Oct 28, 2026 earnings call — Record underlying profit and integration of TSB, Webster
Underlying profit for the first nine months reached EUR 11.2 billion, reported as a new record.
Revenue $17.8B (est $18.1B) · EPS $0.26 (est $0.26)
Key quotes
"ONE Transformation continues to drive excellent progress towards a simpler and more integrated model."
"We continue to deliver strong revenue growth across our global businesses, with revenue up 7%."
"We have generated close to 90 basis points of capital this year, helping us to absorb the impacts from TSB and Webster while maintaining a solid capital position."
Analyst Q&A 13
Brazil loan quality and Gravity IT rollout
Q (Francisco Riquel · Alantra): Analyst asked about Brazil: NIM, cost of risk, NPL trends, how interest rate outlook affects targets, and status of the Gravity IT migration.
A: Management said Brazil is a small part of the group and they are de-risking and changing the loan mix, which lowered NII this quarter but should improve cost of risk later. They reduced sensitivity to rates and expect Gravity migration end of this year or early next year, with some supplier delays but still on track.
"This quarter is down basically because of two factors." — Héctor Grisi
Cost savings and capital headwinds
Q (Ignacio Ulargui · BNP Paribas): Analyst asked about cost performance, potential acceleration of ONE Transformation synergies, and upcoming regulatory headwinds to capital at year-end.
A: Management said ONE Transformation is delivering structural savings and improved operating leverage, with retail costs down and digital adoption rising. For capital, they expect supervisory charges of about 5 basis points and an annual operational risk charge of around 8 basis points, but expect year-end capital to be above 12.8% after active asset sales.
"For the fourth quarter, we expect supervisory charges roughly around 5 basis points." — José García Cantera
Brazil minorities, cost of risk, tax, Danish Compromise
Q (Andrea Filtri · Mediobanca): Analyst asked about the buyback of Brazilian minorities, when cost of risk benefit will show, tax rate outlook in Brazil, and Danish Compromise status.
A: Management will continue the buyback on the same terms. They reported three-month cost of risk is stable and expect full-year 2026 cost of risk around 1.15%, improving to about 1.1% by 2027–2028, and they expect a relatively low tax rate in Brazil in coming quarters. The Danish Compromise is in supervisory review and approval is expected within two to three quarters, but it will not be an immediate capital release.
"I think we have quite a good outlook in the sense that three months cost of risk is stable." — Héctor Grisi
Deposit costs and CIB exposures
Q (Ignacio Cerezo · UBS): Analyst asked about deposit environment and impact on customer spreads and NII in Spain, U.K., U.S., and about composition and risks in the CIB loan book.
A: Management said migration to higher-yielding deposits is manageable and customer spreads remain resilient, with active balance sheet management and focus on primacy to protect deposit betas. They said CIB growth focuses on project finance and energy, data center exposure is below 1% of the balance sheet, and they are cautious on energy access and counterparties.
"We are managing deposit betas, and we are protecting them through stronger primacy." — Héctor Grisi
Profit bridge and Spain deposit one-off
Q (Miruna Chirea · Jefferies): Analyst asked expected profit in 2027 versus 2026 and how much comes from underlying growth versus M&A, and asked for loan yield vs deposit cost detail in Spain and the one-off.
A: Management said they expect to be above EUR 15 billion of underlying net profit including M&A for 2026 and are on track to reach their longer-term targets by 2028. They said yield on assets in Spain was down 18 basis points and a nearly EUR 5 billion public institution transaction distorted deposit costs in Q3 but should normalize in Q4.
"We are on track to be above EUR 15 billion of underlying net profit, including M&A for the whole year." — Héctor Grisi
U.K. NII, structural hedge, TSB integration
Q (Marta Sanchez Romero · JPMorgan): Analyst asked about Brazil profit run-rate and about U.K. loan growth, risk appetite, pricing and mortgage/mortgage growth versus Capital Markets Day targets.
A: Management said the U.K. franchise is performing well with cost declines and low cost of risk, aided by a structural hedge and resilient customer spreads. They reported GBP 119 billion in the structural hedge with average duration 2.6 years and yield 3.34%, supporting a constructive NII outlook and TSB integration on track for Part VII in Q1 2027.
"On top of that, we have, as mentioned, as Héctor said, GBP 119 billion in the structural hedge, with an average duration of 2.6 years and a yield of 3.34%." — José García Cantera
Banking taxes and deposit strategy
Q (Sofie Peterzens · Goldman Sachs): Analyst asked about potential new banking taxes in Spain and the U.K., funding strategy for 2027, and whether term deposits will replace wholesale funding.
