SANTIAGO, Chile, Feb. 1, 2012 /PRNewswire/ — Banco Santander Chile (NYSE: SAN; SSE: Bsantander) announced today its unaudited results for the fourth quarter and full year 2011. These results are reported on a consolidated basis in accordance with Chilean GAAP in nominal Chilean pesos.
In 2011, Santander Chile’s ROE reached 23.0% with an efficiency ratio of 38.4%
In 2011 (12M11), Net income attributable to shareholders(1) totaled Ch$435,084 million (Ch$2.31 per share and US$4.60/ADR (2) and decreased 8.8% compared to net income achieved in 2010. ROE reached 23.0% in 12M11, among the highest returns in the Chilean financial system. The Efficiency ratio in 12M11 reached 38.4%, one of the best in Chile.
4Q11: Net income up 35.9% QoQ, driven by solid operating trends
In 4Q11, Net income attributable to shareholders totaled Ch$102,121 million (Ch$0.54 per share and US$1.08/ADR). Compared to 3Q11 (from now on QoQ) Net income increased 35.9%. Compared to 4Q10 (from now on YoY) net income increased 8.8%. During the quarter, the Bank saw an important QoQ improvement in margins and profitability. Gross income net of provisions and costs, a good proxy for recurrent earnings growth, increased 27.1% QoQ and 24.6% YoY in 4Q11. ROE in the quarter reached 20.8% compared to 15.8% in 3Q11.
Our outlook for Chile in 2012 continues to be positive, with GDP expected to grow between 3.8 – 4.0% and inflation to be close to 2.8%. Nonetheless, the Bank has been taking actions on 4 main points during the second half of 2011 in order to maintain sustainable levels of high profitability and efficiency in 2012 even if the external situation has a larger impact on this central scenario: (i) selective loan growth and spreads, (ii) prudent risk policies, (iii) high liquidity, and (iv) strong capital.
I. Net interest margin reached 5.3%, increasing 70bp QoQ
The Bank‘s Net interest margin reached 5.3% in 4Q11, increasing 70 basis points compared to the net interest margin reached in 3Q11. Net interest income increased 13.8% QoQ and 13.9% YoY in 4Q11. The higher quarterly Net interest income and NIM was mainly due to higher inflation rates in the quarter, since the Bank has more assets than liabilities linked to inflation. Inflation, measured as the variation of the Unidad de Fomento (an inflation indexed currency unit), increased 1.28% in 4Q11 compared to 0.56% in 3Q11 and 0.54% in 4Q10. Higher loan spreads (excluding the impacts of mismatches in inflation indexed assets and liabilities) also helped to boost the Bank’s NIM in the quarter. Loan spreads in the quarter went up following the stricter pricing policy implemented in 3Q11 by the Bank.
Selective loan growth led by lending to individuals and SMEs
In 4Q11, total loans decreased 1.9% QoQ and increased 10.8% YoY. The Bank has been following a more selective approach to loan growth in recent quarters. In the quarter, the Bank focused on expanding its higher yielding credit card loan portfolio that increased 1.6% QoQ and 15.9% YoY. Lending to SMEs led growth in the loan book and expanded 1.4% QoQ (7.9% YoY), reflecting the Bank’s consistent focus on this expanding segment. Relatively low yielding corporate loans decreased 18.5% QoQ.
II. Lower provision expense in the quarter and a stable evolution of the Bank’s Risk Index
Provision for loan losses in the quarter decreased 4.2% QoQ and 13.8% YoY. For the full year, net provision expense increased 0% compared to a 10.8% rise in loans. In addition, during the quarter, the Bank upgraded its provisioning model for loans to SMEs (See Annex 1). This signified a one-time charge of Ch$16bn in 4Q11. This concluded the process started in 2010 of overhauling our retail banking credit risk models. This should permit the credit risk areas to increase feedback regarding potential growth opportunities to commercial teams and allow the Bank to allocate capital more efficiently among business segments.
The Risk Index, which measures the percentage of loans for which the Bank must set aside loan loss allowances, based on our internal models and Superintendency of Banks guidelines, remained stable at approximately 3% throughout 2011 (3.02% in 4Q11). The Bank’s Non-performing loans ratio (NPL) increased from 2.8% in 3Q10 to 3.0% in 4Q11. This was mainly due to the fall in large corporate loans and higher growth of the Banks’ retail activities. The Coverage ratio of total NPLs (loan loss allowances over non-performing loans) reached 102.4% as of December 2011.
