Banco Sabadell Group. Financial bulletin Third quarter of Quarterly Financial Bulletin from Banco Sabadell Group

Transcription

1 Banco Sabadell Group Financial bulletin Third quarter of 2001 Number 6 Third quarter of 2001 Page 1

2 Introduction At the end of the third quarter of this year, attributable consolidated profits for the Banco Sabadell Group amounted to million euros (27,043 million pesetas), 12.5% more than at September 30 of last year. At September 30, 2001, the consolidated balance sheet for the Group totalled 25, million euros (4,180,000 million pesetas), with a year-on-year increase of 35.1 %. Total net lending to customers increased by 44.0 % to 18,075 million euros (3,060,000 million pesetas) with customer deposits rising to 18,692 million euros (3,110,000 million pesetas) up by 32.8 %. This figure rises to 24,663 million euros (4,100,000 million pesetas) if the total volume of assets under management, including such off-balance sheet items as investment funds and pensions, is taken into account. Margins and profits Net interest income at the end of the third quarter stood at million euros (85,638 million pesetas), an accumulated increase of 42.0%. Income from basic operations, which includes net fee and commission income and reflects the Group s performance in its core commercial activities, improved by 32.4% and reached million euros (120,310 million pesetas). This was largely due to the satisfactory performance of incomes from recurrent banking activities and services which increased by 13.3 %. Profits on financial operations rose to million euros (5,390 million pesetas) up 3.5%, in comparison with the same period of the previous year. In consequence, gross operating income, as of September 30, stood at million euros (125,690 million pesetas), with a year-on-year increase of 30,8 %. The significant increase in income from other products contributed to a growth in profits on transactions (net operating income), which rose to million euros (51,573 million pesetas), up by 31.3 %, The income for this quarter from the equity accounted consolidated companies rose by 40.2 %. In spite of the quality of customer lending and the favourable performance of bad and doubtful debts, the traditional Group policy of caution and stringency continued to be applied in risk management and in the allocation of provisions, thus contributing to the strength of the balance sheet. In this regard, provisions made in respect of doubtful assets rose % and included the allocation of million euros (8,567 million pesetas) to the new Statistics Insolvency Fund as required by the Bank of Spain which, at September 30, had increased to % if compared with the same quarter last year. The total income from Group transactions and the non operating profits, after deducting amortizations, bad debt write offs, provisions and taxes and profits attributable to minority Number 6 Third quarter of 2001 Page 2

3 shareholders interests, showed a growth in the net Group profits of 12.5% more than at September 30 of the year As a result, from November 2 onwards, an interim dividend payment for the financial year 2001 will be made to the value of 0.24 euros (40 pesetas per share), which is 20% more than last year. At September 30, the PER of the BS share was Other highlights In relation to the third quarter of last year, the Group s operating cost/basic income ratio showed an improvement of 0.74%, reaching %. During the third quarter, share quality remained practically at the same level as a year ago and loan loss ratio (bad and doubtful debts over total risk) fell slightly: 0.55 % with respect to 0.59 % of September of the previous year. The loan loss reserve ratio rose above the 300 % mark and now stands at %, or % if mortgage securities are taken into account. Quarterly profit attributable to the Group (in thousands of euros) MARCH JUNE SEPT. DEC. Number 6 Third quarter of 2001 Page 3

