UPDATE: Bank of America Downgrades Banco Santander Chile to Underperform on ST Weakness, Downward Trends

In a report published Monday, Bank of America analyst Jose Barria downgraded the rating on Banco Santander Chile

from Neutral to Underperform, and lowered the price target from $31.00 to $28.50. In the report, Barria noted, “We downgrade Santander Chile to Underperform (from Neutral) and lower its price objectives 9% to CLP 34.0 / US$ 28.5. Our downgrade and lower POs are driven by a significant cut to earnings estimates in 2013 (-16%) and 2014 (-17%), which underscores a challenging operating environment for banks despite still healthy economic growth in Chile. In the near term, we see a low inflation leading to weak NIMs, which could prompt reductions in Street estimates. Over a longer-term horizon, we see soft loan growth, NIM pressures, rising provisions and higher corporate taxes affecting earnings. These trends, plus a regulatory overhang and high valuations make Chilean financials unattractive at the moment.” Banco Santander Chile closed on Friday at $29.00.