Banco Sabadell managed to reach 1 billion euros before the end of the year. The company estimates its profits will exceed that symbolic amount by the end of 2023, but it achieved it in the first nine months of the year. Banco Sabadell earned €1.028 million through September, up 44.9% from a year ago and the best result in its history. This improvement is due to an increase in recurring margin (interest margin plus commissions, minus costs).

Specifically, this margin increased by 38.8% year on year, while ROTE, that is, profitability, reaches 11.6%.. A percentage that is significantly higher than planned in the strategic plan, but has already exceeded the previous quarter.

In addition, on October 25, 2023, the Board of Directors decided: dividend distribution based on the results of the 2023 financial year at an amount of three cents gross per share payment in cash, which will be paid on December 29th. This dividend represents a 50% increase on the amount paid in the previous year, when two cents gross per share was distributed as an interim dividend.

Banking business income (interest margin plus net commissions)
they reach 4.559 million eurosup 18.7% year-on-year, while interest margin grew 29.0% over the same period to reach 3.512 million.

Against, net commissions are reduced by 6.3% for nine months of the year – to 1.047 million euros, and total costs increased by 3.2%, to 2.231 million euros.

As a result of revenue growth and cost control, despite inflation, the group’s efficiency ratio improved by 5.3 points over the year, reaching 48.7% (43.1% excluding TSB).

Additionally, customer margin continued its upward trend, rising to 2.99% at the end of September after rising more than half a point year over year.

Banco Sabadell’s outstanding loan ends September 2023 with a balance of 151,627 million euros, representing a decrease of 3.3% compared to the same period last year due to the repayment of mortgages, lower business investments and the maturities of loans from government administrations.

Compared to the previous quarter, credit decreased by 1.4%, partly due to seasonality. In Spain, new production of loans to companies, that is, medium- and long-term financing excluding working capital, amounted to 9.024 million euros in the first nine months of the year, representing an increase of 8% compared to the previous year. year.same period of the previous year. However, the issuance of mortgage loans fell by 29% to 3.010 million euros.

The moderation in demand for home loans contrasts with the dynamics of consumer lending, which grew by 27% in the first three quarters to reach 1.581 million.

The same growth trend is observed in the field of card payments (growth by 7% and growth to 17.281 million euros in nine months) and POS terminals (growth by 12% to 39.307 million euros). Between January and September, 1.201 million transactions were made using Banco Sabadell dataphones.

Meanwhile, Customer funds on balance closed in the third quarter at €161.973 million., which is 0.8% less year-on-year and 0.5% less quarterly. Demand account balances amount to EUR 136,511 million, down 7.6% year on year. For its part, time deposits amount to EUR 24.184 million, an increase of 52.1% compared to September 2022 and 12.6% compared to the previous quarter.

Off-balance sheet customer funds reached €39,342 million at the end of September 2023, representing an increase of 3.4% year-on-year. This growth is mainly due to the good performance of investment funds. The group’s total assets amount to EUR 243.261 million., representing a 6.6% year-on-year decline due to the early return of TLTRO III. They remain stable in the quarter.

The CET1 full load factor at the end of September was 13.13%. and increases by 26 basis points per quarter, and the total capital ratio is 18.35%. The MDA buffer is 428 basis points, which provides a large cushion above requirements.

The loan to deposit ratio at the end of September 2023 is 94.6%.with a balanced retail funding structure and LCR (liquidity coverage ratio) reaching 220% at the end of September.

Reduction of problem assets

As of September 2023, problem assets amount to US$6,930 million., of which 5.891 million are doubtful loans and 1.039 million are collateral assets. Last year, non-performing assets fell by 109 million euros, compared with a decline of 41 million in the quarter.

Reducing the outstanding loan balance prevents this decline in distressed assets from transforming into growth in the overdue debt ratio, which as of September is 3.54%compared to 3.40% a year earlier. Compared to the previous quarter, it remains virtually stable.

Improved balance sheet quality is reflected in increased coverage
problem assets, the share of which, taking into account the total amount of reserves, is 53.9%, the share of doubtful loans (stage 3) increases to 56.5%, and the share of collateral assets increases to 38.9%.

The fruit of it allThe cost of credit risk improved from the previous quarter to 43 basis points. The group’s total cost of risk also showed positive growth at 55 basis points, up five basis points from the start of the year.

TSB continues to increase its positive contribution

TSB ends third quarter of 2023 personal profit after tax of £152m., which is 48.1% more in interannual comparison. The positive contribution to the accounts of Banco Sabadell Group amounts to 161 million euros.

The UK company increased its recurring margin by 15.4% year-on-year to £280 million, while its interest margin rose 9.3% to £784 million. Net commissions fell 9.6% to £79 million and costs increased 3.7% to £583 million.