Banco del Estado de Chile

Table of Content_

Corporate name Banco del Estado de Chile

RUT 97.030.000-7

Constitution Banco del Estado de Chile has its origin in 1953 upon the merger of Caja Nacional de Ahorros, Caja de Crédito Hipotecario, Caja de Crédito Agrario and the Instituto de Crédito Industrial. Decree Law Nº 2,079 published on January 18, 1978, contains its Organic Law.

Legal address Av. Libertador Bernardo O’Higgins Nº 1111, Santiago

Head Office address

Av. Libertador Bernardo O’Higgins Nº 1111, Santiago

Website www.bancoestado.cl

Control and supervision

Linked to the State through the Ministry of Finance and the Superintendency of Banks and Financial Institutions (SBIF), which supervises its operation.

1. Welcome Outstandingfigures1.1. Letter from the Chairman of BancoEstado1.2. History of the bank1.3. Awards and honors1.4. Strategic Plan 2018-20221.5. About this Integrated Memory

2. BancoEstado profile 2.1. Corporate governance2.2. Subsidiaries and related entities2.3. The bases of our management2.4. Sustainability2.5. Legislative changes

3. General results3.1. Summary of results 20183.2. Risk management3.3. Retail Customer management 3.4. Customer satisfaction

4. Strengthen financial inclusion 2.0: More services and coverage

4.1. Management approach4.2. Formats that adapt to the life of the client4.3. Countrywide physical presence, geographic

coverage4.4. Digital presence4.5. Acquisition network – Compraqui

5. Promote a national savings culture5.1. Management approach5.2. Savings as a development engine5.3. Financial education to promote savings

6. Drive economic development by supporting small businesses

6.1. Management approach6.2. Management of clients, companies and

institutions6.3. Entrepreneurship support programs

7. Guarantee of being a trusted and secure bank

7.1. Management approach7.2. Cybersecurity and operational continuity

8. Have a motivated, prepared and dynamic team

8.1. Management approach8.2. Headcountandprofileofourteam8.3. BancoEstado Meetings8.4. Labor Relationships8.5. Materialization and developments8.6. Climate evaluation

9. In line with our environment9.1. Management approach9.2. Promotion of Chilean cinema9.3. Support for State initiatives9.4. Support to the community9.5. Environmental management

10. Consolidated financial statements

• AnnexesA.1 Table of indicatorsA.2 Headcount details - Social Responsibility and

Sustainable Development

http://www.bancoestado.cl

BancoEstado Integrated Annual Report

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1.Welcome_


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Outstanding figures of 2018_

13.2millions

of customers at the end of 2018.__

customer companies, institutions and organizations of the civil society on closing 2018__

816thousand

726 thousandclients are immigrants__

635thousandclients are active micro-entrepreneurs__

CuentaRUTs at the endof 2018__

11.2million

Over 1 millionnew customers__

852thousandnew savings accounts at the end of 2018__

new clients in APV, reaching 242 thousand__

154thousand

11,555small businesses integrated into the Compraquí network.__

416branches in Chile at the end of 2018__

7new branches__

34%of our branches are the only bank present in the municipalities where they are installed.__

25,400points of service CajaVecina at the end of 2018__

3,253new points of service during 2018__

3.3%of real growth in loans during 2018.__

356billioninprofitsbeforetaxes(+ 25% real compared to 2017)__

14,899workers in the BancoEstado corporation__

9subsidiaries__

635local meetings to talk and discuss the bank we want to be in the future and set our 2018-2028 Roadmap__


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1.1Letter from the Chairman of BancoEstado_

2018 was a good year for BancoEstado, during which our institution underwent important changes.AfterMr.SebastianPiñeraEcheniquetookofficeasPresidentoftheRepublic,theGovernmentproceededtoappointanewExecutiveCommitteeandanewBoardofDirectors.Shortlyaftertakingoffice,thenewExecutiveCommitteeofBancoEstadointroduced changes in the structure of the bank’s top management and announced the mainstrategicmanagementlinesthathadjustbegun.Theseaxesarefive:(i)expandanddeepenfinancialinclusion;(ii)promoteasavings’culture;(iii)boostdevelopmentbysupportingsmallandmicroenterprises;iv)guaranteetheoperationalcontinuityandsafetyofouroperations;and(v)promoteamotivated,preparedanddynamichumanteam.

Certainly, inthefirstmonthssinceIassumedasChairman,itwasessentialtoknowBancoEstado in depth, with its particularities, its corporate culture, its human resources, the characteristics of the various types of clients, its ample geographic coverage, subsidiaries, products,etc.TodayIamconvincedthatBancoEstadofulfillsaveryrelevantroleinthedevelopment of the economic activity of the country, with features different from a commercial private bank. Its relationship with the various State entities and its support to deploy public policies, the successful and ample diffusion of banking services to the people,itsworkteamscommittedandidentifiedwiththebank’smissionaswellasthegeographiccoveragearesomeofthefeaturesthatmakeitadifferentfinancialentity,unique and important for the lives of all the inhabitants of the country.

Intermsoffinancialperformance,inaccordancetotheeconomiccyclethatshowedevidentimprovementsongrowthindicators,BancoEstadoachievedayearwithpositivefigures,limitedcreditrisk,accompaniedbygoodlevelsofcontrolonexpenses.Infact,provisionsfor loan losses/operating income accounted 0.8% in the year for all loans, which is less thanthe1%shownbythefinancialsystem;andtheefficiencyindex,thatis,expensesinterms of the operational margin, improved from 62.9% in the previous year to 58.3% in 2018.Allinall,in2018thebankgenerated$356thousandmillioninincomebeforetax,which represents a real 25% growth from previous year.

Duringfiscalyear2018,BancoEstado’stotalloansgrewby3.3%real,whichisbelowtheaverage growth of the system. This moderate growth obeyed to a strategy of focusing our commercial efforts on retail and small size businesses, at the same time as seeking toenhancetheprofitabilityofoperationswithlargebusinessesbywayofoptimizingthe use of capital, a scarce resource set by the new requirements established in the new General Banking Law.

As a result of this, loans to medium, small and micro enterprises grew by 7.4% in real terms this year , while housing loans 5.4% real growth and consumer loans 10.7% real growth.

In the segment of large businesses and corporations and in State institutions, the emphasis was on deepening the relationship with clients, the wide offer of products and enhancements on payment services and cash management, as well as seeking to continue having an active role in funding relevant and large projects.

“Today I am convincedthat BancoEstado fulfills

a very relevant role inthe development of

the economic activityof the country, with

features different from acommercial private bank.”


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On loans, it is worth mentioning the effort to return to a greater leadership in funding theagriculture.Tothisend,wecreatedtheofficeforAgriculturalCreditRiskLoans(CréditoAgricolaManagementoffice)undertheCorporateRiskDivisionandestablishedanassistantmanagementofficeresponsibleforsupportingthePlanImpulsoAraucania(Drive Araucania Plan) that is being carried out by the Government.

Intermsofretailcustomerservice,BancoEstadocontinuestostrengthenitsflagshipproduct CuentaRUT, opening more than one million new accounts in 2018, wherewith nowexceeds11.2millionaccounts.Tosupportthefullincorporationintotheworkinglifeof immigrants who have arrived in Chile in recent years, the Bank has facilitated opening a CuentaRut to those people who have their situation regularized or were in the process of doing so, having at the end of the year more than 714 thousand foreigners enrolled with an account.

At the same time, on the effort of promoting savings, there were a number of campaigns deployed to open new traditional savings accounts and the voluntary pension plan (APV) in mutual funds. Thus, savings accounts in 2018 increased by more than 852 thousand newaccounts-asignificantnumberofthemopenedthroughamobileapplication-and154 thousand new clients joined the Voluntary Retirement Savings (APV) program led by BancoEstado subsidiary Administradora General de Fondos. Likewise, during 2018 the acquisition network of debit or credit transactions of BancoEstado was launched, under the brand name Compraquí. By the end of the year, there were more than 11,500 small businessesintheCompraquinetworkandweexpecttoreachover40thousandpointsin 2019.

All this effort has been accompanied by a consistent strategy on Financial Education that reached 800 thousand people in 2018, leveraged by our work at branches, agreements with public agencies, educational programs in schools, technical training centers and community colleges.

Simultaneously with the large increase in the number of accounts and transactions that thisimplies,thebankcontinuestoexpanditsservicechannels.SpecialattentionhasbeengiventoCajaVecina,whichexperiencedanincreasefrom22,147to25,400servicepointsin 2018, processing over 386 million transactions.

Likewise, the presence of BancoEstado with customary branches continues to be a aspiration of many communities claiming they would like standard banking service. Accordingly, during 2018,thebankcontinueditsfiveyearsoldexpansionprogramandopenednationwidesevennewbranches,oneofthemintheMetropolitanareaandtheremainingsixelsewhereinareasthatpreviouslyhadnobankingcoverageoroffice.

Notwithstandingtheconcerntomaintainanefficientoperationand,atthesametime,being aware that each year a larger share of transactions is generated remotely, the bank acknowledges that given the quantity and variety of clients’ requirements, it will be necessary to continue to improve the geographical coverage in Chile. That is the reason why in the upcoming years we will continue to analyze opening new BancoEstado or ServiEstado branches, particularly in those municipalities or secluded neighborhoods with an important number of inhabitants, always trying to use simple and agile processes that secure the sustainability over time of these service points. At the same time, the bank continuestoallocateresourcestoimproveandexpandservicesrenderedthroughwebpages, also increasing stability and safety.

As I said earlier, the transaction volume we process every day grows month to month representing a very high percentage of all transactions carried out in the Chilean banking system. Hence the importance for the regular development of commercial operations in the country that BancoEstado must insure it will operate with no interruptions and in a secure and safe manner.

“I want to highlight that each of the achievements and successes herein stated is the result of the engine that moves our entire institution: our workers. Thanks to their commitment, adaptability to changes and teamwork, we could meet the goals we set forth for ourselves.”


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Thus,forthelasttwoyearsthebankhasmadesignificantinvestmentsondataprocessingequipment and facilities, a program that continued during 2018 and should be completed in 2020. Likewise, in 2018, we launched a plan to strengthen cyber security derived from astudycompletedinthefirstquarter.Onthismatter,thebankshallcontinuetoroutinelyinvest at the same time taking charge of the modernization of its central systems, whose analysis stage is now undergoing development. In terms of regulations, in October 2018, the General Banking Law Reform was approved and contains new and more stringent capital requirements, according to international standards. For BancoEstado, this new standard means an additional capital requirement for the upcoming years, particularly if the bank wants to continue growing and being a relevant player in the national banking system. To meet this challenge, the bank should be able to continue increasing its self-generation of resources by optimizing its assets compositionandimproveitsoperationalefficiency,aswealreadydidin2018,andalsowillrequire hybrid instruments. Correspondingly, the bank will need the State to contribute with additional capital. Fully aware that there are multiple requets for additional State funds, the entire BancoEstado team is committed to continue showing the country it is capable of multiplying those resources and continue being a key pillar for the people’s development of our country.

I want to highlight that each of the achievements and successes herein stated is the result oftheenginethatmovesourentireinstitution:ourworkers.Thankstotheircommitment,adaptability to changes and team work, we could meet the goals we set forth for ourselves. That is why I want to acknowledge the BancoEstado and subsidiaries’ work teams their effort and dedication shown during 2018.

Understanding that modernizations and redesign of operations in a bank the size of BancoEstadotakemanyyears,bymid-2018,theExecutiveCommitteeinvitedover10thousand bank workers and more than 4 thousand people from its subsidiaries to participate atdiscussionmeetingsonwhatdoestoday’sChileexpectsfromBancoEstadoandwhatBancoEstado must be 10 years into the future. After 635 meetings where 11 thousand people participated, including almost one thousand clients, there was a big assembly in January2019withrepresentativesofallthebank’sestatestodefinethelargedreamsofBancoEstado. We may say now that, 163 years since being Caja de Ahorro, BancoEstado starts one more journey to make sure that in 10 more years it will be as much current as today, servicing Chile and all the Chilean people. Our drive is the belief that with the effort and commitment of all of us who work at BancoEstado, we may become the most appreciated business for Chileans and the best State bank of the world.

Arturo Tagle QuirozChairman of BancoEstado


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1.2The bank’s history._

Our trajectory of 163 years is marked by projects and initiatives that have been determinant for the development of the country, as well as allowed us to consolidate us as an institution ofexcellencedeliveringfinancialandnon-financialservices.

Inthisperiodareestablishedthefourfinancialinstitutions that will be the ground for Banco del Estado de Chile 100 years later. The oldest is Caja de Crédito Hipotecario (Mortgage Credit Fund) that was founded in 1855. All of them shared the characteristic of having a special focus on savings, entrepreneurship andthefinancialdevelopmentofthecountry.

The Organic Law of the Banco del Estado de Chile is issued, a norm that regulates the operation of the bank until present times.

BancoEstado’s subsidiary Microempresas is established, strengthening the smaller size productionsectorwithspecificemphasisanda team of specially dedicated professionals.

1855 – 1926 1953 1978 1990 – 2000 1996 2000 – 2002

Banco del Estado de Chile is founded from the merger of the Mortgage Credit Fund, the National Savings Bank (Caja Nacional de Ahorros), the Agrarian Credit Fund (Caja de Crédito Agrario) and the Industrial Credit Institute (Instituto de Crédito Industrial), as an autonomous State enterprise, with legal personality and its own assets.

Inthisdecade,afirstinternalmodernizationprocess is implemented, focused on strengthening the institution’s social role, updating their administrative systems andconcentratedonefficiencyandbettercompetitiveness with the rest of the industry.

Banco del Estado de Chile takes the brand nameBancoEstado,reaffirmingitssocialrole and origin as a public bank, but from a vision more current and modern.


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2005 2006 2011 2015 2016 2018

CajaVecinastarts,thefirstcorrespondentnetwork in Chile, improving the connectivity of customers with the bank and easing access tobankingservicesunderasimplifiedformatlocated in neighborhoods.

A new milestone emerges in the country’s bankingsystem:CuentaRUT,adebitaccountthatnowexceeds11.2millioncustomers.

Within the framework of the country’s Bicentennial,wecelebratethefirst100years of branches Bandera, Talcahuano and Quillota, among others, also reopening those seriously damaged by the earthquake of 2010.

The program “CreceMujer Emprendedora” is created, an initiative that empowers small and micro enterprises led by women, promotingtheiraccesstothefinancialsystemthrough tools that allow them to improve their businesses.

The bank becomes responsible for the compensation payment of toilet paper, the firstandlargestinthehistoryofChile,withmore than 10 million transactions.

Compraquí is launched, a transaction acquisition network for debit and credit cards operated by subsidiary Global S.A., installingthefirst10thousandpointsofsale.

Thefirstmobileapplicationoftheentityislaunched:PagoRUT,bringingthefinancialworld closer to customers in a simple, efficientandfreemanner.


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1.2.22018 Milestones_

We surpassed the 25,000 service points of CajaVecina.

We reached 11,555 stores with Compraquí

Consolidating the presence in the country, our correspondent network continued contributingtothefinancialinclusionofmillionsofpeoplewithinnovativeformatssuchasthefirstCajaVecinainstalledinahutand3,253newpointsofservice.

Active branchDuring 2018, we launched a set of projects aimed at accelerating and simplifying processesinourbrancheswithatwofoldpurpose:deliverabetterexperienceto our customers through faster service by using automated systems, shorter waitinglinesandlesswaitingtime;andimprovethequalityoflifeofourworkers.

We opened seven new branchesWithanofficenetworkthatin2018reached416branchoffices,wearrivedatLo Espejo, Pelluhue, Cisnes, Freire, Florida, Civic Center (Santiago) and Retiro, consolidating our mission to be where our clients are.

With a special focus on smaller stores and regions outside the capital of the country, more than 8 thousand small and medium size businesses and entrepreneurs joinedthissystemtopaywithdebitandcreditcardsofanyfinancialinstitution,becomingasolidaidtothecountry’sfinancialinclusion.

Set our 2018-2018 RoadmapThrough more than 600 meetings, involving the participation of 10,833 workers and968clients,wemettothinkanddefinethebankwewantonyear2028atlocal, regional and national scale. In this manner, we agreed about the bank we want to be 10 years from now.

We paid the compensation of the toilet paper court decisionWe were leading actors of the largest compensation payment in the history of Chile,whichinvolvedover10millionbeneficiaries.

We created the Agricultural Credit Risk OfficeInordertoexpandthebank’spresenceintheagriculturalindustry,particularlyamong small and medium-size companies, we created the Agricultural Credit Risk office.Thisinitiativealsoseekstoadaptthesupplyofcreditandrespondquicklyto the credit requirements of the agricultural and forestry sector.


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We surpassed the 25,000 service points of CajaVecina.

Cyber security and technologySeekingtosecureconfidentialityofourcustomers,aswellasintegrityandavailability of information, we implemented numerous improvements to our systems, including a new CuentaRUT card with chip and enabled the authorization for international purchases with it. We also established a Cybersecurity Master Plan focused on adding new tools and practices to minimize risk.

We continue making progress on improving our technological infrastructure with a world class second data center project, which would allow us better standards by year 2020.

We improved our performance at DJSIFor the second year in a row, we measured ourselves voluntarily against the Dow JonesSustainabilityIndex,noticeableimprovingoursustainableperformancewithrespectto2017’smanagement.Ourscoreexceededby11pointstheindustryaverage.

We issued the first social bondFollowingthetrendofinternationalmarkets,weissuedthefirstinstrumentwithenvironmental, social and governance (ESG) criteria.

We continue to expand our Financial Education ProgramsDuring2018,wefinanciallyeducatedover130thousandpeoplethroughdifferentface-to-face activities and over 800 thousand people through digital platforms. The program “Use Your Money Wisely” (Usa bien tu Plata) focused on junior and high school students for the entire country stands out among the classroom activities;andamongthedigitaloneswehave“En Fácil y en Chileno” and “CreceMujer”.

We contribute to the country’s savingsThrough our new mobile application, we managed to open 852,470 new savings accounts, promoting a national savings culture. In addition, we opened 154 thousand new APV clients, encouraging concern for future on the long term for our customers and citizens at large.

The bank’s efficiency index improvedDuring2018,BancoEstado’sefficiencyindeximproved,reaching58.3%

Open new financial marketsDuring 2018, the bank issued nearly US$1,800 million in bonds, highlighting the placement of US$1,000 million in international markets, mainly in USA, Hong Kong,Switzerland,Australia,Japanandexploring,forthefirsttime,Colombia,thus consolidating BancoEstado’s presence abroad. Likewise and following the globaltrend,weissuedthefirstsocialbondinthedomesticmarket,atoolwithenvironmental,socialandgovernancecriteria.Uponthesesignificantissues,investorsconfirmtheirconfidenceinourinstitution.

Memoria Integrada BancoEstado

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1.3 Awards and recognitions_

From different areas during 2018, our organization was rewarded by the contribution we madetothefinancialworld.

Safest and more solid bank in Latin America

For the seventh consecutive year, BancoEstado was recognized as the number one bank on security in the Latin American region. The award is part of The World’s Safest Banks ranking, prepared by the magazine Global Finance, which lists the safest banks in each region.

PagoRUT is chosen as the best financial inclusion project

BancoEstado’s application that allows customers to make electronic transfers from their mobilephones–evenintheabsenceofinternet–earnedfirstplaceinthefinancialinclusion category at the 11th version of the Model Bank Award contest. This award, granted by consultant Celent, distinguishes the best global practices on the use of technology for banking success.

BancoEstado Corredores de Bolsa obtains the first place in amount traded

Fortheeleventhconsecutiveyear,theSantiagoStockExchangerecognizestheleadershipofBancoEstado’ssubsidiaryCorredoresdeBolsainthefinancialintermediationmarketby reason of the volume of transactions completed in 2017.

Business with the highest number of job applications

TheCorporationwasawardedforthefifthtimeasthecompanywiththehighestnumber of job applications at the Professional Job Fair organized by Trabajando.com and focused on enrolling young professionals.

Best Large Business in Chile 2018

BancoEstadoreceivedthefirstplaceinthelargecompanies’categoryintheBestChile2018 ranking, awarded by Principal Financial Group. This award recognizes the bank bytheircommitmenttocontributetothewellbeingandfinancialhealthofitsworkers,identifying the best practices of the companies of the country. For third consecutive year BancoEstado is among the 10 best companies in Chile, being the only State entity being endowed.

Ninth place in the Corporate Sustainability Index

In the survey made by magazine Capital and Action Ability, BancoEstado ranked ninth placeamongthe124companiesevaluatedandfirstinthebankingindustry.Thisevaluation is made based on public domain information on management and performance in areas such as innovation, wage equity, environmental risks and commitment to the Sustainable Development Goals (SDG).

Emergent leader in the Global Bank’s Alliance for Woman

BancoEstado received an award in the category emergent Leader of the Global Bank’s Alliance for Woman. This award recognizes initiatives that contribute to economic empowerment of women, such as the BancoEstado’s CreceMujer program that provides toolsoffinancialeducationandentrepreneurshipadministrationtowomeninorderto improve their personal and familiar wellbeing, in addition to promote economic empowerment.


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BancoEstado among the best 25 companies of the Great Place to Work ranking

BancoEstado was ranked 23rd in the Great Place to Work 2018 ranking, where 210 organizations participated. This ranking evaluates in a multidimensional way the best places to work.

Study on Integration System of Global Agreement Principles

The Chilean chapter of the United Nations Global Agreement recognized BancoEstado in two of the categories of its study about Integrating the Principles of the Global Agreement. This year, our bank was nominated in the human rights category for its “Inclusion and Universal Attention” initiative and winner in the labor relations category for its “Gender Equilibrium” practice. The Global Agreement is a United Nations initiative that seeks to promote business management principles that leverage the Objectives of Sustainable Development proposed by the international organization.

Quantification Seal of the Chilean Footprint Program

BancoEstadowasthefirstbanktoobtainaQuantificationSealduetothemeasurementand validation of its carbon footprint under the Chile Footprint Program of the Ministry of the Environment. BancoEstado Corporation, along with subsidiaries ServiEstado, CajaVecina and Microempresas, is pioneer adhering to this program that seeks to generate internal skills and knowledge on the measurement of greenhouse gas emissions and its impact on climate change.

Adding value companies The joint initiative of Acción Empresas, Confederacion de la Produccion y el Comercio, Sociedad de Fomento Fabril and Global Agreement – Businesses Adding Value – acknowledged BancoEstado’s contribution to reach the Sustainable Development objectives. The selected cases correspond to the programs Atencion Universal (Universal Attention), CreceMujer, CuentaRUT, Equidad de Genero (Gender Equity), Emprende, OfertaFinancieraVerdeandCoberturaGeografica.


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1. Strengthen financial inclusion 2.0: more services and coverage: Consolidate the bank as a leader in the country’sfinancialinclusion.

2. Promote a culture of national savings: Be the savings bank of all Chileans, empowering family savings and fostering a long term savings culture on people of all ages.

3. Drive economic development supporting small size companies: Increase the territorial coverage of our services, enhance entrepreneurship and ensure an attractive funding and give advice to small and micro size businessmen of the country.

4. Guarantee we are a trusted and secure bank: offer anexcellentlevelofoperationalcontinuityandsecurityon information matters.

5. Have a motivated human team, prepared and dynamic: encourage training instances, update skills and knowledge of employees, offering real opportunities of personal development to workers.

1.4 Strategic Plan 2018-2022_

Seekingtoprofilethenewadministrativecyclewestartedduring2018,ourExecutiveCommitteesetforthfivestrategicaxesinordertoguideBancoEstadoeffortstoanticipateand respond to demands, interests and urgencies of our community of clients.

Eachofthesestrategicaxesiscarriedoutprogressivelyandintunewithourinterestgroups,so as to maintain BancoEstado’s leadership and competitiveness in the short and long term. That is the rationale behind our Annual Report with the intent on reporting the actions throughout the year to serve these objectives. Likewise, we have decided to homologate them to our material and/or critical management issues, understanding that from here to 2022, we will be facing these challenges.


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Given the relevance of the Strategic Plan 2018-2022, we structured this document in termsofitsfiveaxes,addingasixthonerelatedtotheworkBancoEstadodoeswithitsenvironment, from the community and environmental management. From there, it follows theexistenceofsixcriticalmanagementmattersthatcomprisethecorporation’stask,safeguarding the proper functioning and sustainability in each of its processes.

Forthemethodologicalpurposeofthisdocument,theaxesabovehavebeenidentifiedas the material issues of the 2018 Integrated Annual Report, in accordance with the new standards of the last version of the GRI Guide, prepared by the Global Reporting Initiative organization and constitute the Communications in Progress for the Global Agreement of the United Nations.

Likewise,italsofulfillstherequirementsoftheSuperintendenceofBanksandFinancialInstitutions (SBIF) as well as the principles of the International Committee of Integrated Annual Reports proposed by the International Integrated Reporting Council (IIRC).

Theprioritizationofeachofthesematerialissuesisananswertoamethodologyexercisebased on reviewing secondary information of the bank and its different interest groups, ontopofcarryingoutmorethan15interviewstomainexecutivesofthebankanditssubsidiaries.

1.5 On this Integrated Annual Report_

Infl

uenc

e on

eva

luat

ions

and

dec

isio

ns o

f gr

oups

of

inte

rest

Importance of economic, social and environmental impactsLow

High

High

High impact for the interest groups

Low impact for groups and business

High impact for business and interest groups

Promote national culture on savings

Expandanddeepenfinancialinclusion

Motivated, prepared and dynamic team

A trusted and safe bank

Support small size business

High impact for business

In tune with our environment

TheinterestgroupsofBancoEstadoare:

Workers Customers Community Suppliers

To the date, there is no prioritization of such groups at the corporate level, bearing in mind to that end the traditional mapping methodologies of interest groups.

The incorporation of these groups in the process to prepare this Integrated Annual Report was the result of their participation in the BancoEstado meetings achieved throughout the year.

Source: BancoEstado


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Technical Data BancoEstado 2018 Annual Report

• This Report includes the performance between January 1 and December 31, 2018, of the BancoEstado Corporation, including its nine subsidiaries.

• The last Integrated Annual Report was published in April 2018, referring to the performance of the company in 2017.

• Coverage of the consolidated Financial Statements (EE.FF.) is the same for all the data of the Integrated Annual Report, covering 100%ofthecorporation,unlessspecifiedotherwise.

• This document complies with all the requirements called for by the Superintendance of Banks and Financial Institutions (SBIF).

• This Report is aligned with the principles of the International Committee of Integrated Memories proposed by the International Integrated Reporting Council (IIRC).

• Follow up on the principles distributed by the Global Reporting Initiative in its new standards for reporting quality matters.

• This Report is prepared following the “Essential” option of the New GRI Standards.

• ToanswerquestionsorqueriesaboutthisAnnualReportandtheinformationitcontains,youcanwritetothefollowingemail:[email protected]

Regarding the material issues indicated in the 2017 Annual Report, these are included in the issues raised for this edition, since they are an integral part of the management of our bank, as follows.

2018 Material Issues

Expandanddeepenfinancialinclusion

Promote a culture of national savings

Promote development by supporting small businesses

Guarantee we are a trusted and safe bank

Have a motivated, prepared and dynamic team

In tune with our surroundings

2017 material issues

• Financial inclusion and coverage

• Financial education

• Empowerment of women (clients)

•Clients’experience• Probity• Digital banking and transformation

• Empowerment of women (internal)• Quality of life and labor relations

• Work with the State• Support to the community• Environmental contribution

1.5.1 Committed to the Objectives of Sustainable Development_As part of the 193 member countries of the United Nations Organization (UNO), Chile adopted in September 2015, the 2030 Agenda for Sustainable Development, which is a plan of action in favor of the people, the planet and the prosperity that it has for objective to strengthen the universal peace within a broader concept of freedom.

The 17 Sustainable Development Objectives (SDOs) and their 169 goals demonstrate how ambitious is the universal agenda signed by the countries. Those objectives are solely reachable with the joint effort

of the participating states, their business and citizens.

As a public bank, and in line with our commitment to be protagonists of our environment, we have joined this challenge through programs and initiatives that within our scope of action contribute to reach these important objectives.

Thus, throughout this Integrated Annual Report, those initiatives that contribute to the achievement of the objectives are highlightedandtheyareidentifiedwithaspecificsymbol.

mailto:[email protected]

2.BancoEstado profile_


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2.1 Corporate Governance_As stated in our Organic Law, there are two fundamental bodies that make up the Corporate Government of our bank, the Board of Directors in charge of the top management of the CorporationandtheExecutiveCommittee,responsibleforouradministrationandoperation.

2.1.1 Board of Directors_The top management of BancoEstado is entrusted to our Board of Directors, a collegiate bodycomposedofsevendirectors,sixofthemappointedbyExecutiveDecreeofthePresident of the Republic and one representing the workers of the corporation, who together with his alternate, is elected by direct vote of our workers.

