ITAÚ CORPBANCA

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Itaú Corpbanca : Consolidated Financial Statements (Form 6-K)

06/14/2021 | 08:40am

ITAÚ CORPBANCA and subsidiaries

Interim Consolidated Financial Statements (unaudited)

$

=

Amounts expressed in Chilean pesos

MCh$

=

Amounts expressed in millions of Chilean pesos

US$

=

Amounts expressed in US dollars

ThUS$

=

Amounts expressed in thousands of US dollars

MUS$

=

Amounts expressed in millions of US dollars

COP$

=

Amounts expressed in Colombian pesos

MCOP$

=

Amounts expressed in millions of Colombian pesos

UF

=

Amounts expressed in Unidades de Fomento

(a Chilean inflation-indexed, peso-denominated monetary unit that is set daily based on changes in the Chilean Consumer Price Index)

Itaú Corpbanca and subsidiaries- Interim Consolidated Financial Statements- March 31, 2021

1

ITAÚ CORPBANCA and subsidiaries

Interim Consolidated Statements of Financial Position (unaudited)

(In millions of Chilean pesos - MCh$)

As of March 31,

As of December 31,

Notes

2021

2020

MCh$

MCh$

ASSETS

Cash and deposits in banks

5

3,291,402

3,089,072

Cash items in process of collection

5

434,518

173,192

Trading investments

6

439,171

580,369

Investments under resale agreements

7

68,731

105,580

Financial derivative contracts

8

2,814,421

3,982,803

Interbank loans, net

9

15,800

7,115

Loans and accounts receivable from customers, net

10

21,813,095

21,685,269

Available for sale investments

11

2,804,647

3,964,720

Held to maturity investments

11

100,338

111,643

Investments in companies

12

11,966

11,983

Intangibles

13

709,597

718,683

Fixed assets

14

52,794

56,020

Right of use asset under lease agreements

15

161,617

170,603

Current taxes

16

77,755

64,699

Deferred taxes

16

303,519

314,112

Other assets

17

515,484

602,769

TOTAL ASSETS

33,614,855

35,638,632

LIABILITIES

Deposits and other demand liabilities

18

6,121,358

6,197,406

Cash in process of being cleared

5

397,802

154,232

Obligations under repurchase agreements

7

344,587

638,851

Time deposits and other time liabilities

18

10,534,033

11,433,064

Financial derivative contracts

8

2,534,562

3,673,591

Interbank borrowings

19

3,894,846

3,798,978

Debt instruments issued

20

6,266,274

6,204,856

Other financial liabilities

20

23,393

13,123

Lease contracts liabilities

15

143,887

151,885

Current taxes

16

1,617

1,766

Deferred taxes

16

120

237

Provisions

21

278,681

282,283

Other liabilities

22

684,052

700,034

TOTAL LIABILITIES

31,225,212

33,250,306

EQUITY

Attributable to equity holders of the Bank

Capital

24

1,862,826

1,862,826

Reserves

24

470,873

1,195,849

Valuation accounts

24

(76,743)

25,873

Retained (losses) earnings:

63,155

(769,137)

Retained earnings from prior years

24

-

156,342

Income for the period/ (loss) for the year

24

90,222

(925,479)

Less: Provision for mandatory dividends

24

(27,067)

-

Total equity attributable to equity holders of the Bank

2,320,111

2,315,411

Non-controlling interest

24

69,532

72,915

TOTAL EQUITY

2,389,643

2,388,326

TOTAL LIABILITIES AND EQUITY

33,614,855

35,638,632

The explanatory notes are an integral part of these Interim Consolidated Financial Statements (unaudited).

Itaú Corpbanca and subsidiaries - Interim Consolidated Financial Statements - March 31, 2021

2

ITAÚ CORPBANCA and subsidiaries

Interim Consolidated Statements of Income for the period (unaudited)

(In millions of Chilean pesos - MCh$)

For the three-month periods

Notes

ended March 31,

2021

2020

MCh$

MCh$

Interest income

25

365,094

442,158

Interest expense

25

(137,260)

(224,188)

Net interest income

227,834

217,970

Fee and commission income

26

52,160

57,605

Fee and commission expense

26

(15,434)

(18,373)

Net fee and commission income

36,726

39,232

Net income from financial operations

27

59,386

182,485

Net foreign exchange income (loss)

28

1,696

(85,170)

Other operating income

6,430

16,568

Net operating profit before provision for loan losses

332,072

371,085

Provision for loan losses

29

(39,385)

(103,740)

NET OPERATING PROFIT

292,687

267,345

Personnel salaries and expenses

30

(72,236)

(72,846)

Administrative expenses

31

(63,118)

(61,723)

Depreciation and amortization

32

(24,575)

(32,360)

Impairment

32

-

-

Other operating expenses

(13,043)

(8,357)

TOTAL OPERATING EXPENSES

(172,972)

(175,286)

OPERATING INCOME

119,715

92,059

Income from investments in companies

12

1,440

1,148

Operating income before income taxes

121,155

93,207

Income taxes

16

(29,476)

(65,560)

CONSOLIDATED INCOME FOR THE PERIOD

91,679

27,647

Attributable to:

Equity holders of the Bank

24

90,222

27,130

Non-controlling interest

24

1,457

517

Earnings per share attributable to equity holders of the Bank (in Chilean pesos)

Basic earnings (losses) per share

24

0.176

0.053

Diluted earnings (losses) per share

24

0.176

0.053

The explanatory notes are an integral part of these Interim Consolidated Financial Statements (unaudited).

Itaú Corpbanca and subsidiaries - Interim Consolidated Financial Statements - March 31, 2021

3

ITAÚ CORPBANCA and subsidiaries

Interim Consolidated Statements of Other Comprehensive Income for the period (unaudited)

(In millions of Chilean pesos - MCh$)

For the three-month periods

Notes

ended March 31,

2021

2020

MCh$

MCh$

CONSOLIDATED INCOME FOR THE PERIOD

24

91,679

27,647

OTHER COMPREHENSIVE INCOME (LOSS) WHICH MAY BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS

Available for sale investments

24

(39,436)

(25,315)

Exchange differences on investment in Colombia and New York branch

24

(26,110)

(35,408)

Gain from net investments in foreign operations hedge

24

(9,655)

45,843

Gain (loss) from cash flows hedge

24

(7,391)

(21,172)

Other comprehensive income before income taxes

(82,592)

(36,052)

Income taxes related to available for sale investments

24

12,208

5,635

Income taxes related to net investment in foreign operations hedge

24

2,607

(12,378)

Income taxes related to cash flows hedge

24

4,108

4,296

Income taxes on other comprehensive income

18,923

(2,)

Other comprehensive income which may be reclassified subsequently to profit or loss, net of income taxes

(63,669)

(38,499)

OTHER COMPREHENSIVE INCOME WHICH MAY NOT BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS

Defined benefits obligations

24

520

726

Income taxes related to defined benefits obligations

24

(146)

(202)

Other comprehensive income which may not be reclassified subsequently to profit or loss, net of income taxes

374

524

TOTAL OTHER COMPREHENSIVE INCOME FOR THE PERIOD

24

(63,295)

(37,975)

CONSOLIDATED COMPREHENSIVE INCOME FOR THE PERIOD

24

28,384

(10,328)

Attributable to:

Equity holders of the Bank

24

31,767

(3,002)

Non-controlling interest

24

(3,383)

(7,326)

The explanatory notes are an integral part of these Interim Consolidated Financial Statements (unaudited).

Itaú Corpbanca and subsidiaries - Interim Consolidated Financial Statements - March 31, 2021

4

ITAÚ CORPBANCA and subsidiaries

Interim Consolidated Statements of Changes in Equity for the period (unaudited)

(In millions of Chilean pesos - MCh$)

Reserves

Retained earning

Retained

Income for

Provision

Total attributable

Reserves

Other non-

earnings

the year/

for

to equity

Non-

Number of

from

earnings

Valuation

from

loss for

mandatory

holders of

controlling

Total

Note

shares

Capital

earnings

reserves

accounts

prior years

the period

dividends

the Bank

interest

equity

Millions

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Equity as of December 31, 2019

512,407

1,862,826

451,011

744,838

42,140

156,342

127,065

(38,120)

3,346,102

94,283

3,440,385

Distribution of income from previous year

24.b

-

-

-

-

-

127,065

(127,065)

-

-

-

-

Equity as of January 1, 2020

512,407

1,862,826

451,011

744,838

42,140

283,407

-

(38,120)

3,346,102

94,283

3,440,385

Dividends paid

-

-

-

-

-

(127,065)

-

38,120

(88,945)

-

(88,945)

Provision for mandatory dividends

-

-

-

-

-

-

-

(8,139)

(8,139)

-

(8,139)

Comprehensive income for the period

-

-

-

-

(30,132)

-

27,130

-

(3,002)

(7,326)

(10,328)

Equity as of March 31, 2020

512,407

1,862,826

451,011

744,838

12,008

156,342

27,130

(8,139)

3,246,016

86,957

3,332,973

Equity as of December 31, 2020

512,407

1,862,826

451,011

744,838

25,873

156,342

(925,479)

-

2,315,411

72,915

2,388,326

Distribution of income from previous year

24.b

-

-

(451,011)

(318,126)

-

(156,342)

925,479

-

-

-

-

Equity as of January 1, 2021

512,407

1,862,826

-

426,712

25,873

-

-

-

2,315,411

72,915

2,388,326

Dividends paid

-

-

-

-

-

-

-

-

-

-

-

Reclassifications due to the discontinuation of the net investment in Itaú Corpbanca Colombia hedge

-

-

-

44,161

(44,161)

-

-

-

-

-

-

Provision for mandatory dividends

-

-

-

-

-

-

-

(27,067)

(27,067)

-

(27,067)

Comprehensive income for the period

-

-

-

-

(58,455)

-

90,222

-

31,767

(3,383)

28,384

Equity as of March 31, 2021

512,407

1,862,826

-

470,873

(76,743)

-

90,222

(27,067)

2,320,111

69,532

2,389,643

The explanatory notes are an integral part of these Interim Consolidated Financial Statements (unaudited).

Itaú Corpbanca and subsidiaries - Interim Consolidated Financial Statements -March 31, 2021

5

ITAÚ CORPBANCAand subsidiaries

Interim Consolidated Statements of Cash Flows for the period (unaudited)

(In millions of Chilean pesos - MCh$)

For the three-month periods

ended March 31,

Notes

2021

2020

MCh$

MCh$

CASH FLOWS FROM OPERATING ACTIVITIES:

Operating income before income taxes

121,155

93,207

Debits (credits) to income that do not represent cash flows:

Depreciation and amortization

32

24,575

32,360

Provisions for loans and accounts receivable from customers and interbank loans

29

54,357

117,895

Provisions and write-offs of assets received in lieu of payment

1,731

1,307

Provisions for contingencies

-

300

Mark to market of trading instruments

27

(63,844)

(163,086)

Adjustment (profit) loss for instruments available for sale

27

(10,475)

(18,060)

Adjustment (profit) loss on sale of loan portfolio

27

112

458

Net interest income

(227,834)

(217,970)

Fee and commission income

26

(52,160)

(57,605)

Fee and commission expense

26

15,434

18,373

Net foreign exchange (gain) loss

28

(1,696)

85,170

Net loss on sale of fixed assets

(34)

101

Net gain on sale of assets received in payment

(717)

(427)

Net gain on sale of assets held for sale

-

(970)

Net gain on sale of participation in companies

12

-

-

Net gain from investment on associates

(507)

-

Increase on deferred net tax asset and liability

16

(25,357)

(13,906)

Other debits (credits) that do not represent cash flows

(11,243)

(34,291)

Subtotals

(176,503)

(157,144)

Loans and accounts receivable from customers and interbank loans

(136,511)

(435,305)

Investments under resale agreements

5c)i)

419

(50,111)

Obligations under repurchase agreements

5c)i)

(294,264)

98,739

Trading investments

5c)ii)

(9,477)

(154,461)

Available for sale investments

5c)ii)

704,096

(133,722)

Held to maturity investments

5c)ii)

11,305

(36,486)

Other assets and liabilities

(316,429)

(274,670)

Time deposits and other time liabilities

(899,031)

1,088,093

Deposits and other demand liabilities

(76,048)

393,814

Dividends received from investments in companies

12

1,275

526

Foreign borrowings obtained

5c)iii)

424,698

1,052,836

Repayment of foreign borrowings

5c)iii)

(625,858)

(836,614)

Interest paid

(96,223)

(186,214)

Interest received

349,700

409,609

Net fee and commission income

28,047

31,452

Taxes paid

(64,899)

(56,774)

Repayment of other borrowings

10,270

(4,324)

Proceeds from sale of assets received in lieu of payment

4,241

2,346

Net cash flows provided by (used in) operating activities

(1,161,192)

751,590

CASH FLOWS FROM INVESTMENT ACTIVITIES:

Purchase of fixed assets and intangible assets

13-14

(7,651)

(13,307)

Sales of fixed assets

11

108

Proceeds from sale of assets held for sale

-

1,550

Proceeds from sale of investments in companies

12

-

(338)

Net cash flows used in investing activities

(7,640)

(11,987)

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowing obtained from Chilean Central Bank

146,121

-

Debt instruments issued

156,411

166,836

Redemption of debt issued

(75,417)

(84,273)

Dividends paid

(13)

(87,649)

Payments of lease liabilities

15

(8,137)

(8,419)

Net cash flows (used in) provided by financing activities

218,965

(13,505)

Effect of changes in exchange rates

42,815

132,237

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(907,052)

858,335

Cash and cash equivalents at the beginning of the period

4,506,256

1,,939

Cash and cash equivalents at end of the period

5

3,599,204

2,306,274

Net increase (decrease) in cash and cash equivalents

(907,052)

858,335

Cash flows

Changes other than cash flows

As of

As of

January 1,

Changes other

Currency

March31,

2021

Received

Paid

than cash

Acquisition

Interest

exchange effects

2021

Notes

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Debt instruments issued

Borrowing obtained from Chilean Central Bank

2,257,226

149,974

-

-

-

166

-

2,407,366

Mortgage finance bonds

30,846

-

(2,508)

-

-

345

-

28,683

Bonds (senior and subordinated)

6,174,010

156,411

(72,909)

(87,808)

-

100,568

(32,681)

6,237,591

Lease contracts liabilities

151,885

-

(8,137)

1,442

(825)

1,121

(1,599)

143,887

Totals

8,613,967

306,385

(83,554)

(86,366)

(825)

102,200

(34,280)

8,817,527

Dividends approved and paid in 2021

24

-

-

-

-

-

-

-

-

Dividends approved in prior years and paid in 2021

-

-

(13)

-

-

-

-

-

Total Dividends paid

-

-

(13)

-

-

-

-

-

Subtotal cash flows from (used in) financing activities

-

306,385

(83,567)

-

-

-

-

-

Total cash flows from financing activities, net

-

222,818

-

-

-

-

-

-

The explanatory notes are an integral part of these Interim Consolidated Financial Statements (unaudited).

Itaú Corpbanca and subsidiaries - Interim Consolidated Financial Statements - March 31, 2021

6

ITAÚ CORPBANCA and subsidiaries

Notes to the Consolidated Financial Statements (unaudited)

Page

Note 1

GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

8

Note 2

ACCOUNTING CHANGES

42

Note 3

SIGNIFICANT EVENTS

43

Note 4

REPORTING SEGMENTS

45

Note 5

CASH AND CASH EQUIVALENTS

48

Note 6

TRADING INVESTMENTS

50

Note 7

INVESTMENTS UNDER RESALE AGREEMENTS AND OBLIGATIONS UNDER REPURCHASE AGREEMENTS

51

Note 8

FINANCIAL DERIVATIVE CONTRACTS AND HEDGE ACCOUNTING

53

Note 9

INTERBANK LOANS

56

Note 10

LOANS AND ACCOUNTS RECEIVABLE FROM CUSTOMERS

57

Note 11

INVESTMENT INSTRUMENTS

59

Note 12

INVESTMENTS IN COMPANIES

61

Note 13

INTANGIBLE ASSETS

63

Note 14

FIXED ASSETS

66

Note 15

ASSETS FOR RIGHT OF USE AND LEASE CONTRACTS LIABILITIES

69

Note 16

CURRENT TAXES AND DEFERRED TAXES

72

Note 17

OTHER ASSETS

77

Note 18

DEPOSITS AND OTHER DEMAND LIABILITIES AND TIME DEPOSITS

78

Note 19

INTERBANK BORROWINGS

79

Note 20

DEBT INSTRUMENTS ISSUED AND OTHER FINANCIAL LIABILITIES

81

Note 21

PROVISIONS

85

Note 22

OTHER LIABILITIES

86

Note 23

CONTINGENCIES, COMMITMENTS, AND RESPONSIBILITIES

87

Note 24

EQUITY

92

Note 25

INTEREST INCOME AND INTEREST EXPENSE

98

Note 26

FEE AND COMMISSION INCOME AND EXPENSE

99

Note 27

NET INCOME (EXPENSE) FROM FINANCIAL OPERATIONS

100

Note 28

NET FOREIGN EXCHANGE INCOME (LOSS)

101

Note 29

PROVISION FOR LOAN LOSSES

102

Note 30

PERSONNEL SALARIES AND EXPENSES

103

Note 31

ADMINISTRATIVE EXPENSES

104

Note 32

DEPRECIATION, AMORTIZATION, AND IMPAIRMENT

105

Note 33

RELATED PARTY TRANSACTIONS

106

Note 34

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

108

Note 35

RISK MANAGEMENT

120

Note 36

SUBSEQUENT EVENTS

134

Itaú Corpbanca and subsidiaries - Interim Consolidated Financial Statements - March 31, 2021

7

Table of Contents

Itaú Corpbanca and subsidiaries

Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies

General Information - Background of Itaú Corpbanca and subsidiaries

Itaú Corpbanca (the 'Bank') is a corporation incorporated under the laws of the Republic of Chile and regulated by the Commission for the Financial Market (onwards 'CMF') which, as of June 1, 2019, assumed the functions of the Superintendency of Banks and Financial Institutions ('SBIF'), in accordance with the Decree with Force of Law (DFL) No. 3 dated January 12, 2019, which sets a new consolidated, systematized and agreed text for the General Bank Law. The entity is the merger result between Banco Itaú Chile and Corpbanca (the latter is the legal successor) which was consummated on April 1, 2016, the date on which the Bank was renamed 'Itaú Corpbanca'1.

The current ownership structure is 39.22% owned by Itaú Unibanco, 27.16% owned by the Saieh Family and 33.62% owned by minority shareholders. Itaú Unibanco is the sole controlling shareholder of the merged bank. Within this context and without limiting the above, Itaú Unibanco and CorpGroup have signed a shareholders' agreement relating to corporate governance, dividend policy (based on performance and capital metrics), and transfer of shares, liquidity, and other matters.

Itaú Corpbanca is headquartered in Chile and has operations in Colombia and Panama. In addition, Itaú Corpbanca has a branch in New York and a representative office in Lima2. The Bank has total consolidated assets for Ch$33,614,855 million (MUS$46,675) and equity for Ch$2,389,643 million (MUS$3,318). Focused on large and medium size companies and people, Itaú Corpbanca offers universal banking services.

The legal address of Itaú Corpbanca is Rosario Norte No 660, Las Condes, Santiago, Chile, and its web site is www.itau.cl

The Interim Consolidated Financial Statements as of March 31, 2021, were approved by the Board of Directors on April 28, 2021.

Significant Accounting Policies and Others

a)Accounting period

The Interim Consolidated Financial Statements are referred as of March 31, 2021 and December 31, 2020 and comprise the three month periods ended March 31, 2021 and 2020.

b)Basis of preparation of the Consolidated Financial Statements

These Interim Consolidated Financial Statements have been prepared in accordance with the Compendium of Accounting Standards (onwards 'CAS') issued by the SBIF, currently integrated with the CMF. Banks must use the accounting criteria set forth in the CAS and in everything that is not dealt with by it and does not contradict its instructions, they must adhere to International Financial Reporting Standards (IFRS) issued by the

1 The business combination was a 'reverse acquisition' as established in IFRS 3, 'Business Combinations', in which Banco Itaú Chile is the successor for accounting purposes and Corpbanca is the legal successor.

2 None of the markets in which Itaú Corpbanca and subsidiaries operates is facing an economy with a hyperinflationary currency.

Itaú Corpbanca and subsidiaries - Interim Consolidated Financial Statements - March 31, 2021

8

Table of Contents

Itaú Corpbanca and subsidiaries

Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

International Accounting Standards Board (IASB). If there are discrepancies between IFRS and the accounting criteria set forth in the CAS, the latter will prevail.

Additionally, these Interim Consolidated Financial Statements in relation to the application of IAS 34 'Interim Financial Information', are prepared mainly with the intention of updating the content of the latest Annual Consolidated Financial Statements, emphasizing new activities, events and circumstances occurred during the nine-month periods ended March 31, after the end of the year, and not duplicating the information previously published in the last Consolidated Financial Statements.

