Banco Santander Chile Q4 2025 Banco Santander Chile Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Banco Santander Chile Earnings Call
Speaker #1: Ladies and gentlemen, thank you for
Speaker #1: standing by, and I'd like to welcome you to Banco Santander-Chile's fourth quarter 2025 earnings conference call. On the 5th of February, 2026, please note that at this point, all participant lines are in listen-only mode.
Speaker #1: to ask questions. So with After the call, there'll be an opportunity this, I would now like to pass the line to Patricia Pérez, the Chief Financial Officer.
Speaker #1: Please go ahead.
Patricia Pérez: Good morning, everyone, and welcome to Santander Santander Chile Q4 2025 Results Webcast and Conference Call. This is Patricia Pérez, CFO, and I'm joined today by Cristian Vicuña, Head of Strategy and Investor Relations, and Lorena Palomeque, our economist.... Thank you all for joining us today as we review our performance and results for the Q4.
Speaker #2: Good morning, everyone, and welcome to Banco Santander-Chile's fourth quarter 2025 results webcast and conference call. This is Patricia Pérez, CFO, and I'm joined today by Cristian Vicuna, Head of Strategy and Investor Relations, and Lorena Palomeche, our Economist.
Speaker #2: Thank you all for joining us today as we review our performance and results for the fourth quarter. Lorena will begin with an overview of the economic environment, followed by Cristian, who will walk you through our strategic priorities and fourth quarter results.
Patricia Pérez: Lorena will begin with an overview of the economic environment, followed by Cristian, who will walk you through our strategic priorities and fourth quarter results. We will then conclude with a Q&A session.
Patricia Pérez: Lorena will begin with an overview of the economic environment, followed by Cristian, who will walk you through our strategic priorities and fourth quarter results. We will then conclude with a Q&A session.
Speaker #2: We will then conclude with a Q&A
Lorena Palomeque: Thank you. Throughout 2025, Chile's macroeconomic environment continued to improve gradually after several years of significant adjustment. Inflation maintained a clear downward trend and continued converging toward target, which allows monetary policy to move away from a clearly restrictive stance. As a result, financial conditions became progressively more supportive, helping to stabilize economic activity. Here on slide four, we can see the regulatory and policy environment. A key development in 2025 was the implementation of the Mortgage Subsidy Law, aimed to lowering effective borrowing costs and supporting the recovery of housing demand. This measure is particularly relevant in a context where affordability constraints and higher interest rates have significantly affected mortgage origination in previous years. While the impact is gradual, it represents an important step toward reactivating a strategic sector for the economy. In parallel, there were important advances in the regulatory modernization agenda.
Lorena Palomeque: Thank you. Throughout 2025, Chile's macroeconomic environment continued to improve gradually after several years of significant adjustment. Inflation maintained a clear downward trend and continued converging toward target, which allows monetary policy to move away from a clearly restrictive stance. As a result, financial conditions became progressively more supportive, helping to stabilize economic activity. Here on slide four, we can see the regulatory and policy environment. A key development in 2025 was the implementation of the Mortgage Subsidy Law, aimed to lowering effective borrowing costs and supporting the recovery of housing demand. This measure is particularly relevant in a context where affordability constraints and higher interest rates have significantly affected mortgage origination in previous years. While the impact is gradual, it represents an important step toward reactivating a strategic sector for the economy. In parallel, there were important advances in the regulatory modernization agenda.
Speaker #3: Thank
Speaker #3: you. Throughout session. 2025, Chile's macroeconomic environment continued to improve gradually after several years of significant adjustment. Inflation maintained a clear downward trend and continued converging toward targets, which allowed monetary policy to move away from a clearly restrictive stance.
Speaker #3: As a result, financial conditions became progressively more supportive, helping to stabilize economic activity. Here, the regulatory and policy environment—a key development in 2025—was the implementation of the mortgage subsidy law, aimed at lowering ineffective borrowing costs and supporting the recovery of housing demand.
Speaker #3: This measure is particularly relevant in a context where affordability constraints and higher interest rates have significantly affected mortgage origination in previous years. While the impact is gradual, it represents an important step toward reactivating a strategic sector for the economy.
Speaker #3: In parallel, there were important advances in the regulatory modernization agenda. Progress on fintech and open finance for greater data law established the foundations for portability, stronger competition among financial institutions, and increased innovation in digital financial services.
Lorena Palomeque: Progress on the Fintech and Open Finance Law established the foundations for greater data portability, a stronger competition among financial institutions, and increased innovation in digital financial services. Over time, this framework should enhance efficiency, improve customer outcomes, and support the development of new financial solutions while maintaining appropriate risk management standards. In addition, initiatives such as the Sectoral Permits Law are designed to simplify and eliminate redundant regulatory approvals. By reducing administrative complexity and execution risks, these measures aim to lower barriers to investment and accelerate project development. Together, with a continued focus on fiscal adjustment and spending efficiency, they contribute to a more predictable and sustainable policy framework. The new administration will assume office in March 2026, with an agenda that includes three economic policy initiatives that may provide additional stimulus to economic activity in the period ahead.
Lorena Palomeque: Progress on the Fintech and Open Finance Law established the foundations for greater data portability, a stronger competition among financial institutions, and increased innovation in digital financial services. Over time, this framework should enhance efficiency, improve customer outcomes, and support the development of new financial solutions while maintaining appropriate risk management standards. In addition, initiatives such as the Sectoral Permits Law are designed to simplify and eliminate redundant regulatory approvals. By reducing administrative complexity and execution risks, these measures aim to lower barriers to investment and accelerate project development. Together, with a continued focus on fiscal adjustment and spending efficiency, they contribute to a more predictable and sustainable policy framework. The new administration will assume office in March 2026, with an agenda that includes three economic policy initiatives that may provide additional stimulus to economic activity in the period ahead.
Speaker #3: Over time, efficiency and improve customer outcomes and support the development of new financial solutions, while maintaining appropriate risk management standards. In addition, initiatives such as the sectorial permits law are designed to simplify and eliminate redundant regulatory approvals.
Speaker #3: By reducing administrative complexity and execution risks, these measures aim to lower barriers to investment and accelerate project development. Together, with a continued focus on fiscal adjustment and spending efficiency, they contribute to a more predictable and sustainable policy framework.
Speaker #3: The new administration will assume office in March 2026, with an agenda that includes three economic policy initiatives that may provide additional stimulus to economic activity in the period ahead.
Lorena Palomeque: Based on public communication, communications, we expect an emphasis on larger scale investment projects, alongside efforts to simplify permitting process and technical requirements in order to reactivate key sectors of the economy. These measures could have positive spillovers for construction activity, housing supply, and private investment more growth. Another potential initiative is a reduction in the corporate tax rate. Currently, Chile's corporate tax rates stand at 27%, and President-elect Kast has indicated an initial target of reducing it to 23%. This would help improve competitiveness and attract domestic and foreign investment. Any such change, changes would likely be phased in over several years to mitigate fiscal impacts. In parallel, the administration has highlighted the importance of improving spending efficiency and strengthening fiscal sustainability through enhanced budget allocation and expenditure review, review processes.
Lorena Palomeque: Based on public communication, communications, we expect an emphasis on larger scale investment projects, alongside efforts to simplify permitting process and technical requirements in order to reactivate key sectors of the economy. These measures could have positive spillovers for construction activity, housing supply, and private investment more growth. Another potential initiative is a reduction in the corporate tax rate. Currently, Chile's corporate tax rates stand at 27%, and President-elect Kast has indicated an initial target of reducing it to 23%. This would help improve competitiveness and attract domestic and foreign investment. Any such change, changes would likely be phased in over several years to mitigate fiscal impacts. In parallel, the administration has highlighted the importance of improving spending efficiency and strengthening fiscal sustainability through enhanced budget allocation and expenditure review, review processes.
Speaker #3: Based on public communication, we expect an emphasis on large-scale investment projects alongside efforts to simplify permitting processes and technical requirements in order to reactivate key sectors of the economy.
Speaker #3: These measures could have positive spillovers for construction activity, housing supply, and private investment more broadly. Another potential initiative is a reduction in the corporate tax rate currently.
Speaker #3: Chile's corporate tax rates stand at 27%, and President-elect Castro has indicated an additional target of reducing it to 23%. This would help improve competitiveness and attract domestic and foreign investment.
Speaker #3: Any such change would likely be faced in several other years to mitigate fiscal impacts. In parallel, the administration has highlighted the importance of improving spending efficiency and strengthening fiscal sustainability through enhanced budget allocation and expenditure review processes.
Lorena Palomeque: It is important to note that the implementation of these initiatives will depend on congressional approval. While the new administration is close to achieving a majority, legislative dynamics will play a key role in shaping the scope, timing, and final design of any policy changes. As we can see on slide 5, one of the most encouraging developments in recent months has been the improvement in confidence. Business confidence followed a steady upward trend and moved gradually into optimistic territory at the beginning of 2026. Also, differences across sectors persist. Commerce confidence is now firmly in positive territory, while construction, one of the sectors most negatively affected since the onset of the pandemic, has shown a significant improvement in recent months. This matters because confidence is a key indicator for investment and credit demand.
Lorena Palomeque: It is important to note that the implementation of these initiatives will depend on congressional approval. While the new administration is close to achieving a majority, legislative dynamics will play a key role in shaping the scope, timing, and final design of any policy changes. As we can see on slide 5, one of the most encouraging developments in recent months has been the improvement in confidence. Business confidence followed a steady upward trend and moved gradually into optimistic territory at the beginning of 2026. Also, differences across sectors persist. Commerce confidence is now firmly in positive territory, while construction, one of the sectors most negatively affected since the onset of the pandemic, has shown a significant improvement in recent months. This matters because confidence is a key indicator for investment and credit demand.
Speaker #3: It is important to note that the implementation of these initiatives will depend on congressional approval. While the new administration is close to achieving a majority, legislative dynamics will play a key role in shaping the scope, timing, and final design changes of any policy.
Speaker #3: As we can see on slide five, one of the most encouraging developments in recent months has been the improvement in confidence. Business confidence, followed by a steady upward trend and move gradually into optimistic territory at the beginning of sectors persist.
Speaker #3: 2026, also differences across Commerce confidence is now firmly in positive territory, while construction, one of the sectors most negatively affected since the onset of the pandemic, has shown a significant improvement in recent months.
Speaker #3: This matters because confidence is a key indicator for investment and credit demand. What we are observing is an economy that is gradually shifting from a defensive stance toward a more constructive mindset in which companies begin to reactivate investment decisions and households may start to incorporate these improved environments in their financial planning.
Lorena Palomeque: What we are observing is an economy that is gradually shifting from a defensive stance toward a more constructive mindset, in which companies begin to reactivate investment decisions, and households may start to incorporate this improved environment in their financial planning. On slide 6, we can see how the economy has been performing and what we expect for the coming years. Chile remained on a growth trajectory despite a challenging external environment and a still fragile labor market. The economy is estimated to have expanded by 2.3% in 2025, driven by a recovery in domestic demand. In particular, economic activity benefited from a strong increase in investment, driven by the execution of larger scale investment projects in the mining and energy sectors. In contrast, residential construction remains under pressure. Meanwhile, private consumption recovered rather gradually over the year.
Lorena Palomeque: What we are observing is an economy that is gradually shifting from a defensive stance toward a more constructive mindset, in which companies begin to reactivate investment decisions, and households may start to incorporate this improved environment in their financial planning. On slide 6, we can see how the economy has been performing and what we expect for the coming years. Chile remained on a growth trajectory despite a challenging external environment and a still fragile labor market. The economy is estimated to have expanded by 2.3% in 2025, driven by a recovery in domestic demand. In particular, economic activity benefited from a strong increase in investment, driven by the execution of larger scale investment projects in the mining and energy sectors. In contrast, residential construction remains under pressure. Meanwhile, private consumption recovered rather gradually over the year.
Speaker #3: see how the economy has been performing and what we expect for the coming years. Chile remained on On slide six, we can a growth trajectory despite a challenging external environment and a still fragile labor market.
Speaker #3: The economy is estimated to have expanded by 2.3% in 2025, driven by a recovery in domestic demand. In particular, economic activity benefited from a strong increase in investment, driven by the execution of large-scale investment projects in the mining and energy sectors.
