Fitch Affirms and Withdraws Banco de Chile's International Ratings

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BUENOS AIRES, Argentina & SANTIAGO, Chile--(BUSINESS WIRE)--

Fitch Ratings has affirmed and simultaneously withdrawn its international ratings on Banco de Chile (BCH). Because the vast majority of BCH's debt is domestic issuance, the international rating is withdrawn as it is no longer considered analytically meaningful. Fitch will continue to rate BCH on the national scale and has affirmed the bank's national ratings. A full list of rating actions follows at the end of this release.

BCH's ratings reflect its importance to the Chilean economy, strong domestic franchise, track record of sound overall performance through the economic cycle, healthy asset quality, diversified funding sources, adequate capital base and the depth of its management. However, debt to the Central Bank of Chile held by BCH's main shareholders was also considered; payment of the debt with BCH's cash dividends constrains the bank's internal capital generation, although this has decreased as net income grows. Fitch also notes the high level of hybrid equity instruments in BCH's regulatory capital base, especially when viewed in light of international comparisons of similarly rated banks.

At Dec. 31, 2011, BCH was Chile's largest bank by total loans, with a market share of 19.8%, and strong market shares in all segments. BCH's main shareholder, with 59.3%, is LQ Inversiones Financieras (LQIF), part of Grupo Luksic, one of Chile's largest business groups. Citigroup holds 50% of LQIF, or a 29.65% indirect stake in BCH.

Fitch has affirmed and withdrawn the following ratings on BCH:

--Foreign and local currency long-term Issuer Default Rating at 'A'; Outlook Stable;

--Foreign and local currency short-term ratings at 'F1';

--Viability rating at 'a';

--Support at '2';

--Support rating floor at 'BBB+';

--Long-term rating on US$200 million subordinated bonds due 2016 at 'BBB+'.

Fitch has affirmed the following ratings on BCH:

--Long-term national rating at 'AAA(cl)'; Outlook Stable;

--Short-term national rating at 'N1+(cl)';

--National long-term rating on senior unsecured bonds at 'AAA(cl)';

--National long-term rating on subordinated bonds at 'AA(cl)';

--National rating of equities at 'Primera Clase nivel 1(cl)'.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Aug. 16, 2011).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=649171

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Fitch Ratings
Primary Analyst
Santiago Gallo, +54 11 5235 8137
Director
Fitch Argentina Calificadora de Riesgo S.A.
Sarmiento 663 - piso 7 - C1041AAM
Buenos Aires, Argentina
or
Secondary Analyst
Abraham Martinez, +56 2 499 33 17
Director
or
Committee Chairperson
Maria Rita Goncalves, +55 21 4503 2621
Senior Director
or
Media Relations:
Brian Bertsch, +1-212-908-0549
Email: brian.bertsch@fitchratings.com

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