Business & Banking

May 1, 2002

SCH Merges Its Chilean Banks
In April, Spain's Santander Central Hispano secured full control of Banco Santiago and announced plans to merge it with Banco Santander Chile, its other Chilean bank. The merger will create Chile's biggest bank and comes just a few months after Chilean conglomerate Quiñenco united its two banks, Banco de A Edwards and Banco de Chile earlier this year. SCH paid the Central Bank of Chile $670 million to double its stake in Banco Santiago after a lack of investor interest forced the government to call off a public offering to sell its 35.45% stake in the bank.

The merger of Banco Santiago and Banco Santander Chile was long expected, although Santander has sometimes forced banks that it owns in the same market to compete with each other. Both Chilean banks are highly profitable. In March, Santiago reported a return on equity...

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