As a result, these Interim Consolidated Financial Statements do not include all the information that a complete set of Financial Statements prepared in accordance with the international accounting and financial information standards agreed by the IASB would require, so for an adequate understanding of the information included in these Interim Consolidated Financial Statements, these must be read in conjunction with the Annual Consolidated Financial Statements, corresponding to the immediately preceding annual period.

Notes to these Interim Consolidated Financial Statements contain information additional to that disclosed in the Interim Consolidated Statements of Financial Position, Interim Consolidated Statements of Income, Interim Consolidated Statements of Other Comprehensive Income, Interim Consolidated Statements of Changes in Equity, and Interim Consolidated Statements of Cash Flows. On them descriptive information and disaggregated information is presented.

c)Consolidation criteria

These Interim Consolidated Financial Statements comprise the preparation of the separate (individual) Financial Statements of the Bank and the controlled entities which participate in consolidation as of March 31, 2021 and December 31, 2020 and for the three month periods ended March 31, 2021 and 2020 included in the Interim Consolidated Financial Statements, and include necessary adjustments and reclassifications to standardize the accounting policies and valuation criteria applied by the Bank, in accordance with standards established in the Compendium of Accounting Standards issued by the CMF.

Intercompany balances and any unrealized income or loss arising from intercompany transactions are eliminated upon consolidation during the preparation of the Interim Consolidated Financial Statements.

For consolidation purposes, the financial statements of the branch in New York have been converted into Chilean pesos at the exchange rate of $720.19 for US$1 as of March 31, 2021 ($853.82 as of March 31, 2020 and $710.73 as of December 31, 2020), same situation for Colombian subsidiaries using an exchange rate of $0.1962 for COP $1 as of March 31, 2021 ($0.2111 as of March 31, 2021 and $0.2078 as of December 31, 2020), in accordance with IAS 21 'Effects of variations in foreign currency exchange rates', relations with the valuation of investments abroad in countries with economic stability.

Assets, liabilities, income, and results of operations of subsidiaries, net of consolidation adjustments, represent 18%,19%,29%, and 22%, respectively, of total consolidated assets, liabilities, income, and operating results as of March 31, 2021 (18% and 19% as of December 31, 2020 of total assets and liabilities; 28% and 17% as of March 31,2020, of income, and results of operations, net of consolidation adjustments).

(i) Controlled entities

The Bank, regardless of the nature of its involvement with an entity (the investee), shall determine whether it is a parent by assessing whether it controls the investee.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

The Bank controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

Thus, the Bank controls an investee if and only if has all the following:

1) Power over the investee, which is related to the existing rights that give the Bank the current ability to direct the relevant activities, these being those that significantly affect the investee's returns;
2) Exposure, or rights, to variable returns from its involvement with the investee;
3) Ability to use its power over the investee to affect the amount of the Bank's returns;

When the Bank has less than a majority of the voting rights over an investee, but such voting rights are sufficient to have the actual ability to direct the relevant activities, then it will be concluded that the Bank has control over the investee.

The Bank considers all relevant factors and circumstances when assessing if the voting rights are sufficient to obtain control, these include:

The amount of voting rights held by the Bank in relation to the amount and dispersion of those held by other vote holders.
Potential voting rights held by the Bank, other voting holders or other parties.
Rights that arise from other contractual agreements.
Any additional facts and circumstances that indicate that the Bank has, or does not have, the current ability to direct the relevant activities at the time those decisions need to be made, including the patterns of voting behavior in previous shareholders meetings.

The Bank reassesses whether or not it has control over an investee when facts and circumstances indicate that there are changes in one or more of the control elements listed above.

The interim financial statements of the controlled companies are consolidated with those of the bank through the global integration method (line by line). In accordance with this method, all balances and transactions between consolidated companies are eliminated through the consolidation process. Therefore, the Interim Consolidated Financial Statements refer to assets, liabilities, equity, income, expenses, and cash flows of the parent and its subsidiaries presented as if they were a single economic entity. The Bank prepares Consolidated Financial Statements using uniform accounting policies for transactions and other events that, being similar, have occurred in similar circumstances.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

The following table details the entities controlled by Itaú Corpbanca, therefore, they are part of the consolidation perimeter:

Ownership percentage

Functional

As of March 31, 2021

As of December 31, 2020

As of March 31, 2020

Market

Country

currency

Direct

Indirect

Total

Direct

Indirect

Total

Direct

Indirect

Total

%

%

%

%

%

%

%

%

%

%

Itaú Corredores de Bolsa Ltda. (1)

Domestic

Chile

$

99.990

0.010

100.000

99.990

0.010

100.000

99.990

0.010

100.000

Itaú Administradora General de Fondos S.A. (1)

Chile

$

99.994

0.006

100.000

99.994

0.006

100.000

99.994

0.006

100.000

Itaú Corredores de Seguros S.A. (1)

Chile

$

99.990

0.010

100.000

99.990

0.010

100.000

99.990

0.010

100.000

Itaú Asesorías Financieras Ltda. (1)

Chile

$

99.990

0.010

100.000

99.990

0.010

100.000

-

-

-

Recaudaciones y Cobranzas Ltda. (1)

Chile

$

99.990

0.010

100.000

99.990

0.010

100.000

99.990

0.010

100.000

Itaú Corpbanca New York Branch (1) (5)

Foreign

USA

US$

100.000

-

100.000

100.000

-

100.000

100.000

-

100.000

Itaú Corpbanca Colombia S.A. (2)

Colombia

COP$

87.100

-

87.100

87.100

-

87.100

87.100

-

87.100

Itaú Corredor de Seguros Colombia S.A. (2)

Colombia

COP$

79.985

-

79.985

79.985

-

79.985

79.980

-

79.980

Itaú Securities Services Colombia S.A. (2) (6) (7)

Colombia

COP$

5.499

82.310

87.809

5.499

82.310

87.809

5.499

82.310

87.809

Itaú Comisionista de Bolsa Colombia S.A. (2) (8)

Colombia

COP$

2.219

85.166

87.385

2.219

85.166

87.385

2.219

85.166

87.385

Itaú Asset Management Colombia S.A. Sociedad Fiduciaria (2)

Colombia

COP$

-

87.083

87.083

-

87.083

87.083

-

87.083

87.083

Itaú (Panama) S.A. (3)

Panama

US$

-

87.100

87.100

-

87.100

87.100

-

87.100

87.100

(1) Companies regulated by the Chilean Commission for the Financial Market (CMF).
(2) Companies regulated by the Colombian Financial Superintendency (SFC), which has a supervision agreement with the CMF.
(3) Company regulated by the Superintendency of Banks of Panama.
(4) Company regulated by the Superintendency of the Securities Market of Panama.
(5) Company regulated by Office of the Comptroller of the Currency (OCC) and the Federal Reserve (FED).
(6) On July 8, 2020, Recaudaciones y Cobranza Ltda. acquired 1 share of Itaú Securities Services Colombia S.A. for the price of US$2.29 equivalent to Ch$1.799.
(7) On July 8, 2020, Itaú Asesorías Financieras Ltda. acquired 1 share of Itaú Securities Services Colombia S.A. for the price of US$2.29 equivalent to Ch$1.799.
(8) On July 8, 2020, Itaú Asesorías Financieras Ltda. acquired 6 shares of Itaú Comisionista de Bolsa S.A. for the price of US$7.19 equivalent to Ch$5.648.
(ii) Associated entities and/or business support

Associated entities are those over which the Bank has significant influence, although not control or joint control. If the Bank holds, directly or indirectly (e.g. through subsidiaries), 20% or more of the voting power of the investee, it is presumed that the Bank has significant influence, unless it can be clearly demonstrated that this is not the case, and subsequently increased or decreased to recognize either the Bank's proportional share in the net profit or loss of the associate and other movements recognized in its equity. The lower value arising from the acquisition of an associate is included in the book value of the investment net of any accumulated impairment loss.

Other factors considered to determine the significant influence on an entity are the representations in the Board of Directors and the existence of material transactions. The existence of these factors could determine the existence of significant influence on an entity, despite having a participation of less than 20% of the shares with the right to vote.

The following entities are considered 'Associated entities', in which the Bank has participation and are accounted for by applying the equity method, according to IAS 28 'Investments in Associates and Joint Ventures':

Associates

As of March 31, 2021

As of December 31, 2020

name

Principal activity

Place of incorporation

% participation

% participation

Nexus S.A.

Credit and debit card operator

Santiago, Chile

14.8148

%

14.8148

%

Transbank S.A.

Credit card operator

Santiago, Chile

8.7188

%

8.7188

%

Itaú Corpbanca exercises significant influence by virtue of its voting right to appoint a representative in the Board of Directors. This, among other business considerations, led the Administration to conclude that Itaú Corpbanca has significant influence over the aforementioned entities.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

(iii) Investments in other companies

Investments in other companies, represented by shares or rights in other companies, are those in which the Bank has neither control nor significant influence. These investments are recorded at cost, and adjustments for impairment losses are recorded when appropriate.

(iv) Funds management, trust business and other related businesses

The Bank and its subsidiaries manage assets held in publicly offered investment funds and other investment vehicles on behalf of investors and receive market-rate compensation for providing this type of services. Managed funds belong to third parties and, therefore, are not included in the Interim Consolidated Statement of Financial Position.

The Bank provides trust commissions and other fiduciary services that result in the participation or investment of assets by clients. Assets held in a fiduciary activity are not reported in the Interim Consolidated Financial Statements, since they are not Bank assets and there is no control over them. Contingencies and commitments arising from this activity are disclosed in Note 23 'Contingencies, Commitments, and Responsibilities', letter d), related to Responsibilities recorded in off-balance sheet accounts.

In accordance with IFRS 10 'Consolidated Financial Statements,' for consolidation purposes, the role of the Bank and its subsidiaries with respect to the managed funds must be evaluated to determine whether it is acting as Agent or Principal. According to this standard, an Agent is a party primarily engaged in acting on behalf and for the benefit of another party or parties (the Principal or Principals) and, therefore, it does not control the investee when it exercises decision-making authority. This evaluation must consider the following aspects:

●Scope of its decision-making authority over the investee.
●Rights held by other parties
●The remuneration to which it is entitled to in accordance with the remuneration agreements.
Decision-maker's exposure to variability of returns from other interests that it holds in the investee.

The Bank does not control or consolidate any trusts or other entities related to this type of business.

The Bank manages the funds on behalf and for the benefit of investors, acting solely as an Agent. The assets managed by the Bank and its subsidiaries are owned by third parties. Under this category, and in accordance with the aforementioned standard, they do not control the assets when they exercise their decision-making authority. Therefore, as of March 31, 2021 and 2020, and December 31, 2020 they act as Agent and none of these investment vehicles is consolidated.

(v) Joint Operation

An entity shall determine the type of joint arrangement in which it is involved. The classification of a joint arrangement as a joint operation or a joint venture depends upon the rights and obligations of the parties to the arrangement.

The Bank shall recognise in relation to its interest in a joint operation its assets, liabilities, revenue and expenses.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

d)Non-controlling interest

Non-controlling interest represents the portion of net income and net assets which the Bank does not own, either directly or indirectly. It is presented as 'Attributable to non-controlling interest' separately in the Interim Consolidated Statement of Income, and separately from shareholders' equity in the Interim Consolidated Statement of Financial Position.

Additionally, the non-controlling interests in the Interim Consolidated Statements of Financial Position will be presented, within the equity under item 'Non-controlling interest', separately from the equity attributable to owners of the Bank. Changes in the ownership interest of a parent in a subsidiary that do not result in a loss of control are equity transactions (i.e., transactions with owners in their capacity as owners).

The Bank attributes the result of the period and each component of other comprehensive income to the owners of the Bank and to the non-controlling interests. The Bank also attributes the total integral result to the owners of the Bank and to the non-controlling interests even if the results of the non-controlling interests give rise to a debit balance.

e)Use of estimates and judgments

The preparation of the Interim Consolidated Financial Statements requires Bank's management to make estimates, judgments and assumptions that affect the application of the accounting policies and the reported balances of assets and liabilities, disclosures of contingencies with respect to assets and liabilities as of the date of the Interim Consolidated Financial Statements, as well as income and expenses during the period. Actual results may differ from these estimates.

Estimates and relevant assumptions are regularly reviewed by Management in order to properly measure some assets, liabilities, income, and expenses. Accounting estimates changes due to reviews are recognized in the period in which the estimate is reviewed and in any future period affected.

In certain cases, the regulator standards and International Financial Reporting Standards require that assets and liabilities be recorded or disclosed at their fair values. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e. an exit price) regardless of whether that price is directly observable or estimated using another valuation technique. When market prices in active markets are available, they have been used as a basis for valuation. When market prices in active markets are not available, the Bank has estimated those values as values based on the best available information, including the use of modeling and other valuation techniques.

The Bank has established allowances to cover possible credit losses in accordance with the CAS. These regulations require that, in order to estimate allowances, they be evaluated regularly, taking into account factors such as changes in the nature and size of the loan portfolio, trends in the expected portfolio, credit quality and economic conditions that may affect the payment capacity of the debtors. Changes in allowances for loan losses are reflected as 'Provision for loan losses' in the Interim Consolidated Statement of Income for the year.

Loans are charged-off when the Bank's management determines that the loan or a portion cannot be collected, this in accordance with the regulatory dispositions issued by the CAS, as stated in chapter B-2 'Impaired loans and charge-offs'. Charge-offs are recorded as a reduction of the allowance for loan losses.

.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

In particular, information on most significant areas of estimate due to uncertainties and critical judgments in the application of accounting policies that have the most important effect on the amounts recorded in the Interim Consolidated Financial Statements are the following:

●Allowances for loan losses (Notes 9, 10, and 29).
●Fair value of financial assets and liabilities (Note 34).
●Contingencies and commitments (Note 23).
●Impairment losses of certain assets, including goodwill (Notes 9, 10, 13, 14, 15, 29 and 32).
●Current taxes and deferred taxes (Note 16).

During the period ended March 31, 2021, with exception of goodwill, there have been no significant changes in estimates made at the end of 2020 (see Note 32).

f)Classifications of financial instruments
(i) Classification of financial assets for measurement purposes

Financial assets are classified into the following specified categories: 'trading investments', 'held to maturity investments', 'available for sale investments' and 'loans and accounts receivable from customers'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Financial assets are initially recognized at fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue.

Measurement criteria for financial assets recorded in the Interim Consolidated Statement of Financial Position, are as follows:

Financial assets measured at amortized cost

Amortized cost is the acquisition cost of a financial asset or liability, plus or minus, as appropriate, prepayments of principal and the cumulative amortization (recorded in the Interim Consolidated Statement of Income) of the difference between the initial cost and the maturity amount as calculated under the effective interest method. For financial assets, amortized cost also includes any reductions for impairment or uncollectibility.

The 'effective interest rate' is the discount rate that exactly matches the initial amount of a financial instrument to all its estimated cash flows over its remaining life. For fixed-rate financial instruments, the effective interest rate incorporates the contractual interest rate established on the acquisition date plus, where applicable, the fees and transaction costs that are a part of the financial return are included. For floating-rate financial instruments, the effective interest rate matches the current rate of return until the date of the next review of interest rates.

The effective interest rate includes all commissions and other items paid or received that are part of the effective interest rate. Transaction costs include incremental costs that are directly attributable to the acquisition of a financial asset.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

Financial assets measured at fair value

According to IFRS 13 'Fair Value Measurement', 'fair value' is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e. an exit price) regardless of whether that price is directly observable or estimated using another valuation technique.

Fair value is a market-based measurement, not an entity specific measurement. For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same - to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions (i.e. an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability).

When a price for an identical asset or liability is not observable, an entity measures fair value using another valuation technique that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs. Because fair value is a market-based measurement, it is measured using the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk.

Between valuation techniques are included the use of recent market transactions to sell the asset or to transfer the liability between market participants at the measurement date, references to the fair value of other substantially identical financial instrument, discounted cash flows and option pricing models. Consistent with this, the Bank's intention to keep and asset or to sell, dispose or satisfy a liability is not relevant when estimating fair value.

When determining fair value an entity shall consider the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

To increase consistency and comparability in fair value measurements and related disclosures, IFRS 13 establishes a fair value hierarchy that categorizes into three levels the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1 inputs) and the lowest priority to unobservable inputs (level 3 inputs). Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

In those rare cases when fair value cannot be reasonably estimated for a financial asset or liability, this is measured at its amortized cost.

Additionally, in accordance to what is indicated in Chapter A-2 'Limitations or clarifications to the use of general criteria' of the Compendium of Accounting Standards, banks cannot designate financial assets or liabilities at fair value as an option instead of using the general criteria of amortized cost.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

The Interim Consolidated Financial Statements have been prepared using the general criteria of amortized cost, except for:

Financial derivatives contracts measured at fair value.
Available for sale investments measured at fair value through other comprehensive income.
Trading investments measured at fair value.
Financial assets and liabilities under hedge accounting relationships which allow them to be measured at fair value.

Trading investments

Financial assets are classified as held for trading when they have been acquired mainly for the purpose of selling them in the near term and on initial recognition are part of a portfolio of identified financial instruments that the Bank manages together and have a recent actual pattern of short-term profit-taking.

Trading investments are measured at fair value according to market quotes or by using valuation techniques at the closing date. Any gains or losses arising on remeasurement are recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the 'Net income (expense) from financial operations' line item in the Interim Consolidated Statements of Income.

Held to maturity investments

Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Bank has the positive intent and ability to hold to maturity. Any other investment instrument is classified as available for sale.

Investment instruments are initially recorded at cost, which includes transaction costs. Subsequent to initial recognition, held-to-maturity investments are measured at amortized cost using the effective interest method less any impairment.

Available for sale investments

The category of instruments available for sale includes those instruments that are not classified as trading instruments or as held to maturity.

Available for sale investments are subsequently measured at fair value according to market prices or valuation obtained by using valuation techniques, less impairment losses. Unrealized gains and losses originated as a consequence of fair value changes are recorded in valuation accounts within equity. When these investments are disposed or impaired, the recorded amount in equity is transferred to income and is reported under 'Net income (expenses) from financial operations'.

Interest and inflation-indexation adjustments of investments held to maturity and of instruments available for sale are included in 'Interest income' in the Interim Consolidated Statement of Income.

Investment instruments that are treated as hedged items in hedge accounting transactions relationships are adjusted according to the rules applicable to hedge accounting.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

Purchases and sales of investment instruments that shall be delivered o settled within the term established by market regulations or conventions are recognized at the trading date when the purchase or sale of the instrument is agreed. Investment instruments are assessed at the end of each reporting period to timely identify impairment indication which may result in losses.

Investment instruments must be permanently assessed to timely identify impairment indication which may result in losses which are recorded in the Interim Consolidated Statement of Income as 'impairment'.

The Bank has assessed its investments portfolio classified as 'Held to maturity investments' and 'Available for sale investments' in order to identify if there is objective evidence of impairment. Such assessment includes economic analysis, risk ratings for the issuers, and Management's ability and intent to hold those investments until maturity. Based on the Management's evaluation of these investments it is concluded that no impairment indication exists.

Loans and accounts receivables from customers and interbank loans

Loans and accounts receivables from customers and interbank loans, originated and purchased, are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and for which the Bank has no intention to sell them immediately or in the short term, They are measured at amortized cost using the effective interest method, less any impairment determined according to the CAS.

Financial derivative contracts

Financial derivative contracts, which include foreign currency and Unidades de Fomento (UF) forwards, interest rate futures, currency and interest rate swaps, currency and interest rate options and other financial derivative instruments are initially recognized in the Interim Consolidated Statement of Financial Position at their fair value (including transaction costs), which is usually their acquisition cost, and subsequently measured at their fair value.

The fair value is obtained from corresponding market pricings, discounted cash flows models and pricing valuation models. The derivative instruments are recognized as an asset when their fair value is positive and as a liability when they are negative in 'Financial derivative contracts' in the Interim Consolidated Statement of Financial Position. Additionally, the Credit Valuation Adjustment and Debit Value Adjustment is included as part of the fair value for each instrument, all that with the objective of properly reflect the counterparty and own risk in the fair value measurement.

Certain derivatives embedded in other financial instruments are treated as separate derivatives when their risks and characteristics are not closely related with those of the host contract and when such host contracts are not measured at fair value through profit or loss.

At inception of a derivative agreement, the Bank must designate it either as a derivative instrument for trading or for hedge accounting purposes. However, in some circumstances, the Bank can subsequently designate a derivative from the trading derivatives portfolio as a hedging instrument if the requirements for hedge accounting set in IAS 39, are met.

