Banco Santander Chile. Results 2Q13. Chile. Santiago, July 30, 2013

Transcription

1 0 Banco Santander Results 2Q13 Santiago, July 30, 2013

2 Important information 1 Banco Santander caution that this presentation contains forward looking statements within the meaning of the US Private Securities Litigation Reform Act of These forward looking statements are found in various places throughout this presentation and include, without limitation, statements concerning our future business development and economic performance. While these forward looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: (1) general market, macro-economic, governmental and regulatory trends; (2) movements in local and international securities markets, currency exchange rates, and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. The risk factors and other key factors that we have indicated in our past and future filings and reports, including those with the Securities and Exchange Commission of the United States of America, could adversely affect our business and financial performance. Note: the information contained in this presentation is not audited. Nevertheless, the consolidated accounts are prepared on the basis of generally accepted accounting principles. All figures presented are in nominal terms. Historical figures are not adjusted by inflation. Historical figures have been restated in accordance with the new accounting standards adopted by an banks in Please note that this information is provided for comparative purposes only and that this restatement may undergo further changes during the year and, therefore, historical figures, including financial ratios, presented in this report may not be entirely comparable to future figures presented by the Bank.

3 Agenda 2 Macro-economic environment and financial system Strategy and business Results Annexes

4 Macro-economic environment 3 GDP (YoY growth, %) Current Account Deficit (% del GDP) (e) 2014 (e) (e) 2014 (e) Investment (YoY growth, %) Private Consumption (YoY growth, %) (e) 2014 (e) (e) 2014 (e) Good prospects for 2013 and 2014, but adjusted downwards Source: Banco Central de. (e): Estimates Santander

5 Macro-economic environment 4 Annual inflation(%) Unemployment (Annual average, %) (e) 2014 (e) (e) 2014 (e) Central Bank Reference rate(%) Avg. Exchange Rates(Ch$ / US$) (e) 2014 (e) (e) 2014 (e) The Central bank should start cutting interest rates in the 2H13 Source: Banco Central de. (e): Estimates Santander

6 Financial system: Capital and liquidity 5 Healthy financial system BIS ratio (%) and stock internal savings (US$ billions) BIS Ratio (%) Ample Access to Liquidity (US$ billions) Central Bank reserves Central Gov. reserves Insurance Companies Mar-13 Stock of internal savings* is equivalent to 1.8 x GDP Pension Funds (**) 159 Liquidity Deposits * Total savings in bank deposits, pension funds, sovereign funds plus Central Bank reserves ** Pension funds excludes deposits in Banks. Source: Superintendencias de Bancos and Fondos de Pensiones, Ministerio de Hacienda and Banco Central de

7 Financial System: Growth of Deposits 6 Financial System with stable growth of customer funds Financial system savings, US$ billions* Total Customer Funds Time Deposits Jun-11 Dec-11 Jun-12 Dec-12 May-13 Demand Deposits Jun-11 Dec-11 Jun-12 Dec-12 May-13 Mutual Funds Jun-11 Dec-11 Jun-12 Dec-12 May-13 Jun-11 Dec-11 Jun-12 Dec-12 May-13 * At constant exchange rate as of June Source: Superintendencia de Bancos de. Excludes Corpbanca Colombia Volume YoY Variation, %

8 Financial System: Loan Growth 7 Loan growth in line with GDP growth Financial system savings, US$ billions* % Total Loans % 16.1% 14.2% 12.2% Loans to Companies % 18.2% 15.8% 12.3% 13.0% Jun-11 Dec-11 Jun-12 Dec-12 May-13 Consumer Loans % 18.0% 14.8% 12.5% 11.8% Jun-11 Dec-11 Jun-12 Dec-12 May-13 Residential Mortgages % 12.3% 11.9% 11.2% 10.5% Jun-11 Dec-11 Jun-12 Dec-12 May-13 Jun-11 Dec-11 Jun-12 Dec-12 May-13 Volumen YoY Variation, % * At constant exchange rate as of June Source: Superintendencia de Bancos de. Excludes Corpbanca Colombia

