Best bank:
Banco Santander-Chile
Best debt house:
Citigroup/Salomon Smith Barney
Best equity house:
Deutsche Bank
Best M&A house:
JPMorgan
Banco Santander-Chile is not Chile’s largest bank in terms of assets, loans or equity (although it is the largest in terms of deposits). But when it comes to efficiency, it is unrivalled. Its pre-tax net income of $163 million in 2000 was higher than any other bank’s, and in fact accounts for 21% of all operating profits in the Chilean banking system.
Santander-Chile comes out number one in terms of the other standard ratios, posting a very impressive 28.7% return on equity in 2000, and a cost-to-income ratio of 49.6%. The return on equity is the third highest in Latin America, after Safra and Banco Itaú in Brazil, and the efficiency ratio is the best in the region.
And although much of the banking world is concentrating increasingly on corporates and high-net-worth indivi-duals, Santander-Chile has struck a goldmine with Banefe, its wholly owned subsidiary targeted at individuals earning less than $800 a month. Banefe has more than half a million customers, who are very grateful for access to capital, and have proved surprisingly creditworthy. Banefe’s return on equity exceeded 50% last year.
BSCH also does well in Chile’s debt markets, where it comes second on the the league table for the past year. Citigroup/Salomon Smith Barney has a comfortable first place, however, with six deals worth $746 million – a market share of more than 35%.
Citigroup has a solid presence in domestic bond issuance, bookrunning four deals over the past year, including the largest of them all, a $462 million deal for Transelec Chile.
In equities, Deutsche Bank is by far the largest local broker: its 21% share of volume on the Santiago stock exchange was almost twice that of second-ranked Celfin, and rose to a stunning 57% in December. Chile has seen very little in the way of IPOs, but Deutsche did do the last one, which was back in 1997. Deutsche has also been involved in three of the seven tender offers seen in the past 12 months.
Deutsche also has a reasonably impressive list of M&A deals in Chile to its name, with five deals worth $2 billion. That’s only worth fourth place in a crowded field, however, which is won by JPMorgan, with nine deals worth $2.4 billion. UBS Warburg and Salomon Smith Barney are numbers two and three on the list, respectively. Among JPMorgan’s deals is the $1 billion acquisition of 29% of telecommunications company Entel by Telecom Italia, giving the Italian company a controlling 55% stake.
