Edgar Filing: BANCO SANTANDER CHILE

Unassociated Document

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

Commission File Number: 001-14554

Banco Santander Chile

Santander Chile Bank

(Translation of Registrant’s Name into English)

Bandera 140

Santiago, Chile

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F

Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes

Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

Table of Contents

Item
1.		1Q110 Earnings Release (Chilean Bank GAAP)
2.		Financial Statements in Spanish as of March 31, 2011
3.		Translation of Material Events

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BANCO SANTANDER-CHILE

	By:	/s/
	Name:	Juan Pedro Santa María
	Title:	General Counsel

Date: May 20, 2011

FIRST QUARTER 2011

EARNINGS REPORT

INDEX

SECTION		PAGE

SECTION 1: SUMMARY OF RESULTS		2

SECTION 2: BALANCE SHEET ANALYSIS		6

SECTION 3: ANALYSIS OF QUARTERLY INCOME STATEMENT		9

SECTION 4: CREDIT RISK RATINGS		16

SECTION 5: SHARE PERFORMANCE		17

ANNEX 1: BALANCE SHEET		18

ANNEX 2: QUARTERLY INCOME STATEMENTS		19

ANNEX 3: QUARTERLY EVOLUTION OF MAIN RATIOS AND OTHER INFORMATION		20

CONTACT INFORMATION
Robert Moreno		Santiago, Chile
Manager, Investor Relations Department		Tel: (562) 320-8284
Banco Santander Chile		Fax: (562) 671-6554
Bandera 140 Piso 19		Email: rmorenoh@santander.cl
		Website: www.santander.cl

SECTION 1: SUMMARY OF RESULTS

Pre-tax net income increases 2.6% YoY in 1Q11

In 1Q11, net income attributable to shareholders1 totaled Ch$116,298 million (Ch$0.62 per share and US$1.33/ADR2). On a pre-tax basis, net income increased 2.6% compared to 1Q10 (from now on YoY). Compared to 4Q10 (from now on QoQ), pre-tax net income increased 25.6% mainly as a result of a one-time charge of Ch$39,800 million recognized in 4Q10. After tax net income fell 2.4% YoY mainly as a result of the higher statutory corporate tax rate that increased to 20% in 2011.

Strong loan growth in the quarter.

Santander Chile Loan Market Share (%)

	Santander Chile: Market Share, %
	Market Share		Chg. YoY (bp)
	March 11, %		as of 3/11
Loans		21.6		+130
Individual		25.1		+60
- Consumer and Credit		27.7		+140
- Mortgage		23.7		+0
Companies*		19.4		+180

In 1Q11, total loans increased 7.1% QoQ and 19.4% YoY. Higher yielding retail loans, which include loans to individuals and small and middle-sized companies - increased 3.1% QoQ and 16.4% YoY in 1Q11. In the middle market, loans increased 8.3% QoQ and 22.5% YoY. This segment was positively affected by economic growth, especially the rise in investment levels. Corporate lending increased 35.9% QoQ and 37.3% YoY. This rise was due, in part, to the increase in loans to Chilean blue chip corporations. Loan market share in March 2011, the latest figure available, reached 21.6% and has increased 130 bp in the last twelve months. Notable has been the increase of our consumer loan market share that increased 140 basis points to 27.7% YoY.

Record growth of core deposits

Customer deposits increased 10.7% in the quarter, led by a record 12.1% QoQ and 40.7% rise in core deposits (non-institutional deposits). In the quarter, the Bank focused on increasing its core deposit base in line with growth of the loan book. The Bank’s loan to deposit ratio (measured as loans minus marketable securities that fund mortgage portfolio over total deposits) improved to 96.9% as of March 2011 from 99.8% as of December 2010 and 104.3% as of March 2010. As of March 2011, 74% of the Bank’s deposits were core.

1 The results in this report are unaudited.

2 Earnings per ADR was calculated using the observed exchange rate of Ch$482.08 per US$. As of March 31, 2010.

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

Operating income net of provisions and costs* increases 14.1% QoQ and 11.0% YoY in 1Q11

Operating income, net of provisions and costs
(Ch$ million)	1Q11		YoY Chg.			QoQ Chg.
Net interest income	228,683			(0.3	)%		(1.4	)%
Provision expense**	(48,674	)		(31.9	)%		(22.5	)%
Net interest income, net of provision expense	180,009			14.0	%		6.5	%
Fee income	71,389			14.5	%		2.5	%
Financial transactions, net	26,193			(11.4	)%		33.2	%
Operating expenses	(115,688	)		11.2	%		(0.6	)%
Gross income, net of provisions & costs	161,903			11.0	%		14.1	%

* Excludes other operating income and expenses

** Provision expense excludes the one-time charge of Ch$39,800 million recognized in 4Q10.

Operating income, net of provisions and costs, an indicator or recurring revenue generation increased a solid 14.1% QoQ and 11.0% YoY in 1Q11. This was led by a 6.5% QoQ and 14.0% YoY increase in net interest income, net of provisions. The Central Bank continued to tighten monetary policy in the quarter and boosted short-term interest rates 75 basis points to 4.00%. As the Bank’s liabilities have a shorter duration than assets, they re-price more quickly than assets in a rising interest rate environment. This explains, in part, the 1.4% QoQ and 0.3% YoY decrease in net interest income in 1Q11.

The decline in net interest income was also due to the normalization of credit margins to pre-crisis levels as asset quality has improved across the board in the Chilean economy. This has positively affected provision expenses. Provision expense in the quarter decreased 22.5% QoQ and 31.9% YoY, offsetting the negative effect on margins of higher funding costs. The net interest margin net of provisions reached 4.0% in 1Q11 compared to 3.9% in 4Q10 and 4.0% in 1Q10. The NPL ratio improved to 2.47% of total loans from 2.66% in 4Q10 and 2.74% in 1Q10. The coverage ratio of total NPLs (loan loss reserves over non-performing loans) reached 118.2% as of March 31, 2011 compared to 115.6% as of December 31, 2010 and 97.4% as of March 31, 2010. The Banks on-going efforts in 2009 and 2010 of improving credit scoring models, boosting coverage and improving collection efforts of early non-performance at the branch level has also been a driver of the lower provision expense and higher coverage ratios.

