Fitch Ratings on Feb. 1 affirmed its national long-term rating of Banco Santander Chile at AAA(cl) with a stable outlook. It also affirmed the bank's short-term national rating at N1+(cl).
The bank's ratings are based on its solid intrinsic financial profile, as shown by its viability rating of "a+," and although Fitch considers the bank to be a strategic subsidiary of Spain's Banco Santander SA, the ratings do not consider any extraordinary support from its parent.
The ratings reflect the bank's leadership position in the local market with a market share of 18.1% and 16.6% in loans and deposits, respectively, as of November 2016.
The bank "maintains a dominant position in nearly all segments and products," Fitch said.
The ratings also reflect Chile's positive operating environment, which supports the bank's asset quality, robust profitability, diversified funding and adequate levels of capital.
Chile's recent economic deceleration has limited the bank's growth and moderately pressured its interest margins, but this has been partly compensated by the bank's strong income generation capacity, Fitch noted.
Fitch's core capital calculation for the bank was 10.41% as of November 2016, which although below its international peers, is partly mitigated by the strict risk management norms in Chile and its healthy internal capital generation.
In December 2016, Fitch lowered the outlook on Santander Chile's foreign and local currency issuer default ratings to negative from stable as part of a portfolio review of Chilean banks following its revision of Chile's sovereign outlook to negative from stable.
However, at the time it also affirmed the bank's long-term foreign and local currency ratings at A+ and its short-term ratings at F1.