CONSORCIO FINANCIERO S.A.

MEMORIA ANUAL 2017

CONSORCIO FINANCIERO S.A.

2017ANUAL REPORT

2017 Annual ReportConsorcio Financiero S.A.

4

We understand what is most importantto you and your family

4

2017 Annual ReportConsorcio Financiero S.A. 5

INSURANCE

BANK

PENSION FUNDS

SAVINGS

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01Consorcio Financierop. 10

Subsidiaries of Consorcio Financiero S.A. Consorcio Financiero in Numbers Letter from the ChairmanBoard of DirectorsHistory2017 Highlights 2017 Awards

Index

02Corporate Managementp. 30

Corporate Governance Principles SustainabilityBrand Management


05Economic and Financial Environmentp. 72

International ScenarioInvestment Management

07Financial Statementsp. 146

06Business Management p. 82

Insurance and PensionsBanco ConsorcioLVCC Asset ManagementLa Positiva Vida Seguros y Reaseguros (Peru)

03Corporate Informationp. 46

Corporate Structure

04Financing, Investment and Risk Policyp. 60

Investment PolicyFinancing PolicyRisk Factors

Investments in other Companies

8

Products: Annuities, individual life insurance, life insurance with savings, volun-tary retirement savings, group and catastrophic insurance, credit insurance, travel insurance and disability insurance.

Products:Car insurance, home insurance, obli-gatory personal accident insurance for accidents involving domestic and foreign motor vehicles (SOAP - SOAPEX), pet insurance, corporate

liability insurance, engineering insu-rance and warranties.

Products:Annuities (normal, premature, disability and survivors) and disa-bility and survivors’ insurance.

Consorcio Seguros Vida

Consorcio Seguros Generales

CN Life Seguros Vida

Consorcio Financiero S.A.

US$ 153MILLION IN ASSETS

US$ 39MILLION IN EQUITY

US$ 1,222 MILLION IN ASSETS


US$ 9,383MILLION IN ASSETS

US$ 909MILLIONIN EQUITY

We aim to insure people against risks, providing the best protec-tion available to our customers

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to meet customer needs in terms of family prosperity and asset se-curity in a reliable, approachable,

-ce of mind.

Annuities is our main line of busi-ness, where we provide our custo-mers with professional and tailored

-lity and backing of the Consorcio group. We also participate in the disability and survivors’ insurance (SIS) put out to tender by the priva-te pension system.

We provide a variety of insurance options to protect personal and cor-porate property, with a top-quality service that meets customer needs in terms of asset security, providing peace of mind and reliability, throu-gh our own distribution channels, as well as wholesale brokers, banks, retail and web platforms.


Products:Consumer and mortgage loans, commercial loans, real estate

services, currency trading, perfor-mance bonds, salary payments, derivatives and funds capture.

Products:Mutual funds and investment funds.

Products:Intermediation of securities, stocks, mutual funds, term deposits, simultaneous opera-tions, purchases and voluntary pension funds (APV).

Products:Life insurance, occupational acci-dent insurance, pension insuran-ce and retirement insurance.

Banco Consorcio

LVCC Asset Management

Consorcio Corredores de Bolsa

Seguros La Positiva Vida (Peru)


US$ 684MILLION EQUITY

US$ 5,323MILLION IN ASSETS MANAGED BY LV AGF

US$ 561MILLION IN ASSETS




services to meet our custo-

needs in three business areas: personal banking, corporate

As a subsidy of Banco Con-sorcio, we broker investment alternatives for our customers, so they can conduct safe, swift and simple transactions online.

Consorcio Financiero is a 25% shareholder in LVCC Asset Ma-nagement S.A., which is a 99.9% shareholder of LarrainVial Asset Management Administradora General de Fondos S.A., which

to its customers.

Consorcio Financiero S.A. has a subsidiary, CF Inversiones Perú SAC, which owns 40.1% of La Po-sitiva Vida Seguros y Reaseguros S.A. (La Positiva Vida), the fourth largest life insurance company in

-nal assistance to its customers, ensuring that they are protected at all times.

101010


01.Consorcio FinancieroWe advise you so you can enjoy today while planning for your future.

112017 Annual ReportConsorcio Financiero S.A.

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US$ 1,208 millionTOTAL DIRECT PREMIUM OF CONSORCIO SEGUROS

Consorcio Financieroin numbers

Risk Rating 2017

AA

AA-

2014 2015 2016 2017

Equity 694,792 714,702 910,664 1,032,342

Assets 7,579,573 8,422,238 9,520,442 10,551,880

Total Revenue 1,071,137 1,187,575 1,437,772 1,398,832

114,491 88,189 137,161 208,433

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EVOLUTION OF CONSORCIO FINANCIERO (IN MCH$)

PROFITS PER COMPANY

66.1%

33.9%WOMEN

MEN

2,892EMPLOYEES

PROFITS CONSORCIO

SEGUROS VIDA

PROFITS BANCO CONSORCIO

Y FILIALES

PROFITS CN LIFE

SEGUROS VIDA

PROFITS SEGUROS

GENERALES

Ch$140,922 Ch$44,587 Ch$20,043 Ch$2,881MILLION MILLION MILLION MILLION


DISTRIBUTION OF REVENUE CONSORCIO FINANCIERO(In MCH$)

BANCO CONSORCIO LOANS AND RISK INDEX (In MCH$)

TOTAL REVENUE1,398,832

BANK AND SUBSIDIARIES

HEADQUARTERS AND OTHERS

1,173,397

222,652

2,783

INSURANCE COMPANY

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FECU (Chilean standardized coded statistics) for Consorcio

Financiero consolidated with values per area of operational income.

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EVOLUTION DIRECT PREMIUM GENERAL INSURANCE (In MCH$)

ANNUAL EVOLUTION PER NUMBER OF PENSIONS PAID (Consorcio Seguros Vida + CN Life Seguros Vida)

(In MCH$)

EVOLUTION DIRECT PREMIUM LIFE INSURANCE (Consorcio Seguros Vida + CN Life Seguros Vida)

(In MCH$)

ANNUAL EVOLUTION OF NUMBER OF PENSIONS PAID (Consorcio Seguros Vida + CN Life Seguros Vida) (In No. of pensions paid)

488,

864

520,

943

699,

635

810,

340

664,

477

844,

863

895,

905

950,

368

1,20

3,49

5

1,09

0,59

6

52,9

24

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0

59,5

02 64,9

31

74,0

14

78,1

50

211,

152

230,

966

252,

627

280,

344

302,

459

DEC.-13 DEC.-14 DEC.-15 DEC.-16 DEC.-17

PORTFOLIO

RISK INDEX

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Marcos Büchi BucChairman

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Letter from the Chairman Dear shareholders,

On behalf of the Board of Directors of Consorcio Finan-

ciero S.A., I am pleased to present the Annual Report

for 2017, a period in which once again our company ob-

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gress and achievements.

This past year was especially challenging, both in the ma-

croeconomic realm and in terms of business performan-

ce. However, the diversity of activities in which Consor-

cio Financiero participates and the capacity of the teams

that make up each of the business pillars - insurance,

pension, savings and banking - enabled us to end the

year with historic numbers.

In 2017, the Chilean economy experienced slow growth

and closed the year with only 1.5% expansion. Howe-

ver, at the end of the period there was a notable impro-

vement in economic expectations, associated with the

favorable external environment and the new political

cycle. This occurred in a scenario where the global eco-

nomy advanced over 3.7% in the last year, which cons-

titutes the biggest global GDP growth since 2010. Inter-

nally, recovery in the business trust indicator, seen in

the last few months of 2017, has enabled a much more

optimistic outlook for the Chilean economy than that ob-

served over the last few years, where a new investment

push is key.

In anticipation of this scenario, we have continued to

strengthen our strategy and prepare ourselves to take

services, and adapt to the regulatory changes associated

-

ciero companies operate.

Through our three insurance companies - Consorcio Se-

guros Vida, Consorcio Seguros Generales and CN Life

Seguros Vida - we are proud to continue being the pri-

mary insurance group in the country. These are joined

by Banco Consorcio and its subsidiaries, enabling us to

meet our customers’ needs in terms of family prosperi-

payment.

services and promote the development of long-term,

trust-based relationships with all clients. To this end, our

range of services includes the provision of tailored ad-

vice and an approachable, proactive and timely service.

Our commitment to build trust-based, long-term rela-

tionships extends not only to our customers, but also to

our distributors and intermediaries, our employees and

our community environment. These all play a key role in

Consorcio Financiero’s strategy.

In addition to the above, in 2017 we incorporated new

agile work methodologies into our organization, which

are already beginning to bear fruit, through multidisci-

plinary management opportunities, which are allowing

us to accelerate the development of products and con-

tinuously improve on these, with a marked emphasis on

a customer-focused, digital experience. We believe that

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In the area of Corporate Governance, following the

incorporation of the International Finance Corpo-

ration (IFC), member of the World Bank Group for

the private sector, as shareholder of Consorcio

Financiero, we have continued to move forward

and make improvements through the different di-

rectors’ committees and their policies. The IFC was

incorporated in 2016 with 8.23% ownership of our

company, with direct contributions and contribu-

tions from the Financial Institutions Growth Fund

(FIG Fund), a private fund managed by the IFC Asset

Management Company.

We are proud to announce that, at the end of last

year, Consorcio Seguros was distinguished as the

company in the insurance industry with the best

reputation in 2017, according to the eighth edition

of the Corporate Reputation Ranking prepared by

the Corporate Reputation Business Monitor (Mer-

co) . Consorcio Seguros climbed 11 places in the

general ranking, leading in its sector over other

insurance companies and AFPs. This recognition

reflects the value placed in this company, its ma-

nagement and behavior, by board executives, fi-

nancial analysts, trade unions, NGOs, journalists

specializing in economics, government authorities,

consumer associations and other public interest

groups. Likewise, this distinction reflects Consor-

cio’s commitment to its customers and Chile as a

whole, and specifically to the development of the

insurance and financial sector, which has allowed

us to offer products and services of excellence and

be present in large projects that add value to so-

ciety.

Everyone who works at Consorcio is motivated to

work to be a good corporate citizen, as we are con-

vinced that we have a social commitment through

our activity and that our success should provide

others with more and better opportunities. Million Ch$208,433

As part of this commitment, Consorcio adheres

to the Chilean Insurance Industry Self-Regulation

Council, created in 2002 to oversee compliance

with free competition and loyalty standards be-

tween companies and consumers in the insurance

sector.

Important milestones this year and achievements

obtained in the different areas are summarized in

the favorable results obtained by Consorcio Finan-

ciero in 2017.

At year end, the holding’s consolidated profits to-

taled Ch$ 208,433 million (equivalent to US$ 339

million), which represents a variation of 52% com-

pared to the Ch$ 137,161 million (equivalent to a

US$ 205 million) obtained the previous year. The

three insurance companies of Consorcio Financie-

ro - Consorcio Seguros Vida, CN Life Seguros Vida

and Consorcio Seguros Generales - contributed

78.6% of this final result. Banco Consorcio and its

subsidiaries, together with the other subsidiaries

of Consorcio Financiero, represented 21.4% of to-

tal profits.

At the end of 2017, Consorcio Financiero’s equity

totaled Ch$ 1,032,342 million (equivalent to US$

1,679 million), while the volume of managed as-

sets was Ch$ 10,551,880 million (equivalent to US$

17,165 million), representing a variation of 10.8%

over the previous year.

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Insurance Business -

vestment portfolio, together with a wide diversity of products

and distribution channels, based on the implementation of our

strategic plan, explain the positive results obtained by Consor-

cio Seguros through its three companies, in 2017.

Growth per branch was within budget in both Life Insurance

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taling Ch$ 742,628 million (equivalent to US$ 1,208 million) in

consolidated premium.

Consorcio Seguros Vida had a 10.5% market share in 2017,

with a direct premium of Ch$ 603.655 million (equivalent to

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lent to US$ 229 million), while company assets reached Ch$

5,768,161 million (equivalent to US$ 9,383 million) and equity

rose to Ch$ 558,982 million (equivalent to US$ 909 million).

Annuities continued to be the main activity of Consorcio Se-

guros Vida. Premium income from this segment amounted to

Ch$ 352,267 million, which meant a market share of 14.3%.

Our strong brand positioning, the quality of our service and

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corporation of 5,820 new pensioners, who relied on our advice

and joined Consorcio Seguros Vida in the last year.

The highest performance by branch was in individual life and

voluntary pension savings (APV) insurance, with revenues of

and 14.2% in increases, respectively.

In voluntary pension savings, Consorcio Seguros Vida obtained

a 25.1% market share. The balance managed in this segment

reached Ch$ 303,960 million (equivalent to US$ 494.4 million),

positioning the company as the leader in APV among insuran-

ce companies.

This excellent performance also extended to group insurance,

with an annual premium of Ch$ 23,984 million and growth of

7.5%.

CN Life Seguros Vida continued with its strategy focused on

marketing annuities and disability and survivors’ insurance

(SIS). Its direct premium was Ch$ 60,823 million (equivalent to

US$ 99 million), with a 1.1% market share. It registered Ch$

$ 90,266 million (equivalent to US$ 146.8 million) in equity. At

year end, its total assets were Ch$ 750,984 million (equivalent

to US$ 1,222 million). Revenues from the disability and sur-

vivors’ insurance (SIS) were Ch$ 39,700 million, contributing

65.3% of the company’s total income.

Meanwhile, Consorcio Seguros Generales ended the year with

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le revenues from direct premiums totaled Ch$ 78,150 million

(equivalent to US$ 127.1 million), 5,6% higher than the pre-

vious year. The company’s assets totaled Ch$ 93,757 million

(equivalent to US$ 152.5 million) and its equity was Ch$ 23,643

million (equivalent to US$ 38.5 million).

At the end of 2017, Consorcio Financiero’s equity totaled US$ 1,679 million, while the volume of managed assets was US$ 17,165 million.”

“

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Banco ConsorcioIn a highly competitive environment with low economic

growth, which led to decreased demand for loans by in-

dividuals and companies, Banco Consorcio had a favora-

In line with the growth plan proposed for 2017, Banco

Consorcio’s net loans increased 15.2% over 12 months,

tripling the industry’s loan growth, which expanded by

4.7% over the last year.

In 2017, the bank generated net portfolio growth of

Ch$ 271,889 million (equivalent to US$ 442 million) dri-

ven mainly by the performance of commercial banking,

which registered a 2.4% market share.

In a year during which our customers’ real estate busi-

ness continued to be active, despite the market uncer-

tainty, housing loans in the managed portfolio grew by

4.7% and commercial loans increased by 16.2%.

Consolidated assets totaled Ch$ 3,752,719 million (equi-

valent to US$ 6,104 million) and net loans to customers

amounted to Ch$ 2,064,872 million (equivalent to US$

3,359 million), boosted by commercial and housing

loans in the managed portfolio.

Once again, Banco Consorcio positioned itself as a lea-

With an indicator of 31.3% - measured as supporting

expenses on gross operating income - the entity was

above the market average for banks, which showed an

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perintendence of Banks and Financial Institutions.

To maintain healthy growth, Banco Consorcio conti-

nued to diversify its funding sources. In 2017, three local

bonds were issued, totaling UF8 million (equivalent to

US$ 348.7 million) and incorporating two new corres-

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ca, joining the existing correspondent banks, Deutsche

Bank and Standard Chartered Bank.

Furthermore, after an assessment to date by local raters,

in September 2017, Fitch Ratings gave Banco Consorcio

an international rating of “BBB” as a long-term issuer in

local and foreign currency, with a “Stable Outlook.” This

rating enabled the bank to issue bonds abroad.

We continue to work towards our goal of making Ban-

competitive industry, an option that has generated favo-

synergy with the rest of the group’s activities.

Environment and Community A relevant aspect of our mission is to generate trust-ba-

sed relationships in the many arenas in which we parti-

us to project ourselves over the long term, extending our

achievements to other people. We also believe that we

have a social commitment in our work, which leads us to

establish a direct line of communication with the com-

munity. This is the only way that we can move forward as

a society and continue down the road to development

as a country.

A part of our agreement with Desafío Levantemos Chile,

Consorcio Financiero joined forces with others to su-

pport the town of Santa Olga, in the district of Constitu-

ción, Maule Region, which was devastated by the forest

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try in early 2017. Through a direct donation of Ch$ 1,000

million, Consorcio Financiero S.A. actively supported the

construction of the Santa Olga Educational Complex,

which will house a school and kindergarten on a surface

elementary and high school students.

It was this same social commitment that drove us de-

cades ago to create Fundación Consorcio Vida, whose

work mainly focuses on Monte Olivo School in Puente

Alto, which was opened in 2002 to provide quality edu-

cation to children in one of the most deprived areas of

Santiago, giving them the necessary tools for a holistic

development.

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We are proud of the work carried out by our organiza-

tion and its employees through Fundación Consorcio

Vida and the management of this subsidized private

school. In late 2017, Monte Olivo School in Puente Alto

had 1,073 students from pre-kindergarten to 12th gra-

de, with a total of 348 alumni over seven generations.

We are pleased to report that several students have al-

ready completed professional internships with the com-

pany and some are currently working at Consorcio Segu-

ros, after having completed their higher education. With

this, we complete a virtuous cycle of social commitment.

At Consorcio, we have a professional, committed, spe-

cialized and responsible team. Our growth is based on

human capital, which is why we work to create the con-

ditions for our employees to develop their full potential

within our organization in a challenging and respectful

work environment that places value on diversity.

Thanks to this positive management, for the second year

in a row, our organization was recognized by Merco Ta-

lento, identifying us among the three best companies in

terms of ability to attract and retain talent at the national

-

sorcio holding, with its strong focus on promoting the

development of its members.

Regulatory Changes

is immersed in a process of institutional modernization of

As part of this, in 2016 the creation of the Financial Market

Commission (Comisión para el Mercado Financiero, CMF)

2018, with new supervisory and regulatory standards.

This change creates important challenges for companies

about several regulatory matters that are still under public

debate. In recent years, for example, reform of the pension

system has been a recurring topic. And through the Asocia-

“We have continued to strengthen our strategy

and prepare ourselves to take advantage of the

growth and development opportunities in the areas in which we work, expand

our comprehensive range of products and services, and

continue to make progress in our digital transformation.”

ción de Aseguradores de Chile AG, Consorcio Seguros has

sought to contribute with a practical, long-term vision to the

proposed initiatives, their analysis and discussion.

We trust that the new government authorities will make

progress towards the responsible modernization of this

aspect of development, with a vision of the future that

ensures the well-being of all Chileans.

such as the market study on the annuities market sys-

tem, published at the end of 2017 by the National Eco-

FNE), and the publicly discussed concerns about the tax

system that currently applies to property insurance.

At Consorcio we believe that the insurance sector has

been and will continue to be an important driver in the

country’s development and growth. This is why we have

always been prepared to contribute technically and

from our hands-on experience on these topics and in

the discussions aimed at perfecting this.

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corporate citizens.” 01.

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In fact, we are very well-positioned among insurance

companies when it comes to implementing the self-as-

sessment mechanisms for basic principles and good

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ce industry that were established in October 2017 by

the former Chilean Securities and Insurance Supervisor

(SVS), now known as the Financial Market Commission

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terest and managing knowledge transparently are some

of the issues addressed. Over the last year, insurers in

the Consorcio group began a self-assessment process

As part of the creation of the Financial Market Commis-

sion (CMF), 2017 saw the start of one of the most rele-

vant regulatory changes that the banking industry has

seen in the last decade, as the reform project for the Ge-

the implementation of a new supervisory and regulatory

-

tence of a regulator with a general and systemic vision.

The project incorporates the current Superintendence of

Banks and Financial Institutions (SBIF) into the Financial

establishes the adoption of Basel III standards, adap-

ting the capital requirements of the banking industry

2018, these regulations had already been issued by the

Chamber of Deputies and submitted to the Senate.

Although Basel I still operates in Chile, Banco Consorcio

has adapted to this new liquidity standard and already

has the capital it would require under the new regula-

tions once they enter into force.

Future Challenges We believe that 2018 will bring new and diverse challen-

ges for our country and for Consorcio. Expectations of

greater economic growth than in recent years will re-

quire the adoption of concrete measures to stimulate

investments and bring greater dynamism to Chile’s eco-

nomy, which is the only way to move towards greater

wellbeing for all.

Likewise, regulations and standards currently underway

part of their progress and implementation.

Beyond the market-imposed demands, Consorcio has

a solid track record going back over 100 years, with

its clear customer-oriented strategy, important strides

towards the digital transformation process, an excellent

and committed professional human team, and the on-

going trust and support of our shareholders. All this will

allow us to decisively embark on the tasks and objectives

of Chileans and contribute to the development of the

Marcos Büchi BucChairman of the Board

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Marcos Büchi Buc

Chairman Chilean Tax ID 7.383.017-6

Structural Civil Engineer

Universidad de Chile

On board of directors since:

December 30, 2014

Juan Hurtado Vicuña

Director Chilean Tax ID 5.715.251-6

Civil Engineering Degree,



September 29, 1999

Eduardo Fernández León

DirectorChilean Tax ID 3.931.817-2

Business Administration Degree


September 29, 1999

José Antonio Garcés Silva


Businessman


September 29, 1999

Board of Directors Consorcio Financiero

Pedro Hurtado Vicuña


Industrial Engineer



April 28, 2011

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DIRECTORES

’


Patricio Parodi Gil

CEOConsorcio Financiero S.A.Chilean Tax ID 8.661.203-8


Master’s Degree in Business

Administration

Harvard University

Appointed: October 27, 1999

Bonifacio Bilbao de Raadt



de Chile


April 25, 2017

Ramiro Mendoza Zúñiga


Attorney



Hernán Büchi Buc


Civil Engineer


Postgraduate Degree

Columbia University


September 29, 1999

Sergio Restrepo Isaza

Director0-E (Foreign)

Business Administrator

Master’s in administration

Stanford University


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History1916

1986

1987

1975

1928

1974

1920

Founding of Compañía de Seguros La Industrial.

The company becomes part of Bankers Trust, which acquires 96.21% of its sha-res.

2002The company begins marketing volun-tary pension savings (ahorro previsional voluntario, or APV).

Consorcio consolidates itself further with the acquisition of CNA, now CN Life Compañía de Seguros de Vida S.A.

Fundación Consorcio opens Monte Oli-vo School in Puente Alto.

Consorcio creates Fundación Consor-cio to support the country’s develop-ment and social progress.

The company changes its name to Compañía de Seguros de Vida Consor-cio Nacional de Seguros S.A.

Compañía de Seguros La Industrial

February 04, 1928.

The company changes its name to Compañía de Seguros de Vida La In-dustrial S.A.

The company has a successful star-

on Bandera street, which join Nueva York and Ahumada streets in sha-

2000

1991

1993

1999

Consorcio Créditos Hipotecarios S.A. is authorized to commence operations and Consorcio Corredores de Bolsa S.A. is created. A partnership with Com-pass Group N.Y. is formalized.

the most important cities throughout the country.

Approximately 450 people work in these.

Inauguration of the Consorcio cor-porate headquarters, designed by renowned Chilean architects Enrique Browne and Borja Huidobro.

Consorcio Financiero S.A. is crea-ted, a 100% national company in the hands of the Hurtado Vicuña, Fernández León and Garcés Silva families.

Consorcio Financiero S.A. acquires Cruz Blanca Seguros Generales, transforming it into Compañía de Seguros Generales Consorcio Na-cional de Seguros S.A.

2008

2009car and travel insurance sales.

Consorcio purchases Banco Monex, which becomes Banco Consorcio.

Consorcio Financiero’s stake in LVCC Asset Management S.A. reaches 25%, following the merger of Consorcio S.A. Administradora General de Fondos and LarrainVial Administradora Gene-ral de Fondos S.A.

2003

2004

2005

2006

stock exchange.

Fundación Consorcio wins the Good Corporate Citizen award from the Chilean-American Chamber of Com-merce.

Consorcio Tarjetas de Crédito S.A. is launched and becomes the leading non-bank issuer of credit cards in the country.

Consorcio Corredores de Bolsa de Productos S.A.(commodity exchange) is founded.

--

sioners.

Consorcio is awarded the Superbrands title by the Chilean Brands Council and Superbrands International.

01.

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2015

2016

2014

Consorcio Financiero S.A. sells all shares in Moneda Asset Manage-ment S.A., equivalent to 16.16% of the property.

Consorcio Financiero S.A. joins the Peruvian insurance market by pur-chasing 40.1% of Compañía de Segu-ros La Positiva Vida Seguros y Rease-guros S.A.

Consorcio celebrates 100 years of his-tory with important acknowledgments, such as Top Employer Chile 2016 for the third year in a row and the distinc-tion as the Best Life Insurance Com-pany in Chile by the World Finance Magazine for the second time.

International Finance Corporation (IFC), member of the World Bank Group for the private sector joins the ownership team of Consorcio Finan-ciero S.A. after signing a capital increa-se of US$ 140 million. Consorcio Segu-ros is industry leader.

In the year of its 100-year anniversary, the Consorcio group hit a record by

to exceed US$ 1,321 million in income from direct premiums in insurance companies.

2016, with a 29.8% index.

Banco Consorcio incorporates Con-sorcio Corredores de Bolsa S.A. as a subsidiary, previously a subsidiary of Consorcio Financiero S.A. This will allow the bank to expand its product

opens two new branches: El Cortijo, for Corporate Banking, and Apoquin-do, specialized in the Mortgage seg-ment.

Consorcio Seguros receives the Top Employer Chile 2014 award from the Top Employers Institute.

2012Consorcio Financiero S.A. makes a ca-pital increase of Ch$ 127,902 million, which is used to strengthen the equity of its Insurance, Banking and Brokera-ge subsidiaries.

-mestic insurance industry, taking into

and general insurance subsidiaries as of December 31, 2012.

CN Life Compañía de Seguros de Vida S.A., is awarded two fractions of disa-bility and survivor insurance (SIS) put out to tender by the private pension system.

2010

2011

Mobile applications are launched for Consorcio Seguros Vida and Consor-cio Corredores de Bolsa.

In its second year of operations, Ban-co Consorcio makes a capital increase of Ch$ 23,053 million, reaching Ch$ 75,729 million in equity. It successfully

a term of 20 years for an amount of

2013Consorcio Financiero S.A. makes a bond placement in the local market for UF 5 million.

Consorcio Seguros Vida is recogni-zed as “Chile’s Best Life Insurance Company” by the prestigious British magazine, World Finance.

Companies category of the Corpo-rate Reputation Ranking compiled by Hill & Knowlton Strategies, GFK Adimark and La Tercera newspaper.

The brand is recognized for the se-cond time as Superbrand Chile. C

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26

Highlights 2017

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In May, Consorcio Financiero successfully

(Series C Bonds) considered UF 2,000,000,

UF +1,79%, and the second (Series E Bonds)

was for UF 2,000,000, with a 20-year term

and a placement rate of UF +2.89%.

Funds from bond placement were used

liabilities of the issuer.

CONSORCIO FINANCIERO ISSUES BONDS

Consorcio gave its customers a solution to

simplify the management of investments

associated with their APV savings and

insurance policies. In partnership with

LarrainVial AGF, it created Dynamic Funds,

a managed Mutual Fund portfolio tailored

and under the active and permanent

management of investment experts.

NEW DYNAMIC FUNDS TO SIMPLIFY INSURANCE MANAGEMENT WITH SAVINGS AND APV

In keeping with the growth plan proposed

for 2017, Banco Consorcio’s net loans

increased 15.2% over 12 months, mainly

driven by the performance of Commercial

Banking.

In a year during which the real estate

business continued to be active, despite

the market uncertainty, housing loans in

the managed portfolio grew by 4.7% and

commercial loans increased by 16.2%.

COMMERCIAL BANKING DRIVES GROWTH OF 15.2% IN LOANS


launched its Complementary Health and

Life Insurance through the ANS (Alliances

and Business in Insurance) channel, which

covers medical expenses for insured

workers and provides compensation for

their families in the event of death, and

Complementary Health Insurance Plus is

an additional add-on to this product, which

provides greater protection in medical

and dental expenses for insured workers

and their families, including parents,

incorporating coverage for pre-existing

conditions.

NEW COMPLEMENTARY HEALTH AND LIFE INSURANCE FOR SMES

After an assessment to date by local raters,

in September 2017, Fitch Ratings gave

Banco Consorcio an international rating

of BBB as a long-term issuer in local and

foreign currency, with a stable outlook. In

addition, on a scale of 1 to 5, where 1 is the

support as 2.

This ranking, which enables the bank to

issue bonds abroad, was based on the

levels, adequate risk management and

loan portfolio quality. In addition, the

rating company highlighted the bank’s

solid capitalization, strengthened by the

incorporation of the International Finance

Corporation (IFC) in 2016 as shareholder of


FITCH RATINGS AWARDS INTERNATIONAL RANKING TO BANCO CONSORCIO

Consorcio improved its digital platforms

to provide a timely response to customers

through easy access channels and in line

with the demands of new users. For this,

it redesigned its consortium.cl website,

incorporating new technology and tools to

make it more user-friendly. It developed a

new private area for its customers, which

integrates the entire product line.

Complementing its digital tools, Consorcio

relaunched its vehicle insurance App. With

this, its customers can report their claims

online and request 24/7 assistance (tow

trucks, tire change or gas, among others).

It also allows them to quote new products,

particularly those sold on the e-commerce

platform.

IMPROVING DIGITAL EXPERIENCE FOR INSURANCE CUSTOMERS

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28

01.

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After opening a branch in Puente Alto

in 2016, Banco Consorcio continued to

grow its presence in the Metropolitan

Region in 2017 by adding a new branch

to its mass banking division through its

directed sale model, this time in Maipú. A

southwestern part of the city is located

in this district, with a potential of at least

20,000 customers in the mass banking

segment through its directed sales model.

obtained excellent results, contributing

with 16% of the segment’s annual sales and

establishing itself as an important point of

contact for our customers.

OPENING OF A NEW BRANCH IN MAIPÚ

After a successful sales strategy, Consorcio

pioneer and main supplier of obligatory

personal accident insurance for accidents

involving foreign motor vehicles (SOAPEX),

both at the border and through online

sales. This insurance is required for

all vehicles that enter the country

provisionally or temporarily and must be

valid throughout their stay in Chile.

Likewise, in 2017 the company chose

to sell its Obligatory personal accident

insurance (Seguro Obligatorio de

Accidentes Personales, SOAP) exclusively

online, reaching a 64.6% growth in direct

premiums.

Banco Consorcio was once again recognized

for its results in two of the best-known

category with the lowest negative response

rate to its customers in the Sernac ranking,

with only 25.0%, while in the claims indicator

for every 10,000 debtors, it ranked third.

Similarly, in the perception of service in

Corporate Commercial Banking Segment,

satisfaction, according to Servitest.

as support costs over gross operating

revenues, with an indicator of 31%, Banco

Consorcio ranked above the other banks

at 49%, according to data from the Chilean

Banks and Financial Institutions Supervisor.

RECOGNITION OF THE BANK’S SERVICE QUALITY AND EFFICIENCY

SUCCESSFUL 2017 SOAP AND SOAPEX CAR INSURANCE CAMPAIGN


The 2017 Merco Empresas y Líderes corporate ranking,

which acknowledges the companies with the best corporate

reputation in Chile, distinguished Consorcio as a leading

company in the Insurance + AFP category. In addition,

Consorcio ranked among the 50 companies with the best

corporate reputation on a national level, after moving up 11

positions to reach 48th place in the general ranking.

For the second year in a row, Consorcio Seguros obtained

the best performance in Chile.

This annual ranking assesses the company’s attractiveness

in drawing in and retaining talent and analyzes this

comparatively with all large companies.

Best Corporate Reputation in ChileMERCO EMPRESAS CORPORATE

RANKING

Leader in talent retention in ChileINSURANCE INDUSTRY

Insurance + AFP category

companies nationwide

Awards 2017

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30 3030


02.CorporateManagement

Over 100 years accompanying all Chileans throughout the various stages of their life.


32

Principles of Corporate Governance 02.

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Consorcio Financiero S.A. uses robust corporate go-

vernance principles that are in line with best practices

and applicable regulations, which are also based on the

Group’s strategic focal points.

Based on the corporate vision, mission and values, these

principles of corporate governance support the determi-

nation of strategies to follow for the creation of value for

shareholders, clients, partners and other stakeholders.

This corporate governance creates a clear structure in

which the committees formed by directors and executi-

ves play an important role in the implementation, oversi-

policies.

-

-

nition of roles and responsibilities of participants. These

governance, enabling it to meet the highest standards in

Consorcio Financiero S.A., which controls the companies

that are part of the Consorcio holding, constantly seeks to

generate mechanisms that facilitate relationships among

regulations, thus taking advantage of synergies in terms

each individual business. Each of the entities that form

part of the holding has its own Board of Directors and

The Board of Directors of Consorcio Financiero S.A. has

nine members and has an audit, corporate governance

and talent retention committee, made up of three direc-

tors, which also includes the participation of the CEO of

the holding company as well as the CEOs of the main

subsidiaries. Its main purpose is to support the Board of

Directors on issues of internal control, audit, corporate

governance and talent retention for insurance compa-

nies, the bank and other subsidiaries.

responsible for overall management of the parent com-

pany and works closely with subsidiaries to ensure that

they achieve their strategic goals and objectives in order

to increase the creation of corporate value.

CORPORATE GOVERNANCE MAIN SUBSIDIARIES

Insurance Companies The Consorcio Financiero holding has three insuran-

ce companies in Chile: Compañía de Seguros de Vida

Consorcio Nacional de Seguros S.A. (Consorcio Segu-

ros Vida), CN Life Compañía de Seguros de Vida S.A.

(CN Life Seguros Vida) and Compañía de Seguros Ge-

nerales Consorcio Nacional de Seguros S.A. (Consor-

cio Seguros Generales).

The main elements of corporate governance of these

companies are contained in a code approved by the

respective Board of Directors and comply with current

law as well as local and international recommenda-

tions and best practices.


Consorcio Financiero is constantly developing mechanisms

Corporate Governance ElementsCorporate governance of each of these companies is

comprised of different entities and functions, inclu-

ding the shareholders, the Board of Directors and its

Committees of Directors, the Executive Committee

made up of senior management, including issues of

financial oversight, compliance, internal auditing and

risk management. The Corporate Governance Code

defines roles and responsibilities for each of these

units, which contribute towards ensuring a solid go-

vernance of the companies.

Shareholders’ BoardThis is the highest authority and supreme body of the

entity. Each year, shareholders review the company’s

position and the reports issued by external auditors.

Shareholders also elect members of the board of direc-

tors and designate the independent external auditors

and risk rating agencies.

Board of DirectorsThe Board is ultimately responsible for the company’s

performance. It establishes strategies and policies

that ensure good management in compliance with

applicable laws and regulations, and periodically re-

views their relevance and efficacy.

The Board acts in compliance with principles of ethics

and corporate social responsibility.

The Board is made up of seven members, including a

Chairperson. The members of the Board of Directors

serve three-year terms and may be reelected indefi-

nitely.

In order to complete its work more efficiently, the

Board has established a series of committees com-

posed of directors and senior management. Each of

these committees has its own bylaws approved by the

board, which set out their specific objectives and func-

tions, members, organization and operation.

These committees have been in place for several

years, and they reaffirm Consorcio’s commitment to

the ongoing strengthening of its corporate governan-

ce. The insurance companies currently have seven di-

rectors’ committees:

Audit Committee

external audit processes.

Investment Committee-

cies, overseeing their implementation and supporting the

-

sistent with policies established in this area.

Risk Management CommitteeSupports the Board of Directors in establishing the Integral Risk

Management System and oversees its implementation.

Strategic Committee-

nitoring compliance with it, and also makes proposals to

the Board regarding the corporate governance structure

and principles to support this strategy. It also proposes

groups.

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People, Ethics and Compliance Committee Ensures that people management is consistent with the

strategy and based on ethics and respect for corporate

values. It also establishes and updates the compliance

policy, monitoring its implementation.

Technical, Commercial and Customer CommitteeProvides support to the Board in relation to stra-

tegies and policies on technical and commercial

matters, as well as those related to customers, and

monitors their appropriate implementation.

Executive Committee Led by the CEO of the insurance companies, this Com-

mittee is responsible for proposing policies and business

strategies to the board and executing them after they have

been approved. In addition, it is responsible for properly

managing the company, protecting the interests of share-

holders and other interest groups.

managers from the following areas:

• Internal Audit

• General Counsel

• Risk Management

• People

• Commercial

• Marketing and Customers

• Technical

• Financial Oversight

• Investments

• Real Estate Business

• Operations and Technology

SHAREHOLDERS’ BOARD

BOARD OF DIRECTORS

EXECUTIVE COMMITTEE

BUSINESS OPERATIONS

Investment Committee

Audit Committee

Risk Management

Committee Strategic

Committee

People, Ethics and

Compliance Committee

Technical, Commercial

and Customer Committee

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2017 INITIATIVES

Principles of Risk Management and Internal Control Systems:In 2016 the Chilean Securities and Insurance Supervisor

(SVS, replaced by the Financial Market Commission, CMF)

issued General Standard NCG No. 408,

which amended and supplemented NCG No. 309 on

principles of corporate governance, risk management

systems and internal control of insurance companies. As

part of the self-assessment on these matters, Consorcio

designed and implemented improvements in 2017, which

help to strengthen its corporate governance.

02.

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Principles of Market Behavior: In October 2017, the former Chilean Securities and Insurance

Supervisor (SVS, now CMF) issued General Standard (NCG)

No. 420, which established the self-assessment of basic prin-

ciples and good practices in the area of market behavior in

the insurance industry (insurers and insurance brokers),

which needs to be developed in four areas:

• Fair treatment of customers

•• Protection of customer information

• Promotion of market development through

transparency

The regulation introduces the requirement for insurance

companies and brokers to perform a self-assessment of the

degree of compliance with the principles established in the

standard, with a frequency of every two years. Once this is

done, they must share the results with the CMF, as well as

their action plan as a result of this assessment.

In light of this, in 2017, insurers in the Consorcio holding ini-

tiated this self-assessment and will determine the need to

The annual report with the results of the self-assessment

March 31, 2018.

Other Initiatives Throughout the year, insurers implemented other

initiatives, including:

• Updating the Code of Ethics and Standards of Con-

duct.

• Formalization of the capital management strategy.

• Creation of a Compliance Committee on an executive

level.

BANCO CONSORCIO

The bank’s Corporate Governance practices are subject to

its statutes, the General Law on Banks, the Law on Corpora-

tions, the Securities Market Law and applicable regulations

of the Chilean Banks and Financial Institutions Supervisor

(Superintendencia de Bancos e Instituciones Financieras

de Chile, or SBIF) and the Chilean Securities and Insurance

Supervisor (SVS).

Banco Consorcio Corporate Governance: • Board of Directors

• • Executive Committee

• Audit Committee

• Higher Committees

• Strategy and Indicators

• Manuals and Procedures

Board of Directors This is the highest authority of Banco Consorcio’s

corporate government. It defines the strategic lines

of the organization and its mission is to maximize

Banco Consorcio’s long-term value. It has all the ma-

nagement faculties that the law does not establish

as exclusive to the shareholders’ board, without re-

quiring the issuance of any special powers for such.

The Board of Directors periodically receives a pre-

sentation on bank management, results and primary

risks, and is kept informed on a regular basis of the

materials examined and approved by the different

bank committees, to which it delegates part of its

functions.

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Main Executive Functions Banco Consorcio has an executive team that oversees

the proper implementation of business policies and stra-

tegies approved by the Board of Directors, and ensures a

proper administration, in line with its mission and vision.

This team is led by the CEO and made up of the following

divisions:

• Retail Banking

• Commercial Banking

• Finance

• Stock Brokerage

• Risk Management

• Operations and Financial Oversight

• Technology

• Legal and Compliance

• Comptroller

• Human Resources

• Development and Management

• Marketing and Customer Services Subdivision

Higher Committees Higher committees are made up of directors and mana-

gement executives. They meet regularly and in varying

intervals. Their nature, functions and activities are de-

termined by both bank needs and legal requirements.

provides the Board of Directors with the information ne-

cessary for a discussion of general policies and guidelines

that govern Banco Consorcio’s business.

proper functioning of internal processes.

Audit and Compliance Committee Its purpose is to review the various areas that involve

maintenance, application and functioning of the com-

pany’s internal oversight systems and compliance with

standards and procedures governing their practice, ba-

sed on a clear understanding of the risks that its business

activities may pose to the institution.

Executive and Management Oversight Committee It guides the bank toward achieving its strategic goals and

objectives and leads the bank’s human capital in order

to satisfy our customers, employees and shareholders. It

with guidelines from the Board of Directors, maximizing

the bank’s value and complying with current laws.

02.

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Its purpose is to define the primary investment stra-

tegies that must be carried out by the money desk,

establish policies and procedures and ensure that the

business areas are correctly implementing the appro-

ved risk management strategy. It provides global ma-

nagement of the bank’s balance sheet and liquidity

and evaluates the main market risks, capital needs

and the implementation of capital policy. CAPA appro-

ves models for measuring liquidity and market risk, as

well as the associated limits.

Operational Risk Committee The purpose of this committee is to coordinate activities to

ensure the appropriate management of operational risks,

business continuity, information security and risks related

to critical suppliers. It authorizes and follows up on the bu-

siness continuity plan, monitors the proper management

of critical suppliers and approves risk exposure within the

limits established by the Board of Directors.

Prevention CommitteeIts purpose is to plan and coordinate activities related to

policies and procedures for preventing money laundering

make decisions about improvements to control measu-

Credit Risk and Collections Committee

Its purpose is to determine policies and procedures that

-

folio quality.

Service Quality and Information Transparency CommitteeIts purpose is to design and oversee the procedures and

strategies for achieving excellent customer service, wi-

Board of Directors.

Business Development Committee Its purpose is to analyze, monitor and recommend the gene-

ration of new business and growth opportunities, to leverage

the corporate strategy and guarantee the growth and develo-

pment of the bank and its subsidiaries.

Human Resources Committee

action that enable issues such as labor law, compliance

with policies, standards and internal processes. It also

establishes all necessary actions to support the develo-

pment of collaborators, thereby facilitating decision-ma-

king processes related to human resources within Ban-

co Consorcio.

Its purpose is to provide credit risk assessment for

amounts above US$ 1 million.

Ethics Committee It ensures compliance with the regulations established in

Banco Consorcio and Subsidiaries’ Code of Ethics, which

aims to promote Principles of Conduct and Attitudes ba-

sed on the Bank’s Values.

Governance in all its subsidiaries.

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Sustainability Consorcio Financiero S.A.’s corporate strategy is based on a

comprehensive and sustainable outlook of its management.

This enables the holding company to achieve satisfactory and

and the community, generating value for its shareholders and

contributing to the development of the country.

30 years ago, Consorcio created Fundación Consorcio to contri-

bute to society from the perspective of Corporate Social Respon-

education to vulnerable children in low-income areas.

Since then, both Consorcio Financiero and its team of employees

have carried out many social responsibility activities related to

education as a development tool. However, in recent years Con-

often arise from the concern of the organization’s employees.

In this scenario, during 2017 the holding decided to formalize the

existence of three areas for its CSR activity: education, inclusion

and the environment.

Although education continues to be the primary direct link be-

tween Consorcio and the community, environmental protection

has grown in importance within the organization as one of the

important issues to be addressed, and the company has started

develops formal recycling campaigns since 2015.

The other issue of concern for Consorcio is inclusion. With a

average Chilean company and it is concerned with expanding

-

sive assessment of facilities to identify gaps in accessibility and

address these.

In addition to this, the company continues to work with various

RECYCLED MATERIAL IN 2017

In 2017, the Lyon, Huérfanos, Forum, Agustinas and Corpora-

461.9 kgPLASTIC CARDBOARD

581.26 kg

PAPER

3,273.7 kgGLASS

5.7 kg

149.3 kgMETAL

17 kgTETRA PACK

Summary

ENVIRON-MENT

CONSORCIO FINANCIERO: CSR AND SUSTAINABILITY AREAS OF ACTION

INCLUSION

EDUCATION

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CHRISTMAS ACTIVITIES

with their stands in the Christmas with a Cause project, which

supports organizations that promote inclusion.

Fundación Minka, Fundación Coanil, Casa de la Fuente, Funda-ción Las Rosas, Fundación Julieta, ONG Plan Bee, Artesanías de Chile, Escuela Especial Reina María / Fundación Descúbreme, Escuela Especial 1857 Juan Wesley / Fundación Descúbreme, Edudown, Amandla, Fundación Inspira

The “Dream Tree” was an initiative developed in December last year,

with the support of Desafío Levantemos Chile, where we invited all

regional employees to carry out social action in their region. Throu-

gh this Christmas activity, employees accompanied children in pres-

Given Consorcio’s CSR focus on education and the necessary deve-

lopment of children, in 2017 Consorcio decided to support Santa

Olga, a town in the municipality of Constitución, in the Maule Region,

-

tral part of Chile in early 2017. The holding therefore decided to

which will replace the Liceo Enrique Mac-Iver school and the Perso-

nitas preschool, which were completely destroyed.

An agreement was signed with the NGO Desafío Levantemos Chi-

le, through which Consorcio contributed Ch$ 1 billion to rebuild the

educational complex, which is in addition to other donations aimed

at helping the local community and supporting children in Santa

Olga children through excellence in education.

The project involves building a school and a kindergarten with a total

surface area of 5,539 m2. The school’s capacity will increase by more

now be able to receive 980. This new school will be multipurpose,

technical education. On September 22, 2017, the groundbreaking

ceremony for construction of the complex was held and it is estima-

5,539 m21,000PROJECT: Construction of an edu-cational complex with a school and kindergarten.

STUDENTS

school, primary and secondary school.

RECONSTRUCTION OF SANTA OLGA EDUCATIONAL COMPLEX

Ch$1 billion Support from Consorcio Financiero for the reconstruction of the Santa Olga school.

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chools, homes for minors and a Haitian settlement, bringing gifts and

food to share and play with them. The action was very well received

on both ends. Participating branches included La Serena, San Fer-

nando, Curicó, Concepción, Chillán, Puerto Montt, Osorno and Punta

Arenas.

40

FUNDACIÓN CONSORCIO

In early 2000, Fundación Consorcio decided to develop,

build and manage a school run directly by the Founda-

tion that would positively impact a high-need sector. The

outcome of this was the formation of the Monte Olivo

subsidized private school in Puente Alto, whose mission

is to provide quality education to children and youth in

the Bajos de Mena neighborhood in the same district.

Since then, Consorcio employees and those of com-

panies in the holding have actively participated in the

school and carried out periodic activities with its stu-

dents, parents, guardians and teachers.

Among other activities, each year those students with an

average score of 6.5 or higher are given an award. Also,

each year outreach is conducted with the school’s alumni

of the holding, to engage them as interns at Consorcio.

Partnership with Belén Educa As part of Consorcio’s work in the area of education,

Consorcio continued its Tutoring Program, which it has

carried out since 2015 in partnership with Belén Educa.

This includes meetings between insurance company exe-

cutives and high school seniors who are deciding their

future in higher education. The program’s mission is to

help students decide to go on to higher education after

leaving school and guide them in their career choice.

25 managers and assistant managers participated in this

program, mentoring students from Monte Olivo School

and Fundación Belén Educa.

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7 alumni undertook internships with the Consorcio group

6,695 m2

built

13,442 m2

of land 3 alumni are currently employed by the Consorcio Group

91 children were awarded for having an average of 6.5 or above

57students took the PSU (scholastic aptitude test)

92%was the average attendance rate

A YEAR OF ACHIEVEMENTS FOR COLEGIO MONTE OLIVO

25STUDENTS PARTICIPATED IN 2017

TUTORING PROGRAMMonte Olivo students and Fundación Belén Educa

1,073

Infrastructure

TOTAL NUMBER OF STUDENTS

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42

Brand Management

The Value of Trust In Consorcio when we say “your life is what moves us”

we are referring to the purpose of our brand, which

seeks to increase approachability with people, build a

long-term relationship with our customers and distri-

inspires the most in the insurance industry.

-

-

dustry, the work carried out by Consorcio in building

trust and preference, has focused on enhancing the

quality and experience of our service, the provision of

clear and transparent information, professional advice

and our ongoing concern to provide a response quic-

kly. These are all highly relevant elements valued by the

more than 2 million customers who have already cho-

This, added to a scenario where consumers are looking

for a higher level of digital interaction in brands, are

more informed and have less brand loyalty, preference

and choice will be determined by those brands that de-

liver the highest value and relevant service experience.

With this in mind, in 2017, new impetus was given to

the Consorcio brand, through the “Reasons to Trust”

campaign. Its goal was to bring visibility to attributes

that create satisfactory service experiences for people

and enhance the relationship and interaction we have

with them at all points of contact. Through concrete

people can entrust the care and protection of what ma-

tters most to them to Consorcio. Among these reasons

and relevant aspects of brand communication are:

• We are a brand with more than 100 years of ex-

perience in the market, providing trust to our cus-

tomers, creating products based on their needs at

each stage of life.

• We give our customers professional advice with trai-

ned executives to help them make the best decision

by providing them with clear and transparent infor-

mation.

• We are a pioneer brand in the development of a wide

-

tforms.

• We are always developing digital tools and solutions

of excellence, with new and better contact channels

to be accessible to our customers and make their li-

ves simpler.

“Reasons to trust” was a successful campaign for Con-

sorcio, successfully conveying the message of trust and

contributing to brand positioning in terms of image and

approachability, making important achievements, such

as:

The consolidation of Consorcio and its leadership in the

industry by achieving Top of Mind (TOM) in the category

its main product lines. In Life Insurance, the brand increa-

sed its TOM to a total of 22% and led this category in the

ABC1 C2 segment. Meanwhile, Auto Insurance saw signi-

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from 12% in 2016 to 18% in 2017.

In the Total Spontaneous Brand Recall indicator, Consorcio

again led the insurance category with 54% of mentions in

improvement in its consideration and recommendation in-

dicator.

This future consideration indicator consolidated its growth

from 16% to 23% in 2017. Likewise, the recommendation

13% in 2016 to 21% in 2017.

In the ABC1C2C3 segment

TOP OF MIND INSURANCE CATEGORY

1st place

Source: 2017 Image and Positioning Study, Cadem.

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44

Insurance Category, in the ABC1C2 segment

TOTAL SPONTANEOUS BRAND RECALL

1st placeLastly, the 2017 advertising campaign achieved greater visi-

bility, reaching 83% of spontaneous advertising recall in the

ABC1C2 and C3 segments.

In turn, our digital campaign, whose main channel was the

our brand communication with a multi-platform focus, resul-

ted in more than 190,000 visits, of which 84% were made

-

tworks performed very well, allowing us to reach more than

3.3 million people.


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These positive results allowed Consorcio to once again achie-

ve leadership in the main brand indicators, standing out as

one of the brands preferred by customers in the insurance

-

ted in an important recognition given to it by both consumers

-

zed as “the Company with the Best Corporate Reputation in

the Insurance Industry at the national level,” an award given

-

ce” category and were also included in the National Ranking

which placed Consorcio Seguros at number 48, among the

100 companies with the best corporate reputation in Chile.

These positive results motivate and drive us to continue en-

suring comprehensive brand management aligned with our

corporate strategy and aimed at the consolidation of our po-

sitioning by establishing long-term trust-based relationships

-

ce and tailored information, with an attitude of approachable,

proactive and timely service, to give customers the tranquility

and protection they seek to enjoy life.

TOTAL CONSIDERATION INDICATOR 16

% 19%

23%

20150%

2016 2017

TOTAL RECOMMENDATION INDICATOR

12%

13%

21%

20150%

2016 2017

Recognition as a “Chile Superbrand” in 2006

and 2013, by the International Council of Tra-

demarks and Consumers.

First place in the insurance companies category in

the 2013 Corporate Reputation Ranking compiled

by Hill & Knowlton Strategies and GFK Adimark.

The Best Customer Experience (BCX) award given

by the company IZO in 2014. This award highligh-

ted Consorcio Seguros Generales as the company

that provided the best customer experience.

“Best Life Insurance Com-

pany in Chile in 2016” awar-

ded for the second time by

the prestigious English ma-

gazine World Finance. The

first time we received this

award was in 2013.

2006/2013

2013

2014

2013/2016

SUPER BRAND CHILE

CORPORATE REPUTATION

BEST CUSTOMER EXPERIENCE

BEST LIFE INSURANCE COMPANY


30%

30%

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03.

We are moved to give you the best solutions to make your life simpler.

Corporate Information


48

Corporate Name: Consorcio Financiero S.A.

Type of company: Private Corporation

Primary activities: Consorcio Financiero participates, through its subsidiaries, in life insu-

79.619.200-3

Telephone: (56-2) 2230 4000

Fax: (56-2) 2230 4050

P.O. Box 232 Agencia 35, Providencia, Santiago, Chile

The purpose of the corporation is the development and

implementation of business and any other activities direct-

ly or indirectly related to owning, buying, selling, renting,

managing and other legal acts associated with any type

-

te purpose, the corporation may acquire and transfer any

title, and give and take on lease or other form of tenure,

all sorts of real estate or personal property; receive and

give out loans, both in domestic and foreign currency, levy

mortgages or pledges of any kind; and generally perform

all acts and enter into all contracts related to the indicated

purposes and development of its purpose or trade. The

Company may enter into and/or hold all kinds of acts or

-

ned in the relevant sections of the Law on Corporations, in

which one or more directors have an interest personally or

as representatives of another person, even if such opera-

tions are not known and previously approved by the board.

All of the above is according to the terms established by

Law N° 18.046 and other relevant legislation.

Articles of Incorporation Consorcio Financiero S.A. was constituted as a limited

1986, signed before Santiago notary public Aliro Veloso

Limitada. The abstract of said public deed was recorded

in the Commerce Registry of the Santiago Real Estate Re-

The company’s name was changed to Consorcio Financie-

ro S.A. through public deed dated September 29, 1999,

signed before Santiago notary public Aliro Veloso Muñoz.

An abstract of said public deed was recorded in the Com-

merce Registry of the Santiago Real Estate Registrar on

November 3, 1999 on page 26,939 N° 21,431 and publi-

order to adjust their objectives to the new requirements

of Law N° 18.045, as recorded in the public deed dated

October 14, 2010, signed before Santiago notary public

Humberto Santelices Narducci. An abstract of said public

deed was recorded in the Commerce Registry of the San-

tiago Real Estate Registrar on October 20, 2012 on page

55,588 N° 38,680 from the year 2010 and published in

increase share capital, as recorded in the following public

deeds:

-

berto Santelices Narducci, whose abstract was recorded


gistrar on page 54,981, N° 38,436 on August 09, 2012,

Corporate Identification

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b) On September 03, 2012, in the Santiago notary pu-

blic Humberto Santelices Narducci, whose abstract was

recorded in the Commerce Registry of the Santiago Real

Estate Registrar on page 64,322, N° 44,773 on Septem-

September 10, 2012.

-

berto Santelices Narducci, whose abstract was recorded


Consorcio Financiero S.A. and its subsidiaries are subject

to the provisions of the Corporations Law (No. 18.046), the

Securities Market Law (No. 18.045), the regulations of the Fi-

nancial Market Commission regulations, Consumer Protec-

tion Law (No. 19.496), the General Banking Law, as well as all

laws and regulations that apply to its lines of business.

PropertyConsorcio Financiero S.A. shareholders as of December

31, 2017:

Shareholders Total Shares

% Ownership Interest

BANVIDA S.A. 57,551,628 42.02

P&S S.A. 57,551,628 42.02

INTERNATIONAL FINANCE CORPORATION 8,057,902 5.88

BP S.A 7,677,553 5.61

CALVERTON SPAIN S L 3,223,161 2.35

EL BOSQUE FONDO DE INVERSIÓN PRIVADO 1,445,096 1.06

TOBALABA FONDO DE INVERSIÓN PRIVADO 1,445,095 1.06

136,952,063 100

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50

Banvida S.A. is a publicly-held corporation controlled by

the Fernández León family and the Garcés Silva family;

P&S S.A. is a private corporation controlled by the Hur-

tado Vicuña family.

and Calverton Spain S.L. joined the ownership team of


IFC is part of the World Bank Group and is the princi-

pal international development institution that focuses

its work on the private sector in emerging market coun-

tries, and Calverton Spain S.L. belongs to the FIG Fund,

a private fund managed by the IFC Asset Management

Company.

Corporate Ownership Since September 29, 1999, two business groups control Consor-

cio Financiero S.A. through a joint action agreement that gives

them 84.04% of the share capital, as of December 2017. This

agreement contemplates the commitment to participate with

identical interest in corporate management and also sets limita-

tions on the free distribution of shares.

Financiero S.A.

Chilean ID Shareholder Shares

96.816.350-7 P&S S.A. 57,551,628 42.02%

96.882.560-7 Banvida S.A. 57,551,628 42.02%

P&S S.A. The individuals behind this controlling member are indicated below:

Hurtado Vicuña Group % indirect shares in P&S

RUT 13,67%

Hurtado Cruzat Family Chilean ID (RUT): 13.67%

5.715.251-6

Magdalena Hurtado Cruzat 10.033.538-7

María Ignacia Hurtado Cruzat 10.726.179-6

15.638.466-6

Victoria Hurtado Cruzat 16.608.849-6

Cristóbal Hurtado Cruzat 17.700.638-6

Hurtado Burr Family 13.67%

Pedro Hurtado Vicuña 6.375.828-0

María Isabel Burr Fabres 5.891.220-4

Constanza Hurtado Burr 14.121.688-0

15.383.697-3

María Luisa Hurtado Burr 16.098.965-3

Pedro Hurtado Burr 17.089.333-6

Ignacio Hurtado Burr 17.704.171-8

Ana María Hurtado Burr 18.396.949-8

Cecilia Hurtado Burr 19.077.271-3

Sofía Hurtado Burr 15.642.623-7

Hurtado Cruzat Family 13.67%

4.773.781-8

Teresa Hurtado Cruzat 10.696.777-6

María Hurtado Cruzat 15.638.825-4

Tomás Hurtado Cruzat 10.160.147-1

Nicolás Hurtado Cruzat 10.160.148-K

Rivadeneira Hurtado Family 13.67%

María Mercedes Hurtado Vicuña 4.332.503-5

María Gabriela Rivadeneira Hurtado 7.018.302-1

Ricardo Rivadeneira Hurtado 10.700.145-K

Ignacio Rivadeneira Hurtado 10.700.238-3

10.700.237-5

María Mercedes Rivadeneira Hurtado 10.862.212-1

Rosario Rivadeneira Hurtado 10.862.208-3

Pablo Rivadeneira Hurtado 15.385.262-6

Tomás Rivadeneira Hurtado 16.080.184-0

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Banvida S.A. The individuals behind this controlling member are indicated below:

Group % indirect shares in

Garcés Silva Group 40.15%

3.984.154-1

María Teresa Silva 3.717.514-5

María Paz Garcés Silva 7.032.689-2

María Teresa Garcés Silva 7.032.690-6

8.745.864-4

Matías Alberto Garcés Silva 10.825.983-3

Andrés Sergio Garcés Silva 10.828.517-6

13.67%

María Victoria Hurtado Vicuña 4.332.502-7 -

María Larraín Hurtado 9.701.863-4 -

9.701.859-6 -

Natalia Larraín Hurtado 13.882.107-2

13.882.108-0

Nicolás Larraín Hurtado 15.385.628-1

Manuel Larraín Hurtado 15.385.629-K

Mariano Larraín Hurtado 15.643.044-7

16.208.152-7

Raimundo Larraín Hurtado 16.608.370-2

Martín Larraín Hurtado 17.086.892-7

Carlos Ignacio Larraín Hurtado 9.701.861-8

Hurtado Menéndez Family 13.67%

4.556.173-9 -

Rodrigo Hurtado Menéndez 22.603.030-1 -

48.168.527-3 -

Diego Hurtado Menéndez 48.113.724-1

Isabel María Hurtado Menéndez 22.228.020-6

Martin Hurtado Menendez 12.798.201-5

40.15%

Eduardo Fernández León 3.931.817-2

4.222.315-8

7.010.379-6

7.010.380-K

9.907.684-4

By virtue of the shareholders agreement signed on Sep-

tember 29, 1999, amended on December 27, 1999, BP

S.A., Chilean ID (Rut) 96.904.900-7, which holds 5.61% in

share capital, can appoint a member to the company’s

board of directors.

