Banco Sabadell earns 1,332 million in 2023, 55% more year-on-year

Approves a complementary dividend of 0.03 euros per share

Banco Sabadell closed 2023 with a profit of 1,332 million euros, 55.1% more than in 2022 due to the increase in interest margin and a reduction in the volume of provisions "due to the improvement in the entity's credit quality."

In a statement sent this Thursday to the National Securities Market Commission (CNMV), the entity explained that these factors "compensated for the reduction in the collection of commissions from clients and the increase in the tax bill."

The board of directors has approved the payment of a complementary dividend of 0.03 euros per share and a share repurchase of 340 million, so the total shareholder remuneration for the year as a whole will be 666 million euros, 55 % more year-on-year.

The bank has explained that it raised its Rote profitability to 11.5% and CET1 capital stood at 13.21%, levels that it plans to maintain for the current year.

The bank's CEO, César González-Bueno, has assured that these results are "a consequence of the profound transformation undertaken in recent years."

He has pointed out that the bank's solidity allows for "a strong increase in shareholder remuneration" and has been optimistic about the evolution of the entity in the future.

For his part, the financial director, Leopoldo Alvear, has highlighted the improvement in profitability and the strengthening of the balance sheet, "with a reduction in problematic assets and an increase in coverage."

The entity has explained that the income from the banking business was 6,109 million, 15.5% more than in 2022, and that the interest margin grew by 24.3%, to 4,723 million, while net commissions fell by 7 %, up to 1,386 million.

Recurring costs were 2,982 million, 3.5% more year-on-year, so the bank's efficiency ratio improved by 2.5 points and stood at 42.6%.

For its part, the customer margin increased and at the end of the year it was 2.99%, after increasing 46 basis points in year-on-year terms.

Banco Sabadell closed 2023 with a balance of 149,798 million euros, which means a year-on-year drop of 4.1%.

MORE CREDIT TO COMPANIES

The entity has explained that the granting of credit "had different trends depending on the type of product and customer group."

Consumer credit and financing to companies continued to increase, "both in investment and in circulation", while the mortgage firm continued to contract due to the rise in interest rates, with 34% less, up to 3,764 million.

Specifically, the new production of credit to companies amounted to 11,716 million, which represents a year-on-year increase of 7%, while the volume of credit lines increased by 1% compared to 2022.

Consumer loans grew by 25% in Spain in 2023, up to 2,102 million, while card billing increased by 7% and POS operations by 11%.

RESOURCES

Managed customer resources, both on and off balance sheet, remained "practically unchanged" in 2023 and at the end of the year they were 201,449 million.

Client resources in investment and savings in Spain increased by 9.1 billion, up to 56.6 billion.

Off-balance sheet resources amounted to 40,561 million at the end of the year, which represents an annual increase of 5.4%, while on-balance sheet resources decreased by 2%, to 160,888 million.

For its part, the bank's total assets stood at 235,173 million euros, which represents a decrease of 6.4% year-on-year, mainly motivated by the return of 17,000 million from the TLTRO III.

BALANCE SHEET QUALITY

Balance sheet quality also improved in terms of liquidity and credit quality, with the loan to deposits ratio improving to 94%, "with a balanced retail financing structure", and the liquidity coverage ratio (LCR). ) reached 228% at the end of the year.

Problematic assets fell by 223 million, to 6,748 million, of which 5,777 million are doubtful loans and 971 million are foreclosed assets.

The non-performing loan ratio stood at 3.52%, compared to 3.41% in the same period of 2022, although below the 3.54% of the previous quarter.

The coverage of problematic assets stood at 55.6%, while the coverage of doubtful loans rose to 58.3% and that of foreclosed assets, 39.6%.

As a result, the bank's credit risk cost stood at 43 basis points and the total risk cost at 55 basis points.

TBS

TBS closed the year with an individual net profit of 175 million pounds (205 million euros), 70.9% more year-on-year, and the positive contribution to the group was 195 million euros.

The entity increased its recurring margin by 3.9% in the year-on-year comparison, to 361 million pounds (422.8 million euros), and the interest margin rose 4.1%, to 1,022 million pounds (1,196 .8 million euros).

"It should be noted that TSB has initiated an efficiency improvement plan to reduce costs and thus focus on the acceleration of its main activity, that linked to the marketing of mortgages, in which it has historically specialized," the bank explained.