Why Sabadell's Strong Standalone Prospects Outweigh BBVA's Takeover Bid

Banco Sabadell's strategic autonomy and robust standalone growth trajectory present a compelling case for rejecting BBVA's €14.8 billion takeover bid. While BBVA touts synergies of €900 million annually and a combined entity with €1 trillion in assets, Sabadell's own financial performance, digital transformation, and shareholder returns suggest its independent value creation far exceeds the proposed terms.

Financial Performance and Shareholder Returns

Banco Sabadell's Q2 2025 results underscore its financial resilience: revenue of €3.67 billion and net income of €486.28 million, with a return on equity (ROE) of 13.94% Understanding Banco de Sabadell, S.A's Income Statement^[3]. Under its 2025–2027 strategic plan, the bank aims to elevate its Return on Tangible Equity (RoTE) to 16% by 2027, driven by cost efficiency and digital innovation Banco Sabadell announces a new strategic plan to deliver 6.3 billion of returns to shareholders over the next three years and increase RoTE to 16 by 2027 as it focusses on accelerating growth and main^[2]. This compares favorably to BBVA's projected post-merger RoTE of 13.5% of the combined cost base, excluding TSB BBVA - Form 425 - Prospectuses and communications^[1].

Sabadell's commitment to shareholder returns further strengthens its standalone appeal. The bank plans to distribute €6.3 billion to shareholders over three years through dividends and buybacks Banco Sabadell announces a new strategic plan to deliver 6.3 billion of returns to shareholders over the next three years and increase RoTE to 16 by 2027 as it focusses on accelerating growth and main^[2]. By contrast, BBVA's offer—valued at a 9% discount to Sabadell's current stock price BBVA Launches €14.8B Hostile Bid for Sabadell Amid Rising Tensions^[4]—locks shareholders into a 13.6% stake in BBVA, diluting their direct exposure to Sabadell's growth.

Digital Transformation and Cost Efficiency

Sabadell's digital initiatives are central to its competitive edge. The bank aims to reduce costs through automation and digital customer acquisition, targeting 15% overall customer growth, with 30% from digital channels Banco Sabadell announces a new strategic plan to deliver 6.3 billion of returns to shareholders over the next three years and increase RoTE to 16 by 2027 as it focusses on accelerating growth and main^[2]. These efforts align with broader European trends toward cashless economies and high-margin fee-based services SAB - Digital Transformation And Urbanization Will Unlock European Banking Potential^[5]. By 2027, Sabadell projects a 40 basis points reduction in its cost of risk, reflecting improved asset quality and operational efficiency Banco Sabadell announces a new strategic plan to deliver 6.3 billion of returns to shareholders over the next three years and increase RoTE to 16 by 2027 as it focusses on accelerating growth and main^[2].

BBVA's synergy claims, meanwhile, hinge on economies of scale in technology and infrastructure. However, the Spanish government's three-year delay on full legal integration pushes these synergies to 2029 BBVA Launches €14.8B Hostile Bid for Sabadell Amid Rising Tensions^[4], undermining their immediacy. Sabadell's standalone digital roadmap, by contrast, is already delivering near-term value.

Strategic Independence and Market Position

Sabadell's independence allows it to pursue targeted market expansion, such as its planned growth in Spain's SME and retail banking sectors. The bank's loan book is projected to expand by 5% annually while maintaining a strong risk profile Banco Sabadell announces a new strategic plan to deliver 6.3 billion of returns to shareholders over the next three years and increase RoTE to 16 by 2027 as it focusses on accelerating growth and main^[2]. This agility contrasts with BBVA's broader but less focused strategy, which relies on cross-border services and a 22% Return on Tangible Equity target for 2025–2028—a metric Sabadell already exceeds BBVA - Form 425 - Prospectuses and communications^[1].

Moreover, Sabadell's dispersed ownership structure (no single investor holds >7% of shares) complicates BBVA's takeover, as retail shareholders may resist the discounted bid BBVA Launches €14.8B Hostile Bid for Sabadell Amid Rising Tensions^[4]. Analysts at Barclays and JB Capital argue BBVA may need to sweeten its offer by 34% to secure approval, yet the bank remains rigidly committed to its current terms BBVA Launches €14.8B Hostile Bid for Sabadell Amid Rising Tensions^[4].

Conclusion

Banco Sabadell's standalone prospects—marked by strong profitability, digital innovation, and generous shareholder returns—outweigh BBVA's takeover bid, which undervalues its future potential. While BBVA emphasizes long-term synergies, Sabadell's strategic autonomy and near-term growth metrics position it as a more attractive investment. Shareholders would be wise to prioritize the bank's independent trajectory over a discounted, delayed merger.