Analyst Note| Michael Miller |
Narrow-moat-rated Banco Santander Chile reported solid decent second-quarter results, as the bank continues to grow its loan book at an impressive rate. Net revenue was up 20.5% to CLP 670,307 million, while earnings per share increased to CLP 1.52 from CLP 1.00 last year. These results translate to a return on average equity of 31.7%, which is well above the bank’s long-term average. As we incorporate these results, we do not plan to make any material changes to our fair value estimate $19.50 per ADR share for Banco Santander Chile. At current market prices we do see Banco Santander Chile as modestly undervalued, though we note that the bank must navigate a period of economic and political uncertainty in Chile.