Banco Santander Chile : Morningstar Conference Presentation

Banco

Santander

Chile

Morningstar conference

November, 2019

11

Important information

Banco Santander Chile caution that this presentation contains forward looking statementswithin the meaning of the US Private Securities Litigation Reform Act of 1995. These forward looking statements are found in various places throughout this presentation and include, without limitation, statements concerning our future business development and economic performance. While these forward looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: (1) general market, macro-economic, governmental and regulatory trends; (2) movements in local and international securities markets, currency exchange rates, and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. The risk factors and other key factors that we have indicated in our past and future filings and reports, including those with the Securities and Exchange Commission of the United States of America, could adversely affect our business and financial performance.

Note: the information contained in this presentation is not audited and is presented in Chilean Bank GAAP which is similar to IFRS, but there are some differences. Please refer to our 2018 20-F filed with the SEC for an explanation of the differences between Chilean Bank GAAP and IFRS. Nevertheless, the consolidated accounts are prepared on the basis of generally accepted accounting principles. All figures presented are in nominal terms. Historical figures are not adjusted by inflation. Please note that this information is provided for comparative purposes only and that this restatement may undergo further changes during the year and, therefore, historical figures, including financial ratios, presented in this report may not be entirely comparable to future figures presented by the Bank.

2 2

Agenda

Macro-economic environment

Strategy update

Results

Outlook

3 3

Macroeconomic environment

GDP growth in 2019 driven by investment

GDP

YoY real growth, %

4.0

2.4

1.6 1.5

3.0

Investment

YoY real growth of fixed capital formation, %

4.7 4.4 4.4

-1.3

2016

2017

2018 2019 (e) 2020(e)

Inflation

Annual change in UF inflation, %

2.8	2.9	2.4	2.2
	1.7

2016

2017

2018 2019 (e) 2020 (e)

	-2.7
2016	2017	2018 2019 (e) 2020 (e)

Central Bank ST Reference Rate

%

3.50

2.50 2.75

1.50 1.50

2016

2017

2018 2019 (e) 2020 (e)

4 4

Source: Banco Central de Chile and estimates Santander Chile

Asset quality has been stable despite increasing regulation and

market shocks in the region

Total loans: Non-performing loans (NPL) and coverage (%)

107%

89% 92%

Economic Crisis 84%

US and Europe

73%

2.8%	2.9%	2.7%	2.6%

2.1%

Feb 2010 Earthquake in

Maule Chile- 8.8Mw

and destructive Tsunami

			136%	134%
						129%	129%
121%	123%			125%
				2016: Standard
				provisioning model
				for mortgages (B1).
2014: Changes to		Higher provisioning
	provisioning		for LTV > 90%
models: Consumer
and Commercial
			Sept 2015 Earthquake in	2016-2017 GDP
			growth slowdown in
			Coquimbo Chile- 8.3Mw
				Chile
2.0%		2.0%	1.8%	1.7%	2.0%	1.9%	1.9%

April 2014 Earthquake in

Iquique Chile- 8.2Mw

mar.-09jun.-09sept.-09dic.-09mar.-10jun.-10sept.-10dic.-10mar.-11jun.-11sept.-11dic.-11mar.-12jun.-12sept.-12dic.-12mar.-13jun.-13sept.-13	dic.-13mar.-14jun.-14sept.-14dic.-14mar.-15jun.-15sept.-15dic.-15mar.-16jun.-16sept.-16dic.-16mar.-17jun.-17sept.-17dic.-17mar.-18jun.-18sept.-18dic.-18mar.-19jun.-19sept.-19
NPL (1)	Coverage (2)
	5

1. Loans with 90 days or more overdue. 2. Stock of provisions divided by NPLs. Source: SBIF

Strategy update

Offering innovative proposals for each market segment

Challenge

Offer transactional products with access to digital economy

Increase SME access to banks

and to digital economy

Enter the car loan market,

creating synergies with other

bank products

Reactivate loan growth within

mass segment

Give millennials the

opportunity to buy instead of

rent

Continue expanding cross- selling with our clients with better products

Offer a differentiated and

specialized service to gain their

loyalty

Approach

Acquiring

40 yr Super Mortgage

Wealth management

Progress

More than 10,000 clients, hard launch to follow in 4Q 2019

Agreement with Evertec. Operations to start 1Q 2020

Approved by shareholders in August, waiting final approval from CMF.

