Banco Santander Chile (BSAC) Q2 2026 Earnings Call Transcript

Ladies and gentlemen, thank you all for joining us today. Please stand by. Banco Santander Chile's second quarter earnings conference call will start in a minute. Ladies and gentlemen, thank you for standing by. And I would like to welcome you to Banco Santander Chile's second quarter 2026 earnings conference call on August 5, 2026. Please note, at this point, all participant lines are in listen only most. After the call, there will be an opportunity to ask questions. So with this, I would now like to pass the line to Patricia Perez, the Chief Financial Officer. Please go ahead.

Good morning, everyone, and thank you for joining us today. I am Patricia Perez, CFO of Banco Santander Chile, And I'm joined by Cristian Vicuña, Head of Strategy and Investor Relations, and Andres Cantone, Chief Economist. This work here reinforces the strength of our franchise, high profitability, disciplined cost management, and a solid capital position. While we continue to execute our strategy to deliver a simpler and enhanced value proposition to customers with a focus on sustainable growth and shareholder returns. Andres will give you an overview of the economic and regulatory environment. Cristian will then walk you through our strategy, our second quarter results, and our updated view for 2026. Finally, we will conclude with a Q&A session. With that, let me turn it over to Andres González.

Thanks, Patricia. Let me start with the big picture. Since our last webcast, the global backdrop has remained complex, external inflationary pressures remain, with geopolitical tensions driving oil prices and the inflationary scenario for Chile. At the same time, long-term rates have moved higher and expectations for monetary policy abroad have shifted upward, leaving global financial conditions less supportive. For Chile, this has translated into a weaker peso, around 930 pesos per dollar during the last month, and renewed pressures on short-term inflation. Locally, the June CPI was flat month-on-month, but still above expectations, bringing annual inflation to 4.3%, with the surprise mainly concentrated on food. Some short-term inflation expectations have increased, and now we expect a variation of 4.4% in 2026 in the U.S., although the two-year expectations remain anchored at 3%. When activity economy continues to lose momentum during the first half of the year, The weakness has been concentrated in three areas. First, supply shocks in natural resources sectors, particularly mining and fishing. Second, the impact of higher oil and fuel prices on household disposable income. And third, a slower than expected recovery in construction. Beyond these three factors, the labor market has also weakened with seasonal adjusted unemployment rising to 9.3%. Looking ahead, activity should improve. Gradually, mining production faces a more favorable comparison base in the coming months. The mining and energy investment pipeline remains solid, and the recent fall in fuel prices should help restore part of the disposable income loss during the oil shock. Pro-growth reforms, if approved and effectively implemented, can lift the country's potential growth over the minimum terms. Based on this information, our economic team has revised down its 2026 growth forecast, with the economy now expected to expire close to 1% this year, although the outlook for 2027 remains more constructive, supported by investment and a low comparison base in this context we continue to expect the central bank to keep the policy rate at 4.5 percent for an extended period and overall the message is that the inflation risk have increased again while activity although improving at the margin will remain weak this year making the macro scenario more challenging challenging and calling for a more cautious monetary policy approach. Now turning to the regulatory and policy environment on slide 5, the main development is the completion of the National Reconstruction Plans bill, passage through Congress. Yesterday, the Senate approved the last outstanding provision. The bill is therefore now ready for enactment. The bill includes several pro-market initiatives aimed at reactivating growth. On the business and investment side, the most relevant measures are the gradual reduction in the corporate tax rate from 27% to 23% between 2027 and 2029, the reintegration of the tax system, investment incentives and tax stability, faster permitting process and reconstruction spending. We believe this measure should support private investment, improve business confidence, and strengthen economic activity over time. Moreover, the bill includes household support measures such as the temporary VAT exception on new homes, housing reconstruction programs, and improved housing affordability and employment and support. If these are implemented effectively, these measures will support housing demand, mortgage origination, and consumer activity. Complementing this, the government has just submitted a bill to extend and expand the mortgage interest rate subsidy and the Fogaes estate guarantee for first home purchases. The proposal raises the number of subsidies from from $50,000 to $80,000, also lift the maximum value of eligible new homes from $4,000 to $6,000, and extend the program until May 2026. Combined with the temporary VAT exemption on new homes, this should improve affordability for middle-income households, help absorb the stock of more than 100,000 unsold units and therefore has the potential to support mortgage origination and a recovery in the construction sector. In addition, we continue to monitor other regulatory relevant changes including the repost and securitization law, the proposed model for market risk-weight assets, and the advances towards internal models for credit risk. With that, let me hand over to Christian.