Changes in the fair value of derivative instruments held for trading are included in 'Net income (expenses) from financial operations' in the Interim Consolidated Statement of Income.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

If the derivative instrument is classified as hedging instrument for hedge accounting purposes, the hedge can be:

1) A fair value hedge of existing assets or liabilities or a 'commitment' to be executed
2) cash flow hedge of existing assets or liabilities or forecast transactions
3) A net investment in foreign operations hedge, as defined by IAS 21

A hedging relationship qualifies for hedge accounting if, and only if, all of the following conditions are met:

1) At the inception of the hedge there is formal designation and documentation of the hedging relationship;
2) the hedge is expected to be highly effective;
3) the effectiveness of the hedge can be reliably measured, and;
4) the hedge is assessed on an ongoing basis and determined to have actually been highly effective throughout the financial reporting periods for which the hedge was designated.

Certain transactions with derivatives that do not qualify for being classified as hedging derivatives are treated and recognized as trading derivatives, even when they provide effective economic hedges of the risk positions.

When a derivative hedges the exposure to changes in the fair value of an existing item of the asset or liability, such hedged item is measured at fair value from the designation of the fair value hedge until its expiration in connection with the specific hedged risk. Fair value adjustments for both the hedged item and the hedging instrument are recognized in the Interim Consolidated Statements of Income.

If the hedged item in a fair value hedge is a firm commitment, the changes in the fair value of the firm commitment regarding the hedged risk are recognized as assets or liabilities with effect on the Interim Consolidated Statement of Income for the period. Gains or losses from the changes in fair value measurement of the hedging derivative are recognized with effect on the Interim Consolidated Statements of Income for the period. When a new asset or liability is acquired as a result of the firm commitment, the initial recognition of the acquired asset or liability is adjusted to incorporate the accumulated effect of the fair value valuation of the firm commitment recognized in the Interim Consolidated Statement of Financial Position.

When a derivative instrument hedges the exposure to changes in the cash flows of existing assets or liabilities, or forecast transactions, the effective portion of changes in the fair value related to the hedged risk is recognized in other comprehensive income and accumulated valuation accounts within equity. The cumulative loss or gain in cash flows hedge recorded in valuation accounts is transferred to the Interim Consolidated Statement of Income to the extent that the hedged item impacts income because of the hedged risk, offsetting the effect in the same line item of the Interim Consolidated Statement of Income. Any ineffective portion is directly recognized in the Interim Consolidated Statement of Income.

In case of a fair value hedge of interest rate risk of a portfolio with the hedged item representing currency value instead of individual assets or liabilities, gains or losses from the fair value measurement for both the hedged item and the hedging instrument, are recognized in the Interim Consolidated Statement of Income, but the fair value adjustment of the hedged portfolio is presented in the Interim Consolidated Statement of Financial Position under the 'Other assets' or 'Other liabilities' items, depending on the hedged portfolio balance as of the reporting date.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

Financial asset and liability balances are offset, i.e., reported in the Interim Consolidated Statement of Financial Position at their net amount, only if there is a legally enforceable right to offset the recorded amounts and the Bank intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(ii) Classification of financial assets for presentation purposes

For presentation purposes, financial assets are classified by their nature into the following line items:

- Cash and deposits in banks: This item comprises cash, checking accounts and demand deposits at the Central Bank of Chile and other financial institutions in Chile and abroad. The amounts invested in overnight deposits will continue to be reported under this heading and in the corresponding lines or items.
- Cash items in process of collection: this item represents domestic transactions in the process of transfer through a central domestic clearinghouse or international transactions which may be delayed in settlement due to timing differences, etc.
- Trading investments: this item includes financial instruments held-for-trading and investments in mutual funds which must be adjusted to their fair value in the same way as instruments acquired for trading.
- Financial derivative contracts: financial derivative contracts with positive fair values are presented in this item. It includes both independent contracts as well as derivatives that should and can be separated from a host contract, whether they are held for trading or designated as hedging instruments in hedge accounting relationships, as disclosed in Note 8 to the Consolidated Financial Statements.
- Interbank loans: this item includes balances of transactions with domestic and foreign banks, including the Central Bank of Chile, other than those reflected in other financial asset classifications listed above.
- Loans and accounts receivables from customers: these loans are non-derivative financial assets for which fixed or determined amounts are charged, that are not listed on an active market and for which the Bank has no intention to sell them immediately or in the short term.
- Investment instruments: are classified into two categories: held-to-maturity investments, and available-for-sale investments. The held to maturity investment category includes only those instruments for which the Bank has the ability and intent to hold to maturity. The remaining investments are treated as available for sale.
(iii) Classification of financial liabilities for measurement purposes

Financial liabilities are generally measured at amortized cost, except for those financial liabilities designated as hedged item (or as hedge instruments) and liabilities held for trading, which are measured at fair value. Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities.

Financial liabilities at fair value through profit and loss: As of March 31, 2021 and December 31, 2020 the Bank does not maintain financial liabilities at FVTPL other than financial derivative contracts.

Other financial liabilities: Other financial liabilities (including interbank borrowings, issued debt instruments and other accounts payables) are initially recorded at fair value and subsequently measured at amortized cost using the effective interest method.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

(iv) Classification of financial liabilities for presentation purposes

Financial liabilities are classified by their nature into the following line items in the Interim Consolidated Statements of Financial Position:

- Deposits and other demand liabilities: this item includes all on-demand obligations except for term savings accounts, which are not considered demand instruments in view of their special characteristics. Obligations whose payment may be required during the period are deemed to be on-demand obligations. Operations which become callable the day after the closing date are not treated as on-demand obligations.
- Cash items in process of being cleared: this represents domestic transactions in the process of transfer through a central domestic clearing house or international transactions which may be delayed in settlement due to time differences, etc.
- Obligations under repurchase agreements: this includes the balances of sales of financial instruments under securities repurchase and loan agreements. The Bank does not record in its own portfolio instruments acquired under repurchase agreements.
- Time deposits and other time liabilities: this item includes balances of deposit transactions in which a term at the end of which they become callable has been stipulated.
- Financial derivative contracts: this includes financial derivative contracts with negative fair values (i.e. a liability of the Bank), whether they are designated for trading or for hedge accounting purposes, as set forth in Note 8.
- Interbank borrowings: this item includes obligations with other domestic banks, foreign banks, or the Central Bank of Chile, other than those reflected in certain other financial liability classifications listed above.
- Issued debt instruments: there are three types of instruments issued by the Bank: Obligations under letters of credit, Subordinated bonds and senior bonds placed in both local and foreign markets.
- Other financial liabilities: this item includes credit obligations with entities other than domestic banks, foreign banks, or the Central Bank of Chile, for financing purposes or operations in the normal course of business.
g)Leases

On the date of commencement of a lease the Bank recognizes an asset for right of use and a liability for lease in accordance with the provisions of IFRS 16 'Leases'.

(i) Assets for-right-of-use

At the beginning of a lease, the right-of-use asset is measured at cost. The cost includes (a) the amount of the initial measurement of the lease liability; (b) lease payments made before or from the start date, less lease incentives received; (c) the initial direct costs incurred by the lessee; and (d) a modification of the costs to be incurred by the lessee when dismantling and eliminating the underlying asset, restoring the place in which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

After the initial recognition date, the Bank measures the assets by right of use applying the cost model, which is defined as the asset by right of use measured at cost (a) less accumulated depreciation and accumulated risk losses of value; and (b) adjusted for any new measurement of the lease liability.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

The Bank applies the depreciation requirements established by IAS 16 'Property, plant and equipment' over the right-of-use in these types of transactions.

If the lease transfers ownership of the underlying asset to the Bank at the end of the lease term or if the cost of the right-of-use asset reflects that the Bank will exercise a purchase option, the Bank will depreciate the right-of-use asset from commencement date to the end of the useful life of the underlying asset. In another case, the Bank will depreciate the right-of-use asset from commencement to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term, whichever comes first.

The Bank applies IAS 36 'Impairment of Assets' to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

As of March 31, 2021, the Bank has not identified impairment in the value of the right of use assets.

(ii) Liability for lease

The Bank measures the lease liability at the present value of lease payments that have not been paid as of that date. Lease payments are discounted using the interest rate implicit in the lease, if that rate could be easily determined. Since that rate cannot be easily determined, the Bank uses the incremental rate for loans (cost of funding).

The lease payments included in the measurement of the lease liability determined the payments for the right of use the underlying asset during the term of the not cancelable lease at the measurement date which includes (a) fixed payments, less any lease incentive receivable (b) variable lease payments, which depends on an index or rate, recently measured using the index or rate on the start date; (c) it matters that the lessee expects to pay as residual value guarantees; (d) the exercise price of a purchase option if the lessee is reasonably sure to exercise that option; and (e) payments for penalties arising from the termination of the lease, if the term of the lease reflects that the lessee exercises an option to terminate the lease.

After the date of initial recognition, the Bank measures the lease liability in order to recognize (a) the interest on the lease liability; (b) lease payments made; and (c) the new measurements or modifications of the lease, and also for fixed lease payments that have essentially been reviewed.

The Bank makes new measures of the lease liability discounting the modified lease payments, if (a) there is a change in the expected amounts payable related to a residual value guarantee. A lessee will determine the lease payments to determine the change in the amounts expected to be paid under the residual value guarantee; (b) there will be a change in future lease payments determined from a change in an index or a rate used to determine those payments. The Bank measures the lease liability again to modify the modified lease payments only when there is a change in cash flows. The Bank will determine the revised lease payments, for the remainder of the lease term, based on the revised contractual payments.

As of January 1, 2019, the Bank measured the lease liability at the present value of the lease payments discounted using the incremental interest rate for loans (cost of funding).

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

h)Allowances for loan losses

The Bank has established allowances to cover the incurred and expected losses of certain financial assets that have been determined in accordance with the regulations and instructions set forth by the CMF and models and methodologies based on individual and collective analysis of the borrowers, approved by the Board of Directors with the aim of establishing in a timely manner allowances required and sufficient enough to cover incurred and expected losses based on risk characteristics of debtors and their loans that determine the payment behavior and subsequent collection.

Processes and policies compliance are evaluated and supervised according to the established internal control procedures with the purpose of ensuring its compliance and an adequate level of allowances to cover expected and incurred losses.

Individual assessment of borrowers is performed when the customer, due to its size, complexity or exposure, is required to be identified and analyzed on an individual basis. Collective assessment is used for a large number of transactions with homogeneous characteristics, for small amounts which relate to individuals or small size entities.

In order to establish allowances for loan losses, an assessment of the loans and contingent loans portfolios is performed as indicated below:

Individual allowances for the normal portfolio.
Individual allowances for the substandard portfolio.
Individual allowances for the non-compliant portfolio.
Group allowances for the normal portfolio.
Group allowances for the non-compliant portfolio
(i) Individual allowances

When a debtor is considered as individually significant, i.e. with significant levels of debt and for those ones that are not significant but cannot be classified in groups of financial assets with homogeneous credit risk characteristics, and due to its size and complexity or exposure it is required to be individually assessed.

The methodology used to classify and determine its allowances is performed in accordance with Chapter B-1 'Provisions for credit risk' from the CAS, assigning risk categories to each debtor according to the following detail:

Normal portfolio

It corresponds to debtors whose capacity payments allows them to comply with their obligations and commitments, and according to the economic-financial situation this condition will not changes. The classifications assigned to this portfolio are the categories that goes from A1 to A6. Notwithstanding the above, the Bank must maintain a minimal allowance percentage of 0.5% over its loan portfolio and contingent loans that form part of the Normal portfolio.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

Substandard portfolio

The substandard portfolio includes the borrowers which have financial difficulties, or whose payment capacity worsened significantly, presenting reasonable doubt regarding the probability to collect the principal and interest under the contractually agreed terms, indicating that they are less likely to comply with their financial obligations in the short term. In addition, borrowers that recently held loans in default for over 30 days also are included in the substandard portfolio. The classifications assigned to this portfolio are categories B1 to B4.

Normal and Substandard portfolios

As part of the debtors' individual analysis, the Bank classifies its debtors into the aforementioned categories, assigning probabilities of default (PD) and loss given default (LGD), which yield the expected loss percentages as a result. These variables are regulated by the CMF to be applied to each of the individual categories.

Below are presented the probabilities of default and loss given default, as established by the CMF:

Debtor

Probability of default

Loss given default

Expected loss

Type of portfolio

category

(PD)

(LGD)

(EL)

(%)

(%)

(% allowance)

A1

0.04

90.00

0.03600

A2

0.10

82.50

0.08250

Normal portfolio

A3

0.25

87.50

0.21875

A4

2.00

87.50

1.75000

A5

4.75

90.00

4.27500

A6

10.00

90.00

9.00000

B1

15.00

92.50

13.87500

B2

22.00

92.50

20.35000

Substandard portfolio

B3

33.00

97.50

32.17500

B4

45.00

97.50

43.87500

In order to determine the amount of allowance to be established, the first step is to determine the net exposure which is comprised of loans and receivables plus loan commitments, less the amount to be recovered by collateral execution and then the corresponding expected losses percentages are applied. The Bank must demonstrate that the collateral value considered as an exposure deduction reasonably reflects the value that the collateral would have when disposed. The credit risk category of the debtor is substituted by the credit risk category of the guarantor only if the guarantor is an entity with a credit risk classification corresponding to an investment grade or higher, granted by a national or international classification agency approved. In any case the guaranteed values may be deducted from the exposure amount. The procedure applies only in the case of financial or real guarantees.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

Non-compliant portfolio

Non-compliant portfolio includes the loans to borrowers for which recovery is considered remote, given that they have suffered a loss event resulting in impairment. This portfolio includes borrowers with evident signs of possible bankruptcy, as well as those in which a forced debt renegotiation is required, and also includes any borrower with loans in default for equal to or greater than 90 days in the payment of interest or principal of any loan. This portfolio includes borrowers classified under categories C1 to C6 in the classification scale established below and classification is assigned to the debtor's portfolio at the classification at the riskiest level, including 100% of the loan commitments that those borrowers maintain.

In calculating allowances for the non-compliant portfolio, loss rate percentages are used, which must be applied to the exposure, corresponding to the sum of loans and receivables and loan commitments held by the same borrower. In order to apply this percentage, an expected loss rate must be estimated first, deducting from the exposure the amounts expected to be recovered by execution of collateral and, in the case of having solid data that justifies them, deducting also the net present value of expected recoveries that can be obtained by the execution of actions to collect, net of expenses associated with these actions.

That loss rate must be classified into one of the nine categories defined according to the range of losses effectively expected by the Bank for all the operations of an individual borrower

Allowance percentages to be applied over the exposition are as follows:

Type of portfolio

Risk scale

Expected loss range

Allowance

C1

Up to 3%

2%

C2

More than 3% and up to 20%

10%

C3

More than 20% and up to 30%

25%

Non-compliant portfolio

C4

More than 30% and up to 50%

40%

C5

More than 50% and up to 80%

65%

C6

More than 80%

90%

Loans are kept in this category until there is observable evidence to conclude that the capacity and payment behavior is back to normal, regardless of charging-off loans that comply with the conditions established in the accounting policy indicated in letter t) 'Impaired loans and charge-offs', charge-off section (title II of Chapter B-2 of the Compendium of Accounting Standards).

To remove a debtor from this portfolio, once the circumstances that made it be classified in this category are overcome, all the following requirements must be met, in a copulative manner:

1) None of the debtor obligations with the Bank are overdue for more than 30 days.
2) No new re-financing of loans has been granted.
3) At least one of the payments received includes principal payment (total or partial).
4) If the debtor has a loan with partial payments due within six months, two payments have been made.
5) If the debtor has to pay monthly installments for one or more loans, at least four consecutive installments have been paid.
6) The debtor shows no direct unpaid debts in the consolidated information provided by the CMF, unless those debts are not material.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

(ii) Group allowances

Collective assessment is used to deal with a large number of loan transactions with small amounts granted to individuals and small size companies. This type of assessment, as well as the criteria to apply them, must be consistent with those used when loans were granted.

To establish allowances, collective assessment requires grouping loans with homogeneous characteristics in terms of type of debtor and loan conditions, in order to conform by technically formulated methodologies and following prudential criteria, the payment behavior of the group and the recoveries for defaulted loans.

Based on the above, the groups are assigned with a probability of default (PD) and loss given default (LGD) considering the profile that best suits the loan. Net exposure is calculated, which includes the book value of the loan plus contingent loans.

Standard method for mortgage loans allowances

For the purposes of calculating credit risk provisions of the mortgage loan portfolio for housing, the Bank recognizes the higher amount of provision resulting from using the internal model and the standard provision method for mortgage loans established in the CAS. According to this method the provision factor to be applied, represented by the expected loss (EL) over the amount of the mortgage loans, depends on the overdue of each loan and the relation, at the end of each month, between the gross exposure and the corresponding collateral (LTV), according to the following table:

Number of overdue

Default

LTV range

days

0

1 - 29

30 - 59

60 - 89

portfolio

PI (%)

1.0916

21.3407

46.0536

75.1614

100

LTV ≤ 40%

PDI (%)

0.0225

0.0441

0.0482

0.0482

0.0537

PE (%)

0.0002

0.0094

0.0222

0.0362

0.0537

PI (%)

1.9158

27.4332

52.0824

78.9511

100

40% < LVT ≤ 80%

PDI (%)

2.1955

2.8233

2.9192

2.9192

3.0413

PE (%)

0.0421

0.7745

1.5204

2.3047

3.0413

PI (%)

2.5150

27.9300

52.5800

79.6952

100

80% < LVT ≤ 90%

PDI (%)

21.5527

21.6600

21.9200

22.1331

22.2310

PE (%)

0.5421

6.0496

11.5255

17.6390

22.2310

PI (%)

2.7400

28.4300

53.0800

80.3677

100

LVT > 90%

PDI (%)

27.2000

29.0300

29.5900

30.1558

30.2436

PE (%)

0.7453

8.2532

15.7064

24.2355

30.2436

In case the same debtor has more than one mortgage loan with the Bank and one of those loans is 90 days overdue or more all those loans are incorporated to the Non-compliant portfolio, calculating allowances for each one of those loans applying the corresponding percentage according to the LTV.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

For mortgage loans related to housing programs and benefits from the Government, when guaranteed by the corresponding auction insurance, the allowance percentage could be weighted for a loss mitigating factor, which depends on the LTV percentage and the value of the property at inception. The loss mitigating factors are those shown in the table below:

MP factor of mitigation of losses for credits with state

Range LTV

insurance of auction

Section V: Deed price of the house (UF)

V ≤ 1,000

1,000 < V ≤ 2,000

LTV ≤ 40%

100%

100%

40% < LTV ≤ 80%

100%

100%

80% < LTV ≤ 90%

95%

96%

LTV > 90%

84%

89%

Provisions for commercial loans

For this type of loan, the Bank recognizes the higher provision resulting from the internal models and standard models established in the CAS. The applicable percentages of provision and the parameters used to determine the provision, are set out on the CAS.

Commercial leasing operations

The allowance is determined based on the book value of the commercial lease operations (including the purchase option). The allowance percentage used in the calculation will depend on the delinquency of each operation, the type of leased asset and the relationship, at the end of each month, between the book value of each operation and the value of the leased asset (LTV), as indicated in the following tables:

Probability of Default (PD) applicable according to delinquency and type of asset (%)

Days in arrears of the operation at

Type of leased assets

the end of the month

Real estate

Non-real estate

0

0.79

1.61

1-29

7.94

12.02

30-59

28.76

40.88

60-89

58.76

69.38

Non-compliant portfolio

100.00

100.00

Loss Given Default (LGD) applicable according to LTV range and type of asset (%)

LTV= Book value/Value of the leased asset

LTV range

Real estate

Non-real estate

LTV <= 40%

0.05

18.20

40% < LTV <= 50%

0.05

57.00

50% < LTV <= 80%

5.10

68.40

80% < LTV <= 90%

23.20

75.10

LTV > 90%

36.20

78.90

The LTV relationship is determined considering the guarantee appraisal value, expressed in UF for real estate and in Chilean pesos for non-real estate, recorded at inception, considering any transitory event that may cause an increase on the value of the asset.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

Student loans

The expected loss (%) is applied over the amount of the student loan and the exposure of the contingent credit when applicable. The factor used is determined based on the type of student loan and the collectable payment of principal or interest, at the end of each month. Only when payment is due, the factor will also depend on overdue.

