Published by Global Banking & Finance Review®
Posted on July 24, 2025
3 min readLast updated: January 22, 2026
Add as preferred source on GoogleSabadell aims to boost profits and shareholder returns to counter BBVA's bid, leveraging the TSB sale and strategic growth in Spain.
By Jesús Aguado
MADRID (Reuters) -Spain's Sabadell pledged on Thursday to boost profits and payouts for shareholders, including from the recently-agreed sale of UK arm TSB, as the bank set out its case to remain independent in the face of a hostile bid from bigger rival BBVA.
Spain's fourth-largest lender by market value, trying to fend off a 13-billion-euro ($15 billion) bid from BBVA, said it aimed to make a net profit of more than 1.6 billion euros in 2027 thanks to higher loan growth in Spain.
Sabadell's net profit was 1.57 billion euros in 2024, excluding TSB, which it has agreed to sell to Spain's Santander.
Sabadell said it also aimed to lift its return on tangible equity ratio, a key measure of profitability, to 16% in 2027 from 14.6% in 2024 as part of a three-year strategy.
At the same time, it said it would pay out 6.3 billion euros to shareholders from 2025-2027.
Investors will be asked to approve the sale of TSB and a one-off 2.5-billion-euro cash dividend, funded by proceeds from the sale, which analysts see as a move to keep shareholders onside in the face of BBVA's overtures.
For 2025, the shareholder payout is expected to total 3.8 billion euros, with at least an additional 2.5 billion euros planned in total for 2026 and 2027.
At 0926 GMT, Sabadell shares were up 1.9%.
Madrid-based brokerage Renta 4 welcomed the strategic plan, saying it was also "focused on a lower credit risk profile and better price segmentation in consumer credit".
Without its British unit, Sabadell aims to boost earnings in Spain, where the economy is projected to grow above the euro zone average.
It expects to increase profits in Spain thanks to cost control and a 5% accumulated annual rise in loans over 2025-2027 focused on mortgage, consumer and enterprise lending, with credit market share growing by 25 to 30 basis points to 8.3%.
In the second quarter, Sabadell's net profit rose 0.6% to 486 million euros, beating analysts' average forecast of 444 million euros.
On a standalone basis, net profit at TSB jumped 58.5% year-on-year in the quarter.
Overall, Sabadell's net interest income, or earnings on loans minus deposit costs, fell 4.2% to 1.21 billion euros, in line with analyst forecasts.
For 2027, Sabadell expects an NII of 3.9 billion euros without TSB.
($1 = 0.8812 euros)
(Reporting by Jesús Aguado. Additional reporting by Emma Pinedo. Editing by Sumana Nandy and Mark Potter)
Net profit is the amount of money a company earns after all expenses, taxes, and costs have been deducted from total revenue. It is a key indicator of a company's profitability.
Return on equity (ROE) measures a company's profitability relative to shareholders' equity. It indicates how effectively management is using a company’s assets to create profits.
A cash dividend is a payment made by a corporation to its shareholders, usually in the form of cash. It is typically distributed from the company's profits.
Loan growth refers to the increase in the total amount of loans issued by a financial institution over a specific period. It is an important measure of a bank's performance.
A hostile bid occurs when a company attempts to acquire another company against the wishes of the target company's management. This often involves purchasing shares directly from shareholders.
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