Sabadell Bank reported a strong start to 2022, with net attributable profit reaching 213 million euros in the first quarter, nearly tripling the figure from the prior year thanks to lower costs and margin improvements across the board.
Excluding TSB, the British subsidiary, net attributable profit rose 2.7 times to 194 million euros at the end of the first quarter, according to the bank’s filing with the CNMV on Thursday.
The lender has lifted its fully loaded CET1 capital ratio to 12.45% as of March 2022, while the liquidity coverage ratio stood at 235% for the group, underscoring solid liquidity management.
Return on tangible equity reached 6.5%, surpassing the strategic plan’s forecast of 6% for 2023.
The bank’s core income from lending and commissions grew 3.6% year over year, totaling 1.217 billion euros, though it declined 3.5% from the prior quarter, reflecting seasonal patterns and volume dynamics. Net interest income rose 3% year over year to 858 million euros, fueled by higher lending volumes.
Net commissions increased 5% from March 2021 to 359 million euros, driven by strong service and asset management activity, while the quarter saw a 9.7% decline due to the favorable seasonality seen in the previous year’s fourth quarter.
Total fees decreased to 726 million euros by the end of March, down 5.6% year over year as personnel costs were trimmed. On a quarterly basis, fees fell 4.3%, with estimated savings of 110 million euros in 2022 and expectations of larger reductions in the coming quarters and through 2023.
investment loan
Banco Sabadell’s outstanding loans stood at 154,672 million euros in the first quarter, with 1,110,378 million euros excluding TSB. Investment growth was 3.1% year over year, primarily driven by an expanded mortgage portfolio supported by TSB’s growth.
Mortgage production in Spain reached 1.261 billion euros in the quarter, while consumer loans rose 11% year over year to 371 million euros.
Mutual funds reached 23,848 million euros, up 6% year over year, with 4,793 million in annual growth in card billing and 9,500 million in card-present transactions, showing a 36% increase in point-of-sale activity.
customer resources
Total client deposits reached 161,316 million euros at end-March, 119,118 million ex-TSB, reflecting a 4.9% annual gain (5.7% ex-TSB) but a slight quarterly dip due to retail maturities.
Current account balances grew 8.2% year over year (9.7% ex-TSB), while the quarterly figure fell 0.5% to 146,520 million euros, with 106,279 million ex-TSB.
Off-balance sheet client funds totaled 40,624 million euros, up 2.9% year over year, and total assets reached 253,256 million euros, marking 3.4% annual growth and a modest quarterly slide.
default rate
Troubled assets at end-March stood at 7,508 million euros, comprising 6,210 million in doubtful assets and 1,299 million in foreclosed assets. Coverage for troubled assets was 53%, while foreclosed asset coverage stood at 38%.
The group’s NPL ratio was 3.66%, and the cost of risk fell by 41 basis points in the first quarter, marking an improvement of 8 basis points versus the prior quarter and 28 basis points year over year on an annual basis.
TSB, approximately 25 million profits
TSB contributed about 25 million euros to the group’s results, with a 21 million euro net profit registered in local currency terms for the quarter, showing a positive trend versus the same period last year.
Interest margin reached roughly 226 million pounds (about 269 million euros), up 10.1% year over year thanks to strong growth in mortgage volumes, while net commissions stood at 25 million pounds (about 29.7 million euros), up 9.7% year over year and costs declined 7.9% to 189 million pounds (around 225 million euros).
Robin Bulloch was named chief executive of TSB, taking over from an interim role that began in late last year.