Santiago, Chile, February 4, 2014. Banco Santander Chile (NYSE: BSAC; SSE: Bsantander) announced today its unaudited results for the Fourth quarter of 2013. These results are reported on a consolidated basis in accordance with Chilean GAAP.
Net income up 13.8% in 2013. ROE reaches 20.2%
In 2013, Banco Santander Chile's Net income attributable to shareholders totaled Ch$441,926 million (Ch$2.35 per share and US$1.79/ADR) increasing 13.8% compared to 2012. The Bank's ROE for the year reached 20.2%; the Net interest margin was 5.0% and the Efficiency ratio (cost / Income) was 40.4%. These results include a Ch$78,122 million pre-tax gain from the sale of our asset management business in December 2013 (included as Income from investments from other companies). Operating income, which excludes this one-time gain, increased by 3.4% in 2013 and totaled Ch$458,984 million.
In 4Q13, Net income attributable to shareholders totaled Ch$173,982 million (Ch$0.92 per share and US$0.71/ADR), increasing 72.0% compared to 3Q13 (from now on QoQ) and 53.3% compared to 4Q12 (from now on YoY). The ROE in the quarter was 30.7%. Excluding the sale of the asset management subsidiary, net income totaled Ch$111,484 million and the ROE reached 19.7%.
Strong operating trends in 4Q13: Operating income up 16.0% QoQ and 14.6% YoY
The Bank's Operating income*, which does not include the sale of the asset management business, totaled Ch$138,580 million in 4Q13, increasing 16.0% QoQ and 14.6% YoY. In this period, the Bank saw a favorable evolution of business volumes, margins, asset quality and costs that lead to the highest level of quarterly Operating income in two years.
Positive loan growth: 10.9% YoY overall and 14.6% in targeted segments
In 4Q13, total loans increased 3.0% QoQ (an annualized rate of 12%) and 10.9% YoY. In the quarter, loan growth continued to accelerate in the segments the Bank is targeting: high-income individuals, small and mid-sized companies (SMEs) and the middle market of companies. Loans in these combined markets increased 3.4% QoQ and 14.6% YoY. In terms of products, consumer loans led growth and increased 5.4% QoQ and 15.8% YoY.
Improved funding mix and strong growth of client deposits
Total deposits grew 2.3% QoQ and 8.6% YoY. Non-interest bearing demand deposits increased 6.9% QoQ and 13.1% YoY. In the quarter, the Bank's funding strategy continued to be focused on increasing Client deposits (demand and time deposits from our retail and corporate clients), replacing deposits from more expensive short-term institutional sources. Client deposits expanded 3.2% QoQ and 19.8% YoY. Client deposit growth was led by an increase in deposits from individuals, which grew 4.2% QoQ, and 18.2% YoY.
Sustained growth of NIMs, net of provisions
In 4Q13, Net interest income increased 2.2% QoQ and 3.9% YoY. The 2.8% QoQ growth of average loans and a better funding mix drove this rise in net interest income. The Net interest margin (NIM) in 4Q13 reached 5.2% compared to 5.3% in 3Q13 and 5.5% in 4Q12. The Bank focus is to maximize NIMs, net of provision expenses, by growing on relatively less risky segments. In 4Q13, the Bank's total NIM, net of provision expense, reached 3.7% compared to 3.5% in 3Q13. This rise was led by improvements in margins in consumer lending. The NIM of consumer loans, net provisions, increased from 9.1% in 4Q12 to 10.4% in 4Q13.
Asset quality improves in 4Q13
Net provision for loan losses decreased 8.7% QoQ and 2.6% YoY in 4Q13. The Cost of credit (Provision expenses annualized divided by total loans) reached 1.7% in 4Q13 improving from 1.9% in both 3Q13 and 4Q12. Key in this lower expense was the reduction in provisions in consumer lending. Net provisions in consumer loans, which represented 41% of total provision expense, decreased 19.8% QoQ and 37.5% YoY. The decline in consumer provision expense was due to: (i) the focus on loan growth in the higher end of the consumer market, (ii) the tightening of admissions policies, (iii) the revamping of the collections process and (iv) the focus on growing via pre-approved loans.
The Bank's total Non-performing loan (NPLs) ratio reached 2.9% in 4Q13 improving from 3.0% in 3Q13 and 3.2% in 4Q12. The Risk index remained stable at 2.9%. Total Coverage of NPLs in 4Q13 reached 99.2% compared to 94.8% in 3Q13 and 92.0% in 4Q12.
Efficiency ratio improves to 38.2% in 4Q13
Operating expenses decreased 2.1% QoQ in 4Q13, expanding 1.4% YoY, as the Bank continues to wrap up its investment program in the Transformation Project. The Efficiency ratio (cost / income) reached 38.2% in 4Q13 compared to 39.8% in 3Q13 and 39.5% in 4Q12.
Core capital ratio reaches 10.6% in 4Q13
Santander Chile's Core capital ratio reached 10.6% at year-end 2013. The Bank's BIS ratio reached 13.8% at the same date.
CONTACT INFORMATION
Robert Moreno
Manager, Investor Relations Department
Banco Santander Chile
Bandera 140 Piso 19
Santiago, Chile
Tel: (562) 2320-8284
Fax: (562) 671-6554
Email: rmorenoh@santander.cl
Website: www.santander.cl