Thank you, Andres. I will now walk you through our strategy, our second quarter 2026 results, and our outlook for the rest of the year. Let me start with the strategy. At the center of what we do is a clear ambition to become a digital bank with a physical presence, leveraging our work-affir branches to combine the convenience of the scale and the digital banking with advice, service, and proximity for our customers, leveraging the support of the Santander Group and its global platforms. We organize this around three pillars. First, think customer. We aim to offer the best value proposition to all our customer segments, grow active customers, increase transactionality, and deepen loyalty. We aim to serve over 3.5 million active customers, and we continue to see room to improve the customer experience, raise NPS, and capture a greater share of wallets, especially in higher value segments. Second, Think Global. We are accelerating our digital transformation through global platforms and an AI-enabled operating model. This allows us to simplify processes, improve the digital experience, deploy capabilities faster, and operate with greater agility, productivity, and efficiency in an increasingly dynamic environment. Third, Think Value. Our goal here is to translate the strong customer franchise and an efficient operating model into recurring high-quality profitability. This means continuing to diversify revenues, leveraging other income streams while maintaining a strong focus on returns and capital discipline. Overall, our study is designed to grow customers on loyalty, increase transactionality, improve the quality of revenues, and as a result, deliver sustainable returns and an attractive payout to shareholders. This strategy is supported by a diversified platform with five complementary business lines. Retail and commercial remains the core of the franchise, where we are simplifying products and processes and continuing to build on the work affair model. Corporate and investment banking adds strength in advisory effects and transactional banking capabilities with a clear focus on sustainable solutions and capital optimization. Wealth management and insurance strengthens our advisory-led model, renews our private banking proposition, and reinforces our position in insurance and mutual funds. Consumer banking supports our leadership in auto financing, including new and electric vehicles, while also expanding our presence in used car financing. And through GEDnet, our payment business is helping us reach new client segments with value-added services and simple bundle solutions. Retail remains the backbone of the balance sheet, representing 66% of loans, 48% of deposits, and 69% of the margin. At the same time, we have meaningful contributions from CID payments well into the fee business. The funds on their global platforms are helping us connect this business effectively, improve efficiency, and diversify revenues. That supports stable profitability through the cycle and reinforces our ability to deliver attractive shareholders' return. Before we move on, I want to pause for a moment on something we are generally proud of, the external recognition our work has earned over the past year. It is a strong reflection of the progress we have made for our customers. Starting on the left with our awards and recognitions, recently EuroMoney named us Best Bank in Chile, Best Bank for ESG, and Best Bank for SMEs for 2026, three of their most important categories in a single year. This is in addition to the recognitions last year from Latin Finance and the Banking where we were awarded the Best Bank in Chile for 2025 and Global Finance awarded as best bank for SMEs in 2025. On the right, our ESG ratings and index impressions tell a complementary story. For the first time, this year we were included in the Dow Jones Best in Class World Index. This is an outstanding achievement, being the only Chilean bank to qualify for the World Index. Furthermore, we hold an MSCI ESG rating of AA and a sustainability risk rating of 15.4 of low risk. These are independent rigorous assessment but they confirm that the way we grow matters to us. We also wanted to briefly comment on an announcement we made last week. Santander is taking the naming rights of one of Chile's most iconic venues. From September, the 15,000-seat arena at the Parker Higgins becomes Santander Arena. This venue is ranked by Polestar among the top three venues in the world by annual attendance. More than just brand recognition, this move allows us to connect with clients and potential clients in a highly engaging setting. We can leverage our payment capabilities with simple services and easy digital onboarding, offering concertgoers relevant accessible solutions on the spot. This is a current example of the different ways we are implementing our strategy to become a digital bank and focusing on our customer needs and value creation. Let me now move to our financial performance on slide 11. The second quarter showed exceptionally strong profitability, supported by the particularly high inflation in the quarter and continued execution of our strategy. Net income attributable to shareholders reached over 382.6 billion pesos in the quarter, increasing 40% Q1Q and also 40% year-on-year. This translated into a return of average equity of 31.5% in the quarter and 27.2% year-to-date. This quarter demonstrates the earning power of the bank when revenue's tailwind combines with strong efficiency and discipline risk management happens. On slide 12, looking at the balance sheet, we saw better loan growth dynamics in the quarter while customer funds also increased. Total loans reached only 1.4 trillion pesos, up 1.2 percent year-to-date and 1.3 percent quarter on quarter. Mortgage loans grew 2.0 percent in the quarter in parts due to the impact of higher inflation, but also due to better new origination trends. Commercial loans increased 1.3 percent, where we saw an incipient improvement in demand from our clients. Consumer lending overall was relatively stable, with some pressure in credit cards and installment loans in parts due to better