Banco Santander-Chile
Having quickly and efficiently completed one of the biggest bank mergers in Chilean – and South American – history last year, Banco Santander-Chile was the judges’ clear choice as the winner.
In their tie-up, Banco Santiago and Banco Santander’s Chilean unit disproved the notion that bank mergers of this scale are always difficult and time consuming. The merger was completed in an astonishing eight months, enabling the new bank to reduce its costs by 7% in the fourth quarter of 2002. Total annual savings from the merger are reckoned to be a hefty $40m.
With two million customers and a network of 347 branches in Chile, the new entity is the undisputed leader in the domestic market and one of the six largest banks on the continent. As a testament to its exceptional profitability, Banco Santander-Chile managed to raise net profit 70.8% in 2002 despite a $90m charge associated with the merger. Moreover, its ROE of 19.5% was double the average for Chilean banks.
Compared with other leading South American institutions, Banco Santander-Chile has the best credit ratings (an A from S&P and Fitch; Baa1 from Moody’s) and is the most efficient judging by its cost-to-income ratio of 41.1% excluding merger costs.
