Santander to pay shareholders compensation of 1.7 billion euros
- Pay an interim dividend in cash of 4.85 euro cents per share
- Will buy back shares for around 841 million euros
- Share buybacks could double if the bank’s performance continues
MADRID, Sep 28 (Reuters) – Spain’s Santander (SAN.MC) announced on Tuesday that its board of directors has decided to pay an interim distribution from 2021 profits via a cash dividend and a share buyback worth 1.7 billion euros ($ 2 billion), or the equivalent of 40% of its current income for the first half,
The announcement comes after the ECB announced in July that it would lift restrictions on bank dividend pay and share buybacks beyond September, recouping a crisis measure that required lenders to hold onto capital for the pandemic.
The Board of Directors approved the payment of an interim cash dividend on 2021 results of 4.85 euro cents per share, equivalent to 20% of the underlying group profit in the first half of 2021.
In addition, it has undertaken to implement a share buyback program of approximately 20% of the group’s operating income in the first half of 2021 for approximately € 841 million, for which it has received the approval of the ECB.
The bank also announced that it will announce an additional and final distribution of 2021 profits in the first quarter of 2022.
“If the trend in the bank’s performance for the first half of the year continues, this would translate into a total cash dividend for 2021 that is in line with the cash dividend paid in 2019, and an equivalent total redemption to approximately 3% of the outstanding share capital. “
According to Reuters calculations based on Refinitiv data, the total buyout would amount to around 1.6 billion euros taking into account the current share price.
The bank said interim distributions will be made around November and final distributions around May.
The bank had previously signaled its intention to return a dividend of 40 to 50% of the underlying profit.
Santander said its revised dividend policy reflects its commitment to long-term value and capital deployment in high-yielding companies while maintaining fully loaded CET-1 capital, the most stringent solvency measure, at the peak of its target of 11-12%.
($ 1 = € 0.8537)
Reporting by Jesús Aguado, editing by Andrei Khalip, Sonya Hepinstall and Mark Porter
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