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Sabadell doubles its profit in 2019 after selling Solvia and despite the losses of TSB


Sabadell has achieved more than double its profit at the end of 2019. The entity has won 768 million euros, which implies more than double the earnings of the previous year, in which it was heavily penalized by the TSB technological migration crisis, its British subsidiary. In addition, its profit was boosted in 2019 when accounting 138 million of euros from the capital gain from the sale of Solvia. The bank has managed to turn the page, although in 2019 its participation in TSB still registered some losses of 45 million of euros.

Regardless of the contribution of TSB To Sabadell's business, the numbers would be very different. In 2018 the bank would have earned 568 million euros (instead of the 328 million that it ended up earning) and in 2019 its profit would have been 813 million euros (compared to 768 million real profit), so that the benefit is It would have driven 43.1%.

However, the bank reduced its interest margin 1.4% in 2019, up to 3,622 million euros, something that Sabadell blames on the application of IFRS16 regulations, the securitization of loans and the effect of low interest rates in the euro zone. The commissions they grew 7.7% in the year thanks to an increase in all segments.

The bank reduced 1.8% its costs, up to 3,213 million euros, so that it placed its ratio of efficiency in 55.6%, which represents an improvement over 2018. The endowments and impairments they fell almost 30%, to 938 million euros.

Sabadell improved in 2019 its solvency upon reaching a ratio of capital CET1 fully loaded of the 11.7%, compared to 11.1% the previous year. If you consider the sale of its manager, closed this January, the capital would be 12.1%, exceeding the market reference.

Sabadell reduced its problematic assets on balance sheet at 8,200 million euros, so that at the end of 2019 the problem balance stood at 7,326 million euros, of which 6,141 million correspond to doubtful assets and 1,185 million to foreclosed assets. In the year, the fall was 954 million euros. The coverage of these assets was 46.9%, while the default decreased to 3.8% from 4.2% in 2018.

The account balances they grew 10.4%, while term deposits stood at 27,339 million euros (23,909 million euros without considering TSB). The resources of clients out of balance grew to 43,163 million at the end of 2019. On the other hand, the business activity in new mortgage loans and consumption rose 11%, exceeding 6.3 billion euros.

On the other hand, the board of the entity has agreed to distribute the second dividend charged to 2019, which will be € 0.02 per share. This remuneration, which will be paid in cash, complements the first payment made by the bank for the same amount, so that the total dividend amounts to 0.04 euros per share.

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