--Foreign and local currency long-term Issuer Default Rating (IDR) 'A+';

--Foreign and local currency short-term IDR 'F1';

--Individual 'C';

--Support '1'.

The Rating Outlook is Negative, reflecting the same Outlook on the ratings of its parent.

At the same time, Fitch has affirmed the bank's national long- and short-term rating of 'AAA(cl)' and 'N1+(cl)', respectively. The Outlook is Stable.

The ratings assigned to HSBC Bank Chile reflect the potential support from its parent company, HSBC Holdings Plc (Long-term IDR 'AA' with Negative Outlook by Fitch), which has demonstrated clear support for all of its foreign subsidiaries.

HSBC Bank Chile is small and has a marginal loan market share. Its loan book is small, although it has grown steadily in the past two years, and mainly comprised corporate lending and foreign trade financing. Its asset quality is sound, with insignificant past-due loans, although concentration is high as a consequence of the size of the portfolio. Fitch expects this concentration to decrease in the medium term as the bank grows organically with a focus on lending to smaller size companies and high net worth individuals.

The bank's largest asset is its securities portfolio and derivatives instruments, which accounted for 32.1% of its assets at the end of May 2009. Therefore, trading and financial operations income is a decisive factor in the bank's net income, which explains the volatility in its profitability. This volatility should decline as lending expands and net interest revenue gains weight in the bank's income structure. Market risk is acceptable, thanks to its conservative internal and regulatory limits and the risk management systems and expertise available from the HSBC Group.

Funding mainly consists of short-term deposits from institutional investors, as it does not have a retail deposit base given its lack of a branch network.

HSBC Bank Chile's capitalization is strong: its ratio of total capital to risk-weighted assets was a high 21.7% at the end of May 2009 and was mostly Tier 1 capital.

HSBC Bank Chile is fully owned by HSBC Latin America Holdings (UK) Limited, which in turn is a subsidiary of HSBC Holdings Plc. Its main businesses are with large corporate segments, mainly in foreign trade operations, treasury and securities intermediation, although it plans to grow focusing on large and medium companies and high net worth individuals.

Credit research on HSBC Bank Chile is available on Fitch's web site at 'www.fitchresearch.com' or by contacting the Ratings Desk in London at +44-20-7417-6300.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

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