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

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

Table of Contents

Item

1.		First Half 2009 Financial Statements (English, Free translation)

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

	By:	/s/ Juan Pedro Santa María
		Name: Juan Pedro Santa María
		Title: General Counsel

Date: August 19, 2009

BANCO SANTANDER CHILE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Refers to

	June 30			June 30			December 31			January 1
	2009 (in millions) CLP			2008 (in millions) CLP			2008 (in millions) CLP			2008 (in millions) CLP
ASSETS

Cash and bank deposits		942,065			1,280,559			855,411			1,108,637
Operations pending settlement		426,647			487,591			335,405			316,240
Instruments for trading		1,003,448			893,938			1,166,426			1,093,445
Repurchase contracts and securities loans		13,212			11,697			-			33,999
Financial derivative contracts		1,502,295			1,233,562			1,846,509			780,775
Owed by banks		57,800			150,406			95,499			45,961
Credits and accounts receivable from customers		13,087,295			12,954,140			14,311,349			12,022,275
Investment instruments available for sale		1,444,802			1,080,216			1,580,240			779,635
Investment instruments held to maturity		-			-			-			-
Equity in companies		7,145			7,786			7,277			7,301
Intangibles		69,356			58,526			68,232			56,224
Fixed assets		190,997			201,234			200,389			202,489
Current taxes		4,826			18,235			18,715			2,499
Deferred taxes		94,369			83,280			88,825			80,989
Other assets		561,407			586,288			508,655			460,282

TOTAL ASSETS		19,405,664			19,047,458			21,082,932			16,990,751
LIABILITIES

Demand deposits and other demand obligations		3,083,814			3,194,423			2,948,162			2,867,934
Operations pending settlement		195,249			297,611			142,552			135,219
Repurchase contracts and securities loans		512,279			294,438			562,223			307,630
Time deposits and other funds obtained		8,342,396			8,390,418			9,756,266			7,887,897
Financial derivative contracts		1,462,558			1,081,784			1,469,724			778,217
Obligations toward banks		1,140,901			1,505,196			1,425,067			1,099,457
Debt instruments issued		2,622,275			2,405,006			2,651,372			2,154,996
Other financial obligations		149,046			165,833			131,318			175,667
Current taxes		34,786			1,017			791			16,067
Deferred taxes		9,567			23,949			19,437			11,084
Provisions		122,990			92,938			166,719			50,102
Other liabilities		201,864			295,128			293,733			118,550

TOTAL LIABILITIES		17,877,725			17,747,741			19,567,364			15,602,820
SHAREHOLDERS’ EQUITY

Attributable to Bank shareholders:		1,497,019			1,276,028			1,489,689			1,369,797
Capital		891,303			818,535			891,303			818,535
Reserves		(16,960	)		(20,571	)		(123,726	)		(20,914	)
Valuation accounts		(14,199	)		(45,900	)		(7,552	)		(9,475	)
Retained profits:		636,875			523,964			729,664			581,651
Retained earnings from prior fiscal years		508,045			381,030			413,053			581,651
Profit (loss) for fiscal year		184,043			189,159			415,055			-
Minus: Provision for minimum dividends		(55,213	)		(46,225	)		(98,444	)		-

Minority Interest		30,920			23,689			25,879			18,134

TOTAL SHAREHOLDERS’ EQUITY		1,527,939			1,299,717			1,515,568			1,387,931

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		19,405,664			19,047,458			21,082,932			16,990,751

BANCO SANTANDER CHILE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

For the periods ended

	June 30			June 30
	2009 (in millions) CLP			2008 (in millions) CLP

OPERATING INCOME
Revenue from interest and adjustments		585,535			896,399
Expenses for interest and adjustments		(171,651	)		(488,143	)

Net revenue from interest and adjustments		413,884			408,256

Fee revenue		155,840			144,773
Fee expenses		(31,064	)		(24,854	)

Revenue net of fees		124,776			119,919

Net profit from financial operations		566			74,656
Currency exchange profit (loss), net		97,905			(39,191	)
Other operating revenue		5,426			15,711

Total operating revenue		642,557			579,351

Credit risk provisions		(186,971	)		(131,913	)

NET OPERATING REVENUE		455,586			447,438

Personnel compensation and expenses		(112,095	)		(115,745	)
Administrative expenses		(67,706	)		(65,567	)
Depreciation and amortization		(22,586	)		(24,726	)
Deterioration		-			-
Other operating expenses		(27,710	)		(19,772	)

TOTAL OPERATING EXPENSES		(230,097	)		(225,810	)

OPERATING INCOME		225,489			221,628

Income from equity in companies		766			1,333

Income before income tax		226,255			222,961

Income tax		(38,075	)		(29,035	)

CONSOLIDATED PROFIT (LOSS) FOR FISCAL YEAR		188,180			193,926

Attributable to:
Bank shareholders		184,043			189,159
Minority Interest		4,137			4,767

Profit per share attributable to Bank shareholders:
(expressed in pesos)
Basic profit		0.9766			1.0038
Diluted profit		0.9766			1.0038

BANCO SANTANDER CHILE AND SUBSIDIARIES

CONSOLIDATED INTEGRAL STATEMENTS OF INCOME

For the periods ended

	June 30			June 30
	2009 (in millions) CLP			2008 (in millions) CLP
CONSOLIDATED PROFIT (LOSS) FOR FISCAL YEAR		188,180			193,926

