360,669			18,459				379,128
Income taxes																			(5)		(41,631	)
Income after income taxes																					337,497
	As of December 31, 2012
	Retail MCh$			Wholesale MCh$			Treasury MCh$			Subsidiaries MCh$			Subtotal MCh$			Reclassifications and adjustments to conform IFRS MCh$			Note (*)	Total MCh$
Assets		9,666,888			9,325,032			3,746,908			1,123,750			23,862,578			(720,179	)			23,142,399
Current and deferred taxes														99,506			(43,705	)			55,801
Total assets														23,962,084			(763,884	)	(6)		23,198,200
Liabilities		7,548,472			8,978,963			4,495,605			908,796			21,931,836			(1,112,287	)			20,819,549
Current and deferred taxes														23,189			—				23,189
Total liabilities														21,955,025			(1,112,287	)	(7)		20,842,738

(*) See page 17

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

16

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. Segment Reporting, continued:

Reclassifications and adjustments to conform IFRS

(1) The total effect due to the elimination adjustments to conform the total operating revenue is MCh$(10,189). The total effect of IFRS adjustments is MCh$960, which mainly stems from the reclassification of allowances for loan losses, amortization of fair value loans from Citibank Chile and embedded derivatives.

(2) The total effect relates to IFRS adjustments of MCh$19,032, which mainly stem from differing allowances for loan losses.

(3) The total effect relates to IFRS adjustments of MCh$(3,607), which stem from the amortization of intangibles and depreciation of property and equipment from Citibank Chile.

(4) The total effect due to the elimination adjustments to conform other operating expenses is MCh$10,189. The total effect of IFRS adjustments is MCh$2,282, which represents reversal of write-offs of assets received in lieu of payments.

(5) The total effect relates to IFRS adjustments of MCh$(8,869), which stem from deferred taxes.

(6) The total effect due to the elimination adjustments to conform the consolidated financial position data in assets is MCh$(731,339). The total effect of IFRS adjustments in assets is MCh$(32,545), which mainly stems from deviating allowances for loan losses, the acquisition of Citibank Chile and deferred taxes effects.

(7) The total effect due to the elimination adjustments to conform the consolidated financial position data in liabilities is MCh$(731,339). The total effect of IFRS adjustments in liabilities is MCh$(380,948), which mainly stems from providing for minimum dividends and differing allowances for loan losses.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

17

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. Segment Reporting, continued:

The following table presents the results for the nine-month period ended September 30, 2013 and for each of the segments defined above:

	Unaudited
	Nine-months period ended September 30, 2013
	Retail MCh$			Wholesale MCh$			Treasury MCh$			Subsidiaries MCh$			Subtotal MCh$			Reclassifications and adjustments to conform IFRS MCh$			Note (*)	Total MCh$
Net interest income		537,089			222,301			11,350			(9,266	)		761,474			11,884				773,358
Net fees and commissions income		114,030			32,458			(371	)		77,996			224,113			(8,259	)			215,854
Other operating income		22,652			36,980			2,996			24,878			87,506			319				87,825
Total operating revenue		673,771			291,739			13,975			93,608			1,073,093			3,944		(1)		1,077,037
Provisions for loan losses		(157,492	)		(16,276	)		(45	)		(2	)		(173,815	)		19,355		(2)		(154,460	)
Depreciation and amortization		(15,027	)		(4,233	)		(765	)		(1,307	)		(21,332	)		1,130		(3)		(20,202	)
Other operating expenses		(289,682	)		(79,940	)		(5,623	)		(67,336	)		(442,581	)		13,528		(4)		(429,053	)
Income attributable to associates		1,060			618			65			301			2,044			(252	)			1,792
Income before income taxes		212,630			191,908			7,607			25,264			437,409			37,705				475,114
Income taxes																			(5)		(64,218	)
Income after income taxes																					410,896
Assets		10,449,900			10,629,302			3,914,817			305,107			25,299,126			(86,494	)			25,212,632
Current and deferred taxes														138,979			(40,120	)			98,859
Total assets														25,438,105			(126,614	)	(6)		25,311,491
Liabilities		7,983,563			9,897,353			5,074,678			217,788			23,173,382			(603,108	)			22,570,274
Current and deferred taxes														38,894			11,174				50,068
Total liabilities														23,212,276			(591,934	)	(7)		22,620,342

(*) See page 19

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

18

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. Segment Reporting, continued:

Reclassifications and adjustments to conform IFRS

(1) The total effect due to the elimination adjustments to conform the total operating revenue is MCh$(10,171). The total effect of IFRS adjustments is MCh$14,115, which mainly stems from the reclassification of allowances for loan losses, amortization of fair value loans from Citibank Chile and embedded derivatives.

(2) The total effect relates to IFRS adjustments of MCh$19,355, which mainly stem from differing allowances for loan losses.

(3) The total effect relates to IFRS adjustments of MCh$1,130, which stem from the amortization of intangibles and depreciation of property and equipment from Citibank Chile.

(4) The total effect due to the elimination adjustments to conform other operating expenses is MCh$10,171. The total effect of IFRS adjustments is MCh$3,357, which represents reversal of write-offs of assets received in lieu of payments.

(5) The total effect relates to IFRS adjustments of MCh$(7,547), which stem from deferred taxes.

(6) The total effect due to the elimination adjustments to conform the consolidated financial position data in assets is MCh$(184,787). The total effect of IFRS adjustments in assets is MCh$58,173, which mainly stems from deviating allowances for loan losses, the acquisition of Citibank Chile and deferred taxes effects.

(7) The total effect due to the elimination adjustments to conform the consolidated financial position data in liabilities is MCh$(184,787). The total effect of IFRS adjustments in liabilities is MCh$(407,147), which mainly stems from providing for minimum dividends and differing allowances for loan losses.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

19

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5. Cash and Cash Equivalents:

(a) Details of cash and cash equivalents and their reconciliation to the statement of cash flows at each period are as follows:

			Unaudited
	December 31,		September 30,
	2012		2013
	MCh$		MCh$
Cash and due from banks:
Cash		400,249		465,027
Current account with the Chilean Central Bank		67,833		88,083
Deposits in other domestic banks		15,295		44,986
Deposits abroad		201,548		400,674
Subtotal – Cash and due from banks		684,925		998,770
Transactions in the course of collection		237,393		199,413
Highly liquid financial instruments		33,042		48,266
Repurchase agreements		9,120		19,170
Total cash and cash equivalents		964,480		1,265,619

Amounts in cash and Central Bank deposits are regulatory reserve deposits for which the Bank must maintain a defined monthly average.

(b) Transactions in the course of collection:

Transactions in the course of settlement are transactions for which the only remaining step is settlement, which will increase or decrease the funds in the Central Bank or in foreign banks, normally occurring within 12 to 24 business hours, and are detailed as follows:

			Unaudited
	December 31,		September 30,
	2012		2013
	MCh$		MCh$
Assets
Documents drawn on other banks (clearing)		249,019		200,263
Funds receivable		61,058		306,055
Subtotal transactions in the course of collection		310,077		506,318
Liabilities
Funds payable		72,684		306,905
Subtotal transactions in the course of payment		72,684		306,905

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

20

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6. Derivative Instruments and Accounting Hedges:

(a) As of December 31, 2012 and September 30, 2013, the Bank’s portfolio of derivative instruments is detailed as follows:

	As of December 31, 2012
			Fair value
	Notional amount contract		Asset		Liability
	MCh$		MCh$		MCh$
Derivatives held for hedging of fair value
Cross currency swap		147,572		—		10,332
Interest rate swap		161,747		—		21,311
Total derivatives held for hedging purposes		309,319		—		31,643
Derivatives held as cash flow hedges
Interest rate swap and cross currency swap		300,239		22		2,055
Total Derivatives held as cash flow hedges		300,239		22		2,055
Derivatives held-for-trading purposes
Currency forward		10,211,593		66,752		81,790
Cross currency swap		4,769,597		177,403		166,182
Interest rate swap		11,253,780		81,093		97,870
Call currency options		102,725		472		395
Put currency options		67,277		341		387
Others		—		—		—
Total derivatives held-for-trading purposes		26,404,972		326,061		346,624
Total		27,014,530		326,083		380,322

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

21

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6. Derivative Instruments and Accounting Hedges:

