Banco de Sabadell Reports Strong Q3 Results

Shares of Banco de Sabadell saw a surge on Thursday following the announcement of its interim dividend and the release of its impressive third-quarter financial results.

At 0853 GMT, the shares traded 4.3% higher at EUR1.08.

During the third quarter, Sabadell reported a net profit of 464 million euros ($490.3 million), a significant increase from the prior year's figure of EUR317 million. This growth can be attributed to the bank's gross operating income, which saw a 17% increase to reach EUR1.64 billion.

Furthermore, Sabadell announced that it would be paying an interim dividend of EUR0.03 per share, representing a 50% increase compared to the previous year.

In addition to these positive developments, Sabadell also raised its guidance for the year, now expecting net interest income growth of around 25%, up from the previous estimate of greater than 20%. The bank also forecasted a return on tangible equity (RoTE) of around 11.5%, an improvement from the previous estimate of around 10.5%. Importantly, the bank anticipates further improvement in its RoTE by the year 2024.

Analysts at Citi praised Sabadell's strong performance, with the bank's profit surpassing expectations by 23%. The increase in net interest income during the quarter was identified as a key driver for this success. Citi analysts further noted that the improved guidance suggests an approximate 16% upgrade to earnings per share consensus.

Overall, Banco de Sabadell's third-quarter results and optimistic outlook for the future showcase the bank's resilience and potential for continued growth.