Our 12-month target price for BICECORP is ChP310/share. We calculate our target price using an estimation of BICECORP NAV with a holding discount of 10%. The banks are valued through a dividend discount model. We use a cost of equity of 11.3% with a long-term sustainable ROE of 13%.

We note the following risks to our target price falling short or exceeding our projections: i) operating risks of the integration of the banks and life insurance companies; ii) higher-than-expected integrations costs; and iii) loss of loans market share. Regarding the banks, the main risks are related to the economic cycle and its impact on loan portfolio quality.