FORM
6-K
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Report
of Foreign Issuer
Pursuant
to Rule 13a-16 or 15d-16 of
the
Securities Exchange Act of 1934
Commission
File Number: 001-14554
Banco
Santander Chile
Santander
Chile Bank
(Translation
of Registrant’s Name into English)
Bandera
140
Santiago,
Chile
(Address
of principal executive office)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F:
|
Form 20-F
|
x
|
Form 40-F
|
o
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Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1):
|
Yes
|
o
|
No
|
x
|
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7):
|
Yes
|
o
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No
|
x
|
Indicate
by check mark whether by furnishing the information contained in this Form, the
Registrant is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
|
Yes
|
o
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No
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x
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If
“Yes” is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): N/A
Table
of Contents
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Item
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||
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1.
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4Q2010
Earnings Release (Chilean Bank
GAAP)
|
2
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
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BANCO
SANTANDER-CHILE
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|
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By:
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/s/
|
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Name:
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Juan
Pedro Santa María
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Title:
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General
Counsel
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Date:
February 4, 2011
3
FOURTH
QUARTER 2010
EARNINGS
REPORT
INDEX
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SECTION
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PAGE
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SECTION
1: SUMMARY OF RESULTS
|
2
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SECTION
2: BALANCE SHEET ANALYSIS
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6
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SECTION
3: ANALYSIS OF QUARTERLY INCOME STATEMENT
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9
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SECTION
4: CREDIT RISK RATINGS
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16
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SECTION
5: SHARE PERFORMANCE
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17
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SECTION
6: SUMMARY OF NEW PROVISIONING GUIDELINES FOR COMMERCIAL LOANS ANALYZED ON
AN INDIVIDUAL BASIS
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18
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ANNEX
1: BALANCE SHEET
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20
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ANNEX
2: YEAR TO DATE INCOME STATEMENT
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21
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ANNEX
3: QUARTERLY INCOME STATEMENTS
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22
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ANNEX
4: QUARTERLY EVOLUTION OF MAIN RATIOS AND OTHER
INFORMATION
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23
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CONTACT INFORMATION
|
Santiago,
Chile
|
|
Robert
Moreno
|
Tel:
(562) 320-8284
|
|
Manager,
Investor Relations Department
|
Fax:
(562) 671-6554
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Banco
Santander Chile
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Email:
rmorenoh@santander.cl
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|
Bandera
140 Piso 19
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Website:
www.santander.cl
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Investor
Relations Department
|
1
|
|
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax:
562-671-6554,
|
|
|
email:
rmorenoh@santander.cl
|
SECTION 1: SUMMARY OF
RESULTS
Net income increases 6.6%*
QoQ in 4Q10
Santander
Chile: Solid performance in 4Q10 and 12M10
Year-to-date
& Quarterly results, Ch$ billion and change, %
|
|
*
|
Excludes
one-time provision expense of Ch$39,800 million included in Other
operating expenses. See Provision Expense and Other operating income and
expenses.
|
In 4Q10,
net income attributable
to shareholders1
totaled Ch$93,872 million (Ch$0.50 per share and US$1.11/ADR2). Excluding a one-time
charge of Ch$39,800 million recognized in the quarter as a result of new
regulatory provisioning standards for commercial loans3, adjusted net income
totaled Ch$133,672 million (Ch$0.71 per share and US$1.57 per ADR) and increased
6.6% compared to third quarter 2010 (QoQ) and -2.6% compared to 4Q09
(YoY).
Adjusted ROAE reaches 29.7% in 4Q10. Core capital
at 10.6%.
With
these results, the Bank’s ROAE, excluding the one-time
charge, reached 29.7% in 4Q10. The Bank currently has one of the highest ROEs
and capitalization levels in the Chilean financial system. As of December 31,
2010, the Bank’s BIS ratio reached 14.5% and its Core Capital ratio stood at
10.6%. The Bank has consistently produced high ROEs and one of the largest gaps
between ROE and cost of capital among banks in Emerging Markets.
|
Quarterly
ROE 2010 (%)
|
|
 |
*
Excludes one-time charge of Ch$39,800 million.
1 The
results in this report are unaudited.
|
Investor
Relations Department
|
2
|
|
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax:
562-671-6554,
|
|
|
email:
rmorenoh@santander.cl
|
Strong loan growth in the
quarter. Retail loans up 4.3% QoQ and 14,9% YoY in 4Q10
In 4Q10,
total loans increased 2.8% QoQ (14.1% YoY). Higher yielding retail loans – which
include loans to individuals and small and middle-sized companies, SMEs -
increased 4.3% QoQ (14.9% YoY).
Loans to individuals increased
4.6% QoQ (15.4% YoY), led by a 5.7% QoQ increase (20.4% YoY) in consumer loans,
especially credit cards loans that expanded 12.3% QoQ (35.3% YoY). This positive
evolution was driven by a strong Christmas shopping season and a greater client
preference of purchasing goods with the Bank’s cards instead of other means of
payments.
Residential mortgage loans
increased 3.4% QoQ (11.8% YoY), as long-term rates remained attractive and
demand for purchasing housing continues to rise.
Lending to SMEs increased 3.2%
QoQ (13.2% YoY) reflecting the strength of economic growth and the Bank’s focus
on this high yielding segment.
|
Retail
loans (Ch$bn)
|
|
 |
* Includes
loans to individuals and SMEs.
Core Revenues: positive
commercial trends partially offset by negative impact of rising
rates
Core revenues, which includes
Net interest income and fee income, were flat QoQ and up 4.0% YoY in 4Q10.
During the quarter, commercial activity was strong and the Bank’s loan market
share continued to increase. The most important rise in market share has been in
consumer and credit card loans, which increased 190 basis points, since the
beginning of the year to 27.7% as of December 2010.
|
Santander
Chile Loan Market Share (%)
|
|
 |
Source:
Superintendency of Banks of Chile
On the
other hand, inflation trends in 4Q10 were below expectations (the quarterly
inflation rate was down 11 basis points compared to 3Q10), while the Central
Bank increased short-term interest rates 75 basis points to 3.25% in the
quarter. As a result, net
interest income decreased 1.6% QoQ as the Bank’s margins have a positive
sensitivity to inflation and a negative sensitivity to a rise in short-term
rates. Net interest income was up 2.9% YoY in 4Q10. Going forward, we forecast
inflation to be higher in 2011 and asset yields should gradually incorporate the
rising interest rate environment.
Fee income was up 4.8% QoQ
(7.8% YoY) as product usage and cross-selling indicators continued to improve in
the quarter. Fees from credit, debit and ATM cards increased 8.6% QoQ. YoY
purchases with Santander cards as of November 2010 were up 28.7% in real terms.
Greater commercial activity in retail banking also boosted fees from our
insurance brokerage subsidiary that increased 15.5% QoQ. Asset management fees
grew 7.7% in the same period.
|
Investor
Relations Department
|
3
|
|
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax:
562-671-6554,
|
|
|
email:
rmorenoh@santander.cl
|
The rise
in interest rates also had a negative impact on the Bank’s fixed income
portfolio. The net results from
financial transactions were down 9.5% QoQ. This was partially offset by a
9.1% QoQ increase in income derived from client driven treasury
services.
Asset quality improved in the
quarter. The NPL ratio reached 2.66% as of December 31, 2010 compared to 2.68%
as of September 30, 2010 and 2.98% at year-end 2009. The coverage ratio of total
NPLs reached 106.1% as of December 31, 2010 compared to 105.1% as of September
30, 2010 and 85.4% at year-end 2009. The 9.0% QoQ increase in provision expense in the
quarter was mainly driven by loan growth, and our more conservative provisioning
standards for consumer loans introduced in 3Q10.
Operating expenses increased
2.5% QoQ in line with the increase in business activity. Total headcount and
compensation did not vary significantly in the quarter. Administrative expenses
were flat in the quarter. The efficiency ratio, excluding the one-time charge of
Ch$39,800 million recognized in Other operating expenses, reached 34.9% in
4Q10.
ROAE reached 27.9% in 2010
and net income was up 10.6%
In 2010
(12M10), net income attributable to shareholders totaled Ch$477,155 million
(Ch$2.53/share and US$5.62/ADR) and increased 10.6% compared to results in 2009
(12M09). Gross income, net of provisions and costs increased 7.4% with a 9.7%
increase in net interest revenue, a 3.7% increase in fee income, an 18.6%
decrease in provisions and a 10.8% rise in operating costs. The Bank’s net
interest margin reached 5.8%, 30 basis point above the margins reached in 12M09.
The efficiency ratio in 2010 reached 35.3% and the ROAE was 27.9%.
In
summary, 2010 was year in which Santander Chile led the rebound in growth of
retail banking activity. At the same time, the Bank, in anticipation of a more
positive economic environment forecast for the coming years, continued to
improve its credit scoring models, began investing in technology and
distribution capabilities while confronting the negative impacts of the
earthquake.
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Investor
Relations Department
|
4
|
|
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax:
562-671-6554,
|
|
|
email:
rmorenoh@santander.cl
|
Banco Santander Chile:
Summary of Quarterly Results
|
Quarter
|
Change %
|
|||||||||||||||||||
|
(Ch$ million)
|
4Q10 | 3Q10 | 4Q09 | 4Q10 / 4Q09 | 4Q / 3Q 10 | |||||||||||||||
|
Net
interest income
|
231,865 | 235,674 | 225,379 | 2.9 | % | (1.6 | )% | |||||||||||||
|
Fee
income
|
69,637 | 66,436 | 64,598 | 7.8 | % | 4.8 | % | |||||||||||||
|
Core
revenues
|
301,502 | 302,110 | 289,977 | 4.0 | % | (0.2 | )% | |||||||||||||
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Financial
transactions, net
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19,661 | 21,713 | 37,147 | (47.1 | )% | (9.5 | )% | |||||||||||||
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Provision
expense
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(62,077 | ) | (56,971 | )1 | (67,754 | ) | (8.4 | )% | 9.0 | % | ||||||||||
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Operating
expenses
|
(116,380 | ) | (113,570 | ) | (102,732 | ) | 13.3 | % | 2.5 | % | ||||||||||
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Gross
income, net of provisions & costs
|
142,706 | 153,282 | 156,638 | (8.9 | )% | (6.9 | )% | |||||||||||||
|
Adjusted
Net income attributable to shareholders
|
133,672 |
2
|
125,356 | 137,309 | (2.6 | )% | 6.6 | % | ||||||||||||
|
Net
income attributable to shareholders
|
93,872 | 125,356 | 137,309 | (31.6 | )% | (25.1 | )% | |||||||||||||
|
Net
income/share (Ch$)
|
0.50 | 0.67 | 0.73 | (31.6 | )% | (25.1 | )% | |||||||||||||
|
Net
income/ADR (US$)3
|
1.11 | 1.42 | 1.49 | (26.1 | )% | (22.4 | )% | |||||||||||||
|
Total
loans4
|
15,657,557 | 15,232,019 | 13,727,864 | 14.1 | % | 2.8 | % | |||||||||||||
|
Customer
funds
|
14,683,342 | 14,452,628 | 14,136,620 | 3.9 | % | 1.6 | % | |||||||||||||
|
Shareholders’
equity
|
1,831,798 | 1,757,340 | 1,658,316 | 10.5 | % | 4.2 | % | |||||||||||||
|
Net
interest margin
|
5.4 | % | 5.7 | % | 5.8 | % | ||||||||||||||
|
Efficiency
ratio
|
39.6 | % | 33.8 | % | 30.5 | % | ||||||||||||||
|
Return
on average equity5
|
20.8 | % | 29.3 | % | 34.1 | % | ||||||||||||||
|
NPL
/ Total loans6
|
2.7 | % | 2.7 | % | 3.0 | % | ||||||||||||||
|
Coverage
NPLs7
|
106.1 | % | 105.1 | % | 85.4 | % | ||||||||||||||
|
PDLs/
Total loans8
|
1.32 | % | 1.36 | % | 1.41 | % | ||||||||||||||
|
Coverage
PDLs
|
214.05 | % | 206.64 | % | 180.85 | % | ||||||||||||||
|
Risk
index9
|
2.82 | % | 2.82 | % | 2.55 | % | ||||||||||||||
|
BIS
ratio
|
14.5 | % | 14.5 | % | 15.6 | % | ||||||||||||||
|
Branches
|
504 | 500 | 498 | |||||||||||||||||
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ATMs
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2,018 | 1,914 | 1,917 | |||||||||||||||||
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Employees
|
11,001 | 11,049 | 11,204 | |||||||||||||||||
|
1.
