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Last update: 04/03/2025
Listed companies reward their shareholders with a portion of their profits. Cash dividends are the most common form of this reward. But some companies' shareholder remuneration offers up an alternative: the share buyback. Here we tell you about our shareholder remuneration against 2024 results.
Santander's current shareholder remuneration policy consists of a total remuneration target of approximately 50% of the Group's net attributable profit, divided equally between cash dividends and share buyback programmes.
CASH DIVIDEND
The board of directors will submit to the 2025 Annual Shareholders’ Meeting, in application of the Bank’s current shareholder remuneration policy¹, the payment of a final gross cash dividend of €11 cents per share, against 2024 results. The dividend would be payable from 2 May 2025.
As a result, the total cash dividend per share charged to 2024 results will be 21-euro cents (including the €10.00 cents per share paid in November 2024), an increase of over 19% compared to the cash dividend against 2023 (17.6-euro cents).
SHARE REPURCHASE PROGRAMME
In application of the bank’s shareholder remuneration policy¹, Santander announced on 5 February a share repurchase programme for an amount of c.25% of the group’s profit in the second half of 2024 (approximately €1,587 million). The regulatory authorization has already been obtained, and its execution commences on 6 February.
In addition, between 27 August 2024 and 3 December 2024, the bank carried out a first share buyback programme against 2024 results totalling €1,525 million.
The total shareholder remuneration for the 2024 results will be approximately €6.3 billion (around 50% of the group's attributable profit for 2024), divided equally between cash dividends and share buyback programmes.
1. In line with the current shareholder remuneration policy of approximately 50% of the Group’s reported profit (excluding non-cash, non-capital ratios impact items), divided approximately equally between cash dividends and share buybacks. The implementation of the shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals.
FINAL GROSS CASH DIVIDEND*
€11 cents per share
payable from 2 May 2025
TOTAL CASH DIVIDEND*
€21 cents per share
BUYBACK PROGRAMME
€1,587 million
charged against 2nd half profit
TOTAL BUYBACK PROGRAMMES
€3,112 million
PAYOUT**
c. 50%
of attributable profit
TOTAL REMUNERATION*
€6,300 million
*Subject to approval by the 2025 annual general meeting.
**Existing shareholder remuneration policy defined as c.50% of Group reported profi t (excluding non-cash, non-capital ratios impact items), distributed c.50% in cash dividends and c.50% in share buybacks. The implementation of the shareholder remuneration policy and any share buybacks to distribute CET1 surpluses are subject to future corporate and regulatory decisions and approvals.
As a result of our strong capital generation, we expect to reward shareholders with 10 billion euros in share buy-backs for 2025 and 2026 and with excess capital, in addition to the ordinary distribution of cash dividends.
What is a share buyback programme and why is it important for shareholders?
Share buyback is a form of remuneration for a company's shareholders. A share buyback is when companies buy back their own shares from the market, cancel them and, ultimately, reduce share capital. With fewer shares in circulation, each shareholder gets both a larger stake in the company and a higher return on future dividends.
What are the benefits of a share buyback
Here are some of the ways that buybacks work to shareholders' advantage under normal market conditions:
- First, since the company’s value remains the same but the supply of shares is lower, the share price will increase. However, that depends on market behaviour.
- Second, the earnings per share (EPS) should increase because fewer shares are in circulation. Shareholders will have a greater stake in the company’s profits.
- Unless a shareholder chooses to offload their shares, a buyback is a tax-free transaction.
Imagine a listed company with 1,000 shares, and 100 (10%) of them are held by one shareholder. The company runs a share buyback programme and purchases 100 shares, reducing total share capital to 900 shares. The shareholder, whose stake has just increased by 1.11% to 11.11%, is now entitled to more of the company's profits. Also, the share price should become more attractive to investors.
In short, a share buy-back programme allows companies to generate additional value for their shareholders. Under normal market conditions, the portion of profits that listed companies use to buy back their own shares directly benefits the price of the shares.
