TSB books €7m loss in the first quarter as impact of coronavirus hits
TSB booked a loss of €7m loss in the first quarter after a €40m in the previous quarter, as parent company Sabadell’s net profit shrinks on coronavirus-related provisions.
Sabadell said its first quarter net profit shrunk by almost two-thirds after it braced for coronavirus-led defaults and suspended its guidance for the full year.
It reported a net profit of €94m in the January to March period after a hike in provisions and impairments to €454m from €190 a year ago. Analysts polled by Reuters expected a net profit of €116m.
As part of its plans to support the economy, the bank canceled its dividend policy for 2020 while senior executives agreed to waive their bonuses.
The bank suspended its guidance for 2020 as a result of the current crisis.
Net interest income (NII), a measure of earnings on loans minus deposit costs, fell 1.8% from a year earlier to 884 million euros and was 2.8% down against the prior quarter due to pressure from low interest in the euro zone.
Analysts had expected NII to come it at 888 million euros.
As part of TSB’s turnaround announced in November, Sabadell’s British unit said it would shut 82 branches in 2020, or 15% of its network, in a bid to save a total of 100 million pounds ($128 million) by 2022.
At the end of March, Sabadell’s core tier-1 capital ratio stood at 11.6% compared to 11.7% at end-December.
Get the news as it happens by following Morning Wire on Twitter.