|
Includes
provision reversal for contingent loans, which is included in Other
operating income in 3Q10.
|
|
2.
|
Net
income 4Q10 excludes one-time charge of Ch$39,800 million recognized in
Other operating expenses.
|
|
3.
|
The
change in earnings per ADR may differ from the change in earnings per
share due to the exchange rate. Earnings per ADR was calculated using an
exchange rate of Ch$468.37 per US$.
|
|
4.
|
Excludes
interbank loans.
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|
5.
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Annualized
quarterly Net income attributable to shareholders / Average equity
attributable to shareholders.
|
|
6.
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NPLs:
Non-performing loans; full balance of loans with one installment 90 days
or more overdue.
|
|
7.
|
Loan
loss allowances / NPLs.
|
|
8.
|
PDLs:
Past due loans; all loan installments that are more than 90 days
overdue.
|
|
9.
|
Risk
Index: Loan loss allowances / Total loans; measures the percentage of
loans the Bank’s must provision for given its internal models and the
Superintendency of Banks
guidelines.
|
|
Investor
Relations Department
|
5
|
|
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax:
562-671-6554,
|
|
|
email:
rmorenoh@santander.cl
|
SECTION 2: BALANCE SHEET
ANALYSIS
LOANS
Retail
lending increases 4.3% QoQ in 4Q10
|
Loans
|
Quarter
ended,
|
%
Change
|
||||||||||||||||||
|
(Ch$
million)
|
Dec-10
|
Sep-10
|
Dec-09
|
Dec.
10 / 09
|
Dec.
10 /
Sept.
10
|
|||||||||||||||
|
Total
loans to individuals1
|
8,407,416 | 8,035,617 | 7,287,296 | 15.4 | % | 4.6 | % | |||||||||||||
|
Consumer
loans
|
2,700,791 | 2,554,884 | 2,244,035 | 20.4 | % | 5.7 | % | |||||||||||||
|
Residential
mortgage loans
|
4,651,136 | 4,498,799 | 4,159,052 | 11.8 | % | 3.4 | % | |||||||||||||
|
SMEs
|
2,375,192 | 2,301,536 | 2,097,592 | 13.2 | % | 3.2 | % | |||||||||||||
|
Total
retail lending
|
10,782,608 | 10,337,153 | 9,384,888 | 14.9 | % | 4.3 | % | |||||||||||||
|
Institutional
lending
|
331,153 | 340,274 | 291,867 | 13.5 | % | (2.7 | )% | |||||||||||||
|
Middle-Market
& Real estate
|
3,288,107 | 3,160,681 | 2,779,165 | 18.3 | % | 4.0 | % | |||||||||||||
|
Corporate
|
1,293,321 | 1,406,210 | 1,266,310 | 2.1 | % | (8.0 | )% | |||||||||||||
|
Total
loans 2
|
15,657,557 | 15,232,019 | 13,727,864 | 14.1 | % | 2.8 | % | |||||||||||||
1.
Includes consumer loans, residential mortgage loans and other loans to
individuals.
2. Total
loans gross of loan loss allowances. Total loans include other non-segmented
loans and exclude interbank loans.
In 4Q10,
total loans increased 2.8% QoQ and 14.1% YoY. The recent economic data for Chile
show that economic growth has been accelerating with a strong rise in investment
and consumption levels. Unemployment figures have also been better than expected
as well as wage growth. This more supportive macro environment has boosted the
Bank’s credit activity. Higher yielding retail loans – which include loans to
individuals and small and middle-sized companies, SMEs - increased 4.3% QoQ
(14.9% YoY) in 4Q10.
|
-
|
Loans to individuals
increased 4.6% QoQ (15.4% YoY), led by a 5.7% QoQ increase (20.4% YoY) in
consumer loans, especially credit cards loans that expanded 12.3% QoQ
(35.3% YoY). This positive evolution was driven by a strong Christmas
shopping season and a greater client preference of purchasing goods with
the Bank’s cards instead of other means of
payments.
|
|
-
|
Residential mortgage
loans increased 3.4% QoQ (11.8% YoY), as long-term rates remained
attractive and demand for purchasing housing continues to
rise.
|
|
-
|
Lending to SMEs
increased 3.2% QoQ (13.2% YoY), reflecting the strength of economic growth
and the Bank’s focus on this high yielding
segment.
|
In the
middle market, which is comprised of companies with annual sales between Ch$3.5
billion and Ch$10 billion, loans increased 4.0% QoQ (18.3% YoY). This segment
was positively impacted by economic growth and reconstruction investments.
Corporate lending decreased 8.0% QoQ (+2.1% YoY). This was in part due to
translation losses caused by the 3.5% appreciation of the Chilean peso against
the dollar in the quarter and tighter margins, which reduced the attractiveness
of these loans.
|
Investor
Relations Department
|
6
|
|
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax:
562-671-6554,
|
|
|
email:
rmorenoh@santander.cl
|
FUNDING
Funding
mix improves in the quarter
|
Funding
|
Quarter ended,
|
% Change
|
||||||||||||||||||
|
(Ch$ million)
|
Dec-10
|
Sep-10
|
Dec-09
|
Dec.
10 / 09
|
Dec. 10 /
Sept. 10
|
|||||||||||||||
|
Demand
deposits
|
4,236,434 | 3,991,732 | 3,533,534 | 19.9 | % | 6.1 | % | |||||||||||||
|
Time
deposits
|
7,258,757 | 7,155,213 | 7,175,257 | 1.2 | % | 1.4 | % | |||||||||||||
|
Total
deposits
|
11,495,191 | 11,146,945 | 10,708,791 | 7.3 | % | 3.1 | % | |||||||||||||
|
Mutual
funds
|
3,188,151 | 3,305,683 | 3,427,829 | (7.0 | )% | (3.6 | )% | |||||||||||||
|
Total
funds
|
14,683,342 | 14,452,628 | 14,136,620 | 3.9 | % | 1.6 | % | |||||||||||||
|
Loans
to deposits1
|
99.8 | % | 100.9 | % | 100.9 | % | ||||||||||||||
|
Bonds
|
4,190,888 | 3,979,448 | 2,924,676 | 43.3 | % | 5.3 | % | |||||||||||||
1. (Loans
- - marketable securities that fund mortgage portfolio) / (Time deposits + demand
deposits).
Customer funds increased 1.6%
in the quarter led by a 3.1% rise in deposits. Demand deposits in the period
increased 6.1% and time
deposits were up 1.4% in the same period, led by a 2.0% QoQ rise in
retail time deposits. As of year-end 2010, 73.1% of the Bank’s deposits were
core deposits (demand deposits plus non-institutional time deposits). Going
forward, as short-term interest rates continue to rise, demand deposit growth
should decelerate and time deposit growth should accelerate.
* Demand
deposits + Non-institutional time deposits.
In 4Q10,
Standard & Poor’s placed the Bank’s foreign currency time deposits on
outlook Positive.
The Bank
has continued to access the international bond market in order to maintain
strong liquidity levels and to minimize negative impacts of rising rates on our
net interest margin by replacing short-term non-core deposits with long-term
funding. Bonds have
increased 5.3% QoQ and 43.3% YoY. In December 2010, the Bank, issued, among
other notes, US$350 million in Swiss francs, the first ever international
Chilean bond issue in Switzerland.
Mutual funds under management
decreased 7.0% QoQ. This was mainly due to negative mark-to-market effects on
fixed income funds as short-term interest rates increased and the appreciation
of the peso against the dollar, which negatively affected fixed income-dollar
funds. Equity funds continued to expand in the quarter as the outlook for stocks
for 2011 has improved.
|
Investor
Relations Department
|
7
|
|
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax:
562-671-6554,
|
|
|
email:
rmorenoh@santander.cl
|
SHAREHOLDERS’ EQUITY AND
REGULATORY CAPITAL
Adjusted
ROAE of 29.7% achieved in 4Q10. BIS ratio at 14.5%
|
Shareholders' Equity
|
Quarter ended,
|
Change %
|
||||||||||||||||||
|
(Ch$ million)
|
Dec-10
|
Sep-10
|
Dec-09
|
Dec. 10 / 09
|
Dec. 10 /
Sept. 10
|
|||||||||||||||
|
Capital
|
891,303 | 891,303 | 891,303 | 0.0 | % | 0.0 | % | |||||||||||||
|
Reserves
|
51,539 | 51,539 | 51,539 | (0.0 | )% | (0.0 | )% | |||||||||||||
|
Unrealized
gain (loss) Available-for-sale financial assets
|
(5,180 | ) | (13,928 | ) | (26,804 | ) | (80.7 | )% | (62.8 | )% | ||||||||||
|
Retained
Earnings:
|
894,136 | 828,426 | 742,278 | 20.5 | % | 7.9 | % | |||||||||||||
|
Retained
earnings previous periods
|
560,128 | 560,128 | 440,401 | 27.2 | % | 0.0 | % | |||||||||||||
|
Net
income
|
477,155 | 383,283 | 431,253 | 10.6 | % | 24.5 | % | |||||||||||||
|
Provision
for mandatory dividend
|
(143,147 | ) | (114,985 | ) | (129,376 | ) | 10.6 | % | 24.5 | % | ||||||||||
|
Minority
Interest
|
31,809 | 29,599 | 29,799 | 6.7 | % | 7.5 | % | |||||||||||||
|
Total
Equity
|
1,863,607 | 1,786,939 | 1,688,115 | 10.4 | % | 4.3 | % | |||||||||||||
|
Equity
attributable to shareholders
|
1,831,798 | 1,757,340 | 1,658,316 | 10.5 | % | 4.2 | % | |||||||||||||
|
ROAE
|
29.7 | %1 | 29.3 | % | 34.1 | % | ||||||||||||||
1.
