Banc Sabadell wins €971M in the first half of the year

Saint Cugat of the Vallès"Sabadell's revenues are going like a shot". Marc Armengol presented this Friday his first accounts as CEO of the Catalan bank, in which the entity obtained a net profit of 971 million euros in the first half of the year, 0.5% less than the previous year. It should be noted that the results still include the contribution of the British subsidiary TSB, which changed hands in May and now belongs to Santander.

Without the subsidiary, Sabadell's earnings would have stood at 892 million euros, as stated in the results published by the entity to the National Securities Market Commission (CNMV). On a quarterly basis, Sabadell closed the period from April to June with earnings of 608 million, 14.3% more.

In addition to the sale of TSB, the results for the first half of the year also include another extraordinary impact: a pre-retirement plan in Spain that cost the entity 88 million euros. Thus, without taking into account the contribution of the British subsidiary and without these extraordinary impacts, the bank's recurring profit stood at 691 million euros, 14.1% less than a year earlier. However, the entity also emphasizes that it has begun to grow quarterly (+8.4%) thanks to the boost from business, and predicts that this trend will continue towards the end of the year.

On the other hand, after the payment of the extraordinary dividend in May for the sale of TSB, the Board of Directors of Banc Sabadell has informed that, as part of the remuneration to shareholders for this year, it has received authorization from the European Central Bank (ECB) to carry out a new repurchase of its own shares for amortization for a maximum amount of 331 million euros. In addition, at a press conference held this Friday at the bank's headquarters in Sant Cugat del Vallès, Armengol celebrated the good trend in the value of the entity's shares: "They are unstoppable". And he stressed that the share prices continue to rise after the failed takeover bid by BBVA and the sale of the British subsidiary.

No more corporate operations

After the aforementioned sale of TSB, Armengol has ruled out the bank undertaking any other corporate operation in the near future. "We are not studying and will not likely study anything either in Spain or abroad," stated the entity's CEO, who pointed out that currently all medium-sized banks, "with whom an operation might make sense," have "solid projects on their own." "We are a large enough bank to invest in innovation, technology, and to be close to the customer, and small enough to make quick decisions," Armengol affirmed.

Thus, Armengol has remarked that revenues "are going like a shot" and has said that they "consider the valley closed" that the BBVA's takeover bid represented. "The bank is at very outstanding levels of commercial dynamism and we believe this will continue," he said.

Regarding the investigation opened by the National Commission of Markets and Competition (CNMC) into several state banks for alleged anti-competitive practices related to fixed-rate mortgages, Armengol has avoided making any comments because it is "an open case". Nor has she commented on the sale of shares made by David Martínez, who was the only member of the Sabadell board of directors to support BBVA's takeover bid. This week, the Mexican reduced his stake from 3.495% of the capital to 1.937%. During the presentation of the results, the CEO also did not want to specify what growth prospects they expect for the second half of the year.

Regarding asset quality, the non-performing loan ratio falls to 2.47% in the second quarter, down from 2.55% in the previous one, with a coverage ratio of total provisions at 68.7%. The cost of risk stands at 40 basis points and the balance of non-performing assets (NPA) decreases by 44 million this quarter and by 421 compared to a year ago.