Banco Santander-chile · BCS:BSANTANDER
Banco Santander-chile — Q4 2022 Earnings Presentation
37 slides from Banco Santander-chile's earnings presentation, Feb 3, 2023
Slide 1: Banco Santander Chile 4Q22 results
Banco Santander Chile 4Q22 results February 3, 2023
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 Update Business segments Balance Sheet and Results 3 3 3
Slide 4: Soft landing in 2023 / rate hikes should be finished
Macroeconomic environment Soft landing in 2023 / rate hikes should be finished GDP growth Inflation Annual growth % Annual change in UF inflation, % 11,70 13,3 2,70 2,50 0,80 6,6 5,3 -1,25 2,7 2,7 3,2 -6,00 2019 2020 2021 2022 (f) 2023 (f) 2024 (f) 2019 2020 2021 2022 2023 (f) 2024 (f) Monetary Poli
Slide 5: Reforms advance but with moderation
Macroeconomic environment Reforms advance but with moderation Tax & Pension reform Tax reform: • The proposal includes: (i) Restructure income tax system; (ii) Reducing tax exemptions; (iii) Mining royalty, and (iv) Corrective taxes. • The government expects to collect 3.6% of GDP with this reform t
Slide 6: Constitutional Agreement
Macroeconomic environment Constitutional Agreement Constitutional Council Expert Commission Technical Commission + Indigenous Representatives • Parity between men and women • 12 appointed by the Senate and • Appointed by the Senate • Indigenous representation 12 by the lower house in based on the lo
Slide 7: Main ideas to be included in new constitution
Macroeconomic environment Main ideas to be included in new constitution Three separate and independent powers: executive Chile is a democratic Republic, whose sovereignty with exclusive spending initiative, bicameral resides in the people. legislature, and judiciary with jurisdictional unity. Autono
Slide 8: Agenda
Agenda Macro Update Business activity Balance Sheet and Results 8 8 8
Slide 9: ROE at 21.6% in 2022 in line with guidance
Business activity ROE at 21.6% in 2022 in line with guidance Quarterly net income attributable to shareholders Quarterly ROE Ch$mn % -56.2% -45.1% 31,7% 26,7% 25,6% 20,4% 232.367 235.743 285.514 185.592 101.802 10,1% 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21 1Q22 2Q22 3Q22 4Q22 YTD Net income attributable to sh
Slide 10: Solid results from business segments in 2022
Business activity Solid results from business segments in 2022 YTD Net contribution by segment YTD Net contribution from segments Ch$mn 12M21 12M22 Ch$mn +19.7% +6.2% 537.111 570.535 1.112.228 +30.6% +49.3% 305.773 929.277 234.186 235.920 157.980 Dec-21 Dec-22 Retail Middle-Market SCIB All business
Slide 11: Strong results from SCIB & Middle Market
Business activity Strong results from SCIB & Middle Market Net contribution from SCIB Net contribution from the Middle Market Ch$ bn 12M22 YoY Ch$ bn 12M22 YoY Net interest income 144.5 49.1% Net interest income 389.3 19.0% Fees 37.3 19.8% Fees 62.6 25.6% Financial trx 158.3 44.4% Financial trx 23.0
Slide 12: Retail banking results up 6.2% YoY driven by strong client growth
Business activity Retail banking results up 6.2% YoY driven by strong client growth Evolution of Individuals clients (ths)1 Net contribution Retail banking % chg Dec 2022/Dec 2021 +7.2% Ch$ bn 12M22 YoY +13.5% Net interest 1,129.6 9.2% 1.857 1.991 1.699 1.929 income +2.4% Fees 312.7 15.1% 764 782 Fi
Slide 13: Santander Life: Expanding from individuals into the SME market
Business activity Santander Life: Expanding from individuals into the SME market Cuenta Cuenta Persona Pyme For persons, with no monthly wage or credit For companies that want a current account history needed for their business Products: Government program • Checking account open a company in one •
Slide 14: Santander Life: rapid growth and monetization