Probability of Default (PD) applicable according to payment enforceability delinquency and type of loan (%)

Presents payment of principal or

Days of delinquency at the

Type of Student Loan

interest at the end of the month

end of the month

CAE

CORFO or other

Yes

0

5.20

2.90

1-29

37.20

15.00

30-59

59.00

43.40

60-89

72.80

71.90

Portfolio in default

100.00

100.00

No

N/A

41.60

16.50

Loss given default due according to the enforceability of the payment and type of loan (LGD) (%)

Presents payment of principal or interest at the end of

Type of Student Loan

the month

CAE

CORFO or other

Yes

70.90

70.90

No

50.30

45.80

Generic commercial placements and factoring

Factoring operations and commercial loans, other than those indicated above, the expected loss (%) is applied over the amount of the loan and on the exposure of the contingent credit. The factor used is determined based on whether the operation has guarantees and it's overdue. In addition, for those operations with guarantees, the relationship between the debtor´s obligations to the bank and the value of the guarantees (LTV) is used to determine the factor as indicated in the following tables:

Probability of Default (PD) applicable according to delinquency and LTV range (%)

Days of delinquency at the end of the month

With collateral

No collateral

LTV <=100%

%

LTV >100%

%

0

1.86

2.68

4.91

1-29

11.60

13.45

22.93

30-59

25.33

26.92

45.30

60-89

41.31

41.31

61.63

Portfolio in default

100.00

100.00

100.00

Loss Given Default (LGD) applicable according to LTV range (%)

Commercial operations or

Factoring with

factoring without transferor's

transferor' s

LTV ranges

responsibility

responsibility

LTV <= 60%

5,00

3,20

With collateral

60% < LTV <= 75%

20,30

12,80

75% < LTV <= 90%

32,20

20,30

90% < LTV

43,00

27,10

No collateral

56,90

35,90

A guarantee or collateral can only be considered if, the guarantee was constituted in favor of the Bank with preference and if the guarantees are directly associated with the debtor´s credits (not shared with other

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

debtors). For the purposes of calculating the LTV, the invoices assigned in the factoring operations, nor the guarantees associated with mortgage loans can be considered.

The guarantees used in calculating the LTV relationship may be of a specific or general purpose, including those that are simultaneously specific and general. For specific guarantees, the LTV ratio must be calculated independently for each guaranteed transaction. For general and specific guarantees, LTV is determined as the division between the sum of the amounts of the loan and exposures of contingent credits and the general, or general and specific guarantees considering any restriction.

Non-compliant portfolio - Collectively assessed loans

Non-compliant portfolio includes all loans and contingent loans of a borrower that presents an overdue equal to or more than 90 days in the payment of interest or principal in any of its loans. It will also include borrowers who renegotiated a loan with more than 60 days overdue and borrower who have been subject to a forced debt renegotiation.

The following can be excluded from the group non-compliant portfolio:

a) Mortgage loans overdue for less than 90 days, unless the debtor has another loan of the same type with large overdue; and,
b) Student loans as set forth in Law No. 20,027, that do not present conditions indicated in Circular No. 3,454 dated December 10, 2008.

All debtor's loans should be classified in the Non-compliant portfolio until a normalization of its behavior and management capacity can be observed, regardless of charge-offs requirements indicated in the accounting policy detailed in letter w), charge-offs section (title II, Chapter B-2 of the Compendium of Accounting Standards). In order to remove a debtor from the Non-compliant portfolio, once the circumstances that made it be classified in this category are overcome according to these standards, all the following requirements must be met:

- None of the debtor obligations with the Bank are overdue for more than 30 days.
- No new re-financing of loans has been granted
- At least one of the payments received includes principal payment (total or partial).
- If the debtor has a loan with partial payments due within six months, two payments have been made.
- If the debtor has to pay monthly installments for one or more loans, at least four consecutive installments have been paid.
- The debtor shows no direct unpaid debts in the consolidated information provided by the CMF, unless those debts are not material.
(iii) Guarantees

Guarantees can be considered for allowances calculation purposes only if they are legally documented and comply with all conditions and requirements to be executable in Bank's favor.

In all cases, for purposes of the standards established by the CMF, the Bank should be able to demonstrate the mitigating effect of the guarantees over the inherent credit risk of the exposures. For allowances calculation purposes, guarantees will be treated according to the following, as applicable:

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

1) Collateral and guarantees. Considers contractual agreements to guarantee a specific loan or loans in a way that the coverage over the exposure can be clearly defined and where the rights to collect have been unquestionably transferred over to the guarantor.
2) Property guarantees. In order to apply the deduction method or to determine recovery rates, valuation of property and other guarantees (mortgages or financial instruments guarantees) must reflect the net inflow that will be obtained from the sale of the assets, debts instruments or shares in the event that the borrower falls into default and a secondary source of payment is required. In applying the deduction method, the amount to be recovered by executing the guarantee, corresponds to the present value of the asset sold in its current market condition at disposal, minus all expenses required to keep the asset in its current conditions and to sell them, all in accordance with the Bank policies and terms established by Law for assets disposal.
3) Financial guarantees. On this type of guarantees the adjustment of its fair value may be deducted from the exposition, solely when the guarantee can be established with the unique aim to guarantee compliance with the related loans.

Leased assets

Estimated losses when establishing allowances based on the assessment method corresponding to each debtor, consider the amount that will be obtained if the leased asset is sold, taking into account any potential impairment for the assets in case of debtor's default and the related recovery and relocation expenses

Factoring operations

Establishing allowances for factoring operations will consider as counterparty the entity ceding rights over the endorsed in favor of the Bank, when the cession is recourse for the latter, and to the debtor when the cession has been made without recourse.

(iv)Additional provisions

The Bank can establish additional provisions to those established by using its models, according to what is set forth in No 9, Chapter B-1 of the Compendium of Accounting Standards issued by the CMF. Such provisions can be established to cover potential losses due to macroeconomic changes, in order to anticipate recessions in the future that may adversely affect the Bank and to release those provisions when a positive outlook is anticipated.

According to the above, additional provisions shall always correspond to general allowances for commercial, consumer or mortgage loans, or to identify segments of them and in no case can be used to compensate deficiencies in the Bank's models.

As of March 31, 2021, the Bank recorded additional provisions for its commercial, consumer and mortgage loan portfolios for an amount of MCh$105,679. See Note 21 Provisions (as of December 31, 2020, the Bank recorded additional provisions for its commercial, consumer and mortgage loan portfolios for an amount of MCh$137,848).

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

l)New accounting pronouncements

New accounting pronouncements introduced by the CMF

1) Standards and interpretations issued on current period

1.1) Circular No. 2,285 R11 file, to rate banks as systemically important. Complements instructions and extends filing date.

Issued on January 26, 2021, the circular includes clarifications to instructions regarding the definition of factors and sub-factors to establish the degree of systematic importance of a bank in accordance with Compilation of Accounting Standards ('CAS') 21-11. Additionally amends numeral 3 of the standard, initially established by circular No 2,284 issued on December 31, 2021, extending filing date from February 1 to March 1, 2021 of the R11 report, including information referring to each of the twelve months of the year 2020.

Includes requirement to file the report of January and February 2021 on April 1, 2021, and in the following 9 business days, the information referring to March of the same year. As an extraordinary measure, the information will be reported through the ESI system (secure sending of information).

As of the date of issuance of these Consolidated Financial Statements, Management has filed the reports on meeting the deadlines requiered by the Circular.

1.2) Circular No. 2,286 regarding aspects related to guarantee loans for SMEs (FOGAPE)

Issued on February 26, 2021, it requires to update its information systems, in order to have the necessary information to evaluate the operation issued under the FOGAPE COVID-19 credit lines. File C50 is updated, this file provide information on operations issued under the FOGAPE COVID-19 credit lines program. The circular incorporates file C51 to inform mortgage operations postponed and guaranteed by FOGAPE, file D59 to inform the daily interest rates of operations guaranteed by FOGAPE Reactivation and FOGAPE Postponement. File E22 includes the detailed information used to asses financing requests covered by the FOGAPE Reactivation and FOGAPE Postponement .

The provisions of the Circular are from the date of its issuance.

The adoption of this circular has no impact on these Interim Consolidated Financial Statements, however, Management is working to comply with the requirements of the regulator.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

2) Standards and interpretation issued but not yet effective

2.1) Circular No. 2,243 December 20, 2019, Compendium of Accounting Standards for Banks, Updated instructions and Circular No. 2,249 issued on April 20, 2020, amends Chapter E, postpones its first application.

As a result of various changes introduced by the International Accounting Standards Board to International Financial Reporting Standards (IFRS) in recent years, particularly to IFRS 9 'Financial instruments', IFRS 15 'Revenue from contracts with customers' and IFRS 16 'Leases', and as a consequence of a review of the current limitations on the application of these standards on a local basis, the CMF has decided to update the instructions in the Compendium of Accounting Standards for Banks, 'CAS', in full.

All changes aim for a greater convergence to IFRS, as well as to improve financial reporting, to contribute to the financial stability and transparency of the banking system.

From the modifications mentioned before and the following sections are updated as follows:

Chapter A-1 Application of accounting criteria

In this chapter, which deals with the application of accounting standards in the context of the legal framework applicable to banks. In addition, it emphasizes the responsibility of banks to verify the use of updated versions of IFRS.

Chapter A-2 Limitations or clarifications on the use of general standards

The limitations and clarifications for the application of IFRS are adjusted with the aim to move towards greater consistency with IFRS. The main changes are as follows:

- The exception that existed until now for the application of IFRS 9, which replaced IAS 39, is eliminated, with exception of impairment sections and some particular limitations.

- The restriction for assets or liabilities to be recognized at fair value is eliminated, and all categories of financial assets and liabilities established by IFRS 9 are permitted.

- As a result of the adoption of IFRS 9, the classification of trading and investment instruments as instructed on IAS 39 are eliminated. Therefore, financial assets and liabilities will be classified and measured in accordance with the categories established by IFRS 9: 'Financial assets for trading at fair value through profit and loss', 'Financial assets not for trading compulsorily measured at fair value through profit and loss', 'Financial assets designated at fair value through profit and loss', 'Financial assets at fair value through other comprehensive income' and 'Financial assets at amortized cost'.

- In regard to the requirement on valuations of goodwill and other intangibles, it is established that the independent reports that support the recognized amount must explicitly consider the provisions of IAS 36 that are applicable and must be issued under the attestation standards adopted by the Chilean Association of Accountants.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

- In connection with the preparation of the financial statements, the exception from the obligation to disclose results and other comprehensive income with their respective notes for the quarterly period, together with the cumulative periods already disclosed under IAS 34, are eliminated.

- It is specified that valuation according to the cost methodology, less accumulated depreciation, amortization and impairment, should be applied after initial recognition, both for fixed assets, intangible assets, investment property and assets with the right to use property under lease.

- Regarding financial leasing operations, where the bank acts as lessor, it is specified the Commission's instructions prevail over IFRS 16, which must be applied in all aspects that do not conflict with them.

Chapter B-2 Provisions for credit risk

The criterion for the suspension of recognition of interest income and adjustments on an accrual basis is amended and will now apply to all loan that are more than 90 days past due, whether the loan is subject to individual or group assessment.

Chapters C-1 and C-2 Impaired loans and write-offs

The changes made to the CAS include the modification to the current Statement of Financial Position and the Statement of Income for the period, which are consistent with the adoption of IFRS 9 instead of IAS 39. In addition, the new 'Statement of Other Comprehensive Income' and the 'Statement of Changes in Equity' are included. Likewise, the financing and investment activities in the Cash Flow Statement are defined, incorporating more precise guidelines for the preparation of these.

In addition, more detail and disaggregation of the information contained in some notes to the financial statements are required, in order to comply with IFRS 7, along with specifying other considerations particular to other IFRSs that must be observed for the preparation of the notes. To this end, special emphasis is placed on the disclosure of information relating to impairment, considering the impairment model for placements contained in Chapters B-1, B-2 and B-3 of the same CAS. In accordance with these changes, Chapter C-1 containing models for the presentation of the notes on cash and cash equivalents, financial assets at amortized cost, contingent credits, credit losses, related party disclosures and regulatory capital requirements are modified.

Among the other aspects considered in updating chapter C-1, is the requirement for a financial report prepared in accordance with 'IFRS Practice Statement 1 - Management Commentary', which must accompany the interim and annual financial statements.

With regard to the interim financial statements, Chapter C-2 contains references to their composition, presentation of comparative quarterly figures, their notes, the requirement for a financial report mentioned above and the corresponding publications, in accordance with Article 16 of the General Banking Law.

Chapter C-3 Contingent credits

The accounting plan for the standardized monthly financial statements contained in Chapter C-3 of the CAS is modified, both in the coding of the accounts and in their description, so that the information detailed therein is consistent with the Statement of Financial Position, the Statement of Income and the Statement of Other Comprehensive Income.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

Other matching adjustments

In addition to the adjustments relating to the references to the new supervising entity, references to IFRS and some items of financial information that have been modified as mentioned above and which are present in various chapters of the CAS, where also updated.

Chapter E- Transitional provisions

The new CAS provisions will be applicable as of January 1, 2022, with a transition date as of January 1, 2021, for purposes of the comparative financial statements to be issued as of March 2022.

Any impact from the transition to the new generally accepted principles and criteria set forth by the Commission at the transition date must be recorded against the equity item 'Other non-earnings reserves' (item 32000.01.00), as of January 1, 2022.

Notwithstanding the above, the change of criteria for the suspension of the recognition of interest income and inflation-indexation adjustments on an accrual basis as established in Chapter B-2, must be adopted no later than January 1, 2022.

In accordance with the above, Chapter E of the CAS is updated, which contains its transitional provisions.

As of the date of issuance of these Interim Consolidated Financial Statements, Management is assessing the impact of adopting the new standard and is currently in process of implementing the changes required in order to comply with the requirements of the New Compendium of Accounting Standards for Banks.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

2.2) Circular No. 2,257 issued on May 22, 2020. Modifies chapter B-1 of the CAS. Allowing the recognition of the excess of mortgage guarantee for the home in the standard model of provisions of the group commercial portfolio.

Chapter B-1 of the CAS establishes standard models to determine provisions for credit risk of the mortgage portfolio for housing and commercial group portfolio. Currently, these methodologies do not allow the use of mortgage guarantees associated with home loans in determining the debt guarantee ratio and in the determination of the provisions in the group commercial portfolio.

As a result of the health crisis caused by COVID-19, the effects it has had on the economy and the credit risk in banking, the Commission reviewed this restriction, temporarily and until the aforementioned new legal framework that includes the Basel III guidelines, allowing the recognition of the excess of mortgage guarantee associated with housing loans in the standard model of provisions of the group commercial portfolio in Chapter B-1, determined from the application of a haircut of 20%.

Modifications introduced by this circular are to be implemented as of its issuance date.

As of the issuance of these Consolidated Financial Statements, the modifications introduced by the circular are of a transitory nature to address the effects of the health crisis caused by the Covid-19 pandemic, thus Management decided to not to implement the modifications. However, the adoption of the aforementioned circular will be evaluated during 2021.

2.3) Circular No. 2,267 issued on August 28, 2020 - Bank Factoring Operations.

The circular was issued with introduced new instructions regarding the discounting of invoices by banks and subsidiaries on their factoring business. Before the issuance of this circular, the assignments of credits originated in the sale of goods or provision of non-financial services, were limited to be carried out by the natural or legal persons with whom the factoring operation is agreed, or on behalf of whose buyers the payment commitment is assumed. The modifications included in the chapter 8-38 of the Updated Compilation of Standards allow the discount of invoices to be carried out by third parties other than those of their originators, given the safeguards provided by Law No. 19,983 in force today. Additionally, a title referring to 'Accounting Standards' is included, which indicates that factoring operations should be treated as commercial placements, based on Chapter B-1 of the Compendium of Accounting Standards, both with regard to provisions for credit risk, as by their classification in the periodic information models.

The instructions established in this Circular came into force as of the date of its issuance.

As of the date of issuance of these Interim Consolidated Financial Statements, Management has implemented the aforementioned Circular, however, the adoption of this circular had no impact on these Interim Consolidated Financial Statements, given that factoring operations continue to be considered as commercial loans.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

2.4Circulars issued related to the implementation process for Basel III adoption.

On January 12, 2019, Law No. 21,130 was issued updating the current banking legislation in order to implement the practices promoted by the Basel III agreement, introducing modifications to the General Banking Law ('GBL').

In order to implement the new standard, the CMF began an implementation process by incorporating amendments and new chapters to the Compilation of Accounting Standards ('CAS'), the circulars issued with the amendments and new standards to date are detailed below:

Circular No. 2,281 issued on December 1, 2020, incorporates the new Chapter 21-6 to the CAS 'Determination of assets weighted by credit risk'. The new Chapter establishes the methods that banks must consider to determine their assets weighted by credit risk (hereinafter, APRC), stablishing that banks may either use the proposed standard model or an internal model. The standard method is considered more sensitive to risk, since it has categories that depend on the type of counterparty and different risk elements, together with the possibility to reduce the ponderation used by type of asset, when credit risk mitigators are considered, as may be the case of compensation agreements, guarantees and bonds, financial guarantees or balance sheet compensation.

The standard includes a transitory provision, establishing the determination of assets weighted by credit risk to be carried out in accordance with the current provisions of Title II of Chapter 12-1 of the Updated Compilation of Standards, until November 30, 2021. The new methodology must be applied as of December 1, 2021.

Circular No. 2,283 issued on December 1, 2020, incorporates the new chapter 21-20 into the CAS, which incorporates requirements to promote market discipline and financial transparency through the disclosure of significant and timely information from the entities towards the market (pillar 3), the established conditions operate as a complement to the requirements of Pillar 1 and 2 in line with the implementation of each of these standards, in addition to being in accordance with the provisions of the GBL. The chapter requires banking institutions to publish an independent document, referring exclusively to pillar 3.

The applicability of the circular is as of December 1, 2022, it must be published for the first time in 2023 with information for the January-March quarter of that year.

As of the date of issuance of these Consolidated Financial Statements, Management completed the initial diagnosis for the implementation of Basel III, based on this, it has prepared an implementation plan which is in the process of execution in order to comply with the dates and requirements mentioned above.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

New accounting pronouncements introduced by IASB

1.Standards and interpretations issued on current period

1.1) Disclosure of Accounting Policies, which amends IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements.

On february 12, 2021, the International Accounting Standards Board (IASB) issued 'Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)' with amendments that are intended to help preparers in deciding which accounting policies to disclose in their financial statements.

The amendments are applied prospectively. The amendments to IAS 1 are effective for annual periods beginning on or after 1 January 2023. Earlier application is permitted. Once the entity applies the amendments to IAS 1, it is also permitted to apply the amendments to IFRS Practice Statement 2.

The Bank's Management is currently evaluating the potential impact of the adoption of these amendments in its Interim Consolidated Financial Statements.

1.2) Definition of Accounting Estimates amendments to IAS 8.

On february 12, 2021, the Board issued Definition of Accounting Estimates, which amended IAS 8. The amendments introduced the definition of accounting estimates and included other amendments to IAS 8 to help entities distinguish changes in accounting estimates from changes in accounting policies. The amendment makes the distinction between how an entity should present and disclose different types of accounting changes in its financial statements. Changes in accounting policies must be applied retrospectively while changes in accounting estimates are accounted for prospectively.

The amendments are effective for annual periods beginning on or after 1 January 2023 and changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. Earlier application is permitted.

The Bank's Management is currently evaluating the potential impact of the adoption of these amendments in its Interim Consolidated Financial Statements.

1.3) Covid-19-Related Rent Concessions beyond 30 June 2021 amendment to IFRS 16.

On March 31, 2021 the Board issued Covid-19-Related Rent Concessions beyond 30 June 2021 which extended the availability of the practical expedient in IFRS 16 (the 2021 amendment), that provides lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification by one year. The 2021 amendment resulted applying to rent concessions for which any reduction in lease payments affects only payments originally due on or before 30 June 2022, provided the other conditions for applying the practical expedient are met.

The amendment is effective for annual reporting periods beginning on or after 1 April 2021.

The adoption of the amendment did not have a significant impact on the Consolidated Financial Statements since to date there have been no significant changes on current contracts to make use of this amendment.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

2.Standards and interpretation issued in prior periods, but not yet effective
2.1) IFRS 9 'Financial Instruments' - Final version

On November 12, 2009, the International Accounting Standard Board (IASB) issued IFRS 9, 'Financial Instruments'. On October 28, 2010 its revised version is published, agreeing guidelines on the classification and measures of financial liabilities. On November 19, 2013, see an amendment which includes the new general hedge accounting model. On July 24, 2014, the IASB issued the final version of IFRS 9, which contains the accounting requirements for financial instruments, replacing IAS 39 'Financial Instruments: Recognition and Measurement'.

The standard establishes the following requirements:

Classification and Measurement: Financial assets are to be classified based on the business model in which they are held and the characteristics of their contractual cash flows. The 2014 version of IFRS 9 introduces a measurement category called 'fair value with change in other comprehensive income' for certain debt instruments. Financial liabilities are classified in a manner similar to IAS 39 'Financial Instruments: Recognition and Measurement', however, there are differences in the requirements applicable to the measurement of the entity's own credit risk.

Impairment: The 2014 version of IFRS 9 introduces an 'expected credit loss' model for the measurement of impairment of financial assets, so it is not necessary for an event related to the credit to occur before the recognition of the credit losses.

