Banco de Sabadell (SAB) Q1 2025 earnings summary

Executive summary

• Net profit reached €489M in Q1 2025, up 58.6% year-over-year, with ROTE at 15.0% and CET1 fully-loaded ratio at 13.31%.

• Performing loans grew 5.0% year-over-year and customer funds increased 6.3%, reflecting strong commercial momentum.

• Asset quality improved, NPL ratio at 2.67% (down 79bps YoY), cost of risk at 35bps, and coverage ratio up to 63%.

• Shareholder remuneration guidance raised to €1.3bn for 2025 and €3.4bn for 2024-25, with ongoing share buybacks.

• Share buyback programs totaling €1bn underway, with 21% completed by early May 2025.

Financial highlights

• Net interest income was €1,216M, down 1.3% year-over-year, while fees grew 1.3% and costs rose 0.9% year-over-year but fell 2.3% quarter-on-quarter.

• Provisions dropped over 29% year-over-year, supporting net profit growth.

• Group net profit surged 58.6% year-over-year to €489M; EPS rose to €0.33.

• CET1 fully-loaded ratio at 13.3%, up 29bps in the quarter after 60% dividend accrual.

• Tangible book value per share up 14% year-over-year.

Outlook and guidance

• ROTE guidance reaffirmed at ~14% for 2025 and above 14% for 2026.

• Cost of risk guidance maintained at 40bps, with management comfortable about potential upside.

• Fee income expected to grow at low single digits in 2025, supported by asset management and positive inflows.

• Deposit growth target of mid-single digits for the year remains unchanged.

• 2025 target cash dividend at least equal to 2024 (€20.44cts/share), with sustainable capacity for shareholder returns.