Banc Sabadell earns €80 million in the first quarter of 2012 after reaching a solvency rate of 11.88%
During the first quarter of the year, the Catalan bank placed €293 million in provisions to strengthen its financial position. Despite the provision, Banc Sabadell had a net profit of €80 million in the first 3 months of 2012, which represents a 5% decrease when compared to the same period last year. The CEO of Banc Sabadell said that creating a “bad bank” in Spain to manage real estate assets is “unnecessary”, as the Catalan bank is “self-sufficient” and is “satisfied” with the management of its own real estate assets.
Barcelona (ACN).- The Catalan bank, Banc Sabadell, ended the first quarter of 2012 with a net profit of €80 million despite placing €293.4 million in provision to strengthen the bank’s financial situation, according a press note released on Thursday. Banc Sabadell experienced a 5% decrease in its net profit compared to the same period in 2011, but it reached a solvency rate of 11.88% at the end of March, in order to meet the requirements of Spain’s financial reform as soon as possible. The Catalan bank’s interest margin increased by 7.4% compared to the first quarter of 2011, while the margin before provisions grew by 8.5%. The consolidated results of Banc Sabadell and its group are evolving better than expected due to the current financial context in Spain and international markets. Bank managers have assessed the results as “very favourable” considering the macroeconomic entourage that surrounds financial activities. Despite the financial crisis, Banc Sabadell has increased its core capital by 43.86% in less than 4 years, jumping from a core capital of 6.67% in 2008 to 11.88% in the first quarter of 2012.
According to the bank, the high capital ratio permits Banc Sabadell to be “prepared” and in a solid solvency position to absorb the savings bank Caja de Ahorros del Mediterraneo (CAM). The Catalan bank bought CAM for just €1 in December, after a successful regularisation process, with a bailout of €5.249 billion paid by the Spanish private banking sector’s solidarity fund. The integration process will last one year at the most.
Creating a “bad bank” in Spain to absorb real estate assets deemed “unnecessary”
The CEO of Banc Sabadell, Jaume Guardiola, said that he does not consider it “necessary” to create a “bad bank” in Spain to manage the real state assets, something claimed by other banks. He made the comments at a press conference presenting the first quarter results on Thursday. However, Guardiola said that, if the Bank of Spain decides to go for this option, the participation of Spanish banks in it should be “volunteer”, because the Catalan bank is “self-sufficient” and is “satisfied” with the pace its real state assets are being allocated.