Banco Santander Chile - Institutional Presentation - December 2020
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Banco
Santander
Chile
Institutional Presentation
December 2020
1
AGENDA
MACROECONOMIC ENVIRONMENT
SOLID FINANCIAL SYSTEM WITH GROWTH POTENTIAL
SANTANDER CHILE: LEADING BANK
ADVANCES IN OUR STRATEGIC INITIATIVES
2
Macroeconomic environment
Economy based on low debt and high rating
Chile: Key economic indicators Economy is highly diversified1
GDP by economic sector, %
Population1: 19.7mm Mining
10.5%
GDP2: US$267 billion 11.5% Manufacturing
GDP per capita3 (PPP): US$23,366 3.5% Construction
5.1% 10.6%
Commerce
Exports / GDP2: 28%
5.7% Transportation
Investment / GDP2 : 20%
10.9% Services
Net public debt / GDP3: 11% 34.0% Public admin.
8.2%
JCR: AA- / Mdy: A1/ SP: A/ Fishing and agriculture
Sovereign ratings: Fch: A
Others
Low public debt High sovereign rating5
Gross public debt, % GDP3
USA
120 Australia
UK
77 Chile
63
33 China
Japan
Peru
Chile Adv. Latam EM Mexico
Economies Brazil Ba2 Ba3 Baa3 Baa2 Baa1 A3 A2 A1 Aa3 Aa2 Aa1 Aaa
3
3
1. INE 2. BCCh, 3. IMF. 4. Moodys
Macroeconomic environment
Our largest commercial partners are China and USA
Exports: US$73 billion Imports: US$60 billion
Chemicals Energy
Copper;
; 6.5 Others; 52 Capital goods 12%
13.2
Pulp and
22%
forestry;
By products
By products
6.7 2.5
Wine;
Salmon; Other
5.4 intermediary
Agro, Consumer goods
fishing; Other 38%
8.7 goods
minerals;
5 28%
South
America; Rest Asia Others
7% 4% North
Rest Asia; 10 China; 39
Japan America
12 22%
By country
By country 2%
Japan; 9
North China South Ameria
America; 28% 20%
Europe; 17
13
Europe 4
17%
1. Source: Banco Central de Chile(BCCh), December 2020
Macroeconomic environment
Evolution of the pandemic
Population under different phases of
Population vaccinated (% of total) confinement (% of total)
60 100%
One
Al dose
menos una dosis
Twodosis
Dos doses 53.5 90%
Otras
50
80% regiones
70%
40 40.7 Región metropolitana
60%
50%
30
40%
30%
20
20%
10 10%
0%
15-ago 15-oct 15-dic 15-feb 15-abr
0
ene-21 feb-21 mar-21 abr-21 may-21
Phase
Fase 11 Phase2 2
Fase Phase3 3
Fase Phase4 4 Phase
Fase Fase 5 5
Phase 1 is the strictest lockdown
5 5
Source: OWID and Santander
Macroeconomic environment
Strong economic recovery in 2021
GDP Terms of trade
YoY real growth, % 2013 = 100
124
7.5 119
3.5 111
1.1 106
103 102
98
-5.8 2016 2017 2018 2019 2020 2021 (f) 2022(f)
2019 2020 (e) 2021 (f) 2022 (f)
Inflation Central Bank Monetary Policy Rates
Annual CPI inflation, % %
3.6 1.75
3.0 3.0 3.0 1.50
0.50 0.50
2019 2020 2021 (f) 2022 (f) 2019 2020 2021 (f) 2022 (f)
6 6
Soruce: Banco Central de Chile and Santander Chile estimates 6
Macroeconomic environment
Composition of Constitutional Convention
Participation: 43.4% 6,467,978 votes/ 14.9 million signed up
-4.75
Political system
Social rights
Subsidiary role of the state
Autonomous bodies of the state
24% 16% 18% 7% 17% 17%
Center Center
right left Left
Traditional parties Independents
7 7
AGENDA
MACROECONOMIC ENVIRONMENT
SOLID FINANCIAL SYSTEM WITH GROWTH POTENTIAL
SANTANDER CHILE: LEADING BANK
ADVANCES IN OUR STRATEGIC INITIATIVES
8
Solid financial system
Solid financial system
87%
Of total loans
As of Dec. 2020 Ch$bn US$ bn
25 16 in Top 6
Assets 323,127 441.16 Banks in Banks in banks
financial Increased financial
Loans 189,092 252.70 system Concentration system
88%
Deposits 144,422 197.18 2009 2020 Of total loans
in Top 6
Equity 22,170 30.27 banks
Net income 1,242 1.70 Evolution of Return on Equity (%)
NIM 3.6% 34.9
Cost of credit 1.7%
NPL ratio 1.6% 21.6
16.4
Coverage ratio 218.1% 14.5
18.0 17.5
Efficiency ratio 51.4% 14.2
ROAA 0.4%
5.6
ROAE 5.6% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Core capital 10.6%
Series1 Series2
BIS ratio 14.3%
No banking crisis in Chile since the beginning of the
1980’s thanks to prudent regulations and strong
supervisory bodies. 9
Source: CMF
Solid financial system
Financial indicators of the system 2020
Net income attr. to shareholders ROAE
Ch$bn Change YoY -53.5%
-6.3% 14.5%
-21.9% 1,179 12.8%
517 463 -21.2%
317 8.1%
-828.4%
5.4%
System System
-925 -5.7%
NIM Efficiency
4.0% 3.8%
3.4% 3.6% 533.0%
3.0%
44.6% 48.8% 51.4%
39.8%
System System
Soruce: CMF and Santander Chile estimates
10Solid financial system
Developed banking system with high growth potential
Loans to GDP (%)1
144
123
64 52 45 37
OECD Chile Brasil Colombia Peru Mexico
1 Loans to companies over GDP 2 Loans to individuals over GDP
The large corporates make up around 1% of all the The mortgage market is deep in Chile and many
companies, but have 80% of the total debt. households have long-term stable debt.
