Banco Santander Chile Announces Fourth Quarter 2012 Earnings

2013-02-04 22:07:25 -

Santiago, Chile, February 4, 2013. Banco Santander Chile (NYSE: BSAC; SSE:
Bsantander) announced today its unaudited results for the fourth quarter and
full-year 2012. These results are reported on a consolidated basis in accordance
with Chilean GAAP.

4Q12 net income rises 124.3% QoQ and 11.0% YoY.

In 4Q12, Net income attributable to shareholders totaled Ch$113,402 million
(Ch$0.60 per share and US$0.50/ADR). Compared to 3Q12 (from now on QoQ), net
income increased 124.3%. Compared to 4Q11 (from now on YoY) net income increased
11.0%. During the quarter, the Bank saw an important QoQ improvement in
profitability as loan growth accelerated, the funding mix improved, margins rose
in line with higher inflation and provision expenses declined, following the
non-recurring charges recognized in 3Q12.

ROE reaches 21.6% in 4Q12

ROAE in the quarter reached 21.6%. Core capital reached 10.7% as of December
31, 2012 and the Bank's BIS ratio reached 13.7% at the same date.

Positive evolution of margins in the quarter

In 4Q12, Net interest income increased 18.5% QoQ. The Net interest margin (NIM)
in 4Q12 reached 5.5% compared to 4.7% in 3Q12 and 5.3% in 4Q11.  Inflation
rebounded from -0.16% in 3Q12 to 1.11% in 4Q12 and this drove the strong QoQ
rise in net interest income. Compared to 4Q12 net interest income increased
7.2% in line with loan growth.

Loan growth accelerating in segments the Bank has targeted for growth

In 4Q12, total loans increased 2.0% QoQ. In the quarter, loan growth continued
to accelerate in the markets the Bank is targeting the most: high-income
individuals, SMEs and middle market of companies. Loans in these combined
markets increased 2.9% QoQ and 9.6% YoY. Loans to high-income individuals
increased 2.1% QoQ. Lending to SMEs (defined as companies that sell less than
Ch$1,200 million per year) expanded 3.3% QoQ, reflecting the Bank's consistent
focus on this segment. In the quarter, the Bank also focused its loan growth in
the middle-market companies segment (companies with annual sales between
Ch$1,200 million and Ch$10,000 million per year), which increased 3.9% QoQ.

Solid growth of non-interest bearing demand deposits

Total deposits were flat QoQ and grew 5.6% YoY. In the quarter and throughout
2012, the Bank has focused on increasing its core deposits (demand deposits and
time deposits from non-institutional sources), while reducing dependence on
institutional deposits that tend to be more expensive. As a result, at year-end
2012 total non-interest bearing demand deposits increased 8.0% QoQ and 12.6%
YoY. This has improved the Bank's funding mix, as core deposits tend to be
cheaper and more stable than other sources of funding.

Provision expense decreases 24.3% QoQ

Net provision for loan losses in 4Q12 decreased 24.3% QoQ and increased 4.4%
YoY. Net provision expense in consumer loans decreased 24.4% QoQ and increased
6.3% YoY. In 3Q12, the Bank recalibrated the consumer loan-provisioning model
that increased the minimum provision set aside for renegotiated consumer loans.
Excluding this effect, the QoQ decline in provision expense was 4.6% in 4Q12.

Cost growth moderates as key projects advance

Operating expenses in 4Q12 increased 4.0% QoQ and 7.0% YoY as the Bank continued
with its projects of investing in a new Client Relationship Management system
and the Transformation Initiatives aimed at enhancing productivity in retail
banking. The efficiency ratio reached 40.0% in 4Q12 compared to 42.4% in 3Q12
and 38.5% in 4Q11. Operating expense growth has been decelerating in recent
quarters as headcount has remained stable and the different productivity
initiatives implemented since 2011 are starting to produce results.

In 2012, Santander Chile's ROE reached 18.9% with an efficiency ratio of 40.0%

In 2012 (12M11), Net income attributable to shareholders[1] totaled Ch$387,967
million (Ch$2.06 per share and US$1.72/ADR[2]) and decreased 10.8% compared to
net income achieved in 2011. ROE reached 18.9% in 12M11, among the highest
returns in the Chilean financial system. The Efficiency ratio in 12M12 reached
40.0%, one of the best in Chile.

Robert Moreno
Manager, Investor Relations Department
Banco Santander Chile
Bandera 140 Piso 19
Santiago, Chile
Tel: (562) 320-8284
Fax: (562) 671-6554

[1] The results in this report are unaudited and are reported according to
Chilean Bank GAAP.
[2] Earnings per ADR was calculated using the Observed Exchange Rate of Ch$478.6
per US$ as of December 31, 2012.

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Source: Banco Santander-Chile via Thomson Reuters ONE

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