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Bank raised payout by 100 mln euros to 3.4 bln euros

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Q1 net profit rises 59% of 489 mln euros

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Q1 NII falls 1.3%, sees NII falling in 2025

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Net profit at TSB almost doubles, while NII up 9.4%

(Adds details on payout in paragraph 3, guidance on lending

income guidance for 2025 in 8, share performance and analyst's

comment in 9 and 10)

By Jesús Aguado

MADRID, May 8 (Reuters) - Sabadell raised on

Thursday its payout target for 2024 and 2025, as the Spanish

bank tries to fend off a hostile takeover by its larger rival

BBVA, with quarterly profits surpassing forecasts

despite pressure on lending income.

BBVA wants to create a bank with more than 1 trillion

euros in assets to gain scale and better cope with a lower

interest rate environment.

As part of its strategy to strengthen its case for

remaining independent, Sabadell announced a 3.4 billion euro

shareholder payout for 2024 and 2025, up from 3.3 billion euros.

The revised goal came after Sabadell reported a

quarterly rise of 29 basis points in its capital ratio to 13.31%

at the end of March.

The lender's move comes after Spain's competition

watchdog approved the proposed takeover deal, currently valued

at around 14 billion euros ($15.87 billion), subject to several

remedies.

The government, which is opposed to the bid, launched a

non-binding public consultation on the matter earlier, which

analysts say is another sign of political opposition to the

deal.

Net interest income, the difference between earnings on

loans and deposit costs, in the quarter fell 1.3% year-on-year

to 1.22 billion euros, in line with analysts' forecasts.

For 2025, Sabadell said it expects NII without its British

unit TSB to fall by a low single-digit.

At 0815 GMT, shares in Sabadell rose 2%.

JPMorgan ( JPM ) said that results were helped by "stronger than

expected non-core revenues and benign credit losses."

Net profit jumped 59% year-on-year to 489 million euros

due to a lower impact from the renewed banking tax after a

charge of 31 million euros as it evenly spread the levy on a

quarterly basis. In 2024 it booked the entire 192 million euros

in the first quarter.

Lower provisions helped Sabadell raise its recurrent return

on tangible equity ratio, a measure of profitability, to 14.1%

from 14% in December, in line with its profitability target.

Net profit at its primary Spanish unit surged 49% to 375

million euros in the reported quarter.

At TSB, its British unit, net profit almost doubled to 74

million pounds ($98.52 million), supported by a positive

one-off, while lending income rose 9.4%.

($1 = 0.8812 euros)

($1 = 0.7511 pounds)