Banco Santander Chile anuncia los resultados del Cuarto Trimestre 2019
Recurring ROAE of 17.7% reached in 2019.
Net income attributable to shareholders in 12M19 decreased 6.7% YoY with a stated ROAE at 16.7% for the twelve month period. This decline was mainly due to the increase of the Bank’s cost of credit form 1.0% in 2018 to 1.3% in 2019. This was partially offset by the 4.6% increase in net operating profit before provisions for loan losses as the Bank experienced a favorable year in business activity and client growth. The Bank also continued to show a world class efficiency ratio, which finished the year at 40%. Adjusting for the additional provisions in the fourth quarter of Ch$ 16 billion, as well as the one-time charge for the regulatory change in commercial loans analyzed on a group basis of Ch$31 billion in 3Q19, the recurring ROAE would have reached 17.7%.
Net income attributable to shareholders in 4Q19 totaled Ch$116,707 million (Ch$0.62 per share and
Record client growth in 2019
The Bank’s business activity remained solid in 4Q19 despite the social unrest. During 2019 total client growth reached record levels driven by higher client satisfaction and new product launches. These trends continued in the fourth quarter reflecting the strength of the Bank’s digital channels in capturing new clients and cross-selling existing ones. In 2018, client acquisition ranged between 30,000-40,000 a quarter compared to 84,248 in 3Q19 and 76,587 in 4Q19.
Cross-selling among existing clients also continued to rise in the quarter. Client loyalty2 continued to rise with loyal individual customers in the high-income segment growing 6.8% YoY and 4.3% YoY among Mid-income earners. Loyal SMEs clients rising 5.3% in 2019. Total digital customers3 increased 13.2% in 2019.
Top 2 for customer satisfaction and recommendation. Top 3 in GPTW
The rise in clients and cross-selling was also fueled by the ongoing improvements in client service. Between 15-20% of every employee’s targets now depend on the Bank’s NPS and customer satisfaction scores. These are done by an independent evaluator and the results are audited by an external entity. According to the latest surveys, we reached Top 2 in client recommendation (NPS) and satisfaction, closing the gap with the leader.
In 2019, we also improved our ranking according to the
Acquisition of Santander Consumer completed in
In the quarter we received the final approval of the CMF for the acquisition of 51% of
Getnet, our new acquiring business, performed its inaugural transaction. Klare subsidiary created.
In the quarter, we also made progress with our acquiring business, with the President of the Bank,
Advancing in ESG metrics.
During 2019, we continued to focus on ESG themes. During the year, we maintained our position as part of the Dow Jones Sustainability Index in
In the quarter, we also launched our first green product for retail clients. Clients can now compensate their monthly carbon footprint through our webpage and APP. The Bank with the aid of external advisors is now able to calculate a client’s carbon footprint based on their monthly expenditures. The amount of carbon a client uses can be offset by buying, on the Bank’s webpage or APP, carbon bonds or donating to a green project in
Non-interest bearing demand deposits increase 8.8% QoQ and 17.8% YoY
The Bank’s total deposits increased 7.7% YoY and 2.7% QoQ in 4Q19. In 4Q19, deposit growth was led by a strong rise of non-interest bearing demand deposits, which grew 8.8% QoQ and 17.8% YoY. This growth was due to high growth of retail checking accounts, continued strength in the Bank’s transactional banking services for companies, a seasonal rise in demand deposits in 4Q on behalf of corporates and a preference of clients for liquidity during the social unrest events. This also led to a high liquidity ratio at year-end with the Bank’s LCR and NSFR reaching 143% and 108%, respectively.
Loan growth driven by retail banking in the quarter
Total loans increased 8.1% YoY and 2.6% QoQ, led by loans in retail banking which grew 4.3% QoQ and 10.3% YoY. In 4Q19, Loans to individuals was the fastest growing segment and increased 5.1% QoQ and 11.3% YoY. Consumer loans increased 13.6% YoY and 9.4% QoQ driven by the incorporation of
In 4Q19, Net interest income, NII, increased 8.0% compared to 3Q19 and 5.1% compared to 4Q18. The Bank’s NIM in 4Q19 was 4.2%, lower than the 4.4% in 4Q18, but higher than the 4.0% in 3Q19. The QoQ increase in the NIM was mainly due to the higher UF inflation rate, a decrease of 25bp in the short-term interest rates, the improved funding mix driven by the high growth of demand deposits and an increase in long-term interest rates in the quarter. The variation of the UF5 was 0.9% compared to 0.5% in 3Q19, mainly due to the depreciation of the Chilean peso. Simultaneously, and in order to stimulate growth, the
Asset quality remains stable with conservative outlook leading to higher provisions
During the quarter provisions increased 31.2% compared to 3Q19 and 107.4% compared to 4Q18 due to higher provisioning resulting from the negative impact on asset quality from the social unrest in
The expected loan loss ratio (Loan loss allowance over total loans) increased slightly to 2.7% compared to 2.6% in the previous quarter. The NPL and Impaired loans ratio both increased by 10bp QoQ to 2.1% and 5.9%, respectively. The total Coverage ratio including the additional provisions reached 135.4% at year-end 2019. The cost of credit for 12M19 reached 1.34%, including all one-time impacts.
Fee income increased 6.9% QoQ driven by business segments
In 4Q19, fee income increased 6.9% compared to 3Q19 and 13.7% compared to 4Q18. The Bank experienced positive client and business activity in 4Q19, despite the social unrest. This was mainly due to the strength of the Bank’s digital channels, which continued attracting new clients and cross-selling existing ones. Fee growth in the quarter was mainly led by the following products: (i) a rebound of card fees due to the migration of our cards to an interchange fee model; (ii) an increase in collection fees from Santander Consumer Chile S.A, which we started to consolidate in the quarter (iii) an increase in financial advisory among our corporate clients.
Positive client and non-client treasury results in the quarter
Results from Total financial transactions, net was a gain of Ch$54,444 million in 4Q19, an increase of 52.2% compared to 4Q18 and a decrease of 15.9% compared to 3Q19. Client treasury services revenues reached a gain of Ch$35,080 million in the quarter, an increase of 1.9% compared to 4Q18 and a decrease of 7.1% compared to 3Q19. The movement of client treasury revenue, which usually makes up the bulk of our treasury income, reflects the demand on behalf of clients for treasury products, mainly for their hedging needs and market making. With the uncertainty in the global markets and volatility of exchange rates, demand for treasury products was strong during 2019, reaching the peak in 3Q19. The increase in demand for hedging products reflects a shift in the behavior of our commercial clients and the Bank’s ability to capture this profit generating business, strengthened by our good customer service.
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1.The information contained in this report is unaudited and is presented in accordance with Chilean Bank GAAP as defined by the Superintendency of Banks of
2. Loyal high income and middle income customers with 4 products plus a minimum profitability level and a minimum usage indicator, all differentiated by segment.
3 Digital customers are clients who access their web account using a passcode
4
5 UF or Unidad de Fomento, an inflation indexed unit used in
6 Additional provisions as defined by the CMF, which are not for any specific to any loan provisioning model and must be approved by the Board
CONTACT INFORMATION
Investor Relations
Bandera 140, Floor 20
Tel: (562) 2320-8284
Email: irelations@santander.cl
Website: www.santander.cl
Source: Banco Santander Chile