Banco Sabadell is showcasing its capacity to generate capital and potentially increase the dividend amid BBVA’s takeover bid. It closed September with 13.8% CET1 after collecting 32 basis points in three months. Their target is 13 percent, which means a figure of over 638 million.
By the end of September, the utility had reached a record 13.80% at fully loaded CET1, the toughest ratio for measuring solvency in the industry, after accumulating 32 basis points in just three months, becoming one of the world’s largest piggy banks. The listed banks accumulated during this period and were equalized with Unicaja, which had a maximum of 15.4% as its reference.
For the rest of the listed companies, the increase in the parameter varies between 0.12% achieved by Santander and Bankinter, which repeated the 12.46% in June in the records. Sabadell’s CEO, César González-Bueno, argued at the presentation of the latest results that the ability to generate capital was a confirmation of the organization’s ability to create value for shareholders “on a recurring basis” and “a solo project of Banco Sabadell”. “. In that presentation, the increase in the rate between September 2023 and September 2024 was estimated to be 59 basis points.
Progress from 2021
The organization has improved the ratio consistently since 2021, but this is now highlighted in the face of the takeover bid launched by BBVA, where both organizations are playing cards and struggling to explain the growth potential in business, accounts and profitability. Using macro dividends to convince the investor of his position. With the launch of the offer, Sabadell announced that its strategic plan commits to paying $2,400 million to shareholders through dividends and share buybacks. In June, he increased the bet to 2.9 billion, and although the figure was not increased again because any payout had to be approved by the board of directors, González-Bueno paved the way by ensuring that the figure was a “floor”. in the final presentation of the results.
The business had to freeze ongoing share buybacks due to the takeover bid, increasing the percentage of profits to be distributed or paid as dividends to 60%, but committed to distributing excess capital above 13%. -80 points at the end of September. If the threshold was 12% like BBVA or CaixaBank. The surplus above 13 percent, which is determined as the target threshold for the activity, is around 638 million euros and will reach 1 billion 437 million compared to 12 percent.
The best record belongs to Unicaja with CET1 of 15.4% and the same 32 basis point increase in the third quarter. In the ratio ranking, it is followed by BBVA with 12.84%, with an increase of 0.09 points in three months, and it made the largest dividend payment in history, almost 1 billion 700 million in October. The business also had to put share buybacks on hold due to the takeover bid.
Bankinter, the only publicly traded bank that ignores this investor remuneration formula, added 0.12 points in the third quarter, taking CET1 to 12.56%. The policy of distributing 50% of profits as payment remained consistent. At Santander, the rate is unchanged from 12.46% in June, and it will also commit over 6,000 million this year in equal proportions between dividends and securities buybacks, with a strategy of distributing 50%.
This year, CaixaBank increased its fee commitment from 9,000 to 12,000 million in its 2021-2024 strategic plan. Its CET1 increased by 0.02 points to 12.24% in the third quarter and there is a commitment to distribute the excess above 12%.
It takes more time to decide CNMC values
One of the key points of BBVA’s offer to acquire Sabadell is the opinion of the National Markets and Competition Commission (CNMC). Whether the body will approve the transaction in the so-called Phase I or Phase II. At this stage, it needs to conduct a more in-depth review and even decide whether to grant third parties the right to a hearing. BBVA has expressed its commitment to speed up the resolution, but according to Bloomberg, it may take even more time for the institution to decide. Although the date is not certain, the decision may be made on the 13th of the month.
