Banco de Sabadell (SAB) Q1 2026 (Media) earnings summary

Executive summary

• Net profit for Q1 2026 was €284M, down 28.1% year-over-year, impacted by non-recurring costs and the sterling hedge on the TSB sale price.

• Including TSB's net contribution, net profit was €347M, a 29.1% year-over-year decline.

• ROTE reached 13.3%, with recurrent ROTE at 14.1%.

• Extraordinary dividend of €0.50 per share to be distributed following the TSB sale, with a significant positive impact on CET1 capital.

Financial highlights

• Net interest income was €872M, down 3.5% year-over-year and 2.5% quarter-on-quarter, mainly due to lower loan yields and reduced contribution from credit institutions.

• Net fees and commissions totaled €315M, down 2.2% year-over-year and 5.1% quarter-on-quarter.

• Total costs were €624M, up 3.4% year-over-year, including €55M in non-recurring efficiency costs.

• Performing loans grew 5.6% year-over-year and 1.6% quarter-on-quarter, with strong growth in Spain, Miami, and Mexico.

• Customer funds increased 5.9% year-over-year, remaining stable quarter-on-quarter.

• NPL ratio improved to 2.5%, with stage 3 coverage ratio at 70.7%.

Outlook and guidance

• Capital gain of over €300M expected from the TSB sale, with CET1 capital generation exceeding 400 bps.

• 369 bps of CET1 improvement recognized in 2026, with an additional 36 bps expected between 2027 and 2028.

• Extraordinary dividend distribution to impact CET1 by 378 bps.