Good afternoon, everyone, and welcome to Banco de Chile’s Third Quarter 2021 Results Conference Call. If you need a copy of the press release issued yesterday, it is available on the company’s website. Today with us, we have Mr. Rodrigo Aravena, Chief Economist and Institutional Investor Relations Officer; Mr. Pablo Mejia, Head of Investor Relations; and Daniel Galarce, Head of Financial Control & Capital. Before we begin, I would like to remind you that this call is being recorded, that all the information discussed today may include forward-looking statements regarding the company’s financial and operating performance. All projections are subject to risks and uncertainties, and actual results may differ materially. Please refer to the detailed note in the company’s press release regarding forward-looking statements. So without further notice, I would like to now pass the call to Mr. Rodrigo Aravena. Please go ahead, sir. The line is yours.

Good afternoon, everyone. Thanks for joining this conference call today. We are proud to present the performance of Banco de Chile during the third quarter. Once again, our bank was able to post outstanding results, leading the industry in terms of profitability and capitalization, and comprehensive income, which is also an important measure to analyze the overall performance of a bank, even its direct impact on the shareholders’ equity value. This approach is more important than ever, given the increased level of uncertainty and volatility that we are facing. In order to cover this aspect, we have divided this presentation into 3 main sections. First, an analysis of the macro and financial conditions. Second, a review of the main advances and achievements in our key strategic pillars. And finally, a review of the breakdown of financial earnings. Let me start with a discussion of the macro and financial environment. Please go to Slide #3. Chile has been posting a faster-than-expected economic growth. Generally, this has been driven by the joint contribution of several factors, including a strong fiscal and monetary policy, the temporary impacts from several pension funds withdrawal, and the significant improvement in sanitary conditions that have allowed greater mobility in the country. The chart on the other left shows the speed of recovery [19.6%] [ph] year-on-year during the third quarter, after expanding a simple 1% in the previous quarter. The breakdown shows that the activity has been led by the material improvement in commerce and services. All the way, because in annual figures was influenced by the weak comparison base as the country was under a national lockdown one year ago. The economy has been growing on a sequential basis. As you can see in the chart on the other right, the activity is 6% higher than the…

Thanks, Rodrigo, Please turn to Slide #8 to discuss our main advances and strategic projects. Banco de Chile has demonstrated time, and again that our consistent long-term strategy generating superior and more consistent earnings and value creation than our peers. In the next slide, we’ll go over our advances in key areas, which are digital transformation, efficiency and ESG. Please turn to Slide #9 to go over our advances in digital banking. Throughout the year, we have worked steadily to create a digital-driven organization. This year, we have deployed many advances in both the front and the back office. In this sense, we’re improving our customer experience by expanding digital channels, adding new products and functionalities. We’re also increasing sales through these points of contacts, working with advanced analytics, cross-selling our new FAN account holders with insurance, investment and other products, transforming operational processes and IP architecture, and we’re working in their talents in digital culture development. In regards to the advances in our digital onboarding Cuenta FAN account, we have seen an impressive evolution of our new customers reaching 630,000 since its launched one-year ago. This quarter we released a new customer service channel with a chatbot called FANi that answers frequently asked questions, and we’re proud to mention that based on our usage rate, more than half of our FAN clients use this account as their primary account. In the future, this customer base will be an important driver for revenue growth. We’re also continually integrating new digital solutions such as our new self service modules. At branches, I include several functionalities and save time for our customers, and we launched new payments service, so clients can use their smartphone or smartwatch to pay without their cards among other initiatives. All of these efforts to provide the best…

Thank you very much for the presentation. We will now start the Q&A session. [Operator Instructions] Thank you. Our first question comes from Mr. Jason Mollin from Scotiabank. Please go ahead, sir. Your line is open.

Great. Thank you. Thanks for the opportunity to ask questions. Hi, gentlemen. Hello, everyone. My question is related to the additional provisions that Banco de Chile has been creating. And they look very robust. And from a balance sheet strength perspective, we really like them. But there is a flipside to that, in that it’s not going to the bottom line. And that limits the payment of dividends in terms of payout of earnings. So I’m just – if you can frame how management thinks about them, and the need for them. Is the idea really to create them because you see potential problems, or you just want to be in a very strong position the next time? We see problems in the economy and with your clients? And how should we think of that versus showing better net income and paying out more dividends?

