Half of the remuneration will be paid to shareholders in the form of a cash dividend of 4.85 euro cents per share, with the remaining half made through a share repurchase programme equivalent to €841 million.

The bank will announce a further and final remuneration from 2021 earnings in the first quarter of 2022.

Ana Botín said: “The updated remuneration policy reflects our confidence that investing in our shares at this valuation offers an attractive opportunity to generate value for our shareholders.”

Madrid, 28 September 2021.
The board of Banco Santander announced today its decision to make an interim distribution from 2021 earnings through a cash dividend and share buyback amounting to a total value c.€1.7 billion - equivalent to 40% of underlying profit for the first half of 2021. The board’s decision has been taken in view of the lifting of the European Central Bank (ECB) recommendation that has limited shareholder remuneration until 30 September 2021.

Shareholder remuneration will be made in two parts:

• A cash dividend of 4.85 euro cents per share, payable from 2 November 2021.
• A share repurchase programme for an approximate amount of 841 million euros, for which the bank has received ECB approval. An announcement setting out additional information on the terms of the repurchase programme will be made before it commences.

The bank will announce a further and final distribution from 2021 earnings in the first quarter of 2022, subject to the appropriate corporate and regulatory approvals. Should the trend in the bank’s performance for the first half of the year continue, it would result in a total cash dividend for 2021 that is in line with the cash dividend paid in 2019 (before regulatory restrictions were applied), and a total buyback equivalent to c.3% of the outstanding share capital. In 2020 Santander paid a cash dividend of 2.75 euro cents per share, the maximum allowed under regulatory restrictions.

This distribution reflects an update to Banco Santander’s shareholder remuneration policy for 2021. The updated policy targets a total shareholder remuneration of approximately 40% of the group’s underlying profit, split in equal parts between cash dividends and share buybacks. According to the revised policy, interim distributions will be made around November and final distributions around May following the bank’s annual shareholder meeting.

The bank expects to finish 2021 at the top end of its 11-12% target capital range on a fully loaded basis.

Ana Botín, Banco Santander executive chairman, said:

“Our business continues to perform extremely well, and we remain on track to outperform our profitability target for the year and to reach our medium-term target of a 13-15% RoTE.

We have significant opportunity for further profitable, organic growth going forward, and the updated remuneration policy reflects our confidence that investing in our shares at this valuation offers an attractive opportunity to generate value for our shareholders.

We will continue to deploy capital with discipline to high growth, high return businesses, while maintaining a fully loaded CET1 capital at the top end of our 11-12% target.”