TheBoardofDirectorsdefinesthebank’sgeneral policies, dictates and supervises its operations and sets the internal rules of our organization. Also, the Board is in charge of approving the compensation system, determine the opening or closing of new branches in Chile orabroad,approvethefinancialstatementsandthe annual report and inform the President of the Republic on the operation and development of the company, also proposing the destination ofprofitsattheendofeachterm.

Chairman of the Board:Arturo Tagle Quiroz1

Vice chairman:Pablo Correa Rodríguez2

For more information regarding the functions of the Board of Directors, visit this link.

1Mr.ArturoTagleQuiroztookofficeaschairmanonMarch16,2018,replacingMr.EnriqueMarshallRivera2Mr.PabloCorreaGnzaleztookofficeonApril26,2018,replacingMr.JuanFoxleyRioseco3 These members of the Board of Directors assumed their positions as of April 26, 2018. On the same occasion, Ms. Iris Boeninger Von Kretschmann was appointed director, upon resigning on November 30, 2018, as ambassador of Chile in Uruguay.

4 The regular and alternate labor counselors were elected in August 2018 for the period 2018 – 2020.

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Directors:Edmundo Eluchans UrendaPaola Assael MontaldoRoberto Palumbo Ossa3

Labor Director:Edith Signe GonzálezAlternate:Jaime Soto Fuentes4

https://www.corporativo.bancoestado.cl/investor-relations/corporate-information/bancoestado-executives


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2.1.2 ExecutiveCommittee_

ThetopmanagementofthecorporationisbasedonourExecutiveCommittee,composedbythebank’schairman,thevicechairmanandthechiefexecutiveofficer,appointedbythe President of the Republic.

The functions of the committee cover the entire administration and operation of the bank, andmayagree,executeandcelebrateanyactforthefulfillmentoftheobjectivesofthebank. In particular, the committee sets the conditions and mode of operations, approves the annualbudgetforinvestmentsandexpenses,supervisescompliancewithagreements,rulesand instructions and periodically informs the board about the operation of the company.

Executive CommitteeChairman:Mr. Arturo Tagle QuirozVice chairman:Pablo Correa GonzalezChief Executive Officer:Mr. Juan Cooper Alvarez.

For more information regarding the functions of theExecutiveCommittee,visit this link

Arturo Tagle QuirozChairman

Business Administrator graduate from PontificiaUniversidadCatolicadeChileandMaster of Arts in Business Administration from the University of Chicago. Between 1984 and 1989, he worked in the Department of Studies of the Superintendency of Banks and Financial Institutions (SBIF) becoming director. Between 1990 and 1994, he headed the Association of Banks and Financial Institutions(ABIF)asChiefExecutiveOfficer.In 1995, he joined Banco de Chile, where he was CEO between year 2010 and 2016 andCEOofHeadOfficeofBancodeChilebetween 1996 and March 2017. He also worked as vice chairman of the board of directors at Inacap Institute and director of life insurance company Confuturo. On March16,2018,hetookofficeasChairmanof BancoEstado.The chairman is the one who oversees the overall command of the company, leads the sessionsoftheExecutiveCommitteeandthe Steering Committee and is responsible for conducting the bank’s relations with public authorities and other banking and financialentities.

Pablo Correa GonzálezVice Chairman

Business Administrator graduate from PontificiaUniversidadCatolicadeChileand Master of Arts in Economics from the same university, as well as Master of Arts from the School of Government of Harvard University. In 2004 he was a consultant for the Finance and Infrastructure, Region I Division (Argentina, Brazil and Chile) at the Interamerican Development Bank. In 2006, he worked as a senior economist at the Central Bank of Chile. Between 2006 and 2010 he worked as a Planning Manager and Chief Economist at Banco Santander. He was also a board member of Essbio between 2010 and 2011 and Capital Markets Coordinator in the Ministry of Finance between 2010 and 2012. Between 2012 and 2016, he worked as Chief Economist of the Santander Chile Group and as manager at the Division of Communications, Studies and Public Policies in Banco Santander. On April 26, 2018, he took over as Vice Chairman of BancoEstado. The vice chairman is responsible for subrogating the chairman in his attributions in case of absence, vacancy oranyothercause.Likewise,heexercisesall those functions and attributions that theBoardofDirectorsandtheExecutiveCommittee assign to him.

Juan Cooper ÁlvarezChief Executive Officer

Business Administrator graduate from Universidad de Chile and Master of Arts in BusinessAdministrationfromPontificiaUniversidad Catolica de Chile. He holds over30yearsofexperienceintheChileanbanking system. He was General Manager at the Consumption Loans Division of Banco Santiago between 1985 and 2001. Then he worked as General Manager of the life insurance company of Banco Santander, between 2001 and 2002. Later, he served as General Manager of Banco Credi Chile for 14 years, between 2003 and 2017. On April 10, 2018, he took over as CEO of BancoEstado. TheChiefExecutiveOfficerisresponsiblefor the general administration of the bank, reporting on the status and performance of the company to the Board of Directors and the coordination of the management with the general area managers. He also represents thebankonjudicialandextra-judiciallymatters and is responsible for submitting totheapprovaloftheExecutiveCommitteethe balance sheet and the annual report of our corporation.

https://www.corporativo.bancoestado.cl/organo-interno/47


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2.1.3 Other governance bodies_

Legal DepartmentThisunitisresponsiblefordeliveringlegalservicestothebank;also,itmustsupervisecompliance with current policies and laws. It also must provide legal advice on administrative and organic matters to the bank, subsidiaries and areas.

General Counsel: Isabel Margarita Cabello SilvaAttorneyatLawfromPontificiaUniversidadCatolicadeChileandMasterofArtsonBusinessLawfromUniversidadAdolfoIbañez.Sheholdsampleexperienceonbanklegislation,insurance,securities,corporategovernanceandregulatedfinancialindustry.UntiltheendofAugust 2018, she worked as manager of Legal Affairs and Governance at Banco Falabella. Priortothat,shewasatBancoEstadoasAuthenticatingOfficer,coordinatorcounselofthe Finance and Corporate Group, as well as director of BancoEstado Corredores de Bolsa. On October 1, 2018, she was appointed prosecutor at BancoEstado.

ControllerThe controller is responsible for the internal inspection and supervision of accounts, services and areas of the corporation and contributes to protect and safeguard the bank’s equity. The unit works independently from the administration, as stated in our by-laws. The report ofCorporateGovernance,verificationofriskmitigation,evaluationandrecommendationof improvements of internal control of the bank and subsidiaries are part of his functions.

Comptroller: Pedro Bolados MoralesHe holds an Auditor degree from the University of Chile and graduate studies in Business AdministrationfromPontificiaUniversidadCatolica.HeworkedatCitibankbetween1985and 1993. Then, he worked at Banco Edwards between 1993 and 1998, and at Banco de Chile between 1998 and 2008. In 2009, he became BancoEstado’s controller.

Compliance OfficeThisunitisresponsibleforthepreventionandearlydetectionofmoneylaundering;thedirectoristheComplianceOfficeronthesemattersandrepresentativeofthebankinthecommittee on this matter in the Association of Banks and Financial Institutions (ABIF). Add to that, this unit supervises that the bank workers’ conduct is aligned with the ethical values of the institution, avoiding patrimonial damage, image or reputation. All of the above based on the application of the crime prevention model established by Law Nº20,393 on Criminal Liability for legal entities.

Compliance Director: Álvaro del Barrio ReynaHeholdsanattorneyatlawdegreefromPontificiaUniversidadCatolicadeChileandgraduatestudiesfromEconomyatFacultaddeEconomiaofUniversidaddeChile.Hewasthefirstprosecutor at the Financial Analysis unit. In 2010 he accepted the position of Director of Corporate Compliance of BancoEstado and its subsidiary in New York, United States.

ThefunctionsoftheExecutiveCommitteearecomplementedbyotherbodiesthatarepart of the Corporate Governance of our company, supporting its operational functions and deploying the instruments of internal control.


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Audit CommitteeThis committee is responsible for ensuring the proper functioning of all aspects that involve maintenance and application of internal controls of the Corporation. Likewise, it monitors compliance with standards and procedures that rule their operation and analyzes the risks the bank may take on its business deals. Its function is complementary to the Organic Law the bank entrusts to the Comptroller.

President: Roberto Palumbo OssaMembers: Pablo Correa González Paola Assael Montaldo Guillermo Ramirez Vilardell Gustavo Favre Dominguez.

Compliance and Conduct CommitteeThe objective of this committee is to secure compliance at BancoEstado and subsidiaries with the current legislation on matters of Money Laundering and Financing of Terrorism, Criminal Liability of Legal Entities, Free Competition, and the application of the Code of Conduct for the Stock Market, Ethics Manual and Internal Regulation of Order Hygiene and Safety. This contemplates what is contained in Law No. 19,913 and the regulations on free competition in Chile and the standards established in Chapters 1-14 and 1-16 of the RAN SBIF and the in force internal regulation of the institution and its subsidiaries.

President: Edmundo Eluchans UrendaMembers: Arturo Tagle Quiroz Juan Cooper Álvarez Pablo Correa González Isabel Margarita Cabello Silva.

Ethics CommitteeThe Ethics Committee of our bank seeks to improve practices and behaviors that promote an ethical culture in business and in particular in servicing our clients. It helps to promote andimprovepracticesandbehaviorsthatreflectourinstitutionalvalues,ourinternalrelationships as workers and the relationship with our clients.

President: Victoria Martinez OcamicaMembers: Isabel Margarita Cabello Silva Marcelo Hiriart Vergara Alvaro del Barrio Reyna Technical secretary: Rodrigo Ode Perez

Risk CommitteeTheRiskCommitteeisresponsibleforproposingtotheExecutiveCommitteeriskpoliciesoncredit,operationalandfinancialmatters(policiesonvaluation,liquidityandcreditrisk for clients of the CFO) in addition to ensure the bank and subsidiaries’ performance isconsistentwithariskleveldeemedreasonabletoundertaketoexecuteitsbusinessstrategy. Moreover, on matters of operational risk, the performance of the technological platform and the incidents will be taken into account.

President: Eduardo de las Heras ValMembers: Arturo Tagle Quiroz Pablo Correa González Juan Cooper Álvarez Andrés Heusser Risopatrón Leopoldo Quintano Hartard Julio Guzman Herrera Rodrigo Collado Lizama Oscar Gonzalez Narbona Isabel Margarita Cabello Silva.


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2.1.4General Area Managers_

ThegeneralmanagersofeachareaareresponsibleforexecutingtheguidelinesoftheExecutiveCommitteeintheirareaofcompetenceunderthesupervisionoftheChiefExecutiveOfficer.

For more information about the functions of the General Area Managers, visit this link.

Branch Management Manager DivisionMarcelo Hiriart VergaraMarketing and Quality Manager DivisionLeopoldo Quintano HartardPlanning and Management Control Manager DivisionOscar González NarbonaOperations and Systems Manager DivisionRodrigo Collado Lizama

1_ 2_ 3_

4_ 5_ 6_

7_ 8_ 9_

General Credit Area ManagerAndrés Heusser RisopatrónChief Financial Officer; Julio Guzmán HerreraGeneral Administration Area Manager DivisionVictoria Martínez OcamicaCorporate Risk Manager DivisionEduardo de las Heras ValCommunications and Sustainability Manager DivisionJonás Preller Roldán

https://www.corporativo.bancoestado.cl/organo-interno/49


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ComptrollerPedro Bolados Morales

ChairmanVice ChairmanDirectors

Arturo Tagle QuirozPablo Correa GonzálezPaola Assael MontaldoEdmundo Eluchans UrendaRoberto Palumbo Ossa

Labor Director Edith Signé RodríguezJaime Soto Fuentes

Executive Committee

ChairmanVice ChairmanCEO

Arturo Tagle Quiroz Pablo Correa GonzálezJuan Cooper Álvarez

Board of Directors

Chief Executive Officer

Juan Cooper Álvarez

General CounselIsabel Margarita Cabello

Silva

Director of Compliance

Álvaro del Barrio Reyna

Planning and Control Mgr.

Oscar González Narbona

Communications Mgr.

Jonás Preller Roldán

CFOJulio Guzmán

Herrera

Corporate Risk Mgr.

Eduardo de las Heras Val

Operations and Systems Mgr.Rodrigo Collado

Lizama

Credit Mgr.Andrés Heusser

Risopatrón

Branches Mgr.Marcelo Hiriart

Vergara

Marketing and Quality Mgr.

Leopoldo Quintano Hartard

Administration Mgr.

Victoria Martínez Ocamica


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2.2 Subsidiaries and Related Entities_The subsidiaries and related entities are essentialforthefulfillmentofourmission,allowingustorespondinamoreefficientand transversal manner to our clients’ needs throughoutthecountry,currentlyfulfillingastrategic role in the economic development of our country.

BancoEstado S.A. Administradora General de FondosThis entity specializes on providing investment solutions to companies, institutions and individuals through mutual funds. In this manner, it seeks to grant large access to qualityfinancialproducts,basedontrust,thetraditional solvency of BancoEstado and the experienceattheworldlevelmanagingassetsand investments of its strategic partner, BNP Paribas Asset Management Fund.

General Manager: Pablo Mayorga Vásquez

BanBancoEstado Centro de Servicios S.A.This entity, which operates under the ServiEstado brand name, complements the offeroffinancialandnon-financialservicesof our bank, allowing making drafts, deposits and payments associated to BancoEstado products through a network with over 100 branches nationwide that operate with extendedbusinesshoursfrom9amto7pm Monday to Friday and 9am to 5pm on Saturdays.

General Manager: René Esquivel Cabrera.

BancoEstado Contacto 24 horas S.A.This subsidiary is in charge of managing the telephone service of our customers providing information and remote assistance to our customers in the sales and post-sales stages of our products. The contact center is located in the Lota community, being a pioneering project to decentralize services and strengthen employment in that area.

General Manager: Jimmy Molina Molina

2.2.1 BancoEstado subsidiaries_


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BancoEstado Corredores de Bolsa S.A.Thisentitywasthefirstsubsidiaryofourbank and has the mission to accompany natural persons and small and large companies through stock market investment products at competitive and transparent costs.

General Manager: Eugenio Echeverría Olivares

BancoEstado Corredores de Seguros S.A.This subsidiary’s objective is to offer bank customers a wide range of insurance policies, at low prices and with the best coverage, reaching at segments that due to their socioeconomic status do not have access to these products. This operation has Metlife Chile Inversiones Ltda. as a strategic partner, which owns 49.9% of the property.

General Manager: Cristián Wolleter Valderrama

BancoEstado Microempresas S.A. Asesorias FinancierasHolding more than 20 years of operation, this subsidiary’s objective is to promote equal opportunities’ funding to Chilean entrepreneurs, especially among the smallest ones, substantially helping the national economic development.

General Manager: Emilio Vélez Hormazabal

BancoEstado Servicios de Cobranza S.A.This subsidiary seeks to normalize and protect the bank’s assets, supporting them by way of entrepreneurship and development of all clients, in particular those who are undergoing a default status.

General Manager: Carlos Eterovic Urzúa

Red Global S.A.Red Global was incorporated in February 2017 as a draft supporting business (Sociedad de Apoyo al Giro, SAG) and subsidiary of BancoEstado with the mission to support the economic and social development of the country through the implementation of a new acquisition network under the brand name Compraqui. With Compraqui, thousands of small and micro businesses, as well as self-employed workers, will be able to accept payments with credit and debitcardsfromallbanksandnofixedcosts. Compraqui is the result of a strategic alliance between BancoEstado and SumUp Limited, a company that is leader in the mobile payments industry in the world.

General Manager: Carlos Schaaf Raposo

Sociedad de Servicios Transaccionales CajaVecina S.A.CajaVecina is a banking correspondent network that operates through neighborhood stores installed all over the country, thus generating the widest and friendly offer of banking services and nearby banks, through a network of more than 25 thousand points distributed throughout the national territory.

General Manager: Marta Jancso Acuña


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2.2.2Related and associated entities_BancoEstadoparticipatesinanumberofinstitutionsandalsoholdsallianceswithothercompaniesinordertoexpanditsserviceofferhandinhandwithexpertentitiesattheworldlevel.

Related entitiesOn these companies the bank has some kind of business relationship.

Entity Percentage RUT Description

Administrador Financiero Transantiago S.A.

21% 99.597.320-0 Closed company to support banking functions, in charge of the financialadministrationofTransantiago,thepublicpassengertransportation system in the city of Santiago.

Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A.

14.96% 99.571.580-5 Closed company that operates an electronic clearing house system thatallowsthetransferofpaymentsinrealtimeamongfinancialinstitutions, as well as the hand over process against payment to liquidate operations of the Stock Market.

Operadora de Tarjetas de CréditoNexusS.A.

12.9% 96.815.280-7 Credit card operator that offers support services to the banks, such as account processing of credit cards, authorize transactions and fraud management and prevention.

Transbank S.A 8.71% 96.689.310-9 Support company in charge of credit and debit card administration.

IMERC-OTC S.A. 14.60% 76.307.486-2 Closedcorporationthatprovidesaplatformtothefinancialmarketprovidingregistryservices,confirmations,storageandconsolidationofoperations with derivative instruments.

http://transantiago.cl/


https://www.combanc.cl/Publico/Index.aspx




https://www.nexuschile.cl/


https://www.transbank.cl/

https://www.comder.cl/?page_id=411


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Associated entitiesAre those companies in which, without controlling it, the entity owns directly or through another natural person or legal entity 10% or moreofitscapitalwiththerighttovoteorcapital;ifitisnotacorporation,ormightchooseordesignateorhaveelectedorappointedat least one member of the board or its management.

Entity Percentage RUT Description

Administrador Financiero Transantiago S.A.

21% 99.597.320-0 Closed company to support banking functions, in charge of the financialadministrationofTransantiago,thepublicpassengertransportation system in the city of Santiago.

Sociedad Operadora de la Cámara de Compensación de Pagos de Alto Valor S.A.

14.96% 99.571.580-5 Closed company that operates an electronic clearing house system thatallowsthetransferofpaymentsinrealtimeamongfinancialinstitutions, as well as the hand over process against payment to liquidate operations of the Stock Market.

Operadora de Tarjetas de CréditoNexusS.A.

12.9% 96.815.280-7 Credit card operator that offers support services to the banks, such as account processing of credit cards, authorize transactions and fraud management and prevention.

IMERC-OTC S.A. 14.60% 76.307.486-2 Closedcorporationthatprovidesaplatformtothefinancialmarketprovidingregistryservices,confirmations,storageandconsolidationofoperations with derivative instruments.

For more information about the functions of related and associated entities, visit this link.









https://www.comder.cl/?page_id=411

https://www.corporativo.bancoestado.cl/transparencia/filiales-y-entidades-relacionadas/entidades-relacionadas


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2.3 Our management grounds_

2.3.1Mission, vision and corporate values_Mission:weexisttomakeChileamoreinclusiveandequitablecountry,withopportunitiesforeveryone.

Vision:Weareastateownbank,committedandefficient,workingforthedevelopmentofthecountry and all Chileans.

Culture:Theservicethatweprovidedaytodaytoourclients,allowsustofulfillourmissionandreachourvision.Tothatextent,wedeepenthepillarsofaculturecenteredandcommittedto customers, seeking to empathize with their realities and needs and place them in our hearts.

Corporate values:• Inclusion: At BancoEstado everyone has a place, regardless of their condition. Our servicesareavailabletoeveryone,withequaldignityandexcludingnoone.Itispartofour hallmark.

• Work of excellence: Our challenge is to perform a high quality work in all our areas, particularly in customer service. We service more than 13 million customers and we must ensure adequate response times, high quality, ease of use and services 24/7.

• Responsibility: We are the Banco del Estado de Chile and that forces us to act responsibly, taking care of everyone’s assets, and ensure their sustainability and reputation. Internally, toaccountforourobligationsandajobwelldoneisanessentialpillartoreachexcellencyin our tasks.

• Commitment: We are committed to a more fair country and with opportunities that reach everyone. We support the development of people and their entrepreneurship in business and organizations, so Chile can grow. The commitment of every worker to honor our mission and vision day by day is transmitted to our clients and is part of our objective to deliver the highest quality in our service.

• Collaboration: The collaborative work between our teams and different state agencies allows us to enhance our services and our contribution to the country. That will be possiblebydevelopingconfidenceandvalorizationspacesofthecounterpart,alloftheabove based on the fact that we share a common project for BancoEstado.

Ouroperationhassolidpillarsthatexpressby themselves in our services, products and especially in the internal culture of our company.


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Ethic management in our institution is carried out through the Ethic Committee, the Compliance Department and the Compliance and Conduct Committee. To move towards the highest standards of integrity and transparency, our bank deploys an important training program accompanied by tools that includeanautonomouschannelexternallyauditedtoresolvequeriesand

complaints to privately receive the requirements of our workers or any person related to the organization.

Onthismatter,weemphasizetherecertificationoftheCrimePreventionModel,theLawNº 20,393 on Criminal Liability of Legal Persons for BancoEstado and subsidiaries, by an externalcompanyrecognizedbytheFinancialMarketCommission.Withthiscertification,we seek to have a rigorous model of crime prevention management to which our employees mightbeexposed.

Regarding the Prevention of Money Laundering, during 2018 we developed in-person training courses and a new e-learning one, focused on the role of commercial platforms, whichwillbedeployedduringthefirstsemesterof2019.

The list below shows the training courses implemented on various subjects. Details on thenumberoftrainingmattersareasfollows:

2.3.2Ethic and integrity management _

Course name Total training sessions

Attendees Total training hours

Free Competition 1 30 2

Money Laundering 25 2,271 50

Ethics and Compliance – Crime Prevention Model (Law 20.393)

45 3,059 90

InternalandExternalFraud 16 1,926 32

Operational and Technological Risk

8 398 24

Inquiries and reports on ethical matters32 opinions were issued as per the following detail,includingpotentialconflictofinterestssuch as trips, gifts, invitations, participations atevents:

• Travel: 16All of them authorized

• Gifts: 1110 authorized1 non-authorized

• Others: 5Invitations, participations, other activities, etc.4 authorized1 non authorized

• Complaints received through the Money Laundering Prevention Office: 153

• Complaints received through the complaints channel:Robbery, theft or non-authorized use of goodsandservicesofBancoEstado:17Othertypeoffraud:50

• Complaints and procedures for work and/or sexual harassment:Sexualharassment:8Workharassment:15


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Together with our values, our activities are regulated and bordered by a complete regulatory frameworkthatestablishesourgeneraloperatingconditionsandacontextwhereintodevelop our policies and guidelines.

Within this normative framework, we highlight the following essential documents for our management:

• The Organic Law of Banco del Estado de Chile, which establishes our creation as an autonomous corporation of the State, as well as the action frameworks of our operation.

• Inforcelegislationandrulebooksapplicabletotheentirefinancialindustry,whichareexternallysupervisedbytheSuperintendencyofBanksandFinancialInstitutions(SBIF)andinternallybyourownExecutiveCommittee.

• Ethics Manual, consisting of the group of guidelines that regulate labor relationships among workers throughout the Corporation, jointly with the main interest groups.

• Purchasing Policy regulates business relationships and the processes of purchasing products and services.

• PolicyforPoliticallyExposesPeople(PEP)fulfillingthecontentofCircularW-49ofthe Financial Analysis Unit and Chapters 1-14 and 1-16 of the updated compilation of the Superintendency of Banks and Financial Institutions.

• Manual of Promotion of Free Competition, which seeks to guide our operation in a framework of fostering market competition. In turn, it contains guidelines to prevent eventualconflictsofinterestonfreecompetitionmatters.

• Manual of Standards and Procedures for the Prevention of Money Laundering and Financing of Terrorism, which includes a number of policies aimed at preventing laundering assets, in line with the provisions of Law No. 20,393.

• Auspices Procedure, which aims to establish the criteria and procedures to evaluate, grant and formalize sponsoring private and public entities or organizations of the civil society,clearlyestablishingrestrictionsduringperiodstocontractfinancialservicesandpublicofficialselectoralperiods,thussafeguardingthetransparencyoftheprocesses.

The regulatory framework is available on this link.

https://www.corporativo.bancoestado.cl/transparencia/marco-normativo


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2.4 Sustainability_

The development of each of our activities is basedonfulfillingourinstitutionalmission,which in addition to drive us to work for being the company most loved by Chileans and the best public bank in the world, challenges us to be a powerful public policy tool that accompanies the country in the construction of its path towards its integral development.

In this way, we actively seek to be protagonists of the communities and territories where we are present, generating alliances and projects with other entities of the State to support the deployment of public policies and promote the economic and social development of Chile.

This commitment is shown through diverse cross-cutting objectives of our institution, in the Strategic Pillars 2018- 2022 and especially in our Corporate Sustainability Policy.

The main objective of our Corporate Sustainability Policy is to continue to advance the contribution we have made during our 163 years of history to the country’s development,socialandfinancialinclusionthrough a responsible and coherent conduct, capable to integrate the economic, social and environmental contribution in our policies, processes and products.

We are convinced that the economic development of Chile goes hand in hand with its social and environmental progress andthatasastatefinancial institution,we may activate multiple actors generating importantchangesthatbenefitthecountryand its people.

You can check our Corporate Sustainability Policy in this link.

Thus,inourrelationshipwiththeenvironmentweseekespecially:

• Promote territorial integration, especially in the most remote or least developed areas, providing them coverage and availability, through the different channels of service.

• Active participation in the community where we are present, mainly in locations where we are the only bank, through an integrating role, contributing to the construction of the social fabric jointly with organizations of the civil society and state institutions.

• Contribute to the decentralization objective and with it to the development and local promotion.

• Strengthen different areas of interaction with the state administration to improve its offer and facilitate the deployment of public policies.

• React urgently to contingencies and natural disasters, avoiding breaking the chain of payments.

• Promote the financial and digital education of the community, generating more opportunities.

That is why we work every day to generate a value offer that positively impacts the entire national territory, immersed with the deep conviction that our products and services drive the development of our environment and of all Chile. We reach these objectives through programs, products and services conceived from the social role that is in our DNA and come cross all matters presented in this annual report.

From the above, we have coordinated initiatives from the sustainability area that include topicssuchas:• Financial education• Universal customer service• Greenfinancialoffer• Social and environmental risk• Ecooperationalefficiency• Sustainable purchases• Gender balance

For more information on the social impacts of our management, visit this link

https://www.corporativo.bancoestado.cl/sites/default/files/documentos_archivos/170818_2PoliticaSostenibilidadCorporativa_B.pdf

https://huellasocialbancoestado.cl/en/


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2.4.1 Measuring Dow Jones Sustainability Indexes_

For the second consecutive year, we participated in the measurement made by consultant bureau Robeco SAM with Dow Jones Sustainability Standards, notably improving our sustainable performance over the management practice of the previous period.

We achieved a score that, if quoted on the Stock Exchange, would allow us to access the DJSI Chile and Integrated Markets in Latin America (MILA) index, surpassing by 11 points the industry average and ranking above 59% of the banks measured worldwide.

TheDowJonesSustainabilityIndexesconsistof a set of metrics that, Including them into the company’s management model, they allow to detect gaps, especially in plans, indicators, goals, monitoring, corrective actions and transparency among other actions, which help to improve management and approach the “best in class” rank.

2.4.2International Commitments and Alliances_

Global CompactWe are part of the Global Agreement Network, an initiative led by the United Nations (UN) in which more than of 10,000 companies around the world participate while committed to improve their sustainability standards. https://www.pactoglobal.cl

Commitment to Sustainable Development GoalsWe have assumed the commitment to contribute from our place and management tothefulfillmentoftheglobalgoalssetforthby the United Nations to reduce inequalities worldwide. http://www.undp.org/content/undp/es/ home / sustainable-development-goals.html

Principles of gender empowerment of the UNWe have signed the principles of gender empowerment promoted by the United Nations,contributingthroughourfinancialand non-financial services offer to the economic and labor empowerment of women. http://www.weprinciples.org

Business ActionWe are part of the network of companies that work to improve the economic, social and environmental performance in Chile. ACCIÓN EMPRESAS is the representative in Chile of the World Business Council for Sustainable Development (WBCSD). http://www.accionempresas.cl

https://www.pactoglobal.cl

http://www.undp.org/content/undp/es/home/sustainable-development-goals.html

http://www.weprinciples.org

http://www.accionempresas.cl


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Empresas BTwo of our subsidiaries, Microempresas andCajaVecina,arecertifiedasEmpresaB,awardedbySystemB international;CajaVecina holds one of the companies with the highest international score.http://sistemab.org

Dow Jones Sustainability IndexesWe are part of the corporations analyzed by Robeco SAM through the Dow Jones SustainabilityIndexes.Wehaveincorporatedit as continuous and voluntary practice at BancoEstado aimed at integrate into our management those elements that are currently being valued by the markets. https://www.sustainability-indices.com

Alliance to fund mortgages with energetic efficiencyWe have signed an agreement with the German bank KfW that seeks through funding toraisetheenergyefficiencystandardsinnewhousesthatholdanenergyefficiencycertificationabovetheChileanstandard.