decrease for our clients in the quarter. On the other hand, auto loans continued to shine, growing 1.8% in the quarter and 4.9% year-to-date. On the funding side, total deposits reached 32.4 trillion pesos, increasing 6% year-to-date and 4.5% Q&Q. This was mainly driven by time deposits, which grew 11.8% year-to-date and 7% on the quarter. And it is worth mentioning the better growth of the non-deposits too in the quarter. Demand for mutual funds remains strong and therefore total customer funds reached 48.3 trillion up 7.5% year to date and 4% on the quarter. Liquidity remains strong comfortably above regulatory requirements. On slide 13, we can see our net interest income and margins. In the first six months of 2026, combined net income from interest and readjustments reached $1.11 trillion, increasing 7.4% year-on-year and 27% Q&Q, driven by the strong inflation in the second quarter when the U.S. variation was 2.46%, which supported net readjustment income and dropped the quarterly mean to 4.7%. Meanwhile, the monetary policy rate remained at 4.5% in the quarter. With this, our year-to-date NIMH reached 4.3%, up 16 basis points year-on-year and 89 basis points Q-on-Q. Client activity and expansion of our client base remain a central part of our story. We reached 4.8 million total clients and 2.7 million active clients, meaning that 56% of total clients are active. Total customers increased 7% year on year, while active clients increased 1.3% year on year. Activity indicators remain positive. Checking accounts increased 6% year on year, credit card transactions increased 11%, percent, mutual fund asset standard management increased eight percent, and we now have 519,000 business current accounts, plus financial transactions reached 452 billion pesos on the first half, growing 4.9 percent year-on-year. Within this, total fees were broadly stable year-on-year, while results from financial transactions increased 16 percent support by market-related income. In the quarter, we saw slower dynamics coming from lower transactionality and customer demand impacted by old prices and lower results from financial transactions after a strong quarter driven by demand for market-making products and higher income from portfolio sales. On slide 15, efficiency continues to be one of Santander's key differentiators. Our efficiency ratio reached 31.6% in the first half of 2026, positioning us as the most efficient bank in Chile based on the industry information available as of May. Operating expenses decreased 4.3% year-on-year with total core expenses down 3.5%. This continues to reflect the benefits of our digital model, operating discipline, and the normalization of technology-related costs after the cloud migration expenses that we had on the beginning of last year. Our recurrence ratio reached 64.1%, meaning that fees generated from clients cover more than 60% of our core expenses. This reflects the benefits of our digital model and ongoing optimization of our branch network, which in 1991 were caffes throughout Chile. On slide 16, we show an overview of our cost of risk and asset quality. On the asset quality side, trends remain stable. Cost of risk was 1.38 year-to-date, broadly in line with our expected range, and the quarterly cost of risk decreased to 1.22 on the second quarter from 1.55% on the first quarter. after the one-off provisioning event in the commercial portfolio at the beginning of the year was subsequently reversed in recent months. The bank continues to actively manage different parts of the portfolio. NPLs reached 3.4% of loans, while impaired loans reached 7.5% of loans. These indicators show a moderate increase, but the overall trend remains manageable and consistent with the macro environment that we saw on the past quarter. Capital remains a strength. Our BIS ratio stood at 16.4% and the CET1 at 11.1% as of June 2026. This places our CET1 ratio around 200 basis points above the regulatory minimum of 9.28% for 2026. Risk-weighted assets remain mainly concentrated in credit risk, which accounts for around 70% of total risk-weighted assets, while market risk represents 18% and operational risk 12%. The risk-weighted asset density stands at 62%. We also see positive regulatory developments. The proposed new model for market risk-weighted assets would incorporate the duration model for interest rate risk and improved netting of the realty positions used to mitigate the interest rate risk. The definitive model is a still pending publication, but the direction is positive. To conclude on slide 19, let me summarize our updated view for 2026. At the start of the year, our initial targets assumed mid-single-digit loan growth, NIMS of around 4%, no interest income growth in the mid to high single digits and an efficiency ratio in the mid-30s, cost of risk of around 1.3% and a return of average equity between 22 and 24. Based on our performance so far this year and the updated macro assumptions, we now expect loan growth to remain in the mid single digits. NIMS should be slightly higher, around 4.1% for the year. Non-interest income growth in the mid-single digits with efficiency improving further into the low 30s. Our cost of risk should be around 1.35 for the full year. The key change versus the initial view is that higher inflation has supported NIM and profitability, while our efficiency and risk metrics remain solid. At the same time, we remain cautious on the macro backdrop and continue to prioritize profitable growth, asset quality, and capital discipline. Considering all this, we're expecting the bank to generate return over average equity of above 24% for this year. To sum up, Santander Chilo delivered a strong set of results with return over average equity above our long-term target, solid customer activity, resilient asset quality. Furthermore, Furthermore, we saw the incipient signs of better loan demand and external factors such as the regulations that are currently under discussion should be positive for the bank coming period. With that, I conclude the presentation. Thank you very much for the attention and we will now be happy to take your questions.

