Latin Finance - November/December 2010 - 51

Santander in October it launched an alliance with Apple in which it will o er customers the opportunity to buy iPads over 24 months interest-free. As the branch network increased 40% between 2005 and 2008, Santander did not expand its branch network signiﬁcantly in 2009, instead focusing on expanding telephone, mobile and internet banking. The bank plans to invest $400 million between 2010 and 2012 on branches and technology.

CHILE
Best Investment Bank – Celﬁn

A Broader Reach C

One Step Ahead

In the second half of 2009, Santander Chile foresaw an improvement in the

Santander’s Performance Versus Competitors (%)
Ahead on all counts ROE ROA Cost/Income NPLs NIM
Source: Santander Chile

Santander Chile 29.60 2.90 37.10 2.80 5.60

System 20.80 1.90 43.80 3.30 4.00

economic climate and so pre-approved $7 billion loans for clients, especially SMEs. “We had a strong advantage as we were ready for the economic upturn and customers saw us as helping to promote growth,” says Moreno. He adds that the volume of loans, in particular to SMEs and individuals, is expected to grow by 15% in 2010 and 2011. More than 80% of Santander Chile’s funds come from long-term institutional and retail deposits, with the remaining 20% coming from the long term bond market. Increasing the deposit base is a key focus. Santander will also focus more on increasing bank penetration in Chile. “There is huge potential here as a third of the working population has a bank account and less than 15% have a mortgage loan,” says Moreno. “The new range of products we will continue to o er will be a very cost e ective way of tapping into this potential client base,” he adds. LF

hile-based investment bank Celfín Capital has seized the boom in 2010 as an opportunity to push it into the big leagues. As of August, it was ranked as number 13 for investment banking fees in all of LatAm, raking in $24 million, according to Dealogic. A year earlier it did not even make the top 20. No other Chilean investment bank is on the charts, which takes into account fees earned from M&A, DCM, ECM and loans. Growth in fees should continue as Celfín expands throughout LatAm. This year, for instance, it expanded sales and research to Colombia and expects to open an o ce in New York in the near future, according to César Pérez, MD of strategy and economics. Celfín has had an o ce in Peru since 2008. Celfín is the top ranked locally-based M&A advisor in Chile, according to Dealogic. The shop worked on ﬁve M&A deals worth $2.3 billion in the year to October. Celfín comes fourth when foreign banks are considered. JPMorgan takes the number one spot with six deals worth $7.5 billion, while UBS takes second place with two transactions for $5.5 billion. BTG Pactual comes in third place with one deal worth $5.5 billion. Celfín is followed by Citi, which worked on ﬁve deals worth $2.1 billion and BMO Capital Markets, which had three deals worth $1.4 billion. Among the deals Celfín advised on were cross-border transactions like Peru-based Brescia Group’s acquisition of Lafarge’s Chilean assets for $555 million. That is the largest investment ever made by a Peruvian company in Chile, according to Celfín, which acted as the buyer’s ﬁnancial advisor. Most notably, Celfín was selected by Chile president Sebastián Piñera to handle a sale of assets ahead of his taking o ce. Piñera had promised during his campaign that he would divest a 26% stake in

airliner LAN held by his investment ﬁrms Axxion and Inversiones Santa Cecilia. By late March his stakes in the airline were sold on the Chilean stock exchange via a series of operations beginning in February, raising a total of $1.5 billion equivalent. The price Piñera obtained for his LAN stocks was rich, says BCI equity transportation analyst Christopher Baillarie, but had he waited a few more months he could have sold for more, as LAN’s stock exceeded 14,000 pesos a share by October from around 9,220 in March. However, waiting to sell could have brought on a huge political cost, as the divestiture was a campaign promise, Baillarie explains. Celfín is also top for ECM, according to Dealogic, having advised on 65% of equity deals in the year to October. It is followed by Larrain Vial with a 17% share and JPMorgan, also with 17%.

Bond Volume Slides

On the bond front, the amount of issuance done locally is not expected to surpass a record breaking $7.5 billion equivalent issued in 2009, says Gonzalo Ferrer, Celfín’s director of DCM and structured ﬁnance, adding that Celfín lead about 20% of the issues. But it is still expected to be active, generating $3-$4 billion volume in 2010, which Ferrer says is the average amount issued on an annual basis in Chile. “Last year we saw a record amount of issues because in the midst of the global ﬁnancial crisis many Chilean companies that usually go to international markets for ﬁnancing used the local market,” Ferrer explains. “Also, banks were not as aggressive on the lending front, so companies opted to issue bonds in lieu of taking a bank loan.” This year, the trend is reversed, with banks becoming more aggressive lenders, Ferrer explains. Among the bond issues Celfín has managed so far this year is Chile’s Banco Falabella issue of UF3 million ($119 million) in 25-year local bonds and construction company Salfacorp’s UF2 million ($86 million) issue of ﬁve and 21-year local bonds. “This was a small deal but the levels it captured were historic for a BBB rated company,” Ferrer says, adding that this is

November/December 2010

LATINFINANCE 51

Latin Finance - November/December 2010

Table of Contents for the Digital Edition of Latin Finance - November/December 2010