Fitch says Sabadell revenue diversification to rise with BPCE linkup

The following is a press release from Fitch Ratings: Fitch Ratings-Paris/Barcelona-07 October 2026: Groupe BPCE's (GBPCE) acquisition of a minority stake in Banco de Sabadell, S.A. is set to support business opportunities for both banks in Spain and enhance Sabadell's revenue diversification over the medium term, Fitch Ratings says. GBPCE acquired a 7% stake in Sabadell through market purchases and has indicated that it does not intend to increase its holding above 9.9%. It views the investment as a long-term, stable strategic shareholding and intends to seek board representation, subject to regulatory approvals. The transaction was agreed on friendly terms and followed the failure of Banco Bilbao Vizcaya Argentaria, S.A.'s unsolicited offer for Sabadell a year ago. GBPCE has become one of Sabadell's largest shareholders, along with BlackRock Inc. (about 8%) and Zurich Insurance Group Ltd (5%), supporting the stability of the bank's ownership structure. It could also make future unsolicited acquisition attempt more difficult to execute. GBPCE and Sabadell will explore strategic cooperation opportunities, particularly in corporate and investment banking, leasing, consumer lending and international business. Sabadell has a more limited presence in these businesses than in its core SME banking franchise, where it has an established market position. The cooperation could therefore broaden Sabadell's product offering, enhance its capacity in selected activities and support greater business and revenue diversification organically and at a reasonable cost. Sabadell is the fourth-largest bank in Spain, with market shares of about 8%, although there is a significant gap in scale relative to the three largest banks. Sabadell's revenue diversification is also weaker. Sabadell and GBPCE expect to formalise a strategic agreement in 2027. The benefits of such an agreement could gradually feed through over the medium term and support Sabadell's credit profile. We expect the acquisition to have only a modest capital impact on GBPCE. It is part of a wider strategy for GBPCE to diversify outside of French retail banking, which has underperformed other European retail banking markets in recent years. GBPCE's expansion strategy includes organic and inorganic growth, as recently seen with the acquisition of Novo Banco, S.A. in Portugal (see Fitch Affirms Groupe BPCE at 'A'/Stable on Novo Banco Acquisition ) and former Societe Generale Equipment Finance activities (see Sale of SG Equipment Finance to GBPCE Is Neutral for SG, Slightly Positive for GBPCE ). GBPCE benefits from ample capital buffers, which it seeks to deploy in more profitable activities. The deal in Spain is consistent with GBPCE's strong position in SMEs in France and Portugal. The transaction is also part of a wider move of increasing European M&A, including renewed appetite for cross-border M&A, where French banks have actively participated (see French Banks' M&A to Support Business, Earnings