Fee income was up 2.5% QoQ and 14.5% YoY as product usage and cross-selling indicators continued to improve in the quarter. The number of checking accounts increased 13.9% YoY, credit cards +18.1% YoY and Debit cards grew 9.8% YoY. Purchases with Santander Chile’s credit cards increased 31.6% YoY in monetary terms. Greater commercial activity in retail banking also boosted fees, especially in insurance brokerage, stock brokerage, asset management and fees from credit and debit cards.

Operating expenses in 1Q11 decreased 0.6% QoQ and increased 11.2% YoY. The efficiency ratio reached 37.5% in 1Q11. The QoQ decrease in personnel expenses was mainly due to seasonal factors and no significant variation in headcount. The 13.0% YoY increase in personnel expenses was mainly due greater commercial activity in various business segments, especially retail banking. Administrative expenses were up 5.1% QoQ and 9.6% YoY. This rise was in line with the significant expansion of business activity in the quarter. At the same time, the Bank, in anticipation of a more positive economic environment forecast for the coming years, has been investing in technology and alternative distribution channels. In 2011, the Bank expects to open approximately 25 branches and has already begun an important investment program in CRM technology, client service and new credit scoring models for SMEs. These projects should drive stronger revenue growth while increasing productivity.

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

ROE reaches 25.0% in 1Q11. Core capital at 10.2%.

With these results, the Bank’s ROAE, reached 25% (25.5% post-dividend). The Bank currently has one of the highest ROEs and capitalization levels in the Chilean financial system. Voting common shareholders’ equity is the sole component of our Tier I capital and represented 10.68% of risk-weighted assets. The BIS ratio reached 14.18% as of March 31, 2011. On April 27, 2011, the Bank paid its annual dividend of Ch$1.52/share, 10.6% more than in 2010 and equivalent to 60% of 2010 earnings attributable to shareholders. At the record date in Chile, the dividend yield was 3.7%. The Bank has not issued shares since 2002 and dividends per share have increased for the last five years in a row.

Dividends per share (Ch$)

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

Banco Santander Chile: Summary of Quarterly Results

	Quarter									Change %
(Ch$ million)	1Q11			4Q10			1Q10			1Q11 / 1Q10			1Q 11 / 4Q10
Net interest income		228,683			231,865			229,398			(0.3	)%		(1.4	)%
Fee income		71,389			69,637			62,351			14.5	%		2.5	%
Core revenues		300,072			301,502			291,749			2.9	%		(0.5	)%
Financial transactions, net		26,193			19,661			29,573			(11.4	)%		33.2	%
Provision expense1		(48,674	)		(102,637	)		(71,489	)		(31.9	)%		(52.6	)%
Operating expenses		(115,688	)		(116,380	)		(103,999	)		11.2	%		(0.6	)%
Operating income, net of provisions and costs		161,903			102,146			145,834			11.0	%		58.5	%
Other operating & Non-op. Income		(45,605	)		(8,274	)		(26,730	)		70.6	%		451.2	%
Net income attributable to shareholders		116,298			93,872			119,104			(2.4	)%		23.9	%
Net income/share (Ch$)		0.62			0.50			0.63			(2.4	)%		23.9	%
Net income/ADR (US$)2		1.33			1.11			1.25			6.6	%		20.4	%
Total loans3		16,774,368			15,657,557			14,043,570			19.4	%		7.1	%
Customer funds		15,866,754			14,683,342			14,344,713			10.6	%		8.1	%
Shareholders’ equity		1,905,690			1,831,798			1,683,104			13.2	%		4.0	%
Net interest margin		5.1	%		5.4	%		5.8	%
Efficiency ratio		37.5	%		34.8	%		32.9	%
Return on average equity4		25.0	%		20.8	%		28.6	%
NPL5 / Total loans		2.5	%		2.7	%		2.7	%
Coverage NPLs6		118.2	%		115.6	%		97.4	%
PDLs/ Total loans		1.29	%		1.32	%		1.40	%
Coverage PDLs7		226.33	%		233.10	%		190.48	%
Risk index8		2.92	%		3.08	%		2.67	%
BIS ratio		14.1	%		14.5	%		14.7	%
Branches		506			504			498
ATMs		2,017			2,018			1,856
Employees		11,115			11,001			11,155

Beginning in January 2011, new provisioning guidelines defined by the Superintendency of Banks (SBIF) - the industry supervisor - for loans analyzed on an individual basis came into effect. This encompasses mainly large commercial, leasing and factoring loans. These regulations had an initial cost of implementation of Ch$39,800 million. As per indications of the SBIF, this one time effect was recognized in December 2010 as an Other operating expenses in the income statement and as a Non-credit provision in the Bank’s Liabilities. As stated in the 4Q10 Earnings Report, the SBIF also indicated that in 2011, this liability must be shifted to Loan loss reserves in the Balance Sheet and Provision Expenses in the Income Statement with no impact to net income. The Bank also reclassified Ch$ 1,302 million in provisions for off balance sheet contingent loans recognized as other operating expenses and as a Non-credit provision in the Bank’s liabilities in March 2010 figures, also with no impact on net income.

2.	The change in earnings per ADR may differ from the change in earnings per share due to the exchange rate. Earnings per ADR was calculated using an exchange rate of Ch$482.08 per US$.

3.	Excludes interbank loans.

4.	Annualized quarterly Net income attributable to shareholders / Average equity attributable to shareholders.

5.	NPLs: Non-performing loans; full balance of loans with one installment 90 days or more overdue.

6.	Loan loss allowances / NPLs.

7.	PDLs: Past due loans; all loan installments that are more than 90 days overdue.

8.	Risk Index: Loan loss allowances / Total loans; measures the percentage of loans the Bank’s must provision for given its internal models and the Superintendency of Banks guidelines.