By virtue of the shareholders agreement signed on May

27, 2016, International Finance Corporation, Chilean ID

(Rut) 59.120.060-7, and Calverton Spain SL, Chilean ID

(Rut) 59.220.560-2, a company managed by IFC Financial

Institutions Growth Fund, LP, both international orga-

nizations that form part of the World Bank, which hold

5.88% and 2.35% in the share capital, respectively, can

designate a member to the company’s board of direc-

tors. Likewise, this agreement contemplates limitations

on the free distribution of shares.

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52

COMPANY MANAGERS AND KEY EXECUTIVES AND

TECHNICIANSADMINSITRATION CUTIVES AND

MANAGERS

C. VIDA 78 283 407 929 1. 697

BANCO CONSORCIO 42 234 198 313 787

C. GENERALES 14 115 136 23 288

C. DE BOLSA 7 21 25 - 53

C. SERVICIOS - - 34 - 34

CNLIFE - 11 15 - 26

C.FINANCIERO 2 - 2 - 4

WELLBEING - 1 2 - 3

143 665 819 1,265 2,892

As of December 31, 2017, Consorcio Financiero S.A and

its subsidiaries had a total of 2,892 employees, an in-

crease of 3.2% relative to December 2016. The holding

company’s human team is comprised mostly of women

(66.1% of the total workforce). The company’s branch

branches are in Santiago and 21 are located outside of

Santiago and employ 23.7% of the total workforce.

1,911

981

WOMEN

MEN

worked at Consorcio Financiero and subsidiaries

2,892 PEOPLE

as of December 31, 2017

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Organizational Diversity

Female 1,911

Male 981

Total 2,892

Chilean 2,843

Foreign 49

Total 2,892

Under 30 364

From 30 to 40 882

From 41 to 50 887

From 51 to 60 615

From 61 to 70 135

71 and older 9

Total 2,892

Less than 3 years 1,420

Between 3 and 6 years 557



Over 12 years 431

Total 2,892

Salary gap

the General Character Standard N° 386 of the SVS: “In-

dicate the proportion that represents the average base

gross salary, per type of position, responsibility and duty

performed, for female executives and employees in

comparison to male executives and employees.”

PROPORTION OF WOMEN IN COMPARISON TO MEN

Executives 88%

Admin. and business teams 86%

Board of Directors of Consorcio Financiero

Female -

Male 9

Total 9

Chilean 8

Foreign 1

Total 9

Under 30 1

From 30 to 40 -

From 41 to 50 -

From 51 to 60 2

From 61 to 70 3

71 and older 3

Total 9

Less than 3 years 3



Between 9 and 12 years -

Over 12 years 4

9

management

The company’s Board of Directors have received the fo-

llowing remunerations from Consorcio Financiero S.A.,

which has implemented the payments indicated.

Name UF 2017 UF 2016

Bilbao de Raadt, Bonifacio 675.0 -

Büchi Buc, Hernán 900.0 600.0

Büchi Buc, Marcos 1,800.0 1,027.1

Fernández León, Eduardo 900.0 600.0

900.0 600.0

900.0 600.0

Hurtado Vicuña, Pedro 900.0 725.6

300.0 725.6

Mendoza Zúñiga, Ramiro 1,800.0 676.5

Restrepo Sergio 3,600.0 1,504.5

Total remunerations received by key executives at Con-

sorcio Financiero, Consorcio Seguros and Banco Con-

sorcio and subsidiaries amounted to Ch$ 6,835 million

in 2017 (Ch$ 6,294 million in 2016).

Board of Directors of Consorcio Financiero

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Diversity of the Executive Committee (Consorcio Seguros and Banco Consorcio)

Female 4

Male 22

Total 26

Chilean 25

Foreign 1

Total 26

Under 30 (14,958)

From 30 to 40 7

From 41 to 50 9

From 51 to 60 9

From 61 to 70 1

71 and older -

Total 26

Less than 3 years 2




12 years or more 15

Total 26

Executives hired by the company in the same busi-

ness group.

In its role as parent company, Consorcio Financiero S.A.

has business relationships with its subsidiaries. Outs-

tanding current account loans exist between the parent

and subsidiaries, as well as between subsidiaries, all of

which are carried out in conditions equal to those that

normally prevail in the market.

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Acts and Contracts Consorcio Financiero S.A. has neither conducted any

operations with subsidiaries nor held any valid contracts

-

pany’s performance.

Suppliers There are no relevant suppliers worth mentioning. The

-

ditions considering the features of the services required.

Company Real Estate and Belongings The company does not own any real estate.

Trademarks and Patents As the parent company, Consorcio Financiero S.A. does

not hold any registered trademarks in any of the catego-

-

Risk Rating

reported in the Consolidated Comprehensive Income

-

which are also indicated on the aforementioned Com-

prehensive Income Statement. The resulting earnings

are multiplied by the percentage attributable to the ow-

ners of the parent company.

Dividend Policy The dividend policy is established at the Ordinary Sha-

reholders’ Meeting. The corporation established a divi-

dend policy of the distribution of at least 30% of com-

Dividends Paid In 2017, the company paid a dividend of Ch$ 70,000.3

million, or 511.13 Chilean pesos per share. In the last

three years, dividends per share were paid as follows:

2014 Ch$ 185 per share

2015 Ch$ 397 per share

2016 Ch$ 350.9 per share

Share Movements and Stock Market BehaviorCompany shares are not traded on any national and/or

international stock market.

Company Share Transactions There were no company share transactions in 2017.

Material Events for 2017

On March 31, 2017, the Chilean Securities and Insu-

rance Supervisor was informed, in accordance with the

provisions of article 9 and subsection 2 of article 10

of Law No° 18.045 on the Securities Market, that the

Board of Directors agreed to call an Ordinary Meeting

of Shareholders of the company for April 25, 2017, at

11.00 am, at the offices located at Avenida El Bosque

Sur 180, 3rd floor, Las Condes, Santiago, to address

the following subjects:

1. Make a determination on the Balance Sheet, Finan-

cial Statements and the External Auditors’ Report

for the period ending December 31, 2016.

2. Presentation of the dividend policy and procedure

to use in the distribution of dividends.

3. Distribution of profits for 2016 and, if applicable,

distribution of dividends.

4. Renewal of the Board of Directors as established in

article 32, final section of Law 18.046.

5. Establishment of remunerations for the Directors

for 2017.

6. Appointment of external auditors for 2017.

7. Appointment of the company’s risk raters

8. Disclosure of transactions with related parties of

Title XVI of Law No. 18.046 on Corporations.

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56

9. Designation of the newspaper where corporate pu-

blications will be made.

10. Other matters specific to the Ordinary Sharehol-

ders’ Meeting.

On April 25, 2017, the Chilean Securities and Insuran-

ce Supervisor was informed that, on the same date,

at 11.00 am, the Company held an Ordinary Share-

holders’ Meeting, attended by all voting shareholders,

who agreed the following:

1. To approve the Balance Sheet, Financial Statements

and the External Auditors’ Report for the period en-

ding December 31, 2016.

2. To distribute a final dividend of Ch$ 511.13 per sha-

re, paid from net income for 2016. This dividend will

be paid starting on May 05, 2017, to shareholders

recorded in the shareholders register on the fifth

working day prior to this date.

3. To approve the dividend policy for 2017.

4. To approve the Board remuneration policy for

2017.

5. To appoint PricewaterhouseCoopers Consultores,

Auditores SpA y Compañía Limitada as external

auditors assigned to examine accounting, inven-

tory, balance and other financial statements during

2017.

6. To appoint Feller Rate Clasificadora de Riesgo Limi-

tada and Fitch Chile Clasificadora de Riesgo Limita-

da as raters of publicly offered securities issued by

the Company.

7. To approve the operational report for 2016.

8. To select the newspaper “Diario Financiero” to pu-

blish notices regarding shareholders’ meetings and

other corporate announcements.

9. To elect as company Board of Directors for a three-

year term, Marcos Büchi Buc’, Eduardo Fernández

-

ña, Pedro Hurtado Vicuña, Bonifacio Bilbao de Raa-

dt, Hernán Büchi Buc’, Ramiro Mendoza Zúñiga and

Sergio Restrepo Isaza.

On April 27, 2017, the Chilean Securities and Insurance

Supervisor was informed that, in ordinary session held

on April 26, the corporate Board had unanimously

agreed to appoint Mr. Marcos Buchi Buc’ as chairman

of the Board.

On May 25, 2017, in accordance with the provisions of

section II of SVS General Character Standard No. 30,

the company reported to the Chilean Securities and

Insurance Supervisor, in relation to article 9 and clause

2 of article 10 of Securities Market Law N° 18.045, the

following:

• On that date, Series C bonds (BCFSA-C) were placed

in the local market for an amount of UF 2,000,000

(two million UF), with a term of five years and a UF

placement rate of + 1.79%, due on May 15, 2022.

These Series C Bonds correspond to the first is-

suance charged to the 10-year bond line, registe-

red in the Securities Registry of the Supervisor on

March 7, 2017 under No. 854.

• Likewise, on that date, Series E bonds (BCFSA-E)

were placed in the local market for an amount of UF

2,000,000 (two million UF), with a term of 20 years

and a UF placement rate of +2.89%, due on May 15,

2037. These Series Bonds correspond to the first

issuance charged to the 30-year bond line, registe-

red in the Securities Registry of the Supervisor on

March 7, 2017 under No. 855.

• Proceeds from the Series C and E Bond placement

mentioned above will be used to pay short- and me-

dium-term financial liabilities of the issuer.

’

’

’

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Securities and Insurance Supervisor that, on that same

date, the notice of early redemption of the Series A

Bonds readjusted to virtual bearer bonds issued under

the bond line registered in the Securities Registry of

the Chilean Securities and Insurance Supervisor under

N° 749, was published in the “Diario Financiero”, in ac-

cordance with the bond issuance contract dated Sep-

tember 13, 2012, granted at the Santiago notary office

of Humberto Santelices Narducci, under repertoire N°

6,955-2012 and its subsequent amendments; and the

Complementary Deed of Bond Issuance Contract by

Debt Securities Line granted on March 20, 2013 in the

same notary under repertoire N° 2.655-2013. In addi-

tion, Consorcio Financiero S.A. reported that it would

redeem in advance all the Series A Bonds currently in

circulation, under the terms and conditions indicated

in the aforementioned advance redemption notice,

which was attached in a copy.

On August 10, 2017, the Chilean Securities and Insu-

rance Supervisor was informed of the early redemp-

tion, on that same date, of all Series A Bonds read-

justed to virtual bearer bonds issued with a charge to

the Bond Line registered in the Securities Registry of

the Chilean Securities and Insurance Supervisor under

No. 749 that were in circulation, under the terms and

conditions indicated in the advance redemption notice

addition, the company reported that the aforementio-

ned early redemption was made through Banco BICE,

representative of the bondholders, by electronic trans-

fer to the current accounts reported by the holders of

Series A Bonds to Depósito Central de Valores S.A.

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58

Corporate Structure

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CONSORCIO C DE

BOLSA S.A.


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CONSORCIO C DE

BOLSA S.A.


04.

We develop the best products and services to support you in every step of your life.

Financing, Investment and Risk Policy


62

INVESTMENT POLICY

company focused on meeting its customers’ needs in ter-

ms of family prosperity and asset security through its sub-

investments that complement these objectives and faci-

litate their achievement. Consorcio Financiero S.A. does

not have any type of investment policy established in its

bylaws.

FINANCING POLICY

dividends perceived from subsidiary operations, capital

contributions, bond issuance and/or bank loans. Con-

-

cing policy established in its bylaws.

Bonds Consorcio Financiero S.A. currently has bonds issued

at a value of Ch$ 171,126 million, as of December 31,

2016.

Creditor Banks

debts with banks in the amount of Ch$ 17,419 million.

Consorcio Financiero S.A. (CFSA) is the parent com-

pany of a corporate conglomerate; its revenue de-

pends largely on the capacity of its subsidiaries to

distribute dividends. CFSA controls more than 99% of

each main subsidiary’s share capital, giving it the fle-

xibility to establish dividend policies according to its

needs; the subsidiaries’ growth plans; and the avai-

lability of their resources, taking into account that its

subsidiaries are regulated companies that must com-

ply with current regulations.

RISK FACTORS

-

vings and banking, primarily through three insurance

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companies, a bank, a stock brokerage and, indirectly, a

pension fund administrator. These entities are exposed

to risks of varying nature, which are managed by specia-

list units within each entity. These units identify, assess,

mitigate and control risks. They also produce reports

that account for the nature, size and complexity of each

business. All Consorcio Financiero S.A. subsidiaries have

traditionally demonstrated sound solvency positions,

with wide margins relative to regulatory requirements.

-

ted in active and direct shareholder participation on

the subsidiaries’ Boards of Directors and the Directors’

Committees of each entity.

company’s main companies:

CONSORCIO FINANCIERO

Consorcio Financiero S.A. is the parent company of a

corporate conglomerate. As such, its revenue depends

largely on the capacity of its subsidiaries to distribute

-

nancial investments. Consorcio Financiero S.A. has the

-

diaries according to its needs; the subsidiaries’ growth

plans; and the availability of their resources, taking into

account that its subsidiaries are regulated companies

that must always comply with current regulations.

INSURANCE COMPANIES

Market Risk This is the risk of a downturn in the net value of assets

and liabilities from movements in market factors, such

as equity investment prices, interest rates, property as-

sets and exchange rates.

Market risk is managed with a variety of tools, including:

establishing and monitoring an Investment Policy that

sets forth the main guidelines for the investment port-

folio, listing limits by type of instrument, geographic dis-

tribution, economic activity and coverage ratios, among

others. Market risk is primarily assessed by determining

the Value at Risk (VaR) and applying stress tests to the

most relevant risk factors. Life Insurance companies also

Credit Risk Credit risk refers to potential breaches in commitments

by a counterpart or securities issuer in the portfolio, or

deterioration of a securities issuer’s or counterpart’s

credit rating.

For issuer risk, the Credit and Deterioration Policy esta-

blishes internal limits based on external risk ratings and

periodic studies by Consorcio companies. For reinsuran-

ce counterpart risk, a policy has been established to de-

termine the general guidelines and minimum conditions

and credit ratings – for establishing a contractual rela-

tionship with a reinsurer. For derivative instruments and

repurchase agreements, a Derivative Use Plan, which

-

terparts, has been established.

This is the risk of incurring losses due to the absence

reasonable cost to meet payment commitments.

In order to deal with any deviation from budgeted cash

of their portfolio is invested in highly liquid, easily reti-

-

-

bly manage liquidity positions.

Technical Risks Technical risks are inherent to the insurance business.

They may originate in the process of subscribing and

premiums or technical reserves, unfavorable budgeted

pricing deviations, expiry, catastrophes, or reinsurance

credit risk.

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-

cies on subscription and pricing as well as periodically

controlled, Board-approved reinsurance. Moreover,

studied and researched. Various models for assessing

technical risk have been developed. They include analy-

sis of normal and catastrophic scenarios, the application

monitoring policy duration, among others.

Operational and Technological Risks Operational and technological risk refers to the risk of

loss due to failure or inadequacy of internal processes,

people or systems, or as a result of external events. They

can be caused by fraud, implementation errors, unrelia-

ble information, negligence, or catastrophic events such

Creating risk matrices, which includes drafting a detai-

led map of processes and sub processes, illustrates the

-

vements to the internal control system. Management of

these risks is supported by a series of policies as well as

developing and monitoring procedures, operating ma-

as critical.

This is the risk arising from a breach in laws or regula-

tions that govern this business. It also includes the risk

of adverse regulatory changes.

Legal and regulatory risk is mitigated primarily through a

-

lated roles and responsibilities within the companies.

Likewise, the risk management responsibilities of key

-

nance Code.

Strategic Risks Strategic risks arise due to the absence of appropriate

strategy, failure in design and/or implementation of co-

herent business plans, or inability to adapt to new en-

vironmental conditions. This risk category also includes

the deterioration of market conditions and group risk,

which refers to loss exposure resulting from belonging

to the Consorcio Financiero holding.

The companies’ current Corporate Governance Struc-

ture allows these risks to be duly mitigated. The structu-

re is based primarily on various Directors’ Committees,

which serve as opportunities for the Board of Directors

and senior management to discuss and analyze the

companies’ key issues and matters. The Strategy Com-

mittee is responsible for monitoring compliance with

strategy, along with a robust, thrice-yearly business

planning process. Compliance is thoroughly analyzed

at the monthly Board meeting.

BANCO CONSORCIO AND SUBSIDIARIES

Credit Risk Credit risk refers to the risk of experiencing capital los-

ses due to the breach of an obligation by a Bank debtor.

Banco Consorcio’s risk management and control model

is characterized by adequate segregation of roles and

responsibilities, with active participation by the Board of

Directors and senior management. The Bank also has

-

nesses and/or segments in which the entity is present:

retail banking, including consumer credit, and corporate

banking.

Each business segment is assessed in accordance with

its characteristics. On one hand, the retail banking seg-

ment applies mass assessment systems and statistical

credit scoring models, while the corporate segment uses

an individual assessment process, in which senior mana-

gement and directors are highly involved.

Additionally, the bank mitigates credit risk by securing

real and personal guarantees as well as establishing

some maximum concentration limits by debtor, industry

segment and company size.

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For the purpose of anticipating possible future losses,

the bank has established a provision policy that seeks

portfolio. For retail banking, provisions are established

on the basis of statistical models that estimate expec-

ted loss over a period of time. For corporate banking,

provisions are established on the basis of an individual

-

city.

-

sessments and autonomous, external risk ratings to

measure the probability of not collecting from issuers.

For derivative instruments, credit risk is limited to the

fair value of those contracts favorable to the bank (ac-

tive position) plus potential risk, which is estimated as

a percentage of the notional value of the contract and

depends on the residual term of the contract.

Given the importance of prudent liquidity management

in a banking institution, Banco Consorcio has approved

and implemented a liquidity management policy for lo-

cal and foreign currency. The policy is consistent with

operations, and is in accordance with current legal and

regulatory requirements.

There are four conceptually distinct types of liquidity

risk, risk related to: daily liquidity, funding or structural

liquidity, trading liquidity and market liquidity. Each of

these types of risk is actively managed through maxi-

liquidity indicators, as appropriate. Each of these tools

is monitored and controlled by management, as well as

the Assets and Liabilities Committee, on which the direc-

tors participate.

Various tools are used to measure and monitor liquidi-

ty risk, distinguishing between normal market situations

and stress scenarios. In normal scenarios, the Bank uses

maturity by term and counterpart, in addition to liqui-

dity ratios, which primarily indicate the bank’s relative

position in terms of liquid assets and volatile liabilities.

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For stress scenarios, monthly tests are applied to assess

the bank’s ability to fare extreme instances of illiquidity.

Furthermore, early alert indicators are used to trigger Illi-

quidity Contingency Plans, if necessary.

Market RiskMarket risk management is one of the cornerstones of

and liabilities are not valued according to market value,

but according to amortized cost. Risks arise as a result

of possible mismatches, both in amount and term of ba-

lance sheet assets and liabilities. The following risks are

especially relevant: interest rate risk, foreign currency risk

and indexation risk.

For trading activities, risks primarily arise from market

to take advantage of the arbitrage opportunities that re-

sult from the imbalance of market prices, taking positions

or earning accrual income through the acquisition of

especially relevant: interest rate risk, foreign currency risk

and indexation risk.

The bank uses various methods to monitor and mea-

sure these risks. It applies the current regulatory mea-

surements, particularly for interest rate and indexation

risk for the banking book (C40) in short- and long-term

operations. It also applies measurements such as value

at risk, interest rate sensitivity measurements, PV01 and

maximum indexed currency exposure.

The bank conducts stress testing to estimate losses in the

face of extreme changes in the structure of interest rates

and foreign currency parities. It also applies retrospective

risk model.

Operational Risk -

losses, arising from system failures, human error, fraud or

external events.

The bank and its subsidiaries recognize that the elimina-

tion of all operational risks is impossible, but it has imple-

mented a supervision and control framework to mitigate

duties, access restrictions to authorization procedures,

reconciliations, training, personnel evaluation, and internal

audit, whilst adopting best practices and involving all units

within the bank.

Notwithstanding the aforementioned, Banco Consorcio

and subsidiaries have an inherent and residual risk assess-

ment built into their operational and technological proces-

ses, in order to mitigate with action plans those that are

above the accepted risk threshold. They also have opera-

tional and technological contingency plans for their activi-

also have a management and control model for all critical

information assets.

This ensures that there is management and analysis of all

detected nonconformities and registered loss events, as

well as plans to correct their causes. Monitoring, control

critical through periodical visits and control of continuity

plans, and compliance with existing information security

policies is reviewed.

All Consorcio Financiero

traditionally demonstrated sound solvency positions, with wide margins relative to

regulatory requirements.

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Company Information and

Capital

Related Company

% Annual Change in

or Related Company

Corporate Name:Chilean tax I.D. ThCh$

Current % Owner

Parent

Current %

Owner

Related Company

Total

% Change in Owners

Parent

% Change in Owner

Related Company

Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A.

99.012.000-5 Private Corporation

Life Insurance Policies 166,185,019 99.91% 0.00% 99.91% 0.01% 0.00%

CN Life Compañía de Seguros de Vida S.A.


Life Insurance Policies 53,644,951 16.72% 83.28% 100.00% 0.00% 0.00%

Banco Consorcio and Subsidiaries


Bank 356.571.629 67,80% 32,20% 100,00% 0,00% 0,00%

Compañía de Seguros Generales Consorcio Nacional de Seguros S.A.


General Insurance Policies 13,548,584 99.99% 0.01% 100.00% 0.00% 0.00%

CF Overseas Foreign Limited Liability Company

Development and operation of investments as well as real estate and transferable securities operations

6,607,528 99.99% 0.01% 100.00% 0.00% 0.00%

CF Inversiones Perú S.A.C. Foreign Private Corporation

Development and operation of investments as well as real estate and transferable securities operations

37,327,580 99.99% 0.01% 100.00% 0.00% 0.00%

Consorcio Inversiones Financieras SpA

76.155.778-5 Company

Investment company and investor in transferable securities in general

2,032 100.00% 0.00% 100.00% 0.00% 0.00%

Consorcio Servicios S.A. 96.989.590-0 Private Corporation

and administrative advisory services, commercial inf., collection services

269 99.50% 0.50% 100.00% 0.00% 0.00%

Consorcio Inversiones Limitada

96.983.020-5 Limited Liability Company


77,777,985 99.99% 0.01% 100.00% 0.00% 0.00%

Consorcio Inversiones Dos Ltda.

78.008.540-5 Limited Liability Company


79,874,168 99.99% 0.01% 100.00% 0.00% 0.00%

Inmobiliaria Punta Pite S.A.


Purchasing, sale and lease of owned or rented property

467,565 0.00% 100% 100.00% 0.00% 0.00%

Inmobiliaria Lote 18 S.A. 76.098.056-0 Private Corporation


963,810 0.00% 84.40% 84.40% 0.00% 0.00%

Constructora e Inmobiliaria Presidente Riesco S.A.



34,572 0.00% 85.13% 85.13% 0.00% 0.73%

LVCC Asset Management S.A.



1,713,455 25.00% 0.00% 25.00% 0.00% 0.00%

Inversiones Continental Bio-Bio SpA

76.515.767-6 Company


1,003,500 0.00% 60.00% 60.00% 0.00% 0.00%

INFORMATION ON CONSORCIO FINANCIERO S.A.’S SUBSIDIARIES, AFFILIATES AND INVESTMENTS IN OTHER COMPANIES

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Consorcio Nacional de Seguros S.A.

Chairman Chilean

Marcos Büchi Buc

Board of Directors Executive Committee

Eduardo Fernández León Rodrigo Andalaft González

Carlos Camposano González

Marcela Cerón Cerón


Francisco Goñi Espíldora

Felipe Silva Méndez Ricardo Ortúzar Cruz

Ricardo Ruiz Kvapil

Christian Unger Vergara Luis Eduardo Salas Negroni

Renato Sepúlveda Díaz

Raimundo Tagle Swett

Chairman Chilean

Marcos Büchi Buc








Ricardo Ruiz Kvapil




MAIN DIRECTORS AND MANAGERS

Seguros S.A.

Chairman Chilean

Marcos Büchi Buc








Ricardo Ruiz Kvapil




4. Banco Consorcio

Chairman Chilean

Patricio Parodi Gil


Cristián Arnolds Reyes Fernando Agüero Aguirre

Richard Büchi Buc

Cristián Cox Vial Gonzalo Gotelli Marambio

Álvaro Larraín Prieto


Ana María Rivera Tavolara Ramiro Méndez Montes

Francisco Nitsche Casado

Francisco Ignacio Ossa Guzmán Andrea Rodríguez Abásolo

Francisco Pérez Ojeda

Gonzalo van Wersch M.

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70

5. Consorcio Corredores de Bolsa S.A.

Chairman Chilean TAX ID


Board of Directors

Andrea Godoy Fierro

Gonzalo Gotelli Marambio

Ramiro Méndez Montes


Francisco Pérez Ojeda

6. Consorcio Tarjetas de Crédito S.A.

Chairman Chilean

Patricio Parodi Gil

Board of Directors

Cristián Arnolds Reyes

Richard Büchi Buc

Cristián Cox Vial


Ana María Rivera Tavolara

Francisco Ignacio Ossa Guzmán

DIRECTORES YGERENTES PRINCIPALES

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04.

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Chairman Chilean

Fernando Larraín Cruzat

Board of Directors

Leonidas Vial Echeverría

Patricio Parodi Gil

de Fondos S.A.

Chairman Chilean

Pablo Mario Castillo Prado

Board of Directors

Fernando Barros Tocornal

Antonio Recabarren Medeiros

Santiago Larraín Cruzat

Eduardo Walker Hitschfeld

Ladislao Ignacio Larraín Vergara

Chairman Chilean

(*)

Board of Directors

Fernando Agüero Aguirre


Verónica Ruz Pascual

Luis Eduardo Salas Negroni


Isabel Margarita Romero Muñoz

(*) Presented resignation from Board on December 27, 2017.

10. CF Inversiones Perú S.A.C.

Chairman Chilean

Chairman Chilean TAX ID 20454073143

Andreas von Wedemeyer Knigge

Vice Chairman

Manuel Bustamante Olivares

Board of Directors

Marcos Büchi Buc

Fernando Kutsuma Noda


Christian Unger Vergara

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727272


05.Economic and Financial Environment We advise you with our expert team to help you make the best decision.


74

In 2017, maintenance of expansive monetary policies

in the main economies enabled the ongoing favorable

growth observed since mid-2016. The global economy

grew by more than 3.7%, achieving the highest syn-

chronized growth of global GDP since 2010 (post-cri-

sis). The world has shown strong momentum, with a

rebound in developed economies’ inflation, domestic

demand and activities. Announcements of decreased

taxes in the United States, with the reform approved

in December, led to great expectations and impacts on

the American stock market throughout the year.

On the other hand, emerging markets were consoli-

dated as their economies rebounded. Fears of a po-

tential hard landing in the China economic cycle were

dissipated and initial indicators showed an increase

in consumer trust in different countries. This led to

a change in the trend of countries intimately related

to commodities, such as Brazil and Chile. An example

of this was the price of copper, which rose more than

30% during the year.

Oil was another key player. Synchronized global grow-

th of the main economies, adverse climatic events, the

extension of OPEC production treaties and geopolitical

tensions pushed the price of oil up by more than 16%,

reaching US$ 66 a barrel. This helped global inflation

to rebound, which has been viewed favorably by the

market.

In summary, we see economies returning to full emplo-

yment levels, with an increase in nominal wages and

inflationary pressures that, while on the rise, are con-

tained. The conditions and financial context are favo-

rable, with high liquidity levels, rising variable income

and low long-term debt costs.

Estimates Projections

2016 2017 2018 2019

Global Growth 3.2 3.7 3.9 3.9

Developed Economies 1.7 2.3 2.3 2.2

United States of America 1.5 2.3 2.7 2.5

Eurozone 1.8 2.4 2.2 2.0

Developing Economies 4.4 4.7 4.9 5.0

China 6.7 6.8 6.6 6.4

Brazil -3.5 1.1 1.9 2.1

Mexico 2.9 2.0 2.3 3.0

Chile 3.0 3.2

Source: World Economic Outlook

Market expectations on the Federal Reserve’s pro-

bable course of action were well-founded. The three

increases in monetary policy rates made by the FED

during the year, the last of them in December, resul-

ted in an increase in the return of Treasury bonds as

of August 2017. This, added to higher inflation data

in the US market, produced steeper return curves

for American bonds, especially short-term Treasury

bonds. (Data since 2016).

International Scenario

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the expansive bias of the Central Bank in late 2016, which

translated into a 100-point drop in the monetary policy

the target range. As the market became convinced of the

impending victory of a pro-market candidate, expectations

as well as the long-term rates of sovereign bonds, expe-

drop in these bond spreads, mainly due to a low level of

corporate bond placements in the local market, an amount

that decreased by 24% with respect to the previous year.

TREASURY RETURNS

01-2

016

03-2

016

05-2

016

05-2

017

07-2

016

07-2

017

09-2

016

09-2

017

11-2

016

01-2

017

03-2

017

11-2

017

3.53

2.52

1.51

0.50

TREASURY 5Y TREASURY 10Y TREASURY 30Y

CORPORATE BOND SPREADS

1.8

1.6

1.4

1.2

1

0.8

0.6

0.4

0.2

0

RISK A RISK AA RISK AAA

19-1

2-17

30-1

0-17

10-0

9-17

22-0

7-17

02-0

6-17

13-0

4-17

22-0

2-17

0.99

0.69

0.54

1.55

1.14

0.89

03-0

1-17

3.7%, achieving the highest synchronized growth of global GDP

since 2010 (post-crisis).

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76

Investment Management FIXED INCOME

Seizing Opportunities -

zed the opportunity that arose due to the abundant liquidity

foreign currency portfolio issuers in insurance companies,

over US$ 390 million. In contrast, positions were taken by

investing in bonds issued in currencies other than the US

Dollar, such as the euro and the British pound, to take ad-

vantage of interest rate hedges, thereby obtaining very at-

tractive UF accrual levels. Consorcio bought bonds issued

outside Chile for an amount over US$ 500 million. Of these,

73% are international issuers and the rest are national.

In the local market, the company took advantage of oppor-

tunities to invest through private loans to national compa-

nies with good credit ratings, along with the completion of

contributions committed in syndicated loans.

VARIABLE INCOME

Good Returns in all Markets 2017 was a year with minimum volatility in developed

stock markets, as seen in index VIX. Geopolitical tensions

-

ments by the US government were counteracted by fa-

vorable corporate reports mainly in the United States,

where technology companies were among the main dri-

vers of the US indices. This lower volatility was also su-

pported by important political elections such as those in

the Netherlands and France, where the wave of populism

succumbed to the election of more moderate represen-

tatives, such as Mark Rutte and Emanuel Macron.

S&P 500

VIX

01-2

017

01-2

017

02-2

017

02-2

017

03-2

017

03-2

017

04-2

017

04-2

017

05-2

017

05-2

017

06-2

017

06-2

017

07-2

017

07-2

017

08-2

017

08-2

017

09-2

017

09-2

017

10-2

017

10-2

017

11-2

017

11-2

017

12-2

017

12-2

017

2,800

2,700

2,600

2,500

2,400

2,300

2,200

2,100

504540353025201510

50

Points

Points

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IPSA

01-2

017

02-2

017

03-2

017

04-2

017

05-2

017

06-2

017

07-2

017

08-2

017

09-2

017

10-2

017

11-2

017

12-2

017

6,000

5,500

5,000

4,500

4,000

3,500

3,000

A rise was seen in emerging markets. On a regional le-

markets with increases of 42.3% in Argentina, 46.2% in

Chile, 14.6% in Colombia and 26% in Brazil, all measured

in US dollars. Markets were highly dependent on the po-

litical situation. On a local level, the presidential elections

set the tone, in which Sebastián Piñera, a pro-market

candidate, was elected by a wide margin. In Brazil, the

noise made by its current president, Michel Temer, do-

minated the agenda, and the volatility of both the equity

as President Mauricio Macri implements a process ba-Consorcio’s consolidated exposure in local variable income

was 5.5% of the company’s total portfolio in 2017, compared to

4.8% the previous year. On an international level, it rose from

4.8% to 5.9%.

ALTERNATIVE ASSETS

Consolidation and Growth 2017 was a very positive year for the alternative assets

program of Consorcio Seguros Vida and CN Life. For the

-

bility, reaching double digits, which shows a maturity and

consolidation of funds.

The global alternative assets market was dominated by

a decrease in the speed of calls for capital committed by

contributors and an increase in the use of bridge loans or

of low interest rates. Furthermore, distributions have been

higher due to excess liquidity that has increased the va-

lue of assets worldwide, boosting sales operations of the

underlying assets in which the funds are invested. Likewi-

se, the greater liquidity of markets has allowed alternative

fund managers to increase the sizes of new funds placed

at record levels, leading to fund sizes that are as much as

double the size of previous funds.

In keeping with the goal of attaining 5% of the portfolio in

this type of assets, during the year the company signed 25

new commitments for a total of US$ 268.2 million between

the two companies (US$ 242.8 million Consorcio Seguros

de Vida and US$ 25.4 million CN Life Seguros de Vida) in

secondary buyout, and private debt, among others. The cu-

rrent program exposure is 4.2% of the portfolio.

-

were signed with funds tied to the technological sector:

one through a Venture Capital fund and another with re-

gional resources focused on Asia. During the year, com-

mitments were signed with 11 new fund managers at the

highest level within the world of alternative assets, which

contributes to greater access to investment alternatives by

companies.

At the close of 2017, the life insurance companies have

jointly signed pledges for over US$ 1,000 million, US$ 482.7

million of which have been disbursed.

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EXPOSURE IN ALTERNATIVE ASSETS

2013 2014 2015 2016 2017

NAV PRIVATE EQUITY CN LIFE

NAV PRIVATE EQUITY CNS VIDA

500

400

300

200

100

0

USD million

Source: Company

PROPERTY INVESTMENTS

Consorcio has an important presence as investor and

US$ 1,800 million in property investments in its three

in property development.

10% in the portfolio stock, reaching a 57% share of

the real estate portfolio at the end of the year. It is a

healthy portfolio, up to date in terms of payment com-

pliance, and it expects to keep growing and continue

payment behavior in 2018.

Investments in Consorcio real estate projects through

-

have been adapted to new market trends.

Housing Market Due to the behavior of Chilean real estate develop-

ment, an important part of the investment occurs in

the Greater Santiago area, a market that sold 31,942

units (ThUF 139,890) in 2017 - with no major varia-

tions between the four quarters of the year - which

represented a drop of 6,4% in units sold in 2017 ver-

sus those registered throughout 2016. Due to the

aforementioned, and to the arrival of new projects,

the months to exhaust the saleable units were in-

creased to 19, which is explained by the 27% increa-

se in stock throughout the course of the year, ending

in 43,004 units, equivalent to ThUF 187,637.

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17,500

15,000

12,500

10,000

7,500

5,000

2,500

0

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

FIRST SECOND THIRD FOURTH

8,0327,9608,0817,869

QUARTERLY SALES IN THE GREATER SANTIAGO AREA Units - (March 2013 – December 2017)

QUARTERLY SALES IN THE GREATER SANTIAGO AREA Thousands of UF - (March 2013 – December 2017)

20172016201520142013

FIRST SECOND THIRD FOURTH

32,54436,056 35,322 35,965

Source: Gfk Adimark – Territorial Studies Area

Source: Gfk Adimark – Territorial Studies Area

20172016201520142013

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80

In terms of demand, last year confirmed the predo-

minant housing market trend in Greater Santiago for

apartments over houses, representing 87% of new

stock for sale by late 2017, reducing the available indi-

vidual housing units to 5,612 units.

A relevant player in the already mentioned conforma-

tion and densification of the city has been the increase

in commute times and growth of the Santiago metro

network, with 117 km developed to date and 30 km

that will be inaugurated in line 3 and extensions to li-

nes 2 and 6 between 2018 and 2019.

The variation in stock of immediately available units

increased from 2% in December 2015 to 14% in De-

cember 2017, which reflects an inconsistency with the

sustained increase in the price of homes in the last

year. Therefore, the price increase is not sustained by

the increase in demand, but rather by fundamental

variables, such as the scarcity of land, increased deve-

lopment costs and terms, greater regulatory/legal res-

trictions, on both a regional and a municipal level, and

contained financial costs, which gives agents greater

capacity to find the best time to sell, without adjusting

prices to stimulate demand.

68.1

54.6

UF/M2

UF/M2

APARTMENTS

HOUSES

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

HOUSES APARTMENTS

AVERAGE SALES VALUE IN UF/M2 FOR NEW HOUSES (1994 – December 2017)

80

70

60

50

40

30

20

Although the demand for housing fell with respect to 2016,

in terms of the minimum down payment when purchasing

property), low unemployment level and control of general

market variables that are within reasonable limits.

With the support of investors in Santiago, Estación Central,

Ñuñoa and San Miguel, sales have remained stable, with a

construction engine that provides opportunities and gene-

rates activity in the Chilean market.

2017 was undoubtedly a challenging year in terms of legis-

lative certainty for the projects that were approved and/

or carried out - as was also seen in other areas of the eco-

nomy. This brought delays and increased risks to projects

and, as a result, impacted their costs. These days, real es-

tate companies not only need to worry about market con-

ditions and associated costs, but also about the potential

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OFFICE MARKET

-

ring the year, reducing the available stock and increasing

the absorption levels required by rental companies. This

meant that Consorcio was able to show healthier levels

than the market in terms of vacancy.

2017, was 4.6 million m2, which represents 3% more than

2016. Of this total number, 2.2 million m2 represents Class

-

rated during the previous period, which helped the market

absorb the available surface area. The districts that most

increased their stock last year were: Santiago, Providencia

and Vitacura, with 9%, 7% and 7% respectively (Source: Re-

search, CBRE).

On the demand side, net absorption accumulated 165,652

m2, 4.7% higher than in 2016, keeping the downward

B reached 9.6%, providing a weighted percentage of 7.9%

to the market at the end of the year.

to 2016, with an average of 0.48 UF/m2, however, when

have an average upwards price adjustment, reaching 0.53

UF/m2. This is because the vacancy of this asset class is

around 6.1%, i.e., close to the vacancy balance of the asset

itself.

-

ment, with 0.43 UF/m2, which, in turn, is based on their

high vacancy percentage (9.6% of surface area).

-

ket corresponds to 2.1% of the total stock, with greater ex-

posure in the municipalities of Las Condes and Santiago

for class A and Huechuraba for class B.

The average vacancy of Consorcio assets is 2.5%. If we se-

(000s,m2) (%)

Source: CBRE Research, 4Q 2017; Instituto Nacional de Estadísticas, Banco Central de Chile, 4Q 2017. Estimated GDP for 4Q.

NEW OFFERS CLASS A+B (M2) NET ABSORPTION CLASS A+B (M2)

VACANCY CLASS A+B (%) UNEMPLOYMENT (%) GDP (%)

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06.Business Management

We offer the services you need for your security, protection, savings and financing.



Insurance and Pensions

Consorcio Seguros Board of Directors

Consorcio Seguros Executive Committee

Mission, Vision and Values

Human Capital

Customer Management

Business Performance

• Consorcio Seguros Vida

• CN Life Seguros Vida

• Consorcio Seguros Generales

06 Business Management

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06.

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Board of Directors Consorcio Seguros

Juan Hurtado VicuñaDirector

Chilean Tax ID 5.715.251-6

Civil Engineering Degree



September 29, 1999

Eduardo Fernández LeónDirector



de Chile


September 29, 1999

José Antonio Garcés SilvaDirector


Businessman


September 29, 1999

BOARD OF DIRECTORS


INSURANCE / PENSIONS

Marcos Büchi BucPresidente


Structural Civil Engineer



December 30, 2014

Pedro Hurtado VicuñaDirector


Industrial Engineer



April 28, 2011

Felipe Silva MéndezDirector




Administration University of Chicago


April 27, 2016

’

Director

Chilean Tax ID 5.543.624-K


de Chile


September 29, 1999

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Executive Committee Consorcio Seguros06.

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Christian Unger Vergara

Insurance CompaniesChilean Tax ID: 9.483.395-7

Industrial Civil Engineer


In role since: November 1, 2017

Rodrigo Andalaft GonzálezTechnical Manager Chilean Tax ID: 11.841.022-k

Civil and Computer Engineer



Administration

Universidad de los Andes


Carlos Camposano GonzálezCommercial Manager Chilean Tax ID: 8.897.012-8


Universidad de Concepción

Marcela Cerón CerónRisk Control Manager Chilean Tax ID: 6.001.382-9


de Chile


Administration, Wharton School,

University of Pennsylvania Actuary,

CEA, France

Jorge Fuenteseca ValenzuelaFinancial Manager Chilean Tax ID: 11.817.795-9


de Chile.


Francisco Javier Goñi EspíldoraAudit Manager Chilean Tax ID: 8.173.825-4



In role since: February 1, 2007


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Ricardo Ortúzar CruzReal Estate Business Manager Chilean Tax ID: 12.855.410-6


de Chile

Ricardo Ruiz KvapilOperations and Technology ManagerChilean Tax ID: 9.974.319-0

Computer Civil Engineer

Universidad de Santiago

In role since: October 1, 2012

Luis Eduardo Salas NegroniPeople Manager Chilean Tax ID: 9.704.080-K

Psychologist Universidad Diego

Portales


Renato Sepúlveda DíazInvestment Manager Chilean Tax ID: 10.603.621-7

Electrical Civil Engineer


Masters’ Degree in Economy


Master’s Degree in Business Admi-

nistration, University of Chicago

Raimundo Tagle Swett Marketing and Customer Services Manager Chilean Tax ID: 10.063.614-K


de Chile


Administration

Universidad Adolfo Ibáñez

Guillermo Valenzuela BritoGeneral Counsel Chilean Tax ID: 13.687.656-2

Attorney

de Chile

Master’s Degree in Law and

Economics, University of

Utrecht, Netherlands

In role since: February 1, 2015

90

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To be a leader in the insurance industry and a major player in savings, generating adequate returns in all business lines.

-vices, enabling our customers to meet their requirements for

We create value for our shareholders, building trust-based

role as a good corporate citizen.

-zation to develop their full potential in a challenging working environment where respect for our values is demonstrated.

Vision

Mission

Values Integrity: Ethics, transparency and honesty are part of our work.

Excellence: We always strive to do a good job characterized by quality.

Respect: -mitments and we comply with company rules.

Cooperation: We participate actively in our team and con-tribute to other areas to achieve company objectives.

Proactiveness: We set challenges for ourselves and take the initiative to make improvements that contribute to our work and that of others.

We are open and adapt to new ideas, procedu-res and practices that add value to our performance and to Consorcio.

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92

Consorcio provides an environment where people in the

organization can develop their full potential in a challen-

ging working environment that respects the company’s

values.

To carry out this mission, over the last few years, human

resource management has been organized around 10

areas of work. The development approach constructively

integrates the company which, on the one hand, creates

the development opportunity, by providing training tools

and generating career options within the company, and

the employee, who as a counterpart understands the in-

dividual responsibility of each team member who wants to

grow personally and professionally in Consorcio.

Proof of Consorcio’s real commitment to internal develo-

pment is the appointment of Christian Unger, in 2017, as

CEO of Consorcio Seguros. At the time of his appointment,

he was Technical and Financial Oversight Manager, and he

became the third executive to move into a senior mana-

gement position from within the company, thereby gene-

covered by career executives from within the company.

ADULT LEARNING

Within the context of the work of the Organizational

Development department, Consorcio has evolved from

a concept of training and orientation, to one of adult

learning. This change responds to the complexity of the

environment and the business, which demands people

with more training. To support this initiative, Consorcio

is promoting learning processes that encourage the be-

havior required to meet the company’s strategic goals,

especially in a dynamic and constantly changing environ-

ment.

training alternatives to increase job skills.

In 2017, the Management Skills and Personal Skills di-

ploma program continued, through Universidad Adolfo

Ibáñez (UAI), geared towards management and admi-

nistrative positions, respectively. In total, 99 people re-

ceived their diploma in 2017 and another 357 people

through UAI eClass .

TRAINING 2017

A training app was developed to build on opportunities

available through technological developments. This app

includes the welcome program among its contents. New

employees can take orientation courses either on the web-

site or on this new app.

New learning support resources have been added, such

as WhatsApp groups in parallel to the courses, which par-

ticipants can use to communicate with instructors and ask

questions.

-

School for Parents program, to provide tools and develop

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2,269PEOPLE TRAINED

150,869HOURS OF TRAINING ATTENDED

15 talks on quality of life 7 in Santiago4 in Concepción 4 in Viña del Mar

460 people attended at least one talk, including Santiago and Regions, and 138 attended at least four.

Children of employees who attended “A Day at Consorcio”: 453 children participated nationally, 87 in Santiago and 366 in regions.

Longevity Award Overall, 119 people were awarded (67 in Santiago and 52 in regions), who have been at Consorcio for at least 10 and up to over 30 years.

skills associated with the role of being a parent today. This

is a clear indication that, for Consorcio, the development of

each person’s full potential goes beyond strictly work-rela-

ted skills.

topics and topics of general interest, proposed by the em-

ployees themselves. These addressed diverse topics such

as stress management, bullying, healthy eating, being fe-

male in today’s world, responsible pet ownership and po-

sitive imagination.

-

(“futbolito”) internal championship was held, which inclu-

ded the participation of seven teams. The company also

participated in the 2017 Insurance Olympics, ranking se-

cond place overall. This competition included the participa-

football, swimming, volleyball, tennis, table tennis, bowling,

karting, board games and talent show.

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94

DESTACA (SPOTLIGHT) PROGRAM

The “Destaca” program forms part of the actions designed for

developing a positive work environment. This recognition pro-

gram was launched in April 2017 and its most visible element is

a mini-website where people can enter and publicly celebrate

any other company employee who upholds Consorcio values.

Employees can use this site regardless of the position or physi-

cal location of the person being recognized.

The basis of “Destaca” is that recognition does not necessarily

have to come from the company or direct supervisor, since

everyone, peers, supervisors and subordinates, can recogni-

ze positive attitudes or actions in others every day. This is why

Consorcio has provided this methodology and platform for

acknowledging fellow employees. The application of this pro-

gram had very positive results, which were supported by the

results of the employee climate survey, which once again went

up, consolidating its positive levels.

FIRST CONSORCIO CENSUS

To ensure greater, more up-to-date knowledge of ever-

yone who works at Consorcio, in 2017, the company

for updating information on employees, expanding the

realm of information to include data such as travel time

to and from work, means of transportation used and

hobbies, among others.

413PEOPLE RECOGNIZED THROUGH THE SPOTLIGHT (DESTACA) PROGRAM

EVERYTHING FOR THE PEOPLE

The main objective behind this is to keep people at

the center. This refers to Consorcio employees, cus-

tomers and the community. In this context, as part of

2017 management, Consorcio emphasized the impor-

tance of placing the customer at the center of its de-

velopment strategy.

These three pillars, people, customers and communi-

ty, form the basis of “Our Consorcio World.” Through

this pillar, the company plans for a sustainable future,

building long-term relationships with its main interest

groups, generating value for shareholders and contri-

buting to the development of Chile.

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ACKNOWLEDGEMENTS

Human Resources management within Consorcio

was once again acknowledged in 2017, when the or-

ganization was awarded with two distinctions in the

MERCO TALENTO study.

Merco Empresas distinguished Consorcio as among

the 50 companies with the best corporate reputa-

tion in Chile, obtaining first place in the Merco Ta-

lento sector ranking. This international ranking me-

asures the central characteristics of a company to

attract and retain employees. It evaluates the quality

of the working environment and aspects related to

companies’ internal and external reputation. In Chi-

le, one hundred companies are ranked.

SUPPORT TO COANIQUEM AND FUNDACIÓN SONRISAS

The insurance companies support the community in

diverse ways. One of these is their historic alliance

with Coaniquem. Through this alliance, which has

been ongoing for over 12 years, Consorcio provides

a percentage of the sale of obligatory personal ac-

cident insurance for accidents involving motor ve-

hicles (SOAP) to Coaniquem to support youth burn

victims.

Consorcio also supports Fundación Sonrisas with an

annual donation. C

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96

The Consorcio group has built a robust customer re-

lationship model, promoting an excellent experience

through better customer service and provision of in-

formation.

This spirit has materialized in a Customer Relations

and Management Plan that evolves based on the

needs and development of the businesses, and to date

is based on six strategic pillars, which are monitored

continuously.

To move forward in each of these pillars, in 2017, the

strategic focus on customer management focused on

launching a Digital Interaction and Experience Plan

with a long-term perspective.

Digital Engagement Plan As part of its long-term corporate planning, Consorcio

defined that the group should be a digital benchmark

within the insurance industry. In this context, during

the first quarter, the organization launched its “2020

Digital Engagement and Experience Plan” and began

its implementation.

This plan contained a series of initiatives defined

around the customer life cycle and needs.

This plan includes a governance system that involves

weekly multidisciplinary monitoring meetings, which

include the participation of Marketing, IT, Products,

Operations and General Counsel, among others.

In line with the company’s global strategy, for a timely

response to increasingly demanding customers, some

of these digital interaction projects are being carried

out under agile methodologies. This has enabled the

company to implement projects more efficiently, by

developing viable minimum products or services in

less time, which are adapted based on results in a mul-

tidisciplinary working group known as a cell.

Customer Relationship

STRATEGIC PILLARS OF THE CUSTOMER RELATIONS AND MANAGEMENT PLAN

Customer knowledge and information

Experience with customers and processes

Digital interaction and experience plan and support platform

Customer-focused people culture

Consultancy, transparency and communication

New legislation

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1. Redesign of the consorcio.cl site

This includes improvements in the technology, changes

and the look & feel and user-friendliness .

2. Chat

Implementation and improvements in the chat room,

all supported by positive user feedback. In parallel to

this, the company also began to work on chatbot te-

chnologies. Through artificial intelligence, this robot

is trained in history and qualitative information about

people and services, to generate online responses to

basic Q&A and consulting situations.

3. Relaunching of the app

This project was also implemented by an agile multidisci-

plinary cell, focused on auto insurance, to pay attention to

the most recurring customers. The app enables customers

using georeferencing request tire change or gas, among

others). It also enables customers to request quotes on

4. Development of a new private website for customers

This extends to the entire product line, and contem-

plates an improvement in technology and user-friendli-

ness, enabling a better and simpler customer experien-

ce for recurring transactions.

2017 MILESTONES OF THE DIGITAL INTERACTION AND EXPERIENCE PLAN

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98

Consorcio aims to provide each customer with a pro-

duct tailored to his or her needs, continually customi-

zing these throughout the customer life cycle, innova-

ting and adding value on an ongoing basis.

In keeping with this goal and the priority placed on

digital interactions as the work focus in 2017, during

the fourth quarter of this year, Consorcio created the

E-commerce division, which responds directly to the

Marketing and Customers Division.

The end goal is to provide services through digital plat-

forms in an ecosystem that provides the customer with

a friction-free experience at the opportune moment.

Strengthening the Relationship with Insurance

This also involves the creation of the Customer Distributor

Subdivision. In 2016, an important step was taken by incor-

porating distributors/brokers into the Digital Interaction,

Experience, and Communications Model with the Distribu-

tor Customer. Emphasizing the importance of this channel,

in 2017, Consorcio created this new subdivision, transfor-

ming the form of interaction with distributors, provision a

better experience, with an emphasis on digital media.

Customer Experience As part of the Customer Plan, there is an ongoing work

focus on customer research and knowledge. This invol-

ves periodically measuring customer satisfaction levels

with the company and the Net Promoter Score (NPS).

After broadening the knowledge base of customers who

retain or abandon their product with another company

and given the competitive market dynamics, in a decele-

rated economic context, customer retention was priori-

tized, especially for the individual life segment, reinfor-

cing the structure with expert branch executives. With

this plan, the results in terms of retention improved sig-

Wide array of products online at consorcio.cl

2,412,280TOTAL CUSTOMERS

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Automobile Insurance

Home Insurance

Multiple Third-Party Liability Insurance

Consorcio Pet Insurance

Obligatory personal accident insurance (Seguro Obligatorio de Accidentes Personales, SOAP)

Obligatory Personal Accident Insurance for Foreign Vehicles (Soapex)


Consorcio, which ranges from large international broker groups to independent brokers.

1,254

to the www.consorcio.cl website N° OF VISITS/MONTH

of the app (iOS + Android)

+ than 9,700 TOTAL DOWNLOADS

in branches

+ than 15,600

via contact center

+ than 14,000 N° OF CUSTOMERS ATTENDED/MONTH

Numbers as of December 31, 2017

N° OF CUSTOMERS ATTENDED/MONTH

+ than 260,000

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100

Life Insurance LIFE INSURANCE INDUSTRY

The growth of the life insurance industry was affected

in 2017 by the lower dynamism shown by the Chilean

economy in the last few years. Revenues from direct

premiums for the 37 companies that participate in

the market were Ch$ 5,745,192 million, which repre-

sents a decrease of 1.7% with respect to the previous

year. In this scenario, the industry’s equity was Ch$

3,579,306 million, with profits of Ch$ 587,076 million.

This is primarily explained by the decrease in the An-

nuities segment, in line with the decrease in the Chi-

lean pension market, which represents 42.7% of the

total life insurance industry. In 2017, intermediated

premiums were Ch$ 2,456,649 million, 11.0% lower

than the previous year.

The Annuity option continues to be the preference of

the recent years in the pension industry. This mode

transfers the financial risk of accumulated funds to-

gether with the risk of longevity, obtaining a fixed

income in UF for life. In 2017, 66.8% of new pensio-

ners preferred this mode, versus 33.2% who opted

for Programmed Withdrawal, maintaining the trend

of recent years.

In 2017, revenues from direct premiums for Indivi-

dual Life insurance were Ch$ 936,185 million, equi-

valent to a 0.4% growth with respect to 2016, with an

increase in the premiums for Insurance with Savings

(single investment account) of 0.4% compared to the

previous year, which represents 73.8% of the total

industry.

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The voluntary pension savings (APV) maintained the

trend of recent years, after totaling revenues from

direct premiums of Ch$ 316,926 million, a growth of

5.3% in the last 12 months. The increase in custo-

mer sensitivity to building a more prosperous futu-

re pension explains the growing trend observed in

the country towards the voluntary pension savings

industry and particularly toward insurance with APV

plan.

The disability and survival insurance (SIS) industry

reached a total of Ch$ 623,212 million in revenues

from direct premiums, 14.3% more than in 2016,

which is explained by the change in the cost of in-

result of this modification, the male segment went

from a rate of 1.15% to 1.41% and the female seg-

ment went from a rate of 0.95% to 1.03%.

The collective insurance industry, on the other hand,

showed 5.3% growth with respect to the previous

year, a period in which life and health insurance grew

by 5.6% and credit decreased by 5.7%, reaching a

total of Ch$ 544,589 million in revenues from direct

premiums, as a result of an increase in the number

of companies that extended benefits to their emplo-

yees.

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CONSORCIO SEGUROS VIDA

The results of Consorcio Seguros Vida in 2017 were sustai-

-

tion channels, which responds to the multiple needs of peo-

image, trusted by customers when seeking advice and plan-

-

ned sales force to provide quality advice.

In an extremely competitive year, most of the company’s

product lines registered positive results, including annuities,

individual life and collective insurance, showing a solid bu-

siness line management. In addition, the distribution chan-

nels, direct sales force, free agents and brokers, the ANS

channel (Alliances and Businesses in Insurance) with a range

of products focused on life and health insurance were incor-

porated into the already traditional distribution channels.

-

lent to a 65.4% increase compared to the previous year and

a 10.5% market share. At the end of the year the insurer

consolidated assets for Ch$ 5,768,161 million and an equity

of Ch$ 558,982 million.

DISTRIBUTION OF REVENUES FROM DIRECT PREMIUMS

APV13.1%

ANNUITIES 58.4%

4.0%COLLECTIVE INSURANCE

4.5%MASS LIFE

20.0%INDIVIDUAL LIFE

TOTAL

MILLION

Ch$603,655

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AnnuitiesTotal revenues from direct premiums in this area were

Ch$ 352,267 million for the year, which represents a de-

crease of 24.9%, product of a contraction in the Chilean

pension market and strong competition, registering a

market share of 14.3%.

In 2017, 5,820 new pensioners joined Consorcio Seguros

Vida, 53.6% of whom were under the normal retirement

annuities segment, 7.5% in early retirement annuities,

21.9% in disability annuities and 17.0% in survivor annui-

ties.

Revenues from direct premiums were Ch$ 120,988 mi-

-

vings insurance (86.6%), temporary insurance and protec-

tion endowments (3.9%), health insurance (3.5%) and in

other insurance (6.0%).

Voluntary Retirement Insurance + Savings With revenues from direct premiums at Ch$ 79,455 mi-

llion, the company continued its role as market leader.

The balance managed in APV was Ch$ 303,960 million,

which represents an increase of 19% in 12 months and

increased the market share by two percentage points, up

to 25.1%.

Collective Insurance With Ch$ 23,984 million in revenues from direct premiums,

the segment grew 7.5% in relation to the previous year,

reaching a market share of 4.4% in 2017.

Revenues from direct premiums were Ch$ 26,961 million,

which represents 4.5% of the company’s revenues.

With Ch$79,455 million in revenues from direct premiums, Consorcio remained market leader of voluntary pension savings and raised its market share by two percentage points, to 25.1%.

Total balance managed in APV

Ch$303,960 MILLION

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MILLION

NE

W P

RO

DU

CT

S

Ch$5,768,161 ASSETS

Ch$558,982 EQUITY

Ch$603,655 REVENUES FROM DIRECT PREMIUMS

Ch$140,922 NET INCOME

10.5% MARKET SHARE

Dynamic Funds for Insurancewith Savings and APV

Personal Accident Insurance through ANS channel

Complementary Health and Life Insurance through ANS channel

Complementary Health Insurance Plus

CONSORCIO SEGUROS VIDA

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Dynamic Funds for Insurance with Savings and APV: -

nagement of investments associated with their insurance

policies with savings and APV, Consorcio, in partnership

with LarrainVial AGF, created Dynamic Funds, a managed

portfolio of mutual funds that is built from the customer’s

-

ment by investment experts from LarrainVial Asset Ma-

nagement.

This pro-

the practice of some high-risk sports and motorcycles. It

has major accidental death coverage and additional cove-

rage for accidental disability, dismemberment and health.

Collective Insurance

ANS channel:medical expenses for insured workers and provides com-

optional dental coverage.

Complementary Health Insurance Plus: Designed

to provide greater protection in medical and dental ex-

penses for insured workers and their families, including

parents, incorporating coverage for pre-existing condi-

tions.

MAIN PRODUCTS LAUNCHED IN 2017

PENSIONERS 2017 As per pension mode

DISABILITY

21.9%

NORMAL RETIREMENT

53.6%

17.0%SURVIVORS

7.5%EARLY RETIREMENT

se sumaron a Joined Consorcio Seguros Vida in 2017

5,820PENSIONERS

TOTAL

MILLION IN REVENUES FROM DIRECT PREMIUMS

Ch$352,267

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CN LIFE SEGUROS VIDA

With more than 20 years of experience in Annuities, CN

Life Seguros Vida provides expert service to those who

choose this type of pension. It is also one of the compa-

nies that participates in the disability and survival insu-

rance (SIS).

