Banco Sabadell Group

Transcription

1 Banco Sabadell Group Financial Bulletin Second quarter of 2001

2 Introduction At the close of the first quarter of the year, Banco Sabadell Group reported attributable net profits of million Euros (19,091 million Pesetas), which resulted in a percentage increase of 17.1% on the figure achieved for the same period in the previous year. From March to June, growth in the banking business remained at similar levels to that seen during the first quarter, which made it possible to continue increasing the basic or recurring business margins at a good rate. Margins and Profits The net interest income increased by 42.5%, to reach million Euros (56,094 million Pesetas) and the income from basic operations, obtained from ordinary commercial business, grew 32.5%, to million Euros (79,138 million Pesetas), for earnings due to fees and commissions received, which were 13.2% higher than the first half of the year Dealing profits increased 51.6% over the same period and the gross operating income was million Euros (84,899 million Pesetas), which was an increase of 33.6%. Progressive implementation of the new commercial organisation model by business segments and the task carried out by the network in customer capture and retention had a positive effect on growth of all earnings that show the commercial margins. This favourable development, together with strict control of general costs has enabled an increase in net operating income of 39.5%, an improvement once again of the operative efficiency ratio, which, on 30 June, was 51.91%. The contribution by the Group undertakings, which consolidate by the equity method, continued its upward trend, all increased their contributions to the profits by 52.9%, with a total of million Euros (3,232 million Pesetas). The quality of loans and advances to customers also continued to improve to levels never reached before. Once the half year was closed, bad and doubtful debts over total lending were 0.51%, which implied another reduction in this ratio if it is compared with the percentage recorded in the previous quarter. The provisions for possible bad or doubtful debts have been maintained at the levels of previous quarters and hence a coverage fund of % has been provided, which, if the mortgage guarantees are included, amounts to %. The provision made to the Statistical Insolvency Fund, as required by the Bank of Spain, which is accounted as Shareholders Equity, was million Euros (2,799 million Pesetas) in the second quarter of the year so that, the total contribution was million Euros (5,791 million Pesetas). Revenue accounted, minus costs and after corporate income tax, and profits having been paid to minority shareholders, net Group profit is million Euros (19,091 million Pesetas). Number 5 Second quarter of 2001 Page 1

3 Other highlights The balance of total net lending to customers, on 30 June, was 17, million Euros (2.90 billion Pesetas), an increase of 42.4%, compared to the same figure the year before. Deposits and funds under management increased 34.8%, to 24, million Euros (4.10 billion Pesetas), while total on-balance sheet deposits and issued securities also performed well, with an increase of 45.3% and a balance of 18, million Euros (3,042,448 million Pesetas). Assets held in investment funds grew 13.7%, compared to the same figure the year before, and reached 5, million Euros (854,180 million Pesetas) and assets held in pension funds increased to 1, million Euros (218,104 million Pesetas), an increase of 15.5%. Important events There were many events in the second quarter of the year. One event that particularly stands out, in terms of historical importance, is the Stock Exchange listing, on 18th April, and the free capital increase 1x6, which ended on 29 June. The development of new channels and new business areas linked to Internet technology, carried out together with important partners such as Banco Comercial Português and the multinational Siemens, was the focus of the Bank s activity. In this context, we should highlight the launch of the new, multi-channel bank ActivoBank, the portal or virtual space for companies, ManagerLand.com and the company e-xtendnow, e-business service provider for companies. Quarterly profit attributable to the Group (in thousand Euros) MARCH JUNE SEPT. DEC. Number 5 Second quarter of 2001 Page 2

