Banco De Sabadell Sa · BME:SAB
Banco De Sabadell Sa — Banco De Sabadell Sa Ord — FY2024 Earnings Presentation
47 slides from Banco De Sabadell Sa's earnings presentation, Feb 7, 2025
Slide 1: FY2024 Results
FY2024 Results February 7, 2025
Slide 2: Index
1 2024 highlights 2 Index Financial results 3 Balance sheet 4 Closing remarks
Slide 3: 2024 Highlights
1 2024 Highlights
Slide 4: 2024 key messages
2024 key messages Strong commercial activity Resilient NII in the year despite momentum lower rates Performing loans: +4.7% YoY NII +5.5% YoY1 Customer funds: +7.1% YoY Customer margin +8bps RoTE 4Q24/4Q231 14.9% CET1 FL Asset quality continues CET1 Higher shareholder to improve 13.80%2 remuneration
Slide 5: 2024 RoTE of 14.0% excluding one-offs, exceeding guidance
2024 RoTE of 14.0% excluding one-offs (14.9% reported), exceeding guidance 2024 Sabadell Group One-Off Items 4Q24 Sabadell Group One-Off Items €M €M Gross Net Gross Net TSB efficiency initiatives -32 -23 Extraordinary interest on arrears 36 26 related to debt recovery Provisions released due to the
Slide 6: Loan volumes and customer funds recorded mid-single digit growth YoY
Loan volumes and customer funds recorded mid-single digit growth YoY Performing loans across geographies Total customer funds €M €M Dec-24 QoQ YoY Dec-24 QoQ YoY Spain 98,193 +1.4% +3.8% +3.7% +5.4% On-balance sheet 169,557 +3.5% +4.4% Constant FX UK (TSB) 43,380 +0.4% +4.8% Constant FX -0.4% +0.0%
Slide 7: Quarterly performance confirms excellent new lending activity in Spain
Quarterly performance confirms excellent new lending activity in Spain Mortgages Consumer loans €M, quarterly new lending in Spain €M, quarterly new lending in Spain RaRoC, LTV and affordability at c.90% pre-approved loans healthy levels and stable in the quarter 1,618 1,728 662 692 >100% 521 +33% V
Slide 8: Strong growth in payment services continues
Strong growth in payment services continues. Savings & investment products increase Cards Retailer payment services (PoS) Quarterly turnover in Spain (in €M) Quarterly turnover in Spain (in €M) 15,909 6,212 6,552 6,623 13,513 14,259 +7% +6% Var. YoY Var. YoY +7% +8% +1% 2024/2023 -10% 2024/2023 Var.
Slide 9: Loan growth accelerates in the Spanish and international businesses
Loan growth accelerates in the Spanish and international businesses Performing loans by segment, ex-TSB €bn Dec-24 QoQ YoY Dec-24 QoQ YoY Mortgages 38.8 +1.5% +3.0% Mexico 4.2 +2.1% -7.5% Constant FX X.X% -3.0% -4.6% Consumer loans 4.6 +4.5% +19.0% Miami 7.1 +12.7% +23.5% SMEs & Corporates 41.6 +0.8
Slide 10: Positive dynamics in new mortgage lending and cost of deposits at TSB
Positive dynamics in new mortgage lending and cost of deposits at TSB Quarterly new mortgage lending TSB customer deposits £M £Bn -10% Mortgage applications Dec-24 QoQ YoY 4Q24 Cost 1,891 1,709 Current Accounts 13.9 +0.2% -2.6% -0.07% 1,182 1,238 Savings 21.2 -0.6% +3.2% -2.51% 1,152 +5% 1.59% Var.
Slide 11: Largest annual contribution from TSB
Largest annual contribution from TSB TSB standalone P&L and its contribution to Sabadell £M 4Q24 4Q24/3Q24 2024 2024/2023 NII 255 2.0% 984 -3.7% Fees & commissions 21 -12.9% 91 -16.0% Recurrent costs1 -183 4.1% -740 -3.7% Core results2 92 -5.5% 335 -7.3% 15.4% Solvency Total provisions 4 n.m. -32 -5
Slide 12: TSB will keep increasing its profitability in 2025 and 2026
TSB will keep increasing its profitability in 2025 and 2026 Net Structural hedge contribution Net Interest Income to grow by Interest to improve by c.£100M in 2025 high single digits in 2025 Income Costs Efficiency measures in 2024 Total costs to decline by -3% in 2025 >90% <56% ̴ 16% CoR normalisin
Slide 13: All-time high yearly net profit, above €1.8bn
All-time high yearly net profit, above €1.8bn 4Q24 (€M) 4Q24/3Q24 2024 (€M) 2024/2023 13.0% CET1 NII 1,275 +1.7% 5,021 +6.3% Reported Fees 347 +3.3% 1,357 -2.1% 14.0% Recurrent costs1 -776 -0.2% -3,062 +2.7% CET13 +83bps YoY capital Core results2 845 +4.2% 3,315 +6.0% generation Provisions -152 -11.
