Good afternoon, everyone, and welcome to Banco de Chile's first quarter 2024 results conference call. If you need a copy of the management financial review, it is available on the company's website. With us today, we have Mr. Rodrigo Aravena, Chief Economist and Institutional Relations Officer, Pablo Mejía, Head of Investor 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 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'll now turn the call over to Mr. Rodrigo Aravena. Please go ahead, sir. Good afternoon, everyone. Thank you for attending this webcast today, where we will present the financial results and achievements of Banco de Chile during the first quarter of this year. We are proud of our overall performance during the quarter. Once again, we led the industry in net income and profitability, capitalization, and risk, among other figures, demonstrating our capacity to generate consistent and solid results over time. Following the structure of the previous quarterly call, we will begin our presentation with a brief analysis of the macroeconomic conditions and competitive landscape we faced. Then, we will present the most relevant achievements in our strategic initiatives and finalize with a deeper analysis of financial results. Please go to slide number three to begin the macro environment discussion. The Chilean economy is growing again. The activity posted a significant cyclical recovery at the beginning of this year, after the harsh macroeconomic adjustment, mainly in 2023, when the economy grew only 0.2%, one of the lowest figures in the region. Nevertheless, it's important to be aware of two main aspects related to the recession seen last year. First, the subdued growth resulted from the tightening monetary and fiscal policy, especially between 2022 and 2023. This adjustment was necessary to correct the macroeconomic imbalances that occurred during the pandemic, such as increases in inflation, domestic demand, and external saving, among others. Second, the CPI in 2023 returned to the policy range. The current account deficit declined to pre-pandemic levels, and fiscal debt remained below 40% of the GDP. The normalization of these figures provides further reasons to expect a more sustainable recovery for the country. Undoubtedly, the macro scenario looks better today. According to the monthly GDP figures, the economy went up by 2.5% year-on-year in the first quarter, posting the highest expansion since the same period of 2022. This figure followed the 0.6% and 0.4% year-on-year growth in the third quarter and fourth quarter 2023, respectively. As a consequence of this recovery, the GDP surpassed the level of activity posted in 2021, which was the previous peak, as the chart on the left clearly shows. The breakdown shows that activity was driven by a positive dynamism in mining. It went up by 6.9% year-on-year, and services, which expanded by 2% year-on-year. The trend of these sectors can be seen in the chart on the top right. On a sequential basis, the recovery has also been evident. In the first quarter, the seasonally adjusted GDP posted a 2% quarter-on-quarter rise or 8.2% on an annualized terms. This was due to a substantial monthly rise of 2% in January, a number that was followed by a solid 0.8% increase in February. This better-than-expected expansion has been one of the, if not the most, important reasons behind the upward revisions in GDP forecast for this year. In this environment, the central bank raised its official GDP estimate from the range centered at 1.75% in the monetary policy report released in December to 3.5% in the report released in March. Before finalize this slide, I'd like to highlight the improvement in external accounts. As you can see in the chart on the bottom right, the current account deficit fell from 8.7% of the GDP in 2022 to 3.6% at the end of last year, which is sustainable and consistent with the fundamentals of the Chilean economy. As we will see in the next slide, the normalization in overall activity has impacted prices and interest rates. Please go to slide number four. As we've discussed, the substantial decline in domestic spending has been a critical driver for the downward trend in local inflation, as the chart on the upper right shows. In 2023, the headline inflation dropped to 3.9% after posting a yearly rise of 12.7% one year ago, returning to the tolerance range set by the Central Bank for the first time in almost two years. However, there have been higher-than-expected monthly figures at the beginning of this year, as the CPI accumulated a 1.6% rise in the first quarter of this year. In the fourth quarter 2023, the CPI rose only by 0.6%. Some of the main drivers explained in this trend include the weakening of the Chilean peso, the persistence of a high inflation rate in trade partners, and the acceleration of the economy, as discussed in the previous slide. Nevertheless, it's essential to be aware of the high volatility of local inflation, which has been exacerbated by implementing a new methodology, which includes the introduction of a new reference basket. In this environment, the labor market has remained stable. In the first quarter, the unemployment rate was 8.7%, in line with the 8.8% posted one year ago. It's worth mentioning that the still high unemployment, compared to the pre-pandemic figures, has been explained by a greater dynamism in the labor force, which expanded by 3.2% year-on-year in the first quarter, in line with expansion observed in total employment, which went up by 3.4% year-on-year in the same period. As a result of this, the participation rate rose to 62.4%, in line with the levels observed before the beginning of the COVID-19 crisis. In this scenario, the central bank continues reducing the interest rate, following the easing cycle that began in July last year, when the rate was 11.25%. Specifically, the board reduced the interest rate by 100 basis points in January and 75 basis points in April to 6.5%, and has maintained an expansionary bias, anticipating further cuts during the rest of the year. This policy has been one of the main drivers of the multilateral weakening of the Chilean peso, as the chart on the bottom right shows. I'd like to share our baseline scenario for this year with you. Please go to next slide, number five. We have implemented several changes in our baseline scenario. Specifically, we raised our GDP