Banco Santander Chile : Equity Presentation August 2020

Banco Santander Chile

Results / Strategy

Update

August 2020

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 2019 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.

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AGENDA

COVID19: REGULATORY & MACRO UPDATE

SAN CHILE: BALANCE SHEET AND RESULTS

SAN CHILE: STRATEGIC INITIATIVES UPDATE

3 3

Macroeconomic environment

A gradual re-opening of the economy has commenced

New cases and ICU patients		Lethality rate

(7-day rolling average)					(% Total deaths/ Total cases, as of July 28)
350					2500	United Kingdom	15.2
300						Belgium	14.8
					Italy	14.2
	New cases (per			2000	France	13.7
250			Mexico	11.1
mill.)					Spain	10.1
						Canada	7.7
					1500	Sweden	7.2
200	ICU patients (rhs)			Switzerland	5.7
			Peru	4.7
						Denmark	4.4
150						Germany	4.4
				1000	Poland	3.8
					Brazil	3.6
100						US	3.4
					Colombia	3.4
					500	Japan	3.1
50					Chile	2.6
					Czechia	2.4
						South Korea	2.1
0					0	New Zealand	1.4
				Australia	1.1
Mar-20	Apr-20	May-20	Jun-20	Jun-20	Jul-20	Singapore	0.1

Positivity rates

People under quarantine

(7-day rolling average)
50	Metropolitan Region					12000		Met. Region
										10515	10609
					10000		Other regions
40
National							Total			9122
30								8000		8262	7832
20								6000		5507
10							11,2	4000
						10,0
								2000
0
Apr-20	Apr-20	May-20	May-20	Jun-20	Jun-20	Jul-20	Jul-20	0
								Mar-20	Apr-20	May-20	May-20	Jun-20	Jul-204	Jul-20

Source: John Hopkins University, Ministry of Health (Chile) and Santander

Macroeconomic environment

Step by step phases to open country

Criteria	To pass from	To pass from	To pass from	To pass from	To pass from
	quarantine to	transition to	no quarantine	initial phase	advanced
	transition	no quarantine	to initial	to advanced	phase to total
			phases	phase	phase
Regional ICU	≤90%	≤85%	≤85%	≤80%	≤80%
occupation
National ICU	≤85%	≤85%	≤80%	≤80%	≤80%
occupation
Communal Rt	≤1	≤1	≤1	≤1	≤1
Projected rate of	Sustained	Sustained	≤50 per	≤25 per	≤1 per
active cases	decrease for 3	decrease for 2	100,000	100,000	100,000
(regional)	weeks	weeks	inhabitants	inhabitants	inhabitants
Regional	≤15%	≤10%	≤10%	≤5%	≤1%
positivity rates
% of isolated	≥ 80%	≥ 80%	≥ 80%
cases in <48	≥ 80%	≥ 80%
hours
% of new contact	N/A	N/A	≥ 60%	≥ 60%	≥ 60%
cases

Regulatory update

Update on regulatory measures

Covid-19 fiscal fund of up to US$12 billion

• Two objectives: enhance financial support to families, and provide fiscal stimulus for a fast economic recovery.
• Can be used within two years.
• Financed through debt issuance and financial assets of the Government

Aid to middle class program

• Cash transfer of Ch$500 thousand (USD 600)
• Public soft loans with 0% real interest, and payment conditional on income.
• Household rent subsidy.
• State guarantee for mortgage postponements of up to 6 months [announced but not yet in Congress]. Many banks are already in their second wave of voluntary reprograming

COVID-19guarantee line: Risk weighting to be modified from 100% to 10%.

6 6

Regulatory update

Update on regulatory measures

One-time early withdrawal of pension saving (tax free)

Amount of savings	Maximum amount to be withdrawn
Savings < US$ 1,300	Full amount of savings
US$ 1,300 < Savings < US$ 13,000	US$ 1,300
US$ 13,000	< Savings < US$ 55,000	10% Savings
US$ 55,000	< Savings	US$ 5,500

Liquidity programs: FCIC1 & LCL2 lines: Extension of liquidity program (FCIC2) with a limit of USD 4 bn per bank conditional on loan growth.

Bank bond purchasing program: USD 8 bn for bank bonds and Central Bank bonds, with USD 1.9 bn outstanding.

Treasury bond purchasing: Constitutional reform to allow the Central Bank to buy and sell Treasury bonds in the secondary market [To be approved soon in Congress].

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1. FCIC line: For up to 4 years. Eligible collateral: Standard collaterals, corporate bonds, and high ratings commercial loans 2. LCL line: For up to 2 years. Constraint: Bank reserves at the Central Bank.