Well, in terms of additional provisions, as we mentioned and you saw in the call, we had additional provisions of Ch$50 billion this quarter. And this is a decision that was taken despite that we’ve seen several different signs of recovery since late 2020. But there is still certain uncertainties that are still occurring today in the economy. So – because we have a lot of liquidity, there is all these issues. But really affecting NPL temporarily. And there is still certain future events that could be occurring related to the economy and the political scenario. So this is the reasons – this is part of the reasons that the Board decided to take on, these additional provisions during the quarter. We can’t rule out, however, that in the future these uncertainties tends to fall. There is more certainty in the future, that we could potentially release a portion of these additional allowances. This is a decision that has to be taken by the Board. There is not an exact trigger that I can give you or an exact timeframe of when this would happen. In terms of the dividend, Rodrigo, do you want to…?

Yeah. Hi, Jason. I have to emphasize the idea that we don’t have any particular concern. So, basically that decision reflect our prudent decisions. So, basically, we are waiting for having more information in terms of the economic cycle, we would like to see how the ratios, how the asset quality indicator will evolve in the future, because we notice that as a consequence of the excess of liquidity, as a result of some policy measures adopted during this crisis, there we have seen some bias in some indicators. So, basically, we are waiting for more information, the stabilization of economic cycle. But, I like to be clear that we don’t have any particular concern behind the decision. In terms of dividends, I’d like to mention that Banco de Chile has consistently been able to maintain an attractive dividend for shareholders during the last year. That even though we can anticipate the annual dividend, because it has to be proposed by the Board of Directors, it’s very important to keep in mind that the Board takes into consideration various different factors when determining the annual dividend proposal such as, for example, the existence of our robust capital level, which is superior to our peers, the slowdown expected in loan growth in the future. It’s important to remember that in the past, elasticity between loans and GDP used to be around 2 times. For the future, we are not waiting for that. We’re not expecting, sorry, this elasticity, so we’re aware of the slowdown in loan growth in the future, relative to what we have in the past. And also, we have very good level of our additional provisions, as you mentioned. So these conditions at the end of the day, to maintain or change dividend payout relative to the levels that we have recorded in the past.

Well, I really – I like when you guys create additional provisions. And I think it’s really crucial for analysts and investors to look at book value growth, because I think if you consider that that really does capture both earnings and whatever impact that’s not going through the income statement and going directly to book. So I think that is very valuable. Maybe a second question, based on your presentation. You show on Slide 10 some very impressive data on the net promoter scores, the most transparent and reliable bank, the most competent account managers and preferred bank to change to. One thing I would ask in that context is we’ve seen some data on account openings for the system throughout the year. And it’s not – we see some of your competitors, or at least one of your competitors, doing much better in getting new accounts. How would you describe what’s going on there? And why this competitor that’s showing – not showing as well in the metrics you’re showing, but when you look at account, or checking account openings, they actually look like they’re growing faster?

And that’s mainly to do with the information that’s available in CMF. So with the information that’s available, you can’t distinguish what’s the digital accounts, what’s not, in terms of this other comparator, which uses the current account, right? There was a lot that was changed. So today, you don’t need to have – the package doesn’t have to be the same as it was in the past with the line of credit and other additions to the current account. To make a more proper analysis, you need to look at what other banks also offer in terms of the prepaid cards for some banks. And we don’t use a current account, but we use a side account. We use a debit account, which is basically the same thing. It doesn’t have a line of credit. There we’re growing 630,000 customers year over year. So, you really need to add this information and based on the internal studies, based on the information that we can gather and see the evolution of the growth in terms of balances in these accounts, what we see is that we have by far much higher usage rates and by far we’re the leaders, with a substantial increase in terms of market share across the board. There is a report from the CMF for prepayment cards. And if you were to add that information that we have, unfortunately, without the information of the current account holders, for these other digital accounts, we have well over 50% market share at that point in time. So including what we think that other current accounts, these other banks have in their current accounts for this product, we by far have the highest levels of usage rates. So it’s not – one thing is to open an account and have money. It’s the other thing that’s more important is to have customers actually use the account consistently. And that’s where we think we’ve seen that we’re the leaders.

