Begins the fourth quarter earnings season in Spain, as always, with the Ibex 35 banks under the spotlight. Financial institutions closed the first nine months with a profit slightly higher than 25.4 billion euros, an increase of 7.4% which reflected that the income statements barely suffered after the drop in interest rates, also supported by the good evolution of the economy or the containment of bad debts. On the other hand, data from the Bank of Spain showed that Profitability fell in the third quarter of last yearfrom 14.5% in the second quarter to 14.2%, although it remained above 14% and the average of recent quarters. The bar is very high, so any slip-up could lead to harsh stock market punishment.
It is no wonder, since, on average, Ibex banks revalued by 103% in 2025almost three times more than the 36% experienced in 2024. This, they explain from Renta 4 Banco, with some «adjusted» ratings and, in «many cases», with «little or no potential at target price». And 2026 has started in a «more timid» way for the entities, but that does not mean they are less optimistic. According to the Spanish entity, the accounts for the year as a whole «should confirm the solidity of the interest margin» in the second half of the year, supported for another quarter «by the expected good evolution of credit volumes» in a «seasonally strong» fourth quarter, as well as the good management of the cost of both retail and wholesale liabilities. This, they add, «will act as support» to an interest margin where the profitability of the credit portfolio «will continue to be under downward pressure due to the repricing process, although with less intensity, and giving signs of a change in trend for coming quarters.» They also do not rule out seeing net commissions «better than expected.» On the contrary, these analysts predict that Spanish banks will show a decrease in interest margin of around 2%, whether the international business or only the domestic business is included, although «far» from the falls that were expected at the beginning of the year. However, these experts predict that the market’s attention will be more on the future than on the past. «The figures for the year as a whole will confirm the guidelines, and should allow lay the foundations for 2026 in which results should continue with a positive trend«explains Nuria Álvarez, equity research analyst. According to this strategist, it will be «important» to check the entities’ vision of the expected evolution of the cost of retail liabilities and the expected cost of risk. In both cases, this expert explains, they are at levels «that seem to face a future with no room for further improvements, and this means that entities are left without two important levers that have supported the 2025 results.»We maintain our positive opinion about the sectorwhich in 2026 will continue to benefit from the gradual recovery of the 12-month Euribor, with a positive effect on the repricing process that should occur in the second half, the good performance of volumes, the control of provisions and net commissions that should consolidate its recovery. The annual guides tend to act as a scale for the situation of the sector, in this sense we consider that the bias of the 2026 guides will be positive and could support quotes, allowing for the current market uncertainty«says Álvarez.
HOW WILL EACH ONE DO IT?
As usual, Bankinter will inaugurate the results season with the presentation of its accounts next Thursday, January 22. Renta 4 expects the orange bank increase its profit by 29% in the fourth quarter, to 287 million euroswith 4% year-on-year growth in net interest income thanks to increased volumes. On the other hand, Álvarez foresees that the ‘fully loaded’ CET 1 capital ratio will go from 12.94% in the third quarter to levels closer to the target range (12.4-12.6%). Looking to the future, this expert hopes that 2026 guidelines ‘maintain positive tone’with mid-digit volume growth as in 2025, target customer margin «contained» at 2.7% (they estimate it will be 2.68% in 2025), a «controlled» cost of risk and capital generation that allows the CET 1 ratio «to remain within the target range.» For all these reasons, Renta 4 slightly modifies its estimates and raises its target price to 13.6 euros per sharealthough it continues to recommend ‘underweight’ their actions. The next to walk down the results catwalk will be CaixaBankwhich will present its accounts on January 30. Rent 4 expected profit decreases to 1,306 million euros in the last three months of the year, that is, 15% less than a year ago. The Spanish firm also projects an interest margin that will be 1% lower in the quarter and 3.8% lower in the full year, as well as a contained evolution of operating expenses and a decrease in provisions of up to 8%. «The entity has already announced that will revise upwards some of the income objectives of its Strategic Plan. We do not rule out that they could surprise in interest margin in 2025 or in the line of income from services supported by success commissions not included in our estimates,» says Álvarez. Renta 4 reiterates its advice of ‘keep’ CaixaBank shares, to which it gives a target price of 10.25 euros per share, five cents less than a month ago. After the Catalan bank it will be the turn of Unicajawhich will publish its accounts on February 3. whose benefit between October and December could reach 144 million of euros, according to Renta 4, which would mean an advance of 17%. The Spanish firm believes that the interest margin of the Andalusian entity will increase by 1.1% in the quarter, up to 379 million, which would represent the second consecutive quarter of improvement and would confirm «a year from less to more», with the first quarter of the year marking the bottom. For the full year, the margin would amount to 1,496 million euros, meeting the profit guide. «The 2026 guides offered by the company should not hold any surpriseswith a positive bias and confirming a trend aligned for meet the objectives of the 2025-27 Strategic Plan«, explains Álvarez. Renta 4 recommends ‘keep’ the value, whose target price is located at 2.66 euros. After the smallest bank by capitalization, comes the largest. February 4th is the turn of Santanderfor which Renta 4 projects a net profit of 3,442 million (+5%) in the quarter. This, Álvarez points out, would raise the net profit to 13,779 million euros (+9%), figure that would be slightly below the guidelines (14,000 million), but that would allow it to meet the objective of placing the profitability (ROTE) close to 20%. They also predict that the interest margin will fall by 3% throughout the year, but also that it will be compensated by the «good performance» of net commissions, as well as the results from financial operations and other income. On the contrary, they do not expect there to be much information regarding the ‘guidance’ for 2026, since the company will celebrate an Investor Day on February 25. At this meeting, the Cantabrian bank will announce the objectives of the next three years and will specify its objectives for the current year, with the possible improvement in the shareholder remuneration policy as a backdrop. Renta 4 is reviewing its advice for Santander for the moment, although it places its target price at 9.72 euros. One day later, on February 5, BBVA will become the protagonist of the day. After a year marked by the failed hostile takeover of Sabadell—which led the bank to launch a significant share buyback—experts such as those from S&P believe that the Basque bank will continue to lead the profitability of the sector, with an ROE that will exceed 18% (18.8% at the end of the third quarter). Renta 4 believes that the ‘La Vela’ entity will increase its profit by 7% in the quarterup to 2.6 billion, and 5% throughout the yearup to 10,578 million euros. The Spanish firm also estimates an interest margin of 25,986 million euros in all of 2025 (+3%), a CET 1 capital ratio of 12.88% and «positive» guides and aligned with the objectives of its Strategic Plan. Despite this, they recommend ‘underweight’ BBVA, whose shares are valued at 17.45 euros. It will be precisely the object of BBVA’s desire that will close the banking results season. Sabadell will confess to the markets on February 6 and will close a year in which its profit, according to R4 calculations, could fall 4% in the year (1,751 million) and up to 32% in the fourth quarter (364 million). The experts highlight the non-homogeneous comparison of the interest margin, which included a positive extraordinary impact of 36 million euros in 2025, as well as the increase in operating expenses associated with the cost of the takeover bid. On the other hand, the organic generation of capital should allow CET 1 capital levels to be maintained at 13.7%, once the impact of the dividend payment, inflation for risk-weighted assets and the updating of the models for operational risk have been taken into account. At the results conference, focus should be on 2026 guidancewhich will be marked by the sale of TSB, its British subsidiary. Sabadell is the only bank that Renta 4 ‘overweight’ and sees an upside potential of more than 15% for its shares, whose target price is at 3.78 euros.
