Banco Santander Chile Reports Q2 2026 Results: Full Earnings Call Transcript

On Wednesday, Banco Santander Chile (NYSE: BSAC ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

5%. The company's strategic focus is on becoming a digital bank with a physical presence, enhancing customer experience, and leveraging global platforms for increased efficiency and profitability. Economic challenges include external inflationary pressures and a weaker peso, but the passage of pro-market regulatory measures, such as the National Reconstruction Plan, is expected to support growth. Loan growth for 2026 is projected to be in the mid-single digits, driven by improved commercial and mortgage lending, with expectations of high single-digit growth in 2027.

Banco Santander Chile received significant external recognition for its ESG efforts, including being named Best Bank in Chile by Euromoney and inclusion in the Dow Jones Sustainability World Index. The bank anticipates return on average equity to be above 24% for the full year, supported by higher inflation and strong efficiency metrics. Management highlighted positive regulatory developments, such as potential capital efficiency improvements and the extension of mortgage interest rate subsidies, which are expected to benefit the bank.

Full Transcript OPERATOR Ladies and gentlemen, thank you for standing by, and I would like to welcome you to Banco Santander Chile's second quarter 2026 earnings conference call on August 5, 2026. Please note at this point all participant lines are in listen-only mode. After the call there will be an opportunity to ask questions. With this, I would now like to pass the line to Patricia Pérez, the Chief Financial Officer.

Please go ahead. Patricia Pérez, Chief Financial Officer Good morning everyone and thank you for joining us today. I am Patricia Pérez, CFO of Banco Santander Chile, and I'm joined by Cristián Vicuña, Head of Strategy and Investor Relations, and Andrés Ansone, Chief Economist. This quarter reinforces the strength of our franchise, high profitability, disciplined cost management and a solid capital position while we continue to execute our strategy to deliver a simpler and enhanced value proposition to customers with a focus on sustainable growth and shareholder returns.

First, Andrés will give you an overview of the economic and regulatory environment. Cristián will then walk you through our strategy, our second quarter results and our updated view for 2026. Finally, we will conclude with a Q&A session. With that, let me turn it over to Andrés Ansone.

Andrés Ansone, Chief Economist Thanks, Patricia. Let me start with the big picture. Since our last webcast, the global backdrop has remained complex. External inflationary pressures remain, with geopolitical tensions driving oil prices and an inflationary scenario for Chile.

At the same time, long-term rates have moved higher and expectations for monetary policy abroad have shifted upward, leaving global financial conditions less supportive. For Chile, this has translated into a weaker peso, around 930 pesos per dollar during the last month, and renewed pressures on short-term inflation. 3%, with the surprise mainly concentrated on food. 4% in 2026.

In the US, although two-year expectations remain anchored, the economy continued to lose momentum during the first half of the year. The weakness has been concentrated in three areas. First, supply shocks in natural resources sectors, particularly mining and fishing. Second, the impact of higher oil and fuel prices on household disposable income.

And third, a slower than expected recovery in construction. 3%. Looking ahead, activity should improve gradually. Mining production faces a more favorable comparison base in the coming months.

The mining and energy investment pipeline remains solid and the recent fall in fuel prices should help restore part of the disposable income lost during the oil shock. Pro-growth reforms, if approved and effectively implemented, can lift the country's potential growth over the medium term. Based on this information, our economic team has revised down its 2026 growth forecast, with the economy now expected to expand close to 1% this year, although the outlook for 2027 remains more constructive, supported by investment and a low comparison base.

5% for an extended period and overall the message is that inflation risks have increased again while activity, although improving at the margin, will remain weak this year, making the macro scenario more challenging and calling for a more cautious monetary policy stance now. Turning to the regulatory and policy environment on slide 5, the main development is the completion of the National Reconstruction Plan's bill passage through Congress. Yesterday the Senate approved the last outstanding provision. The bill is therefore now ready for enactment.