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

SECTION 2: BALANCE SHEET ANALYSIS

LOANS

Strong loan growth in all segments and products

Loans	Quarter ended,						% Change
(Ch$ million)	Mar-11		Dec-10		Mar-10		Mar. 11 / 10			Mar. 11 / Dec. 10
Total loans to individuals1		8,652,205		8,407,416		7,411,686		16.7	%		2.9	%
Total loans to individuals1		8,652,205		8,407,416		7,411,686		16.7	%		2.9	%
Consumer loans		2,815,118		2,700,791		2,303,983		22.2	%		4.2	%
Residential mortgage loans		4,758,712		4,651,136		4,219,733		12.8	%		2.3	%
SMEs		2,467,951		2,375,192		2,143,885		15.1	%		3.9	%
Total retail lending		11,120,156		10,782,608		9,555,571		16.4	%		3.1	%
Institutional lending		352,593		331,153		313,079		12.6	%		6.5	%
Middle-Market & Real estate		3,562,558		3,288,107		2,907,944		22.5	%		8.3	%
Corporate		1,757,732		1,293,321		1,279,965		37.3	%		35.9	%
Total loans 2		16,774,368		15,657,557		14,043,570		19.4	%		7.1	%

1. Includes consumer loans, residential mortgage loans and other loans to individuals.

2. Total loans gross of loan loss allowances. Total loans include other non-segmented loans and exclude interbank loans.

In 1Q11, total loans increased 7.1% QoQ and 19.4% YoY. In 1Q11, Chile’s economy is forecast to grow by over 10% in 1Q11. In 2011, GDP is expected to grow close to 6.5% led by a strong increase in private investment and consumption levels. Unemployment figures have also been better than expected as well as wage growth. This has boosted the Bank’s credit activity in all segments.

Higher yielding retail loans – which include loans to individuals and small and middle-sized companies, SMEs - increased 3.1% QoQ (16.4% YoY) in 1Q11.

-	Consumer loans increased 4.2% QoQ increase and 22.2% YoY. This positive evolution was driven by credit cards loans that expanded 7.1% QoQ (38.7% YoY) as the Bank’s market share in the credit card business continues to rise.

-	Residential mortgage loans increased 2.3% QoQ (12.8% YoY), as long-term rates remained attractive and demand for purchasing housing continues to rise.

-	Lending to SMEs (defined as companies that sell less than Ch$1,200 million per year) increased 3.9% QoQ (15.1% YoY), reflecting the strength of economic growth and the Bank’s focus on this high yielding segment.

In the middle market, which is comprised of companies with annual sales greater than Ch$1,200 million increased 8.3% QoQ (22.5% YoY). This segment was positively affected by economic growth, especially the rise in investment levels.

Corporate lending (companies with sale over Ch$10,000 million or that are part of a large foreign or local economic group) increased 35.9% QoQ (37.3% YoY). This rise was due, in part, to the increase in loans to Chilean blue chip corporations in line with the strong expansion of investment in the local economy. In this segment, the Bank competes not only with Chilean lender, but also with international banks, including other units of Grupo Santander. The Banks international funding costs are currently lower than many high-grade European and U.S. banks, permitting us to participate more actively in this segment. This should permit the Bank not only to increase its lending business, but also, to enhance even further its highly profitable non-lending businesses with these companies.

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

FUNDING

Core deposits grow 12.1% QoQ and 40.7% YoY

Funding	Quarter ended,									% Change
(Ch$ million)	Mar-11			Dec-10			Mar-10			Mar. 11 / 10			Mar. 11 / Dec. 10
Demand deposits		4,315,563			4,236,434			3,890,230			10.9	%		1.9	%
Time deposits		8,408,818			7,258,757			6,818,939			23.3	%		15.8	%
Total deposits		12,724,381			11,495,191			10,709,169			18.8	%		10.7	%
Mutual funds		3,142,373			3,188,151			3,635,544			(13.6	)%		(1.4	)%
Total customer funds		15,866,754			14,683,342			14,344,713			10.6	%		8.1	%
Loans to deposits1		96.9	%		99.8	%		104.3	%

1. (Loans - marketable securities that fund mortgage portfolio) / (Time deposits + demand deposits).

Customer funds increased 8.1% in the quarter led by a 10.7% rise in total deposits. Demand deposits in the period increased 1.9% and time deposits were up 15.8% in the same period. Deposit growth was led by a 12.1% QoQ and 40.7% rise in core deposits (non-institutional time deposits). In the quarter, the Bank focused on increasing its core deposit base in line with growth of the loan book. The Bank’s loan to deposit ratio (measured as loans minus marketable securities that fund mortgage portfolio over total deposits) improved to 96.9% as of March 2011 from 99.8% as of December 2010 ands 104.3% as of March 2010. As of March 2011, 74% of the Bank’s deposits were core deposits. As short-term interest rates went up in the quarter, the Bank proactively increased its cheaper core deposit base. Going forward, as short-term interest rates continue to rise, demand deposit growth should decelerate and time deposit growth should continue to accelerate.

* Demand deposits + Non-institutional time deposits.

Mutual funds under management decreased 1.4% QoQ. This was mainly due to negative mark-to-market effects on fixed income funds as short-term interest rates increased. The Bank also proactively shifted client funds from money market funds to time deposits.

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL

ROAE of 25.0% achieved in 1Q11. BIS ratio at 13.9% and Tier I at 10.6%

Shareholders' Equity	Quarter ended,									Change %
(Ch$ million)	Mar-11			Dec-10			Mar-10			Mar. 11 / 10			Mar. 11 / Dec. 10
Capital		891,303			891,303			891,303			0.0	%		0.0	%
Reserves		51,539			51,539			51,539			(0.0	)%		(0.0	)%
Unrealized gain (loss) Available-for-sale financial assets		(12,697	)		(5,180	)		(32,620	)		(61.1	)%		145.1	%
Retained Earnings:		975,545			894,136			772,882			26.2	%		9.1	%
Retained earnings previous periods		1,037,283			560,128			818,885			26.7	%		85.2	%
Net income		116,298			477,155			119,104			(2.4	)%		(75.6	)%
Provision for mandatory dividend		(178,036	)		(143,147	)		(165,107	)		7.8	%		24.4	%
Equity attributable to shareholders		1,905,690			1,831,798			1,683,104			13.2	%		4.0	%
Minority Interest		34,486			31,809			29,942			15.2	%		8.4	%
Total Equity		1,940,176			1,863,607			1,713,046			13.3	%		4.1	%
ROAE		25.0	%		20.8	%		28.6	%

Shareholders’ equity totaled Ch$1,905,690 million (US$4.0 billion) as of March 31, 2011. ROAE in the quarter reached 25.0% in 1Q11 (25.5% post-dividend). Voting common shareholders’ equity is the sole component of our Tier I capital and represented 10.6% of risk-weighted assets. The BIS ratio reached 14.1% as of March 31, 2011.

