BANCO SANTANDER-CHILE (BSAC): what the price requires
At today's price, BANCO SANTANDER-CHILE (BSAC) is priced for 17.2% return on equity. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Exported: 2026-07-20 · Source: https://boothcheck.com/report/BSAC
Headline
| Field | Value |
|---|---|
| Ticker | BSAC |
| Company | BANCO SANTANDER-CHILE |
| Sector / Industry | Financial Services / Banks—Regional |
| Current price | $32.87/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | financials |
| Elite ROE must persist for | 26.9y before normalizing (held at the 16.2% elite tier) |
| Perpetuity-equivalent ROE | 17.2% |
| Return on equity now | 18.2% |
| ROE gap | -1.0pp |
| Price-to-book | 2.50x |
Solve inputs: computed at a 9.3% cost of equity; ROE searched up to the 16.2% ROE ceiling; each 1pp moves the implied horizon ~8.5 years.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.66σ |
| cohort percentile (of 120 peers) | 94 |
| sustained it ~10 years at this level | 55% |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.28x | 3 | expensive |
| Earnings | 1.00x | 2 | justifies |
| Relative | 1.20x | 3 | expensive |
| Growth | 1.15x | 2 | expensive |
Families that justify the price: Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.3%); the inversion above states its own rate.
Per-Model Detail (n=10)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| Bank Fair Value (P/TBV) | — | $39.49 | 0.83x | yes | TBVPS $12.82 × 3.08x (ROE (TTM) 18.1% / CoE 9.3%, g=5.0% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption)) |
| Relative Valuation | Relative | $25.10 | 1.31x | yes | P/E 10x (static sector reference · 2026-04), scenarios: 8.4x / 10.0x / 11.6x (bear / base = reference held flat / bull), EV/EBITDA N/Ax |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $29.83 | 1.10x | yes | Stage 1: 8% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $25.07 | 1.31x | yes | BV/sh $12.82, ROE (TTM) 18.1%, ke 9.3% |
| Two-Stage Excess Return | Asset | $34.63 | 0.95x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $27.65 | 1.19x | yes | Rev $4.0B, growth 8% (input: historical growth; tapered), Terminal P/S: 3.2x / 3.9x / 4.5x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $27.39 | 1.20x | yes | EPS $2.28, growth 8% (input: historical EPS growth), PEG=1.68 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | $25.66 | 1.28x | yes | √(22.5 × EPS $2.28 × BVPS $12.82) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | — |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $48.59 | 0.68x | yes | EPS $2.28 × (8.5 + 2×8.4%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | — | — | no | — |
| PEG Fair Value | Relative | $28.93 | 1.14x | yes | EPS $2.28 × (PEG 1.5 × growth 8.4% (input: historical EPS growth)) → PE 12.7x |
| Earnings Yield | Earnings | $24.68 | 1.33x | yes | EPS $2.28 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Share count CAGR (dilution) | 0.0% |
Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).
Bullet Takeaways
- Chile's largest lender by loan book, holding 16.7% of the system's loans per its FY2025 20-F, and it earns a return on equity around 18%, near the top of what large banks anywhere produce.
- The price pays about 2.5x book for those returns, the very top of the peer group, and of banks that have earned at this level, only about 55% were still doing so a decade on.
- Watch the margin path as Chilean rates and inflation move: the bank's own filing says rising short-term rates work against its interest margin, and the Q2 2026 results landed July 10.
Bull Case
Scale is the moat, and in Chile it is a concentrated kind of scale. The FY2025 20-F states it plainly: "our loan portfolio was the largest among Chilean banks", and that portfolio "represented 16.7% of the market for loans in the Chilean financial system". In a banking system that size, being the biggest buys things smaller rivals cannot easily replicate: the cheapest deposit funding, the densest distribution, and first call on the country's corporate and consumer credit demand. The profit engine underneath converts a 27.4% net margin on revenue into about $1.1B of trailing annual profit, with the asset base working harder each year.
The bank's return on equity runs about 18%. For context against the strongest franchises anywhere: JPMorgan earned a 15.7% return on equity in 2025 with a 55% efficiency ratio, while Bank of America and Wells Fargo ran efficiency ratios of 61.3% and 65.5%. Those are context rather than direct comparables, since a Chilean bank answers to a different economy and regulator, but the point survives the caveat: Santander-Chile generates returns above what the best US megabanks produce. The recent trajectory is stronger still. The bank reported a 23.0% return on average equity and a 3.8% net interest margin for the first quarter, and its monthly unaudited filings through May continued to show strong results.
The capital story matches the earnings story. The share count has been flat over the last four years, so nothing is leaking out through dilution, and the dividend is growing, running at about $1.34 a share annually, roughly a 4% yield. Elite returns invite competition, and Chile is getting new digital entrants, but the challengers are starting from zero against an incumbent that owns the largest loan book in the system and funds itself accordingly. A subscale digital bank can win accounts; taking share of profitable lending from the system's largest balance sheet is a slower, harder fight.
