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Banco Santander Chile ADR BSAC

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Morningstar’s Analysis

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Decent Third Quarter for Santander Chile With Strong Fee Income and Growth in Client Base

Michael Miller Equity Analyst

Analyst Note

| Michael Miller |

Narrow-moat-rated Banco Santander Chile posted decent third-quarter earnings, falling short of the FactSet consensus estimate of CLP 0.94 per share with reported adjusted EPS of CLP 0.93. These results equate to a return on equity of 21.1% for the quarter. With over 75% of the population fully vaccinated and lower rates of infection, things are looking up for the Chilean economy as it surpasses pre-pandemic levels. However, political uncertainty remains high with presidential and parliamentary elections happening in a few weeks, along with the constitutional rewrite that is expected to be finished by June 2022. Despite this, we do not see a material medium-term impact from the political situation on the bank’s performance and believe Santander Chile will continue to benefit from the country’s recovery from the pandemic. After incorporating the third-quarter results, we are maintaining our fair value estimate of $24 per ADR share. 

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Company Profile

Business Description

Santander Chile is the largest bank in Chile by assets. It has the most expansive footprint of any bank in the country, ranks first in lending market share, and ranks second in deposit market share. It is the most efficiently run commercial bank in the region, resulting in returns on equity in the high teens. The bank generates revenue through net interest income, fee and commission lines, and treasury operations, with the latter following Chile inflation (denominated in the UF) closely.

Bandera 140, 20th Floor
Santiago, Chile
T +56 23202000
Sector Financial Services
Industry Banks - Regional
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 10,240