Banco de Sabadell (SAB) Q3 2025 (Media) earnings summary

Executive summary

• Net profit reached €1,390 million for the nine months ending September 2025, up 7.3% year-over-year, with ROTE improving to 15.0% and strong commercial activity driving core revenue growth.

• Transformation and financial turnaround ongoing, with ROTE rising from 0.0% in 2020 to 14.1% recurrent and 15.0% reported in 3Q25.

• Sale of TSB to Banco Santander approved, with an estimated final price of £2,875 million, expected to close in Q1 2026, subject to regulatory approval; TSB continues to contribute to group results until completion.

Financial highlights

• Net interest income for 9M25 at €2.7bn ex-TSB, on track for €3.6bn full-year guidance, though total NII declined by 3.2% YoY to €3,628 million due to lower credit yields.

• Net fees and commissions increased by 2.1% YoY to €1,032 million, with 3.7% YoY growth ex-TSB, driven by asset management and insurance fees.

• Total costs decreased by 1.1% YoY to €2,282 million, with a 0.5% increase ex-TSB due to higher staff expenses.

• Performing loans grew 4.3% YoY (8.1% ex-TSB), and customer funds rose 5.4% YoY (7.8% ex-TSB), led by demand deposits and mutual funds.

• CET1 FL ratio at 13.8% as of Sep-25, with strong capital generation and buffers.

Outlook and guidance

• On track to meet 2025 guidance for NII (€3.6bn), fees (mid-single digit growth), total costs (low-single digit growth), and cost of risk (~40bps).

• Shareholder remuneration for 2025-27 raised to €6.45bn, with €3.6bn to be distributed in the next 6 months.

• Dividend payout policy set at 60%, with excess capital above 13% CET1 to be distributed.

• The sale of TSB is expected to close in Q1 2026, with proceeds to be received in cash and subject to final price adjustments.

• Macroeconomic conditions remain uncertain, with resilient US and Spanish economies but ongoing global trade tensions and inflationary pressures.