Best Bank Chile: Honing Profitability
Santander Chile, the country’s largest and most profitable bank, has perfected the art of retail, which it claims is more challenging to run, but also more lucrative.
Sixty percent of our gross revenue comes from retail and
40% comes from corporate, says Raimundo Monge, director
of strategic and financial planning at Santander. Retail
banking is trickier to handle, but once you get it can be very
profitable, he adds.
Monge notes that while gross spreads tend to be higher in
retail, which includes mortgages, cards and deposit accounts,
dealing with consumer-level clients requires higher provisions
and operational expenses. The wrong cost structure can
lose you a lot of money, says Monge.
While Santander Chiles return on equity (ROE) in the
first half of 2009 fell to 28.40% from 33.10% in the
corresponding period of 2008, it was still well above the
competition. In July, Banco de...
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