The big banks are protecting their shareholders and will distribute more than $10 billion in dividends.

Banks are already expecting interest rates to start falling in the middle of this year. This change in monetary policy will have an impact on their accounts, particularly their profitability, as the major Ibex 35 banks have made progress in reporting 2023 results that will continue to generate cash, albeit at a slower pace. At the end of last year, enterprises announced higher dividends than in the previous year.

In this way, the bank is trying to protect its shareholders, who, faced with a downward trend in interest rates, might seek other types of investments that are less affected by decisions of the European Central Bank (ECB). Between CaixaBank, Banco Santander, BBVA and Sabadell they will distribute more than 10 billion euros.

Last week, directors of the country’s largest banks explained that the excess capital they generate will be distributed to shareholders. President of CaixaBank, José Ignacio Goirigolzarristressed, however, that although profits are record and dividends are higher, the profitability that the bank has achieved is within normal rather than extraordinary standards, and therefore its 2023 results have nothing to do with the Government’s decision to tax the income sectors.

The Valencia-headquartered bank (expecting Unicaja to do so next week) was the last to submit its annual accounts. CaixaBank announced a dividend of €2.890 million. Of this amount, the La Caixa Foundation will receive 900 million euros, and the Fund for the Orderly Restructuring of Banks (FROB) – 500 million. In this sense, the organization emphasized that this distribution “will return to society” through these two shareholders, the Foundation and the participation of the state.

BBVA will allocate almost 4 billion euros to remunerate its shareholders. Having reported a profit of €8.019 million, the bank decided to establish pay (profit percentage) of 50% for its shareholders. The bank will distribute 0.55 euros per share, following the 0.16 it had already allocated in October. This means that compared to 2022, dividends will increase by 28%. “We will return excess capital to our shareholders. The goal is not to have such excess capital,” the organization’s president said. Carlos Torres.

Banco Santander approved dividends for 2023 results in September of a total of 0.81 euros per share, which represented a dividend increase of 39%. In total, the organization, chaired by Ana Patricia Botin, will allocate 2.6 billion euros to reward shareholders. The bank made a profit of 11,076 million euroswhich is 15% higher than recorded in 2022. Beating earnings expectations will also have implications for shareholder payouts, which could exceed the $2.6 billion estimated in September before 2023 totals are known.

Following the presentation of the results, Banco Sabadell announced that it would propose to the shareholders meeting the payment of additional dividends and the repurchase of shares in the amount of 340 million euros. This means that shareholder compensation, including this purchase, exceeds 666 million euros, up 55% on the previous year. This improvement in remuneration corresponds to the bank’s profit of 1.332 million, which is 55% more than in 2022.

In June, September and December last year, Bankinter paid interim dividends for 2023. All three exceeded last year’s. The June figure was 24% higher, the September figure was almost twice as high, and the December figure was 69%. In 2023, the bank earned 845 million euros, which is 51% more than a year earlier.

After the publication of the results, banks behaved unevenly on the stock market. BBVA shares have risen 10.5% since the presentation, but shares of Bankinter (-2.9%) and CaixaBank, which released their data on Friday (-0.43%), were punished by the market. Both Santander and Banco Sabadell ended the week with gains of 2.97% and 2.27%, respectively.