Banco de Sabadell Stock Rises on New Buyback and Strong Core Profit

Shares of Banco de Sabadell SA rallied on Friday after the Spanish lender announced a new share buyback program and posted resilient first-half financial results that pointed to strengthening momentum in its core operations.

Earnings and Shareholder Returns

Banco de Sabadell reported a first-half net profit of €971 million, a slight 0.5% decrease year-over-year, according to a financial release on July 24. The result included a €322 million after-tax capital gain from the sale of its UK subsidiary TSB, which was completed on May 1.

More importantly for investors, the bank's recurring profit, which excludes the TSB contribution and other one-off items, reached €691 million. This figure marked a notable 8.4% sequential increase in the second quarter compared to the first, indicating an acceleration in the underlying business.

Alongside the earnings, Sabadell unveiled two key capital return initiatives:

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• A new €331 million share buyback program, representing approximately 2.1% of the bank's share capital. The plan has been authorized by the European Central Bank and filed with Spain's securities regulator, the CNMV.
• The formal completion of a capital reduction on July 23, which cancelled nearly 120 million treasury shares. This action is immediately accretive to earnings per share for the remaining stockholders.

Market Reaction

In response to the combination of resilient headline profit, accelerating core earnings, and aggressive shareholder returns, Banco de Sabadell's stock climbed 3.7% to €3.375 in trading.

The bank's performance was also supported by a constructive backdrop in the broader Spanish equity market, with the IBEX 35 index trading higher. With no major competing announcements from peer lenders, the market's focus remained squarely on Sabadell's positive newsflow.