Banco Santander-Chile Announces First Quarter 2025 Earnings

Rhea-AI Summary

Banco Santander Chile reported strong Q1 2025 financial results with a net income of $278 billion ($1.47 per share), marking a significant 131% year-over-year increase. The bank achieved an impressive ROAE of 25.7%, maintaining above 20% returns for the fourth consecutive quarter.

Key highlights include a 33.2% increase in operating income, improved net interest margin reaching 4.1%, and best-in-class efficiency ratio of 35%. The bank successfully completed its Gravity project, migrating systems to the cloud, while expanding its customer base by 9.4% to 4.3 million customers.

Shareholders approved a dividend of Ch$3.19 per share, yielding 5.4%. The bank maintains strong capital ratios with CET1 at 10.7% and overall Basel III ratio at 16.9%. Total assets reached Ch$67,059,423 million with gross loans of Ch$41,098,666 million as of March 31, 2025.

Positive

• Net income soared 131% YoY to $278 billion ($0.62 per ADR)
• Strong ROAE of 25.7% in Q1 2025, fourth consecutive quarter above 20%
• Operating income grew 33.2% YoY
• High dividend yield of 5.4% with Ch$3.19 per share
• Solid CET1 ratio at 10.7% with overall Basel III ratio at 16.9%
• NIM improved to 4.1% in Q1 2025 from 2.7% in Q1 2024
• Best-in-class efficiency ratio of 35.0%, improved from 47.4% YoY
• Customer base expanded 9.4% YoY with digital customers up 6.6%
• Strong 22.5% market share in checking accounts
• Net commissions increased 16.8% with improved recurrence ratio of 61.8%
• High credit ratings with stable outlook (A2 Moody's, A- S&P)

Negative

• Quarter-over-quarter net income growth slowed to just 0.5%
• Lower UF variation in Q1 2025 vs Q4 2024 reduced readjustment gains
• Higher technology expenses due to Gravity project system migration
• Write-downs and impairments from legacy systems

Insights

Financial Analyst

Santander Chile delivers exceptional Q1 2025 results with 131% YoY profit growth, 25.7% ROAE, and improved efficiency metrics.

Banco Santander Chile reported outstanding Q1 2025 financial results, with net income attributable to shareholders reaching $278 billion ($1.47 per share, $0.62 per ADR), representing a substantial 131.0% year-over-year increase. The bank achieved a 25.7% ROAE, marking its fourth consecutive quarter above 20% - demonstrating consistent high-level performance in the banking sector.

The primary driver behind this growth was a 41.7% increase in net interest and readjustment income compared to Q1 2024. This improvement stemmed from lower funding costs as the monetary policy rate decreased from 5.3% to 3.9%. Consequently, the net interest margin (NIM) expanded from 2.7% in Q1 2024 to 4.1% in the current quarter.

Operational efficiency showed remarkable improvement, with the bank achieving a best-in-class efficiency ratio of 35.0%, substantially better than the 47.4% recorded in the same period last year. Total operating expenses decreased by 1.7% despite technology investments, including the completion of the Gravity project - migrating systems from Mainframe to Cloud.

The digital transformation strategy continues yielding results with a 9.4% increase in total customers and 6.6% growth in digital customers year-over-year. This customer expansion helped drive a 16.8% increase in net commissions, with the recurrence ratio reaching 61.8%, indicating that over half of the bank's expenses are now covered by commission income.

Capital position remains solid with a CET1 ratio of 10.7% and an overall Basel III ratio of 16.9%. The bank approved a dividend distribution representing 70% of 2024 earnings, amounting to Ch$3.19 per share with a 5.4% dividend yield.

SANTIAGO, Chile, April 30, 2025 (GLOBE NEWSWIRE) -- Banco Santander Chile (NYSE: BSAC; SSE: Bsantander) announced today its results¹ for the three-month period ended March 31, 2025, and first quarter 2025 (1Q25).

Solid financial performance with a ROAE² of 25.7% in 1Q25³, the fourth consecutive quarter with a ROAE of over 20%.

As of March 31, 2025, the bank's net income attributable to shareholders totaled $278 billion ($1.47 per share and $0.62 per ADR), representing a 131.0% YoY⁴ increase and an ROAE of 25.7%, compared to an ROAE of 11.2% in 1Q24. The increase in results is explained by an increase in the bank's main revenue lines. Operating income increased 33.2% YoY, driven by better net interest and readjustment income.

Compared to the previous quarter, 4Q24, the bank's net income attributable to shareholders increased by 0.5%. The UF variation in 1Q25 was slightly lower than in 4Q24, which reduced QoQ⁵ readjustment gains. This was offset by higher fees and results from financial transactions and improved expense control. This resulted in a ROAE of 25.7% in 1Q25, marking the fourth consecutive quarter with ROAEs above 20%.

Dividend payment of Ch$3.19 per share with a dividend yield of 5.4%. A solid CET1 ratio⁶ of 10.7%.

At our Ordinary Shareholders' Meeting on April 22, 2025, the distribution of 70% of our 2024 earnings, amounting to $857,623 million, was approved. These earnings represent a dividend of $3.18571574 Chilean pesos per share, for a total of $600,336 million.

Likewise, it was approved that the remaining 30% be partially allocated to increasing the Accumulated Earnings from previous years by the amount necessary to cover the payment of the next three interest coupons on the fixed-term bonds for $29.993 billion and to increase the Bank's Reserves and Other Retained Earnings by $227.294 billion.

