The entity, strengthened by the interest rate increase, increases the dividend to 50% of its result
Banco Sabadell has posted a net profit of EUR 859 million in 2022, representing an improvement in profit of almost 62% compared to the previous year. This is the best result for the entity in the past 15 years. The entity has been able to boost its accounts, mainly due to the improvement in its margin (what it earns in interest and fees, excluding fees) following a policy of the European Central Bank (ECB) to raise interest rates, which last year rose to 2.5% annually.
The turnover of the banking business amounted to 5,289 million euros, which is 8.1% more on an annual basis. Specifically, interest income rose 10.9% year-on-year to 3,799 million. And that of net commissions amount to 1,490 million euros, representing a growth of 1.5% year-on-year. Total costs amounted to 2,883 million euros, 12.8% lower than last year due to savings in personnel costs as a result of the efficiency plans implemented by the entity. With this data, the bank should assume an impact of about 250 million euros to pay the new tax on extraordinary profits in the sector.
Group CEO César González-Bueno emphasized that “all business units increased their profitability during the year: business banking, individual banking, corporate and investment banking, TSB and the business units internationally”. Likewise, he emphasized that “the bank’s teams are executing the strategy with determination and that is undoubtedly paying off. We look forward to 2023 with reasonable optimism, thanks to the strength of our commercial network and the confidence of our customers.”
Banco Sabadell’s outstanding credit ended the year with a balance of EUR 156,130 million, a growth of 0.8% over the year. In Spain, the mortgage portfolio reached 39,027 million and grew by 1.4%, and lending to SMEs and large companies ended the year at 43,409 million, up 0.4% compared to the previous year. For its part, new consumer credit production in Spain amounted to 1,683 million and was up 14% year-on-year.
The level of commercial activity in Spain remained strong in the last quarter of the year. For example, card billing reached 5,887 million in the fourth quarter and grew 11% year-over-year, and POS billing reached 12,236 million and increased 23%, compared to the same quarter of the prior year.
At the end of the 2022 financial year, customer assets on the balance sheet amounted to approximately EUR 164,140 million and grew by 1.3% year-on-year. Current accounts amounted to 147,540 million euros, an increase of 0.2% year-on-year. Time deposits total 16,141 million euros, up 9.0% compared to the end of fiscal year 2021 and 1.5% compared to the previous quarter.
Off-balance sheet client funds amounted to EUR 38,492 million at the end of fiscal year 2022, down 7.6% year-on-year, mainly in investment funds, which totaled EUR 22,581 million, due to market volatility. In the inter-quarter comparison, a growth of 1.2% is observed. In addition, the non-performing loan ratio shows positive behavior at the end of 2022 and stands at 3.41%, compared to 3.65% at the end of the previous year.
For its part, the UK subsidiary TSB ended fiscal year 2022 with an individual pre-tax profit of £184 million, up 16.5% year-on-year. This figure already takes into account the extraordinary impact of the £48.65 million fine for the 2018 technology migration and yet TSB achieves the best result of the subsidiary since its integration into the Group.
TSB’s individual net profit is £102 million, while the positive contribution to Banco Sabadell Group’s accounts is £87 million.
With these figures, the board of directors of Banco Sabadell has agreed to increase the payout to 50% of the profit corresponding to the current year, compared to 31.8% the previous year. For example, it has proposed for approval at the next General Meeting of Shareholders an additional cash dividend of EUR 0.02 per share, and the buyback of EUR 204 million in shares. To this remuneration must be added the interim dividend of 0.02 euros that will be paid out at the end of December 2022.
The total remuneration thus amounts to 430 million euros, which corresponds to a dividend yield of 8.7% taking into account the closing price of 30 December 2022, the last trading day of last year (0.88 euros per share).
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
