Banco Santander Chile. Results 3Q13. Chile. Santiago, October 24, 2013

Transcription

1 0 Banco Santander Results 3Q13 Santiago, October 24, 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 (% of 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 continue cutting interest rates in 4Q13 Source: Banco Central de. (e): Estimates Santander

6 Financial system: Capital and liquidity 5 Healthy financial system with high levels of liquidity BIS Ratio (%) Ample Access to Liquidity (US$ billions) Central Bank reserves Sovereign funds Insurance Companies Aug-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: Customer funds 6 Financial system with stable growth of customer funds Financial system s customer funds, US$ billions* Total Customer Funds Time Deposits Sep-11 Mar-12 Sep-12 Mar-13 Aug-13 Demand Deposits Sep-11 Mar-12 Sep-12 Mar-13 Aug-13 Mutual Funds Sep-11 Mar-12 Sep-12 Mar-13 Aug-13 Sep-11 Mar-12 Sep-12 Mar-13 Aug-13 * At constant exchange rate as of September Source: Superintendencia de Bancos de. Excludes Corpbanca Colombia Volume YoY Variation, %

8 Financial system: Loans 7 Loan growth in line with GDP growth Financial system loans, US$ billions* Total Loans % 16.0% 16.4% % 11.5% Loans to Companies % 16.0% 12.5% 11.2% 11.5% Sep-11 Mar-12 Sep-12 Mar-13 Aug-13 Consumer Loans % 16.2% 13.4% 11.1% 11.9% Sep-11 Mar-12 Sep-12 Mar-13 Aug-13 Residential Mortgages % 12.8% 11.1% 10.4% 11.0% Sep-11 Mar-12 Sep-12 Mar-13 Aug-13 Sep-11 Mar-12 Sep-12 Mar-13 Aug-13 Volumen YoY Variation, % * At constant exchange rate as of September Source: Superintendencia de Bancos de. Excludes Corpbanca Colombia

9 Agenda 8 Macro-economic environment and financial system Strategy and business Results Annexes

10 Our Franchise 9 Santander : The leading franchise in the country Sept US$ billions Market Share* Rank Loans: % 2 Loans to individuals % 1 Deposits: % 3 Capital and reserves % 1 Net Income: 598 millions 21.7% 2 Attributable Net Profit 416 millions Clients: 3.4 millions 24.7% 1 Branches: % 2 Checking Accounts 821 ths 24.7% 1 ATM Machines 1, % 1 Source: Superintendencia de Bancos de * Market share as of August 2013

11 Strategy 10 3 targets to grow with higher returns I. Transforming our Commercial Bank... II. improving relationships with customers and quality of service... III. and managing risks conservatively Project Transformation Balanced growth / sustainable ROEs

12 Strategy 11 I. Transforming our Commercial Banking: Upper Income Segment Loans (US$bn) Deposits (US$bn) % % 10.2 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Santander Select attention model for high income segment powers growth

13 Strategy 12 I. Transforming our Commercial Banking: Low income segment Average monthly net sales (Ch$mn) N of low income branches 25, , ,730 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Monthly average write-offs (Ch$mm) Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Expected loss new loans originated (%) 8,233 8,960 5, % 1.9% 1.9% Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Strategy to increase profitability of mid-lower income segment is yielding positive results

14 Strategy a II. Improving relationship with clients and quality of service 13 Total Clients (ths.) Higher income segment (ths.) 3, ,327 3,327 3, Customer growth driven by improvements in client service

15 Strategy 14 III. Managing risks conservatively Non-performing consumer loans* (% of total) Recoveries in consumer loans(us$mn) 3.6% +80.7% % NPLs Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 9M12 9M13 Risk reduction in consumer loans reflects the loan portfolio mix change, improvements in risk models and greater focus on recoveries * 90 days non-performing according to Superintendency of Banks definitions 14

16 Business 15 Strong growth in targeted segments US$billions* Total Loans US$billions Sept. 13 YoY QoQ Individuals % 2.5% High income % 3.7% Middle/Low Income % 0.9% Rest Targeted segments* +14.5% SME s % 3.4% Middle Market % 2.1% Institutional % -6.6% Sep-13 Dec-13 Mar-13 Jun-13 Sep-13 (*) High Incomes, SME s, middle markets Corporate % -0.1% Total % 1.8% * At constant exchange rate as of September 2013

17 Business 16 Positive evolution of the deposit mix US$billions* Rest Client Deposits* Deposits % US$billions Sept. 13 YoY QoQ Demand % 1.2% Time % 3.1% Total deposits % 3.9% Deposit Structure ( ) Stable Institutional deposits: 3% Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 (*) Deposits from non-institutional source Client deposits: 85% Others12% * At constant exchange rate as of September 2013 Core Deposits up 18.0% in 12 months

18 Business: Market Share 17 Focus on selective loan growth and core deposits Evolution of market share (%) Share Aug. 13 (%) Var. Dec. 12 Aug. 13 (bp) Loans Individuals Mortgages Companies* Total deposits Market share drop is explained by slower growth in low income and mortgage. In the remaining segments, the Bank outgrows the system * Includes government and large, medium and small companies. Source: Superintendencia de Bancos de, excludes Corpbanca Colombia

19 Agenda 18 Macro-economic environment and financial system Strategy and business Results Annexes

20 Results: Net Interest Income 19 Net Interest Income Loan Spread, % US$ millions* Commercial Bank Total Loans 3Q12 4Q12 1Q13 2Q13 3Q13 Deposit Spread, % 3Q12 4Q12 1Q13 2Q13 3Q13 Inflation (%) Commercial Bank Total Deposits 3Q12 4Q12 1Q13 2Q13 3Q13 Net interest income rebounds with positive growth in targeted segments and higher inflation in the quarter * At constant exchange rate as of September 2013