OTHER INTEGRAL INCOME

Investment instruments available for sale		10,238			(27,999	)
Cash flow coverage		(17,417	)		(15,887	)
		-			-
Other integral income before income tax		(7,179	)		(43,886	)

Income tax related to other integral income		1,220			7,461

Total other integral income		(5,959	)		(36,425	)

CONSOLIDATED INTEGRAL RESULTS IN CURRENT FISCAL YEAR		182,221			157,501

Attributable to :
Bank shareholders		177,396			152,734
Minority Interest		4,825			4,767

	BANCO SANTANDER CHILE
	STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
	For the periods ended
	Figures in millions of pesos

			Reserves						Valuation Accounts									Retained Earnings
	Capital		Reserves and other retained profits			Merger of companies under common control			Investment instruments available for sale			Cash flow hedge			Other items	Income tax		Retained earnings from prior fiscal years			Profit in current fiscal year			Provision for minimum dividends			Total attributable to shareholders			Minority Interest			TOTAL SHAREHOLDERS’ EQUITY

Shareholders’ equity as of December 31, 2007		818,535		49,372			(2,042	)		(5,548	)		(5,867	)			1,940		273,004			308,647			-			1,438,041			20,047			1,458,088
Distribution of previous fiscal year’s income		-		-			-			-			-				-		308,647			(308,647	)		-			-			-			-
Subtotal		818,535		49,372			(2,042	)		(5,548	)		(5,867	)			1,940		581,651			-			-			1,438,041			20,047			1,458,088
Effect of first Application of IFRS		-		(68,244	)		-			-			-				-		-			-			-			(68,244	)		(1,913	)		(70,157	)
Shareholders’ equity as of January 1, 2008		818,535		(18,872	)		(2,042	)		(5,548	)		(5,867	)			1,940		581,651			-			-			1,369,797			18,134			1,387,931
Adjustments for Circular No. 3443 minimum dividends 2008		-		-			-			-			-				-		-			-			(92,594	)		(92,594	)		-			(92,594	)
Dividends/withdrawals made		-		-			-			-			-				-		-			-			-			-			-			-
Other changes of shareholders’ equity		-		343			-			-			-				-		-			-			-			296			(44	)		252
Provision for minimum dividends		-		-			-			-			-				-		-			-			(22,694	)		(22,694	)		-			(22,694	)
Subtotal		-		343			-			-			-				-		-			-			(115,288	)		(114,992	)		(44	)		(115,036	)
Other integral income		-		-			-			(27,999	)		(15,887	)			7,461		-			-						(11,680	)		-			(11,680	)
Income in fiscal year		-		-			-			-			-				-		-			85,997						85,997			2,589			88,586
Subtotal		-		-			-			(27,999	)		(15,887	)			7,461		-			85,997			-			74,317			2,589			76,906
Shareholders’ equity as of June 30, 2008		818,535		(18,529	)		(2,042	)		(33,547	)		(21,754	)			9,401		581,651			85,997			(115,288	)		1,329,122			20,679			1,349,801

Shareholders’ equity as of December 31, 2008		891,303		(121,684	)		(2,042	)		(19,972	)		10,873				1,547		413,053			415,055			(98,444	)		1,489,689			25,879			1,515,568
Distribution of income from previous fiscal year		-		-			-			-			-				-		415,055			(415,055	)		-			-			-			-
Subtotal		891,303		(121,684	)		(2,042	)		(19,972	)		10,873				1,547		828,108			-			(98,444	)		1,489,689			25,879			1,515,568
Replacement of monetary correction 2008		-		106,766			-			-			-				-		(106,766	)		-			-			-			-			-
Shareholders’ equity as of January 1, 2009		891,303		(14,918	)		(2,042	)		(19,972	)		10,873				1,547		721,342			-			(98,444	)		1,489,689			25,879			1,515,568
Increase or decrease of capital and reserves		-		-			-			-			-				-		-			-			-			-			-			-
Dividends/withdrawals made
Other changes of shareholders’ equity		-		-			-			-			-				-		(2	)		-			-			(2	)		(882	)		(884	)
Provision for minimum dividends		-		-			-			-			-				-		-			-			(22,995	)		(22,995	)		-			(22,995	)
Subtotal		-		-			-			-			-				-		(2	)		-			(22,995	)		(22,997	)		(882	)		(23,879	)
Other integral income		-		-			-			9,409			(17,417	)			1,361		-			-						(304	)		527			223
Income in fiscal year		-		-			-			-			-				-		-			76,652						76,652			2,879			79,531
Subtotal		-		-			-			9,409			(17,417	)			1,361		-			76,652			-			76,348			3,406			79,754
Shareholders’ equity as of June 30, 2009		891,303		(14,918	)		(2,042	)		(10,563	)		(6,544	)			2,908		721,340			76,652			(121,439	)		1,543,040			28,403			1,571,443

Dividends distributed:
Period	Total attributable to shareholders		Allocated to reserves or retained earnings		Allocated to Dividends		Percentage Distributed			Dividend per share (in pesos)
- Year 2007 (Shareholders Meeting April 2008)		308,647		108,028		200,619		65	%		1,065

- Year 2008 (Shareholders Meeting April 2009)		328,146		118,851		213,295		65	%		1,132

	BANCO SANTANDER CHILE AND SUBSIDIARIES
	CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the periods ended