forecast for this year from 1.5% in the previous earnings call, held in February, to 2.4% now. As seen in the table of this slide, we foresee a recovery in domestic demand, mainly in consumption, due to lower inflation and interest rate. Nevertheless, we still expect subdued growth in total investment due to the high interest rate and the persistence of uncertainties related to potential factors. Regarding prices, we increased our CPI forecast for this year from 3%-3.7%, mainly due to the depreciation of the Chilean Peso and the higher-than-expected growth in the first quarter of this year. Based on this trend, and considering the probable trend in external rates, mainly in the United States, it's likely that the Peso will continue to be weak, and consequently, the CPI will reach the policy target only by 2025. On monetary policy, we now expect an overnight rate at 5% by the end of this year, from the 4.5% we forecasted last quarter. We acknowledge the existence of risks that could affect the macro scenario. From the external front, the growth in main trade partners of Chile and the evolution of several geopolitical conflicts are worth paying attention to. Internally, apart from the evolution related to the discussion of some reforms, such as taxes and pensions, it will be important to analyze the results of municipal elections, since they have historically been a solid leading indicator of the presidential and congress elections. The table on the right summarizes the key dates and political events to monitor. As we mentioned in previous conference calls, banks are a perfect reflection of the economy. Having said that, I'd like to move to the next slide, number five, to analyze how the economy impacted results in the financial industry in the first quarter of 2024. Total loan volume remains subdued, as they are still posting below trend figures. Loans expanded by 4.1% year-on-year in nominal terms, which is only slightly above inflation due to opposite forces. On the weak side, consumer loans posted a 2.5% year-on-year expansion in nominal terms, remaining in negative territory in real terms. A similar situation is observed in commercial loans, as they expanded only 3.2% year-on-year nominal, consistent with the fall observed in total investment during the last quarters. Conversely, mortgage loans continue supporting the expansion, increasing by 6.9% year-on-year nominal. Despite these figures, it's essential to be aware the negative trend in the nominal loan growth, as seen in the chart on the bottom right, has been influenced by the normalization in the annual inflation, which declined from 11.1% in the first quarter of 2023 to 3.7% in the first quarter of this year. Overall, the still low dynamism loans is consistent with the results from the first quarter loan survey conducted by the Central Bank, which showed a weaker demand across most sectors, mainly in personal banking, without changes in supply from banks. Considering this scenario, we expect loans to increase by nearly 6% by the end of this year, as long as the economy continues showing a gradual recovery during the next quarters. In this context, the industry reported a net income for the first quarter of CLP 1,172 billion, equal to an ROE of 14.5%. When compared to the prior year, quarterly net income grew by 12%. This was attributed to a 15% increase in operating income and a decrease of 8% in expected credit losses. This was partially offset by an 18% rise in operating expenses. In terms of delinquencies, the weak economic environment has affected NPLs, and this continued to rise. The industry reached 2.4% this quarter, up from 1.9% in the same period last year, and 2.2% from fourth quarter 2023. We expect that credit risk will remain as the main concern for the banking industry in the short term, until we see further improvement in the economy and the job market. Now, I'd like to pass the call to Pablo, who will go into more detail about Banco de Chile advances and the financial performance. Thank you, Rodrigo. I would like to begin with our strategic advances. Please go to slide number eight. The strong results that we are consistently posting are fruit of a sound strategic pillars based on customer centricity, productivity, and sustainability, which we deploy through six core priorities, as listed in the middle of this slide. Through these priorities, we are sure that we can meet our midterm goals, as shown on the right of this slide. First, we have a Net Promoter Score of 76.4% at March 2024, which is 340 basis points above our goal, and our corporate reputation is among the top three in Chile. These metrics are assessed by reputable external firms that are independent from us. In terms of market share, we aim to be the leader in both commercial and consumer loans, as well as demand deposits denominated in local currency. In cost to income, we have performed much better than our target. Although this has been partly fostered by our solid top line, we should be able to keep on improving our efficiency through the productivity initiatives that we will explain later in the presentation. Lastly, we are confident that we'll keep leading the industry in terms of return on average capital and reserves in the long term. In the next slide, we will review some of our main accomplishments in our key strategic areas: digital banking, efficiency, and ESG. Let me start with Digital Banking. Please move to the next slide. In our commitment to being the best bank for our customers, we continue to make significant strides in digital innovation. This quarter, we launched the new digital savings account, FAN Ahorro, that allows customers to make profits from their cash balances, widening the investment alternatives for current and new customers. Furthermore, we have implemented digital tools to improve customer experience at branches, ensuring faster and more efficient service, and we have renewed our mobile app, Mi Pass, for easier and more secure financial transactions. In addition, we have made significant progress in digitalizing key sales processes in retail banking that enhance the sales experience and will, at the same time, foster higher efficiency and productivity levels. The percentage of digital process variance and their adoption has importantly increased in the recent year. Today, more than 80% of digital consumer credit applications and more than 30% in digital