Santander announces plans for £4.7bn shareholder distribution following record results

Santander has announced that it will seek to pay out €5.5bn (£4.7bn) to shareholders just weeks after the bank unveiled record annual profits in 2023.

In a statement this morning, Santander said it will pay out a final cash dividend of 9.50 cents (8.1p) per share, which would see the total dividend for the year increase 50 per cent to hit 17.60 cents (15p) per share.

Spain’s largest bank has also received regulatory approval to launch a €1.5bn (£1.3bn) share buyback, which will start tomorrow. Altogether this represents a yield of around ten per cent.

With these distributions, Santander’s payout ratio has increased from 40 per cent to 50 per cent of attributable profit – in line with its target announced last year.

Ana Botín, Santander’s executive chair, said: “After record performance in 2023, we continue to invest for future growth while increasing shareholder returns, returning more than €5.5bn through dividends and buybacks, which represents an equivalent yield of approximately ten per cent.”

“We are already seeing good progress in 2024 and expect to achieve all our targets for this year, including a return on tangible equity of 16 per cent,” she continued.

The announcement comes shortly after the bank posted an annual revenue of €11.1bn in 2023, up 15 per cent on the year before as it benefited from higher interest rates.

Santander’s shares rose 3.3 per cent in London on Monday morning.

The bank has joined fellow European giants Deutsche Bank, UniCredit and Intesa Sanpaolo in unveiling fresh buybacks after bumper profits last year.

Bloomberg reported last week that Santander was raising bonuses for its investment bankers by an average of 10 per cent following the record results. The bank declined to comment.

The bank’s board also today announced the nomination of Carlos Barrabes and Antonio Weiss as new independent directors for approval at the AGM, filling spots left by Bruce Carnegie-Brown and Ramiro Mato.