Link Securities | The Catalan entity has presented its results for the financial year 2024, of which we highlight the following aspects: Sabadell’s net interest income amounted to €5,021 million at the end of 2024 (+6.3% year-on-year; +1.7% 4Q2024; +5.7% at constant rates; +0.6% analysts’ consensus FactSet), positively affected by the collection in 4Q2024 of €36 million of extraordinary late payment interest related to the recovery of a debt following a favourable ruling in a legal dispute. Excluding the effect of the aforementioned interest,the year-on-year growth in gross operating income was 5.5%, driven by the rise in lending yields and revenues from the fixed income portfolio supported by interest rates.
- Net fees and commissions amounted to €1,357 million in 2024 (-2.1% year-on-year) mainly due to lower fees from services, particularly from cards and demand deposits. However, other operating income and expenses amounted to -€294 million at the end of 2024, which compares positively with -€447 million in 2023. Gross income closed 2024 at €6,337 million (+8.1% year-on-year; +7.6% at constant rates; +0.7% analysts’ consensus).
- Sabadell’s net operating profit (EBIT) or margin before provisions reached €3,254 million in 2024 (+14.3% year-on-year; +14.0% at constant rates; +4.0% FactSet consensus). Provisions declined 30.4% to €567 million, enabling profit before tax (PAT) to improve 33.0% year-on-year (+32.5% at constant rates; +3.0% analysts’ consensus) to €2,514 million.
- Sabadell’s attributable net profit closed 2024 at €1,827 million, 37.1% higher (+36.7% at constant rates; +7.6% FactSet consensus) than in 2023.
- The efficiency ratio improved by 2.8 p.p. to 48.7% in 2024 from 51.4% in 2023.
- The NPL ratio fell to 2.84% in December 2024, its lowest level since 2009. This ratio is better than the 3.14% in 3Q2024 and compares equally positively with the 3.52% at the end of 2023. The strengthening of the quality of the balance sheet is also reflected in a rise in the coverage of problem assets, which rose to 3.52% at the end of 2023 to 58.6%, while total provisions for doubtful loans (stage 3) rose to 61.7% and total provisions for non-performing loans to 61.7% and coverage of foreclosed assets stood at 40.5%.
- In terms of the balance sheet, outstanding loans grew 4.7% year-on-year, due to the good performance in Spain, where growth in lending to companies and individuals was notable, as well as in business abroad, mainly from Miami and TSB, the latter because of the positive impact of sterling’s appreciation. Customer funds increased 7.1% year-on-year, due both to a rise in on-balance sheet funds, with growth in demand deposits and time deposits, and to an increase in off-balance sheet funds, mainly in mutual funds backed by positive net subscriptions.
- The CET1 fully-loaded ratio, taking into account the distribution of the capital surplus of 1p.p., stood at 13.02% at the end of 2024, and the Total Capital ratio was 17.60%, above the requirements with an MDA buffer of 406 b.p. At yesterday’s meeting, Sabadell’s Board of Directors resolved to propose to the Ordinary General Meeting of Shareholders the distribution of a final dividend of €0.1244 gross per share charged to the results of 2024, to be paid in cash on 28 March 2025.
- This dividend complements the interim dividend of €0.08 gross per share agreed by the Board of Directors on 22 July 2024, which was paid on 1 October 2024. The total shareholder remuneration in cash for the year 2024, which combines the interim dividend and the final dividend, will therefore be equivalent to 60% of the attributable profit. In addition to the cash dividend, Sabadell’s Board of Directors, having obtained prior authorisation from the ECB, also agreed to propose to the Ordinary General Meeting of Shareholders two share buyback programmes.
- On the one hand, it will propose to the Ordinary General Meeting of Shareholders the reactivation of the share buyback programme against the profit for 2023, currently suspended, with a pending amount of €247 million to be executed. On the other hand, a share buyback programme, for a maximum amount of €755 million, will be proposed as a formula for distributing surplus capital above the 13% CET 1 capital level.
- The terms of both programmes will be the subject of a further announcement prior to their implementation.
- At yesterday’s meeting, Sabadell’s Board of Directors also agreed to propose to the Ordinary General Shareholders’ Meeting the approval of a new shareholder remuneration policy that envisages the payment of two interim dividends during 2025 and in successive years, expected to be paid on 29 August (or next business day) and 29 December (or next business day), in addition to the final dividend that the bank plans to pay in March 2026, subject to approval by the corresponding Ordinary General Shareholders’ Meeting.