In fact, in the Slide #17, we clearly show the important differences in terms of the address, current account balance held by – between our customers relative to our main peers. So, as Pablo mentioned, apart from this explanation of the growth, it’s very important to be aware of higher balance held by our customers in the Slide 17 of this presentation.

I think all these other indicators is something part of the past, all these customer service indicators. So Banco de Chile has always been very focused in having the best customer service indicators, and having the brand really stand out in all these attributes. So this really attracts customers more easily to Banco de Chile. And customers really want to be a part of Banco de Chile, and the program itself of Cuenta FAN is very strong with many different benefits that promote the product as well. And that’s why so many customers are coming to ours. We think our benefit package for the customers are far more superior than what customers can have with other banks.

Thank you very much. Congratulations on the high-quality quarter. And I would just summarize it, it captures it in the book value growth. Thanks.

Thanks.

Thanks.

Thank you very much. Our next question comes from Mr. Tito Labarta from Goldman Sachs. Please go ahead, sir. Your line is open.

Hi, Pablo and Rodrigo. Thank you for the call. My question is a little bit, I guess, on the political environment and the potential impacts. Maybe just give us your thoughts on the upcoming presidential election? What do you see the risk could be there from the different candidates and how you think about that in terms of what that could mean for GDP growth and also sustainable ROE for the bank? Also, I guess, factoring the change, potential changes to the constitution. That’ll be helpful. Thank you.

Hi, Tito. This is Rodrigo Aravena. Thank you for the question. We are aware of more uncertainty in the short-term. So that’s why in the beginning of this presentation, we mentioned some sources of uncertainty. We will have, as you mentioned, a potential election in November, a potential runoff in December of this year, but also there will be a change in the Congress because the lower house will be – it will be changed totally, while the half of Senate, it will be changed as well. And also, the recent ongoing constitutional process with an exit referendum way too far is scheduled for midyear of 2022. So in the short-term, probably political drivers will be an important factor to pay attention to, because we know that it affects the evolution of the current events. The evolution of expectations, the economy, et cetera, et cetera. It’s not clear what will be the policies adapted for the next President of Chile, because today we have different candidates with different proposals. There are some candidates with some specific proposals. So for example, rise in taxes, while there is another candidate that in his program considers lower taxes for companies, for example. So I think that it’s too early to provide a more accurate estimate in terms of the specific impact. I think that it’s better to wait for the final result of both the Congress election in November, and the final results of the runoff in December of this year. But begin this discussion, it’s important to be aware that in 2022, there will be a lower economic growth, because we will not have some temporary factors that positively influence the economy during this year. For example, the Central Bank today is rising interest rates. It will affect the economy in the…

I think just to add, for 2021 ROE will be quite strong, especially in the fourth quarter, because of what Rodrigo mentioned, the higher inflation that were expected for this year and next year. So there’ll be good levels of inflation in the fourth quarter. Higher interest rates that are also benefiting us. So the fourth quarter will be an ROE that should be over the 20% level for the fourth quarter ROE. For next year, again, it should probably have similar ROEs to 2021. And in the medium term, in our bass-line scenario, obviously, it depends on the outcomes of all these factors that Rodrigo said. We should have around 16% to 18% ROE, so in the medium-term ROE.

Okay. It is very clear. Thank you.

Also this year and next year…

About mid-term.

Yeah, yeah.

Yeah. Okay, understood, great. Thanks a lot, Pablo, Rodrigo. It’s very helpful.

Thank you very much. Our next question comes from Mr. Ernesto Gabilondo from Bank of America. Please go ahead, sir. Your line is open.

