Banco de Sabadell (SAB) Q4 2025 earnings summary

Executive summary

• Net profit for 2025 reached €1.8 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 13.1%.

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

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

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

Financial highlights

• Net interest income for 2025 at €4.84 billion (ex-TSB €3.6 billion), down 3.7% year-over-year.

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

• Total costs rose 0.5% to €3.1 billion, with personnel expenses as a key driver.

• Adjusted net profit grew 3.4% year-over-year, excluding non-recurring items.

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

Outlook and guidance

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

• Recurrent ROTE ex-TSB targeted at ~14.5% for 2026; 2027 target at 16%.

• Shareholder remuneration reconfirmed at €2.5 billion for both 2026 and 2027.

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

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