Banco Santiago poised to outperform.(Chilean banking industry)(Brief Article)(Statistical Data Included)

The Chilean banking sector performed strongly in the second quarter, with net income rising by 92% year-on-year in constant peso terms, and return on equity in the sector rising to 15%. Out of all these stocks, Banco Santiago looks to be the strongest pick, with its results outperforming its rivals in almost all areas. Although second half results should be lower - as the economy slows and regional problems spill over - its shares look set to outperform its rivals. Gustavo Teran, Latin America equity analyst for BBVA Securities, in New York, rates the stock a 'buy' at its current level of $22.35 per ADR, setting a yearend price target of $27.50, an implied 23% upside, excluding a 7% dividend. He believes that Santiago will continue to perform strongly, with the broad-based improvement in loan volumes, net interest margins, and fee income leading the way.

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