Speaker #3: In contrast, residential construction remains under pressure, meanwhile private consumption recovering gradually over the year. Regarding inflation, after the application associated with the adjustment of electricity tariffs at the beginning of the year, the consumer price index followed a downward trajectory, closing the year at 3.5%.
Lorena Palomeque: Regarding inflation, after the applications associated with the adjustment of electricity tariffs at the beginning of the year, the consumer price index followed a downward trajectory, closing the year at 3.5%... With inflation expectation well anchored in the medium term and a limited output gap, the central bank continued its normalization process, lowered the monetary policy rate to 4.5% in December 2025, and gradually approaching its neutral level. The labor market gained some traction over the course of the year. Also, vulnerabilities remain. During the first half of the year, job creation was limited, but this shifted in the second half when employment began to increase. As a result, the unemployment rate closed the year at 8%, averaging 8.5% over the year, the same level as in 2024.
Lorena Palomeque: Regarding inflation, after the applications associated with the adjustment of electricity tariffs at the beginning of the year, the consumer price index followed a downward trajectory, closing the year at 3.5%... With inflation expectation well anchored in the medium term and a limited output gap, the central bank continued its normalization process, lowered the monetary policy rate to 4.5% in December 2025, and gradually approaching its neutral level. The labor market gained some traction over the course of the year. Also, vulnerabilities remain. During the first half of the year, job creation was limited, but this shifted in the second half when employment began to increase. As a result, the unemployment rate closed the year at 8%, averaging 8.5% over the year, the same level as in 2024.
Speaker #3: With inflation expectations well anchored in the medium-term and a limited output gap, the central bank continued its normalization process, lowered the monetary policy rate, 4.5% in December 2025, and gradually approaching its neutral level.
Speaker #3: The labor market gained some traction over the course of the year. Also, vulnerabilities remain. first half of the year, job creation was limited, but this shifted in the second half when employment began to increase.
Speaker #3: As a result, During the the unemployment rate closed the year at 8%, averaging 8.5% over the year the same level as in 2024. For the next years, we expect gradually as activity recovers.
Speaker #3: As a result, During the the unemployment rate closed the year at 8%, averaging 8.5% over the year the same level as in 2024. For the next years, we expect labor market conditions to improve Looking ahead to 2026, inflation is expected to remain marginally below the 3% target, while an additional cut to the monetary policy rate is anticipated in the first half of the year, taking it to an estimated neutral level of 4.25%.
Lorena Palomeque: For the next years, we expect labor market conditions to improve gradually as activity recovers. Looking ahead to 2026, inflation is expected to remain marginally below the 3% target, while an additional cut to the monetary policy rate is anticipated in the first half of the year, taking it to an estimated neutral level of 4.25%. Economic activity is projected to expand between 2.1% and 2.4%, broadly in line with trend growth, before picking up in 2027. So even as our global risk remains elevated amid geopolitical tensions and increasing economic fragmentation, the local outlook appears more constructive. At the domestic level, expectation of a more market-friendly policy environment, combined with regulatory simplification and a stronger focus on competitiveness and investment, should translate into an improvement in business climate.
Lorena Palomeque: For the next years, we expect labor market conditions to improve gradually as activity recovers. Looking ahead to 2026, inflation is expected to remain marginally below the 3% target, while an additional cut to the monetary policy rate is anticipated in the first half of the year, taking it to an estimated neutral level of 4.25%. Economic activity is projected to expand between 2.1% and 2.4%, broadly in line with trend growth, before picking up in 2027. So even as our global risk remains elevated amid geopolitical tensions and increasing economic fragmentation, the local outlook appears more constructive. At the domestic level, expectation of a more market-friendly policy environment, combined with regulatory simplification and a stronger focus on competitiveness and investment, should translate into an improvement in business climate.
Speaker #3: Economic activity is projected to expand between 2.1% and and 2.4%, probably in line with trend growth before picking up in 2027. So even as a geopolitical tensions and increasing economic fragmentation, the local outlook appears more global risk remains elevated amid constructive.
Speaker #3: At the domestic level, expectations environment, combined with regulatory simplification and a stronger focus on competitiveness and investment, should translate into an improvement business planning.
Lorena Palomeque: This environment is supportive of a gradually recovering and credit demand as confidence improves and financial conditions ease. Importantly, this recovery is likely to be more balanced and sustainable than in previous cycles, supported by stronger macro fundamentals and a more resilient financial system. I will now hand over to Cristian for the rest of the presentation.
Lorena Palomeque: This environment is supportive of a gradually recovering and credit demand as confidence improves and financial conditions ease. Importantly, this recovery is likely to be more balanced and sustainable than in previous cycles, supported by stronger macro fundamentals and a more resilient financial system. I will now hand over to Cristian for the rest of the presentation.
Speaker #3: This environment is supportive of a gradually recovering credit demand as confidence improves and financial conditions ease. Importantly, the recovery is more sustainable than in previous cycles, supported by stronger macro fundamentals and a more resilient financial system.
Speaker #3: recovery is likely to be more balanced and to Christian for the rest of the presentation.
Speaker #2: Thank you, Lorena. On slide seven, we outlined our strategy to create value for all our stakeholders anchored in our vision of being a digital bank with WorkFS.
Cristian Vicuña: Thank you, Lorena. On slide seven, we outlined our strategy to create value for all our stakeholders, anchored in our vision of being a digital bank with heart. Our focus remains on attracting and activating new clients, understanding their needs, and deepening engagement. We continue to target more than 5 million clients by 2026, while steadily increasing our active customers. At the same time, we're building a global platform that leverages artificial intelligence and process automation to scale efficiently. This supports lower cost per active client and reinforces operational excellence. Our goal is to sustain an efficiency ratio in the mid-30s or better, reflecting a disciplined and digital operating model. We are also broadening our transactional and non-credit fee-generating services. This supports double-digit fee growth and best-in-class recurrence, defined as fee income over structural operating expenses.
Cristian Vicuña: Thank you, Lorena. On slide seven, we outlined our strategy to create value for all our stakeholders, anchored in our vision of being a digital bank with heart. Our focus remains on attracting and activating new clients, understanding their needs, and deepening engagement. We continue to target more than 5 million clients by 2026, while steadily increasing our active customers. At the same time, we're building a global platform that leverages artificial intelligence and process automation to scale efficiently. This supports lower cost per active client and reinforces operational excellence. Our goal is to sustain an efficiency ratio in the mid-30s or better, reflecting a disciplined and digital operating model. We are also broadening our transactional and non-credit fee-generating services. This supports double-digit fee growth and best-in-class recurrence, defined as fee income over structural operating expenses.
Speaker #2: Our focus remains on attracting and activating new clients, understanding their needs, and deepening engagement. We continue to target more than 5 million clients by 2026, while steadily increasing our active customers.
Speaker #2: At the same time, we're building a global platform that leverages artificial intelligence and process automation to scale efficiently. This supports lower cost per active client and reinforces operational excellence.
Speaker #2: Our goal is to sustain an efficiency ratio in the a disciplined and digital mid-30s or better, reflecting operating model. We are also broadening our transactional and non-credit fee-generating services.
Speaker #2: double-digit fee growth and This supports best-in-class recurrence, defined as fee income over structural operating expenses. As our client base grows, activity levels continue to increase, particularly in payments.
Cristian Vicuña: As our client base grows, activity levels continue to increase, particularly in payments. Our digital ecosystem encourages frequent and seamless interactions, strengthening engagement and loyalty. This growth is supported by strong CET1 levels, ensuring that expansion remains sound, responsible, and aligned with regulatory expectations. Together, this strategy position us to deliver attractive value creation, with ROEs above 20% and a dividend payout ratio of between 60% to 70%. On slide 8, we can already see how our strategy over the last few years has succeeded in changing our income mix and creating a more efficient and profitable bank. Our key measure of value creation has been the strong growth in ROE, which has increased by more than 6 percentage points, more than double the improvement seen in the industry, while maintaining solid capital ratios throughout the implementation of Basel III.
Cristian Vicuña: As our client base grows, activity levels continue to increase, particularly in payments. Our digital ecosystem encourages frequent and seamless interactions, strengthening engagement and loyalty. This growth is supported by strong CET1 levels, ensuring that expansion remains sound, responsible, and aligned with regulatory expectations. Together, this strategy position us to deliver attractive value creation, with ROEs above 20% and a dividend payout ratio of between 60% to 70%. On slide 8, we can already see how our strategy over the last few years has succeeded in changing our income mix and creating a more efficient and profitable bank. Our key measure of value creation has been the strong growth in ROE, which has increased by more than 6 percentage points, more than double the improvement seen in the industry, while maintaining solid capital ratios throughout the implementation of Basel III.
Speaker #2: Our digital ecosystem encourages frequent and seamless interactions, strengthening engagement and loyalty. This growth increases CET1 levels, ensuring that expansion remains sound, responsible, and aligned with regulatory expectations.
Speaker #2: Together, this strategy positions us to deliver attractive value creation with ROEs above 20% and a dividend payout ratio of between 60 to 70%. On slide eight, we can already see how our strategy over the last few years has succeeded in changing our income mix and creating a more efficient and profitable creation has been the strong growth in bank.
Speaker #2: ROE, which has increased Our key measure of value by more than 6 percentage points more than double the improvement seen in the industry while maintaining solid capital ratios throughout the implementation of Basel III.
Cristian Vicuña: This has been supported by a 4 percentage point improvement in efficiency, compared to 1 percentage point for the industry, reflecting disciplined cost control and the successful execution of our digital transformation. At the same time, fee income has increased from 15% to 21% participation of our total revenues, driven by client growth and the expansion of non-credit services, including digital accounts, cards, asset management, brokerage, and acquiring. Industry revenue composition has remained broadly unchanged. This shift has driven our recurrence ratio to the best-in-class levels, now above 63%, well ahead of peers. We're very proud of the success of our study we have so far. As you will see later on, we are enthusiastic about the evolution of our results in the coming year. Now, in slide 10, we will take a closer look at the results this year.
Cristian Vicuña: This has been supported by a 4 percentage point improvement in efficiency, compared to 1 percentage point for the industry, reflecting disciplined cost control and the successful execution of our digital transformation. At the same time, fee income has increased from 15% to 21% participation of our total revenues, driven by client growth and the expansion of non-credit services, including digital accounts, cards, asset management, brokerage, and acquiring. Industry revenue composition has remained broadly unchanged. This shift has driven our recurrence ratio to the best-in-class levels, now above 63%, well ahead of peers. We're very proud of the success of our study we have so far. As you will see later on, we are enthusiastic about the evolution of our results in the coming year. Now, in slide 10, we will take a closer look at the results this year.
Speaker #2: This has been supported by a 4 percentage point improvement in efficiency, compared to 1 percentage point for the industry, reflecting discipline cost control and the successful execution of our digital transformation.
Speaker #2: At the same time, fee income has increased from 15% to 21% participation of our total revenues, driven by client growth and the expansion of non-credit services, including digital accounts, cards, asset management, brokerage, and acquiring.
Speaker #2: revenue composition has remained Industry shift has driven our best-in-class levels, now broadly unchanged. This above 63%, well ahead of peers. We're very proud of the success of our study so far.
Speaker #2: As you will recurrence ratio to the see later on, we are enthusiastic about the evolution of our results in the coming year. Now, in slide 10, we will take a closer look at the results December, the bank this year.
Cristian Vicuña: As of December, the bank generated net income of CLP 1,053 billion, up 23% year-on-year. This resulted in a return on average equity of 23.5% and an efficiency ratio of 36%. Growth was supported by a 9% increase in fee income and an 8% rise in financial transactions. Mutual funds grew 7%, and the recurrence ratio reached 63.7% year to date. Net interest income, including readjustment income, increased 11% year-on-year, while NIMs remained stable at 4%.... Our capital CET1 ratio stands at 11%, and we are provisioning a 60% dividend payout to be paid in April next year. We also began 2026 with a successful $500 million, five-year 144A issuance at a rate of 4.55%.
