Banco Santander Chile's Record Q4 2024 Earnings: Strategic Initiatives Drive Profit Growth

Banco Santander Chile (BSAC) reported strong financial results for the fourth quarter of 2024, with record profits and strategic initiatives driving the bank's impressive performance. The bank's net income attributable to shareholders reached $858 billion, marking a 72.8% increase year-over-year, and a return on average equity (ROAE) of 20.2%. In the fourth quarter alone, net income grew 13.7% from the previous quarter, achieving an ROAE of 26.0%. The bank's operating income rose by 34.5% year-over-year, driven by a recovery in net interest margin (NIM), which increased to 3.6% for the year and 4.2% in Q4.

The bank's strong financial performance can be attributed to several strategic initiatives and favorable market conditions in Chile. Here are some key factors that contributed to the bank's impressive results:

1. Interest Rate Management: The bank successfully managed its interest rates, with the net interest margin (NIM) expanding to 4.2% in Q4 2024, up from 2.2% in 2023. This was achieved by reducing funding costs from 6.8% to 4.7%, demonstrating the bank's superior asset-liability management in a declining rate environment.
2. Customer Growth and Funds Accumulation: The bank's customer base grew by 6.4% year-over-year, reaching approximately 4.3 million customers, with over 2.2 million digital customers. This growth, along with a 12.6% increase in customer funds since December 2023, reflects the bank's successful customer engagement and digital strategy.
3. Efficiency and Cost Control: The bank's efficiency ratio improved to 36.5% in Q4 2024, down from 46.6% in the previous year. This impressive figure for the Latin American banking sector indicates successful cost control and digital transformation efforts.
4. Market Share and Fee Income Generation: The bank's market share in current accounts remained robust at 23.2% as of October 2024, driven by increased customer demand for US dollar current accounts, which can be easily opened digitally by customers. This, along with a 60.3% recurrence ratio, indicates strong fee income generation relative to operating expenses.
5. Capital Position and Dividend Payout: The bank maintained solid capital levels with a BIS ratio of 17.1% and CET1 of 10.5%, providing ample room for growth while maintaining a 70% dividend payout ratio. These metrics significantly exceed regulatory requirements and peer averages in the region.
6. Robust NPL Coverage Ratio: Although the non-performing loans (NPL) ratio increased to 3.2% and the impaired portfolio to 6.7%, the 115.4% NPL coverage ratio provides adequate protection against potential losses.



Banco Santander Chile's record profits in Q4 2024 reflect the bank's strategic initiatives and favorable market conditions in Chile. The bank's strong net interest income and net fee income growth are sustainable, driven by its diversified business model, customer growth and engagement, effective interest rate management, and robust commercial dynamics. The bank's digital transformation strategy has significantly contributed to its customer base expansion and improved efficiency ratio, positioning it favorably for continued market leadership and operational excellence. As the bank continues to execute its strategic initiatives, investors can expect strong financial performance and value creation in the coming years.