Analyst Note| Michael Miller |
Narrow-moat-rated Banco de Chile reported strong second-quarter results as the bank benefits from high inflation and rising interest rates in Chile. Net revenue increased 72.5% from last year and 23.6% from last quarter to 846.8 billion CLP. Additionally, earning per ADR share of $0.93 were 111% higher than last year and translates to a return on average equity of 39.9% for the firm, far above the bank's average performance. We had expected Banco de Chile to produce strong results with inflation as a tailwind, and as we incorporate these results, we do not plan to materially alter our $18.50 fair value estimate for the bank.