Agencia Chilena de Eficiencia EnergeticaWe hold a technical alliance for the design and evaluation of green funded products. We signed a collaboration agreement with the Ministry of Energy for the design of green financialproductsaswellaswiththeChileanAgencyforEnergyEfficiencythattechnicallyevaluates non-conventional renewable energyprojectsonenergyefficiencybeforefunding them, as a manner to secure their contribution to the environment.

Agreement with Instituto de Prevision SocialWe also hold an agreement with the Social Security organization for the payment of pensions. We are a payment channel for pensions for more than 197 thousand people, offering them alternatives so their payment isfasterandmoreexpeditethankstoourcoverage and service network.

Agreement with the National Health Fund (FONASA) for the issuance of medical vouchersWefacilitatethepaymentofmedicalbenefitsvouchers to more than 10 million users of the public health insurance system allowing them to obtain their vouchers through the more than 25 thousand CajaVecina points throughout Chile

Finally, it is worth mentioning a number of alliances with other State institutions, shown in article 9.3.3 of this Integrated Annual Report.

http://sistemab.org/

https://www.sustainability-indices.com


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2.5 Legislative changes_

2.5.1 New General Banking Law_OnJanuary12,2019,theOfficialGazettepublishedthelawthatmodernizesthebankinglegislationactapprovedbyCongressonOctober3,2018;itisthelargestamendmentinthe last 30 years to banking legislation.

This new regulatory framework updates the in force legislative regime according to international standards set forth in Basel III.

This implies that banks must increase and improve their capital. The former in terms of a quantitativeincreaseandthelaterinqualitativetermsonhowtoconfigurethestructureofsaid capital. Such increase and enhancement, according to a temporary article, establishes a termofuptofiveyearsfrombeingofficiallypublished.Likewise,itsdeterminationwillalsodepend on how the Commission for the Financial Market (CMF) regulates some subjects, whichwilldependoncertaincircumstancesspecifictoeachbankorhowriskweightsareregulated, among other matters.

The law also contemplates merging the SBIF by the CMF, which will occur more likely within oneyearfrompublishingthenewlaw;theadequacytothisregulatingandsupervisoryentity holds a collegiate corporate governance body and not a single authority as the current Superintendency.

Upon the adoption of the new banking law, the bank industry will abide by a regulation with the highest international standards, implying with it a stronger and better banking industry and better prepared to face crisis situations, either domestically or international.

Lastly,theexpectationisthatthroughthemodernizationofthebankinglaw,promotionand access to loans by small and medium size entrepreneurs increases.

2.5.2 BancoEstado:howwill it face the new banking legislation?_

BancoEstado has made estimates as to the resulting capital requirements from applying thelaw,whichwilldependtoalargeextentonthedefinitionstheCentralBankandtheCMF will set. The most relevant issues in this areaare:creditriskweights,systembankrequirements and perpetual instruments. In any case, the capital requirements may complete within the term established by the law and furthermore, part of these may be covered with new instruments that the law itselfindicatesandwiththeprofitsgeneratedby the bank in said period.


37_

3.Generalresults_


38_

3.1 Summary of 2018 results:_

3.1.1 Synthesis of results _

BancoEstadocontinuestostrengthenfinancialinclusionwithmoreservicesand coverage, promoting savings and encouraging economic development by supporting both people and small size business. Likewise, the bank has maintained a good commercial performance in the commercial area, accompaniedbysoundfinancialindicatorsthatreflectgoodmanagement

and secure its growth perspectives and sustainability.

Regardingfinancialinclusion,BancoEstadocontinuedtoexpanditspaymentmeanstomiddleandlowerincomesectorsofthecountry,exceeding11millionpeoplewithCuentaRUT,withwhich its participation in the total number of debit cards enabled in the banking system reached 57% at the end of 2018.

Complementary,thebankexpandedthedistributionnetwork,highlightingboththeincreaseof 3,253 new CajaVecina service points, with which these totaled 25,400 in all the country’s municipalities, and the consolidation of Compraquí, the new acquisition network that reachedover11,500smallbusinesses;addtothoseopeningsevennewbranches,locatedmainly in localities that did not count with bank branches. In turn, digital coverage bears a growing importance in a bank of more than 13 million customers that kept on growing so much that 4.2 million customers accessed BancoEstado through the internet (web) during 2018 and 3 million through the mobile web and/or the bank’s mobile application.

Regarding credit activity, the real growth of the bank´s total loans was 3.3% in 2018. BancoEstado’sgrowthwasdrivenbyindividualloanswhereconsumerloansexpanded10.7%, mortgages 5.4% and loans granted to small businesses (micro, small and medium size businesses) grew 7.4%.

Asofresults,incomebeforetaxofBancoEstadoandsubsidiariesin2018were25%higherthan prior yearin real terms, and reached $356 thousand million. With this result, the annual return (measured by the ROE) was 20.7%, which is higher than 2017’s and above thebankingsystem.Also,efficiencywas58.3%asofDecember2018,whichisbetterthan2017’s showing progress on operational income and a modest growth in support costs. The sustained improvement during the year made possible to reduce the gap between BancoEstado’s and the system ratio.

Finally, it should be noted that for the seventh consecutive year, BancoEstado was recognized in 2017 (recognition handed out in 2018) as the most secure bank in Latin America,accordingtotherankingmadebymagazineGlobalFinance,whichreflectsthepermanent concern of the bank to improve customer service, maintain adequate levels of risk-returnandcontrolexpenses.


39_

3.1.2 Economic scenario _

The Chilean economy in 2018 showed a recovery with a quite favorable performance in the firstpartoftheyear,mostlydrivenbythelowcomparativebaseoftheminingindustryandgrowtharounditspotentialinthesecondpart.Allinall,2018closedwitha4%expansionoftheGDP,adynamismreflectedonthebankingindustrywithhighergrowthinloans,maintaininggoodriskindicators,solvencyandprofitability.

International scenarioThe world economy showed a high growth in 2018 and similar to the previous year, although subjecttochangesinthecompositionaccordingtoblocks,wherethelargerexpansionofthe USA contrasted with the relative weakness of Europe and Japan and the lesser growth of China. In the second semester, the commercial dispute between the USA and China, affected the price of commodities and therefore emerging countries.

Despite the economic slowdown in the USA in the second part of the year, unemployment reachedminimallevels,whichshowedasignificantgrowthofthelabormass.This,addedtothegrowingtrendofinflationdrovetheFEDtoraiseby100basepointstheofficialinterest rate during the year (from 1.5% to 2.5%).

Local economyIn2018,thelocaleconomyshowedasignificantrecoverywithanexpansionof4%ofGDPover1.3%ofpreviousyear.Thishigherdynamismisexplainedbyalowcomparisonbase partially tied by a temporary strike of a copper mining corporation in 2017, as well as further growth in the non-mining sector driven by improvements in the entrepreneurial confidenceandthelabormarket.Componentswise,standsoutthereboundofinvestmentsandexports.

Despite the economic rebound, the unemployment rate captured by the INE survey reached a 7% average, which is even higher than prior year. However, according to estimates from differentsources,includingtheCentralBank,theINEemploymentgrowthfigurewouldbe underestimated since it does not include the effect of immigrant workers, as it is a recent phenomenon.

During2018,thetrendoftheinflationpathwasupwards,returningtothecenteroftheband at the start of the second semester after having remained below 2% for a good part of the previous year. Thus, it closed the 2018 year at 2.6%, although mainly driven by volatile components.

Inflationrecoveryandeconomicactivitywasaccompaniedbyamorerestrictivemonetarypolicy with a 25 base point upward adjustment during the year. The Monetary Policy Rate (TPM) closed 2018 at 2.75%, with a bullish bias that manifested itself as an additional riseinthefirst2019meeting.

OutlookDuring 2019, the Chilean economy would continue the recovery initiated with the rebound started at the end of 2017, although at a slower pace, due to, among other things, the uncertainty coming from the global economy. The Central Bank in the last Monetary Policy Report, March 2019, estimatedaGDPexpansioninthe3.0%to4.0% range (25 base points below projected figuresinthereportofthepreviousquarter).

Inthiscontext, it isanticipatedthatthemonetary policy interest rate (MPR) would have a moderate increase, aligning itself with the US Federal Reserve, which does not foresee new rises on its rate during 2019. According to a survey of Economic ExpectationsoftheCentralBank,theMPRwould rise to reach 3.25% by the end of 2019.

Recently the prospects of the foreign scenario have shown some deterioration that may be affected by the European situation due the externalrisksassociatedtotheBrexit,theperformance of the US economy and the risk of aggravating the commercial war between China and the US that is still latent. These phenomena, among others, could affect growth projections and the local MPR.


40_

3.1.3 Thebankingindustry:activityandresults_

In2018,thecreditactivityhadasignificantrecoveryinbankingactivitycomparedtotheevolutionofrecentyears,reflectingtheimprovementoftheeconomicenvironmentand better perspectives of the agents. Total loans in the system reached an annual real growth of 7.1% in 2018, driven by commercial loans that represent 56% of total loans andexperienceda7.7%rise,whiletheportfolioofconsumerloansgrew6.3%and6.4%on mortgage loans.

Infact,banksheldmoreflexibleconditionstograntcredittolargebusinessesduringthe year, while mortgage loans reported more stringent requirements in the last quarter of 2018. Also, demand for household loans was perceived to be more strengthened in mortgage and consumer loans, while in large companies and SMEs remained dynamic.

In this scenario, risk indicators of the system had an improvement, concentrated on commercialportfolio(riskindex2.28%,dropped13basispoints)andmortgageportfolio(0.76% with a drop of 10 base points) while the increased on consumption, was due to the transfer of retail and commercial stores’ credit cards to the system.

Inthefinancialarea,theresultsofthesystemgrew9.1%in2018,animprovementdrivenby the recovery of Banco Itaú-Corpbanca (including non-recurring effects). In this way, the ROE of the system reached 15.5%, standing at 0.7 p.p. (percentage points) higher than theendofpreviousyear.Theefficiencyofthesystemreached49.7%,whichrepresenta 1.9% improvement over prior year, mostly due to BancoEstado and small and medium banks. In relation to the solvency of the bank, it closed December 2018 at a lower level than the previous year, with a BIS ratio of 13.3% (effective equity over risk-weighted assets).

The 2019’s outlook for the banking industry anticipate a credit real growth similar to 2018. The growth would be given by commercial loans,associatedwiththeinvestmentfigurespresented in the local economy, we also estimate a recovery in mortgage loans and a maintenance in consumer loans.

At the same time, by 2019 the banking industry will look closely at the preparation of the new regulations associated with the new General Banking Law enacted in 2018, which will be prepared by the regulatory body, and will determine new requirements for banking. Faced with this, the largest institutions have already made most of the required capital adjustments. Definitionsintermsofoperationalrisk,such as cybersecurity and in general the regulation of technological aspects, may have impacts, but it is estimated that the authority will consider a gradual application of the standards.


41_

3.1.4 Global results of BancoEstado Corporation _

57+8+12+16+7+MParticipation of BancoEstado in number of debit cards(%, dic-18)_

BancoEstado

57%

Bank 4

8%

Remainder

12%

Bank 2

16%

Bank 3

7%

*Total active cards: 22.4 millionSource: SBIF

Significant evolution in loans during the period; as of December 2018, the stock of total loans reached nearly $24 billions

BancoEstado: Total loans*(MMM$ a dic-18)_

24.000

20.000

16.000

12.000

8.000

4.000

02015 2018

*Consolidated since 2008Source: BancoEstado

201020051990 1995 2000

Evolution of BancoEstado loans and GDP(Index1990=100)_

900

750

600

450

300

150

02000 2002

Source: Central Bank, BancoEstado

199819961990 1992 1994 2014 2016201220102004 2006 2008 2018

BancoEstado loansGDP

In the last 28 years, in terms of loans, BancoEstado have grown more than twice the speed of the product or the economic activity of the country´s economic activity.

Loans between 2000 and 2018 had an annual average growth of 8.3% , while GDP expanded at an annual average rate of 3.6%.

Over half of the banks debit cards are from BancoEstado, thanks to the remarkable and persistent position of CuentaRUT.


42_

Evolution of net loans* 2008-2018(var. real anual, %)_

24

20

16

12

8

4

02017 2018

*Consolidated since 2008Source: BancoEstado

201620152008 2009 20142013201220112010

3.3

7.1

8.5

10.4

0.6

6.1

6.1

12.9

21.7

0.5

7.7

9.7

4.3

8.0

6.4

4.7

10.3

6.6

5.8

2.4

6.8

2.9

Total loans during 2018 registered a 3.3% annual improvement in BancoEstado and 7.1% in the system.

During 2018, Loans evolution in BancoEstado x has been driven by consumer and mortgage loans.

Loans BancoEstado System*

Total, net 3.3% 7.1%

Commercial (Business) 0.5% 7.7%

Retail 6.3% 6.3%

Mortgage 5.4% 6.4%

Consumer 10.7% 6.3%

Credit expansion(real annual variation, Dec-18, %)_

*Loans exclude subsidiaries abroadSource: SBIF, BancoEstado

BancoEstadoSystem


43_

BancoEstado: Mortgage loans(MMM$ as of Dec-18)_

10,000

7,500

5,000

2,500

02015 2018

Fuente: BancoEstado

201020051990 1995 2000

BancoEstado leads funding motgages for middle and low income segments.

BancoEstado: Commercial loans(MMM$ as of Dec-18)_

14,000

12,000

10,000

8,000

6,000

4,000

2,000

02015 2018

*Consolidado desde 2008Fuente: BancoEstado

201020051990 1995 2000

BancoEstado provides permanent support to business and entrepreneurship.

In 2018, commercial loans were driven by small size businesses that grew 7.4% annual.

Net income before tax(MMM$ as of Dec-18)_

400

350

300

250

200

150

100

50

02017 2018

Fuente: BancoEstado

201620152008 2009 20142013201220112010

356

178

236 24

8

283

Net income before tax average MMM$244 between 2009 and 2018

Net income before tax as of December of 2018 reached MMM$356

2001 2002 2003 2004 2005 2006 2007

92

134

175

253


44_

Rating Agency Long term (1) Short term (2) Outlook

Moody’s (3) A1 P-1 Stable

Fitch Ratings (4) A F1 Stable

Standard & Poor’s (5) A+ A-1 Stable

BancoEstado’s International Risk Rating 2018

_

(1) Foreign currency debt, longer than one year(2) Foreign currency debt, shorter or equal to one year(3) In July 2018, Moody’s downgraded the long term risk rate with Stable outlook and kept the short term(4) In October 2018 Fitch Ratings held the short and long term rates and the outlook(5) In December 2018 S&P held the short and long term risk rates and outlook

Fuente: Fitch Ratings, Moody’s y Standard & Poor’s

BancoEstado continues to be the safest and most solid bank in Latin America for the seventh consecutive year, according to the ranking carried out by magazine “Global Finance” in 2018. It is the Bank’s permanent concern to improve customer service, maintain adequate levels of risk- return and control expenses.

Profitability(NetIncomebeforetax/equity;%)_

30%

25%

20%

15%

10$

5%2009 2010200820072004 2005 2006 2016 2017201520142011 2012 2013 2018

BancoEstadoSystem

Source: BancoEstado

20,8%

15,5%

Profitability of BancoEstado was higher than that of the system and greater than that reached at the end of 2017, in line with the good performance of interest, readjustments and commissions and progress in expenses.


45_

BancoEstado efficiency index(Supportexpenses/Grossoperationalincome)_

70%

60%

50%

40%

30%

20%

10%

0%2017 2018

Source: BancoEstado

201620152008 2009 20142013201220112010

58.3

%

58.6

%

53.1% 57

.3% 60

.7%

2004 2005 2006 2007

65.2

%

60.8

%

55.8

%

BancoEstadoSystem

Efficiency of BancoEstado improved 4.6 percent points during 2018 due to progress on income, especially interests and commissions. The sustained improvement during the year made possible to reduce the gap between the BancoEstado’s indicator and the system.

Automated transactions of BancoEstado’s clients(Annual)_

3.200

2.800

2.400

2.000

1.600

1.200

800

400

02017 2018

*completed in BancoEstado automated channels (ATMs, CajaVecina, PagoRUT, internet sites and mobile) and other external networks such as Redcompra and Redbanc; excludes those made in BancoEstado and ServiEstado tellers.Source: SBIF and BancoEstado

201620152008 2009 20142013201220112010

3,21

8

441

802

1,30

3

1,785

2004 2005 2006 2007

111

130

147

Nº of automated transactions% of all transactions

Automated transactions increased 43% in 2018, driven by digital transactions, mainly by the use of the mobile application, representing 97% of the bank’s total transactions.

Millones

55.6

%

61.1% 63

.7%

83.1%

91.6

%

94.4

%

95.6

%

97.5

%

100%

80%

60%

40%

20%

0%


46_

31+23+18+14+14+MParticipation by number of system debtors*(dic-18)_

BancoEstado

31%

Bank 2

23%

Bank 3

18%

Bank 4

14%

Remainder

14%

*5.4 million debtors in the systemSource: SBIF

BancoEstado concentrates the largest number of debtors in the system, with more than 1.6 million (31%).

BancoEstado and subsidiaries (a) consolidated corporate data(figuresinmillionsofChileanpesos)_

Var. real

Indicators 2010 2012 2014 2016 2017 2018 18/17

Incomebeforetax 138,602 195,461 221,400 270,044 276,614 356,021 25.1%

Basic capital 931,344 1,136,838 1,236,936 1,565,410 1,645,624 1,704,191 0.7%

Effective equity 1,405,605 1,707,041 2,057,958 2,516,111 2,599,357 2,755,646 3.1%

Total loans 11,416,304 13,894,809 16,614,586 20,745,293 22,531,470 23,934,547 3.3%

Total consolidated assets 18,801,835 23,153,311 28,116,028 34,787,632 37,890,236 40,221,529 3.2%

Incomebeforetaxovertotalassets(%) 0.74 0.84 0.79 0.78 0.77 0.89 12 p.b.

Incomebeforetaxoverequity(%) 14.8 17.1 17.8 17.2 16.7 20.8 410 p.b.

Efficiencyratio(b) 58.6 53.1 57.3 60.7 62.9 58.3 -460 p.b.

Provisions/Loans (%) 2.92 2.64 2.71 3.02 3.03 2.90 -13 p.b.

Base capital over total assets (%) 4.62 4.55 4.10 4.18 4.05 3.99 -6 p.b.

BIS ratio (%) 12.14 11.47 11.49 11.30 11.04 11.12 8 p.b.

Number of branches 344 345 364 393 410 417 7

Number of ServiEstado branches 84 96 107 107 108 107 -1

Caja Vecina 4,564 10,289 13,520 19,265 22,147 25,400 3,253

Number of automated services (c) 2,995 3,578 3,488 3,619 3,683 3,701 18

Total annual transactions (millions) 581 925 1,427 1,919 2,332 3,270 939

(a) Financial Statements are published under IFRS standard(b) Support expenses over gross operating income(c) ATMs, cash dispensers and dropboxes Source: BancoEstado


47_

BancoEstado: ROE(Incomebeforetaxoverequity)_

2015 2018

Source: BancoEstado

201020051991 1995 2000

BancoEstado achieved profitability before taxes of 20.8% at the end of 2018.

The eficciency obtained by the bank over time has allowed it to continue with its social role and achieve sustainable growth.

25%

20%

15%

10%

5%

0%

BancoEstado: Market share(%)

_

2015 2018

Source: BancoEstado, SBIF

201020051990 1995 2000

At the end of 2018, the participation of BancoEstado in terms of loans reached 14.7%.

16%

12%

8%

4%

0%

BancoEstado: Equity(MMM$ as of Dec-18)_

2015 2018

Source: BancoEstado

201020051991 1995 2000

1.800

1.500

1.200

900

600

300

0

At the end of 2018 BancoEstado reached MMM $ 1,714 in equity.

The capital contributions are usually funded by:• Extraordinary capitalizations

to support the growth of the institution, such as those made in 2009 and 2014-15.

• Capitalizing part of the profits earned, as in 2017 and 2018, which corresponded to 50% of net income of the previous year


48_

Contribution to the Treasury (*)(MMUS$ as of Dec-18)_

600

500

400

300

200

100

02017 2018201620152008 2009 201420132012201120102005 2006 2007

ByprofitBytaxesTotal

* On account of profits and taxes of previous yearSource: SBIF, BancoEstado

The good results achieved by BancoEstado (including subsidiaries) allow the bank to make substantial contributions to the Treasury for taxes and profit sharing.

Between 2001 and 2018 BancoEstado transferred a total amount of MMM$3,073 to the Treasury, which corresponds to an annual average of MMM$171.


49_

3.1.5 Corporate banking, large business and institutional banking_

Our work in corporate banking and large business focuses on an attractive and competitive value proposal that in turn contributes as a positive impact to the growth and economic development of the country. At the end of 2018, we recorded more than 1,000 large and mega businesses, which represent 60% of total assets and 25% of the bank’s operational income, compared to the smaller companies and the retail segment, according to the followingtable:

Pct. assets Pct. operational income

Wholesale and others 60.1% 25.3%

Lesser size business 10.0% 20.1%

Retail 29.9% 54.6%

Total BancoEstado 100.0% 100.0%

Source: BancoEstado

Meanwhile , our institutional banking, focuseson providing support to State institutions throughagreementstopaysalaries,collectionofpaymentsandtransfersoffinancialandbanking information. Therefore, we comply with the tradition of being the bank servicing the State of Chile, and also contributing by modernizing their processes.

In 2018 we had more than 800 institutional clients, which is equivalent to a growth that exceeds65institutions.Also,weprocessed13,696,431transactionstopaysalaries;7,896,047transactionstopaysuppliers;and23,539,660transactionsfordeposits,totaling more than 45 million transactions through our Institutional Banking in the year.

Agreements Total Tx 2018 GBI Sernac Total year

Deposits 14,203,309 9,336,351 23,539,660

Pay suppliers 7,896,047 7,896,047

Wages 13,696,431 13,696,431

Total payments 35,795,787 9,336,351 45,132,138

Institutional Bank: 2018 transactions_


50_

3.2 Risk management_ Credit risk management at BancoEstado is

based on a comprehensive view of the risks associated with the stages of admission, monitoring, normalization and credit recovery. Theabove,hasallowedustoexpandthebase of loans while keeping a bounded risk and showing a performance, measured by expensesinprovisionsandnetwrite-offson loans, consistently better than the rest ofthefinancialsystem(seefigure1).

3.2.1 Credit risks_

Graph 1Net charge/ loansNetcharge=Provisions+Write-offs–Recoveries_

2,00%

1,80%

1,60%

1,40%

1,20%

1,00%

0,80%

0,60%

0,40%

0,20%

0,00%2017 2018201620152008 2009 201420132012201120102006 2007

BancoEstadoRestofthefinancialsystem

Source: SBIF, BancoEstado

0.6

7%

0,8

1%

1.8

2%

0.8

1%

1.26

%

0.9

3%

1.12

%

1.12

% 1.18

%

1.12

%

1.0

9%

1.0

9%

1.0

1%

0.7

0%

1.0

0%

1.39

%

1.32

%

0.9

6%

0.7

1%

0.9

2% 1.0

0%

0.5

5% 0.7

2% 0.8

4%

0.7

9%

0.7

3%

Upholdingaconservativeprofiledeterminingprovisions, in BancoEstado we have a solid reservebasetocovertheexpectedlossesoftheportfolio(seefigure2),allowingustoexhibitcoverageoverpastdue loansabovetherestofthefinancialsysteminallproduct lines (see graphic 3). Complementing regulatory provisions, we maintain the highest proportion of additional provisions in the banking system, as a backup to cover potential losses in the face of stress scenarios, either due to changes in the economic cycle or risks associated to portfolio concentration (see graphic 4).


51_

Graph 2Provisions/ Loans_

3,50%

3,00%

2,50%

2,00%

1,50%

1,00%

0,50%

0,00%2017 2018201620152008 2009 20142013201220112010

2.90

%

2.75

%

2.71

%

2.71

%

3.0

3%

2004 2005 2006 2007

2.11

%

1.50

%

1.63

%


20032002

3.0

2%

2.79

%

2.84

%

2.64

%

2.92

%

2.17

%

1.43%

1.41%

1.78

%

Graph 3Provisions/ Past due Loans(Dec 2018)

_

Mortgage TOTALCommercial Consumer

209

%

84

2%

111%

281%

316

%

1,20

2%

119

% 262%


Graph 4Provisions/ Loans(Dec 2018)_

Mortgage TOTALCommercial Consumer

2.52

%

6.4

7%

0.5

6% 2.

61%

4.0

5%

9.8

1%

5.0

0%

4.9

4%



52_

3.2.2 Operational and technological risks _

The Integral Management of Operational and Technological Risk model of BancoEstado Corporation focuses on defining the general guidelines of the corporation regarding management of its operational and technological risks in their various scopes, establishing an appropriate process ofidentification,measurement-evaluation,control and mitigation of operational and technological risks in order to reduce the impact on our customers and the business.

In the same way, Corporación BancoEstado is permanently evaluating the methodological adjustments to be aligned with the best practices concerning the new General Banking Law. It has taken knowledge and is awaiting the methodological requirements that may arise from it by the agencies responsible for this task.

BancoEstado has a world class technological processing site that allows us to strengthen and increase the security and availability of our technological platforms, with the purpose of maintaining the standards that our clients require.

To validate the ability of the corporation to maintain the continuity of our clients’ operations in the face of disruptive scenarios, a plan of real tests has been developed for the business continuity plans throughout the entire branch network and technological contingency sites.

Additionally, Corporación BancoEstado has established the cybersecurity week and has developed training and dissemination plans educating and permanently raising awareness on the bank’s staff, which allows knowing and adopting the best practices on matters of operational and technological risk prevention.

Efforts deployed consistently and focused have helped to enhance our standards in terms of operational and technological risk.

3.2.3 Market risks_

BancoEstado’s management of market and liquidity risks hold clear policies for its measurement and practice, being the application of these policies controlled by independent instances of risk-taking areas within a framework of established powers and cooperative decisions.

Themainactionswecarriedoutduring2018werefocusedontheimplementationofthefirststage of a new technological platform for the administration of the bank’s administrative operations,whichwillallowintegratingfinancialmanagementoffront,middleandbackofficeaswellastheirriskmanagement.Additionally,improvementsweremadetomethodologyandsystemsregardingtothecreditexposuremeasurementcomingfromderivative products as well as determining the charge associated with their credit risk.

Intheexercise,themarketandliquidityriskslevelswereheldwithinthemarginssetforthby the bank and regulatory bodies.

Market risk as of 12/31/2018Normative Risk / Effective Equity_

Foreign currency

Interest rate Long Term

ERM Readjustability

30%

25%

20%

15%

10%

5%

0%OptionsInterest rate

Short Term

Bank 1Bank 2BancoEstadoBank 3


53_

3.2.4 Social and environmental risk policy_

In 2016, we implemented in BancoEstado a Social and Environmental Risk Policy so our customers in the segments of Corporate Business, Large Business, Real Estate, Construction, Concessions and Project Finance may perform their activities in a sustainable manner with environmental management that minimizes the negative impact on ecological systems

and communities.

Our Social and Environmental Risk Policy declares BancoEstado’s commitment to promote and stimulate a sustainable management in their business and the projects funded by the bank, being relevant the fact that borrowers have formal procedures and instances of environmental management that minimizes, controls and manages adequately the negative impacts that their activities may generate in ecosystems and communities.

At BancoEstado we assume this responsibility and, for this, during the 2018 management, we moved forward on the implementation of our policy by creating, for that purpose, the SocialandEnvironmentalRiskUnitthatreportstotheRiskCorporateManagementoffice.Furthermore, we created the Social and Environmental Risk Manual that sets the evaluation method for clients that belong to the segments Corporate Business, Large Business, Real Estate, Construction, Concessions and Project Finance.

Another important milestone in the implementation of the policy was to start the Social and Environmental Risk Evaluation Process to classify customers according to their risk level in Category A, B or C.

Classifying businesses will allow to visualize the social and environmental risk of the portfolio and focus this analysis on companies that rate, preferably, categories high and average.


54_

3.3 Retail management _

2018 was a year when we consolidated our leadership on the diversity of products we offer to the Customer (Retail) segment, which totaled more than 13 million. We not only grow in all types of accounts, insurance, mutual funds and loans, but also we increased ourcustomersbasewithCuentaRUTbymorethanonemillioninoneyear,exceeding11.2million in total.

Ontheotherhand,courtesyoftheefficientmanagementofproductofferings,thesystematic commercial vision and especially the commitment and work of each team, the branchnetworkclosedthemonthofDecemberwiththehighestmonthlysalesfigureforconsumerloansinthehistoryofBancoEstado:morethan$100thousandmillions.Thatsame month, our bank broke another record by achieving a $10,075 million sale in one day, demonstrating that it is capable of challenging and surpass its own goals.