Hi, good morning, Rodrigo and Pablo. Thanks for your presentation and for the opportunity. My question is on your NIM expectations, but not for the next quarter, but for the next year. Considering we already have like important heights in this year and probably that should continue next year, how do you see the NIM pressure in 2022? And if you think that in 2023, you will be able to reprice your loan portfolio and then see an expansion? And then, my second question is, I mean, how comfortable you are to take market share, considering the political risks, considering that at some point you will go to normality after the liquidity has gone down from the pensions withdrawals, then unemployment rate continues to be high and inflation? Inflation could still be sticky. So how do you see that in terms of loan growth? Thank you.

In terms of NIM pressures, we’re not seeing NIM pressures. If you look at all the figures, everything is positive. So I wouldn’t say NIM pressures for this year or for the next. We have a higher-level of inflation expected for this year, also high level of inflation for next year. And if you analyze the liabilities of banks in Chile, you can see that the levels of current account balances, non-interest-bearing balances has increased significantly. If we look back 2 years ago or something, it’s a huge level. So the rise in interest rates is positive for Banco de Chile that repricing is taking place much faster. So we’re starting to see a huge benefit, way quicker than we were in the past. So for next year, there’s no pressure, and then, we will be positive, and in the following years, positive pressures. And then, obviously, as inflation comes down in 2023 and beyond. You have that – would be the pressure and those years. But in the short-term, we see positive events. If we look at the GAAP on the balance sheet, we have a GAAP on the balance sheet that’s just over Ch$7 trillion, which means for every 100 basis points, that’s just over Ch$70 billion and change in the net interest income. And in terms of rates, if we look at rates, how this positively affects us. And if we think about, as you mentioned, what’s the normalized level of current account balances in banks, maybe that can go down would be maybe for 100 basis point change when everything’s fully repriced, this would be about Ch$100 billion more in net interest income. But if we look at the levels of today of this higher level, if that stays in the balance sheet and the liabilities,…

So, Ernesto, at the end when we put all these pieces together, it’s reasonable to stay then ROE for this and the next year, even above to the long-term level. So as Pablo mentioned, despite the slowdown of the economy, the political risk, and specific [syncretic] [ph] factors that we have, there will be a positive impact from the change in inflation interest rate in our final bottom line.

Yeah. And we can continue growing especially, because of the capital base. Since we have the capital base we can continue growing, we can also continue to giving an attractive dividends to our shareholders.

Thank you very much, Pablo. Just a follow-up on means, we have already heard the conference call of your competitors. And they’re expecting in pressure next year, as they say that the long repricing takes around 12 months, so just wanted to understand if it’s different in your case?

I’m not sure why, for our case, in our balance sheet structure, we don’t see them pressures.

Ernesto, it’s important to be aware that during the last year – sorry, during the last month, we’ve seen average risk inflation, high interest rates, the guidance from the Central Bank, relative to the interest rate has changed during the last months. So that’s why taxation today are even better relative to that we had a couple of months ago.

It’s also important to look at how we fund the business. So we haven’t had large changes that increase our net interest margin this year, based on funding, for example, long-term assets with short-term liabilities. So we don’t have an issue related to this on our balance sheet. I’m not sure the detail you have for the other banks on why they’re seeing such a drop in net interest margins.

Okay, perfect, thank you. Just wanted to know how much time takes you to reprice in the loan portfolio, 6 to 12 months?

Today, when you’re looking – today, we start seeing positive. At first, if you look in the financial statements, you can see the maturities of the assets and the liabilities are not 40. But if you do an analysis, you can see that from already month one based on the current structure of the balance sheet with large level deposits that we have today that we’ve accumulated over the last 2 years. We’re already seeing positive impacts. If you look in the slide – positive benefits, if you look on Slide #15, you can see where we have customer income breakdown, we’re already having nearly Ch$10 billion more and income from our deposit margins and from low margins we have Ch$0.5 billion, so we’re already seeing in this quarter benefits from the rise of interest rates.

Okay, perfect. Thank you so much.

Thank you very much. Our next question comes from Mr. Yuri Fernandes from J.P. Morgan Asset Management. Please go ahead, sir.

