Good afternoon and welcome to Banco de Chile's 3rd Quarter 2026 Results Conference Call. If you need a copy of the Management Financial Review, it is available on the company's website. Today with us, we have Mr. Rodrigo Aravena, Chief Economist and Institutional Relations Officer, Mr. Pablo Mejia, Head of Financial Relations, and Daniel Galarce, Head of Financial Control and Capital. Before we begin, I would like to remind you that this call is being recorded and the information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risk and uncertainties and actual results may differ materially. Please refer to the different notes 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. Thank you for joining this quarterly conference call where we will discuss the performance of the bank as well as the new trends observed in the business environment. We closed another solid quarter delivering net income of 288 billion pesos and a return Over the first nine months of the year, net income reached 947 billion pesos, up 22% year-on-year, and today we are raising our full-year profitability and efficiency guidance. During the quarter, we also regain market share in commercial loans, keep our leadership and local currency demand deposits, and maintain the strongest capital position among our main peers, with a Z-1 ratio of 14.1%. In addition, we continue to make progress in digital adoption, new commercial alliances, productivity and sustainability, which we will cover through good presentation. As in previous conference calls, before reviewing our performance, I'd like to briefly discuss the macroeconomic environment. Please turn to slide 3. The Chilean economy has experienced a temporary slowdown in 2026. GDP contracted 0.8% year-on-year in the third quarter after a 0.2% decline in the second quarter. At the start, On the upper left shows, this weakness has been concentrated in mining, which fell 12.9% year-on-year in the third quarter, while the non-mining economy expanded 1.1%. The decline in mining was also affected by weather-related disruptions associated with aluminum, bringing production to its lowest level since the mid-90s, while declining The chart on the upper right illustrates how far these two parts of the economy have decoupled. Based on the seasonally adjusted IMASEC, mining activity fell 11.5% between December 2025 and September 2026. While the rest of the economy has increased over 8% over the same period. Other temporary factors have also affected the economy and the labor market. This includes the fiscal adjustment implemented so far this year with a market slowdown in government spending growth and the decline in household real disposable income resulting from higher inflation. The labor market, shown on the bottom right, has reflected this broader slowdown with the usual lag. The unemployment rate reached 9.8% in the three months ended in September, 160 basis points higher than a year earlier, as employment fell 1.1% while the labor force grew 0.3%. Please move to slide 4. Despite the slowdown, there are good reasons to expect domestic demand to recover in coming quarters. On the consumption side, the chart on the other right shows that consumer imports have accelerated in recent months. Imports of durable goods grew 27.8% year-on-year in the three months to September, encouraging signals for household expanding. On the investment side, shown on the left, Gross fixed capital formation is not expected to grow this year, but this weakness is entirely explained by contraction. Maternity equipment investment has remained dynamic since last year and continues to expand in the second quarter, growing 3.7% year-on-year while contraction declined 2.4%. This trend reflects both the replacement of existing capital goods and companies preparing for a better economic cycle ahead. At the same time, this weaker economic cycle has helped improve macroeconomic balances, particularly by closing the current account deficit. As shown on the bottom right The current account moved from a deficit of 2% of GDP in the 12 months to the third quarter of 2025 to a surplus of 0.2% in the 12 months to June 2026. This correction provides a more balanced starting point for the recovery in economic activity. Please move to the next slide. We expect investment to lead growth in 2027 for two reasons. On the right, the investment