	June 30			June 30
	2009 (in millions) CLP			2008 (in millions) CLP
FLOWS ARISING FROM OPERATING ACTIVITIES:

CONSOLIDATED PROFIT (LOSS) FOR FISCAL YEAR		188,180			193,926
Debits (credits) to income not implying changes of cash:
Depreciation and amortization		22,586			24,726
Provisions for credits, customer accounts receivable, and write-offs		206,625			131,913
Adjustment of financial instruments to market value		(41,227	)		(1,432	)
(Profit) Loss on equity in companies		(766	)		(918	)
(Profit) Loss on sale of assets received in payment		(2,239	)		(4,879	)
(Profit) Loss on sale of fixed assets		(207	)		677
Write-off of assets received in payment		2,869			2,151
Other debits (credits) not implying changes of cash		47,077			26,571
Net variation of interest, adjustments, and fees earned on assets and liabilities		(50,413	)		(20,630	)
Total Operating Flows		372,485			352,105
FLOW ARISING FROM INVESTMENT ACTIVITIES:
Net (increase) decrease of credits and accounts receivable		922,642			(1,098,922	)
Net (increase) decrease of investments		754,758			(277,762	)
Purchases of fixed assets		(9,998	)		(6,760	)
Sales of fixed asset		11,312			2,103
(Increase) decrease of equity in companies		(79	)		-
Dividends received from equity in companies		790			606
Revenue from goods received in payment		15,246			12,187
Net increase (decrease) of other assets and liabilities		(70,529	)		(74,334	)
Total Investment Flows		1,624,142			(1,442,882	)
FLOW ARISING FROM FINANCING ACTIVITIES:
Increase (decrease) of receivables in current account		110,522			291,002
Increase (decrease) of deposits and receipts of funds		(1,384,048	)		502,522
Increase (decrease) of other demand or time obligations		42,505			25,447
Increase (decrease) of obligations for intermediation of documents		(259,267	)		120,568
Increase (decrease) of external loans, short and long-term		(283,240	)		297,160
Issuance of letters of credit		4,506			-
Redemption of letters of credit		(69,073	)		(66,802	)
Increase (decrease) of other short-term liabilities		13,608			2,399
Loans obtained from Central Bank of Chile (short term)		324,682			72,850
Payment of loans from Central Bank of Chile (short and long term)		(325,609	)		(74,366	)
Bond issues		201,346			202,929
Bond redemptions		(36,259	)		(9,248	)
Other Loans obtained, short and long term		3,307			107,767
Payment of other long-term loans		(1,006	)		-
Capital increase (decrease)		5,600			-
Dividends paid		(219,002	)		(200,570	)
Total Financing Flows		(1,871,428	)		1,271,658

SUB TOTAL		125,199			180,881
VARIATION OF CASH AND CASH EQUIVALENTS DURING THE PERIOD		125,199			180,881
INITIAL BALANCE OF CASH AND CASH EQUIVALENTS		1,048,264			1,289,658
FINAL BALANCE OF CASH AND CASH EQUIVALENTS		1,173,463			1,470,539

NOTE No. 1 ADOPTION OF THE COMPENDIUM OF ACCOUNTING STANDARDS FOR THE FIRST TIME:

The Superintendency of Banks and Financial Institutions (“SBIF”), jointly with other superintendencies and other regulatory agencies in Chile, adopted a plan for convergence with the International Financial Information Standards (“IFIS”), to internationalize the financial reporting models for publicly owned companies in Chile. In the framework of the strategic plan, the SBIF, through its Circular No. 3,410 of November 9, 2007, subsequently complemented by Circular No. 3,443 of August 21, 2008, announced the new “Compendium of Accounting Standards,” containing the new accounting and reporting standards for the financial industry that will become applicable as of January 1, 2009, based on the transitory standards established in Chapter E of that compendium.

By legal mandate, the banks must use the accounting criteria adopted by the SBIF, and in all matters not provided for therein nor contrary to their instructions, they must abide by the generally accepted accounting criteria which reflect the technical standards issued by the Colegio de Contadores de Chile A.G. (Chilean Accounting Association), coinciding with the international financial accounting and reporting standards adopted by the International Accounting Standards Board (“IASB”). In the event of discrepancies between the accounting principles and the accounting criteria issued by the SBIF (Compendium of Accounting Standards), the latter will prevail.

As a result of the aforementioned, the Bank adopted a plan for the transition to the new accounting standards that includes, among other things, an analysis of the differences of accounting criteria, the selection of the accounting criteria to be applied in the cases in which alternative treatments are permitted, and evaluation of the changes of procedure and information systems.

According to this transition plan, the standards of the new Compendium of Accounting Standards have been applied retroactively to January 1, 2008, and an opening balance sheet as of that date has been drawn up. Furthermore, with the aim of presenting comparative financial standards in 2009, the Bank drew up a set of pro forma financial statements for the year 2008.

