Banco Santander-Chile(BSAC) - 2025 Q1 - Quarterly Report

Financial Performance - Net income for the year rose to Ch$857,623 million in 2024, compared to Ch$496,404 million in 2023, reflecting an increase of approximately 73%[15] - Total operating income rose to Ch$2,622,870 million in 2024, compared to Ch$1,950,445 million in 2023, marking an increase of 34.5%[16] - Consolidated net income for the period reached Ch$864,509 million in 2024, a substantial increase of 69.2% from Ch$510,814 million in 2023[17] - Basic earnings per share for bank owners improved to 4.55 in 2024, up from 2.63 in 2023, reflecting a growth of 73%[17] - Total comprehensive income for the year was Ch$762,579 million in 2024, compared to Ch$673,529 million in 2023, an increase of 13.2%[18] Assets and Liabilities - Total assets decreased to Ch$68,458,933 million in 2024 from Ch$70,857,888 million in 2023, representing a decline of approximately 3.4%[14] - Total liabilities decreased to Ch$64,062,099 million in 2024 from Ch$66,365,995 million in 2023, a reduction of about 3.5%[15] - The bank's equity attributable to shareholders decreased to Ch$4,292,440 million in 2024 from Ch$4,367,158 million in 2023, a decline of approximately 1.7%[15] - The bank's reserves increased to Ch$3,232,505 million in 2024, up from Ch$3,115,239 million in 2023, indicating a growth of approximately 3.8%[15] Cash Flow and Investments - Cash flows generated from operating activities amounted to Ch$1,027,036 million in 2024, up from Ch$831,573 million in 2023, representing a growth of 23.5%[19] - The ending balance of cash and cash equivalents was Ch$2,771,002 million in 2024, slightly up from Ch$2,760,724 million in 2023[20] - Total cash flows used in investment activities decreased to Ch$73,397 million in 2024 from Ch$100,085 million in 2023, a reduction of 26.6%[20] - Total flows used in financing activities increased significantly to Ch$950,678 million in 2024, compared to Ch$48,872 million in 2023[20] Provisions and Credit Risk - Credit loss expenses totaled Ch$525,831 million in 2024, compared to Ch$473,592 million in 2023, indicating an increase of 11%[17] - The Bank continuously evaluates its loan portfolio to establish necessary provisions for expected losses, ensuring compliance with regulatory standards[152] - The expected loss percentages for the Normal Portfolio range from 0.036% to 4.275%, while Substandard Portfolio losses can reach up to 43.875%[158] - The Impaired Portfolio includes loans that are 90 days or more overdue, with provisions ranging from 2% to 90% based on estimated loss[166] Dividends and Retained Earnings - The profit for the year 2023 was Ch$496,404 million, with a proposed dividend distribution of Ch$347,483 million, representing 70% of the profit[25] - The payment of common stock dividends in 2024 was Ch$347,483 million, down from Ch$485,191 million in 2023[25] - The bank's retained earnings increased from Ch$23,487 million in 2023 to Ch$24,324 million in 2024[23] Financial Instruments and Valuation - Financial assets are classified based on their measurement approach: amortized cost, fair value through other comprehensive income, or fair value through profit or loss[81] - The Bank's investments in other companies are measured at fair value according to IFRS 9, with dividends recorded under "Income from investments in companies"[45] - The Bank's governance scheme for financial instrument valuation involves two independent divisions: Treasury and Market Risks[113] - The present value method is used to value financial instruments allowing static hedging, with expected future cash flows discounted using observable interest rate curves[111] Market and Economic Conditions - The exchange rate for USD to Chilean Peso was $994.10 per US$1 as of December 2024, compared to $874.45 per US$1 in December 2023[55] - Banks are allowed to establish provisions above regulatory limits to protect against unpredictable economic fluctuations[193] Business Model and Strategy - The Bank's business model focuses on holding assets to collect cash flows, allowing for infrequent sales under certain conditions[71] - The Bank has established a new business model called "Held to collect investments" to manage high liquidity levels, indicating a strategic shift in investment duration[74] Other Key Information - The Bank holds a 99.76% total participation in Santander Corredora de Seguros Limitada, with 99.75% direct participation[39] - As of December 31, 2024, the Bank no longer has a stake in Klare Corredora de Seguros S.A.[40] - The Bank has significant influence over associated entities such as Redbanc S.A. (33.43% participation) and Transbank S.A. (25.00% participation)[44]