Annual Report

Bci defines itself as a Financial Solutions Corporation that participates in all financial activities and operations permitted by the General Banking Law, offering the community products and services with highly-efficient operating processes and excellence in quality, with constant technological innovation, prudent risk-management policies and demanding ethical standards that have to be respected by everyone working in its companies. In this scenario and in order to meet its objectives and policies, the Corporation commits to ensure that these are met, with special emphasis on what it considers to be its four fundamental pillars:

The Shareholders

Business policies and decisions should always be designed to increase the capital that the shareholders have invested in the company, striving to ensure that the return on their investment is higher than the average for the banking sector, accompanied by normal levels of risk for the Corporation’s businesses and with a maximum possible level of transparency in its conduct in line with the prevailing law, regulations and ethical framework.

Customers and Suppliers

The products and services that the Bci companies offer their customers should be of optimum quality, at competitive prices, innovative and to meet their needs properly and promptly. It should always be remembered that the customers are the basis of the Institution’s success and commercial relations with them should therefore be maintained with a long-term perspective.

Mutually beneficial relations should be maintained with suppliers accompanied by loyalty over time and high standards of quality, compliance and transparency.

Staff and their Families

The Corporation should endeavor to ensure that all its staff have a dignified standard of living, stable work and possibilities for personal, professional and family development, properly motivating and rewarding good performance and individual and team effort, while providing the guidelines and regulations for maintaining a working atmosphere of excellence and demanding professional and ethical behavior.

The Corporation is defined as a family-responsible company in terms of its commitment to strive to ensure that staff work is carried out in conditions compatible with a proper personal and family life.

Society

The commitment of the Corporation is to develop its businesses and activities within the framework of governing laws in the country and abroad, wherever it does business. It will abide in full by the ethical principles that ensure respect for the rights and interests of others, according to the guidelines established and accepted by society. As an enterprise, it is also interested in contributing effectively to maintaining a healthy environment and enhancing the social, cultural and economic heritage of the nation by supporting relevant initiatives.

The Corporation is fully aware of social responsibility that it has as a company.

Our mission

Annual Report 2007 1 1

“We aspire to be leaders

in innovation, proximity and

customer satisfaction and be

recognized as the best

company for self-development

and to work for”

22

Prizes and recognitions

Most admired company, Diario Financiero and PricewaterhouseCoopers

Company of the year prize, Chile US Chamber of Commerce

Finalist in Garrigues-Affinitas prize for good corporate governance in Latin America, 9th Latibex Forum, Spain.

Most socially responsible companies prize, Fundación ProHumana and Capital magazine.

Equity prize - corporate category, Corporación Patrimonio Cultural de Chile.

Best companies in quality of service, Uni-versidad Adolfo Ibañez, Adimark, Praxis and Capital magazine.

Among the 40 most sustainable and best managed banks in Latin America, Management & Excellence (M&E) and Latin Finance magazine

National energy efficiency prize, Confederación de la Producción y del Comercio (CPC), Ministry of the Economy and Diario Financiero.

Best annual report in institutional annual reports competition, Editorial Gestión and PricewaterhouseCoopers.

Prize for the best banks in Latin Ameri-ca, América Economía magazine

Global pulse ranking, Reputation Institute and Pontificia Universidad Católica de Chile.

Lowest occupational accident rate, Consejo Nacional de Seguridad

Among the best companies to work for, Great Place to Work Institute and Capital magazine

Ranking of companies with best corporate reputation, Hill & Knowlton Captiva jointly with Diario La Tercera and Collect.

Silver Big! in financial services category, CONEP Marketing S.A. jointly with the Asociaciones de Marketing Directo and Nacional de Avisadores.

Bci Corporation again received important prizes and distinctions in 2007, which continue to place it as a leading entity that is recognized by the market.

Following seven decades of a tremendous services record, these recognitions motivate us to continue in the search for new models of attention and operation that enable us to maintain our reputation of being different.

2Annual Report 2007 2 300. Contents

01. Chairman’s letter to shareholders 0402. Financial summary 0803. Board of directors 1004. Management 1405. The company’s present and future 24 General information Bci brand Bci 201006. Corporate governance & corporate social responsibility 3007. Shareholders 34 Share price & market valuation Tax situation of the dividend Shareholders’ agreement 08. Commercial management 42 Retail area Corporate area Customer satisfaction Innovation in services09. Graphical view of performance 5210. Risk management 60 Credit risk Financial risk Liquidity risk Operational risk 11. Subsidiary companies 66 12. National & international presence 72 Chilean banking service offices International presence 13. Consolidated financial statements 82

44

01. Chairman’s Letter to Shareholders

Luis Enrique Yarur ReyChairman Bci

4Annual Report 2007 4 5

The numerous recognitions received by Bci reaffirm and motivate our management proposal.

Looking at the road we have followed during 2007, we feel satisfied about the tasks met. This feeling acquires greater significance because our performance was achieved in the year in which the Bank celebrated 70 years in business. During that time, characterized by its good results which have been constantly improving, its performance has not been free from the difficulties habitually affecting all business activity. Of course, this performance was achieved while maintaining the clear intention of providing satisfaction for the needs of every one of the areas to which our mission is addressed.

This commitment has been fundamental in achieving the tasks set and the results invite meditation on the importance to Bci of being coherent with its own style. This is an unmistakable seal that constitutes the company’s different manner of operating, but which is always alert to the advances, innovations and new forms that businesses acquire today.

However, the year 2007 in economic terms faced a complex scenario globally, especially referring to growth, inflation and monetary policy, with important increases in commodity prices, particularly copper and oil. The situation seen in the principal economies was the high volatility of the stock-price indices accompanied by the real estate and sub-prime mortgage crisis that developed in the United States, causing credit restrictions, a lack of bank liquidity and economic uncertainty.

Chile was not detached from these difficulties, resulting in a higher inflation rate than expected and lower growth than projected. In this context, the rise in interest rates that the Central Bank of Chile had to set and the fall in the exchange rate, plus falling trends on the stock market, led to a more uncertain scenario.

Achieving the position attained by the Bank has not gone unnoticed as it has found its mark in our business and in society as a whole, with the numerous distinctions received, reaffirming our management proposal and motivating the continued meeting of the coming challenges with greater energy. On the first page of this Annual Report, our shareholders, investors and customers can see and appreciate the large number of recognitions and prizes received by the Bank during 2007, both nationally and internationally.

Regarding the financial results of the Bci Corporation in 2007, the consolidated net income was Ch$135,376 million, 12.7% higher than that of 2006 in nominal terms.

The operating income of Ch$182,379 million showed a 20.4% increase over the previous year, due to the net positive result of interest and indexation, fees, exchange transactions and other revenues after deducting the result of the expense accounts, represented by the price differences on financial instruments and the natural increase in operating costs and allowances for doubtful accounts.

66

Chairman’s Letter to Shareholders01.

With respect to expenses, we should remember that during 2006 and 2007, the Bank opened 40 branches in Santiago and the regions. According to the feasibility studies made prior to their opening, the new offices need between two and three years to reach a break-even point between their expenses and revenues and start to generate their expected positive results. Meanwhile, the balance sheet has to support the fixed expenses necessarily required for maintaining these numerous attention units. At the end of 2007, the national banking services office network of Bci and Bci’s Banco Nova de Bci, which have different characteristics and operating structures, numbered 273 functioning units, a 12.4% increase over the number at the end of 2006.

Allowances for risks at the close of the year, totaling Ch$106,316 million, include additional allowances of Ch$15,400 million over the cover for loan portfolio risks. The Bank maintains allowances for its normal risk loan portfolio incorporated in its debtor evaluation models. These allowances, added to those made without being assigned to any specific risks, represent 30% of the total allowances made and forms part of the effective equity of the Bci Corporation. This equity figure is that used by the General Banking Law to set operating limits and banks’ capacity for action, including the level of effective equity held in relation to the risk-weighted assets of banks. The law requires a minimum ratio of 8%, but for a bank to obtain the highest solvency classification, the equity/assets ratio should be held at a minimum level of 10%. This has been the policy adopted by the board of Bci since this requirement was incorporated in the General Banking Law.

The companies comprising the Bci Corporation, made up of nine complementary and Bank support subsidiaries produced a net income of Ch$23,607 million which represented 17.4% of the corporate net income for 2007 and a 10.2% increase over their results for 2006.

The other companies in which the Bank has holdings, but which are not subsidiaries, include business-support companies held jointly with other banks. These produced a loss of Ch$720 million for Bci, fully affected by the negative result of the company Administrador Financiero de Santiago S.A.

During the year, Bci merged its companies Bci Corredores de Seguros S.A. and Genera Corredores de Seguros Limitada, coming from the acquisition of Banco Conosur in 2005, and also its companies Compañía de Normalización de Créditos S.A. and Servicios de Cobranza Externa Limitada, the latter that was also formerly part of the Banco Conosur group.

The total consolidated assets of Bci Corporation amounted to Ch$10,679,305 million, 16.7% more than at December 2006 in nominal terms. Total loans were Ch$8,365,991 million, an increase of 20.3% over 2006 and representing 78.3% of total assets.

With respect to market share, Bci’s total assets as of December 2007 represented 12.1% of the banks’ total, its share of total loans was 12.4%, its share of risk-weighted assets was 13.3% and its net income was 14% of the total banking system’s results. The important operating levels achieved by Bci in the system are protected by different and advanced credit-risk control systems, evidenced by the fact that 97.7% of our individually-evaluated commercial loans are classified in categories A and B in the risk measurement structure required by the Superintendency of Banks and Financial Institutions.

6Annual Report 2007 6 7

LUIS ENRIQUE YARUR REY

Chairman Bci

From the perspective of customers and always with the intention of making their lives easier, Bci in 2007 introduced different services like mobile banking, an electronic transaction service that operates via mobile telephones, and the payment of accounts through automated teller machines. These new services were accompanied by the publication of a good practices manual called “Our commitments with you, Bci at the service of its customers”. This regulates relations between the Bank and its customers, so that every action taken by any entity of the Bci Corporation is known by them, received to their entire satisfaction and carried out in a framework of trust and loyalty.

Bci also began the implementation of a project for transforming its operating procedures so that our business models are modified in the medium term, in order to compete efficiently at the national and international levels and thus ensure that our customers receive our services with even greater satisfaction.

The excellent results of the company have been, for a long time now, the product of the work and efforts of our staff at all levels. They are a pillar of vital importance for the organization and so receive protection and assistance from Bci, which extends to their families. This business philosophy explains the success achieved and justifies the recognition of the staff themselves, who approach their work with greater enthusiasm, dedication and commitment.

Because of this excellent relationship between the company and its staff , the Bank is constantly introducing new and better benefits which in 2007 increased by Ch$9,000 million. These programs implied using funds for financing scholarships, permitted putting into practice protection programs for the staff and their families and set a procedure for the gradual return to work of mothers following the birth of their children, a facility extended also to fathers,

who are given an additional day off to that set by law. The 2007 program also included the granting of an extraordinary bonus of Ch$1,000,000 to staff whose monthly salaries were less than that figure and who had worked for the Bank for at least one year.

These benefits culminated with the celebration of the Bank’s 70 years of existence and the organization of a series of recreational activities for staff and their families, notably the National Olympics which have been held every five years since the Bank completed 50 years of existence. The celebrations ended with a great artistic show for staff at the Arena Santiago events center in the capital’s Parque O’Higgins.

Regarding corporate social responsibility, we made important progress in all the pillars of our mission. Notable was the strategic alliance signed by Bci and Fundación Las Rosas called “Friends forever”, whose objective is to make society conscious of the difficulties that many senior citizens face, especially socially and economically.

We have, through this summary of our activities, tried to tell you how the company and its board of directors maintain a constant concern about all the sectors covered by Bci’s mission, accompanied always by innovative policies. You will therefore again receive this Annual Report together with our Annual Report on Corporate Governance and Corporate Social Responsibility.

For you, our customers, investors, suppliers and staff in Chile and abroad, please accept our good wishes and our thanks for the trust you have placed in us. We extend these good wishes and thanks to Modesto Collados and Manuel Valdés who for many years until April 2007 were members of the Bank’s board, providing their notable professional and personal support.

Bci’s loans represent 12.4% of the banking system, while its earnings amounted to 14% of the system’s total earnings

88Financial summary02.

8Annual Report 2007 8 9

Balances of operation at the end of each year

expressed in millions of Chilean pesos as of December 31, 2007

ChangeCONSOLIDATED BALANCE SHEET 1998 2000 2002 2004 2006 2007 2006 / 2007

Loans

Mortgage loans

Contingent loans

Overdue loans

1,871,665

420,829

264,326

28,167

2,043,818

454,321

223,866

48,786

3,040,314

531,161

357,995

43,075

4,443,481

458,460

461,447

49,843

6,417,892

337,845

653,849

59,353

7,323,751

265,737

684,712

54,592

905,859

(72,108)

30,863

(4,761)

Total Loans 2,584,987 2,770,791 3,972,545 5,413,231 7,468,939 8,328,792 859,853

Financial investments

Other assets

492,910

837,028

904,595

760,228

1,156,093

748,630

1,102,680

1,282,403

908,546

1,447,469

1,019,684

1,330,829

111,138

(116,640)

Total assets 3,914,925 4,435,614 5,877,268 7,798,314 9,824,954 10,679,305 854,351

Sight deposits

Time deposits & borrowings

Other obligations

Capital & reserves

Net income

985,841

1,366,237

1,340,686

177,240

44,921

1,015,608

1,691,175

1,454,640

228,357

45,834

1,322,662

2,234,570

1,953,024

299,431

67,581

1,562,338

2,936,643

2,815,513

383,058

100,762

1,605,716

4,402,333

3,185,824

502,037

129,044

1,735,463

4,828,309

3,411,598

568,559

135,376

129,747

425,976

225,774

66,522

6,332

Total Liabilities 3,914,925 4,435,614 5,877,268 7,798,314 9,824,954 10,679,305 854,351

FINANCIAL INDICATORSBci Shares

Price (restated pesos)

Earnings per share (restated pesos)

Market price / book value (times)

Market price / earnings per share (times)

Market capitalization (thousands of dollars)

Shareholders’ equity (thousands of Unidades de Fomento)

3,148

467.93

1.71

6.73

637,867

9,011

4,740

477.44

1.99

9.93

794,499

11,609

6,703

686.36

2.20

9.77

926,410

15,209

14,200

1,019.71

3.66

13.93

2,506,481

19,472

17,025

1,305.32

3.35

13.04

3,149,340

25,493

14,950

1,369.36

2.60

10.92

2,968,689

28,975

(2,075)

64.04

(0.75)

(2.12)

(180,651)

3,482

Profitability & efficiency

Return on capital

Capitalized previous years’ earnings

Return on assets

Productivity (support costs /revenues)

Assets per employee (millions of pesos)

25.34%

68.05%

1.15%

56.70%

999

20.07%

60.08%

1.03%

59.50%

1,089

22.57%

51.10%

1.15%

51.92%

1,463

26.30%

54.41%

1.29%

52.96%

1,106

25.70%

53.23%

1.31%

52.79%

1,102

23.81%

54.75%

1.27%

49.66%

1,119

(1.89)

1.52

(0.04)

(3.13)

17

Market share

Loans

Sight deposits

Time deposits

7.85%

13.77%

7.19%

7.91%

14.80%

7.08%

10.38%

12.50%

8.89%

12.20%

14.51%

9.77%

12.51%

14.87%

10.90%

12.38%

14.53%

11.61%

(0.13)

(0.34)

0.71

Risk

Total allowances / total loans

Overdue loans / loans net of interbank

Allowances / overdue loans

1.53%

1.09%

1.34%

2.39%

1.76%

1.33%

1.69%

1.08%

1.50%

1.88%

0.92%

2.05%

1.23%

0.79%

1.55%

1.28%

0.66%

1.95%

0.05

(0.13)

0.40

ACTIVITY (number)Employees (Bci Corporation)

Banking service offices

Checking accounts

Sight accounts

Automated teller machines (ATMs)

ATM transactions (December each year)

Customers with internet access passwords

Transactions by internet

3,919

141

208,570

197,282

282

2,224,356

---

4,072

143

217,544

245,653

303

2,889,601

810,836

4,017

141

247,959

340,478

398

3,445,773

3,474,855

7,053

198

289,014

590,194

506

3,836,141

7,851,970

8,918

233

313,748

855,115

628

3,218,465

242,641

8,984,343

9,541

273

345,820

893,961

815

3,214,591

280,324

11,792,742

623

40

32,072

38,846

187

(3,874)

37,683

2,808,399

pp

pp

pp

pp

pp

pp

pp

pp

pp

pp

The productivity ratio, measured as the ratio of costs to revenue, improved by 3.1 percentage points.

