Banco de Sabadell (SAB) Q4 2025 earnings summary

Executive summary

• Net profit for 2025 reached €1.78 billion, with ROTE at 14.3% and efficiency ratio at 49.3%.

• Performing loans grew by 5.4% year-over-year and customer funds by 6.4% ex-TSB; CET1 fully-loaded ratio at 13.11%.

• Asset quality improved: cost of risk at 37bps, NPL ratio down to 2.37%, NPA coverage ratio at 64%.

• Shareholder remuneration for 2025 totals €1.5 billion (cash dividend €700M, share buyback €800M).

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

Financial highlights

• Net interest income ex-TSB at €3.6bn in 2025, down 6.6% YoY; group NII at €4.84bn, down 3.7% YoY.

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

• Total costs ex-TSB rose 2.5% YoY; group costs up 0.5% to €3,100 million.

• Adjusted net profit grew 3.4% YoY after extraordinary items.

• CET1 FL at 13.1%, with 196bps capital generation in 2025.

Outlook and guidance

• 2026 guidance: ex-TSB ROTE around 14.5%, NII to grow >1%, fees mid-single digit, costs ~3%, cost of risk ~40bps.

• 2027 targets reconfirmed: NII ~€3.9bn, ROTE 16%, total shareholder remuneration €2.5bn for 2026-27.

• NII ex-TSB expected to accelerate to mid-single digit growth in 2H26.

• Loan book growth expected at 6%, on-balance sheet funds at 3-4% in 2026.

• Management expects continued resilience in core markets, with focus on asset quality and capital strength.