4 Financial highlights Financial Highlights (in millions): Variation 30/9/01 30/9/01 30/9/00 Absolute Relative pesetas euros euros euros % Shareholders' equity , ,74 723,21 47,3 Total assets , , ,53 34,0 Net lending to clients , , ,74 44,0 Deposits and issued securities (on balance sheet) , , ,34 32,8 Of which: customer deposits , , ,88 37,9 Assets held in investment funds , ,28 339,98 7,8 Assets held in pension funds , ,66 81,42 7,0 Deposits and funds under management , , ,38 27,1 Profit and Loss Account (in millions): Net interest income ,71 362,46 152,25 42,0 Income from basic operations ,01 546,25 176,76 32,4 Gross operating income ,42 577,55 177,87 30,8 Net operating income ,96 236,09 73,87 31,3 Profit before tax ,20 249,10 12,11 4,9 Profit attributable to Group ,53 144,44 18,09 12,5 Ratios Efficiency and cost/income ratios (%): ROA (net profit/average total assets) 0,93 1,22 ROA (net profit attributable to the Group/average shareholder's equity) 9,58 14,47 ROE adjusted (BCP and "la Caixa" goodwill effect) 15,50 17,07 Basic efficiency (total expenses/income from basic operations) 56,24 57,68 Cost/income (total and other operating costs/gross operating income) 58,97 59,12 BIS capital ratios (%): Total 11,49 11,16 TIER I capital 8,58 9,86 Risk management: Bad and doubtful debts (in millions) ,48 84,94 28,54 33,6 Provisions for bad and doubtful debts (in millions) ,03 221,19 122,84 55,5 Bad and doubtful debts/total lending ( %) 0,55 0,59-0,04 Provisions /bad and doubtful debts (%) 303,17 260,42 42,75 Provisions/bad and doubtful debts (incl. mortgages) (%) 322,24 285,40 36,84 Resources: Branches ,4 Employees ,1 Shares: Number of shares (*) ,3 Number of shareholders ,8 (*) Number of shares at 30 September 2000, adjusted on the basis of the 6:1 split carried out on 20 December All the figures in this financial report include the figures from the Herrero Group, which merged with the Banco Sabadell Group on 1 January Number 6 Third quarter of 2001 Page 4

5 Consolidated balance sheet 30/9/01 30/9/01 30/9/00 In millions pesetas euros euros % change Assets: Cash and deposits with central banks ,21 243,58 20,8 Government securities ,59 382,36 5,6 Financial institutions , ,95-2,9 Loans and advances to clients , ,22 44,8 Bonds and other fixed-income securities ,65 635,27 21,5 Shares and other variable-income securities ,36 254,77-13,9 Equity investment ,38 154,08-1,1 Equity investment in Group companies ,86 53,79 195,3 Intangible assets ,78 13,94 214,1 Goodwill on consolidation ,62 298,36 126,4 Tangible assets ,15 346,88 24,9 Treasury shares ,28 0,00 *** Other assets ,73 561,23 28,6 Accrued income ,74 140,26 30,3 Losses of Group companies ,50 39,36 94,4 Total , ,05 34,0 Liabilities: Financial institutions , ,57 37,3 Customer deposits , ,60 34,6 Liabilities on negotiable securities , ,96 5,0 Other liabilities ,88 611,22 26,8 Accrued income ,42 279,93 20,9 Provisions for liabilities and charges ,84 127,37 110,3 General reserve ,41 126,17 2,6 Negative difference on consolidation 507 3,05 2,80 8,9 Profits for the year (consolidated) ,12 152,40 9,0 Subordinated liabilities ,21 0,00 *** Minority interests ,17 301,93 15,6 Issued capital ,00 74,32 37,2 Share premium account ,70 471,62 136,8 Reserves ,71 822,50 11,2 Revaluation reserves ,90 34,90 0,0 Reserves on Group companies ,42 165,76 1,6 Total , ,05 34,0 Memorandum accounts: Contingent liabilities , ,18 31,3 Commitments , ,25 37,5 Total , ,43 35,6 The assets on the consolidated balance sheet on 30 September were 34.0% higher than the same period last year, reaching 25, million euros (4,185,204 million pesetas). The items which have contributed most to the increase on the balance sheet are Customer Loans and Deposits, which constitute a commercial bank's most typical business. Number 6 Third quarter of 2001 Page 5

6 Loans and advances to customers 30/9/01 30/9/01 30/9/00 In millions pesetas euros euros % change Loans to public bodies ,11 36,02 491,7 Commercial loans , ,57 16,3 Mortgage loans , ,13 66,4 Personal loans , ,57 42,8 Loan and Credit accounts , ,15 29,2 Other secured loans ,90 89,24 50,0 Overdrafts and sundry debit accounts ,96 447,24 31,5 Leasing , ,95 16,5 Factoring ,26 125,49 173,5 Loans to resident sector , ,34 42,9 Loans to non-resident sector ,66 774,09 58,9 Doubtful assets ,30 74,35 36,2 TOTAL GROSS LOANS AND ADVANCES TO CUSTOMERS , ,80 45,2 Provisions for bad and doubtful debts ,19 179,58 68,3 TOTAL NET LOANS AND ADVANCES TO CUSTOMERS , ,22 44,8 Securitised mortgages ,58 364,85 15,0 TOTAL NET LENDING TO CUSTOMERS , ,07 44,0 Year-on-year growth from net client loans over this last quarter account for 44.0%. There was a large increase in the number of mortgage loans, both as absolute and relative values (2, million euros, 66.4%) and the increase in factoring operations (173.5%) and loans to the non-resident sector (58.9%). Personal loans and others 32% Loans to resident sector on 30/9/2001 Leasing 9% Overdrafts and sundry debit accounts 4% Mortgage loans 41% Personal loans and others 34% Loans to resident sector on 30/9/2000 Leasing 11% Overdrafts and sundry debit accounts 4% Mortgage loans 35% Factoring 2% Commercial loans 12% Factoring 1% Commercial loans 15% Number 6 Third quarter of 2001 Page 6

