Edgar Filing: BANCO SANTANDER CHILE

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

For the month of February, 2007

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

Banco Santander Chile Announces
Fourth Quarter and 2006 Earnings

•	Record profits in 2006. In 2006 net income reached a record level of Ch$285,582 million (Ch$1.52/share and US$2.95/ADR), increasing 19.1% YoY. The efficiency ratio improved to 39.0% from 41.5% in 2005. ROAE reached 24.1% in 2006.

•	In the fourth quarter of 2006 net income totaled Ch$60,868 million (Ch$0.32 per share and US$0.63/ADR), increasing 6.4% compared to 4Q 2005. Strong commercial growth was partially offset by the impact of negative inflation rates and one-time personnel expenses.

•	Retail lending grew 22.3% YoY and 4.6% QoQ. Consumer loans increased 6.4% QoQ and residential mortgage loans grew 4.4% in the same period. Lending to SMES increased 6.1% QoQ.

•	Market share increasing in key products. Market share in consumer lending increased 30 basis points QoQ and 111 basis points YoY. Market share in residential mortgage loans was up 40 basis points QoQ and 101 basis points in 12 months.

•	Good growth of client base. Total retail clients increased 8.8% to 2.4 million in 2006. The amount of retail clients with a checking account increased 23.0% YoY.

•	Client income increased 14.7% YoY in 4Q 2006 driven by a 17.1% YoY increase in client generated net interest income and a 6.6% YoY rise in fee income.

•	Increase in coverage and provision expense. Past due loans decreased 13.1% YoY. The ratio of past due loans to total loans remained stable at 0.79% and the coverage ratio of past due loans increased to 188.1% in 4Q 2006. Gross provision expense increased 69.3% YoY in 4Q 2006, in line with growth of retail lending and conservative provision policies.

•	The Bank won the National Quality Award for 2006 in the large corporate category, the most prestigious quality- related award in Chile, reflecting our on-going efforts to sustain profitability with high quality and efficiency.

Investor Relations Department
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

Santiago, Chile, February 12, 2007. Banco Santander Chile (NYSE: SAN) announced today its unaudited results for the fourth quarter of 2006. These results are reported on a consolidated basis in accordance with Chilean GAAP^1,2 in nominal Chilean pesos.

In 2006 net income reached a record level of Ch$285,582 million (Ch$1.52/share and US$2.95/ADR), increasing 19.1% YoY. The Bank’s ROAE in 2006 reached 24.1%. The efficiency ratio improved to 39.0% compared to 41.5% in 2005. Earning growth was driven by core revenues. Net interest income increased 12.0% due to loan growth and a stable net interest margin that reached 4.5% in 2006. Fee income grew 17.5% led by retail banking activities and greater product usage. This was partially offset by the 93.6% increase in provision expense.

Net income increased 6.4% in the fourth quarter of 2006 compared to 4Q 2005 (hereinafter YoY) and totaled Ch$60,868 million (Ch$0.32 per share and US$0.63/ADR). Revenues generated by client activities increased 14.7% YoY in 4Q 2006 driven by a 17.1% YoY increase in client generated net interest income (net interest income derived from our commercial lending and deposit activities). In 4Q 2006 total loans increased 3.3% compared to 3Q 2006 (hereinafter QoQ) with continued market share gains in retail lending. Total retail loans increased 4.6% QoQ and 22.3% YoY, led by solid growth in lending to individuals and SMEs. Loans to SMEs increased 6.1% QoQ and 27.2% YoY. Loans to individuals increased 4.1% QoQ and 20.6% YoY. Market share in lending to individuals increased 30 basis points QoQ to 26.2%.

Fee income increased 6.6% YoY in 4Q 2006. The Bank continues to expand its client base, cross-selling and product usage, especially in retail banking. The total number of clients has increased 8.8% since the beginning of the year to 2.4 million. As a result in 4Q 2006 fees from checking accounts increased 20.0% and fees from lines of credit rose 18.9% YoY. Credit card fees increased 16.3% YoY in 4Q 2006.

This growth of client net interest income was partially offset by a reduction in non-client net interest income (net interest income mainly generated by our Treasury). Non-client net interest income totaled a loss of Ch$16,681 million in the quarter. This was mainly due to the negative inflation rate in the quarter. Inflation decreased substantially in the local market in line with the decline in the price of oil. The Bank has a positive gap in terms of inflation indexed assets and liabilities as long-term assets are denominated for the most part in inflation indexed pesos, which are funded, in part, with non-interest bearing checking accounts and capital.

In 4Q 2006 total operating expenses increased 16.2% YoY and 16.4% QoQ. In November 2006 we concluded the anticipated negotiations of the new collective bargaining agreement that was going to expire in 2007. This new collective bargaining agreement enters into effect in 2007 and expires in 2011. As part of this process, an end of negotiation bonus was paid. This bonus signified a total cost of Ch$11,780 million (US$22 million) of which Ch$6,622 million (US$12.4 million) was recognized in 4Q 2006. Excluding this one-time event, operating expenses increased 7.5% YoY in 4Q 2006 and the adjusted efficiency ratio reached 42.9% compared to 45.6% in 4Q 2005.


¹	Safe harbor statement under the Private Securities Litigation Reform Act of 1995: All forward-looking statements made by Banco Santander Santiago involve material risks and uncertainties and are subject to change based on various important factors which may be beyond the Bank’s control. Accordingly, the Bank’s future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Such factors include, but are not limited to, those described in the Bank’s filings with the Securities and Exchange Commission. The Bank does not undertake to publicly update or revise the forward-looking statements even if experience or future changes make it clear that the projected results expressed or implied therein will not be realized.

²	The Peso/U.S. dollar exchange rate as of December 31, 2006 was Ch$534.43 per dollar. All figures presented are in nominal terms. Historical figures are not adjusted by inflation.

Investor Relations Department	2
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

The Bank’s conservative provision policies and a weaker than expected economic environment resulted in an increase in coverage and provision expenses in the quarter. Past due loans decreased 13.1% YoY and increased 4.2% QoQ. The past due loan ratio at year-end 2006 reached 0.79% down from 1.05% at year-end 2005 and flat compared to 3Q 2006. The coverage ratio of past due loans rose to 188.1% at year-end 2006 compared to 138.8% as of December 2005 and 181.0% as of September 2006. Net provision expense increased 137.5% YoY and 8.9% QoQ.