Below is a breakdown and explanation of the principal impacts of the migration to these new accounting standards, in relation to the balance sheet and income statements.

a) Reconciliation of Shareholders’ Equity according to the new Compendium of Accounting Standards:

The principal adjustments in Shareholders’ Equity arising from the migration to the new Compendium of Accounting Standards are:

		Total Shareholders’ Equity
		As of January 1, 2008			As of June 30, 2008			As of December 31, 2008
	Explanation	CLP (in millions)			CLP (in millions)			CLP (in millions)

Shareholders’ equity before changes in standards			1,458,089			1,373,196			1,602,610

Adjustments:
Perimeter of consolidation	i		(14,453	)		(10,469	)		(9,712	)
Supporting companies	ii		506			762			719
Monetary correction	iii		-			(9,734	)		(30,493	)
Fixed and intangible assets	iv		(64,494	)		(62,896	)		(58,613	)
Goods received or given in payment:	v		(929	)		(586	)		(408	)
Write-offs of placements	vi		(2,205	)		(2,815	)		(4,235	)
Deferred taxes	vii		11,419			12,259			15,700
Subtotal			(70,156	)		(73,479	)		(87,042	)

Shareholders’ equity according to the new Compendium of Accounting Standards			1.387.931			1,299,717			1,515,568

(*) A detailed explanation of the nature of the principal adjustments is given in letter g).

As discussed above, these adjustments are generated by the adoption of the new SBIF Compendium of Accounting Standards; accordingly, they do not reflect a recognition of errors in prior fiscal years pursuant to NIC 8.

NOTE No. 1 ADOPTION OF THE COMPENDIUM OF ACCOUNTING STANDARDS FOR THE FIRST TIME, continuation:

b) Reconciliation of Income according to the new Compendium of Accounting Standards:

The principal adjustments in Income arising from the migration to the new Compendium of Accounting Standards are:

		Consolidated Income
		As of June 30, 2008			As of December 31, 2008
	Explanation	CLP (in millions)			CLP (in millions)

Income before changes in standards			156,095			331.017

Adjustments:
Perimeter of consolidation	i		3,985			4,742
Supporting companies	ii		256			213
Monetary correction	iii		31,419			78,027
Fixed and intangible assets	iv		1,598			5,881
Goods received or given in payment	v		343			521
Write-offs of placements	vi		(610	)		(2,030	)
Deferred taxes	vii		840			4,281
Subtotal			37,831			91,635

Income according to the new Compendium of Accounting Standards			193,926			422,652

(*) A detailed explanation of the nature of the principal adjustments is given in letter g).

c) Opening Balance Sheet according to the new Compendium of Accounting Standards:

As discussed above, the rules of the new Compendium of Accounting Standards were applied retroactively to January 1, 2008, to draw up the respective opening balance sheet under these new accounting standards.

Below is a presentation of the reconciliation of balances for the Balance Sheet, for which the following definitions apply:

Closing balances:

These are the balances shown in the consolidated financial statements of the Bank and its subsidiaries as of January 1, 2008, which were prepared in accordance with the previously applicable accounting criteria and principles.

Adjustments:

Changes arising chiefly in the valuation criteria and accounting policies modified by the new set of standards. Changes in the perimeter of consolidation prescribed by the new Compendium of Accounting Standards are included in this concept.

Opening Balances:

These are the balances reflecting the adjustments’ effect on the closing balance sheet.

NOTE No. 1 ADOPTION OF THE COMPENDIUM OF ACCOUNTING STANDARDS FOR THE FIRST TIME, continuation:

c) Opening Balance Sheet according to the new Compendium of Accounting Standards, continuation:

	As of January 1, 2008
	Closing Balances			Adjustments (*)			Opening Balances:
	(in millions) CLP			(in millions) CLP			(in millions) CLP
ASSETS

Cash and bank deposits		1,108,444			193			1,108,637
Operations pending settlement		316,240			-			316,240
Instruments for trading		1,090,004			3,441			1,093,445
Repurchase contracts and securities loans		33,999			-			33,999
Financial derivative contracts		780,775			-			780,775
Owed by banks		45,961			-			45,961
Credits and accounts receivable from customers		12,028,053			(5,778	)		12,022,275
Investment instruments available for sale		779,635			-			779,635
Equity in companies		6,795			506			7,301
Intangibles		56,187			37			56,224
Fixed assets		245,619			(43,130	)		202,489
Current taxes		1,933			566			2,499
Deferred taxes		61,260			19,729			80,989
Other assets		474,091			(13,809	)		460,282

TOTAL ASSETS		17,028,996			(38,245	)		16,990,751

LIABILITIES

Demand deposits and other demand obligations		2,868,769			(835	)		2,867,934
Operations pending settlement		135,219			-			135,219
Repurchase contracts and securities loans		308,651			(1,021	)		307,630
Time deposits and other funds obtained		7,887,897			-			7,887,897
Financial derivative contracts		778,217			-			778,217
Obligations toward banks		1,099,443			14			1,099,457
Debt instruments issued		2,154,996			-			2,154,996
Other financial obligations		147,868			27,799			175,667
Current taxes		15,897			170			16,067
Deferred taxes		10,877			207			11,084
Provisions		46,376			3,726			50,102
Other liabilities		116,698			1,852			118,550

TOTAL LIABILITIES		15,570,908			31,912			15,602,820

SHAREHOLDERS’ EQUITY

Attributable to Bank shareholders:		1,438,041			(68,244	)		1,369,797
Capital		818,535			-			818,535
Reserves		47,330			(68,244	)		(20,914	)
Valuation accounts		(9,475	)		-			(9,475	)
Retained earnings		581,651			-			581,651
Retained earnings from prior fiscal years		581,651			-			581,651
Profit (loss) for fiscal year		-			-			-
Minus: Provision for minimum dividends		-			-			-
Minority Interest		20,047			(1,913	)		18,134

TOTAL SHAREHOLDERS’ EQUITY		1,458,088			(70,157	)		1,387,931

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		17,028,996			(38,245	)		16,990,751

(*) A detailed explanation of the nature of the principal adjustments is given in letter g).

