The bank now accounts for roughly a 25% market share across the lending sector and cornered more than 30% of all new loans granted to individuals in 2006. A key strategic initiative was the aggressive expansion of the bank’s distribution network. The bank’s size and economies of scale allow it to open branch offices faster and at a lower break-even point than its main competitors. This is reflected in the growth of its client base.
The successful retail strategy is reflected in the results, the bank having once more outperformed the market. The net interest margin reached 4.8% compared with a 4.1% market average, and RoE rose to 24.8% from 24.1% a year earlier. Other banks experienced a decline in RoE in this period.
“We are honoured to receive this prestigious award. Once again, in 2006 we outperformed the market,” says chairman Mauricio Larraín Garcés. “Our net income reached a record level of $534m, increasing 19.1% compared with 14.6% growth for the Chilean financial system. A key initiative has been the aggressive expansion of our distribution network and client base. We currently have a 20% market share in branches.
“In the past two years, we have opened 30% of all new bank branches opened in the Chilean market. The total number of clients increased 14.5% year on year to 2.6 million. In cheque accounts, we increased our market share 130 basis points to 27.1% at year-end 2006. This means that we opened more than 40% of all new accounts in the Chilean market. Our ability to expand our distribution capabilities at a rapid pace clearly gives us an advantage over our competitors.”
