Sabadell more than doubled its net profit in the quarter to 149
million euros ($173 million) from the same period a year ago
thanks also to a rise in lending income, buoyed by new mortgage
loans in Spain.
Analysts polled by Reuters expected a net profit of 115 million
euros. However, the outcome was below the 251 million euros in
the third quarter of 2019, before the pandemic.
Sabadell's 1.7 billion pounds ($2.3 billion) acquisition of TSB
in 2015 backfired when IT glitches sent costs spiralling in
2018. It has for now frozen its plans to sell TSB until it
completely turns around its business.
"We are not considering any corporate transaction in the near
future," Sabadell's Chief Executive Officer Cesar Gonzalez-Bueno
told analysts on Thursday.
On a standalone basis, TSB booked a 47 million pounds net profit
in the quarter, compared to a loss of 76 million pounds in the
same period last year, driven by higher lending volumes and
lower funding costs.
Gonzalez-Bueno expected an increase in loans to boost TSB's
lending further through 2022 after net interest income (earnings
from loans minus deposit costs) rose 20.7% year on year in the
quarter.
Sabadell shares were 0.7% up, compared to a 0.2% decline in
Spain's blue-chip index, as brokerages such as Barclays welcomed
a good set of results, though highlighted that costs came in
higher than expected.
COST SAVINGS
Facing ultra-low interest rates, European banks are under
pressure to cut costs, either on their own or through tie-ups.
In the quarter, Sabadell booked a charge of 331 million euros as
part of its process to lay off up to 1,605 employees in Spain,
which it now expects to generate annual cost savings of 130
million euros, up from 100 million originally, including other
cost measures.
Around 85% of those savings would be achieved in 2022, and the
rest in 2023.
Sabadell also said it was on track to meet its overall strategic
plan targets for the year-end, which foresees low single-digit
growth in net interest income.
Net interest income rose 4.3% in the third quarter from the same
quarter a year ago to 877 million euros, above analysts' average
forecast of 856 million.
($1 = 0.7277 pounds)
($1 = 0.8630 euros)
(Reporting by Jesús Aguado; additional reporting by Emma
PinedoEditing by Inti Landauro and Mark Potter)
[© 2021 Thomson Reuters. All rights
reserved.] Copyright 2021 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|