Commercial activity continues to build momentum
Strong commercial momentum led to a year-on-year increase in performing loans of 4%, pushing them to 124,913 million euros. In Spain, growth of 3% has been recorded year-to-date, reaching 106,434 million euros, with increases across all segments. Lending to SMEs and large corporates stands at 45,599 million euros, representing an increase of 3% during the financial year.
Performing mortgage loans have also followed a positive trend, increasing to 40,716 million euros (+3.5% year-on-year), with new mortgages 5% higher than in the previous quarter. This continued commercial momentum is also reflected in credit for consumption, which stands at 5,880 million euros (+12.7% year-on-year), with new consumer loans recording a quarterly increase of 13%.
The boost recorded by the business is also evident in customer funds, which have recorded a year-on-year increase of 5.6% at the Group level, climbing to 189,449 million euros. Growth was recorded by both on-balance sheet funds (+4.6% year-on-year) and off-balance sheet funds (+8.1% year-on-year). Within the latter, it is worth highlighting the positive trend of mutual funds, driven by a positive flow of net subscriptions, and good asset management activity.
Rising revenues and contained recurring costs
Not including TSB, Banco Sabadell delivered core banking revenue (net interest income plus fees and commissions) of 3,677 million euros between January and September, with 1,260 million of that achieved in the third quarter, when it recorded an increase of 2.4% compared to the second quarter, underpinned by momentum in commercial activity. Those revenues have returned to year-on-year growth (+0.1%) and are expected to accelerate over the coming quarters.
Net interest income has continued to improve since the second quarter of the year, increasing to 920 million euros, up 2% in the quarter. This was primarily driven by larger credit volumes and further helped by disciplined management of interest rates. Having delivered 2,694 million euros in NII between January and September, the Bank expects to close the financial year with a full-year increase of around 1%.
Following the same trend, income from fees and commissions improved by 3.7% compared to the second quarter, reaching 340 million euros, and enabling the delivery of 2.1% year-on-year growth to 983 million euros between January and September. This performance reflects the larger contribution from asset management fees following the extension of the agreement with Amundi. This trend will also continue into the last quarter of the year, allowing the Bank to close the financial year with growth in the region of 4%.
Total costs amounted to 1,797 million euros between January and September and included 88 million euros of non-recurring costs, as a result of the early retirements plan launched in Spain. This plan was completed in the first half of the year and will deliver annualised gross savings of 40 million euros from 2027 onwards. A portion of the 20 million euros of those savings expected to be obtained during the second half of 2026 has already started to materialise. As a result, recurring costs remained stable during the quarter (−0.1%) and are expected to grow by around 2% for the full year 2026, above previous expectations.
Profit and loss between January and September includes several one-off impacts. On the one hand, the sale of TSB generated a net gain of 322 millioneuros after tax (340 million gross). On the other hand, other impacts have been recognised, including the early retirements plan in Spain. The total balance has resulted in a positive contribution of 201 million euros net of the income statement. In parallel to this, TSB contributed 79 million euros in profit during the first four months of this year, remained within the Group.
As for asset quality, the NPL ratio continues to improve and has fallen to 2.4% in the third quarter of 2026, compared to 2.47% in the previous quarter and 2.75% twelve months earlier, with stage 3 coverage including total provisions rising to 70.1%. This positive trend is a result of the accelerated reduction of non-performing assets, which fell by 140 million euros during the quarter and by 477 million euros over the past twelve months, to currently stand at 3,886 million euros. Total provisions reduced by 13% in the quarter, while cost of risk remained at 40 basis points, which is the figure estimated for the full year.