4 Financial highlights Variation 30/6/01 30/6/01 30/6/00 Absolute Relative pesetas euros euros euros % Items (in milions): Shareholder's equity , ,36 718,68 46,4 Total assets , , ,14 40,8 Total net lending to customers , , ,99 42,4 Deposits and issued securities (on balance sheet) , , ,99 45,3 Of which: customer deposits , , ,76 46,6 Assets held in investment funds , ,73 617,00 13,7 Assets held in pension funds , ,67 176,16 15,5 Deposits and funds under management , , ,78 34,8 Profit and Loss Account (in millions) Net interest income ,13 236,67 100,46 42,5 Income from basic operations ,63 359,03 116,60 32,5 Gross operating income ,25 381,87 128,38 33,6 Net operating income ,82 157,62 62,20 39,5 Profit before tax ,41 165,87 17,54 10,6 Profit attributable to Group ,74 97,98 16,76 17,1 Ratios Efficiency and cost/income ratios (%): ROA (net profit/average total assets) 1,03 1,29 ROE (net profit attributable to the Group/average shareholder's equity) 10,15 15,49 ROE adjusted (BCP and "la Caixa" goodwill effect) 16,28 17,70 Basic efficiency (total expenses / income from basic operations) 55,68 57,61 Cost/income (total expenses & other operating results/gross operating inc 56,92 58,72 BIS Capital ratios (%): Total capital 10,74 11,43 TIER I capital 9,28 10,21 Risk management: Bad and doubtful debts (in milions) ,64 87,96 12,68 14,4 Provisions for bad and doubtful debts (in millions ) ,49 199,95 119,54 59,8 Bad and doubtful debts/total lending (%) 0,51 0,63-0,12 Provisions/bad and doubtful debts (%) 317,46 227,31 90,15 Provisions/bad and doubtful debts (including mortgages) (%) 338,19 253,68 84,51 Resources: Branches ,1 Employees ,1 Shares: Number of shares (*) ,3 Number of shareholders (**) ,6 (*) Number of shares on 30 June 2000, adjusted on the basis of the 6x1 split carried out on 20 December (**) Number of shareholders on 30 June 2001, without taking into account the changes that could take place due to the increase in capital. 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 5 Second quarter of 2001 Page 3

5 Consolidated Balance Sheet 30/6/01 30/6/01 30/6/00 Variation In milions Pesetas Euros Euros relative (%) Assets: Cash and deposits with central banks ,26 242,53 14,7 Government securities ,59 430,98 27,1 Financial institutions , ,30 22,8 Loans and advances to customers , ,63 43,3 Bonds and other fixed income securities ,30 587,74 29,0 Shares and other variable income securities ,89 197,96 38,4 Equity investment in unconsolidated companies ,13 183,70 0,2 Equity investment in Group companies ,82 54,09 180,7 Intangible assets ,99 11,92 185,2 Goodwill on consolidation ,87 289,71 123,6 Tangible assets ,65 336,04 26,7 Treasury shares 882 5,30 0,00 *** Other assets ,81 409,47 70,2 Accrued income ,76 136,77 29,2 Losses of Group companies ,76 19,06 265,9 Total , ,91 40,8 Liabilities: Financial institutions , ,06 8,1 Customer deposits , ,11 47,1 Liabilities on negotiable securities , ,38 30,9 Other liabilities ,04 610,14 20,1 Accrued expenses ,22 223,02 31,5 Provisions for liabilities and charges ,21 112,44 173,2 General reserve ,41 126,16 2,6 Negative differences on consolidation 460 2,76 2,72 1,8 Profits for the year (consolidation) ,53 103,52 16,4 Subordinated liabilities 700 4,21 0,00 *** Minority interests ,01 301,93 15,9 Issued capital ,00 74,32 37,3 Share premium account ,70 471,62 136,8 Reserves ,60 821,85 10,9 Revaluation reserves ,90 34,90 0,0 Reserves on consolidated companies ,89 163,73 7,4 Total , ,91 40,8 Memorandum accounts: Contingent liabilities , ,38 27,8 Commitments , ,64 46,4 Total , ,03 40,4 The assets in the balance sheet on 30 June were 40.8% higher than the previous year, reaching 24, million Euros (4,065,483 million Pesetas). This year s assets include those of the Herrero Group; without these, the increase would be 19.8%. Number 5 Second quarter of 2001 Page 4

