Updated on Wednesday, September 29, 2021 – 10:27
The remuneration is equivalent to 40% of the ordinary profit of the first semester of 2021
The president of Banco Santander, Ana Botn, at the March shareholders’ meeting, .
Banco Santander’s board of directors announced on Tuesday its decision to set a shareholder remuneration on account of the results of 2021 through a cash dividend and a share buyback for a total value of about 1,700 million euros, equivalent to 40% of the ordinary profit of the first half of 2021.
The financial institution explained that this announcement comes after the decision of the European Central Bank (ECB) to lift the recommendation to restrict remuneration to the shareholder, valid until September 30, 2021.
Thus, the compensation will be divided into two parts, with a cash dividend of 4.85 euro cents per share, payable as of November 2, 2021, and a share buyback worth about 841 million euros, for which Santander already has the approval of the ECB. Before the start of the buyback program, the entity will make a new announcement with additional information on its terms.
Likewise, the bank will announce in the first quarter of 2022 a additional compensation charged to 2021 benefits, subject to internal and regulatory approvals. In this sense, the entity explained that if the bank’s earnings trend for the first half of the year continues, it will reward its shareholders with a total cash dividend for 2021 in line with the cash dividend paid in 2019, before the regulatory restrictions, and with a total buyback equivalent to approximately 3% of the outstanding capital stock. In 2020, Santander paid a cash dividend of 2.75 euro cents per share, the maximum allowed due to regulatory restrictions.
With this remuneration, Santander updates its shareholder remuneration policy for 2021, which targets a total return of approximately 40% of ordinary profit, divided equally between cash dividends and share buybacks. Payments on account will be made around November and final payments around May, after the bank’s general meeting of shareholders has been held.
The president of Banco Santander, Ana Botn, assured that “the evolution of the business is very good and we are in line to exceed the target of profitability on tangible capital (RoTE) for the year of 13-15%”. “We see interesting opportunities to continue to grow profitably and organically“He continued, adding that” the update in the shareholder compensation policy reaffirms our confidence that investing in our own shares at their current valuation is an attractive opportunity to generate long-term value for our shareholders. “
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