The €0.10 per share dividend will be paid in cash from 1 November, with the board ratifying its intention to maintain a payout ratio over underlying attributable profit of 40-50%.

The goodwill adjustment, which is the result of a change in outlook for Santander UK, has no impact on the Group’s CET1 capital ratio or cash-flow generation.

In addition, Pamela Walkden is to join Banco Santander’s board as an independent director, subject to required approvals.

Marjolein van Hellemondt-Gerdingh to become Group’s Chief Compliance Officer, also subject to required approvals.
 

Madrid, 24 September 2019 - Banco Santander today announced that its board of directors approved its first dividend against 2019 earnings of €0.10 per share, which will be entirely paid in cash from 1 November. The amount is equal to the interim dividend paid one year ago between August (€0.065) and November (€0.035). As disclosed in 2018, starting this year, Santander shareholders will receive two annual dividend payments instead of four. The last day to trade shares with a right to receive this dividend will be 29 October and the ex-dividend date will be 30 October.

Furthermore, the Board has ratified its intention to maintain a payout ratio over the underlying attributable profit from 2019 of 40-50%, with the proportion of cash dividend per share at least that of the last year.

Goodwill adjustment
Within its annual work plan and in accordance with the relevant accounting standards, the Bank has completed a review of goodwill ascribed to Santander UK and has determined an accounting impairment of approximately €1,500 million as a result. The impairment is primarily due to a change in the outlook for Santander UK as a result of a challenging regulatory environment, including the various negative impacts of the Banking Reform Act (ring-fencing). The Act has led to an increase of approximately €40 billion in assets in Banco Santander S.A.’s London branch (of which €25 billion came from an initial transfer of assets from Santander UK), as well as an increase in costs due to the duplication of some functions, resulting in a decrease in the capacity to generate profits in Santander UK. The impairment also reflects the increase in competitive pressure in the country and the impact that ongoing uncertainty relating to Brexit has had on UK economic growth.

The impairment will be recognised in the Group's consolidated results for the third quarter of 2019. While it will impact the reported statutory profit for the quarter, it has no impact on the Group’s underlying profit, tangible book value per share or on its continued commitment to its customers. Santander’s CET1 is also not affected as goodwill is excluded from the CET1 calculation, nor is there any impact on the Group’s cash-flow generation, or its medium-term objectives as reported at the Bank’s Investor Day held on 3 April 2019 in London.

Board appointments
The appointments committee of Banco Santander has proposed that Pamela Walkden will join the board as an independent director. Ms Walkden, a British banker, will join after having served in a number of senior management positions predominantly at Standard Chartered Bank over a period of nearly 30 years including as Chief Risk Officer, Group Treasurer and Head of Internal Audit. She served as an independent member of the UK Prudential Regulation Authority (PRA) Regulatory Reform Panel and as a member of the European Banking Authority Stakeholder Group.

Ms. Walkden will replace Mr. Carlos Fernández, who has served as an independent non-executive director since 2015. Her appointment will take effect once the related authorisations have been received and will be submitted for ratification at the next General Shareholders’ Meeting of Banco Santander.

Banco Santander Executive Chairman, Ana Botín, said, “The dividend announced today shows the strength and resilience of Santander’s model. Despite some market headwinds, our unique diversification across Europe and Americas has allowed us to consistently deliver predictable results and a sustainable dividend, with cash dividend per share increasing by 174%, customer revenues growing by more than 20%, and attributable profit increasing by 87% over the last five years, whilst also increasing our capital by €25 billion. While ring-fencing reforms and Brexit have impacted profitability in the UK, it remains a critically important market, in which the Group is investing significantly to service our customers and to continue to compete.”

Commenting on the appointment of Pamela Walkden, Ms Botín said, “Pamela is an ideal board member for Santander and I am extremely pleased she is joining us. She brings a tremendous breadth of experience that complements our current board, with expertise in banking and financial services across a number of business and functional control disciplines. Finally, Pamela adds to our diversity — both as a British citizen and as a woman — which I believe is one of our fundamental strengths and vital to a successful board in today’s business environment.”

“It has been a real privilege having Carlos Fernandez as a member of our board. He has been an invaluable and always well-informed voice based on his extensive and successful experience as an international business leader. He will be missed. On behalf of the entire board, I want to extend heartfelt thanks to Carlos and my warmest welcome to Pamela. I look forward very much to her advice and counsel as we enter the next stage of our strategic transformation.”

Banco Santander’s Board will consist of 15 members, of which 60% are independent directors. With the appointment of Ms. Walkden, 40% of the Board will be female, with Santander achieving its goal of having between 40% and 60% of its Board represented by either gender. The board of Santander is diverse in gender, national origin (Spanish, British, American and Portuguese) and has broad sector representation (finance, industrial, technology and academia).

Executive appointment
In addition, following the appointments committee’s full support to the proposal, the board has approved the appointment of Ms Marjolein van Hellemondt-Gerdingh as Group Chief Compliance Officer of Santander Group, which will take effect once the required regulatory authorisations have been obtained.

She joins from DLL International B.V., Eindhoven (a subsidiary of the Rabobank Group) where she has been responsible for Compliance since January 2018. A Dutch national, Ms Hellemondt-Gerdingh previously worked at Zurich Insurance, as Group Compliance Officer, and before that at NN-Group (formerly ING Insurance/Investment Management Eurasia) in the same position.

Ms. Hellemondt-Gerdingh, who will report to the Chief Risk Officer, Keiran Foad, replaces Mónica López-Monís, who was recently appointed Global Chief Regulatory Affairs Officer.

^{IMPORTANT INFORMATION
Non-IFRS and alternative performance measures
In addition to the financial information prepared in accordance with International Financial Reporting Standards (“IFRS”), this press release contains certain financial measures that constitute alternative performance measures (“APMs”) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (ESMA) on 5 October 2015 (ESMA/2015/1415en) and other non-IFRS measures (“Non-IFRS Measures”). The financial measures contained in this press release that qualify as APMs and non-IFRS measures have been calculated using the financial information from Santander Group but are not defined or detailed in the applicable financial reporting framework and have neither been audited nor reviewed by our auditors. We use these APMs and non-IFRS measures when planning, monitoring and evaluating our performance. We consider these APMs and non-IFRS measures to be useful metrics for management and investors to facilitate operating performance comparisons from period to period. While we believe that these APMs and non-IFRS measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute of IFRS measures. In addition, other companies, including companies in our industry, may calculate or use such measures differently, which reduces their usefulness as comparative measures. For further details of the APMs and Non-IFRS Measures used, including its definition or a reconciliation between any applicable management indicators and the financial data presented in the consolidated financial statements prepared under IFRS, please see our 2018 Annual Financial Report, filed with the Comisión Nacional del Mercado de Valores (CNMV) on 28 February 2019, as well as the section “Alternative performance measures” of the annex to our 2019 2Q Financial Report, published as Relevant Fact on 23 July 2019. These documents are available on Santander’s website (www.santander.com).}

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