BANCO SANTANDER CHILE (BSAC)·Q4 2025 Earnings Summary
Banco Santander-Chile Posts 23% Net Income Growth, Guides to 22-24% ROE for 2026
February 5, 2026 · by Fintool AI Agent
Banco Santander-Chile delivered strong Q4 2025 results with net income of CLP 1,053 billion (+23% YoY), achieving a 23.5% return on equity and a best-in-class 36% efficiency ratio . Revenue came in marginally below consensus at $788M vs $792M expected (-0.5%), but the bank's profitability metrics and disciplined cost control continue to set it apart in the Chilean banking industry.
Did Banco Santander-Chile Beat Earnings?
Revenue slightly missed consensus by 0.5%, but the more important story is the bank's profitability transformation. Key Q4 2025 metrics:
Management emphasized that ROE has improved by more than 6 percentage points compared to the industry's 1 percentage point improvement, while efficiency improved 4 percentage points vs 1 point for peers .
What Did Management Guide for 2026?
Management provided constructive 2026 guidance, expecting profitability to remain strong despite slightly lower inflation:
Key 2026 Guidance :
- ROE: 22-24% (vs 23.5% in 2025)
- Loan Growth: Mid-single digits, with stronger rebound in H2
- NIM: ~4.0% sustained despite lower rates
- Fee Growth: Mid-to-high single digits
- Efficiency Ratio: Mid-30s
- Cost of Risk: ~1.3% (improving from ~1.4%)
- Dividend Payout: 60-70%
Macro Assumptions :
- GDP growth: ~2%
- Inflation: Below 3%
- Average policy rate: ~4.3%
Ask Fintool AI AgentWhat Changed From Last Quarter?
Several notable developments in Q4:
1. Getnet Strategic Partnership
The bank sold a minority stake in Getnet Chile to PagoNxt (Santander Group's payments business) for CLP 68 billion upfront plus 10% of net operating revenues for 7+ years . Key details:
- Santander-Chile retains majority control and board seats
- ~65-70% of Getnet's net income still flows to BSAC
- P&L impact is "negligible" — about 20bps of ROE
- Transaction approved with 87% shareholder support
Management cited increasing competition (Transbank renegotiating fees, Itaú M&A, Banco de Chile entering acquiring, instant payments coming) as rationale for bringing in a strategic partner .
2. Pillar II Charges Reduced
The Chilean regulator reduced BSAC's Pillar II capital charge from 25bps to 13bps, demonstrating solid risk management .
3. Client Base Expansion
The bank now serves 4.6 million clients with 58% active, including 2.3 million digital clients accessing platforms monthly . Business current accounts grew 19% YoY.
How Is the ROE Trending?
ROE has consistently exceeded 21% for the past several quarters, even in periods of lower inflation. The Q4 2025 ROE of 21.9% was achieved with only 0.61% UF variation .
*Values retrieved from S&P Global
What Did Management Say About Asset Quality?
Cost of risk was approximately 1.4% in 2025 and is expected to improve to 1.3% in 2026 . Key points:
- Commercial portfolio: Significant work done on NPL management; stabilized outside of agriculture sector
- Mortgage portfolio: Increasing NPL but not expected to pass through to cost of risk; judicial collection processes taking longer
- Consumer portfolio: Slight seasonal pickup in December due to summer holidays affecting collection contact rates, but nothing concerning
Management expressed comfort that the mortgage NPL issues will not materially impact provisions.
How Did the Stock React?
BSAC shares were essentially flat following the earnings release:
The stock has rallied significantly in recent months, up 72% from its 52-week low, likely reflecting improving Chilean macro sentiment and confidence in the incoming Kast administration.
Ask Fintool AI AgentWhat's the Economic Outlook for Chile?
Management provided a constructive view on Chile's macro environment :
Positive Developments:
- Inflation converging to target (3.5% at year-end, expected <3% in 2026)
- Business confidence moving into optimistic territory
- New Kast administration (taking office March 11, 2026) expected to be more market-friendly
- Potential corporate tax rate reduction from 27% to 23% (phased in over several years)
- Regulatory simplification initiatives supporting investment
Headwinds:
- Labor market still fragile (8% unemployment)
- Residential construction remains under pressure
- Global risks from geopolitical tensions and trade fragmentation
The bank expects policy changes to start impacting in H2 2026 and more meaningfully in 2027.
Key Q&A Highlights
On Interest Rate Caps : There's early discussion about removing caps on consumer lending rates (currently 40% for credit cards), but management doesn't expect changes in 2026. Any reform would support mass market bancarization.
On Loan Growth by Segment :
- Consumer: Steady growth in auto lending; installment loans weaker but improving
- Commercial: Mining and energy investment active; broader reactivation expected as confidence builds
- Mortgage: Gradual improvement, especially in affluent segment; mortgage subsidy law helping
On Expenses : Targeting inflation +1% expense growth long-term, supported by technology transformation, AI implementation, and peso appreciation (25% of admin expenses are USD/EUR-linked).
On Santander Group Synergies : The parent company recently acquired an annuities company from Principal (closing Q3 2026). Banks can't own annuities companies in Chile, so this remains separate but creates natural business complementarity for longer-duration assets.
Forward Catalysts
- New Administration (March 2026): Kast government taking office may accelerate policy reforms
- Corporate Tax Reduction: If implemented, would improve business competitiveness
- Interest Rate Normalization: Policy rate expected to reach neutral ~4.25% in H1 2026
- Credit Growth Acceleration: Mid-single-digit loan growth expected, stronger in H2
- Getnet Partnership Benefits: Access to global payment capabilities and cross-border transactions
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