BancoSabadell. Thinking ahead. May 2006

Transcription

1 BancoSabadell Thinking ahead May

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 rates 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). 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. 2

3 1. Description, strategy, mission 2. Financial highlights 3. Business Description 4. Funding Strategy and LT2 New Issue 5. The Management Plan ViC07 6. Annexes A. 1Q06 results highlights B. BS versus its domestic peer group C. Spanish economy snapshot 3

4 Banco Sabadell. Highlights Fourth largest banking group in Spain Focused on commercial banking Top player in SMEs and affluent clients segment 4

5 Strategy (1) We reiterate our growth strategy CAGR : 24% Banco Atlántico acquisition 4,5 4 3,5 3 2, Banco Herrero acquisition NatWest España Banco de Asturias acquisition 1, , Loans to customers NPL ratio % From 2004 figures according to IAS (International Accounting Standards) 5

6 Strategy (2) 2006 is the 2nd year of our VIC07 strategic plan. We continue to deliver VALUE based on: Consistent growth Cost control State-of-the-art-technology Branch network expansion Medium term outlook: Sustained leadership in SME banking Domestic market share gains Recurrent analysis of non-organic growth transactions 6

7 Mission To develop a universal banking business all over Spain, with a specialised vocation, following a selective process of growth through a client banking model. 7

8 1. Description, strategy, mission 2. Financial highlights 3. Business Description 4. Funding Strategy and LT2 New Issue 5. The Management Plan ViC07 6. Annex A. 1Q06 results highlights B. BS versus its domestic peer group C. Spanish economy snapshot 8

9 Main Financial Highlights 31/03/05 31/03/06 % Shareholders equity 3,111 3, % Total assets 46,708 57, % Gross loans to customers 35,739 44, % On-balance sheet cust. funds 37,437 46, % Mutual Funds 8,047 9, % Pension Funds 2,322 2, % Funds under management 47,100 57, % Group net profit % In Euro million 9

10 Main ratios Mar-05 Mar-06 Cost/Income ratio 52,5% 46,6% Cost/Income ratio (inc.depr.) 58,7% 52,1% ROE 13,9% 16,8% NPL ratio 0,54% 0,45% NPL coverage 363,0% 398,9% Core capital ratio 7,9% 7,2% In percentage BIS Ratio 12,5% 11,2% 10

11 Ratings Qualifications Indiv. Short Long Outlook Other Fitch Moodys s Standard and Poors A/B F1 A+ --- Support Prime 1 A1 Stable Financial Strength B- --- A1 A Positive --- From... Fitch S&P Moodys s A+ A A

12 1. Description, milestones, strategy, mission 2. Financial highlights 3. Business Description 4. Funding Strategy and LT2 New Issue 5. The Management Plan ViC07 6. Annexes A. 1Q06 results highlights B. BS versus its domestic peer group C. Spanish economy snapshot 12

13 A Multibranding Strategy SabadellAtlántico BancoHerrero Solbank Sabadell BancaPrivada Commercial and Corporate Banking Coverage: The whole of Spain except Asturias and León Commercial and Corporate Banking Coverage: Asturias and León Commercial Banking for European individuals living in Spanish tourist areas Coverage: Mediterranean coastal areas and Spanish islands Private Banking Coverage: Spain ActivoBank Internet Banking for individuals Coverage: Spain 13

14 Domestic Branch Network Solbank Sabadell BancaPrivada ActivoBank 14

15 Branches Branches In Spain International Network 17 As of March 31, 2006 Galicia 26 Asturias Cantabria Navarra 5 10 La Rioja Castilla 6 Catalonia y León Aragon Extremadura 3 Basque Country Madrid 142 Andalusia 107 Com. Castilla- Valenciana La Mancha Murcia 14 Balearic Islands 38 Canary Islands 27 15

16 Our customers Corporate banking Customised management (medium and large companies). Corporate Banking Specific products by sector: Real Estate, Assets, Investment and International 49 specialised branches in March of 2006 and in progress > 25,000 firms Commercial Banking Universal banking model aimed at individuals and small firms Specialised management aimed at affluent segments Banking brands and networks by segment: SabadellAtlántico, Banco Herrero, Solbank and ActivoBank 1,048 branches nationwide > 1,500,000 individuals and firms Sabadell BancaPrivada Customised asset management > 3,000 customers and family enterprises 7 specialised branches As of March 31,

17 Banco Sabadell business units Customers Cross selling Diversified bus. Joint ventures Financials Corporate Banking SabadellAtlántico Banco Herrero Commercial b. SabadellAtlántico Banco Herrero Solbank ActivoBank Bancassurance Asset management Ibersecurities Treasury Real estate activ Venture capital America BS Andorra BS Fincom Netfocus Trading ALM Industrial portfolio Sabadell Banca Privada Dexia Sabadell 17 30

18 Pre-tax profit contribution by business unit 0,1% Landscape 2,2% Asset Management 5,5% Bancassurance 11,1% Others 44,6% Commercial Banking 36,6% Corporate Banking In percentage. Data as of Mar-06 18