7 Net lending to customers (in millions of euros) ,2% s/ D-00 +7,7% s/ M-01 +3,7% s/ J ,6% s/ J-00 +4,7% s/ S Sept Dec March 2001 June 2001 Sept Number 6 Third quarter of 2001 Page 7

8 Risk management Variation 30/9/01 30/9/01 30/9/00 Absolute Relative In millions pesetas euros euros euros % Bad and doubtful debts: Opening balance (1 January) ,35 105,71-21,36-20,2 Increase due to new loan defaults ,44 59,76 45,68 76,4 Recoveries ,56-60,02 7,46 12,4 Amounts written off ,75-20,51-3,24-15,8 TOTAL BAD AND DOUBTFUL DEBTS ,48 84,94 28,54 33,6 Total gross loans and advances to customers , , ,62 45,2 Contingent liabilities , ,18 632,05 31,3 Total bad and doubtful debts ,48 84,94 28,54 33,6 BAD AND DOUBTFUL DEBTS AS % OF TOTAL LENDING 0,55 0,59-0,04 Provisions for specific coverage for bad ,81 52,39 7,42 14,2 and doubtful debts Provisions for general coverage for bad ,29 132,21 44,08 33,3 and doubtful debts Provisions for statistical insolvency fund ,36 11,19 69,17 *** TOTAL COVERAGE REQUIRED ,46 195,79 120,67 61,6 Other additional coverage ,57 25,40 2,17 8,5 TOTAL PROVISION FOR BAD & DOUBT. DEBTS ,03 221,19 122,84 55,5 PROVISIONS /BAD AND DOUBTFUL DEBTS (%) 303,17 260,42 42,75 PROVISIONS /BAD AND DOUBTFUL DEBTS (%) 322,24 285,40 36,84 (including mortgage guarantees) The ratio of bad and doubtful debt (which measures the percentage of bad debt risk over loan investment) fell with regard to the previous year, and is now 0.55%. The current balance for loan loss provisions stands at million euros (52,655 million pestas), 61.6% higher than in September of the previous year. The ratio of cover for bad and doubtful debt has also improved in comparison to the previous year, reaching the figure of % (322.24% including mortgage guarantees). The statistical insolvency fund, for which provisions were initially made in July 2001 has had a marked influence on this increase. Number 6 Third quarter of 2001 Page 8

9 Bad and doubtful debts as % of total lending Total provisions as % of bad & doubtful debts 0, ,19 0, ,46 322,24 0,60 0,59 0,56 0,55 0,55 0,56 0,50 0,51 0,45 Sept Dec March 2001 June 2001 Sept ,40 260,42 298,02 279,86 303,18 281,38 Sept Dec March ,17 June 2001 Sept Provisions Provisions with mortgages Number 6 Third quarter of 2001 Page 9

10 Total on-balance sheet deposits and issued securities 30/9/01 30/9/01 30/9/00 In millions pesetas euros euros % change Creditors, public bodies ,64 96,11 19,3 Current accounts , ,63 27,4 Savings accounts ,65 698,73 74,1 Fixed-term deposits , ,54 51,4 Temporary asset sales , ,12 1,6 Creditors, resident sector , ,02 34,4 Creditors, non-resident sector , ,47 37,0 Debt securities and other negotiable instruments , ,96 5,0 Subordinated liabilities ,21 0,00 *** TOTAL ON-BALANCE SHEET DEP.S & ISSUED SEC.S , ,56 32,8 Of which: customer deposits , ,19 37,9 As of 30 September, the total client deposits on the balance sheet was 18, million euros (3,110,070 million pesetas). In terms of resource type, fixed-term deposits are those which saw the largest increase in volume, around 2, million (334,165 million pesetas), an increase of 51.4%. Resources for investment (resources on the balance sheet excluding temporarily assigned assets) increased over the year by 37.9%, reaching a figure of 16, million euros (2,782,152 million pesetas). Resident sector resources on 30/9/2001 Resident sector resources on 30/9/2000 Temporary asset sales 13% Current accounts 38% Temporary asset sales 18% Current accounts 40% Fixed-term deposits 41% Savings accounts 8% Fixed-term deposits 36% Savings accounts 6% Number 6 Third quarter of 2001 Page 10

