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  Title	BANCO ITAÚ CHILE Banco Itaú Chile : Annual Report 2024 - Pillar III
  ID	7712885
  External ID	7626706484
  Author	Unknown
  Published Date	March 14, 2025, 2:22 p.m.
  Summary	March 14, 2025 at 03:00 pm EDT ANNUAL PILLAR 3 REPORT Disclosures report Credit Risk Reporting Segments Credit Quality Management Governance Structure and Organization Corporate Risk Di
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  URL	https://www.marketscreener.com/quote/stock/banco-ita-chile-26785347/news/banco-ita-chile-annual-report-2024-pillar-iii-49341040/
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  Content ID	5018131
  Key	819b5bf8-77b1-4fad-a21e-210b8a3ee5f9
  Content	March 14, 2025 at 03:00 pm EDT ANNUAL PILLAR 3 REPORT Disclosures report Credit Risk Reporting Segments Credit Quality Management Governance Structure and Organization Corporate Risk Division Counterparty Credit Risk Overview of Counterparty Risk Management Market Risk Policies and Guidelines Scope of Application Management Measurement and information Systems Governance Structure and Organization Market Risk-Weighted Assets (MRWA) Interest Rate Risk in the Banking Book (IRRBB) Management of Interest Rate Risk in the Banking Book (IRRBB) Description of Disturbance and Stress Scenarios Assumptions Used to Determine IRRBB Exposure Liquidity Risk Organizational and Functional Structure for Liquidity Management Limit, Alert and Internal Reporting Structure Funding Strategy Liquidity Stress Testing Liquidity Contingency Plan Asset Encumbrance Operational Risk Policies and Guidelines Governance Structure and Organization Organization of the Operational Risk Funtion Management Measurement and Information Sytems Monitoring and Reporting Operational Risk-Weighted Assets (ORWA) Remuneration Governance Structure and Organization Remuneration Model INTRODUCTION Introduction Risk Management Credit Risk Counterparty Credit Risk Market Risk Interest Rate Risk in the Banking Book Liquidity Risk Operational Risk Remuneration Overview of Itaú Chile Itaú is a leading bank in the Chilean market with a presence in every region in Chile and operations in Colombia and Panama, a branch in the United States and a representation office in Peru. The institution dates back more than 150 years. During this time, it has undergone numerous transformations to become the bank it is today. The most recent major milestone was the 2023 dissolution of the corporate relationship with Corpbanca entered into in 2016, as a result of which it is now known as Banco Itaú Chile. Founding of Banco de Concepción Merger and acquisition of Banco Francés, Banco Italiano and Banco Valdivia Acquisition of Banco Concepción by INFISA (now CorpGroup) Renaming of Banco Concepción to Corpbanca Local initial public offering (IPO) Acquisition of HSBC Bank Chile and Munita, Cruzat y Claro (MCC) branches Acquisition of Banco Santander Colombia Merger between Banco Itaú Chile and Corpbanca, which is renamed Itaú Corpbanca Renaming to Banco Itaú Chile In recent years, the Bank has focused on building a culture and strategy centered around satisfying customer needs, orienting the Bank's employees, products and services towards a simple, digital and disruptive concept. In addition, since 2019 Itaú has been strongly promoting initiatives to position the Bank as a benchmark in customer satisfaction and sustainable results, aspects that are directly reflected in the strategic statements defined for developing its business model: Our Mission "To deliver comprehensive financial solutions that meet the needs of individuals and companies, in order to achieve sustainable results". Our Purpose "Motivating the transformational power of people". Our Vision "To be the leading bank in sustainable performance and customer satisfaction". Itaú's value proposition is focused on creating solutions, not products. Disruption is a strategic asset that allows us to provide customers with a renewed experience through innovative, transparent solutions, with a large digital component at the core, bringing customers closer to the banking of the future. Consistent with the vision of being the leading bank in sustainable performance, Itaú maintains its commitment to sustainable development through various initiatives and products that promote balanced and responsible social, environmental and economic development. The Bank also organizes several initiatives to bring the financial world closer to people through its various channels, disseminating valuable content on financial, investment, pension and credit solutions to customers and non-customers alike. This aligns with the Bank's objective of customer centricity, as it aims to provide user-friendly products and communicate actively with customers to understand their needs through data analysis. To achieve the pillars of simplification and digitalization, Itaú works hard to optimize its customers' time and be more accessible through a multichannel strategy, seeking to offer the best digital