The bill includes several pro-market initiatives aimed at reactivating growth. On the business and investment side, the most relevant measures are the gradual reduction in the corporate tax rate from 27% to 23% between 2027 and 2029, the reintegration of the tax system, investment incentives and tax stability, faster permitting process, and reconstruction spend. We believe these measures should support private investment, improve business confidence and strengthen economic activity over time.

Moreover, the bill includes household support measures such as the temporary VAT exemption on new homes, housing reconstruction programs and improved housing affordability and employment support. If these are implemented effectively, these measures should support housing demand, mortgage origination and consumer activity. Complementing this, the government has just submitted a bill to extend and expand the mortgage interest rate subsidy and the FOGAES state guarantee for first home purchases.

The proposal raises the number of subsidies from 50,000 to 80,000, also lifts the maximum value of eligible new homes from 4,000 UF to 6,000 UF, and extends the program until May 2026. Combined with the temporary VAT exemption on new homes, this should improve affordability for middle-income households, help absorb the stock of more than 100,000 unsold units, and therefore has the potential to support mortgage origination and a recovery in the construction sector.

In addition, we continue to monitor other regulatory relevant changes including the repos and securitization law, the proposed model for market risk-weighted assets and the advances toward internal models for credit risk. With that, let me hand over to Cristian. Patricia Pérez, Chief Financial Officer Thank you, Andrés. I will now walk you through our strategy, our second quarter 2026 results, and our outlook for the rest of the year.

Let me start with the strategy. At the center of what we do is a clear ambition to become a digital bank with a physical presence. Leveraging our Work/Café branches to combine the convenience of the scale and the digital banking with advice, service, and proximity for our customers. Leveraging the support of the Santander Group and its global platforms, we organize this around three pillars.

First, Think Customer: we aim to offer the best value proposition to all our customer segments, grow active customers, increase transactionality, and deepen loyalty. 5 million active customers and we continue to see room to improve the customer experience, raise NPS, and capture a greater share of wallets, especially in higher value segments. Second, Think Global: we are accelerating our digital transformation through global platforms and an AI-enabled operating model. This allows us to simplify processes, improve the digital experience, deploy capabilities faster, and operate with greater agility, productivity, and efficiency in an increasingly dynamic environment.

Third, Think Value: our goal here is to translate the strong customer franchise and an efficient operating model into recurring high-quality profitability. This means continuing to diversify revenues, leveraging other income streams while maintaining a strong focus on returns and capital discipline. Overall, our strategy is designed to grow customers and loyalty, increase transactionality, improve the quality of revenues, and as a result deliver sustainable returns and an attractive payout to shareholders. This strategy is supported by a diversified platform with five complementary business lines.

Retail and Commercial remains the core of the franchise, where we are simplifying products and processes and continuing to build on the Work/Café model. Corporate and Investment Banking adds strength in advisory, FX, and transactional banking capabilities with a clear focus on sustainable solutions and capital optimization. Wealth Management and Insurance strengthens our advisory-led model, renews our private banking proposition, and reinforces our position in insurance and mutual funds. Consumer Banking supports our leadership in auto financing, including new and electric vehicles, while also expanding our presence in used car financing, and through Getnet.

Our payments business is helping us reach new client segments with value-added services and simple bundled solutions. Retail remains the backbone of the balance sheet, representing 66% of loans, 48% of deposits, and 69% of the margin. At the same time, we have meaningful contributions from CIB, payments, wealth, and the fee business. The Santander global platforms are helping us connect this business effectively, improve efficiency, and diversify revenues that supports stable profitability through the cycle and reinforces our ability to deliver attractive shareholders' returns.

Before we move on, I want to pause for a moment on something we are genuinely proud of: the external recognition our work has earned over the past year. It is a strong reflection of the progress we have made for our customers. Starting on the left with our awards and recognitions: recently, Euromoney named us Best Bank in Chile, Best Bank for ESG, and Best Bank for SMEs for 2026, three of their most important categories in a single year. This is in addition to the recognitions last year from LatinFinance and The Banker, where we were awarded the Best Bank in Chile for 2025, and Global Finance awarded us Best Bank for SMEs in 2025.

