BANCO SANTANDER CHILE

BANCO SANTANDER CHILE

Previous company name
Banco Santiago
Name change date

Company Overview
Banco Santander Santiago, doing business as Banco Santander Chile and Santander Santiago, is a national commercial bank that provides a range of commercial and retail banking services to corporate and individual customers in Chile. The Bank, with headquarters located in Santiago, Chile, the Bank was established in August 2002 from the merger of Banco Santander and Banco Santiago, forming Chile’s largest financial institution in terms of total assets, total deposits, loans and shareholders’ equity and the eighth largest bank in Latin America.
Banco Santander Santiago offers various deposit products, including time deposits, demand deposits, savings accounts, and checking accounts. The Bank also provides Chilean peso and foreign currency denominated loans to finance various commercial transactions, trade financing, foreign currency forward contracts, and credit lines, as well as consumer loans, credit cards, auto loans, residential mortgage loans, and leasing contracts. In addition, Banco Santander Santiago offers various financial services, including financial leasing, factoring, treasury services, financial advisory services, mutual fund management, securities brokerage, insurance brokerage, investment management, interest rate and foreign currency derivatives, securitization services, and other tailored financial products. As of December 2006, it operated 375 branches, including 103 branches under the Santander Banefe brand name, and 272 branches under the Santander Santiago brand name. The Bank also operated 22 payment centers under a brand name of Santander SuperCaja, and had 1,588 ATM’s, as of the same date. Banco Santander Santiago, listed on the New York Stock Exchange (NYSE: SAN) and the Santiago Stock Exchange (SSE: Bsantander), is a subsidiary of the Spanish-based Banco Santander Central Hispano S.A.
Business Summary
Commercial Bank
Description and history
The Group were formed on August 1, 2002 through the merger of Santiago and Old Santander-Chile, both of which were subsidiaries of controlling shareholder, Banco Santander Central Hispano. The Group is the largest bank in Chile in terms of total assets, total deposits, loans and shareholders’ equity. At December 31, 2006, they had total assets of Ch$14,843,439 million (US$27,774 million), loans net of allowances outstanding of Ch$11,614,895 million (US$21,733 million), deposits of Ch$9,392,332 million (US$17,574 million) and shareholders’ equity of Ch$1,245,339 million (US$2,330 million). As of December 31, 2006, they employed 8,184 people (on a consolidated basis) and had the largest private branch network in Chile with 397 branches (includes payment centers Santander SuperCaja). Their headquarters are located in Santiago and they operate in every major region of Chile.

They provide a broad range of commercial and retail banking services, including Chilean peso and foreign currency denominated loans to finance a variety of commercial transactions, trade financing, foreign currency forward contracts, credit lines and a variety of retail banking services, including mortgage financing. In addition to their traditional banking operations, they offer a variety of financial services including financial leasing, financial advisory services, mutual fund management, securities brokerage, insurance brokerage and investment management.

The legal predecessor of Santander-Chile was Banco Santiago (Santiago). Santiago was incorporated by public deed dated September 7, 1977 granted at the Notary Office of Alfredo Astaburuaga Gбlvez. Santiago received its permission to incorporate and function as a bank by Resolution No. 118 of the Superintendency of Banks on October 27, 1977. The Bank’s bylaws were approved by Resolution No. 103 of the Superintendency of Banks on September 22, 1977. In January 1997, Santiago merged with Banco O’Higgins with Santiago being the surviving entity. In 1999, Santiago became a controlled subsidiary of Banco Santander Central Hispano. As of June 30, 2002, Santiago was the second largest private sector bank in Chile in terms of total assets, deposits, loans and shareholders’ equity.

Old Santander-Chile was established as a subsidiary of Banco Santander Central Hispano in 1978. In 1982, Old Santander-Chile acquired a significant portion of the assets and liabilities of Banco Espaсol-Chile, a domestic bank that had become insolvent. In July 1996, Old Santander-Chile was merged into Banco Osorno y la Uniуn (‘Banco Osorno’) becoming Banco Santander-Chile , the third largest private bank in terms of outstanding loans at that date.

The Group provides a complete range of financial services to corporate and individual customers. Their clients are divided into the following segments:

The retail segment primarily serves the following types of customers:

- Lower-middle to middle-income (Santander Banefe), consisting of individuals with monthly income between Ch$120,000 (US$225) and Ch$400,000 (US$749), which are served through our Banefe branch network. This segment accounts for 5.1% of our loans at December 31, 2006. This segment offers customers a range of products, including consumer loans, credit cards, auto loans, residential mortgage loans, debit card accounts, savings products, mutual funds and insurance brokerage.

