Banco Santander Chile reports strong 2024 financial results, with significant net income growth and increased customer base.
Quiver AI Summary
Banco Santander Chile reported strong financial results for 2024, with a net income of $858 billion, a 72.8% increase year-over-year, and a return on average equity (ROAE) of 20.2%. In the fourth quarter of 2024 alone, net income reached $277 billion, up 13.7% from the previous quarter, achieving an ROAE of 26.0%. The bank's operating income rose by 34.5% year-on-year, driven by a recovery in net interest margin (NIM), which increased to 3.6% for the year and 4.2% in Q4. The bank also expanded its customer base by 6.4%, with over 4.3 million total customers, 2.2 million of whom use digital services. Santander Chile's total deposits grew 5.7% compared to the previous year, with increases in both demand and time deposits. Additionally, the bank maintained solid capital levels with a BIS ratio of 17.1% and a CET1 ratio of 10.5%. The bank has been recognized for its performance in SME banking, sustainability, and as a top employer.
Potential Positives
- Strong financial performance with a 72.8% increase in net income attributable to shareholders, reaching $858 billion for the year.
- Robust return on average equity (ROAE) of 26.0% in 4Q24 and over 20% for three consecutive quarters, indicating effective capital utilization.
- Significant growth in customer base, with a 6.4% year-over-year increase, highlighting successful customer engagement and digital strategy.
- Recognized for excellence as the Best Bank in the Country in SME and ESG categories by Euromoney, reflecting strong reputation and commitment to sustainability.
Potential Negatives
- Despite strong financial performance, the press release highlights an increasing non-performing loans (NPL) ratio of 3.2%, which indicates rising credit risk and potential challenges in asset quality.
- The cost to assets ratio increased to 1.5% in 12M24, up from 1.3% the previous year, suggesting a decline in operational efficiency in relation to total assets.
- Total operating expenses rose by 12.4% compared to the prior year, driven by higher other operating expenses related to branch restructuring and digital transformation, which could indicate financial strain from ongoing changes in the business model.
FAQ
What were Banco Santander Chile's net income results for 2024?
Banco Santander Chile reported a net income of $858 billion for 2024, reflecting a 72.8% increase compared to 2023.
How did the customer base change in 2024?
The customer base grew by 6.4% year-over-year, reaching approximately 4.3 million customers, with over 2.2 million being digital customers.
What is the efficiency ratio for Banco Santander Chile?
The efficiency ratio was 39.0% as of December 31, 2024, a decrease from 46.6% in the previous year.
What is the BIS capital ratio of Banco Santander Chile?
As of December 31, 2024, the BIS capital ratio was 17.1%, with a Common Equity Tier 1 (CET1) ratio of 10.5%.
How did Banco Santander Chile perform in the SME market?
Banco Santander Chile was recognized as the Best Bank in Chile for SMEs by Global Finance, reflecting its strong market position.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
$BSAC Hedge Fund Activity
We have seen 57 institutional investors add shares of $BSAC stock to their portfolio, and 42 decrease their positions in their most recent quarter.
Here are some of the largest recent moves:
- SCHRODER INVESTMENT MANAGEMENT GROUP removed 2,968,257 shares (-70.4%) from their portfolio in Q3 2024, for an estimated $61,621,015
- MILLENNIUM MANAGEMENT LLC added 1,083,992 shares (+inf%) to their portfolio in Q3 2024, for an estimated $22,503,673
- MARSHALL WACE, LLP added 252,153 shares (+inf%) to their portfolio in Q3 2024, for an estimated $5,234,696
- ABRDN PLC removed 178,474 shares (-20.7%) from their portfolio in Q4 2024, for an estimated $3,366,019
- FIL LTD added 175,228 shares (+inf%) to their portfolio in Q3 2024, for an estimated $3,637,733
- NS PARTNERS LTD removed 165,682 shares (-40.1%) from their portfolio in Q3 2024, for an estimated $3,439,558
- APG ASSET MANAGEMENT N.V. removed 163,100 shares (-100.0%) from their portfolio in Q3 2024, for an estimated $3,385,956
To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.
Full Release
SANTIAGO, Chile, Jan. 31, 2025 (GLOBE NEWSWIRE) -- Banco Santander Chile (NYSE: BSAC; SSE: Bsantander) announced today its results
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for the twelve-month period ended December 31, 2024, and fourth quarter 2024 (4Q24).
Strong Financial Performance with ROAE
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of 26.0% in 4Q24
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and 20.2% in 12M24
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.
As of December 31, 2024, the Bank's net income attributable to shareholders totaled $858 billion ($4.55 per share and US$1.83 per ADR), marking a 72.8% increase compared to the same period of the previous year and with an ROAE of 20.2%.
In 4Q24, net income attributable to shareholders of the Bank totaled $277 billion, increasing 13.7% in the quarter with a quarterly ROAE of 26.0%. This marks the third consecutive quarter with an ROAE above 20%.
The improvement in results is explained by an increase in the Bank's main revenue lines. Operating income increased by 34.5% YoY, supported by a stronger interest margin and readjustments.
Robust NIM
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recovery, reaching 3.6% in 2024 and 4.2% in 4Q24.
Net interest and readjustment income (NII) for the year ended December 31, 2024 increased by 62.1% compared to the same period in 2023. This growth was primarily due to higher net interest income, resulting from a lower monetary policy rate that reduced our funding costs from 6.8% to 4.7% in 12M24. This was partially offset by lower readjustment income due to a smaller variation in the UF compared to the previous year. Consequently, the NIM improved from 2.2% in 2023 to 3.6% in 2024, and further to 4.2% in 4Q24.
