Good morning. And welcome to Banco de Chile’s Second Quarter 2013 Results Conference Call. If you need a copy of the press release issued yesterday, it is available on the company’s website at www.bancochile.com today with us we have Mr. Pedro Samhan, Chief Financial Officer and Mr. Pablo Mejia, Investor Relations Manager. Before we begin, I would like to remind you that this call is being recorded and 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 notes in the company’s press release regarding the forward-looking statements. I will now turn the call over to Mr. Pablo Mejia. Please go ahead, sir.

Good afternoon. It’s a pleasure for me to share with you our comments on Banco de Chile’s second quarter 2013 financial results. Again as a reminder, our link to the slide presentation is available on the website, at www.bancochile.com under Investor Relations. To begin, please turn to Slide number 2. During this conference discuss the environment, the results of the banking industry, Banco de Chile’s results during the quarter and we’ll end the call with the peer comparison. Please turn to Slide number 3, which contains an overview of the recent developments in the macroeconomic environment. After three years of strong growth of around 6% per year, the Chilean economy has showed signs of deceleration in the activity during the first semester of this year posting a GDP of about 4% year-on-year. This downward trend has been widely expected by the market due to a slowdown that has been seen in the emerging economies a weak recovery in developed nations and local aggregate finance that has level off to a more sustainable long-term rate. This decrease in economic activity as in mainly due to our contraction that is referenced boosted among other practice by a drop in corporate confidence due to lower commodity prices, higher operational costs and more cautious outlook regarding the social and political scenario. Private consumption has also decelerated but more gradually in line with persistent positive fundamentals for the Chilean pesos. As a result, the outlook for GDP growth for 2013 decreased from 5% in March and 4.4% according to the lend estimate. Despite the reduction, this figure implies an improvement in GDP during the coming quarters. The more optimistic view for the rest of the year is based on the persistent lower employment rate which maintains a positive consumer confidence relatively stretchable industries in the…

Thank you Pablo. The following chart summarizes our successful financial performance and business to the bank, to our team. First of all, as shown by the chart on the upper left, our net operating margin measured as operating income net of credit charge over average interest earning assets reached 5.3% at the end of the quarter well above all of our competition. This figure is even more impressive if we consider that we are the banks that still has room to continue growing in the segment which is significantly more profitable that the wholesale segment. In terms of operating sales we came for the first time in our history in line with the best cost-to-income ratio among our peers posting a figure of 43.9% for the first semester of 2013. As mentioned by Pablo earlier in this presentation the ratio has been achieved through a gradual interaction of cost control culture that aligns incentives with corporate goals as well as diverse projects and initiatives that aim to improve to growth activity in our operation and back office area. We are very proud that we have been able to post figures that we are confident that in the midterm we continue to improve. After saw our excellent operating margins net upgrades and our total income ratio we have post a very large GAAP in our favor as compared to our competitors in both return on average equity and return on average assets as you can see in both of the chart at the border of this slide. Taking together this indicator clearly demonstrates our capacity to effectively implement our business strategy by growing our retail portfolio increasing profitability of our wholesale segment controlling operating expense effectively and maintaining a prudent risk approach. Now if you have any questions we would be happy to answer them.

Thank you. The floor is now open for questions (Operator Instructions) The first question comes from Tito Labarta of Deutsche Bank. Tito Labarta – Deutsche Bank: Pedro and Pablo thanks for the call. Couple of questions, just looking at your loan growth, you have seen a slowdown in the quarter. Do you expect that trend to continue or do you think loan growth can pick up after kind of the slowdown we saw? And also if you continue plan to grow more in sort of the retail segments? Also, could you give us some expectations on how you think that would impact the asset quality? Thank you.

Thank you Tito. Well first of all we are seeing a slightly downward trend instead of along growing the financial system and our intention is continue growing as a similar part of the system but without sacrificing our risk-return equation that has been one of our clear policy during the last years. Where in some business we prefer not to gain market share because of the risk returns that we are generating we try to gain in this field. So in conclusion we will see the system this year may be growing a little of 10% knowing our terms more or less with Banco de Chile growing at a similar trend – little slightly maybe below what means to recover some m share participation during the second half. In terms of the asset quality exactly that really in terms of the usual banking business we have not participated for example in the last in line of July there were some complaints in some banks we are in the middle of a complaint now so really we expect to recur some participation there but not sacrificing asset quality in order not to grow so much in the consumer financing industry because of that reason. Tito Labarta – Deutsche Bank: So you think then asset quality should remain around the levels that we’re seeing today or, just want to get a color in terms of where you see NPLs trending towards?

Well it is very similar. We are seeing a very similar trends in the last year or really with that trend that we have found in the last quarter in order to reach a number by the end of the year 1.1%, 1.16% instead of a loan loss provision vis-à-vis the total loss. Tito Labarta – Deutsche Bank: I see, alright. Thank you very much.

Our next question comes from Thiago Batista at Itaú BBA. Thiago Batista – Itaú BBA: Hi guys good morning thanks for the opportunity. I have one question about regulation. Could you give an update to us about the two projects that are in Congress, the first one about the cap interest rate, La tasa máxima? And the second one regarding the consolidation of the credit bureau, do you believe that those projects will be approved this year and how much asset quality of individuals could improve in the medium term with the consolidation of the credit bureau?

