Best Bank Chile: Honing Profitability

Nov 1, 2009

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 Chile’s 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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