REG - Banco Santander S.A. - Further re dividend declaration

Banco Santander SAAnnouncement

24/02/2022 15:00

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RNS Number : 7568C  Banco Santander S.A.  24 February 2022

Santander calls AGM and announces new cash dividend and share buyback, taking
the total amount allocated to shareholders against 2021 results to
approximately €3.4 billion

 

 

·      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% 1  (#_ftn1) .

·      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 - PRESS RELEASE

Banco Santander has called its 2022 Annual General Meeting (AGM) 2  (#_ftn2) ,
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 (http://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."

 

 

Important information

Non-IFRS and alternative performance measures

This document contains, in addition to the financial information prepared in
accordance with International Financial Reporting Standards ("IFRS") and
derived from our financial statements, 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").
These financial measures that qualify as APMs and non-IFRS measures have been
calculated with information from Santander Group; however those financial
measures  are not defined or detailed in the applicable financial reporting
framework nor have been audited or 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 our management and investors to compare operating performance between
accounting periods, as these measures exclude items outside the ordinary
course performance of our business, which are grouped in the "management
adjustment" line and are further detailed in Section 3.2 of the Economic and
Financial Review in our Directors' Report included in our Annual Report on
Form 20-F for the year ended 31 December 2020. Nonetheless, these APMs and
non-IFRS measures should be considered supplemental information to, and are
not meant to substitute IFRS measures. Furthermore, companies in our industry
and others may calculate or use APMs and non-IFRS measures differently, thus
making them less useful for comparison purposes. For further details on APMs
and Non-IFRS Measures, 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 the 2020
Annual Report on Form 20-F filed with the U.S. Securities and Exchange
Commission (the "SEC") on 26 February 2021, as updated by the Form 6-K filed
with the SEC on 14 April 2021 in order to reflect our new organizational and
reporting structure, as well as the section "Alternative performance measures"
of the annex to this Banco Santander, S.A. ("Santander") Q4 2021 Financial
Report, published as Inside Information on 2 February 2022. These documents
are available on Santander's website (www.santander.com). Underlying measures,
which are included in this document, are non-IFRS measures.

The businesses included in each of our geographic segments and the accounting
principles under which their results are presented here may differ from the
included businesses and local applicable accounting principles of our public
subsidiaries in such geographies. Accordingly, the results of operations and
trends shown for our geographic segments may differ materially from those of
such subsidiaries.

Forward-looking statements

Banco Santander, S.A. ("Santander") advises that this document contains
"forward-looking statements" as per the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. These statements may be identified by words
like "expect", "project", "anticipate", "should", "intend", "probability",
"risk", "VaR", "RoRAC", "RoRWA", "TNAV", "target", "goal", "objective",
"estimate", "future" and similar expressions. Found throughout this document,
they include (but are not limited to) statements on our future business
development, economic performance and shareholder remuneration policy.
However, a number of risks, uncertainties and other important factors may
cause actual developments and results to differ materially from our
expectations. The following important factors, in addition to others discussed
elsewhere in this document, could affect our future results and could cause
materially different outcomes from those anticipated in forward-looking
statements: (1) general economic or industry conditions of areas where we have
significant operations or investments (such as a worse economic environment;
higher volatility in the capital markets; inflation or deflation; changes in
demographics, consumer spending, investment or saving habits; and the effects
of the COVID-19 pandemic in the global economy); (2) exposure to various
market risks (particularly interest rate risk, foreign exchange rate risk,
equity price risk and risks associated with the replacement of benchmark
indices); (3) potential losses from early repayments on our loan and
investment portfolio, declines in value of collateral securing our loan
portfolio, and counterparty risk; (4) political stability in Spain, the United
Kingdom, other European countries, Latin America and the US (5) changes in
legislation, regulations, taxes, including regulatory capital and liquidity
requirements, especially in view of the UK exit of the European Union and
increased regulation in response to financial crises; (6) our ability to
integrate successfully our acquisitions and related challenges that result
from the inherent diversion of management's focus and resources from other
strategic opportunities and operational matters; and (7) changes in our access
to liquidity and funding on acceptable terms, in particular if resulting from
credit spreads shifts or downgrade in credit ratings for the entire Group or
significant subsidiaries.

Numerous factors could affect our future results and could cause those results
deviating from those anticipated in the forward-looking statements. Other
unknown or unpredictable factors could cause actual results to differ
materially from those in the forward-looking statements.

Forward-looking statements speak only as of the date of this document and are
informed by the knowledge, information and views available on such date.
Santander is not required to update or revise any forward-looking statements,
regardless of new information, future events or otherwise.

 

No offer

The information contained in this document is subject to, and must be read in
conjunction with, all other publicly available information, including, where
relevant any fuller disclosure document published by Santander. Any person at
any time acquiring securities must do so only on the basis of such person's
own judgment as to the merits or the suitability of the securities for its
purpose and only on such information as is contained in such public
information having taken all such professional or other advice as it considers
necessary or appropriate in the circumstances and not in reliance on the
information contained in this document. No investment activity should be
undertaken on the basis of the information contained in this document. In
making this document available Santander gives no advice and makes no
recommendation to buy, sell or otherwise deal in shares in Santander or in any
other securities or investments whatsoever.

Neither this document nor any of the information contained therein constitutes
an offer to sell or the solicitation of an offer to buy any securities. No
offering of securities shall be made in the United States except pursuant to
registration under the U.S. Securities Act of 1933, as amended, or an
exemption therefrom. Nothing contained in this document is intended to
constitute an invitation or inducement to engage in investment activity for
the purposes of the prohibition on financial promotion in the U.K. Financial
Services and Markets Act 2000.

Historical performance is not indicative of future results

Statements about historical performance or accretion must not be construed to
indicate that future performance, share price or results (including earnings
per share) in any future period will necessarily match or exceed those of any
prior period. Nothing in this document should be taken as a profit forecast.

 

 1  (#_ftnref1) Based on Banco Santander's average share price during 2021
(€3.01).

 2  (#_ftnref2) The agenda can be found in the CNMV website as "other
regulated and corporate information" and in the Santander corporate website.

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