Banco Santander-Chile(BSAC) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - As of September 2025, the bank generated a net income of CLP 798 billion, representing a 37% year-over-year increase, resulting in a return on equity (ROE) of 24% and an efficiency ratio of 35.9% [11][12] - Net interest income increased by 17% year-over-year, with a net interest margin (NIM) maintained at 4% [12][13] - The recurrence ratio reached 62% year-to-date, indicating that over 60% of expenses were financed by fee generation [15][16] Business Line Data and Key Metrics Changes - Fee income rose by 8%, while financial transactions increased by 19% [11] - Mutual funds grew by 15%, and credit card transactions saw a 12% annual increase [14][15] - The composition of income revenue streams shifted, with fee generation increasing from 15% to 20% of total revenues [10] Market Data and Key Metrics Changes - The Chilean economy showed positive indicators, with GDP growth estimated at around 2% year-on-year in Q3 2025 [3] - Inflation remains above the 3% target, but is expected to converge below 4% by year-end [4][5] - The Central Bank of Chile maintained a policy rate at 4.75%, with expectations for a reduction to 4.5% by year-end [4][5] Company Strategy and Development Direction - The bank aims to become a digital bank with a focus on attracting and activating new clients, targeting 5 million clients by 2026 [8] - The strategy includes leveraging artificial intelligence and process automation to improve efficiency, with a target efficiency ratio in the mid-30s [8][9] - The bank is focused on broadening transactional and non-credit fee-generating services, aiming for double-digit growth in fee generation [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming elections potentially leading to a more favorable business environment, supporting mid-single-digit loan growth [20] - The bank expects ROE to finish the year slightly above 23% and anticipates GDP growth of 2% for next year [19][20] - Management acknowledged external macroeconomic uncertainties, particularly related to international trade and commodity prices [24] Other Important Information - The bank's CET1 ratio reached 10.8%, significantly above the minimum requirement [17][18] - The bank has been recognized for its performance, including awards for best bank in Chile and improvements in sustainability rankings [12] Q&A Session Summary Question: What are the main upside and downside risks for your ROE estimate for 2026? - Management indicated that potential political changes could positively impact growth, but current guidance does not factor in these benefits [23][24] Question: Can you provide further color on loan growth expectations by segment for 2026? - Management expects homogeneous growth across segments, with consumer loans growing healthily and mortgage portfolios benefiting from government support [32][33] Question: What is the current status of the interchange fee and potential impacts? - The current interchange fee for credit is 1.14 and for debit is 0.5, with a potential second cut under review that could impact fees by CLP 20 billion-CLP 25 billion if implemented [39][41]