(Bloomberg) -- Banco Santander SA announced a buyback for as much as €1.5 billion ($1.7 billion) as it makes good on a pledge to boost investor payouts.
The new program is scheduled to end no later than Jan. 3 and will be equivalent to about a quarter of underlying profit in the first half of this year, the Spanish lender said Tuesday in a regulatory filing.
The latest buyback follows another one for €1.5 billion that Santander announced in February when it also increased the target payout ratio to about 50% of underlying profit, from 40% previously.
Santander last year achieved its highest profit ever, underlining how it has become one of the largest beneficiaries of the rate hikes carried out by the European Central Bank. Though some of the tailwind is set to fade now that the ECB has started cutting rates, analysts still predict Santander’s profitability to rise to yet another record this year.
The shares rose 2.1% at 10:07 a.m. in Madrid, leading European bank stocks higher.
The Spanish bank made an underlying profit of €6.06 billion during the first six months of 2024. Analysts anticipate net income will exceed €12 billion for the full year.
The new buyback program is the first share repurchase on this year’s results and will represent about 2.14% of the bank’s share capital, Santander said.
The lender will implement the buyback in such a way that the average purchase price doesn’t “exceed the tangible book value per share at the end of the last published quarter at any time,” it said. As of June 30, the tangible book value per share was €4.94.
(Updates with details and context throughout.)
©2024 Bloomberg L.P.