9 Financial System: Results 8 US$mn Consolidated Profit 3,733 3,903 +5% US$mn Operating Expenses 2,539 2, % May-12 May-13 May-12 May-13 US$mn Net Loan Loss Provisions US$mn Net Profit 1,023 1, % -7% May-12 May-13 May-12 May-13 System s results fall due to higher cost and provisions * At constant exchange rate in June Source: Superintendencia de Bancos de. Excludes Corpbanca Colombia

10 Agenda 9 Macro-economic environment and financial system Strategy and business Results Annexes

11 Our Franchise 10 Santander : The leading franchise in the country June 2013 US$ billions Market Share* Rank Loans: ,9% 2 Loans to individuals ,2% 1 Deposits: ,8% 3 Capital and reserves ,3% 1 Net Income: 378 millions 21,4% 2 Attributable Net Profit 263 millions Clients: 3.3 millions 24,7%** 1 Branches: ,2% 2 Checking Accounts 772 ths 24,7% 1 ATM Machines 1,972 24,6% 1 * As of may 2013 or latest available information. Source: Superintendencia de Bancos de ** Marketshare in terms of clients with checking accounts

12 Strategy 11 3 targets for healthy growth with high profitability I. Transforming our Commercial Banking Strategy since II. improving relationships with customers and quality of service... III. and managing risks conservatively Project Transformation Healthy growth / high and stable ROEs

13 Strategy: 12 I. Transforming our Commercial Banking Strategy Increase % of pre-approved loans Pre-Approved Sales % of total consumer loans 35.0% 46.0% Q13 Provisions: Pre-approved vs 1*1 Cost of Credit(%) consumer 1.7% 0.9% 1*1 pre-approved Increase alternative sales channels % alternative sales channels % of consumer sales 20.0% 36.0% Cost per sale % of consumer sales 9.0% 5.0% Q13 Branch Alt. Channel Increase business with High income segment Number of specialized branches(% total) Q11 +22% 2Q13 Loans (YoY%) 10.8% Higher income -3.7% Mid to lower income

14 Strategy 13 I. Transforming our Commercial Banking Strategy Launching new model of service for high incomes Value-added products o Select Debit Card o Black Credit Card o Select Mutual Funds o Investor Account o Insurance with Savings Select Network Select Office Increase business with High income segment Differentiated Channels o Web Select o Vox Select o Mobile o Budget Manager Investment Advice 13

15 Strategy 14 II. Improving relationships with customers and quality of service SBIF: Complaints per 10,000 debtors* Time of response* 6.1 Number of days BSAC Bank 1 Bank 2 Bank 3 SERNAC: Complaints per debtors* BSAC Bank 1 Bank 2 Bank 3 Avg Satisfaction of use of different channels** BSAC Bank 1 Bank 2 Bank 3 Branches Internet Telephone VOX * Source: SBIF and SERNAC Financiero Dec ** Percentage rate service at good or very good

16 15.0% 14.0% 13.0% 12.0% 11.0% 10.0% 9.0% Strategy 15 III. Managing risks conservatively Impaired consumer loans* (%) Consumer loan loss recoveries (US$mn) % % 10.4 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 2T12 3T12 4T12 1T13 2T13 Consumer loan loss recoveries up 103% YoY in 2Q13 * Impaired consumer loans includes renegotiated loans and NPLs. Source: SBIF 15

17 Business Strong growth in targeted segments: 13.5% compared with 8.5% of the total portfolio 16 US$billions* Rest Targeted segments* Total Loans % US$billions 1H 13 YoY QoQ Individuals % 1.8% High income % 3.7% Middle/Low Income % -0.6% SME s % 3.0% Middle Market % 4.9% Institutional % 4.3% Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 (*) High Incomes, SME s, middle markets Corporate % 7.0% Total % 4.1% * At constant exchange rate as of June 2013

