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Banco Santander Chile ADR BSAC

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Morningstar’s Analysis

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Santander Making the Best of a Tough Environment, but Macro Headwinds Dent Prospects

Eric Compton, CFA Senior Equity Analyst

Analyst Note

| Eric Compton, CFA |

Narrow-moat-rated Banco Santander Chile reported solid third-quarter earnings of $0.28 per ADR share, beating CapIQ consensus estimates of $0.23. Earnings were augmented by lower provisioning, cost control, and a modest expansion in net interest income as the firm participated extensively in the government-sponsored FOGAPE lending program. After incorporating recent results and currency effects, we’re lowering our fair value estimate to $19.50 per ADR share from $22.

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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, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 11,078