ING Ups Santander Chile to Buy on Good 3Q

Netherlands-based investment bank ING Barings has upgraded Chile's Banco Santander Chile (NYSE: BSB) to a buy, from hold, following 3Q00 results which exceeded expectations. The bank reported US$37.4mn net income, up 53% from one year ago. "During the quarter the bank demonstrated the strength of its franchise by showing an improvement in profitability, efficiency and asset quality," ING analysts Paul Warme and Philip Harrison said in a report. "Return on equity in 3Q00 was an impressive 23.6%." The stock is down 21% since July 25, 2000, and at current levels is starting to look attractive again. The results were helped by channel migration, particularly from tellers to ATMs, and improvements in productivity continue to support the organization's gains in efficiency, the analysts said. "In the third quarter, BSB recorded the lowest efficiency ratio in our Latin banking universe at 48.7%." "The next catalyst we are looking to support a higher trading range for BSB's shares is passage of the Ley de OPAs or merger law, possibly later this year. If passed, the Ley de OPAs could facilitate the merger of BSB with its sister bank in Chile, Banco Santiago, and create value for all the shareholders involved," the analysts said.