Slide 14: Maintaining our commitment to sustainability
Maintaining our commitment to sustainability, reinforced by inclusion in Dow Jones Sustainability World Index Significant progress made in Good performance across International recognition for ESG achieving targets set in Sabadell’s all ESG indices and inclusion efforts over the year Commitment to S
Slide 15: Shareholder remuneration for 2024-25 improved to €3.3bn
Shareholder remuneration for 2024-25 improved to €3.3bn… Shareholder remuneration expected in 2024 and 2025 €bn Already approved by ECB €1.00bn 3.30 €1.10bn share buyback 1.20 €3.3bn Total shareholder cash dividend remuneration (60% pay-out) 0.25 2.10 2024-25e 0.75 0.67 €0.61 0.43 Equivalent EUR per
Slide 16: Equivalent to €61cts/share with a clear path to distribute it
… equivalent to €61cts/share with a clear path to distribute it Against 2024 Results Against 2025 Results 2024 2025 2025 2025 2026 1st October 28th March 29th August 29th December March Total Interim dividend Final dividend1 1st interim 2nd interim remuneration Final dividend1 Cash 2024 2024 dividen
Slide 17: Financial results
Financial results 2
Slide 18: Recurrent profitability at 14% RoTE, beating the guidance
Recurrent profitability at 14% RoTE, beating the guidance Sabadell ex-TSB Sabadell Group €M 4Q24 2024 4Q24/3Q24 2024/2023 4Q24 2024 4Q24/3Q24 2024/2023 1 Net interest income 969 3,858 1.2% 8.7% 1,275 5,021 1.7% 6.3% Fees & commissions 322 1,249 4.6% -1.0% 347 1,357 3.3% -2.1% Core banking revenue 1,
Slide 19: NII grew by mid-single digits, meeting our YE target
NII grew by mid-single digits, meeting our YE target Group NII Group NII QoQ evolution €M €M 1,275 +36 1,275 1,211 1,253 4Q24/3Q241 1,253 +17 -10 273 296 306 -1.2% -21 • Liquidity: +23 • Customer margin: -5 • ALCO: +9 • Loan • Wholesale 938 957 969 volumes: +1 funding: -15 2024/20231 • Deposit +5.5%
Slide 20: Resilient NII in a lower interest rate environment
Resilient NII in a lower interest rate environment 2025 outlook 1 Sabadell ex-TSB Assumptions 2024 2025e ▪ Loan book in Spain shows sustainable growth ECB depo rate 3.00% 1.75% o Volumes to maintain the current trend (end of period) 60% 3.3% Loans (% YoY) +5% MSD increase Customer ▪ Customer spread
Slide 21: Fees performed better than guidance and are poised to grow in 2025
Fees performed better than guidance and are poised to grow in 2025 Group fees & commissions Group fees & commissions €M 4Q24/3Q24 2024/2023 Credit and -€1M -1.1% -€6M -2.2% 339 336 347 contingent risk 33 25 28 68 4Q24/3Q24 71 69 Services -€4M -2.3% -€37M -4.6% +3.3% 165 Asset Mgmt.1 +€16M +21.5% +€1
Slide 22: Recurrent costs in line with our +c.2.5% YoY guidance
Recurrent costs in line with our +c.2.5% YoY guidance Group costs Efficiency ratio2 €M % 784 792 14 776 -2.8p.p. 33 43.5% 42.2% 124 126 126 4Q24/3Q241 4X.X% Efficiency ex-TSB ratio -0.2% 51.4% Efficiency2024 ratio 175 185 48.7% ex-TSB 185 9M24 442 476 465 2024/20231 +2.7% 4Q23 3Q24 4Q24 2023 2024 Ex
Slide 23: Total CoR at 42bps beating our YE guidance
Total CoR at 42bps beating our YE guidance Group credit provisions Group total provisions 4Q24 breakdown €M €M 4Q24/3Q24 52 174 152 25 -57.2% 53 121 106 36 18 52 11 149 103 -5 57 2024/2023 -54 -36.6% 4Q23 3Q24 4Q24 Recurrent One-off credit Foreclosed NPA Other Total Ex-TSB TSB credit provisions asse
Slide 24: Total CoR to improve further in 2025
