Banco Santander-chile · BCS:BSANTANDER
Banco Santander-chile — Q1 2023 Earnings Presentation
38 slides from Banco Santander-chile's earnings presentation, Apr 28, 2023
Slide 1: Banco Santander Chile
Banco Santander Chi April 28, 2023
Slide 2: Agenda
| Agenda 01 Macro Update 02 Chile First: Strategy 2023-2026 03 Balance sheet and results 04 Conclusion 05 Annexes 2
Slide 3: Soft landing in 2023
| Soft landing in 2023 GDP growth Inflation Annual growth % Annual change in UF inflation, % 11,70 13,3 2,40 2,50 0,80 6,6 5,1 -0,25 3,2 2,7 2,7 -6,00 2019 2020 2021 2022 2023 (f) 2024 (f) 2019 2020 2021 2022 2023 (f) 2024 (f) Monetary Policy Rate Fiscal balance 11,25 % GDP %, end of period 1,1 7,75
Slide 4: Update on proposed regulations
| Update on proposed regulations Tax reform Rejected by lower house. New proposal expected. Royalty discussion taking the agenda Pension reform Proposal expected by 2H23 Constitution Vote on May 7 for constitutional assembly. Exit referendum in December 2023. Reduction of working week Reduction from
Slide 5: Agenda
| Agenda 01 Macro Update 02 Chile First: Strategy 2023-2026 03 Balance sheet and results 04 Conclusion 05 Annexes 5
Slide 6: Our purpose and mission
| Our purpose and mission Our purpose Our mission To help people and To be the best financial services company, businesses prosper acting responsibly and gaining the loyalty of our clients, shareholders, collaborators and communities Our style Our behaviors Simple, Personal and Fair T Think Customer
Slide 7: In 2026 Santander Chile aspires to be…
| In 2026 Santander Chile aspires to be… The best Financial Services company in Chile and the Santander Group for our Clients, Collaborators, Communities and Shareholders Clients Collaborator Communit Shareholder Passionate for the s y Leader in social s A committed, high Attractive and client, thei
Slide 8: Our strategic pillars
| Our strategic pillars… A Digital Bank with …Based on state of the art technology and processes and Work/Cafés… collaborators centered on the customer Specialization and added value for …with a differential value added service and offer for transactional companies… products, FX and advisory Sustain
Slide 9: Commitment with diversity in our structure
|Commitment with diversity in our structure Santander Chile, the company with More women in managerial positions, the largest number of female directors reporting directly to the CEO in the IPSA Two new areas reporting directly to general During the Ordinary Shareholders' Meeting, the management, wh
Slide 10: Our new transactional strategy through Work/Café Expresso
|Our new revolutionary transactional strategy through Work/Café Expresso Work/Café Expresso (launched 1Q23) Work/Café (launched 2016) Consolidating cash services into the Work/Café Expresso 100% digital branches with no human tellers nor cash transactions New transaction centers, removing tellers an
Slide 11: Reduction in branches and improving productivity
|Reduction in branches and improving productivity Branches Productivity per branch Productivity per employee Volume1 per branch (Ch$ million) Volume1 per employee(Ch$ million) 324 -14% 27 9 286 +22.6% +9.3% 21 7.090 69 5 241.692 78 197.190 Includes: 4 Work/Café Expresso 6.484 219 1 Work/Café Startup
Slide 12: Santander Life: rapid growth and monetization
|Santander Life: rapid growth and monetization: Over 1 million clients! Rapid monetization Products: Income generated 1. Cuenta Life: Basic current account, without credit (Ch$ million) Free for young people and the elderly. Ch$ 2,800 per 25.388 month for other clients. 18.151 +40% 2. Santander Life
Slide 13: Target markets and Santander Chile product offering
|Target markets and Santander Chile product offering Total Chilean market Santander Chile Santander Chile Current market share offering 7.7% US$10.3 bn Sight account Savings 1.8% accounts US$ 13.8 bn Current accounts 24.8% US$17.8 bn Source, CMF as of December 2022. 13