(pp) = percentage points

101003. Board of Directors

10Annual Report 2007 10 11

The board sets the principal policies that govern the actions of Bci

Seated:

Daniel Yarur Elsaca Director

Luis Enrique Yarur Rey Chairman

Jorge Cauas Lama Vice Chairman

Standing:

Lionel Olavarría Leyton Chief Executive Officer

Juan Manuel Casanueva Préndez Director

Pedro Corona Bozzo Director

Sergio De Amesti Heusser Director

Dionisio Romero Seminario Director

Alberto López-Hermida HermidaDirector

Andrés Bianchi Larre Director

1212Board of Directors03.

Bci has the following committees:

Directors’ Executive committee.

Directors’ Committee

Corporate Governance and Corporate Social Responsibility Committee

Compensations Committee

Finance and Corporate Risk Committee

The principles sustaining the actions of the board, the profile and brief descriptions of each of its members, the detail of their functions and attendance, plus the various committees recently named, are explained in detail in the Report on Corporate Governance and Corporate Social Responsibility that accompanies this Annual Report.

The members of the board were elected at the ordinary shareholders meeting held on April 12, 2007 for a period of three years.

The board is constantly dictating the principal policies governing the Bank’s actions including commercial strategy, budget review, portfolio diversification, credit risk, financial risk, operational risk and external markets risk, the equity position, profitability, sufficiency of allowances, additional allowances, service quality and working conditions.

Monthly, it receives a complete presentation on the performance of Bci and the results being obtained, as well as other special nature items examined or approved in the different directors’ committees.

The chief executive officer, Lionel Olavarría Leyton, acts as the secretary of board meetings, assisted by the senior legal counsel, Pedro Balla Friedmann and the secretary general, Carlos Andonaegui Elton.

Given the demanding standards that regulate the banking business, and the need to participate effectively in the Bank’s activities, the board has delegated functions by forming different committees exclusively comprising directors who meet with different frequencies. Their functions and activities are determined according to the nature of the matters and specialities that the bank’s management requires. The management of each of the subsidiary companies is the responsibility of a board comprising people with different characteristics.

12Annual Report 2007 12 13

monthly, the boARd Receives A complete pResentAtion on the peRfoRmAnce And Results of bci

141404. Management

BCI’S MANAGEMENT IS COMPRISES OF HIGHLY-QUALIFIED PEOPLE WITH A BROAD EXPERIENCE IN BANKING

14Annual Report 2007 14 15

Lionel Olavarría LeytonChief Executive Officer

161604. Management

Pedro Balla FriedmannLegal Counsel

Pablo Jullian GrohnertCorporate Manager, Personnel Management

Andrés Atala HannaManager, Risk Adviser

Carlos Andonaegui Elton Secretary General

Marcela Bravo PuldainManager, Communications and Corporate Social Responsibility

Roberto Bustos KaempfferCorporate Manager, Planning and Financial Control

Mario Gaete HörmannManager, Support Areas

Eugenio Von Chrismar CarvajalManager, Finance and International

16Annual Report 2007 16 17

Nicolás Dibán SotoManager, Corporate Risk

Graciela Durán VidalComptroller

Humberto Béjares JaraManager, Adviser to the Chairman and Chief Executive Officer

Mario Gómez DubravcicManager, Commercial and Subsidiaries Division

Adolfo García-Huidobro OchagavíaManager, Marketing

Eduardo Paulsen IllanesManager, Innovation and Corporate Programs

Abraham Romero PequeñoManager, Retail Banking Division

181804. Management

LEGAL COUNSELPEDRO BALLA FRIEDMANN Division ManagerFernando Carmash Cassis Manager, Legal Acts & ContractsArturo Prado Puga Manager, Judicial Area

CORPORATE MANAGEMENT, PLANNING AND FINANCIAL CONTROLROBERTO BUSTOS KAEMPFFER Division ManagerJuan Ignacio Acevedo Vogel Manager, PlanningAndrés Irarrázabal Ureta Manager, New Businesses DevelopmentOsvaldo Lastra Acuña Manager, Performance ControlFernando Vallejos Vásquez Manager, Accounting

CORPORATE RISK MANAGEMENTNICOLáS DIBáN SOTO Division ManagerManuel Alfero Ghio Manager, Corporate Loan AdministrationRubén Aracena Yánez Manager, Banco Nova de Bci LoansHoracio Eyzaguirre Johnston Manager, Portfolio Follow-up & ControlRodrigo Junco Figueroa Manager, Special AccountsJuan Pablo Risco Ríos Manager, Market RiskMario Sarrat González Manager, Retail Banking LoansManuel Tapia Salazar Manager, Risk Analysis & ManagementGerardo Zegers Domínguez Manager, Operational Risk

The most important executive levels of Bci are the divisional managers who report to the chief executive officer. These managers also meet in committees to review business progress and direct the strategic plans for achieving the corporate objectives, under the direction of the policies adopted by the board.

The detail of the functions of the management committees is explained in the Report on Corporate Governance and Corporate Social Responsibility that is distributed together with this Annual Report.

Management Areas

18Annual Report 2007 18 19

COMPTROLLER’S DIVISIONGRACIELA DURáN VIDAL Division ManagerRenato Blaskovic Aravena Manager, Technological Risk Audit DepartmentXimena Kutscher Taiba Manager, Processes Audit Department

SUPPORT AREA MANAGEMENTMARIO GAETE HöRMANN Division ManagerPatricio Alcayaga Murtag Manager, Finance OperationsFrancisco Corral Quevedo Manager, Branches and Central UnitsPablo Cousiño Espinoza Manager, Technological InnovationDanilo González Asensio Manager, Data ProcessingJosé Manuel Izquierdo Correa Manager, Retail Banking OperationsPatricio Mardones Celis Manager, Procurement and SuppliersEduardo Uchida Silva Manager, Corporate Banking Operations

MARKETING MANAGEMENTADOLFO GARCíA - HUIDOBRO OCHAGAVíA Division ManagerRodrigo Corces Barja Manager, SegmentsIgnacio Echeverría Saldes Manager, Corporate ImageJuan Gil Octavio Manager, AutomobilesChristian Meyer González Manager, MortgagesMaría Inés Nilo Guerrero Manager, ProductsBárbara Schwerter Eckholt Manager, Payment Means

COMERCIAL AND BRANCH MANAGEMENTMARIO GóMEz DUBRAVCIC Division ManagerFernán Barrios Larrañaga Manager, LeasingAntonio Le Feuvre Vergara Manager, Corporate BankingFrancisco López Alonso Manager, Corporate Business DevelopmentClaudio Martínez de la Harpe Manager, Medium & Large Companies BankingJuan Pablo Stefanelli Dachena Manager, Commercial Effectiveness

2020Management04.

CORPORATE PERSONNEL PERFORMANCE MANAGEMENTPABLO JULLIAN GROHNERT Division ManagerAndrea Barría Muñoz Manager, Organizational Development & TrainingGuillermo Gallardo Labra Manager, Labor RelationsFaride Lobos Aleuy Manager, Personnel Performance & ProcessesGonzalo Pizarro Sironvalle Manager, Personnel DevelopmentRafael Barrera Renault Manager, Business Strategic PartnerJorge Fredes Schürmann Manager, Business Strategic PartnerAlberto Zañartu Ossa Manager, Business Strategic Partner

INNOVATION AND CORPORATE PROGRAMS MANAGEMENTEDUARDO PAULSEN ILLANES Division ManagerRodrigo Alegría Cruz Project Manager Patricio Salinas Gutiérrez Manager, Corporate Service QualityPedro Tapia Guzmán Project Manager Rodrigo Vélez Sainte-Marie Project Manager

RETAIL BANKING MANAGEMENTABRAHAM ROMERO PEqUEñO Division ManagerSandro Araya Molina Manager, TBancMarcos Castro Vega Manager, Businesses BankingFrancisca Errázuriz Correa Manager, Preferential BankingLuis Felipe Hirane Sarkis Commercial Manager Fernando Iturbe Guzmán Manager, Agreements and AlliancesEduardo Valenzuela Vaillant Manager, Bci TelecanalMauricio Zárate González Manager, Banco Nova de BciRafael Menares González Manager, Integration Compañía de Normalización de Créditos S.A.

20Annual Report 2007 20 21

During 2007, some areas of the Bci organizational structure were changed in order to increase efficiency levels and achieve synergies, and improvements were also made to the products and services offered to customers.

The commercial areas were oriented to adding value to the business. Emphasis was placed on the standardization of processes and the segmentation of customers so that they receive the best offers in the market.

Some support areas were restructured to improve the quality of the services offered to customers. The corporate operations and projects area was split into three operations areas (retail, corporate and finance) in order to specialize and support in a more integral way the processes of each of these segments.

The operational risk unit was reorganized to increase the effectiveness of the administration and control of these risks, following the new Basel Committee guidelines. The principal areas of this new organization are: processes operational risk, technology operational risk, regulatory compliance operational risk, operational risk management, business continuity and asset laundering.

The planning and financial control area was formed in late 2007 in order to have strategic planning and performance information processes for supporting and sustaining decision taking in the Corporation.

The corporate procurement and suppliers area underlined the correct application of policies and provisions defined for the Corporation and the regulatory bodies, in relation to suppliers of products and services, and the follow-up of results of important medium and long-term investment projects.

FINANCE AND INTERNATIONAL MANAGEMENTEUGENIO VON CHRISMAR CARVAJAL Division ManagerJorge Barrenechea Parra Manager, Balance SheetJosé Luis de la Rosa Muñoz Manager, Financial PerformanceSantiago Edwards Morice Manager, TradingRicardo Gabler Zúñiga Manager, International DivisionAlberto Potin Olazarri Manager, InvestmentsIgnacio Yarur Arrasate Manager, Finance BusinessAndrés Zabala Hevia Manager, Private Banking

22221969Automatic account payments (PAC)

We anticipate the future and innovate with a new service that will simplify people’s lives: the automatic payment of accounts which translates into more comfort, more free time and a better quality of life for our customers.

22Annual Report 2007 22 23

6969

new forms... We believe in constant evolution for the future.

242405. The company’s present and future

IN ITS SEVENTY YEARS OF EXISTENCE, BCI HAS PRODUCED A VALUABLE COURSE OF PROGRESS AND INNOVATION AT THE SERVICE OF OUR CUSTOMERS

24Annual Report 2007 24 25

The financial strength that distinguishes Bci is due to the efficient management of its assets, a good liquidity position, high profits and a constant policy of the partial capitalization of annual profits.

Information on the Company

Bci participates in the domestic market with a network of 273 offices that offer banking services from Arica to the Chilean Antarctic, and also has various remote communications channels, telephonic platforms and a corpora-te web site (www.bci.cl). It also offers many services complementing the banking business through nine subsidiary companies.

In addition, it carries out commercial business in six countries through a branch in the city of Miami, four representative offices in Mexico City, Lima, Sao Paulo and Hong Kong, plus a business office in Madrid on the premises of Banco Popular Español.

Bci currently serves around 1,200,000 customers, responds to the interests of 2,300 shareholders and has a team of 9,541 staff.

The financial strength that characterizes Bci is due to the efforts to achieve an efficient mana-gement of its assets, a good liquidity position, high profits and a constant policy of the partial capitalization of annual profits to finance the sustained increase in the operations of the Bank and its subsidiaries.

2626The company’s present and future05.

In the Pulse survey carried out by the Communications Faculty of the Pontificia Universidad Católica de Chile and Reputation Institute, Bci was placed first in the innovation dimension among Chilean businesses, obtaining a rating that was 72.2% higher than technology companies even. With respect to advertising recall, the banking category obtained a level of 44% whereas Bci was assigned 54%.

As a corollary, in the area of information security, Bci obtained its ISO 27001 certification in 2007, making it the first bank in South America to meet this operational security requirement. This in turn has incidence in five fundamental aspects of information: confidentiality, integrity, availability, planning, acting and verification.

Bci Brand

The essence of the Bci brand is centered on the corporate intention to differentiate itself from other banks, evidenced by a positioning based on a high degree of empathy with people which permits, as a financial entity, facilitating the lives of its customers through innovative products and services, technology at their service, personalized attention through multiple channels and, a distinctive factor, maintaining a different service attitude and links with people for meeting efficiently and effectively the needs and requirements of its customers.

Important steps were taken in terms of initiatives and projects directed to reinforcing the image of the Bci brand. A large number of branches were renovated, advertising campaigns were focused on showing the benefits of our products and services, Bci Inversiones was launched as a brand that consolidates the offer of products and services directed to saving and investment under the corporate wing, and adjustments and changes of designs of products were made related to the checking account plans offered to each customer segment.

In terms of brand recognition, 2007 was a good year for Bci as its third position was reaffirmed in the rating surveyed and published by Adimark GFK in the last quarter of the year. This is a signification placing considering also that the degree of recognition rose by 20% which made Bci the only local bank to achieve an improvement in this matter.

Regarding consideration of the Bci brand, banking customers state Bci in second place in the event of their changing their bank, the gap with the top place being reduced. According to the Adimark GFK bank image survey, Bci maintains its top place in the innovation attribute.

26Annual Report 2007 26 27

Bci 2010

Fusing together Bci’s targets and the search for a service of excellence for customers, a fundamental pillar of the Corporation, is the principle behind the Bci 2010 Plan. This is an ambitious project that intends to change the form of operating, transforming the central processes in key areas of the business in order to reach the highest standards in the industry in terms of customer satisfaction.

The start of this project has been very auspicious as more than eight key processes for the organization were re-designed, producing cost reductions, improved productivity and reduced operating risk.

An example of this transformation is the checking account opening process, for which 80% of customers consulted gave top marks, thanks to an increase in productivity over 2006.

BCI SERVES AROUND 1,200,000 CUSTOMERS, RESPONDS TO THE INTERESTS OF 2,300 SHAREHOLDERS AND HAS A TEAM OF 9,541 STAFF

28281978Online Banking

We were pioneers in creating the most advanced computerized project in Chilean banking, a system capable of processing inter-branch transactions quickly. We implemented online banking, anticipating what would be the new demands of our customers.

28Annual Report 2007 28 29

7878

new visions...Long-term vision is the ability to imagine the potential needs of people in advance.

303006. Corporate Governance and Social Responsibility

bci Assumed the public commitment of mAintAininG tRAnspARent And Responsible business mAnAGement

As in the previous three years, the Annual Report 2007 is being distributed accompanied by the Report on Corporate Governance and Social Responsibility (CSR).