Over 94,000 clients, including some 30,000 Cuenta Life clients

Nearly 2,000 simulations and over 100 clients have signed their 40 yr mortgage

Coming soon…

Investment hubs with more specialized advisory teams

We have announced an investment plan of US$380 million for the period of 2019-2021 in technology, branch

upgrading and new products and services.

6 6

+17,000 +10,000

Downloads Clients

Aimed at younger generation,

immigrants and people who have little

or no access to Banks

Provides access to the digital economy

such as Uber and Spotify

Clients have a separate assistance

channel

Financial inclusion

Digital Better

Generation Experience

Nov	May	Jun	Jul	Coming	Strategic
alliances,
'18	'19	'19	'19	soon
integrating
Prelaunch	Employees-	Employees'	Public soft		››new services
Media ramp-
Testeam	fully	families	launch	up
	functional
	including				7	7

physical card

Strategy update

Through our Life offer we aim to educate and incentivize our clients, offering greater financial inclusion in the future

Quarterly new Life clients

43,681

481	8,483	7,653	6,846	9,585	8,751	12,971

+98,000

Total Life clients

Average score of 9 out

of 10 when asked if

they recommend Life, our happiest clients

8 8

The first 100%

digital

insurance

broker in Chile

• Open insurance market
• Digital distribution model
• Alliance with Zurich
• Open and flexible platform
• Recommended offer in
• 100% customized offer by

The idea is	SIMPLE
that	You can hire insurance
insurance	quickly and 24/7,
suits your	avoiding paperwork and
life and not

the other	long hours of meetings.
We know what you want:
way around
Simple, clear and quick
	explanations.

assistance)

PERSONALIZED	TRANSPARENT
We offer you the best	Hiring an insurance will
option of protection,	be fast and without
according to the needs	detours, that's why we
you have.	eliminate the fine print
	and we explain
	everything you need to

know so that you9 hire9 informed.

Entering a new profitable market with a large potential for growth

Total loans

Ch$bn. Var. % YoY

			CAGR=17.8%
	13.3%	7.9%	5.0%	32.5%	28.3%	+22.2%
700								0.0%
							419
600					388	343
				303	-100.0%
500			228
400	202	218			-200.0%
300					-300.0%
200								-400.0%
100								-500.0%
-								-600.0%
	2014	2015	2016	2017	2018	jun.-18jun.-19
			Loans	Var. %

NPLs and coverage

%				135.7%139.5%135.4%
12.0%					124.1%	150.00%
			108.5%
10.0%	100.4%	83.8%				130.00%
							110.00%
8.0%
								90.00%
6.0%						NPLs	Coverage	70.00%
	5.6%						50.00%
4.0%	4.2%					30.00%
2.0%			3.2%
				2.8% 2.7%	2.6% 2.6%	10.00%
0.0%					-10.00%

Net income

ROE & ROA

	Ch$bn
		CAGR=18.1%			+21.6%
		12.6	11.0
		9.7					6.8
5.6	8.4			5.6

%	22.9%	23.4%	20.1%	22.0%	21.0%
15.9%		17.4%
2.8%	4.4%	3.3%	3.8%	2.6%	3.0% 3.0%

2014 2015 2016 2017 2018 jun.-18jun.-19	2014 2015 2016 2017	2018 jun.-18jun.-19
	ROE	ROA

10 10

Strategy update

We are gaining market share in current accounts

Total current accounts 1		Net increase in current accounts 7M191
Thousands of number of current accounts	Thousands of number of current accounts

21.6%

20.6%

Total current accounts Market share	24.1%		New curent accounts	Market share

										17.2%			15.8%
	1,076	1,027	14.2%	14.1%					55.2	15.2%
				9.8%	9.6%					39.3	10.1%	5.8%	8.8%
			709	701	6.8%				34.8	36.1
				489	476						23.1		20.1
						340
											13.2
										Banco de Chile Banco Estado BCI	Scotiabank	Falabella Itau Corpbanca
		Banco de Chile Banco			Itau Corpbanca

