Spanish banks have collectively achieved a record €34 billion in net profits for 2025, marking the third consecutive year of gains for the sector.Driven by strong commercial activity and prosperous digitalization efforts, institutions like Santander and BBVA are reporting significant year-over-year increases, though concerns are emerging regarding potential risks within the rapidly expanding mortgage market.The results, released this week, offer a snapshot of Spain’s financial health as regulators begin to eye potential limits on lending practices amid intense competition.
Spanish banking giants collectively posted a net profit of €34 billion in 2025, a 7% increase from 2024, marking their third consecutive year of record annual earnings. The sector is experiencing a period of strong performance, as evidenced by recent results released by major institutions, including Banco Sabadell, which reported its figures yesterday. This success extends to unprecedented levels within the mortgage market.
The positive results are largely supported by robust income, which remained stable thanks to strong commercial activity despite a low interest rate environment. Banks continued to advance cost control plans through digitalization, leading to widespread improvements in efficiency ratios. This performance has solidified sector profitability, reaching levels not seen in years, and fueled an acceleration in shareholder remuneration, the sustainability of which remains to be seen in 2026.
Santander and BBVA together account for 70% of the total profit. Santander, with €14.101 billion, is also among the banks with the largest gains, a 12% year-over-year increase, surpassed only by Bankinter, which saw a 14.4% rise to exceed €1 billion – a historic figure, excluding the results from 2021 when the firm earned €1.331 billion due to extraordinary gains from the IPO of Línea Directa.
BBVA is the second largest contributor to the overall profits of Spain’s major banks, reporting a net result of €10.511 billion, a 4.5% increase compared to the previous year, despite being the losing bidder in the failed takeover attempt of Sabadell.
This week, Carlos Torres defended the firm’s position of avoiding a mortgage price war, stating that the bank originated more loans for businesses and consumer spending than for home purchases in 2025. This highlights a strategic focus on diversifying lending portfolios.
Limits to Mortgage Lending
CaixaBank, however, felt the impact of the mortgage war, despite achieving a record result of €5.891 billion – a 1.8% increase. Amid a booming real estate market and intense competition among banks to attract customers, CaixaBank acknowledged the presence of undesirable practices, with some institutions pushing the limits on pricing to offer home loans. In response, its CEO, Gonzalo Gortázar, expressed support for the Bank of Spain to monitor and potentially analyze limits on mortgage lending.
Banco Sabadell, with €1.775 billion in 2025, reported a profit 2.8% lower than in 2024. Excluding extraordinary impacts from 2024, the profit would have increased by 3.4%. In Spain, the mortgage portfolio increased by 5.2% year-over-year. The bank anticipates growth in this segment in line with the market, although CEO César González-Bueno acknowledged that this type of credit is currently “a short-term gain for a long-term cost,” given the rapid growth in both volume and price.
Unicaja, which achieved a net profit of €632 million in 2025 – a 10.3% increase over the previous year – will also continue to seek “reasonable risk profiles and profitability scenarios” in the mortgages it offers. Bankinter has also made this product a flagship in the market, with a portfolio growing by 27%. However, within the growth of off-balance sheet managed resources, the growth of its own investment funds stands out. This strong performance has led Bankinter Gestión de Activos to be the second largest fund manager in Spain with the highest net inflows in 2025.