On April 27, 2011, the Bank paid its annual dividend of Ch$1.52/share, 10.6% more than in 2010 and equivalent to 60% of 2010 earnings attributable to shareholders. At the record date in Chile, the dividend yield was 3.7%.

Capital Adequacy	Quarter ended,									Change %
(Ch$ million)	Mar-11			Dec-10			Mar-10			Mar. 11 / 10			Mar. 11 / Dec. 10
Tier I		1,905,690			1,831,799			1,683,103			13.2	%		4.0	%
Tier II		642,221			672,099			599,353			7.2	%		(4.4	)%
Regulatory capital		2,547,912			2,503,898			2,282,455			11.6	%		1.8	%
Risk weighted assets		18,013,990			17,245,265			15,513,732			16.1	%		4.5	%
Tier I (Core capital) ratio		10.6	%		10.6	%		10.8	%
BIS ratio		14.1	%		14.5	%		14.7	%

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

SECTION 3: ANALYSIS OF QUARTERLY INCOME STATEMENT

NET INTEREST INCOME

Positive commercial trends partially offset by negative impact of rising rates on Net interest income

Net Interest Income / Margin	Quarter							Change %
(Ch$ million)		1Q11		4Q10		1Q10			1Q11 / 1Q10		1Q 11 / 4Q10
Interest income		378,417		367,381		321,238			17.8	%	3.0	%
Interest expense		(149,734	)	(135,516	)	(91,840	)		63.0	%	10.5	%
Net interest income		228,683		231,865		229,398			(0.3	)%	(1.4	)%
Average interest-earning assets		17,866,010		17,176,435		15,776,237			13.2	%	4.0	%
Average loans		16,150,015		15,470,132		13,879,173			16.4	%	4.4	%
Interest earning asset yield1		8.5	%	8.6	%	8.1	%
Cost of funds2		3.2	%	3.2	%	2.2	%
Net interest margin (NIM)3		5.1	%	5.4	%	5.8	%
Net interest margin net of provisions4		4.0	%	3.9	%	4.0	%
Avg. equity + non-interest bearing demand deposits / Avg. interest earning assets		34.3	%	34.1	%	33.9	%
Quarterly inflation rate5		0.57	%	0.54	%	0.27	%
Avg. Central Bank reference rate		4.00	%	3.25	%	0.50	%
Avg. 10 year Central Bank yield (real)		3.09	%	3.01	%	3.14	%

1. Interest income divided by interest earning assets

2. Interest expense divided by interest bearing liabilities + demand deposits

3. Net interest income divided by average interest earning assets annualized.

4. Net interest income net of provision expenses divided by interest earning assets. Excludes one-time provision expense of Ch$39.8bn in 4Q10.

5. Inflation measured as the variation of the Unidad de Fomento in the quarter.

Net interest income decreased 1.4% QoQ and 0.3% YoY. The Net interest margin in 1Q11 reached 5.1% compared to 5.4% in 4Q10 and 5.8% in 1Q10. Compared to 4Q10 and 1Q10, the decline in net interest income and margin was mainly due to higher short-term interest rates. The Central Bank increased short-term interest rates 75 basis points to 4.00% QoQ and 350 basis points in the last twelve months. The Bank’s liabilities have a shorter duration than assets and, therefore, re-price more quickly in a rising interest rate environment. This has increased funding costs as reflected in the 10.5% QoQ and 63.0% YoY rise in interest expense. Going forward, we expect rates to continue to rise. However, this negative effect on spreads should be partially compensated by:

(i)

improved asset quality. The Bank’s net interest margin net of provision expense reached 4.0% in 1Q11 compared to 3.9% in 4Q10 and 4.0% in 1Q10. Net interest income net of provision expense increased 6.5% QoQ and 13.1% YoY. As a result, the increase in funding costs has been offset by the decrease in provision expense;

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

(ii)

stabilization of the Bank’s funding costs. The Bank’s cost of funds increased 100 bp YoY to 3.2% in 1Q11, although this rise was lower than the rise in market rates. QoQ the Bank’s cost of funds remained stable as the Bank increased its cheaper core deposit base in the quarter (See Section 2: Funding) and continued to extend the duration of its institutional funding base in order to minimize negative impacts of rising short-term rates on our net interest margin. The ratio of average equity plus average demand deposits also improved to 34.3% in 1Q11 compared to 34.1% in 4Q10 and 33.9% in 1Q10;

(iii)

loan growth and yields; The Bank’s interest earning asset yields (interest income divided by average interest earning assets) have been gradually rising. In 1Q11, interest earning asset yields increased by 40 basis points YoY to 8.5% as our interest earning assets incorporate the rising interest rates; and

(iv)

the positive impact on margins of higher inflation forecast for the rest of 2011, as the Bank has more assets than liabilities linked to inflation.