Total current accounts

+9.6%

1,046,746

955,012

sept.-18sept.-19

11 11

1. Source: CMF, Current accounts include in local and foreign currency. Net increase is the variation of total accounts between December 2018 and July 2019, latest information available

Strategy update

Accelerating account take up through Superdigital and Life

Total gross new accounts (checking+ Life+ Superdigital)

33,230 32,781

+155.2%

86,439

47,113

33,865 42,312 40,700

+83.5%

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

12 12

Strategy update

Responsible banking

Our purpose

Contribute to the progress of

businesses and people

Our mission

To be the best bank, acting responsibly and gaining the confidence and fidelity of our employees, clients, shareholders and the society

Our how	Our seal
Simple,
Excellence
Personal, Fair
in
	execution

We are one of the 19 companies in Chile included in the FTS4Good Emerging Markets and Latin America. We are highly ranked compared to other banks in Environmental and Social

We are included in DJSI Chile and DJSI MILA (Chile, Colombia, Mexico and Peru).

13 13

Strategy update

Responsible banking

54%

Female

46%

Male

	75%	Ch$760,875 monthly
11,037	Unionized employees1	(US$12,500 yearly)
Total employees		Minimum wage in
		Santander
		(vs Ch$288,000 monthly or
		US$4,700 yearly)1

GPtW result

Average area and corporate result

86

83

79

76

2015 2016 2017 2018

Gender equality

Santander signed an agreement with the Ministry of Women and Gender Equality, which promotes equality and personal and work life balance. The agreement is an invaluable tool to deepen gender equality policies.

14 14

1. As of Dec. 2018. Excludes collections and VOX employees who are subject to a different collective bargaining agreement.

Agenda

Macro-economic environment

Strategy update

Results

Outlook

15 15

Results

Recurring ROAE of 18.6% for September 2019

Net income to shareholders		ROAE1
Ch$bn	%

+1.6%

458,93119.6%

451,728		18.6%
		19.0%
437,128	436,301	17.7%

9M18

9M19

9M18

9M19

Excluding one-off $20 billion additional provisions for consumer

Excluding one-off $30 billion provisions for SMEs

16 16

1. Net income attributable to shareholders for the year annualized divided by the average equity attributable to shareholders.

Results

Positive evolution of funding mix

Total Deposits

Ch$bn

		+10.1%	+3.8%
				22,868
20,762	21,809	21,462	22,032

Sep-18Dec-18Mar-19Jun-19Sep-19

CLP Time Deposit Cost Evolution5

3.13%	3.07%
2.86%	2.83%
2.75%	2.76%
2.50%

1.75%

31-12-201730-09-201830-06-201931-10-2019

Santander Chile BCI Central Bank Rate

Ch$ bn	9M19	YoY	QoQ
Demand	9,463	18.5%	6.2%
Time	13,405	4.9%	2.2%
Total Deposits	22,868	10.1%	3.8%
Mutual funds1	6,688	20.6%	6.7%
Loans to
deposits2	95.4%
LCR3	135%
NSFR4	108.5%

Demand deposits by segment

Ch$ bn	9M19	YoY	QoQ
Individuals	3,118	8.5%	0.5%
SMEs	1,540	15.3%	0.5%
Retail	4,658	10.7%	0.5%
Middle Market	2,738	14.4%	2.7%
Corporate (SCIB)	1,733	60.8%	27.8%
Total2	9,463	18.5%	6.2%
		17	17

1. Banco Santander Chile is the exclusive broker of mutual funds managed by Santander Asset Management, a subsidiary of SAM Investment Holdings Limited. 2. (Net Loans - portion of mortgages funded with long-term bonds) / (Time deposits + demand deposits). 3. LCR: Liquidity Coverage Ratio under new SBIF rules. 4. NSFR: Net Stable Funding Ratio according to internal methodology. This is not the Chilean model 5. Source: CMF. Quarterly Calculation is based on time deposit in CLP average and interest paid on time deposits in pesos. August rate considers the last 3 months

