29 October 2009

Chilean Banks’ Combined Profit Rises 7% in September

By Nathan Gill
Oct. 29 (Bloomberg) -- Chilean banks’ combined profit increased 7 percent in September from the previous month after demand for lending rose amid signs of an economic recovery.

Net income in the nine months through September was 849 billion pesos ($1.6 billion), Chile’s banking regulator, known as the SBIF, wrote in an e-mailed report today. It didn’t give the separate monthly figure. September profit was 110 billion pesos, according to Bloomberg calculations.

Consumer loans, mortgages and credit card lending rose 1 percent, while bad loan provisions fell 14 percent, the regulator wrote. The economy probably grew in September from a year earlier, President Michelle Bachelet said last night, according to newspaper El Mercurio. That’s in line with Banchile Inversiones’ projection that the worst recession in at least a decade ended in the third quarter.

“What we are seeing in September, and in the month before, is that lending in the system is beginning to grow,” German Serrano, an analyst at Banchile said today in a telephone interview. “Banks are beginning to improve their credit offers, supported by the normalization of their portfolio risk. This is good for the system.”

Banco Santander Chile, the country’s biggest lender, reported nine-month net profit of 294 billion pesos, the SBIF wrote. Banco de Chile, the second-largest lender, reported net income of 191.2 billion pesos, according to the report.

“You can see banks have the capacity to lend without going into debt,” Serrano said. “They have the capital to grow.”