The results he presented Sabadell Bank in 2021 they confirmed the strong upward trend of their shares, which made the entity one of the best stocks on the IBEX 35 after posting the best year in its history on the stock market. The bank far outperformed market forecasts and raised its profitability target.
In the year of recovery, Banco Sabadell reported a net profit of 530 million euros, compared to two million euros in 2020. The figure far exceeded the 400 million forecast by the consensus of finance analysts.
The result of these results meant that the entity advanced its profitability target by one year, presented last spring in its strategic plan.
Specifically, the bank forecasts a ROTE of over 6 percent in 2022, a powerful message for the market because it reflects that staff cuts by the ERE they will not take their toll on profitability.
In addition, the figures also give to comply with the shareholders, because Banco Sabadell announced a dividend of 0.03 euros per share, which leaves the payout ratio at 31.8 percent.
TSB contributes almost a quarter of the profit to Banco Sabadell
An important piece in these results was the contribution of TSB, which was almost always a drag, but now contributed 118 million euros to the accounts, almost a quarter of everything the entity earned (22.3 percent). .
The British subsidiary chained four consecutive quarters of profits and its evolution justified Banco Sabadell’s decision to reject the purchase offers you have had by TSB, at least for now.
In a year where the pandemic hit the UK hard, TSB showed that it has a powerful niche in the mortgage business. The interest margin soared 10.5 percent thanks to the strong growth in volumes of mortgage credit.
The other metrics of the British business showed a reduction in costs of 4 percent and an increase in net commissions of 20.8 percent annually.
Revenue increases 3 percent
As for the group’s figures, the recovery in activity made it possible for banking business income to increase by 3 percent year-on-year, to 4,893 million euros.
In addition, recurring costs reached 2,988 million euros, which represents a decrease of 2.3 percent, thanks to the reduction in personnel expenses in Spain and general expenses in TSB. With this, the total costs decreased by 4.4 percent.
Net commissions reached the figure of 1,468 million euros, which represents a growth of 8.7 percent year-on-year, thanks to the good performance of asset management commissions, as well as services.
With this evolution, the interest margin increased 0.8 percent to 3,425 million, thanks to the increase in volumes, although in the quarter it decreased 1.6 percent due to the lower contribution of the fixed income portfolio.
In the opinion of analysts Rent 4 Bank, the results of Sabadell Bank they complied with the guideline in the net interest income and exceeded it with respect to the evolution of net commissions.
Lowers the cost of risk
Likewise, the CET1 ‘phase in’ capital ratio reached 12.43 percent at the end of the year, while the fully loaded ratio reached 12.18 percent, after increasing by six basis points compared to the previous quarter.
In addition, Banco Sabadell recorded problem assets for a total of 7,565 million euros, of which 6,203 million are doubtful loans and 1,362 million foreclosed assets.
The coverage of problematic assets stood at 53.1 percent, with the coverage of doubtful loans with total provisions being 56.3 percent and 38.2 percent for foreclosed assets. With this, the delinquency rate reached 3.65 percent.
The cost of credit risk stood at 49 basis points at the end of the year, with an improvement of 37 points in the year-on-year comparison.
Regarding these results, the CEO of Banco Sabadell, César González-Well, He said that the entity closes “a good year, with a new team, governance, organizational structure and strategic plan.”
“We have anticipated the profitability objective of our plan by a year and we face the future of this great franchise with optimism,” he stressed. González-Bueno.