By Jesús Aguado
MADRID (Reuters) -Sabadell raised its shareholder distribution target on Friday as it seeks to fend off a takeover attempt by rival BBVA, and also posted quarterly and full-year record net profit, driven by strong performances in both Spain and Britain.
Spanish banks have benefited from higher loan costs, primarily tied to variable rates, which have been passed on to customers, while savers have received smaller interest rate hikes.
As part of its strategy to promote its standalone business, the lender also announced a shareholder payout policy of 3.3 billion euros ($3.42 billion) based on 2024 and 2025 results, up from the previous target of 2.9 billion euros.
In the fourth quarter, Sabadell reported a 75% year-on-year surge to 532 million euros as net profit, above the 436 million euros expected by analysts.
Net profit at Sabadell, the country’s fourth-largest lender by market value, rose 37% to 1.83 billion euros due to higher revenue in Spain, and surpassed analysts’ estimate of 1.73 billion euros.
Net profit at its Spain-based unit rose 65% year-on-year in the fourth quarter, while net profit more than tripled at its British unit TSB.
Higher earnings and a positive impact of 109 million euros in 2024 helped Sabadell raise its return-on-tangible equity ratio, a measure of profitability, to 14.9% at end-2024 from 13.2% in September.
Excluding one-offs, the recurrent ROTE rose to 14% and it forecast profitability to stay around 14% for 2025 and to be above that level in 2026.
“We are starting the new year with confidence and ambition, firm in our conviction that Banco Sabadell’s standalone strategy will continue to generate recurring and sustainable value for shareholders, customers, our colleagues and society as a whole,” Sabadell Chairman Josep Oliu said in a statement.
Rejecting BBVA’s offer, Sabadell has said the proposal significantly undervalues its growth potential.
Part of the shareholder distribution included a 1 billion share buyback against 2024 earnings and the distribution of 1.1 billion euros in cash as part of its 60% payout policy, at the upper-end of its 40% and 60% payout policy.
Against 2025 results, Sabadell said it would pay 1.2 billion euros in dividends and share buybacks.
($1 = 0.9639 euros)
(Reporting by Jesús Aguado; Editing by Inti Landauro and Sherry Jacob-Phillips)