The document provides valuable information on the conditions on which the board of Bci assumes its responsibilities together with the senior management, the performance of the staff and the Bank’s role in the community.

In addition to its traditional executive committee, directors’ committee and corporate governance and CSR committee, the board added the finance and corporate risk committee to constantly examine the way in which the Bank’s financial management is exercised and the risks assumed in this sense. A second form of participation in corporate management was the constitution of the compensations committee, also composed of directors, responsible for remaining alert to the good functioning of the staff remuneration systems and their proper definitions and controls.

Customer relations were reinforced with Bci becoming the first bank in South America to obtain certification under the ISO 27001 standard, referring to information security.

In addition, a procurement and suppliers policy was set in order to formalize the procedures for the acquisition of products and services. This permits establishing a management style that promotes objectivity, transparency and the good functioning of the process. The first satisfaction survey was carried out of around 70 suppliers to measure the perception and satisfaction about the attention they receive from the Bank. A web site was also introduced for providing information to suppliers and Bci staff on the procurements process.

30Annual Report 2007 30 31

Bci propelled its “Nace” and “Renace” programs, the first to support financially those starting a business and the second to provide a new opportunity to businesses suffering difficulties.

A campaign called “What do I do?” was carried out in order to increase the staff’s degree of knowledge of Bci’s ethics code and reinforce their ethical conduct, with the distribution of a document containing more than 40 actual cases presented to the Bank in the last 10 years and facilities were introduced for staff to make their comments or accusations.

Bci also assumed the public commitment of maintaining transparent and responsible business management, with adherence to the United Nations Global Compact that comprises the adoption of universal principles in labor relations, the environment, human rights and anti-corruption matters.

The “Bci with You” program was also introduced by which all the initiatives and benefits received by staff in the areas of the family, health and recreation were gathered into three groups.

Regarding safety, Bci was awarded for the twelfth time the annual safety prize of the Consejo Nacional de Seguridad, in the banking category, with an accident rate of 0.97%. Training was also given in safety, health and the environment to more than 50% of all staff exposed to working risks, through 250 courses, workshops and talks on location.

In the environmental area, software was developed to measure the behavior of staff in the consumption of paper, water and energy, and a campaign “Wake up, the environment is in your hands” was launched. Bci also launched a conservation and environmental education program in the Pan de Azucar National Park, as a result of the success of branches in the Atacama region which achieved an 18% saving in the use of water and energy. The recycling was begun of electronic waste, batteries and computers which provided a new use for 10.9 tons of waste.

As part of the social role Bci has set itself, a long-term alliance was signed in 2007 with “Fundación Las Rosas” to spread an awareness in the community of the value of old age within families. The agreement covered a program of corporate volunteers, a campaign for attracting new partners and an annual donation to finance part of the medical costs of senior citizens.

With respect to the Bank’s commitment to small and medium enterprises (SME), Bci provided them with the Multimedia Guide to Entrepreneurship, a manual for entrepreneurs setting out the steps that have to be taken for starting a business enterprise. Bci propelled the “Nace” and “Renace” programs, the first to support financially those starting a business and the second to provide a new opportunity to businesses suffering difficulties.

Bci also maintained its commitment for educational support and cultural activities, financing numerous functions and artistic shows.

32321985Presence We were able to reach where no other bank has: the Antarctic. We

had the confidence to open offices in Miami and Hong Kong; we think about the need to provide financial services to the people of Quellón in the south of Chile, and we shall continue to make changes for simplifying people’s lives.

32Annual Report 2007 32 33

8585

new horizons...We believe that the world does not end here, we are where you are.

3434

Bci share price and market capitalization

As the following graph shows, the Bci share price has grown faster than the Selective Stock Price Index (IPSA) in recent years.

Bci’s market capitalization in US dollar terms has shown an extraordinary increase between 2000 and 2007, as the following graph shows:

Capital resources

Shareholders

Market capitalization in millions of dollarsShare price in constant pesos.

Milli

ons

of d

olla

rs

pric

e

07.450400

350

300250200150100

500

BCI IPSA

2000 2001 2002 2003 2004 2005 2006 2007

2000 2001 2002 2003 2004 2005 2006 2007

indeX 100=2000

3,500

3,000

2,500

2,000

1,500

1,000

500

17,000

15,000

13,000

11,000

9,000

7,000

5,000

3,000

100.00128.31

150.79

235.45

330.69 339.39

419.37 395.50

281.43248.37

181.16165.66

136.9292.22109.10

34Annual Report 2007 34 35

The Bci share price has grown faster than the Selective Stock Price Index (IPSA).

The ordinary shareholders meeting held on April 24, 2007 resolved to assign Ch$65,779,467,093 to the reserve for future capitalization, a sum representing 54.7% of the net income for 2006.

With these resources, necessary for sustaining the Bank’s operating growth, Bci’s basic capital as of December 31, 2007 comprised the following:

Paid capital (98,860,310 shares) Ch$ 518,368,556,844

Reserve for future capitalization 49,358,107,362

Share premium 319,028,675

Exchange rate fluctuations investment in Miami 1,549,823,105

Fluctuations in value financial investment portfolio (1,036,984,864)

Basic capital Ch$ 568,558,531,122

Effective equity, which acts as a regulator of different operating limits established in the General Banking Law, comprises the following:

Basic capital $ 568,558,531,122

Additional allowances 31,562,061,699

Subordinated bonds 284,279,265,561

Goodwill (9,206,164,250)

Excess of investments in companies (1,246,485,911)

Effective equity $ 873,947,208,221

363607. Shareholders

With these resources, the ratio of basic capital to total assets is 5.26%, while the ratio of effective equity to risk-weighted assets is 10.39%. The minimum ratios demanded under the General Banking Law are 3% and 8% respectively.

It should be pointed out that at the start of 2008, the net income for 2007 is added to the basic capital where it remains until the ordinary shareholders meeting pronounces on its distribution.

On the instructions of the Superintendency of Banks and Financial Institutions, effective January 2008, banks have to make a monthly provision for the minimum dividend to be distributed among sharehol-ders. Consequently, the balance of the monthly net income not committed to the dividend will constitute capital for all legal and regulatory purposes.

Tax situation of the dividend distributed in 2007

The ordinary shareholders’ meeting held on April 24, 2007 approved the distribution of a dividend for Ch$550 per share against the net income for 2006, amounting to a sum of Ch$54,373,170,500, being 45.3% of the net income.

This dividend was distributed against income taxed at the First Category rate of 15%. This charge constitutes a credit against the income tax that shareholders have to declare annually.

To calculate this, the credit is considered subject to 1st Category income tax and should legally be added to taxable income, as explained in the following example relating to the dividend received per share.

36Annual Report 2007 36 37

Dividend Ch$550.00

Restatement to December 2007(550 x 1,067 change CPI March-November 2007) Ch$586.85

Increase for first-category tax(0.15: 0.85) x 586.85 Ch$ 103.56

Taxable income for income taxes Ch$690.41

Credit against tax (690.41 x 0.15) Ch$ 103.56

Regarding the dividend distributed, Bci sends its shareholders a certificate showing the result of this calculation and other information necessary for completing their annual tax declaration.

Corporate shareholders in the Bank, obliged to maintain the Taxed Earnings Register (FUT), should consider that the dividend distributed in April 2007 comes from taxed earnings with rights to an income tax credit of 15% arising in 2000 for 28.1%, and in 2001 for 71.9%.

STARTING IN JANUARY 2008, BCI WILL HAVE TO MAKE A MONTHLY PROVISION FOR THE MINIMUM DIVIDEND TO BE DISTRIBUTED AMONG SHAREHOLDERS

383807. Shareholders

Principal shareholdersThe following are the principal shareholders in Corporación de Soluciones Financieras Bci as of December 31, 2007:

Name Shares % shareholding

EMPRESAS JUAN YARUR S.A.C. 52,772,147 53.38

JORGE JUAN YARUR BASCUÑAN 4,177,884 4.23

SOCIEDAD FINANCIERA DEL RIMAC S.A. 3,434,892 3.47

INVERSIONES BCP LTDA. 2,989,916 3.02

AFP PROVIDA S.A. PARA FONDOS DE PENSIONES 2,742,447 2.77

AFP HABITAT S.A. PARA FONDOS DE PENSIONES 2,471,472 2.50

AFP CUPRUM S.A. PARA FONDOS DE PENSIONES 1,996,949 2.02

INVERSIONES JORDAN DOS S.A. 1,974,790 2.00

CITIBANK N.A. 1,942,230 1.96

TARASCONA CORPORATION 1,456,528 1.47

AFP BANSANDER S.A. PARA FONDOS DE PENSIONES 1,198,548 1.21

AFP SANTA MARÍA S.A. PARA FONDOS DE PENSIONES 1,191,380 1.20

INVERSIONES MILLARAY S.A. 1,182,245 1.20

INMOBILIARIA E INVERSIONES CERRO SOMBRERO S.A. 1,084,691 1.10

LUIS ENRIQUE YARUR REY 965,652 0.98

BCI CORREDOR DE BOLSA S.A. 924,804 0.94

BANCHILE CORREDORES DE BOLSA S.A. 769,688 0.78

LARRAÍN VIAL S.A. CORREDORES DE BOLSA 694,579 0.70

INMOBILIARIA Y COMERCIAL RECOLETA SUR LTDA. 585,074 0.59

MODESTO COLLADOS NUÑEZ 571,416 0.58

INVERSIONES VYR LTDA. 526,123 0.53

CELFIN CAPITAL S.A. CORREDORES DE BOLSA 472,619 0.48

BICE CORREDORES DE BOLSA S.A 472,612 0.48

AFP PLANVITAL S.A. PARA FONDOS DE PENSIONES 448,109 0.45

INMOBILIARIA E INVERSIONES CHOSICA S.A. 371,386 0.38

OTROS ACCIONISTAS 10,596,412 10.72

COLABORADORES Bci 845,717 0.86

SHARES SUBSCRIBED AND PAID (authorized share capital) 98,860,310 100.00%

38Annual Report 2007 38 39

Shareholders’ Agreement

Shareholders related to the Yarur family, who as of December 31, 2007 held 63.4% of the subscribed and paid shares, signed a shareholders’ agreement dated December 30, 2004 that reaffirms their willingness to maintain the traditional unity and control of the Bank in the hands of the Yarur family, reiterating their intention to preserve the principles on which the management of the institution have been based.

40401989Where nobody else dares, we back young people, giving them the possibility of having their own banking account, providing them with greater indepen-dence and speed in carrying out banking transactions.

Prime account(Electronic check-book)

40Annual Report 2007 40 41

8989

new opportunities...Ideas are capital that only earns interest in thehards of talent.

424208. Commercial management

Retail banking

Retail Banking has the largest number of Bank customers, mainly individuals. They are attended by some 1,000 executives who care for the requirements of each customer, both face to face and by telephone, through a network of 273 direct attention offices from Arica to the Antarctic.

A new customer segmentation was made in 2007 in order to apply attention models related to their needs. These models comprise platforms of executives dedicated to resolving and solving customers’ requirements.

Banco Nova de Bci is focused on the country’s emerging segment, being individuals and micro-businesses that receive support and advice at 71 branches in Chile which are open between 8 a.m. and 4 p.m.

The integration of the business support areas was completed in 2007, seeking to improve the service standards offered to customers, staff working conditions and operational efficiency.

In its seventh year of operations, Businesses Banking continued its actions committed to the development and internationalization of small and medium enterprises, making Bci an important local market benchmark for this business sector. These customers are attended at 15 business centers that offer a tailor-made service. An Entrepreneurial Guide was also published containing key information for those about to put into practice their business plans.

TBanc, for its part, the remote banking service office that is already 10 years old, is a unique attention model in Chile. Remote assistance, by internet or telephone, enables customers to carry out all their banking transactions from wherever they are and at any time of the day, with optimum parameters of security and speed.

Preferential Banking has exclusive offices for high-net-worth individuals where they are attended by an agile and personalized model, and by specialist investment executives. The service was extended to six platforms in Chile during 2007.

The commercial brands under which the Corporation offers investment products and services were unified during 2007 with the creation of the Bci Inversiones unit. This groups together all the institution’s resources for the delivery of more and better solutions for customers.

With this initiative, a global investment project started operating which assumes the responsibility of positioning Bci among the three leading players in the investment management market for customers.

To achieve this target, Bci Inversiones implemented a customer segmentation port folio with differentiated value proposals for its customers which led to technological improvements centered on the information and transactional systems managed by the investment executives, improved commercial processes and the design of products. The integral attention model of investment executives was reinforced with training and certification.

42Annual Report 2007 42 43

The Bci Inversiones unit was formed in 2007, grouping together all the institution’s resources for the delivery of more and better solutions for customers.

BCI HAS IMPLEMENTED A CUSTOMER SEGMENTATION PORTFOLIO WHICH USES MODELS AND PLATFORMS OF ITS CUSTOMER’S NEEDS AS A FILTER TO BETTER SERVICE THEM

444408. Commercial management

BCI ATTENDS TO ITS CUSTOMERS USING EXECUTIVES SPECIALIZED IN PRODUCTS AND SERVICES FOR FINANCING THE ASSETS GENERATED IN THEIR BUSINESSES

Corporate area

Corporate Banking is the segment specialized in large economic groups, holding companies and multinational corporations whose net annual sales exceed a million Unidades de Fomento. The area comprises executives specialized in products and services for financing sophisticated assets. Its attention model is based on managing the relationship from a global viewpoint in order to respond effectively to the complexity of their businesses.

Companies Banking, for its part, attends customers with annual sales of over 500,000 Unidades de Fomento, considered as large companies, with a sub-segmentation of medium companies whose annual sales are between 50,000 and 100,000 Unidades de Fomento[PW1].

44Annual Report 2007 44 45

By the nature of its field of action, Companies Banking attends exclusively legal entities to which it offers products and services supported by a differentiated attention model that includes financial advice, financing, investments and payment services, collections and information.

Focused mainly on the large home and office construction companies, Real-Estate Banking consolidated a productive experience of close relations with companies in the sector, creating a wholesale channel offering mortgage loans through Bci Home in support of the commercialization processes of the properties built.

An effectiveness plan was implemented during 2007, with tools for improving the performance of the commercial line. As a result, there was a substantial increase in business opportunities, a better cross-selling of products, progress was made in making Bci the only bank for certain customers and there was an increase in the quality of service provided by the commercial teams.

The corporate area complements its operations in coordination with the Leasing division and the subsidiaries Bci Factoring, Bci Asesorías Financieras and Bci Administradora de Fondos Mutuos. It also has the direct support of the numerous services provided by Electronic Banking.

464608. Commercial management

48

38

28

18

8

-2

-12

%

34

-6 -6-7-4 -5

32

4145

47

2003 2004 2005 2006 2007

Customer satisfaction

The rising trend in the degree of satisfaction of our customers was confirmed in 2007 when consulted about the conditions in which they receive Bci services. About 50,000 telephone interviews were made during the year, resulting in a sustained improvement in the attention of Retail Banking. The following shows the degree of satisfaction achieved over the past five years:

Degree of satisfaction

Excellence Insufficient Net satisfaction

46Annual Report 2007 46 47

A document called “Our commitments with you, Bci at the service of its customers” was published in 2007, mainly to regulate the Bank’s relations with its individual customers. It explains the operations of the institution for maintaining expedited communication channels and providing the customer with all the information necessary for the contracting and functioning of the products and services offered by Bci, Banco Nova de Bci and TBanc.

Bci also adheres to the Code of Conduct and Good Practices of Banks and Financial Institutions published by the Banking Association. This document arose from the need to clarify the common view of banks relating to advertising, information and services, but complementing the provisions established by Bci Corporation in its internal manuals, regulations and instructions and, evidently, by Bci´s ethics code which has now served for eleven years.

