EUR 100.00 For Business Accounts Only

BANKIA: 4Q’20 RESULTS (ANÁLISIS BANCO SABADELL)

4Q'20 vs 4Q'19 Results
N.I.I.: € 493.0 M (-2.0% vs. -2.0% expected and -3.6% expected by the market consensus);
Total Revenues: € 693.0 M (-0.9% vs. -3.6% expected and -6.4% expected by the market consensus);
Operating Profit: € 245.0 M (-2.8% vs. -11.7% expected and -17.9% expected by the market consensus);
Net Profit: € 50.0 M (€ -34.0 M in 4Q'19 vs. € 32.07 M expected and € 21.0 M expected by the market consensus);

4Q'20 vs 3Q'20 Results
N.I.I.: € 493.0 M (+0.8% vs. +0.8% expected and -0.8% expected by the market consensus);
Total Revenues: € 693.0 M (-12.1% vs. -14.5% expected and -17.0% expected by the market consensus);
Operating Profit: € 245.0 M (-29.2% vs. -35.7% expected and -40.2% expected by the market consensus);
Net Profit: € 50.0 M (+35.1% in 3Q'20 vs. -13.3% expected and -43.2% expected by the market consensus);
The company has presented very good results, above expectations in all business lines, especially Core Revenues. The acceleration in mortgage production and the dynamism in Investment Funds supports this. Thus, the stronger commercial activity has allowed part of the Euribor’s deeper drop into negative territory, and thus the erosion of the client spread (1.48% in 4Q’20 vs. 1.64% in 4Q’19, although improving vs. 1.53% seen in 3Q’20, thanks to the portfolio mix) to be mitigated in NII. Likewise, fee revenues were a positive surprise, growing +17% vs. 4Q’19 (despite the economic downturn), +5.5% above our estimates but almost +8% vs. consensus, and furthermore a far cry from the normal run-rate of €~300 M (€ 333 M in 4Q’20). Costs were in line (allowing the company to end the year in the low end of its guidance range of -2%), and with it the improvements in PPP.
The CoR came in at around 75bps, allowing the bank to end the year at 77bps, in line with its guidance and better than the ~85bps expected. The NPA ratio improved to levels