Banc Sabadell Group Financial Bulletin First quarter of 2001

Size: px

Start display at page:

Download "Banc Sabadell Group Financial Bulletin First quarter of 2001"

Morgan Fitzgerald
6 years ago
Views:

1 Banc Sabadell Group Financial Bulletin First quarter of 2001

2 Introduction FIRST QUARTER RESULTS Banco Sabadell Group attributable profits up by 19.1 %, increasing to over 63 million euros At the close of the first quarter of this year, the Profit and Loss Account of the Banco Sabadell Group, which for the first time, included the corresponding accounting entries for Banco Herrero, posted net attributable Group profits of million euros (10,502 million pesetas), which give a percentage increase of 19.1 % on the figure achieved for the same period in the year Margins and Profits Net interest income rose 44.1 % and came to million euros (27,287 million pesetas). The figure for net interest income, when added to fee and commission income which rose to 12.3 %, including fees and commissions from the management and sale of mutual funds, yields an income from basic operations the real measure of performance of the Group s ordinary activities - of million euros (38,702 million pesetas), an increase of 33.0 % on the previous year s figure. Gross operating income, including profits on financial operations stood, at 31 March, at million euros (41,855 million pesetas), up by over 42 %. After deducting general administrative expenses and amortizations, the results in net operations amounted to million euros (17,926 million pesetas), an increase of 59.8 %. The above developments and the increase in income from equity accounted undertakings which rose % in comparison with the results from the same period last year led to a profit before tax of million euros (16,504 million pesetas), an increase of 10.5 %. After the corporation tax, a sum of million euros (5,789 million pesetas) was deducted, the net profit was % higher than in March, 2000 with total earnings of million euros (10,715 million pesetas). Other highlights Up until 31 March, total net lending to customers had increased 43.4 %, rising to over 16,176 million euros (2,690,000 million pesetas) and on balance customer deposits stood at 17,429 million euros (2,900,000 million pesetas), an increase of 51.2 %. In the same period, deposits and funds under management rose 36.4 %, reaching a total of million euros (3,920,000 million pesetas). Number 4 First quarter of 2001 Page. 1

3 Year on year, asset quality continued to improve with the ratio for bad and doubtful debts falling to 0.56 %, an all time low, which is proof of the efficiency of the risk control systems in operation. In spite of this, provisions continue to be made for possible bad and doubtful debts, which, all in all, provide the Group with funds amounting to a cover of over %. The ratio is higher still, more than 300 %, if mortgage security held by the Group is taken into consideration. In this quarter, million euros (2,992 million pesetas) were allocated to the Statistical Insolvency Fund or the Anti-cyclical Fund as required by the Bank of Spain. This fund is calculated as being equivalent to Shareholders Equity and as such contributes to increased solvency. Quarterly profit attributable to the Group (in thousand Euros) MARCH JUNE SEPT. DEC. Number 4 First quarter of 2001 Page. 2

4 Financial Highlights Items (in millions): Variation 31/3/01 31/3/01 31/3/00 Absolute Relative Pesetas Euros Euros Euros % Group shareholders' Equity , , ,76 91,6 Total assets , , ,43 52,8 Total lending (net) , , ,48 43,4 Deposits and securities (on balance sheet) , , ,77 51,2 Of which: customer deposits , , ,52 59,8 Assets held in investment funds , ,88 278,43 6,0 Assets held in pension funds , ,19 143,36 12,6 Deposits and funds under management , , ,56 36,4 Profit and Loss Account (in millions): Interest income ,00 113,82 50,18 44,1 Income from basic operations ,60 174,92 57,69 33,0 Gross operating income ,55 177,05 74,50 42,1 Net operating income ,74 67,40 40,33 59,8 Profit before tax ,19 89,79 9,40 10,5 Profit attributable to Group ,12 53,01 10,11 19,1 Ratios Profitability and efficiency ratios (%): ROA (net profit/average total assets) 1,23 1,46 ROE (net profit attribuitable to the Group/average shareholders equity ) 11,14 17,93 ROE adjusted (disregarding the effect of goodwill on consolidation of BCP and La Caixa) 17,58 - Basic efficiency(general admin. expenses /income over ordinary margin) 56,11 57,54 Cost/Income 57,17 61,93 (Total expenses and other operating profits or losses/gross operating income) Capital ratio (BIS standards) (%): Total 10,68 11,67-0,99 TIER I 9,51 10,53-1,02 Risk management: Bad and doubtful debts (in millions) ,30 99,61 3,68 3,7 Provisions for bad and doubtful debts (in millions) ,66 193,13 97,53 50,5 Bad and doubtful debts/total lending(%) 0,56 0,77-0,21 Provisions/bad and doubtful debts(%) 281,38 193,88 87,50 Provisions/ bad and doubtful debts(incl. Mortgages) (%) 303,18 238,51 64,67 Resources: Branches ,0 Employees ,3 Shares: Number of shares (*) ,7 Number of shareholders ,9 (*) Number of shares existing at 31 March, 2000, adjusted according to the 6:1 split that took place at 20 December, Number 4 First quarter of 2001 Page. 3

