Sabadell earns 73 million, 22% less, and TSB returns to record profits

The British subsidiary of the group contributed 2 million to the result of Sabadell.

González-Bueno already outlines the lines of the strategic plan to 'save' Banco Sabadell

Sabadell earned 73 million euros in the first quarter, which is 22% less than on the same dates of the previous year, mainly due to the fact that the entity registered a sharp drop in result of financial operations (ROF), 84.5%, up to 23 million.

The entity reduced the banking business income (interest margin + net commissions) 4.8%, to 1,175 million, due, according to the bank, to the lower incidence of the pandemic in the first quarter of last year.

The interest margin stood at 833 million euros, 5.8%, while net commissions reached the figure of 342 million euros, 2.2% less, as influenced by the sale of Sabadell Asset Management.

The costs they were reduced by 1.2%, to 769 million, and the bank has explained that the materialization of the efficiency plan in Spain will have a positive impact of 141 million annualized euros from the second quarter.

As for the capital, Sabadell recorded a CET1 ratio of 12% at the end of March, stable compared to the end of 2020, after including 42 basis points of IFRS9 transitional adjustments.

TSB returns to profit

The British subsidiary of the group, TSB, returned to the path of benefits with earnings of 10 million euros in the first quarter, which contributed 2 million to the profit of the group.

The improvement occurred thanks to a improvement of income, but also of costs, which reduced by 235 million. Not surprisingly, it cut its branch network by 30% compared to the end of 2019 and its staff by 14%.

César González-Bueno, CEO of Sabadell.

César González-Bueno, CEO of Sabadell.

In addition, the bank attributes it to the fact that macroeconomic expectations were “better than expected” and to a quarterly record in the granting of mortgages.

The bank has presented this Friday its results corresponding to the first quarter of the year, which are the first accounts that the bank closes under the direction of César González-Bueno, who replaced as CEO James Guardiola.

customer resources

At the end of the first quarter, Sabadell registered 8,847 million euros of financing with the guarantee of the Official Credit Institute (ICO), to which must be added 606 million pounds of Bounce Back Loans in the United Kingdom.

As for the moratoria, maintains an outstanding balance of 2,218 million euros in Spain and 340 million pounds in the United Kingdom. At the end of March 2021, customer funds on the balance sheet totaled 153,800 million euros (112,656 million without TSB), which implies a growth of 6.8% (3% without counting TSB). Sight account balances amounted to 135,397 million euros, 13.9% more.

The time deposits fell 26% to €18,573 million, while off-balance sheet customer funds fell 1.4% to €39,478 million.

For their part, the troubled assets closed the quarter with a balance of 7,507 million euros, of which 6,127 million were doubtful and 1,373 million foreclosed. The coverage of problematic assets stood at 52.8%, and the coverage of foreclosed assets at 37%, thus improving compared to the previous quarter.

The delinquency ratio of the group was 3.7%, which implies an improvement in the year-on-year comparison. The group’s cost of credit risk stood at 69 basis points at the end of the first quarter, compared to 86bp in the previous quarter.

The bank, which closed the sale of its leasing business to ALD Automotive on Thursday, has announced that it will present its new strategic plan next May 28.