Profit performance
Banco Sabadell obtained €371.7 million in net attributable profit in 2014.
This result exceeds the targets set for the first year of the Triple plan.
Containment of personnel and administration expenses, on a like–for–like basis, combined with branch network restructuring resulted in a significantly improved cost:income ratio.
Consolidated data for 2014, the Bank's 133rd year of existence, reflects a sound balance sheet and confirms that the Banco Sabadell Group is growing steadily, based on consistent improvements in ordinary banking revenues and rigorous containment of operating costs.
The increase in average returns on average total assets was due to a number of factors, mainly higher customer spreads (due to the lower cost of customer deposits), the lower cost of capital market funding, the reduction in the volume of problem assets, and the improvement in the profitability of the acquired businesses.
| Thousand euro | |||||
|---|---|---|---|---|---|
| 2014 | % of ATA (**) | 2013 (*) | % of ATA (**) | 14/13 | |
| Interest and similar income | 4,513,497 | 2.76 | 4,863,170 | 2.92 | (7.2) |
| Interest and similar charges | (2,253,791) | (1.38) | (3,048,476) | (1.83) | (26.1) |
| Net interest income | 2,259,706 | 1.38 | 1,814,694 | 1.09 | 24.5 |
| Return on equity instruments | 8,628 | 0.01 | 7,329 | – | 17.7 |
| Share of profit/(loss) of equity-accounted undertakings | 101 | – | 11,107 | 0.01 | (99.1) |
| Net fees | 860,891 | 0.53 | 759,670 | 0.46 | 13.3 |
| Income from trading (net) | 1,763,604 | 1.08 | 1,479,185 | 0.89 | 19.2 |
| Exchange differences (net) | 99,556 | 0.06 | 67,871 | 0.04 | 46.7 |
| Other operating income and expense | (191,960) | (0.12) | (308,658) | (0.19) | (37.8) |
| Gross income | 4,800,526 | 2.94 | 3,831,198 | 2.30 | 25.3 |
| Personnel expenses | (1,202,604) | (0.74) | (1,135,175) | (0.68) | 5.9 |
| Other general administrative expenses | (570,714) | (0.35) | (587,886) | (0.35) | (2.9) |
| Depreciation and amortization | (278,104) | (0.17) | (228,447) | (0.14) | 21.7 |
| Profit before impairment and other provisions | 2,749,104 | 1.68 | 1,879,690 | 1.13 | 46.3 |
| Loan loss and other provisions | (2,499,659) | (1.53) | (1,768,998) | (1.06) | 41.3 |
| Profit on disposal of assets | 236,948 | 0.15 | 43,893 | 0.03 | 439.8 |
| Goodwill | – | – | 30,295 | 0.02 | (100.0) |
| Income before tax | 486,393 | 0.30 | 184,880 | 0.11 | 163.1 |
| Corporate income tax | (109,748) | (0.07) | (17,962) | (0.01) | – |
| Consolidated profit/(loss) for the year | 376,645 | 0.23 | 166,918 | 0.10 | 125.6 |
| Profit/(loss) attributable to non-controlling interests | 4,968 | 21,003 | (76.3) | ||
| Profit/(loss) attributable to the Group | 371,677 | 145,915 | 154.7 | ||
| (*) | Restated as a result of early application of IFRIC 21. | (**) | Average total assets. |
T1
- Net interest income amounted to €2,259.7 million in 2014, 24.5% more than in 2013, due principally to the lower cost of funding and, secondarily, to expansion of the consolidation scope to include the businesses acquired in 2013. Deposit repricing was the main driver and this trend is expected to continue in 2015 and 2016 (G1 & G2).
- The branch network's focus on selling managed investment products and services boosted net fees and commissions to €860.9 million at year-end, an increase of 13.3% year-on-year. This growth was observed across the board in all types of fees and commissions (risk operations, services, mutual funds, insurance and pension sales).
- Income from financial transactions and exchange differences amounted to €1,863.2 million, a 20.4% increase year-on-year. In particular, capital gains on the disposal of available-for-sale fixed-income financial assets amounted to €1,860.7 million in 2014.
Gross operating income amounted to €4,800.5 million.
- Operating expenses (personnel and general) amounted to €1,773.3 million in 2014, of which €40.2 million are non-recurrent items. In like-for-like terms (assuming that BMN-Penedès, SabadellSolbank and Banco Gallego were consolidated in 2013), recurring operating expenses declined by 4.4% year-on-year in 2014.
- The significant increase in gross income for 2014 coupled with policies to contain operating costs resulted in a significantly improved cost:income ratio of 53.14% in 2014 (a notable improvement on 2013), excluding a one-off gains on financial transactions.
G1 Margin performance
(%)
- Customer spread
- Net interest income/ Average total assets
G2 Credit yields and cost of customer funds
(%)
- Yield on custom loans
- Cost of customer funds
The Banco Sabadell Group ended 2014 with profit pre-provisions of €2,749.1 million, considerably higher than the 2013 figure.
- Provisions for loan losses and other impairments (mainly real estate and financial assets) amounted to €2,499.7 million (€1,769.0 million in 2013).
- Capital gains on asset disposals amounted to €236.9 million in 2014, including mainly €162 million in gross capital gains from the sale of the debt collection business and extraordinary revenue of €80 million from the signature of a reinsurance agreement for Mediterráneo Vida's individual death benefit portfolio.
- The income statement for 2013 included of €30.3 million in negative goodwill, most of which was recognized on the acquisition of Banco Gallego.
After deducting income tax and non-controlling interests, net income attributed to the Group amounted to €371.7 million in 2014, i.e. notably higher than in 2013.