Our CET1 ratio remains at a solid 10.7% at the end of March 2025, with the overall Basel III ratio reaching 16.9%. The Bank's capital includes a dividend payment provision of 70% of 2024 earnings and a 60% provision of 2025 earnings to date.

Strong recovery of NIM⁷, reaching 4.1% in 1Q25

Net interest and readjustment income (NII) accumulated as of March 31, 2025, increased 41.7% compared to the same period in 2024. This increase in NII was due to higher net interest income due to the impact of a lower monetary policy rate on our funding cost, which fell from 5.3% to 3.9% in 3M25. The increase is also explained by higher readjustment income, resulting from a greater variation in the UF during the quarter compared to the same quarter last year.

Compared to 4Q24, net interest and readjustment income decreased slightly due to lower inflation in 1Q25 compared to the previous quarter.

Given the above, the NIM increased from 2.7% in 1Q24 to 4.2% in 4Q24 to 4.1% in 1Q25.

Gravity: Migration of our systems to the cloud. Best-in-class efficiency⁸ of 35.0% in 1Q25.

In 1Q25, the Bank celebrated the major milestone of the Gravity project, the migration from the Mainframe to the Cloud. In January, we transitioned processing to our new Cloud, which resulted in higher technology expenses related to the change and write-downs and impairments related to legacy systems.

The Bank's efficiency ratio reached 35.0% as of March 31, 2025, better than the 47.4% of the same period in the previous year. Total operating expenses (which include other expenses) decreased 1.7% in 3M25 compared to 3M24, driven by lower other operating expenses related to the restructuring of our branch network and the transformation to Work/Café.

The customer base continues to expand, with total customers increasing by 9.4% YoY and digital customers increasing by 6.6% YoY.

Our strategy of strengthening our digital products has led to continued growth in our customer base, reaching approximately 4.3 million customers, of which nearly 2.3 million are digital customers (88% of our active customers).

The Bank's market share in checking accounts remains strong at 22.5% through February 2025, driven by increased customer demand for US dollar checking accounts, as customers can open these types of accounts digitally through our platform in a few easy steps. This also demonstrates the success of Getnet's strategy to encourage cross-selling of other products such as the Cuenta Pyme Life.

Net commissions increased by 16.8% in 3M25, reaching recurrence levels⁹ of 61.8%.

Net commissions increased 16.8% in the three months ended March 31, 2025, compared to the same period in 2024, driven by increased customer numbers and greater product usage. As a result, the recurrence ratio (total net commissions divided by structural support expenses) increased from 57.8% as of March 2024 to 61.8% as of March 2025, demonstrating that more than half of the Bank's expenses are financed by commissions generated by our customers.

Banco Santander Chile is one of the companies with the highest risk ratings in Latin America, with an A2 rating from Moody's, A- from Standard & Poor's, A+ from the Japan Credit Rating Agency, AA- from HR Ratings, and A from KBRA. All of our ratings have a stable outlook as of the date of this report.

As of March 31, 2025, the bank had total assets of Ch$67,059,423 million (US$70,284 million), total gross loans (including those owed by banks) at amortized cost of Ch$41,098,666 million (US$43,075 million), total deposits of Ch$30,607,715 million (US$32,080 million), and bank owners' equity of Ch$4,400,233 million (US$4,612 million). The BIS capital ratio was 16.9%, with a core capital ratio of 10.7%. As of March 31, 2025, Santander Chile employed 8,712 people and had 237 branches throughout Chile.

CONTACT INFORMATION
Cristian Vicuña
Chief Strategy Officer and Head of Investor Relations
Banco Santander Chile
Bandera 140, Floor 20
Santiago, Chile
Email: irelations@santander.cl Website: www.santander.cl

---

¹ The information contained in this report is presented in accordance with Chilean Bank GAAP as defined by the Financial Markets Commission (FMC).
² Annualized net income attributable to shareholders of the Bank divided by the average equity attributable to equity holders
³ The first quarter of 2025
⁴ Year on year.
⁵ Quarter on quarter
⁶ Common Equity Tier 1 under Chilean regulation.
⁷ NIM: Net interest margin. Net interest income and annualized adjustments divided by interest-earning assets.
⁸ Efficiency: operating expenses including impairment and other operating expenses/ financial margin + fees+ financial transactions and net other operating income.
⁹ Recurrence: net commissions divided bycore support costs.

FAQ

What is Banco Santander Chile (BSAC) Q1 2025 earnings per share?

In Q1 2025, BSAC reported earnings of $1.47 per share and $0.62 per ADR, representing a 131.0% increase compared to Q1 2024.

How much dividend will BSAC pay in 2025?

Banco Santander Chile will distribute Ch$3.19 per share, representing 70% of 2024 earnings with a dividend yield of 5.4%. The total dividend payment amounts to $600,336 million Chilean pesos.

What is BSAC's net interest margin (NIM) in Q1 2025?

BSAC's net interest margin reached 4.1% in Q1 2025, improving from 2.7% in Q1 2024, driven by lower funding costs and higher readjustment income.

What is Banco Santander Chile's efficiency ratio in Q1 2025?

BSAC achieved a best-in-class efficiency ratio of 35.0% in Q1 2025, improving from 47.4% in the same period of the previous year.

What is BSAC's customer growth rate in Q1 2025?

BSAC's total customer base grew 9.4% year-over-year, reaching 4.3 million customers, with digital customers increasing by 6.6% to 2.3 million.

What is Banco Santander Chile's CET1 ratio in Q1 2025?

BSAC maintained a solid CET1 ratio of 10.7% at the end of March 2025, with an overall Basel III ratio of 16.9%.