Excluding one-time provision expense of Ch$39,800 million included in other
operating expenses. See Provision Expense and Other operating income and
expenses.
Shareholders’ equity totaled
Ch$1,831,798 million (US$3.8 billion) as of December 31, 2010. ROAE, excluding
the one-time provision charge recognized in Other operating expenses, reached
29.7% in 4Q10. For the full year 2010, ROAE reached 27.9%. This strong
profitability was achieved while maintaining one of the highest levels of
capitalization in the banking system. Voting common shareholders’ equity is the
sole component of our Tier I capital and represented 10.6% of risk-weighted
assets. The BIS ratio
reached 14.5% at year-end 2010.
|
Capital Adequacy
|
Quarter ended,
|
Change %
|
||||||||||||||||||
|
(Ch$ million)
|
Dec-10
|
Sep-10
|
Dec-09
|
Dec. 10 / 09
|
Dec. 10 /
Sept. 10
|
|||||||||||||||
|
Tier
I
|
1,831,798 | 1,757,340 | 1,658,316 | 10.5 | % | 4.2 | % | |||||||||||||
|
Tier
II
|
672,099 | 672,740 | 555,776 | 20.9 | % | (0.1 | )% | |||||||||||||
|
Regulatory
capital
|
2,503,898 | 2,430,080 | 2,214,092 | 13.1 | % | 3.0 | % | |||||||||||||
|
Risk
weighted assets
|
17,247,734 | 16,739,710 | 14,202,118 | 21.4 | % | 3.0 | % | |||||||||||||
|
Tier
I (Core capital) ratio
|
10.6 | % | 10.5 | % | 11.7 | % | ||||||||||||||
|
BIS
ratio
|
14.5 | % | 14.5 | % | 15.6 | % | ||||||||||||||
|
Investor
Relations Department
|
8
|
|
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax:
562-671-6554,
|
|
|
email:
rmorenoh@santander.cl
|
SECTION 3: ANALYSIS OF
QUARTERLY INCOME STATEMENT
NET INTEREST
INCOME
Positive
commercial trends partially offset by negative impact of rising rates on Net
interest income
|
Net Interest Income / Margin
|
Quarter
|
Change %
|
||||||||||||||||||
|
(Ch$ million)
|
4Q10
|
3Q10
|
4Q09
|
4Q10 /
4Q09
|
4Q / 3Q 10
|
|||||||||||||||
|
Net
interest income
|
231,865 | 235,674 | 225,379 | 2.9 | % | (1.6 | )% | |||||||||||||
|
Average
interest-earning assets
|
17,176,435 | 16,463,951 | 15,562,696 | 10.4 | % | 4.3 | % | |||||||||||||
|
Average
loans
|
15,470,132 | 14,874,816 | 13,647,750 | 13.4 | % | 4.0 | % | |||||||||||||
|
Net
interest margin (NIM)1
|
5.4 | % | 5.7 | % | 5.8 | % | ||||||||||||||
|
Avg.
equity + non-interest bearing demand deposits / Avg. interest
earning assets
|
34.1 | % | 34.7 | % | 31.4 | % | ||||||||||||||
|
Quarterly
inflation rate2
|
0.54 | % | 0.65 | % | 0.52 | % | ||||||||||||||
|
Avg.
overnight interbank rate (nominal)
|
2.90 | % | 1.76 | % | 0.43 | % | ||||||||||||||
|
Avg.
10 year Central Bank yield (real)
|
3.01 | % | 2.82 | % | 3.09 | % | ||||||||||||||
1.
Annualized.
2.
Inflation measured as the variation of the Unidad de Fomento in the
quarter.
Net interest income decreased
1.6% QoQ and increased 2.9% YoY. The Net interest margin in 4Q10
reached 5.4% compared to 5.7% in 3Q10 and 5.8% in 4Q09. Compared to 3Q10, the
decline in net interest income and margin was mainly due to:
|
(i)
|
Lower inflation rates -
the quarterly inflation rate was down 11 basis points compared to 3Q10 -
that negatively affected the yield earned on assets linked to
inflation;
|
|
(ii)
|
Higher short-term interest
rates - the Central Bank increased short-term interest rates 75
basis points to 3.25% in the quarter - which increased funding costs. The
Bank’s liabilities have a shorter duration than assets and, therefore,
re-price more quickly in a rising interest rate environment. In the
medium-term, rising interest usually has a positive impact on margins as
assets also begin to re-price and the spread earned over the Bank’s free
funds (demand deposits and equity) begins to rise. The Bank also continued
to increase the duration of its liabilities in order to minimize negative
impacts of rising rates on our net interest margin by replacing short-term
non-core deposits with long-term
funding.
|
The 2.9%
YoY rise in net interest income was mainly due to the 13.4% increase in average
loans and the 19.9% YoY increase in non-interest bearing demand deposits, which
improved the funding mix. This was partially offset by the increase in funding
costs, which lowered the net interest margin and a decline in client spread as
the better operational outlook improved the risk profile of our
clients. Net interest income net of provision expense increased 7.7%
YoY in 4Q10.
Going
forward, we expect rates to continue to rise. However, this negative effect on
spreads should be partially compensated by (i) increasing asset yields as they
fully incorporate the rising interest rate environment (ii) the higher yielding
loan mix and (iii) the positive impact of higher inflation forecast in
2011.
|
Investor
Relations Department
|
9
|
|
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax:
562-671-6554,
|
|
|
email:
rmorenoh@santander.cl
|
NET FEE
INCOME
Solid QoQ
growth of usage-linked fees
|
Fee Income
|
Quarter
|
Change %
|
||||||||||||||||||
|
(Ch$ million)
|
4Q10
|
3Q10
|
4Q09
|
4Q10 / 4Q09
|
4Q / 3Q 10
|
|||||||||||||||
|
Collection
fees
|
16,764 | 15,324 | 16,697 | 0.4 | % | 9.4 | % | |||||||||||||
|
Credit,
debit & ATM card fees
|
14,677 | 13,518 | 14,002 | 4.8 | % | 8.6 | % | |||||||||||||
|
Asset
management
|
10,841 | 10,063 | 8,825 | 22.8 | % | 7.7 | % | |||||||||||||
|
Checking
accounts & lines of credit
|
10,273 | 10,604 | 11,991 | (14.3 | )% | (3.1 | )% | |||||||||||||
|
Insurance
brokerage
|
10,032 | 8,683 | 4,039 | 148.4 | % | 15.5 | % | |||||||||||||
|
Guarantees,
pledges and other contingent operations
|
5,501 | 5,568 | 6,159 | (10.7 | )% | (1.2 | )% | |||||||||||||
|
Fees
from brokerage and custody of securities
|
2,698 | 2,399 | 1,741 | 55.0 | % | 12.5 | % | |||||||||||||
|
Other
Fees
|
(1,149 | ) | 277 | 1,144 | — | % | — | % | ||||||||||||
|
Total
fees
|
69,637 | 66,436 | 64,598 | 7.8 | % | 4.8 | % | |||||||||||||
Net fee income was up 4.8% QoQ
(7.8% YoY) as product usage and cross-selling indicators continued to improve in
the quarter. Fees from credit,
debit and ATM cards increased 8.6% QoQ. YoY purchases with Santander
cards as of November 2010 were up 28.7% in real terms. In the 4Q10, a strong
Christmas shopping season also helped to boost merchant discount
fees.
Greater
commercial activity in retail banking also boosted insurance related fees.
Collection fees in 4Q10 increased 9.4% QoQ, led by a 15.8% QoQ rise in
collection of insurance premiums on behalf of third parties. Fees from our
insurance brokerage subsidiary increased 15.5% QoQ. Greater demand for insurance
has driven insurance brokerage fees throughout 2010.
Fees from the brokerage and custody
of securities grew 12.3% QoQ. These fees were driven by the Bank’s new
internet platform for stock trading, which has increased retail investments in
the local stock market. This has also driven asset management fees in the
quarter. Fees from asset
management increased 7.7% QoQ. Equity funds, which generate higher
management fees, continued to expand in the quarter driving fee income. However,
mutual funds under management decreased 7.0% QoQ. This was mainly due to
negative mark-to-market effects on fixed income funds as short-term interest
rates increased and the appreciation of the peso against the dollar, which
negatively affected fixed income-dollar funds. Equity funds continued to expand
in the quarter as the outlook for stocks for 2011 has improved.
This
positive evolution of fees in the quarter was offset by a fall in non-usage
related fees such as checking
account fees that decreased 3.1% QoQ. Fees from guarantees and
pledges decreased 1.2% QoQ mainly due to the appreciation of the peso as
an important portion of these fees are tied to the Bank’s foreign trade
business.
|
Investor
Relations Department
|
10
|
|
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax:
562-671-6554,
|
|
|
email:
rmorenoh@santander.cl
|
NET RESULTS FROM FINANCIAL
TRANSACTIONS
Rising
interest rates lowers market related income
|
Results from Financial Transactions*
|
Quarter
|
Change %
|
||||||||||||||||||
|
(Ch$ million)
|
4Q10
|
3Q10
|
4Q09
|
4Q10 / 4Q09
|
4Q / 3Q 10
|
|||||||||||||||
|
Net
income from financial operations
|
(13,191 | ) | (45,068 | ) | (48,126 | ) | (72.6 | )% | (70.7 | )% | ||||||||||
|
Net
foreign exchange income
|
32,852 | 66,781 | 85,273 | (61.5 | )% | (50.8 | )% | |||||||||||||
|
Net
results from financial transactions
|
19,661 | 21,713 | 37,147 | (47.1 | )% | (9.5 | )% | |||||||||||||
|
*
|
These
results mainly include the mark-to-market of the available for sale
investment portfolio, realized and unrealized gains of financial
investments held for trading, the interest revenue generated by the held
for trading portfolio, gains or losses from the sale of charged-off loans
and the mark-to-market of derivatives. The results recorded as Exchange
differences, net mainly includes the translation gains or losses of assets
and a liability denominated in foreign
currency.
|
Net
results from financial transactions, which include the sum of the net income
from financial operations and net foreign exchange income totaled a gain of
Ch$19,661 million in 4Q10. In order to comprehend more clearly these line items,
we present them by business area in the table below.
|
Results from Financial
Transactions
|
Quarter
|
Change %
|
||||||||||||||||||
|
(Ch$ million)
|
4Q10
|
3Q10
|
4Q09
|
4Q10 / 4Q09
|
4Q / 3Q 10
|
|||||||||||||||
|
Santander
Global Connect1
|
13,585 | 11,628 | 13,263 | 2.4 | % | 16.8 | % | |||||||||||||
|
Market-making
with clients
|
1,560 | 8,451 | 3,812 | (59.1 | )% | (81.5 | )% | |||||||||||||
|
Sale
of loans and charged-off loans
|
8,375 | 1,489 | 8,614 | (2.8 | )% | 462.5 | % | |||||||||||||
|
Client
treasury services
|
23,520 | 21,568 | 25,689 | (8.4 | )% | 9.1 | % | |||||||||||||
|
Proprietary
trading
|
(1,018 | ) | (104 | ) | 2,431 | — | % | 883.8 | % | |||||||||||
|
Financial
Management (ALCO) and other results
|
(2,841 | ) | 249 | 9,027 | — | % | — | % | ||||||||||||
|
Non-client
treasury income
|
(3,859 | ) | 145 | 11,458 | — | % | — | % | ||||||||||||
|
Net
results from financial transactions
|
19,661 | 21,713 | 37,147 | (47.1 | )% | (9.5 | )% | |||||||||||||
1. Santander
Global Connect is the Bank’s commercial platform for selling treasury products
to our clients.