Continued Expansion of Customer Base with a 6.4% YoY Increase in Total Customers and a 5.9% YoY Increase in Digital Customers
Our strategy to enhance digital products has led to a continued growth in our customer base reaching approximately 4.3 million customers, with over 2.2 million digital customers (88% of our active customers).
The Bank's market share in current accounts remains robust at 23.2% as of October 2024, driven by increased customer demand for US dollar current accounts which can be easily opened digitally by our customers. It also demonstrates the success of Getnet's strategy in encouraging cross-selling of other products such as the Cuenta Pyme Life.
Customer funds increased 4.7% QoQ and 12.6% since December 2023.
Customer funds (demand deposits, time deposits and mutual funds) increased by 4.7% QoQ and 12.6% from December 2023, reflecting client growth and fund accumulation. The Bank's total deposits increased by 5.7% from December 31, 2023, explained by the 5.3% increase in demand deposits and the 6.0% increase in time deposits. In the quarter, total deposits grew by 5.9%, with demand deposits up by 8.7% and time deposits by 3.7%. The strong growth in the quarter is explained by the seasonality of deposits at the end of the year, especially among corporate clients.
Our customer's investments through mutual funds intermediated by the Bank also grew in the quarter, reaching an increase of 2.2% QoQ and 32.6% since December 31, 2023, given the clients' preference for mutual funds in this scenario of falling rates.
Net fees and commissions increase 8.8% in 12M24, achieving a recurrence
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level of 60.3%.
Net fees increased 8.8% in the twelve months ended December 31, 2024 compared to the same period in 2023 due to increased client numbers and higher product usage. As a result, the recurrence ratio (total net fees divided by structural support expenses) increased from 57.4% YTD as of December 2023 to 60.3% YTD as of December 2024, demonstrating that more than half of the Bank's expenses are financed by fees generated by our clients.
Efficiency ratio of 36.5% in 4Q24 and 39.0% in 4Q24
The Bank's efficiency ratio reached 39.0% as of December 31, 2024, compared to the 46.6% of the same period last year, with a quarterly efficiency ratio of 36.5%. On the other hand, the cost to assets ratio increased to 1.5% in 12M24 vs. 1.3% in the same period of the previous year.
Structural support expenses (salaries, administration and amortization) grew 3.5% in 12M24 compared to 12M23, below inflation, and in line with the guidance provided previously and a slight decrease of 1.8% compared to 3Q24 mainly due to lower salary expenses.
Total operating expenses (which includes other expenses) increased 12.4% in 12M24 compared to 12M23 driven by higher other operating expenses, related to a provision for the restructuring of our branch network and the transformation to Work/Café and also advances in digital banking.
Cost of credit of 1.29% in 12M24, and NPL coverage at 115.4%
During the Covid-19 pandemic, asset quality benefited from state aid and pension fund withdrawals, which led to a positive performance in assets during that period, before normalizing in line with the performance of the economy and the drainage of excess liquidity from households. Currently, our clients' performance is reflecting the state of the economy and the labor market, where delinquency is higher than the levels we saw before the pandemic with the non-performing loans (NPL) ratio increasing to 3.2% and the impaired portfolio to 6.7% at December 2024. Overall the cost of credit remained stable at 1.29% in the quarter.
Solid capital levels with a BIS
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ratio of 17.1% and a CET1
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of 10.5%.
Our CET1 (Common Equity Tier 1) ratio remains at solid levels of 10.5% and the total Basel III ratio reaches 17.1% at the end of December 2024, which includes a provision of dividend payment of 70% of 2024 earnings.
We made significant progress in our Chile First strategy in 2024
Largest bank in terms of loans and deposits (16.9% market share according to latest information from the CMF).
More than US$ 450 million committed to invest in infrastructure and technology between 2023 and 2026.
A total of 99 Workcafés in Chile, serving our clients and the community in their different formats.
Recognized by Euromoney as the Best Bank in the Country in the SME and ESG Categories.
The only Chilean bank included in the DJSI emerging markets and within the top 3% of the most sustainable banks in the world.
Top Employer Certification January 2025 (seventh consecutive year).
Recognized as the Best Bank in Chile for SMEs by Global Finance.
ALAS20: First place in the category of leading company in sustainability.
Institutional Investor: "Most Honored Company."
Banco Santander Chile is one of the companies with the highest risk ratings in Latin America, with an A2 rating from Moody's, A- from Standard and Poor's, A+ from Japan Credit Rating Agency, AA- from HR Ratings and A from KBRA. All our ratings as of the date of this report have a stable outlook.
As of December 31, 2024, the Bank has total assets of $68,458,933 million (US$68,865 million), total gross loans (including loans to banks) at amortized cost of $41,323,844 million (US$41,569 million), total deposits of $31,359,234 million (US$31,545 million) and shareholders' equity of $4,292,440 million (US$4,318 million). The BIS capital ratio was 17.1%, with a core capital ratio of 10.5%. As of December 31, 2024, Santander Chile employs 8,757 people and has 236 branches throughout Chile.
CONTACT INFORMATION
Cristian Vicuña
Chief Strategy Officer and Head of Investor Relations
Banco Santander Chile
Bandera 140, Floor 20
Santiago, Chile
Email: irelations@santander.cl Website: www.santander.cl
1 The information contained in this report is presented in accordance with Chilean Bank GAAP as defined by the Financial Markets Commission (FMC).
2 Annualized net income attributable to shareholders of the Bank divided by the average equity attributable to equity holders
3 The fourth quarter of 2024
4 The twelve months accumulated as of December31, 2024
5 NIM: Net interest margin. Annualized net interest income and annualized readjustments divided by interest-earning assets
6Recurrence: Net commissions divided by structural operating expenses (excludes other operating expenses).
7 Regulatory capital divided by risk-weighted assets, according to CMF BIS III definitions
8 Core capital divided by risk-weighted assets, according to CMF BIS III definitions.
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