6 Loans and advances to customers 30/6/01 30/6/01 30/6/00 Variation In milions Pesetas Euros Euros relative (%) Loans to Public Bodies ,40 88,64 222,0 Commercial loans , ,56 17,3 Mortgage loans , ,15 67,5 Personal loans , ,08 11,1 Loan and credit accounts , ,23 48,4 Other secured loans ,25 83,50 52,4 Overdrafts and sundry debit accounts ,65 394,93 70,8 Leasing , ,72 15,9 Factoring ,81 123,51 130,6 Loans to resident sector , ,69 41,3 Loans to non-resident sector ,41 681,54 59,3 Doubtful assets ,69 77,45 14,5 TOTAL GROSS LOANS AND ADVANCES TO CUSTOMERS , ,31 43,4 Provisions for bad & doubtful debts ,20 162,68 55,6 TOTAL NET LOANS AND ADVANCES TO CUSTOMERS , ,63 43,3 Securitized mortgages ,38 383,55 15,3 TOTAL NET LENDING TO CUSTOMERS , ,18 42,4 Total net lending to customers on 30 June was 17, million Euros (2,899,970 million Pesetas), with a year-on-year increase of 42.4% (taking the investments of the Herrero Group separately, as in 2000 it was not part of the Group, the growth is 19.5%). We should point out the strong growth in mortgage loans to the resident sector, which was 67.5%, and factoring transactions with year-on-year growth of 130.6%. Personal loans and loans left 32% Loans to resident sector on 30/06/2001 Leasing 9% Overdrafts and sundry debit accounts 4% Mortgage loans 40% Loans to resident sector on 30/06/2000 Leasing 11% Overdrafts and sundry debit accounts 4% Mortgage loans 34% Factoring 2% Commercial loans 13% Personal loans and loans left 34% Factoring 1% Commercial loans 16% Number 5 Second quarter of 2001 Page 5

7 Total net lending to customers (milion Euros) ,2% s/ D-00 (2) +7,7% s/ M ,5% s/ M-00 +2,6% s/ J-00 +4,7% s/ S-00 (1) June 2000 Sept Dec March 2001 June 2001 Total net lending to customers G.Herrero total net lending (1) The 4.7% increase in December 2000 compared with September 2000 does not take into account the total net lending by the Herrero Group on 31/12/00. (2) The 2.2% increase in March 2001 compared with December 2000 takes into account the total net lending by the Herrero Group on 31/12/00. Number 5 Second quarter of 2001 Page 6

8 Risk Management Variation 30/6/01 30/6/01 30/6/00 Absolute Relative In milions Pesetas Euros Euros Euros % Bad and doubtful debts: Balance on 1st January ,35 105,71-21,35-20,2 Increase due to new loan defaults ,55 39,82 33,73 84,7 Recoveries ,13-45,02 6,89 15,3 Amounts written off ,14-12,55-6,59-52,5 TOTAL BAD AND DOUBTFUL DEBTS ,64 87,96 12,68 14,4 Total gross loans and advances to customers , , ,68 43,4 Contingent liabilities , ,38 549,01 27,8 Total bad & doubtful debts ,64 87,96 12,68 14,4 BAD AND DOUBTFUL DEBTS AS % OF TOTAL LENDING 0,51 0,63-0,12 Provisions for specific coverage for bad and doubtful d ,14 52,01 5,13 9,9 Provisions general coverage for bad and doubtful debt ,50 147,95 20,55 13,9 Provision for statistical insolvency fund ,67 0,00 63,67 *** TOTAL COVERAGE REQUIRED ,30 199,95 89,35 44,7 Other additional coverage ,18 0,00 30,18 *** TOTAL PROVISIONS FOR BAD AND DOUBTFUL DEBTS ,49 199,95 119,54 59,8 PROVISIONS / BAD & DOUBTFUL DEBTS (%) 317,46 227,31 90,15 PROVISIONS / BAD & DOUBTFUL DEBTS (%) 338,19 253,68 84,51 (including mortgages) The bad and doubtful debt ratio dropped compared to the previous year to 0.51%, a further improvement on the 0.56% in March of this year. Bad and doubtful debts underwent a year-on-year increase of 14.4%. Without taking into account the inclusion in 2001 of the bad and doubtful debts of the Herrero Group, the total risk for bad and doubtful debt is million Euros (13,393 million Pesetas), 8.5% less than June of Total provisions over bad and doubtful debts continues to undergo an upward trend, reaching %, much higher than the % figure for last year and the % in March 2001; this is partly due to the statistical insolvency fund, which amounts to million Euros (10,593 million Pesetas). Number 5 Second quarter of 2001 Page 7

