Sabadell Bank has closed the first quarter of 2022 with a net attributable profit of 213 million euros, nearly three times higher than a year earlier, due to lower costs and improved margins.
Without taking into account TSB (the British subsidiary of the Catalan group), net attributable profit stood at 194 million euros at the end of the first quarter, 2.7 times more, the bank reported this Thursday to the National Market Commission of Securities (CNMV).
The financial institution has raised the ‘fully-loaded’ CET1 capital ratio to 12.45% at the end of March 2022 and, in terms of liquidity, the LCR (Liquidity Coverage Ratio) stands at 235% at the level of group.
The entity has achieved a profitability (ROTE) of 6.5%, which is above the forecast in the strategic plan, which expected to achieve 6% in 2023.
The banking business income –Interest margin and net commissions– grew by 3.6% in year-on-year termsup to 1,217 million, and decreased by 3.5% compared to the previous quarter, while the net interest income increased by 3% year-on-year to 858 million, mainly due to volume growth.
Net commissions have increased by 5% compared to March 2021, to 359 million, due to “the good behavior of service and asset management commissions”, and in the quarter they decreased by 9.7% due to positive seasonality of the fourth quarter of last year.
Total costs decreases to 726 million at the end of March, 5.6% less than the previous year, mainly due to savings in personnel expenses, while in the quarterly comparison they are reduced by 4.3%, with the forecast that there will be a greater reduction in the coming quarters with savings estimated 110 million in 2022 and 130 per year from 2023.
Investment credit
Banco Sabadell’s outstanding credit closed the first quarter with a balance of 154,672 million (1,110,378 million Ex TSB); the investment growth is 3.1% year-on-year driven mainly by the increase in the mortgage portfolio, where the growth in TSB stands out.
The mortgage production in Spain reaches 1,261 million euros in the quarter, and consumer credit increased by 11% in year-on-year terms, reaching 371 million in the quarter.
Investment funds increased by 6% year-on-year to 23,848 million, and recorded growth in card billing of 27% year-to-year, to 4,793 million, and POS billing of 36% in the same period, standing at 9,500 million euros.
customer resources
At the end of March, customer funds on balance totaled 161,316 million euros (119,118 million Ex-TSB) and present a growth of 4.9% year-on-year (5.7% Ex TSB) –in the quarter they show a decrease of 0.4% due to maturities of retail issues–.
Sight account balances amounted to 146,520 million euros (106,279 million Ex TSB), with an increase of 8.2% year-on-year (9.7% ex TSB) and a slight decrease of 0.5% (0.3 % Ex TSB) in the quarter.
Total off-balance sheet customer funds amounted to 40,624 million euros at the end of March, up 2.9% year-on-year, and the group’s total assets amounted to 253,256 million (200,441 million Ex TSB), which represents growth 3.4% year-on-year and 0.5% in the quarter.
default ratio
Troubled assets at the end of March show a balance of 7,508 million euros (6,210 million doubtful assets and 1,299 million foreclosed assets), while the coverage of problematic assets stands at 53%, and the coverage of foreclosed assets is 38%.
The non-performing loan ratio of the group stands at 3.66% and the cost of risk decreases and stands at 41bps at the end of March 2022, 8bps lower than the previous quarter and an improvement of 28bps in the year-on-year comparison.
TSB, about 25 million profit
TSB has registered a net profit of 21 million pounds –about 25 million euros– at the end of March this year and contributes positively for the fifth consecutive quarter to the group’s accounts, with 19 million euros in this case, compared to 2 million in the first quarter of 2021.
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The interest margin totals 226 million pounds -about 269 million euros-, 10.1% year-on-year more due to the “strong growth in mortgage volumes in the year”, while net commissions grow by 9.7 % year-on-year and amounted to 25 million pounds –about 29.7 million euros–, and costs decreased by 7.9% year-on-year to 189 million pounds –about 225 million–.
TSB’s board of directors has appointed Robin Bulloch as CEO, who was in charge of the entity on an interim basis since December last year.