pilot registered by the Capital Goods Corporation, or CBC, for the next year has reached a record of almost $100 billion, more than doubling since 2022. Mining accounts for the largest share, accounting for 40% of the total. This is particularly relevant for offsetting the negative impact of declining mineral rates and addressing the structural challenges the mining sector has faced in recent years. Investment in public works has also increased in the pipeline, which could provide a further boost to employment in the years ahead. This pipeline should be further supported by the reconstruction law, which was enacted on October 9th, As summarized in the table on the left. Its main measures include a gradual reduction in the corporate income tax rate from 27% to 23% by 2029, improving project returns, a permitting reform designed to shorten approval time and unlock delayed projects, and a tax inviolability regime that removes an important source of uncertainty by protected investment against potential tax increases by future government. The law also includes targeted measures on reconstruction, employment and capital market taxation. While these measures are not expected to have an immediate impact on activity, They should improve business sentiment and pave the way for a stronger growth for next year. Taken together, we see this investment boost as structural rather than cyclical. By expanding productivity capacity and addressing long-standing constraints, it could lift shielded strength GDP growth by 50 basis points over time. Please move to slide 6 to review our baseline scenario. We have revised our GDP growth forecast for 2026 to 0.4% from 1.3% in our previous goal. This revision reflects the weaker than expected mining output this year rather than a deterioration in the outlook. In fact, our forecast assumes a gradual recovery starting in the fourth quarter and for 2020. 27, we expect GDP to grow 3%, led by investment, which should expand 7.5% and supported by a 2.8% increase in consumption. On prices, annual inflation reached 4.1% in September, above the central bank's 3% target, mainly because of high international oil prices, which lifted the energy component by 10.2% year-on-year. Core measures, however, remain more contained, with CPI excluding volatile items at 3.2%. We know space inflation to close 2026 at 4.7%, up from 4% in our previous forecast, and to converge to 3% in 2027 as energy-related effects fade and a flag in the labor market persists. In this context, we expect the central bank to keep the monetary policy rate at 4.5% through the end of this year and during 2027, although uncertainty remains unusually high. The main source of uncertainty continues to come from abroad, particularly the conflict in the state of Urbos, which could keep energy prices elevated for longer, affecting growth and inflation. The evolution of the labor market remains one of the key variables to monitor. Before moving to the bank's results, I'd like to review the main trends in the local banking industry. Please move to slide 7. The industry continues to generate solid earnings in a context of weak credit demand. In the 9 months and the September, as shown on the upper left, the banking system recorded a net income of $4.5 In the third quarter, with a return on average equity of 12.2%, following an exceptional second quarter driven by inflation and due to non-recovery losses, Puzzle quality has remained broadly stable. As shown on the upper right, the 90-day NPR ratio stood at 2.5%, with a governance ratio of 139%, including additional provisions. Credit activity, however, continues to disabuse. The loan-to-use ratio on the bottom left stands at 74%, Well above the 93% peak rate before the pandemic. As of September, industry loans totaled P260 trillion growing 5.2% in nominal terms and 1.2% in real terms compared with September 2025. By product, commercial loans grew only 3.4% in real terms. Thank you for watching! Due to high expected inflation, we now forecast nominal loan growth of approximately 5% by December 2026, compared with 4% last quarter, and we have raised our net interest margin estimate to a range between 4 to 4.2% from 3.6 to 3.8%. On assets quality, we expect NTLs at the upper end Thank you, Rodrigo. Please turn to slide 9, which summarizes our strategy built to deliver sustainable results.