11 Deposits and funds under management 30/9/01 30/9/01 30/9/00 In millions pesetas euros euros % change On-balance total customer deposits and funds , ,56 32,8 Investment funds , ,28 7,8 Pension funds , ,66 7,0 Insurance (actuarial reserves) , ,06 38,6 Other deposits ,03 737,72-8,5 Consolidated adjustments , ,10-7,9 TOTAL DEPOSITS & FUNDS UNDER MANAGE , ,18 27,1 The most important element not included on the balance sheet are investment funds, which witnessed a lower relative increase than that for the total client funds on the balance sheet. This is as a result of general market trends. Even so, the increase in the total volume of funds under management is 27.1%, with a volume of 24, million euros (4,103,505 million pesetas). Deposits and funds under management (in millions of euros) ,3% s/ D-00 +4,9% s/ M-01 +0,4% s/ J ,9% s/ J-00 +0,8% s/ S Sept Dec March 2001 June 2001 Sept Number 6 Third quarter of 2001 Page 11

12 Yield and costs 30/9/01 30/9/00 Volume Type Results Volume Type Results In millions pesetas euros pesetas euros euros euros Cash and deposits with central banks ,23 3, ,98 238,45 2,39 4,28 Financial institutions ,27 4, , ,07 5,95 118,77 Loans and advances to customers ,44 6, , ,46 6,23 526,67 Fixed income and government securities ,15 4, , ,54 4,03 33,90 Variable income securities ,67 1, ,41 361,71 2,19 5,94 Tangible and intangible assets , , Other assets , , TOTAL INVESTMENT ,62 5, , ,75 5,50 689,56 Financial institutions ,10 5, , ,36 6,06 118,83 Customer Deposits ,39 2, , ,07 2,26 156,44 Temporary asset sales and others ,42 4, , ,19 3,40 51,83 Other liabilities , , Special reserves , , Shareholders' equity , , TOTAL RESOURCES ,62 2, , ,75 2,61 327,10 Differential 2,89 2,89 The yield differential between investment and expenses has remained stable over the whole year, although following general market trends, both asset and liability rates have increased. Number 6 Third quarter of 2001 Page 12

13 Consolidated profit and loss Variation 30/9/01 30/9/01 30/9/00 Absolute Relative In millions pesetas Euros Euros Euros % Interest income ,90 689,56 338,34 49,1 Interest charges ,19 327,10 186,09 56,9 NET INTEREST INCOME ,71 362,46 152,25 42,0 Net fees and commissions ,30 183,79 24,51 13,3 Commission on risk operations ,36 53,39 6,97 13,1 Commission on services ,07 67,85 17,22 25,4 Commission on investment and pension funds ,87 62,55 0,33 0,5 INCOME FROM BASIC OPERATIONS ,01 546,25 176,76 32,4 Dealing profits ,41 31,30 1,11 3,5 GROSS OPERATING INCOME ,42 577,55 177,87 30,8 Other operating income ,26 3,20 3,06 95,4 General administrative expenses ,59 315,09 91,50 29,0 Staff expenses ,14 212,56 52,58 24,7 General expenses and taxes ,45 102,53 38,91 38,0 Depreciation and amortization ,78 24,30 12,48 51,3 Other operating costs ,35 5,27 3,08 58,4 NET OPERATING INCOME ,96 236,09 73,87 31,3 Income from equity-accounted undertakings ,49 23,89 9,60 40,3 Amortization of goodwill on consolidation ,04 12,17 13,87 114,0 Profits on Group transactions ,48 67,17-69,65-103,7 Loan write-offs and provisions for bad & doubtful debt ,05 36,13 47,91 132,6 Write-downs of financial fixed assets (net) 0 0,00-0,03 0,03 *** Non-operating results (net) ,32-29,78 60,10 201,8 PROFIT BEFORE TAX ,20 249,10 12,11 4,9 Corporation tax ,09 96,70-1,61-1,7 CONSOLIDATED NET PROFIT ,11 152,40 13,72 9,0 Profit attributable to minority shareholders 596 3,58 7,96-4,38-55,1 PROFIT ATTRIBUTABLE TO THE GROUP ,53 144,44 18,09 12,5 The profit attributable to the Group as of 30 September was million euros (27,043 million pesetas), 12.5% higher than the previous year. Net interest income has shown an accumulated increase of 42.0%. This increase is mainly attributable to the increase in business volume. Income from basic operations has grown by 32.4% with regard to last year. The accumulated increase in commission as of 30 September was 13.3%. Commission on services, with a growth of 25.4%, has compensated for the lower growth rate from Commission on investment and pension funds (+0.5). Net operating income reached million euros (51,574 million pesetas), representing year-on-year growth of 31.3%. The lower rate of growth of general administrative expenses (29.0%) has contributed to the excellent performance of this item, which has consequently improved the efficiency ratio. Number 6 Third quarter of 2001 Page 13

