Banco Santander-chile · BCS:BSANTANDER
Banco Santander-chile — Q1 2020 Earnings Presentation
27 slides from Banco Santander-chile's earnings presentation, May 1, 2020
Slide 1: Banco Santander Chile 1Q20 Results
Banco Santander Chile 1Q20 Results April 29, 2020
Slide 2: Important information
2 2 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, wi
Slide 3: Agenda
3 3 AGENDA COVID19: REGULATORY UPDATE SAN CHILE: BUSINESS GROWTH AND RESULTS SAN CHILE: BALANCE SHEET
Slide 4: Regulatory update
4 4 Fiscal measures including an expanded public guarantee scheme for working capital Central Bank is providing liquidity to banks Local regulation has been adapted to address treatment of credit deferrals and guarantees Central Bank, Government and CMF have launched different measures to ensure com
Slide 5: The Central Bank is providing liquidity to banks
5 5 • Two liquidity programs for banks during 6 months at MPR (0.5%) for up to US$ 24bn in total, conditional on credit growth. • FCIC line : For up to 4 years. Eligible collateral: Standard collaterals, corporate bonds, and high ratings commercial loans • LCL line : For up to 2 years. Constraint: B
Slide 6: Necessary measures to help households and firms
6 6 Source: Min Hacienda and Santander Fiscal measures • Expenditure increase : • Health’s budget increased by US$1.5 billion (2% GDP) • Cash transfers (US$ 230) per family for the poorest segments, and allowance per family (US$ 300) during three months for those without formal jobs • Tax cuts and l
Slide 7: State guarantees for working capital lines
7 7 • COVID - 19 guarantee line : State guarantees for 60 - 85% of working capital loans to companies with annual sales of up to 1,000,000UF (Ch$30 bn ). This is an extension of the current FOGAPE scheme. 1 • FOGAPE ´ s capital increase by US$3bn should allow up to US$24 bn in loans • Maximum loan a
Slide 8: CMF announcements to support loan growth during this period
8 8 Source: CMF and Santander CMF announcements to support loan growth during this period • Possibility of deferring payments without being considered a renegotiation x Mortgages and commercial loans: up to 6 months x Consumer: up to 3 months • Phase in of Basel III postponed to December 2021 • Allo
Slide 9: Agenda
9 9 AGENDA SAN CHILE: BUSINESS GROWTH AND RESULTS SAN CHILE: BALANCE SHEET COVID19: REGULATORY UPDATE
Slide 10: Positive evolution of funding mix
10 10 21,462 22,032 22,868 23,490 25,258 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Positive evolution of funding mix Ch$bn Total Deposits +17.7% Ch$ bnS 3M20 YoY QoQ Demand deposits 11,048 29.6% 7.3% Time deposits 14,210 9.9% 7.7% Total Deposits 25,258 17.7% 7.5% Mutual funds 1 6,979 20.0% 7.0% Loans/Depos
Slide 11: Solid levels of liquidity in the system
11 11 205% 152% 125% 107% 107% 150% Santander Estado Itau Chile BCI Scotiabank 70% Regulatory minimum 141% Average Liquidity coverage ratio 1 Balance sheet Solid levels of liquidity in the system 1. LCR calculated following the new local Chilean models Source : public quarterly liquidity reports pro
Slide 12: Loan growth driven by Corporate and Middle-market
12 12 30,600 31,095 31,905 32,732 34,355 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Ch$bn Total Loans +12.3% +5.0% Ch$ bn 3M20 YoY QoQ Individuals 1 19,262 12.3% 2.3% Consumer 5,451 10.8% (1.6%) Mortgages 11,664 12.9% 3.6% SMEs 4,129 7.7% 1.1% Retail 23,390 11.5% 2.1% Middle Market 8,789 11.5% 8.6% Corporat
Slide 13: Improving our cost of risk compared to the system
13 13 2.7% 2.4% 3.1% 2.2% 2.4% 2.8% 2.6% 2.4% 1.9% 1.2% 71% 118% 87% 148% 134% Jan/09 Apr/09 Jul/09 Oct/09 Jan/10 Apr/10 Jul/10 Oct/10 Jan/11 Apr/11 Jul/11 Oct/11 Jan/12 Apr/12 Jul/12 Oct/12 Jan/13 Apr/13 Jul/13 Oct/13 Jan/14 Apr/14 Jul/14 Oct/14 Jan/15 Apr/15 Jul/15 Oct/15 Jan/16 Apr/16 Jul/16 Oct/
Slide 14: A better client mix through derisking
14 14 A better client mix through derisking Composition of loans to individuals 55.1% 59.4% 61.2% 64.2% 66.4% 69.2% 72.0% 74.9% 37.3% 33.6% 32.5% 30.6% 29.3% 27.8% 26.2% 23.9% 7.6% 7.1% 6.5% 5.4% 4.3% 3.1% 1.9% 1.2% High income Middle income Mass income Balance sheet
