EX-1 2 v201764_ex1.htm

THIRD QUARTER 2010

EARNINGS REPORT


Investor Relations Department	0
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

INDEX

SECTION		PAGE

SECTION 1: SUMMARY OF RESULTS		2

SECTION 2: BALANCE SHEET ANALYSIS		5

SECTION 3: ANALYSIS OF QUARTERLY INCOME STATEMENT		8

SECTION 4: CREDIT RISK RATINGS		15

SECTION 5: SHARE PERFORMANCE		16

SECTION 6: INSTITUTIONAL BACKGROUND		17

ANNEX 1: BALANCE SHEET		18

ANNEX 2: YEAR TO DATE INCOME STATEMENT		19

ANNEX 3: QUARTERLY INCOME STATEMENTS		20

ANNEX 4: QUARTERLY EVOLUTION OF MAIN RATIOS AND OTHER INFORMATION		21

CONTACT INFORMATION	Santiago, Chile
Robert Moreno	Tel: (562) 320-8284
Manager, Investor Relations Department	Fax: (562) 671-6554
Banco Santander Chile	Email: rmorenoh@santander.cl
Bandera 140 Piso 19	Website: www.santander.cl

Investor Relations Department	1
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

SECTION 1: SUMMARY OF RESULTS

Net income increases 14.1% YoY in 3Q10

Year-to-date & Quarterly results, Ch$ billion and change, %

*Gross operating income, net of provisions & costs = Net interest revenue + fees + financial transactions, net + provision expenses + operating expenses

In 3Q10, net income attributable to shareholders1 totaled Ch$125,356 million (Ch$0.67 per share and US$1.42/ADR2). These results represent an increase of 14.1% compared to 3Q09 (from now on YoY) and a decrease of 9.7% compared to 2Q10 (from now on QoQ). The efficiency ratio in 3Q10 reached 33.8%.

ROAE reaches 29.3% in 3Q10. Core capital at 10.5%.

With these results, the Bank’s ROAE in the quarter reached 29.3% and 30.5% for 9M10. The Bank currently has one of the highest ROEs and capitalization levels in the Chilean financial system. As of September 30, 2010, the Bank’s BIS ratio reached 14.5% and its Core Capital ratio stood at 10.5%.

Total loans grow 4.5% QoQ in 3Q10. Strong growth of the Bank’s credit card business.

In 3Q10, total loans increased 4.5% QoQ with loan growth seen in all products and segments. YoY, loan growth reached 12.1%. Higher yielding retail loans increased 4.2% QoQ, led by a 6.3% increase in consumer loans. Notable was the 9.9% QoQ and 35.6% YoY increase in credit card consumer loans, as the Bank continues to gain market share in credit card loans and purchases. The Bank’s market share in consumer and credit card loans has increased 150 basis points, since the beginning of the year to 27.3%. The Bank’s market share in credit card purchases, including retailers, is approximately 19%.

1 The results in this report are unaudited.

2 Earnings per ADR is calculated using an exchange rate of Ch$483.65 per US$.

Investor Relations Department	2
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

Gross income, net of provisions & costs from retail activities increases 23.5% QoQ and 42.1% YoY in 3Q10

By business segments, results were driven mainly by retail banking activities in line with our strategic objectives. Gross income, net of provisions and costs in retail banking increased 23.5% QoQ and 42.1% YoY. Net interest income grew 18.9% QoQ and 15.1% YoY driven by loan growth and higher margins with both individuals and small and middle-sized companies (SMEs). Fee income grew 3.7% QoQ and 4.8% YoY in these segments, driven by higher fees from credit cards and insurance brokerage. Provision expenses in retail banking increased 2.9% QoQ as the Bank proactively implemented some improvements in its standardized credit scoring models for consumer loans. However, YoY provision expense decreased 19.1% as asset quality continues to improve. Operating expenses from retail banking decreased 0.6% QoQ and increased 8.4% YoY, driven by the rise in commercial activity.

The Bank also showed positive results in its middle market segment whose gross income, net of provisions increased 29.7% QoQ and 113.9% YoY as loan growth and improvements in asset quality drove earnings in this segment.

These results were partially offset by lower income from our Global Banking and Markets business, which was negatively affected in the quarter by the rising interest rate environment. This reduced earnings from our treasury services and fixed income portfolios.

The loss in our Financial Management Division decreased 57.7% YoY in 3Q10 as higher inflation benefited its operations. QoQ, the results of this division was negatively affected by the rise in short-term interest rates.

Gross income net of provisions and costs (Ch$ million)	3Q10			YoY Chg.			QoQ Chg.
Individuals		79,091			42.1	%		23.5	%
SMEs		50,354			34.0	%		67.9	%
Total retail banking		129,445			42.1	%		23.5	%
Institutional lending		7,756			108.4	%		118.6	%
Middle-market		37,389			113.9	%		29.7	%
Global Banking & Markets		6,402			(92.3	)%		(74.8	)%
Financial Management & Corporate Activities1		(27,710	)		(57.7	)%		—	%
Gross income, net of provisions & costs2		153,282			16.5	%		(3.6	)%

The Corporate Activities segment is comprised of all other operational and administrative activities that are not assigned to a specific segment or product mentioned above. These activities include the Financial Management Division, which oversees, among other elements: (i) the management of our structural foreign exchange gap position, our structural interest rate risk and our liquidity risk and, (ii) the use of our resources, the distribution of capital among our different segments and the overall financing cost of our investments.

2	Includes net interest income, fee income, financial transactions, net, provision expense and operating expenses. Provision expense in 3Q10 includes the provision reversal for contingent loans, which is included in Other operating income.

Net income up 30.4% in 9M10

In the nine-month period ended September 30, 2010 (9M10), net income attributable to shareholders totaled Ch$383,283 million (Ch$2.03/share and US$4.37/ADR) and increased 30.4% compared to results in the nine month period ended September 30, 2009 (9M09). Gross income, net of provisions and costs increased 21.1% with a 12.2% increase in net interest revenue, a 21.5% decrease in provision and expense and a 10.0% rise in operating costs. The Bank’s net interest margin reached 5.9%, 40 basis point above the margins reached in 9M09. The efficiency ratio in 9M10 reached 34.0%.