Our strategy rests on three pillars, customer centricity, efficiency and productivity, and sustainability. These pillars shape the way we work, how we allocate resources, and how we create value for our stakeholders. They translate into six core priorities shown in the center of the slide, from strengthening commercial activity and scaling digital solutions to developing culture and talents. Our mid-term targets are shown at the bottom. We aim to lead the industry in profitability, in local currency demand deposits, and in commercial and consumer loans, while keeping a cost-to-income ratio at or below 40%, an internal net promoter score of at least 73%, and a top three position in corporate reputations. As of September, we are ahead of our targets in customer satisfaction with an NPS of 77.5% and in efficiency with a year-to-date cost of income of 35.9%, while remaining the leader among local banks, private banks and local currency demand deposits with a 19.9% market share and continue to gain market share in commercial loans. Please turn to slide 10, which summarizes our financial and commercial highlights. The metrics at the top of the slide provide an overview of the quarter, which we will discuss in more detail during the presentation. Let me highlight three points. First, loan growth accelerated to 3.5% year-on-year on a pro forma basis, led by commercial loans. The net interest margin reached 4.4%, while cost of risk remained contained at 0.96%. Third, the efficiency ratio of 39.1% was temporarily affected by a non-recurrent bonus related to collective bargaining process completed this quarter, as well as inflation-driven salary adjustments. As a result, net income reached $288 billion, representing a return on average capital of 21.4% and a return on average equity of 19.9%. In the middle of the slide, we highlight several commercial and operational advances achieved so far this year. Commercial momentum continued to improve. Origination of commercial loans to SMEs grew 18% year-on-year. Outstanding commercial credit balances to SMEs increased 5%, and total commercial loans rose 4%. Customer acquisition also remained strong. Origination of digital current accounts increased 37% year-on-year, and openings of Plan Emprende accounts for small businesses rose 10%, while we launched a fully digital onboarding process for our Plan Emprendedor for SMEs. We also kept expanding our value proposition through new business initiatives, including Be Startup, our service model for startups and technology-based companies, Our partnership with FinTech Bingo to broaden SME factoring solutions Our alliance with De Chile ADS to enhance our travel loyalty program and Visa Direct which enables fast and fully digital international transfers On efficiency, digitalization continues to drive productivity gains complemented by strategic negotiations with suppliers including IT providers in the optimization of our infrastructure with 4.6% fewer branches than a year ago At the bottom of the slide we present our updated guidance for 2026. Given the weaker economic environment, we now expect nominal loan growth in the range of 5-6% compared with approximately 6% previously. Due to the higher expected inflation, we have raised our net interest margin forecast to 4.8% from 4.6%. Cost of work should reach Thank you for joining us. This guidance already incorporates an income tax charge of $68 billion that we will recognize in October related to the impact of the lower corporate tax on their deferred tax assets, but excludes any potential changes in additional provisions. Please turn to slide 11 to discuss the evolution of our loan portfolios. The total loans reached $40.8 trillion in September, growing 1.2% quarter-on-quarter and 2.9% year-on-year, or 3.5%, excluding the one-time credit card migration effect of $210 billion, which slain last quarter. The main driver this quarter was commercial lending. Commercial loans increased 2.7% compared to June and 4% year-on-year, reaching $21 trillion. Compared with December 2025, they grew 7.8%, an annualized pace of 10.5%. Most of this expansion came from our corporate banking unit, where loans increased 14.1% year-to-date, supported by commercial credits to concessions, natural resources, and retail sectors, as well as 90% year-on-year increase in factoring loans. As a result, our market share in commercial loans reached 15.7% in September, a gain of 30 basis points since December. In personal banking, growth has been more moderate. Consumer loans rose 4.1% year-on-year on a pro forma basis, in line with inflation, while residential mortgage loans increased 2.5%, reflecting our selective approach to growth in this product, where we're prioritizing better lending spreads over volumes. The chart on the bottom left shows growth by segment. SME loans increased 4.5% year-on-year or 9% when excluding the amortization of Fogate loans granted during the pandemic, while wholesale loans grew 4% and loans to individuals grew 1.9% or 2.9% on a pro forma basis. The chart on the upper right shows a balanced composition. with retail banking representing 65.7% of total loans and wholesale banking the remaining 34.3%. In addition, the chart on the bottom right shows that our commercial portfolio is spread across a wide range of economic sectors with no single sector representing more than 20% of the total. This well-diversified mix allows us to capture opportunities across customer segments and economic cycles without depending on a single source of growth. This quarter is a good example as a recovery in corporate lending more than compensated for the slower growth in personal banking. Please turn to slide 12. This growth is supported by solid funding and capital base, one of the most important competitive advantages that we have. As shown on the upper left, loans represented 72.9% of our total assets. On the funding