The attributable net profit of Banco Sabadell in the first quarter of 2023 experienced a 4% decrease compared to the same period of the previous year, reaching 205 million euros, as reported by the financial institution on Thursday when publishing its income statement.
The bank had to allocate 157 million euros to pay the extraordinary tax on banking income approved by the Government. Had it not been for this tax, the entity’s profit would have been 361 million euros, 69.4% more than a year earlier.
The fully loaded CET1 capital ratio was 12.78% in the quarter, which represents an increase of 24 basis points compared to the previous quarter and 33 basis points compared to a year earlier. The total capital ratio stood at 18.09% at the end of March 2023, 96 basis points above the first quarter of 2022.
Return on Tangible Assets (RoTE) was 9.9%. Sabadell has stressed that this figure is “in line” with the objectives set for 2023. If the impact of the tax was not taken into account, the RoTE would have been 11.4%.
The Catalan bank has also reported that the group’s non-performing loan ratio was 3.52% at the end of the first quarter of the year, therefore it fell by 14 basis points compared to a year earlier. In absolute terms, it stood at 5,891 million euros of problematic loans.
Sabadell customers have reorganized the distribution of the money they have within the bank during the quarter. On-balance sheet customer funds experienced a year-on-year rise of 0.6%, to 162,307 million euros. Demand deposits fell by 2.7%, to 142,624 million euros, while term deposits rose 19.4% compared to the first quarter of 2022, to 18,372 million euros.
Regarding deposits, a source of concern after the financial turmoil in the US and Switzerland in March, Sabadell has specified that 61% of its deposits are covered by guarantee funds. In addition, it has a liquidity coverage ratio of 220%, which rises to 250% if TSB is excluded.
The volatility of the financial markets also affected off-balance sheet customer funds, which stood at 39,513 million euros, 2.7% less than in the first quarter of last year.
The balance of credit to clients of the financial institution closed March with a year-on-year decrease of 1.4%, to 152,637 million euros due to the lower volumes of mortgages and the maturities of Treasury loans in Public Administrations. As indicated by the bank, the mortgage portfolio grew by 0.7%, to 38,894 million euros, while loans to SMEs and large companies contracted by 0.7%, to 42,590 million.
INCOME ACCOUNT.
Banco Sabadell registered total income (gross margin) in the quarter of 1,311 million euros, 2%. Interest income (interest margin) grew by 28.3%, up to 1,100 million, due to the improvement in the client margin and an increase in income from the fixed income portfolio.
On its side, income from commissions fell by 2.4%, to 350 million. The fall is due to the fact that the bank charged less commissions for asset management, especially due to the lower sale of pension funds and insurance.
The operating expenses of the financial entity were 593 million euros, 0.5% more, while amortizations represented a cost of 138 million, 1.3% more.
Regarding the British subsidiary TSB, the group has indicated that it had a net profit of 54 million pounds, so the contribution to Sabadell’s accounts was 53 million euros.
The interest margin of the British bank was 268 million pounds (302.5 million euros), 18.2% more year-on-year, while commission income fell 2.7%, to 25 million (28.2 millions of euros). The total costs of this entity experienced a rise of 1.7%, up to 192 million (216.8 million euros).
In the first three months of the year, the group closed a total of six offices, reaching 1,457 branches, although it hired 256 employees, up to 19,151 workers.
