The profitability of the Chilean banking system increased 25.5% in October compared to the previous month, due to an increase in revenue from business deals associated with increased inflation. The Banking Superintendence, the institution that regulates the Chilean financial system, reported that the system’s profits were around US$ 1.9 billion between January and October, under the IFRS (International Financial Reporting Standards) accounting standard modality of “asset holders.”
The institution’s report explains that “the main variation in the month corresponds to an increase in the result of the interest margin, due to the positive inflation that caused a 0.59% increase in the Unidad de Fomento (UF).”
The UF is an instrument that is readjusted on a daily basis in line with monthly inflation and it is denominated in pesos. An increase in the cost of living increases the income margins for financial business deals indexed to inflation, which are adjusted every month according to the variation in the CPI and the UF.
Likewise, the financial institution stated that Banco Santander, the most important one in the country, reported US$ 646 million in profits during the first 10 months of 2009.
For its part, the Banco de Chile, the country’s second-largest banking institution, accumulated dividends for around US$ 24 million during the same period.
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