PROVISION FOR LOAN LOSSES

Asset quality improves in the quarter. Coverage of NPLs reaches 118.2%

Provision for loan losses	Quarter									Change %
(Ch$ million)	1Q11			4Q10			1Q10			1Q11 / 1Q10			1Q 11 / 4Q10
Gross provisions		(131	)		(53,746	)		(27,303	)		(99.5	)%		(99.8	)%
Charge-offs		(54,178	)		(55,815	)		(52,158	)		3.9	%		(2.9	)%
Gross provisions and charge-offs		(54,309	)		(109,561	)		(79,461	)		(31.7	)%		(50.4	)%
Loan loss recoveries		5,635			6,924			7,972			(29.3	)%		(18.6	)%
Net provisions for loan losses1		(48,674	)		(102,637	)		(71,489	)		(31.9	)%		(52.6	)%
Total loans2		16,774,368			15,657,557			14,043,570			19.4	%		7.1	%
Loan loss reserves1		489,034			481,581			375,366			30.3	%		1.5	%
Non-performing loans3 (NPLs)		413,775			416,739			385,211			7.4	%		(0.7	)%
Risk Index4		2.92	%		3.08	%		2.67	%
NPL / Total loans		2.47	%		2.66	%		2.74	%
Coverage ratio of NPLs5		118.2	%		115.6	%		97.4	%

Provision for loan losses and loan loss reserves for 1Q10 includes a reclassification of Ch$1,302 million of provisions for off-balance sheet contingent loans from Other operating expenses and Other Provisions to Loan loss reserves and Provision Expenses. 4Q10 Provision for loan losses and loan loss reserves includes a reclassification of Ch$39,800 million of provisions for commercial loans recognized in line with the change in provisioning models for commercial loans analyzed on an individual basis. This charge was reclassified from Other operating expenses and Other Provisions to Loan loss reserves and Provision Expenses.

2.	Excludes interbank loans.

3.	NPL: Non-performing loans; full balance of loans with one installment 90 days or more overdue.

4.	Risk Index: Loan loss reserves / Total loans; measures the percentage of loans the Bank’s must provision for given its internal models and the Superintendency of Banks guidelines.

5.	Loan loss reserves / NPLs.

Asset quality improved in the quarter. The NPL ratio improved to 2.47% of total loans from 2.66% in 4Q10 and 2.74% in 1Q10. The coverage ratio of total NPLs (loan loss reserves over non-performing loans) also improved and reached 118.2% as of March 31, 2011 compared to 115.6% as of December 31, 2010 and 97.4% as of March 31, 2010.

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

Provision expense in the quarter decreased 52.6% QoQ and 31.9% YoY in 1Q11. The QoQ declines was mainly due to the Ch$39,800 million in one-time provision expenses recognized in 4Q10 as a result of the change in provisioning methodology for commercial loans analyzed on an individual basis. Excluding this charge, QoQ provision expense decreased 22.5%. As asset quality improved in the quarter as economic growth and employment levels rebounded sharply in the year. The Banks on-going efforts in 2009 and 2010 of improving credit scoring models, boosting coverage and improving collection efforts of early non-performance at the branch level has also been a driver of the lower provision expense and higher coverage ratios.

By loan product, provision expense was as follows:

Net provisions by segment	Quarter									Change %
(Ch$ million)	1Q11			4Q10			1Q10			1Q11 / 1Q10			1Q 11 / 4Q10
Commercial loans1,2		(4,683	)		(57,605	)		(23,231	)		(79.8	)%		(91.9	)%
Residential mortgage loans		(5,222	)		(6,356	)		(5,197	)		0.5	%		(17.8	)%
Consumer loans2		(38,769	)		(38,676	)		(43,061	)		(10.0	)%		0.2	%
Net provisions for loan losses		(48,674	)		(102,637	)		(71,489	)		(31.9	)%		(52.6	)%

1.	4Q10 figures includes Ch$39,800 million as a result of the

2.	Includes net provision expenses for interbank loans.

3.	Includes provision reversal for contingent loans, which is included in Other operating income in 3Q10.

The Bank expects, as the Chilean economy strengthens, to see a rise in consumer and SME lending. This expected rise in retail lending is being complemented with continuous investments and improvements in the Bank’s credit scoring models in order to maintain an adequate balance between loan growth and risk levels.

Note: Reclassifications of Provisions in Income Statement and Balance Sheet

It is important to point out that such provisions are not expected to be reflected in the Bank's financial statements prepared in accordance with IFRS and filed with the U.S. Securities and Exchange Commission in our 2010-20F because such provisions are not expected to relate to incurred losses.

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

NET FEE INCOME

Solid growth of fees

Fee Income	Quarter							Change %
(Ch$ million)	1Q11		4Q10			1Q10		1Q11 / 1Q10			1Q 11 / 4Q10
Collection fees		15,488		16,764			13,812		12.1	%		(7.6	)%
Credit, debit & ATM card fees		14,786		14,677			14,351		3.0	%		0.7	%
Asset management		10,953		10,841			9,391		16.6	%		1.0	%
Checking accounts & lines of credit		10,178		10,273			11,265		(9.6	)%		(0.9	)%
Insurance brokerage		8,815		10,032			5,106		72.6	%		(12.1	)%
Guarantees, pledges and other contingent operations		5,818		5,501			5,829		(0.2	)%		5.8	%
Fees from brokerage and custody of securities		3,262		2,698			1,906		71.1	%		20.9	%
Other Fees		2,089		(1,149	)		691		202.3	%		—	%
Total fees		71,389		69,637			62,351		14.5	%		2.5	%

Net fee income was up 2.5% QoQ and 14.5% YoY as product usage and cross-selling indicators continued to improve in the quarter. The number of checking accounts increased 13.9% YoY, credit cards +18.1% YoY and Debit cards grew 9.8% YoY.

Greater commercial activity in retail banking also boosted insurance related fees. Collection fees in 1Q11 increased 12.1% YoY and fees from our insurance brokerage subsidiary increased 72.6% YoY. Greater demand for insurance has driven insurance brokerage fees. The QoQ decline in these products is mainly due to seasonal factors. Going forward, regulatory changes may limit the growth of insurance related fees.

Fees from the brokerage and custody of securities grew 20.9% QoQ and 71.1% YoY. These fees were driven by increased stock brokerage income. Fees from asset management increased 1.0% QoQ and 16.6% YoY. Mutual funds under management decreased 1.4% QoQ and 13.6% YoY, but equity funds, which generate higher management fees, continued to expand in the quarter, driving fee income.