Added to this, our consumer loans continued to grow above the system as it has been thetrendsince2004,whileinforceinsurancepoliciesexceed8.5million,distributedovermore than four million customers of contracted policies.

Below,wepresentthedetailofourfiguresfortheRetailsegmentin2018.


9,330,315customers with savings account (*)

681,648customers with mutual funds

724,649customers with checking account

11,215,791customers with CuentaRUT

1,246,857customers with Electronic Checkbook

1,105,949current credit cards

489,860customers with mortgage loans

4,024,853clients with insurance contract

1,074,495customers with consumer loans

164,593customers with college loans

693,218customers of micro and small companies

4,232,455clients on the internet

2,983,792mobile clients (use mobile web and/or mobile application)

4,217,594people receive monthly payments of salaries, pensions and scholarships

*Clients hold a total of 16,959,026 savings accounts

Bank 3

23%


55_

Evolution of consumer loans(Balances,indexDecember2001=100)_

700

600

500

400

300

200

100

02017 2018201620152008 2009 201420132012201120102004 2005 2006 2007

BancoEstadoSistema

2001

Source:BancoEstado,SBIF Between 2001 and 2018 BancoEstado has multiplied more than six times its consumer loans

26+43+23+5+3+MCustomers with college loans(Number of debtors, Dec-18)_

BancoEstado

26%

Bank 1

43%

Bank 3

23%

Bank 4

5%

Remainder

3%

Total debtors: 640 thousandSource: SBIF, BancoEstado

BancoEstado funds one out of four students with college loans.

31+29+25+6+9+MCollege loans(Balance, Dec-18)_

BancoEstado

31%

Bank 2

28%

Bank 3

25%

Bank 4

7%

Remainder

9%

Total loan stock: MMM$2,674Source: SBIF


56_

TodoSuma 2018_TodoSuma is our program to promote customer loyalty for retail customers, micro and small businesses, which allows you to accumulate pointsandthenexchangedthemfordiscountsor money. The discount is paid in cash in the credit card account, based on the calculation that for every $100 of domestic or international purchases 1 point is accumulated for the Black and Platinum Cards, while the other International Cards accumulate 1 point for every $150. For all cases the correspondence is that 1 point equals $1.

Thecreditcardsattachedtotheprogramare:National Visa, International Visa, Mype Visa, Standard Mastercard, Gold Visa, MasterCard Gold, Visa Platinum and MasterCard Black. ExcludedfromthelistareTarjetadeCreditoChilena, domestic and international and those from legal entities.

Theexchangeitemsarethefollowing:education,supermarkets, large stores, drugstores, fuel, airlines, travel agencies, hotels and the item “All Purchases”, which introduced much more flexibilitytoexchangeitemspreferredbythecustomer.Theseandotherbenefitsmaybefoundinthevirtualstoreofourprogram:www.beneficiostarjetas.cl At the end of 2018 we present the following results:• Clients with points accumulated in the

three segments (Person, Micro and Small Companies):768thousandclients

• Totalpointsredeemed(equivalentin$):2,455 million points.

• Total accumulated points (100% of the accrued):9.540millionpoints

Further information at www.todosuma.cl

CMPC-Sernac Refund_

In 2018 we were presented with a great challenge when we were summoned by the government and SERNAC authorities to manage the largest, most complexandmassivepaymentoperationinhistory:therefundpaymentto those affected by the CMPC case in August 2018.

This process set a precedent in our history and the country’s, as we were able to show our capability and support as an institution by successfully making a payment to more than 13 million inhabitants of the country that involved more than 10 million transactions in a shorttimeandwithnomajorinconveniences.TheCMPCcaseisthefirstrefundprocessresultingfromacollusioncase,whereSERNAC,asthebodyinchargeofleading,executingandmonitoringthismilestone,soughtafinancialinstitutioncapabletoexecutepaymentsin the shortest possible time and with the greatest territorial coverage.

In this scenario, early in 2017, we started our task that in the end would pay every person holding a BancoEstado account and those registered to receive their refund through CajaVecina, generating in this way 10,390,000 total payments through the bank, which is 79% of the universe of payments.

Thankstotheexcellentrelationshipamongtheparticipatingentitiesinthisprocess,ourbankwas in charge of the co-design and deployment of a high impact process, which required veryhighcomplexsystems,securityandefficiency,henceallowingthefullconfidenceofgovernment authorities and the trust of Sernac.

Therefundsystemwaseventuallydividedasfollows:79%ofpaymentswereexecutedby BancoEstado, whereby 77% was deposited in CuentaRUT, 13% to other BancoEstado accounts and the remaining 10% through CajaVecina. The Instituto de Prevision Social (InstituteofSocialWelfare,IPS)executed16%ofpaymentsandthecompanyKiphuwasin charge of the remaining 5% for those people registered with an account in other banks.

It is worth mentioning that 90% of the payments made by BancoEstado were completed inthefirst10workingdays,startingonAugust1,2018.

http://www.beneficiostarjetas.cl

http://www.beneficiostarjetas.cl

https://www.bancoestado.cl/imagenes/todosuma/index.asp


57_

PagoClick:thesuccessfulalliancebetweenBancoEstado and Copec_

In August 2018, as a result of the alliance between BancoEstado and Copec, we launched the PagoClick app that allows our customers to

pay for fuel at Copec gas stations directly debiting their checking account, electronic checkbook or CuentaRUT.

Onthefirstmonthintooperation,thisallianceachieved outstanding results, surpassing 60 thousand downloads. This initiative was made possible thanks to the development of the Third Party Wallet (Billetera de Terceros) , a function currently installed in apps already available that works by debiting whatever product the customer chooses, whether it is checking account, electronic checkbook or CuentaRUT. By the end of December 2018, we already had 595,376 payments andtheamountinpaymentsexceeded$10,170 million.

Successful payments June-December 2018Total: 595,376_

Nov Dec 2018OctSepJun Jul Aug

56 576

98,8

93 124,

324

98,7

58

97,3

67

175,

402

Total amount of payments June-December 2018Total: $10,171,115,498_

Nov Dec 2018OctSepJun Jul Aug

555,

438

9,89

7,24

1

1,627

,119,

108

2,17

6,66

9,11

8

1,674

,153,

033

1,650

,619

,892 3,

032

,101,6

68

This agreement was achieved thanks to the development of the Third Party Wallet, a new functionality that is installed in applications currently available in the market and works as debit payment, charging the product of the customer’s preference offered by our bank.

By December, we had a total of 151,009 successful enrollments.

Mr. Leopoldo Quintano, manager of the Marketing and Quality Division, highlighted “theresultsareexcellent,both inappdownloads as well as in the purchase of fuel. No doubt that the visibility this alliance had in the media and the $25 discount per liter of gasoline to those who download it, has been fundamental, but the important thing is that it helped people to know their advantages and we hope that it is the way they use from now on to buy their gasoline”, concluded.


58_

3.4 Customer satisfaction _During 2018, at BancoEstado we continued monitoring the quality of service delivered to our customers, through the quality, customer satisfaction and transparency indicators tied to the processes of selling and providing information. Along with this, starting on the second semester we included monitoring the net indicator of BancoEstado’s Customer Recommendation, within the panel of indicators of customer loyalty.

The result during the second semester was 77% satisfaction at a global level, which is one percentage point of improvement above the same period in the previous year. In the periodoftimethebankscored63ontheBancoEstadoRecommendationindex,inascaleof 1 to 100.

At the Retail Banking level, Emerging customers reported the best satisfaction indicators (75%) compared to Portfolio Relationships (74%) and Non-Portfolio Relationships (70%). All of them showed one point improvement compared to the same semester of the last year.

At the level of Corporate Banking, the segment Small Business customers scored 81% satisfaction and the Microenterprise segment 80% satisfaction. In wholesale banking, the higher customer satisfaction score were in Institutional Banking (91%), Midsize Business (79%) and then Large Business, Corporate and Real Estate Banking (78%).

At the channel level, during the second semester of 2018, our customers evaluated face-to-face channels with an average of 83% and non-face-to-face channels with an average of 73%. Customer satisfaction for channels is monitored every day with interviews made viaIVR(InteractiveVoiceRecognition)appliedwithaoneweekmaximumdelayfromtheactual interview at any of the associated contact points.

Every month we interview nearly 20 thousand people from different customer segments in order to assess the level of satisfaction and recommendation with BancoEstado. Also, we detect opportunities for improvement and manage them in a continuous customer perception improvements framework so as to obtain a better satisfaction level from our clients and also the recommendation levels of the bank.

Regarding direct complaints by customers to the bank, we made arrangements to reduce the response time to customers and also to fixtheircauses.Likewise,westandoutthework made to respond complaints submitted by clients through public institutions such as the SBIF and Sernac, meeting 100% the response time established by them, which becomes more relevant bearing in mind that Sernac reduced from 10 to seven days themaximumresponsetimerequiredtofinancialinstitutions.


59_

3.4.1 Customerexperiencemanagement_

During2018,theCustomerExperiencemanagement was accomplished by tracking and improving the Net Promoter Score indicator or Net Recommendation, known by its acronym in English as NPS. This indicator isan indexthatmeasuresthelevel of customer loyalty with the Bank on an international scale from 0 to 10, where 0 to 6 is considered a detractor customer, 7 and 8 neutral and 9 and 10 promoters. The techniqueofinquiryisthroughexecutivesmaking phone call and looking into the reasons why customers recommend or not the bank, without asking for attributes already pre-defined. Inthismanner,customerselaborateandbankexecutivesdigdeeperinto with what products, channels or type ofinteractionsuchexperiencehappened.

Withthesefindings,webuildasetofmotivesor micro levers of loyalty/disloyalty that as they repeat over and over, they build up the rationale for clients to support or reject our practice (code book). The base of the surveys was 14,243 interactions during 2018 for the bank questions and 30,043 for our channels. In both cases, customers from the Retail Segment who had interactions with the bank a week before being surveyed were approached.

The results obtained and their respective goals in the Bank’s Score Card were as follows. Inbothcases,thegoalwasoverfulfilled.

NPS

P 2018 Segment Closing year Annual Goal

18% Relational 27% 24%

82% Emergent 27% 26%

100% Total NPS 27% 26%

NPS Chanels

P 2018 Chanels jan2018

feb2018

mar2018

apr2018

may2018

jun2018

jul2018

aug2018

sep2018

oct2018

nov2018

dic2018

close Year

goalAnnual

10% Mobile Channel 47% 48% 52% 54% 51% 51% 48% 57% 55% 57% 53% 54% 51% 45%

30% Phone Operator 58% 54% 52% 56% 57% 52% 56% 50% 51% 54% 56% 51% 54% 54%

30% New on line Bank (NBL)

47% 55% 54% 50% 53% 52% 48% 51% 59% 57% 62% 50% 53% 45%

30% APPBancoEstado

56% 56% 68% 66% 66% 66% 65% 63% 65% 65% 65% 68% 64% 56%

100% Total NPS Channels

53% 54% 57% 57% 58% 56% 55% 55% 58% 59% 60% 56% 56% 51%

Bank:

Channels:


60_

Management was performed from two environments,mainly:

• Confronting the root-cause of the motives for disloyalty, understood as the problems orsituationsexperiencedbycustomers.By participating in the high-impact or strategic projects that come to install new capabilities in the bank, we were there searching for impact solutions to thecustomerexperienceandneeds.

• Participating in the management of digital channels by offering the NPS management as an improvement tool. During 2018 we worked at the channel tables to 1) analyze the root-cause of the greatest impactmotivesintheindicator;2)designaction plans to take over the reasons for rejections and 3) keep track of how the indicator evolved after doing the work.

Finally, and in an evolutionary view, the graphs shows the performance of the indicator from the beginning of measuring until December 2018, when gauging was ended.

BancoEstado loyalty evolution by semesters_

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

31%

PassivesContenders

Sem 1 2016n:1.508

Sem 2 2016n:4.625

Sem 1 2017n:7.629

Sem 2 2017n:9.230

Sem 1 2018n:9.183

Sem 2 2018n:4.177

27%24% 22% 22% 20%

32% 35% 32% 30% 31% 31%

37% 38% 44% 48% 47% 49%

Promoters

6%11%

20%

26% 26%29%

NPS

Digital channels loyalty evolution by semesters*_

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

17%

PassivesContenders

Sem 1 2016n:2.905

Sem 2 2016n:3.451

Sem 1 2017n:13.254

Sem 2 2017n:19.596

Sem 1 2018n:19.595

Sem 2 2018n:8.795

15% 14% 13% 11% 11%

25% 26% 25% 23% 21% 20%

54% 59% 60% 64% 67% 69%

Promoters

41% 43%46%

51%56% 57%

NPS

The drivers that explain the change and justify the improvement of experiences in the results from 2016 vs. 2018 are:

Good helpfulness and / or kindness

face ( NPS + 21 pp.)

Charge for draw in CuentaRUT

( NPS + 7 pp.)

Trusted bank/safe/ serious

( NPS + 18pp.)

Operation of products

( NPS + 10pp.)

Ease of obtaining credits

( NPS + 23pp.)

The drivers that explain the change and justify the improvement of experiences in the results from 2016 vs. 2018 are:

Transaction speed in the App

(not available before)

Easy use and/or friendliness of

the web( NPS + 43 pp.)

Option transaction,

payment and/or transfer in App (not available

before)

Visibility info./ movements

from App (not available before)

Ease of use vs. other channel (not available

before)

*includes web, mobile banking, telephone, new on line bank and BancoEstado app


61_

3.4.2Customer satisfaction in our subsidiaries_Administradora General de Fondos (AGF)The Quality Management office of our subsidiary prepares the Annual Customer Satisfaction Report, which in 2018 covered both the retail and the business segment and had as objective measure the satisfaction level of clients that have made mutual fund transactions in 2018.

Net overall satisfaction: 88% Business Satisfaction (101): 97%Retail Satisfaction (467): 81%

Global satisfaction_

P.8: Thinking in general and bearing in mind all the aspects that we have talked about, and on a scale of 1 to 7 where “1” is totally unsatisfied and “7” is totally satisfied, with what grade would you rank the service provided by Mutual Funds of BancoEstado? Total year 2018

Insufficiency

100

80

60

40

20

0

-20

-40

26%

63%

90%88%

-2%

23%

74%

97%97%

29%

84%81%

-3%

6+7 Excellency Grade 6 Net satisfaction 2018

Total 2018 (586) Business (101) Retail (467)

Recommendation rate_

In a scale of 1 to 7, where 1 is NOT RECOMMENDED and 7 is HIGHLY RECOMMENDED, what are the chances that you recommend BancoEstado Mutual Funds? - Only 2nd Semester 2018

Detractors (1 a 4)

100

80

60

40

20

0

-20

-40

83%

80%

-3%

92%

92%

77%

71%

-6%

Promoters (6+7) Net Recommendation 2018

Total 2018 (298) Business (51) Retail (247)

Theresultswereverypositive,with90%overallsatisfactionand63%ofexcellenceinbothsegments. Stand out the 97% satisfaction evaluation of our business clients bearing 74% excellency.Ontheotherside,83%ofourclientsrecommendus,anindicatorthatstandsout the 92% of recommendation of our business customers and 77% of our retail clients.


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Centro de Servicios (ServiEstado)In 2018, the satisfaction of the customers of our subsidiary was 79% in its 107 branches throughout Chile. This result is slightly better than last year, where we recorded 78% and in turn ranks one point below the 80% goal set for 2018. In terms of our operationalexcellence,theevaluationrated95% on average by the end of 2018, holding an upwards trend of prior years.

100

80

60

40

20

02014

70%

2015

92%

2016

94

%

2017

94

%

2018

95%

Centro de Contacto 24 horas (Lota Contact)In our 2018 measurement to determine the level of satisfaction of our customers, we obtained a total of 75% satisfaction.

BancoEstado Corredores de BolsaThrough a periodic study, we seek to determine the level of satisfaction of the customers of the Retail segment that operated in the purchase and sale of shares or with advanced purchasing time deposits through BancoEstado Corredores de Bolsa, setting its evolution over the 2017 rate. In 2018 we made 3,030 surveys.

The global indicator of satisfaction with this stock broker is 83% for the year 2018, a result thatstands4pointsaboveintheresultof2017andexceedsthegoalsetforthfor2018(80%).Itsstandouttheexcellentsatisfactionlevelwiththeinvestmentexecutivesthatbeat the 2017 evaluation and scores 90%. Furthermore, there is room for improvement in the web page, which reaches a 78% global satisfaction. The main reasons for these satisfaction grades point at receiving a good and rapid service, clear upfront information andvalueadvice.Also,themainreasonsfornotbeingsatisfiedpointatreceivingmediocreadvice, not keeping the customer informed and the unfriendliness of the website.

Thissubsidiaryexceededby3pointsthe2018satisfactiongoal.Thesatisfactiongoalhasremains steady since 2015.


63_

BancoEstado Corredores de SegurosIn our 2018 measurement to determine the level of satisfaction of our customers, we obtained 83% satisfaction and an 82% recommendation from our survey about the claims payment process.

Microempresas Asesorias Financieras (BEME)At BancoEstado Microempresas the evaluation of the satisfaction of its customers contemplates customers with at least one transaction in the last 3 months and with transactions that involve movement of money such as draws, deposits and transfers, among others. The Microempresas’s customer satisfaction is monitored every day through IVR (Interactive Voice Recognition) interviews.

The Satisfaction Indicator is built through aweightedfigureamongtheresultsofthechannels where the client has had interaction (Teller, Customer Service, Microempresas executive,CajaVecina,ServiEstado,Weband Branches).

As a result, 8 out of 10 micro-entrepreneur customer evaluate us with grades 6 and 7 the satisfaction with BancoEstado Microempresas out of a total of 19 thousand customers called in the 2018 period, maintaining stability in the trend of last year.

Servicio de cobranzas (BECO)Our measurement to determine the satisfaction of our BECO clients is made once a year across the country through all the channels whereby they are serviced (Call Center,Branchesanddomiciliaryexecutivesinthefield),inclosecoordinationwiththeQuality Management of our bank.

In 2018, we were rated 71% in service satisfaction, which is the same result of the last three years. Taking into consideration our belonging to the collections industry, which does not get good rates and on top of thatclientsusuallyareundergoingadifficulttime in the credit cycle, such as default, this result is most valued by BECO.

It is also consistent with our culture that puts people at the center of everything we do. This is also shown in the awards we have received, such as standing among 16 finalistsoutof80companiesworldwideforthe Service Design Award (SDA), recognition to organizations focused on service that enhancestheclients’experience.

Sociedad de Servicios Transaccionales CajaVecina S.A.In 2018, the satisfaction level of CajaVecina operators reached 80% in average (+3 points above the average obtained in 2017). That is, 8 out of 10 operators evaluated their service satisfaction with grades 6 and 7. Global satisfaction of CajaVecina users remained stable, achieving 88% gross accumulated satisfaction, as of December 2018. This figureranksonepointabovethegoalandone point above the average for 2017. The main reasons declared by users for these satisfactionrateswere:“goodserviceandkindness”,followedby”fastandefficient”service.

*Subsidiary Red Global (Compraqui) does not have satisfaction rates of its customers for2018,asjustthisyearofficiallystartedtheir activities.


64_

4.Strengthen financial inclusion 2.0: more services and coverage_


65_

4.1 Management focus_

Subject issue: strengthen financial inclusion 2.0: more services and coverage

Relevance rationale

Financialinclusionisatthecenterofourmissionasaninstitution:“WeexisttomakeChileamoreinclusiveand equitable country, with opportunities for everyone”.

Startingfromthisprinciple,weseektoconsolidatethebankasaleaderinthecountry’sfinancialinclusionand be a universal bank through delivering more services and coverage.

Coverage WeholdpresencealloverChile.Besides,wewanttobethefinancialadviserofallpeopleandbeapartnerbank to undertake.

Associated Management

Weworktobepresentintheentirecountryandstrengthenanentrepreneurialculturethroughourextensiveservice network. In addition, we assume the need to adapt to the current life of our customers through different products, such as the new CuentaRUT card and new service channels such as Sucursal Activa.

Onthispoint,thedevelopmentofdigitalbankinghasbeenadeterminingfactortoofferadigitalexperienceofexcellencytoourcustomers.

Thefollowingitemsstandoutinourmanagement:• Products that impact inclusion, such as CuentaRUT• Nationalbranchnetwork,ServiEstadooffices,CajaVecinaandCompraqui• New branches• Digital presence• Universal care program

Evaluation Mainfiguresattheendof2018:

• 13.2 million retail customers • 11.2 million CuentaRUT at the end of 2018.• 726 thousand immigrant clients.• 416 branches at the end of 2018.• 7 new branches.• 34% of our branches are the only bank present in the communes where they are installed.• 25,400 CajaVecina branches at the end of 2018.• 3,253 new branches during 2018.• 36 universal branches deployed throughout the country.• 70%ofourofficeshaveanadequacyaccessplan• 610,296 followers on Twitter, Facebook, Instagram and LinkedIn


66_

4.2 Formats adapted to the customer’s life_

At BancoEstado we understand that our services are part of everyday’s life of our clients and that is the reason we seek to ease the processes and adapt them in the best way to their lifestyles. We have concentrated our efforts thebestwaytotheirlifestyles.Wehavefocusedeffortsonexpandingourdigital and physical formats as well as enable more and better products

foragrowingnumberofpeopleinordertoachieveafinancialinclusionthatintegratesallthe people in the country without any kind of distinction.

Inthismanner,in2018weexceeded11.2millioncustomerswithCuentaRUT,whichmeansgrowing by more than 1 million people in one year. Also, a great innovation was incorporated in the last quarter of 2018 , we start the pilot of the “New CuentaRUT card” that will allow to improve the offer of the product and update its tariff. This new card integrates technology and security developments by including a chip and the option to make purchases abroad.

Thecommitmenttointegrateall inhabitantsofChiletothefinancialsystemwithnodistinctions has led us to strongly support the processes related to the insertion of migrants inourcountry.Wehighlightourparticipationintheprocessofextraordinaryregularizationof immigrants in the Department of Foreign Affairs and Immigration carried out by the Government through the Ministry of Interior, between the months of July and November along the entire country. In this process we enabled the registration of CuentaRUT and the optiontosendremittancesabroadaswellasreceiveinformationonfinancialeducationtomorethan35thousandimmigrantsthroughflyerscontainingcounselinginformationin Creole and Spanish, in a simple and didactic way, “En Fácil y en Chileno”.

Regarding the option to send remittances abroad, we want to highlight the link between this initiative and one of the specific goals of ODS 10, because precisely, sending remittances and collecting moderate commissions are part of this objective in the sense of improving regulation to institutions and financial markets, easing migration.

Inthefieldofeconomicandsocialinclusionand specifically of minority groups of our society, BancoEstado has continued deploying initiatives at a national level of the Universal Customer Service Program, whoseobjectiveistoeasefinancialaccessto people with disabilities, senior adults, , immigrants and native peoples, among others, doing what is necessary to reduce the physical and technological infrastructure, social and/or cultural barriers that 5.5 million people that make these groups must face.

To the end, this program contemplates adjustments in the bank’s infrastructure and the development of new face-to-face and remote assistance tools in order to deliver a service with equal treatment and autonomy.

11,215,791CuentaRUT clients at the end of 2018

1,035,968new account openings in the last year


67_

Universal branches

BancoEstado has a policy to incorporate the layout of universalofficesinallnewbranches since September

2016. To the present day, we have 36 universal branches deployed throughout Chile;sevenofthemwereopenedin2018(Freire, Florida, Retiro, Pelluhue, Cisnes, Centro Civico (Santiago) and Lo Espejo).

Branches with these characteristics are equivalentto9%ofourbranchofficesandarelocatedasfollows:Av.Apoquindo,Bulnes,Calama, Calle Larga, Chépica, Chillán Viejo, Cholchol, Cisnes, Coquimbo, Curarrehue, El Carmen, El Tabo, Freire, Florida, Hijuelas, Hualaihué, Lago Ranco, Lo Espejo, Mariquina, Civic Center, Negrete , Olivar, Paredones, Pelluhue, Retiro, Río Claro, Sagrada Familia, San Pablo, San Pedro, San Rafael, Santa María, Santo Domingo, Victoria, Viña del Mar and Yerbas Buenas.

Our universal branches are designed to provide equal attention to all customer service booths, which includes service countersanddoubleheightboxesandallthe facilities for autonomous access and circulation, such as ramps, vertical platforms andfingerprintreaderswhereverneeded.

Likewise, our accessibility adequacy plan in the rest of the branches is 71% complete, whichisequivalentto295branchoffices.Becausewebelieveinequaltreatmentandtheright to autonomy of people, we are the bank that offers the widest network with universal access in the country.

Web and mobile accessWe have adjusted our web site so a larger number of people become aware of our products and access their simulators by themselves, thanks to the read-speaker capability and compatibility with the reading programs used by blind and limited vision people. These modificationsbenefittheblindcommunityaswellassenioradultsandthosewhodonotunderstand written Spanish.

Moreover, BancoEstado has strengthened the alliance with LAZARILLO MOBILE, an application for people with visual disabilities, aimed at reaching 100% of BancoEstado and ServiEstado branches in the country downloading the application. Furthermore, at 45branches,usersoftheappmaybeguidedinsidetheofficeandaccessinformationonthe location of ATMs, counters and all the service modules.

Card printingTorespecttheidentityofallpeople,BancoEstadohasmodifieditsproceduressoourclients may print the plastic face of their checking account card, electronic checkbook or savingsaccountwiththenamethatidentifiesthem.

Lowering the language barrierThrough its Call Center, BancoEstado provides consulting services to the Haitian community in Creole language to those not yet familiar with Spanish language, easing in this manner theirfinancialinclusion.In2018,therewere3,400callsinCreoletoour24hoursContactCenter.

In addition to the brochures in this language, in 2018 we added to our website a space that provides information of the main products and post-sale services in Creole. Finally, we have managed to make available the remittance service abroad not only at a much lower cost than the rest of the market but also facilitating their registration through a form, also in their native language.

CuentaRUT accounts issued to foreigners:

December 2018713,847

December 2017444,878

Keeping Mapudungun alive

BancoEstado promotes the richness of the language of the aboriginal people. During 2018, we made available in our public site information on CuentaRUT and major post-sales services in Mapudungun language, accompanied by audiovisual material.

60%increase


68_

CuentaRUT(Millions of active cards)_12

10

8

6

4

2

02006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: BancoEstado

1.2

2.9

5.3

7.4

9.2

11.2

CuentaRUT customers continued to grow strongly during the year at a rate of 10% per year, which represented more than one million new cards, exceeding 11.2 million; a remarkable figure in a country with a population of 18.8 million.

4.3 Physical presence in the country, geographic coverage_

In 2018 we reinforced our commitment to get all the people in Chile closer to quality financial services and serve them with the

best service regardless of distance or geographicdifficultiestoreachthem.Thecontinuous growth of our service network and its geographical coverage, the opening of new branches and the arrival to isolated localitiesthatdidnothavefinancialserviceshas let us to focus our drive on one of the pillars of our management, namely the financialinclusionofallpeoplewhoinhabitour country.


69_

XV Arica y Parinacota

I Tarapacá

II Antofagasta

Sucursales

5

ServiEstado

3

CajaVecina

608

ATMs

29

7 3 548 40

15 3 774 74

Compraquí

86

144

412

III Atacama 10 3 712 47 170

IV Coquimbo 21 4 1.690 108 321

V Valparaíso 46 13 2.580 288 1.145

RM de Santiago 129 46 6.378 928 6.339

VI Lib. Bernardo O’Higgins 29 4 1.850 134 398

VII Del Maule 26 5 2.476 144 331

VIII Del Biobío 36 7 2.338 206 699

IX La Araucanía 30 4 1.583 133 462

XIV Los Ríos 13 2 668 70 154

X Los Lagos 28 5 1.695 135 475

XI Aysén 5 1 331 17 131

XII Magallanes y la Antártica 5 1 253 37 165

XVI Ñuble 11 3 916 56 123

Total 416 107 25.400 2.446 11.555

Service network (points as of December 2018)

4.3.1Branch network_Below we show the main advances on growth of our service network in the country during theyear2018:


70_

25,400CajaVecina points

2,446ATMs

342drop boxes

913dispensers*

107ServiEstado branches

416BancoEstado branches countrywide

BancoEstado is the banking institution with the most extensive network of points of service in the country, with presence in all the communes.

During 2018, we have opened 7 new branches, especially in communities without the presence of other banks, such as Freire, Retiro, Florida, Pelluhue, Cisnes and Lo Espejo. These openings allow us to advance in the inclusion of smaller or more isolated locations to the field of banking services, allowing their inhabitants to have all the banking products and services within their own localities.

