This summary covers Sabadell Bank’s performance through June, highlighting a net attributable profit of 393 million euros, up 78% from the same period last year. The group benefited from a solid contribution from its British subsidiary TSB, which added 54 million euros and has now supported the group for six consecutive quarters, while also driving cost-saving measures that supported the overall results.
The recurring margin, calculated as net interest income plus commissions minus costs, rose by 18.5% year over year. The asset base returned 7% on equity (ROTE), surpassing the strategic targets, and the CEO, César González-Bueno, confirmed that all annual goals were met as part of the ongoing transformation. Among the most notable retail banking milestones are stronger management performance in mortgages, insurance, and savings investment, alongside the launch of a new digital account, an improved simulator, and a revamped digital mortgage portal.
Finance chief Leopold Alvear noted that the risk profile continues to improve, with reductions in non-performing loans and problem assets. The fully loaded solvency ratio reached 12.48%, an improvement of 30 basis points in the first half of the year.
Banking revenue, comprising the interest margin and net commissions, rose 3.8% year over year to 2,486 million euros through June. Net interest income increased by 4.2% from the previous year, driven by TSB’s larger contribution, totaling 1,757 million euros (up 14.3%).
Net commissions reached 729 million euros, up 2.8% year over year, with again a stronger contribution from TSB (up 14.8%). Total operating costs amounted to 1,440 million euros through June, down 4.8% year over year due to lower overheads and personnel cost reductions from efficiency measures. In the second quarter, costs declined by 1.6%, aligning with anticipated savings of 110 million euros for the year, part of a planned 130 million euros per year in 2023 and beyond.
Mortgage and lending activity
The Sabadell group ended the first half with outstanding loans totalling 158.074 billion euros, excluding TSB at 114.171 billion euros. Investment growth stood at 4.1% year over year, indicating healthy dynamics across all geographies, with a quarterly rise of 2.2%.
Spanish mortgage production reached 1.501 billion euros in the latest quarter, marking a historic production record and a 19% increase from the prior quarter. New consumer credit rose 17% quarter over quarter to 805 million euros.
Card billing climbed 16% versus the first quarter to 5,541 million euros, while point-of-sale (POS) activity rose 27% to 12,111 million euros, setting historic records for both cards and POS volumes. Mutual funds declined about 5% from the prior quarter, totaling 22,538 million euros as markets remained volatile.
By the end of June 2022, on-balance sheet client funds stood at 163,391 million euros (122,286 million euros excluding TSB), up 3.8% year over year (5.5% without TSB) and up 1.3% from the previous quarter (2.7% without TSB). Vision account balances were 147,892 million euros (108,447 million excluding TSB), up 5.6% (7.6% without TSB) year over year and up 0.9% (2.0% without TSB) from the prior quarter. Time deposits totalled 15,980 million euros (14,320 million excluding TSB), down 9.4% (7.3% without TSB).
Off-balance-sheet client funds reached 38,831 million euros, down 4.7% year over year due to the sale of BancSabadell d’Andorra and down 4.4% quarter over quarter amid market volatility. The group’s total assets stood at 257,229 million euros (205,047 million without TSB), reflecting 2.8% year-over-year growth and 1.6% quarter-over-quarter growth.
The CET1 phase-in ratio was 12.61% at the end of June, up 2 basis points from the prior quarter. The fully loaded CET1 ratio stood at 12.48%, up three basis points in the quarter. The total capital ratio under the phase-in methodology was 17.11% at quarter end, comfortably above regulatory requirements. On liquidity, the Liquidity Coverage Ratio (LCR) reached 225% at the group level.
Non-performing assets declined in the quarter following the sale of the Austrian portfolio of 400 million euros in unsecured loans. Total non-performing exposure stood at 6,991 million euros at the end of June 2022, with 5,714 million in doubtful loans and 1,277 million in foreclosed assets. Collateral coverage for non-performing loans was 52.3%, while collateral for stage 3 doubtful loans stood at 55.3% and 39.0% for foreclosed assets. The loss rate showed positive momentum, down to 3.31% on both a quarterly and annual basis, signaling improving credit quality.