Banco Santander-Chile : Banco Santander Chile Announces Fourth Quarter 2012 Earnings

 Banco Santander-Chile : Banco Santander Chile Announces Fourth Quarter 2012
                                   Earnings

Santiago, Chile, February 4, 2013. Banco Santander Chile (NYSE: BSAC; SSE:
Bsantander) announced today its unaudited results for the fourth quarter and
full-year 2012. These results are reported on a consolidated basis in
accordance with Chilean GAAP.

4Q12 net income rises 124.3% QoQ and 11.0% YoY.

In 4Q12, Net  income attributable to  shareholders totaled Ch$113,402  million 
(Ch$0.60 per share and US$0.50/ADR). Compared  to 3Q12 (from now on QoQ),  net 
income increased  124.3%.  Compared to  4Q11  (from  now on  YoY)  net  income 
increased 11.0%. During the quarter, the Bank saw an important QoQ improvement
in profitability as loan growth accelerated, the funding mix improved, margins
rose in line with higher inflation and provision expenses declined,  following 
the non-recurring charges recognized in 3Q12.

ROE reaches 21.6% in 4Q12

ROAE in the quarter reached 21.6%.  Core capital reached 10.7% as of  December 
31, 2012 and the Bank's BIS ratio reached 13.7% at the same date.

Positive evolution of margins in the quarter

In 4Q12, Net  interest income  increased 18.5%  QoQ. The  Net interest  margin 
(NIM) in  4Q12  reached 5.5%  compared  to 4.7%  in  3Q12 and  5.3%  in  4Q11. 
Inflation rebounded from -0.16% in 3Q12 to  1.11% in 4Q12 and this drove  the 
strong QoQ rise in net interest  income. Compared to 4Q12 net interest  income 
increased 7.2% in line with loan growth.

Loan growth accelerating in segments the Bank has targeted for growth

In 4Q12, total loans increased 2.0% QoQ. In the quarter, loan growth continued
to accelerate  in the  markets the  Bank is  targeting the  most:  high-income 
individuals, SMEs  and middle  market of  companies. Loans  in these  combined 
markets increased  2.9% QoQ  and 9.6%  YoY. Loans  to high-income  individuals 
increased 2.1% QoQ. Lending to SMEs (defined as companies that sell less  than 
Ch$1,200 million per year) expanded 3.3% QoQ, reflecting the Bank's consistent
focus on this segment. In the quarter,  the Bank also focused its loan  growth 
in the middle-market  companies segment (companies  with annual sales  between 
Ch$1,200 million and Ch$10,000 million per year), which increased 3.9% QoQ.

Solid growth of non-interest bearing demand deposits

Total deposits were flat QoQ and grew 5.6% YoY. In the quarter and  throughout 
2012, the Bank has  focused on increasing its  core deposits (demand  deposits 
and time deposits from  non-institutional sources), while reducing  dependence 
on institutional deposits  that tend  to be more  expensive. As  a result,  at 
year-end 2012 total  non-interest bearing demand  deposits increased 8.0%  QoQ 
and 12.6% YoY. This has improved the Bank's funding mix, as core deposits tend
to be cheaper and more stable than other sources of funding.

Provision expense decreases 24.3% QoQ

Net provision for loan losses in  4Q12 decreased 24.3% QoQ and increased  4.4% 
YoY. Net provision expense in consumer loans decreased 24.4% QoQ and increased
6.3% YoY. In 3Q12, the Bank recalibrated the consumer loan-provisioning  model 
that increased  the  minimum provision  set  aside for  renegotiated  consumer 
loans. Excluding this effect, the QoQ decline in provision expense was 4.6% in
4Q12.

Cost growth moderates as key projects advance

Operating expenses  in  4Q12 increased  4.0%  QoQ and  7.0%  YoY as  the  Bank 
continued with  its  projects  of  investing  in  a  new  Client  Relationship 
Management system  and  the  Transformation  Initiatives  aimed  at  enhancing 
productivity in retail  banking. The  efficiency ratio reached  40.0% in  4Q12 
compared to 42.4% in 3Q12 and 38.5% in 4Q11. Operating expense growth has been
decelerating in  recent quarters  as  headcount has  remained stable  and  the 
different productivity  initiatives implemented  since  2011 are  starting  to 
produce results.

In 2012, Santander Chile's ROE reached 18.9% with an efficiency ratio of 40.0%

In  2012  (12M11),  Net   income  attributable  to  shareholders^[1]   totaled 
Ch$387,967 million (Ch$2.06 per share and US$1.72/ADR^[2]) and decreased 10.8%
compared to net income achieved in 2011. ROE reached 18.9% in 12M11, among the
highest returns in the Chilean financial system. The Efficiency ratio in 12M12
reached 40.0%, one of the best in Chile.

CONTACT INFORMATION
Robert Moreno
Manager, Investor Relations Department
Banco Santander Chile
Bandera 140 Piso 19
Santiago, Chile
Tel: (562) 320-8284
Fax: (562) 671-6554
Email: rmorenoh@santander.cl
Website: www.santander.cl

[1]The results in this report are unaudited and are reported according to
Chilean Bank GAAP.
[2]Earnings per ADR was calculated using the Observed Exchange Rate of
Ch$478.6 per US$ as of December 31, 2012.

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Source: Banco Santander-Chile via Thomson Reuters ONE
HUG#1675413
 
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