Banco De Sabadell Sa · BME:SAB
Banco De Sabadell Sa — Banco De Sabadell Sa Ord — Q3 2024 Earnings Presentation
39 slides from Banco De Sabadell Sa's earnings presentation, Oct 31, 2024
Slide 1: 3Q24 Results
3Q24 Results October 31, 2024
Slide 2: Index
1 3Q24 highlights 2 Financial results Index 3 Balance sheet 4 Closing remarks
Slide 3: 3Q24 Highlights
1 3Q24 Highlights
Slide 4: 3Q24 key messages
3Q24 key messages Good momentum in commercial Relatively lower NII sensitivity activity despite seasonality to interest rates Performing loans: NII -0.7% QoQ +3% YtD NIM -4bps QoQ +2% YoY RoTE1 13.2% CET1 FL Asset quality keeps CET1 FL Group net profit of 13.80% improving 13.80% €1.3bn in 9M24 Total
Slide 5: Loan volumes and customer funds keep improving YoY
Loan volumes and customer funds keep improving YoY Performing loans across geographies Total customer funds €M €M Sep-24 QoQ YoY Ytd Sep-24 QoQ YoY Ytd Spain 96,881 -0.6% +1.1% +2.4% +0.2% +0.9% +1.6% On-balance sheet 163,468 +0.1% +0.5% +0.9% Constant FX UK (TSB) 43,209 +0.7% +3.4% +4.4% Constant F
Slide 6: Positive trend in commercial activity continues despite quarterly seasonality
Positive trend in commercial activity continues despite quarterly seasonality Mortgages Consumer loans RaRoC, LTV and €M, quarterly new lending in Spain affordability at healthy levels €M, quarterly new lending in Spain 91% pre-approved loans and stable in the quarter 1,499 1,618 +82% 642 662 559 +1
Slide 7: Strong growth in payment services continues while savings & investment products increase
Strong growth in payment services continues while savings & investment products increase Cards Retailer payment services (PoS) Quarterly turnover in Spain (in €M) Quarterly turnover in Spain (in €M) 14,799 15,909 14,428 6,148 6,191 6,552 +7% +8% Var. YoY Var. YoY +7% +9% +6% 9M24/9M23 +10% 9M24/9M23
Slide 8: Positive loan growth across all Spanish segments in the year
Positive loan growth across all Spanish segments in the year Performing loans by segment, ex-TSB €bn Sep-24 QoQ YoY Ytd Sep-24 QoQ YoY Ytd Mortgages 38.3 +1.5% +0.1% +1.5% Mexico 4.2 -10.7% -11.1% -9.4% Constant FX X.X% -3.4% -1.2% -1.6% Consumer loans 4.4 +5.4% +16.8% +13.8% Miami 6.3 -2.6% +10.1%
Slide 9: TSB loan book remains flattish in the year
TSB loan book remains flattish in the year Quarterly new mortgage lending TSB customer deposits £M £bn +16% Mortgage Sep-24 QoQ YoY 3Q24 Cost applications 1,632 1,891 Current Accounts 13.8 -0.4% -5.0% -0.07% 1,292 Savings 21.3 +1.0% +4.8% -2.56% 1,182 1,152 -3% 1.52% Var. YoY +24% Total 35.1 +0.4% +
Slide 10: Strong core results in the quarter at TSB
Strong core results in the quarter at TSB TSB standalone P&L and its contribution to Sabadell £M 16.6% Solvency 3Q24 3Q24/2Q24 9M24 9M24/9M23 CET1 FL NII 250 3.5% 730 -7.0% Fully-loaded Fees & commissions 24 15.1% 70 -11.6% 1 Recurrent Costs -176 -6.7% -557 -4.5% 2 Core results 98 14.9% 243 -13.4% T
Slide 11: Higher cost savings to drive profitability improvement further in 2025
Higher cost savings to drive profitability improvement further in 2025 Net Structural hedge contribution Net Interest Income to grow at high Interest to improve by c.£100M in 2025 single digit CAGR in 2025-26 Income and even higher delta in 2026 New yr £27M ✓ £18M in 1.0 Total costs to decline by: C
Slide 12: All-time high quarterly net profit
All-time high quarterly net profit 3Q24 (€M) 3Q24/2Q24 9M24 (€M) 9M24/9M23 NII 1,253 -0.7% 3,746 +6.7% 13.80% Fees 336 +0.2% 1,010 -3.6% 13.80% CET1 FL +32bps QoQ Recurrent costs1 -778 +2.7% -2,286 +2.5% Core results2 811 -3.4% 2,470 +6.1% Provisions -172 -5.0% -561 -17.7% 13.2% 13.2% RoTE3 Net prof
Slide 13: Financial results
Financial results v2
Slide 14: Profitability keeps increasing in the quarter