- Middle- and upper-income, consisting of individuals with a monthly income greater than Ch$400,000 (US$749). Clients in this segment account for 38.1% of our loans at December 31, 2006 and are offered a range of products, including consumer loans, credit cards, auto loans, commercial loans, foreign trade financing, residential mortgage loans, checking accounts, savings products, mutual funds and insurance brokerage.

- Small businesses, consisting of small companies with annual sales less than Ch$1,200 million (US$2.2 million). At December 31, 2006, small companies, or SMEs, represented approximately 16.0% of our total loans outstanding. Customers in this segment are offered a range of products, including commercial loans, leasing, factoring, foreign trade, credit cards, mortgage loans, checking accounts, savings products, mutual funds and insurance brokerage.

The Middle-market segment consists primarily of mid-sized companies, companies in the real estate sector and large companies.

- Mid-sized companies, consisting of companies with annual sales over Ch$1,200 million (US$2.2 million) and up to Ch$3,500 million (US$6.5 million). Customers in this segment are offered a wide range of products, including commercial loans, leasing, factoring, foreign trade, credit cards, mortgage loans, checking accounts, cash management, treasury services, financial advisory, savings products, mutual funds and insurance brokerage. At December 31, 2006, these clients represented 8.2% of our total loans outstanding.

- Real estate. This segment includes all companies in the real estate sector. At December 31, 2006, these clients represented 4.7% of our total loans outstanding. Apart from traditional banking services, we also offer clients in the real estate sector specialized services for financing primarily residential projects in order to increase the sale of residential mortgage loans.

- Large companies, consisting of companies with annual sales over Ch$3,500 million (US$6.5 million). Customers in this segment are offered a wide range of products, including commercial loans, leasing, factoring, foreign trade, credit cards, mortgage loans, checking accounts, cash management, treasury services, financial advisory, savings products, mutual funds and insurance brokerage. At December 31, 2006, these clients represented 9.6% of our total loans outstanding.

The Wholesale segment is comprised of:

- Companies that are foreign multinationals or part of a large Chilean economic group with sales over Ch$3,500 million (US$6.5 million). At December 31, 2006, these clients represented 15.1% of our total loans outstanding. Customers in this segment are offered a wide range of products, including commercial loans, leasing, factoring, foreign trade, mortgage loans, checking accounts, cash management, treasury services, financial advisory, savings products, mutual funds and insurance brokerage.

The Institutional segment is comprised of:

- Institutional corporations such as universities, government agencies, municipalities and regional governments. At December 31, 2006, these clients represented 1.9% of our total loans outstanding. We offer these customers a range of products, including commercial loans, leasing, factoring, foreign trade, credit cards, mortgage loans, checking accounts, cash management, savings products, mutual funds and insurance brokerage.

The Treasury Division provides sophisticated financial products mainly to companies in the wholesale banking and the middle market segments, including such products as short-term financing and funding, securities brokerage, interest rate and foreign currency derivatives, securitization services and other tailored financial products. The Treasury division also manages the Bank’s trading positions as well as the non-trading investment portfolio.

Their leasing subsidiary (Santiago Leasing S.A.) has been segmented into the above categories. The subsidiary Santander S.A. Agente de Valores is included in the Treasury Division and the mutual fund and insurance brokerage subsidiaries are included in the various sub-segments (other than in the Treasury Division).

Established from the merger of Banco Santander and Banco Santiago

Description in Spanish
Banco Santander Chile antes Banco Santiago Banco Santander Chile (BSC), quien forma parte del grupo Santander, es el banco mбs grande de Chile. Con 347 sucursales en el paнs, el banco ofrece crйditos hipotecarios, tarjeta de crйditos, prйstamos y servicios de asesoramiento financiero para aproximadamente 2 millones de clientes. El servicio corporativo del banco incluye prйstamo comercial y leasing, financiamiento comercial, servicio de asesoramiento financiero y tesorerнa.

Con respecto a la internacionalizacion del Banco Santiago, este cuenta con una oficina de representacion en New York, representantes en Argentina, Brasil y Venezuela. Asimismo, utiliza la red de contactos de BCH y HSBC a traves de mas de 400 corresponsales.

Adicionalmente, Banco Santiago cuenta con cinco empresas filiales, destacando Santiago Leasing, Santiago Corredores de Bolsa y Santiago Administradora de Fondos Mutuos, entre las mayores del mercado.
Business Line
Provides a range of commercial and retail banking services to corporate and individual customers in Chile
Subsidiary
ADM. FINANCIERO TRANSANTIAGO
Advisor

IPO date

US SIC Code
6021
Company Address
Bandera, 172 – P.O. Box 14437 Correo 21

City province or state postal code
SANTIAGO
Phone: 56 (2) 692 40 00
Fax: 56 (2) 698 98 90
Country address: CHILE
Website url: www.santander.cl

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