NOTE 32 RELATED PARTY TRANSACTIONS
As defined in IAS 24, a related party is: (a) a person or a close member of that person’s family related to a reporting entity if that person (i) has control or joint control of the reporting entity; (ii) has significant influence over the reporting entity; or (iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity. (b) An entity is related to a reporting entity if (i) the entity and the reporting entity are members of the same group; (ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member); (iii) both entities are joint ventures of the same third party; (iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity; (v) the entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity; (vi) the entity is controlled or jointly controlled by a person identified in (a) or; (vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
Transactions that the Bank entered into with related parties as of December 31, 2017, 2016 and 2015 are specified below:
a) Loans granted to related parties
Loan granted to related parties as of December 31, 2017 and 2016 are as follows:
Operating Companies |
Investment Companies |
Individuals | |||||
As of December 31, 2017 | MCh$ | MCh$ | MCh$ | ||||
Loan and receivables to customer | |||||||
Commercial Loans | 113,202 | 79,715 | 3,730 | ||||
Mortgages Loans | — | — | 19,273 | ||||
Consumer Loans | — | — | 5,081 | ||||
Loans and receivables to customers - gross | 113,202 | 79,715 | 28,084 | ||||
Provision for loan losses | (1,323 | ) | (5,688 | ) | (98 | ) | |
Loans and receivables to customers, net | 111,879 | 74,027 | 27,986 |
Operating Companies |
Investment Companies |
Individuals | |||||
As of December 31, 2016 | MCh$ | MCh$ | MCh$ | ||||
Loan and receivables to customer | |||||||
Commercial Loans | 117,362 | 93,170 | 3,070 | ||||
Mortgages Loans | — | — | 19,568 | ||||
Consumer Loans | — | — | 3,493 | ||||
Loans and receivables to customers - gross | 117,362 | 93,170 | 26,131 | ||||
Provision for loan losses | (2,398 | ) | (396 | ) | (197 | ) | |
Loans and receivables to customers, net | 114,964 | 92,774 | 25,934 |
b) Other transactions with related parties.
For the years ended December 31, 2017, 2016 and 2015, the Bank entered into the following transactions with related parties for amounts exceeding UF 1,000.
As of December 31, 2017:
Balance Assets | Effect on statement of Income |
||||||||||
(Liability) | Income | (Expense) | |||||||||
Company | Description | Notes | MCh$ | MCh$ | MCh$ | ||||||
Redbanc S.A. | Automatic teller machine administration | — | — | 3,355 | |||||||
Transbank S.A. | Credit Card processing | — | — | 14,586 | |||||||
Combanc S.A. | Data transmission services | — | — | 378 | |||||||
Itaú Chile Cía. de Seguros de Vida S.A. | Life insurance | — | 7,819 | 948 | |||||||
Asesorias Cumelen S.A. | Advisory services | — | — | — | |||||||
Corp Research S.A. | Management advisory services | — | — | 453 | |||||||
Recuperadora de Créditos S.A. | Credit collection | — | — | — | |||||||
Itaú Chile Inv. Serv. y Administración S.A. | Leases | — | — | 650 | |||||||
Compañia de Seguros Confuturo S. A. (*) | Insurance | — | — | — | |||||||
Instituto de Estudios Bancarios Guillermo Subercaseaux | Education services | — | — | 143 | |||||||
Opina S.A. | Publishing services | — | — | — | |||||||
VIP Asesorias y Servicios Integrales Ltda. | Advisory services | — | — | 415 | |||||||
Everis Chile S.A. | Advisory services | — | — | 607 | |||||||
CAI Gestion Inmobiliaria S.A. | Commercial home (Department stores) | — | — | 115 | |||||||
Compañia de Seguros Corp Seguros S.A (*) | Insurance | — | — | — | |||||||
Universidad Andres Bello | Education services | — | — | — | |||||||
Promoservice S.A. | Promotion services | — | — | 267 | |||||||
Comder Contraparte Central S.A | Banking services | — | — | 1,067 | |||||||
Sinacofi S.A (*) | Data transmission services | — | — | — | |||||||
Operadora de Tarjeta de Crédito Nexus S.A. | Credit Card processing | — | — | 3,836 | |||||||
Pulso Editorial S.A | Publishing services | — | — | 509 | |||||||
Inmobiliaria Edificio Corpgroup S.A. | Corporate office rent and building cost | — | — | 4,725 | |||||||
Grupo de Radios Dial S.A. | Publicity | — | — | — | |||||||
Hotel Corporation of Chile S.A. | Accomodation, events | — | — | 265 | |||||||
Corp Imagen y diseños S.A. | Other services | — | — | 196 | |||||||
Asesorias e Inversiones Rapelco Limitada S.A. | Other services | — | — | — | |||||||
Corp Group Holding Inversiones Limitada | Advisory services | — | — | 398 | |||||||
SMU S.A., Rendic Hnos. S.A. | Prepaid rent for space for ATMs | 15 | 7,960 | — | 2,221 | ||||||
Inversiones Corp Group Interhold Ltda. | Management advisory services | — | — | 3,097 | |||||||
Bcycle Latam SPA | Other services | — | — | 552 |
(*)These companies at the end of December 2017 are no considered related parties.
