Q2 2024 Banco de Sabadell SA Earnings Call Transcript
Key Points
- Banco de Sabadell SA (BNDSF) reported a significant increase in net profit, reaching EUR791 million in the first half of 2024, a 40% increase year-on-year.
- The bank's return on tangible equity (ROTE) improved to 13.1%, indicating strong profitability.
- Net interest income (NII) grew by 2.5% quarter-on-quarter and 9.8% year-on-year, driven by higher customer margins and increased loan volumes.
- The bank announced an increase in its payout ratio to 60% and approved the distribution of an interim dividend of EUR0.08 per share.
- Asset quality remains strong, with a 5% increase in non-performing assets (NPAs) and improved coverage ratios, contributing to a lower cost of risk.
- Despite the positive financial performance, the bank faces intense competition in the mortgage and SME lending markets, which could pressure margins.
- The cost of deposits in Spain increased by 1 basis point quarter-on-quarter, indicating potential future pressure on NII.
- TSB's contribution to the group's net profit was EUR95 million, half of its contribution in 2023, highlighting challenges in the UK market.
- The bank's fee income decreased by 1.4% quarter-on-quarter and 3.3% year-on-year, impacted by card costs and other factors.
- The bank's capital distribution plan, including the EUR2.9 billion target, is based on conservative estimates and may need adjustments depending on future financial performance and regulatory changes.
Good morning. Thank you for joining the Banco de Sabadell second quarter 2024 results audio webcast. Please be welcome. The presentation will be given by our César González-Bueno; and our CFO, Leopoldo Alvear. They will cover the main highlights and details of the commercial and financial performance in the second quarter of the year. The presentation will be followed by a Q&A session. We have a schedule around an hour and 15 minutes for the whole session. Let me now hand it over to our CEO, César González-Bueno.
Thank you, Gerardo Artiach. Good morning, everyone, and welcome to Sabadell's second quarter '24 results presentation. I would like to start by sharing our view on Banco Sabadell profile, its performance and its prospects. Sabadell is a simple, low risk and increasingly profitable bank with further value to be unlocked.
Why do we say that? First
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