Chile Diversified Banks: Upgrading on Attractive Valuations and Improving Earnings Outlook

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Chile Diversified Banks: Upgrading on Attractive Valuations and Improving Earnings Outlook

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24 Jun 2026 16:53:11 ET │ 24 pages

Chile Diversified Banks

Upgrading on Attractive Valuations and Improving Earnings Outlook

CITI'S TAKE

We are upgrading our recommendation on Chilean banks as valuation ratios

are currently presenting attractive discounts, in our view, both on lower

stock prices and higher earnings prospects, propelled by: 1) the positive AC

impact of higher inflation on NIM (inflation rate 4.1% vs 3% previously) for Javier Pizarro

2026; and 2) a more constructive view on medium-term local economic +56-2-2873-6804

growth prospects from 2027. Thus, we are upgrading Santander Chile, Itau javier.pizarro@citi.com

Chile, and BICE from Neutral to Buy, and Bci from Sell to Neutral. Brian Flores, CFA

+55-11-4009-2842

Santander — Double-digit 2026 net income growth should be explained by 2Q luis.brian.flores@citi.com

ROAE above 30% due to UF variation of 2.45% QoQ. In 2H26, the bank should post

ROAE of 20% even with UF variation below 0.75% QoQ “normal” levels thanks to a Gustavo Schroden

moderate CoR decline. For 2027–28, loan growth should recover to 6% YoY and CoR +55-11-4009-5858

trend toward 1.3%, allowing the bank to sustain ROAE of 22%. The stock is trading gustavo.schroden@citi.com

at 11.7x LTM P/E 2027 (below its 10-year average of 13.1x) and offering a dividend yield

of 5.6%.

Bci — The bank’s 15% 2026 ROAE should be explained by a 15% ROAE in 1Q26 (lower

opex) and 20% in 2Q26 (net readjustment and financial results). In 2H26, the bank

should moderate its ROAE due to lower UF variation and higher CoR. For 2027–28,

loans should maintain a 6% YoY growth and CoR should trend toward 0.75%,

allowing the bank to sustain ROAE of 13%.