Banco Santander-chile · BCS:BSANTANDER
Banco Santander-chile — FY2019 Earnings Presentation
30 slides from Banco Santander-chile's earnings presentation, Feb 4, 2020
Slide 1: Banco Santander Chile 4Q19 & 12M19 Results
Banco Santander Chile 4019 & 12M19 Results aN RINNZ24 ee | January 29, 2020 «> Santander
Slide 2: Important information
Important information Banco Santander Chile caution that this presentation contains forward looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. These forward looking statements are found in various places throughout this presentation and include, without
Slide 3: Agenda
Agenda Macro-economic environment Strategy update Results Outlook «> Santander
Slide 4: Macroeconomic environment
Macroeconomic environment GDP growth in 2020 driven by export sector GDP YoY real growth, % 4.0 2.5 15 1.0 2 2017. +2018 +2019 (e) 2020(e) 2021(e) Inflation Annual change in UF inflation, % 2.9 2.7 2.7 3.0 : i i 2017 2018 2019 2020(e) 2021 (e) «> Santander Source: Banco Central de Chile and estimate
Slide 5: Macroeconomic environment: road map to a constitutional change
Macroeconomic environment Road map to a constitutional change Political agreement Law to launch constitutional change October 25, 2020 Constitutional convention or Mixed convention New constitutional text Exit referendum Not approved Current constitution Approved remains Referendum April 26, 2020 Ma
Slide 6: General reforms that could affect us
General reforms that could affect us Pension reform * Increase pension contribution from 10% to 16%, charged to the employer * Increase competitiveness for pension funds ¢ Implementation will take 12 years «> Santander Tax modernization ¢ Reform for total reintegration eliminated * Increase of prope
Slide 7: Banking reforms that could affect us
Banking reforms that could affect us Credit line payment * Credit In force as of Jan. 1, 2020 Capital requirements * CMF has already published for consultation systemic banks, operational risk-weighted assets, regulatory capital, and credit risk-weighted assets Implementation will begin Dec. 4, 2020
Slide 8: Agenda
Agenda Macro-economic environment Strategy update Results Outlook «> Santander
Slide 9: Strategy update: 2019 was a landmark year in innovations
Strategy update 2019 was a landmark year in innovations Challenge Approach Progress Offer transactional products with access to digital economy More than 18,000 clients. First launch 1H20 Agreement with Evertec. First operation performed in 12/19. Operations to start in Acquiring 1H20 Increase SME a
Slide 10: Advancing with acquiring business and new online insurance platform, Klare
Strategy update Advancing with our acquiring business and new online insurance platform, Klare ° Acquiring: ° Will use brand name Getnet ° Dec. 27, 2019: First transaction made with our POS. * Moving to interchange fee / 4 part model: * 1Q20: all issuers must adopt the 4-part payment system where tr
Slide 11: Strong increase in new clients
Strategy update Strong increase in new clients Quarterly gross new accounts’ During 4Q19 we opened 70,277 66% more accounts than in 4Q18 despite 33,230 42,312 social unrest, reflecting the strength of our brand and digital 1018 2018 3Q18 4018 1019 2019 3a19 4a19 channels 22% i oO Net increase in cur
Slide 12: Increasing client loyalty and digital clients
Strategy update . . a . Increasing client loyalty and digital clients | +6.9% | 9% 157,284 LOYAL HIGH INCOME etre INDIVIDUALS? o z Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 MIDDLE MARKET 57,626 on tae Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 LOYAL SME & f 413.2% | 2% 1,216,360 1,074,552 | Dec-18 Mar-19 Jun-19 Se
Slide 13: Closing the gap towards Top
Strategy update Closing the gap towards Top 1 Net Promoter Score (NPS WOE ll . | | [] = Ss 2019 2019 2019 2018 2019 2018 2019 2018 2019 Competitor1 Santander Competitor2 Competitor3 Competitor4 Competitor 5 Net Global Satisfaction - \ ES Tit 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 201
Slide 14: Santander is a leader in ESG
Strategy update Santander is a leader in ESG <Oy Our mission To be the best bank, acting responsibly and gaining the confidence and fidelity of our employees, clients, shareholders and the society Under Retail and Specialized Banks: #8 out of 270 in the world iff out of 100 in emerging markets «> Sa
Slide 15: Clients can now compensate their carbon footprint
Strategy update Clients can now compensate their carbon footprint We are the first bank in the country to give clients the opportunity to compensate their carbon footprint Clients can compensate their carbon footprint 9 oO through {3 either: = This initiative The carbon footprint is calculated using
