The bank will pay a final cash dividend from 2021 results of 5.15 euro cents per share while also completing a further share buyback of approximately €865 million, subject to necessary approvals.
Once completed, the total amount allocated to shareholders against 2021 results, including the interim dividend and buyback completed in Q4 2021, would be around €3.4 billion, representing an equivalent yield of 7%.
The group also announced changes in its management structure while nominating Germán de la Fuente as a new independent director, subject to necessary approvals.
Madrid, 24 February 2022.
Banco Santander has called its 2022 Annual General Meeting (AGM), which is expected to take place on 1 April 2022 in Ciudad Grupo Santander (Boadilla del Monte, Madrid). Shareholders will be able to participate in the AGM remotely, including through the group’s corporate website (www.santander.com).
New cash dividend and share buyback
At the AGM, shareholders will be asked to approve, among other things, a final cash dividend of 5.15 euro cents per share, payable from 2 May 2022 as part of a final distribution from 2021 earnings, which also includes a second share buyback worth €865 million, to be launched after necessary regulatory approvals are obtained.
In the fourth quarter of 2021, Santander paid an initial cash dividend against 2021 results of 4.85 euro cents per share, and completed a buyback amounting to approximately €841 million. Accordingly, as a result of the new cash dividend and buyback announced today, the total capital distributed to shareholders against 2021 results would be approximately €3.4 billion, representing an equivalent yield of 7%1.
Furthermore, shareholders will also be asked to approve a resolution which authorises the board to reduce the group’s outstanding share capital by up to 10% by cancelling shares it may acquire, including under potential share repurchase programmes in the future. Any future repurchase programmes are subject to corporate and regulatory decisions and approvals.
Commenting on the dividend and buyback, Ana Botín, Banco Santander executive chair, said: “Our business performed extremely well in 2021, with attributable profit 25% higher than pre-covid levels in 2019 and a record profit before tax of €15.3 billion. We are on track to meet our medium-term targets set out in 2019 and have already reached our capital target of 12%, thanks to our proven capacity for organic capital generation. The cash dividend and buyback announced today reflects our commitment to delivering attractive returns, as well as our confidence that investing in our shares at the current valuation creates excellent value for shareholders.”
Changes in management structure
In addition to the above, Santander also announced changes to its structure to consolidate management of its strategy and new tech growth engines, PagoNxt and Digital Consumer Bank, under the remit of executive chair, Ana Botín, while Santander’s regions, countries and global businesses will continue to report to CEO, José Antonio Álvarez. These changes are designed to accelerate Santander’s digital transformation initiatives and sharpen operational execution in line with the company’s goal to increase connectivity across the group and become the best open financial services platform. Furthermore, to ensure the ongoing clarity of roles between the executive chair and the CEO in line with governance best practice, the CEO will report exclusively to the board.
The executive committee, chaired by the executive chair, will continue to ensure effective coordination and prioritisation as it does today, while control functions will continue to have direct access to the board and its committees.
Commenting on the management changes, Ana Botín said, “The changes allow a dedicated management focus on long-term strategy and growth initiatives as we build the Santander of tomorrow, while at the same time ensuring we continue to support our customers today and drive strong financial and operational performance across our regions and businesses. As well as aligning our model to peers, the changes ensure we continue to meet the highest standards of governance with a clear differentiation between the executive chair and CEO roles.”
The changes are consistent with supervisory expectations and build on a series of governance enhancements introduced by Santander since 2014, including the appointment of the bank’s first lead independent director; an increase in the proportion of independent directors on the board; a significant improvement to the board’s diversity and geographic and sectorial expertise; the establishment of the responsible banking, sustainability and culture committee; and the appointment of a new international advisory board.
Appointment of Germán de la Fuente as an Independent Director
The bank’s board of directors has submitted to the AGM the appointment of Germán de la Fuente as a new independent director. He will join the board once all regulatory approvals are obtained.
Germán de la Fuente is Spanish and has long and broad experience in the auditing sector. He has developed his professional career at Deloitte, where he has been managing partner of Audit & Assurance in Spain since 2007 and chair and CEO of Deloitte, S.L. from 2017 until February 2022. He was also a member of the global board of directors of the firm from 2012 to 2016 and of the global audit and risk services committee until June 2021.
De la Fuente will replace Álvaro de Souza, who has been a director since 2018 and was non-executive chairman of Santander Brasil from 2017 until 2021. Santander’s board of directors is comprised of 15 members, of which two thirds are independent.
Commenting on the board refreshment, Ana Botín said, “I would like to thank Alvaro de Souza for his outstanding contribution to Santander over the past five years and wish him every success for the future. I am confident that Germán de la Fuente will be an excellent new addition to the board and am pleased to recommend his appointment to shareholders.”
 Based on Banco Santander’s average share price during 2021 (€3.01).
 The agenda can be found in the CNMV website as “other regulated and corporate information” and in the Santander corporate website.