RBC Updates Model for Banco Sabadell Ahead of Q2 Results

RBC Capital Markets adjusted its earnings projections for Banco de Sabadell (SAB.MC) as part of a model update before the Spanish lender is scheduled to release its second-quarter earnings on July 24. In a Wednesday note, the research firm forecasts a 1.6% full-year 2026 net interest income growth, excluding the former British subsidiary TSB, against the bank's guidance of over 1%. Noting that its 2027 estimates remain "largely in line" with the company's midterm goals, analysts expect a 2027 net interest income of 3.93 billion euros, driven by expected loan and deposit compound annual growth rates for 2024 to 2027 of 4.8% and 3.7%. "Our FY27E ex TSB underlying profit before tax remains broadly unchanged, as lower core revenues and higher provisions and impairments are broadly offset by lower recurrent total costs. We make no material changes to our loan or deposit growth estimates and maintain our [net interest margin] assumptions unchanged," RBC wrote. The research firm largely maintained its shareholder return outlook, forecasting 2.53 billion euros in total distributions for 2026 to 2027, compared with the bank's 2.5 billion-euro target. This forecast excludes the TSB.