Santander (SAN.MC) unveiled a fresh share buyback scheme worth 1.46 billion euros ($1.57 billion) on Monday, alongside a pledge to elevate its 2023 dividend per share by approximately 50%.
The euro zone’s second-largest bank by market value confirmed the commencement of its buyback operations on Tuesday, having secured the requisite regulatory green light beforehand.
At 0857 GMT, Santander’s shares surged by 2.17% to 3.7530 euros. However, the stock had experienced a downturn of 4.68% since the beginning of the year, as of its Feb. 16 close.
Santander disclosed that the average share purchase price would not surpass 4.76 euros, estimating the maximum number of shares to be acquired at 369.3 million, equivalent to 2.33% of the Spanish bank’s capital, based on an average price of 3.95 euros.
Furthermore, the bank announced 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 would bring the total cash dividend per share for 2023 to 0.176 euros.
The increment in shareholder distributions follows Santander’s attainment of a record net profit of 11.08 billion euros in 2023.
Ana Botin, Santander’s Executive Chair, expressed confidence in achieving a return on tangible equity of 16% in 2024.
The revised payments raise Santander’s payout ratio – the proportion of earnings disbursed to shareholders – from 40% to 50% of attributable profit, aligning with the bank’s updated remuneration policy announced in February.
Santander outlined that the final cash dividend would be disbursed on May 2, with shareholder remuneration for its 2023 results surpassing 5.5 billion euros.
Additionally, the board proposed Carlos Barrabes and Antonio Weiss as new independent directors for ratification at the AGM, filling vacancies left by Bruce Carnegie-Brown and Ramiro Mato.