NOTE No. 1 ADOPTION OF THE COMPENDIUM OF ACCOUNTING STANDARDS FOR THE FIRST TIME, continuation:

d) Pro forma Balance Sheets:

To present comparative financial statements during the year 2009, the Bank drew up a set of pro forma financial statements for 2008; below is a presentation of the pro forma Balance Sheet presentation as of June 30 and December 31, 2008, respectively:

	As of June 30, 2008									As of December 31, 2008
	Old Standard			Adjustments (*)			Compendium of Accounting Standards			Old Standard			Adjustments (*)			Compendium of Accounting Standards
	(in millions) CLP			(in millions) CLP			(in millions) CLP			(in millions) CLP			(in millions) CLP			(in millions) CLP
ASSETS
Cash and bank deposits		1,280,337			222			1,280,559			854,838			573			855,411
Operations pending settlement		487,591			-			487,591			335,405			-			335,405
Instruments for trading		893,938			-			893,938			1,161,631			4,795			1,166,426
Repurchase contracts and securities loans		11,697			-			11,697			-			-			-
Financial derivative contracts		1,233,562			-			1,233,562			1,846,509			-			1,846,509
Owed by banks		150,406			-			150,406			95,499			-			95,499
Credits and accounts receivable from customers		12,960,626			(6,486	)		12,954,140			14,319,370			(8,021	)		14,311,349
Investment instruments available for sale		1,080,216			-			1,080,216			1,580,240			-			1,580,240
Equity in companies		6,865			921			7,786			6,990			287			7,277
Intangibles		61,458			(2,932	)		58,526			73,089			(4,857	)		68,232
Fixed assets		248,906			(47,672	)		201,234			260,105			(59,716	)		200,389
Current taxes		17,824			411			18,235			18,289			426			18,715
Deferred taxes		62,721			20,559			83,280			64,821			24,004			88,825
Other assets		593,297			(7,009	)		586,288			520,348			(11,693	)		508,655
TOTAL ASSETS		19,089,444			(41,986	)		19,047,458			21,137,134			(54,202	)		21,082,932
LIABILITIES
Demand deposits and other demand obligations		3,195,906			(1,483	)		3,194,423			2,949,757			(1,595	)		2,948,162
Operations pending settlement		297,611			-			297,611			142,552			-			142,552
Repurchase contracts and securities loans		295,494			(1,056	)		294,438			563,234			(1,011	)		562,223
Time deposits and other funds obtained		8,390,418			-			8,390,418			9,756,266			-			9,756,266
Financial derivative contracts		1,081,784			-			1,081,784			1,469,724			-			1,469,724
Obligations toward banks		1,505,176			20			1,505,196			1,425,065			2			1,425,067
Debt instruments issued		2,405,006			-			2,405,006			2,651,372			-			2,651,372
Other financial obligations		138,185			27,648			165,833			103,278			28,040			131,318
Current taxes		797			220			1,017			163			628			791
Deferred taxes		23,549			400			23,949			18,766			671			19,437
Provisions		88,971			3,967			92,938			162,165			4,554			166,719
Other liabilities		293,351			1,777			295,128			292,182			1,551			293,733
TOTAL LIABILITIES		17,716,248			31,493			17,747,741			19,534,524			32,840			19,567,364
SHAREHOLDERS’ EQUITY
Attributable to Bank shareholders:		1,350,580			(74,552	)		1,276,028			1,578,045			(88,356	)		1,489,689
Capital		818,535			-			818,535			891,303			-			891,303
Reserves		89,057			(109,628	)		(20,571	)		51,539			(175,265	)		(123,726	)
Valuation accounts		(45,900	)		-			(45,900	)		(7,552	)		-			(7,552	)
Retained earnings		488,888			35,076			523,964			642,755			86,909			729,664
Retained earnings from prior fiscal years		381,030			-			381,030			413,053			-			413,053
Profit (loss) for fiscal year		154,083			35,076			189,159			328,146			86,909			415,055
Minus: Provision for minimum dividends		(46,225	)		-			(46,225	)		(98,444	)		-			(98,444	)
Minority Interest		22,616			1,073			23,689			24,565			1,314			25,879
TOTAL SHAREHOLDERS’ EQUITY		1,373,196			(73,479	)		1,299,717			1,602,610			(87,042	)		1,515,568

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		19,089,444			(41,986	)		19,047,458			21,137,134			(54,202	)		21,082,932

(*) A detailed explanation of the nature of the principal adjustments is given in letter g).

