Q2 2025 Banco de Sabadell SA Earnings Call Transcript
Key Points
- Banco de Sabadell SA (BNDSF) reported a solid set of results, maintaining positive momentum with a net profit of EUR410 million in the quarter, excluding TSB.
- The bank's performing loans in Spain rose by 6.1% year on year, and customer funds grew by 7.3%, indicating strong commercial activity.
- The cost of risk excluding TSB improved to 37 basis points, and the NPL ratio declined by 28 basis points, reaching levels well below 3%.
- Core banking revenues excluding TSB remained resilient, with NII increasing slightly and fee income rising by 1.5%, resulting in a 0.6% growth in total core banking revenues.
- The fully loaded common equity Tier 1 ratio improved to 13.6%, reflecting strong capital generation and a commitment to shareholder value with an interim cash dividend of EUR0.07 to be paid in August.
- The sale of TSB has led to a focus on the Spanish franchise, which may limit the bank's international growth prospects.
- TSB's net interest income declined by 1.4% in the quarter, primarily due to a positive one-off in Q1, highlighting potential volatility in earnings.
- Total expenses rose by 3% in TSB due to personal cost inflation, which could impact future profitability.
- The bank recorded EUR31 million for the bank tax this quarter, which was not present in the previous year's second quarter, affecting net profit.
- Currency depreciation impacted the bank's net interest income guidance, leading to a revised expectation of NII at around EUR4.9 billion for the full year 2025.
Good morning, everyone and thank you for joining us.
My name is Lluc Sas Franch and I'm the Head of Investor Relations and Ratings. It is a pleasure to welcome you to our second quarter 2025 results presentation.
For the convenience of investors and analysts this time and exceptionally, the webcast is being pre-recorded and therefore, there will be no live Q&A session. In any case, our upcoming Capital Markets Day will follow the usual format with a live presentation and a Q&A session.
During the event, we will be happy to answer any questions regarding both the strategic plan and the quarterly results.
As always, we are joined by our CEO, Cesar Gonzalez-Bueno; and our CFO, Sergio Palavecino.
The presentation will follow the same structure as in previous quarters. Our CEO will begin by highlighting the key developments of the quarter and discussing the most relevant topics. Then our CFO will cover financial results and balance sheet evolution. Finally, our CEO will conclude with some
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