Commercial lending by type of client2 Debt households/GDP(%)3
38
93
62 48%
35%
7 17%
% number of debtors % of total debt
Chile Brasil Mexico
SME Corporates
1. Fuente: World Bank https://data.worldbank.org/indicator/FS.AST.PRVT.GD.ZS 2. Fuente: 3. Fuentes : https://tradingeconomics.com/country-list/households-
11
CMF dic 2020 debt-to-gdp?continent=america 09/2020Solid financial system
Calidad de activo estable durante distintos ciclos económicos
All financial institutions regulated by the CMF (previously the SBIF) use Chilean Bank GAAP as the accounting standard. The
main difference to other accounting standards is that under Chilean Bank GAAP, loan loss allowances are calculated based on
specific guidelines set by the local regulator, using an expected loss approach. Through the years, the local regulator has been
updating their standardized provisioning models, becoming more conservative. To date, the local regulator has announced
that it will not be adopting IFRS 9.
Total loans: Non-performing loans (NPL) and coverage (%)
2016: Standard 227%
2014: Changes to provisioning model July 2019: Standard
provisioning for mortgages (B1). provisioning model
models: Consumer Higher provisioning for SMEs (B1).
and Commercial for LTV > 90%
Economic Crisis
US and Europe 147%
136% 145%
12… 128% 130%
121% 123%
107%
89% 92%
84% Oct. 2019: Covid-19
73% Start of
social unrest
2.8% 2.9% 2.7% 2.6%
Feb 2010 Earthquake in 2.1% 2.0% 2.0% 2.0%
Maule Chile- 8.8Mw 1.8% 1.9% 1.9%
1.7%
and destructive Tsunami 1.4%
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Mar-19
Mar-20
Jun-09
Jun-13
Jun-17
Jun-10
Jun-11
Jun-12
Jun-14
Jun-15
Jun-16
Jun-18
Jun-19
Jun-20
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
Sep-09
Sep-10
Sep-11
Sep-12
Sep-13
Sep-14
Sep-15
Sep-16
Sep-17
Sep-18
Sep-19
Sep-20
NPL (1) Coverage (2)
12
1. Loans with 90 days or more overdue. 2. Stock of provisions divided by NPLs. Source: CMFSolid financial system
Competition has been consolidating throughout the years
Total loans to clients by bank
Santander
BCI
Banco de Chile Santander’s
growth has been
Itaú Corpbanca organic
Scotiabank throughout the
years, but
recently
acquired
Santander
Consumer Chile,
Banco Ripley an autofinancing
jun-2013 jun-2014 jun-2015 jun-2016 jun-2017 jun-2018 jun-2019 jun-2020
company.
…
2013 2015 2015 2016 2018 2018 2018 2018 2019
Ripley Scotiabank BCI Itaú BCI buys Scotiabank BCI Falabella Santander
moves its buys acquires acquires over acquires acquires moves its acquires
credit card Cencosud’s City Corpbanca, Walmart’s BBVA TotalBank CMR credit Santander
business credit card National in becoming credit card in Florida, card Consumer
into Banco business Florida, Itaú business USA business Finance, and
Ripley USA Corpbanca into Banco autofinancing
Falabella company
13Solid financial system
BIS III requirements already published
Introducing new capital requirements Phase In
Pillar II
0% - 4%
T1 or T2
C. Cyclical Buffer
0% - 2.5%
RWA
Systemic Buffer
1% - 3.5%
RWA 10.5%
Conservation
Buffer
T2 2.5% RWA
8%
3.5% RWA T2 – 2.0% Publications
Subordinated** + RWA
AT1 – 1.5% Regulation Published
Provisions
RWA
Systemic buffer YES
CET1 CET1
AT1, Pref. Stocks and Tier II YES
4.5% RWA 4.5% RWA
Operational risk YES
Capital deductions YES
Conservation and countercyclical buffer YES
** Subordinated bonds allowed up to 50% of the CET1
Creidt risk YES
Subordinated bonds YES
Pref. Stocks and CoCos YES
In general the new local norm is aligned with BIS III, Leverage YES
however the greatest innovation are in credit risk and Pillar II YES
Market risk YES
systemic charge.