Banco Santander Chile	Quarter									Change %

(Ch$ million)	4Q 2006			3Q 2006			4Q 2005 (reclassified)			4Q 2006/2005			4Q / 3Q 2006

Client net interest income¹		153,580			146,569			131,176			17.1	%		4.8	%
Fees and income from services		42,205			42,247			39,584			6.6	%		(0.1	)%
Client income		195,785			188,816			170,760			14.7	%		3.7	%

Non-client net interest income ²		(16,681	)		29,649			19,549			—	%		—	%

Core revenues		179,104			218,465			190,309			(5.9	)%		(18.0	)%

Total provisions, net of recoveries		(39,514	)		(36,277	)		(16,635	)		137.5	%		8.9	%
Gains losses on financial transactions		18,312			443			(16,023	)		—			4033.6	%
Other operating income, net		(7,869	)		(8,188	)		(8,112	)		(3.0	)%		(3.9	)%
Operating expenses		(88,061	)		(75,681	)		(75,760	)		16.2	%		16.4	%
Income before income taxes		73,384			96,427			67,877			8.1	%		(23.9	)%
Net income		60,868			79,934			57,216			6.4	%		(23.9	)%

Net income/share (Ch$)		0.32			0.42			0.30			6.4	%		(23.9	)%
Net income/ADR (US$)³		0.63			0.82			0.61			31.3	%		(1.7	)%

Total loans		11,788,959			11,417,739			10,144,273			16.2	%		3.3	%
Customer funds		11,484,524			10,995,427			9,582,837			19.8	%		4.4	%
Shareholders’ equity		1,245,339			1,187,137			1,081,832			15.1	%		4.9	%

Client margin¹		5.4	%		5.3	%		5.4	%
Net interest margin		4.0	%		5.0	%		4.8	%
Efficiency ratio		46.5	%		35.9	%		45.6	%
Return on average equity⁴		18.3	%		27.5	%		21.7	%
PDL / Total loans		0.79	%		0.78	%		1.05	%
Coverage ratio of PDLs		188.1	%		181.0	%		138.8	%
Risk index⁵		1.46	%		1.38	%		1.42	%
BIS ratio		12.6	%		12.8	%		12.9	%
Branches⁶		397			368			352
ATMs		1,588			1,479			1,422
Employees		8,184			8,029			7,482


1.	Client net interest income and margins, is net interest income (and margins) generated by our commercial areas.

2.	Non-client net interest income is net interest income generated by centralized activities, non-segmented portions of the balance sheet and Financial Management.

3.	The change in earnings per ADR may differ from the change in earnings per share due to the exchange rate.

4.	Annualized Quarterly Earnings / Average Equity.

5.	Reserve for loan losses / Total loans on a consolidated basis

6.	Includes SuperCaja branches inaugurated in 4Q 2006

Investor Relations Department	3
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

INTEREST EARNING ASSETS

Market share continues to rise in retail banking

Interest Earning Assets	Quarter ended,						% Change

(Ch$ million)	Dec. 31, 2006		Sept. 30, 2006		Dec. 31, 2005		Dec. 2006/2005			Dec. /Sept. 2006

Consumer loans		1,800,507		1,692,432		1,392,012		29.3	%		6.4	%
Residential mortgage loans*		2,779,769		2,662,434		2,281,536		21.8	%		4.4	%
Commercial loans		4,048,221		4,082,361		3,655,101		10.8	%		(0.8	)%
Commercial mortgage loans**		181,628		202,261		251,855		(27.9	)%		(10.2	)%
Foreign trade loans		741,776		656,171		511,756		44.9	%		13.0	%
Leasing		764,408		754,572		663,862		15.1	%		1.3	%
Factoring		168,372		157,967		143,687		17.2	%		6.6	%
Other outstanding loans		37,541		22,606		13,800		172.0	%		66.1	%
Contingent loans		1,022,687		963,463		929,472		10.0	%		6.1	%
Interbank loans		151,491		134,609		194,652		(22.2	)%		12.5	%
Past due loans		92,559		88,863		106,540		(13.1	)%		4.2	%

Total loans		11,788,959		11,417,739		10,144,273		16.2	%		3.3	%

Total financial investments		1,015,376		1,289,269		1,248,140		(18.6	)%		(21.2	)%

Total interest-earning assets		12,804,335		12,707,008		11,392,413		12.4	%		0.8	%


*	Includes residential mortgage loans backed by mortgage bonds (letras hipotecarias para la vivienda) and residential mortgage loans not funded with mortgage bonds (mutuos hipotecarios para la vivienda).

**	Includes general purpose mortgage loans backed by mortgage bonds (letra de crédito fines generales) and other commercial mortgage loans (préstamos hipotecarios endosables para fines generales).

In 4Q 2006 total loans increased 3.3% QoQ with continued market share gains in consumer and mortgage lending. Consumer loans expanded 6.4% QoQ and 29.3% YoY. Market share in consumer lending reached 26.8% as of December 2006, increasing 30 basis points compared to the end of September 2006 and 111 basis points higher than year-end 2005.

Residential mortgage lending increased 4.4% QoQ and 21.8% YoY. Market share in residential mortgage lending reached 25.9% as of December 2006, increasing 40 basis points compared to September 2006 and 101 basis points compared to year-end 2005.

Commercial loans decreased 0.8% QoQ led by a decrease in loans to the large corporate segment, partially offset by increased lending to higher yielding SMEs. Factoring and leasing loans increased 6.6% and 1.3% QoQ, also reflecting strong loan growth in the SMEs and Middle-market segments. The 10.2% QoQ decrease in commercial mortgage lending was mainly due to lower demand for this product as companies have preferred to finance their fixed asset investments through regular commercial loans. Market share in lending to companies, as defined by the Superintendence of Banks, decreased 60 basis points QoQ to 20.3%, while total loan market share decreased 30 basis points QoQ to reached 22.3% as of year-end 2006. This reflects the Bank’s effort to improve the asset mix and to maximize profitability by adequately allocating its capital to the most profitable uses.

Investor Relations Department	4
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

Rising Market share in Retail lending

	Mkt. share		QoQ Chg.		YoY Chg.

Individuals		26.2		+30		+106

Consumer		26.8		+30		+111

Res. mortgage		25.9		+40		+101

Companies		20.3		-60		-106

Total loans		22.3		-30		-34

Source: Superintendence of Banks, unconsolidated figures as of December. 2006

*Companies includes loans to SMEs, middle-market and corporates

Loans by business segment*	Quarter ended,						% Change

(Ch$ million)	Dec. 31, 2006		Sept. 30, 2006		Dec. 31, 2005		Dec. 2006/2005			Dec. /Sept. 2006

Santander Banefe		602,851		569,711		491,424		22.7	%		5.8	%
Middle/upper income		4,465,577		4,297,213		3,711,684		20.3	%		3.9	%

Total loans to individuals		5,068,428		4,866,924		4,203,108		20.6	%		4.1	%

SMEs		1,784,229		1,681,803		1,402,332		27.2	%		6.1	%

Total retail lending		6,852,657		6,548,727		5,605,440		22.3	%		4.6	%

Institutional lending		202,142		196,322		181,999		11.1	%		3.0	%

Middle-Market & Real estate		2,301,361		2,324,796		1,963,468		17.2	%		(1.0	)%

Corporate		1,242,252		1,237,508		1,261,544		(1.5	)%		0.4	%


*	Excludes contingent loans and interbank loans

Retail lending increased 4.6% QoQ and 22.3% YoY, led by solid growth in lending to individuals and SMEs. Loans to individuals increased 4.1% QoQ and 20.6% YoY. Santander Banefe’s loan portfolio expanded 5.8% QoQ and 22.7% YoY. Loans to middle and upper income individuals increased 3.9% QoQ and 20.3% YoY. Market share in lending to individuals increased 30 basis points QoQ to 26.2%. The Bank is Chile’s leading bank in all segments of retail lending and is also among the fastest growing. In 2006 the Bank captured 31.9% of the net flow of residential mortgage loans, 31.4% of the net flow of consumer loans and 31.7% of the net flow of total loans made to individuals in 2006.