As of December 31, 2016
Balance Assets | Effect on statement of Income |
||||||||||
(Liability) | Income | (Expense) | |||||||||
Company | Description | Notes | MCh$ | MCh$ | MCh$ | ||||||
Redbanc S.A. | Automatic teller machine administration | — | — | 3,754 | |||||||
Transbank S.A. | Credit Card processing | — | — | 10,882 | |||||||
Combanc S.A. | Data transmission services | — | — | 291 | |||||||
Itaú Chile Cía. de Seguros de Vida S.A. | Life insurance | — | 5,653 | 2,782 | |||||||
Asesorias Cumelen S.A. | Advisory services | — | — | 450 | |||||||
Corp Research S.A. | Management advisory services | — | — | 443 | |||||||
Recuperadora de Créditos S.A. | Credit collection | — | — | 540 | |||||||
Itaú Chile Inv. Serv. y Administración S.A. | Leases | — | — | 422 | |||||||
Compañia de Seguros Confuturo S. A. | Insurance | — | — | 1,418 | |||||||
Instituto de Estudios Bancarios Guillermo Subercaseaux | Education services | — | — | 69 | |||||||
Opina S.A. | Publishing services | — | — | 110 | |||||||
VIP Asesorias y Servicios Integrales Ltda. | Advisory services | — | — | 185 | |||||||
Itaú Unibanco S.A. | Advisory services | — | — | — | |||||||
CAI Gestion Inmobiliaria S.A. | Commercial home (Department stores) | — | — | 90 | |||||||
Compañia de Seguros Corp Seguros S.A | Insurance | — | — | 3,263 | |||||||
Universidad Andres Bello | Education services | — | — | 32 | |||||||
Promoservice S.A. | Promotion services | — | — | 1,431 | |||||||
Comder Contraparte Central S.A | Banking services | — | — | 697 | |||||||
Sinacofi S.A | Data transmission services | — | — | 918 | |||||||
Operadora de Tarjeta de Crédito Nexus S.A. | Credit Card processing | — | — | 1,896 | |||||||
Pulso Editorial S.A | Publishing services | — | — | 521 | |||||||
Inmobiliaria Edificio Corpgroup S.A. | Corporate office rent and building cost | — | — | 5,010 | |||||||
Grupo de Radios Dial S.A. | Publicity | — | — | 107 | |||||||
Hotel Corporation of Chile S.A. | Accomodation, events | — | — | 64 | |||||||
Corp Imagen y diseños S.A. | Other services | — | — | 82 | |||||||
Asesorias e Inversiones Rapelco Limitada S.A. | Other services | — | — | 37 | |||||||
Corp Group Holding Inversiones Limitada | Advisory services | — | — | 394 | |||||||
SMU S.A., Rendic Hnos. S.A. | Prepaid rent for space for ATMs | 15 | 10,181 | — | 2,152 | ||||||
Inversiones Corp Group Interhold Ltda. | Management advisory services | — | — | 2,172 |
The Bank, during 2016, purchased credit from Itaú Unibanco S.A. - Nassau Branch, for US$152,263,397 and Itaú Unibanco S.A. - New York Branch for US$25,875,000, through its New York Branch. This purchase was made at the par value of the loan portfolio and did not generate any impact on the financial statements.
