The reduction of costs after the ERE in Spain and the improvement of margins are behind the improvement. The British subsidiary TSB has chained five consecutive quarters of positive contribution to the results of the group
Banco Sabadell recovers the pulse with a profit of 213 million euros in the first quarter of 2022. The figure practically triples the 73 million euros of profit in the same period last year, and is close to the 258.3 million achieved in January to March 2019, the year before the pandemic.
“We started the year improving all margins and continuing with the improvement in cost reduction after the completion of the efficiency plan. And all this, with the consolidation of the positive contribution of TSB«, Expresses in a statement the CEO of the bank, César González-Bueno, who celebrates one year at the helm of the entity.
The reduction of costs and the improvement of margins have been key in this evolution. Regarding the former, the total costs amounted to 726 million euros at the end of March, which implies a decrease of 5.6% in the year, mainly due to the savings in personnel expenses after the exits undertaken in the latest plans of efficiency undertaken in Spain.
In the quarter, total costs also fell by 4.3%, and the forecast is that a greater reduction will be observed in successive quarters with an estimated saving of 110 million euros in 2022 (130 million per year from 2023).
On the margin side, income from the banking business (interest margin + net commissions) reached 1,217 million, 3.6% more in year-on-year terms. However, they are reduced by 3.5% compared to the previous quarter.
The net interest income increased by 3% year-on-year to 858 million mainly supported by volume growth, while in the quarter it decreased by 0.6% “due to fewer days”.
Net commissions stood at 359 million euros, which represents a growth of 5% year-on-year due to the good performance of service and asset management commissions. But in the quarter they decreased by 9.7% mainly due to the positive seasonality of the fourth quarter of 2021, “as well as lower operations in syndicated loan operations and the impact of the volatility of the capital market in asset management,” according to details the company in a statement.
At a time of maximum uncertainty regarding the economic impact of inflation aggravated by the war in Ukraine, Banco Sabadell ended March with total problem assets of 7,508 million euros, of which 6,210 million were doubtful loans and 1,299 million foreclosed assets.
The coverage of problem assets stands at 53%, with the coverage of doubtful loans with total provisions being 56% and 38.0% for foreclosed loans. The non-performing loans ratio stands at 3.66%, slightly higher than the 3.65% in which he fired 2021.
The entity highlights the positive contribution of TSB for the fifth consecutive quarter to the group’s accounts, in this case with 19 million euros, compared to 2 million euros in March 2021.
The British subsidiary has obtained an individual profit before taxes of 46 million pounds at the end of March, compared to 47 million in the previous quarter. Its net profit stands at 21 million pounds, with a strong increase in mortgage volumes in the year.
For their part, net commissions grew by 9.7% year-on-year and amounted to 25 million pounds, due to higher service commissions, especially cards. Costs stood at 189 million pounds and decreased by 7.9% year-on-year.
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