A New Bank, A New Leader
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Transcript 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
2
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
5
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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