Banco Sabadell set stock market highs after rising nearly 9% as profits doubled in the first quarter.
Banco Sabadell fired with speed write down profit for the first quarter after earn 308 million euros, 50% more that in the same period in 2023, thanks to improved asset quality and commercial activity, “which allowed us to increase the interest margin and reduce provisions,” explained the general director of the company, Cesar Gonzalez-Bueno, in the presentation of these results, which were received with a bang by the market.
shares soared from the first hour and grew by more than 13%. close at 8.7%, which is the most bullish value of the day. After all, it posted its biggest gain since mid-November 2020 and traded at €1.64, its highest level in almost six years. Thanks to this revaluation accumulated profit for the year reaches 50%the second largest on the market this year and the first among Ibex companies.
Gonzalez-Bueno explained that this increase may be due to the fact that analysts confirmed that The company’s forecasts are met “for both revenue and expenses.”. In addition, both he and CFO Leopoldo Alvear said investors had taken into account interest margin forecasts, which rose 11.9% year-on-year in 2023, and acknowledged they would not be flat. level until 2025, which will be 1,231 million euros, and income from the banking business – corresponding to the interest margin plus net commissions – will be 1,571 million euros, up 8.3% year on year and 1.3% higher than in the previous quarter. .
Sabadell recorded these historical figures despite the impact of the emergency tax the bank €192 million, up 22% from 2023, when it paid a total of €157 million due to increases in margins and fees that the bank recorded last year.
Gonzalez-Bueno confirmed this. expects to break historical results record this year and raise the financial return on investment (ROTE) target above 12%. “With profitability like this, 2024 results should be the best in the bank’s history.” Despite the size of the bank’s profits this quarter, Gonzalez-Bueno said he believed the results were “not excessive or extraordinary” as the company “continues to trade below its book value.”
What he didn’t want to predict was whether interest margin group that recognized “will remain level” due to lower rates. On the other hand, he does not foresee mortgage market performance “slowing down this year” after two “very good” quarters, and reiterated the company’s “appetite” to “lend to developers” amid the crisis. the government’s renewed commitment to promoting housing construction.