	Unaudited
	As of September 30, 2013
			Fair value
	Notional amount contract		Asset		Liability
	MCh$		MCh$		MCh$
Derivatives held for hedging of fair value
Cross currency swap		135,017		—		11,805
Interest rate swap		158,141		547		12,096
Total derivatives held for hedging purposes		293,158		547		23,901
Derivatives held as cash flow hedges
Interest rate swap and cross currency swap		293,158		11,408		9,074
Total Derivatives held as cash flow hedges		293,158		11,408		9,074
Derivatives held-for-trading purposes
Currency forward		9,697,349		50,911		54,395
Cross currency swap		5,400,737		148,429		189,733
Interest rate swap		14,262,467		72,465		80,332
Call currency options		195,766		2,015		2,528
Put currency options		102,479		1,184		885
Others		—		—		—
Total derivatives held-for-trading purposes		29,658,798		275,004		327,873
Total		30,245,114		286,959		360,848

As mentioned on Note 3, as result of the adoption of IFRS 13, the Bank has made a modification to the derivatives valuation model in order to include of the Bank’s own credit risk, commonly referred as “Debit Value Adjustment” (DVA) in the valuation of derivatives. As result of this valuation model change, the Bank has recorded a gain of MCh$14,180, during the nine month period ended September 30, 2013. As required by IFRS 13, this change was applied prospectively since January 1, 2013.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

22

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7. Loans to Customers, net:

(a) Loans to Customers:

As of December 31, 2012 and September 30, 2013, the composition of the portfolio of loans is the following:

	As of December 31, 2012
	Assets before allowances						Allowances established
	Normal Portfolio		Substandard Loans		Total		Individual Provisions			Group Provisions			Total			Net assets
	MCh$		MCh$		MCh$		MCh$			MCh$			MCh$			MCh$
Commercial loans
Commercial loans		8,294,828		256,342		8,551,170		(53,952	)		(67,746	)		(121,698	)		8,429,472
Foreign trade loans		1,149,923		91,032		1,240,955		(55,216	)		(491	)		(55,707	)		1,185,248
Current account debtors		187,246		2,153		189,399		(2,418	)		(2,504	)		(4,922	)		184,477
Factoring transactions		597,266		8,871		606,137		(9,535	)		(556	)		(10,091	)		596,046
Commercial lease transactions (1)		1,084,877		28,395		1,113,272		(3,528	)		(9,136	)		(12,664	)		1,100,608
Other loans and accounts receivable		35,736		4,911		40,647		(620	)		(1,974	)		(2,594	)		38,053
Subtotal		11,349,876		391,704		11,741,580		(125,269	)		(82,407	)		(207,676	)		11,533,904
Mortgage loans
Mortgage bonds		103,241		5,974		109,215		—			(724	)		(724	)		108,491
Transferable mortgage loans		148,243		2,963		151,206		—			(527	)		(527	)		150,679
Other residential real estate mortgage loans		3,897,642		40,124		3,937,766		—			(14,829	)		(14,829	)		3,922,937
Credits from ANAP		27		—		27		—			—			—			27
Other loans and accounts receivable		113		340		453		—			—			—			453
Subtotal		4,149,266		49,401		4,198,667		—			(16,080	)		(16,080	)		4,182,587
Consumer loans
Consumer loans in installments		1,761,070		145,203		1,906,273		—			(124,886	)		(124,886	)		1,781,387
Current account debtors		235,122		9,944		245,066		—			(6,950	)		(6,950	)		238,116
Credit card debtors		654,976		25,010		679,986		—			(31,996	)		(31,996	)		647,990
Other loans and accounts receivable		183		6		189		—			(215	)		(215	)		(26	)
Subtotal		2,651,351		180,163		2,831,514		—			(164,047	)		(164,047	)		2,667,467
Total		18,150,493		621,268		18,771,761		(125,269	)		(262,534	)		(387,803	)		18,383,958

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

23

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7. Loans to Customers, net, continued:

(a) Loans to Customers, continued:

	Unaudited As of September 30, 2013
	Assets before allowances						Allowances established
	Normal Portfolio		Substandard Loans		Total		Individual Provisions			Group Provisions			Total			Net assets
	MCh$		MCh$		MCh$		MCh$			MCh$			MCh$			MCh$
Commercial loans
Commercial loans		9,352,646		269,568		9,622,214		(50,425	)		(83,971	)		(134,396	)		9,487,818
Foreign trade loans		1,156,287		97,969		1,254,256		(59,715	)		(514	)		(60,229	)		1,194,027
Current account debtors		272,299		3,015		275,314		(3,440	)		(3,141	)		(6,581	)		268,733
Factoring transactions		505,217		7,268		512,485		(1,230	)		(1	)		(1,231	)		511,254
Commercial lease transactions (1)		1,164,031		30,950		1,194,981		(5,205	)		(9,876	)		(15,081	)		1,179,900
Other loans and accounts receivable		31,007		5,824		36,831		(556	)		(3,267	)		(3,823	)		33,008
Subtotal		12,481,487		414,594		12,896,081		(120,571	)		(100,770	)		(221,341	)		12,674,740
Mortgage loans
Mortgage bonds		86,668		5,835		92,503		—			(485	)		(485	)		92,018
Transferable mortgage loans		125,367		2,741		128,108		—			(440	)		(440	)		127,668
Other residential real estate mortgage loans		4,298,350		57,998		4,356,348		—			(16,086	)		(16,086	)		4,340,262
Credits from ANAP		24		—		24		—			—			—			24
Other loans and accounts receivable		4,878		370		5,248		—			(1	)		(1	)		5,247
Subtotal		4,515,287		66,944		4,582,231		—			(17,012	)		(17,012	)		4,565,219
Consumer loans
Consumer loans in installments		1,840,424		157,519		1,997,943		—			(133,395	)		(133,395	)		1,864,548
Current account debtors		232,704		10,638		243,342		—			(7,940	)		(7,940	)		235,402
Credit card debtors		676,461		26,908		703,369		—			(32,498	)		(32,498	)		670,871
Other loans and accounts receivable		183		313		496		—			(467	)		(467	)		29
Subtotal		2,749,772		195,378		2,945,150		—			(174,300	)		(174,300	)		2,770,850
Total		19,746,546		676,916		20,423,462		(120,571	)		(292,082	)		(412,653	)		20,010,809

(1) In this item, the Bank finances its customers purchases of assets, including real estate and other personal property, through finance lease agreements. As of September 30, 2013, MCh$504,912 (MCh$451,647 as of December 31, 2012) correspond to finance leases for real estate and MCh$690,069 (MCh$661,625 as of December 31, 2012), correspond to finance leases for other assets.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

24

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7. Loans to customers, net, continued

(b) Allowances for loan losses:

Movements in allowances for loan losses during December 2012 and the nine-month period ended September 30, 2013 are as follows:

	Allowances
	Individual			Group			Total
	MCh$			MCh$			MCh$
Balance as of January 1, 2012		138,628			224,113			362,741
Charge-offs:
Commercial loans		(9,144	)		(34,020	)		(43,164	)
Mortgage loans		—			(4,253	)		(4,253	)
Consumer loans		—			(135,316	)		(135,316	)
Total charge-offs		(9,144	)		(173,589	)		(182,733	)
Allowances established		13,668			212,010			225,678
Allowances released		(17,883	)		—			(17,883	)
Balance as of December 31, 2012		125,269			262,534			387,803
Balance as of January 1, 2013		125,269			262,534			387,803
Charge-offs:
Commercial loans		(5,934	)		(19,473	)		(25,407	)
Mortgage loans		—			(2,569	)		(2,569	)
Consumer loans		—			(116,244	)		(116,244	)
Total charge-offs		(5,934	)		(138,286	)		(144,220	)
Debt exchange		(12,554	)		—			(12,554	)
Allowances established		13,790			167,834			181,624
Allowances released		—			—			—
Balance as of September 30, 2013 (unaudited)		120,571			292,082			412,653

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

25

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7. Loans to customers, net, continued

(c) Provision for loan losses

The movement for the nine-month period ended September 30, 2013 and 2012 is as follows:

	Unaudited						Unaudited
	Three-month period ended			Nine-month period ended			Three-month period ended			Nine-month period ended
	2012						2013
	MCh$			MCh$			MCh$			MCh$
Allowances established		(49,914	)		(167,452	)		(66,797	)		(193,340	)
Allowances released:
Loans to customers		2,661			19,033			737			8,559
Loans to banks		173			173			(5	)		—
Recovery of written-off assets		9,393			29,695			10,106			30,321
Total Provisions for Loan Losses		(37,687	)		(118,551	)		(55,959	)		(154,460	)