III. Solid growth of core deposits in the quarter
Customer funds (deposits + mutual funds) decreased 2.8% QoQ and increased 10.8% in the year. Core deposits (deposits from non-institutional clients) increased 2.8% QoQ and 29.2% YoY. As of December 2011, core deposits represented 74.6% of our total deposits compared to 67.0% as of December 2010. Our strategy of focusing on liquidity and core deposits in 2011 has resulted in an improved funding mix. The Bank’s loan to deposit ratio (measured as loans minus marketable securities that fund mortgage portfolio over total deposits) improved to 95.4% as of December 2011 compared to 99.8% as December 2010.
IV. Core capital at 11.0% in 4Q11, increasing 80bp QoQ
Shareholders’ equity totaled Ch$2,001,222 million (US$3.8 billion) as of December 2011. The Bank’s BIS ratio reached 14.7% as of December 31, 2011 compared to 13.9% as of September 2011 and 14.5% as of December 2010. The Bank’s core capital ratio reached 11.0% as of December 2011 compared to 10.2% at the end of 3Q11 and 10.6% in December 2010. Voting common shareholders’ equity is the sole component of our Tier I capital.
Institutional Background
As per the latest public records published by the Superintendency of Banks of Chile for December 2011, Banco Santander Chile was the second largest bank in terms of loans and deposits. The Bank has among the highest credit ratings among all Latin American companies, with an A+ rating from Standard and Poor’s and Fitch and Aa3 by Moody’s, which are the same ratings assigned to the Republic of Chile. The stock is traded on the New York Stock Exchange (NYSE: SAN – News) and the Santiago Stock Exchange (SSE: Bsantander). The Bank’s main shareholder is Santander, which controls 67% of Banco Santander Chile.
For more information see www.santander.cl
(1) The results in this report are unaudited and are reported according to Chilean Bank GAAP.
(2) Earnings per ADR was calculated using the Observed Exchange Rate of Ch$521.46 per US$ as of December 31, 2011.
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2012年1月13日星期五
GE ordered to defend lawsuit tied to 2008 crisis
(Reuters) – A federal judge refused on Thursday to throw out a lawsuit accusing General Electric Co and its chief executive of misleading investors about the conglomerate’s financial health and exposure to risky debt during the 2008 financial crisis.
The decision by District Judge Richard Holwell in Manhattan keeps alive litigation seeking to hold the company responsible for investor losses during a six-month period when its stock price fell to about $10 from about $26, causing its market value to tumble by more than $150 billion.
Investors claimed that GE withheld information regarding its health and the health of its GE Capital finance arm, including exposures to subprime and other low-quality loans. They also said GE misleadingly touted itself as being safer than rivals, despite the effects of the financial crisis.
Holwell also let stand some claims accusing bank underwriters of omitting statements from offering documents for a $12.2 billion GE stock offering in October 2008. He dismissed several other claims, and did not rule on the case’s merits.
A GE spokesman and lawyers for the investors did not immediately respond to requests for comment. Antonio Yanez, a lawyer for the banks, declined to comment.
Holwell said investors led by the State Universities Retirement System of Illinois adequately alleged that GE made material misrepresentations during the crisis about its access to commercial paper and ability to maintain its dividend.
He also let the investors pursue claims alleging that company officers, including Chief Executive Jeffrey Immelt and Chief Financial Officer Keith Sherin, misled them and had sufficient intent, known as “scienter,” to mislead.
CATEGORICAL STATEMENTS
“Immelt’s categorical statements that investors could ‘count on’ a dividend and that GE was having ‘no difficulties’ issuing commercial paper are not the sort of cautious statements one would expect of a CEO attempting to come to grips with the effects of the economic crisis on his company,” Holwell wrote in a 53-page decision.
“A CEO is allowed to convince the public to invest in his company, but not at the expense of providing it with accurate information about the company’s financial health,” Holwell continued. “Taking the factual allegations in the (complaint) as true, the inference that Immelt acted with scienter is at least as compelling as the inference that he did not.”