9 Bad & doubtful debts as % of total lending Total provisions as % of bad & doubtful debts 0, ,63 0, ,19 0,61 0,59 0, ,40 298,02 303,18 317,46 0,57 0,56 0, ,86 281,38 0,55 0,53 0,51 0,51 0,49 June 2000 Sept Dec March 2001 June ,68 227,31 260,42 June 2000 Sept Dec March 2001 Provisions June 2001 Provisions with mortgages Number 5 Second quarter of 2001 Page 8

10 Total on-balance sheet deposits and issued securities 30/6/01 30/6/01 30/6/00 Variation In milions Pesetas Euros Euros relative (%) Creditors, Public Bodies ,64 104,69 3,8 Current accounts , ,12 28,9 Savings accounts ,64 697,61 73,4 Fixed-term deposits , ,18 65,4 Temporary assets sales , ,11 37,5 Creditors, resident sector , ,01 46,1 Creditors, non-resident sector ,86 952,41 62,0 Debt securities and other negotiable instruments , ,38 30,9 Subordinated liabilities 700 4,21 0,00 *** TOTAL ON-BALANCE SHEET DEPOSITS & ISSUED SECURITIES , ,49 45,3 Of which: customer deposits , ,79 46,6 Total on-balance sheet deposits and issued securities underwent a year-on-year increase of 45.3%, and on 30 June was 18, million Euros (3,042,448 million Pesetas). Excluding the Herrero Group, the increase would have been 19.5%, reaching 15, million Euros (2,501,583 million Pesetas). The most important absolute increase related to creditors in the resident sector. The high increase in fixed-term deposits was particularly notable at 2, million Euros (386,578 million Pesetas), an increase of 65.4%. This significant increase is partly due to the decreased profitability of investment funds, which caused this transfer of funds to fixedterm deposits. Also worth pointing out, is the 62.0% increase in the non-resident creditors sector, a priority segment for the management of the Group operating under the Solbank brand. If we exclude the temporary asset sales of the total on-balance sheet deposits and issued securities, the resources to be invested amount to 16, million Euros (2,671,420 million Pesetas), a year-on-year increase of 46.6%. Number 5 Second quarter of 2001 Page 9

11 Resources of the resident sector on 30/06/2001 Temporary assets sales 15% Current accounts 37% Resources of the resident sector on 30/06/2000 Temporary assets sales 16% Current accounts 42% Fixed-term deposits 40% Savings accounts 8% Fixed-term deposits 35% Savings accounts 7% Number 5 Second quarter of 2001 Page 10

