Banco Sabadell catapults its profits to 393 million until June, 78% more
Banco Sabadell achieved a profit in the first half of 393 million euros. A figure that, when put into context compared to the same period of the previous year, represents 78% more, since between January and June 2021 the figure was 220 million. The entity continues to increase margins and profitability after having suffered greatly during the first year of the pandemic.
"Revenue from the banking business (net interest income + net commissions) reached 2,486 million, 3.8% more in year-on-year terms. The interest margin increased 4.2% year-on-year to 1,757 million, thanks to the greater contribution of TSB (14.3% more than the previous year). Net commissions stand at 729 million euros, which represents growth of 2.8% year-on-year", reported the bank, which highlights that they are fulfilling all its objectives of the strategic plan under the leadership of CEO César González-Bueno.
For its part, Sabadell also took advantage of the expense lever to boost business and profit. "Total costs amounted to 1,440 million euros at the end of June 2022, which represents a reduction of -4.8% compared to the same period of the previous year, mainly driven by savings in personnel expenses after carrying out the efficiency plans, as well as a reduction in general expenses", indicates its financial report.
The 'fully loaded' CET1 capital ratio stood at 12.48%, showing a good solvency position, while non-performing loans continued to be contained at 3.31%. In terms of profitability, the entity almost doubled the values recorded a year earlier in June: measured in ROE, it was 5.7%, and in terms of ROTE, 7.04%, in line with the targets set.
Also, Sabadell value the contribution of its British subsidiary TSB. "TSB has concluded the month of June 2022 with a positive contribution to the accounts of the Banco Sabadell group of 54 million euros, compared to 39 million euros in June 2021", they have indicated. This means that there are already six consecutive quarters in which this division, which caused so many problems in the past, contributes positively to the firm.
New “mortgage record”
As for mortgage production in the last quarter, it reached 1,501 million euros, which represents another "record" of production and an increase of 19% compared to the previous quarter, while live credit closes June with a balance of 158,074 millions.
Consumer credit increased by 17% quarter-on-quarter, reaching 805 million euros; card billing grew by 16% compared to the first quarter, to 5,541 million, and POS billing by 27%, to 12,111 million euros, in the quarter.
At the same time, investment funds totaled 22,538 million, a reduction of 5% quarter-on-quarter due to "volatility in financial markets."
Resources and deposits
In the six-month period, on-balance sheet customer funds reached 163,391 million euros (122,286 Ex TSB) and grew by 3.8% year-on-year (5.5% Ex TSB) and 1.3% in the quarter (2.7 % Ex TSB) due to the "positive" performance of sight accounts and term deposits.
Sight account balances amounted to 147,892 million (108,447 Ex TSB), with an increase of 5.6% year-on-year (7.6% Ex TSB) and increase of 0.9% (2% Ex TSB) in the quarter .
Term deposits total 15,980 million euros (14,320 Ex TSB) and are down 9.4% (7.3% Ex TSB) compared to the previous year; in the quarter they decreased by 3.9% (6.6% Ex TSB).
At the close of June, off-balance sheet customer funds stood at 38,831 million euros, down 4.7% year-on-year due to the sale of BancSabadell d'Andorra, and 4.4% quarter-on-quarter due to the volatility of financial markets.
Liquidity, capital and assets
The group's total assets amount to 257,229 million euros (205,047 Ex TSB), which represents a growth of 2.8% year-on-year and 1.6% in the quarter, and the CET1 'phase in' ratio stands at 12.61% at the end of June and grows 2bps compared to the previous quarter.
The fully-loaded CET1 ratio stands at 12.48% and increases 3bps in the quarter and the total phase-in capital ratio amounts to 17.11% at the end of the quarter, standing above the regulatory requirement with an MDA buffer of 415bps, while in liquidity management, the LCR (Liquidity Coverage Ratio) reaches 225% at the group level.
The entity has reduced problem assets in the quarter after the sale of the Austro portfolio of 400 million unsecured loans, and at the end of June they total 6,991 million, of which 5,714 million are doubtful loans and 1,277 million foreclosed assets.
The NPL ratio stands at 3.31% after falling quarterly and year-on-year, and the cost of credit risk stands at 40bps at the end of the second quarter of 2022, a reduction of 13bps in the year-on-year comparison.