On Monday, Santander, Spain’s banking giant, unveiled its plan to launch a new share buyback initiative worth 1.46 billion euros ($1.57 billion) and disclosed its intention to boost its 2023 dividend per share by approximately 50%. As the euro zone’s second-largest bank in market capitalisation, Santander confirmed that the buyback process is set to commence on Tuesday following the receipt of all required regulatory approvals.
Santander Unveils $1.57Bn Share Buyback, Ups Dividend Payout
The bank’s shares saw a notable increase of 2.17% to 3.7530 euros in early trading at 0857 GMT, despite a year-to-date decline of 4.68% as of February 16. Santander outlined that the maximum share purchase price would be capped at 4.76 euros, and based on an assumed average price of 3.95 euros, it could acquire up to 369.3 million shares. This volume represents about 2.33% of the bank’s total capital.
Additionally, Santander plans to propose a final cash dividend of 0.095 euros per share for 2023 at its forthcoming annual general meeting, scheduled for March 22. This proposal will elevate the total cash dividend for the year to 0.176 euros per share.
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This move to increase dividends follows a year where Santander’s net profits soared to an unprecedented 11.08 billion euros in 2023. Ana Botin, Santander’s Executive Chair, expressed optimism about the bank’s future, forecasting a return on tangible equity—a key profitability metric—of 16% in 2024.
Introducing these enhanced shareholder rewards will increase Santander’s payout ratio from 40% to 50% of its attributable profits, aligning with the bank’s revised compensation policy announced earlier in February.
The final instalment of the cash dividend is scheduled for disbursement on May 2, with total shareholder remuneration for 2023 surpassing 5.5 billion euros, as per Santander’s announcement.
The bank’s board has also put forward Carlos Barrabes and Antonio Weiss as candidates for new independent directors. Their appointments will be subject to approval at the AGM, where they are set to fill the vacancies left by Bruce Carnegie-Brown and Ramiro Mato.
