Banc Sabadell gains 78% boosted by its subsidiary TSB and lower costs

Sabadell Bank obtained an attributed net profit of 393 million euros until June, which represents an increase of 78% compared to the same period last year. The entity again benefited from the positive result provided by the British subsidiary, TSB, with 54 million euros, which already adds six quarters of positive contribution to the group; and the cost savings.

The recurring margin (net interest income + commissions – fees) increased by 13% quarter-on-quarter and 18.5% year-on-year. The entity has reached a return on equity (ROTE) of 7%with which it exceeded the objectives of the strategic plan and with forecasts are expected to exceed this level this yearpending the impact of the new banking tax.

The CEO, Cesar Gonzalez-Buenoensures that the bank meets “all the objectives of this year” and its transformation. Among the most significant milestones in retail banking, the deployment of 600 sales managers specializing in mortgages, insurance and savings-investment, the start of the new digital account, as well as the simulator and the new digital mortgage portal. Also in business.

And the chief financial officer, Leopold Alvear, points out that the risk profile “continues to improve, with a reduction in the NPL ratio and problem assets”. The solvency ratio stood at 12.48%, which represents an improvement of 30 basis points over the first six months of this year.

Income from banking activity (interest margin + net commissions) reached 2,486 million euros through June, up 3.8% year-on-year. Net interest income increased by 4.2% year-on-year, up to 1,757 million, thanks to the greater contribution of TSB (14.3% more than the previous year). And that data still doesn’t reflect rising interest rates, like Euribor, Alvear explained.

net commissions amounted to €729 million, representing year-on-year growth of 2.8%, also supported by a higher TSB contribution (14.8% more than the previous year). The sum of entity costs were 1,440 million through June and were down 4.8% year-on-yearabove all thanks to savings on personnel costs after the completion of the efficiency plans, as well as through a reduction in overheads. In the second quarter, total costs fell by 1.6%, in line with savings estimated at 110 million euros in 2022 (130 million per year from 2023).

mortgage file

For its part, Banc Sabadell’s outstanding loans closed the first half of this year with a balance of 158,074 million euros, which amounts to 114,171 million without including the TSB. Investment growth is 4.1% year-on-year driven by good momentum in all geographies, and 2.2% quarter-on-quarter. The main engine was the TSB.

Mortgage production in Spain stands out in the last quarter, which reached 1,501 million euros, “which represents an all-time production record and an increase of 19% compared to the previous quarter” and a share of 6.6% in March. New consumer loans increased by 17% quarter on quarter, reaching 805 million euros.

Card billings increased by 16% compared to the first quarter of the year, reaching 5,541 million, and point-of-sale (POS) terminal billings by 27% over the same period, standing at 12,111 million euros over the quarter. Both in the case of cards and point-of-sale terminals, it is also a “billing history“.

At the end of June 2022, customer funds on the balance sheet amounted to 163,391 million euros (122,286 million without the TSB) and increased by 3.8% over one year (5.5% without the TSB). During the quarter, they also increased by 1.3% (2.7% without the BST) due to theto the positive development of current accounts and term deposits. Current account balances reached 147,892 million euros (108,447 million without TSB), with an increase of 5.6%% over one year (7.6% without TSB) and an increase of 0.9% (2 .0% without TSB) over the quarter. Term deposits amounted to 15,980 million euros (14,320 million without BST) and fell by 9.4% (7.3% without BST).

End of June 2022, off-balance sheet customer funds they amounted to 38,831 million euros, down 4.7% over one year due to the sale of BancSabadell d’Andorra, and down 4.4% over one quarter due to market volatility financial. Investment funds amounted to 22,538 million, down 5% quarter-on-quarter due to financial market volatility. The group’s balance sheet total amounted to 257,229 million euros (205,047 million excluding TSB), which represents growth of 2.8% over one year and 1.6% over the quarter.

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The ‘phase in’ CET1 ratio stands at 12.61% at the end of June and gained 2 basis points compared to the previous quarter. For its part, the “full” CET1 ratio stood at 12.48% and increased by three basis points during the quarter. The ‘phase in’ total capital ratio stands at 17.11% at the end of the quarter and is above the regulatory requirement. With regard to liquidity management, the LCR (‘Liquidity Coverage Ratio’) reached 225% at group level.

The bone distressed assets They fell during the quarter after the sale of the Austro portfolio of 400 million “unsecured” loans materialized. They totaled 6,991 million euros at the end of June 2022, including 5,714 million in bad debts and 1,277 million in seized assets. Coverage of problematic assets stands at 52.3%, with coverage of doubtful outstandings (“stage 3”) with total provisions of 55.3% and 39.0% for seized assets. The crime rate to taste positive behavior and stands at 3.31%down both quarterly and annually.

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