current account applications are processed through digital channels, reducing wait time, process application costs, and as a result, has increased originations. In terms of efficiency and productivity, we continued to implement several initiatives to optimize our operations. This quarter, thanks to the increased digital adoption, we worked on simplifying functions and roles at our branches and other distribution channels. We also have initiated the implementation of a new system that will automate and centralize procure-to-pay activities. Moreover, we introduced a new process to streamline infrastructure investment flow, ensuring a more efficient use of resources. Also, through the structural optimization, we have improved our synergies with some of our subsidiaries. On the ESG front, our commitment to sustainability and social responsibility remains unwavering. This quarter, we published our 2023 annual report, which covers our financial and sustainability performance and makes significant advances to accomplish local and international standards such as SASB and GRI. Furthermore, to better integrate ESG risks and opportunities into our business, we initiated the measurement of our loan portfolio carbon footprint, the results of which are expected to be released early next year. Additionally, as part of our commitment to Chile, we have held several corporate volunteering activities, such as the Solidarity Campaign in response to the wildfires, waste collection days, financial education courses, scholarships to develop tech talent, and contests to promote entrepreneurship. Please turn to slide 11 to begin our discussion on our results. Net income once again soared this quarter, posting CLP 298 billion, equal to a return on average equity of 22.6%, as shown on the chart on the left. When compared to our peers, we outranked all of them with a huge gap in both net income and return on average equity, as illustrated in the chart to the right. Our strong financial results reflect our effective customer-focused strategy over the long term and our commitment to building a sustainable bank, as evidenced by steady growth in customer income. Our long-term ROE target is about 18%, but we foresee that ROE will stay higher than this level in the near term, around 19% in 2024. Please turn to slide 12. Operating revenues grew 11% year-on-year, which is in line with the economic and business recovery that we have been witnessing. More importantly, this expansion was driven by customer income, which rose 14% year-on-year, while non-customer income remained relatively flat by expanding 3% year-on-year. Customer income growth was driven by a strong increase in loan margins, higher commercial margins from deposits, given our solid position in core demand deposits and active pricing management in time deposits. Concerning income from loans, consumer loans were the main driver of this rise, thanks to an expansion in spreads and a 5% increment in average loan volumes. Mortgage loans also improved customer income, primarily thanks to an annual increase of over 7% in average loans. On the other hand, commercial loans were a drag on income expansion as average balances decreased year-on-year due to external factors, mainly related to the still high interest rates and economic environment. The charts on the right show how we have performed relative to our competitors. We achieved 4.7% net interest margin this quarter, much higher than any of our peers. We also had a comparable advantage in net fee margins and in our total operating income, as shown on the chart on this slide. Our outstanding performance reflects a consistent business strategy and how we have been able to provide our premium customer base with improved value offerings over time in lending and non-lending products, which has resulted in a solid track record in customer income, regardless of the economic backdrop. Concerning non-customer income, which was a revenue-generating driver last year, the tempered year-on-year growth had primarily to do with the decrease in inflation in the first quarter of 2024 when compared to a year earlier. This effect was offset to some extent by the positive impact of lower short-term interest rates on both our funding through time deposits and revenues from trading activities. Please turn to slide number 13. As the chart on the left shows, total loans increased by 2.8% year-on-year and 1.3% quarter-on-quarter. The main driver of this year-on-year growth was retail loans. Mortgage loans went up by 7.8% in the 12-month period, mainly due to inflation, but also some sustained demand. Consumer loan expanded slowly by rising 4.5% in the same period. We should mention that we are noticing a slight improvement from previous quarters in commercial loan activity, and we anticipate this to persist as the economy improves and interest rates come down. It's important to highlight that one of the strengths of Banco de Chile is its highly diversified loan book, as shown in the breakdown in the chart on the top right by product and in the chart on the bottom right, which details our commercial loan portfolio by economic sector. Generally, what we have seen in the past is that when one part of the economy is weaker, we can partially offset this negative impact by growing another part of our portfolio. Today, 64% of loans are concentrated in the retail segment, including SMEs, and the remaining 36% in the wholesale segment. This distribution has not changed much in recent quarters, but during the pandemic, our growth was focused on low risk and low margin loans and securities, leading to a significant change in asset mix affecting our NIMs. However, we expect that our growth in the next periods will continue advancing, as we have seen in the first quarter of 2024, from which we should return to the composition seen before the pandemic. That should enable us to achieve similar levels of NIMs as well. From the perspective of concentration, it's important to mention that our commercial loan portfolio is spread out in a broad range of economic sectors, as shown in the chart on the bottom right. As such, we do not have a high reliance or concentration risk in any industry, which allows us to reduce the possible impacts from economic downturns in certain sectors such as real estate, construction, or the current situation affecting the private health industry, among others. For 