Good afternoon, everyone. And welcome to Banco De Chile’s Third Quarter 2017 Results Conference Call. If you need a copy of the press release, it is available on the company’s website. Today with us, we have Mr. Rodrigo Aravena, Chief Economist and Senior VP of Institutional Relations; Mr. Pablo Mejia, Head of Investor Relations; Mr. Cecil Diaz, Investor Relations Officer; and Daniel Galarce, Head of Financial Control. Before we begin, I would like to remind you that this call is being recorded and that 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. I will now turn the call over to Mr. Rodrigo Aravena. Please go ahead.

Good afternoon, everyone, and thanks for joining us today on our conference call for the third quarter ‘17 result. It’s a pleasure for me to share with you our comments regarding the Chilean economy and the results of the banking industry during the quarter. Finally, Pablo Mejia, our Head of Investor Relations, will review our third quarter financial results. Please turn to slide number 3. In general, there are several signs of recovery in the Chilean economy, suggesting that GDP growth will likely increase significantly in 2018 after having full year with average rate of only 1.5%. Improvement in the Chilean activity can be seen in the chart on the top-left section. The monthly GDP, Imacec in Spanish, grew by 2.4% year-on-year in August, which is higher than the 0.5% of service in the first half of this year. This recovery has been a consequence of the higher dynamism in the mining sector, which posted a strong 9.2% annual growth in August. It is worth mentioning that the economy is also improving on a sequential basis, seems the Imacec grows 7.3% in the quarter ending in August, with an impressive price of 50% in the mining activity. In addition to these good numbers, several leading indicators are anticipating as far as the recovery. For example, the breakdown of trade balance, as seen on the top-right chart, have shown an upward trend in both exports and imports with durable against capital input growing at a double-digit rate. Following this idea, several surveys are suggesting an improvement in local sentiment as you can see in this chart on the bottom-left section, specifically. The consumer confidence posted its best level since the beginning of 2016, returning to the optimistic sound. Business confidence also hit its highest level in more than two years, in…

Thank you, Rodrigo, and please turn to Slide number 8. Net income for the quarter reached CLP 134 billion, currently 5% less than the same quarter last year, and 6.2% lower than the second quarter of this year. The main driver for those figures were surprisingly low inflation rate that we experienced this quarter as measured by the U.S. of minus 0.03%, and the higher corporate taxes. Despite this negative effect in inflation on our results, our 9 months 2017 net income is 1.3% higher than the 2016 figure. And on a pretax basis, it increased 4 -- by 4%. This shows that we are able to face the scenario by continuing to grow recurring income from our target segment, a greater contribution of our subsidiary and keeping cost of risk and expenses at low levels. We are confident that regardless of this quarter’s lower net profit level, we are on track to post full year figures in line with last year, and we expect that 2018 will be slightly better, especially when accompanied by an improved economic scenario, higher loan growth and normalized inflation, as mentioned earlier by our Chief Economist, Rodrigo. Please turn to Slide number 9. As we have mentioned in the past, the key to our successful track record is the results of our customer-centric strategy that focuses on delivering sustainable and profitable growth. In the next few slides, we will discuss how we have shifted our strategy in recent years to focus on the retail segment, especially in high-income individuals and SMEs, which is providing the most attractive growth opportunities in the banking industry. Our emphasis on customer experience is bearing fruit. Our productivity is improving, thanks to an emphasis on streamlining processes and investments in technology and how we have managed to keep risk…

[Operator Instructions] Our first question comes from Carlos Macedo with Goldman Sachs.

A couple of questions. First question, looking at that improvement that you had in your cost of risk, and thank you for giving us the detail here that a lot of it was driven by better quality in the commercial sector, how sustainable is this going forward? I understand economy is getting better, and you’re probably going to see more loan growth and -- but the cost of risk this quarter was the lowest in seven years. Is that something that you think is sustainable? Is that something that you think you can keep for the next few quarters? Or do we see a little bit of a normalization in the upcoming quarters? A second question. I just want to get ahead of little bit. Thank you for putting the text at the end of your release, commenting on the final steps for the dissolution of SM-Chile and the impact that will have on your free flow and your tax rate, plus 5 percentage points. Is the timing of that, the first quarter 2019, what’s the exact timing for that? And what’s the process for that to happen?

