Banco Santander-Chile Announces Third Quarter 2022 Earnings

Rhea-AI Summary

Banco Santander Chile (NYSE: BSAC) reported a 29.3% increase in net income attributable to shareholders for the nine-month period ending September 30, 2022, totaling Ch$707 billion (Ch$3.75 per share). The ROAE reached 25.9%, while 3Q22 net income increased 5.2% year-over-year. The Bank's NIM was 3.7%, with total loans increasing 6.3% YoY. Non-interest income surged 32% due to client growth. The bank's market share in current accounts rose to 28.9%.

Positive

• Net income attributable to shareholders increased 29.3% YoY to Ch$707 billion.
• ROAE improved to 25.9%.
• Non-interest income rose 32% YoY.
• Total loans grew 6.3% YoY, with significant growth in auto loans (18.7% YoY).
• Current account market share reached 28.9%.

Negative

• NIM decreased from 4.1% to 3.7% YoY.
• Demand deposits fell 7.7% QoQ as clients shifted to time deposits.

SANTIAGO, Chile, Oct. 28, 2022 (GLOBE NEWSWIRE) -- Banco Santander Chile (NYSE: BSAC; SSE: Bsantander) announced today its resultsⁱ for the nine-month period ended September 30, 2022, and third quarter 2022 (3Q22).

Net income attributable to shareholders increases 29.3% YoY in 9M22. ROAE at 25.9%

Net income attributable to shareholders in 9M22 increased 29.3% YoY, totaling Ch$707 billion (Ch$3.75 per share and US$1.55 per ADR) with the Bank’s ROAE in 9M22 reaching 25.9%. In 3Q22, net income totaled Ch$185 billion (Ch$ 0.98 per share and US$ 0.41 per ADR), increasing 5.2% compared to 3Q21.

The net contribution from the Bank’s business results were especially strong in the quarter. These results exclude, among other items, the impact of inflation on results. The net contribution of our Retail Banking unit increased 9.8% YoY with total revenues increasing 11.3% YoY. The Net contribution from the Middle Market segment increased 29.2% YoY, with an increase in total revenues of 19.8%. Finally, the net contribution from our Corporate and Investment banking unit grew 43.7% YoY, driven by an 43.7% rise in total revenues.

NIM at 3.7% in 9M22

Net interest income and readjustments (NII) as of September 2022 increased by 2.1% compared to the same period in 2021. This increase in the NII was due to a higher inflation as the Bank has more assets than liabilities linked to inflation. This was partially offset by the higher interest rate environment, which increased funding costs. As a result, the Bank’s net interest margin reached 3.7% in 9M22 compared to 4.1% in the same period of last year.

Non-NII increases 32% YoY driven by client growth and greater product usage

Total non-net interest income revenues (fees plus treasury) increased 32% YoY in 9M22. This was due to a 17.9% increase in fees and a 70.6% rise in treasury income. Both results were driven by growth of the client base and greater usage of the Bank’s products.

Santander Life continues to grow strongly

Santander Life, our digital platform fully integrated into the Bank’s ecosystem continues to be the main contributor to client growth. The total number of Life clients as of September 2022 increased 28.8% YoY and in the third quarter 2022 Life opened 22,405 current accounts, reaching a total of 1,058,389 clients.

Current account market share increases to 28.9%

As a result of the success of our digital platforms, such as Santander Life, our market share of checking accounts continues to rise. According to the latest information available, as of July 2022, the net current account openings were equivalent to over 41.5% of total accounts opened in the rest of the banking system in the last twelve months, reaching a market share of 28.9% in current accounts. Furthermore, we have seen high success in our dollar checking account business which can now be opened through Santander Life 100% digitally. Our market share in dollar checking account reached 39% in 3Q22.

The success of Getnet continues

Our new acquiring business, which was launched in 1Q21, has continued to grow, reaching more than 131,000 POS machines, and providing Ch$8 billion in fee income in the quarter and Ch$17 billion year-to-date. In the second quarter, Getnet reached a major milestone, already generating net profits in just a little over a year since its launch and a market share of 15%.

Loan growth led by corporates and auto loans

Total loans increased 1.8% QoQ and 6.3% from December 31, 2021. The growth in loans is mainly due to conversion gains produced by high inflation in the quarter (+3.5%) on placements denominated in UF and conversion gains produced by the depreciation of the Chilean peso against the US$ (5.1% QoQ) for loans denominated in foreign currency. Approximately 20% of our commercial loan portfolio is denominated in foreign currency, mainly US dollars, and 50% of our loans are denominated in UF, mainly mortgage loans. Moreover, high yielding auto loans increased 2.7% QoQ and 18.7% YoY.

Total deposits increase 2.4% QoQ. Clients shift from demand to time deposits as rates rise

During the quarter, the Central Bank continued to tighten the monetary policy rate (MPR) from 9.0% to 10.75% at the end of September (currently at 11.25%). This rate increase had a direct impact on our funding mix. The Bank's total deposits increased 2.4% QoQ and 0.9% compared to December 31, 2021. Also, demand deposits, which are non-interest bearing, decreased 7.7% QoQ and 18.9% compared to December 31, 2021, as clients switched to more attractive time deposits which grew 15.8% QoQ.

BIS ratio at 16.8%. Core capital ratio reaches 10.1%, improving 50bp QoQ

Total equity reached Ch$3,969,002 million as of September 30, 2022, an increase of 7.5% QoQ due to the Bank’s high levels of profitability and a decrease in the losses included in other comprehensive income (OCI). The Bank’s CET1 ratio improved 50bp QoQ to 10.1% and the total BIS III ratio reached 16.8% at the end of September 2022.

Banco Santander Chile is the largest bank in the Chilean market in terms of loans and assets. As of September 30, 2022, the Bank had total assets of US$ 77.4 billion, loans net of provisions of US$ 40.1 billion, deposits of US$ 29.2 billion, and total equity of US$ 4.0 billion. The BIS capital ratio was 16.8%, with a core capital ratio of 10.1%. Banco Santander Chile is one of the companies with the highest risk classifications in Latin America with an A2 rating from Moody's, A- from Standard and Poor's, A+ from Japan Credit Rating Agency, AA- from HR Ratings and A from KBRA.        

CONTACT INFORMATION
Robert Moreno
Investor Relations
Banco Santander Chile
Bandera 140, Floor 20
Santiago, Chile
Tel: (562) 2320-8284
Email: irelations@santander.cl
Website: www.santander.cl 

i The information contained in this report is unaudited and is presented in accordance with Chilean Bank GAAP as defined by the Financial Markets Commission (CMF).

FAQ

What were Banco Santander Chile's earnings results for 3Q22?

Banco Santander Chile reported a net income of Ch$185 billion for 3Q22, a 5.2% increase compared to 3Q21.

What is the outlook for Banco Santander Chile's loan growth?

Total loans increased 6.3% YoY, driven mainly by corporate and auto loans.

How did Banco Santander Chile's non-interest income perform in 9M22?

Non-interest income increased by 32% YoY, reflecting client growth and increased product usage.

What is the current market share of Banco Santander Chile in current accounts?

As of July 2022, Banco Santander Chile has a current account market share of 28.9%.

What were the key metrics for Banco Santander Chile's capital ratios?

The CET1 ratio improved to 10.1%, and the total BIS III ratio reached 16.8% as of September 2022.