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Banco Sabadell’s Chairman, Josep Oliu, affirmed during his statements at the Annual General Meeting that “the Institution has closed the books on 2023, the best year in its history”, with record-breaking attributable net profit of 1,332 million euros, a 55% increase on the previous year. This result has been attained thanks to the fulfilment of the goals and targets set out in the Strategic Plan, achieved “with a roadmap that has involved a profound transformation of the business and a turning point in terms of profitability, with the development of new digital capabilities, an improved value proposition, and a reduction of the cost base”, he explained.
The Chairman emphasised that “Banco Sabadell aims to consolidate its business model in 2024, with the aim of achieving profitability above the current 11.5%, on the back of an increase in recurrent income, cost containment, and good performance in terms of cost of risk”.
The share price has quadrupled in three years
“These results have allowed us to improve shareholder remuneration, which has increased by 55% compared to the previous year, combining a total cash dividend of 6 euro cents per share and a new share buyback programme of 340 million euros. Total remuneration is therefore equivalent to 50% of attributable profit and represents total shareholder return of just over 10%,” said Oliu. Since the end of 2020, the share price has more than quadrupled, with the Bank ranking first on the IBEX-35 and second out of the more than 40 institutions that make up the European banks index.
Oliu further stated that “in spite of the complexity of events in 2023, I would like to highlight the resilience and strength that the Spanish banking industry has shown this past year. The stricter enforcement of regulatory reforms and the high levels of liquidity and solvency maintained by the system have ensured its financial stability”.
During the General Meeting, the Chairman also addressed the Institution’s unwavering commitment to sustainability, ensuring that “we have taken our decarbonisation strategy forward, with a priority focus on supporting our customers, offering them sustainable financing solutions”.
Definition of priorities for each business line
Banco Sabadell’s Chief Executive Officer, César González-Bueno, for his part, affirmed that our strategy is “clear and being resolutely implemented across all of the Group’s business lines”.
Retail Banking is the business line that has seen the deepest transformation. On one hand, a 100% digital model has been developed for consumer loans, accounts and cards. On the other hand, the Bank has implemented a superior support model for mortgages, insurance and savings/investment products, where customers require relationship managers’ personal support and expertise.
“We have developed new direct banking capabilities, whilst at the same time improving our traditional banking capabilities and improving our efficiency. Looking ahead to the future, we will leverage the capabilities we have built to turbocharge our acquisition of digital customers and become the main bank of more customers,” explained the CEO.
As for Business Banking, González-Bueno reiterated the Institution’s “powerful and recognised franchise”. “With this solid foundation, our strategy has consisted of taking specific actions to bolster our growth and simultaneously reduce our cost of risk. Our focus has been on tightly steered growth of our lending volumes,” he specified.
In 2024, the Chief Executive Officer expects to see further improvement of net interest income and a reduction of fees and commissions of around 5%.
He also stated that “rigorous risk management and control of delinquency will continue being a key focal point of our management actions. All of this will take our ROTE to over 11.5%. In other words, in 2024, the Bank’s profitability will continue to improve. We look to the future with optimism and confidence. The Bank is strong, it has some well-focused management priorities, it is following a well-defined roadmap and it has a first-class team,” he concluded.
Shareholders approve items on meeting agenda
During the meeting, all items on the agenda were approved, including the non-financial disclosures report, the 2023 accounts, as well as the proposal concerning the allocation of profits and the distribution of a final dividend of three euro cents per share for the year ended 31 December 2023. Shareholders also backed the share buyback programme for a maximum of 340 million euros.
On 29 December, Banco Sabadell distributed an interim dividend of three euro cents per share, bringing total cash remuneration to shareholders against 2023 earnings to six euro cents per share, which amounts to 326 million euros. Combined with the new share buyback programme, the total amount distributed among the Bank’s >200,000 shareholders amounts to 666 million euros, 55% more than in the previous year.
The proposed payout is in keeping with Banco Sabadell’s dividend policy, given the positive circumstances due to both the existing capital and the expected generation of capital in the coming financial year.
The General Meeting also backed the appointment of Ana Colonques as Independent Director, allowing the Group to take forward its commitment to diversity, with women now representing 40% of its Board of Directors. The reappointment of Mireya Giné as Independent Director was also ratified.