At the close of 2017, after registering Ch$ 60,823 million

in revenues from direct premiums, the company obtai-

ned 1.1% market share.

Vida were Ch$ 20,043 million, while its assets were Ch$

750,984 million and its equity was Ch$ 90,266 million.

Annuities Revenues of Ch$ 20,899 from premiums were obtai-

ned, with a corresponding market share of 0.9% at the

end of 2017.

During the year, the average premium per pensioner

was Ch$ 97.3 million, with a growth of 4.4% over the

previous year and 43.8% higher than the market. Nor-

mal retirement represented 4.0% of the premiums ge-

nerated by annuities, while early retirement represen-

ted 2.6%, disability contributed 53.2%, and survivors’

40.2%.

CN Life Seguros Vida sells annuities directly, contri-

buting 19.7% of all revenues from direct premiums,

and through pension advisors, with 80.3% of the total

premium.

Revenues from Disability and Survivors’ Insurance

(SIS) were Ch$ 39,700 million, contributing 65.3% of

total revenue from CN Life Seguros Vida, with a 6.4%

market share in this segment.

IN NET INCOME EQUITY

1.1%Ch$60,823 MARKET SHARE million

million million

YEAR END NUMBERS FOR 2017

Ch$20,043 Ch$90,266

REVENUES FROM DIRECT PREMIUMS

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NORMAL RETIREMENT

4.0%

DISABILITY

53.2%

2.6%EARLY RETIREMENT

40.2%SURVIVORS

DISTRIBUTION BY PENSION TYPE

TOTAL

MILLION IN REVENUES FROM DIRECT PREMIUMS

Ch$20,899

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General Insurance GENERAL INSURANCE INDUSTRY

In 2017, the general insurance industry grew at a rate hi-

gher than the Gross Domestic Product, with Ch$ 2,508,919

in revenues from direct premiums, which represents an

increase of 2.1% over the previous year. The 31 companies

that participate in this industry, including three new insu-

rance companies, totaled assets of Ch$ 4,073,358 million,

Ch$ 35,152 million.

The dynamism of the industry was not evenly distributed

premium growth were vehicles, personal accident and

theft.

Vehicle and personal accident insurance both grew by

8.5% in the last 12 months, with revenues of Ch$ 752,432

and Ch$ 91,020 million from direct premiums, represen-

ting 30.0% and 3.6% of the total direct premium for the

industry, respectively.

The area that stood out for its growth in a contracted

economy was theft insurance, with total revenues of Ch$

94,140 million from premiums and an 8.0% growth over

the last 12 months.

-

nal areas were Ch$ 782,615 million, equivalent to 31.2%

of the industry’s total premium, with a decrease of 4.1% in

relation to the previous year, resulting from a market with

falling prices throughout the year. As a result of reinsurers’

losses due to hurricanes in the third quarter in

the northern hemisphere, the market presented increases

in business premiums with facultative reinsurance in the

decrease in these lines as low as it was.

The obligatory personal accident insurance (Seguro Obli-

gatorio de Accidentes Personales, SOAP) totaled Ch$

47,654 million in revenues from direct premiums, with a

4.7% growth during 2017, resulting from an overall increa-

se in vehicles.

The remaining 29.5% of the total revenues from direct

premiums for general insurance, composed of unemplo-

yment, transport, land and sea vehicles and credit insu-

rance, among others, resulted in Ch$ 741,059 million in

revenues from direct premiums, with a 1.5% growth in 12

months.

In 2017, the general insurance industry grew at a rate higher

than the Gross Domestic Product, with Ch$

2,508,919 in revenues from direct premiums.

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CONSORCIO SEGUROS GENERALES

The proper implementation of a multi-channel manage-

ment strategy and claims management, together with an

-

sorcio Seguros Generales to achieve good results, even

higher than projections.

was a relevant support in 2017 management, highlighting

the ANS (Alliances and Businesses in Insurance) channel,

which grew in the double digits, becoming a solid contri-

bution to the company’s revenues.

Revenues from direct premiums for Consorcio Seguros

Generales were Ch$ 78,150 million, representing a 5.6%

increase over the previous year.

2,881 million, with Ch$ 93,757 million in assets and Ch$

23,643 million in equity.

3.1%MARKET SHARE

YEAR END NUMBERS FOR 2017

Revenues from direct premiums

Ch$78,150 MILLION

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110

TOTAL

MILLONES

Ch$78,150

SOAP

9.9%

AUTO INSURANCE

52.2%

19.1%OTHERS

18.8%FIRE, EARTHQUAKE AND ADDITIONAL INSURANCE

DISTRIBUTION OF REVENUES FROM DIRECT PREMIUMS

BUSINESS LINE MANAGEMENT

Auto Insurance During the year, this branch continued to concentrate the

largest volume of revenues from direct premiums, with

Ch$ 40,768 million, equivalent to 52.2% of the company’s

revenues from total direct premiums. In this segment, Con-

sorcio obtained a 5.4% market share.

Fire, Earthquake and Additional Insurance Revenues from direct premiums were Ch$ 14,715 mi-

llion, representing 18.8% of the company’s total, with a

15.8% growth over the previous year. With these results,

Consorcio Seguros Generales achieved a market share

of 1.9% in this segment.

Revenues from direct premiums were Ch$ 7,751 mi-

llion, after growing 64.6% in 12 months. The branch

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provides 9.9% of the company’s revenues from direct

premiums and represents a 16.3% market share, pla-

cing it third in the insurance company ranking in this

segment.

Theft Insurance The direct premium was Ch$ 4,337 million, a decrease

of 8.0% in 12 months, obtaining a market share of 4.6%.

Warranties This year, the direct premium for Warranties was Ch$

550 million, with a 15.2% growth over the previous year.

In this segment, Consorcio obtained a 4.4% market sha-

re.

Other Insurance While personal accident insurance experienced a 9.1%

increase in 12 months, with Ch$ 1,770 million in pre-

miums, unemployment insurance grew 21.3% over the

previous year, totaling Ch$ 681 million. Liability insuran-

ce showed a 12.4% increase in sales and totaled Ch$

1,090 million in revenue from direct premiums. The

other items totaled Ch$ 6,488 million, representing 8.3%

of the company’s total premium income, with an 8.7%

decrease in 12 months.

MAIN PRODUCTS LAUNCHED IN 2017

SOAPEXObligatory personal accident insurance for accidents

involving foreign motor vehicles, mandatory for all vehi-

cles entering the country temporarily.

This insurance covers general non-contractual liability

incurred by the insured party, its contractors and sub-

contractors, for the damage they may cause to third

parties, as a result of the execution of their works.

GROWTH IN DIRECT PREMIUMS OVER 12 MONTHS M

ILLI

ON

Ch$93,757 ASSET VOLUME

Ch$23,643 EQUITY

Ch$2,881NET PROFITS

5.6%

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BancoConsorcio

Board of Directors

Executive Committee

Highlights

Mission, Vision and Values

Human Capital

Customer Management

Business Management

People

Companies

Finance

Stock Brokerage


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114

Board of Directors Banco Consorcio

José Antonio Garcés SilvaDirectorChilean Tax ID 8.745.864-4


Universidad Gabriela Mistral


Administration, Universidad

de los Andes


September 15, 2011

Richard Büchi BucDirectorChilean Tax ID 6.149.585-1

Civil Engineering Degree



Administration, Wharton School

University of Pennsylvania


December 30, 2014

Cristián Arnolds Reyes DirectorChilean Tax ID 6.972.469-8

Universidad Católica de Chile


Administration, Wharton School,

University of Pennsylvania


May 4, 2013

Cristián Cox VialDirectorChilean Tax ID 7.033.709-6


Católica de Chile


May 4, 2013

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DIRECTORS


Patricio Parodi Gil Chairman Chilean Tax ID 8.661.203-8


de Chile


Administration, Harvard University


November 26, 2009

Ana María Rivera TavolaraDirectorChilean Tax ID 12.094.411-8

Business Administration

Miami Dade Community

College


November 26, 2009

Julio Guzmán HerreraDirector



de Chile


November 26, 2009

José Miguel Ureta CardoenDirectorChilean Tax ID 9.612.711-1



Administration, Harvard University


December 30, 2014

Pedro Hurtado VicuñaDirectorChilean Tax ID 6.375.828-0

Industrial Engineer



September 15, 2011

BANCO CONSORCIO

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116

Executive Committee Banco Consorcio

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Francisco Ignacio Ossa G.



Universidad de los Andes


Administration, INSEAD

Date appointed:

November 26, 2009

Mara Forer I.Finance Manager Chilean Tax ID 8.209.457-1



Date appointed:

December 14, 2009

Jessica Hernández V.Comptroller Chilean Tax ID 13.465.742-1

Civil Engineer in Geography



Administration, Universidad de

Chile

Master’s Degree in Financial

Administration, Universidad

Adolfo Ibáñez

Date appointed: August 1, 2011

Fernando Agüero A. Commercial Banking Manager Chilean Tax ID 10.974.953-2


de Chile


Administration, IESE

Date appointed:

Gonzalo Gotelli M.Operations and Financial Oversi-ght ManagerChilean Tax ID 10.896.500-2



Master’s Degree in Finance,


Date appointed:

November 26, 2009


BANCO CONSORCIO

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Álvaro Larraín P.Legal and Compliance Manager Chilean Tax ID 12.049.936-K

Attorney / Universidad Diego Portales

Master’s Degree in Business Law,

Universidad Adolfo Ibáñez


Católica de Chile

Date appointed:

December 14, 2009

Ramiro Méndez M.Retail Banking Manager Chilean Tax ID 12.855.415-7


Católica de Chile

Date appointed:

Francisco Nitsche C.Human Resources Manager Chilean Tax ID 7.696.965-5


Universidad de Tarapacá

Master’s Degree in Human

Resources and Organizational

Management / Universidad Adolfo

Ibañez

Jaime Riquelme B.Risk Manager Chilean Tax ID 10.831.047-2



Master’s Degree in Finance,


Date appointed:

November 26, 2009

José Luis Miño V.Technology Manager Chilean Tax ID 11.972.944-0


Universidad Técnica Federico

Santa María

Master’s Degree in Business Ma-

nagement, Universidad Técnica

Federico Santa María

Date appointed:

November 26, 2009

Francisco Pérez O.

Corredores de BolsaChilean Tax ID 15.637.256-0

Católica de Chile


Administration, University of Chicago

Date appointed:

April 4, 2016

Andrea Rodríguez A.Marketing and Customer Servi-ces Deputy ManagerChilean Tax ID 8.384.011-0

Accountant-Auditor

Universidad de Talca

Date appointed:

February 10, 2014

Gonzalo van Wersch M.Development and Management Manager Chilean Tax ID 15.637.792-9



Administration, University of Chicago

Date appointed:

118B

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To become a relevant actor in the banking industry, with a market share over 2%, with a universal, modern and tailored

in all business lines and an above average return on equity among midsized banks.

Vision

Values Integrity Ethics, transparency and honesty are part of the daily work at Banco Consorcio.

Proactiveness Setting challenges and taking the initiative to make improvements that contribute to the bank’s work.

Excellence The bank always strives to do a good job characterized by quality.

Cooperation Participating actively on work teams and contributing to other areas to achieve the bank’s objectives.

Respect Always treating others with dignity, assuming commitments and complying with bank standards.

Adapting to new ideas, procedures and practices that add value to performance and to Banco Consorcio.

BANCO CONSORCIO

for our shareholders, building trust-based relationships in our

for people to develop their full potential in a challenging working environment where respect for our values is demonstrated.

Mission

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120

DEC. 16 DEC. 17 DIFFERENCE

in Assets

Cash and Cash Equivalents 87,345 104,635 17,290

Total Net Loans 1,792,983 2,064,872 271,889

DPV Fixed Income Investments 1,169,090 1,347,538 178,448

Mutual Funds and other Trading 66,573 102,165 35,592

Transitory Assets 32,762 57,136 24,374

Fixed Assets 6,745 7,703 958

Other Assets 82,964 68,670 -14,294

3,238,462 3,752,719 514,257

Demand Obligations 58,997 58,822 -175

Term Deposits 1,748,107 1,978,656 230,549

Bank Balances 176,073 182,259 6,186

Transitory Liabilities 24,176 53,378 29,202

Other Liabilities 388,871 452,125 63,254

Senior Bonds 351,954 472,740 120,786

Subordinated Bonds 104,145 134,089 29,944

Shareholders’ Equity 386,139 420,650 34,511

3,238,462 3,752,719 514,257

Income Statement Retail Banking Margin 8,992 8,594 -398

Corporate Banking Margin 31,205 33,699 2,494

Finance Margin 25,593 28,042 2,449

Stock Brokerage 9,957 9,930 -27

75,747 80,264 4,517

Fixed Expenses -16,672 -18,763 -2,091

Net Operating Income 59,076 61,501 2,426

Taxes -11,359 -12,811 -1,452

47,716 48,690 974

Summary of the Consolidated Financial Statements (Banco Consorcio and subsidiaries)

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Business Lines

IN EQUITY in Assets

684 6,10418.3%

27 124,397 840

FITCH RATINGS: BBB(International - Stable)

FITCH RATINGS: AA-(Stable)

FELLER RATE: AA-(Stable)

ICR: AA-(Stable)

MILLION MILLION BASEL INDEX

US$ US$

CUSTOMER SERVICE CENTERS

CUSTOMERS EMPLOYEES

PEOPLE

• Consumer Loans

• Mortgage Loans

• Visa Credit Card

• Preferential Account

• Term Deposits

COMPANIES

• Commercial Loans

• Real Estate Financing

• Factoring

• Leasing

• Foreign Trade

• Performance Bonds

• Salary Payment

• Current Account

FINANCE

• Currency Transactions

• Derivatives

• Captures

• Purchases

STOCK BROKERAGE

• Shares

• Mutual Funds

• Term Deposits

• Purchases

• Simultaneous

• APV

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122

LIn 2017, the Human Resources Division focused on im-

proving the work environment of Banco Consorcio and

-

focus groups and visits to each branch, among others.

average in the 2017 climate survey, showing a positive im-

pact in comparison with 2016.

This area also undertook an ongoing training project, con-

sidering the needs of the employees of Banco Consorcio

purpose, an open access platform that includes several

courses across the board that provide support tools for

-

ge (86%) of employees trained by the Campus.

Human Capital

In Internal Communications and Quality of Life, the focus

was to continually inform all employees of Banco Consor-

cio and subsidiaries of the various activities, meetings, po-

licies, revenues, changes and any relevant information for

the organization. The purpose of this was to ensure that

everyone was informed about the context within the bank

and subsidiaries.

An important issue was strengthening Corporate Social

Responsibility, working together with Consorcio in the re-

TR

AIN

ING

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DISTRIBUTION OF EMPLOYEES BY GENDER 2017

WOMEN

58%

42%MEN

40% 17% 10%RETAIL BANKING

OPERATIONS CORPORATE BANKING

Divisions with the highest concentration of employees.

hectares in the area. In this same line, the campaign “One

child, one gift” was launched, with all proceeds going

towards the celebration and purchase of gifts for chil-

dren. Subsequently, a group of employees planned a trip

to the area of Santa Olga to celebrate Children’s Day with

the preschoolers.

Acknowledgments in Occupational Health and SafetyIn 2017, Banco Consorcio and its subsidiaries was

Competitive Occupational Health and Safety Program”

by the Mutual de Seguridad and was acknowledged for

its “Outstanding” performance, achieving 100% com-

pliance in the 10 modules assessed, making the entity

a pioneer in the sector.

In line with the bank’s attentiveness to these matters,

during 2017 a total of 946 hours of on-the-job safety

training were carried out, involving the participation of

462 employees. Banco Consorcio currently has an ac-

cident rate of 1.17 points and a claims ratio of 33.11.

840 EMPLOYEES Banco Consorcio and subsidiaries

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EVOLUTION # OF EMPLOYEES 2017

APR-17 OCT-17FEB-17 AUG-17MAY-17 NOV-17MAR-17 SEP-17 DEC-17

124

In 2017, service culture was carried out as a strategic

project across all the bank’s and subsidiaries’ areas and

teams. The purpose of this project was to strengthen

the customer-based culture inside Banco Consorcio.

service required by customers, followed by a measure-

ment of their presence within the company to generate

plans aimed at reducing gaps and making these pillars

tangible for customers.

feedback on the customer experience and degree of

satisfaction when interacting with the bank when pur-

chasing products and the customer service received

ongoing improvements based in this customer feed-

back.

Along these lines, the bank worked with the Net Pro-

moter Score (NPS) on a monthly basis. This indicator

measures the customer’s degree of loyalty based on

recommendations. Telephone and online surveys were

conducted periodically to identify the customers’ de-

gree of satisfaction and the level of recommendation,

as well as the areas with the greatest potential for im-

provement. With this information, working groups were

-

and implement action plans to improve this recom-

mendation score.

The bank also participated in Servitest 2017, in the

Corporate segment, where it obtained comparative in-

formation regarding the previous year and the compe-

tition. This enabled it to measure and identify overall

service satisfaction by contact channel, recommenda-

tion score and industry benchmark, indicating the in-

tention of interviewees to continue as customers and

the probability that they will continue to use the bank

for future transactions.

of corporate banking and services, Banco Consorcio

63% industry-wide), highlighting overall assessment

of executives (78% vs. 66% industry-wide), the money

desk (83% versus 69% industry-wide) and the lowest

customer issue rate (10% compared to 15% indus-

try-wide).

Customer Management

63

74

2636

43 44

-6 -6

GLOBAL ASSESSMENT

Source: IPSOS

PROMOTORS

INDUSTRY BANCO CONSORCIO

DETRACTORS

LIABILITIES

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The bank also placed first in the customer loyalty in-

dex (46% versus 40% industry-wide) and the lowest

intent to drop services rate (4% vs. 8% industry-wide).

It also placed third in the recommendation index (30%

versus 20% industry-wide).

It was able to improve its Sernac ranking regarding

measurement in the claims rate (claims per 10,000

debtors), decreasing to 7.28%, thereby placing third in

the ranking of banking entities with the least number

of claims.

Finally, in 2017, the bank continued to work on provi-

ding the customer with a consistent customer service

experience across different service channels.

Throughout the year, retail banking’s services matrix

was revised and updated, identifying potential for im-

provement for each area. In addition, reviews of pro-

cedures that directly affected customers were esta-

blished, to implement improvements and standardize

the service provided.

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126

MARKET AND REGULATION

Background The prevailing political and economic uncertainty in

2017 discouraged investment and impacted the banking

industry, which grew only 2.9% in customer loans, com-

pared to 2.3% the previous year.

than the previous year, registering a variation of 1.7%

versus 2.8% in 2016, based on calendar year. The mone-

tary policy rate began in 2017 at 3.5%, gradually decrea-

sing to 2.5% in the month of May, and maintaining this

level for the rest of the period.

The exchange rate appreciated against the dollar by

8.2% in 2017, closing the year at 614.8 Chilean pesos.

GDP for the year stood at 1.5%.

This scenario of lower growth increased competition in

banks. However, the national unemployment rate remai-

ned stable, which kept late payments under control. The

above, coupled with a good liquidity scenario, led to bet-

ter results in the banking system than the previous year,

The industry continued to concentrate. In addition to

the CorpBanca-Itaú merger, in 2017 BBVA was bought

by Scotiabank, generating business opportunities for

smaller banks.

Regulatory Framework 2017 saw the start of one of the most important legislative

changes in the banking industry in the last decade. The re-

form project to the General Banking Law was introduced in

issued by the Chamber of Deputies and submitted to the

Senate.

-

gulator and moves towards the implementation of a new

which contemplates the existence of a regulator with a

general and systemic vision on this. The project includes

the incorporation of the current Chilean Banks and Finan-

cial Institutions Supervisor (SBIF) into the Financial Market

-

reby eliminated.

the adoption of Basel III standards, adapting the capital

requirements of the banking industry, strengthening the

solvency of the sector. Although Basel I still operates in

Chile, Banco Consorcio has adapted to this new liquidity

standard and it now already has the capital it would require

under the new regulations.

Management 2017 Banco Consorcio met its 2017 growth targets for loans.

These increased by 15.2% to Ch$ 2,065 billion, generating

a net portfolio growth of Ch$ 271,889 million, mainly driven

by the performance of Corporate Banking, which has alre-

ady reached a 2.4% share in the national market.

The risk index on total loans remained below industry le-

vels, standing at 1.8%, compared to 2.5% in banking at an

aggregate level.

Business Management B

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In a year during which the real estate business continued to

be active, despite the market uncertainty, housing loans in the

managed portfolio grew by 4.7% and commercial loans increa-

sed by 16.2%.

Consolidated assets totaled Ch$ 3,752,719 million and net cus-

tomer loans totaled Ch$ 2,064,872 million, driven by commer-

cial loans and housing loans in the managed portfolio.

47,716 million, in 2017 a new record was set in results, growing

by 2.0%, reaching Ch$ 48,690 million.

The return on capital was 12.1%, a result that compares favo-

rably with the industry, ending with an excellent capitalization

level, closing with a Basel of 18.3%.

PRINCIPAL CHALLENGES IN 2018

• Launch of the new preferential segment in retail banking,

with an innovative proposal, including digital channels to

enable customers to do everything they need from their

cell phone, with an ongoing focus on service. This will

segment, which until now only included mortgage loans

and investments in CCBolsa. Initially, customers in the

group will be addressed, integrating solutions so that

-

nancial needs.

• Modernize contact channels, starting with the launch of the

new retail banking mobile app. In the same line, the bank

will focus on new user experience and design concepts,

incorporating new functions in the private retail banking,

corporate banking and CCBolsa sites.

•Banco Consorcio will work on developing a comprehensi-

Current accounts have been strengthened for corporate

clients and are currently being developed for retail custo-

customer relationship.

• Maintain growth levels to increase loans by 15%, consi-

dering the positive outlook for Chile in 2018. With this,

the bank will increase its loan-to-investment ratio by 56%,

bringing it increasingly closer to the industry average.

Corporate banking will be the main driver of growth in

loans, followed by mortgages, in addition to the increa-

singly important contribution of mass banking and the

• Progress towards strengthening a customer-focused ser-

vice culture, following the established improvement plans,

-

gh a communication plan and implementing these in criti-

cal processes.

BANCO CONSORCIO LOANS AND RISK INDEX (MCH$)

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DEC-09 DEC-10 DEC-11 DEC-12 DEC-13 DEC-14 DEC-15 DEC-16 DEC-17

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0

6%

5%

4%

3%

2%

1%

0%

PORTFOLIO RISK INDEX

128

PEOPLE

In 2017, the business strategy was developed around two

segments: preferential and mass banking.

mass banking through directed sales, which provides

good payment behavior, reducing the portfolio risk. This

captured using this method, which shows a risk index of

less than 5.5%.

This year, retail banking achieved a margin of Ch$ 8,594

million and loans of Ch$ 176,849 million, representing an

-

cantly improved from 2.1% to 1.8%.

Preferential Segment The preferential segment brings together mortgage loan

focus of the year was on the development of the terms

and conditions for the launch of the current account plan,

planned for mid-2018, which will include a credit card and

digital operation model.

2017 ACHIEVEMENTS

In 2017, mortgage loan sales totaled UF 3.4 million, main-

taining the 1.6% market share, which is the maximum level

reached by the bank (endorsed transactions administered

by the bank are included in this calculation).

The market share indicated above was maintained despi-

te the fact that last year the bank was not as competitive

in rates, explained by the low levels of Central Bank rates.

This situation continued until the rise in rates at the end

of the third quarter, which left Banco Consorcio in a more

competitive position.

In 2017, the bank also signed agreements with real estate

companies, which strengthened the bank’s position and

provided a better business proposal to customers and real

estate companies covered under these agreements.

MARKET SHARE BY PRODUCT

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2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

1.39% 1.34% 1.37%1.53% 1.55%

1.54% 1.59% 1.56%

0.55%

0.48%0.51% 0.47% 0.43% 0.40% 0.35%

0.49%

0.54%0.69%

1.01% 1.33%

1.58%1.69%

1.84%

0.13%0.18% 0.22% 0.26% 0.25% 0.21% 0.21% 0.23%0.10%

0.23% 0.47%

0.93%

1.46%

1.89%2.09%

2.37%

DEC-10 DEC-11 DEC-12 DEC-13 DEC-14 DEC-15 DEC-16 DEC-17

% CONSUMPTION %OWN+ADM MHE %COMMERCIAL %BANK %OWN MHE


claims and a sustained rise in internal NPS indicators that

are measured periodically.

-

ties and a new management model in September 2017,

looking to match mortgage customers in the preferential

to these campaign customers represented 62% of total

sales.

As part of the development of retail banking, the bank has

made progress with the “Cumbres” project, which aims to

is being developed by a multidisciplinary working group

(Squad), made up of people from the products, risk, te-

chnology, operations and development areas, led by the

the bank has been able to make progress in this project

management areas, with a collaborative outlook and highly

By the end of 2017, the project showed 55% progress.

Its main milestones included the activation of current ac-

counts, currently undergoing functional testing, the ac-

creditation of Banco Consorcio as an issuer of credit and

debit cards by Visa International, and the implementation

agreement of Nexus as a credit card processor, which will

new Way4 platform.

-

gital banking, a new retail banking app and website have

been developed. Both are undergoing user testing and will

soon be on the market.

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130

Mass Banking Segment The mass banking segment targets customers with a

monthly income below Ch$ 1.2 million. Its business stra-

tegy focuses on granting targeted consumer loans to

previously selected customers. The Mac-Iver, Agustinas,

-

ment. Likewise, by late 2017, the bank added pensioners

to this segment in order to provide them comprehensive

2017 ACHIEVEMENTS

In 2017, Ch$ 12,797 million was granted in loans, with a risk

level below 5.5% and 30 days arrears of 2.5%, which is a signi-

of 151% compared to 2016 and is based on a relevant increa-

-

nel.

2018 CHALLENGES

• Launch of a digital current account plan in conjunction

with the insurance company, to become the target bank

for Consorcio customers

• Design and implementation of a comprehensive value

-

ducts such as a current account, updating the credit

• -

siness teams for the launch of the new preferential

bank in the second semester of 2018.

•

Mar, which will be a strategic point for the segment

in this region.

By the end of 2018, the goal is to reach an average

loan stock of Ch$ 27,000 million for the year, with a

66% growth with respect to 2017.

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CORPORATE BANKING

Through an organizational structure based on business, risk

and operations specialists, corporate banking manages three

major segments: medium enterprises, large enterprises and

corporate enterprises. Additionally, in 2017, the bank bran-

ched into the SME segment through factoring.

and forms of payment.

This makes corporate banking a relevant player within the

Banco Consorcio structure, with 91% of loans, sustained

-

llenges as they arise.

2017 ACHIEVEMENTS

One of the fundamental objectives proposed for 2017 was

to maintain excellence in the quality of customer service. This

objective was clearly met, as seen in the results of the “Servi-

test” satisfaction survey carried out by IPSOS, notably:

• 1st place in service provided by corporate executives.

• 1st place in service provided by the money desk.

• 1st place in customer loyalty index.

• 3rd place in NPS (Net Promoter Score).

These good results were obtained thanks to a long-term stra-

tegy focused on its clients, which is based on the values of

Banco Consorcio and its solid business structure and support

areas.

From a results standpoint, the bank was able to reach the ex-

pected 16% growth in loans, totaling Ch$ 1,926,416 million in

with a total of Ch$ 1,712,204 million, and the 18% increase

in factoring, reaching a stock of this business of Ch$ 70,243

million.

The drive to improve growth in the array of other products

was also maintained. Leasing thereby totaled Ch$ 40,557 mi-

llion and foreign trade Ch$ 103,412 million.

Complementing the previous point, the bank achieved signi-

increase of 50%, far exceeding expectations and achieving re-

cord levels for the area. In this way, this segment was consoli-

business for corporate banking.

-

gan, in compliance with the budgeted amount for opened

accounts, where the main focus was on the processes and

developments of the product. This approach remains a cha-

-

rience.

2018 CHALLENGES

work, which will help consolidate the customer base and

create long-term bonds of trust, maintaining good custo-

mer service and commitment.

• Cross Selling and Desertion Rate: the bank aims

to increase the number of customers and promote

the sale of products, especially current accounts and

money desk, which will support cross selling and mi-

nimize the desertion rate.

Loans increased by 16.2%, totaling Ch$ 1,926,416 million

in 2017. The 18% growth in commercial loans was

1,712,204 million, as well as the 18% in factoring, with a stock of

Ch$ 70,243 million.

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132

• Strengthen Products: improve processes and servi-

ces for each of the products offered, to best meet the

needs of our customers.

• Customer Service: complement the teams of spe-

cialists, incorporating new executives, supervisors

and generating a new structure to provide better

customer service.

• Business Intelligence: improvements in tools for

customer retention and ongoing portfolio monito-

ring for the use of available lines.

BUSINESS FACTORING

FOREIGN TRADE LEASING

88% 5%

5%2%

DISTRIBUTION OF CORPORATE LOANS PER ECONOMIC ACTIVITY

LOAN DISTRIBUTION

REAL ESTATE

DEALERSHIPS

INDUSTRY

STATE AND MUNICIPAL

FISHING MINING

AUTOMOTIVE

SERVICES

POWER COMMUNICATIONS 28%

8%

6%

3%

3% 3%

5%

7%

13% 10%

SERVICES 9%

AGRICULTURE /FORESTRY

6%

CONSTRUCTION OTHERS 3% 3%

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FINANCE

In 2017, the Finance area had a positive gross margin of Ch$

28,042 million. This result in 2014 is due to active management

balance sheet mismatches.

One of the main strategies was to take advantage of volatility in

the interest rate curve, through careful management of term

and UF/Ch$ mismatches. Furthermore, liquidity management

in local and foreign currency, diversifying and optimizing fun-

ding sources and increasing the sophistication of liability mana-

at all times.

The Finance division is composed of an Investment Desk and

investment portfolio and is responsible for ensuring structural

balance sheet matching, both in terms of currencies and terms.

-

tomers, such as buying and selling currencies, term deposits,

-

-

2017 Banco Consorcio issued bonds for UF 8 million. At the

close of the period, the total value of placed bonds was UF

22.5 million, equivalent to over 16.2% of total liabilities.

In 2017, two foreign loan agreements were also signed for a

three to 10 years and which will be disbursed during 2018.

It enabled the growth plan to continue and maintain Banco

Consorcio’s equity strength, which closed with a Basel Index

of 18.3% that compares favorably to the industry index of

13.8%.

An active management of

of the bank’s term, currency and interest

rate mismatches explain the positive results in the area.

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STOCK BROKERAGE

Consorcio Corredores de Bolsa S.A. (CCB, CCBolsa) was incor-

porated in 1999 and acquired the status of stock broker on

February 7, 2000. The company’s exclusive purpose is to act

as a stock broker, conducting securities brokerage operations

and complementary activities authorized by the Chilean Secu-

rities and Insurance Supervisor.

This subsidiary of Banco Consorcio is a broker of the Santiago

Stock Exchange and of the Chilean Electronic Stock Exchange

and its main activities are the intermediation of securities for

third parties and the investment of its own local and interna-

Investment Business The brokerage investment business is the result of a spe-

-

ks. This policy covers controlling company borrowing, and

assets.

-

-

tfolio of customers, bank overdraft lines and banking credit

lines without collateral.

CCB decided to voluntarily ask a rating company for a risk

rating and solvency report, in order to provide its investors

and customers with security with respect to the transac-

is reviewed annually by the risk rating company, who arran-

ges regular meetings with CCB to assess its credit quality.

-

llion in 2016, which rose to Ch$ 280,422 million at the end

of 2017, representing 3.2% portfolio growth.

This portfolio generated a gross margin of Ch$ 11,029 mi-

llion in 2016, and this margin in 2017 was Ch$ 9,765 mi-

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Its main indicators include the borrowing ratio which en-

ded the year at 4.51 times, and the asset coverage ratio

of 59.07%.

Security Brokerage Business for Third Parties CCBolsa serves its brokerage business customers using

two platforms, a website and direct customer service, to

process its equities, mutual funds and term deposits tran-

sactions.

Its web platform primarily serves individuals who trade

equities, mutual funds and term deposits using its invest-

ment portal.

The broker is a pioneer in providing its services using the

internet, on a platform that allows customers to place or-

ders online, without the intervention of third parties. Its

personal platform has a team of executives that serve

customers in a more personalized manner.

CCBolsa used its web and personal platforms to serve a

portfolio of 22,800 customers in 2017, in comparison to

21,000 the previous year. The company generated com-

missions totaling Ch$ 3,013 million in 2016, which rose to

Ch$ 4,731 million in 2017.

CCBolsa has restructured its commercial team by crea-

ting a single Commercial Department that aligns the

objectives of its various sales channels, with a special

emphasis on providing a convenient and highly available

service, with the aim of reviving customer growth and ma-

naged funds.

True to its commitment to providing its customers with

improved information, CCBolsa developed market depth

as a new service during 2017.

institutional customers as a complementary activity. At

year end, the company was providing this service to more

than 15 investment funds.

PRINCIPAL ACHIEVEMENTS IN 2017

• In 2017, Consorcio Corredores de Bolsa attained pro-

increased stock market activity, in general, the boost to

commissions and the greater role played by commer-

cial business had a positive impact on results.

• At the close of December 2017, CCBolsa was ranked

sixth in the industry based on equity (from its previous

seventh place), with 6.1% of total broking equity. It also

accounts for 3% of intermediation revenues and ser-

industry as a whole.

• Consorcio Corredores de Bolsa was ranked the fourth

with 14.7% versus the industry-wide average of 10.5%

for the same period.

Stock Market Context The number of shares traded in 2017 on the Santiago Stock

Exchange grew by 43% compared to 2016. Consorcio Corre-

dores de Bolsa increased the number of shares traded by

161% in 2017, thus achieving a 4.6% market share in this ca-

tegory (from 2.5% in December 2016).

Cumulative for December 2017, commissions for interme-

diation of the industry grew by 34% compared to December

2016, standing 2.2% above the cumulative amount as of De-

cember 2011 (period of high commissions). CCBolsa was de-

dicated to driving up sales, and as a result its brokering com-

missions increased by 98% compared to cumulative 2016,

and 51% higher than cumulative for December 2011.

2017 was positive for the stock broker, in a context where the

S&P, NIKKEI and the world had US dollar returns of 23%, 23%

and 30%, respectively. In particular, the IPSA ended the year

with a return of 34.04% in Chilean pesos and 45.4% in US

dollars.

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LarrainVial AssetManagement Administradora General de Fondos S.A.


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Consorcio Financiero has a 25% stake in LVCC Asset Mana-

gement, which owns 99.9% of LarrainVial Asset Management

Administradora General de Fondos S.A., the largest non-ban-

king asset manager in Chile, with over US$ 5.3 billion under

management as of December 2017.

LarrainVial Asset Management has a wide range of mutual

and investment funds distributed amongst retail and institu-

tional investors in Chile, Peru, Colombia and Europe, in equi-

GROWTH IN A HIGHLY VOLATILE YEAR

2017 was one of the best years in terms of returns for most

asset classes. Returns for the higher risk instruments were

in the double digits, in some cases reaching yields of more

than 40% in local currency, as was the case for shares in

Asian emerging markets.

In the United States, the uncertainty generated by the

Trump administration was relegated to the background

and shares had positive returns every month of the year,

with one of the lowest volatilities ever registered. Latin

America had strong growth due to economic exchange,

the recovery of commodities and pro-market monetary

policy.

In Chile, shares were in line with their international peers,

closing their best year since 2010.

In this context, LarrainVial Asset Management maintained

its steady performance and grew, due to its continual goal

to capture the best investment opportunities in the Chi

-

cess, an experienced team, and constant monitoring and

research.

The good results obtained by the departments at Larrain-

Vial Asset Management enabled it to reach US$ 5.6 billion

in assets managed in 2017, and remain the mutual fund

manager with the most Chilean equities under manage-

ment.

NEW FUNDS

The fastest growth at the asset manager in 2017 was

driven by its balanced funds area, as this industry expe-

rienced an expansion of 17%. However, LarrainVial Asset

Management grew by 24.3%, demonstrating its ability to

quickly recognize business opportunities and respond to

the needs of investors.

In 2017, LarrainVial Asset Management launched seven

The experts at LarrainVial Asset Management expertly and

actively manage investments, monitoring market opportu-

nities and consistently building a portfolio of mutual funds

The “Fondo Mutuo Ahorro Argentina” (savings mutual

fund) aims to invest in short-term debt instruments

(less than 365 days) in local currency issued, guaran-

teed or tendered in Argentina.

LVCC Asset Management


The private debt investment fund seeks returns mainly

by investing in private debt instruments or by investing

in lease agreements with a promise to purchase.

domiciled in Luxembourg and available to investors

around the world. These went from US$ 135 million

at the close of 2016 to US$ 530 million at the close

AFPs and the good scenario in Latin America.

INTERNATIONAL RATING

The strength of LarrainVial Asset Management’s processes

was again recognized. The international risk ratings agency,

Standard & Poor’s (S&P), rated its asset management practi-

consecutive year.

Standard and Poor’s considered the administrator’s strong

and customers, its experienced management team and

-

trol practices, its well-structured investment management

process, and its risk management capacity.

in assets managed in 2017

5,323 24.3%MILLION OF GROWTH IN

FUNDS IN 2017

2017 HIGHLIGHTS AND ACKNOWLEDGMENTS

US$

Morningstar Awards “Enfoque” Fund, Chilean Variable Income Series A.

Salmon Awards 2017 •CAP APV Series National Stock Fund category.

• LatAm Bonds Fund, second place in the category: Debt Fund Greater than 365 days International, Emerging Markets, APV Series.

• Strategic Savings Fund, second place in the category: Debt Fund Greater than 365 days International, Flexible Origin, APV Series.

• Cash Fund, third place, category: Debt Fund Less than 90 days National, Series I.

Alas20CEO of the Leading Institution in Responsible Investments - LADISLAO IGNACIO LARRAÍN VERGARA

FUND PRO• LV High Yield Global Bonds

• LV United States

• LV Protection

• LV Quant LatAm

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La Positiva Vida Seguros y Reaseguros S.A. (Peru)


Consorcio Financiero S.A. has a subsidiary, CF Inversiones Peru S.A.C., which owns 40.1%

of La Positiva Vida Seguros y Reaseguros S.A.

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Affected by unexpected political and climatic factors,

the cumulative growth of the Peruvian economy rea-

ched 2.4% at the end of October 2017. This result,

however, placed the Peruvian economy fourth in La-

tin America, surpassed only by Bolivia, Uruguay and

Paraguay. This result was driven mainly by metal mi-

ning (+3.8%), primary manufacturing (+9.0%), fishing

(+30.7%) and the services sector (+3.3%).

As a consequence of a higher level of exports, the ex-

change rate fell 3.57%, from 3,357 Peruvian soles per

US dollar at the end of 2016 to 3,237 Peruvian soles

per US dollar at the end of 2017.

The Lima Stock Exchange advanced by 27% in Peru-

vian soles in 2017. This figure was driven by the better

prices of metals and higher profits in the finance and

consumer sectors.

Economic Context 2017

(estimated)

2.7%GDP GROWTH

1.36%ANNUAL INFLATION

MAIN ECONOMIC

INDICATORS

2017

PERUVIAN INSURANCE MARKET

In 2017, the Peruvian insurance market represented

1.7% of GDP (life insurance 0.8% and general insurance

insurance market was 7.6% above GDP growth. This

result is composed of average growth in the general

insurance market of 7.2% and 7.9% in the life insurance

market.

-

menon known as “Niño Costero” triggered heavy rains,

According to the report from the Peruvian Association

of Insurance Companies, at the end of October 2017,

14,937 claims associated with this natural disaster had

US$ 96 million in retention and US$ 242 million in pay-

ments made.

At the end of 2017, premiums on the Peruvian insuran-

ce market were worth US$ 3,495 million, a growth of

0.6% compared to the previous year. General insuran-

ce premiums reduced by 2.8%, closing the year in US$


1,843 in premiums (52.7% of the total insurance mar-

ket), and life insurance premiums grew by 4.7%, closing

the year in US$ 1,652 million in premiums (47.3% of the

total insurance market).

In 2017, the life insurance market grew by US$ 75 mi-

llion compared to 2016 (+4.7%). This result was due to

-

llion (-62%) in the retirement income business due to

the changes made by congress to the private pension

system. This branch went from representing 12% of the

total life insurance market in 2016 to 5% in 2017. No-

netheless, the private income sector had accelerated

growth in 2017, due to the greater market supply of

and high demand for this product, and by year end it

had grown by US$ 142 million (+3576%), representing

9% of the life insurance market premiums. The second

factor was pension insurance, which represents 19% of

the total life insurance market and a growth of 8.5%

over the previous year. The third market performance

factor involved the life insurance business lines. These

represented 55% of the total market premiums, an in-

crease of US$ 58 million in premiums, or an increase of

6.8% compared to 2016. The branches with the highest

growth were loan repayment protection insurance,

with an increase of US$ 39 million (+12%), individual life

insurance, with US$ 11.4 million (+4%) and supplemen-

tary risk insurance, with US$ 5.6 million (+5%) .

EVOLUTION OF NET INSURANCE PREMIUMS IN THE INSURANCE MARKET (In millions of US dollars)

EVOLUTION OF NET INSURANCE PREMIUMS PER TYPE OF MARKET (In millions of US dollars)

DISTRIBUTION OF PREMIUMS PER TYPE OF MARKET

2,22

51,

174

1,30

5

1,50

7

1,61

2

1,89

0

1,89

5

1,84

3

2,43

9

2,79

8

3,13

3

3,62

4

3,47

3

3,49

5

1,05

1

1,13

4

1,29

1

1,52

1

1,73

3

1,57

8

1,65

2

2011

2011

2012

2012

2013

2013

2014

2014

2015

2015

2016

2016

2017

2017

GENERAL LIFE

GENERAL MARKET

52.7%

47.3%LIFE INSURANCE MARKET

US$3,495 MILLION

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144

Assets at La Positiva Vida were US$ 1,127 million at the

end of 2017, with 7.0% growth, an increase of US$ 74,7

million with respect to 2016. Equity at La Positiva Vida

was US$ 154 million, an increase of US$ 30.5 million,

which represents an increase of 25%.

Finally, net income at La Positiva Vida was US$ 16.0 mi-

llion for 2017, which represents 10% of premiums and

an increase of 69% compared to the previous year.

PRINCIPAL EVENTS IN 2017

The ongoing changes in the economy and the insurance

sector led LPV to make the decision to change its mana-

gement focus and propose four key strategies for deve-

lopment of the business and achieving goals set for 2017.

• Focus on customer experience For two years, the company has been making progress

towards changing its management, from a focus on pro-

cesses to a customer-based focus. In 2017, the company

moments of truth and to have a clear vision of the impro-

vements needed in the short and long term.

LA POSITIVA VIDA CORPORATE GOVERNANCE

The corporate governance of La Positiva Vida is created to

design and manage the regulations, structures and pro-

cesses that carefully drive the organization, based on prin-

ciples of accountability and transparency. It also secures

customers, employees and other stakeholders.

Its Corporate Governance has evolved over the past year,

with the aim of strengthening the comprehensive manage-

ment of its core businesses, and focuses on transforming

the organization. Therefore, the executive committees

decision-making committees, these are: Strategic planning

committee, LPV commercial committee, technology com-

mittee, corporate commercial committee and legal com-

mittee.

BUSINESS MANAGEMENT

La Positiva Vida collected insurance premiums totaling

US$ 154 million, a drop of 4.4% compared to 2016. This

was a result of the private pension reforms in Peru. The

segments that impacted these results were: Retirement

income premiums fell by US$ 15 million compared to

2016, a decrease of 58%, and survivor pension pre-

miums fell by US$ 1.4 million compared to 2015, a de-

crease of 8% However, the remainder of the company

loan repayment protection business, where premiums

grew by US$ 3.9 million, an increase of 21%; private

income, with a growth of US$ 3.3 million in premiums;

pension business where premiums were US$ 24.7 mi-

llion, an increase of 6%; individual life business where

premiums were US$ 1.5 million, an increase of 22%, and

occupational risks where premiums were US$ 1.9 mi-

llion, an increase of 8%.

Therefore, La Positiva Vida achieved a market share of

-

ket.

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06.


Likewise, quickwins have been implemented through the

new digital transformation area as part of the front end ex-

perience, which increase customer satisfaction.

The commercial and technical areas focused their energies

on reaching customers and opening accounts that had a

-

me.

The business structure of La Positiva Vida is divided into

two commercial divisions: Corporate Channel and Retail

-

tional channel, while the second manages the company’s

actions to reach the goals set.

The main focus of the corporate channel was occupational

risks with an emphasis on the corporate segment, given

that the new company La Positiva Entidad Prestadora de

-

Risk Insurance (SALUD).

The main focus of the retail channel was individual life in-

surance through the sale of a new life investment product,

Vida Inversión, and of income insurance through the sale

of the new personal income insurance.

Both products were designed to reach a group of custo-

mers previously not served.

• Standardization and automation of key processes The process area went corporate in the middle of the year,

and since then it has been under the responsibility of the

about future transformations. Its main corporate function

is to have a clear vision of the changes made and propose

ongoing improvements to key processes, all under a single

customer-oriented focus.

Continuing with the corporatization policy initiated in

2016, the company worked under a corporate approach

chain of services that support the core business areas,

providing services to La Positiva Vida and La Positiva Se-

guros Generales, achieving synergies in processes across

the board. As a result of this, in 2017, the company was

able to reduce corporate costs by approximately 3% of

the budgeted amount.

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07.

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07.Financial StatementsWe build long-term relationships because we care about the future for you and your family.


148

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Financial Statements

Statement of Financial Position

Statement of Comprehensive Income

Statement of Cash Flows

Statement of Changes in Equity

Notes to the Financial Statements

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INDEPENDENT AUDITOR’S REPORT

Santiago, March 28, 2018

Dear Shareholders and Directors of Consorcio Financiero S.A.,

We have audited the attached Consolidated Financial Statements of Consorcio Financiero S.A. and subsi-

the related consolidated statements of net income, comprehensive income, changes in equity, and cash

-

information issued by the Chilean Financial Market Commission as described in Note 2 to the consolida-

free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

We conducted our audits in accordance with generally accepted auditing standards in Chile. Those stan-dards require that we plan and perform our work to obtain reasonable assurance that the consolidated

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures

whether due to fraud or error. In making those risk assessments, the auditor considers internal control

to design audit procedures that are appropriate in the circumstances, but not for the purpose of expres-

such an opinion. An audit also includes an assessment of the accounting principles used and of the signi-

-nion.


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Santiago, March 28, 2018, Consorcio Financiero S.A.

2 Opinion

by the Chilean Financial Market Commission, as described in Note 2.

Emphasis on a matter - Accounting basis

-

accounting standards issued by the Chilean Banks and Financial Institutions Supervisor, and the subsi-

statements are prepared in accordance with accounting standards and instructions issued by the Chilean Financial Market Commission. This matter does not change our opinion.

Chilean Tax ID: 12.264.594-0

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STATEMENT OF FINANCIAL POSITION > As of December 31, 2017 and 2016

Assets Nota2017

ThCh$ 2016

ThCh$

Cash and cash equivalents 6 110,527,234 33,324,241 Current tax accounts receivable 7 17,534,110 8,781,776 Related party receivables 8 21,075,174 23,469,278

9 67,316,115 78,517,039 Trade and other receivables 10 2,663,367,479 2,380,446,629

11 7,003,587,839 6,374,052,859 Deferred taxes receivable 12 54,022,068 67,215,755 Investments accounted for using the equity method 13 118,801,098 92,817,012 Intangible assets other than goodwill 14 3,625,260 4,130,044 Goodwill 15 8,212,848 7,922,880 Property investments 16 454,966,383 422,189,570 Property, plant and equipment 17 28,844,414 27,575,270Total Assets 10,551,880,022 9,520,442,353

Related party payables 8 1,028,182 411,786 Current tax liabilities 18 2,808,317 8,422,474

19 105,634,370 79,630,731 Trade and other payables 20 5,690,398,174 5,257,870,089 Deferred tax liabilities 12 65,970,222 58,053,131

21 3,576,423,041 3,150,617,009 22 13,254,713 11,822,099

Other provisions 23 64,021,054 42,950,740 9,519,538,073 8,609,778,059

Equity Issued capital 24 288,141,592 288,141,592 Retained earnings 748,862,063 631,565,783 Other reserves 24 (5,568,465) (9,887,412) Increase for changes in accounting policies - - Equity attributable to shareholders of the parent company 1,031,435,190 909,819,963 Minority interests 906,759 844,331 Total Equity 1,032,341,949 910,664,294

10,551,880,022 9,520,442,353

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__________

Note

02/01/2017 to 12/31/2017

ThCh$

02/01/2016 to 12/31/2016

ThCh$

Net IncomeRevenue from ordinary activities 25 1,398,832,052 1,437,772,889 Cost of sales 25 (1,002,566,916) (1,101,083,121)

396,265,136 336,689,768 Other income 25 9,995,043 8,108,090 Administration expenses 26 (117,886,587) (109,717,249) Other expenses, by function 25 (16,548,908) (21,182,595) Net operating income 271,824,684 213,898,014 Share of net income of associates and joint ventures accounted for using the equity method 7,681,535 5,714,702

(17,288,423) (22,636,899)Losses on indexation (18,777,121) (29,634,417)

- -

measured at fair value - - 243,440,675 167,341,400

Income tax expense (35,007,891) (30,179,948) Net income from continuing operations 208,432,784 137,161,452 Net income from discontinued operations Net income 208,432,784 137,161,452

Shareholders of the parent company 208,532,112 137,144,020 Minority interests (99,328) 17,432

208.432.784 137.161.452 Basic earnings per shareBasic earnings per share on continued operations 29 1,522.67 1,001.40 Basic earnings per share 1,522.67 1,001.40

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COMPREHENSIVE INCOME STATEMENT > As of December 31, 2017 and 2016

Comprehensive income

02/01/2017 to 12/31/2017

ThCh$

02/01/2016 to 12/31/2016

ThCh$

Net income 208,432,784 137,161,452

(2,250,481) (1,912,122) 24,942,669 47,758,126

Income tax related to componentsof other comprehensive income

Held for sale in other comprehensive income (5,801,209) (9,224,059) Total income tax related to componentsof other comprehensive incomeOther comprehensive income 16,890,979 36,621,945 Total comprehensive income 225,323,763 173,783,397

Owners of the parent company 225,316,576 173,762,376 Minority interests 7,187 21,021 Total comprehensive income 225,323,763 173,783,397

__________


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STATEMENT OF CASH FLOWS > As of December 31, 2017 and 2016

__________

As of

2017 ThCh$

As of

2016 ThCh$

Proceeds from the sale of goods and services 760,853 1,599,062 Proceeds from royalties, fees, commissions and other income from ordinary activities 218,338,487 65,595,822

Proceeds from contracts held for brokerage or trading purposes 9,803,397 13,276,949

policies underwritten 440,479,675 842,758,635

Proceeds from other operating activities 47,705,297 44,060,258 717,087,709 967,290,726

Payments for operating activitiesPayments to suppliers for goods and services (74,881,314) (132,468,653)Payments arising from contracts held for brokerage or trading (213,651,867) (336,905,214)Payments to and on behalf of employees (1,397,193) (1,428,877)Payments for premiums and claims, annuities and other obligations arising on policies underwritten (262,215,567) (520,111,981)

Payments for other operating activities (6,372,020) (19,481,483)Payments for operating activities

Dividends received 13,375,444 10,866,731 Interest paid (3,639,948) (12,790,493)Interest received 10,908,020 21,877,975 Income taxes paid (refunded) (28,122,723) (22,665,619)

151,090,541

(67,143) (147,676)Other payments to acquire equity or debt instruments of other entities (3,962,152) -Loans to related companies (394,556) (268,490)Proceeds from disposals of property, plant and equipment 255,525 261,269 Acquisitions of property, plant, and equipment (3,391,460) (2,371,863)Acquisitions of intangible assets (491,065) (830,164)Proceeds from other long-term assets 142,491,512 165,694,734 Acquisition of other long-term assets (135,088,696) (183,307,166)Dividends received 187,215 155,292 Other cash receipts (payments) 25,506 -

3,122

Proceeds from share issues - 93,784,330 Proceeds from long-term loans 102,925,000 -Proceeds from short-term loans 44,244,422 (38,762)Loans from related companies 696,200 1,030,533 Loan repayments (104,227,638) 33,923 Loans to related companies (12,707,497) (11,801,614)Dividends paid (69,955,553) (44,176,039)Interest paid (41,000,291) (19,205,805)

19,626,566 1,497,449 218,931

72,127,319 Cash and cash equivalents at the start of the period 41,591,645 88,373,978 Cash and cash equivalents at the end of the period 113,718,964 41,591,645

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STATEMENT OF CHANGES IN EQUITY > As of December 31, 2017 and 2016

Share capital ThCh$

Exchange variances on

conversion reserves

ThCh$

Reserves for cash

ThCh$

Reserves

or losses

ThCh$

Financial asset

revaluation reserves

ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity

to shareholders of the parent

company ThCh$

Minority interests

ThCh$Equity ThCh$

Balance as of January 01, 2017 288,141,592 13,136,225 631,565,783 909,819,963 844,331 910,664,294

Capital increase - - - - - - - - - - - Net income for the year - - - - - - - 208,532,112 208,532,112 (99,328) 208,432,784

Other comprehensive income

- (2,250,481) - - 19,141,460 - 16,890,979 - 16,890,979 - 16,890,979

Total comprehensive income

19,141,460 16,890,979 208,532,112 225,423,091 225,323,763

Capital increase - - - - - - - - - - - Dividends - - - - - - - (70,000,308) (70,000,308) - (70,000,308)Distribution to shareholders - - - - - - - (21,235,524) (21,235,524) - (21,235,524)

Other increases (decreases) - - - - - (12,572,032) (12,572,032) - (12,572,032) 161,756 (12,410,276)

Total changes for the period 19,141,460 4,318,947 117,296,280 121,615,227 62,428 121,677,655

Balance as of 288,141,592 32,277,685 748,862,063 1,031,435,190 906,759 1,032,341,949

Share capital ThCh$


conversion reserves

ThCh$

Reserves for cash

ThCh$

Reserves

or losses

ThCh$

Financial asset


ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

Minority interests

ThCh$Equity ThCh$

Balance as of January 01, 2016 194,358,392 553,383,000 714,133,797 567,756 714,701,553

Capital increase 93,783,200 - - - - - - - 93,783,200 - 93,783,200 Net income for the period - - - - - - - 137,144,020 137,144,020 17,432 137,161,452

Other comprehensive income - (1,912,122) - - 38,534,067 - 36,621,945 - 36,621,945 - 36,621,945

Total comprehensive income 38,534,067 36,621,945 137,144,020 173,765,965 17,432 173,783,397

Capital increase - - - - - - - - - - - Dividends - - - - - - - (44,092,927) (44,092,927) - (44,092,927)Distribution to shareholders - - - - - - - (14,868,310) (14,868,310) - (14,868,310)

Other increases (decreases) - - - - - (12,901,762) (12,901,762) - (12,901,762) 259,143 (12,642,619)

Total changes 93,783,200 38,534,067 23,720,183 78,182,783 195,686,166 276,575 195,962,741 Balance as of 288,141,592 13,136,225 631,565,783 909,819,963 844,331 910,664,294

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NOTES TO THE FINANCIAL STATEMENTS > As of December 31, 2017 and 2016

NOTE 1 CORPORATE INFORMATION

Consorcio Financiero S.A. (hereinafter “the Company” or “Consorcio”) is the owner of the group and was formed by public deed

exploitation of investments and businesses in movable or immovable property and any other directly or indirectly related activity.

1999 its legal name was changed by public deed to “Consorcio Financiero S.A.” and it was converted from a private company to a public company.

The company is registered in the Securities Register under No. 1103 on March 20, 2013 under the inspection of the Chilean Financial Market Commission (herein, “CMF”).

Chilean Id Company Country

Functional Currency

Direct Interest Indirect Total

99.012.000-5 Compañía de Seguros de VidaConsorcio Nacional de Seguros S.A. Chile Chilean Pesos 99.91% - 99.91%

96.579.280-5 CN Life Compañía de Seguros de Vida S.A. Chile Chilean Pesos 16.72% 83.28% 100.00%

99.500.410-0 Banco Consorcio y Filiales Chile Chilean Pesos 67.80% 32.20% 100.00%96.654.180-6 Compañía de Seguros Generales

Consorcio Nacional de Seguros S.A. Chile Chilean Pesos 99.99% 0.01% 100.00%

Foreign CF Overseas. Cayman Islands Chilean Pesos 99.99% 0.01% 100.00%

76.155.778-5 Consorcio Inversiones Financieras SpA Chile Chilean Pesos 100.00% - 100.00%96.989.590-0 Consorcio Servicios S.A. Chile Chilean Pesos 99.50% 0.50% 100.00%96.983.020-5 Consorcio Inversiones Limitada Chile Chilean Pesos 99.99% 0.01% 100.00%76.008.540-5 Consorcio Inversiones Dos Ltda. Chile Chilean Pesos 99.99% 0.01% 100.00%99.525.220-1 Inmobiliaria Punta Pite S.A. Chile Chilean Pesos - 100.00% 100.00%76.098.056-0 Inmobiliaria Lote 18 S.A. Chile Chilean Pesos - 84.40% 84.40%76.493.376-1 Const. e Inmob.Presidente Riesco S.A. Chile Chilean Pesos - 84.40% 84.40%Foreign CF Inversiones Perú S.A.C. Perú Peruvian Sol 99.99% 0.01% 100.00%76.515.767-6 Inversiones Continental Bio Bio SpA Chile Chilean Pesos - 60.00% 60.00%

statements.

ShareholdersChilean Id

Shares %Accumulated

%

BANVIDA S.A. 96.882.560-7 57,551,628 42.0 42.0P&S S.A. 96.816.350-7 57,551,628 42.0 84.0IFC 59.120.060-7 8,057,902 5.8 89.9BP S.A. 96.904.900-7 7,677,553 5.6 95.5CALVERTON SPAIN S L 59.220.560-2 3,223,161 2.4 97.9EL BOSQUE FIP 76.246.548-5 1,445,096 1.1 98.9TOBALABA FIP 76.246.552-3 1,445,095 1.1 100.0

136,952,063 100.0

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and Financial Institutions Supervisor, respectively.

The information contained in these Consolidated Financial Statements is the responsibility of the Company’s Board of Directors, and they were approved at the Board meeting held on March 28, 2018.

The Company’s risk rating is the following:

Risk Rating Agency Name

Risk Rating Agency Id Registry

Item Risk Rating Rating Date

79.836.420-0 1Bonds Type A Bonds Type BSolvency

AA-AA-AA-

9/29/2017

79.844.680-0 9Bonds Type A Bonds Type BSolvency

AAAAAA

11/30/2017

The external auditors of the parent company are Pricewaterhouse Coopers Consultores, Auditores SpA.

1.2. First adoption of international financial reporting standards

S.A., Consorcio Inversiones Limitada, Consorcio Inversiones Dos Ltda., Inmobiliaria Lote 18 S.A., Inmobiliaria Punta Pite, Const. e Inmobiliaria Presidente Riesco S.A., CF Inversiones Perú S.A.C. and Inversiones Continental Bio Bio SpA., as of December 31, 2017 were prepared in accordance with International Financial Reporting Standards (IFRS).

