BCH -2.06% on Weak Loan Growth and Reduced Institutional Holdings

BCH, the stock ticker for Banco de Chile, has seen a notable decline in recent market performance. On NOV 14 2025, the asset recorded a 5.24% drop in the last 24 hours, with a 4.15% decline in the past week and a more pronounced 9.81% drop over the last 30 days. Despite this, the one-year trend remains positive with an 11.07% increase. These movements highlight a complex short-term bearish bias within the stock.

The latest earnings report from Banco de Chile signals slowing growth. Earnings are attributed to a combination of lower inflation adjustment income and weak loan growth across its core business lines. The bank, which operates under multiple brand identities including Banco Edwards-Citi and Banco CrediChile, generates approximately 60% of its net interest income from mortgage, unsecured consumer credit, and commercial loans. Recent data suggests that the institution’s performance is beginning to reflect broader economic headwinds, particularly in its loan portfolio and income diversification.

Analysts at Morningstar have noted the firm’s current price of $36.67 and assigned it a fair value estimate, while Goldman Sachs has maintained a Neutral recommendation for BCH on NOV 11, 2025. According to the firm’s analysis, the average one-year price target stands at $36.93 per share, representing a modest 0.70% upside potential. This forecast aligns with the broader institutional sentiment, though market fundamentals suggest ongoing caution. Institutional holdings in BCH have experienced a 3.53% decrease in the last quarter, with major players like Baillie Gifford significantly reducing their stakes.

The technical indicators and institutional behaviors have been closely monitored. The put/call ratio for BCH currently stands at 4.11, reflecting a bearish investor outlook. Additionally, changes in fund allocations and ownership shifts have underscored the evolving sentiment toward the stock. While some institutions have increased their positions—such as Bridge Builder International Equity Fund—others have reduced their exposure, contributing to a mixed but largely cautious market narrative.

The technical landscape is further influenced by the performance of the broader market and the financial services sector. With Banco de Chile’s fair value rating and stewardship assessment factored into the equation, the company appears to be in a holding pattern rather than experiencing a transformative phase. The absence of a strong earnings beat or improved loan growth metrics continues to dampen investor enthusiasm.

In evaluating the potential impact of these conditions, technical indicators have played a central role in shaping the backtesting strategy. The approach focuses on event-driven market reactions, particularly in relation to institutional behavior and earnings announcements.

Backtest Hypothesis

To develop a robust event-impact backtest, it is essential to evaluate how specific market conditions—such as earnings releases and institutional buying or selling—affect stock performance. In this scenario, the backtest is designed to analyze the effect of earnings surprises and institutional shareholding changes on BCH’s price trajectory. The hypothesis is that a decline in institutional ownership, especially when paired with below-expected earnings, leads to a statistically significant negative impact on the stock price. The test will isolate variables such as the magnitude of earnings surprises and the direction and volume of institutional trades to determine their influence on price volatility and directional bias.