Pillar III YES
14AGENDA
MACROECONOMIC ENVIRONMENT
SOLID FINANCIAL SYSTEM WITH GROWTH POTENTIAL
SANTANDER CHILE: LEADING BANK
ADVANCES IN OUR STRATEGIC INITIATIVES
15A leading bank
Santander Chile is the nation’s leading bank
Business and Results 12M20 (US$) YoY
Gross Loans 48.3bn 5.1%
Deposits 35.3 bn 7.0%
Equity 5.1 bn 53%
Attributable profit (YTD)1 726 mn (6.3%)
Network and Customers 12M20 Market Share
Clients 3.6 mn 25.9%2
Digital Clients 1.5mn 32.0%3
Offices 358 19.0%
Market Share 12M20 Rank
Loans3 18.6% 1
Deposits3 17.4% 2
Checking accounts2 25.9% 1
Bank credit cards4 25.0% 1
1. Attributable profit to shareholders. 2. Market share of clients with checking accounts, as of Dec. 2020. Source: CMF . 4. Excludes loans and deposits of Chilean
banks held abroad as of Dec 2020 4. Average yearly market share over clients that enter a website with a passkey. Excludes Banco Estado. Source: CMF. YTD avg as
of Dec. 2020
16A leading bank
Santander Group’s first significant foreign endeavor was in Chile
1978 1982 1989-1990 1993 1996 2002 2010 2019 2020
……………………………………………………………………………………………………………..…………………………………………………….….
Banco Chilean After the Santander Santander Santander Chile suffers Santander buys The pandemic
Santander economy fails. economic crisis, acquires merges with merges with one of the 51% of hits Chile,
enters the All Banks Banco Fincard, Banco Osorno Banco largest Santander Santander is
Chilean intervened. Santander sold principal credit and la Unión, Santiago, earthquakes in Consumer the bank gives
market, Banco C part of its loan card processor becoming the reaching a the history of Chile, an auto the most help
opening a Santander buys portfolio to the in the country, largest bank in market share the world. financing to its clients,
subsidiary over Banco Central Bank. and enters the the country. of 25%. Santander was Company. through grace
mainly aimed Español Chile, Banco mass market. Loan market 100% periods and
at foreign in liquidation. Santander buys share reaches operative the FOGAPE.
trade. back all of the 12%. next working
loan portfolio day.
and changes its
name officially
to Banco
Santander Chile
17A leading bank
Ownership structure
Composition of shareholders
Minority shareholders
Acción
T Rowe Price Group Inc 3.2% EE.UU.
Local Schroders PLC 2.6% UK
15.62% A F P Provida S A 1.4% Chile
A F P Habitat S A 1.4% Chile
AFP JPMorgan Chase & Co 1.4% EE.UU.
5.29%
35.0% GOVERNMENT OF SINGAPORE*
A F P Cuprum S A
1.0% SINGAPUR
1.0% Chile
ADR
11.91% Total return local A F P Capital S A 0.9% Chile
Grupo Banchile Corredores de Bolsa S.A 0.9% Chile
Santander stock since 2015 Wells Fargo & Co 0.6% EE.UU.
67.18% B.C.I.Corredor de Bolsa S.A. 0.6% Chile
INCA Investments LLC 0.6% EE.UU.
AVIVA LIFE AND PENSIONS UK LIMITED* 0.5% UK
Harding Loevner LP 0.5% EE.UU.
Santander Group owns 67.2%. We are listed on the Santiago Stock Vanguard Group Inc/The 0.5% EE.UU.
Exchange and the NYSE Larrain Vial S.A.Corredora de Bolsa
Santander Corredores de Bolsa Limitada
0.5% Chile
0.5% Chile
BlackRock Inc 0.5% EE.UU.
Average daily volume traded NORGES BANK* 0.4% NORUEGA
Renaissance Technologies LLC 0.4% EE.UU.
(US$ millions) Standard Life Aberdeen PLC 0.4% UK
SAUDI ARABIAN MONETARY AUTHORITY* 0.4% SaudI Arabia
Bolsa de Comercio de Santiago Bolsa de V 0.4% Chile
14.6
NYSE +1,500
Contacts with investors
A F P Modelo S A
ISHARES MSCI CHILE ETF*
QSUPER*
SAS TRUSTEE CORPORATION POOLED FUND*
0.3% Chile
0.3% EE.UU.