As of December 31, 2015
Balance Assets | Effect on statement of Income |
||||||||||
(Liability) | Income | (Expense) | |||||||||
Company | Description | Notes | MCh$ | MCh$ | MCh$ | ||||||
Redbanc S.A. | Automatic teller machine administration | — | — | 888 | |||||||
Transbank S.A. | Credit Card processing | — | — | 5,572 | |||||||
Combanc S.A. | Data transmission services | — | — | 164 | |||||||
Itaú Chile Cía. de Seguros | Insurance | — | — | 2,168 | |||||||
Itaú Chile Cía. de Seguros | Credit collection | — | — | 53 | |||||||
Itaú Chile Cía. de Seguros | Leases | — | — | 15 | |||||||
Recuperadora de Créditos S.A. | Credit collection | — | — | 1,030 | |||||||
Itaú Chile Inv. Serv. y Administración S.A. | Leases | — | — | 587 | |||||||
Itaú Unibanco S.A. | Advisory services | — | — | 6,610 |
These transactions were carried out at normal market prices prevailing on the days of the transactions.
In accordance with IAS 24, the relationship of all listed companies in the above table falls under the category “other related parties.”
c) Donations
As of December 31, 2017:
Balance Assets | Effect on Statement of Income |
||||||||
(Liability) | Income | (Expense) | |||||||
Company | Description | MCh$ | MCh$ | MCh$ | |||||
Fundación Corpgroup Centro Cultural | Donations | — | — | 1,302 | |||||
Fundación Descúbreme | Donations | — | — | 200 | |||||
Fundación Itaú | Donations | — | — | 167 | |||||
Fundación de Inclusión Social Aprendamos | Donations | — | — | 5 |
As of December 31, 2016:
Balance Assets | Effect on Statement of Income |
||||||||
(Liability) | Income | (Expense) | |||||||
Company | Description | MCh$ | MCh$ | MCh$ | |||||
Fundación Corpgroup Centro Cultural | Donations | — | — | 1,373 | |||||
Fundación Descúbreme | Donations | — | — | 173 | |||||
Fundación Itaú | Donations | — | — | 152 | |||||
Fundación de Inclusión Social Aprendamos | Donations | — | — | 5 |
As of December 31, 2015:
Balance Assets | Effect on Statement of Income |
||||||||
(Liability) | Income | (Expense) | |||||||
Company | Description | MCh$ | MCh$ | MCh$ | |||||
Fundación Itaú | Donations | — | — | 336 |
d) Other assets and liabilities with related parties
As of December 31, | |||||||
2017 | 2016 | 2015 | |||||
MCh$ | MCh$ | MCh$ | |||||
ASSETS | 23,962 | 44,790 | 2,251 | ||||
Derivative financial instruments | 21,687 | 33,951 | 1,807 | ||||
Other assets | 2,275 | 10,839 | 444 | ||||
LIABILITIES | 185,056 | 249,741 | 33,866 | ||||
Derivative financial instruments | 1,935 | 14,227 | 6,270 | ||||
Demand deposits | 37,464 | 69,473 | 3,757 | ||||
Deposits and other time deposits | 131,409 | 155,251 | 23,645 | ||||
Other liabilities | 14,248 | 10,790 | 194 |
e) Operating income / expenses from related party transactions
2017 | 2016 | 2015 | |||||||||||
Income | Expenses | Income | Expenses | Income | Expenses | ||||||||
Type of recognized income or expense | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | MCh$ | |||||||
Interest revenue | 10,146 | 4,902 | 11,370 | 5,913 | 167 | 1,817 | |||||||
Income and expenses on fees and services | 5,227 | — | 5,483 | — | 1,632 | — | |||||||
Gain and loss on trading | 2,333 | 1,534 | 3,399 | 7,810 | 1,887 | 6,303 | |||||||
Operating support expense | 537 | 99 | 324 | 438 | — | 40 | |||||||
Other income and expense | 216 | 390 | 70 | 303 | 225 | 382 | |||||||
Total | 18,459 | 6,925 | 20,646 | 14,464 | 3,911 | 8,542 |
f) Contracts with related parties
As of December 31, 2017:
Company | Description | |
Redbanc S.A. | Automatic teller machine administration | |
CAI Gestión Inmobiliaria S.A. | Commercial home (Department stores) | |
Unired S.A. | Payment management | |
Corp Imagen y Diseño S.A | Other services | |
Corp Research S.A | Advisory | |
Copesa S.A. | Advertising | |
Transbank S.A. | Credit card processing | |
Inversiones Santa Valentina S.A. | Administrative consulting | |
Combanc S.A. | Data transmission services | |
