Santander will confirm today at its annual general meeting (AGM) that the bank expects “to maintain high profitability in the Americas while seeing improved profitability in Europe.”
The business has remained strong in the first quarter of 2022, with loan origination returning to pre-pandemic levels.
The bank will also seek approval at the AGM for a final dividend against 2021 results of 5.15 euro cents per share, to be paid from 2 May 2022. If approved, total shareholder remuneration (cash dividend + share buyback) against 2021 earnings will be €3.4 billion, equivalent to a yield of 7%.
Madrid, 1 April 2021.
Banco Santander will today reiterate its 2022 financial targets at the group’s annual general meeting (AGM), to be held at Santander’s corporate centre in Boadilla del Monte.
In her address to shareholders, Santander’s executive chair, Ana Botín, will say, “Our business model and unique diversification provide a resilient foundation for growth. We expect to maintain high profitability in the Americas, while seeing improved profitability in Europe. As a result, based on current economic consensus, we are confident of achieving the 2022 financial targets we announced in February.”
In February, the bank outlined its financial targets for 2022, including: mid-single digital revenue growth (in constant euros); cost-to-income ratio of 45%; underlying return on tangible equity (RoTE) above 13%; and a fully loaded CET1 capital of 12%. The bank also aims to deliver growth in EPS, and the sum of the tangible net asset value (TNAV) per share and dividend per share.
Botín will state that “diversification has proved to be a key competitive advantage during the 2008 financial crisis, the 2011 sovereign debt crisis, and the pandemic, and explains why Santander has always performed among the the most resilient banks in all stress tests. Furthermore, our earning per share (EPS) has had the lowest volatility compared to our peers in the last 20 years.”
Commenting on the bank’s performance in 2022, Ms Botín will say, “In the first quarter of 2022, the commercial activity has remained strong with revenues in line with the last quarter and new lending returning to pre-pandemic levels, increasing by an estimated 8% year-on-year. Furthermore, efficiency and cost of credit remained in line with the plan, and with our underlying RoTE above 13% and fully loaded CET 1 at 12% in the first quarter.”
At the AGM today, Banco Santander will seek shareholder approval for a final cash dividend against 2021 results of 5.15 euro cents per share, to be paid from 2 May 2022. Taken together with the interim dividend paid in November 2021, the total cash dividend paid against 2021 results will be 10 euro cents per share. Including share buybacks, total shareholder remuneration against 2021 results would be €3.4 billion, equivalent to a yield of 7%1.
Botín will confirm today that the bank will continue to target a total shareholder remuneration equivalent to 40% of underlying profit. Botín will also reiterate that in the medium term, the bank aims to achieve an underlying return on tangible equity and cost-to-income ratio at around 15% and 40%, respectively, while maintaining a fully loaded CET1 capital of 12%.
Shareholders representing at least 68% of the bank’s share capital, a new record, are expected to participate at the hybrid AGM, with some present at the bank's corporate centre and others connected remotely. Among the other items shareholders will vote to approve are the financial statements for 2021, in which the Group achieved record pre-tax underlying profit of €15,260 million and attributable profit of €8,124 million. Shareholders will also vote to grant the board of directors’ authority to reduce the Group's issued share capital by up to 10% by repurchasing and then cancelling shares through future buyback programmes. Any future share buyback programme is subject to corporate and regulatory decisions and approvals.
Furthermore, shareholders will also vote on the appointment of Germán de la Fuente as independent director and the re-election as directors of José Antonio Álvarez (CEO), Belén Romana and Henrique de Castro (independent external directors) and Luis Isasi and Sergio Rial (external directors).
Santander does not have a presence in Russia or Ukraine, and its direct credit exposures are negligible (€80 million in total). The bank has, however, taken several actions to support the humanitarian response. Commenting on the humanitarian crisis, Ms Botín will say, “Now is the time to help. I am especially proud of the Poland-Spain refugee corridor we have organized in collaboration with the Spanish government which has allowed 180 people to safely reach Spain, and the provision of the Solaruco Building in our Boadilla del Monte headquarters as temporary accommodation for Ukrainian children suffering from cancer-related diseases and their families.”
 Per Banco Santander's average share price of €3.01 in 2021.
 Implementation of shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals.
 Reconciliation of underlying results to statutory results, available in the Alternative Performance Measures section of the group’s 2021 financial report.