PA - Banco Security

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DEAR SHAREHOLDERS I have the pleasure to present to you the Annual Report of Grupo Security for the year 2010. The year of Chile’s bicentenary was dramatic, intense and productive, marked by a series of events that Chileans will never forget. The earthquake and tsunami of February 27 caused havoc in the national community whose effects we will continue to feel during the following year, despite the great reconstruction effort being made. In addition, there was the global impact caused by the accident and later rescue of the 33 miners in Copiapó, which showed Chile as an organized and efficient nation with a strong sense of leadership in the eyes of the world. Throughout this frenzy of events, and despite the constant announcements of crisis in Europe, the Chilean economy enjoyed a period of growth and financial strength not seen for many years, thus following the rhythm of global activity which expanded by 4.7% in 2010. The earnings of Grupo Security in 2010 amounted to Ch$ 40,852 million, which represents a 36% increase over the previous year and best result since the creation of the Group. Profitability was 15.7% of capital and reserves, 11.6% more than in 2009, while the debt ratio moved from 35.2% in 2009 to 30.5% at the end of 2010. Outstanding during the year was the performance of Banco Security and its subsidiaries, Valores Security Corredores de Bolsa and Administradora General de Fondos Security, which contributed earnings of Ch$ 33,706 million, comparing favorably with Ch$ 23,039 million reported for 2009. The return on equity of Banco Security was 16.3%, with a Basel ratio of 12.66%, while the risk ratio, measured as loss allowances to total loans, was 1.91%. Valores Security Corredores de Bolsa reported earnings of Ch$ 1,501 million. The effort to reorient the business on customers, rather than property trading, enabled the company to achieve a market share of 6.9% in stock market trading volumes and move up from sixth to fourth place in the ranking of stockbrokers in 2010, considering the Santiago Stock Exchange and the Chilean Electronic Exchange. For its part, Administradora General de Fondos Security (AGF) closed with an excellent year, with a 44% increase in revenues which enabled it to improve its earnings from Ch$ 2,616 million in 2009 to Ch$ 3,762 million in 2010. We are proud of the awards received by AGF, in particular the first place in the Salmón prizes in the following categories: emerging equity markets funds, with Fondo Mutuo Security Emerging market; 11 National equity funds, with Fondo Mutuo Security Acciones; and emerging equities guaranteed funds, with Fondo Mutuo Security Chile 105 Garantizado.
03 letter from the chairman 11 PÁGE In the insurance area, Vida Security produced earnings of Ch$ 13,554 million, 28% more than in the previous year. The good result reflected the favorable performance of its financial investments, maintaining claim rates within that expected. Corredora de Seguros Security, while receiving a significant increase in the demand for claim settlements following the earthquake, showed excellent relations with the insurance companies required to pay and their operative solidity, by settling all requirements to date. It is important to mention that for the tenth consecutive year, the Great Place to Work Institute distinguished Grupo Security as among the best companies to work for in Chile. This prize reaffirms the Group’s commitment to reconcile work and the family. While we look at 2011 prudently, we nevertheless view it with optimism thanks to the positive performance of the economic activity indicators that have emerged in Chile. The Group has therefore made great changes in the structure of some of our companies, in order to enter new markets and offer new products to customers more efficiently and attractively. Grupo Security will continue to be recognized as a conglomerate of excellence that is consolidated year by year in the national industry, projecting itself as an important player in the financial market. I should like once again to thank our shareholders for their trust in us and who believe in the projects we have undertaken. Since the first day, our vision has been to position ourselves as a group of companies gathered under the same objective: to provide value for what customers love most. This permits us to say that we are a Group with a solid brand, which has gained prestige and growth as a result of the joint efforts of all members of the organization. We expect the year 2011 to be very good for Grupo Security. We are confident we will achieve all the objectives we have set ourselves, as we have the necessary human team for meeting our targets. Francisco Silva S. Chairman Grupo Security
Page 1 and 2: A N N U A L R E P O R T 2 0 1 0
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Page 6 and 7: Grupo Security Summarized Unconsoli
Page 9: 02 principal financial indicators n
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Page 17 and 18: 04board and management SENIOR MANAG
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Page 21 and 22: 06 activities 19 ENCUENTRO JUVENTUD
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Page 30 and 31: CHILE: GDP GROWTH (%) 7 6 5 4 3 2 1
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Page 37 and 38: 09 strategic pillars RISK MANAGEMEN
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Page 44 and 45: FINANCING BANKING INDUSTRY Banking
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Page 50 and 51: RISK Banco Security has been charac
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Page 60 and 61: INSURANCE INSURANCE INDUSTRY The Ch
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Compañía de Seguros Generales Pen
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10business areas S E R V I C E S
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It is important to recall that the
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INVESTMENT POLICY The bylaws of Gru
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The individual financial liabilitie
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BANK CREDITORS As of December 31, 2
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ASSOCIATED RISKS Local Financial Ri
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company information 12
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12company information In accordance
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12 company information 81 • Revis
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12 company information 83 In Seguro
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12 company information 85 STOCK MAR
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12 company information 87 SOCIEDAD
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12 company information 89 INMOBILIA
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Regulatory Framework Grupo Security
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financial statements 13
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