The
Bank’s Client treasury
services continued to generate positive results in 4Q10, totaling
Ch$23,520 million and increasing 9.1% QoQ. This was driven by a 16.8% QoQ
increase in the results of Santander Global Connect, our commercial platform for
selling treasury products to our clients, and higher results from the sale of
loans and charged-off loans in the quarter. The latter totaled Ch$8,375 million
as the Bank continues with its strategy of focusing collection efforts on early
non-performance (<90 days) and selling to third parties charged-off loans
(>90 days). This offsets the lower gains from loan loss recoveries recognized
in Provision Expense.
These
results were partially offset by lower results in Non-client treasury services.
In the quarter, interest rates continued to rise, negatively affecting our
proprietary trading and Financial Management (ALCO). The Financial Management
Division manages the structural interest rate risk, the structural position in
inflation-indexed assets and liabilities, shareholders’ equity and liquidity.
The aim of the Financial Management Division is to inject stability and
recurrence into the net interest income of commercial activities and to ensure
that we comply with internal and regulatory limits regarding liquidity,
regulatory capital, reserve requirements and market risk.
|
Investor
Relations Department
|
11
|
|
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax:
562-671-6554,
|
|
|
email:
rmorenoh@santander.cl
|
PROVISION FOR LOAN
LOSSES
Asset
quality was stable in the quarter. Coverage of NPLs reaches 106.1%
|
Provision for loan losses
|
Quarter
|
Change %
|
||||||||||||||||||
|
(Ch$ million)
|
4Q10
|
3Q10
|
4Q09
|
4Q10 / 4Q09
|
4Q / 3Q 10
|
|||||||||||||||
|
Gross
provisions
|
(13,186 | ) | (41,135 | ) | (26,412 | ) | (50.1 | )% | (67.9 | )% | ||||||||||
|
Charge-offs
|
(55,815 | ) | (49,569 | ) | (49,093 | ) | 13.7 | % | 12.6 | % | ||||||||||
|
Gross
provisions and charge-offs
|
(69,001 | ) | (90,704 | ) | (75,505 | ) | (8.6 | )% | (23.9 | )% | ||||||||||
|
Loan
loss recoveries
|
6,924 | 8,017 | 7,751 | (10.7 | )% | (13.6 | )% | |||||||||||||
|
Provision
reversal for contingent loans1
|
— | +25,716 | — | |||||||||||||||||
|
Net
provisions for loan losses
|
(62,077 | ) | (56,971 | ) | (67,754 | ) | (8.4 | )% | 9.0 | % | ||||||||||
|
Total
loans2
|
15,657,557 | 15,232,019 | 13,727,864 | 14.1 | % | 2.8 | % | |||||||||||||
|
Loan
loss reserves
|
442,238 | 428,833 | 349,485 | 26.5 | % | 3.1 | % | |||||||||||||
|
Non-performing
loans3
(NPLs)
|
416,739 | 407,831 | 409,067 | 1.9 | % | 2.2 | % | |||||||||||||
|
Risk
Index4
|
2.82 | % | 2.82 | % | 2.55 | % | ||||||||||||||
|
NPL
/ Total loans
|
2.66 | % | 2.68 | % | 2.98 | % | ||||||||||||||
|
Coverage
ratio of NPLs5
|
106.1 | % | 105.1 | % | 85.4 | % | ||||||||||||||
|
1.
|
Includes
provision reversal for contingent loans, which is included in Other
operating income in 3Q10.
|
|
2.
|
Excludes
interbank loans.
|
|
3.
|
NPL:
Non-performing loans; full balance of loans with one installment 90 days
or more overdue.
|
|
4.
|
Risk
Index: Loan loss reserves / Total loans; measures the percentage of loans
the Bank’s must provision for given its internal models and the
Superintendency of Banks
guidelines.
|
|
5.
|
Loan
loss reserves / NPLs.
|
Asset quality improved in the
quarter. The Bank’s Risk Index, defined as loan loss reserves over total loans,
remained stable at 2.82% in the quarter. The NPL ratio improved to 2.66% as of
December 31, 2010 compared to 2.68% as of September 30, 2010 and 2.98% at
year-end 2009. The coverage ratio of total NPLs (loan loss reserves over
non-performing loans) reached 106.1% as of December 31, 2010 compared to 105.1%
as of September 30, 2010 and 85.4% at year-end 2009.
By
product, coverage ratios improved across the board in 2010 as shown in the
adjacent graph. Notable was the rise in coverage of consumer NPLs by 7,990 basis
point to 278.6% by year-end 2010.
|
Coverage
ratio of NPLs (%)
|
 |
|
Investor
Relations Department
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email:
rmorenoh@santander.cl
|
12
|
Provision expense in the
quarter increased 10.3% QoQ and decreased 7.3% YoY. 3Q10 provision expenses
levels presented in the table above have been adjusted for the one-time impact
of the change in provisioning models for consumer loans introduced in September
20104.
The QoQ
increase in provision expense was mainly driven by loan growth, and the stricter
consumer loan provisioning standards implemented as of September 2010, which
requires a larger provision for consumer loans at the moment of origination,
especially in Santander Banefe. Compared to 4Q09, the 8.4% decrease in provision
expense was mainly due to improvements in asset quality as economic growth and
employment levels rebounded sharply in the year.
By loan
product, provision expense was as follows:
|
Net provisions by segment
|
Quarter
|
Change %
|
||||||||||||||||||
|
(Ch$ million)
|
4Q10
|
3Q10
|
4Q09
|
4Q10 / 4Q09
|
4Q / 3Q 10
|
|||||||||||||||
|
Commercial
loans1
|
(22,421 | ) | (19,060 | ) | (18,527 | ) | 21.0 | % | 17.6 | % | ||||||||||
|
Residential
mortgage loans
|
(980 | ) | (4,529 | ) | (4,231 | ) | (76.8 | )% | (78.4 | )% | ||||||||||
|
Consumer
loans2
|
(38,676 | ) | (33,382 | ) 2 | (44,996 | ) | (14.0 | )% | 15.9 | % | ||||||||||
|
Net
provisions for loan losses
|
(62,077 | ) | (56,971 | ) | (67,754 | ) | (8.4 | )% | 9.0 | % | ||||||||||
|
1.
|
Includes
net provision expenses for interbank
loans.
|
|
2.
|
Includes
provision reversal for contingent loans, which is included in Other
operating income in 3Q10.
|
The Bank
expects, as the Chilean economy strengthens, to see a rise in consumer and SME
lending. This expected rise in retail lending is being complemented with
continuous investments and improvements in the Bank’s credit scoring models in
order to maintain an adequate balance between loan growth and risk
levels.
New
Provisioning Guidelines for Commercial Loans Analyzed on an Individual
Basis
Beginning
in January 2011, new provisioning guidelines defined by the Superintendency of
Banks (SBIF) - the industry supervisor - for loans analyzed on an individual
basis came into effect. This encompasses mainly large commercial, leasing and
factoring loans. These regulations will have an estimated initial cost of
implementation of Ch$39,800 million. As per indications of the SBIF, this one
time effect was recognized in December 2010 as an Other operating expenses in
the income statement and as a Non-credit provision in the Bank’s Liabilities. In
January 2011, this liability will be reversed and shifted to Loan loss reserves
in the Balance Sheet. It is important to point out that such
provisions are not expected to be reflected in the Bank's financial statements
prepared in accordance with IFRS and filed with the U.S. Securities and Exchange
Commission in our 2010-20F because such provisions are not expected to relate to
incurred losses.
For more
detail on these changes, please see Section 6.
|
Investor
Relations Department
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email:
rmorenoh@santander.cl
|
13
|
OPERATING EXPENSES AND
EFFICIENCY
The
adjusted efficiency ratio reached 34.8% in the quarter
|
Operating Expenses
|
Quarter
|
Change %
|
||||||||||||||||||
|
(Ch$ million)
|
4Q10
|
3Q10
|
4Q09
|
4Q10 / 4Q09
|
4Q / 3Q 10
|
|||||||||||||||
|
Personnel
expenses
|
(65,344 | ) | (63,330 | ) | (56,638 | ) | 15.4 | % | 3.2 | % | ||||||||||
|
Administrative
expenses
|
(37,600 | ) | (37,983 | ) | (34,051 | ) | 10.4 | % | (1.0 | )% | ||||||||||
|
Depreciation
and amortization
|
(13,176 | ) | (11,294 | ) | (11,968 | ) | 10.1 | % | 16.7 | % | ||||||||||
|
Impairment
|
(260 | ) | (963 | ) | (75 | ) | 246.7 | % | (73.0 | )% | ||||||||||
|
Operating
expenses
|
(116,380 | ) | (113,570 | ) | (102,732 | ) | 13.3 | % | 2.5 | % | ||||||||||
|
Efficiency
ratio1
|
39.6 | % | 33.8 | % | 30.5 | % | ||||||||||||||
|
Adjusted
efficiency ratio
|
34.9 | %2 | 33.8 | % | 30.5 | % | ||||||||||||||
|
1.
|
Operating
expenses / Operating income. Operating income = Net interest income + Net
fee income+ Net results from Financial transactions + Other operating
income and expenses.
|
|
2.
|
Excluding
one-time provision expense of Ch$39,800 million included in Other
operating expenses. See Provision Expense and Other operating income and
expenses.
|
Operating expenses in 4Q10
increased 2.5% QoQ. The QoQ rise in personnel expenses was mainly
due to a seasonal increase in employee benefits as well as a one-time rise in
severance payments. Total headcount and compensation did not vary significantly
in the quarter. Administrative
expenses were down 1% in the quarter. The efficiency ratio, reached 39.6%
in the quarter. The adjusted
efficiency ratio, excluding the one-time charge of Ch$39,800 million
recognized in Other operating expenses, reached 34.9% in the
quarter.
