Banco de Sabadell SA unveiled plans to boost profits and reduce its exposure to nonperforming assets over the next three years.
The Spanish lender said earlier in February that it aims to boost its return on tangible equity — a key profitability ratio — to 13% by 2020 from 7.27% at the end of 2017. In addition to this, Sabadell is targeting a compound annual growth rate of more than 4% in net interest income in 2020. Group net interest income reached €924.6 million in the fourth quarter of 2017, down from the year-ago €946.9 million.
Sabadell added that is also aiming to reach a cost-to-income ratio of about 47% by 2020.
The lender, which had reduced nonperforming assets by €2.2 billion to €15.17 billion in 2017, said it expects to further reduce those assets by more than €2 billion annually to reach less than €9 billion in 2020.
The group also aims to lower its nonperforming loan ratio to less than 3% in 2020.
Furthermore, Sabadell said it aims to have a fully loaded common equity Tier 1 ratio of approximately 12.5% in 2020. At 2017-end, the ratio stood at 12.8%.