Thank you very much. So, you now move to the question and answer section. If you would like to ask a question, please press R2 on your phone and wait to be prompted. If you are dialed in Red O.M., you can also request to ask a voice question. Our first question comes from Ernesto Gabilondo from Link of America. Your line is open. Please go ahead.

Thank you. Hi, good morning, Patricia and Christian and all your team. Thanks for the opportunity to ask questions and congrats in your results. I have a couple of questions from my side. The first question is on the tax reform. If we assume a normalized inflation of 3% over the next years, how should we think about the evolution of your effective tax rate with a new tax reform? And also, I believe this year, 2026, will be untypical because high inflation is making it to be low so also you can comment how are you seeing 2026 and then with the implementation of the tax reform how should be evolving in the next three years and my second question is on your sustainable ROE so we saw you are improving your ROE guidance to have an ROE above 24% in this year, but you are keeping a long-term ROE guidance of above 20%. So can you walk us through in when should we expect a more long-term ROE at the 20% level, just to have an idea on how should we be thinking about that in the next years?

Thank you, Ernesto, for the questions. So regarding the effective tax rate, there are several things mixed here, right? So the current tax rate is 27%, and the proposed is going to reduce the effective tax rate gradually in a couple of years up to the level of 2023. So the effect is not going to be immediate in terms of the effective tax rate that the banks going to be paying. But gradually, you're going to be seeing a natural push for a normalized effective tax rate going below to what we currently have. But at the same time, in this high inflation scenario, we're seeing a resizing of the equity tax book that is used to calculate effective tax rate, right? So we're seeing both phenomena at the same time. So we're currently pushing on to the low teens the effective tax rate. I think that the more reasonable scenario is to expect an effective tax rate to the high teens or very low 20s on an unnormalized scenario environment. I hope that that actually gives you an idea of where we should be on normal years after the tax reform is implemented. Regarding the long-term ROE, we have been able to deliver since the second quarter of 2024 a sustained trend of ROE is about 20%. So, but at the same time, we have been able to develop on our strategy and continue improving on efficiency. So our long-term ROE update was fairly recent, it's been a year since we updated our long-term ROE. So it's probably something that we will review in the near term, but for the current periods we're still thinking that that the scenario is that we are going to be delivering the 20 plus and uh and we hope to continue on sustaining the current performance perfect no thank you very much christian just a follow-up in terms of the effective tax rate so you were saying we should expect something between the high teens and below the low 20s is that correct right yeah So, 18 to 20 area is where this should be on a stabilized normal scenario, but that's going to take a couple of years, right?