The 13.3%
YoY rise in costs in 4Q10 was mainly due to a 15.4% rise in personnel expenses
that are directly related to an increase in commercial activity and as a result,
variable incentives to commercial teams have increased, especially in retail
banking. At the same time, the Bank, in anticipation of a more positive economic
environment forecast for the coming years, has been investing in technology and
distribution capabilities. This should be compensated in future
quarters with stronger revenue growth. The higher inflation also fueled
administrative cost growth as 2/3 of operating expenses are linked to inflation.
In 2011, the Bank expects to open approximately 20 branches and to continue to
invest in CRM technology, client service and new credit scoring models for
SMEs.
|
Investor
Relations Department
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email:
rmorenoh@santander.cl
|
14
|
OTHER INCOME AND
EXPENSES
|
Other Income and Expenses
|
Quarter
|
Change %
|
||||||||||||||||||
|
(Ch$ million)
|
4Q10
|
3Q10
|
4Q09
|
4Q10 / 4Q09
|
4Q / 3Q 10
|
|||||||||||||||
|
Other
operating income
|
22,824 | 34,560 | 24,598 | (7.2 | )% | (34.0 | )% | |||||||||||||
|
Other
operating expenses
|
(50,550 | ) | (22,075 | ) | (14,773 | ) | 242.2 | % | 129.0 | % | ||||||||||
|
Other
operating income, net
|
(27,726 | ) | 12,485 | 9,825 | — | % | — | % | ||||||||||||
|
Income
attributable to investments in other companies
|
(4 | ) | 832 | (566 | ) | (99.3 | )% | — | % | |||||||||||
|
Income
tax
|
(18,927 | ) | (14,109 | ) | (28,348 | ) | (33.2 | )% | 34.1 | % | ||||||||||
|
Income
tax rate
|
16.5 | % | 10.0 | % | 17.1 | % | ||||||||||||||
Other operating income, net,
totaled Ch$-27,726 million in 4Q10. As previously mentioned in the Provision
Expense section, the Bank, following the indications of the SBIF, recognized a
one-time charge of Ch$39,800 million in the quarter because of the new
provisioning guidelines for commercial loans analyzed on an individual basis.
(See Section 6 of this release for more details).
Excluding
this one time expense, Other operating income, net totaled Ch$12,074 million in
4Q10 compared to Ch$12,485 million in 3Q10 and Ch$9,825 million in 4Q09. 4Q10
Other operating income, net includes Ch$17,986 million from the sale of
branches. Other operating income in 3Q10 included a reversal of Ch$25,716
million, derived from the adjustments made to the minimum provision levels that
are set aside for the unused portion of credit card lines for clients that use
their credit card for transactional and not credit purposes. Finally, in 4Q09
Other operating income, net included a one-time gain of Ch$7,072 million from
the sale of a building in December 2009.
Income tax increased 34.1%
QoQ. The one-time charge of Ch$39,800 million recognized in other operating
expenses is not tax deductible and this increased the Bank’s effective tax rate in the
quarter. The lower tax paid in 4Q10 compared to 4Q09 was mainly due to a lower
net income before taxes.
The
statutory corporate tax rate in Chile in 2010 was 17%. In 2011, it will rise to
20%; in 2012, it will be 18.5% and 17% in 2013.
|
Investor
Relations Department
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email:
rmorenoh@santander.cl
|
15
|
SECTION 4: CREDIT RISK
RATINGS
International
ratings
The Bank
has credit ratings from three leading international agencies. All of our ratings
are assigned a stable outlook. Standard & Poor’s changed its outlook on
Santander Chile’s ratings to Positive in December 2010.
|
Moody’s
|
Rating
|
|
|
Foreign
currency bank deposits
|
Aa3
|
|
|
Senior
bonds
|
Aa3
|
|
|
Subordinated
debt
|
A1
|
|
|
Bank
Deposits in Local Currency
|
Aa3
|
|
|
Bank
financial strength
|
B-
|
|
|
Short-term
deposits
|
|
P-1
|
|
Standard and Poor’s
|
Rating
|
|
|
Long-term
Foreign Issuer Credit
|
A+
|
|
|
Long-term
Local Issuer Credit
|
A+
|
|
|
Short-term
Foreign Issuer Credit
|
A-1
|
|
|
Short-term
Local Issuer Credit
|
|
A-1
|
|
Fitch
|
Rating
|
|
|
Foreign
Currency Long-term Debt
|
AA-
|
|
|
Local
Currency Long-term Debt
|
AA-
|
|
|
Foreign
Currency Short-term Debt
|
F1+
|
|
|
Local
Currency Short-term Debt
|
F1+
|
|
|
Individual
rating
|
|
B
|
Local
ratings:
Our local
ratings, the highest in Chile, are the following:
|
Local ratings
|
Fitch
Ratings
|
Feller
Rate
|
||
|
Shares
|
Level
2
|
1CN1
|
||
|
Short-term
deposits
|
N1+
|
Level
1+
|
||
|
Long-term
deposits
|
AAA
|
AAA
|
||
|
Mortgage
finance bonds
|
AAA
|
AAA
|
||
|
Senior
bonds
|
AAA
|
AAA
|
||
|
Subordinated
bonds
|
AA
|
AA+
|
||
|
Outlook
|
|
Stable
|
|
Stable
|
|
Investor
Relations Department
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email:
rmorenoh@santander.cl
|
16
|
SECTION 5: SHARE
PERFORMANCE
As
of December 2010
Ownership
Structure:
ADR price (US$)
2010
|
12/31/10:
|
93.47 | |||
|
Maximum
(2010):
|
99.44 | |||
|
Minimum
(2010):
|
59.40 |
Market
Capitalization: US$16,953 million
|
P/E
12 month trailing*:
|
15.5 | |||
|
P/BV
(12/31/10)**:
|
4.35 | |||
|
Dividend
yield***:
|
3.9 | % |
|
*
|
Price
as of Dec. 31 / 12mth
Earnings
|
|
**
|
Price
as of Dec. 31 / Book value as of
12/31/10
|
|
***
|
Based
on closing price on record date of last dividend
payment.
|
Average daily traded volumes
4Q10
US$
million
Local share price (Ch$)
2010
|
12/31/10:
|
42.30 | |||
|
Maximum
(2010):
|
47.37 | |||
|
Minimum
(2010):
|
31.03 |
Dividends:
|
Year paid
|
Ch$/share
|
% of previous year
earnings
|
||||||
|
2006:
|
0.83 | 65 | % | |||||
|
2007:
|
0.99 | 65 | % | |||||
|
2008:
|
1.06 | 65 | % | |||||
|
2009:
|
1.13 | 65 | % | |||||
|
2010:
|
1.37 | 60 | % | |||||
|
Investor
Relations Department
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email:
rmorenoh@santander.cl
|
17
|
SECTION 6: New Provisioning
guidelines for loans analyzed on an individual basis
Source:
Superintendency of Banks and Financial Institutions, Accounting Principles
Compendium, Chapter B1
Loans
analyzed on an individual basis
Beginning
in January 2011, new provisioning guidelines designed by the SBIF for loans
analyzed on an individual basis will come into effect. This encompasses mainly
large commercial, leasing and factoring loans. The Bank considers the following
risk factors: industry or sector of the borrower, owners or managers of the
borrower, borrower’s financial situation, its payment capacity and payment
behavior. Based on those risk factors the Bank will assign one of the following
risk categories to each loan or borrower:
|
|
i.
|
“Normal
Loans” or loans classified in categories A1 through A6 correspond to
borrowers who are current on their payment obligations and show no sign of
deterioration in their credit
quality
|
|
|
ii.
|
“Substandard
Loans” or loans classified in categories B1 through B4 correspond to
borrowers with some credit financial difficulties or an important
deterioration of payment capacity. Substandard loans also include all
loans that have been nonperforming for more than 30
days.
|
|
|
iii.
|
“Non-complying
Loans” including nonperforming loans and other loans classified in
categories C1 through C6 correspond to borrowers whose payment capacity is
seriously at risk and who have a high likelihood of filing for bankruptcy
or are renegotiating credit terms to avoid bankruptcy. These loans also
include all loans, including contingent operations, with at least one
installment overdue more than 90
days.
|
Allowances
for Normal and Substandard Loans
For
Normal and Substandard Loans, expected loss has been set in accordance with SBIF
standards, as set forth in the following table:
|
Classification
|
Probability of default
(PD) (%)
|
Loss given default (LGD)
(%)
|
Expected loss (EL) (%)
|
|||
|
Normal
loans
|
||||||
|
A1
|
0.04
|
90.0
|
0.036
|
|||
|
A2
|
0.1
|
82.5
|
0.0825
|
|||
|
A3
|
0.25
|
87.5
|
0.21875
|
|||
|
A4
|
2
|
87.5
|
1.75
|
|||
|
A5
|
4.75
|
90.0
|
4.275
|
|||
|
A6
|
10
|
90.0
|
9.0
|
|||
|
Substandard
loans
|
||||||
|
B1
|
15
|
92.5
|
13.875
|
|||
|
B2
|
22
|
92.5
|
20.35
|
|||
|
B3
|
33
|
97.5
|
32.175
|
|||
|
B4
|
|
45
|
|
97.5
|
|
43.875
|
|
Investor
Relations Department
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email:
rmorenoh@santander.cl
|
18
|
Banks
individually assign a specific classification and therefore provision level to
each borrower. Accordingly, the amount of loan loss allowance is determined on a
case-by-case basis. In
determining provisions on an individual basis for Normal and Substandard Loans,
banks must use the following equation established by the SBIF:
Provision = (ESA-GE)
* (PDdebtor/100)
* (LGDdebtor/100)
+ GE * (PDguarantor/100)
* (LGDguarantor/100)
|
ESA
|
=
|
Exposure
subject to allowances
|
|
PD
|
=
|
Probability
of default
|
|
GE
|
=
|
Guaranteed
exposure
|
|
LGD
|
=
|
Loss
Given Default
|
However,
independent of the results obtained from the equation above, as of July 2010
Normal Loans (including contingent loans) must be assigned a minimum provision
level of 0.5%.
