Spain’s Santander, the euro zone’s second-biggest bank by market value, announced a new share buyback program of 1.46 billion euros ($1.57 billion) on Monday and said it would raise its 2023 dividend per share by some 50%. The lender’s shares rose as much as 3.4% on the news before retreating somewhat later in trading. The bank said it consulted with regulators in the European Union and the United States before launching its buyback program. “The execution of this program is expected to start on Tuesday after having already obtained the necessary regulatory authorization,” it added in a statement.
Santander said that in line with its shareholder remuneration policy, it would distribute to shareholders the equivalent of 50% of its attributable profit in 2023, of which half will be paid as cash and the other half as share repurchases. The bank will also propose to its AGM that the final cash dividend in 2023 should be 9.50 euros per share, up from 8.10 euros per share in 2022.
The Spanish bank’s results were boosted by a strong performance in its main markets of continental Europe and Latin America. Earnings in its biggest market, Spain, surged by more than 60%, as floating rate credit and deposit costs boosted NII dipped. The company said it was on track to meet its targets for 2023, including an improvement in profitability and a reduction in risk-weighted assets.
As the euro zone’s central bank (ECB) is on course to raise interest rates, that may narrow banks’ interest margins and slow lending growth. That may weigh on the profitability of big lenders like Santander.
On the financial markets, SAN is a large and highly diversified global banking and financial services group emphasizing retail and commercial banking. Its activities are spread across all major global financial centers, with a particular presence in Europe and Latin America.
In the United States, Banco Santander sponsors ADRs (American Depositary Receipts) that trade on the NYSE under the symbol SAN. Its principal activities include corporate and investment banking, consumer finance and private banking, and several other services to customers.
The firm’s global workforce comprises more than 875,000 employees. Its vital operating businesses are in Spain, the United Kingdom, and Latin America. It is headquartered in Madrid and is considered a systemically important bank by the U.S. Federal Reserve and the European Central Bank. Its subsidiaries include Banco de Santander, a global wholesale bank; Santander Consumer Finance, one of the world’s leading consumer credit companies; and Santander Capital Investors, a fund management business. Banco Santander is chaired by Ana Patricia Botin-Sanz de Sautuola O’Shea, the daughter and granddaughter of former chairman Emilio Botin-Sanz de Sautuola y Garcia de los Rios. The bank has a reputation for stability is widely respected by its customers and other stakeholders. It is a member of the Dow Jones Sustainability Index.