Among the banks that were sued were Bank of America Corp, Citigroup Inc, Deutsche Bank AG Goldman Sachs Group Inc, JPMorgan Chase & Co, and Morgan Stanley, court records show.
The lawsuit covered investors who owned GE stock from September 25, 2008 to March 19, 2009.
During that period the Fairfield, Connecticut-based company cut its dividend and lost its “triple-A” credit rating. It also received a $3 billion infusion from Warren Buffett’s Berkshire Hathaway Inc.
GE’s many products include jet engines, turbines and light bulbs. It also owns part of NBC Universal, in which Comcast Corp holds a majority stake.
The case is In re: General Electric Co Securities Litigation, U.S. District Court, Southern District of New York, No. 09-01951.
(Reporting by Jonathan Stempel in New York; editing by Andre Grenon, Phil Berlowitz)
The decision by District Judge Richard Holwell in Manhattan keeps alive litigation seeking to hold the company responsible for investor losses during a six-month period when its stock price fell to about $10 from about $26, causing its market value to tumble by more than $150 billion.
Investors claimed that GE withheld information regarding its health and the health of its GE Capital finance arm, including exposures to subprime and other low-quality loans. They also said GE misleadingly touted itself as being safer than rivals, despite the effects of the financial crisis.
Holwell also let stand some claims accusing bank underwriters of omitting statements from offering documents for a $12.2 billion GE stock offering in October 2008. He dismissed several other claims, and did not rule on the case’s merits.
A GE spokesman and lawyers for the investors did not immediately respond to requests for comment. Antonio Yanez, a lawyer for the banks, declined to comment.
Holwell said investors led by the State Universities Retirement System of Illinois adequately alleged that GE made material misrepresentations during the crisis about its access to commercial paper and ability to maintain its dividend.
He also let the investors pursue claims alleging that company officers, including Chief Executive Jeffrey Immelt and Chief Financial Officer Keith Sherin, misled them and had sufficient intent, known as “scienter,” to mislead.
CATEGORICAL STATEMENTS
“Immelt’s categorical statements that investors could ‘count on’ a dividend and that GE was having ‘no difficulties’ issuing commercial paper are not the sort of cautious statements one would expect of a CEO attempting to come to grips with the effects of the economic crisis on his company,” Holwell wrote in a 53-page decision.
“A CEO is allowed to convince the public to invest in his company, but not at the expense of providing it with accurate information about the company’s financial health,” Holwell continued. “Taking the factual allegations in the (complaint) as true, the inference that Immelt acted with scienter is at least as compelling as the inference that he did not.”
Among the banks that were sued were Bank of America Corp, Citigroup Inc, Deutsche Bank AG Goldman Sachs Group Inc, JPMorgan Chase & Co, and Morgan Stanley, court records show.
The lawsuit covered investors who owned GE stock from September 25, 2008 to March 19, 2009.
During that period the Fairfield, Connecticut-based company cut its dividend and lost its “triple-A” credit rating. It also received a $3 billion infusion from Warren Buffett’s Berkshire Hathaway Inc.
GE’s many products include jet engines, turbines and light bulbs. It also owns part of NBC Universal, in which Comcast Corp holds a majority stake.
The case is In re: General Electric Co Securities Litigation, U.S. District Court, Southern District of New York, No. 09-01951.
(Reporting by Jonathan Stempel in New York; editing by Andre Grenon, Phil Berlowitz)
2012年1月3日星期二
Will Lloyds’ Distressed Property Loan Sales Spark Similar Deals?
At the beginning of December, the Financial Times reported that Lloyds Banking Group had opened discussions with US private equity group Lone Star about selling off GBP 900 million of distressed real estate loans. According to the news provider, the deal would signal the largest such loan disposal by a financial institution in the UK since the difficulties experienced in the property market in 2008. The newspaper suggested this could herald a deluge of similar sales and chairman of Chainbow Roger Southam agrees.
