Banco de Chile (NYSE:BCH) Q3 2017 Earnings Conference Call - Final Transcript
Nov 03, 2017 • 12:30 pm ET
Good afternoon, everyone. And welcome to Banco De Chile's Third Quarter 2017 Results Conference Call. If you need a copy of the press release, it is available on the company's website. Today with us, we have Mr. Rodrigo Aravena, Chief Economist and Senior VP of Institutional Relations; Mr. Pablo Mejia, Head of Investor Relations; Mr. Cecil Diaz, Investor Relations Officer; and Daniel Galarce, Head of Financial Control.
Before we begin, I would like to remind you that this call is being recorded and that information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risks and uncertainties and actual results may differ materially. Please refer to the detailed note in the company's press release regarding forward-looking statements.
I will now turn the call over to Mr. Rodrigo Aravena. Please go ahead.
Good afternoon, everyone, and thanks for joining us today on our conference call for the third quarter 2017 result. It's a pleasure for me to share with you our comments regarding the Chilean economy and the results[Phonetic] of the banking industry during the quarter. Finally, Pablo Mejia, our Head of Investor Relations, will review our third-quarter financial results.
Please turn to slide number 3. In general, there are several signs of recovery in the Chilean economy, suggesting that GDP growth will likely increase significantly in 2018 after having full year with an average rate of only 1.5%. Improvement in the Chilean activity can be seen in the chart on the top-left section. The monthly GDP, Imacec[Phonetic] in Spanish, grew by 2.4% year-on-year in August, which is higher than the 0.5% of service in the first half of this year. This recovery has been a consequence of the higher dynamism in the mining sector, which posted a strong 9.2% annual growth in August.
It is worth mentioning that the economy is also improving on a sequential basis, seems the Imacec grows 7.3% in the quarter ending in August, with an impressive rise[Phonetic] of 50% in the mining activity. In addition to these good numbers, several leading indicators are anticipating [Indecipherable] recovery. For example, the breakdown of trade balance, as seen on the top-right chart, have shown an upward trend in both exports and imports with durable against capital input growing at a double-digit rate.
Following this idea, several surveys are suggesting an improvement in local sentiments as you can see in this chart on the bottom-left section, specifically. The consumer confidence posted its best level since the beginning of 2016, returning to the optimistic sound. Business confidence also hit its highest level in more than two years, in line with a very positive year for the Chilean markets[Phonetic]. In spite of this, we think the most relevant adjustment during the last month has been the chart reduction in the annual inflation rate, which decreased to 1.5% in September. Consequently, the rate inflation has remained below the target of the Central Bank since October of last year. This solution can be seen on