2022 dated May 17, 2011 (and subsequent amendments) to ensure that the prudent criteria of this commission prevails over IFRS where they disagree.

On November 9, 2007 the Chilean Banks and Financial Institutions Supervisor issued the new “Compendium of Accounting Standards”

NOTE 2 BASIS OF PREPARATION

The preparation of the Consolidated Financial Statements as of December 31, 2017 required that Management has used its best knowledge and understanding in the process of applying standards and interpretations to the facts and circumstances, although they may be subject to change. For example, amendments to existing standards and additional interpretations may be issued by the

issued by the Chilean Financial Market Commission and the Chilean Banks and Financial Institutions Supervisor.

2.1 Consolidation of the Financial Statements The preparation of the Consolidated Financial Statements includes all those companies where Consorcio owns directly or indirectly

company controlled.

interests” in the consolidated comprehensive income statement and in the statement of changes in equity.

As already mentioned the Consolidated Financial Statements as of December 31, 2017 include Banco Consorcio and subsidiaries

standards and instructions issued by the Chilean Financial Market Commission.


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2.2 Accounting Period These Consolidated Financial Statements include:

-

- Consolidated net income and comprehensive income statements for the years ended December 31, 2017 and 2016.

- Consolidated statements of changes in equity for the years ended December 31, 2017 and 2016.

-

-

NOTE 3 SIGNIFICANT ACCOUNTING POLICIES

3.1.1 Cash and cash equivalents These are cash balances and bank current accounts, high liquidity investments with low risk of change in value, whose maturity terms is no greater that three months from the acquisition date. In addition, plus (minus) the corresponding net balance for transactions pending settlement.

3.1.2 Functional currency

exchange rate to the functional currency at the date of the transaction. Monetary assets and liabilities denominated in foreign

recorded as a charge or credit to net income. The statements of net income expressed in foreign currency are converted at the monthly exchange rate of the functional currency.

3.1.4 Current & Deferred Taxes

when they arise from a transaction that has been directly recognized in equity, in which case they are initially recorded as a charge

the book values of assets and liabilities and their tax values. Deferred tax assets and liabilities are measured on the basis of the tax

in tax rates are recognized in deferred taxes from the date on which the law approving those changes was published.

estimates to be made. It also requires Management to exercise its judgment when implementing the Company’s accounting policies.

3.1.5 Earnings per share

monthly weighted average of the Company’s issued shares.

The Company’s diluted earnings per share was the same as its basic earnings per share.

3.1.6 Minimum dividend The Company has a provision for minimum dividends equivalent to 30% of the net income for the period.

3.1.7 Estimates and judgments

Estimates and assumptions are reviewed regularly by the management of the companies, in order to quantify some of their assets, liabilities, income, expenses and uncertainties. Changes in accounting estimates are recognized in the period in which the estimates

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- The useful lives of physical and intangible assets

- Provisions

- Current taxes & deferred taxes

- The fair value of assets and liabilities

- Technical insurance reserves

- Provisions for loan losses

Trade and other receivables include the main debtors related to the business of each segment described in Note 5.

3.1.9 Goodwill Goodwill represents the excess of the acquisition cost of a business combination over the Company’s share in the fair value of

accumulated impairment losses. Goodwill generated on the acquisitions of joint ventures is included in the book value of the investment.

Goodwill generated on the acquisitions of joint ventures is evaluated for impairment as part of the investment, when there are indications that the value of the investment could be impaired.

An impairment loss is recognized for the amount by which the book value of the cash-generating unit exceeds its recoverable value, where this is the higher of the fair value of the cash-generating unit less sale costs, and its value in use.

Recognized impairment losses are not reversed in subsequent periods.

3.1.11 New accounting pronouncements

Amendments to IFRS Mandatory application date

Annual periods beginning on or after January 01, 2017IAS 12, Income tax Annual periods beginning on or after January 01, 2017IFRS 12, Disclosure of interests in other entities Annual periods beginning on or after January 01, 2017

New IFRS Mandatory application date

IFRS 9, Financial instruments Annual periods beginning on or after January 01, 2018IFRS 15, Revenue from contracts with customers Annual periods beginning on or after January 01, 2018IFRS 16, Leases Annual periods beginning on or after January 01, 2019IFRS 17, Insurance contracts Annual periods beginning on or after January 01, 2021IFRIC 22, Transactions in foreign currency and advance payments

Annual periods beginning on or after January 01, 2018

IFRIC 23, Uncertain tax positions Annual periods beginning on or after January 01, 2019.

Amendments to IFRS Mandatory application date

IFRS 2, Share-based payments Annual periods beginning on or after January 01, 2018 IFRS 15, Revenue from contracts with customers Annual periods beginning on or after January 01, 2018 IFRS 4, Insurance contracts Annual periods beginning on or after January 01, 2018 IAS 40, Investment property Annual periods beginning on or after January 01, 2018 IAS 28, Investments in associates and joint ventures Annual periods beginning on or after January 01, 2018 IFRS 9, Financial instruments Annual periods beginning on or after January 01, 2019

Management does not expect that the standards, amendments and interpretations described above will have a material impact on


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3.2.1 Assets at fair value

which applies IAS 39 as required by its regulator.

Financial assets that do not qualify to be valued at amortized cost, are measured at fair value with changes taken to net income.

The fair value of an asset on a given date is the amount for which that asset could be exchanged on that date between independent, knowledgeable, willing parties in an arm’s length transaction. The most common and objective reference to the fair value of an asset is the price paid in an organized and transparent market (“quoted price” or “market price”). A market is active when quoted prices are readily and regularly available, produced on an independent basis and represent actual transactions.

When no market price exists, the fair value of an asset is calculated based on recent transactions for similar instruments.

3.2.2 Assets at amortized cost

met:

-

- plus interest on the balance of the outstanding capital.

remaining life.

3.2.3 Investments in equity instruments

at fair value with changes taken to other comprehensive income. Dividends are recognized in net income.

3.2.4 Property, plant and equipment Fixed assets are valued at acquisition cost, which includes the additional costs required to bring the asset into use, less accumulated depreciation and any impairment losses. Impairment losses, if any, will be recorded as an expenditure in the net income statement. Depreciation is recorded in the net income for the period using the straight line method based on the estimated useful lives of assets after having deducted their respective residual value.

3.2.5 Asset impairment

amount of the asset is estimated in order to determine the amount of impairment.

is reported as an asset when its fair value is positive, and as a liability when it is negative, the details of these instruments are presented in Note 21.

21.

3.2.8 Provisions Provisions are recognized when:

- The Company has a present legal or implied obligation as a result of past events;

- It is likely that a disbursement will be necessary to settle the obligation;

- The amount has been estimated reliably.

When there are a number of similar obligations, the likelihood that a disbursement will be necessary will be assessed taking these obligations as a whole. A provision is recognized even if the probability of a disbursement on an item included in the same class of obligations is small. Provisions are valued at the current value of the disbursements that are expected to be required to settle the

3.2.9 Revenue recognition Revenue is recognized in the statement of net income when it is probable that economic rewards will be received and can be reliably measured.

Ordinary revenue associated with the provision of services is recognized considering the degree of progress in the provision of

reliability. This requires that the revenue value can be reliably assessed, that it is likely that the company will receive the economic

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reliability, and that the costs already incurred in providing the service, as well as those remaining to complete it, can be reliably valued.

3.3. Insurance Companies 3.3.1 Financial Investments 3.3.1 .1 Financial Assets at fair value

instruments in accordance with General Regulation (NCG) 311 and its amendments.

Financial assets that do not qualify for the category of amortized cost are measured at fair value with changes taken to net income, in accordance with the General Regulation (NCG) 311 and its amendments issued by the Chilean Financial Market Commission.

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction (IFRS 1).

a) National variable income a.1) Registered shares with an adjusted presence The shares registered in the Share Register and listed on a country’s stock exchange shall be valued at the market value with changes taken to net income, when the adjusted proportion of those shares traded on that exchange is equal to or greater than 25% at the

In accordance with General Regulation (NCG) 311 and its amendments, the market value means the weighted average price for the

in this calculation will be those that total an amount equal to or greater than 150 UF.

a.2) Other shares Shares that do not comply with the conditions established in the previous paragraph are valued according to the general criteria established in the IFRS, being IFRS models of fair value.

a.3) Investments in mutual funds

debit or a credit.

a.4) Investments in investment funds

proportion of those funds equal to or greater than 20% calculated in the same manner as for national shares shall be valued at the weighted average price for the number of funds traded, as informed by the Santiago Stock Exchange. Investments in investment funds that do not comply with presence requirements shall be valued at their Economic Value. If the Economic Value of these funds is not reported, these shall be valued at their Book Value.

b) Foreign variable income b.1) Shares traded on a stock exchange The shares of foreign companies traded on a foreign stock exchange are valued at market value with changes taken to net income.

in the stock exchange where it was purchased.

b.2) Shares not traded on a stock exchange Shares that are not traded on a stock exchange are valued according to the general criteria established by the IFRS, being their own models of fair value mentioned above in the paragraph referring to other shares.

b.3) Investments in funds Investments in mutual funds and investment funds constituted in the country, whose assets are invested in foreign securities referred to Article 21 No. 3 (e) of D. F. L. 251 dated 1931 are valued at the closing price of the fund on the last trading day of the

models of fair value with changes taken to net income.

3.3.1.2 Financial assets at amortized cost

- plus interest on the balance of the outstanding capital.

-

According to the General Regulation 311 and its amendments issued by the Chilean Financial Market Commission, companies value


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3.3.1.3 Hedging

The derivatives to hedge shares and investment funds of currency forwards US dollar-Chilean peso and US dollar-UF are recorded at fair market value.

swaps are accounted for at amortized cost, minus the assets and liabilities according to the contractual rates, the value of the

3.3.1.4 Investment derivatives Investment derivatives are all those that do not meet the conditions of hedging derivatives as indicated by the current legislation and are valued at fair value with changes taken to net income, in accordance with IFRS models.

Fixed Income Investments whose assets support fund value reserves in CUI insurance will be valued at Amortized Cost, and Variable Income Investments at Fair Value.

3.3.2 Asset impairment

amount of the asset is estimated in order to determine the impairment amount.

estate accounts are made on the basis of group analysis. Group evaluation will be applied to groups of loans with homogeneous characteristics in terms of type of debtors and agreement conditions, in order to establish necessary provisions to cover the portfolio risk. This evaluation will use technically based estimates and will follow prudential criteria, both with regard to the payment behavior of the group in question as to the recovery of their delinquent loans.

The company calculates legal impairment for mutual mortgages in accordance with General Regulation 371 dated December 9,

The allowance or impairment on premiums receivable from policyholders is calculated in accordance with the provisions of Circular No. 1499 dated September 2000 and its subsequent amendments issued by the Chilean Financial Market Commission. Assets are

the asset is estimated in order to determine the impairment amount.

The provision or impairment in claims receivable from reinsurers is calculated in accordance with the provisions of Circular 848

estimated in order to determine the impairment amount.

portfolio will be analyzed regularly to assess whether to apply impairment if this appears to be permanent.

Provisions on rental income receivable are created when it is more than 60 days overdue. Provisions on property taxes due under a rental contract are created when they are more than 60 days overdue. Where overdue amounts due have been renegotiated, the provision will be maintained in its entirety and only reversed against receipt of funds.

Provisions on overdue lease installments are created in the same month the installment fell due. The provision will include interest, capital and value added tax (according to the legal regulations). Provisions on property taxes under a leasing contract are created when they are more than 60 days overdue. Where overdue amounts due have been renegotiated by the same company (excluding debt novations), the provision will be maintained in its entirety and only reversed against receipt of funds.

3.3.3 Investment and own use property Investment properties are land and buildings held by Companies to obtain economic rewards by renting them, from their capital appreciation, and for their own use. In accordance with the provisions of General Regulation (NCG) 316, real estate investments are valued as follows:

National real estate is valued at the lesser of:

- Accountants A.G., and

- The commercial value, which is the lower of two professional appraisals.

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Leasing contract contracts that transfer substantially all the risks and rewards inherent in the ownership of those leased assets are

Real estate investments subsequently leased are valued at the lesser of:

- The residual value of the particular contract calculated in accordance with the regulations issued by the Institute of Chilean Accountants A.G.,

-

- The commercial value, which is the lesser of two professional appraisals.

Investments in real estate abroad are valued at the lesser of:

- accepted accounting principles established by the Institute of Chilean Accountants A.G., and

- The professionally appraised value.

calculated according to the regulations of the Institute of Chilean Accountants A.G., until it is completed and can be commercially appraised in which case it will be valued accordingly.

Fixed assets are valued at acquisition cost, which includes the additional costs required to bring the asset into use, less accumulated depreciation and any impairment losses.

Impairment losses, if any, will be recorded as an expenditure in the statement of net income.

Depreciation is recorded in the net income for the period using the straight line method based on the estimated useful lives of assets after having deducted their respective residual value.

Goodwill is the excess cost of an investment in a subsidiary or an associate over the Company’s participation in the fair value of its

impairment loss.

Intangible assets acquired separately are measured at acquisition cost. Intangible assets are recorded at cost less accumulated amortization and accumulated impairment loss, if any.

during their estimated useful economic lives, and their deterioration is evaluated each time there is an indication of impairment.

of these reviews are treated as changes in accounting estimates.

3.3.6 Insurance Operations Revenue is recognized in the statement of net income when it is probable that economic rewards are received and can be reliably measured.

I. Direct Premiums

of premiums are only deducted for those technical concepts related to favorable experiences.

II. Accepted Premiums These are premiums that companies accept from other insurers or from reinsurers as reinsurers, net of cancellations and contractual returns.

III. Assigned Premiums These are the direct premium or accepted premium portions that companies transfer to reinsurers through proportional reinsurance contracts.

a) Embedded derivatives in insurance contracts Companies perform an analysis of their marketed insurance products to identify any embedded derivatives and how they should

associated with the product in each case.


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b) Acquisition costs Costs that are directly associated with the sale of insurance are acquisition costs. Acquisition costs include brokerage commissions and those direct costs associated with the sale of insurance which would not have been incurred had insurance contracts not been issued (direct and fully variable costs), such as inspection costs for the insured item. Acquisition costs are recognized immediately in net income.

c) Technical Reserves c.1) Current Risk Reserve For insurance coverage valid up to 4 years, current risk reserves are calculated in accordance with General Regulation No. 306 and the amendments in General Regulation No. 320 issued by the Chilean Financial Market Commission. This includes 100% of direct premiums. The reserve calculated as the proportion of unearned premiums, based on the proportion of future coverage to be

premium, or the premium equivalent to the policy grace period, if greater.

Notwithstanding the foregoing, General Regulation 306 establishes that these changes apply to new risks. If a policy was issued or

Financial Market Commission.

Likewise the Company does not perform the standard calculation on credit insurance whose validity is longer than a year, or where it is paid in a single premium. In these circumstances the reserves are calculated in accordance with General Regulation 306 and the amendments in General Regulation 320 and in General Regulation 359 issued by the Chilean Financial Market Commission.

The Company is authorized to calculate a mathematical reserve for credit insurance with a validity longer than a year or paid with a single premium.

c.2) Mathematical Reserve Mathematical reserves are calculated in accordance with General Regulation 306 and its subsequent amendments issued by the Chilean Financial Market Commission. This is the present value of future payments on claims on policies valid for longer than four years, less the present value of future premiums. The current value of both components is calculated on the basis of the tables of

gross of reinsurance, so they do not include any assigned reinsurance which is recognized as an asset.

Exceptionally, and with prior authorization from the Chilean Financial Market Commission, the mathematical reserve is calculated using the standard methodology for credit insurance with a validity longer than a year or paid with a single premium.

c.3) Disability and Survival Insurance Reserve (SIS) The reserve is calculated according to the instructions in General Regulation 318 dated 2011, the amendments in General Regulation 374, and in General Regulation 243 dated 2009. Any reinsurance that exists is not included in the calculation of technical reserves. The technical reserve is calculated in gross terms without deduction for reinsurance. The participation of reinsurance in the claims reserve or the premium reserve is recognized as a reinsurance asset, which is subject to an evaluation of impairment, in accordance with the general rules of IFRS. The foregoing is notwithstanding the deduction of assigned reinsurance from technical reserves, carried out for purposes of compliance with the requirements of risk equity and borrowing limits established in the Decree Law

Commission.

c.4) Annuities and Private Income Reserve This reserve is calculated in accordance with General Regulation 318 dated September 2011 and its subsequent amendments,

amendments in General Regulation 374 applicable to new policies from March 2015. Therefore, the technical reserves on pension income insurance or private income insurance is calculated according to the regulations contained in Circular 1512 dated 2001, and

the following adjustments:

a) The technical reserve discount interest rate does not take account of the Company’s matching measurement. Furthermore, as established by General Regulation 374, the discount rate is the lower of the Equivalent Cost Rate and the Sales Rate at the date

b) The reserve matching adjustment described in Section IV of Circular 1512 is not included, and therefore the Company only

c)

the reinsurance premium and the asset created according to the foregoing is immediately taken to net income. The foregoing is notwithstanding the deduction of assigned reinsurance from technical reserves, carried out for purposes of compliance with the requirements of risk equity and borrowing limits established in the DFL N° 251 dated 1931, which is subject to the provisions of

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d)

e) Market Commission with the corresponding improvement factors at the calculation date.

f)

regulations, with the following adjustments:

a) The technical reserve discount interest rate does not take account of the Company’s matching measurement. Furthermore, as established by General Regulation 374, the discount rate is the lower of the Equivalent Cost Rate and the Sales Rate at the date


c)

the reinsurance premium and the asset created according to the foregoing is immediately taken to net income. The foregoing is notwithstanding the deduction of assigned reinsurance from technical reserves, carried out for purposes of compliance with the requirements of risk equity and borrowing limits established in the DFL N° 251 dated 1931, which is subject to the

d)


f)

g) Mortality tables to be used in the calculation of the base technical reserve and following instructions of NCG 318 will be calculated based on the alternative incorporation procedure contemplated in Circular No. 2197. This procedure incorporates the new mortality tables CB-2014, RV-2014, B-2014 and MI-2014 in a 6-year period. After that period, these 2014 tables must be fully recognized.

current regulations, with the following adjustments:

a) The technical reserve discount interest rate does not take account of the Company’s matching measurement. Therefore, the

1512.


c)

the reinsurance premium and the asset created according to the foregoing is immediately taken to net income. The foregoing is notwithstanding the deduction of assigned reinsurance from technical reserves, carried out for purposes of compliance with the requirements of risk equity and borrowing limits established in the DFL N° 251 dated 1931, which is subject to the

d)



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f)

g) B-2014 and MI-2014 will be gradually applied, in accordance with the gradual recognition mechanism implemented by the

Circular No. 1512 and other instructions issued by the Chilean Financial Market Commission applicable on the date the standard

However, the following has been taken into consideration:

a)

concepts. The assigned reserve is reported as an assigned reinsurance asset which is subject to an evaluation of impairment, in accordance with the general rules of IFRS. The foregoing is notwithstanding the deduction of assigned reinsurance from technical reserves, carried out for purposes of compliance with the requirements of risk equity and borrowing limits established

by the Chilean Financial Market Commission.

b) B-2006 and MI-2006 will be gradually applied, in accordance with the gradual recognition mechanism implemented by the Company.

c)

The incorporation of the new mortality tables CB-2014, RV-2014, B-2014 and MI-2014, will be carried out as stipulated in Circular 2197.

is based on the transfer of tables RV2009, B2006, MI 2006 to the new 2014 tables for a period of 6 years, incorporating 1/24th of the

The incorporation of Mortality tables RV2004 for causes is stipulated based on the criteria indicated in Circular 1749.

Change in gradualness methodology requested by the Board. The company applied the incorporation mechanism of tables B06 and MI06 established in circular CMF 1512, 2001, and amendments. This mechanism stipulates a maximum incorporation of 0.5% of reserves with original tables until 2028, and its application in the

to the last year. For this reason, the Company’s Board of Directors agreed to propose to CMF an alternative mechanism similar to the one established in circular CMF 1857, year 2008. This mechanism is based on maintaining the incorporation to date and constituting the remainder in ongoing installments until the year 2028. This will accelerate the incorporation of these tables with respect to the

September 2017.

Currently the incorporation between cause tables RV2009 and RV2004 is complete, with 100% incorporation of the 2009 Mortality tables for Men and Women, with their respective improvement factors.

c.5) Claims Reserve Claims reserves are calculated in accordance with General Regulation 306 and its subsequent amendments issued by the Chilean Financial Market Commission. Claims are recorded without discounting any applicable reinsurance. The reinsurer’s obligation is accounted for as a Company asset, which is subject to an evaluation of impairment, in accordance with the general rules of IFRS and

Claims reserves take into account reported claims, and claims that have occurred but not yet been reported (IBNR).

- The reported claims reserve is calculated using the best estimate of claim costs and includes all claims settled but not paid, claims settled but disputed by the policyholder, and claims following the settlement process.

- The reserves on claims that have occurred but not yet been reported is calculated using the standard method, being the development method of claims incurred, also called “the claims triangle method”.

C.6) Earthquake Catastrophe Reserve This reserve is constituted in addition to the current risk reserve and is determined based on the insured amounts retained in insurance granted that cover the earthquake risk in force at the close of the Financial Statements. It is calculated in accordance with the provisions of General Regulation 306 and subsequent amendments.

the Chilean Financial Market Commission.

associated costs.

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This test is based on the “Combined Ratio” that relates technical disbursements to the premiums received in relation to them, using

concept net of reinsurance, so risk transferred to the reinsurer is recognized for purposes of this calculation.

reserve, which will be recognized as a loss in the period in which it was detected. This reserve must be recognized gross within liabilities, and the participation of the reinsurer recognized as an asset.

the provisions contained in Ordinary Bulletin N° 1937 issued by the Chilean Financial Market Commission.

c.8) Adequate Liabilities Reserve Adequate liabilities reserves are calculated in accordance with General Regulation 318 and its subsequent amendments issued by

by performing the “Liability Adequacy Test” (LAT). This test uses international criteria in common use and the concepts of IFRS 4 associated with the test. The assumptions used by the Company used are reviewed at the close of every year, in order to evaluate any change in the value of the assumed obligations. When this test detects a shortfall in the technical reserves, the Company creates the corresponding additional technical reserve. Otherwise, no adjustment is made to the technical reserves.

net in liabilities. This test is performed according to the technical and actuarial criteria agreed by the Company. Notwithstanding the foregoing, and according to a regular evaluation of the concepts analyzed within this test, additional reserves previously created can be reversed, with any changes taken to the Company’s net income.

reserve, the Company should evaluate whether that test complies with the requirements to replace the liability adequacy test. If so,

to replace the liability adequacy test, so it has been omitted for policies with a Current Risk reserve.

c.9) Adequate Liabilities Reserve The adequate liabilities reserves are calculated in accordance with General Regulation No. 318 and the amendments in General Regulation No. 320, in General Regulation No. 374 and in General Regulation No. 359 issued by the Chilean Financial Market

Adequacy Test” (LAT). This test uses international criteria in common use and the concepts of IFRS 4 associated with the test. The assumptions used by the company used are reviewed at the close of every year, in order to evaluate any change in the value of the assumed obligations. When this test detects a shortfall in the technical reserves, the Company creates the corresponding additional technical reserve. Otherwise, no adjustment is made to the technical reserves.

by the Company, which are recognized net in liabilities. This test is performed according to the technical and actuarial criteria agreed by the Company. Notwithstanding the foregoing, and according to a regular evaluation of the concepts analyzed within this test, additional reserves previously created can be reversed, with any changes taken to the Company’s net income.

reserve, the Company should evaluate whether that test complies with the requirements to replace the liability adequacy test. If so,

to replace the liability adequacy test, so it has been omitted for policies with a Current Risk reserve.

For the reserves on claims that have occurred but not yet been reported, this test is performed according to the technical and actuarial criteria agreed by the company. Notwithstanding the foregoing, and according to a regular evaluation of the concepts analyzed within this test, additional reserves previously created can be reversed, with any changes taken to the Company’s net income.

C.10) Other Technical ReservesThese reserves cover debts due from policyholders, in accordance with the provisions of Circular 2022, and other reserves created by the Company in accordance with current regulations.

This heading includes the reserves generated as a result of the liability adequacy test, which are recorded net of reinsurance.

The adequate liabilities reserves are calculated in accordance with General Regulation No. 306 and the amendments in General Regulation No. 320 issued by the Chilean Financial Market Commission. The company evaluates the adequacy of these reserves at

the concepts of IFRS 4 associated with the test. The assumptions used by the company used are reviewed at the close of every year, in order to evaluate any change in the value of the assumed obligations. When this test detects a shortfall in the technical reserves, the Company creates the corresponding additional technical reserve. Otherwise, no adjustment is made to the technical reserves.

This test includes the options or rewards for policyholders and the agreed guarantees given by the company. Also the risks

and the participation of the reinsurer is recognized in assets, if applicable. This test is performed according to the technical and actuarial criteria agreed by the Company. Notwithstanding the foregoing, and according to a regular evaluation of the concepts analyzed within this test, additional reserves previously created can be reversed, with any changes taken to the Company’s net income.


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Current Risk Reserves General Regulations 306 establish that:

reserve, the Company should evaluate whether that test complies with the requirements to replace the liability adequacy test. If so, the liability adequacy test is not necessary.”

has been omitted for policies with a Current Risk reserve.

Claims Reserves that have Occurred but not yet Been Reported The company tests the claims reserves that have occurred but not yet been reported. This test is based on the principles of the chain ladder actuarial method to determine a LAT Reserve, which is compared with the method determined in accordance with the standards established in General Regulations 306. If the LAT Reserve is higher, an Additional Reserve is recorded under the “Other Technical Reserves” concept.

C.11) Reinsurer’s Share of Technical Reserves This reserve is calculated on gross direct premiums without discounting reinsurance, in accordance with General Regulation No. 306 and 318 and the amendments in General Regulation No. 320, in General Regulation No. 374, and in General Regulation No. 359. When risk is transferred to a reinsurer, an asset is recognized for this assignment, whose calculation and recognition is consistent with that applied to the RRC. This asset is subject to an evaluation of impairment, in accordance with the general rules of IFRS. While the corresponding premium is not transferred to the reinsurer, the corresponding liability is calculated (“Amounts owed to reinsurers”), although this is not a technical reserve. In any case, the reinsurance asset may not exceed the premium ceded to the reinsurer.

c.12) Matching Reserve

Regulation 318 issued by the Chilean Financial Market Commission.

3.3.7 Participation in associates

when the Company has between 20% and 50% of the voting rights, as stated in IAS 28 “Investment in Associates”. Investments in associates are accounted for under the equity method and are initially recognized at cost. Investments in associates are presented

in the net income of the associate. When there has been a change recognized directly in the equity of the associate, companies

resulting from transactions between companies and the associate are eliminated when measuring the investment in the associate.

3.3.9 Provisions Provisions are recognized when:

- The Company has a present legal or implied obligation as a result of past events;

- It is likely that a disbursement will be necessary to settle the obligation;

- The amount has been estimated reliably.

When there are a number of similar obligations, the likelihood that a disbursement will be necessary will be assessed taking these obligations as a whole. A provision is recognized even if the probability of a disbursement on an item included in the same class of obligations is small.

Provisions are valued at the current value of the disbursements that are expected to settle the obligation using a before-tax interest

3.3.10 Income and investment costs a) Financial assets at fair value

income.

Dividend income from shares is recognized in net income when it is declared.

b) Financial assets at amortized cost

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value.

3.3.11 Claims costs Claims costs are the total amount of claims accrued during the year from direct coverage provided by companies, less the participation of reinsurers in accordance with valid contracts.

3.3.12 Brokerage income Brokerage income arises from commission on insurance selling activities, and reinsurance trading.

remaining life.

3.4.1.2 Assets measured at fair value The fair value of an asset or a liability on a given date is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction (IFRS 1). The most common and objective reference to the fair value of an asset or liability is the price paid in an organized and transparent market (“quoted price” or “market price”).

When there is no market price to determine the fair value amount for a particular asset or liability, the fair value is estimated using recent transactions of similar instruments.

3.4.1.3 Assets valued at acquisition cost Corrected acquisition cost is the acquisition cost of an asset less any impairment losses.

exception of:

-

- Investment instruments available for sale, which are measured at fair value.

They are accounted for when billed and remain until paid. Commissions and exchange rights receivable from customers and counterparty brokers are also included. In addition, accounts receivable on installment transactions from repurchase agreements on behalf of the customer are included under this heading.

Investment instruments are initially recognized at cost. Instruments available for sale are then valued at their fair value using market

When these investments are sold or deteriorate, the accumulated fair value adjustments in equity are transferred to net income

Investments held to maturity are recorded at amortized cost plus interest and accrued adjustments, less provisions for impairment when the amount so recorded is greater than the estimated recovery amount.

The interest and indexation on investments held to maturity and instruments available for sale are included under the heading “Income from interest and indexation”.

of that market are recognized on the date the deal is struck, being the date on which the purchase or sale of that asset becomes a commitment.

3.4.2.1 Traded securities

value appraisal, as well as the results of trading activities, are included in the statement of net income.

Accrued interest and indexation are presented in the statement of net income.


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that market are recognized on the date the deal is struck, being the date on which the purchase or sale of that asset becomes a commitment. Any other purchase or sale is treated as a derivative (forward) until they are liquidated.

Financial derivatives contracts which include foreign currency and UF forwards, interest rate futures, currency and interest rate

models and option value models, as appropriate. Derivatives contracts are reported as an asset when its fair value is positive, and as a liability when this is negative, under the heading “Financial derivatives contracts”.

In the event of derivative instruments traded over-the-counter (OTC), the fair value calculated based on market prices is adjusted for the counterparty credit risk (credit value adjustment, CVA) through an internal methodology based on the current and potential credit exposure estimate, admissible mitigating factors, the probabilities of default and loss given the breach for the residual term of the contract, according to the counterparty credit rating, in accordance with the provisions of Banco Consorcio’s Valuation Policy.

derivative instrument.

in the statement of net income.

Ch$ 15,219 million, respectively.

million, respectively.

As of December 31, 2017 and 2016 Banco Consorcio and its subsidiaries did not have direct transaction costs that impacted the

Loans and receivables from customers are shown net of credit risk provisions and are presented in Trade and other receivables, see note 10.

3.4.4 Factoring Operations Factoring operations are valued at the amounts disbursed by the bank in exchange for invoices or other trade instruments that represent loans, and delivered to the bank by the assignor.

instruments are assigned without the assignor’s responsibility, the bank bears the insolvency risk of the party obliged to pay.

Factoring transactions are presented as part of loans, and disclosed in note 10.

The recoveries of loans and accounts receivable from customers, previously provided against, are recorded directly in net income and presented as a reduction in credit risk provisions.

3.4.6 Interest and indexation income and expenditure

However, interest and indexation on overdue loans and those that are not yet overdue but with a high risk of irrecoverability are not accrued, in accordance with the policy of prudence. They are accounted for when they are received.

3.4.7 Commission income and expenditure

- Those that arise from a single event, on the date that event occurred.

- Those that arise on transactions or services that occur over a period of time, during the life of such transactions or services.

-

in an increase in equity, and are therefore not considered revenue. However, commission on these transactions is considered as revenue.

3.4.8 Impairment3.4.8.1 Financial assets

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in equity is transferred to the statement of comprehensive income.

The reversal of an impairment loss occurs only if this can be objectively linked to an event that occurred after the loss was recognized.

directly in equity.

with the exception of 2016.

indications of impairment. If such evidence is detected, then the recoverable amount of the asset is estimated.

3.4.9 Investments in companies

value.

Intangible assets held by the bank are recorded at cost, less accumulated amortization, in accordance with their remaining useful life.

asset. All other disbursements, including goodwill and internally generated trademarks, are recognized in the income statement when they occur.

3.4.11 Fixed assets

directly to the acquisition of the asset.

heading).

Depreciation is recognized in the statement of net income based on the straight-line depreciation method on the useful lives of each

3.4.12 Credit risk provisions The necessary provisions to cover the risk of loan losses including contingent loans are calculated and recorded every month, in

There are two methods for calculating provisions at the Bank:

The analysis of individual debtors is used for the entire business banking loan portfolio, where business banking includes all commercial loans under the following categories:

- Factoring Receivables

- Commercial Loans

- Performance Bonds

- Lines of Credit

- Interbank Loans

- Leasing receivables

The analysis of grouped debtors is used for the entire loan portfolio of Personal Banking, where Personal Banking includes all consumer loans, including renegotiated loans, and housing loans. Housing loans include general purpose mutual endorsable mortgages. This analysis also includes purchased mortgage loans.

Model 1: Individual provisions In accordance with the provisions of Chapter B1 of the SBIF Accounting Standards, the Commercial or Business banking portfolio is divided into 3 portfolios:

- Normal Portfolio:


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This portfolio contains all the customers who are not in the substandard portfolio, nor the defaulted portfolio.

- Substandard Portfolio:their capability to pay, and over which there are reasonable doubts about the repayment of capital and interest within the

30 days.

- Defaulted Portfolio: This portfolio includes loans where the possibility of recovery is considered remote, and there is evidence of a deteriorated or inexistent ability to pay. This portfolio includes customers that have arrears of interest or capital exceeding 90 days on any outstanding loan.

Risk categoriesQualitative and quantitative elements are assessed in order to select a borrower’s risk category and the required provision:

- The business situation and the industry or sector situation

- Directors and managers

-

- The payment performance.

Each risk category includes the following general concepts:

-

- in the market where they operate.

- B1 and B2 are borrowers with Low Credit Quality that have been irregular in meeting their payment obligations of late.

- B3 and B4 are borrowers with Minimal Credit Quality, but the maximum payment arrears does not exceed 90 days.

Categories from C1 to C6 are used for borrowers whose loans have deteriorated and therefore are in default.

The provision percentages by risk category are:

Portfolio typeRisk category of

Provision %

Normal Portfolio A1 0.0360A2 0.0825A3 0.2187A4 1.7500A5 4.2750A6 9.0000

Substandard Portfolio B1 13.8750B2 20.3500B3 32.1750B4 43.8750

The Bank assigns the following provision percentages to borrowers in the defaulted portfolio.

Risk category Range of expected lossProvision

%

C1 Between 0% and 3% 2C2 Between 3% and 20% 10C3 Between 20% and 30% 25C4 Between 30 % and 50% 40C5 Between 50% and 80% 65C6 Over 80% 90

To determine the amount of necessary provisions for the portfolios in normal and substandard compliance, Banco Consorcio will apply the loss percentages, which are the product of the probability of default (PI) and the loss on default (PDI) established for the

guarantees. For this purpose, the liquidity degree of the guarantee must be analyzed, as well as the existence of any problems for

due to attrition or obsolescence.

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Regardless of the level of provisions resulting from the portfolio rating process, Banco Consorcio must maintain a minimum provision percentage of 0.50% on loans and contingent loans in the normal portfolio.

expected loss determined, subtracting recoveries through execution of guarantees from the exposure.

Model 2: Group provisions The provisions required for consumer and housing loans have been calculated on the basis of estimated losses on default and the probability of default, which are evaluated for each customer using a statistical model based on the characteristics of borrowers and their internal and external payment behavior.

Currently the Bank has three models of group assessment, which are segregated into:

- Normal loans (consumer and housing):

These are all the consumer loans and housing loans whose installment payment method is by automated collection from a current account or credit card account or by means other than payroll deduction.

- Payroll deduction loans:

These are all consumer loans whose installment payment method is by agreed payroll deduction either through a company, an insurance company, trade unions, associations, etc.

- Renegotiated loans:

These are all the renegotiated loans, for both normal and payroll deduction loans. Banco Consorcio renegotiates loans by common agreement with its customers and provides new credit terms to eliminate the previous obligation.

its potential future losses.

Portfolios of mutual endorsable mortgages (housing and general purpose), purchased mortgages and credit cards use delinquency matrices.

the following requirements are met:

disburse resources to clear the obligation, and whose value can be measured in a reliable manner.

more uncertain future event occurs not within the control of the Bank.

associated with the transferred assets are passed to third parties:

1.

This applies to unconditional sales, to sales with a repurchase agreement at fair value at the repurchase date, to sales of

where the assignor has no subordinated debt nor provides any kind of credit enhancement to the new asset owner, and other similar cases.

2.

to contracts for loaned securities in which the borrower has the obligation to return the same or similar assets, and other similar cases. Otherwise, the following is recorded in accounting:

i) valued at its amortized cost.

ii)

3.

or when the transferor assumes subordinated debt or other types of credit enhancement for part of the asset transferred and other similar cases, then a distinction is made between:

i)

transfer.

ii)


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transferred and the associated liability will be the amortized cost of the rights and obligations retained if the asset transferred is measured by its amortized cost, or the fair value of the rights and obligations retained if the asset transferred is measured by its fair value.

the intention of settling or reselling them.

are accounted for when billed and remain until paid. Amounts due to counterparty brokers on purchases are also included. In addition, accounts payable on installment transactions for repurchase agreements on behalf of the customer are included under this heading.

NOTE 4 ACCOUNTING CHANGES

these Consolidated Financial Statements.

NOTE 5 OPERATING SEGMENTS

Grupo Consorcio discloses information per segment based on IFRS 8, “Operation Segment”, which establishes the standards for reporting on operation segments and disclosures.

Operating segments are as follows:

5.1 Parent Company and Others This segment groups the Parent Company and its subsidiaries, “Consorcio Inversiones Ltda.”, “Consorcio Inversiones Dos Ltda.”, “CF Overseas”, Inmobiliaria Punta Pite S.A., Inmobiliaria Lote 18 S.A., Consorcio Servicios S.A., Consorcio Inversiones Financieras SpA., Const. e Inmobiliaria Presidente Riesco S.A., CF Inversiones Perú S.A.C. and Inversiones Continental Bio Bio SpA.

Their primary activities involve the development of investments and businesses in movable or immovable property and any other directly or indirectly related activity.

5.2 Insurance

The main businesses or activities in this area include:

- All kinds of pension annuities: Normal retirement annuities, early retirement annuities, survivor annuities and disability annuities.

- Individual Voluntary Pension Savings (Ahorro Previsional Voluntario, APV) Insurance Fund.

- Survivors and Disability Insurance (Seguros de Invalidez y Sobrevivencia, SIS) from the national AFP system.

- Other individual life insurance products, including: Insurance with a sole investment accounts, term insurance, endowment insurance, whole life insurance, health insurance, family protection insurance.

- Group Insurance products, including: Term life insurance, health insurance and credit insurance.

- Private Placement Agent, Mutual Funds.

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- Auto insurance.

- Obligatory personal accident insurance (Seguro Obligatorio de Accidentes Personales, SOAP)

-

- Other personal insurance policies: Theft, personal injury, extended warranty, fraud, earthquake and force majeure.

-

-

- Other corporate insurance products: Engineering insurance, construction all risks insurance, earthquake insurance and force majeure insurance.


- Personal and corporate bank lending instruments

- Deposit accounts

- Current accounts

- Deposit accounts, current accounts.

-

-

- Leasing operations, document discount.

- Mortgage loans and consumer loans .

The main stock brokerage business activities are listed below:

i) The main businesses or activities conducted on behalf of third parties include:

- Purchase and sale of shares

-

- Simultaneous operations on behalf of clients

- Sales with repurchase agreement

- Mutual funds brokerage

- Purchase with resale agreement

- Brokerage of Banco Consorcio term deposits.

ii) The main lines of business or activities conducted on its own behalf include:

- Simultaneous operations

- Forward contracts for US dollar currency transactions

-

- Purchase and sale of variable income instruments

- Purchase with resale agreement.


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As of December 31, 2017

Assets

Parent Company and

Others ThCh$

Insurance ThCh$

Bank and

ThCh$ Consolidated

ThCh$

Cash and cash equivalents 814,824 5.076.601 104.635.809 110.527.234 Current tax accounts receivable 5,015,747 6,383,552 6,134,811 17,534,110 Related party receivables 419,938 20,655,236 - 21,075,174

932,300 54,824,412 11,559,403 67,316,115 Trade and other receivables - 551,199,337 2,112,168,142 2,663,367,479

58,151,249 5,448,294,730 1,497,141,860 7,003,587,839 Deferred taxes receivable 760,788 37,140,550 16,120,730 54,022,068 Investments accounted for using the equity method 55,244,730 63,556,368 - 118,801,098 Intangible assets other than goodwill 327,990 1,950,215 1,347,055 3,625,260 Goodwill 6,601,018 1,611,830 - 8,212,848 Property investments 5,930,955 449,035,428 - 454,966,383 Property, plant and equipment 54,241 21,087,734 7,702,439 28,844,414 Total assets 134,253,780 6,660,815,993 3,756,810,249 10,551,880,022

Accounts payable to related companies 947,845 80,337 - 1,028,182 Current tax liabilities 106,404 1,382,415 1,319,498 2,808,317

3,757,910 70,537,816 31,338,644 105,634,370 Trade and other payables - 5,643,661,760 46,736,414 5,690,398,174 Deferred tax liabilities 2,361,425 57,368,402 6,240,395 65,970,222

188,544,677 157,242,921 3,230,635,443 3,576,423,041 199,957 9,775,323 3,279,433 13,254,713

Other provisions 62,559,634 - 1,461,420 64,021,054 258,477,852 5,940,048,974 3,321,011,247 9,519,538,073


Assets

Parent Company

and OthersThCh$

Insurance ThCh$

Bank and

ThCh$Consolidated

ThCh$

Cash and cash equivalents 707,418 5,208,448 27,408,375 33,324,241 Current tax accounts receivable 1,852,600 2,509,785 4,419,391 8,781,776 Related party receivables 747,288 22,721,990 - 23,469,278

259,033 45,650,084 32,607,922 78,517,039 Trade and other receivables - 506,910,350 1,873,536,279 2,380,446,629

56,647,360 5,053,781,213 1,263,624,286 6,374,052,859 Deferred taxes receivable 965,458 37,586,069 28,664,228 67,215,755 Investments accounted for using the equity method 45,023,355 47,793,657 - 92,817,012 Intangible assets other than goodwill 254,415 2,545,743 1,329,886 4,130,044 Goodwill 6,587,046 1,335,834 - 7,922,880 Property investments 4,685,496 417,504,074 - 422,189,570 Property, plant and equipment 1,422 20,829,963 6,743,885 27,575,270 Total assets 117,730,891 6,164,377,210 3,238,334,252 9,520,442,353

Accounts payable to related companies 411,786 - - 411,786 Current tax liabilities 80,349 7,180,834 1,161,291 8,422,474

3,393,816 54,081,707 22,155,208 79,630,731 Trade and other payables - 5,237,570,900 20,299,189 5,257,870,089 Deferred tax liabilities 1,062,237 44,075,284 12,915,610 58,053,131

186,089,862 188,649,397 2,775,877,750 3,150,617,009 168,573 9,086,300 2,567,226 11,822,099

Other provisions 41,324,110 - 1,626,630 42,950,740 232,530,733 5,540,644,422 2,836,602,904 8,609,778,059

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Net Income Statement

Parent Company and Others ThCh$

Insurance ThCh$

Bank and

ThCh$Consolidated

ThCh$

Revenue from ordinary activities 2,783,116 1,173,397,163 222,651,773 1,398,832,052 Cost of sales (164,982) (896,147,831) (106,254,103) (1,002,566,916) Gross margin 2,618,134 277,249,332 116,397,670 396,265,136 Other income 151,578 8,315,494 1,527,971 9,995,043 Administration expenses (3,763,439) (72,642,115) (41,481,033) (117,886,587) Other expenses, by function (8,317,002) (8,064,040) (167,866) (16,548,908) Net Operating Income 204,858,671 76,276,742 271,824,684 Share of net income of associates and joint ventures accounted for using the equity method 6,096,700 1,584,835 - 7,681,535

(945,228) (1,193,675) (15,149,520) (17,288,423) Indexation adjustments (2,424,751) (16,352,370) - (18,777,121) Net income before tax (6,584,008) 188,897,461 61,127,222 243,440,675 Income tax expense 1,603,178 (23,800,748) (12,810,321) (35,007,891) Net income from continuing operations 165,096,713 48,316,901 208,432,784 Net income from discontinued operationsNet income (4,980,830) 165,096,713 48,316,901 208,432,784 Ganancia (pérdida), atribuible a Shareholders of the parent company (4,748,298) 164,963,509 48,316,901 208,532,112 Minority interests (232,532) 133,204 - (99,328) Net income 165,096,713 48,316,901 208,432,784


Net Income Statement

Parent Company

and Others ThCh$

Insurance ThCh$

Bank and

ThCh$Consolidated

ThCh$

Revenue from ordinary activities 2,089,771 1,228,080,625 207,602,493 1,437,772,889 Cost of sales (70,002) (1,008,971,027) (92,042,092) (1,101,083,121) Gross margin 2,019,769 219,109,598 115,560,401 336,689,768 Other income 99,997 6,876,714 1,131,379 8,108,090 Administration expenses (3,500,995) (66,370,231) (39,846,023) (109,717,249) Other expenses, by function (8,207,529) (11,748,855) (1,226,211) (21,182,595) Net Operating Income 147,867,226 75,619,546 213,898,014 Share of net income of associates and joint ventures accounted for using the equity method 3,470,433 2,244,269 - 5,714,702

(572,758) (8,036,429) (14,027,712) (22,636,899) Indexation adjustments (3,686,053) (25,948,364) - (29,634,417) Net income before tax (10,377,136) 116,126,702 61,591,834 167,341,400 Income tax expense 1,250,177 (20,070,569) (11,359,556) (30,179,948) Net income from continuing operations 96,056,133 50,232,278 137,161,452 Net income from discontinued operationsNet income (9,126,959) 96,056,133 50,232,278 137,161,452 Net Income attributable toShareholders of the parent company (9,046,605) 95,958,347 50,232,278 137,144,020 Minority interests (80,354) 97,786 - 17,432 Net income 96,056,133 50,232,278 137,161,452


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As of September 30, 2017


Parent Company

and Others Insurance Bank and

Adjustments Total

Total proceeds by operational activity 142,731,326 816,655,792 120,279,826 (362,579,235) 717,087,709 Proceeds from the sale of goods and services 760,853 - - - 760,853 Proceeds from royalties, fees, commissions and other income from ordinary activities 141,434,104 (28,468,568) 104,778,839 594,112 218,338,487

Proceeds from contracts held for brokerage or trading purposes 311,333 - 9,492,064 - 9,803,397

policies underwritten - 791,445,414 - (350,965,739) 440,479,675

Proceeds from other operating activities 225,036 53,678,946 6,008,923 (12,207,608) 47,705,297 Payments for operating activities (145,648,405) (753,169,558) (22,873,345) 363,173,347 (558,517,961)

Payments to suppliers for goods and services (3,766,030) (66,701,769) (4,413,515) - (74,881,314)Payments arising from contracts held for brokerage or trading (141,459,526) (60,665,670) (11,526,671) - (213,651,867)Payments to and on behalf of employees (422,849) - (974,344) - (1,397,193)Payments for premiums and claims, annuities and other obligations arising on policies underwritten - (625,388,914) - 363,173,347 (262,215,567)

Payments for other operating activities - (413,205) (5,958,815) - (6,372,020)Net cash proceeds from (payments for) operations 94,451,148 (14,674,985) 5,392,570 (92,647,940) (7,479,207)

Dividends received 94,609,317 11,414,067 - (92,647,940) 13,375,444 Interest paid - - (3,639,948) - (3,639,948)Interest received - - 10,908,020 - 10,908,020 Income taxes paid (refunded) (158,169) (26,089,052) (1,875,502) - (28,122,723)

91,534,069 48,811,249 102,799,051 151,090,541

(3,604,557) - - 3,537,414 (67,143)Other payments to acquire equity or debt instruments of other entities (3,962,152) - - - (3,962,152)Loans to related companies (394,556) - - - (394,556)Proceeds from disposals of property, plant and equipment - 255,525 - - 255,525 Acquisitions of property, plant, and equipment (53,140) (1,609,904) (1,728,416) - (3,391,460)Acquisitions of intangible assets (73,575) - (417,490) - (491,065)Proceeds from other long-term assets - 142,491,512 - - 142,491,512 Acquisition of other long-term assets (1,410,441) (133,678,255) - - (135,088,696)Collections from related companies (394,556) - - 394,556 -Dividends received - - 187,215 - 187,215 Other cash receipts (payments) 25,506 - - - 25,506

7,458,878 3,931,970

Proceeds from share issues 4,131,526 - - (4,131,526) -Proceeds from long-term loans 102,925,000 - - - 102,925,000 Proceeds from short-term loans (14,435) 44,441,803 (197,381) 14,435 44,244,422 Loans from related companies 8,262,168 - - (7,565,968) 696,200 Loan repayments (116,345,729) 6,096,473 - 6,021,618 (104,227,638)Loans to related companies (1,134,814) (12,708,042) - 1,135,359 (12,707,497)Dividends paid (79,380,774) (54,592,842) (28,629,877) 92,647,940 (69,955,553)Interest paid - (41,000,291) - - (41,000,291)

88,121,858 1,360,925 138,658 1,497,449 1,360,925 138,658 1,497,449

107,406 72,151,760 72,127,319 Cash and cash equivalents at the start of the period 707,418 5,208,448 35,675,779 41,591,645 Cash and cash equivalents at the end of the period 814,824 5,076,601 107,827,539 113,718,964

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Parent Company

and Others InsuranceBank and

Adjustments Total

25,074,075 812,595,716 38,255,159 875,924,950 Proceeds from the sale of goods and services 289,548 - - - 289,548 Proceeds from royalties, fees, commissions and other income from ordinary activities 24,734,204 5,280,673 11,892,802 474,571 42,382,250

Proceeds from contracts held for brokerage or trading purposes - - 19,362,297 - 19,362,297

policies underwritten - 799,165,032 - - 799,165,032

Proceeds from other operating activities 50,323 8,150,011 7,000,060 (474,571) 14,725,823 Payments for operating activities

Payments to suppliers for goods and services (3,961,380) (116,926,328) (5,221,695) - (126,109,403)Payments arising from contracts held for brokerage or trading (18,011,653) (88,725,949) (34,252,017) - (140,989,619)Payments to and on behalf of employees (225,377) - (1,203,911) - (1,429,288)Payments for premiums and claims, annuities and other obligations arising on policies underwritten - (526,735,741) - - (526,735,741)

Payments for other operating activities (840,945) (102,256) (7,937,644) - (8,880,845) 74,404,707 591,582

Dividends received 72,517,362 15,037,837 - (70,051,600) 17,503,599 Interest paid - - (12,532,722) - (12,532,722)Interest received - - 14,559,222 - 14,559,222 Income taxes paid (refunded) 1,887,345 (18,720,033) (2,105,829) - (18,938,517)

76,439,427 76,423,246 72,371,636

16,141,398 - - - 16,141,398 Other payments to acquire equity or debt instruments of other entities (50,193,397) - - 50,193,397 - Loans to related companies (36,226,562) - - - (36,226,562)Proceeds from disposals of property, plant and equipment - 450 - - 450 Acquisitions of property, plant, and equipment (702) (1,456,226) (354,617) - (1,811,545)Acquisitions of intangible assets - - (404,185) - (404,185)Proceeds from other long-term assets - 252,420,272 - - 252,420,272 Acquisition of other long-term assets - (274,162,862) - - (274,162,862)Dividends received - - 141,089 - 141,089

50,193,397

Proceeds from share issues 38,131,500 - 12,061,897 (50,193,397) - Proceeds from long-term loans 32,051,597 - - - 32,051,597 Proceeds from short-term loans - 41,927 - - 41,927 Loans from related companies 606,591 - - (190,468) 416,123 Loan repayments (6,726,884) 8,694,931 (238,137) (2,621,828) (891,918)Loans to related companies - (9,314,882) - 2,812,296 (6,502,586)Dividends paid (69,557,880) (50,545,220) - 70,051,600 (50,051,500)Interest paid - (999,521) - - (999,521)

11,823,760 19,858,203 10,847

10,847

653,222 1,112,962 766,610 2,532,794 Cash and cash equivalents at the start of the period 1,301,203 11,103,095 73,436,886 85,841,184 Cash and cash equivalents at the end of the period 1,954,425 12,216,057 74,203,496 88,373,978


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NOTE 6 CASH AND CASH EQUIVALENTS

a) Cash and cash equivalents are as follows:

12/31/2017 ThCh$

12/31/2016ThCh$

992,606 1,130,898Bank balances 109,534,628 32,193,343

110,527,234 33,324,241Net transactions pending settlement (1) 3,191,730 8,267,404Total 113,718,964 41,591,645

b) Cash and cash equivalents by currency are as follows:

Cash and cash equivalentsChilean

pesos US dollar Euro Other Total

828,407 60,478 101,133 2,588 992,606Bank balances 77,712,530 30,813,981 1,008,117 - 109,534,628Total cash and cash equivalents 78,540,937 30,874,459 1,109,250 2,588 110,527,234Net operations pending settlement (1) 3,160,437 (988,172) 1,019,465 - 3,191,730Total cash and cash equivalents 81,701,374 29,886,287 2,128,715 2,588 113,718,964

Cash and cash equivalentsChilean

pesos US dollar Euro Other Total

880,873 196,737 50,599 2,689 1,130,898Bank balances 24,850,752 4,296,646 3,045,945 - 32,193,343Total cash and cash equivalents 25,731,625 4,493,383 3,096,544 2,689 33,324,241Net operations pending settlement (1) 6,676,791 1,558,847 31,766 - 8,267,404Total cash and cash equivalents 32,408,416 6,052,230 3,128,310 2,689 41,591,645

(1)

for ThCh$ 6,641,906 (ThCh$ 3,877,457 as of December 31, 2016). It is presented within this note only for the purposes of

NOTE 7 CURRENT TAX ACCOUNTS RECEIVABLE

Current tax accounts receivable were as follows:

12/31/2017 ThCh$

12/31/2016ThCh$

Monthly provisional tax payments 12,295,276 2,606,766Recoverable income taxes 328,728 715,315Credits for training expenses 563,692 213,952VAT recoverable 375,704 2,754,875Remaining tax credit 3,902,760 2,320,742Others 67,950 170,126

17,534,110 8,781,776

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NOTE 8 BALANCE AND TRANSACTIONS WITH RELATED ENTITIES

a) Accounts receivable from related non-consolidated companies were as follows:


2017

Chilean tax Company

Country of Origin Relationship

Transaction Description Currency

Balance as of

12/31/2016ThCh$

76.071.935-8 Aaktei Energía SpA Chile Associate Current account UF 133

76.409.386-0 Avsa Ñuñoa Hc Spa Chile AssociateCurrent account with promissory note

UF 196,139

99.564.920-9 Chile Associate Current account UF 16,30996.586.380-4 Constructora E Inmobiliaria Del Parque S.A. Chile Associate Current account UF 29,869

71.456.900-7 Fundacion Consorcio Nacional Vida Chile Associate Ptmo Mineduc CNS a FCN UF 12,000

99.599.540-9 Inmobilairia Alta Vista S.A. Chile Associate Current account UF 137,40076.468.394-3 Inmobiliaria Alto Reloncavi S.A. Chile Associate Current account UF 306,95776.231.874-1 Inmobiliaria Calama Spa Chile Associate Current account UF 989,41976.587.886-1 Inmobiliaria Desarrollo Industriales Spa Chile Associate Current account UF 72,61876.009.849-3 Inmobiliaria El Montijo Ii S.A. Chile Associate Current account UF 2,67876.641.360-9 Inmobiliaria Jardín Del Carmen S.A. Chile Associate Current account UF 30,44876.027.704-5 Inmobiliaria Jardines De Cerrillos S.A. Chile Associate Current account UF 2,177,065

76.027.704-5 Inmobiliaria Jardines De Cerrillos S.A. Chile AssociateCurrent account with promissory note

UF 540,295

99.591.360-7 Inmobiliaria La Hacienda De Huechuraba S.A. Chile Associate Current account UF 161,97076.283.072-8 Inmobiliaria Las Higueras S.A. Chile Associate Current account UF 1,653,80176.349.920-0 Inmobiliaria Los Aromos S.A. Chile Associate Current account UF 12,09476.883.240-4 Inmobiliaria Los Cipreses S.A. Chile Associate Current account UF 909,481

76.883.240-4 Inmobiliaria Los Cipreses S.A. Chile AssociateCurrent account with promissory note

UF 270,058

76.954.790-8 Inmobiliaria Los Condores S.A. Chile Associate Current account UF 2,210,11576.416.293-5 Inmobiliaria Monte Santo 3 Spa Chile Associate Current account UF 287,08096.953.940-8 Inmobiliaria Sol De Maipú S.A. Chile Associate Current account UF 208,66176.966.850-0 Inmobiliaria Vicente Valdés S.A. Chile Associate Current account UF 65676.320.057-4 Inmobiliaria Y Desarrolladora El Remanso SpA Chile Associate Current account UF 1,277,334

76.320.057-4 Inmobiliaria Y Desarrolladora El Remanso SpA Chile AssociateCurrent account with promissory note

UF 1,852,905

76.515.769-2 Inversiones El Pinar SpA Chile Associate Current account UF 419,805

76.515.769-2 Inversiones El Pinar Spa Chile AssociateCurrent account with promissory note

UF 560,925

76.039.786-5 Inversiones Inmobiliaria Seguras S.A. Chile AssociateCurrent account with promissory note

UF 5,804,900

76.693.443-9 Rentas Nueva El Golf Spa Chile Associate Current account UF 20,09976.576.572-2 Via Poniente S.A. Chile Associate Current account UF 913,960

Total 21,075,174


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2016

Chilean tax Company

Country of Origin Relationship Transaction Description Currency

Balance as of 12/31/2016

ThCh$

76.071.935-8 Aaktei Energía SpA Chile Associate Current account UF 4

76.409.386-0 Avsa Ñuñoa Hc SpA Chile Associate Current account with promissory note UF 314,150

56.064.770-5 Comunidad Santo Tomas Chile Associate Current account UF 150,44499.564.920-9 Chile Associate Current account UF 15,65896.586.380-4 Constructora E Inmobiliaria Del Parque S.A. Chile Associate Current account UF 29,36899.599.540-9 Inmobilairia Alta Vista S.A. Chile Associate Current account UF 135,09276.468.394-3 Inmobiliaria Alto Reloncavi S.A. Chile Associate Current account UF 298,81276.233.018-0 Inmobiliaria Armas Move S.A. Chile Associate Current account UF 1,25876.231.874-1 Inmobiliaria Calama SpA Chile Associate Current account UF 963,03476.587.886-1 Inmobiliaria Desarrollo Industriales SpA Chile Associate Current account UF 49,65176.563.450-4 Inmobiliaria Desarrollo Sur S.A. Chile Associate Current account UF 14376.009.849-3 Inmobiliaria El Montijo II S.A. Chile Associate Current account UF 2,37976.641.360-9 Inmobiliaria Jardín Del Carmen S.A. Chile Associate Current account UF 29,93776.027.704-5 Inmobiliaria Jardines De Cerrillos S.A. Chile Associate Current account UF 4,208,80599.591.360-7 Inmobiliaria La Hacienda De Huechuraba S.A. Chile Associate Current account UF 154,61076.283.072-8 Inmobiliaria Las Higueras S.A. Chile Associate Current account UF 1,083,81476.349.920-0 Inmobiliaria Los Aromos S.A. Chile Associate Current account UF 11,54576.883.240-4 Inmobiliaria Los Cipreses S.A. Chile Associate Current account UF 2,585,83876.954.790-8 Inmobiliaria Los Condores S.A. Chile Associate Current account UF 2,151,16376.416.293-5 Inmobiliaria Monte Santo 3 SpA Chile Associate Current account UF 377,21696.953.940-8 Inmobiliaria Sol De Maipú S.A. Chile Associate Current account UF 666,07676.576.572-2 Inmobiliaria Via Poniente S.A. Chile Associate Current account UF 847,45076.966.850-0 Inmobiliaria Vicente Valdés S.A. Chile Associate Current account UF 63876.320.057-4 Inmobiliaria Y Desarrolladora El Remanso SpA Chile Associate Current account UF 1,169,602

76.320.057-4 Inmobiliaria Y Desarrolladora El Remanso SpA Chile Associate Current account with promissory note UF 1,767,918

76.515.769-2 Inversiones El Pinar SpA Chile Associate Current account UF 747,284

76.039.786-5 Inversiones Inmobiliaria Seguras S.A. Chile Associate Current account with promissory note UF 5,707,389

Total 23,469,278

b) Accounts payable with related companies are as follows:

Chilean tax Company



Balance as of

12/31/2016ThCh$

76.282.829-4 Empresa Eléctrica El Pinar SpA Chile Associate Current account UF 84776.380.425-9 Transmisora Continetal Bio Bio SpA Chile Associate Current account UF 28,61076.318.228-2 Aguas Claras Chile Associate Current account UF 80,33799.531.100-3 Inmobiliaria Seis Norte S.A. Chile Associate Current account UF 918,388

Total 1,028,182

Chilean tax Company



Balance as of

12/31/2016ThCh$

76.071.935-8 Aaktei Energía SpA Chile Associate Current account UF 7,88776.515.769-2 Inversiones El Pinar SpA Chile Associate Current account UF 352,06976.282.829-4 Empresa Eléctrica El Pinar SpA Chile Associate Current account UF 51,830

Total 411,786

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c) Transactions with related parties:

The transactions between the company and its subsidiaries have been eliminated in the consolidation and are not disclosed in this note.