Investor Relations Department	3
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

Banco Santander Chile: Summary of Quarterly Results

	Quarter									Change %
(Ch$ million)	3Q10			2Q10			3Q09			3Q10 / 3Q09			3Q / 2Q 10
Net interest income		235,674			242,782			217,253			8.5	%		(2.9	)%
Fee income		66,436			65,158			64,756			2.6	%		2.0	%
Core revenues		302,110			307,940			282,009			7.1	%		(1.9	)%
Financial transactions, net		21,713			25,041			31,510			(31.1	)%		(13.3	)%
Provision expense1		(56,971	)		(55,952	)		(79,122	)		(28.0	)%		1.8	%
Operating expenses		(113,570	)		(117,987	)		(102,775	)		10.5	%		(3.7	)%
Gross income, net of provisions & costs		153,282			159,042			131,622			16.5	%		(3.6	)%
Other operating & Non-op. Income 2		(27,926	)		(20,219	)		(21,721	)		28.6	%		38.1	%
Net income attributable to shareholders		125,356			138,823			109,901			14.1	%		(9.7	)%
Net income/share (Ch$)		0.67			0.74			0.58			14.1	%		(9.7	)%
Net income/ADR (US$) 3		1.42			1.41			1.11			28.4	%		1.1	%
Total loans		15,232,019			14,582,467			13,583,627			12.1	%		4.5	%
Customer funds		14,451,712			14,872,739			14,085,927			2.6	%		(2.8	)%
Shareholders’ equity		1,757,340			1,665,326			1,555,148			13.0	%		5.5	%
Net interest margin		5.7	%		6.1	%		5.7	%
Efficiency ratio		33.8	%		35.2	%		32.6	%
Return on average equity 4		29.3	%		33.8	%		28.8	%
NPL / Total loans 5		2.7	%		2.8	%		2.8	%
Coverage NPLs		105.1	%		93.3	%		88.2	%
Risk Index 6		2.8	%		2.7	%		2.5	%
BIS ratio		14.5	%		14.1	%		15.2	%
Branches		500			499			502
ATMs		1,914			1,871			1,991
Employees		11,049			11,133			11,280

1.	Includes provision reversal for contingent loans, which is included in Other operating income in 3Q10.

2.	Includes Other operating income, Other operating expenses, income attributable to investments in other companies, income tax and net of minority interest.

3.	The change in earnings per ADR may differ from the change in earnings per share due to the exchange rate. Earnings per ADR was calculated using an exchange rate of Ch$483.65 per US$.

4.	Annualized quarterly Net income attributable to shareholders / Average equity attributable to shareholders.

5.	NPL: Non-performing loans, full balance of loans with one installment 90 days or more overdue.

6.	Risk Index: Loan loss allowances over total loans, measures how much the Bank expects to loose on its loan book, according to its internal models and the Superintendency of Banks guidelines. Banks must have 100% coverage of the Risk Index.

Investor Relations Department	4
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

SECTION 2: BALANCE SHEET ANALYSIS

LOANS

Loans grow 4.5% QoQ in 3Q10 with growth seen in all products and segments

Loans	Quarter ended,						% Change
(Ch$ million)	Sep-10		Jun-10		Sep-09		Sept. 10/09			Sept. 10 / Jun. 10
Total loans to individuals1		8,035,617		7,715,031		6,980,092		15.1	%		4.2	%
Consumer loans		2,554,884		2,404,128		2,155,200		18.5	%		6.3	%
Residential mortgage loans		4,498,799		4,360,496		4,033,091		11.5	%		3.2	%
SMEs		2,301,536		2,210,170		2,055,911		11.9	%		4.1	%
Total retail lending		10,337,153		9,925,201		9,036,003		14.4	%		4.2	%
Institutional lending		340,274		330,980		285,129		19.3	%		2.8	%
Middle-Market & Real estate		3,160,681		2,983,741		2,838,365		11.4	%		5.9	%
Corporate		1,406,210		1,347,855		1,449,001		(3.0	)%		4.3	%
Total loans 2		15,232,019		14,582,467		13,583,627		12.1	%		4.5	%

1.	Includes consumer loans, residential mortgage loans and other loans to individuals

2.	Total loans gross of loan loss allowances. Total loans include other non-segmented loans and exclude interbank loans.

In 3Q10, total loans increased 4.5% QoQ with growth seen in all products and segments. YoY, loan growth reached 12.1%. The recent economic data for Chile show that economic growth has been accelerating with a strong rise in investment and consumption levels. Unemployment figures have also been better than expected as well as wage growth. The Bank’s market share also continued to increase in the quarter. The most important rise in market share has been in consumer and credit card loans, which increased 180 basis points, since the beginning of the year to 27.6%.

Source: Superintendency of Banks of Chile

Higher yielding retail loans increased 4.2% QoQ. Loans to individuals increased 4.2% QoQ, led by a 6.3% increase in consumer loans. Notable was the 9.9% QoQ and 35.6% YoY increase in credit card consumer loans as the Bank continues to gain market share in credit card purchases. Residential mortgage loans increased 3.2% QoQ as long-term rates remained attractive and lower than expected negative impacts of the earthquake on this market. Lending to SMEs increased 4.1% QoQ also reflecting the strength of economic growth.

Investor Relations Department	5
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

In the middle market, which is comprised of companies with annual sales between Ch$3.5 billion and Ch$10 billion increased 5.9% QoQ. This segment was positively impacted by economic growth and reconstruction investments. Corporate lending also showed positive growth in 3Q10, reflecting the stronger evolution of investment levels in the economy and the on-going reconstruction effort.

FUNDING

The Bank issues the first Chilean peso denominated corporate bond ever in international markets. The Bank’s FX deposit rating are upgraded in the quarter

(Ch$ million)	Sep-10			Jun-10			Sep-09			Sept. 10/09			Sept. 10 / Jun. 10
Demand deposits		3,991,732			4,168,884			3,152,739			26.6	%		(4.2	)%
Time deposits		7,155,213			7,193,376			7,456,731			(4.0	)%		(0.5	)%
Total customer deposits		11,146,945			11,362,260			10,609,470			5.1	%		(1.9	)%
Mutual funds		3,304,767			3,510,479			3,476,457			(4.9	)%		(5.9	)%
Total customer funds		14,451,712			14,872,739			14,085,927			2.6	%		(2.8	)%
Loans to deposits*		100.9	%		99.8	%		102.4	%
Bonds		3,979,448			3,245,162			2,717,508			46.4	%		22.6	%

* (Loans - marketable securities that fund mortgage portfolio) / (Time deposits + demand deposits).

Customer funds decreased 2.8% in the quarter. The balance of demand deposits decreased 4.2% QoQ. Demand deposits denominated in foreign currencies, which represent 10% of the total, declined 21% in the quarter, as a direct result of the appreciation of the peso against the U.S. dollar. The rising interest rate environment also had a negative impact on demand deposits as clients shifted funds towards time deposits.

The 0.5% decrease in time deposits was mainly due to a reduction of the balance of wholesale short-term deposits in favor of long-term fixed rate funding in order to maintain stable spreads in a rising interest rate environment. This was offset by a 1.8% QoQ increase in core retail deposits, which totaled Ch$3,217,465 million as of September 30, 2010. In 3Q10, the Bank’s foreign currency time deposit was upgraded by Fitch from A+ to AA-, two notches above the sovereign ceiling.

The Bank also continued to access the international bond market in order to maintain strong liquidity levels and to minimize negative impacts of rising rates on our net interest margin by replacing short-term non-core deposits with long-term funding. For this reason, bonds have increased 22.6% QoQ and 46.4% YoY. In September 2010, the Bank, issued, among other notes, a Ch$247,255 million 10-yr bond in international markets. This was the first ever international Chilean peso issuance abroad by a Chilean corporate.

