Banco de Sabadell (SAB) Q2 2026 earnings summary

Executive summary

• New CEO Marc Armengol emphasized a renewed focus on Spain, leveraging technology and AI, and targeting high-value customer segments after the sale of TSB.

• Completed sale of TSB Banking Group to Santander UK for £2,863 million, generating a €322 million net capital gain and over 400 bps CET1 capital generation.

• Net profit for 1H26 reached €892 million, up 10.9% year-over-year; including TSB, net profit was €971 million.

• Regained commercial momentum post-hostile tender offer, with high employee engagement and strong execution culture.

• Attractive shareholder remuneration through dividends and share buybacks, including an extraordinary cash dividend of €0.50 per share.

Financial highlights

• Net interest income: €1,774 million, down 2.0% YoY, but up 3.4% QoQ; net fees and commissions: €643 million, down 0.9% YoY, up 4.0% QoQ.

• Recurrent net profit reached €691 million, up 8.4% quarter-on-quarter.

• Performing loans increased 3.0% QoQ and customer funds rose 1.8% QoQ.

• Total provisions were €152 million, with cost of risk at 40 basis points.

• ROTE: 14.9%; efficiency ratio (with non-recurring costs): 49.8%.

Outlook and guidance

• On track to achieve 14.5% ROTE in 2026 and 16% in 2027, with reaffirmed guidance and strong commercial momentum.

• NII expected to grow over 1% in 2026, with customer margin to exceed 290 basis points by year-end.

• Recurring cost growth guidance improved to below 3%, with efficiency plan savings materializing in 2026.

• Asset quality expected to remain strong, with cost of risk stable at around 40 basis points.

• Moody’s and S&P upgraded outlooks to positive, citing improved asset quality and stable profitability.