Banco Santander - Chile ADS

Ladies and gentlemen, thank you for standing by. And I'd like to welcome you to Banco Santander Chile's third quarter 2025 earnings conference call on the 5th of November, 2025. Please note that at this point, all participant lines are in listen-only mode. After the call, there'll be an opportunity to ask questions. So with this, I'll now like to pass the line to Patricia Perez, the chief financial officer. Please go ahead.

Good morning, everyone. Patricia Perez- Welcome to Banco Santander Thiele's third quarter 2025 results webcast and conference call. Patricia Perez- This is Patricia Perez, CFO, and I'm joined today by Christian Vicuña, head of strategy and IR, and Lorena Palomeque, our economist. Thank you everyone for joining us today for the review of our performance and results in the third quarter. Today, Lorena will start with an overview of the economic environment, and then Cristian will go through the key strategy points and the results of the bank in the third quarter of the year. After that, we will have a Q&A session where we will be happy to answer your questions. So let me hand over to Lorena.

Thanks, Patricia. During the third quarter of 2025, we observed positive economic indicators in the Chilean economy. Preliminary MACEX figures suggest GDP growth around 2% year-on-year in Q3, or almost 3% when excluding mining. While we await the full national accounts report on November 18, which will also include Q1 and Q2 revisions, we estimate GDP growth of 2.4% by the end of this year and close to 2% for next year. We are now just a few days away from the presidential and congressional elections in Chile. Also, the outcome is still uncertain. Polls suggest that a change in the government administration with an opposition candidate is the most likely scenario, which could generate stronger tailwinds for the economy next year. In terms of inflation, although moderation is already evident, it remains above the 3% target, with core inflation now below 4%. Limited second round effects Anchor expectations on a narrow output gap will allow inflation to converge to below 4% by the end of this year. We expect the disinflation process to continue, given the softer demand environment both globally and domestically. In this context, we maintain our forecast for the U.S. of 3.6% for the end of this year, converging to 3% next year. Regarding the monetary policy rate, During the third quarter, the Central Bank of Chile maintained the policy rate at 4.75%, responding to an inflation environment that continues to ease. Nevertheless, the bank's power emphasized that it will closely monitor the evolution of coal inflation, which remains higher than expected, as well as domestic demand, before considering a new rate cut. We expect another reduction in the last quarter of the year, bringing the rate to 4.5% by year end, and followed by an additional cut during the course of next year. On the slide slide, we present recent developments in the regulatory framework. Regarding the mortgage subsidy law, which was approved in May of this year, its implementation has continued within the framework of the location of the funds awarded in the first action held in June. Under the law, 50,000 subsidies will be provided, with almost 18,000 already authorized by banks. This has provided some momentum to the housing sector, whose growth is expected to become increasingly evident in the coming months. With respect to the interchange fee, the second rate cap reduction remains on hold and under review by the Commission, and we are awaiting further updates on this matter. Open Finance System of the FinTech Law established an implementation schedule that begins with a gradual submission of information that banks and payment card issues must share in July 2026. However, the system's technical definition remains under consultation, while costs and other operation details are still pending. This has prompted calls to review the implementation timelines, a request the FNC is currently analyzing. During September, the framework law on sectoral authorization for permits related to productive energy and mining initiatives was approved. This will enable the development of tools for the simultaneous processes of permits, streamlining the approval of low-risk projects, which should ensure accelerated investment in this sense. As we mentioned before, there are only a few days left until the presidential and congressional elections in Chile, which will be held on November 16th with a potential runoff on December 14th. According to the latest current poll, left-wing candidate Janet Jara leads the presidential race with 27% support, followed by right candidate José Antonio Gás with 20%. While the presidential race has gained visibility, we must not overlook the parliamentary elections. where the entire lower house and nearly half of the Senate, 23 out of 50 seats, will be renewed. Polls show that Chileans remain highly concerned with crime, security, and economic growth. Simulation suggests that right-wing candidates may gain ground in Congress, driven by local campaigns emphasizing security. This implies that even if the left-wing candidate wins the presidency, Congress could lean right, potentially moderating more radical policy initiatives. As such, while some electoral-related volatility is likely in the near term, we believe the longer-term market impact will be linked. As with that, I will now pass over to Cristian.