Yeah well regarding the máxima interest rate is something that has been discussed in the Congress and we expect that by the end of this year by the last quarter may be the law will be passed. So the impact for this year should be minimal because of that result. In the future as you know in this implementation there is a gradual turn. At the beginning you have a more significant growth but after the value have a gradual trend so really the impact during the year during the next year would be also gradual in this trend. In terms of the other law really is something that I cannot tell you that will be obvious I will be enacted this year we are not sure about that. But probably any debt consolidation is very positive for the banking sector. So really we are looking forward to seeing this law enacted as soon as possible. Thiago Batista – Itaú BBA: Okay. Thank you.

You are welcome.

The next question comes from Jose Barria with Bank of America. Jose Barria – Bank of America: Pedro and Pablo thank you for taking my question. Just a follow-up on regulation; can you just tell us what’s going on the fee income side with regulation as well and are there any other regulatory sort of issues that could be of a concern to you and as we look at the next 12 months? And second, I wanted to understand exactly where you – or what the impact of a potential cut in benchmark rates would be in terms of our NIM? We understand obviously the sensitivity to the US inflation, but there we were to – we were to see a cut in rates later this year how that would affect your NIM? Thank you.

Thank you very much. Hold on please.

The next question comes from Saul Martinez with JP Morgan. Saul Martinez – JP Morgan: Hi... Jose Barria – Bank of America: Yeah, I will hold off on asking my question until you respond to the prior one. Saul Martinez – JP Morgan: Okay, Thanks.

To the whole instead of fee income obviously we see that the regulatory environment can affect the level of commission of the banks in general Banco de Chile in particular. However in our case because of t diversification in terms of the justification instead of different business that we have with number of legal in order to generate revenue in terms of mutual fund stockbrokerage house, insurance, etcetera. Within that we are prepared in order to try to counterbalance any impact that we will have instead of the commission reaction because of some regulatory changes. One of them could be yes instead of considering that of the transaction in order that the customer has to say okay when you may change in terms of the commission. We will receive preliminary draft in order to the review and receive any positive that this allows to do something that in terms of closing the account of the customer you will receive an answer timely. So really in this way we think that is in the right track. But nevertheless, going to the NIM and all the impacts the commission numbers will have we will see very significant impact because of that before we have some other source of revenue instead of commission that can increase in the future that are very well we use to raise the growth of the condition of the market for example mutual fund stockbrokerage houses, et cetera in terms of UF and CPI obviously we have a very significant impact not only Banco de Chile but all the banks in the first half we see very positive list during the second half owing the inflation to a normal basis. You’ll see today that inflation was 30 basis point as you have a UF variation of in both…

Yeah, well, let me go one by one. The first question in terms of the economy, the Chilean the fundamental of the Chilean economy within that we will maintain. You will have some different priorities depending on the new government instead of the fundamental if we market economy and really allowing the bank to do the business as we are doing today we will see a major risk. It will have some different intensity but it doesn’t mean that your business necessarily will, would suffer. However, it is very preliminary to give a final opinion we will see we are not sure today what is going to happen and you can see that in the case of the Bachelet program there have been some changes instead of the graduality and the intensity of the reforms, as you could see before that the primary election and you have seen today where some people from the center, the center political spectrum are being integrated to the team. So really it is very preliminary but we will see instead of the fundamental of the quarterly we will not see major significant changes. In terms of the UF what happened with the return on equity because of the U.S. order inflation are not carried deposits by the insurance instead of the CPI during the first half within that impact of that easily instead of return on our reduction equity is between 3% and 4% in terms of the return. You go to a more normalized inflation scenario your return on average equity could improve in 300 or within 300 or 400 basis points or the others thinks equal. Saul Martinez – JP Morgan: So in other words, you think under a normalized inflation environment your ROE could be 25%, 26%?

Yes it’s very similar to within that we have had during the last year. Saul Martinez – JP Morgan: Okay, great thank you very much.

You’re welcome.

And the final question comes from Boris Molina with Santander. Boris Molina – Santander: Yes thank you so much for the opportunity to ask questions. We have a question regarding your exposure to SMU. Could you please give us a detail of how much loans you have lend to this retailer, and if you have lend to FIPs or investment funds that are exposed to the equities of this company?

Yeah well…

One second please.

In terms of SMU I would like not to give you very specific numbers for obvious reasons but in general terms I could say that our participation instead of market share in the country is below the participation that we have instead of the loan market. And really the other thing we are always monitoring the financial inflation of this company as well as we monitor the financial preparation of any other company especially when you have this kind of issues or this kind of problems. But really the bank is taking all the measures that are necessary in order to decide the position and also try to review the situation and finish relatively lower exposure that we have today in order to minimize any impact that we would have on our P&L because of that and we are doing that on the way. Boris Molina – Santander: Is it possible, well you have lend to the FIPs related to this company or not, even if you don’t have any exposure?

No we don’t have any exposure to FIP this is other a very good point that you are mentioning that I was missing. Boris Molina – Santander: It’s okay – okay. Wonderful…

Holding on. Boris Molina – Santander: Excellent, thank you so much.

You’re welcome.

This concludes the question-and-answer section. At this time I would like to turn the floor back to Banco de Chile for any closing remarks.

Thank you. To close I would like to mention that the first semester despite the weaker economic environment and low inflation was very good for us thanks to our commercial to our commercial efforts to improve this operating margins our proven risk approach and excellent efficiency figures. As for the second semester despite the evolution of a more complex environment for the banking system we expect a stronger performance that we have already seen a pick-up in inflation, maintaining all the other things equal obviously. This together with our focus on improving profitability should allow us to post excellent result during the second half of the year. Thank you very much and we look forward to discussing our third quarter 2013 financial results.

Thank you. This concludes today’s presentation. You may disconnect your line at this time. And have a nice day.