5 Consolidated Balance Sheet 31/3/01 31/3/01 31/3/00 Relative In millions Pesetas Euros Euros variation (%) Assets: Cash and deposits with central banks ,76 225,65 39,5 Government securities ,03 445,22 37,7 Financial institutions , ,12 76,5 Loans and advances to customers , ,04 44,4 Bonds and other fixed income securities ,49 564,04 34,3 Shares and other variable income securities ,40 201,06 21,1 Equity investment in unconsolidated companies ,25 66,92 88,7 Equity investment in Group companies ,37 52,34 181,6 Intangible assets ,47 12,50 95,8 Goodwill on consolidation ,75 29,13 *** Tangible assets ,69 332,18 26,3 Treasury shares 76 0,46 0,00 *** Other assets ,33 314,76 45,9 Accrued income ,97 123,28 44,4 Losses of Group companies ,43 2,21 *** Total , ,43 52,8 Liabilities: Financial institutions , ,86 45,3 Customer deposits , ,82 45,0 Liabilities on negotiable securities ,89 758,36 139,1 Other liabilities ,17 611,51 12,7 Accrued expenses ,64 173,66 51,2 Provisions for liabilities and charges ,77 91,08 229,1 General reserve ,41 126,16 2,6 Negative difference on consolidation 460 2,76 2,72 1,8 Profits for the year (consolidated) ,40 55,84 15,3 Subordinated liabilities 500 3,01 0,00 *** Minority interests ,05 287,27 22,2 Issued capital ,43 66,99 30,5 Share premium account ,28 97,81 *** Reserves ,65 810,44 10,3 Revaluation reserves ,90 34,90 0,0 Reserves on Group companies ,34 176,01 8,7 Total , ,43 52,8 Suspense accounts: Contingent liabilities , ,19 33,3 Undertakings , ,59 48,0 Total , ,78 43,1 The consolidated balance sheet on 31 March 2001 also shows figures of the Herrero Group, which joined the Banc Sabadell Group on 1 January The balance sheet structure and items are similar to those used in preparing the public financial statements. Number 4 First quarter of 2001 Page. 4

6 Total assets On-balance sheet assets on 31 March were 23, million Euros (3,886,088 million Pesetas), 52.8% up on the figure for last year. If the assets provided by the Herrero Group are not taken into account, the increase would be 30.6%. The most noteworthy developments affecting the balance sheet during the year are as follows: On the asset side, loans and advances to customers increased by 4, million Euros (803,078 millions Pesetas, up 44.4%) and investment in financial institutions increased by 1, million Euros (259,679 million Pesetas, up 76.5%). On the liability side, the customer deposits increased by 4, million Euros (806,676 millions Pesetas, up 45.0%) and liabilities on negotiable securities rose by 1, million Euros (175,460 millions Pesetas, new issues of euronotes under an EMTN program). The increase in provisions for liabilities and charges, due to the change in pension funds regulations, as well as the increase of the issued capital and share premiums accounts, caused by the Banco Comercial Português and la Caixa joining the Sabadell Group should also be pointed out. Number 4 First quarter of 2001 Page. 5

