Regulator eases Santander Santiago's capital requirement

The Chilean banking regulator Sbif announced it would lower the capital requirement on local bank Santander Santiago (NYSE:SAN) to 11% from 12% following the completion of its merger, the Sbif said in a report. The Sbif decided to ease Santander Santiago's total capital requirements or BIS ratio to 11% starting the first of January 2005. Santander Santiago's capital requirements were set at 12% in May 2002 following the regulator's approval of the merger between Banco Santander and Banco Santiago. The regulator changed the bank's capital requirements considering that the merger process had ended and to changes in its loan market share, as well as results from a solvency and management evaluation of the bank. "The relaxing of the bank's capital requirements is a positive sign for Santander Santiago, but the affects should not be very significant in terms of lending and other operations," CB Capitales analyst Ivan Rojas told BNamericas. "The banks lending portfolio is more affected by the overall performance of the economy and other factors. That being said, the bank's outlook for 2005 is very good and lending should be strong." Santander Santiago is Chile's largest bank and is a subsidiary of Spanish financial group Grupo Santander (NYSE: STD), which runs the largest banking franchise in Latin America and in Spain.