Cristian Vicuña: As of December, the bank generated net income of CLP 1,053 billion, up 23% year-on-year. This resulted in a return on average equity of 23.5% and an efficiency ratio of 36%. Growth was supported by a 9% increase in fee income and an 8% rise in financial transactions. Mutual funds grew 7%, and the recurrence ratio reached 63.7% year to date. Net interest income, including readjustment income, increased 11% year-on-year, while NIMs remained stable at 4%.... Our capital CET1 ratio stands at 11%, and we are provisioning a 60% dividend payout to be paid in April next year. We also began 2026 with a successful $500 million, five-year 144A issuance at a rate of 4.55%.
Speaker #2: Generated net income of 1,053 billion pesos. At 23% year-on-year, this resulted in a return on average equity of 36% as of the year.
Speaker #2: Growth was supported by a 9% increase in fee income and an 8% rise in financial transactions. Mutual funds grew 7%, and the recurrence ratio reached 63.7% year to date.
Speaker #2: Net interest income included readjustment income increased 11% year on year, while NIMS remained stable at 4%. Our capital CET1 ratio stands at provisioning a 60% dividend payout to 11%, and we are be paid in April next year.
Speaker #2: We also a successful began 2026 with 500 million dollar five-year 144.8 issuance at a rate of 4.55%. During the year, we received several important recognitions: Euromoney, Latin Finance, and the Banker named us the best bank in Chile, while Global Finance recognized us as best bank for SMEs.
Cristian Vicuña: During the year, we received several important recognitions. Euromoney, LatinFinance, and The Banker named us the best bank in Chile, while Global Finance recognized us as best bank for SMEs. We also strengthened our sustainability profile. We are MSCI ESG rating, improving from A to double A, and our sustainability score improving to 15.4 levels. On slide 11, we show the evolution of the quarterly ROE. We have consistently maintained ROEs above 21%, even in quarters with lower inflation. In the most recent quarters, UI variation was 0.61%, and ROE reached 21.9%. On a yearly basis, net interest income increased 10.9%, driven by a lower cost of funding, which improved by approximately 100 basis points year-on-year. As a result, year-to-date NIM reached 4%.
Cristian Vicuña: During the year, we received several important recognitions. Euromoney, LatinFinance, and The Banker named us the best bank in Chile, while Global Finance recognized us as best bank for SMEs. We also strengthened our sustainability profile. We are MSCI ESG rating, improving from A to double A, and our sustainability score improving to 15.4 levels. On slide 11, we show the evolution of the quarterly ROE. We have consistently maintained ROEs above 21%, even in quarters with lower inflation. In the most recent quarters, UI variation was 0.61%, and ROE reached 21.9%. On a yearly basis, net interest income increased 10.9%, driven by a lower cost of funding, which improved by approximately 100 basis points year-on-year. As a result, year-to-date NIM reached 4%.
Speaker #2: We also strengthened our sustainability profile; our MSCI ESG rating improved from A to AA, and our sustainability score improved to the 15.4 level. On slide 11, we show the evolution of the quarterly ROE.
Speaker #2: We have consistently maintained ROEs above 21% even in quarters with lower inflation. In the most recent quarters, UI variation was 0.61%, and ROE reached 21.9%.
Speaker #2: On a year-on-year basis, net interest income increased driven by a lower cost of 10.9%, funding, which improved by approximately 100 basis points year on year.
Speaker #2: As a result, year to date, NIM reached 4%. Slide 12 highlights the continued expansion of our client base and its impact on fee generation.
Cristian Vicuña: Slide 12 highlights the continued expansion of our client base and its impact on fee generation. We now serve close to 4.6 million clients, with 58% active and approximately 2.3 million digital clients accessing our platforms monthly. Current accounts increased 9% year-on-year, supporting 5% growth in active clients and 7% growth in total clients. This translated into a 15% increase in credit card transactions and a 7% increase in mutual fund volumes. Client satisfaction remains high across our products. We also continued to expand our corporate footprint, increasing business current accounts by 19% over the last 12 months, driven by Simple Business Account and integrated payment solutions through Getnet.
Cristian Vicuña: Slide 12 highlights the continued expansion of our client base and its impact on fee generation. We now serve close to 4.6 million clients, with 58% active and approximately 2.3 million digital clients accessing our platforms monthly. Current accounts increased 9% year-on-year, supporting 5% growth in active clients and 7% growth in total clients. This translated into a 15% increase in credit card transactions and a 7% increase in mutual fund volumes. Client satisfaction remains high across our products. We also continued to expand our corporate footprint, increasing business current accounts by 19% over the last 12 months, driven by Simple Business Account and integrated payment solutions through Getnet.
Speaker #2: We now serve close to 4.6 million clients. We're 58% active and approximately accessing our platforms 2.3 million digital clients monthly. Current accounts increased 9% year on year, supporting 5% growth in active clients and 7% growth in total clients.
Speaker #2: This translated into a 15% increase in credit card transactions and a 7% increase in mutual fund volumes. Client satisfaction remains high across our products.
Speaker #2: We also continue to expand our corporate footprint, increasing business current accounts by 19% over the last 12 months, driven by simple business account and integrated payment solutions through GetBank.
Cristian Vicuña: As shown on the right-hand table, higher client activity translated into 8.5% year-on-year growth in fees and financial transaction income, with cards, Getnet account fees, and mutual funds showing strong momentum. On slide 13, the income growth and disciplined cost control supported strong operating metrics. The efficiency ratio reached 36%, the best in the Chilean banking industry in 2025, while the recurrence ratio reached 63.7, meaning more than 60% of our expenses are covered by fee generation. Operating expenses increased temporarily in early 2025 due to cloud migration costs. For the full year, operating expenses grew just 1.6%. In the quarter, total core expenses declined 1%, driven by lower administrative costs, reduced data processing expenses, and the appreciation of the Chilean peso. Overall, we continue to deliver sustained cost efficiency and recurrence.
Cristian Vicuña: As shown on the right-hand table, higher client activity translated into 8.5% year-on-year growth in fees and financial transaction income, with cards, Getnet account fees, and mutual funds showing strong momentum. On slide 13, the income growth and disciplined cost control supported strong operating metrics. The efficiency ratio reached 36%, the best in the Chilean banking industry in 2025, while the recurrence ratio reached 63.7, meaning more than 60% of our expenses are covered by fee generation. Operating expenses increased temporarily in early 2025 due to cloud migration costs. For the full year, operating expenses grew just 1.6%. In the quarter, total core expenses declined 1%, driven by lower administrative costs, reduced data processing expenses, and the appreciation of the Chilean peso. Overall, we continue to deliver sustained cost efficiency and recurrence.
Speaker #2: As shown on the right-hand table, higher client activity translated into 8.5% year on year growth in fees and financial transaction income, with cards getting net account fees and mutual funds showing strong momentum.
Speaker #2: On slide 13, the income growth and discipline cost control supported strong operating metrics. The efficiency ratio reached 36%, the best in the Chilean banking industry in 2025, while the recurrence ratio reached 63.7, meaning more than 60% of our expenses are covered by fee generation.
Speaker #2: Operating expenses increased temporarily in early 2025 due to cloud migration costs. For the full year, operating expenses grew just 1.6%, in the quarter total core expenses declined 1%, driven by lower administrative costs, reduced data processing expenses, and the appreciation of the Chilean peso.
Speaker #2: Overall, we continue to deliver best-in-class efficiency and recurrence, and at the same time, we are evolving our branch network toward the work of reform, improving efficiency and customer experience, supported by continued enhancements to our digital platforms.
Cristian Vicuña: At the same time, we are evolving our branch network towards the Work Café format, improving efficiency and customer experience, supported by continued enhancements to our digital platforms. On slide 14, we show an overview of our cost of risk and asset quality. As in prior quarters, cost of credit remains above the historical average. The bank has been actively managing different parts of the portfolio, increasing loan restructuring that is reflected in the increasing impaired loan ratio, while our non-performing loans, with 90 days overdue or more, have stabilized. On slide 15, we can see that the CET1 ratio reached 11% in December, far above our minimum requirement of 9.08% for December 2025, and demonstrating about 50 basis points of capital creation since December 2024.
Cristian Vicuña: At the same time, we are evolving our branch network towards the Work Café format, improving efficiency and customer experience, supported by continued enhancements to our digital platforms. On slide 14, we show an overview of our cost of risk and asset quality. As in prior quarters, cost of credit remains above the historical average. The bank has been actively managing different parts of the portfolio, increasing loan restructuring that is reflected in the increasing impaired loan ratio, while our non-performing loans, with 90 days overdue or more, have stabilized. On slide 15, we can see that the CET1 ratio reached 11% in December, far above our minimum requirement of 9.08% for December 2025, and demonstrating about 50 basis points of capital creation since December 2024.
Speaker #2: On slide 14, we show an overview of our cost of risk and asset quality. As in prior quarters, cost of credit remains above the historical average.
Speaker #2: The bank has been actively managing different parts of the portfolio, increasing loan restructuration that is reflected in the increase in the impaired loan ratio while our non-performing loans with 90 days overview or more have stabilized.
Speaker #2: 15, we can see that the CET1 ratio On slide reached 11% in December, far above our minimum requirement of 9.08% for demonstrating about 50 December 2025, and creation since December 2024.
Cristian Vicuña: This was driven by our income generation in 2025 and considers a 60% dividend provision of our 2025 profits and a 2% increase in risk-weighted assets. Our capital ratios are now fully loaded, with complete implementation of capital deductions in the Basel III Chilean framework. In January of 2026, the regulator published the current Pillar Two charges for the Chilean banks, where we were assigned a Pillar Two charge of 13 basis points. This is a reduction from the original 25 basis points that were assigned last year, demonstrating our solid management. Of the 13 basis points of Pillar Two charges, about 8% must be met with core equity Tier 1 capital. So on slide 17, we show our guidance for 2026.
Cristian Vicuña: This was driven by our income generation in 2025 and considers a 60% dividend provision of our 2025 profits and a 2% increase in risk-weighted assets. Our capital ratios are now fully loaded, with complete implementation of capital deductions in the Basel III Chilean framework. In January of 2026, the regulator published the current Pillar Two charges for the Chilean banks, where we were assigned a Pillar Two charge of 13 basis points. This is a reduction from the original 25 basis points that were assigned last year, demonstrating our solid management. Of the 13 basis points of Pillar Two charges, about 8% must be met with core equity Tier 1 capital. So on slide 17, we show our guidance for 2026.
Speaker #2: This was driven by our income generation in '25 and considers a 60% dividend provision of our 2025 profits, and a 2% increase in risk-weighted assets.
Speaker #2: Our capital loaded, with complete implementation ratios are now fully the Basel III Chilean framework. In January of 2026, the regulator published the current pillar two charges for the Chilean banks, where we were assigned a pillar two charge of 13 basis points.
Speaker #2: This is a reduction from the original 25 basis points that were assigned last year, demonstrating our solid management. Of the 13 basis points of pillar two charges, about 8% must be met with core equity tier one 17, we show our capital.
Speaker #2: guidance for 2026. expecting a GDP growth For this year, we're of a low 2% as lower than I already mentioned, with a UI variation just below the 2.9% and an average monetary policy rate of around 4.3%.
Cristian Vicuña: For this year, we're expecting a GDP growth of a low 2%, as Lorena already mentioned, with a UF variation just below the 2.9% and an average monetary policy rate of around 4.3%. We anticipate a more favorable business environment this year, supporting mid-single digit loan growth with a stronger rebound in the second half of the year. Despite the slightly lower inflation, loan growth and slightly lower rates will help to sustain our NIMs on 4% levels, while our fees on financial transactions should grow mid- to high-single digits. This does not include any impact for a further interchange fee reduction, which is yet to be defined by the Interchange Fee Commission. Our efficiencies should remain around the mid-30s, while our cost of credit should continue to improve gradually to reach around 1.3% for the full year.
