Banco Santander-Chile (NYSE:BSAC) Q4 2022 Earnings Conference Call February 3, 2022 9:00 AM ET

Company Participants

Emiliano Muratore - CFO

Claudio Soto - Chief Economist

Robert Moreno - Managing Director and Head of IR

Conference Call Participants

Yuri Fernandes - JPMorgan

Carlos Gomez - HSBC

Tito Labarta - Goldman Sachs

Mariel Abreu - T. Rowe Price

Daniel Mora Ardila - Credicorp Capital

Alonso Aramburu - Banco BTG Pactual

Operator

Good morning, and welcome to Banco Santander-Chile's Fourth Quarter 2022 Results Conference Call.

I will now hand over to Mr. Emiliano Muratore to begin the presentation.

Emiliano Muratore

Good morning, everyone. Welcome to Banco Santander-Chile's fourth quarter 2022 results webcast and conference call. This is Emiliano Muratore, CFO, and I'm joined today by Robert Moreno, Head of Investor Relations; [indiscernible], Head of Strategic Planning; and Claudio Soto, Chief Economist.

Thank you for attending today's conference call. Today, we will be discussing the trends and results seen in the fourth quarter and give some insights into our expectations for this year. Our successful digital strategy and customer oriented product offering continues to attract new clients, indicating great growth opportunity going forward.

To begin, I invite Claudio Soto to give us an update on the macro scenario beginning on Slide 4.

Claudio Soto

Thank you, Emiliano. The economy has continued slowing down although at a slower pace than expected. According to the latest figure of the Central Bank, GDP grew 2.7% in 2023, above our previous estimate of 2.25. Consumption has been more resilient than expected and investment has rebounded as postponed projects to resume in second part of last year. Also, a weak peso has helped the external sector of the economy.

Going forward, we forecast the economy will continue slowing down as financial conditions remain tight. While political uncertainty has moderated, it is still relatively high and will continue conditioning investment. On the other hand, the economy will benefit from the reopening of China, which has pushed up copper prices. All in all, we estimate the economy will contract between 1% and 1.5%. In 20 24, we will see a recovery back to its trend.

The labor market remains relatively weak and employment has been oscillating around 8% and total employment is still below its pre-pandemic trend. This year, the impairment rate may increase slightly as the economic moderates. The current account deficit, which was widening until the third quarter of last year, should start shrinking during the following month, as domestic demand contracts and turn off (ph) trade improve.