Banc Sabadell nearly doubled its profits in 2015 after integrating UK bank TSB

Barcelona (CNA).- The Catalan bank obtained a net profit of €708.4 million in 2015, according to figures published by the company, 90.6% higher than what the group achieved in 2014. Banc Sabadell’s good result is mainly due to the integration in June of the UK bank TSB, which added accounts worth €122 million. Without TSB’s accounts, Banc Sabadell’s profits would only have grown by 57.8%. Thus, the net interest income, which measures the bank’s ordinary activity of receiving deposits and authorising credit, was €3.203 billion, 41.7% higher than in 2014. The internationalisation of Banc Sabadell has already been consolidated and 32% of the credits were authorised abroad. In 2014, this percentage was 6%. The default rate has dropped to 7.79%, 5 points less than in 2014. 

 

Banc Sabadell’s president Josep Oliu highlighted “the strength” of all the bank’s margins. The net interest income, which measures the bank’s ordinary activity of receiving deposits and authorising credit, was €3.203 billion, 41.7% higher than in 2014. Without the integration of UK bank TSB, this margin would have increased by only 17.9%.

However, the integration of TSB’s accounts not only benefited Banc Sabadell’s results but also meant an important boost for the Catalan bank’s internationalisation strategy. In 2015,32% of the credits were authorised abroad while in 2014 this percentage was only 6%. The commencing of the bank’s activity in Mexico and its presence in Colombia and Peru also consolidated Banc Sabadell’s internationalisation strategy.

Banc Sabadell’s annual result has also benefited from a reduction in provisions for asset depreciation; €2.333 billion was absorbed in 2015, which represents 6.7% less than in 2014. This drop may led to a downward tendency which could continue in the following quarters.  
Regarding the income record, commissions represented €1.003 billion, which is 16.5% higher than in 2014. Most of these incomes come from the growth of the investment fund, which reached €21.427 billion at the end of 2015, 36.4% more than the previous year.

Clients’ resources reached €131.489 billion, increasing by 39.2% in aggregate value.

Solvency has increased and the default rate has dropped

The group’s loans portfolio reached €140.226 billion, but without TSB’s accounts neither the temporary acquisition of assets nor the doubtful assets balance would have increased by 2.1%. New production mortgages increased by 39% in volume and by 24.6% in terms of contracts signed. During 2015, Banc Sabadell sold 10,949 properties at a 44% discount in relation to the gross value, which is a lower discount that the 51% registered in 2014.

Regarding its solvency, Banc Sabadell’s level in CET1 ‘fully loaded’ terms was 11.4%, higher than the 9.25% established by the legal standards.

The default rate has dropped to 7.79%, 5 points less than in 2014. In absolute terms, the default portfolio decreased by €3.566 billion, the doubtful assets’ portfolio reached €12.344 billion and the troubled assets portfolio reached 21.579 billion.