Ladies and gentlemen welcome and thank you for joining the Second Quarter 2014 Banco Santander-Chile Earnings Call. My name is Ryan. I will be your operator on the event and all participants are on listen-only mode. (Operator Instructions) As a reminder, we are recording the event for replay. Now I’ll pass the call to your host for today, Mr. Raimundo Monge.

Thank you very much and good morning ladies gentlemen. Once again and welcome to Banco Santander-Chile second quarter 2014 results conference call. My name is Raimundo Monge, Director of Strategic Planning, and I'm joined today by Robert Moreno, Manager of Investor Relations. Thank you for attending today's conference call in which we will discuss our performance in the second quarter 2014. Following the webcast presentation, we will be happy to answer your questions. Before we get into more detail regarding our results, we will briefly give you our latest update on the outlook for the Chilean economy in 2014 and 2015. In mid-2013 the economy has shown signs of deceleration driven by lower investment levels. For 2014, we are expecting GDP growth of around 2.9% with internal demand decelerating to around 2.5%. The inflation rate measured by the variation of UF and inflation linked unit and the most relevant indicator for the bank should rise to levels above 4% in 2014 and return to around 3% in 2015. AS a result, we expect the Central Bank to cut interest rates an additional 25 basis points this year to 3.5 despite the higher inflation and to store increase in them in 2015. We also continue expect a rebound of the economy in late 2014 or early 2015 with GDP growth reaching approximately 4% in 2015. This rebound in the economy is going to be driven by a combination of various factors. First of all, the outlook of growth of Chile’s main train partners, China, the US and the Eurozone continues to strengthen. In fact, the weighted average GDP growth of Chile’s main trading partners continues to de-revise upward. This should be positive for the contribution of Chile exports growth to GDP. Export growth as measured in GDP figures should expand at…

(Operator Instructions) our first question comes through from Tiego Batista with Itaú, Tiego Batista – Itaú BBA: Hi I Raimundo and Robert. Thanks for the opportunity and congratulations for the results, very good results. I have few questions. The first one regarding the asset quality. We saw during this quarter some NPA ration increased in the Chile especially in mortgage and on for commercial loans. You already explained a bit about it, but what are your expectations regarding the overall delinquency ratio going forward? Will this go down in the Chilean economy? How do you expect your delinquency ratio to be going forward? And my second question is regarding your loan growth, specifically on this middle market. We saw that that few portfolios posted a very small loan growth, so my question is, this was more that Chile’s strategy is to become more restricted in the credit origination to the segment or it was an issue of a smaller demand from those companies?

Okay, well, regarding the first part or the first question asset quality, as we stated in the call, we haven’t seen a delinquency level deteriorating except for some slight deterioration in the finish which is something that you would expect given that those segments are the most – the one that most ratably reflect the weaker operational environment. However, there – there are many realities among SMEs and we have been focusing our activity in those SMEs that have either collateral or high levels of transactionality because remember that, at the end of the day, we are focusing our metrics in terms of results in terms of profitability. So, although you could be growing less than before profitability in that segment has still maintained in the mid-20s range as we put in the call. So, up to now, we haven’t seen asset quality is deteriorating across the board and the only exception is in some of the SMEs that we operate. In the case of mortgages which has – the other one that grew, as we put in the call, we are basically being more straight in terms of renegotiating those clients that have some delaying in the payment. But total figures have been very stable for many months. Prices of houses have keep on rising even secondary houses are starting to increases at a greater pace and that’s why we don’t expect losses to change in a meaningful way. And then on the consumer side, which also is a element that typically moves more rapidly or deteriorating in a weak operational environment, we have seen actually an improvement in asset quality which is probably a reflection of the changes we have been done in our revelation process all our process and also a reflection of improved mix that we…

Next question is from Tito Labarta with Deutsche Bank. Tito Labarta – Deutsche Bank: Hi, good morning, Raimundo. Thanks for the call. A couple questions. Just first, in terms of expenses, we saw a pick up in the quarter, you mentioned a little bit related to just the impact of inflation but I just want to get a sense, how much is that kind of impact expenses and how should we think about this going forward? Is it just kind a one-time spike this quarter? And then kind of slowdown for the rest of the year. Just want to get a little bit more color on that and then a second question on fee income, you mentioned should be bottoming soon, the growth rates have been negative, but just when do you think you see the growth there again, and how much growth can you expect in fees going forward? Thanks.