Results

Loan growth driven by Retail banking

Total Loans

Ch$ bn

9M19 YoY

QoQ

Ch$bn		+6.4%
					+2.6%
						31,905
29,973	30,282	30,600	31,095

Sep-18Dec-18Mar-19Jun-19Sep-19

Individuals1	17,925	9.6%	1.9%
Consumer	5,062	8.1%	1.5%
Mortgages	10,900	11.0%	2.3%
SMEs	4,040	5.3%	3.1%
Retail	21,965	8.8%	2.1%
Middle Market	8,004	5.1%	1.6%
Corporate (SCIB)	1,776	(12.4%)	13.6%
Total2	31,905	6.4%	2.6%

2019: Loan growth forecast 8-10% driven by retail loans

18 18

1. Includes other commercial loans to individuals. 2. Includes other non-segmented loans and interbank loans

Results

Slope of LT interest rates negative during the quarter

10Y Nominal Central Bank Notes Rate vs Monetary Policy Rate1

%

		Negative slope in LT	Now slope of LT
		rates fell faster than
		rate is increasing,
4.25		ST rates. This
4.03	as the Monetary
	incentivized

refinancing of	Policy Rate has
decreased
mortgages
	3.16

2.50

2.51

2.00

1.75

Jan-19

Feb-19Mar-19Apr-19May-19Jun-19

Jul-19

Aug-19

Sep-19Oct-19

CHBCP10Y MPR

19 19

1. Source: Bloomberg

Results

Higher inflation in 2Q19 drives recovery in NIMs

NIM1 & Inflation

5.0%	4.5% 4.5%	4.4%		4.4%			5.50%
4.5%					4.4%
						4.0%
						3.9%		4.50%
4.0%
										3.50%
3.5%					3.00%
3.0%				2.75%		2.50%		2.50%
2.50%	2.50%
2.5%								2.00%
								1.50%
2.0%
							1.2%			0.50%
0.6%	0.7% 0.7%	0.8%			0.5%
1.5%
1.0%						0.0%				-0.50%
	1Q18	2Q18	3Q18	4Q18	1Q19	2Q19	3Q19	4Q19
			NIM (1)		MPR (2)	UF

Net Interest Income

Ch$ bn	9M19	YoY	QoQ
Net interest income	1,041	(1.5%)	(6.1%)
Average interest-earning assets	31,836	1.0%	1.7%
Average loans	29,145	1.2%	2.3%
Interest earning asset yield3	6.7%	-33bp	-151bp
Cost of funds4	2.64%	-2bp	-122bp
NIM YTD	4.1%	-37bp

Stable NIM outlook for the rest of the year

20 20

1. Annualized Net interest income divided by average interest earning assets. 2. MPR: Monetary Policy Rate. 3.Annualized gross interest income divided by average interest earning assets. 4. Annualized interest expense divided by sum of average interest bearing liabilities and demand deposits. Averages calculated using monthly figures.

Results

Positive evolution of asset quality

Total loans

% of loans
137%	122%	130%
6.4%	6.0%	5.8%
2.1%	2.2%	2.0%

Commercial loans

% of loans

133%	117%	128%
7.2%	6.7%	6.7%
2.4%	2.6%	2.4%

NPL Impaired loans Coverage ratio NPL Impaired loans Coverage ratio

Consumer loans					Mortgage loans
% of loans						% of loans
315%	290%	320%		10.0%	43.9%
					40.1%		37.6%
7.3%
6.0%				5.0%
		5.2%			4.8%		4.8%
2.0%	2.0%	1.6%			1.7%	1.7%		1.5%
					0.0%
	NPL	Impaired loans	Coverage ratio			NPL	Impaired loans	Coverage ratio
									21	21

1. 90 days or more NPLs. 2.Impaired NPLs + restructured loans 3. Loan loss reserves over NPLs. Includes the additional provisions for Consumer recognized in 3Q18 for Ch$ 20,000 million and provisions for the new standardized model for commercial loans analyzed on a group basis for Ch$ 31,000 million in 3Q19.