Mutual funds under management decreased 5.9% QoQ. This was mainly due to negative mark-to-market effects on fixed income funds as short-term interest rates increased and the appreciation of the peso against the dollar which negatively affected fixed income-dollar funds. Highly profitable equity funds continued to expand in the quarter (See Fee income).

Investor Relations Department	6
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL

ROAE of 29.3% achieved in 3Q10. BIS ratio stood at 14.5%

Shareholders' Equity	Quarter									Change %
(Ch$ million)	Sep-10			Jun-10			Sep-09			Sept. 10/09			Sept. 10 / Jun. 10
Capital		891,303			891,303			891,303			0.0	%		0.0	%
Reserves		51,538			51,539			(16,960	)		(403.9	)%		(0.0	)%
Unrealized gain (loss) Available-for-sale financial assets		(13,928	)		(18,193	)		(33,001	)		(57.8	)%		(23.4	)%
Retained Earnings:		828,426			740,677			713,806			16.1	%		11.8	%
Retained earnings previous periods		560,128			560,128			508,045			10.3	%		0.0	%
Net income		383,283			257,927			293,944			30.4	%		48.6	%
Provision for mandatory dividend		(114,985	)		(77,378	)		(88,183	)		30.4	%		48.6	%
Minority Interest		29,599			28,460			30,887			(4.2	)%		4.0	%
Total Equity		1,786,939			1,693,786			1,586,035			12.7	%		5.5	%
Equity attributable to shareholders		1,757,340			1,665,326			1,555,148			13.0	%		5.5	%
ROAE		29.3	%		33.8	%		28.8	%

Shareholders’ equity totaled Ch$1,757,340 million (US$3.6 billion) as of September 30, 2010. ROAE in 3Q10 reached 29.3%. This strong profitability was achieved while having one of the highest levels of capitalization in the banking system. Voting common shareholders’ equity is the sole component of our Tier I capital and represented 10.5% of risk weighted assets. The BIS ratio reached 14.5% compared to 14.1% in the previous quarter.

Capital Adequacy	Quarter ended									Change %
(Ch$ million)	Sep-10			Jun-10			Sep-09			Sept. 10/09			Sept. 10 / Jun. 10
Tier I		1,757,340			1,665,326			1,555,148			13.0	%		5.5	%
Tier II		672,740			627,608			563,856			19.3	%		7.2	%
Regulatory capital		2,430,080			2,292,934			2,119,004			14.7	%		6.0	%
Risk weighted assets		16,739,710			16,210,259			13,918,058			20.3	%		3.3	%
Tier I (Core capital) ratio		10.5	%		10.3	%		11.2	%
BIS ratio		14.5	%		14.1	%		15.2	%

Investor Relations Department	7
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

SECTION 3: ANALYSIS OF QUARTERLY INCOME STATEMENT

NET INTEREST INCOME

Lower inflation rate explains QoQ drop in net interest income

Net Interest Income / Margin	Quarter									Change %
(Ch$ million)	3Q10			2Q10			3Q09			3Q10 / 3Q09			3Q / 2Q 10
Net interest income		235,674			242,782			217,253			8.5	%		(2.9	)%
Average interest-earning assets		16,463,951			15,816,902			15,184,842			8.4	%		4.1	%
Average loans		14,874,816			14,291,144			13,479,883			10.3	%		4.1	%
Net interest margin (NIM) 1		5.7	%		6.1	%		5.7	%
Avg. equity + non-interest bearing demand deposits / Avg. interest earning assets		34.7	%		36.4	%		30.3	%
Quarterly inflation rate 2		0.65	%		0.97	%		(0.47	)%
Avg. overnight interbank rate (nominal)		1.76	%		0.51	%		0.46	%
Avg. 10 year Central Bank yield (real)		2.82	%		3.04	%		2.88	%

1.	Annualized.

2.	Inflation measured as the variation of the Unidad de Fomento in the quarter.

Net interest income decreased 2.9% QoQ and increased 8.5% YoY. The YoY rise in net interest income was mainly due to:

(a) Loan growth. Average loans increased 10.3% YoY. By segment, YoY net interest income growth was led by a 15.1% increase from retail banking and a 29.4% increase in net interest income from the middle-market;

(b) Higher inflation rate. The Bank maintains long-term assets (mainly medium and long-term financial investments) that are denominated in Unidades de Fomento (UFs), an inflation indexed unit, which are partially funded with nominal or non-interest bearing peso short-term deposits. The UF inflation reached 0.65% in 3Q10 compared to -0.47% in 3Q09 and;

(c) Improved funding mix. The ratio of average equity and non-interest bearing demand deposits to average interest earning assets reached 34.7% in 3Q10 compared to 30.3% in 3Q09. These positive factors were partially offset by the increase in funding costs as short-term interest rates increased in the quarter.

Compared to 2Q10, the 2.9% decrease in net interest income was mainly due to the lower inflation rates and higher short-term interest rates which increased funding costs. This was partially offset by the 4.1% QoQ increase in average loans. Going forward, we expect the Central Bank to continue to rising rates as inflation is expected to continue to rise and economic growth remains strong.

Investor Relations Department	8
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

PROVISION FOR LOAN LOSSES

Coverage of NPLs reaches 105.1%

Provision for loan losses	Quarter									Change %
(Ch$ million)	3Q101			2Q10			3Q09			3Q10 / 3Q09			3Q / 2Q 10
Gross provisions		(41,135	)		(14,012	)		(25,377	)		62.1	%		193.6	%
Provision reversal for contingent loans1		25,716			—			—
Charge-offs		(49,568	)		(49,506	)		(65,613	)		(24.5	)%		0.1	%
Gross provisions and charge-offs		(64,987	)		(63,518	)		(90,990	)		(28.6	)%		2.3	%
Loan loss recoveries		8,016			7,566			11,868			(32.5	)%		5.9	%
Net provisions for loan losses		(56,971	)		(55,952	)		(79,122	)		(28.0	)%		1.8	%
Total loans 2		15,232,019			14,582,467			13,583,627			12.1	%		4.5	%
Total reserves (RLL)		428,833			387,624			338,020			26.9	%		10.6	%
Non-performing loans 3 (NPLs)		407,831			415,556			383,172			6.4	%		(1.9	)%
Gross provision expense / Loans		2.38	%		1.74	%		2.68	%
Cost of credit 4		2.17	%		1.53	%		2.33	%
Risk Index (RLL / Total loans)		2.82	%		2.66	%		2.49	%
NPL / Total loans		2.68	%		2.85	%		2.82	%
Coverage of NPLs5		105.1	%		93.3	%		88.2	%

