Banco Santander-chile · BCS:BSANTANDER
Banco Santander-chile — Q3 2023 Earnings Presentation
39 slides from Banco Santander-chile's earnings presentation, Nov 6, 2023
Slide 1: Banco Santander Chile Results 3Q23
- Santander Tu banco Banco Santander Chile Results 3Q23 November 3, 2023
Slide 2: Important information
«Santander 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 inclu
Slide 3: Agenda
Agenda Macro Update Chile First: Strategy 2023-2026 Balance sheet and results Conclusions Annexes ma BWHDN
Slide 4: Macro update
Macro update
Slide 5: Macro environment
Macro environment Macro view GDP growth Annual growth % ili 71 2.4 6.1 2019 2020 2021 2022 Monetary Policy Rate %, cop 11.25 40 ATS mm | a 2019 2020 2021 2022 Source: Central Bank of Chile and Santander estimates. 2.0 0.5 2023 (Ff) 2024 (f) 8.25 \) ; 2023(f) 2024 (f) Inflation UF inflation, annual v
Slide 6: Macro environment: Financial Conditions
Macro environment Financial Conditions Nominal exchange rate Interest rate spread: TPM- Fed Funds $/US$; % % 1,100 10 8 1,000 — CLP effective 6 900 4 800 P —CLP estimated 700 0 — Jan-22. May-22 = Sep-22 Jan-23. May-23.— Sep-23 Jan-02 Jan-06 Jan-10 Jan-14 Jan-18 Jan-22 Source: Central Bank of Chile a
Slide 7: Update on proposed regulations
Macro environment Update on proposed regulations Fiscal pact Pension reform Constitution Fintech Law Data protection Consolidated debt registry Includes income tax changes, greater fiscal oversight and transparency, and measures to support productivity and economic growth. Bill is under discussion i
Slide 8: Chile First: Strategy 2023-2026
Chile First: Strategy 2023-2026
Slide 9: Chile First: our strategic pillars
Chile First Our strategic pillars A Digital Bank with Work/Cafes... ...based on state of the art technology and processes and collaborators centered on the customer. Specialization and added value for companies... ..with a differential value-added service and offer for transactional products, FX and
Slide 10: A Digital Bank with Work/Cafés
Chile First A Digital Bank with Work/Cafés Expresso + Digital products for the non-bankerized populations that seek to part of the bank, receiving merits for the positive financial behaviours (through loans and savings). + The first 100% digital sight and savings accounts for the mass market. Launch
Slide 11: Digital initiatives and Work/Café boost productivity indicators
Chile First Digital initiatives and Work/Café boost productivity indicators (CBRANCHES: Sep-22 Sep-23 31% without human tellers + Includes: + 4Work/Café Expresso + 1 Work/Café Startup Tradicional mi Workcafe m Select m Other Work Café /? Santander COMUNIDAD 1. Volume= total loans + total deposits (P
Slide 12: Specialization and added value for companies
Chile First Specialization and added value for companies A, life + For small and medium sized companies that want a current account for their business. Getnet Santander + Acquiring network that uses the four-part model to operate, offering an integrated payments solution to businesses. + Focus on th
Slide 13: An organization that is agile, collaborative and high performance
Chile First An organization that is agile, collaborative and high performance... Our cost structure means that it costs us less to serve our clients y. urrence! i Santander a Best in class (Santander), fi : 56.8% EE | System} 41.0% on fees generated by our customers now cover almost a7 of our expens
Slide 14: Leading our peers in NPS, with the best contact center
Chile First Leading our peers in NPS, with the best contact center in the industry ; Top 1 70 points % Contact Center 59 60 58 53s a 58 70 points App 71 points Website Based on more than 60,000 =@= Santander =@Peer 1 =@-Peer2 =@Peers* 9 surveys, measuring more than 30 NPS metrics everyday across our