Slide 15: Better performance of evolution of consumer NPLs
15 15 Better performance of evolution of consumer NPLs Consumer NPLs 1 % of loans ; base = 100 as of Dec . 2015 58 147 167 Dec/15 Jun/16 Dec/16 Jun/17 Dec/17 Jun/18 Dec/18 Jun/19 Dec/19 Santander Chile BCI Consumer Impaired loans 2 % of loans ; base = 100 as of Dec . 2015 1. 90 days or more NPLs . 2
Slide 16: Healthy capital ratios
16 16 Healthy capital ratios BIS Ratio 10.1% 9.7% Dec-19 Mar-20 Core capital 10.2% 9.7% Dec-19 Mar-20 Tier 1 Tier 2 2.6% 12.9% 2.4% 12.7% 2.8% Proposed payout lowered to 30% to face uncertainty and facilitate potential volume growth from Covid - 19 measures. US$200Mn in sub - bonds issued in 1Q20 Ba
Slide 17: Agenda
17 17 AGENDA SAN CHILE: BUSINESS GROWTH AND RESULTS SAN CHILE: BALANCE SHEET COVID19: REGULATORY UPDATE
Slide 18: Clients: moving forward in our innovations
18 18 Clients: moving forward in our innovations Offer transactional products with access to digital economy Offer differentiated and specialized service to gain loyalty We have announced an investment plan of US$380 million for the period of 2019 - 2021 in technology, branch upgrading and new produ
Slide 19: Despite the Covid-crisis, the Bank is open for business
19 19 Despite the Covid - 19 crisis, the Bank is open for business Business growth and results Open for business Supported by digital banking 1 Branches Over 80% open 9am – 2pm Contact center: 80% open ( including home office) Tele - working +6,500 employees 95% of our central offices N ° of transac
Slide 20: Record account openings in the quarter
20 20 Dec/18 Mar/19 Jun/19 Sep/19 Dec/19 Mar/20 New Current accounts Cuenta Life Superdigital 42,312 Record account openings in the quarter During the 1Q20 we opened 115% more accounts than in 1Q19 despite the social conflict and coronavirus, reflecting the strength of our brand and digital channels
Slide 21: Reaching Top in Net Promoter Score
21 21 Reaching Top 1 in Net Promoter Score 40 41 34 23 23 18 39 39 33 23 10 9 Santander Competitor 1 Competitor 2 Competitor 3 Competitor 4 Competitor 5 Net Promoter Score (NPS) Joint Top 1 Source: Study by Activa for Santander with a scope of 60,000 surveys to our own clients and over 1,200 surveys
Slide 22: Higher inflation and lower cost of funds drives recovery in NIMs
22 22 Higher inflation and lower cost of funds drives recovery in NIMs Net interest income Ch$ bn 3M20 YoY QoQ Net interest income 388 20.3% 3.3% Average interest - earning assets 36,920 11.6% 3.1% Average loans 33,575 10.2% 7.0% Interest earning asset yield 3 6.9% +137bp - 6bp Cost of interest bear
Slide 23: Positive evolution of asset quality post social unrest
23 23 Positive evolution of asset quality post social unrest 1. Provision expense annualized divided by average interest earning assets . 2 . Adjusted cost of risk for the change in the provisioning model for SMEs for Ch$ 31 billion in 3Q19 and Ch$16 billion in additional provisions for consumer in
Slide 24: Non-interest income: Client driven
24 24 Ch$bn 70.7 68.0 71.7 76.7 74.4 38.8 49.0 64.7 54.4 22.8 1Q19 2Q19 3Q19 4Q19 1Q20 Net fee income Financial trx Fees & financial transaction Non - interest income : Client driven 109.5 117.0 136.4 Ch$ bn 3M20 YoY QoQ Client 30.4 0.5% (13.3%) Non - Client (7.6) (188.1%) (139.1%) Total 22.8 (41.2%
Slide 25: Investing to improve productivity and efficiency
25 25 180 192 189 189 191 42.5% 40.3% 39.3% 38.3% 40.6% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 0 50 100 150 200 250 300 1Q19 2Q19 3Q19 4Q19 1Q20 Expenses Efficiency Operating expenses Investing to improve productivity and efficiency Ch$bn Ch$ bn 3M20 YoY QoQ Personnel expenses 99.8 5.6% (5.7%) Ad
Slide 26: Conclusions
26 26 1Q20 results reflect strong core banking franchise x The Central Bank and CMF have launched a series of initiatives that will help to maintain liquidity and capital levels. Measures are also coming to give people relief, which will help asset quality x Strong deposit growth in the quarter. Hig
Slide 27: 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:
Banco Santander Chile — Q1 2020 Earnings Presentation on 6ix