Hi, Pablo. Hi, Rodrigo. Thank you and congrats on hedging policies on the booking to growth, like when I was very sound, and as everybody mentioned, good to see book very growing? I have some follow-ups in this margin question, because for me, your speech has been surprising of stable margins for 2022, because we always thought that higher rates are negative for the Chilean banks in the short-term, because you have a lot of time deposits. Liability, basically repriced faster than rise it. And looking here for a balance sheet, I totally get your point on demand deposit. They are staying maybe 65% of total deposits, but historically they were below 50% of their book deposit and 50% is a good number, don’t get me wrong. That’s a very good number for that demand deposit, the ratio of time deposits. The point is, as rates move up, do you believe demand deposits will continue at that amount, because I think there is a cost of opportunity here, higher rates, maybe some of those corpus that were taking for that loans, and trying to protect themselves and had like excess liquidity, they can first use the liquidity or we can move to time deposits. And the thing about the time was right, like people, I guess the big increase in demand deposits. They were related to the patient withdrawals. So as people have a higher cost opportunity, maybe they will change that for time deposits, right? So that benefit, maybe it’s short lived. So my question is, what do you think about deposits going ahead with higher rates? So, what is your inflation expectation for 2022, because I think inflation will be high, but maybe not as high as the 5.8% inflation you’re seeing for this year, right? So my point is, there are so many headwinds that – for me, again, I’m trying to be pushed here and understand more because SME having fled, if we’re able to get that that’s good news. I think, market is not expecting this. We are able to understand more, the moving parts, need to tell me you have different portfolio mix or we have a different hedging policy that would be very helpful for us to understand the flatness. And I have a second question regarding Cuenta FAN. Looking to September data, there was a deceleration in that edge versus June, I guess, the acceleration with turning October, you have a short representation showing like the net ad decelerate again. But what happened in September, like why net ads were lower versus June in the quarter? Thank you.

Thanks, Yuri. In terms of NIMs, and how they will evolve in the future. I think, it’s important to mention that not only, we didn’t only see growth, because of the Fogape. If you look back since 2019, or so it’s pretty even the growth that we’ve seen in both individuals and companies. And, obviously, a portion of that like I mentioned, when I was – I mentioned that the rise the benefits, once everything is fully priced in, couldn’t be if nothing changes, and continues to see increases in the current levels of account balances and current accounts, could be Ch$160 billion more than net interest income. But that’s not reasonable really to expect that. That’s I was saying that it’s more reasonable to expect a level of Ch$100 million, which would mean a decrease. Now, when that decrease happens, and how much and how long is this? It will depend. But it’s reasonable to expect that we should be able to see a decrease in the future that we shouldn’t continue seeing these increases, because of the higher interest rates because there’s more reasons to invest that money or to spend the money that’s in the current account. And in terms of you also have to take into consideration, inflation and expectations, and how banks position themselves, to position themselves while they’re not, if you looked at our U.S. GAAP position that’s actually increased on the balance sheet. So, today, we have U.S. GAAP position, over Ch$7 trillion, right? Last quarter, we had a GAAP position that was at Ch$6.6 trillion. And if we look at one-year ago, we had a smaller U.S. GAAP position. That was around the Ch$5.8 trillion. So this will also help us in terms of if you look at the level of how much income that we generated with the inflation for this year was a lower GAAP position than what we’ll have for the next year. So we’ll have a benefit on that side. And also the funding how we manage the bank like, I mentioned, the next year, we weren’t funding long-term liabilities with short-term funding. So when we start to see, which is reasonable to expect a decrease in current account deposits, we won’t have to go to the market to fund these mortgage bonds, so that shouldn’t have pressure on their line.

If I may just follow-up here, Pablo. What is your inflation expectation for next year, because then there’s so like maybe you can have a higher inflation gap. So maybe even if inflation is lower, you can benefit more from that, right, I guess, that’s my point. How much is it will take into next year?