Allowances
for Non-complying Loans
For loans
classified in Categories C1 through C6, the Bank must have the following levels
of allowance, which are required by the SBIF:
|
Classification
|
Expected loss
|
Allowance % (1)
|
||
|
C1
|
Up
to 3%
|
2
|
||
|
C2
|
More
than 3% up to 20%
|
10
|
||
|
C3
|
More
than 20% up to 30%
|
25
|
||
|
C4
|
More
than 30% up to 50%
|
40
|
||
|
C5
|
More
than 50% up to 80%
|
65
|
||
|
C6
|
|
More
than 80%
|
90
|
|
(1)
|
Represents
percentages of the aggregate amount of principal and accrued but unpaid
interest of the loan.
|
For these
loans, the expected loss must be calculated in the following
manner:
Expected
loss = (TE
– Rec) / TE
Allowance
(Ch$) = TE
* Allowance %
|
TE
|
=
|
Total
exposure
|
|
REC
|
=
|
Recoverable
amount based on estimates of collateral value and collection
efforts
|
These
regulations will have an estimated initial cost of implementation of Ch$39,800
million. As per instructions of the SBIF, this one time effect was recognized as
an Other operating expenses in the income statement and as a Non-credit
provision in the Bank’s Liabilities. In January 2011, this Liability will be
shifted to Loan loss reserves in the Balance Sheet. It is important
to point out that such provisions are not expected to be reflected in the Bank's
2010 20-F financial statements prepared in accordance with IFRS and filed with
the U.S. Securities and Exchange Commission because such provisions are not
expected to relate to incurred losses.
|
Investor
Relations Department
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email:
rmorenoh@santander.cl
|
19
|
ANNEX 1: BALANCE
SHEET
|
Unaudited Balance Sheet
|
Dec-10
|
Dec-10
|
Sep-10
|
Dec-10
|
Dec. 10 / 09
|
Dec. 10 / Sept.
10
|
||||||||||||||||||
|
US$ths
|
Ch$mn
|
% Chg.
|
||||||||||||||||||||||
|
Assets
|
||||||||||||||||||||||||
|
Cash
and balances from Central Bank
|
3,765,785 | 1,762,199 | 1,522,587 | 2,043,458 | (13.8 | )% | 15.7 | % | ||||||||||||||||
|
Funds
to be cleared
|
800,017 | 374,368 | 485,262 | 468,134 | (20.0 | )% | (22.9 | )% | ||||||||||||||||
|
Financial
assets held for trading
|
811,350 | 379,671 | 397,342 | 798,539 | (52.5 | )% | (4.4 | )% | ||||||||||||||||
|
Investment
collateral under agreements to repurchase
|
365,392 | 170,985 | 64,995 | 14,020 | 1119.6 | % | 163.1 | % | ||||||||||||||||
|
Derivatives
|
3,471,264 | 1,624,378 | 1,656,370 | 1,393,878 | 16.5 | % | (1.9 | )% | ||||||||||||||||
|
Interbank
loans
|
148,888 | 69,672 | 72,184 | 23,370 | 198.1 | % | (3.5 | )% | ||||||||||||||||
|
Loans,
net of reserves for loan losses
|
32,514,837 | 15,215,318 | 14,803,186 | 13,378,379 | 13.7 | % | 2.8 | % | ||||||||||||||||
|
Available-for-sale
financial assets
|
3,149,866 | 1,473,980 | 1,601,025 | 1,830,090 | (19.5 | )% | (7.9 | )% | ||||||||||||||||
|
Held-to-maturity
investments
|
- | - | - | - | ||||||||||||||||||||
|
Investments
in other companies
|
15,547 | 7,275 | 7,301 | 7,417 | (1.9 | )% | (0.4 | )% | ||||||||||||||||
|
Intangible
assets
|
166,663 | 77,990 | 69,975 | 77,260 | 0.9 | % | 11.5 | % | ||||||||||||||||
|
Fixed
assets
|
331,200 | 154,985 | 160,435 | 184,122 | (15.8 | )% | (3.4 | )% | ||||||||||||||||
|
Current
tax assets
|
26,710 | 12,499 | 5,948 | 4,541 | 175.2 | % | 110.1 | % | ||||||||||||||||
|
Deferred
tax assets
|
252,087 | 117,964 | 137,958 | 95,229 | 23.9 | % | (14.5 | )% | ||||||||||||||||
|
Other
assets
|
1,369,661 | 640,933 | 653,285 | 452,559 | 41.6 | % | (1.9 | )% | ||||||||||||||||
|
Total
Assets
|
47,189,266 | 22,082,217 | 21,637,853 | 20,770,996 | 6.3 | % | 2.1 | % | ||||||||||||||||
|
Liabilities
and Equity
|
||||||||||||||||||||||||
|
Demand
deposits
|
9,053,177 | 4,236,434 | 3,991,732 | 3,533,534 | 19.9 | % | 6.1 | % | ||||||||||||||||
|
Funds
to be cleared
|
641,361 | 300,125 | 426,453 | 275,474 | 8.9 | % | (29.6 | )% | ||||||||||||||||
|
Investments
sold under agreements to repurchase
|
629,822 | 294,725 | 149,960 | 1,114,605 | (73.6 | )% | 96.5 | % | ||||||||||||||||
|
Time
deposits and savings accounts
|
15,511,822 | 7,258,757 | 7,155,213 | 7,175,257 | 1.2 | % | 1.4 | % | ||||||||||||||||
|
Derivatives
|
3,513,149 | 1,643,978 | 1,652,195 | 1,348,906 | 21.9 | % | (0.5 | )% | ||||||||||||||||
|
Deposits
from credit institutions
|
3,385,099 | 1,584,057 | 1,728,001 | 2,046,790 | (22.6 | )% | (8.3 | )% | ||||||||||||||||
|
Marketable
debt securities
|
8,955,846 | 4,190,888 | 3,979,448 | 2,924,676 | 43.3 | % | 5.3 | % | ||||||||||||||||
|
Other
obligations
|
355,356 | 166,289 | 164,204 | 146,911 | 13.2 | % | 1.3 | % | ||||||||||||||||
|
Current
tax liabilities
|
2,763 | 1,293 | 28,487 | 63,831 | (98.0 | )% | (95.5 | )% | ||||||||||||||||
|
Deferred
tax liability
|
11,627 | 5,441 | 3,892 | 3,380 | 61.0 | % | 39.8 | % | ||||||||||||||||
|
Provisions
|
588,302 | 275,296 | 205,255 | 186,121 | 47.9 | % | 34.1 | % | ||||||||||||||||
|
Other
liabilities
|
558,451 | 261,327 | 366,074 | 263,396 | (0.8 | )% | (28.6 | )% | ||||||||||||||||
|
Total
Liabilities
|
43,206,774 | 20,218,610 | 19,850,914 | 19,082,881 | 6.0 | % | 1.9 | % | ||||||||||||||||
|
Equity
|
||||||||||||||||||||||||
|
Capital
|
1,904,697 | 891,303 | 891,303 | 891,303 | 0.0 | % | 0.0 | % | ||||||||||||||||
|
Reserves
|
110,138 | 51,539 | 51,539 | 51,539 | 0.0 | % | 0.0 | % | ||||||||||||||||
|
Unrealized
gain (loss) Available-for-sale financial assets
|
(11,070 | ) | (5,180 | ) | (13,928 | ) | (26,804 | ) | (80.7 | )% | (62.8 | )% | ||||||||||||
|
Retained
Earnings:
|
1,910,751 | 894,136 | 828,426 | 742,278 | 20.5 | % | 7.9 | % | ||||||||||||||||
|
Retained
earnings previous periods
|
1,196,983 | 560,128 | 560,128 | 440,401 | 27.2 | % | 0.0 | % | ||||||||||||||||
|
Net
income
|
1,019,671 | 477,155 | 383,283 | 431,253 | 10.6 | % | 24.5 | % | ||||||||||||||||
|
Provision
for mandatory dividend
|
(305,902 | ) | (143,147 | ) | (114,985 | ) | (129,376 | ) | 10.6 | % | 24.5 | % | ||||||||||||
|
Total
Shareholders' Equity
|
3,914,517 | 1,831,798 | 1,757,340 | 1,658,316 | 10.5 | % | 4.2 | % | ||||||||||||||||
|
Minority
Interest
|
67,975 | 31,809 | 29,599 | 29,799 | 6.7 | % | 7.5 | % | ||||||||||||||||
|
Total
Equity
|
3,982,492 | 1,863,607 | 1,786,939 | 1,688,115 | 10.4 | % | 4.3 | % | ||||||||||||||||
|
Total
Liabilities and Equity
|
47,189,266 | 22,082,217 | 21,637,853 | 20,770,996 | 6.3 | % | 2.1 | % | ||||||||||||||||
Figures
in US$ have been translated at the exchange rate of Ch$467.95
|
Investor
Relations Department
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email:
rmorenoh@santander.cl
|
20
|
ANNEX 2: YTD INCOME
STATEMENT
|
YTD Income Statement Unaudited
|
Dec-10
|
Dec-10
|
Dec-09
|
Dec. 10 / 09
|
||||||||||||
|
US$ths.
|
Ch$ million
|
% Chg.