18 Business 17 Positive evolution of the deposit mix US$billions* Rest Client Deposits* Deposits % US$billions 1H 13 YoY QoQ Demand % 4.6% Time % 3.0% Total deposits % 3.4% Deposit Structure ( ) Stable Institutional deposits: 4% Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 (*) Deposits from non-institutional source Client deposits: 83% Others13% * At constant exchange rate as of June 2013 Core Deposits up 16.4% in 12 months

19 Business: Market Share 18 Focus on selective loan growth Evolution of market share (%) Share May 13, % Var. Dec. 12 May 13 (pb) Loans Individuals Companies* Total deposits Market share drop is explained by slower growth in low income and Global Banking and Markets. In the remaining segments the Bank outgrows the system * Includes government and large, medium and small. Source: Superintendencia de Bancos de, excludes Corpbanca Colombia

20 Agenda 19 Macro-economic environment and financial system Strategy and business Results Annexes

21 Results: Net Interest Income 20 Net Interest Income Loan Spread, % US$ millions* Commercial Bank Total Loans 2Q12 3Q12 4Q12 1Q13 2Q13 Deposit Spread, % 2Q12 3Q12 4Q12 1Q13 2Q13 Inflation (%) Commercial Bank Total Deposits 2Q12 3Q12 4Q12 1Q13 2Q13 NIM should rebound with the expected rise in inflation and the fall in rates * At constant exchange rate as of June 2013

22 Results: Fees 21 Fees US$ millions* Q12 3Q12 4Q12 1Q13 2Q13 US$ millions* Total Fees 1H13 1H12 % Var. 13/12* Credit Cards % Insurance % Asset Management % Transactional banking % Foreign trade % Cash Management % Brokerage % Other Fees % % Insurance fees affected by new bidding process. Credit cards and Checking accounts fees affected by regulations that limit price increases * At constant exchange rate as of June 2013

23 Results: Gross Income 22 Gross Income US$ millions* US$ millions* 1H13 1H12 % Var. 13/12* Net interest income 1,073 1, % Fees % Financial transactions % Other Income % 2Q12 3Q12 4Q12 1Q13 2Q13 Gross Income 1,466 1, % Gross income grows 3.1% 2Q vs 1Q. Declines in long-term rates boosted the gain in financial transactions, which partially compensated the fall in Net Interest Income due to lower inflation * At constant exchange rate as of June 2013

24 Results: Costs 23 Costs US$ millions* US$ millions* 1H13 1H12 % Var. 13/12* Adm. expenses % Depreciation % Operating costs % 2Q12 3Q12 4Q12 1Q13 2Q13 Network 1H 12 1H 13 % Branches Select Banefe Investing in better service for highincome Slowing cost growth ,8% We remain leaders in efficiency Employees 12,263 12, * At constant exchange rate as of June 2013

25 Results: Provisions and Risk 24 Net Loan-loss provisions Net op income after provisions US$ millions* 2.8% 3.1% 3.0% 3.0% 3.2% US$ millions* 1H13 1H12 % Var. 13/12* Net operating income % Loan loss provisions % Net op. income after prov % Coverage 50% 64% NPL Ratio 5.8% 4.7% 2Q12 3Q12 4Q12 1Q13 2Q13 Net loan-loss prov. Risk Premium * At constant exchange rate as of June 2013 Slight decline in provision expenses in 2Q13 due to stricter admissions and credit risk policies.