Total CoR to improve further in 2025 Group total provisions breakdown €M 55bps 42bps1 26bps 2bps 8bps 6bps -21.6% +16bps 910 75 714 37 835 676 2023 2024 Ex-TSB TSB Total CoR guidance to improve to c.40bps in 2025 1 Includes €54M of provisions released in connection with debt recovered following a le
Slide 25: Balance sheet
Balance sheet o
Slide 26: NPL ratio below 3%, at its lowest level since 2009
NPL ratio below 3%, at its lowest level since 2009 Group NPLs and NPL ratio Exposure by stage and coverage ratio €M €M, % Stage 2 Stage 3 Total provisions 61% 62% over stage 3 Dec-24 YoY Dec-24 YoY 58% Exposure (€M) 10,655 -1,567 4,844 -933 % of total loan book 6.3% -118bps 2.8% -67bps 3.52% 3.14% C
Slide 27: NPAs decreased by 16% in the year
NPAs decreased by 16% in the year Group foreclosed assets Group NPAs €M €M 58% 59% Coverage Coverage 56% 40% 40% 40% ratio ratio -16% YoY -14% YoY 6,748 6,155 5,680 971 872 836 Dec-23 Sep-24 Dec-24 Dec-23 Sep-24 Dec-24 Group key ratios • 21% of the stock sold in the last 12 Dec-23 Sep-24 Dec-24 mont
Slide 28: Another consecutive quarter of improving asset quality trend
Another consecutive quarter of improving asset quality trend 4Q24 vs 1Q23 62% Total provisions over stage 3, Group Coverage ratio +7.1pp 55% 3.52% NPL ratio, Group NPL ratio -68bps 2.84% Total Cost of Risk, Group Total Cost of Risk -15bps (in bps) Constant focus on risk management will ensure that a
Slide 29: Robust liquidity position along with improving credit ratings
Robust liquidity position along with improving credit ratings Liquidity metrics Long-term ratings evolution Sabadell Group Dec-23 Dec-24 Annual changes ▪ One notch up and 93% 142% 210% Standard & BBB BBB+ outlook remains Loan-to- Poor’s Positive Positive NSFR LCR positive deposit Baa2 Baa2 ▪ Improve
Slide 30: Lower MREL requirements enhance management buffers
Lower MREL requirements enhance management buffers MREL position, Sabadell Group 2024 public issuances by instrument % Risk Weighted Assets (RWAs), % Leverage Ratio Exposure (LRE) Instrument Size (€bn) 27.85% Tier 2 0.5 9.54% Senior Non-Preferred 1 4.17% Senior Preferred 1.3 25.33% 6.39% 2025 2025 C
Slide 31: CET1 at 13.0% after distributing 1pp of excess capital
CET1 at 13.0% after distributing 1pp of excess capital Evolution of capital ratios Neutral Shareholder value creation2 MDA Basel IV 406bps implementation 18.84% +14% 18.60% 17.78% +30bps +2bps CET1 -8bps 17.60% generation 0.11 +24bps -102bps QoQ 14.04% +24bps 13.80% 13.80% 2.39 13.21% 13.02% 13.02%
Slide 32: Closing remarks
i Closing remarks
Slide 33: All full-year 2024 targets achieved
All full-year 2024 targets achieved 2024 guidance 2024 guidance 2024 guidance 2024 guidance (Jan’24) (Apr’24) (Jun’24) (Sep’24) FY2024 Guidance 2024 Net Interest Income Low single-digit growth c.3% Mid-single digit growth = +5.5%1 (YoY) Fees & Commissions Mid-single digit decline = c.3% decline = -2
Slide 34: Guidance 2025
Guidance 2025 Net interest income Non-interest income Higher than €4.9bn Fees: Low single-digit growth Banking tax c.€140M RoTE CET1 FL c.14% 13.80% Total costs Total (including amortisation) Cost of Risk Growth c.1% c.40bps ROTE >14% in 2026 34
Slide 35: Appendix
1 NIM and customer margin 2 Debt maturities and issuances 3 Significant Risk Transfer (SRT) instruments Appendix 4 ALCO portfolio 5 ESG milestones 6 TSB asset quality, solvency and liquidity position 7 RWAs breakdown 8 MDA buffer
Slide 36: NIM and customer margin
