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SANTANDER: 3Q’25 RESULTS (ANÁLISIS BANCO SABADELL)

3Q'25 vs. 3Q'24 Results
NII: € 11.1 Bn (-1.1% vs +1.1% BS(e) and -0.8% consensus);
Total Revenues: € 15.27 Bn (+0.9% vs +1.1% BS(e) and +0.7% consensus);
Operating Income: € 9 Bn (+2.4% vs +3.1% BS(e) and +1.6% consensus);
Net Profit: € 3.5 Bn (+7.8% vs +5.3% BS(e) and +5.8% consensus).

3Q'25 vs. 2Q'25 Results
NII: € 11.1 Bn (-2.1% vs +0.1% BS(e) and -1.8% consensus);
Total Revenues: € 15.27 Bn (-1.3% vs -1.1% BS(e) and -1.5% consensus);
Operating Income: € 9 Bn (-1.1% vs -0.4% BS(e) and -1.8% consensus);
Net Profit: € 3.5 Bn (+2.1% vs -0.3% BS(e) and +0.2% consensus).
3Q’25 results slightly better than expected (+2% better in Net Profit) thanks to good trading revenues (+5% vs. expectations ), costs (-0.6% vs. expectations), provisions (-2.4% thanks to Retail and Corporate Centre) and taxes (-9% on lower effective tax rate of 25.1%). 16.1% ROTE vs. 16.5% guidance’25 (with the bank expecting the positive seasonality of the 4Q’25 to benefit this performance). 13.1% CET1 vs. 13% in 2Q’25 vs. 12-13% guidance’25. No relevant regulatory impacts were reported on the quarter. 113bps of COR vs. 114 in 2Q’25 and 2.92% NPL ratio (vs. 2.91% in 2Q’25).
The bank kept its 2025 Guidance unchanged: (i) € ~62 Bn of revenues’25, meaning +0% growth vs. +0.7% BS(e) and -0.1% consensus); (ii) mid/ single digit growth in fee revenues vs. +2.6% BS(e) and +3.4% consensus; (iii) Drop in costs vs. 2024 vs.-0.7% BS(e) and -0.8% consensus; (iv) COR 115bps vs.116 BS(e) and 119 consensus; (v) CET1 12-13% vs. 13.6% BS(e) and 13.5% consensus; (vi) ROTE 16.5% vs. 15.7% BS(e) and consensus; (vii) buybacks worth € 10 Bn (8% yield) in 2025-2026 (€ 1.7 Bn under way).
NIM fell from 2.76% in June’25 to 2.69%, hit by the FX distortion in Argentina. Lending grew +0% in Retail, +2% in Consumer, +5% in CIB. Deposits grew +4% in Retail, +5% in Consumer, +8% in CIB. In NII, we highlight the solid performance in Consumer, CIB and Retail Spain due to lower deposit costs. Worse in Brazil due to the negative sensitivity to rate hikes.
Total Revenues by divisions: (i) Retail grew +1% thanks to the positive performance in most countries, with strong fee revenues; (ii) Consumer grew +3%, with NII benefiting from the lower funding costs; (iii) CIB beat record revenues (+6% growth) thanks to Global Markets; (iv) Wealth grew +13% thanks to fee revenues and the good performance of assets under management and (v) Payments grew +19% thanks to the strong activity.
Given the lack of surprises, we think the reception could have a slightly negative slant. SAN has performed well over the past six months (+32% vs. +23% sector), with a more moderate estimates revision by the consensus than the rest of banks (+7% on average over the 2025-27 period vs. +9% peers). Despite everything, the stock still has upside (1.4x P/TE’25e; 9.7x P/E’25e) for a ROTE’25 of 15.5%). OVERWEIGHT. T.P.: € 10.15/sh. (upside 18%)