Santander captures >30% of flow of loans to individuals in 2006 (%)

Message

Source: Superintendence of Banks, unconsolidated figures as of December 2006

Investor Relations Department	5
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

Loans to SMEs increased 6.1% QoQ and 27.2% YoY. The Bank is expanding its presence among SMEs due to the strong economic indicators that favor growth in this attractive segment. Spreads in this segment are equivalent to spreads to lending to individuals.

Lending to the middle market segment decreased 1.0% QoQ and increased 17.2% YoY. Spreads of new loans in this segment have been under pressure and the Bank avoided renewing some loan operations at unattractive returns. Loans in relatively low yielding corporate banking remained flat QoQ and decreased 1.5% YoY in line with our focus on optimizing our use of capital and asset mix.

CUSTOMER FUNDS

Solid growth of customer funds

Funding	Quarter ended,						Change %

(Ch$ million)	Dec. 31, 2006		Sept. 30, 2006		Dec. 31, 2005		Dec. 2006/2005			Dec. /Sept. 2006

Non-interest bearing deposits		2,482,997		2,274,546		2,168,811		14.5	%		9.2	%

Time deposits and savings accounts		6,909,335		6,816,812		5,906,711		17.0	%		1.4	%

Total customer deposits		9,392,332		9,091,358		8,075,522		16.3	%		3.3	%

Mutual funds		2,092,192		1,904,069		1,507,315		38.8	%		9.9	%

Total customer funds		11,484,524		10,995,427		9,582,837		19.8	%		4.4	%

Negative inflation rates impacted the evolution of deposits in the quarter. As a result interest rates declined both short-term and long-term. This fueled growth of non-interest bearing deposits as companies and individuals kept away from inflation indexed deposits due to poor returns leaving funds in checking accounts. As a result the balance of non-interest bearing checking accounts increased 9.2% QoQ and the average balance rose 3.9% in the same period. Time deposits increased 1.4% QoQ and 17.0% YoY.

Total quarterly average non-interest bearing demand deposits*

Quarter ended,

Change %

(Ch$ million)

Dec. 31,
2006

Sept. 30,
2006

Dec. 31,
2005

Dec.
2006/2005

Dec. /Sept.
2006

Total

1,895,592

1,825,305

1,692,480

12.0

3.9

* Net of clearance

Assets under management in the Bank’s mutual fund subsidiary increased 9.9% QoQ and 38.8% YoY. The strength of the local and international stock markets coupled with falling long-term rates boosted the value of funds under management in the quarter. Negative inflation also boosted flows of funds away from bank deposits and into fixed income and stock funds. Market share in mutual fund management reached 22.1% at year-end 2006, increasing from 21.4% as of September 2006 and 21.6% as of year-end 2005.

Investor Relations Department	6
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

NET INTEREST INCOME

Client margins remain high. Negative inflation rate in the quarter reduces non-client margins

Net Interest Income	Quarter									Change %

(Ch$ million)	4Q 2006			3Q 2006			4Q 2005 (reclassified)			4Q 2006/2005			4Q / 3Q 2006

Client net interest income¹		153,580			146,569			131,176			17.1	%		4.8	%

Non-client net interest income¹		(16,681	)		29,649			19,549			—	%		—	%

Net interest income		136,899			176,218			150,725			(9.2	)%		(22.3	)%

Average interest-earning assets		13,783,754			14,162,135			12,436,024			10.8	%		(2.7	)%

Average loans		11,357,344			10,984,330			9,749,204			16.5	%		3.4	%

Net interest margin*		4.0	%		5.0	%		4.8	%

Client margin**		5.4	%		5.3	%		5.4	%

Avg. equity + non-interest bearing demand deposits / Avg. earning assets		23.4	%		21.0	%		22.1	%

Quarterly inflation rate***		-0.35	%		1.38	%		1.45	%

Avg. overnight interbank rate (nominal)		5.30	%		5.24	%		4.36	%

Avg. 10 year Central Bank yield (real)		2.78	%		3.13	%		3.20	%


*	Annualized
**	Client net interest income divided by average loans
***	Inflation measured as the variation of the Unidad de Fomento in the quarter.

(1) The methodology for calculating client net interest income was modified in 4Q 2006. The margin derived from the spread earned over capital has been reclassified from client net interest income to non-client net interest income. Client net interest income is net interest income generated by our commercial areas. Non-client net interest income is net interest income generated by centralized activities, non-segmented portions of the balance sheet, capital and Financial Management. The area of Financial Management carries out the function of managing the structural interest rate risk, the structural position in inflation indexed assets and liabilities, shareholders’ equity and liquidity. The aim of Financial Management is to inject stability and recurrence into the net interest income of commercial activities.

Net interest income in 4Q 2006 decreased 9.2% compared to 4Q 2005 and 22.3% compared to 3Q 2006. This decrease was mainly due to a decline of the net interest margin from 4.8% in 4Q 2005 to 4.0% in 4Q 2006. The main reason for this decline in margins was the negative inflation rate in the quarter which reached -0.35% in 4Q 2006 compared to 1.45% in 4Q 2005 and 1.38% in 3Q 2006.

Client net interest income. Client net interest income increased 17.1% YoY led by the 16.5% increase in average loans in the same period. Client net interest margins remained steady at 5.4% in 4Q 2006 compared to 4Q 2005. Compared to 3Q 2006, client net interest income increased 4.8% led by the 3.4% increase in average interest earning assets. Client net interest margin increased 10 basis points in the same period. The growth of retail lending activities and the positive evolution of non-interest bearing liabilities are the principal factors that explain the positive evolution of client net interest income and margins.

Investor Relations Department	7
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

Non-Client net interest income. Non-client net interest income totaled a loss of Ch$16,681 million compared to a gain of Ch$19,549 million in 4Q 2005 and Ch$29,649 million in 3Q 2006. This fall was mainly due to the negative inflation rate in the quarter. Inflation decreased substantially in the local market in line with the decline in the price of oil. The Bank has a positive gap in terms of inflation indexed assets and liabilities. Long-term assets are denominated, for the most part, in inflation indexed pesos and are funded, in part, with non-interest bearing checking accounts and capital.