Fees from credit, debit and ATM cards increased 0.7% QoQ and 3.0% YoY. Purchases with Santander Chile’s credit cards increased 31.6% YoY in monetary terms. This positive growth in usage and number of cards was partially offset by the increase in fee expenses related to our co-branding programs.

This positive evolution of fees in the quarter was offset by a fall in non-usage related fees such as checking account fees that decreased 0.9% QoQ and 9.6% YoY.

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

NET RESULTS FROM FINANCIAL TRANSACTIONS

Positive evolution of client treasury activities

Results from Financial Transactions*	Quarter									Change %
(Ch$ million)	1Q11			4Q10			1Q10			1Q11 / 1Q10			1Q 11 / 4Q10
Net income from financial operations		49,375			(13,191	)		52,092			(5.2	)%		(474.3	)%
Net foreign exchange income		(23,182	)		32,852			(22,519	)		2.9	%		(170.6	)%
Net results from financial transactions		26,193			19,661			29,573			(11.4	)%		33.2	%

These results mainly include the mark-to-market of the available for sale investment portfolio, realized and unrealized gains of financial investments held for trading, the interest revenue generated by the held for trading portfolio, gains or losses from the sale of charged-off loans and the mark-to-market of derivatives. The results recorded as Exchange differences, net mainly includes the translation gains or losses of assets and a liability denominated in foreign currency.

Net results from financial transactions, which include the sum of the net income from financial operations and net foreign exchange income totaled a gain of Ch$26,193 million in 1Q11. In order to comprehend more clearly these line items, we present them by business area in the table below.

Results from Financial Transactions	Quarter									Change %
(Ch$ million)	1Q11			4Q10			1Q10			1Q11 / 1Q10			1Q 11 / 4Q10
Santander Global Connect and other client activities		16,040			13,585			13,029			23.1	%		18.1	%
Market-making		9,028			1,560			6,304			43.2	%		478.7	%
Client treasury services		25,068			15,145			19,333			29.7	%		65.5	%
Proprietary trading		2,971			(1,018	)		7,067			(58.0	)%		(391.8	)%
Sale of loans and charged-off loans		1,081			8,375			(43	)		—	%		(87.1	)%
Financial Management (ALCO) and other results		(2,927	)		(2,841	)		3,216			—	%		3.0	%
Non-client treasury services		1,126			4,516			10,240			(89.0	)%		(75.1	)%
Net results from financial transactions		26,193			19,661			29,573			(11.4	)%		33.2	%

1. Santander Global Connect is the Bank’s commercial platform for selling treasury products to our clients.

The Bank’s Client treasury services continued to generate positive results in 1Q11, totaling Ch$25,068 million and increasing 65.5% QoQ and 29.7% YoY. This was driven by a rises in our market making business and better results from Santander Global Connect, our commercial platform for selling treasury products to clients. More than 70% of income generated with our corporate and middle market clients comes from recurring non-lending activities.

These results were partially offset by lower results in Non-client treasury services. In the quarter, interest rates continued to rise, negatively affecting our proprietary trading and Financial Management (ALCO). The Financial Management Division manages the structural interest rate risk, the structural position in inflation-indexed assets and liabilities, shareholders’ equity and liquidity. The aim of the Financial Management Division is to inject stability and recurrence into the net interest income of commercial activities and to ensure that we comply with internal and regulatory limits regarding liquidity, regulatory capital, reserve requirements and market risk. Results were also affected by lower gains from the sale of charged-off loans in the quarter.

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

OPERATING EXPENSES AND EFFICIENCY

Stable QoQ evolution of costs. Investing to grow.

Operating Expenses	Quarter									Change %
(Ch$ million)	1Q11			4Q10			1Q10			1Q11 / 1Q10			1Q 11 / 4Q10
Personnel expenses		(62,841	)		(65,344	)		(55,589	)		13.0	%		(3.8	)%
Administrative expenses		(39,502	)		(37,600	)		(36,053	)		9.6	%		5.1	%
Depreciation and amortization		(13,340	)		(13,176	)		(12,341	)		8.1	%		1.2	%
Impairment		(5	)		(260	)		(16	)		(68.8	)%		(98.1	)%
Operating expenses		(115,688	)		(116,380	)		(103,999	)		11.2	%		(0.6	)%
Efficiency ratio1		37.5	%		34.8	%		32.9	%

1.	Operating expenses / Operating income. Operating income = Net interest income + Net fee income+ Net results from Financial transactions + Other operating income and expenses.

Operating expenses in 1Q11 decreased 0.6% QoQ and increased 11.2% YoY. The efficiency ratio reached 37.5% in 1Q11.

The QoQ decrease in personnel expenses was mainly due to seasonal factors and no significant variation in headcount. The 13.0% YoY increase in personnel expenses was mainly due greater commercial activity in various business segments, especially retail banking and as a result, variable incentives to commercial teams have increased. Headcount as of March 31 2011 totaled 11,115 personas and did not vary YoY.

Administrative expenses were up 5.1% QoQ and 9.6% YoY. This was also mainly due to greater commercial activity which increased marketing and general expenses. Branch rent expenses also increased as the Bank in 2010 sold 43 branches, which it now rents. At the same time, the Bank, in anticipation of a more positive economic environment forecast for the coming years, has been investing in technology and alternative distribution channels. The higher inflation also fueled administrative cost growth as 2/3 of operating expenses are linked to inflation. In 2011, the Bank expects to open approximately 25 branches and has already begun an important investment program in CRM technology, client service and new credit scoring models for SMEs. These projects should drive stronger revenue growth while increasing productivity.

