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Transactions with Related Parties

12 Months Ended

Dec. 31, 2019

Transactions with Related Parties [Abstract]

NOTE 35

TRANSACTIONS WITH RELATED PARTIES

In addition to affiliates and associated entities, the Bank's "related parties" include its "key personnel" from the executive staff (members of the Bank's Board of Directors and Managers of Banco Santander-Chile and its affiliates, together with their close relatives), as well as the entities over which the key personnel could exercise significant influence or control.

The Bank also considers the companies that are part of the Santander Group worldwide as related parties, given that all of them have a common parent, i.e., Banco Santander S.A. (located in Spain).

Transactions between the Bank and its related parties are specified below. To facilitate comprehension, we have divided the information into four categories:

Santander Group Companies

This category includes all the companies that are controlled by the Santander Group around the world, and hence, it also includes the companies over which the Bank exercises any degree of control (affiliates and special-purpose entities).

Associated companies

This category includes the entities over which the Bank, in accordance with section b) of Note 1 to these Financial Statements, exercises a significant degree of influence and which generally belong to the group of entities known as "business support companies".

Key personnel

This category includes members of the Bank's Board of Directors and managers of Banco Santander-Chile and its affiliates, together with their close relatives.

Other

This category encompasses the related parties that are not included in the groups identified above and which are, in general, entities over which the key personnel could exercise significant influence or control.

The terms for transactions with related parties are equivalent to those which prevail in transactions made under market conditions or to which the corresponding considerations in kind have been attributed.

Loans to related parties:

Below are loans and accounts receivable as well as contingent loans that correspond to related entities:

	As of December 31,
	2019												2018												2017
	Companies of the Group			Associated companies			Key personnel			Other			Companies of the Group			Associated companies			Key personnel			Other			Companies of the Group			Associated companies			Key personnel			Other
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$

Loans and accounts receivable:
Commercial loans		246,868			375			2,986			685			122,289			459			4,299			233			80,076			771			3,947			7,793
Mortgage loans		-			-			20,473			-			-			-			18,814			-			-			-			18,796			-
Consumer loans		-			-			5,781			-			-			-			5,335			-			-			-			4,310			-
Loans and accounts receivable:		246,868			375			29,240			685			122,289			459			28,448			233			80,076			771			27,053			7,793

Allowance for loan losses		(122	)		(182	)		(179	)		(10	)		(308	)		(9	)		(116	)		(5	)		(209	)		(9	)		(177	)		(18	)
Net loans		246,746			193			29,061			675			121,981			450			28,332			228			79,867			762			26,876			7,775

Guarantees		462,513			-			23,918			288			442,854			-			22,893			7,171			361,452			-			23,868			7,164

Contingent loans:
Personal guarantees		-			-			-			-			-			-			-			-			-			-			-			-
Letters of credit		4,112			-			-			63			5,392			-			2,060			44			19,251			-			-			33
Guarantees		464,691			-			-			-			445,064			-			3,364			-			377,578			-			-			-
Contingent loans:		468,803			-			-			63			450,456			-			5,424			44			396,829			-			-			33

Allowance for contingent loans		(835	)		-			-			-			(1	)		-			(18	)		-			(4	)		-			-			1

Net contingent loans		467,968			-			-			63			450,455			-			5,406			44			396,825			-			-			34

Loan activity to related parties during 2019, 2018 and 2017 is shown below:

	As of December 31,
	2019												2018												2017
	Companies of the Group			Associated companies			Key Personnel			Other			Companies of the Group			Associated companies			Key Personnel			Other			Companies of the Group			Associated companies			Key Personnel			Other
	MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$

Opening balances as of January 1,		572,745			459			33,871			7,899			476,906			771			27,051			7,826			546,058			532			26,423			7,100
Loans granted		193,798			167			4,826			500			200,657			39			16,574			773			78,214			318			7,777			1,050
Loans payments		(50,646	)		(251	)		(9,457	)		(7,651	)		(104,818	)		(351	)		(9,754	)		(700	)		(147,366	)		(79	)		(7,149	)		(324	)

Total		715,897			375			29,240			748			572,745			459			33,871			7,899			476,906			771			27,051			7,826

Assets and liabilities with related parties

	As of December 31,
	2019								2018								2017
	Companies of the Group		Associated companies		Key personnel		Other		Companies of the Group		Associated companies		Key personnel		Other		Companies of the Group		Associated companies		Key personnel		Other
	MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$		MCh$