He stated that in 2012 “a lot more problems will come out of the woodwork” for UK banks. As a result, Mr Southam believes other deals like that between Lloyds and Lone Star will definitely be on the cards. “They are going to have to bite the bullet and do the bulk deals that we have seen in this distressed way [as Lloyds have done],” Mr Southam asserted. However, he stressed the biggest difficulty will come in finding buyers for such bundles of assets. “Over the last six months and a little bit before that, yields and the purchase prices would seem very good value, [however], people are not in the marketplace for taking [them] on board,” he explained.
Mr Southam stressed the number of potential buyers for portfolios of distressed real estate and loans is “very, very limited”, so even if the banks are keen to offload these assets and shore up their books, it may be a difficult task to accomplish. He added that if the market becomes inundated by financial establishments hoping to complete deals of this kind, it could be “very detrimental” for the real estate sector as a whole. Bloomberg recently cited data from Standard & Poors, showing that as much as GBP 4.8 billion of loans tied to mortgage-backed securities are due to mature in 2012. The assets behind the loans will therefore have to be sold, or the loans themselves refinanced over the next 12 months, the news provider revealed.
Mr Southam stressed the number of potential buyers for portfolios of distressed real estate and loans is “very, very limited”, so even if the banks are keen to offload these assets and shore up their books, it may be a difficult task to accomplish. He added that if the market becomes inundated by financial establishments hoping to complete deals of this kind, it could be “very detrimental” for the real estate sector as a whole. Bloomberg recently cited data from Standard & Poors, showing that as much as GBP 4.8 billion of loans tied to mortgage-backed securities are due to mature in 2012. The assets behind the loans will therefore have to be sold, or the loans themselves refinanced over the next 12 months, the news provider revealed.
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Ed Stansfield, chief property economist at Capital Economics, told the news agency there is a discrepancy between the type of assets being put up for sale and the sort that investors with cash are seeking to acquire. He said the real estate behind the bank loans tends to be “pretty poor quality” and this is not what investors are looking for in the current economic climate. Meanwhile, Sue Munden, analyst at investment bank Seymour Pierce, noted it will be the UK real estate investment trusts that hold higher calibre property that will be able to take advantage of this sentiment. “The good are going to continue getting better and the bad are going to carry on getting worse,” she stated in an interview with Bloomberg.
A further stumbling block for the financial establishments hoping to offload some of their assets could therefore be their quality, with the Financial Times citing data from Savills which revealed that only one-quarter of the estimated GBP 350 billion of the banks’ exposure to the UK’s commercial property sector is comprised of prime real estate, indicating the remainder will not be as attractive to potential investors. In its European Investment Bulletin for summer 2011, Savills stressed that buyers are still averse to anything other than prime property.
The report highlighted the popularity of assets in desirable locations or that fall into the prime bracket, but indicated investors “remain wary of secondary markets due to the lack of transactional evidence, and questions about the timing and strength of the economic and leasing market recovery in some UK markets”. However, the research showed the UK still attracts the greatest level of global investment within Europe, accounting for 34 per cent of the transactions that occurred during the first quarter of 2011.
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Ed Stansfield, chief property economist at Capital Economics, told the news agency there is a discrepancy between the type of assets being put up for sale and the sort that investors with cash are seeking to acquire. He said the real estate behind the bank loans tends to be “pretty poor quality” and this is not what investors are looking for in the current economic climate. Meanwhile, Sue Munden, analyst at investment bank Seymour Pierce, noted it will be the UK real estate investment trusts that hold higher calibre property that will be able to take advantage of this sentiment. “The good are going to continue getting better and the bad are going to carry on getting worse,” she stated in an interview with Bloomberg.
A further stumbling block for the financial establishments hoping to offload some of their assets could therefore be their quality, with the Financial Times citing data from Savills which revealed that only one-quarter of the estimated GBP 350 billion of the banks’ exposure to the UK’s commercial property sector is comprised of prime real estate, indicating the remainder will not be as attractive to potential investors. In its European Investment Bulletin for summer 2011, Savills stressed that buyers are still averse to anything other than prime property.
The report highlighted the popularity of assets in desirable locations or that fall into the prime bracket, but indicated investors “remain wary of secondary markets due to the lack of transactional evidence, and questions about the timing and strength of the economic and leasing market recovery in some UK markets”. However, the research showed the UK still attracts the greatest level of global investment within Europe, accounting for 34 per cent of the transactions that occurred during the first quarter of 2011.
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