December 31, 2017

Related entityChilean tax

RelationshipTransaction description

Amount ThCh$

on net income

ThCh$

Avsa Ñuñoa Hc Spa. 76.409.386-0 Associate with over 10% Current account repayment

132,375 -

Banvida S.A. 96.816.350-7 Shareholder Dividend payments 29,416,364 -Bp S.A. 96.882.560-7 Shareholder Dividend payments 3,924,228 -Calverton Spain S L 59.220.560-2 Shareholder Dividend payments 1,647,454 -Desarrollos Inmob. Y Constructora Santo Tomás S.A.

76.928.330-7 Associate with over 10% Land Sold 404,882 18,651

El Bosque Fip 96.904.900-7 Shareholder Dividend payments 738,632 -Fundacion Consorcio Nacional Vida

71.456.900-7 Same Enterprise Group (Art 100 A) Lmv

Transfer 12,000 -

IFC 59.120.060-7 Shareholder Dividend payments 4,118,635 -Inmobiliaria Aguapiedra Spa. 76.455.471-K Associate with over 10% Capital increase 440,334 -Inmobiliaria Aguas Claras Spa. 76.318.228-2 Associate with over 10% Dividend distributions 79,972 -Inmobiliaria Aguas Claras Spa. 76.318.228-2 Associate with over 10% Capital reduction 140,303 -Inmobiliaria Armas Move S.A. 76.233.018-0 Associate with over 10% Dividends Received 382,445 -Inmobiliaria Armas Move S.A. 76.233.018-0 Associate with over 10% Current account

repayment 1,208 -

Inmobiliaria Armas Move S.A. 76.233.018-0 Associate with over 10% Sale of shares 500 -Inmobiliaria Desarrollo Sur S.A. 76.563.450-4 Associate with over 10% Dividend distributions 60 -

Hacienda Spa.76.326.533-1 Associate with over 10% Purchase of stock,

capital increase 166,113 -

Inmobiliaria Jardin Del Carmen S.A.

76.641.360-9 Associate with over 10% Dividend distributions 14,000 -

Inmobiliaria Jardines De Cerrillos S.A.

76.027.704-5 Associate with over 10% Current account contribution

2,642,936 -

Inmobiliaria Las Higueras S.A. 76.283.072-8 Associate with over 10% Current account contribution

528,893 -

Inmobiliaria Los Arrayanes S.A. 99.577.930-7 Associate with over 10% Dividend distributions 110,000 -Inmobiliaria Los Cipreces S.A. 76.883.240-4 Associate with over 10% Current account

contribution 504,079 -

Inmobiliaria Los Cipreses S.A. 76.883.240-4 Associate with over 10% Sale of real estate 4,643,458 (586)Inmobiliaria Los Cipreses S.A. 76.883.240-4 Associate with over 10% Quarterly interest on

property transaction commitment

203,094 203,094

Inmobiliaria Los Cipreses S.A. 76.883.240-4 Associate with over 10% Quarterly interest on property transaction commitment

6,569 2,171

Inmobiliaria Los Cipreses S.A. 76.883.240-4 Associate with over 10% Current account repayment

3,000,000 -

Inmobiliaria Los Cipreses S.A. 76.883.240-4 Associate with over 10% Current account repayment

9,531,016 -

Inmobiliaria Los Cipreses S.A. 76.883.240-4 Associate with over 10% Land Sold 149,905 (661)Inmobiliaria Los Gavilanes S.A. 99.591.350-K Associate with over 10% Dividend distributions 95,000 -Inmobiliaria Los Maderos Spa. 76.216.575-9 Associate with over 10% Capital reduction 166,202 -Inmobiliaria Los Maderos Spa. 76.216.575-9 Associate with over 10% Dividends Received 71,915 -Inmobiliaria Los Robles Spa. 76.455.482-5 Associate with over 10% Capital increase 347,143 -Inmobiliaria Monte Santo 3 Spa 76.416.293-5 Associate with over 10% Current account

repayment 180,337 -


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RelationshipTransaction description

Amount ThCh$

on net income

ThCh$

Inmobiliaria Montepiedra Spa. 76.213.015-7 Associate with over 10% Capital reduction 268,500 -Inmobiliaria Montepiedra Spa. 76.213.015-7 Associate with over 10% Dividends Received 50,845 -Inmobiliaria Pc 50 Spa. 76.435.779-5 Associate with over 10% Purchase of stock,

capital increase 1,241,000 -

Inmobiliaria San Nicolas Norte Spa.

76.209.105-4 Associate with over 10% Capital reduction 589,703 -

Inmobiliaria San Nicolas Norte Spa.

76.209.105-4 Associate with over 10% Dividends Received 17,665 -

Inmobiliaria Santa Mónica SpA 76.618.543-6 Associate with over 10% Capital Contribution 175,000 -Inmobiliaria Sol De Maipú S.A. 96.953.540-8 Associate with over 10% Current account

repayment 253,493 -

Inmobiliaria Vía Poniente S.A. 76.576.572-2 Associate with over 10% Current account contribution

208,786 -

Inmobiliaria Vía Poniente S.A. 76.576.572-2 Associate with over 10% Capital increase 2,831,950 -Inmobiliaria Vía Poniente S.A. 76.576.572-2 Associate with over 10% Current account

repayment 593,130 -

Inmobiliaria Vía Poniente S.A. 76.576.572-2 Associate with over 10% Current account contribution

163,559 -

Inmobiliaria Y Desarrolladora El Remanso Spa.

76.320.057-4 Associate with over 10% Current account contribution

55,793 -

Inversiones Continental Bio Bio Spa

76.515.767-9 Associate with over 10% Capital increase 435,683 -

Inversiones El Pinar 76.515.769-2 Associate with over 10% Promissory note accrual interest

39,499 35,005

Lvcc Asset Management S.A. 96.955.500-K Associate with over 10% Dividend Received 1,054,747 -P&S S.A. 76.246.548-5 Shareholder Dividend payments 29,416,364 -Rentas Nueva El Golf Spa 76.693.443-9 Associate with over 10% Current account

contribution 19,931 -

Tobalaba Fip 76.246.552-3 Shareholder Dividend payments 738,631 -

Transactions inherent to the bank draft, made between the subsidiary Banco Consorcio and its related parties are not disclosed, identifying the counterparty covered by the bank secrecy or reserve, in accordance with the provisions of Chapter C-1 of the Compendium of Accounting Standards of the Chilean Banks and Financial Institutions Supervisor (SBIF).

(Continued)

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December 31, 2016


Relationship Transaction descriptionAmount

ThCh$

on net income

ThCh$

Aaktei Energía SpA 76.071.935-8 Director Art 100 Lmv Current account contribution 4 -Aaktei Energía SpA 76.071.935-8 Director Art 100 Lmv Current account contribution 20 -Banvida S.A. 96.882.560-7 Shareholder Dividend payments 20,192,564 -Bp S.A. 96.904.900-7 Shareholder Dividend payments 2,693,746 -Constructora E Inmobiliaria Alonso De Córdova S.A.

76.210.019-3 Associate with over 10% Acquisition of Parque Oriente Building

10,083,737 -

Constructora E Inmobiliaria Del Parque S.A.

99.586.380-4 Associate with over 10% Current account repayment 69,991 -

El Bosque Fip 76.246.548-5 Shareholder Dividend payments 507,026 -Empresa Eléctrica El Pinar SpA 76.282.829-4 Director Art 100 Lmv Current account contribution 51,830 -Inmobiliaria Aguapiedra SpA. 76.455.471-K Associate with over 10% Capital increase 314,652 -Inmobiliaria Aguas Claras SpA. 76.318.228-2 Associate with over 10% Decrease in capital 118,009 -Inmobiliaria Aguas Claras SpA. 76.318.228-2 Associate with over 10% Dividend distributions 157,839 -Inmobiliaria Alta Vista S.A. 99.599.540-9 Associate with over 10% Land sold 287,253 108,785Inmobiliaria Armas Move S.A. 76.233.018-0 Associate with over 10% Current account repayment 1,544,347 -Inmobiliaria Armas Move S.A. 76.233.018-0 Associate with over 10% Dividend distributions 1,130,000 -Inmobiliaria Calama SpA. 76.231.874-1 Associate with over 10% Current account contribution 949,383 -Inmobiliaria Desarrollo Sur S.A. 76.563.450-4 Associate with over 10% Dividend distributions 42,000 -

Hacienda SpA.76.326.533-1 Associate with over 10% Capital increase 215,152 -

Inmobiliaria El Montijo S.A. 76.646.780-6 Associate with over 10% Current account contribution 786,356 -Inmobiliaria El Montijo S.A. 76.646.780-6 Associate with over 10% Current account repayment 2,238,567 -Inmobiliaria El Montijo S.A. 76.646.780-6 Associate with over 10% Dividend distributions 2,993,089 -Inmobiliaria El Montijo S.A. 76.646.780-6 Associate with over 10% Land sold 2,000,992 341,965Inmobiliaria Hacienda De Huechuraba S.A.

99.591.360-7 Associate with over 10% Current account contribution 130,759 -

Inmobiliaria Jardines De Cerrillos S.A.


Inmobiliaria Los Aromos S.A. 76.349.920-0 Associate with over 10% Decrease in capital 200,000 -Inmobiliaria Los Aromos S.A. 76.349.920-0 Associate with over 10% Decrease in capital 25,000 -Inmobiliaria Los Aromos S.A. 76.349.920-0 Associate with over 10% Dividend distributions 225,000 -Inmobiliaria Los Aromos S.A. 76.349.920-0 Associate with over 10% Land sold 336,868 3,799Inmobiliaria Los Cipreses S.A. 76.883.240-4 Director Art 100 Lmv Property acquisition 13,838,889 1,158,159Inmobiliaria Los Cipreses S.A. 76.883.240-4 Director Art 100 Lmv Quarterly interest on property

transaction commitment 293,408 293,408

Inmobiliaria Los Cipreses S.A. 76.883.240-4 Associate with over 10% Current account contribution 709,850 -Inmobiliaria Los Cipreses S.A. 76.883.240-4 Associate with over 10% Interest on property

transaction commitment 4,355 4,355

Inmobiliaria Los Cóndores S.A. 76.954.790-8 Associate with over 10% Current account contribution 530,433 -Inmobiliaria Los Cóndores S.A. 76.954.790-8 Associate with over 10% Land sold 1,213,140 188,225Inmobiliaria Los Maderos SpA. 76.216.575-9 Associate with over 10% Decrease in capital 78,516 -Inmobiliaria Los Maderos SpA. 76.216.575-9 Associate with over 10% Dividend distributions 190,215 -Inmobiliaria Los Robles SpA. 76.455.482-5 Associate with over 10% Capital increase 307,119 -Inmobiliaria Montepiedra SpA. 76.213.015-7 Associate with over 10% Decrease in capital 132,050 -Inmobiliaria Montepiedra SpA. 76.213.015-7 Associate with over 10% Dividend distributions 501,251 -Inmobiliaria Pc 50 SpA. 76.435.779-5 Associate with over 10% Capital increase 180,000 -Inmobiliaria Pc 50 SpA. 76.435.779-5 Associate with over 10% Capital increase 70,000 -Inmobiliaria San Nicolás Norte SpA.

76.209.105-4 Associate with over 10% Decrease in capital 940,000 -

Inmobiliaria San Nicolás Norte SpA.

76.209.105-4 Associate with over 10% Dividend distributions 320,000 -

Inmobiliaria Sol De Maipú S.A. 96.953.540-8 Associate with over 10% Current account repayment 48,485 -Inmobiliaria Vicente Valdés S.A. 76.966.850-0 Associate with over 10% Decrease in capital 458,902 -


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Relationship Transaction descriptionAmount

ThCh$

on net income

ThCh$

Inmobiliaria Vicente Valdés S.A. 76.966.850-0 Associate with over 10% Dividend distributions 273,310 -Inmobiliaria Y Desarrolladora El Remanso SpA.


Inversiones El Pinar SpA 76.515.769-2 Director Art 100 Lmv Current account contribution 747,284 -Inversiones El Pinar SpA 76.515.769-2 Director Art 100 Lmv Current account contribution 352,069 -Inversiones Inmobiliarias Seguras S.A.

76.039.786-5 Associate with over 10% Current account contribution 1,732,451 -

P&S S.A. 96.816.350-7 Shareholder Dividend payments 20,192,564 -Piedra Roja Desarrollos Inmobiliarios S.A.

96.844.470-0 Associate with over 10% Current account contribution 4,035,700 -

Piedra Roja Desarrollos Inmobiliarios S.A.

96.844.470-0 Associate with over 10% Decrease in capital 2,996,817 -

Piedra Roja Desarrollos Inmobiliarios S.A.

96.844.470-0 Associate with over 10% Dividend distributions 1,038,884 -

Tobalaba Fip 76.246.552-3 Shareholder Dividend payments 507,026 -

NOTE 9 OTHER NON-FINANCIAL ASSETS

12/31/2017 ThCh$

12/31/2016ThCh$

Securities to be deposited 273,349 248,612 Salvage 782,608 575,117 Custody 716,115 240,054 Investments in health and mining licenses 61,059 61,055 Property acquisition commitments 2,719,807 3,847,832 Prepaid expenses 304,735 901,253

853,164 1,325,775 Fixed and variable income accounts receivable 26,466,572 18,168,869 Documents and accounts receivable 18,853,526 3,238,921 Sundry debtors 2,812,329 3,253,533 Brokerage accounts receivable 621,010 134,598 Investment with purchase commitment 360,138 13,654,465

Documents and accounts receivable 6,406,851 4,142,051 Guarantees 4,442,832 22,700,593 Sundry debtors 665,539 394,508 Custody 44,181 5,370,770

11,969 4,219 Documents and accounts receivable 781,270 188,177 Sundry debtors 11,147 5,171 Custody 126,658 53,426 Others 1,256 8,040 Total 67,316,115 78,517,039

(Continued)

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NOTE 10 TRADE AND OTHER ACCOUNTS RECEIVABLE

Other accounts receivable as of December 31, 2017 and 2016 were as follows:

12/31/2017 ThCh$

12/31/2016 ThCh$

InsuranceAccounts receivable from policyholders 55,877,454 53,446,567Accounts receivable from reinsurers 4,745,137 5,929,292Accounts receivable from leasing - CNS Vida (1) 443,639,560 402,884,015Accounts receivable from leasing - CN Life (2) 38,248,768 35,903,402Participation of reinsurance in reserves 10,462,504 10,559,744Impairment (1,774,086) (1,812,670)

Interbank Loans - 60,005,834Brokerage receivables 47,300,794 20,616,787Commercial loans 1,932,237,217 1,670,530,190Housing loans 98,929,679 84,466,197Consumer loans 72,093,983 69,658,635Impairment (38,393,531) (31,741,364)Total 2,663,367,479 2,380,446,629

The accounting policy is described in Note 3.1.8.

1. Leasing SR Inmobiliaria: Leasing contract signed in October 2009 with SR INMOBILIARIA S.A. (Company related to SMU) for an Unimarc distribution center, located at MACROLOT MLI-10 IZARRA LO AGUIRRE to one side of Highway 68.

Began: October 2009 Term: 30 years

2. Leasing Mall Puente III: Leasing contract signed in April 2011 with the shopping center Galería Imperio, located at 824 Huerfanos, Santiago. The contract counterparty is Mall Puente III Ltda. The purpose of the lease was the

Began: April 2011 Term: 25 years

3. Leasing Cencosud Shopping Center: Leasing contracts with Cencosud Shopping Center S. A. signed in April 2005 for 5 shopping centers located in Osorno, Chillan, Los Angeles, Linares, Talca and Curico.

Began: April 2005 Term: 20 years

:the Corporate Building and Cultural Center located at Avenue Presidente Riesco 5685, Las Condes.

Term: 23 years

5. Leasing Córpora Agrícola: Leasing contract with Córpora Agrícola S.A. for estates located near San Felipe in the

Fifth Region. Began: April - 2010 Term: 20 years

6. Leasing Inmobiliaria Boulevard: Leasing contract with Inmobiliaria Boulevard Nueva Costanera S.A. The purpose of

Began: August - 2012 Term: 25 years

7. Leasing Inmobiliaria Enrique Foster Apoquindo: Leasing contract with Inmobiliaria Enrique Foster Apoquindo S.A.

Began: May 2013 Term: 30 years


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8. Leasing Mall Barrio Independencia: Leasing Contract with MBI SpA. The purpose of this leasing contract was the

Began: December - 2014 Term: 22 years

9. Leasing Los Militares: Apoquindo.


10. Leasing Torre Amunategui:Catedral, Santiago city center.


In accordance with current standards, allowances on overdue lease installments are created in the same month the installment fell due. The provision includes interest, capital and value added tax, if applicable.

If property taxes have been paid by the lessor and have not been refunded by the lessee, a provision is created when they are 60 days overdue.

Where overdue amounts due have been renegotiated, the provision will be maintained in its entirety and only reversed against receipt of funds.

To date contingent installments have not been recognized in net income for the period.

Lease contracts do not contain unguaranteed residual values in favor of the Company.

During this period no leasing contracts were signed.

The provisions are registered in accordance with the standard and are detailed in Accounting Policy note 3.3.2.

years

Contract value

Cost valueAppraisal

valueFinal lease

valueNominal

valueInterest Current

value Impairment

Final contract

value

0 - 1 years - - - - - - - -1 – 5 years 7,056,244 964,129 7,066,247 3,133 7,063,114 28,724,779 42,929,424 7,063,114 Over 5 years 429,600,487 247,545,840 436,573,313 957,118 435,616,195 530,008,837 623,086,622 435,616,195 Total 436,656,731 248,509,969 443,639,560 960,251 442,679,309 558,733,616 666,016,046 442,679,309

Outstanding capital: This is the outstanding amount excluding interest.Contract Value: Current value less impairment provision.Net cost value: Indexed cost less accumulated depreciation.Appraisal value: Value of the lowest professional appraisal.Final lease value: The lowest value between the net current value, the net cost value and the appraisal value.

(Continued)

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1. Leasing Inmobiliaria Piedra Roja: Leasing contract with Chicureo Desarrollos Inmobiliarios S.A. for 167 hectares located in the municipality of Colina. In addition this lease includes another 47 hectares of land adjacent to the 167 hectares, with mortgages in favor of CN Life.

Term: 20 years

2. Leasing Caja Los Andes: Leasing contract with Caja Compensación Los Andes for the Corporate Building of Caja Compensación Los Andes located on the corner of Padre Alonso Ovalle and San Ignacio, Santiago.

Began: December 2006 Term: 20 years

3. Leasing Inmobiliaria Radices: Leasing contract with Sociedad Inmobiliaria Radices S.A. for a property located on Av. Ejercito 146, used for educational purposes.

Began: November 2005 Term: 20 years

4. Leasing Bañados y Compañía S.A: Lease signed with Bañados y Compañía S.A. For a property located at Senador

Term: 20 years

In accordance with current standards, allowances on overdue lease installments are created in the same month the installment fell due. The provision includes interest, capital and value added tax, if applicable.

If property taxes have been paid by the lessor and have not been refunded by the lessee, a provision is created when they are 60 days overdue.

Where overdue amounts due have been renegotiated, the provision will be maintained in its entirety and only reversed against receipt of funds.

To date contingent installments have not been recognized in net income for the period.

Lease contracts do not contain unguaranteed residual values in favor of the Company.

During this period no leasing contracts were signed.

The provisions are registered in accordance with the standard and are detailed in Accounting Policy note 3.3.2.

remaining years

Contract value

Cost valueAppraisal

valueFinal lease

valueNominal

valueInterest Current

value Impairment

Final contract

value

0 - 1 year - - - - - - - -1 - 5 years 34,045,049 17,016,532 34,096,840 - 34,096,840 47,802,375 27,375,435 34,096,840 Over 5 years 4,103,779 3,861,842 4,151,928 - 4,151,928 12,426,445 8,427,132 4,151,928 Total 38,148,828 20,878,374 38,248,768 38,248,768 60,228,820 35,802,567 38,248,768

Outstanding capital: This is the outstanding amount excluding interest.Contract Value: Current value less impairment provision.Net cost value: Indexed cost less accumulated depreciation.Appraisal value: Value of the lowest professional appraisal.Final lease value: The lowest value between the net current value, the net cost value and the appraisal value.


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a) Impairment detail

provisionsThCh$

Impairment provisions

ThCh$Net assets

ThCh$

Accounts receivable from policyholders 55,877,454 (1,541,134) 54,336,320Accounts receivable from reinsurers 4,745,137 (29,399) 4,715,738Accounts receivable from loan transactions 2,039,762,532 (35,544,849) 2,004,217,683Accounts receivable from factoring transactions 70,242,432 (2,848,682) 67,393,750Accounts receivable from leasing - CNS Vida 443,639,560 (203,553) 443,436,007Accounts receivable from leasing - CN Life 38,248,768 - 38,248,768Other current receivables 40,556,709 - 40,556,709Participation of reinsurance in reserves 10,462,504 - 10,462,504Total 2,703,535,096 2,663,367,479

provisionsThCh$

Impairment provisions

ThCh$Net assets

ThCh$

Accounts receivable from policyholders 53,446,567 (1,497,792) 51,948,775Accounts receivable from reinsurers 5,929,292 (119,870) 5,809,422Accounts receivable from loan transactions 1,805,966,984 (29,830,156) 1,776,136,828Accounts receivable from factoring transactions 59,549,317 (1,911,208) 57,638,109Accounts receivable from leasing - CNS Vida 402,884,015 (195,008) 402,689,007Accounts receivable from leasing - CN Life 35,903,402 - 35,903,402Other current receivables 39,761,342 - 39,761,342Participation of reinsurance in reserves 10,559,744 - 10,559,744Total 2,414,000,663 2,380,446,629

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b) The portfolio analyzed by overdues is the following:

customers

renegotiated portfolio


ThCh$

customers renegotiated

portfolio

Gross renegotiated

portfolio ThCh$

Total portfolio

ThCh$

Portfolio not overdue 1,149,347 2,583,829,613 203 783,723 2,584,613,336Portfolio between 1 and 30 days 1,203 69,382,677 47 187,200 69,569,877Portfolio between 31 and 60 days 1,624 2,623,409 24 71,609 2,695,018Portfolio between 61 and 90 days 522 1,224,974 16 53,144 1,278,118Portfolio between 91 and 120 days 177 574,673 16 36,799 611,472Portfolio between 121 and 150 days 141 2,164,916 10 16,333 2,181,249Portfolio between 151 and 180 days 87 251,349 8 21,755 273,104Portfolio between 181 and 210 days 27 1,198,127 - - 1,198,127Portfolio between 211 and 250 days 37 261,732 - - 261,732Portfolio over 250 days 2,391 685,446 - - 685,446Total portfolio without securitization 1,155,556 2,662,196,916 324 1,170,563 2,663,367,479

customers



ThCh$

customers renegotiated

portfolio

Gross renegotiated

portfolio ThCh$

Total portfolio

ThCh$

Portfolio not overdue 2,336,602 2,308,838,187 208 773,049 2,309,611,236Portfolio between 1 and 30 days 1,109 64,904,413 62 218,275 65,122,688Portfolio between 31 and 60 days 589 2,542,480 35 78,660 2,621,140Portfolio between 61 and 90 days 464 1,127,441 32 79,165 1,206,606Portfolio between 91 and 120 days 256 358,833 20 44,368 403,201Portfolio between 121 and 150 days 230 302,148 15 25,554 327,702Portfolio between 151 and 180 days 168 381,703 11 15,327 397,030Portfolio between 181 and 210 days 36 199,846 - - 199,846Portfolio between 211 and 250 days 38 198,671 - - 198,671Portfolio over 250 days 598 358,509 - - 358,509Total portfolio without securitization 2,340,090 2,379,212,231 383 1,234,398 2,380,446,629

NOTE 11 OTHER FINANCIAL ASSETS

12/31/2017 ThCh$

12/31/2016ThCh$

Investments at amortized cost 4,114,146,013 4,019,013,234 Investments at fair value 2,889,441,826 2,355,039,625

7,003,587,839 6,374,052,859


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a) a) Investments by currency by type

Closing balance as of December 31, 2017

Insurance Companies

Chilean pesos

ThCh$US dollar

ThCh$Euro

ThCh$ ThCh$UF

ThCh$Other ThCh$

Total ThCh$

Financial assets at amortized cost Floating company bonds - 14,983,962 - - - - 14,983,962 Foreign bank bonds - 50,078,525 - - - - 50,078,525

- 5,948,936 - - 12,488,502 - 18,437,438 Bonos De Bancos E Instituciones Financieras (Cui) - - - - 221,759 - 221,759 Recognition bonds 41,425,713 - - - - - 41,425,713 Corporate bonds 40,376,646 26,893,138 - - 1,208,622,383 - 1,275,892,167 Corporate bonds (Single Investment Account) - - - - 62,514,450 - 62,514,450 Corporate bonds issued abroad - - - - 6,234,899 - 6,234,899 Securitized bonds - - - - 830,715 - 830,715 Securitized bonds (Single Investment Account) - - - - 8,219,500 - 8,219,500 Base 360 sovereign bonds - - 30,668,989 - - - 30,668,989 Subordinated Bonds - - - - 129,265,588 - 129,265,588 Subordinated bonds (Single Investment Account) - - - - 47,329,258 - 47,329,258 Foreign subordinated bonds - 227,675,674 99,331,008 - - - 327,006,682 Leased housing bonds - - - - 769,488 - 769,488 State treasury bonds - - - - 56,025,095 - 56,025,095 Zero coupon UF - - - - 11,916,721 - 11,916,721 Corporate Bonds - 304,198,062 32,278,142 - - 58,178,656 394,654,860 Dollar syndicated loans 12,131,310 45,813,844 - - - - 57,945,154

- - - - 1,211,230 - 1,211,230 Syndicated loan UF - - - - 91,744,335 - 91,744,335 Short-term deposits (Single Investment Account) 20,316 - - - - - 20,316 Long-term deposits - - - - 1,707,514 - 1,707,514 Foreign bank deposits and promissory notes - 14,410,798 - - - - 14,410,798 Mortgage bills - - - - 13,435,270 - 13,435,270 Mortgage bills (Single Investment Account) - - - - 14,178,621 - 14,178,621 Mutual mortgages - - - - 598,870,432 - 598,870,432 Structured notes with coupon - - - - 59,351,842 - 59,351,842 Corporate promissory notes - - - - 151,724 - 151,724 Swaps - - - - 56,844,055 - 56,844,055 National Yankee bonds - 717,137,796 - - - - 717,137,796 Total 93,953,985 1,407,140,735 162,278,139 2,381,933,381 58,178,656 4,103,484,896 Financial assets at fair value Recognition bonds 181,439 - - - - - 181,439 Corporate bonds 3,191,630 - - - 14,211,392 - 17,403,022 Securitized bonds 3,035,089 - - - 833,952 - 3,869,041 Subordinated Bonds - - - - 908,202 - 908,202 Corporate Bonds - 2,182,928 - - - - 2,182,928 Mortgage bills - - - - 1,350,668 - 1,350,668 National yankee bonds - 1,269,374 - - - - 1,269,374 Shares in public companies 234,710,534 - - - - - 234,710,534 Shares in private companies 2,718,130 - - - - - 2,718,130 Shares in foreign companies - 4,703 - - - 2,868,138 2,872,841 Investment funds 133,130,021 257,723,412 38,682,268 - - - 429,535,701 Investment funds (Single Investment Account) 1,331,302 34,877,169 3,275,489 - - - 39,483,960 Mutual funds 2,550,583 - - - - - 2,550,583 Foreign mutual funds - 8,175,076 - - - - 8,175,076 Mutual funds (Voluntary Pension Savings) 459,206,616 81,507,862 - - - - 540,714,478 Forwards 208,038 56,675,819 - - - - 56,883,857 Total 840,263,382 442,416,343 41,957,757 17,304,214 2,868,138 1,344,809,834

(*) Average Index Value

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Parent company and others

Financial assets at amortized cost

Chilean pesos

ThCh$US dollar

ThCh$Euro

ThCh$ ThCh$UF

ThCh$Other ThCh$

Total ThCh$

Foreign bank bonds - - - - - 706.060 706.060 Swaps 121.421 - - - - - 121.421 Total 121.421 706.060 827.481 Financial assets at fair valueShares in public companies 47.435.029 - - - - - 47.435.029 Shares in private companies 138.381 - - - - - 138.381 Shares in foreign companies - 7.261.057 - - - - 7.261.057 Mutual funds 2.320.540 - - - - - 2.320.540 Forwards - 168.761 - - - - 168.761 Total 49.893.950 7.429.818 57.323.768

Chilean pesos

ThCh$US dollar

ThCh$Euro

ThCh$ ThCh$UF

ThCh$Other ThCh$

Total ThCh$

Financial assets at amortized costReceivable documents 6,528,298 2,075,572 1,028,451 - - 201,315 9,833,636 Total 6,528,298 2,075,572 1,028,451 201,315 9,833,636 Financial assets at fair valueShares in private companies 2,346,593 - - - - - 2,346,593 Corporate bonds 56,613,732 514,658,277 - - 226,932,065 - 798,204,074

institutions bonds 37,626,046 122,889 - - 109,515,922 - 147,264,857

BCP bonds 197,460,249 - - - - - 197,460,249 BCU bonds - - - - 22,100,340 - 22,100,340 BTP bonds 112,209,721 - - - - - 112,209,721 BTU bonds 1,143,602 - - - 76,598,794 - 77,742,396 Zero coupon - - - - 241,171 - 241,171 Short-term deposits 57,421,760 3 - - 31,910,136 - 89,331,899 Lchr third parties - - - - 5,150,290 - 5,150,290 Forwards 18,517,627 - - - - - 18,517,627 Swaps 16,565,668 29,381 - - 143,958 - 16,739,007 Total 499,904,998 514,810,550 472,592,676 1,487,308,224 Overall Total 1,490,666,034 2,373,873,018 205,264,347 2,871,830,271 61,954,169 7,003,587,839

(*) Average Index Value.


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Balance as of December 31, 2016

Insurance company

Chilean pesos

ThCh$US Dollar

ThCh$Euro

ThCh$ ThCh$UF

ThCh$Other ThCh$

Total ThCh$

Financial assets at amortized costFloating company bonds - 16,343,347 - - - - 16,343,347 Foreign bank bonds - 54,627,598 - - - - 54,627,598

711,390 - - - 11,593,480 - 12,304,870

Investment Account) - - - - 1,569,849 - 1,569,849

Recognition bonds 72,368,068 - - - - - 72,368,068 Corporate bonds 48,314,236 28,799,074 - - 1,139,710,903 - 1,216,824,213 Corporate bonds (Single Investment Account) - - - - 54,879,773 - 54,879,773 Securitized bonds - - - - 5,597,828 - 5,597,828 Securitized bonds (Single Investment Account) - - - - 6,964,655 - 6,964,655 Base 360 sovereign bonds - - 29,291,356 - - 12,728,026 42,019,382 Subordinated Bonds - - - - 125,004,201 - 125,004,201 Subordinated bonds (Single Investment Account) - - - - 44,725,069 - 44,725,069 Foreign subordinated bonds - 254,602,766 22,214,981 - - - 276,817,747 Leased housing bonds - - - - 828,421 - 828,421 National bank bonds issued abroad - 6,425,025 - - - - 6,425,025 Zero coupon UF - - - - 14,460,755 - 14,460,755 Corporate Bonds - 379,144,937 12,775,672 - - 11,886,233 403,806,842 Dollar syndicated loans - 45,460,688 - - - - 45,460,688

12,163,611 4,359,053 - - - - 16,522,664 Syndicated loan UF - - - - 95,770,877 - 95,770,877 Short-term deposits (Single Investment Account) 20,449 - - - - - 20,449 Long-term deposits - - - - 1,578,547 - 1,578,547 Long-term deposits (Single Investment Account) - - - - 2,403 - 2,403 Foreign bank deposits and promissory notes - 14,562,248 - - - - 14,562,248 Mortgage bills - - - - 4,038,866 10,659,203 14,698,069 Mortgage bills (Voluntary Pension Savings) - - - - 590,031 - 590,031 Mortgage bills (Single Investment Account) - - - - 17,682,086 - 17,682,086 Mutual mortgages - - - - 25,867,191 538,326,378 564,193,569 Structured notes with coupon - - - - 13,911,370 82,649,799 96,561,169 Corporate promissory notes - - - - - 144,489 144,489 Swaps - 15,987,140 - - - - 15,987,140 National yankee bonds - 765,944,434 - - - - 765,944,434 Total 133,577,754 1,586,256,310 64,282,009 1,564,776,305 656,394,128 4,005,286,506 Financial assets at fair value Recognition bonds 1,108,949 - - - - - 1,108,949 Corporate bonds 4,196,513 - - - 12,035,138 - 16,231,651 Securitized bonds 3,233,404 - - - 574,755 - 3,808,159 Subordinated Bonds - - - - 1,102,588 - 1,102,588 National bank bonds issued abroad - 685,633 - - - - 685,633 Corporate Bonds - 1,271,994 - - - - 1,271,994 Mortgage bills - - - - 627,570 - 627,570 National Yankee bonds - 2,074,387 - - - - 2,074,387 Shares in public companies 199,816,277 - - - - - 199,816,277 Shares in private companies 1,952,026 995,499 - - - - 2,947,525 Shares in foreign companies - 1,193,271 - - - - 1,193,271 Investment funds 114,769,973 233,725,267 17,332,125 - - - 365,827,365 Investment funds (Single Investment Account) 1,236,759 - - - - - 1,236,759 Mutual funds 1,120,216 - - - - - 1,120,216 Foreign mutual funds - 7,011,526 - - - - 7,011,526 Mutual funds (Voluntary Pension Savings) 363,583,620 74,213,409 - - - - 437,797,029 Forwards - 4,633,808 - - - - 4,633,808 Total 691,017,737 325,804,794 17,332,125 14,340,051 1,048,494,707

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Financial assets at amortized cost

Chilean pesos

ThCh$US Dollar

ThCh$Euro

ThCh$ ThCh$UF

ThCh$Other ThCh$

Total ThCh$

Corporate bonds - - - - 184,787 - 184,787 Short-term deposits 1,779 - - - - - 1,779 Long-term deposits - - - - - 1,395,301 1,395,301 Mortgage bills 54,219 - - - - (54,219) - Total 55,998 184,787 1,341,082 1,581,867 Financial assets at fair value Shares in public companies 46,340,374 - - - - - 46,340,374 Shares in private companies 138,381 7,907,377 - - - - 8,045,758 Mutual funds 540,099 - - - - - 540,099 Forwards - 139,262 - - - - 139,262 Total 47,018,854 8,046,639 55,065,493

Chilean pesos

ThCh$US Dollar

ThCh$Euro

ThCh$ ThCh$UF

ThCh$Other ThCh$

Total ThCh$

Financial assets at amortized costReceivable documents 8,066,008 3,971,808 38,631 - - 68,414 12,144,861 Total 8,066,008 3,971,808 38,631 68,414 12,144,861 Financial assets at fair valueShares in private companies 2,321,418 - - - - - 2,321,418 Corporate bonds 70,010,197 488,223,688 - - 188,488,170 - 746,722,055

26,397,523 1,683,733 - - 78,068,210 - 106,149,466 BCP bonds 133,196,457 - - - 800,671 - 133,997,128 BCU bonds - - - - 45,152,869 - 45,152,869 BTP bonds 25,203,355 - - - 5,167,361 - 30,370,716 BTU bonds - - - - 14,561,942 - 14,561,942 PRC bonds - - - - 11,254 - 11,254 Zero coupon - - - - 234,452 - 234,452 Repurchase contracts with related entities 4,718,530 - - - - - 4,718,530 Short-term deposits 67,922,595 6,854,508 - - 78,682,683 - 153,459,786 LCHR third parties - - - - 286,474 - 286,474 Mutual funds - 9 - - - - 9 Forwards 2,773,386 - - - - - 2,773,386 Swaps 10,581,065 29,898 - - 108,977 - 10,719,940 Total 343,124,526 496,791,836 411,563,063 1,251,479,425 Overall Total 1,222,860,877 2,420,871,387 81,652,765 1,990,864,206 657,803,624 6,374,052,859

(*) Average Index Value.


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b) Investments at fair value according to hierarchy


Total

NATIONAL INVESTMENTS 1,132,790,352 539,222,226 59,946,445 1,731,959,023 Fixed Income 278,173,122 444,224,882 59,946,445 782,344,449 State Instruments 186,824,839 35,796,209 - 222,621,048 Financial System Instruments 68,517,253 125,386,055 59,946,445 253,849,753 Debt Or Loan Instruments 22,831,030 283,042,618 - 305,873,648 Variable Income 854,617,230 94,997,344 - 949,614,574 Shares In Public Companies 282,145,563 - - 282,145,563 Shares In Private Companies 2,484,973 2,718,131 - 5,203,104 Investment Funds 53,836,609 92,279,213 - 146,115,822 Mutual Funds 464,077,739 - - 464,077,739 Others 52,072,346 - - 52,072,346 FOREIGN INVESTMENTS 265,324,433 851,921,464 - 1,117,245,897 Fixed Income 1,269,374 693,255,848 - 694,525,222 Securities Issued By States And Foreign Central Banks - 505,941,578 - 505,941,578 Securities Issued By Foreign Banks And Financial Institutions - 187,314,270 - 187,314,270 Securities Issued By Foreign Companies 1,269,374 - - 1,269,374 Variable Income 264,055,059 158,665,616 - 422,720,675 Shares In Foreign Companies 2,872,841 7,261,057 - 10,133,898 Foreign Investment Funds 171,499,280 151,404,559 - 322,903,839 Foreign Mutual Funds 89,682,938 - - 89,682,938 DERIVATIVES 4,980,272 35,256,634 - 40,236,906 Total 1,403,095,057 1,426,400,324 59,946,445 2,889,441,826


Total

NATIONAL INVESTMENTS 813,023,120 649,244,132 30,873,471 1,493,140,723 Fixed Income 338,945,558 544,158,125 30,873,471 913,977,154 State Instruments 182,773,701 174,531,168 - 357,304,869 Financial System Instruments 136,132,047 110,088,381 30,873,471 277,093,899 Debt Or Loan Instruments 20,039,810 259,538,576 - 279,578,386 Variable Income 474,077,562 105,086,007 - 579,163,569 Shares In Public Companies 70,464,778 - - 70,464,778 Shares In Private Companies 2,459,798 10,854,903 - 13,314,701 Investment Funds 31,135,981 94,231,104 - 125,367,085 Mutual Funds 365,243,935 - - 365,243,935 Others 4,773,070 - - 4,773,070 FOREIGN INVESTMENTS 204,754,968 643,650,608 - 848,405,576 Fixed Income 3,346,381 520,943,950 - 524,290,331 Securities Issued By States And Foreign Central Banks - 477,119,635 - 477,119,635 Securities Issued By Foreign Banks And Financial Institutions 2,074,387 43,824,315 - 45,898,702 Securities Issued By Foreign Companies 1,271,994 - - 1,271,994 Variable Income 201,408,587 122,706,658 - 324,115,245 Shares In Foreign Companies 1,193,271 - - 1,193,271 Foreign Investment Funds 118,990,381 122,706,658 - 241,697,039 Foreign Mutual Funds 81,224,935 - - 81,224,935 DERIVATIVES - 13,493,326 - 13,493,326 Total 1,017,778,088 1,306,388,066 30,873,471 2,355,039,625

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NOTE 12 DEFERRED TAX ASSETS AND LIABILITIES

a) Consolidated deferred taxes as of December 31, 2017 and 2016 were as follows:

Operating segments

ThCh$ ThCh$

Assets Assets

Parent company and others 760,788 2,361,425 965,458 1,062,237Insurance 37,140,550 57,368,402 37,586,069 44,075,284Bank and subsidiaries 16,120,730 6,240,395 28,664,228 12,915,610Total 54,022,068 65,970,222 67,215,755 58,053,131


b) Deferred tax by operating segments


Total segment

Consorcio Financiero

Consorcio Inv. Spa

Consorcio Servicios

Punta Pite 18

Consorcio Inversiones

Presidente Riesco

Inversiones Cont. Bio Bio

Deferred tax assets Financial instruments appraisal 170,634 - - - - - - - 170,634Reinsurance debtors - - - - - - - - -Lease agreements - - - - - - - - -Provisions 313,582 - 7,428 - - - - - 321,010Prepaid expenses - - - - - - - - -Loans - - - - - - - - -Tax losses - 2,307 - 112,654 - - 11,587 142,465 269,013Others - - - - - - - 131 131Total assets 484,216 2,307 7,428 112,654 11,587 142,596 760,788

Depreciation - - - - - - - -Financial instruments appraisal - - - - - - - - -Intangible assets - - - - - - - -Lease agreements - - - - - - - -Provisions - - - - - - - -Prepaid expenses 345,380 - - - - - - 345,380Foreign investment 2,016,045 - - - - - - - 2,016,045Others - - - - - - - - -

2,361,425 2,361,425


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InsuranceBank and

Consorcio Vida

Consorcio Generales Total segment Consorcio

Deferred tax assets Financial instruments appraisal 13,541,177 18,290,618 3,514 31,835,309 328,265Reinsurance debtors - - - - -Lease agreements - 218,442 - 218,442 5,114,238Provisions 2,294,486 89,773 184,630 2,568,889 10,310,370Loans - - - - -Tax losses - - - - -Other 1,674,399 50,694 792,817 2,517,910 367,857Total assets 17,510,062 18,649,527 980,961 37,140,550 16,120,730

Depreciation 16,549,909 - - 16,549,909 -Financial instruments valuation 8,271,000 14,935,694 236,601 23,443,295 5,156,698Intangible assets 309,954 - - 309,954 -Lease agreements 16,676,526 - - 16,676,526 -Provisions - - - - 1,083,697Prepaid expenses 200,448 - 680 201,128 -Other 74,811 112,779 - 187,590 -

42,082,648 15,048,473 237,281 57,368,402 6,240,395



Consorcio Financiero

Consorcio Inv. SpA

Consorcio Servicios

Punta Pite

Presidente Riesco

Inversiones Cont. Bio

BioTotal

segment

Deferred tax assets Provisions 395,396 - 5,181 - - - - 400,577Tax losses - 2,198 - 104,132 86,087 - 86,087 192,417Others 151,881 - - - 1 220,582 1 372,464Total assets 547,277 2,198 5,181 104,132 86,088 220,582 86,088 965,458

Prepaid expenses 116,101 - - - - - 116,101Foreign investment 946,136 - - - - - - 946,136

1,062,237 1,062,237

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Consorcio Vida

Consorcio Generales

Total Segment Consorcio

Deferred tax assets Financial instruments appraisal 17,411,437 16,009,636 3,514 33,424,587 4,627,275Lease agreements - 138,049 - 138,049 14,308,246Provisions 1,930,138 86,948 58,369 2,075,455 8,806,822Loans - - - - 147,066Tax losses - - - - 707,402Others 1,268,805 49,319 629,854 1,947,978 67,417Total assets 20,610,380 16,283,952 691,737 37,586,069 28,664,228Deferred tax liabilities Depreciation 15,339,611 - 14,835 15,354,446 -Financial instruments valuation 3,992,841 12,124,210 680 16,117,731 2,417,468Intangible assets 309,317 - - 309,317 -Lease agreements 11,891,362 - - 11,891,362 10,370,503Prepaid expenses 183,561 - - 183,561 -Other 106,132 112,735 - 218,867 127,639

31,822,824 12,236,945 15,515 44,075,284 12,915,610

December 31, 2016).

c) Income tax expenses

Current income tax expenses12/31/2017

ThCh$12/31/2016

ThCh$

Income tax expenses Current year tax (18,958,006) (28,087,168)

(14,213,938) (3,640,421)(1,358,042) 968,540

Reconciliation of previously unreconciled tax loss (488,634) 865,380

Tax on disallowable expenditure - Article 21 (20,629) (33,080)Ppm for losses (recovery of loans) - -Other 31,358 (253,199)Net charge to income for income tax

Concept

12/31/2017 Tax rate

12/31/2016 Tax rate

% ThCh$ % ThCh$

Corporate income tax 25.50% (62,077,372) 24.00% (40,161,936)(5.74%) 13,962,963 (6.49%) 10,866,697

Additions and deductions (4.76%) 11,590,173 2.34% (3,917,976)Tax on disallowable expenditure (1.18%) 2,880,932 (1,.70%) 2,838,269 Others 0.56% (1,364,587) (0.12%) 194,998

14.38% 18.03%


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NOTE 13 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Associated companies as of December 31, 2017 and December 31, 2016 were as follows:

Chilean tax Company

Country of origin

Ownership interest % Equity

Net income Impairment

Investment income

Final investment

76.069.369-3 LVCC Asset Management S.A. Chile 25.00% 14,077,406 5,972,740 - 1,493,185 3,519,35299.531.100-3 Inmobiliaria Seis Norte S.A. Chile 50.00% 1,480,321 5,319 - 2,660 740,160Foreign La Positiva Vida Peru 40.14% 94,707,166 9,966,106 - 4,222,652 46,644,534Foreign La Positiva Seguros y Reaseguro Peru 4.91% 88,470,357 8,188,326 - 378,203 4,340,35699.556.340-1 Inmobiliaria Alsacia Golf S.A. Chile 0.10% 3,280 - - - 32996.658.670-2 Dcv-Vida Chile 21.14% 1,254,233 274,430 - 57,351 265,22776.515.769-2 Inversiones El Pinar SpA Chile 50.00% 5,087,672 182,781 - 49,185 2,543,83676.618.543-6 Inmobilliaria Santa Monica Chile 50.00% 3,267,924 18,050 - 18,962 1,633,96276.409.386-0 Avsa Ñuñoa Hc SpA Chile 40.00% 1,041,620 287,246 - 114,898 416,648

76.745.890-8 Constructora E Inmobiliaria Del Parque Dos S.A. Chile 50.00% 217,782 (3,632) - (1,816) 108,891

99.586.380-4 Constructora E Inmobiliaria Del Parque S.A. Chile 50.00% 62,524 (3,693) - (1,847) 31,26299.564.920-9 Chile 33.00% (2,804) 839 - - 176.587.886-1 Desarrollos Industriales SpA Chile 40.00% 1,740,513 (80,154) - (32,062) 696,20576.455.471-K Inmobiliaria Aguapiedra SpA. Chile 15.00% 9,519,882 390,468 - 58,564 1,427,98276.318.228-2 Inmobiliaria Aguas Claras SpA. Chile 15.00% 8,121,286 432,371 - 64,856 1,218,19399.599.540-9 Inmobiliaria Alta Vista S.A. Chile 40.00% 1,034,919 (62,823) - (29,491) 413,96876.468.394-3 Inmobiliaria Alto Reloncavi S.A. Chile 45.00% 963,007 263,249 - 150,742 433,35376.231.874-1 Inmobiliaria Calama SpA. Chile 40.00% 3,484,079 (309,334) - (123,734) 1,393,63276.326.533-1 Chile 15.00% 4,126,701 (180,125) - (27,019) 619,00576.009.849-3 Inmobiliaria El Montijo Dos S.A. Chile 33.00% 666,564 5,896 - 1,966 222,18876.646.780-6 Inmobiliaria El Montijo S.A. Chile 33.00% 5,162,821 (404,421) - (134,794) 1,720,94096.995.870-8 Inmobiliaria Ipl S.A. Chile 33.00% 87,720 11,842 - 3,947 29,24076.641.360-9 Inmobiliaria Jardín Del Carmen S.A. Chile 33.00% 55,612 3,785 - 1,262 18,53776.027.704-5 Inmobiliaria Jardines De Cerrillos S.A. (***) Chile 50.00% 15,119,142 (484,431) - (242,216) 7,559,57199.591.360-7 Inmobiliaria La Hacienda De Huechuraba S.A. Chile 50.00% 967,613 49,787 - 24,893 483,80676.283.072-8 Inmobiliaria Las Higueras S.A. Chile 50.00% 126,816 1,336,221 - 89,868 63,40876.349.920-0 Inmobiliaria Los Aromos S.A. Chile 50.00% 605,764 (28,097) - (14,049) 302,88299.577.930-7 Inmobiliaria Los Arrayanes S.A. Chile 44.00% 38,734 12,386 - 5,450 17,04376.883.240-4 Inmobiliaria Los Cipreses S.A. (**) Chile 50.00% 12,601,381 419,389 - 209,695 6,300,69176.954.790-8 Inmobiliaria Los Cóndores S.A. Chile 33.00% 11,430,696 (380,383) - (126,782) 3,810,23299.591.350-k Inmobiliaria Los Gavilanes S.A. Chile 50.00% 9,695 4,617 - 2,309 4,84876.216.575-9 Inmobiliaria Los Maderos SpA. Chile 0.00% 157,863 - - 8,680 199.591.340-2 Inmobiliaria Los Navegantes S.A. Chile 50.00% (4,886) (22,784) - (8,949) 176.455.482-5 Inmobiliaria Los Robles SpA. Chile 15.00% 9,087,685 451,496 - 67,724 1,363,15376.416.293-5 Inmobiliaria Monte Santo 3 SpA. Chile 33.00% 457,920 322,773 - 107,591 152,64076.213.015-7 Inmobiliaria Montepiedra SpA. Chile 15.00% 498,145 378,307 - 56,746 74,72296.931.030-9 Inmobiliaria Parque La Luz S.A. Chile 33.00% (89,966) (281) - - 176.435.779-5 Inmobiliaria Pc 50 SpA Chile 50.00% 6,936,451 3,759 - 1,880 3,468,22699.591.150-7 Inmobiliaria San Luis S.A. Chile 25.00% 121,757 - - - 30,43976.320.132-5 Inmobiliaria San Nicolas Norte Dos SpA. Chile 40.00% 2,052,061 986,181 - 393,753 820,82476.209.105-4 Inmobiliaria San Nicolas Norte SpA. Chile 40.00% 127,998 33,519 - 13,407 51,19996.953.540-8 Inmobiliaria Sol De Maipú S.A. Chile 50.00% 903,070 380,827 - 190,414 451,53599.564.930-6 Inmobiliaria Urano S.A. Chile 33.00% 2,907 - - - 96976.576.572-2 Inmobiliaria Via Poniente S.A. Chile 50.00% 5,396,321 (256,710) - (133,789) 2,698,16176.966.850-0 Inmobiliaria Vicente Valdés S.A. Chile 35.00% 3,289,923 1,847,977 - 646,792 1,151,473

76.320.057-4 Inmobiliaria Y Desarrolladora El Remanso SpA. Chile 30.00% 7,332,162 (227,753) - (68,326) 2,199,649

76.039.786-5 Inversiones Inmobiliarias Seguras S.A. Chile 42.00% 3,284,942 337,087 - 141,770 1,381,55896.844.470-0 Piedra Roja Desarrollos Inmobiliarios S.A. (*) Chile 15.83% 89,263,572 65,500 - 10,369 14,128,89776.693.443-9 Rentas Nueva El Golf SpA. Chile 50.00% 7,694,749 73,269 - 36,635 3,847,368

422,043,100 30,261,922 7,681,535 118,801,098

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As of December 31, 2016:

Chilean tax Company

Country of origin

Ownership interest % Equity Net income Impairment

Investment income

Final investment

76.069.369-3 LVCC Asset Management S.A. Chile 25.00% 12,173,768 5,018,842 - 1,254,712 3,043,44299.531.100-3 Inmobiliaria Seis Norte S.A. Chile 50.00% 1,475,002 50,357 - 25,180 737,500Foreign La Positiva Vida1 Peru 40.14% 79,996,530 5,636,769 - 2,190,541 41,242,08599.556.340-1 Inmobiliaria Alsacia Golf S.A. Chile 0.10% 3,280 - - - 32896.658.670-2 Dcv-Vida Chile 21.14% 1,038,298 210,328 - 43,845 219,56476.515.769-2 Inversiones El Pinar SpA Chile 50.00% 4,974,602 (350,558) - (143,997) 2,487,30199.564.930-6 Inmobiliaria Urano S.A. Chile 33.33% 2,907 - - - 96976.409.386-0 Avsa Ñuñoa Hc SpA Chile 40.00% 754,375 (185,567) - (74,227) 301,75099.586.380-4 Constructora E Inmb. Del Parque S.A Chile 50.00% 66,217 (26,474) - (13,777) 33,10999.564.920-9 Chile 33.33% (3,643) 1,047 - - 1

76.745.890-8 Constructora E Inmobiliaria Del Parque 2 S.A. Chile 50.00% 221,414 (8,054) - (4,027) 110,707

76.587.886-1 Desarrollos Industriales SpA Chile 40.00% 1,815,525 (9,918) - (3,967) 726,21076.954.790-8 Inmobiliaria Los Cóndores Chile 33.33% 11,811,079 (150,934) - (50,029) 3,937,02699.591.340-2 Inmobiliaria Los Navegantes S.A. Chile 50.00% 17,898 11,971 - 5,985 8,94976.455.471-k Inmobiliaria Aguapiedra SpA. Chile 15.00% 6,193,894 (36,006) - (5,401) 929,08476.318.228-2 Inmobiliaria Aguas Claras Chile 15.00% 9,244,179 798,820 - 119,823 1,386,62799.599.540-9 Inmobiliaria Alta Vista S.A. Chile 40.00% 1,108,646 155,699 - 76,155 443,45876.468.394-3 Inmobiliaria Alto Reloncaví Chile 45.00% 628,024 (302,112) - (125,725) 282,61176.233.018-0 Inmobiliaria Armas Move S.A. Chile 50.00% 399,101 2,597,732 - 1,298,866 199,55176.231.874-1 Inmobiliaria Calama SpA. Chile 40.00% 3,793,413 147,882 - 59,153 1,517,36576.563.450-4 Inmobiliaria Desarrollo Sur S.A. Chile 35.00% - - - 797 176.326.533-1 Chile 15.00% 3,389,118 143,688 - 21,532 508,36876.009.849-3 Inmobiliaria El Montijo 2 S.A. Chile 33.33% 660,667 17,713 - 5,905 220,22276.646.780-6 Inmobiliaria El Montijo S.A. Chile 33.33% 5,054,582 1,700,943 - 559,593 1,684,86196.995.870-8 Inmobiliaria Ipl S.A. Chile 33.33% 75,878 (396) - (132) 25,29376.641.360-9 Inmobiliaria Jardín Del Carmen S.A. Chile 33.33% 93,826 6,015 - 2,005 31,27576.027.704-5 Inmobiliaria Jardines De Cerrillos Chile 50.00% 6,603,574 (634,988) - (317,494) 3,301,787

99.591.360-7 Inmobiliaria La Hacienda De Huechuraba S.A. Chile 50.00% 917,826 (77,084) - (38,542) 458,913

76.283.072-8 Inmobiliaria Las Higueras S.A. Chile 50.00% (1,155,485) (418,691) - - 176.349.920-0 Inmobiliaria Los Aromos S.A. Chile 50.00% 633,861 (69,538) - (34,769) 316,93199.577.930-7 Inmobiliaria Los Arrayanes S.A Chile 44.00% 276,348 37,929 - 16,689 121,59376.883.240-4 Inmobiliaria Los Cipreses Chile 50.00% 9,181,991 32,143 - 16,071 4,590,99699.591.350-k Inmobiliaria Los Gavilanes S.A. Chile 50.00% 195,078 (6,838) - (3,419) 97,53976.216.575-9 Inmobiliaria Los Maderos SpA. Chile 15.00% 1,447,730 479,431 - 71,915 217,16076.455.482-5 Inmobiliaria Los Robles SpA. Chile 15.00% 6,321,901 124,730 - 18,710 948,28576.416.293-5 Inmobiliaria Monte Santo 3 SpA. Chile 33.33% 135,147 246,494 - 45,049 45,04976.213.015-7 Inmobiliaria Montepiedra S.A. Chile 15.00% 2,877,948 2,363,456 - 354,518 431,69296.931.030-9 Inmobiliaria Parque La Luz Chile 33.33% (89,685) (45) - - 176.435.779-5 Inmobiliaria Pc 50 SpA Chile 50.00% 4,926,692 18,640 - 9,320 2,463,34699.591.150-7 Inmobiliaria San Luis S.A. Chile 25.00% 121,757 - - - 30,43976.209.105-4 Inmobiliaria San Nicolás Norte Chile 40.00% 492,901 233,602 - 93,441 197,16076.320.132-5 Inmobiliaria San Nicolás Norte Dos Chile 40.08% 2,565,880 14,642 - 5,869 1,028,37696.953.540-8 Inmobiliaria Sol De Maipú S.A. Chile 50.00% 522,243 597,916 - 261,121 261,12276.966.850-0 Inmobiliaria Vicente Valdes Chile 35.00% 1,709,832 2,015,267 - 705,586 598,44176.320.057-4 Inmobiliaria Y Desarrolladora El Remanso Chile 30.00% 7,559,915 (333,587) - (100,076) 2,267,97596.844.470-0 Piedra Roja Desarrollos Inmobiliarios S.A. Chile 15.83% 89,217,197 (1,381,141) - (218,631) 14,121,55676.039.786-5 Soc. Inv. Inmb. Seguras Chile 42.06% 2,947,855 (1,008,874) - (413,466) 1,239,78876.449.357-5 Matriz Plaza Egaña SpA. Chile 2.30% 52,694 (163,305) - - 1,205

282,451,780 17,497,946 5,714,702 92,817,012


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Statement of Financial Position as of 12/31/2017

Assets ThCh$ ThCh$

Current assets 14,554,687 Current liabilities 10,137,192Non-current assets 161,742,661 Non-current liabilities 76,896,584

Equity 89,263,572Total assets 176,297,348 176,297,348

Statement of income ThCh$

Revenue from ordinary activities 1,322,968Cost of sales 458,066

1,781,034Administrative expenses (1,989,865)Financial income 49,954Financial costs (1,017,748)Other income (losses) (55,623)

Income tax expense 1,297,748Net loss for the year 65,500

Statement Of Financial Position As Of 12/31/2017

Assets ThCh$ ThCh$

Current Assets 9,741,061 Current Liabilities 3,168,242Non-Current Assets 14,613,971 Non-Current Liabilities 6,077,314



Revenue from ordinary activities 6,074,307Cost of sales (6,074,312)

Administrative expenses (424,001)Financial income 16,323Financial costs (437,906)Other income (losses) (191,550)

Income tax expense 543,042Net income for the year

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Assets ThCh$ ThCh$

Current assets 15,302,195 Current liabilities 9,859,574Non-current assets 13,742,918 Non-current liabilities 6,584,158



Revenue from ordinary activities 8,368,826Cost of sales (6,748,043)

1,620,783Administrative expenses (1,104,961)Financial income 11,382Financial costs (234,868)Other income (losses) 12,844

305,180Income tax expense 114,209Net income for the year 419,389

NOTE 14 INTANGIBLE ASSETS OTHER THAN GOODWILL

a) Intangible assets other than goodwill were as follows:

12/31/2017 ThCh$

Opening Movements for the year

Amortization for the year

Closing Amortization

period

Computer programs 1,290,518 534,184 (428,595) 1,396,107 120 Computer programs 1,329,886 417,490 (400,321) 1,347,055 60 Computer programs 208,969 (208,969) - - 48 Rights 1,300,671 423,575 (842,148) 882,098 60 Total 4,130,044 1,166,280 3,625,260

ThCh$

Opening Movements for the year

Amortization for the year

Closing Amortization

period

Computer programs 880,781 730,772 (321,035) 1,290,518 120 Computer programs 1,107,677 612,020 (389,811) 1,329,886 60 Computer programs 140,464 71,647 (3,142) 208,969 48 Rights 1,729,237 454,415 (882,981) 1,300,671 60 Total 3,858,159 1,868,854 4,130,044

b) Amortization of Intangible Assets is calculated using the straight-line method, amortization is distributed throughout the estimated useful life of the asset.


