25 th January 2017 CHILE. January December 2016

Transcription

1 25 th January 2017 CHILE January December 2016

2 Disclaimer Banco Santander Chile 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 results information contained in this presentation has been prepared according to Spanish accounting criteria and regulation in a manner applicable to all subsidiaries of the Santander Group and as a result it may differ from the one disclosed locally by Banco Santander Chile. 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. 2

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

4 Macro-economic environment GDP should grow 2.0% in 2017 Annual GDP Growth (%, real) Central Bank monetary policy (%) (e) 2017 (e) 2018 (e) (e) 2018 (e) Inflation (annual change UF, %) Average exchange (Ch$ / EUR) (e) 2018 (e) (e) 2018 (e) Source: Central Bank of Chile and Santander estimates 4

5 Macro-economic environment Internal demand and most non-mining related sectors growing above 2% Internal Demand (YoY growth, %) Growth by sectors (YoY growth, %) Sector e 2017e Communications Agro / Fishing Public adm (e) 2017 (e) 2018 (e) Unemployment (yearly average, %) Transportation Services Construction Manufacturing Commerce Utilities GDP ex-mining Mining (e) 2017 (e) 2018 (e) GDP Source: Central Bank of Chile and Santander estimates 5

6 Financial system: Loan and deposit growth Source: Source: Superintendency of Banks of Chile. Excludes assets held abroad by Chilean banks (1) Includes demand deposits, time deposits and mutual funds Financial system outstripping GDP growth due to low exposure to the mining sector Total loans (Constant bn) YoY (%) % 7.9% 7.4% 4.2% 5.6% Dec-15 Mar-16 Jun-16 Sep-16 Nov-16 Mortgage lending leading deceleration after extraordinary growth in 2015 Growth of retail banking and non-copper sectors drives loan growth Total customer funds 1 (Constant bn) YoY (%) 4.8% 5.8% 4.9% 1.6% 5.4% Customer funds growing in line with loan growth and rebounding in 4Q16 Dec-15 Mar-16 Jun-16 Sep-16 Nov-16 6

7 Agenda Macro-economic environment and financial system Strategy and business Results Appendix

8 Our Franchise Santander Chile is the nation s leading bank Business and Results Constant 12M16 Var. YoY Customer Loans ( bn) % Deposits ( bn) % Consolidated profit ( MM) % Attributable profit ( MM) % Network and Customers 12M16 Mkt. share 1 Total customers (MM) % 2 Branches (#) % ATMs (#) 1, % Market Share 1 Nov 16 Loans 19.5% Deposits 18.7% Checking accounts 22.0% Bank credit cards % Source: Superintendency of Banks of Chile (1) As of November 2016 or the latest figure available excluding assets and deposits held abroad. (2) Market share in terms of checking account holders (3) Market share in terms of credit card purchases 8

9 Strategy 3 objectives for healthy growth / higher profitability I. Growth focused on segments with highest net contribution II. improve customer loyalty and quality of service Optimizing the risk return relation III. and managing risks and capital conservatively Creating a bank that is Simple Personal Fair 9

10 Customers Retail loyal 1 customers (ths) +7.6% 520 Dec Dec-16 Individual customer base growing with greater client loyalty Loyal 1 SMEs and Corporate customers (ths) +11.8% 39 Dec Dec-16 Strong rise in customer loyalty among SMEs/Corporates Digital customers (ths) % 959 Leading the system in digital banking Dec-15 Dec-16 Ranking in customer satisfaction among peers 2 #4 Dec-15 #1 Dec-16 #1 in customer satisfaction 1. Loyal clients: Clients with checking account plus 2-4 products depending on the segment and with intense usage measured according to an internal point system. 2. Source Adimark GFK. % of clients that rate our service 6 or 7 minus those that rate us 1 to 4 on a scale from 1 to 7, being 7 the highest 10

11 Total loans performance (1) At period end rate as of Dec (2) Loans to individuals includes consumer, mortgage and commercial loans to individuals (3) Total loans amount includes non-segmented loans Loan growth focused on segments with highest risk adjusted return Total gross loans (Constant MM 1 ) 6.5% 1.3% 36,468 37,584 37,898 38,350 38,841 D 15 M'16 J'16 S 16 D 16 Dec 16 YoY (%) QoQ (%) Total Individual 2 21, % 2.2% Mortgage 11, % 1.8% Consumer credit 6, % 3.2% Total Corporates 17, % 0.1% SMEs 5, % 2.0% Middle Market 8, % 1.3% GCB 2, % -6.8% Total Loans 3 38, % 1.3% 11

