NOTE 5 CASH AND CASH EQUIVALENTS
a) Detail of cash and cash equivalents
The detail of the balances included under cash and cash equivalents is as follows:
| As of December 31, | |||||
| 2017 | 2016 | ||||
| MCh$ | MCh$ | ||||
| Cash and deposits in banks (1) | |||||
| Cash | 254,824 | 274,570 | |||
| Deposits in the Central Bank of Chile | 53,187 | 207,483 | |||
| Deposits in national banks | 9,389 | 2,116 | |||
| Foreigns deposits | 646,630 | 1,002,968 | |||
| Subtotal cash and deposits in banks | 964,030 | 1,487,137 | |||
| Cash in the process of collection, net (5b)) | 47,521 | 78,356 | |||
| Highly liquid financial instruments (2) | 35,014 | 381,009 | |||
| Investments under agreements to resell (3) | 28,524 | 170,242 | |||
| Total cash and cash equivalents | 1,075,089 | 2,116,744 | |||
(1) Amount in “Cash,” “Deposits in Central Bank of Chile” and Bank of the Republic of Colombia (included in “Foreign deposits”) are regulatory reserve deposits for which the Bank must maintain a certain monthly average.
(2) Corresponds to those financial instruments in the trading portfolio and available-for-sale portfolio with maturities that do not exceed three months from their dates of acquisition:
| As of December 31, | |||||||
| 2017 | 2016 | ||||||
| Notes | MCh$ | MCh$ | |||||
| Trading securities | 6 | 19,239 | 29,472 | ||||
| Financial assets available for sale | 11 | 15,775 | 351,537 | ||||
| Highly Liquid Financial Instruments | 35,014 | 381,009 | |||||
(3) Corresponds to investments under agreements to resell with maturities that do not exceed three months from their dates of acquisition.
| As of December 31, | |||||||
| 2017 | 2016 | ||||||
| Notes | MCh$ | MCh$ | |||||
| Investment under agreement to resell | 7a) | 28,524 | 170,242 | ||||
b) Cash in the process of collection
Cash in the process of collection is short-term, amounts in transit of collection.
| As of December 31, | |||||
| 2017 | 2016 | ||||
| MCh$ | MCh$ | ||||
| Assets (Cash in the process of collection) | |||||
| Outstanding notes from other banks | 66,996 | 60,546 | |||
| Funds receivable | 90,021 | 85,223 | |||
| Subtotal assets | 157,017 | 145,769 | |||
| Liabilities (Transaction in the course of payment) | |||||
| Funds payable | 109,496 | 67,413 | |||
| Subtotal liabilities | 109,496 | 67,413 | |||
| Net items in course of collection | 47,521 | 78,356 | |||
c) Cash flows from operations
Based on the banking nature of our activities, we considered that our funding has a direct relationship with our loan and investing portfolio, as all those activities are taken into consideration to determine, approve and monitor the financial strategies that guide the Bank with respect to the composition of its assets and liabilities, cash inflows and outflows and transactions with financial instruments.
Based on our overall strategy, the Bank considers gains and losses derived from these operations are part of our main revenue producing activities and core business and the presentation of the cash flows from those items under operating activities shows consistency between our Statement of Income and our Statement of Cash Flows.
Examples of cash flows from operating activities are:
i. Receivables from repurchase agreements and securities borrowing and Payables from repurchase agreements and securities lending. These items represent the cash flows (collections and payments) corresponding to the purchase and sale of obligations and securities lending, financial intermediation activities (see Note 7 and Note 1.i).
ii. Investing Portfolio. This item represents the cash flows (collections and payments) of our trading and non-trading portfolio related financial instruments (see Notes 11, 16 and Note 1.j).
iii. Foreign borrowings obtained and Repayment of foreign borrowings. These items represent the cash flows (collections and payments) of obligations with foreign banks (see note 17) for the financing of foreign trade loans, which are included as part of the items entitle “Loans and receivables from banks” (see note 9) and “Loans and receivables from customers” (see note 10 and note 1.n).
iv. Repayment of other borrowings. These items represent the cash flows (collections and payments) arising from the obligations corresponding to financing or operations specific to the business (see note 18).