Banco Santander - Chile ADS

Ladies and gentlemen, thank you for standing by and welcome to the Banco Santander de Chile Q2 Financial Results Conference Call. Throughout today's recorded presentation, all participant lines will be on listen-only mode. The format of the call today 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 Moratore, the CFO. Please go ahead, sir.

Good morning, everyone. Welcome to Banco Santander Chile's second quarter 2021 results webcast and conference call. This is Emiliano Muratore, CFO, and I'm joined today by Robert Moreno, Managing Director of Investor Relations, and Claudio Soto, Chief Economist from our research team. Thank you for attending today's conference call. We hope you all continue to stay safe and healthy. We have a lot of good news for you today. Claudio will start with an update on the economy and macro scenario beginning on slide four with important upward revisions to our GDP forecast. Then this will be followed by a review of our record high second quarter results and the amazing progress we are making in our digital strategy and other initiatives. Finally, we will close with more good news regarding our guidance. Now I will hand the call over to Claudio.

Thank you, Emiliano. As we mentioned in the last quarter, Chile was going to a new wave of contagions in April. As we can see on slide four, there was another wave in June. So during the third quarter, a substantial part of the Chilean population was in lockdown. By the end of July, almost 14 million Chileans had received at least one dose of the vaccine, and 12 million had received the full treatment against COVID. representing more than 60% of the total population. Consequently, we have seen a substantial reduction in positivity rates of PCR tests, and contagions have declined in recent weeks, leading to an opening of the economy and a fast decrease in the population under full lockdown. Chile has benefited from good external conditions. Our main trade partners are growing fast, and terms of trade have improved. On slide five, we can see that the corporate price has remained high, having increased almost 50% on average since December 2019. The improvement in sanitary condition is also helping the economy in the short run. Modility has been normalizing, reaching pre-pandemic levels, and with this, economic activity has also rebounded, growing 18% annually in June. However, employment continues subdued, with a decrease in the labor force participation rate, despite an increase in job offerings. On slide six, we have our estimation for this year and 2022. We estimate GDP will grow between 7.5% and 8.5% this year, favored by the opening of the economy, good external conditions, and liquidity injections to households. to pension funds withdrawals and cash transfers by the government. In 2022, growth will moderate as fiscal impulse fades away. After robust inflation at the beginning of 2021, there was some slowdown due to needed food and services prices. Going forward, the strong dynamic of consumption will put some upward pressure on prices, and inflation should accelerate by the second part of the year, closing at around 3.9%. In July, the central bank began reducing its monetary impulse, increasing the monetary policy rate from 0.5% to 0.75%. We expect then to continue this trend with the NPR reaching 1.25% by the end of the year. medium and long-term interest rates have also increased in response to a better outlook for growth this year, stock flow adjustments related to the pension fund withdrawal in May, and fiscal pressures on the bonds market due to cash need by the government. Robert, you might continue.