Banco Sabadell Group

Transcription

1 Banco Sabadell Group FinancialBu lletin Fou rth Qu arter of2002

2 The Banco Sabadell Group reported attributable net profits of million euros, 1.8 % up on 2001, in a year marked by intense business activity and heavy investment in technology Barcelona,Jan u ary The financial year 2002 has been influenced, on one hand, by a general atmosphere of uncertainty, unfavourable to banking activities, characterised by the great instability in the financial markets and on the other by the efforts and the investments made in order to situate the Banco Sabadell Group in a more competitive position and to lighten future financial burdens. Against this backdrop, the Banco Sabadell Group closed the year 2002 with a consolidated balance sheet of 27, million euros, 2.5 % more than the previous year and thus progressed towards fulfilling its double objective of consolidation and fixed growth for the years 2002 and At December , the consolidated profit and loss account of the Group produced a total net profit of million euros, 2.3 % more than in Once profits had been paid to minority shareholders the net attributed profits stood at million euros, 1.8 up on last year. Mortgage loans up by 25 % Up till December 31, total gross lending to customers had risen 13.3 % and totalled 21,382 million euros. In investments, mortgage loans were a particularly strong growth area, totalling 1, million euros, an increase of 25.1 % compared with the previous year. Financing to developers was up 33 % compared to 2001 and reached more than 959 million euros. At December , deposits and funds under management stood at 27, million euros, 7 % more than a year ago. On balance-sheet customer assets totalled 20, million euros, an increase of 6.1 %. This year saw a rapid growth in insurance banking products which increased pushed up insurance business by 20.4%. As for pension plans and funds, despite suffering the negative effects of the financial market performance, their year on year increase was 12.9%. Net fees and commissions rise 285 million euros, with a significant increase in banking service fees The continuing downward trend in interest rates influenced the percentage rise in the net interest income which at the year s close stood at million euros, 1.6 % higher than Income from basic operations also grew at a similar rate thanks to the favourable performance of net fees and commissions which increased to million euros, 1.6 % more than last year. This was in spite of the drop in income from investment and pension fund management due to transfers to other investment alternatives. Under this heading the biggest increase was in service commissions which totalled million euros, up 8.4 % on the figure for Page1

3 The poor performance of equity markets when compared with the same period last year influenced income from financial operations which fell to 85 %, and gross operating income stood at 1, million euros, 3.1 % less than last year. The special effort that was made throughout the year to place the the Banco Sabadell Group in a more competitive position led to an increase in operating costs. All in all, these costs rose 20.4 %, resulting largely from the million euros required to cover the expenses in technology and in the development and implementation of the new IT systems platform, a strategic plan which during 2002, reached the strongest investment phase. This impacted on the net operating income which at the close of the year stood at 292 million euros, 32.6 % lower than last year. A sounder balance sheet: provisions rise 37.8 % and the 56.4 million euros saved in taxes are allocated to amortizations and write-downs of assets The contribution by Group companies, which consolidate by the equity method continued its upward trend in 2002, and all increased their contributions to the profits by 30.4%, a total of million euros, thanks in great part to performance of the insurance companies and the real estate group. Once extraordinary amortizations made throughout the year to the goodwill fund on consolidation, which totalled 127,11 million euros had been taken into account and other profits and extraordinary results and provisions had been carried out ( 37.8 % more then in 2001), the pre-tax gross profit stood at million euros, 28 % less than the previous year. A total of 56.4 million euros derived from tax savings obtained through the new tax regulations for the reinvestment of capital gains and the externalisation of pension funds was allocated to cover extraordinary expenses. The policy of strict management applied to credit risk enabled the loan loss ratio to remain stable and at December , stood at 0.47% thus maintaining one of the lowest ratios in Spanish banking. Provisions for bad debts amounted to % or % if mortgage guarantees are taken into account. Rises in contributions to the consolidated results from the Group companies At the end of the year, operations from trade investments, development and financing capital, totalled more than 1,070 million euros in assets, 36 % up on During 2002 the Group, through its specialised subsidiary company Landscape, invested a total amount of million euros, in rented property and in development land for industrial, residential and promotional purposes. This represented an increase of % in comparison with last year. Landscape has acquired, among other purchases, land in the Renfe-Meridiana area for the construction of a 24,000 m 2 office block intended for renting, 65,000 m 2 of residential land in Zaragoza and 373,000 m 2 of industrial land in Sant Feliu de Llobregat and Polinyà, The company is involved in promotional developments in Barcelona, Cornellà de Llobregat and Carabanchel (Madrid). Page2