In order to defend profitability, the Bank significantly lowered its net inflation-indexed asset gap mainly through the issuance of bonds in 3Q 2006 and the selling of long-term financial investments. At the same time, the Bank hedges part of the inflation gap. The results of these sales and the partial hedging of the inflation gap are reflected in the results from Financial Transactions (See Page 14).

Inflation rate is expected to reach between 2.5%-3.0% in 2007. Inflation rates in the first quarter of each year are usually low or negative; therefore, non-client net interest margins will probably continue to be under pressure until March 2007. The Central Bank, in response to this reduction of inflation, reduced interest rates to 5.0% in January 2007. This bodes well for loan growth, funding costs and client margins in 2007.

Message


	Source: Banco Central

Investor Relations Department	8
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

PROVISION FOR LOAN LOSSES

The coverage ratio rises to 188.1% on higher provisions in the retail segment

Provision for loan losses	Quarter									Change %

(Ch$ million)	4Q 2006			3Q 2006			4Q 2005 (reclassified)			4Q 2006/2005			4Q / 3Q 2006

Provisions		(13,569	)		(14,178	)		3,271			—	%		(4.3	)%
Charge-offs		(38,572	)		(34,168	)		(34,066	)		13.2	%		12.9	%

Gross provisions and charge-offs		(52,141	)		(48,346	)		(30,795	)		69.3	%		7.8	%

Loan loss recoveries		12,627			12,069			14,160			(10.8	)%		4.6	%

Net provisions		(39,514	)		(36,277	)		(16,635	)		137.5	%		8.9	%

Total loans		11,788,959			11,417,739			10,144,273			16.2	%		3.3	%

Total reserves		174,064			160,879			147,866			17.7	%		8.2	%
*Past due loans (PDL)**		92,559			88,863			106,540			(13.1	)%		4.2	%

Gross provision expense / loans**		1.77	%		1.69	%		1.21	%
Net provision expense / loans **		1.34	%		1.27	%		0.66	%
PDL/Total loans		0.79	%		0.78	%		1.05	%
Expected loss (RLL / loans)		1.45	%		1.38	%		1.42	%
RLL/Past due loans		188.1	%		181.0	%		138.8	%


*	Past due loans: installments or credit lines more than 90 days overdue
**	Annualized

The 137.5% YoY and the 8.9% QoQ increase in net provision expense was mainly due to: (i) The growth of lending to retail segments; (ii) The new credit scoring model. During 2006 the Bank improved its credit scoring systems for consumer loans, which in addition to non-performance, takes into account additional warning signals of negative credit behavior when calculating individual risk levels; (iii) the reduction in loan loss recoveries; The Bank is also reorganizing the recovery department in order to boost this unit’s performance. More collecting agents are being hired and a senior commercial officer was placed at the head of this division; and (iv) A slightly weaker than expected economic environment.

As a consequence of this increase in provision expense, asset quality indicators remained sound in the quarter. The past due loan ratio at year-end 2006 reached 0.79% down from 1.05% at year-end 2005 and flat compared to 3Q 2006. Reserve for loan losses increased 17.7% YoY and 8.2% QoQ, reflecting the change in asset mix towards retail lending and the Bank’s conservative approach to credit risk. As a result, the expected loan loss ratio (reserves for loan losses over total loans) increased to 1.45% in 4Q 2006 from 1.38% in 3Q 2006 and 1.42% in 4Q 2005. The coverage ratio of past due loans rose to 188.1% at year-end 2006 compared to 138.8% as of December 2005 and 181.0% as of September 2006. Going forward the Bank expects asset quality indicators to remain sound, but as the retail banking portfolio increases, provision expenses and the risk index should continue to rise.

Investor Relations Department	9
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

FEE INCOME

Growth in client base and product usage boosts retail banking fee income

Fee income	Quarter									Change %

	4Q 2006			3Q 2006			4Q 2005 (reclassified)			4Q 2006/2005			4Q / 3Q 2006
(Ch$ million)	4Q 2006			3Q 2006			4Q 2005 (reclassified)			4Q 2006/2005			4Q / 3Q 2006

Checking accounts		11,312			10,695			9,426			20.0	%		5.8	%
Adm. & collection of insurance policies		6,249			5,141			5,611			11.4	%		21.6	%
Mutual fund services		5,710			4,974			4,974			14.8	%		14.8	%
Credit cards		4,808			4,910			4,133			16.3	%		(2.1	)%
Automatic teller cards		3,351			3,646			3,822			(12.3	)%		(8.1	)%
Insurance brokerage		3,597			3,353			2,204			63.2	%		7.3	%
Lines of credit		3,134			2,943			2,636			18.9	%		6.5	%
Other product and services		4,044			6,585			6,778			(40.3	)%		(38.6	)%

Total fee income, net		42,205			42,247			39,584			6.6	%		(0.1	)%

Fees / operating expense		47.9	%		55.8	%		52.2	%

Net fee income increased 6.6% YoY in 4Q 2006 driven by a rise in clients and product usage. The Bank continues to expand its client base, cross-selling and product usage, especially in retail banking. The total number of clients has increased 8.8% since the beginning of the year to 2.40 million. There is no total client figure for the banking system, but in terms of total debtors, Santander’s client base increased 15.6% YoY compared to 11.1% YoY growth for the market as a whole. Market share in terms of debtors increased from 20.2% as of June 2005 to 21.0% as of June 2006, the latest figure available.

This rise in client base has been driven by the growth in our retail checking account base. The total number of retail clients with a checking account has increased 23.0% YoY in 2006. Santander has increased its total checking account base by 18.6% YoY as of August 2006, more than twice the rate of growth of the banking system that grew 8.2% in the same period. Market share in checking accounts reached 26.7% as of August 2006, the latest figure available, compared to 24.7% as of August 2005. As a result in 3Q 2006 fees from checking accounts increased 20.0% and fees from lines of credit rose 18.9% YoY.

A greater amount of clients with checking accounts coupled with important improvements in client service has led to better cross selling ratios. The amount of middle/upper income individual clients that are cross-sold (a client with a checking account and that uses at least three other products) increased 30.8% since December 2005. In Santander Banefe³, the amount of cross-sold clients (clients that uses at least 2 or more other products) rose 18.1% YoY as of December 2006.

3 In 3Q 2006 Santander Banefe modified its definition of cross-sold, therefore, figures presented in previous earnings releases are not strictly comparable to the figures presented here.

Investor Relations Department	10
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

More clients and greater product usage

Message

Credit card fees increased 16.3% YoY in 4Q 2006. According to information published by Transbank, the industry’s credit card processor, as of December 2006 purchases with Santander credit cards were growing 18.0% YoY in real terms in line with the market.

