Inflation Tailwinds and Regulatory Upside Fuel a Record Quarter
Banco Santander-Chile raises 2026 ROE guide above 24% as high inflation lifts NIM and tax reform promises structural relief
BSAC · Earnings Call · 2026-08-05
A Blowout Quarter
Banco Santander-Chile’s second-quarter 2026 results were nothing short of exceptional. Net income attributable to shareholders reached CLP 382.6 billion, up 40% quarter-on-quarter and 40% year-on-year, translating into a quarterly return on average equity of 31.5% and 27.2% year-to-date. The driver was a surge in high inflation, which boosted net readjustment income and lifted the quarterly NIM to 4.7%. As CFO Patricia Perez noted in prepared remarks, “This quarter demonstrates the earning power of the bank when revenue tailwinds combined with strong efficiency and disciplined risk management happens.” — Cristian Vicuna, Head of Strategy and Investor Relations · 2026-08-05Guidance Raised, ROE Seen Sustainable
Management used the beat to raise full-year 2026 guidance: ROE is now expected to exceed 24%, NIM should be around 4.1%, and the efficiency ratio should improve further into the low 30s. “We have been able to sustain and improve our levels of efficiency. NIMs have remained stable for the last 2 years, taking inflation phenomena side,” said Cristian Vicuna in response to an analyst question about normalized ROE. He affirmed that a normalized-cycle ROE of above 20% is “very feasible,” pointing to a path to long term ROE in the high teens to low 20s during slower periods. This is consistent with a prior call, where he stated, “we reviewed our long-term ROE recently, about a couple of quarters ago from a range of 17% to 19% to above 20%.” — Cristian Vicuna, Head of Strategy and Investor Relations · 2025-08-05 The bank now seems more confident in sustaining the higher level.Tax and Regulatory Tailwinds
The earnings call also highlighted two structural positives. First, the National Reconstruction Plan bill, now passed by Congress, will gradually reduce the corporate tax rate from 27% to 23% between 2027 and 2029. In the current high-inflation environment, the bank’s effective tax rate is being pushed to “low teens,” but on a normalized basis, Andrés Sansone explained, “the more reasonable scenario is to expect an effective tax rate into the high teens or very low 20s on a normalized scenario environment.” — Andrés Sansone, Chief Economist · 2026-08-05 This tax reform is a genuine tax reform that should uplift after-tax profitability for years to come. Second, the regulator is moving toward a more capital-efficient framework. Patricia Perez noted that the CMF’s proposed market risk RWA model could reduce the industry’s market risk RWAs by roughly 36%, which for Santander Chile would represent “around 75 basis points of CET1.” While implementation timelines remain uncertain, the direction is clearly positive and aligns with the bank’s Market risk agenda. The bank also noted progress on internal models for credit risk, though it flagged a 3–5 year horizon for meaningful impact.Cautious Macro, but Loan Growth Set to Recover
Despite the stellar profitability, the macro backdrop remains challenging. Chile’s 2026 GDP growth forecast has been cut to around 1%, weighed by weaker activity and higher energy prices. Loan growth for 2026 is guided to the mid-single digits, but skewed to the lower end (~4.5%), with better momentum expected in the third quarter and into 2027. As Cristian Vicuna put it, “into 2027, with a normalized inflation of 3% and a GDP expansion of 3%, we should be on the mid- to high single digits as an industry.” The government’s expanded mortgage subsidy program (80,000 subsidies) is seen as a direct support for mortgage origination and construction, a key catalyst for the commercial and consumer books.In sum, Banco Santander-Chile is riding a rare confluence of near-term inflationary gains and longer-term structural improvements in taxes and capital efficiency. The market’s focus will now shift to how the bank manages the inevitable normalization of inflation and whether it can hold onto those efficiency gains. With a strong capital position (CET1 of 11.1% vs. a 9.08% requirement) and an improving regulatory backdrop, the bank appears well-positioned to translate a cyclical beat into a more durable earnings power.We have been able to deliver on our strategy, so we have been able to sustain and improve our levels of efficiency. NIMs have remained stable for the last 2 years, taking inflation phenomena side. And we've been able to grow the customer base and at the same time, delivering on the fee side of the business, right? So all of this included gives you an idea that it's very feasible for us to deliver on a normalized cycle an ROE of above 20%.