4 The capital development business, which the Group operates though the companies Bidsa and Aurica XXI, also performed favourably during 2002 and invested over 100 million euros, with an increase of 108%, compared to the previous year. During 2002, they took participating interests in companies such as the Grupo Derivados Forestales, Astral- Aquaria, Grafos Artes Gráficas and Minicentrales Hidroeléctricas. ISO 9001/2000 certificate in Leasing and Customer Care Service During the year, the Banco Sabadell Group obtained the ISO 9001/2000 certificate for the administration and processing of Leasing operations and for the management of complaints and claims by the Customer Care Service. Both these areas had been chosen as objectives for improvement in the pilot stages of the quality plan. Banco Sabadell share price, better than the Ibex 35 Banco Sabadell shares performed better than the market. For almost the whole year, the share price remained higher than the price for last year. At the close of the year, the Spanish Stock Exchange index, Ibex 35, had registered a drop of %, in comparison with the close of the previous year, whereas the price of the Banco Sabadell shares had only fallen 7.38 %. At the close of 2002, the Banco Sabadell shares were being quoted at euros, which amounts to a market capitalization of 2,815 million euros. Quarterly profit attributable to the Group (thousands of euros) MAR. JUN. SEP. DEC Page3

5 Financial highlights Variation Absolute Relative (%) Items (thousands of euros ): Shareholders' equity ,0 Total assets ,5 Gross loans and advances to customers ,3 Deposits and issued securities on the balance sheet ,1 Of which: customer deposits ,5 Assets held in investment funds ,1 Assets held in pension funds ,9 Deposits and funds under managment ,0 Profit and loss account (thousands of euros ): Net interest income ,6 Income from basic operations ,6 Gross operating income ,1 Net operating income ,6 Profit before tax ,0 Profit attributable to the Group ,8 Ratios Efficiency and cost/income ratios (%): ROA (net profit / average total assets) 0,86 0,93 ROE (net profit attributable to the Group / average shareholders' profit) 10,02 9,59 ROE adjusted (BCP and Banco Herrero goodwill effect) 13,56 15,51 Basic efficiency (total expenses / income from basic operations) 66,75 56,34 Cost / income 71,03 58,34 (total operations & other op. results / gross op. income) Capital ratios (BIS standards) (%): Total 11,85 11,46 TIER I 8,16 8,72 Risk management: Bad and doubtful debts (thousands of euros ) ,6 Provisions for bad and doubtful debts (thousands of euros ) ,1 Bad and doubtful debts / total lending (%) 0,47 0,46 0,01 Provisions / bad and doubtful debts (%) 351,07 334,94 16,14 Provisions / bad and doubful debts (w/ mortgage guarantees) (% 373,71 359,19 14,52 Resources: Branches ,3 Employees ,9 Shares: Number of shares ,0 Number of shareholders ,2 Page4

6 Consolidated balance sheet Relative (thousands of euros) variation (%) Assets Cash and deposits with central banks ,4 Government securities ,4 Financial institutions ,5 Loans and advances to customers ,6 Bonds and other fixed income securities ,5 Shares and other variable income securities ,6 Equity investment ,3 Equity investment in Group companies ,1 Intangible assets ,7 Goodwill on consolidation ,7 Tangible assets ,5 Treasury shares ,6 Other assets ,9 Accrued income ,8 Losses of Group companies ,3 Total ,5 Liabilities Financial institutions ,7 Customer deposits ,5 Liabilities on negotiable securities ,6 Other liabilities ,4 Accrued expenses ,6 Provisions for liabilities and charges ,9 General reserve ,5 Negative difference on consolidation ,0 Profits for the year (consolidation) ,3 Subordinated liabilities ,7 Minority interests ,8 Issued capital ,0 Share premium account ,9 Reserves ,3 Revaluation reserves ,0 Reserves on consolidated companies ,9 Total ,5 Memorandum accounts Contingent liabilities ,0 Commitments ,0 Total ,9 Page5

7 Loans and advances to customers Relative (thousands of euros) variation (%) Loans to public bodies ,4 Commercial loans ,0 Loans with mortgage guarantees ,3 Personal loans ,4 Loans and credit accounts ,8 Other secured loans ,8 Overdrafts and other sundry debit accounts ,2 Temporary asset purchase ,2 Leasing ,5 Factoring ,2 Loans to resident sector ,4 Commercial loans ,1 Loans with mortgage guarantees ,2 Personal loans ,6 Loans and credit accounts ,2 Other secured loans ,8 Overdrafts and other sundry debit accounts ,7 Leasing ,9 Factoring ,8 Loans to non-resident sector ,3 Doubtful assets ,3 TOTAL GROSS LOANS & ADVANCES TO CUSTOMERS ,7 Provisions for bad and doubtful debts ,6 TOTAL NET LOANS & ADVANCES TO CUSTOMERS ,6 Temporary asset purchase and others ,2 Securitised assets ,5 Provisions for bad and doubtful debts ,6 GROSS LOANS AND ADVANCES TO CUSTOMERS ,3 In absolute terms, we should highlight the growth in mortgage loans to the resident sector, with a year-on-year rise of 1, million euros, representing 20.3%. It is also worth pointing out the growth in credit accounts in the resident sector, which have increased in absolute value by 17.8% or million euros. Securitised assets also increased (110.5%), due to the securitisation carried out in June 2002 for a value of 600 million euros. Page6

