Santander Chile Q2 EPS at $2.92, CET1 Ratio at 10.9%, Basel III Ratio at 17.0%

Santander Chile reported Q2 EPS of $2.92, with a CET1 ratio of 10.9% and an overall Basel III ratio of 17.0%. The bank's capital includes a provision for 60% of 2025 earnings to date, and its net interest margin increased from 3.1% in Q2 2024 to 4.1% in Q1 and Q2 2025.

Santander Chile (NYSE: BSAC) reported robust financial results for the second quarter of 2025, with a net income of $550 billion ($1.25 per ADR), representing a 62.8% increase year-over-year. The bank achieved an impressive return on average equity (ROAE) of 24.5%, maintaining above 20% returns for the fifth consecutive quarter. Key highlights include a robust net interest margin (NIM) of 4.1%, an improved efficiency ratio of 35.3%, and a strong capital position with a CET1 ratio of 10.9% [2].

The bank's customer base expanded by 11.5% year-over-year to 4.5 million customers, with digital customers growing 7.9% year-over-year to 2.3 million. Net commissions increased by 13.2% in the first half of 2025, with a recurrence ratio of 61.9%. The bank's 22.4% market share in checking accounts highlights its competitive positioning, particularly in digital US dollar account offerings.

The bank's profitability improvement stems from multiple positive drivers. The net interest margin (NIM) recovered significantly to 4.1% in Q2 2025 from 3.1% a year ago, primarily due to the monetary policy rate reduction lowering funding costs from 5.0% to 3.9%. This demonstrates the bank's ability to benefit from Chile's changing interest rate environment while maintaining strong margins.

Operational efficiency continues to be a standout strength, with the efficiency ratio improving to 35.3% from 42.1% year-over-year. This best-in-class efficiency metric shows management's commitment to cost discipline despite investments in technology and branch network transformation. The completion of the Gravity project - migrating from Mainframe to Cloud - represents a strategic technological advancement that should yield long-term operational benefits despite causing temporary transitional expenses.

Customer acquisition metrics remain robust, with total customers growing 11.5% year-over-year to approximately 4.5 million, while digital customers increased 7.9% to 2.3 million. The bank's 22.4% market share in checking accounts highlights its competitive positioning, particularly in digital US dollar account offerings.

Capital strength remains solid with a CET1 ratio of 10.9% and an overall Basel III ratio of 17.0%, including provisions for 60% of 2025 earnings to date. This capital position, combined with high credit ratings (including A2 from Moody's and A- from S&P), provides a strong foundation for potential future growth while maintaining financial stability.

References:
[1] https://www.santander.com/en/press-room/press-releases/2025/07/q2-2025-santander-bank-results
[2] https://www.stocktitan.net/news/BSAC/banco-santander-chile-announces-second-quarter-2025-nbb4uneqqjjz.html