Download A New Bank, A New Leader

Banco Santander-Chile:
A New Bank, A New Leader
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AGENDA
 STABLE ECONOMY
 MERGER UPDATE
 A NEW BANK, A NEW LEADER
 SOLID STRATEGY FOR GROWTH
 CONCLUSIONS
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IMPROVED ECONOMIC OUTLOOK
2002
2003(f)
2004(f)
GDP
2.1%
3.4%
3.7%
INFLATION
2.8%
2.8%
3.0%
INTERNAL DEMAND
1.9%
2.9%
3.6%
AVG. EXCHANGE RATE
689
710
718
AVG. LOCAL INT. RATE
3.9%
3.2%
4.3%
LOAN GROWTH NOM.
4.6%
6.5%
8.0%
Source: Banco Central, INE and Grupo Santander forecasts
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SOME CONCERNS
 LOW INTEREST RATE ENVIRONMENT
 FUNDAMENTALS REMAIN STRONG, BUT CHILE
CONTINUES TO GROW BELOW ITS POTENTIAL:
 EXTERNAL SHOCKS
 GREATER RIGIDITY IN ECONOMY
 “WORN-OUT” RULING COALITON
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AGENDA
 STABLE ECONOMY / SOLID INDUSTRY
 MERGER UPDATE
 A NEW BANK, A NEW LEADER
 SOLID STRATEGY FOR GROWTH
 CONCLUSIONS
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MERGER UPDATE
 MERGER PROCESS MOSTLY DONE
 PENDING FULL IMPLEMENTATION:
 MERGER OF SYSTEMS, SHOULD BE DONE
DURING 1ST HALF OF 2003
 INTEGRATION OF BRANCH NETWORK FROM
CLIENT STAND POINT
 CULMINATION OF CREDIT REVIEW PROCESS
 DIRECT MERGER EXPENSES RECOGNIZED IN 2002.
SYNERGIES SHOULD EXCEED PREVIOUS
ESTIMATIONS
 MERGER TO BE COMPLETED IN LESS THAN 12
MONTHS (AUGUST 2003)
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AGENDA
 STABLE ECONOMY / SOLID INDUSTRY
 MERGER UPDATE
 A NEW BANK, A NEW LEADER
 SOLID STRATEGY FOR GROWTH
 CONCLUSIONS
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SANTANDER CHILE: MARKET LEADER
(Dec. 2002)
Amount
(US$mm)
Share
Santander De Chile
Assets
 Loans
 Client funds
 Net income
US$16,400
US$11,000
US$10,000
US$221
24.0%
24.4%
21.5%
30.7%
16.9%
18.6%
17.1%
10.3%
Employees
Branches
ATMs
Credit cards
Clients
Nº
8,314
347
1,119
945,000
1.5 million
19.8%
21.5%
30.7%
36.8%
15.8%
15.9%
21.9%
20.1%






Source: SBIF
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Market
share
Consumer
banking
Individual
banking
SME
banking
Corporate
banking
Insurance
brokerage
Securitiz.
Mutual funds
STRONG PRESENCE IN ALL SEGMENTS
SANTANDER
24.6%
XX
XX
XX
XX
XX
XX
XX
CHILE
17.6%
X
XX
XX
XX
XX
X
XX
X
X
BCI
10.2%
X
XX
XX
X
X
BBVA-BHIF
6.6%
X
X
XX
X
X
X
CITIBANK
3.3%
X
X
X
XX
XX
XX
SCOTIA
3.7%
X
X
X
X
X
Presence: Relevant:
Less relevant:
XX
X
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MOST PROFITABLE BANK IN CHILE
(Pre-tax ROE, %)*
* Santander is proforma. 2002 excludes merger costs for all Banks.
Source: SBIF
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AGENDA
 STABLE ECONOMY / SOLID INDUSTRY
 MERGER UPDATE
 A NEW BANK, A NEW LEADER
 SOLID STRATEGY FOR GROWTH
 CONCLUSIONS
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DRIVERS OF GROWTH
 IMPROVED BUSINESS MIX AND SPREAD
 IMPROVED ASSET MIX AND CLIENT SPREADS
 DIFFERENT STRATEGIES FOR DIFFERENT SEGMENTS
 FEE INCOME GROWTH
 LOW PENETRATION OF FEE INTENSIVE PRODUCTS IN CHILE
 5 KEY AREAS
 INCREASED EFFICIENCY THROUGH MERGER
 MERGER SYNERGIES WILL GIVE ANOTHER BOOST TO
SANTANDER CHILE’S FIRST CLASS EFFICIENCY INDICATORS
Merger results and an improving macroeconomic
outlook should allow Santander to sustain
performance and create value for its shareholders
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CONSERVATIVE CREDIT RISK POLICIES
 FOCUS ON COMPLETE CYCLE
 ADMISSION  FOLLOW-UP  RECOVERY
 RISK INDEPENDENT OF COMMERCIAL AREA
 APPROVAL IN COMMITTEES
 PREFERENCE OF CASH FLOW V/S COLLATERAL
 LOW COUNTRY LIMIT: 2% OF EQUITY
 GRUPO SANTANDER RATING SYSTEM
 CREDIT MAINTENANCE: 20% OF LOANS
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STRONG CAPITAL BASE
Capital/Risk weighted assets, Dec. 2002
BIS RATIO
14.3%
TIER I
10.1%
TIER II
4.2%
 HIGHEST RISK RATING IN LATIN AMERICA:
 S&P & FITCH: A- / MOODY’S: BAA1
 FINANCIAL STRENGTH: C+
 MINIMUM BIS RATIO REQUIRED IS 12%
 SUCCESSFUL SUB-BOND EXCHANGE OFFER
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AGENDA
 STABLE ECONOMY
 MERGER UPDATE
 A NEW BANK, A NEW LEADER
 SOLID STRATEGY FOR GROWTH
 CONCLUSIONS
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STRONG COMPETITIVE ADVANTAGES
Dominant
position
SAN Franchise
Asset quality/
Capitalization
Profitability/
Efficiency
Distribution
network/Client
base
Segmentation
Model
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This presentation may contain projections or other forward-looking statements related to Banco
Santander-Chile that involve risks and uncertainties. Readers are cautioned that these
statements are only predictions and may differ materially from actual future results or events.
Factors that could cause actual results to differ materially and adversely include, but are not
limited to: changes in general economic, business or political or other conditions in Chile or
changes in general economic or business conditions in Latin America, changes in capital
markets in general that may affect policies or attitudes towards lending to Chile or Chilean
companies, increased costs, unanticipated increases in financing and other costs or the inability
to obtain additional debt or equity financing on attractive terms. Readers are referred to the
documents filed by Banco Santander-Chile, Old-Banco Santander Chile and Banco Santiago with
the United States Securities and Exchange Commission, specifically the most recent filing on
Form 20-F which identifies important risk factors that could cause actual results to differ from
those contained in the forward-looking statements. All forward-looking statements are based on
information available to Banco Santander-Chile on the date hereof, and Banco Santander-Chile
assumes no obligation to update such statements.
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