The first question in terms of cost of risk, it’s true. You could say that we’ve had a very low level of about 0.8% this quarter, and that’s mainly due to the effects, those you mentioned that we had a very good quarter in terms of the wholesale book. In terms of how sustainable is that, we think that a sustainable level for Banco De Chile and a good economic cycle we’re expecting for 2018, for example, is a lever closer to 1%. And why? Because we think there should be more normalization in terms of the wholesale book. What we’ve seen in this provision release this quarter and this year the last few quarters shouldn’t continue. And what we’ve seen in the consumer book, we should see a possible slight improvement in line with the expectations that Rodrigo mentioned earlier. So net-net, the effect should be slightly higher and a level closer to 1%, which should be more sustainable than the 0.8%. In terms of SM-Chile, I think if you look at our earnings and how that’s evolving this year and next year, by just doing simple math, we should expect that by April -- by March 2019, the dividends that are paid to SM-Chile and SAOS should be enough to create -- to completely pay off this debt. By the end of April is when the dividend that transferred from SAOS to the Central Bank, and that’s when the process of the dissolution of SM-Chile and SAOS begins. And what does this mean for throughput? Today, we have a level of throughput of around 27%, and this should move our throughput to around 44%.

And that’s when you say, middle of the second quarter of 2019 is when the tax rate should go up as well, right? Because then you won’t be paying the additional dividends that are tax-deductible.

Middle of which year? Sorry, I couldn’t hear.

The second quarter of 2019.

In 2018 is when the -- we’d have a lower effective tax rate in 2018. By 2019, there’d be no benefit.

Okay. Perfect.

We’re expecting something around 19% for the effective tax rate for 2018.

Okay. So that would mean if it’s 5 percentage points, you go up to a close of 24% for 2019, correct?

20 -- how much, sorry?

24%.

Yes. 24%.

[Operator Instructions] Our next question comes from Alonso Garcia with Credit Suisse. Please go ahead.

Good morning everyone, thanks for taking my question. My first question is regarding your loan growth expectations for next year, considering the positive news on the macro front. If you could also break it down by segment. Are you expecting a significant improvement in the wholesale segment? And my second question is regarding competition. How is competition evolving across the different segments considering also the better macro? And also how you think a potential consolidation of the Chilean banking system can affect this competitive landscape?

For the loan growth in the industry, what we’re expecting is a level of around, in real terms, 5 -- between 5% and 6% for next year. We’d have to add inflation to that. That’s the overall. In terms of commercial loans, we’re expecting an improvement. We’re expecting also to be just maybe slightly below that level that I mentioned, between 4% and 5% in real terms. And how is that composed? We think that this number will be more driven by SMEs, which should grow near the -- or just under 7%, and larger companies, which should be around the 4% level. In terms of consumer loans, again, just to remind you, this is all real numbers in real terms. In consumer loans, around 6%, where this would be driven by middle and operating income individuals. And for mortgage loans, like I mentioned, the level of around 7% is what we’re expecting for next year, more of a normalization level.

All these [indiscernible], correct?

Sorry?

All these for the system as a whole?

For the system. And for us, where we’re concentrated in growing is SMEs and upper and middle income segments in consumer loans. So we should continue to see improvements in that. And depending on how the economy evolves and the business confidence and investment demand evolves, we should possibly see improvements in the corporate sector as well. But that’ll really depend on the economy and how spreads evolve.

The competition.

In terms of competition, obviously, in the short-term, these mergers of the banks that you mentioned, there’s some opportunities, but in the medium-term, this obviously consolidates through all a bit more for the systems and it’s a new competitor that we have to -- that, in reality, we’re used to having competition in Chile, it’s a very competitive industry if you look at the wholesale segment, there’s 20 banks that we compete with today who are our main competitors in the retail segment, is two other larger banks in Chile. So it something that we’ve been used to in the past, and we think that it’ll continue, but we don’t think that will be a huge disruption of this new competitor.

Our next question is from Sebastián Gallego with CrediCorp Capital. Please go ahead. Sebastián Gallego: Hi, everyone, thanks for the presentation. Just one question. Can you comment on what you expect for next year in terms of OpEx productivity, particularly when you look at employees and branches declining roughly 5% year-on-year? What can we expect going forward, particularly in 2018? Thank you.

In terms of operating expenses, you can expect for Banco de Chile is its continued focus on controlling cost. We’re looking to continue to improve productivity, this means that we’re looking at continuing to optimize the branch network and introduce new digital initiatives across all the banks, as mentioned throughout the presentation. What does this mean for next year? Probably what we’ll see is operating expenses growing slightly above inflation. The efficiency level improving, in part. Because of our operating net expenses are growing slightly above. Inflation and then on other hand, inflation normalizing, which should also help that indicator.

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

Well, thank you for listening and we look forward to speaking with you on our next quarter full year-end results. Thanks.