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BANCO DE SABADELL

Analysis before buying or selling Banco de Sabadell shares

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In this article, we will show you how to analyze Banco de Sabadell's share price by learning more about this company and its economic environment. In this article, we will tell you more about the company, including details of its activities, competitors and main partners, but we will also explain the strengths and weaknesses of this group that could have a direct influence on investors' decisions. Finally, we will also explain how you can perform a quality fundamental analysis of this stock using the most influential events in this stock.

Elements to consider before selling or buying Banco de Sabadell shares

Analysis N°1

The group's strategy of communication and online services, particularly through smartphones and social networks, seems to be bearing fruit and Banco de Sabadell should continue to innovate in this direction. We will therefore be watching for any progress in this area.

Analysis N°2

The investments of the Banco de Sabadell group in areas of activity very different from its core business will also be interesting to consider. This currently includes the financing of vineyards, an increasingly profitable sector in Spain.

Analysis N°3

The banking group could also continue to finance small entrepreneurs with the aim of creating a kind of self-sustaining economy and companies in certain future business sectors such as carbon footprint assessment companies.

Analysis N°4

We will of course be keeping an eye on the international expansion strategy of this group, which is trying to gain a foothold in emerging markets and growing economies through bank takeovers or the creation of joint subsidiaries with local players.

Analysis N°5

Generally speaking, the economic and financial situation of the European Union, which has had difficulty in recovering since the recent financial crisis that hit it hard, remains to be monitored.

Analysis N°6

The same applies to the financial and economic situation in Spain, with some concerns about the ratio of public debt to GDP, which we will also continue to monitor very closely.

Analysis N°7

Finally, we will of course be watching the competition that the Banco de Sabadell group will face, especially the large foreign banks that have modern technology, more assets and a strong global footprint.

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General presentation of Banco de Sabadell

Before we look at Banco de Sabadell's competitors and partners, let's take a closer look at the Spanish banking group's activities. This knowledge is essential if you want to anticipate the effect of certain major events affecting the different segments of this business.

The Bancode Sabadell group is therefore a very popular banking group in Spain, and is one of the leading banking groups in the country. Here is the precise breakdown of the company's activities according to the share of turnover they generate.

  • First of all, commercial banking activities are the most important of the Banco de Sabadell group and generate 71.9% of its turnover. These include the sale of traditional and specialised banking products and services such as credit, factoring and leasing.
  • This is followed by market and private banking activities, which account for nearly 6.2% of the company's turnover. These include financial engineering, structured finance, capital market intervention and other services of this type.
  • Lastly, a very small part of Banco de Sabadell's turnover, i.e. 0.5%, comes from real estate asset management activities.
  • The remaining 21.3% of total sales are generated by the Group's activities in the UK and America.

At present, the Banco de Sabadell group manages nearly 135.3 billion euros of outstanding deposits and 143.6 billion euros of outstanding loans. The group has a network of more than 2,473 branches, mainly located in Spain.

Analysis before buying or selling Banco de Sabadell shares
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The major competitors of Banco de Sabadell

Santander

 The Santander banking group is the leading Spanish banking group and one of the main European banking groups. The company is listed on the Madrid, London, Milan and New York stock exchanges.

BBVA

 The BBVA banking group is the second largest Spanish banking group in this ranking and is present in more than 37 countries. Its positioning is particularly interesting in Latin America and Mexico where it is the leader in the banking sector. Its shares are listed on more than nine different stock exchanges in the world.

Caixabank 

CaixaBank is the fourth largest banking group in Spain, second only to Banco de Sabadell in terms of assets. It is a financial company offering both banking and insurance activities and is 61% owned by Caixa.

Bankia 

The Bankia group comes in fifth place. It is a Spanish conglomerate created in 2010 following the consolidation of the activities of 7 different savings banks.

Banco Popular

In sixth place is the Banco Popular group or BPE, which is listed on the Ibex 35 stock exchange index and specialises in retail banking. It also has operations in Portugal.

Bankinter

The seventh place in this ranking of Spanish banks is occupied by the bankinter group.

Unicaja

Next is Unicaja, which ranks eighth in this national ranking.

Ibercaja

The ninth and last place is occupied by the banking group Ibercaja.

Kutxabank

Finally, in tenth place in this ranking, we find the banking group Kutxabank.


The major partners of Banco de Sabadell

Diusframi

In 2014 in particular, the Banco de Sabadell group signed a partnership with the Diusframi group specialising in payment systems and with the aim of jointly developing the iParking application now used by the banking group. It is an application that can be accessed from iOS and Android systems and that integrates the iupay payment solution and is adapted to the payment of parking meters. The motorist who uses it will be able to start a timer on his application once his vehicle is parked, which he will stop when he leaves his parking space. The charge will then be made on his account according to the precise parking time. But this is not the only commercial asset of this application, which also includes a loyalty platform for merchants.

