Banco Sabadell has closed the first half of 2020 with a net attributable profit of 145 million euros, 72.7% less compared to the same period last year after allocating 1,089 million euros to provisions for updating the IFRS9 accounting standards models that incorporate the new macroeconomic scenarios by Covid-19.
Without taking into account TSB, the British subsidiary of the Catalan group, the net attributable profit amounted to 217 million euros at the end of June, 59.1% less, as reported by the bank chaired by Josep Oliu to the National Commission on Friday of the Stock Market (CNMV).
The entity highlighted that the second quarter registered a “significant recovery” of activity in recent weeks, reaching pre-Covid-19 levels, which allows it to increase its market share in POS, credit card and insurance billing.
Income from the banking business (interest margin plus net commissions) reach 2,378 million, 5.3% less in year-on-year terms.
Specifically, the interest margin stood at 1,705 million euros at the end of June, 5.6% less, and the net commissions amounted to 673 million, a figure 4.6% lower than the previous year, due to the drop in activity and the exceptional situation in the first part of the second quarter.
Costs are contained and reduced by 0.3% compared to the previous year, standing at 1,562 million euros at the end of June and the efficiency ratio stands at 53.7%, thus improving by 107 basis points compared to the same period from the previous year.
Banco Sabadell highlighted that the capital ratio allows the current macroeconomic environment to be “solidly” addressed, as the premium quality CET1 ratio is reinforced and increased 55 basis points in the quarter, standing at 12.7% ‘phase-in ‘and 11.9%’ fully-loaded ‘in June.
Live gross loan investment closes the semester with a balance of 145,131 million and it presents a year-on-year growth of 2.4%, and in Spain it shows a growth of 4.1% year-on-year and 2.1% in the quarter, mainly driven by the granting of ICO loans to companies, SMEs and the self-employed and by mortgages.
On-balance sheet customer funds totaled 147,572 million euros and grew 4% year-on-year, driven by growth in sight accounts.
The balances of demand accounts amount to 123,888 million euros, 9% more due to the lower cash withdrawal during confinement, and time deposits total 23,966 million, 15.3% less, due to the transfer of deposits to accounts seen as a result of the environment of low interest rates.
Total off-balance sheet customer resources amounts to 41,718 million euros at the end of June 2020, and the total of managed resources stood at 211,886 million, representing an interannual increase of 1.6%.
Banco Sabadell has continued to make progress in reducing the problem assets over the last 12 months, which at the end of the first half showed a balance of 7,820 million euros, of which 6,359 million correspond to doubtful assets and 1,460 million to foreclosed assets.
Thus, the ratio of net problem assets to total assets is reduced to 1.6%, and the coverage of problem assets is 51.8%, so the coverage of doubtful loans reaches 55.6% and the coverage of foreclosed assets 35.2%.
The group’s non-performing loan ratio stands at 3.95%, a percentage that shows an improvement compared to the second quarter of the previous year, when it stood at 4.05%.
In the context of the coronavirus crisis, Banco Sabadell has granted 9,300 million euros in credit operations with ICO guarantee for SMEs, freelancers and companies, to which is added the concession to companies of 9,978 million euros in loans with Banco Sabadell guarantee until June 2020.
As for individuals. the bank has granted mortgage moratoriums for a value of 2,326 million euros, and 201 million euros in consumer moratoriums.
In this case, 969 million correspond to moratoriums covered by the Royal Decree, and a total of 1,559 million to sector moratoriums.