14 The consolidated subsidiaries and companies in which the Group holds equity have contributed as a result of equity-accounting to the high increase in profits, due in great part to Banco Comercial Português and Bansabadell Vida. The high growth in the amortization of goodwill on conolidation occurred as a result of the acquisition of the Herrero Group in 2001; specifically, million euros have been written of as of The comparative effect of the sale of equity in Banco Guipuzcoano and Hidrocantábrico during the first three quarters of 2000 is worth highlighting, since it produced earnings of million euros (11,176 million pesetas) which appear on the consolidated profit and loss account for 2000, under the "Group Operations Profit" item. Apart from the growth in investments, the increase in provisions for bad and doubtful debt this year is due to the new funds for statistical bad debt cover, which came into force in the third quarter of 2000; this means that nine months have been provided for over 2001, whereas last year, provisions were only made for three months. Number 6 Third quarter of 2001 Page 14

15 Shares 30/9/01 30/9/01 pesetas euros Shareholders and trading Shareholders (number) Outstanding shares (number) Average daily trading volume (number of shares) Average daily trading volume (millions) 451 2,71 Quotations Reference price (18/4/01) 2.994,95 18,00 Maximum quote (18/4/01) 3.434,21 20,64 Minimum quote ( ) 2.261,19 13,59 Latest quote ( ) 2.578,98 15,50 Valuation -13,89% Stock exchange capitalisation (millions) ,04 Ibex 35 (18/4/01) (points) 9.527,00 Ibex 35 (28/9/01) (points) 7.314,00 Valuation -23,23% Banking sector index (18/4/01) (points) 1.321,00 Banking sector index (28/9/01) (points) 1.048,00 Valuation -20,67% Stock exchange ratios Profits attributable to the Group per share( ) 191 1,15 PER 2001 (price / BPA ) (calculated on the basis of estimated profits by the analysts) 13,84 NOTE: All the figures corresponding to the prior period to the increase in capital have been adjusted to the new number of shares released during the increase. The slow-down in growth in the euro zone caused by less dynamic investment and export figures, together with the slower rhythm of growth in the US economy, has caused stockmarket indices to fall since the beginning of the year. This downward trend in the stock market and the events of 11 September in the United States have had a marked effect on this month. Banco Sabadell's shares have not bucked the general trend, but have maintained the comparative advantage gained in earlier months. Between 18 April, the initial listing date, and 30 September, Banco Sabadell's share price fell 13.89% whereas over the same period, the IBEX35 index fell by 23.23%, and the banking sector index by 20.67%. Number 6 Third quarter of 2001 Page 15

16 /4 21/4 25/4 29/4 3/5 7/5 11/5 15/5 19/5 23/5 27/5 31/5 4/6 8/6 12/6 16/6 20/6 24/6 28/6 2/7 6/7 10/7 14/7 18/7 22/7 26/7 30/7 3/8 7/8 11/8 15/8 19/8 23/8 27/8 31/8 4/9 8/9 12/9 16/9 20/9 24/9 28/9 BS Closure IBEX35 Closure Base 100: 17/04/01 Number 6 Third quarter of 2001 Page 16