Formed in 2000, LQ Inversiones Financieras S.A. (LQIF) concentrates Quiñenco’s investments in the financial sector. Since 2001, its principal investment is its controlling stake in Banco de Chile, one of the largest financial institutions in Chile.

In 2007, LQIF signed a historic agreement with Citigroup for the joint development of their financial activities in Chile. At the beginning of 2008, Citigroup became a shareholder in LQIF with a 32.96% interest. The agreement also contemplates options for Citigroup to increase its shareholding in LQIF to 50% within 28 months from the date of closing of the transaction. One of the main aspects of the alliance is the merger of Banco de Chile with Citibank Chile, effective January 1, 2008.

Thanks to this association, the long standing success and leadership of Banco de Chile will be coupled with the experience and global leadership position of Citibank, thereby attaining a unique position in the Chilean market, as it will enable Banco de Chile to offer global services to its customers. The bank’s business will be driven by important economies of scale and synergies between both financial entities, the benefits of which are expected to be reflected in high profitability and efficiency ratios, evidencing the value creation from this association.

The group has a long and successful history in the Chilean financial sector. This includes the merger of Banco Santiago and Banco O’Higgins in 1997, the sale of the merged entity to Banco Santander Central Hispano (BSCH) in 1999, the acquisition of Banco Edwards in 1999 and of Banco de Chile in 2001, which were subsequently merged in 2002, having since produced a 120% real increase to date in terms of the market value of Banco de Chile.

2007 Results
LQIF reported net income of Ch$47,515 million in 2007, an increase of 34.3% over the previous year. The rise in net income was primarily attributable to an increase in equity investment income related to Banco de Chile. In addition, annual earnings benefited from an 8.6% decline in net interest expense and an improvement in price-level restatement results, the effects of which were partially offset by a reduction in tax credits.