2024, we expect total loans to grow slightly above the industry average. As mentioned earlier, the main year-on-year change we foresee is a pickup in commercial loans to grow slightly above inflation, and we expect that consumer loans and mortgage loans will be driving total loan growth. Please turn to slide number 14 to discuss our superior balance sheet structure. As shown on the chart on the top left, our asset and liability structure is robust. Our business strategy is concentrated on commercial banking, and our main revenue stream comes from loans, which accounted for 67% of our total assets as of March 2024. However, it's important to note that starting from April, the density of loans will increase as we will use part of our debt securities portfolio to repay two-thirds of the FCIC obligation. Specifically, our portfolio and financial instruments has changed since December 2023, as we have reinvested proceeds from the scheduled maturity of PDBC and CDs issued by local banks and longer-term bonds issued by both the Central Bank of Chile and the Chilean government in the liquidity deposit program, or PDL, provided by the Central Bank to facilitate the repayment of the FCIC. The PDL are booked as financial instruments, measured at amortized cost, and earn the monetary policy rate while held in the portfolio. By using these funds, we paid the first tranche of the FCIC on 01/04/ 2024. The rest of FCIC is coming due on 01/07/ 2024. This will lead to a reduction of our balance sheet and financial instruments. On the liability side, deposits are the main source of funding, representing approximately 51% of our assets. Within deposits, time deposits are the most relevant financing source on our balance sheet, as you can see on the chart to the right. During the pandemic, demand deposits took a more important role in funding, but this has returned to normal, in line with long-term levels. This is especially important because we are recording lower costs of funds due to the sharp drop in the monetary policy rate. Bonds is the next most important liability, representing 17%. We use these to mainly finance our mortgage loan portfolio, which reduces both liquidity risk and repricing, and they are more similar from the perspective of term and currency gapping. We expect that bond issuances will rise when mortgage loan growth resumes to long-term growth rates. Currently, new bond offerings are mostly used to repay scheduled amortizations. As you can see on the table on the bottom left, we keep a high level of liquidity that largely exceeds the limits set by the regulator. Our liquidity coverage ratio reached 237% as of March 2024, 137 basis points higher than the regulatory limit, and the net stable funding ratio attained a level of 125%, 45 basis points higher than the limit during the same period. This is the consequence of both a proactive management of asset and liability term mismatches and also a sound liquidity buffer that remained above CLP 6.5 trillion in the first quarter of 2024. More importantly, these figures already reflect the repayment of the FCIC tranche, the first tranche. So as we have mentioned before, our liquidity position will not be significantly affected by the maturity of this funding source. Finally, our UF gap for the period was CLP 8 trillion, meaning our sensitivity to inflation is about CLP 80 billion for a 1% change in inflation. Please turn to slide 15. Banco de Chile is the best capitalized bank amongst peers in the industry. As of March 2024, our Basel III ratio was 16.9%, well above the fully loaded limit of 12.75% that applies to us, as shown in the table on the right. Regarding CET1, we reached 13.3% this quarter, 40 basis points lower than December 2023. This decrease is mainly explained by a dividend distribution that was higher than the dividend provision in equity, as our shareholders agreed to distribute 80% of net distributable earnings for the full year 2023 instead of the 60% already provisioned. Nonetheless, our CET1 trend over the last few years has significantly outperformed both our main competitors, as shown in the chart on the bottom left and well above the limit established by the regulator. With these levels of capital, we are easily complying with both phase-in and fully loaded Basel III requirements, while feeling confident to address the pending steps in the implementation of Basel III. Please turn to slide 16. In the first quarter of this year, expected credit losses reached CLP 113 billion, 7% higher than the same period last year, and 12% lower when compared to the fourth quarter of 2023. Cost of risk for the period was the same level as our long-term rate of 1.2%, mostly generated, as you can see on the chart on the bottom left, by the wholesale banking segment. As we mentioned in prior calls, delinquencies have been gradually increasing since 2021 from a low level of 0.9% to 1.5% in this quarter, but significantly below the levels of our main peers, as shown on the chart on the top right. This increment is mainly due to the normalization of the abnormally low levels recorded during the pandemic. Also, most of our rise has been due to some specific wholesale customers that have defaulted, although exposures to them are collateralized. This has translated into a rise in NPLs, but only a slight rise in cost of risk, as you can see on the chart in the middle right. However, we expect the NPLs will gradually decrease with the expected improvement in the economy and job market this year. It's also important to note that consumer loan NPLs are at similar levels we recorded prior to the pandemic. Finally, the chart on the bottom right indicates that we have the best loan portfolio and the highest coverage ratio at two point six times, including additional provisions of CLP 700 billion compared to our peers. This puts us in a favorable position for handling unexpected risk deterioration. In line with this, I should also mention that the CMF standard model for provisioning consumer loans must be implemented by January 2025. As a reminder, this model establishes a new methodology to calculate the probability of default and loss given default. Likewise, we've decided to use part of our additional provisions to address the impact, which is expected to be in the range of CLP 60-65 billion. Please turn to slide 17. This quarter, expenses amounted to CLP 284 billion, which is 8% more than the same period last year and 11% less than for the fourth quarter of 2023. The main reason for the yearly increase is inflation that reached 4.3% year-on-year, which affects most expense items such as salaries, rent, external services, among others. It is also worth noting that the significant improvements in efficiency that we have made recently have enabled us to cover the most important increases in operating expenses aimed at implementing the progress in digitalization, IT infrastructure, and cybersecurity that are required to deal with the deep transformation process that the banking business is facing. On the chart on the top right is a more detailed breakdown of the expense growth. Personnel costs increased 5.5% year-on-year because of a rise in salaries, mainly due to inflation adjustments on wages. Employees have their salaries indexed to inflation at least twice a year and, to a lesser degree, a rise in wages and benefits as a result of the collective bargaining process carried out during the fourth quarter of 2023 with the bank's unions. In addition, administrative expenses rose by 10% during the same period, driven by an increase in IT expenses related to software licenses, updates, and technological infrastructure services, as well as higher expenses in maintenance of fixed assets, primarily related to improvements focused on facing the challenges of self-service and digitalization in branches. Depreciation, amortization, and other expenses also rose during the period, primarily as a result of higher operational risk write-offs related to external fraud and payment channels. Regarding the efficiency ratio, calculated as total operating expenses to total operating income, achieved 36.4% in the first quarter of 2024. When compared to our competitors, we continued to lead with a wide gap in efficiency, as shown in the chart on the bottom right. We believe by controlling our costs, improving our productivity, and employing technology, that we will maintain our strong efficiency levels in 2024 of a level close to 40%, and in the long term, under 42%. Please turn to slide 18. Before we go into the Q&A session, I want to briefly recap the main points. We raised our GDP and CPI forecast for 2024 to 2.4% and 3.7% respectively, based on actual information for the start of the year. We also think that the central bank will slow down the pace of rate cuts to 5% by the end of the year. Our outstanding long-term strategy, together with a strong management of market and credit risk, is the basis of our success. This has enabled us to be the leaders in the industry consistently in profitability, operational income, asset quality, productivity, and capital adequacy. We are confident that we'll continue to provide the best performance amongst our peers in Chile with a long-term ROE of 18%. Thanks for listening. If you have any questions, we'd be happy to answer them. Thank you very much for the presentation. We'll now be moving to the Q&A part of the call. If you have any questions, please press star two. That's star two if you have any questions. You may also ask a voice question if you are dialed in via the web. Thank you very much. Our first question comes from Mr. Ernesto Gabilondo from Bank of America. Please go ahead, sir. Your line is open. Thank you. Hi, good morning, Rodrigo and Pablo. Congrats on your results, and thanks for the opportunity. My first question will be on your reserve coverage ratio. So you'll be expanding the loan book above the industry levels, will be growing again in consumer loans, and then you will have to recognize this new credit reserve requirements methodology next year. Just wondering, where should we think about the reserve coverage ratio in the medium term? And then my second question is on market related revenue. So this line has been very volatile. So what should we expect for this line? If we consider this FCIC payment, would that be impacting this line, or what should be the next impact in Chilean pesos of these FCIC payments overall? And then my last question is on FAN. We have seen it has been growing nicely in terms of digital deposits, but how much are you doing in terms of digital loans with FAN? Thank you. Hi, thanks for the questions. In terms of the coverage ratio, today we have a higher coverage ratio than we've had in the past because of the additional provisions that we've maintained on the balance sheet. In the long term, we should consider that the levels of coverage ratio, considering everything that's going on and considering an improvement in the economy, and et cetera, should tend to return to the levels that we had prior to the pandemic, which is around two times, maybe slightly lower, but around the long-term levels that we had prior to the pandemic. We don't think that we should have what we had during the peaks of the pandemic, three times, three and a half times. That's very high. We should return to those levels. In terms of the market revenues, I'll pass the call to Daniel Galarce. Yeah, hi. In terms of the market revenues, you have to consider that there are some line items in the PNL that you should consider jointly. For instance, the effects of exchange rate, as you can see in our PNL, are also very related with the effects that you are seeing in trading derivatives, for instance, since trading derivatives have an effective exposure as well. So when you look at the core business in terms of the effects, you shouldn't see a very important volatility. Actually, we are seeing some more midterm figures in terms of effects spot, for instance, and also the management of our intraday and overnight position as well. So there is no an issue in related the market revenues. And in terms of the FCIC, the guidance that we provided in our press release is already considering the effect of the repayment of the FCIC. And actually, the FCIC, of course, will translate into lower revenues. However, considering the FCIC is stand-alone, but you have to consider that we are also benefiting from the decrease and the expected decrease in short-term interest rates on the funding of our position and our asset positions. In addition, the net interest margin in loans, basically lending spreads, should also increase a little bit, considering that some of the former loans are maturing as well, with lower spreads. So, all in all, we are gonna have an effect in our PNL from the FCIC, but