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

26

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

8. Investment in Other Companies:

Financial information of subsidiaries that have material non-controlling interests are provided bellow:

										Investment
		Ownership Interest				Equity				Book Value				Income (Loss)
		December		September		December		September		December		September		December			September
		2012		2013		2012		2013		2012		2013		2012			2013
Company	Shareholder	%		%		MCh$		MCh$		MCh$		MCh$		MCh$			MCh$
Investments recorded under the equity method
Associates
Soc. Operadora de Tarjetas de Crédito Nexus S.A.	Banco de Chile		25.81		25.81		6,412		7,501		1,655		1,936		313			402
Redbanc S.A.	Banco de Chile		38.13		38.13		4,109		4,366		1,567		1,665		574			140
Administrador Financiero del Transantiago S.A	Banco de Chile		20.00		20.00		6,076		9,425		1,215		1,885		(158	)		669
Transbank S.A.	Banco de Chile		26.16		26.16		6,306		6,016		1,649		1,574		227			214
Soc. Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A.	Banco de Chile		15.00		15.00		4,337		4,467		651		670		67			41
Centro de Compensación Automatizado S.A.	Banco de Chile		33.33		33.33		1,609		1,854		536		618		70			78
Sociedad Interbancaria de Depósitos de Valores S.A.	Banco de Chile		26.81		26.81		1,711		1,982		459		531		89			73
Sociedad Imerc OTC S.A.	Banco de Chile		—		14.49		—		9,952		—		1,440		—			—
Subtotal							30,560		45,563		7,732		10,319		1,182			1,617
Joint Venture
Servipag Ltda.	Banco de Chile		50.00		50.00		6,756		6,956		3,378		3,477		(210	)		100
Artikos Chile S.A	Banco de Chile		50.00		50.00		1,129		1,280		564		640		(324	)		75
Subtotal							7,885		8,236		3,942		4,117		(534	)		175
Total							38,445		53,799		11,674		14,436		648			1,792

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

27

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

8. Investment in Other Companies, continued:

(a) Associates:

(i) Summarised statement of profit or loss for September 2012 and 2013:

	Unaudited
	As of September 30,
	2012 MCh$			2013 MCh$
Revenue		154,686			138,018
Operating expenses		(147,725	)		(129,588	)
Administrative expenses		—			—
Other expenses		630			77
Income before income taxes		7,591			8,507
Income taxes		(1,226	)		(1,456	)
Net income for the period		6,365			7,051

(ii) Summarised statement of financial position for December 2012 and September 2013:

	Unaudited
	As of September 30,
	2012 MCh$			2013 MCh$
Current assets		335,634			457,830
Non-current assets		49,701			63,950
Current liabilities		(346,461	)		(470,174	)
Non-current liabilities		(2,444	)		(6,043	)
Equity		36,430			45,563

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

28

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

8. Investment in Other Companies, continued:

(b) Interest in a Joint Venture:

The Bank has a 50% interest in Servipag Ltda. and a 50% interest in Artikos S.A., two jointly controlled entity. Bank’s interest of both entities is accounted for using the equity method in the consolidated financial statements. Summarised financial information of the joint venture, based on its IFRS financial statements, and reconciliation with the carrying amount of the investment in consolidated financial statements are set out below:

	Unaudited
	Servipag Ltda						Artikos S.A
	December 31, 2012 MCh$			September 30, 2013 MCh$			December 31, 2012 MCh$			September 30, 2013 MCh$
Current Assets		37,139			46,219			441			737
Non-Current Assets		16,916			16,149			926			780
Current Liabilities		(44,068	)		(51,407	)		(239	)		(237	)
Non-Current Liabilities		(3,231	)		(4,008	)		—			—
Equity		6,756			6,953			1,128			1,280
Proportion of the Bank’s ownership		50	%		50	%		50	%		50	%
Carrying amount of the investment		3,378			3,477			564			640

Summarised statement of profit or loss of the Servipag Ltda.

	Unaudited
	Servipag Ltda						Artikos S.A
	December 31, 2012 MCh$			September 30, 2013 MCh$			December 31, 2012 MCh$			September 30, 2013 MCh$
Revenue		36,645			25,988			2,451			1,867
Operating expenses		(36,404	)		(25,111	)		(885	)		(556	)
Operating revenue		241			877			1,566			1,311
Other expenses		(729	)		(522	)		(2,149	)		(1,161	)
Profit before tax		(488	)		355			(583	)		150
Income tax expense		(154	)		(155	)		(272	)		—
Profit for the year		(642	)		200			(855	)		150
Bank’s share of profit for the year		(321	)		100			(428	)		75

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

29

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

9. Income Tax:

(a) Income Tax

The Bank’s tax expense recorded for the nine-month period ended September 30, 2012 and 2013 as follows:

	Unaudited			Unaudited			Unaudited			Unaudited
	Three-month period ended September 30, 2012 MCh$			Nine-month period ended September 30, 2012 MCh$			Three-month period ended September 30, 2013 MCh$			Nine-month period ended September 30, 2013 MCh$
Income tax expense - current		22,301			48,884			25,109			53,786
Credit (charge) for deferred taxes		(19,658	)		(9,000	)		(4,078	)		9,391
Non deductible expenses		1,035			1,740			258			1,049
Other		11			7			1			(8	)
Net charge to income for income taxes		3,689			41,631			21,290			64,218

(b) Reconciliation of effective tax rate

	Unaudited						Unaudited						Unaudited						Unaudited
	Three-month period ended September 30, 2012						Nine-month period ended September 30, 2012						Three-month period ended September 30, 2013						Nine-month period ended September 30, 2013
	Tax rate %			MCh$			Tax rate %			MCh$			Tax rate %			MCh$			Tax rate %			MCh$
Income tax calculated on net income before tax		20.00			21,237			20.00			75,826			20.00			33,850			20.00			95,023
Additions or deductions (*)		(6.70	)		(7,116	)		(6.74	)		(25,568	)		(7.46	)		(12,629	)		(6.06	)		(28,784	)
Non-deductible expenses		0.97			1,035			0.46			1,740			0.15			258			0.22			1,049
Tax from previous year		(0.01	)		(9	)		(0.30	)		(1,147	)		—			(4	)		0.01			52
Effect of changes in tax rate		(12.60	)		(13,379	)		(2.38	)		(9,029	)		—			—			—			—
Lease deferred tax adjustment		2.77			2,942			0.78			2,942			—			—			—			—
Others		(0.96	)		(1,021	)		(0.83	)		(3,133	)		(0.11	)		(185	)		(0.66	)		(3,122	)
Effective rate and income tax expense		3.47			3,689			10.99			41,631			12.58			21,290			13.51			64,218

(*) The deductions of the tax rate for 2012 and 2013 mainly relate to specific adjustment from tax-exempt distribution of income to SAOS

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

30

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

10. Debt Issued:

At the end of each period, debt issued is detailed as follows:

			Unaudited
	December 31, 2012 MCh$		September 30, 2013 MCh$
Mortgage bonds		115,196		92,922
Bonds		2,412,233		3,215,041
Subordinated bonds		746,504		748,922
Total		3,273,933		4,056,885

During the period ended as of September 30, 2013, Banco de Chile issued bonds by an amount of MCh$1,245,262, of which corresponds to Bonds and Subordinated Bonds by an amount of MCh$1,241,666 and MCh$3,596 respectively, according to the following details:

Bonds

Series	MCh$		Term	Interest rate %		Currency	Issued date	Maturity date
BCHIUR1011		22,114	12 years		3.40	UF	01/08/2013	01/08/2025
BCHIUR1011		8,521	12 years		3.40	UF	01/09/2013	01/09/2025
BCHIUJ0811		1,572	8 years		3.20	UF	01/29/2013	01/29/2021
BCHIUZ1011		89,313	7 years		3.20	UF	01/31/2013	01/31/2020
BCHIAC1011		45,456	15 years		3.50	UF	02/28/2013	02/28/2028
BCHIAC1011		34,185	15 years		3.50	UF	03/26/2013	03/26/2028
BCHIUN1011		72,022	7 years		3.20	UF	04/08/2013	04/08/2020
BCHIUU0212		68,379	12 years		3.40	UF	08/29/2013	08/29/2025
BCHIAU0213		69,746	12 years		3.60	UF	09/11/2013	09/11/2025
BCHIAG0213		46,585	5 years		3.40	UF	09/13/2013	09/13/2018
HKD bond		45,552	10 years		3.23	HKD	04/22/2013	04/22/2023
CHF bond		111,579	5 years		1.13	CHF	04/26/2013	05/23/2018
CHF bond		27,895	5 years		1.13	CHF	05/07/2013	05/23/2018
CHF bond		125,526	3 years		0.76	CHF	06/11/2013	07/18/2016
CHF bond		69,737	4 years		1.13	CHF	06/28/2013	07/25/2017
Subtotal as of September 30, 2013		838,182
Short-term Bonds (*)		403,484
Total as of September 30, 2013		1,241,666

^(*) On May 4, 2012, the Bank began issuing bonds denominated “Commercial Paper”, which are financial instruments of Money Market that the Bank will issue in the U.S. market for different maturities, but these terms will be not greater than 365 days.