NOTE No. 1 ADOPTION OF THE COMPENDIUM OF ACCOUNTING STANDARDS FOR THE FIRST TIME, continuation:

e) Pro forma Statements of Income:

As was discussed in the preceding point, the Bank drew up a set of pro forma financial statements for the year 2008, to present comparative information. Below is a presentation of the pro forma Statement of Income formulation for the periods ended June 30 and December 31, 2008, respectively:

	As of June 30, 2008									As of December 31, 2008
	Old Standard			Adjustments (*)			Compendium of Accounting Standards			Old Standard			Adjustments (*)			Compendium of Accounting Standards
	(in millions) CLP			(in millions) CLP			(in millions) CLP			(in millions) CLP			(in millions) CLP			(in millions) CLP
OPERATING INCOME
Revenue from interest and adjustments		896,507			(108	)		896,399			2,061,112			234			2,061,346
Expenses for interest and adjustments		(486,142	)		(2,001	)		(488,143	)		(1,164,071	)		(5,209	)		(1,169,280	)
Net revenue from interest and adjustments		410,365			(2,109	)		408,256			897,041			(4,975	)		892,066

Fee revenue		134,384			10,389			144,773			276,433			19,536			295,969
Fee expenses		(24,854	)		-			(24,854	)		(52,840	)		-			(52,840	)
Revenue net of fees		109,530			10,389			119,919			223,593			19,536			243,129

Net profit from financial operations		74,498			158			74,656			273,084			393			273,477
Currency exchange profit (loss), net		(39,191	)		-			(39,191	)		(187,042	)		-			(187,042	)
Other operating revenue		14,297			1,414			15,711			16,512			1,710			18,222
Total operating revenue		569,499			9,852			579,351			1,223,188			16,664			1,239,852

Credit risk provisions		(131,303	)		(610	)		(131,913	)		(285,953	)		(2,030	)		(287,983	)

NET OPERATING REVENUE		438,196			9,242			447,438			937,235			14,634			951,869
Personnel compensation and expenses		(96,139	)		(19,606	)		(115,745	)		(209,134	)		(37,641	)		(246,775	)
Administrative expenses		(80,667	)		15,100			(65,567	)		(161,977	)		28,295			(133,682	)
Depreciation and amortization		(24,552	)		(174	)		(24,726	)		(51,944	)		4,317			(47,627	)
Other operating expenses		(20,159	)		387			(19,772	)		(42,259	)		581			(41,678	)
Total operating expenses		(221,517	)		(4,293	)		(225,810	)		(465,314	)		(4,448	)		(469,762	)

OPERATING INCOME		216,679			4,949			221,628			471,921			10,186			482,107

Income from equity in companies		918			415			1,333			851			(219	)		632
Monetary correction		(31,419	)		31,419			-			(78,027	)		78,027			-
Income before income tax		186,178			36,783			222,961			394,745			87,994			482,739

Income tax		(30,083	)		1,048			(29,035	)		(63,728	)		3,641			(60,087	)

CONSOLIDATED PROFIT IN CURRENT FISCAL YEAR		156,095			37,831			193,926			331,017			91,635			422,652

Attributable to:
Bank shareholders		154,083			35,076			189,159			328,146			86,909			415,200
Minority Interest		2,012			2,755			4,767			2,871			4,726			7,597

Profit per share attributable to Bank shareholders:
(expressed in pesos)
Basic profit		0.818			-			1.0038			1.741			-			2.203
Diluted profit		0.818			-			1.0038			1.741			-			2.203

(*) A detailed explanation of the nature of the principal adjustments is given in letter g).

NOTE No. 1 ADOPTION OF THE COMPENDIUM OF ACCOUNTING STANDARDS FOR THE FIRST TIME, continuation:

f) Pro forma Statement of Cash Flow:

To furnish a reconciliation between the Statement of Cash Flows presented under the previous accounting standards for the period ended June 30, 2008 and the one included in these intermediate financial statements, a presentation of the formulation of this pro forma statement is given below:

	As of June 30, 2008
	Old Standard			Adjustments (*)			Compendium of Accounting Standards
	(in millions) CLP			(in millions) CLP			(in millions) CLP
FLOWS ARISING FROM OPERATING ACTIVITIES:
CONSOLIDATED PROFIT (LOSS) FOR FISCAL YEAR		156,095			37,831			193,926
Debits (credits) to income not implying changes of cash:
Depreciation and amortization		24,552			174			24,726
Provisions for credits, customer accounts receivable, and write-offs		150,224			(18,311	)		131,913
Adjustment of financial instruments to market value		5,419			(6,851	)		(1,432	)
(Profit) Loss on equity in companies		(918	)		-			(918	)
(Profit) Loss on sale of assets received in payment		(4,871	)		(8	)		(4,879	)
(Profit) Loss on sale of fixed assets		251			426			677
Write-off of assets received in payment		2,295			(144	)		2,151
Monetary correction		31,419			(31,419	)		-
Other debits (credits) not implying changes of cash		40,445			(13,874	)		26,571
Net variation of interest, adjustments, and fees earned on assets and liabilities		(26,967	)		6,337			(20,630	)
Total Operating Flows		377,944			(25,839	)		352,105
FLOW ARISING FROM INVESTMENT ACTIVITIES:
Net (increase) decrease of credits and accounts receivable		(812,681	)		(286,241	)		(1,098,922	)
Net (increase) decrease of investments		(80,243	)		(197,519	)		(277,762	)
Purchases of fixed assets		(8,135	)		1,375			(6,760	)
Sales of fixed asset		2,103			-			2,103
(Increase) decrease of equity in companies		34,180			(34,180	)		-
Dividends received from equity in companies		606			-			606
Revenue from goods received in payment		12,187			-			12,187
Net increase (decrease) of other assets and liabilities		(93,200	)		18,866			(74,334	)
Total Investment Flows		(945,183	)		(497,699	)		(1,442,882	)
FLOW ARISING FROM FINANCING ACTIVITIES:
Increase (decrease) of receivables in current account		226,834			64,168			291,002
Increase (decrease) of deposits and receipts of funds		247,742			254,780			502,522
Increase (decrease) of other demand or time obligations		3,855			21,592			25,447
Increase (decrease) of obligations for intermediation of documents		(24,162	)		144,730			120,568
Increase (decrease) of external loans, short and long-term		261,777			35,383			297,160
Redemption of letters of credit		(66,802	)		-			(66,802	)
Increase (decrease) of other short-term liabilities		(805	)		3,204			2,399
Loans obtained from Central Bank of Chile (short term)		180			72,670			72,850
Payment of loans from Central Bank of Chile (short and long term)		(1,036	)		(73,330	)		(74,366	)
Bond issues		202,929			-			202,929
Bond redemptions		(9,248	)		-			(9,248	)
Other long-term loans obtained		106,281			1,486			107,767
Dividends paid		(203,676	)		3,106			(200,570	)
Total Financing Flows		743,869			527,789			1,271,658
EFFECT OF INFLATION ON CASH AND CASH EQUIVALENTS		4,436			(4,436	)		-
VARIATION OF CASH AND CASH EQUIVALENTS DURING THE PERIOD		181,066			(185	)		180,881
INITIAL BALANCE OF CASH AND CASH EQUIVALENTS		1,331,115			(41,457	)		1,289,658
FINAL BALANCE OF CASH AND CASH EQUIVALENTS		1,512,181			(41,641	)		1,470,539