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NOTE 15 GOODWILL

a) Goodwill was as follows:


ThCh$

Net opening Acquisitions

through shares

Impairment losses

recognized in equity

Impairment losses

recognized in net income

Net closing

Banco Consorcio 1,777,258 - - - 1,777,258 Cn Life Compañía de Seguros S.A. 4,677,279 - - - 4,677,279 Cia. de Seguros de Vida Consorcio Nacional de Seguros S.A. 59,722 13,975 - - 73,697

Inmobiliaria Seis Norte S.A. 72,788 - - - 72,788 Piedra Roja Desarrollos Inmobiliarios S.A. 455,857 - - - 455,857 Inversiones El Pinar SpA 469,769 531 - - 470,300 Inversiones Continental Bio Bio SpA 410,207 237,642 - - 647,849 Inmobiliaria el Mariscal S.A. - 37,820 - - 37,820 Total 7,922,880 289,968 8,212,848

Al 31 de diciembre de 2016

ThCh$

Net opening Acquisitions

through shares

Impairment losses

recognized in equity

Impairment losses

recognized in net income

Net closing

Banco Consorcio 1,777,258 - - - 1,777,258 Cn Life Compañía de Seguros S.A. 4,677,279 - - - 4,677,279 Cia. de Seguros de Vida Consorcio Nacional de Seguros S.A. - 59,722 - - 59,722

Inmobiliaria Seis Norte S.A. 72,788 - - - 72,788 Piedra Roja Desarrollos Inmobiliarios S.A. 455,857 - - - 455,857 Inversiones El Pinar SpA 396,995 72,774 - - 469,769 Inversiones Continental Bio Bio SpA - 410,207 - - 410,207 Total 7,380,177 542,703 7,922,880

The impairment model is described in Note 3.1.9 - Accounting Policies.

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NOTE 16 PROPERTY INVESTMENTS

a) Property Investments were as follows:

Net property investments12/31/2017

ThCh$12/31/2016

ThCh$

Land 293,678,361 270,755,527Buildings 161,288,022 151,434,043Total property investments 454,966,383 422,189,570

Gross property investments 12/31/2017

ThCh$12/31/2016

ThCh$

Land 293,678,361 270,755,527Buildings 195,469,963 181,132,996Total property investments 489,148,324 451,888,523

Accumulated depreciation and impairment on property investments12/31/2017

ThCh$12/31/2016

ThCh$

Accumulated depreciation and impairment, buildings 34,181,941 29,698,953Net accumulated depreciation on property investments 34,181,941 29,698,953

b) Detail of movements


Buildings ThCh$ Total ThCh$

Property investments opening balance 270,755,527 151,434,043 422,189,570Additions 35,211,029 3,528,008 38,739,037Depreciation expense, property, plant and equipment - (4,010,393) (4,010,393)Sales and disposals (19,024,175) (522,037) (19,546,212)Revaluation adjustments 6,735,980 2,888,215 9,624,195Impairment provision - 7,970,186 7,970,186Total property investments 293,678,361 161,288,022 454,966,383


Buildings ThCh$ Total ThCh$

Property investments opening balance 238,752,949 132,142,133 370,895,082Additions 40,175,142 22,220,443 62,395,585Depreciation expense, property, plant and equipment - (3,539,170) (3,539,170)Sales and disposals (15,161,110) (95,535) (15,256,645)Revaluation adjustments 7,000,156 449,502 7,449,658Impairment provision (11,610) 256,670 245,060Total property investments 270,755,527 151,434,043 422,189,570

See “Contingencies and Commitments” (Note 34), which details restrictions associated with property investments.


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NOTE 17 PROPERTY, PLANT AND EQUIPMENT

a) Property, plant and equipment balances are detailed as follows:

Net property, plant and equipment12/31/2017

ThCh$12/31/2016

ThCh$

Construction in progress, net - -Land 4,873,818 4,746,497Buildings, net 17,703,123 16,854,404Furniture, plant and equipment, net 1,695,617 1,939,393Computer equipment 2,014,121 1,989,433Vehicles, net 133,330 137,520Others, net 2,424,405 1,908,023Property, plant and equipment, net 28,844,414 27,575,270

Gross property, plant and equipment12/31/2017

ThCh$12/31/2016

ThCh$

Construction in progress, gross - -Land 4,873,818 4,746,497Buildings, gross 25,168,433 23,751,245Furniture, plant and equipment, gross 4,938,783 5,645,925Computer equipment 14,534,689 13,527,237Vehicles, gross 210,455 211,923Others, gross 4,767,298 3,815,339Total property, plant and equipment, gross 54,493,476 51,698,166

Accumulated depreciation and impairment on property, plant and equipment12/31/2017

ThCh$12/31/2016

ThCh$

Accumulated depreciation and impairment, buildings 7,465,310 6,896,841Accumulated depreciation and impairment, furniture, plant and equipment 3,243,166 3,706,532Accumulated depreciation and impairment, computer equipment 12,520,568 11,537,804Accumulated depreciation and impairment, vehicles 77,125 74,403Accumulated depreciation and impairment, other 2,342,893 1,907,316Total accumulated depreciation on property, plant and equipment 25,649,062 24,122,896

b) Detail of movements


Construction

in progressThCh$ ThCh$

Buildings ThCh$

Furniture, plant and

equipment ThCh$

Computer equipment

ThCh$Vehicles

ThCh$Others ThCh$

Total

ThCh$

Property, plant and equipment, opening balance - 4,746,497 16,854,404 1,939,393 1,989,433 137,520 1,908,023 27,575,270

Additions - 53,003 1,053,233 45,299 1,073,285 19,824 952,105 3,196,749Depreciation expense - - (447,469) (276,364) (1,048,557) (17,233) (435,722) (2,225,345)Sales and disposals - - - (1,386) - (11,852) - (13,238)Revaluation adjustments - 74,318 242,955 (11,325) (40) 5,071 (1) 310,978Impairment provision - - - - - - - -Total property, plant and equipment 4,873,818 17,703,123 1,695,617 2,014,121 133,330 2,424,405 28,844,414

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Construction

in progressThCh$ ThCh$

Buildings ThCh$

Furniture, plant and

equipment ThCh$

Computer equipment ThCh$

Vehicles ThCh$

Others ThCh$

Total

ThCh$

Property, plant and equipment, opening balance 1,507,400 5,056,915 16,798,491 1,845,072 1,805,406 264,951 2,064,799 29,343,034

Additions 1,472,324 - 3,048,348 351,463 1,140,365 99,656 201,718 6,313,874Depreciation expense - - (434,897) (257,142) (956,096) (32,031) (358,494) (2,038,660)Sales and disposals (3,048,348) (431,505) (2,932,845) - (242) (195,056) - (6,607,996)Revaluation adjustments 68,624 121,816 375,307 - - - - 565,747Impairment provision - (729) - - - - - (729)Total property, plant and equipment 4,746,497 16,854,404 1,939,393 1,989,433 137,520 1,908,023 27,575,270

Estimated useful lives as of December 31, 2017 and December 31, 2016, were as follows:

Description

Assigned useful life

Consolidated information

Buildings 50 to 51Furniture, plant and equipment 4 to 7Computer equipment 2 to 3Vehicles 3Others 4

NOTE 18 CURRENT TAX LIABILITIES

Current tax liabilities were as follows:

12/31/2017 ThCh$

12/31/2016 ThCh$

VAT payable 811,522 730,841Income tax 1,568,393 5,956,234Third-party tax - 1,020,180Reinsurance tax 428,302 42,976Monthly provisional tax payments - -Other - 672,243Total 2,808,217 8,422,474


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NOTE 19 OTHER NON-FINANCIAL LIABILITIES

12/31/2017 ThCh$

12/31/2016 ThCh$

InsuranceDividends payable 215,187 106,059Insurance contributions payable 2,952,671 4,019,400Expired checks 3,086,280 3,048,067Accounts payable 19,894,057 10,690,164Prepayments on projects (*) 38,680,133 33,772,835Brokerage payables 1,966,511 1,643,707Premium prepayments received 47,478 1,506

2,392,277 255,8311,303,222 544,138

Accounts payable 31,338,644 22,155,208Parent company and othersExpired checks 11,690 134,258Accounts payable 3,725,915 3,242,011

15,622 13,2154,683 4,332

Total 105,634,370 79,630,731

(*) Prepayments on real estate investment commitments in the insurance segment.

NOTE 20 TRADE AND OTHER ACCOUNTS PAYABLE

Trade and other accounts payable were as follows:

12/31/2017 ThCh$

12/31/2016 ThCh$

Technical reserve 5,634,456,612 5,228,090,782 Payables on insurance transactions 9,205,148 9,480,118 Brokerage creditors 46,736,414 20,299,189

5,690,398,174 5,257,870,089

The calculation model for technical reserves is described in Note 3.3.6 - Accounting Policies.

NOTE 21 OTHER FINANCIAL LIABILITIES


a)

Fair value ThCh$

Amortized Cost ThCh$

Total

ThCh$

Bank obligations 17,563,106 124,114,812 141,677,918Bonds payable - 171,126,105 171,126,105Current accounts 1,937,643 13,856,465 15,794,108Derivative obligations 3,495,337 13,694,130 17,189,467Short sale obligations 22,996,086 322,791,512 345,787,598Repurchase agreements - - -Total 22,996,086 322,791,512 345,787,598

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b)

Fair value ThCh$


Total

ThCh$

Bank obligations - 182,259,246 182,259,246Current accounts - 17,051,114 17,051,114Current bonds - 606,829,363 606,829,363Derivative obligations 15,474,748 15,474,748Other obligations - 6,641,906 6,641,906Repurchase contracts and securities lending 387,368,718 387,368,718Savings accounts and time deposits. 2,015,008,618 2,015,008,618Payables to credit card operators 1,730 1,730Total 402,843,466 2,827,791,977 3,230,635,443Overall total 425,839,552 3,150,583,489 3,576,423,041


a)

Fair value ThCh$


Total

ThCh$

Bank obligations 1,205,539 186,723,807 187,929,346Bonds payable - 132,125,257 132,125,257Current accounts 788,023 50,895,974 51,683,997Derivative obligations - 3,000,659 3,000,659Short sale obligations 1,993,562 372,745,697 374,739,259Repurchase agreements - 3,000,659 3,000,659Total 1,993,562 372,745,697 374,739,259

b)

Fair value ThCh$


Total

ThCh$

Bank obligations - 176,074,080 176,074,080Current accounts - 15,379,260 15,379,260Current bonds - 455,387,741 455,387,741Derivative obligations 10,208,982 - 10,208,982Other obligations - 3,877,457 3,877,457Repurchase contracts and securities lending 323,802,928 - 323,802,928Savings accounts and time deposits - 1,791,144,349 1,791,144,349Payables to credit card operators - 2,953 2,953Total 334,011,910 2,441,865,840 2,775,877,750Overall Total 336,005,472 2,814,611,537 3,150,617,009


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Obligations as of December 31, 2017: (insurance, parent company and others)

name countryCreditor

Creditor nameCreditor country Currency

Repayment terms

rate %

Nominal rate

% ThCh$

91 days

ThCh$ ThCh$ ThCh$

Over 5 years

ThCh$Total

ThCh$

79.619.200-3 FINANCIERO CHILE 97.030.000-7 BANCO ESTADO CHILE CHILEAN PESOS SIX MONTHLY 0.24% 17,418,572 - - - - 17,418,572

79.619.200-3 FINANCIERO CHILE ** BONDS CHILE UF SIX MONTHLY 4.02% - 1,281,224 6,040,102 4,420,933 55,184,523 66,926,78279.619.200-3 FINANCIERO CHILE ** BONDS CHILE UF ANNUAL 2.00% - 932,270 1,549,551 50,647,647 - 53,129,46879.619.200-3 FINANCIERO CHILE ** BONDS CHILE UF ANNUAL 2.96% - 1,549,665 2,537,867 2,394,085 44,588,238 51,069,855

96.579.280-5 CN LIFE CHILE 97.030.000-7 BANCO ESTADO CHILE CHILEAN PESOS QUARTERLY 0.26% 10,067,600 - - - - 10,067,600

96.579.280-5 CN LIFE CHILE 97.080.000-k BANCO BICE CHILE US DOLLARS QUARTERLY 1.89% - 7,495,506 - - - 7,495,506

96.579.280-5 CN LIFE CHILE 97.036.000-KBANCO SANTANDER CHILE

CHILE US DOLLARS SIX MONTHLY 4.64% 32,076 31,067 727,589 - - 790,732

96.579.280-5 CN LIFE CHILE 97.032.000-8 BANCO BBVA CHILE CHILE US DOLLARS SIX MONTHLY 7.11% 12,493 11,945 239,825 - - 264,263

96.579.280-5 CN LIFE CHILE DEUTSCHE BANK AG LONDON ENGLAND US DOLLARS SIX MONTHLY 7.11% 12,305 11,763 234,243 - - 258,311

96.579.280-5 CN LIFE CHILE 97.032.000-8 BANCO BBVA CHILE CHILE EURO SIX MONTHLY 4.00% 13,451 - 206,029 - - 219,480

96.579.280-5 CN LIFE CHILE 97.023.000-9 ITAU CORPBANCA CHILE US DOLLARS SIX MONTHLY 5.33% 9,922 9,518 130,371 - - 149,811


CHILE EURO SIX MONTHLY 6.19% (58,887) - 66,066 - - 7,179

96.579.280-5 CN LIFE CHILEBANK OF AMERICA MERRILL LYNCH

USA US DOLLARS MONTHLY 1.33% 1,937,643 - - - - 1,937,643

96.654.180-6 CONSORCIO GENERALES CHILE 97004000-5 BANCO CHILE CHILE CHILEAN

PESOS MONTHLY 0.29% 1,170,926 - - - - 1,170,926

99.012.000-5 CNS VIDA CHILE 97.006.000-6 BANCO BCI CHILE US DOLLARS ANNUAL 2.04% - 15,419,267 - - - 15,419,26799.012.000-5 CNS VIDA CHILE 97.030.000-7 BANCO ESTADO CHILE US DOLLARS ANNUAL 1.63% 7,108,002 - - - - 7,108,00299.012.000-5 CNS VIDA CHILE 97.030.000-7 BANCO ESTADO CHILE US DOLLARS ANNUAL 1.54% 61,682,724 - - - - 61,682,72499.012.000-5 CNS VIDA CHILE 97.018.000-1 SCOTIABANK CHILE US DOLLARS ANNUAL 1.63% 15,067,360 - - - - 15,067,36099.012.000-5 CNS VIDA CHILE 97.018.000-1 SCOTIABANK CHILE US DOLLARS ANNUAL 1.72% 6,247,961 - - - - 6,247,961

99.012.000-5 CNS VIDA CHILE 97.032.000-8 BANCO BBVA CHILE CHILE UF HELD TO

MATURITY 0.40% 213 - - - - 213

99.012.000-5 CNS VIDA CHILE 97.004.000-5 BANCO DE CHILE CHILE UF HELD TO MATURITY 0.40% 917 - - - - 917

99.012.000-5 CNS VIDA CHILE 97.030.000-7 BANCO ESTADO CHILE UF HELD TO MATURITY 0.40% 677 - - - - 677

99.012.000-5 CNS VIDA CHILE 97.030.000-7 BANCO ESTADO CHILE UF HELD TO MATURITY 0.40% 339 - - - - 339

99.012.000-5 CNS VIDA CHILE 96.509.660-4 BANCO FALABELLA CHILE UF HELD TO

MATURITY 0.40% 277 - - - - 277

99.012.000-5 CNS VIDA CHILE 97.951.000-4 HSBC BANK CHILE CHILE UF HELD TO

MATURITY 0.40% - - 253 - - 253

99.012.000-5 CNS VIDA CHILE 97.011.000-3 BANCO INTERNACIONAL CHILE UF HELD TO

MATURITY 0.40% - - 238 - - 238

99.012.000-5 CNS VIDA CHILE 97.951.000-4 HSBC BANK CHILE CHILE US DOLLAR

OBSERVED HELD TO MATURITY 0.21% 202,722 - - - - 202,722

99.012.000-5 CNS VIDA CHILE 96.509.660-4 BANCO FALABELLA CHILE US DOLLAR








99.012.000-5 CNS VIDA CHILE 97.032.000-8 BANCO BBVA CHILE CHILE US DOLLAR


99.012.000-5 CNS VIDA CHILE 97.951.000-4 HSBC BANK CHILE CHILE US DOLLAR


99.012.000-5 CNS VIDA CHILE DEUTSCHE BANK AG LON ENGLAND EURO HELD TO

MATURITY 0.21% 296,262 - - - - 296,262

99.012.000-5 CNS VIDA CHILE GOLDMAN SACHS USA CHILEAN

PESOS HELD TO MATURITY 0.00% 433,560 - - - - 433,560

212

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Repayment terms

rate %

Nominal rate

% ThCh$

91 days

ThCh$ ThCh$ ThCh$

Over 5 years

ThCh$Total

ThCh$


PESOS HELD TO MATURITY 0.00% 426,568 - - - - 426,568

99.012.000-5 CNS VIDA CHILE 97.036.000-KBANCO SANTANDER CHILE

CHILE US DOLLAR OBSERVED SIX MONTHLY 4.93% 148,647 144,157 533,803 471,093 3,113,682 4,411,382

99.012.000-5 CNS VIDA CHILEJP MORGAN CHASE BANK N.A - NEW YORK

USA US DOLLAR OBSERVED SIX MONTHLY 7.22% 94,179 90,538 328,717 1,987,037 - 2,500,471

99.012.000-5 CNS VIDA CHILE BBVA ESPANA SPAIN EURO SIX MONTHLY 4.00% 121,063 - 223,438 200,459 1,430,360 1,975,320


CHILE US DOLLAR OBSERVED SIX MONTHLY 4.64% 53,049 51,380 189,591 166,242 847,488 1,307,750


USA US DOLLAR OBSERVED SIX MONTHLY 4.03% 2,757 1,934 431,371 - - 436,062

99.012.000-5 CNS VIDA CHILE GOLDMAN SACHS USA EURO SIX MONTHLY 3.50% (19,260) - (32,823) (25,957) 497,718 419,678

99.012.000-5 CNS VIDA CHILE 97.032.000-8 BANCO BBVA CHILE CHILE EURO SIX MONTHLY 3.50% (17,248) - (29,474) (23,415) 437,478 367,341



CHILE US DOLLAR OBSERVED SIX MONTHLY 4.03% 2,313 2,347 306,521 - - 311,181

99.012.000-5 CNS VIDA CHILE BANK OF AMERICA N.Y USA EURO SIX MONTHLY 4.90% 5,170 - 10,619 10,860 237,736 264,385


99.012.000-5 CNS VIDA CHILE BANK OF AMERICA N.Y USA US DOLLAR

OBSERVED SIX MONTHLY 6.96% 40,901 38,590 133,418 (16,040) - 196,869




USA US DOLLAR OBSERVED SIX MONTHLY 5.34% 5,399 5,226 19,284 131,135 - 161,044

99.012.000-5 CNS VIDA CHILE BANK OF AMERICA N.Y USA EURO SIX MONTHLY 3.61% (28,866) - (51,019) (42,920) 234,773 111,968

99.012.000-5 CNS VIDA CHILE BANK OF AMERICA N.Y USA EURO SIX MONTHLY 4.91% (4,636) - (7,389) (5,200) 104,931 87,706


99.012.000-5 CNS VIDA CHILE 97.004.000-5 BANCO DE CHILE CHILE US DOLLAR OBSERVED SIX MONTHLY 5.07% - 47,056 82,020 24,059 (87,943) 65,192

99.012.000-5 CNS VIDA CHILE 97.032.000-8 BANCO BBVA CHILE CHILE US DOLLAR

OBSERVED SIX MONTHLY 6.94% 38,490 36,219 124,331 (139,796) - 59,244


CHILE US DOLLAR OBSERVED SIX MONTHLY 4.98% (553) 21,254 - - - 20,701

99.012.000-5 CNS VIDA CHILE 97.032.000-8 BANCO BBVA CHILE CHILE EURO SIX MONTHLY 2.82% - (37,279) (67,400) (58,629) 165,634 2,326

99.012.000-5 CNS VIDA CHILEBANK OF AMERICA MERRILL LYNCH

USA US DOLLAR OBSERVED MONTHLY 1.33% 13,856,465 - - - - 13,856,465

345,787,598

** : Holders of bonds issued by Consorcio Financiero S.A.

(Continued)


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Details Bank and subsidiaries:

Book value at maturity Maturity

ThCh$year

ThCh$ ThCh$ ThCh$

Over 5 years

ThCh$Total

ThCh$

Bank obligations 123,626,481 21,576,745 - - 37,056,020 182,259,246Current account 17,051,114 - - - - 17,051,114Derivative obligations 15,332,903 141,845 - - - 15,474,748Repurchase account statement and securities lending 387,368,718 - - - - 387,368,718

Savings accounts and time deposits 438,339,131 1,129,107,739 447,561,748 - - 2,015,008,618Payables to credit card operators 1,730 - - - - 1,730Other obligations 6,641,906 6,641,906

2,623,806,080

Detail of bonds as of 12/31/2017:

Series CurrencyNominal

valueMaturity date

Interest payments

Principal payments

Placed in Chile/

rateNominal

rate


ThCh$year

ThCh$ ThCh$ ThCh$ Over 5 years

ThCh$Total

ThCh$

Subordinated Bonds BCNO-A UF 1,500,000 10/31/2031 Six

monthly At completion Chile 4.40% 4.00% - - - - 38,788,019 38,788,019

Subordinated Bonds BCNO-G UF 1,000,000 4/1/2039 Six


Subordinated Bonds BCNO-K UF 1,500,000 11/1/2039 Six


Subordinated Bonds BCNO-Y UF 1,000,000 7/5/2041 Six


Current bonds BCNO-AB UF 3,000,000 3/5/2022 Six monthly At completion Chile 2.01% 2.40% - - 82,246,991 - 82,246,991

Current bonds BCNO-C UF 1,500,000 7/5/2018 Six monthly At completion Chile 3.70% 3.54% - - 40,293,454 - - 40,293,454

Current bonds BCNO-AC UF 2,000,000 1/5/2023 Six monthly At completion Chile 2.40% 1.86% - - 55,578,605 - 55,578,605

Current bonds BCNO-O Chilean pesos 36,900,000 5/1/2020 Six

monthly At completion Chile 4.87% 5.90% - - 38,061,317 - - 38,061,317

Current bonds BCNO-L UF 1,500,000 5/1/2018 Six monthly At completion Chile 2.20% 2.20% - - 40,341,314 - - 40,341,314

Current bonds BCNO-H UF 1,500,000 4/1/2019 Six monthly At completion Chile 2.70% 3.00% - - 40,640,139 - - 40,640,139

Current bonds BCNO-U UF 3,000,000 9/1/2020 Six monthly At completion Chile 2.70% 3.00% - - - - 79,762,905 79,762,905

Current bonds BCNO-W UF 1,500,000 9/1/2040 Six monthly At completion Chile 3.54% 3.60% - - - - 41,024,773 41,024,773

Current bonds BCNO-AI UF 1,000,000 9/1/2040 Six monthly At completion Chile 3.10% 3.05% - - 54,790,584 - - 54,790,584

606,829,363Total 1,125,051,694 1,177,969,976 758,411,012 59,939,606 279,472,491 3,576,423,041

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Obligations as of December 31, 2016: (insurance, parent company and others)

name countryCreditor ID


Repayment terms

rate %

Nominal raten

%DAYS

ThCh$

91 days

ThCh$YEARS ThCh$

YEARS ThCh$

Over 5 years

ThCh$Total

ThCh$

79.619.200-3 FINANCIERO CHILE 97.030.000-7 BANCO ESTADO CHILE PESOS SIX MONTHLY 4.35% - 22,900,812 - - - 22,900,812

79.619.200-3 FINANCIERO CHILE 97.004.000-5 BANCO DE CHILE CHILE CHILEAN PESOS QUARTERLY 0.37% 9,796,621 - - - - 9,796,621

79.619.200-3 FINANCIERO CHILE 97.036.000-K BANCO SANTENDER CHILE CHILEAN

PESOS QUARTERLY 5.29% - 21,182,018 - - - 21,182,018

79.619.200-3 FINANCIERO CHILE ** BONOS CHILE UF MATURITY 3.82% - 2,370,268 64,005,657 - - 66,375,92579.619.200-3 FINANCIERO CHILE ** BONOS CHILE UF SIX MONTHLY 4.02% - 2,494,571 4,703,846 4,346,670 54,204,245 65,749,332

79.619.200-3 FINANCIERO CHILE 97023000-9 ITAU CORPBANCA CHILE US

DOLLARS SIX MONTHLY 0.29% 85,154 - - - - 85,154

96.579.280-5 CN LIFE CHILE 97.080.000-k BANCO BICE CHILE CHILEAN PESOS MONTHLY 0.34% 8,119,134 - - - - 8,119,134

96.579.280-5 CN LIFE CHILE 97.030.000-7 BANCO ESTADO CHILE CHILEAN PESOS MONTHLY 0.37% - 10,294,430 - - - 10,294,430

96.579.280-5 CN LIFE CHILE 97.030.000-7 BANCO ESTADO CHILE US DOLLARS SIX MONTHLY 0.33% 3,000,660 - - - - 3,000,660

96.579.280-5 CN LIFE CHILE 97.018.000-1 SCOTIABANK CHILE US DOLLARS SIX MONTHLY 0.27% 93,339 - - - - 93,339

96.579.280-5 CN LIFE CHILE 97.006.000-6 BANCO BCI CHILE US DOLLARS SIX MONTHLY 0.27% 77,433 - - - - 77,433

96.579.280-5 CN LIFE CHILE 97.023.000-9 ITAU CORPBANCA CHILE US


96.579.280-5 CN LIFE CHILE DEUTSCHE BANK AG LONDON ENGLAND US


96.579.280-5 CN LIFE CHILE 97.004.000-5 BANCO DE CHILE CHILE US DOLLARS SIX MONTHLY 0.27% 62,522 - - - - 62,522

96.579.280-5 CN LIFE CHILE 97.032.000-8 BANCO BBVA CHILE CHILE US





96.579.280-5 CN LIFE CHILE 97.951.000-4 HSBC BANK CHILE CHILE US


96.579.280-5 CN LIFE CHILE 97.006.000-6 BANCO BCI CHILE US DOLLARS SIX MONTHLY 0.27% 30,537 - - - - 30,537








96.579.280-5 CN LIFE CHILE 97.011.000-3 BANCO INTERNACIONAL CHILE US






96.579.280-5 CN LIFE CHILE 97.951.000-4 HSBC BANK CHILE CHILE US



CHILE US DOLLARS SIX MONTHLY 0.43% 50,488 49,074 1,534,142 - - 1,633,704

96.579.280-5 CN LIFE CHILECREDIT SUISSE FIRST BOSTON INTERNATIONAL

ENGLAND US DOLLARS SIX MONTHLY 1.70% - 627,381 - - - 627,381


DOLLARS SIX MONTHLY 0.30% 23,078 22,171 541,091 - - 586,340

96.579.280-5 CN LIFE CHILE DEUTSCHE BANK AG LONDON ENGLAND US




96.579.280-5 CN LIFE CHILE 97.004.000-5 BANCO DE CHILE CHILE US DOLLARS SIX MONTHLY -0.98% - - 181,554 - - 181,554


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Repayment terms

rate %

Nominal raten

%DAYS

ThCh$

91 days

ThCh$YEARS ThCh$

YEARS ThCh$

Over 5 years

ThCh$Total

ThCh$

96.579.280-5 CN LIFE CHILE BANK OF AMERICA N.Y USA US



DOLLARS SIX MONTHLY 0.90% - 21,810 (6,622) - - 15,188


DOLLARS SIX MONTHLY 0.84% 5,120 4,841 (1,861) - - 8,100





96.654.180-6 CONSORCIO GENERALES CHILE 970044000-5 CHILE CHILEAN

PESOS MONTHLY 0.37% 1,205,539 - - - - 1,205,539

96.654.180-6 CONSORCIO GENERALES CHILE 97004000-5 BANCO CHILE CHILE US


96.654.180-6 CONSORCIO GENERALES CHILE 97032000-8 BANCO BBVA CHILE US


99.012.000-5 CNS VIDA CHILE 97.032.000-8 BANCO BBVA CHILE CHILE CHILEAN

PESOS MONTHLY 0.36% 6,677,492 - - - - 6,677,492

99.012.000-5 CNS VIDA CHILE 97.006.000-6 BANCO BCI CHILE US DOLLARS SIX MONTHLY 1.04% 16,805,404 - - - - 16,805,404

99.012.000-5 CNS VIDA CHILE 97.030.000-7 BANCO ESTADO CHILE US DOLLARS MONTHLY 0.99% 67,083,237 - - - - 67,083,237

99.012.000-5 CNS VIDA CHILE 97.030.000-7 BANCO ESTADO CHILE CHILEAN PESOS ANNUAL 0.37% - 7,619,696 - - - 7,619,696

99.012.000-5 CNS VIDA CHILE 97.018.000-1 SCOTIABANK CHILE CHILEAN PESOS ANNUAL 0.37% - 16,244,963 - - - 16,244,963

99.012.000-5 CNS VIDA CHILE BBVA ESPAÑA SPAIN US DOLLARS MONTHLY 1.80% 10,083,578 - - - - 10,083,578




USA US DOLLARS SIX MONTHLY 7.22% 194,039 186,956 5,130,752 - - 5,511,747



99.012.000-5 CNS VIDA CHILE MERRIL LYNCH USA US DOLLARS SIX MONTHLY 5.26% - - 1,104,911 - - 1,104,911


USA US DOLLARS SIX MONTHLY 4.03% 11,811 11,263 869,917 - - 892,991

99.012.000-5 CNS VIDA CHILE BANK OF AMERICA N.Y USA US


99.012.000-5 CNS VIDA CHILE 97.004.000-5 BANCO DE CHILE CHILE US DOLLARS SIX MONTHLY 5.07% - 83,229 760,958 - - 844,187

99.012.000-5 CNS VIDA CHILE 97.032.000-8 BANCO BBVA CHILE CHILE US




99.012.000-5 CNS VIDA CHILE DEUTSCHE BANK AG LONDON ENGLAND US

DOLLARS SIX MONTHLY 6.45% - 123,694 433,575 - - 557,269

99.012.000-5 CNS VIDA CHILE 97.032.000-8 Banco BBVA CHILE US DOLLARS SIX MONTHLY 1.62% - - 402,217 - - 402,217





99.012.000-5 CNS VIDA CHILE HSBC BANK USA NY USA US




99.012.000-5 CNS VIDA CHILE Credit Suisse USA US DOLLARS SIX MONTHLY 5.26% - - 254,032 - - 254,032



(Continued)

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Repayment terms

rate %

Nominal raten

%DAYS

ThCh$

91 days

ThCh$YEARS ThCh$

YEARS ThCh$

Over 5 years

ThCh$Total

ThCh$


CHILE US DOLLARS SIX MONTHLY 6.48% - 244,491 - - - 244,491



99.012.000-5 CNS VIDA CHILECREDIT SUISSE FIRST BOSTON INTERNATIONAL


99.012.000-5 CNS VIDA CHILE 97.006.000-6 BANCO BCI CHILE US DOLLARS SIX MONTHLY 3.88% - 64,072 152,168 - - 216,240




CHILE US DOLLARS SIX MONTHLY 6.65% - 197,494 - - - 197,494








PESOS SIX MONTHLY 0.00% - - 138,113 - - 138,113


PESOS SIX MONTHLY 0.00% - - 131,445 - - 131,445







99.012.000-5 CNS VIDA CHILE

JP MORGAN CHASE BANK N.A. (AGENCIA CHILE)


99.012.000-5 CNS VIDA CHILE 97.006.000-6 BANCO BCI CHILE US DOLLARS SIX MONTHLY 5.26% 16,377 15,628 26,973 - - 58,978



99.012.000-5 CNS VIDA CHILE GOLDMAN SACHS USA US














CHILE US DOLLARS SIX MONTHLY 4.75% 26,754 25,661 (46,050) - - 6,365

99.012.000-5 CNS VIDA CHILE 97.951.000-4 HSBC BANK CHILE CHILE US




99.012.000-5 CNS VIDA CHILE 97.023.000-9 ITAU CORPBANCA CHILE US




CHILE US DOLLARS SIX MONTHLY 0.27% 391,202 - - - - 391,202

(Continued)


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Repayment terms

rate %

Nominal raten

%DAYS

ThCh$

91 days

ThCh$YEARS ThCh$

YEARS ThCh$

Over 5 years

ThCh$Total

ThCh$

99.012.000-5 CNS VIDA CHILE 97.006.000-6 BANCO BCI CHILE US DOLLARS SIX MONTHLY 0.27% 382,987 - - - - 382,987

99.012.000-5 CNS VIDA CHILE 97.004.000-5 BANCO DE CHILE CHILE US DOLLARS SIX MONTHLY 0.27% 331,967 - - - - 331,967

99.012.000-5 CNS VIDA CHILE 97.011.000-3 BANCO INTERNACIONAL CHILE US


99.012.000-5 CNS VIDA CHILE 97.004.000-5 BANCO DE CHILE CHILE UF SIX MONTHLY 0.25% - - 323,851 - - 323,851




99.012.000-5 CNS VIDA CHILE 97.053.000-2 BANCO SECURITY CHILE US


99.012.000-5 CNS VIDA CHILE 97.036.000-K SCOTIABANK CHILE US DOLLARS SIX MONTHLY 0.27% 270,526 - - - - 270,526

99.012.000-5 CNS VIDA CHILE 97.080.000-k BANCO BICE CHILE US DOLLARS SIX MONTHLY 0.11% 217,605 - - - - 217,605





99.012.000-5 CNS VIDA CHILE 97.030.000-7 BANCO ESTADO CHILE UF SIX MONTHLY 0.27% 168,168 - - - - 168,168









99.012.000-5 CNS VIDA CHILE 97.053.000-2 BANCO SECURITY CHILE US















99.012.000-5 CNS VIDA CHILE 97.030.000-7 BANCO ESTADO CHILE UF SIX MONTHLY 0.27% - - 95,250 - - 95,250











(Continued)

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Nominal raten

%DAYS

ThCh$

91 days

ThCh$YEARS ThCh$

YEARS ThCh$

Over 5 years

ThCh$Total

ThCh$





99.012.000-5 CNS VIDA CHILE 97.032.000-8 BANCO BBVA CHILE CHILE UF SIX MONTHLY 0.25% - - 65,723 - - 65,723










99.012.000-5 CNS VIDA CHILE 97.030.000-7 BANCO ESTADO CHILE UF SIX MONTHLY 0.27% - - 47,625 - - 47,625

99.012.000-5 CNS VIDA CHILE 97.036.000-K SCOTIABANK CHILE US DOLLARS SIX MONTHLY 0.27% - 32,959 - - - 32,959




374,739,259

** : Holders of bonds issued by Consorcio Financiero S.A.

Details Bank and subsidiaries:


ThCh$year

ThCh$1 to 3 years

ThCh$3 to 5 years

ThCh$Over 5 years

ThCh$Total

ThCh$

Bank obligations 105,406,029 30,238,222 - - 40,429,829 176,074,080 Current account 15,379,260 - - - - 15,379,260 Derivative obligations 10,067,137 141,845 - - - 10,208,982 Repurchase account statement and securities lending 323,802,928 - - - - 323,802,928

Savings accounts and time deposits 489,630,904 1,099,944,871 201,568,574 - - 1,791,144,349

Payables to credit card operators 2,953 - - - - 2,953

Other obligations 3,877,457 - - - - 3,877,457 2,320,490,009

(Continued)


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Detail of Bonds as of December 31, 2016:

Series CurrencyNominal

valueMaturity date

Interest payments

Principal payments

Placed in Chile/

rateNominal

rate


ThCh$

91 days – 1 year

ThCh$

Book value at

maturity 1 to 3 years

ThCh$ ThCh$

Over 5 years

ThCh$ Total

ThCh$

Subordinated Bonds BCNO-A UF 1,500,000 10/31/2031 Six

monthly At maturity Chile 4.40% 4.00% - - - - 38,088,033 38,088,033

Subordinated Bonds BCNO-G UF 1,000,000 4/1/2039 Six


Subordinated Bonds BCNO-K UF 1,500,000 11/1/2039 Six


Current bonds BCNO-C UF 1,500,000 7/5/2018 Six monthly At maturity Chile 3.70% 3.54% - - - 39,635,819 - 39,635,819

Current bonds BCNO-I Chilean pesos 35,250,000 4/1/2017 Six

monthly At maturity Chile 5.23% 5.80% - - 35,091,737 - - 35,091,737

Current bonds BCNO-O Chilean pesos 36,900,000 5/1/2020 Six


Current bonds BCNO-L UF 1,500,000 5/1/2018 Six monthly At maturity Chile 2.20% 2.20% - - - 39,667,620 - 39,667,620

Current bonds BCNO-H UF 1,500,000 4/1/2019 Six monthly At maturity Chile 2.70% 3.00% - - - 40,068,938 - 40,068,938

Current bonds BCNO-U UF 3,000,000 9/1/2020 Six monthly At maturity Chile 2.70% 3.00% - - - 78,355,324 - 78,355,324

Current bonds BCNO-W UF 1,500,000 9/1/2040 Six monthly At maturity Chile 3.54% 3.60% - - - - 40,347,627 40,347,627

Current bonds BCNO-S UF 1,500,000 9/1/2040 Six monthly At maturity Chile 2.35% 2.00% - - 39,690,414 - - 39,690,414

455,387,741 Total 3,150,617,009

NOTE 22 EMPLOYEE BENEFIT PROVISIONS

12/31/2017 ThCh$

12/31/2016 ThCh$

Vacation provision 3,823,734 3,323,683 Bonus provision 4,110,098 4,239,039

883,079 364,386 Employee termination provision 4,437,802 3,894,991

13,254,713 11,822,099

NOTE 23 OTHER PROVISIONS

Other provisions as of December 31, 2017 and 2016 were as follows:

PARENT COMPANY AND OTHERS12/31/2017

ThCh$12/31/2016

ThCh$

Minimum dividendsContingent credit risk provisions 62,559,634 41,324,110 TOTAL 1,461,420 1,626,630 Total 64,021,054 42,950,740

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NOTE 24 EQUITY

Capital subscribed and paid as of December 31, 2017 and 2016 is ThCh$ 288,141,592, represented by 136,952,063 shares without par value.

Series paid shares voting shares ThCh$

SINGLE 136,952,063 136,952,063 136,952,063 288,141,592

Other reserves

Other reserves were as follows:

2017 ThCh$

2016 ThCh$

Share valuation reserve for Almendral S.A. 8,682,529 7,587,874Matching reserve for CNS Vida (19,451,087) (7,444,009)Matching reserve for CN Life (13,558,374) (12,963,189)Instrument valuation reserve for the sale of Banco Consorcio 12,113,238 (2,628,602)Share valuation reserve for the stock exchange 1,627,022 1,627,022Reserve CF Inv. Peru S.A.C. (La Positiva) 7,642,219 4,345,627Others (2,624,012) (412,135)Total

The minimum legal dividend payable as of December 31, 2017 and 2016 is ThCh$ 62,559,634 and ThCh$ 41,324,110, respectively, and equals 30% of net income.

The corporate mission at Consorcio Financiero S.A. includes maintaining a strong equity position in each of its subsidiaries, to create

business plans, which are consistent with the size, nature and complexity of the entities’ activities.

The Board of Directors of each subsidiary is responsible for the overall approach to capital and risk management. It periodically

relation to Consorcio objectives.

The following regulated subsidiaries have a minimum capital requirement.

UF

Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A. 90,000CN Life Compañía de Seguros S.A. 90,000Compañía de Seguros Generales Consorcio Nacional de Seguros S.A. 90,000Banco Consorcio and Subsidiaries 800,000Consorcio Corredores de Bolsa S.A. 14,000


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NOTE 25 INCOME AND EXPENSES

Ordinary revenue was as follows:

2017 ThCh$ 2016 ThCh$

Parent company and othersRevenueRevenue 706,516 -

42,046 -Income earned from investments 1,361,058 1,743,409 Investment income 673,496 346,362 Total parent company and others 2,783,116 2,089,771 InsuranceRevenuePremium income 728,542,460 871,557,786

12,519,879 31,994,414 Property investment income 54,308,354 56,283,863 Income earned from investments 366,225,469 264,102,316 Investment income 11,801,001 4,142,246 Total insurance 1,173,397,163 1,228,080,625

InterestRepurchase agreements 144,276 80,875 Bank loans 150,066 307,899 Commercial loans 79,483,628 72,001,980 Housing loans 3,414,237 2,808,861 Consumer loans 13,975,751 14,903,109 Investment instruments 38,224,241 30,485,805 Financial instrument trading 21,390,597 23,488,099 Income from hedge accounting 400,207 92,521 Other interest income - 519,578 IndexationCommercial loans 10,397,505 14,822,635 Housing loans 1,464,673 2,095,136 Investment instruments 3,778,883 6,695,314 Financial instrument trading 1,748,123 5,854,190 CommissionsGuarantees and letters of credit 6,811 78,583 Card services 264,102 237,003 Account administration 263,664 215,309 Collections and payments 120,359 106,394 Securities brokerage and management 3,518,050 1,982,907 Other commissions 5,133,692 5,414,704 Financial transactions

35,998,029 25,406,028 Other income 1,307 5,563 Other operating incomeLeasing income 2,773,572 -

222,651,773 207,602,493 Total income from ordinary activities 1,398,832,052 1,437,772,889

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Cost of sales was as follows:

2017 ThCh$

2016 ThCh$

Parent company and othersInterestOther interest or indexation expenses 164,982 70,002 Total parent company and others 164,982 70,002 InsuranceInsuranceAdjustment for technical reserves 90,639,071 61,015,852 Claims costs 759,833,171 904,819,474 Brokerage costs 44,173,470 41,841,652 Other costs 1,502,119 1,294,049 Total insurance 896,147,831 1,008,971,027

InterestDemand deposits 609,846 260,638 Repurchase agreements 16,537,758 7,337,622 Savings accounts and time deposits 52,079,302 48,589,941 Bank borrowings 4,812,520 3,472,408 Debt instruments issued 16,958,312 15,111,061 Other interest expenses 2,155,004 2,871,303 IndexationSavings accounts and time deposits 4,538,052 5,629,783 Debt instruments issued 6,304,357 6,469,250

306,966 457,242 Other interest expenses 167,242 244,953 CommissionsSecurities transaction fee 255,800 364,782 Other commissions 1,528,944 1,233,109

106,254,103 92,042,092 Total cost of sales 1,002,566,916 1,101,083,121


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Other expenses, by function were as follows:

2017 ThCh$

2016 ThCh$

Parent company and othersSundry expenses 2,116 12,713 Financial expenses 8,042,235 7,594,709 Investment loss 272,651 600,107 Total parent company and others 8,317,002 8,207,529 InsuranceDepreciation 4,010,393 3,539,170 Sundry expenses 248,842 334,450 Financial expenses 671,607 4,038,882 Real estate management expenses 3,133,198 3,836,353 Total insurance 8,064,040 11,748,855

Sundry expenses 148,795 1,218,342 Financial expenses 19,071 7,869

167,866 1,226,211 16,548,908 21,182,595

Other income was as follows:

2017 ThCh$

2016 ThCh$

Parent company and othersInterest earned 58,679 49,730 Services provided 92,899 50,267 Other income - -Total parent company and others 151,578 99,997 InsuranceInterest earned 4,547,703 5,082,260 Services provided 3,699,479 1,794,454 Other income 68,312 -Total insurance 8,315,494 6,876,714

Interest earned 102,445 433,269 Other income 1,425,526 698,110

1,527,971 1,131,379 Total other income 9,995,043 8,108,090

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NOTE 26 ADMINISTRATIVE EXPENSES

Administrative expenses were as follows:

2017ThCh$

2016 ThCh$

Remuneration 48,928,102 47,980,169 Consultancies 6,814,678 5,857,661 Maintenance expenses 5,432,003 2,956,407

651,135 594,315 Depreciation and amortization 3,054,261 2,752,648 Leases 1,625,757 1,763,731 Insurance 546,732 549,660 IT and communications expenses 3,574,263 3,279,604 Subcontracted services 2,159,914 2,181,116 Board expenses 472,775 532,580 Advertising 5,827,622 3,805,259 Taxes, property taxes and contributions to SBIF 6,993,523 6,206,111 Provisions for loan losses 9,354,829 10,216,157 Inspection expenses 387,809 433,004 Distribution channel expenses 12,018,761 13,698,818 Commission and custody expenses 4,231,582 3,994,207 General expenses (*) 5,812,841 2,915,802

117,886,587 109,717,249

(*) These include communications services, mail, shared building expenses, etc.

NOTE 27 REMUNERATIONS AND PERSONNEL EXPENSES

Remuneration and personnel expenses were as follows:

2017 ThCh$

2016 ThCh$

Wages and salaries 38,540,647 37,078,351 10,387,455 10,901,818 48,928,102 47,980,169

ThCh$ ThCh$

Senior management remuneration 7,057,811 3,308,754


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NOTE 28 CURRENCY

Assets and liabilities by currency as of December 31, 2017 and December 31, 2016 are as follows:

Current assets2017

ThCh$2016

ThCh$Cash and cash equivalent 110,527,234 33,324,241

US$ 30,874,459 4,493,383 EURO 1,109,250 3,096,544 UF - -Chilean peso 78,540,937 25,731,625 Other 2,588 2,689

Current tax accounts receivable 17,534,110 8,781,776 US$ - -EURO - -UF - -Chilean peso 17,494,696 8,777,942 Other 39,414 3,834

Related party receivables 21,075,174 23,469,278 US$ - -EURO - -UF 21,075,174 23,469,278 Chilean peso - -Other - -

67,316,115 78,517,039 US$ 54,351 5,381,202 EURO 9,432 30,517 UF 2,271,528 4,685,251 Chilean peso 64,863,371 68,374,662 Other 117,433 45,407

Trade and other receivables 2,663,367,479 2,380,446,629 US$ 363,209,050 356,251,160 EURO - -UF 1,298,009,995 1,069,228,596 Chilean peso 1,002,148,434 954,966,873 Other - -

7,003,587,839 6,374,052,859 US$ 2,373,873,018 2,420,871,387 EURO 205,264,347 81,652,765 UF 2,871,830,271 1,990,864,206 Chilean peso 1,490,666,034 1,222,860,877 Other 61,954,169 657,803,624

Deferred taxes receivable 54,022,068 67,215,755 US$ - -EURO - -UF - -Chilean peso 54,022,068 67,215,755 Other - -

Equity-accounted investees 118,801,098 92,817,012 US$ - -EURO - -UF - -Chilean peso 67,816,208 51,574,928 Other 50,984,890 41,242,084

Intangible assets other than goodwill 3,625,260 4,130,044 US$ - -EURO 327,990 -UF - -Chilean peso 3,297,270 4,130,044 Other - -

Goodwill 8,212,848 7,922,880 US$ - -EURO - -UF - -Chilean peso 8,212,848 7,922,880 Other - -

Property investment 454,966,383 422,189,570 US$ - -EURO - -UF 41,770,283 -Chilean peso 413,196,100 422,189,570 Other - -

Property, plant and equipment 28,844,414 27,575,270 US$ - -EURO - -UF - -Chilean peso 28,844,414 27,575,270 Other - -

Total assets 10,551,880,022 9,520,442,353 US$ 2,768,010,878 2,786,997,132 EURO 206,711,019 84,779,826 UF 4,234,957,251 3,088,247,331 Chilean peso 3,229,102,380 2,861,320,426 Other 113,098,494 699,097,638

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Up to 90

ThCh$

91 days to 1

ThCh$ ThCh$

From 3 years to 5 years

ThCh$

Over 5 years

ThCh$

Total

ThCh$

Related Party Payables 1,028,182 - - - - 1,028,182 US$ - - - - - -EURO - - - - - -UF 1,028,182 - - - - 1,028,182 Chilean peso - - - - - -Other - - - - - -

Current Tax Liabilities 986,615 1,821,702 - - - 2,808,317 US$ - - - - - -EURO - - - - - -UF - - - - - -Chilean peso 986,615 1,821,702 - - - 2,808,317 Other - - - - - -

65,899,603 38,178,150 1,556,617 - - 105,634,370 US$ - 791,085 - - - 791,085 EURO - - - - - -UF 43,284,588 - 1,556,617 - - 44,841,205 Chilean peso 22,606,057 37,387,065 - - - 59,993,122 Other 8,958 - - - - 8,958

Trade and other payables 881,966,890 281,737,278 686,465,200 603,955,877 3,236,272,929 5,690,398,174 US$ - - - - - -EURO - - - - - -UF 829,789,376 281,737,278 686,465,200 603,955,877 3,236,272,929 5,638,220,660 Chilean peso 52,177,514 - - - - 52,177,514 Other - - - - - -

Deferred tax liabilities 2,598,706 63,371,516 - - - 65,970,222 US$ - - - - - -EURO - - - - - -UF - - - - - -Chilean peso 2,598,706 63,371,516 - - - 65,970,222 Other - - - - - -

1,125,051,694 1,177,969,976 813,201,596 59,939,606 400,260,169 3,576,423,041 US$ 325,376,151 194,050,570 3,481,084 2,623,730 3,873,227 529,404,762 EURO 156,777,347 (37,279) 78,349 (146,789) 4,681,202 161,352,830 UF 18,842,819 163,349,856 220,317,852 - 291,932,979 694,443,506 Chilean peso 624,055,377 820,606,829 589,324,311 57,462,665 99,772,761 2,191,221,943 Other - - - - - -

946,942 12,307,771 - - - 13,254,713 US$ - - - - - -EURO - - - - - -UF - - - - - -Chilean peso 946,942 12,307,771 - - - 13,254,713 Other - - - - - -

Other provisions 62,559,634 1,461,420 - - - 64,021,054 US$ - - - - - -EURO - - - - - -UF - - - - - -Chilean peso 62,559,634 1,461,420 - - - 64,021,054 Other - - - - - -

2,141,038,266 1,576,847,813 1,501,223,413 663,895,483 3,636,533,098 9,519,538,073 US$ 325,376,151 194,841,655 3,481,084 2,623,730 3,873,227 530,195,847 EURO 156,777,347 78,349 4,681,202 161,352,830 UF 892,944,965 445,087,134 908,339,669 603,955,877 3,528,205,908 6,378,533,553 Chilean peso 765,930,845 936,956,303 589,324,311 57,462,665 99,772,761 2,449,446,885 Other 8,958 8,958


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91 days to 1

ThCh$ ThCh$

From 3 years to

ThCh$

Over 5 years

ThCh$

Total

ThCh$

RELATED PARTY PAYABLES - - 411,786 - - 411,786 US$ - - - - - -EURO - - - - - -UF - - - - - -Chilean pesos - - 411,786 - - 411,786 Other - - - - - -

CURRENT TAX LIABILITIES 1,262,672 7,159,802 - - - 8,422,474 US$ - - - - - -EURO - - - - - -UF - - - - - -Chilean pesos 1,262,672 7,159,802 - - - 8,422,474 Other - - - - - -

44,862,157 34,768,574 - - - 79,630,731 US$ - 2,100,601 - - - 2,100,601 EURO - - - - - -UF 38,210,014 - - - - 38,210,014 Chilean pesos 6,652,143 32,667,973 - - - 39,320,116 Other - - - - - -

Trade and other payables 752,650,963 264,276,723 646,791,898 566,133,429 3,028,017,076 5,257,870,089 US$ - - - - - -EURO - - - - - -UF 62,968,153 51,641,968 108,716,737 77,370,977 357,660,267 658,358,102 Chilean pesos 689,682,810 212,634,755 538,075,161 488,762,452 2,670,356,809 4,599,511,987 Other - - - - - -

Deferred tax liabilities 44,801,294 13,251,837 - - - 58,053,131 US$ - - - - - -EURO - - - - - -UF - - - - - -Chilean pesos 44,801,294 13,251,837 - - - 58,053,131 Other - - - - - -

1,080,734,914 1,216,451,177 373,844,584 202,074,371 277,511,963 3,150,617,009 US$ 297,835,147 194,619,313 9,939,102 - - 502,393,562 EURO 120,058,009 - - - - 120,058,009 UF 26,741,681 238,159,281 173,289,394 197,688,538 224,115,559 859,994,453 Chilean pesos 636,100,077 783,672,583 190,616,088 4,385,833 53,396,404 1,668,170,985 Other - - - - - -

708,011 11,114,088 - - - 11,822,099 US$ - - - - - -EURO - - - - - -UF - - - - - -Chilean pesos 708,011 11,114,088 - - - 11,822,099 Other - - - - - -

Other provisions - 42,950,740 - - - 42,950,740 US$ - - - - - -EURO - - - - - -UF - - - - - -Chilean pesos - 42,950,740 - - - 42,950,740 Other - - - - - -

1,925,020,011 1,589,972,941 1,021,048,268 768,207,800 3,305,529,039 8,609,778,059 US$ 297,835,147 196,719,914 9,939,102 504,494,163 EURO 120,058,009 120,058,009 UF 127,919,848 289,801,249 282,006,131 275,059,515 581,775,826 1,556,562,569 Chilean pesos 1,379,207,007 1,103,451,778 729,103,035 493,148,285 2,723,753,213 6,428,663,318 Other

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NOTE 29 EARNINGS PER SHARE

Earnings per share for the period were as follows:

Earnings per share2017

ThCh$2016

ThCh$

Basic earnings per shareBasic earnings per share on continued operations 1,522,67 1,001,40Basic earnings per share on discontinued operations - -Basic earnings per share 1,522,67 1,001,40

NOTE 30 ENVIRONMENT

The Company and its subsidiaries within the Parent Company and Others, Insurance and Banking segments do not do anything that

NOTE 31 RISK MANAGEMENT POLICIES

The Board of Consorcio Financiero S.A. (hereinafter the “Parent company”) aims to strategically develop “Appropriate risk management and control” using an Integrated Risk Management System. This system would contribute to the creation of value for shareholders, customers, employees and other stakeholders, within the framework of its mission, vision and corporate values.

Management System. It is also aligned with best international practice and with the approach to risk-based regulation, adopted by the former SVS, replaced by the Chilean Financial Market Commission (CMF) and the Chilean Banks and Financial Institutions Supervisor (SBIF).

insurance companies in Chile, a bank and a stock broker. Since December 2015, it has had a stake in a life insurance company in Peru.

assessment, mitigation, control and reporting according to the nature, size and complexity of each business.

and their many committees.

Corporate Governance Consorcio Financiero S.A. is constantly seeking to generate mechanisms that facilitate relationships among the its business units

Consorcio.

The CEO of the Parent company is responsible for the general direction taken by the Parent company and closely supports the subsidiaries in the achievement of their strategic goals and objectives, to create further corporate value.

The major risks to which Banco Consorcio and its subsidiaries are exposed through their business strategies are described in this note. Similarly, a brief review of the tools, models and procedures used by the company to measure, monitor and control such risks is included.

The major risks faced by Banco Consorcio and its subsidiaries are essentially credit risk, liquidity risk, market risk and operational risk. Given the importance of risk management for the business success of the company, Banco Consorcio and its subsidiaries have developed an infrastructure to adequately manage risks using an organizational structure, into which policies, procedures, models, limits and controls have been embedded.

Policy Banco Consorcio and its subsidiaries have implemented best practice to manage the risks faced while performing their business activities. In view of the foregoing, they have developed policies and models to quantify and monitor credit risk, liquidity risk, market risk and operational risk. These are the central components of overall risk and capital management.

Risk management is the responsibility of the Board and Management at Banco Consorcio and the corporate government of


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each of its subsidiaries and is a key element of their daily operations. Risk Management enables Banco Consorcio to identify

capital structure.

:

• Credit risk. The risk of loss resulting from loan counterparties being unable to meet their loan commitments.

• Market risk.rates).

• Liquidity risk.

• Operational risk.

Organizational Structure The Board is the highest authority in Banco Consorcio. The Board delegates responsibility to management of the Bank and its subsidiaries and various special committees with regard to risk management, limits and monitoring. The Board is

approach to risk and capital management, in addition to being familiar with regulatory capital requirements and internal models. Risk activities and exposures need to be reported to the Board on a regular basis. Most of these responsibilities have been delegated to specialist committees, where Directors participate, nevertheless, the Board should be familiar with these matters.

The Board delegates daily responsibility to the bank’s management, which executes general instructions. Responsibility for risk monitoring and management is assigned to various committees, each one chaired by a member of the Board.

The main committees of Banco Consorcio and its subsidiaries are described below:

• and liquidity, and evaluates the main market risks, capital needs and the implementation of capital policy. Furthermore, CAPA approves models for measuring liquidity and market risk, and the associated limits.

• The Portfolio, Collection and Credit Risk Committee and the Operational Risk Committee are responsible for controlling and monitoring the management of these risks. Both committees approve risk exposure within the limits established by the Board.

• The Operational Risk Committee and Technology, Information Security and Continuity Committee regularly review losses

management department regularly reports to each of the committees described above and to the Board.

Credit RiskThe risk of loss resulting from the breach of an obligation to the Bank and its subsidiaries by a debtor, primarily originating in

The Bank and its subsidiaries have a structure of credit risk levels, and have set limits to the concentration of that risk by individual debtors, groups of debtors and industry segments. Such risks are constantly monitored by management. The limits by debtor, groups of debtors, products and industries are reviewed at least once a year and approved by the Board.

Exposure to credit risks is managed through regular analysis of debtors and potential debtors’ ability to meet payment commitments in accordance with the contractual terms of their loans.

Financial derivatives contracts The Bank and its subsidiaries maintain strict controls over positions in derivative contracts negotiated directly with their counterparties. Credit risk is limited to the fair value of those contracts favorable for the bank and its subsidiaries (asset position), in addition to the potential risk estimated as a percentage of the contract notional amount and which depends on its remaining term. This exposure to credit risk is managed through limits on loans to

.

Financial instruments issuers using internal assessments and external ratings, such as independent credit rating agencies. The company has approved credit facilities to issuers or groups of issuers depending on an assessment of their credit risk.

Guarantees. Guarantees are maintained in favor of the bank to mitigate credit risk. The main customer guarantees follow:

• (foreign trade).