21 Results: Fees 20 US$ millions* Fees US$ millions* 9M13 9M12 % Var. 13/12* Q12 4Q12 1Q13 2Q13 3Q13 Credit Cards % Insurance % Asset Management % Transactional banking % Foreign trade % Cash Management % Brokerage % Other Fees % Total Fees % Fees negatively affected by new regulations that eliminate or limit fee charges * At constant exchange rate as of September 2013

22 Results: Gross Income 21 Gross Income US$ millions* US$ millions* 9M13 9M12 % Var. 13/12* Net interest income 1,664 1, % Fees % Financial transactions % Other Income % 3Q12 4Q12 1Q13 2Q13 3Q13 Gross Income 2,228 2, % Gross income rises 8.3% 3Q13 vs 2Q13 * At constant exchange rate as of September 2013

23 Results: Costs 22 Costs US$ millions* US$ millions* 9M13 9M12 % Var. 13/12* Adm. expenses Depreciation % % Operating costs % 3Q12 4Q12 1Q13 2Q13 3Q13 Network 3Q 12 3Q 13 % Branches % --Traditional % --Select % --Banefe % Employees 12,339 12, % Investing in better service for highincome Slowing cost growth ,8% We remain leaders in efficiency * At constant exchange rate as of September 2013

24 Results: Provisions and Risk 23 Net Loan-loss provisions Net op income after provisions US$ millions* 3.1 3, US$ millions* 9M13 9M12 % Var. 13/12* Net operating income Loan loss provisions 1,285 1, % ,2% Net op. income after prov % Coverage NPL Ratio 50% 61% 6.0% 5.0% 3Q12 4Q12 1Q13 2Q13 3Q13 Net loan-loss prov. Risk Premium Quarterly rise in provision expense is mainly due to one-time events in the Middle-Market. The risk premium remains stable * At constant exchange rate as of September 2013

25 Results: Net income 24 Consolidated profit US$ millions* US$ millions* 9M13 9M 12 % Var. 13/ Profit before taxes % Income taxes % Consolidated profit % Attributable Net Profit % 3Q12 4Q12 1Q13 2Q13 3Q13 Effective Tax Rate, % 14.0% 13.2% Inflación (%) Consolidated profit increases 24.7% 3Q13 vs 2Q13 * At constant exchange rate as of September 2013

26 Results: Ratios 25 ROE reaches 17.4% and Efficiency 42.3% Year-to-date financial ratios, % ROE Efficiency* M12 9M13 9M12 9M13 Fees / Costs * Includes amortization 9M12 9M13

27 26 Conclusions

28 Conclusion 27 : Economy on track, but a slight slowdown is expected in Financial system continues to show healthy growth rates and results are rebounding despite higher provisions and costs 3Q13 Consolidated profits increase 24.7% compared to 2Q13 Net interest income rebounds with higher growth in targeted segments and greater inflation Improving deposit mix with strong core deposit growth Important improvements in consumer loan asset quality. Risk premium remains stable despite one-time events in the Middle-market segment Fees still affected by regulatory changes. Client base is beginning to grow Transformation Project has been evolving according to plan, which will continue to boost growth and efficiency Medium-term outlook for Santander continues to improve

29 Agenda 28 Macro-economic Environment and Financial System Strategy and business Results Annexes

30 29 Annexes Balance Income Statement Quarterly income statements

31 Balance 30

32 Income Statement US$ million. Constant currency* Variation 9M 13 9M 12 Amount % 31 Net interest income 1,664 1, Net fees (49) (11.2) Gains (losses) on financial transactions Other operating income** Gross income 2,228 2, Operating expenses (942) (888) (55) 6.2 General administrative expenses (832) (794) (38) 4.8 Personnel (515) (498) (17) 3.4 Other general administrative expenses (317) (297) (21) 7.0 Depreciation and amortisation (110) (93) (17) 18.0 Net operating income 1,285 1,293 (7) (0.6) Net loan-loss provisions (600) (534) (65) 12.2 Other income 10 (1) 11 Profit before taxes (61) (8.1) Tax on profit (97) (100) 3 (2.6) Profit from continuing operations (59) (9.0) Net profit from discontinued operations Consolidated profit (59) (9.0) Minority interests (18) (9.0) Attributable profit to the Group (41) (8.9) * As of YtD'13 ** Including dividends, income from equity-accounted method and other operating income/expenses

33 Quarterly statements of income 32 US$ million. Constant currency* 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 Net interest income Net fees Gains (losses) on financial transactions Other operating income** (1) Gross income Operating expenses (282) (306) (300) (307) (299) (322) (322) General administrative expenses (253) (273) (268) (271) (262) (287) (283) Personnel (155) (174) (168) (170) (161) (178) (176) Other general administrative expenses (98) (99) (100) (101) (101) (108) (108) Depreciation and amortisation (29) (33) (32) (36) (37) (35) (38) Net operating income Net loan-loss provisions (164) (157) (213) (200) (198) (191) (211) Other income (6) (13) 18 8 (1) 4 7 Profit before taxes Tax on profit (39) (32) (29) (30) (20) (39) (38) Profit from continuing operations Net profit from discontinued operations Consolidated profit Minority interests Attributable profit to the Group * As of YtD'13 ** Including dividends, income from equity-accounted method and other operating income/expenses

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