Innovation in services

Innovation of its services has been a permanent characteristic of Bci for providing its customers with the best possible service. The year 2007 was no exception to this policy, particularly the matters reported below and especially the continued improvement in virtual services.

484808. Commercial management

Mobile banking

With the idea of bringing the Bank closer to its customers and taking them by the hand, Mobile Banking was introduced, accompanied by the campaign “we are opening more than 12 million branches”, an initiative promoting the use of electronic transactions and motivating the use of mobile telephones for making banking transactions. Customers and non-customers are offered the service of the telephonic requesting and approval of loans via text messages. Also, through registration in the sites www.bci.cl, www.tbanc.cl or www.nova,cl and the later downloading of a multi-device application, customers are offered a fast and safe carrying out of balance enquiries, funds transfers, cash advances against credit cards and even the service of re-charging pre-paid mobile telephones.

Payment of accounts through automated teller machines

As another way of making life easier for customers, payments of accounts can now be made through automated teller machines. The system provides the possibility of choosing the payment of the principal services like water, electricity, gas, fixed telephone, mobile telephone, cable TV and highway tolls, against the checking account or sight account.

Web Kiosk

Responding to the needs of current society, Bci introduced a financial terminals platform called Web Kiosk which offers account payment services, electronic transfers between Bci branches and classified advertising publication

BCI INTRODUCED MOBILE BANKING WITH THE IDEA OF BRINGING THE BANK CLOSER TO ITS CUSTOMERS AND TAKING THEM BY THE HAND

48Annual Report 2007 48 49

Bci Web

This is a widely known channel through which banking transactions can be carried out online, information accessed on different areas of operation and which forms part of the virtual community created around Bci Blog.

Internet user customers increased by 17% over 2006 to 280,000 “internauts” using the Bci sites over a 60-day period.

The transactions most frequently used are funds transfers, payments of accounts and investments online, which showed increases of 28%, 80% and 52% respectively.

Blog customers

This new channel is an effective contact tool connecting users with the Bank’s staff, creating a community that permits a direct, agile and entertaining communication through the provision of complete information on products, services and processes.

Financing of tertiary educa-tion

As support for the community and in order to contribute to the professional development and facilitate equal access to tertiary education, Banco Nova de Bci signed an innovative agreement DuocUC and the International Finance Corporation ( IFC) of the World Bank.

This strategic alliance permitted the creation of a credit instrument called “Tertiary Financing”, unique in the local market and which covers 100% of the cost of the course on more favorable credit terms than those offered by the traditional system, in terms of access, interest rate and repayment terms.

The program commits Ch$27,000 million to be administered over the next seven years starting from the 2008 school year, thus permitting long-term financing for an estimated 15,000 students.

50501992Logo Before, banks were gray and remote. We adventure by introducing four

colors and likeable figures representative of the Bank’s present logo launched in 1992, serving to direct people and bringing them closer in a more familiar, happy and dynamic context.

50Annual Report 2007 50 51

9292

Bci’s mascots allow us to get closer to our customers

new fi gures...

525209. Graphic view of performance

Sector performance

Total bank loans at the end of December 2007 amounted to Ch$63.7 billion, with a 20.6% growth over 2006, while sector earnings were Ch$969 billion, with a return on capital of 16.2% compared to 23.8% in the case of Bci.

The total assets of the system amounted to Ch$89.4 billion, an increase of 22.2% compared to December 2006. Risk-weighted assets for their part represented 71.0% of banks’ total assets, and 77.8% in the case of Bci explained by the operational management of the Bank’s basic assets, which mainly comprise normal-risk loans.

The sector’s equity resources, comprising basic capital, subordinated bonds and additional allowances, amounted to Ch$7.7 billion, 19.0% more than at December 2006, while Bci increased these resources by 22.1%, mainly due a greater capitalization of earnings of 2006.

The following table shows the principal figures for the sector, compared with Bci, the Bank’s market shares and the increase in the volume of transactions in 2007.

52Annual Report 2007 52 53

THE BANKING SYSTEM PRODUCED A

RETURN ON CAPITAL OF 16.2% WHILE THE PROFITABILITY OF BCI WAS 23.8%

The loans of Bci have shown an average annual weighted growth of 20.2% in recent years, increasing its market share by 4.5 percentage points.

(millions of pesos) Sector Bci Bci share Volume increasesSector Bci

Total consolidated assets 89,401,281 10,802,046 12.1 22.2 17.6

Risk-weighted assets 63,475,799 8,408,388 13.3 22.5 20.4

Weighted average % 71.0 77.8

Basic capital 5,973,776 568,559 9.5 24.3 21.6

Effective equity 7,731,562 873,947 11.3 19.0 22.1

Net income 969,301 135,376 14.0 8.3 12.7

545409.

60%

50%

40%

30%

20%

10%

0%

milli

ons

of p

esos

Graphic view of performance

14%

12%

10%

8%

6%

4%

2000 2001 2002 2003 2004 2005 2006 2007

2000 2001 2002 2003 2004 2005 2006 2007

The following shows Bci’s performance since 2000:

The net income for 2007 amounted to Ch$135,376 million, an increase of 12.7% over that of 2006 and a 4.7 percentage point higher market share between 2000 and 2007.

The efficiency ratio, measured as support costs to operating income, improved by 1.8 percentage points over 2006, thanks to a 19.05% increase in the net operating margin, compared to the 14.8% growth in support costs.

Results

% s

hare

Net income and its share of the system

net income share

Efficiency ratio

130,000117,000104,000

91,00078,00065,00052,00039,00026,00013,000

9.28%

9.21%

11.23%11.94%

13.14% 13.59%13.43%

14.00%

36,538

52,307 57,477

73,682

88,696

105,684

120,153135,376

61.49%

53.39%

52.96%

49.28%

50.99%

49.69%

49.82%

48.05%

54Annual Report 2007 54 55

2000 2001 2002 2003 2004 2005 2006 2007

30%

25%

20%

15%

10%

5%

0%

14%

12%

10%

8%

6%

4%

2%

0%

2000 2001 2002 2003 2004 2005 2006 2007

The return on capital was 23.81% in2007, indicating that Bci is one of the most profitable banks in the system, which registered just 15.7% as a whole.

Bci’s annual weighted loan growth over the last seven years was 20.2%, and its market share grew by 4.5 percentage points in that period.

Market share

Total loans (without subsidiaries)

Milli

ons

of p

esos

% s

hare

Bci System

Return on capital (ROE)

ShareLoans

8,000,000

7,200,000

6,400,000

5,600,000

4,800,000

4,000,000

3,200,000

2,400,000

1,600,000

800,000

0

12.70%

17.68%

14.39%

16.55%

16.91%

17.85%

18.61%15.70%19.96%

23.78%

22.57%

25.60%26.30%

26.74%

25.70%23.81%

7.90%

8.97%

10.38%11.20%

11.77%

12.49% 12.51%12.38%

2,158,1892,679,108

3,246,8263,676,265

4,396,208

5,525,888

6,544,576

7,840,213

565609. Graphic view of performance

2000

2001

2002

2003

2004

2005

2006

2007

2000

2001

2002

2003

2004

2005

2006

2007

5.0%

4.5%

4.0%

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

3.01% 3.15%

3.60%3.93%

4.19%

4.61% 4.50%4.72%

16%

14%

12%

10%

8%

6%

4%

2%

0%

Continuing the constant growth trend of recent years, the market share of commercial loans rose to 14.6%, twice that of the year 2000.

Retail market loans, including those of Banco Nova de Bci, attained a market share of 4.7%

Retail banking loans

Commercial loan portfolio

7.19%

8.66%

10.51%

12.21%

13.34% 13.73%14.39% 14.60%

56Annual Report 2007 56 57

2000

2001

2002

2003

2004

2005

2006

2007

12%

10%

8%

6%

4%

2%

0%

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0

20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%

2000 2001 2002 2003 2004 2005 2006 2007

Checking accounts

Mortgage loans achieved a market share of 9.8%, with a rise of 2.1 percentage points over 2000.

Bci has consistently continued to increase the number of active checking accounts, with a 55.1% growth over the last seven years. Its market share has declined since 2005, mainly due to this service being directed to income segments higher than those of other banks, a policy that was changed in 2007.

No. o

f che

ckin

g ac

coun

ts

Mortgage loans

% m

arke

t sha

re

Share

Number of checking accounts

7.69% 8.04%

9.03%9.54% 9.42% 9.48%

8.96%9.77%

14.89% 15.40% 15.88%16.93%

17.26%16.80% 15.57%

15.33%

217,544226,928

243,735263,358

282,876

294,769 307,226

337,460

5858Graphic view of performance09.

2000

2001

2002

2003

2004

2005

2006

2007

2000 2001 2002 2003 2004 2005 2006 20070.0%

0.5%

1.0%

1.5%

2,0%

There are currently no official statistics showing the levels of bank sight accounts (Prime) which operate through drawings at automated teller machines, commonly called “electronic check-books”, a product created by Bci in 1989. In recent years, the number of Prime accounts has increased by 263.9% and represents 2.6 times the number of checking accounts.

Bci has been known for maintaining a constant growth in loans but with controlled risk, as can be seen by the overdue to total loans ratio where Bci has a level below that of the banking system.

Number of sight accounts (Prime)

Risk

Bci System

Overdue loans to total loans

1,000,000

900,000

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0

245,653319,288 340,478

456,598

590,194

806,430855,115 893,961

1.91%

1.71%1.90%

1.66%

1.22%

0.92%

0.75%

0.76%

0.68%

0.84%

0.72%

0.94%1.12%1.10%

1.38%

1.79%

58Annual Report 2007 58 59

Allowances / overdue loans

Charge for doubtful loan allowances

2000

2001

2002

2003

2004

2005

2006

2007

2000

2001

2002

2003

2004

2005

2006

2007

2.5

2.0

1.5

1.0

0.5

0.0

2.5

2.0

1.5

1.0

0.5

0.0

This ratio shows the degree of cover of the allowances made to protect estimated losses on the basis of the overdue loan portfolio. It includes allowances made for the loan portfolio, classified individually or by groups, including the normal risk portfolio. Bci has also made additional allowances which are determined according to its risk evaluation models.

The tendency of banks, and of Bci in particular, has been to improve their risk control systems. This has translated into a reduction in the levels of allowances charged in relation to their loans. The bank coverage extension programs followed by banks has increased the level of the charge in recent years, Bci maintaining this ratio at a lower level than that of the system.

System Bci

System Bci

1.461.34

1.471.32 1.30

1.54

1.32

1.49

1.68

2.07

1.791.99

2.15

1.51

1.94

2.11

1.66%

1.24%1.37%

0.98%

1.43%

1.02%

1.26%1.19%

1.02% 1.00%0.91%

0.78%

1.01%

1.25%

1.00%

0.85%

6060

10. Risk management

BCI MAINTAINS STRICT CONTROLS OVER CREDIT, FINANCIAL, LIQUIDITY AND OPERATIONAL RISKS

Corporate Risk Area is responsible for the management of risk in all its aspects, i.e. credit, financial, liquidity and operational risks.

Credit risk

The Corporate Risk Area in 2007, jointly with the commercial areas, evaluated close to 400 projects from the different sectors of the Chilean economy like electricity generation, industry, mining and infrastructure, amounting to over US$2,000 million.

In the evaluation of international risk, the economic, political and social situation was examined for all those nations to which Bci provides financing, in order to limit the risk that might derive from these transactions.

In 2007, Bci strengthened its support for care of the environment, financing projects related to the sustainable management of natural resources in accordance with standards set by the pertinent authorities or competent organizations in this matter.

The Bank’s participation in this sense has made it an active player among the banks and also made it a good benchmark of credit risk policies.

With respect to consumer and mortgage loans, an allowances model was applied in 2007 based on expected losses, estimated according to the statistical repayment behavior of debtors and the probability of their defaulting. The prediction level of this program is continually revised.

60Annual Report 2007 60 61

The methods used reflect the best international practices and, based on these, Bci controls its balance sheet risk by using the following tools:

Financial risk

The Bank’s Financial Area manages in a centralized manner the funds obtained nationally, and their use in the different products and asset transactions. It also manages the funds that international banks provide to Bci and their employment in the different financing transactions made in foreign currency and for foreign trade.

This area also acts directly in the holding and trading of derivative products and financial instruments and controls the balance between assets and liabilities, the clearing, technical reserve and the results that the financial operations should produce.

The methods used reflect the nest international practices and, based on these, Bci controls the match risk by using the following tools:

a) Spread at Risk (SaR) which quantifies the impact on profits produced by a specific movement in short-term interest rates over a twelve-month horizon.

b) Market Value Sensitivity (MVS) which quantifies the effect on the economic value of the equity produced by fluctuations in long-term interest rates on the Bank’s total assets and liabilities.

The Bank’s own portfolio of financial instruments available for trading is controlled by the Value at Risk (VaR) model which calculates the potential losses in the market value of the portfolio compared to the maximum limits set by the board.

6262Risk management10.

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

At the same time, the regulatory models established by the Central Bank of Chile and the Superintendecy of Banks and Financial Institutions are used, called X1 and X2, which are equivalent to the internal Spread at Risk and Market Value Sensitivity models.

Apart from these tools, the Bank has a centralized management and control of the effectiveness of the financial hedges in order to mitigate the effect that these risks might produce.

Liquidity risk

Control of the liquidity position is carried out through a model structured in accordance with the regulations of the Central Bank of Chile, which permits classifying both debtors and depositors and creditors, as retail or wholesale.

The model assigns a part of the cash flows corresponding to the first category mentioned to temporary bands different to those that should be assigned according to their contractual maturity date, on the basis of the behavior foreseen for such flows. This form of measurement is called the liquidity position, calculated on an adjusted basis.

The Bank publishes the liquidity position on its web site, calculated on contractual and adjusted bases, on the last day of each calendar quarter.

Monthly fluctuations in VaR 2007

VaR local currency VaR foreign currency Total VaR

Mill

ions

of p

esos

62Annual Report 2007 62 63

Regarding the security of customer, business and strategies information, Bci has information security policies and guidelines, with computer tools for the detection of resources, followed in accordance with the regulations imposed by the ISO 27001 standard, already certified for the Bank.

Finally, the Bank annually carries out a management self-evaluation process that covers eight types of control over the same number of areas responsible for the development of operations and their vigilance.

Operational risk

Given the importance of a proper management and control of operational risks, and directly related to the criteria established by the Basel Committee, the Bank formed a structure with an adequate composition of human, technical and financial resources. Specialized units were created in the business, technological, regulatory, human, business continuity, asset laundering and management self-evaluation processes.

With respect to controls of asset laundering and financing of terrorism, the Bank periodically trains its staff through the annual training programs, coupled with a rigorous control of the procedures supported by a management and monitoring model that uses technological instruments for detecting irregular transactions. The model permits follow-up, controls and action plans segmented by type of customer and risk.

ANNUALLY, BCI CARRIES OUT A SELF-EVALUATION PROCESS THAT EXTENDS TO EIGHT TYPES OF CONTROLS

64641996Annualreports

On five occasions, we placed first in the Annual ReportCompetition organized annually by PricewaterhouseCoopers and Editorial Gestión.

64Annual Report 2007 64 65

9696

new incentives...We are motivated to maintain our reporting to be accurate, valid, reliable and relevant to the reader.

6666

11.

Benjamín Vargas AmunáteguiGeneral Manager Bci Asesoría Financiera S.A.