ATM fees decreased 12.3% YoY and 8.1% QoQ. Despite investment in the ATM network, intense competition has reduced fee growth from this product. The Bank continues an aggressive expansion plan of its ATM network in order to increase bank penetration levels and to ensure that greater product penetration is accompanied with greater product usage, especially in emerging sectors of the population. An extensive ATM network is key for this process. Usage of our debit/ATM cards has grown at a rapid pace. Market share in debit card usage increased from 21.5% as of December 2005 to 23.3% as of year-end 2006. Purchases with Santander debit cards increased 38.8% YoY compared to 28.3% for the industry. As of December 2006 the Bank had a network of 1,588 ATMs and installed 109 in 4Q 2006.

Message

Investor Relations Department	11
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

Insurance brokerage fees increased 63.2% YoY in 4Q 2006. Despite intense competition in this line of business that affected fee income in previous quarters, the launching of various new products and other sale campaigns has boosted insurance brokerage fees. Fees from the administration and collection of insurance policies increased 11.4% YoY in the same period. These fees are directly related to the growth of our mortgage loan book and lower-than-estimated claim rates, which results in higher administration fees paid by insurers to us.

Fees from mutual fund management increased 14.8% YoY in 4Q 2006. The strength of the stock markets in the second half of 2006 and the slowdown in inflation rates locally together with a successful performance of our funds fueled growth. Santander’s Latin American fund was the most profitable in Chile in 2006. The Bank also continued to launch more funds in the quarter in order to increase market share. Noteworthy, was the introduction of an innovative fund that guarantees an investor’s capital while assuring a return in line with stock market with a 30% cap. Market share in mutual fund management reached 22.1% at year-end 2006, increasing from 21.4% as of September 2006 and 21.6% as of year-end 2005.

In the quarter the Board of Directors has approved the merger between Santiago Corredores de Bolsa Ltda, a subsidiary of the Bank, and Santander Investment S.A. Corredores de Bolsa, which is currently not a subsidiary of the Bank. Santiago Corredores de Bolsa will absorb Santander Investment S.A. Corredores de Bolsa in January 2007. This will give a boost to the Bank’s participation in the stock brokerage business, especially among retail clients by better utilizing the Bank’s distribution network to brokerage shares.

This strong growth of retail driven fee activities was partially offset by the 40.3% YoY decline in other fees in 4Q 2006. This was mainly due to a decrease in fees from other advisory services to corporate clients, a decline in fees from the sales and purchase of foreign currencies and a fall in fees related to guarantees and pledges on behalf of corporate clients.

OPERATING EXPENSES AND EFFICIENCY

Op. expenses include one-time costs related to the signing of new collective bargaining agreement.

Operating Expenses	Quarter									Change %

(Ch$ million)	4Q 2006			3Q 2006			4Q 2005 (reclassified)			4Q 2006/2005			4Q / 3Q 2006

Adjusted personnel expenses*		41,496			38,468			36,773			12.8	%		7.9	%

Administrative expenses		29,943			27,563			27,425			9.2	%		8.6	%

Depreciation and amortization		10,000			9,650			11,562			(13.5	)%		3.6	%

Adjusted Operating expenses*		81,439			75,681			75,760			7.5	%		7.6	%

Adjusted Efficiency ratio*		42.9	%		35.9	%		45.6	%

One-time personnel expenses		6,622			—			—

Total op. expenses		88,061			75,681			75,760			16.2	%		16.4	%

Efficiency ratio**		46.5	%		35.9	%		45.6	%


*	Adjusted for one-time end of negotiation bonuses paid with the signing of the new collective bargaining agreement.
**	Operating expenses / operating income. Operating income = Net financial income + Net fee income + other operating income, net.

Investor Relations Department	12
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

In 4Q 2006 total operating expenses increased 16.2% YoY and 16.4% QoQ. Personnel expenses increased 30.9% YoY. In November 2006 we concluded the anticipated negotiations of the new collective bargaining agreement that was going to expire in 2007. This new collective bargaining agreement enters into effect in 2007 and expires in 2011. As part of this process, an end of negotiation bonus was paid. This bonus signified a cost of Ch$11,780 million (US$22 million) of which Ch$6,622 million (US$12.4 million) was recognized in 4Q 2006 and the rest had been provisioned for in previous periods. With the anticipation of our collective bargaining agreement, the Bank has set wage increases for the next 4 years. Excluding this one-time event, operating expenses increased 7.5% YoY in 4Q 2006 and the adjusted efficiency ratio reached 42.9% compared to 45.6% in 4Q 2005. Adjusted personnel expenses increased 12.8% YoY in 4Q 2006 in line with the 9.4% increase in headcount in the same period. Headcount growth has been focused in the front office to further boost growth in retail banking and maintain client service standards. The increase in personnel expenses was also due in part to an increase in variable income due to the Bank’s positive commercial performance in 2006.

The 9.2% YoY increase in administrative expenses was directly linked to the higher commercial activities and the larger distribution network. In the 4Q 2006 we created a new subsidiary, Santander Servicios de Recaudación y Pagos Ltda (Santander SuperCaja), whose main function will be to open and operate special payment centers where non-clients can become client, deposit checks and cashier checks and pay all types of services. These payment centers will operate seven days a week. In the 4Q 2006 this subsidiary opened 22 new payment centers. In total the Bank opened 45 branches in 2006. 29 were opened in 4Q 2006.

Message

Investor Relations Department	13
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

GAINS (LOSSES) ON FINANCIAL TRANSACTIONS

Mark-to-market and inflation hedging gains boosts the results from financial transactions

Gains and losses on financial transactions	Quarter									Change %

(Ch$ million)	4Q 2006			3Q 2006			4Q 2005 (reclassified)			4Q 2006/2005		4Q / 3Q 2006

Net gain (loss) from trading and mark-to-market		22,772			(5,056	)		(85,371	)		—		—

Foreign exchange transactions, net		(4,460	)		5,499			69,348			—		—

Gains (losses) on financial transactions*		18,312			443			(16,023	)		—		4,033.6	%

*For analysis purposes only, we have created the line item: Gains (losses) on financial transactions that is the sum of the net gain (loss) from trading, the mark-to-market of financial investment and derivatives, and foreign exchange transactions. The result recorded in foreign exchange transactions mainly includes the translation gains or losses of assets and liabilities denominated in foreign currency, but does not include the mark-to-market of FX derivatives. As Santander Chile limits its foreign exchange gap, the results recorded in foreign exchange transactions are, for the most part, offset by the mark-to-market of foreign currency forwards. For this reason they are added to the net gains (loss) from trading and mark-to-market, which includes the mark-to-market of FX forwards. Therefore, the most important items that impacts the line item Gains (losses) on financial transactions are: the net results from mark-to-market of financial investments categorized as trading, the mark-to-market of derivatives and hedged items, including hedging for inflation, net results from proprietary trading and the results from the sale of derivatives to clients.