0.3% AUSTRALIA
0.3% Australia
8.1 ISHARES CORE MSCI EMERGING MARKETS ETF* 0.3% EE.UU.
Bolsa de in the year Itau Unibanco Holding SA 0.2% Brazil
Btg Pactual Chile S.A.Corredores de Bolsa 0.2% Chile
7.3 Comercio UBS GLOBAL ASSET MANAGEMENT LIFE * 0.2% UK
Bice Inversiones Corredores de Bolsa S.A. 0.2% Chile
CALIFORNIA PUBLIC EMPLOYEES RETIREMENT
12M20 SYSTEM* 0.2% EE.UU.
18
All numbers as of Dec. 2020
*Por cuenta de terceros al 27 de noviembre, 2020A leading bank
Strong corporate governance
Related to
Santander: 4
• 7 of 11 Board members are independent
Independent
non-related to • Independent board majority in main committees: Audit
Santander: 7 Committee, ALCO and Integral Risk Committee.
Female: 3
• Integrated Annual Report: GRI and SASB compliant
Male: 8
• Local regulations also protect investors: capital and
dividend requirements, related part lending, role of the Board
Our stocks are included in:
• Compliance division: oversees application of codes of
conduct; compliant with SOX and SEC & NYSE Corporate
Chile, MILA, Emerging Governance Guidelines and ECB Basel criteria.
Markets
We are supervised by the following:
Banco Santander´s corporate governance meets the highest
international standards and ensures a sustainable management
in the long run
19A leading bank
Our team
PRESIDENT & DIRECTOR OF
COUNTRY HEAD INTERNAL AUDITING
Claudio Melandri Oscar Gomez
CEO
Miguel Mata
DIRECTOR OF RETAIL HR DIRECTOR
DIRECTOR OF RISK
BANKING M. Eugenia de
Franco Rizza la Fuente
Pedro Orellana
DIRECTOR OF DIRECTOR OF DIRECTOR OF
MIDDLE-MARKET CLIENTS &
TECH & OPERATIONS
QUALITY
Luis Araya
Ricardo Bartel Carlos Volante
DIRECTOR OF SCIB DIRECTOR OF CFO
Andrés Trautmann ADMINISTRATION Emiliano Muratore
Sergio Ávila
PRODUCTS
Cristián Peirano GENERAL COUNSEL CONTROLLER
20
Cristián Florence Guillermo SabaterA leading bank
A diversified and universal bank
% of total loans % of total net income
70% 25% 5% 0.1%
34% 34% 27% 6%
Retail Middle-market Corporate Investment Corporate activities
Banking (SCIB)
■ Loans: 70% Individuals / 30% companies
Fishing 1%
■ High diversification by sector. ALL LOANS IN CHILE. Mining 1%
Forestry 1%
Basic services 1%
Individual: focus on growing in the mid-high income segments. Transport 2%
Selective growth in lower-end segments Construction 3%
Manufacturing 4%
SMEs: focus on larger SMEs, especially with a balanced flow of Agro 4%
income (lending and non-lending products) Mortgages
36% Services 8%
Middle-market: focus on non-lending business activities. Loans
as part of an integral client relationship
Others Commerce 11%
SCIB: strong focus on non-lending activities 13%
21
Consumer 14%
Up to Dec. 2020.A leading bank
Strong results in 4Q20
Quarterly net income attributable to
shareholders Quarterly ROAE
Ch$mn
+57.2%
+74.5%
183,435 20.4%
16.8%
144,014
116,707 12.5%
105,139
84,859 9.5%
4Q19 1Q20 2Q20 3Q20 4Q20 1Q20 2Q20 3Q20 4Q20
22A leading bank
NII increases 12.5% YTD
NIM1 & Inflation Net interest income
5.0%
4.2% 4.2% 4.3% Ch$ bn 12M20 YoY QoQ
3.8% 3.7%
4.0%
Net interest income 1,594 12.5% 16.3%
3.0%
Avg. Int. earning assets 39,800 15.8% 0.1%
2.0%
1.0% 1.3% Average loans 34,436 9.7% 0.9%
0.9%
1.0%
0.3% Int. earning asset yield3 5.6% -114bp +205bp
0.0%
0.0%
Cost of funds4 1.60% -108bp +148bp
4Q19 1Q20 2Q20 3Q20 4Q20
NIM YTD 4.0% -12bp +60bp
NIM (1) UF
Improved funding mix and higher inflation drives NIMs in 4Q20
23
1. Annualized Net interest income divided by average interest earning assets. 2. MPR: Monetary Policy Rate. 3.Annualized gross interest income divided by average interest
earning assets. 4. Annualized interest expense divided by sum of average interest bearing liabilities, including non-interest bearing demand deposits.A leading bank
Outpacing the system in NII growth and NIM evolution
Net interest income & NIM
Ch$bn, %
+3.2%
8,586
+12.5% - 4.1% 8,318
1,594 1,369
1,417 1,313
NIM 4.1% 4.0% 4.3% 3.9%
3.8% 3.6%
Santander Banco de Chile Financial system without
Santander
Dec-19 Dec-20
24
Source: CMF and Santander Chile estimatesA leading bank
Non-interest bearing demand deposits up 42.0% YoY
Total Deposits
Ch$bn
+7.0% Ch$ bnS 12M20 YoY QoQ
Demand deposits 14,561 41.4% 4.7%
-2.1%
Time deposits 10,582 (19.8%) (10.2%)
