Investing.com -- Banco Sabadell's recurring third-quarter profit rose 13% from the previous quarter to €405 million as core revenue returned to growth, but the Spanish lender said it now expects recurring costs to rise by about 2% in 2026, above its previous forecast. It also announced an interim dividend of €325 million.
Core banking revenue, comprising net interest income and fees, rose 2.4% from the second quarter to €1.26 billion, driven by stronger commercial activity. Net interest income increased 2% to €920 million, while fees rose 3.7% to €340 million.
Nine-month core revenue was €3.68 billion, up 0.1% from a year earlier. The bank expects net interest income to rise by about 1% for the full year and fees to increase by about 4%.
Recurring costs fell 0.1% from the second quarter. Nine-month recurring costs rose 3.8% year-on-year to €1.71 billion and included €88 million in non-recurring charges related to an early retirement plan in Spain. The plan is expected to deliver annual gross savings of €40 million from 2027.
Nine-month net profit was €1.38 billion, down 1% from a year earlier. It included a net gain of €322 million from the sale of TSB and €79 million in profit from TSB, which was part of the group until its sale. Recurring net profit for the nine-month period was €1.10 billion.
The interim dividend of €0.07 per share, totalling €325 million, will be paid on December 29. The bank also has €57 million, or 17%, of a €331 million share buyback launched in July remaining to be completed.
Sabadell's fully loaded Common Equity Tier 1 (CET1) ratio, a measure of solvency, stood at 13.12%.
Recurring profitability, measured by return on tangible equity (RoTE), rose to 14.2% from 13.6% in June. Chief executive Marc Armengol said the bank's "strong position allows us to continue generating value for our clients and shareholders."
Performing loans rose 4% year-on-year to €124.91 billion. In Spain, they reached €106.43 billion, up 2.1% from a year earlier. Consumer lending in Spain grew 12.7% year-on-year, while lending to small and medium-sized enterprises and large corporates fell 0.4%.
The non-performing loan ratio fell to 2.4% from 2.47% in the previous quarter and 2.75% a year earlier. The cost of risk remained at 40 basis points, in line with the level estimated for the full year.
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