Sabadell Reports Q3 Profit Increase Amid Takeover Bid

MADRID (Reuters) – Spain's Sabadell announced an 8% rise in Q3 net profit from the same period in 2023, fueled by lower provisions and stable lending income while facing a takeover bid from rival BBVA.

The country's fourth-largest bank by market value reported a record quarterly net profit of 503 million euros, surpassing analysts’ expectations of 447 million euros, according to a Reuters poll.

Spanish banks primarily serve as retail lenders and have benefited from higher loan costs, reflecting floating rates passed to customers, while maintaining lower rates for savers.

However, declines in the Euribor, the benchmark for setting mortgage loan prices, are beginning to affect lending rates.

In this context, Sabadell's net interest income (NII), the difference between loan earnings and deposit costs, reported a year-on-year increase of 0.9% to 1.25 billion euros, aligning with analysts' predictions. Nevertheless, NII fell 0.7% compared to the previous quarter.

($1 = 0.9202 euros)