Regulatory update

"Plan Paso a Paso Chile Se Recupera"

#1. US$34bn investment, US$24.54bn from the private sector

Under the plan the private sector would invest US$24.52bn in 130 projects, with US$8.62bn of this total in concessions for 31 assets.

#2. Salary coverage protection for 6 months

The State will create a new / temporary hiring subsidy to cover a percentage of workers' monthly income, valid for a 6-month period, paid directly to companies.

#3. SMEs offered: (1) expanded credit lines/D&A recovery; (2) easing of red-tape

The proposal includes cutting the first tax rate for SMEs from 25% to 10%, postponing VAT payments, the instant depreciation and amortization and support for access to working capital and/or funding via 5 state lifelines (Fogape-Covid, Fogain, PAR, Crece, and Reactivate). Facilitation is a key aim, with consolidation of data into a single portal handling of all SME projects under one office to untangle regulatory bottlenecks.

8 8

Source: BTG Pactual Equities Research

Macroeconomic environment

The COVID19 crisis has impacted the economy, but less than our regional peers

GDP growth				Trade balance (US$bn)
Annual growth %	%
							10.0	8,5-10
3.9			5.5/6.0
			4.6	4.2
			1.1

-5.5/-5.0

Inflation		Monetary Policy Rate
Annual change in UF inflation, %		%, eof

2.9				2.75
2.7		2.4
		1.75
		2.0
				0.50	0.50
					9	9

Source: Banco Central de Chile and Santander Chile estimates

AGENDA

COVID19: REGULATORY AND MACRO UPDATE

SAN CHILE: BALANCE SHEET AND RESULTS

SAN CHILE: STRATEGIC INITIATIVES UPDATE

10 10

Balance sheet & results

Santander Chile is the nation's leading bank

Figures in US$
Business and Results	6M20(US$)	YoY1
Gross Loans	43.0 bn	13.5%
Deposits	32.3 bn	20.5%
Equity	4.4 bn	10.0%
Attributable profit to parent (LTM)	590 mm	-16.9%
Network and Customers	6M20	Market Share
Clients	3.5 mn	22.0%3
Digital Clients	1.3mn	34.4%4
Offices	367	18.9%
Market Share2	6M20	Rank
Loans4	18.6%	1
Deposits4	18.5%	1
Checking accounts2	22.0%	1
Bank credit cards5	22.9%	1

1. Variations with constant euros 2.Market share of clients with checking accounts, as of May 2020. Source: CMF 3. Average yearly market share over clients that enter a website with a passkey. Excludes Banco Estado. Source: CMF. YTD avg as of May 2020. 4. Excludes loans and deposits of Chilean banks held abroad as of June 2020. 5. Market share in terms of monetary amount of credit card purchases, as of May 2020.

11 11

Balance sheet & results

Non-interest bearing demand deposits up 39.3% YoY

Total Deposits

Ch$bn
+20.5%	Ch$ bnS	6M20 YoY	QoQ

					+5.1%			Demand deposits	12,411 39.3%	12.3%
					Time deposits	14,145	7.8%	(0.5%)
						26,556
22,032	22,868	23,490	25,258		Total Deposits	26,556	20.5%	5.1%
							Mutual funds1	7,788	24.3%	11.6%
										Loans/Deposits2	94%
										LCR3	198%
										NSFR4	105%
Jun-19Sep-19	Dec-19Mar-20	Jun-20

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 calculated following the new local Chilean models 4. Internal methodology and not the local Chilean regulator's guidelines still under discussion.

12 12

Balance sheet & results

Improved funding mix & outpacing competitors

CLP Time Deposit Cost Evolution1

3.2%

2.9%

2.8%

2.50%

		Demand deposits by segment
		Ch$ bn	6M20	YoY	QoQ
	Individuals	4,122	32.9%	7.6%
	SMEs	2,353	53.6%	31.8%
	Retail	6,476	39.7%	15.3%
	Middle Market	3,543	32.8%	12.5%
1.4%	Corporate (SCIB)	2,048	51.0%	0.4%
1.3%
0.9% Total2	12,411	39.3%	12.3%
0.50%

SantanderChile

BCI	Central Bank Rate

13 13

1. Source: CMF. Quarterly Calculation is based on time deposit in CLP average and interest paid on time deposits in pesos. 2. Includes non-segmented deposits

Balance sheet & results

Loan growth driven by Corporate and FOGAPE guaranteed lines

Total Loans

Ch$ bn

6M20 YoY QoQ

Ch$bn									Individuals1	19,018	8.1%	(1.3%)
	+13.5%
				+2.7%			Consumer	5,068	1.6%	(7.0%)
							Mortgages	11,931	11.9%	2.3%
31,095	31,905	32,732	34,355	35,281
	SMEs	4,698	19.9%	13.8%
										Retail	23,717	10.3%	1.4%
										Middle Market	9,120	15.8%	3.8%
										Corporate (SCIB)	2,273	45.4%	4.6%
Jun-19	Sep-19	Dec-19Mar-20	Jun-20		Total2	35,288	13.5%	2.7%

