Banco Santander Chile SA Q4 FY2024 earnings call

• Andrés Trautmann will be promoted to CEO and Country Head starting in July 2025.
• Impressive 2024 results: net profit CLP 865 billion (73% increase vs 2023), NIM 3.6% (4.2% in Q4), ROE 20.2% for the year (26% in Q4).
• Efficiency ratio 36.5% in Q4, recurrence ratio 61.2%. Customer deposits up 5.9% in Q4, loans up 2.2%.
• Strategy focus: expanding to cover entire population/companies, 4 pillars; digital transformation with Gravity initiative (migration to cloud), branch network reduced by 4.5% in 2024, digital client growth (2.2 million monthly digital clients).
• Recognition: named Best Bank in Chile by multiple entities, Top Employer Certification for 7th consecutive year.

In 2024, Banco Santander-Chile reported a net profit of CLP 865 billion, a 73% increase compared to 2023. The net interest margin (NIM) was 3.6% for the year, with the fourth quarter reaching 4.2%. Customer funds grew strongly, with total deposits increasing by 5.9% in the fourth quarter. Total loans grew by 2.2%, driven by accelerated consumer lending, particularly through credit cards. Fees and financial transactions in the fourth quarter of 2024 increased by 19.6% compared to the same period in 2023. The capital ratio remained solid with a CET1 of 10.5%. Customer deposits contributed to a loan-to-deposit ratio improvement, and the return on average equity improved to 20.2% for the year with the fourth quarter at 26%.

• Expect GDP growth around 2.3%, UF variation 4.1%, average monetary policy rate close to 5%.
• Loan book expected to grow mid-single digits, NIM above 4% throughout 2025.
• Fees to grow strongly mid-single digits, efficiency levels around mid-30s.
• Cost of risk guided to be stable around 1.3%, ROE expected 20%-21% for full year 2025.

• Political uncertainty ahead of 2025 presidential elections and potential divided Congress impacting structural reforms.
• Regulatory risks: measurement of market risk of banking book under review, potential impact of interchange fee regulation and new provisioning model for consumer loans.
• Economic factors: weaker labor market and sluggish economic activity in 2024 affecting asset quality (NPLs increasing in mortgage and commercial loan books).

Q: On the political side, with Chile's midterm and presidential elections, how to see candidates and potential impact on reforms?

A: Andrés Sansone noted trend to moderation and focus on growth, positive on general scenario; Cristian Vicuña said effective tax rate likely similar to 2024, long-term ROE expected in 20s.

Q: What factors explain 2025 ROE guidance below recent high quarters?

A: Prudent approach factoring in macro conditions, headwinds in rates, market volatility; NPLs showing signs of stabilization with improvements expected in 2Q-3Q 2025.

Q: Talk about capital strategy and fee income outlook?

A: Patricia Pallacan said expecting capital payout around 60% base case; Cristian Vicuña said fee growth mid-single digits in 2025, impact from delayed interchange fee cap reduction.

Q: Breakdown of loan growth by segments like retail, SMEs?

A: Patricia Pallacan said mid-single-digit loan growth driven by retail lending (consumer lending), commercial loan book may improve with investment, mortgages demand not improving due to high long-term yields.

Q: Amount invested in 2023-2026 plan and future investment?

A: Cristian Vicuña said ~$150 million per year invested, 60% in technology/digital platforms, 40% in branch network; building Santander campus not in $450 million plan