Sabadell Bank posts record profits and aims to grow to €1.6 billion annually by 2027

Sabadell Bank closed the first half of the year with a record profit of €975 million, up 23.3% compared to the same period last year, according to the financial results published on Thursday morning.

Details of the company's finances were posted to Spain's National Securities Market Commission (CNMV).

The record profits come amid the hostile takeover bid of the bank by BBVA, which started last year. 

Banc Sabadell also presented a new Strategic Plan for 2025-2027 on Thursday morning, which foresees the firm exceeding €1.6 billion in annual profits by the end of that period, once the sale of its British subsidiary TSB has materialized.

In addition, Sabadell plans to achieve a return of 16% by the end of the three-year period and pay shareholders €6.3 billion in that time, the equivalent of more than 40% of the bank's current value on the stock market.

According to Sabadell, the dividend per share in 2025, 2026, and 2027 will be higher than the 20.44 cents per share paid in 2024.

The €6.3 billion will be distributed through cash dividends and share buybacks.

To achieve these figures, Sabadell ensure that they will focus on the Spanish market, a "predictable, stable market with one of the most positive macroeconomic prospects in the European Union for the coming years."

In this sense, it advocates increasing commercial activity in Spain, increasing the credit portfolio by 5% annually, improving the risk profile, increasing income, and with "efficient" cost management.

First half 2025 results

The strategic plan is based on recent results, which have been eight consecutive quarters exceeding market expectations according to Sabadell.

The net profit of €975 million places the group's ROTE at 14.4% recurring. Without British subsidiary TSB, Sabadell still maintains record profits, which would be €804 million in such a case.

In the second quarter of the year, Sabadell earned €486 million, 0.5% less than in the same period last year, although excluding TSB, then the result stands at  €410 million (+3.9%).

Income from the banking business - interest margin plus net commissions - stands at €3.119 billion, 1.5% less annually. The fall is partly offset by a 0.3% reduction in costs, which are €1.51 billion.

Sabadell's interest margin closes the semester at €2.425 billion, 2.7% less due to the lower yield on credit due to the drop in interest rates.

The bank's mortgage lending is on the rise, with a 44% increase in the first half of the year compared to the same period in 2024, valued at €3.462 million.

BBVA postpones takeover bid acceptance period

BBVA will open the acceptance period for the hostile takeover bid for Banc Sabadell at the beginning of September, in order to incorporate the half-year results of both entities and the shareholders' meetings of Sabadell on August 6 into the prospectus.

BBVA sources have indicated that the objective is for shareholders to have "the most complete information possible" to be able to make a decision.

In addition, the decision prevents shareholders from having to decide whether or not to sell in the middle of August, coinciding with summer holidays.

On August 6, Sabadell shareholders will vote on whether to endorse the sale of British subsidiary TSB to Santander, as well as the extraordinary dividend of €2.5 billion that would derive from it.