In 4Q 2006 the gain on financial transactions totaled Ch$18,312 million compared to a loss of Ch$16,023 million in 4Q 2005 and a gain of Ch$443 million in 3Q 2006. In 4Q 2006, the sharp turnaround in inflation expectations pushed downwards long-term interest rates. This produced an increase in the gains from the mark-to-market of financial investments. At the same time and in order to minimize the impact of the negative inflation rates, the Bank lowered its net inflation-indexed asset gap, in part, by selling financial investments. Finally, these results also include the gain produced by the partial hedging of the inflation-indexed currency gap.

Message


	Source Central Bank

Investor Relations Department	14
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

Message

OTHER OPERATING INCOME/EXPENSES, OTHER INCOME/EXPENSES, PRICE LEVEL RESTATEMENT AND INCOME TAX

Other Income and Expenses	Quarter									Change %

(Ch$ million)	4Q 2006			3Q 2006			4Q 2005 (reclassified)			4Q 2006/2005			4Q / 3Q 2006

Sales force expense		(3,585	)		(4,148	)		(5,031	)		(28.7	)%		(13.6	)%
Other operating expenses, net		(4,284	)		(4,040	)		(3,081	)		39.0	%		6.0	%

Total other operating loss, net		(7,869	)		(8,188	)		(8,112	)		(3.0%	)		(3.9%	)

Non-operating income, net		9,055			6,270			139			6414.4	%		44.4	%
Income attributable to investments in other companies		(82	)		219			78			—			—
Losses attributable to minority interest		(41	)		(28	)		59			(169.5%	)		—

Total net non-operating results		8,932			6,461			276			3136.2	%		38.2	%

Price level restatement		2,480			(8,796	)		(6,178	)		—			—

Income tax		(12,516	)		(16,493	)		(10,661	)		17.4	%		(24.1	)%

Other operating results, net totaled a loss of Ch$7,869 million, decreasing 3.0% YoY. This line item mainly includes the variable sales force expenses. Total sales force expenses reached Ch$3,585 million in 4Q 2006 decreasing 28.7% YoY as the Bank has been utilizing more efficient means of selling products mainly through the call center and internet. This was offset by higher expenses related to customer service expenses, which consists primarily of expenses related to our call center, expenses paid to third parties for transporting funds for corporate customer and expenses relating to our credit card business.

Non-operating income, net totaled a gain of Ch$8,932 million in 4Q 2006 compared to a gain of Ch$276 million in 4Q 2005 and a gain of Ch$6,461 million in 3Q 2006. This gain was mainly due to the reversal of provisions for non-credit related contingencies. These contingencies are mainly related to non-credit risks, including non-specific contingencies, tax contingencies, legal contingencies and other impairments.

Price level restatement in the quarter totaled a gain of Ch$2,480 million. The Bank must adjust its capital and fixed assets for the variations in price levels. Since the Bank’s capital is larger than fixed assets, when inflation is positive, the Bank usually records a loss from price restatement and vice-versa. The negative inflation rate in 4Q 2006 (-0.35%) explains this result.

Investor Relations Department	15
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

Message

SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL

The Bank ends the year with a solid BIS ratio of 12.6%. ROAE in 2006 reached 24.1%.

Shareholders’ equity	Quarter ended									Change %

(Ch$ million)	Dec. 31, 2006			Sept. 30, 2006			Dec. 31, 2005			Dec. 2006/2005			Dec. /Sept. 2006

Total capital and reserves		961,661			965,615			857,432			12.2	%		(0.4	)%

Unrealized gain (loss) available for sale portfolio		(1,904	)		(3,191	)		(15,310	)		(87.6	)%		(40.3%	)%

Net Income		285,582			224,713			239,710			19.1	%		27.1	%

Total shareholders’ equity		1,245,339			1,187,137			1,081,832			15.1	%		4.9	%

Return on average equity (ROAE)		18.3	%		27.5	%		21.7	%

Shareholders’ equity totaled Ch$1,245,339 million as of December 31, 2006. In 4Q 2006 long-term rates declined, reducing the unrealized losses on the Bank’s available for sale portfolio recognized in equity. The Bank’s ROAE in 4Q 2006, reached 18.3%. The Bank’s 12 month ROAE in 2006 reached 24.1%. The Bank’s BIS ratio as of December 31, 2006 reached 12.6% with a Tier I ratio of 8.6%.

Capital Adequacy	Quarter ended									Change %

(Ch$ million)	Dec. 31, 2006			Sept. 30, 2006			Dec. 31, 2005			Dec. 2006/2005			Dec. /Sept. 2006

Tier I		959,757			962,424			842,122			14.0	%		(0.3	)%
Tier II		458,546			458,406			364,299			25.9	%		0.0	%

Regulatory capital		1,418,303			1,420,890			1,206,421			17.6	%		(0.2	)%

Risk weighted assets		11,222,348			11,068,534			9,362,393			19.9	%		1.4	%

Tier I ratio		8.6	%		8.7	%		9.0	%

BIS ratio		12.6	%		12.8	%		12.9	%

Investor Relations Department	16
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl

Message

INSTITUTIONAL BACKGROUND

As per latest public records published by the Superintendence of Banks for December 2006, Banco Santander Chile was the largest bank in Chile in terms of loans and deposits. The Bank has the highest credit ratings among all Latin American companies with an A rating from Standard and Poor’s, A+ by Fitch and an A2 rating from Moody’s, which are the same ratings assigned to the Republic of Chile. The stock is traded on the New York Stock Exchange (NYSE: SAN) and the Santiago Stock Exchange (SSE: Bsantander). The Bank’s main shareholder is Santander, which controls 76.71% of Banco Santander Chile.

Santander (SAN.MC, STD.N) is the largest bank in the euro zone by market capitalization and seventh in the world by profit. Founded in 1857, Santander has EUR 833,873 million in assets and EUR 1,000,996 million in managed funds, 67 million customers, 10,852 branches and a presence in 40 countries. It is the largest financial group in Spain and Latin America, and is the sixth largest bank in the United Kingdom, through its Abbey subsidiary, and operates in Portugal, where it is the third largest banking group. Through Santander Consumer Finance, it also operates a leading consumer finance franchise in Germany, Italy, Spain and nine other European countries. In 2006, Santander registered 7,596 million euros in net attributable profits, an increase of 22% from the previous year.

In Latin America, Santander manages over US$250 billion in business volumes (loans, deposits, mutual funds, pension funds and managed funds) through 4,370 offices. In 2006, Santander reported US$1,409 million in net attributable income in Latin America, 29% higher than the prior year.