Can you – you have to take into consideration. Sorry, one last thing that I didn’t mention is portfolio growth. So if we look at what happened in 2020, on average, the assets are more focused in 2020 versus 2019. On lower margin products, right, we started 2020 better, and because everything that we know, 14% loss in the market share, basically across the board for the banking industry and consumer loans. SME loans were focused on Fogape low interest rates. For 2021, we’ve seen the recovery, a slight recovery in terms of consumer loans, 2021 we should have a better growth mix as well. And in terms of inflation…

Yeah. It’s very important to keep in mind the different trends that we will likely see during the next year. So one thing is the average inflation, the average level of liquidity that’s probably, we will have a higher inflation rate in the first half of the year relative to the second half of 2022. So specifically, which stays an inflation rate of almost 4% at the end of the next year after posting an inflation rate of almost 6% during this year. And an environment where the interest rate will continue, right, and so probably the level of liquidity of the economy in the next year, including total deposits, of course, will likely have a negative growth in the next year. If we analyze, for example, a leading indicator with M1 supply money, which is released by Central Bank. A couple of months ago, it was growing 70% during the year. And today, the total money supply economy is growing around 55% from economic growth. So, it’s important to consider that even though the average inflation of the next year will be above the bullish target of the Central Bank, there will likely be a downward trend during the year with a negative growth of total deposits in 2022, probably, the slowdown will start by – the slowdown of the level of liquidity probably will begin now by April, the second quarter of next year. Pablo, you want to...

Yeah, in terms of the final count, I think the kind of count is something that you can take online, it’s very easy to do. It really depends on the economic situation as well. We had lockdowns, there’s many different reasons. It can be in some quarters that it’s a stronger driver, if you remember, in between the – we went back into lockdown in the second quarter of 2021. And so, as the basing continue to increase, obviously, we should start to see a slowdown, I don’t expect that these levels will continue growing so strongly, because if you look at the size of our current account holders in Banco de Chile, personal current account holders in the Banco de Chile is about 1 million customers, right? So this is 640,000 customers, it’s a huge number. How height in the score is, workforce in Chile is around 8 million, 9 million. So really, these are very reasonable numbers. And more than the growth of these numbers in the future, I would say, it’s how we’ll roll out and continue to cross all these customers with new methods and get these customers back to use Banco de Chile is their prime primary bank account. I think that for Banco de Chile has been always very strong with very good customer service levels up times. And if you look at other indicators, that purposes is that we were the leaders in terms of current account deposits in terms of individuals. We have the highest level of current account deposits, and if you start looking at different indicators in other areas, you can see that world leaders also amongst companies et cetera. So customers generally use us as the primary bank account company and individuals. And hopefully that will translate…

All right. And, it’s good, because it’s not just on a wallet account, right, just on checking account as you said, so it can cross-sell like the loyalty of the bank, all those things, so like very clear.

So Cuenta FAN customer, the idea of our FAN account was that a customer in Cuenta FAN belongs to Banco de Chile, it’s a part of Banco de Chile, uses the same website, uses the same app. We cross all them. They use the same branches as Banco de Chile. So it really connects them with Banco de Chile that gives us cross-selling opportunity and it’s a deposit account, it’s not a prepaid account. It’s the same as – more or less the same as a current account. It’s free, has lots of benefits. It’s an interesting account for individuals and there’s new promotions every day that come up for the FAN. So it’s really bringing into a lot of customers.

It’s kind of a rebranding of the traditional checking accounts, right? Super. Clear, guys, and thank you and congrats again for the strong quarter.

Thanks.

Thank you very much. Our next question comes from Jorge Henderson from Santander. Please go ahead, sir. Your line is open.

Hi, Pablo. Hi, Rodrigo. Thanks for the opportunity, and congratulations for the results. And I have 3 questions. My first question is on our cost of risk guidance. And you mentioned you expect your medium term sustainable level of cost of risk to be around 1% and 1.1%. My question is, do you consider any potential additional provisions on this launch? And my second question is on Fogape loans, just wanted to ask you the data. What percentage of your loan book is currently for Fogape loans? And my third question is on the acquiring business. So in the context of the implementation of the 4 parts payments model in Chile, would you consider investing in compete on the acquiring business with anytime soon? That would be helpful. Thank you.