it's basically offsetting some other effects that will benefit our NIM as well. And in terms of our strategy and overall strategy for growth in Banco de Chile, we're a universal bank that's in all segments of the economy. One of those areas obviously is consumer loans, and we've been growing quite strongly over the past few years. We've been gaining market share in this area. Today, we have a market share of almost 19%, and we expect to continue growing in this segment because it's a very attractive segment for us. It's a segment that we want to be in, a segment in the middle and upper income individuals, and we're using the FAN account to continue expanding our customer base. So by using these, the strategy, this focus in this area, we have maybe I can say four pillars to obtain the success of continuing to grow. So the adoption of digital solutions in order to improve customer service and for customers to receive their products quicker. Also more intelligence in commercial campaigns and accurate business analytics in order to provide the customers with the products and services that they want, or the talents that they need, and understand their needs. We're also very active in pre-approved loans, and we've been implementing controls and procedures in order to improve the commercial discipline across the entire bank. So that's really been helping in order to drive sales within the bank, originations of consumer loans, and is one of the reasons why you can see that we continue to grow in consumer loans, but we've maintained a very good NPL ratio during this time. We haven't grown the NPLs of this product significantly over the past year. It's pretty much the same. And I think it's worthy to mention that we have a fantastic loyalty program in the credit cards, so customers using our credit cards receive fantastic benefits, and this has been driving the usage of our cards, especially in this time of higher digital use of more digital channels rather than cash. Oh, thank you very much, Pablo. Super helpful. Just a follow-up in FAN. So, as you mentioned, you are using a lot of these digital savings accounts from FAN to leverage that on the consumer portfolio. But just wanted to understand if those loans are digital or are the traditional ones. So just wanted to understand how much is going on digital loans? Most of the... You have to take into consideration, after the pandemic, most customers are very active in using digital channels. So even before the pandemic, more than half, if I'm not mistaken, were originated online, and that continues... That's by far the case today. Most of consumer loans are originated online and through these new digital channels, it provides us with a new customer base to increase the level of customers. So if we look at, for example, the digital consumer credit loans, we have 84% is being done online. If we look one year ago, we had 66%. If we look at time deposits, for example, which is a product that customers are using more actively today because they understand the benefits that they receive and because of the higher interest rates, it was 75% were being done online one year ago, and today it's 81%. So this is not only better for customers, but it's also better for efficiency and productivity. And it's one of the areas that we've been focusing in our productivity in the bank to continue improving cost savings. Oh, excellent. Thank you very much. You're welcome. Thank you very much. Our next question comes from Mr. Tito Labarta from Goldman Sachs. Please go ahead, sir. Your line is open. Hi, good afternoon. Thank you for the call and taking my question. Two questions. And I saw you increased a little bit the ROE guidance for the year, but, you know, with inflation running a little bit higher, you know, the economy is doing relatively well, do you think there could be some upside to that? I mean, your ROE this quarter was still, you know, well above 20%. You know, do you think that ROE could maybe remain above the 20%, maybe a bit longer than expected, given that inflation is still a little bit higher in general? And then the second question, in terms of your capital ratio, as you show, you're better capitalized than your peers, you have high ROE, loan growth still in the mid-single digits. Is there room to increase the payouts even more, or, or what's the right capital ratio or, you know, why do you feel you need to have more capital than your peers? Thank you. So I think in our on our baseline scenario for ROE is Daniel Galarce touched base a little bit in terms of the the main drivers there is what's occurring in terms of our interest earning assets and how this is evolving. So what we're seeing is a reduction in the second half or actually beginning now in April in our balance sheet because of a reduction in our liquidity on our balance sheet through the payment of FCIC. So since this is reducing, we're generating less net interest income, so the ROE should trend down in the second half of the year because of this reduction. And inflation, actually, it's a little bit up, but it's also a negative impact if we compare year-on-year. Our estimates for the end of the year is around 3.6%-3.7% for the variation of the UF, which is negative when considering last year, around 4.7%-4.8%. It's also but we have some positive factors, so we have the reduction of the overnight rate also affects us positively in terms of funding. We're being more proactive in terms of the commercial activities in order to manage the time deposit pricing better as well. And we're seeing improvements in all the families of products in terms of spreads and repricing, as older loans are repricing to higher interest rates. So there's some negative factors as well. Fees, we don't see fees growing that strongly. It's low single digits. Cost of risk, we expect the economy to be improving, but then generally there's a lag between the economy improving and when we see that pass through cost of risk. So around 1.2% is reasonable in terms of our long-term level. And costs, we expect to be around that mid-single digit range. So you could argue that maybe with change in inflation or a little bit stronger economy, maybe we can grow stronger. But in our baseline scenario, it's what we mentioned in the call, slightly higher growth than the industry in terms of consumer loans. In terms of consumer loans and mortgage loans, and overall loans