Cristian Vicuña: For this year, we're expecting a GDP growth of a low 2%, as Lorena already mentioned, with a UF variation just below the 2.9% and an average monetary policy rate of around 4.3%. We anticipate a more favorable business environment this year, supporting mid-single digit loan growth with a stronger rebound in the second half of the year. Despite the slightly lower inflation, loan growth and slightly lower rates will help to sustain our NIMs on 4% levels, while our fees on financial transactions should grow mid- to high-single digits. This does not include any impact for a further interchange fee reduction, which is yet to be defined by the Interchange Fee Commission. Our efficiencies should remain around the mid-30s, while our cost of credit should continue to improve gradually to reach around 1.3% for the full year.
Speaker #2: We So on slide anticipate a more favorable business supporting mid-single digit loan environment this year, growth with a stronger rebound in the second half of the year.
Speaker #2: Despite the slightly lower inflation, loan growth and slightly lower rates will help to sustain our while our fees and financial NIMs on 4% levels, transactions should grow mid to high single digits.
Speaker #2: This does not include any impact for a further interchange fee reduction, which is yet to be defined by the interchange fee commission. Our efficiencies should remain around the mid-30s, while our cost of credit should continue to improve gradually to reach around 1.3% for the full year.
Cristian Vicuña: Based on these assumptions, our expectation for 2026 are for an ROE within the range of 22% to 24%, highlighting the strong profitability of Santander Chile. With this, I finish the presentation, and we can start the Q&A session.
Cristian Vicuña: Based on these assumptions, our expectation for 2026 are for an ROE within the range of 22% to 24%, highlighting the strong profitability of Santander Chile. With this, I finish the presentation, and we can start the Q&A session.
Speaker #2: Based on these assumptions, our expectation for 2026 is for an ROE within the range of 22 to 24%, highlighting the strong profitability of Santander Chile.
Speaker #2: With this, I finish the presentation, and we can start the Q&A session. Thank you very much. We'll now move to the Q&A part of the call.
Operator: Thank you very much. We'll now move to the Q&A part of the call. If you'd like to ask a question, please press star two if you're connected from the phone, and wait to be prompted. It is star two if you're connected from the phone, and if you're connected from the web, you can also ask a voice question. We'll wait a few moments for the questions to come in. Okay, our first question is from Ernesto Gabilondo from Bank of America. Your line is now open. Please go ahead.
Operator: Thank you very much. We'll now move to the Q&A part of the call. If you'd like to ask a question, please press star two if you're connected from the phone, and wait to be prompted. It is star two if you're connected from the phone, and if you're connected from the web, you can also ask a voice question. We'll wait a few moments for the questions to come in. Okay, our first question is from Ernesto Gabilondo from Bank of America. Your line is now open. Please go ahead.
Speaker #2: If you'd like to ask a question, please press *2. If you're connected from the phone and wait to be prompted, it is *2.
Speaker #2: If you're connected from the phone, and if you're connected from the web, you can also ask a voice question. With a few moments for the questions to come in.
Speaker #2: Okay. Our first question is from Ernesto Gabilondo from Bank of America. Your line is now open. Please go ahead.
Ernesto Gabilondo: Thank you. Hi, good morning, Patricia, Lorena, Cristian, and all your team, and, thanks for the opportunity to ask questions. My first question will be on the economic and political outlook. So, we have been hearing that there could be the possibility to reduce the statutory tax rate and also to reduce the credit cap limit. So any color on what you were, are hearing also will be very helpful. And then my second question is on your long-run expectations. You were guiding between mid-single digit around that. Just wanted if you can break down in terms of how much we expect for each segment also very useful. And for my last question is in the sale of Getnet.
Ernesto Gabilondo: Thank you. Hi, good morning, Patricia, Lorena, Cristian, and all your team, and, thanks for the opportunity to ask questions. My first question will be on the economic and political outlook. So, we have been hearing that there could be the possibility to reduce the statutory tax rate and also to reduce the credit cap limit. So any color on what you were, are hearing also will be very helpful. And then my second question is on your long-run expectations. You were guiding between mid-single digit around that. Just wanted if you can break down in terms of how much we expect for each segment also very useful. And for my last question is in the sale of Getnet.
Speaker #3: Thank you. Hi, good morning, Patricia Lorena, Christian, and all your team, and thanks for the opportunity to ask questions. My first question will be on the economic and political outlook so we have been hearing that there could be the possibility to reduce the statutory tax rate and also to reduce the credit cap limit.
Speaker #3: So any call on what you are hearing also will be very helpful. And then my second question is on your guiding between long-road expectations.
Speaker #3: You were mid-single digit, around that. I just wanted, if you can, break down in terms of how much, respective for each segment—also very useful.
Speaker #3: And for my last question, is in the sale of Ketnet. I don't know if you can provide more details on the implications behind it.
Ernesto Gabilondo: I don't know if you can provide more details on the implications behind it. I don't know if you obtained an amount of cash from this transaction. Any more details will be helpful. Thank you.
Ernesto Gabilondo: I don't know if you can provide more details on the implications behind it. I don't know if you obtained an amount of cash from this transaction. Any more details will be helpful. Thank you.
Speaker #3: I don't know if you obtain an amount of cash from this transaction so any more details will be helpful. Thank
Cristian Vicuña: Thank you, Ernesto, for the questions. So I'll pass the word first to Lorena for the economic political outlook, and then Patricia will comment on asset expansion. I'll get the last question from Ernesto.
Cristian Vicuña: Thank you, Ernesto, for the questions. So I'll pass the word first to Lorena for the economic political outlook, and then Patricia will comment on asset expansion. I'll get the last question from Ernesto.
Speaker #1: Thank you, Ernesto, for the questions.
Speaker #1: to Lorena for the you. economic-political outlook. And then Patricia will comment on asset expansion. I'll get the last question from
Speaker #1: Ketnet. Yes.
Patricia Pérez: Yes. For the political and economic outlook, it's important to note that we corrected growth projections for 2026 and 2027 upward, mainly due to, on one side, improvement of copper price prospects and better performance of trading partners, and of course, the dynamics of internal demand. But in the political side, we expect that the new government will have a transition period, and the tax reduction could take some time. So we expect the effects more in 2027 and in the second half of this year than in the short term.
Lorena Palomeque: Yes. For the political and economic outlook, it's important to note that we corrected growth projections for 2026 and 2027 upward, mainly due to, on one side, improvement of copper price prospects and better performance of trading partners, and of course, the dynamics of internal demand. But in the political side, we expect that the new government will have a transition period, and the tax reduction could take some time. So we expect the effects more in 2027 and in the second half of this year than in the short term.
Speaker #4: For the political and economic load, it's important to recall that we correct growth projections for 2026 and '27 as were mainly due to copper prices, process, and better performance of trading partners and, of course, the dynamic of internal demand.
Speaker #4: But in the political side, we expect that the new government will have a transition period, and the tax reduction could take some time. So we expect the effects more in the 2027 and in the second half of this year than in the short term.
Cristian Vicuña: Right. Regarding the credit card limit discussion, we believe that that's going to take longer to get discussed in Congress, so we don't expect anything going on in 2026 regarding that change. It will be welcome news for the industry, and for the bankization of the Chilean economy in general terms, but I believe it's going to take a while for that to get discussed.
Cristian Vicuña: Right. Regarding the credit card limit discussion, we believe that that's going to take longer to get discussed in Congress, so we don't expect anything going on in 2026 regarding that change. It will be welcome news for the industry, and for the bankization of the Chilean economy in general terms, but I believe it's going to take a while for that to get discussed.
Speaker #1: Right. Regarding the credit card limits discussion, we believe that that's going to take longer to get discussed in Congress. So we don't expect 2026 regarding anything going on in that change.
Speaker #1: It will be welcome news for the industry. And for the bankerization of the Chilean economy in general terms, but I believe it's going to take a while for that to get discussed.
Patricia Pérez: Regarding the loan growth, for this year, as Cristian mentioned, our guidance for this year is to be around mid-single digits, both for the industry and our bank. Assumptions behind this guidance are consistent with a macro that improves gradually within the year. First of all, on the consumer side, we are seeing steady growth, mainly in auto lending, though weaker demand still for installment loans that we are expecting to improve during the year. Regarding commercial portfolio, we already have seen a reactivation in the investment in mining and a better, like, investment cycle, together with recent improvements in confidence, as Lorena showed us. However, this has not yet translated it into stronger growth.
Speaker #5: Regarding higher net worth, regarding the loan growth for this year, as Christian mentioned, our guidance for this year is to be around mid-single digits both for the industry and our bank.
Patricia Pérez: Regarding the loan growth, for this year, as Cristian mentioned, our guidance for this year is to be around mid-single digits, both for the industry and our bank. Assumptions behind this guidance are consistent with a macro that improves gradually within the year. First of all, on the consumer side, we are seeing steady growth, mainly in auto lending, though weaker demand still for installment loans that we are expecting to improve during the year. Regarding commercial portfolio, we already have seen a reactivation in the investment in mining and a better, like, investment cycle, together with recent improvements in confidence, as Lorena showed us. However, this has not yet translated it into stronger growth.
Speaker #5: Assumptions behind this guidance are consistent with a macro that improves gradually within the year. First of all, on the consumer side, we are seeing steady growth, mainly in auto demand still for installment loans that we are expecting to improve during the year.
Speaker #5: Regarding the commercial portfolio, lending, though weaker, we have already seen a reactivation in investment in mining and a better investment cycle in confidence, together with recent improvements, as Lorena showed us.
Speaker #5: However, this has not yet translated into stronger growth. But during the year, this should boost commercial lending and especially in large companies. And other parts of the economy as well.
Patricia Pérez: But during the year, this should boost commercial lending, especially in large companies and in other parts of the economy as well, and also help to drive higher consumer lending. And finally, regarding mortgages, we have also seen rather improvements in the demand during the year, in line with better conditions in the construction segment. Also, the mortgage subsidy launched on May last year. And going forward, we are expecting a better trend, especially in the affluent segment.... All in all, we think we are well positioned in terms of liquidity and capital as well, to support a higher growth scenario.
Patricia Pérez: But during the year, this should boost commercial lending, especially in large companies and in other parts of the economy as well, and also help to drive higher consumer lending. And finally, regarding mortgages, we have also seen rather improvements in the demand during the year, in line with better conditions in the construction segment. Also, the mortgage subsidy launched on May last year. And going forward, we are expecting a better trend, especially in the affluent segment.... All in all, we think we are well positioned in terms of liquidity and capital as well, to support a higher growth scenario.
Speaker #5: And also help to drive higher consumer lending. And finally, regarding mortgages, we have also seen gradual improvements in the demand during the year, in line with better conditions in the construction segment, also the mortgage subsidy launched on May last year.
Speaker #5: And going forward, we are expecting better trends, especially in the affluent segment. All in all, we think we are well positioned in terms of liquidity and capital as well to support a higher growth scenario in addition.
Patricia Pérez: In addition, we also think we benefit from the scale and synergy generated by being part of Santander Group, leveraging shared platforms and international market expertise from the global and local teams as well.
Patricia Pérez: In addition, we also think we benefit from the scale and synergy generated by being part of Santander Group, leveraging shared platforms and international market expertise from the global and local teams as well.
Speaker #5: We also think we benefit from the scale and synergy generated by being part of Santander Group leveraging shared platforms and international market expertise from the global and local teams as
Speaker #5: well.
Cristian Vicuña: Thanks. And, regarding the Getnet question, so we had a shareholders meeting last week that consider an offer from Getnet Payments to acquire the minority stake of Getnet Chile, in order to formalize the strategic partnership. The main goal is to strengthen the Getnet Chile position in a payments market that we believe is increasingly competitive tech—both technologically and requiring low integrations. Where bringing in a large international player will allow us to access those capabilities, such as continuous innovation, scale, globally proven functions, and the international work network that opens new business opportunity for our acquiring operation. It's very relevant that we are keeping control and the majority of the board, ensuring business continuity, indebtedness, and strategic continuity while managing the business.
Cristian Vicuña: Thanks. And, regarding the Getnet question, so we had a shareholders meeting last week that consider an offer from Getnet Payments to acquire the minority stake of Getnet Chile, in order to formalize the strategic partnership. The main goal is to strengthen the Getnet Chile position in a payments market that we believe is increasingly competitive tech—both technologically and requiring low integrations. Where bringing in a large international player will allow us to access those capabilities, such as continuous innovation, scale, globally proven functions, and the international work network that opens new business opportunity for our acquiring operation. It's very relevant that we are keeping control and the majority of the board, ensuring business continuity, indebtedness, and strategic continuity while managing the business.