side, demand deposits accounted for 26% of the total liabilities and equity, complemented by time deposits, long-term debt, and our strong capital base. The chart on the upper right shows that our ratio of demand deposits to total loans reached 35.7%, the highest among our main peers, and close to the levels seen before 2020, which is one of the main reasons behind our lower funding costs and superior margins. On a pro forma basis, our demand deposits grew 3.1% year-on-year, driven by retail banking where they rose 7.9%. This reflects the strength of our value proposition for current account holders and the growth of our fund ecosystem, which added 444,000 new account holders over the last 12 months. As a result, as shown on the bottom left, As of September, we continue to lead the industry in local currency demand deposits among private banks with a market share of 19.9%, 120 basis points ahead of the closest competitor. Finally, our capital position remains the strongest among our main peers. As shown on the bottom right, our total capital ratio reached 17.9%, including a CET1 ratio of 14.1%, well above regulatory requirements and the industry average. This gives us ample room to finance the loan growth we expect as economic activity recovers while continuing to create value for our shareholders. In short, the combination of a medium deposit franchise, a diversified funding structure, and a best-in-class capital position remains a key differentiator for Banco de Chile. Please turn to slide 13. This solid balance sheet translates into consistent revenue generation and superior margins. Total operating revenues reached $758 billion in the third quarter, a 3% increase compared to the same period last year. Compared with the second quarter, revenues normalized as quarterly inflation measured by the UF variation declined from 2.5% to 0.6%. For the first nine months, operating revenues amounted to $2.4 trillion, 6.6% above last year. The year-on-year increase in the quarter was mainly explained by higher customer income coming from loans and fees, together with non-recurring income of $10.9 billion, mainly related to the sale of Nexus, our former credit card processor, which more than offset lower treasury revenues. As a result, Our operating margin, shown on the right, reached 6.6% year-to-date, well above our main competitors. More importantly, this leadership is not a one-off. It has been consistent over the years, reflecting a business model that combines stable and resilient customer income with the ability to capture opportunities from changes in market conditions. Please turn to slide 14. Let me now go into the drivers of our net interest margins. Our NIM reached 4.4% in the third quarter, up from 4.3% a year earlier, and 4.7% years to date, well above our peers. As shown on the upper left chart, net income totaled $559 billion in the third quarter, broadly stable year-on-year, reflecting two opposing trends. On the one hand, customer financial income increased 1.4% year-on-year to $477 billion, primarily supported by loan growth. Income from loans rose $14.5 billion, or 5.5%. Consumer loans were again the main contributor, adding $7.3 billion, driven by a 39 basis point increase in lending spreads. Commercial loans added $5 billion, benefiting from a shift in the mix towards higher spread loans. These drivers more than offset the lower contribution from demand deposits given lower short-term interest rates. On the other hand, non-customer financial income decreased 9.7% year-on-year. This was mainly explained by lower treasury revenues as the increase in local long-term interest rates during the quarter, with five-year pestle rates moving from 5.2% to 6.1%, affected the valuation of fixed income securities, together with a high comparison base from the gains on the sale of securities in the third quarter of 2025. The chart on the bottom left shows the evolution of our UF gap in the banking book, which reached 9.1 trillion in September. This position includes both our structural exposure, which protects the real value of our shareholders' equity, and the directional positions taken by our treasury. To put this into perspective, a 100 basis point change in inflation translates into a 91.1 billion pesos in net interest income, While a 100 basis point change in interest rate represents approximately 30 basis points in net interest margin, once all assets and liabilities are fully repriced in about three years. In summary, growing customer income and a leading funding base continue to support margins that consistently outperform our peers. Please turn to slide 15. These are another recurring source of revenues, supported by our growing customer base and the contribution of our subsidiaries. Net fee income reached $174 billion in the third quarter, an 8.4% increase year-on-year, bringing the nine-month total to $514 billion, up 8.6% from last year. This performance is rooted in our expanding customer base. We reached 3 million active customers, 2.7 million fan accounts, and 1.7 million current accounts, while maintaining the highest standards of service quality. The main drivers are listed on the left. Fees from transactional services increased 3.8 billion, or 7.1%, including a 2.4 billion from our acquiring and processing business as Bansila Tagos continues to execute its business plan. Andres Alonso-Montes. Fees from financial advisory services increased $2.3 billion, reflecting our participation in relevant transactions, including M&A advisory and the telecom sector. To a lesser degree, credit-related fees grew $1.3 billion due to higher loan repayments, and securities brokerage added $0.9 billion. The chart on the bottom left shows the diversification of our fee base. Where transactional services represent 32.6% of total fees, followed by mutual funds with 27.4% and insurance brokerage with 15.1%. Finally, the charts on