25,258 26,556 25,686 25,143 Total Deposits 25,143 7.0% (2.1%)
23,490
Mutual funds1 8,092 24.0% (2.8%)
Loans/Deposits2 100.3%
LCR3 155.4%
Dec-19 Mar-20 Jun-20 Sep-20 Dec-20
25
1. Banco Santander Chile is the exclusive broker of mutual funds managed by Santander Asset Management, a subsidiary of SAM Investment Holdings Limited. 2. (Net Loans – portion of
mortgages funded with long-term bonds) / (Time deposits + demand deposits). 3. LCR calculated following the new local Chilean modelsA leading bank
Improved funding mix & outpacing competitors
CLP Time Deposit Cost Evolution1 Demand deposits by segment
3.16%
3.00% Ch$ bn 12M20 YoY QoQ
2.92%
3.00% Individuals 5,600 53.5% 10.1%
SMEs 2,696 58.9% 7.0%
Retail 8,296 55.2% 9.1%
Middle Market 3,861 29.4% 5.9%
Corporate (SCIB) 2,117 29.0% (13.7%)
0.54%
0.50% Total 14,561 41.4% 4.7%
0.46%
0.39%
Santander Chile BCI MPR
26
1. Source: CMF. Quarterly Calculation is based on time deposit in CLP average and interest paid on time deposits in pesos.A leading bank
Retail loans lead growth in 4Q20
Total Loans Ch$ bn 12M20 YoY QoQ
Individuals1 19,363 2.8% 1.8%
Ch$bn
+5.1% Consumer 4,941 (10.8%) 0.3%
-1.4%
Mortgages 12,412 10.2% 2.5%
32,732 34,355 35,288 34,880 34,409 SMEs 4,916 20.3% 0.4%
Retail 24,279 5.9% 1.5%
Middle Market 8,136 0.5% (7.5%)
Corporate (SCIB) 1,704 2.0% (10.1%)
Total2 34,409 5.1% (1.4%)
Dec-19 Mar-20 Jun-20 Sep-20 Dec-20
FOGAPE loans disbursed each month
Ch$bn
Total disbursed up to December:
Ch$2.0 trillion
1,491
488 As of December 2020, 12.2% of
117
commercial loan book were
2Q20 3Q20 4Q20 FOGAPE loans
27
1. Includes other commercial loans to individuals. 2. Includes other non-segmented loans and interbank loansA leading bank
Record level of coverage
Total loans: Non-performing loans (NPL), coverage and cost of risk (%)
Includes Ch$126 bilioon in voluntary
Feb 2010 Earthquake in
Maule Chile- 8.8Mw
provisions and Ch$35 billion for FOGAPE 227%
and destructive Tsunami July 2019: Standard
2014: Changes to provisioning model
provisioning for SMEs (B1).
models: Consumer
Economic Crisis
and Commercial 148%
2016: Standard
US and Europe
118% provisioning model
for mortgages (B1). Covid-19
87% Higher provisioning
for LTV > 90%
71% Oct. 2019: Start of
social unrest
3.1% Sept 2015:Earthquake in
2.7% 2.8% Coquimbo, Chile – 8.3Mw
2.4% 2.6% 2.4% 2.5%
2.2% 1.9%
2.4% 1.4%
Caso La Polar 1.3%
Borronazo DICOM 1.0%
NPL (1) Costo of risk (3) System cost of risk (4) Coverage (2)
28 28
1. Loans with 90 days or more overdue. 2. Stock of provisions divided by NPLs. 3. Quarterly cost of risk= quarterly provision expenses/ average of quarterly loans 4.
Quarterly cost of risk for the financial system. Source: CMFA leading bank
Strong support to clients during the pandemic
COVID Solutions1 Cuota FOGAPE2
Reprogrammed
Santander
26%
23%
Rest
77%
• $9bn of loans with grace periods
• 26% of total loans received grace • #1 in FOGAPEs
periods • Ch$2 bn disbursed
• > than 300,000 digital • >35,000 clients benefited
reporgramming for personal loans
29 29
1. Reprograms are loans with grace periods between 3 and 6 months according to CMF norms for the pandemic. 2. FOGAPE: Loans under the
guaranteed fund for SMEs. Source: CMF, as of Dec. 2020A leading bank
Positive evolution of asset quality of COVID-19 Solutions
Total Covid Solutions
Ch$11,174 bn
Fogape Covid W/ payment holiday
Ch$2,076 bn (19%) Ch$9,098 Bn (81%)
Current Current
Expired Expired
Outstanding Outstanding
Ch$1,032 bn (50%) Ch$8,363 bn (92%)
Ch$1,044 bn (50%) Ch$ 735 bn (8%)
Paid Overdue Paid Overdue
Ch$1,027bn Ch$4 bn Ch$8,241bn Ch$122 bn
(99.6%) (0.4%) (99%) (1%)
(*) Contains second (*) Contains second
payment holiday for payment holiday for
three months (3+3) three months (3+3)
30
As of Dec. 31, 2020A leading bank
Cost of risk of 1.0% in 4Q20 includes Ch$50bn in additional provisions
Quarterly cost of risk1 Provision for loan losses
%
2.2% Ch$ bn 12M20 YoY QoQ
1.9%
Gross provisions
1.5% (586.0) 16.5% (32.3%)
1.2% and write-offs
1.0% Recoveries 74.9 (9.4%) (9.9%)
Provisions (511.1) 21.6% (35.8%)
Cost of risk(YTD) 1.48%
4Q19 1Q20 2Q20 3Q20 4Q20
In total we have established Ch$126 billion in additional provisions during
2019 and 2020.