|
||||||||||||||
|
Interest
revenue
|
3,019,517 | 1,412,983 | 1,207,778 | 17.0 | % | |||||||||||
|
Interest
expense
|
(1,011,356 | ) | (473,264 | ) | (351,262 | ) | 34.7 | % | ||||||||
|
Net
interest income
|
2,008,161 | 939,719 | 856,516 | 9.7 | % | |||||||||||
|
Fee
income
|
722,690 | 338,183 | 315,925 | 7.0 | % | |||||||||||
|
Fee
expense
|
(159,421 | ) | (74,601 | ) | (61,795 | ) | 20.7 | % | ||||||||
|
Net
fee income
|
563,270 | 263,582 | 254,130 | 3.7 | % | |||||||||||
|
Net
income from financial operations
|
82,819 | 38,755 | 3,887 | 897.0 | % | |||||||||||
|
Net
foreign exchange income
|
122,306 | 57,233 | 163,241 | (64.9 | )% | |||||||||||
|
Total
financial transactions, net
|
205,124 | 95,988 | 167,128 | (42.6 | )% | |||||||||||
|
Other
operating income
|
178,224 | 83,400 | 33,243 | 150.9 | % | |||||||||||
|
Operating
profit before loan losses
|
2,954,779 | 1,382,689 | 1,311,017 | 5.5 | % | |||||||||||
|
Provision
expense
|
(578,914 | ) | (270,903 | ) | (333,847 | ) | (18.9 | )% | ||||||||
|
Total
operating income net of interest, fee and provision
expenses
|
2,375,865 | 1,111,786 | 977,170 | 13.8 | % | |||||||||||
|
Personnel
expenses
|
(534,811 | ) | (250,265 | ) | (224,484 | ) | 11.5 | % | ||||||||
|
Administrative
expenses
|
(314,869 | ) | (147,343 | ) | (136,712 | ) | 7.8 | % | ||||||||
|
Depreciation
and amortization
|
(105,573 | ) | (49,403 | ) | (46,623 | ) | 6.0 | % | ||||||||
|
Impairment
|
(10,525 | ) | (4,925 | ) | (75 | ) | — | % | ||||||||
|
Operating
expenses
|
(965,778 | ) | (451,936 | ) | (407,894 | ) | 10.8 | % | ||||||||
|
Other
operating expenses
|
(219,744 | ) | (102,829 | ) | (44,405 | ) | 131.6 | % | ||||||||
|
Total
operating expenses
|
(1,185,522 | ) | (554,765 | ) | (452,299 | ) | 22.7 | % | ||||||||
|
Net
operating income
|
1,190,343 | 557,021 | 524,871 | 6.1 | % | |||||||||||
|
Income
attributable to investments in other companies
|
2,502 | 1,171 | 297 | 294.3 | % | |||||||||||
|
Net
income before taxes
|
1,192,845 | 558,192 | 525,168 | 6.3 | % | |||||||||||
|
Income
tax
|
(168,734 | ) | (78,959 | ) | (88,862 | ) | (11.1 | )% | ||||||||
|
Net
income from ordinary activities
|
1,024,112 | 479,233 | 436,306 | 9.8 | % | |||||||||||
|
Net
income discontinued operations
|
0 | 0 | 0 | — | % | |||||||||||
|
Net
income attributable to:
|
||||||||||||||||
|
Minority
interest
|
4,441 | 2,078 | 5,053 | — | % | |||||||||||
|
Net
income attributable to shareholders
|
1,019,671 | 477,155 | 431,253 | 10.6 | % | |||||||||||
Figures
in US$ have been translated at the exchange rate of Ch$467.95
|
Investor
Relations Department
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email:
rmorenoh@santander.cl
|
21
|
ANNEX 3 : QUARTERLY INCOME
STATEMENTS
|
Unaudited Quarterly Income Statement
|
4Q10
|
4Q10
|
3Q10
|
4Q09
|
4Q10 / 4Q09
|
4Q / 3Q 10
|
||||||||||||||||||
|
US$ths.
|
Ch$mn
|
% Chg.
|
||||||||||||||||||||||
|
Interest
revenue
|
785,086 | 367,381 | 355,445 | 342,363 | 7.3 | % | 3.4 | % | ||||||||||||||||
|
Interest
expense
|
(289,595 | ) | (135,516 | ) | (119,771 | ) | (116,984 | ) | 15.8 | % | 13.1 | % | ||||||||||||
|
Net
interest income
|
495,491 | 231,865 | 235,674 | 225,379 | 2.9 | % | (1.6 | )% | ||||||||||||||||
|
Fee
income
|
194,117 | 90,837 | 85,379 | 80,501 | 12.8 | % | 6.4 | % | ||||||||||||||||
|
Fee
expense
|
(45,304 | ) | (21,200 | ) | (18,943 | ) | (15,903 | ) | 33.3 | % | 11.9 | % | ||||||||||||
|
Net
fee income
|
148,813 | 69,637 | 66,436 | 64,598 | 7.8 | % | 4.8 | % | ||||||||||||||||
|
Net
income from financial operations
|
(28,189 | ) | (13,191 | ) | (45,068 | ) | (48,126 | ) | (72.6 | )% | (70.7 | )% | ||||||||||||
|
Net
foreign exchange income
|
70,204 | 32,852 | 66,781 | 85,273 | (61.5 | )% | (50.8 | )% | ||||||||||||||||
|
Total
financial transactions, net
|
42,015 | 19,661 | 21,713 | 37,147 | (47.1 | )% | (9.5 | )% | ||||||||||||||||
|
Other
operating income
|
48,774 | 22,824 | 34,560 | 24,598 | (7.2 | )% | (34.0 | )% | ||||||||||||||||
|
Operating
profit before loan losses
|
735,093 | 343,987 | 358,383 | 351,722 | (2.2 | )% | (4.0 | )% | ||||||||||||||||
|
Provision
expense
|
(132,657 | ) | (62,077 | ) | (82,687 | ) | (67,754 | ) | (8.4 | )% | (24.9 | )% | ||||||||||||
|
Total
operating income net of interest, fee and provision
expenses
|
602,436 | 281,910 | 275,696 | 283,968 | (0.7 | )% | 2.3 | % | ||||||||||||||||
|
Personnel
expenses
|
(139,639 | ) | (65,344 | ) | (63,330 | ) | (56,638 | ) | 15.4 | % | 3.2 | % | ||||||||||||
|
Administrative
expenses
|
330,140 | (37,600 | ) | (37,983 | ) | (34,051 | ) | 10.4 | % | (1.0 | )% | |||||||||||||
|
Depreciation
and amortization
|
(28,157 | ) | (13,176 | ) | (11,294 | ) | (11,968 | ) | 10.1 | % | 16.7 | % | ||||||||||||
|
Impairment
|
(556 | ) | (260 | ) | (963 | ) | (75 | ) | 246.7 | % | (73.0 | )% | ||||||||||||
|
Operating
expenses
|
(248,702 | ) | (116,380 | ) | (113,570 | ) | (102,732 | ) | 13.3 | % | 2.5 | % | ||||||||||||
|
Other
operating expenses
|
(108,024 | ) | (50,550 | ) | (22,075 | ) | (14,773 | ) | 242.2 | % | 129.0 | % | ||||||||||||
|
Total
operating expenses
|
(356,726 | ) | (166,930 | ) | (135,645 | ) | (117,505 | ) | 42.1 | % | 23.1 | % | ||||||||||||
|
Net
operating income
|
245,710 | 114,980 | 140,051 | 166,463 | (30.9 | )% | (17.9 | )% | ||||||||||||||||
|
Income
attributable to investments in other companies
|
(9 | ) | (4 | ) | 832 | (566 | ) | (99.3 | )% | — | % | |||||||||||||
|
Net
income before taxes
|
245,701 | 114,976 | 140,883 | 165,897 | (30.7 | )% | (18.4 | )% | ||||||||||||||||
|
Income
tax
|
(40,447 | ) | (18,927 | ) | (14,109 | ) | (28,348 | ) | (33.2 | )% | 34.1 | % | ||||||||||||
|
Net
income from ordinary activities
|
205,255 | 96,049 | 126,774 | 137,549 | (30.2 | )% | (24.2 | )% | ||||||||||||||||
|
Net
income discontinued operations
|
0 | 0 | 0 | 0 | ||||||||||||||||||||
|
Net
income attributable to:
|
||||||||||||||||||||||||
|
Minority
interest
|
4,652 | 2,177 | 1,418 | 240 | 807.1 | % | — | % | ||||||||||||||||
|
Net
income attributable to shareholders
|
200,603 | 93,872 | 125,356 | 137,309 | (31.6 | )% | (25.1 | )% | ||||||||||||||||
Figures
in US$ have been translated at the exchange rate of Ch$467.95
|
Investor
Relations Department
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email:
rmorenoh@santander.cl
|
22
|
ANNEX 4: QUARTERLY EVOLUTION
OF MAIN RATIOS AND OTHER INFORMATION
|
Mar-09
|
Jun-09
|
Sep-09
|
Dec-09
|
Mar-10
|
Jun-10
|
Sep-10
|
Dec-10
|
|||||||||||||||||||||||||
|
(Ch$
millions)
|
||||||||||||||||||||||||||||||||
|
Loans
|
||||||||||||||||||||||||||||||||
|
Consumer
loans
|
2,187,832 | 2,121,045 | 2,155,200 | 2,244,035 | 2,303,983 | 2,404,128 | 2,554,884 | 2,700,791 | ||||||||||||||||||||||||
|
Residential
mortgage loans
|
3,927,343 | 3,970,896 | 4,033,091 | 4,159,052 | 4,219,733 | 4,360,496 | 4,498,799 | 4,651,136 | ||||||||||||||||||||||||
|
Commercial
loans
|
7,870,502 | 7,309,545 | 7,395,336 | 7,324,777 | 7,519,854 | 7,817,843 | 8,178,336 | 8,305,630 | ||||||||||||||||||||||||
|
Total
loans
|
13,985,677 | 13,401,486 | 13,583,627 | 13,727,864 | 14,043,570 | 14,582,467 | 15,232,019 | 15,657,557 | ||||||||||||||||||||||||
|
Allowance
for loan losses
|
(281,265 | ) | (314,191 | ) | (338,020 | ) | (349,485 | ) | (374,064 | ) | (387,624 | ) | (428,833 | ) | (442,238 | ) | ||||||||||||||||
|
Total
loans, net of allowances
|
13,704,412 | 13,087,295 | 13,245,607 | 13,378,379 | 13,669,506 | 14,194,843 | 14,803,186 | 15,215,319 | ||||||||||||||||||||||||
|
Loans
by segment
|
||||||||||||||||||||||||||||||||
|
Individuals
|
6,782,663 | 6,815,737 | 6,980,092 | 7,287,296 | 7,411,686 | 7,715,031 | 8,035,617 | 8,407,416 | ||||||||||||||||||||||||
|
SMEs
|
2,007,115 | 2,002,641 | 2,055,911 | 2,097,592 | 2,143,885 | 2,210,170 | 2,301,536 | 2,375,192 | ||||||||||||||||||||||||
|
Total
retail lending
|
8,789,778 | 8,818,378 | 9,036,003 | 9,384,888 | 9,555,571 | 9,925,201 | 10,337,153 | 10,782,608 | ||||||||||||||||||||||||
|
Institutional
lending
|
262,664 | 262,947 | 285,129 | 291,867 | 313,079 | 330,980 | 340,274 | 331,153 | ||||||||||||||||||||||||
|
Middle-Market
& Real estate
|
3,048,591 | 2,844,124 | 2,838,365 | 2,779,165 | 2,907,944 | 2,983,741 | 3,160,681 | 3,288,107 | ||||||||||||||||||||||||
|
Corporate
|
1,903,951 | 1,505,737 | 1,449,001 | 1,266,310 | 1,279,965 | 1,347,855 | 1,406,210 | 1,293,321 | ||||||||||||||||||||||||
|
Customer
funds
|
||||||||||||||||||||||||||||||||
|
Demand
deposits
|
3,092,010 | 3,083,814 | 3,152,739 | 3,533,534 | 3,890,230 | 4,168,884 | 3,991,732 | 4,236,434 | ||||||||||||||||||||||||
|
Time
deposits
|
8,677,857 | 8,342,396 | 7,456,731 | 7,175,257 | 6,818,939 | 7,193,376 | 7,155,213 | 7,258,757 | ||||||||||||||||||||||||
|
Total
deposits
|
11,769,867 | 11,426,210 | 10,609,470 | 10,708,791 | 10,709,169 | 11,362,260 | 11,146,945 | 11,495,191 | ||||||||||||||||||||||||
|
Mutual
funds (Off balance sheet)
|
3,085,227 | 3,342,860 | 3,476,457 | 3,427,829 | 3,635,544 | 3,510,479 | 3,305,683 | 3,188,151 | ||||||||||||||||||||||||
|
Total
customer funds
|
14,855,094 | 14,769,070 | 14,085,927 | 14,136,620 | 14,344,713 | 14,872,739 | 14,452,628 | 14,683,342 | ||||||||||||||||||||||||
|
Loans / Deposits1
|
96.5 | % | 94.3 | % | 102.4 | % | 100.9 | % | 104.3 | % | 99.8 | % | 100.9 | % | 99.8 | % | ||||||||||||||||
|
Average
balances
|
||||||||||||||||||||||||||||||||
|
Avg.