Business activity Santander Life: rapid growth and monetization Over 1 million clients! Digital product for unbanked population that seeks to be part of a Bank, receiving merits for positive financial behavior (through credit and savings) US$931 US$278 +44% +13% +21% Total income million million Dec
Slide 15: Getnet's success continues
Business activity Getnet’s success continues Acquiring network that uses the four-part model to operate, offering a payments solution to businesses. • Ecommerce launched in 1H22. • Breaking even in 2Q22. Total POS 157.641 ~157k 91% POS sold Of clients are SMEs 68.168 11.456 Ch$580 billion 99% Monthl
Slide 16: Launch of Work Café StartUp
Business activity Launch of Work Café StartUp Building on the success of our Work Café branches, in 4Q22 we launched this Work Café specifically to support the development and growth of Start ups in Chile and Latin America. 3 Strategic Pillars: • Financial products: current accounts, cards and finan
Slide 17: Leading our main competitors in NPS
Business activity Leading our main competitors in NPS 67 Net Promoter Score (NPS)1 points Life 59 60 58 57 57 56 51 54 55 56 68 53 53 54 53 52 53 points 50 51 51 Contact 48 48 48 48 45 45 46 46 center 42 41 42 40 34 38 72 30 points Web page Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec
Slide 18: Fulfilled all Responsible Banking Targets for 2022
Strategic initiatives Fulfilled all 10 Responsible Banking Targets for 2022 Santander Chile: 2020 2021 2022 Goal 2022 Goal 2025 GPTW Top Top Employer Top Employer Top Employer 1. Among the best top 10 companies to work for in Chile #1 Employer (#) 2. Women in managerial positions (%) 25% 28% 31% 28%
Slide 19: New recognitions
Business activity New recognitions Top Employer • 15.0 low risk, reaching the • For fifth consecutive year we best score within Chilean received the Top Employer banking sector. certification • We reached a 96%, an increase of 2.41 pp • This positions us as one of the companies with the best labor c
Slide 20: Agenda
Agenda Macro Update Business activity Balance Sheet and Results 20 20 20
Slide 21: Loan growth led by SCIB and consumer loans
Balance sheet & results Loan growth led by SCIB and consumer loans Total Loans Ch$ bn 12M22 YoY QoQ Ch$bn Individuals1 23,523 11.3% 3.1% +5.5% -0.1% Consumer 5,283 5.7% 4.7% 38.232 38.924 38.872 Auto loans 2 888 22.7% 3.4% 36.634 36.850 Credit cards 1,544 20.6% 15.1% Mortgages 15,729 13.4% 3.0% SMEs
Slide 22: Full focus on reducing funding costs
Balance sheet & results Full focus on reducing funding costs Total Deposits Ch$ bn 12M22 YoY QoQ Demand deposits 14,086(21.3%) (2.9%) -3.4% Time deposits 12,979 28.1% (5.8%) -4.3% Total Deposits 27,065 (3.4%) (4.3%) 28.032 27.040 27.619 28.289 27.065 Mutual funds1 8,163 3.4% (2.4%) Bonds 9,490 5.6%
Slide 23: YTD NIM of 3.3% as inflation decelerates & funding costs increase
Balance sheet & results YTD NIM of 3.3% as inflation decelerates & funding costs increase Client NIMs stable NIM1 & Inflation Net interest income 5,0% 4,4% 4,5% 12M22 YoY QoQ 3,7% Ch$ bn 3,4% 3,4% 4,0% Retail 1,130 9.2% 0.4% 3,5% 3,6% 3,0% 3,2% Middle market 389 19.0% 0.1% 2,0% 3,0% 1,0% 2,2% SCIB 1
Slide 24: NIM 2023: 2.8% under current macro assumptions
Balance sheet & results NIM 2023: 2.8% under current macro assumptions NIM 2023e Avg MPR UF inflation 2023 8.2% 9.2% 10.2% 4.3% 2.9% 2.6% 2.3% 5.3% 3.1% 2.8% 2.5% 6.3% 3.3% 3.0% 2.7% Base case: • Sensitivity to inflation ~+20bp for every +100bp • UF inflation: 5.3% (and vice-versa) • Avg MPR: 9.2% •
Slide 25: Asset quality levels should gradually return to pre-pandemic levels
Balance sheet & results Asset quality levels should gradually return to pre-pandemic levels NPLs, Impaired and coverage of NPLs NPL(1) Impaired (2) Coverage ratio (3) 185% 130% 5,8% 4,8% 2,0% 1,8% Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 NPLs
Slide 26: Cost of credit at 1.0% YTD