1.	Includes provision reversal for contingent loans, which is included in Other operating income in 3Q10.

2.	Excludes interbank loans.

3.	NPL: Non-performing loans: Full balance of loans with one installment 90 days or more overdue.

4.	Cost of credit: Net provision expense, annualized / Loans.

5.	Coverage NPL: RLL / NPLs.

In 3Q10, the Bank proactively implemented some improvements in its standardized credit scoring models for consumer loans. This impacted two line items of our income statement: Provision Expenses and Other Operating Income. The net effect of this improvement in the models was a charge of Ch$2,077 million in the quarter. Two major changes were incorporated in the models. On the one hand, the minimum provision required for clients in most risk profiles was increased for performing consumer loans. This had a one-time impact of Ch$27,793 million in provision expense. At the same time, the Bank adjusted the minimum provision levels that are set aside for the unused portion of credit card lines for clients that use their card for transactional and not credit purposes. Previously, these clients were assigned a provision level equal to the average for the whole credit card sample independent if they actually used their approved lines or not. This signified a one-time reversal of Ch$25,716 million recognized as Other operating income. As these provisions are for unused credit lines, accounting rules requires us to record these as a non-operating item in the income statement and as a non-credit provision in Other liabilities.

Incorporating both effects, adjusted provision expense in the quarter totaled Ch$56,971 million and increased 1.8% QoQ and decreased 28.0% YoY. The QoQ increase was mainly due to the net effect of the modifications made to our consumer loan provisioning models and higher provisions in commercial lending. The YoY decline was mainly due to the improvements in asset quality as the economy strengthened. By loan product, provision expense was as follows:

Investor Relations Department	9
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

Net provisions for loan losses by segment	Quarter									Change %
(Ch$ million)	3Q102			2Q10			3Q09			3Q10 / 3Q09			3Q / 2Q 10
Commercial loans1		(19,060	)		(15,264	)		(18,374	)		3.7	%		24.9	%
Residential mortgage loans		(4,529	)		(4,021	)		(2,741	)		65.2	%		12.6	%
Consumer loans2		(33,382	)		(36,667	)		(58,007	)		(42.5	)%		(9.0	)%
Net provisions for loan losses		(56,971	)		(55,952	)		(79,122	)		(28.0	)%		1.8	%

1 Includes net provision expenses for interbank loans.

2 Includes provision reversal for contingent loans, which is included in Other operating income in 3Q10.

Asset quality and coverage improved in the quarter. Non-performing loans decreased 1.9% QoQ. The NPL ratio reached 2.68% as of September 30, 2010 compared to 2.85% at the end of the second quarter. Coverage ratios also increased as the adjustments in our credit scoring models improved the coverage ratio in consumer lending. The coverage ratio of total NPLs reached 105.1% as of September 30, 2010 compared to 93.3% as of June 30, 2010.

The NPL ratio of consumer loans decreased from 2.99% as of June 2010 to 2.87% as of September 30, 2010. The coverage ratio of consumer NPLs in the same period increased from 256.6% to 294.9%.

The Bank’s Risk Index increased to 2.82% in the quarter, reflecting the more conservative provisioning standards incorporated into our consumer loan models. This ratio, defined as loan loss allowances over total loans, measures how much the Bank expects to loose on its loan book, according to its internal models and the Superintendency of Banks guidelines. The Bank is required to have 100% coverage of its Risk index.

Investor Relations Department	10
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

NET FEE INCOME

Solid QoQ growth of usage-linked fees

Fee Income	Quarter						Change %
(Ch$ million)	3Q10		2Q10		3Q09		3Q10 / 3Q09			3Q / 2Q 10
Collection fees		15,324		14,236		17,168		(10.7	)%		7.6	%
Credit, debit & ATM card fees		13,518		13,353		13,702		(1.3	)%		1.2	%
Checking accounts & lines of credit		10,604		10,470		12,284		(13.7	)%		1.3	%
Asset management		10,063		9,657		8,302		21.2	%		4.2	%
Insurance brokerage		8,683		8,962		4,221		105.7	%		(3.1	)%
Guarantees, pledges and other contingent operations		5,568		5,954		6,260		(11.1	)%		(6.5	)%
Fees from brokerage of securities		2,399		2,098		1,763		36.1	%		14.3	%
Other Fees		276		428		1,056		(73.9	)%		(35.5	)%
Total fees		66,436		65,158		64,756		2.6	%		2.0	%

Net fee income increased 2.0% QoQ and 2.6% YoY. Fee income growth was mainly driven by retail banking activities, which experienced a 3.7% QoQ and 4.8% YoY increase in fee income. The evolution of the main products was the following:

Collection fees in 3Q10 increased 7.6% QoQ. This was mainly due to higher collection of loan insurance policies on behalf of third parties and higher fees from the payment of services, mainly on-line. These fees were negatively affected by the earthquake in the first half of the year and as the economy has rebounded, these fees have quickly been recovering. The 10.7% YoY decline was mainly due to the temporary interruption of collection activities in the zones more affected by the earthquake.

Fees from credit, debit and ATM cards increased 1.2% QoQ mainly as credit card usage continues to rise. As of June 2010, the latest data available, the Bank’s market share in terms of monetary purchases with credit cards reached 19.1%, including retailers. YoY purchases with Santander cards were up 33.2% in real terms. The Bank continued to expand its alliances with corporate customers to issue co-branded credit cards. In the quarter the Bank signed an alliance with Pre-Unic a mid-sized retailer in Chile with 42 stores throughout Chile for the administration of their credit card operations. In the quarter the Bank also renewed its 16 year alliance with Lan, Chile’s leading airline.

Fees from checking accounts and lines of credit increased 1.2% QoQ and declined 13.7% YoY. The QoQ increase was mainly due to the increase in number of checking accounts and the lower impact in the quarter from the temporary waiving of fees in some of the more affected areas by the earthquake. The YoY decline was mainly due to regulatory changes that prohibited fees charged for unauthorized overdrafts as of April 2009.

Investor Relations Department	11
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

Fees from asset management increased 4.2% QoQ and 21.2% YoY. Equity funds, which generate higher management fees, continued to expand in the quarter driving fee income. However, total assets under management decreased 5.9% QoQ 4.9% YoY. The fall was mainly due to negative mark-to-market effects on fixed income funds as short-term interest rates increased and the appreciation of the peso against the dollar which negatively affected fixed income-dollar funds.

Fees from insurance brokerage decreased 3.1% QoQ and increased 105.7% YoY. The Bank’s success in selling insurance online, coupled with an increase in premiums on behalf of insurance underwriters has driven insurance brokerage fees. The Bank’s success in selling insurance online, coupled with a greater demand for insurance in general has driven insurance brokerage fees. Fees from the brokerage grew 14.3% QoQ and 36.1% YoY. These fees were driven by the Bank’s new internet platform for stock trading and a greater demand for investing in the local stock market.

