Results presentation 2Q26- Increased commercial activity delivered an improvement in revenue, resulting in a 5.5% increase in credit volumes and 6.4% increase in customer funds year on year across the Group. New lending volumes in Spain grew considerably across all segments in the quarter: SMEs and corporates (+38%), mortgages (+22%) and consumer loans (+9%)
- Growth in core banking revenue signals the anticipated inflection point, with net interest income up quarterly 3.4% and fee income up 4%. This positive momentum is expected to continue into the second half of the year
- The Group begins its 2026 shareholder remuneration schedule with the launch of the new share buyback programme. It maintains its strong capacity to generate capital organically, with its CET1 fully-loaded ratio at 13.11%
- Profitability will grow over the coming quarters, driven by business growth, cost discipline and strong asset quality. The Group is on track to deliver its targets of 14.5% RoTE in 2026 and 16% in 2027
"These results reflect the strength of our model. Income is growing and is set to accelerate in the coming quarters, driven by strong commercial momentum. We look to the second half with confidence and remain focused on creating value for our customers, employees and shareholders"
Marc Armengol
CEO
"The resilience of our balance sheet and our capital generation capacity remain among the key strengths of the Group. We maintain robust capital ratios and are confident in the continued improvement of our results, providing strong foundation for the profitability targets we have set for 2026 and 2027"
Sergio Palavecino
Financial director
Banco Sabadell Group has earned net profit of 971 million euros during the first half of 2026, in line with the same period of the previous year (−0.5%) and including the contribution from TSB (which formed part of the Group during four months of this year until its sale). Excluding the contribution of the UK unit and non-recurring items, recurring profit stood at 691 million euros (-14.1%) and returned to quarter-on-quarter growth (8.4%), supported by strong business momentum, a trend that will continue in the coming quarters.
As expected, core banking revenue has resumed quarter-on-quarter growth, driven by strong commercial momentum, after reaching a trough between January and March. This improvement will continue into the second half of the year and, together with cost containment and high asset quality, it will help profitability measured as recurrent RoTE to increase over the coming quarters from 13.6% at the end of June to 14.5% by the end of 2026 and to 16% in 2027.
The Bank has begun its 2026 shareholder remuneration schedule. Following the payment in May of a 0.50 euros per share extraordinary cash dividend related to the sale of TSB, the Group has announced a new share buyback programme of 331 million euros (equivalent to around 2.1% of the bank’s share capital), which will be launched next week.
The shareholder remuneration policy is supported by the bank’s proven capacity to generate capital organically. The fully loaded CET1 ratio stood at 13.11%.
The Chief Executive Officer of Banco Sabadell, Marc Armengol, declared that: “These results reflect the strength of our model. Income is growing and is set to accelerate in the coming quarters, driven by strong commercial momentum. We look to the second half with confidence and remain focused on creating value for our customers, employees and shareholders”.
The Chief Financial Officer of Banco Sabadell, Sergio Palavecino, assured that: “The resilience of our balance sheet and our capital generation capacity remain among the key strengths of the Group. We maintain robust capital ratios and are confident in the continued improvement of our results, providing strong foundation for the profitability targets we have set for 2026 and 2027”.
Strong commercial activity across all segments
The boost provided by commercial activity has materialised in a year-on-year increase in performing loans of 5.5%, pushing them close to 125,200 million euros. In Spain, that growth was 3.6%, reaching 107,100 million euros, with increases across all segments. In SMEs and corporates, lending volumes rose to around 45,700 million euros, representing an increase of 1.9% year-on-year and of 2.1% quarter-on-quarter. New lending volumes recorded growth of 38% in quarterly terms.
Outstanding mortgage lending is also showing positive momentum, climbing to 40,200 million euros (+3.4% year-on-year and +0.9% quarter-on-quarter), with new mortgages growing by 22% during the quarter. A similar pattern was seen in consumer loans, which reached 5,600 million euros (+12.7% year-on-year and +2.7% quarter-on-quarter), with new lending items accelerating during the quarter by 9%.
This business momentum was also evident in customer funds, which recorded a year-on-year increase of 6.4% in the Group, reaching 188,110 million euros. Growth was driven by both on-balance sheet funds (+4.7% year-on-year) and off-balance sheet funds (+11% year-on-year). Among the latter, investment funds were a particularly strong contributor, supported by positive net inflows, alongside the strong performance of wealth management and insurance activities.
Inflection point and accelerated growth
Not including TSB, Banco Sabadell earned core banking revenue (net interest income plus fee income) of 2,417 million euros during the first six months of the year, 1,230 million of them in the second quarter, when it recorded an increase of 3.6% compared to the first quarter, driven by strong business activity, as the Bank had anticipated. The curve is expected to slope upwards in the coming quarters.
This inflection point was confirmed in net interest income, which recorded quarter-on-quarter growth of 3.4% to reach 902 million euros, driven by larger credit volumes. Having attained 1,774 million euros in the first half of the year, the Bank continues to predict that it will end the year with growth of over 1% for the full twelve-month period.
Similarly, fee and commission income improved by 4% compared to the first quarter, standing at 328 million euros (643 million between January and June), as a result of a bigger contribution from service fees. This trend will also continue in the second half of the year, allowing the Bank to close the financial year with growth in the mid-single digit.
Total costs during the half-year came to 1,227 million euros and included 88 million euros of non-recurrent costs stemming from the early retirement plan launched in Spain, which has now been completed and will deliver further efficiency improvements going forward. Annualised savings will be 40 million euros gross from 2027 onwards, although 20 million of them will already come through in the second half of 2026, which is more than the one-third of those 40 million that had initially been expected. As a result, recurring costs are expected to increase by less than 3% at the end of 2026.
The earnings for the first six months of the year include several one-off impacts. On the positive side, the sale of TSB has generated capital gains net of taxes of 322 million euros (340 million gross). Conversely to that, other impacts were recorded, such as the early retirement plan in Spain. The total balance has resulted in a positive contribution of 201 million euros net for the income statement.
As for asset quality, the NPL ratio continues to improve and has fallen to 2.47% in the second quarter of 2026, compared to 2.55% in the previous quarter, with stage 3 coverage considering total provisions standing at 68.7%. This good trend followed by the NPL rate is the result of the reduction of non-performing assets. The balance of NPAs has fallen by 44 million euros during the quarter and by 421 million euros over the past twelve months. Cost of risk stood at 40 basis points, which is the figure predicted for the full year.