the bottom right show our fee margin over interest earning assets, which reached 1.4% year-to-date, ahead of our main tiers, reflecting the strength of our cross-selling capabilities. Please turn to slide 16. Prudent Credit Management continues to keep expected credit losses under control. As shown on the left, expected credit losses reached $96 billion in the third quarter, equivalent to a cost of risk of 0.96%, 21 basis points below the industry. Excluding the $50 billion in additional provisions established in May, ECLs declined 16.2% compared to the second quarter. Compared to the third quarter of 2025, ECLs increased 21.2% from a cost of risk of 0.8%. This increase was mainly related in retail banking, where delinquency rose from 1.87% to 2.15% over the last 12 months, reflecting higher unemployment and the effect of inflation on household disposable income. To a lesser extent, it also reflected lower-than-normal ECLs in the third quarter of 2025, together with greater exposure to cross-border loans. These effects were partly offset by higher recoveries of written-off loans, which increased 62% year-on-year. Turning to the chart on the upper right, our NPL ratio reached 1.7% in September, below our peers and remains the lowest among our main competitors. Our coverage level remains robust. Loan loss allowances cover 122% of past due loans. A ratio that rises to 221% when additional allowances are included, providing a meaningful buffer to absorb potential deterioration without compromising our earnings capacity. On the chart on the bottom right shows our net operating margin reached 5.6% year-to-date, the highest among our peers, reflecting our strong revenue generation and disciplined credit management. Looking ahead, we expect delinquency to stabilize and gradually improve as the economy recovers, although the labor market may continue to weigh on individual portfolios in the coming months. Please turn to slide 17. Cost discipline and digitalization continue to enhance our operational efficiency. Total operating expenses reached $296 billion in the third quarter, a 7.2% increase year-on-year. This increase was mainly explained by inflation-driven salary adjustments, a non-recurring expense related to the recognition of a part of a special bonus associated with the collective bargaining agreement reached with most of our unions, and a comparison-based effect of Ban Chile Paros. On the chart on the bottom left is a breakdown of operating expenses adjusted for these bonuses and the comparison-based effect of Ban Chile Paros. As you can see, the rise in expenses is more moderate. Looking at the first nine months, total expenses reached $873 billion, which represents a nominal increase of 4.1%, or just 0.1% in real terms. Our year-to-date efficiency ratio improved 87 basis points to 35.9%. These results reflect the benefits of a broad set of initiatives listed on the left. These include the redesign of our service model and branch network with 4.6% fewer branches than a year ago, the automation and digitalization of customer processes, The rationalization of IT infrastructure, cloud and licensing, including 13 technology initiatives deployed this year and improved vendor management and organizational simplification. Productivity indicators reflect this progress. Our loans per employee ratio increased 3% to 3.7 billion, and our fees to expense ratio rose 245 basis points to 59%, showing our ability to support business growth without a proportional increase in costs. Please turn to slide 18. As we have shown throughout this presentation, our core competitive advantages continue to deliver solid profitability. Net income reached $288 billion in the third quarter, and for the first nine months, net income amounted to $947 billion, up 2.2% year-on-year. These fundamentals continue to translate into superior year-to-date returns. Our return on average equity reached 21.9%, and our return on average assets, 2.3%. Both well above industry levels and among the highest in the Chilean banking system. Importantly, these results do not depend on a single business line. They reflect a diversified franchise supported by a leading funding base, growing fee generation, sound asset quality, and a steady focus on productivity. Please turn to slide 19. Before taking your questions, I'd like to highlight four key messages from this presentation. First, on the economy. We expect an investment-led recovery after a transitory slowdown amid inflation that remains elevated. We forecast GDP growth of 0.4% for 2026, mainly affected by mining, and a rebound of 3% in 2027, supported by a strong investment pipeline and the reconstruction law. We expect the monetary policy rate to remain at 4.5% through 2027. Second, on profitability, our core competitive advantages continue to drive returns well above the industry. We delivered net income of $288 billion this quarter, with a year-to-date return on average equity of 21.9%, and we raised our return on average capital guidance to 22% for the full year. On efficiency and productivity, ongoing digital transformation and cost discipline are generating lasting gains. Our year-to-date efficiency ratio reached 35.9% and we have improved our full-year guidance to 36%. Finally, on growth, superior asset quality and capital adequacy provide the basis to accelerate loan expansion. With a cost of risk of this quarter of only 0.96%, the lowest MPL ratio amongst our peers, and a CET1 ratio of 14.1%, we are well positioned to capture recovery in corporate lending that we are already seeing and that we expect to strengthen in 2027. Our strategy is straightforward. Serve our customers well, operate efficiently, manage our balance sheet prudently, and maintain a solid capital position. This quarter's results reflect the consistency of that approach. Thank you, and if you have any questions, we'd be happy to answer them.