26 Results: Net income 25 Net Income Consolidated profit US$ millions* US$ millions* 1H 13 1H 12 % Var. 13/ Profit before taxes Income taxes Net Income Attributable Net Profit T12 3T12 4T12 1T13 2T13 Effective Tax Rate, % -13.8% 12.8% +100pb Inflaiton (%) Evolution of profits before taxes affected by lower inflation, which should start to normalize in second half of 2013 * At constant exchange rate as of June 2013

27 Results: Ratios 26 ROE reaches 16.0% and Efficiency of 41.0% Accumulated financial ratios, % ROE Efficiency* H12 1H13 1H12 1H13 Fees / Costs H12 1H13 * Includes amortization

28 27 Conclusions

29 Conclusion 28 : Economy on track, but a slight slowdown is expected in 2H13 and Financial system continues to grow well, but results fall 6.6% in May 2013 due to higher provisions and regulations Results 2Q13 affected mainly by lower inflation MIN should rebound with rising inflation and low rates Strong loan growth in targeted segments Improving deposit mix Stabilizing credit risk Transformation Project has been evolving according to plan, which will continue to boost growth and efficiency We maintain our outlook unchanged for 2013

30 Agenda 29 Macro-economic Environment and Financial System Strategy and business Results Annexes

31 30 Annexes Balance Income Statement Quarterly income statements

32 Balance 31 US$ million. Constant currency* Variation Amount % Loans and credits* 39,494 36,411 3, Trading portfolio (w/o loans) 1,930 2,214 (285) (12.9) Available-for-sale financial assets 3,108 3,583 (475) (13.3) Due from credit institutions* 4,099 3, Intangible assets and property and equipment (4) (1.0) Other assets 3,493 5,365 (1,872) (34.9) Total assets/liabilities & shareholders' equity 52,571 51,529 1, Customer deposits* 28,830 29,089 (260) (0.9) Marketable debt securities* 7,911 6, Subordinated debt 1,364 1,696 (331) (19.5) Insurance liabilities Due to credit institutions* 6,159 6,229 (70) (1.1) Other liabilities 5,270 4, Shareholders' equity** 3,037 2, Off-balance-sheet funds 7,464 6,419 1, Mutual funds 5,710 6,419 (710) (11.1) Pension funds Managed portfolios 1,755 1,755 Customer funds under management 45,570 44,141 1, * As of * Includes all stock of concept classified in the balance sheet ** Not including profit of the year

33 Income Statement 32 US$ million. Constant currency* Variation H1 13 H1 12 Amount % Net interest income 1,073 1,130 (57) (5.0) Net fees (31) (10.5) Gains (losses) on financial transactions Other operating income** Gross income 1,466 1,515 (49) (3.2) Operating expenses (633) (599) (34) 5.7 General administrative expenses (560) (536) (23) 4.3 Personnel (346) (336) (10) 3.0 Other general administrative expenses (214) (200) (13) 6.6 Depreciation and amortisation (74) (63) (11) 17.4 Net operating income (83) (9.1) Net loan-loss provisions (397) (327) (69) 21.1 Other income 3 (19) 22 Profit before taxes (130) (22.9) Tax on profit (61) (73) 12 (16.7) Profit from continuing operations (118) (23.8) Net profit from discontinued operations Consolidated profit (118) (23.8) Minority interests (40) (25.7) Attributable profit to the Group (78) (22.9) * As of Jan-Jun'13 ** Including dividends, income from equity-accounted method and other operating income/expenses

34 Quarterly statements of income 33 US$ million. Constant currency* Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Net interest income Net fees Gains (losses) on financial transactions Other operating income** (1) 9 7 Gross income Operating expenses (287) (312) (306) (313) (305) (328) General administrative expenses (258) (279) (274) (277) (267) (293) Personnel (158) (178) (172) (174) (164) (182) Other general administrative expenses (100) (101) (102) (103) (103) (111) Depreciation and amortisation (30) (33) (33) (37) (38) (36) Net operating income Net loan-loss provisions (167) (160) (218) (204) (202) (195) Other income (6) (14) 19 8 (2) 4 Profit before taxes Tax on profit (40) (33) (29) (30) (20) (40) Profit from continuing operations Net profit from discontinued operations Consolidated profit Minority interests Attributable profit to the Group * As of Jan-Jun'13 ** Including dividends, income from equity-accounted method and other operating income/expenses

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