With BBVA's hostile takeover bid on the table, Banco Sabadell has recorded very good results in 2024, with record profits of 1,827 million euros, 37% more compared to 2023. In the last quarter alone, it earned 532 million euros, 75% more than in the same quarter last year. Until the third quarter of last year, it had never exceeded the 500 million mark in a single quarter.
"It's a historic result. The bank is on a very good growth path," defended Banco Sabadell's CEO, César González-Bueno. He didn't stop there, and the executive wanted to emphasize that the bank has multiplied its stock market value by eight since 2021, detailing that, since the takeover bid was presented at the end of May last year, they have grown by 44% while BBVA has remained at 10%.
"Our project is a solo project," stressed González-Bueno, who remains equally optimistic as the operation progresses, now immersed in the second phase of analysis by the National Commission of Markets and Competition (CNMC) and with the takeover bid premium in negative. "I just don't see the operation. They are not paying the intrinsic value of the bank, and there is overwhelming social opposition," he stated. He also expects to continue as the entity's CEO, awaiting his re-election at the next shareholders' meeting, scheduled for March 20, the first in Sabadell since it moved to Alicante.
With the unanimous rejection of business associations and unions, which have submitted a total of 79 allegations to the CNMC, González-Bueno has focused on the effect the takeover bid will have on SMEs, a segment in which Sabadell has a lot of weight. "The common good can be above the particular good," he defended in reference to possible government intervention. Without forgetting that Sabadell estimates that the absorption will lead to the dismissal of between 40% and 50% of the workforce. Should it go ahead, González-Bueno places the eventual share swap with BBVA in June.
Shareholder remuneration rises to 3,300 million
In a context of falling interest rates, the bank has recorded a historic profit supported by a recurring margin (net interest income plus commissions minus recurring costs) 6% higher, reaching 3,315 million euros, and an improvement in asset quality, which has allowed provisions to be reduced by 22%, to 714 million euros, as detailed by CFO Sergio Palavecino. The return on tangible equity (ROTE) stood at 14.9%. A year that has also been characterized by a profit of 208 million euros from TSB, the largest contribution made by the British subsidiary since its acquisition in 2015, in addition to higher costs than initially estimated for the takeover bid.
"If there had been no takeover bid, the dividends would have been the same. It is a sign that our stock still has significant upside potential"If the result has grown, so has shareholder remuneration, to 3,300 million euros, of which 2,100 correspond to 2024 results and 1,200 to estimated 2025 results. This figure is equivalent to distributing 0.61 euros per share over the two fiscal years. "If there had been no takeover bid, the dividends would have been the same. It is a sign that our stock still has significant upside potential," Palavecino remarked."Our capacity to distribute dividends is greater than that of BBVA," added the CEO.
The entity will also carry out a share buyback of 1,002 million euros, a higher figure than usual because it could not be done last year due to the launch of the hostile takeover bid, with the forecast of completing it in less than a year. "It is very good for the shareholder who stays because their share increases in value," defends González-Bueno, taking into account that, when the number of shares in circulation is reduced, a greater benefit is produced for each of the titles.
Returning to Catalonia has had no commercial impact
This time, one of the classic questions and follow-up questions from recent years' results presentations that Sabadell received has lost importance. After returning its registered office to Catalonia a few weeks ago, González-Bueno pointed out that they had been thinking about this issue for a long time, even if they had not publicly stated it. He maintained that they wanted to make the decision with enough time margin before a possible absorption by BBVA so that it would have "the least possible noise."
The CEO assured that there has been no outflow of funds with the return to the city where it was born 140 years ago, an issue they argued to justify its transfer to Alicante seven years ago, in the midst of the political crisis over the independence process. "The commercial impact has been nil, it has not been negative in the rest of Spain nor positive in Catalonia," he stressed. "We have spoken with everyone and everyone has thought it was fine. Everyone understands that Banco Sabadell has to be in Sabadell, no one has the slightest doubt," he added, without going into assessing whether CaixaBank should follow in its footsteps.