BCH Drops 3.4% Over the Past Week Despite Earnings Shortfall and Positive Analyst Revisions

On November 7, 2025, BCH, a major Chilean bank, released its quarterly report, revealing a blend of positive and challenging results amid ongoing macroeconomic uncertainty. The bank posted a net profit of CLP 927 million, marking a 1.9% increase from the previous year. Its Return on Average Capital (ROAC) reached 22.3%, highlighting strong profitability. Operating revenue climbed 2.1% year-over-year to CLP 736 billion, while income from customers rose 5.4% to CLP 630 billion. For the first nine months, the Net Interest Margin (NIM) was 4.65%, underscoring the bank’s effectiveness in generating interest income.

However, the bank continues to face headwinds. Overall lending activity has remained weak, with total loans shrinking by 2.3% since December 2019, largely due to an 18% reduction in consumer loans. Non-customer income dropped 14.1% compared to the previous year, mainly because of lower inflation-linked earnings. The efficiency ratio was 36.8%, and the risk cost for the third quarter of 2025 stood at 0.8%. Despite these challenges, capital strength remained solid, with a CET1 ratio of 14.2% and a total Basel III capital ratio of 18%, both comfortably above regulatory requirements. The bank’s digital initiatives also made progress, as consumer loan originations increased in both number and value.

Analyst responses to the earnings announcement were mixed. Zacks Research upgraded its rating to “Strong Buy,” and Goldman Sachs raised its price target from $31 to $35. Despite these upgrades, the bank missed Q3 analyst expectations, reporting earnings per share (EPS) of $0.60, below the projected $0.62. Revenue also came in lower than anticipated at $675.26 million, compared to the expected $831.97 million. Following the report, BCH’s stock price dropped by 2.1% in the subsequent days. As of November 15, 2025,

was trading at $500.80, reflecting a 3.4% decrease over the past week.

Technical analysis of BCH includes moving averages, with the 50-day average at $32.20 and the 200-day average at $30.44, indicating a short-term bearish outlook despite a relatively high beta of 0.28. Over the last year, the stock has fluctuated between $22.06 and $37.70, and its price-to-earnings ratio is 13.06. The PEG ratio stands at 2.74, suggesting moderate growth expectations relative to its valuation.

Backtest Hypothesis
Between 2022 and 2025, BCH’s stock price has consistently declined following earnings announcements, especially after the Q1 2022 report. Historical trends point to a general decrease in the bank’s valuation, mirroring broader economic concerns such as Chile’s downgraded growth forecasts and rising inflation. While higher interest rates have improved the bank’s net interest margin, they have also slowed mortgage lending and increased the risk of loan defaults. Analyst upgrades and higher price targets have not been enough to counteract the prevailing negative sentiment, particularly in consumer lending. The Chilean banking sector continues to struggle with persistent inflation and tighter monetary policy, both of which have historically pressured BCH’s results. Market sentiment remains negative, shaped by both local and global economic factors, and the bank’s initiatives to attract small and medium-sized enterprises, such as through the Fogape Reactiva program, have yet to deliver significant short-term gains.