Banco Sabadell plans to distribute 53 cents per share to its shareholders over the next 13 months

Banco Sabadell concluded the 2024 financial year with a record profit of 1.827 billion euros, a 37.1% increase compared to the previous year. The bank has raised its shareholder remuneration estimate from the 2024 and 2025 results from the 2.9 billion euros announced last July to 3.3 billion euros.

In a statement sent to the National Securities Market Commission (CNMV) this Friday, the entity explained that the announced remuneration is equivalent to distributing 61 cents per share over the two financial years. Specifically, it includes cash dividends of 20.44 cents per share charged to 2024, another "at least equal" for 2025, and share buyback programs to distribute capital exceeding 13%.

Thus, after paying eight cents in an interim dividend on October 1, the entity plans to distribute a total of 53 cents per share to its shareholders over the next 13 months, equivalent to 22% of its current market value.

The bank plans to hold a Capital Markets Day to present new strategic business lines up to 2027, which will take place after the first quarter 2025 results presentation. The bank's chairman, Josep Oliu, detailed that the entity has tripled the cash dividend and that "none of the major banks in Spain plans to deliver a similar proportion."

"We start a new year with confidence and ambition, convinced that Banco Sabadell's standalone project will generate value in a recurring and sustainable way for shareholders, customers, employees, and society as a whole," he added.

The CEO, César González-Bueno, celebrated the "record profit," which he said shows that the entity is on the right track and has a promising future, with levels of profitability he described as high and sustainable.

Banco Sabadell closed the year with greater financial strength, driven by higher revenue volume, cost containment, and continuous improvement in asset quality, allowing it to reduce provisions and improve the cost of risk beyond expectations.

Specifically, it generated 83 basis points of capital, reaching 13% of CET 1, and a growth of 343 basis points in ROTE profitability, up to 14.9%. The entity has assured that it expects to "maintain these positive trends on a recurring basis in the current and subsequent financial years," with ROTE profitability at 14% in 2025 and higher in 2026.

The bank explained that the results were driven by the growth of the interest margin, which reached 5.021 billion, a 6.3% increase, and assured that this year's forecast is to have an interest margin exceeding 4.9 billion.

Net commissions amounted to 1.357 billion, a 2.1% decrease, while banking business revenues were 6.378 billion, a 4.4% increase; total costs stood at 3.084 billion, a 2.3% increase, and recurring costs rose by 2.7%. The recurring margin grew by 6%, to 3.315 billion, while the efficiency ratio improved by 2.8 percentage points, to 48.7%.

On the other hand, the entity reduced total provisions by 21.6%, to 714 million, "as a result of the continuous improvement in the risk profile," while the credit risk cost stood at 26 basis points and the group's total risk cost at 42 basis points.

Banco Sabadell's outstanding credit grew by 4.7% year-on-year, with a balance of 156.913 billion, and credit production for companies amounted to 15.351 billion, a 31% increase. Meanwhile, mortgage activity grew by 53%, to 5.753 billion, and consumer credit reached 2.548 billion, a 21% increase.

Meanwhile, customer resources managed by Banco Sabadell, both on and off-balance sheet, experienced a 7.1% year-on-year growth, to 215.729 billion. As for the group's total assets, they reached 239.598 billion euros, representing a 1.9% year-on-year increase, despite the repayment of the entire TLTRO III and a large part of the TFSME to the Bank of England.

Meanwhile, the balance of problematic assets was reduced by 1.068 billion, to 5.680 billion, a 16% decrease from a year ago, of which 4.844 billion are doubtful loans and 836 million are foreclosed assets.

The non-performing loan ratio fell to 2.84% in December, the lowest since 2009, while the coverage of problematic assets rose to 58.6%, provisions on doubtful loans to 61.7%, and the coverage of foreclosed assets stood at 40.5%.

The British subsidiary of Sabadell, TSB, closed the year with an individual net profit of 208 million pounds, an 18.9% increase, which raised its positive contribution to the group's accounts to 253 million euros. The entity expects to increase profit by around 15% in the current financial year and continue to grow it in 2026.

The recurring margin decreased by 7.3%, with a decline in the interest margin and commissions in line with expectations, and a 3.7% reduction in recurring costs following efficiency plans implemented.