14 14

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

Balance sheet & results

Covid-19 Bank measures: Reprogramming and FOGAPE loans

Reprogramming and Fogape1	Amount	% of loan book2
Retail	Ch$ 7,455,334 million	43.9% (consumer+mortgage)
	(USD 9.1 billion)
Commercial 2	Ch$ 2,949,601 million	16.1% (commercial)
	(USD 3.6 billion)
Total	Ch$ 10,404,935 million	29.5%
	(USD 12.7 billion)
Fogape Loans	Amount	% of commercial loan book
Total	Ch$ 1,484,533 million	8.1%
	(USD 1.8 billion)

FOGAPE loans disbursed each month

Ch$bn

932

577

111

May

June

July

Total disbursed up to June:

Ch$1.5 trillion

As of June 2020, 8% of commercial

loan book were FOGAPE loans

15 15

1. Source: CMF with information as of July 3, 2020. 2. % of commercial loan book as of June 30, 2020

Balance sheet & results

Healthy capital ratios

Core capital			BIS Ratio
	Core capital	Estimate of effect of lower
									14.5%
	weighting of Fogape loans				14.6%
			12.9%
		10.3%		12.7%
							4.2%
				2.7%				4.6%
					2.4%

10.1%			10.0%
9.7%		10.1%	9.7%	10.0%		10.3%

Dec-19	Mar	Jun-20	Dec-19	Mar-20	Jun-20Jun-20 adj.
					Tier 1		Tier 2

In July the CMF published new treatment for FOGAPE loan guarantees. Instead of computing as Tier II capital, it will now be included in the calculation of RWA with the risk weighting lowered from 100% to 10%

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Balance sheet & results

Lower NIMs due to growth in low risk assets. NII up 10.9% YTD

NIM1 & Inflation

4.9%	6.50%

	4.4%	4.0%	4.2%	4.2%
			3.8%	5.50%
3.9%
					4.50%
2.9%	2.50%				3.50%
	2.00%	1.75%
				2.50%
1.9%
				1.0%	1.50%
0.9%				0.50%

1.2%	0.9%		0.50%
0.5%		0.50%	0.3%

-0.1%				-0.50%
2Q19	3Q19	4Q19	1Q20	2Q20

NIM (1) MPR (2) UF

Net interest income

Ch$ bn	6M20	YoY	QoQ
Net interest income	769	10.9%	(2.0%)
Average interest-earning	38,720	15.5%	8.9%
assets
Average loans	34,149	11.0%	3.6%
Interest earning asset	6.0%	-83bp	-184bp
yield3
Cost of funds4	1.97%	-75bp	-141bp
NIM YTD	4.0%	-16bp

This has been partially offset by a better funding mix

17 17

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, including non-interest bearing demand deposits.

Balance sheet & results

Coverage rising to record levels

Total loans: NPLs, coverage and cost of risk

Feb 2010 Earthquake in

Maule Chile- 8.8Mw

and destructive Tsunami

118%

Economic Crisis

US and Europe

71%

2.7%	2.8%
	2.4%
2.4%

			July 2019: Standard
			provisioning model	168%
			148%	for SMEs (B1)
2014: Changes to
provisioning
models: Consumer		2016: Standard
and Commercial
	provisioning model
87%					Covid-19
			for mortgages (B1).			Beginning of
			Higher provisioning
			for LTV > 90%
				Oct. 2019: Start
3.1%	Sept 2015:Earthquake in	of social unrest
	Coquimbo, Chile - 8.3Mw
2.6%		2.4%	2.2%		1.9%	2.5%

1.8%

Caso La Polar1.3% Borronazo DICOM

NPL (1)		Cost of Risk (3)	System Cost of Risk (4)		Coverage (2)

18 18

1. Loans with 90 days or more overdue. 2. Stock of provisions divided by NPLs. 3. Quarterly cost of risk = quarterly provision expense/ quarterly average loans. 4. Quarterly cost of risk for the banking system. For May the cost of risk is the monthly provision expense for April and May annualized/ average loans of these months. Source: CMF

Balance sheet & results

Asset quality deterioration lower than expected…

Total loans

% of loans

138%			168%
5.8%			5.36%
3.8%
1.9%			2.0% 1.8%
	Jun-19Sep-19Dec-19	Mar-20Jun-20Jul-20
			NPL(1)			0-90 days overdue
			Impaired (2)			Coverage ratio (3)