Ricardo Victorero CastañoGeneral Manager Bci Corredor de Bolsa S.A.

Nelson Rojas MenaGeneral Manager Bci Corredores de Seguros S.A.

Héctor Valenzuela LambManager Bci Administradora General de Fondos S.A.

Germán Acevedo CamposGeneral Manager Bci

Gerardo Spoerer HurtadoGeneral Manager Bci Administradora de Fondos Mutuos S.A.

Galo Beltrán RubiraGeneral Manager Servicios de Normalización y Cobranza -Normaliza S.A.

Lily Justiniano BerardiGeneral Manager Análisis y Servicios S.A.

Subsidiary companies

66Annual Report 2007 66 67

(millones de pesos)

The subsidiary companies have generated large transaction volumes and contributed Ch$23,607 million to Bci’s net income

A group of companies belonging to Bci, formed to carry out the various activities permitted by the General Banking Law, commonly called business complementary as they considerably increase the services that the Bank offers its customers.

These companies and the offices established in Chile and abroad make up the services network known as Bci, Corporación de Soluciones Financieras.

The subsidiary companies in 2007 generated large transaction volumes and contributed Ch$23,607 million to Bci’s net income, as the following summary shows:

Subsidiary Total assets Net

income Assets managed

AmountBci Corredores de Bolsa S.A. 380,010 2,034

Bci Administradora de Fondos Mutuos S.A 30,998 5,765 31 1,400,064(*)

Bci Factoring S.A. 349,561 6,859

Bci Corredores de Seguros S.A. 7,153 5,833

Bci Securitizadora S.A. 1,319 725 8 322,869 (**)

Bci Asesoría Financiera S.A. 1,451 336

Bci Administradora General de Fondos S.A. 423 (133) 2 8,432 (*)

Servicios de Normalización y Cobranza - Normaliza S.A. 4,627 2,189

Análisis y Servicios S.A. 1,975 (1)

Total 777,517 23,607

(*) daily average (**) sum of the separate equities

6868

Subsidiary companies11.

The following are brief descriptions of the business of the subsidiary companies:

Bci Corredor de Bolsa S.A.

Functioning since 1987, this specializes in the trading of Chilean and foreign fixed and variable-income financial instruments. It offers custody and investment portfolio management services, operates on the country’s stock exchanges and is connected to the principal stock markets abroad.

Bci Administradora de Fondos Mutuos S.A.

With 20 years in the market, this company is responsible for managing 31 mutual funds structured in various securities portfolios, including the management of short-term debt instruments for the investment of transitory cash surpluses in pesos or dollars, long-term debt instruments for more permanent investments and portfolios consisting of Chilean or foreign equities, generally with a guarantee for the amount initially invested.

Bci Factoring S.A.

A company constituted in 1994 whose object is to purchase debt instruments of any kind from businesses that need to maintain their short-term liquidity. It has offices in Santiago and the country’s largest cities, plus an international network (IFC) that enables it to offer its services abroad with a coverage of over 60 countries.

Bci Corredores de Seguros S.A.

This has been operating since 1998 in the brokerage of general, life and pension insurance policies, with any of the insurance companies established in Chile. In 2007, it was merged with Genera Corredores de Seguros Ltda., part of the Banco Conosur group acquired by Bci.

Bci Securitizadora S.A.

Formed in 2001, its object is to acquire commercial loans which are packaged in the company, separated from its own assets, against which short or long-term bonds are issued for placement in the market.

68Annual Report 2007 68 69

Bci Asesoría Financiera S.A.

This company started business in 1993. Its basic function is to provide advice in the study, analysis, evaluation and search for alternative sources of finance for companies, and the restructuring of their debt, or in negotiations for acquiring, capitalizing, selling or merging companies. It also advises on the issue and placement of company shares, bonds and debentures and recommends the investment of funds in certain instruments in the Chilean and international capital markets.

Bci Administradora General de Fondos S.A.

This company was constituted in 2006 and, as its name indicates, manages various classes of funds including its own mutual funds, investment funds, foreign capital investment funds, funds for housing and any other type of fund that is regulated by the Superintendency of Securities and Insurance.

Servicios de Normalización y Cobranza - Normaliza S.A.

This was formed in 1998 to provide extra-judicial recovery services of any debt obligation in favor of Bci. In 2007, it was merged with Servicios de Cobranza Externa Ltda., part of the Banco Conosur group acquired by Bci.

Análisis y Servicios S.A.

This started business in 1996. Its main function is to gather and pre-evaluate economic information on potential customers as support for the placing of products and services offered by the Bank.

70702007Transaction routings

In our eagerness for innovation, we have become known for always being in the forefront with innovative services. This year, we added Web Kiosk, Banca Móvil and Customers Blog to the long list of channels for making transactions. Services for modern people that make Bci a different type of bank.

70Annual Report 2007 70 71

0707

new attention channels...Freedom of action for innovative people.

7272

12. National and international presence

THE OFFICE NETWORK THAT PROVIDES BANKING SERVICES IN CHILE INCREASED TO A TOTAL OF 273

Chilean banking service offices

In the last two years, Bci has opened 40 branches and two cash agencies in different parts of Chile, increasing the banking services office network to 273 as of December 31, 2007.

A good number of offices are open for an extended period, from 8 a.m. to 4 p.m., providing customers and the public with the services that Bci offers, an hour before normal working hours and up to 2 hours later than the obligatory time period establis-hed by the Superintendency of Banks and Financial Institutions.

The Bci office network attends the mass retail banking market for individuals who receive financing mainly through consumer loans and who have accounts operated by debit cards, called Prime accounts, plus the usual checking accounts and other services and products, as most of Bci’s offices do.

Office network Bci Banco Nova de Bci Total

Branches 164 70 234

Commercial platforms 18 18

Preferential banking offices 2 2

Cash agencies 15 3 18

Automatic branch (*) 1 1

200 73 273

(*) with self-sufficient electronic devices.

72Annual Report 2007 72 73

Office network Bci Banco Nova de Bci Total

Branches 164 70 234

Commercial platforms 18 18

Preferential banking offices 2 2

Cash agencies 15 3 18

Automatic branch (*) 1 1

200 73 273

(*) with self-sufficient electronic devices.

Many Bci offices are open from 8 a.m. to 4 p.m., three hours more than the obligatory period for attending the public.

Regional ManagementRetail Banking

Balduino Valdivia LizanaRegional North

Héctor Tello FarfanRegional Center North

José Manuel Morera HierroRegional 5th Region Richard Calvert SanhuezaRegional Santiago Center North

Paula García CuestaRegional Santiago

Vivian Nazal zedánRegional Santiago Center

Eduardo Rendich SillardRegional Santiago East

Francisco Allende SolariRegional Santiago South

Luis Poblete MuñozRegional Center South

Roberto Montalva GonzálezRegional 8th & 9th regions

Jorge Obregon KuhnRegional South

Regional Management Businesses Banking

Santiago Castillo FloresRegional North & South

Jaime Donoso SchulbachRegional Santiago

Regional Management Corporate Banking

Mario Vial Infante Regional North

Javiera Ramírez CollyerMedium Companies

Mónica Hidalgo LanderosRegional West

Claudia Rivera TavolaraRegional East

Cristian Daza BaquedanoRegional Center South

Alejandro Cabezas LafuenteRegional South

7474

12.

88

24

Huechuraba

4Conchalí

1Renca

1

Pudahuel

1Estación Central

1

Maipú

5

Cerrillos

3

Santiago

23

Recoleta

1Providencia

10Ñuñoa

6

La Reina

1

Las Condes

20

Vitacura

5

Lo Barnechea

2

Peñalolén

2Macúl

1

La Florida

4

Puente Alto

4

Buin 2Melipilla 2Talagante 1Colina 3

El Bosque

1

La Cisterna

1

San Bernardo

2

San Miguel

3

San José de Maipo

1

San Joaquín

1

National and international presence

74Annual Report 2007 74 75

Bci

Almirante Latorre Altos de la FloridaAmérico Vespucio Antonio Varas ApoquindoAvenida MattaBase Aérea El BosqueBeaucheff Bilbao Boulevard Kennedy BuinCamino El Alba Cantagallo Cerrillos Cerro El Plomo Chicureo Ciudad EmpresarialClínica Las Condes Colina Edificio Corporativo El Carmen de Huechuraba El GolfEl Llano Escuela Militar Estación Central EstadoGrupo Fach (International Airport)

Huechuraba HuérfanosIrarrázaval Isabel la Católica Isidora Goyenechea La Cisterna La Concepción La Dehesa La Florida La Gloria La MercedLas Condes Las Tranqueras Los Trapenses Macul Maipú Maipú Centro

Maipú PajaritosMall Oeste Mall Tobalaba Mall Vespucio MatucanaMelipillaMiraflores MonedaNoruega ÑuñoaOficina CentralOnce de SeptiembrePadre HurtadoPanamericana Norte Paseo PuentePríncipe de GalesPlaza Almagro Plaza Atenas Plaza Baquedano Plaza Bulnes Plaza Egaña Plaza Italia Plaza Ñuñoa Peñalolén Piedra Roja Providencia Puente AltoQuilín Recoleta RencaRosario Norte San BernardoSan Diego San José de Maipo San MiguelSanta Elena Santa Lucía Santa María de ManquehueSeminario Teatinos Torre Sta. María Vitacura Vitacura OrienteWorld Trade Center

Banco Nova de Bci

AgustinasAhumadaApoquindo BuinEl FaroEstación CentralEstadoHuérfanosMaipúMall Arauco MaipúMall Plaza NorteMall Plaza OesteMall Plaza TobalabaMall Plaza VespucioMelipillaÑuñoaOrrego LucoPlaza EgañaProvidenciaPuentePuente AltoSan BernardoSan MiguelTalagante

Metropolitan Region Branches

7676

Coquimbo Region

12.

3

3

13

7

9

26

7

8

17

6

6

11

3

3

Arica and Parinacota Region

Tarapacá Region

Antofagasta Region

Atacama Region

Valparaiso Region

O’Higgins Region

Maule Region

Biobio Region

Araucanía Region

Los Ríos Region

Los Lagos Region

Aisén Region of General Carlos Ibañez del Campo

Magallanes and Antártica Chilena Region

National and international presence

76Annual Report 2007 76 77

Arica Arica North

Iquique Playa Brava

TocopillaAntofagastaAntofagasta North Avenida Brasil Mall Antofagasta CalamaMall Calama Chuquicamata Caldera Chañaral Copiapó El Salvador Vallenar La SerenaCoquimbo HuanhualíOvalle Los AndesSaladillo La Calera San Felipe AlmendralQuillota QuilpuéVilla Alemana CachaguaCon-Con Reñaca Libertad Viña del MarValparaisoSan AntonioLlo-Lleo

El CobreRancagua Rancagua II San Fernando Santa Cruz Curicó Mall CuricóLinaresMall MauleTalca

Cabrero Chillán Concepción Concepción Plaza Pedro de Valdivia Plaza El Trébol Talcahuano Base Naval TalcahuanoSan Pedro de la Paz Los Angeles Avenida Alemania Temuco Villarrica Pucón La UniónPanguipulli Valdivia

Osorno Llanquihue Puerto Varas Puerto Montt Puerto Montt Alto Ancud CastroQuellón CoyhaiquePuerto Aysén Punta Arenas Zona Franca (Punta Arenas)

Bci Banco Nova de Bci

76

46

Arica

Iquique

TocopillaAntofagastaCalamaMall AntofagastaMall Calama

CopiapóVallenar

La SerenaMall La SerenaCoquimboIllapelOvalle

La CaleraSan FelipeLos AndesQuillotaQuilpuéViña del Mar IViña del Mar IIValparaísoValparaíso CentroSan Antonio

RancaguaSan Fernando

CuricóLinaresTalca

ChillánConcepción IConcepción IIMall Plaza Del TrébolTalcahuanoCoronelLos Angeles

VictoriaTemuco

AngolValdiviaLa Unión

OsornoPuerto MonttCastro

Coyhaique

Punta Arenas

76

46

Regional branches, from north to south

7878

12. National and international presence

Bci Miami branch - USA

Grisel Vega - General Manager

Functioning since 1999, initially as an agency, this branch has maintained sustained growth, closing 2007 with assets of US$ 972.8 million, a 42.5% increase over 2006. Its liabilities, mainly of time deposits and loans from financial institutions, showed similar growth. It produced a net income of US$ 3.7 million, 62.7% higher than the year before.

Presence abroad

Bci maintained an active participation in 2007 in business carried out in other countries. After evaluating the risk of each country one by one, Bci assigned credit to 22 Latin American, 12 Asian, 8 Middle Eastern and African and 29 North American and European countries.

Despite the hurdles present in the Chilean and international environment, Bci thus managed to position itself in third place among banks established in chile in the ranking of foreign currency loans.

This was effectively based on foreign currency funds obtained by the Bank, particularly a syn-dicated loan in the foreign market of US$ 400 million, which had 19 international participant banks and was granted on excellent financial conditions.

The efficient contribution by the team of pro-fessionals in charge of the Bci offices abroad should also be mentioned.

78Annual Report 2007 78 79Bci assigned credit to 22 Latin American, 12 Asian, 8 Middle Eastern and African and 29 North American and European countries.

Representative offices

Bci has four representative offices abroad:

Lima, Peru, managed by Mónica Saba Chaluja

Sao Paulo, Brazil, managed by Fernando Flaquer

Mexico City, managed by Roberto Oilvieri

Hong Kong, China, managed by Antonio Gutiérrez del Alamo

These offices have carried out important work in strengthening commercial relations between Bci and the respective countries, particularly the financing of local companies and banks, with an emphasis on foreign trade business. In the case of Hong Kong, Bci’s presence has permitted the development of business with other Asian countries like Thailand, Philippines, Korea and Taiwan.

Banco de Crédito del Perú

There has been a cooperation agreement between Bci and Banco de Crédito del Perú since 1995.

Under this agreement, in force now for 12 years, the chairman of BCP, Dionisio Romero Seminario, is a member of the board of Bci, while Luis Enrique Yarur Rey is a director of BCP. There has been an active commercial and technical assistance exchange between both institutions resulting from the agreement.

Other alliances

Banco Popular Español, to which Bci committed itself to direct financially Chilean companies that operate in Europe, has permitted the establishment of commercial relations with the parent companies of Spanish companies having a presence in Chile, Peru, Brazil, Mexico and the USA.

There is a cooperation agreement with Banco Internacional de Costa Rica for developing foreign trade with Chile and promoting reciprocal foreign investment.

There is also a cooperation agreement with Banco Credicoop Ltda., Argentina, which has permitted an effective commercial exchange with companies installed in Chile and Argentina.

80802007Security of information

Bci is the first bank in South America to incorporate the ISO 27001model as the data protection system for our customers, because theinformation we maintain on each customer is our most precious asset.

80Annual Report 2007 80 81new guarantees...Risks is reduced when uncertainty is reduced.

82

13. Consolidated Financial Statements

The consolidated financial statements include the following balances:

• Banco de Crédito e Inversiones• Bci Sucursal Miami• Bci Corredor de Bolsa S.A.• Bci Administradora de Fondos Mutuos S.A.• Bci Factoring S.A.• Bci Corredores de Seguros S.A.• Bci Securitizadora S.A.• Bci Asesoría Financiera S.A.• Bci Administradora General de Fondos S.A.• Servicios de Normalización y Cobranza - Normaliza S.A.• Análisis y Servicios S.A. (Proservice)

Consolidated Financial Statements 2007 82 83

Ch$ - Chilean pesos ThCh$ - Thousands of Chilean pesosMCh$ - Millions of Chilean pesosUS$ - United States dollarsThUS$ - Thousands of US dollarsUF - Unidades de Fomento (an official inflation-indexed monetary unit)

CONTENTS

Consolidated balance sheet 84Consolidated statement of income 86Consolidated statement of cash fl ows 87Notes to the consolidated fi nancial statements 88Report of the independent accountants 107

Those interested may find the consolidated financial statements of Bci, of its respective subsidiaries and the corresponding opinion by the external auditors at www.bci.cl.