Thank you. So we'll now move to the question and answer session. If you'd like to ask a question, please press the start shoe on your phone and wait to be prompted. If you are dialed in by the web, you can also ask a voice question. Our first question comes from Ernesto Gabilondo from Bank of America. Your line is open. Please go ahead.

Thank you. Hi, good morning, Rodrigo, Pablo, and Daniel. Thanks for the opportunity to ask questions. I have a couple from my side. The first one is on long-term expectations for next year. So we have seen this year the economy and unemployment continue to be weak, but as you mentioned, there are hopes and expectations that next year the economy could be growing again 3%, especially supported by the execution of the reforms. So, how do you see Long Road for next year? Do you think it could be returning to the high single digit or low double digit? If you can walk us through the year, it would be very helpful. And then my second question is on NIMS. So there are expectations of low inflation, but at the same time you have going to accelerate long road. So how do you see the evolution for NIMS next year? I was a little surprised that you're expecting stable interest rates despite the war continues. and that maybe could translate into higher oil and gas prices. So just wanted to see your thoughts on this. Thank you.

Hi, Ernesto. Thank you very much for your question. This is Rodrigo Aravena and I'm going to take the first part of the question and then Pablo Mejia is going to go to the second part. So let me just put on the table a couple of ideas The Australian economy, first of all, we are aware of the lower than expected GDP growth this year. However, it's very important to keep in mind that most of the slowdown in Chile has been explained by and many others, including, for example, the important adjustments in the mining sector. But at the same time, when we analyze the pipeline of investments in Chile, most of the new projects are mining projects, which will be positive for the perspective for the mining activity in the In the next year, especially considering that the only way to offset the degradation in the mineral rate is by increasing the investment in the sector. Also, it's very important to be aware about the important fiscal adjustment that we've seen during this year. The fiscal spending growth this year between January and September was 1.2% in real terms, which is well below The levels that we saw in previous years. And also the important increase in inflation during this year, which has Thank you very much. Also, we are expecting a strengthening of the soyan peso because of the expectations for the soyan economy. So that's why we are expecting an inflation rate falling to a number of around 3%. We can rule out our bias in the economy. In our forecast for inflation for the next year, but when we consider the normalization, the oil prices, you know, the strengthening in the trend, this is consistent with a low inflation rate. For the next year. So in this environment, we are not expecting changes in the interest rate. We are aware of the higher than expected inflation this year. However, we have to remember that the central bank has a target, which is based in two years So that's why if this increase in inflation is only temporary, led by supply factors rather than demand factors, we think that there is room to continue waiting for the evolution of the economy for the central bank. My last thoughts on this. And your question is that we have a positive view for the Chilean economy for the next year, mainly in terms of the key drivers, because we are expecting that the main driver of the growth in 2027 will be investments. So that's why also we have a more positive view about the recovery in long growth. So this is our main basis for the patient analysis.

