According to Chilean regulations for banks, banks must pay-out at least 30% of net income as dividends, as long as the dividend does not result in the infringement of minimum capital requirements. The annual dividend is determined by shareholders in the annual shareholder meeting. Dividends declared at the annual shareholders’ meeting of each year correspond to the Bank’s earnings of the previous year. The final payout ratio is set taking into consideration the Bank’s capital and financial position, as well as the growth prospects in the future.
Holders of ADSs are entitled to receive dividends on the underlying shares to the same extent as the holders of shares. Dividends received by holders of ADSs will be paid net of foreign currency exchange fees and expenses of the Depositary and will be subject to Chilean withholding tax, currently imposed at a rate of 35.0% (subject to credits in certain cases). If for any reason, including changes in Chilean law, the Depositary were unable to convert Chilean pesos to U.S. dollars, investors would receive dividends and other distributions, if any, in Chilean pesos.
The following table presents dividends declared and paid by us in nominal terms in the following years. The record date and payment date are for the Chilean market, although are very similar for the ADSs:
