Financial and ESG Performance Review
Consistent strategy delivering increased profitability
Deliberate strategy execution leading to a net income of €560.8mn (2021: €184.5mn). Strong strategic focus delivering a sustainable growth of business
with increased revenues and capital generation, leading to a strong recurrent pre-tax profitability of €406.7mn, equivalent to a ROTE (before tax) of 14.4%.
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Solid NII growth (+9.1% YoY; +59% QoQ) to €625.5mn, reflecting improvement of average assets yield. In 2022, NIM increased to 1.47% (2021: 1.42%;
4Q22: 1.99%) with Net customer loans at €24.6bn (+3.8% YTD), reflecting an expanding loan book in both retail and corporate segments.
Commercial Banking Income grew to €918.8mn (+7.3% YoY) and Banking Income was also strong at €1,126.3mn (+15.9% YoY), with Other operating
results of €183.6mn, driven by an accelerated deleverage of the real estate portfolio. Cost to Income² ratio of 44.1% (excluding exceptional items; -2pp YoY).
Cost of risk was 45bps (2021: 70bps; 2022: €133.3mn), demonstrating resilient asset quality. Further reduction of NPL ratio to 4.3% (Dec/21: 5.7%),
increased coverage ratio to 76.7% (Dec/21: 71.4%), reflecting the de-risking strategy and progress towards achieving an NPL ratio in line with EU average.
Accelerating capital generation with CET 1 increasing 300bps to 13.1% (fully-loaded basis; 13.7% phased-in) and Total capital ratio reached 15.5%
(+330bps YTD). A capital accretive business model, which is set to produce strong capital generation, and RWA discipline, ensured a buffer above the target.
novobanco
(1) Tangible Equity = average phased-in RWA x 12%; Annualized; Considers Underlying profitability pre-tax deducted by special tax on banks (€34mn on annual basis) and contributions to Resolution
Funds (€40.9mn on annual basis); (2) Cost to Income defined as Operational Costs divided by Commercial Banking Income;
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