7 Loans and advances to customers 31/3/01 31/3/01 31/3/00 Variation In millions Pesetas Euros Euros relative (%) Loans to public bodies ,55 46,05 129,2 Commercial loans , ,95 20,3 Mortgage loans , ,64 69,4 Personal loans , ,54 29,6 Loans and credit accounts , ,78 40,8 Other secured loans ,92 67,58 81,9 Overdrafts and sundry debit accounts ,96 368,30 71,9 Leasing , ,37 19,5 Factoring ,51 97,05 104,5 Credit to resident sector , ,22 45,0 Credit to non-resident sector ,03 656,94 34,6 Doubtful assets ,88 89,09 2,0 TOTAL L GROSS CREDIT INVESTMENT , ,30 44,4 Unpaid debts fund ,30 162,26 48,1 TOTAL NET CREDIT INVESTMENT , ,04 44,4 Securitized assets ,12 404,24 16,5 TOTAL LENDING (NET) , ,28 43,4 Total net lending on 31 March was 16, million Euros (2,691,586 million pesetas), with an inter-annual growth of 43.4%. After adding the investments of the Herrero Group, the growth is 19.2%. Loans to the resident sector on 31/3/2001 Leasing 10% Overdrafts and sundry debit accounts 5% Mortgage loans 32% Loans to the resident sector on 31/03/2000 Leasing 11% Overdrafts and sundry debit accounts 4% Mortgage loans 34% Personal loans and loans left 36% Factoring 2% Commercial loans 15% Personal loans and loans left 34% Factoring 1% Commercial loans 16% Number 4 First quarter of 2001 Page. 6

8 Total lending (net) (million Euros) ,2% s/ D-00 (2) March ,3% s/ D-99 +8,5% s/ M ,6% s/ J ,7% s/ S-00 (1) June 2000 Sept Dec March 2001 Total lending (net) G. Herrero total lending (net) (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 does not take into account the total net lending of the Herrero Group on 31/12/00 Number 4 First quarter of 2001 Page. 7

9 Risk Management Variation 31/3/01 31/3/01 31/3/00 Absolute Relative In millions Pesetas Euros Euros Euros % Bad & doubtful debts: Balance on 1 January ,35 105,71-21,35-20,2 Increase for new doubtful debts ,06 21,27 23,79 111,9 Recovering ,15-22,69 6,55 28,8 Write-offs ,97-4,67-5,30-113,5 TOTAL BAD & DOUBTFUL DEBTS ,30 99,61 3,68 3,7 Gross loans provisions , , ,63 44,4 Contingent liabilities , ,19 624,87 33,3 Total ri Bad & doubtful risks ,30 99,61 3,68 3,7 DOUBTFUL RATIO (%) 0,56 0,77-0,21 Provisions for specific coverage for bad and doubtful debts ,13 62,31-2,18-3,5 Provisions general coverage for bad and doubtful debts ,48 130,82 26,67 20,4 Provisions for statistical coverage for bad and doubtful debts ,86 0,00 46,86 *** TOTAL COVERAGE REQUIRED ,48 193,13 71,35 36,9 Other additional coverage ,18 0,00 26,18 *** TOTAL PROVISIONS FOR BAD AND DOUBTFUL DEBTS ,66 193,13 97,53 50,5 COVERAGE FOR BAD AND DOUBTFUL DEBTS RATIO (%) 281,38 193,88 87,50 COVERAGE FOR BAD AND DOUBTFUL DEBTS RATIO (%) 303,18 238,51 64,67 (including mortgages) If the bad and doubtful debts of the Herrero Group are not included, bad and doubtful debts amount to million Euros (13,743 million pesetas), 17.1% lower than the same figure for March, In spite of this slight increase in bad and doubtful debts due to the new institution joining the Group- and related to the effectiveness of the risk management, the bad and doubtful debt ratio has improved, compared with that of last year, being 0.56%. It should be pointed out that this year million Euros (7,797 million pesetas) have been provided in the new statistical provision, a figure that could be considered as a supplement to the general provisions, as it is not related to doubtful debts risks. Regarding the coverage ratio, this also continues an upward trend and has reached a level of %, much higher than the % of last year, partly due to the inclusion, this year, of the new statistical provision. Number 4 First quarter of 2001 Page. 8

10 Bad & Doubtful debts as % of total lending Total provisions as % of bad & doubtful debts 0,80 0,75 0, ,40 298,02 303,18 0,70 0,65 0,63 0,60 0,59 0,56 0,55 0,56 0,50 March 2000 June 2000 Sept Dec March March ,51 193,88 253,68 227,31 260,42 279,86 June 2000 Sept Dec March ,38 Provisions Provisions with mortgages Number 4 First quarter of 2001 Page. 9

