Spain's Banking Market: Sabadell Defies Takeover Rumors with Strong Quarterly Results

Banco Sabadell, Spain's fourth-largest bank by market capitalization, achieved an impressive net profit of 503 million euros in the third quarter, exceeding analysts' expectations, who, in a Reuters survey, had anticipated only 447 million euros. Thanks to lower provisions and stable income from the lending business, the bank achieved a profit increase of 8% compared to the previous year, despite rumors of an imminent takeover bid by rival BBVA. The Spanish banking sector, primarily focused on retail banking, is currently benefiting from increased loan costs, originating from variable interest rates passed on to customers, while keeping interest rates for savers low. However, the decreasing Euribor rates, serving as a reference for mortgage rates, are beginning to influence lending rates. In this environment, Sabadell's net interest income was still able to rise by 0.9% year-on-year to 1.25 billion euros, aligning with analysts' forecasts, although it decreased slightly by 0.7% from the previous quarter.