growing slightly above as well, but less so in larger corporates. In terms of capital, I'll pass the call to Daniel Galarce. Yeah, in terms of capital, as we have mentioned in the previous calls, we feel comfortable with the positive gap we have today with respect to the regulatory limits. And regarding the payout ratio, notwithstanding this positive gap, we believe that this is a regulatory framework that is still evolving. So we will have fully loaded limits and thresholds by 2020s, 2027, something like that. So we believe that, as at this point, we are not in—we don't want to change dramatically what we have done in the past. So basically, in terms of the payout ratio, we are assuming the normal level of payout that we have paid over the last decade, I would say. And the last two years have been a little bit special in that sense. So we believe that we are gonna return to our midterm levels in the short run, probably. Okay, great. Thank you both. Okay, thank you very much. Next question comes from Mr. Yuri Fernandes from J.P. Morgan. Please go ahead, sir. Hey, guys. Congrats on the good quarter. I have a follow-up on the FCIC, and sorry for coming back to this topic. I know it has been almost two years discussing the end of FCIC, and we still have questions on this topic. But I was trying to estimate the impact for your ROE of this payment. And with some information you gave us, I guess it may be possible. So basically, you paid CLP 3.1 trillion now, right? On your total CLP 4.6 trillion exposure. And you also mentioned, if I'm not mistaken during the presentation, that given you should pay the second tranche in July, that this is mostly cash, right? It's so it should be yielding closer to the b enchmark rates, around 6.5. And if you have to pay the 0.5 cost on that FCIC line, we are talking more or less about a 6% spread. When we apply this spread on the balance, the 4.5, 4.6, this is about a 4% ROE on an annualized base. But you don't, you are not gonna have this for the entire year, right? You just paid one tranche now, you'll pay a second tranche in July. So I'm getting in here something a little bit around 2% of ROE headwind going forward, like 2025 versus 2024. I know your guidance for this year already include the FCIC, like the, the moving parts, but I'm trying to, to get here, what would be, you know, like, the, the normalized other ROE for you in 2025 without, this, this line? So just checking if my math—like, it's a, it's a long question, I'm trying just to, to get your color of how, you know, relevant should it be, the payment of this line for the next year, like, the, the kind of the, the adjustment. And then I can ask a second questions after, after this one. Thank you. Hi, this is Daniel Galarce again. As we mentioned earlier, of course, the FCIC will have an impact in our P&L. That is pretty clear. But you also have other effects that are offsetting, importantly, this negative effect. As Pablo mentioned earlier, the overnight rate is expected to continue to decrease, so the effect of lower revenues from the FCIC will be offset by the lower cost of funds, particularly in terms of our time deposits. So basically, you will finally have a net-net that probably will be a little bit negative. However, that is already incorporated in the guidance we are giving you in our press release for our NIM and also for our ROE. So-... In terms of the math that you can, you can do, you're right. However, you have to consider everything together and not only the effect in isolation to the other effect we are gonna see in our balance sheet. No, no, super clear. ROE, I understand, is also related to your excess capital, right? This could be higher or lower, depending if you pay more dividends or not, you know. ROE is also management of how much capital allocates the business. Our forecast for ROE is considering our normal scenario in terms of the dividend payouts. Our normal scenario in the past has been 60% of our net distributable earnings. No, super clear. If I may, a second question on fees, especially on fee expenses. We had an implementation in Chile of the interchange caps, right? And I was reading some news articles, talking about banks potentially cutting loyalty programs, reducing the points of credit cards and things like that. So, if you can share what has Banco de Chile been doing in that regard? If you are also cutting a little bit the expenses to kind of offset the pressure on the revenue side, that would be great. So what you are doing and how important those measures can be? Thank you. I think in general, if you look in the past and what the industry has done with changes in regulations and making, for example, the credit card business, you have to think of the credit card business or any part of any product as a whole. So for example, the credit card business, you have to take into consideration all the revenues it generates and how this is being used. In the past, the clear example of adjusting the loyalty programs is when, for example, the 24 banks would offer up to 24 months, no interest, minimum payment. And because of changes of reduction, the interest rate cap in Chile made the product less profitable. A lot of these programs started to cease to exist, so most banks only offer three months, a couple, six months. Some only don't offer anything. And this is what you can expect from this adjustment in the acquiring business and the interchange fees. So we don't have anything set as of yet, of strong adjustments in terms of cost savings for the loyalty program. This is still being analyzed and being analyzed on how we'll be implementing these changes. But it's something that we're taking into consideration, and we'll give an update when we have that, implemented. Okay. Thank you. Thank you, guys, and congrats again. Thanks. Thank you. Thank you very much. Any additional questions, please press star two. Our next question comes from Miss Neha Agarwala from HSBC Global Research. Please go ahead, ma'am. Hi. Congratulations on the results, and thank you for taking my question. Just a quick one in terms of your digital initiatives. All the banks are trying to put out their digital initiatives and enhancing more and more, offer more and more features on their app. Where do you think Banco de Chile stands versus peers? What are the strengths versus your competition? What are you doing better, and where do you