1. NIM and customer margin Sabadell Group Sabadell ex-TSB %, in euros %, in euros 3.32% 3.41% 3.30% 3.31% 3.18% 3.11% 3.16% 3.23% 2.99% 3.09% 3.18% 3.07% 2.00% 2.05% 2.06% 2.01% 1.98% 1.91% 2.08% 2.10% 2.06% 2.06% 2.01% 2.00% 4Q23 1Q24 2Q24 3Q24 4Q24 4Q23 1Q24 2Q24 3Q24 4Q24 TSB %, in euros Customer
Slide 37: 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 preferred bonds 17/11/2024 (call) €500M Covered bonds 27/12/2024 €250M Total €750M 4,846 3,743 3,410 3,207 2,620 2,824 2,500 Main debt maturit
Slide 38: Significant Risk Transfer (SRT) transactions
3. Significant Risk Transfer (SRT) transactions Outstanding SRTs, Sabadell Group Outstanding Programme Underlying assets portfolio transactions (#) • Optimisation of capital consumption Project Finance & Corporate loans in US, Hermes 1 • Active transfer of risk USD denominated • Cost of capital well
Slide 39: ALCO portfolio
4. ALCO portfolio Evolution of fixed income portfolio Composition of fixed income portfolio Sabadell Group. €bn Sabadell Group. €bn. Dec-24. 17.0 4.2 2.0 4.2 2.9 0.7 11.7% 12.2% 12.6% 30.0 31.0 27.5 Spain Agencies & Covered bonds 6.4 6.1 6.0 Italy Other governments and Corporates & Financials UK Por
Slide 40: ESG. Milestones achieved
5. ESG. Milestones achieved We keep driving forward our ESG objectives and commitments 2025 target Institution (Progress as a sustainable institution) ▪ Female membership of management teams increased to 33.9% 32% 33.9% 33% 29% 30% ▪ 100% of electric power from renewable sources 2021 2022 2023 2024
Slide 41: Decarbonisation: targets for 2030
5. Decarbonisation: targets for 2030 in 11 carbon-intensive industries and in UK residential mortgage portfolio The Institution has set targets for 2030 for 11 CO2 -intensive sectors, based on the objectives set out in the Paris Agreement, and continues to embrace key climate commitments such as the
Slide 42: TSB asset quality, solvency and liquidity position
6. TSB asset quality, solvency and liquidity position Asset quality TSB core mortgage portfolio overview % Dec-23 Sep-24 Dec-24 2%5% Mortgages NPL ratio 1.5% 1.5% 1.5% 84% 9% >90% Coverage ratio 42% 37% 34% total loan (YtD) book Cost of risk1 0.19% 0.13% 0.08% £33.4bn Residential repayment Solvency
Slide 43: RWAs breakdown
7. RWAs breakdown Dec-24 RWAs By type: By geography: €80,559M Credit risk Spain €69.7bn €62.7bn Market risk €0.7bn UK €14.2bn Operational risk €10.1bn Mexico Others €3.7bn €0.1bn 43
Slide 44: Ample MDA buffer of 406bps
8. Ample MDA buffer of 406bps Group capital requirements Group capital position Pillar 1 CET1 4.50% Leverage MDA buffer Pillar 2 CET1 ratio Requirement (P2R) 1.27%1 406bps 5.2% Capital Conservation Buffer 2.50% Countercyclical Buffer 0.44% Other Systemically Important Institutions 0.25% CET1 8.95% 1
Slide 45: Glossary
Glossary AuM Assets under Management NPA Non-Performing Asset CET1 Common Equity Tier 1 NPL Non-Performing Loan CoR Cost of Risk NSFR Net Stable Funding Ratio: medium-term liquidity ratio CRR2 and CRR3 Capital Requirements Regulation 2 and 3 NZBA Net-Zero Banking Alliance HQLA High Quality Liquid As
Slide 46: Disclaimer
Disclaimer This presentation (the "Presentation") has been prepared and is issued by, Sabadell Group past and future reports and documents, including those they may not be comparable. Please refer to the quarterly financial Report and is the sole responsibility of, Banco de Sabadell, S.A. ("Banco Sa
Slide 47: ©Sabadell
©Sabadell
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