Banco Santander-Chile Announces Third Quarter 2020 Earnings NYSE:BSAC

SANTIAGO, Chile, Oct. 30, 2020 (GLOBE NEWSWIRE) — Banco Santander Chile (NYSE: BSAC; SSE: Bsantander) announced today its unaudited results¹ for the nine month period ended September 30, 2020 and third quarter 2020 (3Q20).

Net income increases 23.9% QoQ

Net income attributable to shareholders in 3Q20 totaled Ch$105,139 million (Ch$ 0.56 per share and US$ 0.28 per ADR). It is important to point out that 3Q20 results include an additional provision of Ch$30,000 million recognized in order to increase coverage ratios considering the uncertainty surrounding the potential impacts on credit quality of the COVID-19 crisis and Ch$34,133 million in regulatory provisions set aside for FOGAPE loans¹ due to a change in the expected loss model of these loans. Even with this impact net income increased 23.9% QoQ due to a lower overall provision expense, higher net interest income and cost control. This was partially offset by lower non-interest income affected by lower economic activity and lower treasury income. The ROE in the quarter reached 11.5% compared to 9.5% in 2Q20. Net income attributable to shareholders in 9M20 decreased 23.3% YoY, totaling Ch$334,012 million (Ch$1.77 per share and US$0.90 per ADR) with the Bank’s ROAE in 9M20 at 12.5%.

47% YoY rise in non-interest bearing demand deposits

The Bank’s total deposits increased 12.3% YoY and decreased 3.3% QoQ in 2Q20. In the quarter, non-interest bearing demand deposits continued to grow strongly, reaching 12.1% QoQ and 47.0% YoY due to high growth of retail checking accounts and continued strength in the Bank’s transactional banking services for companies as clients looked to increase their liquidity to confront the months of quarantine. Moreover, in the quarter, demand deposit growth was also driven by the effect of the withdrawal from the pension funds. This also led to high liquidity ratios with the Bank’s LCR and NSFR reaching 157% and 119%, respectively.

Time deposits decreased 12.1% YoY and 16.7% QoQ due to lower interest rates. In March the Central Bank continued to lower its MPR, which serves as reference rate for most CLP denominated deposits. At the same time the Bank continued to enforce time deposit price discipline, improving our time deposit funding cost in nominal pesos in absolute terms and compared to our main peers.

Life and Superdigital driving digital account openings

Retail demand deposit growth was also driven by Life and Superdigital that thrived in the quarter. The lockdowns have increased the demand for online banking services and our attractive digital product offer drove record demand for these products. Our digital channels have proven vital during the COVID-19 crisis providing clients with an easy access to our transactional products.

Santander Life continues to be the main contributor to new client growth due to the success of this product’s Meritolife Program and Digital On-boarding process for opening a checking account. Total new clients in Life in 2020 increased 110% YTD and in the third quarter Life opened a record 147,925 checking accounts. The lockdowns have increased the demand for online banking services and Santander Life’s attractive product offer has continued to drive demand for this product. Life already has more than 360,000 clients, 75% of which were digitally onboarded. Santander Life received an NPS score of 71.

In April, Superdigital was fully launched to the public and a record amount of debit accounts were opened in the quarter, providing an attractive alternative for unbanked Chileans to manage the money received from government initiatives during the COVID-19 crisis. In April Superdigital had 20,000 clients and this jumped to over 100,000 by September.

The Bank opens 1.3x more current account than the banking system

As a result of these efforts, the Bank’s market share in traditional checking accounts remained strong. According to the latest publicly available information, which is as of…