(*) A detailed explanation of the nature of the principal adjustments is given in letter g).

NOTE No. 1 ADOPTION OF THE COMPENDIUM OF ACCOUNTING STANDARDS FOR THE FIRST TIME, continuation:

g) Description of principal adjustments:

Below is a description of the nature of the principal effects or adjustments arising from the adoption of the new Compendium of Accounting Standards issued by the SBIF.

i. Perimeter of Consolidation

Pursuant to the standards in force up to December 31, 2007, Chapter 11-6 “Equity in Domestic Companies” of the Updated Compilation of Standards, the Bank included the subsidiaries and supporting companies within its perimeter of consolidation.

The companies belonging to the first category were consolidated by the overall integration (line to line) method, as follows:

	% of Equity Holding
COMPANY	Direct			Indirect			Total

Santander Corredores de Seguro Ltda.		99.75	%		0.01	%		99.76	%
Santander S.A. Corredores de Bolsa		50.59	%		0.41	%		51.00	%
Santander Asset Management S.A. Administradora General de Fondos		99.96	%		0.02	%		99.98	%
Santander S.A. Agente de Valores		99.03	%		-			99.03	%
Santander S.A. Sociedad Securitizadora		99.64	%		-			99.64	%
Santander Servicios de Recaudación y Pagos Limitada		99.90	%		0.10	%		100.00	%

The companies that supported the Bank’s operations, for their part, were valued by the equivalence method (VPP or VP), and the following entities were included:

COMPANY	% Equity Holding

REDBANC S.A.		33.42	%
Transbank S.A.		32.71	%
Automated Clearing House		33.33	%
Sociedad Interbancaria Depósitos de Valores S.A.		29.29	%
Cámara Compensación de Alto Valor S.A.		11.52	%
Administrador Financiero Transantiago S.A.		20.00	%
Sociedad Nexus S.A.		12.90	%

Upon the new Compendium of Accounting Standards’ entry into force, the Bank has been obligated to analyze and redefine its perimeter of consolidation, since the fundamental criterion to be applied now is the Bank’s degree of control over a given entity, not the percentage of its equity that the Bank holds.

As a result of this analysis, the following was determined:

The consolidation/valuation methods used up to December 31, 2008 will continue to be used for the subsidiaries and supporting companies. This is because it was concluded that the Bank controls the first category of companies and exerts significant influence on the second.

Furthermore, pursuant to the provisions of NIC 27 and SIC 12, the Bank must determine the existence of Special Purpose Entities (SPE), which must be included within the perimeter of consolidation. Their principal characteristics are:

The SPEs’ activities have essentially been conducted on behalf of the company that presents the consolidated financial statements, and in response to its specific business needs.

The entity has the necessary decision making powers to obtain most of the benefits from these entities’ activities, as well as the rights to obtain most of the benefits or other advantages from them.

The entity essentially retains for itself most of the risks inherent in the SPE’s ownership or residuals, or its assets, for the purpose of obtaining the benefits from its activities.

NOTE No. 1 ADOPTION OF THE COMPENDIUM OF ACCOUNTING STANDARDS FOR THE FIRST TIME, continuation:

g) Description of the principal adjustments, continuation:

Hence, it was concluded as a result of this evaluation that the Bank exerted control over a certain number of entities, which had to be incorporated into its perimeter of consolidation. They are:

- Santander Gestión de Recaudación y Cobranzas Ltda.

- Multinegocios S.A.

- Servicios Administrativos y Financieros Ltda.

- Servicios de Cobranzas Fiscalex Ltda.

- Multiservicios de Negocios Ltda.

- Bansa Santander S.A.

- Santander Multimedios S.A.

At the beginning of 2009 the Santander Multimedios S.A. company made a change in its line of business, as a result of which its revenue no longer depended chiefly on transactions with the Bank. Consequently, it was determined that the Bank no longer exerted control over it, and it should be excluded from the perimeter of consolidation commencing in March 2009.