OPERATING EXPENSES AND EFFICIENCY

The efficiency ratio reaches 33.8% in 3Q10 compared to 35.2% in 2Q10

Operating Expenses	Quarter									Change %
(Ch$ million)	3Q10			2Q10			3Q09			3Q10 / 3Q09			3Q / 2Q 10
Personnel expenses		(63,330	)		(66,002	)		(55,751	)		13.6	%		(4.0	)%
Administrative expenses		(37,983	)		(35,707	)		(34,955	)		8.7	%		6.4	%
Depreciation and amortization		(11,294	)		(12,592	)		(12,069	)		(6.4	)%		(10.3	)%
Impairment		(963	)		(3,686	)		0			—	%		(73.9	)%
Operating expenses		(113,570	)		(117,987	)		(102,775	)		10.5	%		(3.7	)%
Efficiency ratio1		33.8	%		35.2	%		32.6	%

1	Operating expenses / Operating income. Operating income = Net interest income + Net fee income+ Financial transactions net + other operating income and expenses.

Operating expenses in 3Q10 decreased 3.7% QoQ and increased 10.5% YoY. The efficiency ratio reached 33.8% in the same period compared to 35.2% in 2Q10. The QoQ decrease in costs was mainly due to lower costs from the earthquake and lower personnel expenses. Headcount did not vary significantly in the quarter. The 6.4% QoQ increase in administrative expenses was mainly due to higher costs related to the maintenance and repair of branches and other fixed assets.

The YoY rise in costs was mainly due to a rise in personnel expenses that is directly related to an increase in commercial activity and as a result variable incentives to commercial teams have increased, especially in retail banking. This should be compensated in future quarters with stronger revenue growth. The YoY increase in administrative expenses was mainly due to higher costs related to the maintenance and repair of branches and other fixed assets which was mainly due to the earthquake. In total in 2010, the impact of the earthquake on administrative expenses was Ch$4.4 billion. The higher inflation also fueled administrative cost growth as 2/3 of administrative expenses are linked to inflation.

Investor Relations Department	12
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

NET RESULTS FROM FINANCIAL TRANSACTIONS

Positive results from client treasury activities in the quarter

Net Results from Financial Transactions*	Quarter									Change %
(Ch$ million)	3Q10			2Q10			3Q09			3Q10 / 3Q09			3Q / 2Q 10
Net gains from mark-to-market and trading		(45,068	)		44,922			51,447			(187.6	)%		(200.3	)%
Exchange differences, net		66,781			(19,881	)		(19,937	)		(435.0	)%		(435.9	)%
Net results from financial transactions		21,713			25,041			31,510			(31.1	)%		(13.3	)%

These results mainly include the mark-to-market of the available for sale investment portfolio, realized and unrealized gains of financial investments held for trading, the interest revenue generated by the held for trading portfolio, gains or losses from the sale of charged-off loans and the mark-to-market of derivatives. The results recorded as Exchange differences, net mainly includes the translation gains or losses of assets and a liability denominated in foreign currency.

Net results from financial transactions, which include the sum of the net gains from mark-to-market and trading and exchange differences, net totaled a gain of Ch$21,713 million in 3Q10. In order to better understand this line item, we present them by business area in the table below.

Net Results from Financial Transactions	Quarter							Change %
(Ch$ million)	3Q10		2Q10			3Q09		3Q10 / 3Q09			3Q / 2Q 10
Santander Global Connect 1 & Market making 2		21,568		26,169			15,322		40.8	%		(17.6	)%
Financial Management (ALCO) & Prop. trading		145		(1,128	)		16,188		(99.1	)%		(112.9	)%
Net results from financial transactions		21,713		25,041			31,510		(31.1	)%		(13.3	)%

1.	Santander Global Connect is the Bank’s commercial platform for selling treasury products to our clients.

2.	This line item also includes the gain or loss from the sale of charged-off loans.

The 13.3% QoQ and 31.1% YoY decrease in this line item was mainly due lower results from Financial Management Division and the Bank’s proprietary trading business, which were negatively affected by the rising rate environment. This was partially offset by the Ch$21,568 million gain from the Bank’s treasury services to companies through the Santander Global Connect platform that increased 40.8% YoY.

Investor Relations Department	13
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

OTHER INCOME AND EXPENSES

Other Income and Expenses	Quarter									Change %
(Ch$ million)	3Q10			2Q10			3Q09			3Q10 / 3Q09			3Q / 2Q 10
Other operating income		34,560			19,951			3,219			973.6	%		73.2	%
Other operating expenses		(22,075	)		(17,648	)		(1,922	)		1048.5	%		25.1	%
Other operating income, net		12,485			2,303			1,297			862.6	%		442.1	%
Provision reversal for contingent loans1		(25,716	)		—			—
Adjusted Other operating income, net1		(13,231	)		2,303			1,297			—	%		—	%
Income attributable to investments in other companies		832			223			97			757.7	%		273.1	%
Income tax		(14,109	)		(24,163	)		(22,439	)		(37.1	)%		(41.6	)%
Income tax rate		10.0	%		15.0	%		16.9	%

1.	Excludes provision reversal for contingent loans, which is included in Other operating income in 3Q10 (See Provision Expense).

Other operating income, net, adjusted for the reversal of provisions for contingent loans, which for purposes of analyses, we included in provision expense, totaled a loss of Ch$13,231 million in the quarter. As previously mentioned in the Provision Expense section, the Bank adjusted the minimum provision levels that are set aside for the unused portion of credit card lines for clients that use their card for transactional and not credit purposes. This signified a reversal of Ch$25,716 million recognized as Other operating income.

Excluding this effect, the net loss recognized in other operating income in 3Q10 was mainly due to higher charge-offs of repossessed assets mainly linked to a single repossessed asset in the agriculture sector.

Income tax decreased 41.6% QoQ and 37.1% YoY. The statutory corporate tax rate in Chile will rise to 20% in 2011 and gradually return to 17% in 2013 as a part of the government’s plan to finance the earthquake reconstruction efforts. As a result of these changes, the Bank had to apply these rates over deferred taxes. The application of the new corporate tax rates over deferred taxes, resulted in a higher net asset position in differed taxes and therefore a lower effective tax rate in 3Q10.

Investor Relations Department	14
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

SECTION 4: CREDIT RISK RATINGS

International ratings

The Bank has credit ratings from three leading international agencies. All of our ratings are assigned a stable outlook. Fitch upgraded the Bank’s foreign currency deposit rating in October 2010.