CONTACT INFORMATION

Robert Moreno
Manager

Investor Relations Department
Banco Santander Chile
Bandera 140 Piso 19,
Santiago,
Chile

Tel: (562) 320-8284
Fax: (562) 671-6554
Email: rmorenoh@santandersantiago.cl
Website: www.santandersantiago.cl

Investor Relations Department	17
Bandera 140 19^th Floor, Santiago, Chile, Tel: 562-320-8284, fax: 562-671-6554,
email: rmorenoh@santandersantiago.cl




	BANCO SANTANDER - CHILE, AND SUBSIDIARIES
	UNAUDITED CONSOLIDATED BALANCE SHEETS
	(In millions of nominal Chilean pesos)

	31-Dec 2006			31-Dec 2006			30-Sep 2006			31-Dec 2005			% Change December 2006 / 2005			% Change Dec. / Sept. 2006

	US$ thousands			Ch$ millions			Ch$ millions			Ch$ millions
										(Reclassified)
A S S E T S
Cash and due from banks
Noninterest bearing		1,773,368			947,741			716,085			1,013,857			(6.5	)%		32.4	%
Interbank deposits-interest bearing		270,692			144,666			307,289			211,105			(31.5	)%		(52.9	)%

Total cash and due from banks		2,044,060			1,092,407			1,023,374			1,224,962			(10.8	)%		6.7	%

Financial investments
Trading		1,196,529			639,461			671,975			661,929			(3.4	)%		(4.8	)%
Available for sale		645,750			345,108			602,872			563,091			(38.7	)%		(42.8	)%
Held to maturity		0			0			0			0
Investment collateral under agreements to repurchase		57,645			30,807			14,422			23,120			33.2	%		113.6	%

Total financial investments		1,899,924			1,015,376			1,289,269			1,248,140			(18.6	)%		(21.2	) %

Loans, net
Commercial loans		7,574,839			4,048,221			4,082,361			3,655,101			10.8	%		(0.8	)%
Consumer loans		3,369,023			1,800,507			1,692,432			1,392,012			29.3	%		6.4	%
Mortgage loans (Financed with mortgage bonds)		909,098			485,849			525,963			634,723			(23.5	)%		(7.6	) %
Foreign trade loans		1,387,976			741,776			656,171			511,756			44.9	%		13.0	%
Interbank loans		283,463			151,491			134,609			194,652			(22.2	)%		12.5	%
Leasing		1,430,324			764,408			754,572			663,862			15.1	%		1.3	%
Other outstanding loans		5,017,422			2,681,461			2,519,305			2,056,155			30.4	%		6.4	%
Past due loans		173,192			92,559			88,863			106,540			(13.1	)%		4.2	%
Contingent loans		1,913,603			1,022,687			963,463			929,472			10.0	%		6.1	%
Reserves		(325,700	)		(174,064	)		(160,879	)		(147,866	)		17.7	%		8.2	%

Total loans, net		21,733,240			11,614,895			11,256,860			9,996,407			16.2	%		3.2	%

Derivatives		697,356			372,688			305,641			410,101			(9.1	)%		21.9	%

Other assets
Bank premises and equipment		432,910			231,360			222,441			221,375			4.5	%		4.0	%
Foreclosed assets		29,517			15,775			14,373			18,909			(16.6	)%		9.8	%
Investments in other companies		12,451			6,654			6,941			6,696			(0.6	)%		(4.1	)%
Assets to be leased		56,683			30,293			23,619			20,990			44.3	%		28.3	%
Other		868,196			463,991			483,377			333,070			39.3	%		(4.0	)%

Total other assets		1,399,757			748,073			750,751			601,040			24.5	%		(0.4	)%

TOTAL ASSETS		27,774,337			14,843,439			14,625,895			13,480,650			10.1	%		1.5	%




	BANCO SANTANDER - CHILE, AND SUBSIDIARIES
	UNAUDITED CONSOLIDATED BALANCE SHEETS
	(In millions of nominal Chilean pesos)

	31-Dec 2006		31-Dec 2006		30-Sep 2006		31-Dec 2005		% Change December 2006 / 2005			% Change Dec / Sept. 2006

	US$ thousands		Ch$ millions		Ch$ millions		Ch$ millions
							(Reclassified)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Current accounts		3,112,501		1,663,414		1,487,518		1,455,924		14.3	%		11.8	%
Bankers drafts and other deposits		1,533,565		819,583		787,028		712,887		15.0	%		4.1	%

Total non-interest bearing deposits		4,646,066		2,482,997		2,274,546		2,168,811		14.5	%		9.2	%

Savings accounts and time deposits		12,928,419		6,909,335		6,816,812		5,906,711		17.0	%		1.4	%

Total deposits		17,574,485		9,392,332		9,091,358		8,075,522		16.3	%		3.3	%

Other interest bearing liabilities
Banco Central de Chile borrowings
Credit lines for renegotiation of loans		9,505		5,080		5,487		6,654		(23.7	)%		(7.4	)%
Other Banco Central borrowings		251,515		134,417		184,147		173,206		(22.4	)%		(27.0	)%

Total Banco Central borrowings		261,020		139,497		189,634		179,860		(22.4	)%		(26.4	) %

Investments sold under agreements to repurchase		37,290		19,929		73,434		49,779		(60.0	)%		(72.9	) %

Mortgage finance bonds		992,096		530,206		560,334		668,961		(20.7	)%		(5.4	) %

Other borrowings
Bonds		1,058,423		565,653		559,165		415,243		36.2	%		1.2	%
Subordinated bonds		917,643		490,416		490,974		385,751		27.1	%		(0.1	) %
Borrowings from domestic financial institutions		0		0		3,777		2,528		(100.0	)%
Foreign borrowings		1,519,875		812,267		924,776		1,098,246		(26.0	)%		(12.2	) %
Other obligations		120,115		64,193		43,235		42,092		52.5	%		48.5	%

Total other borrowings		3,616,056		1,932,529		2,021,927		1,943,860		(0.6	)%		(4.4	)%

Total other interest bearing liabilities		4,906,462		2,622,161		2,845,329		2,842,460		(7.8	)%		(7.8	)%

Derivatives		665,984		355,922		307,621		383,689		(7.2	)%		15.7	%

Other liabilities
Contingent liabilities		1,916,150		1,024,048		964,924		931,318		10.0	%		6.1	%
Other		378,189		202,115		228,037		164,365		23.0	%		(11.4	)%
Minority interest		2,848		1,522		1,489		1,464		4.0	%		2.2	%

Total other liabilities		2,297,187		1,227,685		1,194,450		1,097,147		11.9	%		2.8	%

Shareholders’ equity
Capital and reserves		1,795,852		959,757		962,424		842,122		14.0	%		(0.3	)%
Income for the year		534,367		285,582		224,713		239,710		19.1	%		27.1	%

Total shareholders’ equity		2,330,219		1,245,339		1,187,137		1,081,832		15.1	%		4.9	%

TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY		27,774,337		14,843,439		14,625,895		13,480,650		10.1	%		1.5	%

BANCO SANTANDER CHILE
QUARTERLY INCOME STATEMENTS
Million of nominal Chilean pesos

	IVQ 2006			IVQ 2006			IIIQ 2006			IVQ 2005			% Change IVQ 2006/2005			% Change IVQ / IIIQ 2006

