Inflation Remains a Significant Tailwind to Banco de Chile's Third-Quarter Results

Narrow-moat-rated Banco de Chile reported solid results as the company continues to benefit from high inflation in Chile. The bank reported net revenue of CLP 778.2 billion, up 46.5% from last year but down 8.1% from last quarter. Banco de Chile's earning per ADR share of CLP 3.36 fell 21.3% from last quarter but were still up 88.8% year over year. These results translate to a return on equity of 30.09%, still well above the bank's historical average. We had expected Banco de Chile's inflation tailwind to moderate from last quarter and note that the bank had a considerably stronger quarter than its peers. That said, our thesis for the company was not altered by this quarter's results, and we do not plan to change our $18.50 fair value estimate.