Triple Plan
2013
In 2013, the bank’s increased size and the difficult economic situation posed a number of challenges:
- Performing loans
- Foreclosed assets and doubtful balances
- Spain
- Other countries
2014-2016
The Triple Plan 2014-2016 was our response to these challenges:
2016
Problem assets cut by €7.4bn since 2013, amply exceeding the Triple Plan goal:
- Performing loans
- Foreclosed assets and doubtful balances
- Spain
- Other countries
Note: Foreclosed assets and doubtful exposures include 20% of the problem exposures covered by the APS. That risk is assumed by Sabadell under the APS protocol. Includes contingent risks.
The challenges have been met, the achievements recognised:
Reflected in the supervisor’s capital requirements (SREP)
In rating upgrades
The NPS rates customer experience
TSB was named the UK's "Best high-street bank"
Transformation
Balance sheet transformation
NPL ratio 13.6% NPL ratio 6.1%
€ billion
At the end of 2015, after two years of faster-than-expected revenue growth, the Triple Plan targets for the reduction in doubtful balances and for total problem assets were increased.
€ billion
At 2016 year-end, the reduction in doubtful exposures and in problem assets amply exceeded the revised targets of the Triple Plan.
Banco Sabadell is the bank that improved its NPL ratio the most and ranks second in terms of the reduction in problem assets since 2013.
Basis points
Note: Information from Spanish banks’ earnings reports between December 2013 and December 2016.
%
Transformation of production
Inorganic growth has been consolidated while improving the cost:income ratio.
Commercial transformation
This plan seeks to transform our commercial approach by adding new digital capabilities, improving sales processes and adapting the branch network to customer needs.
Five “tangible” initiatives to improve efficiency so as to become leaders in customer experience and earnings.
| Initiative | Objective | Some examples of how we achieve this |
|---|---|---|
| Distribution model | Adapt the distribution model to our customers’ needs, improving satisfaction and efficiency |
— Hub and spoke branches — Active account management (remote) — Simplify the branch network organisation structure |
| Digital capabilities | Offer our customers the best in digital capabilities |
— Sabadell Móvil — Sabadell Wallet — Digital signature – Instant Money – Touch ID – Sabadell Chat |
| Sales intelligence | Make a personalised offer and launch value-added products for our customers |
— Impact customers via pull events — Kelvin Retail: A business analytics service that identifies information of interest for sales |
| Value proposition | Improve our value proposition |
— Proteo Mobile (takes our services to wherever the customer is) – Companies commitment |
| Simplification | Simplify our customers’ interactions with the bank |
— The number of contracts for all types of deposits has been reduced from 7 to 1 — 48-hour turnaround for consumer loan applications — New customer sign-up process |
2.2mnDigital customers
41% of customers
230mnCustomers under active management
159 distance account managers
19%of sales are via digital platforms
863New branch design
41% of the network
32% dels clients
Top-rated app
Profitability
Net interest income performance was the best in the sector.
% Data for 4Q2016
Change since Triple
Basis points
Data from bank earnings presentations. Figures from December 2013 to December 2016.
The main domestic commercial growth targets have been achieved.
| Property and casualty insurance margin | Consumer finance margin | Treasury distribution revenues | Mutual fund fees and commissions | Pension funds and saving insurance margins | Private banking margin | |
| Triple objective | +72% | +32% | +43% | +94% | +17% | +41% |
| 2016 earnings | +96% | +84% | +72% | +100% | +24% | +45% |
| PST turnover share | Card turnover share | Mutual fund share | Transactional share | Total share of exports | Position in securities trading | |
| Triple objective | x 1.3 | x 1.3 | x 1.6 | x 1.3 | x 1.3 | Top 5 |
| 2016 earnings | x 1.4 | x 1.3 = | x 1.5 | x 1.2 | x 1.3 = | Top 3 |
Most of the Triple Plan’s financial objectives have been attained.
| Triple Plan objective | Banco Sabadell Group 2016 | Banco Sabadell excl. TSB 2016 | |
|---|---|---|---|
| Net interest income | €3bn | €3.8bn | €2.8bn |
| Fees and commissions | €1bn | €1.1bn | €1.0bn |
| Reduction of NPLs | €7.7bn | €8.2bn | €8.4bn |
| Reduction of problematic asset exposure | €4.4bn | €7.2bn | €7.4bn |
| Capital (phase-in) | 11.9% | 12.0% | 12.0% |
| Capital (fully loaded) | 11.2% | 12.0% | 12.0% |
| Net interest income / Average total assets | 1.76% | 1.86% | 1.71% |
All despite operating in a complex environment
Internationalisation
Under the Triple Plan, business outside Spain has expanded from 5% to 32% of the total, exceeding the objectives.
Triple Plan milestones
% Data for 4Q2016
TSB is a major step forward in the group’s internationalisation.
1 Data refer only to franchise.
2 NPS: Net Promoter Score (NPS) is based on the question: “On a scale of 0-10, where 0 is not at all likely and 10 is extremely likely, how likely is it that you would recommend TSB to a friend or colleague?” NPS is the percentage of TSB customers who score 9-10 after subtracting the percentage who score 0-6.
3 Independent benchmarking survey (covering most banks) by BDRC Continental (sampling 15,000 consumers in the United Kingdom, March 2016).
2017: Transition year
Commercial activity while protecting margins and increasing fees and commissions
Cost containment (Spain and the UK)
Accelerate the commercial transformation (remote management and digital offering)
Horizon 2020
A business plan fully in line with the industry’s current challenges and opportunities.
| 2008 – 2010 | Óptima | Capacity-building |
| 2011 – 2013 | Crea | Growing organically and through acquisitions |
| 2014 – 2016 | Triple | Transforming size into business performance |
| 2017 | Transition year | |
| 2018 – 2020 | New business plan |
– Growth in existing markets — Normalisation of the balance sheet — Optimisation of the cost:income ratio — Strengthening digital and commercial capabilities |
2020 objectives