Slide 14: Más Lucas
|Más Lucas The first 100% digital on-boarding interest-bearing sight and savings account for the mass market. Launched March 2023. • No maintenance fee Products Sight account (56+national ID number) • Maximum balance and tranfer amount. Ch$ 5 million Debit account • No password- verification Savings
Slide 15: Getnet continues surpassing expectations
|Getnet continues surpassing expectations Acquiring network that uses the four-part model to operate, offering an integrated payments solution to businesses. Focus on the development of companies of different sizes and improving the customer experience. 9.4% Ch$ 556 billion 91% In monthly purchases
Slide 16: Expansion of specialized attention model for Middle-market
|Expansion of specialized attention model for our Middle-market of corporate clients In our Middle-market bank we offer specialized services to institutions (such as governments, local councils, universities) and real estate companies. Building on this experience, in 1Q23 we have launched a new spec
Slide 17: Products and services for a more sustainable world
|Products and services for a more sustainable world Santander Verde Green Green Electric car mortgages consumer financing ESG mutual Green funds SME Participation in ESG bond ESG loans to corporate placements clients: CMPC UF 7million Caja Los Social Andes UF 1.8 million Republic of Chile SSL US$ 4
Slide 18: Progressing with our Responsible Banking Goals for 2025
|Progressing with our Responsible Banking Goals for 2025 Santander Chile: 2020 2021 2022 Goal 2023 Goal 2025 GPTW Top Top Top Employer Top Employer 1. Among the best top 10 companies to work for in Chile (#) #1 Employer Employer 2. Women in managerial positions (%) 25% 28% 31.5% 29% 30% 3. Eliminate
Slide 19: Santander is a leader in ESG
|Santander is a leader in ESG Among #1 Chilean banks 78 Included in Chile, MILA, #1 Among Chilean banks puntoand Emerging Markets s #1 Among Chilean banks Among retail #3 banks on a global level 19
Slide 20: Leading our peers in NPS
|Leading our peers in NPS 96 Net Promoter Score (NPS)1 points Work Café expresso 59 60 59 58 54 56 55 57 57 56 67 51 56 points 53 53 54 53 53 51 52 51 Life 50 51 48 48 48 48 42 45 45 46 42 46 45 68 41 38 40 points 34 Contact center 30 72 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22
Slide 21: Agenda
| Agenda 01 Macro Update 02 Chile First: Strategy 2023-2026 03 Balance sheet and results 04 Conclusion 05 Annexes 21
Slide 22: Net income increasing 33.3% compared to 4Q22
|Net income increasing 33.3% compared to 4Q22. Quarterly net income attributable to Quarterly ROE shareholders Ch$mn % -42.4% 285.514 31,7% 235.743 +33.3% 25,6% 185.592 20,4% 135.683 13,3% 101.802 10,1% 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 22
Slide 23: All business segments with a significant rise
|Net income increasing 33.3% compared to 4Q22. YTD net contribution by segment YTD net contribution from segments Ch$mn Ch$mn +10.5% +30.3% 163.665 +31.1% +76.7% 148.144 384.903 111.441 109.797 85.034 233.178 62.143 Retail Middle-Market SCIB 3M22 3M23 3M22 3M23 All business segments with a significa
Slide 24: Loan growth led by consumer lending
|Loan growth led by consumer lending Ch$ bn 3M23 YoY QoQ Total loans Individuals1 23,792 10.4% 1.1% Ch$bn +6.2% +0.6% Consumer 5,341 6.3% 1.1% 38.232 38.924 38.872 39.118 Auto loans 2 895 12.7% 0.9% 36.850 Credit cards 1,564 20.9% 1.3% Mortgages 16,030 13.2% 1.9% SMEs 3,576 (14.9%) (3.1%) Retail 27,
Slide 25: Full focus on reducing funding costs
|Full focus on reducing funding costs Total deposits Ch$ bn 3M23 YoY QoQ +3.8% Demand deposits 13,807(18.2%) (2.0%) +3.7% Time deposits 14,266 40.4% 9.9% 27.040 27.619 28.289 27.065 28.072 Total Deposits 28,072 3.8% 3.7% Mutual funds1 8,522 9.7% 4.4% Bonds 9,705 17.2% 2.3% LCR2 182.3% NSFR2 113.2% M
Slide 26: YTD NIM of 2.2% as inflation decelerates