Speaker #1: Thanks.
Speaker #1: And regarding the Ketnet question, so we had the shareholders' meeting last week that considered an offer from Ketnet Payments to acquire the minority stake of Ketnet Chile in order to formalize a strategic partnership.
Speaker #1: The main goal is to strengthen the Ketnet Chile position in a payments market that we believe is increasingly and requiring global integrations. Bringing in a large international player, we'll allow us to access those capabilities such as continuous innovation, scale, globally proven functions, and the international work network that opens new business opportunities for our acquiring operation.
Speaker #1: It's very relevant that we are keeping control and the majority of the board ensuring business continuity, indebtedness, strategic continuity, while managing the business and at the same time, we're adding a partner that accelerates growth and strengthens the efficiency and leadership for the next stage that we're seeing on the market.
Cristian Vicuña: At the same time, we are adding a partner that accelerates growth and strengthen the efficiency and leadership for the next step stage that we're seeing on the market. So we think this was our decision to strengthen Getnet's future and create value that will benefit all shareholders. Regarding the construction included an initial payment of CLP 68 billion, and a service agreement under which Banco Santander provides infrastructure, staff, equipment, and data processing to sell Getnet solutions. Santander will receive, Santander Chile will receive the equivalent of 10% of the net operating revenues for the next seven year, with an automatic status extension of that contract for additional three years. So all in all, we assess about 65 to 70% of the total net income of Getnet will go straight to Banco Santander Chile.
Cristian Vicuña: At the same time, we are adding a partner that accelerates growth and strengthen the efficiency and leadership for the next step stage that we're seeing on the market. So we think this was our decision to strengthen Getnet's future and create value that will benefit all shareholders. Regarding the construction included an initial payment of CLP 68 billion, and a service agreement under which Banco Santander provides infrastructure, staff, equipment, and data processing to sell Getnet solutions. Santander will receive, Santander Chile will receive the equivalent of 10% of the net operating revenues for the next seven year, with an automatic status extension of that contract for additional three years. So all in all, we assess about 65 to 70% of the total net income of Getnet will go straight to Banco Santander Chile.
Speaker #1: So we think this is a decision to strengthen Ketnet's future and create value that will benefit all shareholders. Regarding the construction, we included an initial payment of 68 billion Chilean pesos, and a service agreement under which Banco Santander provides infrastructure, staff, equipment, and data processing to sell Ketnet solutions.
Speaker #1: And Santander will receive Santander Chile will receive the equivalent of 10% of the net operating revenues for the next seven years with an automatic status extension of that contract for additional three years.
Speaker #1: So all in all, we assess about 65 to 70% of the total net income of Ketnet will go straight to Banco Santander Chile so the impact in terms of P&L is negligible.
Cristian Vicuña: So the impact in terms of PNL is negligible. Well, we had the meeting last week, so the transaction was approved with the quorum very close to 95% of total shares, and it was approved by close to 87% of the participants. Out of those, 29% were minority shareholders, and the majority of the minority shareholders voted in favor of the transaction. Chilean regulation requires that all shareholders must vote on the shareholders meeting to achieve the quorums required by the law. So that's why the group also was forced to vote, but we had a very strong support from the minority base of shareholders. So that's pretty much regarding Getnet.
Cristian Vicuña: So the impact in terms of PNL is negligible. Well, we had the meeting last week, so the transaction was approved with the quorum very close to 95% of total shares, and it was approved by close to 87% of the participants. Out of those, 29% were minority shareholders, and the majority of the minority shareholders voted in favor of the transaction. Chilean regulation requires that all shareholders must vote on the shareholders meeting to achieve the quorums required by the law. So that's why the group also was forced to vote, but we had a very strong support from the minority base of shareholders. So that's pretty much regarding Getnet.
Speaker #1: And while we had the meeting last week, so the transaction was was very close to 95% of approved with the quorum total shares, and it was approved participants, out of those 29% were minority shareholders, and then majority of the minority shareholders voted in favor of the transaction.
Speaker #1: Chilean regulation requires that all shareholders must vote on the shareholders' meeting to achieve the quorum required by the law. So that's why the group also was forced to vote, but we had a very strong support from the minority base of shareholders.
Speaker #1: So that's pretty much
Ernesto Gabilondo: Oh, very, very helpful. Thank you very much, Patricia, Lorena, and Cristian.
Ernesto Gabilondo: Oh, very, very helpful. Thank you very much, Patricia, Lorena, and Cristian.
Speaker #2: Oh, very, very helpful. Thank you very much, Patricia, Lorena, and Christian.
Operator: Thank you very much. Our next question is from Lindsey Shima, from Goldman Sachs. Your line is now open. Please go ahead.
Operator: Thank you very much. Our next question is from Lindsey Shima, from Goldman Sachs. Your line is now open. Please go ahead.
Speaker #6: much. Our next question is from Lindsay Shima from Goldman Sachs.
Speaker #6: ahead. Thank you very
Lindsey Shima: Hi, good morning, Patricia, Cristian, and Lorena. Thank you for taking my question. Just first, your 2026 guidance implies just a slight improvement in cost of risk. Just want to hear where you see that coming from and your projections for asset quality throughout the year. And then my second question is just, we saw expenses falling year, falling year over year, in this Q4. And you mentioned some efficiency improvements you've been doing that can lower your efficiency ratio long term. So just wanted to get some more color on improvements you've been making there and how you see expense growth progressing going forward. Thank you so much.
Lindsey Shema: Hi, good morning, Patricia, Cristian, and Lorena. Thank you for taking my question. Just first, your 2026 guidance implies just a slight improvement in cost of risk. Just want to hear where you see that coming from and your projections for asset quality throughout the year. And then my second question is just, we saw expenses falling year, falling year over year, in this Q4. And you mentioned some efficiency improvements you've been doing that can lower your efficiency ratio long term. So just wanted to get some more color on improvements you've been making there and how you see expense growth progressing going forward. Thank you so much.
Speaker #7: Patricia. Christian and Lorena, thank you for taking my question. Just Hi. first, your 2026 Good morning, guidance implies a slight improvement regarding Ketnet. in cost of risk.
Speaker #7: Just want to hear where you see that coming from and your projections for asset quality throughout the year. And then my second question is just we saw expenses year-over-year in this fourth quarter.
Speaker #7: And you mentioned some efficiency improvements you’ve been doing that can lower your efficiency ratio long term. Just wanted to get some more color on the improvements you’ve been making there, and how you see expense growth progressing going forward.
Speaker #7: Thank you so much.
Speaker #1: Thank you, Lindsay, for your risk, well, 2025 was on the neighborhood of the 1.4 cost of risk for this operation, and we are of area.
Cristian Vicuña: Thank you, Lindsey, for your questions. Regarding risk, well, 2025 was in the neighborhood of the 1.4 cost of risk for this operation, and we are expecting that to improve to levels of 1.3 area. We did a relevant job in terms of improving NPLs in the commercial portfolio last year. Apart from the agro sector, we don't expect many new bad pieces of information from that part of the portfolio. So all in all, we are seeing a more sustainable and controlled cost of risk looking forward. In terms of...
Cristian Vicuña: Thank you, Lindsey, for your questions. Regarding risk, well, 2025 was in the neighborhood of the 1.4 cost of risk for this operation, and we are expecting that to improve to levels of 1.3 area. We did a relevant job in terms of improving NPLs in the commercial portfolio last year. Apart from the agro sector, we don't expect many new bad pieces of information from that part of the portfolio. So all in all, we are seeing a more sustainable and controlled cost of risk looking forward. In terms of...
Speaker #1: We did a relevant job in terms of improving MPLs in the commercial portfolio last year. we don't expect the hard growth sector, many, many new pieces of information from that part of seeing a more the portfolio.
Speaker #1: Sustainable and controlled cost of risk moving forward. In terms—and apart from—so all in all, we are seeing a pickup, as I already mentioned. We saw a slight decrease in December figures, due more to seasonality and the start of the summer holidays.
Cristian Vicuña: We saw a slight pickup, as I already mentioned, in December figures, due more to seasonality and the start of the summer holidays that put some pressure on the collection teams by collectability, but nothing that we are seeing very concerning. And at the same time, the mortgage portfolio, which has been increasing in NPL, is not going to pass through as cost of risk, and we expect this to start improving this year, gradually. It's going to take a while because the judicial process of collections is taking longer. But all in all, we don't expect this to pass through to cost of risk.
Cristian Vicuña: We saw a slight pickup, as I already mentioned, in December figures, due more to seasonality and the start of the summer holidays that put some pressure on the collection teams by collectability, but nothing that we are seeing very concerning. And at the same time, the mortgage portfolio, which has been increasing in NPL, is not going to pass through as cost of risk, and we expect this to start improving this year, gradually. It's going to take a while because the judicial process of collections is taking longer. But all in all, we don't expect this to pass through to cost of risk.
Speaker #1: That put some pressure on the collection teams. By contact ability, but nothing that we are seeing at this very time, the mortgage portfolio, which has been increasing and is concerning, and at the same MPL, is not going to pass through as cost of risk.
Speaker #1: And we expect this to start improving this year gradually. It's going to take a while because the judicial process of collections is taking longer.
Speaker #1: But all in all, we don't expect this to pass through to cost of risk. So that's why we are more comfortable guiding a slight improvement this year.
Cristian Vicuña: So, that's why we are more comfortable guiding a slight improvement this year. And, to your question on expenses, the way to look at this is that we aim to control the growth in our expense base by trying to deliver inflation expansion or inflation plus 1%. That's what we are seeing in the long term as an internal target. We are addressing this through a strong investment in our technological platforms, improving efficiency, getting rid of routine tasks that can be avoided, and implementing new solutions and new technologies. And, we are delivering some initial things on artificial intelligence that are probably going to allow us to sustain these trends.
Cristian Vicuña: So, that's why we are more comfortable guiding a slight improvement this year. And, to your question on expenses, the way to look at this is that we aim to control the growth in our expense base by trying to deliver inflation expansion or inflation plus 1%. That's what we are seeing in the long term as an internal target. We are addressing this through a strong investment in our technological platforms, improving efficiency, getting rid of routine tasks that can be avoided, and implementing new solutions and new technologies. And, we are delivering some initial things on artificial intelligence that are probably going to allow us to sustain these trends.
Speaker #1: expenses, the way to look at this is that we aim And to to control the growth in our expense base by trying to deliver inflation expansion or inflation plus 1%.
Speaker #1: That's what we are seeing in the long term as an internal target. We are addressing this through a in our technological platforms, improving efficiency, getting rid of routinary tasks that can be avoided, and implementing new solutions and new technologies and we are delivering some initial things on artificial intelligence that we're probably going to allow us trend.
Cristian Vicuña: We are not expecting very relevant changes in the network size so far. So just slight modifications, maybe opening one or two new formats in Work Café and renovating some part of the legacy branch that we still have some 90 branches over there. But to your point, regarding the improvement in the final part of the year, well, there was a relevant peso appreciation, and about 25% of our administrative expenses are linked to euro and US dollar currencies, so that's also explaining a little. But it's also part of the whole story of how we are trying to achieve the best levels of efficiency in the Chilean industry. So thank you.
Cristian Vicuña: We are not expecting very relevant changes in the network size so far. So just slight modifications, maybe opening one or two new formats in Work Café and renovating some part of the legacy branch that we still have some 90 branches over there. But to your point, regarding the improvement in the final part of the year, well, there was a relevant peso appreciation, and about 25% of our administrative expenses are linked to euro and US dollar currencies, so that's also explaining a little. But it's also part of the whole story of how we are trying to achieve the best levels of efficiency in the Chilean industry. So thank you.
Speaker #1: point regarding the improvement in the final part of the year, well, there was a relevant Tesla appreciation and about changes in the network 25% of our administrative expenses are linked to euro and US dollar explaining a little currencies.
Speaker #1: to So that's also achieve the best levels of efficiency story of how we are trying in the Chilean industry. So thank you.
Operator: Thank you. Our next question is from Yuri Fernandes from JP Morgan. Your line is now open. Please go ahead.