12 Deposits and funds under management 30/6/01 30/6/01 30/6/00 Variation In millions pesetas euros euros relative (%) Total on-balance sheet deposits & issued securities , ,49 45,3 Investment Funds , ,73 13,7 Pension funds , ,67 15,5 Insurance (actuarial reserves) , ,02 41,3 Other assets ,38 735,01-0,4 Consolidation adjustments , ,89-32,8 TOTAL DEPOSITS & FUNDS UNDER MANAGEMENT , ,02 34,8 If we add the resources not included in the balance sheet to total on-balance sheet deposits and issued securities, we obtain a figure that reflects the whole business activity of the Group in this sector, which is a year-on-year increase of 34.8%. Particularly notable was the performance of insurance with growth of 41.3%, which compensates for the relatively low growth in investment funds, which were affected by the fall in the stock market, especially in the second quarter of Excluding the increase due to the merger with the Herrero Group, the total deposits and funds under management increased to 20, million Euros (3,476,996 million Pesetas), a year-on-year growth of 14.1% Deposits and funds under management (million Euros) ,3% s/ D-00 (2) +4,9% s/ M ,2% s/ M-00 +5,9% s/ J-00 +0,8% s/ S-00 (1) June 2000 Sept Dec March 2001 June 2001 Herrero Group deposits and funds under management Deposits and funds under management (1) The 0.8% increase in December 2000 compared with September 2000 does not take into account deposits and funds under management of the Herrero Group on 31/12/00. (2) The 2.3% increase in March 2001 compared with December 2000 takes into account deposits and funds under management of the Herrero Group on 31/12/00. Number 5 Second quarter of 2001 Page 11

13 Yield and costs 30/6/01 30/6/00 Volume Rate Profits Volume Rate Profits In millions Pesetas Euros Pesetas Euros Euros Euros Cash and deposits with central banks ,44 3, ,16 236,74 2,13 2,51 Financial institutions ,48 5, , ,76 5,58 66,53 Loans and advances to customers ,23 6, , ,54 6,05 330,28 Fixed income and government securities ,06 4, , ,18 3,72 21,38 Variable income securities ,44 0, ,28 328,08 3,01 4,92 Tangible and intangible assets , , Other assets , , TOTAL INVESTMENT ,44 5, , ,65 5,34 425,62 Financial institutions ,36 5, , ,63 5,51 64,48 Customer deposits ,32 2, , ,63 2,12 93,02 Temporary assets sales and others ,01 4, , ,13 3,06 31,46 Other liabilities , , Special reserves , , Shareholder's equity , , TOTAL RESOURCES ,44 2, , ,65 2,37 188,96 Differential 2,91 2,97 The yield on investment and the costs of the resources show an upward trend in rates compared to the same period of the previous year, in line with the development of prices in the sector during this period. We should point out that practically the same differentials have been maintained for the first half of both years. Number 5 Second quarter of 2001 Page 12

14 Consolidated profit and loss account Variation 30/6/01 30/6/01 30/6/00 Absolute Relative In millions Pesetas Euros Euros Euros % Interest income ,00 425,62 254,38 59,8 Interest charges ,87 188,96 153,91 81,5 NET INTEREST INCOME ,13 236,67 100,46 42,5 Net fees and commissions ,50 122,36 16,14 13,2 from risk operations ,02 35,39 4,63 13,1 from services ,99 45,12 10,87 24,1 from investment & pension funds ,49 41,85 0,64 1,5 INCOME FROM BASIC OPERATIONS ,63 359,03 116,60 32,5 Dealing profits ,62 22,84 11,78 51,6 GROSS OPERATING INCOME ,25 381,87 128,38 33,6 Other operating income 694 4,17 2,21 1,96 89,1 General administrative expenses ,84 206,84 58,00 28,0 Staff expenses ,96 139,63 34,33 24,6 General expenses and taxes ,88 67,22 23,66 35,2 Depreciation and amortization ,20 16,09 8,11 50,4 Other operating costs 925 5,56 3,52 2,04 58,1 NET OPERATING INCOME ,82 157,62 62,20 39,5 Income from equity-accounted undertakings ,42 12,71 6,71 52,9 Amortization of goodwill on consolidation ,06 8,67 8,39 96,7 Profits on Group transactions ,82 26,95-29,77-110,5 Loan write-offs and provisions for bad & doubtful debts ,25 10,94 43,31 395,7 Write-downs of finantial fixed assets (net) 0 0,00-0,02 0,02 *** Non-operating results (net) ,30-11,81 30,11 255,0 PROFIT BEFORE TAX ,41 165,87 17,54 10,6 Corporation Tax ,88 62,35 0,53 0,9 CONSOLIDATED NET PROFIT ,53 103,52 17,01 16,4 Minority shareholders' interests 963 5,79 5,54 0,25 4,4 PROFIT ATTRIBUTABLE TO THE GROUP ,74 97,98 16,76 17,1 Profit attributable to the Group on 30 June shows a 17.1% increase compared to the same period in the year 2000, reaching the amount of million Euros (19,091 million Pesetas). Net interest income shows an accumulated increase of 42.5% (18.3% excluding the Herrero Group). This increase is the result of management of both investment and resources, within an economic environment that has undergone a rise in rates compared to the year 2000 and a significant increase in the volume of investment and deposits and funds. Income from basic operations improved by an accumulated 32.5% compared to last year (12.3% excluding the Herrero Group). The contribution of net fees and commissions shows an accumulated increase of 13.2%. The increase in commissions from services offsets the moderate growth in commissions from investment and pension funds, while assets held of which fell due to its valuation and movement to other savings products. Number 5 Second quarter of 2001 Page 13

