Sabadell dragged to loss by TSB migration costs

Banco de Sabadell SA (SAB.MC) said Friday that it swung to a loss in the second quarter, hit by costs at its U.K. subsidiary TSB Bank following its technology-platform migration.

The Spanish lender booked a net loss of 138.7 million euros ($161.5 million) for the quarter compared with a EUR234.5 million net profit the year-earlier quarter.

Sabadell said it took EUR203.1 million in costs related to the migration of TSB’s systems to its own platform. This included EUR39.8 million related to losses from fraud, and EUR92.4 million in provisions for future customer redress, after some TSB customers were locked out of their accounts.

Net interest income, the difference between what the bank earns on loans and pays on deposits, came to EUR898.6 million for the quarter compared with EUR974.5 million the prior year.

Excluding TSB and provisions from institutional nonperforming asset sales, Sabadell said that for the first half of 2018 its net profit rose 25% on a like-for-like basis to EUR317.7 million. Sabadell said its "problematic assets" were reduced by EUR7.01 billion in the second quarter.

Sabadell’s fully-loaded Common Equity Tier 1 ratio, a key measure of capital strength, stood at 11.0% as of June 30.

Source: Read Full Article