19 Gross loans to customers (I) ,2 +25,6% , ,7 +28,0% ,3 +23,2% , ,5 mar-05 mar-06 Euros in millions Mortgages Others 19 18

20 Gross loans to customers (II) Public administration 1% Others 3% Individuals 31% SMEs 65% 20

21 Excellent customer service and asset quality Leader in asset quality % NPL ratio Dec-05 Banco Sabadell Spanish Banking Sector 0.5% 0.8%

22 Credit quality NPL and coverage ratio 363, ,9 2 0,54 0,53 0,49 0,49 0,45 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 In percentage 1 As of 31/03/05. 2 As of 31/03/06 22

23 1. Description, strategy, mission 2. Financial highlights 3. Business Description 4. Funding Strategy and LT2 New Issue 5. The Management Plan ViC07 6. Annexes A. 1Q06 results highlights B. BS versus its domestic peer group C. Spanish economy snapshot 23

24 Funding Strategy Diversified source of funding Planning of short, medium and long term debt issuance Wholesale funding breakdown Total funding base Covered Bond 38% Commercial Paper 7% Wholesale 37% Preferent Shares 1% Repos 5% Client Commercial Paper 8% Securitisation 12% Subordinated Debt 7% Senior Debt 36% Client Deposits (ex repo's) 49% 24

25 Funding and Liquidity Debt Maturity calendar (Wholesale Market) A well-balanced maturity profile 2,000 1,800 1,600 1,400 1,200 1, er sem. 08 2on sem. 07 1er sem. 07 2on sem. 06 1er sem. 09 2on sem. 08 1er sem. 10 2on sem. 09 1er sem. 11 2on sem. 10 1er sem. 12 2on sem. 11 1er sem. 13 2on sem. 12 1er sem. 16 2on sem. 15 1er sem. 15 2on sem. 14 1er sem. 14 2on sem. 13 Cedulas Hipotecarias Senior Debt Subordinated debt 25

26 Lower Tier 2 New Issue Snapshot Issuer: Banco Sabadell S.A. Issue Ratings (E): A2 (Moody s) / A- (S&P) / A (Fitch) Issue Details: Euro Benchmark 10NC5 FRN / FRN Call Date: Fifth anniversary of launch and quarterly thereafter Coupon until first call: 3-month Euribor + [ ] bp Step-up: 50 bp on the fifth anniversary of launch Listing: AIAF Documentation: Domestic MTN (Spanish CNMV and Spanish Law) Lead Managers: Banco Sabadell / HSBC / Lehman Brothers / SocGen This is Banco Sabadell s only Lower Tier 2 issue since February

27 1. Description, strategy, mission 2. Financial highlights 3. Business Description 4. Funding Strategy and LT2 New Issue 5. The Management Plan ViC07 6. Annexes A. 1Q06 results highlights B. BS versus its domestic peer group C. Spanish economy snapshot 27

28 ViC 07: Value and Growth (1) After a period of consolidation and growth, Banco Sabadell currently pursues the ViC 07 plan, where its main objective is to consolidate Banco Sabadell as a domestic franchise, leader in both banking for corporates as well as value creation. 2007e CAGR Gross loans to clients 50, % Client deposits 34, % Off balance sheet funds 16, % Cost/Income ratio 45.0 % ROE 16.5 % In Euro Million Circular 4/2004 BdE (IAS) 28

29 ViC 07: Value and Growth (2) Gross operating income increase ROE Cost/Income ROE Cost/Income 15,1% 16, 5% 19,0% 46,0% 4 5,0% 43,6% 13,3% 15,6% 17,9% 47,3% 46,1% 44,9% Cost base increase Cost/Income: Excluding depreciation. Euros in millions 29

30 1. Description, strategy, mission 2. Financial highlights 3. Business Description 4. Funding Strategy and LT2 New Issue 5. The Management Plan ViC07 6. Annexes A. 1Q06 results highlights B. BS versus its domestic peer group C. Spanish economy snapshot 30

31 Main financial highlights Mar-05 Mar-06 Var. Gross loans to customers ,6% Funds under management ,0% Net interest margin (ex.div.) 229,6 256,3 + 11,6% Net operating income 176,6 225,5 + 27,6% Net profit 105,8 136,3 + 28,8% 31 Euros in millions

32 Main ratios Mar-05 Mar-06 Cost/Income ratio 52,5% 46,6% Cost/Income ratio (inc.depr.) 58,7% 52,1% ROE 13,9% 16,8% NPL ratio 0,54% 0,45% NPL coverage 363,0% 398,9% Core capital ratio 7,9% 7,2% In percentage BIS Ratio 12,5% 11,2% 32

