BBVA, Santander, Bankia, Sabadell and CaixaBank will distribute 7,030 million euros in dividends from the results of 2019, practically at the same level as the previous year, despite the fact that profit as a whole has fallen 3,185 million (19.6%). This causes the ‘pay out’, the percentage of profits that entities allocate to remunerate the shareholder, rises to 53.9%, well above 43.17% of the previous year (10.74 percentage points), according to the figures prepared from own calculations (number of shares for the amount of the dividend per share, between the profit).
The effect that has occurred is that Bankia, BBVA and Santander have maintained the dividend per share they distributed last year but having obtained a lower profit, the “pay out” increases.
Specifically, Bankia earned 541 million in 2019, 23% less, but it maintains a shareholder remuneration of 0,11576 euros per title, so the ‘pay out’ is favored by 14.9 percentage points: it goes from 50.8% in 2018 to 65.7% this year. The biggest beneficiary in this regard is the State, since through the Banking Ordinance Restructuring Fund (FROB) it controls 61.8% of the capital.
For its part, BBVA won 35% less (3,512 million) and also maintains the dividend of 0.26 euros per share, so the percentage of profits destined to remunerate the shareholder rises 17.3 percentage points, from 32.1% in 2018 to 49.4% in 2019.
In the same way, Santander maintains its dividend of 0.23 euros per title: to the 0.10 euros in cash already paid will be added another payment of 0.13 euros of which 0.10 will be in cash and 0.03 in format choice (in shares or in cash). The profit in 2019 of the entity chaired by Ana Botín fell by 16.6%, so maintaining the same remuneration, the pay out rises by 10.8 percentage points (from 47.8% in 2018 to 58, 7% of 2019).
The two exceptions have been the Catalan banks: Sabadell and CaixaBank. The entity chaired by Josep Oliu has been the only one of the five that has raised the profit (won 134% more) and also increases the dividend per share (from 0.0295 euros per title from 2018 to 0, 04 euros per share of 2019). Therefore, the ‘pay out’ has fallen (from 49.8% to 29%). Sabadell’s dividend is divided into two payments, one already made of 0.02 euros in treasury shares and another complementary of 0.02 euros, which in this case will be made in cash.
On the other hand, the opposite effect has occurred in CaixaBank: it cuts 14.1% of the 2019 profit and the dividend per share goes from 0.17 euros charged to 2018 to 0.15 euros per 2019 title. No However, having earned less, the ‘pay out’ of the entity chaired by Jordi Gual rises to 52.6%. The aforementioned 0.15 euros per share will be paid in a single cash payment.
On the other hand, beyond the large listed banks, Unicaja announced that it will propose to distribute among its shareholders 77 of the 172 million profit in 2019, which means a ‘pay out’ of 44.8% (the largest in its history) with an increase in the dividend per share of 25%.
In this way, in a complicated environment for the banking business, due to the low interest rates that remain negative, the entities have chosen to make a nod to the shareholder.
Precisely, on remuneration policies, the European Central Bank asked in early January, when issuing its guidelines, to be cautious with these payments. Credit institutions must establish dividend policies based on prudent and conservative assumptions so that, after distributing dividends, they meet the applicable capital requirements and what is established in accordance with the supervisory review and evaluation (PRES) process.