Yes, in terms of expenses, the basic guidance between – of course growth of 5% or something around 5% we think it can be maintained throughout the year. This quarter was abnormally high because we have the full impact of a salary adjustment that you adjusted once a year, yes, on a relatively low comparison base compared to the second Q and the first Q of the year where there are some seasonal elements. So if you take the year-on-year growth 2013 vis-à-vis 2014 closer to 5 or something like that. We don’t have a plan to expand expenses in the year because we are basically taking advantage of the synergies and economies of scale to be – provide the transformation project and that’s why this should be seen as a short-term blip and we don’t expect cost to increase the levels we saw this quarter. In terms of fee income, again the basic advise we’ve been given that this year fee income shouldn’t be not a drag butt also not a – it’s vibrant. However, by the end of the year, given that we are increasing especially in the retail part and the use of products, you can see that in terms of asset management, in terms of credit card fees et cetera that are bouncing we expect these to be marginally positive and definitely will be a driver for 2015. One – what different changes that we – in regulation that we have seen are completely taken into account. Today, the only pending element which common to all banks is some changes in the insurance part and that’s why you see the recollection line is going down like 15% or so which is simply a one-time change again. The rest of the line is you look them one-by-one, you see some rebounding – rebouncing of the growth because product uses is increasing and the cross-selling of clients has also been increasing and that’s why it’s done for that we will see relatively healthy growth on a sequential quarter basis, but it’s mixed because of this implementation of insurance guidance. So, this year, we don’t expect fees to be a definitive driver but shouldn’t be a drag and next year growth of upper single-digit or something that, in line with client growth which is a good proxy of growth of these in time. Tito Labarta – Deutsche Bank: :

Next question is from Fred Mariz with UBS. Frederic de Mariz – UBS: Hi, good morning everyone. Good morning Raimundo. Thanks for the opportunity. A couple of questions on my side and the first question is more about inflation which obviously had a big impact on the margin and you mentioned in your press release that you are expecting inflation to come down in the third and fourth quarters. Can you tell us a bit more about why you expect this sharp deceleration? Is there any specific driver for this trend? Second question is on the regulatory side, you mentioned the negative side on the regulations that obviously we heard about potential changes in the credit growth in Chile and I wanted to hear from you if you think this could have a positive impact for Santander, for the banks in the country and if it’s relevant in the short-term? Thank you.

Okay, in terms of inflation, our view is that, it will decelerate basically because, well, the economy is growing less rapidly and also because the element that fueled inflation in the first half which was mainly the depreciation of the peso, and oil prices that are stable or trending down and that’s why expect inflation to come down to a more normalized level in the second half. The only surprise or the in terms of having high levels of inflation will come if the peso keeps on depreciating lately has been depreciating again is basically because of the perception that in the US rates will come higher because of the elimination of tapering et cetera and also because in Chile, rates are coming down. So the interest rate arbitrage or difference has broaden and that is reflected in the currency. That can have a second effect in inflation and the other is, that with the representation of the tax reform, there can be a pass-through of the higher taxes to the final products of companies and service et cetera. Although the central scenario is slower inflation, we could see surprises depending on how fast is the pass-through of the depreciation of the currency and the pass-through of high taxes – in prices. But it’s difficult to note for sure at this moment and that’s why for planning purposes, we are prepared to using – to use a lower inflation in the second half compared to the first. In terms of changes of regulation, as you correctly point, they are a good news and bad news. I would say that most of the more or less technical change in regulation have already passed and are to a large extent price, I would say the only pending implementation of our non-technical or partly thought a regulation is the final implementation of the maximum rate which is still has like 18 months to go. As you might remember their idea is to bring rates to a level between 35% and 38%. Today, it’s closer to 42.2%, the – what’s the maximum rate?

(Inaudible)

Like 42%, so, we still have a boon to tighten the rates. That has been less bind in that – as we originally thought, because we have been reducing the exposure to the low end a little bit faster than growth we were expecting and that’s why, that’s not been fully visible but it’s a negative ratio of overall margin. And then the remaining reforms are neutral or positive. The Basel 3 recommendations we think, brings positive banking practices to the Chile market. There we are probably one of the most advance banks in terms of implementation. The other is the implementation of the credit bureau which has been dragging for sometime because of the different elements are to be taken into consideration but definitely this is good news for all the providers. So, we will say that going forward, if you take the plus or minuses, we don’t foresee an impact at what we have seen in the last three or four years concerning regulation, There would be good pieces of regulations and other that les would. But, all in all, it shouldn’t be as negative as what we have seen in the last two, three years. And there has been a layered to banks to be very concerned about efficiency et cetera that what’s triggered our efforts to improve our performance and improve integrity of the business through the CRM and through this so-called transformation project. Frederic de Mariz – UBS: Okay. Thank you very much. And just a follow-up on the credit bureau, where do we stand now? Is there any new news on this topic?

No, there has been – the last announcement is that they have been moving forward, but there are many other priorities in the legislative agenda. So this is not a top priority and therefore you will be moving but very slowly. The focus today, the tax reform and some other reforms are big headlines. This is our secondary issue for the economic agenda. Frederic de Mariz – UBS: Sounds great. Thank you very much.

And we have no other questions.

Okay, well thank you all very much for taking the time to participate in today’s call. We look forward to speaking with you again soon. Have a good day.