And this gradual implementation is around 1.5% per year? Is that correct? Okay. Thank you very much.

Thank you, Anato.

Thank you very much. Our next question comes from Yuri Fernandes from JPMorgan. Your line is open. Please go ahead.

Thank you. Hi, everybody, and congrats on the quarter. Hi, Patricia, Christiane. I have a question regarding the ROEs. I think the guidance is clear for this year above 24, but it's a year with pretty high inflation. So my question is on a normalized base, right? Now you have the lower taxes. It helps a little bit. Do you have any idea what should we work on? I don't know, like not a guidance for 2027, but in a few years, what would be the level of returns we should expect for Santa? And there is 20, 22, a good number for you. And then I have a second question just on regulation. I think tax is pretty positive, but sometimes we also hear some flexibilization on capital requirement in Chile. sometimes I also hear about maybe some more flexibilization on interest rate cap so are you seeing more good things to happen in the sector can you give us an update on what should be the good news here for banks in Chile in the coming years thank you thank you for the questions Yuri so practically the ROE questions first and then I'll ask Andres and Patricia to contribute on the regulation front.

We have been able to deliver on our strategy, right? So we have been able to sustain and improve our levels of efficiency, needs have remained stable for the last two years, taking the inflation phenomena aside. we've been able to grow the customer base and at the same time delivering on the fee side of the business, right? So all of this included gives you an idea that it's very feasible for us to deliver on a normal life cycle an ROE of above 20. That's the area what we are aiming, like a little of inflation helps, a little less effective tax rates, of course, also helps. So in normal years, we are aiming to push slightly above the 20% ROE, but considering that there might be years with a slowdown in GDP expansion and inflation, we also have to take into consideration those sorts of periods where we might be in the very high teens to low 20s, right? So that's not to give you an idea. We are going to try to update with this figure in the coming calls. And now I'll pass the ball to Andrés for regulation.

Okay, yes, okay. First of all, the National Reconstruction Plan is clearly the most important positive development currently on the table then we have this extension on the provides mortgage guarantee program that will also support mortgage origination help normalize the housing market and from a capital perspective we could continue to see constructive discussions around the market we waited as a spread as a framework the proposal and the discussion will better recognize hitting benefits and include duration based approach for interest rate risk, which could eventually translate into more efficient use of capital for the industry. We're also monitoring progress on the repost and securitization framework. And finally, advances to our internal models for credit risk remain an important opportunity. So, overall, we see regulatory agenda becoming more growth-oriented. The largest near-term impact is likely coming from the Reconstruction Bill, while capital efficiency and investment-related measures will become increasingly relevant over the medium term.

Regarding capital regulation and market risk in particular, based on the CMF estimates, the industry could benefit from this new regulation, roughly 36 percent reduction in their market risk RWA, right, which for Santander Chile would represent around 75 basis points of DET1. While the potential impact is clearly meaningful for us, it is important to note that the adoption is subject to a regulatory approval process that requires the submission of a review in the supporting documentation that the bank could deliver. So the proposal does not define the approval timeline, so we remain conservative about the implementation date and timing we could benefit from that change. And regarding internal models, yesterday the CMS just published a consultation paper that would allow banks to use internal models for both provision and regulatory capital, which is broadly consistent with the direction the regulator has been signing over recent months. That said, this is a long-term initiative and we would expect any meaningful impact to materialize rapidly over a three to five-year horizon, even the complexity of the approval and implementation process. And in our case, our internal model roadmap will remain aligned with the framework already defined for the European regulator but we think we have a strong starting position as we have been operating for several years with approved internal models or in part of our large corporate lending portfolio.

