Santander, a leading banking institution in Spain, announced its intention to reward shareholders with dividends and share buybacks totalling over €6 billion following its 2024 financial results. This reflects the bank’s strong performance at the start of the year.
Spain’s Santander Bank Plans To Pay Over €6 Billion to Investors
The announcement suggests that Santander, the second-largest bank in the eurozone by market capitalisation, anticipates its net profit for 2024 to surpass €12 billion. The bank adheres to a 50% payout policy, evenly dividing the distribution of earnings between cash dividends and share buybacks.
During the annual shareholder meeting, Santander’s Executive Chair, Ana Botin, conveyed optimism about the bank’s profitability, projecting a 16% return on tangible equity (ROTE) for the first quarter. This figure includes the anticipated impact of Spain’s banking tax.
Botin highlighted the bank’s positive momentum, citing a 9% year-on-year increase in income for the first quarter, driven by an expanding customer base and robust business activities. While historically relying on its Latin American operations for revenue growth, Santander has recently seen benefits from rising interest rates in Europe.
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By midday trading, Santander’s shares had risen by 2.3%, significantly outperforming the 0.5% gain of Spain’s premier stock index, the Ibex-35. Botin expressed high confidence in Santander’s prospects, anticipating that 2024’s performance would exceed the record-setting results of 2023.
Financial analysts at UBS have regarded the bank’s capital return plans as exceeding market expectations, with positive indicators across all key earnings areas for the first quarter.
UBS suggested that these developments could reassure investors and draw attention to Santander’s undervalued stock. The bank’s ROTE goal for 2024 indicates a net profit of more than €12.5 billion.
