Cutting Banco Santander Chile's FVE to $19.50 on a Weaker Chilean Peso and More Economic Uncertainty

As we incorporate recent exchange rate movements and increased economic uncertainty in Chile, we are reducing our fair value estimate for narrow-moat Banco Santander Chile from $23 per ADR share to $19.50. The bulk of this decrease comes from a change in our assumed exchange rate from CLP 784 per U.S. dollar to CLP 942 as of June 30, 2022. Our fair value estimate decreased an additional $0.50 due to higher near-term credit costs, as the Chilean economy cools in the face of rapid interest rate increases.