Results

Asset quality of mortgage loans

18th month 90 day NPL vintage1

% of loans

0.5%				0.5%
0.5%				0.4%
0.4%				0.4%
				0.3%
0.4%
0.3%	0.3%		0.3%	0.3%
0.3%	0.3%	Avg.
0.3%	0.2%			0.2%	0.3%
		0.2%
0.2%

0.2%

0.1%

0.1%

0.0%

0.1%

4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

Origination date

22 22

1. NPL ratio 18 months after origination

Results

One time provision expense of Ch$31 billion in the quarter

Cost of credit1		Provision for loan losses
%

1.3%		1.5%		Ch$ bn	9M19	YoY	QoQ
1.0%	1.0%	1.0%		Gross provisions & charge-	(332,5)	4.0%	43.1%
	offs
1.03%		1.1%		Loan loss recoveries	64,1	(5.7%)	10.6%
				Provision for loan losses	(268,4)	6.6%	51.7%
				Cost of credit (YTD)1	1.15%	-1bp
				Adjusted cost of credit(YTD)2	1.07%	0bp

3Q18 4Q18 1Q19 2Q19 3Q19

Cost of creditAdjusted cost of credit2

One-time provision expense for new standardized model for commercial loans analyzed on a group

basis was recognized in July 2019: Ch$31bn

23 23

1. Provision expense annualized divided by average loans 2. Cost of credit adjusted for additional provisions of Ch$20 billion in 3Q18 and provisions due to change in local SME model for Ch$31 billion in 3Q19.

Results

Non-NII: Strong client treasury revenues offset lower fee income

Non-interest income (fee + financial trxs)

Ch$bn

41.2%

16.6%

96.7

103.2

109.5

117.0

136.4

Fee income

Ch$ bn	09M19	YoY	QoQ
Retail	170.2	2.9%	5.1%
Middle Market	28.4	3.6%	(5.9%)
Corporate	20.8	(25.0%)	(2.5%)
Subtotal	219.4	(0.5%)	2.9%

27.5 35.8 38.8 49.0

64.7

Others

(9.0) (407.5%)

(50.5%)

69.1 67.4 70.7 68.0 71.7

3Q18		4Q18	1Q19		2Q19	3Q19
		Net fee income		Financial trx

		Total Fees	210.4	(5.8%)	5.5%
	Financial transactions, net
		Ch$ bn	9M19	YoY	QoQ
Client	104,0	67.4%	5.1%
Non Client	48,6	575.4%	106.2%
Total Financial trx	152,6	120.1%	32.0%

24 24

Results

Restructuring our physical distribution network

Points of sale

+1.1%

381

377

9M189M19

Volume per branch1

6.8%

134,573143,762

9M189M19

Work Café

50

Traditional

331

Employees

-3.5%

11,439

11,037

9M189M19

25 25

1. Volume per branch calculated as total loans and deposits divided by number of branches.

Results

Investing to improve productivity and efficiency

Operating Expenses

	Ch$bn
00			42.5%
	40.8%	40.0%	40.3%	39.3%
50
00	181.6	183.4	180.1	191.6	189.1

50

00

50

00

3Q18	4Q18	1Q19	2Q19	3Q19
			Expenses	Efficiency

		Ch$ bn	9M19	YoY	QoQ
50%
	Personnel expenses	304.3	2.2%	0.2%
40%
	Administrative	178.0	(2.7%)	(6.4%)
	expenses
30%	78.4	35.9%	4.9%
	Depreciation
	Operating expenses	560.8	4.1%	(1.3%)
20%
		Efficiency ratio	40.6%	+62bp	-102bp
10%
		Cost/Assets	1.8%	-14.9bp	-15bp
00%

26 26

1. Operating expenses excluding Impairment and Other operating expenses 2. Efficiency ratio: Oper. Expense excluding impairment / Net interest income + fee income + financial transactions, and Other operating income, net

Results

Solid capital ratios

Core capital		BIS ratio

10.2%	10.6%	10.2%	13.0%	13.4%	12.8%

9M18	12M18	9M19	9M18	12M18	9M19

Next payout and yield stable

27 27

Results

Regulation in consultation phase: Systemic banks & operational risk

Systemic charge

Core capital additional charge

Systemic	Range (bp)	Core capital additional
level		charge (% RWA)
I	1000-1300	1.0%-1.25%
II	1300-1800	1.25%-1.75%
III	1800-2000	1.75%-2.5%
IV	>=2000	2.5%-3.5%

Factors

1. Size (30%): Total assets consolidated in the domestic market
2. Domestic interconnection (30%): assets and liabilities with financial institutions (banks and non-banks)and assets in circulation in the Chilean financial market
3. Domestic substitution (20%): share in local payments, deposits and loans
4. Complexity (20%): Factors that lead to greater difficulties regarding costs and/or time for the orderly resolution of the bank

Operational risk

Operational risk	=	Business Indicator	x	Internal Loss Multiplier
coefficient	Component (BIC)	(ILM)
		Depends on interest income, dividend		Based on historical operational
		income, financial transactions, and		losses
		commissions; all multiplied by a
		marginal coefficient

According to CMF calculations, the bank system will not require additional capital to comply with operational risk. The increase in risk weightings for operational risk will also be compensated by the decrease in risk weightings for credit risk.

