Banco Sabadell announces record profits of €1,332 million and increases dividends by 55%

Banco Sabadell earned 1.340 million euros in 2023, up 55.1 percent from the previous year, the institution of the National Securities Market Commission reported.

The figure was slightly higher than the €1.314 million expected, according to the consensus of analysts consulted by Finanzas.com. In addition, the bank announced a 55 percent increase in dividends and a €340 million buyback of its own shares.

This record result was supported by “an increase in interest margins and a decrease in provisions due to improved enterprise credit quality, factors that offset lower commission collections from clients and higher invoices.” fiscal,” said Banco Sabadell.

Increase in dividends by 55 percent

Following the presentation of these figures, Banco Sabadell will propose the payment of an additional dividend of 0.03 euros per share, which is added to the interim dividend that the company has already distributed in the same amount.

Thus, the total amount of remuneration to shareholders accrued based on the results of 2023 will be 0.06 euros, that is, 326 million euros.

In addition to the new share buyback program, “the total amount distributed to the bank’s more than 200,000 shareholders amounts to 666 million euros, an increase of 55 percent compared to the previous year,” Banco Sabadell said.

Banco Sabadell’s interest margin increases and commissions decrease

At the top of its earnings report, Banco Sabadell reported an interest margin of €4.723 million at the end of 2023, up 24.3 percent on the previous year, although the figure was impacted by the depreciation of the pound.

Net commissions amounted to 1.386 million euros, down 7 percent year-on-year. The reason for the decline was a reduction in fees for services and asset management.

Thus, banking business income (interest margin plus net commissions) reached 6.109 million euros, or 15.5 percent more.

On the other hand, operating expenses stood at 2.982 million, representing an increase of 3.5 percent year-on-year, consistent with the previous quarter. These figures increased the efficiency ratio to 42.6 percent.

Banco Sabadell increases solvency

In terms of solvency indicators, the Catalan entity reported a capital adequacy ratio of CET1. fully loaded at the end of 2023 will be 13.21 percent, representing an increase of 67 basis points over the year.

Banco Sabadell managed to reduce its distressed assets by 223 million euros, ending with a balance sheet of 6.748 million. Of this figure, 5.777 million are doubtful loans and 971 million are collateral assets. Overall, arrears closed at 3.52 percent, down from 3.41 percent the previous year.

The cost of risk therefore improved from the same period a year earlier to 43 basis points. The group’s total cost of risk “also showed a positive trend at 55 basis points,” the company said.

TSB profit rose 70.9 percent

Regarding the contribution of TSB, Banco Sabadell’s UK subsidiary, the company reported net profits in 2023 of £175 million, up 70.9 percent from last year. “The positive deposit into the accounts of Banco Sabadell Group amounted to 195 million euros,” the bank said.

Net interest income rose 4.1 percent to £1,022 million due to higher interest rates, while net fees and commissions fell 5.4 percent to £108 million.

In addition, Banco Sabadell recalled that TSB has initiated a plan to improve its efficiency and reduce costs so that it can focus on its core activity, the issuance of mortgage loans, in which it has historically specialized.

Banco Sabadell aims to improve profitability in 2024

Finally, Banco Sabadell recalled that it “more than achieved” almost all the goals set in its business plan.

Among them is return on tangible equity (Rote), which had a target of 6 percent and ended the year at 11.5 percent.

Looking ahead to 2024, the Catalan bank plans to place Rote above this level of 11.5 percent, “while continuing the trend towards higher interest margins,” it added.

Following the publication of these figures, the CEO of Banco Sabadell Cesar Gonzalez-Buenostated: “The bank’s reliability allows us to significantly increase shareholder compensation and be optimistic about the future development of the enterprise.”

If this news was useful to you, subscribe to our newsletter, we will not disappoint you! You can also add alerts finance.com to your networks and applications: Twitter | Facebook | LinkedIn | Flipboard. And follow the best financial videos on YouTube.