Moody’s		Rating
Foreign currency bank deposits		Aa3
Senior bonds		Aa3
Subordinated debt		A1
Bank Deposits in Local Currency		Aa3
Bank financial strength		B-
Short-term deposits		P-1

Standard and Poor’s		Rating
Long-term Foreign Issuer Credit		A+
Long-term Local Issuer Credit		A+
Short-term Foreign Issuer Credit		A-1
Short-term Local Issuer Credit		A-1

Fitch		Rating
Foreign Currency Long-term Debt		AA-
Local Currency Long-term Debt		AA-
Foreign Currency Short-term Debt		F1+
Local Currency Short-term Debt		F1+
Individual rating		B

Local ratings:

Our local ratings, the highest in Chile, are the following:

Local ratings	Fitch Ratings	Feller Rate
Shares	Level 2	1CN1
Short-term deposits	N1+	Level 1+
Long-term deposits	AAA	AAA
Mortgage finance bonds	AAA	AAA
Senior bonds	AAA	AAA
Subordinated bonds	AA	AA+
Outlook	Stable	Stable

Investor Relations Department	15
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

SECTION 5: SHARE PERFORMANCE

As of September 2010

Ownership Structure:

ADR price (US$) 2010
09/30/10:	96.55
Maximum (2010):	99.44
Minimum (2010):	59.40

Market Capitalization: US$17,512 million

P/E 12 month trailing*:	15.2
P/BV (06/30/10)**:	4.83
Dividend yield***:	3.9	%

*	Price as of Sept. 30 / 12mth Earnings

**	Price as of Sept. 30 / Book value as of 09/30/10

***	Based on closing price on record date of last dividend payment.

Average daily traded volumes YTD 2010

US$ million

Local share price (Ch$) 2010
09/30/10:			45.06
Maximum (2010):			47.37
Minimum (2010):			31.03

Dividends:

			% of previous year
Year paid	Ch$/share		earnings
2006:		0.83		65	%
2007:		0.99		65	%
2008:		1.06		65	%
2009:		1.13		65	%
2010:		1.37		60	%

Investor Relations Department	16
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

SECTION 6: INSTITUTIONAL BACKGROUND

Institutional Background

As per the latest public records published by the Superintendency of Banks of Chile for September 2010, Banco Santander Chile was the largest bank in terms of loans and equity. The Bank has the highest credit ratings among all Latin American companies, with an A+ rating from Standard and Poor’s and Aa3 by Moody’s, which are the same ratings assigned to the Republic of Chile, and AA- by Fitch which pierces the sovereign ceiling. The stock is traded on the New York Stock Exchange (NYSE: SAN) and the Santiago Stock Exchange (SSE: Bsantander). The Bank’s main shareholder is Santander, which controls 76.91% of Banco Santander Chile.

For more information see www.santander.cl

Banco Santander (SAN.MC, STD.N) is a retail and commercial bank, based in Spain. Santander has more than 90 million customers, 13,660 branches – more than any other international bank – and 169,460 employees around the world. It is the largest financial group in Spain and Latin America, with leading positions in the United Kingdom and Portugal and a broad presence in Europe through its Santander Consumer Finance arm. In 2009, Santander registered EUR 8,943 million in net attributable profit. Banco Santander’s eligible capital at the close of the third quarter came to EUR 79,704 million, with a surplus of EUR 34,769 million above the required regulatory minimum. With this capital base, the BIS ratio, using Basel II criteria, comes to 14.2%, Tier I to 10.1% and core capital 8.6%. These ratios place Santander among the most solvent banks in the world.

For more information see www.santander.com

Investor Relations Department	17
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

ANNEX 1: BALANCE SHEET

Unaudited Balance Sheet	Sep-10			Sep-10			Jun-10			Sep-09			Sept. 10/09			Sept. 10 / Jun. 10
	US$ths			Ch$mn									% Chg.

Assets
Cash and balances from Central Bank		3,148,117			1,522,587			1,398,881			906,871			67.9	%		8.8	%
Funds to be cleared		1,003,333			485,262			486,914			405,829			19.6	%		(0.3	)%
Financial assets held for trading		821,549			397,342			812,454			733,319			(45.8	)%		(51.1	)%
Investment collateral under agreements to repurchase		134,384			64,995			5,000			16,086			304.0	%		1199.9	%
Derivatives		3,424,729			1,656,370			1,531,224			1,428,496			16.0	%		8.2	%
Interbank loans		149,248			72,184			41,437			56,674			27.4	%		74.2	%
Loans, net of reserves for loan losses		30,607,228			14,803,186			14,194,842			13,245,608			11.8	%		4.3	%
Available-for-sale financial assets		3,310,297			1,601,025			1,341,296			1,903,217			(15.9	)%		19.4	%
Held-to-maturity investments		-			-			-			-			—	%		—	%
Investments in other companies		15,096			7,301			6,502			7,184			1.6	%		12.3	%
Intangible assets		144,681			69,975			71,074			64,858			7.9	%		(1.5	)%
Fixed assets		331,717			160,435			163,184			186,763			(14.1	)%		(1.7	)%
Current tax assets		12,298			5,948			5,464			4,519			31.6	%		8.9	%
Deferred tax assets		285,243			137,958			111,938			105,422			30.9	%		23.2	%
Other assets		1,350,739			653,285			595,246			541,467			20.7	%		9.8	%
Total Assets		44,738,660			21,637,853			20,765,456			19,606,313			10.4	%		4.2	%

Liabilities and Equity
Demand deposits		8,253,348			3,991,732			4,168,884			3,152,739			26.6	%		(4.2	)%
Funds to be cleared		881,739			426,453			303,207			254,983			67.2	%		40.6	%
Investments sold under agreements to repurchase		310,059			149,960			146,098			807,034			(81.4	)%		2.6	%
Time deposits and savings accounts		14,794,196			7,155,213			7,193,376			7,456,731			(4.0	)%		(0.5	)%
Derivatives		3,416,096			1,652,195			1,250,547			1,318,230			25.3	%		32.1	%
Deposits from credit institutions		3,572,834			1,728,001			2,100,234			1,741,380			(0.8	)%		(17.7	)%
Marketable debt securities		8,227,950			3,979,448			3,245,162			2,717,508			46.4	%		22.6	%
Other obligations		339,510			164,204			158,089			145,925			12.5	%		3.9	%
Current tax liabilities		58,900			28,487			21,656			60,503			(52.9	)%		31.5	%
Deferred tax liability		8,047			3,892			2,672			2,149			81.1	%		45.7	%
Provisions		424,387			205,255			191,001			151,724			35.3	%		7.5	%
Other liabilities		756,899			366,074			290,744			211,372			73.2	%		25.9	%
Total Liabilities		41,043,966			19,850,914			19,071,670			18,020,278			10.2	%		4.1	%

Equity
Capital		1,842,868			891,303			891,303			891,303			0.0	%		0.0	%
Reserves		106,563			51,539			51,539			(16,960	)		—	%		0.0	%
Unrealized gain (loss) Available-for-sale financial assets		(28,798	)		(13,928	)		(18,193	)		(33,001	)		(57.8	)%		(23.4	)%
Retained Earnings:		1,712,863			828,426			740,677			713,806			16.1	%		11.8	%
Retained earnings previous periods		1,158,127			560,128			560,128			508,045			10.3	%		0.0	%
Net income		792,480			383,283			257,927			293,944			30.4	%		48.6	%
Provision for mandatory dividend		(237,744	)		(114,985	)		(77,378	)		(88,183	)		30.4	%		48.6	%
Total Shareholders' Equity		3,633,495			1,757,340			1,665,326			1,555,148			13.0	%		5.5	%
Minority Interest		61,199			29,599			28,460			30,887			(4.2	)%		4.0	%
Total Equity		3,694,695			1,786,939			1,693,786			1,586,035			12.7	%		5.5	%
Total Liabilities and Equity		44,738,660			21,637,853			20,765,456			19,606,313			10.4	%		4.2	%

Investor Relations Department	18
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

ANNEX 2: YTD INCOME STATEMENT

YTD Income Statement Unaudited	Sep-10			Sep-10			Sep-09			Sept. 10/09
	US$ths.			Ch$ million						% Chg.

