Analyst Note
| Michael Miller |Narrow-moat-rated Banco Santander Chile posted a strong set of numbers in the second quarter beating the FactSet consensus estimate of CLP 0.94 per share with reported adjusted EPS of CLP 0.98. These results equate to a return on equity of 21.6% for the quarter. Political uncertainty related to constitutional rewrite continues to be an overhang on the share prices of our Chilean bank coverage. We believe that the current constitutional rewrite process could have significant implications for Chile in the long term. However, we do not see a material medium-term impact on the bank’s performance from the political uncertainty. Chile has seen political uncertainty and social unrest for a few years now, but the underlying Chilean economy continues to be robust. We think that Chile is set for a strong economic recovery on the back of expansionary monetary & fiscal policy, strong commodity prices, and increased mobility with more than 60% of the Chilean population fully vaccinated.