28 28

Source: CMF

Agenda

Macro-economic environment

Strategy update

Results

Outlook

29 29

Outlook

Outlook for 2019

• We will continue with ambitious investment plan focusing on technology and new businesses
• Estimated loan growth of 8% in 2019 with higher growth in retail loans
• NIMs of 4.1% for 2019, depending on inflation and velocity of rate cuts
• Greater client loyalty should drive non-interest income
• Recurring* cost of credit of 1.0% (1.2% all-in) in 2019.
• Efficiency ratio ~40.5% led by improved productivity through digitalization
• Effective tax rate of ~22%
• Dividend payout and yield stable

Recurring ROAE* of 18% in 2019

* Excluding the effect of the change in provisioning models for commercial loans analyzed on a group basis.

30 30

Annex

31 31

Annexes

	Unaudited Balance Sheet	Sep-19	Sep-19	Sep-18	Sep-19/Sep-18
		US$ Ths1	Ch$ Million	% Chg.
	Cash and deposits in banks	2,894,186	2,108,704	1,780,079	18.5%
	Cash items in process of collection	666,582	485,672	564,245	(13.9%)
	Trading investments	156,145	113,767	392,013	(71.0%)
	Investments under resale agreements	-	-	-	--%
	Financial derivative contracts	10,024,886	7,304,132	2,230,448	227.5%
	Interbank loans, net	5,668	4,130	14,307	(71.1%)
	Loans and account receivables from customers, net	42,658,260	31,080,808	29,153,327	6.6%
	Available for sale investments	4,186,578	3,050,341	2,495,623	22.2%
	Held-to-maturity investments	-	-	-	--%
	Investments in associates and other companies	13,987	10,191	32,498	(68.6%)
	Intangible assets	87,628	63,846	59,748	6.9%
	Property, plant and equipment	254,128	185,158	240,002	(22.9%)
	Right of use assets	287,984	209,825	-	--%
	Current taxes	39,005	28,419	18,149	56.6%
	Deferred taxes	591,337	430,848	388,289	11.0%
	Other assets	2,063,681	1,503,598	656,928	128.9%
	Total Assets	63,930,056	46,579,439	38,025,656	22.5%
	Deposits and other demand liabilities	12,988,552	9,463,459	7,984,243	18.5%
	Cash items in process of being cleared	341,093	248,520	455,368	(45.4%)
	Obligations under repurchase agreements	392,314	285,840	180,001	58.8%
	Time deposits and other time liabilities	18,398,046	13,404,816	12,777,365	4.9%
	Financial derivatives contracts	9,067,260	6,606,406	2,086,532	216.6%
	Interbank borrowings	2,801,217	2,040,967	1,793,188	13.8%
	Issued debt instruments	12,718,369	9,266,604	8,186,718	13.2%
	Other financial liabilities	257,545	187,647	240,902	(22.1%)
	Leasing contract obligations	208,761	152,103	-	--%
	Current taxes	-	-	-	--%
	Deferred taxes	135,025	98,379	33,037	197.8%
	Provisions	367,604	267,836	275,750	(2.9%)
	Other liabilities	1,580,461	1,151,524	883,071	30.4%
	Total Liabilities	59,256,246	43,174,101	34,896,175	23.7%
	Equity
	Capital	1,223,309	891,303	891,303	0.0%
	Reserves	2,964,292	2,159,783	1,923,022	12.3%
	Valuation adjustments	3,494	2,546	(33,231)	(107.7%)
	Retained Earnings:
	Retained earnings from prior years	-	-	-	--%
	Income for the period	597,565	435,386	435,258	0.0%
	Minus: Provision for mandatory dividends	(179,270)	(130,616)	(130,577)	0.0%
	Total Shareholders' Equity	4,609,391	3,358,402	3,085,775	8.8%
	Non-controlling interest	64,419	46,936	43,706	7.4%
	Total Equity	4,673,810	3,405,338	3,129,481	8.8%
	Total Liabilities and Equity	63,930,056	46,579,439	38,025,656	22.5%		32
	1. The exchange rate used to calculate the figures in dollars was Ch$728.60 / US$1			32

