3Q08 Results Optima 09

Transcription

1 Banco Sabadell 3Q08 Results Optima rd October 2008

2 Disclaimer Banco Sabadell cautions that this presentation may contain forward looking statements with respect to the business, financial condition, results of operations, strategy, plans and objectives of the Banco Sabadell Group. While these forward looking statements represent our judgement and future expectations concerning the development of our business, a certain number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, (1) general market. Macroeconomic, governmental, political and regulatory trends, (2) movements in local and international securities markets. currency exchange rate, and interest rates, (3) competitive pressures, (4) technical developments, (5) changes in the financial position or credit worthiness of our customers, obligors and counterparts. These risk factors could adversely affect our business and financial performance published in our past and future filings and reports, including those with the Spanish Securities and Exchange Commission (Comisión Nacional del Mercado de Valores). Banco Sabadell is not nor can it be held responsible for the usage, valuations, opinions, expectations or decisions which might be adopted by third parties following the publication of this information. Financial information by business areas is presented according to GAAP as well as internal Banco Sabadell group s criteria as a result of which each division reflects the true nature of its business. These criteria do not follow any particular regulation and can include forecasts and subjective valuations which could represent substantial differences should another methodology be applied. The distribution of this presentation in certain jurisdictions may be restricted by law. Recipients of this presentation should inform themselves about and observe such restrictions. These slides do not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe to any securities nor shall they or any one of them form the basis of or be relied on in connection with any contract or commitment whatsoever. 22

3 1. Trends and strategy 2. Liquidity 3. Risk management 4. 9M08 results 5. Optima 09 update 6. Outlook 33

4 Activity levels consistent with the new environment YoY percentage change 22.6% 23.1% 22.6% 23.1% Deposits* 20.0% 20.2% 16.8% 16.1% 15.3% 12.9% 13.6% 11.9% 7.3% 6.8% Loans Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Adjusting the deconsolidation efect of the insurance group. Deposits include sight and fixed-term deposits 4

5 managing risk and liquidity Sep-07 Sep-08 % Var. Gross loans to customers 61,855 66, % Mortgages 27,956 30, % Customer deposits 28,818 35, % Fixed-term deposits 12,959 21, % Euros in millions 5

6 Reinforcing solvency The strategic partnership with Zurich was closed on September 18th for a total consideration of 750m and a net capital gain of about 512m (1) 418 m Capital gain accrued in 3Q Strengthening the balance sheet (1) Including reinvestment tax shield 6

7 allocating extraordinary income with a prudent approach 3Q08 3Q07 3Q08 Var. Zurich capital gain Reported net profit % Credit risk provision Other writedowns Extraordinaries Other extraordinaries 47.,9 Extraordinaries Net profit exc. extr % 7

8 and managing the profit and loss account Sep-07 Sep-08 Chg. Net Interest Income , % Dividend and Equity method income % Net Fees and commissions % Trading income & Forex % Other operating income/expense % Gross Operating Income 1, , % Operating expenses % Amortisation & depreciaton % Pre-provision Operating Income % Other results *** Provisions for NPLs and others % Net result from disc. transactions *** Attributable Net Profit % 8

9 with efficiency and profitability Sep-07 Sep-08 Efficiency 43.9% 43.0% NPL ratio 0.41% 1.59% Coverage ratio 430% 140% ROE 20.9% 24.1% Tier I 7.21% 7.24% 9

10 1. Trends and strategy 2. Liquidity 3. Risk management 4. 9M08 results 5. Optima 09 update 6. Outlook 10

11 We continue generating a positive commercial gap 3,500 3,000 2,500 2,000 1,500 1, ,000 Incr. Loans to customers Incr. Customer deposits GAP Euros in millions 11

