Spanish Banks Are Having Their Best Run in a Decade, and the Regulator Has Noticed

Spain's six biggest banking groups reported combined first quarter profits of 10.8 billion euros, up 27 percent on the same three months of 2025. Santander, BBVA, CaixaBank, Sabadell, Bankinter and Unicaja all contributed, with Santander posting the steepest jump. It is the kind of quarter that would once have been described as exceptional and is now starting to look like the shape of the sector.

The mechanics behind it are not mysterious. Rates have stayed high enough for long enough that lending income is comfortable, loan losses have not materialised at the level the models feared, and Spanish households have kept borrowing. Add a domestic economy growing faster than most of the euro area and the result is a banking sector earning well without having to do anything clever.

What complicates the picture is what happened in June. The Comision Nacional de los Mercados y la Competencia opened disciplinary proceedings against six banking groups over public statements their executives had made about fixed rate mortgage policy. The concern is not that the statements were false. It is that talking openly about pricing intentions, in a market this concentrated, can do the work that an explicit agreement would otherwise have to do.

That is a harder allegation to defend than a conventional cartel case, because the conduct looks like ordinary investor communication. Executives brief analysts on where they expect margins to go. In a sector with six meaningful players, those briefings are also read by the other five.

For now the earnings and the investigation run in parallel. The banks will keep reporting strong numbers and the regulator will keep working through a file that could take years. The question the sector has not really answered is whether a run this good invites the scrutiny that ends it.