Banco Santander-Chile Stock: High Quality Bank, But Stalled Profitability And Overvalued

Thesis

Chile is the most mature and developed economy in LATAM. However, its equity market is among the cheapest in the world, measured with PE multiple. The chart below compares the EM equity market by P/E.

Asset ratios: assets structure

Cash/Total Assets

3.3 %

Loans (total)/Total Assets

57 %

Consumer Loans/Total Assets

7.3 %

Mortgage Loans /Total Assets

23 %

Commercial Loans/ Total Assets

24 %

Bonds/Total Assets

33 %

Liability ratios: capital structure

Deposits/ Total Liabilities

43 %

Interbank borrowings/ Total Liabilities

13 %

Company bonds/ Total Liabilities

10 %

Other financial instruments/Total Liabilities

3.5 %

Equity/ Total Liabilities + Equity

5.7 %

Solvency ratios:

Loans /Deposits

135 %

Cash/Deposits

11.2 %

Borrowings (inc. bonds)/ Total Assets

23 %

Capital (in billions of US dollars):

Regulatory Capital

6.4

Tier 1 capital

4.9

Common equity tier 1 (CET1)

4.0

Risk-Weighted Assets

38.3

Basel III Ratios:

Regulatory capital ratio (Capital adequacy ratio)

16.9 %

Tier 1 ratio

12.9 %

CET1 ratio

10.5 %

LCR

182 %

NSFR

113 %

ROE

13.7 %

RoTE

13.8 %

RoCET 1

16.9 %

ROA

0.78 %

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