EXECUTIVE SUMMARY

this month ’ s series : March 2010

Financial earthquake?
The effects of the earthquake
are expected to have a negative
but fairly limited impact on the
banking sector in the short term,
and a positive impact in the
longer term.
Results
The impact on the banks’
results may come from higher
provisions to deal with the
increase in delinquency,
although this would eventually
be compensated by other
factors.
Operating Situation
The natural disaster put the
operational capacity of the
banking system to the test,
particularly the network of
branches, automatic tellers and
certain products and services.
Chile: Financial earthquake?
With economic losses that the Chilean
government estimates to be some US$30
billion, the earthquake that shuddered the
center-south of the country last February
27 has also shaken up the national
economic situation. In a year in which
Chile should have been recovering from
the international crisis – which pushed the
country into its first recession in a decade
in 2009 – the efforts of the government
and productive sectors will instead be
focused on the process of rebuilding in the
areas affected.
Chile’s GDP will still grow at a solid pace
of around 5% in 2010 despite the natural
disaster’s impact on the economy, supported
by reconstruction-related investments
and the relatively fast return to normal of
industrial and transport activities.
At a month since the earthquake,
economic activity in the damaged
regions of the country has begun to
recover, although rather unevenly of
course, in relation to the destruction
caused and the capacity of each
particular sector. The forestry and
fishing industries – the sectors hit
hardest by the earthquake – are currently
facing high levels of inactivity, as well
as the retail sector, particularly in the
Bío-Bío region. Nevertheless, there are
industries, including the agriculture and
wine industries, where activities have
already resumed.
The following report is intended to show
that although the devastating earthquake
that affected the central-south of Chile
– mainly regions VI, VII and VIII – did
cause serious damage to infrastructure and
productive sectors, the negative collateral
effects in the banking sector in the short
term are very limited, and in the long-term
are positive.

Breakdown of market shares for loans in regions VI, VII and VIII
Loans issued in regions Share of loans issued
VI, VII and VIII (in in regions VI,
millions of pesos) VII and VIII
Banco Santander 1,629,553 27%
Banco del Estado de Chile 1,235,898 20%
Banco de Chile 1,081,033 18%
Banco de Crédito e Inversiones 661,860 11%
Scotiabank 549,004 9%
BBVA 368,028 6%
Corpbanca 269,332 4%
Banco Bice 109,356 2%
Banco Itaú 78,477 1%
Banco Security 47,881 1%
Banco Paris 28,649 0%
Rabobank 24,483 0%
Banco Ripley 22,592 0%
Banco Internacional 8,478 0%
TOTAL regions VI, VII and VIII 6,114,620 100%
Source: BNamericas, based on SBIF data

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 Written and researched by
María Alejandra Moreno

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