Banco de Sabadell (SAB) Q2 2025 Pre Recorded earnings summary

Executive summary

• Q2 2025 results focused on the Spanish franchise, excluding TSB, due to the pending sale, with accelerating commercial activity and strong loan and customer fund growth year-over-year.

• Achieved highest H1 net profit in history for ex-TSB perimeter, with group net profit up 23.3% year-over-year to €975M and ROTE rising to 15.3%.

• Interim cash dividend of EUR 0.07 per share to be paid in August, with total shareholder remuneration of EUR 3.8 billion planned within 12 months.

• Cost discipline maintained, with total costs down 0.3% year-over-year and ex-TSB costs up 1.8%.

• Asset quality improved, with NPL ratio at 2.5% and stage 3 coverage at 63.6%.

Financial highlights

• Group net profit reached €486M in Q2 2025 (-0.5% QoQ, +23.3% YoY); ex-TSB net profit €410M (+3.9% QoQ, +15.5% YoY).

• Net interest income for H1 2025 was €2,425M, down 2.7% year-over-year, mainly due to lower credit yields in Spain.

• Fee income ex-TSB up 1.5% quarter-on-quarter and 4.6% year-on-year; net fees and commissions rose 3.0% year-over-year to €694M.

• Total costs ex-TSB down 2.6% quarter-on-quarter, up 1.8% year-on-year; provisions for credit losses and impairments dropped 32.9% year-over-year to €262M.

• EPS increased to €0.34 from €0.27 year-over-year.

Outlook and guidance

• Upgraded 2025 return on tangible equity guidance to 14.5%, with improved cost of risk outlook at 35bps group-wide and 40bps ex-TSB.

• Net income target ex-TSB for 2025 set at EUR 3.6 billion; NII for 2025 expected around EUR 4.9 billion due to FX impact.

• Fee income expected to grow mid-single-digit; costs to rise at low single-digit pace or remain flattish.

• TSB net profit expected to increase by mid-teens, with costs to decline by 3% and CoR to normalize below 20bps.

• Macroeconomic uncertainty persists due to global trade tensions, Middle East conflict, and shifting monetary policy.