Consumer loans

% of loans

408%

323%

5.8%			5.9%
5.3%			3.9%
1.6%			1.6%
	Jun-19Sep-19Dec-19	Mar-20Jun-20Jul-20
			NPL(1)			0-90 days overdue
			Impaired (2)			Coverage ratio (3)

Commercial loans

% of loans

													167%
126%
6.8%										6.4%
2.5%
		2.4%										2.2%
									1.7%
		Jun-19Sep-19Dec-19	Mar-20		Jun-20	Jul-20
						NPL(1)						0-90 days overdue
						Impaired (2)						Coverage ratio (3)
		Mortgage loans
		% of loans
50%										52%
4.6%
4.6%											3.6%
1.2%									1.8% 1.4%
		Jun-19Sep-19Dec-19	Mar-20	Jun-20	Jul-20
					NPL(1)					0-90days overdue
					Impaired (2)					Coverage ratio (3)

19 19

1. 90 days or more NPLs. 2. NPLs + restructured loans. 3. Loan loss reserves over NPLs, includes provisions due to new provisioning model for commercial loans analyzed on a group basis for Ch$ 31 billion in 3Q19 and additional provisions of Ch$ 16 billion in 4Q19 for the consumer loan book and Ch$30 billion in 2Q20: Ch$10billion allocated to mortgage, consumer and commercial

Balance sheet & results

…especially in consumer loans

Consumer NPLs1

Consumer Impaired Loans2

Base Jun 2019=100

129

Base Jun 2019=100

135

126

130

121

105

112

99

Jun-19Jul-19Aug-19Sep-19Oct-19Nov-19

Dec-19Jan-20

Feb-20

Mar-20

Apr-20

May-20

Jun-20

Jul-20

Jun-19Jul-19Aug-19Sep-19Oct-19Nov-19

Dec-19Jan-20

Feb-20Mar-20Apr-20

May-20

Jun-20

Jul-20

Santander

Chile

BCI

System

Santander

Chile

BCI

System

Consumer Cost of risk3

Consumer loans reprogrammed4

40.7%

11.6%

7.5%

17.9%

4.8%

11.9%

6.6%

Jun-19

Aug-19

Sep-19Oct-19Nov-19

Dec-19

Jan-20Feb-20

Mar-20

Apr-20

May-20

Jun-20

3.3%

Jul-19

Jul-20

Santander

Chile

BCI

System

Santander

Chile

BCI

System

20

20

1. 90 days or more NPLs of consumer loans over total consumer loan book.2.Impaired consumer loans over total consumer loan book 3. Consumer cost of risk = annualized quarterly consumer provision expense/ quarterly average loans. Includes additional provisions 4. According to the CMF as of June 2020.

Balance sheet & results

Cost of risk reaches 2.2%, including Ch$30bn in additional provisions

Quarterly cost of risk1		Provision for loan losses
%

2.2%

		1.9%		Ch$ bn	6M20	YoY	QoQ
	1.5%
			Gross provisions	(329.8)	69.8%	63.9%
1.0% 1.0% 1.0%		1.2%		and write-offs
			Recoveries	35.9	(13.8%)	(37.6%)
				Provisions	(293.9)	92.6%	85.7%
				Cost of risk(YTD)1	1.72%

4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

Cost of risk

In July ´20, an additional voluntary provision of Ch$30 bn will be recognized

to bolster coverage and to reduce cost of risk pressure for 2021

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1. Quarterly provision expense annualized divided by average interest earning assets.

Balance sheet & results

Non-NII increases 43.4% QoQ

Fees & financial transaction

Ch$bn

									43.4%
117.0	136.4	131.1						139.5
						97.3
38.8	49.0	64.7	54.4	22.8	77.2
70.7	68.0	71.7	76.7	74.4	62.3
1Q19		2Q19	3Q19	4Q19			1Q20	2Q20
		Net fee income			Financial trx

Realized gains from AFS portfolio helps to offset reduction of NIMs due to lower inflation

Fees

		Ch$ bn	6M20	YoY	QoQ
	Retail	107.9	(3.9%)	(15.0%)
	Middle Market	19.7	1.3%	(16.0%)
	Corporate	12.5	(12.6%)	(5.9%)
	Subtotal	140.1	(4.0%)	(14.3%)
	Others	(3.4)	(53.2%)	124.3%
	Total	136.7	(1.4%)	(16.3%)
Financial transactions, net
		Ch$ bn	6M20	YoY	QoQ
		Client	75.9	111.2%	49.8%
		Non-Client	24.1	84.8%	--%
		Total	100.1	57.5%	238.0%

