Sept. 6 (Bloomberg) -- Banco Santander Chile extended its weekly rally to the biggest since December 2011 after Bank of America Corp. projected that Chile’s second-largest lender will benefit from rising consumer prices.
The shares climbed 5 percent to 31.38 pesos at the close in Santiago and are up 10 percent this week. The IPSA benchmark index rose 2.4 percent today.
Bank of America raised its recommendation to buy from the equivalent of sell after “strong” results in July and said that faster inflation will boost the lender’s profit. Chilean banks typically hold inflation-indexed instruments to benefit from rises in consumer prices.
The results “point to a rebound in earnings and profitability” for the second half of the year, Bank of America analysts Jose Barria and Jorg Friedemann said in an e-mailed research note to clients.
JPMorgan Chase & Co. reiterated a buy recommendation for Santander Chile and said it remains the top pick for lenders in the region outside Brazil.
Bank of America also raised Banco de Chile, the country’s largest lender, to a buy. Banco de Chile shares rose 1.6 percent to 74.99 pesos today.
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