Banco Sabadell shares jump 4% as H1 profit hits €971m and buyback announced

Half-year figures

Banco Sabadell posted a net profit of €971 million for the first six months of 2026, a marginal 0.5% decline from the €975.9 million earned in the same period of 2025. The figure includes a four-month contribution from TSB, the British retail bank it sold to Banco Santander on 1 May, as well as several extraordinary items. Stripping out TSB and all one-offs, recurring profit came to €691 million, a drop of 14.1% year-on-year. The bank stressed, however, that recurring earnings turned a corner in the second quarter, rising 8.4% compared with the first three months of the year.

TSB sale and extraordinary impacts

The disposal of TSB produced a net capital gain of €322 million after tax. Offsetting this, a voluntary early retirement scheme in Spain cost €88 million, already fully executed and expected to deliver lasting efficiency savings. The net balance of all extraordinary items was a positive €201 million. TSB’s own contribution to group profit was €79 million for the four months it remained within the perimeter, down from €171 million in the first half of 2025. In May, Sabadell distributed an extraordinary cash dividend of €0.50 per share to shareholders from the sale proceeds.

Quarterly revenue recovery

Total banking revenue, net interest income plus fees, reached €2,417 million in the half, 1.7% below the prior-year level. The second quarter, however, showed a clear inflection: revenue climbed to €1,230 million, a 3.6% sequential increase. Net interest income rose 3.4% quarter-on-quarter to €902 million, supported by expanding credit volumes, while fee income advanced 4% to €328 million. For the full six months, net interest income stood at €1,774 million (down 2% year-on-year) and fees at €643 million (down 0.9%).

CEO Marc Armengol said the results “confirm the strength” of the bank’s standalone project and that revenues “are increasing and will increase more in the coming quarters thanks to the strong momentum of commercial activity.”

The results confirm the strength of the project. Revenues are increasing and will increase more in the coming quarters thanks to the strong momentum of commercial activity.

Capital reduction and new buyback

Simultaneously, Sabadell completed a capital reduction by cancelling 119.8 million own shares with a nominal value of €0.125 each, representing 2.45% of its share capital. It also announced a fresh share repurchase programme of €331 million, equivalent to roughly 2.1% of the capital, due to start next week. The stock reacted positively, gaining 4.02% to €3.39 in early trading on the Madrid exchange, making it one of the session’s strongest performers.

Cost control and profitability outlook

Total costs for the half amounted to €1,227 million, including the €88 million non-recurring charge for the Spanish early retirement plan. With that programme now complete, the bank expects efficiency to improve. Recurring return on tangible equity (RoTE) stood at 13.6% at the end of June. Management forecasts this metric will rise to 14.5% by December 2026 and to 16% in 2027, underpinned by cost discipline, higher revenues and strong asset quality. The bank also reiterated its expectation of full-year net interest income growth above 1%.