People who live in areas faraway from large cities or in densely populated municipalities, access banking services through ServiEstado and/or CajaVecina points located in places closer to their residence.

Thewidecoverageofourinstitutionconsolidatesusasthemostextendedbankingnetworkof the country, with presence in all communes through different formats. These advances strengthen our position as the most relevant branch network in the country, which in 2018 completed416servicepoints,reachingwithfinancialservicestomorethan96%oftheinhabitants of the country. Along with this, we serve more than 6 million customers per month at a national level and we have presence in 262 out of the 346 communes in the country, equivalent to 76% of the total.

*dispensers deliver balances, bank account statements and credit payment coupons. ATMs allow to draw, deposit and transfer money among your own accounts, recharge the BIP card and prepay mobile phones.

Of the total of 416 branches, 14.6% are located in municipal lands or premises, as a result of agreements with local governments to facilitate access to banking in these locations.

Added to the above, to December of the same year, we were the only bank present in 134 communes in the country, which translates into 32.2% of our service network is in communes where we are the only bank.

Our focus in the branch opening plan concentratesonenhancingthefinancialinclusion in remote or vulnerable locations that have few or no financial services available. The importance of this objective lies in the positive impact that occurs in the place of origin, since, on the one hand, the economicflowstartstocirculateaspeoplestart to spend in their own location, starts to save and manage payments through financialservicesandontheotherhand,spends less time travelling around doing financialerrandsandtheidentityandsenseof belonging to the territory they inhabit gets stronger.


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4.3.2 CajaVecina_

On the other hand, we expandedourcoveragetoover 25 thousand CajaVecina service points in the country. By opening the CajaVecina

service point in Melipilla, we set a new milestone in the growth of our correspondent network, which allows us to reach millions of people and is now present throughout the national territory, from Arica to Antarctica. Of the 25,400 service points that we had, 3,253 were new additions in 2018.

The installation of CajaVecina points occurs indifferentspacessoastotakefinancialservices to people who live in isolated localities, in diverse geographic and cultural territories of our country. We already have points in fairs, boats that run through the Chiloé archipelago and, from 2018, in huts in the central south area of the country, as part of the Wengamen Plan, which means “Open a path” in the Mapudungun language.

On closing 2018, we counted 202 service points;amongourinnovatedformats,wequote:

• 1 hut• 2 boats• 7 catalog sellers • 192fleamarkets

During 2018, we processed 387 million transactions, which represent a 15% increase with respect to the total transactions of theyear2017;44.5%ofthetotalin2018corresponds to drafts and deposits. In turn we completed 1,149,889 FONASA vouchers (public health system) sold through CajaVecina, adding at the closing of the year more than 1.5 million payments since the agreement started.

CajaVecina in a Carahue hut and Wengamen Plan

In November 2018, we inaugurated a new CajaVecina point in the hut of Yesika Marivil, in theCarahue commune, locality of Trovolhue in the region of Araucanía, with which we started the Wengamen Plan (“open a path”), which consists of enabling the service provided by the BancoEstado subsidiary CajaVecina in huts at different emblematic places of the central south of Chile.

Regardingtheimportanceofthismilestoneforfinancialinclusion,BancoEstadochairmanArturoTagle,assured:“ThishutwillopenapathtothemapuchecommunitiestoaccesstoallthebenefitsthatCajaVecinaprovides,inadditiontobringcloserfinancialservicesandimprovetheirqualityoflife;wewanttobeacontributiontothelocaleconomicdevelopment”.

CajaVecina service points

_

25.000

20.000

15.000

10.000

5.000

02006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: BancoEstado

1.003

3.327

7.130

11.461

16.504

22.147

25.400

CajaVecina holds presence in all Chilean communes, including Antarctica, thus allowing people who live far from bank branches to access various financial services provided by BancoEstado, pay bills and even buy Fonasa health care vouchers, with the convenience of these points being in stores and commercial premises in your community.


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4.3.3 ServiEstado_

ServiEstado registered a total of 107 branches at the end of 2018, throughout Chile, not registering new openings during the year and a total of 37.7 million transactions.

Thanks to a joint effort between the bank and the subsidiary Corredora de Bolsa, in 2018 we started remittance operations abroadthroughServiEstadotofivecountries,Haiti, Peru, Bolivia, Ecuador and Dominican Republic, seeking to provide greater security and accessibility through all our service points,extendedbusinesshoursandreducedservice fees to immigrants settled in Chile.

4.4 Digital presence _

The dizzying speed of today’s communications lays on us to be available to our clients at all times and anywhere, maintaining the connection with our customers through the various channels. In 2018, we focused on enhancing ourofferofautomatedservicesanddigitalchannelsaswellasexpandingthecommunication channels with our clients through social networks, trying our

besttodeliverclearandefficientanswerstoallquestionsandinquiriesfromourfollowers.

Total digital clients (users of a digital channel such as the Internet, app or Mobile Banking), as of December 2018, were 5,584,542 with 115,077 users being the average monthly growth. The graph below shows the growth of our digital customers in the last year.

Estimated and effective 2018 growth_

6.000.000

5.000.000

4.000.000

3.000.000

2.000.000

1.000.000

0

Dec 20

17 Jan

Feb

Mar Apr

May Ju

n Jul

Aug Sep OctNov

Dec 20

18

Monthly linear goalActual linear goal


73_

Internet clients(000s,index2005=100)_

4.500

4.000

3.500

3.000

2.500

2.000

1.500

1.000

500

02006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018


145

2005

367

1,015

1,482

2,35

6

3,17

0

4,23

2

BancoEstado clientsBancoEstadoindexSystem’sindex

Participation in number of banking clients on internet(%, Dec-18)_

39%BancoEstado

19%Bank 2

18%Remainder

10%Bank 4

14%Bank 3

* total internet clients: 10.6 millionSource: SBIF

39+19+18+10+14+M39% of the banking clients that use Internet for their transactions in the banking system are from BancoEstado.

Thefiguresbelowshowourcustomersoninternet,ourcustomers’shareinthesystem,the total annual internet transactions and total transactions of our customers that use mobile banking and/or BancoEstado’s mobile app.

Clients of BancoEstado massively use the Internet to carry out their banking operations; these clients exceed 4.2 million at the end of 2018.

Between 2006 and 2018, these BancoEstado customers augmented 32% annual average, while those of the system did 19% annual average.


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Annual BancoEstado Client Transactions on Internet and Mobile(millions)_

1.500

1.250

1.000

750

500

250

02006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Fuente: BancoEstado

282005

40

141

287

547

707

1.443

BancoEstado Mobile Clients*(000s)_

3.000

2.500

2.000

1.500

1.000

500

02012 2013 2014 2015 2016 2017 2018

* Clients that use Mobile Banking and / or mobile application

356

952

1.90

3

2.98

4

Figures of web totem, digital products and administrative transactions

• In 2018 we registered 281 web totems installed in 233 branches, 47 ServiEstado branches and in 1 self-service laboratory.

• The total number of visits to the bank’s website is 711 million for the year 2018. One visit is browsing the web site during an uninterrupted time, regardless of the number ofpagesexaminedwhilevisitingthesite.

• Total of transactions through the mobile app, which contains PagoRUT and APP, was 522 million for the year 2018.

• Total of automated transactions was 3,191 million, which is 97% of all transactions registered(tellerbankingandServiEstadoexcluded)for2018.

Thankstotheextendedcoverageofournot in-person channels such as ATMs, web and mobile or POS service points, our not in-persontransactionsexceed265millionper month, which is 45% of the country’s financialsystem;thatis,wecontributetodecrease costs and time doing in-person errands and chores, even favoring the reduction of carbon emissions.

Transactions of BancoEstado’s customers through Internet and mobile have grown in recent years. During 2018 they reached 1,443 million, with an important growth in those made through the application of the bank.

Nearly three million customers used mobile banking and/or the mobile application, as of December 2018, having experienced a 20% growth during the year.


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4.4.1 Our social networks_

Ourfollowersinsocialnetworkskeepgrowinginsignificantnumbers.In2018wereacheda total of 610,296 followers in our social networks, including Twitter, Facebook, Instagram and Linkedin.

394,091 164,652 9,008 42,545

Totalcommunityinsocialnetworks:610,296 followers

Total reach: 8,605,626 FacebookTotal impressions: 9,888,319 Twitter, Instagram and Linkedin60,397 likes in Facebook, Twitter and Instagram+1,290 posts between posts and stories

Specifically,wehad124,071referencesinTwitterandidentifiedusersthatusethisnetmostly to twit and talk about news where BancoEstado is mentioned, as well as to make complaints and inquiries about products and services. For its part, we recorded 64,362 reactions and comments on Facebook, a network most users use to post complaints and questions on products and services.

124,071total referrals on Twitter

64,362

total interactions (reactions and comments) on Facebook 2018

On the other hand, our Customer Service Platform registered a total of 336,267 and 119,018 interactions through Twitter and Facebook, respectively, at the end of 2018, demonstrating that for our users, Facebook concentrates interactions, which may be due to the absence of the restriction by characters that Twitter has. Regarding the type of interaction that the platform received during 2018, it is possible to state that 63% corresponded to queries followed by comments and contingencies.

The products that generated the most queries were CuentaRUT, consumer loans and savings, while the channel that concentrated the most doubts and queries was the bank’s website, followed by ATMs and branches.

336,267

total interactions serviced in Facebook 2018

119,018

total interactions serviced in Twitter 2018


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Active Branch

A relevant innovation to move forward towards providing quality service to all our customers is Sucursal Activa (Active Branch), an initiative whose main objectives are, on one hand, todeliverabetterexperiencetoourcustomersthroughamoreexpediteservicebyusingautomated channels, shorter lines and less waiting time, and on the other hand, improve the quality of life of our workers.

The initiative brings together a number of lines of work to be implemented in the short andmediumterm,emphasizingsimplerprocessesandexpediteserviceatcountersandtellers by routing customers towards other channels, not in-person and self-service.

To the date, we have already made improvements after deploying this initiative, such as eliminate the commission charge to get CuentaRUT statements through self-service, the optionofimmediatedisbursementofapprovedloans,thetimeextensiontoactivatethepassword in plastic cards from 48 hours to 10 days and allow to activate passwords in the customer service counter through a point of sale device.

4.5 Acquirement Network – Compraquí _

Inordertocontributetothefinancialinclusionofsmallbusinessinourcountry, as well as to simplify life and make it more agile to our customers, we have been implementing “Compraquí” since 2017, which is an electronic payment system that seeks to cut down the use of cash and reach all corners of the country, with special focus on business that did not have payment

through cards to their clients.

A wide coverage of the Compraquí network is part of our commitments to the year 2022, seeking to facilitate the use of “plastic money” for all people in Chile, decrease the use of cash and be the bank where other banks are not present. The mission of this new subsidiary is to contribute to the social and economic development of the country through an acquirement network that lets small and micro business accept card payments. The objective of this new network is to generate the necessary conditions to encourage sectors currently lacking this type of service, regardless of their size, transactional level orgeographiclocationinordertoreachabetterfinancialinclusion.

To the date,, out of the 1.7 million transactions completed with this system (worth $21 thousand millions), two thirds are from people and one third from small size business. From the customer’s perspective of commercial establishments, the record shows that over 60% of the users that pay via Compraquí are BancoEstado clients, most of them CuentaRUT account holders.

Compraquí was designed as another tool for financial inclusion, so micro businesses may incorporate payment with cards in a sustainable manner, not requiring a fixed monthly lease and maintenance fees for the POS.

RegardingthetypeofbusinessaffiliatedtoCompraquí, a large number corresponds to micro and small businesses, some of them distant, with a low volume of transactions and very low amounts. At this point, it is important to highlight that the Compraquí commercial plan deems to reach, in particular, economic activities and geographic areas where there is rare coverage of other networks, seeking also to train business in the appropriate use of the system, generating in turn changes in consumer habits.

As a result, we may point out that at the end of 2018, Compraquí is present in 86% of the communes in Chile demonstrating its widecoverageintherolloutstageandfirstyear of operation, scoring 11,555 points of Compraquí deployments. During the year, wecontinuetoextendourcoveragethroughthis platform and thus our work with small and medium size businesses throughout the country.

Fromthefigureabove,67%oftheCompraquíoperators are natural persons, entrepreneurs that see their business being helped with this new tool.


77_

Región Number %

XV Arica y Parinacota 86 1

I Tarapacá 144 1

II Antofagasta 412 4

III Atacama 170 1

IV Coquimbo 321 3

V Valparaíso 1,145 10

Metropolitana 6,339 55

VI Lib. Gral. Bernardo O’Higgins 398 3

VII Maule 331 3

XVI Ñuble 123 1

VIII Biobío 699 6

IX La Araucanía 462 4

XIV Los Ríos 154 1

X Los Lagos 475 4

XI Aysén 131 1

XII Magallanes y Antártica Chilena 165 1

For2019,Compraquíexpectstoenrollsome40,000commercialestablishments,whichcould start accepting payment with cards through mobile card readers (mPOS).

Finally, it is important to consider that the payment alternative presented with this new network allows to complement the means of payment traditionally used in small businesses (cash and checks), enabling in the future that electronic means of payment become the main form of payment in such stores or, at least, their use becomes equivalent to cash. The latter will allow a more agile and secure commercial operation for businesses and cardholders, fostering the disuse of cash and ATMs in a way to contribute to prevention of potential crime cases.

At the end of 2018, we have 304 stores associated with Compraquí that also have CajaVecina; this is equivalent to 1.2% of the CajaVecina network, progressively integrating our services.


78_

5.Promote a national savings culture_


79_

5.1 Management focus _

Material issue: promote a national savings culture

Relevance rationale

At BancoEstado we understand that savings is a fundamental condition for the future of families, as well as for the functioning of the national economy. For this reason, one of our major goals is to relay and hold our leadership as the savings bank of all Chileans, promoting this important value is part of our culture as a countryandatoolthatfacilitatesthefulfillmentofourdreams.

Coverage TheimpactisgeneratedinallfamilieslivinginChile,fromthefirstgenerationstotheyoungests,andwhomweinvitetobepartoftheworldofsavingsthroughvariousproducts,servicesandfinancialeducationactivitiesthatwillcontributetofulfilltheirdreamsinthemediumandlongterm.

Associate management

We have a number of tools that facilitate savings for individuals and families, at different levels and for differentmomentsoflife.Inparticular,wehighlightour:• Savings accounts• Pension savings accounts• Voluntary Pension Plan (APV)• Savings accounts for housing• Time deposits• Mutual Funds

Wecomplementtheabovewithourworklineonfinancialeducationtopromotesavings,composedbyasetof programs and in-person as well as digital initiatives such as the “Usa bien tu Plata” (Use your money wisely) “En fácil y en Chileno” “ (Easy in Chilean slang) and our national campaign “Ahorrar es un Valor” (Savings is a Value) in social networks to encourage savings.

Evaluation Mainfiguresattheendof2018:• SavingsAccounts,openings:852,470• SavingsAccounts,total:9.3million• APVAccounts:153.857• We serve 42% of clients with housing loans from the banking system.• ProgramUsabientuPlata:259schoolsandmorethan9,000studentsbenefited• ProgramEnFácilyenChileno:1,559,565visitssince2014.During2018weregistered197,310visits

to the website and 86,212 accesses from our Facebook page.• CampaignAhorraresunValor:2,694,873inFacebook;9,470likesand3,984comments


80_

5.2 Savings as a development engine _

BancoEstado is in the memory of Chileans as a savings bank, endowing this crucial tool with a unique value that helps to meet important goals in

the different stages of life. Today, as one of our strategic guidelines, we want to highlight this role and enhance its relevance not only inthelifecyclesofpeople,fromthefirstyears of infancy to adulthood but also in the economic development of the country.

To move forward on this direction it is of upmost priority to promote a culture of savings in the country making everyone known, especially the younger ones, the importance of generating reserves for the future from an early age. In this frame, we launched in 2018 a “Ahorrar es un Valor” (Savings is a Value) campaign in our social networks focusing on young that through our social network #ahorraresunvalor managed 9.470 likes in publications, 3,984 comments, and a total reach of 2,694,873 on Facebook.

We also made on line contests and a Facebook Live on October 31, the Day of Savings, which recorded more than 22 thousand interactions (shared, reactions and comments) and 361 users connected simultaneously following our transmission for 2 hours. In addition, the hashtag #ahorraresunvalor registered a mark of 2,748 mentions, while #mesdelahorro scored a total of 756.

Facebook Live

2018 social networks #ahorraresunvalorsavings campaign milestone

2,796comments

2,011storiesreceived

147,779reach of scope

95.3%positive comments received

4.4%neutral comments

1.9%negative comments

Contests

+200stories received

80awarded stories

Hashtag

2,748uses of #ahorraresunvalor

80uses of #mesdelahorro

Facebook

3,984comments on publications

9,470likes

505times shared

2,694,873reach of pubs and savings actions

On October 31, Facebook Live registered 22,000+ interactions (shares, reactions and comments)

361+ users simultaneously connected following the transmission during 2 hours.

+43,300impressions

+1,080likes


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While developing this campaign, we incorporated the innovation of opening savings accounts through our Digital Banking, reaching 65 thousand openings in 2018 since our app was available. Additionally, we established that October would be the “Month of Savings”, achieving a historic sale of 80 thousand new savings accounts only that month.

On a more global level, at the end of 2018 we recorded an increase of 852 thousand savingsaccounts,exceedingourcommercialgoal and adding more than 9.3 million customers with current savings accounts, an 89% share in deposits in the system’s savingsaccounts,confirmingourleadershipandprivilegedpositiontopositivelyinfluenceinthenationaleconomicflow. 73+13+5+9+M

89+5+2+1+3+M

Participation by tranches of customer balances with BancoEstado savings accounts(%, Dec-18)_

Up to M$100

73%

*Total term savings: MMM$4,973Source: SBIF

M$100 - M$500

13%

M$501 - M$1.000

5%

More than M$1.000

9%

*clients with current savings accounts: 9.3 millionSource: BancoEstado

Participation on balances of savings accounts by bank(%, Dec-18)_

BancoEstado

89%

Bank 2

5%

Bank 3

2%

Bank 4

1%Remainder

3%

73% of clients with BancoEstado savings accounts have balances of up to $100 thousand. BancoEstado continues to be the undisputed leader in Savings Accounts for people.


82_

On the other hand, thinking about the autumn of life, we have set ourselves the objective of contributing to improve the pensions ofallChileans,inacountrycontextwherethe debate of the pension system aims at the need for a profound change, which is in linewiththecurrentexpectationsofqualityof life of the citizens. At BancoEstado we want to strengthen the system with timely solutions that will let our clients and their families to have better retirement conditions.

In this sense, our product Voluntary Pension Savings (APV) was consolidated as a strategic product in the value offer of the bank, incorporating 154 thousand new clients that have trusted us to manage their complementary retirement savings. Withthisfigure,wenotonlymanagedtoexceedthetargetswehadsetforth,butalsoaccumulated a total of 242,464 accounts, as of December 31, 2018.

Looking at the future, we have the challenge of to continue deepening into this area by incorporating more people into our APV system and increase the amount of savings, as well as by promoting APV in collective and group initiatives at business through special agreements. Below, we present a summary table with our main commercial results,bothinsavingsandinAPV:

Progress and fulfillment of commercial goals 2018_

Sale Retail segment

2018

Savings (units) 852,470

APV (units) 153,857

BancoEstado: Mutual Funds and APC Customers(000s)_

700

600

500

400

300

200

100

02006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: BancoEstado

23

2005

82

140

193

279

373

682

494

242

105

26109

FFMMClientes APV

26% of Mutual Fund customers are from BancoEstado, reaching more than 682 thousand.

53% of APV clients are from BancoEstado, reaching more than 242 thousand, which save from $ 10 thousand per month to improve their retirements.


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Current insurance(000s)_

9.000

6.000

3.000

02006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: BancoEstado

2.30

9

2005

7.50

1

OtherTied to housing loans

2004

1.189

1.32

9

1.86

2

1.917

1.70

9

1.498

1.51

1

1.074

5.84

9

4.86

1

3.55

0

2.61

5

1.87

7

1.75

9

1.120

3.0

88 3.73

9 4.53

2 5.25

9

6.36

0 7.36

0

8.57

5

Strong expansion of insurance: the insurance subsidiary of BancoEstado has more than 8.5 million insurance policies in force covering a number of risks for more than four million customers adding up people and companies.

We deem that another important way to think about saving for the future is the purchase of long-term real estate, which allows securing a home for people and their families. In this area, our bank is also positioned at the highest levels, as 42% of the clients with housing debt are from BancoEstado,whilewerepresentonefifthof the total home loans of the system for low and middle income segments.


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42+12+16+18+12+MBancoEstado share in number of clients with home loans*(%, Dec-18)_

BancoEstado

42%

Bank 4

13%

Bank 3

16%

Bank 2

18%

*Total clients in the system: 1,076,189Source: SBIF

Remainder

12%

20+12+17+21+30+MBancoEstado share in balance of home loans*(%, Dec-18)_

BancoEstado

20%

Bank 4

12%

Bank 3

17%Bank 1

21%

*Total home loans above MMM$48,039Source: SBIF

Remainder

30%

BancoEstado is the leader in home loans in the country for low and middle income segments.

The bank serves 42% of home loans customers at the banking system.

40+28+29+3MBancoEstado clients with home loans by debt tranche (%, Dec-18)_

Up to UF 400

40%

Between UF 400 and UF 1,000

28%

Between UF 1,000 and UF

3,000

29%

More than UF 3,000

2%

Source: BancoEstado


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Up to UF 400

40%

69% of BancoEstado home loans’ clients have debts of up to U.F. 1,000

BancoEstado is a leader in outstanding home loans up to U.F. 1,000, with 73% market share

100%

80%

60%

40%

20%

0%UF 400-1.000 UF 1.000-3.000 + UF 3.000


Hasta UF 400

5%

Participation in home loans by current debt tranche(%, Dec-18)_

33%

66%

96%

95%

67%

34%

4%

BancoEstadoResto


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5.3 Financial education to promote savings _

Inourinstitutionwehavethestrongcommitmenttoprovideintegralfinancialeducationto our customers so they may make a proper and correct use of their budget and get the maximumbenefitfromtheirbankingproductsbasedoninformationofoptimumquality.

Savings, budget management, responsible indebtedness, consumer rights and the convenient useoffinancialproductsarecentralsubjectsofourinitiativesonfinancialeducation,aswe deem them as vital tools for the economic well-being of people and constitute a tool of fundamental cultural capital to reduce social gaps and empower the most vulnerable socio-economic sectors.

Our aspiration is that every inhabitant of Chile understands the most important concepts offinancialservicesandwhenhe/sheneedstocontractaproduct,evaluatewhetheritisreally necessary to do so, have prior knowledge of the risks he/she might face and that once a decision to contract said product is made, he/she knows where to look for the differentalternatives,understandwhatfinancialcompanieswilloffer,evaluate,compareand choose the best option in a well-informed manner. Wehighlightamongthein-personinitiativesoffinancialeducationtheprogram“Usabientuplata” (Use your money wisely) aimed at high school students of the entire country through asignificantnumberoftalks,participationinfairsandfieldtrips,inclosecollaborationwith State institutions. Furthermore, the digital platforms “En fácil and en Chileno” and “CreceMujer”areimportanttoolsfordeliveringcontentoffinancialeducationinanagileand simple manner to individuals as well as to micro entrepreneurs, respectively.

Next,wepresentthemainadvancesofeachofthem.

In 2018, more than 830 thousand people participated, in different initiatives, modalities and platforms of financial education such as face-to-face talks, web courses, interactive digital games, online material, fairs and field visits. Specifically, over 130 thousand people participated in face-to-face activities and more than 700 thousand through digital platforms. 5.3.1

“Usa bien tu plata” _

Theobjectiveofthe“UsabientuPlata”istohelpreducethegapinfinancialeducationandpreparethestudentsfortheirfinancialpresentandfuturebyhandingouttoolsforthemtoimprovemanagingtheirmoneyandfinancialresources.

This initiative was originated in the format of workshops for students of municipal and subsidized private schools. Starting 2018, the program included educational fairs to strengthen their knowledge through didactic games with contents related to savings, investments,liquidity,risk,budgetandinflation.


87_

The program “Usa bien tu Plata” started in 2015 thanks to an alliance with the Business Administration and Economics School of Universidad de Chile and consultancy bureau Open GreenRoad(OGR);tothedate,theworkshopshaveinstructedatmorethan850schoolsand more than 28,000 students throughout Chile. In 2015 and under the pilot format, it was implemented in 75 establishments in the Metropolitan, O’Higgins and Valparaíso regions. Then in 2016 the number of schools reached to 200 at Coquimbo, Maule and Bio Bio regions in addition to the Chiloe Island in the Los Rios Region. More recently, in 2017 and 2018, it reached national coverage.

Ourhistoricalcoverageoftheprogramregistersasustainedincreaseovertheyears:

Year Total schools Total students

2015 75 1,840

2016 200 7,145

2017 281 8,810

2018 259 12,2186

The 2018 total includes workshops made in schools and educational fairs.

2018 results

Total of students participating in face-to-facetalks:8,718

Total number of participants ineducationalfairs:3,500

Total participating teachers:500

During the year 2018 we held a financial education workshops to nearly 9 thousand junior high school boys belonging to 259 schools from Arica to Punta Arenas. Also, we carried out 10 educational fairs in different communes, reaching 3 thousand students

from the Region of Arica and Parinacota

12from the Region of Tarapacá

12from the Region of Antofagasta

13from Region of Atacama

3

from the Region of Coquimbo

26from the Valparaíso Region

26from the Metropolitan region

28from the Libertador General Bernardo O’Higgins Region

31

from the Maule Region

26from the Region of Ñuble

1from the Bio Bio region

16from theAraucania Region

24

from the Los Rios Region

9from theLos Lagos Region

23from the Region of Aysén

4from the Region of Magallanes and Chilean Antarctic

5

Belowweshowthedetailbyregionofthe259schoolsthatparticipatedin2018:


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5.3.2 Program “En fácil y en chileno”_

The web site www.enfacilyenchileno.cl of BancoEstado is a website that with agile and simple language using OECD guidelines, covers the topics of organizing the family budget, how to incorporate the habit of savings and avoid over-indebtedness, among others. It aims to inform our users about the best ways to manage their money and improve their quality of life.

Thefinancialeducationcontentisdeployedthrough 25 tutorial videos in Spanish with subtitles and sign language, in addition to being translated into the Mapudungun and Creole. It also contains a personal budget simulator and a game.

This platform, available since 2014, already has more than 1,559,565 visits and its videos, also available at the YouTube channel, register a historic 3,703,999 views. Meanwhile, during 2018 we registered 197,310 visits to the website and 86,212 accesses from our Facebook page.

81.321 28.310

The total number of followers of “En facil y en chileno” (Dec-2018) in is Facebook: 81,321 and in Twitter: 28,310.

5.3.3 CreceMujer _

The objective of BancoEstado’s CreceMujer program is to promote and facilitate access to financialandnon-financialservicestowomenentrepreneursfromaneducationalwebsiteanddelivermostrelevantfinancialeducationtothoseatdifferentstagesintheirbusinessor even to anyone who at any time in their life plans to start it.

Thecontentisdisplayedthroughtextarticles,previouslydevelopedbyinternalexpertsatthe bank, in addition to tutorial videos or information graphs that tackle different topics of interest for women entrepreneurs.

This program, which began in 2015 in conjunction with the Ministry of Women and Gender Equity, had in 2018 more than 700 thousand visits to its financial education contents.

Please review section 6.3.1 of this Annual Report for further information and www.crecemujer.cl

https://www.crecemujer.cl/


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5.3.4 Otherfinancialeducation programs _

Our bank works with public and private alliances looking to reach for the largest

number of people and give to them theacquire knowledge to make informed financialdecisions.Nextwepresentthemost outstanding ones.

We participated in three national meetings coordinated by the UN International Organization for Migration , an intergovernmental organization devoted to the migration problem. In these talks, delivered in Santiago, Talca and Antofagasta, wetrained550migrantpeopleonfinancialeducation.

Another important milestone was the collaborative work with the Ministry of the General Secretariat of Government, through the INFOBUS project of the Division of Social Organizations, whose objective is to inform the community on government benefits,plansandprogramsthroughamobileofficeonpublicpoliciestocitizens.Ourbankparticipateddeliveringfinancialeducation to nearly 1,600 people, citizens of Concepción, Lota, Viña de Mar, San Felipe, Los Andes, Limache, Quillota, La Calera, Hijuelas and Valparaíso. Also, in the samecontext,wedelivered200lecturesonfinancialeducationtounionleadersfromthe cities of Lota and Talcahuano.

We had the presence of an advisory stand inthefirstexpoformigrantsorganizedbythe city of San Bernardo to nearly 1,000 immigrants, mainly Haitians, which is why we alsodevelopedthefirstFinancialEducationtalk with simultaneous translation to the Creole language.