Hedge accounting: Introduces a new model that is designed to align hedge accounting more closely with risk management, when they cover exposure to financial and non-financial risk.

Derecognition of accounts: The requirements for derecognition of financial assets and liabilities keep the existing requirements of IAS 39 'Financial Instruments: Recognition and Measurement'.

IFRS 9 is effective for annual periods beginning on or after January 1, 2018. Early adoption is permitted.

Amendment to IFRS 9 'Financial instruments'

Published on October 17, 2017, this modification allows more assets to be measured at amortized cost in the previous version of IFRS 9, in particular some prepaid financial assets with negative compensation. Qualified assets, which include some loans and debt securities, which would otherwise have been measured at fair value through profit or loss (FVTPL). To qualify at amortized cost, the negative compensation must be a 'reasonable compensation for early termination of the contract.'

The modifications are effective for the annual periods beginning on January 1, 2019.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

Prepayment Features with Negative Compensation (amendments to IFRS 9)

In October 2017, the IASB issued an amendment to IFRS 9 on 'Advance payments with negative compensation'. These conditions have been successfully modified.

The modifications are effective for annual periods beginning on January 1, 2019.

Amendment toIAS 28 'Investments in associates and joint ventures'

On October 12, 2017, the IASB published Long-Term Participations in Associates and Joint Ventures (Amendments to IAS 28). The amendments clarify that IFRS 9, including its change requirements, involves long-term participation. In addition, when applying IFRS 9 to long-term interests, an entity does not take in the measurement of adjustments to its book values ​​required by IAS 28 (that is, adjustments to the book value of long-term shares that originate from the allocation of investment losses or evaluation of the reduction in accordance with IAS 28).

The retrospectively affected amendments sometimes annual that began on or after January 1, 2019. Early application is allowed. The specific transitional provisions specific to the application for the first time of the amendments coincide with that of IFRS 9.

Bank Management analyzed these amendments/new pronouncements in detail and concluded that, in accordance with the provisions of the CAS in numeral 12 of Chapter A-2, Limitations or Precisions on the Use of General Criteria, it indicates that it will not apply this rule in advance, and furthermore it will not be applied while the CMF does not establish it as a standard of obligatory use for all Banks. With the issuance of the New Compendium of Accounting Standards for Banks (CASB), IFRS 9 should be applied only in those sections where the regulator allows it.

2.2) Sale or Contribution of assets between an investor and its Association or Joint Business (amendments to IFRS 10 and IAS 28)

The amendments to IFRS 10 and IAS 28 address situations where there is a sale or contribution of assets between an investor and its associate or joint venture. Specifically, the amendments provide that gains or losses, resulting from the loss of control of a subsidiary that does not contain a business in a transaction with an associate or joint venture, accounted for using the equity method are recognized in the parent's profit or loss only to the extent of the unrelated investors' interests in that associate or joint venture. Similarly, gains or losses resulting from the remeasurement to fair value of investments held in a former subsidiary (which has become an associate or joint venture that is accounted for using the equity method) are recognized in the results of the former parent only to the extent of the unrelated investors' interests in the new associate or joint venture.

The effective date of the amendments was initially from January 1, 2016, however the IASB on December 17, 2015 indefinitely postponed their entry into force.

Management will evaluate the potential impacts of these amendments, once the new date to be implemented is determined on these amendments.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

2.3) Amendment to IAS 1 'Presentation of Financial Statements' - Classification of liabilities as current or non-current

On January 23, 2020, the IASB published the amendment to IAS 1, which addresses the classification of liabilities and clarifies their presentation as current or non-current. This amendment applies as of January 1, 2023 retroactively and its early application is permitted.

Among the modifications are the following:

• An entity shall classify a liability as current when it does not have a right to postpone its liquidation for at least twelve months following the date of the reporting period. The amendment removes the factor of 'unconditionality' from this right.

• The right to defer settlement of the liability must have substance and must exist at the end of the reporting period. If this right is subject to the entity that covers any condition, such right only exists if it is effectively fulfilled by fulfilling these conditions at the end of the reporting period and can be classified as non-current. The entity must comply with these conditions, although the counterparty does not carry out a testing of these.

• The classification of the liability will not be affected by the probability that the entity exercises its right to defer its settlement. Therefore, if the liability meets the non-current condition specified in the standard, it will be classified as non-current, even if the entity plans to liquidate it in less than 12 months from the period in which it is reported or between the periods in which it is reported. And the one that is reported to the regulator. If any of the above cases occurs, it must be disclosed in the Financial Statements to understand the impact of the entity's financial position.

• The liability is understood as liquid when the entity extinguishes the obligation to control its effective counterparty, other economic resources, or its own equity instruments.

The adoption of this amendment will not have a material impact on the Interim Consolidated Financial Statements. The Bank must present its financial statements in accordance with the regulatory framework set out on section II.3 of Chapter C-1, Financial Statements annual, of the CAS, which presents the Statement of Financial Situation that the Bank must use, therefore, this amendment will not affect the preparation of the factors affected by the entity.

2.4) Amendments to IFRS 3 to update a reference to the Conceptual Framework

On May 14, 2020, the IASB published, amendments to IFRS 3 'Business Combinations' that update an outdated reference in IFRS 3 without significantly changing its requirements.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

The changes in Reference to the Conceptual Framework (Amendments to IFRS 3):

- update IFRS 3 so that it refers to the 2018 Conceptual Framework instead of the 1989 Framework;
- add to IFRS 3 a requirement that, for transactions and other events within the scope of IAS 37 or IFRIC 21, an acquirer applies IAS 37 or IFRIC 21 (instead of the Conceptual Framework) to identify the liabilities it has assumed in a business combination; and
- add to IFRS 3 an explicit statement that an acquirer does not recognize contingent assets acquired in a business combination.

The amendments published are effective for annual periods beginning on or after 1 January 2022. Early application is permitted if an entity also applies all other updated references (published together with the updated Conceptual Framework) at the same time or earlier.

The adoption of the amendment will not have material impacts on the Interim Consolidated Financial Statements.

2.5) Amendments to IAS 16 'Property, Plant and Equipment - Proceeds before Intended Use

On May 14, 2020, the IASB published amendments to IAS 16 regarding proceeds from selling items produced while bringing an asset into the location and condition necessary for it to be capable of operating in the manner intended by management.

Amends the standard to prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling such items, and the cost of producing those items, in profit or loss.

The amendments is effective for annual periods beginning on or after 1 January 2022. Early application is permitted

The Bank's Management is currently evaluating the potential impact of the adoption of these amendments in its Interim Consolidated Financial Statements.

2.6) Amendments to IAS 37 'Onerous Contracts - Cost of Fulfilling a Contract

On May 14, 2020, the IASB published 'Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37) amending the standard regarding costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.

The changes in Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37) specify that the 'cost of fulfilling' a contract comprises the 'costs that relate directly to the contract'. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labor, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract).

The amendments published today are effective for annual periods beginning on or after 1 January 2022. Early application is permitted.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 1 - General Information and Summary of Significant Accounting Policies, continued

The Bank's Management is currently evaluating the potential impact of the adoption of these amendments in its Interim Consolidated Financial Statements.

2.7) Annual improvements to IFRS standards 2018-2020

On May 14, 2020, the IASB published Annual Improvements to IFRS Standards 2018-2020 makes amendments to the following standards:

IFRS 1 First-time Adoption of International Financial Reporting Standards - Subsidiary as a first-time adopter. The amendment permits a subsidiary that applies paragraph D16(a) of IFRS 1 to measure cumulative translation differences using the amounts reported by its parent, based on the parent's date of transition to IFRSs.

IFRS 9 Financial Instruments- Fees in the '10 per cent' test for derecognition of financial liabilities. The amendment clarifies which fees an entity includes when it applies the '10 per cent' test in paragraph B3.3.6 of IFRS 9 in assessing whether to derecognize a financial liability. An entity includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either the entity or the lender on the other's behalf.

IFRS 16 Leases - Lease incentives. The amendment to Illustrative Example 13 accompanying IFRS 16 removes from the example the illustration of the reimbursement of leasehold improvements by the lessor in order to resolve any potential confusion regarding the treatment of lease incentives that might arise because of how lease incentives are illustrated in that example.

IAS 41 Agriculture - Taxation in fair value measurements. The amendment removes the requirement in paragraph 22 of IAS 41 for entities to exclude taxation cash flows when measuring the fair value of a biological asset using a present value technique. This will ensure consistency with the requirements in IFRS 13.

The amendments to IFRS 1, IFRS 9, and IAS 41 published today are all effective for annual periods beginning on or after 1 January 2022. Early application is permitted.

The amendment to IFRS 16 only regards an illustrative example, so no effective date is stated.

The Bank's Management is currently evaluating the potential impact of the adoption of these amendments in its Interim Consolidated Financial Statements.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 2 - Accounting Changes

There are no significant accounting changes in these Interim Consolidated Financial Statements.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 3 - Significant Events

As of March 31, 2021, the following significant events have influenced the operations of the Bank and its subsidiaries or the Interim Consolidated Financial Statements:

ITAÚ CORPBANCA

Changes in the Board of Directors

In ordinary session held on January 27, 2021, the Board of Directors of Itaú Corpbanca was informed and resolved to accept the resignation of director Mr. Caio Ibrahim David, effective as of the same date. In his replacement, the Board of Directors agreed to appoint Mr. Matias Granata, who served as a director until the Annual Ordinary Shareholder's Meeting held on March 18, 2021 and was elected as a director in the same meeting.

Annual Ordinary Shareholders' Meeting Agreements

At the Ordinary Shareholders' Meeting of Itaú Corpbanca, held on March 18, 2021, as stablished on article 78 of Law No. 18,046, dividends will be paid exclusively from the net profits for the year after absorbing the accumulated losses reported at the end of the 2020 financial year, the Bank presented a loss attributable to the Bank's owners of MCh$925,479, as a result, no dividends were distributed corresponding to the 2020 financial year.

At the Ordinary Shareholders' Meeting, among other matters, it was also approved the appointment of Mr. Rogerio Braga and Matias Granata as directors of the Bank, replacing Mr. Andrés Bucher Cepeda and Caio Ibrahim David respectively.

Discontinuation of the net investment in Itaú Corpbanca Colombia hedge

During January 2021, by decision of Management, the hedge of net investment in Itaú Corpbanca Colombia was discontinued. The impact of discontinuing the hedge relationship was reclassified from valuation accounts to reserves, without generating an effect on the Consolidated Statement of Income.

New alliance between Itaú and Rappi

On March 29, 2021 the Bank announced to the market a new alliance with Rappi, as part of our digital transformation strategy. This agreement aims to revolutionize the local financial market with simple, innovative and unique digital products, allowing an increasing number of individuals to access new financial solutions in an agile and digital way. Itaú and Rappi expect the new offer of digital financial products and services to be available during the third quarter of 2021, through the new business model resulting from this alliance.

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Itaú Corpbanca and subsidiaries

Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 3 - Significant Events, continued

ITAÚ CORPBANCA COLOMBIA S.A.

Profit Distribution 2020

Itaú Corpbanca Colombia presented a loss of MCh$192,966 million for year of 2020, given the loss presented for the year no profits were distributed. The loss will be recorded in the financial statements for 2021 as losses from previous years.

Annual Ordinary Shareholders' Meeting Agreements

On March 18, 2021, the Ordinary Shareholders' Meeting of Itaú Corpbanca Colombia S.A., approved, among other matters, the financial statements as of December 31, 2020 and the other reports presented. Additionally, on the meeting, it was approved the re-election of all the members of the Board of Directors, appointed at the Ordinary Shareholders' Meeting held the previous year.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 4 - Reporting Segments

The information reported by segments is determined by the Bank on the basis of its operating segments (Chile, thatincludes the New York Branch, and Colombia), which are mainly differentiated by the risks and rewards that affect them.

The reporting segments and the criteria used to inform the highest authority of the Bank on the decision making of the operation are in accordance with what is set forth in IFRS 8 'Operating Segments'.

a. Segments

In accordance with the foregoing, the descriptions of each operating segment are as follows:

(i)Chile

The Bank's business activities in Chile take place mainly in the local market. It has strategically aligned its operations into the following five business areas that are directly related to its customers' needs and the Bank's strategy: 1) Wholesale Banking (a) Corporate Banking, (b) Large Companies, and (c) Real Estate and Construction; 2) Retail Banking (a) Itaú Private Bank, (b) Itaú Companies, (c) Itaú Personal Bank (d) Itaú and (e) Banco Condell; 3) Treasury; 4) Corporate; and 5) Other Financial Services.

The Bank manages these business areas using a reporting system for internal profitability. The operating results are regularly reviewed by the entity's highest decision-making authority for operating decisions as one single Cash Generating Unit, to decide on the resource allocation for the segment and evaluate its performance.

(ii)

Colombia

Colombia has been identified as a separate operating segment based on its business activities. Its operating results are reviewed regularly by the entity's highest decision-making authority for operating decisions as one single cash generating unit, to decide about resource allocation for the segment and evaluate its performance, and separate financial information is available for it.

The commercial activities of this segment are carried out by Banco Itaú Corpbanca Colombia S.A. and its subsidiaries.

The Bank does not record transactions with a single external customer that generates income equal to or greater than 10% of total income during the three-month periods ended March 31, 2021 and 2020.

b. Geographic Information

Itaú Corpbanca reports revenue by segment from external customers that is:

attributed to the entity's country of domicile and
attributed, in aggregate, to all foreign countries where the entity obtains revenue.

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Itaú Corpbanca and subsidiaries

Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 4 - Reporting Segments, continued

When income from ordinary activities from external clients attributed to a particular foreign country is significant, they will be disclosed separately. According to the previous, the group operates in two main geographical areas: Chile and Colombia. Chile segment includes the operations carried out by Itaú Corpbanca New York Branch and Colombia segment includes the operations carried out by Itaú (Panamá) S.A., and Itaú Corredores de Seguros Colombia S.A.

The information on interest income and inflation-indexation adjustments for the three-month periods ended March 31, 2021 and 2020, of the aforementioned geographical areas is as follows:

2021

2020

Chile

Colombia

Totals

Chile

Colombia

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Interest income

279,526

85,568

365,094

321,989

120,169

442,158

Interest expense

(106,697)

(30,563)

(137,260)

(166,137)

(58,051)

(224,188)

Net interest income

172,829

55,005

227,834

155,852

62,118

217,970

c. Information on assets, liabilities, and profits and losses

Segment information on assets, liabilities as of March 31, 2021 and December 31, 2020, profits and losses for the three- month period ended on March 31, 2021 and 2020, is presented in accordance with the main items described in the Compendium of Accounting Standards issued by the CMF.

c.1) Assets and liabilities

As of March 31, 2021

As of December 31, 2020

Notes

Chile

Colombia

Totals

Chile

Colombia

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

ASSETS

Cash and deposits in banks

5

3,047,875

243,527

3,291,402

2,761,202

327,870

3,089,072

Cash items in process of collection

5

431,516

3,002

434,518

173,099

93

173,192

Trading investments

6

199,389

239,782

439,171

143,330

437,039

580,369

Investments under resale agreements

7

63,842

4,889

68,731

84,173

21,407

105,580

Financial derivative contracts

8

2,707,502

106,919

2,814,421

3,817,286

165,517

3,982,803

Interbank loans, net and loans and accounts receivable from customers, net

9-10

17,819,367

4,009,528

21,828,895

17,572,588

4,119,100%

21,692,384

Available for sale investments

11

2,217,219

587,428

2,804,647

3,353,239

611,481

3,964,720

Held to maturity investments

11

-

100,338

100,338

7,297

104,346

111,643

Investments in companies

12

8,368

3,598

11,966

8,710

3,273

11,983

Intangibles (*)

13

675,718

33,879

709,597

682,695

35,988

718,683

Fixed assets

14

30,954

21,840

52,794

32,161

23,859

56,020

Right of use asset under lease agreements

15

135,527

26,090

161,617

142,108

28,495

170,603

Current taxes

16

55,376

22,379

77,755

44,976

19,723

64,699

Deferred taxes

16

252,875

50,644

303,519

263,934

50,178

314,112

Other assets

17

445,193

70,291

515,484

513,838

88,931

602,769

Totals

28,090,721

5,524,134

33,614,855

29,600,636

6,037,996

35,638,632

(*)Includes Goodwill generated from the business combination of Banco Itaú Chile and Corpbanca for MCh$492,512 as of March 31, 2021 and of December 31, 2020.

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Itaú Corpbanca and subsidiaries

Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 4 - Reporting Segments, continued

As of March 31, 2021

As of December 31, 2020

Notes

Chile

Colombia

Totals

Chile

Colombia

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

LIABILITIES

Deposits and other demand liabilities

18

3,987,653

2,133,705

6,121,358

3,939,501

2,257,905

6,197,406

Cash items in process of being cleared

5

397,773

29

397,802

154,231

1

154,232

Obligations under repurchase agreements

7

242,216

102,371

344,587

399,593

239,258

638,851

Time deposits and other time liabilities

18

9,178,661

1,355,372

10,534,033

9,984,010

1,449,054

11,433,064

Financial derivative contracts

8

2,442,950

91,612

2,534,562

3,494,611

178,980

3,673,591

Interbank borrowings

19

3,492,490

402,356

3,894,846

3,393,160

405,818

3,798,978

Debt instruments issued

20

5,568,530

697,744

6,266,274

5,472,392

732,464

6,204,856

Other financial liabilities

20

23,393

-

23,393

13,123

-

13,123

Obligations for lease

15

119,161

24,726

143,887

125,265

26,620

151,885

Current taxes

16

734

883

1,617

596

1,170

1,766

Deferred taxes

16

16

104

120

-

237

237

Provisions

21

177,281

101,400

278,681

181,003

101,280

282,283

Other liabilities

22

603,492

80,560

684,052

619,955

80,079

700,034

Totals

26,234,350

4,990,862

31,225,212

27,777,440

5,472,866

33,250,306

c.2) Income for the three-month periods ended March 31, 2021 and 2020:

For the three-month periods ended March 31,

2021

2020

Notes

Chile

Colombia

Totals

Chile

Colombia

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Net interest income

25

172,830

55,004

227,834

155,852

62,118

217,970

Net fee and commission income

26

30,655

6,071

36,726

31,353

7,879

39,232

Net income (expense) from financial operations

27

28,573

30,813

59,386

45,818

136,667

182,485

Net foreign exchange gain (loss)

28

18,964

(17,268)

1,696

44,776

(129,946)

(85,170)

Other operating income

1,926

4,504

6,430

10,200

6,368

16,568

Provision for loan losses

29

(22,827)

(16,558)

(39,385)

(83,249)

(20,491)

(103,740)

NET OPERATING PROFIT

230,121

62,566

292,687

204,750

62,595

267,345

Depreciation and amortization

32

(20,437)

(4,138)

(24,575)

(21,547)

(10,813)

(32,360)

Operating expenses (*)

(105,020)

(43,377)

(148,397)

(95,665)

(47,261)

(142,926)

OPERATING INCOME (LOSS)

104,664

15,051

119,715

87,538

4,521

92,059

Income (loss) from investments in companies

12

(342)

1,782

1,440

622

526

1,148

Income taxes

16

(23,899)

(5,577)

(29,476)

(64,452)

(1,108)

(65,560)

CONSOLIDATED INCOME (LOSS) FOR THE PERIOD

80,423

11,256

91,679

23,708

3,939

27,647

(*)Includes personnel salaries and expenses, administrative expenses, impairment, and other operating expenses.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 5 - Cash and Cash Equivalents

a. Cash and Cash Equivalents detail

The detail of balances included under cash and cash equivalents is as follows:

As of March 31,

As of December 31,

2021

2020

MCh$

MCh$

Cash and deposits in banks

Cash

224,602

254,200

Deposits in the Central Bank of Chile

2,244,319

1,067,421

Deposits in local banks

15,904

27,017

Deposits in foreign banks

806,577

1,740,434

Subtotals cash and deposits in banks

3,291,402

3,089,072

Cash items in process of collection, net (1)

36,716

18,960

Highly liquid financial instruments (2)

247,046

1,337,754

Investments under resale agreements (3)

24,040

60,470

Totals cash and cash equivalents

3,599,204

4,506,256

(1) See letter b. 'Cash in process of collection and in process of being cleared' on the next page.