So to sum up, the regulator in our view is tackling the missing part of the implementation of the Basel III framework in Chile until December last year. All banks were focused on constructing all the pillars, buffers, and CET1 requirements. And now that the regulator is addressing the second part of the agenda, which is actually addressing the density of the assets, right? So, we think it's very constructive and it allows us to stay very optimistic about the developments of the industry in the upcoming years.

Super clear, Cristiano, Patricia, and Andres. And I see, maybe you agree with me, but you have this Reconstruction Bill driving potentially better economic growth and better long growth. And maybe I ask for Andreses, what should we pay attention for us to try to guess how the long growth will accelerate? But you also have the regulator, helping the banks to unlock capital and maybe grow faster. So you have like the double-tay winds. You have the macro that I think is the most important one. But even on the sector specific, maybe after years of higher culture cyclical buffer and more capital, we are entering a phase that that easier capital allocations may drive more growth for Chilean banks, right? So just a follow-up here for Andres, maybe, what should it pay attention for us to see the growth reaccelerating? Is, I don't know, employment, is something going on investments? What should be the lean indication for us to maybe get more confidence that the long growth is coming back?

Yes. Our estimates suggest that the effect on the level of activity are significant. in the central scenario the level of GDP will be around six percent higher by 2035 so it's around almost half a point higher than you in our baseline scenario for the next 10 years so we will probably think of growth closer to three percent in the upcoming years and the main channel is through investment so that is also very positive for a construction employment on the bank side for all the commercial lending to complement the

UD we've seen most of the growth that is happening this year concentrated on mining and energy sector. Consumption has been lagging behind a little bit. So I think unemployment and also consumption metrics is something that will start improving as the economy is changing.

Thank you very much, Christian. Thank you.

Thank you very much. Our next question comes from Daniel Adila from Crujicorp Capital. Your line is open. Please go ahead.

Hi, good morning, and thank you for the presentation. I have a couple of questions. The first one, you were already talking about that a little bit, but I want to expand. It's about long growth. I would like to understand what is the long growth strategy for 2026 and 2027, considering the current economic scenario and also unemployment figures. What will be those drivers that should explain an acceleration in low growth, already considering the approval of the reconstruction bill? And what will be those products or segments in which you expect to gain market share? That will be my first.

I think we lost Daniel.

Sorry, sorry. Can you hear me again? I would like to ask the second question. The second question is regarding GetNet. but can you spend on the payment fees generated in the quarter? What are the competitive environment pressures that you mentioned in the report and then explain the reduction in payment fees during the second quarter? And do you expect this to be a trend in the coming quarters to see the second quarter to be a normalized quarter of fees generated by GetNet? Thank you so much.

Sure. Thank you, Alain. So, what we are seeing for 2026 is that prolonged growth is going to be a little more muted to what we expected at the beginning of the year. It has been showing up on the year-to-date figures. We are still confident that we are going to get into the mid-single digits, but in the lower part of the guidance, maybe the 4.5 area, not the 5.5 area. but we're seeing better dynamics into the third quarter, especially in the commercial and consumer. And also mortgages, especially supported by the recent announcements that the government made yesterday. So into 2027, with a normalized inflation of three and a GDP expansion of three, we should be on the high single digits as an industry. And we expect to capture a fair share of that into next year. Where do we expect that to pick up? I think the middle market corporate part is a part that has been lagging behind in terms of dynamics and also an increased confidence from the consumer should also impact positively on the consumer lending and the trade. Regarding figures in GetNet, this is something that we discussed during the Chilean summer a lot with the market when we announced the JD with Tagonext, right? we were seeing a configuration of the industry with an increased competition happening and that has been showing up a lot more. So this has been forcing the industry and we are of course a relevant player there to reduce margins on the fees especially in the more mass market and retail. And at the same time, we are still confident that the figures will pick up a little in the second half of the year as we are expecting some large corporates to start picking up in terms of usage of our platforms. But all in all, this is something that was expected to happen. If you ask me, it happened even a little sooner than we were expecting.

Perfect. Thank you so much. very clear on both questions. Thank you.

Thank you so much. Our next question is from Goldman Sachs. Your line is open. Please go ahead.