•

Liquidity risk

The ability of the Bank and its subsidiaries to honor each one of their current and future commitments depends on appropriate

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monitoring are fundamental pillars.

This is the reason why Banco Consorcio has approved, established and implemented a liquidity management policy, for local and

with current legal and regulatory requirements.

This liquidity management policy covers normal scenarios and contingency scenarios.

Daily liquidity risk. This risk arises from the inability to meet short-term cash requirements necessary for the bank’s operations. To

.

Financing or structural liquidity risk. This risk arises from the inability of the bank and its subsidiaries to meet its payment commitments as they fall due, although they can be met at a future date, or that to meet them would require calling on funds through solutions that would result in lost equity. This risk arises from undetected mismatches between the maturities of assets and liabilities. The risk of structural liquidity is the most important risk faced by Banco Consorcio and its subsidiaries due to the need to

Trading Liquidity Risk This risk arises from concentration within the non-liquid asset portfolio, which may impede rapid sales when

such as those issued by the Central Bank of Chile, the State, and established banks in Chile, where a broad secondary market exists or which can be sold with repurchase agreements.

.

Market liquidity risk. This risk arises from the inability to liquidate a position without causing a downward correction in the price or the inability to sell due to scarce demand in the market.

The major sources of these risks are regional or global crises, or internal crises within Chile due to political or economic events, natural disasters, etc.

Strategies for managing liquidity risk a) Financing policies

loans, whilst investing in debt instruments.

:

• Constant measurement of liquidity positions using liquidity indicators and monitoring liquidity zones.

• Diversifying funding sources through concentration limits for maturity on liabilities by counterparty and concentration limits for remaining terms.

• Establishing minimum levels of liquid and semi-liquid assets.

conditions.

To manage this policy the bank undertakes the following tasks:

• Monitoring and control of concentration indicators for liquid assets and volatile liabilities.

• Monitoring and concentration limits for deposits by counterparty and maturity.

• Controlling maximum concentration limits for liabilities.

c) Investment policies


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recover loans.

established banks in Chile, all of which have a broad secondary market. Lending policy also addresses the breakdown of the portfolio, .

Measurement of Liquidity risk Banco Banco Consorcio uses various tools to measure and monitor liquidity risk, distinguishing between normal market situations and stress scenarios.

counterparty. Also identifying the reasons for liquidity, mainly to indicate the relative position of the bank with respect to liquid assets and volatile liabilities.

Stress scenarios are monitored by stress testing liquidity on a monthly basis, where the ability of the bank to withstand extremely

indicators, which are decisive variables to trigger contingency plans to meet liquidity risks.

Market risk

prices.

necessary that those who manage and control the risks involved study the market, learn how to read market expectations, and

models that involve trend analysis of variables and market prices, which are especially useful for those who are responsible for managing positions.

However, risk management not only requires the analysis of technical and fundamental variables within markets, but also a proper

The second step within the control process is to establish the models and mechanisms for measuring risks, which must have a solid foundation based on theoretical and practical aspects.

established by senior management.

to approved limits.

A. Trading risks

either to exploit arbitrage opportunities due to the misalignment of prices when the market is taking positions, or to accrue income

Interest rate risk The interest rate risk for trading activities is essentially reduced to the potential negative impact of interest rate variations on the value

Currency risk The currency risk for trading activities is the possibility of equity loss resulting from an adverse change in the price of one or more

denominated in foreign currencies which are traded through foreign exchange operations. This risk also impacts currency derivatives, such as forwards, futures, cross-currency swaps, options, etc.

Indexation risk

of the Bank on indexation adjustments. This risk arises on trading activities when unexpected adverse movements in

.

B. Traditional banking risks Traditional banking activities include those where assets and liabilities are not valued according to market value but according to

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amortized cost, such as commercial loans and deposits. Here the market risks are primarily due to mismatches between assets and liabilities both in amount and in maturity.

Interest Rate Risk The interest rate risk arises due to a mismatch in maturities between assets and liabilities, namely when liabilities must be renewed

margin.

Currency Risk Similarly, the currency risk for traditional banking activities arises from the mismatch between assets and liabilities denominated

statement.

Indexation Risk The indexation risk has similar features to currency risk. Nevertheless, there is a direct impact on net income as a result of indexation adjustments arising either on assets or liabilities denominated in any indexed unit.

C. Measurement of market risk The bank applies Value at Risk (VaR) methodologies and other complementary measures (mismatch of assets and liabilities by currency and by maturity, interest rate sensitivities, etc.) to measure the market risk on its positions. The bank also applies stress tests to estimate losses when facing extreme changes in the structure of interest rates and currency exchange rates. In addition, the bank applies retrospective

The Value at Risk calculation predicts the maximum loss that could occur based on assumptions or hypotheses regarding the evolution

historical simulation method. The model provides measurements of the overall currency and interest rate risks, in addition to individual measurements by position. The result is monitored regularly to test the validity of the assumptions, hypotheses and the adequacy of the parameters and risk factors that are used in the VaR calculation.

The Bank has established limits and monitoring mechanisms of market risks measured using the VaR model, separating those potential

former case, and investments available for sale in the latter.

Internal Audit The processes of the bank and its subsidiaries are regularly audited by the control department at Banco Consorcio, which examines

bank and its subsidiaries and reported to the Board and the Audit Committee (COAU). This Committee is composed of two Directors and the Comptroller, while the General Manager and the Corporate Attorney are always invited.

Operational Risk

system failures, human error, fraud or external events.

The Bank and its subsidiaries recognize that the elimination of all operational risks is impossible, but it has implemented a supervision

procedures, reconciliations, training, personnel evaluation, and internal audit, whilst adopting best practices and involving all units within the bank.

committees regularly review losses incurred, together with plans to remedy their causes, and the entire management of risks

and management of critical suppliers. They evaluate the evidence supporting continuity plans prepared for critical processes, and ensure compliance with current policies on information security.

Prepayment risk

At Banco Consorcio this risk has been reduced as its mortgage lending comprises mutual endorsable mortgages, which are endorsed over an average term of less than 6 months.

Capital Requirements

weighted assets net of required allowances, and base capital does not fall below 3% of total consolidated assets net of required

I. Subordinated bonds are included up to a maximum of 50% of base capital, and

II. Goodwill and investments in unconsolidated companies are deducted.

Assets are weighted according to risk categories, where a percentage risk factor is assigned that determines the capital needed to


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support each of these assets. There are 5 risk categories (0%, 10%, 20%, 60% and 100%).

All derivative instruments not traded on the stock exchange are included within risk assets with a conversion factor on their notional

statement are also weighted by their “credit equivalent”.

II. Insurance CompaniesThe three Chilean group insurance companies are Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A., CN Life Compañía de Seguros de Vida S.A., Compañía de Seguros Generales Consorcio Nacional de Seguros S.A. and in this section they are referred to as the “Companies”.

EIn accordance with their corporate governance code, there is direct involvement in risk management by various bodies and at various levels in the companies.

The Board has charged the Risk Management Committee, which is composed of directors, a consultant and senior executives of the companies, with setting up an Integrated Risk Management System and regularly monitoring its correct application.

by the Board and ensures compliance.

Senior management at each of the companies, led by the CEO, make up the Executive Committee, which is responsible for proposing business policies and strategies to the Board and subsequently for their implementation and control. In addition, it is responsible for correct management, protecting the interests of shareholders and other stakeholders.

In particular, it also proposes risk management policies for Board approval, and is responsible for their implementation and follow

of the executive committee, and those responsible for the relevant areas.

The investment risk department manages and controls the credit and counterparty risks, primarily assessing bond issuers and

reviews compliance with safeguards and restrictions regarding portfolio securities.

The internal audit department is an independent unit that reports functionally to the corporate audit committee and is responsible

conclude by suggesting improvements to internal control processes. Also, it is also responsible for providing the board with a professional opinion that the risk management system is appropriate for the organization, considering the risks to which the business and operations of the companies are exposed.

The risk control department is responsible for proposing and updating policies and procedures relating to the risk management system. It participates in formulating risk management strategy for the companies, initially making proposals to the risk management

the risk management system, which is common to the entire organization, in order to identify, evaluate, manage and monitor risks in accordance with corporate policies and procedures. It produces a risk matrix for the companies. It develops continuity plans and functionally tests them. It is also responsible for implementing the information security policy. It analyzes, evaluates and monitors

of current regulations and the policies of the companies. It prepares reports for submission to the Risk Management Committee.

Each year the Management Planning and Control Department coordinates the preparation of the three year business plan with all the areas, and is responsible for identifying and explaining monthly variations in actual results with respect to this plan, which are

The Investment Management Control area is responsible for measuring, controlling and reporting on the Companies’ investment management, undertaking a monthly analysis of variations in investment products with respect to budget. It also periodically monitors compliance with investment policies informed to the Financial Market Commission, formerly SVS.

The Technical Department is responsible for pricing and underwriting risks insured, and controls and monitors the technical risks associated with insurance, including analysis of scenarios of variation from technical parameters. It follows up pricing parameters

portfolios. It also proposes and controls implementation of pricing and underwriting policies for risks and reinsurance policy.

the companies, focusing on the deployment and management of controls, to ensure compliance with standards in all areas and levels of the organization.

The Operations Department is responsible for the daily management of operations and is actively involved in the management of operational risk. It ensures that the policies, procedures and internal control systems are properly applied, according to the

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diversity of risks, in terms of their origin, as their impact on time horizons and characteristics.

- Market risk This is the risk of a downturn in the net value of assets and liabilities from movements in market factors, such as equity investment prices, interest rates, property assets and exchange rates. It includes price, mismatch and reinvestment risks, if applicable.

- Credit risk This is the risk arising from a breach in commitments made by a securities issuer or a counterparty, or a deterioration in their credit rating.

- Liquidity risk

payment commitments.

- Technical risk This is the risk inherent to the insurance business and may arise on underwriting and pricing policies that result in losses due to

- Operational and technological risk This is the risk associated with losses arising from inadequate or failed internal processes, human error, systems failures, or external

earthquake, etc.

- Legal and regulatory risk This is the risk arising from a breach in laws or regulations that govern this business. It also includes the risk of adverse regulatory changes.

- Strategic and group risk This is the risk arising from an inadequate strategy, from faults in the design or implementation of business plans, or from being unable to adjust to new environmental conditions, or from deterioration in market conditions. This category also includes group risk, which is associated with losses on transactions with related companies, similarly contagion and reputational risks.

c) Risk assessment The companies perform regular assessments of their main risks, which are embodied in risk matrices. Various tools are used,

instrument, risk rating, maturity, and exposure assessment in foreign currency. Additionally, the life insurance companies monitor

of the Chilean Financial Market Commission, formerly SVS.


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NOTE 32 CONTINGENCIES AND COMMITMENTS

Contingencies and commitments as of December 31, 2017 were as follows:

Type of contingency or commitment

Related individual or legal entity

Assets committed

Amount

ThCh$Commitment release date

Commitment release

amountThCh$Type

Book value

ThCh$

Legal action Not applicable Court cases Not applicableCollateral assets Not applicableIndirect liabilitiesNot applicableOthersCommitment to a property sale

Rentas y Desarrollo Aconcagua S.A. Property 2,347,254 1,874,241 4/30/2025 2,652,518

Commitment to a property sale Cumbres del Peñón SpA. Property 416,764 444,865 4/30/2025 444,865

Commitment to a property sale

Inmobiliaria Socovesa Santiago S.A. Property 712,501 707,258 10/3/2021 707,258


Inmobiliaria Socovesa Santiago S.A. Property 4,540,081 1,407,514 10/3/2021 4,195,109

Commitment to a property sale Inmobiliaria FCG S.A. Property 712,501 - 10/3/2021 707,258

Commitment to a property sale Inmobiliaria FCG S.A. Property 4,540,081 - 10/3/2021 4,546,988


Inmobiliaria Socovesa Santiago S.A. Property 20,357,766 11,889,361 10/5/2021 17,504,958


Inmobiliaria Altas Cumbres S.A. Property 2,147,085 1,493,527 4/30/2019 2,133,609


Inmobiliaria Estrella del Sur Ltda Property 8,751,503 - 12/30/2023 8,731,236


Inmobiliaria Nuevo Puente Alto S.A. Property 1,004,007 810,039 1/31/2018 997,002

Commitment to a property sale Rentas RA 4 Ltda. Property 1,505,443 1,499,284 5/31/2021 1,499,284


Inmobiliaria Laguna del Sol SpA Property 19,780,651 22,623,045 4/30/2024 22,948,074

Commitment to a property sale Graneles de Chile S.A. Property 10,722,835 10,307,292 10/5/2023 10,662,716


Inmobiliaria Altos de Lo Campino SpA. Property 1,764,896 1,122,201 2/2/2024 1,759,791


Inmobiliaria Tecnoindustrial SpA. Property 1,941,619 1,747,814 10/31/2022 1,942,015

Contractual commitment Inmobiliaria Conde del Maule S.A.

Not Applicable - 1,683,354 6/30/2018 - Future

Disbursements

Contractual commitment Inmobiliaria Los Leones S.A.

Not Applicable - 1,130,240 5/2/2018 - Future

Disbursements Guarantee policy for urbanization works

Ilustre Municipalidad de Valparaiso

Not Applicable 925,286 35,960 9/1/2018 35,960 Guarantee

Guarantee policy for urbanization works

Ilustre Municipalidad de Valparaiso

Not Applicable 1,935,615 2,666 1/5/2018 2,666 Guarantee

Sale option Geosal S.A. Property 5,488,527 5,452,493 12/31/2018 5,452,493 Sale option Geosal S.A. Property 550,575 410,761 4/30/2020 547,681

Sale option Rentas y Desarrollo Aconcagua S.A. Property 12,992,949 13,071,710 8/30/2022 13,071,710

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Assets committed

Amount


Commitment release

amountThCh$Type

Book value

ThCh$

Sale option Desarrollos Inmobiliarios y Constructora Valle Grande S.A.

Property 4,173,056 4,173,056 12/31/2030 4,173,056

Sale option Desarrollos Inmobiliarios y Constructora Santo Tomás S.A.

Property 13,490,237 12,454,222 12/31/2030 12,454,222

Sale option Master SpA. Units - 2,265,827 6/23/2018 2,265,827 Future Disbursements

Lease with purchase option Inmobiliaria Puente Ltda. Not Applicable - 2,000,677 3/31/2039 48,130,514 Future

Disbursements

Lease with purchase option Inmobiliaria Puente Ltda. Not Applicable - 4,954,378 2/28/2039 18,199,398 Future

Disbursements

Lease with purchase option MBI SpA. Not Applicable - 22,859,453 11/30/2036 82,593,398 Future

Disbursements

Lease with purchase option Inmobiliaria Boulevard Nueva Costanera S.A.

Not Applicable - 105,849 7/31/2037 56,083,091 Future

Disbursements

Lease with purchase option Inversiones Padre Hurtado S.A.

Not Applicable - 199,268 3/31/2041 610,574 Future

Disbursements Commitment to a property sale

Inmobiliaria Laguna del Sol SpA

Not Applicable - 1,150,105 4/30/2024 2,396,046 Future

Disbursements Guarantee policy in advance of contract commitment

Inmobiliaria Los Leones S.A.

Not Applicable - 1,130,248 1/6/2018 1,130,248 Guarantee

Guarantee policy in advance of contract commitment

Inmobiliaria Conde del Maule S.A.

Not Applicable - 1,683,350 8/30/2018 1,683,350 Guarantee

Type of contingency or commitment: Name or description of the contingency or commitment, which can arise from legal actions,

Creditor name: The name of the individual or legal entity who has a committed asset.

Assets committed: The generic name of the asset committed and its book value.

Commitment release date: The potential release date of commitments.

Commitment release amount:

Observations: Any other background information which in management’s opinion should be reported.

The Company is processing the registration of plot no. 24 of the Vilana Estate, also known as ML B24, in the Santiago Real Estate Registry, which Inmobiliaria Valle Grande Ltda. sold to the Company, due to the existence of a precautionary measure over the

investment provisions for ThCh$ 302,977.-

The Company is processing the registration of plot no. 24 of the Vilana Estate, also known as ML B24, in the Santiago Real Estate Registry, which Inmobiliaria Valle Grande Ltda. sold to the Company, due to the existence of a precautionary measure over the

investment provisions for ThCh$ 302,977.-

(Continued)


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Assets committed

Amount


Commitment release

amountThCh$Type

Book value

ThCh$

Legal action Not applicable Court cases Not applicableCollateral assets Not applicableIndirect liabilitiesNot applicableOthersCommitment to a property sale

Inmobiliaria Los Cipreses S.A. Property 6,402,517 4,334,067 12/31/2025 6,356,294

Commitment to a property sale Inmobiliaria AIVSE S.A. Property 6,814,784 2,165,864 2/28/2023 6,770,825


Inmobiliaria 3L DS Diecinueve SpA Property 2,835,719 3,332,099 4/30/2018 3,332,099

Sale option Geosal S.A. Property 1,089,790 795,087 4/27/2020 1,080,849 Sale option Geosal S.A. Property 838,936 832,862 4/30/2025 832,862 Sale option El Peñón SpA. Property 14,354,744 11,397,542 4/30/2025 14,284,092

Sale option Cumbres del Peñón SpA. Property 3,003,371 2,951,973 4/30/2025 2,981,625

Lease with purchase option Concreces Leasing Habitacional S.A.

Not applicable - 1,605,650 10/31/2018 14,661,235

Lease with purchase option Unidad Leasing Habitacional S.A.

Not applicable - 345,172 12/31/2018 4,019,721

Lease with purchase option Unidad Leasing Habitacional S.A.

Not applicable - 3,998,519 12/31/2018 3,998,519

Type of contingency or commitment: Name or description of the contingency or commitment, which can arise from legal actions,

Creditor name: The name of the individual or legal entity who has a committed asset.

Assets committed: The generic name of the asset committed and its book value.

Commitment release date: The potential release date of commitments.

Commitment release amount:

Observations: Any other background information which in management’s opinion should be reported.

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commitments and responsibilities:

2017 Ch$ million

2016 Ch$ million

Custody of securities:Securities in the bank’s custody 5,557,972 2,597,092Securities in CCB custody 676,909 592,166CommitmentsLoans approved but not released 11,542 13,297Other loan commitments - -Total 6,246,423 3,202,555

The bank acquired several irrevocable commitments and contingent liabilities to meet the needs of customers, and although these

risk of the bank.

The following table shows the contractual amounts of operations that require the bank to provide loans, and the allowances established by the credit risk thereon:

2017 Ch$ million

2016 Ch$ million

Performance and bid bonds 51,204 50,933Corresponding provisions (1,123) (1,324)Total 50,081 49,609

Guarantees received

2017 Ch$ million

2016 Ch$ million

Guarantees received 3,487,434 1,436,923Total 3,487,434 1,436,923

Banco Consorcio maintains a loan agreement with the International Finance Corporation, which establishes a series of covenants that the Bank must meet. As of December 31, 2017 and 2016, these covenants had been fully met by Banco Consorcio.


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(a) Direct commitments: As of December 31, 2017 and 2016 there were no direct commitments or guarantees.

(b) Guarantees: As of December 31, 2017 and 2016 there were no guarantees over assets creating third party obligations.

(c) Legal actions: As of December 31, 2017 and 2016 there were no pending legal matters against the company.

(d) Custody of securities: Consorcio Corredores de Bolsa S.A. has opted for the annual review of the processes and controls associated with the custody of securities to be performed by external auditors registered with the Chilean Financial Market Commission (CMF), to comply with Circular No. 1962 of the CMF.

third parties

National Foreign

Total ThCh$

income investments

ThCh$

Fixed income

investments ThCh$

Others ThCh$

income investments

ThCh$

Fixed income investments

ThCh$Others ThCh$

Custody without asset management 422,110,559 204,015,030 - - - - 626,125,589

Portfolio management -

- - - - -

- Management of voluntary retirement savings

-

- - - - -

- Total 422,110,559 204,015,030 626,125,589Percentage of custody with D.C.V. (%) 66.11% 99.49% 0.00% 0.00% 0.00% 0.00% 76.98%

Percentage of custody with issuers/physical 0.03% 0.51%

Percentage of custody with others 33.86% 0.0%

Custody for related third parties

National Foreign

Total ThCh$

income investments

ThCh$

Fixed income

investments ThCh$

Others ThCh$

income investments

ThCh$

Fixed income

investments ThCh$

Others ThCh$

Custody without asset management 49,323,183 1,460,963 - - - 50,784,146Portfolio management - - - - - - -Management of voluntary retirement savings - - - - - - -

Total 49,323,183 1,460,963 50,784,146Percentage of custody with D.C.V. (%) 99.23% 100.0% 0.0% 0.0% 0.0% 0.0% 99.25%Percentage of custody with issuers/physical 0.00% 0.0%


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third parties

National Foreign

Total ThCh$

income investments

ThCh$

Fixed income

investments ThCh$

Others ThCh$

income investments

ThCh$

Fixed income

investments ThCh$

Others ThCh$

Custody without asset management 329,748,288 204,360,056 - - - - 534,108,344

Portfolio management - - - - -

- -

Management of voluntary retirement savings - -

- - - - -

Total 329,748,288 204,360,056 534,108,344Percentage of custody with D.C.V. (%) 62.89% 99.95% 0.00% 0.00% 0.00% 0.00% 77.07%Percentage of custody with issuers/physical 0.01% 0.05%


Custody for related third parties

National Foreign

Total ThCh$

income investments

ThCh$

Fixed income

investments ThCh$

Others ThCh$

income investments

ThCh$

Fixed income

investments ThCh$

Others ThCh$

Custody without asset management 47,430,083 627,168 - - - 48,057,251Portfolio management - - - - - - -Management of voluntary retirement savings - - - - - - -

Total 47,430,083 627,168 48,057,251Percentage of custody with D.C.V. (%) 98.99% 100.0% 0.0% 0.0% 0.0% 0.0% 99.01%Percentage of custody with issuers/physical 0.00% 0.0%Percentage of custody with others 1.01% 0.0%

(e) Personal guarantees: As of December 31, 2017 and 2016 there were no personal guarantees.

(f) Operational guarantees: The Company has taken out an insurance policy to ensure the correct and full compliance of all its

and the Chilean Electronic Stock Exchange, in order to comply with the provisions of Articles 30 and 31 of Law No. 18.045 (Stock Market Law). This policy is for 20,000 UF (around US$ 250k), it was taken out with the Compañía de Seguros Generales Consorcio Nacional de Seguros S.A., and expires on April 22, 2018.

In addition, a policy has been taken out to ensure the correct and full compliance of all its obligations when managing the

caused by its failure, in accordance with the plan and the standards in Article 31 of the above-mentioned act. This policy is for UF 10,000 and was taken out with the Compañía de Seguros Generales Consorcio Nacional de Seguros S.A. and it expires on November 01, 2018.

To comply with the Chilean Commodities Exchange instructions, all stock brokers registered with the Santiago Stock Exchange have been instructed to take out an insurance policy to cover any potential irregularities caused by a lack of loyalty from their employees. The company’s policy amounts to US$ 1 million, taken out with Orion Seguros Generales, and it expires on April 15, 2018.

There are equity instruments held in custody by the Stock Exchange for ThCh$ 2,584,107 which are shares that the broker bought under a commitment to sell them at term. The shares can guarantee simultaneous transactions according to the standards indicated by the Stock Exchange, have a value amounting to ThCh$ 2,198,803 as of December 2017.

There are guarantees deposited at the Santiago Stock Exchange to ensure compliance with the obligations incurred or arising from compensation due to CCLV Contraparte Central S.A. (Chilean Central Clearing house). The guarantee as of December 31,

Broker’s accounts at fair value of ThCh$ 3,506,480 and at amortized cost of ThCh$ 3,519,251.


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NOTE 33 PROTECTION REGULATION FOR BOND HOLDERS: BORROWING LEVEL (APPLICABLE TO THE BANK AND SUBSIDIARIES).

Individual Group

2017 2016

2,139,244,252 2,078,568,676 Trade and other payables 46,736,414 20,299,189 Other short-term provisions 1,461,420 1,626,630 Current tax liabilities 1,319,498 1,161,291

3,279,433 2,567,226 38,178,150 35,558,766

2,230,219,167 2,139,781,778

2,230,219,167 2,139,781,778

1,091,447,131 698,097,534

Deferred tax liabilities 6,240,395 12,915,610 1,097,687,526 711,013,144 3,327,906,693 2,850,794,922

EQUITYIssued capital 356,571,629 356,671,629

55,274,124 33,285,424 Share premiumOther reserves 8,803,933 (3,717,638)

MINORITY INTEREST Total equity 420,649,686 386,139,415

3,748,556,379 3,236,934,337 3,327,906,693 2,850,794,922

420,649,686 386,139,415 7.91 7.38

Restrictions

Bonds charged to a line will be placed in the local market and issued as virtual bonds pursuant to Article 11 of DCV Law.

Early Redemption:The issuer may not redeem in advance all or part of these bonds of any series or subseries issued under the line and agreed in writing.

basis of a duly authorized progress table using a bullet formula.

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NOTE 34 MATERIAL EVENTS

Consorcio Financiero S.A.- On August 10, 2017, in accordance with the provisions of section II of General Regulation 30 of the Commission, in relation to

Article 9 and in paragraph 2 of Article 10 of Law 18.045 on the Securities Market, in complement to reports of a material event

date, Consorcio Financiero carried out the early redemption of all Series A Bonds readjusted to virtual bearer bonds charged to the bond line registered in the Securities Registry of the Chilean Financial Market Commission under No. 749, in circulation,

2017.

The aforementioned early redemption has been made through Banco BICE, representative of the Bondholders, by electronic transfer to the current accounts reported by the holders of Series A Bonds to Depósito Central de Valores S.A.

- Article 9 and in paragraph 2 of Article 10 of Law 18.045 on the Securities Market, we hereby inform you of a material event of Consorcio Financiero S.A. on this same date. On that same date, the notice of early redemption of the Series A Bonds readjusted to virtual bearer bonds issued under the bond line registered in the Securities Registry of the Chilean Financial Market Commission under N° 749, was published in the “Diario Financiero”, in accordance with the bond issuance contract

2012 and its subsequent amendments; and the Complementary Deed of Bond Issuance Contract by Debt Securities Line granted on March 20, 2013 in the same notary under repertoire N° 2.655-2013.

We hereby declare that Consorcio Financiero S.A. will redeem in advance all Series A Bonds currently in circulation.

- in the local market:

• Series C bonds (BCFSA-C) for an amount of UF 2,000,000 (two million UF), with a term of 5 years and a UF placement rate

year bond line, registered in the Securities Registry of this Commission on March 7, 2017 under No. 854.

• Series E bonds (BCFSA-E) for an amount of UF 2,000,000 (two million UF), with a term of 20 years and a UF placement rate

bond line, registered in the Securities Registry of this Commission on March 7, 2017 under No. 855.

• The maximum amount to issue between the two series was UF 4,000,000 (four million UF).

• liabilities of the issuer.

- On April 27, 2017, in accordance with the provisions of section II of General Regulation 30 of the Commission, in relation to Article 9 and in paragraph 2 of Article 10 of Law 18.045 on the Securities Market, we hereby inform you of the following material event of Consorcio Financiero S.A.: In Ordinary Session held on April 26, the Board of Directors unanimously agreed to appoint Mr. Marcos Büchi Buc as Chairman of the Board.

- On April 25, 2017, in accordance with Article 9 and paragraph 2 of Article 10 of Law 18.045 governing the Stock Market, we hereby report as a Material Event that an Ordinary Shareholders’ Meeting of the Company was held on April 25, 2017, at 11:00 am. All the shareholders entitled to vote attended this meeting and agreed to the following:

• Approve the Balance Sheet, Financial Statements and the External Auditors’ Report for the period ending December 31, 2016.

•

• Approve the dividend policy for 2017.

• Approve the Board remuneration policy for 2017.

• Appoint PricewaterhouseCoopers Consultores, Auditores SpA as external auditors assigned to examine accounting,

•

• Approve the operational report for 2016.

• Select the newspaper “El Diario Financiero” to publish notices regarding regular shareholders’ meetings and other corporate announcements.

•

Zúñiga and Sergio Restrepo Isaza.


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- On March 31, 2017, in accordance with the provisions of article 9 and subsection 2 of article 10 of Law 18.045 on the Securities Market, we informed that the Board of Directors agreed to call an Ordinary Meeting of Shareholders of the company for April

following subjects:

• Make a determination on the Balance Sheet, Financial Statements and the External Auditors’ Report for the period ending December 31, 2016.

• Presentation of the dividend policy and procedure to use in the distribution of dividends.

•

•

• Establishment of remunerations for the Directors for 2017.

• Appointment of external auditors for 2017.

• Appointment of the company’s risk raters.

• Disclosure of transactions with related parties of Title XVI of Law No. 18.046 on Corporations.

•

•

- On March 30, 2017, the Chilean Financial Market Commission approved the placement of Series C and D Bonds, charged to line 854, and Series E bonds, charged to line 855.

The main characteristics of these bonds are the followings:

• Series C: Nominal amount UF 4,000,000, composed of 8,000 bonds that will be issued with a nominal value of UF 500

annual rate of 1.50%, compounded, expired, calculated on the basis of 360-day years. The bonds can be redeemed as early as May 15, 2019.

• Series D: Nominal amount Ch$ 105,710,000,000, composed of 10,571 bonds that will be issued with a nominal value of Ch$ 10,000,000 each. Maturity date May 15, 2022. The Series D Bonds will accrue on unpaid capital expressed in Chilean

can be redeemed as early as May 15, 2019.

• Series E: Nominal amount UF 4,000,000, composed of 8,000 bonds that will be issued with a nominal value of UF 500

annual rate of 2.50%, compounded, expired, calculated on the basis of 360-day years. The bonds can be redeemed as early as May 15, 2022.

• Interest for all series will accrue as of March 15, 2017.

• All series have a term of 36 months as of March 30, 2017.

- On March 07, 2017 the Chilean Financial Market Commission registered in the Securities Register the bond lines numbered 854 and 855 of Consorcio Financiero S.A. The documents issued were virtual bearer bonds with 10 and 30 year terms respectively. The bonds placed under these lines may not jointly exceed UF 4,000,000.

- On September 21, 2017, in accordance with the provisions of Article 9 and 10 of Law No. 18.045 on the Securities Market and other current regulations of the Commission, we communicate a Material Event of CN Life Compañia de Seguros de Vida S.A.

Likewise, the Board of Directors agreed to appoint Mr. Christian Unger Vergara as CEO of the company, as of November 1, 2017.

- On April 25, 2017, in accordance with Article 9 and paragraph 2 of Article 10 of Law 18.045 governing the Stock Market, we hereby report as a Material Event that an Ordinary Shareholders’ Meeting of the Company was held on April 25, 2017, at 1:00 PM. All the shareholders entitled to vote attended this meeting and agreed to the following:


• Not distribute dividends, charged to net income from 2016.




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•


• Select the newspaper “El Diario Financiero” to publish notices regarding shareholders’ meetings and other corporate announcements.

- On September 21, 2017, in accordance with the provisions of Article 9 and 10 of Law No. 18.045 on the Securities Market and other current regulations of the Commission, we communicate a Material Event of Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A. in a meeting held on the same date: the Board acknowledged the resignation presented by Mr.

31, 2017.


- On August 2, 2017, in accordance with the provisions of Article 9 and subsection 2 of Article 10 of Law No. 18.045 on the Securities Market, we report the following material event of Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A.: according to the provisions of Article 46 of DL No. 3538 of 1980, Organic Law of the Commission for the Financial Market, yesterday we presented to the Santiago Court of Appeals an appeal against Circular No. 1001, issued by the Commission in reference to general restrictions applicable in the future regarding the administration of real estate that forms part of the

presented in the aforementioned appeal.

- On April 25, 2017, in accordance with Article 9 and paragraph 2 of Article 10 of Law 18.045 governing the Stock Market, we hereby report as a Material Event that an Ordinary Shareholders’ Meeting of the Company was held on April 25, 2017, at 10:00 am. 99.9054% of the shareholders entitled to vote attended this meeting and agreed to the following:


•




•



- On September 21, 2017, in accordance with the provisions of Article 9 and 10 of Law No. 18.045 on the Securities Market and other current regulations of the Commission, we communicate a Material Event of Compañía de Seguros Generales Consorcio Nacional de Seguros S.A. in a meeting held on the same date: the Board acknowledged the resignation presented by Mr.

31, 2017.


- On April 25, 2017, in accordance with Article 9 and paragraph 2 of Article 10 of Law 18.045 governing the Stock Market, we hereby report as a Material Event that an Ordinary Shareholders’ Meeting of the Company was held on April 25, 2017, at 12:00 pm. All the shareholders entitled to vote attended this meeting and agreed to the following:


•





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Banco Consorcio- At an Ordinary Shareholders’ Meeting of Banco Consorcio held on March 30, 2017, the shareholders:

• Received the management report and approved the Tax Accounts, the Financial Statements and Notes, and the Annual Report for 2016;

• Received and approved the External Auditors’ Report without any observations;

• Received a report regarding Material Events, communications with the SBIF and transactions with related parties during 2016;

• Received the Audit Committee’s Annual Report;

• Unanimously approved to distribute dividends of Ch$ 28,629,879,107, which represents 60% of net income for 2016, and hold 40% as retained earnings;

•

• Approved the Director’s remuneration for the year, which will be UF 70 monthly for attending Board meetings, and authorized the Board to approve the remuneration of the Directors that serve on the Audit Committee;

• Selected the newspaper “El Pulso” for publishing relevant company notices;

- On February 17, 2017, Banco Consorcio sold 12,308 shares and 30,000 warrants of Automotora Gildemeister S.A. in an electronic auction with the Chilean Electronic Stock Exchange, at a unit price of Ch$ 67,048 and Ch$ 2,681 respectively, payable immediately. The auction was arranged by Consorcio Corredores de Bolsa S.A., a subsidiary of Banco Consorcio, who received a payment of Ch$ 905,656,784.

NOTE 35 SUBSEQUENT EVENTS

Consorcio Financiero S.A.- On March 28, 2018, in accordance with the provisions of section II of General Regulations No. 30 of the CMF, in relation to article

9 and the second paragraph of article 10 of Law No. 18.045 on the Stock Market, the following material event of Consorcio Financiero S.A. (the “Company”) was reported at the meeting of the Board of Directors held on March 28, 2018:

The Board of Directors acknowledged the resignation presented by Mr. Eduardo Fernández León from the position of director of the Company as of the same date.

Given the foregoing, the Board of Directors, in addition to thanking the great contribution made by Mr. Fernández to the

replacement, who will hold the position until the Company’s next ordinary shareholders’ meeting, occasion on which the board of directors will be re-elected.

The Board of Directors agreed to call the Ordinary Shareholders’ Meeting of the company for April 24, 2018, at 1:00 pm, at the

• Make a determination on the Balance Sheet, Financial Statements and the External Auditors’ Report for the period ending December 31, 2017.

• Presentation of the dividend policy and procedure to use in the distribution of dividends.

• Make a determination on the distribution of Ch$ 110,109,458,652, through payment of a dividend of Ch$ 802 per share, paid from net income for 2017, which will be paid on a date determined by the Shareholders’ Meeting.

•

• Establishment of remunerations for the Directors for 2018.

• Appointment of external auditors for 2018.

• Appointment of the company’s risk raters.

• Disclosure of transactions with related parties of Title XVI of Law No. 18.046 on Corporations.

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•

•

- On March 21, 2018, in accordance with the provisions of Articles 9 and 10 of Law No. 18.045 on the Securities Market and other regulations in force, the following material event was reported for Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A.: at the meeting held on March 21, 2018, the Company’s Board of Directors agreed to call an Extraordinary

Santiago, to address the following subjects:

• Increase the number of Directors from 7 to 9.

• Update the Bylaws, the corresponding amendments that must be submitted for approval from the Financial Market Commission and the establishment of their consolidated text.

• Adopt all other agreements that are conducive or necessary to complete the amendment of the Bylaws as required.

- On March 21, 2018, in accordance with the provisions of Articles 9 and 10 of Law No. 18.045 on the Securities Market and other regulations in force, the following material event was reported for Compañía de Seguros Generales Consorcio Nacional de Seguros S.A.: at the meeting held on March 21, 2018, the Company’s Board of Directors agreed to call an Extraordinary

Santiago, to address the following subjects:




- On March 21, 2018, in accordance with the provisions of Articles 9 and 10 of Law No. 18.045 on the Securities Market and other regulations in force, the following material event was reported for CN Life Compañía de Seguros de Vida S.A.: at the meeting held on March 21, 2018, the Company’s Board of Directors agreed to call an Extraordinary Shareholders’ Meeting on April 24,

subjects:




NOTE 36 APPROVAL OF THE FINANCIAL STATEMENTS


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NOTA 37 COVENANTS

Consorcio Financiero S.A. is currently subject to covenants associated with 3 bank loans with 3 counterparties. Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A. is currently subject to covenants associated with bank loans. Management calculates and controls these covenants on a monthly basis. As of December 31, 2017, the Company has complied with all these covenants.

Counterparty Financial Restrictions 12/31/2017

Banco Estado CFSA Debt-to-Equity Ratio 0.55 0.24

12/31/2017

Banco Estado CNS Vida 99.00% 99.91%

ThCh$

Related party payables 918,388Current tax liabilities 16,297

64,371,227Deferred tax liabilities 2,361,424

188,544,677172,446

256,384,459

In order to comply with the Bond Series B, C and E prospectus and indenture agreements, the Parent Company has agreed:

2.1. statements.

2.2. To refrain from constituting guarantees (pledges or mortgages) on the assets, in order to guarantee new bond issues or any other loan or credit transaction, unless the total amount of all the obligations guaranteed by the Parent Company does not exceed 10% of its total assets.

2.3. shareholders agreements. It shall directly or indirectly hold at least 51% of the shares issued by Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A., CN Life Compañía de Seguros de Vida S.A., Compañía de Seguros Generales Consorcio Nacional de Seguros S.A., Consorcio Corredores de Bolsa S.A. and Banco Consorcio S.A.

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As of December 31, 2017, the Parent Company had complied with all of these restrictions.

Parent Company and

Others ThCh$

188,544,677Cash and cash equivalents 814,824Equity attributable to shareholders of the parent company 1,031,435,190

0.18 veces

Guarantees:No guarantees have been constituted using the Company’s assets subsequent to the date of the Issuance Agreement.

CFSA Percentage Ownership:

Company

Total Ownership

CNS Vida 99.91%CN Life 100%CNS Generales 100%Consorcio Corredores de Bolsa 100%Banco Consorcio 100%


07 Financial Statements

Summary Financial Statementsfor Subsidiaries

7.1

COMPAÑIA DE SEGUROS DE VIDA CONSORCIO SEGUROS S.A. 250BANCO CONSORCIO AND SUBSIDIARIES 257CN LIFE COMPAÑÍA DE SEGUROS DE VIDA S.A. 264COMPAÑÍA DE SEGUROS GENERALES CONSORCIO NACIONAL DE SEGUROS S.A. 271CF OVERSEAS 278CF INVERSIONES PERÚ S.A.C. 282CONSORCIO INVERSIONES FINANCIERAS SPA 287CONSORCIO SERVICIOS S.A. 291CONSORCIO INVERSIONES LTDA. 295CONSORCIO INVERSIONES DOS LTDA. 299INMOBILIARIA PUNTA PITE S.A. 303INMOBILIARIA LOTE 18 307CONSTRUCTORA E INMOBILIARIA PRESIDENTE RIESCO S.A. 312INVERSIONES CONTINENTAL BÍO BÍO SPA 317

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COMPAÑÍA DE SEGUROS DE VIDA CONSORCIO SEGUROS S.A.


Santiago, September 28, 2018

Shareholders and Directors

Seguros de Vida Consorcio Nacional de Seguros S.A.

-

Commission. This responsibility includes the design, implementation and maintenance of relevant internal controls for the

error.


accordance with generally accepted auditing standards in Chile. Those standards require that we plan and perform our work

--

the entity’s internal control. Accordingly, we do not express such an opinion. An audit also includes evaluating the accoun-


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Santiago, February 28, 2018Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A.2

Opinion

Other issues - Additional information

statements:

Matching reserve Foreign currency and indexed unitsContribution margin Opening premium reserves Claims costs Revenue costs ReservesPension insurancePremiumsData

Management is responsible for this information, which was directly derived from the underlying records and accounts used

auditing standards in Chile.

a whole.

comparative information.

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Statement of Financial Position 12/31/2017 12/31/2016

Total Assets 5,768,160,661 5,297,390,433 Total Financial Investments 4,814,819,747 4,419,498,287 Cash and cash equivalents 3,302,660 3,598,079 Financial assets measured at fair value 669,844,808 498,675,690 Financial assets at amortized cost 3,400,041,484 3,301,114,004 Loans 1,331,454 1,344,826 Advances to policyholders 1,331,454 1,344,826 Loans granted - -Investment insurance - Single Investment Account (CUI) 678,267,910 566,999,703 Investments in group companies 62,031,431 47,765,985 Investments in subsidiary companies - -Investment in associated companies 62,031,431 47,765,985 Total real estate investments 873,327,590 804,331,739 Property investments 409,793,879 381,749,826 Leasing receivables 442,679,309 401,991,819 Property, furniture and equipment for own use 20,854,402 20,590,094

Property for own use 17,583,802 16,993,518 Furniture and equipment for own use 3,270,600 3,596,576

Total insurance accounts 6,496,630 6,014,388 Insurance receivables 5,283,001 4,792,830 Insured accounts receivable 4,136,369 3,553,918 Reinsurance receivables 1,146,632 1,238,912

Claims receivable from reinsurers 946,874 1,118,249 Accepted reinsurance premiums receivable - -Non-proportional reinsurance assets 199,758 120,663 Other receivables for reinsurance transactions - -

Receivables for coinsurance transactions - -Premiums receivable for coinsurance transactions - -Claims receivable for coinsurance transactions - -

Other accounts receivable - -Reinsurer's share of technical reserves 1,213,629 1,221,558 Reinsurer's share of current risk reserves - -Reinsurer's share of pension insurance reserves - -

Reinsurer's share of annuities reserves - -Reinsurer's share of disability and survival insurance reserves - -

Reinsurer's share of mathematical reserves - -Reinsurer's share of private revenue reserves - -Reinsurer's share of claims reserves 1,213,629 1,221,558

- -Reinsurer's share of other technical reserves - -Other assets 73,516,694 67,546,019 Intangible assets 2,496,625 2,431,824 Goodwill 1,348,646 1,141,306 Intangible assets other than Goodwill 1,147,979 1,290,518 Taxes receivable 4,778,777 1,748,620 Receivables for current taxes 4,778,777 1,748,620 Deferred tax assets - -Other assets 66,241,292 63,365,575 Receivables from employees 742,022 1,179,604 Brokerage accounts receivable - -Related party receivables 20,987,851 23,088,355 Prepaid expenses 146,678 243,536 Other assets 44,364,741 38,854,080


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5,768,160,661 5,297,390,433 5,209,179,096 4,796,913,053

119,381,779 143,682,010

Total insurance accounts 4,959,502,682 4,559,571,972 Technical reserves 4,956,218,821 4,555,718,872 Current risk reserves 6,126,898 5,980,027 Pension insurance reserves 4,185,400,988 3,887,822,310

Annuity reserves 4,185,144,565 3,887,570,194

Disability and survival insurance reserves 256,423 252,116 Mathematical reserves 46,528,687 44,436,386 Fund value reserves 666,129,653 566,096,032 Private revenue reserves 39,946,089 40,314,251 Claims reserves 11,406,947 10,088,388 Earthquake reserves - -

- 96,582 Other technical reserves 679,559 884,896 Payables on insurance transactions 3,283,861 3,853,100 Payables to insured parties 2,477,403 2,515,106 Payables on reinsurance transactions 806,458 1,337,994 Payables on coinsurance transactions - - Premiums payable on coinsurance transactions - - Claims payable on coinsurance transactions - -Prepaid income on reinsurance transactions - -

130,294,635 93,659,071 Provisions - -Other liabilities 130,294,635 93,659,071 Taxes payable 25,069,810 17,209,659 Current tax accounts payable 497,224 5,997,215

Deferred tax liabilities 24,572,586 11,212,444 Payables to related parties 368,902 111,200 Brokerage payables 998,393 1,033,281 Payables to employees 10,853,206 9,456,437 Prepaid income - -

93,004,324 65,848,494 Total equity 558,981,565 500,477,380 Share capital 166,185,019 166,185,019 Reserves (14,747,028) (2,718,910)Retained earnings 405,771,675 335,246,917 Accumulated earnings 264,849,504 250,029,048 Net Income for the year 140,922,171 85,217,869 (Dividends) - -Other adjustments 1,771,899 1,764,354

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STATEMENT OF COMPREHENSIVE INCOME > As of December 31, 2017 and 2016

Statement of comprehensive income 12/31/2017 12/31/2016

Retained premiums 599,580,608 687,862,210 Direct premiums 603,654,553 692,320,773 Accepted premiums - -Assigned premiums 4,073,945 4,458,563

Change in technical reserves 90,877,165 58,654,632 Change in current risk reserves 46,603 1,613,357 Change in mathematical reserves 1,520,282 6,052,370 Change in fund value reserves 89,624,699 50,535,716 Change in earthquake reserves - -

(97,734) 28,262 Change in other technical reserves (216,685) 424,927

Cost of claims 131,469,460 111,780,461 Direct claims 134,423,068 115,386,486 Assigned claims 2,953,608 3,606,025 Accepted claims - -

Cost of income 497,592,855 605,787,541 Direct income 495,000,183 603,484,364 Assigned income - -Accepted income 2,592,672 2,303,177

Brokerage income 34,075,818 31,681,281 Direct agents commission 26,004,585 23,215,484 Brokers and pension advisors commission 8,071,233 8,465,797 Accepted reinsurance commission - -Assigned reinsurance commission - -

Non-pension reinsurance expense 781,720 738,998 Medical expenses 329,549 272,003 Insurance impairment 9,471 (583,601)

59,548,537 55,648,486 Remunerations 23,194,379 23,066,424 Others 36,354,158 32,582,062

388,752,058 310,030,153 Net realized investment income 11,416,330 34,063,358

Property investments 779,826 6,817,744 Financial investments 10,636,504 27,245,614

Net unrealized investment income 110,712,976 29,942,112 Property investments 182,484 306,544 Financial investments 110,530,492 29,635,568

Net accrued investment income 242,391,227 233,742,869 Property investments 49,191,726 46,168,347 Financial investments 200,524,743 195,193,413 Depreciation 4,369,906 3,929,024 Management expenses 2,955,336 3,689,867

Net Investment Income from Insurance Policies with Single Investment Account (CUI) 23,667,066 14,887,532 Investment impairment (564,459) 2,605,718

173,648,091 133,912,562 Other income and expenditure 6,602,796 4,217,607 Other income 9,392,486 7,574,711 Other expenses 2,789,690 3,357,104

(1,416,564) (9,932,111)Gain (loss) on indexed units (17,148,446) (25,092,742)Net income on continuing operations before tax 161,685,877 103,105,316 Net income on discontinued and held-for-sale operations (net of tax) - -Income taxes 20,763,706 17,887,447 Total net income for the year 140,922,171 85,217,869 STATEMENT OF OTHER COMPREHENSIVE INCOMEIncome from the revaluation of properties, furniture and equipment - -

- -- -

Other income taken to equity 7,545 1,551,970 Deferred taxes - -Total other comprehensive income 7,545 1,551,970 Total comprehensive income 140,929,716 86,769,839


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Cash Flow on operating activities 12/31/2017 12/31/2016Receipts from operating activities

Receipts from insurance and coinsurance premiums 608,799,748 697,628,643 Cash receipts from reinsurance premiums received - -Refunds of revenues and claims 23,684,146 19,279,336 Cash receipts from revenues and reinsured claims 471,208 2,120,841 Receipts from assigned reinsurance commissions - -

4,193,008,691 5,795,524,303 2,976,108,020 1,797,263,511

Cash receipts from property - -Interest and dividends received 9,827,211 7,802,946 Loans and receivables 52,278,173 32,838,826 Other cash receipts from insurance activity 302 146,925 Total cash income from insurance activities 7,864,177,499 8,352,605,331

Payments for operating activities Payments for direct insurance and coinsurance services 2,794,302 2,586,702 Payments of revenues and claims 437,243,316 392,830,281 Cash paid for direct insurance commissions 15,460,018 9,366,489 Payments of accepted reinsurance commissions -

4,278,670,084 5,852,568,131 2,980,737,230 1,949,049,934

Cash paid for property - -Tax expenses 16,477,445 12,560,728 Administrative expenses 84,749,748 119,944,666 Other payments for insurance activities 381,785 1,432,874 Total payments for insurance activities 7,816,513,928 8,340,339,805

47,663,571 12,265,526 CASH FLOW ON INVESTING ACTIVITIES Receipts from investing activities

Receipts from property, furniture and equipment 255,525 261,269 Receipts from property investments 119,148,533 154,468,958 Receipts from intangible assets - -Receipts from assets available for sale - -Receipts from shares in group companies and subsidiaries - -Other receipts related to investment activities - -Total receipts from investing activities 119,404,058 154,730,227

Cash paid for investment activities Cash paid for property, plant, and equipment 3,128,795 1,958,104 Payments for investment property 109,317,809 172,726,834 Payments for intangible assets - -Payments for assets held for sale - -Payments for shares in group companies and subsidiaries - -Other payments related to investing activities - -Total payments for investing activities 112,446,604 174,684,938

6,957,454 CASH FLOW ON FINANCING ACTIVITIES

Receipts from issuing equity instruments - -Receipts from related company loans 6,087,830 4,716,866 Receipts from bank loans 44,441,803 66,641 Capital increases - 47,001,133

- -50,529,633 51,784,640

Shareholder dividends 53,590,626 21,157,818 Interest paid 40,165,132 18,505,548 Reduction in capital - -Cash paid for related party loans 12,707,741 11,801,614

- -106,463,499 51,464,980

319,660 Changes in exchange rates 1,017,422 19,654 Total increase/decrease in cash and cash equivalents Initial balance of cash and cash equivalents 3,598,079 10,947,950 Final balance of cash and cash equivalents 3,302,660 3,598,079

Components of cash and cash equivalents at year-end Cash 301,394 207,327 Bank balances 3,001,266 3,390,752 Cash equivalents - -

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STATEMENT OF CHANGES IN EQUITY> As of December 31, 2017 and 2016

Statement of changes in net equityPaid

capital

Share premium reserves

Matching adjustment

reserves

Single Investment

Account

Unica de

insurance reserves

Other reserves

Total reserves

Other adjustments

retained earning

Net income for the

year

Total retained income +

income for the year

Other income with equity

adjustmentsTotal

incomeOverall

total

Initial Equity prior to Adjustments 166,185,019 2,179,198 (7,206,541) (238,976) 2,547,409 (2,718,910) 250,029,048 85,217,869 335,246,917 1,764,354 1,764,354 500,477,380Adjustments from Previous Years - - - -djustments from correction of errors or accounting changes - - -

Initial equity for the year 166,185,019 2,179,198 (7,206,541) (238,976) 2,547,409 (2,718,910) 250,029,048 85,217,869 335,246,917 1,764,354 1,764,354 500,477,380 Comprehensive Income - - - - - - 140,922,171 140,922,171 7,545 7,545 140,929,716

Net income for the year - 140,922,171 140,922,171 - 140,922,171 Total Income (Expenses) Credited (Charged) to Equity - - 7,545 7,545 7,545

Deferred taxes - - - -Transfers to Retained Earnings - 85,217,869 (85,217,869) - - -Shareholder Transactions - - - - - - (70,397,413) (70,397,413) - - (70,397,413)

Capital Increase (Decrease) - - - -(-) Dividend Distribution - (53,686,128) (53,686,128) - (53,686,128)Other shareholder transactions - (16,711,285) (16,711,285) - (16,711,285)

Reserves (12,098,506) 70,388 (12,028,118) - - - (12,028,118)Transfer of Equity to Income - - - -Other adjustments - - - -Final equity for the year 166,185,019 2,179,198 2,547,409 264,849,504 140,922,171 405,771,675 1,771,899 1,771,899 558,981,565

Statement of changes in net equityPaid

capital


Matching adjustment

reserves

Single Investment

Account

Unica de

insurance reserves

Other reserves

Total reserves

Other adjustments

retained earning

Net income for the

year

Total retained income +

income for the year

Other income with equity

adjustmentsTotal

incomeOverall

total

Initial Equity prior to Adjustments 119,183,885 2,179,198 2,086,996 (137,206) 2,547,409 6,676,397 250,974,132 35,171,797 286,145,929 212,384 212,384 412,218,595Adjustments from Previous Years - - - -Adjustments from correction of errors or accounting changes - - -

Initial equity for the year 119,183,885 2,179,198 2,086,996 (137,206) 2,547,409 6,676,397 250,974,132 35,171,797 286,145,929 212,384 212,384 412,218,595 Comprehensive Income - - - - - - 85,217,869 85,217,869 1,551,970 1,551,970 86,769,839

Net income for the year - 85,217,869 85,217,869 - 85,217,869 Total Income (Expenses) Credited (Charged) to Equity - - 1,551,970 1,551,970 1,551,970

Deferred taxes - - - -Transfers to Retained Earnings - 35,171,797 (35,171,797) - - -Shareholder Transactions 47,001,134 - - - - - (36,116,881) (36,116,881) - - 10,884,253

Capital Increase (Decrease) 47,001,134 - - - 47,001,134 (-) Dividend Distribution - (21,103,061) (21,103,061) - (21,103,061)Other shareholder transactions - (15,013,820) (15,013,820) - (15,013,820)

Reserves (9,293,537) (101,770) (9,395,307) - - - (9,395,307)Transfer of Equity to Income - - - -Other adjustments - - - -Final equity for the year 166,185,019 2,179,198 2,547,409 250,029,048 85,217,869 335,246,917 1,764,354 1,764,354 500,477,380


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Shareholders and Directors of Banco Consorcio

We have audited the accompanying Consolidated Financial Statements of Banco Consorcio and subsidiaries which comprise

accounting standards and instructions issued by the Superintendent of Banks and Financial Institutions. This responsibility includes the design, implementation, and maintenance of relevant internal controls for the preparation and fair presentation


audits in accordance with generally accepted auditing standards in Chile. Those standards require that we plan and perform

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated

-ments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated

-

statements.

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Banco Consorcio 2

Opinion

-

Banks and Financial Institutions


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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION> As of December 31, 2017 and 2016

Assets12/31/2017

MCh$12/31/2016

MCh$

Cash and bank deposits 104,635 27,409Transactions pending settlement 57,136 32,762Traded securities 102,165 66,573Repurchase contracts and securities lending 2,199 5,504Financial derivative contracts 35,256 13,493Loans to banks - 59,936Loans and receivables from customers 2,064,872 1,792,983Securities held for sale 1,345,339 1,163,586Securities held to maturity - -Investments in companies 2,347 2,321Intangible assets 1,347 1,330Property, plant and equipment 7,703 6,745Current taxes 3,358 910Deferred taxes 11,694 16,724Other assets 14,668 36,246Total Assets 3,752,719 3,226,522

Current accounts and other demand deposits 58,822 58,997Transactions pending settlement 53,378 24,176Repurchase contracts and securities lending 387,425 323,857Deposits and other borrowings 1,978,656 1,748,107Financial derivative contracts 15,474 10,209Bank borrowings 182,259 176,073Debt instruments issued 606,829 456,099

2 4Current taxes 535 383Deferred taxes 1,813 976Provisions 19,347 18,508Other liabilities 27,529 22,994

3,332,069 2,840,383Equity

Capital 356,572 356,572Reserves 2,104 (116)Revaluation accounts 8,804 (3,718)Retained earnings:Retained earnings from previous years 19,087 -Net income for the year 48,690 47,716Less: Provision for minimum dividends (14,607) (14,315)Minority interest - -

420,650 386,1393,752,719 3,226,522

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ts CONSOLIDATED NET INCOME STATEMENT > For the years ended December 31, 2017 and 2016

2017 Ch$ million

2016 Ch$ million

Revenue from interest and indexation 139.062 140.146Expenses on interest and indexation (92.097) (90.443)Net income from interest and indexation 46.965 49.703Revenue from commissions 9.306 8.035Expenses on commissions (2.314) (2.342)Net Income from commissions 6.992 5.693

64.345 54.749Net foreign exchange transactions (15.150) (14.028)Other operating income 1.761 1.323Total operating revenue 104.913 97.440Provisions for loan losses (9.354) (10.216)Net operating revenue 95.559 87.224

(19.142) (17.649)Administration expenses (12.336) (11.314)Depreciation and amortization (1.170) (998)Impairment - 3.428Other operating expenses (1.412) (1.622)Total operating expensesNet operating income 61.499 59.069Income from investments in other companies 1 6Net income before income tax 61.500 59.075Income tax (12.810) (11.359)Net income for the year 48.690 47.716

The Bank's controller 48.690 47.716Minority interest - -

2017 Ch$

2016 Ch$

Basic earnings per share 254,612 249,519Diluted net earnings 254,612 249,519



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CONSOLIDATED COMPREHENSIVE INCOME STATEMENT > For the years ended December 31, 2017 and 2016

2017 Ch$ million

2016 Ch$ million

Operating incomeNet operating revenue 95,559 87,224Total operating expenses (34,060) (28,155)Net operating income 61,499 59,069Income from investments in companies 1 6

61,500 59,075Income tax (12,810) (11,359)Income from continuing operations 48,690 47,716Net income for the year 48,690 47,716Other comprehensive incomeNet change in portfolio held for sale 17,051 30,689Net change in deferred tax on portfolio held for sale (4,529) (9,224)Total other comprehensive income, net of tax 12,522 21,465Total consolidated comprehensive income for the year 61,212 69,181

Owners of the bank 48,690 47,716Minority interest - -

Owners of the bank 61,212 69,181Minority interest - -

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ts CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY > For the years ended December 31, 2017 and 2016

ConceptN° of

shares Capital ReservesRevaluation

accounts

Earnings retained

from previous

yearsNet income for the year

Provision for

minimum dividends owners

Minority interest Total

As of January 01, 2017 191,232 356,572 47,716 386,139 386,139Distribution of net earnings from the previous year - - - 19,087 (19,087) 14,315 14,315 - 14,315

Dividends - - - - (28,629) - (28,629) - (28,629)Capital increase - - - - - - - - -Other reserves not from net income - 2,220 - - - - 2,220 - 2,220

Change in portfolio held for sale - - 17,051 - - - 17,051 - 17,051

Change in deferred tax on portfolio held for sale - - (4,529) - - - (4,529) - (4,529)

Minimum dividend provision - - - - - (14,607) (14,607) - (14,607)Net income for 2017 - - - - 48,690 - 48,690 - 48,690Minority interest - - - - - - - -

191,232 356,572 2,104 8,804 19,087 48,690 420,650 420,650

ConceptN° of

shares Capital ReservesRevaluation

accounts

Earnings retained

from previous

yearsNet income for the year

Provision for

minimum dividends owners

Minority interest Total

As of January 01, 2016 160,143 291,876 35,392 285,887 285,887Distribution of net earnings from the previous year 8,566 17,696 - - - (17,696) 10,617 10,617 - 10,617

Dividends - - - - (17,696) - (17,696) - (17,696)Capital increase 22,523 47,000 - - - - - 47,000 - 47,000Other reserves not from net income - 5,465 - - - - 5,465 - 5,465

Change in portfolio held for sale - - 30,689 - - - 30,689 - 30,689

Change in deferred tax on portfolio held for sale - - (9,224) - - - (9,224) - (9,224)

Minimum dividend provision - - - - - (14,315) (14,315) - (14,315)Net income for 2017 - - - - 47,716 - 47,716 - 47,716Minority interest - - - - - - - - -

191,232 356,572 47,716 386,139 386,139



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CONSOLIDATED CASH FLOW STATEMENT > For the years ended December 31, 2017 and 2016

2017 Ch$ million

2016 Ch$ million

Net income for the year 48,690 47,716Minority interest - -

Depreciation and amortization 1,170 998Provisions for loan losses 9,354 10,216Income from investments in other companies 1 6Income and deferred taxes 12,810 11,359Other operating expenses 1,412 1,622Net change in interest, indexation and commissions earned on assets and liabilities 6,018 (58,824)

Net (increase) in loans and accounts receivable (271,889) (201,986)Net (increase) in investment securities (181,753) (373,047)Net (increase) in traded securities (35,592) 22,524Net (increase) decrease owed by banks 59,936 (59,936)Net decrease (increase) in other assets and liabilities (1,095) 56,398Net increase (decrease) in current accounts and other demand deposits (175) 2,195Net increase (decrease) in repurchase contracts and securities lending 66,873 88,558Net increase in deposits and other borrowings 230,549 185,071Net increase in short-term borrowings from banks 6,186 52,604

(2) (13)Net increase in debt instruments issued 150,730 141,230

103,223

Dividend payments (28,629) (17,696)Capital increase - 47,000

29,304

(2,134) (950)

72,46035,995 80,950

108,455 35,995

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CN LIFE COMPAÑIA DE SEGUROS DE VIDA S.A.