31
1. Quarterly provision expense annualized divided by average interest earning assets.A leading bank
Fees rebound in 4Q20 led by card fees
Fees & financial transaction Fees
Ch$bn
Ch$ bn 12M20 YoY QoQ
-26.2% Card fees 73.3 35.3% 9.8%
Asset management 44.1 (6.9%) 0.9%
131.1 139.5 Insurance brokerage 39.8 (19.9%) 16.6%
97.3 99.1 73.1 Guarantees, cont. op. 36.3 3.5% (0.9%)
54.4 77.2 Checking accounts 34.8 (3.1%) 4.0%
22.8 37.5 4.1 Collection fees 23.2 (30.3%) 72.7%
76.7 74.4 62.3 61.6 69.0 15.8 (92.7%) 70.0%
Others
Total 267.3 (6.9%) 12.1%
4Q19 1Q20 2Q20 3Q20 4Q20
Net fee income Financial trx Financial transactions, net
Ch$ bn 12M20 YoY QoQ
Lower Non-client treasury results Client 145.2 4.4% (21.2%)
due to FX hedge of provision
Non-Client (3.6) (105.4%) 1,825.6%
expenses and liability management
Total 141.6 (31.6%) (89.2%)
32A leading bank
Efficiency at 39.8% in 2020. Cost growth under control
Operating expenses
Ch$bn
Ch$ bn 12M20 YoY QoQ
00 60.0%
-1.0% Personnel
408.7 (0.4%) (1.3%)
50 expenses
55.0%
Administrative
189 191 194 192 190 expenses
250.5 7.2% (2.3%)
00 50.0%
Depreciation 109.4 3.1% 3.3%
50 45.0%
Operational
40.6% 41.5% 768.5 2.5% (1.0%)
38.3% 38.9% 38.3% expenses1
00 40.0%
Efficiency
39.8% -23bp -326bp
50 ratio2
35.0%
Costs/assets 1.3% -36bp +6bp
0 30.0%
4Q19 1Q20 2Q20 3Q20 4Q20
Expenses Efficiency
33
1. Operational expenses exclude impairment and other operating expenses. 2. Efficiency ratio: operating expenses excluding impairment / financial margin +
fees+ financial transactions and net other operating incomeA leading bank
Core capital at 10.7%
Core capital and BIS ratio Dividend per stock
Ch$ per stock
15.4% 75%
12.9% 60%
4.7% 75% 70% 60%
2.7% 60%
2.25
10.1% 10.7% 1.79 1.75 1.88 1.76 1.65
Dec-19 Dec-20 2016 2017 2018 2019 2020 2021
Tier 1 Tier 2
In August, CMF published the new treatment of FOGAPE guarantees. Instead of
computing as Tier II, now it is included in Tier I and RWA reduced from 100% to
10%
34 34A leading bank
Among banks with best international rating
Risk rating, Moody’s scale
UOB
OCBC
DBS
ANZ
Westpac
SAN Chile
Banco de Chile
Estado
RBC
BCI
HSBC Moody’s (negative) A1
SAN
Wells Fargo
JCR (stable) A+
BofA Standard & Poor’s (negative) A-
JP Morgan
Goldman Sachs
ItauCorpbanca
Citibank
Deutsche Bank
Credit Suisse
Bradesco
Ba3 Ba2 Ba1 Baa3 Baa2 Baa1 A3 A2 A1 Aa3 Aa2 Aa1
35
Source: Moody’s via BloombergAGENDA
MACROECONOMIC ENVIRONMENT
SOLID FINANCIAL SYSTEM WITH GROWTH POTENTIAL
SANTANDER CHILE: LEADING BANK
ADVANCES IN OUR STRATEGIC INITIATIVES
36Advances in our strategic objectives
Strategic priorities
Declaration
Our Our vision
We want to be the best bank for our customers, leading in
purpose Be the best Bank
digital excellence and experience, gaining their loyalty
Help people acting responsibly
and gaining the Clients
and
businesses to loyalty of our
prosper clients, We want to be the best large company to work in Chile,
shareholders, attracting and developing talent, always committed to our
people and SPF culture
Employees
communities
We want to be the most profitable and sustainable bank,
with solid capital levels, attractive dividends and strong risk
Our way management
of doing Shareholders
things
Simple, We want to be recognized as a responsible bank that
Personal, contributes to the community
Fair
Community
We want everything we do to have a seal of excellence in execution
Excellence
37
in executionAdvances in our strategic objectives
Clients
Maintain a high level of consumer Transform the Bank into a platform
satisfaction, increase the productivity of all allowing clients to use the bank as a
channels, and be more efficient and channel or as a software provider to
profitable. develop business.
