Business · Companies · 18 hrs ago
Spanish banks forecast to outpace Europe in profitability through 2028
BBVA, CaixaBank and Santander are forecast to be more profitable than European rivals through 2028.
Profitability here means return on tangible equity, or how much income a bank generates from its tangible capital.
Analysts expect the European banking sector’s average to rise to 18.1% in 2028, while the three Spanish banks are forecast to average 22.2%.
Higher interest rates, cost controls, more fee income and larger loan volumes are expected to support the industry’s returns.
BBVA is expected to remain the leader, though estimates for its 2028 return range from 22.1% to above 27%.
Analysts forecast CaixaBank could reach 22.6% in 2028, while Santander’s return could approach 19.5%, short of its 20% target; both would still be above the European average.
BBVA, CaixaBank and Santander are forecast to average a 22.2% return on tangible equity in 2028, above the 18.1% average forecast for European banks.
The projected gap between the three Spanish banks and the European sector is 4.1 percentage points in 2028.
BBVA is forecast to lead the group, with estimates for its 2028 return ranging from 22.1% to above 27%.
Analysts expect CaixaBank’s return to reach 22.6% in 2028, while Santander’s is forecast at about 19.5%.
The forecasts reflect expectations of higher interest income, cost controls, increased fee income and larger loan volumes across European banks.
- Who
- BBVA, CaixaBank and Santander, compared with the wider European banking sector.
- What
- The three Spanish banks are forecast to outperform European peers in profitability through 2028.
- When
- Forecasts cover 2026 to 2028, with the comparison focused on 2028.
- Where
- Spain and the wider European banking sector.
- Why
- Higher interest rates, cost controls, increased fee income and larger loan volumes are expected to support bank profitability.
This story does not have two clearly opposing sides.
UBS put the European banking sector’s return on tangible equity at 15.5%.
JPMorgan forecast a European sector return of 16.4%.
JPMorgan forecast a European sector return of 17.7%; the three Spanish banks were forecast to lead the sector by 3.7 percentage points.
The Spanish banks were forecast to average 22.2%, compared with an 18.1% European average.
- Spanish banks
- BBVA, CaixaBank and Santander
- Spanish banks’ average forecast for 2028
- 22.2% ROTE
- European average forecast for 2028
- 18.1% ROTE
- Projected 2028 gap
- 4.1 percentage points
- BBVA forecast for 2028
- Above 27% by JPMorgan; 22.1% by UBS
- Santander forecast for 2028
- About 19.5% by JPMorgan and UBS estimates
What people are saying
European banks have significantly improved their ROTE generation
Despite the European Central Bank’s peak rates of 4% being a thing of the past, we still expect solid ROTE growth, from 16.4% in 2026 to 17.7% and 18.5% in 2027 and 2028