banking experience in the market, accelerating the expansion of digital branches and being the leading bank in social media. Introduction Risk Management Credit Risk Counterparty Credit Risk Market Risk Interest Rate Risk in the Banking Book Liquidity Risk Operational Risk Remuneration Regulatory Framework In 2019 the newest version of the General Banking Law was published (hereinafter "LGB"), aiming to implement Basel III standards as of December 1, 2020. The Financial Market Commission (hereinafter "CMF") reported on March 20, 2020, that it had postponed the implementation of Basel III requirements by one year, in coordination with the Chilean Central Bank. Nevertheless, the final standards for Pillars 1, 2 and 3 were published in 2020. Under the new version of this law, capital requirements have increased in quantity and quality, from new risk measurements to precise quantification of the Bank's capital via Pillar 1. In addition, new Pillar 2 capital requirements are also incorporated, aimed at ensuring adequate management of the risks to which the entity is exposed. Finally, Pillar 3 requires transparency requirements and market disclosures. This report aims to comply with the latter requirements; therefore, it contains the quantitative and qualitative information required by the CMF, specifically in chapter 21-20 of the Updated Compilation of Standards (RAN) on "Market Discipline and Transparency." Prudential Disclosures Policy The Bank has a formal policy to disclose prudentially relevant information, entitled the "Prudential Disclosures Policy." This policy establishes principles and guidelines for disclosing information, in addition to identifying internal controls and putting mechanisms in place to safeguard the information to be disclosed. Regarding governance, the Board of Directors must approve the policy, ensuring that the Bank correctly adheres to the guidelines and directives in RAN Chapter 21-20, in addition to establishing and maintaining an effective internal control structure for the information to be disclosed. This report has been prepared following the defined internal control mechanisms and reviewed by the appropriate governance bodies, which formally approved it on March 11, 2025. REPORTE ANUAL PILAR 3 | 2024 Document Objective This document contains information on Banco Itaú Chile required by the CMF to promote market discipline and financial transparency through the disclosure of meaningful and timely information from banks to market participants. The foregoing is in accordance with numeral 8 of Article 5 of Decree Law No. 3,538 of 1980, and Articles 14 and 16 of the LGB. The objective of the Pillar 3 standard is to enable the market and information users to better assess each entity's situation and know the risk profile of local banking institutions and their local and global position and equity structure in a single format, thus reducing information asymmetries. Banco Itaú, in line with Basel III standards applied in Chile, presents the required tables with quarterly, half-yearly and annual frequency derived from RAN 21-20, separated by disclosure requirement and indicating a name and description for each. Introduction Risk Management Credit Risk Counterparty Credit Risk Market Risk Interest Rate Risk in the Banking Book Liquidity Risk Operational Risk Remuneration REPORTE ANUAL PILAR 3 | 2024 The CRE table and the CR6, CR8, CR9, CCR4, CMS1 and CMS2 templates do not apply to the Bank as it is not currently authorized to use internal models to calculate Credit Risk Weighted Assets. In addition, the SECA table and the SEC1, SEC2, SEC3 and SEC4 templates are not applicable to the Bank because it does not have securitized instruments. CAPITAL Capital Counterparty Credit Risk Market Risk Interest Rate Risk in the Banking Book Liquidity Risk Operational Risk Remuneration This section complies with the qualitative and quantitative requirements of the templates and tables KM1, OV1, OV1, CDC, CCA, CC1, CC2, LIA, LI1, LI2, LR1 and LR2, consolidating the most relevant aspects of capital management at Banco Itaú. ______ For Banco Itaú, adequate capital management plays a fundamental role, and therefore, it constantly ensures due compliance with current regulations and adequate management and monitoring. The capital management area is responsible for ensuring that the nature and risks assumed by the Bank are consistent with its business strategy and the capital required to meet its strategic objectives. To accomplish this, the Bank relies on different management tools to identify, analyze, assess and monitor the risks that may affect its capital. The efforts invested in management have resulted in the entity having adequate capital to face the dynamic market environment and being within the appropriate metrics in potential stress scenarios for its internal regulatory capital target. The Bank has a solid solvency position and world-class structured governance, which continuously reviews improvements in risk management methodologies and practices as part of a