11 Deposits and Funds on balance sheet 31/3/01 31/3/01 31/3/00 Relative In millions Pesetas Euros Euros Variation (%) Loans to Public Bodies ,98 71,76 54,7 Current accounts , ,76 23,0 Saving accounts ,76 702,20 68,0 Term deposits , ,70 89,1 Temporary assets assignment , ,06 10,5 Loans to resident sector , ,72 44,4 Loans to non-resident sector ,41 893,33 51,4 Loans and other negotiable securities ,89 758,36 139,1 Subordinated liabilitites 500 3,01 0,00 *** TOTAL DEPOSITS AND FUNDS ON BALANCE SHEET , ,17 51,2 Of which: customer deposits , ,77 59,8 On 31 March, when the Herrero Group joined the Group, the total deposits and funds on balance sheet increased 5, million Euros (almost 1 billion pesetas). Without taking into account the Herrero Group, the increase is 485,454 million pesetas, with an interannual increase of 25.3%. Most of the inter-annual increase in the deposits and funds on balance sheet corresponds to creditors in the resident sector, showing a sharp rise in term deposits, of 2, million Euros (454,139 million pesetas), with an increase of 89.1%. This large increase is partly due to the decreased profitability of investment funds, causing a transfer of the funds to term deposits. If we exclude the temporary assets assignments of the total deposits and funds on balance sheet, the resources to be invested reach 15, million Euros (2,535,937 million pesetas), with an inter-annual increase of 59.8%. The loans entry representing negotiable securities shows a large inter-annual increase (+139.1%, 1, million Euros - 175,460 million pesetas-), due to the issues of negotiable securities during the year, of which the loan issues of Sabadell Internacional Finance LTD ( million Euros - 158,068 million pesetas-) and promissory notes of the Banc Sabadell for the institutional market should be pointed out, the amount of which was million Euros (48,893 million pesetas) on 31 march. Number 4 First quarter of 2001 Page. 10

12 Deposits and Funds in the residents sector on 31/3/2001 Temp. Assets assignm. 15% Current accounts 35% Deposits and Funds in the resident sector on 31/3/2000 Temp. Assets assignm. 20% Current accounts 42% Term deposits 42% Saving accounts 8% Term deposits 31% Saving accounts 7% Number 4 First quarter of 2001 Page. 11

13 Deposits and funds under management 31/3/01 31/3/01 31/3/00 Relative In millions Pesetas Euros Euros Variation (%) On-balance total customer deposits & funds , ,17 51,2 Investment fund , ,88 6,0 Pension fund , ,19 12,6 Investment fund (mathematical forecast) , ,06 40,2 Other deposits ,74 738,33-2,2 Consolidated adjustments , ,94-23,8 TOTAL DEPOSITS AND FUNDS UNDER MANAGEMENT , ,68 36,4 Customer deposits and funds under management, an item that shows the whole business, as it also takes into account the resources not included in the balance sheet, shows an inter-annual increase of 36.4%. Without taking into account the increase due to the inclusion of the Herrero Group have risen to 19, million Euros (3,316,025 million pesetas), with an inter-annual increase of 15.5%. Deposits and funds under management (million Euros) ,3% s/ D-00 (2) ,9% s/ D-99 +6,2% s/ M-00 +5,9% s/ J-00 +0,8% s/ S-00 (1) March 2000 June 2000 Sept Dec March 2001 Herrero G. Customers deposits and funds under management Customers deposits and funds under management (1) The 0.8% increase in December 2000 compared with September 2000 does not take into account the customer 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 customer deposits and funds under management of the Herrero Group on 31/12/00. Number 4 First quarter of 2001 Page. 12

14 Yield and costs 31/3/01 31/3/00 Volume Rate Profits Volume Rate Profits In milions Pesetas Euros Pesetas Euros Euros Euros Cash and deposits with central banks ,81 3, ,56 233,85 1,92 1,12 Financial institutions ,63 5, , ,01 5,99 34,33 Loans and advances to customers ,91 7, , ,50 5,87 154,60 Fixed income securities and governement bonds ,79 5, , ,92 3,28 10,05 Variable income securities ,47 0, ,43 274,25 1,41 0,97 Tangible and intangible assets , , Other assets , , TOTAL INVESTMENT ,69 5, , ,04 5,24 201,08 Financial institutions ,96 5, , ,74 6,30 31,10 Customer deposits ,10 3, , ,28 1,86 40,09 Temporary assets assignment and others ,95 4, , ,60 2,82 16,07 Other liabilities , , Special reserves , , Shareholders' equity , , TOTAL DEPOSITS ,69 3, , ,04 2,27 87,26 Differential 2,89 2,97 Due to the current situation of interest rates, both earnings from investments funds and also customer deposits costs have continued their upward trend, in comparison with the same period of the previous year. Number 4 First quarter of 2001 Page. 13

