According to GlobalData’s Global Retail Banking Analytics, Spain’s Banco Sabadell made the biggest improvement in its cost-to-income ratio (CIR) and efficiency amongst European banks between 2013 and 2017. In 2013, the CIR for its retail division was 67%, but by 2017 it had reduced by 25 percentage points to 42.6%.
A key contributor to this was the introduction of “Plan Triple,” in early 2014. The plan had three aims, namely to increase the profitability and performance of its recently acquired scale, transform the balance sheet by reducing loan losses and divesting property, and prepare for international expansion into new markets. Only the first two aims apply to its improvement measured in the quadrant below.
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To consolidate its domestic business and improve profitability, it applied two regional strategies. In Southeast Spain, Banco Sabadell had reached sufficient scale and aimed to boost profitability and reduce the performance gap of the newly acquired businesses. For the rest of the country, its primary aim was to grow market share and boost the depth of existing relationships.
The second aim was the transformation of its balance sheet by reducing loan losses and divesting from property. Banco Sabadell introduced a program to anticipate new loan defaults and faster recoveries. It also used the expertise of its specialist real-estate subsidiary, Solvia, to divest property assets at the optimal time.
During this period, Banco Sabadell introduced Kelvin Retail, a sales intelligence platform that supports daily decision-making for SMEs and sole proprietors. Kelvin Retail is free for Banco Sabadell’s clients who have a point-of-sale contract. It enables clients to know their customers better, monitor the business and local market conditions, and benchmark their performance against a range of local market statistics.
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By GlobalData
