Banco Santander Chile Announces First Quarter 2020 Earnings

SANTIAGO, Chile, April 29, 2020 (GLOBE NEWSWIRE) -- Banco Santander Chile (NYSE: BSAC; SSE: Bsantander) announced today its unaudited results¹ for the three month period ended March 31, 2020 and first quarter 2020 (1Q20).

ROAE of 16.8% reached in the first quarter of 2020

Net income attributable to shareholders in 1Q20 increased 23.4% QoQ and 14.8% YoY, totaling Ch$ 144,014 million (Ch$ 0.76 per share and US$ 0.36 per ADR) and achieving an ROAE of 16.8% for the quarter, compared to 13.9% in 4Q19 and 15.3% in 1Q19.  In 1Q20, net income was driven by strong results from client activities and a higher inflation rate. Total operating profit before provisions for loan losses totaled Ch$491,962 million in 1Q20 and increased 12.5% compared to 1Q19.

Impact of Covid-19 on the operations of the Bank

January and February were strong months for the Bank with net income in 2M20 growing 39.1% compared to 2M19 and ROAE reached 18.9%. The first case of Covid-19 in Chile was on March 3. As the global Covid-19 crisis progressed, and border closures and quarantine measures were implemented in Chile during March, the monthly results of the Bank started to show the initial effects of the crisis with lower growth of fees, lesser gains from financial transactions due to more volatile markets, and higher provisioning.

Due to the social unrest experienced in Chile in 4Q19, the Bank had already experienced a dress rehearsal for tele-working and as more protests were expected in March and April, the Bank had accelerated implementation of technological infrastructure that would permit the Bank to continue operating in case of disruptions.  From mid-March, the Bank started to roll out the tele-working plan due to COVID-19. Currently 95% of our central office employees are working from home. At the same time 86% of our branches are open. Banking was deemed an essential service by the authorities, so in areas not under quarantine branches must be available.

In terms of transactionality, the reduction in clients coming to our branches is being supported by our digital channels with the amount of digital transactions increasing 7.4% in 1Q20 compared to the same period last year and digital clients have increased 22.2% in the last 12 months.

Measures taken by Chilean authorities

The Government has announced various initiatives for different segments of the Chilean population such as tax breaks and one-off payments to vulnerable households. The Government, Central Bank and CMF (our regulator) have been working together with the banks to provide measures to ensure that companies have access to funding during this crisis.