BANCO EDWARDS

1
BANCO EDWARDS

• Chilean Financial System
• Fundamentals of the Chilean Economy
• Financial System

2
CHILEAN ECONOMY LATIN AMERICAS MOST SUCCESSFUL
ECONOMY
GROSS DOMESTIC PRODUCT (YoY )
12.3
10.6
10.6
7.3
8.0
7.6
7.0
7.4
6.6
5.7
5.6
5.5
3.7
3.5
3.4
-1.1
Source Central Bank of Chile.
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CHILEAN ECONOMY SAVINGS AND INVESTMENT
GROSS DOMESTIC SAVINGS/GDP (YoY)
AGGREGATE INVESTMENT (1) / GDP (YoY)
27.4
27.2
26.9
26.5
23.8
25.8
24.1
22.3
21.8
23.8
21.5
22.6
21.4
22.1
20.9
21.1
21.1
20.9
20.2
20.0
91 92 93 94 95 96
97 98 99 00F
91 92 93 94 95 96
97 98 99 00F
(1) F ixed Capital Investment plus variation in
stocks Source Central Bank of Chile.
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CHILEAN ECONOMY
CONSUMER PRICE INDEX (YoY change)
FISCAL DEFICIT(1) /GDP ()
18.7
2.7
2.3
2.3
2.0
2.0
1.7
1.6
12.7
12.2
0.4
8.9
-0.9
-2.0
6.6
6.0
5.2
4.6
4.7
2.3
91 92 93 94 95 96 97
98 99 00F
91 92 93 94 95 96 97
98 99 00F
(1) Fiscal Deficit involves General Government
(not included Central Bank and Public
companies) Source Central Bank of Chile.

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CHILEAN ECONOMY EXTERNAL ACCOUNTS
TRADE BALANCE (USD Bill.)
CURRENT ACCOUNT/GDP ()
1.5
1.4
1.7
1.4
-0.1
0.7
0.7
-0.3
-1.3
-2.1
-2.3
-1.0
-1.1
-3.1
-1.6
-2.5
-4.8
-5.7
-5.1
-5.7
1991 1992 1993 1994 1995 1996
1997 1998 1999 2000F
1991 1992 1993 1994 1995 1996
1997 1998 1999 2000F
Source Central Bank of Chile.
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CHILEAN ECONOMY
Solid and Stable Economic Fundamentals

• GDP growth rates above 5 for 2000 and on.
• Low inflation rates 4.6(F) for 2000.
• Fiscal discipline through a balanced budget.
• Savings and investment goals above 20 of GDP.
• Interest rate levels compatible with reactivation.

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CHILEAN ECONOMY

• Signs of economic recovery

Economic Growth (IMACEC) (1)
Exports and Imports YoY monthly growth


8.1
7.4
6.4
6.4
5.9
5.3
4.9
5.0(F)
4.9
3.8
15.1
Imp.
2.4
4.8
1.1
3.9
9.0
1.1
Exp.
-4.6
(1) YOY monthly growth. Source Central Bank of
Chile.
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CHILEAN FINANCIAL SYSTEM
FINANCIAL SYSTEMS MAIN FEATURES

• Solid and stable financial system
• Asset quality superior to regional peers
• Strict regulatory environment
• Consolidation and globalization underway

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CHILEAN FINANCIAL SYSTEMINDUSTRYS STRUCTURAL
CHANGE
Consolidation underway...
Share of Loans(1) Held by Foreign Banks
Share of Loans (1) Held by Top Five Private Banks
December 1995
December 1995
September 2000
September 2000
(1) Excludes interbank loans. Source
Superintendency of Banks and Financial
Institutions.
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CHILEAN FINANCIAL SYSTEM
RANKING OF TOP 10 BANKS
(1) Excludes Interbank Loans. Source
Superintendency of Banks and Financial
Institutions
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CHILEAN FINANCIAL SYSTEMMAIN PLAYERS

• substantial consolidation opportunities are
  still present

(1) Excludes interbank loans and Banco del
Estado. Source Superintendency of Banks and
Financial Institutions.
12
CHILEAN FINANCIAL SYSTEMPROFITABILITY EVOLUTION
ROAA
ROAE (1)
20.9
1.6
19.0
1.5
18.2
1.4
17.4
1.4
1.3
16.4
16.2
1.2
1.0
0.9
0.9
0.9
13.4
11.7
11.4
0.7
11.0
9.2
1991 1992 1993 1994 1995 1996 1997
1998 1999 J-S99 J-S00
1991 1992 1993 1994 1995 1996
1997 1998 1999 J-S99 J-S00
Source Superintendency of Banks and Financial
Institutions.
(1) Shareholders equity considers capital and
reserves plus net income.
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CHILEAN FINANCIAL SYSTEM CREDIT QUALITY RATIOS
1.9
1.72
1.51
1.00
1.20
1.02
0.95
Past Due Loans / Total Loans
0.91
0.81
1992 1993 1994 1995 1996
1997 1998 1999 Sep 00


Allowances
330
3.2
to Total Loans
to Past Due
2.9
3.0
2.7
201
263
2.1
2.2
186
168
167
1.7
1.7
167
154
1.6
146
1992 1993 1994 1995 1996
1997 1998 1999 Sep 00


1992 1993 1994 1995 1996 1997
1998 1999 Sep 00


Source Superintendency of Banks and Financial
Institutions.