Banc Sabadell definitively left the pandemic pothole behind last year and earned 859 million euros. It is 61.9% more than the previous year. They are the highest in history without counting extraordinary. The reduction in costs, the improvement in margins due to the rise in rates, in addition to the improvement in the British subsidiary TSB, explain the good behavior of profits.
These record results occurred in a year in which the bank tax was activated, which will cost the bank 170 million. On whether the tax was adequate taking into account the good results, the CEO, César González-Bueno, assured that "we continue to be below the cost of capital". During the presentation of the results at the bank's operational headquarters, in Sant Cugat del Vallès, the executive pointed out that the profitability measured this year would be more than 10% if there were no tax and that accounting for the tax would drop from 9%.
The accounts surprised the market positively. The shares rose 10.9% in a session in which the Ibex index only gained 0.9%. With this rebound, the bank's capitalization exceeds that of Bankinter.
The British subsidiary TSB continues for another quarter providing positive results to the bank, although the payment of a fine of 49 million pounds (56 million euros) to close the dispute over the problems of the technological platform reduced the profit compared to the previous year . Regarding the future, González-Bueno insisted that the sale is not planned.
The interest margin increased by 11% due to "the higher loan yield, the repricing of the Euribor and the contribution of the fixed-income portfolio," the bank explained. The financial director, Leopoldo Alvear, predicted that the interest margin will continue to grow between 15 and 20% in the year. How long will this improvement last? "It is expected that the rates will have their inflection point this year and that in 2024 the trend will be downward," Alvear replied. The banker added that a part of the portfolio will not be fully repriced in 2023 and will be effective in 2024.
The good behavior of the results is also supported by an improvement in costs of 12.8%. The bank explained that this reduction is "due to the savings in personnel expenses after carrying out the efficiency plans in Spain." The workforce at the end of 2022 was 18,895 people. They are 1,175 less than in 2021. No further adjustments are planned for this year.
Following these results, the bank chaired by Josep Oliu agreed to allocate 50% of the profits to the payment of a dividend. Additionally, the entity plans to allocate just over 200 million in the repurchase of shares.
Looking ahead, the commercial strategy is going to focus on reducing commissions and deepening the marketing of products such as guaranteed funds instead of term deposits. Despite the sharp rise in rates, the Spanish banks continue to hardly remunerate the liabilities.
Regarding other basic business data, it is worth noting that the volume of credit grew by 0.8% in the year. In Spain alone, the mortgage portfolio increased by 1.4% and credit to companies by 0.4%. Despite this growth in assets, the financial director highlighted that the non-performing loan ratio fell by 25 basis points, with which the rate closed at 3.41%.
