NOTE 22
CONTINGENCIES AND COMMITMENTS
a) Lawsuits and legal procedures
As of the issuance date of these financial statements, the Bank and its affiliates were subject to certain legal actions in the normal course of their business. As of December 31, 2017, the Banks and its subsidiaries have provisions for this item of Ch$1,214.2 million and Ch$0 million, respectively (Ch$1,194 million and Ch$48 million as of December 31, 2016) which is included in “Provisions” in the Consolidated Statement of Financial Position as provisions for contingencies.
b) Contingent loans
The following table shows the Bank’s contractual obligations to issue loans:
| As of December 31, | |||
| 2017 | 2016 | ||
| MCh$ | MCh$ | ||
| Letters of credit issued | 201,699 | 158,800 | |
| Foreign letters of credit confirmed | 75,499 | 57,686 | |
| Guarantees | 1,823,793 | 1,752,610 | |
| Personal guarantees | 81,577 | 125,050 | |
| Subtotal | 2,182,568 | 2,094,146 | |
| Available on demand credit lines | 8,135,489 | 7,548,820 | |
| Other irrevocable credit commitments | 260,691 | 260,266 | |
| Total | 10,578,748 | 9,903,232 | |
c)
Held
securities
The Bank holds securities in the normal course of its business as follows:
| As of December 31, | |||
| 2017 | 2016 | ||
| MCh$ | MCh$ | ||
| Third party operations | |||
| Collections | 175,200 | 163,303 | |
| Assets from third parties managed by the Bank and its affiliates | 1,660,804 | 1,586,405 | |
| Subtotal | 1,836,004 | 1,749,708 | |
| Custody of securities | |||
| Securities held in custody | 383,002 | 390,155 | |
| Securities held in custody deposited in other entity | 760,083 | 687,610 | |
| Issued securities held in custody | 22,046,701 | 18,768,572 | |
| Subtotal | 23,189,786 | 19,846,337 | |
| Total | 25,025,790 | 21,596,045 | |
During 2017, the Bank classified the portfolios managed by private banking in “Assets from third parties managed by the Bank and its affiliates” (memo account). At the end of December 2017, the balance for this was Ch$ 1,660,768 million (Ch$ 1,586,370 million at December 31, 2016).
d) Guarantees
Banco Santander Chile has comprehensive officer fidelity insurance policy, No. 4505199, with the Chilena Consolidada de Seguros insurance company, for USD 50,000,000 which jointly covers both the Bank and its affiliates for the period from July 1, 2017 to June 30, 2018.
| e) | Contingent loans and liabilities |
To satisfy its clients’ needs, the Bank took on several contingent loans and liabilities that are not be recognized in the Consolidated Financial Statement of Financial Position; these contain loan risks and they are, therefore, part of the Bank`s global risk.