The entity, which has so far maintained a 40% payout, announces this target for the next three years at its Investor Day
Banco Santander is hooked on the dividend to try and drive up the price and keep the favor of shareholders, who have long expected the entity to deliver on its promise to improve the profit it allocates to reward (payout). After historic profits of 9,605 million euros in 2022, the bank has taken advantage of its Investor Day, held this Tuesday in London, to announce that it will improve that payout to 50% between 2023 and 2025, from the 40% of the profit that has so far been distributed among its shareholders, the lowest percentage among the Ibex banks.
This was the main question of a day when the president of the entity, Ana Botín, will present the market with the new growth guide for the bank for the next three years, in an environment of rising interest rates that favor the margins of the sector. And we will have to wait for the reaction of a market, which has had a range of ‘payoff’ between 50% and 60% in recent days.
As stated by the entity, the target payout will be “approximately 50% of attributable net income (excluding impact with no effect on cash or direct effect on capital ratios), approximately 50% paid in cash dividends and 50% in share repurchases. They add admits, however, that the application of the shareholder remuneration policy is “subject to future internal decisions and regulatory approvals”.
With regard to the dividend relating to 2022, the entity will propose a final dividend per share of 5.95 euro cents per share to be voted on at the next general meeting of shareholders, scheduled for March 31, 2023, charged to the 2022 result. total cash dividend for the year will be 11.78 euro cents per share, 18% more than last year. Santander has also announced a new share buyback program worth €921 million, having obtained the corresponding regulatory approval.
Upon completion of this phase, the total shareholder remuneration for 2022 will amount to EUR 3,842 million (approximately 40% of 2022 ordinary profit), divided between cash dividends (EUR 1,942 million) and share buybacks (EUR 1,900 million). equivalent return of more than 8%
Within the new roadmap, the bank aims to increase the number of customers by 40 million by 2025, bringing the total to approximately 200 million, and the number of active customers by 26 million to approximately 125 million. In 2023-2025, this advance will contribute to an average increase in turnover of around 7-8% per year in constant euros. In addition, the bank is implementing a transformation that will enable it to improve the efficiency ratio from 45.8% to approximately 42% in 2025.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