Financial Education and Savings: BancoEstado Award for Journalistic Quality

During 2018, our institution hosted the eight version of the BancoEstado award to journalistic quality, an initiative that seeks to recognize journalists that cover the economic sector and that stand out for the contribution of their work in matters of inclusion and financialeducation.Wehaveawardedthistrophysince2008toatotalof42journalistsfrom various media.

In its eighth version, we received a total of 192 works. In the Metropolitan Region category, we distinguished journalist Ms. Daniela Paleo, from the newspaper El Mercurio, for her note“Theexperts’formulaforadolescentstoovercometheirfinancialilliteracy”.IntheRegions category, meanwhile, we recognized Mr. Javier Martínez, of the newspaper El SurdeConcepción,forhisarticle“Difficultasitmaybe,itisnecessarytodevelopthesavings habit”.

The second place in the Metropolitan Region category was given to journalist Mr. Francisco Franulic, from Channel 13, who applied to the eighth version of the award with four works, the most outstanding being the one titled “I don’t have enough bucks to get to the end of the month”. Likewise, journalist Ms. Camila Infanta, from Regional Media of ElMercurio,whosubmittedfivearticlestothejury,stoodoutinthecategoryRegionsfor their work “Know how to take advantage of low rates and renegotiate your debts.”

The prize that the two winners obtained consisted of a seven-day professional trip, jointly organized with the US embassy to Washington DC and New York City. In those cities, the journalists complied with an agenda that included meetings with media, government andinternationalorganizationsandentitiesrelatedtothefinancialenvironment.Also,they visited the BancoEstado New York Branch.

The BancoEstado Award for Journalistic Quality rewards the best journalistic works focusedonfinancialinclusionandlikewisemattersthatmarktheeverydaylifeofpeople,as a way to distinguish media professionals by their journalistic quality and contribution to the community in their role to inform and analyze the deeds of the economy.


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6.Drive development by supporting smaller size companies_


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Material issue: promote development by supporting small size companies

Relevance rationale

As an essential gear in our economy, Small Companies (EMT) are an important part of our strategy to support the country’s development. At BancoEstado we focus this purpose by directly working with small andmicroenterprisesalloverthenationalterritory,tryingtoexpandourcoverageandpromoteacultureofentrepreneurship.

Coverage The impact is on our Small Business segment, which includes micro, small and medium size enterprises. It is of special interest for us to provide opportunities for funding, assistance and development to small and micro businesses, particularly those led by women located in all points of Chile, regardless of the distance, location or geographical isolation.


Our management includes working with our clients of micro, small and medium size companies, where we highlight:

• Progress at our subsidiary BancoEstado Microempresas (BEME) devoted to growth and advancement of the country’s micro entrepreneurs by supporting strategies in the most diverse areas and industries in the country.

• Entrepreneur Award 2018, which aims at distinguish micro and small entrepreneurs in the country.• Initiatives to connect our micro entrepreneurs with innovation and technology• Programs and initiatives to support women entrepreneurship.• Support to projects of conversion to renewable energies.

Evaluation Mainfiguresattheendof2018:

• Microbusinessclients:635thousand• Smallbusinesscustomers:59thousand• Mediumsizebusinesscustomers:6thousand• ProgramEmprende+Empresas:ParticipationofStartUps.• VirtualcommunityCreceMujer:+1.5millionvisits.• MicroandSmallBusinesswomenparticipants:254thousand

6.2 Client management of companies and institutions _

At BancoEstado, we want to contribute to the role played by the smaller companies (EMT) in our country, which have a direct impact on the dynamism of the economy, employment, innovation and, in the end, provide opportunities for people to improve their quality of life. That is the reason we have definedsupporttoEMTsasastrategicpillarof our work to boost economic development by promoting actions aimed at Small and Micro Enterprises, increase the territorial coverage of our services and strengthen the culture of entrepreneurship in the country.

We have more than 700 thousand small size companies among our clients at the end of 2018.

635 thousand active micro enterprise clients 59 thousand current small business customers 6 thousand medium size business customers+1,000 large business and mega size companies+800 clients in institutional banking


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6.2.1 Micro enterprises_

Our subsidiary BancoEstado Microempresas (BEME) turned 22 years old successfully backing the development of the country’s micro entrepreneurs and contributing to its progress and growth through numerous lines of work thatprovidespecializedfinancialguidance,productsandservicessuchasloans, funding, accounts, cards, insurance, savings and tools to foster the

different areas of our customers.

Business areas supported by BEME

Commerce Transport Manufacture and Services

Agriculture Tourism Fishing

As for our team and our service network, it is staffed by 1,248 workers, as of December 2018;277specializedserviceplatformsinthewholecountry,basedonpersonalizedserviceand focused on our customers regardless of how far away their location is.

In total, we registered a total of 635 thousand micro entrepreneur clients at the end of 2018, where nearly 244 thousand have some sort of funding from the bank. This is equivalent to a 7% growth with respect to year 2017. It should also be noted that 37% of our micro entrepreneur are women.

Micro enterprises loans (MMM$ as of Dec-18)_

1.200

1.000

800

600

400

200

02006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: BancoEstado

118

20052004

292

488

605

743

851

973

1.057 BancoEstado has provided

significant support to microenterprises in the last 10 years, more than doubling its loans, which reached MMM $1,057 as of December 2018.


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6.2.2 Small business_

Our segment Small Business reached a total of 59 thousand customers in 2018, equivalent to a 21% increase over the previous year. Among them,

56% received some kind of funding from the bank. The service network for our clients in this segment grew in 4 points, adding a total of 112 to the date.

On the other hand, we continued with our web site Empresarios en Red (Entrepreneurs on internet) with the purpose of contributing to the digital integration of our Small Business customers. This tool offers an exchangeopportunitywheresmallbusinessentrepreneurs may share their knowledge andexperienceand/orexaminebusinessagreements accompanied by updated market information before making market decisions.

Small Business loans (MMM$ as of Dec-18)_

1.200

900

600

300

02006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: BancoEstado

224

20052004

394

564 59

5 667

785

922

1.069

In the last decade, BancoEstado has permanently supported small and medium-sized companies, more than doubling their loans in these segments.

BancoEstado awarded the Entrepreneur Award 2018.

The Entrepreneur Award aims to distinguish a group of micro and small entrepreneurs and businesswomen in the country, customers and non-customers, who stand out for their stories of effort, entrepreneurship and overcoming. In 2018 we celebrated the XIV version of the award, carried out in a joint effort of subsidiary Microempresas with the Ministry of Finance, becoming the oldest award of its kind in the country. During these years the award has received more than 730 thousand applications, with 444 award-winning entrepreneurs, in a process that involves different stages.

The Entrepreneur Award has been adapted to changes in entrepreneurship and society. Since 2012 each category has a male and female winner. In addition, since 2013, regional awards have been added, which allow increasing the coverage of the contest at the national level.

Along this journey we have received more than 730 thousand applications and awarded 444 entrepreneurs at national and regional level, in different categories, such as services and commerce, transport, agriculture and innovation. Among the prizes awarded, there are 118 work vehicles and more than $ 325 million pesos in prizes.

Courtesy of an alliance established with CIDEF, in 2018 we awarded a utility vehicle to 8 winners nationwide, $6 million to two winners in the Innovative Entrepreneurship category and $1.5 million to 8 entrepreneurs in our various categories according to thebusinesstype:agriculture, fishingand tourism, commerce and services, transportation and small businesses. At the regional level, meanwhile, there were 30 winners of one million pesos in the micro and small company categories.

All in all, 48 micro and small prominent companies were recognized, out of a total of 24 thousand applications received in 2018.

These entrepreneurs speak of intuition, of the courage to undertake. They invite us to look at our surroundings and look for alternatives in it. They show us the value of reinvention,ofovercomingdifficultiesandobstacles we meet. They teach us to get back on our feet upon failure. All of them aregreatexamplesforChile.


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6.2.3 Midsize business_

Our results for the medium-sized companies segment show steady growth on funding during the last years that reached $1,339 thousand

millions on closing 2018.

Medium size Business loans (MMM$ as of Dec-18)_

1.400

1.200

1.000

800

600

400

200

02009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: BancoEstado

20082007

335 39

1

626

815

1.077

1.33

9

Commercial Integration for BancoEstado Micro and Small Companies

• Small Integration and BEME Coordination• Improvements and redesign of Micro and Small Business

Platform• Agreements• Mortgage chain• NewChallenges2019:NewEMTSegmentationandIntegration.

The Emprende + Empresas Program: a connection between our entrepreneurs and Start Ups

The program Emprende + Empresas was created in 2017 and seeks to enhance the collaborative work generated between startups or technological entrepreneurs and our traditional entrepreneurs, so as to create a virtuous circle of knowledge and business scaling.


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Fintech and Startups

Our commitment to entrepreneurship also translates into providing innovative solutions that make it easier for smaller companies to access thosetechnologiesthatmaketheirbusinessmoreefficientandproductive.

Thus, in this line of work our bank has implemented the following initiatives or digital tools, which are available through the Entrepreneurs Network Program or through the Small Business Digital Kit.

• Zoco: a web site that allows setting up a virtual store through the Mercado Libre web site, thus streamlining the promotion of products. It is part of the digital kit for small business with 2 months free of charge for BancoEstado customers since 2018.• Shipit: a web site that manages and optimizes the process of dispatching products. It is available since 2018 in the kit for small business with a service discount for BancoEstado customers.• Destácame: a web site that seeks to reward good payers, based on the business responsibility with their utility bills (power, water, phone, etc.). The vendor contracted withBancoEstadoin2018andbenefitscustomerswithadiscountinthedigitalkit.Theinitiative closed 49 loans with new micro enterprise business totaling $97 million.• Instacrops:acompanythatinstallsdevicesinagriculturalfieldsthatsendinformationthroughamobileapplicationthatusessophisticatedalgorithmstoforecastcropsinthefields.• Organizame:awebsitethathelpstomanagecashflowforsmallcompanies.• Vessi: an accounting management web site that eases the issuance of invoices.• Contable: a business accounting tool that automates and organizes the business’ monies, available through WhatsApp.• Listoco: a mobile application that seeks to provide professionals and micro entrepreneurs the opportunity to draw clients. It works through a collection service button (payment buttonandCajaVecina);also,itcreatesanewcollectionsbusinessmodelforeachuser,as a result of our campaign enrolling the business as a member of Listoco.

applications made1,116

2018 results of the small business digital kit

contracted369

effectiveness33%

is the value handed out to customers from these agreements

$37 millions

Other Startups we worked with in 2018

Climo:efficientandecologicalairconditioningservicethatimprovesthequalityoflife.Everything is controlled from a cell phone and with more convenient and economic plans than what the market offers. BancoEstado signed a contract in December 2018 and sales started in January 2019. There is a 20% discount in the service fee for BancoEstado customers.

Pasaje Bus: a web site application that compares and sells bus tickets for trips in and out of Chile, achieving reductions of up to 50% certain times of the year. Has a current contract with BancoEstado with an additional 10% discount on the purchase of tickets for its customers. Total sales have been $2,357,177 since the agreement started (January 6), totaling 206 tickets sold.

Ubank: a web site that allows people to save in a personal and fun manner. The app is currently undergoing a pilot with BancoEstado employees and soon will roll out to customers. The pilot results showed $18 million in savings, 192 active users, $96,044 average savings amount and the application being 99.9% available.

SupportforFintechandStartupcomesintwodimensions:

1) Entrepreneur account and credit line2)Incorporatethemaspartofthebank’snon-financialvalueoffer3) Contact through the bank with public and private organizations to support their scalability


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6.3.1 CreceMujer_

The CreceMujer Program is a corner stone of our action to promoteandfacilitateaccesstofinancialandnon-financialservices to micro and small business all along the country, contributing since 2015 to the growth of its businesses and its economic empowerment.

The initiative offers a wide range of opportunities for development, training and education that we carry out through alliances with institutions such as the Ministry of the Woman andGenderEquity,MujeresdelPacifico,ComunidadMujer,ONUMujeresandMujeresEmprendedoras, among others.

In addition, our web site offers assorted information and associative tools, where women can link with other entrepreneurs and generate collaborative networks to create and develop businesses.

Herewepresentthemainadvancesoftheprogramin2018:• 611,071 entrepreneurs’beneficiariesoftheprogramCreceMujerwitha71.6%growth

compared to the previous year.• The program ‘s web site registers more than 1.5 million visits where visitors may read

articles or watch videos on business management, employment, work improvement, leadership,financialeducation,technologyandlegal/taxmattersontopofcontentsaboutStatebenefitsandservices.

• By 2018, there were 254,310 women from the Micro and Small Business segments participating in this program.

6.3 Programs to support entrepreneurship _

It is very important for us to provide an effective support to the entrepreneurial force of thecountry,givenitsinfluenceon the economic development,

with special emphasis in female labor participation. Thus, during 2018 we continued our support programs for women, along with other initiatives and alliances that contribute to enhance a culture of entrepreneurship in the country.

2017294,090

2018171,357

During the implementation of the program between 2017 and 2018, we set up four fairs encouraging women commercial opportunities, whence supporting 112 entrepreneurs in these two years.

For more information, please visit www.crecemujer.cl


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6.3.2 Entrepreneur account_

Thisproductstartedin2013,aimingatfulfillingthedreamofentrepreneurswhocouldnot access a means of payment for a company incorporated as a legal entity according torequirementsofthetraditionalbanking,beingablethoughforexample,todepositavoucher or receive a deposit for a sale or a service rendered.

Fromthisinitiativetheseclientstodaycan:• Collect and deposit documents• Receive and make transfers from opening their business• Access information of your account via Internet, automatic query services, call center,

etc.• Access payments through RedCompra.

Amongthebenefitsprovidedbythisprogramwemaystate:• Avoid the physical transfer of cash from one place to another, minimizing the risks of

loss or theft, by using ATMs, electronic transfers and RedCompra.• Improvetheadministrationoffundsthroughbettercontrolofinflow/outflowwith

detailed dates and amounts

At the end of December 2018, there are 100,991 Entrepreneur Accounts with an available balance at the end of the month of MM$111,428.

The most important segments are crafts, manufacturing and services (57%) and trade (23%).

We have 100,705 total BEME clients with this product at the end of 2018.

6.3.3 Other support to entrepreneurship_

Another contribution to strengthen the participation of women in the job market is the empowerment of our collection means for the Women’s Work Bonus, which seeks to encourage the incorporation and permanence in the work of vulnerable women by aggregating their wages. In 2018, 306,873 women received the bonus, of which 26% received between $100 and $200 thousand pesos, 24% received between $200 and $400 thousand and 6% received $500 thousand pesos.


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For the ninth year in a row, in order to strengthen the role of women in the tourism sector, we awarded the Women Entrepreneur Tourism Award in collaboration with Sernatur and the Ministry of Women, to two micro and small tourism businesswomen who were distinguished due to their innovative initiatives in the products they offer.

The winners of this year are Ms. Lida Mardones Almonacid and Ms. Paulina Escobar Rojas, from the Aysén and Magallanes regions, respectively, who received $1.5 million and an audiovisual kit each to invest in their businesses.

Women Entrepreneur Tourism Award

In other lines fostering entrepreneurship, we highlight our Cuenta Emprendedor (Entrepreneur Account),anonsighaccountaimedatprofitandnon-profitlegalentitiesandnoseniorityor sales restrictions, whereby entrepreneurs can manage the money of their business and make purchases in a comfortable and safe way, without opening costs. Also, maintenance is free of charge in case they make no more than four draws in a month. In 2018, we registered a total of 100,991 open accounts, since 2013.

In line with our strategic guideline to support the Micro and Small Business segments to boost the country’s economic development, we created in 2018 thenewAgriculturalRiskManagementoffice,whosemainobjectiveistosecurethatthefundingofferedtoagriculturalbusinessfitstheneedsofeach trade of the agricultural businesses, streamlining their analysis and

providing timely answers.

Ourpermanentconcernforagricultureisreinforcedbyamanagementofficethatwillhavea special focus on the issues, reality and needs of this economic sector. In this manner, we will be ready to deliver a much more specialized service regarding funding their investments aswellasinsurance,sotheyhaveabettersupportonfinancialservicesaccordingtotheirbusiness strategy and risks.

BancoEstado created the new Agricultural Risk Management office

9th Contest Woman Entrepreneur Tourism


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7.Guarantee we are a trusted and safe bank_


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Material issue: Guarantee we are a trusted and safe bank

Relevance rationale

Itisatopmostconditiontohaveexcellentlevelsofoperationalcontinuityandmostrobustinformationsecurity systems to develop in optimal conditions our work in all areas and overcome the challenges we set ourselves.

Coverage The impact is generated in our clients of corporate banking, large business and institutional banking segments, as well as in the retail segment


Our management focused on procedures that secure the transactions of our clients and the operational continuity.Wehighlight:• Cybersecurity Plan• Implementations of Coquena, the second data center

Evaluation Keyfiguresattheendof2018:• Important transactions’ growth and strengthening of cybersecurity• 270 million transactions per month average, 37% growth• More than 60% digital with 55% growth in 2018• Significantinvestmentoncybersecurityandoperationalcontinuity

7.2 Cybersecurity and operational continuity_As part of our 2018-2022 strategic guidelines to guarantee we are a trusted and secure bank, investing on cybersecurity and operational continuity has been a very high priority during this2018.Specifically,wemadeprogressby establishing a Cybersecurity Master Plan that incorporates initiatives whose objective istomaintainconfidentialityandavailabilityof information.

In terms of operational continuity, we continue to work on improving our availability standards through the implementation of thesecondcertifieddatacenterscheduledfor deployment in the year 2020.

Important growth of transactions and strengthening of cybersecurity• On average, 270 million

transactions per month, 37% growth.

• More than 60% are digital, with 55% growth in 2018.

• Important investments in cybersecurity and operational continuity

The two major challenges we face are the security of information and data among our millions customers and given the size of our network and the level of coverage, we need toofferanexcellentlevelofoperationalcontinuity. In the upcoming years we will invest with special emphasis on improving the level of operational continuity, information security and technological support.

The number of processed transactions hasgrownsharplyasaresultoffinancialinclusion. In fact, the growing number of operations associated with the progressive rise in the number of clients of the bank hasdemandedanimportantexpansioninour service network, both face-to-face and automated channels.


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In 2018, BancoEstado averaged processing nearly 270 million transactions per month. Developments made in payment means has meant to strengthen the digitalization of numerous processes and the use of new technologiestoachieveamoreefficientmanagement practice and lower operational costs.

Operational continuity

• At BancoEstado we worry about having a technological service for our clients that is safe, robust and always available to our clients, so we started the implementation of a second data center that will have the latest technology, the highest standards and certificationsatinternationallevel,soafterits deployment, it will improve the continuity of the technological infrastructure that supports our systems and services. Both datacenters will have Constructed Facility TierIIIcertificationthattheUptimeInstitutegrants to ensure that the infrastructure is capabletoprovidefirstqualityserviceswithout interruption in the event of any contingency. Additionally, this implementation willmeanthatthebankwillhavetwofirstlevel self-contained datacenters, which implies that each of them can support the full operational load of our operation. This change also implies the necessary technological renovation and adjustment of infrastructure implementation processes, which should be redundant, as well as the design of technological applications that should operate in this scenario.

• In 2018 we made a number of tests to the bank’s technological contingency plan with the purpose of strengthening said plans and improve the training of teams that must always be prepared to face a real contingency. The result of these tests let to establish room for improvements that may be necessary to implement.

• The work team tested the operational contingency plans the entire year and across the entire branch network, simulating contingency situations and verifying that our staff is properly trained to face actual contingency situations.

Inthiscontext,standsoutthetransactionalloadcarriedoutbychannelssuchasCajaVecina,internet and mobile web that with the BancoEstado app process nearly 120 million transactions per month. These channels have been complemented by various technological applications for mobile phones and/or computers that increase the processing demands offinancialandadministrativetypeofoperations.

Strengthening cybersecurity

• At BancoEstado we have a Master Plan for Information Security and Cybersecurity that deals with the governance model in strategic, tactical and operational aspects, and also a number ofinitiativesleadingtomaintainandprotectconfidentiality,integrityandavailabilityoftheinformation. Most noticeable among them are issues such as identify and protect critical information assets, plans to renew the cybersecurity awareness, the design of a new regulatory frameworkforsecurity,definitionofguidelinesandgeneralactionstoreact/respondtoacyber-attack, integration of all the security platforms currently installed in BancoEstado, implementation of the new security guidelines for the SWIFT environment, incorporation of solutions to manage high privilege accounts, advanced solutions to protect workstations anddevices,newfiltersforincomingandoutgoinginformation,improvementstoaccessthenetwork, etc. The incorporation of new technologies will allow us to improve our protection mechanisms to timely prevent and detect threats that place the bank and our clients at risk, as well as tools and processes that allow us to recover in the shortest possible time after anincident,allthisledbyateamoffirstlevelandinconstanttraininganddevelopment.

• We improved our internal organization by adding more cybersecurity staffers and strengthening responsibleareastospecificallymanagecybersecurityrisks.

• We have established an internal and client-oriented education plan, whose objective is to disclose new emergent threats and prevent our clients from becoming a victim of these threats.

• Thinking about strengthening the security of the ATM network, the bank is renewing the network operating system and updating versions of the ATMs’ security software. Also, the bank is updating the protocol to protect the communication channels and the encryption technology between the ATM and the BancoEstado data center. Likewise, there is an effort underway to standardize access to authentication means in a security bus.

• The development of mobile applications has been based on state-of-the-art technologies, which considers the highest security standards for both the technological platform and their development models.


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8.Have a team motivated, prepared and dynamic_


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Material issue:

Relevance rationale

Wehavethedeepestcommitmentfromourworkerstocarryouteachoperationtheyareaskedtofulfilltheorganization’s goals. Therefore, it is our responsibility to work to strengthen the capabilities and leadership of our teams and offer sound opportunities for growing professionally within the institution in a horizontal dialogue,continuousandfluid.

Coverage The impact is on more than 10 thousand workers of BancoEstado and almost 5 thousand in our subsidiaries distributed across all regions of the country.


Stand out the initiatives to strengthen the dialogue with our workers integrate them participatively in the design of the strategy for the upcoming years along with strengthening the relationship with our union and the work environment performance evaluation.• BancoEstado meetings, to build the Roadmap 2018-2028.• Gender Parity Initiative (IPG).• Compliance of the Labor Agenda with the BancoEstado Union and closing of the Collective

Agreement period 2017-2018.• Branch Internship Program• Great Place to Work job environment survey

Evaluation Majorfiguresattheendof2018:

• TotalworkersatBancoEstadoandsubsidiaries:14,899• Totaltraininghours:morethan350thousand• Totaltrainedworkers:24.947• BancoEstadomeetings:635localmeetingsand36workshopsBuildingBancoEstado.• Totalinternships:72• ResultSurveyGreatPlacetoWork:83%satisfactionand/orcompliance.


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Our bank has the mission to contribute so that Chile is a more inclusive, equitable country with opportunities that reach everyone. To achieve that, it is essential to have a motivated team, prepared and dynamic, capable ofdeliveringaserviceofexcellencetomorethan13millioncustomersthroughout the national territory.

During 2018, the BancoEstado Corporation team, that is, the bank and its subsidiaries, reached 14,899 people. Among these, 10,094 work in BancoEstado and its territorial distributionisasfollows:

8.2 Headcount and profile of our team _BancoEstado 2019-2018 headcount

Región 2010 2011 2012 2013 2014 2015 2016 2017 2018

Arica y Parinacota 50 58 65 73 74 70 75 77 83

Tarapacá 110 96 96 97 99 96 100 94 101

Antofagasta 176 175 183 200 209 206 231 225 226

Atacama 114 109 116 122 113 114 126 128 129

Coquimbo 270 257 269 275 268 303 305 292 306

Valparaíso 673 673 682 685 739 700 716 717 717

Metropolitana 5,141 5,056 5,424 5,473 5,535 5,756 6036 6,324 6,029

O’Higgins 308 297 332 333 338 350 355 331 353

Maule 296 298 303 310 300 291 324 336 354

Biobío 626 637 648 643 641 682 686 684 704

La Araucanía 353 350 354 357 321 331 387 377 400

Los Ríos 126 122 121 125 175 169 177 207 182

Los Lagos 341 365 376 376 316 318 350 317 364

Aysén 65 58 59 54 59 71 65 73 60

Magallanes 90 80 85 82 90 81 86 80 86

TOTAL 8,739 8,631 9,113 9,205 9,277 9,538 10,019 10,262 10,094

Source: BancoEstado

Asfarasoursubsidiaries,their2018headcountisasfollows:

Corporación BancoEstado 2018

BancoEstado 10,094

BancoEstado Corredora de Bolsa 56

BancoEstado Microempresas S.A. 1,251

BancoEstado Administradora General de Fondos (AGF) 73

BancoEstado Corredora de Seguros S.A. 124

BancoEstado Centro de Servicios S.A. (ServiEstado) 1,594

BancoEstado CajaVecina 63

BancoEstado Cobranzas 701

BancoEstado Centro de Contacto 24horas S.A. 897

OficinaenNuevaYork 29

Red Global S.A. (Compraquí) 17

TOTAL CORPORATION HEADCOUNT 14,899


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Distribution of our staff according to age groups in 2018_

8+55+32+5+M7,6%

54,7%

32,1%

5,6%

In general terms, the seniority of our workers is above 11 years.

Nº of workers younger than 30 years old

Nº of workers between 30 and 45 years old

Nº of workers between 45 and 60 years old

Nº of workers older than 60 years old

Distribution of our staff according to seniority in 2018_

2+24+22+22+30+M1,3%

23,7%

22,3%22,6%

30,1%

Nº of workers with seniority less than 1 year

Nº of workers with seniority between 1 and 5 years



Nº of workers with seniority greater than 11 years

On the number of contract type, 9,881 workers are with permanent contract, which is equivalentto98%ofthestaff,whiletheremaining2%worksunderafixedtermcontract.The table below shows our staff according to the type of contract and gender in 2018.

Number of workers by contract type and gender in 2018

Contract type Permanent contract Fixed term contract

Gender Female Male Female Male

Number 4.811 5.070 103 110

Percentage 48.7 % 51.3 % 48.4 % 51.6 %

TOTAL 9,881 213

Headcount by gender_

Men

5,180Women

4,91451% 49%

Ontheotherhand,wehave857externalhelpersthatworkwithusinbranches.

From now on, all data herein consider BancoEstado headcount on closing 2018 as 10,094 workers.


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Procuringgenderbalanceatall layersoftheinstitution,includingtheexecutive,isasubject of great relevance for our bank. In this sense, we have continued to strengthen the program “Mentoring Woman and Leadership”, whose results leverage the increase in female representation in positions of higher responsibility, in addition to contribute to the development of our woman leaders. In the 2018 version, 10 agent women and 2 heads of central areas participated, while the mentoring role was carried out by 12 managers (men and women) thus forming 12 pairs.

Results of this project are lined up with the goal set forth in our People Management Policy of the bank that establishes as our objective that at least 40% of the workers of each estate represent each gender.

In the chart below you can see the evolution of positions of responsibility regarding the incorporation of women.

Position 2014 2015 2016 2017 2018

W M W M W M W M W M

Executives 21% 79% 24% 76% 27% 73% 27% 73% 27% 73%

Heads, agents and supervisors 34% 66% 35% 65% 36% 64% 37% 63% 37% 63%

Workers with no staff’s responsibilities 50% 50% 51% 49% 51% 49% 50% 50% 52% 48%

Likewise, we closed a cycle of 16 talks on gender sensibility that started in 2017, reaching 280 workers, aimed at thinking about those matters not yet visible to men as well as to women, which are a barrier for gender equilibrium in organizations.


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IPG-Chile thrust comes from the World Economic Forum (WEF) and the Inter-American Development Bank (IDB), a public-private platform, whose objective is to integrate more women into the economy and implement bestpracticestohelpclosegendergapswiththreekeyobjectives:increasefemale labor participation, close the wage gap and increase the presence

of women in high positions.

BancoEstado is one of the 100 pioneers to join the Gender Parity Initiative in Chile (IPG) initsfirstyearofoperation,whichgivesitaccesstoacommunityofknowledgetomoveforward on best practices and close the gender gap in our organization.

Thisinitiative,launchedin2016,generateditsfirstreportin2017andhashelpedustosetthreeobjectives:1.Increasefemalelaborparticipation:thesamethatcurrentlyrates13%abovethemarket.2.Closethewagegap:eventhoughwehaveacompensationsystemtiedtoposition,inthe

end it may have gaps due to the longer time women take to develop their career path. On this point, we are 13% better than the companies in the same category.

3. Increase the presence of women in senior positions (understood as directors, managers andassistantmanagers):inthispointwehaveachallengeforwhichwehavebeenworking, as we stand at 26% against the 32.4% national average from all companies.

We are currently generating a, action plan regarding this diagnosis.