During the nine-month period ended September 30, 2013, the Bank has privately placed bonds for a total of CHF600 million (US$635 million) in Switzerland and USD 90 million in Hong Kong. In addition to this, the Bank has registered a US$2 billion MTN (mid-term-notes) program in the Luxemburg Stock Exchange.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

31

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

10. Debt Issued, continued:

Subordinated Bonds

Series	MCh$		Term	Interest rate %		Currency	Issued date	Maturity date
UCHI-G1111		3,596	25 years		3.75	UF	01/25/2013	01/25/2038
Total as of September 30, 2012		3,596

During the year ended December 31, 2012, Banco de Chile issued bonds by an amount of Ch$1,233,985 million, of which correspond to unsubordinated bonds and Subordinated Bonds in an amount of MCh$1,207,808 and MCh$26,177 respectively, according to the following details:

Bonds

Series	MCh$		Term	Interest rate %		Currency	Issued date	Maturity date
BCHIUO0911		89,896	10 years		3.40	UF	02/15/2012	02/15/2022
BCHIUD0510		14,109	6 years		2.20	UF	02/16/2012	02/16/2018
BCHIUI0611		1,338	7 years		3.20	UF	03/05/2012	03/05/2019
BCHIUI0611		3,352	7 years		3.20	UF	03/07/2012	03/07/2019
BCHIUI0611		1,116	7 years		3.20	UF	03/23/2012	03/23/2019
BCHIUP1211		88,345	10 years		3.40	UF	04/04/2012	04/04/2022
BCHIUI0611		2,236	7 years		3.20	UF	04/17/2012	04/17/2019
BCHIUQ1011		27,343	11 years		3.40	UF	05/08/2012	05/08/2023
BCHIUQ1011		48,568	11 years		3.40	UF	05/11/2012	05/11/2023
BCHIUQ1011		12,449	11 years		3.40	UF	06/04/2012	06/04/2023
BCHIUS0212		46,428	11 years		3.40	UF	06/04/2012	06/04/2023
BCHIUS0212		20,552	11 years		3.40	UF	06/07/2012	06/07/2023
BCHIUT0112		66,850	12 years		3.40	UF	06/12/2012	06/12/2024
BCHIUR1011		33,295	12 years		3.40	UF	06/20/2012	06/20/2024
BONO HKD		24,487	15 years		4.00	HKD	09/05/2012	09/05/2027
BCHIUR1011		4,450	12 years		3.40	UF	07/30/2012	07/30/2024
BCHIUR1011		13,469	12 years		3.40	UF	09/14/2012	09/14/2024
BCHIUR1011		1,799	12 years		3.40	UF	09/24/2012	09/24/2024
BCHIUR1011		5,284	12 years		3.40	UF	09/25/2012	09/25/2024
Subtotal as of September 30, 2012		505,366
BCHIUJ0811		1,334	8 years		3.20	UF	10/05/2012	10/05/2020
BCHIUJ0811		33,456	8 years		3.20	UF	10/10/2012	10/10/2020
BCHIUV1211		67,842	13 years		3.50	UF	10/10/2012	10/10/2025
BCHIUJ0811		1,566	8 years		3.20	UF	10/19/2012	10/19/2020
BCHIUJ0811		2,241	8 years		3.20	UF	10/22/2012	10/22/2020
BCHIAC1011		11,118	15 years		3.50	UF	10/22/2012	10/22/2027
BONO HKD		54,374	15 years		4.00	HKD	11/07/2012	09/09/2027
BONO PEN		14,083	5 years		4.04	PEN	10/30/2012	10/30/2017
Subtotal as of December 31, 2012		186,014
Short-term Bonds		516,428
Total as of December 31, 2012		1,207,808

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

32

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

10. Debt Issued, continued:

Subordinated Bonds

Series	MCh$		Term	Interest rate %		Currency	Issued date	Maturity date
UCHI-G1111		13,191	25 years		3.75	UF	07/30/2012	07/30/2037
UCHI-G1111		1,099	25 years		3.75	UF	07/31/2012	07/31/2037
UCHI-G1111		1,782	25 years		3.75	UF	08/31/2012	08/31/2037
UCHI-G1111		10,105	25 years		3.75	UF	12/28/2012	12/28/2037
Total as of December 31, 2012		26,177

The Bank has complied with debt covenants for the nine-month period ended September 30, 2013 and 2012.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

33

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11. Contingencies and Commitments:

(a) Contingencies and commitments accounted for in off-balance-sheet accounts:

In order to satisfy its customers’ needs, the Bank entered into several irrevocable commitments and contingent obligations. Although these obligations are not recognised in the Statement of Financial Position, they entail credit risks and, therefore, form part of the Bank’s overall risk.

	December 31, 2012 MCh$		September 30, 2013 MCh$
Contingent loans
Guarantees and surety bonds		323,924		407,525
Confirmed foreign letters of credit		85,272		96,545
Issued letters of credit		138,714		199,807
Bank guarantees		1,437,312		1,497,238
Immediately available credit lines		5,481,235		5,762,208
Other commitments		122,997		672
Transactions on behalf of third parties
Collections		386,006		338,786
Third-party resources managed by the Bank:
Financial assets managed on behalf of third parties		12,144		976
Other Financial assets managed on behalf of third parties		—		—
Financial assets acquired on its own behalf		22,802		51,242
Other Financial assets acquired on its own behalf		—		—
Fiduciary activities
Securities held in safe custody in the Bank		6,237,859		7,226,202
Securities held in safe custody in other entities		4,483,567		4,529,305
Total		18,731,832		20,110,506

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

34

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11. Contingencies and Commitments, continued:

(b) Lawsuits and legal proceedings:

(b.1) Legal contingencies within the ordinary course of business:

In the ordinary course of business, the Bank and its subsidiaries act as defendant or co-defendant in various legal proceedings. Although there can be no assurances, the Bank’s management believes, based on information currently available, that the ultimate resolution of these legal proceedings are not likely to have a material adverse effect on its results of operations, financial position, or liquidity. As of September 30, 2013, the Bank has established provisions for these legal proceedings in the amount of MCh$240 (MCh$474 as of December 31, 2012), recorded within “Provisions” in the Interim Condensed Consolidated Statement of Financial Position. The following table presents the estimated date of completion of the respective litigation:

	September 30, 2013
	2013 MCh$		2014 MCh$		2015 MCh$		2016 MCh$		2017 MCh$		Total MCh$
Legal contingencies		30		5		67		135		3		240

(b.2) Contingencies for significant lawsuits:

As of September 30, 2013 and as of December 31, 2012 the Bank is not a party to any significant lawsuits that affect or may affect these consolidated financial statements.

(c) Guarantees granted:

i. In subsidiary Banchile Administradora General de Fondos S.A.:

In compliance with Article 226 and subsequent Articles of Law 18,045, Banchile Administradora General de Fondos S.A. has designated Banco de Chile as the representative of the beneficiaries of the guarantees it has established and in that character the Bank has issued bank guarantees totaling UF 2,465,500, maturing January 9, 2014 (UF 2,442,000, maturing on January 4, 2013 as of December 31, 2012).

In addition to these guarantees for creating mutual funds, there are other guarantees for a guaranteed return on certain mutual funds, totaling Ch$59,149 million as of September 30, 2013 (Ch$118,734 million as of December 31, 2012).

