A Strong End to 2021 for Banco Santander Chile as Inflation and Loan Growth Drive Higher Earnings

Narrow-moat rated Banco Santander Chile posted solid fourth-quarter earnings as net interest margin expansion benefited the company’s results. Banco Santander Chile reported earnings per share of $1.23 CLP and net revenue grew 21.4% from the prior-year quarter to $742.5 million CLP. These results translate to a return on average equity of 28% for the quarter. While political uncertainty in Chile remains high with the constitutional rewrite that is expected to be finished this year, the combination of strong economic output and high inflation is a potent one for the bank and we see the current macro environment in Chile as favorable to the company. As we incorporate these results, we do not expect to change our fair value estimate of $21.70 per ADR share.