33 Net interest margin 4,09% 4,06% 4,06% 4,09% 4,24% Customer loan yield 2,98% 2,94% 2,90% 2,15% 2,11% 2,18% 1,11% 1,12% 1,16% 2,93% 2,49% 1,16% 1Q05 2Q05 3Q05 4Q05 1Q06 2,94% 2,82% 1,30% Customer spread 3M Euribor Cost of customer funds 2,04% 2,02% 2,01% 2,03% 1,99% Net interest income 1Q05 2Q05 3Q05 4Q05 1Q06 33 In percentage

34 Profit and loss account Mar-04 Mar-05 Var. Net interest income ex div. 229,6 256,3 11,6% Income from equity method 2,2 3,6 68,6% Commissions 108,5 121,1 11,7% Insurance activity 10,0 13,1 31,0% Results on financial transactions 11,7 18,8 59,8% Forex 11,3 11,0-2,8% Gross operating income 378,4 434,3 14,8% Revenues from non-fin.transact. 22,9 20,4-10,9% Administrative expenses -198,8-202,3 1,8% Depreciation -23,2-24,2 4,4% Other operating income -2,7-2,8 3,2% Net operating income 176,6 225,5 27,6% Asset losses and other prov. -20,6-26,3 27,5% Fin.results from non fin.transact. -4,0-5,8 42,8% Extraordinary results 13,2 6,4-51,6% Profit before taxes 165,1 199,8 21,0% Euros in millions Net profit 105,8 136,3 28,8% 34

35 BS group business evolution Gross loans to customers Funds under management ,2 +25,6% +23,0% +7,8% +9,8% ,6 +6,5% ,7 +3,0% ,7 +4,1% ,5 +4,4% ,5 +5,0% ,9 +4,1% , , ,8 mar-05 jun-05 sep-05 dec-05 mar-06 Euros in millions mar-05 jun-05 sep-05 dec-05 mar-06 35

36 Mortgage portfolio Structure by type of property 5% Others 23% Developers 53% Individuals (86% 1st home) Average mortgage* Debt service/net family income +1% 132,7 24,3% 26,5% +2% 28,6% 19% Commercial LTV 54,6% 36 *Euros in thousands

37 Mutual & Pension funds , , , ,9 +20,6% +16,7% 8.017, ,7 +21,7% Euros in millions mar-05 Pension funds mar-06 Mutual funds 37 23

38 Service quality Confirmed as top ranked in retail banking network independent quality surveys 7,39 7,26 7,27 6,78 6,50 6,61 6,18 6,69 6,49 6,75 6,69 6, Q06 Banco Sabadell group Market Source: STIGA, RCB Objective Quality in Retail Banking Networks The only financial institution with a global ISO 9001 quality certificate 38

39 Shareholder structure 28% Institutional shareholders % Institutional shareholders March-06 72% Retail shareholders 59% Retail shareholders 39

40 1. Description, strategy, mission 2. Financial highlights 3. Business Description 4. Funding Strategy and LT2 New Issue 5. The Management Plan ViC07 6. Annexes A. 1Q06 results highlights B. BS versus its domestic peer group C. Spanish economy snapshot 40

41 BS versus its Domestic Peer Group (1) Total assets Loans (Domestic businesses) Santander 814,738 Santander 162,722 BBVA 392,656 BBVA 143,312 Popular 80,416 Popular 62,535 Sabadell 57,156 Sabadell 41,496 Bankinter 40,171 Bankinter 26,781 Deposits (Domestic businesses) Santander 83,180 BBVA 76,641 Popular 27,223 Sabadell 20,165 Bankinter 15,410 As of March 31, 2006, in Euro Million Mutual Funds Santander BBVA Popular Sabadell Bankinter 114,174 59,733 11,444 9,756 9,220 41

42 BS versus its Domestic Peer Group (2) Shareholders Equity Net profit Santander 37,295 Santander 1,493 BBVA 13,562 BBVA 1,020 Popular 5,008 Popular 243 Sabadell 3,392 Sabadell 136 Bankinter 1,435 Bankinter 66 Branches in Spain Employees Santander 4,662 Santander 130,728 BBVA Popular Sabadell 1,104 3,622 2,213 BBVA Popular Sabadell 9,466 94,951 13,883 Bankinter 322 As of March 31, 2006, in Euro Million Bankinter 3,820 42

43 1. Description, strategy, mission 2. Financial highlights 3. Business Description 4. Funding Strategy and LT2 New Issue 5. The Management Plan ViC07 6. Annexes A. 1Q06 results highlights B. BS versus its domestic peer group C. Spanish economy snapshot 43

44 Robust Spanish Economy Spain Eurozone Real GDP 3,5% 3,3% 3,0% Employment Rate Growth 5,1% 4,9% 4,0% 3,6% 1,8% 2,0% * * 3,0% Inflation 3,4% 3,4% 49,2% Debt-to-GDP 46,0% 2,1% 2,2% 2,1% 46,6% 43,4% * ( * ) Expected by IMF AAA Median 44

45 SabadellAtlántico BancoHerrero Solbank SabadellBancaPrivada ActivoBank Banco Sabadell The Power of a Great Project 45