Banco de Sabadell (SAB) Q4 2025 earnings summary

Executive summary

• CEO transition announced: César González-Bueno to step down, Marc Armengol appointed as new CEO post-AGM, ensuring continuity of the strategic plan for 2026 and 2027.

• Group net profit reached €1.78bn in 2025, with ROTE at 14.3% and efficiency ratio at 49.3%.

• Asset quality improved: NPL ratio down to 2.37%, coverage ratio up to 64%, and total NPAs down 17% year-over-year.

• Performing loans grew by 5.4% year-over-year and customer funds by 6.4% ex-TSB.

• TSB sale approved, expected to close in Q2/Q4 2026, with results and guidance presented on an ex-TSB basis.

Financial highlights

• Net profit for 2025 reached €1.78bn, down 2.8% year-over-year; adjusted for extraordinary items, net profit increased by 3.4%.

• Net interest income (NII) ex-TSB at €3.6bn, group NII at €4.84bn, both down year-over-year.

• Fees grew 3.6% year-over-year ex-TSB, with asset management and insurance fees up 15%.

• Return on tangible equity at 14.3%; Core Tier 1 ratio at 13.1% after excess capital deduction.

• Shareholder remuneration for 2025 set at €1.5bn (9% of market cap), including €700M in cash dividends and €800M in share buybacks.

Outlook and guidance

• 2026 guidance: NII expected to grow over 1% ex-TSB, fees to rise mid-single digits, costs to grow around 3%, and cost of risk to remain ~40bps.

• Recurrent return on tangible equity ex-TSB guided at ~14.5% for 2026; 2027 targets reconfirmed, aiming for 16% ROTE.

• Cumulative shareholder remuneration of €6.45bn planned for 2025–2027.

• Macroeconomic forecasts indicate moderate growth in Spain and the US, with inflation stabilizing near central bank targets.