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

OTHER INCOME AND EXPENSES

Other Income and Expenses	Quarter									Change %
(Ch$ million)	1Q11			4Q10			1Q10			1Q11 / 1Q10			1Q 11 / 4Q10
Other operating income		2,550			22,824			5,738			(55.6	)%		(88.8	)%
Other operating expenses1		(20,613	)		(9,989	)		(10,927	)		88.6	%		106.4	%
Other operating income, net		(18,063	)		12,835			(5,189	)		248.1	%		—	%
Income attributable to investments in other companies		575			(4	)		120			379.2	%		—	%
Income tax		(26,501	)		(18,927	)		(21,760	)		21.8	%		40.0	%
Income tax rate		18.4	%		16.5	%		15.5	%

1.	The one-time charge of Ch$39,800 million recognized by the Bank in 4Q10 as part of the modification of provisioning models for commercial loans was reclassified to provision expense. See Provision Expense.

Other operating income, net, totaled Ch$-18,063 million in 1Q11. Other operating income totaled Ch$2,550 million and decreased 88.8% QoQ and 55.6% YoY. The QoQ decline was mainly due to the Ch$17,986 million gain recognized in 4Q10 from the sale of 27 branches. Compared to 1Q10 the 55.6% decline in other operating income was mainly due to a Ch$4,045 million gain recognized in 1Q10 from the reversal of provisions for non-credit contingencies. Other operating expenses totaled Ch$20,613 million and increased 106.4% QoQ and 88.6% YoY. Higher other operating expense in 1Q11 was mainly due to higher provisions for non-credit contingencies, which totaled Ch$6,883 million in 1Q11, and higher expenses related to repossessed assets. These totaled Ch$4,774 million in 1Q11 compared to Ch$3,282 million in 1Q10.

Income tax increased 40.0% QoQ and 21.8% YoY. The statutory corporate tax rate in Chile in 2010 was 17%. In 2011, it will be 20% as part of the plan to finance the post-earthquake reconstruction efforts. In 2012, the statutory corporate tax rate will decline to 18.5% and in 2013, it will return to 17%. The Bank’s effect tax rate tends to be below the statutory rate, since for tax purposes, the Bank still recognizes a loss from the price level restatement of its capital.

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

SECTION 4: CREDIT RISK RATINGS

International ratings

The Bank has credit ratings from three leading international agencies.

Moody’s		Rating
Foreign currency bank deposits		Aa3
Senior bonds		Aa3
Subordinated debt		A1
Bank Deposits in Local Currency		Aa3
Bank financial strength		B-
Short-term deposits		P-1

Standard and Poor’s (Outlook Positive)		Rating
Long-term Foreign Issuer Credit		A+
Long-term Local Issuer Credit		A+
Short-term Foreign Issuer Credit		A-1
Short-term Local Issuer Credit		A-1

Fitch		Rating
Foreign Currency Long-term Debt		AA-
Local Currency Long-term Debt		AA-
Foreign Currency Short-term Debt		F1+
Local Currency Short-term Debt		F1+
Individual rating		B

Local ratings:

Our local ratings, the highest in Chile, are the following:

Local ratings	Fitch Ratings	Feller Rate
Shares	Level 2	1CN1
Short-term deposits	N1+	Level 1+
Long-term deposits	AAA	AAA
Mortgage finance bonds	AAA	AAA
Senior bonds	AAA	AAA
Subordinated bonds	AA	AA+
Outlook	Stable	Stable

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

SECTION 5: SHARE PERFORMANCE

As of March 2011

Ownership Structure:

ADR price (US$) 1Q11
03/31/11:			86.75
Maximum (1Q11):			93.75
Minimum (1Q11):			76.06

Market Capitalization: US$15,737 million

P/E 12 month trailing*:	15.9
P/BV (03/31/11)**:	3.96
Dividend yield***:	3.7	%

*	Price as of March 31 / 12mth Earnings

**	Price as of March 31 / Book value as of 3/31/11

***	Based on closing price on record date of last dividend payment.

Average daily traded volumes 1Q11

US$ million

Local share price (Ch$) 1Q11
03/31/11:			40.05
Maximum (2010):			43.65
Minimum (2010):			35.63

Dividends:
Year paid	Ch$/share		% of previous year earnings
2006:		0.83		65	%
2007:		0.99		65	%
2008:		1.06		65	%
2009:		1.13		65	%
2010:		1.37		60	%
2011:		1.52		60	%

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

ANNEX 1: BALANCE SHEET

Unaudited Balance Sheet	Mar-11			Mar-11			Dec-10			Mar-10			Mar. 11 / 10			Mar. 11 / Dec. 10
	US$ths			Ch$mn									% Chg.
Assets
Cash and balances from Central Bank		4,688,602			2,238,573			1,762,198			1,526,810			46.6	%		27.0	%
Funds to be cleared		1,222,373			583,622			374,368			345,521			68.9	%		55.9	%
Financial assets held for trading		561,215			267,952			379,670			877,884			(69.5	)%		(29.4	)%
Investment collateral under agreements to repurchase		25,213			12,038			170,985			3,679			227.2	%		(93.0	)%
Derivatives		2,948,868			1,407,937			1,624,378			1,465,832			(3.9	)%		(13.3	)%
Interbank loans		119,160			56,893			69,672			47,738			19.2	%		(18.3	)%
Loans, net of reserves for loan losses		34,108,981			16,285,333			15,175,975			13,668,205			19.1	%		7.3	%
Available-for-sale financial assets		3,478,366			1,660,746			1,473,980			1,572,839			5.6	%		12.7	%
Held-to-maturity investments		-			-			-			-
Investments in other companies		16,381			7,821			7,275			7,095			10.2	%		7.5	%
Intangible assets		153,859			73,460			77,990			72,290			1.6	%		(5.8	)%
Fixed assets		317,778			151,723			154,985			179,981			(15.7	)%		(2.1	)%
Current tax assets		28,070			13,402			12,499			4,649			188.3	%		7.2	%
Deferred tax assets		292,598			139,701			117,964			103,186			35.4	%		18.4	%
Other assets		1,376,429			657,176			640,937			572,371			14.8	%		2.5	%
Total Assets		49,337,893			23,556,377			22,042,876			20,448,080			15.2	%		6.9	%