|YTD NIM of 2.2% as inflation decelerates. Client NIMS improving NIM1 Client NIM,2, Non Client NIM3 Net interest income Ch$ bn 3M23 YoY QoQ 4,5% 3,7% 4,1% 3,4% Retail 330 16.9% 17.2% 3,0% 3,6% 3,5% 3,4% Middle market 118 25.0% 18.0% 1,0% SCIB 63 85.2% 75.2% 2,2% 2,2% -0,4% Other (Non-client NII) (23
Slide 27: NIM 2023: 2.4% under current macro assumptions
|NIM 2023: 2.4% under current macro assumptions NIM 2023e Avg MPR UF inflation 2023 9,4% 10,4% 10,9% 4,1% 2,5% 2,2% 2,0% 5,1% 2,6% 2,4% 2,2% 6,1% 2,7% 2,5% 2,3% Base case: • Sensitivity to inflation ~+15bp for every +100bp (and vice-versa) • UF inflation: 5.1% • MPR ~-30bp for every +100bp in • Avg
Slide 28: Asset quality levels should gradually return to pre-pandemic levels
|Asset quality levels should gradually return to pre-pandemic levels NPLs, Impaired and coverage of NPLs NPL(1) Impaired (2) Coverage ratio (3) 186% 130% 5,8% 5,1% 2,0% 1,9% 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 Mar-23 NPLs have been normal
Slide 29: Cost of Credit at 1.2% YTD, in line with guidance
|Cost of Credit at 1.2% YTD, in line with guidance Quarterly cost of risk1,2 % Provisions for loan losses Ch$ bn 1Q23 YoY QoQ Gross provisions and (134.6) 50.3% (5.2%) write-offs 1,2% 1,2% 1,0% Recoveries 20.3 12.2% (17.7%) 0,9% 0,8% 1,2% 1,2% Provisions (114.2) 59.9% (2.6%) 1,0% 0,8% Cost of risk(Y
Slide 30: Digital platforms drives client growth and fees
|Digital platforms drives client growth and fees Total Fees and financial transactions Fees Ch$ bn 3M23 YoY QoQ Ch$bn Card fees 33.9 32.9% 12.9% +34.6% +25.5% Getnet 10.2 201.9% 2.3% Asset management 14.3 8.5% (2.3%) Collection fees 16.2 15.1% 15.6% 207.3 Insurance brokerage 15.5 42.1% 15.5% 168.5 1
Slide 31: Strong focus on cost control
|Strong focus on cost control. Costs growing below inflation Operating expenses Ch$bn Ch$ bn 3M23 YoY QoQ Personnel expenses 97.2 (0.3%) (2.7%) -1.2% Administrative expenses 77.3 8.8% (7.7%) Investment amortization 36.0 14.0% 6.6% -8.9% 255 251 Other operating expenses 6.8 (65.6%) (63.9%) 236 220 21
Slide 32: Healthy CET1 and BIS ratio levels
|Healthly CET1 and BIS ratio levels Capital ratios (BIS III phase-in) Shareholders’ equity Dividend 2023: 60% 16.8% 17.0% +23.7% 4,870,844 2022 earnings 485.191 3,9% 4,6% 3,937,900 464.977 232.489 Dividend 2022: 60% 2,5% 1,9% 30% provision of 2021 earnings dividend 8.5% Minimum CET1 3.705.411 3.920.
Slide 33: Agenda
| Agenda 01 Macro Update 02 Chile First: Strategy 2023-2026 03 Balance sheet and results 04 Conclusion 05 Annexes 33
Slide 34: Guidance for 2023
|Guidance for 2023 › Macro assumptions: GDP: -0.25% / UF inflation: 5.1% / Avg. MPR: 10.4% › Mid-single digit loan growth › Business segment results & margins growing strongly › Tighter margins due to delay in reduction of MPR. NIM of ~2.4% with robust client NIMs › Non-NII growing ~20% led by great
Slide 35: Agenda
| Agenda 01 Macro Update 02 Business segments 03 Balance sheet and results 04 Conclusion 05 Annexes 35
Slide 36: Balance sheet
Mar-23/ Mar-23 Dec-22 Dec-22 |Balance sheet LIABILITIES Cash items in process of being cleared Ch$ Million 791.211 746.872 % Chg. 5,9% Financial liabilities for trading at fair value through 11.126.412 11.319.320 (1,7%) earnings Financial derivative contracts 11.126.412 11.319.320 (1,7%) Mar-23/ Mar
Slide 37: Income Statement
|Income Statement 1Q23 4Q22 1Q22 1Q23/1Q22 1Q23/4Q22 Ch$ Million % Chg. Interest income 923,500 892,009 515,447 79.2% 3.5% Interest expense (748,155) (761,916) (293,639) 154.8% (1.8%) Net interest income 175,345 130,093 221,808 (20.9%) 34.8% Readjustment income 148,464 215,858 235,295 (36.9%) (31.2%
Slide 38: Indicators
|Indicators Profitability and efficiency Mar-23 Mar-22 Variation bp Net interest margin (NIM) 1 2.2% 3.7% (147) Efficiency ratio2 44.4% 37.8% 665 Return on avg. equity3 13.3% 25.6% (1,233) Return on avg. assets4 0.8% 1.5% (74) Return on RWA5 1.4% 2.6% (115) Asset quality ratios (%) Mar-23 Mar-22 Var
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