Give access to digital
CHANGE THE BANK
Reactive loan growth in economy
RUN THE BANK
mass segment, rewarding
positive financial behavior Increase SME access to
banks and to the digital
economy
More efficient and digital
branches
First insurtech in Chile,
platform to compare and
Become more sustainable purchase insurance
through eco-friendly
initiatives (i.e. Carbon
footprint compensation) Allows international
transfers instantaneously
and securely
Higher client fidelity
through the accumulation Comparison platform for
of miles and benefits autoinsurance
38Advances in our strategic objectives
Clients
Life: strong growth and quick monetization
Life
Digital product for unbanked population
that seeks to be part of Bank, receiving
merits for positive financial behavior
(through credit and savings)
New Life clients each year Life: Evolution of total gross revenues1
349,866 2020: Ch$43bn
104,885 2019: Ch$20 bn
32,567
481
2017 2018 2019 2020
2018: Ch$7 bn
+480,000
Total Life clients
39 39
1. Net interest income plus feesAdvances in our strategic objectives
Clients
Superdigital opening record new accounts monthly
Superdigital
Prepaid digital product for the unbanked
population seeking a low-cost bank
account
16%
Market share of
New Superdigital clients each year balance in prepaid
card market as of
111,543 Dec. 2020
18,301
With one of the
147
highest average
2018 2019 2020 balances in the
market
+129,000
Total SD clients
40 40Advances in our strategic objectives
Clients
Insuretech platforms driving insurance brokerage fee rebound
An online platform that compares An online platform that compares
insurance between different providers in insurance between different providers in
a quick and transparent way. a quick and transparent way.
20K -14%
NPS NPS Cheaper insurance
Visits on a 86 95 than the industry
monthly basis Jun-20 Dec-20
High range vehicles and +52%
75% Currently sell life
insurance (Apr 2020)
hybrids/electric cars
One of the few in the
Growth of insurance
policies in 2020
Are not Santander market to offer insurance
and sports insurance
clients of these vehicles
(Oct 2020)
+9,000
Insurance companies participating: Insurance policies
sold in November
alone, a record
month
41 41Advances in our strategic objectives
Clients
Opening 3x more checking accounts than the rest of banks
combined
Current account openings through 12M201
324,821
103,915 3x1
Advantage in checking
account opening1
Rest of banks
Current account market share Santander Chile1
25.9%
21.7%
Dec-19 Dec-20
42 42
1. Source: CMF, with latest available informationAdvances in our strategic objectives
Clients
Strength of digital channels has been a key force in 2020
+24% Net Promoter Score (NPS)2
Increase digital 51
47
clients compared
previous year 39 41 48
45
42
+33% 39 38
34 36
Increase in sales through 33
Mar-20 Jun-20 Sep-20 Dec-20
digital channels compared Santander Comp 1 Comp 2
to previous year
As of December 2020, Santander received:
Market share of digital clients1
Net score 66
Accesibility to Digital Channels
32% 34%
22% 20% Total Loyal Clients3
16% 14%
7% 6% 4% 3% 764,407
704,090 764,407
704,090
Santander BCI Banco de Scotiabank Itau
Chile dic-19 dic-20
sep-19 sep-20 Dec-19 Dec-20
43
1. Source: CMF as of last available information. Last 12 months yearly average. Based on clients who access there account with a password. Excludes Banco Estado. 2. Source: Study by Activa for Santander with a scope of 60,000 surveys to our own clients and over 1,200 surveys to each
competitor’s clients. Measures the Net Global Satisfaction and Net Promoter Score in three main aspects: service quality, product quality, and brand image. % of clients that value with grade 6 and 7 subtracted by clients that value with grade 1 through 4. Audited by an external provider.
For the 6 month moving average ended December 2020 3. Customers with 4 products plus a minimum profitability level and a minimum usage indicator, all differentiated by segment. SME + Middle-market cross-selling differentiated by client size using a point system that depends on
number of products, usage of products and income net of risk.Advances in our strategic objectives
Clients
Lanzamiento oficial de Getnet
Acquiring network that uses the four-part model to
operate, offering a payments solution to businesses
Pays instantaneously
Clients will be able to receive money
from their sales in a Santander account
up to five times in one day, including
holidays.
