The main private banks in the country -Santander, Banco de Chile, Bci, Scotiabank and Itaú- published their preliminary results at the end of September and some players are happy with their accounts despite the economic scenario of lower growth and inflation.
Banco de Chile captured all eyes of the market by being the leader in the generation of profits among private banks. The entity of the Luksic and Citi group reported that during September it earned US$119 million, that is, 65% more than in 2021.
During the month of September, Banco de Chile earned US$119 million, 65% more than on the same date in 2021.
In what was the third quarter, it obtained profits of US$ 351.5 million, recording an increase of 84.3% compared to the same period last year. Likewise, it accumulates profits of US$ 1,100 million in the first nine months of the year, doubling the result of 2021.
Despite these good results, the bank has taken precautions by taking additional provisions of US$150 million, almost 4% more than in 2021.
The banking analyst at DVA Capital, Constanza Martínez, points out that the main factor driving Banco de Chile’s profits is inflation. This is due to the fact that part of its assets are in UF and the rise in prices has a positive impact on its balance sheet.
The BICE Inversiones analyst, Ewald Stark, affirms that the bank “presents the greatest difference between assets and liabilities indexed to the UF as a proportion of productive assets. The foregoing, added to the fact that this year inflation has been historically high, explain in part the expansion in profits higher than that of its competition.”
Stark adds another factor that boosts profit, which is its lower duration mismatch between assets and liabilities: “It helps that it can adjust its loan portfolio more quickly than its competition, in an environment in which the Central Bank raises the monetary policy rate . It makes it easier for the bank to maintain or expand its net interest margin”.
At the product level, Martínez details that the FAN Account has helped “the bank’s numbers at the liability level, increasing its exposure to short-term deposits.” He highlights that this digital sight account already has more than 926 thousand open accounts, which has favored the bank to enhance its presence in the consumer segment.
At the stock level, at Credicorp Capital they are betting on Banco de Chile papers since “it is the best asset to invest in the current cycle despite its more adjusted valuations than its peers.”
Despite the good outlook, Martínez and Stark believe that Banco de Chile’s current profit levels are not sustainable over time because inflation is expected to lose momentum and move closer to the Central Bank’s target range. In addition, “as the governing body lowers its rates, Banco de Chile will be the first player to be affected by the new lower rate level,” Stark said.
the industry numbers
The rest of the banking sector had mixed results in September. Santander earned US$55.3 million, registering a 10.1% drop compared to 2021. During the quarter it obtained profits of US$192.1 million, growing 5.4% compared to last year. The bank accumulates a year-on-year increase of 30.1%, with profits of US$ 731.7 million.
The head of equities at Inversiones Security, Nicolás Libuy, affirms that Santander “has seen more contained growth in interest margins as a result of greater exposure to increases in the short part of the yield curves, which we hope will allow greater margin protection going forward.”
Bci had profits of US$63.4 million in September, 74.7% more than in 2021. On a quarterly basis, it managed to increase profits by 60.3%, reaching US$196.1 in profits. The firm controlled by the Yarur family has accumulated earnings of US$652.4 million between January and September, marking a 12-month jump of 61.6%.
Scotiabank reported monthly earnings of US$51.8 million. This figure is 34.5% more than what was reported a year ago. The Canadian bank ended the third quarter with profits of US$132.5 million, 18% higher than 2021. As of September, it had profits of US$394.9 million, an increase of 16.6% year-on-year.
Itaú earned US$41.5 million in September. This figure is 131.8% higher than what he earned last year. The Brazilian bank ended the period between July and September with a profit growth of 110.8%, reaching US$ 117 million. In the first nine months of the year, the bank has profits of US$366.9 million, a 12-month increase of 67.5%.
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