Banco de Chile (NYSE: BCH) Consumer confidence hits 8-year high as Banco de Chile targets forgotten small businesses with aggressive lending push. Something broke in Chile’s banking system. When interest rate caps were implemented on credit cards, the people they were meant to protect got locked out instead. “The reduction leaves vulnerable or the mass market consumer markets unbanked,” admitted Pablo Mejia, Head of Investor Relations at Banco de Chile, during the Bank’s Q4 2025 earnings call. “This is precisely what occurred after those regulations were implemented.” Now, the Bank is ready to bring them back.
The Five-Year Struggle
Commercial lending to small and medium businesses has suffered the longest. “This is the area that has had the highest difficulties over the last five years, where we’ve seen an important decrease,” Mejia stated, “with a special focus in those smaller and medium-sized businesses, SMEs.” Corporate banking “has been very weak over the last year.” But the bank sees a turning point ahead.
The Growth Plan of the Bank
While the industry expects loan growth of around 4.5%, the Bank is targeting significantly higher:
| Segment | Banco de Chile Target |
| Commercial Loans (SMEs) | ~8% |
| Key Segments | ~7% |
| Consumer Loans | ~6% |
| Mortgage Loans | ~5% |
| Industry Average | ~4.5% |
“We want to grow above the industry in terms of loans,” said Daniel Galarce, Head of Financial Control and Capital Management. “We want to use the capital in order to take more growth and faster growth.”
The Firepower Behind the Bank
Banco de Chile has the capital to execute. Shareholders approved an 85% dividend payout ratio, yet the bank maintains capital ratios “at least 1% above the regulatory limit” — with room to go even higher. “We have several gaps in terms of capital rates today,” Galarce explained. “We want to use them in the future, as long as the economy gains some momentum. We want to retake some market share, particularly in 2026.”
Why Confidence Is Surging
The economic backdrop supports the bank’s ambitions. Consumer confidence for the next 12 months is now “the highest since 2018,” according to Chief Economist Rodrigo Aravena. Capital imports signal “a good trend for investment.” “The main driver of activity this year will come from domestic demand,” Aravena said. “We have a more positive view on the economy.”
Political Tailwinds
Chile’s new government takes office on March 11th. While specific priorities remain unknown until then, Aravena noted “an important consensus in Chile” around tax reform — potentially reducing the corporate tax rate from the current 27% to around 23%. “It would be positive news in terms of investment, in terms of economic growth in the future,” he said.
Additionally, discussions are underway about revisiting interest rate caps. “This obviously could help return the segment for financial institutions,” Mejia noted. “This would be a positive move, but it’s very early in the discussion.”
A Strengthening Currency
The Chilean peso has strengthened recently, which Aravena says “would reduce the inflationary pressures this year” with “a potential impact in terms of interest rates.”
The Official Outlook
Banco de Chile projects GDP growth of 2.4% for the year — similar to 2024 and 2025. But the composition matters. “Even though we will likely have a similar economic growth this year,” Aravena explained, “the good news is the composition of growth because the main driver of activity this year will come from domestic demand.”
The Bottom Line:
After five difficult years for SMEs and a mass market pushed out of the banking system, Banco de Chile is deploying its capital reserves to recapture market share, betting that returning confidence, potential tax cuts, and regulatory relief will reward aggressive growth.