8484

ASSETS As of December 31 2007 2006 MCh$ MCh$CASH AND DUE FROM 649,082.3 926,818.6

LOANSCommercial loans 4,013,437.4 3,450,814.3Foreign trade financing 577,051.3 705,240.1Consumer loans 877,702.8 826,469.2Mortgage loans 265,736.5 337,844.9Leasing contracts 314,026.7 269,470.5Contingent loans 684,712.4 653,848.9Other current loans 1,541,532.4 1,165,898.6Past-due loan portfolio 54,592.3 59,352.9

Total loans 8,328,791.8 7,468,939.4Allowance for doubtful assets (106,316.4) (91,849.9)

Total net loans 8,222,475.4 7,377,089.5

OTHER CREDIT OPERATIONSLoans to financial institutions 37,198.9 -Loans under repurchase agreements 63,710.0 55,733.5

Total other credit operations 100,908.9 55,733.5

TRADING INSTRUMENTS 626,824.5 562,145.7

INVESTMENT INSTRUMENTSAvailable for sale 392,859.8 346,400.1

Total investment instruments 392,859.8 346,400.1 FINANCIAL DERIVATIVE CONTRACTS 208,611.6 79,835.1

OTHER ASSETS 294,155.4 308,286.7

PREMISES, EQUIPMENT AND INVESTMENTSPremises & equipment 148,547.4 143,480.6Investments in companies 35,839.7 25,163.9

Total premises, equipment & investments 184,387.1 168,644.5

Total assets 10,679,305.0 9,824,953.7

Consolidated Balance Sheet13.

8484 85Consolidated Financial

Statements 2007

LIABILITIES & SHAREHOLDERS’ EQUITY As of December 31 2007 2006 MCh$ MCh$DEPOSITS & OTHER OBLIGATIONS

Demand deposit accounts 1,454,870.6 1,334,582.4Time Deposits & other borrowings 4,828,309.4 4,402,333.2Other sight or time obligations 280,593.0 271,133.0Obligations under repurchase agreements 254,464.1 455,018.1Mortgage-funding notes 240,055.2 286,905.6Contingent liabilities 687,654.2 655,592.6

Total deposits & other obligations 7,745,946.5 7,405,564.9

BONDS PAYABLEBonds 380,575.9 164,397.3Subordinated bonds 341,227.2 277,440.4

Total bonds payable 721,803.1 441,837.7

BORROWINGS FROM FINANCIAL INSTITUTIONS AND CENTRAL BANK OF CHILE

Central Bank of Chile restructuring lines of credit 239.3 490.0Other obligations with Central Bank of Chile 34,593.0 43,138.3Loans from financial institutions in Chile 28,703.9 112,884.9Foreign borrowings 1,060,497.6 851,052.5Other obligations 61,568.9 187,528.6

Total loans from financial institutions 1,185,602.7 1,195,094.3

FINANCIAL DERIVATIVE CONTRACTS 216,833.4 72,436.1

OTHER LIABILITIES 105,183.5 78,938.5

Total liabilities 9,975,369.2 9,193,871.5

MINORITY INTEREST 1.5 1.4

NET SHAREHOLDERS’ EQUITYCapital & reserves 569,791.3 498,763.6Other equity accounts (1,232.8) 3,273.3Net income for the year 135,375.8 129,043.9

Total net shareholders’ equity 703,934.3 631,080.8

Total liabilities & shareholders’ equity 10,679,305.0 9,824,953.7

8686

For the years ended December 31

2007 2006 MCh$ MCh$

OPERATING RESULTSInterest & indexation income 841,290.4 635,794.7Gain from price differences 444,626.9 426,242.9Fee income 131,711.4 126,577.9Net exchange gain 28,323.8 -Other operating revenue 19,712.1 11,131.7

Total operating revenue 1,465,664.6 1,199,747.2

Interest & indexation expense (482,150.0) (321,317.7)Loss from price differences (476,105.7) (417,031.4)Commissions paid (35,195.7) (31,809.6)Net exchange loss - (3,514.2)Other operating expenses (2,897.6) (9,502.3)

Gross margin 469,315.6 416,572.0

Salary & Employee Benefits (123,802.7) (115,929.0)Administrative & other expenses (89,804.1) (88,057.2)Depreciation & amortization (19,459.8) (15,938.6)

Net margin 236,249.0 196,647.2

Allowances for doubtful assets (53,869.6) (33,985.7)

Operating result 182,379.4 162,661.5

NON-OPERATING RESULTSNon-operating income 12,256.0 6,359.5Non-operating expenses (12,847.8) (11,655.9)Result of investments in companies (584.7) 1,231.6Price-level restatements (19,110.8) (5,318.7)

Income before income tax 162,092.1 153,278.0

Income tax (26,715.7) (24,233.7)

Income after income tax 135,376.4 129,044.3

Minority interest (0.6) (0.4)

NET INCOME FOR THE YEAR 135,375.8 129,043.9

Consolidated Statement of Income13.

8686 87Consolidated Financial

Statements 2007

For the years ended December 31

2007 2006 MCh$ MCh$

CASH FLOWS FROM OPERATING ACTIVITIESNet income for the year 135,375.8 129,043.9Gain on sale of investments (8,407.0) -Gain on sale of premises & equipment (160.7) (1,094.7)Minority interest 0.6 0.4Decrease (Increase) in income not representing cash flows:

Depreciation & amortization 19,459.8 15,938.5Allowances for doubtful assets 53,869.6 33,985.7Provision for changes in market value investments (6,431.6) (70.0)Net income from investments in companies 584.7 (1,231.6)Net gain on sale of assets received in lieu of payment (6,980.2) (3,244.4)Write-off of assets received in lieu of payment 1,181.9 1,154.4Price-level restatements 19,110.8 5,318.7Income tax & deferred taxes 26,715.8 24,233.7Other decrease (2,608.4) (34,756.8)Net increase (decrease) in other assets & liabilities (12,000.9) 9,665.0

Cash provided by operating activities 219,710.2 178,942.8

CASH FLOWS FROM INVESTING ACTIVITIES Net increase in loans (792,457.6) (1,125,496.0)Net (increase) decrease in investments (90,551.9) 310,725.5Purchases of premises & equipment (16,781.1) (35,822.3)Sales of premises & equipment 192.4 2,613.7Investments in companies (18,744.8) (11,069.3)Sale of investments in companies 15,373.1 2.4Dividends received on investments in companies 1,463.4 1,482.2Sale of assets received in lieu of payment 12,675.5 2,949.4Net change in other assets & liabilities 40,348.9 14,958.1

Cash used in investment activities (848,482.1) (839,656.3)

CASH FLOWS FROM FINANCING ACTIVITIESIncrease in checking account balances 120,289.0 155,123.5Increase in deposits & borrowings 312,972.0 617,709.3Increase (decrease) in other sight or time obligations 9,464.6 (37,950.1)(Decrease) increase in obligations under repurchase agreements (197,206.1) 35,645.7(Decrease) increase in short-term foreign borrowings (167,083.3) 96,921.9Issue of mortgage-funding notes 398.1 20,215.9Redemption of mortgage-funding notes (51,655.5) (67,208.7)Decrease in other short-term liabilities (89,481.3) (12,002.3)Loans received from Central Bank of Chile (long term) 49.1 441.3Repayment of loans from Central Bank of Chile (long term) (311.7) (1,077.2)Bond issues 270,472.4 125,541.3Bond redemptions (28,433.6) (27,662.7)Foreign borrowings at long term 1,429,863.2 926,848.8Repayment of long-term foreign borrowings (1,058,490.7) (912,462.6)Other long-term loans obtained 379,759.3 182,323.6Repayment of other long-term loans (505,558.4) (47,681.0)Share issue - 233.7Dividends paid (58,016.2) (54,096.7)

Cash provided by financial activities 367,030.9 1,000,863.7

Net increase (decrease) in cash & cash equivalent (261,741.0) 340,150.2Effect of inflation on cash & cash equivalents (15,995.3) (2,324.9)CHANGE IN CASH & CASH EQUIVALENTS DURING THE YEAR (277,736.3) 337,825.3CASH & CASH EQUIVALENTS, BEGINNING OF YEAR 926,818.6 588,993.3CASH & CASH EQUIVALENTS, END OF YEAR 649,082.3 926,818.6

Consolidated Statement of Cash Flows

8888

Notes to the consolidated financial statements13.

NOTE 1SIGNIFICANT ACCOUNTING PRINCIPLES APPLIED

a) Information provided

These consolidated financial statements have been prepared in accordance with the accounting standards of the Superintendencia de Bancos y Instituciones Financieras (SBIF) (the banking regulatory authority), which, in the case of the present statements, conform with accounting principles generally accepted in Chile.

The preparation of the financial statements requires management to make certain estimates and assumptions that affect the eported balances of assets and liabilities, and the showing of contingencies with respect to assets and liabilities at the date of the financial statements, as well as the revenues and expenses during the year.The actual results may differ from these estimates.

b) Consolidated subsidiaries

The consolidated financial statements include the assets, liabilities and results of the Bank, Miami branch and the following subsidiaries:

Holding

Direct Indirect

Subsidiary 2007 2006 2007 2006

Análisis y Servicios S.A. 99.00 99.00 1.00 1.00

BCI Administradora de Fondos Mutuos S.A. 99.90 99.90 0.10 0.10

BCI Asesoría Financiera S.A. 99.00 99.00 1.00 1.00

BCI Corredor de Bolsa S.A. 99.95 99.95 0.05 0.05

BCI Corredores de Seguros S.A. ex - Genera Corredores de Seguros Ltda. (1) 99.00 99.00 1.00 1.00

BCI Factoring S.A. 99.97 99.97 0.03 0.03

BCI Securitizadora S.A. 99.90 99.90 - -

Banco de Crédito e Inversiones Sucursal Miami 100.00 100.00 - -

BCI Administradora General de Fondos S.A. 99.90 99.90 - -

Servicios de Normalización y Cobranza Normaliza S.A. ex - Servicios de Cobranza Externa Ltda. (2) 99.90 99.90 0.10 0.10

BCI Corredores de Seguros S.A. (1) - 99.90 - 0.10

Compañía de Normalización de Créditos - Normaliza S.A. (2) - 99.00 - 1.00

8888 89Consolidated Financial

Statements 2007

(1) On June 1, 2007, the Bank sold to Genera Corredores de Seguros Ltda. its 99% outstanding stock in BCI Corredores de Seguros S.A. On the same date, Genera Corredores de Seguros Ltda. merged with BCI Corredores de Seguros S.A., changed its name and became a closely-held corporation with the name of BCI Corredores de Seguros S.A.

(2) On May 8, 2007, the Bank sold to Servicios de Cobranza Externa Ltda. its 99% outstanding stock in Compañía de Normalización de Créditos Normaliza S.A. On the same date, Servicios de Cobranza Externa Ltda. merged with Compañía de Normalización de Créditos Normaliza S.A., changed its name and became a closely-held corporation with the name of Compañía de Normalización de Créditos Normaliza S.A.

The combined assets and revenues of the subsidiaries represent 2.45% (3.75% in 2006) and 5.12% (8.06% in 2006) respectively of the consolidated financial statements.

The effects of unrealized results arising from transactions with the subsidiaries have been eliminated and the participation of minority investors is shown as Minority interest in the statement of income.

For consolidation purposes, the financial statements of the Miami branch have been translated to Chilean pesos at the exchange rate of Ch$ 497.85 (Ch$ 534.43 in 2006) per US dollar, in accordance with the terms of Technical Bulletin No.64 of the Chilean Institute of Accountants relating to the valuation of investments abroad in economically-stable countries.

c) Interest and Indexation Adjustments

Loans, investments and obligations include their respective interest and indexation adjustments accrued to the year-end.

However, the Bank has followed a conservative policy of suspending the accrual of interest and indexation adjustments on past due and doubtful outstanding loans.

d) Price-Level Restatements

Shareholders’ equity, premises, equipment and investments and other non-monetary balances have been restated based on variations

in the consumer price index. These restatements resulted in a net charge to income of MCh$ 18,110.8 (MCh$ 5,318.7 in 2006). Items in the Statement of income have not been restated.

The figures for 2006 have been restated by 7.4% and certain reclassifications have been made for comparison purposes.

e) Foreign Currencies

Foreign currency assets and liabilities of the Bank are shown at their equivalent values in Chilean pesos calculated at the exchange rate of Ch$ 497.85 per US$ 1 as of December 31, 2007 and the subsidiaries regulated by the SBIF at the exchange rate informed by this of Ch$495.82 per US$ 1. As of December 31, 2006, the foreign currency assets and liabilities of the Bank and its subsidiaries regulated by the SBIF were shown at the informed exchange rate of Ch$ 534.43 per US$ 1.

These exchange rates do not differ significantly from the exchange rate applied by the subsidiaries regulated by the Superintendency of Securities and Insurance.

The charge to income of MCh$ 28,323.8 (charge of MCh$ 3,514.2 in 2006) relates to the net exchange gain/loss, including both the results of foreign exchange trading and the effects of the exchange rate on foreign currency assets and liabilities.

f) Trading instruments

Trading instruments correspond to those acquired with the intention of making gains from short-term price fluctuations or through trading margins, or which are included in a portfolio where there exists a pattern of taking short-term gains.

Trading instruments are shown at their fair value according to market prices at the closing of the balance sheet. Gains or losses deriving from adjustments to their fair market value, and also the results of their trading activities, are included in Gain (loss) from pricing differences in the statement of income. Accrued interest and indexation adjustments are shown as Income from interest and indexation adjustments.

9090

All purchases and sales of securities for trading that should be delivered within the term established in market regulations or customs are booked on the date of trading which is the date that commits the purchase or sale of the asset. Any other purchase or sale is treated as a forward until its liquidation.

g) Financial derivative Products

Financial derivative contracts, which include foreign currency and Unidades de Fomento forwards, interest-rate futures, currency and interest-rate swaps and other derivative instruments, are shown initially in the balance sheet at cost (including trading costs) and are later valued at their fair value. The fair value is obtained from market quotes, discounted cash flow models and option valuation models. Derivative contracts are reported as an asset when its fair value is positive and as a liability when it is negative, under the heading Financial derivative contracts.

Certain derivatives included in other financial instruments are treated as separate derivatives when their risk and characteristics are not closely related to those of the principal contract and this is not recorded at its fair value with its unrealized gains and losses included in the results.

At the time of closing a derivative contract, this should be assigned by the Bank as a derivative instrument for trading or for hedging of its accounts.

Changes in the fair value of financial derivative contracts held for trading are included in Gain from pricing differences or Losses from pricing differences, as the case may be, in the statement of income.

If the derivative instrument is classified for hedging accounts, this corresponds to the hedging of the fair value of existing assets or liabilities, or of firm commitments.

The hedging relationship for purposes of accounting for the hedge should meet the following conditions: (a) at the time of starting the hedge, the hedging relationship has been formally documented; (b) it is expected that the hedge will be highly effective; (c) the effectiveness of the hedge can be measured in a reasonable way, and (d) the hedge is highly effective in relation to the risk hedged, in a continuous way or throughout the hedge relationship.