12 FINANCIACIÓN Y LIQUIDEZ... taking advantage of our network capillarity Focus on aggressive deposit gathering campaigns 32,039 33,372 34,947 35,479 27,756 28,501 28,818 Fixed-term deposits 11,491 12,066 12,959 16,815 18,210 20,172 21,040 Mar-07 Jun-07 Sep-07 Set-07 Dec-07 Dic-07 Mar-08 Jun-08 Sep-08 Euros in millions 12

13 still having a deposits share below our natural share Market share 4.23% 4.16% 4.16% 4.18% 3.98% 3.97% 3.97% 3.94% Mutual Funds 3.54% 3.41% 3.30% 1.34% 3.49% 3.44% 1.32% 3.45% 3.46% 3.41% 3.38% 3.40% 3.20% 3.20% 3.17% 3.03% 3.11% 1.86% 1.93% 1.39% 1.35% 1.45% 3.33% 2.98% 1.99% 3,33% 2,94% 2,00% Gross loans to customers Sight deposits Deposits Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Aug-08 Source: Bank of Spain (resident private sector) and Inverco 13

14 FINANCIACIÓN Y LIQUIDEZ We improve our funding mix Repo's 3.2% Funding structure Commercial paper 8.1% Preference shares 0.4% Wholesale funding 34.1% Wholesale funding breakdown ECP 5.6% Preference shares 2.2% Securitisatio 12.8% Customer deposits 54.2% Covered bonds 43.2% Sub. debt 8.2% Senior Debt 27.9% % Wholesale funding 32.8% 34.3% 36.5% 37.1% 38.8% 39.9% 39.9% 37.2% 34,7% 34.4% 34.1% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 Data as of Sep

15 with a comfortable wholesale maturity calendar FINANCIACIÓN Emisiones en mercados de capitales (no incluye las titulizaciones) Wholesale funding maturity calendar. Sep 2008 Diversified maturity calendar 15 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q ,000 1,200 1,000 1,030 1,350 1,515 1,500 1,500 1,500 1,781 1, ,350M 2,873M 2,811M 3,230M 430M 1,580M 500M 1,500M 2,720M 1,800M 33M

16 and capacity to transfer price increases to customers FINANCIACIÓN Emisiones en mercados de capitales (no incluye las titulizaciones) Loans with renegotiable pricing (in percentage of total book) 4Q08 4T % 18,5% > >12 months meses 51.3% 51,3% 1Q09 1T09 12,0% 12.0% 2T09 2Q09 9,6% 9.6% Data as of Sep Q09 3T09 8.6% 8,6% 16

17 while actively managing spreads 2.89% 2.91% 2.94% 2.94% 2.94% 2.93% 2.80% 2.84% 2.81% Customer spread 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q % 2.10% 2.11% 2.06% 1.93% 1.89% 2.02%2.10% 2.07% Combined customer spread (*) 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q % 1.69% 1.79% 1.82% 1.81% 1.77% 1.80% 1.83% 1.79% Net interest income as % of ATA 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 (*) Combined spread: Asset yield (cost of customer funds + cost of wholesale funding). In percentage 17

18 1. Trends and strategy 2. Liquidity 3. Risk management 4. 9M08 results 5. Optima 09 update 6. Outlook 3 18

19 We still have a NPL ratio below the system Sep-07 Jun-08 Sep-08 BS NPL 0.41% 0.85% 1.59% System NPL 0.76% 1.65% 2.44% GAP (b.p.) mar- 08 jun- 08 * Sep- 08 System NPL BS NPL Source: Bank of Spain, Bloomberg, INE and EPA * System: last available data August

20 by segments NPL ratio Companies SME Small retailers and self-employed 0.35% 0.52% 1.28% 0.84% 1.07% 1.37% 1.04% 1.10% 1.37% Mar-08 Jun-08 Sep-08 Mar-08 Jun-08 Sep-08 Mar-08 Jun-08 Sep-08 Developers Mortgages to individuals Individual others 0.42% 0.95% 2.99% 0.47% 0.57% 0.75% 3.99% 4.10% 4.89% Mar-08 Jun-08 Sep-08 Mar-08 Jun-08 Sep-08 Mar-08 Jun-08 Sep-08 20

