Balance sheet management
Demand for credit is reviving.
The balance of doubtful loans and problem assets is declining.
Off-balance sheet funds grew steadily throughout the year.
| Thousand euro | |||
|---|---|---|---|
| Assets | 2014 | 2013 (*) | % 14/13 |
| Cash and balances with central banks | 1,189,787 | 3,201,898 | (62.8) |
| Assets held for trading. derivatives and other financial assets | 3,253,356 | 2,623,485 | 24.0 |
| Available-for-sale financial assets | 21,095,619 | 19,277,672 | 9.4 |
| Loans and receivables | 117,895,179 | 118,989,126 | (0.9) |
| Loans and advances to credit institutions | 4,623,197 | 3,525,521 | 31.1 |
| Loans and advances to customers (net) | 110,835,723 | 112,928,890 | (1.9) |
| Debt securities | 2,436,259 | 2,534,715 | (3.9) |
| Investments | 513,227 | 640,842 | (19.9) |
| Tangible assets | 3,982,866 | 3,935,322 | 1.2 |
| Intangible assets | 1,591,296 | 1,501,737 | 6.0 |
| Other assets | 13,824,343 | 13,352,459 | 3.5 |
| Total assets | 163,345,673 | 163,522,541 | (0.1) |
| Liabilities | 2014 | 2013 (*) | % 14/13 |
| Liabilities held for trading and derivatives | 2,254,459 | 1,972,190 | 14.3 |
| Financial liabilities at amortized cost | 145,580,114 | 147,269,474 | (1.1) |
| Deposits from central banks | 7,201,546 | 9,227,492 | (22.0) |
| Deposits from credit institutions | 16,288,193 | 13,857,264 | 17.5 |
| Customer deposits | 98,208,370 | 99,362,908 | (1.2) |
| Marketable debt securities | 20,196,329 | 21,166,915 | (4.6) |
| Subordinated liabilities | 1,012,362 | 1,089,046 | (7.0) |
| Other financial liabilities | 2,673,314 | 2,565,849 | 4.2 |
| Liabilities under insurance contracts | 2,389,571 | 2,134,139 | 12.0 |
| Provisions | 395,215 | 664,246 | (40.5) |
| Other liabilities | 1,510,362 | 1,266,067 | 19.3 |
| Total liabilities | 152,129,721 | 153,306,116 | (0.8) |
| Equity | 2014 | 2013 (*) | % 14/13 |
| Shareholders' funds | 10,223,743 | 10,037,368 | 1.9 |
| Valuation adjustments | 937,416 | 120,814 | — |
| Non-controlling interests | 54,793 | 58,243 | (5.9) |
| Total equity | 11,215,952 | 10,216,425 | 9.8 |
| Total liabilities and equity | 163,345,673 | 163,522,541 | (0.1) |
| Memorandum accounts | 2014 | 2013 (*) | % 14/13 |
| Contingent exposures | 9,132,560 | 8,663,950 | 5.4 |
| Contingent commitments | 14,769,638 | 12,026,000 | 22.8 |
| Total memorandum accounts | 23,902,198 | 20,689,950 | 15.5 |
| (*) | Restated as a result of early application of IFRIC 21. Presented solely for the purposes of comparison. |
T2
At the end of 2014, the total assets of Banco Sabadell and its Group amounted to €163,345.7 million, i.e. very similar to the figure at the end of 2013 (€163,522.5 million).
Lending to companies, of all sizes, is rising.
Gross loans and advances to customers (excluding repos) accounted for 75% of the group's total consolidated assets and amounted to €121,140.8 million at year-end. Although this item declined by 2.8% year-on-year (mainly as a result of the lower volume of doubtful balances), demand for credit showed signs of recovering in the final months of the year. For example, gross loans and advances (excluding repos and NPLs) increased by €773.1 million in the fourth quarter.
Mortgage loans are the largest single component of gross lending, amount- ing around 55% of the total as of 31 December 2014 (G3 & G4).
The problem asset situation improved in 2014; excluding the assets covered by the Asset Protection Scheme (APS) for Banco CAM, the NPL ratio was 12.2% at 2014 year-end, down from 13.6% a year earlier. The coverage ratio, expressed with respect to total exposure to loans and real estate, was 13.1% at the end of 2014 (T3).
