Banco Santander-Chile (NYSE:BSAC) Q3 2022 Earnings Conference Call October 28, 2022 10:00 AM ET

Company Participants

Emiliano Muratore - CFO

Claudio Soto - Chief Economist

Robert Moreno - Managing Director and Head of IR

Conference Call Participants

Tito Labarta - Goldman Sachs

Alonso Garcia - Credit Suisse

Daniel Mora - Credicorp Capital

Ernesto Gabilondo - Bank of America

Jason Mollin - Scotiabank

Operator

Ladies and gentlemen, thank you for standing by, and I would like to welcome you to Banco Santander-Chile 3Q '22 Results Conference Call on the 28th of October 2022. [Operator Instructions] The format of today's call will be a presentation by the management team followed by a question-and-answer session.

So without further ado, I would now like to pass the line to Mr. Emiliano Muratore, the CFO of Banco Santander-Chile. Please go ahead, sir.

Emiliano Muratore

Good morning, everyone. Welcome to Banco Santander-Chile's third quarter 2022 results webcast and conference call. This is Emiliano Muratore, CFO, and I'm joined today by Robert Moreno, Managing Director and Head of Investor Relations; and Claudio Soto our Chief Economist. Thank you for attending today's conference call. The bank has continued to achieve strong results in the third quarter of this year with high ROE and solid financial performance. Our successful digital strategy and customer-oriented product offerings continues to attract new clients, indicating great growth opportunity going forward.

In the quarter, the Central Bank of Chile also continued to tighten monetary policy. We will be giving a more detailed analysis of the impact this will have on our margins. To begin, I invite Claudio Soto to give us an update on the macro scenario beginning on Slide 4.

Claudio Soto

Thank you, Emiliano.

As expected the local economy has been slowing down since the second quarter. Activity grew 0% year-over-year knows and the next monthly print will be negative. Despite that, some sectors have been more resilient than expected. As a result, we have revised our growth estimate for the year up to 2.55%.

Excess liquidity from pension funds withdrawals and cash transfers in 2021 have been draining away in the context of high interest rates. The labor market has weakened with low job creation at the margin. In turn, investment prospects remain subdued. Because of that, domestic demand will suffer a relevant contraction in 2023. In turn, this external sector would be affected by low global growth.

All-in-all, we forecast that GDP will have a contraction close to minus 1.2%. In 2024, we will see a recovery of the economy back to trend. The current account deficit, which has been widening should start shrinking during the following month as domestic demand contracts and terms of trade stop falling.