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Commentary

2 of the World's Best Banks to Own

Wide-moat Banco Santander Chile and Banco De Chile both have tremendous earnings power--and both are currently trading below fair value.

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Morningstar recently upgraded two Chilean bank stocks to wide moat:  Banco Santander Chile (BSAC) and  Banco De Chile (BCH). We've upgraded these two banks to wide-moat status primarily because of the tremendous earnings power that each bank possesses--which is illustrated by historical returns on equity of over 20% for each bank--as well as our recent assessment that Chile's banking system is a good and, therefore, stable banking environment. 

We consider Banco De Chile and Banco Santander Chile to be the best-run banks in their home country and also two of the best-managed banks in all of Latin America. Both banks command a nearly 20% share of the Chilean deposit market, which contributes to a funding cost advantage over their peers.

Timothy Puls does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.