12 Total customer funds performance Deposits grow 2.6% YoY. Strong growth of mutual funds Total deposits (Constant MM 1 ) 2.6% 3.5% Dec 16 YoY (%) QoQ (%) 26,624 26,609 26,693 26,396 27,317 Demand 10, % 7.8% Time 16, % 0.8% Total deposits 2 27, % 3.5% Mutual funds 7, % -5.2% D 15 M 16 J'16 S 16 D (1) At period end rate as of December, (2) Includes demand, time and repos.

13 Agenda Macro-economic environment and financial system Strategy and business Results Appendix

14 Net interest income and spreads (1) At average exchange rate as of Dec (12M 16). 2. UF = Unidad de Fomento: an inflation index similar to CPI used by Banks to price assets and liabilities linked to inflation NII in 12M16 increases 7.4% YoY due to business growth Net Interest Income (Constant MM 1 ) Loan spreads (%) Retail Banking Total Loans 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 Deposit spreads (%) Retail Banking Inflation (UF) 2 1.1% 0.7% 0.9% 0.6% 0.5% Total Deposits 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 14

15 (1) In 2016 EUR 18.9 MM of adm. expenses were reclassified as fee expense. Adjusted fee income grows by 6.7% YoY (2) At average exchange rate as of 12M 16 Net fees Fee income grows by 1.2% driven by cards, cash management and mutual funds Net fees (Constant MM 2 ) 12M 16 12M 15 YoY(%) QoQ(%) Cards % 5.9% Q'15 1Q'16 2Q'16 3Q'16 4Q'16 Bancassurance % -9.6% Cash Management % -8.6% Mutual funds % 2.2% Foreign trade % 6.7% Checking accts % 1.7% Brokerage % -5.1% Others % 1.4% Total % 0.1% Adjusted 1 fee income grows by 6.7% YoY 15

16 Gross income Gross income up 7.0% YoY due to positive business growth Gross income (Constant MM 1 ) M 16 12M 15 YoY(%)QoQ(%) Net Interest Income 1,864 1, % 7.7% Net Fees % 0.1% Subtotal 2,216 2, % 6.5% Other % 3.7% Gross income 2,422 2, % 6.2% 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 16 (1) At average exchange rate as of Dec (12M 16) (2) Other includes Gains (losses) on financial transactions and Other operating income

17 Operating expenses Costs under control. Efficiency improves to 40.7% in 12M16 Operating expenses (Constant MM 1 ) 12M 16 12M 15 YoY(%) QoQ(%) General admin. Expenses % 2.8% Depreciation and amortisation % 14.1% Operating expenses % 3.9% 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 Efficiency ratio (with amortisation) 40.7% 43.0% Number of branches Number of employees 11,999 12, ) At average exchange rate as of Dec (12M 16)

18 Net operating income after loan-loss provisions (LLPs) Improvement of all credit quality ratios. Net. Op. Income after LLP rises 24.4% YoY LLPs and Cost of credit (Constant MM 1 ; %) Cost of credit % 1.58% 1.59% 1.55% 1.43% 12M16 12M15 YoY(%) QoQ(%) Net Operating Income 1,435 1, % 7.8% LLPs (514) (549) -6.5% -13.0% Net LLPs Net op. income after LLPs % 21.5% 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 NPL ratio 5.1% 5.6% NPL Coverage ratio 59% 54% 18 (1) At average exchange rate as of Dec (12M 16) (2) Cost of credit = 12 month loan-loss provisions / average lending. Calculated in current euros

19 Attributable profit Higher attributable profit driven by net interest income, expenses under control and lower provisions Attributable profit (Constant MM 1 ) 12M 16 12M 15 YoY(%) QoQ(%) Profit before taxes % 2.6% Tax on profit (159) (110) 44.5% 7.4% Consolidated Profit % 1.6% Attributable profit % 3.2% 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 Effective tax rate 17.8% 14.8% 19 1) At average exchange rate as of Dec, 2016 (12M 16)