Thank you, Rodrigo. In terms of long growth expectations, I think it's important to take into consideration that we're currently in the process of budgeting, so it's something that we're evaluating at this time. But in the preliminary, what we're seeing is a more active year, like Rodrigo said, in investments and activity in Chile, and this should begin to drive loan growth too. Up to date, what we've seen is very weak demand in all customer segments, driven by the high inflation also in the consumer segment. In the corporate segment, all these years of uncertainty has led to less demand in commercial lending. So for next year, what we're expecting for Banco De Chile is that we should be growing, what we can say is we should be growing above the level of the industry, gaining market share, especially because of our capital position. This allows us to have a strategic position in order to be able to grow in the future cycles, in the current future cycles. In terms of net interest margin, as Rodrigo mentioned as well, we're ending the year at a very high level of inflation, higher than expected, 4.7% versus what we're expecting for next year, 3%. So this has an impact, but it's a limited impact because we're in a year that will have greater volumes, so more activity, a better mix in terms of our total asset mix. Andres Alonso-González, Rodrigo Alonso-González

Thank you very much, Rodrigo. And Pablo, just a follow-up in terms of your longer expectations. Again, it's not that you're giving a guidance, but this year longer was around 5%. As you mentioned, you're expecting here to be growing above the industry. You're seeing better economic activity, support by reforms. So should we think it could be more maybe going from a mid to a high single digit next year? Would that be reasonable?

We're currently in the budgeting process that we're evaluating. What we think is reasonable is more activity in terms of 2027 loan growth and picking up speed in the following years as well. So it should be a gradual improvement.

So probably in the long term, it's reasonable to expect, you know, a higher acceleration in terms of the loan growth. But we need to see some improvements in the labor market, in activity, the reform that was happening in the Congress can take a positive impact. In the economy in the future, so probably in the next years, we're going to see a long growth in high single B, but we're aware about that, like I said, this year, but we are more optimistic for the next year because of the recovery investment. But the... The trend is clear. We have good reason to expect a positive trend in terms of the loan growth, but we are expecting a better number for the next year for the industry and for us as well. But in the long term, probably, we're going to see a more stable growth of high single digits in nominal terms.

Perfect. Now, we're very careful. So, a rather improvement trend throughout the year, subject to the labor market and the execution of the reforms. Thank you.

Thank you very much. Our next question comes from Juliana O'Hara from Goldman Sachs. Your line is open. Please go ahead.

Hi, Rodrigo, Pablo, Daniel, thank you for taking my question. I have two. The first one, if you could share more color on the transition as CEO with Eduardo stepping down and Mr. Edna stepping up next year, I wanted to get A bit more on the strategic thinking and the timing. So that's the first one. And the second one is you have an efficiency ratio target, a midterm efficiency ratio target of 40%, which are already running below that level. So should we... Is it fair to assume that you have a more aggressive long-term target since you're already below that level? Or should we expect maybe an increase in the next few years since you have to invest more from the growth? Thank you.

Can you repeat the second question again? Sorry, hello.

The second question?

Yes.

I was just wondering if we should see an increase in the efficiency ratio in the next few years, given that your midterm target is at 40% or below, but you're already running below that level. Yeah, that's the question.

Yeah, so taking the second question, in terms of the efficiency ratio, what we've seen over the last... Over the last decade and the last period is an improvement, a significant improvement of Banco de Chile in terms of efficiency and productivity across the bank. So we've been implementing a lot of AI initiatives, digital initiatives, digitalizing front and back office operations, reducing the branch network. And all of this has led to a significant improvement in efficiency and also one of the main reasons why our bottom line and many incremental gains is generating this attractive ROE. So going forward, it's reasonable to expect that the levels of efficiency that Banco de Chile can maintain are in line with the previous years below 40%. So it's reasonable to take that into consideration when analyzing Banco de Chile in terms of efficiency ratios. For next year or the following years it's reasonable also to expect a cost-based growing slightly above the marginally above expenses and mainly due to this new cycle which should be much more positive in terms of growth and business activity which should generate stronger operating income. Yeah, we will take the second question.