Assets
Cash and deposits in banks		171,816		-		-		-		189,803		-		-		-		74,949		-		-		-
Trading investments		-		-		-		-		-		-		-		-		-		-		-		-
Obligations under repurchase agreements Loans		-		-		-		-		-		-		-		-		-		-		-		-
Financial derivative contracts		2,058,715		218,610		-		55		748,632		105,358		-		9		545,028		86,011		-		-
Available for sale investments		-		-		-		-		-		-		-		-		-		-		-		-
Other assets		185,317		210,579		-		-		38,960		51,842		-		-		8,480		118,136		-		-

Liabilities
Deposits and other demand liabilities		25,261		93,761		4,624		566		27,515		21,577		2,493		480		24,776		25,805		2,470		221
Obligations under repurchase agreements Loans		138,498		5,000		270		80		6,501		-		329		68		50,945		-		-		-
Time deposits and other time liabilities		1,183,235		282,171		4,246		2,204		2,585,337		-		3,189		838		785,988		27,968		3,703		3,504
Financial derivative contracts		2,159,660		288,013		-		3		770,624		112,523		-		-		418,647		142,750		-		7,190
Interbank borrowing		-		-		-		-		-		-		-		-		-		-		-		-
Issued debt instruments		363,154		-		-		-		335,443		-		-		-		482,626		-		-		-
Other financial liabilities		6,231		-		-		-		6,807		-		-		-		4,919		-		-		-
Other liabilities		8,130		146,164		-		-		60,884		89,817		-		-		164,303		58,168		-		-

Income (expense) recorded due to transactions with related parties

	For the years ended December 31,
	2019											2018												2017
	Companies of the Group			Associated Companies			Key personnel			Other		Companies of the Group			Associated companies			Key personnel			Other			Companies of the Group			Associated Companies			Key personnel			Other
	MCh$			MCh$			MCh$			MCh$		MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$			MCh$

Income (expense) recorded
Interest income and inflation-indexation adjustments		(41,181	)		(5,235	)		1,151			26		(53,256	)		(156	)		1,252			508			(43,892	)		-			1,051			-
Fee and commission income and expenses		28,274			14,499			232			28		91,178			7,826			305			22			72,273			15,404			224			1
Net income (expense) from financial operations and net foreign exchange gain (loss) (*)		(586,318	)		(84,236	)		-			-		(566,677	)		65,727			27			(12	)		363,108			(48,453	)		(3	)		19
Other operating income and expenses		406			(2,026	)		-			-		42			1,388			-			-			21,670			(1,454	)		-			-
Key personnel compensation and expenses		-			-			(37,377	)		-		-			-			(40,683	)		-			-			-			(43,037	)		-
Administrative and other expenses		(11,877	)		(47,757	)		-			-		(43,035	)		(50,764	)		-			-			(48,246	)		(47,220	)		-			-

Total		(610,696	)		(124,755	)		(35,994	)		54		(571,748	)		24,021			(39,099	)		518			364,913			(81,723	)		(41,765	)		20

(*) Primarily relates to derivative contracts used to financially cover exchange risk of assets and liabilities that cover positions of the Bank and its subsidiaries,

Payments to Board members and key management personnel

The compensation received by key management personnel, including Board members and all the executives holding manager positions shown in the "Personnel salaries and expenses" and/or "Administrative expenses" items of the Consolidated Statements of Income, corresponds to the following categories:

	For the years ended December 31,
	2019			2018			2017
	MCh$			MCh$			MCh$

Personnel compensation		16,264			16,924			16,863
Board members' salaries and expenses		1,358			1,230			1,199
Bonuses or gratifications		16,104			16,243			16,057
Stock-based benefits		(315	)		(337	)		1,923
Seniority compensation		2,378			4,202			3,842
Pension plans		566			1,069			2,039
Training expenses		37			210			68
Health funds		273			284			273
Other personnel expenses		712			858			773
Total		37,377			40,683			43,037

(*)

Some of the executives that qualified for this benefit left the Group for different reasons, without complying with the requirements to receive the benefit, therefore the obligation amount decreased, which generated the reversal of provisions.

Composition of key personnel

As of December 31, 2019, 2018 and 2017, the composition of the Bank's key personnel is as follows:

	N° of executives
Position	As of December 31,
	2019		2018		2017

Director		10		11		11
Division manager		12		12		13
Manager		106		108		109

Total key personnel		128		131		133