Chilean banks booked a combined 757bn-peso (US$1.37bn, using the average exchange rate) net profit in January-September, according to figures released by banking regulator Sbif.
Sbif did not provide comparative figures for the same period in 2007 as in January banks started partially adopting new accounting rules based on international financing reporting standards (IFRS).
Bank earnings in September alone were 3.75bn pesos, down 18.7% compared to August on higher provisions and FX losses prompted by market volatility, Sbif head Gustavo Arriagada told reporters.
Bank net interest income hit 2.59tn pesos in the nine-month period and was down 0.67% in September compared to August.
The system's net interest margin remained healthy at 3.5% in September, Arriagada said.
Loan loss provisions totaled 752bn pesos for January-September and rose 6.91% on the previous month.
The system's loan book - net of interbank loans and provisions - was up 0.67% compared to end-August, reaching 65.7tn pesos as more sluggish activity on the consumer side was offset by higher volume in mortgage and corporate lending.
While the system remains healthy and well capitalized, there has been a change in recent conditions prompted by the global financial crisis which is reflected in liquidity shortages and higher costs of funding among local banks, Arriagada said.
"Bank business is in lending so they will take the measures needed to make credit more available otherwise they will collapse," Arriagada said, adding about 70% of Chilean ban' assets are loans.
"We trust that the system will fulfill its role as a credit provider under current circumstances," the regulator added.
The system's non-performing loan ratio had worsened 0.91% as of September 30 compared to 0.8% a year ago.
Going forward, Arriagada said Sbif was expecting October results to remain influenced by market volatility.
Chilean bank assets and deposits amounted to 98.8tn pesos and 56.7tn pesos respectively at the end of last month, up 3.96% and 1.94% respectively from end-August.
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