Certain transactions with derivatives that do not qualify for being booked as hedging derivatives are treated and reported as derivatives for trading, even when providing an effective hedge for the management of risk positions.

When a derivative covers exposure to changes in the fair value of an existing asset or liability item, the latter is recorded at its fair value in relation to the specific risk hedged. The gains or losses resulting from marking to fair value, both the item hedged and the hedging derivative, are shown in the results for the year.

If the item hedged in a fair value hedge is a firm commitment, the changes in fair value of the commitment with respect to the risk hedged are shown as assets or liabilities with effect in the results for the year. Gains or losses from the marking to fair value of the hedge derivative, are shown with effect on the results for the year. When an asset or liability is acquired as a result of the commitment, the initial recording of the asset or liability required is adjusted to incorporate the accumulated effect of the mark-to-market of the firm commitment that was recorded in the balance sheet.

When a hedge of fair value of interest rates is made and the item covered is an amount of currency instead of individual assets or liabilities, the gains or losses from measuring to fair value, both of the portfolio hedged and the hedge derivative, are recognized with effect on the results for the year, but the measurement of fair value of the portfolio hedged is shown in the balance sheet under Other assets and Other liabilities, according to the position of the portfolio hedged at a moment in time.

h) Investment instruments

Investment instruments are classified in two categories: Investments held to maturity or Investments available for sale. Investments held to maturity only include those instruments where the Bank has the capacity and intent to hold them until their maturity date. The Bank and its subsidiaries do not hold any of these kinds of instruments as of December 31, 2007 and 2006. The other investment instruments are considered as available for sale.

Investment instruments are initially shown at cost. Instruments available for sale are later valued at their fair value according to market prices or valued through the use of models. Unrealized gains or losses caused by a change in their fair value are shown as a charge or credit to equity accounts. When these investments are sold or matured or are impaired, the amount of the adjustments to fair value accumulated in the equity is transferred to results as Gains from pricing differences or Losses from pricing differences, as the case may be.

Notes to the consolidated financial statements13.

9090 91Consolidated Financial

Statements 2007

Investments held to maturity are shown at cost plus accrued interest and indexation adjustments, less allowances for impairment made when their booked amount is higher than the estimated recovery value.

Interest and indexation adjustments on Instruments available for sale are included under Interest and indexation adjustment income.

Purchase and sale of investment instruments that should be delivered within the term established by market regulations or standards are accounted for on the trading date in which they are committed. Other purchases or sales are treated as forwards until their liquidation.

i) Leasing contracts

This item shows the nominal value of all outstanding leasing contracts net of non-accrued interest and value added tax. Allowances are shown separately under Allowances for doubtful accounts.

Assets acquired for leasing operations are shown at their restated cost under Assets for leasing.

j) Premises and equipment

Premises and equipment are shown at restated cost and net of depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the respective assets.

k) Investment in companies

Shares and rights in companies in which the Bank owns at least 10% of the capital, or has the right to elect or appoint a director or manager, and shares quoted on stock exchanges, are valued using the proportional equity method.

Those investments representing a holding of less than 10% are valued at cost.

Foreign investments have been valued in accordance with Technical Bulletin No.64 of the Chilean Institute of Accountants, generating a conversion difference credit of MCh$ 1,313.7 as of December 31, 2007 (credit of MCh$ 151.0 in 2006) which has been fully absorbed by the exchange difference of the liabilities contracted in each year and assigned to hedge the exchange exposure to these investments.

Any increase or decrease in values are amortized over a period of10 years.

h) Allowances for Doubtful Assets

The Bank has made the necessary allowances to cover eventual losses on doubtful assets as required by the SBIF (Note 4). Allowances for loans are shown separately deducted from the respective asset balances, while the remaining assets are shown net of allowances.

The subsidiaries have made allowances based on the specific regulations applicable to them and a critical analysis of their doubtful assets.

m) Deferred taxes

The effects of deferred taxes caused by timing differences between the tax and financial treatment of accounts have been shown on an accrual basis taking into account the tax rate in force at the expected time of their reversal, in accordance with Technical Bulletin No.60 of the Chilean Institute of Accountants.

n) Staff vacations

The annual cost of staff vacations and benefits are shown on an accrual basis.

ñ) Statement of cash flows.

In accordance with specific regulations applicable to financial institutions, only the item Cash and Due From are considered as Cash and cash equivalents.

9292

NOTE 2TRANSACTIONS WITH RELATED PARTIES

In accordance with the General Banking Law and instructions issued by the SBIF, persons or entities are considered to be related if related to the ownership or management of the Bank, either directly or through third parties.

a) Loans granted to related parties.

Loans granted to related parties as of December 31 comprise the following:

(*) The collateral shown includes only those considered as valid for the calculation of individual credit limits as referred to in clause 84 of the General Banking Law, valued for these purposes in accordance with the instructions of the SBIF.

(**) Loans to individuals include only the obligations of persons whose debts are the equivalent of UF 3,000 or more.

Current portfolio Overdue portfolio Total Collateral (*)

2007 2006 2007 2006 2007 2006 2007 2006

MCh$ MCh$ MCh$ MCh$ MCh$ MCh$ MCh$ MCh$

To productive companies 96,564.3 46,230.2 - - 96,564.3 46,230.2 28,573.6 8,550.9

To investment companies 18,138.9 33,593.1 - - 18,138.9 33,593.1 - -

To individuals (**) 10,648.2 7,841.7 - - 10,648.2 7,841.7 6,785.5 5,937.8

Total 125,351.4 87,665.0 - - 125,351.4 87,665.0 35,359.1 14,488.7

13. Notes to the consolidated financial statements

9292 93Consolidated Financial

Statements 2007

b) Other transactions with related parties

The following transactions for amounts exceeding UF 1,000 were carried out with related parties:

All these transactions were carried out on market conditions prevailing at the time they were made.

Name Description Amount of Effect on results

transaction Charge Credit

MCh$ MCh$ MCh$

2007

Viña Morandé S.A. Purchase of inputs 116.4 97.8 -

Artikos Chile S.A. Outsourcing of supplies 427.1 358.9 -

Compañía de Formularios Continuos Jordan (Chile) S.A. Form printing 2,309.5 2,309.5 -

Galería de Arte Patricia Ready Ltda. Consultancy 56.4 56.4 -

Redbanc S.A. ATM operation 2,401.8 2,018.3 -

Vigamil S.A.C. Form printing 124.3 104.5 -

BCI Seguros Generales S.A. Insurance contracted 765.9 184.6 -

Operadora de Tarjetas de Crédito Nexus S.A. Cards processing 2,674.2 2,674.2 -

Servipag Ltda. Collection & payment of services 4,898.8 4,898.8 -

Transbank S.A. Credit card administration 4,042.9 4,042.9 -

2006

Viña Morandé S.A. Purchase of inputs 37.5 31.5 -

Artikos Chile S.A. Outsourcing of supplies 258.7 217.9 -

Compañía de Formularios Continuos Jordan (Chile) S.A. Form printing 1,978.4 1,978.4 -

Galería de Arte Patricia Ready Ltda. Consultancy 45.5 45.5 -

Redbanc S.A. ATM operation 2,601.3 2,186.0 -

Vigamil S.A.C. Form printing 116.1 97.5 -

BCI Seguros Generales S.A. Insurance contracted 1,994.6 816.9 -

Operadora de Tarjetas de Crédito Nexus S.A. Cards processing 2,375.9 2,375.9 -

Servipag Ltda. Collection & payment of services 4,118.6 4,118.6 -

Transbank S.A. Credit card administration 4,077.7 4,077.7 -

9494

NOTE 3INVESTMENTS IN COMPANIES

Investments in companies

The balance sheet shows Investments in other companies amounting to MCh$ 35,839.7 (MCh$ 25,163.9 in 2006) as follows:

(1) On December 21, 2007, the extraordinary shareholders’ meeting of Sociedad Administrador Financiero de Transantiago S.A. (AFT S.A.) agreed to the capitalization of loans granted by the shareholders, through a capital increase without issuance of shares, these retaining their percentage holdings. The amount capitalized by the Bank was MCh$ 2,040.0.

Investment

Bank’s holding Company Equity of the company Value Accrued results

2007 2006 2007 2006 2007 2006 2007 2006

% % MCh$ MCh$ MCh$ MCh$ MCh$ MCh$

AFT S.A. (1) 20.00 20.00 4,103.1 6,428.9 820.6 1,285.8 (2,505.2) (101.5)

Centro de Compensación

Automático ACH Chile 33.33 33.33 823.4 774.7 274.5 258.2 37.5 42.7

Sociedad Interbancaria de

Depósitos de Valores S.A. 7.03 7.03 1,224.4 1,147.1 86.1 80.6 16.7 0.2

Transbank S.A. 8.72 8.72 5,650.5 5,638.1 492.7 491.6 75.9 7.5

Redbanc S.A. 12.71 12.71 3,938.5 3,983.0 500.6 506.3 76.0 82.0

Servipag S.A. 50.00 50.00 3,923.2 3,250.1 1,961.6 1,625.1 336.5 275.6

Artikos Chile S.A. 50.00 50.00 461.6 352.9 230.8 176.5 54.4 46.6

Nexus S.A. 12.90 12.90 4,678.9 5,074.2 603.7 654.7 118.0 127.2

Empresas de Tarjetas

Inteligentes S.A. - - - - - - - (0.3)

Combanc S.A. 11.52 11.52 3,636.1 3,215.8 418.9 370.5 48.4 62.0

Bolsa de Comercio de Santiago 2.08 2.08 15,932.0 15,901.1 331.4 331.2 28.8 72.8

Cámara de Compensación -

Bolsa de Comercio de Santiago 0.15 0.15 2,534.0 2,551.5 3.8 3.8 0.0 0.0

Bolsa Electrónica de Chile 2.50 2.50 3,394.9 3,227.9 84.9 80.7 3.6 3.2

Bolsa de Comercio de Valparaíso 1.66 1.66 608.8 619.8 10.1 10.3 (0.2) (0.3)

Sub total 5,819.7 5,875.3 (1,709.6) 617.7

Shares or rights in other companies (2) 30,020.0 19,288.6 1,124.9 613.9

Total 35,839.7 25,163.9 (584.7) 1,231.6

(2) During 2007, the Bank acquired shares in Credicorp for an amount of MCh$ 16,888.5 (MCh$ 9,902.7 in 2006). It also sold shares during 2007, generating a gain of MCh$ 8,407.0.

13. Notes to the consolidated financial statements

9494 95Consolidated Financial

Statements 2007

NOTE 4ALLOWANCES

a) Allowances for doubtful assets

As of December 31, 2007, the Bank and its subsidiaries hold allowances for a total of MCh$ 106,408.6 (MCh$ 91,944.5 in 2006) to cover eventual losses.

The movement in the allowances referred to during the two years is as follows:

Allowances for

Assets recovered

Loans (leasing) Other assets Total

MCh$ MCh$ MCh$ MCh$

Balances at January 1, 2006 88,260.9 105.1 - 88,366.0

Application of allowances (60,189.1) (197.4) - (60,386.5)

Allowances made 80,681.7 180.4 - 80,862.1

Release of allowances (23,232.2) - - (23,232.2)

Balances at December 31, 2006 85,521.3 88.1 - 85,609.4

Balances restated for comparison purposes 91,849.9 94.6 - 91,944.5

Balances at January 1, 2007 85,521.3 88.1 - 85,609.4

Application of allowances (58,495.7) (16.2) - (58,511.9)

Allowances made 105,628.2 20.4 - 105,648.6

Release of allowances (26,337.4) - - (26,337.4)

Balances at December 31, 2007 106,316.4 92.3 - 106,408.7

Allowances for doubtful assets include gains on the recovery of assets written off for MCh$ 25,441.6 (MCh$ 27,908.8 in 2006).

In the management’s opinion, the allowances made cover all potential losses arising from not recovering assets, according to the information examined by the Bank and its subsidiaries.

9696

Paid Legal Other Result

capital reserve accounts for the year Total

MCh$ MCh$ MCh$ MCh$ MCh$

Balances at January 1, 2006 242,924.9 153,760.1 (1,494.9) 105,684.3 500,874.4

Retained earnings - 105,684.3 - (105,684.3) -

Dividends paid - (49,430.2) - - (49,430.2)

Capital increase 192.1 25.5 - - 217.6

Adjustment change per Circular 3,345 - 1,591.9 (641.9) - 950.0

Fluctuation in value of investments of Miami branch - - 67.1 - 67.1

Fluctuation value investments for sale - - 5,162.4 - 5,162.4

Restatement of equity 5,106.2 4,543.3 (44.9) - 9,604.6

Net income for the year - - - 120,152.6 120,152.6

Balances at December 31, 2006 248,223.2 216,174.9 3,047.8 120,152.6 587,598.5

Balances restated for comparison purposes 266,591.7 232,171.9 3,273.3 129,043.9 631,080.8

Balances at January 1, 2007 248,223.2 216,174.9 3,047.8 120,152.6 587,598.5

Retained earnings - 120,152.6 - (120,152.6) -

Capitalization of reserves 251,776.8 (251,776.8) - - -

Dividends paid - (54,373.2) - - (54,373.2)

Fluctuation in value of investments of Miami branch - - 62.6 - 62.6

Fluctuation value investments for sale - - (4,568.7) - (4,568.7)

Restatement of equity 35,238.0 4,375.8 225.5 - 39,839.3

Net income for the year - - - 135,375.8 135,375.8

Balances at December 31, 2007 535,238.0 34,553.3 (1,232.8) 135,375.8 703,934.3

On April 24, 2007, the ordinary shareholders meeting agreed to distribute a dividend of MCh$ 54,373.2 (MCh$ 53,088.0 on April 18, 2006), equivalent to Ch$ 550 per share (Ch$ 500 in 2006), on a total of 98,860,310 issued shares, thus leaving a balance of MCh$ 65,779.4 in reserves (MCh$ 60,417.0 in 2006).

The extraordinary shareholders meeting of April 24, 2007 agreed to capitalize reserves of ThCh$ 251,776.8.

NOTE 5SHAREHOLDERS’ EQUITY

a) Shareholders’ equity

The following summarizes the movement in the equity accounts in both years:

13. Notes to the consolidated financial statements

9696 97Consolidated Financial

Statements 2007

b) Basic capital and effective equity

In accordance with the General Banking Law, a bank’s minimum basic capital may not be less than 3% of its consolidated assets, while its effective equity may not be less than 8% of its risk-weighted assets. The Bank showed the following positions at the end of each year:

As of December 31

2007 2006

MCh$ MCh$

Basic capital 568,558.5 502,036.9

Total computable assets 10,802,045.7 9,869,367.2

Percentage 5.26% 5.09%

Effective equity 873,947.2 768,733.2

Risk-weighted assets 8,409,634.9 7,501,265.4

Percentage 10.39% 10.25%

The basic capital is equivalent for these purposes to the Bank’s paid capital and reserves. The effective equity and the assets are considered on a consolidated basis with the subsidiaries. Effective equity is based on the basic capital together with the following adjustments: a) subordinated bonds are added up to 50% of that basic capital and the additional allowances made and those made for the normal risk portfolio, with a limit of 1.25% of the assets weight by risk, b) less the balance of assets corresponding to goodwill or premiums paid.