Rafael Nadal

Also in 2014, Banco de Sabadell teamed up with a world-famous sports personality, the tennis player Rafael Nadal. The player was chosen by the banking group as its new ambassador. In the past, other big names in sport have also been ambassadors for this banking group, including Lionel Messi, Luis Figo and Pep Guardiola. Of course, for Banco de Sabadell, the main objective of this partnership is to take advantage of the popularity of the Spanish tennis player in order to develop the visibility of its company internationally.

BNP Paribas

More recently in 2017, the Spanish banking group also got closer to one of its European competitors namely the French banking group BNP Paribas in an agreement allowing BNP Paribas' subsidiary BNP Paribas Securities Services, to acquire Banco de Sabadell's subsidiary Exelbank which specialises in securities custody services. Exelbank will thus be integrated into BNP Paribas Securities Services.

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Positive factors for Banco de Sabadell shares
The factors in favour of a rise in the Banco de Sabadell share price:
  • First of all, we can of course highlight the fact that the Banco de Sabadell group enjoys a strong position in its sector of activity, as it is the third largest Spanish banking group in terms of assets under management. It is also one of the first five Spanish banking groups to be financed by private capital.
  • Another undeniable advantage of Banco de Sabadell is its broad coverage of the country's financial activities, since it owns several banks, several brands and subsidiaries, as well as various holding companies.
  • Another area in which the Banco de Sabadell group stands out from the competition is online banking, particularly mobile banking, since the group is the leader in this segment in Spain and was one of the first to take an interest. Banco de Sabadell is in fact making the most of new technologies and the public's current enthusiasm for new means of communication to attract an increasingly young clientele. In particular, it offers a customer service via the social networks Facebook and Twitter and serves its customers 24 hours a day, seven days a week via these networks. Another achievement of this banking group is that it is the only one in Europe to allow cheques to be deposited via a mobile phone thanks to its InstantCheck application, which has been revolutionising the market for several years.
  • Of course, Banco de Sabadell can also count on its very large workforce to respond effectively to its customers' needs. The group employs more than 10,000 people in Spain.
  • Finally, the last asset of the Banco de Sabadell group, and without doubt the argument that most appeals to stock market investors, is the fact that it is currently the only bank in the country to have been awarded ISO 9001 certification for its global processes and the gold seal of the European Foundation for Quality Management. These various official recognitions allow it to show the image of a solid banking group capable of generating even more profits in the future.
Negative factors for Banco de Sabadell shares
The factors in favour of a drop in the Banco de Sabadell share price:

After reading the various elements we have just presented to you about Banco de Sabadell shares and the strengths of this Spanish banking group, you may want to take a buy position on this stock right now. But it would be dangerous to proceed in this way without moderating your judgment by also discovering the possible weaknesses of this group. Indeed, if there are only two really worrying weaknesses about this company, they should be taken into account in view of the weight they may have on investors' decisions. Here they are in detail:

  • The first weakness of the Banco de Sabadell group concerns its strong dependence on the Spanish market, where it generates most of its business and profits. The fact that this banking group has very little international presence means that it is highly exposed to national crises and regulations in that country.
  • Finally, the second disadvantage of this stock is the very high level of competition in the banking sector. As you have seen in our description of the competition in this group, Banco de Sabadell has to compete with other large Spanish and European banking groups that can take market share at any time.
The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

What are the banking brands used by Banco de Sabadell?

Grupo Banco de Sabadell operates several banking brands with SabadellAtlantico being its reference brand in Spain, SabadellGuipuzcoano being the brand for the regions of Navarra, Rioja and the Basque Country, Banco Herrero for Asturias and Leon, SabadellSolBank being the brand specialised in the market of foreign individuals residing in Spain and companies in the real estate and tourism sectors, and Sabadell United Bank for the United States market

What subsidiaries does the Banco de Sabadell group currently own?

Banco de Sabadell owns and operates several subsidiaries, including Banco Urquijo, which specializes in private banking services and is wholly owned, Banco Sabadell d'Andorra, a subsidiary in Andorra that is 51% owned by Banco de Sabadell and 49% owned by local shareholders, Dexia Sabadell, which is 40% and 60% owned by the Dexia Group and specializes in government financing, and BanSabadell Fincom, which specializes in consumer credit.

On which market is the share of the Banco de Sabadell group quoted?

Currently, Banco Sabadell's shares are listed on the main Spanish stock exchange, the Barcelona Stock Exchange or SAB. However, the group is also included in the country's benchmark national stock market index, the IBEX 35, due to its high market capitalisation among the 35 largest stocks in this financial centre.

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