BNDSY - Banco de Sabadell S.A. (BNDSF) Q4 2023 Earnings Call Transcript
2024-02-01 20:51:02 ET
Banco de Sabadell, S.A. (BNDSF)
Q4 2023 Earnings Conference Call
February 1, 2024 03:00 AM ET
Company Participants
Gerardo Artiach Morenes - IR
Cesar Gonzalez-Bueno - CEO
Leopoldo Alvear - CFO
Conference Call Participants
Maksym Mishyn - JB Capital
Britta Schimdt - Autonomous Research
Sophie Peterson - JPMorgan
Andrea Filtri - Mediobanca
Carlos Peixoto - Caixabank
Carlos Cobo - Société Générale
Cecilia Romero - Barclays
Ignacio Cerezo - UBS
Presentation
Gerardo Artiach Morenes
Good morning and welcome to Banco Sabadell's Fourth Quarter 2023 Results Presentation Audio Webcast. Thank you for joining. Our CEO, Cesar Gonzalez-Bueno, and our CFO, Leopoldo Alvear, will present the main highlights and details of the commercial and financial performance of the bank in the quarter as well as for the whole of 2023. The presentation will be followed up by a Q&A session.
With no further delay, let me now hand it over to our CEO, Cesar Gonzalez-Bueno.
Cesar Gonzalez-Bueno
Thank you, Gerardo. Good morning everyone and thank you for joining us for Sabadell's annual results presentation.
I would like to start by going through the key messages of 2023 on Slide 4. First of all, group's NII grew by more than 24% in the year. The yearly growth ex-TSB was even higher at 34%.
Second, asset quality performance has been better than we initially anticipated. Total NPAs decreased by 3% in the year, while the coverage ratio increased by 3 percentage points and reached 56%. Group total costs of risk stand at 55 basis points, which represents a yearly improvement of 5 basis points.
Third, group net profits reached €1.33 billion, an all-time high. TSB delivered a net profit of £175 million stand-alone.
Fourth, the Board has decided to distribute a 50% payout, which represents a 55% increase in shareholder remuneration. The remuneration combines two elements; a cash dividend for a total of €6 million per share and a new share buyback program for a total amount of €340 million.
Finally, our return on tangible equity stands at 11.5%, while our core Tier 1 ratio reached 13.21%, increasing by 67 basis points in the year.
In Slide 5, we see the evolution of business volumes. The commercial gap of the group improved by €2 billion in the year since total performing loans decreased by 4.1% and on balance sheet funds decreased by -- less by 2%. The 4.1% year-on-year decrease of performing loans was driven by a 4.8% decrease in Spain and a 4% decrease in the UK.
Total customer funds on the right-hand side of the slide remained flattish year-on-year, on-balance sheet funds declined by 2%, while off-balance sheet funds grew by more than 5%. When looking at the quarterly evolution, the trend is similar. Finally, our commercial gap improved by €2 billion in the year, driving our loan-to-deposit ratio to 94%.
On Slide 6, we see the lending origination in Spain. Mortgage origination volumes in 2023 fell by 34% compared with 2022 following the current market slowdown. On the other hand, consumer loan origination increased by 25% on a year-on-year basis. We are growing and we are doing it in a healthy way from a risk perspective, thanks to more preapproved loans and more segmented pricing.
Regarding business banking, loan origination and new credit facilities increased by 7% over the year. As I explained in previous quarters, a significant amount of Eco-granted credit facilities expired in 2023, and they were renewed as regular facilities. This has no relevant impact on the stock, although it does have a relevant impact on repricing. Finally, working capital posted a slight increase of 1%....
Banco de Sabadell, S.A. (BNDSF) Q4 2023 Earnings Call Transcript