8 Loans to resident sector at Loans to resident sector at Personal loans and other credits 32% Leasing 9% Overdrafts and other sundry debit accounts 2% Mortgage loans 42% Personal loans and other credits 32% Leasing 9% Overdrafts and other sundry debit accounts 3% Mortgage loans 41% Factoring 2% Commercial loans 12% Temporary asset purchase 1% Factoring 2% Commercial loans 12% Temporary asset purchase 1% Total net lending to customers (millions of euros) % / M % / J % / S % / S % / D Dec Mar Jun Sep Dec Page7

9 Bad debts and provisions Variation (thousands of euros) Absolute Relative (%) Bad and doubtful debts: Balance as at (January 1st) ,6 Increase due to new loan defaults ,9 Recoveries ,4 Amounts written off ,2 TOTAL BAD AND DOUBTFUL DEBTS ,6 Total gross loans and advances to customers ,7 Contingent liabilities ,0 TOTAL RISK ,4 BAD AND DOUBTFUL DEBTS / TOTAL LENDING (%) 0,47 0,46 0,01 Provisions for specific coverage of b&d debts ,7 Provisions for general coverage of b&d debts ,2 Provisions for statistical coverage of b&d debts ,4 TOTAL PROVISIONS FOR BAD & DOUBTFUL DEBT ,1 PROVISIONS / BAD & DOUBTFUL DEBTS (%) 351,07 334,94 16,14 PROVISIONS / BAD & DOUBTFUL DEBTS (%) 373,71 359,19 14,52 (with mortgage guarantees) The bad debt ratio (0.47%) continues to reflect the results of rigorous controls imposed on risk management, keeping it practically at the same level (0.46%) as the previous tax year. This ratio still holds a highly favourable position with respect to levels in the rest of the banking system. The ratios for provisions for bad debt at 31st December 2002 were higher than those at the close of the previous tax year, both with the mortgage guarantees taken into account and without. 0, ,58 0,56 0, , ,52 0, ,48 0, ,46 0,44 0,42 0, ,40 Dec Dec Dec Dec Dec Dec Provisions Provisions with mortgage guarantees Page8

10 Deposits and issued securities on the balance sheet Relative (thousands of euros) variation (%) Creditors, public bodies ,6 Current accounts ,7 Savings accounts ,0 Fixed-term deposits ,6 Temporary asset sales ,5 Resident sector creditors ,1 Current accounts ,4 Savings accounts ,9 Fixed-term deposits ,1 Temporary asset sales ,1 Non-resident sector creditors ,4 Debt securities and other negot. instruments ,6 Subordinated liabilities ,7 TOTAL DEP. & ISSUED SEC. ON B. SHEET ,1 Of which: customer deposits ,5 As of 31st December 2002, total deposits and funds under management stood at 20, million euros, a year-on-year increase of 6.1%. The three issues of bonds and credit notes during 2002 have led to an increase of million euros in the balance of the item of debt securities and other negotiable instruments, which in terms of percentage points represents 26.6%. The increase in subordinated liabilities should also be noted, this being due to an issue of 300 million euros carried out during the last quarter of Customer deposits (deposits on the balance sheet minus temporary asset sales) saw a yearon-year increase of 7.5%, standing at 19, million euros as of 31st December Resident sector sources at Temporary asset sales 11% Current accounts 39% Resident sector sources at Temporary asset sales 13% Current accounts 39% Fixed-term deposits 42% Savings accounts 8% Fixed-term deposits 40% Savings accounts 8% Page9

11 Deposits and funds under management Relative (thousands of euros) variation (%) Total deposits and issued sec. on balance sheet ,1 Investment funds ,1 Pension funds ,9 Insurance (actuarial reserves) ,4 Other assets ,8 Consolidation adjustments ,7 TOTAL DEP. & FUNDS UNDER MANAGEMENT ,0 The year-on-year increase in total deposits and funds under management was 7.0%, which saw the volume increase to 27, million euros by 31st December 2002 In spite of the increase in fixed income and guaranteed investment funds, this has not managed to compensate the reduction in assets in variable income and mixed investment funds, hit by the unfavourable evolution of the stock exchanges. However, we should highlight the significant growth in insurance products, standing at 20.4%, with the Horizonte Patrimonio product being particularly outstanding, Deposits and funds under management (millions of euros) % / S % / D % / M % / J % / S Dec Mar Jun Sep Dec Page10