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

35

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11. Contingencies and Commitments, continued:

(c) Guarantees granted, continued:

The details of these guarantees are as follow:

Fund	December 31, 2012 MCh$		September 30, 2013 MCh$
Mutual fund Depósito Plus		14,958		14,241
Mutual fund Depósito Plus III		—		12,937
Mutual fund Depósito Plus II		12,552		9,308
Mutual fund Small Cap USA		—		5,197
Mutual fund Chile Bursatil		—		5,050
Mutual fund Twin Win Europa 103		3,541		3,537
Mutual fund Global Stocks		—		2,964
Mutual fund Second Best Chile EEUU		2,207		2,207
Mutual fund Europa Accionario		2,069		2,059
Mutual fund Second Best Europa China		—		1,649
Mutual fund Potencias Consolidadas		30,381		—
Mutual fund Muralla China		17,795		—
Mutual fund Banca Americana Voltarget		11,878		—
Mutual fund Ahorro Estable II		11,270		—
Mutual fund Estrategia Commodities		6,302		—
Mutual fund Ahorro Estable III		5,051		—
Mutual fund Ahorro Plus I		730		—
Total		118,734		59,149

ii. In subsidiary Banchile Corredores de Bolsa S.A.:

For the purposes of ensuring correct and complete compliance with all of its obligations as a Stock Brokerage entity, in conformity with the provisions of Article 30 and subsequent Articles of Law 18,045 on Securities Markets, the subsidiary established a guarantee in an insurance policy for UF 20,000, insured by Cía. de Seguros de Crédito Continental S.A., that matures April 22, 2014, whereby the Securities Exchange of the Santiago Stock Exchange was appointed as the subsidiary’s creditor representative.

Guarantees:	December 31, 2012 MCh$		September 30, 2013 MCh$
Shares to secure short-sale transactions in:
Securities Exchange of the Santiago Stock Exchange		69		1,226
Securities Exchange of the Electronic, Stock Exchange of Chile		33,693		2,246
Fixed income securities to ensure system CCLV, Securities Exchange of the Santiago Stock Exchange		3,068		2,983
Fixed income securities to ensure stock loans, Securities Exchange of the Electronic Stock Exchange of Chile		47		439
Total		36,877		6,894

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

36

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11. Contingencies and Commitments, continued:

(c) Guarantees granted, continued:

In conformity with the provisions of internal stock market regulations, and for the purpose of securing the broker’s correct performance, the company established a pledge on its shares of the Santiago Stock Exchange in favor of that institution, as recorded in Public Deed on September 13, 1990, signed before Santiago public notary Mr. Raul Perry Pefaur, and on its shares in the Electronic Stock Exchange of Chile in favor of that institution, as recorded in a contract entered into by both parties on May 16, 1990.

Banchile Corredores de Bolsa S.A. maintains an insurance policy with AIG Chile – Compañía de Seguros Generales S.A. that expires January 2, 2014, and covers employee fidelity, physical losses, falsification or adulteration, and currency fraud with a coverage amount equivalent to US$10,000,000.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

37

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

12. Payment of Dividends and Earnings per Share:

Earnings per share is calculated by dividing the net profit for the year attributable to the ordinary equity holders of the Bank by the weighted average number of ordinary shares outstanding during the year.

The following table shows the income and share data used in the calculation of EPS:

	Unaudited		Unaudited
	September 30, 2012		September 30, 2013
Basic Earnings per Share:
Income attributable to Bank’s owners (million of Chilean pesos)		337,496		410,895
Weighted average number of outstanding shares		89,235,554,549		92,929,577,197
Basic earnings per share (in Chilean pesos)		3.78		4.42
Diluted Earnings per Share:
Income attributable to Bank’s owners (million of Chilean pesos)		337,496		410,895
Weighted average number of outstanding shares		89,235,554,549		92,929,577,197
Adjustment number of shares		—		—
Diluted earnings per share (in Chilean pesos)		3.78		4.42

^(*)  During 2012 and 2013 1,095,298,538 and 1,197,741,038 shares were capitalized, respectively, which are considered in earnings per share calculation as if they had been outstanding during all periods presented.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

38

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

13. Related Party Transactions:

The related parties of the Bank and its subsidiaries include entities of the Bank’s corporate group; corporations which are the Bank’s parent company, associated companies, subsidiaries and associates; directors, managers, administrators, main executives or receivers of the company on their own behalf or in representation of persons other than the Bank, and their respective spouses or family members up to the second degree of consanguinity or affinity, as well as any entity directly or indirectly controlled by any of them, the partnerships or companies in which the aforementioned persons are owners, directly or through other individuals or corporations, of 10% or more of their capital or directors, managers, administrators or main executives; any person that on their own or with others with whom they have a joint action agreement can designate at least one member of the company’s management or controls 10% or more of the capital or of the voting capital, if dealing with a public corporation; those that establish the company’s bylaws, identify the directors’ committee; and those who have held the position of director, manager, administrator, main executive or receiver within the last eighteen months.

Article 147 of the Companies Act, states that a public corporation can only enter into transactions with related parties when the objective is to contribute to the company’s interests, and when terms price, and conditions are commensurate to those prevailing in the market at the time of their approval and comply with the requirements and procedures.

Moreover, Article 84 of the Chilean Banking Act. establishes limits for loans granted to related parties and prohibits the granting of loans to the Bank’s directors, managers and general representatives.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

39

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

13. Related Party Transactions, continued:

(a) Loans to related parties:

The following table details loans and accounts receivable, contingent loans and assets related to financial assets held-for-trading and investment, corresponding to related parties.

	Production Companies(*)						Investment Companies(**)						Individuals(***)						Total
	December 2012 MCh$			Unaudited September 2013 MCh$			December 2012 MCh$			Unaudited September 2013 MCh$			December 2012 MCh$			Unaudited September 2013 MCh$			December 2012 MCh$			Unaudited September 2013 MCh$
Loans and accounts receivable:
Commercial loans		250,983			286,577			63,576			36,354			704			914			315,263			323,845
Residential mortgage loans		—			—			—			—			14,974			16,298			14,974			16,298
Consumer loans		—			—			—			—			3,920			3,307			3,920			3,307
Gross loans		250,983			286,577			63,576			36,354			19,598			20,519			334,157			343,450
Provision for loan losses		(761	)		(973	)		(136	)		(154	)		(68	)		(61	)		(965	)		(1,188	)
Net loans		250,222			285,604			63,440			36,200			19,530			20,458			333,192			342,262
Off balance sheet accounts:
Guarantees		1,864			1,330			—			—			—			—			1,864			1,330
Letters of credits		280			2,605			—			—			—			—			280			2,605
Banks guarantees		24,361			18,900			2,374			2,000			—			—			26,735			20,900
Immediately available credit lines		46,179			58,942			4,532			5,143			9,320			9,897			60,031			73,982
Total off balance sheet account		72,684			81,777			6,906			7,143			9,320			9,897			88,910			98,817
Provision for contingencies loans		(44	)		(25	)		(1	)		(1	)		—			—			(45	)		(26	)
Off balance sheet accounts, net		72,640			81,752			6,905			7,142			9,320			9,897			88,865			98,791
Amount covered by Collateral
Mortgage		31,034			31,327			55			55			15,325			14,270			46,414			45,652
Warrant		—			—			—			—			—			—			—			—
Pledge		13			13			—			—			7			7			20			20
Others(****)		2,842			2,842			17,300			17,300			10			10			20,152			20,152
Total colateral		33,889			34,182			17,355			17,355			15,342			14,287			66,586			65,824
Acquired Instruments
For trading purposes		—			12			—			—			—			—			—			12
Total acquired instruments		—			12			—			—			—			—			—			12

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

40

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

13. Related Party Transactions, continued:

(a) Loans with related parties, continued:

^(*)  Production companies are legal entities which comply with the following conditions:

i) They engage in productive activities and generate a separable flow of income

ii) Less than 50% of their assets are trading securities or investments

^(**)  Investment companies include those legal entities that do not comply with the conditions for production companies and are profit-oriented.

^(***)  Individuals include key members of management who directly or indirectly posses the authority and responsibility for planning, administrating and controlling the activities of the organization, including directors. This category also includes their family members who are expected to have an influence or to be influenced by such individuals in their interactions with the organization.

^(****)  These guarantees correspond mainly to shares and other financial guarantees.

