BancoSantander Chile posted first-quarter net income attributable toshareholders of about 125.44 billion Chilean pesos, or 67 centavos per share,up 31.4% from the year-ago period and 49.7% higher than the fourth quarter of2015.

The bank, a unit of Spain's , attributed theyear-over-year growth to higher net interest income because of loan growth, animproved funding mix and higher inflation rates. The bank has more assets thanliabilities linked to inflation and, as a result, margins go up when inflationaccelerates, the company said.

Net interest income in the three-month period increased14.4% annually, while the bank's net interest margin improved to 4.5% from 4.4%a year earlier.

Net fee and commission income, meanwhile, ticked 13.6%higher in the first quarter, with retail banking fees and middle-market feesrising annually by 13.6% and 11.2%, respectively.

Net operating profits from Santander Chile's businesssegments rose 6.2% year over year in the first quarter driven by a jump of 8.2%in core revenues, which was partially offset by lower client treasuryactivities.

The company noted that it continued to focus on loan growthin segments with a higher risk-adjusted profitability, resulting in its totalloan portfolio increasing 9.0% in the quarter. The lender's total nonperformingloan ratio improved to 2.5% from 2.7% a year ago. Provisions for loan lossesdecreased 1.6% year over year.

The bank's return on average equity for the first quarterwas 18.1%.

Separately, Santander Chile's shareholders approved adividend of about1.79 pesos per share with respect to the bank's 2015 net attributable income.

As of April 27, US$1was equivalent to 668.95 Chilean pesos.