Balance sheet & results Cost of credit at 1.0% YTD Quarterly cost of risk1,2 Provision for loan losses % Ch$ bn 12M22 YoY QoQ 1,3% Gross provisions and (461.3) 0.3% 27.3% 1,2% 1,0% write-offs 0,9% 0,8% Recoveries 90.6 17.6% 19.6% 1,2% 1,0% Provisions (370.7) (3.2%) 29.1% 0,7% 0,8% 0,6% Cost of risk(
Slide 27: Digital platforms drives client growth and fees
Balance sheet & results Digital platforms drives client growth and fees Fees & financial transaction Fees Ch$bn Ch$ bn 12M22 YoY QoQ +38.6% Card fees 105.0 5.3% 12.2% -1.9% Getnet 27.1 280.1% 26.4% 168.5 165.2 154.0 Asset management 56.5 15.0% (0.7%) 137.2 Collection fees 52.6 20.0% (5.3%) 119.3 61,
Slide 28: Strong focus on cost control. Costs growing below inflation
Balance sheet & results Strong focus on cost control. Costs growing below inflation Operating expenses Ch$bn Ch$ bn 12M22 YoY QoQ +5.3% Personnel 414.8 4.0% (5.9%) -5.7% expenses 00,0 Administrative 255 251 310.2 10.7% 1.7% 50,0 223 236 expenses 220 Investment 00,0 130.0 6.5% 5.4% amortization 50,0
Slide 29: Digital initiatives & Work Café drive rise in productivity indicators
Balance sheet & results Digital initiatives & Work Café drive rise in productivity indicators Branches Productivity per point of sale Volumes1 per point of sale, Ch$mn -12.3% +16.2% 326 286 230.548 227 198.346 189 14 6 63 74 220 182 Dec-21 Dec-22 Dec-21 Dec-22 Traditional Workcafe Select Other Produ
Slide 30: CET1 increases 21% & CET ratio up 190bp YoY
Balance sheet & results CET1 increases 21% & CET ratio up 190bp YoY Core capital & BIS Ratio CET1 / RWA (Ch$mn) 17.4% 16.8% +0.0% 4,7% 37.936.311 37.950.107 3,5% 2,1% +20.6% 2,6% 8.5% 4.212.916 3.494.580 Minimum 11,1% CET1 Ratio 9,2% Fully Loaded by 20251 Dec-21 Phase-in Dec-22 Phase-in dic.-2021 di
Slide 31: Outlook for 2023
Conclusions Outlook for 2023 • Macro outlook: soft recession with interest rate & inflation falling • Strong focus on client activities: Strong results expected from our main business segments Remain fully committed to our US$260 million investment plan for the years 2022-2024 Continued focus
Slide 32: Thank you.
Thank you. Our purpose is to help people and business prosper. Our culture is based on believing that everything we do should be: 32 32
Slide 33: Balance sheet
Annexes Balance sheet Dec-22/Dec- Dec-22 Dec-21 21 Assets Ch$ Million % Chg. Cash and deposits in banks 1,982,942 2,881,557 (31.2%) Cash items in process of collection 843,816 390,272 116.2% Financial assets for trading at fair value through 11,827,007 9,567,818 23.6% earnings Financial derivative c
Slide 34: Balance sheet
Annexes Balance sheet Dec-22 Dec-21 Dec-22/Dec-21 LIABILITIES Ch$ Million % Chg. Cash items in process of being cleared 746,872 379,934 96.6% 11,319,320 9,507,031 19.1% Financial liabilities for trading at fair value through earnings Financial derivative contracts 11,319,320 9,507,031 19.1% Financia
Slide 35: Income statement YTD
Annexes Income statement YTD Dec-22 Dec-21 Dec-22/Dec-21 Ch$ Million % Chg. Interest income 2,850,175 1,823,973 56.3% Interest expense (2,247,808) (419,917) 435.3% Net interest income 602,368 1,404,056 (57.1%) Readjustment income 1,236,481 538,379 129.7% Readjustment expense (240,502) (144,454) 66.5
Slide 36: Quarterly income statement
Annexes: Quarterly income statement 4Q22 3Q22 4Q21 4Q22/4Q21 4Q22/3Q22 Ch$ Million % Chg. Interest income 892,009 780,634 484,502 84.1% 14.3% Interest expense (761,916) (661,496) (181,497) 319.8% 15.2% Net interest income 130,093 119,138 303,005 (57.1%) 9.2% Readjustment income 215,858 337,679 264,9
Slide 37: Annexes: Key Indicators
Annexes: Key Indicators Profitability and efficiency Dec-22 Dec-21 Variation bp Net interest margin (NIM) 1 3.3% 4.2% (83) Efficiency ratio2 42.8% 39.7% 315 Return on avg. equity3 21.6% 22.5% (82) Return on avg. assets4 1.2% 1.3% (12) Return on RWA5 2.1% 2.3% (13) Asset quality ratios (%) Dec-22 Dec
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