(b) Other assets and liabilities with related parties:

			Unaudited
	December 31, 2012 MCh$		September 30, 2013 MCh$
Assets
Cash and due from banks		11,174		10,674
Derivative instruments		107,487		77,146
Other assets		2,931		2,594
Total		121,592		90,414
Liabilities
Demand deposits		87,480		149,037
Savings accounts and time deposits		378,965		277,812
Derivative instruments		83,582		85,092
Debt issued		79,821		53,036
Borrowings from financial institutions		134,820		167,134
Other liabilities		9,044		18,014
Total		773,712		750,125

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

41

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

13. Related Party Transactions, continued:

(c) Income and expenses from related party transactions (*):

	Unaudited				Unaudited				Unaudited				Unaudited
	For the three-month period ended September 30, 2012				For the nine-month period ended September 30, 2012				For the three-month period ended September 30, 2013				For the nine-month period ended September 30, 2013
Type of income or expense recognised	Income MCh$		Expense MCh$		Income MCh$		Expense MCh$		Income MCh$		Expense MCh$		Income MCh$		Expense MCh$
Interest and revenue expenses		4,037		7,117		12,584		14,929		6,133		3,621		15,128		12,194
Fees and commission income		21,340		7,589		43,093		22,184		13,461		10,218		37,752		24,948
Net income from financial transactions		47,793		33,510		161,390		132,764		36,148		50,132		104,418		148,570
Foreign currency translation		—		349		—		349		133		—		133		—
Released or established of provision for credit risk		—		—		—		—		—		—		—		—
Operating expenses		—		14,929		—		50,478		—		14,012		—		51,378
Other income and expenses		200		4		601		15		139		4		412		23
Total		73,370		63,498		217,668		220,719		56,014		77,987		157,843		237,113

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

42

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

14. Fair Value of Financial Assets and Liabilities:

Banco de Chile and his subsidiaries, taken into account the preceding statements, classify all the financial instruments among the following levels:

Level 1:	Quoted market prices in an active market (that are unadjusted) for identical assets or liabilities that the Bank can access at the measurement date.
	In this level are considered the following instruments: currency futures, Chilean central bank and treasury securities, mutual funds investments and equity.
	For the Chilean central bank and treasury securities, all instruments that belong to one of the following benchmark groups will be considered as Level 1: Pesos-02, Pesos-05, Pesos-07, Pesos-10, UF-02, UF-05, UF-07, UF-10, UF-20, UF-30. A benchmark group is composed by a number of instruments that have similar duration and share the same quoted price within the group. This condition allows for a greater depth of the market, assuring daily observable quotes.
	For each and every one of these instruments exist daily observable market valuation parameters; internal rates of return and closing prices, respectively, therefore no assumptions are needed to calculate the fair value. For currency futures as well as mutual funds and equity, closing prices times the number of instruments is used for fair value calculations. For Chilean central bank and treasury securities the internal rate of return is used to discount every cash flow and obtain the fair value of each instrument, for each currency; CLP or CLF.
	The preceding described methodology corresponds to the one utilized for the Bolsa de Comercio de Santiago (Santiago’s main Exchange) and is recognized as the standard in the market.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

43

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

14. Fair Value of Financial Assets and Liabilities, continued:

Level 2:	Valuation techniques whose inputs are other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly. For instruments in this level the valuation is done based on inference from observable market parameters; quoted prices for similar instruments in active markets.
	This level is composed mostly by derivatives, currency and rate derivatives, bank’s debt securities, mortgage claims, money market instruments and less liquid Chilean Central Bank and treasury securities.
	For derivatives the fair value process depend upon his value is impacted by volatility as a relevant market factor; if is the case, Black-Scholes-Merton type of formula it is used. For the rest of the derivatives, swaps and forwards, net present value through discounted cash flows is used. For securities classified as level 2, the obtained internal rate of return is used to discount every cash flow and obtain the fair value of each instrument, for each currency.
	In the event that there is no observable price for an instrument in a specific term, the price will be inferred from the interpolation between periods that do have observable quoted price in active markets. These models incorporate various market variables, including foreign exchange rates and interest rate curves. In some cases external data from specialized providers, brokers such as ICAP and Riskamerica, price for similar transactions and historical information it is used for validate the parameters that will be used as inputs.
	The techniques described above are used by the Santiago Stock Exchange in Chile, Bloomberg or the Over-the-Counter, and correspond to the standard methodology used in the local and international markets.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

44

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

14. Fair Value of Financial Assets and Liabilities, continued:

Level 3:	Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. This category also includes instruments that are valued based on quoted prices for similar instruments where adjustments or assumptions are needed to reflect the differences between them.
	Instruments classified as level 3 correspond to Corporate Debt issued mainly Chilean and foreign companies, issued both in Chile and abroad. These instruments are classified, for accounting purposes, as Available for Sale. For this securities classified as level 3, the indicative internal rate of return is used to discount every cash flow and obtain the fair value of each instrument, for each currency. In this case only external data from specialized providers, brokers such as ICAP, Riskamerica and Interactive Data, it is used to for validate the parameters that will be used as inputs.
	For this level corresponds to the described technique used by both the Bolsa de Comercio de Santiago de Chile as Bloomberg, and correspond to the standard methodology used in the local and international market.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

45

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

14. Fair Value of Financial Assets and Liabilities, continued:

(a) Level hierarchy and figures

The following tables detail the classification, by level, of financial instruments measured at fair value.

	Level 1				Level 2						Level 3				Total
	December 2012 MCh$		Unaudited September 2013 MCh$		December 2012 MCh$			Unaudited September 2013 MCh$			December 2012 MCh$		Unaudited September 2013 MCh$		December 2012 MCh$			Unaudited September 2013 MCh$
Financial Assets
Financial assets held-for-trading
From the Chilean Government and Central Bank		65,548		55,221		6,831			44,685			—		—		72,379			99,906
Other instruments issued in Chile		188		3,367		87,115			211,234			—		3,120		87,303			217,721
Subtotal		65,736		58,588		93,946			255,919			—		3,120		159,682			317,627
Derivative contracts for trading purposes
Forwards		—		—		70,310			62,321			—		—		70,310			62,321
Swaps		—		—		258,496			220,894			—		—		258,496			220,894
Call Options		—		—		472			2,015			—		—		472			2,015
Put Options		—		—		341			1,184			—		—		341			1,184
Futures		—		—		—			—			—		—		—			—
Subtotal		—		—		329,619			286,414			—		—		329,619			286,414
Hedge derivative contracts
Swaps		—		—		22			11,955			—		—		22			11,955
Subtotal		—		—		22			11,955			—		—		22			11,955
CVA		—		—		(3,558	)		(11,410	)		—		—		(3,558	)		(11,410	)
Total		—		—		326,083			286,959			—		—		326,083			286,959
Financial assets available-for-sale
From the Chilean Government and Central Bank		136,554		153,688		115,230			531,295			—		—		251,784			684,983
Other instruments issued in Chile		—		—		653,955			681,168			278,073		357,820		932,028			1,038,988
Other instrument issued abroad		30,538		35,288		—			—			57,966		33,194		88,504			68,482
Subtotal		167,092		188,976		769,185			1,212,463			336,039		391,014		1,272,316			1,792,453
Other assets
Mutual fund investments		33,042		48,266		—			—			—		—		33,042			48,266
Subtotal		33,042		48,266		—			—			—		—		33,042			48,266
Total		265,870		295,830		1,189,214			1,755,341			336,039		394,134		1,791,123			2,445,305
Financial Liabilities
Derivative contracts for trading purposes
Forwards		—		—		81,790			68,575			—		—		81,790			68,575
Swaps		—		—		264,052			270,065			—		—		264,052			270,065
Call Options		—		—		395			2,528			—		—		395			2,528
Put Options		—		—		387			885			—		—		387			885
Futures		—		—		—			—			—		—		—			—
Other		—		—		—			—			—		—		—			—
Subtotal		—		—		346,624			342,053			—		—		346,624			342,053
Hedge derivative contracts
Swaps		—		—		33,698			32,975			—		—		33,698			32,975
Subtotal		—		—		33,698			32,975			—		—		33,698			32,975
DVA						—			(14,180	)						—			(14,180	)
Total		—		—		380,322			360,848			—		—		380,322			360,848

(1) As of September 30, 2013, 96% of instruments of level 3 have denomination “Investment Grade”, meaning they are assets with a classification BBB- or higher. Also, 90% of total of these financial instruments correspond to domestic issuers.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

46

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

14. Fair Value of Financial Assets and Liabilities, continued:

(b) Level 3 reconciliation

The following tables show the reconciliation between the beginning and ending balances of instruments classified as Level 3, whose fair value is reflected in the financial statements.