22 22

Balance sheet & results

Cost growth under control

Operating expenses

	Ch$bn
300
250						+1.7%
200	192	189	189	191	194
150
	40.3%	39.3%		40.6%
100		38.3%			38.9%

50

0

2Q19

3Q19

4Q19

1Q20

2Q20

	Ch$ bn	6M20	YoY	QoQ
60.0%
	Personnel	202.6	1.6%	2.9%
	expenses
55.0%
	Administrative	127.8	5.9%	0.9%
	expenses
50.0%
	Depreciation	55.3	6.9%	(0.6%)
45.0%
	Operational	385.7	3.8%	1.7%
	expenses1
40.0%
	Efficiency	39.7%	-165bp	-174bp
	ratio2
35.0%	1.4%	-48.7bp	-12bp
	Costs/assets
30.0%

Expenses Efficiency

23 23

1. Operational expenses exclude impairment and other operating expenses. 2. Efficiency ratio: operating expenses excluding impairment / financial margin + fees+ financial transactions and net other operating income

Balance sheet & results

Strong improvements in productivity and efficiency

Volumes1 per point of sale

Ch$ billion

+20.5%

139,808 143,762 149,130 161,992 168,494

06M19

09M19

12M19

03M20

06M20

Cost to Assets

-56bp

1.9% 1.7% 1.5% 1.4% 1.3%

06M19

09M19

12M19

03M20

06M20

1. Volumes = Loans + Deposits

Volumes1 per employee

Ch$ billion

+17.9%

5,381 5,602

4,749 4,963 5,020

06M19

09M19

12M19

03M20

06M20

Efficiency

-44bp

40.3%

39.3%

38.3%

40.6%

38.9%

06M19 09M19 12M19 03M20 06M20

24 24

AGENDA

COVID19: REGULATORY AND MACRO UPDATE

SAN CHILE: BALANCE SHEET AND RESULTS

SAN CHILE: STRATEGIC INITIATIVES UPDATE

25 25

Strategic initiatives

Moving forward in our innovations

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, creating synergies with other bank products

Reactivate loan growth within

mass segment

Continue expanding cross-selling

with our clients with better

products

Digitalization of onboarding and

loans

Branch format in digital / socially-distanced world

Approach

Acquiring

SME

WorkCafé

2.0

Progress

More than 70,000 clients, with official launch in April 2020

First operation in Dec. 2019. Full operations begin 2H20

Transaction complete. Acquired in November 2019

Over 215,000 clients. Already profitable

Launch of the first Insurtech company in Chile in April 2020

Obtain loan without going to a branch

Building on our Workcafé 2.0 pilot branches to design the future of our network

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.

26 26

Balance sheet & results

Strength of digital channels has kept the bank moving forward

Open for business Branches

Supported by digital	Digital clients
banking

~90% open 9am - 2pm

Tele-working

~75% are able to work from home

~95% of central services are working from home

N° of transactions

Online: +11.1% QoQ

+20.7%

N° of digital clients

YoY

	+20.7%
				1,339,361
1,109,476
Jun-19	Sep-19	Dec-19	Mar-20	Jun-20

Market share of digital clients1

32%	34%
		24%	21%	16% 15%
					7%	6%	4%	3%
Santander	BCI		Chile	Scotiabank	Itau
				mar-19	mar-20

27 27

1. Source: CMF as of last available information. Last 12 months yearly average. Based on clients who access there account with a password. Excludes Banco Estado.

Balance sheet & results

75% market share in new account openings / Strong NPS scores

Current account openings 5M201	21%

0.9	74.8%	Market share of current accounts	Share of new accounts

Market share of

0.7
0.5					23.3%	27.6%
0.3	20.1%	13.7%
	13.7%	9.3%	7.1%	7.1%
0.1	22.0%
-0.1	12.5%	-20.1%		-20.2%
		-2.8%
-0.3
-0.5

current accounts1

75%

Market share of current account openings1

Net Promoter Score (NPS)2

NPS: Top 2 score

N°1

App NPS 74

Life NPS 71

among peers (score of 38)

for innovation,	Highlighting user	Our happiest clients
commitment and product	friendliness
benefits

28 28

1. Source: CMF, with latest available information 2. Source: Study by Activa for Santander with a scope of 60,000 surveys to our own clients and over 1,200 surveys to each competitor's clients in

the six month period ended March 31, 2020 and December 31, 2019. Measures the Net Global Satisfaction and Net Promoter Score in three main aspects: service quality, product quality, and brand image. % of clients that value with grade 6 and 7 subtracted by clients that value with grade 1 through 4. Audited by an external provider.