G3 Loans and advances to customers
31.12.2013
| 1 | Demand loans and other | 7.8% |
| 2 | Mortgage loans & credit | 57.4% |
| 3 | Other secured loans & credit |
2.4% |
| 4 | Trade credit | 4.7% |
| 5 | Other loans | 21.8% |
| 6 | Other credit | 3.7% |
| 7 | Leasing | 2.2% |
G4 Loans and advances to customers
31.12.2014
| 1 | Demand loans and other | 7.8% |
| 2 | Mortgage loans & credit | 54.5% |
| 3 | Other secured loans & credit |
2.2% |
| 4 | Trade credit | 4.9% |
| 5 | Other loans | 24.3% |
| 6 | Other credit | 4.2% |
| 7 | Leasing | 2.1% |
The ratio of non-performing loans improved and NPL coverage remained high.
Real estate sales were 10.3% above target.
| Thousand euro | |||
|---|---|---|---|
| 2014 | 2013 | % 14/13 | |
| Non-performing loans (*) | 14,192,150 | 16,021,491 | (11.4) |
| Total risks (*) (**) | 116,607,540 | 117,584,592 | (0.8) |
| Loan loss ratio (%) (*) | 12.7 | 13.63 | |
| Reserves for NPLs and real estate | 17,441,989 | 18,341,298 | (4.9) |
| Overall coverage ratio (%) (***) | 13.1 | 13.6 | |
| (*) | The figures and percentages shown do not include assets covered by the Asset Protection Scheme (APS). |
| (**) | Includes contingent liabilities. |
| (***) | Expressed with respect to total exposure to loans and real estate. |
T3
| €Mn, | |||
|---|---|---|---|
| 2014 | 2013 | % 14/13 | |
| Total liabilities | 152,130 | 153,306 | (0.8) |
| Customer deposits on balance sheet | 94,461 | 94,497 | (0.0) |
| Other term funds on the balance sheet (*) | 51,186 | 57,635 | (11.2) |
| Demand deposits | 43,275 | 36,862 | 17.4 |
| Capital market | 20,196 | 21,167 | (4.6) |
| Wholesale funding | 23,085 | 26,063 | (11.4) |
| BCE | 7,200 | 8,800 | (18.2) |
| Off-balance sheet funds | 30,379 | 25,370 | 19.7 |
| Investment funds | 15,706 | 11,019 | 42.5 |
| Pension funds | 4,335 | 4,356 | (0.5) |
| Third-party insurance products | 7,421 | 8,067 | (8.0) |
| Wealth management | 2,918 | 1,927 | 51.4 |
| Total customer funds | 124,839 | 119,867 | 4.1 |
| (*) | Includes term deposits and other liabilities placed by the branch network: preference shares, mandatory convertible bonds, non-convertible bonds, commercial paper and others. Excluding repos. |
T4
In 2014, Solvia sold 16,172 units of real estate on the balance sheet for €2,744 million.
In 2014, the value of Banco Sabadell Group’s securities portfolio increased by 7.7% year-on-year to a year-end total of €24,293 million. The Bank's fixed-income holdings, which account for 96% of the securities portfolio, lend stability to net interest income.
The Group's total liabilities as of 31 December 2014 amounted to €152,130 million, a reduction of 0.8% year-on-year (T4).
Customer funds (on and off the balance sheet) expanded by 4.1% year-on- year to €124,839 million.
Total funds on the balance sheet remained stable: €94,461 million at year-end. Within customer deposits, demand accounts (current and savings) expanded by 17.4% year-on-year. Time deposits decreased by 12.2% compared with 2013, in line with the downward trend in interest rates and savers' pursuit of other forms of investment that offered higher returns. Diagrams G5 and G6 present the composition of customer deposits at the end of 2014 and 2013.
Off-balance sheet customer funds increased by 19.7% year-on-year. Funds under management in mutual funds and investment companies increased by 42.5% to €15,706 million, and customer assets under management expanded by 51.4% to €2,918.1 million. In 2014, Banco Sabadell was one of the Spanish banks with the fastest growth in funds under management in mutual funds and investment companies, with a market share of 5.1% (4.1% in 2013).
G5 Customer deposits (*)
31.12.2013
| 1 | Current accounts | 26.5% |
| 2 | Savings accounts | 10.7% |
| 3 | Time deposits | 61.4% |
| 4 | Assets ceded under repurchase agreements |
1.4% |
G6 Customer deposits (*)
31.12.2014
| 1 | Current accounts | 31.8% |
| 2 | Savings accounts | 12.4% |
| 3 | Time deposits | 54.5% |
| 4 | Assets ceded under repurchase agreements |
1.3% |
(*) Excluding adjustments for accruals and hedges with derivatives.
A sharp increase in market share in mutual funds.