On the right, our ESG ratings and index inclusions tell a complementary story. For the first time this year, we were included in the Dow Jones Sustainability World Index. This is an outstanding achievement, being the only Chilean bank to qualify for the World Index. 4 of low risk.

These are independent, rigorous assessments, but they confirm that the way we grow matters to us. We also wanted to briefly comment on an announcement we made last week. Santander is taking the naming rights of one of Chile's most iconic venues. From September, the 15,000-seat arena at Parque O'Higgins becomes Santander Arena.

This venue is ranked by Pollstar among the top three venues in the world by annual attendance. More than just brand recognition, this move allows us to connect with clients and potential clients in a highly engaging setting. We can leverage our payment capabilities with simple services, an easy digital onboarding, offering concertgoers relevant, accessible solutions on the spot. This is a current example of the different ways we are implementing our strategy to become a digital bank and focusing on our customer needs and value creation.

Let me now move to our financial performance on slide 11. The second quarter showed exceptionally strong profitability supported by the particularly high inflation in the quarter and continued execution of our strategy. 6 billion pesos in the quarter, increasing 40% Q-on-Q and also 40% year on year. 2% year to date.

This quarter demonstrates the earning power of the bank when revenue tailwinds combine with strong efficiency and disciplined risk management, as shown on slide 12. Looking at the balance sheet, we saw better loan growth dynamics in the quarter while customer funds also increased. 3% quarter on quarter. 0% in the quarter in part due to the impact of higher inflation but also due to better new origination trends.

3%, where we saw an incipient improvement in demand from our clients. Consumer lending overall was relatively stable with some pressure in credit cards and installment loans, in part due to better liquidity for our clients in the quarter. 9% year to date. 5% Q-on-Q.

8% year to date and 7% on the quarter. And it is worth mentioning the better growth of demand deposits during the quarter. 1% year to date and 4% on the quarter. Liquidity remains strong, comfortably above regulatory requirements.

On slide 13, we can see our net interest income and margins in the first six months of 2026. 7%. 5% in the quarter. 3%, up 16 basis points year on year and 89 basis points Q-on-Q.

Client activity and expansion of our client base remain a central part of our story. 7 million active clients, meaning that 56% of total clients are active. 3% year on year. Activity indicators remain positive.

Checking accounts increased 6% year on year, credit card transactions increased 11%, mutual fund assets under management increased 8%, and we now have 519,000 business current accounts. 9% year on year. Within this, total fees were broadly stable year on year while results from financial transactions increased 16%. Supported by market-related income in the quarter, we saw slower dynamics coming from lower transactionality and customer demand impacted by oil prices and lower result from financial transactions after a strong quarter driven by demand for market-making products and higher income from portfolio sales.

On slide 15, efficiency continues to be one of Santander's key differentiators. 6% in the first half of 2026, positioning us as the most efficient bank in Chile based on the industry information available as of May. 5%. This continues to reflect the benefits of our digital model, operating discipline, and the normalization of technology-related costs after the cloud migration expenses that we had at the beginning of last year.

1%, meaning that fees generated from clients cover more than 60% of our core expenses. This reflects the benefits of our digital model and ongoing optimization of our branch network, reaching 91 Work/Cafés throughout Chile. On slide 16, we show an overview of our cost of risk and asset quality. On the asset quality side, trends remain stable.

55% in the first quarter, after the one-off provisioning event in the commercial portfolio at the beginning of the year was subsequently reversed in recent months. The bank continues to actively manage different parts of the portfolio. 5% of loans. These indicators show a moderate increase, but the overall trend remains manageable and consistent with the macro environment.

Capital remains a strength. 1% as of June 2026. 08% for 2026. Risk-weighted assets remain mainly concentrated in credit risk, which accounts for around 70% of total risk-weighted assets, while market risk represents 18% and operational risk 12%.

The risk-weighted asset density stands at 62%. We also see positive regulatory developments. The proposed new model for market risk-weighted assets would incorporate the duration model for interest rate risk and improve netting of the hedge positions used to mitigate interest rate risk.