Slide 16: Strengthening our SPF culture throughout the company
Strategy update Strengthening our SPF culture throughout the company EY Building a better working world Best in Corporate Governance We were awarded with being within the Top 3 of the country in terms of corporate governance standards for second year in a row 347 Responded the survey, including boar
Slide 17: Agenda
Agenda Macro-economic environment Strategy update Results Outlook «> Santander 17
Slide 18: Recurring ROAE of 17.7% for December 2019
Results Recurring ROAE of 17.7% for December 2019 Net income to shareholders ROAE’ Ch$bn % | > 591,902 552,093 19.2% 16.7% 12M18 12M19 12M18 12M19 ROAE 2019 adjusted for extraordinary provisions = 17.7% «> Santander 1, Net income attributable to shareholders for the year annualized divided by the av
Slide 19: Positive evolution of funding mix
Results Positive evolution of funding mix Total Deposits Ch$ bn 12M19 YoY QoQ Ch$bn Demand 10,297 17.8% 8.8% —_£ZZa_— Time 13,193 1.0% (1.6%) eee 2.7% me Total Deposits 23,490 7.7% 2.7% 21,809 21,462 22,032 22,868 23,490 Mutual funds? 6,524 17.0% (2.4%) Adjusted Loans to deposits” 95.1% LCR? 143% De
Slide 20: Loan growth driven by Retail banking
Results Total Loans Loan growth driven by Retail banking Ch$b son +8.1% 30,282 30,600 Dec-18 Mar-19 31,095 Jun-19 me 31,905 Sep-19 32,732 Dec-19 Ch$ bn 12M19 Individuals? 18,834 Consumer 5,539 Mortgages 11,263 SMEs 4,085 Retail 22,919 Middle Market 8,093 Corporate (SCIB) 1,672 Total? 32,732 2020: Lo
Slide 21: Higher inflation and lower cost of funds leads to solid margins in 4Q19
Results Higher inflation and lower cost of funds leads to solid margins in 4Q19 NIM‘ & Inflation Net Interest Income 4.4% 4.4% ao een iami9 YoY __ QoQ A% f 3.9% 4.0% od Net interest income 1,417 0.2% 8.0% Average interest-earning assets 34,382 8.0% 3.8% 2.75% —— 2.50% Average loans 31,392 7.7% 4.7%
Slide 22: Rising inflation and greater slope of yield curve to support margins
Results Rising inflation and greater slope of yield curve to support margins 10Y Nominal Central Bank Notes Rate, Monetary Policy Rate’ and 12M UF inflation % Negative slope in LT rates fell faster Now slope of LT rate is than ST rates. This incentivized increasing, as the Monetary refinancing of mo
Slide 23: Slight deterioration of asset quality in the quarter
Results Slight deterioration of asset quality in the quarter Total loans % of loans 129% 126% ° 130% 135% 6.5% 5.9% 5.8% 5.9% —e——1—2-—_1.—_ 1» 2 —o 2.3% 2.1% 2.0% 2.1% wv ef w =—®=NPL =—@=Impaired loans =—®=Coverage ratio Consumer loans % of loans 275% " 7! o—e 5.6% 5.2% 5.1% 2.3% 1.8% 1.6% 1.6% e-
Slide 24: Higher provisions in order to bolster coverage
Results Higher provisions in order to bolster coverage Cost of credit’ % 4Q18 1019 2Q19 | 3Q19 4Q19 =@= Cost of credit *@« Adjusted cost of credit” Provision for loan losses Ch$ bn 12M19 YoY QoQ Gross provisions & charge-offs Loan loss recoveries 82,714 (6.5%) (17.2%) Provision for loan losses (420,
Slide 25: Non-NII: Strong fee income in the quarter
Results Non-NIl: Strong fee income in the quarter Non-interest income (fee + financial trxs) Ch$bn ;——_&zaa-—__- a Pios2 I sos [usr Psa fits 64.7 54.4 35.8 38.8 49.0 67.4 70.7 68.0 71.7 76.7 4Q18 1Q19 2Q19 3Q19 4Q19 Net fee income Financial trx Total Non-NIl increases 24.8% in 2019 «> Santander Fee
Slide 26: Increasing productivity and improving the branch layout
Results Increasing productivity and improving the branch layout Points of sale work cate 380 ra Traditional 377 va 324 12M18 12M19 Volume per branch’ Employees 149,130 137,082 11,305 11,200 12M18 12M19 12M18 12M19 «d Santander 26 1. Volume per branch calculated as total loans divided by number of br
Slide 27: Investing to improve productivity and efficiency
Results Investing to improve productivity and efficiency Operating Expenses Ch$bn 42.5% Ch$ bn 12M19 YoY QoQ 191.6 Personnel expenses 410.2 3.2% 0.8% 189.1 189.1 a : Administrative 6 5 — 0.3% expenses 233.6 (4.7%) (3.2%) a 39.3% Depreciation 106.1 33.8% 3.3% ; 180.1 Operating expenses 749.9 3.9% (0.
Slide 28: Solid capital ratios
Results Solid capital ratios Core capital BIS ratio ashi 10.1% 13.4% 12.9% 12M18 12M19 12M18 12M19 RWA model for credit risk recently published «> Santander 28
Slide 29: Agenda
Agenda Macro-economic environment Strategy update Results Outlook «> Santander 29
Slide 30: Outlook for 2020
Outlook Outlook for 2020 Y 2020 economic growth lowered due to fall in investment rate. Export growth and greater fiscal spending to push growth Y Wewill continue with ambitious investment plan focusing on technology and new businesses Vv Estimated loan growth of 5% in 2020 with higher growth in ret