Interest revenue		2,161,898			1,045,602			865,415			20.8	%
Interest expense		(698,331	)		(337,748	)		(234,278	)		44.2	%
Net interest income		1,463,567			707,854			631,137			12.2	%
Fee income		511,415			247,346			235,424			5.1	%
Fee expense		(110,412	)		(53,401	)		(45,892	)		16.4	%
Net fee income		401,003			193,945			189,532			2.3	%
Net gains from mark-to-market and trading		107,404			51,946			52,013			(0.1	)%
Exchange differences, net		50,410			24,381			77,968			(68.7	)%
Financial transactions, net		157,815			76,327			129,981			(41.3	)%
Other operating income		125,248			60,576			8,645			600.7	%
Total operating income		2,147,632			1,038,702			959,295			8.3	%
Provision expense		(431,771	)		(208,826	)		(266,093	)		(21.5	)%
Total operating income net of provisions		1,715,861			829,876			693,202			19.7	%
Personnel expenses		(382,345	)		(184,921	)		(167,846	)		10.2	%
Administrative expenses		(226,906	)		(109,743	)		(102,661	)		6.9	%
Depreciation and amortization		(74,903	)		(36,227	)		(34,655	)		4.5	%
Impairment		(9,645	)		(4,665	)		0			—	%
Operating expenses		(693,799	)		(335,556	)		(305,162	)		10.0	%
Other operating expenses		(108,093	)		(52,279	)		(29,632	)		76.4	%
Total operating expenses		(801,892	)		(387,835	)		(334,794	)		15.8	%
Net operating income		913,969			442,041			358,408			23.3	%
Income attributable to investments in other companies		2,429			1,175			863			36.2	%
Net income before taxes		916,398			443,216			359,271			23.4	%
Income tax		(124,123	)		(60,032	)		(60,514	)		(0.8	)%
Net income from ordinary activities		792,275			383,184			298,757			28.3	%
Net income discontinued operations		0			0			0			—	%
Net income attributable to:
Minority interest		(205	)		(99	)		4,813			—	%
Net income attributable to shareholders		792,480			383,283			293,944			30.4	%

Investor Relations Department	19
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

ANNEX 3 : QUARTERLY INCOME STATEMENTS

Unaudited Quarterly Income Statement	3Q10			3Q10			2Q10			3Q09			3Q10 / 3Q09			3Q / 2Q 10
	US$ths.			Ch$mn									% Chg.
Interest revenue		734,922			355,445			368,919			279,880			27.0	%		(3.7	)%
Interest expense		(247,640	)		(119,771	)		(126,137	)		(62,627	)		91.2	%		(5.0	)%
Net interest income		487,282			235,674			242,782			217,253			8.5	%		(2.9	)%
Fee income		176,531			85,379			82,808			79,584			7.3	%		3.1	%
Fee expense		(39,167	)		(18,943	)		(17,650	)		(14,828	)		27.8	%		7.3	%
Net fee income		137,364			66,436			65,158			64,756			2.6	%		2.0	%
Net gains from mark-to-market and trading		(93,183	)		(45,068	)		44,922			51,447			—	%		—	%
Exchange differences, net		138,077			66,781			(19,881	)		(19,937	)		—	%		—	%
Total financial transactions, net		44,894			21,713			25,041			31,510			(31.1	)%		(13.3	)%
Other operating income, net		71,457			34,560			19,951			3,219			973.6	%		73.2	%
Total operating income		740,997			358,383			352,932			316,738			13.1	%		1.5	%
Provision expense		(170,965	)		(82,687	)		(55,952	)		(79,122	)		4.5	%		47.8	%
Total operating income net of provisions		570,032			275,696			296,980			237,616			16.0	%		(7.2	)%
Personnel expenses		(130,942	)		(63,330	)		(66,002	)		(55,751	)		13.6	%		(4.0	)%
Administrative expenses		268,126			(37,983	)		(35,707	)		(34,955	)		8.7	%		6.4	%
Depreciation and amortization		(23,352	)		(11,294	)		(12,592	)		(12,069	)		(6.4	)%		(10.3	)%
Impairment		(1,991	)		(963	)		(3,686	)		0			—	%		(73.9	)%
Operating expenses		(234,819	)		(113,570	)		(117,987	)		(102,775	)		10.5	%		(3.7	)%
Other operating expenses		(45,643	)		(22,075	)		(17,648	)		(1,922	)		1048.5	%		25.1	%
Total operating expenses		(280,461	)		(135,645	)		(135,635	)		(104,697	)		29.6	%		0.0	%
Net operating income		289,571			140,051			161,345			132,919			5.4	%		(13.2	)%
Income attributable to investments in other companies		1,720			832			223			97			757.7	%		273.1	%
Net income before taxes		291,291			140,883			161,568			133,016			5.9	%		(12.8	)%
Income tax		(29,172	)		(14,109	)		(24,163	)		(22,439	)		(37.1	)%		(41.6	)%
Net income from ordinary activities		262,119			126,774			137,405			110,577			14.6	%		(7.7	)%
Net income discontinued operations		0			0			0			0
Net income attributable to:
Minority interest		2,932			1,418			(1,418	)		676			109.8	%		—	%
Net income attributable to shareholders		259,187			125,356			138,823			109,901			14.1	%		-9.7	%

Investor Relations Department	20
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

ANNEX 4: QUARTERLY EVOLUTION OF MAIN RATIOS AND OTHER INFORMATION

	Mar-09			Jun-09			Sep-09			Dec-09			Mar-10			Jun-10			Sep-10
(Ch$ millions)
Loans
Consumer loans		2,187,832			2,121,045			2,155,200			2,244,035			2,303,983			2,404,128			2,554,884
Residential mortgage loans		3,927,343			3,970,896			4,033,091			4,159,052			4,219,733			4,360,496			4,498,799
Commercial loans		7,870,502			7,309,545			7,395,336			7,324,777			7,519,854			7,817,843			8,178,336
Total loans		13,985,677			13,401,486			13,583,627			13,727,864			14,043,570			14,582,467			15,232,019
Allowance for loan losses		(281,265	)		(314,191	)		(338,020	)		(349,485	)		(374,064	)		(387,624	)		(428,833	)
Total loans, net of allowances		13,704,412			13,087,295			13,245,607			13,378,379			13,669,506			14,194,843			14,803,186