Santiago, February 28, 2018

Shareholders and Directors

has not been audited by us and therefore it is not covered by this report.

-


error.

Auditor’s Responsibility


--



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Santiago, February 28, 2018

2

Opinion

issued by the Chilean Financial Market Commission.

Other issues - Additional information

statements:

Matching reserve Disability and survival insurance reservesForeign currency and indexed unitsContribution marginOpening premium reservesClaims costsRevenue costsReservesPension insurancePremiumsData


statements and other additional procedures, based on standard auditing principles in Chile.

a whole.


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ts STATEMENT OF FINANCIAL POSITION > As of December 31, 2017 and 2016


Total assets 750,983,727 724,633,550 658,645,564 641,211,012

Cash and cash equivalents 364,359 373,323 Financial assets measured at fair value 102,022,546 78,535,013 Financial assets at amortized cost 553,915,639 561,656,867 Loans - -Advances to policyholders - -Loans granted - -Investment insurance - Single Investment Account (CUI) - -Investments in group companies 2,343,020 645,809 Investments in subsidiary companies - -Investment in associated companies 2,343,020 645,809 Total real estate investments 74,089,402 68,294,364 Property investments 35,839,328 32,389,899 Leasing receivables 38,248,768 35,903,402 Property, furniture and equipment for own use 1,306 1,063

Property for own use - -Furniture and equipment for own use 1,306 1,063

Total insurance accounts 7,510,243 7,328,457 Insurance receivables 6,935,891 6,713,654 Insured accounts receivable 6,904,884 6,682,726 Reinsurance receivables 31,007 30,928

Claims receivable from reinsurers 6,256 6,465 Accepted reinsurance premiums receivable - -Non-proportional reinsurance assets 24,751 24,463 Other receivables for reinsurance transactions - -

Receivables for coinsurance transactions - -Premiums receivable for coinsurance transactions - -Claims receivable for coinsurance transactions - -

Other accounts receivable - -Reinsurer's share of technical reserves 574,352 614,803 Reinsurer's share of current risk reserves - -Reinsurer's share of pension insurance reserves 574,352 614,803

Reinsurer's share of annuities reserves 574,352 614,803 Reinsurer's share of disability and survival insurance reserves - -

Reinsurer's share of mathematical reserves - -Reinsurer's share of private revenue reserves - -Reinsurer's share of claims reserves - -

- -Reinsurer's share of other technical reserves - -

Other assets 10,738,518 7,799,717 Intangible assets 263,184 194,528 Goodwill 263,184 194,528 Intangible assets other than Goodwill - -Taxes receivable 5,145,424 4,751,669 Receivables for current taxes 1,544,370 704,662 Deferred tax assets 3,601,054 4,047,007 Other assets 5,329,910 2,853,520 Receivables from employees 10,393 9,711 Brokerage accounts receivable 24,774 28,140 Related party receivables 4,471 4,228 Prepaid expenses 6,435 14,286 Other assets 5,283,837 2,797,155



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750,983,727 724,633,550 660,717,294 650,786,210

19,500,749 23,440,995

Total insurance accounts 621,290,034 616,266,335 Technical reserves 620,809,847 615,889,127 Current risk reserves 4,405 2,922 Pension insurance reserves 617,522,009 613,167,109

Annuity reserves 551,358,038 538,828,209 Disability and survival insurance reserves 66,163,971 74,338,900

Mathematical reserves 2,485,338 2,516,562 Fund value reserves - -Private revenue reserves 139,939 149,990 Claims reserves 79,745 52,544 Earthquake reserves - -

578,411 -Other technical reserves - -Payables on insurance transactions 480,187 377,208 Payables to insured parties 450,030 347,303 Payables on reinsurance transactions 30,157 29,905 Payables on coinsurance transactions - -

Premiums payable on coinsurance transactions - -Claims payable on coinsurance transactions - -

Prepaid income on reinsurance transactions - -19,926,511 11,078,880

Provisions - -Other liabilities 19,926,511 11,078,880 Taxes payable 127,020 105,618

Current tax accounts payable 127,020 105,618 Deferred tax liabilities - -

Payables to related parties 2,300 5,077 Brokerage Payables - -Payables to employees 12,049 10,652 Prepaid income - -

19,785,142 10,957,533 Total equity 90,266,433 73,847,340 Share capital 53,644,951 53,644,951 Reserves (1,782,522) (1,189,304)Retained earnings 38,404,004 21,391,693 Accumulated earnings 18,361,436 11,449,979 Net Income for the year 20,042,568 9,941,714 (Dividends) - -Other adjustments - -

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ts STATEMENT OF COMPREHENSIVE INCOME > As of December 31, 2017 and 2016


Retained premiums 60,704,110 117,904,334 Direct premiums 60,822,841 118,019,037 Accepted premiums - -Assigned premiums 118,731 114,703

Change in technical reservesChange in current risk reserves 1,429 (815)Change in mathematical reserves (73,641) (77,500)Change in fund value reserves - -Change in earthquake reserves - -

(830,461) (169,663)Change in other technical reserves - -

Cost of claims 44,407,050 81,050,183 Direct claims 44,407,050 81,067,052 Assigned claims - 16,869 Accepted claims - -

Cost of income 43,064,094 67,343,188 Direct income 42,952,431 67,196,340 Assigned income 26,356 17,737 Accepted income 138,019 164,585

Integration income 216,791 446,823 Direct agents commission - -Brokers and pension advisors commission 216,791 446,823 Accepted reinsurance commission - -Assigned reinsurance commission - -

Non-pension reinsurance expense 59,362 98,202 Medical expenses - -Insurance impairment (193) 101

1,555,625 1,576,126 Remunerations 647,713 522,556 Others 907,912 1,053,570

49,732,945 44,262,556 Net realized investment income 2,969,152 4,684,410

Property investments 1,085,777 (64,390)Financial investments 1,883,375 4,748,800

Net unrealized investment income 11,798,249 4,004,389 Property investments - -Financial investments 11,798,249 4,004,389

Net accrued investment income 34,962,985 35,480,900 Property investments 3,251,025 3,362,162 Financial investments 31,912,180 32,287,065 Depreciation 22,358 21,841 Management expenses 177,862 146,486

Net Investment Income from Insurance Policies with Single Investment Account (CUI) - -Investment impairment (2,559) (92,857)

22,036,999 11,900,245 Other income and expenditureOther income 73,609 58,648 Other expenses 574,733 794,807

349,430 1,885,878 Gain (loss) on indexed units 431,228 (1,726,364)Net income on continuing operations before tax 22,316,533 11,323,600 Net income on discontinued and held-for-sale operations (net of tax) - -Income taxes 2,273,965 1,381,886 Total net income for the year 20,042,568 9,941,714 Income from the revaluation of properties, furniture and equipment - -

1,978 387,993 - -

Other income taken to equity - -Deferred taxes - -Total other comprehensive income 1,978 387,993 Total comprehensive income 20,044,546 10,329,707



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Cash Flow on operating activities 12/31/2017 12/31/2016

Receipts from operating activitiesReceipts from insurance and coinsurance premiums 60,752,958 127,734,343 Cash receipts from reinsurance premiums received - -Refunds of revenues and claims - -Receipts from revenues and claims reinsured 76,203 74,361 Receipts from assigned reinsurance commissions - -

727,708,132 989,371,438 1,057,404,670 762,305,868

Cash receipts from property 96,277 386,325 Interest and dividends received 1,586,859 1,836,845 Loans and receivables - 27,543 Other cash receipts from insurance activity 39,166 231 Total cash income from insurance activities 1,847,664,265 1,881,736,954

Payments for operating activitiesPayments for direct insurance and coinsurance services 214,365 320,777 Payments of revenues and claims 91,642,775 133,190,056 Cash paid for direct insurance commissions 186,890 379,667 Payments of accepted reinsurance commissions - -

725,396,682 988,500,097 1,015,523,714 750,031,225

Cash paid for property 5,781 -Tax expenses 2,887,111 624,265 Administrative expenses 10,043,349 1,424,508 Other payments for insurance activities - -Total payments for insurance activities 1,845,900,667 1,874,470,595

1,763,598 7,266,359 CASH FLOW FROM INVESTING ACTIVITIESReceipts from investing activities

Receipts from property, furniture and equipment - -Receipts from investment property 23,342,979 11,225,776 Receipts from intangible assets - -Receipts from assets held for sale - -Receipts from shares in group companies and subsidiaries - -Other receipts relating to investing activitiesTotal receipts from investing activities 23,342,979 11,225,776

Payments for investing activitiesPayments for property, furniture and equipment - 1,126 Payments for investment property 24,360,446 10,580,332 Payments for intangible assets - -Payments for assets held for sale - -Payments for shares in group companies and subsidiaries - -Other payments related to investing activities - -Total payments for investing activities 24,360,446 10,581,458

644,318 CASH FLOW FROM FINANCING ACTIVITIES

Receipts from issuing equity instruments - -Receipts from related company loans 8,887 48,545 Receipts from bank loans - -Capital increases - -

- -8,887 48,545

Shareholder dividends - 7,310,489 Interest paid 756,887 678,721 Capital reduction - -Payments for related company loans 545 1,417

- -757,432 7,990,627

Changes in exchange rates (6,550) (34)Total increase/decrease in cash and cash equivalents (8,964) (31,439)Initial balance of cash and cash equivalents 373,323 404,762 Final balance of cash and cash equivalents 364,359 373,323

Components of cash and cash equivalents at the end of the yearCash - -Bank balances 364,359 373,323 Cash equivalents - -

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ts STATEMENT OF CHANGES IN EQUITY > As of December 31, 2017 and 2016

Statement of changes in equityShare

capital


Reserves for matching

adjustmentOther

reservesTotal

reserves

Other adjustments

retained earning

Net income for the year

Total retained

earnings + net income

for the year

Overall total

Initial Equity prior to Adjustments 53,644,951 81,549 (1,658,846) 387,993 (1,189,304) 11,449,979 9,941,714 21,391,693 73,847,340 Adjustments from Previous Years - - -Adjustments from correction of errors or accounting changes - - -

Initial equity for the year 53,644,951 81,549 (1,658,846) 387,993 (1,189,304) 11,449,979 9,941,714 21,391,693 73,847,340 Comprehensive Income - - - 1,978 1,978 - 20,042,568 20,042,568 20,044,546

Net income for the year - 20,042,568 20,042,568 20,042,568 Total Income (Expenses) Credited (Charged) to Equity 1,978 1,978 - 1,978

Deferred taxes - - -Transfers to Retained Earnings - 9,941,714 (9,941,714) - -Shareholder Transactions - - - - - (3,030,257) - (3,030,257) (3,030,257)

Capital Increase (Decrease) - - -(-) Dividend Distribution - - - -Other shareholder transactions - (3,030,257) (3,030,257) (3,030,257)

Reserves (595,196) (595,196) - - (595,196)Transfer of Equity to Income - - -Other adjustments - - -Final equity for the year 53,644,951 81,549 389,971 18,361,436 20,042,568 38,404,004 90,266,433


capital



adjustmentOther

reservesTotal

reserves

Other adjustments

retained earning


Total retained


for the year

Overall total

Initial Equity prior to Adjustments 53,644,951 81,549 1,858,165 - 1,939,714 5,903,500 12,184,217 18,087,717 73,672,382

Adjustments from Previous Years - - -Adjustments from correction of errors or accounting changes - - -

Initial equity for the year 53,644,951 81,549 1,858,165 - 1,939,714 5,903,500 12,184,217 18,087,717 73,672,382 Comprehensive Income - - - 387,993 387,993 - 9,941,714 9,941,714 10,329,707

Net income for the year - - 9,941,714 9,941,714 9,941,714 Total Income (Expenses) Credited (Charged) to Equity 387,993 387,993 - 387,993

Deferred taxes - - -Transfers to Retained Earnings - 12,184,217 (12,184,217) - -Shareholder Transactions - - - - - (6,637,738) - (6,637,738) (6,637,738)

Capital Increase (Decrease) - - -(-) Dividend Distribution - 7,310,489 7,310,489 7,310,489 Other shareholder transactions - 672,751 672,751 672,751

Reserves (3,517,011) (3,517,011) - - (3,517,011)Transfer of Equity to Income - - -Other adjustments - - -Final equity for the year 53,644,951 81,549 387,993 11,449,979 9,941,714 21,391,693 73,847,340


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COMPAÑÍA DE SEGUROS GENERALES CONSORCIO NACIONAL DE SEGUROS S.A.


Santiago. February 28, 2018

Shareholders and DirectorsCompañía de Seguros Generales Consorcio Nacional de Seguros S.A.

-

-


error.



--


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Santiago, February 28, 2018Compañía de Seguros Generales Consorcio Nacional de Seguros S.A. 2Opinion

Other issues - additional information

statements:

SOAPForeign currency and indexed unitsSales by Regions TableContribution marginClaims costsReservesData


a whole.



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Total assets 93,757,087 92,163,866 29,338,050 28,528,509

Cash and cash equivalents 1,965,336 1,615,280 Financial assets measured at fair value 27,372,714 26,913,229 Total real estate investments 3,634,248 3,603,154 Investment properties 3,402,221 3,364,350 Leasing receivables - -Property, furniture and equipment for own use 232,027 238,804

Property for own use 114,246 119,135 Furniture and equipment for own use 117,781 119,669

Total insurance accounts 54,932,933 54,327,458 Insurance receivables 46,258,410 45,604,075 Insured accounts receivable 42,690,912 41,064,493 Reinsurance receivables 1,783,212 2,802,036

Claims receivable from reinsurers 1,191,041 2,215,375 Accepted reinsurance premiums receivable - -Non-proportional reinsurance assets 592,171 586,661 Other receivables for reinsurance transactions - -

Receivables for coinsurance transactions 1,784,286 1,737,546 Premiums receivable for coinsurance transactions 1,720,265 966,466 Claims receivable for coinsurance transactions 64,021 771,080

Other accounts receivable - -Reinsurer's share of technical reserves 8,674,523 8,723,383 Reinsurer's share of current risk reserves 3,672,647 3,467,380 Reinsurer's share of pension insurance reserves - -

Reinsurer's share of annuities reserves - -Reinsurer's share of disability and survival insurance reserves - -

Reinsurer's share of mathematical reserves - -Reinsurer's share of private revenue reserves - -Reinsurer's share of claims reserves 4,744,657 5,217,734

183,795 19,794 Reinsurer's share of other technical reserves 73,424 18,475

Other assets 5,851,856 5,704,745 Intangible assets 802,236 1,255,225 Goodwill - -Intangible assets other than Goodwill 802,236 1,255,225 Taxes receivable 804,085 732,725 Receivables for current taxes 60,405 56,503 Deferred tax assets 743,680 676,222 Other assets 4,245,535 3,716,795 Receivables from employees 100,749 136,460 Brokerage accounts receivable 596,236 106,458 Related party receivables - 43,011 Prepaid expenses 151,622 218,006 Other assets 3,396,928 3,212,860

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93,757,087 92,163,866 70,113,920 70,538,104

1,530,764 2,055,567

Total insurance accounts 62,869,044 61,732,593 Technical reserves 57,427,944 56,482,783 Current risk reserves 40,619,475 38,959,783 Pension insurance reserves - -

Annuity reserves - -Disability and survival insurance reserves - -

Mathematical reserves - -Fund value reserves - -Private revenue reserves - -Claims reserves 15,225,330 16,026,025 Earthquake reserves 147,390 144,914

858,496 827,300 Other technical reserves 577,253 524,761 Payables on insurance transactions 5,441,100 5,249,810 Payables to insured parties 1,873,591 1,722,018 Payables on reinsurance transactions 2,896,942 2,826,444 Payables on coinsurance transactions 102,888 163,099

Premiums payable on coinsurance transactions 102,888 163,099 Claims payable on coinsurance transactions - -

Prepaid income on reinsurance transactions 567,679 538,249 5,714,112 6,749,944

Provisions - -Other liabilities 5,714,112 6,749,944 Taxes payable 758,172 1,078,001

Current tax accounts payable 758,172 1,078,001 Deferred tax liabilities - -

Payables to related parties 182,260 285,639 Brokerage Payables 968,118 610,426 Payables to employees 849,369 674,133 Prepaid income 47,478 332,346

2,908,715 3,769,399 Total equity 23,643,167 21,625,762 Share capital 13,548,584 13,548,584 Reserves 84,731 84,731 Retained earnings 10,009,852 7,992,447 Accumulated earnings 7,129,188 4,648,591 Net income for the year 2,880,664 3,343,856 (Dividends) - -Other adjustments - -



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COMPREHENSIVE INCOME STATEMENT > As of December 31, 2017 and 2016


12,149,226 11,551,189 Retained premiums 66,210,805 62,959,496

Direct premiums 78,150,388 74,013,944 Accepted premiums - -Assigned premiums 11,939,583 11,054,448

Change in technical reserves 664,579 2,609,198 Change in current risk reserves 824,105 2,164,637 Change in mathematical reserves - -Change in fund value reserves - -Change in earthquake reserves - -

(147,175) (58,591)Change in other technical reserves (12,351) 503,152

Cost of claims 42,188,443 37,847,100 Direct claims 48,325,229 43,460,697 Assigned claims 6,136,786 5,613,597 Accepted claims - -

Cost of incomeDirect income - -Assigned income - -Accepted income - -

Integration income 9,880,861 9,713,548 Direct agents commission 3,705,838 2,696,444 Brokers and pension advisors commission 8,505,243 9,262,615 Accepted reinsurance commission - -Assigned reinsurance commission 2,330,220 2,245,511

Non-pension reinsurance expense 1,442,754 1,195,846 Medical expenses - -Insurance impairment (115,058) 42,615

12,211,630 11,586,513 Remunerations 4,427,867 5,128,931 Others 7,783,763 6,457,582

1,791,132 2,861,390 Net realized investment income 60,290 196,891

Property investments - -Financial investments 60,290 196,891

Net unrealized investment income 229,096 1,291,309 Property investments 12,022 -Financial investments 217,074 1,291,309

Net accrued investment income 1,501,746 1,373,190 Property investments 162,430 25,719 Financial investments 1,480,063 1,360,443 Depreciation 62,253 -Management expenses 78,494 12,972

Net Investment Income from Insurance Policies with Single Investment Account (CUI) - -Investment impairment - -

1,728,728 2,826,066 Other income and expenditure 1,676,706 438,477 Other income 1,845,031 759,955 Other expenses 168,325 321,478

(126,541) 9,804 Gain (loss) on indexed units 364,848 870,745 Net income on continuing operations before tax 3,643,741 4,145,092 Net income on discontinued and held-for-sale operations (net of tax) - -Income taxes 763,077 801,236 Total net income for the year 2,880,664 3,343,856 Other comprehensive income statementIncome from the revaluation of properties, furniture and equipment - -

- -- -

Other income taken to equity - -Deferred taxes - -Total other comprehensive incomeTotal comprehensive income 2,880,664 3,343,856

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12/31/2017 12/31/2016Receipts from operating activities

Receipts from insurance and coinsurance premiums 88,200,810 82,308,572 Cash receipts from reinsurance premiums received -Refunds of revenues and claims 5,693,864 5,825,476 Cash receipts from revenues and reinsured claims 3,766,477 3,602,846 Receipts from assigned reinsurance commissions -

452,154,993 435,903,811 - -

Cash receipts from property -Interest and dividends received -Loans and receivables -Other cash receipts from insurance activity 1,361,305 88,595 Total cash income from insurance activities 551,177,449 527,729,300

Payments for operating activitiesPayments for direct insurance and coinsurance services 7,506,081 7,131,155 Payments of revenues and claims 56,665,108 55,960,627 Cash paid for direct insurance commissions 13,676,059 13,485,020 Payments of accepted reinsurance commissions -

451,089,124 432,094,219 - -

Cash paid for property -Tax expenses 6,724,496 7,338,028 Administrative expenses 14,376,068 11,736,643 Other payments for insurance activities 31,423 Total payments for insurance activities 550,068,359 527,745,692

1,109,090 CASH FLOW FROM INVESTING ACTIVITIESReceipts from investing activities

Receipts from property, furniture and equipment -Receipts from investment property -Cash Receipts from Intangible Assets -Receipts from assets held for sale -Cash receipts from shares in group companies and subsidiaries -Other receipts relating to investing activities -Total receipts from investing activities

Payments for investing activitiesPayments for property, furniture and equipment 27,378 73,957 Payments for investment property 1,224 Payments for intangible assets -Payments for assets held for sale -Payments for shares in group companies and subsidiaries -Other payments related to investing activities - -Total payments for investing activities 28,602 73,957

CASH FLOW FROM FINANCING ACTIVITIES

Receipts from issuing equity instruments -Receipts from related company loans -Receipts from bank loans -Capital increases -

-

Shareholder dividends 1,002,216 Interest paid 78,272 21,536 Capital reduction -Payments for related company loans -

-1,080,488 21,536

Changes in exchange rates 350,056 33,152 Total increase/decrease in cash and cash equivalents 350,056 Initial balance of cash and cash equivalents 1,615,280 1,694,013 Final balance of cash and cash equivalents 1,965,336 1,615,280

Components of cash and cash equivalents at the end of the year 1,965,336 1,615,280 Cash 4,002 3,932 Bank balances 1,961,334 1,611,348 Cash equivalents - -



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capital



adjustment

Single Investment

Account

insurance reserves

Other reserves

Total reserves

Other adjustments

retained earning

Net income for the

year

Total retained


for the year

Overall total

Initial Equity prior to Adjustments 13,548,584 84,731 - - - 84,731 4,648,591 3,343,856 7,992,447 21,625,762 Adjustments from Previous Years - - -Adjustments from correction of errors or accounting changes - - -Initial equity for the year 13,548,584 84,731 - - - 84,731 4,648,591 3,343,856 7,992,447 21,625,762 Comprehensive Income - - - - - - 2,880,664 2,880,664 2,880,664

Net income for the year - 2,880,664 2,880,664 2,880,664 Total Income (Expenses) Credited (Charged) to Equity - - -

Deferred Tax - - -Transfers to Retained Earnings - 3,343,856 (3,343,856) - -Shareholder Transactions - - - - - - (863,259) (863,259) (863,259)

Capital Increase (Decrease) - - -(-) Dividend Distribution - (1,002,216) (1,002,216) (1,002,216)Other shareholder transactions - 138,957 138,957 138,957

Reserves - - - - -Transfer of Equity to Income - - -Other adjustments - - -Final equity for the year 13,548,584 84,731 84,731 7,129,188 2,880,664 10,009,852 23,643,167


capital



adjustment

Single Investment

Account

insurance reserves

Other reserves

Total reserves

Other adjustments

retained earning

Net income for the

year

Total retained


for the year

Overall total

Initial Equity prior to Adjustments 13,548,584 84,731 - - - 84,731 4,900,053 578,227 5,478,280 19,111,595 Adjustments from Previous Years - - -Adjustments from correction of errors or accounting changes - -Initial equity for the year 13,548,584 84,731 - - - 84,731 4,900,053 578,227 5,478,280 19,111,595 Comprehensive Income - - - - - - - 3,343,856 3,343,856 3,343,856

Net income for the year - 3,343,856 3,343,856 3,343,856 Total Income (Expenses) Credited (Charged) to Equity - - -

Deferred Tax - - -Transfers to Retained Earnings - 578,227 (578,227) - -Shareholder Transactions - - - - - - (829,689) (829,689) (829,689)

Capital Increase (Decrease) - - -(-) Dividend Distribution - - - -Other shareholder transactions - (829,689) (829,689) (829,689)

Reserves - - - - -Transfer of Equity to Income - - -Other adjustments - - -Final equity for the year 13,548,584 84,731 84,731 4,648,591 3,343,856 7,992,447 21,625,762

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CF OVERSEAS



Shareholders and DirectorsConsorcio Financiero S.A.,

Supervisor (currently Financial market Commission - CMF), for the subsidiary CF Overseas, and their accompanying notes regarding “accounting policies” and “transactions with related parties” are consistent in all material aspects with the infor-

statements that include their accounting policies and transactions with related parties.

Consorcio Financiero S.A. It is only intended for Senior Management and the Chilean Financial Market Commission, and it should not be used by any other party.


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2017 ThCh$

2016 ThCh$

Assets Cash and cash equivalents 33,837 54,113

- - 7,261,057 7,907,377

Total assets 7,294,894 7,961,490

4,072 4,072

EquityShare capital 6,607,528 6,607,528

387,166 1,049,690 Other reserves 300,200 300,200 Total equity 7,294,894 7,957,418

7,294,894 7,961,490

INCOME STATEMENT > As of December 31, 2017 and 2016

2017 ThCh$

2016 ThCh$

Revenue from ordinary activities 651,206 158,534 Gross margin 651,206 158,534 Administration expenses (3,060) (9,321)Other expenses, by function - - Net Operating Income 648,146 149,213 Share of net income of associates and joint ventures accounted for using the equity method

(649,257) (565,547)Indexation adjustments

Income tax expenseNet income from continuing operationsNet income from discontinued operations - - Net incomeNet income (loss) attributable to owners of the parent company (1,111) (416,334)Net income

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ts CASH FLOW STATEMENT > As of December 31, 2017 and 2016

2017 ThCh$

2016 ThCh$

Receipts from royalties, installments, commissions and other operating revenue - - Receipts from other operating activities - 1,522,305

1,522,305 Payments for operating activities

Payments to suppliers for goods and services (6,943) (5,215)Payments on contracts for brokering or trading - - Payments for other operating activities - -

Payments for operating activities

Dividends received 651,206 208,167 Income taxes paid (refunded)

651,206 208,167 644,263 1,725,257

Loan repayments - - Dividends paid (661,413) (1,683,822)

10,771 52,206

Cash and cash equivalents at the start of the year 54,113 1,907 Cash and cash equivalents at the end of the year 33,837 54,113

CF OVERSEAS


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Share capital ThCh$


conversion reserves

ThCh$

Financial asset revaluation

reserves ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity

shareholders of the parent

company ThCh$

January 01, 2017 6,607,528 300,200 300,200 1,049,690 7,957,418

Capital increaseNet income - - - - - (1,111) (1,111)Other comprehensive income - - - - - - - Total comprehensive incomeCapital increaseIncrease (decrease) for other contributions by the owners - - - - - - -

Distribution to shareholders - - - - - (661,413) (661,413)Total changes in equity

6,607,528 300,200 300,200 387,166 7,294,894

Share capital ThCh$


conversion reserves

ThCh$


reserves ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

January 01, 2016 6,607,528 300,200 300,200 3,149,846 10,057,574

Capital increaseNet income - - - - - (416,334) (416,334)Other comprehensive income - - - - - - - Total comprehensive incomeCapital increaseIncrease (decrease) for other contributions by the owners - - - - - - -

Distribution to shareholders - - - - - (1,683,822) (1,683,822)Total changes in equity

6,607,528 300,200 300,200 1,049,690 7,957,418

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CF INVERSIONES PERU S.A.C.


Santiago, March 28, 2018Shareholders and Directors Consorcio Financiero S.A.

Supervisor (currently Financial market Commission - CMF), for the subsidiary CF Inversiones Perú S.A.C., and their accom-panying notes regarding “accounting policies” and “transactions with related parties” are consistent in all material aspects

Management of Consorcio Financiero S.A. and CF Inversiones Peru S.A.C. are responsible for the preparation of these sum-



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2017 ThCh$

2016 ThCh$

AssetsCash and cash equivalents 22 Current tax accounts receivable 39,414 3,834

117,433 45,407 706,060 1,395,301

Investments accounted for using the equity method 50,984,890 41,242,084 Total assets 51,847,797 42,686,648

8,958 - 8,958


6,869,036 2,644,435 Other reserves 7,642,223 4,345,629

51,838,839 42,686,648 Minority interests - - Total equity 51,838,839 42,686,648

51,847,797 42,686,648

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ts NET INCOME STATEMENT > As of December 31, 2017 and 2016

2017 ThCh$

2016 ThCh$

Revenue from ordinary activities 114,395 81,128 Gross margin 114,395 81,128 Other income Distribution costs (105,900)Administration expenses (19,162)Other expenses, by function (11,792) - Net Operating Income 83,441 Share of net income of associates and joint ventures accounted for using the equity method 4,600,855 2,190,541

(301,417) (28,679) 4,382,879 2,137,090

Income tax expense (25,718) 11,552 Net income from continuing operations 4,357,161 2,148,642 Net income 4,357,161 2,148,642 Net income attributable to owners of the parent company 4,357,161 2,148,642 Net income 4,357,161 2,148,642

(2,256,814) (1,551,439)Income tax related to components of other comprehensive incomeHeld for sale in other comprehensive income 3,514,430 4,345,629 Other comprehensive income 1,257,616 2,794,190 Total comprehensive income 5,614,777 4,942,832

Owners of the parent company 5,614,777 4,942,832 Minority interests - - Total comprehensive income 5,614,777 4,942,832



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CASH FLOW STATEMENT > As of December 31, 2017 and 2016

2017 ThCh$

2016 ThCh$

Receipts from royalties, installments, commissions and other operating revenue 611,814 101,133 611,814 101,133

Payments for operating activitiesPayments to suppliers for goods and services (128,830) (1,775,043)

Payments for operating activities Income taxes paid (refunded) (58,267) (44,396)

424,717

Other payments to acquire equity or debt instruments of other entities (3,962,152) - - -

Receipts from share issues 3,537,414 - Loans from related companies 3,375,403 - Loan repayments (3,375,403) -

3,537,414 1

Cash and cash equivalents at the start of the year 22 1,718,327 Cash and cash equivalents at the end of the year 22

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conversion reserves

ThCh$


Reserves ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

January 01, 2017 35,696,584 4,345,629 4,345,629 2,644,435 42,686,648

Capital increaseNet income for the year - - - - - 4,357,161 4,357,161 Other comprehensive income - (2,256,814) - 3,514,430 1,257,616 - 1,257,616 Total comprehensive income 3,514,430 1,257,616 4,357,161 5,614,777 Capital increase 3,537,414 - - - - - 3,537,414 Dividends - - - - - - - Distribution to shareholders - - - - - - - Other increases (decreases) (1,906,418) 2,256,814 - (217,836) 2,038,978 (132,560) - Total changes 1,630,996 3,296,594 3,296,594 4,224,601 9,152,191

37,327,580 7,642,223 7,642,223 6,869,036 51,838,839

Share capital ThCh$


conversion reserves

ThCh$


Reserves ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

January 01, 2016 37,226,770 517,046 37,743,816

Capital increaseNet income for the year - - - - - 2,148,642 2,148,642 Other comprehensive income - (1,551,439) - 4,345,629 2,794,190 - 2,794,190 Total comprehensive income 4,345,629 2,794,190 2,148,642 4,942,832 Capital increase - - - - - - - Dividends - - - - - - - Distribution to shareholders - - - - - - - Other increases (decreases) (1,530,186) 1,551,439 - - 1,551,439 (21,253) - Total changes 4,345,629 4,345,629 2,127,389 4,942,832

35,696,584 4,345,629 4,345,629 2,644,435 42,686,648



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CONSORCIO INVERSIONES FINANCIERAS SPA



Supervisor (currently Financial market Commission - CMF), for the subsidiary Consorcio Inversiones Financieras SpA, and their accompanying notes regarding “accounting policies” and “transactions with related parties” are consistent in all mate-

Management of Consorcio Financiero S.A. and Consorcio Inversiones Financieras SpA. are responsible for the preparation of

-


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2017 ThCh$

2016 ThCh$

AssetsCash and cash equivalents 846 891 Related party receivables - - Deferred tax assets 2,307 2,198 Investments accounted for using the equity method 2,864 2,865 Total assets 6,017 5,954

Accounts payable to related companies: 7,812 7,536 663 664

8,475 8,200 EquityShare capital 2,032 2,032

(4,490) (4,278)Total equity

6,017 5,954

NET INCOME STATEMENT > As of December 31, 2017 and 2016

2017 ThCh$

2016 ThCh$

Revenue from ordinary activities 166 Cost of sales - - Gross Margin 166 Administration expenses (46) (1,340)Other expenses, by function (275) (244) Net Operating IncomeShare of net income of associates and joint ventures accounted for using the equity method - - Indexation adjustments (74)

Income tax expense 109 1,121

Net income from discontinued operations - -

Net income attributable to owners of the parent company (212) (371)



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2017 ThCh$

2016 ThCh$

Payments for operating activities Payments to suppliers for goods and services (46) (2,005) Payments for operating activities

Dividends received 1 168 1 168

- -

Loans from related companies 1,000 Loan repayments - -

1,000

Cash and cash equivalents at the start of the year 891 1,728 Cash and cash equivalents at the end of the year 846 891

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Reserves for foreign

currency translation

on conversion

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Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

January 01, 2017 2,032

Capital increaseNet Income (loss) - - - - (212) (212)Other comprehensive income - - - - - - Total comprehensive incomeCapital increase - - - - - - Increase (decrease) for other contributions by the owners - - - - - -

Distribution to shareholders - - - - - - Total changes in equity

2,032

Share capital ThCh$

Reserves for foreign

currency translation

on conversion

ThCh$


reserves ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

January 01, 2016 2,032

Capital increaseNet Income (loss) - - - - (371) (371)Other comprehensive income - - - - - - Total comprehensive incomeCapital increase - - - - - - Increase (decrease) for other contributions by the owners - - - - - -

Distribution to shareholders - - - - - - Total changes in equityClosing Balance As Of 2,032



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CONSORCIO SERVICIOS S.A.



-pervisor (currently Financial market Commission - CMF), for the subsidiary Consorcio Servicios S.A., and their accompan-ying notes regarding “accounting policies” and “transactions with related parties” are consistent in all material aspects with

Management of Consorcio Financiero S.A. and Consorcio Services S.A. are responsible for the preparation of these summary


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2017 ThCh$

2016 ThCh$

AssetsCash and cash equivalents 210,980 156,961 Current tax accounts receivable 55,393 37,254 Related party receivables 63,012 94,298

402,195 87,156 138,380 324,946

Deferred taxes receivable 7,428 5,181 Property, plant and equipment 616 937 Total assets 878,004 706,733

Accounts payable to related companies: 351,933 Current tax liabilities 67,973 39,704

353,082 45,406 - -

27,513 20,316 448,568 457,359

EquityShare capital 269 269

429,167 249,105 Total equity 429,436 249,374

878,004 706,733


2017 ThCh$

2016 ThCh$

Revenue from ordinary activities 706,516 - Gross margin 706,516 Other income 647,296 Administration expenses (465,480) (494,455)Other expenses, by function (2,116) (12,713) Net operating income 238,920 140,128 Indexation adjustments 1,066 32,017

239,986 172,146 Income tax expense (59,924) (35,498) Net income from continuing operations 180,062 136,648 Net income 180,062 136,648 Net income attributable to owners of the parent company 180,062 136,648 Net income 180,062 136,648



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2017 ThCh$

2016 ThCh$

Receipts from sales of goods and services 760,853 1,599,011 311,333 227,645

1,072,186 1,826,656 Payments for operating activities

Payments to suppliers for goods and services (115,776) (823,965)Payments on contracts for brokering or trading (124,129) (415,405)Payments to and on behalf of employees (351,791) (371,300)


Dividends receivedIncome taxes paid (refunded) (72,758) (102,408)

407,732 113,578

Payments to acquire equity or debt instruments in other entities - - Acquisitions of property, plant and equipment - -

Loans from related companies 50,000 - Loan repayments (403,713) - Loans to related companies - -Other cash receipts (payments) - -

54,019 113,578 Cash and cash equivalents at the start of the year 156,961 43,383 Cash and cash equivalents at the end of the year 210,980 156,961

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Share capital ThCh$


conversion reserves

ThCh$


reserves ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

January 01, 2017 269 249,105 249,374

- - - - - 180,062 180,062 Total comprehensive income 180,062 180,062 Total changes in equity 180,062 180,062

269 429,167 429,436

Share capital ThCh$


conversion reserves

ThCh$

Financial asset


ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

January 01, 2016 269 112,457 112,726

- - - - - 136,648 136,648 Total comprehensive income 136,648 136,648 Total changes in equity 136,648 136,648 Closing Balance As Of 269 249,105 249,374



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CONSORCIO INVERSIONES LTDA.


Santiago, March 28, 2018Shareholders and Directors Consorcio Financiero SA.

-

by the Chilean Securities and Insurance Supervisor (currently Financial market Commission - CMF), for the

“transactions with related parties” are consistent in all material aspects with the information contained in the

-

parties.

transactions with related parties were included in the consolidation process of Consorcio Financiero S.A. as of

relates to Consorcio Financiero S.A. It is only intended for Senior Management and the Chilean Financial Mar-ket Commission, and it should not be used by any other party.

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2017 ThCh$

2016 ThCh$

AssetsCash and cash equivalents 15,343 12,444 Current tax accounts receivable 11,636 11,506 Related party receivables 5,708,438 4,497,028

5,007,011 2,483,627 - -

Investments accounted for using the equity method 74,553,909 61,335,502 Goodwill 4,653,726 4,653,726 Total assets 89,950,063 72,993,833

Accounts payable to related companies: 1,998,414 795,605 Current tax liabilities - -

671 658 1,999,085 796,263


33,748,213 17,500,815 Other reserves (23,575,220) (23,081,230)Total equity 87,950,978 72,197,570

89,950,063 72,993,833


2017 ThCh$

2016 ThCh$

Revenue from ordinary activities - - Gross marginOther income - - Administrative expenses (22,286) (31,442)Other expenses, by function (42,809) (20,377) Net operating incomeShare of net income of associates and joint ventures accounted for using the equity method 16,228,133 8,045,533

84,232 114,777 Indexation adjustments 170 880

16,247,440 8,109,371 Income tax expense (42) (11,125) Net income from continuing operations 16,247,398 8,098,246 Net income from discontinued operations - - Net income 16,247,398 8,098,246 Net income attributable to owners of the parent company 16,247,398 8,098,246 Net income 16,247,398 8,098,246



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2017 ThCh$

2016 ThCh$

Receipts from royalties, installments, commissions and other operating revenue - - Receipts from other operating activities 32,838 -

32,838 Payments for operating activities

Payments to suppliers for goods and services (22,285) (179,910)Payments on contracts for brokering or trading - -


Dividends received - 6,087,660 Income taxes paid (refunded) - (30,534)

6,057,126 10,553 5,877,216

- -(7,654) -

Loans from related companies 1,134,814 191,728 Loan repayments - -Loans to related companies (1,134,814) -Dividends paid - (6,074,584)

2,899 Cash and cash equivalents at the start of the year 12,444 18,084 Cash and cash equivalents at the end of the year 15,343 12,444

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Exchange variances

on conversion

reserves ThCh$

Financial asset


ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

January 01, 2017 77,777,985 17,500,815 72,197,570

Capital increaseNet income (loss) - - - - - 16,247,398 16,247,398 Other comprehensive income - - - (493,990) (493,990) - (493,990)Total comprehensive income 16,247,398 15,753,408 Capital increase - - - - - - - Increase (decrease) for other contributions by the owners - - - - - - -

Distribution to shareholders - - - - - - - Other increases (decreases) - - - - - - - Total changes in equity 16,247,398 15,753,408

77,777,985 33,748,213 87,950,978

Share capital ThCh$

Exchange variances

on conversion

reserves ThCh$

Financial asset


ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

January 01, 2016 77,777,985 15,477,153 72,779,535

Capital increaseNet income (loss) - - - - - 8,098,246 8,098,246 Other comprehensive income - - - (2,605,627) (2,605,627) - (2,605,627)Total comprehensive income 8,098,246 5,492,619 Capital increase - - - - - - - Increase (decrease) for other contributions by the owners - - - - - - -

Distribution to shareholders - - - - - (6,074,584) (6,074,584)Other increases (decreases) - - - - - - - Total changes in equity 2,023,662 Closing Balance As Of 77,777,985 17,500,815 72,197,570



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CONSORCIO INVERSIONES DOS LTDA.



Shareholders and Directors Consorcio Financiero S.A.

-

by the Chilean Securities and Insurance Supervisor (currently Financial market Commission - CMF), for the


-

related parties.



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2017 ThCh$

2016 ThCh$

AssetsCash and cash equivalents 83,343 70,134 Current tax accounts receivable - -

4,712,588 4,619,299 - -

Investments accounted for using the equity method 135,531,753 124,414,769 Goodwill (3,131,449) (3,131,449)Total assets 137,196,235 125,972,753

Accounts payable to related companies: 462,758 Current tax liabilities 17,154 20,982

672 660 17,826 484,400


55,346,218 48,402,931 Other reserves 1,958,024 (2,788,745)Total equity 137,178,409 125,488,353

137,196,235 125,972,753

ESTADO DE RESULTADOS> Al 31 de diciembre de 2017 y 2016

2017 ThCh$

2016 ThCh$

Revenue from ordinary activities 22,290 57,067 Gross margin 22,290 57,067 Other income 28 - Administrative expenses (13,280) (16,161)Other expenses, by function (4,465) (12,078) Net operating income 4,573 28,828 Share of net income of associates and joint ventures accounted for using the equity method 15,682,862 15,369,790

(831) (651)Indexation adjustments 63 681

15,686,667 15,398,648 Income tax expense (23,380) 46,880 Net income from continuing operations 15,663,287 15,445,528 Net income from discontinued operations - - Net income 15,663,287 15,445,528 Net income attributable to owners of the parent company 15,663,287 15,445,528 Net income 15,663,287 15,445,528



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2017 ThCh$

2016 ThCh$

Receipts from royalties, installments, commissions and other operating revenue 140,822,290 105,351,947 140,822,290 105,351,947

Payments for operating activitiesPayments to suppliers for goods and services (13,280) (86,030)Payments on contracts for brokering or trading (140,800,000) (100,056,000)


Dividends received 9,218,566 6,458,621

Income taxes paid (refunded) (27,144) (458,037)

9,191,422 6,000,584 9,200,432 11,210,501

- -

Loans from related companies - 1,905,679 Loan repayments (467,223) (1,455,000)Dividends paid (8,720,000) (11,600,000)

13,209 61,180 Cash and cash equivalents at the start of the year 70,134 8,954 Cash and cash equivalents at the end of the year 83,343 70,134

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conversion reserves

ThCh$

Financial asset


ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

January 01, 2017 79,874,167 48,402,931 125,488,353

Capital increase - - - - - - - Net income (loss) - - - - - 15,663,287 15,663,287 Other comprehensive income - - 4,746,769 - 4,746,769 - 4,746,769 Total comprehensive income 4,746,769 4,746,769 15,663,287 20,410,056 Capital increase - - - - - - - Increase (decrease) for other contributions by the owners - - - - - - -

Distribution to shareholders - - - - - (8,720,000) (8,720,000)Total changes in equity 4,746,769 4,746,769 6,943,287 11,690,056

79,874,167 1,958,024 1,958,024 55,346,218 137,178,409

Share capital ThCh$


conversion reserves

ThCh$

Financial asset


ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

January 01, 2016 79,874,167 44,557,403 112,971,391

Capital increase - - - - - - - Net income (loss) - - - - - 15,445,528 15,445,528 Other comprehensive income - - 8,671,434 - 8,671,434 - 8,671,434 Total comprehensive income 8,671,434 8,671,434 15,445,528 24,116,962 Capital increase - - - - - - - Increase (decrease) for other contributions by the owners - - - - - - -

Distribution to shareholders - - - - - (11,600,000) (11,600,000)Total changes in equity 8,671,434 8,671,434 3,845,528 12,516,962 Closing Balance As Of 79,874,167 48,402,931 125,488,353



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INMOBILIARIA PUNTA PITE S.A.



Shareholders and Directors Consorcio Financiero S A.

-

by the Chilean Securities and Insurance Supervisor (currently Financial market Commission - CMF), for the subsidiary Inmobiliaria Punta Pite S.A., and their accompanying notes regarding “accounting policies” and “transactions with related parties” are consistent in all material aspects with the information contained in the

Management of Consorcio Financiero S.A. and Inmobiliaria Punta Pite S.A. are responsible for the preparation

parties.



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2017 ThCh$

2016 ThCh$

ActivosCash and cash equivalents 3,327 3,614

- - 55,956 54,219

Deferred taxes receivable 112,654 104,132 Total assets 171,937 161,965

Accounts payable to related companies: - - - -

EquityShare capital 467,565 467,565

(295,628) (305,600)Total equity 171,937 161,965

171,937 161,965


2017 ThCh$

2016 ThCh$

Revenue from ordinary activities 1,735 2,223 Gross margin 1,735 2,223 Administration expenses (286) (418) Net operating income 1,449 1,805 Indexation adjustments - -

1,449 1,805 Income tax expense 8,523 9,223 Net income from continuing operations 9,972 11,028 Net income from discontinued operations - - Net income 9,972 11,028 Net income attributable to owners of the parent company 9,972 11,028 Net income 9,972 11,028



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2017 ThCh$

2016 ThCh$

Receipts from royalties, installments, commissions and other operating revenue - - Receipts from other operating activities - -

Payments for operating activitiesPayments to suppliers for goods and services (287) (417)Payments on contracts for brokering or trading - -

Payments for operating activities s

Dividends received - - Income taxes paid (refunded) - -

3,121 3,121

2,704 Cash and cash equivalents at the start of the year 3,614 910 Cash and cash equivalents at the end of the year 3,327 3,614

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Share capital ThCh$

Exchange variances

on conversion

reserves ThCh$

Financial asset


ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

January 01, 2017 467,565 161,965

Capital increaseNet Income (loss) - - - - 9,972 9,972 Other comprehensive income - - - - - - Total comprehensive income 9,972 9,972 Capital increase - - - - - - Increase (decrease) for other contributions by the owners - - - - - -

Distribution to shareholders - - - - - - Total changes in equity 9,972 9,972

467,565 171,937

Share capital ThCh$

Exchange variances

on conversion

reserves ThCh$

Financial asset


ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

January 01, 2016 467,565 150,937

Capital increaseNet Income (loss) - - - - 11,028 11,028 Other comprehensive income - - - - - - Total comprehensive income 11,028 11,028 Capital increase - - - - - - Increase (decrease) for other contributions by the owners - - - - - -

Distribution to shareholders - - - - - - Total changes in equity 11,028 11,028

467,565 161,965



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INMOBILIARIA LOTE 18



issued by the Chilean Securities and Insurance Supervisor (currently Financial market Commission - CMF),




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ts CLASSIFIED STATEMENT OF FINANCIAL POSITION > As of December 31, 2017 and 2016

As of

2017 ThCh$

As of

2016 ThCh$

Current assetsCash and cash equivalents 10,849 69,332Total current assets 10,849 69,332

Related party receivables, non-current 346,776 243,510Inventories - 164,982

3,901 3,901350,677 412,393

Total assets 361,526 481,725

NET EQUITY AND LIABILITIES > As of December 31, 2017 and 2016

As of

2017 ThCh$

As of

2016 ThCh$

Trade and other payables - -

Related party payables, non-current 652,874 621,077652,874 621,077

Net equityShare capital 963,810 963,810Retained losses (1,255,158) (1,103,162)

Minority interests - -Total net equity

361.526 481.725



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COMPREHENSIVE INCOME STATEMENT> For the years ended December 31, 2017 and 2016

01.01.2017 31.12.2017

THCH$

01.01.2016 31.12.2016

THCH$

Revenue from ordinary activities 120,500 -Cost of sales (164,982) -Gross marginAdministrative expenses (96,973) (145,595)Indexation adjustments (10,541) (11,519)

Income tax expense - (14,229)

Owners of the parent company (151,996) (171,343)Minority interests - -

COMPREHENSIVE INCOME STATEMENT > For the years ended December 31, 2017 and 2016

01.01.2017 31.12.2017

THCH$

01.01.2016 31.12.2016

THCH$

Statement of comprehensive income(151,996) (171,343)

Foreign currency translation gains (losses), net of tax - -Other components of other comprehensive income, net of taxIncome tax related to components of other comprehensive income - -Other comprehensive incomeTotal comprehensive income

Owners of the parent company (151,996) (171,343)Minority interests - -Total comprehensive income

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ts STATEMENT OF CASH FLOWS - DIRECT METHOD > For the years ended December 31, 2017 and 2016

01.01.2017 31.12.2017

THCH$

01.01.2016 31.12.2016

THCH$

Receipts from operating activities - -

Receipts from the sale of goods and services - -

Payments for operating activities - -

Payments to suppliers for goods and services (79,739) (373,175)

Income taxes paid (refunded) - -

Other cash receipts (payments) - -

Cash Flow resulting from operating activities

Loans from related companies 34,122 316,158

Loan payments to related companies (12,866) -

21,256 316,158

- -

Cash and cash equivalents at the start of the year 69,332 126,349

Cash and cash equivalents at the end of the year 10,849 69,332



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STATEMENT OF CHANGES IN NET EQUITY> As of December 31, 2017 and 2016

Concept

Share capital ThCh$


conversion reserves

ThCh$

Financial asset


ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

Opening balances as of January 01, 2017 963,810 - - - M$ (1,103,162) (139,352)

Changes in equityNet loss for the year - - - - - (151,996) (151,996)Other comprehensive income - - - - - - -Increase (decrease) due to transfers and other changes - - - - - - -

Total changes in equity

963,810

Concept

Share capital ThCh$

Exchange variances

on conversion

reserves ThCh$

Financial asset


ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

Opening balances as of January 1, 2016 963,810 - - - - (931,819) 31,991

Changes in equityNet loss for the year - - - - - (171,343) (171,343)Other comprehensive income - - - - - -Increase (decrease) due to transfers and other changes - - - - - - -

Total changes in equity

963,810

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CONSTRUCTORA E INMOBILIARIA PRESIDENTE RIESCO S.A.



Shareholders and Directors Consorcio Financiero S.A.

-

the Chilean Securities and Insurance Supervisor (currently Financial market Commission - CMF), for the sub-sidiary Constructora e Inmobiliaria Presidente Riesco S.A., and their accompanying notes regarding “accoun-ting policies” and “transactions with related parties” are consistent in all material aspects with the information

Management of Consorcio Financiero S.A. and Constructora e Inmobiliaria Presidente Riesco S.A. are res-

transactions with related parties.

-counting policies and transactions with related parties were included in the consolidation process of Consorcio



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CLASSIFIED STATEMENT OF FINANCIAL POSITION > As of December 31, 2017 and 2016

As of

2017 ThCh$

As of

2016 ThCh$

Current assetsCash and cash equivalents - 63,070Trade and other receivables 192,198 -Total current assets 192,198 63,070

Inventories 5,930,955 4,520,514Deferred taxes receivable 11,587 220,582

5,942,542 4,741,096Total assets 6,134,740 4,804,166

NET EQUITY AND LIABILITIES > As of December 31, 2017 and 2016

As of

2017 ThCh$

As of

2016 ThCh$

Trade and other payables 110,214 -110,214

Related party payables, non-current 6,456,486 4,853,6286,456,486 4,853,628

Net equityShare capital 34,572 34,572Retained losses (466,532) (84,034)

Minority interests - -Total net equity

6,134,740 4,804,166

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ts COMPREHENSIVE INCOME STATEMENT > For the years ended December 31, 2017 and 2016

01.01.2017 31.12.2017

THCH$

01.01.2016 31.12.2016

THCH$

Revenue from ordinary activities - -

Cost of sales - -

Gross margin

Administrative expenses (83,721) (31,499)

Indexation adjustments (89,782) (124,446)

Income tax expense (208,995) 50,964


Owners of the parent company (382,498) (104,981)

Minority interests - -

Total net income for the year

COMPREHENSIVE INCOME STATEMENT > For the years ended December 31, 2017 and 2016

01.01.2017 31.12.2017

THCH$

01.01.2016 31.12.2016

THCH$

Statement of comprehensive income

Net income for the year (382,498) (104,981)

Foreign currency translation gains (losses), net of tax - -

Other components of other comprehensive income, net of tax

Income tax related to components of other comprehensive income - -

Other comprehensive income


Owners of the parent company (382,498) (104,981)

Minority interests - -


CONSTRUCTORA E INMOBILIARIA PRESIDENTE RIESCO S.A.


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STATEMENT OF CASH FLOWS - DIRECT METHOD > For the years ended December 31, 2017 and 2016

01.01.2017 31.12.2017

THCH$

01.01.2016 31.12.2016

THCH$

Receipts from operating activities - -Receipts from the sale of goods and services - -Payments for operating activities - -Payments to suppliers for goods and services (73,078) -Acquisition of inventory (1,410,441) (373,175)Income taxes paid (refunded) - -Other cash receipts (payments) - (6,262)Cash Flow resulting from operating activities

Loans from related companies 1,469,542 316,158Loan payments to related companies (49,093) -

1,420,449 316,158

- -Net decrease in cash and cash equivalentsCash and cash equivalents at the start of the year 63,070 126,349Cash and cash equivalents at the end of the year 63,070

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ts STATEMENT OF CHANGES IN NET EQUITY> As of December 31, 2017 and 2016

Concept

Share capital ThCh$

Exchange variances

on conversion

reserves ThCh$

Financial asset


ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

Opening balances as of January 01, 2017 34,572 - - - - (84,034) (49,462)

Net loss for the year - - - - - (382,498) (382,498)Other comprehensive income - - - - - - -Total changes in equity

34,572

Concept

Share capital ThCh$

Exchange variances

on conversion

reserves ThCh$

Financial asset


ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

Opening balances as of January 1, 2016 34,572 - - - - 20,947 55,519

Net loss for the year - - - - - (104,981) (104,981)Other comprehensive income - - - - - - -Total changes in equity

34,572


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INVERSIONES CONTINENTAL BÍO BÍO SPA.

DeloitteAuditores y Consultores Limitada Rosario Norte 407Chilean ID (RUT): 80.276.200-3Las Condes, SantiagoChilePhone: (56) 227 297 000Fax: (56) 223 749 [email protected] AUDITOR’S REPORT

Shareholders and DirectorsInversiones Continental Bio Bio SpA.

-ments.

-ments in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board (“IASB”). This responsibility includes designing, implementing and maintaining internal

Auditor’s Responsibility

conducted our audits in accordance with generally accepted auditing standards in Chile. Those principles

-

our audit opinion.

Deloitte Touche Tohmatsu Limited is a private company limited by guarantee and incorporated in England & Wales under number 07271800 with its registered address at: Hill House, 1 Little New Street, London, EC4A 3TR, United Kingdom.

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INVERSIONES CONTINENTAL BÍO BÍO SPA

Opinion

Standards Board (“IASB”).

Other matters

Santiago, Chile


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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION > As of December 31, 2017 and 2016

2017 ThCh$

2016 ThCh$

AssetsCurrent assetsCash and cash equivalents 204,612 220,957Current tax accounts receivable 6,667 2,591Related party receivables 419,938 747,288Total current assets 631,217 970,836

121,407 -Goodwill - 9Total property, plant and equipment, net 53,330 190Intangible assets 327,990 254,415Deferred taxes receivable, net 142,596 86,088

645,323 340,702Total assets 1,276,540 1,311,538

Trade and other payables 29,457 3,951Current tax liabilities 4,980 544Other current provisions 4,683 -

39,120 4,495

Related party payables, non-current 17,230 411,78617,230 411,78656,350 416,281

Equity:Share capital 1,597,612 1,003,500Retained losses (377,422) (108,243)Total net equity 1,220,190 895,257

1,276,540 1,311,538

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ts CONSOLIDATED COMPREHENSIVE INCOME STATEMENT > For the years ended December 31, 2017 and 2016

2017 ThCh$

2016 ThCh$

Administration expenses (348,173) (182,045)

Other income - 249Interests earned from loans 13,485 4,442Financial expenses (535) -

13,773 3,52126,723 8,212

Income tax 86,211 80,548Net loss for the year

DIRECT CONSOLIDATED CASH FLOW STATEMENT > For the years ended December 31, 2017 and 2016 > 55 day period ended December 31, 2016

2017 ThCh$

2016 ThCh$

Payments for operating activitiesPayments for other operating activities (47,486) (182,045)

Loans to related companies (394,556) (739,341)Trade and other payables 25,506 10,962Payments to related companies (394,556) (268,490)Acquisitions of property, plant and equipment (53,140) (250)Acquisitions of intangible assets (73,575) (218,144)

Loans from related companies 327,350 614,774Subscribed capital collections 594,112 1,003,391

921,462 1,618,165 220,857

Net increase in cash and cash equivalents 220,857 Cash and cash equivalents at the start of the year 220,957 100

204,612 220,957



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CONSOLIDATED STATEMENT OF CHANGES IN NET EQUITY> For the years ended December 31, 2017 and 2016

Share capital ThCh$


conversion reserves

ThCh$


reserves ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

Opening balances as of January 01, 2017 1,003,500 - - - - (108,243) 895,257

Comprehensive IncomeNet loss for the year - - - - - (235,239) (235,239)Other comprehensive income - - - - - (33,940) (33,940)Total comprehensive incomeCapital increase 594,112 - - - - - 594,112Total changes in equity 594,112 - - - - (269,179) 324,933

12/31/2017 1,597,612 1,220,190

Share capital ThCh$


conversion reserves

ThCh$


reserves ThCh$

Other miscellaneous

reserves ThCh$

Other reserves

ThCh$

Retained earnings

ThCh$

Equity


company ThCh$

Opening balances as of January 1, 2016 109 - - - - (14,958) (14,849)

Comprehensive Income - - - - -Net loss for the year - - - - - (93,285) (93,285)

1,003,391 1,003,391Total comprehensive income 1,003,391 910,106Total changes in equity 1,003,391 910,106

12/31/2016 1,003,500 895,257

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ts Statement of Responsibility We, the undersigned in our role as Directors and CEO of Consorcio Financiero S.A. respectively, do hereby declare under oath that

all the information contained in this Annual Report is a faithful expression of the truth, for which we assume the corresponding

legal liability.

Marcos Büchi Buc7.383.017-6

Chairman

’ Patricio Parodi Gil8.661.203-8

17.086.940-0

Director

Ramiro Mendoza Zúñiga7.578.740-5

Director

Sergio Restrepo Isaza0-E (Extranjero)

Director

José Antonio Garcés Silva3.984.154-1

Director

Pedro Hurtado Vicuña6.375.828-0

Director

3.931.817-2

Director

Juan Hurtado Vicuña5.715.251-6

Director

Hernán Büchi Buc5.718.666-6

Director

’

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EDITION

Nexos Comunicacioneswww.nexos.cl

DESIGN

Diseñadores Asociadoswww.da.cl

CONSORCIO FINANCIERO S.A.

Documents

Transcript of CONSORCIO FINANCIERO S.A.