21 with higher specific provisions offset by lower generic 100 Quarterly cost of risk (in bp) * Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08-6 Generic Specific * Excludes extra-provisioning in the quarter 21

22 1. Trends and strategy 2. Liquidity 3. Risk management 4. 9M08 results 5. Optima 09 update 6. Outlook 3 22

23 Growing net interest income Sep-08 NII 1,078.1 Dividends 7.0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 1, % Equity Method 38.4 Commissions Trading income 58.4 Forex 39.1 Other op. results 16.8 Gross Op. Inc. 1,662.0 Personnel exp Admin. exp Amort. & deprec Pre-provision Op. Inc Other results 0.0 Prov. For NPLs and others Disc. Trans Attr. Net Profit Euros in millions Sep-07 Sep

24 repricing assets and with lower weighting of wholesale funding 36.5% 37.1% 38.8% 39.9% 39.9% 37.2% 34.7% 34.4%34.1% % of wholesale funding 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q % 3.57% 3.87% 4.11% 4.45% 4.81% 4.78% 4.83% 5.06% Cost of wholesale funding 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q % 1.69% 1.79% 1.82% 1.81% 1.77% 1.80% 1.83% 1.79% Net interest income as % of ATA 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 In percentage 24

25 managing customer spread in a very competitive environment % 4.81% 3.22% 2.89% 2.91% 1.65% 3.59% 1.90% 5.17% 3.82% 5.32% 5.47% 2.94% 2.94% 2.94% 2.23% 4.06% 2.38% 4.50% 2.53% 5.93% 5.72% 4.72% 4.48% 2.93% 3.13% 2.79% 2.80% 6.06% 6.28% 4.86% 4.98% 3.47% 3.22% 2.84% 2.81% Customer loan yield 3M Euribor Cost of customer funds Customer spread 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q

26 with a stable contribution from participated companies and dividends Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q % Sep-08 NII 1,078.1 Dividends 7.0 Equity Method 38.4 Commissions Trading income 58.4 Forex 39.1 Other op. results 16.8 Gross Op. Inc. 1,662.0 Personnel exp Admin. exp Amort. & deprec Pre-provision Op. Inc Other results 0.0 Prov. For NPLs and others Disc. Trans Attr. Net Profit Euros in millions Sep-07 Sep-08 Equity method Dividends 26

27 fees driven by lower activity in asset management Lending Services Asset Mgmt 1 Lending Services Q08 2Q08 3Q08 4Q Q07 2Q07 3Q % Sep-08 NII 1,078.1 Dividends 7.0 Equity Method 38.4 Commissions Trading income 58.4 Forex 39.1 Other op. results 16.8 Gross Op. Inc. 1,662.0 Personnel exp Admin. exp Amort. & deprec Pre-provision Op. Inc Other results 0.0 Prov. For NPLs and others Disc. Trans Attr. Net Profit Asset Mgmt 1 Euros in millions Sep-07 Sep-08 1 It includes mutual funds commissions and pension funds and non-life insurance brokerage 27 28

28 Trading and forex Sep-08 NII 1,078.1 Dividends 7.0 Equity Method 38.4 Commissions Trading income 58.4 Forex Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q % Other op. results 16.8 Gross Op. Inc. 1,662.0 Personnel exp Admin. exp Amort. & deprec Pre-provision Op. Inc Other results 0.0 Prov. For NPLs and others Disc. Trans Attr. Net Profit Sep-07 Sep-08 Euros in millions Customer-driven business Other 26 28

29 discipline in both staff costs T07 2T07 3T07 4T07 1T08 2T08 3T % + 2.3% Sep-08 NII 1,078.1 Dividends 7.0 Equity Method 38.4 Commissions Trading income 58.4 Forex 39.1 Other op. results 16.8 Gross Op. Inc. 1,662.0 Personnel exp Admin. exp Amort. & deprec Pre-provision Op. Inc Other results 0.0 Prov. For NPLs and others Disc. Trans Attr. Net Profit Sep-07 Sep-08 Euros in millions Recurrent Non-recurrent 29 32