Servicios de Información Avanzada Comercial Financiera S.A | Advisory | |
Comder Contraparte Central S.A. | Advisory | |
Promoservice S.A. | Promotion services | |
Inversiones Corp Group Interhold S.A. | Administrative consulting | |
Nexus S.A. | Credit card processing | |
Rendic Hnos S.A. | Publishing services | |
Corp Group Holding Inversiones Limitada | Advisory | |
Inmobiliaria Edificio Corpgroup S.A. | Corporate office rent and building cost | |
Empresa Periodística La Tercera S.A. | Publishing services |
As of December 31, 2016:
Company | Description | |
Redbanc S.A. | Automatic teller machine administration | |
Pulso Editorial S.A | Publishing services | |
SMU S.A., Rendic Hnos S.A. | Prepaid rent for space for ATMs | |
CAI Gestión Inmobiliaria S.A. | Commercial home (Department stores) | |
Unired S.A. | Payment management | |
Corp Imagen y Diseño S.A | Other services | |
Corp Research S.A | Advisory | |
Compañía de Seguros Vida Corp S.A. | Brokerage of insurance premiums and office lease | |
Instituto profesional AIEP S.A | Advertising services | |
Distribución y Servicios META S.A. | Other services | |
Transbank S.A. | Credit card processing | |
Inversiones Santa Valentina S.A. | Administrative consulting | |
Opina S.A. | Advisory | |
Compañia de Seguros CorpSeguros S.A. | Office rent | |
Itaú Chile Inversiones, Servicios y Administración S.A. | Office rent | |
Combanc S.A. | Data transmission services | |
Servicios de Información Avanzada Comercial Financiera S.A | Advisory | |
Sinacofi S.A. | Data transmission services | |
Comder Contraparte Central S.A. | Advisory | |
Promoservice S.A. | Promotion services | |
Inversiones Corp Group Interhold S.A. | Administrative consulting | |
Operadora de Tarjeta de Crédito Nexus S.A. | Credit card processing | |
Laborum.com Chile S.A. | Publishing services | |
Corp Group Holding Inversiones Limitada | Advisory | |
Inmobiliaria Edificio Corpgroup S.A. | Corporate office rent and building cost | |
Empresa Periodística La Tercera S.A. | Publishing services |
As of December 31, 2015:
Company | Description | |
Itaú Chile Inversiones Servicios y Administración S.A. | Corporate office rent |
g) Remunerations to members of the board and key management personnel
Remunerations paid to key management personnel are set forth in the table below:
As of December 31 | |||||||
2017 | 2016 | 2015 | |||||
MCh$ | MCh$ | MCh$ | |||||
Short term benefits | 27,759 | 35,762 | 18,523 | ||||
Post-employment benefits | — | — | — | ||||
Other long-term benefits | — | — | 72 | ||||
Severance indemnities | 3,471 | 14,893 | — | ||||
Total | 31,230 | 50,655 | 18,595 |
2017
The total remuneration received during the year 2017 by the managers and chief executives of Itaú Corpbanca amounted to MCh$21,505.
2016
The total remuneration received during the year 2016 by the managers and chief executives of Itaú Corpbanca amounted to MCh$23,878.
2015
The total remuneration received during the year 2016 by the managers and chief executives of Itaú Corpbanca amounted to MCh$18,523.
h) Key management personnel
As of December 31, 2017, 2016 and 2015, the composition of the Bank’s key management personnel was as follows:
Number of executives | |||||||
As of December 31, | |||||||
Position | 2017 | 2016 | 2015 | ||||
Directors | 11 | 11 | — | ||||
Chief Executive Officers-at the Subsidiaries | 7 | 10 | 1 | ||||
Corporative Manager | 11 | 9 | 8 | ||||
Area manager | 94 | 102 | 3 | ||||
Deputy Managers | 155 | 149 | — | ||||
Vicepresident | 2 | 2 | — |
i) Transactions with key management personnel
During 2017, 2016 and 2015 transactions with key personnel were carried out as follows:
Income | |||||||
2017 | 2016 | 2015 | |||||
MCh$ | MCh$ | MCh$ | |||||
Credit Cards | 390 | 307 | 392 | ||||
Consumer loans | 793 | 868 | 717 | ||||
Commercial loans | 815 | 700 | 646 | ||||
Mortgages loans | 3,541 | 3,554 | 4,337 |