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LIBERBANK: 1Q’21 RESULTS (ANÁLISIS BANCO SABADELL)

1Q'21 vs. 1Q'20 Results
N.I.I.: € 125.0 M (-8.8% vs. -8.8% BS(e) and -9.5% consensus);
Total Revenues: € 176.0 M (-0.6% vs. -3.4% BS(e) and -4.5% consensus);
Operating Profit: € 78.0 M (-4.9% vs. -6.1% BS(e) and -8.5% consensus);
Net Profit: € 23.0 M (+21.1% vs. 0.0% BS(e) and -10.5% consensus);
1Q'21 vs. 4Q'20 Results
N.I.I.: € 125.0 M (-2.3% vs. -2.3% BS(e) and -3.1% consensus);
Total Revenues: € 176.0 M (+28.5% vs. +24.8% BS(e) and +23.4% consensus);
Operating Profit: € 78.0 M (+52.9% vs. +51.0% BS(e) and +47.1% consensus);
Net Profit: € 23.0 M (-18 in 4Q'20 vs. 19.0 BS(e) and 17.0 consensus);
1Q’21 results came in above expectations in all activity margins, thanks mainly to the good performance of core revenues. Thus, NII increased by +2% vs. 1Q’20 in recurrence, in line with expectations and vs. +1% consensus and despite the reduction of the customer spread, which came in at 1.47% in 1Q’21 vs. 1.59% in 1Q’20. Thus, sustained growth in credit volumes (+9.7% vs. 1Q’20), and particularly in mortgages, has led to a better margin performance. .
This greater commercial dynamism, fundraising and penetration in the insurance segment would have led fee revenues to grow by +18.5% vs. 1Q’20 and +2.4% expected, far above the company’s guidance’21 of ~+7%.
Expenses rose slightly vs. 1Q’20 and vs. a slight drop expected (flat guidance’21) although explained by the greater activity developed and by the rise in intangible amortization expenses (technological investments).
The CoR remained in line with expectations, i.e. 55bps, with the recurring figure standing at 14bps. In this regard, we would like to point out that the company has carried out a reclassification into subjective NPLs, which explains why NPLs remain unchanged at 4Q’20’s levels, that is 2.9%. Excluding this adjustment, NPLs would have decreased.
Thus, Net Profit’21 came in at € 23 M, meaning a ~+21% increase vs. 1Q’20 and our estimate and -10% vs. the consensus.
Lastly, FL CET1 remains at the same level as in 4Q’20, ~14.5%. Net Profit generation has mitigated the dividend accrual by -7pp, consistent with the new merged bank’s payout target (50%), -4pp from regulatory changes (new definition of default) and mark-to-market adjustments (mainly in the fixed income portfolio and JV).
The stock is rising +1.4% (in line with the sector and slightly outperforming the IBEX 35). There will be a conference call at 11:00 (CET). BUY. T.P. Under Revision.