A: Management said there is no new confirmed information on banking taxes in Spain or the U.K., and emphasized they already pay high taxes in the U.K. They explained the strategy is to increase primacy and transactional deposits via digital and omnichannel services, and that despite competition their deposit beta work means asset repricing should outweigh deposit pressure; they expect NII in Spain up mid-single digits in 2027.
"When we look at NII in 2027, we see NII in Spain up mid-single digits or maybe a bit better than that." — José García Cantera
Repricing lag Brazil and Webster impact U.S.
Q (Antonio Reale · BofA): Analyst asked about time lag in repricing assets vs liabilities in Brazil and ALCO actions, and how Webster changes U.S. rate sensitivity and funding synergies and healthcare franchise sticks.
A: Management said Brazil liabilities reprice much faster: betas around 65% and about 40% of assets rotate each year, and overall rate sensitivity has been cut to about half versus six months ago. For the U.S., Webster integration made the franchise neutral to interest rate changes and provides funding synergies over time, potentially around EUR 50 million or more as liquidity management is consolidated; Webster's HSA business has AUM $25 billion with $9 billion in deposits used by the bank.
"Betas in Brazil are around 65% at the moment, which shows you the structure of the liabilities, which reprice with the CDI for the most part, and around 40% of the assets rotate every year." — José García Cantera
AI, loan growth by region, Poland stake
Q (Britta Schmidt · Autonomous): Analyst asked whether AI could increase competition for deposits, marginal loan growth trends in Spain/U.K./U.S./Brazil for 2026 versus 2027, and plans for remaining Polish stake.
A: Management said AI is not yet a menace but is a medium-to-long-term consideration and they are reviewing policies for agent interactions. They said growth will be profitability-led: they grow where returns exceed cost of equity and expect mid-single-digit group loan growth with country differences; they plan to keep their 9.7% stake in Erste Bank Polska for now.
"At the moment, we don't see it as a menace, but I do see that in the medium to long term, it's going to be a situation." — Héctor Grisi
U.S. Webster effects and Spain NII outlook
Q (Carlos Peixoto · CaixaBank BPI): Analyst asked if Q3 NII split and whether the prior guidance that H2 NII aligns with H1 still holds for Spain, and whether U.S. loan yield drop is driven by Webster.
A: Management said Webster added around EUR 89 million of profit in the quarter and excluding Webster the U.S. business grew strongly with higher CIB, NII and wealth fees and remains on track to reach post-integration RoTE targets. For Spain, NII was up 8% year-on-year in the first nine months and the Q3 one-off in deposits should reverse in Q4, so trends are expected to continue.
"Webster contributed around EUR 89 million of underlying profit in the quarter." — Héctor Grisi
Brazil de-risk timing and integration costs
Q (Alvaro Serrano · Morgan Stanley): Analyst asked when Brazil profits will bottom and when loan growth will resume after de-risking, and asked for the right cost base for U.K. (TSB) given cost performance and synergies.
A: Management said it is too early to set a date for returning to full market growth in Brazil and they will assess conditions and proceed when normalization occurs, with ONE Transformation helping margins and costs. They disclosed restructuring charges: in first nine months they recorded EUR 250 million in Q2 related to TSB and EUR 416 million related to both TSB and Webster, split roughly 40% U.K. and 60% U.S., which should help model the baseline cost base.
"In the first nine months of the year, we had in the second quarter, 250 million related to TSB." — José García Cantera
Mexico NII and asset mix
Q (Hugo Cruz · KBW): Analyst asked about Q3 NII weakness in Mexico, expectations for Q4 loans and deposits, and any replicating portfolio updates.
A: Management said Mexico continues to deliver strong profitability with underlying RoTE 21.2% and NII year-to-date up 4% driven by volume growth and active balance sheet management. They noted Q3 NII was down 2% quarter-on-quarter due to lower CIB market activity and they are shifting toward commercial, SMEs and CIB while keeping unsecured retail more prudent; cost of risk is 2.73% and NPLs improved.
"As you have seen, Mexico basically continues to deliver very strong profitability levels." — Héctor Grisi
Mexico deposit competition and Spain deposit mix
Q (Borja Ramirez · Citi): Analyst asked if fintech deposit pressure in Mexico is easing and outlook for deposit costs, and asked about deposit volumes and mix between current and term deposits in Spain.
A: Management said Mexican competition from neobanks is strong but top banks are gaining deposits and their primacy strategy and app upgrades are helping; cost of deposits eased and they expect to continue focusing on transactional deposits. For Spain they showed average deposit balances have grown year-on-year despite competition and expect low to mid-single-digit deposit growth next year with only small movements from current to term accounts.
"In the fourth quarter of 2025, EUR 280 billion, EUR 280 billion in the first quarter of 2026, EUR 282 billion, EUR 289 billion in the third quarter." — José García Cantera