NOTE 6TRADING INSTRUMENTS

The detail of the instruments assigned as financial instruments for trading are as follows:

As of December 31

2007 2006

MCh$ MCh$

Treasury and Central Bank of Chile instruments

Instruments of Central Bank of Chile 345,339.1 273,793.3

Instruments of the Chilean Treasury 37.3 208.1

Other fiscal instruments 42.8 79.3

Sub total 345,419.2 274,080.7

Other Financial Instruments

Certificates of deposit of banks in Chile 145,852.0 81,750.0

Mortgage-funding notes of banks in Chile 838.1 2,765.5

Bonds of other Chilean companies 3,498.5 18,308.1

Other instruments issued in Chile 117,247.9 164,368.4

Other foreign instruments 13,968.8 20,873.0

Sub total 281,405.3 288,065.0

Total 626,824.5 562,145.7 Instruments of the Treasury and Central Bank of Chile include instruments sold under repurchase agreements to customers and financial institutions amounting to MCh$ 61,069.7 and MCh$ 75,784.0 as of December 31, 2007 and 2006 respectively. Other Financial Instruments include instruments sold under repurchase agreements to customers and financial institutions amounting to MCh$ 76,598.2 and MCh$ 140,929.4 as of December 31, 2007 and 2006 respectively. The repurchase agreements have an average term of 7 days at the end of each year.

9898

NOTE 7INVESTMENT INSTRUMENTS

a) Investments available for sale:

The detail of the instruments assigned as investments available for sale are as follows:

As of December 31

2007 2006

MCh$ MCh$

Treasury and Central Bank of Chile instruments

Instruments of Central Bank of Chile 61,741.3 132,355.6

Instruments of the Chilean Treasury 651.0 2,067.9

Other fiscal instruments 13,537.5 17,229.4

Sub total 75,929.8 151,652.9

Other Financial Instruments

Certificates of deposit of banks in Chile 82,214.2 3,250.4

Mortgage-funding notes of banks in Chile 37,453.0 60,995.7

Bonds of banks in Chile 4,397.1 6,064.3

Bonds of other Chilean companies 68,953.6 63,546.8

Other instruments issued in Chile - 18.0

Other foreign instruments 123,912.1 60,872.0

Sub total 316,930.0 194,747.2

Total 392,859.8 346,400.1

Instruments of the Chilean Treasury and Central Bank of Chile include instruments sold under repurchase agreements to customers and financial institutions amounting to MCh$ 2,784.2 and MCh$ 133,135.9 as of December 31, 2007 and 2006 respectively. Other Financial Instruments include instruments sold under repurchase agreements to customers and financial institutions amounting to MCh$ 9,388.4 as of December 31, 2006. The repurchase agreements have an average term of 7 days at the end of each year.

As of December 31, 2007, the portfolio of instruments available for sale includes an unrealized loss of MCh$ 4,568.7 (gain of MCh$ 5,544.4 in 2007), shown as valuation adjustments in the equity.

b) Investments held to maturity:

The Bank has assigned no investments to be held to maturity as of December 31, 2007 and 2006.

13. Notes to the consolidated financial statements

9898 99Consolidated Financial

Statements 2007

Up to One to Three to More than

one year three years six years six years Total

MCh$ MCh$ MCh$ MCh$ MCh$

LOANS (*):

Commercial & other loans 3,451,141.0 717,891.3 670,544.0 547,700.5 5,387,276.8

Housing mortgage loans 72,350.3 147,302.3 220,193.9 871,038.8 1,310,885.3

Consumer loans 401,176.2 346,294.9 120,260.8 2,567.9 870,299.8

OTHER CREDIT OPERATIONS:

Loans to financial institutions 37,198.9 - - - 37,198.9

Instruments bought under repurchase agreements 63,710.0 - - - 63,710.0

TRADING INSTRUMENTS 466,873.6 62,427.1 93,859.6 3,664.2 626,824.5

INVESTMENT INSTRUMENTS

Available for sale 95,358.3 63,896.3 75,568.5 158,036.7 392,859.8

FINANCIAL DERIVATIVE CONTRACTS 159,889.0 34,497.8 13,793.3 431.5 208,611.6

(*) Relates only to loans current at the end of each year with maturities in the periods stated. It therefore excludes contingent loans, loans passed to the past-due portfolio land and overdue loans not yet passed to the past-due portfolio, that amounted to MCh$ 21,025.2, of which MCh$ 20,302.4 were less than 30 days overdue.

NOTE 8MATURITIES OF ASSETS AND LIABILITIES

a) Maturities of loans and other financial assets

The following shows loans and other financial assets as of December 31, 2007 by their remaining term to maturity and including accrued interest to that date. As these are instruments for trading or available for sale, they are shown at their fair value and within the term in which they will be sold.

100100

Up to One to Three to More than

one year three years six years six years Total

MCh$ MCh$ MCh$ MCh$ MCh$

DEPOSITS AND OTHER OBLIGATIONS (*):

Deposits & borrowings 3,819,520.1 788,716.2 84,262.8 - 4,692,499.1

Other term obligations 5,173.7 - - - 5,173.7

Instruments held under

repurchase agreements 254,464.1 - - - 254,464.1

Mortgage-funding notes 25,124.6 49,989.3 63,695.0 101,246.3 240,055.2

BONDS PAYABLE 76,124.9 206,751.3 121,466.9 317,460.0 721,803.1

LOANS FROM FINANCIAL ENTITIES

AND CENTRAL BANK OF CHILE:

Restructuring credit lines 33.9 41.4 65.1 98.9 239.3

Other obligations with Central Bank 34,593.0 - - - 34,593.0

Loans to financial institutions in Chile 28,703.9 - - - 28,703.9

Foreign obligations 734,783.1 96,243.8 229,213.1 257.6 1,060,497.6

Other obligations 55,796.2 3,078.5 2,192.7 501.5 61,568.9

FINANCIAL DERIVATIVE CONTRACTS 56,700.8 39,478.2 20,040.4 614.0 216,833.4

(*) Excludes all sight obligations, term savings accounts and contingent liabilities.

b) Maturities of deposits, borrowings and other funding operations

The following shows deposits, borrowings and other obligations as of December 31, 2007 by their remaining term to maturity, including interest accrued to the end of the year.

13. Notes to the consolidated financial statements

100100 101Consolidated Financial

Statements 2007

Payable in

Foreign currency Local currency(*) Total

2007 2006 2007 2006 2007 2006

ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$

Assets

Available funds 488,432.5 693,426.8 - - 488,432.5 693,426.8

Loans 2,417,228.0 2,431,250.8 98,814.8 93,812.5 2,516,042.8 2,525,063.3

Contingent loans 750,528.0 674,943.5 1,185.7 785.2 751,713.7 675,728.7

Loans to other banks in Chile 74,719.2 - - - 74,719.2 -

Trading instruments 27,817.7 54,525.0 7,071.5 15,730.6 34,889.2 70,255.6

Investment instruments 248,893.4 113,845.3 - 3,384.6 248,893.4 117,229.9

Derivative contracts 7,820.4 55,272.8 - - 7,820.4 55,272.8

Other assets 441,185.1 191,621.3 6,026.7 1,797.7 447,211.8 193,419.0

Total assets 4,456,624.3 4,214,885.5 113,098.7 115,510.6 4,569,723.0 4,330,396.1

Liabilities

Deposits & borrowings 2,176,200.9 1,702,525.7 1,031.9 1,121.9 2,177,232.8 1,703,647.6

Contingent liabilities 734,290.3 679,630.8 - - 734,290.3 679,630.8

Bank borrowings in Chile 3,934.8 82,804.1 - - 3,934.8 82,804.1

Foreign bank borrowings 2,166,344.9 1,591,280.3 - - 2,166,344.9 1,591,280.3

Derivative contracts 7,366.7 51,226.8 - - 7,366.7 51,226.8

Other liabilities 500,984.8 641,843.3 6,026.7 1,797.7 507,011.5 643,641.0

Total liabilities 5,589,122.4 4,749,311.0 7,058.6 2,919.6 5,596,181.0 4,752,230.6

(*) Relate to operations denominated in foreign currency and payable in Chilean pesos or those indexed to the exchange rate.

NOTE 9BALANCES IN FOREIGN CURRENCIES

The consolidated balance sheet includes assets and liabilities in foreign currency or indexed to the exchange rate, for the following amounts:

102102

As of December 31, 2007

Notional amount of contract

with final expiry in

Derivatives held for Hedge of Less than 3 months More than Fair value

Hedging Activities flow (F) or 3 months to 1 year one year Assets Liabilities

fair value (FV) MCh$ MCh$ MCh$ MCh$ MCh$

Interest-rate swaps (FV) - 33,710.1 171,690.0 788.9 (433.4)

Total assets/(liabilities) for derivatives held as hedge - 33,710.1 171,690.0 788.9 (433.4)

Derivatives held for trading

Currency forwards 3,762,536.3 3,416,411.5 678,753.2 100,109.3 (117,736.4)

Interest-rate swaps 105,735.9 43,868.0 (51,390.6) 92,761.4 (89,426.6)

Currency & exchange-rate swaps 5,886.8 112,904.5 395,002.0 14,947.9 (9,043.5)

Interest-rate futures - 100,366.6 - 4.1 (193.5)

Total assets/(liabilities) for derivatives held for trading 3,874,159.0 3,673,550.5 1,022,364.6 207,822.7 (216,400.0)

Total assets/(liabilities) for financial derivatives 3,874,159.0 3,707,260.6 1,194,054.6 208,611.6 (216,833.4)

NOTE 11CONTINGENCIES, COMMITMENTS & RESPONSIBILITIES

The Bank and its subsidiaries record in their memorandum accounts the following balances related to their business commitments or responsibilities:

2007 2006

MCh$ MCh$

Valuables in custody 2,210,889.4 2,201,923.5

Unfunded commitments 1,519,831.7 1,207,328.1

Custody of shares & fixed-income securities 455,468.3 551,285.8

Foreign collections 169,782.8 107,946.4

Leasing contracts signed whose

assets have not been delivered 152,242.2 82,538.4

Documents for collection in Chile 46,524.3 53,905.2

Portfolio management 23,975.1 30,041.4

Documents in guarantee 1,187.2 1,168.0

NOTE 10FINANCIAL DERIVATIVE CONTRACTS

The Bank and its subsidiaries use the following derivative instruments for accounting hedging and trading:

13. Notes to the consolidated financial statements

102102 103Consolidated Financial

Statements 2007

The above includes only the more important amounts. Loans and contingent liabilities are shown in the consolidated balance sheet.

NOTE 12COMMISSIONS AND FEES

The amount of commissions and fees received and paid arose as follows.

Commissions earned from mortgage loan transactions are shown in the consolidated statement of income under Interest & indexation adjustment income.

Revenues Expenses

2007 2006 2007 2006

MCh$ MCh$ MCh$ MCh$

Demand deposit accounts 20,532.9 23,295.5 1,456.2 882.5

Lines of credit 17,307.3 18,684.9 3,995.7 4,981.8

Automated teller machine cards 13,290.9 12,571.9 9,812.7 9,664.6

Mutual fund management 12,611.3 9,874.2 - -

Insurance brokerage 12,319.2 9,634.7 - 7.0

Credit cards 9,521.0 9,017.1 5,416.7 5,806.3

Letters of credit, guarantees & other contingent operations 5,100.9 4,821.9 - -

Insurance company agreements 4,805.5 4,303.1 - -

Savings accounts 4,602.4 4,743.5 - -

Consultancy 3,882.3 3,401.7 - -

Brokerage 3,447.3 2,763.4 48.5 465.1

Retail banking prepayments 3,135.7 2,894.0 - -

Collection of documents 2,067.2 1,901.1 1,826.7 400.7

Foreign exchange transactions 1,542.3 1,563.3 - -

Bankers drafts & funds transfers 803.6 703.8 272.4 233.4

Deferred consumer fees - - 6,934.9 3,956.9

Credit evaluations - - 3,809.7 3,287.8

Other 16,741.6 16,403.8 1,622.2 2,123.5

Total 131,711.4 126,577.9 35,195.7 31,809.6

104104

NOTE 13NON-OPERATING INCOME AND EXPENSES

The detail of these is as follows:

2007 2006

MCh$ MCh$

Non-operating income:

Gain on sale of Credicorp shares 8,407.0 -

Income from sale of written-off assets 2,172.7 1,393.4

Expense reimbursements 908.0 1,942.5

Gain on sale of premises & equipment 160.7 1,094.7

Consultancy 2.0 571.5

Reversal of allowances 110.3 415.2

Portfolio management 167.8 255.5

Rentals received 195.0 105.6

Recovery of leasing expenses 80.7 44.2

Other minor 51.8 536.9

Total 12,256.0 6,359.5

Non-operating expenses:

Amortization of goodwill 4,266.7 4,266.7

Write-offs of assets received in lieu of payment 1,181.9 1,154.4

Other write-offs 3,823.8 3,735.8

Provisions 1,073.0 766.2

Severance 200.9 551.3

Donations 1,333.8 758.1

Other minor 967.7 423.4

Total 12,847.8 11,655.9

NOTE 14DIRECTORS’ SALARY AND OTHER EXPENSES

The Bank and its subsidiaries have paid or provided for the following amounts as a charge to income:

2007 2006

MCh$ MCh$

Profit sharing 707.6 1,149.2

Fees 965.4 995.4

Allowances 161.2 156.8

Other - 13.2

Total 1,834.2 2,314.6

NOTE 15INCOME TAX AND DEFERRED TAXES

a) Income tax

The provision for income tax was calculated in accordance with current legislation and the respective liability is shown for MCh$ 19,989.4 (MCh$ 28,277.7 in 2006) under Other assets net of monthly tax prepayments made of MCh$ 32,682.7 (in Other liabilities net of MCh$ 20,356.0 of monthly tax prepaymnents in 2006).

b) Deferred taxes

These are comprised of the following:

13. Notes to the consolidated financial statements

104104 105Consolidated Financial

Statements 2007

Balances at

December 31

Timing difference 2007 2006

MCh$ MCh$

ASSETS

Allowance for doubtful assets 19,381.9 17,671.0

Provision staff vacations & bonuses 1,523.5 2,378.9

Securities trading 1,075.4 952.6

Leasing contracts (net) 1,217.3 1,493.5

Derivative contracts 1,813.6 -

Other 6,577.8 6,268.8

Net assets 31,589.5 28,764.8

LIABILITIES

Premises & equipment 2,600.3 2,705.7

Deferred expenses 5,270.0 4,791.3

Subordinated bonds 15,097.6 4,811.1

Derivative contracts - 549.4

Other 454.0 1,013.2

Net liabilities 23,421.9 13,870.7

Net balance of deferred taxes booked 8,167.6 14,894.1

c) Effect on results

2007 2006

MCh$ MCh$

Provision for income tax (19,989.4) (28,277.7)

Effect of deferred taxes for the year (6,726.5) 4,029.8

Amortization of complementary accounts for effects

of initial accumulated deferred taxes 0.2 14.2

Total (26,715.7) (24,233.7)

Fernando Vallejos Vásquez Lionel Olavarría Leyton Manager, Accounting Chief Executive Officer

106

106 107Consolidated Financial

Statements 2007

Santiago, January 25, 2008

To the Shareholders and DirectorsBanco de Crédito e Inversiones

We have audited the accompanying consolidated balance sheets of Banco de Crédito e Inversiones and subsidiaries as of December 31, 2007 and 2006 and the related consolidated statements of income and cash flows for the years then ended. The preparation of these financial statements (including the notes thereto) is the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also involves assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Banco de Crédito e Inversiones and subsidiaries as of December 31, 2007 and 2006 as well as the results of their operations and cash flows for the years then ended, in accordance with accounting principles generally accepted in Chile.

Roberto J. Villanueva B.

Report of the Independient Accountants13.

MANAGEMENT AND AUTHORSHIPHUMBERTO BÉJARES JARA

EXECUTIVE PRODUCTIONGERENCIA DE COMUNICACIONES Y RSE

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