BCH -3.4% in 7 Days Amid Earnings Miss and Analyst Upgrades

BCH, the Chilean banking giant, reported mixed quarterly results on November 7, 2025, with earnings call highlights indicating a cautiously optimistic performance in a volatile macroeconomic landscape. Net income for the period stood at CLP 927 million, reflecting a 1.9% year-on-year increase. Return on Average Capital (ROAC) was reported at 22.3%, a strong indicator of profitability efficiency. Operating revenues totaled CLP 736 billion, up 2.1% year-on-year, with customer income rising 5.4% to CLP 630 billion. The bank’s Net Interest Margin (NIM) for the 9-month period was 4.65%, a key measure of its ability to generate income from interest-bearing assets.

Despite these positive indicators, challenges remain. Loan growth has been subdued, with total loans declining 2.3% since December 2019, driven by an 18% drop in consumer lending. Non-customer income also fell 14.1% year-on-year, attributed to reduced inflation-related earnings. The efficiency ratio stood at 36.8%, and the cost of risk was 0.8% in Q3 2025. Capital metrics, however, remained robust, with a CET1 ratio of 14.2% and a total Basel III capital ratio of 18%, both comfortably above regulatory thresholds. The bank’s digital transformation initiatives also showed promise, with consumer loan originations rising in both volume and value.

The earnings release was followed by mixed analyst reactions. Goldman Sachs and Zacks Research upgraded their ratings, with Zacks moving to “Strong Buy” and Goldman raising the price target to $35 from $31. However, the earnings call revealed the bank had missed analysts' expectations for Q3, reporting earnings per share (EPS) of $0.60 against a forecast of $0.62. Revenue also fell short of estimates, coming in at $675.26 million compared to $831.97 million. The market responded with a 2.1% drop in the stock price in the days following the release. As of November 15, 2025, BCH traded at $500.80, with a 3.4% decline in the last seven days.

Technical indicators used in evaluating BCH’s performance include moving averages, with the 50-day average at $32.20 and the 200-day average at $30.44, suggesting a bearish near-term trend despite a higher beta of 0.28. The stock has traded between $22.06 and $37.70 over the past year, and its price-to-earnings ratio stands at 13.06. The PEG ratio of 2.74 reflects a moderate growth expectation relative to its current valuation.

Backtest Hypothesis
From 2022 to 2025, the earnings release date has had a consistent negative impact on BCH’s stock price, particularly after the Q1 2022 earnings call. Historical data shows a general decline in BCH’s valuation, reflecting broader macroeconomic concerns, including a downward revision of Chile’s growth outlook and rising inflation. While rising interest rates have benefited the bank’s net interest margin, they have also dampened mortgage loan growth and raised the risk of non-performing loans. Analyst upgrades and price target increases have failed to offset the broader bearish sentiment, particularly in sectors like consumer lending. The banking industry in Chile continues to grapple with high inflation and tightening monetary policy, factors that have historically weighed on BCH’s performance. Market sentiment, influenced by regional and global economic pressures, remains bearish, with the bank’s efforts to attract SMEs via programs like Fogape Reactiva yet to yield positive short-term results.