Profitability keeps increasing in the quarter Sabadell ex-TSB Sabadell Group €M 3Q24 9M24 3Q24/2Q24 9M24/9M23 3Q24 9M24 3Q24/2Q24 9M24/9M23 Net interest income 957 2,889 -2.2% 10.6% 1,253 3,746 -0.7% 6.7% Fees & commissions 307 928 -1.0% -3.0% 336 1,010 0.2% -3.6% Core banking revenue 1,265 3,817 -1
Slide 15: NII supported by higher loan volumes in the quarter
NII supported by higher loan volumes in the quarter Group NII Group NII QoQ evolution €M €M 1,242 1,262 1,253 1,262 +3 1,253 +1 3Q24/2Q24 -13 298 283 296 • Customer -0.7% margin: -22 • Volumes: +30 • FX impact: -5 944 979 957 9M24/9M23 +6.7% ALCO, liquidity 3Q23 2Q24 3Q24 2Q24 Customer NII and whole
Slide 16: Sabadell's NII is more resilient in a lower interest rate environment
Sabadell’s NII is more resilient in a lower interest rate environment 1 c.70% c.5% c.25% Customer margin ex-TSB Group NII 2 ALCO, excess Group NII 3 TSB NII Group NII liquidity and wholesale funding • Lower sensitivity to interest rates than Spanish peers: 60% ex-TSB Fixed rate loan book • NII sensi
Slide 17: Fees remained flattish in the quarter despite seasonality
Fees remained flattish in the quarter despite seasonality Group fees & commissions Group fees & commissions €M 3Q24/2Q24 9M24/9M23 Credit and 350 -€2M -3.3% -€4M -1.9% 33 335 336 contingent risk 24 28 3Q24/2Q24 73 72 69 Services +€4M +2.0% -€29M -4.9% +0.2% Asset Mgmt.1 -€1M -0.7% -€4M -1.6% 175 166
Slide 18: Costs in the quarter aligned with our guidance
Costs in the quarter aligned with our guidance Group costs €M 792 764 753 14 6 119 125 126 42.2% 3Q24/2Q241 4X.X% • Positive one-off in TSB neutralises a negative 199 190 175 +2.7% Efficiency ratio one-off in Spain ex-TSB • Cost savings from the previous efficiency9M24 plan at TSB fully accrued in t
Slide 19: Strong asset quality reduced total CoR to 44bps
Strong asset quality reduced total CoR to 44bps Group credit provisions Group total provisions 3Q24 breakdown €M €M 3Q24/2Q24 172 160 16 21 109 121 +11.4% 35 121 0 4 18 139 104 103 9M24/9M23 3Q23 2Q24 3Q24 -25.6% Credit provisions Foreclosed asset NPA Other provisions Total provisions for NPLs provi
Slide 20: Balance sheet
Balance sheet
Slide 21: NPL ratio keeps improving while coverage ratio increases
NPL ratio keeps improving while coverage ratio increases Group NPLs and NPL ratio Exposure by stage and coverage ratio €M €M, % Stage 2 Stage 3 61% Total provisions 60% Sep-24 YoY Sep-24 YoY over stage 3 57% Exposure (€M) 11,981 -858 5,283 -608 % of total loan book 7.1% -60bps 3.1% -40bps 3.54% 3.21
Slide 22: Asset quality indicators further improved in the quarter
Asset quality indicators further improved in the quarter Group foreclosed assets Group NPAs €M €M 57% 58% Coverage 40% Coverage 54% 39% ratio 39% ratio -11% YoY -16% YoY 6,930 6,341 6,155 1,039 902 872 Sep-23 Jun-24 Sep-24 Sep-23 Jun-24 Sep-24 Group key ratios • 24% of the stock sold in the last 12
Slide 23: 7th consecutive quarter of improving asset quality trend
7th consecutive quarter of improving asset quality trend 3Q24 vs 1Q23 Total provisions 61% over stage 3, Group Coverage ratio +6.2pp 55% 3.52% 3.14% NPL ratio, Group NPL ratio -38bps 57 56 55 55 50 46 44 Total Cost of Risk, Group Total Cost of Risk -13bps (in bps) 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24
Slide 24: Robust liquidity position
Robust liquidity position Liquidity metrics Credit ratings Sabadell Group Group long-term and short-term credit rating and outlook 95% 146% 209% Long-term Short-term Outlook Loan-to- NSFR LCR Standard & deposit BBB+ A-2 Positive Poor’s Moody’s Baa2 P-2 Positive Total liquid assets €bn Fitch Ratings
Slide 25: Ample MREL buffer
Ample MREL buffer MREL position, Sabadell Group YTD public issuances % Risk Weighted Assets (RWAs), % Leverage Ratio Exposure (LRE) Instrument Date Size (€M) Maturity Coupon (Years) th Senior Preferred Jan 15 750 6NC5 4.00% th Covered bonds (TSB) Mar 5 500 5 3.32% 29.15% 9.69% Senior Non Preferred M
Slide 26: CET1 FL at 13.80% after increasing by 32bps QoQ
