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The Santander Chile subsidiary Santander Consumer signs agreement to acquire Mundo Crédito's auto loan portfolio

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Banco Santander Chile's subsidiary Santander Consumer Finance to acquire Mundo Crédito for up to US$ 79 million, expanding its automotive loan portfolio. The operation subject to approval aims to reach between $50,000 million and $70,000 million, strengthening Santander Consumer's market position.
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The acquisition of Mundo Crédito by Santander Consumer Finance represents a strategic move to expand the latter's footprint in the automotive loan market. The investment of up to $79 million indicates a significant commitment to this sector, which could lead to an increase in market share and revenue streams. The deal's structure, with a payment range of $50,000 million to $70,000 million, suggests a performance-based agreement, potentially minimizing risk for Santander Consumer Finance.

From a financial perspective, the acquisition should be scrutinized in terms of return on investment (ROI) and how it aligns with Santander's overall growth strategy. The automotive financing sector can be cyclical, influenced by economic conditions that affect consumer purchasing power. It is crucial to assess whether the current economic climate will support the growth anticipated from this acquisition. Additionally, investors should monitor the due diligence outcomes and regulatory approval processes, as these factors could impact the final terms and benefits of the deal.

Entering or expanding within the automotive loan market can be a lucrative but competitive endeavor. Santander Consumer's acquisition of Mundo Crédito's loan portfolio could allow it to tap into a customer base that is already familiar with automotive financing, potentially offering cross-selling opportunities with other financial products. It is important to note the growing trend of consumers opting for financing options when purchasing vehicles, a behavior that could be beneficial for Santander Consumer post-acquisition.

The impact on the market could see shifts in competitive dynamics, with Santander Consumer strengthening its position and possibly exerting more influence on loan pricing and terms. Market analysis should track consumer responses to the acquisition, including brand perception and customer satisfaction, as these will be indicative of the long-term success of the integration.

The transaction's dependency on the approval of the National Economic Prosecutor's Office highlights the regulatory hurdles that must be overcome before the acquisition can proceed. This underscores the importance of antitrust considerations in financial sector consolidations. The legal framework within Chile's financial markets is designed to prevent monopolistic practices and ensure fair competition. The due diligence process will also be critical in identifying any potential legal risks associated with Mundo Crédito's loan portfolio, such as compliance with consumer protection laws and the quality of the underlying assets.

For stakeholders, it is paramount to understand the legal intricacies that could affect the timeline and success of the transaction. Any delays or conditions imposed by regulatory bodies could alter the expected benefits of the acquisition. Furthermore, the legal team's ability to navigate these processes efficiently will be a key factor in the eventual realization of the deal's strategic and financial objectives.

SANTIAGO, Chile, Feb. 12, 2024 (GLOBE NEWSWIRE) -- Banco Santander Chile's (NYSE: BSAC) announced that its subsidiary Santander Consumer Finance will acquire Mundo Crédito in an operation for up to US$ 79 million. The operation is subject to the approval of the National Economic Prosecutor's Office, the due diligence process and other usual conditions precedent.

With the aim of expanding its offer and participation in this segment, Santander Consumer subscribed to the purchase - subject to conditions - of the automotive loan portfolio of Servicios Financieros Mundo Crédito SpA, a company that provides financing for the acquisition of new or used motor vehicles with pledge guarantee. The operation would reach between $50,000 million and $70,000 million, being subject to the approval of the National Economic Prosecutor's Office, the due diligence process and other usual conditions precedent.

According to what was reported in an Material Fact to the Financial Market Commission, once the aforementioned conditions are met, Santander Consumer will acquire automotive loans from Mundo Crédito that meet certain eligibility criteria. The closing of this portfolio purchase will be carried out in two successive stages that are expected to conclude within the first half of the current year.

Cristián Amar, CEO of Santander Consumer, pointed out that “we accompany people in their decisions that allow them to achieve greater well-being and better living conditions. In that sense, for families, purchasing a vehicle is one of the most important purchasing decisions. At Santander Consumer we are very happy with this step, because with this operation we strengthen our offer in this market.” Indeed, thanks to this operation, Santander Consumer consolidates its position as one of the main players in this industry, thus allowing it to reach new customers.

About Banco Santander
As of December 31, 2023, we had total assets of Ch$ 70,857,886 million (U.S.$ 81,031 million), outstanding gross loans (including interbank loans) at amortized cost of Ch$ 40,811,866 million (U.S.$ 46,671 million), total deposits of Ch$ 29,675,768 million (U.S.$ 33,936 million) and shareholders’ equity of Ch$ 4,367,159 million (U.S.$ 4,994 million). The BIS capital ratio as of December 31, 2023, was 17.6%, with a core capital ratio of 11.1%. As of December 31, 2023 Santander Chile employed 9,229 people and has 247 branches throughout Chile. 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, all have a Stable Outlook.

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 


BSAC

Up to US$ 79 million.

Automotive loan portfolio.

Between $50,000 million and $70,000 million.

Within the first half of the current year.

Cristián Amar.
Banco Santander Chile SA

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