continuous improvement process, in order to adequately manage capital to support its strategy. Governance Structure and Organization Board of Directors The Board of Directors is the main body, overseeing prudent management of the risks faced by the entity and the capital associated with them. As mandated, the Board of Directors must define and approve the institution's objectives and strategic plan, promoting medium and long-term capital management in accordance with the defined risk profile, while considering due protection of shareholders and other REPORTE ANUAL PILAR 3 | 2024 stakeholders that may be affected by decisions made in this regard. Committees The Integral Risk Committee's purpose is to propose and support the Board of Directors in defining the risk appetite and the framework of general policies related to these matters, to adequately align with the Bank's global strategy, in addition to supervising the correct identification, measurement and control of all risks, allocating capital to the risks identified and meeting regulatory requirements. Commissions The Higher Capital Management Commission has been established to assist the Bank's Board of Directors and management with capital assessment, management and adequacy, in accordance with the principles and rules set forth in local regulation and international (Basel) standards, as applicable, to review the effectiveness of risk and capital policies and limits, and to review adherence to risk and capital policies and procedures in the company. Corporate Finance Division Capital management is overseen by the organization's Capital Management Unit, which reports to the Financial Planning and Analysis Department, which in turn reports to the Corporate Finance Division. Overview of Capital Management Within its management framework, Itaú Chile has a "Capital Management Policy," which contains the guidelines and directives issued by the Board of Directors to guide the decision-making process to manage, monitor and control the Bank's capital level, under the premise of ensuring its solvency and profitability, as well as adequate regulatory compliance in this area. The Capital Management Policy sets forth the guiding principles and objectives for this area and defines the responsibilities associated with the capital function and its respective governance. Capital Counterparty Credit Risk Market Risk Interest Rate Risk in the Banking Book Liquidity Risk Operational Risk Remuneration Capital Management Objectives The Bank's internal regulations also establish that capital management must adhere to certain objectives to meet regulatory requirements and properly manage financial resources. The general objectives to be met by the capital management unit include: Determine the capital required by the Bank at an individual and consolidated level, based on the risk profile or appetite set by the Board of Directors and aligned with the strategy and business plans approved by that same body. Define the optimal capital required by the Bank to adequately comply with related standards and other regulations established by the competent regulator. Identify possible internal and external macro- financial scenarios that may affect the Bank's capital and assess their potential impacts using stress testing or other methodologies suitable for that purpose. Defining the internal regulatory capital target. This key element of capital management is a dynamic, yearly task that is formally contemplated in the Bank's capital planning process. Assessing, based on this target, its current and future capital needs and establishing action plans to return to permissible capital levels in accordance with its defined appetite. Capital Management Processes and Tools The Bank's capital management unit is responsible for: Periodically measuring the main capital indicators. Reviewing limits in relation to regulatory minimums and risk appetite and escalating them in case of excesses. Allocating capital to the Bank's businesses. Preparing capital projections in base and stress scenarios. Determining internal capital target and limits and alert levels for risk appetite. Managing the capital self-assessment process (ICAAP). Coupled with the Bank's policies and governance, these tasks enable it to meet its capital management objectives. Key Prudential Metrics and Risk- weighted Assets (RWA) Monitoring and follow-up of regulatory ratios is key to capital management. Some related key metrics include: KM1 - Key Metrics The following template summarizes the metrics relevant to the Bank's capital management: Capital Counterparty Credit Risk Market Risk Interest Rate Risk in the Banking Book Liquidity Risk Operational Risk Remuneration → Risk-based capital ratios as a percentage of RWAs Additional CET1 buffer requirements as a percentage of RWA Attachments Original document Permalink Disclaimer Banco ITAÚ Chile published this content on March 14, 2025 , and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 14, 2025 at
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