BBVA’s 2022 dividend profile outpaced the prior year
BBVA reported a dividend profile in 2022 that surpassed the previous year by a wide margin. The group declared a cash dividend per share of 0.31 euros, the highest cash payout since 2016 and the strongest cash-and-stock return distributed to shareholders in a decade. Earlier in October, the bank had already paid 0.12 euros per share. When considering the 2022 beneficiaries, the total payout showed a substantial year over year gain of 50%. A second payment was announced by management for early April and is expected to be notably higher than 0.19 euros per share, sustaining the predictable dividend cadence.
During 2022, as economies reopened after Covid restrictions, BBVA benefited from rising central bank rates to curb inflation. By September, the bank had earned 4.842 billion euros, up 46.2% from the previous year. The year-end figure was slated for release on February 1, with analysts forecasting full-year earnings near 6.309 billion. If achieved, BBVA would maintain its policy of distributing about 40% to 50% of profits to shareholders, suggesting the April dividend could fall in the range of 0.29 to 0.40 euros per share, versus 0.23 euros in the prior year.
An employee interview shared by the business press on Monday, a practice the bank has repeated for a third consecutive year, featured comments from Carlos Torres Vila. He noted that 2022 presented tougher conditions than expected, yet the year ended strongly for BBVA. He highlighted that the strategic approach yielded higher returns, including a customer base that grew by 11 million and solid performance across lending and other core activities. He highlighted the performance of subsidiaries in Mexico, the group’s most important overseas unit, and in Spain, which posted the highest profit in 12 years (1.312 billion euros by September, up 10.2%). The Turkish operation faced difficulties, with hyperinflation accounting impacting results and a decision not to apply further consolidation to Garanti Bank.
At the forefront of sustainability, BBVA, along with Santander and Bankinter, led Europe’s Dow Jones sustainability rankings, underscoring a broader commitment to responsible growth. The executive also pointed to an outlook where stock price plus dividends could rise by around 15% year over year, contrasting with about 2% observed among European peers when only stock performance is considered. When including total return from revaluations and dividends over the last four years, BBVA’s shareholder value has appreciated about 65%, with European banks contributing roughly 35% and Spain about 5%. The message for 2023 remains optimistic: earnings are expected to be attractive and potentially higher for shareholders as the bank navigates evolving market dynamics.
Torres Vila warned that the economy could shift from a period of mild improvements to more favorable traction as uncertainties ease. He reiterated a cautious stance on global risks, including ongoing geopolitical tensions, post-pandemic recovery, and inflationary pressures. He cautioned that inflation may prove persistent and uneven, hitting the least advantaged more sharply. For him, sustaining solid results will rely on prudent private investment, productivity gains, ongoing reforms, and robust financial planning. Financial resilience and careful debt management are essential as global rates rise and countries carry elevated debt levels. The bank’s stance emphasizes disciplined long term value creation guided by sustainability and sound governance.
Overall, the latest data met or exceeded expectations. Still, the management team remains vigilant, acknowledging that inflationary periods can endure. The strategy prioritizes efficiency, sound capital allocation, and a focus on markets where BBVA operates. The future trajectory will depend on continued productivity gains, responsible lending practices, and strategic investments that strengthen the bank’s ability to deliver shareholder value while supporting sustainable growth for customers and communities.
BBVA, Santander and Bankinter top Europe’s Dow Jones sustainability rankings
The leadership in sustainability among BBVA, Santander, and Bankinter signals a broader industry shift toward responsible business practices across European banking. These rankings reflect steady progress in governance, ethical standards, environmental stewardship, and social impact. The positions reached by these institutions are often cited by investors as a proxy for long term risk management and value creation. External observers note that this emphasis on sustainable performance aligns with rising investor demand for transparent, accountable corporate behavior.
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The executive noted that the combination of rising stock value and dividend returns contributed to a notable improvement in total shareholder return. When considering both price appreciation and distributions, the four year trend shows substantial gains relative to regional peers. The bank’s performance has been described as a balance between rewarding current owners and investing for future growth, with expectations of continued improvement through 2023 as market conditions stabilize and inflation pressures ease.
Looking ahead, management expects the macro environment to offer more clarity as geopolitical and economic tensions ease. The focus remains on prudent risk management, disciplined investment in core markets, and ongoing work to sustain financial durability. Through these efforts, BBVA aims to deliver durable value to shareholders while supporting customers across its footprint and contributing to broader economic recovery.
Attribution: BBVA Investor Relations statements and market-based research reports.