Loans by segment
Individuals		6,782,663			6,815,737			6,980,092			7,287,296			7,411,686			7,715,031			8,035,617
SMEs		2,007,115			2,002,641			2,055,911			2,097,592			2,143,885			2,210,170			2,301,536
Total retail lending		8,789,778			8,818,378			9,036,003			9,384,888			9,555,571			9,925,201			10,337,153
Institutional lending		262,664			262,947			285,129			291,867			313,079			330,980			340,274
Middle-Market & Real estate		3,048,591			2,844,124			2,838,365			2,779,165			2,907,944			2,983,741			3,160,681
Corporate		1,903,951			1,505,737			1,449,001			1,266,310			1,279,965			1,347,855			1,406,210

Customer funds
Demand deposits		3,092,010			3,083,814			3,152,739			3,533,534			3,890,230			4,168,884			3,991,732
Time deposits		8,677,857			8,342,396			7,456,731			7,175,257			6,818,939			7,193,376			7,155,213
Total deposits		11,769,867			11,426,210			10,609,470			10,708,791			10,709,169			11,362,260			11,146,945
Mutual funds (Off balance sheet)		3,085,227			3,342,860			3,476,457			3,427,829			3,635,544			3,510,479			3,304,767
Total customer funds		14,855,094			14,769,070			14,085,927			14,136,620			14,344,713			14,872,739			14,451,712
Loans / Deposits1		96.5	%		94.3	%		102.4	%		100.9	%		104.3	%		99.8	%		100.9	%

Average balances
Avg. interest earning assets		15,742,285			15,147,554			15,184,842			15,562,696			15,776,237			15,816,902			16,463,951
Avg. loans		14,312,882			13,733,919			13,479,883			13,647,750			13,879,173			14,291,144			14,874,816
Avg. assets		20,491,544			19,719,613			19,384,473			20,123,590			20,738,402			20,742,244			20,915,047
Avg. demand deposits		2,952,461			3,087,754			3,079,230			3,278,373			3,678,104			4,107,978			4,005,565
Avg equity		1,517,710			1,495,755			1,528,506			1,608,510			1,665,977			1,644,453			1,712,967
Avg. free funds		4,470,170			4,583,509			4,607,736			4,886,883			5,344,081			5,752,431			5,718,532

Capitalization
Risk weighted assets		13,979,591			13,544,319			13,918,058			14,202,118			15,513,732			16,210,259			16,739,710
Tier I (Shareholders' equity)		1,543,039			1,497,019			1,555,148			1,658,316			1,683,103			1,665,326			1,757,340
Tier II		560,232			535,978			563,856			555,776			599,353			627,608			672,740
Regulatory capital		2,103,271			2,032,997			2,119,004			2,214,092			2,282,455			2,292,934			2,430,080
Tier I ratio		11.0	%		11.1	%		11.2	%		11.7	%		10.8	%		10.3	%		10.5	%
BIS ratio		15.0	%		15.0	%		15.2	%		15.6	%		14.7	%		14.1	%		14.5	%

Profitability & Efficiency
Net interest margin		4.8	%		6.0	%		5.7	%		5.8	%		5.8	%		6.1	%		5.7	%
Efficiency ratio		34.5	%		31.5	%		32.6	%		30.5	%		33.0	%		35.2	%		33.8	%
Avg. Free funds / interest earning assets		28.4	%		30.3	%		30.3	%		31.4	%		33.9	%		36.4	%		34.7	%
Return on avg. equity		20.2	%		28.7	%		28.8	%		34.1	%		28.6	%		33.8	%		29.3	%
Return on avg. assets		1.5	%		2.2	%		2.3	%		2.7	%		2.3	%		2.7	%		2.4	%

Investor Relations Department	21
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl

	Mar-09			Jun-09			Sep-09			Dec-09			Mar-10			Jun-10			Sep-10
Asset quality
Non-performing loans (NPLs)2		392,802			415,311			383,172			409,067			385,211			415,556			407,831
Expected loss4		281,265			314,191			338,020			349,485			374,064			387,624			428,833
NPLs / total loans		2.81	%		3.10	%		2.82	%		2.98	%		2.74	%		2.85	%		2.68	%
Coverage of NPLs (Loan loss allowance / NPLs)		71.60	%		75.65	%		88.22	%		85.43	%		97.11	%		93.28	%		105.15	%
Expected loss (Loan loss allowances / Loans)		2.01	%		2.34	%		2.49	%		2.55	%		2.66	%		2.66	%		2.82	%
Cost of credit (prov. expense / loans)		2.60	%		2.87	%		2.33	%		1.97	%		2.00	%		1.53	%		2.17	%

Network
Branches		500			501			502			498			498			499			500
ATMs		1,929			1,929			1,991			1,917			1,856			1,871			1,914
Employees		11,578			11,391			11,280			11,204			11,155			11,133			11,049

Market information (period-end)
Net income per share (Ch$)		0.41			0.57			0.58			0.73			0.63			0.74			0.67
Net income per ADR (US$)		0.73			1.12			1.11			1.49			1.25			1.41			1.42
Stock price		19.1			23.9			30.4			30.7			34.4			35.7			45.1
ADR price		34.4			46.7			57.5			64.8			68.2			67.1			96.6
Market capitalization (US$mn)		6,230			8,468			10,436			11,749			12,373			12,168			17,512
Shares outstanding		188,446.1			188,446.1			188,446.1			188,446.1			188,446.1			188,446.1			188,446.1
ADRs (1 ADR = 1,039 shares)		181.4			181.4			181.4			181.4			181.4			181.4			181.4

Other Data
Quarterly inflation rate5		(2.30	)%		(0.13	)%		(0.47	)%		0.52	%		0.27	%		0.97	%		0.65	%
Avg. overnight interbank rate (nominal)		5.49	%		1.40	%		0.46	%		0.43	%		0.40	%		0.51	%		1.76	%
Avg. 10 year Central Bank yield (real)		2.60	%		2.86	%		2.88	%		3.09	%		3.14	%		3.04	%		2.82	%
Avg. 10 year Central Bank yield (nominal)		5.09	%		5.63	%		5.70	%		6.13	%		6.41	%		6.42	%		6.07	%
Observed Exchange rate (Ch$/US$) (period-end)		582.1			529.07			546.07			506.43			526.29			543.09			485.23

1 Ratio = Loans - marketable securities / Time deposits + demand deposits

2 Capital + future interest of all loans with one installment 90 days or more overdue.

3 Total installments plus lines of credit more than 90 days overdue

4 Based on internal credit models and SBIF guidelines. Banks must have a 100% coverage of expected loss

5 Calculated using the variation of the Unidad de Fomento (UF) in the period

Investor Relations Department	22
Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santander.cl