Shareholders and investors need to understand financial concepts about listed companies. One that really interests them is the “payout”: the share of profits that a company “pays out” to them. Below is everything you need to know about payouts.
A payout is the share of profits that a listed company will pay its shareholders. If the payout set out in the company’s shareholder remuneration policy is 50%, the company will distribute half of its net profits among its shareholders.
If that policy says the 50% payout should be split between a cash dividend and share buybacks, the formula is:
Payout = (cash dividend + share buyback)/underlying net profit. The payout is expressed as a percentage.
Remember, a dividend is cash paid to shareholders for their share in the company's profits. A share buyback and the subsequent cancellation of shares are when the company “buys back” its own shares to reduce outstanding share capital and increase its share price.
Why do payouts matter to shareholders?
The payout is an indicator that influences an investor’s decision to buy shares in a company. It shows what share of the company’s profits will be paid to shareholders, whether in a cash dividend, a share buyback or both.
What does this mean?
A payout policy can also help attract more long-term investment in a listed company. But the company must find the right balance between shareholder returns and reinvesting in its own long-term growth. A payout gives substance to shareholder remuneration policies, which influence investors’ decisions.
Santander’s payout
In application of the Bank’s ordinary shareholder remuneration policy, consisting of a total shareholder remuneration target of c. 50% of the Group’s underlying profit1, split approximately in equal parts in cash dividend payments and share buybacks, the board of directors today approved the payment of an interim cash dividend against 2026 results of 12.7 euro cents per share, equivalent to c. 25% of the Group’s underlying profit2 in the first half of 2026.
- The interim cash dividend will be paid from 2 November 2026; and
- The last day to trade shares with a right to receive the interim cash dividend will be 28 October 2026, the ex-dividend date will be 29 October 2026 and the record date will be 30 October 2026.
This distribution, together with the on-going share buyback programme that was announced on 10 August 2026 and commenced on 24 August 2026, represents the interim shareholder remuneration against the Group underlying profit3 in the first half of 2026.
The implementation of the remainder of the shareholder remuneration policy for 2026 is subject to the appropriate corporate and regulatory approvals and decisions.
1 2 3 The board of directors intends to: i) apply an ordinary shareholder remuneration policy for 2026 to 2028 results that entails allocating approximately 50% of the Group’s underlying profit (excluding non-cash, non-capital ratios impact items), split approximately evenly between cash dividends and share buybacks for 2026 results; and additionally ii) distribute excess capital at the end of the 2026-2028 period to shareholders. From 2027 results on, the ordinary shareholder remuneration policy is expected to comprise around 35% of Group underlying profit (on the same basis) in cash dividends and around 15% in share buybacks. Execution of the remainder of the ordinary shareholder remuneration policy and of the distribution to shareholders of excess capital at the end of the 2026-2028 period is subject to future corporate and regulatory decisions and approvals.
