Sabadell Shows Signs of Emerging From TSB Technology Quagmire
(Bloomberg) -- Banco de Sabadell SA provided its long-suffering shareholders with some relief on Friday, reporting third-quarter results for its Spanish business that exceeded analyst expectations. The shares rose the most since July 2016.
- The performance of the Spanish bank’s local operations, which account for about three quarters of gross profit, made up for a string of technology outages at U.K. TSB unit.
- Chief Executive Officer Jaime Guardiola said he expects Spain’s strong performance to continue, or even improve, in the fourth quarter. That’s after net interest income and fee income at the business beat estimates.
- “The punishment that the company has suffered for the problems at TSB has been excessive and these results should allay doubts about the share price and may even lead to a recovery,” Renta4 bank analyst Nuria Alvarez wrote in a report.
- Net income for the group dropped 46 percent to 127.2 million euros ($145 million) in the third quarter, falling short of analyst estimates for 128.7 million euros. Excluding TSB, profits the group posted profits of 150 million euros.
- Costs stemming from TSB are gradually subsiding. However, the bungled IT operation will result in total costs of 320.9 million euros for 2018.
- Sabadell shares climbed for the first day in eight, gaining as much as 7.7 percent. The stock was up 3.4 percent at 11:08 a.m., the best performance in the Ibex 35 Index.
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