15 The good performance of profits from financial operations resulted in an improvement in the gross operating income over last year of 33.6%, at million Euros (84,899 million Pesetas). As for the previous quarter, it is worth pointing out that holding down ordinary costs compensated for the need to acquire new technologies, as well as the needs resulting from the Group s expansion. Costs increased 28.0% but, excluding the Herrero Group, they only increased by 6.6%. The resulting net operating income, net of general administrative expenses, depreciation and amortisation and other operation products/costs, is million Euros (36,574 million Pesetas), an improvement of 39.5% over the year The profits from Group undertakings consolidated by the equity method have increased by 52.9% basically due to the strong increase in the profits contributed by the Banco Comercial Português. We point out to the strong increase in the amortisation of goodwill, due to Herrero Group acquisition, and the decrease in dealing profits of the Group, due to the sale of Banco Guipuzcoano stock last year. The new fund to cover statistical insolvencies coming into force on 1 July 2000 explains the high increase in the provision for bad and doubtful debts. This provision amounts to million Euros (5,791 million Pesetas) on 30 June Number 5 Second quarter of 2001 Page 14

16 Shares 30/6/01 30/6/01 Pesetas Euros Shareholders and trading Shareholders (number) Outstanding shares (number) Average daily trading volume (number of shares) Average daily trading volume (millions) 737 4,43 Quotations Reference price (18/4/01) 2.994,95 18,00 Maximum quote (18/4/01) 3.434,21 20,64 Minimum quote (29/6/01) 2.978,31 17,90 Latest quote (30/6/01) 2.978,31 17,90 Valuation -0,56% Stock exchange capitalisation (millions) ,65 Ibex 35 (17/4/01) (points) 9.526,50 Ibex 35 (30/6/01) (points) 8.878,40 Valuation -6,80% Stock Exchange Ratios Profits attributable to the Group per share ( ) 191 1,15 PER 2001 (price / EPS ) (calculated on the basis of estimated profits by the analysts) 15,98 NOTE: All the figures corresponding to the prior period to the increase in capital have been adjusted to the final number of shares. Banco Sabadell s listing on the Stock Markets of Madrid and Barcelona began trading on 18 April, with a Reference Price of 21 Euros (18 if we adjust the price to the subsequent increase in capital). On the same day, it reached its maximum quotation for the quarter at Euros (20.64 Euros at the adjusted price). The stock markets have shown a downward trend during this period, with the Ibex 35 falling by 6.80%. Banco Sabadell s stock was minimally affected by this trend and performed better than the market, resulting in an end-of-quarter price similar to the reference price and showing a faster growth rate than the Ibex Base 100: 17/04/2001 IBEX 35 BS Number 5 Second quarter of 2001 Page 15