Annexes

	Sep-19	Sep-19	Sep-18	Sep-19/Sep-18
	US$ Ths1	Ch$ Million	% Chg.
Interest income	2,325,789	1,694,570	1,656,904	2.3%
Interest expense	(896,981)	(653,540)	(600,137)	8.9%
Net interest income	1,428,809	1,041,030	1,056,767	(1.5%)
Fee and commission income	509,159	370,973	365,154	1.6%
Fee and commission expense	(220,408)	(160,589)	(141,707)	13.3%
Net fee and commission income	288,751	210,384	223,447	(5.8%)
Net income (expense) from financial operations	39,266	28,609	15,370	86.1%
Net foreign exchange gain	170,143	123,966	53,942	129.8%
Total financial transactions, net	209,408	152,575	69,312	120.1%
Other operating income	21,850	15,920	28,757	(44.6%)
Net operating profit before provisions for loan losses	1,948,818	1,419,909	1,378,283	3.0%
Provision for loan losses	(368,437)	(268,443)	(251,802)	6.6%
Net operating profit	1,580,382	1,151,466	1,126,481	2.2%
Personnel salaries and expenses	(417,641)	(304,293)	(297,692)	2.2%
Administrative expenses	(244,367)	(178,046)	(183,080)	(2.7%)
Depreciation and amortization	(107,660)	(78,441)	(57,738)	35.9%
Op. expenses excl. Impairment and Other operating expenses	(769,668)	(560,780)	(538,510)	4.1%
Impairment of property, plant and equipment	-	-	(39)	(100.0%)
Other operating expenses	(54,406)	(39,640)	(32,266)	22.9%
Total operating expenses	(824,074)	(600,420)	(570,815)	5.2%
Operating income	756,308	551,046	555,666	(0.8%)
Income from investments in associates and other companies	1,127	821	1,068	(23.1%)
Income before tax	757,435	551,867	556,734	(0.9%)
Income tax expense	(160,946)	(117,265)	(123,761)	(5.2%)
Net income from ordinary activities	596,489	434,602	432,973	0.4%
Net income discontinued operations2	2,332	1,699	4,155	(59.1%)
Net consolidated income	598,821	436,301	437,128	(0.2%)
Net income attributable to:
Non-controlling interest	1,256	915	1,870	(51.1%)
Net income attributable to equity holders of the Bank	597,565	435,386	435,258	0.0%

1. The exchange rate used to calculate the figures in dollars was Ch$728.60 / US$1
2. Corresponds to the discontinued operations of Redbanc S.A., Transbank S.A. and Nexus S.A. Jun-2018 has been included for comparison purposes, reclassifying from Income from investments in associates and other companies