Strategic initiatives

Super Digital: Rapid growth post official launch

• Officially launched in April 2020
• Strategic alliances with companies for direct debit
• Great option for unbanked group who needs a cheap digital account
• Target market: 4.5 million people with income < Ch$ 400 thousand (US$7 thousand a year)

People can receive government

benefits through this account

New Superdigital clients each year

		~110,400*
147	18,301	64,386

2018 2019 2020

+80,000

Total SD clients

~200,000 by year-end

All accounts are free of charge

during 2020

*Estimate of new Superdigital accounts if the same average rate of openings from Jan-Jul 2020 is maintained for the rest of the year. CAGR= Compound Annual Growth Rate

Strategic initiatives

Santander Life: record clients growth in July & August with best-in-class NPS

Launched	Launched	Launched
June 2019	June 2019
November 2017
+10,000 clients	+116,000 clients
+89,000 clients

~170,000*

			104,885
				97,275	NPS
		32,567		71
New Life
481
clients
per year	2017	2018	2019	2020

Over 75% of clients captured digitally

As of July 2020. *Estimate of new Life accounts if the same average rate of openings from Jan-Jul 2020 is maintained for the rest of the year. CAGR= Compound Annual Growth Rate

Strategic initiatives

Santander Life is already profitable

vs.	Evolution of total gross revenues1:

Client acquisition:	US$150	US$15
Digital onboarding:	0%	75%
Branches:	100	0

1H20: Ch$18 bn

2019: Ch$20 bn

2018: Ch$7 bn

And a better risk profile

The road ahead

1. Upgrading all debit card clients to full current account
2. Access to Santander Pass opens more online payment capabilities
3. New products will be launched soon providing new cross-selling opportunities
4. Merits Program: Inclusion of more non-credit opportunities (savings)
5. Remote attention model based on robotics and AI

1. Net interest income plus fess

Strategic initiatives

Fewer clicks to create an account

The fewer the

better

You lose 10% of

potential clients at

every step

24

38

40

45

47

69

74 81

84 85

92 99

32 32

Source: Grupo Santander

Strategic initiatives

Online channels driving insurance sales

Our collaboration with the first insurtech in Chile selling life insurance

Launched in April 2020, this is an online platform that compared life insurance between different providers in a quick and transparent way.

Equivalent to

40%

of the bank's sales through traditional channels in June

NPS

96

Coming

up

Alliances with savings options and other services

33 33

Strategic initiatives

New branch model already successfully piloted

• In light of the success of the Workcafé branch model, we developed the Workcafé 2.0 which we began piloting in 2019.
• Its digital format fits perfectly for the post COVID-19 world
• No tellers
• No vaults
• More efficient and productive
• Significantly more advanced digital and AI capabilities.
• Implementation process accelerated

Commercial : backoffice personnel

Traditional branch1

	vs.	Traditional
		branch1
Gross revenues	+32%	+2%
Stock clients	+16%	-1%
New clients	+16%	+3%

34 34

1. Variations compare 6M20 vs. 6M19

Conclusions

2Q20 results reflect our strong core banking franchise

• The Central Bank and CMF have launched a series of initiatives that will help to maintain liquidity and capital levels.
• Government measures will also help to mitigate financial impact on the population
• Strong deposit growth in the quarter. High liquidity levels.
• Loan growth centered on less risky assets
• Capital ratios are healthy, which will improve as FOGAPE guarantees will be risk weighted 10% (in line with BIS III)
• Coverage levels reach record high levels
• Strong growth of gross income in the quarter, reflecting our defensive business model and balance sheet
• Accelerating implementation of strategic initiatives. Client growth has remained high due to strength of digital channels. New branch model project underway
• Solid efficiency levels in the quarter