30 and administrative expenses Sep-08 NII 1, Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q % Dividends 7.0 Equity Method 38.4 Commissions Trading income 58.4 Forex 39.1 Other op. results 16.8 Gross Op. Inc. 1,662.0 Personnel exp Admin. exp Amort. & deprec Pre-provision Op. Inc Other results 0.0 Prov. For NPLs and others Disc. Trans Attr. Net Profit Sep-07 Sep-08 Recurrent Non-recurrent 30 35

31 Provisions reflect the change in the cycle Sep-08 NII 1, Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 Dividends 7.0 Equity Method 38.4 Commissions Trading income 58.4 Forex 39.1 Other op. results 16.8 Gross Op. Inc. 1,662.0 Personnel exp Admin. exp Amort. & deprec Pre-provision Op. Inc Other results 0.0 Prov. For NPLs and other Disc. Trans Attr. Net Profit Cost of risk 13 pb 38 pb 17pb 66pb 25pb 26pb 214pb Generic Specific Euros in millions

32 1. Trends and strategy 2. Liquidity 3. Risk management 4. 9M08 results 5. Optima 09 update 6. Outlook 3 32

33 Meaningful advance in the transformational plan Branch network 1.76 FTEs* admin per branch (1.95 Dec-07) Reduction of 213 back-office employees, increasing our commercial capability Headquarters Staff optimisation by 3% Back-Office centre 212,000 centralised operations / month after reducing the monthly volume in 8,000 operations International operations reduced to 30 centers from 63 previously Regional back-office support (CAR) 2 CAR (Barcelona and Madrid) *FTE= Full Time Equivalents 33

34 both in branch operational optimization Total 9M08 Centralising the branches processes FTE reduction in 3T FTE - 10 FTE Back-office FTE per branch 2,25 Optimising branch processes Total 3Q08 Year-to-date FTE - 16 FTE -240 FTE 2,00 1,95 1,84 1,79 1,76 1,75 96% of 2008 target achieved by September Q08 2Q08 3Q e *FTE= Full Time Equivalents 34

35 as well as improvements in the corporate centre FTE reduction Total 1H FTE Total 3Q08: Reorganising Structure - 14 FTE Total 9M FTE *FTE= Full Time Equivalents 35

36 extracting value within the group ACTIVA Program Comprehensive plan to convert back-office staff to front-office staff 3Q08 results Test plan in 2 areas, boosting commercial activity, with over 2,000 contacts per month and a success rate of over 50% Tailor-made CRM has been implemented Sales increase by > 11% compared to other branches 23,000 training hours in 4T08 to a group of employees Fully fledged to 100% of the network by 1st Jan

37 using our already announced discretionality in costs management Actions started already in 3Q08 Active branch network expansion management: Selecting the best choices of branch openings: 18 of the 22 new branches opened with higher probability of shortest break-even under current environment Sinergies generation by merging 8 branches Organisational commercial network improvements Creation of back-office center and document processing center Unit resizing based on revised expectations of future levels of activity Cost and investment decisions based on project and process profitability 37

38 1. Tendencias y estrategia 2. Liquidez 3. Gestión del riesgo 4. Resultados 1S08 5. Actualización Optima Outlook 3 38

39 Carácter emprendedor Solvency is reinforced with the capital gain from our strategic bancassurance partnership with Zurich We improve our NPL ratio gap versus the system in 50 b.p. Large generic provision fund with a high coverage ratio Positive commercial gap Active cost management as a result of the implementation of efficiency gains driven by Optima 09 We continue to reinforce our competitive positioning 39

40 SabadellAtlántico BancoHerrero Solbank Banco Urquijo ActivoBank