Banco Santander Chile Reports Strong Second Quarter Results, Upgrades 2024 Guidance

Strategic Insights -

Banco Santander Chile (NYSE: BSAC; SSE: Bsantander) has announced its results for the six-month period ended July 31, 2024, and second quarter 2024 (2Q24), reflecting a strong recovery in the bank's performance. The bank's net income attributable to shareholders totaled $217,724 million ($1.16 per share and US$0.49 per ADR) in 2Q24, a 81.1% increase compared to the previous quarter, with a return on average equity (ROAE) of 20.7%. As of June 30, 2024, the bank's net income attributable to shareholders totaled $337,976 billion ($1.79 per share and US$0.76 per ADR), reflecting an increase of 28.6% compared to the same period of the previous year, along with an ROAE of 15.8%.

Key Takeaways:

  • The bank's operating income increased by 19.4% in the quarter, driven by a better interest margin and adjustments, with a strong recovery in MIN to 3.6% in 2Q24.
  • Total net interest and readjustment income increased by 54.5% compared to the same period in 2023, due to higher interest income and lower readjustment income.
  • Net commissions increased 6.5% in the quarter, with a recurrence ratio of 55%, while fees increased 6.5% QoQ due to increased customer numbers and greater use of products.
  • The cost of credit remained stable at 1.25% in the quarter, while core support expenses increased 4.2% in 6M24, in line with guidance.
  • The bank's efficiency ratio reached 42.1% in June 2024, better than the 45.4% in the same period last year.
  • The bank's risk-weighted assets increased 0.5% since December 31, 2023 and decreased 1.9% QoQ.
  • Retail loans grew with soft trends, while commercial loans contracted due to lower dynamism.
  • Time deposits decreased 5.0% in the quarter in response to lower rates.

Statistics:

  • Net income attributable to shareholders: $217,724 million ($1.16 per share and US$0.49 per ADR) in 2Q24
  • Return on average equity (ROAE): 20.7% in 2Q24 and 15.8% in 6M24
  • Net interest margin (MIN): 3.6% in 2Q24 and 3.1% in 6M24
  • Total net interest and readjustment income: $54.5% increase compared to the same period in 2023
  • Net commissions: 6.5% increase in the quarter
  • Fees: 6.5% QoQ increase
  • Cost of credit: 1.25% in 6M24
  • Core support expenses: 4.2% increase in 6M24
  • Efficiency ratio: 42.1% in June 2024
  • Risk-weighted assets: 0.5% increase since December 31, 2023
  • Retail loans: grew with soft trends
  • Commercial loans: contracted due to lower dynamism
  • Time deposits: 5.0% decrease in the quarter

Sources:

  • Banco Santander Chile report on results for the six-month period ended July 31, 2024 and second quarter 2024 (2Q24)
  • Financial Markets Commission (FMC) BIS III definitions
  • Chilean Bank GAAP as defined by the Financial Markets Commission (FMC)