35 35

Annexes

36

Annexes

Unaudited Balance Sheet	Jun-20	Jun-20	Jun-19	Jun-20/Jun-19
	US$ Ths1	Ch$ Million	% Chg.
Cash and deposits in banks	4,597,173	3,776,118	1,939,644	94.7%
Cash items in process of collection	456,827	375,238	511,987	(26.7%)
Trading investments	253,515	208,237	163,178	27.6%
Investments under resale agreements	-	-	-	--%
Financial derivative contracts	16,433,145	13,498,185	4,195,904	221.7%
Interbank loans, net	10,612	8,717	8,606	1.3%
Loans and account receivables from customers, net	41,758,774	34,300,657	30,289,001	13.2%
Available for sale investments	6,445,327	5,294,192	2,898,227	82.7%
Held-to-maturity investments	-	-	-	--%
Investments in associates and other companies	12,189	10,012	9,879	1.3%
Intangible assets	86,490	71,043	63,371	12.1%
Property, plant and equipment	230,788	189,569	198,131	(4.3%)
Right of use assets	244,570	200,890	196,041	2.5%
Current taxes	-	-	-	--%
Deferred taxes	628,964	516,631	391,566	31.9%
Other assets	3,137,636	2,577,254	1,166,416	121.0%
Total Assets	74,296,010	61,026,743	42,031,951	45.2%
Deposits and other demand liabilities	15,109,598	12,411,024	8,909,594	39.3%
Cash items in process of being cleared	346,798	284,860	392,441	(27.4%)
Obligations under repurchase agreements	244,522	200,850	133,690	50.2%
Time deposits and other time liabilities	17,221,063	14,145,381	13,122,503	7.8%
Financial derivatives contracts	15,948,708	13,100,269	3,829,988	242.0%
Interbank borrowings	6,639,255	5,453,484	1,835,305	197.1%
Issued debt instruments	11,495,256	9,442,203	8,935,664	5.7%
Other financial liabilities	160,779	132,064	209,927	(37.1%)
Leasing contract obligations	182,594	149,983	151,562	(1.0%)
Current taxes	68,534	56,294	4,674	1104.4%
Deferred taxes	129,526	106,393	39,265	171.0%
Provisions	322,257	264,702	212,022	24.8%
Other liabilities	1,928,924	1,584,418	923,870	71.5%
Total Liabilities	69,797,815	57,331,925	38,700,505	48.1%
Equity
Capital	1,085,102	891,303	891,303	0.0%
Reserves	2,851,213	2,341,986	2,159,783	8.4%
Valuation adjustments	66,588	54,695	26,108	109.5%
Retained Earnings:
Retained earnings from prior years	201,641	165,628	-	--%
Income for the period	278,638	228,873	296,662	(22.9%)
Minus: Provision for mandatory dividends	(83,591)	(68,662)	(88,999)	(22.9%)
Total Shareholders' Equity	4,399,590	3,613,823	3,284,857	10.0%
Non-controlling interest	98,606	80,995	46,589	73.9%
Total Equity	4,498,196	3,694,818	3,331,446	10.9%	37
Total Liabilities and Equity	74,296,010	61,026,743	42,031,951	45.2%
1. The exchange rate used to calculate the figures in dollars was Ch$821.40 / US$1

Annexes

	Jun-20	Jun-20	Jun-19	Jun-20/Jun-19
	US$ Ths1	Ch$ Million	% Chg.
Interest income	1,403,886	1,153,152	1,136,862	1.4%
Interest expense	(468,115)	(384,510)	(443,786)	(13.4%)
Net interest income	935,771	768,642	693,076	10.9%
Fee and commission income	276,317	226,967	244,727	(7.3%)
Fee and commission expense	(109,937)	(90,302)	(106,078)	(14.9%)
Net fee and commission income	166,381	136,665	138,649	(1.4%)
Net income (expense) from financial operations	263,052	216,071	22,911	843.1%
Net foreign exchange gain	(141,224)	(116,001)	64,950	(278.6%)
Total financial transactions, net	121,829	100,070	87,861	13.9%
Other operating income	14,535	11,939	9,947	20.0%
Net operating profit before provisions for loan losses	1,238,515	1,017,316	929,533	9.4%
Provision for loan losses	(357,844)	(293,933)	(152,622)	92.6%
Net operating profit	880,671	723,383	776,911	(6.9%)
Personnel salaries and expenses	(246,630)	(202,582)	(199,308)	1.6%
Administrative expenses	(155,593)	(127,804)	(120,665)	5.9%
Depreciation and amortization	(67,288)	(55,270)	(51,679)	6.9%
Op. expenses excl. Impairment and Other operating expenses	(469,511)	(385,656)	(371,652)	3.8%
Impairment of property, plant and equipment	(777)	(638)	-	--%
Other operating expenses	(55,951)	(45,958)	(30,831)	49.1%
Total operating expenses	(526,238)	(432,252)	(402,483)	7.4%
Operating income	354,433	291,131	374,428	(22.2%)
Income from investments in associates and other companies	726	596	543	9.8%
Income before tax	355,158	291,727	374,971	(22.2%)
Income tax expense	(74,659)	(61,325)	(79,440)	(22.8%)
Net income from ordinary activities	280,499	230,402	295,531	(22.0%)
Net income discontinued operations2	-	-	1,699	(100.0%)
Net consolidated income	280,499	230,402	297,230	(22.5%)
Net income attributable to:
Non-controlling interest	1,861	1,529	568	169.2%
Net income attributable to equity holders of the Bank	278,638	228,873	296,662	(22.9%)

