June 17, 2021

Sabadell will further reduce the workforce in its offices, which will be limited to selling mortgages, funds and pension plans


Banco Sabadell presented its strategic plan for the next three courses on Friday. This is the first strategy led by the newcomer CEO, César González-Bueno, and it comes after a difficult year for the bank after the failure of the merger with BBVA last winter. The Catalan entity will focus its direction on “improving the efficiency” of its service to individuals, as explained by the manager, which will affect the bank’s branch network.


Differences in valuation and precipitation collapse the BBVA and Sabadell merger negotiations

Differences in valuation and precipitation collapse the BBVA and Sabadell merger negotiations

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Specifically, González-Bueno has indicated that the use of the offices will focus on “the most complex products.” In other words, the Sabadell offices will focus on mortgages, investment funds or pension plans. With this, the bank intends to reduce the use of branches for services such as cash deposits or money withdrawals. In addition, other activities such as other credits, cards or accounts will be managed through telematic and digital means.

The entity has indicated that already in the first quarter of this year the staff in its branches has been reduced by 20%, with the plan of 1,800 incentivized exits of the older workforce announced at the end of 2020. “We will reduce it further in the future, also among the commercial team “, has influenced González-Bueno, who replaced Jaume Guardiola in the spring and has assumed the executive powers of the historic president of the entity, Josep Oliu. The manager explained that currently practically all accounts have to be opened in offices, which, as he explained, limits access to consumers most linked to digital channels, so he has ensured that this strategy will give access to “more potential customers”.

Sabadell implemented at the beginning of this course a cost reduction plan in Spain, with the aforementioned 1,800 departures, which has meant savings of 141 million. In the UK it is currently developing another “efficiency” plan that will result in savings of 70 million. And as González-Bueno has stated in a conference with analysts, a new cost “efficiency” plan in Spain is already advancing, which will mean another 100 million savings for the group and is expected for the first quarter of next year.

Regarding the new cost reduction plan in Spain, González-Bueno has avoided specifying before analysts about the impact that this cut will have on the workforce and the number of branches. “We are giving general guidelines because at the moment we are implementing it. The precise nature of how many offices and people and the specific details we reserve for the future,” he has settled questions from analysts.

The new strategic plan focuses Banco Sabadell’s efforts in Spain, although it maintains its commitment to the British subsidiary, TSB, once the entity has ruled out its sale for the moment. In its domestic market, Sabadell had a pending task in retail banking, while its activity in companies is one of the most important in the sector. In fact, the group marked this business as its main value in the merger it negotiated with BBVA, although the assessment made of this activity did not satisfy the bank’s managers. Now, Sabadell plans to grow over the next few years in the mortgage and consumer loan market above the industry average, gaining market share.

Sabadell points out as one of its strategies for the coming years an increase in income from commissions within all of its activity. Leopoldo Alvear, financial manager of the bank – from Bankia -, explained that this growth in commissions is due to a “more dynamic” commercial activity, new “insurance premiums” linked to mortgage loans, a growth in specialized products between companies medium size and an increase in the profitability of unrelated clients.

With this strategic plan, some points already advanced in recent months by the bank are confirmed. First of all, the objective is, for the moment, to continue alone. During the past year, Sabadell was identified on multiple occasions as a possible partner of Bankia for a potential merger, although it never materialized in an advanced negotiation. Subsequently, Sabadell attempted a union with BBVA, but there was no agreement between the parties regarding the assessment given to the bank. Second, TSB will remain within the bank during this strategic plan and the weight of its British subsidiary will grow among the credit granted by the bank.

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