Optimists still outnumber cynics though; the first issue has sold out. And the bank will pay dividends this year, though only to the new shareholders. The increase in its capital base has allowed the bank to shift a proportion of its bad debts to the central bank, in exchange for government paper. Last year it made a trading profit though its accumulated losses are in the region of $500 million.
No one is predicting any substantial increase in banking business this year or in the near future. (Its total activity last year in loans and investments was about $11.5 billion.) The banks made a killing in the decade between 1974 and 1984, said Gustavo Ramdohr, chairman of a major consumer electrical company. Real interest rates, he calculated, averaged 30% for the best part of that period, when the financial system really took off.
But now, in the lean years, Chile is over-banked and most of the 19 national and 19 foreign banking institutions are competing in the general field. There's going to be a lot more pushing and shoving in the next couple of years, said one analyst, and some national banks are going to have to merge or go under.