(2) Highly liquid financial instruments: Corresponds to those financial instruments included in the trading and available-for-sale portfolios with maturities that do not exceed three months from the acquisition date and the detail is as follows:

As of March 31,

As of December 31,

Note

2021

2020

MCh$

MCh$

Highly liquid financial instruments

Trading investments

6

167,617

132,043

Available for sale investments

11

79,429

1,205,711

Totals

247,046

1,337,754

(3) Investments under resale agreements: Corresponds to resale agreements with maturities that do not exceed three months from the acquisition date, which are presented under the item 'Investments under resale agreements' of the asset in the Interim Consolidated Statement of Financial Position. The detail is as follows:

As of March 31,

As of December 31,

Note

2021

2020

MCh$

MCh$

Investments under resale agreements

7 a)

24,040

60,470

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 5 - Cash and Cash Equivalents, continued

b. Cash in process of collection and in process of being cleared

Cash items in process of collection and in process of being cleared represent domestic transactions, which have not been processed through the central domestic clearinghouse, or international transactions that may be delayed in settlement due to timing differences. The detail of these balances is as follows:

As of March 31,

As of December 31,

2021

2020

MCh$

MCh$

Assets

Documents held by other banks (documents to be cleared)

26,623

37,030

Funds receivable

407,895

136,162

Subtotals assets

434,518

173,192

Liabilities

Funds payable

397,802

154,232

Subtotals liabilities

397,802

154,232

Cash items in process of collection, net

36,716

18,960

c. Other operating cash flows

Based on the nature of its activities, the Bank considers that its funding has a direct relationship with its loan and investing portfolio; for such purpose all those activities are taken into consideration to determine, approve and monitor the financial strategies that guide the Bank with respect to the composition of its assets and liabilities, cash inflows and outflows and transactions with financial instruments.

Finally, the Bank, based on its overall business strategy, considers that gains and losses derived from these transactions are part of the main revenue generating activities and core business, and that the presentation of the cash flows from those items under operating activities consequently shows consistency between our Interim Consolidated Statement of Income and our Interim Consolidated Statement of Cash Flows.

Examples of cash flows from operating activities are:

(i) Investments under resale agreements and obligations under repurchase agreements. These items represent the cash flows (collections and payments) corresponding to the purchase and sale of obligations and securities lending associated with financial intermediation activities (see Note 7).

(ii) Investments portfolio. This item represents the cash flows (collections and payments) of our trading and non-trading portfolio related financial instruments (see Note 6 and Note 11).

(iii) Foreign borrowings and repayment of foreign borrowings. These items represent the cash flows (collections and payments) of obligations with foreign banks (see note 19) for the financing of foreign trade loans, which are included as part of the following items: 'Loans and receivables from banks' (see Note 9) and 'Loans and receivables from customers' (see Note 10).

(iv) Increase and repayment of other borrowings. These items represent the cash flows (collections and payments) arising from the obligations corresponding to financing or operations specific to the business (see Note 20).

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 6 - Trading Investments

The detail of the financial instruments classified as trading investments is as follows:

As of March 31,

As of December 31,

2021

2020

MCh$

MCh$

Chilean Central Bank and Government securities

Chilean Central Bank bonds

80,017

21,369

Other Government securities

86,367

86,673

Other Chilean securities

Bonds

46

271

Other securities

576

-

Foreign financial securities

Bonds

226,210

432,178

Other securities

13,572

4,861

Investments in mutual funds

Funds managed by related entities

32,383

35,017

Funds managed by third parties

-

-

Totals

439,171

580,369

As of March 31, 2021, the trading portfolio financial assets include MCh$167,617 (MCh$132,043 as of December 31, 2020) with maturities which do not exceed three months from the acquisition date and are considered as cash equivalents (see Note 5).

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 7 - Investments under Resale Agreements and Obligations under Repurchase Agreements

a. The Bank purchases financial instruments to resell them on a future date. As of March 31, 2021 and December 31, 2020 the instruments acquired under agreements to resell are as follows:

As of March 31, 2021

Between 3

Up to

months and 1

3 months

year

Over 1 year

Totals

MCh$

MCh$

MCh$

MCh$

Chilean Central Bank and Government securities

Chilean Central Bank instruments

-

-

-

-

Government securities

20,535

43,307

-

63,842

Other Chilean Central Bank and Government securities

-

-

-

-

Other Chilean securities

Bonds

-

-

-

-

Notes

-

-

-

-

Other securities

-

-

-

-

Foreign financial securities

Foreign financial securities

-

-

1,384

1,384

Other foreign instruments

3,505

-

-

3,505

Totals

24,040

43,307

1,384

68,731

As of December 31, 2020

Between 3

Up to

months and 1

3 months

year

Over 1 year

Totals

MCh$

MCh$

MCh$

MCh$

Chilean Central Bank and Government securities

Chilean Central Bank instruments

-

-

-

-

Government securities

-

43,633

-

43,633

Other Chilean Central Bank and Government securities

-

-

-

-

Other Chilean securities

Bonds

40,540

-

-

40,540

Notes

-

-

-

-

Other securities

-

-

-

-

Foreign financial securities

Foreign financial securities

14,072

-

1,477

15,549

Other foreign instruments

5,858

-

-

5,858

Totals

60,470

43,633

1,477

105,580

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Itaú Corpbanca and subsidiaries

Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 7 - Investments under Resale Agreements and Obligations under Repurchase Agreements, continued

b. As of March 31, 2021 and December 31, 2020 the instruments acquired under agreements to repurchase are as follows:

As of March 31, 2021

Between 3

Up to

months and 1

3 months

year

Over 1 year

Totals

MCh$

MCh$

MCh$

MCh$

Chilean Central Bank and Government securities

Chilean Central Bank instruments

59,446

-

-

59,446

Government securities

180,232

-

-

180,232

Other Chilean Central Bank and Government securities

-

-

-

-

Other Chilean securities

Bonds

2,538

-

-

2,538

Notes

-

-

-

-

Other securities

-

-

-

-

Foreign financial securities

-

Foreign financial securities

-

-

-

-

Other foreign instruments

102,371

-

-

102,371

Totals

344,587

-

-

344,587

As of December 31, 2020

Between 3

Up to

months and 1

3 months

year

Over 1 year

Totals

MCh$

MCh$

MCh$

MCh$

Chilean Central Bank and Government securities

Chilean Central Bank instruments

310,565

-

-

310,565

Government securities

49,337

-

-

49,337

Other Chilean Central Bank and Government securities

-

-

-

-

Other Chilean securities

Bonds

39,691

-

-

39,691

Notes

-

-

-

-

Other securities

-

-

-

-

Foreign financial securities

Foreign financial securities

-

-

-

-

Other foreign instruments

239,258

-

-

239,258

Totals

638,851

-

-

638,851

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 8 - Financial Derivative Contracts and Hedge Accounting

a. Derivatives held for trading and hedge accounting

The Bank and its subsidiaries use the following derivate financial instruments for hedge accounting and trading purposes, which, in order to capture the credit risk in the valuation, are adjusted to reflect the CVA (Credit Value Adjustment) and DVA (Debit Value Adjustment). The detail of these instruments is presented below:

As of March 31,

As of December 31,

2021

2020

Assets

Liabilities

Assets

Liabilities

MCh$

MCh$

MCh$

MCh$

Derivatives held for hedge accounting

147,191

76,650

306,472

162,450

Derivatives held for trading

2,667,230

2,457,912

3,676,331

3,511,141

Totals

2,814,421

2,534,562

3,982,803

3,673,591

a.1) Financial derivatives assets

As of March 31, 2021

Notional

Up to

Between 3 months

Over

Fair

3 months

and 1 year

1 year

value

MCh$

MCh$

MCh$

MCh$

Currency forwards

5,391,946

1,944,948

466,129

199,712

Currency swaps

230,469

1,135,499

8,705,544

847,778

Interest rate swaps

1,766,585

6,381,113

26,156,043

1,766,213

Call currency options

10,575

16,943

-

366

Put currency options

11,021

7,201

-

352

Totals

7,410,596

9,485,704

35,327,716

2,814,421

As of December 31, 2020

Notional

Up to

Between 3 months

Over

Fair

3 months

and 1 year

1 year

value

MCh$

MCh$

MCh$

MCh$

Currency forwards

7,882,839

2,358,854

417,178

472,208

Currency swaps

246,599

932,372

8,656,771

938,762

Interest rate swaps

3,828,930

6,424,682

26,020,406

2,570,553

Call currency options

13,402

15,483

-

195

Put currency options

7,797

10,514

-

1,085

Totals

11,979,567

9,741,905

35,094,355

3,982,803

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Itaú Corpbanca and subsidiaries

Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 8 - Financial Derivative Contracts and Hedge Accounting, continued

a.2) Financial derivatives liabilities

As of March 31, 2021

Notional

Up to

Between 3 months

Over

Fair

3 months

and 1 year

1 year

value

MCh$

MCh$

MCh$

MCh$

Currency forwards

5,099,078

3,682,721

1,707,904

184,131

Currency swaps

509,401

966,105

7,651,612

695,587

Interest rate swaps

2,283,665

6,169,063

26,944,392

1,653,454

Call currency options

10,563

14,678

-

811

Put currency options

4,776

4,111

-

579

Totals

7,907,483

10,836,678

36,303,908

2,534,562

As of December 31, 2020

Notional

Up to

Between 3 months

Over

Fair

3 months

and 1 year

1 year

value

MCh$

MCh$

MCh$

MCh$

Currency forwards

7,913,739

1,989,333

935,565

433,863

Currency swaps

335,192

953,275

7,480,516

775,122

Interest rate swaps

3,509,633

6,205,021

27,404,647

2,463,249

Call currency options

9,434

15,404

-

271

Put currency options

5,753

5,786

-

1,086

Totals

11,773,751

9,168,819

35,820,728

3,673,591

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 8 - Financial Derivative Contracts and Hedge Accounting, continued

a.3) Portfolio detail

As of March 31, 2021 and December 31, 2020 the portfolio of financial derivative instruments for hedge accounting and trading purposes are as follows:

As of March 31, 2021

Notional totals

Fair Value

Up to

Between 3 months

3 months

and 1 year

Over 1 year

Assets

Liabilities

MCh$

MCh$

MCh$

MCh$

MCh$

Derivatives held for hedge accounting

243,665

2,280,117

2,987,417

147,191

76,650

Fair value hedge

Currency forwards

-

-

-

-

-

Currency swaps

-

-

75,783

13,479

-

Interest rate swaps

-

221,946

1,927,394

125,668

47,935

Subtotals

-

221,946

2,003,177

139,147

47,935

Cash flows hedge

Currency forwards

72,276

1,936,860

952,930

2,159

25,018

Currency swaps

-

-

-

-

-

Interest rate swaps

-

44,291

31,310

2,244

234

Subtotals

72,276

1,981,151

984,240

4,403

25,252

Net investment in a foreign operation hedge

Currency forwards

171,389

77,020

-

3,641

3,463

Subtotals

171,389

77,020

-

3,641

3,463

Derivatives held for trading

15,074,414

18,042,265

68,644,207

2,667,230

2,457,912

Currency forwards

10,247,359

3,613,789

1,221,103

193,912

155,650

Currency swaps

739,870

2,101,604

16,281,373

834,299

695,587

Interest rate swaps

4,050,250

12,283,939

51,141,731

1,638,301

1,605,285

Call currency options

21,138

31,621

-

366

811

Put currency options

15,797

11,312

-

352

579

Subtotals

15,074,414

18,042,265

68,644,207

2,667,230

2,457,912

Totals

15,318,079

20,322,382

71,631,624

2,814,421

2,534,562

As of December 31, 2020

Notional totals

Fair Value

Up to

Between 3 months

3 months

and 1 year

Over 1 year

Assets

Liabilities

MCh$

MCh$

MCh$

MCh$

MCh$

Derivatives held for hedge accounting

3,704,562

965,569

2,261,626

306,472

162,450

Fair value hedge

Currency forwards

-

-

-

-

-

Currency swaps

-

-

74,894

9,666

-

Interest rate swaps

-

201,193

1,960,759

203,913

61,705

Subtotals

-

201,193

2,035,653

213,579

61,705

Cash flows hedge

Currency forwards

1,657,848

716,842

178,107

3,919

33,112

Currency swaps

-

-

-

-

-

Interest rate swaps

4,000

29,233

47,866

2,094

238

Subtotals

1,661,848

746,075

225,973

6,013

33,350

Net investment in a foreign operation hedge

Currency forwards

2,042,714

18,301

-

86,880

67,395

Subtotals

2,042,714

18,301

-

86,880

67,395

Derivatives held for trading

20,048,756

17,945,155

68,653,457

3,676,331

3,511,141

Currency forwards

12,096,016

3,613,044

1,174,636

381,409

333,356

Currency swaps

581,791

1,885,647

16,062,393

929,096

775,122

Interest rate swaps

7,334,563

12,399,277

51,416,428

2,364,546

2,401,306

Call currency options

22,836

30,887

-

195

271

Put currency options

13,550

16,300

-

1,085

1,086

Subtotals

20,048,756

17,945,155

68,653,457

3,676,331

3,511,141

Totals

23,753,318

18,910,724

70,915,083

3,982,803

3,673,591

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 9 - Interbank Loans

a) As of March 31, 2021 and December 31, 2020 interbank loans are detailed as follows:

As of March31,

As of December 31,

2021

2020

MCh$

MCh$

Local Banks

Loans to local banks

-

-

Allowances for loans losses

-

-

Subtotals

-

-

Foreign Banks

Interbank cash loans

8,634

-

Loans to foreign banks

-

-

Non-transferable deposits with foreign banks

7,212

7,131

Allowances for loans losses

(46)

(16)

Subtotals

15,800

7,115

Chilean Central Bank

Deposits with the Chilean Central Bank not available

-

-

Subtotals

-

-

Totals

15,800

7,115

b) Movements in allowances and impairment for local and foreign interbank loans for the three-month period ended on March 31, 2021 and for the year ended December 31, 2020 are detailed as follows:

As of March 31, 2021

As of December 31, 2020

Banks

Banks

Local

Foreign

Totals

Local

Foreign

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Balances at the beginning of the period/year

-

(16)

(16)

-

(430)

(430)

Charge-offs

-

-

-

-

-

-

Allowances established

-

(402)

(402)

-

(407)

(407)

Allowances released

-

371

371

-

800

800

Impairment

-

-

-

-

-

-

Exchange differences

-

1

1

-

21

21

Balances at end of period / year

-

(46)

(46)

-

(16)

(16)

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 10 - Loans and accounts receivable from customers

a) Loans and accounts receivable from customers

As of March 31, 2021 and December 31, 2020 the loan portfolio is detailed as follows:

Assets before allowances

Allowances

Normal

Impaired

Individual

Group

Net assets

As of March 31, 2021

portfolio

portfolio

Totals

allowances

allowances

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Commercial loans

Commercial loans

10,932,955

1,265,681

12,198,636

(546,364)

(60,183)

(606,547)

11,592,089

Foreign trade loans

866,475

1,929

868,404

(19,668)

(2,017)

(21,685)

846,719

Checking accounts debtors

65,217

10,045

75,262

(4,308)

(3,731)

(8,039)

67,223

Factoring transactions

143,346

346

143,692

(3,660)

(139)

(3,799)

139,893

Student loans

532,959

64,606

597,565

-

(17,432)

(17,432)

580,133

Commercial leasing transactions

848,905

67,999

916,904

(19,380)

(3,784)

(23,164)

893,740

Other commercial loans and receivables

17,583

2,067

19,650

(477)

(1,536)

(2,013)

17,637

Subtotals

13,407,440

1,412,673

14,820,113

(593,857)

(88,822)

(682,679)

14,137,434

Mortgage loans

Loans with mortgage finance bonds

20,350

1,813

22,163

-

(158)

(158)

22,005

Endorsable mortgage mutual loans

80,586

6,873

87,459

-

(699)

(699)

86,760

Other mortgage mutual loans

4,751,795

205,457

4,957,252

-

(32,480)

(32,480)

4,924,772

Mortgage leasing transactions

277,698

9,708

287,406

-

(10,788)

(10,788)

276,618

Other mortgage loans and receivables

69,350

1,483

70,833

-

(531)

(531)

70,302

Subtotals

5,199,779

225,334

5,425,113

-

(44,656)

(44,656)

5,380,457

Consumer loans

Installment consumer loans

1,723,561

124,288

1,847,849

-

(146,875)

(146,875)

1,700,974

Checking account debtors

109,265

9,594

118,859

-

(9,378)

(9,378)

109,481

Credit card balances

462,980

9,674

472,654

-

(17,793)

(17,793)

454,861

Consumer leasing transactions

1,032

44

1,076

-

(98)

(98)

978

Other consumer loans and receivables

30,216

693

30,909

-

(1,999)

(1,999)

28,910

Subtotals

2,327,054

144,293

2,471,347

-

(176,143)

(176,143)

2,295,204

Totals

20,934,273

1,782,300

22,716,573

(593,857)

(309,621)

(903,478)

21,813,095

Assets before allowances

Allowances

Normal

Impaired

Individual

Group

Net assets

As of December 31, 2020

portfolio

portfolio

Totals

allowances

allowances

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Commercial loans

Commercial loans

10,907,500

1,267,481

12,174,981

(555,343)

(59,475)

(614,818)

11,560,163

Foreign trade loans

846,209

3,290

849,499

(18,933)

(3,048)

(21,981)

827,518

Checking accounts debtors

59,545

10,581

70,126

(4,214)

(3,993)

(8,207)

61,919

Factoring transactions

155,156

384

155,540

(3,941)

(176)

(4,117)

151,423

Student loans

533,813

74,475

608,288

-

(17,980)

(17,980)

590,308

Commercial leasing transactions

868,947

72,350

941,297

(20,067)

(4,335)

(24,402)

916,895

Other commercial loans and receivables

26,076

2,087

28,163

(868)

(1,536)

(2,404)

25,759

Subtotals

13,397,246

1,430,648

14,827,894

(603,366)

(90,543)

(693,909)

14,133,985

Mortgage loans

Loans with mortgage finance bonds

21,550

1,795

23,345

-

(114)

(114)

23,231

Endorsable mortgage mutual loans

83,039

7,417

90,456

-

(515)

(515)

89,941

Other mortgage mutual loans

4,563,173

208,861

4,772,034

-

(29,411)

(29,411)

4,742,623

Mortgage leasing transactions

295,271

12,303

307,574

-

(11,718)

(11,718)

295,856

Other mortgage loans and receivables

72,881

1,634

74,515

-

(329)

(329)

74,186

Subtotals

5,035,914

232,010

5,267,924

-

(42,087)

(42,087)

5,225,837

Consumer loans

Installment consumer loans

1,724,931

141,908

1,866,839

-

(137,770)

(137,770)

1,729,069

Checking account debtors

113,626

10,383

124,009

-

(8,407)

(8,407)

115,602

Credit card balances

456,053

11,571

467,624

-

(18,821)

(18,821)

448,803

Consumer leasing transactions

1,279

188

1,467

-

(182)

(182)

1,285

Other consumer loans and receivables

32,033

1,281

33,314

-

(2,626)

(2,626)

30,688

Subtotals

2,327,922

165,331

2,493,253

-

(167,806)

(167,806)

2,325,

Totals

20,761,082

1,827,989

22,589,071

(603,366)

(300,436)

(903,802)

21,685,269

Unimpaired portfolio

This includes individual debtors in the Normal portfolio (A1 to A6) and the Substandard portfolio (B1 to B2). For group assessed loans, it includes the Normal portfolio.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 10 -Loans and accounts receivable from customers, continued

Impaired portfolio

This includes individually assessed debtors in the Non-compliant portfolio (C1 to C6) and the Substandard portfolio (B3 to B4). For group assessed loans, it includes the Non-compliant portfolio.

As of March 31, 2021, the Bank pledged as collateral to the Central Bank of Chile (BCCh) loans from the commercial portfolio in order to access the new Conditional Funding Facility (FCIC). The program includes access to 4-year funds at the BCCh overnight rate, with available funds size increasing as a function of additional loans pledged as collateral. The pledged loans have an outstanding principal balance of MCh$1,903,478 (MCh$1,766,997 as of December 30, 2020). Additional disclosures on FCIC are included in Notes 19 and 23, letter e).

b) Allowances

Movements in credit risk allowances for the three-month period ended March 31, 2021 and for the year ended on December 31, 2020 are detailed as follows:

Individual

Group

allowances

allowances

Totals

MCh$

MCh$

MCh$

Balances as of January 1, 2021

603,366

300,436

903,802

Portfolio charge-offs

Commercial loans

(11,640)

(9,530)

(21,170)

Mortgage loans

-

(2,541)

(2,541)

Consumer loans

-

(29,591)

(29,591)

Total charge-offs

(11,640)

(41,662)

(53,302)

Allowances established

43,170

87,456

130,626

Allowances released

(26,266)

(26,191)

(52,457)

Allowances used

-

(427)

(427)

Exchange differences

(14,773)

(9,991)

(24,764)

Balances as of March 31, 2021

593,857

309,621

903,478

Individual

Group

allowances

allowances

Totals

MCh$

MCh$

MCh$

Balances as of January 1, 2020

444,184

336,234

780,418

Portfolio charge-offs

Commercial loans

(101,121)

(35,500)

(136,621)

Mortgage loans

-

(9,006)

(9,006)

Consumer loans

-

(153,187)

(153,187)

Total charge-offs

(101,121)

(197,693)

(298,814)

Allowances established

411,540

298,350

709,890

Allowances released

(134,114)

(122,482)

(256,596)

Allowances used

-

(2,123)

(2,123)

Exchange differences

(17,123)

(11,850)

(28,973)

Balances as of December 31, 2020

603,366

300,436

903,802

c) Portfolio sales

As of March 31, 2021, the Bank sold part of its current and written-off loan portfolios, recognizing a loss of Ch$67 million. During the year ended December 31, 2020, no sales of this type were performed.

Additionally, as of March 31, 2020, the Bank sold part of its Government guaranteed students loan portfolio (Law No. 20,027) which generated a loss, net of provisions for loan losses, of Ch$45 million (a loss of Ch$458 million as of March 31, 2019). The provisions for loan losses of the sold portfolio amount to Ch$457 million.

These effects are included in 'Net income (expense) from financial operations' in the Interim Consolidated Statement of Income for the period (see Note 27).

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 11 - Investment Instruments

a) Investment instruments

As of March 31, 2021 and December 31, 2020 detail of instruments available for sale and held to maturity is as follows:

As of March 31, 2021

As of December 31, 2020

Available

Held

Available

Held

for sale

to maturity

Totals

for sale

to maturity

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Securities quoted in active markets

Chilean Central Bank and Government securities

Chilean Central Bank instruments

1,542

-

1,542

1,170,841

-

1,170,841

Chilean Treasury bonds

1,890,836

-

1,890,836

1,783,765

-

1,783,765

Other government securities

101,141

-

101,141

101,573

-

101,573

Other local institutions financial instruments

Time deposits in local banks

9,002

-

9,002

14,856

-

14,856

Mortgage finance bonds

28

-

28

30

-

30

Chilean financial institutions bonds

188,433

-

188,433

277,163

-

277,163

Other local financial investments

4,641

-

4,641

4,616

-

4,616

Foreign institutions financial instruments

Foreign Governments and Central Banks financial instruments

98,697

-

98,697

217,185

-

217,185

Other foreign financial instruments

510,327

100,338

610,665

394,691

111,643

506,334

Investments not quoted in active markets

Corporate bonds

-

-

-

-

-

-

Other financial instruments

-

-

-

-

-

-

Totals

2,804,647

100,338

2,904,985

3,964,720

111,643

4,076,363

As of March 31, 2021, the total of available for sale instruments with maturities that do not exceed three months from the acquisition date and that are considered cash equivalent amounts to MCh$79,429 (MCh$1,205,711 as of December 31, 2020) (see Note 5).

The portfolio of instruments available for sale includes an unrealized loss of MCh$4.396 as of March 31, 2021 (MCh$39,505 as of December 31, 2020), recognized in 'Valuation accounts' in Equity, distributed between MCh$(7,061) as of March 31, 2021 (MCh$29,993 as of December 31, 2020) attributable to equity holders of the Bank and MCh$2,665 as of March 31, 2021 (MCh$9,512 as of December 31, 2020) attributable to non-controlling interest.

As of March 31, 2021, the portfolio of financial instruments available for sale includes financial instruments for an amount of MCh$591,177 ( MCh$319,213 as of December 31,2020) pledged as collateral to the Central Bank of Chile (BCCh) in order to access the new Conditional Funding Facility (FCIC). This program was implemented by the BCCh as a measure to support liquidity and credit access as a response to the financial needs generated by the Covid-19 pandemic. Further disclosures on FCIC are included in Note 19 and Note 23.

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Itaú Corpbanca and subsidiaries

Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 11 - Investment Instruments, continued

b) Unrealized gains and losses of the available for sale portfolio

Unrealized gains and losses of the available for sale portfolio as of March 31, 2021 and December 31, 2020 are detail as follows:

As of March 31, 2021

Amortized

Unrealized

Fair

cost

Gain

Losses

Value

MCh$

MCh$

MCh$

MCh$

Securities quoted in active markets

Chilean Central Bank and Government securities

Chilean Central Bank instruments

1,554

21

(33)

1,542

Chilean Treasury bonds

1,910,780

5,133

(25,077)

1,890,836

Other government securities

99,262

2,220

(341)

101,141

Other local institutions financial instruments

Time deposits in local banks

8,773

229

-

9,002

Mortgage finance bonds

27

1

-

28

Chilean financial institutions bonds

185,403

3,067

(37)

188,433

Other local financial investments

3,189

1,452

-

4,641

Foreign institutions financial instruments

Foreign Governments and Central Banks financial instruments

84,434

15,676

(1,413)

98,697

Other foreign financial instruments

515,621

1,554

(6,848)

510,327

Investments not quoted in active markets

Corporate bonds

-

-

-

-

Other financial instruments

-

-

-

-

Totals

2,809,043

29,353

(33,749)

2,804,647

As of December 31, 2020

Amortized

Unrealized

Fair

cost

Gain

Losses

Value

MCh$

MCh$

MCh$

MCh$

Securities quoted in active markets

Chilean Central Bank and Government securities

Chilean Central Bank instruments

1,171,350

29

(538)

1,170,841

Chilean Treasury bonds

1,781,626

8,989

(6,850)

1,783,765

Other government securities

96,924

4,649

-

101,573

Other local institutions financial instruments

Time deposits in local banks

14,622

252

(18)

14,856

Mortgage finance bonds

29

1

-

30

Chilean financial institutions bonds

273,028

4,135

-

277,163

Other local financial investments

3,189

1,427

-

4,616

Foreign institutions financial instruments

Foreign Governments and Central Banks financial instruments

193,389

23,848

(52)

217,185

Other foreign financial instruments

391,058

3,724

(91)

394,691

Investments not quoted in active markets

Corporate bonds

-

-

-

-

Other financial instruments

-

-

-

-

Totals

3,925,215

47,054

(7,549)

3,964,720

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 12 - Investments in Companies

As of March 31, 2021 and December 31, 2020 detail of the investments in companies is presented below:

a) Investments recognized using the equity method (associates):

As of March 31, 2021

As of December 31, 2020

Investment

Investment

Company

Participation

value

Income

Participation

value

Income

%

MCh$

MCh$

%

MCh$

MCh$

Nexus S.A.

14.8148%

1,445

167

14.8148%

1,278

(1,341)

Transbank S.A.

8.7188%

5,362

(509)

8.7188%

5,871

(1,453)

Totals

6,807

(342)

7,149

(2,794)

b) Shares or rights in other companies

As of March 31,

As of December 31,

Company

2021

2029

%

MCh$

%

MCh$

Combanc S.A.

8.1848

305

8.1848

305

Redbanc S.A.

2.5043

110

2.5043

110

Sociedad Interbancaria de Depósitos de Valores S.A.

9.4021

132

9.4021

132

Imerc OTC S.A.

8.6624

1,012

8.6624

1,012

A.C.H. Colombia (*)

4.2100

181

4.2100

192

Redeban Multicolor S.A. (*)

1.6000

223

1.6000

236

Cámara de Compensación Divisas de Colombia S.A. (*) (**)

-

-

6.2056

86

Cámara de Riesgo Central de Contraparte S.A. (*) (**)

1.2832

588

-

-

Bolsa de Valores de Colombia (*)

0.6700

593

0.6700

629

Credibanco (*)

6.3662

1,999

6.3662

2,116

Patrimonio Autónomo Fiducredicorp (Comisionista) (*)

5.2630

16

5.2630

16

Totals

5,159

4,834

(*) Correspond to investments in other companies held by subsidiaries established in Colombia.

(**) As a result of the merger between the Cámara de Riesgo Central de Contraparte and Cámara de Compensacion de Divisas, an exchange of shares was carried out, where the bank tranfered the shares held in the Cámara de Compensacion de Divisas in exchange for shares of Cámara de Riesgo Central de Contraparte which were recorded at its market value, as a result of this transaction the Bank recorded a profit of Ch$507 million (Ch$420 million corresponding to the shares held by Itaú Corpbanca Colombia SA and Ch$87 million to the shares held by Itaú Comisionista de Bolsa Colombia SA). These effects are included in 'Income (loss) from investments in companies' in the Interim Consolidated Statement of Income for the period.

c) During the three-month period ended March 31, 2021 and 2020, the Bank received dividends, according to the following detail:

2021

2020

MCh$

MCh$

Dividends received

1,275

526

Totals

1,275

526

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 12 - Investments in Companies, continued

d) Movement on investments in companies for the three-month period ended March 31, 2021 and for the year ended on December 31, 2020, is as follows:

As of March 31,

As of December 31,

2021

2020

MCh$

MCh$

Balances as of January 1,

11,983

14,938

Investment acquisition (*)

507

338

Investments sales (*)

(86)

(174)

Participation in income

(342)

(2,794)

Exchange differences

(96)

(325)

Totals

11,966

11,983

(*) Includes the profit of Ch$507 million resulted from share exchange transaction between Camara de Riesgo Central de Contraparte y la Camara de Compensacion de Divisas (Ch$420 million corresponding to the shares held by Itaú Corpbanca Colombia S.A. and Ch$87 million to the shares held by Itaú Comisionista de Bolsa Colombia S.A.).

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 13 - Intangible Assets

a) Composition of intangibles assets as of March 31, 2021 and December 31, 2020 is as follows:

Remaining

Net assets as

Net assets as

Useful life

amortization

of January 1,

Accumulated

of March 31,

Items

years

years

2021

Gross balances

amortization

2021

MCh$

MCh$

MCh$

MCh$

Computer equipment system or software

5

4

126,663

221,530

(99,076)

122,454

IT projects and licenses

2

1

12,830

14,342

(916)

13,426

Assets generated in business combination:

578,503

681,556

(108,475)

573,081

Goodwill

-

-

492,512

492,512

-

492,512

Trademarks

10

5

26,794

51,037

(25,518)

25,519

Customer relationship

10

5

13,845

26,371

(13,185)

13,186

Core deposits

8

3

45,352

111,636

(69,772)

41,864

Other projects

10

4

687

4,055

(3,419)

636

Totals

718,683

921,483

(211,886)

709,597

Remaining

Net assets as

Net assets as

Useful life

amortization

of January 1,

Accumulated

of December 31,

Items

years

years

2020

Gross balances

amortization

2020

MCh$

MCh$

MCh$

MCh$

Computer equipment system or software

5

4

169,991

221,070

(94,407)

126,663

IT projects and licenses

2

2

14,944

13,484

(654)

12,830

Assets generated in business combination:

1,431,614

681,556

(103,053)

578,503

Goodwill

-

-

1,194,331

492,512

-

492,512

Trademarks

10

5

31,898

51,037

(24,243)

26,794

Customer relationship

10

5

63,317

26,371

(12,526)

13,845

Core deposits

8

3

142,068

111,636

(66,284)

45,352

Other projects

10

4

1,196

4,055

(3,368)

687

Totals

1,617,745

920,165

(201,482)

718,683

b) Movements on gross balances for intangible assets as of March 31, 2021 and December 31, 2020 are as follows:

Computer

Assets generated

equipment system

IT projects

in business

Other

or software

and licenses

combination

Goodwill

projects

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Balances as of January 1, 2020

221,070

13,484

189,044

492,512

4,055

920,165

Acquisitions

5,001

1,379

-

-

-

6,380

Disposals

(310)

(41)

-

-

-

(351)

Exchange differences

(4,231)

(480)

-

-

-

(4,711)

Balances as of March 31, 2021

221,530

14,342

189,044

492,512

4,055

921,483

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 13 - Intangible Assets, continued

Computer

Assets generated

equipment system

IT projects

in business

Other

or software

and licenses

combination

Goodwill

projects

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Balances as of January 1, 2020

304,448

43,104

393,748

1,194,331

4,055

1,939,686

Acquisitions

43,747

12,002

-

-

-

55,749

Disposals

(47,746)

(8,388)

-

-

-

(56,134)

Impairment (1) (2) (3)

(67,363)

(32,334)

(195,596)

(694,936)

-

(990,229)

Exchange difference

(12,016)

(900)

(9,108)

(6,883)

-

(28,907)

Balances as of December 31, 2020

221,070

13,484

189,044

492,512

4,055

920,165

(1) Impairment loss on 'Computer equipment software or system' and 'IT projects and licenses' was recorded due to the systems integration; mainly due to the derecognition of the systems from Corpbanca. Impairment on Computer equipment system or software recorded in the Chile CGU had a net effect of Ch$31,426 million (Ch$59,525 million on the gross value of the asset and Ch$28,099 million on accumulated amortization). Impairment on System and software recorded in the Colombia CGU had a net effect of Ch$4,325 million (Ch$7,838 million on the gross value of the asset and Ch$3,513 million). Finally, impairment on IT projects and licenses recorded in the Chile CGU had a net effect of Ch$3,098 million (Ch$32,334 million gross value of the asset and Ch$29,236 million in accumulated amortization).
(2) Impairment loss on intangible assets generated in business combinations recorded in the Colombia CGU had a net effect of Ch$113,911 million (Ch$195,596 million on the gross value of the asset and Ch$81,685 million on accumulated amortization).
(3) Goodwill impairment was allocated between the Chile CGU in Ch$448,273 million and the Colombia CGU in Ch$246,663 million.See additional disclosures in Note 32.
c)Movements on accumulated amortization of intangible assets as of March 31, 2021 and as of December 31, 2020 are as follows:

Computer

Assets generated

equipment system

IT projects

in business

Other

or software

and licenses

combination

projects

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

Balances as of January 1, 2021

(94,407)

(654)

(103,053)

(3,368)

(201,482)

Amortization for the period

(7,294)

(256)

(5,422)

(51)

(13,023)

Exchange differences

2,625

(6)

-

-

2,619

Balances as of March 31, 2021

(99,076)

(916)

(108,475)

(3,419)

(211,886)

Computer

Assets generated

equipment system

IT projects

in business

Other

or software

and licenses

combination

projects

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

Balances as of January 1, 2020

(134,457)

(28,160)

(156,465)

(2,859)

(321,941)

Amortization for the year

(40,632)

(1,748)

(31,736)

(509)

(74,625)

Disposals

44,490

-

-

-

44,490

Impairment (1) (2)

31,612

29,236

81,685

-

142,533

Exchange differences

4,580

18

3,463

-

8,061

Balances as of December 31, 2020

(94,407)

(654)

(103,053)

(3,368)

(201,482)

(1) Impairment loss on 'Computer equipment software or system' and 'IT projects and licenses' was recorded due to the systems integration; caused by the usage discontinuation of the Corpbanca systems. Impairment on Computer equipment system or software recorded in the Chile CGU had a net effect of loss Ch$31,426 million (Ch$59,525 million on the gross value of the asset and Ch$28,099 million on accumulated amortization). Impairment on System and software recorded in the Colombia CGU had a net effect of MCh$4,325 (MCh$7,838 on the gross value of the asset and Ch$3,513 million in accumulated amortization). Finally, impairment on IT projects and licenses recorded in the Chile CGU had a net effect of Ch$3,098 million (Ch$32,334 million on the gross asset value of and Ch$29,236 million in accumulated amortization).
(2) Impairment loss on intangible assets generated in business combinations recorded in the Colombia CGU had a net effect of Ch$113,138 million (Ch$193,761 million on the gross value of the asset and Ch$80,623 million on the accumulated amortization).

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 13 - Intangible Assets, continued

d)Impairment

Itaú Corpbanca evaluates, at the end of each reporting period, whether there is any indication of impairment of any asset (including Goodwill). If this indication exists, or when an impairment test is required, the Bank estimates the recoverable amount of the asset.

As a result of the evaluation of the impairment indicators, as of June 30, 2020, the impairment test was carried out on the valuation of Goodwill and the intangibles generated in business combinations assigned to CGUs Chile and Colombia.

The outcome of the impairment test, concluded that it was necessary to recognize in the Interim Consolidated Financial Statements as of June 30, 2020, an impairment loss associated with the Goodwill assigned to the Chile CGU for Ch$448,273 million, a loss for Ch$246,663 million corresponding to the total of Goodwill assigned to the Colombia CGU and a loss of Ch$113,911 million (Ch$79,364 million net of deferred taxes) that represents all of the intangibles generated in business combinations assigned to the Colombia CGU. The total impact of these effects on the result attributable to the Bank's owners amount to Ch$764,024 million and Ch$10,276 million corresponding to non-controlling interest. This was reported on July 9, 2020 to the Commission for the Financial Market and recognized in the Interim Financial Statements as of June 30, 2020.

Lastly, due to the merger of the financial institutions, Itaú Corpbanca has used systems to manage its operations of both entities, in order to eliminate the duplication of systems and generate efficiencies, the bank has established an integration plan. In relation to this process, during 2020 the migration of the surviving systems was substantially completed, and impairment as of December 31, 2020 for MCh $ 38,849 has been recognized, affecting those systems and licenses that do not will continue to be used.

As of March 31, 2021, no indications of impairment have been identified that affect the balances of intangibles.

Restrictions

Itaú Corpbanca and its subsidiaries have no restrictions on intangible assets as of March 31, 2021 and December 31, 2020. In addition, no intangible assets have been pledged as collateral to secure the fulfillment of any obligations.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 14 - Fixed Assets

a)Fixed assets as of March 31, 2021 and December 31, 2020 are broken down as follows:

Useful

Remaining

Net assets as

Net assets as of

life

amortization

of January 1,

Gross

Accumulated

March 31,

years

years

2021

balances

depreciation

2021

MCh$

MCh$

MCh$

MCh$

Land and buildings

26

15

15,565

20,942

(6,079)

14,863

Equipment

6

4

27,650

83,569

(58,048)

25,521

Others

9

3

12,805

35,760

(23,350)

12,410

Furniture

6,986

20,554

(14,042)

6,512

Others

5,819

15,206

(9,308)

5,898

Totals

56,020

140,271

(87,477)

52,794

Useful

Remaining

Net assets as

Net assets as of

life

amortization

of January 1,

Gross

Accumulated

December 31,

years

years

2020

balances

depreciation

2020

MCh$

MCh$

MCh$

MCh$

Land and buildings

26

15

13,104

21,763

(6,198)

15,565

Equipment

6

4

27,551

85,404

(57,754)

27,650

Others

9

5

17,307

35,664

(22,859)

12,805

Furniture

8,879

21,203

(14,217)

6,986

Others

8,428

14,461

(8,642)

5,819

Totals

57,962

142,831

(86,811)

56,020

The useful life presented in the preceding tables, corresponds to the total useful life and residual useful life for the Bank's fixed assets. Total useful lives have been determined based on our expected use of the assets, considering quality of the original construction, the environment in which the assets are located, quality and degree of maintenance carried out, and appraisals performed by external experts of the Bank.

b) Movements on gross balances of fixed assets as of March 31, 2021 is the follows:

Land and

buildings

Equipment

Others

Totals

MCh$

MCh$

MCh$

MCh$

Balances as of January 1, 2021

21,763

85,404

35,664

142,831

Acquisitions

1

735

535

1,271

Sales and/or disposals for the period

-

(162)

(137)

(299)

Exchange differences

(822)

(2,408)

(302)

(3,532)

Balances as of March 31, 2021

20,942

83,569

35,760

140,271

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 14 - Fixed Assets, continued

Movements on gross balances of fixed assets for the year ended December 31, 2020 is the follows:

Land and

buildings

Equipment

Others

Totals

MCh$

MCh$

MCh$

MCh$

Balances as of January 1, 2020

17,521

81,423

47,748

146,692

Acquisitions

159

9,964

1,803

11,926

Sales and/or disposals for the year

-

(1,855)

(1,974)

(3,829)

Impairment (1) (2)

(618)

(578)

(9,862)

(11,058)

Reclassification to asset held for sale (3)

5,622

-

-

5,622

Exchange differences

(921)

(3,550)

(1,173)

(5,644)

Others

-

-

(878)

(878)

Balances as of December 31, 2020

21,763

85,404

35,664

142,831

(1) Corresponds to ATM equipment impairment loss of Ch$24 million (Ch$53 million on the gross value of the asset and Ch$29 million on accumulated depreciation)
(2) Impairment on property, plant and equipment was recorded as a result of the restructuring plan implemented and controlled by Management in Chile. This plan aims to capture efficiencies from the closure of branches and by the offering our clients digital solutions for their financial needs. As a result, impairment losses for an amount of Ch$867 million have been recorded on land and buildings, equipment and other assets (Ch$11,005 million on the gross value of the asset and Ch$10,138 million on accumulated depreciation).
(3) Assets classified as available for sale that came out of the sales plan in Colombia and are reclassified back to fixed assets. See note 17.
c) Movements on accumulated depreciation of fixed assets for three-month period ended March 31, 2021 and for the year ended December 31, 2020 are as follows:

Land and

buildings

Equipment

Others

Totals

MCh$

MCh$

MCh$

MCh$

Balances as of January 1, 2021

(6,198)

(57,754)

(22,859)

(86,811)

Depreciation of the period

(113)

(2,056)

(801)

(2,970)

Sales and/or disposals for the period

-

140

137

277

Exchange differences

232

1,622

173

2,027

Balances as of March 31, 2021

(6,079)

(58,048)

(23,350)

(87,477)

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 14 - Fixed Assets, continued

Land and

buildings

Equipment

Others

Totals

MCh$

MCh$

MCh$

MCh$

Balances as of January 1, 2020

(4,417)

(53,872)

(30,441)

(88,730)

Depreciation of the period

(631)

(8,967)

(4,580)

(14,178)

Sales and/or disposals for the year

-

1,855

1,893

3,748

Impairment (1) (2)

251

526

9,390

10,167

Reclassification to asset held for sale

(1,634)

-

-

(1,634)

Exchange differences

233

2,704

879

3,816

Balances as of December 31, 2020

(6,198)

(57,754)

(22,859)

(86,811)

(1) Corresponds to Impaired ATM equipment with a gross value of Ch$53 million and Ch$29 million on accumulated depreciation, generating a net loss of Ch$24 million.
(2) Impairment on property, plant and equipment was recorded as a result of the restructuring plan implemented and controlled by Management in Chile. This plan aims to capture efficiencies from the closure of branches and by the offering our clients digital solutions for their financial needs. As a result, impairment losses for an amount of Ch$867 million have been recorded on land and buildings, equipment and other assets (Ch$11,005 million on the gross value of the asset and Ch$10,138 million on accumulated depreciation).

d) Impairment

Since the health emergency, the bank has had to accelerate the digital transformation in order to take care of both its customers and its collaborators. For this, processes have been digitized so that our clients can access their products and make use of the various services provided by the bank. Along the same lines, the bank has also permanently adopted the teleworking modality to minimize the exposure of our collaborators to Covid 19.