Operator: Thank you. Our next question is from Yuri Fernandes from JP Morgan. Your line is now open. Please go ahead.
Speaker #6: Thank you. Our next question is from Yuri Fernandez from JP Morgan. Your line is now open. Please go ahead.
Yuri Fernandes: Thank you. Hi, Patricia, Lorena, Cristian. Quick one, just on the guidance, just checking if the guidance includes the reduction on Getnet stake. I know it's small, but if you can remind us what is the relevance for ROE, and especially for the non-NII guidance this year? I guess you grew your fees closer to high single. I think the guidance shows a little bit of a slowdown, but not sure if this is Getnet or maybe move to front, that we're also very strong, maybe being a little bit more normalized. So just trying to understand if the guidance reflects Getnet. I understand we still need to deconsolidate, so maybe it's too consolidated 100% of Getnet for a few more quarters, but just trying to get some color on this.
Yuri Fernandes: Thank you. Hi, Patricia, Lorena, Cristian. Quick one, just on the guidance, just checking if the guidance includes the reduction on Getnet stake. I know it's small, but if you can remind us what is the relevance for ROE, and especially for the non-NII guidance this year? I guess you grew your fees closer to high single. I think the guidance shows a little bit of a slowdown, but not sure if this is Getnet or maybe move to front, that we're also very strong, maybe being a little bit more normalized. So just trying to understand if the guidance reflects Getnet. I understand we still need to deconsolidate, so maybe it's too consolidated 100% of Getnet for a few more quarters, but just trying to get some color on this.
Speaker #8: Thank you. Hi, Patricia, Lorena, guidance, just checking if the guidance includes the reduction on getting at stake. I know it's small, but if you can remind us what is the relevance for ROE and especially for the non-NII guidance this year, I guess you grew your fees closer to high single.
Speaker #8: A little bit of a slowdown, but not—I think the guidance shows multiple funds that were also very strong, maybe being a little bit more normalized.
Speaker #8: So just trying to understand if the guidance reflects getting net. I understand it still needs to deconsolidate, so maybe 100% of getting net for a few you still consolidated more quarters, but just trying to get some color on this.
Yuri Fernandes: On your presentation... yeah, go ahead, and I can ask another one later. Thank you.
Speaker #8: And on your
Yuri Fernandes: On your presentation... yeah, go ahead, and I can ask another one later. Thank you.
Speaker #8: And I can ask another one later.
Cristian Vicuña: Okay. So, well, regarding your questions, and thank you for that. In terms of the fee figures, you're not going to see any changes. Well, you're going to see an increase in the final part of the PNL, in the minority stake, in the net income assigned to minority shareholders, right? So that's where you're going to see an increase in that line. That will be an effect that it's less than 1% of the total PNL of the company through the sale of this subsidiary. So it's nothing that's going to be seen as material.
Cristian Vicuña: Okay. So, well, regarding your questions, and thank you for that. In terms of the fee figures, you're not going to see any changes. Well, you're going to see an increase in the final part of the PNL, in the minority stake, in the net income assigned to minority shareholders, right? So that's where you're going to see an increase in that line. That will be an effect that it's less than 1% of the total PNL of the company through the sale of this subsidiary. So it's nothing that's going to be seen as material.
Speaker #1: Okay. So
Speaker #1: Okay. So
Speaker #1: Well, regarding your questions, and thank you for the presentation—yeah, go ahead.
Speaker #1: In terms of the fee figures, thank you for that. Changes—you’re going to see an increase in the final part of the P&L in the minority stake, in the net income assigned to minority shareholders, right?
Speaker #1: in terms of the fee figures, Thank you. you for that, changes. You're going to see an increase in the final part of the P&L in the minority stack, in the net income assigned to minority
Speaker #1: So that's where you're going to see an increase in that line that will Christian.
Speaker #1: be an effect that Quick one, just on the it's less than 1% of the total of the company through the P&L So it's nothing that's going to sale of this subsidiary.
Cristian Vicuña: In terms of ROE, well, consistently, this should be in the neighborhood of 20% ROE, so we are not changing guidance for these matters, and it's included in the 22 to 24% range. So you had another question, Yuri?
Cristian Vicuña: In terms of ROE, well, consistently, this should be in the neighborhood of 20% ROE, so we are not changing guidance for these matters, and it's included in the 22 to 24% range. So you had another question, Yuri?
Speaker #1: ROE. Well, be seen as material in terms of consistently, this should be on the neighborhood of ROE. So we are not changing guidance for these matters, and it's included in the 22 to 24% range.
Speaker #1: So you had another
Speaker #1: question, Yuri?
Yuri Fernandes: Yeah, no, no, that's clear. So basically, it's... And sorry for that today. It should be a minority interest, the delta here. I have just another follow-up on the SME business. On slide 13, Cristian, you showed the NPS of SMEs, and it points at 37. And you are the first here, probably you are the best one, but 37 looks a little bit low for NPS. So just checking if the number is correct and if this is the real, real number, if you are happy with this number or if you are working to improve, that would be nice.
Yuri Fernandes: Yeah, no, no, that's clear. So basically, it's... And sorry for that today. It should be a minority interest, the delta here. I have just another follow-up on the SME business. On slide 13, Cristian, you showed the NPS of SMEs, and it points at 37. And you are the first here, probably you are the best one, but 37 looks a little bit low for NPS. So just checking if the number is correct and if this is the real, real number, if you are happy with this number or if you are working to improve, that would be nice.
Speaker #8: Yeah, no, no, that's clear. So basically,
Speaker #8: it's and sorry for that, it should be a minority interest. The delta here. I have just another follow-up on the SME business. On his slide 13, of SMEs and you point at 37.
Speaker #8: first here, probably you are the best one, Christian, you showed NEPS but 37 looks a little bit low for And you are the NEPS.
Speaker #8: So just checking if the number is correct and if this is the real number, if you're happy with this number or if you are working to improve,
Speaker #8: that would be my.
Cristian Vicuña: Well, in general terms, SME NPS in the local industry, it's slower. It's slower, and it's in the area of the 33 to 37 range for most of our peers. We track this with the same methodology consistently along the years, so nothing has changed on that side. We are trying to get to levels closer to 50, but the reality of the industry here in Chile is that all in all, NPSs in the SME area are just to be lower.
Cristian Vicuña: Well, in general terms, SME NPS in the local industry, it's slower. It's slower, and it's in the area of the 33 to 37 range for most of our peers. We track this with the same methodology consistently along the years, so nothing has changed on that side. We are trying to get to levels closer to 50, but the reality of the industry here in Chile is that all in all, NPSs in the SME area are just to be lower.
Speaker #1: Well, in
Speaker #1: general terms, SME NPS in the local industry is slower. It's slower, and it's in the area of the 33 to 37 range for most of our peers.
Speaker #1: We track this with the same methodology, consistently along the years. So trying to get to levels nothing has changed on that side. We are closer to 50, but the reality of the industry here in Chile is that all in all, NPS is in the SME area are tend to be
Speaker #1: lower. Okay.
Yuri Fernandes: Okay. No, thank you. And my final one here, just a broad one, regarding the parent company and Santander Chile. Do you see any other business area where there could be synergies and optionalities similar to Getnet? Just trying to understand if we could see further partnerships, like, like on investment bank. We already have, I guess, insurance, right, and asset management-
Yuri Fernandes: Okay. No, thank you. And my final one here, just a broad one, regarding the parent company and Santander Chile. Do you see any other business area where there could be synergies and optionalities similar to Getnet? Just trying to understand if we could see further partnerships, like, like on investment bank. We already have, I guess, insurance, right, and asset management-
Speaker #8: No, thank you. And my final one here, just a broad one. Regarding the parent company and Santander Chile. Do you see any other business area where there could be synergies and trying to understand if we could see further optionalities similar to getting net? partnerships like on investment bank.
Speaker #8: No, thank you. And my final one here, just a broad one. Regarding the parent company and Santander Chile. Do you see any other business area where there could be synergies and trying to understand if we could see further optionalities similar to getting net?
Speaker #8: We are other areas that could management. But just trying to understand if there be synergies with the parent. Thank you.
Cristian Vicuña: Mm-hmm.
Cristian Vicuña: Mm-hmm.
Yuri Fernandes: But just trying to understand if there are other areas that could be, you know, synergies with the parent. Thank you.
Yuri Fernandes: But just trying to understand if there are other areas that could be, you know, synergies with the parent. Thank you.
Cristian Vicuña: So, all in all, as a group, under operations in Chile, I think pretty much most of the pieces are in place. So you mentioned, Santander Asset Management. We already have, and we acquired from a previous partner a couple of years ago. And actually we control too, the Santander Consumer Finance operation. That's another subsidiary of the bank. We, of course, leverage the partnership with the Santander Group through all the alliances that we can show, as a very, very effective and with great results in terms of the amount of new brands that we cover through the auto lender. So that's a good example of one area where we are tapping into the group resources.
Cristian Vicuña: So, all in all, as a group, under operations in Chile, I think pretty much most of the pieces are in place. So you mentioned, Santander Asset Management. We already have, and we acquired from a previous partner a couple of years ago. And actually we control too, the Santander Consumer Finance operation. That's another subsidiary of the bank. We, of course, leverage the partnership with the Santander Group through all the alliances that we can show, as a very, very effective and with great results in terms of the amount of new brands that we cover through the auto lender. So that's a good example of one area where we are tapping into the group resources.
Speaker #1: So all in all, as a Chile, I think pretty much most of the
Speaker #1: group and their operations in mentioned Santander Asset partner, a couple of years ago. have and we are acquired from a previous And actually, we Just control too the Santander Consumer Finance operation that's another subsidiary of the bank.
Speaker #1: with the Santander Group through all can show as a very, very effective lever the partnership and with great results in terms of the amount We, of course, cover through the auto lender.
Speaker #1: So that's a good example of one area where we are tapping into the group resources. And the other group did, in part—it's Direct Chile—and was announced in January, where the group acquisition, that the Santander purchased an annuities company.
Cristian Vicuña: And the other part, it's a direct acquisition that the Santander Group did in Chile, and it was announced in January, where the group purchased an annuities company from Principal. This is subject to regulatory approvals, and we expect those to that operation to be fulfilled by mid this year, so very close to Q3. And well, there are some natural complements between annuities companies in the Chilean market and banks. As we banks tend to originate longer. We have a very good capability of originate longer assets, but it's getting more expensive for us to store them. And those assets are quite interesting for companies like the one that was recently announced to be acquired.
Cristian Vicuña: And the other part, it's a direct acquisition that the Santander Group did in Chile, and it was announced in January, where the group purchased an annuities company from Principal. This is subject to regulatory approvals, and we expect those to that operation to be fulfilled by mid this year, so very close to Q3. And well, there are some natural complements between annuities companies in the Chilean market and banks. As we banks tend to originate longer. We have a very good capability of originate longer assets, but it's getting more expensive for us to store them. And those assets are quite interesting for companies like the one that was recently announced to be acquired.
Speaker #1: From principle, this is subject to regulatory approvals and we to that operation to be fulfilled by mid this year. So very expect those close to third quarter.
Speaker #1: And well, there are some natural complements between annuities companies in the Chilean market and banks as we banks tend to originate longer we have a very good capability of originating longer assets but it's getting more expensive for us to store them.
Speaker #1: Those assets are quite interesting and have been recently announced to be acquired. So, I think companies like the one that was—that's pretty much the state of the art.
Cristian Vicuña: So I think that's pretty much the state of the art. We don't expect many moving parts going forward, and the group needs to integrate this new acquired operation into the area of control. So that's what I-
Cristian Vicuña: So I think that's pretty much the state of the art. We don't expect many moving parts going forward, and the group needs to integrate this new acquired operation into the area of control. So that's what I-
Speaker #1: We don't expect many moving parts going forward, and the group needs to integrate these newly acquired operations into the area of control.
Operator: No, no, that, that's clear. On annuities, can the local banks own annuity companies in Chile, or you can't?
Yuri Fernandes: No, no, that, that's clear. On annuities, can the local banks own annuity companies in Chile, or you can't?