Slide 15: Meeting our Responsible Banking goals
Chile First Meeting our Responsible Banking goals © Santander Chile 2020 022 Progress in2023 Goal 202 1. Among the best top 10 companies to GPTW#1 work for in Chile (#) Top Employer | Top Employer Top Employer Top Employer 2. Women in managerial positions (%) 25% 28% 31% 28% 30% 3. Eliminate gender
Slide 16: Issuance of first green mortgage bond in Chile
ESG Issuance of first green mortgage bond in Chile Our first issuance under our ESG framework * — Issuance: JPY 8,000 million (US$ 53 million), 2 yr at 0.845%. i + First bond in Chile to finance green mortgages. * The portfolio has an average size of Ch$86 billion L: and growing. The Bank will grant
Slide 17: Balance sheet and results
Balance sheet and results
Slide 18: Segments performing strongly and ROE impacted by non-client revenues
Balance sheet and results Segments performing strongly and ROE impacted by non-client revenues YTD accumulated net contribution from segments Accumulated net income attributable to shareholders Ch$ million Ch$ million 54.8% 1,135,567 ! 853,627 706,849 319,486 9M22 9M23 9M22 9M23 Book Value Accumulat
Slide 19: Solid results from CIB & Middle Market
Balance sheet and results Solid results From CIB & Middle Market Net contribution from CIB Net contribution from Middle Market Ch$ bn 9M23 YoY Ch$ bn 9M23 YoY Net interest income 186.3 72.7% Net interest income 348.3 20.3% Fees 36.4 31.0% Fees 48.5 5.7% Financial trx 143.0 20.1% Financial trx 21.2 2
Slide 20: S e p - S e p - S e p - S e
S e p - 22 S e p - 23 S e p - 22 S e p - 23 20
Slide 21: Loan growth driven by commercial lending in the quarter
Balance sheet and results Loan growth driven by commercial lending in the quarter Total loans 38,924 38,872 «39,118 39,362, 404139 Sep 22 Dec-22 Mar-23 Jun-23 Sept-23 Credit card loans chsbn 1,544 1,571 1,417 Met 1,280 1049 1,079 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Ch$ billion 9M23 YoY QoQ, Individua
Slide 22: Solid liquidity levels and capturing market share in demand deposits
Balance sheet and results Solid liquidity levels and capturing market share in demand deposits Total deposits Ch$bn Ch$ billion 9M23 YoY Q0Q t g 12.0% 7 Demand deposits 12,904 (11.1%) (2.8%) CEE Time deposits 15,651 13.6% 5.1% 28,289 27,065 28,072 28,164 28,555 Total deposits 28,555 0.9% 1.4% Mutual
Slide 23: Solid balance structure and liquidity levels
Balance sheet and results Solid balance structure and liquidity levels Structural balance sheet US$bn, Sept 2023 Commercial 19.4 Demand deposits 14.5 Term deposits 17.6 FCIC 6.7 Bilateral 4.2 Bonds 11.6 Equity 4.9 USD 81 bn Mortgages 18.6 AFS7.8 HTC 5.3 Assets Liabilities Balance Sheet sensitivities
Slide 24: YTD NIM of 2.0% as inflation decelerates
Balance sheet and results YTD NIM of 2.0% as inflation decelerates. Client NIM's improving Quarterly NIM" & Inflation Net interest income 41% 41% aay Ch§ billion 9m23 YoY Q0Q 3.4% : 7” : 3.4 a Retail 1,024 20.8% 3.2% 3.0% i 5 22% 22% aan Ace Middle market 348 20.3% (0.3%) -0.4% CIB 186 72.7% (4.2%)
Slide 25: Asset quality levels normalizing with a slight increase in NPLs
Balance sheet and results Asset quality levels normalizing with a slight increase in NPLs from the lower economic activity NPLs, Impaired and coverage of NPLs ~ NPL(1) Impaired (2) =e Coverage ratio (3) 261% 252% 259% 270% 279% A 227% 228% 198% 200% 185% 185% 154% 165% 158% 130% 135% 136% 5.8% 5.9%
Slide 26: Asset quality levels normalizing with a slight increase in NPLs
Balance sheet and results Asset quality levels normalizing with a slight increase in NPLs from the lower economic activity Mortgage loans Consumer loans NPL ratio Coverage from Impaired ratio NPL ratio Impeired ratio 320% to 467% Coverage from 5.2% 5:6% sen 45% 38% to 62% 4.8% sos son 5% 3.2% 5% 3.0
