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 15.0% in September 2025, now above cost of capital.

• Strong commercial activity with performing loans up 8.1% YoY and customer funds up 7.8% YoY, supporting core revenue growth and improved asset quality.

• Sale of TSB to Santander at attractive multiples, with closing expected in Q1 2026, crystallizes value and shifts focus to Spain.

• New strategic plan targets growth, profitability, and enhanced shareholder remuneration, reaffirming a 16% ROTE by 2027 and €6.45 billion cumulative distribution for 2025–2027.

• Recurrent ROTE reached 14.1% as of September 2025, with reported ROTE at 15.0%.

Financial highlights

• Group attributable net profit for 9M25 was €1,390 million, up 7.3% YoY.

• Net interest income for 9M25 was €2.7 billion ex-TSB, on track for €3.6 billion full-year guidance; group NII declined 3.2% YoY to €3,628 million.

• Fees and commissions grew 3.7% YoY ex-TSB; total costs increased 0.5% YoY ex-TSB and decreased 1.1% YoY group-wide.

• Cost of risk ex-TSB at 37 bps, improved by 18 bps YoY; total cost of risk at 31 bps.

• CET1 ratio at 13.74% as of September 2025, up 18 bps in the quarter; €3.7 billion in accrued and non-paid dividends plus excess capital.

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.

• Macroeconomic environment remains uncertain, with global trade affected by tariffs and political instability.