Banco de Sabadell (SAB) Bank of America 30th Annual Financials CEO Conference 2025 summary

Strategic review of the BBVA tender offer

• Board unanimously rejected the BBVA offer, citing undervaluation and greater standalone value potential.

• Shareholder remuneration highlighted with €3.8 billion distributed in nine months, nearly 40% of market cap over three years.

• Concerns raised about BBVA's emerging market exposure, risk profile, and overestimated synergies.

• EPS accretion claims by BBVA disputed, with adjusted calculations showing negative accretion for shareholders.

• Offer structure now less favorable due to reduced share allocation and loss of tax neutrality for Spanish shareholders.

Financial performance and guidance

• Upgraded guidance to 16% return on tangible equity by 2027, with net income expected near €1.7 billion post-TSB sale.

• Revenue growth, cost control, and improved cost of risk are key drivers for profitability targets.

• NII expected to remain stable through 2027, with fee income growing at a mid-single-digit CAGR.

• CET1 ratio at 13.6%, with shareholder distributions guided at €6.3 billion over three years, including special dividends and buybacks.

• Securitization and capital market activities support ongoing capital generation and shareholder returns.

Loan growth, market share, and risk management

• Spanish loan growth projected at 5%, outpacing market average, with focus on operational and risk model transformation.

• Market share in SMEs targeted to rise from 8% to 8.3% by 2027, emphasizing gradual, disciplined expansion.

• Credit quality improving, with cost of risk guidance at 40bps through 2027, supported by conservative macro assumptions.

• SME and consumer lending prioritized, leveraging digitalization and proactive risk management.

• Transformation in risk and pricing models enables value creation without compromising credit quality.