	US$ thousands			Ch$ millions			Ch$ millions			Ch$ millions (Reclassified)
Interest income and expense
Interest income		474,391			253,529			356,538			304,230			(16.7	)%		(28.9	)%
Interest expense		(218,233	)		(116,630	)		(180,320	)		(153,505	)		(24.0	)%		(35.3	)%

Net interest income		256,159			136,899			176,218			150,725			(9.2	)%		(22.3	)%

Provision for loan losses		(73,937	)		(39,514	)		(36,277	)		(16,635	)		137.5	%		8.9	%

Fees and income from services
Fees and other services income		97,132			51,910			50,458			48,314			7.4	%		2.9	%
Other services expense		(18,160	)		(9,705	)		(8,211	)		(8,730	)		11.2	%		18.2	%

Total fee income		78,972			42,205			42,247			39,584			6.6	%		(0.1	)%

Market related income
Net gain (loss) from trading and mark-to-market		42,610			22,772			(5,056	)		(85,371	)		—			—
Foreign exchange transactions,net		(8,345	)		(4,460	)		5,499			69,348			—			—

Total gains (losses) on financial transactions		34,265			18,312			443			(16,023	)		—			4033.6	%

Operating expenses
Personnel salaries and expenses		(90,036	)		(48,118	)		(38,468	)		(36,773	)		30.9	%		25.1	%
Administrative and other expenses		(56,028	)		(29,943	)		(27,563	)		(27,425	)		9.2	%		8.6	%
Depreciation and amortization		(18,712	)		(10,000	)		(9,650	)		(11,562	)		(13.5	)%		3.6	%

Total operating expenses		(164,776	)		(88,061	)		(75,681	)		(75,760	)		16.2	%		16.4	%

Other operating income, net
Other operating income, net		(14,724	)		(7,869	)		(8,188	)		(8,112	)		(3.0	)%		(3.9	)%

Other income and expenses
Nonoperating income, net		16,943			9,055			6,270			139			6414.4	%		44.4	%
Income attributable to investments in other companies		(153	)		(82	)		219			78			—			—
Losses attributable to minority interest		(77	)		(41	)		(28	)		59			(169.5	)%		—

Total other income and expenses		16,713			8,932			6,461			276			3136.2	%		38.2	%

Gain (loss) from price-level restatement		4,640			2,480			(8,796	)		(6,178	)		—			—

Income before income taxes		137,313			73,384			96,427			67,877			8.1	%		(23.9	)%
Income taxes		(23,419	)		(12,516	)		(16,493	)		(10,661	)		17.4	%		(24.1	)%

Net income		113,893			60,868			79,934			57,216			6.4	%		(23.9	)%

BANCO SANTANDER CHILE
YEAR-END INCOME STATEMENT
Million of nominal Chilean pesos

	12M 2006			12M 2006			12M 2005			% Change

	US$ thousands			Ch$ millions			Ch$ millions			2006/2005
Interest income and expense
Interest income		2,187,098			1,168,851			996,700			17.3	%
Interest expense		(1,041,478	)		(556,597	)		(450,023	)		23.7	%

Net interest income		1,145,621			612,254			546,677			12.0	%

Provision for loan losses		(230,193	)		(123,022	)		(63,532	)		93.6	%

Fees and income from services
Fees and other services income		371,098			198,326			169,786			16.8	%
Other services expense		(66,942	)		(35,776	)		(31,420	)		13.9	%

Total fee income.		304,156			162,550			138,366			17.5	%

Market related income
Net gain (loss) from trading and mark-to-market		187,705			100,315			(61,269	)		(263.7	)%
Foreign exchange transactions,net		(91,140	)		(48,708	)		70,878			(168.7	)%

Total market related income		96,565			51,607			9,609			437.1	%

Operating expenses
Personnel salaries and expenses		(298,866	)		(159,723	)		(139,220	)		14.7	%
Administrative and other expenses		(207,601	)		(110,948	)		(100,585	)		10.3	%
Depreciation and amortization		(72,251	)		(38,613	)		(39,248	)		(1.6	)%

Total operating expenses		(578,718	)		(309,284	)		(279,053	)		10.8	%

Other operating income, net
Other operating income, net.		(61,673	)		(32,960	)		(22,922	)		43.8	%

Other income and expenses
Nonoperating income, net		(7,885	)		(4,214	)		(22,012	)		(80.9	)%
Income attributable to investments in other companies		1,471			786			678			15.9	%
Losses attributable to minority interest		(288	)		(154	)		(133	)		15.8	%

Total other income and expenses		(6,702	)		(3,582	)		(21,467	)		(83.3	)%

Gain (loss) from price-level restatement		(25,788	)		(13,782	)		(18,140	)		(24.0	)%

Income before income taxes		643,267			343,781			289,538			18.7	%
Income taxes		(108,899	)		(58,199	)		(49,828	)		16.8	%

Net income		534,367			285,582			239,710			19.1	%

Financial Ratios

	1Q05			2Q05			3Q05			4Q05			1Q06			2Q 06			3Q06			4Q 06

Profitability
Return on average equity		20.5	%		25.7	%		26.8	%		21.7	%		22.8	%		28.7	%		27.5	%		18.3	%
Capital ratio
BIS		16.2	%		13.4	%		13.2	%		12.9	%		14.3	%		12.2	%		12.8	%		12.6	%
Earnings per Share
Net income (nominal Ch$mn)		53,960			62,101			66,433			57,216			64,434			80,345			79,934			60,868
Net income per share (Nominal Ch$)		0.29			0.33			0.35			0.30			0.34			0.43			0.42			0.32
Net income per ADS (US$)		0.51			0.59			0.69			0.61			0.67			0.81			1.81			0.63
Shares outstanding in million		188,446.1			188,446.1			188,446.1			188,446.1			188,446.1			188,446.1			188,447.1			188,446.1
Credit Quality
Past due loans/total loans		1.38	%		1.29	%		1.17	%		1.05	%		0.93	%		0.79	%		0.78	%		0.79	%
Reserves for loan losses/past due loans		138.8	%		140.9	%		132.7	%		138.8	%		148.5	%		166.6	%		181.0	%		188.1	%
Efficiency
Operating expenses/operating income		41.8	%		39.1	%		39.9	%		45.6	%		38.3	%		35.9	%		35.9	%		46.5	%
Market information (period-end)
Stock price		18.6			17.9			22.3			21.6			22.05			20.84			23.5			24.8
ADR price		33.13			32.3			43.87			44.6			43.6			40.34			45.25			48.16
Market capitalization (US$mn)		6,009			5,858			7,957			8,089			7,908			7,317			8,207			8,735
Network
ATMs		1,187			1,225			1,322			1,422			1,395			1,443			1,479			1,588
Branches		316			327			335			352			361			367			368			397
Other Data
Exchange rate (Ch/US$) (period-end)		586.45			578.92			533.69			514.21			527.7			547.31			538.22			534.43

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


Date: February 19, 2007	By:	/s/ Gonzalo Romero

	Name:	Gonzalo Romero
	Title:	General Counsel