Debt & Market Risk
Santander Chile offers a variety of fixed income instruments to investors around the world, raising funding across different geographies as well. The main sources of funding for the Bank are:
- Demand deposits: In Chile, current accounts are not interest-bearing.
- Time deposits: In Chile, time deposits tend to be relatively short-term and large proportion of them are payable within 90 days.
- Long-term debt: Issued to primarily fund our long-term assets, such as mortgages.
Santander Chile maintains a strong investment grade rating. See more information under Our Ratings.
Bonds
We have senior and subordinated bonds, through both public and private placements. The Chilean bond market is deep due to the structure of the economy: local pension funds seek long-term investing in local currency, through Chilean pesos or the inflation-linked currency, the UF.
Santander Chile also has an MTN Program. This program ensures the bank has flexibility when choosing maturity, coupon, currency and the investor base. We currently issue in the following currencies: Euros, Swiss francs, Japanese yen, Australian dollars, and U.S. dollars.
We have outstanding mortgage bonds, issued in the local market.
At the beginning of 2019, a new Banking Law was passed that will move the Chilean banking industry into Basel III. With this in mind, in the future we will be able to issue AT1 bonds.
Market Risk
Liquidity Ratios
Each quarter, the Central Bank obligates all banks to publish their Liquidity Situation. Here, you can find the Bank’s liquidity position in local and foreign currency. Since the Chilean system is undergoing the transition to BIS III, as of April 2019, Chilean banks have started managing the LCR. The limit began at 60% and converges to 100% at the end of 2023, increasing by 10 percentage points in October of each year. Limits for NSFR are still under discussion.
Since Banco Santander Chile is part of the Santander Group, the Bank has managed the LCR and NSFR for many years now under the ECB requirements.