Moody's raises Santander rating to B-

International rating agency Moody's has raised its financial strength rating on Chilean bank Santander Chile (or Santander Santiago) (NYSE: STD) to B- from C+, with a stable outlook, Santander Santiago said in a statement. Moody's also affirmed the bank's long-term deposits at Baa1 and its subordinated debt at A3. The agency said that with the merger with Banco Santiago largely complete, Santander Chile (BSC) has positioned itself well to lead the Chilean market by leveraging the size and diversity of its franchise and customer relationships as well as its management strengths. The rating action reflects BSC's still dominant market shares in corporate and retail banking even after paring its balance sheet, its strong and diversified earnings, efficient structure, and solid capitalization. Since its accounting merger in August of 2002, the combined bank has displayed superior operating efficiency and profitability, the latter particularly on a risk-weighted basis. Moody's said it expects BSC's 2004 earnings to improve further as the bulk of credit and operations-related merger costs are behind it and in line with a stronger economy. Banco Santander Chile is Chile's largest bank with US$15.8bn in assets as of September 30. The bank posted a US$198mn net income during the first nine months this year. Spanish financial group SCH (NYSE: STD) owns 84.14% of the bank.