In the midst of the battle surrounding the public takeover offer of BBVA and Banco Sabadell, the Basque financial institution wanted to take a new step in its rivalry with the Catalan bank and announced this week an increase in the remuneration of its investors up to ‘at 81% compared to the same period of the previous year. Banco Santander also joins battle for adding attractiveness to its investors and confirms a payment 23% higher than last year.
Concretely, BBVA will pay its shareholders a dividend of 0.29 euros per share, compared to 0.16 euros distributed in October 2023. The company’s shares are currently on the verge of closing the gap they opened in August, during which, in just one week, lost more than 15% of its value. Now, they are around 10 euros per share and The profitability of this announced payment is close to 3%. This dividend attempts to compete with that paid this Friday by Sabadell, which offered a profitability of 4.2%.
Investors who wish to be entitled to this dividend must have the shares of the financial institution in their portfolio. before October 8, day from which their securities will begin to be traded without right of recovery. Payment will be officially made two days later, on October 10.
This dividend will be the first for the 2024 results for which the experts it brings together Bloomberg sets a historic net profit of 9.250 million euros. To this would be added a next payment in April which experts estimate at 0.525 euros per share (profitability of 5.3%). With this payment, the total amount allocated to 2024 would amount to 0.815 euros (8.2%), a record dividend.
BBVA’s shareholder remuneration policy provides for a payment 40 to 50% of the profit, which, if the estimates come true, would imply that the company would devote between 3,700 and 4,600 million euros to remunerate its shareholders, either through the dividend or through the buyback of shares.
Banco Santander also wants to increase its attractiveness through shareholder payments. The entity’s board of directors approves on November 1 the distribution of an interim dividend on 2023 results of 10 cents per share, with profitability of 2% at current levels. The payment will be 23% more compared to the same dates last year. The last day to purchase the bank’s shares with the right to receive the dividend is August 29, since the 30th of this month is set as the deadline.
In total, the entity will pay around 3,050 million euros for 2024 results, or around 50% of the profit obtained in the first half. Already last February, the bank chaired by Ana Botín announced an additional dividend of 0.095 euros per share, an increase of 50% compared to the previous year.
Interim compensation based on 2024 results represents an equivalent annualized return of nearly 9%. Starting in 2021 and after completing the current buyback program, Santander will have repurchased approximately 12.5% of its outstanding shares through share buybacks. Ana Botín, president of Banco Santander, highlighted after the approval of the dividend that the entity would continue to generate value for shareholders, and added that it hoped to achieve the objectives for 2024, which it recently improved, which would translate into “more than 6 billion euros in shareholder remuneration billed until 2024”.