Slide 27: Cost of Credit at 1.20% YTD in line with guidance
Balance sheet and results Cost of Credit at 1.20% YTD in line with guidance Cost of risk’ % Provisions 1.20% 0.90% arn Ch$ billion 9M23 YoY Q0Q i Gross provisions and write-offs (427.7) 33.9% 4.1% Recoveries 75.4 14.5% 9.5% 9M22 9M23 Provisions (352.3) 39.0% 2.9% Cost of risk(YTD) 1.20% Evolution of
Slide 28: Digital platforms drives client growth and fees
Balance sheet and results Digital platforms drives client growth and fees Fees and Financial Transactions Fees pda Ch$ billion 9M23 YoY 0a Card fees 94.4 25.9% 7.6% Getnet 32.5 90.2% 3.1% Asset management 44.8 6.9% 8.1% Collection fees 48.2 23.1% (0.1%) Insurance brokerage 26.5 (2.7%) 3.7% Checking
Slide 29: Costs under control, decreasing YoY
Balance sheet and results Costs under control, decreasing YoY Operating expenses Ch$ billion 9m23 YoY Q0Q Ch$bn Personnel expenses 316.8 0.6% (7.2%) 251 —G@p— Administrative expenses 227.5 0.5% 8.4% 222 231 Investment amortization 107.3 11.6% 3.9% 236 217 Other operating expenses 18.0 (79.4%) --% Op
Slide 30: Solid capital levels with CET1 ratio at 10.7% & BIS ratio at 17.1%
Balance sheet and results Solid capital levels with CET1 ratio at 10.7% & BIS ratio at 17.1% Core capital & BIS ratio 17,1% 16,8% 12.5% including buffers ~~ 9.0% Fully Loaded min. requirement in 20251 10.7% 10.1% Sept-22 Phase-in Sept-23 Phase-in Core capital @ATI Tier 2 Current Phase-in of Basel II
Slide 31: Conclusions
Conclusions
Slide 32: Conclusions: Guidance
Conclusions Guidance Va ~ What to expect in 4Q23 Macro assumptions: Av. MPR ~9.1%, UF var ~1.6% Margins starting to recover with the lower rates and higher quarterly UF variation. Robust client NIMs Sound performance on Non-NIl, although impacted by start of reduction in interchange fees CoR should
Slide 33: Santander
» Santander
Slide 34: Annexes
Annexes
Slide 35: Annexes: Assets
Annexes Assets Cash and deposits in banks Cash items in process of collection Financial assets for trading at fair value through earnings Financial derivative contracts Financial debt instruments Financial assets at fair value through other comprehensive income Financial debt instruments Other finan
Slide 36: Annexes: Liabilities and equity
Annexes LIABILITIES Cash items in process of being cleared Financial liabilities for trading at fair value through earnings Financial derivative contracts Financial derivative contracts for hedge accounting Financial liabilities at amortized cost Deposits and other demand liabilities Time deposits a
Slide 37: Annexes: Income statement
Annexes Sept-23 Dec-22 Sept-23/Dec-22 hs Million % Chg. Interest income 2.859.612 1.958.166 46.0% Interest expense (2.368.941) (1.485.892) 59,4% Net interest income 490.670 472.274 3.9% Readjustment income 351.791 1.020.622 (65.5%) Readjustment expense (100.309) (171.489) (41.5%) Net readjustment in
Slide 38: Annexes: Quarterly income statement
Annexes 3023 2023 3022 3023/3022 3023/2023 hs Milton % Chg. Interest income 987.377 948.735 780.634 26,5% 4.1% Interest expense (796.629) (824.157) (667.496) 20,4% (3.3%) Netinterest income 190.748 124.578 119.138 60.1% 53.1% Readjustment income 25.189 178.137 337.679 (92.5%) (85.9%) Readjustment ex
Slide 39: Annexes: Key ratios
Annexes Profitability and efficiency Sept-23 Sept-22 Variation bp Net interest margin (NIM)* 2.0% 3.7% (175) Recurrencia® 57.9% 41.2% 1,662 Efficiency ratio? 48.0% 40.4% 763 Return on avg. equity* 10.4% 25.9% (1,555) Return on avg. assets® 0.6% 1.4% (81) Return on RWA® 1.1% 2.5% (141) Asset quality
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