15 Consolidated profit and loss account Variation 31/3/01 31/3/01 31/3/00 Absolute Relative In millions Pesetas Euros Euros Euros % Financial products ,39 201,08 134,31 66,8 Financial charges ,39 87,26 84,13 96,4 NET INTEREST INCOME ,00 113,82 50,18 44,1 Net fees and commissions ,61 61,10 7,51 12,3 from risk operations ,39 17,30 3,10 17,9 from services ,85 22,71 4,14 18,2 from investment funds & pensions plans ,37 21,10 0,27 1,3 INCOME FROM BASIC OPERATIONS ,60 174,92 57,69 33,0 Financial operations results ,95 2,13 16,82 *** GROSS OPERATING INCOME ,55 177,05 74,50 42,1 Other operating income 220 1,32 0,95 0,37 39,2 General administrative expenses ,52 100,64 29,88 29,7 Staff expenses ,77 68,82 17,95 26,1 General expenses ,75 31,82 11,93 37,5 Amortizations and asset write-downs ,84 8,20 3,64 44,3 Other operating expenses 463 2,78 1,75 1,03 58,6 NET OPERATING INCOME ,74 67,40 40,33 59,8 Net income equity accounted undertakings ,70 3,71 7,99 215,4 Amortization of goodwill on consolidation ,36 0,99 8,37 *** Net profits on Group transactions 64 0,38 26,96-26,58-98,6 Loan write-offs and provisions for bad debts ,54 5,89 12,65 214,7 Write-downs of financial fixed assets (net) 0 0,00-0,02 0,02 100,0 Non-operating results (net) ,27-1,43 8,70 *** PROFIT BEFORE TAX ,19 89,79 9,40 10,5 Corporate Tax ,79 33,95 0,84 2,5 CONSOLIDATED NET PROFIT ,40 55,84 8,56 15,3 Profit attributable to the minority shareholders 213 1,28 2,83-1,55-54,8 PROFIT ATTRIBUTABLE TO THE GROUP ,12 53,01 10,11 19,1 The profits attributable to the Group on 31 March are 63,12 million Euros (10,502 million pesetas), 19.1% higher than March Without the contribution of the Herrero Group, the increase is 1.11%. The net interest income margin shows an accumulated increase of 44.1% (20.1% without the Herrero Group), basically due too the sharp rise in credit investment and a suitable pricing policy with higher rates than last year. Net commission shows an accumulated increase of 12.3%. The increase in commission for services and the inclusion of the Herrero Group have offset by far the decrease in the FIM commission, the net equity of which has dropped due to transfer of capital to other savings methods. The evolution of the two items has resulted in income from basic operations showing an accumulated increase of 33.0% compared with last year (13.2% without the Herrero Group). The profits from financial operations in the year have risen mainly due to the fact that last year large adjustments had to be made, caused by trading on the stock exchange, whereas in March 2001 its impact has been minimal as large provisions had already been made for this item in December. Number 4 First quarter of 2001 Page. 14

16 The increase in expenses is 29.7% it would be 7.6% without taking into account the Herrero Group, this figure shows how ordinary expenses have been restricted, which allows those arising due to the expansion policy and new technological investment to be offset. After deducting the general expenses, the other operating profits and write-offs, the operating margin has increased by 59.8% and has reached million Euros (17,926 million pesetas); without the Herrero Group this figure has substantially increased (44.8%). The increase in compared company profits (215.4%) is mainly due to the profits of the Comercial Português being included. New companies joining the Group, BCP and the Herrero Group, has created a great increase in amortisation of the consolidated goodwill. The profits from Group undertakings in the previous year correspond to the profits for the sale of Banco Guipuzcoano stock. The contribution to bad and doubtful debts provisions has been increased a great deal due to new funds for coverage of statistical bad and doubtful debts coming into force on 1 July In March this year 2001, there is a provision of million Euros (2,992 million pesetas). Number 4 First quarter of 2001 Page. 15

Banco Sabadell Group

Banco Sabadell Group Financial Bulletin Second quarter of 2001 Introduction At the close of the first quarter of the year, Banco Sabadell Group reported attributable net profits of 114.74 million Euros