BBVA is paying its shareholders a “historic” dividend of $1.7 billion.

This Thursday, BBVA invested almost $1.7 billion to its shareholders, paying them 0.29 euros gross for each bank name they owned – a net value of 0.2349 euros. This, as the Basque bank emphasized, is “the largest interim dividend in its history.” The decision and message are not accidental, as it was made in the midst of a takeover bid for Banco Sabadell. In total, the Basque bank, chaired by Carlos Torres, paid out 1.671 million in cash. Moreover, Sabadell shareholders who accept the takeover offer if the deadline to do so finally arrives will also receive it.

This amount represents an 81% increase over last year. BBVA has spent a total of $15 billion on dividends and buybacks since 2021. The enterprise’s shareholder remuneration policy requires the payment of 40% to 50% of profits, a remuneration that may combine the payment of cash dividends with the repurchase of shares – in addition, the enterprise is obliged to distribute any excess capital in excess of 12% CET1-. This policy is implemented through two payments: one per account, usually in October, and one additional, usually in April. In addition, the company has conducted extraordinary share repurchases in recent years.

“BBVA is committed to creating value for its shareholders,” the company emphasized. From January 2019 to date, total shareholder return, taking into account both share performance and dividends paid, has almost tripled (+186%) “compared to 104% recorded in the case of European banks and an average increase of 69% in Spanish banks. .

Dividend war

The message on solvency is intended to condition the development of the takeover proposal, which was greatly complicated by the decision of the Ministry of Economy to clearly oppose it. At least for now.

The bank, led by Carlos Torres, adjusted its offer last week due to dividends that the Catalan-origin company distributed to its shareholders at the beginning of the month. A total of eight cents per share, representing total costs of €429 million. This move forced BBVA to adjust its offer: now one own share of the exchange costs 5.0169 shares of Sabadell. Previously it was one share for 4.83.

In parallel with this dividend war, there is a battle for history with constant statements from the main leaders of both companies. Torres was the last to speak out this week. He did so in the Financial Times, defending the need for mergers to ensure Europe has large companies that can compete in the world. “The biggest risk is no longer that banks are too big to fail, but that they are too small to fail,” he warned.