Different plans for different clients
There will be fixed or mobile POS, all with
a SIM card incorporated. Rebates for
integrated plans with Santander, and
insurance for “Protected Billing”. +14,000 +16,700
Clients POS sold
No more “Credit or debit?”
Cardholders will no longer need to answer
what type of card as the POS will 65% 15%
automatically detect it, making the Auto-installed Expected market
shopping experience more seamless. share in the next
three years
Accepts all cards, with
following brands:
44
Figures as of April 2021Advances in our strategic objectives
Clients
Work Café: An open environment for everyone
Its digital format fits perfectly for the Workcafé Community helps entrepeneurs
continue to grow:
post COVID-19 world.
Marketplace for
local entrepeneurs
Support through e-
learning, employment
offers, among others
Tools to help create website, digitize
sales systems, among others
Network of volunteers
to advise in several
subjects
• Open to anyone
• Free wifi
• Meeting rooms for free. Reserved online Presentations from experts and other
45 45
entrepeneurs sharing their knowledgeAdvances in our strategic objectives
Strong commitment to our employees Employees
54%
Female 14.5%
11.9%
46% 11.9% 11.3%
Male
8.2%
Ch$880,488 monthly
10,470 (US$14,675 yearly)
2016 2017 2018 2019 2020
Total employees Total rotation Minimum wage in Santander (vs
Ch$326,500 monthly or US$5,442 yearly)
Top 3 in Great Place to Work
Ranking GPTW
92
86 87
Top 1
Recognized firms with the best condidition
2018 2019 2020 to develop its collaborators personally and
We were recognized as being one of the best places to work profesionally
in the country in the category of institutions of over 1,000
employees
46 46Advances in our strategic objectives
Stock return versus local stock index Shareholders
Total return 2020
From December 31, 2015; %
35.03
13.50
Santander Chile IPSA
47
Source: Santiago Stock Exchange and BloombergAdvances in our strategic objectives
COVID-19 Solutions
• Financial Support: FOGAPE loans, reprogramming plan
• Virtual channels prioritized
• Digital products: Santander Life, Superdigital
Clients • Sanitary prevention in branches
• Health and work safety
• Teleworking implementation
Employees • Adaptation of corporate buildings
• Family and work life conciliation
• Remote shareholder’s meeting
• Santander Digital Talk 2020
Shareholders
• Corporate volunteering
• Social Support during the pandemci: estoslosuperamosjuntos.cl, etc.
Society • Innovation, entrepeneurship and employment: Work Café Community
• Strengthening of remote accesses and secure
• Generation of new products: Klare, Getnet
• Development of digital solutions to replace in-person processes
Technology • Digitalization of almost 100% of processes with suppliers
and
suppliers 48Advances in our strategic objectives
Reducing our impact on the environment
Carbon footprint Electricity consumption Paper consumption
(th. of tCO2eq) (th. of MWh) (th. tons)
18 16 29 28 1.5
1.3
11
24 0.7
2018 2019 2020 2018 2019 2020 2018 2019 2020
Target 2018-2021 Target 2018-2021 Target 2018-2021
-5% -7% -15%
Water consumption E-Waste
(th. m3) (th. tons)
149 148
103 103
32 23
2018 2019 2020 2018 2019 2020
49
Coverage 52% 87% 84%Advances in our strategic objectives
Santander Verde: our new products to help clients become greener
Carbon footprint Green Green Green
compensation Mutual Fund Mortgage Loan Benefits
Up to December 2020: First fund in Chile to allow Discounts with brands
• Alliance with real
2,543 tons of CO2 were clients to invest in that are eco-friendly
estate projects with
compensated through the companies in different using you Santander card.
LEED certificate for
purchase of carbon credits geographical regions with
sustainable
First milestone of a strong focus on Incentivizes recycling and
construction.
Contribution to Fundación sustainability reusable materials
• Clients are able to buy
Llampangui for a project in • Aimed at long term
these properties at a
Parque El Durazno in investors with an
preferential rate as
Coquimbo, Chile. Now aggressive risk profile
well as contributing to
contributing to Huilo Huilo • Investment
the compensate the
Foundation completely through
carbon footprint.
digital channels
Certified Carbon Credits
Supports the development
of renewable energy,
70% 30%
At least is invested in less water
conservation, reforestation consumption
Santander GO Global
Chilean environmental Equity ESG, a diversified
projects portfolio of around 90 12%
Contributes to non-profit positions managed by less energy
organization who seek to consumption
Boston Partners (Robeco)
conserve protected
50
ecosystems in Chile.Advances in our strategic objectives
We are highly ranked in various ESG indexes
S&P IPSA ESG
Included in Chile, Among retail Included in Included in S&P
MILA, and banks: Emerging Latam IPSA ESG index,
Emerging Markets and Emerging with the third
#1 #8 Global greatest weight
in the index
Among of 270 in
banks in world
Chile
51
51Thank You.
Our purpose is to help people
and business prosper.
Our culture is based on believing
that everything we do should be:
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