One of the main effects of the pandemic has been reflected in our customers preferring to use digital channels over making transactions in person at our branches, which has been reflected in a decrease in the flow of customers in certain branches. As a result, the Bank has initiated a restructuring plan in search of efficiencies in order to close branches that have lower customer demand, added to the Bank's choice to adopt the teleworking modality, the plan also contemplates the closure of certain offices central.

Within the framework of the aforementioned restructuring plan, as of December 31, 2020, the Bank has recognized the impairment of certain assets associated with branches and offices which were closed during fiscal year 2020.

e) Restrictions

The Bank and its subsidiaries have no restrictions on fixed assets as of March 31, 2021 and December 31, 2020. Additionally, fixed assets have not been delivered as collateral for the fulfillment of obligations. On the other hand, there are no amounts owed for fixed assets by the Bank on the dates indicated above.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 15 - Assets for right of use and lease contracts liabilities

a) Right of use asset under lease agreements
i) The Bank mainly has opening contracts for its branches and corporate building. The composition of the item as of March 31, 2021 and December 31, 2020, is as follows:

Useful

Remaining

Net assets

Net assets as of

life

amortization

as of January 1,

Gross

Accumulated

March 31,

years

years

2021

balances

depreciation

2021

MCh$

MCh$

MCh$

MCh$

Land and buildings

7

6

145,906

194,080

(55,897)

138,183

Leasehold improvements

9

5

24,595

54,858

(31,506)

23,352

Other assets

3

3

102

163

(81)

82

Totals

170,603

249,101

(87,484)

161,617

Useful

Remaining

Net assets

Net assets as of

life

amortization

as of January 1,

Gross

Accumulated

December 31,

years

years

2020

balances

depreciation

2020

MCh$

MCh$

MCh$

MCh$

Land and buildings

7

6

167,265

195,992

(50,086)

145,906

Leasehold improvements

10

5

37,118

55,055

(30,460)

24,595

Other assets

3

3

176

173

(71)

102

Totals

204,559

251,220

(80,617)

170,603

ii) Movement on gross balances of right of use assets for the three-month period ended on March 31, 2021 and for the year ended on December 31, 2020, is as follows:

Land and

Leasehold

Other

buildings

improvements

assets

Totals

MCh$

MCh$

MCh$

MCh$

Balances as of January 1, 2021

195,992

55,055

173

251,220

Additions

1,035

385

-

1,420

Disposals

(2,584)

-

-

(2,584)

Remeasurements of the liability for readjustments

1,442

-

-

1,442

Exchange differences

(1,805)

(582)

(10)

(2,397)

Balances as of March 31, 2021

194,080

54,858

163

249,101

Land and

Leasehold

Other

buildings

improvements

assets

Totals

MCh$

MCh$

MCh$

MCh$

Balances as of January 1, 2020

197,065

71,769

190

269,024

Additions

9,250

5,044

-

14,294

Disposals

(9,707)

(381)

-

(10,088)

Remeasurements of the liability due to modifications (1)

747

-

-

747

Remeasurements of the liability due to inflation-indexation readjustments

2,701

-

-

2,701

Disposals due to impairment (2)

-

(20,363)

-

(20,363)

Exchange differences

(4,064)

(1,014)

(17)

(5,095)

Balances as of December 31, 2020

195,992

55,055

173

251,220

(1) Corresponds to remeasurements of the recognized liability due to contracts modifications.
(2) includes impairment recognized on improvements in leased properties due to the restructuring plan, generating a net loss of Ch$9,403 million (an effect on the gross value of the asset of Ch$20,363 million and Ch$10,960 million in accumulated depreciation)

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 15 - Assets for right of use and lease contracts liabilities, continued

iii) Movement on accumulated depreciation of assets for the right to use leased assets for the three-month period ended March 31, 2021 and for the year ended December 31, 2020, is as follows:

Land and

Leasehold

Other

buildings

improvements

assets

Totals

MCh$

MCh$

MCh$

MCh$

Balances as of January 1, 2021

(50,086)

(30,460)

(71)

(80,617)

Depreciation (1)

(7,134)

(1,434)

(14)

(8,582)

Disposals

778

-

-

778

Exchange differences

545

388

4

937

Balances as of March 31, 2021

(55,897)

(31,506)

(81)

(87,484)

(1)See note 32 'Depreciation, amortization and impairment'.

Land and

Leasehold

Other

buildings

improvements

assets

Totals

MCh$

MCh$

MCh$

MCh$

Balances as of January 1, 2020

(29,800)

(34,651)

(14)

(64,465)

Depreciation (1)

(29,936)

(7,648)

(57)

(37,641)

Disposals

8,738

287

-

9,025

Impairment (1)(2)

-

10,960

-

10,960

Exchange differences

912

592

-

1,504

Balances as of December 31, 2020

(50,086)

(30,460)

(71)

(80,617)

(1)See note 32 'Depreciation, amortization and impairment'.
(2)Impairment recognized on improvements in leased properties due to the restructuring plan, generating a net loss of Ch$9,403 million(an effect on the gross value of the asset of Ch$20,363 million and Ch$10,960 million in accumulated depreciation).
b) Lease contracts liabilities
(i)The obligations for lease contracts as of March 31, 2021 and December 31, 2020, are as follows:

As of March 31,

As of December 31,

2021

2020

MCh$

MCh$

Lease contracts liabilities

143,887

151,885

Totals

143,887

151,885

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 15 - Assets for right of use and lease contracts liabilities, continued

The Bank and its subsidiaries have contracts, with certain renewal options and for which there is reasonable certainty that the option will be exercised. In such cases, the renewal period is considered as part of the term of the lease used to measure the right-of-use asset and a lease liability of the contract.

(ii) The movement of the obligations for lease contract liabilities for the three-month period ended on March 31, 2021 and for the year ended December 31, 2020, is as follows:

As of March 31,

As of December 31,

2021

2020

MCh$

MCh$

Opening balances as of January 1,

151,885

172,924

Additions due to new contracts (1)

1,035

9,250

Disposals due to early termination

(1,860)

(1,971)

Interest expenses

1,121

4,923

Remeasurements of the liability due to modifications (2)

-

1,399

Remeasurements of the liability due to indexation adjustments

1,442

2,701

Exchange rate adjustments

-

(4)

Exchange differences

(1,599)

(3,650)

Capital and interest payments

(8,137)

(33,687)

Ending balances

143,887

151,885

(1) Includes renewed contracts

(2) Includes remeasurements of the recognized liability due to contract modifications.

i)The future maturities of the lease liabilities as of March 31, 2021 and December 31, 2020, are as follows:

As of March 31,

As of December 31,

2021

2020

MCh$

MCh$

Within 1 year

30,094

30,829

After 1 year but within 2 years

26,898

27,779

After 2 years but within 3 years

23,194

24,083

After 3 years but within 4 years

20,468

20,991

After 4 years but within 5 years

14,696

16,627

After 5 years

28,537

31,576

Total

143,887

151,885

c) Impairment

Since the COVID-19 health emergency, the Bank accelerated its digital transformation as a means to take care of both its customers and workforce. For this purpose, processes have been digitized, so that its clients may access its products and make use of the various services provided by the Bank from its digital platform. The Bank adopted remote working as a means to minimize the exposure of its workforce to COVID-19. One of the main effects of the pandemic has been the preference of the Bank's clients to use digital channels over performing in-person transactions in its branches, which has led to a decrease in the flow of clients in certain branches. As a result, the Bank has initiated a restructuring plan in order to improve efficiency, closing branches that have lower customer demand. The plan also contemplates the closure of certain offices, given the Bank's adoption of remote working.

Within the framework of the aforementioned restructuring plan, during this fiscal year, the Bank has recognized the impairment of certain assets associated with branches and offices that were closed during fiscal year 2020.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 16 - Current Taxes and Deferred Taxes

a) Current taxes

At the end of each reporting period, the Bank and its subsidiaries recognize a First Category Income Tax Provision, which is determined based on currently enacted tax legislation. The net provision for current recoverable taxes recognized as of March 31, 2021 was MCh$76,138 (MCh$62,933 as of December 31, 2020), according to the following detail:

a.1) Current taxes assets and liabilities by geographical area

As of March 31, 2021

As of December 31, 2020

Chile

USA (*)

Colombia

Totals

Chile

USA (*)

Colombia

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Current tax assets

53,914

1,462

22,379

77,755

43,533

1,443

19,723

64,699

Current tax liabilities

(734)

-

(883)

(1,617)

(596)

-

(1,170)

(1,766)

Totals net

53,180

1,462

21,496

76,138

42,937

1,443

18,553

62,933

(*)Corresponds to the New York branch.

a.2)Details of current tax items by geographical area

As of March 31, 2021

As of December 31, 2020

Chile

USA (*)

Colombia

Totals

Chile

USA (*)

Colombia

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Income tax, effect on income

(6,341)

-

(443)

(6,784)

12,348

-

(4,284)

8,064

Income tax, effect on equity, net investments abroad

3,299

-

-

3,299

(21,795)

-

-

(21,795)

Income tax, effect on equity cash flow

352

-

-

352

(5)

-

-

(5)

Income tax, rate 27%

(2,690)

-

(443)

(3,133)

(9,452)

-

(4,284)

(13,736)

Deductions:

Monthly provisional payments

51,342

-

21,928

73,270

49,340

-

21,268

70,608

Tax credit for training costs

800

-

-

800

800

-

-

800

Tax credit for donations

385

-

-

385

264

-

-

264

4% capital event credit

3,846

-

-

3,846

2,920

-

-

2,920

Other taxes to be recovered (**)

(503)

1,462

11

970

(935)

1,443

1,569

2,077

Totals

53,180

1,462

21,496

76,138

42,937

1,443

18,553

62,933

(*)Corresponds to the New York branch

(**)

They correspond mainly to the provision of taxes for previous years, taxes to be recovered from previous years, between others.

b) Effect on income

The tax expense for the three-month periods ended March 31, 2021 and 2020 is comprised of the following items:

For the three-month periods ended

March 31,

2021

2020

MCh$

MCh$

Income tax expense

Income tax for the period

(6,784)

(70,179)

Credit (debit) for deferred taxes

Origination and reversal of temporary differences for the period

(25,357)

2,558

Subtotals

(32,141)

(67,621)

Others

2,665

2,061

Net (debit) credit to income taxes

(29,476)

(65,560)

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 16 - Current Taxes and Deferred Taxes, continued

c) Effective tax rate reconciliation

The following table presents the enacted tax rates for each country where the Bank operates as of March 31, 2021 and as of December 31, 2020.

2021

2020

Nominal tax rates by geographic area

Rate

Rate

Chile

27.0

%

27.0

%

Colombia

34.0

%

36.0

%

United States

24.1

%

25.3

%

The main tax effects, according to the nominal tax rates of the countries that are reported consolidated, are the following:

For the three-month periods ended March 31,

2021

2020

Tax

Tax

Tax

Tax

rate

amount

rate

amount

%

MCh$

%

MCh$

Amount calculated by using the statutory rates

27.00

32,712

27.00

25,166

Effect subsidiary rates Colombia (**)

1.13

1,364

0.46

431

Tax by income EEUU

0.39

475

(0.64)

(600)

Monetary correction over tax based equity (***)

(8.79)

(10,647)

(10.86)

(10,121)

Exchange rate changes investment in Colombia (****)

4.34

5,259

53.62

49,978

Effect rates New York branch (**)

(0.35)

(419)

0.01

4

Other adjustments (*)

0.60

732

0.75

702

Effective tax rate

24.32

29,476

70.34

65,560

(*)This item contains the effects due to changes in the observed US dollar exchange rate in the valuation of the investment in the New York branch for tax purposes and other effects.

(**)These items reflect differences in tax rates of other jurisdictions, based on the Bank's consolidated result.

(***)During the three-month period ended March 31, 2021, the inflation indexation adjustments over the Tax Equity was equal to 1.2% (1.1% in 2020).

(****) For tax purposes, investment in Colombia is measured in US dollars. The devaluation (appreciation) of the Chilean peso against the US dollar generates income (expenses) for tax purposes and not recognized for financial purposes. The value presented represents the expense (income) of income tax due to the effect of the exchange rate on investment in Colombia. As part of its exchange rate risk management policy, the Bank has managed this exposure through instruments available in the market to economically protect it against the variation in the exchange rate. The effect of the instruments (which compensates the tax effect here presented) is recognized in the Net foreign exchange gain (loss) on the Interim Consolidated Statement of Income for the period.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 16 - Current Taxes and Deferred Taxes, continued

d) Tax effects on Other Comprehensive Income

d.1) Tax effect recorded in other comprehensive income (loss) which may be reclassified subsequently to profit or loss:

For the three-month periods

ended March 31,

2021

2020

MCh$

MCh$

Effect of investment instruments available for sale

12,208

5,635

Variation effect of accounting hedges net investment abroad

2,607

(12,378)

Effect of variation of cash flow hedges

4,108

4,296

Total (charges) credits in other comprehensive income

18,923

(2,)

d.2) Tax effect recorded in other comprehensive income (loss) which may not be reclassified subsequently to profit or loss:

For the three-month periods

ended March 31,

2021

2020

MCh$

MCh$

Income taxes related to defined benefits obligations

(146)

(202)

Totals in other comprehensive income

(146)

(202)

e) Effect of deferred taxes

e.1) Totals deferred taxes

As of March 31, 2021

As of December 31, 2020

Assets

Liabilities

Net

Assets

Liabilities

Net

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Deferred taxes with effect on profit and loss

Allowances for loan losses

183,450

-

183,450

183,996

-

183,996

Miscellaneous provisions

83,191

(15)

83,176

64,383

-

64,383

Tax losses

48,896

-

48,896

51,546

-

51,546

Lease division and others

12,077

-

12,077

10,803

-

10,803

Net tax value of amortizable assets

2,184

-

2,184

2,231

-

2,231

Provisions for employee benefits

-

53

53

10,183

17

10,200

Interest and inflation-indexation overdue portfolio

5,741

-

5,741

6,031

-

6,031

Mark to market of financial instruments

7,903

-

7,903

37,517

-

37,517

IFRS 16 leases effects

(11,292)

1

(11,291)

1,643

-

1,643

Price difference not accrued

130

-

130

183

-

183

Itaú-Corpbanca business combination

(17,972)

-

(17,972)

(17,975)

-

(17,975)

Depreciation of plants and equipment

(30,249)

(271)

(30,520)

(30,697)

(274)

(30,971)

Others

10,039

112

10,151

(272)

20

(252)

Totals assets (liabilities) for deferred taxes

294,098

(120)

293,978

319,572

(237)

319,335

Deferred taxes with effect on other comprehensive income

-

Taxes for investments available for sale

5,188

-

5,188

(9,946)

-

(9,946)

Defined benefits tax

4,233

-

4,233

4,486

-

4,486

Subtotal deferred tax assets (liabilities) with effect on other comprehensive income

9,421

-

9,421

(5,460)

-

(5,460)

Total deferred tax assets (liabilities)

303,519

(120)

303,399

314,112

(237)

313,875

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 16 - Current Taxes and Deferred Taxes, continued

e.2) Deferred taxes by geographic area:

As of March 31, 2021

As of December 31, 2020

Chile

USA (*)

Colombia

Totals

Chile

USA (*)

Colombia

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Deferred tax assets

234,847

18,028

50,644

303,519

245,271

18,663

50,178

314,112

Deferred tax liabilities

(16)

-

(104)

(120)

-

-

(237)

(237)

Totals by geographic area, net

234,831

18,028

50,540

303,399

245,271

18,663

49,941

313,875

(*) Corresponds to the subsidiary located in New York, branch.

Effects of deferred taxes on assets and liabilities arising from temporary differences (by geographic area) are as follows:

As of March 31, 2021

As of December 31, 2020

Chile

USA (*)

Colombia

Totals

Chile

USA (*)

Colombia

Totals

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

MCh$

Allowances for loan losses

171,551

-

11,899

183,450

172,045

-

11,951

183,996

Miscellaneous provisions

74,559

2,329

6,288

83,176

64,559

1,025

(1,201)

64,383

Tax losses

2,286

16,072

30,538

48,896

1,744

15,500

34,302

51,546

Lease division and others

4,249

-

7,828

12,077

3,682

-

7,121

10,803

Net tax value of amortizable assets

2,184

-

-

2,184

2,231

-

-

2,231

Provision associated with staff

(4,177)

91

4,139

53

6,449

195

3,556

10,200

Interest and inflation-indexation overdue portfolio

5,741

-

-

5,741

6,031

-

-

6,031

Mark to market of financial instruments

11,414

(450)

(3,061)

7,903

40,938

(448)

(2,973)

37,517

Lease division and others

989

53

(12,333)

(11,291)

1,080

48

515

1,643

Price difference not accrued

130

-

-

130

183

-

-

183

Itaú-Corpbanca business combination

(17,972)

-

-

(17,972)

(17,975)

-

-

(17,975)

Depreciation of plants and equipment

(30,631)

(67)

178

(30,520)

(31,611)

(68)

708

(30,971)

Others

9,926

337

(112)

10,151

(2,523)

2,860

(589)

(252)

Totals assets (liabilities), net

230,249

18,365

45,364

293,978

246,833

19,112

53,390

319,335

Taxes on investments available for sale

4,582

(337)

943

5,188

(1,562)

(449)

(7,935)

(9,946)

Taxes on defined benefit obligations

-

-

4,233

4,233

-

-

4,486

4,486

Subtotals assets (liabilities) for deferred tax with effect on other comprehensive income

4,582

(337)

5,176

9,421

(1,562)

(449)

(3,449)

(5,460)

Total deferred tax assets (liabilities)

234,831

18,028

50,540

303,399

245,271

18,663

49,941

313,875

(*) Corresponds to the subsidiary located in New York, branch.

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 16 - Current Taxes and Deferred Taxes, continued

f) Summary of deferred taxes

The following is a summary of the deferred taxes with effect on equity and on income.

As of March 31,

As of December 31,

2021

2020

MCh$

MCh$

Deferred tax assets

With effect on other comprehensive income

9,421

(5,460)

With effect on profit and loss

294,098

319,572

Total deferred tax assets

303,519

314,112

With effect on other comprehensive income

-

-

With effect on profit and loss

(120)

(237)

Total deferred tax liabilities

(120)

(237)

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Notes to the Interim Consolidated Financial Statements (unaudited)

As of March 31, 2021 and December 31, 2020 and for the three-month periods ended

March 31, 2021 and 2020

Note 17 - Other Assets

a) As of March 31, 2021 and December 31, 2020 composition of Other assets is as follows:

As of March 31,

As of December 31,

2020

2020

MCh$

MCh$

Assets for leasing (1)

17,494

10,807

Assets received or awarded in lieu of payment (2)

10,286

9,009

Assets received in lieu of payment

16,324

16,055

Provisions for assets received in lieu of payment or awarded

(12,454)

(13,306)

Assets awarded at judicial auction

6,416

6,260

Other assets

487,704

582,953

Deposits in guarantee

11,415

11,230

Accounts and notes receivable (3)

23,730

46,175

Right of intermediation operations