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Corpbanca 01 July 2008

Update Report – 1Q 08 Results

Retail positives offset by asset quality and macroeconomic concerns

Common HOLD Fundamental research indicates a 7% upside in the common stock for the coming 6-12 months. We
have calculated the target price based on fundamental factors using a weighted average of target
Stock prices derived through DCF and comparative valuation methodologies.
Direct access to the full report free of charge at
Ticker: COB.SN http://www.iirgroup.com/researchoracle/viewreport/show/20150
Target price: CLP3.06 We reiterate the common stock a HOLD on fundamental grounds, with a 6-12 month target price of
Current price: CLP2.85 CLP3.06.

ADR BUY The ADR is expected to appreciate by approximately 43% over the next 6-12 months as the 7%
fundamental upside is expected to be augmented by approximately 36 percentage points’ further
upside attributable purely to the anticipated appreciation of the Chilean peso against the US dollar
over the same period. We continue to value this company over a 6-12 month investment horizon, as
we expect a significant positive currency impact on the ADR over the medium term1.
Ticker: BCA
Target price: US$38.73 We reiterate the ADR (1 ADR = 5,000 common shares) a BUY, with a 6-12 month target price of
Current price: US$27.16 US$38.73.

Supervisor: Somnath Banerjee

Analyst: Akhil A. Nair Investment horizon - short term actionable trading strategies
Editor: James Smithies This report addresses the needs of strategic investors with a long term investment horizon of 6-12 months. If this
Global Research Director: report is provided to you by your broker under the Global Settlement, you may now also access (free of charge) the
Satish Betadpur, CFA short term trading outlook that we publish from time to time for this issuer, looking at the coming 5-30 days for
readers with a shorter trading horizon. These are available online only at www.researchoracle.com.
Next news due:
2Q 08 results, 28 July-07 August
2008
Report summary
Corpbanca achieved strong y-o-y growth in gross margin (total revenues) in 1Q 08, despite unfavorable
economic conditions prevalent in Chile. This growth was primarily attributable to steady Net Interest
Margin (NIM) growth, which was driven mainly by higher yields on inflation-indexed, interest-bearing
assets and growing penetration into the retail banking sector. Growth in Net Interest Income (NII) was
supported by higher fee-based income, reflecting strong demand for the bank’s retail products.
However, the bank reported an increase in provisions for loan losses, and continued to report trading
losses during the quarter, negatively impacting the bottom-line. We remain concerned that rising
inflation, coupled with slower economic growth and rising interest rates in Chile, could dampen the
bank’s loan portfolio expansion over the medium term. Moreover we remain concerned about the
bank’s increasing exposure to retail banking, which may have a negative impact on its credit quality,
leading to further increases in provision charges. Considering these factors, as well as the sensitivity of
the banking sector to ongoing volatility in global financial markets, our fundamental outlook remains
neutral.

Currency impact for US investors

The impact by itself of the anticipated currency movements on the ADR (now US$27.16), without
considering changes in the share price, is positive and is expected to be:

Over 6 months: US$33.53

Over 12 months: US$36.08

Page 1 Refer to page 4 for all footnotes