Speaker #8: No, no, that's clear. On annuities,
Speaker #8: in Chile or you can't? Similar to So that's what I.
Speaker #8: in Chile or you can't? Similar to So that's what I. can the local banks on annuity companies No, no.
Cristian Vicuña: No.
Cristian Vicuña: No.
Operator: Similar to Chile.
Yuri Fernandes: Similar to Chile.
Cristian Vicuña: No, no. Capital, capital from banks must be completely isolated from annuities companies. So, well, we have to remain, we have to control those business completely separate, and that's why it was the Santander Group that purchased that company.
Cristian Vicuña: No, no. Capital, capital from banks must be completely isolated from annuities companies. So, well, we have to remain, we have to control those business completely separate, and that's why it was the Santander Group that purchased that company.
Speaker #1: Capital from
Speaker #1: banks must be completely insurance? annuities companies. isolated from remain we have to control So we have to those business completely separate and that's why it was the Santander Group that purchased that company.
Operator: Okay. No, no, thank you. Thank you, Cristian.
Yuri Fernandes: Okay. No, no, thank you. Thank you, Cristian.
Speaker #8: Okay. No, no, thank you. Thank you, Cristian.
Operator: Thank you. Our next question is from Neha Agarwala, from HSBC. Your line is now open. Please go ahead.
Operator: Thank you. Our next question is from Neha Agarwala, from HSBC. Your line is now open. Please go ahead.
Speaker #3: Thank you. Our next question is from Niha Agarwala from HSBC. Your line is now open. Please go ahead.
Neha Agarwala: Hi, thank you for taking my question. We are hearing about some discussions around removing interest rate caps for consumer lending. And given that you've been historically very strong in the mass market segment, how do you weigh that opportunity? And also, if you have any clarity in, as per that discussions, and how could that impact, Santander Chile? I'll ask my next question later.
Neha Agarwala: Hi, thank you for taking my question. We are hearing about some discussions around removing interest rate caps for consumer lending. And given that you've been historically very strong in the mass market segment, how do you weigh that opportunity? And also, if you have any clarity in, as per that discussions, and how could that impact, Santander Chile? I'll ask my next question later.
Speaker #4: Hi, thank you for taking my question. We are hearing about some discussions around removing interest rate caps for consumer lending. And given that you've been historically very strong in the mass in as per that discussions, and how could that impact Santander Chile?
Speaker #4: Next question I'll ask is how do you weigh that?
Speaker #4: later. So hi,
Cristian Vicuña: Hi, Neha. Thank you for the question. Interest rate caps have relevant limits on the ability in Chilean banks to charge interest rates to customers. Credit cards have capped at 40%, and the typical auto lender will be lending on the area of 20 to 22% and so on. So it's defined on different sorts of products, sizes of the credit and durations. There is an early discussion regarding whether the system needs amendments on the definition of interest rate caps. But it's too early to say when this discussion is going to go from the government to the economic commissions in Congress to be discussed. So we don't expect pretty much this thing getting approved this year. We think it's too early to tell.
Cristian Vicuña: Hi, Neha. Thank you for the question. Interest rate caps have relevant limits on the ability in Chilean banks to charge interest rates to customers. Credit cards have capped at 40%, and the typical auto lender will be lending on the area of 20 to 22% and so on. So it's defined on different sorts of products, sizes of the credit and durations. There is an early discussion regarding whether the system needs amendments on the definition of interest rate caps. But it's too early to say when this discussion is going to go from the government to the economic commissions in Congress to be discussed. So we don't expect pretty much this thing getting approved this year. We think it's too early to tell.
Speaker #1: Niha. Thank you for the question. Interest rate caps relevant limits on had a the ability in Chilean banks to charge interest rates to customers.
Speaker #1: So credit cards had capped at opportunity? 40% and the
Speaker #1: typical auto lender will be lending on the area of 20 to 22 percent. And so on. So it's a sign on different sorts of credit, and products, sizes of the And also, if you have any clarity durations.
Speaker #1: There is an early discussion regarding whether amendments on the definition of interest rate the system needs caps. But it's too early discussion is going to to say when this go from the government commissions in Congress to be discussed.
Speaker #1: expect pretty much this So we don't year. We think it's too early to thing getting approved this tell. We need to first, for the cast administration, to take office.
Cristian Vicuña: We need first for the Kast administration to take office, and then they will announce what the scale is going to be like and what their priorities are going to be. We believe that it will be, or it would be, good news in terms of general bancarization access, especially for the part of the mass market. But, we don't expect news to come on that front too soon.
Cristian Vicuña: We need first for the Kast administration to take office, and then they will announce what the scale is going to be like and what their priorities are going to be. We believe that it will be, or it would be, good news in terms of general bancarization access, especially for the part of the mass market. But, we don't expect news to come on that front too soon.
Speaker #1: And then they will announce what the schedule is priorities are going to be. We believe going to be like and what their that it will be or it would be good news in terms of general bancarization access, especially for the part of the mass market.
Speaker #1: But we don't expect news to come on that front too
Neha Agarwala: Perfect. Very clear. And regarding your loan growth expectation, we are expecting the Kast administration to take office, and after that, maybe we could see a pickup in investments in general, which would improve the sentiment and the loan growth. Is that scenario already incorporated in your, into your guidance, or could that pose a little bit of upside risk, mostly in the second half?
Neha Agarwala: Perfect. Very clear. And regarding your loan growth expectation, we are expecting the Kast administration to take office, and after that, maybe we could see a pickup in investments in general, which would improve the sentiment and the loan growth. Is that scenario already incorporated in your, into your guidance, or could that pose a little bit of upside risk, mostly in the second half?
Speaker #4: Perfectly clear. And regarding your loan, soon. Group expectation—we are expecting the cost administration to take office, and after that, maybe we could see a pickup in investments in general, which could improve the sentiment and the loan growth.
Speaker #4: Is that scenario already incorporated in your guidance, or could that pose a little bit of the second half?
Cristian Vicuña: So pretty much what we're seeing is a low 2% year, so something 2.3, in that area. So 1 times that, plus inflation places you on the low 5% area. We're expecting something between 5% and 6% for the year. Remember that Kast administration will take office in 11 March, so we don't expect structural changes to be made, at least until Q2, maybe more skewed to the final part of the year. So the pick-up that we're expecting in terms of growth for the economy in general are more skewed to the final part of 2026 and into 2027.
Cristian Vicuña: So pretty much what we're seeing is a low 2% year, so something 2.3, in that area. So 1 times that, plus inflation places you on the low 5% area. We're expecting something between 5% and 6% for the year. Remember that Kast administration will take office in 11 March, so we don't expect structural changes to be made, at least until Q2, maybe more skewed to the final part of the year. So the pick-up that we're expecting in terms of growth for the economy in general are more skewed to the final part of 2026 and into 2027.
Speaker #1: much what we're seeing So pretty 2% year, so something 2.3 in that area. So one time that plus inflation places you on the low 5% area we're expecting something between 5 and 6 percent for the year.
Speaker #1: that cash administration will take Remember 11. So we don't expect office in March structural changes to be made at least until the second quarter, maybe more skewed to the final part of the year.
Speaker #1: So the pickup that we are expecting in terms of growth for the economy in general are more skewed to the final part of 2026 and into
Speaker #1: 2027. And you
Yuri Fernandes: ... and you account for that in your forecast, right?
Neha Agarwala: ... and you account for that in your forecast, right?
Cristian Vicuña: Yeah, yeah, that's what we are considering in the forecast.
Cristian Vicuña: Yeah, yeah, that's what we are considering in the forecast.
Speaker #1: Yeah, yeah. That's what account for that in your focus, we're considering in the
Speaker #1: forecast.
Yuri Fernandes: Perfect. Thank you so much.
Neha Agarwala: Perfect. Thank you so much.
Speaker #4: Perfect. Thank you so
Speaker #4: much. Thank right?
Operator: Thank you very much. Just a reminder, if you'd like to ask a question, it's star 2 if you're connected from the phone, and you can also ask a voice question from the web. Our next question is from Evald Stark from BC. Your line is now open. Please go ahead.
Operator: Thank you very much. Just a reminder, if you'd like to ask a question, it's star 2 if you're connected from the phone, and you can also ask a voice question from the web. Our next question is from Evald Stark from BC. Your line is now open. Please go ahead.
Speaker #3: you very much. Just a reminder, if you'd like to ask a question, it's star two. If you're connected from the phone, and you can also ask a voice question from Our next question is from the web.
Speaker #3: Ewald Stark from BCE, your line is ahead.
Ewald Stark: Hi. Thanks for taking my question. I have two questions. The first one is if you can provide any details regarding your expectations for risk-weighted assets density for the year-end. The second is regarding sensitivity to inflation. It seems like sensitivity to inflation has decreased based on monthly financial results. Those are my two questions. Well, what do you expect going forward regarding net income from indexation units relative to inflation?
Ewald Stark: Hi. Thanks for taking my question. I have two questions. The first one is if you can provide any details regarding your expectations for risk-weighted assets density for the year-end. The second is regarding sensitivity to inflation. It seems like sensitivity to inflation has decreased based on monthly financial results. Those are my two questions. Well, what do you expect going forward regarding net income from indexation units relative to inflation?
Speaker #8: question. I have two questions. The first one is if details regarding your expectations for risk-weighted asset you can provide any density for the year-end.
Speaker #8: What do you expect going forward regarding net income from indexation units, relative to—
Speaker #8: inflation. Okay.
Patricia Pérez: Okay, thanks, Evald, for your question. Regarding the risk-weighted assets for this year and the density, with a mid-single digit growth in loans, and during this year, we are expecting, consistent with that scenario, a growth in risk-weighted assets around 2% for this year. That will keep the density within this level, assuming that the proportion of the growth is what we already mentioned in our loan growth projections. Right? So that is our, like, base scenario for RWA. Regarding inflation, for this year, we are considering an average exposure to inflation of around CLP 8.5 billion, which means around 15 basis points of sensitivity to every 100 basis point inflation. Right?
Patricia Pérez: Okay, thanks, Evald, for your question. Regarding the risk-weighted assets for this year and the density, with a mid-single digit growth in loans, and during this year, we are expecting, consistent with that scenario, a growth in risk-weighted assets around 2% for this year. That will keep the density within this level, assuming that the proportion of the growth is what we already mentioned in our loan growth projections. Right? So that is our, like, base scenario for RWA. Regarding inflation, for this year, we are considering an average exposure to inflation of around CLP 8.5 billion, which means around 15 basis points of sensitivity to every 100 basis point inflation. Right?
Speaker #1: Thanks, Ewald, for your question. Regarding year and the density, with a mid-single-digit growth in loans expecting consistent with that scenario a growth in risk-weighted assets around 2% for this year.
Speaker #1: That will within this level assuming the risk-weighted assets for this the growth is mentioned in our loan growth what we already that is our base scenario for for this year, RWAs.
Speaker #1: considering an average exposure to inflation of around Regarding inflation 8.5 we are billion pesos which means around 15 basis points of sensitivity to every 100 basis points inflation, right?
Patricia Pérez: So it is true that by the end of the year, last year, we re-reduced our exposure, given the low CPI prints that we had. The average for this year will be around CLP 8.5 billion in our base scenario.
Patricia Pérez: So it is true that by the end of the year, last year, we re-reduced our exposure, given the low CPI prints that we had. The average for this year will be around CLP 8.5 billion in our base scenario.
Speaker #1: the end of the year, last So it is true that by year, we reduced our exposure given the low CPI print that we had the average for the year.
Speaker #1: We'll be around 8, 8.5 billion in our base scenario.
Cristian Vicuña: Right. So could you clarify, Evald, what do you mean by the net income from indexation?
Cristian Vicuña: Right. So could you clarify, Evald, what do you mean by the net income from indexation?
Speaker #8: Right.
Speaker #1: Clarify, Ewald, what do you—so could you mean by the net income from...
Ewald Stark: Well, if you decompose a net interest margin... Well, the NII.
Ewald Stark: Well, if you decompose a net interest margin... Well, the NII.
Speaker #8: Well, if you decompose net interest margin—well, the NII—the NII is composed of two main elements: net interest and...
Cristian Vicuña: Yeah.
