Net profit was up to €86.5 million from €72.3 million a year earlier, while net interest income rose 32 per cent to €545.9 million. Analysts had forecast net interest income of €541 million, according to Reuters.
While the profit helped spur a rise in EU stocks, it was the mortgage activity at Spain’s fifth largest bank that will catch the interest of the property industry. Mortgage lending at Sabadell was up 54 per cent in the second quarter from a year earlier.
Granted, a year earlier Sabadell wrote very few loans, so an increase was expected. But any sign of an increased willingness of the banks to underwrite property will be welcomed by the industry.
“We are going to continue to see growth” in mortgage issuance, Sabadell chief executive Jaime Guardiola told reporters. “The annual increase is going to be very big percentage-wise because we are starting from such a low base.”
Guardiola touted the increase, but made it clear that lending would not return to pre-crash peaks, the Wall Street Journal reported. At most, mortgage volumes will reach 60 per cent of the boom years, he said.
Sabadell also reported an uptick in sales from its real-estate service company, Solvia, The company’s sales rose 7 per cent in the first half from a year earlier, to €1.3 billion, with the bank financing 30 per cent of the sold units.
Sabadell reported on the same day as smaller bank Bankinter, which announced a 43 percent increase in profit in the second quarter. Shares in Sabadell rose more than 5 per cent at one point on Thursday in the wake of the announcements.