CET1 FL at 13.80% after increasing by 32bps QoQ MDA Evolution of capital ratios, fully loaded MDA 485bps Shareholder value creation2 485bps +13% 18.84% QoQ 18.54% +26bps +10bps 18.35% -4bps +30bps 0.14 +32bps QoQ YoY +2.3% +49bps 0.02 Group 13.80% 13.48% 13.48% 13.13% 2.29 QoQ 2.17 +32bps QoQ Sep-23
Slide 27: Closing remarks
i Closing remarks
Slide 28: Well on track to meet our guidance
Well on track to meet our guidance 2024 guidance (Jan’24) 2024 guidance (Apr’24) 2024 guidance (Jun’24) 9M24 Guidance 2024 Net Interest Income Low single-digit growth c.3% Mid-single digit growth +6.7% Confirmed (YoY) Fees & Commissions Mid-single digit decline = c.3% decline -3.6% Confirmed (YoY) R
Slide 29: Appendix
1 NIM and customer margin 2 Debt maturities and issuances 3 ALCO portfolio Appendix 4 ESG milestones 5 TSB asset quality, solvency and liquidity position 6 RWAs breakdown 7 MDA buffer
Slide 30: 1. NIM and customer margin
1. NIM and customer margin Sabadell Group Sabadell ex-TSB %, in euros %, in euros 3.18% 3.11% 2.99% 3.09% 2.99% 3.32% 3.41% 3.30% 3.20% 3.23% 2.08% 2.10% 2.06% 1.96% 2.00% 2.05% 2.06% 2.01% 2.02% 2.01% 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24 3Q24 TSB %, in euros 2.55% 2.58% Customer margin 2.44
Slide 31: 2. Debt maturities and issuances
2. Debt maturities and issuances Debt maturities Main debt maturities and redemptions in Maturities in €M last 6 months Instrument Date Nominal amount Senior non-preferred bonds 10/05/2024 €420M Covered bonds 10/06/2024 €1,000M Total €1,420M 4,837 4,960 3,731 3,207 2,815 Main debt maturities and cal
Slide 32: 3. ALCO portfolio
3. ALCO portfolio Evolution of fixed income portfolio Composition of fixed income portfolio Sabadell Group. €bn Sabadell Group. €bn. Sep-24. 11.0% 11.9% 12.2% 16.5 4.2 2.0 3.9 2.7 0.7 29.0 30.0 26.7 Spain Agencies & Covered bonds 6.3 6.4 5.1 Italy Other governments and Corporates & Financials UK Por
Slide 33: 4. ESG Milestones 3Q24
4. ESG Milestones 3Q24 • SEAT was granted financing to install solar panels in 5 of its plants with total power Mobilisation of sustainable finance output of 26.44MWp, this project being one of the largest self-consumption projects solutions in Europe, covering a surface area of 233,000m 2 €bn in cu
Slide 34: 5. TSB asset quality, solvency and liquidity position
5. TSB asset quality, solvency and liquidity position Asset quality TSB core mortgage portfolio overview % Sep-23 Jun-24 Sep-24 NPL ratio 1.4% 1.5% 1.5% 2% 6% Mortgages 83% >90% Coverage ratio 41% 37% 37% 9% total loan (YtD) book Cost of risk1 0.17% 0.10% 0.13% £33.5bn Residential repayment Solvency
Slide 35: 6. RWAs breakdown
6. RWAs breakdown Sep-24 RWAs: €79,931M By type: • Credit risk: €70.3bn • Market risk: €0.4bn • Operational risk: €9.1bn • Others: €0.1bn By geography: • Spain: €62.2bn • UK: €14.2bn • Mexico: €3.5bn 35
Slide 36: 7. Ample MDA buffer at 485bps, better than guidance
7. Ample MDA buffer at 485bps, better than guidance Group capital requirements Group capital position Leverage Pillar 1 CET1 4.50% MDA buffer ratio Pillar 2 CET1 Requirement (P2R) 1.27%1 485bps phase-in +31bps Capital Conservation Buffer 2.50% QoQ 5.3% Countercyclical Buffer 0.44% Other Systemically
Slide 37: Glossary
Glossary Term Definition CET1 FL Common Equity Tier 1 Fully Loaded CoR Cost of Risk CRR2 and CRR3 Capital Requirements Regulation 2 and 3 HQLA High Quality Liquid Asset LCR Liquidity Coverage Ratio: short-term liquidity ratio Leverage Ratio Exposure denominator is equivalent to total assets and a va
Slide 38: Disclaimer
Disclaimer This presentation (the "Presentation") has been prepared and is issued by, and is the sole responsibility of, Banco de Sabadell, S.A. ("Banco Sabadell" or "the Company"). For the purposes hereof, the Presentation shall mean and include the slides comprised in this document, any prospectiv
Slide 39: ©Sabadell
©Sabadell
Banco De Sabadell Sa Ord — Q3 2024 Earnings Presentation on 6ix