MadridAvalanche of historic profits from Banco Sabadell and BBVA in the middle of a hostile takeover. This Thursday, before seven in the morning, the two financial entities presented their results up to the third quarter (between January and September), and both took the opportunity to show muscle.
At the outset, Banco Sabadell has registered a historic profit of 1,295 million euros up to September, which represents a 25.9% increase compared to the same period of the previous year. The figure also surpasses the earnings recorded in the whole of 2023, when for the first time in its history it passed the barrier of 1 billion profits. For its part, BBVA has obtained a profit of 7,622 million euros in just nine months, which is equivalent to a year-on-year improvement of 27.9%.
The hostile takeover of BBVA in Sabadell has not only become a great race for the dividend, but also a great race for profits. Sources in the sector point out that the results recorded this third quarter will have all the eyes of investors and analysts on them because they are already drawing the scenario with which the two banking entities can close this 2024. A few minutes after the opening of the market, BBVA Sabadell fell more than 1% on the stock market. Specifically, at 9:15 this morning, Sabadell’s share fell by 1.73%, and BBVA’s by 1.17%.
In addition, this month of November will be decisive for the course of the auction. The National Commission for Markets and Competition (CNMC) has already confirmed that it will make a decision on whether to resolve the analysis of the merger in phase 1, as BBVA wants, or continue with the study on competition and open the phase 2, thesis held by Banco Sabadell because it would mean that the CNMC has detected problems.
Change of financial director at Sabadell
“The entity demonstrates once again its strong ability to generate profits and capital on a recurring basis, mainly thanks to the good behavior of the interest margin, the increase in volumes, investment in companies, SMEs and individuals, as well as the positive evolution of the quality of the assets”, defended Sabadell in a press release.
Specifically, the total income (gross margin) of the bank has grown to 4,756 million euros between January and September of this 2024, 4.3% more in year-on-year terms. Of these, interest income (interest margin) reached 3,746 million, and commission income 1,010 million, representing a slight drop of 3.6%. Finally, the profitability or ROTE has grown to 13.2%, leaving behind the 11.5% with which it closed in 2023.
The entity of Valais origin has also announced a significant internal change: until now the financial director, Leopoldo Alvear, has submitted his voluntary resignation to join Société Générale and will be replaced by Sergio Palavecino Tomé, as reported by the bank at the National Securities Market Commission (CNMV). Alvear has been a key figure in the recovery of the share price in the last four years and was the right-hand man of the CEO of the Catalan bank, César González-Bueno. Among the merits of Alvear stood out the wide credibility it had among the funds, a key factor in a takeover where the major shareholders are decisive.
“Optimists about the future”
“Beyond this quarter’s results, we look to the future with optimism. We expect to increase growth in profitable credit and gain scale […] We are fully confident that the transaction with Banco Sabadell will become a reality in the coming months,” said BBVA’s CEO, Onur Genç, in a statement.
In the case of the Bilbao bank, total income has soared to 26,161 million euros, 18.4% more. Of these, the interest margin is flat, with a growth of 6% (18,661 million until September), while commission income registered a strong year-on-year increase of 25% (5,754 million between January and September). In terms of profitability, BBVA has recorded a record ROTE of 20.1%.