Gender Parity Initiative

We were the first bank to sign the “Women’s Empowerment Principles” promoted by UN Women (Women Empowerment

Principles WEPs) in March 2017. With it, we made an alliance to participate as a pioneer entity on the implementation in Chile of the WEP’s Gender Gap Analysis Tool, a tool that allows making a diagnosis of the organization’s standing about the implementation of said principles. The tool was analyzed, completed and handed out to UN Women in the year 2018.

We are currently waiting for the diagnosis report that will allow us to have a complete look at the implementation areas of these principles and also have comparative information from over 170 companies worldwide. In this way, we will also set forth goals and indicators that let us to move forward in gender equality within the organization, a guideline we are committed to and have made progress with concrete proposals and fully aware that changes at the cultural level require systematic work over time.

WEP’S Gender Gap Analysis Tool

On the other hand, one of our fundamental principles is to form teams with a clear focus on social integration. Our Inclusion and Diversity Policy regulates our relationships on inclusionandletus,inturn,tofulfillLawNº21.015, which encourages the incorporation of people with disabilities in the world of work.

• 68 people, equivalent to 0.67% of our staff, are foreign collaborators. Most of them come from Peru, Venezuela and Argentina, among 15 other countries.

• 31 people, equivalent to 0.31% of our staff, are collaborators with some sort of disability.

2018 figures on hiring foreigners and people with disabilities


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8.3 BancoEstado meetings _

In the process of setting our strategic guidelines we wanted to establish bridges of dialogue with our workers to think in a collaborative manner thebankwewanttobefacingthenextdecade.Thus,wecreatedtheBancoEstado Meetings, a set of participatory broad, open and voluntary conversation, with the purpose of co-constructing the Roadmap of our

bank for the period 2018-2028.

Themeetingshadthreestages,asparticipativeinstances:the“EncuentrosLocales”(LocalMeetings)aimedatbranches,assistantmanagingofficesandclients;“TalleresconstruyendoBancoEstado”(WorkshopsbuildingBancoEstado)thatintegratetheExecutiveCommitteemembersandrepresentativesofworkersatthecentral,regionalandsubsidiaries’level;andfinallythe“EncuentroNacional”(NationalMeeting),carriedoutinJanuary2019withrepresentatives of all estates of BancoEstado Corporation throughout the country, where theExecutiveCommitteepresentedthenewmission,thedreamsandstrategiesthatwill

make up the Roadmap for 2018-2028.

The process convened workers from the bank and subsidiaries. We carried out 635 Local Meetings with the participation of 10,833 workers and 968 clients from all along Chile, from Putre to Porvenir. In turn, we carried out 36 workshops Building BancoEstado with theparticipationoftheExecutiveCommitteeandrepresentativesofthecentral,branchesand subsidiary areas.

635 meetings

Local Meetings(Branches or Assistant Managementoffices)

10,833 workers

968 clien

ts

36Workshops Building

BancoEstado(Regional, CEO or

subsidiary)

Representatives

of w

orke

rs

Exec

utive Committee

National MeetingRepresentatives from all Chile, branches, central areas and subsidiaries

1

Structure of the BancoEstado Meetings and Workshops_

To ensure participatory work in the meetings, we applied a methodology based on the followingquestions:

Local Meetings• What are the changes we see in this new

Chile?• How should BancoEstado be in this new

Chile?

Workshops Building BancoEstado• What do we want to maintain/preserve?• What do we not want to do?• What do we want to add/introduce?

Consequently, we are working on the systematization of the results and conclusions from these meetings to outline the 2018-2028 Roadmap that will guide our actions as an answer to the needs of a “new Chile” and what we want to be and do as the country’s public bank.

Among the longings that motivate us from heretothenext10years, isbeingthecompany most loved by people and the beststatebankintheworld;dreamsthat,given its size, we can only reach in a close collaboration with our teams and customers.


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8.4 Work relationships _

In our organization we try to establish and maintain balanced work relationships with workers and work teams, in collaboration with actors and interest groups,

fostering spaces for permanent, close and constructivedialogue,whichfirmlyallowmovingforward towards a better integration of quality of life and working life.

We have maintained a permanent and constructive dialogue with our workers byexecutingtheLaborAgendawiththeBancoEstado Union, where we discuss issues related to bipartite commissions, projects or initiatives of the various areas of the bank with impact on workers, seeking a continuous and fluidcommunication.

The labor agenda organizes its job in commissions, stipulated in the collective agreement, formed by union leaders as well asexecutivesrepresentingtheadministration.Therefore, the challenge is to consolidate the link and permanent dialogue between the union and the administration, as well as to continue with the adequate management of rights and duties that emanate from the Collective Agreement.

As far as our subsidiaries for the period that comprises this memory, we highlight the collective bargaining process of BancoEstado Corredores de Seguros, which successfully completed by signing in November 2018 the Collective Contract, thanks to the unanimous support of workers and union leaders.

Thisachievementmeantextendingbenefitsfor all workers of the subsidiary by way of agreements focused on topics that favor an even larger number of people, such as transport, lunch and wage adjustments. Also, it added parents aspartofthenursery’sbenefitandreinforcedsocialbenefitsrelatedtostudiesanddeaths.

Hereunder,weshowthemainfiguresaboutunionization at BancoEstado and its subsidiaries at the end of 2018.

Trade unions in the BancoEstado Corporation% of unionized workers % of non-unionized workers

98+2+M98,2%1,8%

BancoEstado National UnionTotal percentage of unionization:98.2%,which corresponds to 9,914 workers grouped in a national level union

Administradora General de Fondos (AGF)Pe rce n t a ge o f unionization:86%(1 union) 86+14+M86%

14%

44+56+M55,7%

Centro de Servicios (ServiEstado)Union 1Total percentage ofunionization:44.3%

Union 2Total percentage ofunionization:43.8% 40+60+M56,2%

46+54+M46%54%

Contacto 24 horas (Lota)Union 1Total percentage of unionization:46%

Union 2Total percentage of unionization:30% 30+70+M70%

59+41+M59%41%

Corredores de BolsaTotal percentage of unionization:59%(1 union)

Total percentage of unionization:95%(1 union) 95+5+M95%

5%

Corredores de Seguros

97+3+M97%3%

Microempresas Asesorias Financieras (BEME)

Total percentage of unionization:97%(1 union)

Total percentage of unionization:73%(1 union) 73+27+M73%

27%

Servicios de Cobranzas (BECO)

*Subsidiary Red Global (Compraquí) does not have unions

*Subsidiary Sociedad de Servicios Transaccionales (CajaVecina) does not have a union but a Labor Environment team composed by 11 people that voluntarily work for the well-being of workersandtheirmainobjectivesare:generateasenseofbelonging,balancebetweenworklifeand personal life, in addition to being a permanent communications link between workers and the subsidiary.

30%

44,3% 43,8%


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Internal communication means with our workers – 2018_

MiBE“Comunidad Mi BancoEstado” or “MiBE”, is one of the internal communication platforms of our workers who use it to inform themselves on labor issues or to participate in contests, games and discounts in shops. In2018,itreportedthefollowingresults:• Activeusers:6,800• TotalannualvisitstotheApp:432,272• Monthlyaverageofvisits:36,023• Peakmonthofvisits:September,with

50,436

Regarding reading news of our team in these internal media, in 2018 we recorded a strong growth with respect to 2017, namely of the order of 43.6%, strongly concentrated in the news through MiBE.

It also makes a tool for people management, where workers, through their cell phones, can request their leave of absence days, administrative days, vacations, check out their payrollpayments,getsenioritycertificatesand access to discount coupons for various activities that improve their quality of life, such as discounts at stores and pharmacies, tickets to movies, etc.

IntranetOur Intranet is the means of communication aimed at all workers of Corporación BancoEstado to deliver corporate information, such as commercial initiatives, internal policies and campaigns, as well as news in general. In2018,wereportedthefollowingresults:• Totalannualvisits:271.308• Monthlyaverageofvisits:22.609• Peakmonthofvisits:December,with

28,093

Adding both media averages 2,837 visits per day.

Finally, among the milestones of 2018, we highlight launching the “Program of listening to workers “, as a channel to know the positive aspects and critical situations that may be affecting workers, thus raise an alert voice to heads of the teams where said events occur.

8.5 Training and development _

At BancoEstado we seek to have prepared and motivated workers who can grow professionally in our space to join our efforts facing the strategic challenges that summons us for the upcoming years. Along with this, we worktodevelopateamofleadersthatexercisestheirrolebasedontheconfidenceontheirteams,excellenceandsocialsenseofourmission,for

which we have a wide range of training that allows acquiring or deepening skills, competence and strategic knowledge.

In this line, we highlight the more than 350 thousand hours of training lectured to workers incentralareasandthebranchnetwork,totaling$2,357millionbenefitingatotalof24,947 trained participants, understanding that a person could have received more than onespecificknowledge.

In particular, the matters dealt with how to strengthen sales management in branches, so as to successfully tackle the new integrated business model and prepare workers for technological changes and automation processes. Additionally, we continued with our internship program in branches, which in its 2018 versionitcovered72internshipswiththeparticipationof40executivesand32heads.Whentheparticipantshavereportedtheirexperience,theycoincidethatitisaprivilegedopportunity to have direct contact with the client’s world.

In terms of internal mobility, the objective was focused on offering possibilities of mobility and re-conversion to our workers, to contribute more directly to our business challenges. As a result, we registered 6,262 moves, in the form of internal competitions, promotions by merit, promotions, promotions for studies and transfers, among others. In total, 52% of the open positions were allocated to workers of the bank.

On a performance evaluation of our team, it is possible to argue that 97.68% of the registered workers were evaluated. Also, 97% made a self-evaluation.

Finally, at the end of 2018 we reached a 4.5% rotation rate, estimated as the number of leavings over the total number of workers.


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8.6 Working environment evaluation _

Wefeatureanexcellentworkingenvironmentforourteam,regardlessoftheirposition,gender,ageororigin.Themanybenefitsthatfosterthequality of personal and family life, access to training opportunities and professionaldevelopment,theexistenceofrespectandtrustamongco-workers is clear when 87% of our workers said “taking everything under

consideration, BancoEstado is a great place to work” in the annual survey the Great Place to Work Institute does.

In fact, our corporation scored 83% satisfaction and/or compliance in the work environment survey of Great Place to Work, which positions us among the 25 best companies to work in Chile in 2018, namely in 23th place. From this result, we have challenged ourselves to care for the working environment of our teams via management and monitoring plans in the different areas of the bank.

As far as our subsidiaries, the work environment survey shows some relevant differences. That is the case of BancoEstado Cobranzas (BECO) that achieved 90% positive responses, followed by BancoEstado Administradora General de de Fondos (AGF) with 89%, BancoEstado Corredores de Seguros, with 84% and CajaVecina, which ranks a few places below, with 78%.


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9.In line with our environment_


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Material issue: In tune with our environment

Relevance rationale

We state our commitment with sustainability by triple impact initiatives, not only in the economic and financialareabutalsointhesocialandenvironmental.Onthispoint,ithasbeenourprioritytodevelopsupport lines for culture, community and citizenship, together with improving the environmental impact of our offer and strengthen our role as an ally of the State in large-scale actions.

Coverage Theimpactfocusesonecologicalandsocialecosystems,includingmembersofthecivilsocietythatbenefitfrom our different programs and actions, such as artists, cultural mentors, public and communities at large located throughout the national territory.

Associated management

Highlights in our management the commitments already acquired for the promotion of the cultural and organizational development of citizens, as well as investments on alliances to improve our environmental impact.• Promotion of Chilean Cinema• Cuenta Crece Comunidad• Solidarity Donations Portal• Plan Impulso Araucanía• EcoVivienda Credit• Energy Saving Insurance Program• Huella Chile Program• Energy management to reduce consumption

Evaluation Mainfiguresattheendof2018:• PromotionofChileanCinema,totalnumberofcandidates:65• CuentaCreceCommunity:84,255activeclients.• SolidarityDonationsPortal:27registeredinstitutions,whichreceivedatotalof$5,807,714in

contributions.• EcoViviendaCredit:funded700eco-efficienthouses• Savingsinenergyconsumptionatcorporatebuilding:45%• Energymonitoringat48branchesand30officeswithphotovoltaicpanels


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9.2 Promoting the Chilean cinema _

In addition to the impact generated by our management through our products and services, our bank plays a fundamental role in the promotion of culture, associativity, community development, donation managementfornon-profitentitiesandthedevelopmentoffinancialproductsfocusedon reducing the environmental impact.

Within the framework of the country’s commitment to cultural development, it has been thirteen years since we actively participate in the promotion of national cinema, already surpassing the hundred featurefilmsanddocumentariesthathavereceived contributions from our institution.

Since 2015, this line of work has been consolidated in the Chilean Film Development Program, through the creation of a competitive fund that seeks to stimulate nationalfilmcreation,safeguardtheculturalheritage and preserve the collective memory of the country, through works that value theidentityofthecountryandthefilmicrepresentation of our recent history.

In 2018, the Chilean Film Development Program developed its 6th and 7th calls in the months of March and September, respectively.

6th call, March 2018:32filmsapplied

Winner of Cinema Industry with MM$50:“How do we do at home?” By Boris Quercia

Winners Author’s Cinema: each one MM$10• DryMartina,CheSandoval’sfiction• Late to die young, Dominga Sotomayor’s fiction

• The wondering soap opera, Raul Ruiz’s fiction

• The wolf’s house, Cristóbal Leon and Joaquin Cociña’s animation

• Lemebel, documentary by Joanna Reposi

7th call, September 2018:33 movies applied

Winner of Cinema Industry with MM$25: “Spider” by Andrés Wood

Winners Author’s Cinema: each one MM$8• Harley Queen, Carolina Adriazola and

Jose Luis Sepulveda’s documentary• The kings, documentary by Bettina Perut

and Ivan Osnovikoff• Zurita, see not see, Alejandra Carmona’s

documentary.

PlazaCineIn the same line, in January 2018, the PlazaCine activity was part of a number of outdoor presentations of most outstanding movies among the ones that participated in the program.

This initiative started at the end of 2016 as a way to massively spread the Bank’s support for Chilean cinema, bringing it closer to our clientswiththemostoutstandingfilms.In 2017 we presented in Santa Rosa de Apoquindo Park “Sin Filtro”, “Neruda” and “Historia de un Oso” in a two-day event, attended by almost 1,000 people.

The following year and looking for a more central location, we set an alliance with Parquemet to work in the Pablo Neruda Amphitheater of the park, an association that we maintained in 2018.

PlazaCine January 2018- On January 13, 14, 20 and 21 of January on

Parquemet’s Pablo Neruda Amphitheater.- More than 3 thousand people attended

those 4 days.- Short film “Story of a Bear” and the

movies” A Fantastic Woman” (actress DanielaVegapresentedthefilm),“Nothinghappened here”, “La Mentirita Blanca” and “Violeta”.


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9.3 Support to State initiatives _ As the only State own bank, we understand our role as a

moving force of public policies. Hence we have been designing anofferoffinancialproductswithacontributiontomitigateenvironmental impacts.

Eco-Vivienda(Eco-Housing)standsoutamongtheavailablefinancialofferings;it isthefirstproductofitskindinChilethatfundspurchasingnewhomes,anywhereinthecountry,aslongastheyholdanenergyefficiencygradehigherthantheonerequiredbythe Chilean standard (D or above).

The first mortgage product of Chile Eco-Vivienda of BancoEstado, gestated from an alliancewiththeGermanbankKfW,funded700eco-efficienthomesin2018,where80%correspondstohousingwithaStatehousingsubsidy,whichgeneratesanamplifiereffectdue to its social impact.

708Year 2018

1,034Accumulated

Additionallyandfocusedonmicroandsmallentrepreneurs,wearethefirstbanktospecializeonfundingenergyefficientprojectsandnon-conventionalrenewableenergies(ERNC). This as a result of an alliance with the Ministry of Energy and the Chilean Agency forEnergyEfficiency(ACHEE)whomprovidesupportwiththetechnicalanalysisoftheinitiatives allowing us to advise our clients and lower the current barriers, particularly on asymmetry of information. Thus, we closed 2018 with 43 projects funded.

Throughtheseinitiativeswehavetwofinancialproductswithecoenvironmentalcharacteristics:Eco-ViviendatofundtheenergyefficiencyhomeprojectsandERNCforsmallbusiness.

9.3.1 Greenfinancialoffer_


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9.3.2 Program Energy Saving Insurance_

At the end of 2018, we started a technical cooperation with the Inter-American Development Bank (IDB) and support of the Danish Government for the implementation in Chile through our bank of the “Energy Saving Insurance ESI” Program(insuranceofenergysavings);expectedresults

are scheduled for 2019 for an insurance product that minimizes the current uncertainties facedbysmallandmedium-sizedentrepreneurswheninvestingonenergyefficientprojectsintheirbusiness.Thisproductcomplementsthegreenfinancialofferthatwehave been promoting.

TheESImodelcomprisesfinancialandnon-financialmechanismsdesignedtoworktogetherandovercomebarrierssuchasthelackoftrustamongtheplayers,lackofexperienceornotmuchpriorityonenergyefficiencyinvestments,creatingtrustandcredibilityamongthe key actors and reducing the risk perceived by stakeholders. This program has already been implemented in several countries such as Colombia, Brazil, Peru,Salvador,Mexicoandothers.

BancoEstado support to Plan Impulso Araucania 2018-2026

In September 2018, the government launched the Plan Impulso Araucania, whose objective is to bring the region to a higher state of development and social security by way of eight years of sustained investment on public

infrastructureandroads,economicdevelopment,taxstructure,institutionalrecognitionofindigenous cultures, health and education, among others.

BancoEstado, as a partner institution of the State of Chile in the implementation of public policies, support from the outset this plan for the development of the region, promoting agricultural reconversion, the use of renewable energies and tourism through different funding plans. Also, we have set $5,200 million in a special credit line for victims of rural violence, with 30 approved cases to the date.


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9.3.3 Support to other State initiatives_

Payment Social Security Institute (Instituto Prevision Social, IPS)In 2018, (IPS), we were a fundamental part ofIPSpayments,whichexceeding9.1milliontransactions. These payments correspond particularly to pensions and other social benefits such as the permanent family contribution, school achievement bonus and the single family allowance, among others.

Payment of pensions (Capredena, Dipreca); more than 1.3 million payments were made to pensioners associated with the current pension payment agreement with the National Defense Pension Fund (CAPREDENA) and more than 790 thousand payments associated with the agreement with the Chilean Carabineros’ Pension Fund (DIPRECA). SENCE BonusesMore than 2.6 million payments corresponding to the State Subsidies programs “Bond for the Work of the Woman” and “Subsidy to the Young Employment”, that are paid through the National Service of Training and Employment (SENCE) for more than 137 thousand million pesos. The initiatives seek to support the incorporation and permanence ofwomenandyoungpeopleinthelaborfield.

Heating SubsidyBancoEstado paid the 2018 Heating Subsidy that the Solidarity and Social Investment Fund (FOSIS) of the Ministry of Social Development hands out. This initiative, driven by the government, started in 2012 with the name “Bono Leña” (Firewood Bond). We made availableourofficestothebeneficiariesintheAysencommunities;thisyear,wemademore than 27 thousand payments, whereof 72% were made by crediting their CuentaRUT accountexceeding$2,700million.

JUNAEB Scholarships We made more than 1.9 million payments corresponding to scholarships for more than $700thousandmillion.AllscholarshipsgrantedbytheJuntaNacionaldeAuxilioEscolaryBecas, Junaeb (National Board of School Aid and Scholarships) standing out the following scholarships:IndigenousofEducation,ProfessionalTechnicalPractice,SupporttotheSchoolRetention, Territorial Integration, President of the Republic, Indigenous Residence, Aysén, Magellan and the Chilean Antarctic, University of the Sea and Chaitén, among others.

Operacion Renta 2018 (Income Tax 2018 Operation)Duringtheyeartherewerenearly2.5milliontaxrefundoperationsmade,whichis6.6%above year 2017. Since 2007, through joint and coordinated work between BancoEstado, the General Treasury of the Republic and the Internal Revenue Service, we have practically eliminated issuing checks. In 2018, the bank managed 96% of the refunds by crediting these accounts;fromsaidtotal,55%wasinBancoEstadoaccounts.Ofthegeneraltotal,46%weredepositstoCuentaRUT.Withthesefigures,weconsolidateourselvesasthemainbankinwhichChileanssetanaccounttoreceivetheirtaxrefundintermsoftransactionsandamount.

Payment of property taxesThrough the service points of our CajaVecina network, we received a total of 33,298 property taxpaymentstoDecember,brokendownasfollowsthroughouttheyear:

Jan-18 feb-18 mar-18 apr-18 may-18 jun-18

1,046 463 519 5,739 3,558 3,752

jul-18 aug-18 sep-18 oct-18 nov-18 dec-18

2,568 1,165 4,126 3,826 4,218 2,318


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9.4 Community support _

In its purpose of supporting community development, our bank has developed a specificproductforcivilsocietyorganizations(OSC) called Cuenta Crece Comunidad (Grow Community Account) that allows non-profitorganizationstobankviaanonsight account specially designed for this type of institutions.

4.78%Growth over 2017

On active clients84,255

Total OSC clients (registered and active ones) at the end of 2018

Active clients (have made one transaction in the last two years)

9.4.1 Solidarity donations portal_

In 2017 we implemented the Solidarity Donation Portal on our website, where we seek to provide more formality to voluntary donations made to the different solidarity organizations in the country, thus contributing in this way to those who are part of this network.

Thisserviceallowsourcustomerstomakemoneytransferstodiversenon-profitorganizationsthat through their work support vulnerable sectors or under poverty conditions in areas of health, social services, environment, education and culture. Additionally, the platform isavailablefornationalcontingenciessuchas,forexample,naturalcatastrophes.

Thourgh of this web site, participant organizations may reach millions of our customers through a fast, safe and simple mechanism where, we contribute with our knowledge on transactionsandenhancedigitalchannels.Inaddition,theprojectcoversextendingtosmall organizations that do not have web sites to collect this kind of contributions. In this manner, we have made a transversal call for all solidarity organizations take part in our portal.

9.4.2 Sustainable purchases_

We believe that we can promote better social and environmental practices through our supply chain, acting as relevant players of change and development. For this, we have integrated in 200 calls for bid a social and environmental

criteria as part of the evaluation measures, which represent 100% of new purchases. This initiative seeks to secure our social environmental commitment driving our partners where the entire value chain is sustainable.

At the end of 2018, this tool had 27 institutions registered in the portal, which received a total of $5,807,714 contributions during the year.


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9.5 Environmental management _

9.5.1 Environmental impact_

We seek to contribute to the national g o a l s o n matters of

environment driving funding initiatives that positively impact the environment and society as a whole. With this objective in mind, we position ourselves as an important actor that moves the various sectors of the public and private world to develop projects that are friendly to the environment and contribute to the reduction of carbon emissions out of its funding.

9.5.2 Eco operational efficiency_Huella Chile programDuring 2018 we worked on the installation of capacities in the bank’s internal staff, with the support of the HuellaChile Program of the Ministry of the Environment. This program seeks the generation of knowledge and internal competences in greenhouse gases, climate change and especially in carbon footprint measurement.

This initiative allowed our bank to accurately measure its 2016 carbon footprint, which was verifiedbyanindependentthirdparty.Thankstothatinitiative,weearnedtheQuantificationSeal of the program HuellaChile.

In this way, we contributed to the commitments assumed by the State of Chile in the framework of the Paris Agreement, related to the implementation of a system for the measurement and reporting of greenhouse gases.

Energy managementAs part of the energy management practice completed in 2018, a number of projects have been carried out to reduce the consumption of electric power. One of the most important was the 100% change of the elevators’ technology in our corporate building and also at an adjacent building achieving a 45% reduction in consumption.

Also, we have changed air conditioning units for thelatest technology generation, such as inverter equipment and central air conditioning systems of multi-split type of Variable Coolant Volume (VRV). We settled for this equipment for its reduction in energy consumption and for the lower generation of emissions to the atmosphere, keeping in this manner the comfort of our workers without implying higher operational costs and environmental impacts. Likewise, we maintain monitoring the energy consumption of 48 branchesand30officeswithphotovoltaicpanels.

Finally, it is worth mentioning that courtesy ofourextendedcoverageofourdigitalchannels such as ATMs, web transactions andpointsofsale,trafficloadexceeded252million transactions per month, turning into 45% of the transactions of the national financialsystem,thushelpingtoreducephysical displacements of our customers and favoring a reduction in the carbon footprint.

Monitoring and control of the use of energy use on peak hours, air conditioning control.

• 2% of reduction in the intensity of energy use overyear2017inoffices.

• High standards in lighting projects, with priority on LED technology.

• Change in technology in almost 100% of theelevatorsintheHeadOfficebuilding(Alameda 1111) and Bandera 60 building, which represents nearly 45% of the savings in energy consumption.

• Technological renewal of the air conditioning system to VRV technology since 2017, at branchessuchasBrasil,Molina,HeadOffice,Bandera 60 among others.


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10.Consolidated financial statements_


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Report of independent auditorsTo the chairman and directors of Banco del Estado de Chile

WehavecompletedanaudittotheattachedconsolidatedfinancialstatementsofBancodelEstadodeChileandsubsidiaries (henceforth “the Bank”) that comprise the consolidated balance sheet as of December 31, 2018 and 2017 andthecorrespondingconsolidatedoperatingstatements,incomestatement,changesinequityandcashflowsfortheperiodsendinginthosedatesandthecorrespondingnotestotheconsolidatedfinancialstatements.

Management responsibility for the administration of the consolidated financial statementsTheAdministrationisresponsibleforthereasonablepreparationandpresentationoftheseconsolidatedfinancialstatements in accordance with the Accounting Standards and Instructions issued by the Superintendency of Banks and Financial Institutions. This responsibility includes the design, implementation and maintenance of a relevant internalcontroltoreasonablyprepareandpresenttheconsolidatedfinancialstatements,forthemtobeexemptfromsignificantincorrectrepresentations,eitherduetofraudorerror.

Auditor’s responsibilityOurresponsibilityconsistsonstatinganopinionabouttheseconsolidatedfinancialstatementsbasedonouraudits.We prepare our audits in accordance with audit standards generally accepted in Chile. Said standards require we plan andcompleteourworkinordertoachieveareasonablelevelofcertaintythattheconsolidatedfinancialstatementsareexemptofsignificantincorrectrepresentations.

An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the consolidated financialstatements.Theselectedproceduresdependontheauditor’sjudgment,includingtheevaluationoftherisksofsignificantincorrectrepresentationsoftheconsolidatedfinancialstatementseitherduetofraudorerror.Inmaking these risk assessments the auditor considers the relevant internal control for the reasonable preparation and presentationoftheBank’sconsolidatedfinancialstatementsbutexcludesthepurposeofstatinganopinionontheeffectiveness of the Bank’s internal control. Consequently, we do not state such an opinion. An audit also includes evaluatingtheappropriatenessoftheaccountingpoliciesusedandthereasonablenessofthesignificantaccountingestimates made by the Administration, as well as an evaluation of the general presentation of the consolidated financialstatements.

Opinion Inouropinion,theconsolidatedfinancialstatementsmentionedinthefirstparagraphreasonablypresent, inallsignificantparts,thefinancialsituationofBancodelEstadodeChileandsubsidiariesonDecember31,2018and2017,theresultsoftheiroperationsandcashflowsfortheperiodsendedinthosedatesaccordingtotheAccountingStandards issued by the Superintendence of Banks and Financial Institutions.