1.	The exchange rate used to calculate the figures in dollars was Ch$821.40/ US$1	38

Annexes

	2Q20	2Q20	1Q20	2Q19	2Q20/2Q19	2Q20/1Q20
	US$ Ths1		Ch$ Million		% Chg.
Interest income	624,200	512,718	640,434	676,111	(24.2%)	(19.9%)
Interest expense	(161,158)	(132,375)	(252,135)	(305,736)	(56.7%)	(47.5%)
Net interest income	463,042	380,343	388,299	370,375	2.7%	(2.0%)
Fee and commission income	123,347	101,317	125,650	123,361	(17.9%)	(19.4%)
Fee and commission expense	(47,549)	(39,057)	(51,245)	(55,387)	(29.5%)	(23.8%)
Net fee and commission income	75,797	62,260	74,405	67,974	(8.4%)	(16.3%)
Net income (expense) from financial	73,505	60,377	155,694	191,421	(68.5%)	(61.2%)
operations
Net foreign exchange gain	20,509	16,846	(132,847)	(142,405)	(111.8%)	(112.7%)
Total financial transactions, net	94,014	77,223	22,847	49,016	57.5%	238.0%
Other operating income	6,730	5,528	6,411	4,791	15.4%	(13.8%)
Net operating profit before provisions for	639,584	525,354	491,962	492,156	6.7%	6.8%
loan losses
Provision for loan losses	(232,607)	(191,063)	(102,870)	(76,348)	150.3%	85.7%
Net operating profit	406,977	334,291	389,092	415,808	(19.6%)	(14.1%)
Personnel salaries and expenses	(125,089)	(102,748)	(99,834)	(104,751)	(1.9%)	2.9%
Administrative expenses	(78,135)	(64,180)	(63,624)	(61,329)	4.6%	0.9%
Depreciation and amortization	(33,548)	(27,556)	(27,714)	(25,516)	8.0%	(0.6%)
Op. expenses excl. Impairment and Other	(236,771)	(194,484)	(191,172)	(191,596)	1.5%	1.7%
operating expenses
Impairment of property, plant and equipment	-	-	(638)	-	--%	(100.0%)
Other operating expenses	(30,315)	(24,901)	(21,057)	(16,666)	49.4%	18.3%
Total operating expenses	(267,087)	(219,385)	(212,867)	(208,262)	5.3%	3.1%
Operating income	139,890	114,906	176,225	207,546	(44.6%)	(34.8%)
Income from investments in associates and	558	458	138	257	78.2%	231.9%
other companies
Income before tax	140,448	115,364	176,363	207,803	(44.5%)	(34.6%)
Income tax expense	(36,252)	(29,777)	(31,548)	(37,294)	(20.2%)	(5.6%)
Net income from ordinary activities	104,196	85,587	144,815	170,509	(49.8%)	(40.9%)
Net income discontinued operations2	-	-	-	1,699	(100.0%)	--%
Net consolidated income	104,196	85,587	144,815	172,208	(50.3%)	(40.9%)
Net income attributable to:
Non-controlling interest	886	728	801	339	114.7%	(9.1%)
Net income attributable to equity holders of	103,310	84,859	144,014	171,232	(50.4%)	(41.1%)
the Bank

1.

The exchange rate used to calculate the figures in dollars was Ch$ 821.40/ US$1

39

Annexes: Key Indicators

Profitability and efficiency	06M20	06M19	Change bp
Net interest margin (NIM) 1	4.0%	4.1%	(16)
Efficiency ratio2	39.7%	41.4%	(165)
Return on avg. equity	13.0%	18.2%	(518)
Return on avg. assets	0.8%	1.5%	(67)
Core Capital ratio	10.0%	10.4%	(45)
BIS ratio	14.6%	13.1%	144
Return on RWA	1.3%	1.9%	(61)

Asset quality ratios (%)	Jun-20	Jun-19	Change bp
NPL ratio3	1.9%	1.9%	2
Coverage of NPLs ratio 4	147.2%	137.6%	963
Cost of credit5	1.7%	1.0%	73

Structure (#)	Jun-20	Jun-19	Change (%)
Branches	367	380	(3.4%)
ATMs	1,104	1,037	6.5%
Employees	11,039	11,186	(1.3%)

Market capitalization (YTD)	Jun-20	Jun-19	Change (%)
Net income per share (Ch$)	1.21	1.57	(22.9%)
Net income per ADR (US$)	0.59	0.93	(36.3%)
Stock price (Ch$/per share)	33.6	50.5	(33.5%)
ADR price (US$ per share)	16.4	29.92	(45.2%)
Market capitalization (US$mn)	8,386	14,119	(40.6%)
Shares outstanding (millions)	188,446.1	188,446.1	--%
ADRs (1 ADR = 400 shares) (millions)	471.1	471.1	--%

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.

40

Thank you.

Our purpose is to help people and business prosper.

Our culture is based on believing that everything we do should be: