PA - Banco Security

FINANCING
BANKING INDUSTRY
Banking was the first industry in Chile to adopt, in 2009, the IFRS (International Financial
Reporting Standards), so the financial statements for 2010 are consistent with international
practices, thus contributing to a better disclosure and understanding of this information.
2010 was a very good year for the Chilean banking industry. The strong growth in earnings was
driven by the recovery of credit, the transition from negative inflation to the target range of
the central bank and a lower level of risk. The maintenance of expansive financial conditions
together with the consolidation of economic growth, the improvement in consumer confidence
and greater flexibility in granting credit, allowed the system’s loans to grow.
The interest margin benefited from the increase in inflation expectations and the increase in
loans, given the structural mismatch in UF of the banks. The reduction in unemployment and
economic stability reduced risk indicators and improved the quality of the loan portfolio. In this
scenario, the system produced a return of around 18.6%.
LOANS
Loan volumes at December 2010 amounted to Ch$ 75,979 billion, representing a growth of
7.7% over the year before.
The distribution of total loans of the system was as follows: 60.1% commercial loans, 25.8%
housing loans, 12.8% consumer loans and 1.3% loans to banks. In terms of changes in volumes
of the different kinds of loans, commercial loans increased by 6.9%, housing loans by 11.6% and
consumer loans by 11.9%, while loans to banks declined by 36.3%.