12 Yield and costs (thousands of euros) Volume Rate % Profits Volume Rate % Profits Cash and deposits with central banks , , Financial institutions , , Loans and advances to customers , , Fixed income and government bonds , , Variable income securities , , Tangible and intangible assets Other assets TOTAL INVESTMENT , , Financial institutions , , Customer deposits , , Temp. assignment of assets and others , , Other liabilities Special reserves Shareholders' equity TOTAL RESOURCES , , Differential 2,67 2,89 Page11

13 Consolidated profit and loss account Variation (thousands of euros) Absolute Relative % Interest income ,5 Interest charges ,9 NET INTEREST INCOME ,6 Net fees and commissions ,6 from risk operations ,7 from services ,4 from investment and pension funds ,8 INCOME FROM BASIC OPERATIONS ,6 Dealing profits ,7 GROSS OPERATING INCOME ,1 Other operating income ,4 General administrative expenses ,4 Staff expenses ,4 General expenses and taxes ,5 Depreciation and ammortisation ,0 Other operating costs ,1 NET OPERATING INCOME ,6 Income from equity-accounted undertakings ,4 Amortization of goodwill on consolidation ,5 Profits on Group transactions Loan write-offs and provisions for bad & doubtful debts ,8 Write-downs of financial fixed assets (net) Non-operating profits (net) PROFIT BEFORE TAX ,0 Corporation tax ,6 CONSOLIDATED NET PROFIT ,3 Minority shareholders' interests ,8 NET PROFIT ATTRIBUTABLE TO THE GROUP ,8 The Banco Sabadell Group's net attributable profits at 31st December 2002 reached the figure of million euros, a year-on-year increase of 2.3%. After distributing the minority shareholders' interests, profit attributable to the Group stood at million euros, 1.8% higher than the previous year. Commercial activity has been carried out within a framework of falling interest rates, affecting the net interest income, which ended the year at million euros, a year-onyear increase of 1.6%. Net fees and commissions have also grown at the same rate of 1.6% overall, although different types of fees reflected very different rates. Both those deriving from risk operations and those from services saw year-on-year increases of 4.7% and 8.4%, while investment fund fees continue to be affected by the unfavourable evolution of the stock market. All in all, income from basic operations saw a year-on-year increase of 1.6%. Similarly, market instability also had an effect on dealing profits, the reason behind gross operating income falling by 84.7%. Gross operating income therefore fell 3.1% compared to the previous year, standing at 1, million euros. Overall, administration costs have risen by 20.4%. However, this increase is largely due to the great effort carried out in order to ensure the Banco Sabadell Group's competitive Page12

14 position in terms of technology. Expenditure on technology and the development and implementation of the new IT and communication platform has therefore peaked in 2002, with the consequent effects on net operating income. The addition to the profit and loss account provided by equity-accounted undertakings, on the other hand, amounted to million euros in 2002, 30.4% more than the year before, particularly of note being the profits from insurance and real estate companies. The reduction shown in tax is due to the application of new tax legislation concerning capital gains re-investment, as well as the favourable tax repercussions resulting from the externalisation of the employee pension funds. Shares in Banco Sabadell Shareholders and trading euros Shareholders (number) Outstanding shares (number) Average daily trading volume (number of shares) Average daily trading volume (thousands of euros) 869 Total annual trading volume (number of shares) Total annual trading volume (thousands of euros) Liquidity rate (total annual trading / outstanding shares) 7,12% Quotations Reference share price ( ) (points) 14,90 Maximum share price ( ) (points) 16,87 Minimum share price ( ) (points) 12,96 Latest quotation ( ) (points) 13,80 Valuation -7,38% Stock exchange capitalisation (thousands of euros) Ibex 35 ( ) (points) 8.397,60 Ibex 35 ( ) (points) 6.036,90 Valuation -28,11% Banking sector index ( ) (points) 1.204,86 Banking sector index ( ) (points) 915,86 Valuation -23,99% Stock exchange ratios Share book value 10,11 Profits attributable to the Group per share 1,08 PER 2002 (price / EPS) 12,77 The fall in the price of Banco Sabadell shares with respect to the start of the year (-7.38%) has been much less pronounced than that experienced by the market as a whole over the same period. As a point of reference, the IBEX 35 index and the banking sector have experienced falls of % and % respectively. Page13

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