Banco Santander’s board approved a cash dividend based on the 2023 results, at 8.10 euros per share, marking a 39% rise from the prior year’s distribution. The governing body also sanctioned a share buyback program valued at about €1,310 million, pending regulatory clearance.
Under the new dividend policy announced during the Investor Day event last February, the payout ratio increases from 40% to 50% of profits. This move accompanies Santander’s record first-half performance, with net income reaching €5.241 billion, up 7% year over year.
Europe delivered robust revenue growth, offsetting higher provisions in North and South America. By midyear, Santander Spain had surpassed Brazil as the largest contributor to profits, driven in part by rising interest rates.
For 2023, the fee related to the results is projected at approximately €2.62 billion. The cash dividend is payable on November 2, 2023.
Extra pay
The board plans to approve additional compensation linked to the 2023 results in the first quarter of 2024, subject to internal and regulatory approvals. The pricing tied to 2023 results implies an annual dividend yield above 9%. Santander has repurchased more than 7% of its outstanding shares through buybacks since 2021.
The president of Banco Santander, Ana Botín, highlighted that the bank’s results are strong and on track to meet the 2023 targets. The leadership is focused on aligning the operating model across retail, commercial, and consumer banking with the strategic plan to better serve customers, support profitable growth, and improve efficiency.
The bank notes that total tangible book value per share and dividends per share have risen by 11% over the past 12 months. The target payout remains set at roughly 50% of the group’s attributable net profit, excluding non-cash effects or impacts on capital ratios, with half distributed as cash dividends and the other half directed to share repurchases. Implementation of the shareholder compensation policy will depend on future internal decisions and regulatory approvals. [Source: Banco Santander investor communications, 2023 results]
In governance updates, Glenn Hutchins will take on the role of vice president and coordinator, following a recommendation from the board’s appointments committee. The appointment becomes effective on October 1, 2023. Non-executive director José Antonio Álvarez also serves as vice chairman of Banco Santander.
Hutchins, who joined Santander’s board as an external director in 2022, will succeed Bruce Carnegie-Brown as chairman of the board’s compensation committee on October 1, 2023. Carnegie-Brown will retire from the board in 2024 after more than nine years of service and will remain on the board until the 2024 shareholders’ meeting to ensure a smooth transition. He will continue to chair the nominating committee through the 2024 shareholder meeting and will step away from the executive, innovation and technology committees.