Banco Santander Chile SA Q1 FY2025 earnings call

• Economic Environment: Chile's peso fluctuated, interest rates fell, GDP growth revised (expected 2.1% in 2025, 1.7% in 2026), inflation converging, Central Bank policy rate expected to cut. Trade war poses indirect risks to confidence. - Strategy: Digital transformation with over 2.3 million digital clients, core banking systems migrated to cloud, branch network optimized (34% of branches without human sellers), product simplification (reduced products by 31%), Getnet growing strongly. - Financial Results: Net income up 131% y-o-y, NII growing 23.4% y-o-y, NIM recovery driven by funding cost improvement, efficiency at 35% (best-in-class), card fees grew 37.6% y-o-y.

During the first quarter, Banco Santander-Chile's net profits reached CLP 278 billion, a 131% increase compared to the same quarter last year. Return on average equity was 25.6% with an efficiency ratio of 35%. Fees and financial transactions grew 17% and 40% year-on-year respectively. Getnet, the acquiring business, attracted over 200,000 customers, a 25% increase in 12 months with over 20% market share in transaction numbers. The loan book contracted slightly, with the Retail segment led by consumer lending, Wealth Management and Insurance showing strong growth, while the Corporate Investment Bank loan book contracted due to macroeconomic conditions. Revenue contribution percentages weren't explicitly stated, but key segments like Retail, Wealth Management, and Getnet contributed to overall performance.

• GDP growth: Expected 2.1% in 2025, 1.7% in 2026. - Loan book: Expected mid-single digit growth. - NIM: Expected around 4% throughout 2025. - Non-NII: Guidance increased to high single digits due to delay in interchange fee regulation. - Cost of risk: Expected stable around 1.3%, improving in second half. - ROE: Guidance above 21% for 2025.

• External trade war impact: Indirect effects on business and consumer confidence, local investment, and consumption. - Regulatory changes: Uncertainty around interchange fee regulation and new capital requirements (Pillar 2), which could affect earnings and strategy. - Global market volatility: Fluctuations in global financial markets affecting Chile's economy and bank performance.

Q: Thoughts on economic and political outlook and impact of tariffs?

A: Andres Sansone stated Chile's economy started the year strong but trade war poses indirect risks; political landscape with upcoming elections and focus on economic growth. Cristian Vicuna discussed limited direct tariff impact on Chile but indirect effects on confidence.

Q: Non-NII growth breakdown and competition from fintechs?

A: Cristian Vicuna said non-NII growth increased due to delay in interchange fee regulation, expecting high single digit growth; regarding fintechs, Tenpo applied for banking license but no significant competition yet, Mercado Pago is a competitor to watch in acquiring and digital payments.

Q: Asset quality trends and tech expenses?

A: Cristian Vicuna said asset quality trends show stable NPLs with mortgage part slightly deteriorating but expecting improvement in second half; tech expenses include mainframe migration to cloud with final stages ongoing, with other tech transformations absorbed in business-as-usual expenses.

Q: Main risks and NIM evolution?

A: Patricia Perez and Cristian Vicuna mentioned risks from global market volatility; NIM expected around 4% in 2025, with inflation slowdown considered in guidance.

Q: Loan growth by segment and capital impact?

A: Patricia Perez said loan growth expected mid-single digit with retail parts (consumer lending) performing well, corporate loans weak; capital requirements from Pillar 2 don't impact strategy or dividend.

Q: Asset density evolution?

A: Cristian Vicuna and Patricia Perez said risk-weighted assets to total assets ratio expected to remain stable with no material changes foreseen in the near term.