DeloitteFebruary 26, 2019Santiago, Chile

Tomás Castro G.Partner


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Consolidated Statements of Financial Position 12/31/2018 MCh$

12/31/2017MCh$

ASSETS

Cash and due from banks 4.354.391 4.781.085

Transactions in the course of collection 369.632 186.484

Financial assets held for trading 2.192.921 2.311.304

Repurchase agreements and securities loans 337.027 323.000

Financial derivative contracts 808.201 675.191

Loans and advances to banks,net 628.908 607.882

Loans and accounts receivable from customers, net 23.240.012 21.848.261

Financial investments available for sale 6.008.764 5.200.635

Financial investments held to maturity 21.162 25.041

Investments in associates 16.174 13.882

Intangible assets 198.308 167.984

Property, plant and equipment 385.285 365.031

Currenttaxes 4.271 2.788

Deferredtaxes 850.689 819.205

Other assets 805.784 562.463TOTAL ASSETS 40.221.529 37.890.236

LIABILITIES

Current accounts and other demand deposits 9.539.516 9.024.024

Transactions in the course of payment 352.913 101.578

Repurchase agreements and securities loans 820.849 592.523

Time deposits and savings account 17.148.269 17.009.129

Financial derivative contracts 762.955 734.677

Obligations with banks 1.307.903 1.409.545

Debt instruments issued 7.231.410 6.166.010

Otherfinancialobligations 17.297 28.825

Currenttaxes 43.570 142.468

Deferredtaxes 26 29

Provisions 774.729 689.743

Other liabilities 508.508 337.228TOTAL LIABILITIES 38.507.945 36.235.779

EQUITY

Attributabletoequityholdersofthebank:

Issued capital 574.632 574.632

Reserves 1.075.885 1.015.631

Valuation accounts -29.302 -4.889

Retainedearnings:

Net income for the year 165.951 120.501

Less:Provisionfordistributionofincometothebenefitofthestate -82.976 -60.250

Total attributable to equity holders of the bank 1.704.190 1.645.625

Non-controlling interest 9.394 8.832TOTAL EQUITY 1.713.584 1.654.457

TOTAL LIABILITIES AND EQUITY 40.221.529 37.890.236

Banco del Estado de Chile and SubsidiariesConsolidated Statements of Financial PositionFor the years ended December 31, 2018 and 2017 (In millions of Chilean Pesos - MCh$) _


124_

Consolidated Statements of Income 12/31/2018 MCh$

12/31/2017MCh$

Interest income 1.925.315 1.650.145

Interestexpense ( 931.363 ) ( 763.832 )

Net interest income 993.952 886.313

Fees and commission income 473.507 403.313

Feesandcommissionexpense ( 167.630 ) ( 142.997 )

Net fee and commission income 305.877 260.316

Netincomefromfinancialoperations 115.519 155.499

Netforeignexchangegain(loss) 20.671 ( 34.937 )

Other operating income 18.964 9.025

Total operating income 1.454.983 1.276.216

Provision for loan losses ( 232.047 ) ( 185.849 )

OPERATING INCOME, NET 1.222.936 1.090.367

Personnelsalariesandexpenses ( 436.969 ) ( 420.065 )

Administrativeexpenses ( 276.615 ) ( 279.880 )

Depreciation and amortization ( 106.550 ) ( 81.542 )

Impairment - -

Otheroperatingexpenses ( 49.290 ) ( 34.335 )

Total operating expenses ( 869.424 ) ( 815.822 )

NET OPERATING INCOME 353.512 274.545

Income from investments in associates 2.509 2.069

Income before income taxes 356.021 276.614

Incometaxexpense ( 176.684 ) ( 144.117 )

NET INCOME FOR THE YEAR 179.337 132.497

Attributableto:

Equity holders of the bank 165.951 120.501

Non-controlling interest 13.386 11.996

179.337 132.497

Banco del Estado de Chile and SubsidiariesConsolidated Statements of Income For the years ended December 31, 2018 and 2017(In millions of Chilean Pesos - MCh$) _


125_

Consolidated Statements of Comprehensive Income12/31/2018

MCh$12/31/2017

MCh$

NET INCOME FOR THE YEAR 179.337 132.497

OTHER COMPREHENSIVE INCOME (LOSS) THAT MAY BERECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS

Marktomarketadjustmentsonavailable-for-salefinancialassets 907 ( 7.513 )

Exchangedifferencesontranslationforeignoperations ( 256 ) ( 174 )

Marktomarketadjustmentsoncashflowhedginginstruments ( 69.914 ) 3.231

Subtotal – other comprehensive income (loss) which may be reclassified to profit or loss

( 69.263 ) ( 4.456 )

Incometaxrelatingtoothercomprehensiveincomethatmaybereclassifiedprofitorloss

44.850 2.297

Total other comprehensive income (loss) that may be reclassified to profit or loss ( 24.413 ) ( 2.159 )

OTHER COMPREHENSIVE INCOME (LOSS) THAT WILL NOT BERECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS

Transfertoreservesfinancialinstrumentsavailableforsale - 1.286

Actuarialresultsonemployeebenefitplan 12 ( 3.936 )

Subtotal - other comprehensive (loss) income which will not be reclassified to profit or loss

12 ( 2.650 )

Incometaxeffectrelatingtoothercomprehensiveincomewhichwillnotbereclassifiedtoprofitorloss

( 8 ) 2.439

Total other comprehensive (loss) income which will not be reclassified to profit or loss 4 ( 211 )

TOTAL OTHER COMPREHENSIVE LOSS ( 24.409 ) ( 2.370 )

CONSOLIDATED COMPREHENSIVE INCOME FOR THE YEAR 154.928 130.127

Attributableto:

Equity holders of the bank 141.542 118.131

Non-controlling interest 13.386 11.996

154.928 130.127

Banco del Estado de Chile and SubsidiariesConsolidated Statements of Comprehensive Income For the years ended December 31, 2018 and 2017 (In millions of Chilean Pesos - MCh$)_


126_

Banco del Estado de Chile and SubsidiariesConsolidated Statements of Changes in Equity For the years ended December 31, 2018 and 2017(In millions of Chilean Pesos - MCh$) _

Consolidated Statements of Changes in Equity

Issuedcapital

Reserves Valuation accountsIncomefor the

year

Provision fordistribution of

net incomefor the year

Totalattributable

to equityholders of

the bank

Non controlling

interest

Totalequity

Otherreserves not

derivedfrom profits

Reservesderived

from profits

Financialinvestmentsavailable for

sale

Cash flowhedge

Exchangedifferences on

translation foreign operation

Incometax

effect

MM$ MM$ MM$ MM$ MM$ MM$ MM$ MM$ MM$ MM$ MM$ MM$

Opening equity as of January 1, 2017 574.632 ( 1.954 ) 944.251 8.049 ( 14.595 ) ( 981 ) 4.797 147.090 ( 95.879 ) 1.565.410 7.451 1.572.861

Transfers - - 147.090 - - - - ( 147.090 ) - - - -

Dividends paid - - ( 73.545 ) - - - - - - ( 73.545 ) ( 4.885 ) ( 78.430 )

Capital contribution - - - - - - - - - - 954 954

Mark to market adjustments on available-for-salefinancialassets

- - - ( 7.513 ) - - 4.224 - - ( 3.289 ) - ( 3.289 )

Variation in equity of subsidiaries - 1.286 - - - - - - - 1.286 - 1.286

Marktomarketadjustmentsoncashflowhedging instruments

- - - - 3.231 - ( 1.927 ) - - 1.304 - 1.304

Exchangedifferenceontranslationforeignoperation

- - - - - ( 174 ) - - - ( 174 ) - ( 174 )

Actuariallossonemployeebenefitplan - ( 1.497 ) - - - - - - - ( 1.497 ) ( 1 ) ( 1.498 )

Provision for mandatory dividends - - - - - - - - 35.629 35.629 ( 6.683 ) 28.946

Net income for the year - - - - - - - 120.501 - 120.501 11.996 132.497

Equity as of 12/31/2017 MCh$ 574.632 ( 2.165 ) 1.017.796 536 ( 11.364 ) ( 1.155 ) 7.094 120.501 ( 60.250 ) 1.645.625 8.832 1.654.457

Opening equity as of January 1, 2018 574.632 ( 2.165 ) 1.017.796 536 ( 11.364 ) ( 1.155 ) 7.094 120.501 ( 60.250 ) 1.645.625 8.832 1.654.457

Transfers - - 120.501 - - - - ( 120.501 ) - - - -

Dividends paid - - ( 60.251 ) - - - - - - ( 60.251 ) ( 5.391 ) ( 65.642 )


- - - 907 - - ( 594 ) - - 313 - 313


- - - - ( 69.914 ) - 45.444 - - ( 24.470 ) - ( 24.470 )


- - - - - ( 256 ) - - - ( 256 ) - ( 256 )

Actuariallossonemployeebenefitplan - 4 - - - - - - - 4 ( 6 ) ( 2 )

Provision for mandatory dividends - - - - - - - - ( 22.726 ) ( 22.726 ) ( 7.427 ) ( 30.153 )


Equity as of 12/31/2018 MCh$ 574.632 ( 2.161 ) 1.078.046 1.443 ( 81.278 ) ( 1.411 ) 51.944 165.951 ( 82.976 ) 1.704.190 9.394 1.713.584


127_

Consolidated Statements of Changes in Equity

Issuedcapital

Reserves Valuation accountsIncomefor the

year

Provision fordistribution of

net incomefor the year

Totalattributable

to equityholders of

the bank

Non controlling

interest

Totalequity

Otherreserves not

derivedfrom profits

Reservesderived

from profits

Financialinvestmentsavailable for

sale

Cash flowhedge

Exchangedifferences on

translation foreign operation

Incometax

effect

MM$ MM$ MM$ MM$ MM$ MM$ MM$ MM$ MM$ MM$ MM$ MM$

Opening equity as of January 1, 2017 574.632 ( 1.954 ) 944.251 8.049 ( 14.595 ) ( 981 ) 4.797 147.090 ( 95.879 ) 1.565.410 7.451 1.572.861

Transfers - - 147.090 - - - - ( 147.090 ) - - - -

Dividends paid - - ( 73.545 ) - - - - - - ( 73.545 ) ( 4.885 ) ( 78.430 )

Capital contribution - - - - - - - - - - 954 954


- - - ( 7.513 ) - - 4.224 - - ( 3.289 ) - ( 3.289 )

Variation in equity of subsidiaries - 1.286 - - - - - - - 1.286 - 1.286


- - - - 3.231 - ( 1.927 ) - - 1.304 - 1.304


- - - - - ( 174 ) - - - ( 174 ) - ( 174 )

Actuariallossonemployeebenefitplan - ( 1.497 ) - - - - - - - ( 1.497 ) ( 1 ) ( 1.498 )

Provision for mandatory dividends - - - - - - - - 35.629 35.629 ( 6.683 ) 28.946


Equity as of 12/31/2017 MCh$ 574.632 ( 2.165 ) 1.017.796 536 ( 11.364 ) ( 1.155 ) 7.094 120.501 ( 60.250 ) 1.645.625 8.832 1.654.457

Opening equity as of January 1, 2018 574.632 ( 2.165 ) 1.017.796 536 ( 11.364 ) ( 1.155 ) 7.094 120.501 ( 60.250 ) 1.645.625 8.832 1.654.457

Transfers - - 120.501 - - - - ( 120.501 ) - - - -

Dividends paid - - ( 60.251 ) - - - - - - ( 60.251 ) ( 5.391 ) ( 65.642 )


- - - 907 - - ( 594 ) - - 313 - 313


- - - - ( 69.914 ) - 45.444 - - ( 24.470 ) - ( 24.470 )


- - - - - ( 256 ) - - - ( 256 ) - ( 256 )

Actuariallossonemployeebenefitplan - 4 - - - - - - - 4 ( 6 ) ( 2 )

Provision for mandatory dividends - - - - - - - - ( 22.726 ) ( 22.726 ) ( 7.427 ) ( 30.153 )


Equity as of 12/31/2018 MCh$ 574.632 ( 2.161 ) 1.078.046 1.443 ( 81.278 ) ( 1.411 ) 51.944 165.951 ( 82.976 ) 1.704.190 9.394 1.713.584


128_

31.12.2018MM$

31.12.2017MM$

CASH FLOWS USED IN OPERATING ACTIVITIES:

Net income for the year 179.337 132.497

Charges (credits) to income that do not represent cash flows:

Depreciation and amortization 106.550 81.542

Provision for loan losses 300.744 250.549

Marktomarketoffinancialassetsheld-for-trading ( 242.688 ) 142.159

Income from investment in associates ( 2.509 ) ( 2.069 )

Net gain on sale for assets received in lieu of payment ( 3.093 ) ( 2.067 )

Net gain on sale of property, plant and equipment ( 528 ) ( 21 )

Write-off of assets received in lieu of payment 2.258 1.798

Other charges to income that do not represent cash movements 202.741 214.016

Accruedinterestandinflationindexationincome ( 114.312 ) ( 149.067 )

Changes in assets and liabilities affecting operating cash flows:

Decrease of trading instruments 635.705 829.366

Increase in loan portfolio ( 1.623.798 ) ( 1.915.616 )

Increaseinheld-to-maturityandavailable-for-salefinancialinvestments ( 804.250 ) ( 1.084.489 )

Increase in other credit transactions ( 21.026 ) ( 37.076 )

Increase in current accounts 13.553 810.739

Increase of deposits and fundraising 448.895 1.820.456

Increase in other demand and time liabilities 192.184 90.326

Increase (decrease) of other obligations through brokerage of documents 228.326 ( 17.094 )

Decrease of obligations in letters of credit ( 71.833 ) ( 122.577 )

(Decrease) increase of loans obtained from local banks ( 964 ) 2.864

(Decrease) increase of loans obtained from foreign banks ( 100.678 ) 326.902

Increase (decrease) of other assets and liabilities 8.264 ( 480.332 )

Net cash flows (used) provided in operating activities ( 667.122 ) 892.806

CASH FLOWS USED IN INVESTING ACTIVITIES:

Purchase of property, plant and equipment and intangible assets ( 159.662 ) ( 142.491 )

Sale of property, plant and equipment and intangible assets 18 25

Purchases of investments in associates ( 2 ) ( 8.672 )

Dividends received from investments in companies 339 477

Sale of assets received in lieu of payment 4.404 3.593

Net cash flow used in investing activities ( 154.903 ) ( 147.068 )

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:

Issue of bonds 1.244.289 1.120.148

Repayment of bonds ( 469.306 ) ( 869.775 )

Paymentofmandatorydividendsinbenefitofthestate ( 60.251 ) ( 73.545 )Payment of mandatory dividends of non-controlling interest ( 12.073 ) ( 10.613 )

Net cash flows provided by financing activities 702.659 166.215

NET VARIATION FOR THE YEAR OF CASH AND CASH EQUIVALENTS ( 119.366 ) 911.953 Effect of exchange rate changes on the balance of cash held in foreign currencies 17.878 581

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF YEAR 6.936.342 6.023.808

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 6.834.854 6.936.342

Banco del Estado de Chile and SubsidiariesConsolidated Statements of Cash Flows Por los ejercicios terminados el 31 de diciembre de 2018 y 2017 (In millions of Chilean Pesos - MCh$) _


129_

Annex_


130_

A.1. Table of Indicators_

CODE Indicators Section/ Heading Page

BE1 Total retail clients 3.3 Retail client management 52

BE2 Total business clients 3.3 Retail client management 52

BE3 Total institutional clients 3.3 Retail client management 52

BE4 Total CuentaRUT clients 4.2. Formats adapted to customers’ life 64

BE5 New CuentaRUT accounts 4.2. Formats adapted to customers’ life 64

BE6 Service network map 4.3.1. Branch network 67

BE7 Total de sucursales 4.3.1. Red de sucursales 67

BE8 Subtotal and % of “mini-branch” type branch 4.3.1. Branch network 67

BE9 New branch openings 4.3.1. Branch network 67

BE10 Number and % of only bank branch 4.3.1. Branch network 67

BE11 Total CajaVecina (CV) 4.3.2. CajaVecina 69

BE12 New CV openings 4.3.2. CajaVecina 69

BE13 Total CV branches other format (boat, hut, muni, etc.) 4.3.2. CajaVecina 69

BE14 Total transactions at CV 4.3.2. CajaVecina 69

BE15 Total ServiEstado branches (SE) 4.3.3. ServiEstado 70

BE16 New SE openings 4.3.3. ServiEstado 70

BE17 Total transactions at SE 4.3.3. ServiEstado 70

BE18 Total shops and stores with Compraquí 4.5. Acquisition network - Compraquí 74

BE19 Subtotal (number and %) of single owner business 4.5. Acquisition network - Compraquí 74

BE20 Subtotal (number and %) of BancoEstado clients with system 4.5. Acquisition network - Compraquí 74

BE21 Total CV with Compraquí 4.5. Acquisition network - Compraquí 74

BE22 Total number of automatic teller machines (ATM) 4.3.1. Branch network 67

BE23 Retail client global satisfaction level 3.4. Customer satisfaction 56

BE24 NPSindexforBancoEstado 3.4.1.Managingtheclient’sexperience 57

BE25 Subsidiaries’ satisfaction level – BancoEstado Microempresas (BEME) 3.4.1.Managingtheclient’sexperience 59

BE26 Subsidiaries’ satisfaction level – ServiEstado 3.4.1.Managingtheclient’sexperience 59

BE27 Subsidiaries’ satisfaction level –Cobranzas (BECO) 3.4.1.Managingtheclient’sexperience 59

BE28 Subsidiaries’ satisfaction level –Corredores de Bolsa 3.4.1.Managingtheclient’sexperience 59

BE29 Subsidiaries’ satisfaction level –Corredores de Seguros 3.4.1.Managingtheclient’sexperience 59

BE30 Subsidiaries’ satisfaction level –Contacto Lota 3.4.1.Managingtheclient’sexperience 59

BE31 Subsidiaries’ satisfaction level –Administradora General de Fondos 3.4.1.Managingtheclient’sexperience 59

BE32 Total digital clients 4.4. Digital presence 70

BE33 Total accesses to bank via web 4.4. Digital presence 70

BE34 Total accesses to bank via mobile app 4.4. Digital presence 70

BE35 Total and % of automated transactions 4.4. Digital presence 70

BE36 Total number of totems 4.4. Digital presence 72

BE37 Total number of queries responded by totems 4.4. Digital presence 72


131_


BE38 Total number of not-in-person transactions 4.4. Digital presence 72

BE39 Total number of followers on social networks 4.4.1. Our social networks 73

BE40 Results of Todosuma (people, amounts traded, etc.) 3.3. Retail client management 54

BE41 Information about Pago click initiative 3.3. Retail client management 55

BE42 Number and % of all accessible branches 4.2. Formats adapted to customers’ life 65

BE43 Description of universal service initiatives 4.2. Formats adapted to customers’ life 65

BE44 Total services in creole and mapudungún (in-person and remote by

phone)

4.2. Formats adapted to customers’ life 65

BE45 Data on mortgages 5.2. Savings as a development engine 82

BE46 Data on opening savings accounts 5.2. Savings as a development engine 79

BE47 Total number of savings accounts 5.2. Savings as a development engine 79

BE48 Data and description of savings campaigns in social networks 5.2. Savings as a development engine 78

BE49 Data on APV (total clients with APV and total amounts) 5.2. Savings as a development engine 80

BE50 Total insurance sales 5.2. Savings as a development engine 81

BE51 Total number of Financial Education programs 5.3. Financial education to promote savings 84

BE52 Total followers on “En fácil y en Chileno) Fb and Tw. 5.3.2. Program “En fácil y en chileno” 86

BE53 Total web visits 5.3.2. Program “En fácil y en chileno” 86

BE54 Total participating schools in “Usa bien tu plata” (broken down by

regions)

5.3.1. Program “Usa bien tu Plata” 84

BE55 Total number of participating students in talks 5.3.1. Program “Usa bien tu Plata” 84

BE56 Total number of participating teachers in talks 5.3.1. Program “Usa bien tu Plata” 84

BE57 Overall total number of students and schools 5.3.1. Program “Usa bien tu Plata” 84

BE58 Awards to journalistic quality 5.3.4. Other financial education programs 87

BE59 Total partners in program Crece Mujer Emprendedora (CME) 6.3.1. CreceMujer 96

BE60 Growth of the CME program 6.3.1. CreceMujer 96

BE61 Total women clients in BEME 6.2.1. Microempresas 90

BE62 Data on visits to CME web site 6.3.1. CreceMujer 96

BE63 Data on CME training 6.3.1. CreceMujer 96

BE64 Participation at CME fairs 6.3.1. CreceMujer 96

BE65 Data on Cuenta Emprendedor 6.3.2. Cuenta Emprendedor 97

BE66 Alliance with Fintech 6.2.3. Midsize business 93

BE67 Agreement between BID for EE and small business 9.3.2. Program Energy Saving Insurance 114

BE68 Results by segment (micro, small, midsize) 6.2. Corporate and Institutional management 89

BE69 Deliver Entrepreneur Award 6.2.2. Small business 91

BE70 Startups 6.2.3. Midsize business 93

BE71 Returns 3.1.4. Global Results of BancoEstado Corporation 42

BE72 Efficiency 3.1.4. Global Results of BancoEstado Corporation 43

BE73 Growth in loans (totals and distribution) 3.1.4. Global Results of BancoEstado Corporation 39

BE74 Incomebeforeandaftertax 3.1.4. Global Results of BancoEstado Corporation 41

BE75 Payments to the Treasure 3.1.4. Global Results of BancoEstado Corporation 46

BE76 Market share 3.1.4. Global Results of BancoEstado Corporation 45

BE77 Results retail clients (checking acct, credit card, e-checkbook,

consumer loans, college loans)

3.3. Retail client management 52


132_


BE78 Alliances and agreements 2.4.2. International agreements and alliances 32

BE79 Training on ethic and probity (free competition, money laundering, ethic and compliance,internalandexternalfraud)

2.3.2. Ethics and integrity management 29

BE80 Numberofsexualandlaborharassmentcomplaints 2.3.2. Ethics and integrity management 29

BE81 Total number of accusations 2.3.2. Ethics and integrity management 29

BE82 Most frequent accusation 2.3.2. Ethics and integrity management 29

BE83 Total incidents related to cybersecurity 7.2. Cybersecurity and operational continuity 98

BE84 Progress on cybersecurity 7.2. Cybersecurity and operational continuity 98

BE85 Data on program Mentorias Mujer y Liderazgo (Mentoring Women and Leadership) 8.2. Staff and team profile 104

BE86 Total talks on sensibility program 8.2. Staff and team profile 104

BE87 Total number of workers from vulnerable groups (migrants and PcD) 8.2. Staff and team profile

BE88 Staff (Corporation and subsidiaries) breakdown by position, gender, citizenship, age, seniority

Annex2 102

BE89 Total training hours 8.5. Training and development 108

BE90 Total amount invested on training 8.5. Training and development 108

BE91 Total workers trained 8.5. Training and development 108

BE92 Internal changes (data and % of open positions filled by BE workers) 8.5. Training and development 108

BE93 Job performance evaluation (staff subject to evaluation) 8.5. Training and development 108

BE94 Results of GPTW survey on work environment (Corporate) 8.6. Work environment survey 109

BE95 Data and % union workers (Corporate) 8.4. Labor Relations 107

BE96 Data and union % (subsidiaries) – BancoEstado Microempresas 8.4. Labor Relations 107

BE97 Data and union % (subsidiaries) – BancoEstado ServiEstado 8.4. Labor Relations 107

BE98 Data and union % (subsidiaries) – BancoEstado Cobranzas 8.4. Labor Relations 107

BE99 Data and union % (subsidiaries) – BancoEstado Corredores de Bolsa 8.4. Labor Relations 107

BE100 Data and union % (subsidiaries) – BancoEstado Corredores de Seguros 8.4. Labor Relations 107

BE101 Data and union % (subsidiaries) – BancoEstado Contacto Lota 8.4. Labor Relations 107

BE102 Data and union % (subsidiaries) – BancoEstado Administradora General de Fondos 8.4. Labor Relations 107

BE103 Channel visits (MiBe, Mi Blog, TV, Intranet) Internal communications media with BE workers - 2018

108

BE104 Total green financial products (retail and business) 9.3. Supporting State initiatives 111

BE105 Total green financial products sold 9.3. Supporting State initiatives 111

BE106 Total homes funded with Energy Efficiency 9.3. Supporting State initiatives 111

BE107 Total branches with EE (Energy Efficiency) tools (solar panels, LED lighting) 9.5.2 Operational Eco-efficiency 117

BE108 Total branches with energy monitoring plan 9.5.2. Operational Eco-efficiency 117

BE109 Total OSC (civil organization) clients (registered and active) 9.4. Community support 116

BE110 OSC clients’ growth 9.4. Community support 116

BE111 Total institutions registered in donations portal 9.4.1. Portal of solidarity donations 116

BE112 Total accumulated in donations portal 9.4.1. Portal of solidarity donations 116

BE113 State bonds for emergencies 9.3.3. Support to other State initiatives 115

BE114 Program supporting the Chilean cinema (total support, 2018 project’s candidates and winners)

9.2. Fostering the Chilean cinema 112

BE115 Data and % of total purchases with social and environmental criteria 9.4.2. Sustainable purchases 116

BE116 IPS Payments 9.3.3. Support to other State initiatives 115

BE117 Total sale of FONASA vouchers 9.3.3. Support to other State initiatives 115

BE118 Totalpropertytaxpayments 9.3.3. Support to other State initiatives 115

BE119 Organization chart 2.1.4 General Area Management 23


133_


GRI 102-1 Business name Table of content 2

GRI 102-2 Organization’s activities Table of content 2

GRI 102-3 Business location Table of content 2

GRI 102-4 Countries where the business operates Table of content 2

GRI 102-5 Ownership and legal form Table of content 2

GRI 102-6 Markets 3. General results 35

GRI 102-7 Business size 3. General results 35

GRI 102-8 Staff information 8. Have a motivated, prepared and dynamic team 100

GRI 102-10 Organizational changes 2. BancoEstado profile 17

GRI 102-11 Precautionary principle 2. BancoEstado profile 17

GRI 102-12 Externalinitiatives 2.4. Sustainability 31

GRI 102-13 Membership to associations 2.2.2. Related and associated entities 26

GRI 102-14 Letter to the top authority 1.1. Letter from the Chairman of BancoEstado 5

GRI 102-16 Values, principles and conduct standards 2.3. The basis of our management 28

GRI 102-18 Governance structure 2.1. Corporate governance 18

GRI 102-40 Interest groups (IG) 1.5. About this Integrated Annual Report 15

GRI 102-41 Collective agreements negotiations 8.4. Labor relationships 107

GRI 102-42 Selection of IG 1.5. About this Integrated Annual Report 15

GRI 102-43 Participation of IG 1.5. About this Integrated Annual Report 15

GRI 102-44 Themes added by IGs 1.5. About this Integrated Annual Report 15

GRI 102-45 Financial statements’ coverage 1.5. About this Integrated Annual Report 15

GRI 102-46 Materiality definition process 1.5. About this Integrated Annual Report 15

GRI 102-47 List of material issues 1.5. About this Integrated Annual Report 15

GRI 102-48 Restating subject matters 1.5. About this Integrated Annual Report 15

GRI 102-49 Changes over Annual Report 2017 1.5. About this Integrated Annual Report 15

GRI 102-50 Annual Report time coverage 1.5. About this Integrated Annual Report 15

GRI 102-51 Date of latest publication 1.5. About this Integrated Annual Report 15

GRI 102-52 Annual Report preparedness cycle 1.5. About this Integrated Annual Report 15

GRI 102-53 Annual Report contact 1.5. About this Integrated Annual Report 15

GRI 102-54 Annual Report compliance declaration with GRI standards 1.5. About this Integrated Annual Report 15

GRI 102-55 Table of Indicators Annexes 125

GRI 102-56 Externalverification Hereinfinancialstatementsexternallyverified. N/A

GRI 103-1 Explanationofmaterialissueanditscoverage 1.4. Strategic Plan 2018-2022 and sections 4.1, 5.1, 6.1, 7.1, 8.1

y 9.1

14

GRI 103-2 Management focus and components 1.4. Strategic Plan 2018-2022 and sections 4.1, 5.1, 6.1, 7.1, 8.1

y 9.2

14

GRI 103-3 Management focus evaluation 1.4. Strategic Plan 2018-2022 and sections 4.1, 5.1, 6.1, 7.1, 8.1

y 9.3

14


134_

Seniority F M Grand total

Less than 1 year 61 71 132

Between 1 and 5 years 1.207 1.184 2.391

Between 6 and 10 years 1.254 996 2.250

Between 11 and 15 years 1.289 991 2.280

Over 16 years 1.103 1.938 3.041

Grand total 4.914 5.180 10.094

2014 2015 2016 2017 2018

ExecutiveStaff

Women 32 40 50 50 48

Men 123 127 138 143 132

Growth % Women 25% 25% 0,0% -4,0%

Growth % Men 3,3% 8,7% 3,6% -7,7%

Number of people by gender 2018

Position Men Women Total

Directors (*) 2 2 4

Managers and Assistant Managers 132 48 180

TOTAL Workers (includes categories above) 5180 4914 10094

A.2. Staffinglevels–SocialresponsibilityandSustainable Development_

(*) Includes a Labor Director and an alternate Labor Director.

Headcount by gender

2018

Gender Man Woman

Category Nº % Nº %

Managers and Assistant Managers 132 2,5% 48 1,0%

Other staff 5048 97,5% 4866 99,0%

TOTAL 5180 100,0% 4914 100%

2018

Age group Less than 30 Between 30 and 45 Between 46 and 60 Over 60

Category Nº % Nº %

Managers and Assistant Managers 0 0 31 1% 125 4% 24 4%

Other staff 768 100% 5487 99% 3117 96% 542 96%

TOTAL768 100,0% 5518 100,0% 3242 100,0% 566 100,00%

7,6% 54,7% 32,12% 5,6%

Responsible division: Communications and Sustainability DivisionMateriality and contents: Social managementDesign and layout:GrupoOxígenoPhotography: Thomas Wedderwille / BancoEstado’s archive

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Transcript of Banco del Estado de Chile