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Banco Santander Chile ADR BSAC

Morningstar Rating
$19.25 +0.26 (1.37%)
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Company Report

Banco Santander Chile Earnings: Net Income Spikes From Higher Inflation Readjustment Income

Narrow-moat-rated Banco Santander Chile reported solid fourth-quarter results as falling interest rates reduced pressure on the bank’s funding costs while a higher inflation adjustment led to higher interest income. Net revenue increased 23.4% from last year and 30.6% from last quarter to CLP 556 billion. Net income increased 73.8% from last year and more than tripled from a weak third quarter to CLP 176.9 billion, which translates to a return on equity of 16.6%. As we incorporate these results, we do not plan to alter our fair value estimate of $18 per ADR share.

Price vs Fair Value

BSAC is trading at a 5% premium.
Price
$18.99
Fair Value
$47.00
Uncertainty
Medium
1-Star Price
$12.40
5-Star Price
$47.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Banco Santander Chile has one of the largest deposit bases in Chile, and the bank’s recent success with its new digital accounts will only add to this strength.

Bears

The combination of falling inflation and high interest rates has caused Banco Santander Chile's net interest margin and profitability to collapse.

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News

Trading Information

Previous Close Price
$18.99
Day Range
$18.8619.43
52-Week Range
$16.2421.81
Bid/Ask
$17.97 / $19.99
Market Cap
$9.07 Bil
Volume/Avg
327,174 / 367,748

Key Statistics

Price/Earnings (Normalized)
15.06
Price/Sales
3.89
Dividend Yield (Trailing)
6.71%
Dividend Yield (Forward)
6.71%
Total Yield
6.71%

Company Profile

Founded in 1978, Banco Santander Chile is part of the Santander group and majority controlled by Santander Spain. Banco Santander is the largest bank in Chile by loans and the second largest by deposits. The bank generates most of its net interest income (roughly 65% of total revenue) from its mortgage, unsecured consumer credit lines, and commercial loans. Banco Santander’s commercial loan business is more focused on small- to medium-sized companies, with firms generating more than CLP 10,000 million in revenue only making up around 5% of outstanding loans. Outside of lending, Banco Santander is the largest card issuer in the country with around 25% of the market and benefits from a long-term strategic partnership with the largest airline in the country LATAM Chile.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Large Core
Total Number of Employees
9,229

Competitors

Valuation

Metric
BSAC
ITUB
BCH
Price/Earnings (Normalized)
15.069.538.26
Price/Book Value
1.801.841.99
Price/Sales
3.892.263.34
Price/Cash Flow
5.095.06
Price/Earnings
BSAC
ITUB
BCH

Financial Strength

Metric
BSAC
ITUB
BCH
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
BSAC
ITUB
BCH
Return on Assets (Normalized)
0.83%1.44%2.26%
Return on Equity (Normalized)
13.09%19.76%25.13%
Return on Invested Capital (Normalized)
Return on Assets
BSAC
ITUB
BCH
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