The Spanish bank Sabadell said this Thursday that its net profit for the third quarter fell 17.7% compared to the same period in 2024 due to lower loan income, while the focus of attention shifts to sustainability after the hostile takeover bid by BBVA.
The country’s fourth largest bank by market capitalization recorded a net profit of 414 million euros (483 million dollars) in the period from July to September. Spanish banks have benefited from higher borrowing costs, mostly linked to variable rates. However, they are narrowing the margins.
In the third quarter, the net profit of the country’s fourth largest bank by market capitalization fell 17.7%, to 414 million euros below the 449 million euros expected by analysts.
Sabadell’s net interest margin—loan earnings minus deposit costs—fell 4% year-on-year in the quarter to €1.2 billion, below the €1.22 billion expected by analysts.
For this year, the bank expects an interest margin of about 4.9 billion euros this year, compared to 5.0 billion euros in 2024, or 3.6 billion euros without TSBthat agreed to sell to Santander.
As part of its strategy outlined in July, it expects an interest margin of 3.9 billion euros without TSB by 2027, the same amount it reached in 2024 excluding TSB. It expects to complete the operation in the first quarter of 2026.
Analysts are closely monitoring whether Sabadell will be able to maintain growth rates without TSB, which accounted for 18.5% of the group’s net profit in the first nine months.
TSB’s net profit was unchanged in the quarter, although credit income rose 5 percent.
In 2027, Sabadell aims to obtain a net profit of more than €1.6 billion and achieve a profitability on tangible equity (RoTE) ratio of 16%, compared to the 15% recorded at the end of September, thanks to greater credit growth in Spain, where the economy is expected to grow above the eurozone average.