33 33

Annexes

		3Q19	3Q19	2Q19	3Q18	3Q19/3Q18	3Q19/2Q19
		US$ Ths1		Ch$ Million		% Chg.
Interest income	765,452	557,708	676,111	568,132	(1.8%)	(17.5%)
Interest expense	(287,886)	(209,754)	(305,736)	(211,410)	(0.8%)	(31.4%)
Net interest income	477,565	347,954	370,375	356,722	(2.5%)	(6.1%)
Fee and commission income	173,272	126,246	123,361	118,606	6.4%	2.3%
Fee and commission expense	(74,816)	(54,511)	(55,387)	(49,477)	10.2%	(1.6%)
Net fee and commission income	98,456	71,735	67,974	69,129	3.8%	5.5%
Net income (expense) from financial	7,820	5,698	191,421	24,223	(76.5%)	(97.0%)
operations
Net foreign exchange gain	80,999	59,016	(142,405)	3,308	1684.0%	(141.4%)
Total financial transactions, net	88,820	64,714	49,016	27,531	135.1%	32.0%
Other operating income	8,198	5,973	4,791	4,193	42.5%	24.7%
Net operating profit before provisions for	673,039	490,376	492,156	457,575	7.2%	(0.4%)
loan losses
Provision for loan losses	(158,964)	(115,821)	(76,348)	(96,396)	20.2%	51.7%
Net operating profit	514,075	374,555	415,808	361,179	3.7%	(9.9%)
Personnel salaries and expenses	(144,091)	(104,985)	(104,751)	(104,115)	0.8%	0.2%
Administrative expenses	(78,755)	(57,381)	(61,329)	(58,215)	(1.4%)	(6.4%)
Depreciation and amortization	(36,731)	(26,762)	(25,516)	(19,298)	38.7%	4.9%
Op. expenses excl. Impairment and Other	(259,577)	(189,128)	(191,596)	(181,628)	4.1%	(1.3%)
operating expenses
Impairment of property, plant and equipment	-	-	-	-	--%	--%
Other operating expenses	(12,090)	(8,809)	(16,666)	(12,414)	(29.0%)	(47.1%)
Total operating expenses	(271,668)	(197,937)	(208,262)	(194,042)	2.0%	(5.0%)
Operating income	242,407	176,618	207,546	167,137	5.7%	(14.9%)
Income from investments in associates and	382	278	(380)	(73)	(480.8%)	(173.2%)
other companies
Income before tax	242,789	176,896	207,166	167,064	5.9%	(14.6%)
Income tax expense	(51,915)	(37,825)	(37,294)	(39,177)	(3.5%)	1.4%
Net income from ordinary activities	190,874	139,071	169,872	127,887	8.7%	(18.1%)
Net income discontinued operations2	-	-	1,699	2,295	(100.0%)	(100.0%)
Net consolidated income	190,874	139,071	171,571	130,182	6.8%	(18.9%)
Net income attributable to:
Non-controlling interest	476	347	339	455	(23.7%)	2.4%
Net income attributable to equity holders of	190,398	138,724	171,232	129,727	6.9%	(19.0%)
the Bank
1.	The exchange rate used to calculate the figures in dollars was Ch$728.60 / US$1						34 34
2.	Corresponds to the discontinued operations of Redbanc S.A., Transbank S.A. and Nexus S.A. Previous quarters have been included for comparison purposes, reclassifying from Income from investments in

associates and other companies.

Profitability and efficiency	09M19	09M18	Change bp
Net interest margin (NIM) 1	4.1%	4.5%	-37
Efficiency ratio2	40.6%	40.0%	62
Return on avg. equity	17.7%	19.0%	-128
Return on avg. assets	1.4%	1.6%	-18
Core Capital ratio	10.2%	10.2%	-2
BIS ratio	12.8%	13.0%	-25
Return on RWA	1.8%	2.0%	-15
Asset quality ratios (%)	Sep-19	Sep-18	Change bp
NPL ratio3	2.0%	2.2%	-22
Coverage of NPLs ratio 4	129.5%	121.7%	783
Cost of credit5	1.2%	1.2%	-1
Structure (#)	Sep-19	Sep-18	Change (%)
Branches	381	377	1.1%
ATMs	1,075	845	27.2%
Employees	11,037	11,439	(3.5%)
Market capitalization (YTD)	Sep-19	Sep-18	Change (%)
Net income per share (Ch$)	2.31	2.31	0.0%
Net income per ADR (US$)	1.27	1.41	(9.8%)
Stock price (Ch$/per share)	51.37	52.63	(2.4%)
ADR price (US$ per share)	28	31.98	(12.4%)
Market capitalization (US$mn)	13,187	15,066	(12.5%)
Shares outstanding (millions)	188,446.1	188,446.1	0.0%
ADRs (1 ADR = 400 shares) (millions)	471.1	471.1	0.0%

1. NIM = Net interest income annualized divided by interest earning assets.
2. Efficiency ratio: Operating expenses excluding impairment and other operating expenses divided by Operating income. Operating income = Net interest income + Net fee and commission income + Total financial transactions, net + Other operating income minus other operating expenses.
3. Capital + future interest of all loans with one installment 90 days or more overdue divided by total loans.
4. Loan loss allowance divided by Capital + future interest of all loans with one installment 90 days or more overdue.
5. Provision expense annualized divided by average loans.

35 35