	Balance as of January 1, 2012 MCh$		Gain (loss) Recognised in Income MCh$			Gain (loss) Recognised in Equity MCh$			Purchases, Sales and Agreements, net MCh$			Transfers level MCh$		Balance as of December 31, 2012 MCh$
Financial Assets
Financial assets held-for-trading
Other instruments issued in Chile		585		183			—			(768	)		—		—
Instruments issued abroad		—		—			—			—			—		—
Subtotal		585		183			—			(768	)		—		—
Financial assets available-for-sale
Other instruments issued in Chile		321,378		1,511			(1,410	)		(43,406	)		—		278,073
Instruments issued abroad		128,403		(5,713	)		19,666			(84,390	)		—		57,966
Subtotal		449,781		(4,202	)		18,256			(127,796	)		—		336,039
Total		450,366		(4,019	)		18,256			(128,564	)		—		336,039
	Balance as of January 1, 2013 MCh$		Gain (Loss) Recognised in Income MCh$			Gain (Loss) Recognised in Equity MCh$			Purchases, Sales and Agreements, net MCh$			Transfers level		Balance as of September 30, 2013 Unaudited MCh$
Financial Assets
Financial assets held-for-trading
From the Chilean Government and Central Bank		—		—			—			—			—		—
Other instruments issued in Chile		—		92			—			3,028			—		3,120
Subtotal		—		92			—			3,028			—		3,120
Available-for-Sale Instruments
Other instruments issued in Chile		278,073		(3,571	)		4,968			78,350			—		357,820
Instruments issued abroad		57,966		(3,945	)		304			(21,131	)		—		33,194
Subtotal		336,039		(7,516	)		5,272			57,219			—		391,014
Total		336,039		(7,424	)		5,272			60,247			—		394,134

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

47

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

14. Fair Value of Financial Assets and Liabilities, continued:

(c) Transfers between levels

The following tables show transfers between levels for financial assets and liabilities whose fair value it is recorded in the consolidated financial statements:

	Transfers from level 1 to level 2
	December 31, 2012 MCh$		Unaudited September 30, 2013 MCh$
Financial assets
Financial assets held-for-trading instruments
From the Chilean Government and Central Bank		—		1,347
Financial assets Available-for-sale instruments
From the Chilean Government and Central Bank		—		24,649

	Transfers from level 2 to level 1
	December 31, 2012 MCh$		Unaudited September 30, 2013 MCh$
Financial assets
Financial assets held-for-trading instruments
From the Chilean Government and Central Bank		—		47
Financial assets Available-for-sale instruments
From the Chilean Government and Central Bank		53,592		9,435

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

48

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

14. Fair Value of Financial Assets and Liabilities, continued:

(c) Sensitivity of level 3 instruments to changes in key assumptions of the input parameters for the valuation model.

The following table shows the impact on the fair value of Level 3 financial instruments using alternative assumptions that are reasonably possible. It is believed that the positive and negative impacts are similar:

	As of December 31, 2012				Unaudited As of September 30, 2013
	Level 3 MCh$		Sensitivity to changes in key assumptions of models MCh$		Level 3 MCh$		Sensitivity to changes in key assumptions of models MCh$
Financial Assets
Financial assets held-for-trading
Other instruments issued in Chile		—		—		3,120		(44	)
Total		—		—		3,120		(44	)
Financial assets available-for-sale
Other instruments issued in Chile		278,073		4,664		357,820		(5,301	)
Instruments issued abroad		57,966		612		33,194		(246	)
Total		336,039		5,276		391,014		(5,547	)

Financial assets correspond to bank bonds and corporate bonds, considering that these instruments do not have current prices or observables, prices based on broker quotes or runs were used as input prices. Prices are generally calculated as a base rate plus a spread. For local bonds, this was determined by applying a 10% impact on the price, while for offshore bonds this was determined by applying only a 10% impact on the spread because the base rate is hedged with instruments on interest rate swaps (so-called hedge accounting). The impact of 10% is considered a reasonable fluctuation considering the market performance of these instruments and comparing it against the adjustment bid / offer that is provided for by these instruments.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

49

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

14. Fair Value of Financial Assets and Liabilities, continued:

(d) Other assets and liabilities

The following table summarizes the fair values of the Bank’s main financial assets and liabilities that are not recorded at fair value in the Statement of Financial Position. The values shown in this note do not attempt to estimate the value of the Bank’s income-generating assets, nor forecast their future behavior. The estimated fair value is as follows:

	Book Value				Fair Value
			Unaudited				Unaudited
	December 31,		September 30,		December 31,		September 30,
	2012		2013		2012		2013
	MCh$		MCh$		MCh$		MCh$
Assets
Cash and due from banks		684,925		998,770		684,925		998,770
Transactions in the course of collection		310,077		506,318		310,077		506,318
Cash collateral on securities borrowed and reverse repurchase agreements		35,100		20,501		35,100		20,501
Subtotal		1,030,102		1,525,589		1,030,102		1,525,589
Loans and advances to banks
Domestic banks		1,115,000		158,905		1,115,000		158,905
Chilean Central Bank		—		150,674		—		150,674
Foreign banks		228,322		367,374		228,322		367,374
Subtotal		1,343,322		676,953		1,343,322		676,953
Loans to customers, net
Commercial loans		11,533,904		12,674,740		11,473,251		12,525,231
Residential mortgage loans		4,182,587		4,565,219		4,201,091		4,622,541
Consumer loans		2,667,467		2,770,850		2,683,593		2,804,063
Subtotal		18,383,958		20,010,809		18,357,935		19,951,835
Total		20,757,382		22,213,351		20,731,359		22,154,377
Liabilities
Current accounts and other demand deposits		5,470,971		5,927,692		5,470,971		5,927,692
Transactions in the course of payment		72,684		306,905		72,684		306,905
Cash collateral on securities lent and reverse repurchase agreements		226,396		223,409		226,396		223,409
Saving accounts and time deposits		9,612,950		10,332,890		9,589,643		10,330,483
Borrowings from financial institutions		1,108,681		876,247		1,103,252		871,530
Other financial obligations		162,123		174,967		162,123		174,967
Subtotal		16,653,805		17,842,110		16,625,069		17,834,986
Debt issued
Letters of credit for residential purposes		85,967		71,503		87,088		74,207
Letters of credit for general purposes		29,229		21,419		29,610		22,229
Bonds		2,412,233		3,215,041		2,282,014		3,126,751
Subordinated bonds		746,504		748,922		726,369		732,368
Subtotal		3,273,933		4,056,885		3,125,081		3,955,555
Total		19,927,738		21,898,995		19,750,150		21,790,541

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

50

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

15. Offsetting financial assets and financial liabilities

In accordance with IAS 32 Financial Instruments: Presentation, the Bank should report financial assets and financial liabilities on a net basis on the balance sheet only if there is a legally enforceable right to set off the recognized amounts and there is intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. Because Bank´s netting agreements do not qualify for balance sheet netting, it presents its financial instruments on a gross basis on the balance sheet.

The following table shows the impact of netting arrangements on all derivative financial instruments that are subject to enforceable master netting agreements or similar agreements (including financial collaterals), but do not qualify for balance sheet netting.

The “Net amounts” presented below are not intended to represent the Bank’s actual exposure to credit risk, as a variety of credit mitigation strategies are employed in addition to netting and collateral arrangements.

	As of December 31, 2012
	Effects of offsetting on balance sheet						Related amount not offset
	Gross amount		Amounts offset		Net amounts reported on the balance sheet		Financial Instruments			Financial Collateral			Net amount
	MCh$		MCh$		MCh$		MCh$			MCh$			MCh$
Derivative financial assets		326,083		—		326,083		(104,142	)		(42,635	)		179,306
Derivative financial liabilities		380,322		—		380,322		—			—			380,322
	As of September 30, 2013
	Effect of offsetting on balance sheet						Related amount not offset
	Gross amount		Amounts offset		Net amounts reported on the balance sheet		Financial Instruments			Financial Collateral			Net amount
	MCh$		MCh$		MCh$		MCh$			MCh$			MCh$
Derivative financial assets		286,959		—		286,959		(23,869	)		(47,927	)		215,163
Derivative financial liabilities		360,848		—		360,848		—			—			360,848

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

51

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

15. Offsetting financial assets and financial liabilities, continued

Derivative assets and liabilities

The “Financial Instruments” column identifies financial assets and liabilities that are subject to set off under netting agreements, such as the ISDA Master Agreement of derivative exchange or clearing counterparty agreements, whereby all outstanding transactions with the same counterparty could be offset and close-out netting applied across all outstanding transaction covered by the agreements if an event of default or other predetermined events occur (“early contract termination”).