interest earning assets
|
15,742,285 | 15,147,554 | 15,184,842 | 15,562,696 | 15,776,237 | 15,816,902 | 16,463,951 | 17,176,435 | ||||||||||||||||||||||||
|
Avg.
loans
|
14,312,882 | 13,733,919 | 13,479,883 | 13,647,750 | 13,879,173 | 14,291,144 | 14,874,816 | 15,470,132 | ||||||||||||||||||||||||
|
Avg.
assets
|
20,491,544 | 19,719,613 | 19,384,473 | 20,123,590 | 20,738,402 | 20,742,244 | 20,915,047 | 21,851,516 | ||||||||||||||||||||||||
|
Avg.
demand deposits
|
2,952,461 | 3,087,754 | 3,079,230 | 3,278,373 | 3,678,104 | 4,107,978 | 4,005,565 | 4,056,105 | ||||||||||||||||||||||||
|
Avg
equity
|
1,517,710 | 1,495,755 | 1,528,506 | 1,608,510 | 1,665,977 | 1,644,453 | 1,712,967 | 1,801,866 | ||||||||||||||||||||||||
|
Avg.
free funds
|
4,470,170 | 4,583,509 | 4,607,736 | 4,886,883 | 5,344,081 | 5,752,431 | 5,718,532 | 5,857,971 | ||||||||||||||||||||||||
|
Capitalization
|
||||||||||||||||||||||||||||||||
|
Risk
weighted assets
|
13,979,591 | 13,544,319 | 13,918,058 | 14,202,118 | 15,513,732 | 16,210,259 | 16,739,710 | 17,247,734 | ||||||||||||||||||||||||
|
Tier
I (Shareholders' equity)
|
1,543,039 | 1,497,019 | 1,555,148 | 1,658,316 | 1,683,103 | 1,665,326 | 1,757,340 | 1,831,799 | ||||||||||||||||||||||||
|
Tier
II
|
560,232 | 535,978 | 563,856 | 555,776 | 599,353 | 627,608 | 672,740 | 672,099 | ||||||||||||||||||||||||
|
Regulatory
capital
|
2,103,271 | 2,032,997 | 2,119,004 | 2,214,092 | 2,282,455 | 2,292,934 | 2,430,080 | 2,503,898 | ||||||||||||||||||||||||
|
Tier
I ratio
|
11.0 | % | 11.1 | % | 11.2 | % | 11.7 | % | 10.8 | % | 10.3 | % | 10.5 | % | 10.6 | % | ||||||||||||||||
|
BIS
ratio
|
15.0 | % | 15.0 | % | 15.2 | % | 15.6 | % | 14.7 | % | 14.1 | % | 14.5 | % | 14.5 | % | ||||||||||||||||
|
Profitability
& Efficiency
|
||||||||||||||||||||||||||||||||
|
Net
interest margin
|
4.8 | % | 6.0 | % | 5.7 | % | 5.8 | % | 5.8 | % | 6.1 | % | 5.7 | % | 5.4 | % | ||||||||||||||||
|
Efficiency
ratio
|
34.5 | % | 31.5 | % | 32.6 | % | 30.5 | % | 33.0 | % | 35.2 | % | 33.8 | % | 39.7 | % | ||||||||||||||||
|
Avg.
Free funds / interest earning assets
|
28.4 | % | 30.3 | % | 30.3 | % | 31.4 | % | 33.9 | % | 36.4 | % | 34.7 | % | 34.1 | % | ||||||||||||||||
|
Return
on avg. equity
|
20.2 | % | 28.7 | % | 28.8 | % | 34.1 | % | 28.6 | % | 33.8 | % | 29.3 | % | 20.8 | % | ||||||||||||||||
|
Return
on avg. assets
|
1.5 | % | 2.2 | % | 2.3 | % | 2.7 | % | 2.3 | % | 2.7 | % | 2.4 | % | 1.7 | % | ||||||||||||||||
|
Investor
Relations Department
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email:
rmorenoh@santander.cl
|
23
|
|
Mar-09
|
Jun-09
|
Sep-09
|
Dec-09
|
Mar-10
|
Jun-10
|
Sep-10
|
Dec-10
|
|||||||||||||||||||||||||
|
Asset
quality
|
||||||||||||||||||||||||||||||||
|
Non-performing
loans (NPLs)2
|
392,802 | 415,311 | 383,172 | 409,067 | 385,211 | 415,556 | 407,831 | 416,739 | ||||||||||||||||||||||||
|
Past
due loans3
|
169,220 | 181,645 | 175,426 | 193,250 | 197,060 | 200,524 | 207,530 | 206,601 | ||||||||||||||||||||||||
|
Expected
loss4
|
281,265 | 314,191 | 338,020 | 349,485 | 374,064 | 387,624 | 428,833 | 442,238 | ||||||||||||||||||||||||
|
NPLs
/ total loans
|
2.81 | % | 3.10 | % | 2.82 | % | 2.98 | % | 2.74 | % | 2.85 | % | 2.68 | % | 2.66 | % | ||||||||||||||||
|
PDL
/ total loans
|
1.21 | % | 1.36 | % | 1.29 | % | 1.41 | % | 1.40 | % | 1.38 | % | 1.36 | % | 1.32 | % | ||||||||||||||||
|
Coverage
of NPLs (Loan loss allowance / NPLs)
|
71.60 | % | 75.65 | % | 88.22 | % | 85.43 | % | 97.11 | % | 93.28 | % | 105.15 | % | 106.12 | % | ||||||||||||||||
|
Coverage
of PDLs (Loan loss allowance / PDLs)
|
166.2 | % | 173.0 | % | 192.7 | % | 180.8 | % | 189.8 | % | 193.3 | % | 206.6 | % | 214.1 | % | ||||||||||||||||
|
Expected
loss (Loan loss allowances / Loans)
|
2.01 | % | 2.34 | % | 2.49 | % | 2.55 | % | 2.66 | % | 2.66 | % | 2.82 | % | 2.82 | % | ||||||||||||||||
|
Cost
of credit (prov. expense / loans)
|
2.60 | % | 2.87 | % | 2.33 | % | 1.97 | % | 2.00 | % | 1.53 | % | 2.17 | % | 1.59 | % | ||||||||||||||||
|
Network
|
||||||||||||||||||||||||||||||||
|
Branches
|
501 | 502 | 502 | 498 | 498 | 499 | 500 | 504 | ||||||||||||||||||||||||
|
ATMs
|
1,929 | 1,929 | 1,991 | 1,917 | 1,856 | 1,871 | 1,914 | 2,018 | ||||||||||||||||||||||||
|
Employees
|
11,578 | 11,391 | 11,280 | 11,204 | 11,155 | 11,133 | 11,049 | 11,001 | ||||||||||||||||||||||||
|
Market
information (period-end)
|
||||||||||||||||||||||||||||||||
|
Net
income per share (Ch$)
|
0.41 | 0.57 | 0.58 | 0.73 | 0.63 | 0.74 | 0.67 | 0.50 | ||||||||||||||||||||||||
|
Net
income per ADR (US$)
|
0.73 | 1.12 | 1.11 | 1.49 | 1.25 | 1.41 | 1.42 | 1.11 | ||||||||||||||||||||||||
|
Stock
price
|
19.1 | 23.9 | 30.4 | 30.7 | 34.4 | 35.7 | 45.1 | 42.3 | ||||||||||||||||||||||||
|
ADR
price
|
34.4 | 46.7 | 57.5 | 64.8 | 68.2 | 67.1 | 96.6 | 93.5 | ||||||||||||||||||||||||
|
Market
capitalization (US$mn)
|
6,230 | 8,468 | 10,436 | 11,749 | 12,373 | 12,168 | 17,512 | 16,953 | ||||||||||||||||||||||||
|
Shares
outstanding
|
188,446.1 | 188,446.1 | 188,446.1 | 188,446.1 | 188,446.1 | 188,446.1 | 188,446.1 | 188,446.1 | ||||||||||||||||||||||||
|
ADRs
(1 ADR = 1,039 shares)
|
181.4 | 181.4 | 181.4 | 181.4 | 181.4 | 181.4 | 181.4 | 181.4 | ||||||||||||||||||||||||
|
Other
Data
|
||||||||||||||||||||||||||||||||
|
Quarterly
inflation rate5
|
(2.30 | )% | (0.13 | )% | (0.47 | )% | 0.52 | % | 0.27 | % | 0.97 | % | 0.65 | % | 0.54 | % | ||||||||||||||||
|
Avg.
overnight interbank rate (nominal)
|
5.49 | % | 1.40 | % | 0.46 | % | 0.43 | % | 0.40 | % | 0.51 | % | 1.76 | % | 2.90 | % | ||||||||||||||||
|
Avg.
10 year Central Bank yield (real)
|
2.60 | % | 2.86 | % | 2.88 | % | 3.09 | % | 3.14 | % | 3.04 | % | 2.82 | % | 3.01 | % | ||||||||||||||||
|
Avg.
10 year Central Bank yield (nominal)
|
5.09 | % | 5.63 | % | 5.70 | % | 6.13 | % | 6.41 | % | 6.42 | % | 6.07 | % | 6.12 | % | ||||||||||||||||
|
Observed
Exchange rate (Ch$/US$) (period-end)
|
582.1 | 529.07 | 546.07 | 506.43 | 526.29 | 543.09 | 485.23 | 468.37 | ||||||||||||||||||||||||
1 Ratio =
Loans - marketable securities / Time deposits + demand deposits
2 Capital
+ future interest of all loans with one installment 90 days or more
overdue.
3 Total
installments plus lines of credit more than 90 days overdue
4 Based
on internal credit models and SBIF guidelines. Banks must have a 100% coverage
of expected loss
5
Calculated using the variation of the Unidad de Fomento (UF) in the
period
|
Investor
Relations Department
Bandera
140 19th
Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email:
rmorenoh@santander.cl
|
24
|