think are the gaps in terms of your digital offerings, which you would like to implement in the coming months? Thank you so much. Hi, Neha. I think the bank, the banking industry in Chile has a strong digital presence and has strong digital products. It's not a nice to have, it's something that you must have, and it's a continuing evolution of advances in these products. We've been very. We are, of the large banks, one of the later banks to come out with our digital product, which was the Cuenta FAN. We've come up with a couple of new initiatives for digital products, a current account, FAN for teenagers, FAN for SMEs. So we've been very proactive in terms of growing this digital base. And in terms of comparisons with other banks, I think it today it's not a nice to have. You have to be very proactive and have a very good quality product that provides the customer services and products that they want through the channels that they demand. And today, that's the digital product. So I would say that the large banks are very competitive in their products. We have a high quality product, and this will continue to evolve as things change. But I think we're doing a very good job today, and I can't pinpoint one area that we needs strong improvement or anything like that. I think we can always continue to adjust and provide a better product. But today we have a very high quality product, and the Cuenta FAN, for example, has a better Net Promoter Score than the overall of the bank. So the bank has a very high Net Promoter Score of over 75%. Cuenta FAN has even higher number. So we're very happy with the levels of digitalization that we have today. Understood. Thank you so much. You're welcome. Okay. Thank you very much. Our final question comes from Mr. Andrés Soto from Santander. Please go ahead, sir. ... Good morning to all. Thank you for taking my question. This is related to asset quality in your mortgage portfolio. You, you mentioned, you know, you provided a very interesting breakdown in your provisions, what pertains to, to mortgages, and doing simple math, we can see that the cost of risk of the mortgage portfolio, it is now at 1.2%. It used to be zero point seven percent just one year ago, so that, that suggests a rapid deterioration. Do you see room for, for additional deterioration in this segment? And what is really needed for this to start to improve, and when are you expecting this improvement to happen? In terms of NPLs and cost of risk, what we can see is that. What's important to mention is that we're coming out of a negative cycle. We see some improvements, but generally there's a lag between the improvements and what we see in the loan book in terms of demand and also in terms of credit quality. So as you mentioned, there have been, and it's something that we've seen in other industries as well, or other banks as well, a rise in NPLs in different segments. And why has this happened? This has happened because households have less disposable income because of the rise of cost of living, because of weaker employment opportunities. We think that this is something that should trend down as long as the economy improves. It has a high coverage ratio, these mortgage loans, so we don't see an issue there, but it is a little bit more difficult situation for individuals today in Chile because of the high inflation that we've had over the past few years and the weak economic scenario. Yeah. Hi, Andrés. This is Rodrigo Aravena. I'd like to highlight that today, for the first time in several quarters, today we are raising our GDP forecast for the future. So basically, we are aware about the improvement of the expected macroeconomic conditions for the future. But still, the economy is facing some challenges, some pressures. For example, it's very important to keep in mind that the interest rate today, at 6.5%, remains in more negative territory and more contractionary for the economy. The same for inflation. Today, we have an inflation rate which is close to 4%, which is still above the more normalized level for Chile, which is around 3%. So my point here is that we're expecting for the future, improvement in terms of economic conditions, especially those that are relevant for disposable income for the people, but the economy today is still under some pressures. There are some uncertainties for this year. For example, on the political side, there's gonna be important elections to monitor by October this year, the municipal election. Some reforms are discussed today as well. So that's why, given our that in our baseline scenario, the economic conditions will be better in the future. That's why we're expecting a normalization and an improvement in terms of asset quality indicators, NPLs, et cetera. But in an environment where today the economy is under pressures with below trend growth with a still higher employment rate. It's important to analyze how fast the economy will convert to the more normalized condition. Thank you, Rodrigo. And do you have any timeline? I mean, do you expect this deterioration to get worse before it gets better? And when will you be forecasting a turning point for NPLs in Chile? It's reasonable to expect a second half with better figures compared to the first half. But again, it's very important to analyze the evolution, for example, the monetary policy and also investment, because there's gonna be important events to monitor in Chile. But in our baseline scenario, when we consider that in the second half, the interest rate will be lower, the inflation rate will be lower as well, with a better economic growth. All these conditions are consistent with better asset quality in that time. So that's why, given the current information, I would say that it's reasonable to expect improvements since the second half of this year. I mean, probably today we are in the turning point, an inflection point in terms of NPLs and asset quality indicators during this first half of the year. Perfect. Thank you very much, and congratulations on the results. Thanks. You're welcome. Thank you. Thank you very much. It looks like we have no further questions. I'll pass the line back to the team for the concluding remarks. Thank you for listening, and we hope to have you with us for our next conference call results. Thank you very much. This concludes today's conference call. We'll now be closing all the lines. Thank you and goodbye.