Financial Data and Key Metrics Changes - The tangible book value per share plus dividends increased by 17% year over year and 4.5% quarter over quarter [3] - The net attributable profit exceeded €2.5 billion, although it decreased compared to the previous quarter due to higher inflation in Turkey and one-off positive impacts in the second quarter [4] - The CET1 capital ratio improved by 8 basis points to 13.42%, providing capacity for increased shareholder remuneration [5] - Cumulative profits for the first nine months reached almost €8 billion, a 4.7% increase year over year [5] Business Line Data and Key Metrics Changes - Core revenues showed strong growth, with net interest income and fees growing 18% and 15% year over year, respectively [6] - In Spain, net interest income grew by 3.2% quarter on quarter, driven by strong loan growth in profitable segments [18] - In Mexico, net interest income grew by 3.3% quarter on quarter, supported by robust lending activity [21] - Turkey's net attributable profit increased by nearly 50% year over year, driven by higher core revenues [23] Market Data and Key Metrics Changes - Loan growth in Spain accelerated to 7.8% year over year, while Mexico's loan growth was 9.8% year over year [9] - The cost of risk in Mexico improved, with expectations to remain below 340 basis points [23] - The cumulative cost of risk in South America stood at 243 basis points, in line with full-year guidance [26] Company Strategy and Development Direction - The company aims to resume shareholder remuneration programs, including a nearly €1 billion share buyback program and a record interim dividend of €0.32 per share [15] - The strategic focus includes acquiring new customers, with 8.7 million new customers acquired in the first nine months of 2025, 66% through digital channels [16] - The company plans to double its Corporate & Investment Banking (CIB) business over the next four years, targeting a revenue growth of around 20% [70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future revenue and profit growth, citing stability in customer spreads and strong loan growth [12] - The company expects interest rates to stabilize, with limited room for further cuts, which will support core revenue growth [11] - The management highlighted the resilience of the Mexican economy, with an upward revision of GDP growth forecast to 0.7% for 2025 [21] Other Important Information - The company reported a solid efficiency ratio of 38.2%, improving from the previous year [12] - The asset quality metrics showed improvement, with the cost of risk standing at 135 basis points, better than guidance [13] Q&A Session Summary Question: Loan book growth in Spain and cost of risk in Mexico - Management noted that corporate loan growth in Spain is strong, particularly in mid-sized companies, while mortgage growth is below average due to pricing concerns [34] - The cost of risk in Mexico is expected to improve, with positive macro adjustments influencing guidance [37] Question: Sabadell transaction and capital distribution outlook - Management closed the chapter on the Sabadell transaction, viewing it as a missed opportunity but focusing on future growth [44] - The capital target is set at 11.5% to 12%, with plans to distribute excess capital back to shareholders [46] Question: Margins in Spain and Mexico - Management indicated that customer spreads in Spain are stabilizing, with expectations for continued resilience in Mexico despite falling interest rates [53][56] Question: Group costs and CIB ambitions - Management emphasized a focus on cost-to-income ratios and aims to double the CIB business over the next four years [66][70] Question: Competitive landscape in Mexico - Management acknowledged increased competition but highlighted BBVA's strengths, including strong customer relationships and market positioning [74]

Summary of Banco de Sabadell Capital Markets Day Company Overview - **Company**: Banco de Sabadell - **Event**: Capital Markets Day held on July 24, 2025 - **Key Speakers**: CEO Cesar Gonzalez Bueno, CFO Sergio Palabestino Core Industry Insights - **Economic Context**: Spain's economy is expected to grow above its peers, with GDP growth projected at around 2% and inflation at 2% over the next three years [doc id='62'][doc id='63'] - **Banking Sector Growth**: Private sector credit and deposits are expected to grow at a CAGR of 4%, aligning with nominal GDP growth [doc id='64'] Strategic Pillars 1. **Profitability and Capital Generation**: - Net profit increased from €200 million to €1.6 billion from 2021 to 2024, with a target return on tangible equity (ROTE) of 16% by 2027 [doc id='4'][doc id='5'] - Capital generation is expected to improve significantly post the sale of TSB, with an extraordinary distribution of 400 basis points anticipated [doc id='7'] 2. **Growth Strategy**: - Focus on prudent growth in Spain, with moderate market share gains while ensuring value generation [doc id='8][doc id='9'] - Projected growth in household lending and corporate lending at around 4% [doc id='12'] 3. **Execution and Risk Management**: - Enhanced risk models and pricing strategies to improve customer experience and conversion rates [doc id='13'][doc id='14'] - Significant improvements in the quality of risk acceptance, with a 60% reduction in consumer loan defaults [doc id='19] Financial Performance and Projections - **2025 Guidance**: - Expected net interest income (NII) of €3.6 billion, with fees and commissions projected to grow mid-single digits [doc id='75'] - Cost of risk guidance improved to 35 basis points, reflecting strong asset quality [doc id='74] - **Long-term Projections**: - NII expected to reach €3.9 billion by 2027, with a continued focus on maintaining a healthy cost of risk at 40 basis points [doc id='76'] - ROTE projected to be 16% by 2027, driven by improved asset quality and cost management [doc id='77] Shareholder Value Creation - **Capital Distribution**: - Total expected distribution of €6.3 billion over three years, including an extraordinary dividend of €2.5 billion from the sale of TSB [doc id='60] - Commitment to a 60% payout ratio, with cash dividends expected to increase in 2025, 2026, and 2027 [doc id='61] Key Risks and Considerations - **Market Conditions**: - Interest rates are expected to normalize, with ECB rates projected to stabilize around 2% by mid-2027 [doc id='65] - The bank's funding structure is robust, with a high percentage of non-remunerated deposits, which helps manage cost dynamics [doc id='70] Additional Insights - **Digital Transformation**: - Significant investments in digital capabilities to enhance customer engagement and operational efficiency [doc id='14][doc id='48] - The bank's digital customer base is growing, with increased engagement metrics [doc id='48] - **Incentive Structures**: - New incentive models focused on value creation and capital generation are being implemented to align employee performance with strategic goals [doc id='50][doc id='55] This summary encapsulates the key points discussed during Banco de Sabadell's Capital Markets Day, highlighting the company's strategic direction, financial performance, and outlook for the future.