Financial collateral refers to cash and non-cash collateral obtained, typically daily or weekly, to cover the net exposure between counterparties by enabling the collateral to be realized in an event of default or if other predetermined events occur (“early contract termination”).

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

52

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

16. Financial Risk Management:

(1) Credit Risk

The credit risk of the bank is managed using a global strategy, focused on economic environment and target markets. In this way, policies have been established and credit processes have been developed to recognize singularities of each market and segment, giving each of them the appropriate credit treatment which, in general, results in automated processes for individuals, parametric processes for small and medium companies, and case to case for corporations.

For the Bank, a basic principle in the management of credit risk is its permanence throughout the credit cycle: admission, monitoring and recovery of loans.

Corporate Risk division ensures the quality of the portfolio and optimizes the risk-return ratio for all individuals and corporate segments, managing all phases of the cycle indicated. Along with that ensures the accomplishment of criteria emanating from the Board of the bank related to risk management, who in turn, are actively involved in the management of credit risk, guiding the administration for handling this and informing periodically the portfolio behavior.

Permanent nature of the management of credit risk allows to evaluate a rigorous approval of the credit, ensuring the incorporation of clients within the predefined target market, ensuring a follow up control of the implementation of credit policies and allows close monitoring of the evolution of portfolio risks and processes of normalization and collection of past due loans. Also it allows acting proactively, evaluating any signs of non-complying, mitigating risk and reducing exposures to lower potential portfolio losses.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

53

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

16. Financial Risk Management, continued:

(1) Credit Risk, continued

The table below shown breakdown by type of portfolio and risk level (normal, substandard and Non-complying)

	As of December 31, 2012
	Individual Portfolio						Group Portfolio
	Normal MCh$		Substandard MCh$		Non-complying MCh$		Normal MCh$		Non-complying MCh$		Total MCh$
Financial Assets
Loans and advances to banks (before allowances for loan losses)
Central Bank of Chile		1,100,696		—		—		—		—		1,100,696
Domestic banks		14,309		—		—		—		—		14,309
Foreign banks		229,276		—		—		—		—		229,276
Subtotal		1,344,281		—		—		—		—		1,344,281
Loans to customers (before allowances for loan losses)
Commercial loans		9,341,403		204,369		145,022		1,864,798		185,988		11,741,580
Residential mortgage loans		—		—		—		4,148,374		50,293		4,198,667
Consumer loans		—		—		—		2,649,995		181,519		2,831,514
Subtotal		9,341,403		204,369		145,022		8,663,167		417,800		18,771,761

	(Unaudited) As of September 30, 2013
	Individual Portfolio						Group Portfolio
	Normal MCh$		Substandard MCh$		Non-complying MCh$		Normal MCh$		Non-complying MCh$		Total MCh$
Loans and advance to banks (before alloances for loan losses)
Central bank of Chile		150,674		—		—		—		—		150,674
Domestic banks		159,000		—		—		—		—		159,000
Foreigns banks		368,731		—		—		—		—		368,731
Subtotal		678,405		—		—		—		—		678,405
Loans to customers (before allowances for loan losses)
Commercial loans		10,321,724		246,273		147,647		1,980,976		199,459		12,896,079
Residential mortgage loans		—		—		—		4,515,287		66,945		4,582,232
Consumer loans		—		—		—		2,747,773		197,378		2,945,151
Subtotal		10,321,724		246,273		147,647		9,244,036		463,782		20,423,462

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

54

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

16. Financial Risk Management, continued:

(1) Credit Risk, continued

Portfolio loans have a diversification by economic activity as per following:

As of December 31, 2012	Financial Services MCh$		Govern- ment MCh$		Retail (Individuals) MCh$		Trade MCh$		Manu- facturing MCh$		Mining MCh$		Electricity, Gas and Water MCh$		Agriculture and Livestock MCh$		Forestry MCh$		Fishing MCh$		Trans- portation and Telecom MCh$		Cons- truction MCh$		Services MCh$		Other MCh$		Total MCh$
Loans and advances to Banks		243,585		—		—		—		—		—		—		—		—		—		—		—		—		1,100,696		1,344,281
Commercial loans		1,854,571		—		—		2,324,669		1,380,994		372,437		328,763		901,300		—		233,893		1,470,358		1,252,546		1,310,573		311,476		11,741,580
Residential mortgage loans		6,609		—		3,503,474		80,676		15,970		2,702		—		27,697		—		1,840		23,934		17,322		105,181		413,262		4,198,667
Consumer loans		3,131		—		2,557,411		40,109		9,400		1,532		5		33,664		—		840		16,280		9,870		38,440		120,832		2,831,514
Total		2,107,896		—		6,060,885		2,445,454		1,406,364		376,671		328,768		962,661		—		236,573		1,510,572		1,279,738		1,454,194		1,946,266		20,116,042
As of September 30, 2013	Financial Services MCh$		Govern- ment MCh$		Retail (Individuals) MCh$		Trade MCh$		Manu- facturing MCh$		Mining MCh$		Electricity, Gas and Water MCh$		Agriculture and Livestock MCh$		Forestry MCh$		Fishing MCh$		Trans- portation and Telecom MCh$		Cons- truction MCh$		Services MCh$		Other MCh$		Total MCh$
Loans and advance to banks		527,731		—		—		—		—		—		—		—		—		—		—		—		—		150,674		678,405
Commercial loans		1,810,719		—		404,466		2,599,199		1,447,303		364,147		560,726		932,246		—		224,878		1,709,402		1,439,475		1,271,565		131,953		12,896,079
Residential mortgage loans		9,133		—		3,832,281		90,069		18,749		3,529		—		29,010		—		1,763		26,311		19,602		143,952		407,832		4,582,231
Consumer loans		3,482		—		2,661,966		41,614		9,472		1,597		8		35,004		—		828		16,701		10,127		50,481		113,872		2,945,152
Total		2,351,065		—		6,898,713		2,730,882		1,475,524		369,273		560,734		996,260		—		227,469		1,752,414		1,469,204		1,465,998		804,331		21,101,867

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

55

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

16. Financial Risk Management, continued:

(2) Market Risk

The Market Risk Management Unit has completed three relevant milestones during 2013: the internal model for measuring credit exposures for derivative transactions; the installation of the DVA (“own credit risk”) concept for valuation of derivative transactions and the development of better stress testing processes for both liquidity and price risks.

In fact, credit exposures arose when dealing with derivatives are now computed utilizing either Add-On methodologies (credit factors calculated using MCS) or portfolio analysis considering that market factors prices follow sophisticated diffusion processes. Credit mitigation techniques are also included, when applicable, such as margin call, early termination and netting.

The DVA concept was developed by computing expected positive or negative exposures as the sum of FX European calls/puts in the case of FX Forwards or Cross Currency swaps or the value of Interest Rate Caps or Floors for Interest Rate Swaps. Expected Losses are estimated utilizing corporate spreads gathered from observable sources or by estimating them through techniques that mimic credit spreads yield curves according to internal credit rating models.

Stress tests have been improved significantly, trying to better reflect profit & loss impacts due to material adverse changes environments. The enhancement of the price risk stress testing exercise is focused on the inclusion of basis risk analyses (from mid year, we have included the potential effects generated by the fluctuation of the credit spread of our customer base or by the fluctuation of our own credit spread). Liquidity analysis was improved by defining the base scenario as a more realistic one, modeling mostly all balance sheet items as evergreen with the exception of deposits withdraws and debt securities trading activities.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

56

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued

17. Subsequent Events:

On October 17, 2013 Banco de Chile informed that the Board of Directors of Latibex (“Consejo de Administración de Bolsas y Mercados Españoles Sistemas de Negociación, S.A.”), within its authority pursuant to the Regulations of the Mercado de Valores Latinoamericanos (“Latibex”), and based on Banco de Chile’s request, has resolved to exclude the negotiation of Banco de Chile issued shares from the “Mercado de Valores Latinoamericanos (“Latibex”)”, effective October 18, 2013.

All the supporting documentation filled by Banco de Chile is publicly available at the website of Latibex (www.latibex.com) and on our website (www.bancochile.cl).

In Management’s opinion, there are no other significant subsequent events that affect or could affect the Interim Condensed Consolidated Financial Statements of the Bank and its subsidiaries between September 30, 2013 and the date of issuance of these Interim Condensed Consolidated Financial Statements.

The accompanying notes 1 to 17 are an integral part of these interim condensed consolidated financial statements

57