September 22, 2020

Banco Sabadell earns 768 million, 134% more, over the TSB crisis

Banco Sabadell has closed 2019 with a profit of 768 million euros, 134% more than in 2018, when its result was weighed down by the problems derived from the technological migration of its British subsidiary, TSB.

With these results, the board of directors of the entity has agreed to distribute a complementary cash dividend of 0.02 euros gross, which raises shareholder remuneration in 2019 to 0.04 euros gross per share.

The income of the banking business of the group, which includes the interest margin and net commissions, increased in the last year by 1%, up to 5,061 million, in an environment of negative rates.

The interest margin stands at 3,622 million, 1.4% less, while net commissions grow 7.7%, to 1,439 million, driven by the good performance of the service, with increases in all segments , according to the information sent to the CNMV, the stock market supervisor.

At the end of the year, the entity’s basic margin amounts to 5,061 million, 1% more, while the gross margin decreases 1.6%, to 4,932 million.

Sabadell highlights in a statement that in 2019 it has managed to reduce its costs by 1.8%, to 3,213 million, and improve its efficiency, which stands at 55.6%, compared to 58.3% the previous year .

The total endowments and impairments of 2019 amount to 938 million, 382 million less than the previous year.

As for the highest quality capital ratio, it has increased progressively in the last year, up to 11.7%, according to Sabadell, which tomorrow exposes the accounts at a press conference in Madrid.

At the end of 2019, the bank’s live credit stands at 144,572 million, 3.7% more year-on-year; the resources of clients in balance total 146,309 million, 6.5% more, and those of out of balance fall 2%, up to 43,163 million.

Sabadell, which manages a volume of resources of 213,095 million, 3.6% more, has intensified in the last year the activity of attracting companies and individuals, with 418,228 high and 258,550 new payrolls.

Regarding the activity in new mortgage and consumer loans, it grows by 11%, exceeding 6,300 million, as well as card billing (14%), protection insurance premiums (15%) or billing fees for sales terminals (17.2%).

The bank that presides over Josep Oliu has closed in 2019 the sale of several institutional portfolios, which has allowed it to reduce problematic assets on balance sheet and the delinquency rate, which now stands at 3.83%, compared to 4.22 % of end of 2018.

Thus, problematic assets in the balance sheet show a reduction of 954 million in the last year, leaving its balance at 7,326 million, of which 6,141 correspond to doubtful assets and 1,185 to foreclosed ones.

Also the British subsidiary of Sabadell, TSB, has shown in 2019 a favorable evolution, following the serious problems that led to its technological migration, which has allowed boosting the benefit of Sabadell.

TSB has initiated in the last months its new strategic plan, based on the improvement of the efficiency, the increase of the income of the banking business, the profitability and the digital transformation, and it anticipates to reach a profit of between 130 and 140 million pounds – between 154 and almost 166 million euros at the current exchange rate – in 2022.

The bank has registered a year-on-year growth of 8.5% of its living credit investment, up to 36,496 million, while the resources of clients in balance have reached 35,423 million, 9% more.

The total costs of TSB reach 1,052 million euros, representing a decrease of 8.4% compared to 2018, and the expenses derived from the restructuring amount to 50 million.


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