Cristian Vicuña: Yeah.
Ewald Stark: The NII is composed of two main elements.
Ewald Stark: The NII is composed of two main elements.
Cristian Vicuña: Okay. Yeah, yeah.
Cristian Vicuña: Okay. Yeah, yeah.
Speaker #1: Okay, got it.
Ewald Stark: Net interest and the component of inflation. Yes.
Ewald Stark: Net interest and the component of inflation. Yes.
Speaker #8: yes. the component of inflation,
Cristian Vicuña: Yeah. So, regarding the readjustment part of the NII that you're mentioning, as Patricia already mentioned, we are carrying about 15 basis points sensitivity per 100 basis points of inflation movement, right?
Cristian Vicuña: Yeah. So, regarding the readjustment part of the NII that you're mentioning, as Patricia already mentioned, we are carrying about 15 basis points sensitivity per 100 basis points of inflation movement, right?
Speaker #1: regarding the readjustment part of the NII that you're mentioning, as Yeah. So Patricia already mentioned, we are carrying about a 15 basis points sensitivity per 100 100 basis points of inflation movements, right?
Speaker #1: percentage So that's pretty much in the area of the 8 billion long So pre-tax, it will million dollars mean about 80
Ewald Stark: Mm-hmm.
Ewald Stark: Mm-hmm.
Cristian Vicuña: So that's pretty much in the area of the $8 billion loan inflation. So pre-tax, it will mean about $80 million per 100 basis points of inflation.
Cristian Vicuña: So that's pretty much in the area of the $8 billion loan inflation. So pre-tax, it will mean about $80 million per 100 basis points of inflation.
Ewald Stark: Perfect. Let me check if I got this right. So you expect risk-weighted assets density to mildly decrease throughout the year because they are going to increase by 2%, while assets will be growing by close to 5%, given your expectations for loan growth?
Speaker #8: Every
Ewald Stark: Perfect. Let me check if I got this right. So you expect risk-weighted assets density to mildly decrease throughout the year because they are going to increase by 2%, while assets will be growing by close to 5%, given your expectations for loan growth?
Speaker #8: perfect. And let me check
Speaker #8: If I got this right, you expect risk-weighted asset density inflation to mildly decrease throughout the year because they are going to increase by 2%, while assets will be growing by close to 5%, given your expectations for—
Patricia Pérez: Yeah, right. If we assume that our density maintains during the year, an increase of 5% in loan portfolio will imply around 2.5% of risk-weighted assets growth during the year.
Patricia Pérez: Yeah, right. If we assume that our density maintains during the year, an increase of 5% in loan portfolio will imply around 2.5% of risk-weighted assets growth during the year.
Speaker #1: Yeah, per 100 basis points of we assume that
Speaker #1: So, if we assume that our density is maintained during the loan growth of 5% per year, an increase in the loan portfolio will imply around 2 to 2.5 percent of risk-weighted assets growth during the year.
Speaker #1: year. Okay, perfect.
Ewald Stark: Okay, perfect. Thanks. Thank you so much.
Ewald Stark: Okay, perfect. Thanks. Thank you so much.
Speaker #8: Thanks. Thank you so
Cristian Vicuña: Thank you very much.
Cristian Vicuña: Thank you very much.
Speaker #1: Thank you for your
Speaker #1: question.
Operator: Thank you. We have a follow-up from Yuri from JP Morgan. Your line is now open. Please go ahead.
Operator: Thank you. We have a follow-up from Yuri from JP Morgan. Your line is now open. Please go ahead.
Speaker #3: you. We have a follow-up from Yudi from JP Morgan. Your line is now open. Please go ahead.
Yuri Fernandes: Thank you for the opportunity again, guys. Just going back to the Getnet, a curiosity I have here, regarding the appraisal reports, and I know it's not the company, right? But some of the appraisal, they had a little bit, in our view, a little bit conservative, revenue CAGRs ahead, right? I guess revenue for Getnet should be growing 5% until 2035, like net income decreasing -15 CAGR until 2035. Just understand, like, is this the view of the company? Like, should we, when we see your fee guidance, and this thinking about the total for Getnet, should we assume, like, even more competitive environment, change in industry, this is the reality, like, should Getnet grow revenues at 5% going forward? Thank you.
Yuri Fernandes: Thank you for the opportunity again, guys. Just going back to the Getnet, a curiosity I have here, regarding the appraisal reports, and I know it's not the company, right? But some of the appraisal, they had a little bit, in our view, a little bit conservative, revenue CAGRs ahead, right? I guess revenue for Getnet should be growing 5% until 2035, like net income decreasing -15 CAGR until 2035. Just understand, like, is this the view of the company? Like, should we, when we see your fee guidance, and this thinking about the total for Getnet, should we assume, like, even more competitive environment, change in industry, this is the reality, like, should Getnet grow revenues at 5% going forward? Thank you.
Speaker #9: Thank you for the opportunity again, guys. Just going back to GetNet, a curiosity I have here regarding the TANK appraisal reports—and I know much, it's not the company.
Speaker #9: Thank you for the opportunity again, guys. Just going back to the GetNet, a curiosity I have here regarding the Thank appraisal reports, and I know much.
Speaker #9: Right? But some of the appraisals, in our view, were a little bit conservative. Revenue CAGR is ahead, right? I guess revenue for GetNet should be growing 5% up to 2035, but net income is decreasing.
Speaker #9: Minus 15 Cager, until 2035. Just understand, is this the view of the company? Should we, when we see our fee guidance and this thinking about the total, for GetNet, environment, changing should we assume even more competitive industry, this is the reality?
Speaker #9: Should GetNet grow revenues at 5% going forward? Thank you.
Speaker #9: Should GetNet grow revenues at 5% going forward? Thank you.
Cristian Vicuña: So, well, you mentioned, well, that's for the long run. In terms of what was in the different documents, displayed some stronger still growth in the first two years. But, actually, to your point, we believe that the industry is facing relevant transformations, right? So, on the one side, some recent news have talked about how Transbank now can renegotiate all the fee structure that were locked in by some court rulings. So that will create relevant pickup in terms of competition from the largest player in the industry.
Cristian Vicuña: So, well, you mentioned, well, that's for the long run. In terms of what was in the different documents, displayed some stronger still growth in the first two years. But, actually, to your point, we believe that the industry is facing relevant transformations, right? So, on the one side, some recent news have talked about how Transbank now can renegotiate all the fee structure that were locked in by some court rulings. So that will create relevant pickup in terms of competition from the largest player in the industry.
Speaker #1: for the long run. In terms of what was in the different documents displayed as some stronger still growth in But actually, to your point, we believe that the industry is facing relevant transformations, right?
Speaker #1: So on the first two years. side, recent news some very some have talked about how Transbank now can renegotiate all the fee structure that were locked in by some court rulings.
Speaker #1: that will create a relevant pickup in terms of competition from the largest player in the industry. At the same time, we've seen some M&A happening of initiation acquiring operation of Banco de Chile.
Cristian Vicuña: At the same time, we've seen some M&A happening of Itaú and the initiation of the acquiring operation of Banco de Chile, and as such, and we also saw the Central Bank of Chile authorizing a chamber of payments that will provide a functionality for instant payments in a similar way to Pix for the startup environment. And all of this is on the umbrella of upcoming changes in the regulation that are already approved, such as the Open Finance law. So we are seeing a super intensive change in the way the industry is configured.
Cristian Vicuña: At the same time, we've seen some M&A happening of Itaú and the initiation of the acquiring operation of Banco de Chile, and as such, and we also saw the Central Bank of Chile authorizing a chamber of payments that will provide a functionality for instant payments in a similar way to Pix for the startup environment. And all of this is on the umbrella of upcoming changes in the regulation that are already approved, such as the Open Finance law. So we are seeing a super intensive change in the way the industry is configured.
Speaker #1: saw the Chilean Central Bank as such, and we also authorizing Itaú and the of Payments that will provide functionality for instant payments in a similar way to PIX for the startup on the umbrella of upcoming changes in the regulation that are already approved.
Speaker #1: environment. And all of this is the open finance law. So we are seeing a super intensive change in the way the industry is configurated.
Cristian Vicuña: We are seeing relevant increase in competition, and as such, we expect that the economic drivers that were part of the success of the growth of Getnet for the last four years are changing as we speak, in terms of now we'll be competing with more and more relevant competitors and not only an incumbent that had the hands locked by some court rulings. This is why we believe that it was the right time to incorporate the strategic partnership with PagoNxt to support the efficiency and the growth prospects of Getnet through the capability to enter into some cross-border transactions that we can get through this partnership.
Cristian Vicuña: We are seeing relevant increase in competition, and as such, we expect that the economic drivers that were part of the success of the growth of Getnet for the last four years are changing as we speak, in terms of now we'll be competing with more and more relevant competitors and not only an incumbent that had the hands locked by some court rulings. This is why we believe that it was the right time to incorporate the strategic partnership with PagoNxt to support the efficiency and the growth prospects of Getnet through the capability to enter into some cross-border transactions that we can get through this partnership.
Speaker #1: an relevant increase in competition. And as such, we expect that the economic drivers that were part of the success of the growth of GetNet for the last four years So So well, you mentioned that, well, that's We are seeing And are changing as we Such as speak.
Speaker #1: In terms of now, we'll be competing with more and more relevant competitors and not only an incumbent that had the hands locked by some court rulings.
Speaker #1: This is why we believe that it was the right time to incorporate the strategic Pagonex to support partnership with the efficiency and the growth prospects of GetNet, through the capability to enter into some cross-border transactions that we can get through this partnership.
Cristian Vicuña: So that's pretty much the main key beliefs that are behind the transactions, and that we have still been seeing materializing in the last 2 to 3 months. Thank you, Yuri.
Cristian Vicuña: So that's pretty much the main key beliefs that are behind the transactions, and that we have still been seeing materializing in the last 2 to 3 months. Thank you, Yuri.
Speaker #1: So that's pretty much the main key beliefs that are behind the transactions. And that we have been seeing materializing in the last two to three months.
Speaker #1: Thank you,
Speaker #1: Yudi: No, no, that's a good answer, Cristian.
Yuri Fernandes: No, no, that's a good answer, Cristian. Thank you. So basically, maybe the near term is still, you know, are doing fine, but competition is building up, so who knows what's gonna happen, but it's likely that maybe we're gonna see a more challenging environment for Getnet. I guess that's the summary, right?
Yuri Fernandes: No, no, that's a good answer, Cristian. Thank you. So basically, maybe the near term is still, you know, are doing fine, but competition is building up, so who knows what's gonna happen, but it's likely that maybe we're gonna see a more challenging environment for Getnet. I guess that's the summary, right?
Speaker #9: Thank you. So basically, maybe in the near term you’re still doing fine, but competition is building up. So who knows what’s going to happen, but it’s likely.
Speaker #9: That maybe we're going to see more challenging environment for GetNet. I guess that's the summary, right?
Cristian Vicuña: Yeah. Yeah. Thank you.
Cristian Vicuña: Yeah. Yeah. Thank you.
Speaker #1: Yeah, yeah. Thank
Speaker #1: you. Thank
Yuri Fernandes: Thank you.
Yuri Fernandes: Thank you.
Speaker #9: you. Thank
Operator: Thank you. Looks like we have no further questions. I will now hand it back to the Santander Chile for the closing remarks.
Operator: Thank you. Looks like we have no further questions. I will now hand it back to the Santander Chile for the closing remarks.
Speaker #3: you. Looks like we have no further questions. I will now hand it back to the Santander-Chile for
Speaker #3: the closing
Patricia Pérez: Thank you all very much for taking the time to participate in today's call. We look forward to speaking with you again soon.
Patricia Pérez: Thank you all very much for taking the time to participate in today's call. We look forward to speaking with you again soon.
Speaker #10: Thank you all very
Speaker #10: much for taking the time to participate in today's call. We look forward to speaking with you again
Speaker #10: soon.
Operator: We'll now be closing all the lines. Thank you, and have a nice day.
Operator: We'll now be closing all the lines. Thank you, and have a nice day.
Speaker #3: We'll
Speaker #3: I'll now be closing all the lines. Thank you, and have a nice day.
