The race to raise each quarter a little more the remuneration to the shareholder is taking its toll on many large European banks, but not to Santander and BBVA. The two entities have managed to close 2024 with more capital of the highest quality than they had at the beginning.
Santander has gone further and has sprayed his solvency record for the third consecutive trimester, 12.8% of CET1 capital means adding 54 basic points to its 2023 ratio, of which 34 basic points have been achieved in the last three months.
BBVA does not reach so much, but the 21 basic points he added to his solvency in the last year They take their CET1 to 12.88%, slightly above Santander, as the accounts of the two entities show.
None of them have spared dividends. The increase in capital has occurred despite the impulse that both have given the remuneration to the shareholder.
They are not the only ones who have stepped on the dividend accelerator. European banks now have two priorities. The first is to receive the stock market recognition that they lost from the financial crisis. The second, recover the buried profitability during the era of interest rates below zero.
IMPULSE TO COTATION
Kneading capital no longer appears on the list. The other way around. Raising the compensation to the shareholder has revealed key to recovering the favor of the stock market investors and promoting the price, So the banks have begun to allocate their capital, although that reduces their solvency.
Santander and BBVA are no exception, but they have managed to combine all the objectives. “The cash dividend per action paid during the year increased 39%”, Ana Botín, president of Banco Santander, highlighted in the presentation of the group’s annual results, which has also initiated a new repurchase of shares, this time for US $ 1,673 million.
None of that has prevented the capital record, although from now on the increases can be moderated. Santander has promised to bring the acquisition of own shares up to US $ 10,542 million with the results of 2025 and 2026, and will use its excess solvency. The bank has not revealed from which CET1 considers that it is left over, so its future brands will depend on that.
BBVA has been able to raise its capital in the midst of an OPA that is taking it to shoot The remuneration to demonstrate to Sabadell’s shareholders of what he is capable of. The 2024 dividend is 27% higher than that of 2023 and has announced another repurchase of shares of almost US $ 1,054 million. The total remuneration of last year It amounts to US $ 5.3 billion.
Even so, its capital has risen to 12.88%but it will not remain there for a long time. BBVA has pledged to distribute everything that exceeds 12% provided they are not crossing “profitable growth opportunities” ahead or have the need to use these reservations to give a more march to the business.
Bet on all or nothing
SAbadell is the BBVA contender in the fight and has preferred to put all the meat on the grill, although that has meant reducing its CET1. The bank knows that it only has a letter, since if the OPA triumphs, it will no longer exist, so it has launched to announce the distribution among the shareholders of all excess solvency.
The annual dividend rises 241% and there will be US $ 1,054 million euros in repurchases. Sabadell Se will spend US $ 3,479 million in remunerating its investors charged to the benefits of 2024 and 2025 and has already discounted it from its capital.
That has subtracted an entire percentage point to CET1 and has ended a race of 15 consecutive quarters of improvement of solvency, the last six to record figures, 13.8% of September closure was its last maximum. From there it has dropped to 13.02% in December.
It is still the big Spanish bank with more capital, although BBVA steps on his heels. Caixabank is much further. He also committed to distribute all excess over 12% of CET1 among shareholders and fulfilled it.
Caixabank has distributed more than US $ 12,648 million in the last three years, with an acceleration in 2024, And even so, a part still has it pending. It ended last year with a solvency of 12.19%. There are 19 basic points less than in 2023, But 19 basic points above the level you want to have, So there will be more cast this exercise, he said.