Yes. Thank you, Bobby. So, I'll tell you the first question. Or the first question. Yeah, the first question. So, there will be a transitional period that will be announced in a material fact in the last Last week, so as you mentioned, Hernan Ariano, who is in charge of the corporate division. Today, he's going to take office on April 2nd. It's very important to highlight here that we have a structure in the bank uh we have a very strong corporate governance uh with a very important moment of the support in different uh meetings coming there and actually in the another board uh we have a very uh important chapter that's right or that is where the So basically what I'm trying to say is that the strategy of banks, the management, the performance is not based only in one single person. So we have a very important structure in the governance in the bank. So that's why we don't have Thank you very much. And also, we have to keep in mind that the bank has important long-term strengths based on the customer base, the demand deposit base, the liability, etc. So, we can mention here that the bank has all the basis to continue delivering important performance and profitability in the long term.

Got it. Thank you.

Thanks. Thanks.

Thank you very much. Our next question comes from Daniel Vaz from Banco Safra. Your line is open. Please go ahead.

Hi, Rodrigo. Hi, Pablo. Hi, Daniel. Congrats on the results. And I have a couple of questions here as well. First, on the mortgage lending, you mentioned a lot of discipline this year, and now you're getting next year expectations of inflation. Do you have, like, any return threshold that would encourage you to accelerate mortgage lending, leading to the deposit of the deposit customer relationship, or is it in any form of hacking it? So that's the first question. Second one, remind us, your CT1 at the draft, right? So your CT1 is at 14% So at what capital range do you want to operate within? So in that context, what would need to happen for you to increase the shareholder distribution? Thank you, guys.

Hi, thanks. In terms of mortgage lending, I think the most important things that have been occurring in mortgage lending and the mortgage lending product is the different reforms that are being discussed and approved, which is activating this product. Also, the unemployment rate, as Rodrigo has explained, and what's happened in terms of the financial position of customers is very important to take into consideration for the demand and growth of this product. We don't have those specific targets that you mentioned, but what we are seeing is that it's a product which should have greater demand in the coming years. It should be an industry which is reactivating thanks to these different reforms, an industry which has been impacted negatively from the high interest rates, high inflation, and the high unemployment rate which has made it more challenging for customers to pay mortgage loans in Chile. Going on in the future, we should see an improvement in the economy with lower unemployment, a stronger wage bill. Thank you for joining us today. Aspiration to be number one in this product. It's a product that we have as we're a universal bank. And now Daniel Galate will answer the question regarding the capital.

Hi, this is Daniel. Well, as you mentioned, today we have a CD1 rate of about 15%. Of course, as we've mentioned in the past, we expect to use our current capital buffers to sustain long growth in the coming years, particularly in a more positive economic environment as described by Rodrigo throughout the presentation. Saying that, overall, we expect that in the normal cost of business to maintain a fabulous gap of about 2% over regulatory capital limits. Well, of course, even stuck to the 60% dividend payout ratio in the long run, which should allow us to grow in terms of balance sheet of about 7% to 8% per year in nominal terms. So this is basically the threshold in which we want to flow in the long run in terms of capital metrics.

Maybe one thing to add is that the dividend payout ratio is dependent on the expectations of each year. So, similar to years in the past, when growth has been weaker than expected, below those levels that Danielle mentioned, we can have a stronger payout ratio. We're not limited to what we provision in the balance sheet.

That's pretty clear, guys. Thank you.

Thank you very much. Our next question comes from Andres Soto from Santander. Your line is open. Please go ahead. Andres, your line is open. Please go ahead. Okay, Andres, maybe you can raise your hand again for the question. And just a reminder, if you'd like to ask a question, please press the start button on your phone and wait to be prompted. If you are dieting by the web, you can also ask a voice question. So just wait a moment or two for any additional questions to come in. I'm not seeing any more questions, so perhaps I can hand it back to the Banco de Chile team for the closing remarks.

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

This concludes the call for today. We are now closing all the lines. Thank you, and have a nice day.