Banco de Sabadell (SAB) Q3 2025 earnings summary

Executive summary

• Strategic transformation since 2021 has driven a turnaround, with ROTE rising from 0% in 2020 to 14.1% recurring and 15.0% reported in September 2025, now above cost of capital.

• Net profit reached €1.39 billion for the first nine months of 2025, up 7.3% year-over-year, driven by higher loan volumes, customer funds, and reduced provisions.

• Sale of TSB to Santander at attractive multiples, with closing expected early next year, crystallizes value and shifts focus to Spain.

• New strategic plan targets growth, enhanced shareholder remuneration, and a cumulative €6.45 billion distribution for 2025–2027.

• Hostile takeover bid concluded, supporting reaffirmation of strategic and financial targets.

Financial highlights

• Recurrent ROTE at 14.1% for Q3 2025; group net profit nearly €1.4 billion for the first nine months, up 7.3% YoY.

• Net interest income ex-TSB at €2.7 billion for 9M25, on track for €3.6 billion full-year guidance; group NII fell 3.2% YoY.

• Fees up 3.7% YoY; cost of risk at 37 bps ex-TSB, down 18 bps YoY.

• CET1 ratio at 13.74%, up 72 bps YTD; €3.7 billion in accrued and non-paid dividends plus excess capital.

• Total costs increased 0.5% YoY ex-TSB; cost-to-income ratio improved to 48.1%.

Outlook and guidance

• 2025 guidance reaffirmed: NII of €3.6 billion, mid-single-digit fee growth, low single-digit cost growth, cost of risk near 40 bps.

• ROTE target of 16% by 2027; cumulative shareholder remuneration for 2025–2027 raised to €6.45 billion.

• Yearly cash dividends per share in 2025–2027 to exceed 2024’s €0.2044.

• NII expected to start growing in 2026, reaching €3.9 billion in 2027.

• Shareholder remuneration for 2025 improved to €1.45 billion.