Liabilities and Equity
Demand deposits		9,038,775			4,315,563			4,236,434			3,890,230			10.9	%		1.9	%
Funds to be cleared		836,094			399,193			300,125			197,908			101.7	%		33.0	%
Investments sold under agreements to repurchase		341,454			163,027			294,725			762,703			(78.6	)%		(44.7	)%
Time deposits and savings accounts		17,611,934			8,408,818			7,258,757			6,818,939			23.3	%		15.8	%
Derivatives		2,767,678			1,321,428			1,643,979			1,358,323			(2.7	)%		(19.6	)%
Deposits from credit institutions		3,577,642			1,708,145			1,584,057			2,005,763			(14.8	)%		7.8	%
Marketable debt securities		9,311,765			4,445,902			4,190,888			2,872,100			54.8	%		6.1	%
Other obligations		360,607			172,172			166,289			174,497			(1.3	)%		3.5	%
Current tax liabilities		4,187			1,999			1,293			74,440			(97.3	)%		54.6	%
Deferred tax liability		38,806			18,528			5,441			1,650			1022.9	%		240.5	%
Provisions		533,798			254,862			235,953			265,070			(3.9	)%		8.0	%
Other liabilities		851,532			406,564			261,328			313,411			29.7	%		55.6	%
Total Liabilities		45,274,272			21,616,201			20,179,269			18,735,034			15.4	%		7.1	%
					-
Equity					-
Capital		1,866,799			891,303			891,303			891,303			0.0	%		0.0	%
Reserves		107,946			51,539			51,539			51,539			0.0	%		0.0	%
Unrealized gain (loss) Available-for-sale financial assets		(26,593	)		(12,697	)		(5,180	)		(32,620	)		(61.1	)%		145.1	%
Retained Earnings:		2,043,240			975,545			894,136			772,882			26.2	%		9.1	%
Retained earnings previous periods		2,172,548			1,037,283			560,128			818,885			26.7	%		85.2	%
Net income		243,582			116,298			477,155			119,104			(2.4	)%		(75.6	)%
Provision for mandatory dividend		(372,889	)		(178,036	)		(143,147	)		(165,107	)		7.8	%		24.4	%
Total Shareholders' Equity		3,991,392			1,905,690			1,831,798			1,683,104			13.2	%		4.0	%
Minority Interest		72,230			34,486			31,809			29,942			15.2	%		8.4	%
Total Equity		4,063,621			1,940,176			1,863,607			1,713,046			13.3	%		4.1	%
Total Liabilities and Equity		49,337,893			23,556,377			22,042,876			20,448,080			15.2	%		6.9	%

Figures in US$ have been translated at the exchange rate of Ch$477.45

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

ANNEX 2: QUARTERLY INCOME STATEMENTS

Unaudited Quarterly Income Statement	1Q11			1Q11			4Q10			1Q10			1Q11 / 1Q10			1Q 11 / 4Q10
	US$ths.			Ch$mn									% Chg.
Interest revenue		792,579			378,417			367,381			321,238			17.8	%		3.0	%
Interest expense		(313,612	)		(149,734	)		(135,516	)		(91,840	)		63.0	%		10.5	%
Net interest income		478,967			228,683			231,865			229,398			(0.3	)%		(1.4	)%
Fee income		191,094			91,238			90,837			79,159			15.3	%		0.4	%
Fee expense		(41,573	)		(19,849	)		(21,200	)		(16,808	)		18.1	%		(6.4	)%
Net fee income		149,521			71,389			69,637			62,351			14.5	%		2.5	%
Net income from financial operations		103,414			49,375			(13,191	)		52,092			(5.2	)%		(474.3	)%
Net foreign exchange income		(48,554	)		(23,182	)		32,852			(22,519	)		2.9	%		(170.6	)%
Total financial transactions, net		54,860			26,193			19,661			29,573			(11.4	)%		33.2	%
Other operating income		5,341			2,550			22,824			5,738			(55.6	)%		(88.8	)%
Operating profit before loan losses		688,690			328,815			343,987			327,060			0.5	%		(4.4	)%
Provision expense		(101,946	)		(48,674	)		(102,637	)		(71,489	)		(31.9	)%		(52.6	)%
Total operating income net of interest, fee and provision expenses		586,744			280,141			241,350			255,571			9.6	%		16.1	%
Personnel expenses		(131,618	)		(62,841	)		(65,344	)		(55,589	)		13.0	%		(3.8	)%
Administrative expenses		353,180			(39,502	)		(37,600	)		(36,053	)		9.6	%		5.1	%
Depreciation and amortization		(27,940	)		(13,340	)		(13,176	)		(12,341	)		8.1	%		1.2	%
Impairment		(10	)		(5	)		(260	)		(16	)		(68.8	)%		(98.1	)%
Operating expenses		(242,304	)		(115,688	)		(116,380	)		(103,999	)		11.2	%		(0.6	)%
Other operating expenses		(43,173	)		(20,613	)		(9,989	)		(10,927	)		88.6	%		106.4	%
Total operating expenses		(285,477	)		(136,301	)		(126,369	)		(114,926	)		18.6	%		7.9	%
Net operating income		301,267			143,840			114,981			140,645			2.3	%		25.1	%
Income attributable to investments in other companies		1,204			575			(4	)		120			379.2	%		--	%
Net income before taxes		302,471			144,415			114,977			140,765			2.6	%		25.6	%
Income tax		(55,505	)		(26,501	)		(18,927	)		(21,760	)		21.8	%		40.0	%
Net income from ordinary activities		246,966			117,914			96,050			119,005			(0.9	)%		22.8	%
Net income discontinued operations		0			0			0			0
Net income attributable to:
Minority interest		3,385			1,616			2,178			(99	)		-1732.3	%		(25.8	)%
Net income attributable to shareholders		243,582			116,298			93,872			119,104			(2.4	)%		23.9	%

Figures in US$ have been translated at the exchange rate of Ch$477.45

Investor Relations Department

Bandera 140 19th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,

email: rmorenoh@santander.cl

ANNEX 3: QUARTERLY EVOLUTION OF MAIN RATIOS AND OTHER INFORMATION

Mar-10

Jun-10

Sep-10

Dec-10

Mar-11

(Ch$ millions)

Loans

Consumer loans

2,303,983