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HomeLatest NewsThe 1,000 million profit (again) is within reach for Banco Sabadell |...

The 1,000 million profit (again) is within reach for Banco Sabadell | Opinion Cristina Triana

Date: March 29, 2024 Time: 18:02:16

The next few months are going to be key to see if the curse of the level of 1,000 million euros in profits has been inactivated at Banco Sabadell. This figure is symbolic for the firm led by César González-Bueno because it became the great pending objective of the 2014-2016 strategic plan – the period in which TSB was acquired for 2,300 million – and that has always resisted since then. , whether due to one setback or another.

Now, nine years after that announcement, after a Brexit, cost overruns due to the migration problems suffered in the integration of the British, a Numantine defense of capital with business reorganization and divestments, a pandemic, an unsuccessful merger with BBVA of and a change cúpula…, that level appears again on the horizon, although in a more timid way, without commitments of round figures, but leaving the market to carry out its calculations, which is what is customary at this time.

In recent years, the bank has been taming investors to provide them with more open financial objectives -most choose to advance a ‘mix’, which includes capital ranges, margin evolution, shareholder remuneration and profitability, with the bilique entities give themselves flexibility and avoid absolute ‘profit warning’, easy to remember. Bankinter is an exception.

In Sabadell, the return to the fight for the 1,000 million in benefits is deduced from the advanced profitability objectives for 2023. It hopes to achieve a ROTE above 9% and if it did not have to pay the extraordinary Government tax for the sector, this profitability ratio would go above 10.5%. With the tangible capital figures with which they closed last year (ROTE was 7.8%), this guideline would translate into a profit of 991 million in the first case; and 1,156 million in the second for this year. So as soon as his own estimate improves (and with the permission of the curse of 1,000) in theory he has cards to crown the top this year that has resisted him for so long.

At the moment, according to the consensus data compiled by Bloomberg, only the most optimistic analysts would be discounting that it would cross that barrier over the next 11 months. By 2024, the maximum is higher and places the goal one step above; in the 1,100 million; It seems that they see more possibilities.

If Josep Oliu renews as president at the next meeting – he must be re-elected in 2023 – he will have time to tell shareholders that the objective has finally been achieved. The banker, who always dodges the question about when he leaves the bank, still has that outstanding account.

Banco Sabadell closes a circle after the catharsis of 2020

What cannot be denied to César González-Bueno is that with the 2022 results he has closed a circle, bringing the bank into line with its competitors in terms of strength. Beyond the reward on the stock market, the best symptom of this good health is the remuneration policy, in which it was lagging behind the average of Spanish banks due to its extra efforts in recent years to strengthen its capital, but with a ‘pay out’ of 50% and a share repurchase plan for 204 million shelves the crisis.

In terms of profit, the bank has just beaten its previous historical record, which it set in 2017, at 801.5 million; the year after the acquisition of TSB and in the last year in which it seemed feasible to conquer the barrier of 1,000 million. In 2022, it has earned 859 million and would have been close to reaching 900 million (884 specifically) if it had not been for the latest effects of the British crisis: a fine of 57 million for technological failures agreed with the United Kingdom.

Although González-Bueno is turning Sabadell’s results around, the figures that the bank achieved today would have been impossible without the reconstruction work and surely during the last years under the command of Jaime Guardadeiola and Tomás Varela, who delivered a Sabido watered a Sabido reconstitutes capital; one of the great ballasts that it had to drag after the TSB crisis in 2018, which left its annual profit at just 318 million.

This process allowed the new team to reset to start a new stage with the weakest point under control. The year in which the relief was announced -December 2020- was especially cathartic in the latter. Sabadell dodged losses in a testimonial way, with a result of only 2 million and strong provisions linked to the covid with which it was reinforced, bringing the capital to the level of 12.6%. From there, González-Bueno and Leopoldo Alvear have gone around the bank; from the 530 million in earnings of 2021, it has gone to the 859 million presented last Thursday; jumping, similarly, from just over 30 to 50% pay-out.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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