Sabadell registers a record profit of 308 million euros in the first quarter, 50.4% more

Accounts for an impact of 192 million euros due to the extraordinary banking tax

The Banco Sabadell Group obtained a record net attributable profit in the first quarter, of 308 million euros, 50.4% more than in the same period of the previous year, according to the information it sent this Thursday to the National Commission of the Stock Market (CNMV).

The bank explains that this result has been supported mainly by the dynamism of commercial activity and the improvement in asset quality, which have allowed it to increase the interest margin and reduce provisions.

Thus, the interest margin grew by 11.9% year-on-year, to 1,231 million euros, while commissions stood at 340 million euros, with a decrease of 3.1% year-on-year, in line with expectations. In this way, the income of the banking business (interest margin plus net commissions) reached 1,571 million euros, 8.3% more in year-on-year terms and 1.3% above the previous quarter.

The item of other operating results represented a cost of 162 million, after pointing out in this line the payment of 192 million of the extraordinary banking tax. In 2023, the bank paid 157 million euros for this lien.

For their part, total costs rose to 751 million euros between January and March, which represents an increase of 2.9% year-on-year. As a result of the increase in income from the banking business and the "containment" in costs, the recurring margin grew by 13.8%, to 820 million, and the group's efficiency ratio improved 3.8 points compared to the end of the year. fiscal year 2023, reaching 47.6% in the first quarter of 2024.

In addition, the customer margin continued its upward trend due to the higher credit yield resulting from the repricing of the portfolio. In this way, it stood at 3.09% between January and March of this year, after registering a growth of 36 basis points year-on-year and 10 basis points with respect to the previous quarter.

The evolution of results was also influenced by the 11.6% reduction in provisions and impairments, which stood at 208 million. This decrease was mainly the result of the 8.5% drop in provisions for credit provisions due to the better quality of the entity's risk.

In this way, the return on tangible capital (RoTE) has risen to 12.2%, compared to 11.5% at the end of the year, and the CET1 capital ratio has risen to 13.3%, from 13 .21% at the end of 2023, while the total capital ratio stood at 18.42%.

Balance sheet quality also improved in terms of liquidity and credit quality. Specifically, the 'loan to deposits' ratio improved to 94.3% in the first quarter of the year, with a balanced retail financing structure, while the LCR liquidity ratio reached 205% at the end of March (238% excluding TSB).

Problematic assets fell during the first quarter by 92 million euros, ending with a balance of 6,657 million, of which 5,718 million are doubtful loans and 939 million are foreclosed assets.

The delinquency ratio stood at 3.46% in March, which compares positively with the 3.52% of the previous quarter. Regarding the coverage of problematic assets, it stood at 55.8%, with an increase of 3.8 points year-on-year. The coverage of doubtful loans (stage 3) rose to 58.5%, 3.9 points more compared to the first quarter of 2023, and that of foreclosed assets stood at 39.4%, one point more.

As a consequence, the cost of credit risk improved compared to the same period a year earlier and stood at 41 basis points. The group's total cost of risk also observes a positive trend and stood at 50 basis points at the end of March 2024.

CREDIT EVOLUTION

On the other hand, Banco Sabadell's outstanding credit closed the first quarter of the year with a balance of 150,796 million euros, which represents a year-on-year decrease of 1.2% and a quarterly increase of 0.7%.

By segment, the new production of credit to companies, that is, medium and long-term financing plus credit lines, amounted to 3,894 million euros, which represents an increase of 48% compared to the same period of the previous year. , while the volume of currency decreased by 5%, to 7,255 million euros.

The new granting of consumer credit also continues to show dynamism, after growing by 13% between January and March 2024 compared to the same period of the previous year, up to 552 million euros.

Likewise, card billing registered an upward trend, with an increase of 7% year-on-year, up to 5,727 million euros at the end of March, and the volume of operations carried out at POS terminals, which increased by 11%, up to 12,445 million of euros.

Banco Sabadell's dataphones recorded 403 million transactions between January and March of this year, 13% more than in the first quarter of the previous year.

Mortgage activity also reflected a positive evolution, so that in the first quarter of this year the granting of mortgages grew by 20% compared to the previous quarter, up to 908 million, with a gradually positive increase month by month. However, in year-on-year terms, the formalization of these loans still decreased by 11%.

CUSTOMER RESOURCES

For its part, customer resources managed by the entity, both on and off balance sheet, grew by 0.9% year-on-year. At the end of the first quarter, they totaled 203,569 million euros, after the transfer of demand accounts to off-balance sheet resources, mainly investment funds, as well as to time deposits.

Customer resources in savings and investment products in Spain were the ones that performed the best, and stood at 58.7 billion, after growing by 2.1 billion euros quarterly. Of this increase, around 500 million were recorded in time deposits, while off-balance sheet resources increased by 1,600 million, mainly due to the increase in investment funds, both due to net inflows and the positive evolution of the market.

In total, off-balance sheet resources amounted to 42,150 million euros at the end of last March, which represents a quarterly increase of 3.9%, while on-balance sheet resources remained practically in line with the previous quarter. , with a slight increase of 0.3%, and stood at 161,419 million euros.

For its part, the group's total assets stood at 236,135 million euros, which represents a decrease of 5% year-on-year, mainly motivated by the return of the entire TLTRO III.

CONTRIBUTION OF TSB

TSB completed the first quarter of 2024 with an individual net profit of 38 million pounds, 30.7% less year-on-year. In this way, the positive contribution to the group's accounts amounted to 46 million euros.

Commercial activity at TSB shows signs of recovery, reflected in a 41% year-on-year growth in the granting of new mortgages and an increase in applications for loans with real estate collateral of 25% between January and March compared to the previous quarter.

In addition, it reduced its recurring margin by 29.9% year-on-year, to 70 million pounds (81 million euros). Net interest income decreased by 10.9%, to 238 million pounds (277 million euros) year-on-year, and is stable in the quarter supported by higher volumes. Net commissions fell 3.1% in the quarter, to 25 million pounds (29 million euros).