Listed companies reward their shareholders with a portion of their profits. Cash dividends are the most common form of this reward. But some companies' shareholder remuneration offers up an alternative: the share buyback. Here we tell you about our shareholder remuneration.
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.
As a result of our strong capital generation, we expect to reward shareholders with 10 billion euros in share buy-backs for 2025 and 2026 and with excess capital, in addition to the ordinary distribution of cash dividends.
What is a share buyback programme and why is it important for shareholders?
Share buyback is a form of remuneration for a company's shareholders. A share buyback is when companies buy back their own shares from the market, cancel them and, ultimately, reduce share capital. With fewer shares in circulation, each shareholder gets both a larger stake in the company and a higher return on future dividends.
What are the benefits of a share buyback
Here are some of the ways that buybacks work to shareholders' advantage under normal market conditions:
- First, since the company’s value remains the same but the supply of shares is lower, the share price will increase. However, that depends on market behaviour.
- Second, the earnings per share (EPS) should increase because fewer shares are in circulation. Shareholders will have a greater stake in the company’s profits.
- Unless a shareholder chooses to offload their shares, a buyback is a tax-free transaction.
Imagine a listed company with 1,000 shares, and 100 (10%) of them are held by one shareholder. The company runs a share buyback programme and purchases 100 shares, reducing total share capital to 900 shares. The shareholder, whose stake has just increased by 1.11% to 11.11%, is now entitled to more of the company's profits. Also, the share price should become more attractive to investors.
In short, a share buy-back programme allows companies to generate additional value for their shareholders. Under normal market conditions, the portion of profits that listed companies use to buy back their own shares directly benefits the price of the shares.
