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Transactions With Related Parties
 12 Months Ended
Dec. 31, 2021
Disclosure of related party [text block] [Abstract]  
TRANSACTIONS WITH RELATED PARTIES

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.

a)Loans to related parties:

 

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

 

   As of December 31, 
   2021   2020   2019 
   Group entities   Associates entities  

Key

personnel

   Other   Group entities   Associates entities  

Key

personnel

   Other   Group entities   Associates entities  

Key

personnel

   Other 
   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$ 
                                                 
Loans and accounts receivable:                                                
Commercial loans   592,992    192    2,611    219    352,590    265    3,939    900    246,868    375    2,986    685 
Mortgage loans   
-
    
-
    20,716    
-
    
-
    
-
    22,428    
-
    
-
    
-
    20,473    
-
 
Consumer loans   
-
    
-
    6,562    
-
    
-
    
-
    6,131    
-
    
-
    
-
    
5,781
    
-
 
Loans and accounts receivable:   592,992    192    29,889    219    352,590    265    32,498    900    246,868    375    29,240    685 
                                                             
Allowance for loan losses   (2,586)   (30)   (138)   (6)   (1,138)   (9)   (137)   (14)   (122)   (182)   (179)   (10)
Net loans   590,406    162    29,751    213    351,452    256    32,361    886    246,746    193    29,061    675 
                                                             
Guarantees   2,039    
-
    25,545    117    3,323    
-
    27,203    442    462,513    
-
    23,918    288 
Contingent loans:                                                            
Personal guarantees   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Letters of credit   13,848    
-
    
-
    
-
    3,447    
-
    
-
    93    4,112    
-
    
-
    63 
Guarantees   538    
-
    
-
    
-
    811    
-
    
-
    
-
    464,691    
-
    
-
    
-
 
Contingent loans:   14,386    
-
    
-
    
-
    4,258    
-
    
-
    93    468,803    
-
    
-
    63 
Allowance for contingent loans   (32)   
-
    
-
    
-
    (6)   
-
    
-
    
-
    (835)   
-
    
-
    
-
 
Net contingent loans   14,354    
-
    
-
    
-
    4,252    
-
    
-
    93    467,968    
-
    
-
    63 

 

Loan activity to related parties during 2021, 2020 and 2019 is shown below:

 

   As of December 31, 
   2021   2020   2019 
   Group entities   Associates entities   Key Personnel  

 

Other

   Group entities (*)   Associates entities   Key Personnel  

 

Other

   Group entities (*)   Associates entities   Key Personnel  

 

Other

 
   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$ 
Opening balances as of January 1,   356,848    265    32,498    993    715,671    375    29,240    748    572,745    459    33,871    7,899 
Loans granted   373,006    
-
    5,738    53    388,896    -    8,080    727    193,798    167    4,826    500 
Loans payments   (122,476)   (73)   (8,347)   (827)   (747,719)   (110)   (4,822)   (482)   (50,872)   (251)   (9,457)   (7,651)
Total   607,378    192    29,889    219    356,848    265    32,498    993    715,671    375    29,240    748 

(*)Loans with non-controlled companies (not-consolidated) amount MCh$1,174, MCh$2,286 and MCh$2,059 as of December 31, 2021, 2020 and 2019, respectively.

 

b)Assets and liabilities with related parties

 

   As of December 31, 
   2021   2020   2019 
   Group entities   Associates entities   Key personnel   Other   Group entities   Associates entities  

Key

personnel

   Other   Group entities   Associates entities  

Key

personnel

   Other 
   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$ 
Assets                                                
Cash and deposits in banks   1,069,468    
-
    
-
    
-
    703,069    
-
    
-
    
-
    171,816    
-
    
-
    
-
 
Trading investments   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Obligations under repurchase agreements
Loans		   
-
    
-
    
-
    
-
    
-
    
-
         
-
    
-
    
-
    
-
    
-
 
Financial derivative contracts   1,164,660    298,997    
-
    
-
    978,696    186,038    33    7    2,058,715    218,610    
-
    55 
Debt instrument at FVOCI   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Other assets   1,042,852    437,227    
-
    
-
    445,609    412,277    
-
    
-
    185,317    210,579    
-
    
-
 
Liabilities                                                            
Deposits and other demand liabilities   16,190    2,486    4,760    1,003    17,118    4,484    5,997    3,242    25,261    93,761    4,624    566 
Obligations under repurchase agreements
Loans		   57,771    
-
    181    5,807    961,718    
-
    101    
-
    138,498    5,000    270    80 
Time deposits and other time liabilities   900,830    1,677    3,066    948    1,409,404    100    4,706    864    1,183,235    282,171    4,246    2,204 
Financial derivative contracts   2,083,795    224,247    
-
    
-
    1,137,502    354,108    
-
    
-
    2,159,660    288,013    
-
    3 
Interbank borrowing   640,860    
-
    
-
    
-
    544,291    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Issued debt instruments   584,244    592,468    
-
    
-
    349,002    
-
    
-
    
-
    363,154    
-
    
-
    
-
 
Other financial liabilities   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    6,231    
-
    
-
    
-
 
Other liabilities   16,259    233,630    
-
    
-
    1,210    4,484    5,997    3,242    8,130    146,164    
-
    
-
 

 

c)Income (expense) recorded due to transactions with related parties

 

   For the years ended December 31, 
   2021   2020   2019 
   Group entities   Associates entities   Key personnel   Other   Group entities   Associates entities   Key personnel   Other   Group entities   Associates entities   Key personnel   Other 
   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$   MCh$ 
Income (expense) recorded                                                
Interest income and inflation-indexation adjustments   (24,428)   51    1,905    9    (30,586)   21    1,202    10    (41,181)   (5,235)   1,151    26 
Fee and commission income and expenses   134,404    25,445    202    11    46,823    22,596    152    24    28,274    14,499    232    28 
Net income (expense) from financial operations and net foreign exchange gain (loss) (*)   (751,605)   187,300    
-
    
-
    (390,737)   240,565    
-
    
-
    (586,318)   (84,236)   
-
    
-
 
Other operating income and expenses   552    (525)   
-
    
-
    492    (522)   
-
    
-
    406    (2,026)   
-
    
-
 
Key personnel compensation and expenses   
-
    
-
    (36,579)   
-
         
-
    (31,961)   
-
    
-
    
-
    (37,377)   
-
 
Administrative and other expenses   (66,895)   (54,953)   
-
    
-
    (45,478)   (16,763)   
-
    
-
    (11,877)   (47,757)   
-
    
-
 
                                                             
Total   (707,972)   157,318    (34,472)   20    (419,486)   245,897    (30,607)   34    (610,696)   (124,755)   (35,994)   54 

 

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

 

d)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, 
   2021   2020   2019 
   MCh$   MCh$   MCh$ 
             
Personnel compensation   16,067    16,220    16,264 
Board members’ salaries and expenses   1,539    1,452    1,358 
Bonuses or gratifications   18,458    12,583    16,104 
Stock-based benefits (*)   (315)   (1,589)   (315)
Seniority compensation   512    1,079    2,378 
Pension plans   (873)   1,026    567 
Training expenses   113    87    37 
Health funds   271    276    273 
Other personnel expenses   807    827    711 
Total   36,579    31,961    37,377 

 

(*)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.

 

e)Composition of key personnel

 

As of December 31, 2021, 2020 and 2019, the composition of the Bank’s key personnel is as follows:

 

Position  N° of executives 
As of December 31,   
   2021   2020   2019 
             
Director   11    11    10 
Manager   100    109    118 
                
Total key personnel   111    120    128