Hi, thank you for the call and taking my question. My question is on asset quality and provisioning levels. So, you know, it's likely to come down from the universal corporate case, but we saw provisions for consumer mortgage go up. How are you just thinking about this and the level of provision.

Thank you, Tito. So, we think that credit risk is going to remain stable for the rest of the year. We see the dynamics happening between the 1.35 and the 1.4 area, so that's the area where we're expecting to be by the year end. We are currently delivering 1.38 for the area that what we have been doing is part of the the legacy portion that well. So all in all, the metrics should start to decelerate growth and we have to do it at the same time but we'll get it at rest in the upcoming period. So all in all, we think it's going to be more of a stable news on this front with a marginal improvement.

Thank you very much.

Hi, thank you for taking my question. Just a more broader level question. If you see the loan penetration in Chile, it has gone down from the 90% ranges to 75% or so. What are the pockets that you see? Can we get back to the previous levels of loan penetration in the country? And which are the pockets where you see that opportunity in the next five years for loan growth to accelerate and for penetration levels to improve? And how is Santander placed to benefit from those segments?

Hola, Mika. Thank you for the question. Regarding loans, we are positive on most of the portfolio in terms of what we expect to happen in the next two to three years. After the pandemic, we saw that with the withdrawal of the Chilean pension fund NANI, there was a relevant chunk of that money that was paid into repayment, especially in the consumer lending portfolio. So there is a relevant room to pick up there in terms of credit cards and also in the installment loans. That's just a place where we have some improvement in unemployment and also better dynamics in terms of consumer confidence. We think that there's a room for the industry and for us, of course, looking for that to pick up. The other part that has been quite muted in the last five years in terms of growth has been the mortgage portfolio showing up after the pandemic. So the current announcement of the government of an additional package of another, actually the total program will be 80,000 mortgages, but there's a little about 40,000 that have been executed in the last. So actually, it's more than doubling in terms of UF because it has increased, but it's also allowing the banks to go for another extra 40,000 in terms of units of what has been executed so far. I think that's very helpful helping the mortgage industry to get rid of the units that have already been executed by the industry. And actually, sometimes there has been a very relevant part in the year capturing about 17% of that total chunk of support. We expect to do our first share in the upcoming years in this area too. And the other part that I think is in the last three to four years is very, very growing in Q&A opportunities. Congress was mentioning before capital deployed in the the next four years area, the middle market and large corporate area is a place where we see growth happening and also cascading down. So to sum up.

I can just ask another question. In the past, you've always talked about maybe going down market in this more mass market consumer segment with your digital initiatives to bring down the costs. What is the progress in that? is there any discussion about the rate caps being eased, which could make it easier for you to go? Have you figured out a way to be more efficient to offer more attractive rates to the mass market segment, or is that not something that you're looking at right now? Thank you so much.

So, in terms of what's the current formal discussion on interest rate caps, there's no institution discussing this. Yes, we have heard some paper articles in the news and there have been some vocal support of this discussion, but there's no really action proposing this yet. So it's too soon to tell, of course, if the economics of the mass market lending changes, that change the return over risk-weighted assets of this discussion, and it will force not only us, but the whole industry to review the penetration on the segment. This segment was actually banked out in terms of lending in the final part of 2014 when the reduction of caps happened and the industry reacted. Let me remind you something, there was the first one to react to this new environment closing the consumer lending units. So we were the first, but all the industry followed us closing down the consumer lending units and now if rates are on a different scenario of course that will make us review the economics of that business. So far nothing formal has been happening on this discussion.

Super, thank you so much for the detail answers and congratulations.

Thanks.

Thank you so much. Just a reminder we are going to show the survey at your screen. Thank you for answering it. Now, our next question comes from Ludovic Casrud, from Autonomy Capital. Your line is open. Please go ahead. It seems like Ludovic disconnected.

Yes.

Let's just wait a moment or two. If you have any more questions, so perhaps I can hand it back to the Santander Chile team for the closing remarks.

Thank you all very much for taking the time to participate in today's call. We look forward to speaking with you again soon.

Thank you very much, everybody.

Thank you very much. This concludes the call for today. We are now closing all the lines. Thank you and have a nice day.