Bear Case
Start with what a bank actually is: a thin slice of equity under a large pile of assets. Santander-Chile runs an equity multiplier near 11.9, which is ordinary for the industry and is precisely the fragility. At that leverage, small moves in spread or credit quality swing equity returns hard, and this particular spread is a macro hostage. The bank's own FY2025 20-F spells out the mechanism: "when short-term interest rates fall, our net interest margin is positively impacted, but when short-term rates increase, our interest margin is negatively affected", and much of the balance sheet is denominated in inflation-linked UF, so the margin also breathes with Chilean inflation. Low inflation is currently working against that inflation-linked income.
Now the price itself. At $32.87 the market pays about 2.5x book, the very top of the peer group, and that multiple only makes sense if returns on equity around 17.4% persist more or less in perpetuity, roughly 28 years at elite levels before any normalization. The bank earns about 18.2% today, so the requirement is within reach right now. If the return the bet needs does not materialize, the price-to-book it supports compresses, and from 2.5x book the distance down is long. The persistence odds are the real issue here: of banks that have earned at this level, only about 55% were still earning at that level a decade later. Returns fading toward a 9.4% cost of equity is not a disaster scenario for the business; it is the ordinary gravity of banking, and at this valuation it is the shareholder who absorbs it.
The erosion paths are already named in the filing. On competition: "Tanner Digital Bank began its operations as a new bank in Chile servicing SMEs and Tenpo, a digital consumer bank, is expected to begin operating in 2026", on top of department stores, credit unions and cajas competing in consumer credit. On credit quality, the 20-F notes that past rate rises have "resulted in increased in delinquencies in outstanding loans and deterioration in the quality of assets". And all of it sits inside one economy: this is a single-country bank, so Chilean growth, Chilean unemployment and Chilean politics are the balance sheet, with no second geography to lean on when the cycle turns.
Valuation
At $32.87 (July 19, 2026), the market is paying a price-to-book multiple of about 2.5x for this bank. A bank is worth the return it earns on its capital, so the cleanest way to read the price is backward: it assumes Santander-Chile keeps earning a return on equity of roughly 17.4% essentially in perpetuity, equivalent to holding elite-tier returns for something like 28 years before they normalize. Against what the bank has shown, that is not an outlandish ask; it earns about 18.2% now, and the assumption sits within the range of its own record. The stretch is not the level. It is the duration.
The methods we use to triangulate mostly agree with the price, which is itself informative. The earnings-power lens lands essentially at the price. The peer multiple and growth lenses read the price at about 1.2x what they support, and book value plus profitability reads it near 1.3x, meaning the price runs modestly ahead of what the static balance-sheet view supports. That is the pattern of a value-supported name rather than a growth bet: no family is miles from the price, and the premium that does exist is concentrated against book value, which is exactly where a durability assumption shows up for a bank. The price-to-earnings ratio around 14 sits above the static sector reference of 10 used in the relative lens, consistent with the same top-of-peer-group read.
The balance-sheet frame for a bank is capital and payout, not net debt: deposits are funding, not corporate leverage. On that frame the picture is steady. The share count has been flat over the last four years, the dividend is growing at about $1.34 a share annually, and earnings comfortably fund the payout. What has to be true from here is narrow and specific: high-teens returns on equity, held across decades, in a single economy. The bank delivers that today; about 55% of comparable earners were still delivering a decade on.
Catalysts
The second-quarter 2026 results were published on July 10, 2026, following a first quarter in which the bank reported a 23.0% return on average equity and a 3.8% net interest margin. The monthly unaudited results filed through April and May continued to show strong earnings. The near-term watch items are the ones the bank itself flags: the path of Chilean short-term rates and inflation, which drive the margin on its UF-linked book, with low inflation currently a headwind to that income.
On the competitive calendar, the FY2025 20-F discloses that Tenpo, a digital consumer bank, is expected to begin operating in 2026, joining Tanner Digital Bank among the new entrants. Neither threatens the deposit franchise near term, but consumer credit is where new entrants discount first, so consumer margins and asset-quality trends in the coming quarterly prints are the earliest place any pressure would show.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- WF (Woori Financial Group Inc.)
- (no filing in the citation store)
- KB (KB Financial Group Inc.)
- (no filing in the citation store)
- BMO (BANK OF MONTREAL /CAN/)
- (no filing in the citation store)
- CFG (CITIZENS FINANCIAL GROUP INC/RI)
- (no filing in the citation store)
- PNC (PNC FINANCIAL SERVICES GROUP, INC.)
- (no filing in the citation store)
- USB (US BANCORP \DE\)
- (no filing in the citation store)
- WFC (WELLS FARGO & COMPANY/MN)
- (no filing in the citation store)
- TFC (TRUIST FINANCIAL CORP)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
JPMorgan, Bank of America and Wells Fargo FY2025 10-K filings · Q1 2026 earnings release, April 2026 · company 6-K filings, 2026 · company 6-K, 2026