20 Conclusions Market Environment & Financial System GDP should grow 2.0% in 2017 and 2.7% in 2018 Inflation expectations have lowered to 2.5% in We expect the Central bank rates to drop by 50bps in the coming year. Loan growth in the banking system should reach 6-7% in 2017 Strategy & Business Loans increase 6.5% YoY. Growth focused on segments with highest risk adjusted return Deposits grow 2.6% YoY. Mutual funds rise 23.5% YoY Loyal customers growing at a healthy pace driven by significant improvements in customer service Results Higher attributable profit driven by net interest income, expenses under control and lower provisions Effective tax rate rises to 17.8% as the statutory corporate tax rate continues to rise Improvement of all credit quality ratios 20

21 Agenda Macro-economic environment and financial system Strategy and business Results Appendix

22 Balance sheet EUR million. Constant Euros* Variation 31-dic dic-15 Amount % Customer loans ** ,5 Financial assets held for trading (w/o loans) (436) (12,7) Available-for-sale financial assets ,2 Central banks and credit institutions ** (604) (16,8) Tangible and intangible assets ,0 Other assets ,1 Total assets/liabilities & shareholders' equity ,5 Customer deposits ** ,6 Debt securities issued ** ,6 Liabilities under insurance contracts Central banks and credit institutions ** ,4 Other liabilities (297) (5,1) Stockholders' equity *** ,3 Off-balance-sheet funds ,9 Mutual funds ,5 Pension funds Managed portfolios ,2 Customer funds under management ,6 * End of period exchange rate 31-dec-16 ** Includes all stock of concept classified in the balance sheet *** Capital + reserves + retained profit + valuation adjustments 22

23 Income statement EUR million. Constant Euros* Variation Amount % Net interest income ,4 Net fees ,2 Gains (losses) on financial transactions ,6 Other operating income** (1) 11 (12) Gross income ,0 Operating expenses (986) (972) (14) 1,5 General administrative expenses (895) (897) 2 (0,2) Personnel (558) (550) (7) 1,4 Other general administrative expenses (337) (347) 10 (2,8) Depreciation and amortisation (91) (75) (16) 22,1 Net operating income ,2 Net loan-loss provisions (514) (549) 36 (6,5) Other income (27) 3 (30) Profit before taxes ,2 Tax on profit (159) (110) (49) 44,5 Profit from continuing operations ,9 Net profit from discontinued operations Consolidated profit ,9 Minority interests ,9 Attributable profit to the Group ,4 * Average exchange rate 2016 ** Including dividends, income from equity-accounted method and other operating income/expenses 23

24 Quarterly income statements Variation EUR million. Constant Euros* 4Q16 / 3Q16 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Amount % Net interest income ,7 Net fees ,098 Gains (losses) on financial transactions ,9 Other operating income** (0) 1 2 (3) (6) Gross income ,2 Operating expenses (223) (241) (244) (264) (243) (243) (246) (255) (9) 3,9 General administrative expenses (206) (223) (225) (243) (223) (221) (223) (229) (6) 2,8 Personnel (120) (137) (139) (155) (132) (143) (140) (142) (2) 1,4 Other general administrative expenses (86) (86) (86) (88) (91) (78) (82) (86) (4) 5,2 Depreciation and amortisation (17) (18) (18) (21) (20) (22) (23) (26) (3) 14,1 Net operating income ,8 Net loan-loss provisions (124) (115) (152) (159) (113) (131) (144) (126) 19 (13,0) Other income 6 (3) (4) 4 2 (1) 6 (35) (41) Profit before taxes ,6 Tax on profit (40) (26) (26) (18) (41) (32) (41) (45) (3) 7,4 Profit from continuing operations ,6 Net profit from discontinued operations Consolidated profit ,6 Minority interests (1) (2,1) Attributable profit to the Group ,2 * Average exchange rate 2016 ** Including dividends, income from equity-accounted method and other operating income/expenses 24

25 Thank you Nuestra Our purpose misión to es help contribuir people al and progreso de las businesses personas prosper. y de las empresas. Nuestra Our culture cultura is based basa on the en la belief creencia that de que everything todo lo we que do hacemos should debe ser