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Banco Sabadell will transform its retail business model and will boost its leadership in the business banking segment in Spain

  • Banco Sabadell’s leadership in business banking, its capacity to establish long-lasting relationships, the degree of specialisation of its branch network and its high market share, will be key elements for the profitable growth of its business in Spain
  • The bank will carry out an in-depth transformation of its retail business and will have a fully digital model for accounts, loans and payment services, with support from specialist managers for insurance, mortgages and investments
  • TSB will contribute significantly to the Group’s income statement from 2021 onwards and expects to achieve a return (ROTE) of over 6% on completion of the plan
  • Banco Sabadell expects a return (ROTE) of over 6% in 2023


Banco Sabadell has today presented its new 2021-2023 Strategic Plan and has unveiled the three pillars on which it will be built. The first is its position of strength and leadership in the business banking segment in Spain, where it has market penetration of 40%. The aim will be to consolidate its position and increase its business volume efficiently, while maintaining its current high level of profitability.

This will be achieved by focusing on specialisation of its branch network, providing solutions and accompanying the internationalisation of Spanish companies and by drawing on its ongoing vertical specialisation programme by sector. It will also build on the capabilities of the Corporate Banking unit to provide specialist Middle Market solutions for SMEs and will take advantage of opportunities stemming from the credit multiplier effect which will arise from the Next Generation EU project.

The Business Banking unit and the strength and specialisation of its network are the bank’s most recognised assets in the market and will be key to the profitable growth of its business in Spain.

According to the bank’s Chief Executive Officer, César González-Bueno, “the way our customers speak about Banco Sabadell, about how the Bank has assisted them over time and the quality of service that they receive is something that continually impresses me since joining as CEO. The capacity of our network to establish productive and long-lasting relationships with companies – the average customer relationship being 11 years – is one of our strengths, which we intend to build on even further”.

The second key pillar of the Strategic Plan will be an in-depth transformation of its retail banking strategy, with a fully digitalised business model for consumer loans, payment services and current accounts. On the other hand, the marketing of mortgages, savings & investment products and insurance will be based on a mixed model of distribution through remote channels with tailored support from branch-based specialised managers.

This reshaping of the model draws on the evolution of customers’ consumption patterns and the strength of Banco Sabadell’s branch network. In this way, by combining individual service with fully digital access to the product range, the bank will offer a differentiated value proposition, responding to current demand and gaining access to a larger number of customers in this segment.

Lastly, the third pillar on which the plan will be based is the excellent performance of its UK subsidiary, TSB, which was already evident in the first quarter and which will be confirmed in the course of the plan horizon. Sabadell has refocused the strategy of its UK subsidiary and will base its growth on mortgage lending, which will sustain its good business performance throughout the plan and will fund its activities with the capital surplus on its balance sheet.

This volume growth will boost TSB’s margin, which will contribute positively to the Group’s income statement, and it is anticipated that ROTE of over 6% will be attained in 2023.

In the words of Sabadell’s CEO, “with the improvement of the macro scenario in Spain and in the UK, we have an excellent opportunity to achieve all of our objectives and we also have an essential element at our disposal: a highly motivated team, with great experience and huge commitment to the project”.

The Corporate Banking division will retain its structure based on customer units to manage relationships with large corporations. Its cross-cutting specialist product divisions will provide services and backup to business banking.

With regard to its subsidiaries in Mexico and the United Kingdom, the bank has stressed their good performance and has reaffirmed its intention not to begin any sale process in the short term.

In a projection scenario (2021–2023) still affected by the Covid environment, the Group expects to maintain its default rate and liquidity coverage ratio at levels similar to current, although it anticipates that Cost of Risk will decline to 45 basis points for the Group as a whole (55 basis points ex-TSB). The default rate is expected to peak in 2022.

Banco Sabadell also has a comfortable liquidity position that will enable it to meet its TLTRO repayments without need for large volumes of wholesale issuances.

On conclusion of the plan, the bank’s ROTE will be above 6%, up from the current level of 1.25% (1Q annualised), and the fully-loaded CET1 capital ratio is expected to be consistently maintained above 12%.

The bank will continue its efforts to contain and reduce costs arising from the business model transformation and from automation and simplification processes. As a result, Banco Sabadell expects a cost reduction of 100 million euros on completion of the plan.

Finally, César González-Bueno has concluded that “this strategic plan is to take place over a relatively short time span – just two and a half years – and sets realistic targets based on Banco Sabadell’s strengths. With this plan, we will lay solid and sustainable foundations that will enable us to continue increasing the profitability and value of the franchise”.

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Banco de Sabadell, S.A. Avenida Óscar Esplá, 37, 03007 Alicante, registered with the Mercantile Register in Alicante, tome 4070, folio 1, page A-156980, Fiscal Identification Number (NIF) A08000143.
Financial institution under the supervision of the Bank of Spain and registered in the Special Administrative Register under number 0081
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