Hi, Jorge, this is Rodrigo Aravena. Let me say 2 of the 3 opportunities that you mentioned. In terms of the cost of risk, you’re right, we said in the presentation that our guidance around one 1.1%. But actually what is very important to keep in mind that we are expecting that I will put a freeze will remain below the average of the industry. So what we’re expecting is, it’s an under of the industry or slightly above our cost of risk. So it’s reasonable suspect for the industry a number higher than 1.1%, let’s say 1.2%, et cetera. So basically, our guidance for cost of risk more than a specific number. What is more important to consider is that we’re expecting that the cost of risk relative to the industry will remain in the future, because we are very confident that our quality is much better than most of our peers, we are faced with that. We will continue leaving the industry in that area. But, of course, it’s very important to analyze the evolution of the economy, the outcome of the elections, the evolution of the employment, et cetera, et cetera. In terms of the different positions we have assessed in different conference calls that in today as well, that is very important to analyze the evolution of the economy, the uncertainty the federal we have a prudent approach in terms of risk management for the banks. So that’s why we’ve been increasing the additional provisions during this year, especially considering the values that we’ve seen in different asset quality indicators as a result of excess of liquidity, as a result of the pension funds withdrawal, et cetera. So we came to now that a portion of these additional provisions will be released in the future, but…

So, for your second question, in terms of Fogape, so we have for this year, about 4% of the portfolio of this year is Fogape Reactiva. And about 8% of the portfolio is the Fogape loans from 2020. So total of around 12%.

Very clear. Thank you very much.

You’re welcome.

Thank you very much. Our final question comes from Mr. Alonso Garcia from Credit Suisse. Please go ahead, sir.

Hello, everyone. Thank you for taking my question. I just want to touch-base on your expectation for loan growth next year, if you could comment on how much you expect to grow by segment? And if you could comment this on both sides. First, on the demand side, considering that next year individuals will not have as much liquidity as they have had over last couple of years. But also considering that the macro outlook is also more uncertain, probably. And also, on the supply-side, how much appetite is for you to grow in each of the segments? Thank you.

So, well, for this year and the next year, it’s almost the year is over. But for this year, around 7% to 8% for 2021. Growth, for what we have been seeing, which is positive, is better origination from consumer loan. So we had a good quarter this year, the industry, us as well. For next year, we think that the figures will be better. But if we look in the medium term, it’s important to mention what Rodrigo mentioned. Is that the 2 times elasticity that we saw in the past of loans to GDP, probably isn’t going to be something that we’ll see in the short-term. So it’s more reasonable to expect growth levels that are below that 2 times elasticity in the medium-term when you’re projecting. For 2022, what we’re seeing is an expansion of around 6% to 7% in nominal terms. And this is really still going to be driven by the expansion in mortgage loans, but at a slower pace than we’ve seen in the past than 2021, because of the rise of interest rates, which will affect the demand side. But there is also a tighter supply side that we’re seeing from banks as well, because it’s more difficult with all these issues that have happened internally in Chile for funding. So obviously, this is affecting the higher interest rates. There is more supply issues for our funding locally and that affects rates and durations of these loans. In terms of consumer loans, we’re seeing this recovery, as I mentioned, from this very weak performance posted last year. And we’re expecting – we should be seeing somewhere around the 6% growth level. Obviously, it depends on these issues of liquidity, but liquidity continues to how it is today and continues to evolve positively in terms of a more normalized level of liquidity, I mean. We should see something around 6% growth for consumer loans. And then, the commercial side area, it depends on the political obviously, for the demand. So how much – what’s happening internally in Chile, how the short-term events follow through, and that will really have an expectation or changes in expectations. But in their base case scenario, what we’re seeing – the SMEs should continue to lead commercial loans with a growth level of around 6%, while the larger companies should grow slightly below that. And the larger companies will be probably more dependent on what’s happening internally in Chile. So for Banco de Chile, obviously, we want to be growing above those levels, focused in these high margin products, very focused on the consumer middle- to upper-income individuals, and obviously SMEs.

Very clear. Thank you very much, Pablo.

You’re welcome.

Thank you very much. It looks like we are showing no further questions at this point. I’ll perhaps pass the line back to the Banco de Chile team for their concluding remarks.

Well, thanks, everyone, for joining our call and we look forward to speaking with you for our full year results. Thanks.

Thank you very much. This concludes our call today. We’ll now be closing all the lines. Thank you very much. Goodbye.