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50% Of Banco Sabadell’s New Mortgages Are Fixed Rate

1 April 2016 – Expansión

Strategic commitment / The entity, which held its General Shareholders’ Meeting yesterday, considers that we are facing “an historic opportunity” for clients to protect their mortgage contracts.

Banco Sabadell’s message was convincing on Wednesday, when it explained to Spanish customers that they are facing an “historic opportunity” to shield the interest rates on their mortgages for at least 20 years by taking out fixed-rate mortgages. That was the message from both the Chairman and CEO of the entity, Josep Oliu and Jaume Guardiola (pictured above), respectively, at a press conference ahead of yesterday’s General Shareholders’ Meeting.

Guardiola announced that more than 50% of Sabadell’s new mortgage loans are now being taken out with a fixed interest rate, a trend that he believes will continue to increase, given that Euribor is at historic lows and therefore, has significant potential to increase and little margin to decrease. The executive said that the bank recommends all of its clients to take out this type of mortgage and also advises holders of variable contracts to move across to the new product, even if their spreads are low. (…).

Sabadell has been one of the Spanish banks that has most heavily backed this product, and it says that there is still a reduced supply in the market. The entity is currently offering mortgages with fixed interest rates of 2.70%, 2.50% and 2.15%, depending on whether its clients take out their mortgages for a 30 year, 20 year or 10 year term, respectively. Meanwhile, BBVA is offering 2.25% rate over 20 years and 2.75% over 30 years; and Bankinter is offering 2.10% over 15 years and 2.50% over 20 years. (…).

Dividend of €0.07

Sabadell was also due to submit to its shareholders the approval of the distribution of a dividend amounting to €0.07, which would represent a pay out of 53% and a yield of 4.3% based on the year end share price at 31 December 2015. (…).

In 2015, Sabadell made a profit of €708 million, up by 90.6%. The General Shareholders’ Meeting was also expected to approve a long-term bonus linked to the evolution of its share price until 2019 to incentivise 482 directors.

Original story: Expansión (by S. Saborit)

Translation: Carmel Drake