Sabadell's Q1 profit beats forecasts on lower costs, TSB

* Q1 net profit almost trebles to 213 mln vs 166 mln forecast

* Hits profitability target ahead of planned

* Net interest income rises 3% y/y, though down 0.6% q/q

* Lower costs and provisions help group earnings

* Shares rise more than 4% (Recasts story to lead on profitability, includes share reaction, details on TSB, comments from brokers)

By Jesús Aguado

MADRID, April 28 (Reuters) - Spain's Sabadell SABE.MC on Thursday hit its profitability target of more than 6% earlier than expected following cost savings, lower provisions and a positive contribution from its British unit TSB.

The country's fourth-largest bank in terms of total assets reported a net profit of 213 million euros ($224.5 million) in the January to March period. Analysts polled by Reuters expected a net profit of 166 million euros.

Loan loss provisions in the quarter fell 36% compared to the same period a year ago as Sabadell recovered from the COVID-19 pandemic and closed the quarter with a 6.5% return on tangible equity (ROTE), up from 5.05% in the previous quarter.

In January, the Spanish lender already anticipated it would achieve a ROTE of more than 6% in 2022, a year earlier than planned in its three-year strategy.

"We are beginning the year by improving our performance across all margins and we are continuing to reduce costs, this is accompanied by consolidation of TSB's positive contribution," Sabadell's Chief Executive Officer Cesar Gonzalez-Bueno said in a statement.

At 0746 GMT, Sabadell shares rose more than 4.5% on the results, against a 0.6% rise for Spain's blue-chip index Ibex-35 .IBEX , as analysts at JPMorgan and JB Capital also welcomed a solid capital built-up in the quarter.

Sabadell ended March with a core tier-1 fully loaded ratio, the strictest measure of solvency, of 12.45% compared to 12.18% at end-December.

The bottom line also rose on higher trading gains and a decline in costs of 5.6% in the quarter compared to the same quarter last year, mainly because of efficiency savings of more than 100 million euros annually from 2022 onwards from restructuring plans.

TSB made a positive contribution to parent group's results for the fifth consecutive quarter, contributing 19 million euros, compared to 2 million euros at the end of March 2021.

Lending income at TSB rose 10.1% compared to same quarter last year helped by rate hikes in this market though new mortgage production fell.

Swiss broker UBS said TSB came below expectations mainly due to a one-off tax impact.

Sabadell had frozen previous plans to sell TSB until it turns around the business.

TSB's acquisition by the Spanish lender in 2015 ran into issues in 2018 when IT glitches drove up costs.

At group level, first-quarter net interest income rose 3% from a year earlier to 858 million euros, compared with forecasts of 853 million euros, although it fell 0.6% against the previous quarter on pressure from low interest rates.
Reporting by Jesús Aguado; additional reporting by Emma Pinedo; Editing by Inti Landauro, Mark Potter and Barbara Lewis

免責聲明: XM Group提供線上交易平台的登入和執行服務,允許個人查看和/或使用網站所提供的內容,但不進行任何更改或擴展其服務和訪問權限,並受以下條款與條例約束:(i)條款與條例;(ii)風險提示;(iii)完全免責聲明。網站內部所提供的所有資訊,僅限於一般資訊用途。請注意,我們所有的線上交易平台內容並不構成,也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。


本網站的所有XM和第三方所提供的内容,包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接,皆爲‘按原狀’,並作爲一般市場評論所提供,而非投資建議。請理解和接受,所有被歸類為投資研究範圍的相關内容,並非爲了促進投資研究獨立性,而根據法律要求所編寫,而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊,相關詳情請點擊 這裡查看。

我們運用 cookies 提供您最佳之網頁使用經驗。更改您的cookie 設定跟詳情。