This item generally includes the effects generated by the inclusion of the aforementioned companies in the Bank’s perimeter of consolidation. Also included are the collateral effects generated by those companies’ inclusion in the perimeter of consolidation, i.e., new adjustments for elimination of related party transactions (e.g., Placements), as well as acceleration of the disbursements which had previously been activated and earned, in Income over a given period of time.

ii. Supporting Companies

The particular effects generated by the New Compendium of Accounting Standards’ adoption on each of the different Supporting Companies are reflected in this item, with consideration in each case for the proportional effect generated by these effects/adjustments on the Bank’s shareholders’ equity, based on the percentage of these companies’ equity that is held by the Bank.

iii. Monetary correction

In accordance with the set of standards previously in force, the consolidated financial statements had been drawn up with an integral monetary correction, to reflect the effects of the changes in the Chilean peso’s purchasing during each period.

Pursuant to the new Compendium of Accounting Standards and NIC 29 “Financial Information in Hyperinflationary Economies,” a monetary correction will henceforth be applied only when the entity whose functional currency is that of a hyperinflationary economy (defined as an economy experiencing 100 percentage points of inflation in 3 years). The Bank’s functional currency is the Chilean pesos.

Since the Chilean economy does not meet the aforementioned requirements, the Bank was required to eliminate the monetary correction as of January 1, 2008. Pursuant to the provisions of Chapter E of the Compendium of Accounting Standards, the monetary correction applied up to December 31, 2007 was not reversed.

The adjustments for reversal of the monetary correction for the different assets and liabilities are included in this item. The monetary correction for the paid-up capital and reserves as of December 31, 2008, for its part, was not reversed, pursuant to the provisions of Chapter E of the Compendium of Accounting Standards and the need to maintain the existing paid-up capital and reserve amounts in accordance with the rules applied for legal purposes or as required by the bylaws.

NOTE No. 1 ADOPTION OF THE COMPENDIUM OF ACCOUNTING STANDARDS FOR THE FIRST TIME, continuation:

g) Description of the principal adjustments, continuation:

iv. Fixed and Intangible Assets

This item chiefly includes the effect generated by the recalculation of the depreciations and amortizations of the fixed assets in general and the intangible assets (software and information technology developments) as a result of the monetary correction’s elimination (as is described in point iii) and the determination of the attributable cost for the fixed assets as of January 1, 2008.

Pursuant to the provisions of Chapter E of the new Compendium of Accounting Standards, the Bank determined the cost attributed to its fixed assets as of January 1, 2008, electing the lower of each one’s historical cost (including its respective monetary corrections up to December 31, 2007) and its fair market value based on an appraisal thereof by an independent third-party appraiser.

v. Goods Received or Given in Payment:

Previously, goods received or given in payment (GRP) were valued at cost (the price agreed upon with the debtor for the transfer in payment or the value determined at a judicial auction, as the case might be, after monetary correction), minus a provision for individual valuation based on an independent appraisal. After a year, in compliance with the provisions of Article 84, section 5, of the General Banking Act, to make use of an additional term for the sale of goods received or given in payment, banks were required to write off goods in that status.

The most important change in the valuation of GRP in the Compendium of Accounting Standards, Chapter B-5 (in addition to the elimination of the monetary correction as described in point iii) is that, when making the provision for initial valuation, it is necessary to take into account its net realizable value, i.e., its fair market value (independent appraisal), minus the necessary costs of maintaining and divesting it.

According to the studies done by the Bank, an average cost of sale (the cost of maintaining and divesting the good) estimated at 5.8% of the appraised value was determined as of January 1, 2008; this cost rose to 6.5% as of December 31, 2008.

The effects generated by the application of the cost of sale described above are presented in this item.

vi. Write-offs of placements

Pursuant to the previous set of standards, the term for writing off past-due and late installments on credits and accounts receivable was calculated from the time of their classification in past-due portfolio, which represented transactions in arrears for payment of principal and interest by ninety days or more. This classification in past-due portfolio had previously been made on an installment by installment basis.

Pursuant to the provisions of Chapter B-2 of the new Compendium of Accounting Standards, the term for writing off credits and accounts receivable must now be calculated from the beginning of arrears for a particular transaction, thereby affecting 100% of the transaction whether it has a late, past-due, or current proportion.

NOTE No. 1 ADOPTION OF THE COMPENDIUM OF ACCOUNTING STANDARDS FOR THE FIRST TIME, continuation:

g) Description of the principal adjustments, continuation:

Below is a table showing the principal types of placements and their respective terms for write-off as stipulated by the new Compendium of Accounting Standards:

Type of contract		Term

Leasing Transactions

Leasing of consumer goods		6 months
Other non-real estate leasing transactions		12 months
Real estate leasing (commercial or housing)		36 months

Remaining Transactions

Consumer credits, with or without real security		6 months
Other transactions without real security		24 months
Commercial credits with real security		36 months
Housing mortgage credits		48 months

The Bank has classified the effects arising from the application of this new methodology for write-offs of credits and accounts receivable in this item, as well as the collateral effect generated in the provisions created for each transaction (when 100% of the transaction in this item is written off, the existing provisions must be released).

vii. Deferred taxes

This item brings together the tax effects (deferred taxes) generated by the timing differences arising, in turn, out of the aforementioned adjustments, whether they apply directly to shareholders’ equity or to income.

FELIPE CONTRERAS FAJARDO

Accounting Manager

ÓSCAR VON CHRISMAR CARVAJAL

General Manager